Pou�kani Claims Trust v Attorney-General - [2023] NZHC 1336

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-772

[2023] NZHC 1336

UNDER the Judicial Review Procedure Act 2016; Part 30 of the High Court Rules; the Declaratory Judgments Act 1903; and the Common Law

IN THE MATTER OF

an application for judicial review and for declarations

BETWEEN

POUĀKANI CLAIMS TRUST

Applicant

AND

THE ATTORNEY-GENERAL

First Respondent

THE REGISTRAR-GENERAL OF LAND
Second Respondent

MERCURY NZ LIMITED

Third Respondent

Hearing: 26 & 27 April 2023

Counsel:

M Smith and T Haradasa for Applicant

D A Ward and Y Moinfar-Yong for First Respondent D Watson for Second Respondent

J Hodder KC, L Fraser and K Grant for Third Respondent

Judgment:

30 May 2023

JUDGMENT OF CHURCHMAN J

POUĀKANI CLAIMS TRUST v THE ATTORNEY-GENERAL [2023] NZHC 1336 [30 May 2023]

TABLE OF CONTENTS

Introduction.............................................................................................................. [1]

Parties....................................................................................................................... [6]
Standing.................................................................................................................. [10]

Factual background and context.......................................................................... [12]

The history of the Waikato Hydro Scheme........................................................... [14]
Mercury’s acquisition of the Waikato Hydro Scheme.......................................... [18]

The Sale Deed 1988  [18]
The Memorandum of Agreement 1989  [23]
The Deed of Operation Easements/Indemnity 1993  [24]
The 1994 and 1995 Land Schedules  [28]

The ECNZ sale to Waikato SOE Ltd [30]

Further deeds between the Crown, ECNZ, and MRP [33]
Deeds of Easement between the Crown and MRP 2010 [35]

Pouākani attempts to register memorials............................................................ [38]

PCT’s claim............................................................................................................ [41]

The Declaratory Judgments Act route................................................................. [42] The judicial review route......................................................................................................... [44]

Preliminary issues.................................................................................................. [45]

Letters as admissible evidence............................................................................. [46]
The Court’s jurisdiction to make declarations..................................................... [49]

Legal framework................................................................................................... [54]

The Waitangi Tribunal’s resumption jurisdiction................................................. [55]
The SOE Act......................................................................................................... [59]
The Land Act........................................................................................................ [64]
Submissions............................................................................................................ [65]
PCT...................................................................................................................... [65]
The Attorney-General.......................................................................................... [73]
The Registrar-General......................................................................................... [81]
Mercury................................................................................................................ [82]

Were the easements transferred under s 23 of the SOE Act? [87]

The easements are core land assets..................................................................... [89]
Absence of consideration for the easements...................................................... [105]

The 2010 Deeds................................................................................................. [107]

Non-compliance with the SOE Act..................................................................... [119]

The bigger picture.............................................................................................. [121]
Conclusion......................................................................................................... [131]
Relief..................................................................................................................... [132]
Submissions........................................................................................................ [133]

Attorney-General [134]
Mercury [136]

Mandamus orders.............................................................................................. [139]
Can the memorials be retrospectively added?................................................... [142]
Conclusion......................................................................................................... [151]

Costs...................................................................................................................... [152]

Introduction

[1] The applicant, Pouākani Claims Trust (PCT) is a post-settlement governance entity. It represents the Pouākani people, who have tikanga rights, interests, and responsibilities in relation to the bed and waters of the Waikato River, including adjacent lands that Mercury NZ Ltd (Mercury), the third respondent, uses in its Waikato Hydro Scheme.

[2] In 1988, the Crown entered into an agreement for the transfer of all assets used to run electricity generation in New Zealand to a newly established State-Owned Enterprise (SOE), Electricity Corporation of New Zealand (ECNZ) under the State- Owned Enterprises Act 1986 (SOE Act). This transfer included the Waikato Hydro Scheme. From 1988 a number of agreements were entered into between the Crown, ECNZ, and other SOEs that were later established for the purpose of running electricity generation in New Zealand. As a part of the deeds that were entered into, there was an agreement that the Crown would remain as the title holder of fee simple title to the lakebeds of Whakamaru and Maraetai and instead would grant a perpetual operating easement to the SOE responsible for electricity generation in this area. These specific easements were granted to Mighty River Power Ltd (MRP), now known as Mercury, in 2010. The title of these easements, when granted to MRP, crucially did not include any memorials under s 27A of the SOE Act.

[3] PCT did not discover that these easements did not have memorials until they brought a claim in the Māori Land Court. In March 2021 PCT wrote to the Registrar- General of Land (Registrar-General) requesting he include the memorials on the title to the easement. The Registrar-General then wrote to Mercury informing it that he was intending to amend the register to include the memorials. Mercury responded setting out its objection to such alteration. The Registrar-General considered this to be a “material objection” under s 21 of the Land Transfer Act 2017 (LTA) which, the Registrar-General says, prevented him from altering the register. In response, PCT commenced these proceedings.

[4] PCT advances two claims. The first is a claim under the Declaratory Judgments Act 1908 seeking declarations that the easements should have contained

the memorials when they were granted and should now be added to the title. The second is a judicial review of the Registrar-General’s decision to not alter the register. Because of the decisions I have reached in relation to the claim under the Declaratory Judgements Act, I do not need to address the judicial review proceedings.

[5] I have reached the conclusion that the deeds entered into which granted general and specific easements were a part of the bargain that was first entered into in 1988, and thus were transfers of interests in land pursuant to s 23 of the SOE Act. I also conclude that the memorials can be retrospectively added to the register as this is an approach to the LTA that is most consistent with te Tiriti o Waitangi and the Treaty of Waitangi (the Treaty) and gives effect to the purpose of the protective mechanisms under the SOE Act.

Parties

[6] The applicant, PCT, is a post-settlement governance entity representing the Pouākani people and their interests in parts of the Waikato River and adjacent lands currently utilised by Mercury as part of the Waikato Hydro Scheme.

[7] The first respondent is the Attorney-General, who is the Crown official responsible for ensuring the Crown honours its Treaty obligations to Māori. The Attorney-General appears in respect of the Minister of Finance and the Minister for State-Owned Enterprises, who were the parties to the original 1988 Sale Deed to the Electricity Corporation of New Zealand Ltd and its successors.

[8] The second respondent is the Registrar-General of Land (the Registrar- General). The Registrar-General has several statutory responsibilities. The most relevant being:

(a)under s 9 of the SOE Act, not to act in a manner that is inconsistent with the principles of the Treaty; and

(b)under s 27A of the SOE Act, to register s 27A memorials where any interest in land is:

(i)transferred to a State-Owned Enterprise under s 23 of the SOE Act; or

(ii)vested in a State-Owned Enterprise by a notice in the Gazette under s 24 of the SOE Act; or

(iii)vested in a State-Owned Enterprise by an Order-in-Council made under s 28 of the SOE Act.

[9] The third respondent is Mercury, a renewable energy generator and retailer operating hydro dams and power stations on, and adjacent to, the bed of the Waikato River as part of the Waikato Hydro Scheme.

Standing

[10] An issue was raised in Mercury’s statement of defence as to whether PCT had sufficient standing to bring the current claim, although this point was not vigorously argued in the proceedings.

[11] Courts in New Zealand tend to take a liberal approach to the issue of standing and decide the matter on the “totality of the facts”.1 PCT is a post-settlement governance entity acknowledged in the Pouakani Claims Settlement Act 2000 as the “mandated representative of the Pouākani people”.2 PCT therefore can be considered to sufficiently represent the Pouākani people who clearly have an interest in the relevant areas, both from a tikanga perspective and in relation to their current claim before the Waitangi Tribunal. As a result, they have standing.

Factual background and context

[12] The hydro-electricity stations and dam sites that Mercury owns along the Waikato River make up what is known as the Waikato Hydro Scheme. There are

1 As in Environmental Defence Society Inc v South Pacific Aluminium Ltd (No 3) [1981] 1 NZLR 216 (CA) adopting the position of the House of Lords in Inland Revenue Commissioners v National Federation of Self-Employed and Small Business Ltd [1982] AC 617 (HL); and Budget Rent A Car Ltd v Auckland Regional Authority [1985] 2 NZLR 414 (CA) at 419.
2 Pouakani Claims Settlement Act 2000, s 3(a).

specific sites that form part of the Waikato Hydro Scheme which are integral to these proceedings – Lake Whakamaru and Lake Maraetai. The lakes are located upstream of the Whakamaru and Maraetai power stations respectively. Mercury holds registered perpetual operating easements over Lake Whakamaru and Lake Maraetai, which were registered under the Land Transfer Act 1952. The fee simple title to the lakebeds themselves are held by the Crown under the Land Act 1948.

[13] I now set out some relevant background and context to these proceedings in relation to the history of the Waikato Hydro Scheme, the transfer of the Waikato Hydro Scheme, and the registration of the operating easements over the lakes.

The history of the Waikato Hydro Scheme

[14] The hydro dams at Maraetai and Whakamaru are built upon the traditional lands of the Pouākani people. Construction of the Waikato Hydro Scheme began in 1929 with the Arapuni dam and concluded in the 1950s. Hydro stations were commissioned at Maraetai in 1952 and then at Whakamaru in 1956. The construction works undertaken for these dams destroyed many sites of significance for Pouākani people, including wāhi tapu. The construction had wide and adverse effects on Pouākani people. Te Rōpū Whakamana i te Tiriti o Waitangi | The Waitangi Tribunal in their Pouakani Report summarised the impact of this construction:3
We acknowledge it is difficult sometimes to achieve a balance between development of energy resources in the national interest and the concerns of local people. In the case of the Waikato hydro-electric power schemes of the 1950s, local Maori concerns were not considered important and many places significant to Maori were “lost”. Such losses are not compensated for by money paid out for land taken under the Public Works Act. The failure to acknowledge the significance of wahi tapu in Maori terms has contributed to a sense of powerlessness and grievance among Maori people in all the areas affected by Waikato hydro-electric power schemes.

…

By various actions of the Crown, or worse, the failure of the Crown to acknowledge and protect Māori interests and concerns for wahi tapu, taha wairua (spiritual qualities), mahinga kai, fisheries, and other traditional uses of the river, the mana of these tribes has been devalued.

3 Te Rōpū Whakamana i te Tiriti o Waitangi | Waitangi Tribunal The Pouakani Report (Wai 33, 1993) at 294 and 311.

[15] In the report, the Tribunal noted that ownership of the riverbed, and rights and resources of the Waikato River, remained unresolved. They recommended the Crown give urgent attention to these matters as they were in the national interest.4 The Tribunal did not, however, make findings on the issue of ownership.

[16] From the 1950s until the 1980s, the Waikato Hydro Scheme was state owned and operated. In the mid-1980s, the New Zealand Electricity Division of the Ministry of Energy (NZED) was responsible for the operation and management of all electricity generation in New Zealand, including the Waikato Hydro Scheme. Management of the Waikato Hydro Scheme changed with the introduction of the SOE Act. The SOE Act created a new state enterprise called ECNZ. ECNZ was formed as such on 1 April 1987 and, until March 1988, operated the Crown’s electricity assets pursuant to a licensing agreement.

[17] From March 1988, a series of agreements were entered into by the Crown, ECNZ, and Waikato SOE Ltd. Waikato SOE Ltd became MRP and then became Mercury. These agreements facilitated the transfer of land and assets that made up the Waikato Hydro Scheme from Crown to, ultimately, Mercury.

