Cyno Pty Ltd and Australian Fisheries Management Authority and or S
[2004] AATA 203
•27 February 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 203
ADMINISTRATIVE APPEALS TRIBUNAL )
) No T2001/98
GENERAL ADMINISTRATIVE DIVISION ) Re CYNO PTY LTD Applicant
And
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent
And
OCEAN FRESH FISHERIES PTY LTD
And
NEVILLE PETER ROCKLIFF and HELEN MARY ROCKLIFF
Parties Joined
DECISION
Tribunal Mr J Handley, Senior Member
Associate Professor B Davis, Member
Date27 February 2004
PlaceHobart
Decision The decision under review is affirmed. (Sgd) J Handley
Senior Member
FISHERIES – application by three fishing companies for two permits – exploratory fishery – applicant not issued with permit – had previously been issued with scientific permit – management plans altered – whether applicant had any legitimate expectation – whether any accrued rights – review of selection criteria and ranking procedure – former director of applicant has convictions for fisheries offences – whether association between the director and applicant relevant in consideration of “demonstrated record of responsible and co-operative fishing – decision affirmed
Fisheries Management Act 1991(Cth) s 3, s 4 and s 165
Acts Interpretation Act 1901 (Cth) s 50
Re Everfresh Seafoods Pty Ltd and Australian Fisheries Management Authority; Kailis and France Foods Pty Ltd, Austral Fisheries Pty Ltd (Parties Joined) (2000) 58 ALD 581
Brinkman v Dix (No 2) [1999] TASSC 65
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Rokobatini v the Minister for Immigration and Multicultural Affairs (1999) 90 FCR 583
Attorney General v Quin 170 CLR 1
Council of Civil Service Unions v Minister for the Civil Service (1985) AC
Kioa v. West (1985) 159 CLR 550
Re Vaitaiki v Minister For Immigration and Ethnic Affairs (AAT No. 10526, 14 November 1995)
Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR at 648
Minister for Immigration and Ethnic Affairs v Teoh 128 ALR 353
Re Latitude Fisheries Pty Ltd and Anor and Australian Fisheries Management Authority [2000] AATA 1025
Puglisi v Australian Fisheries Management Authority [1996] NG 048 of 1996 FED No. 618/96
Attorney-General of Hong Kong v NG Uyenu Shiu (1983) 2 AC 629
Council of Civil Service Unions v Minister for Civil Service (1985) AC 374
FAI Insurances Ltd v Winneke (1982) 151 CLR 342
Azevedo v Secretary Department of Primary Industries and Energy (1992) 26 ALD 567
Re Everfresh Seafoods Pty Ltd and Australian Fisheries Management Authority; Kailis and France Foods Pty Ltd; Austral Fisheries Pty Ltd (Parties Joined) (2000) 58 ALD 581
Jetopay Pty Ltd v Dix (1994) 76 A CRIM R 427
Australian Broadcasting Tribunal v Bond and Others (1990) 179 CLR 321
Jones v Dunkel (1959) 101 CLR 298
Western Television Ltd v Australian Broadcasting Tribunal (1986) 12 FCR 414
New Broadcasting Ltd v Australian Broadcasting Tribunal (1987) 73 ALR 420
REASONS FOR DECISION
27 February 2004 Mr J Handley, Senior Member Associate Professor B Davis, Member 1. The applicant applies to review a decision made by the Australian Fisheries Management Authority (“AFMA”) on 15 May 2001 under s 165 of the Fisheries Management Act 1991 (“the Act”). The decision of 15 May 2001 affirmed a primary decision made on 19 September 2000.
2. In its primary decision, AFMA decided to grant the applicant, (“Cyno”) a fishing permit to undertake demersal line fishing in the Norfolk Island Offshore Demersal Finfish Fishery (“the Fishery”) during an exploratory program. Additionally, AFMA decided not to grant Cyno a fishing permit to undertake trawling in the Fishery during the exploratory program. This review seeks to challenge the decision in so far as it was decided not to grant a trawl permit.
3. A review of this decision was heard in Hobart between 15 and 17 October 2003. Mr Clelland of Counsel appeared on behalf of Cyno. Mr Bowen appeared on behalf of AFMA. Mr De Francesco appeared on behalf of the party joined, Ocean Fresh Fisheries Pty Ltd (“Ocean Fresh”) and Mr Davis appeared on behalf of Mr and Mrs Rockliff – (Petuna Pty Ltd “Petuna”). A number of documents were received into evidence and will be referred to in these reasons. Additionally, we considered numerous documents lodged by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”).
4. Orders were made pursuant to s 35 of the AAT Act on 2 October 2002 and 28 November 2003 restricting disclosure – therefore publication – of certain parts of the documents lodged by the respondent pursuant to s 37 of the AAT Act. The documents, relevantly, were lodged by the applicant and the parties joined. The only reference in this decision to these documents is found at paragraphs 91 and 155. Accordingly, there will be two published versions of this decision, namely –
(i)a version that will be available to Tribunal staff, and officers and the legal representatives of the parties, consistent with the Order of 2 October 2002 and
(ii)an edited version, available to all other persons, where parts of paragraphs 91 and 155 will be – and will appear to be – deleted.
5. The background of the application may be briefly summarised as follows.
6. On 19 June 1998 Norman Brinkman, who was then a director of Cyno, made application to AFMA for a Scientific Permit for the fishing vessel “Saxon Onward” to fish Wanganella Bank, south of Norfolk Island. When the application was acknowledged by the manager of the Antarctic and Developmental Fisheries division of AFMA, Mr Brinkman was notified that if a Scientific Permit was granted “it would only provide access for the period of the Scientific Permit and there would be no guarantee that a fishing permit or any other form on access would be provided at the conclusion of this period. The maximum period for which a Scientific Permit can be granted is six months” (Exhibit 1).
7. On 21 December 1998 AFMA agreed to issue a Scientific Permit to Mr Brinkman, subject to his agreement to comply with certain management arrangements. The Scientific Permit was valid for a period of six months from the date of issue and was not transferable. AFMA again notified Mr Brinkman that “no guarantees of continued access to the Fishery after the expiry date of the Scientific Permit” would be made. He was also notified that the Fishery is likely to close for a period in excess of three months at the exploration of the Scientific Permit “while future management arrangements are developed. Any new arrangements will be developed under the provision of AFMA’s policy on the exploration of new fisheries at that time” (Exhibit 1).
8. Mr Brinkman eventually completed the Scientific Permit to fish and reported to AFMA.
9. In May 1999 AFMA issued a Fisheries Management Paper No. 5 (“FMP 5”) entitled “Exploration of Fish Resources”. FMP 5 recorded that it superseded and replaced AFMA’s Fisheries Policy Paper No. 4 (“FMP 4”) which was entitled “Exploration and Development of a New Fishery”.
10. FMP 5 comprises 35 pages and describes its purpose as:
. . . a policy and procedural framework for the controlled exploration of Commonwealth fish resources in circumstances where research or anecdotal information suggests that a fish resource may exist but the extent of abundance of the resource is unknown or uncertain, and consequently an appropriate level of harvesting, is not currently specified by AFMA for that particular resource (T4 p29).
The Paper specifically concerns exploratory fishing programs “in relation to a potential new resource” and it records AFMA’s approach to exploratory fishing, the process to be followed by fishermen who wish to undertake exploratory fishing, factors to be taken into account, the process to be followed by AFMA when considering applications for exploratory fishing programs and the development of management arrangements for ongoing fisheries identified through those programs.
11. “Exploratory Fishing” is described at paragraph 4.1 of FMP 5 as:
[A] data gathering phase, with the activities of fishers providing information (on target and non-target species) that can be used by AFMA to determine what level, if any, of sustained harvesting the resource and its associated environment can support in the longer term. An important aspect of this process is the collection of data that will allow an assessment to be made of the likely environmental impact of fishing in keeping with the precautionary approach (p31).
12. At paragraph 6.3.2 of FMP 5 under the sub-heading of “AFMA–Initiated Exploratory Fishing” it is recorded that if multiple applications are received for an exploratory fishing program it will be unlikely that all applicants will be successful in gaining access because either a fishing permit has been granted to an applicant before subsequent applications were received and no further participants are required for the program, or an Exploratory Management Report (“EMR”) specifies that an exploratory fishing program with a limited number of participants can be sustained but the applicants have not been ranked highly enough to gain entry, or applicants have not met selection criteria or the requirements of the EMR (p34).
13. In May 2000 AFMA issued an EMR entitled “Norfolk Island Offshore Demersal Finfish Fishery”. The EMR records that it was prepared “under the direction of Fisheries Management Paper No. 5 (FMP 5)” and that the EMR “should be read in conjunction with FMP 5”. The EMR also records that it was initiated by AFMA “following numerous requests to undertake both trawling and demersal line fishing off Norfolk Island” (T5 p56).
14. The report records that between January and May 1999, Cyno “undertook demersal trawling on the Wanganella Bank and adjacent mounts under a Scientific Permit issued by AFMA”.. The report records a summary of the data apparently collected and provided to AFMA (by Cyno) with respect to the species of fish identified and targeted, the catch yielded by trawl and dropline methods and an observation as to commercial viability.
15. AFMA proposed by the EMR that two fishing permits to fish by demersal and mid-water trawl, and five fishing permits to fish by demersal line would be issued. AFMA reported that the issue of seven permits was regarded:
.. . . as an appropriate way of managing the initial stages of the fishery, including gaining information about the longer term viability of the exploitation of mid-water and demersal resources of the area. As the main research requirements for the fishery are the collection of scientific samples, collection of resource abundance indicators and assessment of environmental impacts, AFMA considers that this can be achieved by seven Fishing Permits covering both trawl and line fishing methods meeting their performance requirements (p59).
16. Greater line fishing permits than trawl fishing permits were offered because there had not been a history of line surveys in the area of a fishery, boats in the line fishery were likely to be smaller in size and capacity than trawl boats and would probably undertake trips of shorter duration and smaller catches per trip. Additionally, areas of the fishery, particularly around the Wanganella Bank, were known to experience relatively strong currents which may hamper line fishing operations.
17. AFMA obviously adopted a precautionary attitude to the Fishery and to the permits issued in the Fishery because it recorded that:
. . . evidence from similar fisheries elsewhere suggests that the resources in the Fishery will not be large and will be unlikely to support a large scale fishery in the longer term. In line with FMP No. 5, AFMA is taking a cautious approach in only offering seven Fishing Permits in order to minimise the risks of over exploitation, over capitalisation and/or environmental impacts”.
Granting of two trawl Permits only was
regarded as the best means to obtain seasonal information for both target species (alfonsino and orange roughy) across a number of areas and depth in the Fishery. The lesser number of trawl Permits is due to the information already obtained from trawl surveys and the likely outcome that the fishery cannot sustain a large scale trawl fishery (p59 – 60).
18. The EMR recorded selection criteria which relevantly included the “history of previous involvement in commercial fishing and similar projects” and applicants demonstrating a “record of responsible and co-operative fishing”.
19. In a footnote to the criteria of a demonstrated record of responsible and co-operative fishing it is recorded:
To assist AMFA in assessing applications against this criteria each applicant is required to declare in their application any fisheries related prosecutions within the last 5 years in any part of the world. Having such a prosecution recorded does not preclude applicants from participating in the fishery but will be used in ranking their application against any other suitable applications received (p60).
