Clark and Anor and Australian Fisheries Management Authority
[2006] AATA 597
•5 July 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 597
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2004/405
GENERAL ADMINISTRATIVE DIVISION ) Re PATRICK JAMES CLARK First Applicant
Re PATRICK JAMES CLARK and
MARIE DIANNE CLARKSecond Applicant
And
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent
AND No. S2004/406
Re PATRICK JAMES CLARK and
MARIE DIANNE CLARKApplicants
And
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date5 July 2006
PlaceAdelaide
Decision The Tribunal affirms the decisions under review.
D G Jarvis
(Signed)
(Deputy President)
CATCHWORDS
PRIMARY INDUSTRY – fisheries – Gillnet Hook and Trap Fishery – Southern Shark Fishery – fishing quota allocation policy – effect of revised policy entailing public interest considerations on individual participants in industry and groups of participants – revised policy not invalid – particular circumstances of applicants do not warrant a decision not to apply the policy – respondent not estopped from applying revised policy – decisions under review affirmed.
Administrative Appeals Tribunal Act 1975 (Cth), s 2A
Fisheries Management Act 1991 (Cth), ss 3 and 32
Australian Fisheries Management Authority v Fischer (2003) 127 FCR 436
Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568
Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3
PW Adams Pty Ltd v Australian Fisheries Management Authority (1998) 49 ALD 68
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Re Fischer and Australian Fisheries Management Authority (2005) 98 ALD 324
Re Fischer and Australian Fisheries Management Authority (2002) 71 ALD 665
Skoljarev v Australian Fisheries Management Authority (1995) 39 ALD 517
REASONS FOR DECISION
5 July 2006 Deputy President D G Jarvis 1. The Australian Fisheries Management Authority (“AFMA”) issued certain fishing permits to the applicant, Peter James Clark, authorising him to engage in commercial fishing in the Gillnet Hook and Trap Fishery in the year 2004. The permits issued to Mr Clark were as follows:
·Permits 313E/F, which specified a maximum permissible quota of 1,408.3 kg of school shark and 7,852.43 kg of gummy shark; and
·Permit 26940B, which specified a maximum quota of 0 kg for school shark and 0 kg of gummy shark (which meant that that permit did not allow fishing for either of those species).
2. AFMA also issued permit number 849C for the year 2004 to the applicants Patrick James and Marie Dianne Clark, who were carrying on business in partnership. This permit authorised them to fish in the Gillnet Hook and Trap Fishery and specified a permissible quota of 3,254.77 kg of school shark and 11,171.39 kg of gummy shark.
3. The quota allocated on the permits was in total less than the quota available to Mr Clark and the partnership under permits issued in respect of the year 2003. The applicants requested AFMA to reconsider the allocations of quota for the year 2004. In a reviewable decision dated 13 October 2004, a delegate of AFMA decided that a correct allocation had been made to Mr Clark in accordance with AFMA’s policies in respect of quota allocation, and that the delegate was not satisfied that there were cogent reasons warranting a departure from the application of AFMA’s policies in his case. The delegate accordingly determined in effect that the quota condition attached to the permits would remain the same. On 19 October 2004 5he same delegate made a reviewable decision in relation to the permit issued to the partnership, and arrived at the same decision, so that once again, the quota condition attached to the partnership permit (Permit 849C) remained unaltered.
4. The quota that had been allocated to the applicants in 2003 had almost entirely been purchased by them from other persons during and after 2001. In that year the applicants had decided, following discussions with AFMA, to purchase sufficient quota from other persons to establish a viable shark fishing business. They subsequently purchased quota units or quota between 2001 and 2003.
5. During this period AFMA allocated quota to permit holders pursuant to a new management policy which had been introduced with effect from January 2001. The allocation pursuant to that policy was based on the catch history of permit holders in certain earlier years in the Southern Shark Fishery (“SSF”). That fishery was merged with the Gillnet Hook and Trap Fishery on 1 January 2003 to create the South-East Non-Trawl Fishery, being the fishery to which the applicants’ 2004 permits related.
6. In Re Fischer and Australian Fisheries Management Authority (2002) 71 ALD 665 this Tribunal held that the 2001 management policy was flawed, because it was based on the incorrect premise that permits were not transferable, and accordingly failed to take into account that permits had an intrinsic value. An appeal against this decision by AFMA was dismissed in Australian Fisheries Management Authority v Fischer (2003) 127 FCR 436. After further extensive investigation and consultation with persons involved in the fishing industry AFMA adopted a new quota allocation policy, which came into effect in January 2004. Under this new policy quota was allocated according to a formula which recognised a combination of catch history and the inherent value of permits. It was the application of this new policy that resulted in an overall reduction in the total quota referred to in the applicants’ 2004 permits.
7. Mr Clark and the Clark Partnership have applied to this Tribunal for review of the reviewable decisions referred to in paragraph 3 above. I directed that both applications to this Tribunal be heard together, and that the evidence in each application be treated as evidence in the other.
Issues Before the Tribunal
8. The applicants were self represented. In the application for review, they simply stated in effect that the reviewable decisions were unfair.
9. Further background information and reasons for the application to this Tribunal are contained in a document lodged by the applicants and entitled “Statement of Reasons” (exhibit A3). This was apparently intended by the applicants to constitute their statement of facts and contentions. It contains certain information relevant to the steps that the applicants took to purchase quota from other persons, and also refers to certain communications to them from AFMA.
10. On the basis of this Statement of Reasons and other documentary material tendered at the hearing, and from the evidence and submissions before me, I think that the issues in this matter can be distilled to the following primary issues:
(a)Did the application of the new 2004 allocation policy lead to an unjust result in the applicants’ case, because there are special circumstances applicable to them, or cogent reasons which justify a departure from that policy in their case?
(b)If so, on what basis should quota have been allocated to the applicants in 2004?
(c)Is AFMA estopped, by reason of communications it made to the applicants when they purchased units of quota from other persons, from reducing the allocation of quota units previously specified in the subject permits when it adopted the new allocation policy that took effect from January 2004?
The applicants also raised a number of specific concerns or issues to which I will refer below as appropriate.
11. The applicants have also made certain comments critical of the 2001 management policy as well as the 2004 policy. However, the applicants did not suggest that AFMA had not calculated their permanent unit quota in accordance with the 2004 policy, if that policy was to be applied to them. Further, Mr Clark acknowledged that the applicants are not seeking monetary compensation, or to challenge the validity of the 2004 policy; rather, he claims that it operated unfairly to the applicants, and should not have been used so as to reduce the units or quota which they had purchased.
12. Although the applications before me relate to the year ended 31 December 2004, AFMA’s policy is to give effect in future years to any adjustment in allocations resulting from successful applications for review. The proceedings before me are not therefore futile on the ground that they relate to quota allocated to permits which have since expired.