Mercury’s acquisition of the Waikato Hydro Scheme

The Sale Deed 1988

[18] In March 1988, the Crown, acting through the Minister of Finance and the Minister for SOEs, and ECNZ entered into a Deed of Sale and Purchase (the Sale Deed). In this Deed, the Crown agreed to transfer the assets used to run the whole of New Zealand’s electricity system, including the Waikato Hydro Scheme, to ECNZ pursuant to the SOE Act.5 The purchase price was $6.3 billion. There are three parts of the Sale Deed which are significant to these proceedings.

4 At 312.
5 Clause 3.3 of the Sale Deed stipulated that the Crown would deliver “Assets” to ECNZ by using its “its best endeavours … to make such orders in Council pursuant to sections 23(7)(c), 23(8)(b), 27(2) and 28(1) of the [SOE Act]”.

[19] First, the land assets that were to be transferred under the deed were not specified. The deed defined assets to include “Core Land Assets”. “Core Land Assets” were defined by the Sale Deed as:

… those land assets of the Crown as at 31 March 1988 held for the purposes of present or future electricity generation or supply … as are reasonably required by the Corporation to operate its business having regard to the Corporation’s commercial objectives as set out in its Statement of Corporate Intent. … “Core Land Assets” shall be specifically identified in the manner provided in clauses 5.2 to 5.4 hereof.

[20] Clauses 5.2 and 5.4 stipulated a process in which the parties were to compile and agree to a list of Core Land Assets. This list would turn into a schedule that would be “deemed to form part of [the Sale Deed]” upon signature of the parties. Clause 5.3 anticipated the identification of the Core Land Assets may cause dispute, and provided that both parties would use their best endeavours to resolve any dispute “as to whether an asset is or is not a Core Land Asset or as to the nature of the title or other interest to be vested in [ECNZ]”. The clause also provides that, if necessary, the matter would be referred to a Ministerial Committee to make a final decision.

[21] Second, the Sale Deed contemplated that interests in land other than fee simple transfer could be included in the Core Land Assets schedule by agreement. Clause 5.1(b) of the Sale Deed provided that Crown had an obligation to:

… do all such things as may be necessary to enable [ECNZ] to become registered as a proprietor in fee simple of the [Core Land Assets to be transferred], or in such other estate or interest in land as the schedule may specify in respect of any particular area of land.

[Emphasis added]

[22] Third, and finally, cl 5.8 provided that if any of the Core Land Assets, or part thereof, were returned to Māori ownership under the Waitangi Tribunal’s resumption powers, the Crown would indemnify ECNZ.

The Memorandum of Agreement 1989

[23] On 31 March 1989, the Crown and ECNZ entered into a Memorandum of Agreement (the 1989 Memorandum). This attached to the Sale Deed the land schedules of Core Land Assets to be transferred (Land Schedules). These Core Land

Assets included the hydro lakes within the Waikato Hydro Scheme. Both the power stations at Maraetai and Whakamaru were included in the schedule. In respect of the Maraetai power station, the schedule recorded that lakeside and riverbed easements/indemnities were to apply. In respect of the Whakamaru power station, it recorded that easements would be required over some land for ECNZ.

The Deed of Operation Easements/Indemnity 1993

[24] On 16 April 1993, the Crown and ECNZ entered into a Deed of Operating Easement/Indemnity (the 1993 Deed). This recorded the parties’ agreement that ownership of lakebeds and riverbeds used for electricity generation would not be transferred to ECNZ. Instead, the 1993 Deed recorded an agreement that the Crown would grant ECNZ perpetual operating easements over the “subject land”. “Subject land” was defined by cl 1.1(d) as the land described in the Land Schedules. The definition of “subject land” also included any land later identified by the parties as being subject to the 1993 Deed pursuant to cl 11.

[25] Clause 11 recognised that despite the best efforts of the parties, all the land which should be subject to the 1993 Deed may not have been identified by the Land Schedules. It went on to stipulate:

… [if] it is ascertained that other land which should have been subject to [the 1993 Deed] and which is still in Crown ownership has not been made subject to [the 1993 Deed] then the [Crown] and [ECNZ] shall at their joint expense do all such acts and things as may be necessary to arrange the grant of an easement over that land …

[26] The 1993 Deed further acknowledged that the Land Schedules might be inaccurate as to the precise locations and land boundaries and that these would be replaced by authoritative plans and schedules. Clause 7 stipulated that the authoritative plans would then be deemed to fall within the definition of “subject land” under cl 1.1(d) of the 1993 Deed.

[27] Recital 3 and cl 12 of the 1993 Deed recorded that the easements were to be granted on an individual basis and registered under s 60 of the Land Act 1948. The terms and conditions of the easements were outlined in cl 2.1. The grant of the easements under cl 2 did not explicitly refer to the SOE Act nor the Sale Deed. The

1993 Deed also included an indemnity clause in cl 5, which did not make specific reference to resumption powers.

The 1994 and 1995 Land Schedules

[28] Pursuant to cl 5 of the Sale Deed, the Land Schedules were replaced by further land schedules in 1994 (1994 Land Schedule) and 1995 (1995 Land Schedule). These schedules more accurately defined the land and assets and, upon signature, became the authoritative schedules of Core Land Assets for the purposes of cl 5.4 of the Sale Deed.

[29] The 1994 Land Schedule provided that Lake Whakamaru was subject to an operating easement in gross to the benefit of ECNZ which covered the lakebed and areas along the foreshore. The 1994 Land Schedule noted that the boundaries of the easements were yet to be finalised between the Crown and ECNZ. The 1995 Land Schedule provided that Lake Maraetai was subject to an operating easement in gross to the benefit of ECNZ which covered the lakebed and areas along the foreshore. It also recorded that the boundaries of the easements were yet to be finalised between the Crown and ECNZ. The parties are in disagreement as to whether these specific easements were transferred pursuant to the SOE Act. This disagreement is discussed in detail below.6

The ECNZ sale to Waikato SOE Ltd

[30] In April 1998, the New Zealand government announced that ECNZ would be restructured into three separate SOEs, of which Waikato SOE Ltd was one. This restructuring was to promote competition in the electricity sector. These three SOEs were created in December 1998.7 Waikato SOE Ltd was to own and operate the electricity assets and associated land and infrastructure within the Waikato Hydro Scheme. In December 1998, ECNZ sold its assets relating to the “Northern Generation Group”, the division of ECNZ that operated the Waikato Hydro Scheme, to Waikato SOE Ltd under the Agreement Relating to the Sale and Purchase of Assets (the 1998 Agreement).

6 At [87]–[121].
7 State-Owned Enterprises (Genesis Power Limited, Hydro Energy Limited, and Waikato SOE Limited) Order 1998.

[31] The 1998 Agreement defined “Assets” as including all “land” constituting “part of or relating exclusively to the Northern Generation Group”. “Land” was defined as meaning freehold land, leasehold interests and:

… all other rights or interests in land (including licences and easements) held, legally or beneficially, by ECNZ … subject in each case to any ... encumbrances whatsoever (including, without limitation, section 27B of the State-Owned Enterprises Act 1986).

[32]Clause 6.10 of the 1998 Agreement stipulated:

Notwithstanding any other provision of this Agreement, if, after the Settlement Time, Waikato SOE has the right, under the deed of assumption and release referred to in Schedule 3, to require the Crown to comply with its obligations in terms of [the Sale Deed] to transfer to Waikato SOE legal and registrable title to certain Assets (including without limitation freehold Land Assets) then Waikato SOE will pursue its rights against the Crown and will have no recourse to ECNZ to the extent of those rights.

Further deeds between the Crown, ECNZ, and MRP

[33] In March 1999, Waikato SOE Ltd changed its name to MRP. Another deed of assumption and release was entered into on 1 April 1999 between the Crown, ECNZ, and MRP (1999 Deed). In this Deed, MRP agreed to assume ECNZ’s rights, obligations, and liabilities under the 1993 Deed. There is a disagreement between the parties about the effect of the 1999 Deed. I detail this disagreement further below.8

[34] A process of surveying and title transfer continued into the 2000s. The Crown, ECNZ, and MRP entered into a further deed on 10 April 2003 (the 2003 Deed). The 2003 Deed recorded that all land MRP had purchased from ECNZ, for which legal title had not yet been transferred, was to be transferred when certificates of title under the Land Transfer Act 1952, or other instruments of title, were able to be issued. Clause 2.1 of the 2003 Deed stipulated that MRP was responsible for ensuring that the certificates or other instruments of title were accurate. These responsibilities to title included responsibilities in relation to surveying, easements, and other encumbrances, and claims by Māori “whether under the Treaty of Waitangi Act 1975, or otherwise”.

8 At [98]–[99] below.

Deeds of Easement between the Crown and MRP 2010

[35] For the transfer of the easements a template easement was prepared for and approved by the Commissioner of Crown Lands. This template was consistent with the requirement under the 1993 Deed for individual easements to be registered under s 60 of the Lands Act 1948. Survey plans were prepared to define each lake/river affected and the process culminated in the Commissioner of Crown Lands granting MRP individual easements in relation to Lake Whakamaru and Lake Maraetai in December 2010.9 These grants were recorded in Deeds of Easement between the Crown and MRP (the 2010 Deeds). The deeds are almost identical.

[36]The 2010 Deeds recognised the following:

(a)the Sale Deed;

(b)the 1993 Deed, noting in particular that the ownership of beds of lakes and rivers would not be transferred to ECNZ but operating easements would be granted to enable ECNZ to carry out electricity generation;

(c)that, as a “consequence of its purchase”, MRP is “desirous” of the grant of easements over Whakamaru and Maraetai Easement Land; and

(d)the easements are granted under s 60 of the Land Act 1948 on the terms recorded in the 2010 Deeds.

[37] The 2010 Deeds do not explicitly refer to the SOE Act. In 2011 the records of title for the easements were registered under the Land Transfer Act 1952. What is critical to these proceedings is that neither of the records of title for the easements include memorials under s 27A of the SOE Act.

Pouākani attempts to register memorials

[38] PCT did not discover that the titles did not have the memorials registered until proceedings were commenced in the Māori Land Court. The Māori Land Court

9 The Deeds provided that the Commissioner of Crown Lands appointed under s 24AA of the Land Act 1948 grants MRP an easement under s 60 of the Land Act 1948.

proceeding is ongoing and seeks determinations that specified parts of the bed and waters of the Waikato River remain Māori customary land. In March 2021, PCT, through its solicitors, wrote to the Registrar-General requesting that the s 27A SOE Act memorials be registered as interests on the records of title for the easement.10 In September 2021, the Registrar-General wrote back explaining that the memorials were not originally registered because the easements were thought to have been granted under the Land Act 1948, as opposed to the SOE Act. The Registrar-General said that, following its own review of the sale process, the memorials should be placed on the records of title and that he was going to take steps to register these memorials accordingly.

[39] A few weeks later, the Registrar-General wrote to Mercury giving notice that the he intended to register the memorials sought by PCT over the titles of Mercury’s easements. In October 2021, Mercury wrote to the Registrar-General setting out its objections to the proposal. In November 2021, the Registrar-General formed the view that he was not bound to consider any further submissions from PCT on the matter, and that the issue of whether s 27A of the SOE Act applied was an issue more appropriately dealt with by the Court.

[40] In June 2022, the Registrar-General accordingly decided not to alter the records of title for the easements. This was on the basis that the objections to the proposed registration of the memorials by Mercury amounted to “material objections” under s 21 of the Land Transfer Act 2017 and prevented the Registrar-General from altering the register.

