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Court of Appeal of New Zealand |
IN THE COURT OF APPEAL OF NEW ZEALAND |
ca238/00 |
between |
WESTHAVEN SHELLFISH LIMITED | |
Appellant |
and |
CHIEF EXECUTIVE OF MINISTRY OF FISHERIES | |
First Respondent |
AND |
TREATY OF WAITANGI FISHERIES COMMISSION | |
Second Respondent |
and |
SOUTHERN CLAMS LIMITED | |
Third Respondent |
AND |
TE RUNANGA O NGAI TAHU | |
Fourth Respondent |
Hearing: |
27 and 28 June 2001 |
Coram: |
Thomas J Keith J McGrath J
|
Appearances: |
F M R Cooke and M S Sullivan for the Appellant P A McCarthy and K Anderson for First Respondent J M Mallon and F M Mackie for Second Respondent B A Scott and E R Shaw for Third Respondent A M Powell for Fourth Respondent |
Judgment: |
11 October 2001 |
judgment of the court delivered by KEITH J |
PARA NO
The proceedings [1]
Fisheries Act 1983 s63 and related legislation[6]
The challenged decisions [18]
(a) Policy documents [19]
(b) Initial decisions [23]
(c) Review decisions [26]
(d) Decisions about area 3 and SCL [35]
The High Court judgment [37]
The issues [43]
Has the Ministry developed an unlawful policy or applied it inconsistently
with the discretion conferred on it or both? [45]
Has the Ministry unlawfully discriminated in breach of s63(9)? [55]
Relief [69]
Result [72]
[1] Westhaven Shellfish Limited (Westhaven) and its predecessors have, since 1983, harvested cockles on Pukawau Beach in Golden Bay at the foot of Farewell Spit.That fishing is undertaken in accordance with permits issued under s63 of the Fisheries Act 1983 by officers of the Ministry of Fisheries.Cockles have not been brought within the scope of the quota management system (QMS) and accordingly they are not the subject of individual transferable quotas (ITQs).
[2] Westhaven exports most of the cockles in fresh and frozen form.It wishes to extend its catch and has sought permits for other New Zealand fisheries areas.(Pukawau is in area 7.)Those requests failed as did its applications for review of the refusals made to the Ministry under s63(11) of the 1983 Act and s329 of the Fisheries Act 1996.Westhaven sought judicial review of (1) the policy directions given by the chief executive of the Ministry of Fisheries and his predecessor, (2) Ministry decisions declining permits and (3) Ministry decisions refusing applications for review; it also challenged (4) allocations made to Southern Clams Limited (SCL), a company which harvests cockles in another area (area 3).The relief sought includes orders declaring the policy directions unlawful, orders setting aside the various decisions including one increasing SCL's harvest and orders directing that the applications be redetermined.
[3] The grounds are that the chief executive and other officials have failed to exercise their statutory discretions, have unlawfully fettered the discretions, have had regard to improper purposes and irrelevant considerations and have failed to have regard to relevant considerations, have breached natural justice, and (in granting the permit to SCL and refusing to grant Westhaven a permit in that area) have illegitimately discriminated.
[4] In a judgment given on 5 October 2000 Ellis J rejected the various complaints.The judgment, as he says, is to be read with his judgment in the scampi case.This appeal was heard immediately after the appeal in that case and judgment is being given in both cases at the same time.
[5] Westhaven appeals.The respondents, in addition to the chief executive of the Ministry of Fisheries (also known as the Director-General of Fisheries) and SCL, are the Treaty of Waitangi Fisheries Commission and Te Runanga O Ngai Tahu.The Commission is included because it is entitled to an allocation of cockles if and when cockles are brought into the QMS and Te Runanga because, in that event, it will be entitled to a proportion of the allocation of cockles that would be made to the Commission.It also has a first option under the Ngai Tahu Claims Settlement Act 1998 to purchase up to 40% of any unallocated quota for cockles in a particular fisheries area held by the Crown, again if cockles in that area are introduced into the QMS.
Fisheries Act 1983 s63 and related legislation
[6] The taking of fish for commercial purposes is lawful only if it is with the authority of and in accordance with a current fishing permit (Fisheries Act 1983 s62, as enacted in 1986 when the QMS was introduced).Permits are granted under s63 by the chief executive of the Ministry of Fisheries (earlier the Director-General).They are issued as of right to those who have a right to take fish under a quota determined under the QMS (s63(2)).In all other situations, including the present, the grant is discretionary and may be subject to conditions:
63(4)Each fishing permit may be issued for a period of not more than 5 years on payment of the prescribed fee (if any) for each year or part of a year for which it is issued and shall be subject to such conditions relating to areas, species, quantities, methods, the use or non-use of vessels and the specific vessel or types of vessels (if any) that may be used, types and amounts of fishing gear, harvesting, handling, places where fish may be landed, and periods of time as the Director-General considers appropriate.
[7] As will appear, the High Court has ruled that that discretion is not unlimited and unfettered (para [30] below).
[8] The comparable provision originally included in the 1983 Act before the QMS was introduced similarly provided for the discretionary grant of permits and for the imposing of conditions, including conditions relating to areas, species and quantities (s64(2)).Under the present provision the chief executive has the power to amend, revoke or add to the conditions (s63(6) and (10)).Three provisions govern the power to fix conditions:
63(7) No conditions may be imposed under this section on any permit that conflict with or are inconsistent with the conditions of any relevant fishery management plan.
63(8) The conditions that may be imposed on permits under this section may be more restrictive or more onerous than the conditions imposed on fishing by any regulations or notice.
63(9) The conditions referred to in this section shall be substantially the same for all permits for any fishery management area or quota management area in respect of the same class or species of fish unless the Director-General is satisfied, on stated grounds, that different conditions are reasonable.
[9] The section also provides that an applicant or permit holder is entitled to have any decision taken under the section by a delegate reviewed by the chief executive or a designated officer (s63(11)).
