Marlborough Aquaculture Limited v Chief Executive of the Ministry of Fisheries HC Wellington CIV-2009-485-500
[2011] NZHC 1934
•13 June 2011
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2009-485-500
UNDER the Aquaculture Reform (Repeals and
Transitional Provisions) Act 2004
IN THE MATTER OF appeals against an aquaculture decision under section 42 of that Act
BETWEEN MARLBOROUGH AQUACULTURE LIMITED, SANFORD LIMITED, SMW CONSORTIUM (GOLDEN BAY) LIMITED, CHALLENGER SCALLOP ENHANCEMENT COMPANY LIMITED, CHALLENGER FIN FISHERIES MANAGEMENT COMPANY LIMITED Appellants
ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES
First Respondent
ANDTASMAN DISTRICT COUNCIL Second Respondent
ANDGOLDEN BAY MARINE FARMERS CONSORTIUM LIMITED AND TE OHU KAIMOANA TRUSTEE LIMITED
Parties Appearing
CIV-2009-485-497
AND UNDER the Judicature Amendment Act 1972 (Part
1)
IN THE MATTER OF applications for review of the exercise of a statutory power of decision under section 43 of the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004
BETWEEN MARLBOROUGH AQUACULTURE LIMITED
Plaintiff
MARLBOROUGH AQUACULTURE LIMITED AND ORS v THE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES HC WN CIV-2009-485-500 13 June 2011
ANDTHE CHIEF EXECUTIVE, MINISTRY OF FISHERIES
Defendant
CIV-2009-485-506
AND BETWEEN SANFORD LIMITED Plaintiff
ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES
First Defendant
ANDTHE TASMAN DISTRICT COUNCIL Second Defendant
CIV-2009-485-514
AND BETWEEN SMW CONSORTIUM (GOLDEN BAY) LIMITED
Plaintiff
ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES Defendant
CIV-2009-485-519
AND BETWEEN CHALLENGER SCALLOP ENHANCEMENT COMPANY LIMITED First Plaintiff
ANDCHALLENGER FIN FISHERIES MANAGEMENT COMPANY LIMITED Second Plaintiff
ANDTHE CHIEF EXECUTIVE OF THE MINISTRY OF FISHERIES
First Defendant
ANDTHE TASMAN DISTRICT COUNCIL Second Defendant
Hearing: 14-17 February 2011 (Heard at Nelson)
Appearances: D Clark for Marlborough Aquaculture Limited
B Scott and A Kraack for Sanford Limited
J McRae and A Buchanan for SMW Consortium (Golden Bay) Limited
A Stallard for the Challenger companies
P McCarthy for the Chief Executive
J Ironside for the Tasman District Council
G Downing for Golden Bay Marine Farmers Consortium Limited
J Inns for Te Ohu Kaimoana Trustee Limited
Judgment: 13 June 2011
INTERIM JUDGMENT OF CLIFFORD J
Solicitors: Wisheart Macnab & Partners, Blenheim, for Marlborough Aquaculture Ltd
Chapman Tripp, Wellington, for Sanford Limited ([email protected], [email protected])
DLA Phillips Fox, Auckland, for SMW Consortium (Golden Bay) Ltd
Stallard Law, Nelson, for Challenger Scallop Enhancement Co Ltd and Challenger Fin
Fisheries Management Co Ltd ([email protected]) Crown Law, Wellington, for Chief Executive, Ministry of Fisheries
([email protected], [email protected]) Fletcher Vautier Moore, Nelson, for Tasman District Council ([email protected]) McFadden McMeeken Phillips, Nelson, for Golden Bay Marine Farmers Consortium
Limited ([email protected])
Oceanlaw, Nelson, for Te Ohu Kaimoana Trustee Ltd ([email protected])
Outline
Introduction .....................................................................................................................[1]
Background
A brief introduction to the statutory regime ........................................................[8]
The parties’ interests .........................................................................................[24]
Agreement that Aquaculture Decision made in error................................................[37]
The Scallop Model ............................................................................................[40] Ms Campbell’s evidence ....................................................................................[43] The expert witnesses .........................................................................................[47] The parties agree the Aquaculture Decision has to be remade ........................[50] Agreement on issues for initial determination ..................................................[54]
What the Aquaculture Decision involved....................................................................[59]
Scope of Court’s jurisdiction on this appeal ...............................................................[71]
UAE Test
Was the Chief Executive correct in applying a five per cent threshold of loss of catch as the level at which he could be satisfied that the undue
adverse effect test was reached? .......................................................................[75]
Correct interpretation of “satisfied” .................................................................[97]
What is the relevance of qualitative or contextual matters, such as
the relative economic value of fisheries, when applying s 40? .......................[107]
Was the Chief Executive’s assessment of cumulative effects wrong?
Overview of issues and factual background ................................................... [114]
Was the Chief Executive right to consider the possible adverse effect of an interim AMA by reference to its area, rather than by
reference to the area likely to be occupied by aquaculture activities? ...........[136]
Was the Chief Executive right to consider the possible adverse effects
of all the interim AMAs when making his decision about each of them? .......[150]
In assessing the cumulative adverse effects of previous aquaculture activities should the Chief Executive have taken account of aquaculture activities for which consents had been given, but where no aquaculture
activity had actually commenced? ..................................................................[157]
In assessing the cumulative adverse effects of previous aquaculture activities should the Chief Executive have disregarded the adverse effects of aquaculture activities underway at the time (1992) of
the quota management system to scallop fishing in SCA7?............................[160]
Buffer zone ...................................................................................................................[164] Ranking ........................................................................................................................[167] Pro rata ........................................................................................................................[169] Concluding remarks....................................................................................................[172] Introduction
[1] In December 2008 the Chief Executive of the Ministry of Fisheries (“the Chief Executive”), at the request of the Tasman District Council (“the TDC”), approved certain new areas of Golden and Tasman Bays for mussel farming. The appellants and judicial review applicants1 challenge that decision.
[2] The parties bring these proceedings pursuant to ss 42 and 43 respectively of the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 (“the Transitional Act”). Section 42 provides for a broad based merits review of the Chief Executive‟s decision. On such an appeal the Court may confirm or modify the decision appealed against or substitute its own decision. Section 43 provides for the more traditional challenge of judicial review under Part 1 of the Judicature Amendment Act 1972.
[3] Marlborough Aquaculture and Sanford challenge the Chief Executive‟s decision because none of the new areas in which they wish to farm mussels were approved.
[4] SMW Consortium challenges that decision because only three of the five new areas in which it wishes to farm mussels were approved.
[5] Golden Bay Marine Farmers Consortium Limited (“Golden Bay Marine Farmers”) appears as an affected party. The Chief Executive approved the new area in which it wishes to farm mussels. It defends the Chief Executive‟s decision.
1 Marlborough Aquaculture Limited (“Marlborough Aquaculture”); Sanford Limited (“Sanford”); SMW Consortium (Golden Bay) Limited (“SMW”); and Challenger Scallop Enhancement Company Limited and Challenger Fin Fisheries Management Company Limited (together “Challenger”). These proceedings originally involved separate appeals. Those separate appeals were consolidated by order of the Court (see Marlborough Aquaculture Limited v The Chief Executive of the Ministry of Fisheries HC Wellington CIV-2009-485-500, 13 August 2010). The separate judicial review proceedings were kept on foot, largely so that the relief of referral back explicitly provided by judicial review proceedings would be available. By agreement, the consolidated appeals and separate judicial review applications were heard together.
[6] Challenger represents scallop fishers in Golden and Tasman Bays.2 On their behalf Challenger says the Chief Executive should not have approved any new areas for mussel farming.
[7] Te Ohu Kaimoana Trustee Limited (“Te Ohu Kaimoana”) will eventually, pursuant to the Māori Commercial Aquaculture Claims Settlement Act 2004, receive an allocation of space in which to farm mussels if and when final approvals are given for that activity in the disputed areas. It also appears as an affected party.
Background
A brief introduction to the statutory regime
[8] These proceedings reflect a contest between fishers and marine farmers for space in Golden and Tasman Bays. It is helpful, from the outset, to understand something of the context of that contest.
[9] The introduction of marine farming activities into the coastal waters of New Zealand has been a long and complex process, no more so than in Golden and Tasman Bays, and the Marlborough Sounds. Territorial authorities, and the fishing industry, have struggled with a sequence of complex statutory schemes.
[10] At their heart, those schemes more recently have required persons proposing to establish marine farming, that is aquaculture, activities to obtain two forms of authorisation – coastal permits under the Resource Management Act 1991 (“the RMA”) and marine farming and spat catching permits under the Fisheries Act 1983.
[11] Under the RMA, decisions on applications for coastal permits involved consideration of a wide range of factors in terms of the actual and potential effects on the environment of allowing an activity. Under the Fisheries Act 1983, decisions on marine farming permits and/or spat catching permits involved a much more
focussed inquiry: the Chief Executive could not issue such permits unless he or she
2 Challenger originally commenced its proceedings on behalf of snapper fishers as well. At the hearing, Challenger abandoned those aspects of its proceedings.
was “satisfied that the activities contemplated by the application would not have an undue adverse effect on fishing or the sustainability of any fisheries resource”.
[12] There was considerable uncertainty as to the relationship between those two approval processes. That uncertainty principally involved the relationship between the Chief Executive‟s decision as to the adverse effect of the grant of marine farming permits on the sustainability of fisheries resources, and the more general sustainability issues that consenting authorities considered under the RMA when granting coastal permits.
[13] At the same time, the legislation struggled to deal with the competing interests of proposed marine farmers between themselves and with existing fishers.
[14] Applications for marine farming backed up around the country in the absence of an effective system to resolve these issues. The position became so fraught that in March 2002 the Resource Management (Aquaculture Moratorium) Amendment Act
2002 imposed a moratorium on the consideration of coastal permit applications under the RMA. A new regime was to be devised.
[15] That new regime (“the 2004 regime”) came into force on 1 January 2005. On
that date, the moratorium expired.
[16] In essence, the 2004 regime did away with parallel RMA and Fisheries Act permitting processes. Under the 2004 regime, the adverse effect decision, known as an “aquaculture decision”, required the Chief Executive to focus solely on the possible adverse effect that allowing aquaculture activities in a particular area would have on fishing. Issues relating to sustainability generally, and the sustainability of fisheries resources, would be made under the RMA. The 2004 regime therefore substituted a single planning process controlled by the relevant regional council but constrained to areas (“aquaculture management areas” or “AMAs”) previously approved by the Chief Executive in aquaculture decisions.
[17] An aquaculture decision constituted a determination or a reservation.
