Bienke v Minister for Primary Industries and Energy
[1996] FCA 35
•8 FEBRUARY 1996
CATCHWORDS
CONSTITUTIONAL LAW - Acquisition of property on just terms - Constitution of the Commonwealth of Australia s.51(xxxi) - Northern Prawn Fishery Management Plan - Amendment of Plan for reduction of units of fishing capacity making fishing boat licence unusable - nature of fishing boat licence - whether interest in boat licence in the nature of antecedent proprietary interest - whether licence analogous to a profit a prendre - Fisheries Levy Act 1984 - imposition of levy on dealings in units of fishing capacity - whether "acquisition of property" - whether quid pro quo provided for imposition of levy.
ADMINISTRATIVE LAW - administrative tort - whether damages available for negligent promulgation of legislation - distinction between operational and discretionary exercise of power - whether amendments to Northern Prawn Fishery Management Plan ultra vires s.5B Fisheries Act 1952 - whether economic efficiency of fishery a permissible objective of amendments to plan - whether amendments void for unreasonableness -whether amendments inappropriate or disproportionate.
RESTITUTION - whether levy paid under mistake of law - whether levy lawfully exacted.
APPEAL - finding of fact by trial judge as to credibility of witness.
Constitution of the Commonwealth of Australia, s 51(xxxi)
Fisheries Act 1952 (Cth)
Fisheries Levy Act 1984 (Cth)
Northern Prawn Fisheries Management Plan 1989 (Cth)
Fisheries Levy (Northern Prawn Fishery) Regulations (Cth)
Air Caledonie International v The Commonwealth (1988) 165 CLR 462
Aktien-Zuckerfabrik Schoppenstedt v Council of the European Communities [1971] ECR 975
Anns v Merton London Borough Council [1978] AC 728
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480
Bank of New South Wales v The Commonwealth (1948) 76 CLR 1
Banks v Transport Regulation Board (Victoria) (1968) 119 CLR 222
Bayerische HNL Vermehrungsbetriebe GMbH & Co KG v Council & Commission of the European Communities [1978] 2 ECR 1209
Berryland Canning Co Limited v The Queen (1974) 44 DLR (3d) 568
Farrington v Thomson [1959] VR 286
Bourgoin SA v Ministry of Agriculture Fisheries & Food [1986] QB 716
Bowen v City of Edmonton (1977) 80 DLR (3d) 501
Bryan v Maloney (1995) 128 ALR 163
- 2 -
Coleman v Gray, (1994) 55 FCR 412.
Davis v The Commonwealth (1988) 166 CLR 79
Devries v Australian National Railways Commission (1993) 177 CLR 472
DGV, Deutsche Getreideverwertung und Rheinische Kraftfutterwerke GMbH v Council and Commission of the European Communities [1979] 3 ECR 3017
Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378
Amylum NV, Tunnel Refineries and Kuninklijke Scholten-Honig NV v Council & Commission of the European Communities [1982] 2 CMLR 590
Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297
Goodman v Mayor of Saltash (1882) 7 App Cas 633
Harper v Minister for Sea Fisheries (1989) 168 CLR 314
Hawkins v Clayton (1988) 164 CLR 539
Health Insurance Commission v Peverill (1994) 179 CLR 226
James v The Commonwealth (1939) 62 CLR 339
JRS Holdings Ltd v District of Maple Ridge (1981) 122 DLR (3d) 398
Kwong v The Queen in Right of Alberta [1979] 2 WWR 1
Minister of National Revenue v Wright's Canadian Ropes Ltd [1947] AC 109
Minister for Primary Industries & Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381
Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151
Murphy v Brentwood District Council [1991] 1 AC 398
Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155
Nationwide News Pty Ltd v Wills (1992) 177 CLR 1
Parramatta City Council v Lutz (1988) 12 NSWLR 293
Regional Municipality of Peel v Her Majesty the Queen in right of Canada (1992) 98 DLR (4th) 140
San Sebastian Properties Pty Ltd v The Minister Administering the Environmental
Planning and Assessment Act 1979 (NSW) (1986) 162 CLR 340
Sutherland Shire Council v Heyman (1985) 157 CLR 424
The State of South Australia v Tanner (1988) 166 CLR 161
Welbridge Holdings Ltd v The Metropolitan Corporation of Greater Winnipeg (1971) SCR 957
Wyong Shire Council v Shirt (1980) 146 CLR 40
BRIAN CLARENCE BIENKE & ORS v MINISTER FOR PRIMARY INDUSTRIES AND ENERGY & ORS
NG 657 of 1994
Black CJ, Davies & Sackville JJ.
8 February, 1996
Sydney
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No G 657 of 1994
) No G 547 of 1993
GENERAL DIVISION )
On appeal from a single judge of the Federal Court of Australia
BETWEEN: BRIAN CLARENCE BIENKE
First Appellant
IRENE ANNE BIENKE
Second Appellant
BRIAN TREVOR BIENKE
Third Appellant
AND: THE MINISTER FOR PRIMARY INDUSTRIES AND ENERGY
First Respondent
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Second Respondent
COMMONWEALTH OF AUSTRALIA
Third Respondent
Coram: Black CJ, Davies & Sackville JJ.
Date: 8 February, 1996
Place: Sydney
MINUTES OF ORDER
THE COURT ORDERS THAT:
The appeal be dismissed with costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No G 657 of 1994
) No G 547 of 1993
GENERAL DIVISION )
On appeal from a single judge of the Federal Court of Australia
BETWEEN: BRIAN CLARENCE BIENKE
First Appellant
IRENE ANNE BIENKE
Second Appellant
BRIAN TREVOR BIENKE
Third Appellant
AND: THE MINISTER FOR PRIMARY INDUSTRIES AND ENERGY
First Respondent
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Second Respondent
COMMONWEALTH OF AUSTRALIA
Third Respondent
Coram: Black CJ, Davies & Sackville JJ.
Date: 8 February, 1996
Place: Sydney
REASONS FOR JUDGMENT
THE COURT:
This is an appeal from a judgment of a judge of the Court, Gummow J, who considered the validity of a statutory scheme for the regulation of the Northern Prawn Fishery ("the NPF"). The judgment is reported at (1994) 125 ALR 151. The factual matters relating to the regulatory scheme, and the appellants' place in that scheme, are of some complexity. It is necessary, therefore, to provide some background before examining the appellants' claims.
GENERAL BACKGROUND
The first appellant has been a professional fisherman for over 40 years and, at all times material to this litigation, had carried on business in partnership with the second appellant, his wife, and the third appellant, his son. From 1978 the appellants owned and operated a 19.8 metre prawn trawler known as the "Deb Rene-Adele". At various times the vessel was licensed under applicable State and federal legislation to fish in the NPF, as well as in other waters off the Australian coastline.
This appeal is concerned with a number of issues arising from the NPF Management Plan 1989 ("the NPF Plan"), which regulates fishing operations in the NPF. As found by Gummow J., the NPF is one of the largest Australian fisheries, extending across virtually all of the waters of Northern Australia from Cape Londenderry in Western Australia to Cape York in Queensland. The NPF covers an area of about one million square kilometres and contains five main species of prawns. In 1991/1992, production was worth over $81 million, 90 per cent of which was exported, principally to Japan.
The NPF Plan was promulgated pursuant to s.7B of the Fisheries Act 1952 (Cth) ("the Fisheries Act"). While that Act was repealed by s.3 of the Fisheries Legislation(Consequential Provisions) Act 1991 (Cth), as Gummow J. explained (at 155) the repeal has had a limited effect. Thus the provisions of the NPF Plan must be considered for the purposes of the present legislation.
THE FISHERIES LICENCE
At all relevant times, s.13(1) of the Fisheries Act prohibited a person from using a boat in an area of proclaimed waters for taking fish, unless the person was, or was acting on behalf of, the holder of a licence under s.9(2). Section 9(2) authorised the Minister or Secretary to grant to a person a licence in respect of a boat permitting the use of the boat by that person, or someone acting on that person's behalf, for taking fish in proclaimed waters. The licence was to be subject to such conditions as were specified in the licence or prescribed: s.9(5)(a). The licence took effect on the day specified in the licence and remained in force for a maximum period of twelve months: s.9(5)(b), s.9(5)(c)(i). The licence could be renewed on application: s.9(6B). The Fisheries Act provided that, where a levy was payable under the Fisheries Levy Act 1984 (Cth) ("the Levy Act"), the levy had to be tendered before a boat licence was granted, endorsed, renewed, transferred or varied: s.9(8AA), (8AB), (8ABA), (8AC), (8AD). The Levy Act imposed a levy, inter alia, upon the grant or renewal of a boat licence pursuant to s.9(2) or s.9(6B) of the Fisheries Act.
The fishing boat licence under the Fisheries Act obtained by the appellants for the Deb-Rene-Adele appears to have been renewed with effect from 12 January 1993, and to have had
an expiry date of 31 December 1993. The required levy was paid at or before the date of renewal. The first appellant was named as licensee. The licence, on its face, stated that it:
"authorises the use of the boat...by the licensee, or a person acting on behalf of the licensee, in proclaimed waters subject to the conditions specified in Schedule 3."
Schedule 3 (which appeared on the reverse of the licence) required the holder of the licence to notify the manager in advance of proposals, inter alia, to alter the hull or replace the engine. It also contained the following statement:
"This licence is valid only in the Northern Prawn Fishery and the operations are subject to the provisions of the Northern Prawn Fishery Management Plan and associated Fisheries Notices."
The following declaration appeared on the face of the licence, signed by a licensing officer:
"Pursuant to the Fisheries Act 1952, I, a delegate of the Secretary to the Department of Primary Industries and Energy, hereby issue to the licensee described above a Commonwealth Fishing Boat Licence, in respect of the boat described in Schedule 1 subject to any limitations contained herein and any prohibitions in force from time to time."
NORTHERN PRAWN FISHERY ("NPF") MANAGEMENT PLAN
The Fisheries Act, s.7B(1), authorised the Minister to determine a plan of management for a fishery in proclaimed waters. A management plan for the NPF was first determined by the then Minister for Primary Industry on 13 February 1986, and came into operation on 1 March 1986. The Plan included procedures for the issue of units of fishing capacity and also for their surrender by means of what was described as the Voluntary Adjustment Scheme. The Plan has been amended from time to time. The operation of the Plan is discussed in the joint judgment of Black C.J. and Gummow J. in Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151, at 154-158. The NPF Plan, as in force in April 1993, established a formula to determine the "applicable number of Class A units"
for a particular vessel: cl.4.1; Schedule 1, cl. 3.1. The formula combined "hull units" and "engine power units", each of which was to be calculated by reference to a separate formula specified, in schedule 1. As noted in Minister for Primary Industry and Energy v Davey, at 157-158, the applicable number of units represented a measure of the boat's trawling capacity.
