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MINISTRY OF FISHERIES V SMERDON AND ANOR HC WN CIV 2005-485-2503 [2009] NZHC 565 (18 May 2009)

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
                                                                        CIV
2005-485-2503

              UNDER                         the Declaratory Judgments Act 1908 and
                              
             the Judicature Amendment Act 1972


              BETWEEN                       CHIEF EXECUTIVE, MINISTRY OF
      
                                     FISHERIES
                                            Applicant

              AND         
                 RONALD JOHN SMERDON
                                            First Respondent

              AND            
              CATCH HISTORY REVIEW
                                            COMMITTEE
                                       
    Second Respondent


Hearing:      7 May 2009

Appearances: P A McCarthy for Applicant
             No appearance by or on behalf
of First Respondent

Judgment:     18 May 2009


                RESERVED JUDGMENT OF RANDERSON J


                    This judgment
was delivered by me on 18 May 2009
                   at 3.30 pm, pursuant to r 11.5 of the High Court Rules


                 
              Registrar/Deputy Registrar




Solicitors:   Crown Law Office, PO Box 2858, Wellington
              Izard Weston,
PO Box 5348, Wellington 6040


MINISTRY OF FISHERIES V SMERDON AND ANOR HC WN CIV 2005-485-2503 18 May 2009
Introduction


[1] 
  The central question in this application for judicial review under the Fisheries
Act 1996 is whether late catch returns can be
taken into account under s 32 of the
Act when determining the extent of provisional catch history under Part 4 of the Act.
The second
respondent, the Catch History Review Committee, held that they could
be taken into account if there was an adequate explanation for
the late return. The
submission on behalf of the appellant (the Chief Executive, Ministry of Fisheries) is
that no discretion is
available to enable late catch returns to be taken into account for
the purpose of calculating provisional catch history.


[2] 
  The first respondent Mr Smerdon has taken no steps in this proceeding. The
Review Committee abides this Court's decision.


Statutory
context


[3]    The purpose of the Act is to provide for the utilisation of fisheries resources
while ensuring sustainability: s
8(1). One of the ways in which the statutory purpose
is achieved is through the operation of a quota management system under Part
4 of
the Act.    Part 4 sets out a system for making fish stock subject to the quota
management system. Although the legislation
applicable at the material time was
amended with effect from 1 October 2004, the statutory process remains much the
same and involves
the following steps in broad terms:


       a)      A declaration by the Minister of Fisheries to make a stock subject to
     
         the quota management system by notice in the Gazette: s 18.
       b)      Setting a total allowable commercial catch for
the stock: s 20.
       c)      Allocating quota on the basis of provisional catch history (PCH): s 30
               (now s 29A).
       d)      Determining eligibility to receive PCH for the stock in question:
               ss 32-34.
       e)      Notifying
eligibility to receive PCH, which notification must include
               advice as to the date by which objections must be lodged:
s 35.
          f)    As soon as practicable after the date for objections, the Chief
                Executive completing a determination
of any objection received,
                deciding whether the person concerned is eligible to receive PCH, and
               
notifying the person concerned of the outcome. The notification is to
                include advice as to rights of appeal, the
time for lodging an appeal
                and, where the Chief Executive considers the person is not eligible to
              
 receive quota, the period in which the person may transfer the PCH to
                another: ss 36 and 37.


[4]       The rights of appeal to the Review Committee are defined in s 51 and its
functions
and powers in ss 283 to 293.


Factual background


[5]       In 2003, the Minister of Fisheries declared that yellowfin tuna in
quota
management area number one would enter the quota management system with effect
from 1 October 2004. The Minister declared that
the qualifying years for this
purpose were 1 October 1999 to 30 September 2002.


[6]       Mr Smerdon was a commercial fisher and,
along with others, was notified by
the Chief Executive by letters dated 21 November 2003 and 10 December 2003 of
his eligibility
to receive an allocation of 533 kgs of provisional catch history (PCH)
for the relevant area. Mr Smerdon objected to the Chief Executive
against the
calculation of his PCH entitlement by notice dated 2 February 2004, asserting that 67
kilograms of yellowfin tuna in
the relevant area had not been included in his PCH
allocation. The Chief Executive advised Mr Smerdon by letter dated 30 April 2004
that his objection was declined because his catch landing return relating to the 67 kgs
of yellowfin tuna was received by the Ministry
of Fisheries outside the relevant time
limits.