[18] A determination was a decision that the Chief Executive was satisfied that the proposed AMA would not have an undue adverse effect on fishing. A reservation was a decision that the Chief Executive was not so satisfied about the proposed AMA or parts of it.
[19] If the Chief Executive made a reservation, the reservation had to include whether it related to recreational, customary or commercial fishing.3
[20] If a determination was made as regards commercial fishing, the regional council could grant, normally by tender, authorisations for aquaculture activities in the AMA. An authorisation was a right to apply for a coastal permit to occupy space in a coastal marine area. The process of tendering for authorisations was seen as a way of resolving competition between intending marine farmers for rights to occupy coastal waters. The person who placed the highest value on that opportunity acquired the right to apply for the necessary coastal permits. Aquaculture activities, assessed as not having an undue adverse effect on fishing, could then occur without further reference to affected fishers. If a reservation as regards commercial fishing was made, that is a decision that new aquaculture activities in the relevant coastal area would have an undue adverse effect on commercial fishing, authorisations could then only be offered to persons who had entered into “aquaculture agreements” with the commercial fishers affected. Aquaculture agreements involved existing fishers agreeing, on negotiated terms, to the establishment of new aquaculture areas in existing fisheries. Aquaculture agreements were intended to provide for the consensual resolution of attempts by marine farmers to establish farms in areas subject to reservation.
[21] The Transitional Act provides, as reflected in its title, a scheme to provide for the transition to the 2004 regime. The scheme is complicated and difficult.
[22] In the latest chapter of the long saga relating to the development of marine farming in New Zealand, another set of comprehensive reforms have recently been introduced to Parliament in the Aquaculture Legislation Amendment Bill (No. 3)
2010. The explanatory note to that bill puts the position in simple terms:
3 Fisheries Act 1996, s 186H(2).
The current law is constraining the aquaculture industry‟s growth; no new aquaculture space has been created under the current (2004) regime ...
The current law provides that aquaculture activities can take place only within aquaculture management areas identified in regional coastal plans. This regime has not worked well because of its complexity and poor incentives for councils and industry to plan for and invest in aquaculture. The Bill removes the requirement for aquaculture management areas. This change normalises aquaculture within the Resource Management Act framework by enabling applicants to apply directly for a resource consent in any part of the coastal marine area, subject to the provisions of the relevant regional coastal plan.
[23] I think it is fair to say that the issues raised by these proceedings very much confirm the statement that “this regime has not worked well”. This Court is, in effect, being asked to make work a regime that Parliament has now acknowledged did not, in fact, work well at all.
The parties’ interests
[24] During the moratorium, that is, prior to the introduction of the 2004 regime, the TDC proposed and consulted on a new coastal plan. Each of Marlborough Aquaculture, Sanford, SMW Consortium and Golden Bay Farmers promoted various coastal marine areas to be – subject to the grant by the TDC of appropriate coastal permits – available for aquaculture activities. From November 1999 onwards that proposed plan was the subject of three separate reference hearings before the Environment Court. The Environment Court released its third and final report on the plan on 3 December 2004. Three general areas, each divided into a number of sub- zones, including those promoted by those appellants, were approved for aquaculture activities. The particular coastal marine areas the subject of these proceedings were described in that plan, and are referred to in this judgment, as:
a) 1 Waikato – subzones (a) and (b) – promoted by Golden Bay Marine Farmers; subzone (c) promoted – by Sanford; and subzone (d) – promoted by Marlborough Aquaculture;
b) 2 Purumakau – subzones (l), (m), (n) and (o) – promoted by SMW;
and
c) 3 Te Kumara – subzone (l) – also promoted by SMW.
[25] In early January 2005, and therefore very shortly after the 2004 regime came into force, each of Marlborough Aquaculture, Sanford, SMW and Golden Bay Marine Farmers applied to the TDC under the RMA for coastal permits to allow them to undertake aquaculture activities in the various subzones they had promoted. Those early applications were designed to secure priority, under the RMA, for those coastal permit applications. After a hearing before the Environment Court that objective was achieved. As I understand matters, subsequent legislation limited the effect of that judgment to those particular applications.
[26] TDC had now to bring the subzones under the 2004 regime. Under the Transitional Act, two steps were required. First, the TDC had to request the Minister of Conservation to recommend to the Governor-General to declare the relevant coastal marine areas to be “interim aquaculture management areas” or “interim AMAs”, as that term is defined in s 35 of the Transitional Act. The relevant Order in Council was made on 21 November 2005. Each of the subzones was made a separate interim AMA.
[27] Then the Chief Executive had to make aquaculture decisions in relation to each of those areas. Under the Transitional Act, and reflecting the fact that interim AMAs are not subject to the new approval processes of the 2004 regime that clarify responsibility for sustainability decisions, an aquaculture decision must not only consider the adverse effect of the interim AMA on fishing, but also its effect as regards the sustainability of fisheries resources (see s 40(a)). On 10 December the Chief Executive made one decision (“the Aquaculture Decision”) as regards each of those separate interim AMAs.
[28] In effect, as regards customary and recreational fishing and subject to one exception, the Chief Executive made determinations – that is he was satisfied the interim AMAs would not have an undue adverse effect. Those aspects of the Aquaculture Decision are not challenged and therefore are not referred to again in this judgment.
[29] The Chief Executive‟s decision as regards his consideration of commercial fishing interests, however, was more varied. The chart below shows the result of that decision, relative to the applications made:
Applicant IAMA Subzone(s) Aquaculture Decision
Marlborough
Aquaculture
1 Waikato (d) Reservation
Sanford 1 Waikato (c) Reservation
SMW Consortium 2 Paramakau (l), (m), (n), (o)
(l)
Reservation
Determination
Determination
Golden Bay Marine
Farmers
1 Waikato (a), (b) Determination as to 200 HA, reservation as to 205 HA
[30] Although the preliminary and final evaluation reports raised issues relative to both scallop and snapper commercial fishing, the Chief Executive made determinations as regards snapper fishing. The Aquaculture Decision is, as noted, now not challenged in that respect. But, he made a mix of determinations and reservations as regards the effect of the interim AMAs on scallop fishing.
[31] As required by s 41(2)(b) of the Transitional Act, the Chief Executive expressed those reservations by reference to the “stocks and areas” concerned in the following terms “Reservation because UAE on SCA7 (QMS stock)”. The term “UAE” is, obviously, an abbreviation of undue adverse effect. The reference “SCA7 (QMS stock)” reflects the fact that the scallop fishery in Golden and Tasman Bays is part of the quota management system area in which scallops are fished by holders of ITQ (individual transferable quota) known as SCA7. SCA7 is an important fishery and consistently provides the majority of the national scallop catch. SCA7 extends from Farewell Spit to West Head and takes in three main regions: Golden Bay, Tasman Bay, and the Marlborough Sounds.
[32] The Aquaculture Decision is, itself, a relatively brief document. It contains a summary of the reasons for the Chief Executive‟s decision. He noted generally that
he had exercised his judgment, based on what he considered the best information available. He analysed the factors which, at the end of the day, gave rise to reservations rather than determinations because of undue adverse effects on commercial fishing, namely the fisheries interests of scallop fishers.
[33] Although brief, that decision resulted from an extended period of interaction and consultation with relevant interested parties, including the preparation of both preliminary and final evaluation reports by the Ministry. All that material was provided to the Court.
[34] In addition, the Chief Executive prepared a decision maker‟s report pursuant to rule 20.15 of the High Court Rules (“the Decision Maker‟s Report”).
[35] In these proceedings, and reflecting the subzones they promoted for aquaculture activities and their extant coastal permit applications:
a) Marlborough Aquaculture says separate aquaculture decisions should have been made as regards each affected area. The Aquaculture Decision should be quashed and remade by the Chief Executive;
b)Sanford says the Chief Executive should have made a determination, not a reservation, as regards 1 Waikato (c);
c) SMW, whilst it supports the determinations made as regards 2
Purumakau (n) and (o) and 3 Te Kumara (l), says the Chief Executive should also have made determinations as regards 2 Purumakau (l) and (m).
d)Challenger, representing the existing scallop and snapper fishers, challenges each of the determinations the Chief Executive made, and seeks reservations in their place. As already noted, Challenger initially brought its proceedings on behalf of affected snapper fishers also. During the course of this hearing, Challenger in effect
discontinued that challenge by the snapper fishers and I do not refer to it further.
[36] Each of the appeals elaborates a number of grounds, expressed by reference to the interest of the appellant in relevant areas and the terms of the Aquaculture Decision as it relates to those areas. The judicial review proceedings, in effect, raise the same issues.
Agreement that Aquaculture Decision made in error
[37] As matters transpired, however, not all of those issues were to be considered at this hearing. Expert evidence relating to the basis of the Chief Executive‟s decision, received on the first and second days of the hearing, had a significant impact.
[38] That evidence related to the use by the Chief Executive of what is known in these proceedings as “the Scallop Model” to make the Aquaculture Decision. The expert witnesses and the Chief Executive representatives agreed after considering the relevant evidence and background materials that the Aquaculture Decision had been made in error, and would need to be remade. Moreover even if I eventually agreed to do so, that decision could not be made at this hearing. Further evidence would be required. What, therefore, could be achieved at this hearing? After discussion, a list of “initial issues” for determination by the Court was agreed upon. These principally relate to the “undue adverse effect”, or UAE, test that is central to an aquaculture decision.
[39] Some further explanation is appropriate, particularly to put those initial issues in context.
The Scallop Model
[40] Central to the Aquaculture Decision was the Chief Executive‟s use of what is
known as the Scallop Model. A brief description of the Scallop Model is required.
[41] The SCA 7 quota management fishery has for some time been actively managed by Challenger on behalf of the scallop fishers. That management involves Challenger determining where and to what extent the fishery will be fished, including to reflect scallop spat seeding activities designed to promote scallop biomass and, therefore, scallop catch in the fishery. Challenger annually surveys the scallop biomass on the seabed throughout the fishery, by reference to areas known as cells. Challenger also measures annually the scallop catch by reference to much larger areas known as sectors. The Scallop Model uses those measurements of scallop seabed biomass density and scallop catch to calculate a predicted “loss” which would result from a given area being turned over to mussel farming and thus “removed” from the area that scallop fishers may seed and trawl through.
[42] The Chief Executive used outputs from the Scallop Model to:
a) measure the effect existing aquaculture activities (mussel farming and spat catching) had had on the SCA7 fishery;
b)determine whether and to what extent the interim AMAs in question, ie the subzones, would have an additional adverse effect on that fishery; and
c) rank, as between themselves and in terms of an ascending order of adverse effect, each of those subzones.
