THE OFFICIAL ASSIGNEE v THE CHIEF EXECUTIVE OF THE MINISTRY OF & ORS [2001] NZCA 340 (11 October 2001)

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 165/00

	between	THE OFFICIAL ASSIGNEE
		Appellant

	and	the chief executive of the ministry of fisheries
		First Respondent

	AND	MINISTER OF FISHERIES
		Second Respondent

CA 167/00

	between	vautier shelf company no. 14 LIMITED
		Appellant

	and	the chief executive of the ministrY of fisheries
		First Respondent

	AND	MINISTER OF FISHERIES
		Second Respondent

CA 170/00

	between	BARINE DEVELOPMENTS LIMITED
		Appellant

	and	minister of fisheries
		First Respondent

	AND	CHIEF EXECUTIVE OF MINISTRY OF FISHERIES
		Second Respondent

	AND	simunovich fisheries limited SANFORD LIMITED ANd AMALTAL LIMITED
		Third Respondents

CA 171/00

	between	sealord group LIMITED
		Appellant

	and	CHIEF EXECUTIVE OF ministry of fisheries
		First Respondent

	AND	simunovich fisheries limited, sanford limited and AMALTAL LIMITED
		Second Respondents

CA 193/00

	between	BRIAN SYDNEY DEADMAN AND robert whitelaw lees
		Appellant

	and	CHIEF EXECUTIVE OF MINISTRY OF FISHERIES
		First Respondent

	AND	MINISTer OF FISHERIES
		Second Respondent

	AND	simunovich fisheries limited, sanford limited and AMALTAL LIMITED
		Third Respondents

Hearing:	18, 19, 20, 21 June 2001
Coram:	Thomas J Keith J McGrath J
Appearances:	C B Littlewood for Official Assignee A P Duffy QC and K Anderson for CE Ministry of Fisheries and Minister of Fisheries T Sissons and C M Brick for Vautier Shelf Company F M R Cooke and C R Jurgeliet for Barine and Sealord C T Gudsell for Deadman & Lees A E L Ivory and M GKeall for Simunovich, Sanford and Amaltal
Judgment:	11 October 2001

judgments of THe court
Judgments
	Paras No.
Thomas J	[1] - [102]
Keith and McGrath JJ	[103]-[111]

THOMAS J

The issues

[1] The appellants have for some years been locked in a battle with the Ministry of Fisheries over the Ministry's allocation of catch entitlements to fish for scampi.They assert that the Ministry has acted unlawfully, unreasonably and unfairly.The appellants finally brought proceedings for judicial review against the Minister and the Chief Executive of the Ministry. Other fishers who have fared much better in obtaining catch entitlements support the Ministry.

[2] Ellis J was the trial Judge.He held that certain allocations were unlawful and unfair.But he further held that the Fisheries (Allocation of Individual Catch Entitlement) Regulations 1999 (the 1999 Regulations) were designed to put the allocations beyond the reach of the Courts, and that they did just that.So the appellants failed.But they have appealed.

[3] The major issues can be defined as follows:

* Are the 1999 Regulations valid?

* Did the Chief Executive of the Ministry of Fisheries properly exercise the discretion conferred on him by reg 3 of the 1999 Regulations in allocating individual catch entitlements (ICE)?

* If the answer to either of these two questions is "no", is there any reason why the Court, in the exercise of its discretion, should refuse to grant relief?

The appellants and other parties

[4] There are five appellants.They are Barine Developments Ltd (Barine), Vautier Shelf Company No. 14 Ltd (Vautier), Brian Sydney Deadman (Deadman), Sealord Group Ltd (Sealord), the Official Assignee in Bankruptcy for the Estate of W T Howell (the Official Assignee).The fishers who support the Ministry are Simunovich Fisheries Ltd (Simunovich), Amaltal Fishing Co Ltd (Amaltal) and Sanford Ltd (Sanford).Simunovich has brought a counterclaim.See para [54] below.The company also contends that Ellis J's decision to make no award of costs is wrong.

Scampi and the scampi fishing areas

[5] Scampi are prawn-like crustaceans, but are more closely related to rock lobster.To some they are metanephrops challengeri.To others they are a delicacy.

[6] In their natural state, scampi live at depths of about 400 metres in the sea off the New Zealand coast.They can be caught by pot or trawl.Fishing for scampi is lucrative.Much of the scampi fished is exported.

[7] Scampi fishing is divided into ten areas by the Ministry.The map set out in para [4] of Ellis J's judgment shows these areas, and they do not need any further description.

The legislation

[8] Ellis J's explanation of the relevant legislation is extensive and complete.(See paras [70] to [102]).It is unnecessary to do more in this judgment than reiterate the salient features of that legislation.

[9] The major commercial fish species in New Zealand were placed under the Quota Management System (QMS) in October 1986 pursuant to the Fisheries Amendment Act 1986. Scampi, however,is one of a number of species which is currently managed outside the QMS. Instead of fishing entitlements to scampi being governed by Individual Transferable Quota (ITQ), fishers wishing to fish for scampi were required to apply to the Ministry of Fisheries (the Ministry) for fishing permits.

[10] Prior to 1990, and notwithstanding misgivings by the Director of Operations that the policy of imposing extensive conditions on permits to control the taking of ITQ species was legally indefensible, the Ministry issued permits under ss 63 and 64 of the Fisheries Act 1983.In 1990, scampi were included in a notice in the Gazette as a species subject to a moratorium under s 65 of the Fisheries Act 1983. Thereafter, existing permit holders had the opportunity to obtain authority to fish under s 65(2). The moratorium under s 65 expired in September 1991. A prohibition on taking scampi was then imposed by area specific commercial fishing regulations made pursuant to s 89 (d) and (g) of the 1983 Act. The Regulations provided that scampi was a prohibited species for which specific authorisation was required before the fish could be lawfully taken. Fishing was governed by the issuing of permits under s 63, with conditions on fishing being imposed under s 63(4).

[11] From 1 October 1999, fishing for scampi was authorised under the 1999 Regulations.The Minister set catch limits and commercial catch limits for scampi under s 11 of the Fisheries Act 1996 and the Chief Executive allocated Individual Catch Entitlements (ICE) for scampi by notice in the Gazette. Permits continued to be issued under s 63 of the 1983 Act.

The history and background to the proceeding

[12] The history and essential facts have also been most comprehensively set out by Ellis J in his judgment.(See paras [9] to [59]).Much of the background to this proceeding is also set out in the extracts from the appellants' submissions reproduced in Ellis J's judgment.(Paras [62] to [67]).Again, no more is necessary than a brief resume of the history and background facts, sufficient to provide a basis for the discussion to follow.

[13] The scampi catch commenced in 1986. In the early period, the scampi fishery was an "open fishery" in which permits were issued to all applicants. No restrictions were in place on the volume of the catch, although catching methods were scrutinised closely. In 1990, however, the Ministry noted that although it considered the development of the scampi fishery was still at an exploratory stage, there had been increasing interest in the fishery over the previous four years.Pressure to develop the fishery led to fears of over-exploitation if management action was not taken.

