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Hill v Ministry of Fisheries [2006] NZCA 35 (20 March 2006)

Last Updated: 6 April 2006

IN THE COURT OF APPEAL OF NEW ZEALAND

CA152/05

BETWEEN CRAIG RAOUL HILL
Appellant

AND MINISTRY OF FISHERIES
Respondent

Hearing: 9 March 2006

Court: Robertson, Wild and Venning JJ

Counsel: M S Sullivan for Appellant
A M Powell & A M Jones for Respondent

Judgment: 20 March 2006

JUDGMENT OF THE COURT

A The appeal is dismissed.

B Costs of $3,500 are awarded together with usual disbursements.

____________________________________________________________________

REASONS

(Given by Robertson J)

Introduction

[1] On 20 September 2005 this Court granted Craig Raoul Hill leave to appeal the following question of law:

whether or not the holder of a commercial fishing permit suspended under s 107(L)(1) of the Fisheries Act 1983 remains a "commercial fisherman" for the purposes of s 2 of the Fisheries Act 1983 and the prohibition specified in s 67 of the Fisheries Act 1983.

[2] In August 2000, 24 charges under the Fisheries Act 1983 (the Act) and regulations made thereunder, were laid against Mr Hill in the District Court at Christchurch.
[3] The matters eventually came on for hearing in that Court before Judge P A Moran in February 2004. The hearing continued in April 2004. In a reserved decision of 13 September 2004 the Judge found 22 informations proved and convictions were entered.
[4] Following a further hearing on 13 October 2004, Mr Hill was fined a total of $47,500.
[5] Mr Hill appealed against all the convictions and sentences. This was heard before Fogarty J in the High Court at Christchurch. In a reserved judgment of 18 February 2005, he allowed the appeal against conviction in respect of seven counts. Consequently the fines of $500 on each of those counts ceased to apply so Mr Hill was left with 15 convictions on which he had been fined a total of $44,000.
[6] On 21 April 2005, Fogarty J dismissed an application for special leave to appeal to the Court of Appeal, but leave was granted by this Court on 20 September 2005.

Background

[7] Mr Hill made his living as a fisherman. He held just over two tonnes of fishing quota. Over the course of the two fishing years ending in September 2000, he was apprehended selling fish on the black market, principally to fish and chip shops. Seven such charges were proven with sales amounting to almost 9,000 kilograms of fish worth some $55,000. To mask the offending Mr Hill failed to file any quota management returns from February 1999 to December 1999. He was convicted on eleven counts of failing to furnish quota management returns. Mr Hill completed Catch Effort Landing (CEL) returns but did not file them and the CEL returns did not disclose the fish that was sold on the black market. Two charges of failing to furnish CEL returns were proven in the District Court. Mr Hill was also convicted on two counts of taking fish without quota for instances where he took fish after his quota was exhausted.
[8] At various times during the 1999 and 2000 fishing years, Mr Hill had his fishing permit suspended as a result of the non-payment of outstanding levies. The power to suspend a fishing permit arises from s 107L of the Act as it then existed. Section 107L(3) provided:

Every fishing permit or fish receiver’s licence or controlled fishery licence suspended under this section shall cease to have any force or effect during the period of suspension. (emphasis added)

[9] Section 67 of the Act forbids a commercial fisherman from selling fish to anyone other than a licensed person. Commercial Fisherman is defined in s 2 as:

Any person who has a fishing permit issued under s 63 of this Act entitling the person to take any species or class of fish, aquatic life or seaweed.

[10] The nub of the argument for the appellant was that, during the times in which his licence was suspended in accordance with s 107L(3), Mr Hill was not a commercial fisherman. Therefore he had not committed the offences with which he was charged although his counsel acknowledged that he may have committed other offences under the Act.