Clause 9 of the NPF Plan provided that it was a requirement of any notice issued in respect of the Plan under s.8(1) of the Fisheries Act that the use of a boat in the fishery be prohibited, unless the applicable number of Class A units was assigned to that boat. Section 8(1)(a) of that Act authorised the Minister, by notice published in the Gazette, to prohibit the taking of fish, or of fish included in a class of fish specified in the notice. A notice designated as NPF 15 was published on 27 March 1992, pursuant to s.8(1)(a) of the Act. Clause 5 of NPF 15 prohibited the taking of prawns in an area specified in schedule 1 to the notice. Clause 7 of NPF 15 exempted from the prohibition in cl.5 the use of a boat to which the applicable number of Class A units and one Class B unit was assigned "in accordance with the NPF Plan". "The NPF Plan" was defined to mean the NPF Management Plan, as amended: cl.4.1. Similar provision was made for an area of the NPF specified in schedule 2 to NPF 15. Between them, schedules 1 and 2 to NPF 15 specified the entirety of the NPF. NPF 15 therefore imposed a prohibition on the taking of prawns in the NPF, the effect of which could be avoided only by adhering to the provisions of the NPF Plan as amended: Davey, at 157.
The effect of NPF 10, gazetted 11 December 1992, para 20B.3, was to cause the "prescribed number" of units held by a unit holder to expire on 1 April 1993. The
prescribed number was determined in accordance with a formula specified in para. 20B.2 and was to amount to 30.76% of the number of Class A units held by each fisherman. The compulsory scheme was further amended by NPF 11, published 12 March 1993, but the expiry date and the formula to calculate the "prescribed number" was not amended. The total of 70,000 Class A units was thereby reduced to 50,000. Despite the reduction in the total number of units of fishing capacity for the NPF, the "applicable number" of units for each boat remained constant. As Gummow J. found at first instance, there was at all material times a market for units in the fishery, in accordance with legal mechanisms prescribed in the NPF Plan: cll. 11, 12, 13. The options available to fishermen whose units had been reduced by 30.76%, and who wished to continue to use their boats in the NPF, were identified as follows in Davey, at 158:
"(i)they could acquire from other fishermen a sufficient number of additional units so as to maintain the "applicable number" for their boats;
(ii) if they possessed more than one boat, they could assign units amongst their remaining boats, so that at least some of their boats would still be permitted to fish;
(iii) they could reduce the engine size of their boats, so as to reduce the relevant "applicable number"; or
(iv) they could sell their remaining units to other fishermen, and cease their trawling activities in the NPF."
In fact, as will be seen, the appellants in the present case did none of these things in respect of the Deb-Rene-Adele.
UNITS AND THE DEB-RENE-ADELE
Prior to March 1993, 312 Class A units were assigned to the Deb-Rene-Adele. This was the applicable number of units for the vessel at that time. In March 1993 the appellants transferred 163 of these units to another boat owned by them, the Karamanda-Adele. The transfer was effected in order to make up the shortfall of units assigned to the Karamanda-Adele, when the reduction of 30.76 per cent occurred on 1 April 1993. The purpose was to ensure that the Karamanda-Adele retained the applicable number of units, so as to enable it to continue to be used to take prawns in the NPF on and after 1 April 1993. The remaining 149 units assigned to the Deb-Rene-Adele were also reduced by 30.76% on 1 April 1993, to 103 units. The result was that the Deb-Rene-Adele was 209 units short of the applicable number (312), required for the vessel to be used for taking prawns in the fishery.
The boat licence for the Deb-Rene-Adele expired, in accordance with its terms, on 31 December 1993. Following the expiry of the fishing boat licence for the Deb-Rene-Adele, the first appellant applied for renewal of the licence. This application was rejected on the ground that the Deb-Rene-Adele had insufficient Class A units to enable it to operate in the NPF. In March 1994, the Australian Fisheries Management Authority ("AFMA") advised the first appellant that, if he assigned to the Deb-Rene-Adele the applicable number of Class A units to enable the vessel to operate in the NPF, he could apply for and be issued with a fishing boat licence for the vessel. As we mention later, there was no precise evidence concerning the payment of the levy by the appellants in respect of the 103 units. However, we were told from the bar table that such payments had been made.
Gummow J. found that there was, both before and after 1 April 1993, a market for the sale and purchase of units of fishing capacity in respect of the NPF, in accordance with legal mechanisms described in Davey, at 157-158. In late March 1993 units were trading at $1,500 each; by August 1994 the market had recovered and units were trading at $2,300 each. On 1 April 1993, the applicants would have had to pay $313,500 to purchase the requisite units to allow the Deb-Rene-Adele to re-enter the fishery on that date. In July 1994,
because of the recovery in the market, the cost would have been $480,700. However, his Honour also found that the first appellant did not wish to purchase the additional units required to enable the vessel to operate in the fishery. Nor did he wish to sell the remaining 103 units attached to the Deb-Rene-Adele. These had a value of approximately $154,500 in April 1993, and about $236,900 in August 1994.
AMENDMENTS ULTRA VIRES
The first contention of the appellants was that the amendments made to the plan of management to reduce the number of units in the fishery to 50,000 was ultra vires because, in making the decision, the Minister did not have regard to the objectives of the Fisheries Act prescribed in s.5B. That section provided as follows:
"5BIn the administration of this Act, the Minister shall have regard to the objectives of -
(a)ensuring, through proper conservation and management measures, that the living resources of the Australian fishing zone are not endangered by over-exploitation; and
(b)achieving the optimum utilization of the living resources of the Australian fishing zone,
but shall ensure, so far as practicable, that measures adopted in pursuit of those objectives shall not be inconsistent with the preservation, conservation and protection of all species of whales."
Paragraph 7 of the NPF Plan described the objectives of the Plan in these terms:
"7.1For the purposes of subsection 7B (2) of the Act, the objectives of this plan are -
(a)to conserve the stocks of prawns in the area of the fishery;
(b)to reduce the fishing pressure on the stocks of prawns in the area of the fishery; and
(c)to promote the economic efficiency of the fishery." [Emphasis added.]
Mr D.M.J. Bennett QC, with whom Mr A.W. Street appeared for the appellants, submitted that, in referring to the promotion of the economic efficiency of the fishery, the Plan formulated pursuant to s.7B of the Fisheries Act stated an objective which was foreign
to those objectives which were permitted by s.5B of the Act. In this sense, Mr Bennett submitted that the Minister took account of an irrelevant matter. Indeed he submitted that economic efficiency in the fishery was not merely an extraneous factor to which the Minister had had regard, it was the sole or dominating factor guiding his decision.
The NPF Plan, in its original form (gazetted on 25 May 1990), included as an objective the reduction by 31 December 1993 of the total number of Class A units to not more than 70,000. By 9 November 1990 when NPF2 was gazetted, it had been decided to further reduce the number of units to 50,000. After the amendments introduced by NPF4 (gazetted 12 December 1990) and NPF10 (gazetted 11 December 1992), para 7.3 of the plan read:
"7.3Without limiting the generality of paragraphs 7.1 and 7.2, the objectives of this plan include the reduction, by 1 April 1993, of the total number of active Class A units and surplus type II units that are recorded in the Register on 13 December 1992 to not more than 50,000 through implementation of Part 7 of this plan."
As a means of achieving the objectives of the Plan, including the reduction of units to 70,000, Part 7 of the original Plan introduced a voluntary units readjustment scheme providing for the voluntary surrender of units by unitholders. As indicated earlier, that scheme was revised to become a compulsory scheme whereby, if units were not voluntarily surrendered, a proportion of the unit holdings of all participants in the fishery would be cancelled to ensure that the 50,000 units objective was met. As a result of the amendments effected by NPF4, which invited unitholders to apply for the surrender of units by 13 December 1992, about 40 boats left the fishery in 1990-1991. The main provision of the compulsory scheme, para. 20B.3 of the Plan, introduced by NPF 10, provided that, on 1 April 1993, the prescribed number of units held by each unit holder would expire. The prescribed number of units, determined in accordance with the formula set out in para. 20B.2
of the NPF Plan, amounted to 30.76% of the number of Class A units held by each fisherman.
On behalf of the appellants, it was put that the scheme operated to favour large corporate operators and that, whilst those large operators remained in the fishery with their economic interests enhanced, the smaller operators, including the appellants and the operators that were the subject of the proceedings in Davey, were prejudiced.
Evidence was adduced at the hearing before Gummow J. from a number of experts in the field of natural resources and environmental economics and several papers were tendered in evidence. In particular, there were a number of papers published by the Australian Bureau of Agricultural and Resource Economics ("ABARE") of which Mr S.D. Pascoe, one of the witnesses, had been a member. One paper, published in 1987, was entitled "Modelling Economic Behaviour in the Northern Prawn Fishery". This was followed in 1988 by a paper entitled "A Policy Model of the Northern Prawn Fishery". There were also other studies tendered, including a further paper by Mr Pascoe, "The Effectiveness of the Northern Prawn Fishery Voluntary Adjustment Scheme", presented by him at the 1988 Australian Economics Congress at the Australian National University, an article by Collins and Kloessing, also officers with ABARE, entitled "Financial Performance in the Northern Prawn Fishery - Latest Survey by ABARE", published December 1988, and a paper by Pascoe and Scott entitled "Management Options for the Northern Prawn Fishery", issued in December 1989.
The general tenor of the evidence of the witnesses was that the subject plan was based upon principles derived from what was described as "The Haynes-Pascoe Model". Thus, Mr D.E. James, whose affidavit was read on behalf of the respondents, said:
"8.The Northern Prawn Fishery is similar to many fisheries in that, without government controls, it would be an open-access common property resource. A fundamental theorem in fisheries economics is that if the fishing effort and catch are not controlled, the economic rent accruing to the industry (that is, the difference between total revenue and total costs from fishing) will be dissipated by excessive numbers of boats and overfishing. This is explained in an authoritative review article by Munro and Scott (1985) and by Clark (1976), Lecomber (1979) and Fisher (1981) among others.
...
10.Various management controls may be applied to counter the problem of rent dissipation. It must be emphasised that the problem is an economic one, not necessarily a concern about conservation of the stock. Under particular circumstances it may be possible for overfishing to result in extinction of the resource but this appears not to be the case with the Northern Prawn Fishery. There are already regulations restricting harvesting to particular times during the year as well as regulations affecting gear and fishing methods. In this respect, it is worth noting the opinion of Munro and Scott (1985) who state (p624) that: `If the authorities, i.e. the government, should intervene in the fishery to conserve the resources by imposing seasonal or yearly limits on the total harvest, but do nothing to restrict the number of fishermen and vessels competing for the limited harvests, then excess capacity is almost certain to emerge in the fishery.'
11.The theory indicates that to restore resource rents in the industry, a significant reduction in fishing effort is generally required. Furthermore, it is common for the level of effort required to achieve an economic optimum (i.e. the maximisation of rent for the fishery as a whole) to be lower than the level of effort that results in the maximum biological sustained yield.
...
23.In summary, I am of the opinion that the analysis based on the Haynes-Pascoe model is scientifically sound in view of the problems created by uncertainties in information. The model formulation reflects accepted theory of the behaviour of the fishery. The main policy recommendation of reducing fleet size to increase the economic rent is consistent with policy recommendations in fisheries throughout the world."