Background
13. Mr Clark is aged fifty-four. He completed his apprenticeship as a carpenter when he was 21 years of age, and currently does building work when he is not fishing. He is the Deputy Chair of the Elliston District Council. He has fished on a commercial basis on his own account for the last thirteen years, more recently in waters off South Australia. Prior to that he held a cray licence and fished for rock lobster off Tasmania.
14. Late in 2000 Mr Clark applied for a permit to fish for shark in the SSF in 2001, being the first year of operation of the new AFMA management policy, which as I have said was based upon catch history.
15. In Mr Clark’s case, his catch history occurred in waters off Tasmania where he had taken shark in the course of using his cray licence. He said that he was unable to substantiate the full extent of his catch history because records had been lost in a fire at the premises of his fish buyers, and because other shark he had caught had been credited against cray bait. Mr and Mrs Clark were granted SSF permit 26962 on 26 February 2001 entitling them to fish certain waters defined as the Tasmanian Rock Lobster Sector, on condition that the weight of gummy shark that could be taken under the permit was 336.00 kg, and there was no entitlement for school shark.
16. Mr and Mrs Clark were disappointed with their allocation. However, after various communications with AFMA, they decided not to seek a review of the allocation. They also decided that they would purchase sufficient quota from third persons to enable them to establish a viable shark fishing business in the SSF. In the Statement of Reasons (exhibit A3) Mr Clark said that the viable quota needed to be 30 to 40 tonnes of shark. In his evidence before me, he said that the quota needed to be 28 to 30 tonnes.
17. Mr Clark and the Clark Partnership then proceeded to purchase quota units from third persons. They entered into the following transactions:
(a)On 1 June 2001 Mr and Mrs Clark entered into a contract to purchase 425 units of gummy shark and 161 units of school shark from A & C Figl, for $10,123 plus GST. AFMA registered this transfer on 6 June 2001.
(b)On 8 June 2001, Mr Clark entered into a contract to purchase 469 units of school shark and 6,438 units of gummy shark from Peter Bailey, for $107,430 plus GST. AFMA registered this transfer on 1 August 2001.
(c)On 12 July 2001, Mr and Mrs Clark entered into a contract to purchase Tasmanian Rock Lobster entitlement number 90 and five pots, inclusive of a then current quota Tasmanian Fishing Licence (Vessel) 0-20, and also SSF permit number 849B “plus 13,378 Kg Gummy Shark Quota & 5311 Kg School Shark Quota” from one W G Ballinger, for a total price of $540,000. AFMA registered this transfer on 11 September 2001.
(d)Mr Clark lodged with AFMA an application dated 29 March 2002 to register a transfer to himself from William J Southern of 276 quota units of gummy shark, with permit 26940. I understand that this application reflects the terms of a written contract which the parties entered into, but which Mr Clark is now unable to produce. AFMA registered this transfer on 5 June 2002.
(e)On 3 June 2002 Mr and Mrs Clark contracted to purchase from Douglas John Shea permit number 313D and its “attached Shark Quota” after 1 July 2002, for a purchase price of $110,000. The amount of the attached quota was not specified in the contract of sale. In the application made to AFMA to transfer the quota (being a form QS1) the quota to be transferred was relevantly described as 3,462 permanent quota units and 2,668 kg of seasonal quota of gummy shark, and 1,861 permanent quota units and 1,397 kg seasonal quota of school shark. AFMA registered this transfer, together with a transfer of permit 313E, on 16 June 2003.
18. Following the registration of each of the transfers referred to above, AFMA sent to the applicants a confirmation notice which referred to the prior application to permanently transfer units of quota, and advised that the “permanent transfer has been completed and the following details entered on to the Unit Register”. The notice then showed the name of the transferor(s) and transferee(s) and the date when the transaction was recorded, the species of fish and the number of “transferred units”. It further advised that quota from the transfer would be available at the start of the next season.
19. In 2001, Mr and Mrs Clark entered into the following further contracts, but did not apply to AFMA to register the transfers of units contemplated by the contracts. As a result, the transactions in question were not registered or recognised by AFMA.
(a)The first of these contracts was referred to as the McLean transaction. In July 2001, Mr and Mrs Clark contracted to purchase from Sandmar Pty Ltd, for a purchase price of $18,862.35, 526 “units of permanent school shark quota” and 526 “units of permanent gummy shark quota” which had been allocated pursuant to a permit issued to that company by AFMA for the year 2001. Under the terms of the contract, the vendor company warranted that it was the beneficial holder of the units of quota in question. The parties agreed in effect that the applicants could utilise the school and gummy shark quota as seasonal quota until the shark quota could be permanently transferred.
(b)On 31 October 2001 Mr and Mrs Clark entered into a contract with Michael R Aston to purchase 2,300 kg of gummy shark for a purchase price of $41,239. This contract was subject to a special condition to the effect that the quota was to be transferred to Mr and Mrs Clark’s permit on a seasonal transfer for the remainder of the 2001 season, and transferred on a permanent transfer “on 2 January 2001”. It appeared that this date should have read “2 January 2002”, and that the year 2001 was inserted in error.
20. Neither of these further contracts provided for the transfer of the permits under which the quota had been allocated. Mr Clark acknowledged in his evidence that both the McLean and Astons transactions involved utilising deeds of trust, and that he was aware that AFMA would not register the transfers of the units for that reason, and because of AFMA’s policy that permanent quota could not be transferred separately from the permit on which it had been allocated. Mr Clark said that the McLean transaction was later reversed, because AFMA had not (contrary to his expectations) permitted the splitting of quota from permits. Notwithstanding this, the Clark Partnership has been leasing the quota referred to in the Aston contract on a seasonal basis.
21. In 2003 Mr and Mrs Clark transferred to a third party the permit initially issued to them, namely permit number 27121, together with the attached quota of 336 units of gummy shark, because they no longer needed to continue to hold that permit.
22. As a result of the 2004 allocation policy, there was an overall reduction in the number of permanent quota units that the applicants were allocated compared with their 2003 allocation. The overall effect of the allocation under the 2004 policy compared with the allocation under the 2003 policy (after allowing for adjustment in accordance with a conversion factor arising from the amalgamation of the SSF with the South East Trawl Fishery) was to reduce the applicants’ combined units of gummy shark by 411 units, and to reduce their combined units of school shark by 656 units. Particulars of these adjustments are contained in exhibit R7.
23. During the hearing the parties agreed that if the applications to this Tribunal are decided in favour of the applicants, their allocations in 2004 should be increased by the above overall net amounts of 411 units of gummy shark and 656 units of school shark. These figures do not take into account the McLean or Aston transactions, but I understand that the applicants are not claiming any further adjustment in consequence of those transactions, which they knew to be contrary to AFMA’s management policy. In his submissions dated 13 June 2006, Mr Clark proposed that the reduction in quota units attached to the permits he acquired from Figl and Bailey should be reinstated.
