Chief Executive, Ministry of Fisheries v Brace

[2007] NZCA 410

IN THE COURT OF APPEAL OF NEW ZEALAND

CA86/06
[2007] NZCA 410

AND BETWEEN             THE CHIEF EXECUTIVE, MINISTRY OF FISHERIES

Appellant

ANDMALCOLM JACK BRACE AND ARTHUR JACK BRACE

First Respondents

ANDCATCH HISTORY REVIEW COMMITTEE

Second Respondent

Hearing:29 May 2007

Court:Glazebrook, Robertson and Arnold JJ

Counsel:P A McCarthy for Appellant

First Respondents in person
S L Bacon and B J Marten for Second Respondent

Judgment:14 September 2007 at 4 pm

JUDGMENT OF THE COURT

AThe appeal is allowed.  The decision of the Catch History Review Committee is quashed.

B        There is no order for costs in this Court.

REASONS OF THE COURT

(Given by Arnold J)

Introduction

[1]       Broadly, this case concerns the way in which provisional catch history is calculated under the Fisheries Act 1996 (the Act).  In particular, it raises the question whether the Catch History Review Committee (the Committee) has jurisdiction to amend a fisher’s catch returns so as to include additional quantities of fish not originally reported in the returns, with the result that the fisher receives additional fishing quota.

Background

[2]       The first respondents (the Braces) are members of a family which has fished off the West Coast of the South Island for over 40 years. Over the period 1 October 1990 to 30 September 1992 (the “qualifying years” for the purpose of the Act) the Braces fished for crayfish.  To bait their crayfish pots they caught kahawai.  Some of this they reported in their catch effort landing returns, but most they did not.

[3]       The Braces said that they did not include the kahawai which they caught in their catch effort landing returns because they were confused as to whether or not they were required to do so.  There had been considerable confusion within the industry over the years as to whether fishing for bait required a permit.  The Braces had such a permit at one point, but the Ministry apparently took the view that a permit was not necessary.  It seems that the Braces were concerned that they might face prosecution for taking bait fish if they did not have a permit.  Also, if bait fish could be caught without a permit, it might be thought that they did not need to be reported.  In fact, however, the Fisheries (Reporting) Regulations 1990 required fishers to report their bait fish catch in their catch effort landing returns (regs 4 and 20 and Part 5 of Schedule 2).

[4]       It appears that a Ministry official advised the Braces orally that they should report their kahawai catch in their catch effort landing returns, but need not report it in the quota management returns which they were required to file. (Quota management returns cover species within the quota management system, whereas catch effort landing returns cover all fish.)  However, the Ministry refused to confirm this advice in writing.  Mr McCarthy, for the Chief Executive, argued that this incident is of limited relevance, however, as the evidence indicates that it occurred after the qualifying years.

[5]       In any event, the Braces did not include the kahawai which they caught in their catch effort landing returns, apart from relatively small amounts included in three returns in August, September and December 1991.  Mr Malcolm Brace did, however, write to the Ministry on 1 March 1994 in connection with a Ministry audit of non-quota species.  We reproduce the text of that letter in full:

Dear Mr Burnard,

In response to your audit on non-quota species and following our recent conversation we have attempted to give a conservative estimate on the amount of Kahawai used by our partnership under the bait license.

As you are aware, it was not a requirement to record bait catches in the CELR’s and apart from a few exceptions we have not done so.  I have enclosed for your interest copies of our correspondence with MAF on this issue.  It remains unresolved at this point in time.

It is impossible to be able to give exact dates that the set net remained in the water but Kahawai is the principal source of bait for our crayfishing.  We use freezing facilities out of season for bait storage and use this throughout the year.  We estimate that our Kahawai use is between three and four kilograms per pot (using two baits per pot) and have run our estimates at three kilograms.

The reasons for the apparent heavy use of bait in our area is due to the extreme numbers of sea lice here.  Bait does not remain intact 24 hours in this area.

Enclosed is a list of dates for the audit years and the amount of pots baited.  This is taken from our CELR records and all are in area 7.  The majority of these are for the fishing vessel ‘Gazelle’ and the few others for the fishing vessel ‘Owenga 8’.  All may be checked against MAF Nelson records.

