Napier Public Health Action Group Inc v Minister of Conservation HC Napier CIV 2006-441-586

Case

[2007] NZHC 506

17 May 2007

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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV 2006-441-586

UNDER  Judicature Amendment Act 1972

AND

UNDER  Declaratory Judgments Act 1908

IN THE MATTER OF     section 98 of the Reserves and Other lands Disposal and Public Bodies Empowering Act 1920

AND

IN THE MATTER OF     Gazette Notice 14.10.2004, No. 132, p.3266

BETWEEN  NAPIER PUBLIC HEALTH ACTION GROUP INCORPORATED

Plaintiff

ANDTHE MINISTER OF CONSERVATION First Defendant

ANDTHE MINISTER OF HEALTH Second Defendant

ANDCROWN HEALTH FINANCING AGENCY

Third Defendant

Hearing:         13 and 14 February 2007

Counsel:         M Courtney and J Krebs for Plaintiff

H S Hancock and S J Ritchie for First and Second Defendants
P R Jagose and J F Keane for Third Defendant

Judgment:      17 May 2007

JUDGMENT OF HEATH J

Solicitors:

Langley Twigg, PO Box 446, Napier

Crown Law Office, PO Box 2858, Wellington Chapman Tripp, PO Box 993, Wellington Counsel:

M Courtney, PO Box 7467, Napier

NAPIER PUBLIC HEALTH ACTION GROUP INCORPORATED V THE MINISTER OF CONSERVATION AND ORS HC NAP CIV 2006-441-586  17 May 2007

Table of Contents

(a) Submissions on behalf of the Action Group [34]
(b) Submissions on behalf of Ministers of Conservation and Health [36]
(c) Submissions on behalf of the Agency [39]
 
The issues  [1] Background to the proceeding  [6] The competing submissions

Analysis of the “Trust” issue

(a)   Introductory comments  [40]

(b)   The Land Acts  [43] (c)  The Reserves Acts  [55] (d)   The Napier Hospital site  [72] (i)  Lots 1 to 6  [73] (ii)   Lots 7 to 16  [76] (iii)   Consolidation of lots 1 to 16  [82]

The “consultation” issue

(a)   Legitimate expectation  [94]

(b)   Consultation as District Health Board’s surrogate  [99] (c)   Ministerial representations   [108] (d)   Discretionary issues   [115]

Conclusion  [120]

The issues

[1]      In the mid 1990s Cabinet made a decision, after extensive consultation, to close the Napier Public Hospital and to establish a regional hospital for the Hawke’s Bay Province in Hastings.  At the time that decision was made, the preferred option was to use some or all of the hospital buildings to house medical services designed to meet the needs of the community in Napier and its immediate surrounds.  Before the regional hospital debate, the land on which the Napier Hospital buildings stood had been classified as reserve land for hospital purposes.

[2]      On 14 October 2004, the reserve status of the hospital land was revoked.  The revocation was effected by Gazette Notice under the hand of the Minister of Conservation’s delegate.  It is common ground that revocation of reserve status was legally effective.  The question is whether revocation of reserve status carried with it, as a necessary consequence, termination of the statutory trust requiring the land to be used for hospital purposes.  If the trust were terminated, the land could be disposed of by the Crown.  An agreement to sell the land has, in fact, been entered into.

[3]      In this proceeding, the Napier Public Health Action Group Inc (the Action Group) seeks a declaration that the Gazette Notice revocation did not terminate the statutory trust on which the land was held.  Although the reserve land was comprised in a number of Certificates of Title, only Certificate of Title M3/1117, the land on which the majority of the old hospital buildings are situated, will be affected if relief were granted.

[4]      The Action Group also sues the Minister of Health and the Crown Health Financing Agency (the Agency).  Those claims are based on an alleged failure, on the part of both the Minister and the Agency, to consult adequately before a decision was made to dispose of the site by sale.  The Action Group contends that the need for consultation arose indirectly from the provisions of the New Zealand Public Health and Disability Act 2000 or from a legitimate expectation of members of the Napier community to be consulted on the question of disposal of the land.  A declaration is sought that consultation was inadequate.  Additional relief is sought to prevent sale of the land pending completion of proper consultation.

[5]      The land was advertised for public tender.  The intended purchaser was aware of  the existence of  this  legal  challenge at  the  time  the  agreement  for  sale  and purchase was signed.  Therefore, the existence of an agreement to sell, of itself, is insufficient to deny relief, if I were to conclude that the Action Group has, otherwise, made out its case.

Background to the proceeding

[6]      Much evidence has been put before me to explain the background to the present disputes.  Most of the evidence is uncontroversial but is of little assistance in resolving the “trust” point, a purely legal issue which requires detailed discussion of the legislation that established the reserve and the statutory trust.  Nevertheless, some introductory comments are required to put the proceeding in context.

[7]      The township of Napier was settled following cessation of land by Maori to the Government Land Purchase Commissioner in 1851.   Those settling in Napier were  assured  that  a  public  hospital  would  be  established,  consistent  with  the

prevailing policies  of  central  Government  of  the  day.    Erection  of  the  hospital buildings was paid for by citizens of the Hawke’s Bay, rather than out of the national public purse.

[8]      The  first  legislative  step  to  facilitate  development  of  the  hospital  was enactment of the Napier Hospital Site Act 1876.  Originally, the land was set aside as barracks for military purposes.   But, the Napier Hospital Site Extension Act 1906 confirmed that the land was vested in the Borough of Napier as a reserve under the Public  Reserves  Act  1881.    In  1920,  the  land  was  vested  in  the  Hawke’s  Bay Hospital and Charitable Aid Board “in trust as a site for a hospital and grounds”: s 98(6) of the Reserves and Other Lands Disposal and Public Bodies Empowering Act 1920.

[9]      The status of the hospital land and the statutory trust on which it was held remained intact for many years.   It was not until enactment of the Health Sector (Transfers) Act 1993 (a statute designed to re-structure the way in which health sector assets were held and dealt with) that the simplicity underlying the earlier legislation was disturbed.  At the time the 1993 Act was passed, the land on which the former Napier Hospital stood was registered in the name of the Hawke’s Bay District Health Board.  Under the 1993 Act, the land was intended to be transferred into the name of the newly-created Residual Health Management Unit (the Unit).

[10]     During the 1990s, the debate over the location of the Hawke’s Bay Regional Hospital occupied central stage in the community.  However, once it was clear that the battle to situate the regional hospital in Napier was lost, the focus of public concern shifted to the use of the old hospital buildings to provide complementary health care services for the wider Napier community.

[11]     Following claims made by Te Taiwhenua o Te Whanganui a Rotou of Ngati Kahungunu iwi, the Waitangi Tribunal investigated allegations of  breach  of  the principles  of  the  Treaty of  Waitangi  in  relation  to  Crown  dealings  surrounding Napier Hospital.  The Tribunal reported in 2001: The Napier Hospital and Health Services Report (Wai 692, 2001).

