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

COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) v MINISTER OF FINANCE and ORS[2020] NZHC 1012 [15 May 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-404-138[2020] NZHC 1012UNDER the Judicial Review Procedure Act 2016IN THE MATTER of the Overseas Investment Act 2005BETWEEN COROMANDEL WATCHDOG OFHAURAKI (INCORPORATED)ApplicantAND MINISTER OF FINANCE andASSOCIATE MINISTER OF FINANCEFirst RespondentsOCEANA GOLD (NEW ZEALAND)LIMITEDSecond RespondentHearing: 14 May 2020 (teleconference)Counsel: B O'Callaghan and R B Enright for ApplicantJ B M Smith QC, K G Stephen and K M Anderson for FirstRespondentsJ E Hodder QC and S E Kuper for Second RespondentRuling: 15 May 2020RULING OF SIMON FRANCE J[1] The primary proceeding is a judicial review scheduled for 8 June 2020. Itchallenges the decision of the first respondents under the Overseas Investment Act2005 ("the Act") to allow the second respondent to acquire properties in Waihi. Theland will be used to establish a tailings dam to support existing mining operations andfacilitate their expansion. This ruling addresses a challenge by the respondents to twoaffidavits recently provided by the applicant.1 The respondents are yet to file their ownevidence.[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 iswhether the Ministers, in assessing benefit, were correct to put to one side negativeand neutral impacts. The applicant contends that benefit requires a cost/benefitanalysis where "disbenefits" are weighed in the mix. It is common ground that thedisbenefits were not considered. In a recent decision in the same proceeding,Churchman J summarised the respondents' position this way:3The first respondents claim that the applicant has misunderstood their defenceand that they are not asserting that no alleged detrimental effects arise at all,but they deny that any alleged detrimental effects were a relevantconsideration under the Act. They say that the point put in issue is therelevance of the detrimental effects, not their existence.[3] Churchman J's judgment, issued 5 May, dealt with an application by theapplicant for further discovery. By way of background, there have been twoMinisterial decisions on the second respondent's application under the Act. The firsttime it was decided, the two Ministers disagreed, with the Minister of LandInformation (Hon Eugenie Sage) declining the application and the Associate Ministerof Finance (Hon David Clark) approving it. Unanimity being required, the applicationwas declined. However, the second respondent issued proceedings challenging thedecision. Those proceedings were settled with the outcome that the decision wasretaken by the present first respondents.[4] On the discovery application, the applicant had sought access to the materialthat was before the Hon Eugenie Sage when she made her decision declining thesecond respondent's application. The application was declined because the firstdecision is not of relevance to the present challenge. Churchman J further observed:4The Court will accordingly not be assisted by knowing what factors MinisterSage took into account and could well be distracted by being invited to1 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 connectionwith Oceana's application. The issue is not the correctness or validity ofMinister Sage's views on such matters. The issue is the legal one of thematters that were relevant in accordance with the statute which the Ministerswere 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 ofthe applicant. Her affidavit appends six documents. The first three are documentsreferred to, in footnotes, by the Hon Eugenie Sage when setting out her reasons fordeclining the application. The second group of documents are publicly availabledocuments. The first is an address by the present Prime Minister at a "One PlanetSummit". Mr O'Callaghan says it is relevant for establishing the importance to thepresent Government of climate change and the impact of any activity on theenvironment. The second document is a submission by a mining group on a Bill, therelevance of which is an acknowledgment by that group that mining has detrimentalenvironmental impacts. The third document is a public consultation document on theZero Carbon Bill.[7] Mr O'Callaghan explains that the applicant apprehends that the respondentsmay, if an error is established, seek to argue it was not a consequential error, and thataccordingly relief should be declined. The purpose of this evidence is to counter thatpossibility by establishing that there are detriments to the proposal that are of sufficientweight to mean the decision should be retaken. It had always been proposed to fileevidence on the issue of economic sustainability. It was hoped that the discoveryapplication would yield the material that could then be filed, but this affidavit, togetherwith one part of the next affidavit, is the alternative method.[8] The second affidavit is from an economist, Dr Ivo Bertram. He addresses threetopics. The first is the common understanding of the task of benefit analysis in projectevaluation, and most policy contexts. The proposition is advanced that the use of theterm benefit is invariably understood to mean net benefits, which includesconsideration 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 thebenefit to New Zealand required the decision maker to consider what would happenwith and without the overseas investment that is the subject of the application.5 In thissection of his affidavit, Dr Bertram says that this task, properly understood, involvesconsideration of the detriments. He then proffers his opinion on the correct answer tosuch an analysis applied to the present facts. The third topic is "sustainableeconomics" which Dr Bertram opines should be a relevant consideration. The balanceof the affidavit sets out why, in Dr Bertram's opinion, mining is not an example ofsustainable