Federal Court of Australia

Minister for the Environment v Northern Seafoods Pty Ltd [2022] FCA 656

ORDERS

BY CONSENT, THE COURT ORDERS THAT:

1.    It be declared that the respondent, Northern Seafoods Pty Ltd, contravened s 354(1)(f) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) on 13 occasions between 4 and 10 September 2018 by the skipper and crew of the Australian Fishing Vessel Starcat, who were employed by the respondent, conducting 13 commercial demersal trawl fishing shots in the Multiple Use Zone of the Oceanic Shoals Marine Park where trawl fishing was not permitted by the North Marine Parks Network Management Plan 2018.

2.    Within 90 days of the making of this order, the respondent pay to the Commonwealth of Australia a pecuniary penalty in the sum of $95,000 pursuant to s 481 of the EPBC Act for the contraventions of s 354(1)(f) of the EPBC Act described in order 1 above.

3.    Within 90 days of the making of this order, the respondent pay a contribution to the applicant’s costs of the proceeding in the agreed lump sum of $17,500.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1    The applicant, the Minister for the Environment, seeks a declaration and pecuniary penalties against the respondent, Northern Seafoods Pty Ltd, for contraventions of s 354(1)(f) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). The Minister is assisted in their functions by what is now called the Department of Agriculture, Water and the Environment.

2    The Minister alleges that Northern Seafoods contravened the EPBC Act on 13 occasions between 4 and 10 September 2018 by the skipper and crew of the Australian Fishing Vessel Starcat, who were employed by Northern Seafoods, conducting 13 commercial demersal trawl fishing shots in the Multiple Use Zone of the Oceanic Shoals Marine Park where trawl fishing was not permitted by the North Marine Parks Network Management Plan 2018.

3    Northern Seafoods filed a defence admitting to the 13 contraventions in full. The parties thereafter filed a statement of agreed facts and a supplementary statement of agreed facts and, more recently, joint submissions in support of an agreed declaration of contravention and a pecuniary penalty. It is very much to their credit that they have approached the proceeding in this way. As will be seen, that approach by Northern Seafoods is particularly significant in the conclusion that I have reached that it is appropriate to make orders reflecting the parties’ agreement.

The Marine Park and Management Plan

4    As explained in the Management Plan, Commonwealth reserves, including Australian Marine Parks, are declared by proclamation by the Governor-General under the EPBC Act. The EPBC Act and the EPBC Regulations 2000 (Cth) provide the legal basis and framework for management of Commonwealth reserves. The International Union for the Conservation of Nature (IUCN) sets out guidelines for categorising protected areas, which Australia and many other countries have adopted as a national standard. The EPBC Act requires Commonwealth reserves, and any zones into which a reserve is divided, to be assigned to one of the seven categories prescribed by the EPBC Regulations which correspond to the categories identified by the IUCN.

5    Australian Marine Parks are located in Commonwealth waters that start at the outer edge of state and territory waters, generally three nautical miles from the shore, and extend to the outer boundary of Australia’s exclusive economic zone, 200 nautical miles from the shore.

6    The North Marine Parks Network covers 157,480km² comprising eight marine parks, one of which is the Oceanic Shoals Marine Park. The Marine Park is a Commonwealth reserve declared by proclamation on 14 December 2013 under Part 15, Division 4, Subdivision B of the EPBC Act.

7    The Marine Park is located west of the Tiwi Islands, approximately 155km north-west of Darwin, Northern Territory, and 305km north of Wyndham, Western Australia. It extends to the limit of Australia’s exclusive economic zone and covers an area of 71,743km².

8    Management plans, prepared and approved in accordance with Subdivision E of Division 4 of Part 15 of the EPBC Act, are a key mechanism used by the Commonwealth to regulate, limit and/or prohibit activities in Commonwealth reserves. Management plans are supported by the operation of ss 354 and 354A of the EPBC Act, which, subject to certain specified exceptions, provide for the imposition of civil penalties and criminal sanctions in respect of activities carried out within a Commonwealth reserve otherwise than in accordance with a management plan in operation for the reserve.

9    In August and September 2018, the Management Plan was in effect for the Marine Park. The Management Plan was made under s 370 of the EPBC Act and commenced on 1 July 2018.

10    The Management Plan states:

The Oceanic Shoals Marine Park is significant because it contains habitats, species and ecological communities associated with the Northwest Shelf Transition. It contains four key ecological features: carbonate bank and terrace systems of the Van Diemen Rise; carbonate bank and terrace systems of the Sahul Shelf; pinnacles of the Bonaparte Basin; and shelf break and slope of the Arafura Shelf (all valued as unique seafloor features with ecological properties of regional significance). The Marine Park is the largest marine park in the North Network.

