A recent Supreme Court decision widens the scope of judicial review where the relevant decision was affected by a material error, but has left its boundaries uncertain.
Ririnui v Landcorp Farming Ltd [2016] NZSC 62 arose from a dispute between Landcorp, a state-owned enterprise (SOE) and the iwi group Ngāti Whakahemo, after Landcorp entered an agreement to sell a farm by tender. The Office of Treaty Settlements (OTS) had advised Landcorp that the farm was not relevant to any future Treaty settlement, because all iwi claims in the area were settled. However, Ngāti Whakahemo’s claim had not been settled. Ngāti Whakahemo sought judicial review of Landcorp’s decision to enter the agreement, OTS’ decision to class the farm as not of interest to future settlements, and the shareholding Ministers’ decision to let the sale go ahead.
The case resulted in two declarations, by shifting majorities. The Supreme Court was clear that an exercise of public power influenced by a material mistake was wrongful, but disagreed on the appropriate course of action regarding the decisions under review. Elias CJ, Glazebrook and Arnold JJ were the majority on the first point, holding that the Ministers’ decision to allow the sale was wrongful because it was decided under a material mistake. Elias CJ, Glazebrook, Arnold and O’Regan JJ formed the majority on the second point, holding that Landcorp’s decision to sell was wrongful because it was decided under a material mistake.
There were important differences amongst the judges. For example, Elias CJ and Arnold J considered that the matter should go back to the Ministers so that they could consider the option of negotiations with Ngāti Whakahemo. The sale agreement might be set aside if negotiations were commenced. However, O’Regan and Glazebrook JJ thought that setting aside the agreement would create unfair prejudice to the interests of the third party purchaser.
The ultimate decision leaves the scope of judicial review uncertain. Future cases will no doubt explore this further.