Butcher v Director of Fisheries
[2006] SADC 60
•8 June 2006
DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
BUTCHER v DIRECTOR OF FISHERIES
[2006] SADC 60
Judgment of His Honour Judge David Smith
8 June 2006
ADMINISTRATIVE LAW
PRIMARY INDUSTRY - FISH - LICENCES
STATUTES - BY-LAWS AND REGULATIONS - CONSTRUCTION - PARTICULAR WORDS
Appeal from decision of the Director of Fisheries to single Judge of the District Court – appellant applied for Charter Boat Fishery Licence – respondent refused application – whether appellant was an “eligible person” within meaning of reg 3(1) of Fisheries (Scheme of Management – Charter Boat Fishery) Regulations 2005 (SA) – whether appellant was “carrying on a charter boat fishing business” at the relevant time – discussion of “carrying on business” – held appellant was an “eligible person” within the meaning of reg 3(1) – appeal allowed – decision of the Director of Fisheries rescinded - approve appellant as an eligible person – matter to be remitted to Director.
Fisheries (Scheme of Management - Charter Boat Fishery) Regulations 2005 reg 3(1), 5(2); Fisheries Act 1982 s58; District Court Act 1991 s42E, s42F, referred to.
Nader v Australian Pharmaceutical Industries Limited (1981) 37 ALR 453; Hungier v Grace (1972) 127 CLR 210; Hope v Bathurst City Council (1980) 144 CLR 1; Edgelow v MacElwee [1918] 1 KB 205; Smith v Anderson (1880) 15 ChD 247; Smith v Capewell (1979) 142 CLR 509; JS McMillan Pty Ltd v Commonwealth (1997) 77 FCR 337; Re Griffin; ex parte Board of Trade (1890) 60 LJQB 235; Fairway Estates Pty Ltd v Commissioner of Taxation (1970) 13 CLR 153, considered.
BUTCHER v DIRECTOR OF FISHERIES
[2006] SADC 60Introduction
On the 3rd October 2005, the appellant applied for a Charter Boat Fishery Licence pursuant to reg 5(2) of the Fisheries (Scheme of Management - Charter Boat Fishery) Regulations 2005 (SA).
By letter dated the 24th January 2006, the Director of Fisheries notified the appellant that he had refused the application because the appellant was not an “eligible person” within the meaning of reg 3(1); in that he was not at the time of the application “carrying on a charter boat fishing business”.
In his letter notifying the appellant of his decision to refuse the grant of a licence, the Director set out his reasons as follows:
The reasons for my decision that you are not eligible to be issued a Charter Boat Fishery licence are that, based on the evidence supplied by you, I am not satisfied that you are currently carrying on a charter fishing business, which is one of the criteria set out in the regulations. While you may have operated a charter fishing business in partnership prior to 28 November 2003, this activity has not been ongoing. You purchased the second share of the vessel you were using for charter operations and subsequently took over the business in November 2003, but this vessel has been undergoing repairs since that time and has not been involved in running fishing charters for the business. Having a boat undergoing repairs is not enough to constitute “carrying on a business”. You have advised that you have been receiving some income from other unrelated sources.
On the 23rd February 2006, pursuant to s58 of the Fisheries Act 1982 (SA), the appellant appealed against the decision of the Director. The grounds of appeal are as follows:
1.That the Appellant has been denied procedural fairness by the Director in the making of the decision that he is not eligible to be issued a Charter Boat Fishery licence.
2.That the Director has misapplied the expression “carrying on a charter boat fishing business” as provided in Regs 3(1)(a), (b) of the Fisheries (Scheme of Management – Charter Boat Fishery) Regulations 2005.
3.That in making the decision appealed from, the Director has failed to take into account relevant considerations, namely:
- the Appellant kept his Certificate of a Registration of a Business Names current
- the Appellant’s expenditure on the boat and business
- the boat of the Appellant was undergoing repairs.
4.The Appellant appeals against the whole decision.
Nature of Appeal
Section 58 of the Fisheries Act 1982 provides that a person aggrieved by, inter alia, a decision of the Director refusing an application for an “authority” may appeal to the Administrative and Disciplinary Division of the District Court (see s58(1)(a)). An “authority” is defined as a “licence, permit, registration or lease provided for by or under this Act (see s5(1)).
Sections 42E and 42F of the District Court Act 1991 set out my powers on this appeal in the following terms:
42E (1) The Court must, on an appeal, examine the decision of the original decision-maker on the evidence or material before the original decision-maker but the Court may, as it thinks fit, allow further evidence or material to be presented to it.
(2) The Court, on an appeal—
(a)is not bound by the rules of evidence but may inform itself as it thinks fit; and
(b) must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(3) The Court must, on an appeal, give due weight to the decision being appealed against and the reasons for it and not depart from the decision except for cogent reasons.
