Mighty River Power: Maori Council v. Attorney-General

Maori interests failed to convince the Supreme Court that partial privatisation of Mighty River Power will materially impair government ability to provide compensation for any yet-to-be decided claims to water rights.  This court ruling leaves government free to sell a 49 per cent stake in its state-owned energy companies.

In the North Island, Maori interests claim that control of their rivers and streams was usurped by settler interests after signing of the Treaty of Waitangi.  Government says there is no validity to these claims and sees Maori demands as a means to claim economic rents for a natural resource available to all.

Legislation last century bound the government to provide compensation for any agreed Treaty claims with the return of disputed assets as one form of compensation.

Representatives of Maori with interests along the Waikato River argued that government plans to sell part of its interest in Mighty River Power should be stopped; a sale would diminish assets available to meet Treaty claims over ownership of Waikato water.

The Supreme Court said there is no logical reason why government should be forced to keep, against its will, a minority shareholding in energy generating companies which are unconnected in any meaningful way to underlying Treaty claims.

A partial sell-down of shares does not amount to a sale of the company, Mighty River Power, or to the disposal of assets held by the company.

The Court said that government retention of a 51 per cent shareholding in Mighty River Power and with it majority control of the company means that government retains substantial capacity to provide redress for any Treaty claims.  Government can later issue further shares which can be offered as compensation, or use cash generated from Mighty River dividends to pay compensation.

Maori Council v. Attorney-General – Supreme Court (27.02.13)

13.005

Extradition: Radhi v. Police

An alleged people smuggler wanted in Australia following the deaths of illegal immigrants who drowned when their boat sank off Indonesia cannot be extradited because people smuggling was only a minor offence under New Zealand law at the time of the deaths.  Immigration penalties for people smuggling have since been beefed up.

The High Court was told that Maythem Kamil Radhi (also known as Maytham Kamil Radhi) is wanted in Australia for his alleged involvement in a 2001 attempt to smuggle about 300 illegal immigrants into Australia from the Middle East.  The vessel sank in rough seas off Indonesia and most passengers were drowned.

Mr Radhi was accepted into New Zealand from Indonesia as a refugee in 2009.  Australian authorities sought an extradition warrant in 2011 after finding that Mr Rahdi was in this country.  In Australia, Mr Rahdi faces up to 20 years imprisonment if found guilty of people smuggling.  At the time of the deaths, New Zealand immigration law imposed a maximum sentence of three months.  Extradition is not ordered for minor offences.  Before ordering extradition, a judge must be satisfied that the behaviour complained of would be an offence in this country if it were committed in New Zealand and that the maximum penalty on conviction is at least twelve months.

Since June 2002, eight months after Mr Rahdi’s alleged involvement in the ill-fated people smuggling operation, New Zealand law was changed to create specific offences against people smuggling with heavy penalties.

Radhi v. Police – High Court (11.2.13)

13.003

Earthquake: Insurance Council v. Christchurch City

Local councils requiring earthquake strengthening when repairing existing buildings cannot set standards beyond the 34 per cent limit set by regulations under the Building Act.  An attempt by Christchurch City to set the seismic limit at 67 per cent of new building standard was struck down by the High Court as invalid and in excess of its powers.  A 34 per cent limit is the assessed seismic strength required to support a building suffering an earthquake of one-third the intensity that could be borne by a new building erected on that site.

In the aftermath of Christchurch’s earthquakes, the local council has been setting new rules for reinstatement of earthquake-damaged and earthquake-prone buildings.  The Insurance Council, which represents insurers covering some 95 per cent of New Zealand’s insurance cover, objected to new city council rules which required buildings to be brought up to 67 per cent of new building standard.  The Insurance Council said this would increase repair bills by hundreds of million dollars.  The High Court was told that a rebuild of earthquake damaged Canterbury University would cost an extra $140 million if a 67 per cent limit was set rather than 34 per cent.

In practice, building owners want to see their buildings strengthened to a 67 per cent rating.  Not only does this reduce risk, but also improves the building value.  Post-earthquake rebuilds have been on hold while insurers have argued over the level of seismic strengthening required.  The level of danger created by the building, the use to which it will be put and the cost of repairs are weighed by the city council in giving approval to rebuild plans.

Justice Pankhurst said the primary focus in the Building Act is to manage the likely risk of earthquake-prone buildings collapsing causing injury or death.  New buildings are required to meet 100 per cent of the seismic strength required by regulations made under the Act.  When repairing or reinstating existing earthquake-prone buildings, they need only be brought up to 34% of the seismic strength required for new buildings.  Councils cannot impose higher standards than those set under the Building Act.

Insurance Council v. Christchurch City – High Court (4.2.13)

13.004