Emanuel Exports Pty Ltd; EMS Rural Exports Pty Ltd and Secretary, Department of Agriculture, Water and the Environment - [2021] AATA 4393

Emanuel Exports Pty Ltd; EMS Rural Exports Pty Ltd and Secretary, Department of Agriculture, Water and the Environment [2021] AATA 4393 (26 November 2021)
Division:GENERAL DIVISION
File Numbers: 2018/5307; 2018/5541
Re:Emanuel Exports Pty Ltd; EMS Rural Exports Pty Ltd
APPLICANTS

AndSecretary, Department of Agriculture, Water and the Environment
RESPONDENT

DECISION
Tribunal:Deputy President Britten-Jones
Senior Member Dr M Evans-Bonner
Date:26 November 2021
Place:Perth

The reviewable decision (application 2018/5307) of the First Assistant Secretary dated 21 August 2018, to cancel the live-stock export licence held by Emanuel Exports Pty Ltd (Emanuel’s Licence), is set aside. The Tribunal substitutes a new decision that Emanuel’s Licence is suspended from 22 June 2018 to 3 December 2021, being seven calendar days from the date of this decision.
The reviewable decision (application 2018/5541) of the First Assistant Secretary dated 5 September 2018, to cancel the live-stock export licence of EMS Rural Exports Pty Ltd (EMS’s Licence), is set aside. The Tribunal substitutes a new decision that EMS’s Licence is suspended from 11 July 2018 to 3 December 2021, being seven calendar days from the date of this decision.
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Deputy President Britten-Jones
CATCHWORDS
AGRICULTURE, WATER AND THE ENVIRONMENT – application 2018/5307 – live export of sheep – cancellation of live-stock export licence – export permits – carriage of sheep by sea – show cause notices issued – integrity and competence – whether Emanuel ceased to be a body corporate of integrity – Emanuel through its managing director, provided incorrect pen air turnover (PAT) data for the vessel MV Awassi Express – whether Emanuel knew PAT values incorrect or should have known they were incorrect – whether Emanuel knew PAT values would affect the acceptable loading capacity of vessel – attribution of the actions of a person to a corporation – vessel data file for heat stress assessment software program (HotStuff) based on incorrect PAT values – whether any person who participates in management or control of the live-stock export business of Emanuel has ceased to be a person of integrity – whether Emanual contravened a condition of its licence – whether Emanuel committed multiple alleged breaches of Australian Standards for the Export of Livestock (ASEL) – alleged breaches of ASEL after licence cancellation at Peel Feedlot – whether sufficient changes to management and control of Emanuel to demonstrate it is a body corporate of integrity – First Reviewable Decision set aside and substituted with a new decision that the licence should be suspended for the period 22 June 2018 to 3 December 2021
AGRICULTURE, WATER AND THE ENVIRONMENT – application 2018/5541 – EMS’s live-stock export licence cancelled due to association with Emanuel – no adverse findings by Secretary against EMS – whether the degree of association with Emanuel warrants cancellation of EMS’s licence – Second Reviewable Decision set aside and substituted with a new decision that the licence should be suspended from 11 July 2018 to 3 December 2021
JURISDICTION – nature and scope of the Tribunal’s review – whether Tribunal’s review should be restricted to the content of the show cause notices – formulation of the statutory questions
APPLICABLE LAW – legislative regime changed before proceedings finalised – whether Tribunal should apply law as at date of Tribunal’s decision or as at the time the reviewable decisions were made – transitional provisions – accrued rights – review concerned with rights and liabilities at anterior date – held that applicable legislation is the version in force at the time of the export licence cancellations
EVIDENCE AND PROCEDURE – applicability of rules of evidence in the Tribunal – former Applicants’ managing director not called as a witness – whether adverse inference should be drawn – rule in Jones v Dunkel –self-incrimination privilege
STATUTORY INTERPRETATION – meaning of “integrity” – meaning of “competence” – use of the present tense – temporal element – “person who participates” held to describe the person participating in the management or control of the business at any time
LEGISLATION
Acts Interpretation Act 1901 (Cth) ss 7(2), 7(2)(c), 7(2)(e)
Administrative Appeals Tribunal Act 1975 (Cth) ss 33(1), 33(1)(c), 39, 43(1), 62(4)
Australian Meat and Live-stock Industry Act 1997 (Cth) ss 7, 8, 8(1), 10, 11, 12, 12(1)(b)(i), 12(1)(c), 16, 17, 17(1), 17(5), 17(5)(a), 23, 23(1), 23(1)(b), 23(1)(b)(i), 23(1)(b)(ii), 23(1)(d), 23(1)(g), 23(3), 23(3)(a), 23(3)(aa), 23(3)(b), 24, 24(1), 24(1)(b), 24(1)(b)(i), 24(1)(c), 24(4), 25A, 51, part 2, part 2A
Australian Meat and Live-stock Industry (Conditions on live-stock export licenses) Order 2012 (Cth) s 3
Australian Meat and Live-stock Industry (Export of Sheep by Sea to Middle East) Order 2018 (Cth) s 9
Australian Meat and Live-stock Industry (Export of Sheep by Sea to Middle East – Northern Winter) Order 2018 (Cth) s 9
Australian Meat and Live-stock Industry (Standards) Order 2005 (Cth) s 3(1)
Corporations Act 2001 (Cth) ss 206F(1), 206F(1)(b)
Export Control Act 1982 (Cth) ss 3, 7
Export Control Act 2020 (Cth)
Export Control (Animals) Order 2004 (Cth)
Export Control (Consequential Amendments and Transitional Provisions) Act 2020 (Cth) s 2, sch 1 s 1, sch 2 s 4, sch 3 s 2, sch 3 s 37(3)
Health Insurance Act 1973 (Cth) ss 23DL, 23DL(1)
CASES
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 2 ALD 1
Commissioner for Corporate Affairs (Vic) v Bracht [1989] VR 821
Costello and Department of Transport [1979] AATA 184; (1979) 2 ALD 934
Drake v Minister for Immigration and Ethnic Affairs [1979] FCA 39; (1979) 2 ALD 60
Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430
Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 266 CLR 250
Grant v Repatriation Commission [1999] FCA 1629; (1997) 57 ALD 1
Gribbles Pathology (Vic) Pty Ltd v Cassidy [2002] FCA 859; (2002) 122 FCR 78
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Merrimack College v KPMG LLP 480 Mass 614 (2018)
Mikasa (NSW) v Festival Stores [1972] HCA 69; (1972) 127 CLR 617
Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421
Mottaghi and Migration Agents Registration Authority [2007] AATA 60; (2007) 98 ALD 424
Muller v Dalgety & Company Ltd [1909] HCA 67; (1909) 9 CLR 693
Murdaca v Australian Securities and Investments Commission [2009] FCAFC 92; (2009) 178 FCR 119
Salomonn and Migration Agents Registration Authority [2013] AATA 146
Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286
Tay v Minister for Immigration and Citizenship [2010] FCAFC 23; (2010) 183 FCR 163
Uelese v Minister for Immigration [2015] HCA 15; (2015) 256 CLR 203
SECONDARY MATERIALS
Australian Standards for the Export of Livestock (version 2.3) 2011, 27 April 2011
Inquiry under section 143 of the Casino Control Act 1992 (NSW) Report dated 1 February 2021, volume 1, pages 337, 338
Macquarie Dictionary (online 26 November 2021)
Oxford English Dictionary (online 26 November 2021)
REASONS FOR DECISION
Deputy President Britten-Jones
Senior Member Dr M Evans-Bonner
26 November 2021
OVERVIEW OF THE FACTS
On 1 August 2017, the MV Awassi Express (Vessel) set sail from Fremantle, Western Australia to the Middle East. The ship was loaded with live sheep being exported by Emanuel Exports Pty Ltd (Emanuel), one of Australia’s largest exporters of live-stock. There were 63,804 sheep on board. Hot and humid conditions greeted the Vessel at its first port of discharge in Qatar where the ship was delayed. The captain of the Vessel described how the “crisis conditions on board” were managed but hundreds of sheep died in a short period from 16 August 2017 onwards. The Vessel continued to Kuwait where 733 carcasses were disposed of. There were further delays. The final port was Dubai, where the last consignment was discharged on 24 August 2017.
A total of 2,400 sheep died during the voyage. Decomposing carcasses accumulated on board the vessel until they could be disposed of on 26 August 2017.
The current affairs television program, “60 Minutes”, obtained video footage from the animal welfare organisation, Animals Australia, showing the conditions on board the Vessel. A report was prepared and broadcast on 8 April 2018. Emanuel’s export licence was suspended by the First Assistant Secretary (who, for convenience, we will refer to as the Secretary) on 22 June 2018 and then cancelled on 21 August 2018. Subsequently, the licence of EMS Rural Exports Pty Ltd (EMS) was suspended by the Secretary on 11 July 2018 and then cancelled on 5 September 2018 based on EMS’s association with Emanuel as a wholly owned subsidiary.
The primary ground for cancellation of Emanuel’s export licence was that Emanuel had ceased to be a body corporate of integrity because Emanuel, through its managing director Mr Graham Daws, had provided misleading information about Pen Air Turnover (PAT) values (also referred to as “PAT scores”) for the Vessel to a consultant, Dr Conrad Stacey, who used that information to create a vessel data file. It was not in dispute that Mr Graham Daws had incorrectly doubled the PAT values back in 2014.
Expert evidence was provided regarding the PAT values. The experts agreed that overstating the PAT values was a serious issue and, regardless of the exact details of the weather, would significantly increase risk (of mortality) at the hottest times of the voyage. The experts also agreed that the voyage exceeded risk limits and that the Vessel was effectively overloaded and required de-stocking to meet the appropriate risk limits.
There is no significant dispute regarding the key events we have set out above in relation to the death of sheep on board the voyage to the Middle East in August 2017 and the earlier events of 2014 when Mr Graham Daws incorrectly doubled the PAT values. However, there is significant dispute with respect to the inferences we should draw from those facts and with respect to how the relevant legislative regime should be interpreted and the penalties, if any, that should be applied.
The Secretary submitted that we, the Tribunal, should affirm the cancellation decision primarily due to the seriousness of the historical events, the ongoing involvement of Mr Graham Daws in Emanuel’s business and the failure by Emanuel to show it has taken sufficient steps to rehabilitate itself. The Applicants submitted that they are bodies corporate of integrity and that their licences should not be cancelled. The Applicants submitted that Mr Graham Daws resigned as managing director and that they have set up new corporate governance procedures designed to ensure compliance with regulations in the live-stock export industry and to ensure animal welfare.