20. Conditions of access to the fishery under the EMR include “50 days fishing in the fishery within the three year exploratory fishing program, with at least one fishing trip to the fishery each year”. The EMR also imposed “Catch limits” with respect to six identified species.
21. In its application for a dropline and trawl Permit in the fishery, Cyno prepared an extensive document with respect to the identity and history of Cyno in the fishing industry, the experience and expertise of its crew, its capacity and willingness to contribute to data collection, its fishing and research plans and its record of responsible and co-operative fishing.
22. The application records that the:
Day to day administration, planning and management of the Saxon Onward is carried out by Cyno P/L in conjunction with Onward Fishing Unit Trust which operates the Saxon Onward in conjunction with Ingrid Brinkman, a permit holder in the South East Trawl and South Tasman Rise fisheries. Norman Brinkman is the sole trustee of Onward Fishing Unit Trust. He was previously Director and Shareholder of Cyno P./L but in 1999 divested his interest for commercial reasons. Norman Brinkman has 12 years experience in the fishing industry and has owned and operated an Export Registered Fish Processing Premises. Norman Brinkman is an active member of the Orange Roughy Assessment Group and the South Tasman Rise Australian Trawl Association. He has also attended many South East Trawl Management Advisory Committee meetings as an industry observer (p85-86).
23. With respect to the criteria of “Demonstrated Record of Responsible and Co-Operative Fishing”, the application by Cyno records:
Neither the applicant, its directors or its shareholders, have any fisheries related prosecutions in the last five years in any part of the world. However, it is thought appropriate to declare that an associate of the applicant, Norman Brinkman, has been prosecuted for three charges of a fisheries-related offence, seven years ago, in August 1993. These charges were considered by the court to be the one course of conduct and related to breaches of Section 107 of the Fisheries Management Act 1991 (Cth).
It should be noted that AFMA, Norman Brinkman and Fish Pak Pty.Ltd. have entered into two agreements relating to the prosecutions. These agreements illustrate AFMA’s willingness to continue to deal with Mr Brinkman and companies related to him and to accept him as a participant in the industry.
AFMA has further evidenced its willingness to deal with Mr Brinkman through its action of issuing on the 13/1/99 Cyno P/L with the Norfolk Island Deep Water Scientific Permit. Mr Brinkman made the application at that time in his capacity as a Director and Shareholder of Cyno P/L. It should be noted that Mr Brinkman has since divested his interest in Cyno P/L for commercial reasons (p90).
24. In approximately July 2000, AFMA received three applications for a trawl permit. Pursuant to the EMR, only two trawl permits would be issued. It was resolved that “an expert panel will be required to decide the trawl permit allocation”.. The three applications for a trawl permit were received from the applicant and the two parties joined in these proceedings. AFMA decided that all three applicants satisfied the criteria of a “Safe, suitable vessel”, “Experience, expertise and quals of management and crew”, “Capacity & willingness for Data gathering and observer carriage”, “History of commercial fishing and similar projects” and (significantly) a “Demonstrated record of responsible and co-operative fishing” (p285).
25. At an AFMA meeting on 1 August 2000 it was decided that “In order to better assess the attributes of the three trawl applications . . .”, two members of AFMA staff would “in consultation with AFMA Compliance, carry out background checks into each applicant regarding any fisheries related prosecutions” and individually assess the Fishing Proposal provided by each applicant (p286).
26. On 8 August 2000 officers of AFMA prepared a summary of the applications for trawl fishing permits in the Fishery. The summary records observations of the applications of Cyno, Ocean Fresh and Petuna and concluded that:
Petuna has the superior application. They exceed the other applicants in the areas of;
·History of commercial fishing and similar projects, and
·Record of responsible and co-operative fishing.
27. With respect to Ocean Fresh and Cyno, the document records:
Ocean Fresh submitted very similar application to Cyno’s.
·Although Seafare (ocean Fresh) also have related prior prosecutions, they appear to be not as heinous as those of Norman Brinkman. Therefore they have a better record of responsible and co-operative fishing.
28. Later in the document, after an assessment was made specifically of the criteria at paragraph 6.1 of the EMR, it is concluded:
All applicants fully and comprehensively met the following criteria, and were equally rated.
·Suitable, safe vessel
·Experience of management and crew
·Data gathering and observer carriage.
For: History of commercial fishing and similar projects
·Petuna rates highest – most extensive experience in development and exploratory fishing – Tasmanian inshore and west coast – HIMI (Heard Island, Macquarie Island)
·Others difficult to separate – Cyno 1999 Norfolk Island offshore exploratory fishing permit issued by AFMA – Ocean Fresh (Simunovich) NZ deep water scampi.
For: Record of responsible and co-operative fishing
·Petuna rates highest – No priors – extensive co-operative research programs
·Cyno rates lowest – priors.
29. The assessment concluded “Therefore Petuna ranks highest. Ocean Fresh and Cyno difficult to separate, although the seriousness of the prior prosecutions associated with Cyno lead to Cyno being ranked last”.
30. Later in the document under the sub-heading of “Prior prosecutions” it is recorded that whilst Norman Brinkman divested his interest in Cyno in 1999, the day to day administration, planning and management of the “Saxon Onward” is carried out by Cyno in conjunction with the Onward Fishing Unit Trust of which Norman Brinkman is the sole trustee. It is recorded (p290), that:
·Norman Brinkman was convicted on two counts of making false statements to AFMA - related to unloading of Orange Roughy on 12th and 13th of August 1993. He was sentenced to two three month goal terms to be served concurrently. The gaol term, not the conviction, was subject to an appeal by Norman Brinkman.
·Norman Brinkman has also pleaded guilty to offences related to the unloading of the “Barameda” on the 2nd of August 1993.
Later it is recorded:
·Ocean Fresh is a joint venture between Simunovich Fisheries Pty Ltd and Seafare Pty Ltd.
·No prior prosecutions against Ocean Fresh.
·Seafare Pty Ltd was involved in catch misreporting of Orange Roughy in 1993, and was convicted of a catch misreporting offence in 1997. Seafare entered into a Deed of Agreement with AFMA whereby a plea of guilty by Seafare resulted in AFMA imposing an administrative penalty on the company in the form of surrender of Orange Roughy quota.
31. At an AFMA Board meeting on 24 and 25 August 2000, the AFMA Board considered the report of 8 August. The Board concluded (p296):
As the prior fisheries related prosecutions of Mr Norman Brinkman were judged to be of a more extensive nature than those associated with Ocean Fresh Pty Ltd, the Panel assessed Ocean Fresh Pty Ltd to better meet the criteria in relation to responsible and co-operative fishing than that of Cyno Pty Ltd.
It resolved to offer a fishing permit to undertake exploratory fishing by trawling in the fishery to each of Petuna and Ocean Fresh. It also resolved to grant a fishing permit to undertake exploratory fishing by demersal line in the fishery to Petuna, Ocean Fresh, Cyno and another.
32. The decisions made by the AFMA Board in its meeting of 24 and 25 August gave rise to the primary decision made on 19 September 2001 which was affirmed by the reviewable decision made on 15 May 2001, (which is the subject of review in these proceedings). We reaffirm that it is only that part of the decision which refused to grant a trawl permit to Cyno which is the subject of this review.
DAVID JOHNSON
33. Mr Johnson is the Manager of the Scallop, Squid, Coral Sea and External Territories Fisheries with AFMA and is responsible for the Norfolk Island Offshore Demersal Finfish Fishery. He has been responsible for managing these fisheries since January 2003. He was not involved in the making of the decisions under review in these proceedings.
34. Mr Johnson confirmed that the Fishery is an exploratory fishery established pursuant to FMP 5. The Fishery was considered in the EMR which was published in May 2000. He confirmed that the EMR was prepared by AFMA staff with input from other organisations comprising Government and interested parties (largely comprising fishery industry representatives and individuals) and from members of the public. He also confirmed that the EMR was ultimately approved by the AFMA Board and was aware that Cyno had been issued with a Scientific Permit by AFMA in January 1999.
35. A greater part of his proof of evidence concerned the process of selection of persons to whom permits would be granted in the exploratory phase of the Fishery and an assessment of whether those persons met specified criteria. The Board of AFMA also decided:
That 50 per cent of any rights that flowed from the exploratory and management recommendation for the NIODFF would be granted equally between those concession holders who hold a fishing permit at the end of the fishing program and have satisfied all permit conditions (para 22).
36. With respect to the previous grant to Cyno of a Scientific Permit, Mr Johnson recorded that in the management of a new Fishery AFMA may allow a “development phase” [we query whether he meant an “exploratory phase”] following a scientific fishing period. In the case of the Fishery in issue in these proceedings, the scientific phase had been completed and a period of management commenced pursuant to the EMR and FMP 5 in December 2000 and would conclude on 31 December 2003. A review will then be undertaken by AFMA and the next phase – if any – will be assessed, being either a continuation of the exploratory phase, access through long term access rights or deciding not to grant any access rights and ceasing the exploratory phase (para 32).
37. He confirmed that efforts by fisherman during a Scientific Permit or during an exploratory phase was at risk “unless AFMA makes some commitment as has been made in the Board decision in this matter”. Additionally he confirmed that no commitment was sought or given to the applicant in relation to the granting to it of a Scientific Permit with respect to the Fishery.
38. Mr Johnson then recorded in his proof the issue raised by the decision-maker concerning the alleged relationship between Brinkman and the Onward Saxon Fishing Trust, Cyno and the vessel Saxon Onward. He recorded that the decision-maker took account of previous convictions of Brinkman and he relied on a table (para 39) identifying persons and corporations, their relationship to the permit applications for the Fishery, their status and the “prosecution result” (refer later). Mr Johnson understood that having regard to the prosecutions, the assessment panel was of the view that the:
. . . behaviour of Brinkman…….. was more serious than the behaviour of…….. Seafare Pty Ltd in reaching that opinion, (AFMA) relied on the opinions of compliance officers and the opinions expressed in various findings in the Magistrates Court and the Supreme Court of Tasmania (para 40).
39. The remaining part of Mr Johnson’s proof of evidence concerned the issue of a third trawl permit. He confirmed in his proof of evidence that AFMA had concerns about “over fishing” in a number of different fisheries which led to the release in December 1989 of a Management Paper entitled “New Directions for Fisheries Management in the 1990’s”.. He recorded that that Paper preferred managing Commonwealth fisheries by adoption of output controls and individual transferable quotas. He described output controls and individual transferable quotas (“ITQ”) as a means of restricting catches of species to sustainable levels after obtaining scientific advice as to the stock levels of species. Thereafter an annual catch level known as a total allowable catch (“TAC”) is set against a relevant species at a level to maintain sustainability. In practice a percentage of a TAC would be allocated to individuals as ITQ’s.
40. With respect to the Fishery in issue in these proceedings, TAC’s with respect to target species were set and as an additional precautionary measure, “trigger limits” were also set against a target species. He recorded that if a trigger limit was reached, AFMA would then be required to consult with permit holders to determine the basis upon which a further catch of that species could be landed.