…

The Marine Park supports a range of species, including species listed as threatened, migratory, marine or cetacean under the EPBC Act. Biologically important areas within the Marine Park include foraging and internesting habitat for marine turtles.

11    The objectives of the Management Plan are stated as to provide for:

a)    the protection and conservation of biodiversity and other natural, cultural and heritage values of marine parks in the North Network; and

b)    ecologically sustainable use and enjoyment of the natural resources within marine parks in the Northern Network, where this is consistent with objective (a).

12    The Management Plan states that zoning and related rules for managing activities are important tools for managing marine parks to ensure protection of marine habitats and species, while enabling use. The zones established by the Management Plan in marine parks in the North Marine Parks Network include a “Special Purpose Zone”, “Multiple Use Zone”, “Habitat Protection Zone” and “National Park Zone”. Of relevance to this application is the Multiple Use Zone which is an IUCN category VI “managed resource protected area”. The summary states that it is:

managed to allow ecologically sustainable use while conserving ecosystems, habitats and native species. The zone allows for a range of sustainable uses, including commercial fishing and mining where they are consistent with park values.

13    The Marine Park’s Multiple Use Zone covers 39,964km².

14    The Multiple Use Zone of the Marine Park contains the terrace system of the Sahul Shelf. This is a regionally significant feature and contains terraced foraging habitat for marine turtles and sawfish.

15    Although other forms of commercial fishing that do not impact the seafloor could be conducted with authorisation in the Multiple Use Zone under the Management Plan during the relevant period, commercial trawl fishing (demersal or midwater) was prohibited in the zone because it may compromise the intended level of protection to the seabed and marine species in the area. Demersal trawling involves the net being let out from the stern of the vessel and towed along the sea floor for a period of time, often hours, before being hauled up toward the vessel.

The statutory prohibition

16    Section 354(1)(f) of the EPBC Act states:

354     Activities that may be carried on only under management plan

(1)    A person must not do one of the following acts in a Commonwealth reserve except in accordance with a management plan in operation for the reserve:

…

(f)      take an action for commercial purposes.

Civil penalty:         

(a)      for an individual—500 penalty units;

(b)      for a body corporate—5,000 penalty units.

17    At the time of the contraventions in this case, in 2018, 5,000 penalty units, being the statutory maximum for a body corporate, equated to $1,050,000.

18    Section 481 provides for the power of the court to order a person to pay a pecuniary penalty for contravening a civil penalty provision:

481     Federal Court may order person to pay pecuniary penalty for contravening civil penalty provision

Application for order

(1)     Within 6 years of a person (the wrongdoer) contravening a civil penalty provision, the Minister may apply on behalf of the Commonwealth to the Federal Court for an order that the wrongdoer pay the Commonwealth a pecuniary penalty.

Court may order wrongdoer to pay pecuniary penalty

(2)     If the Court is satisfied that the wrongdoer has contravened a civil penalty provision, the Court may order the wrongdoer to pay to the Commonwealth for each contravention the pecuniary penalty that the Court determines is appropriate (but not more than the relevant amount specified for the provision).

Determining amount of pecuniary penalty

(3)     In determining the pecuniary penalty, the Court must have regard to all relevant matters, including:

(a)     the nature and extent of the contravention; and

(b)     the nature and extent of any loss or damage suffered as a result of the contravention; and

(c)     the circumstances in which the contravention took place; and

(d)     whether the person has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct.

19    Pursuant to s 482, s 354 is a civil penalty provision for the purposes of s 481.

Northern Seafoods’s commercial fishing business

20    In August and September 2018, Northern Seafoods was engaged in the business of commercial fishing as part of a group of companies owned and controlled by Horst Dieter Fischer, relevantly including the company that owned the Starcat, Fischer Wholesale Pty Ltd. Mr Fischer was a director of Northern Seafoods and Fischer Wholesale, and he and his wife were the sole shareholders of those companies. Northern Seafoods was responsible for the operation of the Starcat.

21    Mr Fischer held a Timor Reef Fishery License (issued under the Fisheries Act 1988 (NT)) and a Fisheries Act Special Permit. The License authorised Mr Fischer to conduct commercial trawl fishing in the area specified in the License known as the Timor Reef Fishery for the period 1 July 2016 to 30 June 2021. Northern Seafoods employed skippers and fishing crews for the Starcat, and engaged contractors for support operations.

22    In August and September 2018, Anthony Francis Zaccagnini was a professional fisherman employed by Northern Seafoods to conduct commercial fishing on behalf of Northern Seafoods, including as skipper of the Starcat.