24. Mr and Mrs Clark have obtained quotes for a new multi-purpose vessel which can be used for scale fishing, shark fishing and cray fishing. They intend to go ahead with the building of the vessel. I accept Mr Clark’s evidence that the applicants did not acquire quota, and do not now intend to hold their quota, as investors, and that they wish to continue in the shark fishing industry.
The Evolution of AFMA’s 2001 and 2004 Management Policies
25. AFMA called its acting General Manager of Fisheries, Geoffery Robert Richardson, who gave helpful evidence as to the history of the Southern Shark Fishery and the Gillnet Hook and Trap Fishery, and the evolution of the management arrangements in those fisheries.
The 2001 Management Policy
26. According to Mr Richardson’s witness statement (exhibit R2), prior to 1 January 2001 the SSF was managed under a regime of input controls such as restrictions on gear, seasonal closure and limitations on entry to the fisheries. He explained that the new management regime introduced in 2001 was based on output controls, that is, imposing a limitation on the total allowable catch in the fishery, and the introduction of quotas which limited the amount of catch which could be taken under permits issued by AFMA. The quotas were referred to as “Individual Transferable Quotas” (“ITQs”). The concept of ITQs was to provide fishermen with the flexibility to be able to adjust their quota holdings to best suit their fishing businesses and day-to-day operations. ITQs were apparently regarded by AFMA as a major factor in reducing over-harvesting and excess capacity and its pursuit of ecological sustainable development, economic efficiency and cost-effective management objectives (see exhibit R1, T1 at pages 11 and 17, and T48 at page 459).
27. According to Mr Richardson’s witness statement, AFMA’s decision to move to ITQs in the SSF was largely prompted by the finalisation, in November 1996, of an updated stock assessment for school shark, which recommended, amongst other things, a catch reduction of about 35 per cent. Exhibit R1 includes a copy of an AFMA management paper dated September 1997, namely Fisheries Management Paper No. 8, entitled “Allocation of Fishing Concessions Where Management Arrangements Change”. The paper sets out AFMA’s policy and a procedural framework for the allocation of fishing concessions where a decision has been taken to change management arrangements in a fishery for which management arrangements are already in place and fishing concessions have been granted to eligible operators.
28. The paper also states that in making any management changes, AFMA will ensure that such changes are consistent with and support the pursuit of AFMA’s legislative objectives, and:
“any differential economic impacts of allocations on individual fishing concession holders are minimised unless there are reasons, justifiable with respect to AFMA’s legislative objectives, that dictate otherwise.” (exhibit R1, T1, page 5)
The paper also said that an independent Allocation Advisory Panel would be established to provide advice to the AFMA Board on the most appropriate allocation system within a defined fishery.
29. In accordance with the management paper, AFMA later appointed an independent advisory panel. Its chairman was a retired Federal Court judge, the Honourable K J Jenkinson, and the other members were a New Zealand fisher and an economist. The panel prepared a reported dated 15 July 1999 which recommended the allocation to individual operators of individual transferable quotas from a total allowable catch, with the quotas to be freely transferable. The report was prepared after the panel had invited and considered submissions from all interested persons. In addition, thirteen port meetings were held during September 1998 in Victoria, Tasmania and South Australia in order to provide information on the proposed changes and to obtain feedback on issues arising.
30. Under the panel’s recommendations, quota was to be allocated in accordance with each operator’s best three years of verified catch history during the period from 1 January 1994 to 31 December 1997. AFMA accepted the panel’s recommendations and proceeded to take steps to verify the claimed catch history of operators in the SSF. At its meeting in October 2000, the AFMA Board approved the introduction of the ITQ management regime from 1 January 2001.
Permanent Quota and Seasonal Quota
31. A further explanation of ITQs is contained in the witness statement of Rohan Stuart Wilson, who is the Senior Manager, Compliance Policy, of AFMA. He explained that ITQs are (and this has been the position since 2001) represented in two currencies, namely:
(a)quota units (which are also referred to as “permanent quota”), being the amount ordinarily constant between fishing seasons, which represents a fixed share of the total allowable catch for particular species in a given fishery; and
(b)seasonal kilograms (or “seasonal quota”), being an amount that varies between fishing seasons in accordance with variations in the total allowable catch between years, and which represented the actual amount of a species that a person is entitled to take in a given fishing season.
32. Mr Wilson explained that only seasonal kilograms are reflected in conditions on permits. The ratio between the quota units and seasonal kilograms is calculated by dividing the total number of quota units in a fishery for a given species into the actual total allowable catch for that species in that fishery for a given fishing season. In 2001, which was the first year of operation of the new ITQ management policy, quota units were the same as the seasonal kilograms referred to in the permits issued by AFMA.
33. Mr Wilson further explained that the AFMA quota register records two types of transactions, namely permanent transfers, being a permanent transfer of quota units between two parties, and seasonal transfers, being a transfer of a specified kilogram amount of uncaught quota for the duration of the current fishing season between two parties.
Offshore Constitutional Settlement Arrangements
34. Mr Richardson’s witness statement also narrates that in late 2000 and early 2001, the Commonwealth and the States of South Australia, Tasmania and Victoria signed offshore constitutional settlement agreements so that, on the introduction of quota management, the SSF would incorporate the coastal waters of those States, and the Commonwealth’s jurisdiction would also include State licence holders (like Mr Clark) who had previously had access to school and gummy shark under their State concessions. I will refer to permits issued after those arrangements had been entered into as “OCS permits”.
Structural Adjustment Assistance and the Surrender of Permits
35. Mr Richardson also explained that in June 1999 steps were initiated to develop a scheme to provide one-off structural adjustment assistance to holders of fishing permits for the SSF in order to help operators deal with the reduction in shark catches whilst increasing the economic efficiency of the Fishery. This enabled SSF operators who satisfied specified eligibility criteria and who surrendered their permits to receive financial assistance through the SSF Industry Development Program. Operators who surrendered their shark concessions received $8,000 per gill net and/or $25 per hook. They were also issued with class B permits which were administrative in nature, of limited duration and only entitled the holders to hold quota but not to fish their quota. Forty operators surrendered their permits under the scheme. Two of those operators were Mr and Mrs Figl and Mr Bailey, being the parties from whom the applicants purchased their first two allocations of units of quota (see paragraph 17(a) and (b) above).
Whole Package Policy
36. At a Board Meeting in December 2000, it was decided that class A permits and all associated quota could only be permanently transferred in 2001 as a whole package. This decision was referred to in a booklet dated January 2001 entitled “Southern Shark Fishery 2001 Management Arrangement”. The following extract appears on page 11 of this booklet:
“Is quota transferable?
