Part 4: Our conclusions on the consultation process

Inquiry into the sale of Paraparaumu Aerodrome by the Ministry of Transport.

Public Works Act and Treaty consultation

Addressing the interests of former landowners

The Ministry believed that the rights of former landowners under the Public Works Act would be preserved by transferring the assets of the aerodrome to an airport company, formed under the Airport Authorities Act, and selling the shares in that company. Section 3A(6A) of the Airport Authorities Act would, the Ministry believed, protect the interests of former owners until such time as the purchaser of the airport company shares considered land to be surplus to requirements in terms of section 40 of the Public Works Act. The Ministry told us it was entitled to assume that any purchaser of the airport company would comply with its duties under section 40. For this reason, the Ministry considered it unnecessary to consult individually with any former owners of aerodrome land or to inform them of the proposed sale.

The Ministry had earlier expressly instructed DOSLI not to approach any former owner of aerodrome land. It responded to later inquiries about the sale by the one former landowner and one other party. But, other than advertising the proposed sale in local newspapers, it did not volunteer information about the sale to any other former landowner.

We do not question the faith which the Ministry placed, in the period leading up to the sale, in section 3A(6A) and the duties it imposed on the purchaser of an airport company. We also acknowledge that the Ministry acted on the advice of other departments in respect of the Public Works Act and the Treaty, and that it was cautious about taking any step which might unintentionally have triggered “offer-back” rights for former owners. However, we do not think the enactment of section 3A(6A) justified the Ministry taking no further steps to identify former owners of the aerodrome land and inform them of the forthcoming sale.

Ministry officials told us that they understood the distinction between the Public Works Act and Treaty interests, and the need to consider both. But, in our view, the decision to not inform former owners about the sale compounded the Ministry’s difficulties in meeting the Crown’s Treaty responsibilities. It was possible that a former owner of aerodrome land could have had interests under both the Public Works Act and the Treaty. Selling the land out of public ownership would not have affected Public Works Act rights, but it would effectively have placed the land beyond the reach of any claim to the Waitangi Tribunal seeking its return.

The Ministry would have been better advised, in particular, to have made more enquiries about the nature of the former ownership of the Ngarara West B blocks. Although the land would have had many owners listed, it was recognisable as Māori land and there would have been a good chance that individual owners were members of the same whānau or hapū. It is clear to us that the members of the Puketapu hapū regarded the land as belonging to the hapū, even though in law it may have been owned in many individual shares.

Had the Ministry taken this step at the time it received DOSLI’s report, the Ministry would have been likely to identify the hapū’s interests. That would have alerted the Ministry to the need to consult with the hapū in terms of its Treaty of Waitangi interests.

We also think the Ministry should have informed all previous owners (or their successors) of its sale intentions – including the fact that the Crown’s duties under the Public Works Act were to be transferred to the new owner of the airport company.

We have no doubt that Ministry officials communicated in good faith with the one former landowner, who had registered a concern about the aerodrome with the Ministry, and they took reasonable efforts to keep her informed of developments. The Ministry was clearly not responsible for any lack of communication between the one former landowner and other members of her whānau. However, it was open to the Ministry, at various points, to inquire whether the one former landowner was acting in her own behalf or as a representative of a wider group that may have had a Treaty interest. She did not identify herself as such until after the Puketapu representatives approached the Ministry.

Treaty consultation

The Ministry undertook the consultation by contacting those groups which had submitted claims to the Waitangi Tribunal in relation to Paraparaumu land. We understand that such an approach was acceptable at the time, and remains so.

There was a genuine attempt at consultation with Māori interests. Ministry officials thought at the time they had gone to considerable lengths to treat the claimants as fairly as they could, and to give them every opportunity to satisfy themselves of the position. But it appears to us that, after the initial round of consultation, the Ministry’s approach focused too much on the various claimants and did not take sufficient account of what they were saying about who was affected. The first response it received from Ati Awa Ki Whakarongotai made it clear that a whānau group was affected. Where an iwi has stipulated that the issue is one for a specific hapū or whānau to consider, or that hapū or whānau has itself raised the issue, the obligation to consult and take into account Treaty principles should include that hapū or whānau, unless it is unrealistic to do so.

In this case, the Ministry may have become aware of the hapū’s interest at an early stage, had it sought information about former landowners (see paragraph 4.5). During the Treaty consultation, the representatives of Te Ati Awa clearly indicated to the Ministry that Te Ati Awa believed there was a Treaty dimension to the hapū’s interests. The area of land was relatively confined, and only one hapū or whānau group was identified as having relevant interests. It may well have been realistic, therefore, for the Ministry to consult with the hapū, once it became aware that the hapū had an interest in the matter.

Surplus land

The officials who prepared the December 1994 report regarded the result of the consultation as that the land was “substitutable” in the event of a successful Treaty claim, and that there was no need to return it to any claimant. To them, once this had been established the sale could proceed.

