Smw Consortium (Golden Bay) Ltd v The Chief Executive of The Ministry of Fisheries Coa Ca431/2011

• Jurisdiction: New Zealand
• Judge: White J
• Judgment Date: 10 April 2013
• Neutral Citation: [2013] NZCA 95
• Docket Number: CA431/2011 CA454/2011
• Court: Court of Appeal
• Date: 10 April 2013

Between

SMW Consortium (Golden Bay) Limited

Appellant

and

The Chief Executive of the Ministry of Fisheries

First Respondent

Tasman District Council

Second Respondent

And Between

Challenger Scallop Enhancement Company Limited

Appellant

and

The Chief Executive of the Ministry of Fisheries

First Respondent

Tasman District Council

Second Respondent

And Between

Sanford Limited

Appellant

and

The Chief Executive of the Ministry of Fisheries

First Respondent

Tasman District Council

Second Respondent

Marlborough Aquaculture Limited

Third Respondent

SMW Consortium (Golden Bay) Limited

Third Respondent

Challenger Scallop Enhancement Company Limited

Fifth Respondent

[2013] NZCA 95

Court:

Ellen France, Wild and White JJ

CA431/2011

CA432/2011

CA454/2011

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal from a High Court decision concerning the interpretation of the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 (_ARA_) and the respondent's decision approving new areas of Golden and Tasman Bays as interim Aquaculture Management Areas (“AMA”) for mussel farming — appellants successfully sought judicial review of respondent's decision declining approval of two applications — whether the respondent had erred by not having regard to a wide range of qualitative and contextual matters under s40 ARA — whether the respondent had erred in applying a five per cent threshold of loss of catch as the level at which he could be satisfied that the _undue adverse effects_ test was reached — whether the respondent could have regard to future to likely effects of marine farms/AMAs that had been approved, even if aquaculture structures had not yet been erected.

Counsel:

J K MacRae and A Buchanan for SMW Consortium (Golden Bay) Limited

A G Stallard for Challenger Scallop Enhancement Company Limited

B A Scott and A Kraack for Sanford Limited

P A McCarthy and S J Ritchie for the Chief Executive of the Ministry of Fisheries

J C Ironside for Tasman District Council (leave to withdraw)

D J Clark for Marlborough Aquaculture Limited

G M Downing for Golden Bay Marine Farmers Consortium Limited as Intervener

A The application by the Chief Executive of the Ministry of Fisheries for leave to adduce further evidence on appeal is declined.

B The appeals are dismissed.

C There is no order for costs.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by White J)

Table of Contents

	Para No
Introduction	[1]
Statutory background	[8]
Factual background	[18]
The six issues on appeal	[22]
Issue (1) – Does the word “undue” in the definitions of “determination” and “reservation” necessarily imply a wider inquiry beyond the matters specified in s 40 of the Transitional Act?	[24]
Issue (2) – Did the Chief Executive correctly apply the word “satisfied” in the definitions for the purposes of s 38 of the Transitional Act?	[32]
Issue (3) – Was the Chief Executive correct in applying a five per cent threshold of loss of catch as the level at which he could be satisfied that the “undue adverse effects” test was reached?	[44]
Issue (4) – In assessing the exclusion of fishing within an interim AMA under s 40(d), was the Chief Executive required to have regard only to the area of the interim AMAs or the area likely to be occupied by structures within the interim AMAs?	[59]
Issue (5) – When assessing the cumulative effects of previous (a) all the interim AMAs when making his decision about each of them; and Aquaculture activities under s 40(g), should the Chief Executive have taken into account as future potential effects: (b) aquaculture activities for which consents had been given, but where no aquaculture activity had actually commenced?	[70]
Issue (6) – When making a decision with respect to multiple interim AMAs, was it lawful to rank the interim AMAs?	[87]
Result	[95]

Introduction

1 These appeals relate to the interpretation of a number of provisions in the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 (the Transitional Act) as they applied to a decision of the Chief Executive of the then Ministry of Fisheries (the Chief Executive) in December 2008 approving new areas of Golden and Tasman Bays as “interim Aquaculture Management Areas” (interim AMAs) for mussel farming.