[12]     The  Tribunal  concluded  that  the  Crown  had  breached  certain  Treaty principles, particularly in relation to consultation.  One of its recommendation was that, if agreement could not be reached with the claimants, “the health trust be kept in place and the hospital site retained in District Health Board ownership pending a final settlement” of the claim: see the Executive Summary at xxxviii.

[13]     As a result of that recommendation, no steps were taken to dispose of the hospital  site while Treaty settlement  issues  were addressed.    The  land  was  not released   from   protective   mechanisms   designed   to   preserve   land   for   Treaty settlements until February 2006.

[14]     The Agency was created by the New Zealand Public Health and Disability

Act 2000 and assumed control of assets previously held by the Unit.

[15]     Under cl 43 of Schedule 3 to the 2000 Act, obligations of consultation were cast upon District Health Boards selling land registered in their name.   However, there was no obligation on the Agency to consult before disposal when land was held by it: cl 28 of Schedule 6 to the Act.

[16]     The  relevant  land  was  transferred  to  the  Unit  for  a  consideration  of

$3,000,000.  That was done under an agreement dated 20 October 2003, made under the 1993 Act.

[17]    Transfer of the land into the Unit’s name, in about January 2001, was accompanied  by  statements  from  a  number  of  participants  which  I  find  were designed to assuage the concerns of local residents as to the fate of the Napier Hospital site.  For present purposes, one example will suffice.

[18]     In Hawke’s Bay Today (22 January 2001, at page 1) the Manager of Property Transactions for the Unit, Mr Sweetapple, was reported as saying that “all the legal obligations of the District Health Board, including the Treaty of Waitangi claim requirements were included with the sale”.  Mr Sweetapple added that no action on further disposal of the site would be taken without the legal and Treaty obligations being resolved.

[19]     In  the  2002/2003  Financial  Review  of  the  Hawke’s  Bay  District  Health Board, it was said that no sale of the hospital land would occur until after the Waitangi Tribunal claim had been resolved.   That undertaking was, in fact, incorporated in the transfer agreement between the responsible Ministers (for and on behalf of the Hawke’s Bay District Health Board) and the Unit of 20 October 2003.

[20]     In addition, as Mr Anderson (a senior official in the Ministry of Health) correctly observed, the 2002/2003 Financial Review also stated that if the Waitangi Tribunal claim had not been settled by October 2004, the commitment not to dispose of the land would be reviewed.  He deposed that the arrangement was reviewed in

2004 and, after a short extension, discontinued by agreement.

[21]     In early 2004, the land remained in the Unit’s ownership.  Two caveats had been lodged to protect the statutory trusts.  One had been lodged by the Registrar- General of Lands, the other by the Napier City Council.

[22]     On 2 March 2004, Master Gendall heard an application made by the Napier City Council for an order that a caveat it had lodged against the land not lapse: Napier  City  Council  v  Residual  Health  Management  Ltd  (High  Court  Napier, CIV 2004-441-35, 30 March 2004).  The Council’s application was opposed by the Unit.

[23]     The Master dismissed the Council’s application, holding:

[29] Having decided that neither the Council nor its constituents have any proprietary interest in the land, there is no question of an arguable case.

[30] The balance of convenience clearly favours the removal of the caveat, as the present caveat has no real purpose.   The title is being transferred subject to the trust, and the perpetual caveat in s 129(5) [Land Transfer Act] guards against any future dealings manifestly inconsistent with the trust.

[31] The only situation in which the property can be transferred without the trust, therefore, is if Parliament legislates to remove it or to alter its terms. In the event that this occurs, the Court could not intervene in any case.  The future of the statutory trust may well be a political rather than a legal issue, and in the absence of a legal claim on the property, the caveat cannot be retained.

[24]   On 8 October 2004, the Conservator for the East Coast Hawke’s Bay Conservancy of the Department of Conservation  purported  to  revoke  the  land’s status as a reserve and went on to proclaim that the land “remains vested in the Residual Health Management Unit and may be disposed of by the Residual Health Management Unit”: New Zealand Gazette, 14 October 2004, No 132, p3266.   By

2004,  the  assets  held  by  the  Unit  had  been  vested  by  statute  in  the  Agency. However, the land had not been transferred into the name of the Agency.

[25]     The background to revocation of the land’s reserve status is explained by Mr Williamson, the Conservator who exercised delegated power to revoke.  After setting out his understanding of the background, Mr Williamson referred to a request received from the Unit to revoke the reserve status.

[26]     In a letter dated 27 August 2004, the Unit expressed its request as follows:

Request for Lifting of Reserve Status – Former Napier Hospital Site

1.0       Request

The purpose of this letter  is to formally request the lifting of the Reserve

Status on part of the above property (CT HBM3/1117).

This  request  is  consistent  with  the  following  resolution  passed  by  the [Unit’s] Board at the meeting held at 9.30am on Tuesday, 25th  May 2004 (Meeting Number 112):

“RESOLVED that the Board considers that the land at Hospital Terrace Napier, (namely 2.7952 ha being lots one, six, nine, 10, 11, 12, 15 and 16 on Deposited Plan 3796 and all the land comprised and described in Certificate of Title HBM3/1117) which is currently classified as a reserve for a hospital and grounds, is no longer required for hospital purposes or for any other purpose for which Reserve classification is appropriate, (as set out in the memorandum to the Board dated 19th May 2004) and that the reservation for the whole of the land as a Reserve be revoked”.

[27]     The background information provided to the Department of Conservation included the following observations:

The land concerned is an area of 2.7952 hectares being Lots 1, 6, 9, 10, 11,

12, 15  and  16  Deposited  Plan 3796  being all the land in  CT  M3/1117 (Hawke’s Bay Registry).  It does not comprise the entire hospital site and the balance of the land, the majority of the site, occupied by the former hospital buildings is freehold land and not subject to any reserve classification.

The history of the land is that it was originally acquired by Government and used for a military barracks and had the status of a barracks’ reserve.  The need for a barracks in Napier had long since ceased when the Reserves and Other Lands Disposal and Public Bodies Empowering Act 1920 revoked the barracks reserve classification and declared the land a reserve for a hospital and grounds.

Whenconsidering whether reserve status should be revoked, it is clear that: (a)  Return to the previous reserve classification is not required;

(b) There is no further requirement for use of the land for a hospital; (c)  The land is not required for other reserve purposes.

As to (b), the hospital buildings have not been used for hospital purposes since 1998, the hospital services in Napier having been relocated to a new regional hospital in Hastings.  The Minister of Health confirmed in March

2003 that hospital services would not be reinstated at the Napier site.

