Ministry for Primary Industries v Hawkes Bay Seafoods Ltd [2019] NZDC 2599

Published 06 March 2019

Sentencing — under-reported fishing catch — Quota Management System — Fisheries Act 1996, ss 245, 254, 255, 256, 257 — application for relief from forfeiture — Sentencing Act 2002, ss 8, 40 — Criminal Proceeds (Recovery) Act 2011 — Department of Labour v Hanham & Philip Contractors Ltd & Ors (2008) 6 NZELR 79 — Tapsell v R [2014] NZCA 122 — R v Henderson [2017] NZCA 605 — MPI v Butler [2015] NZDC 8042 — MPI v Smyth [2016] NZDC 23761 — Daleszak v MPI [2013] NZHC 2602 — MPI v Sajo Oyang Corporation [2014] NZCA 46. Six defendants faced 85 charges relating to making false and misleading statements and the sale and export of under-reported bluenose fish. The case was broken down into 20 offending events: 15 of which are referred to as the "Marcus D'Esposito events", covering the period between 27 July 2013 and 10 September 2014, and the remaining 5 events are known as the "John Butler events", referring to a period of offending in November 2012. The defendants pleaded guilty to the charges on the basis of a Memorandum of Understanding between the Ministry and All Respective Defendants. A civil claim was also brought by the defendants for relief from the forfeiture of four vessels, a matter also considered by the Judge. The Hawkes Bay Seafoods group consisted of several companies, including Hawkes Bay Seafoods Limited (HBS), Ocean Enterprises Limited (OEL) and Esplanade. HBS was the retail arm of the company. Esplanade held the commercial fishing permit and was responsible for the various filings required by the Ministry of Primary Industries. OEL, the licensed fish receiver, was responsible for completing purchase invoices and filings with the Ministry. Antonino and Giancarlo D'Esposito were directors of all the companies within the HBS group and had various responsibilities, while Marcus D'Esposito was the factory manager of OEL and the export business. The agreed facts showed that the defendants, using the vertical structure of their business, systematically under-reported the weights of bluenose fish required by law under the Quota Management System. These recorded weights were false and misleading and flowed through the HBS group's reporting system. 27 tonnes of unreported fish were sold. A skipper on an HBS group vessel, John Butler, pleaded guilty to misreporting the weights of bluenose fish and was previous sentenced. The defendant companies received $253,494.62 from the sale of misreported bluenose fish. The Judge determined the starting points for fines using the Hanham band approach, and dealt with the "Marcus D'Esposito events" and the "John Butler events" independently. In assessing the starting points for the defendants in the "Marcus D'Esposito events", the Judge identified the aggravating features as being the commercial nature and profitability of the corporate structure, the quantity of bluenose fish taken relative to its population, the long-standing pattern of conduct, knowledge of the offending, the harm the offending caused to the Quota Management System, and the breach of trust. The Judge found no mitigating factors to consider. The Judge determined the offending to be towards the higher end of the medium culpability band, warranting 33 percent of the combined maximum penalty for the "Marcus D'Esposito events" offending, specifically, $1,237,500. The portion of the starting point fine each defendant was liable for was broken down according to culpability as follows; for HBS, 40 percent of the overall starting point; for OEL, 20 percent; for Esplanade, 10 percent; for Marcus D'Esposito, 15 percent; for Giancarlo Esposito, 10 percent; for Antonino D'Esposito, 5 percent. The Judge then considered the aggravating and mitigating factors as they related to each defendant, including previous convictions, previous good character, steps taken since the offending, and the guilty pleas. In assessing the starting points in relation to the "John Butler events", the Judge considered the starting point in John Butler's sentencing and reached a starting point of $35,000 for both Antonino D'Esposito and Esplanade, with an uplift for previous convictions and discount for guilty pleas bringing it to an end point of $31,183 respectively. The Judge held the total fines for the defendants as follows; for HBS, $410,232; for OEL, $215,373; for Esplanade, $141,434; for Marcus D'Esposito, $126,639; for Giancarlo D'Esposito, $106,686; for Antonino D'Esposito, $86,309. On the applications for relief from the forfeiture of the four vessels, the Judge turned to ss 156(8) and 256 of the Fisheries Act. Section 256 requires the Court to determine the value of the forfeit property, the nature of the applicant's interest in the property and the cost of prosecution in deciding these claims. Then the Court must consider the matters listed in s 256(7), including the purpose of the Act; the effect of this offending on the fisheries management, the aquatic environment, and other fishers; the social and economic effects on the applicants; the economic gains of the offending; the prevalence of the misreporting; and the cost of prosecution. The Judge held that not returning the forfeited vessels would result in manifest injustice, so ordered the redemption payment of $418,500, being 22.5 percent of their assessed value, for their return. There was no order on costs. Judgment Date: 25 February 2019.