Judges unanimously rule sale of shares in Mighty River Power won't affect redress for Maori over any Treaty breach, while John Key dismisses Labour and Greens' call for referendum on process.

John Key's Government cleared the final hurdle for its flagship asset sales policy with a crucial Supreme Court victory over the Maori Council yesterday and is to press the go button on the sale of Mighty River shares on Monday.

The court's five judges unanimously ruled against the Maori Council's case that the sale of shares in Mighty River was a breach of the Treaty of Waitangi because it would affect the Government's ability to make redress for Maori rights and interests in water.

"The partial privatisation of Mighty River Power will not impair to a material extent the Crown's ability to remedy any Treaty breach in respect of Maori interests," Chief Justice Dame Sian Elias, and Justices John McGrath, Susan Glazebrook, William Young and Robert Chambers said in their unanimous ruling.

Prime Minister John Key said he was "always confident that we had argued the right case" and his Government was "looking to act as quickly as we can" on its flagship asset sales or "mixed ownership model" policy.


Cabinet would discuss the matter on Monday and is likely to pass the Order in Council which enacts the necessary legislation. Details on the timetable for the Mighty River sale process which the Government hopes to complete by mid-year would follow shortly after that.

The Herald understands New Zealanders may be able to "pre-register" or indicate they are interested in buying shares in Mighty River by the end of next week.

Mr Key yesterday underlined how high the stakes were for his Government in the court case, where defeat would have been "quite a setback". His Government hopes to raise as much as $7 billion from the partial sale of Mighty River, Genesis, and Meridian along with stakes in Air New Zealand and possibly Solid Energy.

"We didn't have a plan B in terms of funding our capital budget. We want to use the money we're going to get out of these companies to buy other assets without putting debt on the balance sheet."

Labour Leader David Shearer said yesterday's ruling "changes nothing".

"Yesterday 80 per cent of New Zealanders were against asset sales and today 80 per cent of New Zealanders are against asset sales."

He and Greens Co-Leader Russel Norman said the Government should halt the sales process until New Zealanders had the opportunity to vote on the matter via a referendum they are pushing for via a petition.

"Kiwis want to have their say on privatisation and the Government must listen", said Dr Norman.


But Mr Key, whose Government has the power to delay any referendum until after Mighty River and other power companies are partially privatised, dismissed that call, once again saying the 2011 election had been fought on the asset sales issue.

Meanwhile, the Maori Council, which has been battling to delay the Mighty River float for a year, was yesterday claiming a partial victory.

Maori Council lawyer Donna Hall said the court had helped future Treaty of Waitangi water claims by "noting the extensive promises and undertakings that have been made by the Crown through the course of these proceedings to the effect that it will take real steps to address the various Maori water claims".

Mr Key said his Government's decision last year to delay the Mighty River sale until this year and consult on the "shares plus" proposal raised by the Waitangi Tribunal in an urgent hearing, proved to be a good one.

Q & A
What did the Supreme Court say?

It dismissed the Maori Council challenge to the part-sale of Mighty River Power unanimously.

What did the Maori Council want?

It wanted the court to declare that the sale of shares would be unlawful on the basis it would prevent the Crown from giving redress to iwi in any settlement of their rights and interests in water, and that would be a breach of the principles of the Treaty of Waitangi.

Why would any breach of the Treaty be unlawful, if the court had found there had been a breach?

The act governing state-owned enterprises now and the new law under which partly privatised SOEs will operate contains a clause saying that "nothing in this act shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi".

Did the Crown win emphatically?

Almost, but not completely. The court had five questions it decided should be answered in the appeal, as follows:

1. Could the court even review the sale of shares? It overruled the High Court on this point and said Yes.
2. Could the court review the commencement of the sale, being the Cabinet's decision to transfer Mighty River Power out of the State-Owned Enterprises Act? It avoided giving an answer because it had already said Yes to the above.
3. Was the consultation with Maori after the Waitangi Tribunal hearing on the same case adequate? "Not inadequate" the court found.
4. Would the proposed sale of shares breach the Waikato River settlement law? No.
5. Is the proposed sale of shares in Mighty River Power inconsistent with the principles of the Treaty of Waitangi?
Not enough to stop the sale.

Was the case about ownership of water?


Is that the end of challenges over water?

No. There is another case the Supreme Court is hearing about who owns the riverbed on a particular part of the Waikato River used by Mighty River Power.

- Audrey Young