The hospital has a frontage to Spencer Road.  The land immediately opposite the hospital is occupied by public gardens held as a reserve by Napier City Council. There is therefore adequate public open space in the vicinity.

[28]     The  Chief  Executive  of  the  Unit  recorded  his  understanding  that  the revocation would not need public advertisement, but would be published in the New Zealand Gazette.  He also confirmed that the Unit would meet the reasonable costs incurred by the Department of Conservation in “obtaining the revocation of this Reserve”.   The person named for contact within the Unit was Mr Sweetapple, the Manager to whom comments concerning the internal transfer of the land in 2001 were attributed in Hawke’s Bay Today.

[29]     Following  a  field  inspection  by  a  Department  of  Conservation  official, designed to ensure there were no other reserve values to be protected, the Minister of Conservation’s delegate acted to revoke the land’s status as a reserve.  On the basis of information received, Mr Williamson was satisfied that the land was no longer required as a Government purpose reserve for the health and disability sector and saw no reason why reserve status should not be revoked.

[30]     There is no explanation from Mr Williamson as to why he included in the revocation notice an additional observation that the Unit was entitled to dispose of the land following revocation.  That observation was not required by the legislation and can be seen as gratuitous in nature.

[31]     On 20 February 2006, the Office of Treaty Settlements wrote to the Agency advising that, on 7 February 2006, the Minister of Finance, the Minister of Maori Affairs and the Associate Minister In Charge of Treaty of Waitangi Negotiations had agreed that the main hospital land be released from the protective mechanism as it did not meet the criteria for protection by “land-banking”.  After confirmation from the Office of Treaty Settlements that the hospital site had been released from that protection, steps were taken by the Agency to institute a tender process to sell the land.

[32]     Marketing began in May 2006.  In reliance on cl 28 of Schedule 6 to the 2000

Act, no further public consultation was undertaken in respect of the intended sale. On 10 August 2006, before the tender process closed, a private offer to buy the site was accepted by the Agency.

[33]     Mr Bell, the Chief Executive of the Agency, deposed:

The Hawkes Bay District Health Board obviously has a significant interest in the sale as it will receive the majority of the profit that [the Agency] makes on the sale of the Napier Hospital site.  Thus a large part of the profit made from the sale will be injected back into the health care services for the people of Hawke’s Bay.   This is consistent with [the Agency’s] overall corporate purpose.

The competing submissions

(a)   Submissions on behalf of the Action Group

[34]     Mr Courtney, for the Action Group, submitted that while the Gazette Notice issued in 2004 revoked the reserve status of the land it did not (and could not) alter or remove the status of the land as a trust, that status having been created by s 98(6) of the 1920 Act.  Mr Courtney calls in aid authorities such as Wellington Harness Racing Club Inc v Hutt City Council [2004] 1 NZLR 82, at 89 to contend that the trust status could only be revoked by an Act of Parliament.

[35]     On the consultation issue, Mr Courtney argues that the New Zealand Public

Health and Disability Act 2000 created obligations of consultation for which citizens

of Napier, represented by the Action Group, were entitled to be heard.  He submitted that, following Nicholls v Health & Disability Commissioner [1997] NZAR 351 at

369-370,   a   legitimate   expectation   of   consultation   or   fairness   required   the Unit/Agency to consult, before it decided on disposal of the lands, notwithstanding cl 28 of Schedule 6 to the 2000 Act.   Mr Courtney submitted that the absence of evidence of proper consultation justified declaratory relief, on the grounds that the process had misfired.

(b)   Submissions on behalf of Ministers of Conservation and Health

[36]     Mr Hancock, for the Ministers, opposes the orders sought by the Action

Group.

[37]     Mr Hancock did not accept that trust status was created by the 1920 Act. Rather, he contended that the 1920 statute confirmed an existing statutory trust.  The Minister of Conservation’s position is that revocation of the reserve status of the land was justified and that termination of the statutory trust was, as a matter of law, a necessary consequence of revocation.

[38]     For the Minister of Health, Mr Hancock contended that she had no statutory obligation to consult with the resident population of Napier.  Further, he argued that there is no basis for any claim of legitimate expectation or fairness that could trigger an obligation to consult.

(c)  Submissions on behalf of the Agency

[39]     On behalf of the Agency, Mr Jagose resisted the judicial review proceeding on the grounds that the Agency exercised no statutory power of decision susceptible of review and had no obligation to consult.  He relied on the express provisions of cl 43 of Schedule 6 to the New Zealand Public Health and Disability Act 2000 on the consultation point.

Analysis of the “Trust” issue

(a)   Introductory comments

[40]     The regulation of reserves in New Zealand is based on twin legislative pillars. First, successive Land Acts have provided the statutory power to reserve land for public purposes.  Second, successive Reserves Acts have provided the framework by which reserved land can be managed efficiently by vesting the land in local authorities.  I propose to examine each pillar in turn, summarising the relationship between the two where appropriate.  The historical background provides an insight into the reasons for confusion about the way in which the statutory trust was created, that  being  an  important  point  of  difference  between  the  submissions  made  by Mr Courtney and Mr Hancock.

[41]     To understand the background to reserve status and creation of the statutory trust  it  is  necessary  to  explain  the  differing  roles  of  central  and  provincial government  in  New  Zealand  until  the  mid  1870s.    The  land  on  which  Napier township was built was ceded the year before the New Zealand Constitution Act

1852 was enacted.  That statute abolished the three former Provinces (New Ulster, New Munster and New Leinster) and created the Provinces of Auckland, New Plymouth, Wellington, Nelson, Canterbury and Otago.   The Province of Hawke’s Bay was established later, in 1858.

[42]     The new Provinces were empowered to legislate on all matters other than those  excluded  by  the  Constitution  Act.    Only  the  General  Assembly  of  New Zealand (the General Assembly) was empowered to enact legislation dealing with the disposal of waste lands of the Crown and all lands on which native title had been extinguished: New Zealand Constitution Act 1852, ss 18, 19(10) and 72.  For that reason,  notwithstanding  the  existence  of  Provincial  legislatures,  reservation  of Crown  land  was  initially subject  only to  central  government  authority.    In  this judgment,  I refer  to  powers  of central  government  by  reference  to  the  General Assembly.

(b)      The Land Acts

[43]     The Waste Lands Act 1854 was the first statute to deal with “the sale, letting, disposal and occupation of the waste lands of the Crown” within the Provinces. It granted Provincial legislatures the power to recommend regulations concerning the sale and disposal of land to the Governor.   Those regulations were subject to the Governor’s ultimate approval.

[44]     Subsequently  the  Provinces  were  authorised  to  regulate  the  disposal  of Crown lands situated within their districts: Waste Lands Act 1856, s 1.  Thereafter reservation of Crown lands for local purposes became a matter of Provincial legislation, subject to the Governor’s power to reserve lands by notice in the Gazette for the purposes of military defence, roading or public buildings: Waste Lands Act

1856, s 5.