[7]       The disputed return related to a fishing trip Mr Smerdon undertook between
25 and 28 May 2000. Under the Fisheries (Reporting) Regulations 1990, he was
obliged to provide Tuna Longline Catch Landing Returns
for that trip by 15 June
2000 but the return was not provided until 7 November 2000. The Chief Executive
also contends that, in
order to be eligible for PCH purposes, the return had to be
given to the Chief Executive on or before the 15th day after the close
of each
applicable qualifying year. That meant in Mr Smerdon's case that the relevant return
had to be given to the Chief Executive
by 15 October 2000.


[8]    Mr Smerdon appealed to the Review Committee by notice dated 24 May
2004. Following a hearing on 29 August
2005, the Review Committee issued its
decision upholding Mr Smerdon's appeal and increasing his PCH by 67 kgs.


[9]    Mr Smerdon
did not appear at the hearing but sent a facsimile dated
26 August 2005 in which he said:

       In regard to CLR 229470, you will
note that I have admitted that this return
       was late, being sent in but this was due to skipper running my boat at that
  
    time failing to send it. (Note: signed by R J Heaton) And was much later
       found still in CLR book and sent immediately.

[10]   After reciting the background facts and the submissions on behalf of the
Ministry of Fisheries the Review Committee stated:

       20. The lateness of the relevant return came about as a result of simple
           human error. The Ministry concedes that
there was no attempt on the
           part of the fisher to "pull the wool over the eyes" of the Ministry. It is
           accepted
that the additional 67kgs will not impact on the sustainability
           of the yellowfin tuna resource. Clearly the fish was taken
and it was
           reported, albeit late. The Ministry does not point to any other
           inconsistencies in the audit trail,
always available to the Ministry by
           reference to returns from the applicable licensed fish receiver.
           Furthermore
it is clear that there is no history of failings on the part of
           this fisher in submitting accurate returns on time, and
it is not necessary
           for the orderly implementation and management of the Quota
           Management System that this
one blemish be held against the appellant
           in the circumstances of this case. A minor adjustment to the PCH
          
allocations by reason of the 67kgs of yellowfin tuna caught can be
           made if this Committee concludes that this one return
out of so many
           can be taken into account in the PCH allocations. I have no difficulty
           concluding that the return
CLR229470 should be taken into account
           and the 67kgs of yellowfin tuna be added to the appellant's PCH
           allocation in that fishery.

       21. I have
also regard to the fact that more recently it has become Ministry
           practice to communicate immediately with a fisher if
a return appears
           not to have been filed within the required time following landings; and
           Ministry inquiries
are made as to the whereabouts of the relevant
           returns. There is today a much more ready and regular communication
  
        between Ministry officials and fishers if returns are either missing or
           are inaccurate in any respect. There is
invariably an immediate inquiry
            from the Ministry of the fisher. The Committee is also aware that such
            current
practices did not occur in the earlier years although it was
            intended that they do so. Had that inquiry been made in
the appellant's
            case, given the clear existence of a correctly completed form from the
            delayed delivery of
the lawful return/report would have been
            immediately remedied and certainly remedied within applicable time
        
   limits.

       22. In my view the explanation proffered by the appellant is adequate and
           there is no underlying reason
why the report cannot be taken as having
           been deemed to be filed within time. It follows therefore that an
          
additional 67kgs for yellowfin tuna is to be added to the YFN1 PCH
           allocation of the appellant. This operates to increase
his PCH in YFN1
           from 534kgs to 601kgs. That is the decision of the Committee.


The Chief Executive's submissions on appeal


[11]   Mr McCarthy submitted for the Chief Executive that the substantive
entitlement to an allocation of PCH depends upon "eligible
catch" reported in
"eligible returns". At the material time, these terms were defined in ss 32 and 34.
Section 32 relevantly provided:

       32 Criteria of eligibility to receive provisional catch history for quota
       management stock

       (1) If a stock
is declared by notice under section 18 of this Act to be subject
       to the quota management system but the stock was not, immediately
before
       the date of the publication of the notice, controlled by means of individual
       catch entitlements, a person is
eligible to receive provisional catch history
       for the stock if the person -

           (a) Either -

           ...