Experts whose reports were tendered on behalf of the appellants, for their part, criticised the Haynes-Pascoe Model and pointed to what they said were flaws they perceived in it. These aspects are discussed in greater detail below. Quite apart from the alleged theoretical problems with the Hayes-Pascoe model, however, Mr Bennett submitted that the amendment to the Plan, which brought about the reduction in the number of Class A units to 50,000, leaving the Deb-Rene-Adele 209 Class A units short of the number required for a boat licence
to take prawns in the NPF, was a policy directed solely or predominantly to the reduction of excess capacity and to the restoration of an economic rent. Mr Bennett pointed to the regulations, to which Mr James had referred in his evidence, which already restricted harvesting to two particular times of the year and to regulations which limited the fishing gear and fishing methods which could be used. The implication was that those regulations fulfilled valid conservation objectives under the Fisheries Act, whereas the limits on Class A units under the Plan were solely concerned with achieving an economic rent for holders of boat licences and were not valid.
There was no direct evidence as to the matters which the Minister took into account in the making of the decision. In the absence of credible evidence to the contrary, we would assume that the Minister complied with the duties which the Act imposed upon him: Minister of National Revenue v Wright's Canadian Ropes Ltd [1947] AC 109, at 122; Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, at 228.
Notwithstanding Mr Bennett's submission, we do not accept that the conservation of the fishery was not the principal aim of the Plan in its many forms. The fact that the Plan was introduced to reduce fishing capacity is a clear indication that the restriction of harvesting to particular times and by particular gear and fishing methods was not thought to be a sufficient means of conserving the stock. Moreover, once it is desired to regulate an industry so as to conserve and to manage the stock of the fishery, and to do so in the context of the achievement of optimum utilization of the resource, questions necessarily arise as to the most appropriate means of achieving those objectives. For example, Mr James referred to a study
by Munro and Scott which concluded that gear and season restrictions, which are not accompanied by restrictions in the number of fisherman and vessels competing, would almost certainly not prevent over-capacity emerging in the fishery. We do not accept that the objectives of the Act precluded the creation of a viable industry in which there was no over-capacity. The circumstance that a particular amendment to the management plan, viewed separately, may be seen as directed to economic efficiency does not involve the conclusion that, in the administration of the Act, the Minister failed to have regard to the objectives specified in s.5B. For the purpose of determining whether the Minister has failed to act as s.5B requires, an amendment to a plan of management for a fishery cannot be viewed in isolation from the plan that it amends.
The Minister is not precluded by the statement of objectives in s.5B of the Fisheries Act, or otherwise, from making economic efficiency an objective of the plan. The argument that the Minister was so precluded was rejected by O'Loughlin J. in Fitti v Minister for Primary Industries and Energy (1993) 40 FCR 286 at 299-300. In the appeal, reported as Minister for Primary Industry and Energy v Davey (1994) 47 FCR 151, the respondents sought to maintain the decision in their favour by arguing, pursuant to a notice of contention, that the amendment to the plan of management was not authorised by the legislation and they relied upon the arguments that had been rejected by the trial judge. In his separate judgment, Burchett J. concluded that the trial judge had rightly rejected the arguments and said (at 174) that it was "plain that the legislation contemplates the control of a fishery in the interests of conservation and also in those of economic efficiency". Black CJ and Gummow J. agreed with Burchett J, for the reasons he gave, that the argument raised by the notice of contention, that the amendment to the NPF Plan was not authorised by the legislation, failed (see at 163).
There is no reason to depart from the conclusion so recently reached by a Full Court of this court on the point and in any event we see no reason to doubt the correctness of the Full Court's conclusion. In the context of the Act as a whole, the specification in s.5B of two objectives as ones that the Minister is required to have regard to does not imply that those objectives are exclusive. Indeed, other sections of the Act, particularly sub-ss 7B(2),(3),(4) and (5) point in the opposite direction. Moreover, the expression "optimum utilisation" s.5B(b) carries with it the idea of the best or most favourable utilisation in a sense apt to include economic considerations. As Gummow J. said in the present case (at 171):
"Certainly, in my view, there may be 'optimum utilisation' by having regard to the economic interests and prosperity of those, taken as a whole, who exploit the fishery when adopting a regime for the reduction in the number of units."
What the Fisheries Act has in mind is the proper conservation and management of the living resources of an Australian fishing zone and the optimum utilisation of its living resources. That may be achieved by a plan which provides for the granting of licences, the division of fishing capacity into units of fishing capacity and the allocation of units to boats operating in the fishery. As the Plan was directed against the over-exploitation of the prawn stock by commercial fishing, it necessarily followed that consideration had to be given to the effect of the Plan and its implementation upon those persons whose livelihood depended upon fishing in the NPF. Issues of capital investment and the relationship between profit and effort were relevant, and likely to be influential in the determination of the Plan adopted. The most efficient means of exploiting, but not over-exploiting, the stock of prawns in the fishery was a relevant factor to be considered.
UNREASONABLENESS
Mr Bennett submitted that the NPF Plan was void for unreasonableness in that the amendments made had the objective of economic efficiency devoid of any conservation objective and that the economic efficiency objective had been pursued in a manner which involved a loss of units and licenses without compensation. Mr Bennett further submitted that there were scientific flaws reflected in the model on which the amendments to the Plan were founded.
A majority of the Justices of the High Court of Australia appear to accept the view that legislation including delegated legislation may be struck down, even if the purpose of a law is to achieve an end within power, if the means adopted is not capable of being considered to be reasonably proportionate to the pursuit of that end. In Davis v The Commonwealth (1988) 166 CLR 79, at 100, Mason CJ, Deane & Gaudron JJ held that certain provisions of a statute were beyond power because, "[t]his extraordinary intrusion into freedom of expression is not reasonably and appropriately adapted to achieve the ends that lie within the limits of constitutional power." In The State of South Australia v Tanner (1988) 166 CLR 161, Wilson, Dawson, Toohey & Gaudron JJ. said at 165:
"In the course of argument the parties accepted the reasonable proportionality test of validity (cf, Deane J. in The Commonwealth v. Tasmania (the Tasmanian Dam Case) (1983) 158 C.L.R. 1, at p.260, namely, whether the regulation is capable of being considered to be reasonably proportionate to the pursuit of the enabling purpose. However, they differed in the answers to which their application of the test led."
More recently, in Nationwide News Pty Ltd v Wills (1992) 177 CLR 1, Mason CJ said at 30-1:
"Davis establishes two propositions. First, that, even if the purpose of a law is to achieve an end within power, it will not fall within the scope of what is incidental to the substantive power unless it is reasonably and appropriately adapted to the pursuit of an end within power, i.e., unless it is capable of being considered to be reasonably proportionate to the pursuit of that end (South Australia v Tanner (1989) 166 CLR 161, at 165). Secondly, in determining whether that requirement of reasonable proportionality is satisfied, it is material to ascertain whether, and to what extent, the law goes beyond what is reasonably necessary or conceivably desirable for the achievement of the legitimate object sought to be attained and, in so doing, causes adverse consequences unrelated to the achievement of that object."
Gaudron J (at 93-4) and McHugh J (at 101) expressed like views. Dawson J (at 88) expressed the contrary view when his Honour said:
"The question is essentially one of connexion, not appropriateness or proportionality, and where a sufficient connexion is established it is not for the Court to judge whether the law is inappropriate or disproportionate."
Whatever may be the test of the validity of a statute under the Constitution, unreasonableness has long been a head of invalidity of delegated legislation. For example, in Minister for Primary Industries & Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381, at 384, Lockhart J. put the matter this way:
"Delegated legislation may be declared to be invalid on the grounds of unreasonableness if it leads to manifest arbitrariness, injustice or partiality; but the underlying rationale is that legislation of this offending kind cannot be within the scope of what Parliament intended when authorising the subordinate legislative authority to enact laws."
For the reasons already given, issues of economic efficiency were relevant matters for the Minister to consider. In our opinion, the argument that the Minister exceeded his powers under the Act by seeking to achieve, amongst other objectives, an economically efficient, profitable and sustainable industry in the NPF, cannot be sustained. The end sought to be achieved was an end within power and the means adopted, to reduce the number of boats fishing in the NPF, was a means capable of being reasonably proportionate and appropriate to the achievement of that end.
Mr Bennett also relied on scientific flaws said to be reflected in the Haynes-Pascoe model upon which the amended Plan was founded. There was a challenge to one of the figures adopted in one of the early papers in which the model was described. Whether this was an uncorrected error which flowed into subsequent calculations, or whether it was simply a misprint in the particular article, is not clear.
Evidence was called on both sides challenging and supporting the model. On behalf of the appellants, for example, Mr Desmond Nicholls in his affidavit gave evidence that the conclusions of the model were contingent upon the fishery being operated by a "single owner", whereas the NPF Plan was currently, and intended in the future, to operate on a "common property" basis, where there would be a number of competing owners of the fishery. Mr Nicholls essentially contended that the predicted economic benefits of the Haynes-Pascoe model were not applicable to a "common property" fishery. Indeed, he deposed that operators would possibly compete away the economic rents predicted by the model through the increased price of units for entry to the fishery.
Mr Bennett submitted that it was not possible to distinguish whether the reduction in the number of available units, as opposed to the assumption of fewer operators (or a single operator), was responsible for the benefits which the Haynes-Pascoe model predicted.
Gummow J was not satisfied that any error in the model had been demonstrated. He concluded that there was a difference of opinion. None of the expert witnesses whose affidavits were read was cross-examined at the trial. It follows that the present is not a case, such as was considered in Minister for Primary Industries & Energy v Austral Fisheries,
where the plan was struck down because it was based upon what the trial Judge accepted to be a patent mathematical error. In the present case, there was simply a dispute about the matter. The Haynes-Pascoe model had been put forward to the AFMA over a number of years and had been the subject of considerable debate. It was not shown to be fundamentally flawed scientifically, let alone mathematically inaccurate.
We need not discuss the details further. In the end, the figure adopted by the Minister, 50,000 units, was not a figure which was nominated in any particular report which was in evidence before Gummow J. It was significantly in excess of the figure which had been calculated for the theoretically most efficient fishery. The report or submission on which the Minister acted was not in evidence before the trial Judge. It appears that the Minister and his advisers made a policy decision as to the appropriate limit of fishing capacity, or at least as to the limit to be imposed at that time. There were of course many factors to be taken into account, including the number of persons in the fishery, the size of the boats which were available, the size and efficiency of nets and other equipment and like matters. The 50,000 units fixed by the Minister was not a mathematical calculation, but an estimate which would have taken into account such considerations.
In our opinion, it cannot be said that the steps which were taken by the Minister to reduce the number of boats in the fishery were inappropriate or disproportionate to the achievement of a regulated fishery, the primary purpose of which was the conservation of the prawn stock.
SECTION 51(xxxi): THE APPELLANTS' CONTENTIONS
Section 51(xxxi) of the Constitution provides that the Parliament has power to make laws with respect to:
"The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws."