[45]     At that stage, two parallel systems of land reservation existed.   The first involved  reservation  for  central  government  purposes,  effected  by notice  in  the Gazette.  The second was the mechanism to reserve for provincial purposes, effected by Provincial legislation.

[46]     In 1858, a further Waste Lands Act was enacted.  The 1854 Act was repealed. The 1856 Act was retained, subject to two extensions.  First, the purposes for which the Governor could reserve Crown lands were broadened to permit reservation for other  purposes  of  public  utility  or  convenience:  Waste  Lands  Act  1858,  s 12. Second, the Governor was empowered to alter the purpose of any land so reserved: Waste Lands Act 1858, s 13.

[47]     The reservation of land by Provincial legislatures ceased once the Abolition of Provinces Act 1875 came into force.  Once the Provinces were abolished, land set aside  for  provincial  use  reverted  to  the  Crown,  “for  the  same  purposes  and objectives, and subject to the same powers and conditions, as those for and subject to which they [were] held by the Superintendent”: Abolition of Provinces Act 1875, s 9.  Abolition took effect as from 1 November 1876, a date ascertained by reference to the formula set out in s 28 of the 1875 Act.

[48]     The next year, the Land Act 1877 was enacted by the General Assembly. This statute provided a comprehensive regime for the reservation of Crown land designed to meet the needs of a unitary State.   Consonant with the abolition of a provincial power to reserve lands, the purposes for which the Governor could reserve land were broadened to encompass what had been both provincial and central government purposes.

[49]     The processes by which land was to be reserved for these purposes (including hospitals) were set out in ss 144-146 of the Land Act 1877.  They provided:

144.     The  Governor  may  from  time  to  time,  either  by  a  general  or particular  description,  and  whether  the  same  has  been  surveyed  or  not, reserve from sale temporarily, notwithstanding that the same may be then held  under  pastoral  license,  any  Crown  lands  which  in  his  opinion  are required for any of the following purposes – viz, for…other public buildings, hospitals…

145.     When  any  land  has  been  temporarily  reserved,  notice  of  such reservation shall be published in the Gazette.

At the expiration of one month, but not later than six months, after the publication of such notice, the lands described therein (not being reserves for endowments) may be permanently reserved, and notice of such permanent reservation shall be published in the Gazette, and failing such permanent reservation any such temporary reservation shall be void.

146.    Upon such notices being duly published as aforesaid, the lands described in such notices respectively shall become and be dedicated to the purposes for which they were reserved respectively, and may at any time thereafter be granted for such purposes in fee-simple, or disposed of in such other  manner  as  for  the  public  interest  may  seem  best,  subject  to  the condition that they shall be held in trust for the purposes for which they were reserved, unless such purpose be lawfully changed. (my emphasis)

[50]     Reservation of land involved  a two-step process.   The  first involved the Governor reserving temporarily the relevant land by Notice in the Gazette.   The second concerned permanent reservation, again by Notice in the Gazette, after the expiration of one month from publication of the temporary notice.  Upon land being so reserved, in terms of s 146 of the 1877 Act, it was to be held on trust for the purposes for which it was reserved, “unless such purpose be lawfully changed”.

[51]     The  two-stage  reservation  process  initiated  by  the  1877  Act  continued through successive enactments of the Land Act: see Land Act 1885, ss 227-229,

Land Act 1892, ss 235-237, Land Act 1908, ss 321-323 and Land Act 1924, ss 359-

361.   However, the power previously conferred on the Governor to  change the purpose of the reserve was absent from the Land Act 1885.   That power was incorporated within the comprehensive reserves’ management regime established by the Public Reserves Act 1881, to which I return later.

[52]     The two-stage process was abolished on enactment of s 167 of the Land Act

1948, a statute still in force.  Section 167(1) and (2) provide:

167     Land may be set apart as reserves

(1)      The Minister of Conservation may from time to time, with the prior consent in writing of the Minister of Lands, by notice in the Gazette, set apart as a reserve any Crown land for any purpose which in his or her opinion is desirable in the public interest. Every such notice shall take effect from the date thereof or from such later date as is specified in the notice.

(2)      Upon the notice aforesaid being published in the Gazette, the land described therein shall be and be deemed to be dedicated to the purpose for which it was reserved, and may at any time thereafter be granted for that purpose in fee simple, subject to the condition that it shall be held in trust for that purpose unless and until that purpose is lawfully changed.   (my emphasis)

[53]     Since enactment of the Land Act 1885, the general rule has been that all Orders in Council and proclamations made under previous Land Acts are “preserved in” full and continue to be in force until altered or repealed under the relevant Act: Land Act 1885, s 250, Land Act 1892, s 253(1), Land Act 1908, s 349(a), Land Act

1924, s 389(a) and Land Act 1948, s 185(2).

[54]     This analysis demonstrates that, since the 1885 Land Act, the Governor (and more recently the Minister of Conservation) has had the sole power to reserve land for public purposes by Notice in the Gazette.  Immediately upon the publication of such a notice the reserved land is held on trust for the purpose for which the land was reserved.     The  purpose  underlying  the  trust  remains  until  lawfully  changed. Alteration of that purpose, while initially regulated by the Waste Lands Act, came to be addressed by the Reserves Acts.

(c)      The Reserves Acts

[55]     The  Public  Reserves  Act  1854  was  enacted  contemporaneously  with  the Waste Lands Act of the same year.   Unlike the Waste Land Acts and Land Acts which empowered reservation of land, the Public Reserves Act provided the mechanism for the transfer of reserve land to the Superintendent of the relevant Province for efficient management: Public Reserves Act 1854, s 1.

[56]     Section 3 of the 1854 Act required the purpose for which the land was to be held to be stipulated expressly.  Generally, the purpose would be the same as that for which the land was initially reserved.   Section 5 of the Public Reserves Act 1854 provided:

5.        Every Superintendent of a Province in whom any such lands shall become vested, shall hold the same upon trust for the public service of such Province for the purposes specified in such grant, with as full power to dispose of and manage the same for such purposes as if the same were vested absolutely in such Superintendent, subject nevertheless to the provisions hereafter contained. (my emphasis)

[57]     Importantly,  while  s 8  of  the  Public  Reserves  Act  1854  empowered  a Provincial Council to change the purpose for which the land was held by Act or Ordinance, no jurisdiction was conferred upon the Provincial Council to revoke the statutory trust on which the land was held.

[58]     The  vesting  mechanism  did  not  apply  to  lands  reserved  for  central government purposes.  In such cases, there was no need for the reserved land to be transferred because central government agencies already held the land on the prescribed statutory trust.

