Dec 3, 2012

No, Justice Young, it's no king hit

I live with six boys; all Pakeha and all studying at Victoria. We’re a close and diverse group (if not ethnically). We range from religious to atheist, liberal to conservative and loose to sensible. Some of us were public schooled and others were private schooled and the North Island/South Island split is 5-2. Interestingly, one flatmate interned for David Cunliffe in 2011, another comes from a prominent National Party family and two others used to work for Donna Hall at Woodward Law. As you can imagine, the latter two have had some involvement and exposure to the water claim and the water case. Last week they told me that “Red Ron”, the supposedly liberal High Court Justice, appears to be leaning towards the Crown. One flatmate described him as ‘dismissive’ and ‘pre-determined’.

I don’t think this is surprising. After all, the Crown is right in arguing that the Courts cannot constrain Parliament. In the context of the water case, this means that the Courts cannot stop or declare invalid a decision or action properly made under the Public Finance Act Amendment Act 2012 (PFA). What's more, the Courts are reluctant to rule on matters of government policy. Asset sales are, I think it’s fair to say, the government’s main policy plank. As one example, in Curtis v Minister of Defence (2002) the Court refused to interfere with the Labour government’s decision to disband the air combat wing. The Court felt that it was a political not legal issue. You could reasonably argue the same principle applies.

However, emphasis on however, the orthodox rules are blurred where the Treaty is involved. Crown Law acknowledged as much in an article on judicial review where they state that “tensions arise… when disputes involve important political, Treaty or human rights issues"*. Despite the Crown’s argument that the Courts cannot review Parliament, the Maori Council and other claimants are on solid ground where they argue 1) transferring SOEs will be done via an order-in-council (an executive act) and is therefore reviewable. After all, the claimants are not asking the Court to review the merits of the PFA, but review an executive action taken under the Act AND 2) the case is directly analogous to the landmark (bad pun) case of New Zealand Maori Council v Attorney General, also known as the ‘Lands case’.

At its core, judicial review is about what the executive can lawfully do. The Maori Council and others are arguing, as I have in the past, that the government is in breach of the Treaty clause in the PFA if they remove Mighty River Power (MRP) and other SOEs from the State Owned Enterprises Act. In English, the government will be acting unlawfully. After all, there is a clear breach of the Treaty, and therefore s45(Q)(1), if a mechanism to recognise Maori rights and interests is not created and implemented. The Waitangi Tribunal held as much and even the most rudimentary application of the Lands case, broadcasting assets case** and radio frequencies case*** would find as much. An application of other Waitangi Tribunal decisions, for example Wai 1071****, will yield similar conclusions. Off the top of my head the government has failed to actively protect “Maori interests specified in the Treaty to the fullest extent”, they have failed to give sufficiently “high priority for Maori interests” and act “reasonably and in the utmost good faith”. Failing to recognise Maori wai rights and interests is a breach of the principle of active protection, failing to properly consult is a breach of the partnership principle and, I would argue, could be considered as procedural impropriety under judicial review.

I think this case will not turn, or does not turn, on what is justiciable. The case is more to do with whether privatising Mighty River Power will affect the government’s ability to recognise and compensate for the use and/or breach of Maori rights and interests. Ngai Tahu answer in the negative, but they are wrong. The Waitangi Tribunal was right to find that private shareholders are likely to push against any deal with Maori, especially if that deal decreases share prices. Why wouldn't they? The Tribunal said:

Partial privatisation will make a crucial difference to the Crown’s ability to act. Private shareholders will resist the introduction of any kind of levy, charge, resource rental or royalty that impacts on the profitability of the company and (as a result) their income and the value of their shares

Considering all of the arguments, it should be hard for Justice Young to rule against the Maori claimants. Although he could rule against us***** the Lands case is persuasive, if not binding. In that case the Court of Appeal declared that transferring land to SOEs, without establishing a mechanism to protect treaty claims to that land, would be unlawful under the Treaty clause of the SOE act. Sound familiar? Well, it is. The Maori claimants in the wai case are arguing (essentially) that there will be a breach of the Treaty if a mechanism to recognise and compensate for the use and/or breach of Maori rights and interests is not created.

When considering his decision, Justice Young should keep at the forefront of his mind Robin Cooke who said:

(the) principles require the Pakeha and Maori Treaty partners to act towards each other reasonably and with the utmost good faith.

That duty is no light one. It is infinitely more than a formality. If a breach of the duty is demonstrated at any time, the duty of the Court will be to insist that is honoured.

Whatever way Justice Young falls, we can be sure this case will be going to the appellant Courts.

