AIR NEW ZEALAND LIMITED AND ORS V WELLINGTON INTERNATIONAL AIRPORT LIMITED HC WN CIV-2007-485-1756

AIR NEW ZEALAND LIMITED AND ORS V WELLINGTON INTERNATIONAL AIRPORT LIMITED HC WN CIV-2007-485-1756 18 November 2008IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2007-485-1756BETWEEN AIR NEW ZEALAND LIMITED First Plaintiff AND AIR NELSON LIMITED Second Plaintiff AND EAGLE AIRWAYS LIMITED Third Plaintiff AND ZEAL 320 LIMITED Fourth Plaintiff AND MOUNT COOK AIRLINE LIMITED Fifth Plaintiff AND WELLINGTON INTERNATIONAL AIRPORT LIMITED DefendantCIV 2007 485 2221AND BETWEEN WELLINGTON INTERNATIONAL AIRPORT LIMITED Plaintiff AND AIR NEW ZEALAND LIMITED First Defendant AND AIR NELSON LIMITED Second Defendant AND EAGLE AIRWAYS LIMITED Third Defendant AND ZEAL 320 LIMITED Fourth DefendantAND MOUNT COOK AIRLINE LIMITED Fifth Defendant Hearing: 9 October 2008 Counsel: D G Goddard QC and L A O'Gorman for Wellington International Airport Ltd, in support D J Cooper for Air New Zealand Ltd, to oppose Judgment: 18 November 2008JUDGMENT OF WILD J Introduction[1] In a judgment on 24 April 2008, I struck out two of the three grounds for review advanced by Air New Zealand Limited (Air NZ) in the first of these two proceedings (CIV 2007-485-1756). [2] The basis for striking out one of those grounds was that it sought review on the basis that the decision of Wellington International Airport Limited (WIAL) to increase landing fee charges on 19 June 2007 ('WIAL's charging decision') pursuant to the statutory power in section 4A of the Airport Authorities Act 1968 ('the Act') amounted to monopoly pricing. I held that the Commerce Act 1986 regulates alleged monopoly pricing and therefore any allegation of such pricing and analysis thereof is the role of the Commerce Commission, not the Court by way of judicial review. [3] In the same judgment I refused WIAL summary judgment in the second proceeding (CIV 2007-485-2221) on the basis that the remaining, third ground for review, alleging predetermination, was to proceed to trial. Summary judgment was thus barred. I considered I was bound by the Court of Appeal's decision in Waipa District Council v Electricity Corporation of New Zealand [1992] 3 NZLR 298, reinforced by the House of Lords' decision in Wandsworth London Borough Council v Winder [1985] AC 461 as followed by Master Venning in this Court in Dunedin Airport Limited v Mt Cook Group Limited & Anor (HC DUN CP34/96, 10 October 1996).[4] Both parties have appealed my judgment. The appeals are for hearing tomorrow, 19 November. [5] Notwithstanding its appeal, Air NZ filed a second amended statement of claim ('2nd ASoC') on 12 August. Having inspected WIAL's discovered documents, Air NZ abandoned its surviving cause of action, alleging predetermination. It repleaded the two causes of action I had struck out, and added four new ones. There was brief discussion at the hearing as to the legitimacy of Air NZ's repleading the grounds for review already struck out. Mr Cooper assured me that Air NZ re- pleaded those grounds only against the event of Air NZ's appeal succeeding. [6] By application filed on 20 August, WIAL applies to strike out the whole of Air NZ's 2 nd ASoC, essentially on the basis that the four new causes of action comprise allegations of monopoly pricing masquerading under judicial review labels. In short, WIAL's argument is that strike out should succeed because it is effectively the same application for review I struck out on 24 April. [7] Also on 20 August, WIAL sought leave again to apply for summary judgment, in the changed circumstances I have outlined, and on the ground that none of Air NZ's fresh causes of action is tenable. WIAL requires leave under r 138(2) because this is its second application for summary judgment. [8] I deal in turn with each of Air NZ's four new grounds for review as pleaded in the 2nd ASoC. The background to these grounds of review is set out in paragraphs [6] to [11] of my 24 April judgment.Second ground for review: WIAL's charging decision was unreasonable[9] Air NZ alleges WIAL's charging decision was unreasonable because no reasonable airport company would have set charges:• Without regard to the revenues it receives from all its commercial activities;• By attributing a value to its relevant airport assets of $247.8 million as at 30 June 2007;• Without providing an appropriate credit for unforecast revaluation gains;• By using a post-tax WACC of 9.3% and 9.5%, which exceeds WIAL's actual post-tax WACC; and• By forecasting zero passenger growth for 2008. [10] The particulars of this ground for review differ in two ways from the ground struck out in my 24 April judgment:• The deletion, from particular (b) to paragraph [22] of the 2 nd AsoC, of the words "which value is excessive and itself incorporates the monopoly earning potential of the assets"; and• Particular (f) to paragraph [22] of the (first) amended statement of claim has not been re-pleaded. That related to the unreasonableness of monopolistic pricing decisions. [11] In pleading this ground, Air NZ relies upon a judgment I gave on 16 June inAir New Zealand Ltd v Nelson Airport Ltd (HC NEL, CIV-2007-442-584). At paragraph [9] of that judgment, I held that Air NZ's pleaded grounds were 'process' grounds for review rather than the 'monopoly pricing' grounds I had struck out in the 24 April judgment. Air NZ now seeks to emulate its approach in Nelson Airport in these proceedings. [12] It argues that its pleading of unreasonableness is no longer based "in any way" on an allegation of monopoly pricing as it was in the 24 