PETROMONT HOLDINGS LIMITED v DIRECTOR-GENERAL OF THE MINISTRY FOR PRIMARY INDUSTRIES [2021] NZCA 567

PETROMONT HOLDINGS LIMITED v DIRECTOR-GENERAL OF THE MINISTRY FOR PRIMARYINDUSTRIES [2021] NZCA 567 [28 October 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA45/2021[2021] NZCA 567BETWEEN PETROMONT HOLDINGS LIMITEDAppellantAND DIRECTOR-GENERAL OF THEMINISTRY FOR PRIMARY INDUSTRIESRespondentHearing: 28 July 2021Court: Brown, Clifford and Collins JJCounsel: D W Grove for AppellantN C Anderson and S J Jensen for RespondentJudgment: 28 October 2021 at 10.30 amJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the respondent costs for a standard appeal on aband 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 amendedstatement of claim of the appellant (Petromont) seeking judicial review of permittingdecisions made in 1993 under s 63(6) of the now-repealed Fisheries Act 1983(the 1983 Act).1 Petromont's appeal concerns the interpretation of s 329 of theFisheries Act 1996 (the 1996 Act) which validated certain decisions of theDirector-General of Agriculture and Fisheries (the Director-General) and his delegatesrelating to fishing permits granted under ss 63 and 64 of the 1983 Act. A second issueconcerns Petromont's claim of a legitimate expectation to pursue a challenge to adecision of the Director-General by way of review.Statutory context[2] Until 1 October 2004 the scampi fishery was managed outside of the quotamanagement system (QMS) through fishing permits issued under ss 63 and 64 of the1983 Act. When the QMS was extended to include the scampi fishery, quota holdingswere allocated based on recorded catch history for the fishing years commencing1 October 1990 and 1 October 1991.2[3] Section 63(11) of the 1983 Act made provision for a statutory review of adecision made by a delegate of the Director-General:Where any decision is made under this section by any officer acting under thedelegated authority of the Director-General, the applicant for the permit orpermit holder, as the case may be, shall be entitled to have the decisionreviewed by the Director-General or by an officer designated by theDirector-General who was not involved in the making of the original decision.[4] The 1983 Act was repealed by the 1996 Act, s 329 of which came into force on1 October 1996. It provides:3329 Validation of certain decisions relating to permits(1) Every decision and every purported decision of the Director-Generalof Agriculture and Fisheries—(a) made in respect of the issue, variation, refusal, revocation, orcancellation of any fishing permit under section 63 or anyspecial permit under section 64 of the Fisheries Act 1983; and(b) made before 1 October 1992—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 differentoffices referred to in s 329(1) and (2): see Ministry of Agriculture and Fisheries (Restructuring)Act 1995.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 ofAgriculture and Fisheries)—(a) made in respect of the issue, variation, refusal, revocation, orcancellation of any fishing permit under section 63 or specialpermit under section 64 of the Fisheries Act 1983; and(b) made on or after 1 October 1992 but before thecommencement 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 decisionreferred to in that subsection if the decision or purported decision isbeing challenged in or is otherwise subject to any court proceedingscommenced before the date of commencement of this section.(4) Subsection (2) does not apply to a decision or purported decisionreferred to in that subsection if—(a) the decision or purported decision is being challenged in or isotherwise subject to any court proceedings commencedbefore the date of commencement of this section; or(b) the applicant for the permit which was the subject of adecision or purported decision referred to in that subsection—(i) has, before the commencement of this section, lodgedwith the chief executive; or(ii) within 12 months after the commencement of thissection, lodges with the chief executive—a notice requesting the chief executive to review that decisionor purported decision.[5] The decision to validate past decisions was made because the legislature wasconcerned that challenges to previous decisions should not undermine the introductionof new species into the QMS.44 Petromont Fishing Co Ltd v Director-General of the Ministry of Primary Industries [2018] NZCA422 at [9].Factual background[6] On 29 September 1992 (just within the period by reference to which the scampiQMS allocation was based) Petromont was granted a permit under s 63 to take scampiin respect of quota management areas (QMAs) 1 to 9, subject to certain conditionsimposed as a means of managing the scampi fishery. The permit was granted bya 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 (exceptQMAs 4 and 6) for the reason that Petromont had made "no landing of certain non-ITQfishstocks" listed in the permit. That decision was made by another departmentalofficer also acting under delegated authority.