41. He recorded that there had been:
Very little fishing activity undertaken in the Fishery to date – with the 3 year exploratory program due to conclude in December 2003. AFMA will be undertaking a review over the coming months, and preparing an evaluation report as specified in FMP No. 5 as a basis for determining the most appropriate future management of the Fishery (para 45).
He concluded that the EMR, reflecting AFMA’s policy with respect to the number of permits which should be issued in the exploratory fishing program, was based on scientific input including input from fishing effort which had previously occurred. His proof of evidence recorded that AFMA “has seen nothing to suggest that there is room for additional effort in the fishery or that the existing rights should be diluted”.
42. In evidence Mr Johnson said that the issue of two trawl permits only “would be the best means to meet the objective of the Act”. He confirmed that AFMA does not “know a lot about this Fishery” specifically knowledge of fish stock, the impact of trawling and biological issues. In his view the exploratory program will provide greater information and cause greater certainty to AFMA in any future decision it might make with respect to the Fishery. He said that the policy to issue two trawl permits only was deliberately made as an effective management device yet it was subject to adjustment with respect to future operations in the Fishery.
43. In cross-examination by Mr Clelland on behalf of Cyno, Mr Johnson agreed that FMP 5 differs from FMP 4 because it places greater emphasis on exploratory fisheries and the ongoing rights of fishers after an exploratory phase.
44.
Mr Johnson also agreed that the Scientific Permit was issued to Cyno under
FMP 4 however he said that FMP 5 recognised the risk that fishers faced when exploring new fishing zones and acknowledged that future rights to fish in those zones should be issued. He said the principle underlying FMP 5, was that as AFMA has no ability to fund exploratory fishing, if an entity expends its own funds upon exploration this will be a highly relevant matter in determining whether that entity should be granted a share in a fishery in the future. He said that scientific research would generally not confer future rights but the incentive for fishers undertaking research of that type is the expectation that AFMA will take self-funded research into account when deciding future rights.
45. Mr Johnson agreed that FMP 5 at paragraph 10.2 contains the selection criteria specified in an EMR. One of the criteria is a “history” of previous involvement in similar projects (including satisfactory compliance with specified conditions)”. In the present case Mr Johnson agreed that Cyno would be able to demonstrate that it had a “history” of previous involvement in the same fishery in which it sought a trawl permit, namely the Norfolk Island Fishery.
46. Mr Johnson was then taken to a comparison of the selection criteria published within FMP 5 (page 50) and the selection criteria published in the EMR (page 60). It was noted that there was an additional factor in the EMR; applicants being able to demonstrate a “record of responsible and co-operative fishing”.
47. With respect to the application by Cyno for a scientific permit, Mr Johnson said that it was clear that the applicant for that permit was Brinkman and that AFMA would have known that he had prior convictions. Mr Johnson said that he would not have expected that those convictions would have been raised negatively against him, because he was the only applicant at that time for a scientific permit, as opposed to multiple applications being received for the exploratory phase of the Fishery. Nonetheless he said that AFMA would have wanted reliable data from the scientific phase and would have expected compliance with permit conditions. In those circumstances it was a significant issue for AFMA to issue a Scientific Permit to Cyno to allow it to fish in that zone.
48. Mr Johnson said that AFMA received advice on 17 May 2000 from Cyno that it intended to apply for an exploratory permit in the Fishery and an expression of interest was then received. He did not know whether others had expressed their interest in an exploratory permit at that time. AFMA lodged an advertisement in newspapers on 24 May 2000 indicating that it intended to make available five fishing permits for demersal line fishing and two permits for trawl fishing in the Norfolk Island Fishery (page 69). (The EMR was also published in May).
49. Mr Johnson said that the footnote at the bottom of page 12 of the EMR (page 60) referred to fisheries related prosecutions in the context of assessing whether an applicant demonstrated a record of responsible and co-operative fishing. He was aware that AFMA had taken account of Brinkmans’ “convictions”.. He acknowledged that FMP 5 did not refer to convictions of applicants as a basis for preclusion from granting a permit and was aware also that AFMA had granted Cyno a line permit in the Fishery, thereby indicating that he must have been ranked as a person suitable to be issued with such a permit. It followed, he said, that AFMA did not consider whether Brinkman was a fit and proper person to be issued with a permit of that type because if that enquiry had been made – having regard to the reasons for refusal of a trawl permit – the line permit would not have been issued.
50. Mr Johnson was then taken to the EMR at page 59 where AFMA recorded the prior involvement in the Fishery by Cyno and some of the data that was collected during its line and trawl fishing. He agreed that there was no suggestion within that document or by AFMA that Cyno had not complied with the Scientific Permit conditions. He also agreed that the undertaking by Cyno in the scientific phase amounted to a significant undertaking and the data provided by Cyno did assist AFMA in the development of its policy. He also agreed that neither Petuna nor Ocean Fresh had ever provided any scientific information with respect to this Fishery.
51. Mr Johnson said that AFMA had decided to issue two trawl permits only because it did not want to encourage overcapitalisation, it was concerned with a number of ecological factors and was concerned that species, other than target species, could be affected by trawl fishing. Nonetheless he agreed that it would have been possible to issue three trawl permits yet maintain the total allowable catch (“TAC”).
52. Mr Johnson was then taken to the decision making process as evident by the T-documents. He agreed that Cyno had disclosed Brinkman’s prior directorship and his prior conviction in his capacity as an associate of Cyno. He acknowledged that delegated members of the AFMA Board had found that all three trawl applicants had demonstrated a record of co-operative fishing and an examination of whether the applicants had prior convictions was only relevant in the context of determining whether there had been a record of co-operative fishing. This was despite knowledge that Cyno had had a prior Scientific Permit issued to it and had complied with all of the conditions of that permit. He acknowledged (page 287) that the summary from the assessment personnel recorded Cyno’s prior involvement in the Fishery yet made no reference to the absence of involvement in the Fishery by Ocean Fresh or Petuna. In the context of the assessment report recording that the conviction of Seafare appeared “to be not as heinous as those of Norman Brinkman. Therefore they have a better record of responsible and co-operative fishing”, Mr Johnson said that in his opinion, if both Cyno and Ocean Fresh cannot be distinguished, it was appropriate that the nature of the convictions of each of them be examined in order to distinguish one applicant from the other. Nonetheless he said that the convictions were not the only matter that were taken into account during the assessment procedure. He reaffirmed that it was relevant that Cyno had complied with conditions of a Scientific Permit issued to it in the Fishery and otherwise did have a responsible record of co-operative fishing.
53. In answer to questions from Mr Davis, Mr Johnson acknowledged that paragraphs 2.2 and 2.3 of FMP 5 confirm that there is little funding available for fisheries management and no specific funding for fishing exploration. It followed therefore that AFMA encouraged fishing activity by other persons at their own cost. He agreed, by reason of the conditions imposed upon Petuna and Ocean Fresh in the trawl permits that were issued to them for the exploratory phase, that they would incur a significant financial cost. It followed – he said in agreement with a proposition put to him by Mr Davis – that those persons who undertake that cost and expose themselves to the risk associated with entering into an exploratory fishing zone might expect 50 per cent of fishing rights if an ongoing Fishery is opened and if permit conditions during the exploratory phase are met. Typically he said that conditions imposed would extend to payment of levies, compliance with a number of environmental conditions, taking an observer and meeting the cost of the observer, compliance with TAC and trigger limits, limits upon species and compliance generally with all other permit conditions.
54. With respect to the policy of AFMA to issue two trawl permits only, Mr Johnson was taken to page 61 of the T-documents which contains a reference within the EMR to the restrictions placed upon trawl fishing in the area of the Wanganella Bank, being part of the Fishery. This is apparently a sensitive area because trawl fishing in that area was limited by the EMR to ten days access to each permit holder during the three years of the exploration phase. Mr Johnson agreed that by reason of two trawl permits being issued, a maximum of 20 days trawling around the Wanganella Bank would be permitted during the three years of the exploratory phase. If a third permit was issued on similar terms it would expose Wanganella Bank to trawl fishing for 30 days during a three year period. Mr Johnson said that that area was largely unexplored with respect to fish recruitment, water flow and breeding of target species. AFMA therefore adopted a precautionary approach when issuing the trawl permits.
55. With respect to the Fishery generally, two trawl permits only were issued because of concern about the affect of trawling on target species, the affect upon the seabed by trawling, the risk to bycatch, avoiding over capitalisation and ensuring effective cost management. Issuing a third permit would put those objectives at risk. He said that increasing the catch limits available to the two trawl permit holders would not occur during the exploratory phase. Indeed he said that if concern emerged that the catch limit had been set too high, the limit could be reduced.
56. In answer to questions by Mr De Francesco, Mr Johnson agreed that the undertaking of exploratory fishing by an individual fisherman, as opposed to AFMA initiated exploratory fishing, involves different considerations. He agreed that exploratory fishing by AFMA’s initiation (paragraph 6.3.2 of FMP 5) will involve AFMA evaluating applicants against defined criteria. He acknowledged that the EMR similarly recorded that applications in AFMA initiated exploratory fishing will be evaluated against a set criteria. It did not necessarily follow that a benefit will be given to an applicant who has previously been engaged under a Scientific Permit. This he said was consistent with letters which were sent to Cyno in July 1998 and December 1998 indicating that no guarantee of future rights to the fishing would be made.
57. In answer to questions from Mr Bowen, Mr Johnson said that the costs incurred by Cyno during the scientific phase were considered by AFMA in evaluating the applicants for trawl permits.
58. It was noted under FMP 4 that the Fishery was described as “developmental” whereas FMP 5 refers to it as “exploratory”.. Mr Johnson said that after 31 December 2003 when the present exploratory permits expire, AFMA may decide that the Fishery should become “developmental”. If there is then a call for permit allocation and Cyno were to apply, its experience in the scientific phase would not be considered. He said that all applicants for a permit would be evaluated against the criteria recorded in the EMR.
59. Mr Johnson said that his interpretation of FMP 5 and the EMR suggests that those persons who were given permits during the exploratory phase will be given long term rights if they have complied with all permit conditions.
60. Mr Johnson was then referred to the Heard Island/McDonald Island Fishery (“HIMI”) located approximately 4000 kilometres south-west of Fremantle. He said that that was previously a Fishery under an exploratory phase but is now a managed Fishery. He was aware that there had been litigation concerning the Fishery where the HIMI Fishery Management Policy was examined. In so far as that litigation related to these proceedings, Mr Johnson was notified that an application for review was heard by the Administrative Appeals Tribunal in Re Everfresh Seafoods Pty Ltd and Australian Fisheries Management Authority; Kailis and France Foods Pty Ltd, Austral Fisheries Pty Ltd (Parties Joined) (2000) 58 ALD 581. He was asked to consider part of the decision reported at page 604 which was a reference by the Tribunal to the selection criteria with respect to an applicant having a demonstrated record of responsible and co-operative fishing. A clause in the management plan was reproduced in the decision of the Tribunal in the following terms:
Preference will be given to applicants with a demonstrated record of responsible and co-operative fishing by the applicant, the master and officers and the boat. Responsible and co-operative fishing includes such matters as demonstrated involvement in research programs, a demonstrated willingness to cooperate with observers, research and environmental interests, and compliance with fisheries management arrangements.
