Ministry for Primary Industries v Cando Fishing Limited [2022] NZDC 4158 (10 March 2022)

Last Updated: 22 April 2023

IN THE DISTRICT COURT AT INVERCARGILL I TE KŌTI-Ā-ROHE KI WAIHŌPAI

CRI-2019-025-001853

[2022] NZDC 4158

MINISTRY OF PRIMARY INDUSTRIES

v

CANDO FISHING LIMITED

Hearing:	10 March 2022
Appearances:	L R Stothart for the Prosecutor (via AVL) K M Proctor-Western for the Defendant (via AVL)
Judgment:	10 March 2022

NOTES OF JUDGE R J WALKER ON SENTENCING

Charges

[1] The defendant company, Cando Fishing Limited, was charged that on 15 October 2018, at Southland, being a licensed fish receiver, failed to prepare a sales docket at the time when 123 kilograms of live paua was transferred from its licensed fish receiver premises, or transferred from its custody, possession, or control.

[2] The charge is laid pursuant to the Fisheries (Recordkeeping) Regulations 1990, rr 17(2)(a) and 28(1)(a). The maximum penalty attaching to the offence is a fine of

$100,000.

MINISTRY OF PRIMARY INDUSTRIES v CANDO FISHING LIMITED [2022] NZDC 4158 [10 March 2022]

[3] The company entered a plea of guilty to this charge at the commencement of a judge-alone trial before me in relation to other matters on 29 November 2021, just over two years after the company’s first appearance on this charge on 20 November 2019, following which a not guilty plea was entered on 4 December 2019.

Facts

[4] The agreed summary of facts says that the defendant company, Cando Fishing Limited, as the holder of a fish receiver licence, operates from Ocean Beach Road in Bluff.

[5] Around 11 am on 15 October 2018, fisheries officers visited another fish receiving premises as part of an unrelated and routine visit, and noted a quantity of fresh paua in their live tanks. On making further enquiries the fisheries officers found the fish had been supplied to them by the defendant company. Cando Fishing had caught the paua under their fishing permit before receiving it themselves and later supplying the fish. On request for any sales invoice completed at the time of supplying the fish, it could not be produced by the defendant company.

[6] Fisheries officers then visited the defendant’s vessel, the San Nicholas, to check fishing returns and found the fish had not been recorded as landed. The only record of the fish being received and sold was the unload document which did not contain a weight. A sales invoice was eventually created and produced for the fisheries officers, albeit late.

[7] The defendant has held a licence (fish receiver’s licence) since 2012 and has previously appeared in court.

[8] The summary of facts goes on to say, in terms of the impact of the offending, that under the quota management system all commercially taken fish must generally be landed by the fisher to the licensed fish receiver, where it is weighed and processed for onwards sale. While the quota management system is administered by the Ministry of Primary Industries to provide audit and compliance checks, it is primarily a self-policing system.

[9] Central to the quota management system is the recording of fish onto statutory documents. The system relies heavily on those participating to complete returns honestly and accurately and in a timely manner. This commits fish taken to be accounted for in an auditable trail that begins at the fisher, through to sales by the licensed fish receiver.

[10] The transfer of the paua - from the defendant, to the licensed fish receiver, to another licensed fish receiver - in the absence of both a source document identifying the weight of the paua and a sales invoice, creates the opportunity, the prosecution says, for paua to enter the market unregulated and additionally risks future paua stocks with the paua being over-caught and not accounted for.

Submissions for the prosecutor

[11] Both the prosecutor and counsel for the defence have helpfully filed written submissions in relation to the matter prior to today’s sentencing.

[12] The prosecutor notes that the defendant company operates what is known as a “vertically integrated system” where it operates as both a commercial fisher and a licensed fish receiver.

[13] The company had caught the paua under its fishing permit as a commercial fisher before receiving it themselves in their other capacity as a licensed fish receiver. The company then supplied the paua to a third party fish receiver, Fresh is Best, with whom they share premises. In fact, Fresh is Best and Cando each have two tanks in the same area of the building. The charge relates to the paua being held in one of the Fresh is Best tanks.

[14] The crucial issue, from the prosecution standpoint, is that the weight of the paua taken was not recorded on any record, it says, at the time of inspection. Mr Stothart reiterates that this morning by saying that the document recording weight was not produced, with a risk that the paua caught would not be recorded against the defendant’s quota.

[15] Ms Proctor-Western, in response to that particular issue, says the risk of the paua not being counted against the defendant company’s quota is low, if not minute, as there was another entity, namely Fresh is Best, involved in the transaction. She also submits that the weight was recorded on a piece of card that was later produced to the fisheries officers.

[16] The prosecutor points me to the purposes and principles of sentencing which in this case are a combination of ss 7 and 8 of the Sentencing Act 2002 around denunciation, deterrence, and consistency with other cases and sentencing, as well as s 254 of the Fisheries Act 1996 which requires the Court in imposing sentence to take account of and have regard to firstly, the difficulties inherent in detecting fisheries offences, and secondly, the need to maintain adequate deterrence against the commission of such offences.