OVERVIEW OF THE LICENCE CANCELLATIONS
Since the company’s incorporation in Western Australia in 1955, Emanuel was carrying on the business of exporting live-stock. From 2 July 1973 until 29 June 2018, Mr Graham Daws was a director of Emanuel. From 1 June 1982 until 29 June 2018, Mr Graham Daws was also the company secretary. His son, Mr Nicholas Daws was appointed as a director of Emanuel on 25 January 2018 and replaced his father as company secretary and Managing Director on 29 June 2018.
Emanuel was the holder of live-stock export licence number L006 (Emanuel’s Licence), issued by the Secretary under Part 2 of the Australian Meat and Live-stock Industry Act 1997 (Cth) (AMLI Act). Subsequent legislative references are to the AMLI Act unless otherwise indicated, although we have sometimes included reference to the AMLI Act where it is required for clarity.
Emanuel’s Licence was for the period of 16 November 2017 to 15 November 2022.
On 21 August 2018, the Secretary cancelled Emanuel’s Licence under s 24(1)(c) (the First Reviewable Decision) because she was satisfied that Emanuel had:
(a)ceased to be a body corporate of integrity;
(b)ceased to be competent to hold a live-stock export licence; and
(c)contravened the condition of its licence that it comply with the Australian Meat and Live-stock Industry (Standards) Order 2005 (Standards Order) requiring it not to export live-stock except in accordance with Australian Standards for the Export of Livestock (Version 2.3) 2011 (ASEL).
On 18 September 2018, Emanuel applied to this Tribunal for a review of the First Reviewable Decision.
Like Emanuel, EMS was carrying on the business of exporting live-stock since it was incorporated in Western Australia in 1988. Mr Graham Daws was a director and the company secretary of EMS from 12 July 1988 until 29 June 2018. His son, Mr Nicholas Daws, was appointed as a director of EMS on 25 January 2018 and replaced his father as company secretary on 29 June 2018.
EMS was the holder of live-stock export licence number L366 (EMS’s Licence) which was also issued by the Secretary under Part 2 of the AMLI Act. EMS is a wholly owned subsidiary of Emanuel.
On 5 September 2018, the Secretary cancelled EMS’s Licence pursuant to s 24(1)(c) (Second Reviewable Decision), based on “the nature and gravity of the findings made against Emanuel” and on “the action taken against Emanuel’s licence”. Further, the Secretary found that “the close and enduring association between Emanuel and EMS” meant that there was a significant risk that Emanuel may seek to frustrate its licence cancellation by relying on EMS’s licence.
On 26 September 2018, EMS applied to this Tribunal for a review of the Second Reviewable Decision.
BACKGROUND FACTS
We will now provide a more detailed outline of the facts leading up to the reviewable decisions to cancel Emanuel’s Licence and EMS’s Licence.
On 5 April 2018, the animal rights organisation, Animals Australia, wrote to the Secretary to make a formal complaint regarding serious breaches of the ASEL. The complaint letter particularised alleged breaches of the ASEL and World Organisation for Animal Health (OIE) animal welfare guidelines during five separate sea voyages of the Vessel (Voyages 23 to 27), with each voyage carrying between 59,000 and 67,000 Australian sheep to the Middle East during the months of May 2017 to November 2017.
The Animals Australia complaint letter attached 320 video files of the alleged breaches as supporting evidence, which were taken on the mobile telephone of one of the crew members of the Vessel during each of the voyages between May 2017 to November 2017. Some of these video files were included in the 60 Minutes report on 8 April 2018.
First Show Cause Notice: findings and response from Emanuel
On 1 May 2018, the Secretary issued a show cause notice to Emanuel under s 23 (First Show Cause Notice). The Secretary stated that she was considering cancelling or suspending Emanuel’s Licence or issuing a reprimand.
The “background” section in the First Show Cause Notice refers to Voyage 25. The Secretary stated that:
The Department … has received information that indicates that Emanuel has breached a number of conditions of its export licence.
This information relates to a voyage of the Awassi Express (V025 LNC 9602) (the Voyage), which loaded its cargo, relevantly more than 63,000 sheep, in Fremantle on 31 July to 1 August 2017, and which completed discharge of that cargo in Dubai, United Arab Emirates on 21 to 24 August 2017. By the end of the Voyage, 2,400 sheep on board the vessel were reported dead.
This represents a mortality rate of 3.76%, which is above the reportable level of 2% prescribed by Australian Standards for the Export of Livestock (Version 2.3) 2011 (ASEL).
The Secretary found reasonable grounds for believing that Emanuel contravened a condition of its export licence (s 23(1)(g)) because of multiple breaches of ASEL standards relating to the onboard management and welfare of live-stock and because the accredited veterinarian and accredited stockperson departed the Vessel prior to its complete discharge.
The Secretary also found reasonable grounds for believing that Emanuel had ceased to be a body corporate of integrity (s 23(1)(b)(i)) because Mr Nicholas Daws, who was at that time the managing director of Emanuel, was aware that the accredited veterinarian and accredited stockperson had left the Vessel early.
Finally, the Secretary found that persons who participate in the management and control of a live-stock export business, namely Mr Graham Daws and Mr Nicholas Daws, had ceased to be persons of integrity (s 23(1)(d)). This was on the basis that, as directors of Emanuel, they knew or ought to have known about the breach of the ASEL concerning the accredited veterinarian and accredited stockperson departing the Vessel early, but they did not disclose the breaches to the Department.
Emanuel responded to the First Show Cause Notice by letter dated 15 May 2018. Emanuel disputed many of the findings of the Secretary, including that the evidence did not support a reasonable inference that Emanuel failed to do everything it could to ensure ASEL standards were met. Emanuel submitted that there were factors outside of its control on Voyage 25, such as extreme weather conditions of heat and humidity. In this preliminary response, Emanuel also disputed that either Mr Graham Daws or Mr Nicholas Daws had any knowledge of the accredited stockperson and the accredited veterinarian departing before the complete discharge of the Vessel.
Emanuel made further submissions and provided further evidence in a letter to the Secretary dated 31 July 2018. Attached to the letter was a report from Professor Shane Maloney and a “substance of opinion” from Dr Ben Madin. In its submissions, Emanuel stated that:
Emanuel does not dispute the catastrophic outcome of Voyage 25. The outcome however was not caused by any systemic failures by Emanuel’s compliance systems.
The outcome was caused by a confluence of events whilst in the Persian Gulf, that is, the onset of the severe weather on 15/16 August 2017, being the rapid rise in extreme temperature and humidity, compounded by the delay in awaiting pilotage of 3 hours and 32 minutes in the port of Hamad, Qatar, the first port of discharge …
Emanuel considered that “Voyage 25 was in fact an aberration”.
Findings of Dr Conrad Stacey
On 1 June 2018, the Secretary issued a notice to Dr Conrad Stacey of Stacey Agnew Pty Ltd. Dr Stacey is a leading authority on the interaction of weather, ventilation and animal tolerance relating to heat stress on live export voyages. He provided information to Emanuel in relation to the Vessel in 2014. The notice required Dr Stacey provide information including calculations and communications regarding the Vessel and Emanuel.
Dr Stacey provided the email correspondence between himself and Mr Graham Daws from June 2014. These emails revealed that Mr Graham Daws provided incorrect PAT values.
Standard 4.12 of the ASEL requires that stocking densities and pen-group weight-range tolerances for live-stock must be in accordance with the heat stress assessment using an agreed heat stress risk assessment (HSRA). In his statutory declaration dated 14 August 2018, Dr Stacey explained that HSRA’s are produced using computer software called “HotStuff”:
… computer software called ‘HotStuff’ … is used to assess the risk of heat stress on live export voyages to the Middle East. HotStuff is the accepted software that produces Heat Stress Risk Assessments (HSRA) for the purpose of S4.12 of the Australian Standards for the Export of Livestock (Version 2.3) 2011 (ASEL). The Department of Agriculture and Water Resources (Department) has been supervising the live export industry using outputs from HotStuff (Version 4), since July 2011.
Users of HotStuff import a vessel file into the software, create a new voyage, and enter in their voyage plan, including the dates of voyage, ports of departure and arrival, and for each line of livestock: the type and breed, weight, fat score, acclimatisation zone, and number of animals of each line in each deck space and the area occupied. The HotStuff output is the HSRA that is submitted by the exporter in support of the export permit application for that voyage and consignment. If the mortality risk exceeds the industry-nominated 2% probability of 5% mortality for any of the lines of livestock, the exporter can make adjustments to the voyage plan, for example by reducing the number of animals proposed to be loaded.

The vessel file includes the PAT values for each deck of the vessel where the live-stock are kept during the voyage. Dr Stacey explained that the PAT values for a deck determine the number of stock that can safely be carried on that deck in the hottest Middle Eastern weather. Further, he explained that PAT values are calculated by dividing the air volume flow (m³/hour) supplied to a deck space by the pen area (m²) in that deck space.
Following the receipt of this information from Dr Stacey, another show cause notice was issued to Emanuel on 22 June 2018 (Second Show Cause Notice).
Second Show Cause Notice: findings and response from Emanuel
In the Second Show Cause Notice, the Secretary relied upon the inflation of the PAT values by Mr Graham Daws, which had the effect of increasing the stocking density on the Vessel and exceeding the acceptable mortality risk. The Secretary explained:
… Mr Graham Daws provided incorrect PAT scores to Mr Conrad Stacey on 27 and 30 June 2014 and that they were incorrect by an error factor ranging from 1.997166 to 2.005627.
According to Mr Conrad Stacey, the inflation of the PAT scores provided by Mr Graham Daws, if forming the basis of HotStuff calculations, would have had the practical result of increasing wet bulb temperatures by 1 or 2 degrees Celsius on Awassi voyages, in turn exceeding the acceptable mortality risk. Mr Conrad Stacey considers that had the correct PAT scores been used, stocking density would have been reduced by up to 50% in some areas of the Awassi.
The Department has subsequently received HSRA plans generated by Mr Conrad Stacey using the incorrect PAT scores provided by Emanuel and the correct PAT scores calculated by Mr Conrad Stacey for Voyage 025 of the Awassi. Those HSRA plans indicate that a total of 65,050 livestock were loaded onto the vessel for Voyage 025, resulting in 8 decks exceeding the acceptable mortality risk. They also indicate that in order for all decks to meet the acceptable mortality risk, only 60,816 livestock should have been loaded onto the vessel. This means that 4,234 additional livestock were loaded.
