Thursday, February 28, 2013

Three quick points about yesterday’s Supreme Court decision

Yesterday the Supreme Court issued its decision in NewZealand Māori Council v Attorney-General and dismissed the Māori Council’s appeal in relation to the proposed partial privatisation of Mighty River Power. As has been widely reported, the result of the Supreme Court decision is that the Government can now proceed with the sale of shares in Mighty River Power.  There will no doubt be plenty of analysis and comment on this decision, but I just wanted to touch on three interesting points that struck me when I was reading the Court’s judgment.

Treaty principles reinforced
Even though the outcome of the Supreme Court decision is the same as the outcome of the High Court decision, the Supreme Court overrules one key aspect of Justice Ronald Young’s reasoning.  Justice Young found that the proposed sale of shares in Mighty River Power was not subject to an action in judicial review that is based on consistency with the principles of the Treaty of Waitangi.  However, the Supreme Court disagreed, drawing for support on the approach of the Court of Appeal in the 1987 SOE case:

The Court of Appeal’s recognition that s 9 stated a fundamental principle guiding the interpretation of legislation which addressed issues involving the relationship of Maori with the Crown, must accordingly form the basis of the approach of New Zealand courts to any subsequent legislation requiring that the Crown act consistently with Treaty principles. The judgment gives no support to narrow approaches to the meaning of such clauses. In re-enacting the identical provision to act consistently with Treaty principles, in the mixed ownership companies legislation, Parliament’s purpose is that the Treaty provisions in Part 5A carry the broad meaning, and be given the broad application reflected in the judgments of the Court of Appeal concerning s 9 in the SOE case. The Parliamentary purpose is clear: s 45Q must receive the same interpretation as s 9 of the State-Owned Enterprises Act has received, particularly from the Court of Appeal in the SOE case, and also from the Privy Council in New Zealand Maori Council v Attorney-General (Broadcasting Assets case). Section 45Q brings with it the heritage of s 9 and this Court, reflecting what is the purpose of Parliament, must invest it with equivalent significance. It is on that basis that we address the arguments of counsel concerning the legislation.

Consequently, the Supreme Court determined that decisions in relation to the sale of shares in Mixed Ownership Model companies can be challenged on the basis of inconsistency with the principles of the Treaty of Waitangi.  This is, I think, an important re-strengthening of Treaty principles.

Redress and material impairment
Nevertheless, the Court went on to conclude that, because there was no ‘material impairment’ to the Crown’s ability to recognise Māori rights or provide redress, the sale of shares would not be inconsistent with Treaty principles.  The Court sets out its approach to this issue as follows:

As is apparent, we are prepared to accept that privatisation may limit the scope to provide some forms of redress which are currently at least theoretically possible. But in assessing whether this amounts to “material impairment”, regard must be had to (a) the assurances given by the Crown, (b) the extent to which such options are substantially in prospect, (c) the capacity of the Crown to provide equivalent and meaningful redress, and (d) the proven willingness and ability of the Crown to provide such redress.

I understand the Court’s view that most of the options for rights recognition and redress will still be at least theoretically possible after the sale of shares in Mighty River Power.  However, given that the sale of shares will rule out the possibility of at least some forms of redress that are currently possible (though perhaps unlikely), I wonder whether the agreement of Māori should be sought before those options are removed.  That approach would seem to me to be consistent with the way in which the protection mechanism was agreed between Māori and the Crown following the SOE case.  If, for example, the ‘shares-plus’ scheme was seen by Māori to be the only way of effectively recognising their interests in water bodies, is it consistent with Treaty principles for the Crown to give up its ability to provide that redress without at least entering into some discussion about the issue with Māori?

Which leads to the issue of consultation.  The Supreme Court accepted that consultation with Māori was necessary following the Waitangi Tribunal’s Freshwater report, but noted that consultation occurred and was adequate:

The fact that the Crown ultimately rejected the Waitangi Tribunal suggestion as inappropriate is not a basis from which it can be inferred that the consultation was empty or pre-determined. Indeed, this complaint is difficult to separate out from the substantive issue of Treaty compliance in the privatisation. If the Crown was justified in considering that the privatisation did not set up an impediment to recognition of Maori interests in water, it is difficult to infer that the consultation was inadequate simply from the fact that the idea of “shares plus” was rejected and there was no change in the Crown’s proposal as a result. For these reasons, we consider there is nothing in the consultation point that is not resolved with the substantive issue of whether the sale of shares was consistent with the principles of the Treaty.

As I have noted previously (see here and here), I have had real concerns about the way in which consultation has been undertaken in relation to the Government’s partial privatisation programme.  I accept that the technical requirement of consultation may have been met, and therefore understand the Supreme Court’s decision on this point.  However, what this does suggest to me is that bare requirements of consultation are not likely to be of much help to Māori when it comes to issues such as this.