ALPINE CHOPPERS LIMITED V MINISTER OF CONSERVATION HC WN CIV 2007 425 437

ALPINE CHOPPERS LIMITED V MINISTER OF CONSERVATION HC WN CIV 2007 425 437 17 March 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2007 425 437BETWEEN ALPINE CHOPPERS LIMITED Plaintiff AND MINISTER OF CONSERVATION Defendant Hearing: 10 December 2007 and 25 February 2008 Counsel: H Cull QC and I W Thorpe for Plaintiff P A McCarthy and C M Lenihan for Defendant Judgment: 17 March 2008 at 10 amRESERVED JUDGMENT OF RONALD YOUNG J Introduction[1] Milford Airport is in the Fiordland National Park. The Department of Conservation (DOC) therefore controls aircraft movements in and out of the airport. It has to balance tourist access and conservation interests when considering the extent of aircraft movements allowed. In the early 2000s DOC decided to develop a management plan for the Milford Airport as part of a wider review of the management plan for the Park. After consultation with users, it released, in June 2007, a new plan for commercial use of the airport. As a first step it invited expressions of interest from air operators who were interested in applying for concessions to fly in and out of Milford. The plaintiff was interested in such a concession but missed the deadline for expressions of interest by a few hours. DOC refused to allow a "late" expression of interest to be considered, and thus refused to allow the plaintiff to make an application for a concession.[2] The plaintiff says the process for inviting expressions of interest and the refusal to allow its late expression of interest were unlawful (to use a general description). The plaintiff also says the process by which the concessions to land were to be considered and allocated by DOC is flawed. It says the whole process should be set aside and DOC required to start again.Background[3] As part of the development of a revised Fiordland National Park Plan in 2002 DOC considered the adverse effects of aircraft in the Park, particularly around the Milford area. DOC decided, as far as the Milford Airport was concerned, it would work with the Queenstown/Milford Users Group ("QMUG") of aircraft operators to develop a plan for future aircraft management in the area. A number of formal meetings were held between June 2003 to mid 2007. DOC's desire was to restrict aircraft environmental effect in the Park whilst allowing the airport to continue to function. [4] Mr Rodd, who was (from 2003), and is, the Community Relations Manager of the Southland Conservancy of DOC, had significant responsibility for the development of the plan as it affected Milford Airport. He recognised that there were strong competing views; some took the view that aircraft movements in the park should be banned or significantly reduced, and others that there should be unlimited landings and Milford Airport should be removed from the National Park, or extended to allow for commercially scheduled flights. [5] By the end of 2005, however, there was general agreement between air operators, some in the tourism industry, and DOC, that the total number of landings at Milford Aerodrome should be capped for future use at the flight levels in the April 2004 to March 2005 year. These arrangements were included in the Fiordland National Park Management Plan.[6] The next stage of the development of the management plan relating to aircraft movement was to decide who could fly (commercially) in and out of Milford. Mr Rodd said the plan:. . . contained a framework for allocation of concessions for this activity recognising the specific criteria which aircraft operators had sought to be included in the plan.[7] While the plan was being developed DOC obtained information about aircraft operators and aircraft landings in Milford during the 04/05 year from the Ministry of Transport and the Civil Aviation Authority (CAA). It then confirmed these statistics with the appropriate air operators. [8] By 6 June 2007 the revised management plan was approved and the concession allocation plan was signed off by the Minister's delegate, the Southland Conservator Mr O'Connor, and became operational. The plan called for expressions of interest for commercial concessions to operate from Milford Airport with applications assessed on defined criteria. The management plan confirmed that the number of take-offs and landings would be limited to the total for the 2004/2005 year with no more than 53 fixed wing aircraft and 37 helicopters able to be used. Concessions were to be for five years with a right of renewal for five years subject to compliance with the conditions and any further information regarding environmental effect. Although the management plan was descriptive, it left DOC to work out significant operative detail. [9] The DOC concession allocation plan provided that future concessions to land at Milford Airport would be based on the total 04/05 numbers and would be divided into 23 "packets" of landing rights. The decision that there would be 23 such packages was based on what DOC believed was the number of commercial users of the airport during the 2004/2005 year. Each packet reflected the number of flights undertaken by a particular user in the 04/05 year. DOC decided that applicants could only apply for one packet each. The 23 packets were intended to reflect 23 viable businesses (as at 04/05) and to avoid one applicant dominating the concessions.[10] DOC decided as the first step in the process they would invite expressions of interest from interested air operators. A time limit for expressions of interest would be set and a failure to express interest on time would knock out a potential applicant. Once expressions of interest were received the potential applicant would be sent an application pack inviting them to apply for a particular packet of landing rights constituting a "concession". DOC developed a set of criteria against which applications would be considered. It accepted that if an existing user applied for a concession which reflected their previous use of the airport, and no other applications were made with respect to that packet, then, subject to compliance with the statutory rules, that user would be granted the concession. [11] DOC acknowledged that a "new" applicant, who had no Milford flight experience, was only likely to succeed against an historic user if the new applicant could establish a significantly better proposal for the reduction of adverse environmental effects arising from flights in and out of Milford. [12] The call for expressions of interest began with an email to those air operators DOC considered might be interested in applying for a concession, followed shortly thereafter by one advertisement in each of the Otago Daily Times, Southland Timesand Christchurch Press on the 7 July, 2007. [13] The email was sent to air operators on 4 July 2007. This included the plaintiff. The email said:Dear Operator Please note that the calls for expression of interest for regular landings at Milford Aerodrome will be notified in the Southland Times, Otago Daily Times and The Press this Saturday, 7 July 2007. You will find a copy of the text of the advertisement below. You are welcome to follow its instructions after Saturday, 7 July 2007.Department of ConservationTe Papa AtawhaiThe advertisement, attached to the email, and in the papers on 7 July said:EXPRESSIONS OF INTERESTREGULAR AIRCRAFT LANDINGS AT MILFORD AERODROMEThe Minister of Conservation calls for expressions of interest for conditional invitations to apply for a concession for regular aircraft landings (more than 10 landings per annum) at Milford aerodrome pursuant to section 