Ms Campbell’s evidence
[43] The first day of the hearing of the proceedings commenced with cross- examination on behalf of SMW of an expert witness who had provided an affidavit in support of Challenger‟s position, Ms Jodie Campbell. Ms Campbell had worked for the Ministry of Fisheries from 2004 to 2007, and had been closely involved in the design and development of the Scallop Model. That cross-examination focused on a personal relationship that Ms Campbell had formed with a Mr Mitch Campbell, whom she had subsequently married. Mr Mitch Campbell was then the Chief Operations Officer for the Challenger Scallops Enhancement Company. Since
leaving the Ministry of Fisheries, Ms Campbell acknowledged that she had undertaken extensive consultancy work for scallop fishers.
[44] The gist of the cross-examination was to challenge the weight that might be placed on Ms Campbell‟s evidence, by reason of that personal relationship and the more general work she had subsequently undertaken representing the interests of scallop fishers.
[45] I took the opportunity to ask Ms Campbell a broader series of questions to assist my understanding of the Scallop Model, its significance for the decisions made by the Chief Executive and her criticisms of the way in which the Chief Executive had used the Scallop Model.
[46] Based on Ms Campbell‟s answers to those questions, it became apparent that there was a significant degree of uncertainty, shared I think it is fair to say by me and counsel, as to whether we had a proper understanding of the issues that Ms Campbell was referring to.
The expert witnesses
[47] After some discussion, it was agreed that the expert witnesses who had provided affidavit material, Dr Brian McCardle and Ms Campbell, and Dr Paul Breen – who had assisted Sanford in preparing its submission – would informally caucus, together with representatives of the Chief Executive. For that purpose I approved a list of issued prepared by the parties for the experts to discuss and to prepare a report on.
[48] At the same time, in my Bench Minute No. 1, I recorded observations and questions relating to the Scallop Model.
[49] Shortly before Court resumed on the second morning I was provided with a copy of the notes prepared by the experts, in consultation with representatives of the Chief Executive. I subsequently used those notes as the basis for what is now described as a “hot tub” discussion between the experts, counsel and the Court after the experts had been sworn on Tuesday morning. As a result of the matters recorded
in the experts‟ notes, and the evidence provided from that discussion, the following position – with which the Chief Executive does not disagree – was reached:
a) the Scallop Model estimates in a reasonable way the loss of scallop catch as a result of the removal from the scallop fisheries of the interim AMAs (zones and subzones) in question;
b)the Scallop Model results, however, should not be used to rank areas in the way the Chief Executive did and as is reflected in the final evaluation report (Table 7) in particular; and
c) the results recorded as being “Sector Average 2” should be
disregarded.
The parties agree the Aquaculture Decision has to be remade
[50] The Chief Executive‟s use of the Scallop Model results to “rank” the various zones and subzones as between themselves was central to his decision. On that basis Mr McCarthy for the Chief Executive, conceded – or at least did not dispute – that an error had arisen which, in and of itself, would be sufficient to allow both the appeals and the judicial review applications. That is, the Aquaculture Decision would have to be made again.
[51] That “ranking” decision was, however, only one element of the Aquaculture
Decision that is challenged.
[52] The issue that was then raised was whether the appeal and review proceedings, overall, should be determined on the basis of that error alone, and whether the Aquaculture Decision should be remitted to the Chief Executive to be made again. Or, should the Court go on to consider other issues that arise? And if, having done so, should I then remit the matter to the Chief Executive or should the possibility of me making a decision (as is anticipated by the right of appeal found in s 42) be retained? This could perhaps be done on the basis that I would have the assistance of an expert appointed pursuant to the High Court Rules in order to make that decision.
[53] I first indicated to counsel that if I was to proceed to hear parts of these appeals and judicial review applications, I needed to know which issues I would be asked to consider before I embarked on that process.
Agreement on issues for initial determination
[54] Counsel, at my direction, then produced a list of issues for initial determination. After discussion the list, a copy of which is set out below, was
settled.
General
List of Issues for Initial Determination
1. What is the scope of the Court‟s jurisdiction on this appeal?
UAE test
2. Was the CE approach to the UAE test wrong? In particular:
a. Was the CE correct in applying a 5% threshold of loss of catch as the level at which he could be satisfied that the UAE test was reached? If no, what is the appropriate threshold to apply?
b. Did the CE correctly apply the word “satisfied” in s 38?
c. What is the relevance of qualitative or contextual matters, such as the relative economic value of fisheries, when applying s 40?
Cumulative Effects
3. Was the CE‟s approach to his assessment of cumulative effects wrong?
In particular, when assessing cumulative effects:
a. What existing structures can be taken into account and how is that assessment to be made?
b. Can future potential effects be taken into account in so far as they relate to:
i. Resource consents granted for aquaculture activities where no structure has been built?
ii. Interim AMAs (also referred to as subzones)?
Buffer
4. Was the CE decision to use a 75m buffer wrong? If so, what buffer zone should have been used?
Ranking
5. Was the CE wrong to adopt an approach to processing the interim
AMAs that sought to maximise space for aquaculture.
Allocation
6. In the absence of an ability to rank interim AMAs subzones, is pro rating a valid method of allocating available space?
[55] It is my understanding that these issues are relevant not only for the Aquaculture Decision itself, but also for the way in which the Chief Executive would be required to make undue adverse effect decisions under the proposed new regime which, as matters stood at the time of this hearing, retained the UAE test.
[56] I then ruled, with the concurrence of all the parties and after further discussion, that in an initial and interim judgment I would provide a decision which addressed those matters. That decision would be given on the basis that there would then be an appropriate time (I indicated one month) for the parties to consider their positions and for submissions then to be made as to whether the Aquaculture Decision should be remitted to the Chief Executive to be remade, or whether I should continue the hearing of this appeal with the expectation that I would substitute my decision for the Aquaculture Decision.
[57] It is also important to record that, on that agreed basis of proceeding, I have not made a final judgment as regards the appeals and judicial review applications. The Transitional Act contains complex provisions relating to the way in which applications for coastal permits are now to be dealt with. These are matters which the parties wish to consider further. Those considerations will then be reflected in the submissions they make as to whether or not the Aquaculture Decision is to be remitted to the Chief Executive, or this Court should proceed to continue to hear the balance of the challenges to that decision.
[58] The one aspect of these proceedings which is disposed of, however, is the Challenger appeals and judicial review applications to the extent that they seek reservations for fin fish (snapper) and fisheries resources. Mr Stallard confirmed that he was not pursuing those matters and that, on that basis, this Court would dismiss those appeals and judicial review applications.
What the Aquaculture Decision involved
[59] To put the “initial issues” in context, it is necessary to understand the nature of the Aquaculture Decision and just what is involved.
[60] Under the Transitional Act, and as relevant here, an aquaculture decision requires that the Chief Executive only approve an interim AMA that he is satisfied will not have an undue adverse effect on fishing.4 If so satisfied, his decision is a determination. If not, it is a reservation.
[61] The Transitional Act adopts the definition of fishing found in the Fisheries Act 1996, and it is clear here that it is commercial fishing, and in particular fishing of the commercial scallop fishery SCA7, that is in question.
[62] The term “adverse effect”, however, is not defined in the Transitional Act, and nor is the definition of that term found in the Fisheries Act 1996 imported into the Transitional Act. I see no reason, however, why the definition of adverse effect in the Fisheries Act 1996 should not be adopted. Further s 38(2) of the Transitional Act confirms that approach. It was on that basis that these appeals were approached. That is:5
adverse effect, in relation to fishing, means to restrict access for fishing or to displace fishing.
[63] There is no separate definition of what is an “undue” adverse effect. Rather,
and as relevant, s 40 of the Transitional Act provides:
Matters to be considered by chief executive
In deciding whether to make a determination or reservation, the chief executive must have regard only to the following matters:
...
(b) the location of the interim aquaculture management area in relation to areas in which fishing is carried out:
4 Under the Transitional Act, the Chief Executive must also consider whether or not an interim AMA would have an undue adverse effect on the sustainability of fisheries resources. As noted, that aspect of the Aquaculture Decision is not challenged and no further reference is made to it.
5 Fisheries Act 1996, s 186C.
(c) the effect of the interim aquaculture management area on fishing of any fishery, including the proportion of any fishery likely to become affected:
(d) the degree to which aquaculture activities within the interim aquaculture management area will lead to the exclusion of fishing:
(e) the extent to which fishing for a species in the interim aquaculture management area can be carried out in other areas:
(f) the extent to which the interim aquaculture management area will increase the cost of fishing:
(g) the cumulative effect on fishing of any previous aquaculture activities.
[64] Thus, to satisfy himself that the interim AMAs in question would, if approved, not unduly restrict access for or displace commercial scallop fishing in SCA7, the Chief Executive had to assess:
a) in terms of s 40(b) through (f), that effect as regards each particular interim AMA; and
b)in terms of s 40(g), the extent to which “previous aquaculture activities” had already, on a cumulative basis, had such a restrictive or displacement effect.
[65] For that purpose, and as relevant, subs (b) through (f) of s 40 direct the Chief Executive‟s attention to the interim AMA under consideration. They do, variously, by reference to:
a) the location of the interim AMA in relation to areas in which fishing is carried out;
b)the effect of the interim AMA on fishing of any fishery, including the proportion of any fishery likely to be affected;
c) the degree to which aquaculture activities within the interim AMA
will lead to the exclusion of fishing;
d)the extent to which fishing for a species in the AMA can be carried out elsewhere;
e) the extent to which the interim AMA will increase the cost of fishing
(emphasis added).
[66] In turn subs (g) requires an assessment of the cumulative effect on fishing of any previous aquaculture activities.
[67] There seems no reason not to adopt, in terms of s 40(g), the definition of aquaculture activity imported into the Fisheries Act 1996 from the RMA. That definition, as directly relevant, reads as follows:6
Aquaculture activities –
(a) means the breeding, hatching, cultivating, rearing or ongrowing of fish, aquatic life or seaweed ... if [that activity] involves the occupation of a coastal marine area.
[68] Taken overall, therefore, and on the basis that the Chief Executive was only considering one interim AMA (as the drafting of the section appears to assume), s 40 required the Chief Executive to make three decisions as regards the SCA7 scallop fishery:
a) What was an undue adverse effect from aquaculture activities?
b)Had previous aquaculture activities had such an effect? If yes, the interim AMA could not be approved.
c) If previous aquaculture activities had not had such an effect, to what extent could the interim AMA be approved so that that approval would not occasion an undue adverse effect?