[10] In 1992 s63 was amended to restrict the issue of permits.From 18 December 1992 (originally as a brief moratorium until 30 September 1994 but since 1 October 1994 without limit of time), permits must not be issued in respect of any species, other than those species subject to a QMS and tuna,
except to a person who [1] had a fishing permit that was in force on the 30th day of September 1992 and [2] [lawfully took] fish, aquatic life, or seaweed under a fishing permit held by that person at any time during the period commencing on the 1st day of October 1990 and ending with the close of the 30th day of September 1992.(s63(13)(a)).
(The fishing year is 1 October in one year to 30 September in the next.)
[11] Further, a permit issued to such a person authorises the taking of only those species authorised by the permit held by that person during that period (s63(13)(b)).Any current permit was to be revoked if the holder had not lawfully taken that species in the specified two fishing years (s63(13)(c)).
[12] On 30 September 1992 Westhaven had a permit to harvest cockles and had lawfully taken cockles in the 1990-92 period.Accordingly, the new restriction on the issue of permits did not apply to it except that the power to issue new permits to it was restricted to cockles (s63(13)(b)).
[13] The new provision did not and does not however stand in the way of permits being granted in respect of other areas. Subsection (13) is not area specific, nor does it, for instance, require that new permitsbe limited to the quantities earlier fixed or to the methods earlier approved under s63(4).We shall see that at times the Ministry proceeded on the erroneous basis that s63(13) confined permits not only to the original species but also to the original areas (paras [24] and [35]).We shall also see that it has recognised that error (paras [26] and [35]).
[14] From 1 October 1996, the review power conferred by s63(11) (para [9] above) was supplemented by s329(4) of the Fisheries Act 1996. Section 329 declares to be and always to have been valid every decision and purported decision made in respect of fishing permits and special permits under ss63 and 64.But that validation does not apply to pending court proceedings nor to decisions or purported decisions made after 1 October 1992 (the present case) that are the subject of applications for review made to the chief executive which were pending at the time s329 came into force or were made within twelve months of that date.
[15] A further significant power for restricting fishing, for the purposes of conservation among other things, was conferred by s65 of the 1983 Act.Under s65(1) the Minister of Fisheries was able to declare that it would be a condition of every fishing permit that the holder could not fish in a fishery specified in the notice.Under subs (2) the Minister also had the power (which could be delegated) to exempt a permit holder from the prohibition.Under the 1986 version of the section it was not to apply in respect of any QMA for any species subject to the QMS in that area (s65(5)).The provision was repealed by the Fisheries Act 1996.
[16] One other aspect of the 1983 and 1996 Acts should be mentioned - their indications of purpose.The 1983 Act, in terms of its title, consolidates and reforms the law relating to the management and conservation of New Zealand fisheries and fishery resources.According to s8 of the 1996 Act, the new Act's purpose is to provide for the utilisation of fisheries resources while ensuring sustainability.The purpose is supported by statements of environmental and information principles.
[17] Fishing is also controlled by an array of regulations.In particular the Fisheries (South East Area Commercial Fishery) Regulations 1986 reg 11AA (made on 26 August 1991) prohibits the taking of cockles (among other species) in area 3 (SCL's area) unless the Director-General authorises the taking. There are similar regulations applying to all the areas in issue in this case. Subject to the Act and regulations made under it, the Director-General has power to give that authorisation either unconditionally or subject to such conditions as thought fit (reg 11AA(3)).As the regulation recognises, the power is in any event subject to the limits imposed, among other things, by the Act (including s63(7)-(9), para [8] above).
[18] The appellant challenges several decisions.They can be divided into four categories : policy and similar general documents, initial particular decisions relating to Westhaven, review decisions relating to it, and the decisions relating to area 3 where SCL is the only fisher authorised to harvest cockles. We set out the detail of the decisions at some length since it is significant for the assessment we make later in the judgment about the lawfulness of the Ministry's actions.
[19] The Director-General issued a document on about 13 August 1993 headed 1993/94 Fishing Permits and Vessel Registration Guidelines and Procedures.In respect of permits for fisheries which were not the subject of the ITQ system the document said this:
1. Each species/area/method combination applied for must be determined prior to data entry.
2. Section 63(13) is the key reference for such decisions.However, the "Schedule of Particulars of Powers sub-delegated by the Group Director MAF Fisheries" must be consulted in terms of columns 4 and 5 and 6 if applicable.
3. A summary of the rules is as follows:
[20] For 1994/95 the Director-General on 22 August 1994 issued new guidelines which contained a similar passage.
[21] The relevant provision of the 1995/96 Guidelines provided that
(b) No permits are to be issued other than to applicants who ...
(i) Held a fishing permit that was in force on the 30th day of September 1992 for the species and the area applied for;and
(ii) Lawfully took fish, aquatic life, or seaweed under a fishing permit held by that person at any time during the period commencing on the 1st day of October 1990 and ending with the close of the 30th day of September 1992.
...
(d) No additional species or areas are to be added to existing permits, with the exception of those tuna species detailed in Table 2 of these delegations.
The November 1995 and March 1996 Guidelines contained that same passage.
[22] The Director-General's Instrument of Delegation of 27 November 1997 included the following:
3B Area
(a) The Chief Executive considers it appropriate that permits for non-quota species, except tuna, are conditioned to:
(i) only that species and area combination in respect of which a permit was issued as at 30 September 1992;or
(ii) only that species and area combination in respect of which a permit was issued in any subsequent fishing year.
(b) The Chief Executive considers it appropriate that tuna species are conditioned to those areas listed in the Fishing Permits chapter of the QMS Manual at Table 3.
and
3. The Powers
(a) May only be exercised in respect of persons who held:
(i) an authorisation under s65(2) of the Fisheries Act 1983; or
(ii) an authorisation to target under the relevant Regional Commercial Fishing Regulations
authorising them to fish for the relevant species in the relevant area for the 1990/91 fishing year.