17ZG(2)(a) of the Conservation Act 1987. Any person or organisation may register an interest in writing by providing the person or organisation's full name, contact person, postal address, telephone, facsimile number and email address to: Sarah Dowie (Community Relations Supervisor) Regular Landings at Milford Aerodrome Department of Conservation 33 Don Street, Southland Conservancy PO Box 743 INVERCARGILL Email: sdowie@doc.govt.nzExpressions of interest will be accepted before 9.00am, Monday 16 July 2007. Martin Rodd Community Relations Manager[14] Alpine Choppers Limited is wholly owned by Mr Brendan Thow who is also the sole director. He has had extensive experience flying in the Fiordland area. He had always intended to seek a concession to use Milford Airport commercially and had been a member of the Queenstown users group. Mr Thow did not see the advertisement in the Dunedin, Invercargill and Christchurch newspapers on 7 July 2007 inviting expressions of interest. He was keeping his eye on the "local" paper,The Mountain Scene, anticipating it would carry the advertisement. He did not see DOC's email of 4 July until he began these proceedings. He accepted he had inadvertently overlooked the email.[15] Early in the afternoon of 16 July, Mr Thow was talking to an acquaintance who asked him whether or not he had expressed an interest in being considered as one of the concessionaires for the Milford airport. He immediately telephoned DOC and left a voicemail message saying that his company was interested in a concession. He rang later that afternoon and talked to Ms Sarah Dowie, a DOC employee, who, he said, told him that the deadline had passed and that DOC could not extend it. She confirmed this position in an email to him at about 4 o'clock that day.The plaintiff's case[16] There are essentially two parts to the plaintiff's claim. Firstly, it challenges the process which gave rise to the advertising for expressions of interest and to the refusal to allow late filing of the plaintiff's expression of interest. Secondly, the plaintiff challenges the process for the allocation of concession packages. The plaintiff alleges that both are decisions of the Minister and are thereby susceptible to review. While the defendant accepts the "decisions" are susceptible to review, it points out the decisions were in fact made by the Minister's delegate Mr O'Connor, the Southland Conservator. I accept the defendant is correct and the decision maker was Mr O'Connor, however, in this case nothing rides on who actually made these two decisions. In this judgment, I will refer to the decision as the Minister's. [17] The plaintiff's case is based on the following propositions: (i) That the Minister arbitrarily adhered to a rigid policy, being the process developed by DOC, which in part provided for the expression of interest process. The plaintiff says the Minister arbitrarily applied this expression of interest process and wrongly refused to consider the plaintiff's application for a concession which he was required to do by the Conservation Act (see s 17T). The decision to refuse to allow the plaintiff's expression of interest meant the Minister refused to consider the plaintiff's application for a concession. The plaintiff says s 17T requires the Minister to consider each application made and this statutory obligation cannot be avoided by the expression of interest process.(ii) Illegality. The plaintiff says that in formulating the process for the application for concessions the Minister failed to take into account the following relevant considerations:(a) The fact that the Plaintiff was an "historic user" and was not included as one of the 23 historic users already allocated a "packet" of landing rights, pursuant to the Minister's first decision of 5 June 2007; (b) the Plaintiff's entitlement to be treated with the same lenient consideration as other parties interested in obtaining a concession to use Milford aerodrome; (c) the Minister's own criteria for considering applications for concessions to use Milford aerodrome that the users must be highly experienced pilots in the Fiorldland National Park; (d) the Plaintiff's extensive relevant experience in Fiordland National Park and elsewhere in similar terrain and conditions; (e) the limited period of time that the Minister allowed for expressions of interest after advertising and the limited degree of lateness of the Plaintiff's expression of interest; (f) the circumstances giving rise to the Plaintiff's late expression of interest and the limited degree of culpability on the Plaintiff; (g) the lack of any actual prejudice to any other person or applicant if the Plaintiff's expression of interest is accepted; (h) the significant prejudice to the Plaintiff from being prevented from obtaining a concession to use Milford aerodrome for at least five and possibly as many as ten years; (i) the criteria under section 17U of the Act; and (j) the obligation under section 17T of the Act to accept any complete application from the Plaintiff.And that he took into account the following irrelevant considerations:(a) that the Plaintiff was not a historic user of the Milford aerodrome, which was a mistake and is denied;(b) that there were only 23 historic users as at 1 April 2005; (c) there were only 23 packets of concessions available, one to each of the 23 historic users and the Plaintiff was not one of them; (d) the 23 packets of concessions had been pre- determined and allocated to the 23 "historic users"identified by the Department; (e) that applicants should not apply for more than one of the 23 packets of concessions; and (f) the process that he had approved, which was contrary to his statutory obligations.(iii) Breach of natural justice. This ground of review relates to the expression of interest question. The plaintiff says the Minister breached natural justice by:(a) Pre-determining the application before any opportunity was afforded to the Plaintiff to make such an application. (b) The Plaintiff was not afforded an opportunity to know the "knock out criteria" and have an opportunity to be heard. (c) The Minister failed to act consistently.(iv) Mistake of fact. The plaintiff says the Minister made two mistakes of fact relevant to his decision making. Those mistakes are:(a) The Plaintiff is not a historic user of Milford Aerodrome; and (b) The Minister has defined historic users by reference to their technical status as an air operator, having been certified by the Civil Aviation Authority, but not the actual past experience of the helicopter pilots, who have flown in Fiordland National Park.The plaintiff says that as a consequence of these two mistakes of fact it did not get the letter of 15 May which would have told it that a failure to express interest was "a knockout". The second mistake, the plaintiff says, resulted in the Minister determining only 23 packets would be available for concessions, thus inevitably affecting the plaintiff's chances of obtaining a concession.