Working as stated our estimate for the 1990 – 1991 year is 20.256 ton and for the 1991 – 1992 year is 19.275 ton.  Our estimate has remained low as we do use other species in conjunction with Kahawai for bait (sometimes running up to 4 baits depending on [the] quality of fish available).

Although we do at times catch Jack Mackeral, we do not target it and it is impossible for us to give any kind of estimate on quantities caught.

It is very unfortunate that this situation of little documentation has occurred and we can only say that our frustration must match yours.  There is however no argument that large quantities of Kahawai have been used by us for many years.

We hope that this is sufficient information for your needs.  Should you require any additional information please contact us at the above address or telephone [phone].

Thank you.

Chief Executive’s calculation of provisional catch history

[6]       Fishers were advised in 2003 that kahawai was to be brought within the quota management system.  Provisional catch history was the mechanism by which fishing quota was to be allocated (s 30(1)(as it then was)).  Section 34 provided:

(1)The provisional catch history of a person is, -

….

(c)In the case of any other person who is eligible to receive provisional catch history under paragraph (a)(i) or paragraph (a)(iv) of section 32(1) of this Act, the total weight of eligible catch reported in the person’s eligible returns in respect of a period of 12 consecutive months within the qualifying years relating to the person ….

(2)For the purposes of this Part and Part 15 of this Act, the term eligible catch means the total weight of all the catch of the relevant stock lawfully taken and lawfully reported as landed or otherwise lawfully disposed of by a person eligible to receive provisional catch history under section 32 of this Act during the applicable qualifying years; and also includes fish, aquatic life, or seaweed of that stock reported as taken and used as bait….

[7]       The Braces were eligible to receive provisional catch history for kahawai under s 32(1)(a)(iv) of the Act.  The relevant provisions of s 32 were as follows:

(1)If a stock is declared by notice under section 18 of this Act to be subject to the quota management system but the stock was not, immediately before the date of the publication of the notice, controlled by means of individual catch entitlements, a person is eligible to receive provisional catch history for the stock if the person -

(a) either, -

….

(iv)In any other case, held, at any time during any applicable qualifying year, a fishing permit issued under section 63 of the Fisheries Act 1983 for any species of fish, aquatic life, or seaweed; and

(b)….

and has provided the chief executive with eligible returns for the stock for the applicable qualifying year or qualifying years.

(2)For the purposes of this Part of this Act, an eligible return is a lawfully completed catch landing return or a catch effort landing return as referred to in the Fisheries (Reporting) Regulations 1990 that, -

(a)In the case of any stock referred to in subparagraph (ii) or subparagraph (iii), of subsection (1)(a) of this section, was given to the chief executive on or before the 15^th day after the close of each applicable qualifying year; or

(b)In any other case, was given to the chief executive on or before the 15^th day of October 1994.

[8]       The Chief Executive indicated that he proposed to treat the Braces as having provisional catch history of 281 kilograms in relation to kahawai in Quota Management Area 3.  This was on the basis that they reported in their catch effort landing returns during the qualifying period kahawai catches of 126 kilograms, 20 kilograms and 135 kilograms in the months of August, September and December 1991.  The Braces objected to this, on the ground that they had in fact caught much more kahawai during the qualifying years.  As the Ministry considered that only catch reported in their catch effort landing returns could be taken into account when calculating provisional catch history, it rejected the objection.  The result was that the Braces received quota of 281 kilograms of kahawai, although this was later corrected to 284 kilograms.

Catch History Review Committee

[9]       The Braces appealed under s 51 of the Act to the Catch History Review Committee against the allocation.  They said that the quantities of kahawai reported in their catch effort landing returns did not reflect their actual catches of kahawai in Quota Management Area 3 during the qualifying years.  Rather, the letter of 1 March 1994 indicated the true level of their catch. 

[10]     The relevant provisions of s 51 are:

(1)Any person, including the chief executive, may, subject to subsection (3) of this section and on or before the date specified for the purpose in the relevant notice under section 36 or section 41 of this Act, appeal to the Catch History Review Committee against, -

…

(iii)A decision of the chief executive as to the quantum of eligible catch reported in any eligible returns made by any person eligible to receive provisional catch history, on the ground that -

(A)The information on the relevant returns held by the chief executive has been incorrectly recorded by the chief executive; or

(B)The chief executive has excluded fish, aquatic life, or seaweed that was lawfully taken and lawfully reported in eligible returns from person’s eligible catch; or

…

(v)An allocation of provisional catch history that is different from the amount to which the person is entitled under section 34 of this Act.