April judgment. Instead, the ground refers to five specific components of WIAL's charging decision making process, as detailed above. Mr Cooper contended that the five components demonstrate a gap in the logic of WIAL's decision-making process, rendering itirrational. Its new pleading is therefore strictly a 'process' ground of review as perNelson Airport. [13] WIAL rejects this, arguing that this ground is not new, but instead essentially derives from that ground struck out in my 24 April judgment. That is because the only reason the decisions made in the five specific components are allegedly unreasonable is because they resulted in returns exceeding normal returns i.e. in monopoly profits. For example, WIAL's attribution of a value to its relevant airport assets of $247.8 million as at 30 June 2007 could only be unreasonable if that attribution led to monopoly profits. Thus, assessing the unreasonableness of the process, as represented by the five specific components, is necessarily dependent on assessing the unreasonableness of the outcome – monopoly profits. That is precisely what I refused to entertain in the 24 April judgment. [14] Moreover, WIAL argues that it will set a bad precedent if Air NZ's 2nd AsoC is not struck out. In future, any refusal to entertain review of level of charging decisions because they are properly dealt with by the Commerce Commission could be circumvented by repackaging the issue to seek review of the factors behind the charging decisions. This is artificial, since WIAL's charging decision remains the core issue in dispute, notwithstanding that it is not mentioned in the pleading. [15] WIAL argues that discussion of the factors behind a charging decision will inevitably draw the Court into an examination of the charging decision itself, because the reasonableness of the factors affects the reasonableness of the decision. Since the Court struck out the reasonableness ground when it was based on WIAL's charging decision, it should also strike out the reasonableness ground now that it is based on the factors behind that decision. [16] In Nelson Airport I drew the following distinction between that case and the pleadings in these proceedings as they stood when I gave my 24 April judgment:[61] Third, I accept that the 4 th and 5 th grounds differ significantly from the second cause of action I struck out in my 24 April 2008 judgment in Air NZ v WIAL, on the basis that it involved an allegation of monopoly pricing. These two grounds challenge NAL's charging decision as unreasonable and substantively unfair because of:(a) NAL's refusal to optimise runway width; and (b) NAL's inclusion of the $1.2 million capex for acquisition of houses in the airport's noise zone. [62] As Mr Gedye submitted, those are two discrete matters. I accept they are amenable to review.[17] My view is that the particulars of the pleading of unreasonableness in Nelson Airport are not similar to those here. The particulars in Nelson Airport are assessable in their own right. For example, Nelson Airport's decision to refuse to optimise runway width, involves assessing whether a reasonable airport company would have optimised width of the runway. [18] By contrast, the reasonableness of, for example, WIAL's attribution of a $247.8 million value to its relevant airport assets is not assessable in its own right. Only if WIAL's charging decision is unreasonable, does that value attribution also become unreasonable. If Air NZ had no concern with WIAL's charging decision, it would hardly have any concern with the factors behind that decision. Divorced from the decision, those factors lose any context necessary for sensible analysis. [19] Consequently, I accept WIAL's contention that, notwithstanding the absence of monopoly pricing terminology, any analysis of the pleaded particulars relevant to this ground will involve analysis of whether WIAL's charging decision is reasonable. As such, the reasoning in my 24 April judgment remains pertinent:[41] The particulars given are all assertions of monopoly pricing – prices in excess of those which would be reasonable. They repeat the particulars given under paragraph 21, with one addition. [42] Testing WIAL's charges against the standard of 'reasonableness' would not, in practical terms, be a different exercise from determining whether WIAL's charges breach s4A, because they result in monopoly profits. Both exercises would involve the Court undertaking a task which the case law establishes is for the Commerce Commission and not for the Courts.[20] Notwithstanding the way it has re-pleaded its case, Air NZ's concern is with WIAL's charging decision itself, rather than the process leading to it. That concern may be legitimate, but it is not amenable to judicial review.