Petromont Holdings Limited v Director-General of the Ministry for Primary Industries [2021] NZCA 567 (28 October 2021)

Last Updated: 2 November 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA45/2021 [2021] NZCA 567

	BETWEEN	PETROMONT HOLDINGS LIMITED Appellant
	AND	DIRECTOR-GENERAL OF THE MINISTRY FOR PRIMARY INDUSTRIES Respondent

Hearing:	28 July 2021
Court:	Brown, Clifford and Collins JJ
Counsel:	D W Grove for Appellant N C Anderson and S J Jensen for Respondent
Judgment:	28 October 2021 at 10.30 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

2. The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Brown J)

Introduction

• [1] On 9 December 2020 the High Court struck out portions of the amended statement of claim of the appellant (Petromont) seeking judicial review of permitting decisions made in 1993 under s 63(6) of the now-repealed Fisheries Act 1983 (the 1983 Act).^[1] Petromont’s appeal concerns the interpretation of s 329 of the Fisheries Act 1996 (the 1996 Act) which validated certain decisions of the Director‑General of Agriculture and Fisheries (the Director-General) and his delegates relating to fishing permits granted under ss 63 and 64 of the 1983 Act. A second issue concerns Petromont’s claim of a legitimate expectation to pursue a challenge to a decision of the Director-General by way of review.

Statutory context

• [2] Until 1 October 2004 the scampi fishery was managed outside of the quota management system (QMS) through fishing permits issued under ss 63 and 64 of the 1983 Act. When the QMS was extended to include the scampi fishery, quota holdings were allocated based on recorded catch history for the fishing years commencing 1 October 1990 and 1 October 1991.^[2]
• [3] Section 63(11) of the 1983 Act made provision for a statutory review of a decision made by a delegate of the Director-General:

Where any decision is made under this section by any officer acting under the delegated authority of the Director-General, the applicant for the permit or permit holder, as the case may be, shall be entitled to have the decision reviewed by the Director-General or by an officer designated by the Director‑General who was not involved in the making of the original decision.

• [4] The 1983 Act was repealed by the 1996 Act, s 329 of which came into force on 1 October 1996. It provides:^[3]

329 Validation of certain decisions relating to permits

(1) Every decision and every purported decision of the Director-General of Agriculture and Fisheries—

(a) made in respect of the issue, variation, refusal, revocation, or cancellation of any fishing permit under section 63 or any special permit under section 64 of the Fisheries Act 1983; and

(b) made before 1 October 1992—

is hereby declared to be and always to have been valid.

(2) Every decision and every purported decision of the chief executive (whether made by the chief executive or the Director-General of Agriculture and Fisheries)—

(a) made in respect of the issue, variation, refusal, revocation, or cancellation of any fishing permit under section 63 or special permit under section 64 of the Fisheries Act 1983; and

(b) made on or after 1 October 1992 but before the commencement of this section—

is hereby declared to be and always to have been valid.

(3) Subsection (1) does not apply to a decision or purported decision referred to in that subsection if the decision or purported decision is being challenged in or is otherwise subject to any court proceedings commenced before the date of commencement of this section.

(4) Subsection (2) does not apply to a decision or purported decision referred to in that subsection if—

(a) the decision or purported decision is being challenged in or is otherwise subject to any court proceedings commenced before the date of commencement of this section; or

(b) the applicant for the permit which was the subject of a decision or purported decision referred to in that subsection—

(i) has, before the commencement of this section, lodged with the chief executive; or

(ii) within 12 months after the commencement of this section, lodges with the chief executive—

a notice requesting the chief executive to review that decision or purported decision.

...

