D'Esposito v Ministry for Primary Industries
[2017] NZHC 1464
•28 June 2017
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
CRI 2017-441-000014 [2017] NZHC 1464
BETWEEN ANTONINO GIOVANNI DʼESPOSITO
Appellant
AND
MINISTRY FOR PRIMARY INDUSTRIES
Respondent
Hearing: 20 June 2017 Counsel:
R B Squire QC for Appellant
S Manning for RespondentJudgment:
28 June 2017
JUDGMENT OF SIMON FRANCE J
Background
[1] This prosecution concerns the alleged illegal purchase of paua. The primary defendant is Mr Giancarlo (Joe) D’Esposito. He is alleged to have purchased the paua from an undercover fisheries officer. Mr D’Esposito and his brother Antonino (the appellant) are directors of a company called Hawkes Bay Seafoods Ltd. The transactions in issue occurred on the company’s premises and so Mr Joe D’Esposito also faces charges that he allowed the premises to be used for the commission of the alleged offences.
[2] Next, s 245 of the Fisheries Act 1996 (the Act), in summary form, provides that the acts of a director are deemed to be the acts of the company. So the company, Hawkes Bay Seafoods Ltd, faces the same 18 charges that Mr Joe D’Esposito does. The theory underlying those charges is that, by virtue of s 245, if Mr D’Esposito committed the alleged offences then because he is one of its directors, the company
must also be guilty.
DʼESPOSITO v MINISTRY FOR PRIMARY INDUSTRIES [2017] NZHC 1464 [28 June 2017]
[3] The other director, Mr Antonino (Nino) D’Esposito has also been charged with the same 18 charges. The prosecution theory is that another provision of the Act, s 246, works the same way. Just as s 245 makes the company liable for the acts of a director, so too s 246 makes any other directors liable for the offences of the company. So all three defendants face the exact same charges – Mr Joe D’Esposito as the alleged perpetrator, the company because it is liable for the acts of its director, and Mr Nino D’Esposito because as another director he is liable for the acts of his company.
[4] Mr Nino D’Esposito disputes this approach. He accepts that s 246 makes him, as a director, vulnerable to prosecution if the company has committed an offence. But he says he would not be guilty of the same offence as the company and should not have been charged that way. Rather, s 246 creates its own separate offence, and that is what he should he been charged with.
[5] If this main argument is correct then a secondary issue which arises is whether the prosecution should be allowed to amend the charges. If amendment is not permitted, then Mr D’Esposito should be discharged on the current charges. That is the remedy sought. As it happens, as regards most of the offending it would then be too late to lay further charges because there is a two year time bar.
[6] The District Court did not agree with Mr D’Esposito’s submission, and he
appeals.1
The section and the charges
[7] One of the charges Mr Joe D’Esposito faces is laid under s 233(1) of the Act which provides:
(1) Every person commits an offence who obtains any benefit by knowingly taking, possessing, receiving, procuring, processing, conveying, selling, or otherwise dealing with any fish, acquatic life, or seaweed otherwise than in accordance with this Act.
1 Ministry for Primary Industries v D’Esposito [2017] NZDC 3598.
[8] Accordingly Mr Joe D’Esposito’s charge reads like this:
On or about 4 January 2015, Mr Joe D’Esposito did obtain a benefit by knowingly receiving or otherwise dealing with fish, namely ordinary paua, otherwise than in accordance with the Fisheries Act 1996.
[9] As noted, the company is charged exactly the same way (ie identical wording), as is Mr Nino D’Esposito. The charging documents between each defendant have slight differences: the names are different, as is necessary, and the legislative references are different. The legislative references are as follows:
(a) Mr Joe D’Esposito – s 233(1) of the Act;
(b) the company – ss 233(1), 244 and 245(2) of the Act; and
(c) Mr Nino D’Esposito – ss 233(1) and 246 of the Act. All the defendants are, however, charged under s 233(1).
