The Maori Council's legal bid to block the Government's asset sale plan faced a strong challenge in court yesterday even as Prime Minister John Key said his Government would not negotiate if the council won.

The council, along with a coalition of Waikato iwi and hapu, took their challenge to the Government's "mixed-ownership model" or partial asset sales plan to the High Court at Wellington.

They argued that proceeding with the plan for the sale of Mighty River Power next year - 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.

The case opened with submissions from Waikato River and Dams Claims Trust lawyer Helen Cull, QC.


Her arguments that the Government's ability to make redress for property rights affected by the sale were closely questioned by Justice Ronald Young.

Justice Young said ownership of Mighty River Power would not affect the Government's ability to recognise Maori rights to fresh water.

"The obvious point is they can amend the Resource Management Act whether Mighty River Power is partly or wholly owned by the Government because Parliament can do anything - that's Parliament's right."

But Ms Cull also argued that the Government was obliged to consult Waikato Tainui before it sold Mighty River Power under legislation dealing with the 2010 Waikato River settlement. However, the Crown had failed to do that. Furthermore, she also argued that while there were theoretical mechanisms for dealing with Treaty claims over power company assets, particularly land, they had proved difficult to effect in practice after Contact Energy was privatised.

Meanwhile, a stone's throw away in Parliament, Mr Key yesterday afternoon ruled out any negotiation with the council if it won in the High Court and on subsequent appeals.

"I would mean all stages of the appeal because the basic principle here is that the Crown believes it is right. And that is the Crown does not believe that the selling of shares in any way impinges on the Government's right to register rights and interests if they believe those rights and interests are genuine."

He confirmed the Government would appeal if it lost, "and to the Supreme Court potentially".

Power challenge


The Maori Council will today challenge three aspects of the Government's process to partially privatise Mighty River Power:

* Its decision in October to convert Mighty River from a state-owned enterprise to a mixed-ownership model company.
* Its decision the same month not to proceed with "Shares Plus" or any mechanism for compensating Maori.
* The final decision to sell up to 49 per cent of the company, which has not yet been made.