42FThe Court may, on an appeal –
(a)affirm the decision appealed against;
(b)rescind the decision and substitute a decision that the Court considers appropriate;
(c)remit matters to the original decision-maker for consideration or further consideration in accordance with any directions or recommendations of the Court.
Legislative requirements for obtaining Charter Boat Fishery Licence
The requirements for the grant of a licence are found in both the Fisheries Act 1982 (“the Fisheries Act”) and the Fisheries (Scheme of Management – Charter Boat Fishery) Regulations 2005.
Section 34 of the Fisheries Act provides, inter alia, that “a person must not, for the purpose of trade or business, engage in a fishing activity of a class that constitutes a fishery unless the person holds a licence in respect of the fishery”. Section 35 provides, inter alia, that applications for a licence must be made to the Director. Section 36 empowers the Director to determine applications for licences in accordance with “the provisions of the scheme of management prescribed for the fishery”
The Charter Boat Fishery was established by the Fisheries (Scheme of Management – Charter Boat Fishery) Regulations 2005 (“Regulations”) which came into operation on the 1st August 2005. These regulations set out the criteria for being considered “eligible” to be granted a Charter Boat Fishery Licence.
In particular, reg 5 deals with Charter Boat Fishery Licences. Regulation 5(3) requires, inter alia, that the Director be satisfied that the applicant is “an eligible person”. “Eligible person” is defined by reg 3(1) as:
(a)a natural person or company carrying on a charter boat fishing business that was established on or before 28 November 2003; or
(b)a natural person or company carrying on a charter boat fishing business that was in the process of being established on 28 November 2003; or
…………………..
“Charter boat fishing business” is defined also in reg 3(1) as:
the business of facilitating recreational fishing by persons by the provision of charter boat fishing services to the persons under charter boat fishing agreements;
So in this matter, the appellant needed to satisfy the following criteria to be eligible for a licence:
·that he was carrying on a charter boat business (as defined) at the time of making the application, and that the charter boat business was established on or before 28 November 2003; or
·that he was carrying on a charter boat fishing business that was in the process of being established on 28th November 2003.
Evidence
I have before me the evidence which was before the Director. But also I admitted into evidence for the purposes of this appeal an affidavit sworn by the appellant on the 7th May 2006. I admitted this affidavit over objection pursuant to s42E(1) of the District Court Act. Properly characterised, it was “further evidence or material”.
So the evidence in the matter can be summarised as follows:
1.Between 1998 and late November 2003, the appellant carried on the Charter Boat business of “Althorpe Island Charters”, in partnership with Daniel Easterbrook (“Easterbrook”).
2.The partnership business operated predominately during the summer months using a boat named “Phantasea”.
3.During the Christmas 2002 and New Year 2003 period, the partnership conducted four or five charters.
4.Early in the New Year of 2003, the Phantasea sunk on its moorings.
5.As a result of defalcations by the appellant’s partner, Easterbrook, the partnership experienced financial difficulties and so the boat was not repaired immediately. After protracted negotiations, the appellant purchased Easterbrook’s interest in the business for $37,000 and so the partnership dissolved. This dissolution and buy-out was finalised on the 15th November 2003.
6.On 21st November 2003, the appellant notified Transport SA that the boat would not be used commercially for six months.
7.Also on the 21st November 2003, the appellant lodged a change of ownership notice with Transport SA and renewed the business name registration of “Althorpe Island Charters” presumably indicating himself as the sole owner.
8.The boat remained on land at Marion Bay, until in about February or March 2004, it was towed to Adelaide for repair. Before this was done, namely the bringing of the boat to Adelaide for repair work, the appellant had to purchase a tractor to pull the boat and a trailer which required the fitting of brakes and a hitch. The tractor was purchased on the 14th December 2003. The hitch was welded to the trailer on the 15th January 2004 and brakes were fitted to the trailer on the 6th February 2004. The appellant did not have the resources to make all these purchases immediately and did so gradually by working as a plumber.
9.During this time, namely Christmas 2003 and early 2004, the appellant “skippered” other chartered boats operating out of Marion Bay. Also, when time allowed, he worked on the repair of the boat.
10.It was not until mid-2004 that the appellant learned of the full extent of the damage to the boat. The sum of $7,150 was required to repair it. This was done on about the 16th June 2004.
11.On the 18th December 2004, the appellant obtained his Senior First Aid Certificate and on the 27th May 2005 renewed his Coxswain’s Certificate.