[69] One difficulty for the Chief Executive was that the TDC had effectively requested he make aquaculture decisions at the same time for each of the interim AMAs identified as such by the Gazette Notice. Neither the Transitional Act nor the substantive terms of the 2004 Regime as now found in the Fisheries Act 1996 and
the RMA, provide any guidance on how that is to be done.
6 Resource Management Act 1991, s 2(1).
[70] Against that background, I turn now to the issues for initial determination. In doing so I note that Mr Stallard, for the Challenger companies, generally supported the approach taken by the Chief Executive, with one principal exception. This exception relates to the “buffer” area that should be included in the calculation of fishing areas lost in order to take account of the fact that fishers cannot trawl close to marine farms. On that basis, where I refer to the position adopted by the Chief Executive, my discussion will generally also reflect the submissions made for the Challenger companies by Mr Stallard on these questions. I note, of course, that in terms of the substantive outcome of this appeal, Challenger argues that no determinations should have been made because, in effect, aquaculture activities have already caused an undue adverse effect on scallop fishing in the SCA7 fishery.
Scope of Court’s jurisdiction on this appeal
[71] As matters transpired, this issue occasioned little difference between the parties.
[72] Section 42 of the Transitional Legislation provides a general right of appeal. Very clearly then, and in terms of the Supreme Court‟s decision in Austin, Nichols & Co v Stichting Lodestar,7 the appeal court is entitled and required to reach its own
view on the merits of the case. As the Chief Justice put it:8
Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate Court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate Court‟s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. …
[73] An appellant bears the onus of satisfying the appeal Court that it should differ from the decision-maker under appeal. It is only if the appellate Court considers that the decision is wrong that it is justified in interfering with it. Further, the extent of the consideration an appeal Court exercising a general power of appeal gives to the decision appealed from is a matter for its judgment. The tribunal may have had a
particular advantage (such as technical expertise or the opportunity to assess the
7 Austin, Nichols & Co v Stichting Lodestar [2007] NZSC.
8 At [16].
credibility of witnesses, where such an assessment is important). In such a case the appeal Court may rightly hesitate to conclude that findings of fact or fact and degree are wrong.
[74] Beyond that, I think it is fair to say that in his submissions the Chief
Executive emphasised those parts of Austin, Nichols – including as referred to above
– that acknowledged that the expertise of the decision-maker is a matter that the appeal Court can consider. Challenger on that, and other relevant matters, generally supported the position taken by the Chief Executive. The marine farmers generally emphasised those aspects of Austin, Nichols, again as referred to above, that emphasised the entitlement and duty of this Court to come to its own decision on the matters under appeal. Moreover, Sanford in particular submitted that, whilst the Chief Executive may have had technical expertise advantages in certain areas, that proposition was not generally correct. The matters, therefore, on which the parties differed in their emphasis as regards the decision in Austin, Nichols are quintessentially ones which the Supreme Court acknowledged were matters for the judgment of this Court. As such, they fall to be reflected in the particular decisions I am called upon to make and require no more general conclusion at this point.
UAE Test
Was the Chief Executive correct in applying a five per cent threshold of loss of catch as the level at which he could be satisfied that the undue adverse effect test was reached?
[75] As noted, the concept of what might be regarded as “undue” adverse effect is
not defined in either of the Fisheries Act 1996 or the Transitional Act.
[76] On this, the Chief Executive commented as follows in the Aquaculture
Decision:9
I have thought long and hard, however, about what level of adverse effects on scallop catch would constitute an undue adverse effect. I find in the case of the Southern Scallop fishery that I agree with the evaluation report that I cannot be satisfied that a cumulative average annual catch loss of 5% would not be an undue adverse effect. I am aware that 5% is a „nominal number‟ –
9 Ministry of Fisheries, Final Decision of Tasman Interim Aquaculture Management Areas,
18 December 2008, at p 4.
some submitters believe it is too high, others too low. In coming to this judgement, I am conscious that s 35 of the aquaculture transitional act requires me to make a reservation if I am not satisfied that the interim AMA will not have an undue adverse effect on fishing. In my view, given complexity of decisions, competing views and often conflicting information decisions must, to a degree, favour existing users.
I am conscious that other marine farming decisions have tended, over time, towards a nominal 5% threshold on the „undue adverse effect test‟. I am conscious, however, that this will [be] the first time the chief executive formally indicates a level at which effects become undue.
[77] In his Decision Maker‟s Report, the Chief Executive commented in more detail as follows:10
The evaluation reports contain a discussion on the undue adverse effect test that I found helpful and on which I relied. I approached the question of the appropriate threshold on the basis that it required a subjective judgment in the circumstances of the particular case.
I considered that allocating space to aquaculture would not affect scallop fishers significantly if it reduced their catch by only a few percentage points. On the other hand, I was conscious that taking space from scallop fishing and allocating it to aquaculture would have an “effect” on those scallop fishers. I was acutely aware that the legislature has contemplated that aquaculture and commercial fishing can, to a degree, coexist. I was also aware of the other tests in the fisheries area which require reconciliation of competing uses. For example, the thresholds for mataitai approvals refer to commercial fishers being “prevented” or “unreasonably prevented” from exercising their rights. I considered that a test referring to “prevention” in this context would have allowed greater impacts on existing rights than the aquaculture “undue adverse effects” test.
I was aware that the Court of Appeal had upheld a decision to establish a marine reserve that was expected to reduce the catch of rock lobster in CRA3 by 10%. My decision, however, required reconciliation of competing commercial interests, so it was not one where a significant reduction in the annual catch could be justified because of public interest factors (particularly since s 40 of the Transitional Act does not contemplate such factors being considered). Accordingly I thought that a catch loss of 10% in the context of SCA7 would be undue.
I considered that a 5% average reduction in weight of scallop meat taken was significant, and that it was inappropriate to impose on scallop fishers a cost of much more than 5% of the annual catch for the benefit of intending marine farmers. Accordingly I tended towards that 5% threshold as the undue level. I contemplated allowing a higher threshold but came back to
5% as the greatest average reduction in the scallop catch that I considered reasonable given the statutory framework I was dealing with and so not “undue”.
10 Report of Decision Maker , 18 December 2009, at [103] – [107].
I was also aware that a reservation would not definitely exclude aquaculture from these areas. The undue adverse effect test, if triggered, allows interested stakeholders to agree the best use of the area through aquaculture agreements. I would have settled on a threshold of about 5% even if it was not possible to enter into aquaculture agreements, but this possibility reinforced my view that commercial fishers should not suffer significant uncompensated loss for the benefit of prospective marine farmers.
[78] As is clear, therefore, the Chief Executive approached his assessment of undue adverse effect in terms first of the effect of the approval of interim AMAs as reflected in catch lost. Overall, he considered that a 5 per cent average reduction in weight of scallop meat taken was significant, that it was inappropriate to impose on scallop fishers a cost of more than 5 per cent of the annual catch for the benefit of intending marine farmers and, accordingly, he tended towards “that 5% threshold as the undue level”. After that level, intending marine farmers would need to negotiate aquaculture agreements with scallop fishers.
[79] Sanford and Challenger were generally supportive of that approach.
[80] SMW, supported by Marlborough Aquaculture and Golden Bay Marine
Farmers, were not.
[81] SMW‟s position as regards the undue adverse effect test generally can, I
think, be fairly summarised in the following manner.
[82] The overarching purpose of the 2004 regime is to promote aquaculture in a sustainable manner. Therefore, the value judgment called for by the undue adverse effect test must be made with that interest in mind. More particularly, the purpose of the Fisheries Act 1996 is to provide “for the utilisation of fisheries resources while
ensuring sustainability”.11 Utilisation is defined to mean “conserving, using,
enhancing and developing fisheries resources to enable people to provide for their
social, economic, and cultural wellbeing”.12
[83] Based on those matters, SMW submitted that the Chief Executive had approached the undue adverse effect test in a purely quantitative way, rather than in
terms of a broader qualitative inquiry that was required. The types of qualitative
11 Fisheries Act 1996, s 8(1).
12 Fisheries Act 1996, s 8(2).
considerations the Chief Executive was required to consider included not only the overall purpose of the 2004 regime being to promote aquaculture in a sustainable manner but also:
a) the difficult legislative history relating to the mussel industry in
Tasman and Golden Bays;
b)the enormous investment time, money and resources by SMW and others to obtain provision for aquaculture in Tasman without any tangible result to date;
c) the declining significance of the scallop fishery; and
d)the relative social and economic benefits resulting from the establishment of mussel farms vis-à-vis the continuing use of those areas for scallop fishing.
[84] SMW pointed to a number of decisions of the Court of Appeal and the High Court in support of its proposition that a broad qualitative inquiry was called for by the undue adverse effects test. It noted the Court of Appeal held in CRA3 Industry Associated Inc v Minister of Fisheries,13 that “undue” implies “without due cause or justification ... more than is warranted” (Oxford Shorter Dictionary). In that case, the test set out in s 5 of the Marine Reserves Act 1971 was whether a proposed
marine farm would “interfere unduly with commercial fishing”. The Court of Appeal made it clear that the question was not whether an effect is “significant” in quantum but whether it is “undue” in the sense of not warranted in the circumstances.
[85] SMW submitted that the manner in which the High Court had earlier dealt with the meaning of “undue” was also of assistance.14 The Minister had been
satisfied that there would be no undue adverse effect on the fishery in circumstances
13 CRA3 Industry Associated Inc v Minister of Fisheries [2001] 2 NZLR 345 (CA).
14 CRA3 Industry Association Inc v The Minister of Fisheries, HC Wellington CP317/99, 24 May
2000.
where a marine reserve would affect access to less than ten per cent of the CRA3 catch. The High Court held:15
... “undue” does not just mean “excessive” in a quantity sense. “Undue” also means “unjustified” in a qualitative sense; a sense of impropriety. I see no reason to give a restricted meaning, one sense and not the other, to the words as so deployed in s 5(9). The Minister is not simply counting fish. The Minister is considering whether the proposed interference with commercial fishing is warranted. It may not be warranted even though effect is small, if gains are likely to be slight or speculative. Conversely, it may be warranted, even though severe in its effects, if the need is high, as where preservation of a commercial species is in question.
One cannot sensibly look at whether something is warranted, or whether large and severe impacts should be accepted, without looking at the wider public interest picture ...
[86] SMW acknowledged that the CRA3 cases involved a different statute and different circumstances. In particular, the criteria to which the Minister was required to have regard were broader than under s 40, and included a public interest factor. It argued, however, the Courts‟ interpretation of “interfere unduly” did not depend on those matters. Consequently, the CRA3 cases could not simply be dismissed as distinguishable. The Courts‟ approach to the scope of undue interference involved consideration of the same issues of statutory purpose and the meaning of the word “undue” as apply in this case.