[14] On 11 July 1990, the Ministry's Central Office sent a notice to fishers. It related to the management strategy in Quota Management Areas (QMAs) 2, 7 and 8 for the rest of the 1989/1990 fishing year and the 1990/1991 fishing year. (8/1811).The notice conveyed the Ministry's concerns about the effects of the small net mesh used in scampi fishing and indicated a need to gather information on the fishery and the effects of the fishing. The Ministry indicated that the it was intended to issue a limited number of additional permits for the 1990/1991 fishing year.It was stated that:

Special permits issued for scampi fishing in QMAs 2, 7 and 8 will be for the express purpose of conducting investigative research. There is no automatic right of renewal. Furthermore, special permits confer no right in priority to the fishery and cannot be used to establish catch history.

[15] A different approach was adopted in the Auckland Office where commercial permits were issued for all QMAs, including QMAs 2, 7 and 8.Special permits were only issued in order to authorise the use of a smaller mesh size. The special permits issued by both the Auckland and Central offices, however, contained the clause stating that such permits conferred no right to priority and could not be used to establish a catch history.These were in the same vein as conditions on the early permits, such as that issued to Simunovich on 21 December 1987 which stated:

19.The taking of any fish while fishing under this permit shall not entitle the holder to any advantage or privilege with respect to any of the species taken.

[16] On 6 August 1990, the Acting Regional Manager of the Central Region wrote to fishers about the 1990/91 fishing year inviting reapplication for special permits:

A limited number of scampi special permits will be issued for QMAs 2, 7 & 8. Special permit applications will be assessed on their ability to provide the information required for the future management of the scampi fishery... MAF Fisheries is particularly interested in research proposals that will provide information on the use of trawl nets designed to minimise by-catches when target fishing for scampi.

[17] Barine Developments Limited (Barine) was one of the fishers who responded and applied for permits for the 1990/91 fishing year.In a letter dated 21 August 1990, Barine set out its plans to explore the fishery and to provide the information concerning the fishery which the Ministry had requested.Further information then sent to Barine and other applicants for permits by the Ministry on 23 August 1990 reiterated that special permits carried no right of renewal and conferred no right of future access to the fishery. Fishing under special permits would not establish catch histories.

[18] By further notification on 31 August 1990, the Central Region set out its policy for all fisheries for the 1990/1991 year.It was again explained that the impact of scampi fishing on juveniles and by-catch fisheries required investigation before any medium to long term management decisions could be made.

[19] A moratorium on scampi fishing imposed on 27 September by notice in the Gazette was the next development.It came into effect from 1 October 1990, the start of the 1990/91 fishing year. Thereafter, existing permit holders, some 15 fishers, had the opportunity to obtain authority to fish under s 65(2).

[20] Formal communication from the Ministry to fishers about the policy for the fishery was given by letter dated 22 April 1991. The letter stated that the Ministry had been reviewing its policy relating to permits because of the need to take urgent measures to limit fishing effort.Scampi stocks could collapse. It set out the criteria on which exemptions from the moratorium had been, or would be, granted. The fishers claim that the implementation of a moratorium was seen by them to be consistent with the Ministry's expressed concerns about the experimental and exploratory nature of the fishery and the sustainability issues for scampi and other species arising from the small mesh size of the nets used.

[21] The fishers were unaware at the time that the moratorium on scampi fishing under s 65 had been strongly advocated by Simunovich Fisheries Limited (Simunovich). In communications to the Ministry, Simunovich urged that the entry of new scampi fishers risked over-exploitation of the resource, and it claimed that Simunovich had the capacity to catch the entire resource. Simunovich has been allocated 528 tonnes, over 60 per cent of the 866 tonnes of ICE allocated in the fishery.

[22] Those fishers who had applied for permits and who had not been granted a permit, however, and those with permits who had not fished, were separately considered by the Ministry. Eventually criteria were set and three further fishers were allowed.

[23] One fisher disadvantaged by decisions concerning exemptions from the moratorium was Mr Howell (now the Official Assignee). Mr Howell held permits under ss 63 and 64 to fish for scampi in all areas for the 1990/1991 season. The permit under s 63 was revoked on 31 May 1990 when the permit under s 64 expired. The permits were reissued on the same day but did not include scampi. Then, the permits were reissued on 24 July 1990 for twelve months and included scampi.

[24] Mr Howelltherefore commenced fishing for scampi in March 1991 and on 11 March caught 20.7 kilograms of scampi. On 21 March, however, he was stopped by a Fisheries Officer who claimed that his permit did not include scampi. When he applied on 28 September 1991 for a renewal of his permit under s 63, it was issued without scampi and he was, despite protest, unable to fish for scampi. Consequently, when the Ministry decided on the criteria for exemption from the moratorium in April 1991, Mr Howell was excluded on the grounds that he had not exhibited the requisite commitment to or dependence on the fishery. While the Ministry eventually acknowledged that it had made a mistake and issued a permit, the permit applied only for the last few days of the season. The Ministry's handling of the matter had resulted in Mr Howell being unable to fish during 1990/1991.

[25] The 22 April letter from the Ministry to fishers about the policy for the fishery also stated that only existing vessels could remain in the fishery. Different vessels could be added to the permits only if the permit holder could prove that there would be no increased effort in the fishery.

[26] A few days before receiving this letter, on 18 April, Barine had applied to bring more vessels into the fishery. It explained that it needed more vessels to discover and develop the extent of the fishery and that larger vessels were needed for the research and exploration of the scampi resource. This information was consistent with the Ministry's advice that the fishery was in an experimental and exploratory phase.

[27] The Ministry responded by letter dated 16 May 1991.It indicated that it was "concerned at the rapid expansion of effort into this fishery and accordingly [had] recently approved criteria to place immediate management measures to control such expansion of effort."It stated that the Ministry was not in a position to determine the sustainable yield for the fishery and was unable to give approval in principle to Barine's proposal. It asked for details of the proposed individual vessels and fishing plans, but reiterated that it was unlikely that any proposal to expand effort in the fishery would be approved.Barine's understanding was that this was tantamount to a refusal to allow the extra vessels and that it was therefore prevented from pursuing that course.

[28] At the end of June 1991, Barine decided to take its vessel, the Bilyara, to Australia for the northern prawn fishery season.It did so.The Bilyara stayed in Australian water's until February 1992 when it returned to New Zealand. It has remained in New Zealand fishing waters ever since. Mr Penwarden, for Barine, explained in his affidavit of 6 October 1998 that when Barine made its decision to fish in Australia for a season, it was relying on the Ministry's representations that the scampi fishery was still in an experimental and exploratory phase, and that catch taken in this phase would not count for catch history.