Yes – but for 2001 the following restrictions apply:
(a)Upon approval by AFMA management of an application to transfer a class A permit and all associated quota as a package, that package will be able to be permanently transferred;
· the restriction on transfer to whole packages only (Permit and all associated quota) in 2001 is a precautionary measure to enable AFMA to conduct a complete re-allocation for the 2002 season if necessary. For example, if there is a successful Federal Court challenge to the quota allocation formula; …” (see exhibit R1, T5, page 119)
The Fischer Proceedings
37. Mr Richardson also recounts that in January 2001, AFMA received a letter from Horst Fischer (the applicant in the proceedings to which I have referred above) requesting a review of his shark quota allocation. A copy of the letter is attachment C to the witness statement. The letter was expressed to be written on behalf of a number of signatories whose details were attached. A delegate of AFMA reviewed the allocations, but her review did not result in any variation to the signatories’ shark quota allocations.
38. Later, in April 2001, Mr Fischer applied to this Tribunal for review of the decision by the delegate of AFMA. The hearing in the Tribunal commenced in February 2002, and its decision setting aside the reviewable decision on the grounds that the 2001 policy was flawed was handed down on 27 September 2002. The decision by the Federal Court dismissing the appeal from the Tribunal’s decision was delivered on 24 March 2003.
The 2004 Allocation Policy
39. Following that, in May 2003, the AFMA Board appointed the Southern Shark Independent Review Panel to review, reconsider and report to the AFMA Board on the allocation of school and gummy shark total allowable catches for the SSF. This panel was chaired by another retired Federal Court judge, the Honourable J S Lockart, and the other member was an economist. This panel also undertook extensive investigations and consultations with the industry. After considering the panel’s report, the AFMA Board, as mentioned above, adopted a new allocation policy to be effective from January 2004, with allocations to be made according to a formula based on a combination of the value of permits and the quantum of catch history based on the best three years of the same earlier four-year period of catch history. In the case of operators who held an OCS permit (that is, a permit issued as a result of the arrangements previously entered into by the Commonwealth and the States of South Australia, Tasmania and Victoria) the allocations formula remained the same as previously, that is, it was based solely on catch history.
The Applicants’ Actions and Their Concerns
40. I have referred above to the transactions entered into by Mr and Mrs Clark. In effect, as from the second quarter of 2001, they set about purchasing permits and quota so as to establish a shark fishing business in the SSF.
41. Mr Clark said in evidence that before each of the transactions in question he made enquiries of AFMA. He said that he spoke to Mr Wilson on many occasions, but also spoke to other AFMA officers. He tendered a list of telephone calls to AFMA covering the period from October 2000 to January 2003 (exhibit A7). This record had been prepared by his wife from telephone accounts. As far as he could recall, the calls from April 2001 and later related to enquiries in connection with his proposed acquisition of quota. According to this record, the number of calls to AFMA was 22 between April and July 2001, 24 between July and October 2001, 19 between October 2001 and January 2002, 99 between January 2002 and January 2003, and 134 between January 2003 and January 2004. The exhibit separately shows the dates and duration of certain calls “to Rohan” (a reference to the witness Rohan Stuart Wilson). Mr Clark acknowledged that this part of the record was based on the telephone number dialled as shown on his telephone accounts, and does not necessarily indicate that Mr Wilson was the person who answered the phone and to whom he spoke on each occasion. However, the total of the calls to his number was significant, and it is likely, and I find, that he spoke to Mr Wilson on many different occasions.
42. Mr Clark said that he was told by AFMA that under the then quota allocation policy, permit holders were issued with a specified number of units of quota, and that the catch which each operator could take of the various species would then be calculated according to the total allowable catch fixed for each year by AFMA, so that if the total allowable catch were to be reduced in future years, the permissible weight of catch which each permit holder could take would be reduced in proportion to the number of units they held.
43. In addition to being given general information about the way in which the allocation policy operated, Mr Clark said that he was told about the whole package transfer restriction policy, that is that it was not possible to transfer quota units or quota without also transferring the permit under which the quota had been allocated. However, he was also told that this policy against splitting quota from permits would not apply as from January 2002.
44. Mr Clark said that when he first enquired about the possibility of purchasing quota, AFMA told him that he may be able to purchase quota from operators who had participated in the buy back scheme, and who wished to sell the quota that they were holding. He then investigated the possible purchase of quota from such persons, and as a result entered into the first two transactions referred to in paragraph 17 above, namely the Figl and Bailey transactions. He said that he did not want to acquire permits as well as quota, because he did not need additional permits, and the acquisition of permits entailed an obligation to pay levies to AFMA. I note that the remaining purchases of quota (apart from the so called deed of trust transactions) did entail purchasing permits as well as quota, although as I have said above, Mr and Mrs Clark later transferred their initial permit to a third party.
45. Mr Clark said that when making enquires of AFMA he also checked in each case to see whether the person from whom he and/or Mrs Clark were proposing to purchase quota was registered with AFMA as the holder of the quota in question.
46. As I understand it, Mr and Mrs Clark’s primary concern is that whilst they always understood that their seasonal kilogram quota might vary from one year to another, they did not expect that the number of permanent quota units which they had acquired would be reduced without their consent. In his evidence and in various places in the documents he tendered, Mr Clark also said that he had not been warned by AFMA that the number of units that he was proposing to purchase might be reduced by AFMA at some future time. He further said that if he had understood that there could be a future reduction in the permanent units he was acquiring, he would not have proceeded with the purchases in question. In a number of instances he also said that he had been positively told by AFMA that the number of units would not be changed in the future, that is, that his “share of the pie” would not change. Mr Clark said in evidence that Mr Wilson made the latter positive statement to him prior to the Bailey transaction, and that he understood that AFMA had said the same thing to Mr Bailey. However, when pressed in cross-examination to provide details of such positive statements, Mr Clark did not give any convincing or specific account of any such statements. On the contrary, he said that there had been a failure to warn him of future reductions in units, rather than a positive statement from AFMA that this would not occur. I am not satisfied that any such positive statements were made to the applicants.
47. Mr Clark also referred to a letter from AFMA dated 21 December 2001 from AFMA to SSF permit holders regarding the then proposed 2002 management arrangements. This letter says in part:
“Shark Quota Transactions
Since the allocation of shark quota units, several adjustments to individual holdings have been made as a result of internal reviews and audits. These adjustments each have varying degrees of impact on the kilogram value assigned to the quota units for the fishery as a whole. These reviews and appeals are continuing in 2002. AFMA has no intention of altering the allocation of quota units assigned to your permit, however decisions resulting from appeals and reviews may impact on your 2002 and 2003 allocation, irrespective of the TAC processes. Such decisions may either increase or decrease the kilogram value of your quota units.
I would like to alert you to this situation and ask that, if you arrange quota transactions with another person you should be aware that the kilogram value of your quota unit holdings may be affected up or down as a result of future reviews/appeals.