Emanuel has submitted 9 HSRA plans with incorrect PAT scores to the Secretary in connection with an application for an export permit for the Awassi Express. Each of those applications for an export permit were granted.
The Secretary found reasonable grounds for believing that Emanuel was not a body corporate of integrity and was not competent to hold an export licence:
For these reasons, I have reasonable grounds for believing that Emanuel knew or ought to have known that the PAT scores provided to Stacey Agnew and the Secretary for the purpose of it obtaining export permits were incorrect.
On that basis, I have reasonable grounds for believing that Emanuel has ceased to be: (a) a body corporate of integrity; and (b) competent to hold the licence, and that paragraphs 23(1)(b)(i) and (ii) of the Act therefore apply.
The Secretary made a further finding in the Second Show Cause Notice with respect to Mr Graham Daws:
There is evidence to suggest that Mr Graham Daws knew or ought to have known that the PAT figures he provided to Mr Conrad Stacey and the Secretary for the purposes of obtaining export permits were incorrect. This resulted in the Secretary approving export permits for Emanuel to export livestock in a manner that exceeded acceptable stocking density and mortality risk.
On that basis, I have reasonable grounds for believing that Mr Graham Daws, a person who participates in the management or control of Emanuel, has ceased to be a person of integrity and that paragraph 23(1)(d) of the Act therefore applies.
Noting that the First Show Cause Notice had already been issued to Emanuel, the Secretary concluded that it was necessary to immediately suspend Emanuel’s Licence:
The provision of incorrect PAT scores that affect the calculation of stocking density, and therefore the level of acceptable mortality risk, jeopardises the interests of the industry as a whole, insofar as it impacts upon the protection of the health and welfare of animals, and the maintenance of the industry, and its integrity, as an international trade. Given my view that there are reasonable grounds to believe that Emanuel has provided incorrect PAT scores in circumstances where it knew or ought to have known that they were incorrect, I cannot be confident that any representations by Emanuel in relation to PAT scores and HSRAs are accurate.
On that basis, it is necessary or desirable in the interests of the industry to immediately suspend Emanuel’s licence under subsection 23(4) of the Act.
Emanuel responded to the Second Show Cause Notice in a letter dated 6 July 2018 and submitted that the initial suspension of its licence should be immediately revoked because there was “no basis to find that Emanuel or Mr Graham Daws has ceased to be a body corporate or person of integrity under subsection 23(1)(b) or (d) of the Act or that Emanuel has ceased to be competent to hold a licence under subsection 23(1)(b) of the Act”. Emanuel’s submissions included that:
… calculation of PAT scores was not a matter that was within the ordinary business of Emanuel or its employees. As a result, there was no expertise or business system within Emanuel in relation to the determination of the Awassi PATs.
The provision of the Awassi PATs to Stacey Agnew was a one-off task undertaken by Graham Daws to assist a longstanding client for the purpose of creating an initial vessel file for Hotstuff. In providing the PATs, Graham Daws relied in part, in good faith, on information obtained from the company responsible for installing ventilation on the Awassi, his knowledge of industry practice and the advice of the consultant with expertise in ship design who had a detailed knowledge of the Awassi, having been involved in its conversion to a livestock carrier.
Importantly, there is no evidence that, in submitting subsequent HSRA plans to the Secretary as part of subsequent applications for export permits for the Awassi, management or employees of Emanuel responsible for submission of HSRA plans knew or should have known that the PAT data for the Awassi vessel file in Hotstuff was incorrect. In circumstances where there had been no material changes to the design of the Awassi, it was not unreasonable for Emanuel’s management and employees not to review the original data file each time a new application for an export permit was granted.
In the letter dated 6 July 2018, Emanuel further submitted that, “Graham Daws formed an honest and reasonable belief that accepted industry practice was to add together air supply and exhaust fans, which would lead to original PAT-scores being multiplied by a factor of 2”. Additionally, it was submitted, “based on his limited knowledge of PAT scores and his understanding of accepted industry practice, Mr Graham Daws provided what he understood to be the correct Awassi PAT scores” and “made an honest and reasonable but mistaken attempt to calculate the Awassi PAT scores”. Emanuel’s letter also stated:
The provision by Emanuel to Mr Conrad Stacey of PAT scores on behalf of the owners of the Awassi was a one-off occurrence. It was not a function ordinarily undertaken by Emanuel in the course of its business. As a result, there were no processes in place at Emanuel in June 2014 to confirm the methodology used to determine PAT scores or the accuracy of PAT scores.
Emanuel further submitted that:
For the reasons addressed in this Response, Emanuel stands by its corporate integrity and competence and the integrity of its former managing director, Mr Graham Daws. For the reasons set out [above], Emanuel strongly denies that it knowingly provided incorrect information to the [Department] or that the [Department] cannot be confident of the accuracy of representations made by Emanuel in relation to export permit applications or HSRA is in particular.
Emanuel stated that there was no significant risk of future breaches because the Department was at that point requiring independent audits of PAT values for all ships, and because Emanuel would in future be employing a compliance officer experienced in the live-stock industry to ensure regulatory compliance.
Finally, Emanuel made further submissions to reiterate that Mr Nicholas Daws was not advised and was not aware of the fact that the accredited veterinarian and accredited stockperson left the Vessel early, and that there were no other communications or reports to alert him as such. It was submitted that he was not aware of this until shortly before the release of the 60 Minutes report on 8 April 2018.
EMS Show Cause Notice
The Secretary issued a show cause notice to EMS on 11 July 2018 (EMS Show Cause Notice) based on the matters in the show cause notices issued to Emanuel, because EMS was a wholly owned subsidiary of Emanuel and Mr Nicholas Daws was sole director and secretary of both Emanuel and EMS. The Secretary stated that:
In light of the matters set out in the two show cause notices against Emanuel referred to above, and the immediate suspension of Emanuel’s licence upon issuance of the second SCN [show cause notice], I find that it is necessary or desirable in the interests of the industry to immediately suspend EMS’s licence under section 23(4) of the Act, given (i) Emanuel’s total ownership and control of EMS, (ii) the integrity concerns relating to Emanuel and Mr Nicholas Daws and (iii) the risk of the suspension against Emanuel being frustrated by its reliance on EMS’s licence.
EMS responded to the EMS Show Cause Notice by a letter dated 23 July 2018. EMS submitted that there was no reasonable basis for the Secretary to continue the suspension of EMS’s Licence and requested the Secretary immediately revoke the suspension. EMS did not dispute its corporate relationship with Emanuel but disputed the integrity concerns relating to Emanuel and Mr Nicholas Daws. EMS referred to the resignation of Mr Graham Daws as a director of Emanuel and EMS, stating that, “the management of Emanuel and EMS has been undergoing a substantial review and restructure”. EMS submitted that there was no evidence of “ongoing or repeated disregard by EMS for its regulatory obligations”.
Emanuel informed the Secretary on 9 August 2018 of the changes it proposed to make to its corporate governance, compliance, and risk mitigation measures. Emanuel advised that Mr Graham Daws had resigned as a director in late June and that Mr Nicholas Daws had been appointed as the sole director of both Emanuel and EMS. The letter advised, amongst other things, that Mr Nicholas Daws had resolved to appoint two new independent directors to the board of Emanuel. The letter advised that Emanuel was in the process of appointing “a Compliance and Corporate Governance/Company Secretary with both industry and regulatory experience”.
On 14 August 2018, the Secretary notified Emanuel of alleged ASEL breaches for Voyages 24, 25 and 26 and provided a copy of the statutory declaration from Dr Stacey dated
14 August 2018.
Emanuel responded by letter dated 20 August 2018. It stated that the alleged breaches on Voyages 24 and 26 were not relevant to the grounds on which the Secretary formed the belief for the First Show Cause Notice, and for that reason only Voyage 25 was relevant. The letter further denied breaches and submitted that the breaches were minor and were caused by factors beyond Emanuel’s control, such as extreme weather conditions. The letter also made a further submission that, with respect to Mr Graham Daws providing incorrect PAT values to Dr Stacey, there was “confusion and a general lack of understanding as to how PAT scores ought to be calculated”.
REVIEWABLE DECISIONS
In a decision dated 21 August 2018, being the First Reviewable Decision, the Secretary decided to cancel Emanuel’s Licence on the basis that she was satisfied that:
a. Emanuel has ceased to be a body corporate of integrity because it has provided misleading PAT values to the Department in circumstances where: (i) Emanuel knew they were incorrect or should have known they were incorrect, and (ii) Emanuel was aware that the PAT values would affect the acceptable loading capacity of the Awassi; and
b. Emanuel has ceased to be competent to hold a live-stock export licence because Emanuel has not been able to provide correct information concerning PAT values and/or committed multiple contraventions of ASEL.
The Secretary’s reasons for deciding to cancel Emanuel’s Licence included the following:
The conduct of Emanuel in providing misleading PAT values is very serious in that it had the potential to significantly impact the welfare of the live-stock being exported by Emanuel. I note, and do not dispute, the evidence of Professor Shane Maloney that by his estimates, the conditions experienced on Voyage 25 were hotter than anything in the historical record. However, I place more weight on the fact that had the correct PAT values been provided, significantly fewer sheep could have been loaded, resulting in a lower stocking density. I am satisfied that this may have resulted in an exacerbation of the effect of the severe weather events confronted by Voyage 25. This undermines the effect of the regulatory scheme, which has as one of its central components, the welfare of live-stock.
I am satisfied that Emanuel’s actions in providing incorrect PAT values jeopardises the interests of the industry as a whole as it impacts upon the protection of the health and welfare of animals, and the maintenance of the industry, and its integrity, as an export industry.
In determining the appropriate action to take under s 24 of the AMLI Act, I have had regard to Emanuel’s indication that it will appoint a compliance officer to ensure the provision of correct PAT values in the future, that Mr Graham Daws is no longer a director of Emanuel, and that Emanuel proposes to appoint two independent directors. However, I afford limited weight to this consideration in circumstances where, as found above, I am satisfied that Emanuel’s actions in providing incorrect PAT values was not limited to the actions of Mr Graham Daws.
