Sajo Oyang Corporation v Ministry for Primary Industries

[2013] NZHC 161

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-2347 [2013] NZHC 161

UNDER  the Judicature Amendment Act 1972

BETWEEN  SAJO OYANG CORPORATION First Applicant

ANDSOUTHERN STORM FISHING (2007) LIMITED

Second Applicant

ANDTHE MINISTRY FOR PRIMARY INDUSTRIES

First Respondent

ANDTHE DISTRICT COURT AT CHRISTCHURCH

Second Respondent

ANDTHE DIRECTOR-GENERAL OF THE MINISTRY FOR PRIMARY INDUSTRIES

Third Respondent

Hearing:         30 January 2013 (Heard at Wellington)

Counsel:         R B Squire QC and M S Sullivan for applicants

M J Lillico and K E Martley for first and third respondents

Judgment:      11 February 2013

RESERVED JUDGMENT OF DOBSON J

Contents

Background........................................................................................................................................ [1] Timing constraint: special reasons applications prior to entry of convictions? ........................... [7] Standing of non-defendants to pursue special reasons applications ........................................... [30] Relief................................................................................................................................................. [62] Costs ................................................................................................................................................. [63]

SAJO OYANG CORPORATION v THE MINISTRY FOR PRIMARY INDUSTRIES HC CHCH CIV-2012-409-

2347 [11 February 2013]

Background

[1]      In these proceedings, the owners and charterers of a Korean fishing vessel, the Oyang 75, (the applicants) challenge, by way of judicial review, the lawfulness of the procedure adopted by Judge D J L Saunders in the District Court at Christchurch for dealing with forfeiture of property consequent upon convictions under the Fisheries Act 1996 (the Act).  Part 13 of the Act provides for automatic forfeiture of defined categories of property as a consequence of convictions for specified offences under the Act.  Forfeiture is to occur “on conviction … unless the Court for special

reasons relating to the offence orders otherwise:”.1

[2]      In circumstances described below, the applicants have been denied standing to  participate in  a hearing as  to  whether there  are special  reasons  not  to  order forfeiture of the vessel in this case (a special reasons application).   The essential point in the judicial review is whether the District Court has erred in denying the applicants standing to participate in that aspect of the criminal proceedings under the Act.

[3]      The Ministry charged the master and four officers of the vessel, being the chief officer, the factory manager, the deck bosun and the radio operator, variously with aiding and abetting the charterer (Southern Storm Fishing (2007) Limited) to abandon fish subject to the quota management system, making false or misleading statements about species caught and hindering a Ministry observer.

[4]      Although there has been a measure of constructive co-operation between the applicants and the Ministry on preserving a holding position from the applicants’ perspective until substantive determination of these proceedings, an application for interim orders was pursued to prevent the District Court taking further steps towards the determination of a special reasons application in the absence of the applicants.

[5]      It is sufficient for present purposes to repeat parts of the review of the factual background from the judgment on that application:2

1      For example, Fisheries Act 1996, s 255B(2).

2      Sajo Oyang Corporation v Ministry for Primary Industries [2012] NZHC 3044 at [2]-[7].

[2]       …  Although  none  of  the  individuals  charged  had  defended  the charges against them, solicitors for the applicants indicated to prosecuting counsel that they would want to be heard on an application that special reasons existed for not forfeiting the vessel (a special reasons application), provision for which is made in the relevant part of the Act.  The solicitors contemplated that any such applications would be determined before the entry of any convictions.   Solicitors for the applicants asked prosecuting counsel to indicate their interest in this respect to the Judge, to support a request that the Court defer entering convictions until the special reasons applications could be determined.

[3]       Prosecuting counsel omitted to so advise the Court.   Convictions were initially entered against all five defendants on 22 June 2012.  Solicitors for the applicants filed and served a special reasons application on 29 June

2012.  That was done on the misapprehension that Judge Saunders’ reserved

decision on the formal proof hearing on 22 June 2012 had not extended to entry of convictions when in fact that step, together with an order forfeiting the Oyang 75, had indeed been ordered on 22 June 2012.

[4]       The solicitors for the applicants moved promptly for a re-hearing as to the appropriateness of entering convictions.   That application was consented to by the prosecution and solicitors were advised that Judge Saunders had granted a re-hearing on the entry of convictions on 13 July

2012.   Thereafter, solicitors for the applicants perceived the solicitor conducting prosecutions for the Ministry had changed his view on the law, and now took the view that convictions could be entered and sentences imposed, notwithstanding an outstanding special reasons application.