[59]     Following the Abolition of Provinces Act 1875, the Public Reserves Act

1877 was passed.  Enactment of this statute also reflected the needs of a unitary State and complemented the Land Act 1877.  Section 5 of the Public Reserves Act 1877 provided:

5.        All public reserves heretofore lawfully made which have not been granted to or vested in any governing body, trustees, or other persons, and all

public reserves heretofore granted to any Superintendent, and which have become vested in Her Majesty under the provisions of “The Abolition of Provinces Act, 1875,” and all public reserves hereafter to be lawfully made, may be granted to or vested in any governing body, trustees, or other persons respectively for the specific purpose for which such reserve was made.

[60]     Consistent with the Governor’s freshly conferred power to reserve land for a wider range of purposes, virtually any reserved land could be vested in a local body. Precisely how the vesting was to be effected was not articulated.  Section 13 of the Public Reserves Act 1877 made clear that land vested in local bodies was to be held on trust in terms of the original grant.  Section 14 dealt with alteration or termination of the trust as follows:

14.      If such trusts shall, after registration of the grant, be legally revoked or altered, the District Land Registrar shall, upon being satisfied thereof, enter in the register-book, and also upon the duplicate grant if the same can be obtained for that purpose, notice of such change or revocation, and shall in such notice specify the authority whereby such change or revocation has been effected, and the day and hour of such entry in the register-book; and from and after such entry the land the subject thereof shall be discharged from the original trusts or such of them as shall have been revoked or altered, and shall be held by the grantees, their heirs, successors, or assigns, upon the substituted trusts, as if such trusts had been originally expressed in the grant.  (my emphasis)

[61]     The effect of s 14 was to discharge the reserved land from the statutory trust once the trusts had been revoked.  It did not operate to discharge the statutory trust on revocation of reserve status.

[62]     Greater clarity was brought to the vesting of reserves with the passage of the Public Reserves Act 1881.  The Act introduced a more comprehensive structure for the reservation of land.  Three types of reserves were classified: (a) county, local and municipal purposes; (b) public works and general purposes; (c) harbours and navigation, miscellaneous purposes, education, charitable purposes, recreation and native reserves.

[63]     Only land reserved for the purposes in category (a) could be granted to or vested in a local body: Public Reserves Act 1881, s 4.   The grant was effected by Order in Council published in the Gazette.  Upon publication of the Order in Council the relevant land would be held on trust for the purpose of the grant.  The Governor could alter that purpose, at any time, by Order in Council.

[64]     In contrast, land reserved for a purpose falling within either category (b) or (c) continued to vest in central government.   This reflected the wider, central government, purpose of the reserve.  The purpose of reserves falling within category (b) could be altered by the Governor, subject to the assent of the General Assembly: Public  Reserves  Act  1881,  ss 6  and  7.    The  purpose  of  reserves  falling  within category (c) could only be altered by “special Act” of the General Assembly: Public Reserves Act 1881, s 8.

[65]     The 1881 Act replicated s 14 of the 1877 Act, in relation to revocation of the trust.  Upon the trust being altered or revoked the reserved land would be discharged from the earlier trusts and held subject to the new trusts (if  any): s 14, Public Reserves Act 1881.  While the 1881 Act made clear provision for the alteration of the trust, it was silent on the procedure required to achieve termination.

[66]     The classification system introduced by the Public Reserves Act 1881 was continued by the Public Reserves and Domains Act 1908.   It was removed by the Public Reserves, Domains and National Parks Act 1928.   At that stage a general power  was  conferred  upon  the  Governor-General  to  vest  a  reserve  in  a  local authority by Order in Council, the land being held on trust for the purpose specified in the grant: Public Reserves, Domains and National Parks Act 1928, s 9.  The 1928

Act dealt, for the first time, with the consequences of revocation of reserve status and vesting.

[67]     Section 7 of the 1928 Act dealt with both revocation of reserve status and the alteration of purpose.  It provided:

7. Governor-General in Council may change purpose of reservation &c.-

(1) The Governor-General may from time to time by Order in Council-

(a) Change the purpose of any public reserve or any part thereof, as thereafter such reserve or part, as the case may be, shall be held and administered for such changed purpose; or

(b) Revoke the reservation over any public reserve or part thereof, and  thereupon  the  land  comprised  therein  shall  if  vested  in  the Crown or in any local authority or trustees deriving title from the Crown become Crown land available for disposal under the Land Act, 1924,...

[68]     Section 10 of the 1928 Act dealt with revocation of vesting. Section 10(1)

provided:

Any  vesting (whether  by  Act,  grant,  Order  in  Council,  or  in  any  other manner, and whether before or after the commencement of this Act) in a local authority or trustees of any public reserve which before such vesting was the property of His Majesty may with the consent of such local authority or trustees be by Order in Council cancelled, and thereupon such land shall cease to be vested in such local authority or trustees and revest in  His Majesty, subject to the trusts affecting the same.

[69]     Vesting could also be revoked where the Governor-General was satisfied that there had been a serious breach of the trusts upon which a reserve had been vested: s 10(2), Public Reserves, Domains, and National Parks Act 1928.   Revocation in these circumstances did not require the consent of the relevant local authority.

[70]     Sections 7 and 10 of the 1928 Act were substantially re-enacted as ss 18 and

20 of the Reserves and Domains Act 1953.  Their current counterpart provisions are ss 24, 25 and 27 of the Reserves Act 1977.  These three provisions now prescribe the default position for the revocation of any reserve.  In material respects, they provide:

24     Change of classification or purpose or revocation of reserves

(1)    Subject to [section 13(2)] of this Act, where—

(a)        The Minister  considers for  any reason that  a change  of classification or purpose of the whole or part of any reserve is advisable or that the reservation of any land as a reserve should be revoked; or

(b)      The local authority within whose district a reserve is situated or the administering body of any reserve notifies the Commissioner in writing that, pursuant to a resolution of the local authority or of the administering body, as the case may be, it considers for any reason,  to  be  stated  in  the  resolution,  that  the  classification  or purpose of the whole or part of the reserve should be changed to another classification or purpose, or that the reservation of the whole or part of the land as a reserve should be revoked,—

then, subject to the succeeding provisions of this section, the Minister may, in  his  discretion,  by  notice  in  the  Gazette,  change  the  classification  or purpose of the whole or part of the reserve, which thereafter shall be held and administered for that changed classification or purpose, or revoke the reservation of the whole or part of the land as a reserve:

….

25        Effect of revocation of reserve or change of classification  or purpose

(1)     Upon the revocation of the reservation of any public reserve or of any part thereof pursuant to section 24 of this Act, the land comprised therein shall, if vested in the Crown or in any local authority or trustees deriving title from the Crown, become Crown land available for disposal under the Land Act 1948, and in any other case may be disposed of in such manner and for such purpose as may be specified by the Minister.

….