[7] Petromont successfully sought judicial review of the decisions both to imposecertain permit conditions and subsequently to revoke the permit.5 The High Courtdeclared invalid the revocation of Petromont's permit to fish scampi and theconditions, setting aside both decisions. The Director-General personallyreconsidered the matter and on 15 September 1993 he notified Petromont of hisdecision pursuant to s 63(6) of the 1983 Act to impose conditions that were the sameas those that had previously applied.[8] The validation of decisions by s 329 is subject to exceptions that differdepending on the time period within which the decision was made, either (a) before 1October 1992;6 or (b) on or after 1 October 1992 but prior to 1 October 1996.7 Thedecision made on 15 September 1993 fell into the second category and therefore theonly exceptions are those found in s 329(4).[9] Petromont did not challenge the Director-General's 15 September 1993decision by a Court proceeding. Instead, on 1 October 1997 in purported reliance ons 329(4)(b)(ii) Petromont gave notice to the chief executive of the Ministry ofFisheries of its request for "a review of decisions and purported decisions of theDirector General of Agriculture and Fisheries".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).[10] Because a difference of view emerged concerning the scope of suchadministrative review, Petromont filed an application for judicial review seekingdeclarations both as to the scope of the administrative review and concerningprocedural aspects of that process. It is common ground that the outcome of thatlitigation was that the administrative review sought on 1 October 1997 could notproceed. As Clark J held in the High Court, the right to such a review was granted bys 63(11) of the 1983 Act and was only available in respect of decisions of delegates ofthe 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 didnot itself confer a right to commence court proceedings or a right to request anadministrative review. 8[11] On 8 February 2019 Petromont commenced the current judicial reviewproceeding 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 toschedule D to the plaintiff's permit (conditions which the plaintiff hadsuccessfully challenged by way of judicial review) and to substitutethose revoked conditions with a new set of identical conditions whichcontinued to unfairly and unlawfully prejudice the plaintiff; and(b) The inconsistent, unfair and unlawful decisions not to allocate catchlimits in the 1992-93 fishing year, and thereafter despite the interimcatch limits being fully caught.The decision at (a) had been the subject of Petromont's attempted administrativereview of 1 October 1997 which this Court had ruled was not available.[12] Unsurprisingly the respondent's rejoinder was that the impugned decisions hadbeen 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)); and8 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 ofthe Ministry of Primary Industries, above n 4.(b) permitting decisions of the respondent's predecessors (as opposed tothose of delegates) were not amenable to administrative review by thechief 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 theextent 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: theinterpretation 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 bechallenged in any way in the future) or does it save a decision from validationonly 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 validatingprovisions followed by two specific exceptions, it was apparent that the exceptionswere of limited scope.10 Hence previous permitting decisions could be challengedonly by a legal proceeding commenced before 1 October 1996 or by an administrativereview by the chief executive if requested by 1 October 1997.[16] The Judge considered this interpretation was supported both by the legislativehistory of s 329 and by observations of this Court in United Fisheries Ltd v ChiefExecutive Ministry of Fisheries.11 She concluded that in enacting s 392(4) Parliamentintended to limit not only the timeframe within which a decision or purported decisionof the Director-General could be challenged but also the manner of challenge, beingthose legal proceedings or reviews specified to s 329(4).129 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] NZAR 707(CA) at [31].12 At [46].[17] The Judge also concluded that the word "review" in s 329(4)(b) was intendedto mean only a statutory review — in the Judge's own words "an internaladministrative review". It did not include an application for judicial review.13The legitimate expectation claim[18] Petromont claimed that prior to this Court's 2018 judgment both parties hadproceeded on the shared understanding that s 329(4) preserved a right ofadministrative review of decisions made either by the Director-General or by hisdelegate. Petromont maintained that, but for that mutual assumption, it would havetaken steps prior to 1 October 1996 to seek judicial review of the 15 September 1993decision. It argued that, notwithstanding the enactment of s 329, it had a legitimateexpectation, in the nature of a substantive right, to the completion by the respondentof the administrative review which Petromont had requested in respect of theDirector-General's 15 September 1993 decision.