Cabinet has decided to delay a key step towards partially privatising Mighty River Power next year until the High Court has heard a Maori Council led bid blocking the sale until Maori rights and interests in water are determined.
Cabinet was to have this morning made a final decision on an order-in-council which would have removed the company from the State Owned Enterprises Act and put it under the Mixed Ownership Model legislation allowing the sale of up to 49 per cent of its shares.
Governor-General Sir Jerry Mateparae was scheduled to sign the order this afternoon and it would have come into effect later this week.
However, following a short hearing this morning in the High Court Ronald Young set a tentative date of November 26 for the Maori Council's case to be heard.
Justice Young indicated he was concerned that the council's case would be prejudiced if it was heard after the order-in-council took effect.
Attorney General Chris Finlayson was briefed on the court proceedings ahead of this morning's Cabinet meeting where it was decided not to proceed with the order-in-council until after the hearing.
Maori Council spokeswoman Rahui Katene said Cabinet's decision not to proceed with the order-in-council and the setting of a court date was a victory.
"(The Government) are holding off on their timetable which they had set down very strongly but it's not yet a full victory we haven't had a chance to sit down and talk with the Crown."
Ms Katene said going to court was a last resort for the council which had always sought negotations with the Crown over the water issue.
Tamati Cairns, chairman of Waikato hapu Pouakani which spearheaded this morning's court action was also pleased with Cabinet's decision, "it allows us to gain traction".
He said he had always been confident of securing the High Court hearing of his hapu's claim, "I think we're here for the right reasons".
The Maori Council and Pouakani are represented by Felix Geiringer Helen Cull QC Annette Sykes and Kath Ertel while Mr Goddard is being assisted by Crown Law's Jason Gough.
Mr Geiringer and his colleagues are arguing that the Crown has failed to implement mechanisms that will protect claimed Maori interests in freshwater and geothermal resources and that because its actions are inconsistent with the Treaty of Waitangi as required under Section 9 of the State-owned enterprises Act, its actions under the act furthering the sale are unlawful. The council statement of claim also says that the "defective consultation" makes the sale unlawful.
If the Maori Council is successful next month, the court will issue a declaration that the Government ought not to proceed - the courts do not issue injunctions against the actual Crown.
Prime Minister John Key this morning said people should "brace themselves" for a protracted court process over the sale of state-owned enterprise shares.
My Key said in all likelihood "it will not just go to the High Court - I imagine it will go to the Court of Appeal and potentially the Supreme Court."
He also hoped the courts would consider the Government's programme.
"The courts are likely and will hopefully have a mind to the Government's programme which is we want to bring Might River Power to the market in an early as March next year.
"Hopefully they will put a bit of urgency around the hearing of the applications to the courts."
Mr Key said the Government had received advice about possibly speeding up the sales process.
But in was practice that when a Government had a timetable "the courts are likely to want to accommodate that timetable."
The story so far
Jan: Govt faces outcry from Maori at prospect that a Treaty of Waitangi clause might not apply to partially privatised companies. After hui, Govt says Treaty clause would stay but would apply to Govt, not private shareholders.
Feb: Maori Council with 10 iwi and hapu file claim with Waitangi Tribunal that sale would affect interests in water and geothermal resources.
Aug: Tribunal interim report agrees with claim, and suggests "shares plus" solution to give iwi stake and governance role in SOEs.
Sep: Govt announces delay in sales from late 2012 and plans hui to strengthen legal position.
Oct 15: Govt rejects "shares plus" after hui and says it will proceed with plans to sell.
Oct 19: Maori Council files High Court bid to halt sale.