CRUSADER FISHERIES LTD V ENO
IN THE HIGH COURT OF NEW ZEALAND
NELSON REGISTRY
CRI-2007-442-000005
BETWEEN CRUSADER FISHERIES LIMITED
First Appellant
AND WARWICK JOHN LOADER
Second Appellant
AND MICHAEL LLOYD ENO (MARITIME NEW ZEALAND)
Respondent
Hearing: 10 December 2007
Counsel: T H A Spear for First and Second Appellants
D R Ferrier for the Respondent
Judgment: 11 December 2007
JUDGMENT OF WILD J
Introduction
[1] These appeals against sentence raise two points, one about the interpretation of s61, the other about the application of s410(3), of the Maritime Transport Act 1994 (the Act).
[2] The appeals are from a judgment of the District Court at Nelson on 28 March.
[3] Following the loss at sea with all hands of the fishing vessel Mi Jay, Maritime New Zealand (MNZ) (its Chief Investigator of Accidents, Mr M L Eno) prosecuted Crusader Fisheries Ltd and Mr Loader. Crusader was the owner of the Mi Jay, Mr Loader the sole director of Crusader.
[4] MNZ charged Crusader under s61(1)(a) of the Act that:
… it operated the fishing vessel “Mi Jay” in a manner causing unnecessary danger or risk to other persons.
[5] The charge against Mr Loader alleged that he:
… was a director of Crusader Fisheries Ltd, which operated the fishing vessel “Mi Jay” in a manner causing unnecessary danger or risk to other persons (s410(3) of the Act).
Background
[6] A very brief outline suffices for this appeal. The Mi Jay sailed from Nelson on 22 November 2005. It was lost at sea some time before 28 November, when its life raft was believed to have been deployed.
[7] On 6 December, Mr Loader contacted the rescue authorities, advising that the Mi Jay was overdue. He was unable to tell the rescue authorities anything about the whereabouts of the Mi Jay, beyond advising that it was the Master’s intention to fish the Mermoo Bank. The Mermoo Bank, part of the Chatham Rise, is about 75-90 nautical miles off the Canterbury coast.
[8] An aerial search using an RNZAF Orion ensued. Because no-one knew quite where to look, this search covered 26,000 square miles of ocean – an enormous area. Nothing was found.
[9] On 19 December the dead bodies of the two crewmen were found in the life raft, drifting 15 nautical miles south east of Kaikoura. The skipper was never found.
[10] The evidence indicated that the two seamen would still have been alive when the search began on 6 December.
The District Court decision
[11] Early in his decision the District Court Judge sets out ss 65 and 410(3):
65 Dangerous activity involving ships or maritime products
(1) Every person commits an offence who—
(a) Operates, maintains, or services; or
(b) Does any other act in respect of—any ship or maritime product in a manner which causes unnecessary danger or risk to any other person or to any property, irrespective of whether or not in fact any injury or damage occurs.
(2) Every person commits an offence who—
(a) Causes or permits any ship or maritime product to be operated, maintained, or serviced; or
(b) Causes or permits any other act to be done in respect of any ship or maritime product,— in a manner which causes unnecessary danger or risk to any other person or to any property, irrespective of whether or not in fact any injury or damage occurs.(3) Every person who commits an offence against subsection (1) or subsection (2) of this section is liable,
(a) In the case of an individual, to imprisonment for a term not exceeding 12 months or a fine not exceeding $10,000:
(b) In the case of a body corporate, to a fine not exceeding $100,000:
(c) In any case, to an additional penalty under section 409 of this Act.
Section 410(3):
(3) Where any body corporate is convicted of an offence against this Act, every director and every person concerned in the management of the body corporate shall be guilty of the like offence if it is proved—
(a) That the act that constituted the offence took place with his or her authority, permission, or consent; and
(b) That he or she knew or could reasonably be expected to have known that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
[12] The Judge noted that s65 creates an offence strict liability: Tell v Maritime Authority CA230/02 27 November 2002 at [17]. In short, s65 required proof only of the conduct constituting the offence, but a defendant could avoid liability by establishing that it probably was not at fault.
[13] The Judge noted that the allegation against both Crusader and Mr Loader was that each caused an unnecessary danger or risk to others.