To assist AFMA in assessing applications against the criterion each applicant is required to declare in their application any fisheries related prosecutions, fraudulent or other criminal offences with the last 5 years in any part of the world that relate to the:
·applicant, including where the applicant is a company, the directors or persons associated with the company;
·boat; or
·relate to the master(s) of the boat.
Having such a prosecution or offence recorded does not preclude applicants from participating in the fishery but will be used in ranking their application against any other suitable applications received.
Mr Johnson said that he had not observed this clause previously but would expect that it, or a similar clause, would be inserted into any management plan that might apply in the future concerning the Fishery.
BRENDAN KELLEHER
61. Mr Kelleher lodged a statement immediately prior to the commencement of the hearing and adopted it when giving his evidence. That statement is reproduced as follows:
I, Brendan Patrick Kelleher of 135 King Street, Sandy Bay in Tasmania, Managing Director, say as follows:
1.I am the Managing Director of Cyno Pty Ltd.
2.Cyno Pty Ltd is a company that was set up to develop under-utilised fishing opportunities in offshore and remote Australian EEZ fisheries (ie Wanganella, Lord Howe, Norfolk Island and the Challenger Plateau).
3.In 1999 Cyno Pty Ltd applied for a Norfolk Island scientific permit. The company considered that it would be of great benefit to it and would compliment its history and experience in areas adjoining the Australian EEZ. Cyno Pty Ltd, therefore, made enquiries with AFMA and industry to progress these opportunities.
4.Joe Pirello (Seafare Pty Ltd) had made application and received approval for a permit in September 1996, however, not wishing to utilise the permit at that time he agreed to transfer all the information and any rights to Cyno Pty Ltd to assist the company in its application for a permit.
5.In return, Cyno Pty Ltd agreed to reciprocate by sharing any new knowledge of the fishery with Joe Pirello (Seafare Pty Ltd) and this was later demonstrated by Cyno Pty Ltd supplying commercial and in-confidence fishing information for the voyages undertaken to the Norfolk Island Fishery.
6.AFMA stated in a letter dated 6 July 1998 that they were unable to transfer Everfresh Seafood's permit, as it was not used within the appropriate timelines, but Cyno Pty Ltd could apply in their own right and the application would be assessed on its merits. Subsequently, Cyno Pty Ltd applied and were issued with a permit in January 1999.
7.The confidence that Cyno Pty Ltd gained from AFMA's approval laid a path for effort and investment and the company committed approximately $108,000.00 (as per the spreadsheet calculation attached hereto marked "A") in preparing the boat and undertaking the maiden voyage with the vessel "Saxon Onward" in January 1999.
8.There was an expectation that the company would pay a major part in the development of the area.
9.The company has continued to fish outside this area, both in trawl and dropline methods and we have a strong belief that the strategies of Cyno Pty Ltd in developing a trawl and demersal dropline vessel would be successful in this area.
10.On 20 January 1999 the fishing vessel "Saxon Onward" departed Hobart on its maiden voyage to the Norfolk Island Fishery. The purpose of the voyage was to undertake fishing by various methods to provide vital scientific information regarding fish stocks in the area for the Australian Fisheries Management Authority to enable a management plan to be developed.
11.The three methods of fishing to be undertaken were as follows:
(a)drop line fishing;
(b)mid-water trawl fishing; and
(c)deep-water trawl fishing.
12.To enable the vessel "Saxon Onward" to fish by these methods the boat required modifications and additional fishing gear as the vessel normally operated as a deep-water trawl fishing vessel only in cool climates.
13.The spreadsheet attached (Attachment "A") is provided to identify the cost of:
(a)preparing the boat for fishing by all methods;
(b)additional fishing gear for fishing by all methods;
(c)the cost of operating the vessel in a warmer climate;
(d)the cost of running the vessel during the trip; and
(e)the cost of complying with AFMA fishing permit conditions.
14.Attachment "A" shows the loss of revenue for the boat based on the time that the vessel was withdrawn from its normal developed fishing grounds. The "Saxon Onward" completed Trip No 18 on 9 January 1999 and undertook preparations for its maiden voyage to Norfolk Island. The vessel commenced Trip No 19 from Hobart on 20 January 1999 and finished the trip in Auckland on 6 February 1999. Based on the 1998/99 turnover from the vessel, each day away cost the vessel $11,903.13 per day.
15.Exhibited hereto and marked "B" is a bundle of invoices which support the calculations set out in the spreadsheet.
62. In evidence Mr Kelleher said that between the middle of 1998 and early 1999 he was in charge of fishing operations on behalf of Cyno. He agreed that the Scientific Permit had been sought by Norman Brinkman however he said that Brinkman was not a Director of Cyno at that time.
63. Mr Kelleher said that he was “briefly” aware of FMP 4 where its policy is recorded as providing “for the orderly exploration and development of new fisheries”.. He said that he thought that a consequence of being granted a Scientific Permit by AFMA would be favourable consideration in the issue of permits in the exploratory fishery. He said that he held this belief as a result of 15 years of fishing experience in Australia and based on his experience in other exploratory fishing zones where permits had been issued by AFMA. Mr Kelleher said that he was “sure” that Cyno would be issued with a permit “in the next stage” (“the exploratory fishery”) “because this is the way fisheries have worked since I have been here”.
64. When asked whether he had any understanding of the significance or relevance of the prior convictions of Norman Brinkman, Mr Kelleher said that he “knew of them” but he was “sketchy on how it works”. He said that he had subsequently been advised by AFMA that Brinkman’s conviction would be relevant to the granting of permits in the exploratory phase but said that his convictions were not relevant to AFMA in the granting by it to Cyno of a Scientific Permit. He said that a fisheries consultant engaged to assist in the application for an exploratory permit (Mr Geen) had advised Cyno that Brinkman’s convictions “could be a problem”.
65. Nonetheless Cyno completed the scientific survey which comprised of two trips to Norfolk Island, the first being of nine days and the second being of five days, but also involving fishing in another zone. Mr Kelleher said that Cyno subsequently did make an application to AFMA for a permit to fish during the exploratory phase and said that completion of the Scientific Permit “would be the biggest weight of all” in the consideration by AFMA as to whether Cyno should be granted a permit during the exploratory phase.
66. In cross-examination by Mr Davis, Mr Kelleher was taken to paragraph 6.4 of the application by Cyno (made in June 2000) for an exploratory permit (T-10 page 90). That paragraph is reproduced (again) as follows:
6.Fisheries related prosecutions
Neither the applicant, its directors or shareholders, have any fisheries related prosecutions in the last five years in any part of the world. However, it is thought appropriate to declare that an associate of the applicant, Norman Brinkman, has been prosecuted for three charges of a fisheries-related offence, seven years ago, in August 1993. These charges were considered by the court to be the one course of conduct and related to breaches of Section 107 of the Fisheries Management Act 1991 (Cth).
It should be noted that AFMA, Norman Brinkman and Fish Pak Pty. Ltd. have entered into two agreements relating to the prosecutions. These agreements illustrate AFMA’s willingness to continue to deal with Mr Brinkman and companies related to him and to accept him as a participant in the industry.
AFMA has further evidenced its willingness to deal with Mr Brinkman through its action of issuing on the 13/1/99 Cyno P/L with the Norfolk Island Deep Water Scientific Permit. Mr Brinkman made the application at that time in his capacity as a Director and Shareholder of Cyno P/L. It should be noted that Mr Brinkman has since divested his interest in Cyno P/L for commercial reasons.
67. Mr Kelleher said that he was a Director of Cyno in 2000 (when the exploratory permit application was made) but could not recall the date of his appointment. He said that he was familiar with the application.
68. Thereafter Mr Kelleher was asked a number of questions with respect to the relationship, if any, between Cyno and Norman Brinkman. It proved difficult to have Mr Kelleher focus on the questions that were asked of him and this probably accounted for the duration of his cross-examination. Mr Kelleher said that when asked to focus on the reference to Mr Brinkman being an “associate” of Cyno, he said that he and Brinkman “did a lot of business outside Cyno”. At the time the application to AFMA was made, Brinkman “did some administration work” for him because he was then very busy. Mr Kelleher said that he was not working for Brinkman and conversely, Brinkman did not work for him and he was not Brinkman’s “boss”.. He said that whilst Brinkman made the application for the Scientific Permit he (Mr Kelleher) was the Managing Director then of Cyno.
69. The concluding part of paragraph 6.4 (refer above) refers to Brinkman having divested “his interest in Cyno Pty Ltd for commercial reasons” after the application was made for the Scientific Permit. Mr Kelleher said that Brinkman was not a Director of Cyno in 1998. He denied that this paragraph was intended to give the impression that Brinkman ceased as a Director after the application for the Scientific Permit had been made.
70. The issue of Brinkman’s directorship of Cyno was the subject of a number of documents that were lodged during the hearing. This issue will be referred to later in these reasons.
71. Mr Kelleher was then taken to a letter of 6 July 1998 found within a bundle of documents received into evidence as Exhibit 1. It is a letter from AFMA addressed to “Mr Norman Brinkman, Cyno Pty Ltd, PO Box 409, ROSNY PARK TAS 7018”. The salutation “Dear Mr Brinkman” is crossed out by hand and the word “Norm” is substituted. The last paragraph of the letter records the following:
You should be aware that if a Scientific Permit was granted it would only provide access for the period of the Scientific Permit and there would be no guarantee that a Fishing Permit or any other form of access would be provided at the conclusion of this period. The maximum period for which a Scientific Permit can be granted is 6 months.
72. Mr Kelleher said that at the time that this letter was forwarded, he was “in charge” of Cyno. He said that he was aware of the letter and acknowledged that the letter specifically recorded that a guarantee would not be given that a permit to fish would be provided at the conclusion of the scientific period. Mr Kelleher said that he “may have read it” (the letter) although he said that “most of my time was in the field – not in office”.
73. Mr Kelleher was then taken to a file note also found within Exhibit 1 dated 30 September 1998. The heading to the file note is in the following terms:
Meeting between Norman Brinkman (Industry), Jeremy Prince, Trysh Stone and Melissa Bell concerning application for a Scientific Permit in the Norfolk Island Offshore Fishery – Wednesday 30 September 1998 at 11.00am.
The first paragraph of the file note records:
The purpose of the meeting was to discuss access to the Norfolk Island Offshore Fishery, in relation to Cyno Pty Ltd.
74. It appears the meeting was called by AFMA. Mr Kelleher agreed that his name is not recorded at the beginning of this file note. He said that in 1998 “Brinkman was doing work for Cyno – I asked him to do the work”. Nonetheless Mr Kelleher said that he was Managing Director of Cyno at the time of the scientific project and that he (Kelleher) “ran the project”. Mr Kelleher acknowledged that the document refers to discussions between “Trysh” (Stone) and “Norm”. Mr Kelleher agreed that his name is not mentioned throughout the file note. Mr Kelleher said that subsequent to this meeting, Brinkman had notified him that guaranteed access to the Fishery would not be given at the expiration of the scientific period and that Brinkman had also discussed the meeting with him.
