Wanaka Stakeholders Group Incorporated v Queenstown Lakes District Council

[2020] NZHC 2472

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV 2019-425-000112

[2020] NZHC 2472

UNDER

The Judicial Review Procedure Act 2016

BETWEEN

WĀNAKA STAKEHOLDERS GROUP INCORPORATED

Applicant

AND

QUEENSTOWN LAKES DISTRICT COUNCIL

First Respondent

AND

QUEENSTOWN AIRPORT CORPORATION LIMITED

Second Respondent

Hearing:

21 September 2020

Appearances:

J G Miles QC, R J Hollyman QC, B R Latimour and N G Lawrence for the Applicant

N M H Whittington and M J Jagusch for the First Respondent C J Curran and M L Campbell for the Second Respondent

Judgment:

22 September 2020

JUDGMENT OF VAN BOHEMEN J

[on confidentiality issues]

This judgment was delivered by me on 22 September 2020 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

Richmond Chambers, Auckland Fyfe Karamaena Solicitors, Wānaka Meredith Connell, Wellington

Russell McVeagh, Wellington

WĀNAKA STAKEHOLDERS GROUP INCORPORATED v QUEENSTOWN LAKES DISTRICT COUNCIL [2020] NZHC 2472 [22 September 2020]

Introduction

[1]    By minute dated 16 September 2020, Lester AJ ordered that the file in this proceeding not be searched without an order from a judge following notice to the other parties. The minute was to preserve the positions of the parties on unresolved issues of confidentiality of documents discovered by the second respondent, Queenstown Airport Corporation Ltd (QAC) in pre-hearing disclosure.

[2]    That order is now spent as the confidentiality issues have narrowed to two documents.

Application by QAC for continued confidentiality for two documents

[3]    By memorandum dated 18 September 2020, counsel for QAC advised that QAC seeks confidentiality orders in respect of two documents it discovered on the basis of undertakings by the applicant, Wānaka Stakeholders Group Inc (WSG), regarding their use. QAC seeks orders prohibiting publication of the documents and ancillary orders to protect the discussion of the documents in Court during the hearing.

[4]The two documents are:

(a)The Strategic Alliance Agreement (SAA) dated 3 November 2016 between QAC and Auckland International Airport Limited, the company which owns and operates Auckland airport and which holds

24.9 per cent of the shares of QAC;

(b)A draft Wanaka - Concept of Operations Plan Report (COP Report) dated 18 May 2017 prepared by Arup Pty Ltd for QAC.

[5]    By memorandum dated 20 September 2020, counsel for WSG advised that WSG opposed the orders sought by QAC.

[6]    The first respondent, the Queenstown Lakes District Council (QLDC) takes no position on the issue.

Position of QAC

[7]    Mr Curran, counsel for QAC, says the SAA is a cooperation agreement between AIAL and QAC focused on information sharing and collaboration that enables QAC to utilise AIAL’s experience and market presence, and the COP Report was prepared to provide QAC with a high-level assessment of whether commercial jet operations could be feasible at Wānaka Airport.

[8]    Mr Curran says that the documents were made available on the basis of confidentiality undertakings by WSG and submits that the confidentiality of the documents should be maintained absent an application under r 8.25 of the High Court Rules 2016 for an order setting that confidentiality aside. Mr Curran says both documents are confidential because they contain commercially sensitive information. He says there is a real risk of damaging consequences for QAC if the contents of the documents were made public to QAC’s competitors, counterparties and customers.

[9]    Mr Curran refers to the Supreme Court’s decision in Erceg v Erceg where the Court referred to the fundamental principle of open justice but accepted that non- publication orders will be made where an applicant can point to adverse consequences of disclosure sufficient to justify an exception to the principle.1

[10]   Mr Curran says the SAA includes specific details of the operations and aspirations of two of New Zealand’s largest airports, both of which operate in a small and competitive market. Mr Curran says QAC’s competitive position would be undermined by the publication of QAC’s revenue and passenger number targets and could undermine QAC’s bargaining position in negotiations with major customers and counterparties to contractual arrangements. He also says there is a measure of commercial sensitivity in the mechanics of how QAC and AIAL pursue their cooperation activities which are described in the SAA.