• [5] The decision to validate past decisions was made because the legislature was concerned that challenges to previous decisions should not undermine the introduction of new species into the QMS.^[4]

Factual background

• [6] On 29 September 1992 (just within the period by reference to which the scampi QMS allocation was based) Petromont was granted a permit under s 63 to take scampi in respect of quota management areas (QMAs) 1 to 9, subject to certain conditions imposed as a means of managing the scampi fishery. The permit was granted by a departmental officer acting under the delegated authority of the Director-General. However on 25 May 1993 that permit was revoked in respect of all QMAs (except QMAs 4 and 6) for the reason that Petromont had made “no landing of certain non‑ITQ fishstocks” listed in the permit. That decision was made by another departmental officer also acting under delegated authority.
• [7] Petromont successfully sought judicial review of the decisions both to impose certain permit conditions and subsequently to revoke the permit.^[5] The High Court declared invalid the revocation of Petromont’s permit to fish scampi and the conditions, setting aside both decisions. The Director‑General personally reconsidered the matter and on 15 September 1993 he notified Petromont of his decision pursuant to s 63(6) of the 1983 Act to impose conditions that were the same as those that had previously applied.
• [8] The validation of decisions by s 329 is subject to exceptions that differ depending on the time period within which the decision was made, either (a) before 1 October 1992;^[6] or (b) on or after 1 October 1992 but prior to 1 October 1996.^[7] The decision made on 15 September 1993 fell into the second category and therefore the only exceptions are those found in s 329(4).
• [9] Petromont did not challenge the Director-General’s 15 September 1993 decision by a Court proceeding. Instead, on 1 October 1997 in purported reliance on s 329(4)(b)(ii) Petromont gave notice to the chief executive of the Ministry of Fisheries of its request for “a review of decisions and purported decisions of the Director General of Agriculture and Fisheries”.
• [10] Because a difference of view emerged concerning the scope of such administrative review, Petromont filed an application for judicial review seeking declarations both as to the scope of the administrative review and concerning procedural aspects of that process. It is common ground that the outcome of that litigation was that the administrative review sought on 1 October 1997 could not proceed. As Clark J held in the High Court, the right to such a review was granted by s 63(11) of the 1983 Act and was only available in respect of decisions of delegates of the Director-General, not in relation to decisions of the Director-General himself. The savings provision in s 329(4) merely recognised the existence of that right. It did not itself confer a right to commence court proceedings or a right to request an administrative review. ^[8]
• [11] On 8 February 2019 Petromont commenced the current judicial review proceeding in respect of the following decisions:

(a) The decision by the defendant, on 15 September 1993, under s 63(6) of the Fisheries Act 1983, to revoke the conditions then attached to schedule D to the plaintiff’s permit (conditions which the plaintiff had successfully challenged by way of judicial review) and to substitute those revoked conditions with a new set of identical conditions which continued to unfairly and unlawfully prejudice the plaintiff; and

(b) The inconsistent, unfair and unlawful decisions not to allocate catch limits in the 1992-93 fishing year, and thereafter despite the interim catch limits being fully caught.

The decision at (a) had been the subject of Petromont’s attempted administrative review of 1 October 1997 which this Court had ruled was not available.

• [12] Unsurprisingly the respondent’s rejoinder was that the impugned decisions had been statutorily validated and hence were immune from judicial review. The exception from validation in s 329(4) of the Act did not apply because:

(a) this proceeding was not commenced prior to 1 October 1996 (s 329(4)(a)); and

(b) permitting decisions of the respondent’s predecessors (as opposed to those of delegates) were not amenable to administrative review by the chief executive under s 63(11) of the 1983 Act (s 329(4)(b)).

• [13] The respondent applied to strike out Petromont’s statement of claim to the extent it challenged permitting decisions made before 1 October 1996.

The High Court judgment

• [14] Two aspects of the judgment are significant for the present appeal: the interpretation of s 329 and the rejection of Petromont’s asserted legitimate expectation.

The interpretation issue

• [15] The Judge framed the interpretation issue in this way:^[9]

[D]oes s 329(4) save a decision from validation completely (so that it can be challenged in any way in the future) or does it save a decision from validation only to allow the types of challenges mentioned in s 329(4) to conclude?

The Judge accepted the respondent’s argument that, given the breadth of the validating provisions followed by two specific exceptions, it was apparent that the exceptions were of limited scope.^[10] Hence previous permitting decisions could be challenged only by a legal proceeding commenced before 1 October 1996 or by an administrative review by the chief executive if requested by 1 October 1997.