[23] By a letter of 23 September 1993 Westhaven applied for permits for the 1992/93 fishing year (that is only for the last week of that fishing year) and for the 1993/94 fishing year in seven areas additional to that in which it was already fishing.(Judgment had been given in the High Court in Petromont Holdings Ltd v Director General of Agriculture and Fisheries (Auckland M986/93) just two weeks earlier overruling one aspect of the Ministry's understanding of s63(13).)The applications were determined in accordance with the guidelines set out in para [19] above and were declined in a letter of 6 October 1993:
These applications have been declined as the Director-General's policy states:
(1) You must have held a permit for that species/area/method as at 30/9/92; and
(2) Caught fish of the species in any area (as authorised by a fishing permit) between 1/10/90 and 30/9/93.
[24] In a letter of 23 December 1993 the Ministry said this to Westhaven:
the Fisheries Amendment Act of 18 December 1992 prohibited the issuing of any permits to applicants who had not previously held a permit and was enforced on 30 September 1992, and who had not caught fish during the period 1 October 1990 to 30 September 1992.This change to the Fisheries Act 1983 was designed by the Government to restrict any further expansion in non-QMS fisheries.Mr Macdonald's request for permits in areas 1, 2, 3, 4, 5, 8 and 9 were declined on this basis, according to the guidelines referred to above.
[25] Westhaven on 28 April 1997 applied for a variation of its s63 permit to enable it to harvest cockles in areas 3 and 5 for the 1996/97 year.In a letter of 16 October 1997 (that is after the fishing year had finished) the Ministry refused that application.After apologising for its delay, it gave these reasons for the refusal:
Firstly, the authorisation under both the Commercial Area Regulations cannot be granted as your client does not meet the criteria which we have always used for such applications.This criteria is that such authorisation may only be issued to persons who held an authorisation under section 65(2) of the Fisheries Act 1983 or the relevant area Regulations to fish for the species and area applied for, in the 1990/91 fishing year.
Secondly, the guidelines which are used by those staff with delegated authority to assess which species/area combinations may be conditioned on a fishing permit are such that the applicant must have held a permit as at 30 September 1992 for the species and area combination being applied for.Similarly this criteria is unable to be met by your client either.
(Further initial decisions, relating to area 3, are described under (d) in para [35] below).
[26] On 4 August 1994 Westhaven sought a review under s63(11) of the 1983 Act of the decisions made on 6 October 1993 (para [23] above).By a letter of 26 October 1994 that application was refused.The Ministry acknowledged that to the extent that the decision to decline the plaintiff's cockle permit application for the new areas was based on s63(13) it was incorrect.It then referred to the regulations prohibiting the taking of cockles without authorisation which were in force in all the areas in question (para [17] above).The decision had to be made on the basis of all the fisheries management information available at the time of the decision.There was not sufficient information available to warrant the issuing of a commercial permit in those areas.And, having reviewed the decision, there was still insufficient information available to justify granting commercial permits for those areas.The conclusion to the letter stated the official's opinion that the original decision declining the application was made in accordance with good fisheries management practices.Westhaven requested clarification of the grounds for refusal in other fisheries areas.On 12 December 1994 the Ministry replied:
You have requested the grounds for which the Director-General would consider authorising existing cockle fishers to expand their operations to areas not currently permitted.Regional fisheries management policy requires anyone wanting to develop non-ITQ fisheries to provide sufficient management information to establish the sustainable yield of the fishery.However, irrespective of the information available, it is the Government's intention to limit the development of non-ITQ fisheries until these species can be brought into the quota management system (QMS).This is primarily to avoid any potential race for catch histories or any commercial expectations prior to allocation.Section 63(13) of the Fisheries Act 1983 was promulgated in December of 1992 specifically to exclude new entrants from these fisheries. Once within the QMA, it will be the prerogative of the stakeholders in the fishery to investigate the potential to increase the total allowable commercial catch (TACC).
[27] On 27 March 1997 Westhaven sought a review under s329 of the Fisheries Act 1996 of the same 1993 decisions and on 11 April 1997 it extended its application to include the 1994 review just mentioned.On 20 October 1997 it sought a review under s63(11) of the decision made a few days earlier (para [25] above).It provided submissions in support of the applications on 24 February 1998.They were supported by a report by Dr Robert Wear, a scientist with relevant expertise, about the availability of cockles in New Zealand waters.On 14 July 1998 the Ministry indicated its provisional decisions to decline the applications and allowed Westhaven 15 working days to make further submissions which Westhaven did.
[28] The principal paper communicating the provisional decisions and prepared by Ms Risk of the Ministry set out the "current guidelines for the exercise of delegated authority for s63(4)" and "for regulation 11AA(3) of the Fisheries (South-East Commercial Fishing) Regulations 1983".(They are identical to paras 3B and 3 set out in para [22] above.)Those guidelines and their equivalent or nearly equivalent guidelines had been in place since the implementation of the moratorium on the issue of non QMS fishing permits to new entrants under s63(13):
13. ... They are a consequence of policy directives from theChief Executive (and previously Director General) to be cautious where a decision to approve could impact adversely on sustainability, on Mäori fishing rights, on future management of the fishery (for example on the Coalition Agreement in the fisheries policy area) or on the intent of the permit moratorium to avoid a race for quota.
14. These policy directives are consisted with various statements of policy in regard to non-QMS permitting put before the Minister and Cabinet (refer #5-#8). [The references are to documents enclosed with the decision paper.]
[29] Ms Risk then assessed Westhaven's six grounds for review.Under "Mistake of Fact" she stated that the reviewer erred in interpreting the original decision to decline the application as being based to any extent on s63(13). Rather, that decision was in fact based solely on the Director-General's policy concerning the exercise of the discretion under s63(4).While Westhaven met the requirements of s63(13) (of having a cockle permit and of harvesting cockles in any area), it failed to meet the policy guidelines of "no additional species, areas or methods".Under the subheading "Adherence to a Policy" Ms Risk recognised that a policy for the exercise of a discretion may be developed but a difficulty arose in administrative law terms were the application of the policy strictly adhered to without due regard to the circumstances of the particular area:
40. In considering whether the Director General exercised his discretion under s63(4) without due regard to the relevant circumstances of Westhaven's case it is necessary to consider the nature of information pertinent to the decision.