[87] SMW also argued that the High Court had in Chief Executive Ministry of Fisheries v Seafood Industry Council accepted,16 following the Court of Appeal in the CRA3 decision, that “undue” in the context of the UAE test in s 67J of the Fisheries Act 1983 imparts a wide rather than a narrow enquiry.
[88] More specifically, the five per cent threshold the Chief Executive had identified was arbitrary, and not able to be justified. Taken overall, a correct approach to the evaluation of undue adverse effects in this case would result in a higher catch loss threshold. To choose any particular higher threshold, without undertaking the kind of qualitative assessment seen as required by SMW, would be as arbitrary as the Chief Executive‟s five per cent. Nevertheless, SMW felt able to
submit that on a correct approach the Chief Executive should have made a
15 At [35] – [36].
16 Chief Executive Ministry of Fisheries v Seafood Industry Council HC Wellington and HC Blenheim CP4/02, 10/01 and 12/01, 27 August 2002.
determination rather than a reservation in respect of subzones (l) and (m) in AMA 2, and should probably not have imposed reservations on account of the effects on scallop fishing on any of the subzones in AMA 1.
[89] In terms of the competing arguments relating to the correctness of otherwise of the five per cent threshold adopted by the Chief Executive, I think his discussion of the issue, set out at [69] and [70], fairly summarises relevant considerations. I adopt that analysis.
[90] In adopting that analysis as correct, I am particularly mindful that here the Chief Executive was called on to make his undue adverse effect decision in the context of two, competing, commercial uses of the relevant coastal areas. The statutory scheme is that, where the Chief Executive makes a determination for an interim AMA, permits to allow – here – mussel farming may be granted without compensation to the holders of quota fishing rights for scallops. On the other hand, where a reservation is made, such permits may be granted, but subject to aquaculture agreements having been entered into.
[91] In my view, this particular context, which is quite different to those in which the CRA3 decisions were reached, and in which Neazor J reached his decision in Chief Executive Ministry of Fisheries v Seafood Industry Council, support the Chief Executive‟s approach that an uncompensated catch loss of more than five per cent would constitute an undue adverse effect on commercial scallop fishers.
[92] Moreover, I note that those who argued that five per cent was an inappropriate – that is too low – threshold, were not themselves able to identify an alternative with any great certainty. Rather, and particularly in the submissions of SMW which most extensively dealt with this matter, the outcome argued for seemed, with respect, to be tailored to allow approval of all the sub-zones in question, rather than identifying with any great logic an alternative assessment of what might be an undue adverse effect.
[93] In particular, I do not think – as submitted by SMW – that the five per cent threshold is arbitrary and lacking in logic. That threshold addresses directly the concept of adverse effect – namely that of restricting access for fishing, or displacing
fishing. Further the Scallop Model provides – as all the experts accepted – a logical way of measuring that restrictive or displacement effect.
[94] The Chief Executive himself recognised that his selection of five per cent was not a necessarily scientific one, but was rather based on his judgment. I was not persuaded by the appellants who argued that that judgment that it was wrong. In that, I was – as I have said – particularly mindful that the undue adverse effect test threshold is part of a statutory regime which allows for existing property rights, namely those of commercial fishers, to be reduced in value potentially without compensation.
[95] I therefore answer this issue on the basis that the Chief Executive was correct to adopt that five per cent threshold.
[96] I comment on SMW‟s more general submissions, as regards the need for a broad-based qualitative inquiry, when I consider the third question I am to answer.
Correct interpretation of “satisfied”
[97] The second issue for initial determination is whether the Chief Executive
correctly applied the word “satisfied” in s 38.
[98] The Chief Executive proceeded on the basis that he must be positively satisfied that there would be no undue adverse effect before he could make a determination for an interim AMA. The Decision Maker‟s Report confirms this:17
Section 35 of the Transitional Act required me to be “satisfied that the interim aquaculture management area will not have an undue adverse effect on fishing or on the sustainability of fisheries resources” before making a determination in favour of the interim AMA. I understood that if I was not satisfied that effects on fishing and the sustainability of fisheries resources would not be unduly adverse, I must enter a “reservation” against the interim AMA (in whole or in part). Generally, if I was uncertain about effects of an interim AMA, I could not be satisfied that those effects would not be undue.
[99] SMW challenged this approach, relying on Major Electricity Users’ Group
Inc v Electricity Commission.18 It said that to be “satisfied” involved the Chief
Executive making up his mind, without meeting any particular requirement for adequate supporting information. SMW submitted that there was no particular standard of proof, and no justification for endeavouring to describe the nature of the Chief Executive‟s discretion in the way the Chief Executive had done as reflected in the Decision Maker‟s Report.
[100] In my view, at [70] of the Decision Maker‟s Report the Chief Executive was saying quite simply that the statutory test required him to be satisfied, that is that he had made up his mind, that there would not be an undue adverse effect. To that extent, the test does favour existing users as the Chief Executive concluded. That is, the test is explicitly designed to protect existing users from an undue adverse effect. The Chief Executive must be satisfied that an undue adverse effect will not arise.
[101] SMW pointed in particular to the Chief Executive‟s observation that:19
Generally, if I was uncertain about effects on an interim AMA, I could not be satisfied that those effects would not be undue.
[102] It said the Chief Executive was wrong to resolve uncertainties in favour of fishing.
[103] As a matter of logic, I do not think the Chief Executive‟s reasoning can be challenged, as SMW purported to do. Nor do I think that the decision of Wild J in the Major Electricity Users’ case supports SMW‟s challenge. In that case, Wild J was considering the proposition that to be “reasonably satisfied” imported a particularly rigorous standard of proof. He noted that being “satisfied” means simply to make up one‟s mind. Further, he expressed the view that to be “reasonably satisfied” might denote a lesser test than that required where a decision-maker had to be simply “satisfied”. That is not to say, however, that where information is incomplete, so that the decision-maker is left in a position of uncertainty – it would be wrong for a decision-maker to conclude that he was unable to satisfy him or herself as to either a positive or a negative proposition. As Mr McCarthy put it, I
think correctly, in his written submissions: if, on the basis of the information before
18 Major Electricity Users’ Group Inc v Electricity Commission HC Wellington CIV-2007-485-
2508, 14 March 2008.
him the Chief Executive continued to have substantial doubts about whether the adverse effect on fishing would be undue, he could not be “satisfied” that it was not undue.
[104] Having said that, there will always, to an extent, be uncertainty about future events. I do not think it would be appropriate for the Chief Executive to conclude, merely by reason to such inevitable uncertainties alone, that he could not be satisfied about the absence of an undue adverse effect, and for that reason decline to make a determination. Nor, in my view, would the Chief Executive be acting lawfully if he undertook an inadequate investigation into adverse effect, and by reference to the inadequacies of his investigation conclude that he was not satisfied.
[105] I am satisfied that here, however, the Chief Executive‟s decision is not affected by either of those two errors in approach. At the end of day, and albeit in a manner challenged by SMW, the Chief Executive relied on the outputs of the Scallop Model to assess adverse effect. Moreover, I think it was generally acknowledged that the Chief Executive had more information about the SCA7 scallop fishery, essentially because it is a managed fishery, than would generally be the case. There was, in effect, relatively more certainty available to the Chief Executive than would generally be the case when he was called to make aquaculture decisions.
[106] Taking all those matters into consideration, and although there are some uncertainties inevitably associated with any modelling exercise, I think the Chief Executive correctly approached the question of whether or not he was “not satisfied”. That this question was posed in the negative inevitably affected the way he approached his analysis. In my view, that analysis was not in error. I therefore conclude that the Chief Executive correctly applied the word “satisfied” in s 38.
What is the relevance of qualitative or contextual matters, such as the relative economic value of fisheries, when applying s 40?
[107] As set out above, SMW argued that the Chief Executive was required to have regard to a wide range of what SMW called “qualitative and contextual matters” when making the Aquaculture Decision. In particular, he had to assess and have regard to the relative economic value of the existing scallop and potential mussel
fisheries that were – in effect – competing for aquaculture space. SMW put its position very clearly in the following submission:20
It is submitted that the Chief Executive erred in failing to take account of the relative values and benefits of potential mussel harvests and foregone scallop catches as one of the circumstances contributing to the context for considering the matters in section 40(b) to (g). The issues illustrate the artificiality of endeavouring to assess whether a loss of scallop catch is warranted without having regard to contextual matters. How can a reservation on waterspace be warranted when, in real terms, the actual costs or losses to scallop fishers are little more than trivial? Similarly, there is a point at which disallowing mussel farming over 500 hectares of waterspace in subzones (l) and (m) in Interim AMA2 at a cost of some 7.5 million tonnes of mussels per annum with a value of over $16 million, in order to preserve scallop catches of approximately 1.36 tonnes with a value of about
$75,000, defies common sense. Parliament surely cannot have intended that, in these circumstances, the effects on the SCA7 fishery of subzones (l) and
(m) are to be considered excessive to the point that they are unwarranted or
unjustified („undue‟).
[108] This part of SMW‟s argument relied particularly on the statements of purpose and principles found in Part 2 of the Fisheries Act 1996 and the broad menu of concerns that “ensuring sustainability” gives rise to in terms particularly of s 8(2).
[109] There are, in my view, a number of reasonably clear obstacles in the way of
SMW‟s arguments on this matter, both in its general and more specific terms.
[110] The terms of s 40 of the Transitional Act are themselves clear. Section 40, as does its counterpart in the 2004 regime – s 186G of the Fisheries Act 1996 – provides that, for the purposes of making an aquaculture decision, the Chief Executive must have regard only to the matters listed in those subsections (a) to (g). This is a clear statutory direction. In my view it means that SMW‟s argument simply cannot succeed. If the Chief Executive was required to have regard – in the manner SMW argues – to a wider range of qualitative and contextual matters, then very obviously the statute would not have been drafted in the way it was.
[111] This argument is supported by the legislative history. As I noted in Sanford
Limited v The Chief Executive of the Ministry of Fisheries and Anor, in considering a
20 Outline of submissions by counsel for SMW Consortium (Golden Bay) Limited, 14 January.
2011, at [58].
similar argument as regards s 67J(8) of the Fisheries Act 1983,21 the Primary Production Select Committee when reporting on the 2004 reform legislation, commented on the undue adverse effect test as follows:22
We recommend an amendment to clause 41, deleting subclause 186G(g), namely the phrase “any other matter” in order to provide more certainty as to the matters the chief executive of the Ministry of Fisheries can consider in considering the undue adverse effects test. Submitters felt this phrase negated the purpose of providing criteria for the administration of the undue adverse effects test. Submitters also differed about the kind of criteria that the undue adverse effects test requires. In particular several submissions called for the addition of criteria that would allow a comparison of value between fishing and farming use of coastal marine areas. That is a balancing test and not the purpose of the test in the bill. The test in the bill is a threshold test, which is an assessment of the degree to which a new use of coastal space, in this case marine farming, will affect the exercise of fishing rights that already exist in the area. If the effect is sufficiently adverse to amount to an undue adverse effect, it should not proceed, unless an aquaculture agreement can be reached with the affected fishers.