23    John Kavadis was the shore manager of the Starcat, an employee of Fischer Wholesale and an agent of Northern Seafoods.

Notice and warnings given to Northern Seafoods to not fish in the Multiple Use Zone

24    On 27 June 2018, Mr Fischer received an email from the Acting Director of National Parks, Parks Australia, alerting Northern Seafoods that from 1 July 2018 five new management plans, including the Management Plan, would come into effect, and providing information on the relevant class approvals and compliance.

25    The Starcat had on board a Vessel Monitoring System (VMS) which provided the Department with continuous information as to the precise location of the vessel. Consequently, the Department was able to identify the incursion of the Starcat into the Marine Park.

26    On 17 August 2018, a Senior Marine Parks Officer had a telephone discussion with Mr Kavadis, the shore manager, and advised him that in the Department’s view, on 14 and 15 August 2018, the Starcat had engaged in commercial trawl fishing in the Multiple Use Zone of the Marine Park. The Officer warned Mr Kavadis that trawl fishing was not permitted in the Multiple Use Zone and strongly advised Mr Kavadis to familiarise himself with the Management Plan.

27    On 27 August 2018, a Warning Notice was emailed by a Senior Marine Parks Officer to Mr Fischer and Mr Kavadis. The Warning Notice stated the following:

The authorised officer whose name appears below has reasonable grounds for believing that on one or more occasions between 13 and 15 August 2018 the Australian Fishing Vessel (AFV) STARCAT operating under the License Number A18/5104, carried out commercial fishing operations in the Multiple Use Zone (MUZ) of the Oceanic Shoals Marine Park, in breach of Conditions of the Class Approval for Commercial Fishing made by the Director of National Parks regarding the North Marine Parks Network Management Plan 2018 which commenced on 1 July 2018 under Section 370 of the Environment Protection and Biodiversity Conservation Act 1999.

…

Alleged Contravention:

…

•    On 15 August 2018 the AFV STARCAT was reported to be within the Multiple Use Zone.

•    Analysis of the Vessel Monitoring System (VMS) identified fishing pattern activity matching that of Demersal Trawl as being activity contrary to the Class Approval and by virtue of this the Northern Marine Parks Network Management 2018.

•    It is further noted that Company representative (John Kavadis) made admissions on 17 August 2018 of commercial fishing operations (Demersal Trawl) to Senior Marine Parks Compliance Officer...

Enforcement Action:

Contravention of s. 354 carries a maximum civil penalty of $1,050,000 for a body corporate.

On this occasion it has been decided that no further action will be taken.

Any future report of a contravention of s. 354 of the EPBC Act by the FV STARCAT may be referred for investigation and possible legal action.

The contravening fishing trip by the Starcat

28    During the period 31 August to 13 September 2018, the Starcat was used by Northern Seafoods to conduct a fishing trip of commercial trawl fishing in the Timor Reef Fishery. During the fishing trip, Mr Zaccagnini was skipper of the Starcat and in charge of the Starcat’s crew. As mentioned, Mr Kavadis was the shore manager of the Starcat.

29    During the fishing trip, and in the period between 4 and 10 September 2018, the Starcat’s commercial trawl fishing activities included 13 trawl fishing shots within the Multiple Use Zone. Twelve of those shots were conducted wholly within the Multiple Use Zone, and one was conducted partially within the Multiple Use Zone.

30    On 7 September 2018, Mr Kavadis emailed the Starcat reminding the vessel to stay out of the Marine Park.

31    At approximately 3:40pm on 8 September 2018, the Senior Marine Park Officer telephoned Mr Kavadis and informed him that the Starcat had been identified as fishing in the Marine Park. The Officer requested that Mr Kavadis contact the crew and instruct them to cease fishing and leave the Marine Park. The Department’s date and time-stamped aerial photographs of the Starcat undertaking trawling in the Multiple Use Zone on 8 September 2018 were tendered.

32    Prior to the telephone call made by the Officer, 11 of the 13 contravening trawl shots had already been conducted.

33    At approximately 4:25pm on 8 September 2018, Mr Kavadis called the Officer and stated that he had instructed the skipper and crew of the Starcat to stop fishing and to leave the Marine Park, and that the crew had done so.

34    At 4:39pm on 8 September 2018, Mr Kavadis sent an email to the Starcat titled “Marine Park Coordinates” which contained coordinates and stated “Please stay out of this area as discussed”. One digit of the coordinates in the email was incorrectly recorded.

35    On 10 September 2018, the Starcat conducted a further two contravening trawl shots, taking the total to 13. That was apparently as a consequence of the error in the coordinates in Mr Kavadis’s email to the Starcat two days earlier.

