Judicial review

Going beyond its “proper sphere”?

A shifting majority (a ‘mobile plurality’?) of Supreme Court judges enabled both sides to claim some success in Ririnui v Landcorp Farming Ltd [2016] NZSC 62 (9/6/16), and enhanced the scope for judicial review of the Crown’s commercial and policy decisions, at least where vitiated by material errors, as unlawful exercises of public power.

In its role as owner of Crown land, Landcorp has a protocol with the Office of Treaty Settlements by which to understand what land in its possession the Crown may wish to rely for Treaty settlement purposes. The protocol was intended to provide a measure of security for Treaty claimants. Landcorp sold a farm by public tender after receiving advice from OTS the land was not required for Treaty settlement purposes. OTS wrongly assumed all Treaty claims to the farm had been settled, whereas Ngāti Whakahemo’s remained outstanding. On judicial review, Ngāti Whakahemo’s chair, Mr Ririnui, obtained interim orders staying the sale.

Courts jealously guard the scope of judicial review, but acknowledge well-understood principles against intervention in Crown commercial dealings or policy matters in circumstances falling short of fraud, corruption or bad faith. The Court of Appeal held OTS’s advice was not reviewable, being indeterminate of Landcorp’s functions, not adversely affecting Ngāti Whakahemo’s rights, and amounting to an unjusticiable policy or political decision. No relief against OTS could redress the sale; the State-Owned Enterprises Act prevented Ministers interfering.

Elias CJ and Arnold and Glazebrook JJ held Landcorp’s decision to sell, and the Ministers’ failure to intervene with Landcorp, were susceptible to review in the broader Treaty settlement context as the poisoned fruit of the Crown’s mistaken view of Ngāti Whakahemo’s position. As the sale was made on terms acknowledging the dispute, the Chief Justice and Arnold J considered the third party was not unduly prejudiced by the sale’s evanescence, and would have enabled Landcorp’s consideration of an offer from Ngāti Whakahemo as if the land had not been sold, to set aside the sale if the offer was acceptable.

But O’Regan J (who agreed Landcorp’s decision to sell was reviewable, but disagreed the Ministers’ non-intervention was raised adequately on the pleadings) and Glazebrook J considered the third party laboured under the same mistake as affected the decisions, meaning it was significantly prejudiced. They would not provide the substantive relief sought by Ngāti Whakahemo. And William Young J, who alone would not have allowed review of the decisions at all, also held s 21 of the State-Owned Enterprises Act 1986 prevented substantial challenge to contracts entered into with SOEs. Declaratory orders only were made.

Despite William Young J’s staunch resistance to expansion of SOEs’ judicial review, it seems inevitable the Crown’s commercial or policy decisions – if capable of being depicted in some broader public context, as is likely – are more open to challenge. Interim orders to prevent the Crown acting on such decisions now stand a better chance of success. Contracting with the Crown just became more uncertain.

[This article was first published in The Capital Letter (39/22, 14 June 2016)]


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