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Athena Shipping PTE Ltd v Republic; Euihyeong v Republic [2009] KICA 22; Criminal Appeal 08 & 09 of 2009 (27 August 2009)

IN THE KIRIBATI COURT OF APPEAL
CRIMINAL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

Criminal Appeals 8 & 9 of 2009

BETWEEN:

ATHENA SHIPPING PTE LIMITED
APPELLANT

AND:

THE REPUBLIC
RESPONDENT

AND:

BETWEEN:

MASTER NO EUIHYEONG
APPELLANT

AND:

THE REPUBLIC
RESPONDENT

Before: Hardie Boys JA
Tompkins JA
Fisher JA

Counsel: Paul David for appellants
David Lambourne Solicitor General for respondent

Date of Hearing: 21 August 2009
Date of Judgment: 27 August 2009

JUDGMENT OF THE COURT

[1] As these appeals arise out of charges common to both appellants, the appeals were heard together. We shall refer to the appellant in appeal no 8 of 2009 as Athena, and the appellant in appeal no 9 of 2009 as the master.

[2] Athena was, at the relevant time, the owner, and the master was the master, of the bunker vessel Hai Soon 28. It was not licensed to operate within the Kiribati fishery limits. On 21 February 2009, Hai Soon 28 was seen within the fishery limits of Kiribati unloading fuel to a fishing vessel. No permit to do so had been granted under Kiribati law. The vessel was boarded by a Kiribati Fisheries Officer and a Kiribati Police Officer from a United States Coastguard vessel and brought back to the port of Betio where it was placed under arrest. An examination of the logbook showed this was the 19th time since 13 November 2008 that a fishing vessel had been refuelled by the Hai Soon 28.

[3] On 3 March 2009 (after the commission of the offences) Hai Soon Diesel and Trading Pte Ltd, which we assume is the parent company of Athena, entered into a bunkering agreement with the Government of Kiribati which authorised it to operate a bunkering service within the Kiribati fishery limits for a licence fee of $100,000 for a period of 12 months from 12 March 2009.

[4] At the hearing of the appeal, counsel for the appellant applied for leave to file an affidavit by Mr Low, the general manager of Athena. The Republic not objecting, leave was granted.

Conviction and penalty

[5] The master was charged with 19 counts of unlawfully unloading fuel, contrary to s 5 (1) (d) of the Kiribati Fisheries Ordinance and the master and Athena were jointly charged with 22 counts of unlawfully unloading fuel under the same subsection. All of the fishing vessels being refuelled were fishing in Kiribati waters. Allegedly two of those were not licensed to do so. At the hearing, the charges were reduced to 19, to which the master and Athena pleaded guilty.

[6] On 23 March 2009 the Chief Justice sentenced the master and Athena. He decided not to order forfeiture of Hai Soon 28. The master was fined $20,000 on each of the 19 counts, a total of $380,000. Athena was fined $250,000 on each of the 19 counts, a total of $4,750,000. Thus the fines totalled $5,130,000.

[7] Before imposing the fines, the Chief Justice said:

"As well an order may be made to forfeit Hai Soon 28 to the Republic of Kiribati. I have decided, after thinking about it, not to order forfeiture but rather to impose a fine on Athena Shipping well above the minimum. I also take into account that, different from the earlier cases to which I have been referred, Hai Soon 28 was not fishing illegally and only two of the fishing boats refuelled were not licensed to fish within the fishery limits. To the contrary, I must remember that Courts both here and in Australia and New Zealand have said that severe penalties must be imposed to deter the breaking of fisheries laws."

[8] The Chief Justice ordered that the passport of the master be held, and the Hai Soon 28 held under arrest until the fines were paid. Both appellants were allowed three months to pay the fines. On 15 May 2009 Athena provided security for the total amount of the fines. The vessel and the master’s passport were released.

[9] Athena and the master have appealed against the fines imposed on the grounds that they were manifestly excessive

The Fishing Regulations

[10] Regulation 5 (1) provides:

5 (1) No foreign fishing vessel shall –

(d) ...unload any fuel . . . within the fishery limits,

unless authorised to do so under a permit granted under this Ordinance.

[11] It is accepted that Hai Soon 28 was a foreign fishing vessel as defined in Regulation 2.

[12] Regulation 5 (7) as amended provides:

(7) When any foreign fishing vessel is used in contravention of any of the provisions of this section –

(a) the fishing master and master of such vessel shall each be liable on conviction;

(i) in the case of a contravention of subsection (1), to a fine of not less than $20,000 but not more than $100,000 and in default to a term of imprisonment of one (1) year; or

(ii) . . .

(b) the owner and charterer of such vessel shall each be liable on conviction –

(i) in the case of a contravention of subsection (1), to a fine of not less than $100,000 but not more than $500,000 and in default to a term of imprisonment of two (2) years;

(ii) . . .

[13] Regulation 15 (1) provides that where any person is convicted of an offence, the court may order that any vessel used in the commission of the offence shall be forfeited to the Republic.