I am not satisfied that the structural changes proposed by Emanuel mean that Emanuel is a body corporate of integrity and/or competent to hold the licence. Emanuel’s willingness to provide incorrect PAT values when it knew or should have known that they were incorrect shows its willingness to disregard or manipulate the regulatory regime in order to advance its commercial interests or obtain a commercial benefit. …
I note that the negative health and welfare outcomes of Voyage 25 resulted in significant public criticism of the live export trade to the Middle-East as a whole and brought the industry into disrepute. Furthermore, I find that it is in the interests of the industry that exporters comply with the licence conditions, including ASEL, and, particularly the proper and honest provision of information to the Department, including PAT values. As noted above, the PAT value is an essential component of the HSRA that is submitted by the exporter in support of the export permit application for a voyage and consignment and is relevant to the calculation of the mortality risk (noting that industry-nominated standard is a 2 per cent probability of 5 per cent mortality for any of the lines of live-stock).
The Secretary was not, however, satisfied that Mr Nicholas Daws had ceased to be a person of integrity.
The Secretary also stated that:
… whilst it is clear that Mr Graham Daws was a person in management or control of Emanuel at the time of his relevant conduct, I am not satisfied on the evidence before me that Mr Graham Daws is a person who currently participates in the management and control of Emanuel the purpose of s 23(1)(d) of the AMLI Act.
On 5 September 2018, the Secretary made the Second Reviewable Decision to cancel EMS’s Licence pursuant to s 24(1)(c). The Secretary was satisfied that EMS was an associate of Emanuel, and given this association, the Secretary concluded:
There is a significant risk, in light of the close and enduring connection between Emanuel and EMS, that Emanuel may seek to frustrate its licence cancellation by relying on EMS’s licence. I am satisfied that cancellation of EMS’s licence would be consistent with the interests of industry and would promote compliance with the regulatory regime – particularly those aspects directed to the observance of licence conditions and the protection of animal health and welfare.
As noted above, on 18 September 2018, Emanuel lodged an application for review of the First Reviewable Decision, and on 26 September 2018, EMS lodged an application for review of the Second Reviewable Decision in this Tribunal.
ISSUES
In the section titled, “jurisdiction” below, we have considered the scope of our jurisdiction in detail, and specifically the questions raised by the statute for consideration (Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286 (Shi); Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 266 CLR 250 (Frugtniet)).
These “questions”, or in other words the issues that require our determination, are whether there are reasonable grounds for believing that:
(a)Emanuel has ceased to be a body corporate of integrity (s 23(1)(b)(i)) (Issue 1);
(b)a person who participates in the management or control of Emanuel (that is, Mr Graham Daws) has ceased to be a person of integrity (s 23(1)(d)) (Issue 2);
(c)Emanuel contravened a condition of Emanuel’s Licence (s 23(1)(g)) (Issue 3);
(d)Emanuel has ceased to be competent to hold Emanuel’s Licence (s 23(1)(b)(ii)) (Issue 4);
(e)if the answer to one or more of Issues 1 through to 4 is in the affirmative, whether Emanuel has taken sufficient steps to rehabilitate itself, that is, to address the concerns or issues that led to the integrity, competence and non-compliance concerns (Issue 5); and
(f)depending on our findings with respect to Issue 5, whether the power in s 24(1) should be exercised, and if so, how. This involves a consideration of whether: the licence should be cancelled; the licence should be suspended for a period; or whether Emanuel should be reprimanded (Issue 6).
With respect to EMS, the issue that requires determination is whether the degree of association of Emanuel and EMS warranted the cancellation of EMS’s Licence and the regulatory action that should be applied to this licence following the Tribunal’s findings on Issues 5 and 6 (Issue 7).
THE HEARING AND THE EVIDENCE
The hearing of these applications took place from Monday 22 February 2021 to Friday 5 March 2021, with closing submissions initially commencing on Wednesday 17 March 2021.
The hearing was originally scheduled for an eight-day hearing in approximately mid to late April 2020 but was vacated due to difficulties associated with the COVID-19 pandemic. The hearing was then scheduled for an eight-day hearing from mid to late November 2020 but was vacated by consent after the Tribunal granted leave to the Secretary to file additional evidence.
Written closing submissions were received and further oral closing submissions were heard by the Tribunal from Wednesday 5 May 2021 to Friday 7 May 2021.
During the closing submissions we noted that the AMLI Act was amended by the Export Control (Consequential Amendments and Transitional Provisions) Act 2020 (Cth) (Transitional Act) with effect from 28 March 2021. We requested submissions from the parties regarding the law that we should apply in deciding the applications. The parties requested time to make written submissions on this issue and we formally directed that they do so. We received written submissions on the applicable law from the parties in May 2021.
THE WITNESSES WHO GAVE EVIDENCE AT THE HEARING
Witnesses called by the Applicants
The Applicants called the following witnesses who provided witness statements and gave evidence at the hearing.
Mr Nicholas Daws

Mr Nicholas Daws is the managing director of both Emanuel and EMS. He commenced working for Emanuel and EMS in 1997 as a live-stock clerk. Prior to taking over the role of managing director from his father, Mr Graham Daws, Mr Nicholas Daws was general manager and finance manager of both entities.
Mr Ben Stanton
Mr Ben Stanton is the commercial manager of Emanuel (and previously the export manager). He commenced working for Emanuel during his school holidays from 1996 to 1999 and commenced fulltime employment with Emanuel in 2002. He is the son of Mr Mike Stanton, who was previously a director of Emanuel.
In 2008, Mr Ben Stanton became the export manager of Emanuel, and, at the time of the hearing, he was the commercial manager. He reported to Mr Graham Daws until Mr Daws resigned as managing director of the companies in June 2018.
Mr John Edwards
Mr John Edwards is the export services manager, and shared live-stock manager of Emanuel. He commenced employment with Emanuel in May 2016 as export services manager. Until the time that Emanuel’s Licence was cancelled, this role involved ensuring compliance with the Exporter Supply Chain Assurance System (ESCAS), which is a method of tracing live-stock through the supply chain (which we explain further below in the “Legislative framework” section). Following the licence cancellation, his role became broader, including by sharing the role of live-stock manager with Mr Nicholas Daws, Dr Ludeman and Mr Ben Stanton. His role now involves ensuring that animals are compliant with state and federal regulations when they enter the Peel Feedlot (a feedlot of which Emanuel is the registered operator). Mr Edwards has also been a board member of the Australian Live Exporters Council since 2003, where he represents the sheep export industry (as opposed to one specific company, such as Emanuel).
Dr Robert Macpherson
Dr Robert Macpherson is an Australian government accredited veterinarian, whose company, RA Veterinary Services, is engaged by Rural Export and Trading (WA) Pty Ltd (RETWA) at the Peel Feedlot. RETWA is a subsidiary of the Kuwait Livestock Trading Company (KLTT), which owns the Peel Feedlot. Since approximately 2003, he has provided sheep export inspection services. Dr Macpherson undertook inspections at the Peel Feedlot.
Dr Holly Ludeman
Dr Holly Ludeman is the corporate governance and compliance officer for Diverse Management Group Pty Ltd, of which Emanuel and EMS are subsidiary companies. Dr Ludeman commenced her employment on 10 December 2018 after Emanuel’s Licence and EMS’s Licence had been cancelled.
Dr Ben Madin
Dr Ben Madin is the managing director Ausvet Pty Ltd. His expert reports were admitted into evidence. Dr Madin attended the Peel Feedlot on three occasions in December 2020 for the purpose of preparing his second report.
Witnesses called by the Secretary
The Secretary called the following witnesses who both provided sworn statements and gave evidence at the hearing.
Dr Karen Dowd
Dr Karen Dowd has been the senior veterinary officer for the West Region, Exports and Veterinary Services Division of the Department since 2019. As part of this role, Dr Dowd undertakes inspections of animals for export for the purpose of providing a health certificate. Dr Dowd undertook inspections at the Peel Feedlot.
Ms Cristina Hutchison
Ms Cristina Hutchison is the Assistant Secretary, live animal exports, of the Secretary.
Implications of Mr Graham Daws not being called to give evidence
Allegations regarding the conduct of Mr Graham Daws were relevant to the statutory questions before us, including whether he ceased to be a person of integrity and whether he is a person who continues to participate in the control or management of Emanuel or EMS. This raises the issue of what we should make of the absence of Mr Graham Daws as a witness. In this regard, the Applicants’ raised a “question of jeopardy” (transcript of closing submissions/36), or in other words, a claim of self-incrimination privilege. The parties also made submissions regarding whether the rule in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 should be applied. We will now consider these issues.
With respect to the self-incrimination privilege claim, we observe that the proper course would be that when the person is in the witness box, they can refuse to answer any questions that may tend to incriminate them (see s 62(4) of the AAT Act). We now turn to the rule in Jones v Dunkel.
In summary, the rule is that the failure of a party in a civil action to give evidence under oath may give rise to an adverse inference that the evidence they would have given would not assist their case. The rule was stated by Kitto J, at 308, as follows:
... any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put a true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence.
The rule was more particularly described by Menzies J at 312:
In my opinion a proper direction in the circumstances should have made three things clear: (i) that the absence of the defendant as a witness cannot be used to make up any deficiency in evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from the facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.
The parties made similar submissions that the extent of any inference that could be drawn would be that any evidence that Mr Graham Daws would have given, had he been called as a witness, would not have assisted the Applicants’ case.
We may have been assisted in making findings of fact if Mr Graham Daws had been called as a witness because of his past role as managing director at the time of the events leading to the cancellation of the licences. It was certainly open to the Applicants to call Mr Graham Daws, as their former managing director, and to do so may have assisted them in contradicting aspects of the Secretary’s case. For example, Mr Graham Daws would have been able to give evidence relating to issues such as whether he continued to control or to manage the Applicants’ business after his resignation as managing director.
However, the Applicants were able to address some of the issues in these proceedings through leading other evidence. For example, several of the Applicants’ witnesses gave evidence confirming that Mr Nicholas Daws had entirely taken over from Mr Graham Daws as managing director, and that Mr Graham Daws no longer had any role in the management of either company.
Further, with respect to the provision of incorrect PAT values, there is other evidence before the Tribunal, including email correspondence between Mr Graham Daws and Dr Stacey from which we have been able to infer what Mr Graham Daws knew or ought to have known concerning the incorrect PAT values.
Whilst we may have been assisted in making findings of fact if Mr Graham Daws was called to give evidence, we do not place much weight on his failure to give evidence. In these circumstances, it is appropriate for us to simply draw an inference that nothing Mr Graham Daws would have said in evidence would have assisted the Applicants’ case.
LEGISLATIVE FRAMEWORK
Applicable law
As previously noted, the AMLI Act was amended by the Transitional Act with effect from 28 March 2021.
