Summary
A decision by a local authority to appoint a chair for a major council-controlled organisation was unlawful for failure to consider the relevance of knowledge of tikanga Māori.
Background
Watercare is the council-controlled organisation (“CCO”) responsible for providing water and wastewater services to Auckland. Auckland Council is the sole shareholder of Watercare, and is entitled to appoint its directors, that power being delegated to a Committee.
Section 57 of the Local Government Act 2002(“LGA”) sets out requirements for the appointment of CCO directors. Section 57(1) requires local authorities to adopt policies that set out procedures for identifying knowledge and skills in CCO directors generally. Section 57(2), meanwhile, requires that when appointing a director for a particular CCO, that the local authority is satisfied that the appointee has the necessary skills, knowledge, and experience to lead the organisation.
Section 57(3), introduced by a 2019 amendment to the LGA, states “[w]hen identifying the skills, knowledge, and experience required of [CCO directors], the local authority must consider whether knowledge of tikanga Māori may be relevant to the governance of that [CCO]”.
On 12 March 2024, Council staff reported to the Committee that Watercare needed a new chair. The staff identified that te ao Māori knowledge was a skills gap on the current board. This advice reflected wording from the Council’s overall CCO board member appointment policy, which described “knowledge of te ao Māori and established Māori networks” as a core competency for CCO directors.
Following this, the Committee nominated a selection panel, which considered a shortlist of four candidates including Person A and Mr Hunt. The panel recommended that Person A be appointed as chair, and recommended against Mr Hunt’s appointment. The judgment redacted the name of the recommended appointment, so this brief refers to them as Person A.
At the 25 June Committee meeting scheduled to consider the chair appointment, a councillor moved for Person A’s appointment, in accordance with the panel recommendation. However, another councillor moved an amendment that Mr Hunt replace Person A as the candidate (“Appointment Decision”). A majority of the Committee present and voting voted in favour, and the Council went on to announce his appointment as Watercare chair.
The plaintiff, an independent Māori board established under statute, filed judicial review proceedings against the Council
The case
The plaintiff alleged that the Appointment Decision was unlawful on three grounds. They sought a declaration to this effect, as well as orders setting aside the decision, removing Mr Hunt from his role as chair, and making the decision afresh.
First ground – Breach of standing orders
Standing Orders adopted by the Council under the LGA barred “direct negative” motions – those that, if carried, would have the same effect as defeating a motion. The Plaintiff argued that the Appointment Decision breached this rule, as it negated the purpose of the original motion (namely, to appoint Person A as chair).
The Court disagreed. In this case, the purpose of the motion was to appoint a Watercare chair, not to appoint Person A as chair specifically. The Appointment Decision achieved this objective, notwithstanding that it had substituted one candidate for another.
Accordingly, there was no breach of the Standing Orders and the first ground failed.
Ground2 – Failure to consider knowledge of tikanga Māori
The plaintiff argued that the Council had unlawfully failed to consider the relevance of tikanga Māori knowledge in the Appointment Decision.
The Council disputed this. They argued that while there was no direct consideration of tikanga Māori knowledge, s 57(3) had been met as “knowledge of Te Ao Māori” had been identified as a core director competency in the Council appointment policy and in the specific Watercare appointment criteria.
The Court rejected the Council’s arguments for two broad reasons.
First, the wording of s 57(3) clearly required consideration for each individual director appointment. Even if the overall appointment policy showed an expectation that the relevance of tikanga Māori knowledge be considered, this could not establish that such consideration had actually occurred.
Second, the Council had not in fact considered tikanga Māori knowledge at any stage. While they had considered the broader criterion of knowledge of te ao Māori (broadly translated at “the Māori world view), s 57(3) specifically referred to tikanga Māori (a narrower concept relating to rules, practices, and the right way of doing things within te ao Māori).
Knowledge of the former did not imply knowledge of the latter. Section 57(3) required the Council to give attention to knowledge of tikanga Māori specifically. As they had not done so, the Court upheld the second ground.
Ground3 – Significant decision in relation to body of water
The plaintiff argued that the Appointment Decision was a “significant decision…in relation to a body of water”. The Council had failed to consider the cultural and spiritual relationship of Māori to relevant bodies of water, in breach of s 77(1)(c) of the LGA.
While the Court did not reach a final decision on this point, it held that the Appointment Decision was probably not a decision to which ss 77(1)(c) applied. While s 77(1)(c) was likely to apply to many of Watercare’s strategic and operational decisions, the Appointment Decision related to governance, not to any specific body or bodies of water.
Result
The Court held that failure to consider the relevance of tikanga Māori knowledge rendered the Appointment Decision unlawful. The decision was set aside.
This means that the Council must make the decision again. However, in doing so, they are free to reappoint Mr Hunt, provided they comply with s 57(3) in doing so. Mr Hunt was re-appointed 3 months after his original appointment and one month after the High Court made this judgment.
This raises legitimate questions about the merit of the proceedings.
Litigants in dispute with public bodies should view this case as an illustrative example that a win in court does not mean a good return on investment.
For further information on this case or similar issues, please contact Director, Brigitte Morten.