41. The permitting policy the Director General was implementing in regard to that particular class of application pursuant to his discretion under s63(4) was based on statements of policy in regard to non-QMS permitting put before the Minister and Cabinet in the previous year (refer "#5 - #8").It is clear from these statements that the policy was based on an assessment of fisheries management information of a general nature;ie that the expansion of fisheries could compromise Crown negotiations with Mäori, information that cockles were extremely important to Mäori, information concerning catch history and other incentives and the general impact on sustainability of expansion of fisheries outside the QMS fisheries.As a result there were specific guidelines for specific classes of permit application.For permit applications involving new areas, the guidelines were to decline this class of application using the discretion the Director General could exercise under s63(4).
42. As a consequence of the generic nature of the information upon which the policy was based only new or particular generic information would be likely to affect the outcome of decisions regarding this class of application.Specific information on the size or sustainable yield of the cockle stocks in the various FMAs in support of Westhaven's application would not have influenced the decision given that the permitting guidelines for new areas were based on other and more generic fisheries management information.This information was constantly being reassessed by MAF and was known to the decision maker.
43. I do not consider that Duffield [who made the initial decision] or Hart [who made the review decision] "blindly adhered" to policy without due regard to the particular circumstances of Westhaven's application, given the nature of the information presented on the application form, ie to harvest cockles in all New Zealand FMAs, and that no additional information was supplied by Westhaven advising of particular circumstances that the decision maker should take into account.Consequently, Westhaven's application was one of a class of applications which the policy guidelines considered.There are no special circumstances identified at any time which suggest that a special case needed to be made in terms of the policy.Therefore, the policy was correctly applied and the application declined.
44. Despite the opportunity presented by Hart's review of Duffield's decision, Westhaven supplied no additional information intended to advise MAF of any circumstance which might place the applications outside that class of applications which the guidelines specified were to be declined.
[30] The paper then turned to the "Section 63 Discretion" and to High Court decisions showing that the decision maker did not have "wide and unfettered discretion" to make permit decisions (Gunn v Quota Appeal Authority [1993] NZAR 102 and Vickerman Fisheries Ltd v Attorney-General (High Court, Wellington, 26 August 1994, CP1007/91 and CP655/87):
50. However, the case law does not go so far as to say that the Director General/Chief Executive cannot exercise his or her discretion to limit fishing eg;to limit effort in a fishery. The discretion in conditioning permits remains relatively unfettered except that the conditions must be within the scope of the purpose of the Fisheries Act, reasonable and fair - these may take the form of a policy.
51. For example, the current delegation guidelines for s63 (refer paragraph 11 of this review [para [22] above]) do not constitute a general policy of exclusion in my view as they permit permitting but within certain parameters. Further, the determination that permits should be given to those who held both the area and species combination at 30 September 1992 is made within the scope of the Fisheries Act 1983 ie for conservation and management of fisheries purposes (refer paragraphs 13 [para [28] above] and 60 of this review). [According to para 60 of the paper, sustainability and fisheries management is within the scope of the Act and can therefore form a policy if it is reasonable to do so.]
[31] The paper then considers and dismisses the Westhaven argument that the reference to the area regulations (para [25] above) meant that the decision was taken under those regulations.The decision was taken only under s63(4) and there was no mistake of law.(We shall see that Ellis J upheld the decision under the regulations;para [41] below.)
[32] Westhaven in its further submission commented on the reference (in para 42 of the paper set out in para [29] above) to "generic" information.
4. ...It is stated ... that the permitting policy is subject to an exception or proviso if persons in the position of Westhaven are able to provide information of a "generic" nature relevant to the reasons why the policy was established in the first place.... Westhaven has a number of concerns in relation to this position as now communicated [in para 42 of the paper].
5. First, Westhaven has never been informed on any previous occasions that such an exception or proviso to the described policy exists, or the nature of the information that is considered relevant in determining whether an exception to the policy is established.Given that the permitting decisions subject to the review go back as far as the 1992/93 fishing year, Westhaven cannot understand why the existence of this proviso to the policy has not been made known.Apart from anything else, this must involve a breach of natural justice.
6. Secondly, notwithstanding the description of this exception ... Westhaven still has little or no idea what information would be relevant to establishing an exception.[The letter then quoted from para 41 and continued:]Quite frankly, Westhaven has no idea what the above description actually means in real terms, and what the so-described "generic" information is.It is impossible for Westhaven to provide information relevant to those matters if the Ministry has not explained precisely what those matters are, and what information would be relevant.
7. Further, by stating that "this information was constantly being reassessed by MAF and was known to the decision maker", it would seem that the relevant decision makers did have the advantage of knowing what this category of information comprised, and presumably the basis for exceptions to the stated policy.Nevertheless, Westhaven has never been informed of the existence of the exception, let alone the information required to satisfy it.
8. It would also appear that the exception to the policy, and the information relevant to it has continually been "reassessed".Presumably this means that the position has changed over time without any description of either the original position or the changed position being given to Westhaven (but nevertheless evidently known to the decision makers).
9. Related to this, both the decisions fail to explain the present status of the exception to the policy, and what information would be relevant to establishing the exception.For example, Ms Risk states in paragraph 41 that the policy was created (partly?) because of the possibility that the Crown's negotiations with Maori would be compromised.However, as the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 makes plain, all claims by Maori in relation to commercial fishing rights have been settled on the basis that Maori will obtain 20% of the quota upon the introduction of a stock into QMS.In those circumstances, it is unclear what status the possible compromising of the Crown's negotiations with Maori can now have or how Maori interests are really relevant to non-QMS fisheries in light of the provisions of the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992. In this context, Ms Teirney's decision [on the s63(11) review of the 1997 decision] does not even mention the apparent exception to the policy, let alone identify what information of a "generic" nature would now be regarded as relevant, or exactly what "generic" information is now relevant.
