Ministry for Primary Industries v Cando Fishing Limited
[2023] NZHC 685
•31 March 2023
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CRI-2022-425-6
[2023] NZHC 685
UNDER the Fisheries Act 1996 IN THE MATTER
of an appeal against the dismissal of charges
BETWEEN
MINISTRY FOR PRIMARY INDUSTRIES
Appellant
AND
CANDO FISHING LIMITED
First Respondent
AND
CAMPBELL DAVID McMANAWAY
Second Respondent
Hearing: 26 July 2022 Appearances:
S A H Bishop and L R Stothart for Appellant
K M Proctor-Western and N M M Govind for Respondents
Judgment:
31 March 2023
JUDGMENT OF OSBORNE J
This judgment was delivered by me on 31 March 2023 at 2.30 pm pursuant to Rule 11.5
of the High Court Rules
Registrar/Deputy Registrar Date:
MINISTRY FOR PRIMARY INDUSTRIES v CANDO FISHING LIMITED [2023] NZHC 685 [31 March 2023]
The proceeding
[1] A prosecutor seeks leave to appeal on three questions of law from a decision of the District Court Judge dismissing charges brought against the respondents under fisheries legislation.
Introduction
[2] Commercial fishing for kina is regulated under the Fisheries Act 1996 (the Act) and under the Fisheries (Commercial Fishing) Regulations 2001 (the Commercial Regulations).1
[3] The Act and Commercial Regulations are administered by the appellant, the Ministry for Primary Industries (MPI).
[4] The first respondent, Cando Fishing Ltd (Cando), of which the second respondent Campbell McManaway was the director, was the holder of a fishing permit in relation to kina and was also a licensed fish receiver (LFR). Cando had LFR factory premises at Bluff.
[5]The San Nicholas was a registered fishing vessel owned by Cando.
[6] In 2018, the San Nicholas was fitted with facilities to enable harvested kina to be processed on board (by shelling the kina to remove the roe).
[7] On a voyage of the San Nicholas to Dusky Sound beginning in June 2018, kina harvested by divers operating on tenders were processed on board the San Nicholas. The roe packaged in pottles was transferred by helicopter from the San Nicholas to Te Anau and thence overland to Cando’s factory premises at Bluff.
The prosecution
[8]These events led to Cando and Mr McManaway being prosecuted by MPI.
1 Kina, an echinoderm (shellfish) also known as a sea urchin, bears the scientific name evechinus chloroticus, and has the allocated species code reference “SUR” for fisheries purposes in New Zealand.
[9] Cando faced six charges laid under s 230 of the Act — making a false or misleading statement on a record prescribed by the Act — and one charge under reg 33(1) of the Commercial Regulations — as a commercial fisher, possessing shellfish that they failed to ensure remained unshelled until delivered either to the first point of sale after being taken or a processing factory.
[10] Mr McManaway, as a director of Cando, faced six charges under s 246 of the Act, essentially mirroring the charges faced by Cando — on the basis he knew or should have known that the offence was being committed and that he failed to take reasonable steps to prevent or stop it.
[11] Following a defended hearing in the District Court, Judge Russell Walker dismissed all the charges (the Judgment).2
Facts
[12] Many of the facts were before the District Court in an agreed statement.3 In addition, three witnesses gave evidence. The two prosecution witnesses, Fishery Officer (FO) Gregory Forbes and Wayne Lowther, the retired General Manager of Commercial Fisheries Services Ltd (trading as FishServe), gave evidence and were cross-examined. The defendants called Steven Bishop, the Fleet Operation Manager of Independent Fisheries Ltd. He was not required for cross-examination.
[13] I reproduce the (slightly abbreviated and redacted) version of the Statement of Agreed Facts as set out by the Judge:4
1.The First Defendant is a limited liability company which holds licenses issued pursuant to the Act and its Regulations.
2.The Second Defendant was at all times material to these proceedings, a Director of the First Defendant.
3.Since 2001 Commercial Fisheries Services Limited, trading as “FishServe”, has been responsible for a number of commercial fisheries related processes under the Act and its Regulations pursuant to various transfer orders and contracts, including:
2 Ministry for Primary Industries v Cando Fishing Ltd [2021] NZDC 25197 [the Judgment].
3 Pursuant to Evidence Act 2006, ss 9(2) and 9(3). See Judgment, above n 2, at [11].
4 Judgment, above n 2, at [12].
a.keeping the Fishing Vessel Register and Permit Register under section 98 of the Act;
b.registering fishing vessels under section 103 of the Act;
c.issuing fishing permits under section 91 of the Act;
d.issuing fish receiver’s licences under Regulation 6 of the Fisheries (Licensed Fish Receivers) Regulations 1997;
[t]he receipt, checking and data entry of various returns and information required to be provided to the Chief Executive under section 189 of the Act and its Regulations, including:
i.Catch, Effort and Landing Returns;
ii.Monthly Harvest Returns;
iii.Licensed Fish Receiver Returns; and
e.Maintaining contact and communication with commercial fishers and licensed fish receivers.
4.FishServe has allocated the First Defendant the client number 9791521.
5.At all material times:
a.The First Defendant was the holder of fishing permit PMT0019031 issued under section 91 of the Act.
b.The San Nicholas was registered as fishing vessel 63780 under section 103 of the Act and the First Defendant was the operator to whom a certificate of registration in respect of the San Nicholas had been issued.
c.The First Defendant was the holder of fish receiver’s licence, issued under Regulation 6 of the Fisheries (Licensed Fish Receivers) Regulations 1997. A licensed fish receiver is commonly referred to as an “LFR”.
d.…
e.[M W] was the First Defendant’s Office Manager …
f.The FV San Nicholas was fitted with a satellite telephone system … which meant members of the crew aboard the vessel could send and receive SMS messages by using an application on their private cell phone.
6.The First Defendant has for many years exercised its fishing permit to take hundreds of tonnes of kina annually in the Southland and Sub- Antarctic Fishery Management Area which includes the coastlines of Foveaux Strait and Fiordland.
7.The usual process employed by the First Defendant to produce source documents required under The Fisheries (Recordkeeping) Regulations 1990 in relation to kina taken in commercial fishing trips of the San Nicholas and received by the First Defendant at Bluff was:
a.Books of self-duplicating unloading docket forms were kept on the vessel. The original copies of unloading dockets were able to be removed from the booklet;
b.A crew member and/or employee would hand-write the relevant details onto an unloading docket, either during the vessel’s return, or immediately on arrival, from the fishing trip;
c.The San Nicholas was met at the wharf by an employee of the First Defendant driving a truck belonging to the First Defendant;
d.The green kina were contained in dolavs which were lifted off the vessel and onto the wharf:
i.“Green” or “whole” kina had not as yet been processed and remained in its shell;
ii.“Dolavs” are large plastic bins commonly used in the fishing industry.
e.The dolavs of kina and the original copy of the unloading docket were then placed aboard the truck, which the employee then drove to the First Defendant’s fish processing premises in Bluff;
f.The dolavs of kina were off-loaded from the truck, weighed, the weights hand-recorded onto a piece of card, and the weighed dolavs placed into the factory chiller. Depending on space available in the chiller, this unloading and weighing process would be repeated during the day until all of the dolavs of kina had been weighed and placed in the chiller;
g.The Unloading Docket and card containing the record of weights were delivered to, or left on a clip inside the office for, the First Defendant’s Office Administrator who was responsible for fisheries reporting; and
h.The Office Administrator subsequently created a purchase invoice by hand-writing the relevant details into a book of self-duplicating forms kept for that purpose.
8.On 27 May 2013 the Second Defendant attended a meeting with representatives of the Ministry for Primary Industries (“MPI”) regarding his desire to process kina at sea in Fiordland.
9.The MPI representatives at the meeting were a Fisheries Analyst and the Manager Compliance and Response (Southland).
10.At the conclusion of the meeting, the Second Defendant indicated to the MPI representatives that he was likely to explore the option of establishing an additional ‘LFR premise’ on a barge in Fiordland to process his kina.
