Police v Chikami [2005] CKHC 8; HC CR Nos 608-619 of 2004 (1 March 2005)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA

(CRIMINAL DIVISION)
CR Nos: 608-619/2004

BETWEEN

THE POLICE
Informant

AND

STUART CHIKAMI

AND

HARRY BURGESS
Defendants

Mr T Arnold for Defendants
Mr M S Sullivan and Mr. A Manarangi for Informant
Hearing by telephone conference 1 March 2005.

JUDGMENT OF GREIG CJ

1. The US Flagged long line fishing vessel, the FV Adelita, was allegedly detected by an RNZAF Orion aircraft while on the routine patrol in the Cook Islands Exclusive Economic Zone (EEZ) on 22 November 2004. At the time of the sighting, it is claimed, the vessel's gear was not aboard the vessel which indicated that it had been fishing illegally. A second flight the following day located the vessel still inside the Cook Islands EEZ but this time with its gear aboard. Following the overflight the Cook Islands patrol boat Te Kukupa was directed to the location of the vessel and the FV Adelita was directed to Rarotonga on 24^th November 2004. The vessel entered Rarotonga on 27 November 2004 under escort of the Cook Islands Police Patrol boat.

2. A number of charges have been laid against the Defendants under the Marine Resources Act 1989 (the Act) and the vessel has been seized. An application has been made pursuant to section 40 of the Act for the release of the vessel. This is my judgment on that application.

3. Section 40 of the Act provides:

"The Court may, and in the case of a foreign fishing vessel [such as the FV Adelita]... shall, on application, order the release of any fishing vessel (together with its fishing gear, equipment, stores and cargo)... or other items seized under this Act on receipt of a bond or other form of security."

Section 40(2) provides that, in determining the value of the bond or other form of security, the Court:

"........ shall have regard to the aggregate amount of the value of the property to be released, the total maximum fine or fines provided for the offences charged or likely to be charged and the costs the prosecution would be likely to recover if a conviction: were entered, and may set the value at such aggregate amount".

4. Reference has been made by Counsel to the provisions of the 1982 United Nations Convention on the Law of the Sea (1992 UNCLOS) among other instruments. Article 73(2) of 1982 UNCLOS provides:

"arrested vessels and their crews shall be promptly released upon the posting of reasonable bond or other security"

A number of decisions of the International Tribunal of the Law of the Sea under UNCLOS were cited and they show that the Tribunal in exercise of Article 73 have regard to similar factor as are set out in the section 40 of the Act.

5. There are two considerations which have an over riding effect in this decision. One is that although the Act provides for forfeiture of a vessel as a matter of discretion under section 43 upon conviction that forfeiture has not taken place and depends on the outcome of the prosecution and the decision of the Court at the time penalty is imposed. The second factor is that the Court is mandated in this case to release the vessel so that it follows that the bond should not prevent or inhibit the release. The bond as Mr. Arnold said is to stand in the place of the vessel to await the outcome of the prosecution and any sentencing.

6. The value of the vessel was disputed. The Crown proposed a value between US$900,000.00 and US$1.2 million. That was supported by the evidence of Mr Don Silk a retired vessel owner and harbour master, currently resident in Rarotonga, Cook Islands. He with Mr John Fallon the Harbour Master of the port of Avatiu made a survey and a joint valuation report. The owner's interests put forward a number of reports and valuations on various bases including what were described as current values, auction values and forced sale values. The range of these was between US$374,500.00 and US$196,000.00.

7. The owner's valuations are supported by comparative figures and other material which tends to confirm the market conditions internationally. I accept that the valuers are of experience and qualification in the profession of ship valuation. The Crown's valuations are not supported by comparative figures or evidence in any particularity and although the two gentlemen are no doubt with great experience in fishing and boat lore they have no formal qualification or it seems experience in the day to day profession of ship valuation. I prefer and accept the owner's evidence in preference to that of the Crown.

8. There was evidence of a declared insurance value of US960, 000.00 under an insurance policy which had been the basis of Mr Chikami's assertion in his first affidavit as to the value of the vessel. Whatever may be the position as to the recovery from the insurer on a total loss, actual or constructive, and the conjecture as to how the insured value was fixed I do not consider that sum is relevant to the consideration I have to make. It is not the forced sale value which is to be chosen though the market value is also not necessary the right basis either. The fact is that the market will depend on the actuality of the hypothetical sale. That includes the fact that the vessel is in Avatiu, not operational, to be sold by the Government not the owner or trader and no doubt with the need to sell without undue delay. Possible purchasers would know the facts and the unusual nature of the sale. That is not the market of an ordinary willing seller and willing buyer. I fix the value of the vessel as it was valued at the sum of US$320,000.00 which at 0.6853 quoted for seller at 1 March 2005 amounts to NZ$4669500.00.