[14] The maximum penalty for which the appellants were liable was:

(a) Forfeiture of the Hai Soon 28. The vessel had been purchased in April 2007 for US$2.7 million, or about A$3.25 million at today’s rates of exchange. Allowing for the time that has passed since purchase, she will have a value of approximately $3 million. In addition she was carrying fuel of a value of approximately $1.7 million. A total value of $4.7 million

(b) The master was convicted on 19 counts for which the maximum penalty was $1.9 million.

(c) Athena was convicted on 19 counts for which the maximum penalty was $9.5 million

(d) These amounts add up to a total maximum penalty of approximately $16 million.

[15] The minimum penalty for which the appellants were liable was:

(a) For the master, $380,000.

(b) For Athena, $1.9 million.

(c) These amounts total $2.28 million.

Factors relevant to penalty

Deterrence

[16] It is obvious from the statutory provisions relating to penalty and from previous decisions in this country and elsewhere that deterrence is the major consideration when considering the amount of the penalty. The reason is clear. Illegal activity within the fishing zone is notoriously difficult to detect. The zone is very large and Kiribati lacks the resources adequately to police it. Depletion of the fishing stock poses a serious threat to the Kiribati economy, as licences for fishing is the major source of income for the country and fish is as well a significant source of food for its inhabitants.

[17] The statutory minimum is also a clear intention of the legislature that penalties must be imposed that will be a strong deterrent to others not to act contrary to the fisheries regime in a way that can result in the plundering of this vital resource. Deterrence is the dominant consideration when considering the appropriate penalty. It must be made obvious to anyone minded to do so, that breaching the regulations will not be worth the risk of the penalty likely to be imposed.

The circumstances of the offending

[18] This was, obviously from the number of counts, not an isolated event. The Hai Soon 28 had been carrying on its illegal operations in Kiribati waters for a considerable time, more than three months. Two of the vessels bunkered were unlicensed. While there is no direct evidence that these two vessels were fishing, it is a reasonable inference that they were, otherwise, why would they have been there?

[19] The appellants challenged the claim by the respondent that these two vessels were unlicensed. The respondents sought leave to file an affidavit on this issue. Leave was granted. The affidavit by Mr Tearo, the acting director of fisheries within the Ministry of Fisheries deposes that he has checked the list of vessels refuelled by the Hai Soon 28. There were 17 vessels refuelled, two of those having been refuelled twice. Two do not appear on the Ministry’s records, the Liao Jim 103 (count 2) and the Kwang Shung 6 (count 22). In view of that non appearance, he concludes that neither were licensed, We accept this conclusion.

[20] The operation involved bunkering which, although illegal, is not as culpable as fishing without a licence.

[21] The affidavit filed on behalf of the appellant establishes that the Hai Soon 28 complied with the requirements for operation established by the Western and Central Pacific Fisheries Commission and the Pacific Forum Fisheries Agency. The vessel’s VMS and Automatic Location Communicator were turned on. It was an authorised vessel under the Commission.

[22] The Hai Soon 28 was registered on the Kiribati shipping register. The appellants claim that the failure to obtain the required permit under the Ordinance was a mistake, not a deliberate breach. In support the deponent of the affidavit filed on behalf of the appellant claims that he was told by the then business development manager of the Kiribati Ship Registry that the vessel being registered in Kiribati means it will be regarded as a local vessel.

[23] We do not accept that this is a mitigating factor. The person referred to is no longer available so the claimed conversation cannot be confirmed or denied. There are two other relevant factors. First, Athena had a bunkering licence to operate in the waters of the Solomon Islands. So it was familiar with the requirement. Secondly, the obligation rests on Athena to ensure that it is complying with all legal requirements. It cannot rely on a single oral conversation with an I-Kiribati employee to avoid that obligation, if that conversation did occur.

Comparable sentences

[24] There are few comparable sentences available. Mr Solicitor advised that all previous breaches of the fisheries law, on coming before the High Court, have resulted in orders of forfeiture of the vessel or vessels involved, together with their catch or cargo.

[25] He referred to the decision of this court in Byong Chol Im & Sam Song Industrial Company Ltd v the Republic Civil Appeal no 1 of 1990, 26 March 1990. The Crane South was also a vessel used for bunkering. It was detected refuelling one licensed fishing vessel. The fines imposed in the High Court were $6,000 on the master and $200,000 on the owner. At that time there was no minimum penalty. In addition, the vessel was forfeited. The decision does not state the value, but she was sold by the Republic six years later for US$2.15 million or about A$2.6 million at today’s exchange rates. Thus the total penalty imposed was not dissimilar to the total penalty in this case, allowing for the change in the value of currency over the intervening almost 20 years. The appeal against that sentence was dismissed.

Guilty plea

[26] It was submitted for the appellant that the Chief Justice failed to give any or sufficient weight to the guilty plea. He did not refer to it in his sentencing comments. But it does not necessarily follow that he did not take it into account. We accept that the guilty plea and the full co-operation of the appellants are aspects for which full credit should be given.

The period of the arrest

[27] From when the Hai Soon 28 was arrested on 21 February 2009 until the vessel was released on 15 May 2009 is a period of 84 days.