Further, there is currently an appeal against the basis of allocation process and until this is resolved AFMA will only approve permanent transfers of entire shark quota holdings and permits as one package.” (see exhibit R1, T6, page 122)
48. Mr Clark said that he understood from that letter also that there would be no future alteration in the allocation of permanent quota units, and it was simply the seasonal kilogram quota that might be affected in the future.
49. In the course of his evidence and submissions, Mr Clark also asserted that:
(a)AFMA should have taken into account that he and his wife had borrowed the funds necessary to purchase permanent quota units, and the reduction in units in 2004 accordingly had a more significant financial effect on their business operations than was the case with other operators who had pre-existing quota entitlements;
(b)they only went ahead with the purchase of quota from other persons with AFMA’s approval;
(c)AFMA should have advised him in 2001, when he was inquiring about purchasing quota, to purchase quota from persons who had held permits to fish in State coastal waters (and the relevance of this submission is that, as mentioned above, the permanent unit allocation of OCS permits was unaffected by the 2004 allocation policy);
(d)AFMA should have included a specific warning on the forms used to request registration of the transfer of quota to the effect that permanent quota units might be subject to variation in future years;
(e)AFMA should have permitted the splitting of quota from permits after the 2001 season, in accordance with the statements made to him by AFMA when he was investigating the purchase of quota in 2001;
(f)the applicants should be compensated for their loss of quota entitlement, not by being paid monetary compensation, but by reinstating the units that had been taken from them in the 2004 permits; and
(g)Mr Clark made further contentions and made further assertions in written submissions dated 13, 28 and 30 June 2006, which I have also taken into account.
50. In furtherance of his argument in paragraph 49(a), Mr Clark complains that in effect, the units the applicants have purchased have been handed over to someone else, and that they have been left with an obligation to pay off the units that they had purchased and expected to keep. He added that the viability of the applicants’ shark fishing business has suffered an approximately 35 per cent reduction in kilograms of quota, and this has had a huge adverse affect on the applicants’ ability to repay loans obtained to purchase quota. He had not expected such a large reduction in seasonal quota.
51. Mr Clark further gave evidence that officers of AFMA, including Mr Richardson, told him in effect that AFMA’s intention to permit the transfer of quota separate from the relevant permit had not been implemented because of legal appeals, but that AFMA had received the best legal advice and was confident that the appeals would not change anything. Mr Clark further said that he was not able to use his net permit because it was attached to a cray boat, and permits were frozen and had to stay as a package (see Statement of Reasons, exhibit A3, page (3)).
52. Mr Clark also asserted in the Statement of Reasons (exhibit A3) that in relation to the Shea transaction, AFMA had advised him that the permit could stand alone and be transferred, but it later transpired that a Tasmanian State scale licence had to be obtained. He claimed that as a result, the transfer of unit holding was delayed by some twelve months and he had to pay a further $25,000 approximately for a licence that he did not want and could not use (see Statement of Reasons, exhibit A3, page (4). However, this transaction resulted in an increased allocation of 628 kg of gummy shark under the 2004 policy, and a loss of only 85 kg of school shark. Accordingly, the 2004 policy did not cause an injustice to Mr Clark insofar as the Shea transaction is concerned. Further, as mentioned above, the applicants are not claiming compensation for any losses arising from any delay in registering the transfer, and in any event I have no jurisdiction to determine whether they have any entitlement to any compensation.
53. In his Statement of Reasons and other documents he tendered, Mr Clark also makes certain pejorative remarks regarding AFMA and in particular its lawyers. I do not consider it necessary or appropriate to address those statements.
legislation
54. AFMA was established under the Fisheries Administration Act 1991 (Cth) and has various functions enumerated in s 7 of that Act. These include devising management regimes in relation to Australian fisheries and devising fisheries adjustment programs and fisheries restructuring programs.
55. By s 95 of the Fisheries Management Act 1991 (Cth) (the “Management Act”) commercial fishing in the Australian Fishing Zone (“AFZ”) is prohibited unless (relevantly) the person engaging in that activity is or is acting on behalf of, the holder of a fishing permit authorising commercial fishing at that place. Section 32 provides for the grant of fishing permits. Under subsection 32(5), a fishing permit is granted subject to certain statutory conditions set out in that subsection, and under s 32(6)(a) is subject to such other conditions as are specified in the permit or prescribed. Under subsection 32(7) the conditions that may be specified in a permit include conditions relating to the fish that may be taken, or the quantity of fish that may be taken. Subsection 32(10) provides:
“Except where a fishing permit is stated to be non-transferable, AFMA may, on the application of the holder of the permit and of another person as proposed transferee, transfer the permit to that other person.”
It is an offence under s 95(1)(d) for the holder of a fishing permit to contravene a condition to which the permit is subject.
56. Provision is made in s 165 of the Management Act for a person affected by a relevant decision who is dissatisfied with the decision to request AFMA to reconsider the decision, and for an application to be made to this Tribunal for review of the resulting reviewable decision.
57. Subsection 3(1) provides that AFMA must pursue the following objectives in the performance of its functions:
“(a)implementing efficient and cost-effective fisheries management on behalf of the Commonwealth; and
(b)ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle, in particular the need to have regard to the impact of fishing activities on non-target species and the long term sustainability of the marine environment; and
(c) maximising economic efficiency in the exploitation of fisheries resources; and
(d)ensuring accountability to the fishing industry and to the Australian community in AFMA’s management of fisheries resources; and
(e)achieving government targets in relation to the recovery of the costs of AFMA.”
58. Under subsection 3(2) AFMA must have regard, in addition to the objectives in subsection 3(1), to certain further objectives, including ensuring, through proper conservation and management measures, that the living resources of the AFZ are not endangered by over-exploitation, and achieving the optimum utilisation of the living resources of the AFZ.
Consideration
59. The 2004 allocation policy was adopted in order to redress the flaw in the 2001 management policy that had been identified in the earlier proceedings in this Tribunal and in the Federal Court. Nevertheless, a group of operators, including Mr Fischer, did not accept the correctness of the 2004 policy, and sought a review of the allocation they had received under the 2004 policy. In Re Fischerand Australian Fisheries Management Authority (2005) 89 ALD 324, President Garry Downes J affirmed the allocation decisions. In doing so, his Honour rejected various criticisms of the 2004 quota allocation policy, and said, at [75], that the policy yielded the most reasonable and preferable apportionment of the total allowable catch.
60. There is no provision in the Management Act that makes it obligatory for the Tribunal to apply an allocation policy determined by AFMA. However, the Tribunal should ordinarily apply the policy in making discretionary decisions, unless the policy is unlawful or unless the particular circumstances of the applicant are such that the application of the policy would lead to an unjust result: Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 645. In that case Brennan J, as he then was, said at 645:
“If it were shown that the application of ministerial policy would work an injustice in a particular case, a cogent reason would be shown, for consistency is not preferable to justice. Injustice, in the context of ss 12 and 13 of the Migration Act, must mean a disproportion between the detriment suffered by those affected by the execution of a deportation order and the benefit which might reasonably be expected to result to the community at large or to particular individuals in the community if the order were affirmed.”