75. Mr Kelleher was then taken to a letter dated 21 December 1998 from AFMA (also found within Exhibit 1). The letter is addressed “Mr Norman Brinkman, Cyno Pty Ltd, PO Box 409, Rosny Park TAS 7018”. The salutation at the commencement of the letter is “Dear Mr Brinkman”. The letter is confirmation that a Scientific Permit will be issued. The second paragraph of the letter records:
I am pleased to notify you that the Managing Director has agreed to issue you a Scientific Permit on the condition that you agree in writing to the management arrangements to apply. The Scientific Permit will be valid for a period of 6 months from the date of issue. The Scientific Permit is not transferable. There are no guarantees of continued access to the fishery after the expiry date of the Scientific Permit.
76. Mr Kelleher said that he was aware of this letter and aware that a guarantee had again not been given to access the Fishery at the expiry of the scientific period.
77. Mr Kelleher was then taken to a facsimile message from AFMA dated 18 January 1999 found as one of the documents appended to the statement of Mr Kelleher received into evidence as Exhibit 6. The facsimile message is dated 18 January 1999 and is addressed to “Norman Brinkman, Cyno Pty Ltd” from Martin Scott, a Senior Observer with AFMA. Mr Kelleher again agreed that this facsimile message did not refer to him. Mr Kelleher also agreed that an invoice dated 3 March 1999 from “Diversity Sustainable Development Consultants” was addressed to Mr Brinkman, as was another facsimile from AFMA dated 12 March 1999. Both of these two documents also form part of Exhibit 6.
78. At this stage of the proceedings, Mr Davis lodged the results of a search of the company Cyno Pty Ltd. According to ASIC records, Mr Brinkman ceased as a Director of Cyno in 1997. It appeared that Cyno did not have any directors between 21 July 1997 and 29 March 2000. In the context of paragraph 6.4 at page 90 recording that Brinkman made his application for the Scientific Permit at 13 January 1999 in his capacity as a Director and Shareholder, Mr Kelleher was asked to confirm his earlier evidence that he was at all relevant times the Managing Director. Mr Kelleher said that in these circumstances – and having regard to the company search – that it “may be possible that for some of the time Brinkman ran the company in my absence”. He said that he in fact had “ran” Cyno from 21 July 1997 and all decisions subsequently were made by him and were his responsibility. He said that this was not at odds with his earlier evidence. He reaffirmed that he became a Director of Cyno in the middle of year 2000. He acknowledged that Cynthia Brinkman signed the application for the permits in issue in these proceedings although she was never the “Managing Director”.. Mr Kelleher agreed that he was nominated in the proposal as the “Master” of the vessel which was to undertake the exploratory fishing yet he was not referred to as the Managing Director, nor did he sign the application. According to the ASIC search, Mr Kelleher was appointed a Director on 19 June 2000, being four days before the application was made to AFMA. Mr Kelleher denied that his appointment as a Director was an attempt to distance Brinkman from Cyno in its application for the exploratory permits.
79. Mr Kelleher was then taken to paragraph 4.1 of the application for an exploratory permit (T-10 page 85). That paragraph in part records the following:
The day to day administration, planning and management of the Saxon Onward is carried out by Cyno P/L in conjunction with Onward Fishing Unit Trust which operates the Saxon Onward in conjunction with Ingrid Brinkman, a permit holder in the South East Trawl and South Tasman Rise fisheries. Norman Brinkman is the sole trustee of Onward Fishing unit Trust. He was previously director and shareholder of Cyno P/L but in 1999 divested his interest for commercial reasons. Norman Brinkman has 12 years experience in the fishing industry and has owned and operated an Export Registered Fish Processing Premises. Norman Brinkman is an active member of the Orange Roughy Assessment Group and the South Tasman Rise Australian Trawl Association. He has also attended many south East Trawl Management Advisory Committee meetings as an industry observer.
80. Mr Kelleher agreed with the contents of this paragraph. He denied that it was an attempt by Cyno to demonstrate that it had the benefit of the experience of Brinkman in the fishing industry but at the same time demonstrating that he had distanced himself from Cyno. Mr Kelleher said that the intention of this paragraph was to demonstrate to AFMA that Brinkman “had done something wrong but don’t kill him for it”.
81. Mr Kelleher was then taken to a letter written by Simmons Wolfhagen Solicitors of 19 January 2001 found at T-1 page 7 (and also at T-25 page 319). Mr Kelleher was asked to read it. He said he did not recognise the document but acknowledged that it was a request to review the primary decision made by AFMA to reject the application by Cyno for a trawl licence.
82. Mr Kelleher was taken specifically to paragraph 2 (T-documents page 8) which recorded the following:
2.AFMA erred in according undue weight to the fact of Norman Brinkman's criminal conviction and association with the Applicant, Cyno Pty Ltd, and erred in consequently ranking Cyno's application below that of Petuna and Ocean Fresh for the following reasons:-
(i)AFMA had no prior regard for Mr Brinkman's criminal convictions and association with Cyno Pty Ltd when allocating Cyno Pty Ltd a scientific exploratory permit;
(ii)It would be unconscionable, inequitable and capricious for AFMA to rank Cyno's application below that of other applications despite its history of exploratory fishing in the area which was allowed by AFMA despite our client's association with Cyno Pty Ltd and the existence of our client’s criminal conviction when the scientific permit was allocated;
(iii)AFMA is now estopped from taking into account our client’s criminal conviction and association in determining a ranking;
(iv)Mr Brinkman is no longer a director of the applicant company and his association with the company is, in fact, far removed and reduced from that position he held at the time of his application for a scientific permit. There is no evidence that Mr Brinkman would exert any undue influence on the company's fishing activities. The fact is his conviction is for an offence which allegedly occurred in 1993. Mr Brinkman's subsequent participation in the industry and his subsequent contribution to the industry provides clear evidence that there is no prospect of the company acting other than in a responsible and co-operative way if a permit were granted to it to trawl in the Norfolk Island zone.
83. Mr Kelleher agreed that the reference to “our client’s” throughout that paragraph is clearly a reference to Mr Brinkman. He also agreed that the reference in paragraph 2 (iv) to “undue influence” did not exclude Brinkman exerting “any influence”.
84. In a letter to the Registrar of the Tribunal on 26 February 2002, Simmons Wolfhagen wrote a letter in similar terms to the letter of 19 January 2001. Paragraph 2 of the latter letter is in virtually identical terms to paragraph 2 of the former letter save that paragraph 2 (iv) of the former letter commences with the words “Mr Brinkman” whereas the paragraph 2 (iv) of the latter letter (incorrectly described as 2 (iii)) commences with the words “our client”. Mr Kelleher again agreed that the references there to the words “our client’s” are a reference to Mr Brinkman.
85. Mr Kelleher said that Brinkman had been instructing Simmons Wolfhagen “on my behalf”. He denied however that Brinkman was “running” this proceeding and whilst acknowledging that Brinkman had an “earlier interest” in these proceedings, Mr Kelleher said that between 19 January 2001 (when the first letter was forwarded) and 26 February 2002 (when the second letter was forwarded to the Registrar) he had been “in charge”, that he “got help from others if I need” and that he “may choose to get Brinkman to do the work”.
86. Mr Kelleher was again taken to paragraph 6.4 of the application for an exploratory permit (refer earlier). Mr Kelleher acknowledged that Mr Brinkman was disqualified from acting as a Director by ASIC at 21 July 1997 by reason of his conviction. When Mr Kelleher was asked to comment upon the last sentence of paragraph 6.4 as being untrue because Mr Brinkman in fact did not divest his interest in Cyno for “commercial reasons” (but rather because he was disqualified as acting as a Director), Mr Kelleher agreed that Brinkman was unable to continue as a Director because of the disqualification imposed by ASIC. Mr Kelleher said that the last sentence of paragraph 6.4 was intended to mean that Brinkman had ceased being a Director (as opposed to divesting his interest in Cyno for commercial reasons).
87. The witness was then taken to the documents annexed to his statement purporting to demonstrate the costs incurred during the scientific period. Some of the invoices were sent to “Fish Pak Pty Ltd”. Mr Kelleher said that Fish Pak Pty Ltd was a company at all relevant times managed by Brinkman. Mr Kelleher said that Fish Pak Pty Ltd in turn invoiced Cyno for the expenses incurred by it.
88. In cross-examination by Mr Bowen, Mr Kelleher said that he and Brinkman are the owners of the vessel “Saxon Onward”.. He said that the expenses incurred by the vessel are invoiced to the “Onward Fishing Unit Trust” which are then “reconciled to Cyno”.. Mr Kelleher said that he did not know the current legal status of Fish Pak Pty Ltd but said that the “factory has closed”.
89. The person “Jeremy Prince” referred to in the file memorandum of 30 September 1998 was said by Mr Kelleher to be a fishing consultant. He said that Cyno engaged him to assist in the preparation of the proposal for the exploratory fishery.
90. With respect to the letter of 6 July 1998 addressed to Brinkman from AFMA, Mr Kelleher said that he could not now recall reading the second last paragraph which specifically recorded that a guarantee of future rights would not be given. He said that “when I read it now it would not have been important then because AFMA allowed people to go onto the next stage”. He said he had an expectation of a permit eventually being issued because that was the “practice”.. Nonetheless he understood that AFMA did not offer a “guarantee”.
91. Mr Kelleher was then taken to paragraph 8.1 of the Cyno application (T-10 page 92) which records in part . . . (The remainder of the paragraph is deleted pursuant to Orders of the Tribunal on 2 October 2002 and 28 November 2003 – refer paragraph 4(ii) of these reasons).
92. Mr Kelleher was then taken to T-9 which is the handwritten application for the exploratory permit. He said that the person who completed that document was “Phil Hooper” who was “our Office Manager”. He said the typed proposal commencing at T-10 page 78 was completed by him, Brinkman and Hooper. He said that it would have been completed in consultation with Jerry Geen.
93. In cross-examination by Mr De Francesco, Mr Kelleher said that Brinkman presently is residing in Sydney. He said that he did not know his address but did know of his telephone number. He said the person Ingrid Brinkman had been involved in the “structure and set-up of licensing” when he had commenced with Cyno. Nonetheless he said that he was “not aware” that she had been involved with Cyno’s application to AFMA in May 2000.
94. Mr Kelleher was asked to comment on paragraph 4.1 of the proposal found at pages 85 - 86 (refer earlier). He denied that Ingrid Brinkman had a greater involvement than as described. He said that the fishing permit was in her name only whereas she did not “operate the vessel” nor was she involved in any “planning”.
95. With respect to the costs incurred in fitting the Saxon Onward for the scientific survey, Mr Kelleher said that the nets, gear, and other equipment which had been acquired would have virtually no second-hand value because “no-one would buy it”. Nonetheless he agreed that the bait room could be used in similar fishing and that the new dropline gear could be used again. He agreed that the maps that were purchased could be used “if we were fishing in that vicinity”. He said that if the freezer which had been fitted was now removed, it would have no resale value “because it is three years old”.. Whilst denying that the fitting of this equipment increased the value of Saxon Onward he did acknowledge that the equipment as fitted would permit that vessel to fish in other fishing zones. With respect to the “summary of costs” incurred by Cyno during the scientific phase, Mr Kelleher was asked to explain why the sum of $3,142.74 was paid to Brinkman and described as “travel expenses to Auckland”. Mr Kelleher said that “one of us had to go (to Auckland) and I was getting married”. In those circumstances, he said that Brinkman travelled to Auckland.
