Austral Fisheries Pty Ltd v Commissioner of Territory Revenue - [2023] NTSC 103

CITATION:Austral Fisheries Pty Ltd v Commissioner of Territory Revenue [2023] NTSC 103
PARTIES:AUSTRAL FISHERIES PTY LTD
(ACN 008 989 982)

v

COMMISSIONER OF TERRITORY REVENUE

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT exercising Territory jurisdiction
FILE NO:2023-01528-SC
DELIVERED:  14 December 2023
HEARING DATE:  28 September 2023
JUDGMENT OF:  Barr J
CATCHWORDS:

STAMP DUTY - Appeal against disallowance by delegate of the Commissioner of objection to stamp duty assessment – Whether stamp duty applies to the transfer of quota units in the Demersal Fishery and Timor Reef Fishery – Whether delegate erred in characterising quota units as ‘dutiable property’ under s 4(1)(ga) Stamp Duty Act 1978 – Held no error in characterisation – Appeal dismissed – Decision of the delegate confirmed.
Fisheries Act 1988 (NT)
Fisheries Legislation Amendment Act 2016 (NT) s 69
Fisheries Legislation (Consequential Provisions) Act 1991 (Cth) s 7(4)(a)
Fisheries Regulations 1992 (NT) regs 102, 105, 106, 107A, 107B, 107C,
107L, 141B, 141E, 141F, 141H, 141J, 141JA, 141JE
Stamp Duty Act 1978 (NT) s 4(1), s 5(1), sch 1 cl 1,
Taxation Administration Act 2007 (NT) s 115(1)(b), s 127(a)

Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194
CLR 355, cited.

Northern Territory, Parliamentary Debates, Legislative Assembly, 20 April
2016, 8113- 8116, (Gary Higgins, Minister for Primary Industry and
Fisheries), referred to.
REPRESENTATION:
Counsel:
Appellant:T Silvester
Respondent:  H Baddeley
Solicitors:
Appellant:Cocks Macnish
Respondent:  Solicitor for the Northern Territory
Judgment category classification:    B
Judgment ID Number:  Bar2313
Number of pages:  11

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Austral Fisheries Pty Ltd v Commissioner of Territory Revenue [2023] NTSC 103
No. 2023-01528-SC

BETWEEN:

AUSTRAL FISHERIES PTY LTD
(ACN 008 989 982)

Appellant

AND:

COMMISSIONER OF TERRITORY REVENUE

Respondent

CORAM: BARR J
REASONS FOR JUDGMENT
(Delivered 14 December 2023)