(v) Unreasonableness. The plaintiff claims that no reasonable decision- maker, given the criteria necessary for the application to be received and considered by the Minister, would have refused to consider an application because the expression of interest was made some five hours late. And, the plaintiff says that the allocation process was also unreasonable given it required applicants to make an application for one packet only. This, the plaintiff says, could result in two well-qualified applicants applying for one packet and one missing out, while a less well-qualified user who was the only applicant for a packet would be successful because of lack of competition.Expressions of interest and late filing[18] The plaintiff's challenge to the expression of interest process and to the refusal to allow the late filing of an expression of interest is based on: (i) The allegation the Minister arbitrarily followed a rigid policy ([17](i)). (ii) Breaches of natural justice ([17](iii)). (iii) Mistake of fact ([17](iv)). (iv) Unreasonableness ([17](v)). [19] I consider that the plaintiff's complaints are most suitably covered by the allegations of breach of natural justice. I therefore turn to consider those claims by the plaintiff. [20] The plaintiff challenges two separate decisions of the Minister. First, the development of the expression of interest process and its notification; secondly, the Minister's decision to refuse to allow the plaintiff a late expression of interest. To understand the plaintiff's case it is necessary to look at the statutory background togranting concessions, the detail of how DOC developed this concession process and the plaintiff's circumstances. [21] The National Parks Act 1980 authorises the Minister, in terms of Part 3B of the Conservation Act 1987, to grant concessions in National Parks. [22] Section 17ZF of the Conservation Act provides that an aircraft can neither take off nor land within a conservation area unless a concession has been obtained from the Minister. Milford Airport is within a conservation area. [23] Section 17Tof the Act, so far as is relevant, provides that:17T Process for complete application(1) The Minister shall consider every complete application for a concession that is received by him or her. (2) If the Minister is satisfied that the complete application does not comply with or is inconsistent with the provisions of this Act or any relevant conservation management strategy or conservation management plan, he or she shall, within 20 working days after receipt of the application, decline the application and inform the applicant that he or she has declined the application and the reasons for declining the application. (3) Nothing in this Act or any other Act shall require the Minister to grant any concession if he or she considers that the grant of a concession is inappropriate in the circumstances of the particular application having regard to the matters set out in section 17U of this Act.[24] Section 17R provides that:17R Applications for leases, licences, etc.Any person may apply to the Minister for a concession to conduct an activity in a conservation area.[25] Section 17S identifies the mandatory information to be included in an application for a concession. [26] Section 17U sets out the matters that the Minister must have regard to in considering any application for a concession. Section 17W provides more broadlythat a concession shall not be granted unless it is consistent with any conservation management strategy or plan developed for the area. A conservation plan for Fiordland (and therefore Milford) had been developed and s 17W was therefore engaged. [27] As I have said (at [8]) DOC was required to give flesh to the bones of the process described in the management plan. [28] The criteria developed by DOC for assessing applications for concession packets was: (a) experience in flying in Fiordland. (b) History of applicant's operation and compliance with the law. (c) Visitor experience provided by applicant. (d) A five year plan to mitigate adverse environmental effects from flights; including noise and visual and social effects of aircraft. (e) New technology to be introduced to mitigate environmental effects. [29] During the development of the management plan, DOC identified those commercial flyers who were either historic users of the airports or who were interested parties. These persons were invited to a series of meetings. Subsequently, those who had responded to the invitation and attended the meetings were sent the letter of 15 May 2007. [30] It is necessary to understand why the plaintiff, although a regular commercial user of Milford Airport in the 04/05 year was not considered an "historic user" by DOC. He was identified by DOC as an interested party. Mr Thow has been regularly flying in and out of Fiordland since 1999. From 1999 to 2004 he worked for Southern Lakes Helicopters Limited as a helicopter pilot. In 2004 Mr Thow, in conjunction with Mr Toby Wallis, set up Alpine Choppers, with half the capital to each. Mr Thow operated Alpine Choppers using Squirrel and Robinson helicopters.Mr Wallis had a separate company operating in Wanaka called Alpine Helicopters Limited. Between them, they operated three helicopters. [31] Alpine Helicopters had an Air Operating Certificate (AOC) for three helicopters, so the two companies used Alpine Helicopters' AOC. Mr Thow's two helicopters, with Mr Thow as pilot, did the majority of flights in and out of Milford Airport during this time. However, Ministry of Transport and Civil Aviation Authority (CAA) records, on which DOC based its analysis of historic users, identified these flights as flights by Alpine Helicopters Limited. On that basis, Alpine Choppers was unknown to DOC as a Milford Airport user in 04/05. When, therefore, DOC came to identify historic users in 2007, Alpine Choppers was not included. For reasons I will give, whether Alpine Choppers is or is not an historic user is irrelevant. In 2006 Alpine Choppers and Alpine Helicopters ended their association. Alpine Choppers then purchased a Squirrel helicopter, which it currently operates. [32] After the arrangement with Alpine Helicopters ended, Alpine Choppers applied to the CAA for its own AOC. This took considerable time and was only finally granted in August 2007. In the meantime, Alpine Choppers' Squirrel helicopter operated under the AOC of Milford Helicopters Limited, with their agreement. [33] Alpine Choppers' helicopter is used for scenic flights in Fiordland and Mt Aspiring National Parks, heli-skiing, charters for fire-fighting and conservation work for DOC. The loss of an ability to land at Milford Airport will seriously affect the economic viability of Mr Thow's business. [34] As it developed the concession packets, DOC consulted the users group thorough regular meetings and email correspondence. Once the concession process had been decided upon, DOC sent an email, on 8 May 2007, to air operators whom it identified as either historic users or interested parties. Alpine Choppers was included in this list as an interested party. The email of 8 May said:8 May 2007 Potential Interested Party Concession Allocation Process Milford Aerodrome – Regular Use Dear OperatorPRE CONCESSION ALLOCATION PROCESS MEETING – MILFORD AERODROME (REGULAR USERS)Prior to undertaking the process for the allocation of concessions to regularly land at Milford Aerodrome, Martin Rodd (Community Relations Manager) and myself would like the opportunity to discuss the concessions allocation process with you. This is to help you understand the reasons why this particular process is to be run and answer any further questions you may have regarding the process. Martin and I will be in Queenstown from 9.30 a.m. on 15 May 2007 through to 5.00 pm on 16 May 2007. If you wish to meet with us to discuss the concession allocation process, please contact Robyn Roberts on 03 211 2400 or alternatively email Robyn at roberts@doc.govt.nz to arrange a convenient time to receive confirmation of venue. Yours faithfully Sarah Dowie Community Relations Supervisor (Recreation/Tourism Concessions) for Conservator[35] Mr Thow did not respond to the invitation in the email. Those operators who had made appointments for the 15/16 May meetings