Early last year, the Māori Council filed an urgent claim with the Waitangi Tribunal seeking a recommendation that the Crown not proceed with the proposed partial sale of state-owned enterprises (SOEs). After the hearing had been split into two parts, one urgent stage and one second stage full review of Māori interests in water, the Tribunal’s urgent response in August 2012 concluded that Māori have interests in water in the nature of ownership.
As a result of the Tribunal recommendations, the Crown undertook some (rather limited) consultation with Māori on the proposed “shares plus” concept. After a couple of hui held around the country, the Crown concluded that its capacity to recognise Māori rights to water and to provide redress in relation to the same would not be impaired by the proposed sale.
In response, the Māori Council filed an application for judicial review in the High Court seeking declarations that the Crown’s proposed Order in Council to convert the SOEs to Mixed Ownership Model companies (MOMs), whose shares can be owned by persons other than the Crown. In essence, the Council submitted that the selling of shares to an MOM would breach the principles of the Treaty because it would prejudice Māori claims to water (in that it would be contrary to s 9 of the State owned Enterprises Act 1986 and s 45Q of the Public Finance Act 1989, which protect “the principles of the Treaty” in relation to Crown actions).
The Council and the additional applicants were unsuccessful in the High Court, where Ronald Young J held in December 2012 that because the sale of shares will be achieved by primary legislation, it could not be questioned/investigated by a High Court in relation to whether the action complies with the principles of the Treaty.
The case went straight to the Supreme Court which held that the proposed sale of the shares was in fact reviewable by the Court and that the Court should ensure that the proposed sale is consistent with the principles of the Treaty (therefore disagreeing with Ronald Young J). The Supreme Court further held that in spite of the decision being reviewable, the partial privatisation of Mighty River Power would not impair to a material extent the Crown’s ability to remedy any Treaty breach in respect of Māori interests in the River. The main reasons for this were:
In terms of the relevant factors to assess, the Supreme Court in particular looked at and took into account the following:
The Government has now launched its plans to sell Mighty River Power and shares of other SOEs are due to follow in due course. So what does this loss mean for Māori, and was it in fact a “loss”?
Lawyers have argued that some of the Supreme Court’s comments have opened a few doors for Māori to make further claims. For instance, the Court noted that a case might be brought on the basis that subsisting customary rights may be affected by partial privatisation which justifies a halt to the asset sales (bearing in mind that the applicants would be faced with the same difficulty in showing that the such a sale would amount to a “material impairment” in spite of the undertakings/assurances from the Crown noted above).
Further, the fact that the Crown made certain assurances and undertakings in relation to the changed status will, according to existing case law, create a legitimate expectation that the Crown will act in accordance with those assurances (and failing to do so could give rise to a successful challenge in Court).
In summary, while the Māori Council failed to stop the sale of Mighty River Power shares, they did in fact succeed on a point of principle, namely that the Crown is bound to comply with the principles of the Treaty before deciding to sell the shares. When seen in light of the assurances given by the Crown (which due to the Supreme Court’s reliance on the same effectively puts the Crown “on notice” of the need to stand by its word) it is clear that while the Crown may have won the battle, the war is very much still “on track” for Māori. The Government is no longer free to implement the asset sales freely and without consideration for Māori rights to water but rather has to abide by the “concessions” made in the Supreme Court.
If you would like further information please contact Aidan Warren on 07 958 7426.