[29] The absence of the Bilyara meant that Barine missed the last three months of the 1990/91 fishing year and the first four months of the 1991/1992 fishing year. The significance of this is that catches in the 1990/91 fishing year have been used to set ICE for QMAs 1 and 2, and catches in the 1991/92 fishing year have been used to set ICE for QMAs 4 and 6A. The absence of Barine's only vessel for some time in each of those periods had a significant effect on its catch history and the ICE allocated to it. Barine argues that at no point has the Ministry in making its allocation decisions taken into accountthe absence of the Bilyara or the effect of Barine's reliance on the Ministry's statements.

[30] On the same day as Barine's application to introduce further vessels was declined, Simunovich wrote to the Ministry seeking approval for an additional vessel. This vessel was to be much longer than the existing scampi vessels. Simunovich claimed that a larger vessel could be used more safely in the more difficult southern oceans.The company offered to fish with only six of its seven vessels at any one time and not to fish QMAs 1 and 2 with the new vessel. The Ministry approved this request in principle on 7 June 1991, subject to various conditions, one of which was that Simunovich would have no more than five vessels fishing at any one time. Simunovich was advised accordingly.

[31] The Ministry reviewed its management of scampi for the 1991/92 year from August to November, 1991. The moratorium was due to expire in September. The Ministry decided to control the fishery by regulation under s 89(d) and (g). A series of regulations were therefore passed amending the 1986 Regulations. A Ministry report dated 30 August 1991 sets out four options for the management of the fishery.The preferred option was the introduction of an individual quota system in the developed QMAs 1 and 2 and a competitive catch level in the other non-developed areas.The Minister decided on 26 September, however, that permits should be issued for competitive fishing in all areas with Total Allowable Catch (TAC) in QMA 1 of 100 tonnes and in QMA 2 of 200 tonnes per annum. Fishers were advised of this decision on 30 September.But the Minister immediately changed his mind. A letter was sent to fishers which advised that the decisions were being reconsidered in the light of concerns about the viability of continuing a sustainable fishery in New Zealand. Permits would not be issued until the review was completed.

[32] A meeting between the Ministry and the fishers was held on 2 October to discuss the management of the fishery. At the meeting, the possibility of limiting catch limits on permits in relation to catch history was raised by Mr Wilkinson of Simunovich.Other fishers strenuously objected, saying that a catch history basis was unfair having regard to the history of the fishery.

[33] One of the fishers which considered itself particularly disadvantaged by this proposal was Vautier. It had originally applied to fish for scampi on 7 March 1990 but had not been issued with a permit until 10 May 1991. This permit did not include QMA 1. After refitting a boat, which it had not been able to undertake while its permit was uncertain, Vautier was left with three months fishing only.It caught 12.788 tonnes of scampi in QMA2.

[34] Sealord was in a different position from other fishers in that it had not undertaken any scampi fishing. Although it was one of the first applicants for a permit to fish for scampi in January 1990, it was not granted a permit for over a year. This delay was due to the fact that, while the Northern Region granted permit applications immediately, the Central Region did not do so and Sealord had applied to that Region. Hence the delay was not due to any act or omission on the company's part.

[35] On 9 May 1990, the Ministry wrote to Sealord saying that its application was on hold because the Ministry was studying the effects of targeting scampi. When the moratorium under s 65 was introduced, Sealord had still not been issued with a permit. While existing fishers continued to have access to the fishery, the Ministry deliberated about who else should be exempted from the moratorium. Finally, on 22 April 1991, the Ministry indicated that Sealord would be exempted from the moratorium.The difficulty for Sealord at that point was that it had been unable to commit itself to obtaining a vessel for scampi fishing prior to an exemption for scampi fishing being notified. The permit eventually issued to Sealord in June 1991 excluded Sealord from QMAs 1 and 2, the fisheries closest to the coast, allowing it to fish only in areas requiring larger vessels.

[36] The proposed total catch limits for the remaining QMAs of 25 tonnes each for six months meant that there was insufficient TAC to justify investment in a scampi vessel. While these catch limits were increased to 60 tonnes in October, with effect from December, there was not enough time for Sealord to acquire a vessel and begin fishing. Further decisions continued to prevent Sealord's entry into the fishery.In 1992 Sealord applied to transfer a permit from Fifeshire Fishing, which it owned, to a larger vessel that it wished to lease. The Ministry refused, saying that Sealord would have to own any vessel it used in the fishery.The company therefore had no catch history on which an individual allocation could be made.Its permit was eventually revoked in February 1993 under s 63(13) on the basis that it had not caught any scampi.

[37] On 15 November 1991, despite protest by the fishers, the Director General agreed to the Ministry's proposals to allocate individual catch limits for scampi fishers in QMAs 1 and 2 for a six month period based on catch history in the 1990/91 fishing year.The fishers were advised of the proposed allocation on 25 November.Comments were invited. The letter explained that the catch limit was to be imposed as a condition of a permit under s 63(4) of the 1983 Act. The letter also stated that, although individual catch limits were to be different among permit holders, the Director General was satisfied that the requirements of s 63(9) were met.The mechanism used to allocate the catch limits was the same in each case.

[38] A group of scampi fishers had formed an alliance called the Independent Scampi Group (ISG).It objected to the proposals by letter dated 2 December 1991.The ISG questioned the legality, reasonableness and fairness of the decisions made by the Ministry. Their submissions raised a number of points. Among these points were the unfairness of using the 1990-91 fishing year as the year for setting individual catch limits, since only Simunovich had a full years fishing in that period; the setting of different limits for different fishers; the unreasonableness of setting controls that favoured one fisher over others; the unreasonableness of setting individual catch limits when the fishery was still experimental; and the unlawfulness of using s 63(4) as a management tool.

[39] The alleged unfairness of the decision was embittered because the allocations were in QMAs 1 and 2, which were, and still are, seen by fishers as the best and most cost effective fishing areas.They are proximate to shore and enjoy more cordial weather conditions. Barine also sent a separate objection referring to the absence of the Bilyara and describing the effect this had on the proposed allocations. It referred to the fact that the company had, in the interests of conserving the fishery, been avoiding taking scampi below a certain size and had a lower catch history as a consequence.

[40] Despite these protests, the Ministry proceeded with the allocations based on catch history, over a period of one year only, as proposed on 6 December 1991.On 9 December 1991, the fishers were advised that their permits would be amended to contain ICEs for the first time. The catch limits were to be for the period 1 October 1991 until 31 March 1992.The Ministry restated that catch history would not result in quota. There was continuing dialogue between the Ministry and the fishers and on 25 March 1992, the Ministry notified fishers of the conditions attaching to permits for the second half of the fishing year, from 1 April to 30 September 1992.ICE remained for QMAs 1 and 2 and competitive fishing for QMAs 3 to 9.

