Coromandel Watchdog of Hauraki (Incorporated) v Minister of Finance [2020] NZHC 1012 (15 May 2020)

Last Updated: 30 June 2020

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-404-138 [2020] NZHC 1012

UNDER	the Judicial Review Procedure Act 2016
IN THE MATTER	of the Overseas Investment Act 2005
BETWEEN	COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) Applicant
AND	MINISTER OF FINANCE and ASSOCIATE MINISTER OF FINANCE First Respondents OCEANA GOLD (NEW ZEALAND) LIMITED Second Respondent

Hearing:	14 May 2020 (teleconference)
Counsel:	B O’Callaghan and R B Enright for Applicant J B M Smith QC, K G Stephen and K M Anderson for First Respondents J E Hodder QC and S E Kuper for Second Respondent
Ruling:	15 May 2020

RULING OF SIMON FRANCE J

• [1] The primary proceeding is a judicial review scheduled for 8 June 2020. It challenges the decision of the first respondents under the Overseas Investment Act 2005 (“the Act”) to allow the second respondent to acquire properties in Waihi. The land will be used to establish a tailings dam to support existing mining operations and facilitate their expansion. This ruling addresses a challenge by the respondents to two

COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) v MINISTER OF FINANCE and ORS [2020] NZHC 1012 [15 May 2020]

affidavits recently provided by the applicant.¹ The respondents are yet to file their own evidence.

• [2] The issue on the judicial review is the correct interpretation of the concept of “benefit to New Zealand” as that term appears in the Act.² Particularly at issue is whether the Ministers, in assessing benefit, were correct to put to one side negative and neutral impacts. The applicant contends that benefit requires a cost/benefit analysis where “disbenefits” are weighed in the mix. It is common ground that the disbenefits were not considered. In a recent decision in the same proceeding, Churchman J summarised the respondents’ position this way:³

The first respondents claim that the applicant has misunderstood their defence and that they are not asserting that no alleged detrimental effects arise at all, but they deny that any alleged detrimental effects were a relevant consideration under the Act. They say that the point put in issue is the relevance of the detrimental effects, not their existence.

• [3] Churchman J’s judgment, issued 5 May, dealt with an application by the applicant for further discovery. By way of background, there have been two Ministerial decisions on the second respondent’s application under the Act. The first time it was decided, the two Ministers disagreed, with the Minister of Land Information (Hon Eugenie Sage) declining the application and the Associate Minister of Finance (Hon David Clark) approving it. Unanimity being required, the application was declined. However, the second respondent issued proceedings challenging the decision. Those proceedings were settled with the outcome that the decision was retaken by the present first respondents.

• [4] On the discovery application, the applicant had sought access to the material that was before the Hon Eugenie Sage when she made her decision declining the second respondent’s application. The application was declined because the first decision is not of relevance to the present challenge. Churchman J further observed:⁴

The Court will accordingly not be assisted by knowing what factors Minister Sage took into account and could well be distracted by being invited to

1. The challenged affidavits are the affidavits of Catherine Delahunty and Ivo Geoffrey Bertram, both dated 11 May 2020.

² Section 16A.

³ Coromandel Watchdog of Hauraki (Inc) v Minister of Finance and Ors [2020] NZHC 888 at [14].

⁴ At [30].

undertake a detailed consideration of sustainable economics in connection with Oceana’s application. The issue is not the correctness or validity of Minister Sage’s views on such matters. The issue is the legal one of the matters that were relevant in accordance with the statute which the Ministers were obliged to take into account.

• [5] In the present challenge, there are two affidavits in dispute.

• [6] The first is the third affidavit of Ms Catherine Delahunty who is a member of the applicant. Her affidavit appends six documents. The first three are documents referred to, in footnotes, by the Hon Eugenie Sage when setting out her reasons for declining the application. The second group of documents are publicly available documents. The first is an address by the present Prime Minister at a “One Planet Summit”. Mr O’Callaghan says it is relevant for establishing the importance to the present Government of climate change and the impact of any activity on the environment. The second document is a submission by a mining group on a Bill, the relevance of which is an acknowledgment by that group that mining has detrimental environmental impacts. The third document is a public consultation document on the Zero Carbon Bill.

• [7] Mr O’Callaghan explains that the applicant apprehends that the respondents may, if an error is established, seek to argue it was not a consequential error, and that accordingly relief should be declined. The purpose of this evidence is to counter that possibility by establishing that there are detriments to the proposal that are of sufficient weight to mean the decision should be retaken. It had always been proposed to file evidence on the issue of economic sustainability. It was hoped that the discovery application would yield the material that could then be filed, but this affidavit, together with one part of the next affidavit, is the alternative method.

• [8] The second affidavit is from an economist, Dr Ivo Bertram. He addresses three topics. The first is the common understanding of the task of benefit analysis in project evaluation, and most policy contexts. The proposition is advanced that the use of the term benefit is invariably understood to mean net benefits, which includes consideration of detriments.
• [9] The second topic is labelled “Counterfactual”. In an earlier decision on the “benefit to New Zealand” analysis in the Act, the High Court held that assessing the benefit to New Zealand required the decision maker to consider what would happen with and without the overseas investment that is the subject of the application.⁵ In this section of his affidavit, Dr Bertram says that this task, properly understood, involves consideration of the detriments. He then proffers his opinion on the correct answer to such an analysis applied to the present facts. The third topic is “sustainable economics” which Dr Bertram opines should be a relevant consideration. The balance of the affidavit sets out why, in Dr Bertram’s opinion, mining is not an example of sustainable economics. This is the topic referred to by Churchman J in the passage above where his Honour doubts the Court will be assisted by such evidence.⁶

• [10] Mr O’Callaghan explains the purpose of this third section of the affidavit as being the same as the materials appended to Ms Delahunty’s affidavit. If the Ministers are shown to have erred in the way alleged, this evidence establishes there are genuine substantive issues that will then need to be considered under detriments.