[5]       Before the next scheduled hearing on 21 September 2012, solicitors for owners and charterers received instructions to apply on behalf of one of the defendants, Jo Tay Wan (Mr Jo) for a special reasons application.  The Court was advised of that development on 17 September 2012.  The District Court  gave  the  solicitors  for  the  applicants  the  impression  that  Judge Saunders would only be dealing with matters of mitigation at the sentence hearing on 21 September 2012, and that forfeiture issues were matters for a separate hearing on another date.

[6]       In  a  minute  of  19  September  2012,  Judge  Saunders  declined solicitors for the applicants leave to appear “at the penalty phase as they do not represent the defendants who are for sentence”. That minute continued:

I will not be focusing on the application for forfeiture or relief from this at the penalty phase and it is my considered opinion, for reasons which will follow, that the company Southern Storm Fishing (2007) Ltd will have an opportunity to argue the special reasons application at a subsequent hearing when the question of relief from forfeiture is the issue for the Court.

[7]       At the 21 September 2012 hearing, convictions in respect of the other four defendants were entered, but sentencing of Mr Jo was adjourned without  entering  convictions.    The  District  Court  has  set  down  Mr Jo’s application for hearing on 20 November 2012.

[6]      On the interim application, I made an order that the District Court was not to proceed with that step pending substantive determination of these proceedings.

Timing constraint: special reasons applications prior to entry of convictions?

[7]      In criticising the process followed by the District Court in this case, it was argued for the applicants that the Court had erred as a matter of law in entering convictions when there were one or more special reasons applications still to be resolved.    This  depended  on  an  interpretation  advanced  on  their  behalf  of  a procedural constraint on the District Court, so that the Court had to deal with any special  reasons  applications  before entering convictions,  which  would  otherwise trigger forfeiture.  On the view I have come to, the sequence in which aspects of the criminal proceedings are determined is not critical to standing for non-defendants to pursue special reasons applications in relation to property vulnerable to forfeiture.  It is nonetheless appropriate to consider the issue at this point.

[8]      The  wording  of  each  of  the  provisions  in  subs (1)  of  ss 255B  to  255D provides that forfeiture is to occur by operation of law “… on conviction for [the defined offences]”.  Subsection (2) of ss 225B to 225D specifies the property to be forfeited “unless the Court for special reasons relating to the offence orders otherwise”.  In terms of the process to be followed by the Court, s 255E(3) provides as follows:

255E   General provisions relating to forfeiture

…

(3)       At the time of conviction of any offence against this Act, the Court must determine what, if any, of the following is forfeit under any of sections 255A to 255D:

(a)      Fish and any proceeds from the sale of such fish: (b)        Illegal fishing gear:

(c)      Property used in the commission of the offence: (d)         Quota.

(e)      associated quota, unless the Court is satisfied that subsection

(3B) applies to preclude forfeiture.

(emphasis added)

[9]      In  addition,  the  jurisdiction  of  the  Court  to  discharge  a  person  without conviction in relation to charges under the Act is confined to those cases in which the Court is satisfied that items used in committing the offences should not be forfeit. The relevant provision is in the following terms:

255E   General provisions relating to forfeiture

…

(4)       No person may be discharged without conviction in respect of an offence referred to in any of sections 255A to 255D unless the Court for special reasons relating to the offence considers that the property, illegal fishing gear, fish, any proceeds from the sale of such fish, and quota should not be forfeit.

[10]     Part 13 of the Act also provides a procedure in relation to property that has been forfeit.   Section 256(2) imposes an obligation on the chief executive of the Ministry, within 10 working days after the date of forfeiture, to publicly notify the details of the forfeit property, and the right of any person to apply to the Court for relief.  Thereafter, persons claiming an interest in any forfeit property have a period of 35 working days to apply to the Court for relief from forfeiture.  Such applications are then to be determined in accordance with a sequence of considerations specified in subss 256(6) to (8) of the Act.

[11]     Mr Squire QC argued for the applicants that to give effect to the provisions that allow for an order that the property not be forfeited if special reasons exist, any such applications had to be determined before entry of the relevant convictions. Otherwise, the forfeiture would have occurred by operation of the provisions of the Act.  Consistently with that, the scope for a discharge without conviction3 could not be considered unless the Court had decided that special reasons did exist to warrant

non-forfeiture of the property used in the offending.

3      Fisheries Act 1996, s 255E(4).

[12]     Mr Squire submitted that the general practice of the District Court in dealing with such prosecutions accorded with his interpretation of the procedural constraint on the Court.   His instructions were to the effect that whether defendants plead guilty, or charges are found to be proven after a hearing, the Court’s practice is to defer entry of convictions until issues affecting forfeiture of property used in the offending (other than any applications for relief from forfeiture) have been resolved.