District Court approach

[11] Judge Moran held that, for the purposes of the application of s 67, Mr Hill remained a commercial fisherman even when his permit was suspended. He held that as Mr Hill had been issued with a fishing permit, the fact that it had been suspended from time to time did not mean that it ceased to exist. The lifting of the suspension did not make a new fishing permit, it simply restored the efficacy of the existing permit. When Mr Hill’s permit was suspended Mr Hill was not entitled to take fish although he still had a permit. He had a permit that for the time being did not entitle him to do anything.
[12] The Judge also noted that when a permit was suspended, it continued through the suspension period and did not need to be reissued under s 63. Thus, he held that Mr Hill was still a commercial fisherman for the purposes of the Act.
[13] In support of his reasoning, the Judge drew an analogy to the situation where a commercial fisherman has exhausted his seasons fishing quota. At this point the fisherman had a permit that was no longer efficacious, but the person was still a commercial fisherman.

High Court approach

[14] The appellant repeated his argument that the prosecution had failed to prove an essential element of all the informations before the Court, namely that the appellant was a "commercial fisherman" at the relevant time.
[15] Fogarty J upheld the reasoning of Judge Moran, and agreed that Mr Hill was a commercial fisherman for the purposes of the offending.
[16] In the High Court Mr Sullivan, for the appellant, conceded that it was not Parliament’s intention that Mr Hill should be able to catch and sell fish at a time when he was not a commercial fisherman and escape offending the statute. However, he argued that Mr Hill’s liability under the Act was not as a commercial fisherman. He contended that Mr Hill should have been prosecuted under s 67A(2) for being in possession of fish for the purposes of sale.
[17] Fogarty J noted that s 67 specifically addressed the offending of commercial fishermen and s 67A addressed offending by other persons. However, he observed that nothing in s 67 suggested that the section was limited to offending within the bounds of a fishing permit. A permit was for a particular species of fish and yet plainly Parliament intended to control the disposal of any fish taken by a commercial fisherman whether within the ambit of the species described on the permit or not. Thus the Judge concluded that a commercial fisherman, with a suspended fishing permit, could still come within s 67.
[18] The Judge found that Mr Sullivan’s arguments were literalistic and designed to defeat the purpose of parliament when introducing s 67 into the Act.

The appellant’s case

[19] Before us Mr Sullivan submitted that Mr Hill had been wrongly convicted in the District Court and that the appeal had been wrongly dismissed in the High Court. His contention remained that, under s 2 of the Act, for a person to qualify as a commercial fisherman they must hold a permit which confers an entitlement to fish. He argued that the suspension of a permit meant that a person no longer had an entitlement to fish and, therefore, no longer qualified as a commercial fisherman.

[20] He argued that this necessarily followed from the wording of s 107L(3) which provided that, during suspension, a fishing permit "shall cease to have any force or effect". Mr Sullivan argued this meant that a suspended permit ceased to be operative for all purposes of the Act thereby removing the status of commercial fisherman from the appellant. Mr Sullivan contended that, to be a commercial fisherman, a person must hold an appropriate fishing permit which is valid and in force at the time of fishing. He supported this argument by reference to s 62.
[21] Counsel also referred to s 67A which created an offence for a licenced fish receiver (LFR) to purchase fish from a person who was not a commercial fisherman. He said it would be inappropriate if an LFR, who was aware that a fisherman’s permit had been suspended, could nonetheless legally purchase fish.
[22] Counsel contended that, on its proper construction, s 107L(3) did not invalidate the issue of a permit under s 63 but removed an "entitlement to fish".
[23] By applying the same approach and logic, Mr Sullivan also argued that the prosecution had failed to prove that Mr Hill was a "permit holder" as defined by Regulation 2 of the Fisheries (Reporting) Regulations 1990. Accordingly there was no requirement to furnish CEL returns because he did not "currently hold a permit".
[24] The appellant rejected the label "literalistic" (which was placed on his argument in the High Court) and submitted that in fact it gave proper effect to a clear purpose and intent of s 107L which was to deprive a person of their status as a commercial fisher and to remove all privileges that attached to that status during the period of suspension.

