The promoters of the dam plan devised a swap whereby DOC would relinquish the required land in return for a bigger piece of land known as the Smedley Block that the dam promoters, The Hawke's Bay Regional Investment Company (HBRIC), would purchase and swap.
This land swap has always been crucial to the scheme. Without the right to inundate these two parts of the RFP, I'm told that any dam would contain less than one third of the capacity of the planned dam.
At that capacity, the scheme is simply not viable.
The legal barrier that has been hit by HBRIC could have been anticipated had a simple question been asked right at the beginning of the planning process.
DOC essentially administers two types of land, stewardship areas and conservation or specially protected areas.
Stewardship areas are fundamentally land for which no specific purpose has emerged and could become farms, towns, or as HBRIC intended, get flooded.
Specially protected and conservation areas are very different and are referred to in a 1987 Conservation Minister's speech as "land which is of such high value that it needs to be formally protected".
Had the 22 hectares required by HBRIC been classified as stewardship areas there would have been no problem and the intended swap would have been lawful.
However, HBRIC either didn't do its homework or was badly advised as the 22 hectares are conservation or specially protected areas.
This meant that the whole project was always going to depend on a fiddle by which the DOC would revoke the special protection status of the 22 hectares by which it presumably became stewardship land which could then be swapped for the Smedley block land.
Despite DOC noting that the 22 hectares possessed the "high values" that gave it its protected status, this is what was attempted.
The Court of Appeal essentially ruled that the series of decisions by which the status of the 22 hectares was downgraded, to the point that it could be swapped then submerged was unlawful.
The findings are those of Justice Helen Winkelmann and Justice Rhys Harrison, two of the best legal brains in the country. Justice Harrison, who wrote the decision, uses plain English so anyone can follow the arguments.
Justice Harrison observes that if this kind of sleight-of-hand is permissible, then no conservation or specially protected area is safe. If established, this precedent would jeopardise our most treasured landscapes.
As he puts it "Further, to allow the Director-General's decision would be to permit the territorial erosion of former forest parks in a way which defeats the statutory presumption of preservation and protection effected by the transitional provisions under s 61" (of the Conservation Act).
A decade or more ago when I was Labour Party President I was approached by a wealthy family who wanted to alter the flow of a river to construct a hydro electric power project. The obstacle in this case was just such a specially protected area.
Having approached the then Conservation Minister I was told that any attempt to get around this was a waste of my time. That hydro project never happened. It never will.
The only avenue now open to HBRIC is an Act of Parliament. Given the local concern over water quality and the Government's shaky majority, this is very unlikely.
The fact that this outcome was not foreseen as a possibility before huge sums of ratepayers' hard earned money was spent is a scandal.
Let's hope that the incoming Regional Council has the mettle to hold those responsible for this expensive mess to account.
Mike Williams grew up in Hawke's Bay. He is CEO of the NZ Howard League and a former Labour Party president. All opinions are his and not those of Hawke's Bay Today.
