Mercury NZ Limited v Waitangi Tribunal
[2020] NZHC 598
•23 March 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-129
[2020] NZHC 598
UNDER the Judicial Review Procedure Act 2016 and Part 30 of the High Court Rules BETWEEN
MERCURY NZ LIMITED
Plaintiff
AND
WAITANGI TRIBUNAL
Defendant
Hearing: 19 March 2020 Counsel:
J E Hodder QC and L L Fraser for Plaintiff V Hardy and C Tyson for Crown
A Bloomfield for the Waitangi Tribunal
P Radich QC, M K Mahuika and T N Hauraki for Wairarapa Moana Ki Pouakani Inc.M G Colson and E J Watt for Ngāti Kahungungu ki Wairarapa Tamaki Nui-ā-Rua Settlement Trust
Judgment:
23 March 2020
JUDGMENT OF SIMON FRANCE J
Introduction
[1] Mercury NZ Limited seeks interim orders under s 15 of the Judicial Review Procedure Act 2016. The orders would require the Waitangi Tribunal not to issue a document, called the First Determination, until Mercury’s judicial review challenge to a prior procedural step is determined. The orders are supported by the Crown and opposed by the two claimants Wairarapa Moana Ki Pouakani Inc (the Incorporation) and Ngāti Kahungungu ki Wairarapa Tamaki-ā-Rua Settlement Trust (the Settlement
MERCURY NZ LIMITED v WAITANGI TRIBUNAL [2020] NZHC 598 [23 March 2020]
Trust). The Waitangi Tribunal abides. The process challenge is that Mercury have been denied the ability to present evidence and make submissions.
Background
[2] The Waitangi Tribunal is hearing applications by the Incorporation and the Settlement Trust for resumption orders over land in the Waikato. Part of the land is presently owned by Mercury, subject to memorials entered under s 27A of the State- Owned Enterprises Act 1986. On Mercury’s land sit the Maraetai I and Maraetai II power stations. Another part of the land is leased by Mercury to Transpower for transmission activities, and that contains two switch-yards. On a third parcel of land there is a substation.
[3] Applications such as these are brought under s 8A of the Treaty of Waitangi Act 1975. The Tribunal must first decide if a claim is well-founded. If so, and if the claimant seeks it, the Tribunal has a power to recommend that specific land be returned to Māori ownership. The return can be on such terms and conditions as the Tribunal thinks fit. Pursuant to s 8B of the Act, any recommendation of the Tribunal to this effect is first classified as an “interim recommendation”. The making of an interim recommendation triggers a 90-day period in which the parties may enter into negotiations. After 90 days, if the matter has not been otherwise settled, the interim recommendations become final. Relevant to the present case, s 8A(3) says that when determining whether to recommend land be returned, the Tribunal is to not have regard to any change in the condition of the land or in ownership from the time immediately before the transfer of the land to a State enterprise.
[4] The Tribunal is well advanced in its hearing of the applications. It has been held the claim is well founded. Evidence has been heard in relation to the application for orders directing return of land, and closing submissions have been made. The Tribunal has indicated it intends imminently to issue a First Determination. This is the document concerning which Mercury seeks interim orders preventing its release.
[5] In terms of the statutory process, this document will not contain “interim recommendations”. The 90-day period will not be triggered. Rather the Tribunal is going to indicate what its initial position is on the key decision of whether to
recommend return. The Tribunal has indicated that if return is its initial view, it will then commence an iterative process with the parties. The purpose of this is, amongst other things, to reach a position concerning any terms and conditions that should apply to the electricity business. There have already been considerable discussions with the parties about the structure of the iterative process and a tentative timetable has been agreed.
[6] The First Determination is ready for release. The initial release date was 13 March, but this was deferred until 23 March to allow a separate process related to the claims to occur.
Mercury’s application to be heard and the Tribunal’s decision
[7] The original resumption application was made by the Incorporation. I am advised it became clear in August 2019 that resumption was a real possibility. At that point the Settlement Trust added its own application, saying that orders should not be made but if they were to be made, they should be in favour of the Settlement Trust.