27        Cancelling vesting of reserves

(1)       Any vesting (whether by any Provincial Ordinance, Act, grant, Order in Council, or in any other manner, and whether before or after the commencement of this Act) in an administering body of any reserve which before that vesting was the property of the Crown may, with the consent of the  administering  body,  be  cancelled  by  the  Minister,  by  notice  in  the Gazette,   and   thereupon  the   land  shall   cease   to   be   vested   in   that administering body and shall revest in the Crown subject to the trusts affecting the land and to any valid leases, rights, or easements subsisting thereover at the date of revesting.  (my emphasis)

[71]     The following propositions emerge from ss 24, 25 and 27 of the Reserves Act

1977:

a)       The relevant Minister has a discretion to revoke reservation of the whole or part of any land, subject to compliance with  procedural requirements:  s 24(1)  and  the  following  sub-sections  dealing  with procedural issues.

b)On  revocation  of  the  reservation  of  a  public  reserve,  the  land  (if vested in the Crown or some entity deriving title from the Crown) becomes Crown land available for disposal under the Land Act 1948. Otherwise, the land may be disposed of in such a manner and for such purposes as the relevant Minister may specify: s 25(1).

c)       If  vesting  in  an  administering  body  is  cancelled  (as  opposed  to revocation of reserve status) the land ceases to be vested in the administering body and reverts to the Crown, subject to the trusts affecting the land and any valid interests in it: s 27(1).

Accordingly, a sharp distinction is drawn between revocation of reserve status and cancellation of vesting in an administering body.   In the former, the trust status is terminated; this follows from the ability to dispose of the land conferred by s 25(1). In the latter, the trusts affecting the land continue to operate: s 27(1).

(d)      The Napier Hospital site

[72]     The present proceeding concerns land described as Lots 1, 6, 9, 10, 11, 12, 15 and 16.  Those lots formed part of an area comprising 16 lots which is commonly referred to as Barrack Reserve.  Initially, it is convenient to treat lots 1 to 6 and lots 7 to 16 as separate groups.

(i)        Lots 1 to 6

[73]     Lots 1 to 6 were originally set aside as a reserve for a military barracks, hence the name Barrack Reserve.  However, s 2 of the Napier Hospital Site Act 1876 empowered the Governor to make and execute a Crown grant to the Superintendent of the Province of Hawke’s Bay of lots 1 to 6 to be held as a site for a hospital and grounds.  Because the Waste Lands Act 1858 prevented a grant from being made in respect of land that had originally been set aside for military purposes, legislation was the only method by which the land could be vested.  However, no actual grant was ever made.

[74]     The probable explanation is that the power to make the grant was given in a central government statute enacted at about the time the Provinces were abolished and before the Land Act 1877 was enacted: see paras [47] and [48].   The Napier Hospital Site Act was enacted on 30 October 1876.  The Provinces were abolished as from 1 November 1876.  That probably created doubts about the power to make a grant set out in the 1876 Act.   In those circumstances, it is understandable that implementation of the grant was delayed for some time.

[75]     In fact, the land was not vested until the passage of the Reserves and other Lands Disposal and Public Bodies Empowering Act 1917.   By s 112(1)(a) of that Act, the Governor was empowered by warrant to authorise the issue of certificates of

title in favour of the Hawke’s Bay Hospital and Charitable Aid Board for lots 1 to 6 to be held on trust for a hospital and grounds.  By s 112(2), the land was deemed to have been vested in the Board since the commencement of the Hospitals and Charitable Institutions Act 1909.

(ii)      Lots 7 to 16

[76]     Lots 7 to 16 were originally set aside as reserves under ss 144 and 145 of the

Land Act 1877.  By Gazette notices dated 25 November 1878 (temporarily) and 15

January 1879 (permanently), Governor Normanby reserved lots 7 to 16 as a site for public buildings.

[77]     Upon being so reserved, lots 7 to 16 were held on trust by the Governor for the purpose of public buildings.  In terms of the Public Reserves Act 1881, lots 7 to

16 were lands reserved for a Class II purpose.  As such there was no power to vest the land without empowering legislation.

[78]     In error, Governor Onslow by a Gazette notice in 1891, sought to vest lots 12,

13 and 14 in the Napier  Borough  Council,  in  trust,  as  a  site  for  charitable-aid buildings.

[79]     By a Gazette notice in 1901, Governor Ranfurly changed the purpose of lots

7, 8, 9 and 16 from public buildings (class II) to a public park (class III).  This was authorised by an amendment in 1889 to the Waste Lands Act 1877.

[80]     Because it was uncertain whether the 1891 notice was sufficient to vest lots

12 to 14 in the Napier Borough Council, the Napier Hospital Site Extension Act

1906 was enacted.  Section 3 provided:

The said reserve shall be and the same is hereby vested in the Borough of Napier in trust for a site for hospital buildings and grounds and for general hospital purposes, and in particular for the erection of buildings wholly or in sufficient part devoted exclusively to the treatment of incurable diseases.

[81]     The Act also recorded that it was a “special Act” for the purposes of the

Public Reserves Act 1881: Napier Hospital Site Extension Act 1906, s 2.

(iii)      Consolidation of lots 1 to 16

[82]     Following enactment of the Reserves and Other Lands Disposal and Public

Bodies Empowering Act 1917:

a)       Lots 1 to 6, initially reserved for the purpose of military barracks, had been vested in the Hawke’s Bay Hospital and Charitable Aid Board on trust for the purpose of a hospital and grounds;

b)Lots  7,  8,  9  and  16,  initially  reserved  for  the  purpose  of  public buildings, were held on trust by central government for the purpose of a public park;

c)       Lots  12,  13  and  14,  initially  reserved  for  the  purposes  of  public buildings, were held on trust by the Napier Borough Council for the purposes of a hospital; and

d)Lot 15, initially reserved for the purpose of public buildings, remained held on trust by central government for that purpose.

[83]     The Reserves and other Lands Disposal and Public Bodies Empowering Act

1920  sought  to  consolidate  and  explain  the  legislative  instruments  affecting  the

Napier hospital site:

a)       Lot 1 was to have a certificate of title issued in favour of the Hawke’s Bay Hospital and Charitable Aid Board to be held by the Board in trust as a site for a hospital and grounds;

b)Lots 2, 3, 5, 8, 13 and 14 were vested in the Borough of Napier for the purpose of public roads or streets; and

c)       Lots 6, 9, 10, 11, 12, 15 and 16 were vested in the Borough of Napier in trust as a site for a hospital and grounds.

[84]     Insofar  as  any  previous  trusts  or  purposes  were  inconsistent  with  those declared by the Act, they were revoked and repealed: Reserves and other Lands Disposal and Public Bodies Empowering Act 1920, s 98(7).

[85]     Section s 98(9) of the 1920 Act stated:

In so far as may be necessary for validating or giving effect to the purposes in this section appearing, or any of them, this section shall be deemed to be a special Act within the meaning of the Public Reserves and Domains Act

1908, or any other Act under which the passing of a special Act shall be requisite in the premises.