[41] Simunovich's new larger vessel, the Petersen, arrived in the scampi fishery in the same month as the ICE allocations were confirmed. Its arrival provoked hostility from other scampi fishers. The fishers were of the opinion that the Petersen increased Simunovich's fishing effort in the fishery at a time when MAF's stated purpose was to restrict catch effort.

[42] On 9 December 1991, the ISG's solicitors wrote to the Ministry complaining about the entry of the Petersen. The Ministry replied that the new vessel was replacing another Simunovich vessel which was permitted to take scampi and said that "MAF Fisheries role is in the management and conservation of fisheries, not the commercial position of individuals or companies." The Ministry also informed the fishers that any other fisher who wished to transfer effort from QMAs 1 and 2 to QMAs 3 to 9 could apply and the Ministry would look at their proposal. Because the amount of scampi to be caught in QMAs 1 and 2 was fixed, however, the number of vessels used to catch the entitlement was irrelevant. Other fishers therefore viewed the entry of the Petersen as constituting a significant increase in effort in the fishery.

[43] Another meeting between the Ministry and the fishers was held on 24 July 1992 to discuss the 1992/1993 fishing year.At that meeting, the possibility of allocations in QMAs 3 to 9 was raised. The Ministry had stated, in a letter to the ISG on 17 December, that catch history in QMAs 3 to 9 would confer no future right or expectation of access to the fishery and no guarantee as to the level of any future allocation should individual catch limits be imposed in those areas. The ISG responded to the proposal in a letter dated 10 August 1992 recommending that equal allocations per active permit holder be made rather than allocations on the basis of catch history.

[44] A decision paper recommending allocations in QMAs 4 and 6A on the basis of the catch history in the 1991/1992 fishing year was approved by the Director General. On 25 September 1992, the Ministry advised the fishers of proposed catch limits in QMAs 4 and 6.The letters stated:

As you are aware with regard to allocations, the Director-General has decided that catch history is the most appropriate mechanism for individual allocations in the developed areas of the scampi fishery.

[45] This decision led to litigation in the High Court. In Petromont Holdings Ltd v Director-General of Agriculture & Fisheries (Auckland Registry M986/93, unreported 7 September 1993), Petromont Holdings Ltd claimed that the ICE allocated in QMAs 1, 2, 4, and 6A resulted in a manifest disparity in the conditions imposed on the various permits.Anderson J determined that the ICE allocations were unlawful for failing to comply with s 63(9) in providing substantially the same conditions on permits for the same area and same class of fish. In addition, the learned Judge indicated that the argument s 63 should not be utilised to make such allocations at all could well be correct, although he made no finding on that issue. This decision was not appealed.

[46] Following this decision, instead of reconsidering the legality and fairness of its prior decisions, the Ministry "remade" exactly the same allocations. Identical ICE conditions were substituted for those which had been revoked, but the Ministry sought to justify them on a different basis. The Director General informed fishers that, in terms of s 63(9), he considered it reasonable to impose a condition giving different quota to each fisher "having considered various options in regard to the management of the fishery." Grounds for the decision were duly provided.

[47] The conditions placed on all subsequent permits have substantially repeated the decisions made in 1991 to 1994.The same catch limits have been imposed as conditions.Fishers remained of the opinion that there is no good reason why conditions as to catch limits should be different for each permit holder. Their concern about the allocations was exacerbated by the fact that QMA areas 1, 2, 4 and 6A, the areas subject to ICE, are the largest of the scampi fisheries making up 91 per cent of the total scampi catch. The other areas, although subject to competitive catch limits, are relatively minor.

[48] One further consideration is that the Ministry refused to set ICE in QMAs 3 and 6B. It is asserted by Messrs Deadman and Lees that they had an expectation that these areas would be allocated on the basis of catch history in the first year that they were fully fished to their catch limit, which was 1992/1993, in accordance with the policy that had been followed in QMAs 1, 2, 4 and 6A.But this was not done.

[49] On 1 October 1996, the Fisheries Act 1996 came into effect. Under the Act, s 329 validated decisions made in respect of fishing permits prior to 1 October 1996, but provided a limited right of review of decisions made between 1 October 1992 and 1 October 1996. The Ministry's perception was that the intent of the section was to ensure that eligibility for individual transferable quota under the QMS was not relitigated after provisional ITQ had been allocated.Permit holders were also provided with an opportunity to have decisions reviewed, the provision reflecting an effort to avoid unfairness.In 1996, Barine, Sealord, Howell, Vautier and Deadman and Lees sought reviews under s 329 of the decisions which had been made. Reviews were also subsequently initiated under s 63(11) of the 1983 Act. Sealord commenced a review in 1997.

[50] In October 1997, the Minister published a notice in the Gazette introducing scampi into the QMS from 1 October 1998. The fishers were concerned that introducing scampi into the QMS would deprive them of remedies which might be available to them as part of the review procedure. Accordingly, the fishers commenced proceedings for judicial review.

[51] During the course of the proceedings in the High Court, the Ministry, no doubt recognising the risk that the Court would hold that its use of s 63 was unlawful, proposed passing regulations under which the Chief Executive could make the scampi allocations.Such regulations would authorise the Chief Executive to allocate ICE by notice in the Gazette. The fishers viewed the proposal as an attempt to defeat their proceeding and objected to this course.The Ministry, nevertheless, proceeded to make the regulations, and the 1999 Regulations were promulgated on 2 February 1999.

[52] A decision paper concerning the allocation of ICE for scampi was prepared by the Manager of Operational Policy and approved (with amendments not presently relevant) by the Chief Executive on 29 September 1999.This paper does not essay an analysis of the reasonableness and fairness of the prior allocation decisions.Under the heading of QMA1, the paper records:

Within the time available to prepare this advice Mfish has not been in a position to assess the merits of individual permit holders claims for alternative allocations.These are subject to judicial and permit reviews. Mfish considers that any adjustment to individual catch entitlement allocations required at the completion of these reviews can be made at that time.Mfish considers that existing allocations can and should be amended if appropriate whether set by permit condition or Gazette notice.However Mfish considers that there would need to be an obvious and compelling basis for any change.

[53] Unbeknown to the fishers the Ministry had been advised that legislation should be passed to revoke the Gazette notice published in October 1997 "in order to properly manage the Crown's litigation risk."Legislation was passed revoking the Gazette notice bringing scampi into the QMS in September 1999. Catch limits were then set for all QMAs, and ICE was allocated under the 1999 Regulations on 29 September 1999 for the 1999/2000 year.

The judgment in the High Court

[54] Before Ellis J, the appellants contended that the decisions made by the Ministry were unlawful, unreasonable and unfair. The allocations under the 1999 Regulations were based on allocations made by permit.Those allocations were based on the fishers' catch history during a particular period. The replication of conditions on the permits proceeded on the basis that those allocations were lawful and fair.But, the appellants contended, they were not lawful or fair. They alleged that the conditions were made in order to avoid allocating scampi under the QMS or by regulations, either of which would have required the fairness of the allocations to be addressed.They did not comply with the statutory presumption of equality of conditions in s 63(9) and did not take into account the particular circumstances existing in relation to each of the fishers.