[13]     In opposing an interpretation that would mandatorily require the Court to defer  entry of convictions  as  proposed  by Mr Squire,  Mr Lillico  for the Crown acknowledged that the procedure Mr Squire described can and does occur, and could certainly not be criticised as wrong or inconsistent with the provisions in the Act. However, Mr Lillico resisted any notion that the terms of the provisions relied on by Mr Squire necessarily required the Court to defer entry of convictions to enable it to separately consider any special reasons applications thereafter.

[14]     Mr Lillico submitted that either by implication in the relevant provisions of the Act, or otherwise by implication from provisions in the Summary Proceedings Act  1957,4   the  Court  should  be  treated  as  having  a  jurisdiction  to  “unforfeit” property if that was subsequently justified by the outcome of a special reasons application.   That sequence had inherent in it the somewhat clumsy notion of the District Court considering whether there are special reasons not to forfeit property

that has already been forfeit.

[15]     The procedure contemplated in Part 13 of the Act is not readily reconcilable with  the  reality  of  District  Court  practice.     The  provisions  do  not  easily accommodate cases in which some defendants of the same crew or enterprise wish to plead guilty and have the matter promptly resolved, when others, whose charges involve use of the same property that is vulnerable to forfeiture, plead not guilty.  It also does not address the situation where a range of defendants are charged with offences involving the use of the same property, and the charges proceed separately. It is unsatisfactory for the Court to have to rely on counsel for the informant in any particular  case  to  advise  the  Court  whether  the  entry  of  convictions  should  be

deferred  because  subsequent  hearings  of charges  against  others  give  rise to  the

4 Particularly s 75 of the Summary Proceedings Act 1957. See [26] below.

prospect of forfeiture by operation of law of the same property, and in respect of which special reasons applications might be advanced.

[16]     Mr Lillico suggested that such arrangements are appropriate and sufficient to deal with the procedural difficulties that are likely to arise.  With respect, the history of this matter illustrates the inadequacies in relying on a procedure under which counsel for the informant flags  for the Court the  occasions on which  there are reasons to defer entry of convictions.

[17]     The procedure Mr Squire contended for also involves potential disadvantages for defendants who wish to have the cases against them determined promptly.  Their interests would be derogated in favour of the interests of others who wished to pursue applications for discharge without conviction or special reasons applications to avoid forfeiture of property.  In some cases, those who seek to have charges under the Act disposed of promptly could legitimately complain of a breach of their right to be tried without undue delay under s 25(b) of the New Zealand Bill of Rights Act

1990 (BORA) if entry of their convictions and sentencing are deferred until other defendants pursuing more protracted courses have been dealt with.

[18]     Mr Squire sought to persuade me that the disadvantages for the occasional defendant wishing to have charges under the Act resolved promptly where other defendants wished to pursue valid initiatives that prolong the process was insignificant, and more perceived than real.

[19]     I received constructive submissions from both sides that strayed substantially into anecdotal explanations of the range of practical considerations that arise in dealing with prosecutions under the Act.  It is clear that, at least in the vast majority of situations, it is preferable for the Court to defer entry of convictions until the Court is in a position to determine special reasons applications and any other matters that might affect the forfeiture of property that will otherwise automatically occur by operation of the relevant sections of the Act.

[20]     Mr Squire’s argument for a mandatory obligation arising from the terms of

the relevant sections in the Act has substantial support on a literal interpretation of

their terms.  Although the expression “… on conviction for an offence …” admits of some temporal flexibility as to when forfeiture will occur, s 255E(3)5  requires the Court to identify the property that will be forfeit by operation of the law at the time of  conviction.    It  would  be  illogical  for  that  step  to  occur  separately  from  (or certainly before) determining any special reasons application which would avoid forfeiture by operation of the law.

[21]     Mr Squire also relied on the constraint in s 255E(4), limiting the Court to considering a discharge without conviction only in those cases where, in effect, a special reasons application would succeed.  Mr Squire’s argument was that, by parity of reasoning, if a decision to discharge without conviction could not be made if special reasons for avoiding forfeiture did not exist, then convictions in all other cases ought also not to be entered until any special reasons applications are determined.   However, the same sequence does not necessarily have to pertain in every case.   If the Court is advised on behalf  of a particular defendant that an application will be made for a discharge without conviction, then the parties know by virtue of the provision in s 255E(4) that an additional consideration, particular to offending under this Act, is that such a discharge would not be available unless a special reasons application would succeed.  That does not necessarily require that in any other case where an application for discharge without conviction is not to be pursued, the Court is constrained from entering a conviction until it has resolved any special reasons applications.