[86]     The status of the hospital land was re-defined through s 11E of the Health Sector (Transfers) Act 1993.  The term “health sector reserve” was defined as land vested in a transferee that was a reserve for the purposes of the Reserves Act 1977. Section 11E, in material respects, provides:

11E     Health sector reserves

(1)       In this section, health sector reserve means any land vested in a transferee that is a reserve within the meaning of the Reserves Act 1977.

(2)       Every health sector reserve is deemed to be classified, under the Reserves Act 1977, as a Government purpose reserve for the purpose of the health and disability sector and for related purposes.

(3)      Every health sector reserve may be transferred under this Act to any transferee, whether or not the transferee is in the health and disability sector.

(4)     Every transferee to whom a health sector reserve is transferred under this Act is an administering body under the Reserves Act 1977 in respect of that reserve, except that neither section 25(3) of that Act nor Part 4 of that Act applies to the transferee or to the reserve.

(5)     A transferee outside the health and disability sector to whom a health sector reserve is transferred under this Act must, as soon as practicable, promote either of the following:

(a)    an appropriate change of classification or purpose of the health sector reserve under the Reserves Act 1977:

(b)     the revocation, under that Act, of the reservation of the health sector reserve as a reserve.

(6)      If the reservation of any health sector reserve is revoked under the Reserves Act 1977, then, despite any enactment, from the date of the revocation the land comprising the former health sector reserve—

(a)    remains vested in the transferee; and

(b)       is subject to any reservations or trusts affecting that land arising from Acts (other than the Reserves Act 1977 or any other Act by which the former status as a reserve was conferred or confirmed), Provincial Ordinances, wills, deeds, or other instruments; and

(c)     is subject to clause 3 of the Schedule 1 if it is public work land within the meaning of that clause; and

(d)      is subject to any valid leases, rights, easements, or interests subsisting over that land at the date of the revocation.

…. (my emphasis)

[87]   Section 11E of the 1993 Act represented an exception to the standard consequences of reserve revocation set out in s 25 of the Reserves Act 1977.  Unlike s 25, which provides for wholesale discharge of all trusts from the land upon the revocation of reserve status, s 11E(6)(b) only provided for the discharge of those trusts  or  purposes  arising  from  Acts  by  which  the  reserve  status  was  either “conferred or confirmed”.  Put simply, only those trusts that arise out of the reserve status are revoked.  Trusts that arise independently of the reserve status remain.

[88]     The Reserves and other Lands Disposal and Public Bodies Empowering Act

1920  had  earlier  revoked  all  previously  inconsistent  trusts  or  purposes  which attached to the Napier hospital land.   It therefore provides the focal point for determination of the “trust issue”.

[89]     The critical question is whether the 1920 Act is an Act by which the status of reserve was either “conferred or confirmed” for the purposes of s 11E(6)(b).   An affirmative  answer  discharges  the  land  in  question  from  all  relevant  trusts.    A negative answer produces the opposite result.

[90]     The 1920 Act did not confer reserve status on any of the lots.  Each of the lots had been reserved prior to the enactment of the 1920 Act.

[91]     Did the 1920 Act confirm the reserve status of the relevant land?   In my judgment, it did.

[92]     Section 98(9) of the 1920 Act confirmed the underlying reserve status of the land in question.   Further, s 98(9) (by expressly declaring the 1920 Act to be a

“special Act” within the meaning of the Public Reserves and Domains Act 1908) recognised that the purpose of the reserve could be changed only by “special Act” of the General Assembly.   The land vested in the relevant body subject to the trusts confirmed by the statute.

[93]     All of the trusts that affect lots 1, 6, 9, 10, 11, 12, 15 and 16 were derived from  the  1920  Act.    That  means  that  the  land  falls  within  the  exceptions  to s 11E(6)(b)  contained  within  the  parentheses  in  that  provision.    I hold  that  the statutory trusts affecting the lots were lawfully terminated on revocation of reserve status because  they  were  confirmed  by an  Act  falling  within  the  exceptions  to s 11E(6)(b).   The same position would have pertained had the reserve status been created or confirmed by the  Reserves  Act  1977,  a  statute  to  which  s 11E(6)(b) expressly refers: see s 25(1), para [71] above and the exceptions to s 11E(6)(b) of the Health Sector Reserves Act.  For that reason, the Action Group’s claim that the trusts survived revocation fails.

The “consultation” issue

(a)   Legitimate expectation

[94]     The  Action  Group  accepted  that  there  was  no  statutory  requirement  to consult.  It argued that while there was no statutory requirement of consultation in respect of the Agency, representations from various Ministers and representatives of the Agency made it clear that the obligations of consultation that applied in respect of the District Health Board would be transferred to the Agency upon the transfer of the land.  These representations, it argued, created a legitimate expectation that the public would be consulted.

[95]     Legitimate expectation is an aspect of the duty of administrative bodies to act in a manner that administratively fair: Attorney-General of Hong Kong v Ng Yuen Shiu [1983] AC 629 (PC) at 637-638.

[96]     Legitimate expectation will often arise if a public authority were to promise to follow a certain procedure and then fail to do so.   In those circumstances, the interests of good administration dictate that the public authority be required to implement its promise: Diagnostic Medlab Ltd v Auckland District Health Board and others (High Court, Auckland, CIV 2006-404-4724, 20 March 2007, Asher J) at [239].

[97]     A  legitimate  expectation  need  not  be  derived  from  an  explicit  promise. Policy statements, regular practice and representations are all capable of forming the basis of a legitimate expectation of consultation.   However, the underlying representation must be unambiguous and unqualified: Talleys Fisheries Ltd v Cullen High Court, Wellington, CP287/00, 31 January 2002, Ronald Young J).

[98]     I am satisfied that, on the evidence, a claim that consultation was required based on legitimate expectation cannot succeed.  There were no clear or unqualified representations on the part of either the Minister of Health or the Agency that the Action Group or, indeed, members of the wider Napier community would be consulted before the decision to sell was made.

(b)      Consultation as District Health Board’s surrogate

[99]     The Action Group placed considerable emphasis on an article in Hawke’s

Bay Today on 22 January 2001 which reported:

[The Agency’s] manager of property transactions, Ian Sweetapple, said all the legal obligations of the District Health Board, including the Treaty of Waitangi claim requirements, were included with sale.

No action on further disposal of the site would be taken without the legal and treaty obligations being resolved, Mr Sweetapple said.

[100] As I indicated earlier, I have no doubt that Mr Sweetapple’s public pronouncement was designed to assuage the concerns of members of the Napier community and to quell any immediate thought of political lobbying which might follow. I find that Mr Sweetapple was someone with authority to make such a statement; I am prepared to infer that from advice given to the Conservator exercising delegated power to revoke the reserve status of the land: see para [28].