[112] As that extract makes clear, and as is reflected in the text of the statute itself, the test is a threshold one, and not a balancing one. In making that threshold assessment, neither comparative economic values, nor more general considerations as might have been permissible if the phrase “any other matter” had been included, are permissible considerations. Rather, and very much for the reasons submitted by the Chief Executive in his submissions, I consider that the Chief Executive was required to address each of the factors listed in s 40, and was restricted to those factors. In other words, and put simply, the decision of the Chief Executive called for by an aquaculture decision is not a “sustainability” decision so as to call into play the broader principles set out in s 8(2). Rather it is a threshold assessment of whether aquaculture activities should be allowed without intending marine farmers being required to enter into aquaculture agreements with existing fishers.
[113] Therefore, the qualitative and contractual factors argued for by SMW are not relevant considerations and I answer the issue raised in question 2(c) accordingly.
21 Sanford Limited v The Chief Executive of the Ministry of Fisheries and Anor HC Wellington
CIV-2009-485-379, 12 October 2009.
22 At [123].
Was the Chief Executive’s assessment of cumulative effects wrong?
Overview of issues and factual background
[114] I have been asked to determine the following issues:
a) Was the CE‟s approach to his assessment of cumulative effects wrong?
In particular, when assessing cumulative effects:
i) What existing structures can be taken into account and how is that assessment to be made?
ii) Can future potential effects be taken into account in so far as they relate to:
(1) Resource consents granted for aquaculture activities where no structure has been built?
(2) Interim AMAs (also referred to as subzones)?
[115] Those issues relate to three aspects of the way the Chief Executive went about making the Aquaculture Decision. That is:
a) He had regard, in terms of s 40(g), to the cumulative adverse effect of all of the interim AMAs he was considering when he made the Aquaculture Decision about each one of them;
b)He made his assessment of adverse effect, as reflected in the way the Scallop Model works, by reference to the areas (i) for which approvals had been given for previous aquaculture activities and (ii) of the interim AMAs, rather than by reference to those areas as occupied in fact or likely to be occupied by aquaculture activities; and
c) He did not have regard to the point in time at which previous aquaculture activities had been approved, and in particular, relative to
the time at which current commercial QMS fishing rights had come into existence in SCA7.
[116] These aspects of his decision-making are reflected in the following extracts
from the Decision Maker‟s Report:
(a) I considered that the requirement to have regard to the cumulative effect on fishing of any previous aquaculture activities required me to have regard to the likely effects of marine farms/AMAs that had been approved, even if aquaculture structures had not yet been erected. I could not ignore the cumulative effects of the interim AMAs for which I was prepared to grant a “determination” in relation to the remaining AMAs.23
(b) Outputs from the scallop model reflect the area removed from the SCA7 fishery by a marine farm and the importance of the cell where the farm is. I confirm that the model does not distinguish between existing and proposed farms.
SMW submitted that structures that pre-dated the scallop enhancement regime should be treated as part of the environment that Challenger had adapted to. I understood, however, that I had to consider the cumulative effects of “any previous aquaculture activities”. There is nothing in the Transitional Act to suggest that I should not consider structures that had been erected before a certain point.
There was a commercial scallop fishery in SCA7 before marine farming started there. I did not see any reason to give more or less weight to marine farming structures that were already in place at the time of my decision, or that had been erected a number of years ago, simply because of their age. Like proposed marine farms, they remove space from the SCA7 fisher. The extent of their impact depends on the biomass of available scallops that would otherwise be able to be fished in and around their location rather than how old they are. Even if Challenger had adapted to the existing structures to a certain extent, it would likely be able to increase the scallop catch if those structures were not present.24
[117] Sanford challenged the lawfulness of the Chief Executive‟s general approach to “cumulative effects”. Sanford argued that it was wrong for the Chief Executive to include any assessment of the interim AMAs in the s 40(g) “cumulative effect” assessment, instead subs (b) to (f) dealt with the assessment of an interim AMA. As Marlborough Aquaculture, in effect, also argued, each interim AMA must be separately assessed in terms of its adverse effect. Moreover the Chief Executive
should, when considering the cumulative effect of previous aquaculture activities in
23 At [214].
24 At [151] – [153].
terms of s 40(g), do so by reference to “approved” marine farms. Strictly speaking, only existing marine farms, that is those consented and built, should be considered. If the s 40(g) test did allow a more purposive interpretation, the assessment could also be made by reference to possible future aquaculture activities, namely those already granted resource consent – provided it was likely the consented marine farm would actually be constructed. Importantly, and as now reflected in Question 5 regarding ranking, to the extent that previous aquaculture activities (properly assessed) have not yet had an undue adverse effect on fishing, the available “headroom” must be allocated pro-rata across the interim AMAs under
consideration.25 That is, the Chief Executive had been wrong to make the
Aquaculture Decision so as to maximise the area of the AMAs which were to be the subject of determinations.
[118] SMW generally supported Sanford‟s approach. Additionally, it argued that the Chief Executive should have taken account of the extent to which the existing scallop fishery, a managed fishery, had been able to adapt to the adverse, initial, impact of previous aquaculture activities. By reference to what were referred to as “structures”, which I take to be a reference to marine farms themselves, SMW argued that the Chief Executive was wrong in using the Scallop Model to the extent that it did not distinguish between “existing” and “proposed” structures.
[119] At the hearing SMW also placed considerable emphasis on the argument that any adverse effect of aquaculture activities underway at the time the QMS came into force as regards the scallop fishery in SCA7 should be ignored. In effect, QMS rights, which were the commercial fishing rights of concern to the Chief Executive, were created subject to those effects and, therefore, did not require protection from them as would be granted if those effects were counted under s 40(g).
[120] That was not a position which Sanford supported.
[121] Marlborough Aquaculture generally supported the position taken by SMW. [122] Golden Bay Farmers did so in part.
25 Sanford explained what it meant by pro-rata allocation in an affidavit of Dr Paul Breen, filed after the hearing. That is a matter to which I will return.
[123] Reflecting their interests, the Challenger companies supported the approach taken by the Chief Executive on these issues.
[124] The Chief Executive‟s position was that it was necessary to take a purposive, and not literal, approach to the application of s 40(b) through (g) inclusive. The UAE test was intended to safeguard the integrity of the fisheries regime, reconcile conflicts between aquaculture and fishing, and protect fishers‟ rights. The approach proposed by Sanford, and supported by other appellants as relevant, would frustrate that purpose. Parliament had adopted the expression “previous aquaculture activities” to include all previous approvals, whether of marine farms, or AMAs, that would affect space available for fishing. Section 40, in effect, required the Chief Executive to take a “zoning” approach to the approval of interim AMAs, as reflected in the way the Scallop Model worked. Moreover, when considering one particular interim AMA, the Chief Executive clearly had to take account of other interim AMAs also under consideration at the same time.
[125] I think it is fair to say that, at the hearing, the possible significance of the time, at which quota were allocated in SCA7 for the adverse effect test, received more attention than had previously been the case. In that context, various counsel made submissions as to the previous history of fishing and marine farming in SCA7 in a way that was not at all easy for me to follow. I therefore requested that further submissions be provided. As a result:
a) Mr Stallard, for Challenger, provided a memorandum relating to the introduction of the southern scallop fishery into the QMS;
b)Mr Ironside, for Tasman District Council, provided a memorandum backgrounding the types of approvals that had been given for previous aquaculture activities in SCA7 under the various legislative regimes;
c) the Chief Executive provided some background as to the meaning of the reference to “existing marine farms” in the Scallop Model report; and
d)Marlborough Aquaculture took the opportunity of itself responding to the memorandum I had requested from Mr Stallard on behalf of the Challenger companies.
[126] I thank the various parties for those additional memoranda. I comment on their content as follows.
[127] In terms of the significance of the history of the introduction of the SCA7 fishery into the QMS, the following extracts from Mr Stallard‟s memorandum,26 which no party disputed, would appear to summarise the position:
5. It is common ground that scallops were at all times prior to their entry in the Quota Management System, a Controlled Fishery in terms of the Fisheries Act 1983.
...
14. Section 30(4) [of the Fisheries Act 1983] as it applied from 1 April 1987 to 30 September 1992 restricted the area of a controlled fishery so as to exclude any “leased” or “licensed” area under the Marine Farming Act
1971.
15. It follows that when quota was allocated in 1992 in SCA7 that the allocation reflected the fact that no scallop fishery could as a matter of law be undertaken in areas of marine farm licence as it was excluded from a controlled fishery.
...
17. When scallops were introduced into the QMS, SCA7 included areas which were excluded under the controlled fishery.
...
19. SCA7 now includes those areas that were excluded from a controlled fishery.
...
31. In summary, full ITQ rights were available to scallop fishers on 1
October 1992.
[128] As I understand matters, therefore, on the one hand the allocation of quota in
1992 in SCA7 reflected the fact that scallop fishing could not, as a matter of law, be undertaken in areas leased or licensed under the Marine Farming Act 1971.
Nevertheless, when scallops were introduced into the QMS the SCA7 area itself
26 Memorandum concerning the introduction of scallops into the Quota Management System, Stallard Law Limited, 2 March 2011.
(where SCA7 quota rights may be exercised) included areas from which scallop fishing had been excluded under the controlled fishery regime.
[129] Mr Ironside‟s memorandum, provided on behalf of the Tasman District Council, contained a detailed history of the various regimes that have applied to “previous aquaculture activities” in SCA7 under the various legislative regimes. I have grappled with the detailed information contained in that memorandum, without
– I regret – achieving any particular clarity as to what I should take from it overall.