[8] Mercury was served with the claimants’ initial applications. I am advised it was an observer of the hearings. An employee of Mercury was called by the Crown to give evidence about the impact any resumption order might have on the ability of Mercury to generate power.
[9] After closing submissions, the Tribunal in December last year issued its directive indicating its intention to have the iterative process and seeking input from the parties.
[10] The Crown and the two claimants filed a joint memorandum setting out a suggested process the Tribunal might follow. The Crown added its own paragraph in which it suggested that the Tribunal should hear further evidence on several matters:
(a)the “Run of River” hydro scheme;
(b)operational expenditure issues;
(c)contractual issues that may arise; and
(d)appropriate terms for the operation of the dams and power stations.
[11] In the joint memorandum, the parties also indicated the topics they consider the First Determination should address. There was unanimity amongst the parties that the First Determination should not contain formal interim recommendations that would trigger the s 8B process. However, the Tribunal should:
decide whether the land should return under s 8A(1)(a) or whether it should not return under s 8A(1)(b), providing the reasons why.
[12] In its Directions of 20 December 2019, the Tribunal indicated it was generally happy to proceed as counsel had suggested. It was confirmed 13 March 2020 would be the date the First Determination was released. The Tribunal made no statement about the Crown’s separate proposal to lead further evidence.
[13] On 28 February 2020, Mercury filed an application to adduce evidence and be heard. In terms of timing this was two weeks before the scheduled release date of the First Determination, and obviously after closings. The application appended a nearly final brief of the evidence it wished to adduce. Mr Hodder QC advises that the evidence the Crown indicated to the Tribunal it wished to lead as part of the iterative process is similar to that which Mercury would wish to adduce prior to the First Determination if it were given leave to do so.
[14] In order to understand the context of the application, and how the Tribunal dealt with it, it is necessary at this stage to refer the terms of s 8C of the Treaty of Waitangi Act which deals with rights of participation in relation to a hearing that concerns an application to return land. Section 8C provides:
(1)… the only persons entitled to appear and be heard on that question
shall be—
(a) the claimant:
(b) the Minister of Maori Affairs:
(c) any other Minister of the Crown who notifies the Tribunal in writing that he or she wishes to appear and be heard:
(d) any Maori who satisfies the Tribunal that he or she, or any group of Maori of which he or she is a member, has an interest in the inquiry apart from any interest in common with the public.
(2)Notwithstanding anything in clause 7 of Schedule 2 or in section 4A of the Commissions of Inquiry Act 1908 (as applied by clause 8 of Schedule 2), no person other than a person designated in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (d) of subsection (1) shall be entitled to appear and be heard on a question to which subsection (1) applies.
(3)Nothing in subsection (2) affects the right of any person designated in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (d) of subsection (1) to appear, with the leave of the Tribunal, by—
(a) a barrister or solicitor of the High Court; or
(b) any other agent or representative authorised in writing. [Emphasis added]
[15] Mercury accepts the effect of s 8C was that it had no right to be heard. However, it submitted:
(a)The italicised opening words of s 8C only identified those who could appear as of right. It did not prevent the Tribunal from giving leave to other persons to appear and be heard.
(b)There were good reasons why the Tribunal should exercise in favour of Mercury its discretion to allow it to participate. Cited in support of the application were s 8C, sch 2 cl 6(1) of the Treaty of Waitangi Act, s 27 of the New Zealand Bill of Rights Act 1990 and several cases. Two in particular to which I will return are Te Heu and Tuwharetoa Māori Trust Board v Attorney-General, and Raukawa Settlement Trust v Waitangi Tribunal.1
[16] On 2 March 2020 the Tribunal issued a memorandum in which it rejected Mercury’s application. The relevant paragraphs read:
3. Mercury NZ Limited is not an entity that is entitled to appear or be heard in relation to the applications before the Wai 863 Wairarapa ki Tararua
1 Te Heu Heu and Tuwharetoa Māori Trust Board v Attorney-General [1999] 1 NZLR 98 (HC) at 115; and Raukawa Settlement Trust v Waitangi Tribunal [2019] NZHC 383 at [80].