96. When asked to peruse some of the invoices annexed to his statement, Mr Kelleher said that he could “not recall” whether Fish Pak Pty Ltd was an agent for the Onward Fishing Unit Trust in February 1999 and May 2000. When a number of invoices addressed to Fish Pak Pty Ltd were drawn to his attention, Mr Kelleher denied that Fish Pak was an agent of Cyno and that it had been assisting Cyno and the Onward Fishing Unit Trust to purchase and fit equipment to the Saxon Onward. When pressed on this issue Mr Kelleher conceded that Fish Pak “may have had a role in supply for the boat” but not with respect to its fishing operation. He agreed that Fish Pak Pty Ltd is not referred to at all throughout the proposal found at T-10.
97. Mr Kelleher was then asked to identify bank accounts held by Cyno Pty Ltd. He said that Cyno did not have “an account in its own name. We have our own way of paying domestic bills”. He said that the Onward Fishing Unit Trust made payments for Cyno and that Cynthia Brinkman and Norman Brinkman “wrote the cheques”.. Mr Kelleher said that he did not write out cheques because “they were in the office”. He said he did not know “which account paid the invoices attached to my statement”.. At May 2000 Mr Kelleher said the only assets of Cyno were its fishing permits. Since May 2000 he said that the Trust pays all the accounts and that he (Kelleher) completes “day to day work for the Trust. I don’t do work for Brinkman. I am not directed by Brinkman. No one has directed me to do the work that I do. It pays me”.
98. In re-examination by Mr Clelland, Mr Kelleher said that Saxon Onward completed two voyages in January and May 1999 during the scientific phase. He said the returns then did not justify the Scientific Permit on a commercial basis. He said that the Scientific Permit was sought and undertaken because “we thought we would get a permit later and could then do it properly”.
99. With respect to paragraph 6.4 over which he was cross-examined, Mr Kelleher said that it had been drafted by Mr Geen. With respect to paragraph 4.1, Mr Kelleher said that it had been drafted by Mr Geen and by Brinkman.
AGREED FACTS
100. Mr Davis on behalf of Petuna advised us that he had discussed with Mr Clelland lodging a statement of agreed facts with respect to his client. We were notified by both Counsel that it was agreed between them that the statement of agreed facts be received in lieu of any witness being called on behalf of Petuna. Noting that there was consent by representatives for the applicant and by Petuna to this course of action, and in the absence of any objection, we agreed to receive that document containing the agreed facts which are reproduced as follows:
Cyno Pty Ltd and Australian Fisheries Management Authority
Before Senior Member Handley and Associate Professor Davis
Facts agreed between N P and H M Rockliff and Cyno Pty Ltd and read into evidence 16 October 2003
Filed on behalf of N P and H M Rockliff
1In March 1997 Petuna/SealordIRockcliff ("Petuna") applied for and was granted a Scientific Permit for a new fishery known as Heard Island and McDonald's Island Fishery ("HIMI").
2Both the application for a Scientific Permit and the conduct of fishing activities were conducted in accordance with the 1987 HIMI Fishery Exploratory Policy.
3A total of 44 days exploratory fishing was conducted by Petuna in the HIMI.
4The Petuna vessel undertook extensive trawling over a wide region and over a wide depth of the HIMI.
5At the completion of HIMI fishing, a Fishing Scientific Data report was furnished to AFMA (refer T document 32 page 502).
6The net loss to Petuna group profit arising from the HIMI campaign is asserted by Petuna to be A$1.3 million. Cyno concedes that the loss was significant.
7Petuna spent 5 days trawling on the Wanganella Bank in the Norfolk Island Offshore Demersal Fin Fishery ("NIODFF") during the years 2001 to 2003.
8The cost to Petuna of its 2 trips to the NIODFF in 2001 and 2002 is asserted by Petuna to be A$170,000 per trip. Cyno concedes that a significant sum was expended.
9The net losses to Petuna group profit arising from the NIODFF fishing trips in 2001 and 2002 are asserted by Petuna to be $75,000 and $105,000 respectively. Cyno concedes that the losses are significant.
History of Directors of Cyno Pty Ltd
101. During the hearing the representatives of Petuna Pty Ltd lodged a copy of a company search of Cyno Pty Ltd made on 15 October 2003. The document is described as an “ASIC historical extract”. It records that Norman Brinkman ceased as a Director and Secretary of Cyno Pty Ltd on 21 July 1997. On 29 March 2000, Cynthia Brinkman was appointed a Director and Secretary, Brendan Kelleher was appointed as a Director on 19 June 2000. Both Cynthia Brinkman and Brendan Kelleher each hold one ordinary share in Cyno Pty Ltd.
102. On the face of this document it would appear that Norman Brinkman ceased to be a Director of Cyno Pty Ltd at 21 July 1997, however a number of other documents were subsequently received into evidence indicating that Norman Brinkman applied to the Federal Court seeking leave pursuant to s 229(3) of the Corporations Act 1989 (“Corporations Act”) for him to manage Cyno as a Director.
103. By way of background it appears that the date 21 July 1997 was the date that Magistrate PJA Wright convicted Mr Brinkman. On 11 February 1998 the regional office of ASIC wrote to Mr Brinkman notifying him that it had become aware that he had had been convicted of two breaches of the Act. He was notified that in the opinion of ASIC the convictions amounted to “serious fraud” within the meaning of the Corporations Act. He was notified that he was prohibited from managing a corporation without leave of the Court and was asked to confirm by 25 February 1998 whether he intended to either resign all directorships and cease taking part of the management of a corporation or apply to the Court for leave to manage the corporation.
104. On 26 March 1998 the solicitors for Mr Brinkman made application to the Federal Court for an interim grant of leave to manage Cyno Pty Ltd, Fish Pak Pty Ltd and two other corporations. On 16 April 1998 Heerey J in the Federal Court at Hobart granted leave to Brinkman to manage Cyno and Fish Pak Pty Ltd and two other corporations until such time as the Full Court of the Supreme Court of Tasmania delivered its decision with respect to an appeal against a decision of Mr Justice Underwood in Appeal number 72 of 1997 (referred to later).
105. Later, another application was made by Mr Brinkman pursuant to s 229(3) of the Corporations Law being at a point in time after the Full Court made its decision (2 November 1998) and before Mr Justice Underwood made his decision upon remittal from the Full Court. On 1 February 1999 Heerey J again granted leave to Brinkman to manage Cyno, Fish Pak and two other corporations “until forty two (42) clear days after Mr Justice Underwood hands down his decision on matters remitted to him by the Full Court of the Supreme Court of Tasmania”.
106. On 4 June 1999 Mr Justice Underwood made his decision and on 16 July 1999 a further application was made to the Federal Court pursuant to s229(3). The application then made was that leave be granted but limited in time until “forty two (42) days after the finalisation of the appeal proceedings FCA 42 of 1999, currently listed before the Full Court of the Supreme Court of Tasmania”.
107. It would appear that an appeal against the decision of Mr Justice Underwood of 4 June 1999 was contemplated however a search of decisions of the Supreme Court of Tasmania does not indicate any decision of the Supreme Court, whether by Full Court or single Judge, after 4 June 1999, concerning Brinkman.
108. The application lodged in the Federal Court on 16 July 1999 concluded by a consent decision on 4 October 1999, where leave was granted to Brinkman to manage as a Director of Cyno Pty Ltd, Fish Pak Pty Ltd and two other corporations until 26 November 1999.
109. On 16 October 2003 KPMG (Exhibit 11) wrote a letter to Simmons Wolfhagen indicating that the one ordinary share previously held by Brinkman in Cyno Pty Ltd was transferred to Brendan Kelleher on 28 June 2000. Significantly the letter also confirmed that Brinkman signed a letter of resignation as a Director of Cyno on 26 November 1999 (a copy of that letter was attached to the letter from KPMG). The date, 26 November 1999, is the same date which appears in the consent decision of the Federal Court made on 4 October 1999 (refer earlier).
110. Subsequent to the consent decision of 4 October 1999 there was correspondence between Simmons Wolfhagen and ASIC. On 26 July 2000, ASIC in a letter to Simmons Wolfhagen confirmed that Brinkman had ceased in the role of Director and Secretary of Cyno Pty Ltd as at 21 July 1997.
111. The above circumstances indicates that Mr Brinkman was disqualified by force of law as a Director of Cyno on 21 July 1997, being the date that he was convicted by a Magistrate in Tasmania. He subsequently sought – and obtained - leave on three occasions to manage Cyno as a Director and did so until 26 November 1999. On that date he resigned as a Director. ASIC has recorded him as having been disqualified as a Director with effect from 21 July 1997.
HISTORY OF CRIMINAL PROCEEDINGS
112. So far as may be gleaned from the decision of Underwood J in Brinkman v Dix (No 2) [1999] TASSC 65 , Brinkman and Fish Pak Pty Ltd were charged upon summons returnable before the Hobart Court of Petty Sessions arising out of offences alleged to have occurred on 12 and 13 August 1993. The matters were first heard by a Magistrate on 8 October 1996. When the Magistrate determined that he would hear the complaints against both Brinkman and Fish Pak Pty Ltd together, a Writ of Prohibition was sought from the Supreme Court of Tasmania to restrain the Magistrate from that course of action. On 9 October 1996 an Order Nisi was made but discharged on 5 November 1996. An appeal was subsequently lodged with the Full Court which was dismissed on 12 May 1997. The Magistrate resumed the hearing on 30 May 1997. On 21 July 1997 the Magistrate convicted both Brinkman and Fish Pak Pty Ltd.
113. The offences relate to the declarations made in “SEF12” forms completed by Brinkman and sent to AFMA purporting to declare the weight of fish unloaded from the vessels “Saxon Onward” and “Moira Elizabeth” on 12 and 13 August 1993. The Magistrate found as a fact that the weight of fish respectively unloaded was 26,400 kilograms and 27,200 kilograms. The Magistrate also found that the SEF12 forms respectively declared the weight of the fish unloaded at 12,672 kilograms and 24,152 kilograms. Accordingly it was found that the understatement of the fish unloaded was 16,776 kilograms.
114. The Magistrate fined Fish Pak Pty Ltd $25,000 and $15,000 upon two complaints. There was no appeal against those penalties. With respect to Brinkman, the Magistrate imposed a sentence of three months imprisonment upon each of two complaints and ordered that each sentence be served concurrently.
115. An appeal was lodged with the Supreme Court of Tasmania against the convictions and penalty with respect to Brinkman. On 14 November 1997 Underwood J dismissed the appeals against conviction but allowed the appeals with respect to sentence. Brinkman and the Prosecutor (“Dix”) respectively appealed against that decision and on 1 and 2 June 1998, the appeals were heard by the Full Court resulting in a decision on 2 November 1998 where it was found that the appeal by Brinkman be dismissed and an appeal lodged by Dix was allowed. The matter was remitted to Underwood J with respect to Brinkman’s motion to review the sentences imposed by the Magistrate. His Honour resumed the hearing and on 30 May 1999 the decision made by the Magistrate as to penalty was restored.