Post-script: Crown Law is probably wrong in arguing that the wai issue is not justiciable (i.e. that the Court cannot rule on it because Parliament is the supreme law maker). Most Treaty litigation involves judicial review. In Treaty cases the government is usually exercising a power authorised by Parliament, but that power was or is used illegally. The approach the Courts have usually taken in judicial review is to make orders to get the parties negotiating. This is consistent with the approach in Canada, the jurisdiction closest to us on indigenous rights. The Canadian Chief Justice has said that “it is through negotiated settlements… that we will achieve… reconciliation of the pre-existence of aboriginal society (Morgan: read aboriginal rights) with the sovereignty of the Crown”.

Post-script 2: The Maori Council and other claimants can reasonably argue that international law, specifically the UN Declaration on the Rights of Indigenous Peoples, is a mandatory relevant consideration and that when interpreting the PFA and the Crown’s actions the Courts must strive for consistency with the declaration. The Supreme Court has shown that it is receptive to international law when reviewing domestic law (see Zaoui v Attorney-General (No 2 ) [2006] 1 NZLR 289; (2005) 7 HRNZ 860; [2005] NZSC 38 (Zaoui)). The declaration holds at Article 26 that “indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired”. At Article 32 it is held that “states shall consult and cooperate in good faith with the indigenous peoples… in order to obtain their free and informed consent prior to the approval of any project affecting their lands… and other resources, particularly in connection with the development utilization or exploration if mineral, water or other resources”.

*Crown Law Office. 2005. The Judge over your shoulder – A guide to judicial review of administrative decisions

**New Zealand Maori Council v Attorney-General (1994) (Privy Council)

***Attorney-General v New Zealand Maori Council (1991) (Court of Appeal)

****Waitangi Tribunal Report on the Crown’s Foreshore and Seabed Policy (2004)

*****Justice Young might find that the government is acting lawfully i.e. there is no breach of the Treaty clause because the sale of MRP will not affect the ability to recognise Maori rights and interests. Alternatively, Justice Young could use Crown Law’s “king hit” submission and find that a ruling against the government could amount to a ruling against Parliament and Parliament is supreme etc.


  1. The Key National Government can attempt to stop the Maori council –come elections with a National government in decline and a Labour/Greens/Mana coalition the governments partial share will go directly to the Maori Council in retaliation for stonewalling the Maori council. If you listen to Justice Young talking to the Mr Geiringer the entire case is predetermined -Justice Young has done a great dis-service to the New Zealand Justice system acting like the defence counsel. This will go to the Supreme Court and carry on –John Key should have looked at negotiating a deal because the Maori council will succeed –they have 170 years.

    (3) The freedom of the Crown to govern
    On the freedom of the Crown to govern, Justice Cooke ruled that:
    The principles of the Treaty do not authorise unreasonable restrictions on the right of a duly
    elected government to follow its chosen policy. Indeed, to try and shackle the Government
    unreasonably would itself be inconsistent with those principles.
    Also, Justice Bisson observed that:
    it is in accordance with the principles of the Treaty that the Crown should provide laws and
    make related decisions for the community as a whole having regard to the economic and other
    needs of the day.

    In hearing the appeal, Justice Cooke endorsed the High Court’s ruling on the matter and
    also dismissed the appeal, stating that:

    33. Te Runanga o Te Ika Whenua Inc Society v Attorney-General [1994] 2 NZLR 20, 21
    34. Ibid, p 21app.1.8 National Overview
    The essence of what has been said above is that neither under the common law doctrine of
    aboriginal title, nor under the Treaty of Waitangi, nor under any New Zealand statute have
    Maori . . . had preserved or assured to them any right to generate electricity by the use of water

    1. I know the case law well. No one is or has argued that Maori have a right to generating hydroelectricity. You've missed the point completely. The claim is that partially privatising MRP and other SOEs will affect the Crown's ability to recognise Maori rights and interests in water.

      You also miss the quote from President Cooke, as he then was, where he holds that if the Crown is to act in a manner contrary to the principles of the Treaty, as the Maori Council argues, then it must only be in "exceptional circumstances" and in "the national interest".

  3. "Partial privatisation will make a crucial difference to the Crown’s ability to act. Private shareholders will resist the introduction of any kind of levy, charge, resource rental or royalty that impacts on the profitability of the company and (as a result) their income and the value of their shares"

    Recognising Maori interests and rights in water in areas where these assets operate doesn't require any levy etc. The government will still have 51% stakes in the assets once the partial-float has been completed, they can use some of that 51% to placate maori - and together, under the principles of 'partnership', both Maori and the Crown will have the ability to wield a controlling stake in the companies.

    It's not like the government actually needs to sell these assets, it's ideological - I'm sure there can be a common ground for mana motuhake and neoliberal privatisation.

    The Waitangi Tribunal is correct to say partial-privatisation will make a 'crucial' difference to HOW the government settles these issues, but I don't agree that it makes the ultimate difference in determining whether or not the govt. CAN settle them.



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