PCT’s claim

[41] PCT seeks declarations that that the records of title for the easements ought to contain memorials pursuant to s 27A of the SOE Act. This claim is brought by, what I will refer to as, two separate routes:

(a)seeking declarations pursuant to the Declaratory Judgments Act 1908; and

10 Pursuant to s 27A of the SOE Act.

(b)judicial review of the Registrar-General’s decision to decline an application to amend the records of title for the easement.

The Declaratory Judgments Act route

[42]The declarations being sought by PCT are that:

(a)the documents referred to in [18]–[40] above form part of a single overall bargain to transfer land and interests in land (including the easements) from the Crown to ECNZ and its successors, and that this was pursuant to the SOE Act with the consequence that the easements needed to have the s 27A memorials added to their records of title;

(b)for the easements not to be subject to s 27A SOE Act memorials would:

(i)be contrary to ss 9, 27A, and 27B of the SOE Act; the honour, active protection, and redress principles of the Treaty; and the tino rangatiratanga guarantee in art 2 of te Tiriti o Waitangi; and

(ii)give rise to breaches of the Crown’s obligations under the Treaty to honour the principles which the Crown, through the Attorney-
General, has a constitutional responsibility to avoid; and

(c)the Registrar-General’s duty in s 27A of the SOE Act was, and is, engaged and the memorials should be added to the records of title for the easements.

[43] For PCT to succeed in their claim under this route it must be established that the easements are land assets that were “transferred” under s 23 of the SOE Act. There are two significant elements to this issue. The first is a question of contract interpretation, whether the 1993 Deed and 2010 Deeds were outside of the scope of the original bargain and thus the SOE Act. The second is an issue of constitutional significance asking whether the Crown can effectively sidestep its Treaty obligations under the SOE Act by transferring interests in land under a different legislative regime. Although these issues are conceptually distinct, there is substantial overlap on these facts.

The judicial review route

[44] PCT argues that the decision of the Registrar-General amounted to an error of law on multiple grounds. For reasons specified below, judicial review of the decision of the Registrar-General need not be undertaken. The crux of the dispute — whether the memorials can and should be placed on the register — can be adequately dealt with under the Declaratory Judgments route.

Preliminary issues

[45] There are two preliminary issues that must be addressed. I now set these out and deal with them briefly.

Letters as admissible evidence

[46] Given that this case is, at its core, one of contractual interpretation, there are a number of extraneous materials relied upon by PCT — in the form of various letters and communications between various Crown entities and ECNZ — to show that the intention was always for there to be easements over to the relevant lands. Mercury’s position on this is that the materials do not have any relevance to the shared intention of the parties in entering the various deeds and are therefore inadmissible to the proceedings. Mercury relies on the authority in Bathurst Resources to advance this point.11

[47] The crux of counsel’s submission is that, because the 2010 Deeds were operative in effecting the transfer of the individual easements and are distinct from the previous deeds settled between the parties, the surrounding documents referred to by PCT cannot be helpful in the interpretation exercise. As I expand on below, this is predicated on the incorrect assumption that the 2010 Deeds should be considered in isolation from the Sale Deed and the various other deeds which followed. Accordingly, while Mercury is correct that a long time had elapsed between the various documents and the 2010 Deeds, this claim requires a consideration of all the various agreements made over time. The extraneous materials fall close in time to the

11 Bathurst Resources Ltd v L&M Coal Holdings Ltd [2021] NZSC 85, [2021] 1 NZLR 696 [Bathurst Resources] at [75].

entering of the Sale Deed by the parties, being both prior to and shortly after, and therefore remain relevant to the interpretative exercise the Court is required to undertake.

[48] Mercury also takes particular issue with the use of, and reference to, internal government documents such as cabinet minutes and communications between government departments. I accept Mercury’s position that these internal documents cannot be useful in the objective evaluation of the various agreements to the extent that they elucidate only the Crown’s subjective intention or belief. However, the strength of a particular communication in establishing the objective intentions of the parties is a consideration that will be taken into account when determining the meaning of the relevant deeds and agreements. The context of this claim must also be considered. PCT’s claim raises fundamental questions of the operation of the SOE regime in the land transfer context. Internal government documents are useful in interpreting Parliament’s intention regarding the SOE regime and how the government considered that the regime would protect Māori interests in a situation such as this.

The Court’s jurisdiction to make declarations

[49] As noted above, PCT is seeking a number of declarations under the Declaratory Judgments Act. On PCT’s pleadings, this declaratory issue is to be considered separately from the substantive grounds of judicial review. PCT submits that declarations reflect a position of legal right and therefore can be granted on their own without a need to first establish any error amenable to judicial review.

[50] Declaratory judgments state the legal position between parties without declaring any consequential relief.12 They perform the “critical constitutional function of vindicating legal rights and promoting the ideals of the rule of law”.13 Declaratory orders are binding on the parties and may be given “by way of anticipation with respect to any act not yet done or any event which has not yet happened”.14 Parties whose conduct or rights depend on the meaning of a statute or instrument — including an

12     Declaratory Judgments Act 1908, s 2; and Mandic v Cornwall Park Trust Board (Inc) [2011] NZSC 135, [2012] 2 NZLR 194 [Mandic] at [8].
13     Philip Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at [27.3.3(2)].
14     Declaratory Judgments Act, s 9; and Mandic, above n 12, at [8].

agreement — may obtain an authoritative ruling on those rights under the Declaratory Judgments Act.15 The Courts may refuse to grant a declaration on a number of grounds, including where the declaration would lack utility,16 or where the question is purely abstract or hypothetical.17 Although it is not necessary to enter into a full discussion of these principles at this point, they inform the decision-making process regarding the declarations dealt with below.

[51] It was authoritatively established by the Supreme Court in Mandic v Cornwall Park Trust Board (Inc) that the consideration and granting of declarations can be done regardless of whether there is an existing dispute.18 This means that the Court has the jurisdiction to make the declarations sought in the current case without having to decide the substantive grounds for judicial review.

[52] The issue was also raised by Mercury that the declarations sought by PCT in their pleadings are different in character to the issues it raised with the Registrar-General in March 2021 when first attempting to have the relevant memorials placed on the register. This issue has no real impact on the current proceeding. It is immaterial to the current decision whether the breadth of the issues raised in the current declarations were brought to the attention of the Registrar-General. Previous and private communication between PCT and the Registrar-General does not limit the jurisdiction of the Court to grant the declarations sought.

[53] In any event, the jurisdiction conferred upon the Court to make a declaratory order under the Declaratory Judgments Act is discretionary; the Court may “on any grounds which it deems sufficient, refuse to give or make any such judgment or order”.19 Moreover, the Court has the inherent jurisdiction to declare rights and obligations of parties.20 It can also do so under its general equitable jurisdiction at

15     Mandic, above n 12, at [9].
16     Te Whakakitenga O Waikato Inc v Martin [2016] NZCA 24, [2017] NZAR 173 at [39].
17 At [39].
18     Mandic, above n 12, at [8]–[9].
19     Declaratory Judgments Act, s 9.
20     Attorney-General v Taylor [2018] NZSC 104, [2019] 1 NZLR 213 at [118].

common law.21 This means that Court is also not bound to make only the declaratory orders pleaded by PCT, but retains the ability to make any declaratory order it sees fit.

Legal framework

[54] In order to determine whether the easements were “transferred” to an SOE in terms of s 23 of the SOE Act, it is necessary to traverse the background, and legislative scheme, of memorials under the SOE Act. This includes the resumptive powers of the Waitangi Tribunal, the relevant provisions of the SOE Act, and the role of memorials within the statutory scheme. It is also necessary to outline the legislative provisions under the Lands Act in which the easements were transferred pursuant to.

The Waitangi Tribunal’s resumption jurisdiction

[55] The Waitangi Tribunal obtained its resumption jurisdiction a result of a settlement of litigation between the New Zealand Māori Council and the Crown regarding the initial transfer of Crown-owned assets to newly established SOEs. When establishing SOEs, the Crown enacted the SOE Act. The relevant provisions of this Act were as follows:

9 Treaty of Waitangi

Nothing in this Act shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi.

…

27 Maori land claims

The submission in respect of any land or interest in land of a claim under section 6 of the Treaty of Waitangi Act 1975 does not prevent the transfer of that land or of any interest in that land or of that interest in land—

(a)by the Crown to a State enterprise; or

(b)by a State enterprise to any other person.

[56] The purpose of these provisions was to ensure that when SOEs were established, Treaty of Waitangi claims pending before the Waitangi Tribunal were not prejudiced. The provisions allowed for “resumption” of land by the Crown by Order

21 Association of Dispensing Opticians of New Zealand Inc v Opticians Board [2000] 1 NZLR 158 (CA) at [10].

in Council where recommended by the Waitangi Tribunal.22 The Court of Appeal found in the Lands case that s 9 of the SOE Act obliged the Crown to have a protective mechanism so that the transfer of land, or interests in land, to SOEs did not prejudice Treaty claims. The Court found that s 27 did not protect any claims filed after the SOE Act received royal assent. The Court said further protective mechanisms were needed to comply with s 9 of the Act, focusing on reasonable and practical protections for future claims.23

[57] Following this decision, Parliament enacted the Treaty of Waitangi (State Enterprises) Act 1988 to give effect to an agreement reached between the New Zealand Māori Council and the Crown that the Waitangi Tribunal would have a binding resumption jurisdiction in regard to land, or interests in land, transferred to SOEs.24 This legislation introduced ss 27–27D into the SOE Act and ss 8A–8H into the Treaty of Waitangi Act 1975.

[58] To resume SOE land to Māori, the Tribunal must first find that there is a “well- founded” claim that the Crown has acted inconsistently with Treaty principles.25 Second, it must consider, in respect of the land transferred to or vested in an SOE, whether the action to compensate for or remove the prejudice caused by the breach “should include the return to Māori ownership of the whole or part of that land or of that interest in land”.26 If the Tribunal believes the land should be returned to Māori ownership, they may recommend this. This recommendation is then binding if the parties do not reach a negotiated settlement within 90 days.27 Sections 27B and 27C of the SOE Act then provide the statutory framework for resumption within the Act.

The SOE Act

[59] Sections 23–29A of the SOE Act set out the provisions concerning the transfer of Crown assets and liabilities to SOEs. PCT’s claim is that s 23 applies to the easements in this case. The relevant subsections provide:

22     New Zealand Māori Council v Attorney-General [1987] 1 NZLR 641 (CA) [Lands case] per Cooke P at 656 and Somers J at 695.
23     At 665 per Cooke P and 684 per Richardson J.
24     See Treaty of Waitangi (State Enterprises) Act 1988, long title.
25     Treaty of Waitangi Act 1975, s 8A(2)(a)(i).
26     Section 8A(2)(a)(ii).
27     Section 8B; note that there are exceptions to this 90 day rule in subs (3) and (5).

23 Transfer of Crown assets and liabilities to State enterprises

(1)Notwithstanding any Act, rule of law, or agreement, the shareholding Ministers for a State enterprise named in Schedule 2 may, on behalf of the Crown, do any 1 or more of the following:

(a)transfer to the State enterprise assets and liabilities of the Crown (being assets and liabilities relating to the activities to be carried on by the State enterprise):

…

(c) grant to the State enterprise leases, licences, easements, permits, or rights of any kind in respect of any assets or liabilities of the Crown—

for such consideration, and on such terms and conditions, as the shareholding Ministers may agree with the State enterprise.