36    During the contravening trawl shots, a total of 6,060 kilograms of fish was caught and kept, including Goldband Snapper, Saddletail Snapper, Crimson Snapper, Rosy Snapper, Painted Sweetlips, Moses Snapper, Red Emperor, Frypan Bream, Cod, Redspot Emperor, Mangrove Jack, Trevallies, Red Bullseyes and Robinson’s Seabream. A further 2,640 kilograms of fish was caught and discarded during the contravening trawl shots, including Stingrays, Batfishes, Whitespotted Guitarfish, Sharks, Trevallies, Catfish, Chinamanfish, Finny Scad, and Hussar.

37    The fish from the fishing trip, including the 6,060 kilograms of fish caught and kept during the contravening trawl shots, was later unloaded at Darwin and sold. The fish sold was attributed to the License.

38    The gross value of the fish caught and sold as a result of the whole fishing trip was approximately $54,000. The gross value of the fish caught and sold as a result of the contravening trawl shots was approximately $27,000. Overall, Northern Seafoods made a net loss from the fishing trip.

Alleged harm caused by the contravening trawl shots

39    The parties’ statement of agreed facts describes the significant adverse impacts to marine life in the Marine Park caused by commercial trawl fishing, particularly demersal trawling, including:

(1)    impacts on seafloor species, communities and habitats including through destruction of flora and fauna, and subsequent loss of fauna as a result of the destruction of habitat by trawl fishing gear being towed along the sea floor during demersal trawling;

(2)    significantly reducing the distribution and abundance of species targeted in commercial trawling, thus changing the population structure and interrupting the natural ecological balance; and

(3)    reducing population levels of non-target species which are also caught in the nets and potentially injured or killed.

40    The parties agree that the contravening trawl shots were demersal trawl shots which, in total, swept an area of approximately 28 km² of sea floor. This area of seafloor was put at risk of the potential harms of trawl fishing explained above. The parties agree that it is likely that any seafloor species, communities and/or habitats in those particular areas would have been damaged or destroyed.

41    However, the parties agree that it is difficult to quantify the precise harm to the Marine Park caused by the contravening trawl shots in the present case as it is difficult to conduct a survey to assess the damage to the seafloor over such a large area, particularly due to the complexity of the biological processes which may have been impacted.

Relief sought

42    Northern Seafoods admits that it contravened s 354(1)(f) of the EPBC Act in conducting the contravening trawl shots. Northern Seafoods accepts that from 31 August to 13 September 2018, it was responsible for the operation of the Starcat, including using the Starcat for the purpose of fishing activities to be conducted using the License. Northern Seafoods also accepts that during this period, it was responsible for employing the skipper and fishing crew for the Starcat and it engaged contractors for support operations. It accepts that from at least August to September 2018, it employed Mr Zaccagnini to conduct commercial fishing on its behalf as skipper of the Starcat.

43    As each of the contravening trawl shots was clearly conducted for commercial purposes in the course of Northern Seafoods’s commercial fishing operations using the Starcat and the License, and was conducted within the Multiple Use Zone which is prohibited by the Management Plan, Northern Seafoods unquestionably contravened s 354(1)(f) of the EPBC Act.

44    The Minister seeks a pecuniary penalty against Northern Seafoods in the amount of $95,000. The Minister also seeks a declaration that the contraventions occurred and an order that Northern Seafoods pay a contribution to the Minister’s costs of the proceeding in the amount of $17,500. Northern Seafoods joins the Minister in submitting that the penalty, declaration and order as to costs are appropriate and should be made.

Consideration: Declaratory relief

45    I am satisfied that the relevant considerations for the exercise of the discretionary power to grant declaratory relief as identified in Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564 at 581-582 support the grant of declaratory relief in this case. First, there is a “real and not a hypothetical question” as to whether Northern Seafoods contravened the EPBC Act by conducting trawl fishing within the Multiple Use Zone. Secondly, the Minister as the responsible person for regulation of the use of Commonwealth reserves “has a real interest in raising it”. Thirdly, there is a “proper contradictor and real consequences” as Northern Seafoods is the entity to be declared to have contravened the EPBC Act and has an interest in opposing the relief sought. The fact that Northern Seafoods consents to the relief does not mean that it is pointless or should not, for that reason, be granted: ACCC v MSY Technological Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [30]-[33] per Greenwood, Logan and Yates JJ. In particular, the declarations that the Minister seeks “might have a wider industrial resonance”: MSY Technological at [31].

46    The declaration sought by the Minister sufficiently describes how and why the relevant conduct of Northern Seafoods contravened the EPBC Act and makes clear the precise liability for which a penalty is sought.