[21] Air NZ points to Nelson Airport as authority that the exercise of a public power which is purely statutory necessitates the public law remedy of judicial review. It seeks to distinguish the Privy Council's decision in Mercury Energy Limited v Electricity Corporation of New Zealand [1994] 2 NZLR 385 and that of the Court of Appeal's in Lab Tests Auckland Limited v Auckland District Health Board and ors [2008] NZCA 385, contending that judicial review was not available there because contracting decisions were involved: the public bodies were effectively operating in a private law setting. [22] Mercury Energy and Lab Tests are indeed distinguishable as involving attempts to challenge essentially "private" contracting decisions, but Nelson Airportis also distinguishable, for the reasons I have outlined. As I explained, in [32]-[39] of my 24 April judgment, referring in particular to the Court of Appeal's judgment inVector Limited v Transpower New Zealand Limited [1999] 3 NZLR 646, the complexity of analysis that would be required here is beyond this Court's expertise. The Commerce Commission is the appropriate body to deal with Air NZ's concerns. [23] Air NZ's complaint that it has no right to appeal from the Commerce Commission's determinations is a valid one. It was the genesis of the Commerce Amendment Act 2008, creating a new Part 4 of the principal Act. Section 52Z now allows appeals to this Court against the Commission's input methodology determinations for the types of prices prescribed by the Commerce Act or by Order in Council. It is just such input methodologies that Air NZ seeks to review in these proceedings. In the future, there will be a right of appeal against them, and this Court can sit with two lay members contributing the requisite expertise. [24] That amending legislation reinforces my view that this ground is not an appropriate one for judicial review. [25] This ground for review is struck out.Third ground for review: WIAL's charging decision was substantively unfair[26] The particulars of this ground replicate those of the unreasonableness ground, with the additional allegation that WIAL's charging decision was made:In circumstances where it had agreed with Air NZ and other airlines during the consultation process that it would set charges that "seek to earn a 'normal' return and no more".[27] For three reasons I strike out this ground also. First, the same reasons that I have just given for striking out the 'unreasonableness' ground apply to this ground a fortiori. The necessary corollary of analysing the particulars pleaded under this head is to analyse the 'substantive unfarirness' of WIAL's charging decision itself, even more so given the nature of the additional particular. Mr Cooper argued it was the combination of the five components of WIAL's charging decision that is the core issue. Each component is not necessarily unreasonable in its own right, but in concert they create a substantively unfair result. [28] As with the ground of unreasonableness, I see no way of divorcing analysis of each component from analysis of WIAL's charging decision itself. For the reasons already outlined above, this is a determination that should be left to the Commerce Commission. It is not a ground which this Court can or should entertain. [29] Second, assuming it once was, I do not consider "substantive unfairness" remains an independent ground for review in New Zealand. The genesis of "substantive unfairness" as an independent ground of review was the judgment of Cooke P in Thames Valley Electric Board v NZ Forest Products Pulp & Paper Ltd[1994] 2 NZLR 641 (CA). As I understand Cooke P's judgment, he saw the ground as providing flexibility to the Court to address administrative abuses that might otherwise go unchecked; it would be available to applicants notwithstanding that a decision did not meet the Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 test for unreasonableness. [30] Although the Court in Thames Valley agreed that more than simple unfairness was required before the Court would intervene, each Judge expressed a different view as to what more would suffice. The disparate approaches are summarised in the following passage in Joseph's Constitutional and Administrative Law in New Zealand 3rd ed. 2007 at p 941:Cooke P observed that a court might review the adequacy of the consideration given to a matter and of the reasoning employed, while McKay J suggested the need to prove an element of improper motive or a breach of contract or representation. Fisher J added that a plaintiff would need to identify some "specific and principled administrative law basis for intervention", such as unheralded inconsistency with known past policies or practices, departure from assurances given, mistake, misrepresentation or improper motive.[31] McGechan J added overdue synthesis to the developing concept in Taiaroa v Ministry of Justice (HC WN CP99/94, 4 October 1994) at p 67:In short, the procedure may be marginally adequate – eg through barelysufficient regard had to mandatory considerations – and so not be open to review in itself. Likewise, the decision may be marginally adequate – eg not irrational, although surprising – and so not open to review in itself. However, when both are added together, and the exercise viewed as a whole, it may be considered "something has gone wrong" which "requires" intervention(essentially the so-called "innominate ground"). I have, with respect, absolutely no difficulty with that. It is not a case of adding two zeros and attempting to get more than zero. It adds one small doubt to another and says "neither by itself would be enough, but taking all together, it is too much to allow". ()(McGechan J's emphasis) [32] I employed this 'combination' approach in Shaw v Attorney-General [2003] NZAR 216:[114] I consider that is exactly the position here: the unacceptable combination of a suspect procedure culminating in a surprising decision. Differently expressed, I simply cannot regard what occurred before the Visiting Justice on 23 June 2000 as "fair play in action". I believe that phrase was first used by Harman LJ in Ridge v Baldwin & Ors [1963] 1 QB 539 at 578. It has often been repeated since, perhaps most famously by Lord Morris in Wiseman v Borneman [1971] AC 297 (HL) at 309 and, in a New Zealand context, Furnell v Whangarei High Schools Board [1973] AC 660 at 679; [1973] 2 NZLR 705 (PC) at 718. I repeat the phrase here because it captures so simply and well the very essence of judicial review.