[11]   Mr Curran points out that the SAA itself requires each party to keep confidential and make no disclosure of the specific contents of the Agreement and all information obtained from the other party and its advisers under the Agreement. The

1      Erceg v Erceg [Publication Restrictions] [2016] NZSC 135, [2017] 1 NZLR 310 at [5]-[6].

SAA permits disclosure of the general terms and intent of the Agreement to a third party but only when the consent of the other party is obtained.

[12]   Mr Curran says the COP Report relies on assumptions such as anticipated passenger and aircraft movements at Wānaka Airport and provides general estimates of the infrastructure requirements needed to support commercial aircraft operations including as to terminal area, fuel capacity and number of aircraft hangers. Mr Curran also referred to the Report’s description of issues raised by the topography of the Airport’s location and the challenges identified in the Report in addressing those issues. Mr Curran says this information is specific and confidential to QAC and its competitive position would be undermined by publication of the details included in the Report. In that regard, Mr Curran refers to recent publicity over plans by another airport company interested in bringing air services to the Queenstown Lakes District.

[13]   Mr Curran says that any commercially sensitive information in the documents would not be appropriately protected by specific orders targeted at particular material, as has been proposed by Mr Hollyman, counsel for WSG. Nor does Mr Curran accept that revenue projections in public documents such as QAC’s annual statements of intent (SOIs) are the same as the aspirational targets in the SAA. He does accept, however, that COVID-19 is a game-changer for the aviation industry.

Position of WSG

[14]   Mr Hollyman submits that the confidentiality of the documents was raised by QAC and no formal application is needed for the Court to deal with the issue.

[15]   Mr Hollyman says the nature and content of most of the SAA is already public and, to the extent it contains any confidential information, that information is outdated and has been supplanted by more recent QAC information that is publicly available.

[16]   Mr Hollyman submits, consistently with the Supreme Court’s decision in Erceg v Erceg, that the starting point is that court hearings are public and the Court must consider whether the public interest in the disclosure of the information is outweighed by the public interest in preventing the harm that would flow from disclosure.

[17]   Mr Hollyman says the SAA was prepared in November 2016 and that the specific information it includes, such as in the “Stretch Outcomes”, extend only to  30 June 2021 and are now outdated and irrelevant because the impacts of COVID-19 have rendered all historical projections and targets with regard to international and domestic air services meaningless. Mr Hollyman also says that QAC has made public, in its June 2018 SOI, its financial forecasts, including revenue and passenger numbers for the financial year to June 2021. He also says there is no evidence to support the contention that this information would be of real interest to other South Island airport companies or how it could affect QAC’s bargaining position with major customers.

[18]   Mr Hollyman says the COP Report, on the face of the document, uses assumptions from the Queenstown Airport’s Master Plan Forecasts which is a publicly available document. He also says those assumptions and other projections in the COP Report have been rendered meaningless by the effects of COVID-19.

Discussion

[19]   While, as Mr Curran noted, r 8.25 of the High Court Rules provides for applications to be made where a party seeks to challenge the confidentiality of a document, the Supreme Court in Erceg v Erceg confirmed that the High Court has an inherent power to make confidentiality orders.2

[20]   In Erceg v Erceg, the Supreme Court emphasised that the principle of open justice is fundamental to the common law system of civil and criminal justice and is a principle of constitutional importance. It also said that the underlying rationale of the principle is that transparency of court proceedings maintains public confidence in the administration of justice by guarding against arbitrariness or partiality, and suspicion of arbitrariness or partiality, on the part of courts. It also said that the principle means not only that judicial proceedings should be held in open court, accessible by the public, but also that media representatives should be free to provide fair and accurate reports of what occurs in court.3

2 At [7].

3 At [2].

[21]   While the Supreme Court also said it is well established that there are circumstances in which the interests of justice require that the general rule of open justice be departed from, it also made it clear that this was only to the extent necessary to serve the ends of justice.4 In the case before it, the Court was not satisfied the respondents had demonstrated to the requisite high standard that the interests of justice required a departure from the usual principle of open justice.5

[22]   It is clear from Erceg that the principle of open justice is the starting point when considering an application to prohibit publication of any part of a court proceeding and that an order to prohibit publication should be granted only where the Court is satisfied that the interests of justice require a departure from that principle.

