Changes made to the Queenstown Airport Corporation's statement of intent nine days before the sale of 24.99% of shares to Auckland International Airport made public last July are at the centre of claims made by two parties seeking a judicial review of the decision, High Court documents reveal.
Air New Zealand and the Queenstown Community Strategic Assets Group Trustee Ltd (QCSAGT) are challenging the strategic alliance between the two airports, while the Queenstown Lakes District Council is also a defendant in the case, which is likely to be heard next year.
The Otago Daily Times has been granted permission by Justice Christine French to view all the court documents relating to the case, with the exception of an agreement referred to in an affidavit sworn by John Martin, of the strategic assets group, on August 15.
Both plaintiffs - Air NZ and QCSAGT - in separate claims which share common grounds, are asking the High Court to overturn the decision on the grounds that it was unlawful under various sections of the Local Government Act and that they and the public were not consulted and therefore deprived of the chance to be heard.
The three defendants - the QLDC, QAC and AIAL - deny this.
The plaintiffs claim the QAC's statement of intent was changed on June 29 by the QLDC - the sale of the shares, for $27.733,181.35, was announced on July 8.
Previously, the section on capital subscription read: "No capital injections from shareholders are expected in the current period", but it was changed to: "The company will consider the need for and sources of subscriptions as may be required."
Air NZ, in its claim, says even in its amended form this did not allow the share sale to go ahead, while the QCSAGT goes further, saying it did not empower the QAC to implement any such capital subscriptions "without authority properly given by the QLDC".
The QLDC's decision to change the wording had the effect of permitting the transfer of QLDC's ownership and control of the QAC and could not be done without proper consultation under the Act.
Consequently, amending the statement of intent was outside the powers of the QLDC and therefore null and void.
This is denied by the defendants.
Air NZ, in its claim, says it and its wholly owned subsidiary, Mt Cook Airlines, are the most substantial customer of the QAC, paying $4.34 million a year in landing and other related charges, while also employing 75 people in the Queenstown district.
It carries out 61 domestic flights a week into Queenstown (500,000 passengers a year) and another four international flights a week (47,000 passengers annually), contributing $2.24 million in passenger levies a year.
It also claims the QLDC, under the Act, has a policy on private partnership and the decision to sell the shares was "significantly inconsistent" with that policy.
The share sale was a "significant decision" and so there should have been a competitive tender process.
Air NZ is asking the court to declare the QAC-AIAL agreement unlawful; seeks an order restraining the QAC from increasing AIAL's shareholding; and also seeks an order for the QLDC to comply with the consultation process under the Act.
In response, AIAL says the council's decision was not one of the transfer of ownership or control of a strategic asset.
That decision was made by the QAC, which is a separate company and therefore it was not in any event a sale by the QLDC, so there was no requirement to enter into a competitive tendering process.
The QAC says the statement of intent did not prohibit the issue of shares to AIAL.
The plaintiffs are claiming relief, which is at the discretion of the court to grant.
A document filed by the defendants says that even if there were breaches (which are denied), the court should not exercise its discretionary powers to grant a remedy.