[33] Taiaroa and Shaw seem to have been the zenith of substantive unfairness in New Zealand administrative law. Mr Cooper submitted that the position remains unchanged, partly because the Court of Appeal has not departed from Thames Valley. I suggest the reason the Court of Appeal has not confronted the issue whether substantive unfairness exists as a separate ground of judicial review, is because it is no longer relevant. The Courts' increasing willingness to apply avariable standard or 'intensity' of review, removes the reason for substantive unfairness as a stand-alone ground, subsuming it into unreasonableness. The distinction between substantive unfairness and Wednesbury unreasonableness that Cooke P discerned in Thames Valley no longer exists. There is now a spectrum of review intensity under the head of unreasonableness. It ranges from the very high standard (or low level of intensity – true Wednesbury unreasonableness) applied by the Court of Appeal in Wellington City Council v Woolworths New Zealand Ltd[1996] 2 NZLR 537, to a much lower standard (or high level of intensity) characterised by judgments such as those of Winkelmann J in A v Chief Executive of the Department of Labour (HC AK CIV-2004-404-6314, 19 October 2005), Baragwanath J in Tupou v Removal Review Authority [2001] NZAR 696 and my own judgment in Wolf v Minister of Immigration [2004] NZAR 414, particularly at paragraph [47]. [34] In summary, I consider substantive unfairness has met an end, and is no longer a tenable stand-alone ground for review. [35] Third, even if I am wrong in that, substantive unfairness could not succeed. If substantive unfairness subsists independently of unreasonableness, it would lie parallel to a high level of intensity of review, given that was the gap it was intended to fill at the time of its inception. Yet, here, the content of WIAL's charging decision would necessitate a low intensity level of review: the commerciality of the decision is very high. This case is far more analogous to Wellington City Council v Woolworths New Zealand, than it is to the three immigration cases I referred to. [36] This ground, too, has no prospect of success. I strike it out.Fourth ground for review: WIAL failed to take into account relevant considerations when exercising statutory power[37] Paragraphs 28 and 29 of the 2 nd ASoC allege:28. Under sections 3,4A and 4B of the Act, it is impliedly necessary for WIAL to take account of the following factors when exercising its statutory power to set charges:(a) the revenues it receives from all its commercial activities; (b) unforecast revaluation gains realised in the period prior to the implementation of the Increased Charges; and (c) the pricing principles for monopoly businesses set out by the Commerce Commission, including those set out in its Final Report on the Part IV Inquiry into Airfield Activities at Auckland, Wellington and Christchurch International Airports dated 1 August. 29. WIAL failed to take these factors into account when setting the Increased Charges.[38] Thus, Air NZ's allegation is that the three factors listed are, impliedly, mandatory considerations. That acknowledges, in my view correctly, that they are not express mandatory considerations. Section 4A of the Act does not contain any explicit criteria which WIAL must take into account in exercising its price setting power. [39] I do not consider that any of the three alleged factors can be implied into the Act as mandatory when the s 4A power is exercised. I see nothing in s 4A giving any traction to such a submission. The point, already made, is that WIAL's charging decision involves significant commerciality. That tells against implying mandatory considerations. I see no support in the Act for such implication. [40] If a consideration is not mandatory then, subject to compliance with the aim or purpose of the Act, airport companies such as WIAL are free to base their s 4A pricing decisions on the factors they select as relevant, and to give each of those factors the weight they consider appropriate. Most often cited in support of this proposition is this passage in the judgment of Cooke J in CREEDNZ v Governor- General [1981] 1 NZLR 172 (CA) at 183:What has to be emphasised is that it is only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation that the Court holds a decision invalid on the ground now invoked. It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account if they had to make the decision.[41] I also accept Mr Goddard's submission that accepting the three alleged factors as mandatory relevant considerations would contradict the conclusion I reached in my 24 April judgment. I held that the Act does not require airport companies to seek no more than normal returns. To accept the three factors as mandatory considerations would be to accept, as implicit in the Act, the purpose of preventing monopolistic behaviour. [42] Although it is strictly unnecessary to go further, I comment on the three factors alleged to be relevant. Firstly, the revenues WIAL receives from all its commercial activities. If this were a relevant consideration WIAL would need to consult, under s 4B of the Act, with the operators of all commercial activities at Wellington International Airport. Yet s 4B is expressly limited to 'identified airport activities'. As defined in s 2, that excludes some commercial activities at the Airport, notably retail activities in the