This is an appeal pursuant to s 115(1)(b) Taxation Administration Act 2007 against the disallowance by a delegate of the Commissioner of the appellant’s objection to an assessment of stamp duty in respect of an agreement dated 12 June 2022.
Background
The Fisheries Regulations 1992 fix the boundaries of the Demersal Fishery area and the Timor Reef Fishery area, and declare that the “industry of taking fish” in those areas is respectively the ‘Demersal Fishery’ and the ‘Timor Reef Fishery’.[1] For the Demersal Fishery, the total amount of fish that may be taken during a licence year, under all licences, is 400,000 kg of goldband snapper; 2,499,980 kg of red snapper, and 914,960 of grouped fish.[2] For the Timor Reef Fishery, the total amount of fish that may be taken during a licence year, under all licences, is 899,998 kg of goldband snapper; 1,300,002 kg of red snapper, and 415,008 kg of grouped fish.[3]
Management of the total allowable catch involves the use of ‘fishery units’, each of which corresponds to 1 kg of fish within the species referred to. For example, in the Demersal Fishery, there are a total of 400,000 fishery units for golden snapper, corresponding to the total allowable annual catch of 400,000 kg. A fishery unit entitles the holder of the relevant fishing licence to which the unit is attached to be allocated a share of the total allowable catch for the species group to which the unit relates.[4] The allocation is done on 1 July in each licence year by a statutory authority, known as the ‘Joint Authority’.[5] A quota unit entitles the holder of the relevant fishing licence to take 1 kg of fish from the species group to which the quota unit relates from the Demersal Fishery area or Timor Reef Fishery area, as the case may be.[6]
The regulations set out a formula for the number of quota units for each species group to be allocated, as follows:[7]
The number of quota units for each species group to be allocated is the number calculated in accordance with the following formula:
A = L ÷ T x TAC
where:
A is the number of quota units for the relevant species group to be allocated to the DF licence.
L is the number of fishery units for the relevant species group attached to the DF licence on the date of the allocation before any transfers of fishery units to or from the licence take effect.
T is the total number of fishery units for the relevant species group as mentioned in regulation 107.
TAC is the total allowable catch for the relevant species group.
If, as in the present case, a licence holder held 90,000 fishery units for the goldband snapper species, the calculation is as follows:
Number of quota units = 90,000 ÷ 400,000 x 400,000 [kg] = 90,000
It can be seen that, although the regulations do not simply provide that the quota unit entitlement for the relevant species group corresponds with the number of fishery units attached to the licence, that is the result.
A person may make application to the Joint Authority, which may then grant a licence entitling the person to ‘participate’ in the Demersal Fishery and the Timor Reef Fishery.[8] Once granted, the licence has attached the number of fishery units for the relevant species group.
Under the agreement referred to in [1], the appellant purchased, inter alia, 90,000 quota units in the Demersal Fishery and 253,500 quota units in the Timor Reef Fishery. On 4 July 2022, the appellant lodged for assessment the agreement and transfer forms for the transfer of the quota units. The Commissioner subsequently issued a notice of assessment of stamp duty payable under the Stamp Duty Act 1978 in an amount of $329,882 on the basis that the quota units were ‘dutiable property’ within the definition of that term contained in s 4(1)(ga) of the Stamp Duty Act 1978 at the relevant time. The appellant’s objection to the assessment was disallowed by a delegate of the Commissioner.
Issues on appeal
The appellant contends that, in making the Decision, the delegate of the Commissioner erred by characterising the quota units as ‘dutiable property’. The appellant submits that, properly construed, the quota units were not ‘dutiable property’ within the meaning of the Stamp Duty Act 1978, and that neither the agreement nor any transfers it contemplated was a dutiable instrument liable to duty under the Act.
Under s 5(1)(a) Stamp Duty Act 1978, stamp duty is imposed on dutiable instruments. Clause 1(1) of Schedule 1 to the Act provides that a conveyance of ‘dutiable property’ is a dutiable instrument. Relevant to this appeal, s 4(1)(ga) of the Act provides that the following property is ‘dutiable property’:
a statutory licence or permission given, granted or issued under a law of the Territory and used in connection with a business undertaking wherever the undertaking is carried on or to be carried on, including a licence or permission for which an application for renewal is not made and the licence or permission, or a similar licence or permission, is given, granted or issued to another person where, in the opinion of the Commissioner, the giving, grant or issue amounts to or has the same effect as a transfer of the licence or permission;
The parties agree that only the first part of the definition is relevant to this appeal.[9]
It is unclear whether the word ‘statutory’ applies to both ‘licence’ and ‘permission’. In my opinion, it logically applies to both. However, whether property is a ‘permission’ or a ‘statutory permission’, it is qualified by the description which follows: “given, granted or issued under a law of the Territory”. It would thus appear that a ‘statutory licence’ and a ‘permission’ (or ‘statutory permission’) are very similar. The fact that the property referred to in s 4(1)(ga) extends beyond licences to include permissions means that a wider range of property rights (statutory licences, permits and authorisations) are caught by that paragraph.
Counsel for the Commissioner submits that a quota unit is a ‘statutory permission’. A quota unit is said to be properly characterised as ‘[a] permission’ because a quota unit permits the holder of a fishing licence to actually catch fish.[10] In substance, that is a ‘permission’. Quota units are “issued under a law of the Territory”, even though quota units, attached to fishery units, are allocated annually (on 1 July each year) and their allocation is automatic. The fact that the process is automatic does not affect the characterisation of a quota unit as a ‘permission’ or a ‘statutory permission’. Nor does the fact that the fishing licence is the basal authorisation mean that a quota unit is not a statutory permission.
The appellant submits that it is the relevant fishing licence which provides formal authorisation for a person to engage in fishing activity and take any of the named species groups, activities which would otherwise be unlawful.[11] On that basis, the appellant submits that “the permission to take fish is the fishery licence itself”, and that “neither quota units nor fishery units confer permission upon the holder to do or not do something”.[12] The appellant further submits that fishery units and quota units “merely determine the extent of the entitlement to take fish but [are] not the authority or ‘permission’ to take fish”.[13] At another point, the appellant submits that quota units are “tools for the management of the DF and the TRF [Demersal Fishery and Timor Reef Fishery] only as to the quantitative extent” of the licence holder’s entitlement to take fish, and “do not authorise the taking of fish or the undertaking of ‘fishing operations’ in the DF or the TRF”.[14]