[10] Section 246 which is said to allow this type of charging against
Mr Nino D’Esposito provides:
246 Liability of directors and managers
(1) If a body corporate commits an offence against this Act, every director, and every person concerned in the management of the body corporate, also commits an offence if it is proved that—
(a) the act or omission that constituted the offence took place with the director's or person's authority, permission, or consent; or
(b) the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
(2) Every person to whom subsection (1) applies is liable on conviction to the appropriate penalty specified by this Act in respect of the provision creating the offence.
(3) A person may be convicted of an offence against this section even though the body corporate has not been charged with that offence or a similar offence.
[11] Mr Squire QC contends that rather than being charged as if he had committed a s 233(1) offence, the charge should properly be:
Being a director of Hawkes Bay Seafoods Limited which committed an offence against s 233(1) of the Fisheries Act 1996 in obtaining a benefit by knowingly receiving or otherwise dealing with fish, namely ordinary paua, otherwise than in accordance with the Fisheries Act 1996, Mr D’Esposito should have known the offence (was to be) or (was being committed) and failed to take all reasonable steps to prevent or stop it.
Legislative reference: Section 246(1) Fisheries Act 1996
[12] As noted, Mr Squire further submits the differences between the existing charge and the proper one are significant. Accordingly, it is not permissible to amend the current charge to a wholly new offence. Therefore, on the existing charges there should be a dismissal under s 147 of the Criminal Procedure Act 2011.
[13] At the heart of the issue is whether s 246 merely provides a different way in which a person can be guilty of one of the Act’s offences, or alternatively does it actually create its own separate offence.
Appellant’s submissions
[14] There has long been a provision such as s 246 in the fisheries legislation. The present s 246 was introduced in 1999.2 It represented a significant reworking of the existing provision. It is this change that Mr Squire submits altered the previous position and made s 246 an offence provision.
[15] The former provision provided:3
246. Liability of directors and managers – If any body corporate is convicted of an offence against this Act, every director, and every person concerned in the management of the body corporate, shall be guilty of a like offence, if it is proved that the act or omission that constituted the offence took place with the director’s or person’s authority, permission, or consent, or that the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps or prevent or stop it.
[16] Notable there is the statement that the director is guilty of a “like offence” to that of the company. This is accepted to mean “the same offence”. It is the absence of that terminology in the present s 246 that is relied upon by the appellant. Mr Squire further submits that the previous structure had unsatisfactory aspects that needed correction, and this is what lay behind the 1999 amendment. In particular, the former provision potentially imposed a conviction on a director for what on its face was an intentional offence even though the director may actually have lacked knowledge and only been negligent. This was unfair. Creating a separate offence for directors caught by this extended liability avoided the problem and ensured a fairer label.
[17] The appellant further submits that aspects of the wording of s 246 make it plain it is its own offence. The old s 246 had no penalty provision because it did not need one – the director was guilty of the same offence as the company, and the penalty was therefore whatever that offence carried. However the current s 246(2) now provides a penalty, and that is because it is its own offence.
[18] Next, s 246(3) says on its face that it is an offence:4
A person may be convicted of an offence against this section even though the body corporate has not been charged with that offence or a similar offence.
[19] Finally, it is submitted that within subs (3) two offences are being identified – the “offence against this section” (s 246) on the one hand and “that offence” on the other, which is whatever offence the company has committed.
Decision
[20] The wording of s 246 presents difficulties. Whatever interpretation one places on it, there will be counter indicia that cannot be readily explained away. There are inconsistencies however it is approached.
[21] I accept Mr Manning’s submission that it is instructive first to consider the place of s 246 within the Act. Part 13 of the Act is entitled “Offences and Penalties” and is then divided into six discrete sections:
(a) the first section is unlabelled but consists of only offences; thereafter each section has its own heading –
(b) proceedings, defences, etc; (c) evidence in proceedings; (d) penalties;
(e) minor offence procedure; and
(f) infringement offences.