airport terminals. That is made doubly clear by the exclusion, from the s 2 definition of 'specified passenger terminal activities', of 'any space for retail activities'. [43] While the 'single till' approach to s4A price fixing could well be adopted, the scheme of the Act makes it clear that it is not mandatory. [44] Secondly, unforecast revaluation gains realised in the period prior to the increased charges being implemented. Not only is there nothing in the Act about this suggested item, but the evidence before me discloses that there was disagreement during the s 4B consultation process as to whether the building blocks pricing model developed by WIAL required unforecast revaluation gains to be factored in. Unsurprisingly, BARNZ (on behalf of Air NZ and other airlines using Wellington Airport) argued that it should. The expert retained by WIAL took the opposite view. If each of the opposing or differing views could reasonably and therefore legitimately be adopted, it cannot be wrong to adopt any one of them. [45] Third and last: the pricing principles for monopoly businesses set out by the Commerce Commission, in particular in its 2002 Airfield Activities Part IV Inquiry Report. WIAL rightly accepts that these principles are a relevant consideration for WIAL when exercising its s 4A power. But, again, there was nothing in the Act atthe time the impugned decision was made rendering those principles a mandatory consideration for WIAL. [46] WIAL makes the final point that it did take each of the three allegedly impliedly mandatory considerations into account before making its charging decision. It points to what it says is unanswerable affidavit evidence establishing that. It contends that Air NZ knows that full well, since it engaged, through BARNZ, in extensive correspondence and debate with WIAL on the three considerations during the consultation process. [47] Thus, WIAL's backstop position is that, even assuming the three considerations are mandatory ones, the evidence demonstrates that WIAL did take them into consideration. It makes the point that the weight WIAL gave to each of those considerations is outside the ambit of judicial review, as it effectively embarks upon merits review. I do not need to make a decision on these further submissions. I merely comment that, having been taken to the evidence (which is substantially the affidavit of Mr Basher sworn 11 September 2008, paragraphs 4 to 25), I consider the submissions are all well founded. If necessary, I would strike the fourth ground for review out on that basis.Fifth ground for review: WIAL breached Air NZ's legitimate expectation[48] This ground for review alleges that representations by WIAL to Air NZ gave rise to a legitimate expectation on Air NZ's part that, in exercising its s4A power, WIAL:• Would not seek to earn more than a "normal" return; and• Would act in accordance with previous judicial decisions including the arbitral award. [49] The representation which founds this ground for review was in WIAL's first pricing proposal of 12 February 2007:WIAL therefore agrees with the airlines that it must abide by the statutory requirements as interpreted by the judicial precedents which include the arbitral award.[50] I accept WIAL's submissions that this ground for review cannot succeed, and must be struck out. [51] Air NZ does not allege any decision by WIAL to depart from a 'normal' return, or from the judicial precedents. What founds this ground for review is a fundamental disagreement between the parties as to what is a 'normal' return for WIAL. The consultation process – no longer challenged – resulted in a pricing decision which WIAL claims gives it a 'normal' return, but which Air NZ alleges gives it an excessive return i.e. is monopoly pricing. Air NZ does not plead any expectation of outcomes on particular parts of the pricing process which differ from the decisions made by WIAL. [52] That leads me to a further difficulty with this ground for review. I have referred to 'outcomes'. New Zealand Courts will give effect to a legitimate expectation of a fair, or of a particular, process or procedure. But they will not enforce a legitimate expectation of any particular substantive outcome or result. This is contrast to the position in the United Kingdom, enunciated by the Court of Appeal in R v North East Devon Health Authority, ex parte Coughlan [2000] 2 WLR 622 at paragraph 57:Where the court considers that a lawful promise or practice has induced a legitimate expectation of a benefit which is substantive, not simply procedural, authority now establishes that here too the court will in a proper case decide whether to frustrate the expectation is so unfair that to take a new and different course will amount to an abuse of power. Here, once the legitimacy of the expectation is established, the court will have the task of weighing the requirements of fairness against any overriding interest relied upon for the change of policy.[53] In that case, the promise to a disabled patient of a 'home for life' was held to induce a substantive legitimate expectation. Coughlan was accepted in R v Secretary of State for Education and Employment, ex parte Begbie [2000] 1 WLR 1115, entrenching the United Kingdom's acceptance of the concept.[54] Shortly after Coughlan and Begbie, Ronald Young J in Talleys Fisheries Limited v Cullen (HC WN CP 287/00, 31 January 2002) stated (albeit obiter), at 48:Legitimate expectations to either procedural or substantive benefits can arise.