Crown lawyers came under pressure yesterday from New Zealand's top judge to explain how the sale of shares in power companies will not affect the Government's ability to make redress for Maori rights and interests in water.

The Maori Council's bid to halt the sale of shares in Mighty River Power and other state-owned power companies until a framework for compensating Maori for their interests in freshwater is established began in the Supreme Court yesterday, with supporters and observers filling the public gallery to capacity.

Queen's Counsel Colin Carruthers, who is acting for the Maori Council, argued there were various mechanisms available to the Crown that enabled it to preserve means of addressing Maori rights and interests in water.

"These mechanisms will not be available after the privatisation."


Mr Carruthers said necessary changes to the companies' constitutions to allow special classes of shares that would preserve the type of control over water used by the companies would not be possible once more than 25 per cent of the shares were sold.

He said the Crown and Maori should be directed to consult and devise a mechanism which protected the claims until they were resolved.

However, it was ultimately the Crown's obligation under Article Two of the Treaty of Waitangi to protect Maori interests in water.

"It is not for Maori to dictate to the Crown or even in the context of litigation provide the mechanism that protects."

Chief Justice Dame Sian Elias, who is leading the bench of five judges, observed that "a protective mechanism could be that the Crown will only divest 25 per cent until there's some resolution".

The Crown's lawyer David Goddard, QC, faced tougher questions than those he fielded in the High Court last year.

Chief Justice Elias quizzed him why the sale of shares in the companies to private investors was "not an additional impediment to some of the range of responses the Crown might develop" to protect Maori interests.

Mr Goddard said "no meaningful and real option" for recognising Maori interests in rivers and other water bodies would be lost by the sale. The tools of most relevance for recognising those rights involved regulatory reform and the Government's ability to do that would not be affected by the sale.

Maori Council spokeswoman Rahui Katene said she was encouraged by the Supreme Court judges' questions to both lawyers. She felt the questions were clearly intended to elicit more information rather than to attack the council's submissions as had been the case in the High Court, which gave her hope for the outcome.

The hearing continues today.