[11]     The Committee allowed the Brace’s appeal and amended the relevant catch history returns.  Its reasoning is recorded in the following passages:

32.I have reached the conclusion that it does not offend against the provisions of the legislation to recognise the justification for amending the CELRs which were filed by the appellants during the relevant period to include the additional kahawai catches.  I am satisfied that the uncertainty as to MAF policy over permitting for the purposes of bait catching cannot be held against the appellants in this case.  The Ministry accepted that during the qualifying years it was not a requirement that those catching non-quota species for bait were required to have a permit for this purpose.  Indeed MAF told the appellants to continue to set net and catch kahawai – indeed target kahawai for bait purposes, but not target for sale.  The appellants complied with that instruction.

33.Although the appellants did not comply with the advice given by [a Ministry official] that although they did not need to report kahawai caught for bait purposes in their QRNs they should report in their CELRs, when pressed by the appellants to have that decision confirmed in writing the relevant MAF officer, Mr John Duffield declined to do so.

34.In the circumstances I am satisfied that without impunity the CELRs can be amended to include the best 12 months kahawai catch at 22,120kgs in accordance with the schedule completed by the Ministry advocate and Mr and Mrs Brace for the appellants on 22 August 2005 at the hearing.

35.It is my decision that the PCH for kahawai in Area 3 for the appellants should be adjusted from 281kgs as was allocated to 22,120kgs as now calculated in the way I have identified in this decision.  So the total increase of PCH, from the 281kgs originally allocated to the 22,120kgs now to be allocated, is 21,829kgs.  I direct therefore that this be the increase in PCH in KAH3 to be allocated to the appellants so their final PCH allocation in KAH3 is 22,120kgs.

High Court

[12]     The Chief Executive applied to the High Court for a review of the Committee’s decision.  MacKenzie J dismissed the application: HC WN CIV 2005‑485-1982 6 April 2006.

[13]     The Judge noted that in defining “eligible catch” s 34(2) does not use the term “eligible returns” as defined in s 32(2).  It simply provides that that the catch must have been “lawfully taken and lawfully reported as landed or otherwise lawfully disposed of”.  This includes fish “reported and taken and used as bait”.  The Judge identified the following two issues for decision (at [14]):

(a)       Is the reporting of the catch in the schedule supplied by the Braces to the Ministry in 1994 properly to be regarded as the “lawful reporting” of that catch, so as to bring the catch so reported within the definition of “eligible catch”?

(b)       If so, does the Committee have jurisdiction to amend the CELRs to include “eligible catch”, which was lawfully reported, but not in an “eligible return”, so as to bring that eligible catch within the provisional catch history under s 34?

[14]     As to the first question, the Judge said that it was a question of fact whether the catch was “reported”.  He said that the Committee had determined that that the catch had been reported when the Braces wrote to the Ministry in 1994 and that there was no basis on which the Court could disturb that finding.  On the question whether the reporting was “lawful” the Judge said that there was no suggestion that it was not.  Accordingly the Committee was entitled to treat the additional fish as falling within the definition of eligible catch, on the ground either that it was “lawfully reported” or “reported as taken and used as bait” (at [15]).

[15]     As to the second question, the Judge referred to the relevant grounds of appeal under s 51.  They were:

(a)Incorrect recording by the Chief Executive of information from the relevant returns (s 51(1)(b)(iii)(A));

(b)The exclusion by the Chief Executive of fish included in the relevant returns (s 51(1)(b)(iii)(B));

(c)An allocation of a provisional catch history different from that amount to which a person was entitled under s 34 (s 51(1)(b)(v)).

[16]     The Judge said (at [18]) that the existence of the third of these grounds of appeal suggested that there might be cases in which the provisional catch history as calculated was different from that under s 34, as a result of factors other than those covered by the first two grounds.  If the Committee could not amend returns it was difficult to see how it could deal with cases falling within the third ground unless the case also fell within one of the first two grounds. 