The Transitional Act repealed the Export Control Act 1982 (Cth) (Export Control Act) and Parts 2 and 2A of the AMLI Act were replaced with new export licence provisions contained in the Export Control Act 2020 (Cth).
The parties agreed, in their written submissions on the applicable law, that the questions for determination in this review remain unchanged by the repeal of Parts 2 and 2A, and that the Tribunal should determine the correct or preferable decision under s 24(1) of the AMLI Act which was the applicable provision at the time of the Secretary’s decisions. That is, the applicable legislation is the version of the AMLI Act in force at the time of the licence cancellations.
We agree, and note s 7(2) of the Acts Interpretation Act 1901 (Cth) (Interpretation Act) which provides, in part:
(2)If an Act, or an instrument under an Act, repeals or amends an Act (the affected Act) or a part of an Act, then the repeal or amendment does not: …
(c)affect any right, privilege, obligation or liability acquired, accrued or incurred under the affected Act or part; or …
(e)affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment.
Any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the affected Act or part had not been repealed or amended.
Relevantly, sch 3 s 2 of the Transitional Act provides: “This Schedule does not limit the effect of section 7 of the Acts Interpretation Act 1901 as it applies in relation to the repeals and amendments made by this Act”.
We find that the Applicants have an accrued right (Re Costello and Department of Transport [1979] AATA 184; (1979) 2 ALD 934, 939–945; Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430) to have the Tribunal review the Secretary’s decisions made under s 24(4) of the AMLI Act. Subsections 7(2)(c) and 7(2)(e) of the Interpretation Act preserve the Applicants’ accrued right for the Tribunal to review the Secretary’s decisions, namely the First Reviewable Decision and the Second Reviewable Decision.
Further, sch 3 s 37(3) of the Transitional Act is also consistent with the preservation of accrued rights, pursuant to ss 7(2)(c) and 7(2)(e) of the Interpretation Act (notwithstanding the fact that sch 3 s 37(3) concerns an export licence suspension). Schedule 3 s 37(3) states:
(3)If:
(a)the export licence had been suspended under subsection 23(5) or paragraph 24(1)(e) or (f) of old Part 2 of the AMLI Act; and
(b)the suspension was in force immediately before the commencement time;
then the export licence is taken to be suspended after the commencement time under subsection 205(1) of the new Export Control Act.
Note 1:The suspension may be revoked (see section 209 of the new Export Control Act).
Note 2:Applications may be made to the Administrative Appeals Tribunal for review of decisions made in relation to an export licence under section 23 or subsection 24(1) of old Part 2 of the AMLI Act (see subsections 23(8) and 24(4) of old Part 2 of the AMLI Act and section 7 of the Acts Interpretation Act 1901).
Therefore, we accept the contention of the parties that the applicable law for the current applications was the law in force as at the time that the Secretary made the First Reviewable Decision and the Second Reviewable Decision.
Prohibition on the export of live-stock
Section 7 of the Export Control Act provides for the prohibition by regulations of the export of “prescribed goods” which includes live-stock.
Section 3 of the Export Control Act provides that “regulations includes orders”.
The export of live-stock is subject to the following conditions in s 1A.01 of the Export Control (Animals) Order 2004 (Cth) (Animals Order):
The export of live‑stock is prohibited unless the following conditions are complied with:
(a)the exporter holds a live‑stock export licence under the AMLI Act;
(b)the Secretary has approved an ESCAS, unless an ESCAS is not required because of subsection 1A.19(4);
(c)an NOI for the export has been approved under section 1A.25A, the approval is in force and, if the exporter was required to vary the NOI under section 1A.26, the NOI has been varied as required;
(d)if the export is by sea—the live‑stock are held before export, and assembled for export, in registered premises; …
(f)if the live‑stock are held before export, and assembled for export, in registered premises—the exporter has given the operator of the registered premises information as required by section 1A.28;
(g)an approved arrangement for the exporter is in effect in relation to the live‑stock;
(h)the live‑stock have been prepared in accordance with the approved arrangement and any conditions on the approval of the arrangement;
(ha)the exporter is the holder of an approved export program in force under Subdivision A of Division 1A.7 that applies to some or all of the export activities of the exporter in relation to the live‑stock;
(i)an export permit for the export by the exporter is in force;
(j)the live‑stock are exported to the place, and by the means, specified in the export permit;
(k)the exporter complies with the approved arrangement, the approved ESCAS and any condition on the approval of either;
(l)the exporter complies with any condition of the export permit.
In summary, the Animals Order prohibits the export of live-stock unless:
(a)the exporter holds a live-stock export licence;
(b)an export permit for the export by the exporter is in force;
(c)there is an approved arrangement in effect; and
(d)the exporter complies with any condition of the export permit.
Live-stock export licence
The AMLI Act establishes the licensing regime for the grant of an export licence.
Section 11 concerns the application process for an export licence. It provides:
(1)An application for an export licence must be made in accordance with the regulations.
(2)An applicant for an export licence must pay the prescribed fee in respect of the application:
(a)when the application is lodged; or
(b)at any later time permitted under the regulations.
(3)If a person has given the Secretary information or a document in connection with an application for an export licence and, before the application is granted or refused:
(a)a change happens so that the information, or anything stated in the document, ceases to be correct in relation to a matter; or
(b)the person becomes aware that the information, or anything stated in the document, is incorrect in relation to a matter;
the person must, within 7 days after the change happens or the person becomes so aware, as the case may be, give the Secretary a written statement setting out the correct particulars of the matter.
(4)A person who fails to comply with subsection (3) commits an offence punishable, on conviction, by imprisonment for not longer than 12 months.
(Notes omitted.)
It is the Secretary who grants the export licence under s 10.
Section 12 sets out the requirements for the grant of an export licence:
(1)The Secretary must not grant an export licence unless satisfied that:
(a)if the applicant is an individual, the applicant is:
(i)     a person of integrity; and
(ii)    competent to hold the licence; and
(iii)   a person of sound financial standing; and
(b)if the applicant is a body corporate, the applicant is:
(i)     a body corporate of integrity; and
(ii)    competent to hold the licence; and
(iii)   a body corporate of sound financial standing; and
(c)each person who participates or would participate, in the management or control of the applicant’s meat or live-stock export business or proposed meat or live-stock export business is a person of integrity; and
(d)the applicant is, and is likely to continue to be, able to comply with the conditions to which the licence, if granted, would be subject; and
(e)the granting of the licence to the applicant would not, for any other reason, be contrary to the interests of the industry.
(2)The regulations may prescribe the matters to which the Secretary is to have regard for the purpose of satisfying himself or herself about the matters referred to in subsection (1).
(3)Without limiting subsection (2), for the purpose of satisfying himself or herself about the matters referred to in subsection (1) in relation to an application for a live-stock export licence, the Secretary may have regard to the extent to which the applicant has complied with any requirements of or under the Export Control Act 1982 , including any conditions or restrictions:
(a)to which a licence or permission under that Act, to export prescribed goods that are live-stock, was subject; or
(b)that otherwise relate to the export of prescribed goods that are live-stock.
Section 8 provides that, in the circumstances described in that section, a person is taken to be a person who participates, or would participate, in the management or control of a meat or live-stock business. Section 8(1) provides:
(1)For the purposes of this Part, a person is taken to be a person who participates, or who would participate, in the management or control of the meat or live-stock export business, or proposed meat or live-stock export business, of another person if:
(a)the first-mentioned person has or would have authority to direct the operations, or an important or substantial part of the operations, of the business or proposed business; or
(b)the first-mentioned person has or would have authority to direct a person who has or would have authority of the kind referred to in paragraph (a) in the exercise of that authority or proposed authority.
The Secretary may issue a show cause notice to the holder of an export licence in the circumstances set out in s 23. The relevant parts of s 23 are as follows:
(1)If the Secretary has reasonable grounds for believing, in relation to an export licence, that: …
(b)if the licence is held by a body corporate, the holder of the licence has ceased to be:
(i)    a body corporate of integrity; or
(ii)    competent to hold the licence; or
(iii)   a body corporate of sound financial standing; or …
(d)a person who participates in the management or control of the meat or live-stock export business of the holder of the licence has ceased to be a person of integrity; or
(e)information or a document given to the Secretary in connection with the application for the licence was false or misleading and, if the information or document has not been false or misleading, the licence would not have been granted; or
(ea)if the licence is a licence to export live-stock and the holder was required to make a declaration of a kind mentioned in subsection 7(3B) of the Export Control Act 1982 as a condition subject to which a licence or permission to export under that Act was granted—the holder made any such declaration falsely; or …
(g)the holder of the licence has contravened a condition of the licence;
the Secretary may give a written notice under this section to the holder of the licence.
(1A)Without limiting subsection (2), for the purpose of determining whether a circumstance mentioned in subsection (1) has occurred in relation to a live-stock export licence, the Secretary may have regard to the extent to which the holder has complied with any requirements of or under the Export Control Act 1982, including any conditions or restrictions:
(a)to which a licence or permission under that Act, to export prescribed goods that are live-stock, was subject; or
(b)that otherwise relate to the export of prescribed goods that are live-stock.
(2)The regulations may prescribe the matters to which the Secretary is to have regard in determining whether a circumstance referred to in paragraph (1)(a), (b), (c) or (d) has occurred.
(2A)If paragraph 25A(2)(b) applies, the Secretary may give a written notice to the holder of the licence mentioned in that paragraph.
(3)A show cause notice must:
(a)if subsection (1) applies—state the grounds on which the Secretary formed the belief because of which the notice is given; and
(aa)if subsection (2A) applies—state the grounds on which the Secretary gives the notice; and
(b)include a statement to the effect that the holder of the relevant licence may, within 14 days after the day on which the notice is given to the holder, give the Secretary a written statement showing cause why the licence should not be dealt with under subsection 24(1). …
(Emphasis added.)

The powers of the Secretary after issuing the show cause notice are set out in s 24. Relevantly, s 24(1) provides:
(1)If the Secretary:
(a)has given a show cause notice to the holder of an export licence; and
(b)after considering any written statement by the holder of the licence given within the period mentioned in paragraph 23(3)(b), is satisfied:
(i) if subsection 23(1) applies—of any of the matters mentioned in subsection 23(1); or
(ii) if subsection 23(2A) applies—that he or she should take action in relation to the licence under any of paragraphs (c) to (g) of this subsection;
the Secretary may, by written notice given to the holder of the licence:
(c)cancel the licence; or
(d)if the licence is about to expire—determine that the licence not be renewed; or
(e)if the licence is not already suspended—suspend the licence for the period specified in the notice; or
(f)if the licence is already suspended—further suspend the licence for the period specified in the notice; or
(g)reprimand the holder of the licence.