(2)The responsible Minister shall lay before the House of Representatives any contract or other document entered into pursuant to subsection (1) within 12 sitting days after the date thereof.

…

(4) Any asset or liability of the Crown may be transferred to a State enterprise pursuant to this Act whether or not any Act or agreement relating to the asset or liability permits such transfer or requires any consent to such a transfer.

[60]Section 23 must be read alongside s 29, which relevantly provides:

29 Interpretation relating to transfer of assets and liabilities

(1)In this section and in sections 23 to 28 and 29A, unless the context otherwise requires,—

agreement includes a deed, a contract, an agreement, an arrangement, and an understanding, whether oral or written, express or implied, and whether or not enforceable at law

assets means any real or personal property of any kind, whether or not subject to rights, and without limiting the generality of the foregoing includes—

(a)any estate or interest in any land, including all rights of occupation of land or buildings:

…

transfer includes—

(a)assign and convey; and

(b)vest by Order in Council or notice in the Gazette; and

(c)confer estates in fee simple of land held by the Crown, whether in allodium or otherwise; and

(d)grant leases, rights, and interests in any real or personal property; and

…

(2)In this section and in sections 23 to 28, a reference to transfer, authorise, or grant includes entering into an agreement to transfer, authorise, or grant, as the case may be.

(3)This section and sections 23 to 28 shall have effect, and assets and liabilities may be transferred pursuant to this Act, notwithstanding any restriction, prohibition, or other provision contained in any Act, rule of law, or agreement that would otherwise apply.

[61] Sections 24 and 25 of the Act set out particular requirements for the transfers of land to an SOE in specific circumstances. None of the circumstances set out in these provisions are applicable to the facts of the proceeding — where underlying land has been retained by the Crown and is not registered under the Land Transfer Act. Section 28 of the Act provides for Orders in Council to be made for the purposes of facilitating the transfer of assets and liabilities to an SOE. It says that the Governor- General may do any one or more of the following by Order in Council:

(a)vest in or impose on a State enterprise any asset or liability (other than land to which section 24(1) applies), or any class of any such asset or liability, that the State enterprise has agreed to have transferred to it:

(b)vest land in a State enterprise for the purposes of section 24(1):

…

(g)declare that any Order in Council made under this section shall be deemed to be notice to all persons, and that specific notice need not be given to any authority or other person:

(h)direct any authority or other person to register or record any such vesting or declaration.

[62] Once land, and any interests in land, have been transferred from the Crown to an SOE via s 23, ss 27A and 27B provide a mechanism for Māori to receive these interests back. It provides:

27A Registrar-General of Land to register necessary memorial

(1)Where any land or interest in land is transferred to a State enterprise under section 23 or vested in a State enterprise by a notice in the Gazette under section 24 or by an Order in Council made under section 28, the Registrar-General of Land shall, without fee, note on the record of title the words “Subject to section 27B of the State- Owned Enterprises Act 1986 (which provides for the resumption of land on the recommendation of the Waitangi Tribunal and which does not provide for third parties, such as the owner of the land, to be heard in relation to the making of any such recommendation)”.

(2)Subsection (1) shall not apply in relation to any piece of land or interest in land that is excluded from section 27B by subsection (2) or subsection (3) of that section.

27B Resumption of land on recommendation of Waitangi Tribunal

(1)Where the Waitangi Tribunal has, under section 8A(2)(a) of the Treaty of Waitangi Act 1975, recommended the return to Maori ownership of any land or interest in land transferred to a State enterprise under section 23 of this Act or vested in a State enterprise by a notice in the Gazette under section 24 of this Act or by an Order in Council made under section 28 of this Act, that land or interest in land shall, if the recommendation has been confirmed with or without modifications under section 8B of that Act, be resumed by the Crown in accordance with section 27C of this Act and returned to Maori ownership.

(2)This section shall not apply in relation to any piece of land that, at the date of its transfer to a State enterprise under section 23 or the date of its vesting in a State enterprise by a notice in the Gazette under section 24 or by an Order in Council made under section 28, was subject to—

(a)a deferred payment licence issued under the Land Act 1948; or

(b)a lease under which the lessee had the right of acquiring the fee simple.

(3)This section shall not apply in relation to any piece of land or interest in land in respect of which a certificate issued under section 8E(1) of the Treaty of Waitangi Act 1975 has been registered.

[63] What is important to note is that a s 27A memorial is not in itself an interest in land, nor does it create an interest or estate in land. The purpose of the memorial is to give notice of the Waitangi Tribunal’s pre-existing statutory jurisdiction, under s 8A of the Treaty of Waitangi Act, of resumption of SOE land and interests. This is clear from the wording of the provisions.

The Land Act

[64] The easements under the 2010 Deeds were registered under s 60 of the Land Act. This relevantly provides:

60 Creation of easements

(1)The Commissioner may from time to time grant or reserve any right of way, or other easements over or under any Crown land:

provided that where that Crown land is held under lease or licence the lessee or licensee shall be entitled to compensation for any reduction in the value of his lease or licence by reason of the grant of any such easement.

…

(3)Any grant or reservation of a right of way, or other easement under this section may be subject to such conditions, restrictions, and covenants as the Commissioner determines.

(4)Every instrument granting, pursuant to this section, an easement over any Crown land not held under lease or licence may be registered with the Registrar-General of Land in the same manner, with the necessary modifications, as any lease or licence of Crown land under this Act. Any such instrument granting an easement over Crown land held on lease or licence may be registered with the Registrar-General of Land in the same way as any dealing with that lease or licence.

Submissions

PCT

[65] Mr Smith submits that the easements relevant in this case qualify as “interests in land” for the purposes of ss 23 and 27A of the SOE Act, applying the reasoning of Cooke P in Tainui Māori Trust Board v Attorney-General.28 Mr Smith draws particular attention to the proposition that if the Waitangi Tribunal’s powers to order resumption did not apply to easements, the scope of the phrase “land or interest in land” described in s 27A is unduly limited, so too is are safeguards for Māori intended to be established under the SOE Act.

[66] Next, Mr Smith says that the easements were acquired by Mercury via a “transfer” under s 23 of the SOE Act. As is elaborated on further below, Mercury deny this position primarily by focusing on the 1993 Deed as distinct from the Sale Deed.

28 Tainui Māori Trust Board v Attorney-General [1989] 2 NZLR 513 (CA) [Tainui].

PCT’s position is that the 1993 Deed (and the 2010 Deeds drafted on the basis of it) form a part of the overall bargain recorded in the Sale Deed. Counsel for PCT submit that it is incorrect for Mercury to say that ECNZ contracted for fee simple title to lake and riverbeds under the Sale Deed, rather, ECNZ accepted that it would only need operating easements to carry on its business.29
[67] PCT submit that the definition of “Assets” in the Sale Deed shows that fee simple titles would not be transferred to ECNZ and reject the idea that the text of the 1993 Deed had the effect of taking the easements out of the scope of the Sale Deed and the SOE Act. Mr Smith also challenges the argument that cl 9 of the 1993 Deed grants the easements independent of the Sale Deed. Mr Smith submits this argument divorces the 1993 Deed from the reality of the overall transaction, and that cl 9 is simply intended to outline that the 1993 Deed does not supersede any prior terms made in the Sale Deed.

[68] In support of the proposition that the 1993 Deed formed part of the overall bargain, PCT note that no separate consideration was given for the operating easements, rather, the consideration appears to have come from the original purchase price.

[69] Building on these points, PCT argue that there would have been no reason for the 1993 Deed or the 2010 Deeds to have made reference to the SOE Act in order to fall under its scope. Mr Smith says that the use of the Land Act in the Deeds shows a mechanical and procedural decision giving effect to the decision that the task of preparing individual easements would be carried out under the supervision of the Commissioner of Crown Land. Similarly, PCT submit that the easements formed part of the “Core Land Assets” transferred pursuant to the Sale Deed, meaning that no resumption indemnity needed to be bargained for explicitly in the 1993 Deed or 2010 Deeds.

[70] PCT note that a memorial can only be registered on a title to land where an interest is transferred by a shareholding minister to an SOE under s 23. Mr Smith pointed to Mercury’s argument that this tabling process did not occur for the 1993

29 The exception to this is any part of a lake or riverbed on which electricity installations were placed whereby ECNZ sought to have title for such land.

Deed or 2010 Deeds, and thus the SOE Act does not apply. Mr Smith, however, argued that, even if this is correct, this is not compelling.

[71] In relation to the tabling process, PCT’s position is that it is not the case that non-compliance with the tabling process removes the obligation to record memorials under s 27A, rather, the tabling requirement is simply one intended to promote transparency between the branches of government. It is argued that this is also in line with the SOE regime in relation to Māori interests, which is intended to protect existing and likely claims.

[72] Finally, PCT submits that where a transfer to a state enterprise can be made under the SOE regime, it ought to be made under that regime. Thereby conferring on Māori claimants the benefits of the memorial system.

The Attorney-General

[73] Mr Ward for the Attorney-General accepts that the easements were interests in land transferred under s 23 of the SOE Act and accordingly, that the requirement in s 27A of the SOE Act for those interests to be memorialised applied to the easements when they were registered in 2011. Mr Ward therefore accepts that there are grounds for the Court to make declarations that the easements should be memorialised.

[74] Mr Ward submits that the separate operating easements show an intention to provide ECNZ with easements rather than ownership interests while maintaining the Sale Deed’s requirements for ECNZ to obtain the assets reasonably needed to carry on its business. Mr Ward says that the eventual creation of the easements was part of a course of dealing relating to the transfer of the Crown’s assets to ECNZ, which ultimately stemmed from the Sale Deed.

[75] Mr Ward submits that it is immaterial that the 1993 Deed did not refer to the SOE Act or the need for memorials to be placed on the titles of the easements that would eventually be created, given that the 1993 Deed was simply intended to clarify the assets to be transferred under the Sale Deed.

[76] Similarly, Mr Ward says that the granting of specific easements pursuant to the 2010 Deeds did not alter their character as an s 23 transfer. He argues that the 2010 Deeds reflected the 1993 Deed and the Sale Deed, providing for the granting of site-specific easements to replace the general operating easement in the 1993 Deed.30

[77] The granting of the easements using the Land Act is submitted to be a mechanical decision regarding how the grant of the easements was to be made and does not affect the application of s 23 to the transfer. This argument is advanced relying on s 29(3) of the SOE Act, which notes that s 23 shall have effect on asset transfers “notwithstanding any restriction, prohibition or other provision contained in any Act… that would otherwise apply”.

[78] Mr Ward submits that the 1993 Deed was not a variation of the Sale Deed and, in any case, variations of contracts generally do not have the effect of generating a completely new or self-subsisting agreement in the manner submitted by Mercury. The inclusion of the non-merger clause is also said to have the purpose of clarifying that the 1993 Deed does not constitute the entire agreement. Similarly, the indemnity contained in the Sale Deed concerning resumption is said to have continued to apply to the general operating easements granted.

[79] Mr Ward says that communications between Crown officials show an intention for the easements to form part of the Sale Deed obligations.31 He notes that MRP was copied into these communications, and there is no indication that they disagreed with the Crown’s position.