61. In Skoljarev v Australian Fisheries Management Authority (1995) 39 ALD 517 Davies J referred to the application of the above passage from Drake in a matter involving an appeal from the review of a decision made by reference to a fisheries policy. His Honour said (at 523) that it was relevant that the management plans for fisheries had tended to be plans arrived at after considerable consultation and often with the approval of a body representing fishermen in the fishery. He quoted with approval, at 523, an extract from an earlier Tribunal decision in which he was the presiding member. This extract said in effect that in contrast to the operation of the sections in the Migration Act to which Brennan J had referred in Drake in the passage I have quoted above, the achievement of the end sought by the fisheries policy in question required the taking of decisions pursuant to broad and relatively binding rules rather than the assessment of each particular case. The relevant extract then concluded:
“That is not to say, however, that no room was left for the exercise of discretion or judgment should special or unique circumstances arise for consideration.”
Davies J pointed out, at 523, that “(n)ecessarily, each matter must be judged by weighing up the particular circumstances of the case in the light of the part which the policy plays in the overall context of the decision to be made.”
62. The likelihood that there will be an impact on individual operators arising from the adoption by an authority of a new management policy intended to give effect to the public interest has also been referred to in other cases. In PW Adams Pty Ltd v Australian Fisheries Management Authority (1998) 49 ALD 68 at 76-77, Branson J said, after referring to the statutory objectives of AFMA:
“Plainly, there is a difference between ‘maximising economic efficiency in the exploitation of fisheries resources’ and maximising the economic efficiency of individual participants in the fishing industry. The objectives of AFMA are objectives intended to be pursued in the public interest; they are not intended to require AFMA to pursue, assuming that it would be possible for it to do so, the separate interests of individual participants in the fishing industry. Of course, in many circumstances, the respective interests of individual participants in the fishing industry and the public interests which AFMA is required by its objectives to pursue in the performance of its functions will be consistent. In some circumstances they will not be consistent.”
63. In Fischer (No.2) (supra) Downes J recognised, at [46], that there would be some differential impact on the economic position of operators when the 2004 policy was introduced, and said that this was consistent with Fisheries Management Paper No. 8, to which I referred in paragraph 27 above. His Honour found that the policy was valid, notwithstanding this differential impact.
Applicants’ circumstances compared with all other operators
64. In considering whether the applicants’ circumstances are special or unique, or such that the application of the 2004 policy has led to an unjust result, I will first compare the effect of that policy on the applicants’ permits with its effect on the allocation of quota to the permits of all other operators in the Gillnet and Trap Fishery. This can be seen from the graphs contained in exhibits R6 and R9. These show that whilst the 2004 allocation policy had a comparatively small positive effect on a majority of the permits compared with the 2003 allocations, there were also a significant number of permits where the holders received a reduced allocation. Such variations arose because the allocation of units to permits with little or no catch history resulted in an increased allocation under the 2004 policy, whereas permits with a very significant catch history, having received a large allocation of quota under the 2001 policy, suffered a relatively greater reduction in quota under the 2004 policy, as that policy was not based solely on catch history. In the case of some permits, the number of units allocated in 2004 was very substantially reduced. Class B permits (being permits that had been surrendered pursuant to the structural assistance programme referred to in paragraph 35 above) suffered a reduction in quota in every case, because no value was attributed to those permits as such.
65. Exhibits R6 and R9 do not indicate how the permits shown on the graphs were disposed as between operators, and there is no other evidence before me as to the overall impact on the total units held by particular operators in the fishery. However, the overall negative impact on the applicants (being a reduction of 411 units of gummy shark and 656 units of school shark) was of a reasonably low order compared with the very substantial negative impact on the quota attached to many other permits. The combined reductions of quota of the two species of shark amounted to a total net reduction of about 3.9 per cent of the total number of units acquired, namely 27,280 units of gummy and school shark.
Applicants’ circumstances with other operators who acquired quota
66. I next consider the applicants’ position compared with that of other operators who (like the applicants) acquired units (that is, permanent quota) in the period from 2001 to 2003. In doing so, I will assume that under the 2001 policy AFMA would have continued to allocate the same number of units to permits when they were renewed, and that permits would continue to be renewable on that basis. However, I note that the Management Act does not provide for permanent quota or quota units, and as pointed out in Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3, permits are issued on an annual basis, and the Act does not provide for the automatic renewal of permits. Nevertheless, the allocation of individual transferable quota, and the ability to transfer quota, was a fundamental tenet of AFMA’s 2001 management policy (as well as its 2004 policy). Further, the application form issued by AFMA for transferring quota referred to “permanent” quota, as well as to seasonal quota, and thus contemplated that there could be transfers of permanent quota which would be recognised when permits were renewed.
67. Exhibits R8(a), R9, and attachment RSW 2 to exhibit R11 (being the affidavit of Mr Wilson sworn on 24 May 2006) provide information as to the effect of the change from 2003 to 2004 on the quota entitlement of transferees of quota. On the final day of the hearing I sought clarification of attachment RSW 2 to exhibit R11. As a result, the respondent lodged a further affidavit by Mr Wilson, being exhibit R12. This refers to further tables marked RSW 5 and RSW 6. These further tables supplement the information in attachment RSW 2. The tables show details of the acquisitions of quota from operators who had previously held school and gummy shark quota attached as conditions to OCS permits.
68. As mentioned above, Mr Clark was concerned that he was not advised to purchase OCS permits (which were not affected by the introduction of the 2004 policy) as opposed to other Commonwealth permits. However, the decision to treat State permits in that way was not made until late in 2003, when the AFMA Board resolved to approve the revised allocation policy recommended by the Lockhart panel. Further, an analysis of RSW 5 shows that there were 70 operators who acquired units of quota between 2001 and 2003. Only 17 of these operators acquired OCS permits. Generally, the amount of quota attached to those permits was less than the amount of quota attached to the remaining permits listed in RSW 5, being permits in respect of Commonwealth waters. Further, the total quota transferred from OCS permits was substantially less than the total quota transferred from the permits in respect of Commonwealth waters. Even if the quota attached to the OCS permits had been adjusted in accordance with the 2004 management policy it appears that the position of the applicants (and other persons who had acquired quota attached to permits in respect of Commonwealth waters during the above period) would not have been significantly different from the quota allocated to them in 2004.
69. The information in RSW 5 enables a comparison to be made between the position of the applicants and other operators who acquired quota during the relevant period. I note that in his recent submissions, Mr Clark queried the correctness of certain entries in RSW 5. However, I am satisfied that it shows the overall effect of the 2004 policy on the unit entitlements that transferee operators acquired. It shows that, like the applicants (if their very modest 2001 allocation in 2001 of 336 kg of gummy shark is disregarded), nearly all of the operators who acquired quota between 2001 and 2004 did not have existing quota. The table further shows that while some transfers of permits resulted in an increase in quota (which in most cases was reasonably modest), other transfers resulted in a decrease, and in some cases a very significant decrease, in quota. Once again, this analysis does not indicate that the applicants’ circumstances are special or unique, or that the application of the 2004 policy has led to an unjust result in their case.
