Minister for the Environment and Water v Northern Seafoods Pty Ltd

Minister for the Environment and Water v Northern Seafoods Pty Ltd - [2025] FCA 116 - FCA 2025 case summary — Zoe

[9]

The Marine Park and Management Plan 4 The EPBC Act regulates (amongst other things) commercial fishing in Commonwealth waters through the use of designated Commonwealth Reserves. Rules, including those contained in management plans in operation for a Commonwealth Reserve, manage activities within that reserve. Management plans are prepared and approved in accordance with Subdiv E of Div 4 of Pt 15 of the EPBC Act. Sections 354 and 354A of the EPBC Act, subject to certain specified exceptions, provide for the imposition of civil penalties and criminal sanctions in respect of certain activities carried out within a Commonwealth Reserve otherwise than in accordance with a management plan in operation for the reserve. 5 The Marine Park is a Commonwealth Reserve declared under the EPBC Act. The Marine Park is located west of the Tiwi Islands, approximately 155 km north-west of Darwin, Northern Territory, and 305 km north of Wyndham, Western Australia. It extends to the limit of Australia's exclusive economic zone and covers an area of 71,743 km². 6 The Marine Park contains the following seafloor and ecological features: the carbonate terrace and bank system of the Van Diemen Rise, carbonate bank and terrace systems of the Sahul Shelf, pinnacles of the Bonaparte Basin, and shelf break and slope at the Arafura Shelf. 7 The Marine Park is home to a high diversity and density of fish species (including both non-endangered fish species, and those listed as threatened, migratory, marine or cetacean under the EPBC Act). Biologically important areas, which reflect habitat critical to the survival of a species or ecological community, within the Marine Park include foraging and inter-nesting habitat for marine turtles, including endangered Olive Ridley, and vulnerable Hawksbill, Green and Flatback turtles. 8 The Management Plan is in operation for the Marine Park, with effect from 1 July 2018. The Management Plan divided the Marine Park into four designated zones: "Special Purpose Zone", "Multiple Use Zone", "Habitat Protection Zone" and "National Park Zone". 9 Of relevance to this application is the Habitat Protection Zone. The objective of the Habitat Protection Zone is to provide for the conservation of ecosystems, habitats and native species in as natural a state as possible while allowing activities that do not harm or cause destruction to seafloor habitats. 10 The carbonate bank and terrace systems of the Van Diemen Rise extend into the Habitat Protection Zone. These ecological features are characterised by diverse benthic habitats supporting sponges, soft corals, polychaetes, ascidians, turtles, sea snakes, sharks and marine mammals. Flatback turtles nest only in Australia and the Arafura Sea population use the Habitat Protection Zone as an inter-nesting habitat. The north-western section of the Habitat Protection Zone overlays part of the Timor Reef Fishery. 11 Under the Management Plan, trap fishing for commercial purposes is prohibited in the Habitat Protection Zone. Trap fishing involves the laying of fish traps. A fish trap is a cage or a box, which sometimes contains bait, that is used to collect fish and crustaceans. The cage typically consists of a metal frame and wire or string mesh cover with an entrance that allows species to enter but not leave the trap. Fish traps have escape gaps of a minimum size to ensure juvenile and some non-target fish are able to escape. The bottom of the trap is weighted to ensure it sinks to the seafloor and lands upright. The cage is attached to a length of rope that attaches to a surface float and marker buoy to aid location and retrieval. Retrieval typically occurs by grappling the main line between the marker buoy and the float and pulling it back onboard.

[10]

The statutory prohibition 12 Section 354(1)(f) of the EPBC Act provides: 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. 13 At the time of the contraventions in this case, in 2022, 5,000 penalty units, being the statutory maximum for a body corporate, equated to $1,110,000. 14 Sections 498B(1) and (5) of the EPBC Act provide: 498B Conduct of directors, employees and agents Bodies corporate - conduct (1) Any conduct engaged in on behalf of a body corporate: (a) by a director, employee or agent of the body corporate within the scope of his or her actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent; is to be taken, for the purposes of this Act, to have been engaged in also by the body corporate unless the body corporate establishes that the body corporate took reasonable precautions and exercised due diligence to avoid the conduct. …. Reasonable precautions (5) For the purposes of subsection (1) or (3), in determining whether a body corporate or other person took reasonable precautions and exercised due diligence to avoid particular conduct, a court must have regard to what steps (if any) the body or person took directed towards ensuring the following (to the extent that the steps are relevant to the conduct): (a) that the body or person arranges regular professional assessments of the body's or person's compliance with this Act and the regulations; (b) that the body or person implements any appropriate recommendations arising from such an assessment; (c) that the body or person has an appropriate system established for managing the effects of the body's or person's activities on the environment; (d) that the directors of the body, or the employees or agents of the body or person, have a reasonable knowledge and understanding of the requirements to comply with this Act and the regulations, in so far as those requirements affect the directors, employees or agents concerned. 15 Pursuant to s 481 of the EPBC Act, the Court has the power 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. 16 Pursuant to s 482 of the EPBC Act, s 354 is a civil penalty provision for the purposes of s 481.