   
        (iii)   In the case of a stock that is a species of tuna, held, at any time
                    during any applicable qualifying
year, a fishing permit issued
                    under section 63 of the Fisheries Act 1983 or section 91 of this
             
      Act that authorised the holder to take the stock; or

            ...

       and has provided the chief executive with eligible
returns for the stock for the
       applicable qualifying year or qualifying years.

       (2) For the purposes of this Part of
this Act, an eligible return is a lawfully
           completed catch landing return or a catch effort landing return as
       
   referred to in the Fisheries (Reporting) Regulations 1990 that, -
            (a) In the case of any stock referred to in subparagraph
(ii) or
                subparagraph (iii) of subsection (1)(a) of this section, was given to
                the chief executive
on or before the 15th day after the close of each
                applicable qualifying year; or

            (b) In any other case,
was given to the chief executive on or before the
                15th day of October 1994. (Emphasis added).

[12]   Pausing at
that point, eligibility to receive PCH required, in the present case:


       a)      The provision to the Chief Executive of "eligible
returns" for the
               yellowfin tuna for the applicable qualifying year or years;


       b)      In order to be an "eligible
return" it must have been a lawfully
               completed Catch Landing Return (or a Catch Effort Landing Return)
               as referred to in the Fisheries
(Reporting) Regulations 1990; and


       c)      The Catch Landing Return had to be given to the Chief Executive on
          
    or before the 15th day after the close of each applicable qualifying
               year.


[13]   The next step in the calculation
of PCH is the assessment of "eligible catch"
under s 34. This section provides that eligibility to receive PCH depends upon "the
total weight of eligible catch reported in the person's eligible returns in respect of the
period of 12 consecutive months within
the qualifying years...". Section 34 also
defines the expression "eligible catch". Relevantly, s 34 provided at the time in
question:

       34 Calculation of provisional catch history

            (1) The provisional catch history of a person is, -

          
      (a)   ...

                 (b)   If the qualifying year or years are set under section 33(b) of
                       this
Act and the person is eligible to receive provisional
                       catch history under section 32(1)(a)(iii) of this Act
for any
                       stock, the total weight of eligible catch reported in the
                       person's eligible
returns in respect of the period of 12
                       consecutive months within the qualifying years relating to
       
               the person, which period shall be ­
                          (i) Chosen by the person in accordance with section
                              35(3)(c)(iv) or section 35(4)(b) of this Act; or

                          (ii) If the person has
not made such a choice, chosen by the
                               chief executive in accordance with section 35(1)(d) of
    
                          this Act:

                (c) ...

            (2) For the purposes of this Part and Part 15 of this Act,
the term
                eligible catch means the total weight of all the catch of the relevant
                stock lawfully taken
and lawfully reported as landed or
                otherwise lawfully disposed of by a person eligible to receive
              
 provisional catch history under section 32 of this Act during the
                applicable qualifying years; ... (Emphasis added).

[14]   As the Court of Appeal held in Chief Executive, Ministry of Fisheries v Brace
 [2007] NZCA 410 at  [24], in order to be "lawfully reported" for the purposes of
s 34(2), the catch must have been reported in accordance with the procedures
contained in the Act and Regulations. In the present case, as already noted, the
relevant return was not received in the period specified
by the Fisheries (Reporting)
Regulations 1990 nor was it provided to the Chief Executive by the 15th day after the
close of the relevant
qualifying year i.e. by 15 October 2000. In fact, it was not
received for more than 12 months after that date.


[15]   The combined
effect of ss 32 and 34 in relation to Mr Smerdon's eligibility to
receive PCH required:


       a)      The lawful taking of the
relevant catch;
       b)      The lawful completion and reporting of the relevant catch under the
               Fisheries (Reporting)
Regulations 1990; and
       c)      Giving the relevant returns to the Chief Executive on or before the
               fifteenth
day after the close of each applicable qualifying year.