were given a letter (dated 15 May), which set out detailed information about the concession process. This letter was not sent to the plaintiff nor to any others who did not attend the meetings of 15/16 May. [36] As detailed in [13], an email was sent on 4 July 2007 alerting air operators of the forthcoming advertisement. On 7 July the advertisement appeared in the papers. [37] Five hours after the deadline for expressions of interest, at approximately 2.00 p.m. on 16 July, Mr Thow rang DOC to attempt to express an interest in applying for a concession. By 4 pm that day he was told by DOC he was too late.He was not asked if there were any reasons which might excuse his lateness. He later instructed solicitors who, in an attempt to convince DOC to allow a late expression of interest, set out in detail the circumstances that gave rise to the late expression. DOC refused to allow the late filing. [38] One other air operator, Wilderness Wings, had attempted to express an interest after the 9.00 a.m. 16 July deadline. This attempt was three days after the closing date. Wilderness had been in the list of those who were interested parties and could therefore have expected to have received the email of 4 July from DOC giving early notice of the intention to advertise. No such email was sent to it however. In common with the plaintiff, Wilderness had also missed the 7 July 2007 public advertisements in the three newspapers. DOC decided to grant that company the right to file a late expression of interest on the basis of DOC's failure to send the email of 4 July. [39] The plaintiff's claim with respect to the expression of interest process rests upon the basic proposition that such a process must be subject to natural justice. This proposition is not "in issue" as far as the defendant is concerned. As it said, the plaintiff, like any other person who might be interested in obtaining a concession to land at Milford could potentially receive a benefit from this process and was therefore entitled to be treated fairly. I agree. The question is how this "fairness" needed to be reflected in the process for expressions of interest and whether DOC breached this principle of fairness as far as the plaintiff is concerned. [40] Firstly, and most obviously, all potential applicants (essentially the public) needed to be armed with the same information from DOC about the application process. It would be unfair if some potential applicants did not have important information about the process that others did possess. This could unfairly advantage one group as against another. It would fail to treat equals equally. (See Roussel UCALF Australia Pty Ltd v Pharmaceutical Management Agency Ltd [2001] NZAR 476 (PC)) [41] I am satisfied that DOC did provide essential information about the expression of interest process to some applicants which was not provided to theplaintiff and indeed not provided to a number of other potential applicants. The letter of 15 May 2007 contained vital information for potential applicants yet its distribution was limited only to those who had attended appointments with DOC on 15/16 May 2007. The letter was a comprehensive explanation of the principles and detail of the concession process. Attached to the letter was the Minister's invitation to apply for a concession and a document, intended to be a draft, of the concession conditions itself. Although some of the information contained in the letter of 15 May and its attachments had been distributed to historic users and interested parties (including the plaintiff) previously, it was not publicly distributed and it contained significant new information. [42] Of significance in the letter of 15 May was the following information: (i) a clear definition of what was on offer if a concession was granted, being a five year concession with a conditional renewal right for a further five years; (ii) The detail of the process from an expression of interest through to the grant of a concession; (iii) Identification of the newspapers in which the call for expressions of interest would be advertised, and the approximate date of the advertisements; (iv) The four knockout criteria for potential applicants:• The Expression of Interest and subsequent Application must be lodged on time.• The Applicant must clearly identify one packet under application only.• Applicants for more than one packet will be rejected• The Applicant must provide evidence that the operation and pilots are compliant with all Civil Aviation Authority rules and regulations.If the above four matters are not clearly complied with, then the application will not progress in the process and the application will be unsuccessful.(v) it identified in detail the criteria for applications for concessions including what applicants would have to address and on what they would be assessed. [43] Finally, the letter said:ƒ A Fair Process This allocation process also acknowledges that there are non historical users that may wish to regularly land aircraft at Milford Sound and does not preclude their application. The department's legislation does not recognise or provide for incumbents. While the criteria is designed to offer concessions to the "best" operators as described above, those new comers to the industry to (do?) have an opportunity to obtain a concession. It is considered that this process is the most appropriate allocation process to run where it recognises the experience and strengths of traditional users yet does not disqualify new comers.9. ConclusionThe department has a duty to run an open, transparent and equitable process to allocate regular landing rights at Milford aerodrome. It is considered that the process designed and set out in this letter is the fairest process to undertake. It recognises the historical users, their strengths and experience, yet does not unfairly preclude an application from new operators. It is considered that the process developed is legally robust and consistent with our governing legislation and, one that will see an outcome that will contribute to the preservation of our natural resources and enhance our visitors [sic] experience to the park.[44] The detail of 15 May letter and its annexures was vital to air operators considering applying for a concession. Those who had the information, when expressions of interest were called for on 7 July, were considerably advantaged over those who did not have the information. The material contained important information upon which air operators could decide if they wished to be involved in the process and what might be needed to successfully apply. Vitally, it told those who received the letter, what the knockout criteria were (see [39](iv)). In particular, the letter told applicants that a failure to express an interest by the due date would be a knockout and it detailed when expressions of interest would be sought and where to look.