[12]

Northern Seafoods' commercial trap fishing activities in the Habitat Protection Zone 20 Between 8 and 21 February 2022, the skipper and crew of the Calypso Star conducted a 13 day commercial trap fishing trip. 21 From approximately 4.00 am to 2.15 pm on 19 February 2022, the skipper and crew of the Calypso Star conducted fishing for commercial purposes whilst in the Habitat Protection Zone of the Marine Park, using 49 traps. 22 As a result of the trap fishing in the Habitat Protection Zone, the skipper and crew of the Calypso Star caught approximately 120 kg of fish valued at approximately $600, including Goldband, Saddletail, Crimson Snapper, Red Emperor, Cod and Hussar, among other fish. 23 The fish caught by the Calypso Star as a result of the trap fishing in the Habitat Protection Zone were unloaded at Darwin and sold to a commercial seafood processor, wholesaler and exporter. 24 It is an agreed fact that the trap fishing in the Habitat Protection Zone occurred because the skipper of the Calypso Star was not aware he was inside the Habitat Protection Zone of the Marine Park. 25 The Calypso Star had on board a Vessel Monitoring System which provides the Department of Climate Change, Energy, the Environment and Water with information about the location of vessels in the Marine Park. 26 The Australian Marine Park Alert Service is a free tool available to all licenced Commonwealth commercial fishers through the Vessel Monitoring System already fitted to their vessels. The service is aimed at avoiding non-compliance in Australian marine parks. When a vessel enters an Australian marine park where the "nominated primary gear type" is not allowed, an alert message is sent via email to an onboard computer and / or as an SMS message to a nominated phone. 27 An automated Vessel Monitoring System alert was sent to the Calypso Star at 4.24 am on 19 February 2022 when the vessel entered the Habitat Protection Zone in the Marine Park to remind the skipper that trap fishing was not permitted in the area. 28 Onshore staff of Northern Seafoods also received a text message alert, simultaneous to the Vessel Monitoring System alert.

[21]

The approach to agreed penalties 56 The 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] (French CJ, Kiefel, Bell, Nettle and Gordon JJ). 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: Commonwealth v Director at [46]. 57 The fixing of the quantum of a civil penalty is not an exact science. There is a permissible range and "courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another" (Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] (Branson, Sackville and Gyles JJ)). If the figure submitted by the parties is within the range the Court is satisfied is permissible and appropriate, 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 Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 291 (Burchett and Kiefel JJ); Commonwealth v Director at [47]). 58 The Court is not bound by the figure suggested by the parties. The Court 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: Commonwealth v Director at [48]. 59 The general rule was expressed by the High Court in Commonwealth v Director at [58] as follows: 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, for the reasons identified in Allied Mills [(1981) 37 ALR 256 at 259 (Sheppard J)], highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. 60 Given the parties' signed written statement of agreed facts and supplementary statement of agreed facts were adduced in evidence, s 191 of the Evidence Act limits the fact-finding role of the Court in the present proceedings. Because of s 191(2)(a) of the Evidence Act, it is unnecessary for this Court to independently adjudicate on whether the agreed facts exist. The Court needs to be satisfied that the agreed facts on their face provide a sufficient foundation for the declaration and orders sought: Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [12] (Beach J).

[22]

The purpose of civil penalties 61 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: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 at [9] and [15] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ); Minister for Sustainability, Environment, Water, Population and Communities v Woodley [2012] FCA 957 at [47]-[50] (Foster J); Northern Seafoods No 1 at [47]-[50] (Stewart J); Minister for Environment v Thermal Dell Pty Ltd [2014] FCA 1442 at [37] (Jagot J). The public interest in promoting compliance with the EPBC Act is well-recognised: see for example, Northern Seafoods No 1 at [83]. 62 Because deterrence is the object of a civil penalty, the amount of the penalty should not be greater than is necessary to achieve that object. The penalty is not to be so high as to be oppressive: Pattinson at [40]. 63 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: Pattinson at [15]. 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": Pattinson at [17], citing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at [62] (Keane CJ, Finn and Gilmour JJ). 64 It is incorrect to set a penalty with reference to what is proportionate to the seriousness of the conduct that constituted the particular contravention: Pattinson at [10]. It is relevant to consider not only the character of the conduct giving rise to the particular contravention but also the character of the contravenor: Pattinson at [19]. 65 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" (Pattinson at [10], citing Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [156] (Jagot, Yates and Bromwich JJ)). This relationship of "reasonableness" may be established by reference to the circumstances of the contravenor as well as by the circumstances of the conduct involved in the contravention. That is so because either set of circumstances may have a bearing upon the extent of the need for deterrence in the penalty to be imposed: Pattinson at [55]. 66 In the present case, the principles espoused in Pattinson are reflected in the mandatory considerations set out in s 481 of the EPBC Act, which requires consideration of the circumstances of the contravention and the contravening history of the contravenor.