11.On 7 July 2017, the First Defendant made a request to the Southland Regional Counsel for the issue of a certificate of Compliance for the discharge of kina processing waste at sea.
12.On 3 October 2017 the Southland Regional Council issued a Certificate of Compliance pursuant to section 139 of the Resource Management Act 1991 to the First Defendant for the discharge to water within the Coastal Marine Area of kina processing waste. The activity may occur anywhere in Southland’s Coastal Marine Area, except that the discharge will not occur: within 100 metres of the shoreline in open coastal waters; and anywhere in Bluff Harbour, Riverton Harbour, Waikawa Inlet, or Halfmoon Bay. …
13.In 2017 and 2018, the Second Defendant had a transportable metal container fitted with a workbench designed and built for the purpose of being fitted onto the foredeck of the FV San Nicholas to enable the processing of kina at sea. The approximate cost of construction was
$75,000.
14.In the first half of 2018, Cando Fishing Limited was required to transition its management of food safety from the requirements of the Food Act 1981 into a Food Control Plan pursuant to the Food Act 2014.
15.Co-incident with that transition, the First Defendant was liaising with MPI regarding the appropriate food safety programme required for the processing of kina aboard San Nicholas. …
16. …
17.In an application dated 24 May 2018, the First Defendant applied to MPI to register a risk management programme (RMP) for the processing of kina aboard FV San Nicholas for assessment and registration. …
18.On 23 June 2018 the Second Defendant contacted crew members of the FV San Nicholas to make arrangements for a kina voyage departing on 28 June for 10 days. Crew members were aware that their duties on this trip would include processing of kina aboard the San Nicholas.
19.The FV San Nicholas was made ready for the voyage. Those preparations included adding the following items to the vessel:
a.the kina processing factor was fitted to the foredeck;
b.a helicopter landing pad was built onto the bow of the vessel;
c.freshwater tanks were loaded onto the deck above the wheelhouse;
d.tenders were loaded aboard the vessel for the use of diving teams when gathering the kina;
e.a TM-A Series Crane Scale capable of weighing dolavs of kina was purchased and stored aboard; and
f.the First Defendant’s standard pottles and lids used for packing processed kina and scales for measuring kina into the pottles were placed aboard together with bins for storing and transporting the pottles of processed kina;
…
20.On the afternoon of 28 June 2018, the FV San Nicholas left Bluff and steamed overnight to Dusky Sound, Fiordland. On board the vessel were:
a.the Second Defendant as master;
b.[four] divers …
c.[two] tender operators …
21.The divers and [one of the tender operators] were all self-employed fishermen contracting their services to the First Defendant. [The other tender operator was] an employee of the First Defendant. All were aware that their duties on this voyage would include processing kina aboard the vessel.
22.Fishing for kina was conducted on 29 and 30 June 2018 and on 1, 3, 4, 7 and 8 July 2018.
23.All fishing for kina was by the method of diving conducted from multiple smaller vessels (tenders) at varying distances from the San Nicholas. When not in use, these smaller vessels were tied up to or stored aboard the San Nicholas. The vessels were marked as tenders in accordance with Regulation 16 of the Fisheries (Commercial Fishing) Regulations 2001.
24.During fishing operations, the divers would dive for kina, storing them in catch bags carried with them. The catch bags would be taken to the smaller vessel and emptied into dolavs. The process would be repeated until sufficient kina had been placed into the dolavs.
25.The smaller vessels would return to the San Nicholas where a hydraulic deck crane referred to as a “Hiab” would be used to lift the dolavs containing kina off those vessels and place them on the San Nicholas’ deck.
26.Kina was processed aboard the FV San Nicholas during the period between 29 June to 4 July 2018, by:
a.“cracking” the kina open;
b.“spooning” the roe out of the kina;
c.“pottling” the kina roe into individual plastic pottles until a pre-determined weight of roe was in the pottle;
d.“lidding” the pottle off with brine and fitting a lid;
e.“packing” the pottles into a labelled plastic bin; and
f.“storing” the plastic bins in a chiller.
27.The pottles of processed kina in their plastic bins were transferred from the FV San Nicholas by helicopter on 2 and 5 July 2018.
28.On both occasions the helicopter flew the pottles of kina to Te Anau Airport where it was collected by an employee of the First Defendant who then drove the processed kina to the First Defendant’s premises at Bluff.
29.The Second Defendant was the master of the FV San Nicholas on the voyage that commenced on 28 June 2018 until he left the vessel by helicopter on the morning of 5 July 2018.
30.The Second Defendant, acting as an agent of the First Defendant, created the following returns and records:
a.Catch Effort and Landing Returns (“CELR”) numbered; 7751503, 7751504, 7751505, 7751506;
b. Unload dockets 2103, 2104, 215, 2106;
c.Purchase invoices 2901, 2902, 2903;
d.Records on forms bearing the pre-printed title “UNLOADING DOCKET” and form numbers 2401 and 2402.
31. …
32.A purchase invoice 2754 [was created] which was not prepared by the Second Defendant, but which relates to the kina landed from the FV San Nicholas on 9 July 2018. …
33.[R M] is the Second Defendant’s son and a self-employed fisherman who had worked as a skipper of the FV San Nicholas.
34.[R M] arrived at the FV San Nicholas on the afternoon of 2 July 2018 [with [M N], a factory supervisor employed by the First Defendant at its Bluff processing factory], having flown in on the helicopter that transferred pottles of kina off the vessel that day.
35. …
36. …
37. …
38.[R M] assisted with the processing of kina on the FV San Nicholas on 2, 3 and 4 July 2018.
39.On the morning of 5 July 2018, the helicopter returned to the vessel to uplift processed kina. The Second Defendant, [M N] and one of the divers were also scheduled to leave with it.
40.That morning a meeting occurred between the Second Defendant, [R M] and the crew. At the conclusion of that meeting the Second Defendant departed on the helicopter leaving [R M] as master of the FV San Nicholas.
41.No commercial fishing or processing of kina was undertaken on or from the San Nicholas on that day or the next (5 and 6 July 2018).
42.On 6 July 2018:
a.The Second Defendant relieved [R M] of his role as master of the San Nicholas.
b.[R M] held a text conversation with Fishery Officer Forbes.
c.The Second Defendant directed the remaining crew to fish for kina on 7 and 8 July 2018, and to hold the kina aboard in a green state. He advised the crew that he would to fly in [sic] on 8 July 2018 and steam the San Nicholas home to Bluff.
43.On 8 July 2018, a helicopter carrying the Second Defendant attempted to fly to the San Nicholas but was forced to turn back by bad weather. The Second Defendant arranged for the crew aboard to steam the FV San Nicholas back to Bluff overnight without him.
44.Two of the men aboard the vessel held the required skipper’s tickets and the San Nicholas arrived at the wharf in Bluff at approximately 6am on 9 July 2018 where it was met by Fishery Officers.
45.At approximately 7.25am the Second Defendant approached the vessel and spoke with Fishery Officer Mark Raynes who asked him if the vessel was LFR premises, he replied that he thought so.
46.FO Raynes indicated to the Second Defendant that the vessel was not listed on the First Defendant’s LFR as additional premises, that Fishery Officers would need to talk to him about that under caution, and that the First Defendant should not talk further to them about that.
Text message records
47.In the course of their investigation MPI obtained records of SMS messages (texts) to and from;
a.The Second Defendant’s phone,
b.The First Defendant’s Officer Manager, [M W]’s phone, and
c.The satellite phone aboard FV San Nicholas as recorded by [R M].
48. …
49. …
History of the First Defendant’s LFR Licence
50.The First Defendant’s application for a fish receiver’s licence was received in a complete form by FishServe on 24 July 2012. FishServe consulted with MPI and subsequently issued the licence. …
51.On 23 June 2015, [P S], an employee of the First Defendant, advised FishServe by email that the First Defendant had established a second factory at Picton.