[55] The Crown and the other fishers took issue with the appellants' claims and raised a positive defence based on the effect of s 329 of the Fisheries Act 1996. They argued against the appellants' interpretation of the Act and Regulations and claimed that granting the relief sought by them would not be practical. Simunovich claimed by way of counterclaim that, if the appellants were successful, a competitive regime should be established in the fishery and it should then be introduced to the QMS.

[56] The Court focussed on the issue of permits to scampi fishers.Ellis J held that, while permits under ss 63(4) and (9) can "define the area to be fished, the quantity to be taken, the species, the vessels and equipment to be used or not used" in any fishery, the conditions on permits must be substantially the same unless the Director General is satisfied, on stated grounds, that different conditions are reasonable.Anderson J held in Petromont that catch limit conditions must comply with s 63(9).

[57] The judgment then examined s 63 in the context of controlling and managing a fishery under pressure.Ellis J concluded that s 63(9) is important because it expressly recognises the need for transparent and reasonable decisions when fishers are to be treated differently. He held that the concept of fairness is inherent in reasonableness.The allocations of ICE by imposing conditions on permits could therefore be reviewed.

[58] Ellis J also observed that the regulating power in s 89(1)(g) is very specific as to quota, and that the regulating power in that section must colour the operation of s 63. Section 63, he held, does not authorise the creation or allocation of quota.Consequently, while the Director General can include in permits quota which has been defined and allocated, he or she cannot determine and allocate quota by the issue of permits alone. While it is possible to issue permits in a developing fishery on the basis of an equal catch per fisher or vessel, permits cannot be used to introduce a quota system

[59] On his reading of the 1983 Act, Ellis J was of the view that until 1 October 1992 the Ministry was wrong to delay the issue of permits to fishers for the purposes of controlling fishing in an open fishery. This delay prevented some fishers from fishing during periods when catch history was being established. Further, when allocating ICE, each fisher had to be treated reasonably and fairly. The Ministry's signals and permit conditions to the effect that fishing in 1989/1990 and later would not go to quota were misleading and resulted in unfairness.

[60] In relation to the refusal to allocate ICE in QMAs 3 and 6B, Ellis J held that, while the decision was reviewable, the areas in question were undeveloped at the relevant time and it was not possible to make fair allocations in those areas. The fishers could therefore have no legitimate expectation of ICE in areas 3 and 6B.

[61] The learned Judge then discussed the effect of s 329 of the 1996 Act. He held that the true effect of the section was to impose a limitation period after reasonable notice to those affected. Notwithstanding the Ministry's submissions to the contrary, he held that s 329 did not save illegal procedures after 1 October 1992.Rather, it gave those who wished to challenge them a limited time to do so.He concluded that the ICE conditions on permits issued between 1 October 1992 and 1 October 1996 were reviewable and illegal, as were the decisions made before the 1999 Regulations.He was precluded from acting on this conclusion, however, because of his findings in relation to those Regulations.

[62] Ellis J said of the 1999 Regulations that they "were tailored to perpetuating the historical allocation of ICE". He held that, in substance, the Regulations delegated an administrativepower, and he dismissed the appellants' argument that the Regulations could be construed as a subdelegation of the whole power.Consequently, he found it "...impossible to hold the Regulation was ultra vires, however objectionable it may be in the light of historical complaints...".He concluded that the 1999 Regulations were not ultra vires, so that they, and the decision as to the 1999/00 allocations "carry the day". The Crown, he stated, had been savedby legislation "tailored to put their decisions beyond the reach of the Courts".

[63] With respect to the learned Judge, I do not agree.I am of the firm view that the 1999 Regulations are ultra vires, and that the allocations made by the Chief Executive under those Regulations are therefore invalid.This being the case, it will not be necessary to review the other conclusions reached by the learned Judge.

The Ministry's management of scampi

[64] At the conclusion of his judgment when dealing with the question of costs, Ellis J observed that the litigation had been brought "against a background of mismanagement which resulted in some fishers being treated unfairly".He had heard the evidence of a number of witnesses and arguments from counsel in the course of the trial which lasted 18 days.His opinion was undoubtedly well-considered.

[65] Even without the advantage of a trial, it is readily apparent that the Ministry's management of the scampi fishing allocations is open to criticism of mismanagement.One accepts that the Ministry's officers are conscientious, well-intentioned and carry out their duties in good faith.But the respects in which sound administration would seem to have been lacking is troubling, more particularly as sound administration is the bedrock of fair and reasonable treatment for those citizens affected by that administration.

[66] No excursion into the various respects in which the Ministry's management is questionable are required in this judgment.Suffice it to say that the Ministry has seemingly moved from one regime to another in a manner which has caused considerable confusion; policies have been announced but have been revoked or then changed without due consultation or notice; other policies have been applied inconsistently as between competing fishers; advice to fishers has not been given even-handedly and the treatment of fishers has been unequal; assurances have been given which have not been kept and statements have been made which have been misleading; different systems have operated in different regional offices; needless mistakes have been made in processing and granting fishing permits; and delays, at times inordinate and particular to a region or fisher, have occurred.The Ministry appears to have been all too ready to build on errors and injustices committed in preceding years and to rely on changing the legislation or adopting a new regime to overcome the problems caused by the earlier mismanagement.Its focus may, perhaps, have been directed to reducing "litigation risk" at the expense of sound administration. The impression created is that much of this alleged mismanagement could have been avoided if, instead of defending questionable past decisions and focusing on legalities and "litigation risk" management, the Ministry's officers had, when making decisions, simply asked the straight-forward question; "Is this reasonable and fair?"

[67] It is possible that the Ministry is under the impression that it is not obliged to act fairly in administering the various provisions of the Act.Ms Duffy, who appeared for the Ministry and the Chief Executive, submitted that the Ministry was not under a duty to act "fairly" in determining fishers' access to fisheries.Substantive fairness is not required.It is sufficient, she argued, if the decisions are reasonable and comply with the requirements of procedural fairness.

[68] I emphatically reject this submission.There is nothing in the Act to suggest that the established common law duty imposed on administrators to act legally, rationally and fairly is excluded in the operation of the Act.To the contrary, there is much in the Act to suggest that Parliament intended the Ministry to be fair and even-handed in its treatment of fishers.Having regard to the extensive property rights and other valuable interests involved, it would be surprising if Parliament's intention had been otherwise.