10. The distinction between the "generic" information and the "specific" information referred to in paragraph 42-44 of Ms Risk's decision has also not been explained.For example, Westhaven provided a report from Dr Robert Wear, which analysed the available information and, in essence, reported that cockles are extremely abundant in almost all New Zealand harbours and estuaries where relatively stable tidal mud flats or sand flats exist, and that it was perfectly reasonable to permit exploratory commercial fishing in new areas where cockles were so abundant.Westhaven finds it impossible to understand how this type of analysis and report is not regarded as relevant to its application be permitted to fish in those areas, or how Dr Wear's report loses its significance by virtue of its categorisation as "specific" rather than "generic".
[33] In letters of 4 and 8 September 1998 Ms Teirney and Ms Risk confirmed their provisional decisions.Ms Teirney responded to Westhaven's question (in paras 9 and 10 just quoted) about information relevant to applications to fish in other areas:
The generic fisheries management issues which the policy guidelines are intended to address are described in ... my provisional decision.Information which resolved these issues could be considered to be relevant.Dr Wear's report is outside the scope of this review as it was not a component of Westhaven's original application.
[34] Ms Risk said this in response to paras 4-6 of the Westhaven submission:
In describing the information upon which the Director General's permitting policy for this class of application was based (paragraphs 37 to 44 of my provisional decision), it was my intention to establish whether Westhaven's application had been considered without due regard to the particular circumstances of the application. I concluded that Westhaven's application was one of a class of applications which the policy guidelines considered and that there were no special circumstances identified at any time which suggest that a special case needed to be made in terms of policy.It was not my intention to suggest that there is a criterion of exemption to the policy guidelines which has been kept silent by the decision maker.
In considering the generic fisheries management issues which the policy guidelines were intended to address (paragraph 41 of my provisional decision), I determined that only information which resolved these issues could be considered to be relevant.
It is my view that the use of a policy to regulate the exercise of the Director General's discretion under Section 63(4) of the Fisheries Act 1983 was lawful and that the applications were correctly declined according to this policy.
(d) Decisions about area 3 and SCL
[35] Westhaven unsuccessfully sought a permit to harvest cockles in area 3 for the 1998-99 year while SCL's was granted.SCL then applied for an increase for the 1999-2000 year and Westhaven applied for an individual catch entitlement (ICE) in respect of the additional commercially available stock in area 3.By a letter of 29 September 1999 Westhaven's application was declined on the basis that s63(13) prevented it being granted.In a letter of 6 April 2000 the Ministry advised Westhaven that the basis for that decision was incorrect because of an incorrect application of s63(13).The decision had however been remade and declined on the basis of the policy guidelines:
The guidelines specify that permits for all non quota species, except tuna, be conditioned to only that species and area combination in respect of which a permit was issued as at 30 September 1992;or only that species and area combination in respect of which a permit was issued in any subsequent year.
...
Westhaven does not meet the criterion for granting permit variations under section 63(4) and section 63(6) of the Fisheries Act 1983.Westhaven's permit was not conditioned to include FMA3 cockles as at 30 September 1992, nor in any subsequent year.Consequently Westhaven's application does not meet these criteria.
I note that Westhaven has made other applications for FMA3 cockles in the past two years, all of which have been declined by MFish on this basis.I also note that MFish has provided Westhaven with opportunities to furnish additional information in support of these applications to show that a departure from the guidelines is justified, but that Westhaven has not done so.Westhaven has not provided any information with its application and MFish does not have any other information that indicates that a departure from the guidelines is warranted at this time.
Decision
The [s63(13)] basis for FishServe's decision to decline Westhaven's application dated 30 August 1999 was incorrect.
I have re-considered Westhaven's application to take cockles in FMA3 in the 1999/2000 fishing year and have decided to decline that application.I have done so on the basis that there is no justification to depart from the Chief Executive's guidelines for decision making under section 63(4) and section 63(6) of the Fisheries Act 1983.
[36]The Ministry granted SCL an increase in its ICE as a variation to its permit for the 1999/2000 year.
[37] After setting set out the facts and the principal legislative provisions, Ellis J then stated what in his view was the first and critical question:
[it] is whether the policies formulated in the Ministry and which have been applied in the six decisions are lawful under the 1986 regulations [the area regulations, para [17] above].In my view the regulations and s63 work together.The Act gives power to make the Regulations and the Regulations give the power to issue the permit which must be exercised in terms of s63.
[38] Neither in the High Court nor this was there any attack on the validity of the regulations.It will be recalled that the Ministry in its review decision depended on s63 rather than the regulations but that Ellis J in the scampi case held that s63 does not itself authorise the Director General to create and allocate a quota."What is not envisaged is the introduction of a quota system.In my view that can only be done by regulation and Gazette notice or by bringing the stock under the QMS."In that case Ellis J was confronted with the use of conditions attaching to a permit under s63 as a method or system of allocating scampi.In this case we are not concerned with the use of conditions under s63 for this purpose, but rather as an administrative adjunct to implement an otherwise validly established system of allocation.
[39] The Judge then referred to cases about the exercise of discretion and in particular to "the general rule", as stated by Lord Reid in British Oxygen Co Ltd v Minister of Technology [1970] UKHL 4; [1971] AC 610, 624, "that anyone who has to exercise a statutory discretion must not `shut his ears' to an application (to adapt from Bankes LJ [in R v Port of London Authority, ex parte Kynoch Ltd [1919] 1 KB 176, 183]".By reference to those and other cases, the Judge stated this test:
So in general guidelines or policies may be quite specific, so long as they are in conformity with the particular legislative policies and leave sufficient room for the proper exercise of the discretion.
[40] He then turned to the circumstances of this case:
Here it is not suggested that the 1986 regulations were ultra vires.The power to make them is plainly given in s89 of the 1983 Act.I have already analysed the purpose of the Fisheries Act in the Scampi case.In my view it is beyond question that the prime function of the Ministry is to manage and conserve the fisheries.Harvesting is to be encouraged but not at the expense of the resource.The management must ensure the resource is renewed at satisfactory levels.All this involves a high degree of understanding both of the resource and of the demands upon it.In my view it is equally plain that before commercial fishing can be allowed at any site the Ministry must have sufficient knowledge of the stocks there.