[23]   I accept that when the SAA and the COP Report were first prepared, they may have contained information that was commercially sensitive and which could have prejudiced the commercial interests of QAC if made public, including in court proceedings. For example, the revenue and profit after tax targets in the SAA differ from the equivalent figures in QAC’s SOIs prepared in June 2018 and 2019. However, a great deal has changed since all those documents were prepared.

[24]   First, time has passed since the SAA and COP Report were prepared. The SAA was signed in October 2016 and covers the period ending 30 June 2021. While that period has another nine months to run, decisions about achieving targets in that period will have been taken some time ago. The commercial sensitivity of what are now largely historical projections or aspirations cannot be high. In addition, I do not consider that the information in the SAA about the mechanics of cooperation between QAC and AIAL is particularly remarkable or commercially sensitive. Moreover, as Mr Hollyman observed, some of those mechanics are described in QAC’s SOIs.

[25]   The COP Report is slightly newer but it is only a draft and there is no evidence that its assessments and recommendations have been adopted by QAC. I am not able to assess whether the assumptions the COP Report uses from other documents have already been made public. I have some doubt, however, that the figures used in the

4 At [3].

5 At [21].

Report are particularly sensitive when the Report clearly envisages further detailed work being undertaken before final decisions can be made. It states, in its Introduction, that further work required to develop a Wānaka concept includes:

·     Detailed forecasting of air traffic for the airport;

·     Review of airspace operations and climate conditions to better establish appropriate length and alignment for the runway and associated infrastructure; and

·     Master Plan for the airport considering in detail the spatial layout of the airport and facilities.

[26]   Secondly, as Mr Curran acknowledged, COVID-19 is a game changer. It is clear that a primary focus of the two documents is on bringing international travellers to Queenstown and Wānaka. Whatever projections an airline or an airport company may have had concerning passenger numbers, aircraft movements and revenue based on past years are of marginal relevance in a situation when no-one knows when, from what countries, in what numbers and under what conditions international travellers will be permitted to return to New Zealand. With COVID-19 still a major problem in a number of traditional tourism source countries, it is highly unlikely that numbers will return to pre-COVID levels any time soon. In these circumstances, it is hard to see how pre-COVID future projections have real relevance or significant commercial sensitivity with respect to future operations.

[27]   Thirdly, while I accept that there may be some continuing, largely historical, commercial sensitivity about aspects of the two documents, there is no evidence of how disclosure of these now largely historical figures will cause actual adverse commercial impact on QAC other than general assertions that disclosure may undermine QAC’s competitive position.

[28]   Fourthly, there has been a significant public debate about the polices and decisions of the QLDC and the QAC regarding the future of the Wānaka airport and the adequacy of the public consultation process regarding that future carried out by

the QLDC under the Local Government Act 2002. This proceeding is one consequence of that debate. Inevitably, the policies and plans of the QAC, as the subsidiary of the QLDC and the operator of the Wānaka Airport, have assumed some prominence in the debate and in this proceeding. The two documents in question, including the projections they contain, are relevant to the policies and plans of the QAC. Whether the documents are relevant to the decisions of the QLDC has yet to be established but they are part of the context of the proceeding.

[29]   In the circumstances before the Court, I am not satisfied that QAC has established to the requisite high standard that the interests of justice require a departure from the usual principle of open justice.

[30]   Accordingly, I decline to make the confidentiality orders sought with respect to the two documents, which would have prevented open discussion of their contents in Court and reporting of that discussion in the media. However, in recognition that there may be some residual commercial sensitivity of some of the contents of the documents, I direct that the documents not be available for public or media inspection.

G J van Bohemen J