[19] In the Judge's view there were significant obstacles to such a claim whichrendered it unnecessary to reach a firm view on whether substantive legitimateexpectation exists in New Zealand or the appropriate formulation of the test.14 Thefirst obstacle was that the alleged legitimate expectation was inconsistent with thestatutory scheme.[20] A second difficulty was Petromont's inability to establish reliance ona promise by or practice of the respondent.15 Because Petromont's notice seeking areview was filed on 1 October 1997, it was only from that point that Petromont couldseek to rely on a representation that the review would proceed. However its claim aspleaded did not rely on alleged conduct by the respondent after that date.Consequently, as formulated, Petromont's legitimate expectation claim could notprevent s 329 from operating to validate the decision of 15 September 1993.13 At [47]–[48].14 At [64].15 At [68].Issues on appeal[21] The parties agreed that the appeal against the strike out of the claim, to theextent 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 theFisheries Act 1983 before 1 October 1996 in s 329(2) of theFisheries Act 1996 was subject only to allowing thechallenges set out in s 329(4) of the Fisheries Act 1996 tocontinue; and(b) accordingly, any court challenge in respect of those decisionshad 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 thatdecisions validated by s 329 of the Fisheries Act 1996 wouldbe challenged notwithstanding the validating effect of thatsection; and(b) any such legitimate expectation cannot be given effect tobecause it is contrary to the scheme of the Fisheries Act 1996and in particular the validating effect of s 329 of the FisheriesAct 1996?The interpretation of s 329[22] Mr Anderson for the respondent supported the Judge's interpretation of the textof s 329. He argued that the exemption from validation of certain decisions whichwere subject to ongoing challenges provided a strong indication that the purpose ofthe exemption was only to enable those particular challenges to continue. It followedthat the proper interpretation was that such decisions could only be challenged via themeans that saved them from validation in the first place.[23] He contended that such an interpretation was consistent with Parliament'sapparent intent. He drew attention to the fact that, although the first version of theFisheries Bill 1994 would have validated all decisions made under ss 63 and 64 of the1993 Act,16 the Primary Production Committee amended the clause to its currentform.17 In reporting back on the Bill, the Committee explained:18There is a need to validate permitting decisions so that appeals do notundermine the introduction of new species into the QMS. However, this canbe achieved by validating permitting decisions up to 30 September 1992, theperiod including the catch history years. We consider that appeals againstpermit decisions after 30 September 1992 should be able to be lodged up toone year after the Bill's enactment. Any proceedings before thecommencement of the Bill should be allowed to continue. This is providedfor in clause 329.[24] Hence Mr Anderson submitted that the intention of the amendment was toallow 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 theCommittee Report referred to challenges as "appeals". He submitted that that choiceof word did not reflect the restrictive view of s 329(4)(b) whereby only anadministrative 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 thatthe Director-General's 15 September 1993 decision could be challenged by serving anotice up to one year after the 1996 Act came into force. He suggested that what waslikely 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 tiedback to s 63.[26] Mr Anderson made the point that, were s 329 to be interpreted in a way thatenabled a decision to be challenged by any means once an exception to validationapplied, that would frustrate Parliament's intention by sapping the section of nearly allof its validating effect. Any person who wished to challenge a decision through thecourts but failed to do so before 1 October 1996 could simply give notice toadministratively review the decision prior to 2 October 1997 and thereafter initiatecourt proceedings at any time. Mr Anderson also drew attention to the general judicial16 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.support for the respondent's interpretation of s 329 by this Court in Jenssen vAttorney-General19 which was subsequently endorsed by this Court in relation toss 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 advancedby Mr Anderson. Section 329(4) identifies two categories of challenge to priorpermitting decisions which must be on foot by specified dates. The intent of theprovision is that such challenges may be pursued to determination notwithstanding thevalidation 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 decisionsof delegates of the Director-General under s 63(11) of the 1983 Act. The 15 September1993 decision of the Director-General not having been the subject of a courtproceeding by 1 October 1996, the saving from validation in s 329(4) could not availPetromont.