[80] Mr Ward also submits that the SOE Act is to be interpreted purposively, stressing the protective purpose of s 9 and the need to avoid overly technical arguments about the statutory scheme.32 Mr Ward says that an easement over land subject to Māori Treaty claims is the precise type of transfer s 23, and the broader

30 Relying on the Letter from the Treasury to the Department of Conservation dated 8 April 1993 included in exhibit JBP-10 to the Affidavit of J B Parker; and a Letter dated 20 February 2002 from the Treasury to LINZ included in exhibit 4 to the Second Affidavit of C G R Ahipene.
31 Mr Ward relies on the Letter from the Treasury to the Commissioner of Crown Lands dated 6 December 2000 at [1.3] included in exhibit JCP-4 to the affidavit of J B Parker; and the Letter from the Treasury to LINZ dated 22 October 2010 at BS-1511 of the exhibits to the Affidavit of B Stirling.
32 Lands Case, above n 22, at 655 per Cooke P; and Tainui, above n 28, at 518 per Cooke P.

resumption mechanism, was intended to cover. Parliament must have intended that the protective mechanisms in the SOE Act and Treaty of Waitangi Act would extend to subsequent documents or deeds recording parties’ agreements regarding the transfer of assets to an SOE.

The Registrar-General

[81] Mrs Watson for the Registrar-General submits that should the Court make declarations to the effect that the easements ought to be memorialised on the records of title, the Registrar-General will abide by the Court’s decision and do so accordingly. No further submissions were made on the declaratory aspect of PCT’s claim.

Mercury

[82] Mr Hodder KC began his submissions for Mercury on the basis that the central documents to this claim are the 2010 Deeds and that it is these deeds that must be shown to be a transfer under s 23 of the SOE Act. Mr Hodder notes the substantial time difference between the 2010 Deeds and the 1993 Deed in arguing that the 2010 Deeds are a unique grant made further to, not pursuant to, the 1993 Deed.

[83] Arguing that the 2010 Deeds were out of the scope of the SOE Act, Mr Hodder notes that the grantor in the Deed is the Commissioner of Lands, and not a Minister for a State Enterprise as required by s 23. Second, Mr Hodder pointed to the fact that the only empowering provision listed for the grants is s 60 of the Land Act, not the SOE Act. To further support this point, it was argued that a failure to comply with the tabling processes, discussed above, indicates that the 2010 Deeds did not constitute an SOE Act transfer.

[84] Similarly, Mr Hodder submitted that the easements were not granted pursuant to the Sale Deed, and that the easements are not “Core Land Assets” under that deed. This is said to be because the easements are scheduled as “non-core” assets in the 1994 and 1995 Land Schedules to the Sale Deed.33 Mr Hodder also pointed to the “non-

33 Mr Hodder relied on; Land Schedule Part VIII, 12 July 1994 included in the Affidavit of P J Gibson, PJG-2 at 0221, 0226 and 0235; and Land Schedule Part IX, 29 September 1994, included in the Affidavit of P J Gibson, PJG-2 at 0249 and 0253.

merger” clause (cl 9) in the 1993 Deed and the absence of any indemnity provision to further indicate that the grant of the easements was independent of the Sale Deed.

[85] Mr Hodder submitted that if ECNZ did view the Sale Deed as a bargain for operating easements over the lakebed land, then there would have been no reason why a separate deed was entered into; the easements would have simply been listed as “Core Land Assets” under the Sale Deed without the need for further determination. Mr Hodder also argued that the recitals to the 1993 Deed show that the easement agreement was not contemplated by the Sale Deed and that the text of the deeds should be afforded primacy in this issue.

[86] Mr Hodder disagreed that the absence of consideration for the easements show that they were part of a larger overall bargain. Mr Hodder submits that there would have been no reason for further consideration as the easements are less valuable than what ECNZ originally contracted for. Finally, Mr Hodder argues that the underlying title to the land remains with the Crown. Therefore, it would still be available for a transfer as part of a Treaty settlement, albeit encumbered by an easement.

Were the easements transferred under s 23 of the SOE Act?

[87] What Mr Hodder attempted to argue is that the “transfer” was effected by the 2010 Deeds alone, and these 2010 Deeds are separate from the Sale Deed which executed a transfer pursuant to the SOE Act. Mr Hodder said this interpretation is supported by the following:

(a)the easements not being “Core Land Assets” under the Sale Deed;

(b)the absence of consideration for the easements;

(c)the 2010 deeds; and

(d)the non-compliance with the processes under the SOE Act when granting the easements in 2010.

[88] I do not accept this interpretation. Nor do I agree that the factors listed in support actually support the interpretation being advocated by Mr Hodder. I agree with PCT and the Attorney-General that the 2010 Deeds constituted a part of the whole bargain that was entered into in the Sale Deed. I further agree with PCT that, if the easements were not covered under the SOE Act, it would breach the Crown’s Treaty obligations. This supports the overall conclusion that the easements were transferred under s 23 of the SOE and thus should have been subject to memorials when transferred.

The easements are core land assets

[89] As noted in the factual background, ECNZ agreed to purchase all interests of the Crown in “assets” under the Sale Deed. The definition of “assets” specifically included “Core Land Assets”. The Core Land Assets to be transferred were not defined in detail at the time of entering the Sales Deed. Instead, a process stipulated by cls 5.2–5.4 was to be followed in which the Crown and ECNZ would agree to schedules that were to be attached to the Sale Deed identifying the specific Core Land Assets. These schedules arose out of the 1989 Memorandum, the 1993 Deed, and the 1994 and 1995 Land Schedules.

[90] Mr Hodder argues the Maraetai and Whakamaru easements are identified in the 1994 and 1995 Land Schedules as “non-core” assets, thus falling outside of the contemplation of the Sales Deed. This, Mr Hodder says, supports an interpretation that the parties contemplated a separate agreement being entered into in respect of the easements.

[91] Mr Hodder’s argument was that this interpretation is also supported by the 1993 Deed which, he says, varied the bargain between the Crown and ECNZ in respect of the lake and riverbeds, providing that “notwithstanding the requirements” of the Sale Deed, these parcels would not transfer to ECNZ but stay vested in the Crown. He also argues that the wording of the 1993 Deed makes clear that the effect was to take the easements outside of the scope of the Sale Deed because:

(a)it specified that the obligations and warranties of the ECNZ Sale did “not merge” with the 1993 Deed;

(b)the 1993 Deed did not refer to the SOE Act nor memorials pursuant to it; and

(c)the 1993 Deed included an indemnity from the Crown in favour of ECNZ but did not include the indemnity found in the Sale Deed in favour of ECNZ concerning resumption pursuant to the SOE Act.

[92] The first aspect of Mr Hodder’s argument for Mercury, namely that the 1994 and 1995 Land Schedules made the easements fall outside of the definition of core land assets in the Sale Deed, is not sustainable. As submitted by both counsel for the Attorney-General and PCT, easements in gross in favour of ECNZ for Whakamaru and Maraetai are listed under core interests in the 1994 and 1995 Land Schedules. As defined in the explanatory provision 2(c) for each schedule, “core interests” referred to the land that is part of the “Core Land Assets” under cl 1(c) of the Sale Deed. Further, the Sale Deed, under the definition of “Core Land Assets”, recognised that interests lesser than freehold interests, such as easements, fell under “Core Land Assets”. I therefore find that the correct interpretation is that the easements are core land assets.

[93] Mr Hodder also raises an issue as to contract interpretation in relation to the meaning of the 1993 Deed. The Supreme Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd summarised the approach to contractual interpretation in New Zealand:34
[60] … the proper approach is an objective one, the aim being to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. This objective meaning is taken to be that which the parties intended. While there is no conceptual limit on what can be regarded as “background”, it has to be background that a reasonable person would regard as relevant. Accordingly, the context provided by the contract as a whole and any relevant background informs meaning.

[61] The requirement that the reasonable person have all the background knowledge known or reasonably available to the parties is a reflection of the fact that contractual language, like all language, must be interpreted within its overall context, broadly viewed. Contextual interpretation of contracts has a

34 [2014] NZSC 147, [2015] 1 NZLR 432 (footnotes omitted). This approach was cited by the Supreme Court, reaffirming this approach, in Bathurst Resources, above n 11, at [43].

significant history in New Zealand, although for many years it was restricted to situations of ambiguity. More recently, however, it has been confirmed that a purposive or contextual interpretation is not dependent on there being an ambiguity in the contractual language.

…

[63] While context is a necessary element of the interpretive process and the focus is on interpreting the document rather than particular words, the text remains centrally important. If the language at issue, construed in the context of the contract as a whole, has an ordinary and natural meaning, that will be a powerful, albeit not conclusive, indicator of what the parties meant. But the wider context may point to some interpretation other than the most obvious one and may also assist in determining the meaning intended in cases of ambiguity or uncertainty.

[94] Therefore, it is necessary to ascertain what ECNZ and the Crown intended through the 1993 Deed, having regard to the wording of the 1993 Deed and the surrounding context in order to resolve the argument that the 1993 Deed took the easements outside of the Sale Deed. Mr Ward submits that, in order to establish this, it must be shown that the 1993 Deed had the effect of discharging the rights and obligations, in respect of the easements, previously arising under the Sale Deed through a “bilateral discharge”. This can be express or can be “implied where the parties have effected such an alternation of its terms as to substitute a new contract in its place”.35 It is difficult to evaluate this because of the need to distinguish a recission of the original contract from a variation which merely qualifies existing rights and obligations. If recission is effected the contract is extinguished, but if there has only been a variation the contract will continue to exist in an altered form.36

[95] I do not believe it is material to consider the mechanism by which the easements were taken outside of the Sale Deed, whether by variation or recission. All that needs to be established is whether the effect of the 1993 Deed was to take the easements outside of the scope of the Sale Deed. I have concluded that the effect of the 1993 Deed was not to take the easements out of the scope of the Sale Deed. This conclusion is supported by the wording of the agreement and the background context. I now set out the reasons for my conclusion.

35 JP Morgan Chase Bank CA v Lewis [2015] NZCA 255, [2015] 3 NZLR 618 at [60] citing H G Beale (ed) Chitty on Contracts (31st ed, Sweet & Maxwell, London, 2012) vol 1 at [22–028].
36 Beale, above n 35, at [22–028].

[96] First, the wording of “notwithstanding the requirements of the [Sale Deed]” referred to in support of Mercury’s interpretation, is not in itself conclusive that the effect of the 1993 Deed took the easements outside of the scope of the Sale Deed. This is because the whole clause creates some ambiguity. Recital 2 of the 1993 Deed stipulates:

Notwithstanding the requirements of the [Sale Deed] the Grantor has required the beds of lakes and rivers used for the purposes of electricity generation shall not be transferred to [ECNZ] and [ECNZ] has accepted this requirement on the understanding it will be granted in respect of all such land the rights and powers necessary and desirable to enable it to carry out its business in accordance with the [Sale Deed].

[Emphasis added]

The later reference to the Sale Deed in the recital means the recital alone is not conclusive of the intention to take the easements outside of the Sale Deed.