9. The maximum fines for offences under the Act are substantial and speak to the gravity of the offences and the need for deterrence and the imposition of penalties which are more than what might be termed a license fee for the taking of the fish. Mr Sullivan in his submissions stated the total maximum fines provided for the offences charged that relate to the vessel amount to NZ$2.8 million made up as follows:

a. Stuart Chikami

i. CRNs ending numbers 611 & 613; 2 x NZ$500,000 = NZ$1 million.

ii. CRN ending number 612; 1x minimumNZ$100,000 = NZ$100, 000.

b. Harry Burgess

i. CRNs ending numbers 618 & 619; 2 x NZ$250,000 = NZ$500,000

ii. CRNs ending numbers 614 & 617; 2 x NZ$500,000 = NZ$1 million

iii. CRNs ending numbers 6'15 & 616; 2 x minimum NZ$100,000 = NZ$200,000

It is to be noted that the actual owner of the vessel, a company incorporated in Nevada, is not a defendant. Mr Chikami who was not on the vessel at any relevant time but who was in Rarotonga after the vessel was seized was made a defendant as falling within the definition of owner in the Act. Mr Burgess is the Master or Skipper of the boat and was on board at the relevant time. Both Defendants have been bailed. Clearly the aggregate of likely maximums and the provision for minimums is very large.

10. It is estimated that the costs of the prosecution will be NZ$240,000.00 which includes solicitor and Counsel fees, costs of naval intervention and port and other charges. Mr Arnold has challenged the right to recover any of these and Mr Sullivan has not attempted to respond to that save to submit that the estimated costs emphasise the gravity of the matter and its importance to the Cook Islands.

11. The Crown proposed a bond in the sum of NZ$1 million of which $250,000.00 be paid in cash and the rest on a bond. Mr Arnold is his submission proposed a cash sum of NZ$450,000.00.

12. Section 40(3) requires the Court to have regard to the aggregate of the sums I have been discussing and they are to be stated in the order for release in so far as they are attributable to the heads of assessment. It is clear that the aggregate "may" be set as the value of the bond which allows discretion to fix what the Court deems a reasonable amount in reflection of the UNCLOS provisions. Section 43 (4) gives an implication that the bond may be less as the Court can order the payment of the difference between the bond and the value of the forfeited property if that is larger. An amount in excess of the value of the vessel seems to me to be unreasonable in itself because it is the release of the vessel which is in issue. It is the bond which replaces the vessel pending the outcome. To include in the bond the maximum fines rather than the likely actual fines extends the purpose beyond the substitution of the vessel. That is all the more so when the fines are to be imposed not on the owner but the master and the deemed owner who happened to be in the jurisdiction. I note that in the Volga case (The Volga Case (Russian Federation v Australian) Prompt Release (2002) the amounts proposed in respect of the crew were set aside in the decision as to the amount of the bond. I note however that in the UNCLOS cases and others cited that the bond has exceeded the value of the vessel. As I have said the bond must not prevent the release. Like bail bonds they must not be of an amount which impedes the release of the defendant or the vessel in this case. On the other hand it should not be of an amount which might encourage the defendant to ignore the proceeding and forfeit the bond as a form of licence fee. There is little evidence as to the financial position of the defendants or the actual owner of the vessel. That there is some asset base is clear if only from the fact that there is available a sum of $450,000.00 in cash. That Mr Chikami has some assets in New Zealand is on the record and there must be some reasonable asset base in what has been referred to as the family which has it appears a good reputation in the fishing industry.

13. Having taken into consideration the matters I have to and the submissions of Counsel I fix the amount of the bond in the sum of NZ$650.000.00 of which at least half is to be in cash and the rest by way of a bond given by a satisfactory bondsman. The form of the bond and the terms of cash payment to be settled between Counsel and failing agreement by the Court.

14. The question of the fish and the proceeds I have not dealt with as I believe that is a separate matter which is apart from the release of the vessel and the bond. It is understood that the fishing gear will be released with the vessel. The Crown is to rely on photographs of that gear for evidence in the prosecutions. The question of sea plot data, NOOA log books and other documents which are required for safe and lawful sailing of the vessel are to be matter for agreement and failing agreement for decision by the Court. Pursuant to section 40 (4) of the Act this order for release sloes not include the DELL Computer and its contents, the log books and other documents and material which is required for evidential purposes.

15. Leave is generally reserved to either party to apply for directions and elucidation of this order and judgment. Costs are reserved.

LAURIE GREIG CJ