economics. This is the topic referred to by Churchman J in the passageabove 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 asbeing the same as the materials appended to Ms Delahunty's affidavit. If the Ministersare shown to have erred in the way alleged, this evidence establishes there are genuinesubstantive 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 showthat the interpretation advanced by the respondents is out of sync with theinterpretation commonly given to the word benefit.Decision[12] Issues were raised concerning the timing of the evidence. Because of thedecision 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 ajudicial review proceeding which involves an important but narrow issue. I refer to apassage from the judgment of Wild J in BNZ Investments Ltd v Commissioner ofInland 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] NZHC147.6 See this judgment, above at [4].7 BNZ Investments Ltd v Commissioner of Inland Revenue HC Wellington CIV-2006-485-697, 7December 2006.Ministry of Energy v Petrocorp Exploration Ltd,8 and an earlier decision of HammondJ in Wellington International Airport Ltd v Commerce Commission.9[15] This is an up-to-date reminder that judicial review is still intended tobe a comparatively simple process of testing that public powers have beenexercised after a fair process, and in a manner which is both lawful andreasonable. I read it as strongly endorsing what Hammond J said at [44] inWIAL [Wellington International Airport Ltd v Commerce Commission] aboutthe responsibility resting on Judges dealing with judicial review to narrow theissues, and reduce the material placed before the Court to the necessaryminimum.[14] I consider this proposition to remain a valid principle. Second, reinforcing thefirst, what is at issue here is the interpretation of a statute, and the meaning of anordinary word. The courts have long turned against the admissibility of expertevidence in relation to a task that is quintessentially a function of the Court. That isnot to say such evidence is never admitted, especially where the word or provision inissue 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 onewould expect it concerns an area where these consequences will not otherwise beobvious.11 Generally, however, it is not seen as necessary or appropriate to receiveexpert evidence on the meaning of a statute.[15] In my view, the present case engages both these principles. At issue is themeaning of an ordinary word in a statute that has been around for some time. Theissue is clear cut, as are the consequences of the interpretation taken by the firstrespondents. Here it means detriments such as impact on the environment are not seento 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 theCommerce Commission arena as an example of how benefit is assessed as meaningnet benefit. The difficulties with this are obvious. It is a different statute performinga specific function. Reliance on it opens up another topic of debate as to whether it is8 Ministry of Energy v Petrocorp Exploration Ltd [1989] 1 NZLR 348 (CA) at 353.9 Wellington International Airport Ltd v Commerce Commission HC Wellington CP151/02, 23 July2002 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 discussionin 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 materialto the Court's attention. That is the role of counsel. I also note the inevitable risks insuch evidence – the respondents will respond with evidence of their own, the applicantmay want reply evidence and an approaching fixture is threatened for little usefulreason.[16] The other purpose for which the evidence is filed is to buttress the claim forrelief, if an error is established. I first observe the evidence on economic sustainabilityis proffered notwithstanding the passage I have cited from Churchman J where thesubject matter is held to be not helpful. That aside, I am sufficiently confident that theprospect of withholding relief in this case is so remote that the evidence would notanyway be needed. If I am wrong in this relief point, it will always be open to the trialJudge to revisit the admissibility issue. I note that the position of the respondents onthis application is that the evidence is irrelevant. One would not therefore expectargument from the respondents that makes the evidence relevant.[17] The reality here is that if the applicant succeeds in its primary argument, thefirst respondents will have assessed benefit to New Zealand without having regard toone mandatory half of the equation – namely, the detriments attaching to such aproposal. Further what is proposed for the land is a tailings dam, which is a dam thatis used to store the usually highly toxic by-products of mining. I consider the prospectof an issue arising in relation to relief, should the applicant be correct, to be so remotethat the better course is to give precedence to the principle that evidence should beconfined.[18] These two conclusions address all the evidence contained in the two affidavitsexcept 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 whatshould have been considered as relevant to the "with and without the investment"options and what then should have been the first respondents' conclusion on thematerial. I do not consider the evidence to be relevant, which inherently means it isalso not substantially helpful.Conclusion[19] I uphold the objections and rule the evidence inadmissible. The costs of thisapplication are reserved, to be addressed as part of costs on the substantiveproceedings. As I am not allocating the hearing, for the benefit of the presiding JudgeI observe I am not aware of any features to suggest standard costs should not followthe event in the ordinary way but I have not heard argument on costs._____________________Simon France JSolicitors:K3 Legal, Auckland for ApplicantCrown Law Office, Wellington for First RespondentsSimpson Grierson, Wellington for Second Respondent