It is difficult to reconcile the appellant’s submissions with sub-regulation 107B(1) in the case of the Demersal Fishery and sub-regulation 141J(1) in the case of the Timor Reef Fishery. I extract below sub-regulation 107B(1), noting that it is in substance the same as sub-regulation 141J(1):
A quota unit is a unit that, until it is used or expires, entitles the holder of the DF licence to which the unit is attached to take 1 kg of the species group to which the quota unit relates from the Demersal Fishery area in accordance with this division.
It can be seen that a quota unit ‘entitles’ the licence holder to ‘take’, that is catch, 1 kg of the applicable species group. Contrary to the appellant’s submission, a quota unit does authorise the taking of fish by the licence holder. It is tolerably clear that the function of a quota unit is to provide the licence holder with permission to do something which would otherwise not be permitted. It is true that quota units determine the extent of the entitlement to take fish, but they also provide the entitlement. I accept the Commissioner’s submission that it is only by holding quota units that the licence holder is permitted to actually take fish and even to undertake a fishing voyage.[15]
In addition to the argument referred to in [14] above, the appellant submits that only permanent transfers of fishing licences are dutiable under the Stamp Duty Act 1978.[16] The statutory context is that an instrument (any document) evidencing a conveyance of dutiable property is a ‘dutiable instrument’ and thus liable to duty under the Stamp Duty Act 1978.[17] A ‘conveyance’ includes a transfer or assignment of property.[18] An agreement to make a conveyance is also a ‘conveyance’ for stamp duty purposes.[19] The appellant refers to the definition of ‘agreement, in relation to a conveyance’, in s 4(1) of the Act, which includes ‘an application for approval to transfer a licence under the Fisheries Act’.[20] That paragraph previously read:[21]
an application to transfer a licence under the Fisheries Act or to transfer a share, unit or other right or interest attaching to such a licence.
The appellant’s submission places weight on the narrowing of the definition by the deletion of the words “or to transfer a share, unit or other right or interest attaching to such a licence” to then argue that the amendment had the effect of abolishing stamp duty on transfers of all forms of fishing entitlements other than licences. The appellant contends that the legislative intent was clear that the Stamp Duty Act 1978 should deal only with transfers of licences and not quota units.
The change in definition relied on by the appellant was effected by s 69 Fisheries Legislation Amendment Act 2016, which by reference to Schedule 3 of the Act made consequential amendments to the Stamp Duty Act 1978. I have considered the Minister’s second reading speech and the explanatory statement tabled,[22] and have not been able to discern any identified mischief sought to be rectified or other stated legislative purpose for the amendments. There is nothing in the extrinsic materials which appears to support the appellant’s submission. Moreover, in terms of legislative policy and drafting, it would be an unorthodox approach to exempt entitlements such as quota units from the operation of the general provisions of the Stamp Duty Act 1978 in such an oblique way as that contended for by the appellant.
The appellant also refers to the fact that temporary transfers of licences issued under the Fisheries Act 1988 are expressly exempt from duty.[23] The appellant’s summary submission in relation to this point is as follows: [24]
This treatment of the transfer of licences under the Fisheries Act for duty purposes, coupled with the absence of clear and unambiguous language directed at other types of rights, privileges or entitlements that may arise under that Act, reveal that the Stamp Duty Act is concerned, with respect to fisheries, only with the permanent transfer of licences.
It follows that it is not concerned with quota units (or fishery units).
Counsel for the Commissioner submits that the appellant’s submissions summarised in [17] – [20] are based on a fundamental misconception that the specific provisions in the Stamp Duty Act 1978 relating to the transfer of licences under the Fisheries Act 1988 mean that the general provisions of the Stamp Duty Act 1978 do not apply in relation to quota units in the respective fisheries, even though quota units come within the definition of ‘dutiable property’ and are otherwise subject to stamp duty under the general provisions of the Act.[25] The Commissioner acknowledges that the Stamp Duty Act 1978 expressly exempts the fixed period (temporary) transfer of a licence,[26] but submits that the exemption is limited by its own terms and does not purport to apply to the transfer of quota units under the provisions of the Fisheries Regulations 1992. Moreover, the Commissioner points out that the exemption is only required because the transfer of a licence, even for a fixed period, is a conveyance of dutiable property and would otherwise be dutiable.
I accept the submissions summarised in the previous paragraph.
In oral submissions, the appellant argued that, properly construed, the Stamp Duty Act 1978 only renders permanent transfers of a licence dutiable. On that basis, counsel for the appellant sought to characterise the transfer of quota units as a temporary arrangement, akin to a seasonal lease over the right to take fish from the respective fisheries in allocated proportions. I reject that characterisation. It is true that quota units are allocated automatically to the holder of a fishery unit on 1 July each year and that they expire on 30 June the following year, unless fully utilised before then. However, the agreement referred to in [1] and [8] above provided for the permanent transfer of quota units. The appellant’s oral submission fails to distinguish between (1) the permanent transfer of an ephemeral but nonetheless valuable property right and (2) the temporary transfer of property by the lease of a fishing licence.
I am satisfied that the quota units, referred to in [8] above, come within the definition of ‘dutiable property’ in s 4(1)(ga) of the Stamp Duty Act 1978. The result is that the appeal should be dismissed.
Pursuant to s 127(a) Taxation Administration Act 2007, I confirm the decision of the delegate of the Commissioner to disallow the appellant’s objection to an assessment of stamp duty in respect of the agreement dated 12 June 2022, referred to in [1] above.
I will hear the parties in relation to costs.
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[1]Reg 102 (Demersal Fishery); reg 141B (Timor Reef Fishery).