[14] The Judge then confronted Mr Spear’s argument for Crusader and Mr Loader that s65(1)(a) applies only to the actual operator, and s65(1)(b) to other people who cause or permit. Mr Spear argued that, because s65 expressly separated the basis of liability, the definition of “operate” in s2 of the Act did not apply to s65:
operate, in relation to a ship, means to sail or use the ship, or cause or permit the ship to sail, be used, or be in any place, whether or not the person is present with the ship; and operating, operation, and operator have corresponding meanings:
[15] The Judge observed:
[20] It is clear that if to operate a ship for the purposes of s65(1) is to be given the narrow meaning contended for by Mr Spear of being actually in control of the ship, then the company could not be convicted. The Mi Jay put to sea on 22 November 2005 under the control of (its Master) Mr Rees.
[16] The Judge then gave careful consideration to Mr Spear’s argument. He accepted that applying the s2 definition of “operate” to s65 created “some surplusage in relation to ships”, in that it rendered s65(1)(b) redundant in relation to a ship. But, after referring to Burrows’ Statute Law in New Zealand (3rd edition), the Judge was satisfied that such minor tautology was not decisive against application to s65 of the s2 definition of “operate”. And the Judge preferred that interpretation because he regarded it as the purposive one which achieved the statutory purpose of holding all participants in the marine transport system responsible for their actions.
[17] This is the Judge’s conclusion on the interpretation point:
[31] In my view the context of s65(1)(a) does not require that the definition of “operates” in s2 have no application. I conclude that s65(1)(a) applies to a person who causes or permits a ship to sail or to be used.
[18] Upon that interpretation the Judge held that Crusader was liable under s65(1)(a), because:
[32] Crusader Fisheries Ltd, as the owner of the ship, has at the least permitted the ship to sail from Nelson and be used at sea. By entering into the agreement with Mr Rees, fitting the vessel out for longline fishing, settling on the area for fishing, it has caused the ship to sail and be used at sea. On that basis the company operated the Mi Jay on 22 November 2005.
[19] The Judge then turned to consider whether Crusader operated the Mi Jay on 22 November 2005 in a manner which caused unnecessary risk to others. His decision that it did is not under challenge in this appeal.
Application of s410(3)
[20] Turning to Mr Loader, the Judge noted that he was the sole director of Crusader. He directed the operation of the Mi Jay, and acted on Crusader’s behalf in engaging Mr Rees and entering into arrangements with him for the fateful fishing trip. The Judge continued:
[71] … The company could do nothing without Mr Loader acting on its behalf. It was Mr Loader’s failure to require reporting, and failure to check the qualifications of Mr Rees, which caused the company to operate the vessel in a manner which constituted an offence against s65, and operation in this manner was with his authority and permission and consent. This element is proved.
Decision
Interpretation of s65
[21] I respectfully disagree with the Judge’s interpretation of s65. But for the s2 definition of “operate”, Crusader would be liable only under s65(2)(a), for the reasons explained by the Judge.
[22] I consider the context of s65 excludes the application of the definition of “operate”, which the Judge gave that definition. By ‘context’, I refer to the internal context – to the framework and wording of s65. I refer particularly to the division of s65 into sub-section (1) dealing with direct operations and acts, and sub-section (2) dealing with causing or permitting others to operate and act.
[23] In the usual way, all the definitions in s2 of the Act, including the definition of “operate”, apply “unless the context otherwise requires”. I consider the context, as I have explained it, does “otherwise require”, and excludes the application of the definition.
[24] I resist interpreting s65 in a way which treats words, let alone a whole subsection, as surplusage. I prefer an interpretation which attributes to the drafter of s65 the intention to give all the words and sub-sections significance. That approach to interpretation is well established. It is referred to in Burrows’ Statute Law (3rd edition) at pp 216-217.
[25] On the basis that the charge against Crusader ought to have been brought under s65(2)(a), I inquired of Mr Spear whether he could oppose my amending the charge pursuant to s132(1)(a) Summary Proceedings Act, and if so on what basis. I gave Mr Spear some time to consider this. He opposed amendment on three grounds (and this is my note of what Mr Spear said):
a) The lack of a crucial element in the charge as laid goes to the heart of the charge and results in the charge being a nullity.
b) There are ramifications for the informant, which must take correct procedures under the Act.
c) Crusader was removed from the Register, but reinstated to permit it to prosecute this appeal.