[97] Second, the non-merger clause supports the interpretation that the 1993 Deed is a part of the whole bargain and was not meant to create separate rights and obligations in respect of the easements. Where an agreement requires the execution of a deed, as in an agreement for sale of land, it has been said that the agreement is superseded by the deed, or “merged” into the deed.37 It means that the later deed is the “real and completed contract”.38 However, the merger doctrine has been applied less strictly in overseas jurisdictions, with the Supreme Court of Canada stating that there should be no general rule of the doctrine of merger applying to a deed conveying land, instead its application depending on the parties’ intentions.39 What is clear in this case is that the parties did not intend the 1993 Deed and the Sale Deed to merge – one agreement was not intended to supersede the other and the 1993 Deed was not intended to be the “real and completed contract”. Thus, the rights and obligations under the Sale Deed were, on my reading of this clause, still intended to apply to the easements.40

37     S M Waddams The Law of Contracts (8th ed, Thomson Reuters, Toronto, 2022) at [330].
38     Knight Sugar Co v Alberta Railway & Irrigation Co [1938] 1 DLR 321 (PC) at 324.
39     Fraser-Reid v Droumtsekas (1979) 103 DLR (3d) 385, [1980] 1 SCR 720.
40 See also James v Robb HC Christchurch CIV-2009-406-266, 11 July 2011 at [86] where the inclusion of a non-merger clause in a written agreement for the sale and purchase of land factored into the Court’s conclusion that the parties had a prior, common intention to sell and buy additional land that had not been recorded in an agreement.

[98] This flows into the third point, which is that the 1993 Deed did not need the same indemnity that was included in the Sale Deed, as the rights and obligations under the Sale Deed, including the indemnity, were still intended to apply to the easements. This is supported by the 1998 Agreement and the 1999 Deed. The 1998 Agreement states in cl 1:

Waikato SOE as the purchaser of the Specified Assets, will be entitled to the benefit of, and to exercise, all of the rights, powers and privileges of ECNZ under the [Sale Deed] … In particular but without limitation, Waikato SOE will be entitled to the benefit of all representations, undertakings, warranties and indemnities, whether express or implied, made or given, and all rights of compensation (including those contained in clause 5.8 of the [Sale Deed]) granted, by the Crown under the [Sale Deed] to, in favour of, or for the benefit of ECNZ to the extent that they apply to the Specified Assets as if Waikato SOE was ECNZ and a party to the [Sale Deed].

[99] Clause 5.8 of the Sale Deed set out the indemnity in relation to the SOE Act. The fact this indemnity was given in respect of the easements as outlined in the 1993 Deed is supported by the 1999 Deed. Recital B of the 1999 Deed states:

By the [1998 Agreement] ECNZ agreed to assign and transfer the Specified Land to [MRP] including the rights and obligations granted by and to ECNZ under the [1993 Deed].

[Emphasis added]

[100] If the 1998 Agreement included the rights and obligations under the 1993 Deed, along with what was contained specifically in the Sale Deed, then it supports the interpretation that the parties intended the 1993 Deed and Sale Deed to be read together — not for one of them to replace the other. The indemnity clause contained in cl 5.8 of the Sale Deed was intended to apply to the 1993 Deed, making it unnecessary to include the indemnity again.

[101] This reasoning also relates to the fourth point, that the 1993 Deed did not need to mention the SOE Act nor memorials pursuant to it as it was intended to be read alongside the Sale Deed. Including clauses about the SOE Act and memorials would have been redundant in the 1993 Deed, as the Sale Deed was still intended to apply to the easements.

[102] Fifth, the easements granted under the 1993 Deed clearly meet the standard of “Core Land Assets” as defined in the Sales Deed. “Core Land Assets” under the Sales Deed were envisaged to include both fee simple title and lesser interests in land, such as easements. The definition of core land assets included assets that were “reasonably required … to operate [ECNZ’s] business”. The 1993 Deed set out in recitals 3, 5, and 6 that the easements, rather than fee simple land transfers, maintained the Sale Deed’s requirement for ECNZ to obtain assets reasonably needed to operate the business:

3 In order for [ECNZ] to carry out its business as contemplated by the [Sale Deed] the Grantor has agreed to grant to [ECNZ] easements over and in respect of certain land of the Grantor which was retained or acquired by the Grantor prior to 1 April 1988 for the primary purpose of electricity generation whether or not it had been so gazetted …

…

5 [ECNZ] acknowledges that the entering into [of the 1993 Deed] by the Grantor and the granting of such easements on an individual basis will meet its requirements and will enable it to carry out its business as contemplated by the [Sale Deed].

6 The parties recorded their agreement that ownership of the lands referred to in Paragraph 3 is not essential to enable [ECNZ] to meet its commercial objectives.

[Emphasis added]

[103] Finally, the conduct of the parties before the 1993 Deed was entered into shows that the necessity for the creation of easements in respect of the lakebeds was a possibility in the transfer of the core assets. In May 1987, ECNZ wrote to the Crown and accepted “the national interest involved in the beds of the lakes generally” may result in fee simple title “not being transferred to [ECNZ]”. That letter continued to say that in any event, it would seek an operational easement and maintained that it should hold freehold title to any bed which had a structure, which the Crown subsequently agreed to. After the Sale Deed was entered into, the Crown and ECNZ discussed easements over the hydro lakes which is apparent from the 1989 Memorandum. Then, in March 1990, ECNZ wrote to the Minister for SOEs and recorded its understanding that an “operational easement” was agreed to in principle by officials and accepted at the ministerial level.

[104] When viewing communications between Crown officials, the Crown viewed the easements as forming part of the Sale Deed obligations. MRP was copied into that correspondence, and there is no evidence to suggest that MRP disagreed with this approach. The evidence of no disagreement, combined with ECNZ knowing before the Sales Deed that the beds of the lakes may not be transferred by way of fee simple title, shows that it was the intention of the parties that the easements make up the “Core Land Assets”. The text of the 1993 Deed, the 1998 Agreement, the 1999 Deed, and these communications show that this is the only reasonable interpretation. Moreover, without the operating easements, ECNZ would not have been able to conduct its electricity generation business at all, meaning the easements must form an integral part of the overall transaction when viewed in context.

Absence of consideration for the easements

[105] Mr Hodder also submitted that a lack of consideration for the easements supports the interpretation of the 1993 Deed and the 2010 Deeds being separate to the Sale Deed. This was because the easements were less valuable than the rights that ECNZ originally contracted for, therefore the commercial reality of the bargain was to not provide separate consideration.

[106] I do not accept this submission and agree with the argument advanced on behalf of PCT, that the absence of consideration shows that the 1993 Deed was a part of the overall bargain. This interpretation is supported by the recognition by ECNZ that easements may be a possibility, as opposed to fee simple title, before entering the Sale Deed.

The 2010 Deeds

[107] Mr Hodder submitted that the central documents in this case are the 2010 Deeds. He argued that the background cannot obscure this point and contended for the 2010 Deed to be interpreted in isolation from the background context. He noted that the 2010 Deeds were intended to operate for a long period of time which is causative of the Deeds needing to speak for themselves.41 In written submissions he

41 Firm PI 1 Ltd, above n 34, at [60]–[63] and [91]–[93]; and Bathurst Resources, above n 11, at [46]–[47].

argued that it would be extraordinary if propositions true of the interpretation of the 1993 Deed are also true to the interpretation of the 2010 Deeds because of the substantial time that passed between the 1993 Deed and the 2010 Deeds and due to the 2010 Deeds being a unique grant. In oral argument, however, he accepted there may be some historical connection between the 2010 Deeds and the 1993 Deed.

[108] In interpreting the 2010 Deeds, Mr Hodder submitted that there are two specific elements that show the easements were granted outside of the SOE Act, and therefore were not transferred under s 23:

(a)the grantor of the easements in the 2010 Deeds is the Commissioner of Crown Lands, yet s 23 of the SOE Act requires a transfer from a shareholding Minister for a State Enterprise; and

(b)the only empowering statute listed for the grant is s 60 of the Land Act
— not the SOE Act. There is no reference to an underlying authorisation by the shareholding Minister, or to the easement grant also being an SOE transfer.

[109] Finally, he submitted that the 2010 Deeds were not entered into, and the easements were not granted, pursuant to the Sale Deed. He argued that this is clear from the recitals in the 2010 Deeds, which note both the Sale Deed and the 1993 Deed but do not state that the easements are being granted pursuant to these deeds. Instead, the recitals state that as a consequence of purchase, Mercury is “desirous of an easement”.

[110] I do not accept these claims. Separating the 2010 Deeds from the context of the overall bargain that was entered into in 1988 is artificial. An interpretation of the 2010 Deeds which includes them within the overall bargain that was entered into in 1988, and thus makes them transfers under the SOE Act, is supported by the wording of the 2010 Deeds, the surrounding context, and the SOE regime.

[111] The execution of the 2010 Deeds was the next step in the overall bargain, reflecting the 1993 Deed, which I have already concluded was part of the overall

bargain. The 1993 Deed provided that site specific easements needed to be granted for certain land at a later date, as the purpose of the 1993 Deed was to only grant general easements. Recital 3 of the 1993 Deed stated:

In order for [ECNZ] to carry out its business as contemplated by the Deed of Sale and Purchase the Grantor has agreed to grant the Corporation easements over and in respect of certain land … for the primary purpose of electricity generation whether or not it had been so gazetted. The Grantor has also agreed that it will cause instruments to be executed for the granting of such easements on an individual basis over the subject land as defined in clause 1.1(d) hereof pursuant to section 60 of the Land Act 1948.

[112] This recital demonstrates that the parties intended for a later instrument executing the specific easements under s 60 of the Land Act would be created. The recital envisaged an instrument that is strikingly similar to the 2010 Deeds. Clause 1.1(d) defined the “subject land” as the land described in the 1989 Memorandum which was agreed to the parties pursuant to the Sale Deed — further demonstrating the connection between the 1993 Deed and the Sale Deed.

[113] Clause 12 of the 1993 Deed also shows that there is a connection between the 2010 Deeds and the overall bargain. It provided:

… In particular [ECNZ] will when called upon to do so by the Grantor or the Commissioner of Crown Lands execute in the capacity of the Grantee thereunder such instruments as are necessary for the grant of easements in gross to similar effect as the easement in [the 1993 Deed] in due form for the purposes of section 60 of the Land Act 1948 (or such other statutory authority as may be appropriate at the time) over particular areas of the subject land individually defined …

[114] Once again, the 1993 Deed contemplated the 2010 Deeds, showing the connection between these instruments. I agree with both PCT and the Attorney-General that the recitals of the 2010 Deeds support an interpretation that the Deeds are connected to the 1993 Deed and the Sale Deed. The relevant recitals provided the following as relevant background to the 2010 Deeds:

BBy Deed dated 31 March 1988 [the Sale Deed] the Crown acting through and by the Ministers of Finance and State Owned Enterprises sold to ECNZ certain assets and the business represented by such assets used for the generation and supply of electricity.

…

DThe Minsters of Finance and State Owned Enterprises and [ECNZ] by [the 1993 Deed] agreed, inter alia, that the ownership of beds of lakes and rivers would not be transferred to ECNZ but that to enable ECNZ to carry out the electricity generation business to be operated certain operating easements would be granted.

E… ECNZ and [MRP] entered into an agreement for sale and purchase, inter alia, of some of the Specified Assets … on 22 December 1998.

FPursuant to [the 1998 Deed] entered into between the Crown, ECNZ, and [MRP] dated 22 December 1998, the Crown and ECNZ agreed that [MRP] is entitled under the [Sale Deed] to the benefit of, and to exercise, all of the rights, powers, and privileges of ECNZ under the [Sale Deed] …

GAs a consequence of its purchase, [MRP] is desirous of an easement
…

[115] Mentioning the Sale Deed, the 1993 Deed, and the 1998 Agreement as part of the relevant background shows the clear link between the 2010 Deeds and the Sale Deed. Background correspondence within the Crown, that MRP was copied into, show that easements were always intended to be a part of the bargain entered into in 1988.42 Further, correspondence between Crown officials show that there was an understanding that the easements contained in the 2010 Deeds were amongst the assets transferred under the Sale Deed. For example, a letter sent from the Treasury to LINZ on 22 October 2010 stated:

Included in the [Sale Deed] was the Crown requirement to grant [ECNZ] a section 60 Land Act operating easement, in gross, over the bed of Lake Maraetai. The easement grants rights to store water as well as for other operation requirements that secure the generation of electricity throughout the Maraetai power station.