The respondent’s case

[25] Mr Powell, for the Crown, adopted the reasoning of Judge Moran and contended that a suspension did not mean that the holder ceased to be a commercial fisherman or to be a permit holder. He argued that the phrase in s 2 "entitling the person to take any species or class of fish" is descriptive. He relied on s 5 of the Interpretation Act 1999 and submitted that the proper interpretation of ss 2 and 107L(3) needed to have regard to the purpose of the underlying enactment.
[26] The Act originally controlled access to the fishing industry by a pure permit regime. The Fisheries Amendment Act 1986 introduced a quota management system which limited the quantity of fish that could be extracted from any fishery during a fishing season. The integrity of the quota management scheme was dependent on returns, which were checked by reference to other documents completed and filed by various participants in the fishing industry. Commercial fishermen were required to report all fish caught and landed/sold. They were only allowed to sell to LFRs who also were required to report their purchases to the Ministry of Fisheries.
[27] The regime of cost recovery levies was introduced under the Fisheries Amendment Act 1994. It introduced a process whereby commercial fishermen were required to pay management costs incurred in enabling commercial fishing to take place. Section 107L was a coercive provision to encourage compliance with the obligations to pay the levies. Mr Powell submitted that Parliament could not have intended that the coercive regime be rendered ineffective by treating a commercial fishermen, who was for the time being suspended, as not being subject to the statutory controls placed on commercial fishermen (including s 67). He noted also that such an interpretation would undermine the entire quota management scheme as a suspended fisherman would have no obligation to file returns.
[28] The respondent submitted that the appellant’s construction generated anomalies, all of which demonstrated that the purpose and effect of the scheme would be rendered nugatory by such interpretation.

Discussion

[29] We accept that the literal reading contended for by Mr Sullivan is an interpretation which was available, but it is an interpretation which defeats the purpose of the Act, namely the conservation and management of fisheries in New Zealand.
[30] The purpose of s 107L is to suspend a commercial fisherman’s permit where any levies remain unpaid. It is a coercive measure. Parliament intended that the administration of the fishing industry should be financed by individual members of the fishing industry themselves. Section 107L provided a mechanism whereby Parliament could ensure compliance with this user-pays regime.
[31] Given this purpose, the phrase "every fishing permit ... suspended ... shall cease to have any force or effect" (s 107L(3)) can be taken to mean that all privileges attaching to the status of being a commercial fisherman were suspended but not the liabilities. Given the punitive purpose of the section, it would be an absurdity to interpret the section as suspending liabilities, especially those involving the furnishing of reports. The operation of the quota management scheme relies on accurate recording and reporting of number of fish caught and sold. To interpret s 107L as meaning that a suspended permit had no force and effect in relation to the Act as a whole would greatly undermine the operation of the quota management scheme.
[32] When a person’s fishing permit is suspended under s 107L, the person remains a "commercial fisherman" but they are no longer entitled to enjoy the privileges that are associated with this status, that is the ability legally to take fish for commercial use.
[33] Once an outstanding amount is paid, the Director-General is required to lift a suspension (s 107L(4)), nothing further is required. The suspension is a freeze-hold mechanism. It does not interfere with the underlying status or rights.
[34] We are not persuaded that s 62 assists the appellant’s case. Section 62 makes it an offence to fish commercially where a person does not have a permit. This section is aimed at a person who does not have a permit, rather than a person who has had their permit suspended.
[35] Finally, s 67A was properly interpreted by Fogarty J. It addresses offending by people who are not commercial fishermen. We do not accept the argument that this provides a loophole for a LFR to purchase from a suspended commercial fisherman because s 97 makes that an offence.

Conclusion

[36] Accordingly we are satisfied that the interpretation of Judge Moran, upheld by Fogarty J, was correct. The remaining convictions were properly entered. At the relevant times Mr Hill remained a commercial fisherman and accordingly all essential elements of the various charges were established and he was properly convicted.
[37] The appeals are dismissed. The respondent is entitled to costs of $3,500 together with usual disbursements.