116. His Honour was obviously concerned as to the conduct of Brinkman and the nature of the offence because at paragraph 63 of his decision of 4 June 1999, he decided:
63Having regard to the importance of general deterrence, it cannot be said that the imposition of a short sentence of immediate imprisonment reflected unidentified error in the exercise of the sentencing discretion, notwithstanding the applicant's hitherto good behaviour. The offences were offences of greed, committed in a calculated manner and designed to deceive those charged by the public with the duty of properly managing a fragile resource in the public domain. The Fisheries Management Act, s107 provides for a maximum penalty of twelve months' imprisonment. The applicant was experienced in the fish processing industry and committed the offences in the full knowledge that to do so was to risk imprisonment. The offences were not committed as a result of an impetuous foolish decision. They constituted a deliberate attempt to practise a deception for financial gain, and were committed by a person who well knew the importance of furnishing accurate returns to AFMA. In general terms, imposition of penalty for this kind of offence, committed by a person engaged in the commercial fishing industry, must amount to more than a "tax" on illegal activity, otherwise it will be ineffective as either a personal or general deterrent.
CONCLUSION AND REASONS FOR DECISION
117. At the outset it is important for us to state the law applicable to this review. The following analysis, as we will recite, may appear unnecessary or axiomatic however counsel for the applicant submitted:
140. With respect to the criteria of a “History of Commercial Fishing and Similar Projects” AFMA decided that Petuna rated the highest because of its experience in developmental and exploratory fishing around Tasmania and the HIMI. AFMA then recorded “Others difficult to separate – Cyno 1999 Norfolk Island Offshore Exploratory Fishing Permit Issued by AFMA – Ocean Fresh (Simunovich) NZ Deep Water Scampi”.
141. With respect to the criteria of a “record of responsible and co-operative fishing” AFMA decided (T-documents page 288):
·Petuna rates highest – no priors – extensive co-operative research programmes
·Cyno rates lowest – priors
Therefore Petuna ranks highest. Ocean Fresh and Cyno difficult to separate although the seriousness of the prior prosecutions associated with Cyno lead to Cyno being ranked last.
142. AFMA decided that the two trawl permits should be issued to Petuna and Ocean Fresh. It decided, in its process of ranking, that the applicant’s “demonstrated record of responsible and co-operative fishing” was inferior to the other two applicants and accordingly it was not issued with a trawl permit.
143. We will return shortly to an analysis of the ranking methodology adopted by AFMA but at this stage it is necessary in our view to consider the concept of “responsible and co-operative fishing”.
144. The footnote to this criteria (found at page 60) records specifically that an applicant is required to declare any fisheries related prosecutions to “assist” AFMA in assessing applications against criteria. The footnote specifically records that a prosecution will not “preclude applicants from participating in the fishery” but says further that such a prosecution “will be used in ranking their application against any other suitable applications received”.
145. We interpret the words of footnote “4” to mean that a declaration of a prosecution for a fisheries related offence will be used by AFMA in its ranking process. Ranking of course will only be required if there are more applicants than available permits. In the present case there were three applicants for two trawl permits. Accordingly a ranking process was required. In the case of the demersal permits there were in fact a greater number of permits issued than there were applicants. The knowledge by AFMA of the prosecution of Brinkman was not relevant in the issue to Cyno of the demersal permit.
146. In this analysis we are concerned by the use of the word “prosecutions”.. It is to be hoped that if an applicant for a permit had been prosecuted for a fisheries offence but had been found not guilty, that the “prosecution” would not be used in the ranking process. We would regard that as being most unfair. We would suggest with respect that AFMA delete the use of the word “prosecution” and if it is intended – as we understand it to be – that “a conviction” be the basis of ranking, that that word be used.
147. We would also suggest that there should be consistency by AFMA in its fishery management plans of criteria with respect to demonstration by an applicant of “responsible and co-operative fishing”. In the present case there is no assistance in the EMR of what AFMA intends to mean by the words “responsible and co-operative fishing” other than the words that appear in footnote 4. It is clear that AFMA regards fishery related offences as worthy of note should there be a process of ranking applications for permits. It is also clear that contravention of the fisheries legislation – as evidenced by a prosecution – will be an indicia of the demonstration by the applicant of responsibility and co-operation as a fisherman. Yet the intent of AFMA in having regard to criminal offences – presumably intended by the use of the word “prosecution” is important to AFMA because in the management plan operating in the HIMI in the years 1998/2000 one of the selection criteria is recorded in the following terms:
Preference will be given to applicants with a demonstrated record of responsible and co-operative fishing by the applicant, the master and officers and the boat. Responsible and co-operative fishing includes such matters as demonstrated involvement in research programs, a demonstrated willingness to cooperate with observers, research and environmental interests, and compliance with fisheries management arrangements.
To assist AFMA in assessing applications against the criterion each applicant is required to declare in their application any fisheries related prosecutions, fraudulent or other criminal offences with the last 5 years in any part of the world that relate to the:
·applicant, including where the applicant is a company, the directors or persons associated with the company;
·boat; or
·relate to the master(s) of the boat.
Having such a prosecution or offence recorded does not preclude applicants from participating in the fishery but will be used in ranking their application against any other suitable applications received.
148. The criteria above is certainly much more comprehensive and explicit than the criteria found within the EMR being considered in these proceedings. It was considered in the Tribunal decision of Re Everfresh Seafoods Pty Ltd and Australian Fisheries Management Authority; Kailis and France Foods Pty Ltd; Austral Fisheries Pty Ltd (Parties Joined) (2000) 58 ALD 581 at 604 (refer paragraph 60 earlier). Unfortunately little attention was given by the Tribunal (in Re Everfresh) to the words “responsible and co-operative fishing”. An issue that was considered under this criteria was the failure by a director of the applicant to declare a prior prosecution. As may be gleaned from the reasons for decision, the director of the applicant company said in evidence that he had been advised by his legal representatives that there was no necessity to record the prosecution. (Coincidentally the person who gave that evidence as the director of Everfresh has an association with the first party joined in these proceedings. Equally coincidentally, the conduct which gave rise to the prosecution of that person was the conduct that occurred simultaneously with the conduct of Brinkman which was the subject of evidence in these proceedings. It appears that that person was not convicted whereas Brinkman was convicted. Lest any inference be drawn from these comments, we should record that the legal representatives of the person concerned in these proceedings were not the representatives of that person in the Everfresh review).
149. In the absence of assistance from the EMR as to the meaning of the words “demonstrated record of responsible and co-operative fishing”, resort to external sources is required. The words “demonstrated”, “record”, “responsible” and “co-operative” are words of everyday meaning which do not require any analysis by us. Together with the word “fishing”, those words must be interpreted as a collective rather than individually. Clearly the words are designed to refer to a demonstration of responsibility and co-operation in “fishing”. That word is defined at s4 of the Act relevantly at sub-paragraphs (a), (c), (e) and (g) which are reproduced as follows:
fishing means:
(a)searching for, or taking, fish; or
. . .
(c)engaging in any other activities that can reasonably be expected to result in the locating, or taking, of fish; or
. . .
(e)any operations at sea directly in support of, or in preparation for, any activity described in this definition; or
. . .
(g)the processing, carrying or transhipping of fish that have been taken.
150. The objectives of the Act (found at s 3) must also be considered particularly sub-paragraphs (b), (c) and (d) which are reproduced as follows:
. . .
(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
151. In its ranking process, AFMA decided that Cyno rates “lowest” because it had “priors”. Cyno does not have “priors”.. The prior convictions relevant to this review were those of Brinkman. The language at that part of the ranking criteria is inappropriate but its intent is found later at page 288 because it is recorded “the seriousness of the prior prosecutions associated with Cyno lead to Cyno being ranked last”. We understand those words to mean that the prosecution concerning Brinkman, being a person associated with Cyno, caused Cyno to be ranked “last”.. The relationship between Brinkman and Cyno will be discussed later however for the purposes of this analysis, Cyno, by its director Brinkman, was unable to demonstrate a record of responsible and co-operative fishing because Brinkman had been prosecuted and convicted of a fisheries related offence resulting in imprisonment. As may be gleaned from the decision of Underwood J in his decision delivered on 4 June 1999 (refer earlier), Senior Counsel for Brinkman did not contest the findings of the Magistrate at first instance. The offence in issue concerned the declaration by Brinkman on 12 and 13 August 1993 of fish stock weighing 12,672kgs and 24,152kgs respectively when the true weight of the fish unloaded was 26,400kgs and 27,200kgs, an understatement of 16,776kgs. The evidence before the Magistrate was of an association between Brinkman and a related company Fish Pak which was also prosecuted. Fish Pak is a fish processing enterprise. The value of the understatement of the fish was (in 1993) $48,000. The Magistrate found that Brinkman and Fish Pak both certified the same false understatement and he concluded that in doing so AFMA was deceived. His Honour concluded that “the offences were offences of greed committed in a calculated manner and designed to deceive those charged by the public with the duty of properly managing a fragile resource in the public domain”.
152. We have concluded that the circumstances of the offence as we have learnt are within the definition of “fishing” and in fact do offend the objectives of the legislation as have been recited above in s3 of the Act. We can do no better than recite from a decision of Underwood J in Jetopay Pty Ltd v Dix (1994) 76 A CRIM R 427 (where coincidentally the appeal involved an understatement of the same species of fish) – at paragraph 32:
32. . . .The offences are difficult and expensive to detect and the rewards are very substantial for those who take fish to which they are not entitled. Orange Roughy and other species of fish constitute a natural resource, the preservation, controlled harvest and proper management of which is a matter in which the whole community has a legitimate interest. The legislation reflects this legitimate interest. Exploitation of the resource by a few for personal financial gain puts at risk the survival of this resource for future generations.
153. The language adopted by His Honour is consistent with the objectives of the legislation arising out of the conduct of a person who may be regarded as having been engaged in “fishing”. The sentiment expressed by His Honour in Jetopay can clearly be referable to the conduct of Brinkman. That conduct in relation to the episode of August 1993 fails to demonstrate – so far as the events on that occasion are concerned – a “record of responsible and co-operative fishing”.
154. AFMA was obliged to rank applicants for the trawl permit. It did so not only because there were more applicants than permits which would be issued but it was charged with that responsibility under paragraph 6 of the EMR (refer page 60). So far as we can determine from the documents and upon the evidence of Mr Johnson, we are satisfied and find as a fact that officers of AFMA did comply with the requirements of the EMR as to ranking and did observe and properly understand the selection criteria. We are satisfied and find as a fact that it was necessary for AFMA officers to have regard to the conduct of Brinkman as referred to above. The conduct of Brinkman, the extent of the understatement of his catch, the value of the fish understated and the penalty imposed were significant and important matters to consider in the ranking process. The person referred to earlier in these reasons who presently has an association with the first party joined was the director of the company Seafare Australia Pty Ltd (“Seafare”) which was convicted arising out of offences occurring at or about the same time that Brinkman was charged. The company was convicted, the person was not. The Magistrate apparently found that there was inadequate control over the skipper of the relevant vessel (who understated the catch). There was a finding that Seafare and the skipper did not act in collusion and the director of Seafare inadequately supervised the skipper. Seafare was fined $10,000. Those circumstances are very different to that of Brinkman. Further, the director of Seafare entered into an arrangement with AFMA whereby it surrendered its Orange Roughy permit. Despite the person previously associated with Seafare now being the same person associated with the first party joined, a comparison of the offences involving Seafare and Brinkman suggest that Cyno should be ranked below Seafare on the issue of “responsible and co-operative fishing” and we are satisfied as a fact that it was appropriate and correct for that ranking to have been made.