52.FishServe responded on the same day by issuing a replacement LFR licence with the second factory listed as “Additional Premises”. …
53.On 9 July 2018, after Fishery Officers had met the San Nicholas, FO Raynes spoke with [M W]. Later that day she forwarded a copy of the vessel’s food safety RMP to FO Raynes.
54.FO Raynes replied on the 10 July 2018 advising that the process for listing San Nicholas as additional premises on the LFR licence was by application to FishServe.
55.Later that day [M W] forwarded an email to FishServe advising that Cando Fishing wished to add the FV San Nicholas as “an additional premise to our LFR 9791521”. …
56.FishServe subsequently consulted MPI over the issue and in a letter dated 11 September 2018, the Chief Executive declined the “application to condition LFR licence for additional premise”. …
57. …
58.The Second Defendant subsequently met with FishServe in November 2018 and wrote in November 2019 seeking reconsideration of the original decision of 11 September 2018.
59.In a letter dated 10th February 2020, the Chief Executive of FishServe wrote to the Defendants, regarding the “application to condition LFR licence for additional premises”. …
[14] The Judge next summarised the evidence of the three witnesses (with no issue taken on appeal as to the accuracy of the Judge’s summary). The Judge recorded:
Fishery Officer Gregory Forbes
[14]FO Forbes is a warranted fishery officer, with seven years’ experience.
[15] On 9 July 2018 he met the San Nicolas at the Bluff wharf. He was advised there was kina roe onboard. He seized various documentation from the vessel including the Catch Effort Landing Return book (“CELR”) covering the period 20 June 2018 to 9 July 2018.
[16] FO Forbes gave evidence regarding the information recorded in the CELR records, which includes trip data, including the date of the trip, landing date and point of landing, the name and registration number of the vessel; catch/effort data including the date of catch, the method used, the position of the vessel, the time spent/effort expended in fishing, the number of divers used, the target species, and the weight of the fish recovered; and catch landing data including the species recovered, the landed state of the fish, the number and type of containers used, and the green weight of fish recovered.
[17] FO Forbes also seized a purchase invoice book recording fish purchased by or supplied to a Licensed Fish Receiver (“LFR”), a record to be completed immediately, or, if an unload docket is completed, then as soon as reasonably practicable for any fish the LFR takes possession of from a commercial fisher.
[18] Cando operate what is known as a vertically integrated system where it is both a commercial fisher and a LFR, and as such they are required to complete the paperwork as if they are two different persons, but the timing and requirement to complete documentation under the regulations does not change.
[19] FO Forbes outlined his interpretation of the data contained in the CELR’s for the period commencing 28 June 2018 and ending 4 July 2018.
[20] In relation to CELR number 7751503, FO Forbes interpreted the various codes recorded to indicate that on 29 June 2018, 30 June 2018, and 1 July 2018 diving occurred for a target species of kina, and that only kina was taken. Four divers were used for various times each day. Catches for each day were estimated at 1,050, 1,000 and 1,500 kg respectively.”
[21] The lower portion of the form recording the catch landing data records the fish when it is landed from the vessel. It was FO Forbes’ view that “a landing occurs when fishes are removed from the registered fishing vessel. If kina is removed from the vessel via helicopter then that is a landing and generates the requirement to complete this part of the return immediately”.
[22] FO Forbes interpreted the codes in the CELR and took it to mean that all the Southland kina were landed in a green state, and landed in 15 containers recorded as “dolavs” with a content weight between 150 - 300 kg. The destination was recorded as landed to the LFR number relating to Cando Fishing. FO Forbes said he was aware that Cando operates two LFR premises
– one in Picton and one in Bluff.
[23] The corresponding unloading docket dated 2 July 2018 records an unload of kina or the fish receiver taking possession of 15 dolavs of kina in a green state.
[24] FO Forbes interpreted this record to communicate that Cando in its capacity as a LFR received Southland kina that was landed in a green state in 15 dolavs on 2 July 2018:
not that kina was discharged to the fish receiving premise in roe form and contained in punnets that have been placed in fish bins.
[25] The corresponding page [2901] of the purchase invoice book for the same day (2 July 2018) records the receiving of 15 dolavs of kina in a green state from Cando Fishing Ltd off the vessel San Nicolas with a recorded (net) green weight of 4276 kg.
[26] FO Forbes’ evidence was that the records did not reflect that kina was discharged to the fish receiving premises in roe form and contained in punnets that had been placed in fish bins, and that “no fishery officer would interpret the above three documents to be communicating that kina roe was landed from the vessel.”
[27] FO Forbes then took the court through the CELR, unloading docket book, and purchase invoice records for 3 July 2018 and 4 July 2018, which he said followed the same process and showed that kina had been landed in a green state, but was eventually discharged from the vessel in the form of roe in pottles on 5 July 2018.
[28] A subsequent page of the CELR 7751506 recorded diving effort for three divers on 7 and 8 July 2018 as being landed in a green state in dolavs which matched what FO Forbes observed on the vessel’s arrival in Bluff.
[29] On the vessel’s arrival in Bluff, FO Forbes seized punnets of kina roe that had been processed onboard the vessel, and a further 272 punnets from the factory which were yet to make it to market.
Wayne Russell Lowther
[30] Mr Wayne Lowther, now retired, was formerly the general manager for Commercial Fisheries Services Ltd, operating under the trading name ‘FishServe’. His evidence was given by VMR and after reading his brief he was available for cross-examination.
[31] After carefully traversing how FishServe became an Approved Service Delivery Organisation able to exercise powers, duties and functions under the Act, Mr Lowther produced Cando Fishing Limited’s fishing permit, and confirmed the company had the fishing vessel San Nicolas 36780 registered as a fishing vessel. He gave evidence that on 23 July 2012 Cando Fishing applied to be an LFR. Mr Lowther’s evidence was that as part of the application process an application was completed that required them to list all premises where fish will be received, stored or processed. At the time of the application the only premises requested was 248 Ocean Beach Road, Bluff.
[32] On 23 June 2015, Cando applied to add the premises in Picton to their LFR licence. A fish receiver licence was subsequently issued with the principal premises details recording the Bluff premises, with the Picton premises being recorded as additional premises in a schedule attached to the Licence to Receive Fish.
[33] Mr Lowther gave evidence that on 10 July 2018, FishServe received an application to add a premises to the licence, being the FV San Nicolas. That was subsequently declined.
[34] The application to have the San Nicolas added as an LFR premises was later withdrawn by Cando, on 3 March 2020.
[35] Mr Lowther confirmed that CELR’s were received for the month of June 2018 recording landings on 5, 13 and 22 of June 2018, with respective green weights of 8476 kg, 10,050 kg, and 7700 kg, totalling 26,226 kg of kina, which was in accordance with the monthly harvest return for June 2018 declaring 26,226 kg of green kina. The same figure was recorded in the LFR return reports for June 2018 with Cando in its capacity as LFR reporting 26,226 kg of green kina from the Cando fishing permit. Returns for June, July and August 2018 all showed the fish declared as being received by the LFR for each month match the amount of fish reported as landed by the company.
Stephen John Bishop
[36] Mr Bishop was the only witness called by the defence. His brief was handed up and he was not required for cross-examination.
[37] Between 2003 and 2020 he was employed as Fleet Operations Manager of Independent Fisheries Ltd. Although now semi-retired, he still holds a position as Fleet Management Advisor for that company. In a long career in the fishing industry, he has held senior positions in both fisheries enforcement and the fishing industry for over 35 years and, at times, had direct managerial control of enforcement and registry functions on behalf of the relevant Ministry.
[38] Mr Bishop gave evidence both in terms of his role at Independent Fisheries, as well is his experience in fish processing factories and Limited Processing Fishing Vessels. He produced a register of Limited Processing Fishing Vessels and a register of Risk Management Programmes maintained by MPI and printed from their website. He also produced the Fisheries (Conversion Factors) Notice 2014 which refers to the conversion factor required to convert the weight of fish in a processed state back to green weight, which includes several references to squid (which is defined as a “shellfish”) as well as deep sea crab legs and scampi tails.