[69] But the submission is also wrong in principle.The whole purpose of the courts' insistence on procedural fairness on the part of public bodies and administrators is to seek to ensure that the decisions which they make will be substantively fair.Of course, the courts will not substitute their own opinion for the opinion of the decision-makers as to what is substantively fair.The courts' reticence in this regard is well-established and regularly repeated.But that does not mean that the administrators are not under a duty to act fairly in carrying out their statutory powers and duties.It simply means that administrators have a wide margin within which their substantive decisions will not be questioned by the courts.The Ministry is therefore to be disabused of any attitude which might reflect this submission and suggest that its officers are free to act other than even-handedly and fairly as between fishers.

[70] Nor, of course, is this to say that the Court is not fully aware of the difficulties faced by the Ministry and will not make due allowance for those difficulties.The Ministry is required to deal with fishers relentlessly pursuing their own commercial interests.As Ellis J observed, the fishing industry is a very robust industry managed by astute and even opportunistic fishers.More often than not, the pressure they bring to bear, both as individual fishers and as a group, must make the Ministry's task of implementing the objective of the legislation to achieve the optimum utilisation of fisheries while ensuring their sustainability a formidable task. Having noted that the obvious current running through the legislation that fishers are to receive even-handed treatment and that the allocation of valuable rights is to be transparent, fair and reasonable, Ellis J was quick to add, therefore, that this statement was not to be treated as a counsel of perfection.I agree.The statement is a formulation of the legal duty to which the Ministry's officers are subject.It is not an unrealistic expectation of infallibility.

The validity of the Regulations

[71] I turn at once to the issue which Ellis J held "saved" the decisions of the Ministry that were otherwise illegal and unfair.As I have indicated, I do not share the learned Judge's view on this question.

[72] The immediate background may be recapitulated.Initially, the appellants commenced proceedings challenging the lawfulness of the conditions setting the individual catch limits on permits issued under s 63.Before the proceedings had reached trial, however, the 1999 Regulations were promulgated.The Chief Executive, purporting to exercise a discretion under the Regulations, allocated ICE to the fishers under these Regulations.The ICE were identical to the individual catch limits set by the conditions on the permits which were being challenged in the appellants' proceedings.Not unexpectedly, the appellants' amended their pleadings so as to challenge, not only the legality of the individual catch limits, but also the validity of the new Regulations and the allocations of ICE made pursuant to them.

[73] Section 11(4)(a) of the Act provides that the Minister may -

(a) By notice in the Gazette, set or vary the catch limit (including the commercial catch limit) of any stock not within the quota management system.

[74] Pursuant to this provision the Minister, on 23 September 1999, set catch limits and commercial catch limits for each of the scampi QMAs.These limits were intended to apply for each year until amended.

[75] The regulation making power is to be found in s 297 of the Act. Subsection 1(b) provides that the Governor-General may, by Order in Council, make regulations for, inter alia, the following purpose:

Providing for the management and control of commercial fishing for any stock that is not within the quota management system but for which a total catch limit has been set under s 11 of this Act by way of individual catch entitlements, and authorising the chief executive to allocate individual catch entitlements for any such stock by notice in the Gazette.

[76] Regulation 3 of the 1999 Regulations states:

(3) Allocation of individual catch entitlements by Allocation Notice -

The Chief Executive may from time to time, by notice in the Gazette, allocate individual catch entitlements for any stock that is not within the quota management system but for which a total catch limit has been set under s 11 of the Act.

[77] Although counsels' challenge to the validity of the Regulations was made under three discrete headings, it is preferable to deal with the arguments collectively in order to better assess their cumulative weight.

[78] As a first step, the Governor-General is required to specify in the Regulations the stock which is not within the quota management system, but for which a total catch limit has been set under s 11.The Regulations do not accomplish that requirement.Rather, in the course of purporting to authorise the Chief Executive to allocate ICE, the Regulations leave it to the Chief Executive to select the stock which is to be subject to management and control under the Regulations.

[79] Ellis J held that it was enough that "the antecedent notice [under s 11] by the Minister is both stock and area specific".The notice does specify the stock, but it does not cure the statutory defect in that the Governor-General has not, by Order in Council, first selected the stock.The question has been left to the discretion of the Chief Executive.There can be no inference that the decision to set a catch limit for stock under s 11 is tantamount to a decision that it is appropriate to allocate ICE for that stock.The decision under s 11 and the decision whether the stock should be managed and controlled by way of ICE involve the resolution of different questions in accordance with different considerations by different bodies.Although it is most probable that the Governor-General in Council would have specified scampi as a stock to be managed and controlled by ICE, it is important that the question be addressed by that body.There is in that requirement a safeguard which should not be lightly discarded.

[80] My view that the attention of the Governor-General in Council should be insisted upon is confirmed when regard is had to the critical nature to individual fishers of the decision to manage a stock by way of ICE.If a fisher has ICE for a particular stock at the time a notice is published declaring that stock to be subject to the QMS, that ICE determines the quota which will be allocated to the fisher under the QMS.Hence, Ido not think it was sufficient that the Minister's notice in the Gazette was stock specific.The issue should have been addressed by the Governor-General in Council as contemplated by the empowering Act.

[81] Next, the Regulations are short to the point of being cryptic.Under s 297(1)(b) the Regulations must provide for the management and control of commercial fishing for the specified stock and authorise the Chief Executive to allocate ICE for that stock.Yet, there are no rules in the Regulations relating to the management and control of the commercial fishing of scampi by ICE.Nor are there any guidelines as to how the Chief Executive is to exercise the power conferred on him or her to allocate ICE.The management and control is left to be indirectly inferred and the Chief Executive's discretion in allocating the ICE is left open-ended.

[82] It is difficult to accept that, when Parliament enacted s 297(1)(b), it contemplated regulations which would not be more explicit in providing for the management and control of the stock and would not, at least, indicate the criteria which would define and constrain the Chief Executive's discretion in allocating the ICE.The rights involved are too valuable and the allocations are too far-reaching in their effect for this Court to safely assume that silence on these matters would satisfy Parliament's intent.As was forcefully submitted, the Act itself is a most lengthy and comprehensive statute with detailed provisions relating to access to fisheries.The contrast between the detailed legislation and the terse regulations is stark.Parliament cannot be taken to have intended to countenance the wide powers of allocation in issue without at least a skeletal framework as to how the stock is to be managed and controlled and the criteria by which the Chief Executive's discretion is to be exercised.

[83] I therefore consider that the 1999 Regulations are ultra vires.This being the case, the allocations of ICE purportedly made under those Regulations necessarily fail.They are null and void.

The Chief Executive's exercise of his discretion

[84] Having determined that the 1999 Regulations are ultra vires, it is strictly unnecessary to go further and examine the validity of the Chief Executive's exercise of his discretion.As I consider that the Chief Executive failed to exercise his discretion correctly, however, it may be helpful to briefly indicate why that is so.It is to be appreciated, of course, that the Chief Executive was at a disadvantage.His discretion fell to be exercised under Regulations which did not provide any criteria to guide him in deciding upon the basis of the allocations of ICE or making the allocations as between fishers.

