FEDERAL COURT OF AUSTRALIA Minister for Environment and Heritage v Warne [2007] FCA 599 ENVIRONMENT PROTECTION – commercial fishing within boundaries of a reserve – civil penalty proceedings – joint submissions on penalty – appropriate penalty Environmental Protection and Biodiversity Conservation Act 1999 (Cth) s 354(1), s 481(3) NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 MINISTER FOR ENVIRONMENT AND HERITAGE v CRAIG WARNE WAD 117 OF 2006 SIOPIS J 27 APRIL 2007 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 117 OF 2006 BETWEEN: MINISTER FOR ENVIRONMENT AND HERITAGE Applicant AND: CRAIG WARNE Respondent JUDGE: SIOPIS J DATE OF ORDER: 27 APRIL 2007 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The respondent pay to the Commonwealth of Australia a pecuniary penalty pursuant to s 481 in the amount of twenty‑five thousand dollars ($25,000). 2. The respondent pay to the Commonwealth of Australia costs as agreed in the amount of twenty‑seven thousand five hundred dollars ($27,500), whereby: 2.1 twenty‑five thousand dollars ($25,000) is to be paid within twenty‑eight (28) days of the date of these orders; and 2.2 two thousand five hundred dollars ($2,500) is to be paid within a further twenty‑eight (28) days therefrom. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 117 OF 2006 BETWEEN: MINISTER FOR ENVIRONMENT AND HERITAGE Applicant AND: CRAIG WARNE Respondent JUDGE: SIOPIS J DATE: 27 APRIL 2007 PLACE: PERTH REASONS FOR JUDGMENT 1 On 27 January 2005 and 28 January 2005 the vessel, AFV Surefire, carried out commercial fishing activities in the vicinity of the Mermaid Reef National Marine Nature Reserve (the Mermaid Reef Reserve), which is located approximately 300 km due west of Broome. On four occasions during that period, the vessel entered, and engaged in trawl fishing activities within, the Mermaid Reef Reserve. In the course of those incursions, the vessel took scampi, a species of fish classified as a native species within the terms of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Act). At the time that the Surefire entered the boundaries of the Mermaid Reef Reserve, the respondent was the skipper of the vessel and the person in control of its activities. There was no management plan in operation for the reserve, which permitted the fishing activities engaged in by the respondent. 2 The applicant alleges that by reason of the fishing activities carried out within the boundaries of the Mermaid Reef Reserve, the respondent contravened s 354(1)(a) and (1)(f) of the Act, and claims that a civil penalty should be imposed upon the respondent under s 481 of the Act. The respondent has filed a defence which admits the allegations made by the applicant in the statement of claim. Further, the parties have a filed an agreed statement of facts and have made joint submissions in support of the Court making orders in terms of a minute of consent orders signed by both parties. The minute proposes that the Court make the following orders: 1. The respondent pay to the Commonwealth of Australia a pecuniary penalty pursuant to s 481 in the amount of twenty‑five thousand dollars ($25,000). 2. The respondent pay to the Commonwealth of Australia costs as agreed in the amount of twenty‑seven thousand five hundred dollars ($27,500), whereby: 2.1 twenty‑five thousand dollars ($25,000) is to be paid within twenty‑eight (28) days of the date of these orders; and 2.2 two thousand five hundred dollars ($2,500) is to be paid within a further twenty‑eight (28) days therefrom. 3 The question is whether the Court should make those orders. Statutory background 4 Section 354(1) of the Act provides as follows: (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: (a) kill, injure, take, trade, keep or move a member of a native species; or (b) damage heritage; or (c) carry on an excavation; or (d) erect a building or other structure; or (e) carry out works; or (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. 5 By operation of s 4AA of the Crimes Act 1914 (Cth) the maximum civil penalty for an individual is $55,000. 6 Section 481 of the Act provides: 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. Conduct contravening more than one civil penalty provision (4) If conduct constitutes a contravention of 2 or more civil penalty provisions, proceedings may be instituted under this Act against a person in relation to the contravention of any one or more of those provisions. However, the person is not liable to more than one pecuniary penalty under this section in respect of the same conduct. Consideration 7 The parties referred to the case of NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (NW Frozen Foods) as providing guidance to the Court in determining whether to make orders for the imposition of a civil penalty where the parties have signed a minute of consent orders and made joint submissions as to the question of penalty. That case involved the imposition of a civil penalty under the Trade Practices Act 1974 (Cth) (the TPA). A single judge declined to give effect to the civil penalty proposed in the minute of consent orders and the joint submissions of the parties, and imposed a more severe penalty. The respondent to the initial application appealed. In their joint judgment Burchett and Kiefel JJ observed at 290‑291: Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 4), it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount. There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. 