[39] The relevance of that evidence is in relation to the reg 33 charge, regarding the opening of shellfish. From Mr Bishop’s experience on the vessels he has managed - where processing of squid and other shellfish is reported, and where MPI officials including fishery officers and Ministry observers have been on board when processing of shellfish has occurred at sea on these vessels, or been present when shellfish has been landed in a processed form - he cannot recall anyone from MPI or FishServe taking issue with the legality of processing shellfish (squid) at sea by those vessels.
[40] Mr Bishop also produced a video of the FV Aukaha, a vessel he was familiar with, which includes an onboard factory which had a number of characteristics including a clearly defined boundary, working on smooth and hygienic surfaces, adequate task lighting, and appropriate food processing clothing, including hairnets, overalls, gloves, aprons, and white gumboots. He also referred to an example of a smaller vessel, the FV Bilyara, which operated as a scampi trawler with a smaller processing factory onboard.
[15] Also in evidence was a video interview recorded between F O Forbes and Mr McManaway. The Judge observed in relation to that interview:
[42] The interview was largely exculpatory in which Mr McManaway explained that he had been working on the idea of processing kina at sea for a number of years, due to the time it took to steam to Dusky Sound, dive for kina, and return before the catch spoiled. Fishing and processing within Dusky Sound was, according to Mr McManaway, the only way that catching kina in that area was economic. He explained how the San Nicholas had been modified at not inconsiderable cost to add a helipad and an onboard “factory”, as well as having to obtain permission from Environment Southland to discharge kina shell and kina juice back into the water.
[43]Mr McManaway had the following exchange with FO Forbes:
CM: … So we got compliant on that, got consent to discharge, put the factory on and thought everything was good, we had all the paperwork and all the boxes ticked, so away we went to go and get started. So, so we went away and done that and flew some out and yeah what else?
GF:So you’ve been planning on doing that for quite a while and it’s basically to try and fish those areas that aren’t getting fished and it’s the only economical way to fish them is to be round there basically processing them?
CM: Yeah that’s it so the, the main time I had for doing this at the best time was in the, in the winter months. The winter months you have short days so we’d only get to dive, we only need to dive two or three hours to get enough product because the main part of this operation is the processing because they are so labour intensive these kinas, to get the roe out, so two people would only need to have to dive two or three hours at the most …
[44] Towards the end of the interview was the further following short exchange between FO Forbes and Mr McManaway:
GF: So when we did this trip? What did you think your requirements were regarding LFR premises? Did you think you needed to be an LFR premise for that trip, the processing trip?
CM: No because, because we were Cando Fishing, we had all the, ah, we had the Catch Effort, the Landing, ah the Landing Docket, we had everything else and as they came out we had the paperwork that [M W] had organised for us to send out with the product. It was all good.
The offences charged
Section 230(1)(b): improper divulging of information
[16] Section 230(1) of the Act, under which both Cando and Mr McManaway were charged, is focused on the accuracy of records required to be kept. It provides:
230Neglect or refusal to supply particulars, and improper divulging of information
(1)Every person commits an offence who—
(a)fails to keep, or provide, any accounts or records, or who neglects or refuses to provide any records, return, or information, when lawfully requested or required to do so under this Act; or
(b)makes any false or misleading statement, or omits any material information, in any communication, application, record, or return prescribed by or in accordance with this Act, or required for its administration.
…
[17]The elements of this offence are (as recorded by the Judge) that:5
(a)a person;
(b)makes a false or misleading statement;
(c)on a record prescribed by the Act.
Section 246: liability of directors
[18] Mr McManaway was charged as a director of Cando in relation to offences committed by Cando. Section 246(1) of the Act provides for the liability of directors (and managers):
Liability of directors and managers
(1)If a body corporate commits an offence against this Act, every director, and every person concerned in the management of the body corporate, also commits an offence if it is proved that—
5 Judgment, above n 2, at [7].
(a)the act or omission that constituted the offence took place with the director’s or person’s authority, permission, or consent; or
(b)the director or person knew or should have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
[19]The elements of the s 246 offence (as identified by the Judge) are:6
(a)a body corporate commits an offence under the Act; and
(b)the director:
(i)knew; or
(ii)should have known that the offence was being committed; and
(iii)failed to take reasonable steps to prevent or stop it.
Regulation 33
[20] Cando was additionally charged with one offence under reg 33 of the Commercial Regulations, which provides:
33 Restrictions on opening shellfish
(1)Commercial fishers taking or possessing shellfish must ensure that they remain unshelled until they are delivered either to the first point of sale after being taken or to a processing factory.
(2)Commercial fishers or persons engaged in the business of fish processing must not land or begin shelling, shucking, or processing dead shellfish.
[21]The elements of the offence (as identified by the Judge) are accordingly:
(a)a commercial fisher;
(b)possessing shellfish;
6 Judgment, above n 2, at [8].
(c)failed to ensure they remained unshelled;
(d)until they were delivered either:
(i)to the first point of sale after being taken; or
(ii)a processing factory.
Matters not the subject of charges (the CELRs)
[22] In addition to the requirements for unloading dockets and purchase invoices under the Fisheries (Recordkeeping) Regulations 1990 (Recordkeeping Regulations) (the subject of charges against Cando), there also exist under the Fisheries (Reporting) Regulations 2017 (Reporting Regulations) requirements for landing returns.
[23] The landing return required under reg 6 of the Reporting Regulations is a catch effort and landing return (“CELR”). The form provided for commercial fishers and completed by Cando in its reports as fisher in relation to the June/July 2018 fishing has two tables (see Schedule A). The upper table sets out the details of fish taken (“Catch/Effort Data”) and the lower table sets out, under the heading “Catch Landing Data”), details in relation to (amongst others) landed state, container type, and greenweight.
[24] Cando completed CELRs in relation to the June/July 2018 fishing. Cando was not prosecuted in relation to the information contained in the CELRs.
Illustration of records
[25] The relationship between the documents to which I have referred (CELR; unloading docket; and purchase invoice) may be seen in sample copies in Schedules A, B and C at the conclusion of this judgment. Recorded through the documents are the 15 dolavs of kina recorded as unloaded and purchased in green state on 2 July 2018.
Application for leave to appeal on questions of law
[26] Under s 296(2) Criminal Procedure Act 2011 a prosecutor or defendant may, with the leave of the first appeal court, appeal on a question of law against a ruling by the trial court. This applies under s 296(3)(b) of the Act relevantly to this case where the question of law arises in the determination of a charge.
[27] The respondents formally opposed the granting of leave. But counsel on both sides helpfully focused their (lengthy) submissions on the substance of the appeal.
[28] For the reasons that follow, the subject matter of the appeal was of sufficient complexity (and novelty) to justify the grant of leave, which will accordingly be granted, but subject to an amendment of the third question from that initially framed.7
MPI’s grounds of appeal
[29]MPI sought leave to appeal in relation to the three questions:
Question 1:Did the Judge err in concluding, as a matter of law, the transfer of kina from tender vessels to the San Nicholas was a landing?
Question 2:As a result of this error, was the Judge wrong in law to hold the relevant unloading dockets and purchase invoices were neither false nor misleading and, on that basis, dismiss the corresponding charges?
Question 3:Did the Judge err in concluding, for the purposes of reg 33 of the Commercial Regulations, the first point of sale was when the kina were brought aboard the San Nicholas and presented for primary processing?
[30] The third question as framed did not clearly address the fact that the obligation under reg 33 of the Commercial Regulations — to keep kina unshelled — may come
7 Pursuant to s 299 Criminal Procedure Act 2011. (The initially framed question failed to address the fact the reg 33 charge had been dismissed on the basis the MPI had failed to prove there had been a delivery under both alternative forms of delivery).
to an end upon the occurrence of alternative events (delivery to the first point of sale or delivery to a processing factory). As the Judge found both events had occurred, Question 3 is more appropriately reframed so as to refer to delivery to the first point of sale and to delivery to a processing factory as alternative findings. The leave granted is accordingly to Question 1 and 2 as submitted, but to Question 3 in this amended form:
Question 3:Did the Judge err in concluding, for the purposes of reg 33 of the Commercial Regulations, that the delivery of the kina from tenders to the San Nicholas was to the first point of sale after being taken and constituted delivery to a processing factory?