[41] The Judge recalled the policy of limiting fishers in their 1990-92 areas, a policy more restrictive than s63(13), which was originally to impose a short moratorium but long enough to enable the fisheries to be brought into the QMS. That had not - and has not - happened in the case of cockles.
It is also common ground that there are large stocks of cockles and only a handful of fishers and fisheries exploited them commercially.It is understandable that commercial fishers with markets available are disappointed that they cannot expand more freely into new areas.Nevertheless the resolution of this unsatisfactory situation is essentially in the political arena under the 1996 Act where the Minister can bring the species under the QMS.I am satisfied that the policies promulgated by the Ministry for the application of the Regulations are in accordance with the purposes of the Fisheries Acts but that the Chief Executive must nevertheless be prepared to entertain applications by any fisher who qualifies under s63(13) to fish in any area not just the area for which permits were held in 1992.In my view the Ministry was entitled to require what Ms Risk referred to as "generic" information as well as information specific to the fishery in question.In particular information relevant to the vexed issue of "race for quota" would have to be addressed.The Ministry has approved extensions of permits for both Westhaven and Southern Clams in their existing areas.It is not inconceivable that applications outside those areas could address the concerns covered by the policies satisfactorily.To date the applications by Westhaven that are the subject of these proceedings have as a matter of fact not addressed all the policy considerations,whereas Southern Clams' application did as far as was necessary.
For the above reasons I am satisfied the Ministry did have power to make the decisions in question under the Regulations and was entitled to apply the promulgated policies in the way that was done.The decisions were often framed as being pursuant to s63 of the 1983 Act.While it is unnecessary so to decide, in my view the matters of policy in issue may not have been appropriate to decisions under that section alone.This is more fully developed in the decisions I have already referred to in Gunn, Vickerman, Petromont and Scampi.
[42] Accordingly he dismissed the application for review.
[43] Counsel presented the issues in various ways.We have considered them by reference to the following questions:
1. Does s63 provide a power to introduce a quota system additional to that under the quota management system and any relevant regulations?
2. What, if anything, do the area regulations add to the powers of the Ministry?
3. Is the Ministry's policy as set out earlier in this judgment lawful?
4. Has the policy been unlawfully applied in the decisions under challenge in the sense that the exercise of the discretions under the Act, the regulations or both, was unlawfully fettered?
5. In respect of the grant of permits in area 3 to SCL but not to Westhaven has there been a breach of the requirement in s63(9) that the conditions on permits be substantially the same?
6. If any of the grounds for review is made out what relief, if any, is appropriate?We say "if any" in part because SCL pleads an affirmative defence of delay.
[44] Given the conclusions we have reached, we go directly to questions 3 and 4 and consider them together.
Has the Ministry developed an unlawful policy or applied it inconsistently with the discretion conferred on it or both?
[45] The parties are not in essence in dispute about the law to be applied.It is that stated by Ellis J and summarised earlier in this judgment (para [39] above).We also do not consider that it matters whether the facts are assessed by reference to s63(4) or to the area regulations.Both sources confer powers to grant permits or authorisations and those powers, as general principle and particular decisions (para [30] above) require, are not unfettered or absolute.While the chief executive can state a policy, the decision makers must keep their ears open, as Bankes LJ indicated.They must indicate, or at least reserve, a power to depart from the policy and a willingness to exercise that power.They must bear in mind and conform with the purposes of the legislation under which they are making decisions.Have they done that?
[46] In terms of their purpose, the Acts (1996 more than 1983) recognise or even emphasise that fisheries are to be used (para [16] above).The legislation also emphasises the need for caution, through for instance the moratorium powers which the Minister had until 1996 under s65 of the 1983 Act and the limit placed by s63(13), and through the principles in the 1996 Act. On the last we note for instance the balance struck in s10(c) and (d).The 1996 provisions may not be directly relevant to the exercise of powers under the 1983 Act but we need not resolve that.As already stated, the 1983 Act, read with general principle, requires that particular decisions be made by reference to the relevant facts and the statutory purpose even if there is a guiding policy.
[47] We return to the facts.For a number of connected reasons we conclude that the facts do demonstrate that the chief executive and Ministry have not lawfully exercised the powers conferred by the Act and regulations.
[48] We begin with the policy (paras [19]-[22] and [28]).The statements, especially in the early years, appear to be closely associated with the Ministry's misinterpretation of s63(13), a misinterpretation that continued to affect decisions until at least late 1999 (para [35] above).Even where that error was recognised (eg in 1994, para [26]) the policy remained unchanged. Although some of the documents are headed Guidelines they all take an apparently absolute force.They all require that the "species/area/method" or "species and area" applied for exist in the 1992/93 year or on 30 September 1992.Particular words also emphasise the mandatory character of the power : approve, decline, no permits are to be issued other than to ..., permits for non quota species are conditioned to only ... .A policy might well state a presumption, or even a strong presumption, against new permits.We are not saying that a policy has to be open ended.But the policy cannot deny the power which the law has conferred.
[49] Those statements of the policy do not recognise in any way that there might be a departure from the policy nor do they indicate what facts might support such a departure.
[50] That is true as well of the particular decisions.The reasons given for the refusals (when not based in whole or part on the misreading of s63(13)) simply recite and apply the policy (paras [24], [25], [26] and [35]).They again do not recognise any possible limit on the policy, with the exception of the 1999/2000 decision relating to area 3.That exception appears not in the original 29 September 1999 refusal (which was based on the misreading of s63(13)), but in the remade decision of 6 April 2000.That later letter says the Ministry had in the past two years provided Westhaven the opportunity to furnish additional information in support of its application to show that a departure from the guidelines is justified, but that Westhaven had not done so. That indication was given in the middle of the 1999/2000 fishing year, that is more than two years after Westhaven had submitted the Wear report in support of its applications for review and more than a year and a half after being told that that "specific" material was not relevant.
[51] It is the case that the 1994 review decision did refer to the need for the permit decision to be made on the basis of all the fisheries management information available at the time of the decision and that Westhaven does not appear to have taken up that indication.But that indication is exceptional among the decisions and the 1997 refusal, for instance, was again simply based on the policy.
