Dover Fisheries Pty Ltd v Minister of Department of Primary Industries & Energy

[1990] FCA 395

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JUDGMENT No. ........ ,... 395 90 /........ ....U, i

NOT FOR CIRCULATION

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IN THE FEDERAL COURT OF AUSTRALIA	)
SOUTH AUSTRALIAN DISTRICT REGISTRY )	1
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GENERAL DIVISION	) No. SG61 of 1990
B E T W E E N : DOVER FISHERIES PTY LIMITED

Applicant

- and -

MINISTER OF DEPARTMENT OF
PRIMARY INDUSTRIES AND

ENERGY

Respondent

REASONS FOR EX TEMPORE JUDGMENT

Coram: von Doussa J.
18 July 1990

The urgent notice of motion now before the Court is one seeking an injunction pending the trial of the issues raised in the application made under the Administrative Decisions 1 Judicial Review) Act 1977. What is sought is an order in terms of paras.2 and 3 of the proposed minutes that were submitted yesterday, and in particular, an injunction restraining the respondent from withdrawing a Certificate as to Condition dated 27 June 1990 which relates to 650 cartons of canned abalone meat, and also an injunction restraining the respondent and its agents etcetera from informing the Japanese authorities or any other person that the respondent may withdraw the Certificate.

On an application for an interlocutory injunction of this kind three conditions at least have to be fulfilled by the
applicant.	First, it is customary to require the applicant
to give an undertaking as to damages.	That undertaking is

offered by the applicant in the usual terms. The second requirement is that the applicant must demonstrate that there is a serious question or questions to be tried raised by the pleadings, or in this instance by the issues canvassed in the application. If that threshold is passed then it is necessary for the court to be satisfied by the applicant that the balance of convenience between the parties and, in a case such as this, the balance of convenience having regard also to the wider interests of the community, are in favour of making the restraining order so as to hold the situation until the true merits of the application have been resolved on a full trial of the issues raised by the application.

We have had a lengthy debate about the issues raised in the application. I am satisfied that the application raises a number of serious questions, that is questions which in a real sense are arguable and which may be decided in the

applicant's favour. I do not propose to spend much time on

these questions as it seems to me that the important issue in this case concerns the balance of convenience. I will identify, however, those matters which I think raise serious questions.

First, there is a question of construction under the
Orders, in particular, under the Export Control (Fish) Orders
as amended (the "Fish Orders") and under the Prescribed Goods

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(General) Orders as amended (the "General Orders") as to

whether the concept of "preparation" in its application to	I
abalone includes shucking of abalone, so that under Order 9 of	l
the Fish Orders there was a failure in this instance to comply
with the conditions that had to be fulfilled before export of	j l.,
the fish could lawfully take place.	L ~
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The second serious question is whether there exists a power in the respondent or its agents to revoke a Certificate as tp Condition once such a certificate is issued under e~ther
s.23 of the Export Control Act 1982 or order 23 of the Fish Orders.
The third matter on which I think there is a serious question to be tried is whether on the facts as they have been made known to the court, there is any basis for revoking the Certificate as to Condition. This question involves, in part, the ascertainment of the meaning of the words "inspection system prescribed" which appear in the terms of
the certificate itself. The question also involves, in part,

the correctness of the respondent's assertion that the particular certificate in the terms in which it was given is either misleading or untrue.

In relation to the first of those questions there is a literal conflict between Orders 9 and 10 of the Fish Orders	1%
and therein lies the root cause of the problem, so it seems to	I - \;
me. Whilst Order 9 requires that all fish for export be prepared in a registered establishment, the Orders elsewhere recognise, or appear to recognise, that abalone may be shucked otherwise than in a registered establishment. That, in turn, gives rise to the argument that shucking is not part of the "preparation" of abalone within the meaning of the Orders.	T. I
The definition of "preparation", which appears in Order 5.1 of the General Orders adds to the difficulties of construction.
It is not appropriate that any attempt be made on an interlocutory hearing of this kind to finally resolve those questions. It is sufficient that I be satisfied that there
are serious questions to be tried.	The fact that we have
been able to debate them for as long as we have, I think	I
demonstrates in a practical way that there are serious questions.
By way of an aside, it seems to me that what is needed is a clear order relating to the shucking of abalone prescribing	! '
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that abalone shall not be shucked otherwise than on a catch	1 -.

boat whilst at sea or in a registered establishment, or some	1 %
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such order to that effect, if that is the intent of the	I L :
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respondent, to make it plain to all people involved in the	1.-
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industry that that and nothing else will be acceptable.
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I turn to the balance of convenience. This is a i :

difficult point raised by the Notice of Motion. Indeed, the

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need to decide this issue places the court in an invidious	I
position. Both sides say that if the other succeeds the actions which will follow would or could have devastating consequences on the very important Australian export market for fish.	1
The applicants say, and H r Cox, who has given evidence today for the respondent and would be in a position also to know, agrees, that Australia enjoys an excellent reputation overseas for seafood exports. The applicants say that that reputation, if a Certificate as to Condition in the circumstances of this case is -cancelled, that is if a Certificate is cancelled in relation to a substantial shipment of canned abalone when the shipment is about to arrive on the shores of Japan and after the shipping documents have been negotiated, perhaps many times, certainly once, would - not could - have a devastating consequence on the industry for both fresh and canned abalone for export to Japan.