[22]     Mr Lillico argued that the Court had a discretion to identify the property to be forfeited at a later stage in the proceedings.   That would require reading in the following words at the beginning of s 255E(3):

At the time of conviction or subsequently on determination of any special reasons application if such applications were outstanding at the time of conviction and the Court ordered that forfeiture should be deferred until they were determined.

Creating this discretion would involve a substantial reading in of words, as a matter of statutory interpretation.  Even if the procedural requirements are unworkable due

5 Cited at [8] above.

to the constraints in the timing of entry of convictions, that could hardly justify so significant a variation to the words used by Parliament.

[23]     Mr Lillico did cite two decisions under the materially similar, earlier Act, in which (apparently without challenge) the Court considered special reasons applications after entry of convictions.6

[24]     Applying a purposive approach to interpretation of these provisions, I am satisfied   that   Parliament   would   not   have   intended   to   create   a   procedural straightjacket for the Court that inhibited fair and efficient determination of prosecutions under the Act.    Such prosecutions trigger justifiably severe consequences for those found to have offended and certainty of the process and prospective outcomes is obviously important.

[25]     However, the relevant provisions cannot be interpreted to mandatorily require deferral of entry of convictions for all of a group of defendants who used the same property until any special reasons applications have been determined for all those defendants.   Certainly, there could be no suggestion that the Court would be committing an error that vitiated any aspect of the proceedings if it proceeded to enter a conviction for a defendant who was not intending to pursue any special reasons application, where his or her co-defendants wished to pursue such applications that had not been determined at that time.

[26]     Mr Lillico’s reliance on the Court’s power under s 75(1) of the Summary Proceedings Act to grant a rehearing of an information either as to the whole of the matter or only as to the sentence or order, was, with respect, somewhat overstated. Cause needs to be shown to justify an application for rehearing.  It would become an unwieldy use of what is intended to be a relatively restricted power to proceed to enter convictions in prosecutions under the Act as a matter of course, in reliance on the Court’s ability to reverse that step in cases where special reasons applications in

relation to the defendant being convicted at the time, or others implicating the same

6      Blake v Ministry of Agriculture and Fisheries (1989) 4 CRNZ 605 and Morris v Ministry of

Agriculture and Fisheries HC Wellington CP777/89, 9 October 1989.

property vulnerable to forfeiture, subsequently arose.7   It is also undesirable that the post-conviction  processes  for  dealing  with  the  forfeited  property  should  be undertaken if there is a realistic prospect of an order that the property should not be forfeit in the first place.

[27]     That is not to say that, in unusual cases where sufficient reason existed to enter a conviction at an earlier stage, and matters subsequently arose that justified revisiting the prospects of non-forfeiture, consideration of granting a rehearing to reverse the effect of a forfeiture operating pursuant to the Act is not valid.  It should just not be contemplated as the norm.

[28]     Accordingly, whilst the subsequent history of the matter has demonstrated the undesirability of entering a conviction whilst special reasons applications remain unresolved, equally resort to the power to grant a rehearing which was exercised by the Judge in this case demonstrates that what turns out to be a premature entry of convictions is not ultimately fatal.  The norm ought to be that entry of convictions be deferred until the Court can be satisfied that other interests likely to pursue special reasons applications or other matters that might affect forfeiture by operation of the provisions in the Act are resolved.  However, the provisions of the Act do not impose a mandatory requirement for the Court to proceed in that way to the extent that proceedings are vitiated if a conviction is entered before a special reasons application is  resolved.    The  opportunity  for  rehearing  and  reversal  is  available  in  these situations if special reasons are made out.

[29]     The Court’s power to control its own procedure must extend to managing variations to the sequence contemplated in the Act.  As in all aspects of procedure, variations are permissible and will occur to meet the interests of justice and the

prompt and efficient determination of proceedings.

7      It has been held that the filing of an appeal against conviction or lodgement of an application for a rehearing does not defer forfeiture that arises as a consequence of a conviction: see Morris v Ministry of Agriculture and Fisheries, n6 above.

Standing of non-defendants to pursue special reasons applications

[30]     Part  13  of  the  Act  contemplates  two  possible  opportunities  for  those interested in property that is vulnerable to forfeiture, to oppose that happening.  In addition to affording an  opportunity to argue for special reasons why forfeiture should  not  occur  in  the  first  place,  there  is  then  the  procedure  for  any person claiming an interest in property that has been forfeited to apply for relief from the

effect of forfeiture on that interest.8

[31]     Except where a measure of relief from forfeiture is required to satisfy the interest that crew of a vessel may have had in unpaid wages, or to meet costs incurred by a third party in providing support and repatriation of foreign crew, an order  for  relief  from  forfeiture  cannot  be  made  unless  it  is  necessary  to  avoid manifest injustice.9

[32]     The case for the applicants was presented on the basis that it is generally recognised  as  substantially more  difficult  to  make  out  manifest  injustice  on  an application for relief from forfeiture, than it is to establish special reasons in relation to the offence that justify an order that property not be forfeit in the first place.  The applicants argued that those with an ownership interest who are not defendants are entitled to pursue an application for special reasons in relation to the offence, as well as subsequently being able to apply for relief against  forfeiture should the first argument not succeed.