[55] I did not need to confront the issue in Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107:[103] Accordingly, I find, as a matter of fact, that the plaintiffs had no legitimate expectation of obtaining a further 3 year contract to operate the BVIC. That makes it necessary to decide whether public law recognises a legitimate expectation to a substantive outcome. [56] However, I did note that no estoppel was available in public law because:[105] None of these estoppel principles can properly achieve anything in the public law arena that cannot now be achieved by invoking breach of a legitimate expectation. [57] That applied the House of Lords' approach in R v East Sussex County Council ex Parte Reprotech (Pebsham) Ltd [2002] 4 All ER 58, that, sinceCoughlan, there was no need for the concept of public law estoppel. Thus, althoughChallis did not accept the Coughlan approach, it left the door open for further development. [58] In Staunton Investments Ltd v Chief Executive Ministry of Fisheries [2004] NZAR 68, Gendall J came close to accepting the concept:[28] Historically, breach of legitimate expectation gave rise to a procedural remedy only and one could not have (or rarely have) a legitimate expectation of a substantive result or outcome, eg Lawson v Housing New Zealand [1997] 2 NZLR 474; and Attorney-General (NSW) v Quin (1990) 93 ALR 1, 24 (HCA) [29] In the end the basis for the doctrine has to be abuse of power so that it would be unfair to permit a Public Authority to depart from its promulgated policy or promise. The last passage effectively paraphrases the reasoning in Coughlan. [59] Since I have expressed the view that Air NZ cannot succeed on this ground for review, any further discussion of substantive legitimate expectation is well andtruly obiter dicta. However, it might be helpful if I summarise my view of the current New Zealand position:• A legitimate expectation(s) can arise when a public body makes an explicit representation to a person that it will not act unless it consults that person. That person then has a legitimate expectation of being consulted before action is taken. Any failure to consult is a reviewable error of law.• A legitimate expectation can also arise when a public body promises not to act in a certain way, but then sets about acting in just that way, significantly adversely affecting a person. An example is where a local body promises that construction of a new road near a person's property will not affect that property. The public body then needs to reposition the road, affecting the person's property. The public body has breached the person's legitimate expectation. [60] Central to all this is the question: what is the affected person's legitimate expectation? In Coughlan at [57], Lord Woolf MR offered this answer:There are at least three possible outcomes. (a) The court may decide that the public authority is only required to bear in mind its previous policy or other representation, giving it the weight it thinks right, but no more, before deciding whether to change course. Here the court is confined to reviewing the decision on Wednesbury grounds (b) On the other hand the court may decide that the promise or practice induces a legitimate expectation of, for example, being consulted before a particular decision is taken. Here it is uncontentious that the court itself will require the opportunity for consultation to be given unless there is an overriding reason to resile from it in which case the court will itself judge the adequacy of the reason advanced for the change of policy, taking into account what fairness requires. (c) Where the court considers that a lawful promise or practice has induced a legitimate expectation of a benefit which is substantive, not simply procedural, authority now establishes that here too the court will in a proper case decide whether to frustrate the expectation is so unfair that to take a new and different course will amount to an abuse of power. Here, once the legitimacy of the expectation is established, the court will have the task of weighing the requirements of fairness against any overriding interest relied upon for the change of policy.[61] New Zealand Courts accept outcomes (a) and (b). As to the latter, in the example I gave, the party does not have a legitimate expectation of a particularoutcome e.g. that its property will not be affected. It does have a legitimate expectation that, upon altering its roading plans, the public body will consult the party before proceeding further. [62] Thus, the Court enforces a fair process, but stops short of enforcing a particular outcome. That is obviously a softer position than that adopted inCoughlan and Begbie for the United Kingdom, but is in line with the position outlined, in my view correctly, by Randerson J in The New Zealand Association for Migration and Investments Incorporated v Attorney General [2006] NZAR 45. [63] A further difficulty with this fifth ground for review is that the evidence does not indicate detrimental reliance by Air NZ on the three matters alleged. As I have mentioned, there was robust debate, and ultimately fundamental disagreement, as to what constituted a 'normal' return for WIAL. WIAL made clear to Air NZ its interpretation of relevant judicial decisions and the arbitral award, and the consequence of its interpretation for the price fixing process. [64] Mr Goddard accepted that, while detrimental reliance is not necessary to establish breach of legitimate expectation, reliance simpliciter is. For all practical purposes, I cannot see daylight between the two concepts, and regard the difference as semantic. [65] Detrimental reliance is commonly, if not invariably, a feature of breach of legitimate expectation. In Talleys Fisheries at [48] Ronald Young J commented:Detrimental reliance upon representation is not essential but it is relevant. Absence of detrimental reliance will be rare. The principles of good administration prima facie require adherence by public authorities to their promises.