Tribunal under section 8C of the Treaty of Waitangi Act 1975. The application will be added to record of inquiry. It is declined. The supporting material will not go on the record of inquiry. It is not material that may be adduced.
4. The Tribunal is currently preparing a determination preliminary to the issue of binding recommendations. Following the issue of that determination on 13 March 2020, there will be an opportunity as part of the iterative process for the Crown to make further submissions about the potential impact of change in ownership of the power station assets. No doubt the Crown will liaise with Mercury NZ Limited about that in due course.
[17] It is common ground that the decision reflects an interpretation of s 8C that regards the section’s list of persons “entitled” to appear as being exhaustive. Mercury and the Crown both claim this to be an error of law, contending, as Mercury did in its application, that all the provision does is identify those with a right to appear. It does not override the power of the Tribunal to give leave to other parties to be heard.
[18] Mercury in its statement of claim in this proceeding contends the Tribunal erred in its interpretation of s 8C, failed to give sufficient reasons in support of its interpretation of s 8C and failed to consider the exercise of its discretion as Mercury had asked it to.
Stay application
The s 8C issue
[19] Whether s 8C is an exhaustive list of those able to be heard or a restricted list of those entitled to be heard will be the key issue. I limit myself to the observation that there are arguments both ways. Mr Radich QC advanced, most strongly of the parties, a position that there was only one tenable view - namely, that it was an exhaustive list. He drew on the language used in the section, related provisions such as s 8A(3) which excludes changes in ownership or condition of the land as a relevant consideration, the context in which the legislation was passed, background Select Committee materials and Hansard.2
2 See for example s 27A of the State-Owned Enterprises Act 1986; (21 June 1988) 489 NZPD 4560; and Technical Advisory Group “Report to the Select Committee on the Treaty of Waitangi (State Enterprises) Bill”.
[20] To the contrary, however, are the submissions of Mercury and the Crown. Mercury focused on the language of the section, and also the rights to a fair procedure entrenched in various relevant documents, including s 27 of the New Zealand Bill of Rights Act 1990. It is submitted that reading s 8C as only dealing with who may appear as of right best promotes the principles of natural justice by not removing the Tribunal’s normal function of controlling its procedures to ensure fairness.
[21] The Crown focused in its oral submissions on the consequences if the Tribunal did not have the discretion in terms of its inability to access the material it needs. It is noted that the Tribunal in its own procedures recognises that there may be opportunity for landowners to be heard on limited aspects.
[22] There are two High Court authorities that on their face support Mercury’s position – Te Heu and Rawkawa Settlement Trust. In the former, Robertson J stated:3
Section 8C makes it clear that any third party who has taken land subject to a memorial is not entitled to be heard by the tribunal except with leave.
[23]In Raukawa Settlement Trust, Grice J observed:4
[79] …. The Tribunal is dealing with claims based on tikanga and customary rights acknowledged by the Crown and of significant importance to Raukawa. This may support the right to be heard outside the provisions of s 8C of the 1975 Act.
[80] Section 8C of the 1975 Act may be seen as a recognition by Parliament that natural justice should apply in the present circumstances. It does not purport to enact a complete code of procedure or to cover the whole field of natural justice, which would not be easy in a statute of this kind.
[24] Mr Radich advanced arguments as to why each of these statements was not determinative of the issue. I accept that is probably so, but nevertheless they represent two High Court “observations” which make it not possible to dismiss Mercury’s argument as not tenable.5 In focusing on these decisions, I am not disregarding the other arguments made in support of this reading of s 8C. Rather, in terms of an application for interim relief, I am of the view that these decisions on their own mean
3 Te Heu Heu, above n 1, at 115.
4 Raukawa Settlement Trust, above n 1.
5 To put them at their lowest level of precedent value.
it has to be accepted that Mercury has a tenable argument that the Tribunal operated on an error of law.