Section 246 comes within the second section (b), and is not part of the offences section. Further, the penalties section prescribes penalties for all the offences in the Act. Section 246 is not mentioned within it and no penalty is provided for it. Mr Manning submits, and I agree, these features point away from s 246 itself being an offence.
[22] Turning next to the role of s 246, as Mr Squire accepts s 246 traditionally served the purpose of providing a further method by which a person other than the direct offender might be guilty of one of the Act’s offences. It expanded liability for existing offences rather than created a new offence. The current version of s 246 was
introduced by the Fisheries Amendment Bill 1998.5 The Explanatory Note
observed:6
Clause 43 repeals section 246 of the principal Act, and substitutes a new section. Section 246 relates to the liability of directors and managers of corporate bodies. The new section removes the requirement that a corporate body be convicted of an offence before the directors and managers can be similarly said to have committed an offence. The proposed section also
provides that if an individual referred to in subsection (1) commits an offence, then they are liable to the penalty that is prescribed in the provision that creates the offence (see subsection (2)). Subsection (3) provides that an individual can be convicted of an offence even if the corporate body is not charged with an offence.
The new section is based on section 217 of the Customs and Excise
Act 1996.
[23] There is nothing here to indicate that a new specific offence is being created. Rather, the inference is that the previous structure, whereby the director became guilty of the same underlying offence, appears to continue. That this was the intention becomes clear when regard is had to the section on which the new provision is said to be modelled. Section 217 of the Customs and Excise Act 1996
provides:7
217 Liability of officers of corporations
(1) For the purposes of this section, the term corporation includes a company, trust, partnership, or other enterprise.
(2) If a corporation commits an offence against any provision of this Act, every director, manager, secretary, officer, or agent of the corporation and every person purporting to act in any such capacity, who participated in, directed, authorised, acquiesced in, or assented to the act or omission constituting the offence also commits an offence against that provision.
(3) Every individual who commits an offence under this Act as provided by subsection (2) is liable on conviction to the penalty prescribed by the section creating the offence in respect of any individual who is convicted of the offence or, if no penalty is prescribed in respect of an individual, to the penalty prescribed for the offence.
…
The highlighted words are similar in their effect to the predecessor to s 246. The director, manager etc will be guilty of the same offence as the body corporate.
[24] The Customs and Excise Act 1996 is not alone in using this structure. Two other examples merit setting out as the role of these provisions, of which s 246 is
undoubtedly one, becomes clearer:8
7 Emphasis added.
(a) section 35 of the Dairy Restructuring Act 2001 provides:
35 Liability of directors and managers
(1) If a body corporate commits an offence under section 31, every director, and every person concerned in the management of the body corporate, also commits an offence under that section if it is proved that—
(a) the act or omission that constituted the offence took place with the director's or person's authority, permission, or consent; or
(b) the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
(2) Every person to whom subsection (1) applies is liable on conviction to the fine specified in section 31.
(3) A person may be convicted of the offence even though the body corporate has not been charged with that offence or a similar offence.
(b) and, s 74 of the Meat Board Act 2004 states:
74 Liability of directors and managers
(1) If a body corporate commits an offence under section 67(1), every director, and every person concerned in the management of the body corporate, also commits an offence under that section if it is proved that—
(a) the act or omission that constituted the offence took place with the director's or person's authority, permission, or consent; or
(b) the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
(2) Every person to whom subsection (1) applies is liable on conviction to the fine specified in section 67(1).
(3) A person may be convicted of the offence even though the body corporate has not been charged with that offence or a similar offence.
[25] There is no basis to consider that the rewording of s 246, although not as clear as these other sections, is not intended to have the same effect. Certainly there is nothing to support the proposition it was intended to represent a different approach to all these other provisions. The Explanatory Note suggests otherwise.
[26] As for internal contextual clues, points can be made either way in relation to each subsection. For example, the apparent intent of the provision could easily have been clear if instead of saying in s 246(1) that the director “also commits an offence”, the drafter had said also commits “that” offence.