[45] DOC's email of 4 July to the users group did advise historic users and interested parties, including the plaintiff (although not seen by it), that the advertisement for expressions of interest would appear in three newspapers on 7 July. The email of 4 July did not, however, contain other vital information from the 15 May letter. I note that this advance notice of 4 July was not generally published and those outside the users group would have had only the one advertisement to trigger an expression of interest. [46] Of particular importance to potential applicants, including the plaintiff, was the advice in the 15 May letter that failure to express interest on time was a knockout. The defendant says the disadvantage to the plaintiff in not knowing such a failure was a knockout was cured by the advertisement of 7 July, which invited expressions of interest. The defendant says the advertisement made it clear that there was a time limit for expressions of interest and inherent within such a time limit was that those who did not express interest in time would be excluded from the application process. [47] The advertisement itself (see [13]) said that expressions of interest would be "accepted before 9.00 a.m. Monday 16 July 2007". I reject the defendant's claim that the terms of the advertisement effectively removed any unfairness to the plaintiff in not seeing the letter of 15 May and in particular its identification of "knockout" factors. [48] The concession process involved applications to land at Milford by many whose livelihood is closely tied up with a continuing ability to do so. The 15 May letter had expressly identified what were knockout criteria. This was vital information to any applicant. Neither the advertisement nor any other information sent to the plaintiff expressly identified that a failure to comply with the time limit was a knockout. It was not made clear to potential applicants that if they failed to express interest by 9.00 a.m. they could not apply. This was especially important given this was only an invitation to express an interest, essentially no more than a way of obtaining application forms for concessions. Without it being made expressly clear that there was a rather unusual time knock out at the expression ofinterest stage, potential applicants may well not have appreciated that time was vital at this preliminary stage. [49] I am therefore satisfied that by its failure to provide this essential information to the plaintiff DOC treated the plaintiff and indeed a number of other potential applicants unfairly and thereby failed to provide natural justice. [50] The defendant's breach of natural justice alone is sufficient to set aside the expression of interest process and for me to require DOC to begin the process again. [51] In those circumstances, it is not necessary for me to consider in detail the plaintiff's other complaints relating to the expression of interest process. However, I make these observations: (i) As I have said, all potential applicants should have access to the same information from DOC. In this case, at a minimum, DOC should have ensured, before expressions of interest were called for, that all potential applicants (not just those as identified by the users group) knew DOC had relevant information, which was vital to an application. DOC should have advised potential applicants where this information could be obtained and this public advice should obviously have pre-dated invitations for expressions of interest. (ii) The time for expressing interest from advertisement to "knockout" in this case was truncated and clearly favoured, unfairly, those who had been in regular contact with DOC. A considerably longer period would have been appropriate. Given the importance of the concession to air operators, and to the operation of Fiordland National Park, one advertisement was inadequate. Several advertisements spread over a month would have been more appropriate given this was the only chance potential applicants had to express an interest and thus the only chance to apply for a concession. Such a level of advertising would have been more in keeping with the importance of the occasion. Including the "local" paper, The Mountain Scene, asone of the papers, was also important. None of these "failures" identified in the advertising would, by itself, have been sufficient to satisfy me of a breach of natural justice. In my view, however, the inadequacies together meant those who had access to all the information before the one advertisement were unfairly advantaged over those who did not. [52] DOC may wish to rethink having a "knockout" expression of interest process. Counsel for the defendant could not suggest any reason why such a process was required. Perhaps, consistent with the plan, DOC may decide all that is necessary is to ask for expressions of interest in writing from potential applicants. Upon such an expression of interest an applicant would be sent an application for a concession. No time limit for an expression of interest would be required. A time limit for the filing of an application for a concession would be perfectly appropriate and indeed inevitable as part of a coherent plan for concessions. (See Wyong-Gosford Progressive Community Radio Inc. v Australian Broadcasting Authority (2003) 125 FCR 560, Combined Beneficiaries Union v Auckland City COGS Commission, HC AK, CIV-2005-404-6807 25 September 2007, Andrews J) The time limit for applications could be advertised well ahead. It is difficult to understand why there need be any time limit for an expression of interest intended merely as a trigger to obtain an application form.Late filing of expressions of interest[53] The plaintiff's second ground of attack on the expression of interest process relates to DOC's refusal to grant the plaintiff an exception from the "knockout" rule for its late filing of the expression of interest. The plaintiff bases its challenge to that decision on alleged breaches of natural justice, failure to take into account relevant factors and taking into account irrelevant factors and rigid adherence to a policy. The plaintiff also raises issues of predetermination, which I will deal with later in this judgment. Given my conclusions regarding the expression of interest process, it is not necessary I consider this ground of review. However, I do so briefly in deference to the plaintiff's case.[54] The defendant accepts that a decision as to whether to accept a late expression of interest is subject to natural justice principles. The decision maker must, therefore, only consider relevant, and should not consider irrelevant, considerations and should not apply rigid policy in deciding whether to accept a late expression. It must also act consistently (see Lemmington Holdings Ltd v Commissioner of Inland Revenue [1984] 2 NZLR 214).. [55] The defendant's evidence was that, in deciding not to accept late filing, it took into account: (i) that the period of notice of the invitation to express an interest was 11 days, with the background that Alpine Choppers was expecting such an invitation to be issued. DOC viewed this period as ample time to send what it identified as a simple email expressing an interest in involvement in the process. As I have previously observed, if lateness of expression of interest was to be a knockout then, in terms of its significance, such an invitation had to be effectively treated as the application for a concession itself. DOC's interest, as a public body following its statutory obligations, was in obtaining applications from all qualified applicants to ensure the highest quality of operators applied for concessions. This required extensive advertising with ample opportunity to see the invitation. The defendant, therefore, should have seen the notice period of 11 days as truncated. The position of the plaintiff illustrated the point. It missed one advertisement in newspapers it did not read and was thereby unable to apply. (ii) Degree of lateness. The plaintiff was only a few hours late in expressing an interest, a factor in its favour. In contrast Wilderness Wings was three days late. Wilderness Wings was granted an exception because it was not sent the email of 4 July by DOC. This approach seemed to accept that relying solely upon public advertising was inadequate. While I am not convinced that in granting