The appellants submitted that the compulsory restructuring program, finally embodied in NPF 11, was a device for compulsorily acquiring the appellants' property, without providing for the just terms required by s.51(xxxi) of the Constitution. The appellants also contended that the levy imposed by the Levy Act, in its application to units of fishing capacity held by the appellants, amounted to an acquisition of property otherwise than on just terms.
The appellants' principal argument was that a proprietary right, in the form of their right to fish in the NPF, had been acquired without compensation as a result of the operation of NPF 11. The appellants identified the property right as the fishing boat licence, issued to the first appellant, Mr Bienke Snr, pursuant to s.9(2)(a) of the Fisheries Act, in respect of the Deb-Rene-Adele. That licence authorised the use of the boat by the holder of the licence, or someone acting on the holder's behalf, to take fish in proclaimed waters, being in this case the NPF. Mr Bennett described the right to fish as a profit a prendre, or at least analogous to a profit a prendre. He contended that the effect of the reduction of units embodied in the restructuring program was to prevent the first appellant from using the fishing boat licence to take prawns in the NPF. In substance, the fishing boat licence had been cancelled as from 1 April 1993. This result was one of the objects of the restructuring program. Mr Bennett
submitted that the first appellant's property had thereby been acquired by means of a "circuitous device" without just compensation.
To support this argument, Mr Bennett relied particularly on the observations of Dixon J in Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 (the "Bank Nationalisation Case"), at 348-349, recently re-affirmed in the judgment of Mason CJ, Brennan, Deane and Gaudron JJ in Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480, at 509-510. In the Bank Nationalisation Case, Dixon J concluded (at 348-349) that, although the Banking Act 1947 (Cth) left the corporate entity of each bank intact and did not formally disturb legal property in the assets, the substance of the legislation was that the company and its shareholders were "stripped of the possession and control of the entire undertaking". Accordingly, the legislation was invalid as a "circuitous device to acquire indirectly the substance of a proprietary interest", without providing the just terms required by s.51(xxxi).
The second argument as to the application of s.51(xxxi) was advanced on behalf of the appellants by Mr Street. He contended that the imposition of a levy on the allocation or renewal of units of fishing capacity, unless the units were assigned to a boat which could be used to take prawns in the NPF, required the payment of money to the Commonwealth without any quid pro quo. Some of the units held by the appellants were assigned to a vessel that, as a consequence of the restructuring program, could not be used to take prawns in the NPF. It followed that the levy, in its application to dealings in those units, amounted to an acquisition of property otherwise than on just terms.
THE BOAT LICENCE: A DEFEASIBLE INTEREST
Mr Bennett's argument that the fishing boat licence had been acquired without just terms concentrated on the impact of NPF 11 on the licence, rather than on the Plan's reduction of units assigned to the Deb-Rene-Adele. Mr Bennett doubtless took this course because he recognised that Davey had specifically decided that paragraph 20B.3 of the NPF Plan, inserted by NPF 11, did not infringe s.51(xxxi) of the Constitution. Mr Bennett pointed out that no argument had been addressed in Davey as to the impact of the compulsory restructuring scheme on fishing boat licences issued pursuant to s.9(2) of the Fisheries Act. Nonetheless, the reasoning of Black CJ and Gummow J in Davey is important in considering Mr Bennett's contentions. In what follows we assume, without deciding, that the fishing boat licence conferred an interest on the first appellant capable of amounting to property for the purposes of s.51(xxxi).
Black CJ and Gummow J in Davey (at 165) held that the units of fishing capacity allocated under the NPF Plan 1989 conferred:
"only a defeasible interest, subject to valid amendments to the NPF Plan under which they are issued. The making of such amendments is not a dealing with the property; it is the exercise of powers inherent at the time of its creation and integral to the property itself."
For this reason, their Honours concluded in Davey that the reduction of units effected by NPF 11 did not amount to an acquisition of property for the purposes of s.51(xxxi) of the Constitution. (Burchett J, in his concurring judgment, did not address the question of whether the units conferred only a defeasible interest.)
Black CJ and Gummow J pointed out (at 164) that s.7B(5) of the Fisheries Act specifically contemplated that a plan of management might make provision for the assignment of units of fishing capacity to boats and the holding and "cessation of holding" of units in relation to boats (s.7B(5)(c)); the suspension and cancellation of units (s.7B(5)(g)); and the recording of cessation of holding, suspension and cancellation of units (s.7B(5)(h)). Under the NPF Plan, upon payment of the levy, Class A units were allocated to a unit holder "subject to this plan": cl.15.3. As we have noted, "this plan" was defined to mean the NPF Plan, as amended from time to time: cl.4.1. As their Honours said (at 164):
"The units exist in order to regulate prawn trawling within the fishery. They are a convenient measure of fishing capacity. The demands of conservation and economic efficiency, identified in s.5B set out above, necessitate continual adjustments in the regulation of the fishery. It is necessary, therefore, for the administering authority to be able to alter the rights of unit holders. And that this was envisaged has been clear on the face of the legislation since 1985, when s.7B was introduced, and from the NPF Plan itself."
In Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, a majority of the Court held that s.44 of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), effected an acquisition of property otherwise than on just terms. Section 44(1) provided that an action for damages did not lie against the Commonwealth or its authorities, in respect of an injury sustained by an employee in the course of his or her employment. In their joint judgment, Mason CJ, Deane and Gaudron JJ said this (at 305-306):
"'acquisition' in s.51(xxxi) extends to the extinguishment of a vested cause of action, at least where the extinguishment results in a direct benefit or financial gain (which, of course, includes liability being brought to an end without payment or other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognised legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or
extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s.51(xxxi) of the Constitution." [Footnote omitted.]
See also at 312, per Brennan J.
McHugh J dissented as to the result in Georgiadis, but did so on the ground that the plaintiff's common law rights were enforceable against the Commonwealth only as a federal law by virtue of s.64 of the Judiciary Act 1903 (Cth). Those rights could be recalled, prospectively or retrospectively (at 329). His Honour stated that (at 328):
"[i]f a right against the Commonwealth is subject to alteration or revocation, its alteration or extinguishment does not constitute an acquisition of property."
In Health Insurance Commission v Peverill (1994) 179 CLR 226, decided on the same day as Georgiadis, the High Court held that a retrospective reduction in the benefit payable under Health Insurance Act 1973 (Cth) for a particular medical procedure was not an acquisition of property for the purposes of s.51(xxxi). Mason CJ, Deane and Gaudron JJ considered (at 236) that the critical point was that:
"the extinguishment of the earlier right to receive payment of a larger amount has been effected not only by way of genuine adjustment of competing claims, rights and obligations in the common interests between parties who stand in a particular relationship but also as an element in a regulatory scheme for the provision of welfare benefits from public funds." [Footnote omitted.]
Their Honours continued (at 237):
"It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognised by the general law. Rights of that kind are rights which, as a general rule, are inherently susceptible of variation. That is particularly so in the case of both the nature and quantum of welfare benefits, such as the provision of medicare benefits in respect of medical services. Whether a particular medicare benefit should be provided and, if so, in what amount, calls for a carefully considered assessment of what services should be covered and what is reasonable remuneration for the service provided, the nature and the amount of the medicare benefit having regard to the community's need for assistance, the capacity of government to pay and the future of health services in Australia. All these factors are susceptible of change so that
it is to be expected that the level of benefits will change from time to time. Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result. In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property."
See also at 256, per Toohey J; at 260 ff, per McHugh J.
THE TERMS OF THE BOAT LICENCE
Mr Bennett argued that there was a distinction between the units considered in Davey and the fishing boat licence held by the first appellant. He accepted that the licence was expressed to be subject to the provisions of the NPF Plan and the associated fisheries notices. But he argued that the licence was not subject to future variations in the NPF Plan. For this reason it was not a "defeasible" entitlement, nor one inherently susceptible of variation. The licence had effectively been acquired as the result of the expiration of units brought about by NPF 11.
In our opinion, the conditions to which the fishing boat licence was subject cannot be read as narrowly as Mr Bennett suggested. The declaration on the face of the licence specified that the licence was subject to the limitations contained therein and to "any prohibitions in force from time to time". The "prohibitions" referred to cannot be confined (as Mr Bennett argued) to specific restrictions on particular conduct, as distinct from restrictions on the use of the boat itself. The word is perfectly apt to describe the prohibition in NPF 15 on the taking of prawns in the NPF, otherwise than by the use of a boat to which the applicable number of units had been assigned.
Furthermore, the statement in Schedule 3, that the operations of the licence holder were subject to the provisions of the NPF Plan and associated notices, means, in our view, the NPF Plan and the notices as amended from time to time. There would be little point in providing that the licence should be subject to prohibitions in force from time to time, yet subjecting the operations of the licence holder only to the terms of the Plan in force at the date the licence was issued or renewed. If the construction urged by Mr Bennett were correct, the restrictions imposed on each licence holder operating in the NPF could differ according to the date the particular licence happened to have been granted or renewed.
It is true that, on and after 1 April 1993, the appellants could not use the Deb-Rene-Adele to take prawns in the NPF, at least unless and until they purchased additional units to be assigned to the vessel. The restrictions on the use of the Deb-Rene-Adele did not come about, however, because of any change in the terms of the fishing boat licence for the vessel. Those restrictions occurred because NPF 11 reduced the units assigned to the Deb-Rene-Adele below the applicable number specified in the NPF Plan. The effect of that reduction was that the Deb-Rene-Adele became subject to the prohibition in NPF 15 against a vessel being used for taking prawns in the NPF, since the Deb-Rene-Adele no longer satisfied the terms of the exemption in NPF 15 for vessels with the applicable number of units.
NPF 11 did not change the terms of the fishing boat licence held by the first appellant in respect of the Deb-Rene-Adele. The licence continued to exempt the holder from the prohibition stated in s.13(1) of the Fisheries Act from taking fish in proclaimed waters. But the licence was, in terms, subject to changes in the NPF Plan. The changes brought about by NPF 11 were thus contemplated by the very terms of the fishing boat licence. In short,
the permission granted by the fishing boat licence (Banks v Transport Regulation Board (Victoria) (1968) 119 CLR 222, at 230) was inherently susceptible of modification or even extinguishment, depending upon amendments to the NPF Plan. In our view, the case is even further removed from the scope of s.51(xxxi) than the circumstances considered in Health Insurance Commission v Peverill, where statutory entitlements were retrospectively altered. In the present case, any alteration for the worse in the first appellant's entitlements under the fishing boat licence, held in respect of the Deb-Rene-Adele, was in accordance with the terms of the licence itself. Therefore, insofar as the fishing boat licence is concerned, there was no acquisition of property for the purposes of s.51(xxxi). Nor is there anything that can be described as a "circuitous device" for the acquisition of property. The licence continued in force, but the position of the licensee changed because of alterations envisaged by the terms on which the licence was granted.