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I think it is implicit from the applicant's evidence that the actions proposed by the respondent would, in the

respect of the abalone market and just in respect of that	applicant's view, have wider repercussions than just in
market in Japan.
Mr Cox has given evidence today in opposition to those views on behalf of the respondent. I accept Mr Cox as well qualified in the inspection and compliance fields which he outlined in the witness box today. I have not the slightest doubt that he has a thorough knowledge and understanding of the fish inspection process and all that goes with it in relation to the export trade. I also accept, and I do not think this was really being questioned, that if the Certificate as to Condition were withdrawn or if there were other good reason to question the health and safety of a shipment of food product, the shipment could, as a matter of fact, be turned around and brought back to Australia.

I accept all of that. But in my opinion Mr Cox is not

in a position to give expert evidence as to the effects which that action might have on international trading relationships generally or in relation to the fish industry in Japan in particular. I see no reason to question the evidence that the applicant has put forward as to the likely effect generally of a sudden cancellation of a Certificate as to Condition, once given, on overseas markets.

The applicant's evidence also goes one step further.

Not only does the applicant say there would be adverse

consequences to the general Australian export market for	abalone to Japan and, I think more widely, there would also be
a particular loss and harm to the applicant itself. That loss and harm would be both in relation to the particular shipment and in relation to its own trade with the purchaser in this case. This is not one of those cases where it can be said that if no injunction is given, and at the end of the day, the applicant succeeds on the merits of the application, that the applicant can make good all or most of its loss by damages from the respondent. This is a case where, if the action proposed by the respondent takes place, the particular losses will occur inevitably and directly to the applicant and whatever the outcome of the eventual trial the applicant will be left out of pocket for a large sum of money.
There is another matter to which reference is made in the applicant's papers which is also an important matter going to the balance of convenience at a broader level than the immediate interests of the applicant, although it certainly affects the applicant directly as well. That is how it would be possible at this point in the particular transaction relating to shipment of abalone to untangle the chain of transactions which are likely to have followed the delivery of the shipping documents, including the Certificate as to Condition which fulfilled a condition in a letter of credit.
Those documents are likely to have been negotiated, not just once but many times by now. If, after the export of the goods and negotiation of those papers, suddenly an important
withdrawn, I think it is not improbable that the uncertainty certificate fulfilling a condition of a letter of credit were
thereby created in the integrity and invulnerability of negotiable shipping documents for food emanating from Australia would be put in doubt. This is not by any means the most significant issue in the case, but the difficulties and the consequences of upsetting conditions of a letter of credit once negotiated is not a matter to be put to one side.
Those are the matters which the applicant raises saying that the balance of convenience is in its favour. The respondent on the other hand raises a number of very forceful matters as well. Mr Sainsbury, in his affidavit, explains the purpose and function of the Ex~ort Control Act and the various Orders made under it, particularly in relation to fish. I do not think it can be doubted that the purpose of
the Orders are generally as he has described them. I did not
understand the applicant to question that purpose. It is
asserted by Mr Sainsbury that if a Certificate as to Condition . were issued, and thereafter not revoked if an officer of the Australian Quarantine and Inspection Service of the Department of Primary Industries and Energy became aware that the facts certified were not true or that the Certificate was misleading, knowledge of that fact in overseas countries would adversely affect the reputation and integrity of the Service. In turn - and this is the important part - impairment of the integrity of the service would adversely affect Australia's capacity to obtain export sales of goods in existing markets
which could thereby be reduced or impaired. Knowledge of
such a non-revocation could have wide reaching consequences in the export market for food. The purpose of the Orders, and the EX DO^^ Control Act itself, is to ensure, that fitness for consumption of food exports, and the accuracy of trade descriptions is assured.
The importance to the Australian export industry of the proper administration and fulfilment of those purposes cannot be overstressed. Well known events in the past in relation to certain types of food indicate the extensive damage that can be done to the Australian export market, and the loss of confidence that can be produced in overseas buyers, if food is not fit for consumption and in accordance with the trade description under which export took place.
Let me say immediately that if, on the evidence before the court, there was any basis for thinking that there was a real risk that there was or could be contaminated product in the canned abalone involved in this case, notwithstanding all the matters that have been raised by the applicant, I would have no hesitation in saying that the balance of convenience, in the wider public interest, required the revocation of the Certificate as to Condition.
The particular action which the respondent proposes is to cancel the Certificate as to Condition which has been issued.
That was issued at the same time as the permit to export. It
would be pointless because the goods have actually left the is not proposed to cancel that permit, it is said because it
shore. I simply note that, and make no further comment about the permit.
The basis upon which the respondent says that, in the interests of the integrity of the Service and the export markets generally which are protected by the Service, it should cancel the certificate may be found in paragraph 13 of Mr Sainsbury's affidavit. It is to the effect that the Certificate as signed is misleading or untrue in effect because the goods, being fish (which includes abalone) for export, must be prepared at premises which are a registered establishment under the Act or in a catcher boat. That is the central issue that has to be decided ultimately and it may or may not turn out to be correct.
The particular point of concern is that the abalone (or rather some of the abalone in some of the shipment) were not
shucked at a registered establishment. In particular the
abalone were not shucked at the applicant's premises in South
Australia, or in a catcher boat, but were shucked at premises
which are licensed as fish processing premises in Victoria
under Victorian legislation by employees of the applicant,
which is also a licensed fish processor under the Victorian I-; I

