High Court judge Justice Ronald Young's close questioning of Waikato River iwi submissions on the Government's asset sales plan this morning does not indicate he believes the arguments lack merit, the Maori Council says.

The High Court bid to block the Government's plan to partially privatise Mighty River Power met with early resistance as it got underway this morning in Wellington.

The Waikato River Dam Trust, which comprises Waikato Tainui, Ngati Ata, Pouakani and other river iwi and hapu, led submissions before Justice Young.

The trust's lawyer, Helen Cull QC, told Justice Young she would argue that a plan to move Mighty River Power from the State Owned Assets Act to the Public Finance Act without first ensuring there was as mechanism for the recognition of Maori proprietary rights and interests in water was inconsistent with the principles of the Treaty of Waitangi, and therefore unlawful.


However, Justice Young challenged a number of points raised in Ms Cull's submissions.

He told her there was nothing to prevent the Government from recognising Maori proprietary rights and interests in water following the partial sale by amending the Resource Management Act.

Ms Cull argued it would be difficult to that as it may cut across the rights of those who bought shares in the company on the assumption the company would pay nothing for the water it used in its power stations.

However, Justice Young said Parliament could and did change the commercial environment under which companies operated and it was its sovereign right to do so.

Justice Young also closely questioned Ms Cull on her argument that Section 27 of the SOE Act, which provides mechanisms for earmarking power company assets for future treaty settlements, would be subverted by Mighty River being removed from the legislation.

Maori Council spokeswoman Rahui Katene downplayed the significance of Justice Young's challenges to Ms Cull's arguments.

"I think that he has an open mind and he is trying to get to what the argument is about. Once he's heard what the Crown has got to say then he's able to look at it on balance, but at this stage he's got to keep an open mind and he's got to make sure he understands what the argument is."

Following the trust's submissions, the Maori Council will put its case to court which will argue the partial sale before Maori rights and interests are dealt with is unconstitutional.

The Crown will make its submissions from tomorrow afternoon onwards in the hearing which is scheduled to run for four days.

The Government plans to sell shares in Mighty River Power company in the first stage of its $5 billion to $7 billion "mixed ownership model" some time between March and June next year.