[28] Evidence varies as to the financial effect of the resulting loss of trading. In the affidavit filed on behalf of the appellants it is claimed that the loss was A$781,168.26. But earlier in the affidavit the deponents says that as at 30 June 2009 Athena’s loss from its operations for that financial year was A$1,053,552. In an affidavit the General Manager of Athena said that the Hai Soon 28 was losing about A$5,000 a day from the loss of use during that period. For 84 days this amounts to $420,000.

[29] The Chief Justice did not make any allowance for that loss, because, of course, at the time of sentencing, the full loss was not known as it had not been incurred.

Means of Athena

[30] Counsel for the appellant submitted that the Chief Justice failed to take into account the financial means of Athena or the effect of the fines on the company. Athena had accepted that it was bound to pay the fine imposed on the master.

[31] The affidavit filed on behalf of the appellant disclosed that the total current assets of the company amount to approximately A$12,700. However, the balance sheet shows that the capital of the company is US$2. Obviously it is a shell company set up for the operation of the Hai Soon 28. There is no evidence of the financial resources of the shareholders of Athena. So for the purposes of considering whether the total penalty is excessive, little reliance can be placed on the financial resources of Athena.

Discharge without conviction

[32] Counsel for the appellants submitted that even the minimum penalty of $2.28 million was excessive in the circumstance. Faced with the fact that this was the minimum penalty, he submitted that the Chief Justice could have imposed a lesser penalty by, in respect of some of the charges, ordering that the appellants be discharged without conviction.

[33] When it was pointed out that once the pleas of guilty were entered, convictions automatically followed, so that the Chief Justice had no option but to impose at least the minimum fines, counsel for the appellants asked for time to consider appealing against conviction. This was granted.

[34] Subsequent to the hearing, the appellants filed a notice to appeal against conviction out of time, a notice of appeal against conviction and a memorandum on behalf of appellants. The respondent filed in reply its response to appellants’ memorandum.

[35] The notice to appeal out of time is granted.

[36] The notice to appeal against conviction is refused for the following reasons.

(a) We do not accept the premise on which it is advanced, namely that the circumstances of the case are such that a penalty less than the minimum penalty prescribed by the act is appropriate. For reasons set out later in this judgment, we have concluded that a penalty substantially more than the minimum is required.

(b) The power to discharge without conviction is given by subs 38 (1) of the Penal Code. The court may do so if it concludes that it is expedient not to inflict any punishment having regard to ". . .the character, antecedents, age, health, or mental condition of the accused, or to the trivial nature of the offence, or to the extenuating circumstances in which the offence was committed . . ." It is difficult see how this provision can be invoked for an offence as serious as a breach of the Fisheries Ordinance.

(c) As Mr Solicitor submitted in his memorandum in reply, citing Cooke J in R v Stretch [1982] 1 NZLR 225 at 229, it is only in very exceptional cases that an appeal against conviction can succeed after a plea of guilty. He went on to cite the following passage from the judgment of Cooke J at 229:

"The result in New Zealand is that, if the conviction has followed a plea of guilty, and if it cannot be sufficiently linked with a wrong decision of the Court on a question of law (see R v. Barrie [1978] 2 NZLR 78), the appellant cannot succeed unless he can show within s. 385(1)(c) "That on any ground there was a miscarriage of justice". In practical effect, however, the tests "unsafe" and "miscarriage of justice" are probably much the same.

A dictum often quoted is that of Avory J delivering the judgment of the Court of Criminal Appeal in R v. Forde [1923] 2 KB 400, 403:

"A plea of Guilty having been recorded, this Court can only entertain an appeal against conviction if it appears (1) that the appellant did not appreciate the nature of the charge or did not intend to admit he was guilty of it, or (2) that on the admitted facts he could not in law have been convicted of the offence charged".

But that statement, which was unaccompanied by reasons or citation of other authority, is not necessarily exhaustive: see the observations of Viscount Dilhorne and Lord Salmon in Shannon [1975] AC 717, 756, 773; [1974] 2 All ER 1009, 1036, 1051."

[37] Neither of the requirements stated by Avory J apply in this case. For these reasons, the appeal against conviction cannot succeed.

Conclusion

[38] We have considered all the factors to which we have referred. We place particular emphasis on the need for a real and effective deterrence for the reasons we have described, the period over which the offences occurred and the number of times the appellants offended. We also have regard to the plea of guilty and the appellants’ co-operation.

[39] But there is one factor that the Chief Justice was not able to take into account, but which can be on the appeal. That is the loss to Athena resulting from the period the Hai Soon 28 was held under arrest to which we refer in § [28] amounting to about $400,000. This loss can properly regarded as part of the penalty.

[40] To allow for this factor, eight of the fines imposed on Athena are reduced from $250,000 to $200,000, reducing the total fines from $4,750,000 to $4,350,000.

[41] This total penalty, while undoubtedly severe, is not manifestly excessive.

Result

[42] The appeal is allowed in respect of eight of the convictions for which the fines were imposed on four of the Athena charges to the extent that in each case the fine is reduced from $250,000 to $200,000. In respect of all the other convictions on which fines were imposed, the appeal is dismissed.

Hardie Boys JA
Tompkins JA
Fisher JA