155. With respect to the history of commercial fishing and similar projects we agree that on the criteria Petuna would rate highest. It does have an extensive record of experience in the exploration and development of fishing around Tasmania and in the HIMI. Ocean Fresh does have experience in the exploration and development of other fisheries and Cyno does have experience in the Norfolk Island fishery having regard to the scientific permit which was issued to it. No criticism was made of Cyno with respect to the data that it obtained, produced and provided to AFMA and we accept that it then expended considerable amounts of money. But that is a requirement and a consequence of all undertakings in a scientific phase of a fishery. For reasons which we have found earlier Cyno could not hold any legitimate expectation of being issued with an exploratory licence (which would entitle it to have a greater ranking than other trawl applicants). . . . (The remainder of the paragraph is deleted pursuant to Orders of the Tribunal on 2 October 2002 and 28 November 2003 – refer paragraph 4(ii) of these reasons).
156. On balance however, even if we were to rank Cyno above Ocean Fresh with respect to the criteria of a “history of commercial fishing and similar projects”, we would attach so much weight to the conviction of Brinkman that when all criteria were considered and weight against each criteria assessed, that Cyno would have been ranked third. The decision therefore to award the trawl permits to Petuna and Ocean Fresh were, in the circumstances, correct and preferable.
157. The remaining issue of significance is the relationship between Cyno and Brinkman.
158. The application for permits made by Cyno records at paragraph 4.1 (page 85)
The day to day administration, planning and management of the Saxon Onward is carried out by Cyno P/L in conjunction with Onward Fishing Unit Trust which operates the Saxon Onward in conjunction with Ingrid Brinkman a permit holder in the South East Trawl and South Tasman Rise fisheries. Norman Brinkman is the sole trustee of Onward Fishing Unit Trust. He was previously director and shareholder of Cyno P/L but in 1999 divested his interest for commercial reasons. Norman Brinkman has 12 years experience in the fishing industry and has owned and operated an Export Registered Fish Processing Premises. Norman Brinkman is an active member of the Orange Roughy Assessment Group and the South Tasman Rise Australian Trawl Association. He has also attended many South East Trawl Management Advisory Committee meetings as an industry observer.
159. At paragraph 6.4 of the application the following paragraphs appear (page 90):
Fisheries related prosecutions
Neither the applicant, its directors or shareholders, have any fisheries related prosecutions in the last five years in any part of the world. However, it is thought appropriate to declare that an associate of the applicant, Norman Brinkman, has been prosecute for three charges of a fisheries-related offence, seven years ago, in August 1993. These charges were considered by the court to be the one course of conduct and related to breaches of Section 107 of the Fisheries Management Act 1991 (Cth).
It should be noted that AFMA, Norman Brinkman and Fish Pak Pty. Ltd. have entered into two agreements relating to the prosecutions. These agreements illustrate AFMA’s willingness to continue to deal with Mr Brinkman and companies related to him and to accept him as a participant in the industry.
AFMA has further evidenced its willingness to deal with Mr Brinkman through its action of issuing on the 13/1/99 Cyno P/L with the Norfolk Island Deep Water Scientific Permit. Mr Brinkman made the application at that time in his capacity as a Director and Shareholder of Cyno P/L. It should be noted that Mr Brinkman has since divested his interest in Cyno P/L for commercial reasons.
160. The combined effect of both of the above recited paragraphs is intended to convey a separation between Cyno and Brinkman at the time the application for a trawl permit was made (June 2000). We are not satisfied however that in fact such a separation existed because:
·an examination of the records of ASIC demonstrate that Brinkman ceased to be a director of Cyno on 21 July 1997. It was on that date that he was convicted by a Magistrate. ASIC was of the opinion that his conviction amounted to “serious fraud” within the meaning of the Corporations Act and he was from that date – according to their records – prohibited from managing a corporation without leave of a court. Brinkman did in fact seek and obtained leave from the Federal Court on a number of occasions to manage Cyno, Fish Pak and two other corporations in which he held an interest. The combined effect of being granted leave to continue to act as a director permitted him to be a director of Cyno until 26 November 1999 when he signed a letter of resignation. It therefore follows that at all relevant times up to and including 26 November 1999 Brinkman was a director of Cyno. He was clearly understood by AFMA as being a person of authority and having a capacity to make decisions that bound Cyno by his involvement in the application for a scientific permit. The correspondence (refer earlier) between AFMA and Cyno concerning the issue of the scientific permit bear testament to this;
·Cyno believed at June 2000 when it applied for the trawl permit that Brinkman would be relevant to their application because it was disclosed that the day to day management of the vessel Saxon Onward was undertaken by Cyno and the Onward Fishing Unit Trust of which Brinkman is the sole trustee. If the evidence of Kelleher on the issue of bank accounts is to be believed, Cyno does not have a bank account of its own but the day to day financial management of Cyno is the responsibility of the Onward Fishing Unit Trust of which Brinkman and his former wife are the sole signatories of its bank account;
·Mr Kelleher said that he and Brinkman were the sole owners of the vessel Saxon Onward;
·Mr Kelleher said that he had been “running” Cyno from 1997 but in truth Brinkman throughout that year and until 26 November 1999 was the sole director. Cynthia Brinkman was appointed director and Secretary on 29 March 2000 and Kelleher was appointed director on 19 June 2000 only, a few days before the Cyno trawl application was made;
161. The evidence of Kelleher was unsatisfactory and evasive. Mr Kelleher said that he spoke to Brinkman on the morning that he gave his evidence. He said that Brinkman resided in Sydney but he did not know his address. He said he knew his telephone number. Brinkman was not called to give evidence. Brinkman obviously knew of these proceedings, that they were being heard and his absence was unexplained. An adverse inference should be drawn by the failure of Cyno to call Brinkman to give evidence (Jones v Dunkel (1959) 101 CLR 298). The application to AFMA and the application before the Tribunal substantially sought to distance Cyno from Brinkman. The evidence heard and the documents point to a clear and continuing association between Cyno and Brinkman. If he had given evidence and had submitted himself for cross-examination that association may have been dispelled.
162. The correspondence originating from the solicitors for Cyno and AFMA of 19 January 2001 and between the solicitors for Cyno and the Registrar of the Tribunal on 26 February 2002 permit an inference to be drawn that the person variously referred to as either “our client” or “our clients” is in fact the person Brinkman.
163. In all of the circumstances we are satisfied that there was an enduring relationship between Cyno and Brinkman to the extent that Brinkman exerted influence over the day to day operations of Cyno. Some of the above matters suggests to us that the association between Brinkman and Cyno continues. The prior convictions of Brinkman must in these circumstances be visited upon Cyno. It follows that AFMA was permitted to take account of Brinkman’s convictions in assessing whether Cyno could demonstrate a record of “responsible and co-operative fishing”.. For these reasons and having regard to our earlier findings as to the ranking methodology, we believe that the correct and preferable decision was made in ranking Cyno below Ocean Fresh.
164. The High Court in Australian Broadcasting Tribunal v Bond and Others (1990) 179 CLR 321 and the Federal Court in Western Television Ltd v Australian Broadcasting Tribunal (1986) 12 FCR 414 and New Broadcasting Ltd v Australian Broadcasting Tribunal (1987) 73 ALR 420 found that in deciding whether a Corporation was “fit and proper” to be issued a licence, it was appropriate to consider whether persons associated with that Corporation were “fit and proper”.. We adopt the reasoning giving rise to these decisions in deciding whether Cyno has a record of “responsible and co-operative fishing” having regard to the association between it and Brinkman. We readily acknowledge that the criteria of “record of responsible and co-operative fishing” and our earlier discussion, does not refer to the concept of “fit and proper persons”, but it does envisage whether a proposed licensee possesses a degree of fitness. This would allow AFMA, in its assessment of applicants, to be reassured that in the granting of a licence, persons associated with a corporate applicant are fit to possess such a licence, as may be determined by a history of responsible and co-operative fishing. Of course, a fisheries conviction, would be a relevant factor in the process of making a decision to allocate licences between competing applicants.
CONCLUSION
165. The period of the trawl permit sought by Cyno was three years in total expiring on 31 December 2003. This review was conducted in the middle of October 2003. It was not apparent to us at the time of the review nor subsequently why the applicant had not made any application for expedited hearing. In our view, if we were minded to set aside or vary the decision under review by allowing Cyno to be issued with a trawl permit it would necessarily be to the detriment of one of the two parties joined to these proceedings who, for the preceding two years and 10 months, had incurred the risk and cost of compliance with the permits that were issued to them. We should at this stage reaffirm our earlier findings that this review is not concerned with a review of policy which, for the purposes of this analysis, would require an inquiry into whether it was appropriate to issue two trawl permits only.
166. It appears to us that the applicant understood that unfairness would be caused to the parties joined if we did vary or set aside the decision under review with respect to trawl permits because it submitted:
The appropriate orders for this Tribunal are Orders that would have the effect however they are formulated that Cyno be treated as though it had been granted a trawl permit and that it had fulfilled the conditions of that permit. So whether AFMA determined that they will do nothing further with the fishery, have a further exploratory phase or indeed issue permits for full fishing rights, Cyno should be put in the position where it is regarded as having obtained and fulfilled an exploratory permit.
167. When this submission was discussed we were informed that the Orders sought were to assist Cyno in the event that the exploratory phase was continued beyond 31 December 2003 or in the event that a development fishery was established.
168. We have decided that an Order in these terms would not be appropriate. To uphold the submissions would deem Cyno being ranked equally against Petuna and Ocean Fresh. The effect of this submission by Cyno is to artificially deem Cyno to be ranked either equally with the parties joined [as if the applicant and the parties joined had each been engaged in trawl fishing around Norfolk Island]. Additionally if it eventuates that Petuna and or Ocean Fresh have not complied with the permit conditions, Cyno would be placed in a position of superiority in applications for a development fishery because part of the submission was that we should deem that Cyno had complied with permit conditions. This would certainly not be the correct or preferable decision to be made in the present case not the least being that it had not undertaken any trawling during the exploratory phase.
169. We have concluded for all of the above reasons that the correct or preferable decision is to find that the decision under review, refusing Cyno a trawl permit, but granting a demersal permit should be affirmed.
I certify that the 169 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley, Senior Member
Signed: Holly Weston
Associate
Date/s of Hearing 15 - 17 October 2003
Date of Decision 27 February 2004
Counsel for the Applicant Mr Clelland
Solicitor for the Applicant Simmons Wolfhagen
Counsel for the Respondent Mr Bowen
Solicitor for the Respondent Australian Government Solicitor
Representative for the 1st Party Joined Mr Di Francesco
Solicitor for 1st Party Joined Michell Sillar
Counsel for 2nd Party Joined Mr Davis
Solicitor for 2nd Party Joined Corrs Chambers Westgarth
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