Solicitors:
Oceanlaw New Zealand, Nelson, for Appellant
Crown Law Office, Wellington, for Respondent

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[2]	In August 2000, 24 charges under the Fisheries Act 1983 (the Act) and regulations made thereunder, were laid against Mr Hill in the District Court at Christchurch.
[3]	The matters eventually came on for hearing in that Court before Judge P A Moran in February 2004. The hearing continued in April 2004. In a reserved decision of 13 September 2004 the Judge found 22 informations proved and convictions were entered.
[4]	Following a further hearing on 13 October 2004, Mr Hill was fined a total of $47,500.
[5]	Mr Hill appealed against all the convictions and sentences. This was heard before Fogarty J in the High Court at Christchurch. In a reserved judgment of 18 February 2005, he allowed the appeal against conviction in respect of seven counts. Consequently the fines of $500 on each of those counts ceased to apply so Mr Hill was left with 15 convictions on which he had been fined a total of $44,000.
[6]	On 21 April 2005, Fogarty J dismissed an application for special leave to appeal to the Court of Appeal, but leave was granted by this Court on 20 September 2005.

[11]	Judge Moran held that, for the purposes of the application of s 67, Mr Hill remained a commercial fisherman even when his permit was suspended. He held that as Mr Hill had been issued with a fishing permit, the fact that it had been suspended from time to time did not mean that it ceased to exist. The lifting of the suspension did not make a new fishing permit, it simply restored the efficacy of the existing permit. When Mr Hill’s permit was suspended Mr Hill was not entitled to take fish although he still had a permit. He had a permit that for the time being did not entitle him to do anything.
[12]	The Judge also noted that when a permit was suspended, it continued through the suspension period and did not need to be reissued under s 63. Thus, he held that Mr Hill was still a commercial fisherman for the purposes of the Act.
[13]	In support of his reasoning, the Judge drew an analogy to the situation where a commercial fisherman has exhausted his seasons fishing quota. At this point the fisherman had a permit that was no longer efficacious, but the person was still a commercial fisherman.

[14]	The appellant repeated his argument that the prosecution had failed to prove an essential element of all the informations before the Court, namely that the appellant was a "commercial fisherman" at the relevant time.
[15]	Fogarty J upheld the reasoning of Judge Moran, and agreed that Mr Hill was a commercial fisherman for the purposes of the offending.
[16]	In the High Court Mr Sullivan, for the appellant, conceded that it was not Parliament’s intention that Mr Hill should be able to catch and sell fish at a time when he was not a commercial fisherman and escape offending the statute. However, he argued that Mr Hill’s liability under the Act was not as a commercial fisherman. He contended that Mr Hill should have been prosecuted under s 67A(2) for being in possession of fish for the purposes of sale.
[17]	Fogarty J noted that s 67 specifically addressed the offending of commercial fishermen and s 67A addressed offending by other persons. However, he observed that nothing in s 67 suggested that the section was limited to offending within the bounds of a fishing permit. A permit was for a particular species of fish and yet plainly Parliament intended to control the disposal of any fish taken by a commercial fisherman whether within the ambit of the species described on the permit or not. Thus the Judge concluded that a commercial fisherman, with a suspended fishing permit, could still come within s 67.
[18]	The Judge found that Mr Sullivan’s arguments were literalistic and designed to defeat the purpose of parliament when introducing s 67 into the Act.

[20]	He argued that this necessarily followed from the wording of s 107L(3) which provided that, during suspension, a fishing permit "shall cease to have any force or effect". Mr Sullivan argued this meant that a suspended permit ceased to be operative for all purposes of the Act thereby removing the status of commercial fisherman from the appellant. Mr Sullivan contended that, to be a commercial fisherman, a person must hold an appropriate fishing permit which is valid and in force at the time of fishing. He supported this argument by reference to s 62.
[21]	Counsel also referred to s 67A which created an offence for a licenced fish receiver (LFR) to purchase fish from a person who was not a commercial fisherman. He said it would be inappropriate if an LFR, who was aware that a fisherman’s permit had been suspended, could nonetheless legally purchase fish.
[22]	Counsel contended that, on its proper construction, s 107L(3) did not invalidate the issue of a permit under s 63 but removed an "entitlement to fish".
[23]	By applying the same approach and logic, Mr Sullivan also argued that the prosecution had failed to prove that Mr Hill was a "permit holder" as defined by Regulation 2 of the Fisheries (Reporting) Regulations 1990. Accordingly there was no requirement to furnish CEL returns because he did not "currently hold a permit".
[24]	The appellant rejected the label "literalistic" (which was placed on his argument in the High Court) and submitted that in fact it gave proper effect to a clear purpose and intent of s 107L which was to deprive a person of their status as a commercial fisher and to remove all privileges that attached to that status during the period of suspension.

