Asset sales plan faces court hurdle

The Government's flagship asset sales programme could be temporarily halted today after a hearing in the High Court at Wellington.

Lawyers for the Maori Council will argue that the Government will be acting unlawfully if it removes power company Mighty River Power from the State-owned Enterprise Act this afternoon by an order-in-council.

After the Cabinet's approval this morning, Governor-General Sir Jerry Mateparae is scheduled to sign an order-in-council about 3pm transferring Mighty River Power to the jurisdiction of the Public Finance (Mixed Ownership Model) Amendment Act 2012.

The transfer effectively is the beginning of the legal process to float up to 49 per cent of the company.

The hearing will begin in the High Court at Wellington at 10am but is expected to be heard in chambers unless the judge deems it in the public interest to be heard in open court.

Justice Ronald Young - sometimes referred to as "Red Ron" for his liberal leanings - is thought to be hearing the case. The Crown will be represented by Crown Law counsel Jason Gough and Wellington barrister David Goddard, QC.

It will argue that nothing, not the order-in-council, nor the sale itself, limits the Government's ability to address Maori rights and interests in water.

The Maori Council will be represented by Felix Geiringer who ran the council's case at the Waitangi Tribunal hearing in July.

He will argue that the Crown has failed to implement mechanisms that will protect claimed Maori interests in freshwater and geothermal resources and that because its actions are inconsistent with the Treaty of Waitangi as required under Section 9 of the State-owned enterprises Act, its actions under the act furthering the sale are unlawful. The council statement of claim also says that the "defective consultation" makes the sale unlawful.

If the Maori Council is successful, the court will issue a declaration that the Government ought not to proceed - the courts do not issue injunctions against the actual Crown. A substantial hearing would then be scheduled.

It is also possible the court could decide that transferring the bill from the coverage of one act to another is not prejudicial to the Maori Council.

There will be other steps in the sale process that could trigger successful litigation.

But since the Government itself has signalled the transfer as a major milestone, the Crown lawyers may not push that argument.

The story so far

Jan: Govt faces outcry from Maori at prospect that a Treaty of Waitangi clause might not apply to partially privatised companies. After hui, Govt says Treaty clause would stay but would apply to Govt, not private shareholders.

Feb: Maori Council with 10 iwi and hapu file claim with Waitangi Tribunal that sale would affect interests in water and geothermal resources.

Aug: Tribunal interim report agrees with claim, and suggests "shares plus" solution to give iwi stake and governance role in SOEs.

Sep: Govt announces delay in sales from late 2012 and plans hui to strengthen legal position.

Oct 15: Govt rejects "shares plus" after hui and says it will proceed with plans to sell.

Oct 19: Maori Council files High Court bid to halt sale.

- Audrey Young, NZ Herald

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