[116] Another letter from the Treasury to LINZ on 22 October 2010, which concerned Lake Whakamaru, stated:

Included in the [Sale Deed] was the Crown requirement to grant [ECNZ] a section 60 Land Act operating easement, in gross, over the bed of Lake Whakamaru. The easement grants rights to store water as well as for other operation requirements that secure the generation of electricity throughout the Whakamaru power station.

[117] Due to this connection between the 2010 Deeds, the 1993 Deed, and the Sale Deed, I do not believe it is material that the easements were granted by the

42 Discussed at [104] above.

Commissioner of Crown Lands nor that the empowering provision was s 60 of the Land Act. Section 60 of the Land Act requires that the Commissioner of Crown Lands grant the easements, which is why the Commissioner is listed as the grantor as opposed to the appropriate Minister. Further, as evidenced by the above communications, and the 1993 Deed, the granting of individual easements under s 60 of the Land Act was a way of formalising the transfer that had already occurred under the Sale Deed and, therefore, under the SOE Act. I accept the submissions of PCT and the Attorney-General that it was a “mechanical” decision. Section 29(3) of the SOE Act is also relevant to this point, as it states that s 23 “shall have effect” and assets may be transferred pursuant to the SOE Act “notwithstanding any restriction, prohibition, or other provision contained in any Act … that would otherwise apply”. Therefore, the fact the formal easements were granted under s 60 of the Land Act did not affect the application of s 23 of the SOE Act to the easements.

[118] Overall, the material identified above shows it would be artificial to try and interpret the 2010 Deeds in isolation from the rest of the context. It was clearly intended by the parties that the 2010 Deeds were to be a part of the overall bargain, as they were a way to formalise the transfer that began in 1988. The easements were transferred under s 23 of the SOE Act.

Non-compliance with the SOE Act

[119] In the course of arguing for an interpretation of the 2010 Deeds as being isolated from the rest of the bargain, and thus not transfers under s 23 of the SOE Act, Mr Hodder pointed to non-compliance with the SOE Act on behalf of the Crown. He submits that the 2010 Deeds were not put before the House of Representatives, which is a requirement under s 23(2) of the SOE Act when transferring assets. He argued that this non-compliance, coupled with the absence of explicit reference to the SOE Act, supports the interpretation advocated for on behalf of Mercury.

[120] Mr Smith submitted that it did not need to be tabled as the assets under the Sale Deed, which included all easements necessary for the operation of ECNZ’s business, had already been tabled. I agree with PCT on this point because the 2010 Deeds, the 1993 Deed, and Sale Deed were all part of the same bargain. I further note that not

tabling the easements granted under the 2010 Deeds reinforced the intention of the Crown, evidenced by the letters discussed above, that the 2010 Easements were simply a way to formalise what had already been agreed to be transferred in 1988 under the Sale Deed.

The bigger picture

[121] Stepping outside of the narrow issue of contract interpretation, I also agree with the submissions advanced by Mr Smith that if the easements were not transferred under the SOE Act, it would breach the Crown’s Treaty obligations. If the arguments advanced by Mr Hodder were accepted, and the easements were seen as being outside of the SOE Act, then it would mean the Crown has available to it a technical loophole to allow it to avoid its obligations under the SOE Act. This loophole would frustrate the “broad, unquibbling and practical interpretation” the SOE Act demands.43 The legal framework, as already outlined above, and appellate case law support the interpretation that has been advocated by PCT and the Attorney-General.

[122] It is important to note that Treaty clauses within statutes should not be narrowly construed. As the Supreme Court confirmed in Trans-Tasman Resources Ltd v Taranaki-Whanganui Conservation Board, Treaty clauses within statutes, even when these clauses contain “more finely turned subtle wording”, must be given a broad and generous construction.44 This is due to the constitutional significance of the Treaty in the modern New Zealand state. On these facts, and under the SOE Act, the Treaty clause contained in s 9 is the opposite of being subtly worded. Instead, it puts a strong obligation on the Crown stating that nothing in the Act shall permit the Crown to act inconsistently with the principles of the Treaty.

[123] The Lands Case, which memorial protections under s 27A stem from, made clear how s 9 of the SOE Act was to be interpreted and applied. The Court of Appeal held that s 9 was a provision expressing a “broad constitutional principle” and s 27 of

43 Lands Case, above n 22, at 655 per Cooke P. See also Tainui, above n 28, at 518 per Cooke P: “I have no doubt that the subject-matter of the statutes, concerned as they are with the Treaty, demands a broad, unquibbling and practical interpretation”.
44 [2021] NZSC 127 at [151]: the Supreme Court went even further than express obligations in statutes, stating that “the courts will not easily read statutory language as excluding consideration of Treaty principles if a statute is silent on the question”.

the Act merely gave the principle practical effect. On interpretation of s 9, Cooke P said:

… what is now our responsibility is to say clearly that the Act of Parliament restricts the Crown to acting under it in accordance with the principles of the Treaty. It becomes the duty of the Court to check, when called upon to do so in any case that arises, whether that restriction has been observed and, if not, to grant a remedy. Any other answer to the question of interpretation would go close to treating the declaration made by Parliament about the Treaty as a dead letter …

[124] Richardson J said that s 9 had to be given full effect as it is the “governing principle of the legislation”, further noting:

… rather than viewing s 9 as a provision outwardly raising expectations then dashing them by a process of inference from other provisions, its true function in the Act should be recognised as constituting a general proscription of any conduct in breach of the principles of the Treaty and as such being a governing consideration in the exercise of the powers under s 23, with s 27 then being seen as specific machinery for dealing in due time with such land held by State-owned enterprises.

[125] Similar observations were made by the other members of the Court. Somers J described s 9 as the “paramount provision”, Casey J referred to s 9 having an “overriding result on the rest of the Act”, and Bisson J stated that s 9 introduced a “safeguard” that would not frustrate the applications of Māori claimants to the Waitangi Tribunal.45 This approach has been consistently applied by the Courts when interpreting s 9 of the SOE Act ever since, with the Supreme Court in New Zealand Māori Council v Attorney-General (Mighty River Power) observing that if the Crown thought the Court of Appeal in Lands approached s 9 wrongly, it would have appealed to the Privy Council or appealed the effect of Lands in Mighty River Power.46 What is clear is that the Crown must act consistently with the purposes of the protective mechanisms in the SOE Act and subsequently the Treaty of Waitangi Act.

[126] Due to this, it would be entirely inconsistent with the purpose of the protective mechanisms in the SOE Act, and the Treaty of Waitangi Act, to treat the 1993 Deed and 2010 Deeds as outside of the scope of the SOE Act. Perpetual operating easements that exist over land that can be returned through the Waitangi Tribunal’s resumption

45 At 696, 701 and 707 respectively.
46 [2013] NZSC 6 at [58].

powers — given that the lakebeds are still under Crown ownership — are the very type of interests that s 23 intended to cover. Mr Hodder submitted there is not the same impetus for the easements to be transferred under the SOE Act due to the lakebeds still being subject to the Tribunal’s resumption powers, albeit encumbered by the easement. The case law does not support Mr Hodder on this point. Specifically, the Tainui decision does not support this argument.47

[127] Mr Hodder seeks to distinguish Tainui to these present facts as Coalcorp had acquired the coal mining licences through an agreement expressly under s 23 of the SOE Act, and through the provisions in the Fifth Schedule to the SOE Act. The key issue in this case, as advanced by Mr Hodder, was whether a coal mining licence was an “interest in land”. This is an unduly narrow interpretation of what Tainui involved. In that case, the Crown was arguing that coal mining licences were not covered by the protective mechanism contained in s 27A. There was a clear issue of whether the mining licences were “transferred” under s 23 of the Act. The Crown and Coalcorp both argued that the coal mining rights were acquired by Coalcorp, rather than being “transferred” from the Crown, because they were statutory licences created by the Coal Mines Act 1979. Therefore, despite the argument advanced by the Crown being different to that advanced by Mercury in this case, Tainui contains useful discussion of how transfers under s 23, and the protections under s 27A, should be interpreted and applied.

[128] The Court of Appeal in Tainui confirmed that s 27A should be interpreted purposively so as the give effect to the statutory scheme’s safeguard for Māori claims.48 Applying this approach, the Court held that the coal mining rights were “interests in land” under s 27A.49 The Court also took a purposive approach to s 23 and agreed, although for slightly different reasons, that the coal mining rights were transferred under the SOE Act. Cooke P, in rejecting the argument that because the Crown never had such licences they could not have “transferred” the licences to Coalcorp, said:50

47     Tainui, above n 28.
48     At 524 per Cooke P and 535 per Richardson J.
49     At 520 and 524 per Cooke P. See also at 543 per Bisson J, 535–536 per Richardson J and 539–540 per Casey J.
50     At 525–526.

The word “transferred” is not defined in the Treaty of Waitangi (State Enterprises) Act. Counsel for the Crown submitted that it means a carrying across. I would accept that concept. What has been done appears to me to fall within it. Before the agreement the Crown had exclusive rights to mine coal in the land covered by the agreement. After the agreement Coalcorp had exclusive rights to mine coal in those lands, though subject to numerous conditions, and as a corollary the Crown no longer retained any rights to mine coal there. The mechanism by which this was achieved involved the creation of new statutory licences in favour of Coalcorp, but the result was that the Crown's exclusive right or liberty to mine for coal ceased and passed to Coalcorp in the shape of licences and statutory and contractual terms. The statutory licences would be of nil effect without the essential features supplied by the agreement. Within both the spirit and the letter of the Treaty of Waitangi (State Enterprises) Act 1988, I think that this was a transfer.

There is another, perhaps more literal, route to that result. Section 23(1)(a) of the State-Owned Enterprises Act 1986 authorises the Crown to transfer to a State enterprise assets and liabilities of the Crown. Section 23(1)(c) authorises the granting to a State enterprise of rights of any kind in respect of assets of the Crown. "Assets" are defined in terms of the utmost width by s 29(1). By the same subsection "Transfer" includes the grant of interests in real or personal property. The agreement was the operative and essential factor in bringing the statutory licences of Coalcorp into life. I would hold that it was a grant under the State-Owned Enterprises Act of the rights conferred by those licences and therefore within the defined meaning of "transfer".

[129] Casey J based his conclusion on “the reality rather than the form” of transactions.51 Cooke P, Richardson and Bisson JJ relied on the interdependence between the 1988 Agreement and the statutory licences: with the provision creating the licences referring explicitly to the 1988 Agreement.52 From the discussions in Tainui, it appears that, on these facts, there was the same impetus for the easements to be transferred under the SOE Act as in this case. They are valuable rights and allowing the rights to be excluded from the SOE Act, based on the form they were transferred, would frustrate the clear statutory safeguards contained in the SOE Act.

[130] Overall, I am satisfied that the case law supports a purposive interpretation of the SOE Act, with the overarching provision being the Treaty obligations contained in s 9. It would be in line with the purpose of the SOE Act, and the Crown’s Treaty obligations, for 1993 Deed and the 2010 Deeds to be included within the “package deal” of the Sale Deed and for the granting of the easements to be viewed as being “transferred” under the Act.

