Mai Chen

Public and employment law specialist Mai Chen on current events

Mai Chen: Waitangi alive and well in court

173 years on, issues relating to the Crown-Maori relationship, such as water claims, are still live in the courts.

The Arapuni Dam has come up in relation to asset sales, but its use shouldn't be affected by who owns other sections of the Waikato River. Photo / Sarah Ivey
The Arapuni Dam has come up in relation to asset sales, but its use shouldn't be affected by who owns other sections of the Waikato River. Photo / Sarah Ivey

Waitangi Day remains an annual reminder of the 173-year Crown-Maori relationship - a relationship that is still very much a live subject in the New Zealand Courts.

The New Zealand Maori Council's appeal in the water case heard at the end of last week in the Supreme Court attempted to convince the court that the sale of Mighty River Power shares cannot go ahead as planned. During the hearing, before a full bench of the Supreme Court, Chief Justice Dame Sian Elias' comments suggested that she was inclined to the view that the Crown's ability to recognise Maori interests would be diminished once it reduced its shareholding (because of the need to consider minority shareholder interests).

Allowing for some contingency tweaking, the Government still expects to make between $5 and $7 billion from its asset sale process to spend on schools, hospitals, roads and rail. The Crown lawyer also submitted that the sale would "strengthen the stock exchange and improve public scrutiny of the companies through the constant reporting process."

Media reporting on the case has picked out different aspects of the court's questioning of counsel. The National Business Review reported Justice Elias telling Maori Council lawyer Colin Carruthers QC that he needed to prove the "mechanisms" available to provide recognition for Maori are no longer sufficient if a third party is introduced.

On the other hand, the Herald reported Justice Elias' comment after questioning Carruthers in which she suggested the Crown could potentially only divest 25 per cent shareholding until there was some resolution and protective mechanism found for Maori interests. This does not mean the Supreme Court would make a restraining order accordingly, only that the Chief Justice was floating that idea. The Chief Justice also commented last Friday that the sale of power company shares would "inevitably"create barriers to the Government's ability to provide redress for Maori rights.

Two comments do not automatically equate to a guaranteed victory for the Maori Council. After all, the Chief Justice is only one of five judges sitting on this case, and a 3-2 majority is all the Crown or the Maori Council needs. It is likely that different reasons will be given by members of the Supreme Court bench. Landmark cases are often distinguished by multiple judgments, and that is even if the justices all agree on the outcome. The best advice to clients is always to suspend your judgment until you have the court's judgment. It is the only one that counts, especially when it is the Supreme Court, which has the final word.

Higher courts of appeal do not generally have a reputation for quickly delivered judgments, although this judgment on water is likely to be fast-tracked. The Supreme Court has been told that preparing Mighty River Power for public listing will not begin before February 18, and that is the final window of opportunity to start the partial sale process of the state-owned enterprise. This would give the Supreme Court a little over a fortnight to make a decision. That is a very short timeframe to determine the many points of appeal brought by the Maori Council. These include issues concerning whether the share-sell down decision was reviewable by the courts and consistent with Treaty principles, and whether the statement that "no one owns the water" was an error of law.

While the Maori Council is bringing this water case on behalf of all Maori (reflecting its statutory mandate), a Waikato river iwi - Pouakani - are about to commence the second stage of their appeal to the Supreme Court. This is a discrete claim to a portion of the Waikato river based on the claimants' ancestors having sold adjacent lands (but not the river) to the Crown in the 19th century.

This is a simplistic way of describing a very legally-complex case. The strongest possible finding that the Supreme Court could make in favour of the Pouakani applicants might be that the Crown breached a fiduciary duty to the Pouakani applicants (or their 19th century ancestors) and held the Pouakani stretch of the Waikato river on trust for them. And there are a number of significant legal hurdles to overcome before the court could find a breach of fiduciary duty and constructive trust. These hurdles include whether the Crown can owe a private law civil duty to a Maori hapu/iwi; the fact that there are many other interests along that stretch of the river, including three substantial hydroelectricity dams; and whether such a claim is time-barred because of unconscionable delay since the original (19th century) events.

Some commentators have queried whether a successful finding would enable the Pouakani hapu to object to the sale of Mighty River Power - which of course has significant power-generating assets along the Waikato River, including along the Pouakani stretch of river.

Although superficially appealing, this argument lacks legal merit. Even if the Supreme Court found for the Pouakani applicants, for example, that the Crown held that river section on trust for them, there is no necessary connection between that interest and a power company using the water that flows along the river.

Second, the Crown's proposal to sell shares in the company is at least one or two further steps removed from the company's use of the water. These are the types of "nexus" problems that weighed with the High Court in recently dismissing the Maori Council's application for judicial review of the Crown's MOM (Mixed Ownership Model) and IPO decision(s) - now being appealed to the Supreme Court.

The first judgment in Pouakani on the preliminary question (of navigability) was issued 15 months after the hearing. The second judgment on the substantive question is unlikely to arrive much faster.

The Wakatu Incorporation (based in the Nelson area) is currently arguing a very similar case to Pouakani before the courts, alleging the Crown holds Nelson tenth reserves lands on trust for the tribe, based on how the NZ Company acquired those lands in the 1840s.

The ongoing Crown-Maori relationship and the Treaty they signed will continue to make Waitangi Day relevant to New Zealanders, and a live subject in New Zealand courts.

Mai Chen is a partner in law firm Chen Palmer and Adjunct Professor, University of Auckland Business School.

- NZ Herald

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