Sajo Oyang Corp's fishing vessels, the Oyang 70, the Oyang 75, and the Oyang 77, were operating in New Zealand's Exclusive Economic Zone (EEZ). The Oyang 70 sank. The masters and officers of the Oyang 75 and the Oyang 77 were convicted of offences against the Fisheries Act 1996 (the Fisheries Act), and these two vessels were forfeited to the Crown. The Oyang 77's 24 crew members, and two of Oyang 70's former crew members, sought relief against forfeiture under s 256 of the Fisheries Act. They claimed they had 'an interest, as determined by the Employment Relations Authority or any court, … in unpaid wages'. The Ministry for Primary Industries and Sajo Oyang Corp resisted the wages claims.

In the District Court, the Judge held that the crew members had an 'interest' only in the vessels on which they had worked, because the Fisheries Act required a direct link between the unpaid wages interest and the forfeit property 'used in the commission of the offence'. On appeal, the High Court held that the context and purpose of the Fisheries Act included all relevant admiralty law principles, which meant that 'forfeit property' includes 'property forfeit to the Crown which immediately before forfeiture was in the beneficial ownership of the party who, but for the forfeiture, would have been liable under a claim in rem'. In other words, the crew members had an interest in the Oyang 75 as a sister ship of the vessels on which they had actually worked. Sajo Oyang Corp appealed this finding to the Court of Appeal. The Court of Appeal rejected the High Court's broader interpretation of 'forfeit property' as including sister ships, preferring instead the District Court's narrower interpretation requiring the crew members to demonstrate a direct link between their unpaid wages interest and the forfeit property used in the commission of the offence. The crew members then sought and obtained leave to appeal to the Supreme Court.

Held: The appeal is allowed. The judgment of the Court of Appeal is set aside (save as to the direction that the proceedings be transferred to the High Court) and the judgment of the High Court is reinstated.

The Fisheries Act regulates the activities of foreign fishing vessels in the EEZ (see art 73 of UNCLOS) and sets out the procedure for forfeiture and relief. The definition of 'interest' in s 256(1)(b)(ii) does not, as stated, include any interest, other than ownership, for any foreign-owned fishing vessel. Section 256(1)(b)(ii) of the Fisheries Act provides that claims for wages determined by the Employment Relations Authority or any court constitute an 'interest' irrespective of whether they gave rise to a maritime lien, or whether proceedings in rem had been commenced before forfeiture; forfeiture on a statutory in rem claim has the same effect on a maritime lien claim ie the associated rights come to an end. Its language does not hint at an intention to only encompass 'other vessel claims' where proceedings in rem had been commenced before forfeiture.

The statutory in rem claims recognised by s 5(2) of the Admiralty Act 1973 (the Admiralty Act) have their origin in the Administration of Justice Act 1956 (UK), which reflected the Arrest Convention 1952. 'Maritime lien' is defined in s 2 of the Admiralty Act in this way: 'maritime lien, without derogating from the generality of the term, includes a lien in respect of bottomry, respondentia, salvage of property, seamen’s wages, and damage'. This non-exclusive definition effectively incorporates the existing law as to what claims give rise to maritime liens, and s 5(1) of the Admiralty Act plainly proceeds on the same basis. Since a wages claim gives rise to a maritime lien in respect only of the relevant vessel, claims in rem against sister ships can be brought only under s 5(2) of the Admiralty Act, and are thus necessarily subject to limits expressed in that subsection. It follows that a sister ship claim will be defeated if there is a change in beneficial ownership after the cause of action arises but before the proceedings are issued.

When the operator of a vessel is financially distressed, there is sometimes a practical necessity for third parties to pay the wages (including repatriation costs) of the crew members. This tends to occur in two situations: (a) the vessel has not been arrested but wages are paid by a third party, usually to avoid the arrest of the ship at the suit of the crew; and (b) when a vessel has been arrested, those charged with its control and/or sale sometimes pay unpaid wages and repatriation costs given that the crew members would otherwise either issue in rem proceedings themselves or perhaps occupy the vessel and refuse to leave until paid. There are a number of cases in which those who have made such payments have sought to claim the benefit of the maritime liens to which the crew members had been entitled in respect of their wages. Those who make such payments do not thereby derive a direct entitlement to a maritime lien. This is because the recognised maritime lien categories are not engaged. Such payments may in some circumstances give rise to a claim recognised by ss 4 and 5 of the Admiralty Act (for instance under s 4(1)(p) which encompasses any 'claim by a master, shipper, charterer, or agent in respect of disbursements made on account of a ship'). There is, however, no general entitlement to recover such payments. As well, the authorities are generally to the effect that those who make such payments are not subrogated to any maritime liens which the recipients may have had, and that there is no right to assign maritime lien claims, albeit that there is some controversy as to these points. A person who contemplates making such payments in respect of a ship that has been arrested may apply to the court to sanction the payments and, upon such sanction being given and the payments being made, the payer is entitled to reimbursement from the proceeds of the sale of the ship.

'Interest' in s 256(1)(b)(ii) of the Fisheries Act should include claims for wages, irrespective of whether they gave rise to a maritime lien, or if proceedings in rem had been commenced before forfeiture. Such an interpretation will improve the recovery of wages by crews under the Admiralty Act and enable third parties (other than the employer) to recover any support and repatriation costs for foreign crews that may be incurred. The responsibility for supporting and repatriating foreign fishing crews ought to lie with the fishing industry.

However, such an interpretation does result in an asymmetry in the operation of s 256 of the Fisheries Act between foreign and locally-owned fishing vessels. This asymmetry is: (a) a necessary consequence of s 256(1)(b) when read as a whole; (b) not a surprising outcome of a Parliamentary process focused almost exclusively on the position of the crew of forfeited foreign vessels; and (c) consistent with the vulnerable position of such crew and the reality that, at the time of forfeiture, such vessels may be beyond the practical reach of any wages claims.