[27] Section 246(2) gives rise to two matters. First, I do not accept the appellant’s proposition that the inclusion of a penalty provision, unlike in previous iterations of the section, is a sign that s 246 is intended to be a separate offence. The similar provisions just cited from other statutes all include a penalty subsection like s 246(2) even though it is clear in those provisions that the director is committing the same offence as the company. It seems the purpose is more for intelligibility than strict necessity. The second point is that the text of subs (2) –
is liable on conviction to the appropriate penalty specified by this Act in respect of the provision creating the offence –
suggests s 246 is not an offence provision. The applicable penalty is the penalty specified by the provision “creating the offence” – that is, s 246 is not creating the offence, some other provision is.
[28] It must be acknowledged that s 246(3) then immediately says exactly the opposite by talking about “an offence against this section”, which can only mean an offence against s 246. However, the next reference in the subsection is to the body corporate not needing to be charged with “that offence”. That cannot be a reference to s 246 because a body corporate could never be charged under s 246. If it is an offence provision, it imposes personal liability on a director. “That offence” must accordingly refer to the body corporate’s offence in s 246(1) which suggests that is what the first part of the subsection is intended to refer to. Overall, I agree with Mr Manning that the subsection reads more easily if “against this section” is read as “against this Act”.
[29] Finally as regards s 246(3) I accept Mr Squire’s point that the reference to “or a similar offence” supports his position. If s 246 is merely extending liability for the company’s offence to the director who becomes guilty of the same offence, it is hard to understand what “similar offence” is referring to. There do not appear to be any company only offences within the Act which might necessitate a search for a similar provision in order to hold a director liable. The purpose of “similar offence” is not clear, but in my view that lack of clarity should not influence the interpretation of the section. However, overall, I agree that subs (3), read in isolation, favours the proposition that s 246 is a separate offence.
[30] While the express wording of s 246 unfortunately does not make the role of s 246 as clear as the other examples cited, I am satisfied the intent and effect is that the director is guilty of the same offences as the company. Section 246 remains a section which merely extends the scope of liability for other existing offences.
[31] Concerning Mr Squire’s submission that there is a discord if a negligent director is convicted of a knowledge offence, it can be noted that the current s 246, when introduced, did in fact require actual knowledge on the part of the director. The words “or should have known” were only reintroduced at the Select Committee
stage.9 To the extent that creates a discord, it is a matter that can be addressed in
sentencing, although I accept this does not address the fair labelling concern.
Other matters
[32] A combination of ss 240 and 241 of the Act mean that for most offences the prosecution must only prove the conduct, and the defendant then has the onus of establishing a lack of fault. However, several offences, namely those requiring proof of intention or knowledge, are excluded from this regime. For those offences the
prosecution has the burden in the normal way.
9 Fisheries Amendment Bill 1998 (258–1) (Select Committee report) at ix.
[33] If s 246 were an offence provision, Mr Squire is concerned that it was not listed as one of the excluded offences and suggested this was a statutory oversight which the Court should correct. The simple answer, however, is that it is not an excluded offence because it is not an offence at all. That said, the prosecution accepts and I agree that the proof of the extra elements in s 246(1)(a) or (b) falls on the prosecution in the normal way.
[34] The other issue was amendment. This does not call for resolution because of the interpretation I have reached. For the record I consider the inclusion in the current charge of a reference to s 246 would have been sufficient to mean no prejudice arose from amendment.
Conclusion
[35] I agree with the conclusions of the District Court. No substantive change was intended by the 1999 amendment, and s 246 continues to have the same effect it always has. This effect is the same as that achieved in various other statutes by similarly worded provisions. Section 246 applies when a body corporate is guilty of an offence against the Act. Any director of that company will be guilty of the same offence if the director knew, or ought to have known, of the company’s offending.
[36] The appeal is dismissed.
Simon France J
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