[85] There can be no dispute that the Chief Executive is under a duty to exercise his discretion in accordance with the established constraints imposed by administrative law.He must exercise the discretion for the purpose for which it is granted and not for any improper purpose; he must take into account relevant considerations; he must not take into account irrelevant considerations; and he must act fairly and reasonably.Because these requirements overlap, it does not matter greatly what heading argument proceeds under, that is, improper purpose, failure to take into account relevant considerations or vice versa, or acting unreasonably or unfairly.I am content to merely indicate the respects in which I consider the Chief Executive wrongly exercised the broad discretion conferred by the Regulations.

[86] First, the Chief Executive failed to have regard to the individual fisher's circumstances resulting from the Ministry's actions leading up to the determination of their catch history when that catch history is then used as the basis for making the allocations.The complaints of the fishers as to why their catch history did not fairly represent their entitlement to an allocation as set out above could not be so easily set to one side.Their entitlements had been determined or influenced by the acts and omissions of the Ministry, such as, for example, the departure from the policy which the Ministry had continuously represented to fishers; the impact of events which seriously affected the ability of fishers to establish a catch history; and the delay on the part of the Ministry in processing certain applications; and the like.

[87] From 1991 to 1998 the individual catch limits had been "rolled over" year by year as fresh annual permits were issued.Ultimately, of course, those limits were "rolled over" yet again to become the allocations for ICE under the 1999 Regulations.Yet, the High Court had declared the earlier decisions unlawful.This inveterate rolling over of previous decisions did not rectify the fact that the decisions were legally flawed and unfair.I consider that the Chief Executive was therefore obliged to have regard to the fact that the catch history on which he based his allocations had been generated at a time when the appellants contend, not without some substance, that they had been unfairly treated.The unfair treatment had a detrimental effect on the catch history which they could claim.

[88] In broad terms, and this point is the key to these appeals, the Ministry had by its earlier acts and omissions effectively predetermined the appellants' catch history and then fixed fishers with that catch history.

[89] The Ministry seeks to rely upon s 329 of the Act.Section 329 is set out in para [100] of the judgment under appeal.I need not address this submission at length in the present context.Nothing in the wording of s 329 would protect the Chief Executive's allocations under the Regulations from being challenged.The section relates to decisions and purported decisions of the Director General made in respect of the issue, variation, refusal, revocation, or cancellation of any fishing permit made before 1992 and every decision made after that date until 1996.It validates the decisions which were made.It does not restrict the matters which the Chief Executive is obliged to have regard to in exercising his discretion properly.The history of the Ministry's management of the scampi fisheries and the way in which various catch histories were determined or influenced by that management does not simply disappear. That background remains a valid and relevant consideration.

[90] Secondly, the discretion vested in the Chief Executive under the Regulations required him to determine the most appropriate basis for allocating ICE.To discharge his function under the Regulations, he could not feasibly and fairly adopt the catch history basis for making allocations without addressing the alternatives to that system.He could not treat that basis, or a variation of it, as being entrenched.

[91] There can be no complaint about the length and comprehensive nature of the paper prepared for the Chief Executive's consideration.The grievances of the appellants are set out in full.Certain alternatives to the preferred option of basing allocations on catch history (over the limited period of one year) are considered and rejected.But, essentially, these alternatives were modifications of the catch history basis and did not adequately represent the alternatives put forward by the appellants.The decision paper states "within the time available to prepare this advice Mfish has not been in a position to assess the merits of individual permit holder's claims for alternative allocations".Having expressed the view that these alternative allocations are subject to judicial and permit reviews, the Ministry opined that any adjustment to individual catch entitlement allocations required at the completion of these reviews could be made at that time.It considered, however, that "there would need to be an obvious and compelling basis for any change".Elsewhere, again, the Ministry's view is stated to be that "Mfish considers that challenges to the lawfulness of the current allocations in SC14 are issues to be considered in the judicial review proceedings".The Chief Executive had "the opportunity to consider afresh the basis of allocation in SC14" and had indicated an initial view that he saw "no basis for changing the existing policy of allocating individual catch entitlements for scampi on the basis of catch history".

[92] Commenting on his decision at the time the Chief Executive referred to the above paper in relation to a particular area and described the choice of allocation year or years as being complex.He then stated that, while he had received the substantive report on the issues which he had used to make his decision, in view of the report and information in it he "could not in all honesty form a view as to an allocation that was fair and reasonable in the circumstances". "Accordingly," he said, "I decided to maintain the status quo - i.e. no allocation".

[93] I am conscious, of course, that these statements were made in the context of different areas.Nevertheless, they indicate the overall approach which was adopted.No fresh decision as to the appropriate basis for the allocations was made.The individual catch limits were simply "rolled over" as set out above (para [47]), and ultimately became the allocations which the Chief Executive made under the 1999 Regulations.There was no substantive exercise by the Chief Executive of the discretion which he is required to exercise to determine the proper basis for allocations under the Regulations.As a result, the catch history basis became entrenched with all the imperfections of the past.

Matters going to the Court's discretion

[94] Mr Ivory for Simunovich, Amaltal and Sanford submitted that relief should be refused in the exercise of the Court's discretion in the event of this Court reaching the question of relief, and then decide not to refer the case back to the Court below for determination of those matters.Ms Anderson for the Ministry and Chief Executive urged that, if the Court should grant the appeals, "discretionary factors of delay, waiver, acquiescence, estoppel, failure to pursue alternative remedies and prejudice to third parties" should be revisited to the Court of past evidence for determination.

[95] Having regard to the unfortunate history relating to the allocation of scampi fisheries it would be undesirable to remit the proceeding back to the High Court.The sheer range of matters which the Ministry propose to pursue is in itself an indication of an attitude which will prolong the dispute indefinitely and defer the time when the Ministry obtains the opportunity to address the issues in a manner which is lawful, reasonable and fair.Arguments such as these might carry more weight if the ground on which it is held that the appellants are entitled to succeed was some ground other than that the 1999 Regulations are ultra vires.It would be highly inappropriate to leave intact the Chief Executive's allocations when those allocations have been made under invalid Regulations.

[96] In any event, I am not satisfied that any delay on the appellants' part is so critical that they should be denied the advantage of the judgment to which, as a matter of law, they are entitled.The dispute has been protracted and the proceedings correspondingly protracted.But the issues have been complex, and considerable evidence has had to be assembled and produced to the Court.The proceeding were further complicated by the decision of the Ministry to promulgate the 1999 Regulations prior to the initial hearing in the High Court. While the appellants may not be beyond criticism, their conduct of the proceeding, including the timing of the proceeding in the first place, is not of such an order as to warrant the Court declining them relief.

[97] The Court is, of course, acutely conscious that certain fishers have acquired vested interests and that these interests will be disturbed.I can see no escape from this consequence.Simunovich, in particular, has benefited from the Ministry's regime.As in the case of the Judge below, I do not suggest that the relative advantage which this company has achieved indicates any impropriety.But the fact remains that the benefits obtained by Simunovich, Amaltal and Sealord have been obtained at a time when the appellants have been able to demonstrate that the Ministry's decisions were unlawful and unfair to them.