Mr Bennett pointed out that the Fisheries Act specifically provided for the cancellation and suspension of licences granted under s.9, if the Minister or Secretary had reasonable grounds to believe that there had been a contravention of a condition to which a licence was subject, or if the holder of the licence had committed an act forbidden by a notice in force under s.8(1): s.9A(1). But there is nothing inconsistent between this specific power of cancellation or suspension and subjecting of the fishing boat licence to the terms of the NPF Plan as amended from time to time. The fact that a licence cannot be used in the NPF during such time as the vessel has insufficient units applicable to it does not obviate the need for a specific power of suspension and cancellation of a licence in circumstances warranting such a course.
WAS THE LICENSEE'S INTEREST A PROFIT A PRENDRE ?
Mr Bennett argued that the appellant's right to reap a resource was "analogous" to a profit a prendre or to a cause of action. This submission was primarily directed to the question whether the fishing boat licence could be regarded as property for the purposes of s.51(xxxi). The argument might also be relevant to whether the licence was based on "antecedent proprietary rights recognised by the general law" and therefore not inherently susceptible of variation: Health Insurance Commission v Peverill, at 237. As Georgiadis shows, legislation extinguishing a cause of action against the Commonwealth arising under the general law can constitute an acquisition of property for the purposes of s.51(xxxi), in part because the cause of action is not inherently susceptible of variation. But a fishing boat licence granted under s.9(2) of the Fisheries Act does not vest in the holder a cause of action under the general law, nor does it create an interest based on antecedent rights recognised by the general law.
At common law, the public had a right of fishing, at least in tidal waters, and that right was not qualified by any requirement that the fishery not be depleted or destroyed: Goodman v Mayor of Saltash (1882) 7 App Cas 633, cited in Harper v Minister for Sea Fisheries (1989) 168 CLR 314, at 330-331, per Brennan J. Legislation which prohibits the public from exercising a common law right, so as to prevent uncontrolled exploitation of a resource, and confers statutory rights on licensees to exploit that resource to a limited extent, might be regarded in one sense as creating a right analogous to a profit a prendre: Harper, at 335. However, the right is not a common law right, but rather a new species of statutory entitlement, the nature and extent of which depends entirely on the terms of the legislation.
This appears from the judgment of Mason CJ, Deane and Gaudron JJ in Harper, at 325, in language which can be applied to the statutory scheme established by the Fisheries Act:
"The licensing system which the Fisheries Act 1959 (Tas.) and the Sea Fisheries Regulations 1962 (Tas.) establish in relation to abalone fisheries in Tasmanian waters is not a mere device for tax collecting. Its basis lies in environmental and conservational considerations which require that exploitation, particularly commercial exploitation, of limited public natural resources be carefully monitored and legislatively curtailed if their existence is to be preserved. Under that licensing system, the general public is deprived of the right of unfettered exploitation of the Tasmanian abalone fisheries. What was formerly in the public domain is converted into the exclusive but controlled preserve of those who hold licences. The right of commercial exploitation of a public resource for personal profit has become a privilege confined to those who hold commercial licences. This privilege can be compared to a profit a prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving a limited public natural resource in a society which is coming to recognize that, in so far as such resources are concerned, to fail to protect may destroy and to preserve the right of everyone to take what he or she will may eventually deprive that right of all content."
Thus, the fact that the holder of the boat licence, on one view, might have a privilege comparable to a profit a prendre, does not mean that he or she has an entitlement based on antecedent proprietary rights recognised by the general law. It also does not mean that the licence is incapable of modification or extinguishment without constituting an acquisition of property, if that course is permitted by its terms.
ACQUISITION OF PROPERTY
In our view, the second ground for the decision in Davey provides an additional basis for rejecting Mr Bennett's argument in the present case. Black CJ and Gummow J held that the compulsory surrender of units effected by NPF 11 did not constitute an acquisition of property for the purposes of s.51(xxxi), because no proprietary benefit accrued to the Commonwealth or to any third party by reason of the compulsory restructuring plan. Their Honours recognised (at 162-163) that a formal acquisition of property is not necessary to enliven the constitutional guarantee. However, they considered (at 162-163) that the case
before them was very different from the position in the Bank Nationalisation Case and Australian Tape Manufacturers v The Commonwealth:
"Fishermen were required to surrender 30.76 per cent of their units under the compulsory restructuring scheme. Of course, a Commonwealth law is not saved from invalidity under the guarantee embodied in s.51(xxxi) merely because it treats all individuals in like fashion. But it is hard to see precisely how the proprietary benefit is said to be conferred upon the remaining fishermen. In order to continue trawling for prawns at the levels to which they were accustomed, they too were required to purchase additional units at the market price.
...
What is said in these passages [from the Bank Nationalisation Case and Australian Tape Manufacturers v The Commonwealth] is directed to situations a long way from the present. All the fishermen are in the same position. It may be the case (and it should be emphasised that what was urged here by the respondents was but a forecast as to economic consequences), that after the compulsory restructuring, and subsequent market rationalisation of units, some operators, in particular the larger corporate operators, will end up with a larger share of the fishery's capacity. Nevertheless, this advantage would arise principally from the survivors' greater ability to purchase extra units, effectively buying-out their competitors, and would stem from their own initiative, and market forces, rather than any acquisition by means of the Commonwealth law."
The proposition that an acquisition of property, as distinct from the mere extinguishment of a right, is necessary to attract s.51(xxxi) has been reaffirmed since Davey. In Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155, at 172-173, Mason CJ said that:
"the mere extinguishment by the Commonwealth of a right enjoyed by an owner in relation to his or her property does not amount to an acquisition of property; in the absence of an acquisition of a benefit or an interest in property, however slight or insubstantial it may be, the complete extinguishment of contractual rights does not constitute such an acquisition." [Footnotes omitted.]
In the same case Deane and Gaudron JJ made these observations (at 185):
"Nonetheless, the fact remains that s.51(xxxi) is directed to "acquisition" as distinct from deprivation. The extinguishment, modification or deprivation of rights in relation to property does not of itself constitute an acquisition of property. For there to be an "acquisition of property", there must be an obtaining of at least some identifiable benefit or advantage relating to the ownership or use of property. On the other hand, it is possible to envisage circumstances in which an extinguishment, modification or deprivation of the proprietary rights of one person would involve an acquisition of property by another by reason of some identifiable and measurable countervailing benefit or advantage accruing to that other person as a result. Indeed, the extinguishment of a chose in action could, depending upon the
circumstances, assume the substance of an acquisition of the chose in action by the obligee." [Footnote omitted.]
The possibility adverted to in the last sentence was realised in Georgiadis, where the extinguishment of a vested cause of action arising under the general law was said (at 305-306) to have conferred a direct financial benefit on the Commonwealth, in the same way as would the extinguishment of a vested cause of action for goods sold and delivered. Thus, the law was characterised as one for the acquisition of causes of action against the Commonwealth.
However, the compulsory surrender of units effected by NPF 11 did not result in the Commonwealth, or any other person, acquiring an identifiable proprietary interest in the NPF or in any other species of property. Nor did the Commonwealth, or any other person, acquire a direct financial benefit or gain commensurate with any interest of the appellants that was extinguished or terminated. Whether attention is directed to the units of fishing capacity, as in Davey, or to the fishing boat licence, as in the present case, the compulsory restructuring scheme did not result in any other person acquiring the entitlement to take prawns from the NPF previously enjoyed by the first appellant as the licence and unit holder in respect of the Deb-Rene-Adele.
As Davey makes clear, all unit holders suffered a proportionate reduction of units. Without a re-assignment of units, or the acquisition of additional units, none of the fishermen holding boat licences could use a licensed vessel to take prawns in the NPF (unless the vessel happened to have had units assigned to it over and above the applicable number). Thus, until the re-assignment or acquisition took place, the holding of a fishing boat licence did not
entitle any licence holder to take prawns in the NPF. In this respect, the first appellant was in the same position as any other holder of a fishing boat licence. As Black CJ and Gummow J pointed out in Davey, at 162, if the appellants were less able than some other operators to re-allocate or purchase units of fishing capacity, that was because of their financial position and the operation of market forces. It was not because any other fishermen acquired a financial benefit equivalent to that previously enjoyed by the appellants. Indeed, as Gummow J found, the 103 units retained by the appellants after the reallocation of units to the Karamanda-Adele, were of considerable value in the market.
Mr Bennett argued that it was inevitable that the profitability of each of the smaller number of boats permitted to operate in the NPF would increase. He pointed to the evidence of Mr Bolton, the assistant manager of the NPF, that he expected that the reduction of units of fishing capacity in the NPF would not have any effect on the total catch. But that does not alter the fact that, following the compulsory restructuring, all holders of fishing boat licences were in the same position. If some were better placed to take advantage of the market opportunities, that did not amount to an extinguishment of a right of the appellants and a commensurate "identifiable and countervailing benefit or advantage" accruing to another person. The restructuring might have, and probably did have, the effect of leading to changes in the market value of units and of vessels. The appellants might or might not have derived an overall financial benefit from these variations. Other fishermen might or might not have derived a financial benefit, depending on a range of factors. The complex interaction of regulatory and market forces falls far short of the direct relationship that might suffice to show that a transfer of value or benefit from one person to another constitutes an acquisition of property for the purposes of s.51(xxxi).
Accordingly we reject Mr Bennett's argument that the compulsory reduction of units effected by NPF 11 constituted an acquisition of property otherwise than on just terms, within the meaning of s.51(xxxi) of the Constitution.
SECTION 51(xxxi): THE LEVY ACT
Mr Street on behalf of the appellants contended that, insofar as a levy had been imposed on dealings in units of fishing capacity which could not be used to fish in the NPF, as was the case with units assigned to the Deb-Rene-Adele, the Commonwealth gave no quid pro quo for the imposition of the levy. In substance the Commonwealth had exacted money from the appellants as holders of units, for which no quid pro quo had been given. Mr Street took as his starting point the proposition, which was accepted by Gummow J, that the levy was not a tax, but a fee imposed for the privilege of participating in the regulatory scheme, by lifting the prohibition that otherwise would have prevented the appellants from exploiting the NPF: Harper v Minister for Sea Fisheries, at 334-336; Air Caledonie International v The Commonwealth (1988) 165 CLR 462, at 466-467. Mr Street then submitted that the fee constituted an acquisition of property by the Commonwealth otherwise than on just terms. We are content to assume, for the purposes of considering this submission, that the levy imposed by the Levy Act is not a tax.
The Levy Act imposed a levy, inter alia, on
l the grant of a fishing boat licence under s.9(2) of the Fisheries Act: s.5(a);
lthe renewal of a licence under s.9(6B) of the Act: s.5(ba);
lthe allocation of units of fishing capacity, being units prescribed for the purpose of the Act: s.5(bc); and
lthe renewal of the allocation of units of fishing capacity, also being units prescribed for the purposes of the Act: s.5(bd).
A reference in the Levy Act to units of fishing capacity was to the units into which, under a plan of management determined under s.7B(1) of the Fisheries Act, the fishing capacity permitted for the fishery was divided: s.3(2). The amount of the levy imposed by s.5 of the Levy Act was payable at the time of the particular transaction identified in s.5: s.7. The amount of the levy imposed by the Levy Act was that specified in the regulations: s.6. The regulations specified that the levy was imposed on units at a particular sum per unit, and was imposed in respect of the period from 14 December in one year to 13 July in the subsequent year: reg.4.