[33]     It  may  be  that,  in  the  present  case,  the  Judge  contemplated  that  a non-defendant party interested in property vulnerable to forfeiture could argue the considerations that could have availed on a special reasons application, as well as the somewhat  different  considerations  that  would  apply on  an  application  for relief against forfeiture, at a hearing of an application for relief from forfeiture.   That combined approach is implicit in the Judge’s 19 September 2012 minute.10    If the

Judge was contemplating proceeding in that way, then that sequence assumes the

8      Section 256(3).

9      Section 256(8).

10 Quoted at [6] of the judgment on the interim injunction application, cited at [5] above.

power to “unforfeit” the vessel after that had occurred by operation of law on the entry of conviction.  Mr Lillico argued that the procedures under the Act extended to the Court having such a power, such as where a conviction against one defendant had been entered, and a subsequent special reasons application brought on behalf of another defendant established grounds that would apply in respect of all defendants, warranting a reversal of forfeiture.

[34]     Mr Squire  did  not  accept  that  the  statutory  procedure  afforded  such  a discretion to the Court, and was not inclined to accept that the Court could address both the considerations that would have been relevant on a special reasons application, and a claim to manifest injustice on an application for relief against forfeiture after forfeiture had occurred by operation of law.

[35]     Mr Squire argued that if an owner, or others interested in a vessel subject to forfeiture who are charged with relevant offences under the Act, got “two bites at the cherry” by being able to pursue a special reasons application and, if unsuccessful, subsequently applying for relief against forfeiture, then the owner of a vessel not implicated in the offending (characterised by Mr Squire as “an innocent owner”) ought surely to have the same separate opportunities to resist forfeiture. The owner’s position  ought  particularly  to  be  recognised  in  relation  to  a  special  reasons application where it could adduce evidence of the circumstances of the offending that those charged as defendants might be indifferent to, or where matters arguably advanced in support of special reasons put the defendants’ participation in a worse light and were therefore in conflict with the defendants’ interest in mitigating the seriousness of their offending.

[36]     The Ministry accepted that there has been a practice allowing non-defendant parties with interests equivalent to those of the applicants in the present case, to participate in special reasons applications.   There were some differences of recollection between counsel as to the extent to which the Ministry has challenged the standing of a non-defendant party interested in property vulnerable to forfeiture to bring, or be heard in support of, a special reasons application.   In any event, it appeared to be common ground that the status of such parties has not previously been ruled on, after full argument on whether it ought to be recognised.

[37]     Mr Lillico’s argument was that determining any special reasons applications, and determining at the time of conviction what property would be forfeit under the terms of the relevant sections,11  were all components of the criminal proceedings. As such, participants in the proceedings were confined to the informant and the defendant.   Mr Lillico relied on the Court of Appeal’s analysis in De Bruin v R, which confirmed the exclusion from a preliminary criminal hearing of another accused charged in relation to the same matter.12

[38]     Mr Lillico  contrasted  the  position  of  those  with  interests  in  property vulnerable to forfeiture, such as fishing vessels or equipment, that is not specifically provided for in the Act, with the position of those interested in “associated quota”. That is a defined term,13  and contemplates circumstances in which persons charged with offences against the Act may have been using quota owned by other entities. Section 255E(3A) and (3B) make specific provision for notifying owners of quota that is alleged to be associated quota of the prospect of it being forfeit as a consequence of entry of relevant convictions.  Those sections afford such owners an

opportunity to identify their connection with the quota in issue and advance reasons for avoiding forfeiture.   Mr Lillico’s point was that as Parliament had seen fit to provide a notice provision to protect the interests of quota owners not involved in the offending, if it intended to extend the same protection to owners of other types of property who were not involved in the offending, then parallel provisions would have been included.

[39]     Mr Lillico did not concede any inconsistency in the scope of rights between owners who were involved as defendants, and those who were not, if the latter category did not have standing to bring a special reasons application.  Sections 255B to 255D require the “special reasons” to relate to the offences in issue.  He argued that an owner charged with an offence under the Act would be involved in the circumstances of the offence, and that gave it standing to make a special reasons application.  On the other hand, an “innocent owner” would be distanced from the

offending,  and  therefore  not  in  a  position  to  address  the  circumstances  of  the

11     Section 255E(3).

12     De Bruin v R [2007] NZCA 600.

13     See s 255.

offending.  Additionally, “innocent owners” would be adequately protected by their ability to apply for relief from forfeiture under s 256(3) as the circumstances in which the owner was distanced from the conduct giving rise to the criminal charges would comprise a material component of any claim that forfeiture would be manifestly unjust.