[17]     The Judge also referred to s 284(3), which provides:

The Committee shall not create or allocate provisional catch history in respect of fish, aquatic life, or seaweed unless it was actually taken and reported by a commercial fisher.

[18]     He said (at [18]):

Because the definitions of “eligible catch” and “eligible return” are necessarily limited to fish “actually taken and reported”, s 284(3) is otiose if the Committee has no power in respect of fish other than “eligible catch” reported in an “eligible return”.  Its inclusion suggests that there may be situations where the Committee may take actions having the effect of creating or allocating quota in respect of fish which was actually taken and reported, but which was not included in an eligible return.

Discussion

[19]     We say at once that we have considerable sympathy for the Braces’ predicament.  The fisheries legislation, both in its interpretation and in its administration, has proved difficult and has undoubtedly operated in a way that seems harsh in relation to at least some fishers.  To some extent, however, that is an inevitable consequence of moving from one fisheries regime to another.

[20]     We note also that when the Primary Production Committee reported to the House following its consideration of the Fisheries Bill, it said (at xvi):

Fishing industry [submitters] generally focused on the provision of a prescriptive, clear and logical mechanism for allocating quota, with separate provisions for allocations on the basis of catch history and Individual Catch Entitlements (ICE), and an appropriate appeal mechanism.  We are recommending several amendments to clarify the allocation process.

The Committee also noted that an increase in one fisher’s allocation may impact on the allocations of other fishers, in circumstances where the Crown does not have sufficient unencumbered quota to meet the increase (at xviii).  Finally, the Committee said (at xxi):

While there exists an obligation to record bait caught, by species, this obligation has not been consistently adhered to by fishers, or consistently enforced or interpreted by the Ministry of Fisheries.

The considerations raised in these extracts are relevant to the interpretative task before us.

[21]     We have concluded that the Committee did not have the power to amend the Braces’ catch effort landing returns in the way that it did.  Accordingly we consider that the appeal must be allowed and the Committee’s decision quashed.  Our reasons are as follows.

[22]     Under s 34(1)(c) the Braces’ provisional catch history was to be determined by “the total weight of the eligible catch reported in [the Braces’] eligible returns”.  Section 32(2) defined “eligible return” to mean “a lawfully completed catch landing return or a catch effort landing return as referred to in the Fisheries (Reporting) Regulations 1990 that [was given to the Chief Executive on or before the relevant date]”.  Section 34(2) defined “eligible catch” to mean “the total weight of all the catch of the relevant stock lawfully taken and lawfully reported as landed or otherwise lawfully disposed of ... and also includes fish, aquatic life, or seaweed of that stock reported as taken and used as bait.”

[23]     As we have said, the Judge considered that it was significant in the present context that the definition of “eligible catch” in s 34(2) did not use the term “eligible returns” as defined in s 32(2).  He also considered that the Committee was entitled to conclude that the estimate of the Braces’ kahawai catch during the qualifying period, which Mr Brace provided to the Ministry in his letter of 1 March 1994, constituted a lawful report within the language of s 34(2).  We do not agree with either point.

[24]     We note that s 51(1)(b)(iii)(B) refers to catch “lawfully reported in eligible returns”.  As a matter of linguistics, this suggests that there may be ways of lawfully reporting catch other than through eligible returns, and provides some support for the Judge’s approach.  Despite this, we consider that the phrase “lawfully reported”, read in the context of the statutory regime, means “reported in accordance with the procedures contained in the Act and Regulations”. 

[25]     The concept of “reporting” is fundamental to the operation of the statutory regime.  For the purposes of the legislation, fishers “report” by means of the various returns and reports that they are required to file.  Provisional catch history is determined by reference to “eligible catch reported in eligible returns”.  The use of the phrase “lawfully reported” in s 34(2) was not intended to broaden the range of mechanisms by which fishers could report their catch to the Ministry beyond those specified in the legislation.  Yet that is the effect of the High Court’s interpretation.

[26]     In short, then, the meaning of “lawfully reported” upon which the Committee’s decision was premised and which the High Court adopted would, if accepted, run counter to the scheme of the Act.  It would, as Mr McCarthy submitted, deprive the phrase of any real meaning.  It would mean that fishers could “lawfully report”:

(a)       Outside the timeframes contained in the Act and the Regulations;

(b)       In ways not contemplated by the Act or Regulations;

(c)By giving best estimates of their catch, rather than the contemporaneously assessed weights of fish actually taken. 