As we have already mentioned, the evidence relating to the payment of levy by the appellants was not complete, apparently because the assessment of compensation (if the appellants were found to be entitled to just terms) had been identified before the hearing as a matter for separate determination. However, it appears that the appellants paid the levy in 1992, in respect of the 312 units then attached to the Deb-Rene-Adele. The levy presumably would have been paid for the period 14 December 1992 to 13 July 1993. As we have previously noted, in March 1993 the appellants transferred 163 units to another vessel owned by them. On 1 April 1993, by virtue of the compulsory surrender effected by NPF 10, as amended by NPF 11, the remaining 149 units attached to the Deb-Rene-Adele were reduced to 103 units. Again, there was no evidence as to whether the levy was paid in
respect of the remaining 103 units in 1993 or 1994. However, we were told by Mr Street from the bar table that levies were imposed, and presumably paid, on the units allocated to the Deb-Rene-Adele at a time when the appellant did not hold a fishing boat licence for the vessel. That licence, it will be recalled, expired on 31 December 1993.
It can be taken as settled, as Gummow J accepted, that the word "property" in s.51(xxxi) extends to money and the right to receive a payment of money. In Australian Tape Manufacturers Association Ltd v The Commonwealth, the majority judgment of Mason CJ, Brennan, Deane and Gaudron JJ considered whether legislation imposing a royalty on blank tapes would constitute an acquisition of property within s.51(xxxi), had it not been classified as a tax. Their Honours made the following observations (at 509-510):
"It is now well established that the plenary grant of legislative power contained in s.51(xxxi) enjoys the status of a constitutional guarantee of just terms and "is to be given the liberal construction appropriate to such a constitutional provision". In the context of that guarantee, the word "property", which has been said to be "the most comprehensive term that can be used", must be construed as extending "to every species of valuable right and interest including real and personal property, incorporeal hereditaments...and choses in action". In the context of s.51(xxxi), the word "property" must also be construed as extending to money and the right to receive a payment of money. If it were otherwise, money or the right to receive money could compulsorily be acquired for any purpose in respect of which the Parliament has power to make laws and without compensation, provided the money or the right to receive it was not revenue raised by taxation, a proviso which might be satisfied whenever the relevant purpose was to confer a private and direct benefit on a person or group. The guarantee which s.51(xxxi) was intended to give in protection of property would then largely be illusory.
...
Section 51(xxxi)'s guarantee of just terms is not to be avoided by "a circuitous device to acquire indirectly the substance of a proprietary interest". In a case where an obligation to make a payment is imposed as genuine taxation, as a penalty for proscribed conduct, as compensation for a wrong done or damages for an injury inflicted, or as a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity, it is unlikely that there will be any question of an "acquisition of property" within s.51(xxxi) of the Constitution. On the other hand, the mere fact that what is imposed is an obligation to make a payment or to hand over property will not suffice to avoid s.51(xxxi)'s guarantee of "just terms" if the direct expropriation of the money or other property itself would have been within the terms of the sub-section. Were it otherwise, the guarantee of the section would be reduced to a hollow facade." [Footnotes omitted].
See also Mutual Pools v The Commonwealth, at 184, per Deane and Gaudron JJ.
The fundamental difficulty confronting Mr Street's argument is that, in our view, there was a quid pro quo for the imposition of the levy on the allocation, or on the renewal of the allocation, of units of fishing capacity. This is so notwithstanding that the vessel to which units were assigned did not have a sufficient quantity of units to permit it to be used to take prawns in the NPF.
It is necessary to bear in mind that there was a "single legislative scheme" controlling the exploitation of the NPF. This comprised the Fisheries Act, the statutory instrument in the form of the NPF Plan, the notices issued under the legislation and the licences, including their conditions: Coleman v Gray (1994) 55 FCR 412, at 423, per Beaumont J. As we have discussed, the Fisheries Act provided for the determination of a plan of management for a fishery in proclaimed waters: s.7B(1). The Minister, in a plan of management, could determine how the fishing capacity of the fishery was to be measured and could determine the fishing capacity permitted for the fishery: s.7B(3). The plan of management could provide, inter alia, for the conditions to which fishing boat licences granted under s.9(2) of the Act were to be subject: s.7B(4)(b). The plan of management could also provide for the division of fishing capacity into units; the allocation of units of fishing capacity; the assignment of units of fishing capacity to boats; the determination of the number of units of fishing capacity to be held by boats; the holding of units of fishing capacity that were not assigned to a boat; and the transfer and renewal of units of fishing capacity: s.7B(5). While a plan of management was in force for a fishery, the Minister and Secretary were to perform
their functions and powers under the Act in relation to the fishery in accordance with the plan of management: s.7B(8).
The NPF Plan, at the relevant time, contemplated that the use of a boat in the fishery would be prohibited unless it had the applicable number of units assigned to it: cl.9. The NPF Plan also provided that, subject to certain irrelevant restrictions, the holder of units could assign them to a nominated boat, a replacement boat or to another person: cl.11, cl.13. The effect of holding units was that the holder was free to participate in the exploitation of the resources of the NPF, subject to compliance with the legislation, the Plan and other instruments. Of equal importance was the effect that the unit holder was able to take advantage of the prohibition on persons using boats in the NPF, unless they held a boat licence and had the requisite number of units of fishing capacity assigned to their vessel.
One way in which the unit holder could take advantage of the prohibition was by transferring his or her units for value. As we have previously mentioned, Gummow J found that the market value of units of fishing capacity, in relation to the NPF, was about $1,500 per unit in March 1993, rising to $2,300 per unit in August 1994. The units had a value regardless of whether they were allocated to a particular vessel (compare cl.12.2 of the NPF Plan), or to a vessel which had the applicable number of units. They had a value precisely because they could be assigned by a purchaser to a vessel which, once it acquired the applicable number of units, could be used to exploit the NPF. The ability to exploit the NPF was valuable because vessels complying with the regulatory scheme could be used to catch prawns in the NPF, to the exclusion of all other vessels.
We make the assumption that the appellants paid the levy imposed by the Levy Act in respect of the 103 units remaining allocated to the Deb-Rene-Adele after 1 April 1993. The quid pro quo for that payment was the value attaching to the units by virtue of the regulatory scheme. The appellants' unwillingness either to sell the units, or to make the outlay to acquire the additional units necessary to allow the Deb-Rene-Adele to operate in the fishery, cannot alter the fact that the units had substantial value. For this reason we do not think the imposition of the fee by the Levy Act constituted an acquisition of property. Thus the Levy Act did not infringe s.51(xxxi) of the Constitution in its application to the units of fishing capacity held by the appellants.
ADMINISTRATIVE TORT
Mr Bennett's next submission was that the respondents, or at least the Minister and the Commonwealth, were liable in damages for negligently promulgating and implementing what Mr Bennett submitted was an invalid plan. The claim necessarily fails as the element of invalidity has not been established, let alone that it resulted from negligent action on the part of the Minister or others for whom the Commonwealth was responsible, but as the issue has been raised we should say something about it.
The general position is stated by Gummow J. (at 171):
"It is well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The relevant authorities are collected and discussed in the judgments of Gibbs C.J. and of Mason J. in The Council of the Shire of Sutherland v Heyman (1985) 157 C.L.R. 424, at 436-437, 458-461."
A recent example is Parramatta City Council v Lutz (1988) 12 NSWLR 293.
Gummow J went on to refer to a number of Canadian authorities where a remedy in damages for invalid legislative action has been refused. Gummow J cited from Welbridge Holdings Ltd v The Metropolitan Corporation of Greater Winnipeg [1971] SCR 957, at 967-968, where Laskin J said:
"Under the considerations on which Hedley Byrne's enunciation of principle rests, it cannot be said in the present case either that a special relationship arose between the plaintiff and the defendant or that the defendant assumed any responsibility to the plaintiff with respect to procedural regularity. This would equally be my view if the plaintiff had been the applicant for the rezoning by-law. A rezoning application merely invokes the defendant's legislative authority and does not bring the applicant in respect of his particular interest into any private nexus with the defendant, whose concern is a public one in respect of the matter brought before it. The applicant in such a case can reasonably expect honesty from the defendant but not a wider duty. Beyond this, I would adapt to the present case what the late Jackson J. said in dissent in Dalehite v United States, 346 U.S. 15 (1953), at 59 (a case considered with the Federal Tort Claims Act 1946, of the United States), as follows:
`When a [municipality] exerts governmental authority in a manner which legally binds one or many, [it] is acting in a way which no private person could. Such activities do and are designed to affect, often deleteriously, the affairs of individuals, but courts have long recognised the public policy that such [municipality] shall be controlled solely by the statutory or administrative mandate and not by the added threat of private damage suits.'
...
A municipality at what may be called the operating level is different in kind from the same municipality at the legislative or quasi-judicial level where it is exercising discretionary statutory authority. In exercising such authority, a municipality (no less than a provincial Legislature or the Parliament of Canada) may act beyond its powers in the ultimate view of a Court, albeit it acted on the advice of counsel. It would be incredible to say in such circumstances that it owed a duty of care giving rise to liability in damages for its breach. `Invalidity is not the test of fault and it should not be the test of liability': see Davis, 3 Administrative Law Treatise, 1958, at p.487."
Gummow J also referred to the following decisions which applied like reasoning: Berryland Canning Co Limited v The Queen (1974) 44 DLR (3d) 568, at 580-581; Bowen v City of Edmonton (1977) 80 DLR (3d) 501 at 516-522; Kwong v The Queen in Right of Alberta [1979] 2 WWR 1, at 9-19; JRS Holdings Ltd v District of Maple Ridge (1981) 122 DLR
(3d) 398, at 408; Regional Municipality of Peel v Her Majesty the Queen in Right of Canada (1992) 98 DLR (4th) 140, at 144-5.
The position in the United States is more complex because of its constitutional and statutory provisions. In particular, s.1346(b) of the Federal Tort Claims Act 1946 (US), as amended, provides that claims made for damages caused by an employee of the Government are available "if a private person, would be liable to the claim in accordance with the law of the place where the act or omission occurred." One significant exception is provided by s.2680 of the Act, which reads:-
"The provisions of this chapter ... shall not apply to -
(a) Any claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused."
Under these provisions, it was held in Dalehite v United States 346 US 15 (1953), that there was no liability in respect of decisions which (at pp.39-40) "were all responsibly made at a planning rather than operational level." More recently, in United States v Gaubert 499 US 315 (1991), the Court rejected the distinction between planning and operational level decisions and (at 322-323) declared an action to be within the exemption when established governmental policy, expressed or implied by statute, regulation or agency guidelines, allowed a Government agent to exercise policy-based discretions.