Wilderness Wings a late application, and refusing to do so for AlpineChoppers, the defendant necessarily failed to treat like applicants alike, there is force to the proposition that the difference between the two companies was minimal. Both were, as DOC saw it, at fault in failing to see the public advertisements. Wilderness Wings was further handicapped because it was not sent the 7 July email. However, Alpine Choppers was only five hours late compared with Wilderness' three days. (iii) Consequences for the plaintiff. The consequences for the plaintiff of not being able to express an interest is clearly of major significance to its business. The defendant says this factor had to be weighed against the prejudicial effect of allowing the late expression of interest on other applicants who had complied with time limits(see Wyong- Gosford Progressive Radio). Another potential applicant may have meant more competition and therefore the potential to affect the interests of others who had expressed interest in time. However, in this case, the actual competition for landing rights has been narrowed by DOC to competition for an individual packet of landing rights only. It was not known what packet the plaintiff would apply for and therefore it could hardly have been clear to DOC whether in fact there would have been any competition for the packet the plaintiff might seek. In Gosford, it was held that if there is a finite number of available licenses, so that applicants are effectively in competition for them, a concession to one applicant may affect the rights, interests or legitimate expectations of others. The facts of that case, however, concerned an actual application for access to radio wave band. In this case there was only an invitation to express an interest remote from the application itself. (iv) I agree with the defendant that status as a historic user by itself was irrelevant to the decision. (v) Finally, the plaintiff's case is that DOC, in deciding whether to allow late filing, should have considered the statutory criteria for grantingconcessions (s 17U Conservation Act) and those factors identified by DOC as pivotal to applications. The defendant submits that it was correct not to consider these factors as they apply only to applications for concession and not to the expression of interest process. I agree with the plaintiff that the defendant should, in the particular circumstances, have taken account of the s 17U criteria and the factors it had identified as relevant to the granting of concessions when considering this late application. Firstly, the process for granting concessions to fly into Milford is not an ordinary commercial tender. It is governed by a statutory direction and limitation. Factors outside those ordinarily considered "commercial" are, therefore, relevant to the granting of concessions. Secondly, given DOC chose to have a knockout process at the expressions of interest stage, it effectively converted the expression of interest process into the application for concession. DOC used the expression of interest process (because of its knockout time limit) as a way of limiting applications for concessions. I consider DOC was therefore obliged to take into account, when considering a late expression of interest, the s 17U factors and its own criteria for applications for concessions. Here, the plaintiff appears to meet the criteria for a concession especially given his significant flying experience in Fiordland. This factor should have been important in deciding if the plaintiff's late application should be accepted. [56] On these grounds I would also have allowed the plaintiff's review and set aside the decision to refuse to allow its late application. I would have referred the late expression of interest back to DOC to allow it to reconsider the application based on the factors I have identified as relevant. I note the obvious strengths of the plaintiff's case to have its late expression of interest accepted.Other grounds of challenge to expression of interest process[57] There were other grounds on which the process for expression of interest and the decision not to accept the late expression of interest were challenged by the plaintiff. I consider the concept of predetermination, also a ground upon which the expression of interest process was challenged, in the next part of this judgment. I now consider the other two significant grounds of challenge. [58] The plaintiff complains that the concession process effectively overrode the statutory process (s 17T(1)) which obliges Ministerial consideration of every "complete application for a concession". The plaintiff says this statutory invocation was an important factor to be taken into account in deciding whether to allow a late expression of interest. The statutory provision does at least emphasise that the important step in the process for the consideration of a concession is the application itself. It illustrates the unwise and apparently unnecessary expression of interest part of the process in this case. [59] However, I agree with the defendant that s 17T does not give an absolute right to have every application for a concession immediately considered by the Minister. For example, s 17T(3) provides the Minister is not obliged to grant a concession if it would conflict with those factors set out in s 17U; s 17W(1) also empowers the Minister to decline an application if he considers it is not in accordance with any management plan; s 17ZG allows for a tender process for concessions during which individual applications, outside the tender process, might not be considered by the Minister. In this case, a type of tender process has been preferred. It would therefore have been inappropriate for the Minister to also have allowed an individual application for concession to be made outside the tender process. [60] The plaintiff identified two mistakes of fact ([17](iv)) which it says affected the following decisions: (i) the refusal to accept the plaintiff's expression of interest; (ii) the decision not to award the plaintiff a concession;(iii) the pre-determination that only 23 historic users would receive a concession. [61] Firstly, neither alleged mistake is in fact a mistake of fact. DOC identified and defined what it considered to be "historic users". It identified those companies, partnerships or individuals that flew in to Milford Airport during the 04/05 year. The plaintiff undertook flights into Milford Airport but not under the auspices of Alpine Choppers Limited. It did so under Alpine Helicopters Limited. Thus, in terms of the definition established by the defendant, Alpine Helicopters was an "historic user", not Alpine Choppers. The defendant was entitled to define "historic users" in any way it chose. Neither alleged mistake, therefore, was one. [62] Secondly, even if there had been mistakes of fact, they had no influence on either of the three pleaded decisions. There is no evidence that the fact the defendant did not identify the plaintiff as an historic user had anything to do with its decision to refuse to allow late filing of its expression of interest. As to (ii) and (iii) above, there has been no decision not to award the plaintiff a concession, nor as I set out below, is there any established pre-determination in this case. [63] Although the 23 packets of concessions were based on historic use, they are not based on who the historic users were. There is therefore no merit to this cause of action.Concession process[64] I now turn to the plaintiff's challenge to the overall process by which concessions to fly in and out of Milford Sound were to be awarded for at least the next five and possibly up to 10 years. The plaintiff's challenges here are essentially: (i) Predetermination. The plaintiff says before the application process got underway, DOC had determined that those whom it identified as historic users of the airport would each be allocated one of 23 packets of landing rights. I will return to this allegation later in the judgment.