Consideration: Pecuniary penalty

The principles

47    The settled approach to be taken when civil regulatory orders are sought on an agreed basis is explained in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at [46]-[60]. The High Court there reaffirmed the desirability of the practice of acting upon agreed penalty submissions, as explained in earlier Full Federal Court decisions in NW Frozen Foods Pty Ltd v ACCC [1996] FCA 1134; 71 FCR 285 and Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; ATPR ¶41-993.

48    The following principles relevant to the present matter can be extracted from the judgment of the plurality of French CJ, Kiefel, Bell, Nettle and Gordon JJ in Commonwealth v Director:

(1)    There is an important public policy involved in promoting predictability of outcome in civil penalty proceedings, and the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers: [46];

(2)    Because fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which “courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another” (Mobil Oil at [51]) – it is only in that latter sense and only to that extent that the court will not depart from the submitted figure “merely because it might otherwise have been disposed to select some other figure” (NW Frozen Foods at 291): [47];

(3)    The court is not bound by the figure suggested by the parties – it asks “whether their proposal can be accepted as fixing an appropriate amount” (NW Frozen Foods at 291) and for that purpose the court must satisfy itself that the submitted penalty is appropriate: [48];

(4)    “[I]t is entirely consistent with the nature of civil proceedings for a court to make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate”: [57];

(5)    “Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and … highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty”: [58]; and

(6)    “[I]t is the function of the relevant regulator to regulate the industry in order to achieve compliance and, accordingly, it is to be expected that the regulator will be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance”: [60].

49    More recently, in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, the High Court came to reconsider the purpose of civil penalty provisions and the proper approach in arriving at an appropriate penalty. That was not a case of an agreed penalty, but what it states with regard to what is an appropriate penalty is relevant to the approval of an agreed penalty as being appropriate. The following principles appear from the majority judgment of Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ:

(1)    The purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the relevant statute by the deterrence of further contraventions of the statute: [9] and [15];

(2)    “Insistence upon the deterrent quality of a penalty should be balanced by insistence that it ‘not be so high as to be oppressive’. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression” (citing NW Frozen Foods at 293): [40];

(3)    It is incorrect to set a penalty with reference to what is proportionate to the seriousness of the conduct that constituted the contravention: [10];

(4)    The penalty should be “proportionate” in the sense that it strikes a reasonable balance between deterrence and oppressive severity: [41];

(5)    It is incorrect to view the maximum penalty as being reserved for only the most serious examples of offending conduct; what is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed” (citing ACCC v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [156] per Jagot, Yates and Bromwich JJ): [10];

(6)    The object of imposing a penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the statute: [15];

(7)    “Retribution, denunciation and rehabilitation have no part to play” (citing Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97; 264 FCR 155 at [19] per Allsop CJ, White and O’Callaghan JJ): [16];

(8)    A civil penalty “must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business” (citing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at [62] per Keane CJ, Finn and Gilmour JJ): [17];

(9)    Relevant factors in the assessment of a penalty of appropriate deterrent value include the following (citing, at [18], Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR ¶41–076 at [42] per French J):

(a)    The nature and extent of the contravening conduct.

(b)    The amount of loss or damage caused.

(c)    The circumstances in which the conduct took place.

(d)    The size of the contravening company.

(e)    The degree of power it has, as evidenced by its market share and ease of entry into the market.

(f)    The deliberateness of the contravention and the period over which it extended.

(g)    Whether the contravention arose out of the conduct of senior management or at a lower level.

(h)    Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

(i)    Whether the company has shown a disposition to co‑operate with the authorities responsible for the enforcement of the Act in relation to the contravention.

50    There is nothing in the text, context or purpose of ss 354(1)(f) and 481 of the EPBC Act that would make the principles in Pattinson inapplicable in the present case; it is a relevantly analogous Commonwealth civil penalty provision. See Pattinson at [55].

General deterrence

51    The parties submit, and I accept, that the need for general deterrence is underscored in the present case by a number of specific matters.

52    First, the warning by telephone on 17 August 2018 which was followed by a formal warning notice on 28 August 2018 that the Starcat was trawling in contravention of the Management Plan proved ineffective in preventing Northern Seafoods from undertaking the very actions it was expressly told were unlawful. A strong message is accordingly required to deter Northern Seafoods, and other commercial fishing companies, from failing to take sufficient effort to ensure that they comply with the EBPC Act.

53    Secondly, commercial trawl fishing, and particularly demersal trawling, poses a significant risk to marine life in the Marine Park. In the case of the Multiple Use Zone of the Marine Park, the gravity of this risk is underscored by the presence of the regionally significant terrace system of the Sahul Shelf and the specific prohibition of trawl fishing within the Zone to protect the seabed and marine species in the Zone.