The Secretary also has powers in relation to the licensing of associates. Section 25A provides:
(1)This section applies if:
(a)the Secretary:
(i)     refuses to grant a live-stock export licence to a person; or
(ii)    determines that a person’s live-stock export licence not be renewed; or
(iii)   suspends, further suspends or cancels a person’s live-stock export licence; and
(b)another person is an associate of the person.
(2)If this section applies, the Secretary may do either or both of the following, on any one or more occasions:
(a)if the other person is or becomes an applicant for the grant of a live-stock export licence—refuse to grant the licence;
(b)if the other person is or becomes the holder of a live-stock export licence—give a written notice under subsection 23(2A) to the other person.
(3)To avoid doubt, the Secretary may do as mentioned in subsection (2) whether or not the other person is still an associate at the time the Secretary does so.
Section 24(4) provides that decisions of the Secretary made under s 24(1) can be appealed to the Tribunal.
We discuss the interpretation of ss 23 and 24 in more detail below under the headings “Jurisdiction” at [153]–[161] and, “The interpretation of section 23 of the AMLI Act”.
The Standards Order, the Conditions Order, the Animals Order and the ASEL
The Secretary may make orders to be complied with by holders of an export licence and may give written directions under s 17(1) of the AMLI Act.
Pursuant to s 17(1), the Secretary has made the following Orders:
(a)the Standards Order; and
(b)Australian Meat and Live-stock Industry (Conditions on live-stock export licenses) Order 2012 (Cth) (Conditions Order).
The holder of a licence must comply with the orders and directions made under s 17(1). This is stated in s 17(5):
(5)An export licence is subject to the condition that the holder of the licence must comply with:
(a)orders made under this section; and
(b)any directions given from time to time to the holder under this section.
Section 3(1) of the Standards Order provides that the holder of a live-stock export licence must not export live-stock except in accordance with the relevant ASEL.
The version of the ASEL that is applicable to these proceedings is version 2.3, April 2011. Broadly speaking, the ASEL sets out the following six standards for the export of live-stock from farm through to sea or air voyage:
Standard 1 Sourcing and on-farm preparation of livestock …
Standard 2 Land transport of livestock …
Standard 3 Management of livestock in registered premises …
Standard 4 Vessel preparation and loading …
Standard 5 Onboard management of livestock …
Standard 6 Air transport of livestock …
Section 3 of the Conditions Order provides that the holder of a live-stock export licence must comply with any relevant provisions of the Animals Order.
Approved arrangements
Under s 1A.02 of the Animals Order, an exporter who wants to export live-stock must also apply to the Secretary for approval of arrangements for the preparation of live-stock.
The Secretary may approve the arrangement if the Secretary is satisfied of the matters set out in s 1A.05(1) of the Animals Order, which provides:
(1)The Secretary may, by written notice given to the applicant, approve the arrangement for the preparation of live‑stock for export if the Secretary is satisfied that:
(a)the arrangement covers each step of the preparation; and
(b)acting in accordance with the arrangement will ensure compliance with:
(i)     this Order; and
(ii)    the Australian Standards for the Export of Live‑stock; and
(iii) conditions to which the applicant’s live‑stock export licence under the AMLI Act covering the proposed export is subject or will be, or is likely to be, subject if the applicant is granted such a licence; and
(iv)   importing country requirements for the live‑stock; and
(c)preparation of live‑stock for export in accordance with the arrangement will provide a sound basis for giving an export permit and health certificate for the live‑stock; and
(e)the applicant will act in accordance with the arrangement.
Notice of intention
Section 1A.24(1) of the Animals Order requires that an exporter must give the Secretary a Notice of Intention to Export (NOI) before the proposed export.
Relevantly, s 1A.25A(2) sets out the approval criteria for an NOI:
(2)The criteria for approval of an NOI for a proposed export of live‑stock are:
(a)whether the proposed export complies with the following:
(i) the requirements of this Order;
(ii) the requirements of the AMLI Act and regulations under that Act;
(iii) orders and directions under the AMLI Act;
(iv) the conditions of the exporter’s live‑stock export licence under the AMLI Act; and
(b)whether the international transport arrangements for the live‑stock are adequate for their health and welfare.
Under s 1A.26 the exporter must notify the Secretary if circumstances change after an NOI is given.
Exporter Supply Chain Assurance System (ESCAS)
Generally, an ESCAS must be given to the Secretary 10 working days before the first export to which the ESCAS will apply (s 1A.20(1)(b) of the Animals Order).
Section 1A.19(2) of the Animals Order specifies that the ESCAS must contain details about the supply chain of the live-stock.
Heat stress risk assessment (HSRA)
ASEL Standard 4.12 provides in part that:
Stocking densities and pen-group weight-range tolerances for species of livestock must be in accordance with specifications in Appendix 4.1 and heat stress assessment using an agreed heat stress risk assessment unless a variation is required and approved by the relevant government agency…
In an Export Advisory Notice 2012 – 08 dated 8 May 2012 (2012 EA Notice), exporters were advised that they were required to submit an HSRA to the Department with their NOI and consignment risk management plan (CRMP).
In summary, the 2012 EA Notice set out instructions which required exporters to use a software program called “HotStuff Version 4” to calculate the HSRA, which was to be attached to the NOI/CRMP with the “vessel data file” (or to organise the vessel owner to submit the vessel data file directly to the Department). The instructions also stated that the exporter was required to “ensure the HSRA risk output is less than a 2% risk of a 5% mortality”.
Export permit and health certificate
Section 1A.01(i) of the Animals Order prohibits the export of live-stock unless an export permit for the export by the exporter is in force. An exporter may apply to the Secretary for an export permit and must also give a declaration which addresses the criteria set out in s 1A.29(3) of the Animals Order:
(3)The declaration by the exporter must state that:
(a)the exporter has complied with:
(i)     any requirements under any other Commonwealth law, or the law of a State or Territory, that the exporter must comply with; and
(ii)    the Australian Standards for the Export of Live‑stock; and
(iii)   the approved ESCAS that applies to the export; and
(iv)   all importing country requirements relating to the consignment that the exporter must comply with; and
(b)the live‑stock have been prepared for export by the exporter in accordance with the approved arrangement for the exporter; and
(ba)an accredited veterinarian has undertaken the activities in the approved export program held by the exporter under Subdivision A of Division 1A.7 that apply in relation to the preparation of the live‑stock; and
(c)no relevant circumstances have changed in relation to the approved ESCAS or approved NOI that applies to the export.
The Secretary may grant an export permit if the various conditions set out in ss 1A.30(1) and 1A.30(2) are satisfied. These sections provide:
(1)The Secretary may grant an export permit for live‑stock if:
(aa)an NOI for the export of the live‑stock has been approved under section 1A.25A and the approval is in force; and
(a)the exporter has applied for the permit under section 1A.29; and
(b)the exporter holds a live‑stock export licence under the AMLI Act; and
(c)if another Commonwealth law requires the exporter to hold an authorisation (whatever it is called) for the export—the exporter holds such an authorisation; and
(d)the exporter has made the declaration mentioned in subsection 7(3C) of the Export Control Act 1982 (about compliance with conditions of such a live‑stock export licence under the AMLI Act and other requirements under that Act about export of live‑stock); and
(e)if the relevant importing country requirements include a requirement for a health certificate—a health certificate for the live‑stock has been issued or will be issued when the permit is granted; and
(f)the Secretary is satisfied that:
(i)     the live‑stock have been prepared in accordance with the approved arrangement and any conditions on the approval of the arrangement; and
(ia)    an accredited veterinarian has undertaken the activities in the approved export program held by the exporter under Subdivision A of Division 1A.7 that apply in relation to the preparation of the live‑stock; and
(ii)     the exporter has complied with importing country requirements in relation to the live‑stock; and
(iii)     no relevant circumstances have changed since the live‑stock were inspected under section 1A.33 for the purposes of the issue of the health certificate (if required); and
(iv)    the Australian Standards for the Export of Live‑stock have been, and will continue to be, complied with in relation to the live‑stock; and
(v)     the exporter has complied, and is in a position to comply, with the approved ESCAS that applies to the export, unless an ESCAS is not required because of subsection 1A.19(4); and
(g)the live‑stock are fit enough to undertake the proposed export voyage without any significant impairment of their health; and
(h)the travel arrangements for the live‑stock are adequate for their health and welfare.
Note:Paragraph (1)(a) has the effect that the Secretary may grant an export permit only if the exporter has made an application for the permit that includes the declaration required by paragraph 1A.29(2)(b).
(2)In deciding whether to grant an export permit to an exporter, the Secretary may take into account whether the exporter has complied with:
(a)any conditions to which a live‑stock export licence under the AMLI Act was subject; and
(b)any requirements under that Act that otherwise relate to the export of live‑stock.
Registered premises
Prior to their export, live-stock may be held and assembled at registered premises. The Animals Order provides that these premises must be registered and sets out requirements for an application for registration in s 2.04.
Section 2.04(3)(d) of the Animals Order refers to an application for registration having to include a copy of an operations manual. Section 2.05 sets out the requirements for the operations manual.
Section 2.10 of the Animals Order sets out specified conditions for the registration of premises. It provides in part:
(1)The registration of premises is subject to the following conditions:
(a)that the operator must not accept an animal for holding and assembling for export except in accordance with the registration;
(b)that, subject to subsection (2), operations at the premises, and the maintenance of the premises, are carried out in accordance with the approved operations manual for the premises; …
JURISDICTION
The Applicants submitted that the scope of the Tribunal’s review should be restricted to the content of the show cause notices.
Generally speaking, a show cause notice must state the grounds on which the Secretary formed the belief that resulted in the notice being given (see ss 23(3)(a) and 23(3)(aa)). The export licence holder is then given an opportunity to respond in the form of a written statement (s 23(3)(b)). After giving the show cause notice and considering the written statement of the export licence holder, the Secretary may, by written notice to the licence holder take action, including to cancel or suspend the licence, or to issue a reprimand (s 24(1)).
The Applicants submitted that the effect of these provisions is that the scope of the Tribunal’s review is limited to the grounds raised in the Secretary’s show cause notice.

The core of the Applicants’ submission is that the requirement to afford procedural fairness under the AMLI Act, through the process of the Secretary giving a show cause notice, and the consideration of the written statement from the export licence holder by the Secretary, is a precondition to the Secretary’s exercise of power under s 24(1). The Applicants also submitted that the Tribunal is subject to those same preconditions that were determined by the Secretary in the show cause notice.