[27]

The circumstances in which the contraventions took place 79 At the time of the contravening conduct, Northern Seafoods was aware that the Marine Park was a Commonwealth Reserve and that a Management Plan was in place. 80 The contraventions occurred in the present case because the skipper of the Calypso Star was not aware he was inside the Habitat Protection Zone of the Marine Park where commercial trap fishing was prohibited. It was agreed by the parties that the contraventions did not arise because of a deliberate intention to contravene the EPBC Act. 81 The contraventions in the present case arose from Northern Seafoods' failure to take necessary steps to ensure that when it conducted permitted fishing activities in the Timor Reef Fishery, it did not engage in prohibited activities in the Marine Park, having regard to the different zones within the Marine Park. 82 At the time the Calypso Star embarked on the commercial fishing trip on 8 February 2022, Northern Seafoods had some compliance measures in place, although these measures were not always adhered to or effective and Northern Seafoods was the defendant in other civil penalty proceedings involving contraventions of the EPBC Act: Northern Seafoods No 1. 83 In the present case: (1) Although the skipper was required to review the Marine Park areas before departing as part of the pre-departure checklist, the checklist for the fishing trip commencing on 8 February 2022 was not signed by the skipper. (2) Although the Calypso Star was equipped with a TimeZero navigation system, the system did not clearly display the boundaries of the Habitat Protection Zone. (3) Northern Seafoods did not provide formal training to its skippers in relation to the prohibited fishing zones or the TimeZero navigation system. (4) Via its Vessel Monitoring System, at 4.24 am on 19 February 2022, the Calypso Star was sent an automated alert that it had entered the Habitat Protection Zone and that trap fishing was not permitted in that area. Northern Seafoods' on-shore staff also received a text message alert at that time. 84 A failure to take necessary steps to ensure that prohibited fishing activities are not conducted in Commonwealth Reserves is not an uncommon failure of commercial fishing companies: see for example Thermal Dell; Minister for the Environment v Lucky S Fishing Pty Ltd [2015] FCA 10; 323 ALR 723; Minister for Environment and Heritage v Warne [2007] FCA 599; Minister for the Environment and Heritage v Wilson [2004] FCA 6 and Woodley. 85 Because commercial fishing in protected areas may have the potential for significant financial rewards, it is important that a penalty not become a cost of doing business. The necessary information concerning Commonwealth Reserves to inform a business's compliance program is publicly available, reducing the costs of compliance with the legislation. The consequences of non-compliance for Commonwealth 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 engage in prohibited commercial fishing activities in Commonwealth Reserves, those protected environments will continue to be at risk.

[32]

Course of conduct 99 Although separate contraventions arising from separate acts attract separate penalties, it may not be appropriate to impose separate penalties for the same wrongful act. So much is recognised in s 481(4) of the EPBC Act. 100 The course of conduct principle is an analytical tool that may be useful in determining an appropriate civil penalty where closely related conduct has given rise to multiple contraventions. It is important to identify whether multiple contraventions constitute a single course of conduct or separate instances of conduct "to ensure that an appropriate deterrent effect is achieved by the imposition of the penalty or penalties in respect of that particular conduct": Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; 258 FCR 312 at [424] (Middleton, Beach and Moshinsky JJ). 101 Whether multiple contraventions should be treated as arising from the same course of conduct for the purposes of assessing a pecuniary penalty depends on the interrelationship between the legal and factual elements of the contraventions: Cement Australia at [421]-[424]. Where the factual and legal elements are interrelated, the application of the course of conduct principle can be useful in determining whether the penalty is appropriate to deter contravening conduct. 102 The course of conduct principle does not convert multiple contraventions into a single contravention. Nor, even if the contraventions are properly characterised as arising from a single course of conduct, is a judge obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contravening conduct: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 at [42] (Middleton and Gordon JJ). 103 Here, the same conduct (the setting and retrieval of fishing traps) was repeated on a single day (within a 10 hour period) in the same location (the Habitat Protection Zone of the Marine Park) by the same group of employees in the course of the same fishing trip. In the present circumstances I am satisfied that it is appropriate to group the 49 contraventions into a single course of conduct for the purposes of determining an appropriate penalty. None of the contraventions was intentional. To use the language of Stewart J in Northern Seafoods (No 1) at [68], the contraventions were closely related in time, space and commercial endeavour. 104 Furthermore, it is not possible to separately identify the risk of harm arising from each of the contraventions. Particularly in circumstances where it cannot be said that one contravention caused more harm than another, the penalty imposed needs to reflect the seriousness of the entirety of the contravening conduct: Northern Seafoods No 1 at [69].

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