The District Court Judgment
The questions to be answered
[31]The Judge considered the central issues could be summarised by two questions:
(a)When are fish “landed” for the purpose of the Act?
(b)Was the defendant in breach of reg 33 of the Commercial Regulations by opening shellfish prior to the first point of sale or delivery for processing?
[32] The first question related to whether Cando “landed” the kina when it was transferred from tenders to the San Nicholas, or whether it “landed” the kina when the kina arrived at Cando’s principal premises (at Bluff) (the “principal premises” being recorded on their Fish Receiving Licence).
When are fish “landed”?
[33] The Judge first identified the Act, the Commercial Regulations and the Reporting Regulations as the relevant legislative framework. The Commercial Regulations do not define “landing”, so the Judge set out relevant material to assist in his interpretation of the word.
[34] The meaning of “landing fish” had previously been considered by this Court in Staunton Investments Ltd v Chief Executive Ministry of Fisheries (Staunton), albeit in a different context (the handling of by-catch).8 In that case, the Court rejected counsel’s submission that “to land catch” means (amongst other things) to report or provide returns for the by-catch, and instead held that “to land catch” means to harvest (by-catch) and return it to the sea.9 The Judge went on to note, when discussing the distinction between “taking” and “landing” (below from [39]) that Staunton supported the distinction between “taking” and “landing”.
[35]The Judge set out reg 4 of the Reporting Regulations, which provides:
4 Meaning of landing
(1)In these regulations, landing means,—
(a)in relation to fish taken using a vessel, except in the fresh waters within New Zealand,—
(i)the removal of a vessel containing fish from New Zealand fisheries waters for the purpose of moving the vessel to any place in New Zealand; or
(ii)the removal or discharge of fish from a vessel (other than by placing the fish in a holding pot in the sea); or
(iii)the removal of a vessel containing fish from New Zealand fisheries waters under an approval granted under section 110 of the Act; or
(iv)the disposal, or loss from the permit holder’s possession, of fish that had been placed in a holding container on land:
(b)in relation to fish taken without using a vessel, or taken using a vessel in the fresh waters within New Zealand,—
(i)the disposal or loss of fish from the permit holder’s possession (including fish held by the permit holder in a holding container); or
(ii)the removal of fish from the immediate vicinity of the body of water from which the fish was taken.
(2)For the purposes of subclause (1)(a)(ii), fish must be treated as being removed or discharged from a vessel if—
8 Staunton Investments Ltd v Chief Executive Ministry of Fisheries [2004] NZAR 68 (HC).
9 At [41]–[42].
(a)the vessel ceases to be registered or is re-registered under the Act, for whatever reason and by whatever mechanism; or
(b)fish are held on board the vessel at the close of a fishing year and the vessel is operated by, or on behalf of, a person who, during the fishing year ending on that day, has held 100 000 kg or more of annual catch entitlement under the Act.
[36] The Judge then referred to the explanatory note of the CELR Book, which states that a simplified definition of the term “landing” is “what you did with the fish after you have taken it”. The CELR Book identifies the most common form of “landing” as supplying fish to an LFR but notes there are many other types of “landing”. This includes, as an example, the storage of fish in a holding receptacle (such as a holding pot at sea, or holding tank, or freezer or chiller on land), discarding fish and transhipping fish to another vessel. The explanatory note also said fish can be “landed” more than once.
[37] While the Commercial Regulations do not define “landing”, the Judge concluded the Act and the Regulations incorporate a distinction between “landings” and “transhipments”. The Judge noted the definition of “transhipment” in s 2 of the Act as “the transfer of fish …. from one vessel to another vessel”. Section 110 of the Act (as referred to in reg 19 of the Commercial Regulations) then relevantly contains reference to transhipment, providing:
Fish taken in New Zealand fisheries waters must be landed in New Zealand
(1)No person shall land, at any place outside New Zealand, any fish, aquatic life, or seaweed taken in New Zealand fisheries waters unless the landing outside New Zealand has the prior approval of the chief executive and is in accordance with any conditions imposed by the chief executive.
(2)For the purposes of subsection (1) of this section, fish, aquatic life, or seaweed shall be deemed to have been landed at a place outside New Zealand if—
(a)It is transported beyond the outer limits of the exclusive economic zone by the vessel that took it; or
(b)It is taken (otherwise than from a vessel) and transferred to a vessel and then transported (whether in that vessel or any other vessel) beyond the outer limits of the exclusive economic zone without having been lawfully purchased or
acquired by a licensed fish receiver in New Zealand before transportation; or
(c)It is transhipped, from the vessel that took the fish, aquatic life, or seaweed, to another vessel.
(3)The conditions that may be imposed on any approval granted under subsection (1) of this section include conditions relating to one or more of the following:
(a)The vessel that will take the fish, aquatic life, or seaweed:
(b)Any vessel which will receive the fish, aquatic life, or seaweed:
(c)The manner and conditions under which the storage, transportation, transhipment, recording, reporting, landing, and disposal of the fish, aquatic life, or seaweed will take place.
…
[38] Later sections in the Act — ss 111, 113K, 223(3)(a) and 227(1)(d) — all deal distinctly with “landing” and “transhipment”.
[39] The Judge also identified a distinction drawn in the Act and the Commercial Regulations between “taking” and “landing”.10
[40] The Judge concluded the definition of “landing” is as set out in cl 4(1)(a) of the Reporting Regulations, but expanded this definition in the following way:
(a)The removal or discharge of fish from a vessel [encompassed under cl 4(1)(a)(ii)] includes:
(i)Taking the fish off the vessel to put into storage.
(ii)Taking the fish off the vessel and placing it on another vessel (transhipment).
(iii)Taking the fish off the vessel and giving it to a Licenced Fish Receiver.
…
10 With reference to the Commercial Regulations, reg 19 and the Fisheries Act 1996, ss 2, 110, 111, 113K, 223(3)(a) and 227(1)(d).
(d) [As set out in cl 4(1)(a)(iv)] the disposal, or loss from the permit holder’s possession, of fish that had been placed in a holding container on land, would include removing a fish from storage to give to a licensed fish receiver.
[41] Given these findings, and most relevantly the determination that “landing” encompasses the act of “transhipment”, the Judge found the act of removing the fish from the tenders and transferring them to the San Nicholas was a “landing”. Accordingly, that transfer triggered the requirement to complete the catch landing data and unloading docket. Having “drawn the line” at this point, this led to the Judge concluding the CELRs, unloading dockets and purchase invoices accurately reflected the position. They were neither false nor misleading.
Was the defendant in breach of reg 33 of the Commercial Regulations 2001 by opening shellfish prior to the first point of sale or delivery for processing?
[42]Regulation 33 of the Commercial Regulations provides:
Restrictions on opening shellfish
(1)Commercial fishers taking or possessing shellfish must ensure that they remain unshelled until they are delivered either to the first point of sale after being taken or to a processing factory.
(2)Commercial fishers or persons engaged in the business of fish processing must not land or begin shelling, shucking, or processing dead shellfish.
[43] The Judge considered the meaning of “processing factory”, a term not defined in the Commercial Regulations. The Judge considered the definition in and provisions of the Animal Products Act 1999 and in the related rules.11 By reference to the food safety/risk management provisions in that legislation relating to the primary processing of product, his Honour concluded the purpose of reg 33 is similarly to mitigate the food safety risks associated with shellfish. The Judge identified the biohazard and food safety risks associated with shellfish as the reason for the fisher’s obligation to ensure shellfish remains unopened until it reaches the processing factory. Accordingly, under r 7(2) Animal Products (Definition of Primary Processor) Notice 2000, the removal of roe from kina is a primary process for the purposes of the Animal Products Act. The Judge concluded the term “processing factory” in reg 33 means the
11 Animal Products Notice: Specifications for Products Intended for Human Consumption (Ministry for Primary Industries, 14 August 2020).
place where primary processing of shellfish occurs. What constitutes primary processing is detailed in the Animal Products (Definition of Primary Processor) Notice.12 Primary processing is contrasted with secondary processing — the latter being where the animal product is processed at any stage beyond its primary processing.13 There are specific rules in place for the handling and processing of fish by primary processors.14
[44] The Judge concluded “processing factory”, as used in reg 33, refers to the facilities of primary processors because it is they who must have a risk management programme that identifies, controls, manages and eliminates or minimises hazards and risks in relation to the processing of animal material.15 Secondary processors must also have a risk management plan in place. But, the Judge noted, they come second in time, so it cannot have been the legislation intention that the shell remain on until secondary processing.