If this submission were to be accepted, the Tribunal would have no jurisdiction to consider allegations that were not contained in the grounds in the show cause notices. The Tribunal could not then, for example, consider subsequent allegations of non-compliance with s 23(1) against the Applicants, such as the allegations concerning the Peel Feedlot, except to the extent that those alleged events were relevant to the grounds originally stated in the show cause notice.
In the Applicants’ Amended Closing Submissions, the Applicants summarised their submissions about the Tribunal’s jurisdiction as follows:
39.Since the Tribunal’s power is subject to the same constraints as the Respondent’s power, the ultimate question before the Tribunal, in determining whether the Respondent’s decision to cancel Emanuel Exports’ licence was the correct or preferable decision, is whether the Tribunal is satisfied of one or more of the matters mentioned in s 23(1) of the AMLI Act on the grounds set out in the show cause notices issued by the Respondent to Emanuel Exports.
40.In considering whether it is satisfied of one or more of the matters mentioned in s 23(1) on the grounds alleged in the show cause notices the Tribunal may, if relevant, have regard to evidence of events which have occurred since the Respondent’s decision, where that evidence is relevant to those grounds. But to consider allegations and evidence concerning grounds not raised in the show cause notices for being satisfied of one or more of the matters mentioned in s 23(1) of the AMLI Act would be to change the nature of the decision under review and would result in jurisdictional error by the Tribunal.
(Original emphasis.)
These submissions were further articulated by counsel for the Applicants at the hearing (transcript/20):
… coming back to what the High Court said in the Frugtniet case what is before the tribunal for determination cannot be any wider than what was before the respondent under section 24. That means that the grounds given in the original notices to show cause are the touchstone of determining what the issues are in these proceedings. You can’t, as the respondent seeks to do, come along years later and start bolting on more and more issues and more and more reasons why they consider that the - one or both of the applicants has ceased to be a body corporate of integrity and competence.
You have to go back to the original grounds given in the original show cause notice and ask is the material relevant to determining that question. It’s not a free willy inquiry into whether or not today a licence can be given to Emanuel Exports. The focus here is - the assumption is it is a licence-holder, it is a body corporate of integrity and competence. The question is whether it ceased to be based on the evidence before the Tribunal. Ceased on the grounds given in 2018, not on some other grounds given in 2021 or 2020.
Counsel for the Secretary submitted that the scope of the Tribunal’s jurisdiction is not confined by the grounds or the reasoning contained within the show cause notices or the facts or evidence referred to in those notices. She submitted that this does not mean, however, that there are no limits to the Tribunal’s jurisdiction. This was more particularly explained in the Secretary’s Amended Closing Submissions as follows:
(a)The Tribunal is required to step into the shoes of the Secretary, and exercise afresh the powers of the Respondent under s 24 of the AMLI Act on the basis of the material before the Tribunal;
(b)The statutory questions raised by s 24 of the AMLI Act for decision by the Respondent determine what considerations the Tribunal must or must not take into account in reviewing those decisions;
(c)The Tribunal must review the actual decisions made by the Respondent namely the decisions to cancel the Applicants’ licences, and is not constrained by the reasoning of the Respondent when making its decision to cancel the Applicants’ licences;
(d)The Tribunal must itself determine the substantive issues raised by the material and evidence before it. The obligation upon the Tribunal to consider relevant material and evidence is not dependent upon whether an applicant for review argues that those matters are, or are not, relevant as part of its case.
We will now discuss the relevant case law concerning the nature and scope of the Tribunal’s review.
In Drake v Minister for Immigration and Ethnic Affairs [1979] FCA 39; (1979) 2 ALD 60 (Drake No 1), Bowen CJ and Deane J provided guidance as to the question for determination that is before the Tribunal. Their Honours clarified that the Tribunal is subject to the same general constraints as the decision-maker, stating, at 68–69, that:
The question for the determination of the Tribunal is not whether the decision which the decision maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal. The Act offers little general guidance on the criteria and rules which the Tribunal is to apply in the performance of its task of reviewing administrative decisions which are subjected to its surveillance. Even in a case such as the present where the legislation under which the relevant decision was made fails to specify the particular criteria or considerations which are relevant to the decision, the Tribunal is not, however, at large. In its proceedings, it is obliged to act judicially, that is to say, with judicial fairness and detachment. In its review of an administrative decision, it is subject to the general constraints to which the administrative officer whose decision is under review was subject, namely, that the relevant power must not be exercised for a purpose other than that for which it exists …, that regard must be had to the relevant considerations, and that matters ‘absolutely apart from the matters which by law ought to be taken into consideration’ must be ignored ….
(Emphasis added.)

In conclusion, we are not satisfied that there has been more recent conduct by Emanuel with respect to the Peel Feedlot which suggests a continuing lack of integrity or competence. The evidence does not establish that Emanuel is not compliant with Standard 3 of the ASEL, and with the Manual. We note that Emanuel follows the Fremantle Model, which is considered by experts such as Dr Madin to be best practice in the industry, as well as the 2016 EA Notice.
The evidence does not establish that the animals in the Peel Feedlot were not inspected daily. Indeed, in his report dated 3 February 2021, Dr Madin found that “all mobs were inspected daily by stock persons”.
As we have stated above, we prefer the evidence of Dr Macpherson and Dr Madin to the evidence of Dr Dowd with respect to the 17 October 2020 inspection. We are not of the opinion that Dr Ludeman only finding out about the result of the 17 October 2020 inspection from Dr Dowd on 26 October 2020 was a breach of any compliance procedures in the Manual. This was because Dr Macpherson correctly believed that there were no serious issues identified with the consignment, and that any ASEL rejects would be drafted out before loading, as he agreed with Dr Dowd. However, Dr Macpherson’s surprise at how quickly the ocular issues had worsened from the previous day may indicate that the compliance system was not working as effectively as it should have been, and that Dr Ludeman should have been informed earlier than she was.
We accept the opinion of Dr Madin, who determined at his inspections in December 2020, that the Peel Feedlot is a well-run operation that is compliant with the ASEL standards. The only non-compliance with ASEL s 3.4(1) identified by Dr Madin during his visit in December 2020 was a result of it being practically impossible to comply with that section. That is because live-stock could not be loaded again after being unloaded due to biosecurity and animal welfare concerns.
Further, although the manure build-up does appear contrary to item 26 of the Daily Inspection Procedure in the Manual, it is a very minor breach. Indeed, it was initially recorded in the 20 December 2019 audit inspection as an “observation”. Additionally, the expert evidence of Dr Madin, which we accept, was that there were no adverse animal welfare outcomes from the manure build-up.
Changes made by Emanuel to its governance and compliance processes to address issues of integrity and competence
As we noted above, the Applicants submitted that they have implemented changes to their governance systems and their procedures to ensure legislative compliance. The Secretary, on the other hand, submitted that these systems are inadequate and that we should not be satisfied that the Applicants are competent to hold an export licence.
The first step taken by Emanuel to review its regulatory compliance system was to appoint Dr Ludeman as corporate governance and compliance officer of Diverse Management Group Pty Ltd, of which Emanuel and EMS are subsidiary companies, in December 2018. Dr Ludeman gave evidence that she reviewed and updated the companies’ compliance systems when she commenced her employment and formalised a new framework to measure compliance with the ASEL and to measure animal welfare. She implemented procedures of internal audits, management review meetings, operations meetings, and corrective action reports required under the approved arrangement. Dr Ludeman delivered an audit report in October 2019 that made recommendations for improving Emanuel’s compliance systems. Since then, Emanuel has taken steps to implement those recommendations. Dr Ludeman gave evidence that Emanuel and EMS adopted corporate governance policies on 10 March 2020, which included an animal welfare policy and an independent Advisory Council Charter. Dr Ludeman was cross-examined extensively as to the operation and effectiveness of the new compliance framework, particularly with respect to the Peel Feedlot. Our impression of Dr Ludeman was that she was highly competent, well versed in regulatory and compliance issues and that she had undertaken a thorough and extensive review and implementation of improvements in the compliance mechanisms of the group of companies to which the Applicants belong.
Frequency of meetings and incident reporting
Notwithstanding the extensive improvements in the compliance mechanisms, it appeared to us from Dr Ludeman’s evidence that, at times, the new compliance framework was not working as effectively as it could. For example, monthly management operations meetings did not always occur, but according to Dr Ludeman, there were “a lot of unofficial meetings” (transcript/621) and monthly meetings were not operationally realistic. Dr Ludeman agreed that between March 2020 to October 2020 there were no regular meetings to discuss open corrective action requests (transcript/622) but said that there were regular discussions about corrective actions and incidents (transcript/622–623). She disagreed that the failure to hold regular management meetings was because of a lack of commitment to the process of holding those meetings (transcript/627). She also disagreed that the operations and governance manual was being made less prescriptive to reduce meetings and internal reporting requirements (transcript/623).
A further example that the compliance system was not working as effectively as it should have been, was that Dr Ludeman only became aware of the high prevalence of eye problems and lameness at the Peel Feedlot (that were noted by Dr Macpherson and Dr Dowd during their inspection on 17 October 2020) during a telephone conversation with Dr Dowd about an unrelated matter on 26 October 2020 (transcript/655–656). As we noted above in our findings regarding the 17 October 2020 inspection, we are not of the opinion that Dr Ludeman only finding out about the result of the 17 October 2020 inspection from Dr Dowd on 26 October 2020 was a breach of any compliance procedures in the operations and governance manual, however it suggests that the compliance system was not working as effectively as it should have been.
We note that in October 2019, Dr Ludeman identified in her internal audit that there had been inadequate recording of management meetings. Dr Ludeman was cross-examined about the lack of formal meetings, despite the stated intention to hold them. Her evidence was that the management team was small, being made up of three or four people all in the office together, and that while formalised minuting of meetings may not have taken place, there were regular conversations and discussions (transcript/615). She said that “unofficial” meetings were held at which they discussed incident reporting and corrective action reporting. She accepted that from a compliance perspective, the meetings were not adequate because the planned monthly meetings from March 2020 did not take place. We do, however, note the minutes of a management meeting dated 11 March 2020, which recorded that meetings over the last 12 months had been “valuable” but that “meeting dates between operational activities can be difficult and monthly has not been practical”.