There is obvious potential for manipulation and uncertainty as a result of such an approach.

[27]     The same analysis applies in relation to the phrase “reported as taken and used as bait” in s 34(2), despite the omission of the word “lawfully”.  Under the Regulations, fish taken as bait had to be reported in the relevant returns.  The legislation did not contemplate “reporting” of the type accepted by the High Court in the present case even in relation to bait.

[28]     The Judge gave some weight to the way in which the appeal provisions are formulated.  He referred in particular to s 51(1)(b)(iii) and (v) and to s 284(3).  He said that, if the Chief Executive’s argument was right, it was difficult to see what could fall within s 51(1)(b)(v) other than the situations already covered by s 51(1)(b)(iii)(A) and (B).  We agree that it is difficult to discern the intended relationship between s 51(1)(b)(iii) and s 51(1)(b)(v).  We note, however, that on the Judge’s view of it, s 51(1)(b)(iii)(A) and (B) would be unnecessary as the situations with which they deal would fall within the more general language of s 51(1)(b)(v).  In other words, whatever interpretation is adopted, there appears to be some legislative redundancy.

[29]     As to s 284(3), the Judge said that the provision would be otiose if the Committee had no power in respect of fish other than “eligible catch” reported in “eligible returns”.  However, that provision can be viewed as simply making explicit what is implicit in the earlier provisions, namely that the Committee cannot create provisional catch history in relation to fish unless the fish is taken and reported in accordance with the mechanisms provided in the legislation.  In this sense, it is the “flip side” of the earlier provisions.

[30]     The Judge did not refer to s 292(1).  We consider that that provision supports the interpretation which the Chief Executive advances.  It provides:

The Catch History Review Committee may receive in evidence any statement, document, information, or matter that may, in its opinion, assist it to deal effectively with the matter before it, whether or not the same would otherwise be admissible in a court but, unless expressly otherwise provided in this Act, the Committee shall not receive in evidence any records or returns required to be provided under this Act or the Fisheries Act 1983 that either have not been provided to the chief executive or were provided to the chief executive after the date by which they were required to be provided.

[31]     The latter part of this provision underscores the importance of returns, duly filed, in the scheme of the Act.  We consider that it is inconsistent with this limitation that the Committee be able to amend returns years after the event to incorporate fishers’ good faith estimates of their catch in the qualifying period, even where, as here, those good faith estimates were provided soon after the qualifying period.

[32] We are reinforced in the view that we have reached on the statutory language by the considerations mentioned in the extracts quoted at [20] above from the Primary Production Committee’s report on the Bill. In particular:

(a)We accept that there is a need for certainty and finality.  We consider that the Act, as framed, does show a legislative intention to achieve certainty and finality, which would be undermined if we were to adopt the approach which the Judge upheld. 

(b)We recognise the need to take account of the interests of other fishers, who did comply with their reporting obligations and have received quota accordingly.  Their quota might be subject to downward readjustment (depending on conditions within the particular fishery) if revisions could be made on the basis of informal reporting.

(c)The interpretation adopted by the Judge may well itself create unfairness.  There may be others who could legitimately claim to have reported their catch of bait fish to the Ministry in some informal way, and so to be entitled to additional quota, whilst others, who caught bait fish legitimately but did not report their catch even informally, may miss out.  The point is that Parliament was obviously attempting to create clear entitlements under the Act by drawing lines.  Redrawing those lines does not eliminate unfairness - it merely redistributes it.

To these considerations we add that the Primary Production Committee also expressed the view that only lawfully completed and furnished returns should be used to calculate provisional catch history (at xvii).  We consider that that result is what the wording of the Act achieves.

Decision 

[33]     We allow the appeal.  The decision of the Catch History Review Committee is quashed.  In the circumstances, there will be no order for costs in this Court.  If there is any issue as to costs in the High Court, that should be dealt with by that Court in light of this judgment.

Solicitors:

Crown Law Office, Wellington for Appellant
Izard Weston, Wellington for Second Respondent