8 The Full Court has held that these observations are capable of applying to the making of orders reflecting negotiated outcomes in respect of civil penalty provisions of Acts other than the TPA (Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72). In my view, the observations are applicable to the circumstances of this case. 9 I now have regard to the matters referred to in s 481(3) of the Act. 10 As to the nature and extent of the contravening conduct, the respondent is a commercial fisherman who, in the course of carrying out fishing operations in the vicinity of the Mermaid Reef Reserve, caused the vessel, AFV Surefire, on four different occasions over the two days in question, to enter the boundaries of the reserve and to trawl for scampi. This has been properly recognised by the parties in their joint submissions. 11 As to the nature and extent of any loss referred to in s 481(3)(b), the daily fishing logs of the Surefire show that on 27 January 2005 the respondent caught 219 kg of scampi, and on 28 January 2005, he caught 237 kg of scampi. The parties have agreed that the probable total value of the catch reflected in the daily fishing logs for those two days was $11,400. However, because the daily fishing logs reflect the whole catch of the Surefire for the two days in question, and not just the catch taken within the Mermaid Reef Reserve boundaries, the total catch figure and value figure reflect the maximum catch and value figures which could be attributable to the respondent by reason of the contravening conduct. 12 The parties in their joint submissions also recognise that the conduct of fishing in the Mermaid Reef Reserve undermines the object of the Act, being to protect the environment and to promote the conservation of biodiversity. The parties recognised that the deployment and the use of nets represents a danger to marine life within the Mermaid Reef Reserve. In my view, it is appropriate to take these matters into account under s 481(3)(b) of the Act. 13 As to s 481(3)(c), the parties have characterised the incursion of the respondent into the boundaries of the Mermaid Reef Reserve as being reckless conduct on the part of the respondent. It is appropriate also to take this factor into account. 14 Under s 481(3)(d), another factor to be taken into account in determining the civil penalty is the fact that the respondent has never been the subject of previous proceedings under Div 4 of Pt 15 of the Act. The parties have taken this into account in their joint submissions. 15 There are other factors which the parties have jointly submitted are relevant to the quantum of penalty. These are that the respondent has never been charged with, or convicted of a criminal offence, and has not otherwise been prosecuted by any regulatory authority or otherwise ordered to pay a civil penalty. In addition, the respondent has cooperated with the applicant in the disposition of the matter by agreeing to consent orders, and so has avoided the necessity for a contested hearing. The parties also jointly submit that the quantum of the penalty should reflect a deterrent element. Section 481(3) permits the Court to have regard to "all relevant matters" and, in my view, these factors are properly so characterised. 16 As was said in NW Frozen Foods, the fixing of the quantum of a penalty cannot be an exact science. Among the relevant factors, to be taken into account, there are three factors which are of particular significance. These are the deterrent element, the fact that the respondent has cooperated in the disposition of this matter, and the fact that he has a clean record. As to the deterrent element, the damage caused by the respondent's activities is not to be measured solely by reference to the commercial value of the catch. There are other environmental consequences of the use of trawl fishing techniques. Thus, in my view, to satisfy the deterrent element, a civil penalty should deprive a party, fishing within the boundaries of the reserve, of any commercial gain made by the contravening conduct, and should also go some way further, to reflect the community's disapproval in respect of the environmental harm caused to the reserve. In this case, the civil penalty is slightly more than double the maximum commercial value of the catch. The parties have agreed that there were two contraventions of s 354(1). The maximum penalty would be $110,000. In the absence of other mitigating factors, a civil penalty in the amount of $25,000 would not, in my view, in the circumstances of this case, be sufficient to reflect the necessary deterrent element. However, in this case, there are the mitigating factors that the respondent has not been the subject of previous civil penalty proceedings, and has cooperated with the applicant in the disposition of the proceedings. Once these factors are taken into account, I am of the view that, the penalty is one which is within the permissible range of appropriate penalties. I am content to make orders in terms of the minute of consent orders. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 27 April 2007 Counsel for the Applicant: Mr S Owen‑Conway QC and Mr N Gvozdin Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr D Leask Solicitor for the Respondent: Leask & Co Date of Hearing: 17 April 2007 Date of Judgment: 27 April 2007