[25] If the correct interpretation of s 8C is as Mercury and the Crown contend, then the Tribunal has not properly considered Mercury’s application. Indeed, at this point, it has not dealt with it at all because the Tribunal took the view it had no discretion to allow Mercury to appear.
A position to be preserved?
[26] The statutory threshold for an interim order is whether there is a position to preserve.6 I consider there is. There is a tenable argument that the Tribunal has a discretion to hear parties other than those listed in s 8C. Mercury made its application at a time prior to the issuing of the First Determination. It was rejected by the Tribunal without being considered on its merits. Without relief, Mercury will lose the opportunity to have input into what is the pivotal initial decision – whether to order return of the land. The loss of an opportunity is the highest it can be put, since Mercury’s application to the Tribunal seeks the exercise of a discretion in its favour which the Tribunal may have rejected it on its merits, especially given its timing.
[27] There is precedent for the loss of an opportunity being sufficient for the purposes of interim relief. Mr Hodder QC cites Westhaven Shellfish Ltd v Chief Executive of the Ministry of Fisheries and Managed Hotels Ltd v Commissioner of Inland Revenue as examples.7
[28]I turn, then, to the exercise of discretion.
The discretion to grant interim relief
[29] The position of the Incorporation and the Settlement Trust is that delay will be prejudicial to them in the context of an already drawn-out process. Conversely, if Mercury succeeds there is ample time for the Tribunal to consider the application and,
6 Judicial Review Procedure Act 2016, s 15; and Carlton & United Breweries Ltd v Minister of Customs [1986] 1 NZLR 423 (CA).
7 Westhaven Shellfish Ltd v Chief Executive of the Ministry of Fisheries CA52/03, 28 March 2003; and Managed Hotels Ltd v Commissioner of Inland Revenue (2011) 25 NZTC 25,777 (HC).
if granted, hear the evidence and submissions. In this context, I observe that if court business proceeds in the normal way, the substantive matter could be heard in early May.8
[30] Mercury and the Crown accept that there is the opportunity for the Tribunal to hear the evidence as part of the next phase. That must indeed be so since the Crown is itself proposing to lead such evidence in the period subsequent to the First Determination. However, it is submitted that, equally, any delay in the issuing of the First Determination cannot be shown to be a source of prejudice. The present timetable contemplates a significant process yet to come with indications from the Tribunal that any report containing formal interim recommendations will not be issued until the end of the year.
[31] Mr Hodder submits the key factor supporting interim relief is that Mercury’s opportunity to have input into the First Determination should be preserved. Although the First Determination is not a final decision on the issue of returning land and the Tribunal can change its mind, it is submitted the position will be significantly changed against Mercury’s interests once there is a public statement by the Tribunal indicating an intention to order return of the lands. He referred to an article which discusses the concept of confirmation bias, particularly in the judicial review setting.9
[32] Mr Colson, in his written submissions on behalf of the Settlement Trust, referred to a number of decisions that resist judicial reviews of preliminary decisions.10 He submitted that a provisional decision that is capable of change before it is finalised is not reviewable. The point is valid, and brings to the forefront, as do Mr Hodder’s submissions, the issue of what is the status or effect of the First Determination.
[33]The Tribunal has previously indicated the document will set out:
8 Counsel have since indicated agreement that a 2 June date is suitable to all, but earlier dates are available.
9 Mark Seidenfeld “Cognitive Loafing, Social Conformity and Judicial Review of Agency Rulemaking” (2002) 87 Cornell Law Review 486.
10 See, for example, Singh v Chief Executive of Ministry of Business, Innovation and Employment [2014] NZCA 220, [2014] 3 NZLR 23; and Marlborough Aquaculture Ltd v Chief Executive, Ministry of Fisheries [2003] NZAR 362 (HC).
our likely decisions that will form the basis of the binding recommendations. Certainly enough to give a firm indication of the Tribunal’s thinking that if we were at that point to indicate we were likely to make binding recommendations about the change of ownership of land at Maraetai, the step after that would be for there to be discussion about the practical implications.