[17] I am also reminded that the purpose of the Fisheries Act is to provide for the utilisation of fisheries resources while ensuring sustainability. The prosecutor refers to the dearth of published sentencing outcomes for this type of offending but does refer me to two previous District Court cases which I have been provided with.

Submissions for the defendant

[18] Counsel for the defendant, Ms Proctor-Western, submits that the paua was landed and transported to Cando in the early hours of the morning, at around 4 am. An unload document was completed recording the receipt of the paua by Cando as licensed fish receiver, but there were no staff present at the premises at that time of the morning. It is submitted that the truck driver who delivered the paua from the wharf on behalf of Cando cannot recall what occurred that particular morning given the time that has now elapsed, but his usual practice of what should occur was outlined in the written submissions that I have received on behalf of the defendant company.

[19] Counsel for the defendant company submits that the offending must be categorised at the very lowest end of the scale, on the basis the paua located in the shed premises had not entirely left the practical control of Cando, who could have conceivably had access to the tanks and retrieved the paua in question. That paua had

gone into the holding tanks in the early hours of the morning, as I have already mentioned, when no staff were present, which was only three hours or so, it is submitted, after receipt of the fish by Fresh is Best. But the fish had been receipted through the use of an unload document with the requirement under the regulations thereafter to complete a purchase invoice as soon as practicable after receipt of the fish. The defendant company maintains that arguably the “soon as practicable” timeframe had not elapsed by the time of the inspection. The weight information necessary to complete the purchase invoice, the defendant company says, had been recorded on a piece of cardboard which was seized at the time of the inspection.

[20] This was a case, the defendant says, of simply the paperwork not catching up with the early morning receipt of the paua and its transfer to Fresh is Best, and that the requirements required to complete a purchase invoice except for a unit price, if any, were available at the time of inspection.

[21] The defendant maintains that this charge relates to a failure to complete a document on time, rather than failing to complete the document at all, or one of making false statements or omissions.

The Court’s assessment

[22] I need to establish a starting point for this offending. The prosecutor submits that the case warrants a starting point substantially higher than cases associated with dealers who on-sell fish, as licensed fish receivers act as a key control point between commercial fishers and the market.

[23] In terms of seriousness of this particular offence, I note that it falls into the second category of offences, being one that has a maximum of $100,000 in terms of penalty.

[24] The submission made on behalf of the defendant company is that I should pay heed to a recently released consultation document entitled “Proposed Technical Amendments to Fisheries Regulations – Fisheries New Zealand discussion paper no. 2022/01” where the Fisheries New Zealand division of MPI has proposed that an

infringement offence be created in relation to the offence for which the company has been convicted.

[25] My perusal of that document suggests that the purpose of the discussion document is to seek feedback from tangata whenua and other stakeholders on the proposed amendments and invite submissions. At this stage it is simply a discussion document containing proposed operational changes to various fishing regulations, including record-keeping requirements for stakeholders involved in commercial fisheries. While the discussion paper, following consultation and submissions, could conceivably result in changes to the law in the future, it is not the law currently and certainly was not the law at the time that the offence was committed in October 2018.

[26] Mr Stothart says in his submissions this afternoon that even if there was an infringement fee regime in place, MPI still have the option to lay a charge which would bring the matter before the Court.

[27] I am sure that if, in the time since the offence occurred, penalties had increased, it would be argued quite fairly by the defendant that the Court deal with the matter in accordance with the lower penalties in force at the time. But I consider that the Court cannot deal with this matter on the basis of what the law could conceivably be in the future, but what it is – and, more importantly, what it was - at the time of this offence.

[28] To be fair to Ms Proctor-Western’s position, she maintains that the information provided to the Court in this respect was presented simply as an indication of what has been signalled might be a starting point in the future for what might be infringement offending for charges of this nature.

[29] In terms of the aggravating features of the offending, I look at the value of the paua involved, which had a retail value of at least between $6,000-$7,000, and the inherent risks involved in licensed fish receivers not keeping the required records against the purpose of the Act. I consider, given that the defendant operates a vertically integrated system where it is both the commercial fisher and the licensed fish receiver, that the company needs to be scrupulous and timely in its record-keeping systems. Given that it wears both hats, that is an otherwise important check and balance that

does not exist here. Having said that, I cannot say that this was a deliberate attempt to obfuscate the catch, but appears on its face to be a lapse in process in the document chain.

[30] It is clear that fines in relation to offences of this nature, particularly bearing in mind s 254 of the Fisheries Act, should not be seen by defendant as simply part of the cost of doing business, but must have some deterrent effect.

[31] Accordingly, I consider that the justified starting point for this offence is

$3,500. The company, however, has previous convictions for similar recordkeeping offending in 2016 in relation to offending said to have occurred in 2014 and 2015, which I consider necessitates an uplift of 25 per cent, or approximately $1,000. The company is entitled to a discount for its guilty plea, but that must reflect the fact that a guilty plea was only entered on the day of trial and some two years after the offence. In the circumstances, I regard a discount of 15 per cent as probably being on the generous side.

Penalty

[32] Applying those figures to my starting point, the final outcome in terms of a fine for the defendant company is $3,750.

Judge R J Walker

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 14/03/2022