[101]   The reference to “legal obligations of the District Health Board” assumes some importance.  The District Health Board had a duty to consult.  I do not accept Mr Jagose’s submission, for the Agency, that the District Health Board had no such obligation.   Clause 43(4) of Schedule 3 to the New Zealand Public Health and Disability Act 2000 leads me to the opposite conclusion.  That provision states:

(4)      Before approving the sale or exchange of any land under subclause

(1), the Minister must be satisfied that –

The DHB concerned is, as a result of consultations with its resident population, aware of the views within the population about the proposed sale or exchange.  (my emphasis)

[102]   In my view, cl 43(4) imposes an obligation of consultation on the District Health Board.  A Minister could not be satisfied that the Board is aware of the views “within the population” about the proposed sale or exchange unless consultation had taken place.   As a matter of law the Board had an obligation to undertake that consultation process.

[103]   However, the possibility that Mr Sweetapple did, in fact, represent that the Agency  would  assume  consultation  obligations  of  the  District  Health  Board  is negated by two other considerations which, cumulatively, persuade me that I should not find any assumption of that duty by the Agency.

[104]   First, I agree with Mr Hancock for the Ministers that there is a danger in relying solely on statements recorded in a local newspaper to establish the existence of a promise or representation.  By focussing solely on that part of a statement that an editor of a newspaper may choose to reproduce, it is possible the full context of that statement could be lost.   One does not know to what question the statement responded or what else Mr Sweetapple may have said on the subject.   If legal obligations were to be imposed on the sole basis of what a newspaper reported a public official as saying, an intolerable situation would be created.  In many cases, otherwise  appropriate  delegation  would  be  curtailed,  lest  a  loose  phrase  be interpreted too literally.

[105]   In this case, there was no official policy document or media statement issued by the Agency which clearly articulated an intention to consult the general public.  In

fact the only correspondence the Agency had with the Action Group was a letter dated 1 September 2006, in which the Agency declined knowledge of any legal opinions prepared for the Ministry of Health.   In all other respects, the Agency remained silent.

[106]    Second, Mr Sweetapple’s statement was made at a time in close proximity to publication of the Waitangi Tribunal report.  An announcement had been made that certain land relating to the report was to be transferred from the District Health Board to the Agency.   Unsurprisingly, that provoked considerable concern among local Maori and it was against this background that Mr Sweetapple’s statement was made.

[107]   Parliament chose to confer an obligation of consultation on District Health Boards but to impose no similar obligation on the Agency.  Clause 43 of Schedule 3 and cl 28 of Schedule 6 to the 2000 Act stand in stark contrast.  In my view, there is no basis to conclude that a single pronouncement in a local newspaper could have led members of the public to believe that a right of consultation had been created which, otherwise, did not exist.

(c)      Ministerial representations

[108]   The  Action  Group  maintains  that  a  number  of  statements  made  by  the Minister of Health (in which she referred to the Agency as a “holding company”) evidenced an intention to engage in consultation.  With respect, I do not agree.

[109]   The reference to a “holding company” is ambiguous.  It could equally mean that the Agency is a company which will hold an asset pending sale.   Use of a holding company is an orthodox mechanism for effecting a transfer of property.

[110]   The use of the Agency to effect a sale and distribute the proceeds of that sale for the benefit of health services in the Hawke’s Bay area makes sound commercial and  political  sense.    Adoption  of  that  practical  mechanism  did  not  create  an obligation to consult not otherwise available.

[111]   The Minister had made the Government’s position on this hospital site clear from an early stage.  In the Hawke’s Bay Today article of 27/28 September 2003, the Minister was quoted as saying:

We are not going to spend another health dollar on bricks and mortar on the Hill, we will spend it on health services…[It was] time the issue was put to bed.

[112]   In  a  letter  to  the  Action  Group  dated  30  October  2003,  the  Minister confirmed the position:

The decision to close Napier Hospital was made by the National government over six years ago.   Only one secondary hospital is required to meet the health needs of the Hawke’s Bay population.  It would be dishonest to allow people to believe this decision will be reversed when no political party is promising to reopen Napier Hospital.

[113]   By letter of 18 February 2004, Mr Flack, Senior Advisor to the Minister of

Health informed the Action Group that:

The Minister has read your letter and considers that there is nothing further to add through ongoing correspondence with you and your organisation on this issue.   The Minister will not correspond further with you or your organisation.

[114]   Against that background, the Minister did nothing to suggest that the public would be consulted in the event of a sale of the hospital site.   Her actions demonstrated an intention that the land would no longer be used as a hospital site and that further public debate on the issue would not occur.

(d)   Discretionary issues

[115]   If I had been persuaded that either the Minister of Health or the Agency had an obligation to consult further, I would not have exercised my discretion to grant relief.

[116]   For many years, the Action Group has made clear its views on the topic of disposal of the hospital site.   Its opposition to any disposal has been implacable. Examples of the stance taken by the Action Group follow.

[117]   In a letter dated 4 October 2003, Mr Don Stuart, chairman of the Action Group, advised the Attorney-General that a public meeting of over 200 people had passed the following resolution:

This meeting petitions the Attorney-General to maintain the public trust on the Hill site and defend it against the actions of the Minister of Health. Those actions are contrary to natural justice and would be contrary to a caveat placed by the District Land Registrar prohibiting registration of title to any body not involved in health service delivery.

That letter reached both the office of the Attorney-General and the Minister of Health, as their replies of 18 December 2003 and 30 October 2003 respectively demonstrate.

[118]   Not satisfied with either the Minister of Health’s or the Attorney-General’s replies, Mr Stuart wrote a further letter dated 24 January 2004 to the Attorney- General.  The letter stated, in unequivocal terms, that:

The people of Napier clearly do not support the action of the Government, and do not want the site sold to [the Agency] or anyone else.  When last year that Napier City Council held a consultation to establish whether it should lift a caveat blocking the sale of the site, over 1,400 written responses were received – easily an all time record for any consultation by Council on any subject – and no fewer than 98% of the submissions urged Council to retain its caveat.

That letter came to the attention of the Minister of Health as her private secretary’s response of 12 February 2004 indicates.

[119]   On any view, the Minister and (I infer) the Agency were well aware of the Action Group’s concerns and the position it had taken.  Further consultation would have been a futile exercise.

Conclusion

[120]   For the reasons given, the Action Group’s claims all fail.  The application for judicial review is dismissed.

[121]   The issues raised by the Action Group were of importance to the local Napier community.  Furthermore, the trust issue raised a significant question of law which, I am satisfied, it was in the public interest to explore.  Because of that public interest factor, I decline to make any order for costs.

[122]   I thank counsel for their helpful submissions.

P R Heath J

Delivered at 10.00am on 17 May 2007

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