In the United Kingdom, a distinction between operational decisions on the one hand and discretionary or policy decisions on the other has been expressed in a number of cases. In Sheppard v Glossop Corporation [1921] 3 KB 132, at 145-6, Scrutton LJ drew a distinction between an act taken "in the direct operation of the powers conferred" and a
discretionary decision to exercise or not to exercise the powers conferred. In Home Office v Dorset Yacht Co Ltd [1970] AC 1004, at 1065, Lord Diplock said:
"The statute from which the right to detain is derived thus only gives the broadest indication of the purpose of the detention and confers upon the Home Secretary very wide powers to determine by subordinate legislation the way in which the powers of custody and control of Borstal trainees should be exercised by the officers of the prison service. In exercising his rule-making power, at any rate, it would be inconsistent with what are now recognised principles of English law to suggest that he owed a duty of care capable of giving rise to any liability in civil law to avoid making a rule the observance of which was likely to result in damage to a private citizen. For a careless exercise of his rule-making power he is responsible to Parliament alone. The only limitation on this power which courts of law have jurisdiction to enforce depends not on the civil law concept of negligence, but on the public law concept of ultra vires."
Dutton v Bognor Regis UDC [1972] 1 QB 373, applied this principle and held that a District Council was liable for the negligent approval of foundations of a building, which was regarded as an operational decision. Dorset Yacht and Dutton were applied in Anns v Merton London Borough Council [1978] AC 728, where it was again held that a local authority could be liable to a building owner for the negligent inspection of foundations. Lord Wilberforce said (at 754):-
"Most, indeed probably all, statutes relating to public authorities or public bodies, contain in them a large area of policy. The courts call this `discretion' meaning that the decision is one for the authority or body to make, and not for the courts. Many statutes also prescribe or at least presuppose the practical execution of policy decisions: a convenient description of this is to say that in addition to the area of policy or discretion, there is an operational area. Although this distinction between the policy area and the operational area is convenient, and illuminating, it is probably a distinction of degree; many `operational' powers or duties have in them some element of `discretion.' It can safely be said that the more `operational' a power or duty may be, the easier it is to superimpose upon it a common law duty of care."
In the same year, in considering a claim made in respect of a policy decision, Nourse LJ said in Bourgoin SA v Ministry of Agriculture Fisheries & Food [1986] QB 716, at 790:-
"In this country the law has never allowed that a private individual should recover damages against the Crown for an injury caused to him by an ultra vires order made in good faith. Nowadays this rule is grounded not in procedural theory but on the sound acknowledgment that a minister of the Crown should be able to discharge the duties of his office expeditiously and fearlessly, a state of affairs which could hardly be achieved if acts done in good faith, but beyond his powers, were to be actionable in damages."
Dutton and Anns were later overruled in Murphy v Brentwood District Council [1991] 1 AC 398, but that case was disapproved by the High Court of Australia in Bryan v Maloney (1995) 128 ALR 163, in which Dutton was followed.
The European Court of Justice has applied a somewhat similar principle when determining whether compensation should be awarded for loss resulting from wrongful legislation. In Aktien-Zuckerfabrik Schoppenstedt v Council of the European Communities [1971] ECR 975 at 984, the Advocate General K. Roemer said:-
"In the present case the non-contractual liability of the community presupposes at the very least the unlawful nature of the act alleged to be the cause of the damage. Where legislative action involving measures of economic policy is concerned, the community does not incur non-contractual liability for damage suffered by individuals as a consequence of that action by virtue of .. [Article 215] .. unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred."
See also Bayerische HNL Vermehrungsbetrieb GMbH & Co KG v Council & Commission of the European Communities [1978] 2 ECR 1209; Amylum NV, Tunnel Refineries Ltd and Kuninklijke Scholten-Honig NV v Council & Commission of the European Communities [1982] 2 CMLR 590; Burgoin S.A. at 769-770, 782-784, 790. Schwarze on European Administrative Law, pp. 524-30; Wade on Administrative Law, 6th ed. p.783. Damages may be awarded, however, if an EEC authority has "manifestly and gravely disregarded the limits on the exercise of its powers", with resultant loss: DGV, Deutsche Getreideverwertung und Rheinische Kraftfutterwerke GMbH v Council and Commission of the European Communities [1979] 3 ECR 3017.
In Australia, a like approach with respect to policy decisions has been taken. In James v The Commonwealth (1939) 62 CLR 339, at 372, Dixon J said:-
"I am quite unable to believe that an attempted enactment of the legislative organ of government can form any part of a wrongful act for which the Executive Government is liable under Part IX of the Judiciary Act. The existence of the invalid statute may be regarded as a fact preliminary to and explanatory of the commission by the Executive of a tort, but it cannot, in my opinion, enter into the actual grounds of legal responsibility in tort."
In Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 442, Gibbs CJ, with whom
Wilson J agreed, said:
"I turn then to the second group of propositions for which Anns v Merton London Borough Council is authority. There was no novelty in holding that the ordinary principles of negligence apply to public authorities exercising statutory functions - powers as well as duties. The distinction between the area of policy and the operational area is a logical and convenient one. There is no doubt that a public authority may be liable for the negligent acts of its servants or agents in carrying out their duties, or exercising their powers, within the operational area, although if the performance of their duties or the exercise of their powers involves the exercise of a discretion, an act will not be negligent if it was done in good faith in the exercise of, and within the limits of, the discretion. In accordance with the principles stated in Anns v Merton London Borough Council, a local authority has been held liable for damage resulting from negligence in passing building plans submitted for approval (Dennis v Charnwood Borough Council) and from the negligent inspection of the foundations of a building while the work of construction was in progress: Mount Albert Borough Council v Johnson; see also Dutton v Bognor Regis Urban District Council, a case decided before Anns v Merton London Borough Council. Similarly a council has been held liable for negligently granting a planning permission that was defective (Port Underwood Forests Ltd v Marlborough County Council) and the Housing Corporation of New Zealand has been held liable for negligence in approving a house built by a novel method of construction as one in respect of which a loan could be made: Bruce v Housing Corporation of New Zealand. The decision of this Court in Voli v Inglewood Shire Council is consistent with, but distinguishable from, this line of decisions, because although it was said, that the council was liable for the failure of its officers, who examined and approved the plans and specifications, to ascertain whether the by-laws had been complied with, the liability of the council was based on the fact that it owned the building whose collapse injured the plaintiffs." [Footnotes omitted]
Mason J said (at 458):-
"It is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty."
His Honour also said (at 468-469):
"Anns decided that a duty of care cannot arise in relation to acts and omissions which reflect the policy-making and discretionary elements involved in the exercise of statutory discretions. It has been said that it is for the authority to strike that balance between the claims of efficiency and thrift to which du Parcq LJ referred in Kent v East Suffolk Rivers Catchment Board and that it is not for the court to substitute its decision for the authority's decision on those matters when they were committed by the legislature to the authority for decisions: Dorset Yacht Co v Home Office; Anns; Barratt v District of North Vancouver. Although these injunctions have compelling force in their
application to policy-making decision, their cogency is less obvious when applied to other discretionary matters. The standard of negligence applied by the courts in determining whether a duty of care has been breached cannot be applied to a policy decision, but it can be applied to operational decisions. Accordingly, it is possible that a duty of care may exist in relation to discretionary considerations which stand outside the policy category in the division between policy factors on the one hand and operational factors on the other. This classification has evolved in the judicial interpretation of the "discretionary function" exception in the United States Federal Tort Claims Act: see Dalehite v United States; Indian Towing Co v United States; United States v S A Empresa De Viacao Aerea Rio Grandense (Varig Airlines). The object of the Federal Tort Claims Act in displacing government immunity and subjecting the United States Government to liability in tort in the same manner and to the same extent as a private individual under like circumstances, subject to the "discretionary function" exception, is similar to that of s.64 of the Judiciary Act 1903 (Cth).
The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness." [Footnotes omitted]
See also Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378, at 404-405, per Burchett J.
The existence of a claim of damages for negligence must depend upon the existence of a relevant duty of care and a breach of that duty. As Deane J said in Hawkins v Clayton (1988) 164 CLR 539 at 576, a "duty of care will arise under the common law of negligence only in a case where the requirement of a relationship of proximity between the plaintiff and the defendant is satisfied." A public authority may be held to have breached a relevant duty of care where direct physical injury or damage was caused by a negligent act: Wyong Shire Council v Shirt (1980) 146 CLR 40. The duty of care may be held to arise if damages have flowed from a negligent misstatement by a public authority: San Sebastian Pty Ltd v The Minister Administering the Environmental Planning and Assessment Act 1979 (NSW) (1986) 162 CLR 340. And a public authority may be held liable for the negligent performance of an operational act provided that a duty of care subsisted: Sutherland Shire Council v
Heyman. But in no case in Australia has a Minister of State or a public authority been held liable for the negligent proclamation of a policy or the making of an invalid rule or regulation or the issue of a plan for which statute makes provision. Of course, there may be liability if the wrongful exercise of authority was carried out in the knowledge that it was beyond power: Bourgoin S.A.; Farrington v Thomson [1959] VR 286.
In Hawkins v Clayton, at 556, Brennan J explained:-
"When the existence of a duty in a new category of case is under consideration, the question for the court is whether there is some factor in addition to reasonable foreseeability of loss which is essential to the existence of the duty: See Jaensch v Coffey (1984) 155 CLR 549, at 575-577. In many of the new categories of case in which a duty has been held to exist, reasonable foreseeability of loss has not been sufficient in itself to give rise to a duty to act or to abstain from acting in order to avoid the loss. In a case where a novel category of duty is proposed and the factors which determine its existence must be identified, the court may have regard to a variety of considerations the nature of the activity which causes the loss, the nature of the loss, the relationship between the parties and contemporary community standards (especially where liability for breach of the proposed duty would be disproportionate to the risk which a person might reasonably be expected to bear as an incident of engaging in the particular activity if no limiting factor were identified)."
As the cases we have mentioned indicate, there are very strong reasons of policy why the exercise of legislative or policy making powers should not sound in damages though exercised negligently. Our opinion accords with that of Gummow J who said (at 175):
"Whatever otherwise may be the scope of the `administrative tort' it cannot have the reach necessary to provide any remedy in a case such as the present where the alleged negligence is in relation to an act of law-making."
CLAIM FOR MISREPRESENTATION
It was alleged by the appellants that officers of the AFMA had represented to them that a certain condition had been imposed on the boat licence granted in respect of the vessel Deb-Rene-Adele. The allegation was that the AFMA had represented that product could be taken by the Deb-Rene-Adele only from the appellant's other licensed vessel, the Karamanda-Adele, and that the appellants were not entitled to use the Deb-Rene-Adele to take product from other NPF fleet vessels. There were alleged to be two oral representations, one by a Mr Bolton, the assistant manager (Northern Prawn Fishery) of the AFMA and the second made in the course of a conversation by radio between Mr Yates, a senior operations officer of the AFMA and Mr Bienke Snr, which was also overheard by Mr Bienke Jnr and another witness, Mr de Waard.