[52] The policy was also central in the 1998 review processes.The reviewers recalled that the policy had been put before the Minister and Cabinet.The policy was based on an assessment of fisheries management information of a general character.As a result, the guidelines were to decline this class of application using the discretion the Director General could exercise under s63(4).The result was that only generic information would be likely to affect the outcome (paras 41-42 set out in para [29] above).The nature of whatever limit there was to the policy was however put in doubt by Ms Risk's letter of 8 September 1999 announcing the decision on the review, for there she first refers to the need to establish special circumstances, suggesting that a special case could be made in terms of policy, but secondly says that only information which resolved the generic fisheries management issues could be considered relevant.
[53] In the end, the policy and the series of decisions and the explanations given for them lead us to the conclusion that the chief executive, in stating the policy, and Ministry officials, in applying it, have effectively closed off the possibility of permits being granted except on a species/area basis.The chief executive has not allowed the possibility of exceptions being made to the policy in the statements of the policy and in substance the officials have not (understandably given the policy and the delegations) recognised such a possibility.That is so of the review decisions as well.While the officials carrying out the reviews may not have been formally subject to the policy they nevertheless closely adhered to it.There is a sense in which the earlier misinterpretation of s63(13) (along with an unimplemented Ministry proposal that the species/area rule be expressly legislated) has never fully removed itself from the scene.
[54] It follows that we find that in the circumstances of this case the policy has been developed unlawfully and applied unlawfully in the Ministry's refusals of the Westhaven initial and review applications.It also follows that we need not consider the arguments about the relevance of Maori fishery rights and policies to the validity of that policy.Westhaven's appeal succeeds on this issue.
Has the Ministry unlawfully discriminated in breach of s63(9)?
[55] Section 63(9) requires that the conditions referred to in s63 "shall be substantially the same for all permits for any fishery management area or quota management area in respect of the same class or species of fish unless the chief executive is satisfied, on stated grounds, that the different conditions are reasonable". Westhaven claims that this provision was breached in the decisions relating to area 3 and SCL.SCL and the Ministry argue that s63(9) is not relevant, nor, according to SCL, was it breached assuming it to be relevant.The Judge did not address this issue in this case, but he did hold in the Scampi case that s63(9) applied to non QMS areas:
It is common ground that in the scampi fishery there are no such defined areas. However, throughout the management of the fishery and over the whole period now under review, the fishing areas have been defined as SCIs 1-9 or QMAs 1-9 and these areas have been used to describe the areas fished, the quotas to be caught and the TAC.For example, see the use of QMAs in R20C of the 1991 Regulations ... . No-one has until the defence case was argued suggested that s63(9) did not apply to the permitting regime and the Petromont decision is a striking example.In my view [in] the context of s63 as it applies to the scampi fishery (and other fisheries not subject to QMS) a fishery management area in any event refers to the areas defined for fishery management as so plainly understood by all, that is those areas shown on the map exhibited at the beginning of this judgment and referred to as QMAs 1-9.I therefore proceed on the basis that s63(9) does apply to the permits in this case.
[56] The SCL/Ministry argument focuses in the first place on the expression "any fishery management area or quota management area" used in s63(9).No quota management area existed or exists in respect of cockles, since cockles are not subject to the QMS and the definition of QMA at the relevant time required a quota management area declared under s28B of the Act.Equally, no fishery management area existed or exists because it had been defined from 1983 as any area so declared under s5 of the Act and no such area had been declared at any time in respect of cockles - or indeed of any other species.
[57] Westhaven argued that the point was wrongly decided in the Scampi case : (1) the fact that the words are later used in a manner manifestly inconsistent with the way Parliament plainly intended when enacting the provision in 1986 is no reason to depart from the clear meaning;(2) the reading would render meaningless the reference in the subsection to any FMA and QMA;and (3) subs (9) was introduced as a part of the complete rewrite of s63 when the QMS was introduced in 1986;Parliament's clear intent in the new subs (9) was that where one of the full integrated fisheries management regimes applied (a Part I FMP or a Part IIA QMS) the use of individualised permit conditioning was to be discouraged.
[58] The Westhaven response endorsed the Judge's position in the Scampi case, made various points about the unfairness of the interpretation proposed by SCL and the Ministry and drew on features of the legislation.
[59] On the final matter, Westhaven stressed the changes to the definition of QMA since it was first introduced in 1986 as meaning a QMA declared under s28B of the Act.The first change was made by the Maori Fisheries Act 1989.That Act set up the Maori (now the Treaty of Waitangi) Fisheries Commission and provided for the transfer of QMS quota to the Commission and for other matters designed to make better provision for the recognition of Maori fishing rights secured by the Treaty, to facilitate the entry and development by Maori of the business and activity of fishing, and to make better provision for the conservation and management of the rock lobster fishery.It also amended the 1983 Fisheries Act by adding to the original definition of QMA the following : "or (b) A quota management area described in the Third Schedule to the Maori Fisheries Act 1989".That schedule sets out 10 areas.The definition was further amended by the Fisheries Amendment Act (No. 2) 1992 when the following paragraph was inserted into it : "(aa) The southern Scallop Fishery; or". The third amendment to the 1983 definition was made by the Fisheries (Remedial Issues) Act 1998 which replaced the three part definition by the following:
"Quota management area" means any fishery management area or quota management area described in the First Schedule of the Fisheries Act 1996.
[60] The new schedule defines 10 fishery management areas (area 3 being South-East (Coast)), seven additional fishery management areas and 34 species specific quota management areas.
[61] So far as "fishery management areas" are concerned, Westhaven referred us to a notice made on 29 January 1986 by the Minister of Fisheries under s5 of the 1983 Act declaring the scheduled areas to be fishery management areas for the management of all species of fish within those areas (1986 New Zealand Gazette 412).That defined seven such areas.The notice was not to apply to fish taken by foreign fishing craft nor to specified fish.The notice appears not to have been revoked, but once s5 was repealed on 1 October 1995, along with the rest of Part I, the notice would no longer be valid and could have no effect.