• [16] The Judge considered this interpretation was supported both by the legislative history of s 329 and by observations of this Court in United Fisheries Ltd v Chief Executive Ministry of Fisheries.^[11] She concluded that in enacting s 392(4) Parliament intended to limit not only the timeframe within which a decision or purported decision of the Director‑General could be challenged but also the manner of challenge, being those legal proceedings or reviews specified to s 329(4).^[12]
• [17] The Judge also concluded that the word “review” in s 329(4)(b) was intended to mean only a statutory review — in the Judge’s own words “an internal administrative review”. It did not include an application for judicial review.^[13]

The legitimate expectation claim

• [18] Petromont claimed that prior to this Court’s 2018 judgment both parties had proceeded on the shared understanding that s 329(4) preserved a right of administrative review of decisions made either by the Director-General or by his delegate. Petromont maintained that, but for that mutual assumption, it would have taken steps prior to 1 October 1996 to seek judicial review of the 15 September 1993 decision. It argued that, notwithstanding the enactment of s 329, it had a legitimate expectation, in the nature of a substantive right, to the completion by the respondent of the administrative review which Petromont had requested in respect of the Director‑General’s 15 September 1993 decision.
• [19] In the Judge’s view there were significant obstacles to such a claim which rendered it unnecessary to reach a firm view on whether substantive legitimate expectation exists in New Zealand or the appropriate formulation of the test.^[14] The first obstacle was that the alleged legitimate expectation was inconsistent with the statutory scheme.
• [20] A second difficulty was Petromont’s inability to establish reliance on a promise by or practice of the respondent.^[15] Because Petromont’s notice seeking a review was filed on 1 October 1997, it was only from that point that Petromont could seek to rely on a representation that the review would proceed. However its claim as pleaded did not rely on alleged conduct by the respondent after that date. Consequently, as formulated, Petromont’s legitimate expectation claim could not prevent s 329 from operating to validate the decision of 15 September 1993.

Issues on appeal

• [21] The parties agreed that the appeal against the strike out of the claim, to the extent it sought to challenge decisions made under ss 63 and 64 of the 1983 Act, involved the following issues:

1.1.1 Did the High Court err in determining:

(a) the validation of decisions made under ss 63 and 64 of the Fisheries Act 1983 before 1 October 1996 in s 329(2) of the Fisheries Act 1996 was subject only to allowing the challenges set out in s 329(4) of the Fisheries Act 1996 to continue; and

(b) accordingly, any court challenge in respect of those decisions had to have been brought before 1 October 1996?

1.1.2 Did the High Court err in determining:

(a) the appellant does not have a legitimate expectation that decisions validated by s 329 of the Fisheries Act 1996 would be challenged notwithstanding the validating effect of that section; and

(b) any such legitimate expectation cannot be given effect to because it is contrary to the scheme of the Fisheries Act 1996 and in particular the validating effect of s 329 of the Fisheries Act 1996?

The interpretation of s 329

• [22] Mr Anderson for the respondent supported the Judge’s interpretation of the text of s 329. He argued that the exemption from validation of certain decisions which were subject to ongoing challenges provided a strong indication that the purpose of the exemption was only to enable those particular challenges to continue. It followed that the proper interpretation was that such decisions could only be challenged via the means that saved them from validation in the first place.
• [23] He contended that such an interpretation was consistent with Parliament’s apparent intent. He drew attention to the fact that, although the first version of the Fisheries Bill 1994 would have validated all decisions made under ss 63 and 64 of the 1993 Act,^[16] the Primary Production Committee amended the clause to its current form.^[17] In reporting back on the Bill, the Committee explained:^[18]

There is a need to validate permitting decisions so that appeals do not undermine the introduction of new species into the QMS. However, this can be achieved by validating permitting decisions up to 30 September 1992, the period including the catch history years. We consider that appeals against permit decisions after 30 September 1992 should be able to be lodged up to one year after the Bill’s enactment. Any proceedings before the commencement of the Bill should be allowed to continue. This is provided for in clause 329.