[45] The Judge considered there was no evidence that Cando’s factory in Bluff was a “primary processor” that made a methodical assessment of the suitability of the kina and performed some form of processing as wet storage. Many of the processes that would indicate the factory was the primary processor were in fact carried out by Cando on the San Nicholas at sea, such as removing roe from the kina. If the kina were not to be transported onshore for processing, then the processing on the San Nicholas was by definition “primary processing”.
[46] The Judge held it was irrelevant to determining whether Cando, in relation to the work undertaken on the San Nicholas was a primary processor, that the San Nicholas required a risk management plan and did not have one. He held that MPI had not excluded the reasonable possibility that primary processing occurred on the boat and that it was therefore a processing factory for the purposes of reg 33. Cando was therefore not in breach of the reg 33.
12 Animal Products (Definition of Primary Processor Notice) 2000, cls 7 and 8.
13 Animal Products Act 1999, s 4.
14 Animal Products Notice, above n 11, at r 18.13.
15 Animal Products Act 1999, s 17.
[47] The Judge also considered the meaning of “first point of sale”. He noted a feature of this case is that Cando was both a commercial fisher and an LFR. In other instances, where these roles are held by different entities, it will be clearer when the sale has been effected because there will have been a transfer between different entities. The Judge observed there must be a line drawn some time between the kina being taken from the ocean and the kina arriving at the factory in Bluff that denotes the transfer. For Cando, that point was asserted to be when the kina was transferred from the tenders to the San Nicholas. For MPI, the point of transfer was asserted to be when the kina was delivered onto helicopters (or possibly at some later point).
[48] The Judge concluded that the transfer occurred when Cando’s functions evolved from being that of a commercial fisher to that of an LFR. The Judge considered the landing and presentation of the kina for processing (on the San Nicholas) were two major indicators that marked Cando as ceasing to act as a commercial fisher and beginning to act as an LFR. These actions supported Cando’s contention that the point of sale was when the tender vessels landed the kina on the San Nicholas. The Judge considered that adopting any other time as the point of sale would be arbitrary.
[49] Given that finding, Cando did not unshell any kina before the kina reached the first point of sale. Therefore Cando was not acting in breach of reg 33.
The parties’ submissions on appeal
MPI’s submissions
[50] For MPI, Ms Bishop submitted the correct Judge had erred in concluding the transfer of kina from tender vessels to the San Nicholas was a “landing” as contemplated by the Act. She submitted that in particular the transfer was not a “transhipment” or, more broadly, a “landing”.
[51] In Ms Bishop’s submission, the kina were “landed” when they were removed from the San Nicholas and placed on board the helicopter (and subsequently transported to the LFR premises at Bluff).
[52] Ms Bishop submitted the correct application of the term “landing” is to be determined by the particular circumstances of the fishing activity and the conditions of the relevant fishing permit. That, she said, is consistent with the purpose of the Act, namely to provide for the utilisation of fishery resources while ensuring sustainability. The importance of determining when fish could lawfully be “landed” is that the passing of possession to the LFR triggers the requirement to complete the documentation (purchase invoices and unloading dockets) that forms the basis of the charges. That can happen only after a “landing”. The purpose of such documentation is to allow fishery officers to gather information and to monitor compliance with commercial fishing, with sustainability at the forefront.
[53] Ms Bishop noted that, although a transhipment (defined as the transfer of fish from one vessel to another vessel) may be deemed a “landing”, the fisheries legislation confines this type of transfer of fish to circumstances where the fish is not going to be landed to an LFR (a situation that does not apply in this case).
[54] In addition, Ms Bishop submitted by reference to s 108 of the Act, the tenders used by the San Nicholas are not separate vessels as defined under the Act — they are instead to be treated as part of the registered fishing vessel.
[55]In these circumstances, Ms Bishop submitted the Judge applied the wrong test
— by incorrectly determining a “transhipment” had occurred the Judge erred in concluding the purchase invoices and unloading dockets were neither false nor misleading.
[56] In Ms Bishop’s submission, the correct finding was that the kina were not landed until they were removed or discharged from the San Nicholas to the helicopter because the fishing permit does not list the San Nicholas as a “place where fish may be landed” and the LFR licence does not list the San Nicholas as the “principal” or “additional” premises. The purchase invoices and unloading dockets therefore incorrectly stated the state of the kina at the point of “landing” as green state.
[57] Ms Bishop next referred to the requirement under reg 33 of the Commercial Regulations that shellfish must be delivered “either to the first point of sale after being
taken or to a processing factory”. Ms Bishop submitted the San Nicholas did not qualify as a processing factory because it did not have authorisation to conduct any kind of process aboard.
[58] In Ms Bishop’s submission, the specific reference to “factory”, instead of “premises”, excludes vessels. She additionally observed that kina (unlike other species of fish that are processed on factory ships) does not have a conversion factor which prevents an LFR (being an important control point) from being able to independently verify its greenweight if processed at sea.
[59] Ms Bishop submitted that (the transfer to the San Nicholas not being a “landing”) it also follows that the first point of sale was not when the kina were brought on board the San Nicholas but instead was when they were transferred from the San Nicholas to the helicopter.
Respondents’ submissions
[60] For the respondents, Ms Proctor-Western identified the time at which an LFR takes possession of fish as being the heart of the appeal.
[61] Ms Proctor-Western noted that s 192(2) of the Act (as summarised at [85] below) contemplates the dual role a single entity may have as both commercial fisher and LFR. When an entity takes possession of fish in its capacity as LFR, the duties of record keeping (including in relation to unloading dockets and purchase invoices) arise. As it is the LFR that is licensed (and not its premises) the obligation (and the right) of the LFR is to make its records as soon as the LFR receives the product.
[62] Ms Proctor-Western further noted that landing and transfer of possession of are not necessarily synonymous — when and where a landing occurs is not determinative of the issue of when and where the LFR takes possession or control.
[63] Ms Proctor-Western invokes the definition of a “landing” under the Reporting Regulations, being “the removal or discharge of fish from a vessel” and the definition of “point of landing” as including “a place where fish are transferred from a vessel to another vessel that is a New Zealand fishing vessel …”.
[64] Ms Proctor-Western submits the integrity of the regulatory scheme depends on all landings being captured by reporting wherever they occur. She observed the absence of any link in the legislation between landing point conditions on a fishing permit and the definition of landing.
[65] In her submission, the landing of the kina in June/July 2018 occurred when transferred from the tender vessels to the San Nicholas. She invited the Court to reject the appellant’s contention that Cando’s tenders were not “vessels” — noting that Cando’s recording and reporting obligations arise under pt 10 of the Act and not under pt 6 (which is the Part containing the s 108 provisions as to tenders being treated as part of the associated registered fishing vessel).
[66] In Ms Proctor-Western’s submission the narrow interpretation of “landing” favoured by MPI would allow commercial fishers to avoid reporting obligations and would in fact hamper MPI in monitoring compliance.
[67] Ms Proctor-Western rejected any suggestion that the processing of the kina at sea was a prohibited activity — the issue under reg 33 of the Commercial Regulations is whether the conditions of that regulation have been met in order to allow processing to occur.
[68] Ms Proctor-Western referred to fish species (such as squid and scampi) that are regularly processed at sea on factory ships (the subject of the evidence of Mr Bishop.