Subsequently, as noted, the Tribunal has encouraged the parties to focus on the nature of the subsequent iterative process.
[34] To complete the procedural sequence, it can be noted that following its rejection of Mercury’s application, the Tribunal held a phone conference at which Mercury attended. There is presently no transcript, but an affidavit from an attendee sets out a summary of what occurred. With the significant caveat it is just one person’s summary, it is recorded that the Tribunal observed:
(a)the Mercury memorandum (that is, counsel’s memorandum accompanying the rejected application) assumed the Tribunal was about to create an irreversible situation, but that was not the case;
(b)potential operational difficulties with a resumption order in respect of a power station are recognised. The interim report is not a binding recommendation, but is merely signalling a direction. The Crown could submit further material if what is being proposed would cause insurmountable or even general problems for electricity generators;
(c)what the Tribunal is currently intending (which is to be set out in its report) may change depending upon further material and evidence; and
(d)the Crown could put in a submission as to shortcomings in the material which was before the Waitangi Tribunal and what future material could be put in to ensure the Tribunal was fully apprised of any operational difficulties.
[35] In relation to the impact of the First Determination, I conclude that it will include the Tribunal’s initial conclusions on whether there should be some return of land. If its view is that there should be resumption, the Tribunal will receive further
submission and, if necessary, further material. Finally, it is, as the Tribunal says, an interim decision. The point has not been reached where the Tribunal cannot or will not change its mind. If evidence relevant to terms and conditions points to a greater difficulty, the initial views can be revisited.
[36] Mercury’s key argument in favour of interim relief is a timing one. Without interim orders it will have lost its opportunity to influence the initial assessment of whether to recommend the return of land. However, the reality is that the First Determination is ready for release and has been for a few days. The Tribunal has reached a view, whether or not the Determination is released. I accept there is some extra component involved in a decision-maker making its interim position publicly known, but the core interim position has already been reached.
[37] Further, what Mercury is losing is, at best, an opportunity. It is far from sure that the Tribunal would reach a different view on its application given the timing of the application, the statutory provision making irrelevant changes in ownership and condition of the land, and the opportunities that exist for later involvement. As the Tribunal currently sees it, that opportunity will be through the Crown. If, however, s 8C does not preclude direct involvement by Mercury, then it will be open to the Tribunal to consider that possibility in relation to the next phase.
[38] Finally, on this aspect, while the First Determination will be significant in that it will indicate the Tribunal’s initial conclusions on the key decision, it is nevertheless interim or indicative, and there is no basis to assume other than that the Tribunal is open to the possibility that the difficulties of resumption of land containing electricity generating facilities are insurmountable. Overall, in my view, there is little practical difference between Mercury being heard, if that occurs at all, before or after the release of the First Determination. And there is plenty of opportunity for Mercury to be heard if that is what eventuates.
[39] I also consider there is prejudice in delaying the process. That the process has taken a significant period already does not provide a basis for more delay unless it is necessary. The opposite is the case. It is preferable that the process continues while the substantive review is determined.
Conclusion
[40]The application for interim orders is declined.
[41] Memoranda may be filed on costs. Given that I have held there is a tenable argument that an error has occurred, and that Mercury has a position to preserve, the parties may think it preferable for costs to await the substantive fixture. I therefore make a provisional direction that costs are reserved, but I do not foreclose making a costs decision now if application is made.
Simon France J
Solicitors:
Chapman Tripp, Auckland for Plaintiff
Crown Law Office, Wellington for Crown and Waitangi Tribunal Kahui Law, Wellington for Wairarapa Moana Ki Pouakani Inc.
Smail Legal Limited, Auckland for Ngāti Kahungungu ki Wairarapa Tamaki Nui-ā-Rua Settlement Trust
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