[16]   Mr McCarthy submitted that the Court of Appeal accepted in Brace
that, in
enacting the 1996 Act, Parliament intended to achieve certainty and finality even
though there may be apparent unfairness
in individual cases. In Brace, the Court of
Appeal was considering the way in which PCH is calculated under the Act and, in
particular,
whether the Review Committee had jurisdiction to amend catch returns to
include additional quantities of fish not originally reported
in those returns. In
deciding that the Review Committee did not have such jurisdiction, the Court took
into account extracts from
the Primary Production Committee's report to the House
following its consideration of the Fisheries Bill. The relevant material is
at [20] of
the Court of Appeal's decision:

       [20] We note also that when the Primary Production Committee reported to
    
  the House following its consideration of the Fisheries Bill, it said (at xvi):

             Fishing industry [submitters] generally
focused on the
             provision of a prescriptive, clear and logical mechanism for
             allocating quota, with separate
provisions for allocations on
             the basis of catch history and Individual Catch Entitlements
             (ICE), and an
appropriate appeal mechanism. We are
             recommending several amendments to clarify the allocation
             process.

       The Committee also noted that an increase in one fisher's allocation may
       impact on the allocations of other fishers,
in circumstances where the
       Crown does not have sufficient unencumbered quota to meet the increase
       (at xviii). Finally,
the Committee said (at xxi):

            While there exists an obligation to record bait caught, by
            species, this obligation
has not been consistently adhered to by
            fishers, or consistently enforced or interpreted by the Ministry
           
of Fisheries.

       The considerations raised in these extracts are relevant to the interpretative
       task before us.

[17]
  The Court of Appeal also referred to the provisions of s 292(1) which relate
to the admissibility of evidence before the Review
Committee. Section 292(1)
provides:

       The Catch History Review Committee may receive in evidence any
       statement, document,
information, or matter that may, in its opinion, assist it
       to deal effectively with the matter before it, whether or not the
same would
       otherwise be admissible in a court but, unless expressly otherwise provided
       in this Act, the Committee shall
not receive in evidence any records or
       returns required to be provided under this Act or the Fisheries Act 1983 that
    
  either have not been provided to the chief executive or were provided to the
       chief executive after the date by which they
were required to be provided.

[18]   As the Court of Appeal noted:

       [31] The latter part of this provision underscores the
importance of returns,
       duly filed, in the scheme of the Act. We consider that it is inconsistent with
       this limitation that the Committee be
able to amend returns years after the
       event to incorporate fishers' good faith estimates of their catch in the
       qualifying
period, even where, as here, those good faith estimates were
       provided soon after the qualifying period.

       [32] We are
reinforced in the view that we have reached on the statutory
       language by the considerations mentioned in the extracts quoted
at [20]
       above from the Primary Production Committee's report on the Bill. In
       particular:

              (a)    We accept
that there is a need for certainty and finality. We
                     consider that the Act, as framed, does show a legislative
                     intention to achieve certainty and finality, which would be
                     undermined if we were to adopt
the approach which the Judge
                     upheld.

              (b)    We recognise the need to take account of the interests
of other
                     fishers, who did comply with their reporting obligations and
                     have received quota
accordingly. Their quota might be subject
                     to downward readjustment (depending on conditions within the
    
                particular fishery) if revisions could be made on the basis of
                     informal reporting.

       
      (c)    The interpretation adopted by the Judge may well itself create
                     unfairness. There may be others
who could legitimately claim
                     to have reported their catch of bait fish to the Ministry in some
            
        informal way, and so to be entitled to additional quota, whilst
                     others, who caught bait fish legitimately
but did not report their
                     catch even informally, may miss out. The point is that
                     Parliament
was obviously attempting to create clear entitlements
                     under the Act by drawing lines. Redrawing those lines
does not
                     eliminate unfairness ­ it merely redistributes it.

       To these considerations we add that the
Primary Production Committee also
       expressed the view that only lawfully completed and furnished returns
       should be used
to calculate provisional catch history (at xvii). We consider
       that that result is what the wording of the Act achieves.