[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 establisha 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 applicantclaims;(3) the decision-maker knew of the representation and chose to act contraryto it;(4) the applicant has suffered some detriment by relying on therepresentation; and19 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, Innovationand Employment [2014] NZHC 1709, [2014] NZAR 1091 at [50].(5) the decision-maker's conduct cannot be objectively justified as being inthe public interest and a proportionate response to the circumstances ofthe case.[30] He contended that the requisite undertaking "was given through the Report andthe parties' understanding of the legislation". Petromont had a legitimate expectationthat its entitlement to "appeal" would be preserved by the saving provision. Such anexpectation was said to be consistent with its understanding of s 329 and theCommittee Report.[31] Mr Grove argued that the recognition of such a legitimate expectation is notcontrary to the statutory scheme when correctly understood. He submitted:34. In relation to the Decision, the subject of the appeal, the purpose andscheme was to allow appeals so long as the appeal was lodged up toone year after the Bill's enactment. That right of appeal in thelegislation is obtained by the lodging of the review notice andPetromont did exactly that. There was no distinction made orconsidered by the Committee or Parliament between delegated andnon-delegated decisions.35. The statutory scheme was to allow a right of appeal by the filing ofthe notice. As such, the legitimate expectation is not inconsistent withthe statutory scheme. It cannot be said to be requiring public bodiesto act contrary to the law. The whole purpose of the savings was toallow an appeal if lodged within a year. That is compatible with thelegislative 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 proceedingought 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 argumentadvanced in the High Court, where reliance was placed on interactions with theMinistry after 1 October 1996 as justifying the decision to not apply for judicial reviewprior to that date. In this Court Petromont's focus is on the statements in theCommittee 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 ismisconceived. Irrespective of what either party may have perceived the effect of s 329to be, the meaning of that provision is as objectively construed by the courts. A claimof legitimate expectation cannot be advanced on the footing that s 329 was understoodto mean something different from the interpretation adopted by this Court.[34] With reference to the alternative proposition that the expectation derived fromthe terminology in the Committee Report, Mr Anderson responded, correctly, thatactions of the Committee cannot be attributed to the Ministry, or to the Crown moregenerally, so as to render it unfair for the Ministry to decline to carry out anadministrative review. He draws attention to this Court's observations in Green vRacing Integrity Unit Ltd that the foundation of the legitimate expectation doctrine isthat a public authority should be bound by its own undertakings when it has promisedto follow a certain procedure, it being in the interests of good administration that thepublic authority should act fairly and implement its promise.23[35] However the hurdle which Petromont faces is more fundamental than any issuerelating to the identity of the alleged promisor. The point is simply that a claim oflegitimate expectation cannot be invoked to undermine parliamentary sovereignty andto seek to compel public authorities to act contrary to law. A claim cannot be broughtin the Courts to secure such an objective. Thus the chief executive cannot be requiredto conduct an administrative review of a decision of the Director-General. Nor can ajudicial review proceeding filed after 1 October 1996 be entertained on the footingthat such is required in order to redeem what has been discovered to be a misconceivedelection to pursue an administrative review.[36] To recapitulate, the insuperable difficulty for Petromont is that by s 329Parliament validated the 15 September 1993 decision. Consequently any Courtproceeding 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 administrativereview because, as this Court has held, such reviews derived from s 63(11) of the 1983Act and only applied to delegated decisions. The 15 September 1993 decision was notsuch a decision.23 Green v Racing Integrity Unit Ltd [2014] NZCA 133, [2014] NZAR 623 at [15].Result[37] The appeal is dismissed.[38] The appellant must pay the respondent costs for a standard appeal on a band Abasis and usual disbursements.Solicitors:Foy & Halse, Auckland for AppellantCrown Law Office, Wellington for Respondent