[40]     Mr Squire   disputed   Mr Lillico’s   characterisation   of   the   whole   of   the proceedings as conventional District Court criminal prosecutions.  On an analysis of the statutory scheme, he submitted that,  following the establishment of  guilt of offenders in any case, the Court has three discrete functions beyond sentencing the offender.  These are the determination of whether any items of property otherwise automatically  forfeit  to  the  Crown  on  conviction  should  not  be  forfeit  because special reasons are made out relating to the offence for not doing so.   Secondly, considering whether there are items of property beyond the categories which are automatically  forfeit  by  the  terms  of  the Act  which,  in  the  circumstances  of  a

particular case, ought to be ordered by the Court to be forfeited to the Crown.14

Thirdly, the Court is obliged in cases where there is any forfeiture to determine and specify the precise items of property that are indeed forfeit.15

[41]     Mr Squire argued that although those obligations arise out of, and in the course of, criminal proceedings, they are distinct from the core function of bringing and defending summary proceedings for alleged offences under the Act.   That is particularly so as there is no necessary or consistent connection between the defendants charged with offences, and the parties having financial interests in the assets alleged to have been used in the offending.

[42]     Further,  Mr Squire  argued  that  in  relation  to  the  discrete  category  of “associated quota”, the Act makes specific provision for the involvement of those with an ownership interest in such quota but who are not involved in the criminal proceedings.16   Arguably, it would be illogical for the legislature to have recognised

the appropriateness of non-parties to the criminal proceedings taking part in the

14     Sections 255B(3) and 255C(3).

15     Section 255E(3).

16     Section 255E(3A) and (3B).

potential forfeiture of quota, and not to afford the same rights to those with interests in other categories of assets that are similarly vulnerable to forfeiture.

[43]     Mr Squire  made  the  point  that  (apart  from  the  provisions  in  relation  to associated quota) the relevant provisions are silent on those who may argue for the existence of special reasons relating to the offence that might justify an order that property not be forfeit.   If the legislature had intended to exclude non-defendant interests, it could easily have specified that.  Mr Squire argued that given the discrete nature of the forfeiture aspects of proceedings, Parliament should not be taken to have drafted the provisions in the terms it did on the assumption that those with standing to participate would be limited to the informant and the defendants as occurs in the conventional stages of a criminal prosecution.

[44]     In support of this point, Mr Squire submitted that there is no reason to assume that knowledge of the circumstances of the offence, or more broadly the ability to call evidence about the circumstances of the offence that might raise special reasons for non-forfeiture, will be confined to the defendants charged.  Indeed, those charged may have their own interests for not disclosing matters that, from owners’ perspectives, might assist in making out such special reasons where that evidence potentially conflicts with arguments that a defendant wants to raise to mitigate the seriousness of his or her involvement in the offending.

[45]     Mr Squire  also  emphasised  the  significant  financial  consequences  where substantial assets are vulnerable to forfeiture.  In the present case, submissions to the District Court on behalf of the owner attributed the value of some NZ$8 million to the Oyang 75.   Mr Squire urged  an approach to  interpretation of the  provisions consistently with the right to natural justice contained in s 27 of BORA.  Mr Squire submitted that substantial property rights ought not to be vulnerable to forfeiture without a right for the owner to be heard as to why that should not occur.

[46]     This   last   argument   depends   on   the   proposition   that   the   subsequent opportunity to apply for relief from forfeiture subsequent to conviction is not sufficient recognition of the rights of those with interests in property to pursue protection or preservation of them.

[47]     On the breadth of matters that might relevantly be put in evidence in support of special reasons applications, I was referred to the judgment of Chisholm J in Novoselets v Ministry of Fisheries.17   In that case, a defendant had pleaded guilty to nine charges of omitting material information and had unsuccessfully argued that there were special reasons relating to the offence to justify non-forfeiture.  On appeal from the resulting forfeiture, Chisholm J reviewed the evidence going to matters of organisation by charterers of the manner in which the vessel was to undertake fishing operations, finding that the owners had put in place an independent screening system

that the owners could reasonably have expected would prevent the offending that occurred.18   That appeal was cited as an instance of evidence having a bearing on the determination of special reasons that did not reflect an explanation for the circumstances in which the particular offending had occurred.  Rather, it related to steps that a non-defendant owner had taken to avoid practices that might lead to charges being brought.