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legislation. It so happened that the Victorian premises were

not also licensed under the ExDOrt Control Act, 'and the Orders
thereunder.

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On the evidence before the court there is no reason to believe that any circumstances in relation to the abalone that were shucked in Victoria have arisen which could effect either the quality or the fitness for consumption of that abalone.

The highest that the respondent's case to the contrary is put appears in para.12 of Mr Sainsbury's affidavit. That paragraph deposes to information obtained from others that the canning of low acid foods, which includes abalone, is a high risk process. The time and temperature relationships involved in the canning are specifically calculated for each commodity and are based on, among other things, knowledge of the bacterial loadings of raw material. Abalone processing times and temperature are - so Mr Sainsbury swears on information - kept at bare safe minimums to avoid deleterious quality changes in the product. Consequently, he says, use of raw materials with higher than expected bacterial loadings could result in a product which is unsafe.

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That statement is to be contrasted with a very detailed description of the canning process given in the applicant's affidavits, and in particular the assertions by the applicant

that the process adopted by it is such that there is no risk of contamination from bacteria or otherwise flowing through to the end product which is the subject of the present proceedings.

In my view, there is no real suggestion raised by the evidence that the particular abalone which was shucked in this

case at licensed premises by a licensed processor in

Victoria - that is, licensed in accordance with the Victorian legislation - could have been infected with bacterial loadings higher than would be expected in any other case and, in particular, in the case of live abalone shucked in the applicant's registered premises in Adelaide.

In my opinion there is simply no evidence of any real

risk to fitness for consumption arising in relation to these
shipments.

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It is a difficult decision to make where the balance of convenience lies in a case like this as there will be many situations where the wider public interest of preserving the safety and integrity of export standards is to be given greater weight than the particular circumstances of individuals who may be adversely affected by the imposition of the wider public interest. But in this case I have come to the conclusion that the balance of convenience falls in favour of the applicant.

If the injunctions are not granted, not only will the applicant suffer particular and significant loss directly, but there will, on the applicant's case, be a deleterious impact, for reasons which it advances and I accept, on the export market.

On the other hand, if I do not accede to the respondent's

argument the risk of damage arises, so the respondent says, in two ways. Firstly, a possibility that the food is not fit for consumption might turn out to be the case. I have already dismissed that possibility as not being open in any real sense on the evidence. Secondly, the integrity of the export inspection system and the integrity of the Australian Quarantine Inspection Service could be adversely affected if it became known that it did not revoke a Certificate as to Condition which it no longer believed to be wholly accurate.

In my view, in the circumstances of this case, there being no risk to fitness for consumption, an order of this Court restraining the Service and its officers from revoking the Certificate as to Condition is not likely to be treated by informed persons overseas as significantly impacting upon the integrity either of the inspection scheme or the Service.

Indeed, I think that there might be a reverse risk that the integrity of the Service could be adversely affected if it were to take the action which it now proposes to take and at trial it turned out that the action was wrongly taken, .

because, for example, the Service misconstrued regulations which were uncertain or so obscure as to be open to conflicting interpretations.

In all the circumstances I think the balance of convenience comes down in favour of the applicant. I think

the injunctions should be granted and should run until trial.	I certify that this and the
12 preceding pages are a
true copy of the Reasons for Judgment of Mr. Justice von Doussa
Associate &; ;CL

Counsel for the applicant	: Mr N.W. Morcombe
Solicitor for the applicant	: Clelands
Counsel for the respondent	: Mr J.J. O'Halloran
Solicitor for the respondent	: Australian Government

Solicitor

Dates of hearing : 17 & 18 July 1990

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