[130] Based on the material contained in the Chief Executive‟s memorandum, which clarified a reference to the area of “existing marine farms” in Golden and Tasman Bays, and further consideration of the Decision Maker‟s Report and material referred to in that report, the following aspects of the Scallop Model and its use by the Chief Executive become clear:
a) The Scallop Model assessed the adverse effect of the interim AMAs and of previous aquaculture activities in the same way:27
Outputs from the scallop model reflect the area removed from the SCA7 fishery by a marine farm and the importance of the cell where the farm is. I confirm that the model does not distinguish between existing and proposed farms.
b)It based that assessment on the overall area lost to fishing, as explained at Annex 3, p 5, to the preliminary evaluation report:
Area lost
lost i
A
consists of those areas lost to commercial scallop fishing as a
result of existing and proposed marine farms. Existing marine
farms are marine farming leases, licences, permits and spat catching sites located within the SCA7 fishery management area.28 Proposed marine farms are marine farming and spat catching permit applications that have been received by the ministry of Fisheries and are also located within the SCA7 fishery management area.
The model estimated the total area removed from commercial scallop fishing grounds using two scenarios based on exclusion
27 Report of the Decision Maker, 18 December 2009, at [151].
28 All leases, licenses and permit have been included in this assessment, including those in place prior to issuance of SCA7 quota, because the assessment considers effects on “fishing”, not quota rights.
zones around marine farm structures: either 50 m or 100 m. These scenarios represent the fishery under circumstances where all fishing would not occur closer than 50 m to marine farm boundaries or all fishing would not occur closer than 100 m to marine farm boundaries.
lost i
A
in the Pelorus Sound (G42, G43, G45, G46, G47, G89, G90 and G100) includes the actual area of the marine farms, separately a 50 or 100m buffer on the seaward side of the marine farms, and any additional area commercial fishers said was inaccessible due to the placement of marine farms. The area excluded a 50m buffer along the coast for the reason that commercial boats generally do not dredge closer to shore than approximately 50m. No marine farms are authorised within 50 m of shore.
lost i
A
in Golden Bay and Tasman Bay (statistical areas 7AA, 7BB,
7CC, 7EE and 7FF) included the actual area of the marine farm
lost
and a 50 or 100m buffer around the farm boundaries. Ai
to marine farm development in all cells was measured in m2.
due
c) The “actual areas” on which the calculations were based are the areas of the relevant lease, licence or permit, not the areas actually occupied by aquaculture activities.29
d)Neither was the extent nor the layout of the proposed farms in the interim AMAs considered. Sanford had advised the Chief Executive that it had designed its proposed marine farms to allow wide laneways between the mussel farm structures that would allow scallop fishers to fish within AMA1 Waikato (c). Whilst the final evaluation report acknowledged that layout could be considered under certain
circumstances,30 and reservations if necessary placed over unfarmed
areas, the Chief Executive did not take that approach.
e) As noted above at [114], in his report the Chief Executive did not
discount, or not take account of, what were referred to as “older”
structures.31
29 See, for example, [427] of the final evaluation report.
30 See para 233.
31 Report of the Decision Maker, 18 December 2009, at [152] – [153].
[131] There was, therefore, no allowance because marine farms were in existence when the scallop fishery in Golden Bay became subject to the QMS and fishers received the benefits of ITQ.
[132] The Chief Executive did, however, adjust the area of licences and permits assessed by the Scallop Model:
a) The Scallop Model did not include all farms in SCA7. For example, Queen Charlotte Sound was excluded because it was not frequently used for commercial fishing.32
b)Mussel farms in Wainui Bay (part of Golden Bay), in total about 16 hectares, were not included as they are close inshore and would not affect the commercial scallop fishery.33
c) Farms that were “in areas closed to commercial scallop fishing” were
not included.34 Quite what that means I do not know.
[133] The Scallop Model estimated the cumulative adverse effect on the SCA7 fishery of the determinations the Chief Executive finally made as being between 5.36 to 8.5 per cent of catch lost. The Chief Executive discounted that result to less than five per cent on the basis that fishers should be able to dredge closer to marine farms in good conditions than the buffer of 75 metres used and because, to some extent, fishers should be able to adapt to the effects of the interim AMAs.35
[134] On that basis I think the issues for initial determination relating to the Chief
Executive‟s assessment of cumulative effect can usefully be restated as follows:
a) Was the Chief Executive right to consider the possible adverse effect of an interim AMA by reference to its area, rather than by reference to
the area likely to be occupied by aquaculture activities?
32 Final evaluation report, File note 66.
33 Post trial memorandum of counsel of Chief Executive, 25 February 2011 at [8].
34 Final evaluation report, appendix 4 at [8].
35 Report of Decision Maker, 18 December 2009, at [71] and [118].
b)Was the Chief Executive right to consider the possible adverse effects of all the interim AMAs when making his decision about each of them?
c) In assessing the cumulative adverse effects of previous aquaculture activities should the Chief Executive:
i)have taken account of aquaculture activities for which consents had been given, but where no aquaculture activity had actually commenced; and
ii)have disregarded the adverse effects of aquaculture activities underway at the time (1992) of the introduction of the QMS to scallop fishing in SCA7.
[135] In addressing those issues, I note that an aquaculture decision is essentially an assessment of fact: that is, is the Chief Executive satisfied that an interim AMA will not have an undue adverse effect here, on commercial fishing and, in particular, on the SCA7 fishery? In approaching that decision, the Chief Executive will rely on relevant available scientific and other evidence. He will also rely on his own expertise and judgment, and that of his advisers. Nevertheless, it is essentially an assessment of fact that is involved. Bearing that in mind, I consider each of those issues in turn.
Was the Chief Executive right to consider the possible adverse effect of an interim AMA by reference to its area, rather than by reference to the area likely to be occupied by aquaculture activities?
[136] The Chief Executive, as he explained in the Decision Maker‟s Report and as Mr McCarthy confirmed in his submissions, approached his assessment of the possible adverse effect of an interim AMA by reference to the actual area involved, and on the basis that fishing would be excluded from the interim AMA entirely. He did so because he considered that the scheme of the 2004 regime, including as it applied to this decision in terms of the Transitional Act, essentially involved him making a “zoning” decision about an interim AMA. The Chief Executive was, moreover, simply not in a position to assess where, and to what extent, aquaculture
activities, and in particular marine farm structures, would be established in a proposed interim AMA.
[137] Although Sanford did not support the Chief Executive‟s approach on these
issues, it observed at [10] and [11] of its synopsis of submissions on the initial issues
– accurately I think – as regards these matters generally:
Many of the problems in the present case stem from the fact that the new legislative regime has separated the UAE assessment from considering the potential effects in the context of a specific resource consent application. Rather, under this scheme space is notionally cleared for aquaculture activities (through the zoning of AMAs and UAE assessments of the AMA), potentially years prior to resource consents being granted and farms built.
Note, the government has acknowledged that the AMA regime has not worked, with the result that the AMA (including interim AMA) concept which [was] at the heart of 2005 reforms (and which is at the core of the difficulties in this case) is about to be expunged from the legislation: Aquaculture Legislation Amendment Bill (No 3)
2010 239-1, Explanatory Note, p 2.
[138] When Mr McCarthy for the Chief Executive referred to a “zoning” decision, I think he was essentially saying the same thing as Sanford did when it acknowledged that under the 2004 regime space was “notionally” cleared for aquaculture activities.
[139] I think that approach is generally correct and supports the Chief Executive‟s
approach of assessing adverse effect by reference to the area of an interim AMA.
[140] I reach that conclusion essentially because I accept the Chief Executive‟s submission that, albeit in a way that is now agreed not to be particularly helpful, the aquaculture decision for an interim AMA is made prospectively, and by reference to the possibility that aquaculture activities may, or will, displace fishing entirely from that area.
[141] I also note that s 40 refers generally to the interim AMA itself, and to the effects thereof.
[142] However, and as I think I indicated during the hearing, I am of the view that subs (d) of s 40 necessarily involves the Chief Executive going beyond the mere assumption that aquaculture activities will displace fishing from the entire interim
AMA. Subsection (d) requires the Chief Executive to have regard to “the degree to which aquaculture activities within the interim aquaculture management area will lead to the exclusion of fishing” (emphasis added). Mr McCarthy submitted that this provision could be understood as referring simply to the type of calculation the Chief Executive had here made of the impact of an interim AMA – assessed as a whole – on fishing.
[143] I am not persuaded by that submission.
[144] First, I do not think that interpretation is the natural one, given the words used in subsection (d). I refer, in particular, to the reference to the use of the words “the degree to which aquaculture activities within the interim AMA will lead to the exclusion of fishing”. I think those words call for some assessment of the extent to which aquaculture activities will be carried out within the interim AMA, and therefore the degree to which aquaculture activities within the interim AMA will actually lead to the exclusion of fishing. It would also, in my view, render subsection (d) effectively otiose as subsection (c) also requires the Chief Executive to have regard to “the effect of the interim aquaculture management area on fishing of any fishery”. Given, in my view, the correct reading of the word “effect” in subsection (c) as meaning the restrictive or displacement effect, then – by Mr McCarthy‟s argument – subsections (c) and (d) would effectively involve the same assessment.
[145] I therefore think subsection (d) does require some “real life” assessment of
the degree to which aquaculture activities will occur within the interim AMA.
[146] In my view, considerable support for that conclusion is found in s 41(1)(d) of the Transitional Act. That section provides that, where an aquaculture decision is a determination based on a rule in a regional coastal plan or proposed regional coastal plan that relates to “the character, intensity or scale of occupation” of the interim AMA by aquaculture activities, the decision must specify that rule and state that the rule may not be revoked or amended until the Chief Executive makes a further aquaculture decision in relation to the area affected by the revocation or amendment. In other words, s 41(1)(d) in my view acknowledges that questions of “the character,
intensity, or scale of occupation” of the interim AMA by aquaculture activities is a
matter which the Chief Executive will – where relevant – consider.
[147] Having said that, I note again that that assessment is for the purpose of the Chief Executive being satisfied that the interim AMA will not have an adverse effect on fishing. In order, therefore, to reach that view by reference to the proposition that aquaculture activities will only occur in part, rather than the whole, of an interim AMA, the Chief Executive would need also to be satisfied of that fact. That may mean, quite properly in my view, that he or she may need to hesitate before concluding that aquaculture activities will not take place in an interim AMA. It may therefore be unusual for the Chief Executive to be able to be satisfied that that will not be the case.
[148] However, where it is clear that to a known degree such activities are not likely to take place within an area, then the adverse effect assessment should take account of that. For example, here Sanford explains that, in preparing the plans for its marine farms in 1 Waikato (c) it had specifically allowed for access lanes to allow for scallop dredging. If properly satisfied of the factual accuracy of that proposition, and of its ongoing significance, then in my view it would not be sensible for the Chief Executive to fail to take account of that fact when he had regard to the degree to which aquaculture activities within an interim AMA would lead to the exclusion of fishing.