[69] Ms Proctor-Western submitted the function of reg 33 is to ensure that only live shellfish are processed — reg 33 is not a provision about record keeping or compliance monitoring. She further noted that in relation to kina, in any event, there is no size limit.
[70] Ms Proctor-Western submitted that, because the kina were transferred to Cando in its capacity as LFR prior to processing on board the San Nicholas, it follows that Cando did not process the shellfish as a commercial fisher.
[71] In relation to the first point of sale under reg 33, Ms Proctor-Western submitted two provisions of the Act in particular apply in this case where Cando had the dual capacities of commercial fisher and LFR:
(a)s 2 of the Act, defining “sale” as including … “receiving or having in possession for sale, sending or delivering for sale …”; and
(b)s 192(5) of the Act, whereby the point at which the shellfish were transferred constitutes the “first point of sale”.
[72] Ms Proctor-Western submitted the San Nicholas, through the fitting-out that had occurred, constituted a “processing factory” because:
(a)“premises” means any land or building, and includes any vessel (s 2 of the Act);
(b)“processing” includes shelling (reg 2 Fisheries (Licensed Fish Receivers) Regulations 1997); and
(c)the ordinary meaning of “factory ship” refers to a ship with facilities for immediate processing of the catch;16 and
(d)there is a practice within the fishing industry (including in New Zealand) of having vessel-based processing factories.17
[73] Ms Proctor-Western therefore submitted the key question in relation to the reg 33 charge was whether Cando undertook the processing activity at the (San Nicholas) premises. She submitted the factual answer to that question is that kina was shelled on the San Nicholas, an activity that expressly falls within the definition of “processing”. She observed that whether or not a particular activity is authorised does not change the nature of the activity.
16 Referring to J Pearsall J (ed) (1999) The New Zealand Oxford Dictionary of English, (Oxford University Press, Oxford, 1979).
17 Referring to the evidence of Mr Bishop.
[74] Finally, Ms Proctor-Western submitted there is nothing in the legislation to preclude a vessel containing a processing factory or, put another way, to require a processing factory to be an independent structure based on land — a factory is defined by function and facilities rather than by the location and structure that accommodates it.
Discussion
Introduction
[75] Fundamental to the discussion that follows is that physical events or transactions — landing in relation to the unloading dockets and the purchase invoices (under ss 230 and 231 of the Act) and delivery to the first point of sale or to a processing factory (under reg 33 of the Commercial Regulations) — created obligations alleged by MPI to have been breached.
[76] Accordingly, in relation to the unloading docket and purchase invoice charges the Judge was correct to identify as the key issue “when are fish landed for the purposes of the fisheries legislation?” The recording and reporting obligations of Cando as LFR in the form of unloading dockets and purchase invoices arose when the physical act of landing occurred, regardless of whether Cando in so landing the kina was acting in breach of any other statutory or regulatory obligations.
[77] I accept the submissions for the respondents that the integrity of the regulatory regime for record keeping and reporting depends on all landings being captured wherever they occur (and whether or not they should have occurred in that place). If other regulatory obligations have been breached, the regulator’s entitlement, if it so chooses, is to bring charges in relation to those other breaches. The task of the Judge below and of this Court on appeal is to focus on the charging documents in this case.
[78] The history of the kina harvested in this case begins with Cando in its capacity as commercial fisher. As I have noted above at [23]–[24], Cando completed its CELRs in June/July 2018 (in the form exemplified in Schedule 1 to this judgment) and was not prosecuted in relation to the information contained in those CELRs.
[79] Cando effected the catch through divers fishing from the tenders, on which the kina were placed into the dolavs.
[80] The appellant would have the Court read the word “vessel” as it appears in the fisheries legislation as excluding tenders of the nature deployed from the San Nicholas.
Issue 1: the “landing”
Overview
[81] Central to the s 230 charges are the records kept by Cando in its capacity as LFR in the form of unloading dockets and purchase invoices. Cando, in its records for June/July 2018, did not record the number of pottles (containing kina roe) that were eventually discharged from the San Nicholas. What was recorded in the unloading dockets was detail as to:
(a)“GRE” (meaning green state), as the state of the kina;
(b)“DOLAV”, as the container type applying to the unload; and
(c)the number of dolavs, as the number of containers landed.
[82] The categories of information required to be recorded in the unloading dockets are prescribed by the requirements under the Recordkeeping Regulations. Under reg 12(1) an unloading docket is required to include (among other information) the number and type of containers in which the fish were received.
[83] The obligations in relation to purchase invoices arise under reg 13 of the Recordkeeping Regulations — under reg 13(3)(d) the purchase invoice is required to include (among other information) the species, landed state, weight and greenweight (if required to be calculated).
[84] The obligations to keep unloading dockets and purchase invoices arise respectively when an LFR takes possession of fish from a commercial fisher and when a commercial fisher supplies fish to an LFR.18
[85] Under s 192(2) of the Act an entity that happens to be both commercial fisher and LFR is permitted to take fish as a fisher, and then transfer the fish to itself as an LFR, provided that as LFR they have “lawfully kept and completed all records … as if the commercial fisher and the licensed fish receiver had been separate persons”.19
Cando’s fishing permit and CER licence
[86] Cando’s fishing permit (PMT0019031), as referred to by the Judge permitted Cando to land fish at Bluff (and also at Picton).
[87] Cando’s licence to receive fish (as an LFR) under reg 6 Fisheries (Licensed Fish Receivers) Regulations 1997 authorised Cando to receive fish for handling or processing from a registered commercial fisherman.
“Landing” defined
[88] The Reporting Regulations define the expression “landing” as set out at [35] above.
[89]The Reporting Regulations also defined the term “point of landing”:20
point of landing—
(a)means,—
(i)in relation to fish taken by use of a vessel, a place where fish may be landed from the vessel or where the vessel, containing the fish, may be removed from New Zealand fisheries waters under the conditions of a permit issued in accordance with section 91 or section 97 of the Act, being a place that is described on the permit issued to the person using the vessel to take fish for sale:
18 Recordkeeping Regulations, reg 12(1)(a) and reg 13(1).
19 Fisheries Act 1996, s 192(2)(b).
20 Reporting Regulations sch 1, cl 5.
(ii)in relation to fish taken by a permit holder who does not use a vessel or have the use of a vessel or operates otherwise than from a vessel, a place where fish may be landed in accordance with the conditions of the permit; and
(b)includes—
(i)a place where fish are transferred from a vessel to another vessel that is a New Zealand fishing vessel, a vessel registered under section 105 of the Act, or a foreign fishing vessel:
(ii)a place where a vessel leaves the exclusive economic zone of New Zealand by passing through the seaward boundary of that zone:
(iii)the place at which a vessel that has fish on board is situated at the close of the fishing year if the vessel is being operated by, or on behalf of, a permit holder who, during the fishing year ending on that day, has held 100 000 kilograms or more of annual catch entitlement under the Act:
(iv)the situation where the registration of a vessel is cancelled or a vessel is re-registered:
(v)a place where fish or fish product is retained overnight in a holding receptacle
(emphasis added)
[90] The Judge was clearly correct in his conclusion that “transhipment” is a specific term whereas “landing” is a general term that encompasses the more specific.21
Transhipment between vessels
[91] The next issue is whether there was, in Cando’s operations in July 2018, a transhipment of kina, that is a transfer from one vessel to another. MPI’s contention is that the tenders used by the San Nicholas are not separate vessels but are instead to be treated as part of the San Nicholas.
[92] For the purpose of his analysis, the Judge treated the tenders as vessels.22 It is unclear from the record whether MPI presented detailed submissions in the District Court to suggest the tenders were not vessels. As I have now had the benefit of such
21 See Judgment, above n 2, particularly at [81]–[88].
22 At [90].
submissions on this appeal, I now consider the matters raised in those submissions. My conclusion is that the Judge correctly found that the tenders could constitute “vessels” in the context of transhipment and landing.