70. On the final day of the hearing, after the close of evidence, Mr Clark requested the opportunity to lead evidence from one operator who he thought was the operator described as Client 33 on attachment RSW2 to exhibit R11. He indicated that the effect of the evidence he expected to obtain was that the contracts entered into by that operator included provision for an adjustment to the purchase price of the quota acquired if AFMA subsequently reduced the quota entitlement of the permits acquired; and he contended that as a result, the applicants were disadvantaged relative to that operator because they suffered a reduction in quota as a result of the 2004 policy, but could not obtain any adjustment to the price they had paid for their quota. I refused to allow this evidence to be led, partly because the application was made so late in the proceedings, but also because the evidence related to the position of only one of the 48 “clients” listed in attachment RSW 2. In addition, the fact that some persons may have negotiated special conditions when acquiring quota (perhaps entailing a higher purchase price than might otherwise have applied) was a matter between the relevant contracting parties. If the applicants had obtained legal advice before entering into the contracts, they too might have included an adjustment of price clause in their contracts. However, any comparative disadvantage to the applicants was the result of the terms of the contracts they entered into, rather than any flaw in the 2004 policy, or any unjust effect of that policy on the applicants.
Other matters relevant to the applicants’ position
71. AFMA contended that it had warned the applicants about the possibility of further changes in allocation policy, that they should have been aware of the risks involved in acquiring quota, and that their actions amounted to speculation. I do not accept these contentions.
72. Counsel for AFMA, Ms Mortimer SC, first referred to a booklet issued by AFMA in January 2001, and in particular to the extract on page 11 of the booklet which I set out in paragraph 35 above. In cross-examination Mr Clark admitted that he had read the booklet, and that he had been told by AFMA that the reason why quota was not transferable independently of a permit was to provide for the possibility of a reallocation being needed in 2002. Mr Clark was not pressed, however, on whether he understood that the statement in the booklet extended to possible variations in the manner of allocating permanent quota, as opposed to seasonal quota. It is not clear whether he read the booklet before or after the applicants decided to purchase quota, but it is likely that they placed more reliance on Mr Clark’s subsequent discussions with AFMA, to which I refer below. Further, the relevant extract was only one of a large number of matters referred to in the booklet. At my request, a full copy of the booklet was produced and is exhibit R10.
73. Ms Mortimer also directed Mr Clark’s attention to various clauses in the contracts annexed to the Statement of Reasons to the effect that the parties’ position would not be affected by subsequent adjustments to units, and that the applicants would indemnify the vendors of quota, and the brokers involved, for any future variations, conditions or restrictions which may be imposed on quota. Mr Clark admitted in cross-examination that he understood from those clauses that he would have no come back on the vendors or agents, and that he had not sought legal advice before entering into the contracts. However, he said that he regarded the clauses as standard clauses designed to protect the brokers, and said he was not unduly concerned about the clauses; he also said that he had made enquiries of AFMA before entering into the contracts, and as a result did not understand that there was any risk that there would be a future change in the allocation of permanent quota. I accept Mr Clark’s evidence. I find that having regard to his prior enquiries of AFMA, Mr Clark did not anticipate from the above clauses that AFMA would reduce permanent quota in future years.
74. I accept Mr Clark’s evidence that he made extensive telephone inquiries of AFMA in connection with his purchases of quota. I also accept that at least during 2001 and probably until the last of the acquisition transactions, Mr Clark was not aware of the risk that the allocation of units (as opposed to seasonal kilograms) resulting from the purchases of quota would be reduced. I note that Mr Wilson, whose evidence I accept without question, acknowledged that it was likely that AFMA officers, when explaining the 2001 management policy to operators, explained the relevance of units, and how they would be used to determine seasonal quota in future years, when the total allowable catch would be adjusted. This is exemplified by the contents of a letter dated 12 May 2005 to AFMA from Mr Bailey (a copy of which is attached to the applicants’ Statement of Reasons, exhibit A3). In that letter Mr Bailey says that he was not made aware that the permanent quota attached to his permit would be taken from the applicants at a future time. I find that Mr Clark, when making enquiries about purchasing quota prior to entering into the various transactions, was not told that there was a risk that permanent quota might vary in future years.
75. The above finding is, I think, reinforced by the fact that the Application to Transfer of Quota form issued by AFMA did not include any warning about possible reductions in permanent quota until AFMA introduced a new form in 2003, which had been revised in light of the decision in Fischer (see paragraph 39 of Mr Wilson’s witness statement, exhibit R3). The application forms previously used, as well as the revised form, contained provision to include the number of units of permanent quota, and the number of kilograms of seasonal quota which were the subject of the applications, and included the following note:
“Permanent quota transferred will be converted to seasonal quota effective at the start of the NEXT season. Transfer amount must be shown in units.
Seasonal quota transferred will be available to the transferee effective immediately until the end of the CURRENT season. Amount must be shown as weight in kilograms.
Please refer to an up-to-date Quota Transactions Statement for your current permanent and seasonal quota position.”
The revised application form used in 2003 contained for the first time an explicit warning to the effect that the allocation of shark quota would be reviewed by AFMA in the future, and that quota holdings might be either increased or decreased as a result.
76. AFMA also referred to a warning contained on the Application to Transfer permit forms. However, the warning on these forms did not expressly refer to any possible change in the basis of the allocation of unit entitlements, and was not of course contained on the form relating to the transfer of quota. The warning was to seek advice on any management arrangements, existing or proposed, that could affect the “use” of the permit. The warning was therefore in the most general terms. The fact that it was not included on the application forms to transfer units might reasonably suggest that the warning did not relate to possible changes in future allocations of units. In any event, a warning on the form for the transfer of permits would not always have been appropriate, because in many cases, the parties would have already entered into the relevant contract to acquire the permit in question before they had signed the application form to transfer the permit.
77. Mr Wilson’s witness statement also refers to the letter from AFMA dated 21 December 2001 to SSF permit holders, and in particular to the extract from that letter that is set out in paragraph 47 above. However, I think that this extract can reasonably be interpreted in the way that Mr Clark interpreted it, namely that it confirms that it is only the kilogram value (or seasonal value) of quota that might be varied up or down as a result of future reviews or appeals; there is no suggestion that quota units would vary. The reference in the third paragraph of the extract does refer to an appeal against the basis of allocation process, but an operator reading that paragraph might reasonably understand that it was only the whole package transfer policy that might be affected by the then current appeals, and that that paragraph was not referring to the quota.