[149] I therefore conclude that the Chief Executive was in error to consider the possible adverse effects of an interim AMA by reference only to its area, rather than by reference – where possible and in the manner I have outlined above – to the area likely to be occupied by aquaculture activities. If, as the Chief Executive contended, an aquaculture decision is simply a “zoning” decision, then the legislation could have made that clear by simply excluding fishing from interim AMAs. At least as I have understand the submissions made to me, and the legislation, that is not the approach adopted.
Was the Chief Executive right to consider the possible adverse effects of all the interim AMAs when making his decision about each of them?
[150] It is helpful to consider first the Chief Executive‟s decision to consider the
interim AMAs as previous aquaculture activities.
[151] By reference to the definition of that term, and contrary to what the Chief Executive concluded, I do not think the possible, future, effect of an interim AMA being considered for approval at the same time as another interim AMA is being considered for approval can possibility be considered to be a “previous aquaculture activity”. The emphasis in the definition is on the actual activity of marine farming, including as that activity occupies a coastal marine area. It is the cumulative effect “on fishing” of “previous aquaculture activities” that is to be assessed. By reference to the use of the word “previous”, and the defined meaning of the term “aquaculture activities”, I think it is to go too far to suggest that it is by reference to s 40(g) that the question of the cumulative effect of a number of interim AMAs that are to be considered at the same time is to be resolved.
[152] Having said that, I have no difficulty in concluding that the Chief Executive was right to consider the possible adverse effects of all of the interim AMAs when making his decision about each of them. In my view, it would simply be unrealistic not to do so. The purpose of an aquaculture decision is to assess adverse effect. When a number of interim AMAs are under consideration at the same time, it simply would not make sense to make decisions about each of them in isolation from the decisions to be made about the others of them. Some overview of the “overall” adverse effect is sensibly required.
[153] I accept that neither the 2004 regime itself, nor the Transitional Act, provide any direct guidance on just how the Chief Executive is to do that. Rather, and as I have indicated, the statutory scheme appears to assume that the Chief Executive will only ever make an aquaculture decision about one interim AMA at a time.
[154] This is an issue which caused the Chief Executive difficulty. It would appear that, at one stage, he was simply going to process the request for aquaculture decisions in the order in which the interim AMAs had been referred to by the TDC.
Later, and on the basis that he could rank adverse effect as between the interim AMAs, he took the approach that he did. Although it is now accepted that the outputs in the Scallop Model did not support his ranking decision, the question remaining is whether, in these circumstances, he should in some way have considered all of the interim AMAs when making adverse effect decisions about each of them. As I said at the hearing, I think the simple statutory presumption that the singular includes the plural can be relied on in this area. That is, s 40 is properly to be read in the circumstances that the Chief Executive encountered here as referring to interim AMAs in the plural.
[155] What, in effect, s 40 requires is that first the Chief Executive properly assess the adverse effect of each interim AMA, and therefore their overall cumulative adverse effect. By reference then to the available “head room” that his assessment of the adverse effect of previous aquaculture activities has indicated is available, he then needs to assess the extent to which reservations or determinations are to be made, and how those reservations and determinations should be made across the interim AMAs in question.
[156] How the Chief Executive may properly make that decision is, in effect, raised by my consideration of the issue of whether interim AMAs should be ranked for allocation purposes, or whether available headroom should be allocated “pro rata”.
In assessing the cumulative adverse effects of previous aquaculture activities should the Chief Executive have taken account of aquaculture activities for which consents had been given, but where no aquaculture activity had actually commenced?
[157] Aquaculture activities involve the actual activity of marine farming, including the occupation of a coastal marine area. Therefore, when s 40(g) requires the Chief Executive to assess the adverse effect of “previous aquaculture activities”, he has been directed towards an assessment of the adverse effect of such aquaculture activities as have already occurred.
[158] I am therefore of the view that the essentially factual assessment involved in an aquaculture decision needs to take account of the actual extent of previous aquaculture activities, and not simply the extent to which such activities may have been approved. Where, for example, certain aquaculture activities have not
commenced, notwithstanding they have been approved for many years, then – based on relevant information and his expert assessment of that – the Chief Executive may properly conclude that those approved aquaculture activities have not had, and have no realistic possibility of causing, an adverse effect on fishing.
[159] Indeed, in the way the Chief Executive excluded from the Scallop Model certain marine farming activities he would appear to have, in fact, been able to reach that conclusion in those cases. Therefore, if he can reach a similar conclusion in other cases, he should not in such cases proceed simply by reference to the areas with respect to which previous aquaculture activities have been formally approved.
In assessing the cumulative adverse effects of previous aquaculture activities should the Chief Executive have disregarded the adverse effects of aquaculture activities underway at the time (1992) of the QMS to scallop fishing in SCA7?
[160] In my view this question is, again, essentially a factual one. Based on Mr Stallard‟s memorandum, the very clear position is that the fishing entitlements held by scallop fishers in the SCA7 fishery were, as such, brought into existence when a number of marine farms had already been established. Therefore, in enjoying the entitlement to fishing represented by their ITQ in SCA7, fishers, and fishing, had already been excluded or displaced from those marine farm areas.
[161] On that basis, in my view the conclusion that those areas cannot have had an adverse effect on that fishing is inescapable. As SCA7 commercial scallop fishers have never had access to those areas, it cannot be said that those areas have had any adverse effect on those rights or the “fishing” they represent. That, as Sanford submitted, a wild commercial scallop fishery had existed in Golden and Tasman Bays for many years prior to 1992, and that that fishery had been regulated for many years, does not in my view alter that conclusion. In terms of s 41(2)(b), the fishery that the Chief Executive was considering was the SCA7 commercial scallop fishery, and the “fishing” carried out by the holders of relevant ITQ. The cumulative adverse effect to be assessed was the effect on that fishery and that fishing, not on a fishery and fishing that might have existed at some earlier point in history.
[162] At the same time, Mr Stallard‟s memorandum indicates that the area of those
marine farms was included within SCA7. That creates an uncertainty for me. If that
means that, in fact, QMS fishing in SCA7 did legally take place after 1992 in relevant licence or permit areas, but has subsequently been excluded (for example because of the way in which structures have populated permit areas), then there would be a relevant adverse effect to be measured.
[163] Subject to that one qualification, therefore, I conclude that the Chief Executive was wrong to take account of the area of marine farms in existence in SCA7 in 1992 when the QMS was implemented and ITQ allocated to scallop fishers when he assessed the cumulative adverse effects of previous aquaculture activities, and that he should have disregarded those adverse effects.
Buffer zone
[164] In assessing the effect of the interim AMAs the Chief Executive assumed that fishing would be excluded within the whole of that area, and in a 75 metre buffer zone.
[165] On this point, Sanford and Golden Bay Farmers supported the approach taken by the Chief Executive. Marlborough Aquaculture called for a smaller, 50 metre, exclusion area whilst SMW was somewhat agnostic. Again, reflecting their particular interests, Challenger said the exclusion area should have been at least 100 metres.
[166] This is very much a factual issue on which the Chief Executive was well placed to make a decision. I consider there was, in the record, support for the view he took as to the extent of the exclusion zone. I refer to independent submissions from a number of past and present commercial fishers, copies of which were provided in the extensive record put before the Court. I was not persuaded, on the basis of the submissions I heard and the materials I was pointed to, that that decision was wrong.
Ranking
[167] All parties, other than Sanford, supported the approach taken by the Chief
Executive. That is, determinations were made as regards interim AMAs on the basis
that maximised the available area for marine farming. In other words, those areas that had the lowest density of measured scallop catch were approved first. Based on its interpretation of s 40 as requiring each interim AMA to be individually assessed, Sanford argued that that was unlawful. Rather, having assessed the overall adverse effect, available headroom was to be allocated “pro rata”.
[168] In terms of the overall scheme of the legislation, I have no difficulty in concluding that the approach taken by the Chief Executive was a lawful one, albeit that here the Scallop Model did not provide a rational basis for the specific decision made. In the absence of any specific provision requiring interim AMAs either to be approved simply on the basis of the order in which an aquaculture decision is requested by a relevant authority, or on a pro rata basis, I consider it unnecessary to impose such a restriction. As I have said, I think s 40 did call here for an overall assessment of the interim AMAs as a whole. Having made that assessment, and if the information allows him to do so rationally, it is open for the Chief Executive to make determinations on the basis of maximising available space for aquaculture activities. In terms of s 8(1) of the Fisheries Act 1996, the overall purpose of that Act is to provide for the utilisation of fishing resources while ensuring sustainability. Where, in making an aquaculture decision, the Chief Executive identifies that there is available headroom before an undue adverse effect will be caused, allocating that headroom in a way which maximises available space for aquaculture activity is, in my view, consistent with providing for the utilisation of fishing resources where, as here, to do so does not raise issues of sustainability.
Pro rata
[169] Likewise, if – as was accepted was the position in terms of the information available information to the Chief Executive at the time he made the Aquaculture Decision – that information does not rationally provide a basis for a ranking approach to allocation, then the Chief Executive may allocate available space “pro rata”.
[170] In other words, I do not think it is necessary – where a ranking decision is not rationally open to the Chief Executive – that he should simply approach the question of making determinations or reservations on the basis of the order in which interim
AMAs were listed by a relevant authority when it requested the Chief Executive to make aquaculture decisions about a number of interim AMAs at the same time. I do not think that the scheme of the 2004 regime, or of the Transitional Act, indicates that simply because a relevant authority requests aquaculture decisions for a number of interim AMAs at the same time, and refers to those interim AMAs in a particular order, that that should in some way allocate priorities as between the interim AMAs and, in turn, marine farmers who may be interested in them.
[171] Just how a “pro rata” decision should be made was not addressed in any detail before me. As already noted, Sanford did provide an affidavit from Dr Breen which suggested a methodology that could be adopted. I do not think it is appropriate that I reach a conclusion on how a pro rata allocation should be made. Rather, that would be a matter for the Chief Executive in the first instance.
Concluding remarks
[172] In finalising this interim decision, I have become more firmly of the preliminary view that, as matters stand, this Court is not well placed to continue with those appeals and judicial review applications. Although that remains a matter on which the parties can make further application to me, and which of course I will consider with an open mind, I think my experience so far is that, both in terms of the practical implications of the position that was reached as regards the extent of reliance the Chief Executive could properly place on the Scallop Model, and what I assess to be the practical significance of the matters upon which I have reached my decisions in this interim judgment, the Chief Executive is the appropriate party to make the aquaculture decision that is now called for. This is particularly the case, given that that decision will be made on the basis of updated information.
[173] The question of costs is reserved.
[174] The parties have one month in which to respond to this decision, in terms of submissions as to how the underlying appeals and judicial reviews should now be formally and finally disposed of.
“Clifford J”
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