(ii) Historic user. I have already considered the circumstances under which the defendant took the view that the plaintiff was not an historic user. Whether the plaintiff should or should not have been categorised as a historic user is, in my view, relevant only with regard to the issue of predetermination. Categorisation as an historic user gave those who were so identified no additional rights or advantages, subject only to the allegations of predetermination. (iii) Unreasonableness. The plaintiff submits the decision by DOC to allocate the 23 packets of landing rights to DOC (historic?) users was itself "unreasonable". Given no decision on the application for concessions has been made by DOC, unless the plaintiff establishes predetermination, the allegation of unreasonableness cannot be successfully made. As there has been no such allocation of concessions the allegation based on the assumption a decision has been made (illegally and thus before the fact) must fail. [65] I turn, therefore, to the issue of predetermination. The first and most obvious impediment to this proposition is that the Minister has made no decision as to who will be a successful applicant. Secondly, given there seems to be at least 28 or 29 applicants with experience in flying in Fiordland, some of the 23 "historic users" may miss out. Those that miss out could hardly be said to have had their concession application predetermined. As to the plaintiff's claim of predetermination, the plaintiff's challenge to the concession process primarily relies upon the proposition that the structure for the allocation of concessions effectively predetermined that those who were historic users would be the successful applicants for individual packets of concessions. I reject that proposition. However, I accept that the way in which DOC ordered the allocation of concessions rather invited this complaint. [66] As I have recounted, DOC decided, consistent with its conservation obligations, that it should limit the number of aircraft landings at Milford Airport to the 04/05 level and invite applications for concessions to operate commercial flights from the airport. It identified that during the 04/05 year there were 23 operators operating commercial flights, each with a different size business. For futureconcessions DOC decided to divide the total number of flights allowed into 23 packets of concessions. The 23 packets on offer exactly matched the flight numbers of the 23 operators from 04/05. DOC said that each applicant for a concession could only apply for one packet. [67] The plaintiff says that, by itself, this process so closely matched the position as at 04/05 that it was clearly intended to ensure that those 23 historic users from 04/05 were allocated the new concessions. In support of this submission, the plaintiff points to departmental discussion papers, which illustrated that DOC encouraged existing historic users to apply for "their" package under the new scheme. [68] In a paper relating to the allocation of concessions to land at Milford, prepared for the Minister of Conservation by DOC's Acting General Manager Operations, the Department said:Uncertainty for existing operatorsThree operators felt threatened by the fact that they could be knocked out of Milford. They said they will either challenge the process or refuse to participate. These operators want us to just issue them concessions directly for unlimited landings. We fully appreciate these operators concerns and explained how existing operator skills sets are recognised in the process. We encouraged them to make strong applications and suggested that they only apply for their "packet" as this would reduce the likelihood of a competition.[69] In emphasising this the paper said:Applicants are asked to apply for one packet and will be personally advised of the packet that represents the number of landings they undertook at this time. Only if two or more applicants apply for the same packet will a contest be forced. The unsuccessful applicant(s) will be knocked out. Once 10 year concessions are in place the management plan provides for growth, or reduction, based on the visitor monitoring results. The future of the industry is, in this way, placed into the operator's hands.[70] And furtherThe agreed "line in the sand" of approximate 8000 landings has been divided up into packets of those historical landings undertaken by the 23 operators as at 1 April 2005. This was to recognise the historical market of each operation and prevent one operator from simply applying for all the landingsand knocking everyone else out of the industry. These packets are being confirmed with operators to ensure that they truly reflect their landings so that each individual existing operator will know exactly which reflects their historical packet. Applicants may apply for one packet. Given the management plan weighting towards existing operator skill sets we have explained to operators that if they apply for the packet which reflects their landings and no one else applies then, providing they meet the legal requirements to operate aircraft, they will get a concession subject to public notification. If a new operator wishes to land at Milford then they may apply for a packet. Only if they are superior at mitigating the effects of aircraft on the national park would they be able to gain a packet over an existing operator because they cannot score as high in "experience flying at Milford" as existing operators. This approach is being taken to make completely sure that the best operations will receive the landing rights, and to incentivise existing operators to reduce noise impacts as much as possible. A full contest will only be created should an existing operator challenge another existing operator. This would be a conscious business decision and would result in one operator being successful and the other being knocked out. From 1 April 2008, any operator who has been knocked out will not be able to operate at Milford. Legal advice strongly indicates that it would be entirely inappropriate, and challengeable, if we did not provide an opportunity for anyone interested in landing at Milford to at least apply and be considered. This process provides this opportunity while being weighted towards existing operator skill sets.