54    Thirdly, the contraventions in the present case arose from Northern Seafoods’s failure to take necessary steps to ensure that when it conducted permitted fishing activities in the Timor Reef Fishery, it did not infringe on “no-take” areas where commercial trawl fishing was prohibited. This is a common failure of commercial fishing companies as shown by a number of previous cases where the contraventions resulted from a failure to take proper precautions to ensure that commercial fishing activities were not undertaken illegally in a marine reserve: Minister for the Environment and Heritage v Wilson [2004] FCA 6; Minister for Environment and Heritage v Warne [2007] FCA 599; Minister for Sustainability, Environment, Water, Population and Communities v Woodley [2012] FCA 957; 194 LGERA 290; Minister for Environment v Thermal Dell Pty Ltd [2014] FCA 1442; and, Minister for Environment v Lucky S Fishing Pty Ltd [2015] FCA 10; 323 ALR 723.

55    In the latter regard, compliance with the legislation does not impose a particularly onerous or costly burden on businesses (the necessary information concerning Commonwealth marine reserves to inform a business’s compliance program is publicly available), but the consequences of non-compliance for Commonwealth marine reserves, such as the Marine Park, are potentially very serious. Unless commercial fishing businesses take active and appropriate steps to ensure that they do not fish in “no take” areas of Commonwealth marine reserves, those protected environments will continue to be at risk, regardless of the fact that generally compliant businesses may not intend to contravene the EPBC Act. The failures of Northern Seafoods in this case underscores the need for a strong message to be sent to other commercial fishing businesses operating in fisheries proximate to Commonwealth marine reserves.

56    Fourthly, the penalties imposed should be such as to validate the behaviour and efforts of compliant businesses and so support and encourage voluntary compliance with the law. This is the other side of the risk/benefit calculus referred to in Reckitt Benckiser at [152], and characterised in Pattinson at [41] as proportionality in the sense of striking a reasonable balance between deterrence and oppressive severity.

Specific deterrence

57    Insofar as specific deterrence is concerned, Northern Seafoods’s acknowledgement of wrongdoing, expression of regret, and ongoing cooperation with the Department should be taken into account. Nevertheless, Northern Seafoods failed to take reasonable steps to ensure that it did not engage in commercial fishing activities in contravention of the Management Plan, notwithstanding having been specifically informed of the Management Plan and thereafter warned of contravening behaviour on more than one occasion. Thus, notwithstanding Northern Seafoods’s acknowledgement of wrongdoing and cooperation, there is a need for specific deterrence.

The maximum penalty

58    As mentioned, the maximum penalty for a contravention by a body corporate at the relevant time equates to $1,050,000.

59    The parties jointly submit with reference to Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [31] that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and, thirdly, because in that regard they provide, taken and balanced with all of the other relevant factors, a yardstick. Although that case was a criminal case, and the dicta referred to were in relation to criminal penalties, the parties point to a number of civil penalty cases under the EPBC Act that have approached the maximum penalty in that way, namely Woodley at [40]-[41], Thermal Dell at [37], Lucky S Fishing at [53], Minister for the Environment v Karstens [2015] FCA 649 at [20]-[21] and Minister for the Environment v Hansen [2016] FCA 1146 at [61]. The parties also refer to civil penalty cases in other contexts that adopted that approach, namely Reckitt Benckiser at [154]-[156] and Flight Centre Ltd v ACCC (No 2) [2018] FCAFC 53; 356 ALR 389 at [55].

60    It is necessary to consider whether that approach is correct in the light of the decision of the High Court in Pattinson. In that case, the Full Court below considered that the primary judge had erred in imposing on the contravenor what was, in effect, the maximum penalty, which the Full Court considered ought to be reserved for the most serious examples of conduct in contravention of the relevant provision: [7], [33]. On further appeal to the High Court, the Commissioner contended that the Full Court erred in regarding the statutory maximum civil penalty as providing a “yardstick” according to which the maximum may be imposed only in a case involving the worst category of contravening conduct: [8]. That contention was accepted by the majority: [9].

61    As mentioned, the majority in Pattinson considered that the Full Court was misled by the view that the statute required that the maximum penalty be reserved for only the most serious examples of offending comprehended by the relevant provision, and that that principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind: [10]. It was held that nothing in the text, context or purpose of the relevant provision required that the maximum penalty be reserved for the most serious examples of misconduct, and that what is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”: [10].