[62] But did it, along with the amendments made to the original definition of QMA in the 1986 amendment, have an effect at some relevant time for the purposes of s63(9) of the 1983 Act?
[63] We take the FMA definition first.Under Part I of the 1983 Act (as in force until 1995) it could be operative only for the purposes of s4 of the Act - that is for the purposes of any fishery management plan actually made under Part I.No such plan was ever made for cockles - or indeed for any other fishery - and accordingly the 1986 declaration could not assist Westhaven even when it was in force.
[64] But can the evolving definition of QMA assist Westhaven?We do not consider that it can.An essential feature of the QMS as introduced in 1986 was that once the Minister made the relevant decisions the new system would be applied to particular species in particular areas and the particular QMS would set a total allowable catch (TAC).The relevant steps would be taken under the new Part IIA : there would then be a particular QMA, matching the original 1986 definition of that expression.That was made very clear by the first notice, given on 18 September 1986 and effective from 1 October 1986 (SR1986/267). While that in a sense provided generally applicable definitions of 10 QMAs (which could be used and were used for other, non QMS purposes as a matter of convenience) it subdivided some of the areas and provided a different set of seven for paua.Further, when it fixed the quota for 28 named species it fixed some TACs for combined QMAs.The specific amendments to the original 1986 definition have the same particularity.The 1989 amendment is to be related to the particular statutory provisions declaring rock lobster to be subject to the QMS.Like the 1986 notice (and all its amendments) that legislation also fixed particular TACs for the species : for spiny rock lobster separate TACs were fixed for each of the newly defined areas and for packhorse rock lobster a single TAC was fixed for all New Zealand fisheries waters.The new part of the definition of QMA does not appear to be capable of applying to any other aspect of the 1983 Act.It related only to rock lobsters within the QMS, and area 3 for instance concerns the Gisborne area.Essentially the same analysis applies to the 1992 amendment relating to southern scallops.That amendment too cannot be given a more general significance.The 1989 and 1992 definitions apply only for their particular purposes : the context (to refer to the standard wording at the beginning of s2(1), the definition section of the 1983 Act) makes that limit clear.
[65] But does the 1998 substituted definition help?It will be recalled that it defines QMAs as meaning any fishery management area or quota management area described in the first schedule to the 1996 Act (para [59] above).But that schedule again is in substantial part species specific (para [60] above) and as s19 of the 1996 Act indicates it is only a starting point.While the Minister in establishing a particular QMS is, as far as possible, to maintain the same areas for different species (s19(2)), the area can be defined in a manner different from the definition in the schedule (s19(1)(a)), and the area around the Chatham Islands may be able to be created a QMA for particular species (s19(3)).Again the new definition in the 1983 Act must be seen, in context, as applying to the operation of Part IIA of the old Act (as it does to Part IV of the new Act) and not extending to s63(9).
[66] That interpretation is also supported by the wording of s63 itself, to return to it.Major weight should after all be given to that provision. Subsection (4) allows conditions to be imposed in respect of "areas", just as the pre 1986 Act s64(2) did.That contrast in wording must be given significance.Next, if Westhaven is correct not only is the lengthy reference to the two categories of areas to be equated to any "area" at all, but also the whole phrase is essentially being written out of the subsection.It would now provide that all permit holders are to have substantially the same conditions in respect of the same species.But Parliament did not so provide.
[67] Further, the history of the legislation supports the SCL/Ministry position.The earlier s64 had no equivalent to subs (9) - nor indeed to subs (2) which requires the issue of permits to ITQ holders.The two new requirements, introduced when the QMS was first provided for, are to be read as applying only to species subject to that new system (FMPs, mentioned in subs (2), no longer being provided for).Any argument of unfairness would have to be pursued on the basis of irrationality or unreasonableness not related to s63(9), but that has not been suggested in the current litigation.
[68] We accordingly conclude that Westhaven's claim based on s63(9) cannot succeed.We need not go on and consider the other issues raised under this head.
[69] As indicated, the appeal fails so far as it is directed at the decision to increase SCL's catch, and we accordingly do not have to consider SCL's affirmative defence of delay.But we have held that Westhaven has established that the Ministry's policy has been developed and applied to its applications in an unlawful way, essentially because the policy both in its statement and in its application has unlawfully fettered the discretion conferred by the Act, the regulations or both.There should be a declaration to that effect.That declaration will provide the basis for the future statement of policies and their future application.
[70] In its amended statement of claim Westhaven also sought orders setting aside the various decisions on its applications to fish for cockles in other areas and directing the chief executive to redetermine the application in accordance with law.It follows from the declaration set out in the preceding paragraph that the various decisions must also be set aside.
[71] We do not however make orders for redetermination of the applications, for one main reason.The fishing years in question are in the past, the appropriate relief is future looking and the parties' efforts should better be directed to the future.
[72] Westhaven's appeal against the chief executive succeeds.Declarations are made in the terms indicated in paras [69] and [70] above.
[73] As indicated, we have not had to resolve the important issues raised by the Treaty of Waitangi Fisheries Commission and Te Runanga O Ngai Tahu concerning the policy.The appeal against them is dismissed.
[74] Westhaven's appeal against SCL fails.
[75] Westhaven is entitled to costs of $15,000 against the chief executive and to reasonable disbursements, including travel and accommodation expenses for counsel to be settled by the Registrar in the absence of agreement.
[76] SCL is entitled to costs of $5,000 against Westhaven and to reasonable disbursements to be fixed by the Registrar in the absence of agreement.
[77] Costs in the High Court (which we understand have not been determined) are to be fixed there in the light of this judgment.
Solicitors:
M S Sullivan & Associates, Nelson for the Appellant
Crown Law Office, Wellington for the First Respondent
Bell Gully, Wellington for the Second Respondent
Chapman Tripp Sheffield Young, Wellington for the Third Respondent
Daniell Smith Stallard & Hunter, Nelson for the Fourth Respondent
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