Decision reshapes expectations around Crown promises in asset sales
A New Zealand High Court ruling has clarified when ministerial assurances in major privatisations carry legal weight, and when they do not.
In Smiler v Attorney-General [2026] NZHC 375, decided on 27 February 2026, Justice Grice dismissed applications by Māori applicants and organisations, including the New Zealand Māori Council, seeking declarations that the Crown had breached assurances made during the 2012/13 mixed ownership model (MOM) proceedings for the partial privatisation of Mighty River Power Ltd, a state-owned enterprise.
The applicants argued that affidavits filed by then Deputy Prime Minister Simon William English and then Attorney-General Christopher Finlayson in November 2012 amounted to binding Crown commitments to progress Māori rights and interests in freshwater and geothermal resources. The applicants submitted the Crown received $4.2bn from the MOM share sales, a programme the Supreme Court allowed to proceed in 2013 in part on the basis of those assurances.
The applicants sought declarations that the Crown had breached those commitments, along with court directions requiring the Crown to prepare a scheme of safeguards for Māori water rights. They also sought a declaration that the Crown ought not to permit the grant of new or renewed take and discharge rights in catchments where such grants would prevent Māori from exercising their water rights.
Justice Grice rejected all claims. The court held the Crown assurances carried a limited meaning: they committed the government only to ensuring the MOM programme would not affect the ongoing freshwater reform process, not to systemic reform of water allocation or formal recognition of Māori proprietary interests in water. The court found the assurances did not amount to clear and unambiguous commitments and did not give rise to an enforceable legitimate expectation.
Justice Grice applied the doctrine of legitimate expectation, which requires an applicant to show a "clear, unambiguous and unqualified" promise before a court grants relief. Open dialogue and constructive engagement, without considerably more, does not satisfy that standard.
The court also upheld the principle of non-interference with parliamentary proceedings. The directions the applicants sought would require court-supervised policy development and would ultimately compel new legislation, falling squarely within the domain of Parliament and the executive.
The applicants drew on the Canadian Supreme Court decision in Ontario (Attorney-General) v Restoule [2024] SCC 27, where courts directed the Crown to repair treaty breaches under constitutional authority. Justice Grice declined to follow that approach, noting New Zealand had not adopted constitutional settings equivalent to those in Canada, including the indigenous and treaty rights protections under s 35 of Canada's Constitution Act 1982.