[2]Reg 107A. The reference to “grouped fish” is to fish other than barramundi, goldband snapper, king threadfin, red snapper, Spanish mackerel, shark and mud crab.

[3] Reg 141H.

[4] Reg 106(1) for the Demersal Fishery; reg 141F(1) Timor Reef Fishery.

[5]The ‘Joint Authority’ is the Northern Territory Fisheries Joint Authority established under s 12D(1) Fisheries Act 1952 (Cth) (repealed) and continued in existence by s 7(4)(a) Fisheries Legislation (Consequential Provisions) Act 1991(Cth).

[6]Reg 107B(1) for the Demersal Fishery; reg 141J(1) Timor Reef Fishery.

[7] Reg 107C(3), for the Demersal Fishery. Reg 141JA(3), for the Timor Reef Fishery, is in almost identical terms.

[8] See Reg 105 for the Demersal Fishery; Reg 141E for the Timor Reef Fishery.

[9] Appellant’s submissions, par 76; respondent’s submissions, par 39.

[10] The Commissioner refers to reg 107B(1) for the entitlement to take for the Demersal Fishery and reg 141J(1) for the Timor Reef Fishery.

[11] Appellant's submissions, par 82.

[12]Appellant's submissions, par 85.

[13] Ibid.

[14] Appellant's submissions, par 31.

[15] Respondent's submissions, par 23. It may be noted that regs 107L and 141JE require that there be a minimum number of quota units attached to the relevant fishing licence “at the start of the voyage”.

[16] Appellant's submissions, par 92.

[17] Stamp Duty Act 1978, s 5(1)(a).

[18] Definition par (b).

[19] Definition par (f).

[20] Stamp Duty Act 1978, s 4(1)(c). Note this par was subsequently omitted by Act 17/23, which commenced 9 May 2023.

[21] Stamp Duty Act 1978, s 4(1)(c) as it stood immediately prior to the commencement of the Fisheries Legislation Amendment Act 2016, on 1 January 2017 (Act 23/16).

[22]Northern Territory, Parliamentary Debates, Legislative Assembly, 20 April 2016, pp 8113-8116, (Gary Higgins, Minister for Primary Industry and Fisheries). In relation to clause 69 of the Bill, the explanatory statement merely states: “Clause 69 provides for Schedule 3 to the Bill to have effect, which makes consequential amendments to the Marine Act and Stamp Duty Act.”

[23] This was the case as at 12 June and 2022 and up to the commencement of the Stamp Duty Amendment Act 2023 on 9 May 2023. The relevant Schedule 2 “exempt instrument or transaction”, as per item 11, was as follows: “Transfer of a licence for a fixed period under section 16A of the Fisheries Act unless, in the opinion of the Commissioner, the transfer forms part of a wider transaction amounting, in effect, to the permanent transfer of the licence.”

[24] Appellant's submissions, pars 93, 94.

[25]In this context, the Commissioner makes reference to Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [70], per McHugh, Gummow, Kirby and Hayne JJ, for the specific proposition that a legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.

[26]The full text of the exemption is set out in footnote 22 above.