We do not propose to describe the facts which are set out in detail in the reasons for judgment of Gummow J. His Honour rejected the versions of the conversations put on behalf of the appellants and accepted the evidence of Mr Bolton and of Mr Yates. His Honour made his findings on the factual disputes between the witnesses being assisted by observing them as they gave their oral evidence. Gummow J concluded that no misrepresentation had been made and that neither Mr Bolton nor Mr Yates misstated the terms of the licence. His Honour noted that the written licence was forwarded to Mr Bienke Snr and that he, Mr Bienke Snr, did not read it. His Honour concluded that Mr Bienke's misunderstanding flowed from an understanding which he and his wife had previously held, that the boat licence would be limited to the taking of prawns from the other boat, the Karamanda-Adele. His Honour held that, insofar as the appellants misunderstood what was said by Mr Bolton and Mr Yates, this flowed from their own prior misunderstanding of the position and from their misunderstanding of what was said in the conversations. His Honour said that it was improbable that either Mr Bolton or Mr Yates would have represented that the Deb-Rene-Adele would be prevented from taking product from boats other the
Karamanda-Adele, when that was not a term of the licence or a term imposed on other boat licences.
In Devries v Australian National Railways Commission (1993) 177 CLR 472, at 479, Brennan, Gaudron & McHugh JJ said:
"More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact (See Brunskill (1985) 59 ALJR 842; 62 ALR 537; Jones v Hyde (1989) 63 ALJR 349; 85 ALR 23; Abalos v Australian Postal Commission (1990) 171 CLR 167). If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge `has failed to use or has palpably misused his advantage' (S.S. Hontestroom v S.S. Sagaporack [1927] AC 37, at 47) or has acted on evidence which was `inconsistent with facts incontrovertibly established by the evidence' or which was `glaringly improbable' (Brunskill (1985) 59 ALJR, at 844; 62 ALR, at 57)."
In the present case, the trial Judge specifically noted that he had been assisted by seeing the witnesses give their evidence. His Honour's conclusions of fact were not "glaringly improbable". Indeed, they accorded with the probabilities of the matter. Nothing in the cross-examination established that it would have been likely for Mr Bolton or Mr Yates to have represented that there was on the boat licence a condition which was not in fact on the licence or on other licences of a like nature. The fact that Mr Yates had the licence with him when he conducted the radio conversation with Mr Bienke Snr and that he read out the terms of the licence appearing thereon makes it improbable that Mr Yates would have represented that the licence contained the alleged term.
RECOVERY OF LEVIES PAID
The final issue is whether the appellants can recover the levy paid for the 103 A Class units that remained allocated to the Deb-Rene-Adele despite its licence being shortly due to expire. The appellants claimed that they paid the levy under a mistake of law and sought recovery thereof. We need not deal with the details of the sum which might be recovered should it be shown that the levy was unlawfully exacted.
The Levy Act provided, inter alia:-
"5 Levy is imposed on:
(ba)the renewal under subsection 9 (6B) of the Fisheries Act 1952 of a licence granted under subsection 9 (2) or (3) of that Act, being a licence included in a class of licences prescribed for the purposes of this paragraph;
...
(bc)the allocation of units of fishing capacity, being units of fishing capacity prescribed for the purposes of this paragraph;
(bd)the renewal of the allocation of units of fishing capacity, being units of fishing capacity prescribed for the purposes of this paragraph;
...
7 ...
(2)The amount of the levy imposed by this Act on the renewal of a fisheries licence is payable by the holder of the licence at the time of the renewal of the licence.
...
(5)The amount of the levy imposed by this Act on the allocation of a unit of fishing capacity is payable by the person to whom the unit of fishing capacity is allocated at the time of the allocation of the unit or fishing capacity.
(6)The amount of the levy imposed by this Act on the renewal of the allocation of a unit of fishing capacity is payable by the holder of the unit of fishing capacity at the time of the renewal of the allocation of the unit of fishing capacity."
The Fisheries Levy (Northern Prawn Fishery) Regulations gave this definition in reg.2:-
"licensed boat" means a boat (within the meaning of the Fisheries Act 1952) in respect of which a licence under subsection 9 (2) of that Act is in force"
Regulation 3 provided:-
"The following units of fishing capacity are prescribed for the purposes of paragraphs 5 (bc) and (bd) of the Act:
(a)a Class A unit that is allocated to a person in accordance with the plan of management for assignment to a licensed boat in respect of which the applicable number of Class A units is not greater than 375 and to which a Class B unit is also assigned;
(b)a Class A unit that is allocated to a person in accordance with the plan of management for assignment to a licensed boat in respect of which the applicable number of Class A units is greater than 375 and to which a Class B unit is also assigned;
(c)a Class A unit that is allocated to a person in accordance with the plan of management for assignment to a licensed boat in respect of which the applicable number of Class A units is not greater than 375 and to which a Class C unit is also assigned;
(d)a Class A unit that is allocated to a person in accordance with the plan of management for assignment to a licensed boat in respect of which the applicable number of Class A units is greater than 375 and to which a Class C unit is also assigned;
(e)a Class A unit that is a surplus unit."
Regulation 4 provided that the amount of the levy would be ascertained as follows:-
"For the purposes of section 6 of the Act, the amount of levy imposed by paragraph 5 (bc) or (bd) of the Act on the allocation or the renewal of the allocation of a Class A unit of fishing capacity specified in column 2 of an item in the Table, for the period specified in column 3 of that item, is the amount specified in column 4 of that item.
Column 1 Column 2 Column 3 Column 4
Item No Unit Date Period Date Period Amount
begins ends
unit to which 14 December in end of 13 July in $25.40
paragraph 3 each year the subsequent
(a) applies year
unit to which 14 December in end of 13 July in $32.80
paragraph 3 each year the subsequent
(b) applies year
unit to which 14 December in end of 13 July in $25.40
paragraph 3 each year the subsequent
(c) applies year
unit to which 14 December in end of 13 July in $32.80
paragraph 3 each year the subsequent
(d) applies year
unit to which 14 December in end of 13 July in $32.80
paragraph 3 each year the subsequent
(e) applies year
At the relevant time, after amendment of the Plan by NPF10, the NPF Plan provided, inter alia:-
"15.1 The Manager shall cause to be issued to:
...
(b)each unit holder other than those referred to in (a) above, a notice of assessment of the amount of levy payable, for each period described in paragraphs 15.2(a)(ii), (a)(iii) and 15.2(b) below, in relation to Class A units held by that person in respect of the 12 months period commencing on 14 December in any year and ending on 13 December in the following year."
15.2 A unit holder may apply, in the form approved by the Manager, to have the number of Class A units specified in the application allocated to the unit holder:
(a)for assignment to a boat together with a Class B unit or a Class C unit, for the periods
...
(ii)14 December in any year to 13 July in the following year (both inclusive); and
(iii)14 July in any year to 13 December in the same year (both inclusive); or
(b)excluding units undertaken to be surrendered under paragraph 20A.(2)(ii) of this plan as surplus units, for the periods
(i)14 December in any year to 13 July (both inclusive); and
(ii)14 July in any year to 13 December in the same year (both inclusive).
15.3Subject to this plan, upon payment of the amount of levy specified in the notice of assessment issued pursuant to paragraph 15.1 above, the Manager shall
(a)allocate to that person the number of Class A units specified in an application under paragraph 15.2 above; and
(b)as appropriate, assign the applicable number of Class A units to the boat together with a Class B unit or a Class C unit specified in an application under paragraph 15.2 above."
It follows from the above that a levy was payable prior to or at the time of the allocation of the units and the assignment of those units to a boat and also at the time of the renewal thereof. Upon the boat ceasing to hold a licence, the assignment of the units to the boat ceased by virtue of para. 12.2 of the NPF Plan which provided:-
"12.2 The assignment of units to a boat ceases upon the expiry, cancellation, suspension or cessation otherwise of the boat licence in respect of that boat. This provision does not apply in relation to boats, the boat licences in respect of which are surrendered pursuant to arrangements under Schedule H of Article 22 of the Torres Strait Treaty."
Nevertheless, the units remained allocated to the boat owner who could transfer the units to another vessel. Paras. 13.1 and 13.2 of the NPF Plan provided:-
"13.1 An application by a unit holder to transfer units to another person, made on the form approved by the Manager, shall be accompanied by a certificate issued to the unit holder pursuant to paragraphs 17.1 or 17.2 of this plan.
13.2 The Manager shall not approve a transfer of units where there are reasonable grounds to believe that information contained in that application does not concur with information gained by the Manager from appropriate State fisheries authorities in relation to -
(a)other fishing entitlements in respect of the boat to which the units are assigned; or
(b)other fishing entitlements in respect of a boat, held by the unit holder proposing the transfer of surplus units previously assigned to that boat."
In the present case, the levy was paid under s.5 on the renewal of the allocation of units of fishing capacity. These units were renewed by the appellants, for they had a value, whether or not they were assigned to a boat. The units which had been allocated to the appellants could still be transferred for value to the owner of a licensed vessel.
In our opinion, the words in reg.3 of the Regulations "for assignment to a licensed boat" refer to units which were allocated for the purpose of being assigned to a fishing boat. We agree with Gummow J who said (at 191-2):
"The preposition `for' indicates the purpose or object of the allocation, in advance of its attainment. Thus, units may remain allocated, with the objective that they may be assigned to a boat in respect of which there is a current licence, even though that objective has yet to be achieved: cf. Sawyer v Secretary, Department of Primary Industry (1993) 44 FCR 66, at 71-72."
In any event, para 4D of the NPF Plan provided, inter alia:-
4D.1 A Class A unit is a surplus unit if:
(a)it is not a suspense unit; and
(b)it is not currently assigned to a boat.
4D.2 At any given time, a surplus unit is either a surplus type I unit or a surplus type II unit.
4D.3 A surplus unit is a surplus type II unit for the purposes of this plan if the unit:
(a)has at any time been assigned to a boat; and
(b)last ceased to be assigned to a boat after 3 December 1990.
4D.4For the purposes of this plan, any surplus unit except a surplus type II unit is a surplus type I unit.
The units held by the appellants had been allocated to the appellants for assignment to a licensed vessel and had been assigned to that vessel. The vessel, however, subsequently became unlicensed by operation of para. 12.2 of the NPF Plan. The units were, nevertheless, still allocated to the persons by whom they were held and were consequently designated as surplus type II units. At the time when the levy was payable, they were still allocated though not assigned. The levy would appear to have been payable in accordance with s.5, reg. 3(e) and item 5 of reg.4. As the amount of that levy was at the highest rate, there was no possible basis for a refund.
We agree with Gummow J that the appellants were not entitled to a refund of the levy or any part thereof.
ORDER
For these reasons, we are of the view that the appeal should be dismissed with costs.
I certify that this and the 50 preceding pages are a
true copy of the reasons for judgment herein of the Court.
Associate:
Date: 8 February, 1996
Counsel for the appellants: D.M.J. Bennett QC
A.W. Street
Solicitors for the appellant: Thomson Rich O'Connor
Counsel for the respondents: D.F. Jackson QC
G. Elliott
Solicitor for the respondents: Australian Government Solicitor
Date of hearing: 24 February 1995
Date of judgment: 8 February, 1996
37
39
0