62    The majority in Pattinson referred to the dicta in Markarian to which the parties refer, as referenced at [59] above, and approved certain statements of the treatment of those dicta by the Full Court in Reckitt Benckiser: [52]-[53]. In particular, the High Court majority emphasised that “the maximum penalty, while important, is but one yardstick that ordinarily must be applied” and the maximum penalty does not constrain the exercise of the discretion beyond requiring “some reasonable relationship between the theoretical maximum and the final penalty imposed”: [53]-[55].

63    It is thus only the second of the three points from Markarian identified at [59] above, namely that the statutory maximum invites comparison between the worst possible case and the case before the court at the time, that is implicated by Pattinson. The extent of that implication is to make clear that the maximum penalty does not constrain the exercise of the discretion beyond requiring “some reasonable relationship between the theoretical maximum and the final penalty imposed”.

64    The contraventions in the present case are by no means the worst imaginable, but they remain serious and numerous. Those matters must be taken into account.

Multiple contraventions

65    As identified above, s 481(2) of the EPBC Act provides for a pecuniary penalty that the court determines is appropriate “for each contravention” of a civil penalty provision. In the present case, a contravention consists of “tak[ing] an action for commercial purposes” where such an action is prohibited. The conclusion as to what is an “action” for the purpose of this section “involves an assessment and characterisation of conduct, events and circumstances”: ACCC v Yazaki [2018] FCAFC 73; 262 FCR 243 at [217] per Allsop CJ, Middleton and Robertson JJ. On that basis, each contravening demersal trawl shot constitutes a separate action and hence contravention.

66    The potentially harsh effect of that reality is ameliorated by the “course of conduct” principle, by which consideration should be given to whether the contraventions arise out of “the same course of conduct or the one transaction” to determine whether it is appropriate that a concurrent or single penalty should be imposed for multiple contraventions: Yazaki at [234]. The principle recognises, in the language of the criminal law, that “where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality”: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 269 ALR 1 at [39] per Middleton and Gordon JJ. In Ryan v The Queen     [1982] HCA 30; 149 CLR 1 at 22 per Brennan J, it was explained that if offences are part of a series, “the entirety of the criminal conduct of the same or similar character, rather than the several acts or omissions constituting the separate offences, may determine the appropriate overall sentence to be imposed.” However, even if the contraventions are properly characterised as arising from a single course of conduct, a judge is not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contraventions: Cahill at [42], Yazaki at [235].

67    In my assessment, the following considerations mean that it is appropriate in this case to apply the course of conduct principle to Northern Seafoods’s 13 contraventions, each of which is constituted by a single trawl shot.

68    First, although the shots were undertaken over a period of seven days, they were all undertaken as part of a series of sequential shots repeating essentially the same fishing techniques and all in a similar location within the Multiple Use Zone, with some shot paths crossing other previous shot paths. That is to say, the contraventions were closely related in time, space and commercial endeavour.

69    Secondly, on the basis of the information known to the parties, the level of harm caused or risk of harm as a result of each contravention cannot practically be differentiated. That is, it cannot be said that one contravention had a greater or lesser impact than another. Rather, it is more suitable to impose a penalty that reflects the seriousness of the total contravening fishing effort and the total catch, rather than assessing a penalty for each individual shot.

70    I find support for taking that approach from a similar approach having been taken in a previous case of trawl fishing contraventions: Thermal Dell at [33]-[36] and [67] per Jagot J.

71    It should be observed that all of the contraventions were serious in that they took place after repeated warnings were issued to Northern Seafoods in August 2018, but the contraventions were not intentional in that the skipper of the Starcat was not aware of the boundaries of the Multiple Use Zone and that he was not allowed to conduct the trawl shots there. The last two contraventions could be considered more serious in that they took place after the further warning on 8 September 2018. However, the email communication to the skipper inadvertently recorded incorrect coordinates for the Marine Park, which apparently led to those further contraventions. The fact that the Starcat was, to the knowledge of Northern Seafoods, monitored by the Department by the Vessel Monitoring System at all times supports the parties’ agreement that the contraventions were not intentional, although it also underscores the inadequacy of Northern Seafoods’s compliance systems and the absence of reasonable steps taken to prevent the contraventions from the outset.

Statutory considerations

72    As mentioned, s 481(3) of the EPBC Act provides that “all relevant matters” must be considered in setting a penalty, and that those matters include the following:

(1)    the nature and extent of the contravention;

(2)    the nature and extent of any loss or damage suffered as a result of the contravention;

(3)    the circumstances in which the contravention took place; and

(4)    whether the person has previously been found by the Court in proceedings under the EPBC Act to have engaged in any similar conduct.

73    The nature and extent of the contraventions have been identified above. The short point is that the failure of Northern Seafoods to take reasonable steps to prevent the contraventions that occurred in September 2018 can properly be viewed as a serious breach of its statutory obligations under the EPBC Act. It is nevertheless relevant that the contraventions were not intentional.