But the Ministry was also clearly on notice, from its consultation with Māori interests in respect of the Treaty of Waitangi, that former owners wished to exercise their rights under the Public Works Act, and that land which was surplus to current operational requirements should be available for Treatyrelated compensation. One of the claimants, Te Runanga o Toa Rangatira Inc, noted in its letter of 23 November 1994 that the Ministry was an experienced airport operator and should be in a position to exercise judgement about surplus land.

Ministry officials told us that they did not accept that there was any need to consider the concerns which claimants expressed about wanting the land returned to them if the aerodrome ceased operating, nor the suggestions that they be able to tender for the aerodrome. But, in our view, the Ministry could have been more open to these concerns and suggestions. Had it been, it would have turned its mind to whether its proposed approach to the sale could be modified to meet or accommodate them.

We have a particular concern about the Ministry’s approach as regards surplus land. From our review of the files, it seems possible that some of the aerodrome land was, in fact, surplus to requirements long before the sale took place even though it had not been declared as such. We appreciate that the Ministry considered that offering any land back as surplus would be problematic and could “frustrate” ongoing operation of the aerodrome to the point where it would no longer be operable. However, we also note that:

  • The Ministry had been operating the aerodrome for many years. It was clearly in a position to form a judgement on what areas of land were required for operational purposes at that time.
  • As early as March 1990, the Government planned to identify surplus land holdings for “rationalisation” in preparation for corporatisation and sale.
  • Residences situated on aerodrome land (in Avion Terrace) had formerly been used by aerodrome staff but were now tenanted to members of the public.
  • Advice to Cabinet in September 1991 (in respect of the proposed transfer of the aerodrome to AHL) noted the need to “rationalise assets”; that there were “considerable areas of land … which the airport company is unlikely to need, perhaps up to 40% of the current area”; and that the valuation of the aerodrome assets should recognise “the higher alternative use value of the surplus land, in order that the company has a strong incentive to rationalise its land holdings”.
  • Further advice to Cabinet in April 1993 (which was not accepted) recommended that surplus assets be sold on the open market separately from operational assets.
  • The Information Memorandum for the sale left open the possibility of tenders being made for part or all of the aerodrome land.
  • The Ministry asked its valuers (EY) to prepare their valuation on the basis that some land (namely that proposed as surplus in the 1989 Landcorp proposal) should be valued on the basis that it could be surplus. The first group of tenders for the aerodrome were rejected on the basis that they took insufficient account of the net realisable (as opposed to going concern) value of that land (see paragraphs 5.49 and 5.53).

Ministry officials told us that they accepted there could be reason to believe that some land at the aerodrome was surplus to operational requirements. But they emphasised that no surplus land had in fact been identified. The question from their point of view was whether the Ministry was in a suitable position to decide about what land was in fact surplus. They told us that:

  • There was no practicable or reasonable way, in their view, of identifying land that was surplus and disposing of it separately from the core aerodrome business.
  • Although the Ministry had been operating the aerodrome for some years, it was effectively in a “caretaker” role and had no development plans for it. Government policy was that the Crown would not be involved in development projects. The preference was to sell the aerodrome as a going concern, so that the new owner could decide how it wanted to operate the aerodrome into the future. Decisions about what land was needed for aerodrome purposes would be part of that.
  • The 1989 proposal, which had been used to identify “surplus” land for the aerodrome valuation, had never been implemented.

Such case law as existed on the Public Works Act in 1995 required section 40 to be applied according to its “natural meaning” (Auckland City v Taubmans (New Zealand) [1993] 3 NZLR 361). Thus, if at any time the aerodrome land was no longer required for a public work, it would have to be offered back unless it would be impractical, unreasonable or unfair to do so (as section 40 stipulated).

It is not for us to form a judgement on whether the circumstances were sufficient, as a matter of law, to have required the Ministry to offer any part of the land back to a previous owner. We acknowledge that the Ministry considered that the judgement about surplus land was best left to a purchaser of the aerodrome, having regard to its own operational intentions, and that the Ministry saw limitations in the way the aerodrome could be used for settlement of claims, other than as a going concern.

But we do think the Crown could have considered whether the concerns which Māori had raised during the consultation process might be accommodated by making an arrangement as regards “surplus” aerodrome land – either within the sale process or otherwise. Instead, it seems that officials were concerned about the time it would take to identify and negotiate a solution to a valid claim – it being government policy to not retain assets indefinitely pending resolution of claims over them. An over-riding concern seems to have been to complete the sale before 30 June 1995, without leaving any residual responsibilities or risks in the Ministry’s hands.

We also note that the Ministry did not consider whether Māori or other former owners could be invited to tender for the aerodrome (either on their own or in conjunction with another group). Officials considered they were not in a position to do so, because, although the Cabinet directive to sell the aerodrome referred to “other local groups” as well as user groups, and was also expressly subject to fulfilling the Crown’s obligations under the Treaty, the Minister of Transport had instructed that the term “other local groups” should be confined to the Wellington airport company and the Kapiti Coast District Council.

We accept that, by the time the Puketapu representatives approached the Ministry, it would have been too late to consider whether any realistic tendering options were open to the hapū. But something might have been able to be done had the hapū’s interest been identified at an earlier stage.

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