[98] Inote that the Regulations Review Committee's Report relating to the 1999 Regulations records that, in oral evidence, the Ministry had acknowledged to the Committee that, if the Court set aside the quota allocations, the Ministry would have to start with a "clean slate".It is not for the Court to express an opinion on that point.It is for the Ministry to determine what course it will follow.I fully appreciate the difficulties which the Ministry face in allocating access to scampi and its desire, within the framework of ensuring sustainability, to favour that or those commercial enterprises which it considers will best exploit the fishery in the national interest.But these difficulties can be met and the Ministry's objective achieved by means which are not unlawful, unreasonable or unfair.

[99] The Court is also acutely conscious that a decision holding that the 1999 Regulations are invalid will leave a hiatus in the management of the scampi fishery.Consideration has been given to deferring the date on which the Regulations will become invalid to avoid this interregnum.But it has to be accepted that this course would not be appropriate.Invalid regulations cannot be kept in force by judicial edict.

The Court's decision

[100] All members of the Court are in agreement that the appeals should succeed.The appeals lodged by each appellant are therefore allowed.The Fisheries (Allocation of Individual Catch Entitlement) Regulations 1999, to the extent indicated in this judgment, are declared invalid.The allocations made by the Chief Executive pursuant to those Regulations are also declared invalid and of no effect.

[101] The order, or decision, of Ellis J on costs in the High Court is set aside.The appellants are entitled to costs in the High Court.They, or any of them, may apply to that Court to fix the costs and disbursements payable in that Court as if the appellants had succeeded in that Court.

[102] Costs in this Court are awarded to the appellants against the Ministry as follows:

Barine Developments Ltd$12,500.00

Vautier Shelf Company No. 14 Ltd $12,500.00

Brian Sydney Deadman$9,000.00

Sealord Group Ltd$9,000.00

The Official Assignee (estate of

W H Howell)$7,500.00

Second counsel are certified for Barine and Vautier.Disbursements, including travelling and accommodation expenses, are payable by the Ministry, which, failing agreement, are to be fixed by the Registrar.

KEITH AND McGRATH JJ (DELIVERED BY McGRATH J)

[103] We agree with Thomas J that the Fisheries (Allocation of Individual Catch Entitlement) Regulations 1999 are invalid.We would confine ourselves to that ground as the sole basis for allowing the appeal.The actions of the chief executive in allocating individual catch entitlement were taken under the authority of those regulations in the belief that reg 3 empowered the chief executive to make allocations strictly in accordance with catch history, without regard to individual fishers' circumstances.Given that the regulations are invalid it must follow that the allocations based on them are invalid.The regulations fail, in essence, for the reasons reflected in the arguments advanced by Ms Jurgeleit on behalf of Barine and Sealord.Those submissions were adopted by counsel for other appellants.

[104] The starting point in the process is s11(4)(a) in the Fisheries Act 1996 which provides:

(4)The Minister may, -

(a)By notice in the Gazette, set or vary the catch limit (including the

commercial catch limit) for any stock not within the quota

management system:

The regulation making power under the 1996 Act is:

297.General regulations-(1) The Governor-General may from time to time, by Order in Council, make regulations for all or any of the following purposes:

...

(b)Providing for the management and control of commercial fishing for any stock that is not within the quota management system but for which a total catch limit has been set under section 11 of this Act by way of individual catch entitlements, and authorising the chief executive to allocate individual catch entitlements for any such stock by notice in the Gazette:

[105] Regulations made under s297(1)(b), on its terms, may only be made in respect of a stock for which a catch limit has first been set by way of individual catch entitlements under s11.The Minister's action in setting that catch limit for the stock concerned is accordingly a necessary discrete initial step that must be taken at Ministerial level.The two following steps are the making of the regulations and the allocation of individual catch entitlement for the stock pursuant to the regulations.

[106] As Thomas J says regulations made under s297(1)(b) must address a specific stock for which a Ministerial catch limit has already been set and must also provide for "management and control" of commercial fishing for that stock. The latter element indicates that principles guiding or rules controlling the allocation of individual catch entitlements, which is done by the chief executive, will be stipulated in the regulations and accordingly that those principles will be determined at the level of the Cabinet.The Act does not envisage they will be decided by the chief executive.

[107] However reg 3 of the 1999 regulations provides:

3.Allocation of individual catch entitlement by allocation notice-The chief executive may from time to time, by notice in the Gazette, allocate individual catch entitlements for any stock that is not within the quota management system but for which a total catch limit has been set under section 11 of the Act.

[108] This regulation does not relate to a stock that had been earlier gazetted.The effect of the regulation is rather to allocate the function of selection of the stock to the chief executive, rather than to the Minister.It also leaves the chief executive with an open ended discretion as to the basis of allocation of individual catch entitlements.This is emphasised by regs 4 and 5 which provide that individual catch entitlement "may" be based on previous catch history and that different quantities of entitlement may be allocated for the same stock.The statute did not envisage that these decisions would be taken entirely at the chief executive level or in the way that reg 3 stipulates.It follows that the Regulations are invalid.

[109] The chief executive allocated individual catch entitlement on the basis that scampi catch history alone would govern the allocations.For reasons largely set out in the report of a senior official he concluded he should not take account of individual circumstances of fishers in dealing with the Ministry even though these might in particular cases be relevant to the ultimate catch history of those fishers.It would have been open to the Cabinet to decide on a policy of allocation that exclusively turned on actual catch history and for the Executive Council to give effect to it in regulations under s279(1)(b) as the basis for "management and control".However had Cabinet made the actual decision it might have preferred a policy taking individual circumstances into account.Under the Act that policy decision must be made at that level.The effect of the setting aside of the Regulations enables the Cabinet to make the determination through the Executive Council when it makes fresh regulations.

[110] There is no need for us to address further the various additional arguments advanced to us in these appeals.In particular the Ministry's management of the process is inextricably tied up with its view of the scope of the chief executive's discretion in allocations under the 1999 regulations and cannot in our view usefully be analysed or commented on outside of that context.

[111] As indicated, we would decide the appeal solely on the narrow basis outlined in this judgment.We agree with the outcome of the appeal and the orders for costs proposed in the judgment of Thomas J.

Solicitors

Anderson Lloyd Caudwell, Dunedin for Official Assignee

Crown Law Office, Wellington for CE Ministry of Fisheries and Minister of Fisheries

Simpson Grierson, Wellington for Vautier Shelf Company

Brandons, Wellington for Barine

T B Horne, Nelson for Sealord

Keam & Associates, Tauranga for Deadman & Lees

Craig Griffin & Lord, Solicitors, Auckland for Simunovich, Sanford & Amaltal