[25]	Mr Powell, for the Crown, adopted the reasoning of Judge Moran and contended that a suspension did not mean that the holder ceased to be a commercial fisherman or to be a permit holder. He argued that the phrase in s 2 "entitling the person to take any species or class of fish" is descriptive. He relied on s 5 of the Interpretation Act 1999 and submitted that the proper interpretation of ss 2 and 107L(3) needed to have regard to the purpose of the underlying enactment.
[26]	The Act originally controlled access to the fishing industry by a pure permit regime. The Fisheries Amendment Act 1986 introduced a quota management system which limited the quantity of fish that could be extracted from any fishery during a fishing season. The integrity of the quota management scheme was dependent on returns, which were checked by reference to other documents completed and filed by various participants in the fishing industry. Commercial fishermen were required to report all fish caught and landed/sold. They were only allowed to sell to LFRs who also were required to report their purchases to the Ministry of Fisheries.
[27]	The regime of cost recovery levies was introduced under the Fisheries Amendment Act 1994. It introduced a process whereby commercial fishermen were required to pay management costs incurred in enabling commercial fishing to take place. Section 107L was a coercive provision to encourage compliance with the obligations to pay the levies. Mr Powell submitted that Parliament could not have intended that the coercive regime be rendered ineffective by treating a commercial fishermen, who was for the time being suspended, as not being subject to the statutory controls placed on commercial fishermen (including s 67). He noted also that such an interpretation would undermine the entire quota management scheme as a suspended fisherman would have no obligation to file returns.
[28]	The respondent submitted that the appellant’s construction generated anomalies, all of which demonstrated that the purpose and effect of the scheme would be rendered nugatory by such interpretation.

[29]	We accept that the literal reading contended for by Mr Sullivan is an interpretation which was available, but it is an interpretation which defeats the purpose of the Act, namely the conservation and management of fisheries in New Zealand.
[30]	The purpose of s 107L is to suspend a commercial fisherman’s permit where any levies remain unpaid. It is a coercive measure. Parliament intended that the administration of the fishing industry should be financed by individual members of the fishing industry themselves. Section 107L provided a mechanism whereby Parliament could ensure compliance with this user-pays regime.
[31]	Given this purpose, the phrase "every fishing permit ... suspended ... shall cease to have any force or effect" (s 107L(3)) can be taken to mean that all privileges attaching to the status of being a commercial fisherman were suspended but not the liabilities. Given the punitive purpose of the section, it would be an absurdity to interpret the section as suspending liabilities, especially those involving the furnishing of reports. The operation of the quota management scheme relies on accurate recording and reporting of number of fish caught and sold. To interpret s 107L as meaning that a suspended permit had no force and effect in relation to the Act as a whole would greatly undermine the operation of the quota management scheme.
[32]	When a person’s fishing permit is suspended under s 107L, the person remains a "commercial fisherman" but they are no longer entitled to enjoy the privileges that are associated with this status, that is the ability legally to take fish for commercial use.
[33]	Once an outstanding amount is paid, the Director-General is required to lift a suspension (s 107L(4)), nothing further is required. The suspension is a freeze-hold mechanism. It does not interfere with the underlying status or rights.
[34]	We are not persuaded that s 62 assists the appellant’s case. Section 62 makes it an offence to fish commercially where a person does not have a permit. This section is aimed at a person who does not have a permit, rather than a person who has had their permit suspended.
[35]	Finally, s 67A was properly interpreted by Fogarty J. It addresses offending by people who are not commercial fishermen. We do not accept the argument that this provides a loophole for a LFR to purchase from a suspended commercial fisherman because s 97 makes that an offence.

[36]	Accordingly we are satisfied that the interpretation of Judge Moran, upheld by Fogarty J, was correct. The remaining convictions were properly entered. At the relevant times Mr Hill remained a commercial fisherman and accordingly all essential elements of the various charges were established and he was properly convicted.
[37]	The appeals are dismissed. The respondent is entitled to costs of $3,500 together with usual disbursements.