[93] “Vessel” as defined in s 2 of the Act means “any description of vessel, aircraft, hovercraft, submersible vessel, or other vessel of whatever size”.
[94]The term “tender” has its own definition in s 2:
Tender means any vessel that—
(a)is carried by or attached to a fishing vessel and used or intended to be used for taking fish, aquatic life, or seaweed for sale in conjunction with the fishing vessel; and
(b)is not longer than the greater of—
(i)6 metres; or
(ii)50% of the overall length of the fishing vessel it is carried by or attached to
[95] In other words, the Act itself expressly recognises that a tender is a vessel, but then goes on to define characteristics that vessel must have if it is to be treated as a “tender” for the purposes of the Act. (There is no suggestion in the evidence that the San Nicholas’s tenders did not meet those qualifications.)
[96] Notwithstanding those definitions, Ms Bishop (having referred to the definitions) submitted:
Accordingly MPI submits tenders are attached to a main fishing vessel and are not considered to be a separate vessel which would be required for a transhipment.
(emphasis added)
[97] Contrary to that submission, it does not follow from the statutory definitions that tenders are not to be considered a separate vessel. In terms of the statutory definition referred to, the tender is a vessel (and is attached to a fishing vessel). If the two have to be treated as a single vessel, that must be by reason of some other statutory or regulatory provision.
[98]For MPI, counsel turned to s 108(2) of the Act. Section 108 provides:
Application of this Part to tenders
(1)No tender is required to be registered under this Act if it is marked in accordance with regulations made for the purpose under section 297 [of this Act].
(2)A tender that complies with subsection (1) is to be treated as part of the registered fishing vessel with which it is used, or is intended to be used.
[99] Ms Bishop submitted it must follow, by reason of s 108(2), that a transhipment cannot have occurred from the tenders to the San Nicholas as a tender is not a vessel as defined in the Act.
[100] That submission is incorrect for the reason identified by Ms Proctor-Western. Section 108 of the Act falls within pt 6 of the Act dealing with matters of access to fishery, including fishing permits, fishing vessel registration and the like. As the heading to s 108 expressly indicates, the treatment of tenders as part of the registered fishing vessel is for the purposes of pt 6. The matters of recordkeeping and reporting the subject of this prosecution fall within pt 10 of the Act under the heading “Recordkeeping, reporting, disposal of fish, and provisions relating to taking and possession of fish for purpose of sale”. The distinct treatment of tenders (through s 108) for the purposes of pt 6 of the Act is not relevant to the recordkeeping and reporting requirements under pt 10.
[101] Accordingly, the Judge correctly treated the tenders as separate vessels (albeit without reference to the detail now developed in the submissions on this appeal).
Conclusion — landings by transhipment from tenders to the San Nicholas
[102] For these reasons the Judge correctly concluded that MPI had not proved the s 230 charges against either Cando or Mr McManaway — that was because MPI had not established that the “landings” of the kina in June/July 2018 had occurred (rather than at the San Nicholas) at the point of delivery to the helicopter or some other (undefined) point thereafter. Accordingly, the first and second questions will be answered “No”.
Issue 2: reg 33 Commercial Regulations — first point of sale or delivery for processing
[103] Regulation 33 of the Commercial Regulations (above at [42]) contains the requirement that commercial fishers must keep shellfish unshelled until they are delivered either to the first point of sale after being taken or to a processing factory.
[104] Cando’s case is that the unshelled kina were delivered both to the first point of sale and to a processing factory when they were transhipped from the tenders to the San Nicholas.
[105] The Judge first turned to the (undefined) concept of “processing factory”.23 His Honour correctly identified the distinction under the fisheries legislation between “primary processing”, which includes the removing of roe from kina, and “secondary processing”.24 He identified the risk management/food safety purposes underlying the requirement to ensure shellfish remains unopened until it reaches the processing factory.25 These obligations under reg 33 are upon the commercial fisher — whose obligation under reg 33, as the Judge found, ceases at the first point of sale because, beyond that point, the commercial fisher (in its capacity as commercial fisher) has no ability to exercise control over the shellfish and cannot prevent them from being opened prior to processing.26
[106] On this appeal, counsel for MPI first focused on the proposition that Cando lacked authorisation to conduct any kind of processing on the San Nicholas. Ms Bishop referred also to the difficulties of independent verification of greenweight where kina is processed at sea because kina does not have a conversion factor.
[107] The Judge (correctly) focused on the factual issue of whether, under reg 33, the San Nicholas was arguably a primary processing factory. His (correct) conclusion was set out as follows:
[109] The fact that the processing factory on the San Nicholas lacked a risk management programme does not change the position. A primary processor is required to have a risk management programme in place but are not defined
23 Judgment, above n 2, at [91]–[110].
24 At [94]–[96].
25 At [93], [98]–[99].
26 At [100].
in relation to whether a programme is in place. The processor is defined by the activities they undertake in relation to shellfish.
[110] The burden of proof is on the prosecution to show that the shellfish were opened prior to being delivered to a processing factory. The prosecution have not excluded the reasonable possibility that the primary processing occurred on the San Nicholas and that it was therefore a processing factory for the purposes of r 33 of the Fisheries (Commercial Fishing) Regulations.
[108] As under reg 33, delivery to a processing factory or the first point of sale are alternatives, the Judges finding that there had been as to delivery to a processing factory was sufficient to dispose of the reg 33 charge.
[109] Question 3 as initially framed by MPI asked whether the Judge erred in concluding, for the purposes of reg 33, that the first point of sale was when the kina were brought aboard the San Nicholas and presented for primary processing. As I have reframed that question, in the leave granted, to refer also to the alternative (delivery to a processing factory), the answer to the reframed Question 3 will be “No”.
[110]For completeness, I will refer briefly to the matter of the “first point of sale”.
[111] The Judge concluded that, on the facts, the point of transfer (and sale) was when Cando’s functions evolved from commercial fisher into those of LFR.27 It was as LFR that Cando was conducting the primary processing (removing the roe from the kina).
[112] The Judge made a factual finding that the events that occurred supported the defence contention that the first point of sale occurred when the tender vessels landed the kina on the San Nicholas.28
[113] In relation to “first point of sale”, MPI again relied on issues relating to whether the San Nicholas was authorised to be a processing factory. But this, for the reasons previously referred to by the Judge, incorrectly focuses on matters of authorisation of an activity rather than on the factual occurrence of a sale.
27 Judgment, above 2, at [114].
28 At [115].
[114] For this reason, the third question as initially framed by MPI might be viewed as raising a contention of factual error rather than legal error. But, in the event one was to consider the question as originally framed as involving mixed issues of fact and law, the appropriate answer would remain “No”.
Answers
[115]The answers to the three questions on appeal (with Question 3 as reframed at
[25] above) are:
Question 1:Did the Judge err in concluding, as a matter of law, the transfer of kina from tender vessels to the San Nicholas was a landing?
No.
Question 2:As a result of this error, was the Judge wrong in law to hold the relevant unloading dockets and purchase invoices were neither false nor misleading and, on that basis, dismissed the corresponding charges?
No.
Question 3:Did the Judge err in concluding, for the purposes of reg 33 of the Commercial Regulations, that the delivery of the kina from tenders to the San Nicholas was to the first point of sale after being taken and constituted delivery to a processing factory?
No.
Costs
[116] I reserve the costs and disbursements of the appeal. In the event any application is to be made in that regard, the respondents are to file and serve their memorandum (four page limit) within 10 working days after the date of this judgment and the appellant is to respond to any such memorandum within five working days after the respondents’ memorandum. In the event no memorandum is filed within 10
working days, the order of the Court (without further judgment) will be that there is no order as to costs and disbursements.
Osborne J
Solicitors:
Luke Cunningham & Clere, Wellington Ministry for Primary Industries
Hamish Fletcher Lawyers, Nelson Oceanlaw New Zealand, Nelson
SCHEDULE 1 (CELR)
SCHEDULE 2
(UPLOADING DOCKET)
SCHEDULE 3 (PURCHASE INVOICE)
0
0
2