[48]     Mr Lillico was inclined to distinguish the scope of relevant evidence in a case such as Novoselets from the present, because that was a case of omitting material information where systems for recording information would be relevant, whereas the relatively more serious charges in the present case focus on the actual conduct in dumping fish and hindering a Ministry observer.  In that case, the steps taken by the owner were more relevant to the actual offence of omitting material information.

[49]    I agree that issues affecting forfeiture of property that may occur as a consequence of criminal proceedings are discrete from the core elements of the criminal proceedings involving determination of whether the charges are made out, or alternatively the recording of guilty pleas and subsequent entry of convictions and sentencing.  The connection between the core elements of the criminal proceedings and issues involving forfeiture arises because the statute provides that forfeiture is to occur when relevant convictions are entered, unless special reasons relating to the offence are made out to warrant non-forfeiture.  In the provisions relating to forfeit property, s 256(14) provides as follows:

256     Provisions relating to forfeit property

…

(14)      Any forfeiture under any of sections 255A to 255D, or any payment of a sum of money or delivery of property under subsection (7) of this section, to persons claiming an interest, shall be in addition to, and not in substitution for, any other penalty that may be imposed by the Court or by this Act.

[50]     That provision illustrates the distinction between the penalty phase of the core criminal proceedings, and the additional consequences that Parliament has attributed to use of assets in offending contrary to the provisions of the Act.

[51]     Because the issues relevant to forfeiture have a different focus, it is not appropriate to confine participation at that stage of the proceedings to the parties to the core criminal proceedings.

[52]     However, the special reasons advanced by third parties to support an order that forfeiture not follow conviction must be connected to the circumstances of the offending.  This point was considered by the Court of Appeal in Basile v Atwill,19 where a defendant to criminal charges sought to advance the ownership interests of innocent third parties (the defendant’s wife and brother) in the vessel as a special reason for non-forfeiture.  The Court held that special reasons advanced must relate to the facts involved in, or connected with, the commission of the offence in the particular case.20   The Court held that the third party ownership interests in that case had no bearing on the offending, which involved the defendant making false statements about fish caught and landed, and could not be advanced as a special reason.

[53]     The Court of Appeal’s reasoning does not exclude third parties from making a special reasons application, provided that the reasons advanced have sufficient bearing on the offending that triggers forfeiture.  In the context of the Fisheries Act

1983, the Court referred to s 107C(2) (the equivalent to the relief from forfeiture provided by s 256(3) of the 1996 Act) as the “obvious answer” to the concerns of third parties with  an interest in the vessel,  and the proper stage at  which their

interests should be considered.21    Those comments need to be read in light of the more expansive discretion that the Minister had to award relief from forfeiture under s 107C, which did not require a third party owner to make out manifest injustice.22

[54]     In light of the higher threshold for relief from forfeiture that was enacted in s 256(3),  and  the  power  being  vested  in  the  Court  rather  than  the  responsible Minister, the Court should be more willing to hear special reasons advanced by third parties before convictions are entered.   Any caution that previously arose out of separation of powers concerns, or the Court not wanting to usurp the Minister’s function to grant relief from forfeiture under s 107C, is no longer justified.

[55]     In hearing special reasons advanced by third parties, the restrictions described in Basile v Atwill remain, in that those special reasons must relate to the facts and circumstances of the offending, and be sufficiently unusual or out of the ordinary to qualify as “special”.23   An apt example is the steps taken by the owners of the vessel in Novoselets v Ministry of Fisheries to contract a consultancy firm tasked with briefing the vessel’s master on completing returns and ensuring that those returns were compliant at each departure and landing of the vessel.24    Those steps have a direct bearing on the charges of omitting material information, as the employment of the consultants was designed to prevent the omissions that formed the basis of the criminal charges.25

[56]     Defendants in criminal proceedings may be indifferent to, or potentially have interests that are inconsistent with those who seek to preserve their property from forfeiture.  That prospect would require Parliament to explicitly exclude those with an interest in avoiding forfeiture from a material component of the processes that determines whether the property is indeed forfeited to the Crown.   It would be inconsistent  with  the  right  recognised  by  s 27  of  BORA,  and  more  generally

inconsistent with the minimum standards of fairness on which Court proceedings in

21     At 540.

22     See  also  Chisholm J’s  comments  in  Novoselets  v  Ministry  of  Fisheries  at  [32],  that  the replacement provisions in the 1996 Act contain a much more constrained power to provide relief.

23     At 539.

24 At [5].

New Zealand are undertaken, to deny standing to non-parties to criminal proceedings who have an interest in preserving property vulnerable to forfeiture in situations such as the applicants in these proceedings.