[71] The perception of pre-allocation was reinforced in part by this paper. However, it is clear that there was a transparent process for selecting those to be granted concessions and that process illustrates there was no predetermination. The criteria for a successful applicant included such factors as the experience the applicant had in flying in Fiordland, the history of compliance with relevant "rules", how the applicant intended to limit any environmental effects of its flights, and a number of others ([28]). The process allocated points to each category. For example, under the experience of flying in Fiordland category the greater hours flown in the area the greater the points earned, up to a maximum of 10. Applicants were advised that they would be informed of the total points they had accumulated. The process, therefore, was "transparent" and allowed a successful applicant to be awarded a concession based on the criteria identified. [72] The process allowed applications by "new" applicants; that is those who had no experience of flying in Fiordland. Given the criteria for granting a concession, anew applicant could only "beat" an existing user by scoring a sufficiently high number of additional points in the environmental mitigation effects section to overcome the deficit they would inevitably have on the experience of flying in Fiordland section. [73] Confusingly, however, the Department seemed to assume that the 23 "historic" users as at March 2005 would still exist in 2007 when applications were made. For a number of potential applicants that was not the case. To take the plaintiff's position as an example. In 2005 the plaintiff was landing and taking off at Milford through Alpine Helicopters. By 2007 it was doing so under its own name. In terms of experience of flying in the Fiordland area Alpine was an "historic user". However, it was not identified as an historic user by DOC as at March 2005 because it was not identified as a user under Alpine Choppers Ltd. Other historic user companies or partnerships since 2005 may also be differently constituted. The result is that at least 28 or 29 experienced Fiordland operators are applying for the 23 packets. The result will be that in some packets experienced companies will compete and one experienced operator will miss out on a concession. This will be especially severe given the unsuccessful air operator is prohibited from applying for another packet. [74] Prior to calling for concessions, DOC and the Minister recognised that not all 04/05 historic users would necessarily be successful in obtaining a concession. In a Departmental paper of 9 May 2007 Kevin O'Connor, the Conservator for the Southland region, considered a number of different options for the allocation of concessions. The alternative described as "C" is the system adopted. In commenting on this alternative, the Department said:This option does not presuppose that each of the historical operators would necessarily be granted back its historical usage. Instead; historical operator markets are used as a starting point in which to allocate the historical level of use as at 1 April 2005 back to the market place.[75] DOC also recognised that it might get more operators expressing interest in concessions than the number of concessions available. As to this, it identified that the Minister could face three possibilities given the reduction in the level of use back to 2005 figures. The paper identified that the Minister could have more operatorsexpressing interest than were regularly using the aerodrome as at 2005 or less or the same. As it has turned out there are more operators expressing interest than were operating in 04/05. This further illustrates that DOC had not predetermined what number of operators might be interested in applying. [76] This evidence, therefore, establishes; (i) There is a set of criteria which governs the granting of concessions; (ii) The criteria, understandably, favours those operators with experience of flying in Fiordland. It does not assume that only those identified as "historic users" have this experience. Actual flying hours in Fiordland is what counts. (iii) DOC recognised that "historic users" may well miss out on a packet of concessions. It recognised historic users may be competing against other historic users and/or "new" applicants. (iv) It allows for "new" applicants and identifies how they could "defeat" an historic user. [77] These conclusions illustrate there was no predetermination here. This is an open tender process based on logical and established criteria. While the allocation of concessions is based on historic information, it does not assume or indeed give any inappropriate advantage to historic users. [78] I reject this ground of challenge.Unreasonableness[79] Part of the plaintiff's claim of unreasonableness is based on the proposition that the plan developed by DOC would result in a well-qualified candidate missing out on an concession because a better qualified candidate competes for the same packet. However, a modestly qualified candidate could succeed in the absence ofcompetition for the particular package it has applied for. The decision challenged is therefore the Minister's decision to approve the process for the granting of concessions. [80] This anomaly arises, the plaintiff says, because of the decision to limit each applicant to applying for one packet only. This requirement is, the plaintiff submits, "unreasonable" and taints the whole concession process. I reject that claim. Even if the plaintiff's description of the potential for the process is accurate, the process is not reviewable on the grounds of unreasonableness. [81] The process developed by DOC for the allocation of concessions has its logic. It is based on reducing current commercial use to 04/05 levels. There is a logical set of criteria for choosing successful applicants. DOC was concerned to ensure that the landing right packets were a viable size (in a commercial sense), were allocated to those applicants who, amongst other traits, had a viable business and that the process did not create a monopoly. [82] To achieve these ends DOC chose 23 packets of concessions based on actual use in the 04/05 year. The 23 packets reflected viable commercial use of the airport at that time and therefore met the viable size criteria. [83] The limitation of applying for one packet only was designed to ensure no monopoly could develop. [84] It may be, as the plaintiff says, that this process will not deliver what is intended by DOC. It may be, as the plaintiff says, some experienced air operators will miss out on concessions. Given there now appears to be at least 29 experienced air operators compared with 23 in 04/05, this seems inevitable. It may be there are more effective ways of achieving the ends designed by DOC. [85] The Court's focus is, however, on irrationality and unreasonableness, not on "better" ways to achieve DOC's desired ends. The process developed by DOC, including the one packet per applicant condition, is neither irrational nor unreasonable. Its rationale is clear. It meets logical and credible ends; viablecommercial packets, the need for a viable business model and avoidance of a monopoly concessionaire. The plaintiff's real complaint is that it is not in favour such a selection process. [86] I am satisfied there are no grounds to review the decision to overturn this process based on irrationality or unreasonableness. [87] In summary therefore: a) The expression of interest process was in breach of natural justice. The expression of interest process must therefore be set aside. Assuming DOC wishes to proceed with the expression of interest process again, then DOC must ensure: i) All potential applicants have access to the same information about the expression of interest process and the concession process. ii) Comprehensive advertising of the invitation to express an interest. b) Although, given my conclusions in (i), a finding is no longer essential, I would have set aside the refusal to grant a late expression of interest and referred the decision back to DOC to reconsider in light of the factors I have identified. c) All causes of action relating to the application for concessions fail. [88] I leave the final form of the order for counsel. Failing agreement it may be referred to me.Costs[89] Counsel for the plaintiff has 14 days within which to file memoranda as to costs, the defendant a further 14 days in reply."Ronald Young J"Solicitors: Berry & Co, Queenstown, for Plaintiff Crown Law Office, for Defendant