78. A statement in similar terms to the extract referred to in paragraph 47 above was included in a letter dated 19 December 2002 sent to permit holders the following year (see attachment H to exhibit R3). The third paragraph of the relevant section of that letter differed slightly from the letter of 21 December 2001, but I do not think that the slight variation would alert operators to the risk of future changes to the allocation of quota units, as opposed to seasonal quota.
79. The applicants are also concerned that they acquired their quota using borrowed funds, and the reduction in quota units has adversely affected the viability of their shark fishing business. However, there is no evidence before me as to whether other operators had borrowed funds to purchase quota. Even if they did not, those operators who had their quota reduced in 2004 might well have been disadvantaged; the funds that they used could presumably have been put into other investments, and those other investments might have achieved a better return than that available from the purchased quota.
80. Mr Clark also referred to the failure by AFMA to permit the splitting of quota from permits as from January 2002. I assume that this meant that the applicants were not able to take full advantage of the two further transactions referred to in paragraph 19 above. However, those transactions were entered into by the applicants in breach of AFMA’s policy for whole package transfers; further, the McLean transactions was reversed, and Mr Clark said that he is not making any claim in respect of the other transactions.
81. The 2004 policy has disadvantaged the applicants because the permits they acquired included two Class B permits, and that policy resulted in a reduction in the unit entitlement of those two permits. However, this was also the position that many other operators found themselves in, as a result of AFMA taking steps to correct, as from 2004, the flaw in the 2001 management policy.
82. For all of the reasons to which I have referred above, I am not satisfied that the application of the 2004 policy has led to an unjust result in the applicants’ case because there are special circumstances applicable to them, or because there are cogent reasons which justify a departure from the policy in their case.
Is AFMA estopped from reducing the applicants’ 2003 permanent quota?
83. I refer to my finding in paragraph 46 above that I am not satisfied that any positive statements were made by AFMA to the effect that the permanent quota issued to the applicants on the permits they were about to acquire would not be reduced in future years. In view of this, I further find that AFMA was not estopped from reducing the permanent quota attached to the units in 2004 or in subsequent years. In any event, even if a positive statement or promise had been made by AFMA, AFMA could not be estopped from exercising its relevant discretions under the Management Act : Brickworks Lt v Warringah Shire Council (1963) 108 CLR 568.
84. Mr Clark did not suggest that AFMA was made aware, in the course of the various enquiries he made before entering into transactions, of the terms of the contracts which the applicants were proposing to enter into, or of the price which they were proposing to pay for the quota in question. Whilst AFMA registered transfers of quota, and permitted the transfer of quota as contemplated by subsection 32(1) of the Management Act, I find that AFMA did not approve the proposed transactions in the sense of endorsing the commercial wisdom of the transactions, and that AFMA did not engage in any conduct which would otherwise estop AFMA from reducing permanent quota when renewing permits, or from otherwise exercising its statutory discretions.
Validity of the 2004 allocation policy
85. As mentioned above, Mr Clark acknowledged that he is not challenging the validity of the 2004 allocation policy. Further, as also mentioned above, Downes J found in Fischer No. 2 that the 2004 policy was valid. However, his Honour did not consider its effect on operators who had purchased quota between 2001 and 2003, and operators in this category were potentially disadvantaged by the absence of a clear warning that permanent quota might be reduced in the future by reason of the challenges to the 2001 management policy. The extent to which this Tribunal should exercise its inquisitorial function might perhaps have been affected by the recent inclusion of s 2A of the Administrative Appeals Tribunal Act 1975 (Cth), which requires the Tribunal to pursue certain objectives, including providing a mechanism of review that is “quick”. It is of course, correct, as Ms Mortimer pointed out, that the validity of the 2004 policy was not called into question at the hearing, but Mr Clark’s recent submissions represented a departure from the position he adopted at the outset of the hearing. Further, where an applicant is unrepresented and the evidence raises an issue of concern to the Tribunal, I think that there is potentially greater scope for the inquisitorial function to arise. I have therefore also considered whether my concern about the potential adequacy of the warning given to purchasers of quota would have the effect of causing the 2004 policy to be invalid. I have concluded that this is not the case.
86. On my analysis of the evidence before me, as explained above, the overall effect on operators in this category did not differ materially from the varied effect of the 2004 policy on other operators who did not acquire quota. Further, there is no evidence before me as to the state of knowledge or the expectations of the other operators who acquired quota between 2001 and 2004, or that the 2004 policy was based on a flawed assumption, as was the position in the first Fischer case.
87. It can be seen that the effect of the 2004 policy affected different operators who acquired quota somewhat haphazardly, and varied according to the type of permits they acquired, and the varying effect on those permits of the 2004 policy. However, if the quota attached to the transferred permits had been left unaltered, the adjustment entailed in the 2004 policy (which was needed in order to rectify the flaw in the 2001 policy) would have been borne wholly by those operators who had not transferred quota; this would have led to even greater variations to the quota of those operators, and would have further upset the relativities between all operators.
88. In any event, I think that this Tribunal should not, except in a clear case, decide to set aside a management policy such as the 2004 allocation policy. The policy was designed to take into account important public interests, and was formulated by appropriately qualified people after extensive consultation with persons who were likely to be affected by the changes to be introduced. In Drake (supra) Brennan J referred to the assistance afforded to decision-makers by policy statements, as well as to other benefits such statements provide. The need for caution in considering the possible setting aside of the 2004 allocation policy is even more apparent in the present case because of the protracted period involved in introducing management changes from input control to output control, the period of uncertainty arising from the first Fischer proceedings, and the desirability of avoiding continuing future uncertainty. There is no basis for Mr Clark’s recent written submission that a fairer policy would have been to allocate quota from larger holders to smaller holders.
Summary and Conclusion
89. For the above reasons, I conclude that the 2004 allocation policy is not unlawful, that the particular circumstances of the applicants are not special, and that while the 2004 allocation policy has had a varying impact on different operators, the applicants‘ relative position is such that the policy has not produced an injustice in their case.
90. My above conclusions make it unnecessary for me to consider the appropriateness or otherwise of the parties’ agreement as to the basis of adjusting the applicants’ quota if the applications before me had been successful, or the alternative proposal referred to in Mr Clark’s submission of 13 June 2006, to which I referred in paragraph 23 above.
Decision
91. The Tribunal affirms the decisions under review.
I certify that the 91 preceding paragraphs are a true
copy of the reasons for the decision herein
of Deputy President D G JarvisSigned: .....................................................................................
B. Bills AssistantDate/s of Hearing 20 and 21 April 2006 and 6 June 2006
Date of Decision 5 July 2006Date of receipt of final
submissions 30 June 2006Counsel for the Applicants In person
Solicitor for the Applicants -
Counsel for the Respondent Ms S Mortimer SC
Solicitors for the Respondent Dibbs Abbott Stillman
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