[66] Similarly, Peter Gibson LJ in Begbie at 1124 observed:It is very much the exception, rather than the rule, that detrimental reliance will not be present when the court finds unfairness in the defeating of a legitimate expectation.[67] Delivering the Court of Appeal's judgment in R (Bibi) v Newham London Borough Council [2002] 1 WLR 237 Schiemann LJ at 246 commented: " the significance of reliance and of consequent detriment is factual, not legal". [68] Earlier, the Court in Bibi had indicated that an exception to the need to establish detrimental reliance would be where an agency sought to depart from an established policy in relation to a particular person. [69] Both Begbie and Bibi were referred to by Randerson J at [144] in New Zealand Association for Migration and Investments, though the Judge concluded that "it is not settled" whether detrimental reliance is a necessary criterion. I agree, but add that that breach of legitimate expectation will almost always require detrimental reliance. [70] This case is no exception. I do not accept Mr Cooper's submission that, instead of focusing upon whether Air NZ relied on any representation by WIAL, the focus should be on whether it was 'fair' for WIAL to depart from the approach it allegedly represented to Air NZ it would take. The issue of fairness is inextricably bound up with detrimental reliance: if Air NZ did not suffer from the alleged departure, then its claim for relief is unlikely to become airborne. [71] Lastly, as Mr Goddard submitted, in common with the other grounds for review, this one carries the marked risk that the Court will rapidly be drawn into considering the legitimacy of WIAL's charging decision itself, and thus into the legitimacy of monopoly profits. [72] For all those reasons, this ground for review also is struck out.WIAL's application for summary judgment[73] WIAL's application for summary judgment requires leave under rr 138(2) and 262, because it is a second application for summary judgment in the same proceeding. But for the Court of Appeal's decision in Waipa District Council, Iwould have given WIAL summary judgment in my 24 April judgment. The correctness of the course I took is for determination on appeal later this week. [74] WIAL's second application for summary judgment, in response to Air NZ's 2nd ASoC, does not face the same obstacle. Air NZ no longer pursues its predetermination ground, and I have struck out all its four fresh grounds for review. But WIAL's application is confronted by a different obstacle, namely that this Court lacks jurisdiction to entertain a second application for summary judgment in the same proceeding. [75] WIAL seeks leave to apply for summary judgment under rule 138(2):An application by a plaintiff must be made at the time the statement of claim is served on the defendant, or later with the leave of the Court.[76] Mr Goddard pointed also to r 262:262 Limitation as to second interlocutory application (1) A party who fails on an interlocutory application must not apply again for the same or a similar order without first obtaining the leave of the Court. (2) The Court may grant leave only in special circumstances.[77] Mr Cooper responds that case law establishes that the Court simply lacks jurisdiction to grant leave for the application. A decision on that jurisdictional point should precede any consideration of the merits, assuming jurisdiction is established. [78] Both parties refer to the decisions of Master Venning in Post v Ferrall (1999) 13 PRNZ 687 and Braid Motors Ltd v Scott (2001) 15 PRNZ 508. [79] In Post the plaintiff applied for summary judgment after a company defaulted on a loan. The application failed on a technicality, namely that the plaintiff could not proved its entitlement to rely on the personal guarantee the defendant had given on the company's behalf. The plaintiff discontinued that proceeding and filed a fresh one, again applying for summary judgment on exactly the same basis, but this time with the necessary affidavit evidence. Master Venning's starting point at 690 inconsidering whether he had jurisdiction to entertain the second application was to comment:It seems that it would be difficult to pursue a second application for summary judgment in the same proceedings where the first application has been declined.[80] The Master then considered that the predecessor to r 262 applied i.e. special circumstances were required before the Court would allow a second application. Such special circumstances encompassed fresh evidence, justifying a new trial under r 493(3)(a). But the Master at 691 rejected any suggestion that the evidence now before him was fresh:In the present case it could hardly be said that the evidence which the plaintiffs failed to adduce at the first hearing could not have been obtained with reasonable diligence for use at that hearing, and accordingly a second application for summary judgment in the original proceedings would likely not have been permitted. However, the situation before the Court is now that of a separate set of proceedings with a fresh application for summary judgment. Counsel were unable to refer the Court to any decisions where that issue had been directly considered before.