12.On the 3rd October 2005, the appellant made the application the subject of this appeal. Included in the application were, inter alia, the following invoices and certificates relating to the Phantasea:
·supply of tanks (28.11.02)
·purchase of starter motors for boat’s engine (19.11.03)
·bill for the supply and fitting of, inter alia, engine housing (21.05.04)
·survey status (15.06.05)
·life raft certification (3.08.05) and
·radio licence (3.08.05)
13.On the 7th October 2005, the business name “Althorpe Island Charters” was renewed.
14.Further work on the hull of the boat was carried out in January 2006 by a firm called Spentek.
In his affidavit, the appellant summed up his position in the following terms:
Since 2003, I have spent over $50,000.00 just to get the boat in my name, bring it to Adelaide and do the basic repairs. I have been operating charter boat fishing excursions for years.
Right now, I’m cray fishing. I started in November 2005. The season goes through to 31 May 2006, unless we catch our quote beforehand. I am trying to save as much as possible to use on boat repairs, but the fishing limits your entire life and there’s not much opportunity during the season for me to work on the repairs.
I believe that the boat will be ready to resume regular charters by Christmas 2006. Arno Marine Services have got all the parts and are readying these for me to bolt on to the boat, the transom assembly and so forth. But then it needs to go through survey, insurance, and get the lifeboats certified.
I have:
kept up the Business Registration,
always run the charter fishing business so far as I was able,
just needed to get the money together and the time to carry out the repairs.
(see paras 25 to 28 of affidavit of appellant sworn on 7.05.06)
Issue
It is clear that the charter boat business was established on or before the 28th November 2003 and so the issue is whether the appellant was carrying on that business at the time of the application.
Some legal principles – meaning of “carrying on business”
Both counsel have helpfully referred me to a number of authorities dealing with this well-worn phrase. I distil from those authorities the following principles:
·Whether a person is carrying on a business is decided by reference to the ordinary and natural meaning of that phrase having regard to the circumstances of the particular case (see Nader v Australian Pharmaceutical Industries Limited[1]). It is necessary when giving meaning to the phrase to have regard to the facts of each case (see Hungier v Grace[2]). The question is whether the operations being examined fall within the ordinary meaning of the words (see Hope v Bathurst City Council[3]);
·In construing the words there should be no confining formula. “The line of demarcation cannot be defined with closeness or indicated by any specific formula. Each case must depend on its own peculiar features. It is ever a question of degree” (see Edgelow v MacElwee[4]).
·The words carry on business ordinarily convey:
-a repetition of acts but not one particular act which is never to be repeated (see Smith v Anderson (1880) 15 ChD 247);
-a course of conduct involving the performance of a succession of acts and not simply the effecting of one solitary transaction (see Smith v Capewell[5]);
-system and regularity (see JS McMillan Pty Ltd v Commonwealth[6]);
·A solitary transaction may however amount to the carrying on of a business if it is undertaken with the intent that it is the first of several transactions of an existing business (see Re Griffin; ex parte Board of Trade[7]; see also Smith v Capewell[8]);
·What is crucial is that there is present in the circumstances the common indicia of a commercial enterprise which has some permanence, and has the appearance of a going concern (see Hungier v Grace[9]; see also Hope v Bathurst City Council[10]).
[1] (1981) 37 ALR 453 at 458 per Lockhart J
[2] (1972) 127 CLR 210 per Barwick CJ at 216, 217
[3] (1980) 144 CLR 1 per Gibbs J at 8
[4] [1918] 1 KB 205 at 206
[5] (1979) 142 CLR 509 per Gibbs J at 517
[6] (1997) 77 FCR 337 per Emmett J at 354
[7] (1890) 60 LJQB 235 per Lord Esher at 237
[8] (supra) per Barwick J at 518, 519
[9] (supra) per Barwick CJ at 218
[10] (supra) per Mason J at 8
The appellant’s counsel particularly relied upon the case of Fairway Estates Pty Ltd v Commissioner of Taxation[11]. The facts are instructive. Fairway Estates Pty Ltd (“Fairway Estates”) was incorporated in October 1958 with the object of, inter alia, lending money. In May 1959, or thereabouts, it loaned £28,245 to a tin mining company (“Jubilee”). It made no other loans until August of 1960. However, from August 1960 until 30 June 1964 it made approximately 21 loans. So in the 21 months from incorporation in October 1958 until August 1960 there had been only that single loan to Jubilee in May 1959. As at the 30th June 1963, Jubilee still owed Fairway Estates £26,940. Fairway Estates wrote it off as a bad debt and claimed it as a deduction in its taxation return for the year ended the 30th June 1964. In order to legitimately claim such a deduction, Fairway Estates had to be carrying on the business of lending money at the time of making the advance (see s63(1)(b) of the Income Tax and Social Services Contribution Assessment Act (1963-1964). The deduction was disallowed. An objection to the ensuing assessment was disallowed. And so Fairway Estates appealed. One of the contentions of the Commissioner was that Fairway Estates at the time of the advance was not carrying on the business of a moneylender. The appeal was allowed by the High Court. The Court held that the deduction should have been allowed as the advance was made by Fairway Estates in the course of carrying on the business of money lending. On this issue of what constituted “carrying on business”, Barwick CJ said at 163, 164 and 165 as follows:
[11] (1970) 13 CLR 153
In applying this construction of the section to the facts of this case the critical question is whether or not the appellant was carrying on the business of lending money at all at the time of the advance to Jubilee. If it was not then doing so, no further question arises.