Discussion


[19]   The grounds upon which an appeal may be brought to the Review Committee
were carefully specified in s 51(1) at
the relevant time as follows:

       51 Rights of appeal

       (1) Any person, including the chief executive, may, subject to
subsection
       (3) of this section and on or before the date specified for the purpose in the
       relevant notice under section
36 or section 41 of this Act, appeal to the Catch
       History Review Committee against,--

             (a)    In the case of
any stock for which provisional catch history was
                    allocated under section 41 of this Act, -
               
  (i) A decision of the chief executive to the effect that the person
                      is or is not a commercial fisher who
has an individual catch
                      entitlement entitling the person to an allocation of
                      provisional
catch history; or

                  (ii) An allocation of provisional catch history that is different
                       from
the amount to which the person is entitled under
                       section 40 of this Act:



           (b)   In any other
case,--

                 (i) A decision of the chief executive to the effect that the person
                     is or is not eligible
to receive provisional catch history under
                     section 32(1)(a) of this Act either because that person held
   
                 or did not hold a fishing permit or controlled fishery licence
                     at any time during the applicable qualifying year or years; or

                 (ii)
A decision of the chief executive to the effect that the person
                      has, or does not have, eligible catch in the
qualifying year or
                      years entitling the person to be allocated provisional catch
                      history;
or

                 (iii) A decision of the chief executive as to the quantum of
                       eligible catch reported
in any eligible returns made by any
                       person eligible to receive provisional catch history, on the
        
              ground that--

                     (A)    The information on the relevant returns held by the
                   
        chief executive has been incorrectly recorded by the
                            chief executive; or

                  
  (B)    The chief executive has excluded fish, aquatic life, or
                            seaweed that was lawfully taken and
lawfully reported
                            in eligible returns from the person's eligible catch; or

                 (iv) A decision
of the chief executive to the effect that the person
                      is or is not eligible to be allocated quota under paragraph
                      (b)(i) or paragraph (b)(ii)(A) of section 35(1) of this Act
                      either because that person
held or did not hold a fishing
                      permit or controlled fishery licence as at the date of the
                
     publication of the notice under section 18 of this Act
                      declaring the stock to be a quota management stock;
or

                 (v) An allocation of provisional catch history that is different
                     from the amount to which
the person is entitled under
                     section 34 of this Act.

[20]   The Review Committee "has all such powers as are
necessary or expedient to
enable it to carry out its functions": s 284(5).         Except as expressly provided
otherwise in the
Act, the Review Committee may regulate its procedure in such
manner as it thinks fit: s 287(1). Despite the apparent breadth of the
Review
Committee's powers, it must exercise its functions in accordance with law and, in
particular, having regard to the statutory
regime under consideration. I am satisfied
that the Review Committee does not have jurisdiction to accept late returns for the
purpose
of calculating PCH where it is satisfied that a reasonable explanation is
available. That conclusion would be contrary to the express
terms of ss 32 and 34
including, in particular, the definitions of "eligible returns" and "eligible catch".


[21]    In effect,
the Review Committee has assumed the jurisdiction to override the
specific statutory requirements that the Catch Landing Return must
comply with the
Fisheries (Reporting) Regulation 1990 and must be given to the Chief Executive on
or before the fifteenth day after
the close of each applicable qualifying year. There is
no express authority to enable the Review Committee to exercise any discretion
and
I am satisfied that any implied authority would be inconsistent with the express
language of ss 32 and 34 and the Parliamentary
intention to achieve certainty and
finality as discussed by the Court of Appeal in Brace. Since the Review Committee
is a creature
of statute, it does not have any inherent jurisdiction which would enable
it to do what it purported to do.


Conclusion and Disposition


[22]    For the reasons stated, I conclude that the Review Committee wrongly
allowed the disputed catch return to be taken into
account in the allocation of the
first respondent's provisional catch history.


[23]    The decision of the second respondent is
set aside accordingly. There is no
basis for any reconsideration of the matter.


[24]    The Chief Executive does not seek costs
and there will therefore be no order
for costs.


                                                  ______________________________
                                             
              A P Randerson J
                                                          Chief High Court Judge



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