• [11] As for the other parts of the affidavit, the purpose is submitted to be to show that the interpretation advanced by the respondents is out of sync with the interpretation commonly given to the word benefit.

Decision

• [12] Issues were raised concerning the timing of the evidence. Because of the decision reached, it is not necessary for me to address these.

• [13] There are two general principles of some importance. The first is that this is a judicial review proceeding which involves an important but narrow issue. I refer to a passage from the judgment of Wild J in BNZ Investments Ltd v Commissioner of Inland Revenue,⁷ where his Honour is commenting on a Court of Appeal decision,

5. Tiroa E and Te Hape B Trusts v Chief Executive of Land Information New Zealand [2012] NZHC 147.

⁶ See this judgment, above at [4].

7. BNZ Investments Ltd v Commissioner of Inland Revenue HC Wellington CIV-2006-485-697, 7 December 2006.

Ministry of Energy v Petrocorp Exploration Ltd,⁸ and an earlier decision of Hammond J in Wellington International Airport Ltd v Commerce Commission.⁹

[15] This is an up-to-date reminder that judicial review is still intended to be a comparatively simple process of testing that public powers have been exercised after a fair process, and in a manner which is both lawful and reasonable. I read it as strongly endorsing what Hammond J said at [44] in WIAL [Wellington International Airport Ltd v Commerce Commission] about the responsibility resting on Judges dealing with judicial review to narrow the issues, and reduce the material placed before the Court to the necessary minimum.

• [14] I consider this proposition to remain a valid principle. Second, reinforcing the first, what is at issue here is the interpretation of a statute, and the meaning of an ordinary word. The courts have long turned against the admissibility of expert evidence in relation to a task that is quintessentially a function of the Court. That is not to say such evidence is never admitted, especially where the word or provision in issue may be technical in nature. It may also on occasions be “substantially helpful” for an expert to set out the consequences of a particular meaning,¹⁰ but again one would expect it concerns an area where these consequences will not otherwise be obvious.¹¹ Generally, however, it is not seen as necessary or appropriate to receive expert evidence on the meaning of a statute.

• [15] In my view, the present case engages both these principles. At issue is the meaning of an ordinary word in a statute that has been around for some time. The issue is clear cut, as are the consequences of the interpretation taken by the first respondents. Here it means detriments such as impact on the environment are not seen to be part of the exercise. I do not consider expert evidence is substantially helpful, or indeed at all needed. As an example, Dr Bertram draws on jurisprudence in the Commerce Commission arena as an example of how benefit is assessed as meaning net benefit. The difficulties with this are obvious. It is a different statute performing a specific function. Reliance on it opens up another topic of debate as to whether it is

⁸ Ministry of Energy v Petrocorp Exploration Ltd [1989] NZCA 95; [1989] 1 NZLR 348 (CA) at 353.

9. Wellington International Airport Ltd v Commerce Commission HC Wellington CP151/02, 23 July 2002 at [44]-[45].

¹⁰ The test in s 25 of the Evidence Act 2006.

¹¹ An example is Maher v Opticians Board [2001] 3 NZLR 549 (HC). See generally the discussion in Matthew Smith The New Zealand Judicial Review Handbook (2nd ed, Thomson Reuters, 2016) at [30.6.5].

similar, which can only be resolved by answering the question in issue in this case. Nor is this area of law a matter where expert evidence is needed to draw the material to the Court’s attention. That is the role of counsel. I also note the inevitable risks in such evidence – the respondents will respond with evidence of their own, the applicant may want reply evidence and an approaching fixture is threatened for little useful reason.

• [16] The other purpose for which the evidence is filed is to buttress the claim for relief, if an error is established. I first observe the evidence on economic sustainability is proffered notwithstanding the passage I have cited from Churchman J where the subject matter is held to be not helpful. That aside, I am sufficiently confident that the prospect of withholding relief in this case is so remote that the evidence would not anyway be needed. If I am wrong in this relief point, it will always be open to the trial Judge to revisit the admissibility issue. I note that the position of the respondents on this application is that the evidence is irrelevant. One would not therefore expect argument from the respondents that makes the evidence relevant.

• [17] The reality here is that if the applicant succeeds in its primary argument, the first respondents will have assessed benefit to New Zealand without having regard to one mandatory half of the equation – namely, the detriments attaching to such a proposal. Further what is proposed for the land is a tailings dam, which is a dam that is used to store the usually highly toxic by-products of mining. I consider the prospect of an issue arising in relation to relief, should the applicant be correct, to be so remote that the better course is to give precedence to the principle that evidence should be confined.

• [18] These two conclusions address all the evidence contained in the two affidavits except perhaps the second section of Dr Bertram’s evidence which concerns the so- called counterfactual. This evidence appears to be one economist’s opinion on what should have been considered as relevant to the “with and without the investment” options and what then should have been the first respondents’ conclusion on the material. I do not consider the evidence to be relevant, which inherently means it is also not substantially helpful.

Conclusion

• [19] I uphold the objections and rule the evidence inadmissible. The costs of this application are reserved, to be addressed as part of costs on the substantive proceedings. As I am not allocating the hearing, for the benefit of the presiding Judge I observe I am not aware of any features to suggest standard costs should not follow the event in the ordinary way but I have not heard argument on costs.

Simon France J

Solicitors:

K3 Legal, Auckland for Applicant

Crown Law Office, Wellington for First Respondents Simpson Grierson, Wellington for Second Respondent