The appellant was incorporated to carry on the business of the lending of money along with other activities. This, I am satisfied was an actual intention of its subscribers and not merely a precautionary inclusion of an object in its memorandum along with a large number of other possible courses of action. The appellant's association with United, having regard to the activities and financial resources of that company, confirms the view that the appellant intended throughout to carry on the business of the lending of money as opportunity offered.
However, up to the date of the advance to Jubilee it had not commenced to carry on any such business.
..................
In cases upon the application of legislation to control money-lenders it has been usually said that to carry on the activity as a business, repetition and continuity is necessary, and on occasions the requisites have been described as involving a plan or scheme of activity.
..................
It is of course true as the respondent's counsel has emphasized that there were no loans made between the date of the advance to Jubilee and August 1960, or as he preferred to state the fact, only one loan in the first twenty-one months of the appellant's existence. The force of this fact would be greater in my mind if the question was whether the appellant intended to carry on the business of money-lending.
But given that intention, which as I have said, I regard as fully established by other evidence, I do not regard the fact that there was no immediate repetition of the lending of money or that there was a considerable break before there was any continuity in the making of loans as definitive of the question whether the business of lending money was being carried on at the time of the advance to Jubilee.
..................
I am of opinion that the proper conclusion in this case is that the appellant was carrying on the business of lending money at the time it made the advance to Jubilee and that that loan was the first transaction in a business of the lending of money then commenced and intended to be carried on.
(the italics are mine)
With those principles in mind, I now turn to their application to the facts of this matter.
Findings
The charter boat fishing business, namely Althorpe Island Charters, commenced as a partnership in September 1999. It operated actual fishing charters in the summertime. The chartered trips stopped in early 2003 when the boat sank and the appellant discovered his partner’s defalcations. The appellant then purchased his partner’s interest in the business and set about repairing the boat. Repairing the boat and readying it for fishing charters will have taken three years by the time the charters starts again, which will be Christmas 2006. However, it is evident that throughout this period since early 2003 the appellant has been attending to the repair of the boat when finances have permitted and otherwise has been keeping the business alive.
The chartered fishing trips are but one, albeit a major one, of the indicia of the carrying on of this business. So, although there has been, what might be regarded, as an inordinate gap in the income earning activity of the business, namely the chartered fishing trips, the evidence demonstrates the appellant’s intention to carry on the business which he started with his partner in 1999. Throughout the period of time since the last chartered trip, the appellant has evinced that intention by:
·purchasing his partner’s interest at considerable expense;
·repairing the boat as his finances had permitted;
·purchasing ancillary equipment such as a tractor and a trailer;
·completing a Senior First Aid course;
·renewing the boat’s radio licence;
·servicing and certifying the life raft;
·keeping the business name renewed; and
·maintaining “skippering skills” by taking out other charters.
All these activities point to an ongoing commercial enterprise. All that has happened in respect of this business is that the income generating asset has required major and time consuming repairs. The other manifestations or indicia of a live business are present.
Undoubtedly there will be pauses in the operation of a business which may indicate that it is no longer being carried on. In this case, if there had been no business related activity at all, but merely the expressed intention to resume, it might be different. Rather, in this case there has been the intention coupled with ongoing activity both of which demonstrate the carrying on of the business. As indicated by the court in Edgelow v MacElwee (supra) “It is ever a question of degree”.
There is no need to deal with the “natural justice” ground of appeal.
Conclusion
So I find that the appellant is an “eligible person” as defined by reg 3(1) because he is:
... a natural person ... carrying on a charter boat fishing business that was established on or before 28 November 2003; ... (see reg (3)(1)(a))
Therefore the appellant was entitled to be issued a charter boat fishery licence. There are cogent reasons to depart from the decision of the Director (see s42E(3)). Accordingly, I rescind the decision of the Director and approve the appellant as eligible to hold a Charter Boat Fishery Licence. I remit the matter to the Director and direct that he grant such a licence to the appellant.
I will hear the parties as to the precise terms of this order and direction, and as to any other consequential matters.
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