[57]     Mr Lillico suggested that the Ministry has challenged the participation of non-defendants as applicants in special reasons applications because of concerns that the involvement of non-parties in the core criminal proceedings tends to lengthen the core criminal proceedings.  Certainly, the Act does not include any requirements that those in the position of the applicants be given notice of the prospect of a special reasons application, nor are there any time limits for such applications, as there are in s 256 in relation to applications for relief from forfeiture that has already occurred. However, timing concerns and the omission of any such provisions are not sufficient to justify denying standing to non-defendant parties with interests in property vulnerable to forfeiture, if those parties are aware of the threat to their property, and take  steps  to  be  involved,  either  by  supporting  the  special  reasons  application brought by one or more of the defendants, or making their own application within the context of the criminal proceedings.  The involvement of non-defendants ought not to unreasonably prolong the core criminal proceedings, and those wishing to pursue  special  reasons  applications  would  have  to  accept  the  constraints  of reasonable time limits imposed on them by the Court, as appropriate relative to the circumstances of any particular case.

[58]     Mr Lillico did not challenge the proposition that it is materially more difficult for an owner of property to make out manifest injustice on an application for relief from forfeiture, than it is to establish special reasons for non-forfeiture.  It follows that  denying  non-defendant  parties  with  an  interest  in  property  vulnerable  to forfeiture the standing to participate in a special reasons application would exclude them from a material opportunity to preserve that property, which would otherwise be available to them were they defendants in the proceedings.  From that perspective, exclusion seems likely to involve a breach of s 27 of BORA, and more generally to conflict with the standards for fair conduct of proceedings in relation to property rights.  The right to natural justice cannot be properly vindicated by the opportunity to be heard on relief from forfeiture, as by that stage of the proceedings the interested party is materially worse off.

[59]     For these reasons, I am satisfied that the District Court has erred in denying the applicants standing to participate in a special reasons application.   Subject to their complying with reasonable timetabling requirements appropriate to the case, they ought to be entitled to present argument in support of a special reasons application.

[60]     On Mr Squire’s interpretation of the procedural requirements, the District Court would  be  required  to  hear  and  determine all  special  reasons  applications before entering convictions against any of a group of defendants whose offending (if made out) rendered the same property vulnerable to forfeiture.  In effect, the Court would be deprived of jurisdiction to consider a special reasons application as soon as convictions that triggered the forfeiture of property had been entered against other defendants.   On the basis of that analysis, the relief sought extended to an order setting aside the conviction of all crew members that had led to forfeiture of the vessel.

[61]     I am not persuaded that that extent of relief is required to protect the interests of the applicants.  As a result of the interim orders, a special reasons application will be heard prior to entry of the convictions against Mr Jo.  If special reasons are made out for a non-forfeiture order in respect of Mr Jo, then the Court would be seized of additional considerations as to whether those reasons for non-forfeiture also apply in respect of the convictions that have been entered against the remainder of those charged.   If indeed that is the case, then at that point the Court could grant what would be a further re-hearing of the entry of convictions against the remainder of

those charged,26 for the purposes of recording on the subsequent entry of convictions

against them, the non-forfeiture orders that would then apply.

Relief

[62]     On the basis of these findings, the applicants are entitled to relief as sought, to the following extent:

26     Under s 75 of the Summary Proceedings Act 1957.

(a)       A  declaration  that  the  minute  in  the  criminal  proceedings  dated

19 September 2012, and the indication as to the further steps intended to occur on 21 September 2012, was wrong in law in denying the first and second applicants standing to be heard on the issue of special reasons for non-forfeiture, and that such consideration should occur prior to entry of convictions against the defendant crew members. The procedure contemplated by the District Court failed to recognise the distinction between special reasons relating to the offence as affording grounds for an order for non-forfeiture, from the considerations that apply to an application for relief from forfeiture under s 256 of the Act.

(b)An order directing the District Court at Christchurch to hear an application by the applicants for special reasons for non-forfeiture of the vessel prior to, or at the time of, any convictions being entered against Mr Jo for offences found to be proven against him.

(c)       A declaration that in the circumstances of this case, if:

special reasons are made out on the special reasons application pursued by the applicants in connection with Mr Jo’s sentencing;

and

the Court is satisfied that such special reasons also apply to justify non-forfeiture in respect of the convictions entered against other

crew members;

then the Court would have the power to set aside the convictions of the other crew members in order to reverse the forfeiture of the vessel that had occurred by operation of the provisions of the Act.

Costs

[63]     The applicants are entitled to costs from the first respondent.

Dobson J

Solicitors:

Oceanlaw New Zealand, Nelson for applicants

Crown Law, Wellington for first and third respondents