74    The nature and extent of any loss and damage has also been identified above. In particular, an extensive area of seafloor was potentially affected by the trawl shots and about six tonnes of target fish was caught and retained and about 2.6 tonnes of non-target fish was caught and discarded. It is not possible for the parties to quantify the extent of damage to the seafloor or what impact that had on the broader ecology of the Marine Park as a whole.

75    The circumstances in which the contraventions took place have also been identified above. Those circumstances include:

    prior notification to Northern Seafoods of the promulgation of the Marine Park and the restrictions applicable to the various zones within it;

    that it was neither expensive nor onerous for Northern Seafoods to take reasonable steps to prevent the skippers it employed from undertaking unlawful commercial fishing activities within the Multiple Use Zone;

    that Northern Seafoods had no formal induction process or compliance system in place in respect of Commonwealth marine reserves but rather relied on its skippers to ensure that it did not fish in “no take” areas; and

    the gross value of the fish caught and sold as a result of the whole fishing trip was approximately $54,000 and the value of the fish caught and sold as a result of the contravening trawl shots was approximately $27,000, with the trip as a whole running at a loss.

76    Northern Seafoods has not previously been found by a court to have contravened the EPBC Act or any other relevant law. The absence of any prior contraventions is an important mitigating factor.

77    Insofar as other relevant considerations are concerned, particularly with reference to those factors identified by French J in CSR Ltd (referred to at [49(9)] above) as are relevant to the present matter and which have not already been dealt with above, I make the following observations.

78    The parties have not furnished any evidence on the size of the contravening company. I nevertheless observe that it is a family-owned company. The value of the catch and the fact of the fishing trip having run at a loss would not suggest that the company’s fishing business is particularly lucrative. In the 2018/2019 financial year, Northern Seafoods reported $3,625,554 in total revenue, but its expenses and therefore annual profit are not revealed in the evidence.

79    The contraventions arose principally out of the conduct of an independently contracted skipper, but also the conduct of senior management in failing to have necessary safeguards in place.

80    There is no evidence that the company had a corporate culture conducive to compliance with the EPEC Act, or educational programs and disciplinary or other corrective measures. However, Northern Seafoods has subsequently amended its pre-departure checklists and masters’ handover reports to expressly require skippers to review Marine Park conditions and areas before departing on a fishing trip, and to report on any interaction with Marine Park areas after the fishing trip. The Minister has not proposed or identified any relevant remedial action to be taken by Northern Seafoods.

81    Northern Seafoods has cooperated extensively with the Minister. It has accepted its wrong-doing, and it has taken remedial steps. It has not opposed any findings of contraventions, it has jointly with the Minister tendered an agreed statement of facts and an agreed supplementary statement of facts, filed joint submissions and proposed an agreed penalty. The attitude and approach of Northern Seafoods weighs heavily in its favour with regard to an assessment of whether the agreed penalty is appropriate.

Is the agreed penalty an appropriate penalty?

82    As mentioned, the parties have agreed a penalty of $95,000 for the contraventions. My task is to assess whether that is within an appropriate range, or, whether it is an appropriate penalty even if it is not the penalty that I would have imposed absent the parties’ agreement.

83    I have taken all the above-mentioned factors and circumstances into consideration. It weighs with me that although this is the first and only contravention by Northern Seafoods, the industry as a whole has a lamentable record of contraventions of this nature. Also, and as explained in the Management Plan, there is a considerable public interest in the protection of the marine resources that are sought to be protected by the prohibition of the type of contravening conduct engaged in by Northern Seafoods.

84    In the ordinary course, I would not have regarded a penalty of $95,000 for the contraventions in this case to be within an appropriate range. That seems to me to be too low a penalty to properly serve the purpose of specific and general deterrence. However, taking into account, in particular, the fact that the relevant regulator, which can be taken to have extensive knowledge of the industry and experience of dealing with contraventions of the EPBC Act, considers that to be an appropriate penalty so as to fulfil that purpose, the remorseful and constructive approach taken by Northern Seafoods, and that it is “highly desirable” (Commonwealth v Director at [58]) that the Court accept the parties’ proposal, I am ultimately satisfied that in the circumstances of this case $95,000 is an appropriate penalty.

85    I also note that the parties have agreed that Northern Seafoods will pay a contribution of $17,500 to the Minister’s costs of the proceeding.

Disposition

86    For the above reasons, I am satisfied that the orders as agreed by the parties, as to the declaration, penalty and costs, should be made.

Associate:

Dated:    3 June 2022