• [24] Hence Mr Anderson submitted that the intention of the amendment was to allow the completion of court proceedings extant at the commencement of the section (1 October 1996) and of statutory reviews lodged up to one year later (1 October 1997).
• [25] Mr Grove emphasised that the third sentence in the quoted passage from the Committee Report referred to challenges as “appeals”. He submitted that that choice of word did not reflect the restrictive view of s 329(4)(b) whereby only an administrative review of delegated decisions pursuant to s 63 was available. He contended it was easy to understand why both parties had acted on the basis that the Director-General’s 15 September 1993 decision could be challenged by serving a notice up to one year after the 1996 Act came into force. He suggested that what was likely to have led to the parties’ misunderstanding was that the procedure in s 329(4)(b) of a notice requiring the chief executive to review a decision was not expressly tied back to s 63.
• [26] Mr Anderson made the point that, were s 329 to be interpreted in a way that enabled a decision to be challenged by any means once an exception to validation applied, that would frustrate Parliament’s intention by sapping the section of nearly all of its validating effect. Any person who wished to challenge a decision through the courts but failed to do so before 1 October 1996 could simply give notice to administratively review the decision prior to 2 October 1997 and thereafter initiate court proceedings at any time. Mr Anderson also drew attention to the general judicial support for the respondent’s interpretation of s 329 by this Court in Jenssen v Attorney‑General^[19] which was subsequently endorsed by this Court in relation to ss 329(2) and (4) in United Fisheries Ltd v Chief Executive Ministry of Fisheries.^[20]
• [27] In our view the respondent’s interpretation is correct for the reasons advanced by Mr Anderson. Section 329(4) identifies two categories of challenge to prior permitting decisions which must be on foot by specified dates. The intent of the provision is that such challenges may be pursued to determination notwithstanding the validation in s 329(2). As this Court has upheld,^[21] the second category of challenge, to which the later statutory deadline of 1 October 1997 applies, is confined to decisions of delegates of the Director‑General under s 63(11) of the 1983 Act. The 15 September 1993 decision of the Director-General not having been the subject of a court proceeding by 1 October 1996, the saving from validation in s 329(4) could not avail Petromont.
• [28] Recognising the difficulties he confronted on the interpretation issue, Mr Grove described the legitimate expectation argument as the focus of the appeal.

The legitimate expectation claim

• [29] Mr Grove structured his argument by reference to the five stage test to establish a substantive legitimate expectation proposed in Oosterveen v Ministry of Business, Innovation and Employment referred to by the Judge:^[22]

(1) a public authority has given a clear and unambiguous undertaking;

(2) the undertaking was reasonably understood to mean what the applicant claims;

(3) the decision-maker knew of the representation and chose to act contrary to it;

(4) the applicant has suffered some detriment by relying on the representation; and

(5) the decision-maker’s conduct cannot be objectively justified as being in the public interest and a proportionate response to the circumstances of the case.

• [30] He contended that the requisite undertaking “was given through the Report and the parties’ understanding of the legislation”. Petromont had a legitimate expectation that its entitlement to “appeal” would be preserved by the saving provision. Such an expectation was said to be consistent with its understanding of s 329 and the Committee Report.
• [31] Mr Grove argued that the recognition of such a legitimate expectation is not contrary to the statutory scheme when correctly understood. He submitted:

34. In relation to the Decision, the subject of the appeal, the purpose and scheme was to allow appeals so long as the appeal was lodged up to one year after the Bill’s enactment. That right of appeal in the legislation is obtained by the lodging of the review notice and Petromont did exactly that. There was no distinction made or considered by the Committee or Parliament between delegated and non-delegated decisions.

35. The statutory scheme was to allow a right of appeal by the filing of the notice. As such, the legitimate expectation is not inconsistent with the statutory scheme. It cannot be said to be requiring public bodies to act contrary to the law. The whole purpose of the savings was to allow an appeal if lodged within a year. That is compatible with the legislative provisions.