[81] In the absence of New Zealand authority, Master Venning found guidance in the English Court of Appeal's decision in Fox v Fontana Holdings Inc 5/3/91 CA91/0216. The Master concluded at 692:In this case there is no issue of res judicata arising by reason of cause of action or issue estoppel. there is no abuse of process insofar as the Court is not faced with the prospect of two sets of proceedings extant before it. There is only one set of proceedings, the first proceedings having been discontinued. The application for summary judgment was not considered on its merits, but was dismissed on a technical ground. In those circumstances, in my view there is no bar to the plaintiffs in these proceedings pursuing a second application for summary judgment against the defendant. I accept it will only be rarely that such would be an acceptable course of action. It will only be where the plaintiff has failed on a technical basis in the first set of proceedings and where the merits of the case have not been adjudicated on. The plaintiff will also have had to discontinue the first set of proceedings and thus have subjected themselves to costs on those initial proceedings.[82] The Master entered summary judgment for the plaintiff and allowed it costs.[83] Master Venning reached a different result on the slightly different facts inBraid Motors. The plaintiff's application was adjourned, initially to permit the parties to mediate, and subsequently successively. When finally it came on for hearing it was declined on the ground of delay. The plaintiff's response was to file an amended statement of claim and a second application for summary judgment. This occurred some three years after the first application for summary judgment had been filed. The Master reiterated and elaborated upon his comments in Post:[53] I doubt whether there is jurisdiction to bring a second application for summary judgment in the same proceeding. The wording of r 138 "an application" contemplates there being one application for summary judgment by the plaintiff or defendant, either at the commencement of the proceeding (in the case of the plaintiff) or later with leave of the Court, or on the filing of the statement of defence (in the case of the defendant), or later with leave of the Court. In either case, however, the rule seems to contemplate only the one application for summary judgment by each party. [54] As a matter of principle successive applications for summary judgment ought not to be encouraged.[84] Then, at [58], after detailing the procedural history, including the plaintiff's second application for summary judgment within the same proceeding, the Master held:[58] There is no jurisdiction to bring such an application and it must be dismissed.[85] The facts here are something of an amalgam of those in Post and Braid Motors. As in Post, WIAL's first application for summary judgment effectively failed on a 'technicality', (if it is not disrespectful to refer to Waipa District Councilin that way). But, as in Braid Motors, the second application here is brought in the same proceeding. [86] I view the facts here as closer to Braid Motors than to Post. No question of delay arises here, but that was not the driver for Master Venning's decision in Braid Motors. Rather, his decision was founded on his interpretation of the relevant High Court Rules. I share the Master's interpretation. In short, the rules permit only one application for summary judgment by each party in any proceeding.[87] With some justification, WIAL may protest that its second application for summary judgment was merely a response to Air NZ filing its 2 nd ASoC, while its amended claim was still live before the Court of Appeal. These proceedings have certainly become convoluted. However, Air NZ's actions did not prevent WIAL from making a second application for summary judgment in a fresh proceeding. [88] I accept that the obstacle to my declining WIAL's first application for summary judgment no longer exists. WIAL contends that constitutes a material change in circumstances. That is irrelevant unless I have jurisdiction to entertain a second application, which I do not. The result, though perhaps Draconian and certainly less than satisfactory, is that the rules, and the somewhat sparse case law applying them, are squarely against my entertaining this second application for summary judgment. Accordingly, I decline leave under r 138(2). [89] As a matter of completeness, I note Mr Goddard's indication that WIAL would be willing to discontinue its appeal against my judgment refusing summary judgment on its first application. While that offer addresses the "two live applications" objection, it has no impact on the result I have arrived at.Result[90] All four grounds for review in Air NZ's 2 nd ASoC are struck out. WIAL's application for leave to apply again for summary judgment is declined.Costs[91] My tentative view is that WIAL should have a reduced award, reflecting its success on its more time consuming strike out application, but the failure of its application for leave again to apply for summary judgment. [92] If the parties are unable to agree costs, application can be made, but promptly please.Post script[93] After completing, but before delivering, this judgment, I was advised that tomorrow's hearing of the appeals from my 24 April judgment has been adjourned. I have not altered the judgment to reflect that adjournment.Solicitors: Buddle Findlay, Wellington for Wellington International Airport Ltd Bell Gully, Auckland for Air NZ Ltd & Ors