51 At 539.
52 At 525–526 per Cooke P, 536–537 per Richardson J and 544 per Bisson J.

Conclusion

[131] The 1993 Deed and 2010 Deeds are interdependent with the Sale Deed, all being part of a continuous transfer being undertaken by the Crown and relevant SOEs. This is evidenced by the Deeds themselves and the surrounding context. It is further supported by the statutory scheme and the purposive approach taken to interpreting the SOE Act. Consequently, I conclude that when these easements were transferred under s 23 of the SOE Act they should have included memorials under s 27A of the Act.

Relief

[132] The next question I must deal with is what relief should be granted. PCT seeks the following as relief for their claim under the Declaratory Judgments Act:

(a)the declarations set out in [42] above;

(b)a declaration that the Registrar-General shall add s 27B memorials to the records of title for the easements;

(c)an order in the nature of mandamus requiring the Registrar-General to do so;

(d)any further relief that the Court considers just; and

(e)costs.

Submissions

[133] I did not receive substantive submissions on the point of relief from PCT nor the Registrar-General. The positions of Mercury and the Attorney-General are set out below.

Attorney-General

[134] Mr Ward did not consider that declarations should be granted in the terms sought by PCT. Instead, Mr Ward submitted there are grounds to declare that:

(a)the easements over the lakebeds at Maraetai and Whakamaru are interests in land that were transferred under s 23 of the SOE Act; and

(b)the requirements of s 27A of the SOE Act applied to the easements at the time that they were registered.

These declarations would have the effect of determining that the memorials ought to be recorded on the records of title. On this basis, Mr Ward submitted that a declaration that the records ought to contain an s 27A memorial, or an order in the nature of mandamus, is unnecessary. He submits that this approach is further reinforced by the Registrar-General’s position that if the Court makes declarations, he will amend the records of title.

[135] Mr Ward submits that if the Court finds that the easements were interests in land transferred under s 23 of the SOE Act, it follows that s 27A applied at the time of registration and the memorial ought to be recorded on the record of title.

Mercury

[136] PCT’s claim for a mandamus order requiring the Registrar-General to add memorials to the records of title for the easements was opposed by Mr Hodder. He submitted that s 27A does not create an open-ended power for the Registrar-General to amend titles, rather, empowers him to place a memorial on a title at the time of its transfer. Mr Hodder argued that allowing an open-ended power would defeat the “public notice” purpose of s 27A, which is to ensure that a landowner is on notice at any risk of a resumption.

[137] He further argued that due to the easements being registered under the Torrens system, Mercury holds indefeasible title to the easements. The scope of this indefeasibility is set out in s 51 of the Land Transfer Act 2017, and he argued the effect

of s 51 is that Mercury holds the title to the easements free of matters not noted on the register — including s 27A memorials. He stressed the importance of s 51, and that the courts have repeatedly found that it is critically important to uphold a system upon which registered owners are entitled to rely.53 He stated that there are alternatives available to PCT under the LTA, and PCT cannot now rely on s 27A of the SOE Act as a basis through which memorials can be added. Memorials cannot be retrospectively added to this title.

[138] Finally, in oral argument, Mr Hodder stated the rights of third parties, such as other electricity generators, would be impacted if declarations were made in this case. Their title may be at risk if it was decided the easements could receive retrospective memorials added to them.

Mandamus orders

[139] PCT seek an order in the nature of mandamus requiring the Registrar-General to add Memorials to the records of title for the easements. Such an order can be made where there has been wrongful failure to discharge a legal duty, or to compel performance where a duty has been wrongfully exercised.54 It would be the former of the two scenarios for which the order would be made here.

[140] Such a remedy may be declined where there is a remedy “equally beneficial, convenient and effective”.55 Here, the Attorney-General suggests that a mandamus order is not required to achieve the outcome sought by PCT — that is, to have memorials added to the relevant easements — and therefore should not be made. This is because, were the Court to resolve the issues in favour of PCT and find that the easements were transferred under s 23 of the SOE Act, it would follow that s 27 also applies and the memorial ought to be recorded on the record of title. The Registrar- General has advised that he will amend the records of title should the Court make declarations to this effect, rendering a mandamus order superfluous.

53 Land Transfer Act 2017, s 3; Elizabeth Toomey (ed) New Zealand Land Law (online ed, Thomson Reuters) at [48.R.2.2.01]; Frazer v Walker [1967] NZLR 1069 (PC) at 1074; and Warin v Registrar-General of Land (2008) NZCPR 73 (HC) at [49].
54 Joseph, above n 13, at [27.2.3].
55 Barton v Licensing Control Commission [1982] 1 NZLR 31 (HC) at 38–39.

[141] I agree with this submission of the Attorney-General and accept that the resolution of issues in favour of PCT means that the grant of a mandamus order is not necessary here.

Can the memorials be retrospectively added?

[142]Section 51 of the LTA provides:

51 Title by registration

(1)On registration under this Act of a person as the owner of an estate or interest in land, the person obtains a title to the estate or interest that cannot be set aside.

(2)The title of the registered owner is free from estates and interests in the land that—

(a)are not registered or noted on the register; or

(b)are not capable of being registered or noted on the register.

(3)Despite subsections (1) and (2), the title of the person registered as owner of the estate or interest is subject to—

(a)the exceptions and limitations in sections 52 to 56, subparts 1 and 3 of Part 4, and section 204; and

(b)any enactment other than this Act that overrides or limits the title.

…

[Emphasis added]

[143] Section 51(3)(b) allows for the indefeasible title to be limited by any other enactment. There is no direct case law on whether the SOE Act, or the Treaty of Waitangi Act, can indeed limit the title granted under the LTA. However, I have concluded that memorials under s 27A can be retrospectively added to the title for the easements, and thus “limit” the title to the easements. I have reached this conclusion for two interconnected reasons.

[144] First, the Supreme Court in Trans-Tasman Resources stated that “the courts will not easily read statutory language as excluding consideration of Treaty principles

if a statute is silent on the question”.56 This statement from the Court finds its roots in a plethora of case law in which Treaty principles were held to be relevant to statutory interpretation. In Barton-Prescott v Director-General of Social Welfare, which concerned the interpretation of the Guardianship Act 1968 and the Children, Young Persons, and Their Families Act 1989, a Full Bench of the High Court held that Acts concerning children and families — where the wording of the Acts do not conflict with Treaty principles — should be interpreted in line with Treaty principles.57 The Court said:58

We are of the view that since the Treaty of Waitangi was designed to have general application, that general application must colour all matters to which it has relevance, whether public or private and that for the purposes of interpretation of statutes, it will have a direct bearing whether or not there is a reference to the treaty in the statute. We also take the view that the familial organisation of one of the peoples a party to the treaty, must be seen as one of the taonga, the preservation of which is contemplated. Accordingly we take the view that all Acts dealing with the status, future and control of children, are to be interpreted as coloured by the principles of the Treaty of Waitangi. Family organisation may be said to be included among those things which the treaty was intended to preserve and protect.

[145] The approach in Barton-Prescott received endorsement in the Court of Appeal in New Zealand Māori Council v Attorney-General (Forests).59 This approach was also endorsed in Ngaronoa v Attorney-General, with the Court of Appeal noting that:60

Today it can be stated with confidence that, even where the Treaty is not specifically mentioned in the text of particular legislation, it may, subject to the terms of the legislation, be a permissible extrinsic aid to statutory interpretation.

[146]Finally, in Tukaki v Commonwealth, the Court of Appeal held:61

[35] The Treaty of Waitangi is also relevant to issues of statutory interpretation. In New Zealand it has an elevated status owing to its constitutionally-foundational significance.

[36] While some statutes expressly incorporate the principles of the Treaty of Waitangi – for example the State-Owned Enterprises Act 1986 – the

56 Trans-Tasman Resources v Taranaki-Whanganui Conservation Board, above n 44, at [151].
57 [1997] 3 NZLR 179 at 184.
58 At 184.
59 [2007] NZCA 269, [2008] 3 LRC 423 at [72]–[74].
60 [2017] NZCA 351, [2017] 3 NZLT 643 at [46] citing Takamore v Clarke [2011] NZCA 587, [2012]
1 NZLR 573 at [248]; Huakina Development Trust v Waikato Valley Authority [1987] 2 NZLR 188 (HC) at 233; and Barton-Prescott, above n 57, at 184.
61 [2018] NZCA 324, [2018] NZAR 1597 (footnotes omitted).

absence of such a reference is not a bar to using the Treaty as an interpretive aid …

[147] However, the Supreme Court in Trans-Tasman extended the principles from these previous decisions in articulating a presumption of consistency with the Treaty unless Parliament makes it quite clear that the Act intends to limit or remove the Treaty’s effect in or on an Act.62 There is nothing within the LTA which makes clear Parliament intends to limit or remove the Treaty’s effect in or on the Act. Therefore, s 51(3)(b) should be interpreted as consistent with the Treaty.

[148] For s 51(3)(b) to be interpreted consistently with the Treaty, it is logical that mechanisms protecting Māori claims to the Waitangi Tribunal should be considered as being able to limit indefeasible title. These protective mechanisms are contained in the SOE Act. This flows into the second point, that the protective mechanisms under the SOE Act should be interpreted liberally for the reasons earlier discussed. Technicalities and issues of form should not trump the constitutional principle that is outlined under s 9 of the SOE Act. Due to easements being interests in land that were transferred by the Crown pursuant to s 23 of that Act, they should have been granted with the respective memorials under s 27A. Overall, it is consistent with the SOE, and the principles of the Treaty, to allow the Registrar-General to retroactively add the memorials on the easement titles.

[149] I would finally note that I do not accept Mr Hodder’s argument that the effect this may have on third parties should prevent the memorials being retrospectively added. Consistency with the Treaty is paramount on these facts and if there are other circumstances which are materially similar to the facts of this case, there is no reason why memorials should not be added retrospectively to those titles.

[150] As a result of the conclusions I have reached in relation to the claim for declarations, I do not need to further address the judicial review claim.

Conclusion

[151]Pursuant to the Declaratory Judgments Act, I make the following declarations:

62 See Trans-Tasman Resources v Taranaki-Whanganui Conservation Board, above n 44, at [296].

(a)the easements over the lakebeds at Maraetai and Whakamaru are interests in land that were transferred under s 23 of the SOE Act; and

(b)the requirements of s 27A of the SOE Act applied to the easements at the time that they were registered.

Costs

[152] I invite the parties to agree costs. In the absence of agreement, the applicant will file a memorandum of no greater than 10 pages in length within 14 days of the date of this decision and the respondents will file memoranda in response of no greater than 10 pages in length within 14 days of receipt of the applicant’s memorandum. I will then deal with the matter on the papers.

Churchman J

Solicitors:
Annette Sykes & Co, Rotorua for Applicant
Crown Law, Wellington for First and Second Respondents Chapman Tripp, Wellington for Third Respondent

UNDER	the Judicial Review Procedure Act 2016; Part 30 of the High Court Rules; the Declaratory Judgments Act 1903; and the Common Law
IN THE MATTER OF	an application for judicial review and for declarations
BETWEEN	POUĀKANI CLAIMS TRUST Applicant
AND	THE ATTORNEY-GENERAL First Respondent THE REGISTRAR-GENERAL OF LAND Second Respondent MERCURY NZ LIMITED Third Respondent