• [32] Although not stated expressly, the thrust of the argument appears to be that, based on the asserted legitimate expectation, Petromont’s judicial review proceeding ought to be permitted to continue in substitution for the administrative review, notwithstanding that the judicial review was not filed by 1 October 1996. As Mr Anderson observed, there was a change in focus from Petromont’s argument advanced in the High Court, where reliance was placed on interactions with the Ministry after 1 October 1996 as justifying the decision to not apply for judicial review prior to that date. In this Court Petromont’s focus is on the statements in the Committee Report and on the words of s 329 itself.
• [33] To the extent that Petromont’s contention relies on the wording of s 329 it is misconceived. Irrespective of what either party may have perceived the effect of s 329 to be, the meaning of that provision is as objectively construed by the courts. A claim of legitimate expectation cannot be advanced on the footing that s 329 was understood to mean something different from the interpretation adopted by this Court.
• [34] With reference to the alternative proposition that the expectation derived from the terminology in the Committee Report, Mr Anderson responded, correctly, that actions of the Committee cannot be attributed to the Ministry, or to the Crown more generally, so as to render it unfair for the Ministry to decline to carry out an administrative review. He draws attention to this Court’s observations in Green v Racing Integrity Unit Ltd that the foundation of the legitimate expectation doctrine is that a public authority should be bound by its own undertakings when it has promised to follow a certain procedure, it being in the interests of good administration that the public authority should act fairly and implement its promise.^[23]
• [35] However the hurdle which Petromont faces is more fundamental than any issue relating to the identity of the alleged promisor. The point is simply that a claim of legitimate expectation cannot be invoked to undermine parliamentary sovereignty and to seek to compel public authorities to act contrary to law. A claim cannot be brought in the Courts to secure such an objective. Thus the chief executive cannot be required to conduct an administrative review of a decision of the Director-General. Nor can a judicial review proceeding filed after 1 October 1996 be entertained on the footing that such is required in order to redeem what has been discovered to be a misconceived election to pursue an administrative review.
• [36] To recapitulate, the insuperable difficulty for Petromont is that by s 329 Parliament validated the 15 September 1993 decision. Consequently any Court proceeding in respect of that decision had to be commenced before 1 October 1996. It was not. The Director-General’s decision was not amenable to administrative review because, as this Court has held, such reviews derived from s 63(11) of the 1983 Act and only applied to delegated decisions. The 15 September 1993 decision was not such a decision.

Result

• [37] The appeal is dismissed.
• [38] The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

Solicitors:
Foy & Halse, Auckland for Appellant
Crown Law Office, Wellington for Respondent

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^[1] Petromont Holdings Ltd v Director-General of the Ministry of Primary Industries [2020] NZHC 3242 [Judgment under appeal].

^[2] See Fisheries Amendment Act (No 2) 2004.

^[3] The restructuring of the Ministry of Agriculture and Fisheries in 1995 accounts for the different offices referred to in s 329(1) and (2): see Ministry of Agriculture and Fisheries (Restructuring) Act 1995.

^[4] Petromont Fishing Co Ltd v Director-General of the Ministry of Primary Industries [2018] NZCA 422 at [9].

^[5] Petromont Holdings Ltd v Director-General of Agriculture & Fisheries Auckland HC M986/93, 7 September 1993.

^[6] Section 329(1)(b).

^[7] Section 329(2)(b).

^[8] Petromont Fishing Co Ltd v Ministry of Primary Industries [2018] NZHC 676, [2018] NZAR 740. Petromont’s appeal in this Court was dismissed: Petromont Fishing Co Ltd v Director-General of the Ministry of Primary Industries, above n 4.

^[9] Judgment under appeal, above n 1, at [37].

^[10] At [40].

^[11] At [43], quoting United Fisheries Ltd v Chief Executive Ministry of Fisheries [2001] NZCA 99; [2001] NZAR 707 (CA) at [31].

^[12] At [46].

^[13] At [47]–[48].

^[14] At [64].

^[15] At [68].

^[16] Fisheries Bill 1994 (63-1), cl 312.

^[17] Fisheries Bill 1996 (63-2), cl 329.

^[18] Fisheries Bill 1996 (63-2) (select committee report) at xxxviii.

^[19] Jenssen v Attorney-General CA273/98, 25 May 1999.

^[20] United Fisheries Ltd v Chief Executive Ministry of Fisheries, above n 11, at [31].

^[21] Petromont Fishing Co Ltd v Director-General of the Ministry of Primary Industries, above n 4.

^[22] Judgment under appeal, above n 1, at [63], quoting Oosterveen v Ministry of Business, Innovation and Employment [2014] NZHC 1709, [2014] NZAR 1091 at [50].

^[23] Green v Racing Integrity Unit Ltd [2014] NZCA 133, [2014] NZAR 623 at [15].