2 The Chief Executive's decision, which was called an aquaculture decision under s 38 of the Transitional Act, was made at the request of the Tasman District Council in respect of applications by Marlborough Aquaculture Ltd (Marlborough), Sanford Ltd (Sanford), SMW Consortium (Golden Bay) Ltd (SMW) and Golden Bay Marine Farmers Consortium Ltd (Golden Bay). The effect of the Chief Executive's aquaculture decision was to approve three of the five new areas sought for mussel farming by SMW and the one new area sought by Golden Bay, but to decline the areas sought by Marlborough and Sanford.

3 The Chief Executive's decision was challenged in the High Court by way of appeal 1 and judicial review 2 brought by the unsuccessful applicants (SMW, Marlborough and Sanford) and by Challenger Scallop Enhancement Company Ltd (Challenger), which represented scallop fishers in Golden and Tasman Bays and opposed any new areas for mussel farming. Golden Bay appeared as an affected party to support the Chief Executive's decision.

4 In the course of the High Court hearing the parties agreed that the Chief Executive's decision had been made in error and would need to be remade. 3 The error related to the use made by the Chief Executive of what was known as “the Scallop Model” for the purpose of “ranking” the various zones and subzones in the interim AMAs. As a result of this error, the High Court ultimately allowed the appeals, granted the judicial review applications and remitted the aquaculture decision back to the Chief Executive to be remade.

5 Before doing so, however, the High Court, at the request of the parties, heard and determined issues relating to the interpretation of the Transitional Act, including those that are now the subject of appeal to this Court. 4 The High Court determined these interpretation issues in order to assist the Chief Executive when remaking the aquaculture decision. 5 We agree that it was appropriate for the High Court to do so and that it remains appropriate for us to do likewise on appeal.

6 On appeal the Chief Executive sought leave to adduce further evidence in the form of an updated version of the Scallop Model. As the further evidence is challenged by the other parties and is not relevant to the determination of the issues by this Court, leave to adduce it is declined.

7 To understand and determine the issues of interpretation raised on appeal, we need to set out briefly the relevant statutory and factual background before addressing each of them in turn.

Statutory background

8 The Transitional Act, which came into force on 1 January 2005, contained provisions for the transition from the previous statutory regime governing marine farming applications to the new regime, which also came into force on that date.

9 The previous statutory regime required two forms of authorisation: coastal permits under the Resource Management Act 1991 (the RMA) 6 and marine farming permits under the Fisheries Act 1983. 7 As a result of considerable uncertainty as to the relationship between the two approval processes and the competing interests of proposed marine farmers both between themselves and with existing fishers, applications backed up around the country. This ultimately led in March 2002 to the imposition of a moratorium on the consideration of coastal permit applications under the RMA. 8 The moratorium expired on 1 January 2005 when the new regime came into force. 9

10 In essence the new regime substituted a single planning process controlled by the relevant regional council under the RMA, but constrained to AMAs previously

approved by the Chief Executive in aquaculture decisions. 10 The new regime contemplated two types of aquaculture decisions in relation to an AMA

• (a) “a determination”, namely a decision by the Chief Executive that he or she was satisfied that the AMA would not have “an undue adverse effect on fishing”; or

• (b) “a reservation”, namely a decision by the Chief Executive that he or she was not so satisfied.

11 If a determination was made, it was then possible for the regional council to grant by tender an authorisation to an intending marine farmer which conferred the right to apply for the necessary coastal permit without further reference to affected fishers. 11

12 If, however, a reservation was made, an authorisation could then only be offered by the regional council to persons who had entered into “aquaculture agreements” with the commercial fishers affected. 12 An aquaculture agreement involved existing fishers consenting, in return for compensation, to a new aquaculture activity being established in an existing fishery. 13 Only persons holding an aquaculture agreement could apply for a coastal permit. If the holder of the aquaculture agreement were successful in obtaining a coastal permit, then the reservation would be deleted from the regional coastal plan. 14

13 The effect of the Chief Executive's aquaculture decision therefore determined whether existing fishers 15 received any compensation for the loss of space in which they could fish. 16 If a determination was made, they would not receive any

compensation because an aquaculture agreement was not required, whereas if a reservation was made, they would receive compensation in the event of an aquaculture agreement being negotiated. 17

14 The purpose of the Transitional Act was to repeal the previous regime and provide a process for bringing existing marine farming applications into the new regime. 18 The first step in the process involved areas that had already been designated in regional...