[26] Some exchange with Mr Spear about each of these points satisfied me that there is nothing in any of them. My main concern was to ensure that the amendment I proposed did not prejudice Crusader in its defence. Having read through the evidence the Judge heard, and his decision, I am satisfied it would not. The evidence would have been no different if Crusader had faced a charge under s65(2)(a). The Judge’s reasoning and conclusions are equally appropriate to a charge under s65(2)(a).
[27] Accordingly, pursuant to s132(1)(a), I amend the conviction by substituting a conviction under s65(2)(a) of the Act.
[28] The Judge sentenced Mr Loader on 20 April but, on that day, adjourned sentencing Crusader, nominally to 31 May. He did that because it was unclear whether Crusader would benefit from insurance monies under the policy covering the Mi Jay and/or a GST refund. Mr Spear advised me that the insurer has declined to pay out, and that the GST refund was swallowed up by Crusader’s liabilities. Imposing any penalty on Crusader would thus be a pointless exercise. Although I do not think the Judge has formally indicated that no penalty will be imposed, no issue about sentence arises for me in relation to Crusader.
Application of s410(3)
[29] The Judge found both limbs of s410(3) proved.
[30] Mr Spear’s point on appeal is that MNZ did not prove that Crusader’s offence took place with Mr Loader’s knowledge. He contended that Mr Loader certainly did not allow the offending actions (the Mi Jay putting to sea with a Master who lacked the necessary qualifications, and without a reporting schedule) to be done with his active knowledge, authority or consent.
[31] Mr Spear relied on a decision of the District Court in MAF v Rehu-Tai Fisheries & Ors, DC MAS CRN 2035003987-4000 6 November 1992 in which Judge Robertson said:
Knowledge or mens rea is a clear ingredient of the charges.
…
Mens rea is explicitly spelled out in this section and rightly so. It is a serious matter indeed to saddle one person with the criminal act of another unless the matter is established to the highest standard of proof.
(pp 29, 30)
[32] The Judge was referring to the now repealed s105D Fisheries Act 1983, which was worded similarly to s410(3).
[33] With respect to Judge Robertson, his references to mens rea are not helpful. They suggest that MNZ needed to prove that Mr Loader intended Crusader to commit an offence. What s410(3)(b) requires is proof that Mr Loader knew or should have known of the offending actions and that he failed to take reasonable steps to prevent them.
[34] As Mr Ferrier pointed out, Crusader was convicted because of the acts and omissions of its sole director and proprietor, Mr Loader. The company had no ability to do – or not to do – anything other than through Mr Loader. It had no other directors or officers or employees. The illogicality of Mr Loader escaping liability for the very same acts and omissions which incurred liability for Crusader is obvious.
[35] Having read the evidence, I am entirely satisfied that the Judge correctly found the charge against Mr Loader made out.
[36] To avoid further inappropriate reliance on MAF v Rehu-Tai Fisheries, I point out that Judge Robertson’s judgment needs to be related to the facts he was dealing with. Rehu-Tai was charged with the taking and possession for sale of undersized crayfish. The skipper of the company’s fishing boat had taken the undersized crayfish to the company’s premises. There was no evidence that the directors of the company were present when the fish arrived at the company’s premises. Judge Robertson concluded that the marginally (by only a few millimetres) undersized crayfish could not readily have been detected in their holding tanks.
[37] That situation is altogether different from the position here, where Crusader and Mr Loader are essentially one and the same for relevant purposes.
[38] As Mr Ferrier pointed out, in Ministry of Fisheries v William Dunwoodie DC WGN 25 March 1998 Judge Ongley, having considered Rehu-Tai Fisheries, observed at 24:
Judge Robertson commented page 30 that it could not be said that the defendant director should have known that this offence was to be committed, and that the words of the section import a “pre-planned offence of which a director should have knowledge”.
Mr Burston for the prosecution submitted that such a construction was unduly narrow. It does appear from reading the judgment that the comment related to the particular facts of the case in which it was not proved that the director should have known the offence was intended, nor should have known that it was occurring. I do not think that the Judge'’ comment was intended to indicate such a narrow enquiry to be appropriate in all case.
Result
[39] Neither of the points taken on this appeal succeeds.
[40] The appeal is accordingly dismissed. The convictions of both Crusader and Mr Loader stand.
Solicitors: Spear & Co., Nelson for the First and Second Appellants
Stephanie Winson, Maritime New Zealand, Wellington for the Respondent