The Secretary also referred to only one corrective action report being prepared between

1 February 2020 and 28 October 2020, and no incident reports concerning the Peel Feedlot between 22 May 2020 and 26 October 2020 (transcript/136). We are, however, satisfied from Dr Ludeman’s evidence that she was adequately monitoring corrective action reports and discussing them at informal management meetings. Several corrective action reports were left open on the register to ensure they were reviewed and updated when the new ASEL version 3 commenced (transcript/615). We accept Dr Ludeman’s evidence that there were no incident reports between May and September 2020 due to the moratorium on the export of live-stock to the Middle East, which meant that large numbers of animals were not arriving in the Peel Feedlot until September through to October 2020. We accept her evidence that when animals were received into the Feedlot at this time, there were daily reports that would trigger any incidents that needed to be discussed (transcript/670–671). We are not satisfied that there was any failure in reporting and in addressing incidents as they arose.
We find that the failure to hold formal management meetings, identified as being non-compliant in Dr Ludeman’s audit report of 20 June 2018, has not been adequately addressed. However, we accept that, because of the regular informal discussions and monitoring by Dr Ludeman, the failure to hold and document formal meetings did not compromise the health and welfare of live-stock. Accordingly, we give this factor minimal weight when considering whether the Applicants are competent to hold an export licence. We also note that although formal meetings were not held as frequently as Mr Nicholas Daws and Dr Ludeman had intended in October 2019, that does not support a finding that the Applicants do not have adequate governance and compliance systems in place and that they are not competent to hold an export licence.
Independent Directors vs Advisory Council
Mr Nicholas Daws had initially contemplated the appointment of two independent directors to the Emanuel board. This was communicated to the Secretary in a letter dated 9 August 2018 from the Applicants’ legal representatives.
However, as Mr Nicholas Daws explained in his witness statement dated 16 March 2020, he changed his mind about the appointment of the two independent directors, and instead decided that an alternative structure of an independent Advisory Council would best serve Emanuel’s interests. In his statement dated 16 March 2020, Mr Nicholas Daws explained:
8.I have carefully considered and reviewed my plan to appoint one to two independent directors to the board of Emanuel.
9.Given the current size and nature of Emanuel’s activities, I have, in consultation with Dr Holly Ludeman (Holly), considered alternative structures to best serve Emanuel’s interests.
10.Following completion of the Australian Institute of Company Directors (AICD) course by Holly, we further discussed the role of independent directors and whether Emanuel could achieve its objectives through the appointment of an Independent Advisory Council (Advisory Council) instead of expanding the board of directors at this stage of the company’s development.
11.As Emanuel is effectively transitioning from a family business which has good financial positioning and internal skills, I considered that the best interests of the company could be served for the time being by appointing an Advisory Council to provide effective independent advice to, and oversight of, the Group[*] and to support me in my role as Managing Director in regards to governance, risk and strategy and animal welfare.
12.The Advisory Council is to comprise members with a mix of expertise in corporate governance, risk, and animal welfare agribusiness and/or livestock production. Identified by me as necessary to support the Group. This is the skill set identified by me as necessary to support the Group’s objectives.
[*] the ‘Group’ is the group of companies controlled by Mr Nicholas Daws under Diverse Management Group Pty Ltd including Emanuel and EMS – see statement of Mr Nicholas Daws dated 16 March 2020 at [4]]
Mr Nicholas Daws gave similar evidence during cross-examination (transcript/254). He also confirmed that prior to his discussion with Dr Ludeman after she completed the AICD course, he thought that the only option available was to appoint independent directors (transcript/253 and 255).
The evidence of Mr Nicholas Daws is consistent with Dr Ludeman’s evidence. In her statement dated 13 March 2020, Dr Ludeman gave the following evidence:
20.Following my completion of the Australian Institute of Company Directors (AICD) course in January 2020, I reviewed possible alternate structures in light of internal concerns and Emanuel’s size and activities and its business and management requirements. I had discussions with Nicholas Daws and recommended that an Independent Advisory Council (Advisory Council) be established as an alternative to the appointment of independent directors.
21.The purpose of the Advisory Council is to provide independent advice to the Group relating to livestock agribusiness operational activities. Specifically, the Advisory Council is to:
(a)provide the Board with non-binding informed guidance on the Groups strategic direction and activities; and
(b)support the Group’s working groups and/or committees with specific subject matter expertise.
In cross-examination, counsel for the Respondent took Mr Nicholas Daws and Dr Ludeman to management meeting minutes dated 8 January 2020. The following minute appeared under the agenda item, “Director and board structure options – Legal advice”:
Discussion Points:
- Seek legal advice on how best to set up board to meet shareholders needs and concerns about multiple family interests while still ensuring independent input and oversight to strengthen compliance and company position.
Both Mr Nicholas Daws (transcript/255–256) and Dr Ludeman (transcript/632–633) denied the proposition that it was Mr Graham Daws who had expressed concerns about the appointment of independent directors. In fact, Dr Ludeman stated several times during cross-examination that she believed that she was referring to Mr Nicholas Daws’ concerns and that she was not aware of any concerns expressed by Mr Graham Daws. She understood Mr Nicholas Daws as being concerned about appointing people he could trust because he had observed other dysfunctional boards, and as being concerned about balancing independent advice with the interests of what was originally a family business whilst maintaining the success of the business (transcript/632–633).
The Secretary submitted that there was inconsistency between the evidence of Mr Nicholas Daws and Dr Ludeman regarding why the proposal to appoint independent directors was abandoned. However, as is evident from the above discussion, we find there is no inconsistency in their evidence. The Secretary further submitted in written closing submissions that we should draw the following inference:
339.… The reasonable inference, given the conflict and in the absence of evidence from Graham Daws, is that the proposal to appoint independent directors was not favoured by Graham Daws as he feared it would dilute his control and influence over the management and operational activities of Emanuel Exports and that the resulting decision not to pursue this change in governance was a direct result of Graham Daws’ views.
Such an inference is, in our view, not supported by the evidence. We find Mr Nicholas Daws and Dr Ludeman to be credible and honest witnesses. We accept the evidence of Mr Nicholas Daws and Dr Ludeman that the option of an independent Advisory Board was considered and decided after Dr Ludeman attended the AICD course and not in response to any concerns of Mr Graham Daws regarding the appointment of independent directors. We accept that any concerns were those of Mr Nicholas Daws. We therefore refuse to draw the requested inference.
Dr Ludeman developed the independent Advisory Council Charter. In her statement dated 13 March 2020, Dr Ludeman summarised the role of the Advisory Council as follows:
22.The Advisory Council is to consist of between three and five members and will comprise the following skill sets:
(a)regulatory and/or corporate governance expertise;
(b)animal ethics and/or animal welfare expertise; and
(c)agribusiness and or livestock production.
23.The Advisory Council is required to meet at least 4 times a year and additional meetings may be requested to address a specific issue or to assist a working group. Importantly, out of session recommendations may be requested by the Managing Director, Company Secretary or Compliance Officer in response to an internal or regulatory incident.
24.To progress this alternative structure, I developed the Independent Advisory Council Charter …
25.The responsibilities of the Advisory Council are set out in Section 4 of the Advisory Council Charter at Annexure ‘HL6’. These responsibilities largely centre on best practice governance, risk management and regulatory compliance.
The Advisory Council Charter was adopted on 10 March 2020 when it was approved by Mr Nicholas Daws. It provides for the appointment of a minimum of three independent members (and no more than five) including one member with regulatory and corporate governance experience and one member with animal welfare expertise. As was referred to in Dr Ludeman’s evidence above, the purpose of the Advisory Council includes to “provide the Board of Directors with non-binding, but informed guidance on the Group’s strategic direction and activities”. The Charter further provides that “the Advisory Council will meet at least four times per year”.
The Advisory Council became operational from the date of the appointment of its first member and chair on 31 August 2020. Two other members were appointed to the Advisory Council on 24 November 2020 and 22 January 2021. The Advisory Council first met on 3 December 2020. The Secretary raised concerns about the time that it took to establish any independent oversight, given that Mr Nicholas Daws, through his legal representatives, had initially contemplated the appointment of the two independent directors in August 2018. The Secretary submitted that the steps taken to appoint members to the Advisory Council were “too little, too late to demonstrate a meaningful change to Emanuel Exports’ governance and competency”.
The reasons for the delay in the appointment of independent directors in 2019 are not entirely clear to us. However, we note the resolution in the management meeting minutes of 8 January 2020 that legal advice was being sought about the issue of appointing the two additional directors, which may have resulted in some delays. We agree with Mr Nicholas Daws’ answer during cross-examination that, “you don’t rush governance, it takes time” (transcript/260). We are not of the view that there was an unreasonable delay in establishing the Advisory Council from the time the Charter was adopted on 10 March 2020 until the Advisory Council became operational on 31 August 2020. We also note that in late March 2020, the COVID-19 pandemic resulted in disruptions, including lockdowns in Western Australia in April 2020. The pandemic also impacted on Emanuel when there was an outbreak of COVID-19 on the Al Kuwait vessel, which was due to depart in May 2020. Due to that outbreak Emanuel had to apply for an exemption from the Northern Summer Order to undertake the voyage in June. We accept Dr Ludeman’s evidence that this COVID-19 outbreak caused “a significant disruption in business and led to the exemption application and exemption voyage” (transcript/615).
The Secretary submitted that we should draw an inference that the Advisory Council is “far weaker (and essentially ineffective) compared to the initial proposal of independent directors”. The Secretary refers to concessions in the evidence of Mr Nicholas Daws and Dr Ludeman during cross-examination that an Advisory Council is a form of oversight that is “not as strong” as the appointment of independent directors. We think this submission is somewhat unfair to the Applicants. This is firstly because, as was correctly submitted by the Applicants, the Applicants were under no obligation under the regulatory regime to appoint independent directors or to establish an Advisory Council. Secondly, there is no evidence to suggest that Mr Nicholas Daws is anything but competent to direct the management of the operations of the Applicants. We therefore are not concerned that the Advisory Council’s advice is “non-binding” in circumstances where Mr Nicholas Daws is entirely competent. We also note that the members who have been appointed to the Advisory Council, particularly Dr Terry Enright and Dr Andrew Way, are eminently qualified for their roles and have extensive industry experience. In her witness statement dated 29 January 2021, Dr Ludeman described the Advisory Council members and their expertise:
311.Three appointments have been made to Emanuel’s Advisory Council.
312.Terry Enright was engaged as the Chairman of the Advisory Council on 31 August 2020. He has agribusiness expertise and is a former livestock and grain producer. He was chairman of the Grains Research and Development Corporation (GRDC) and chairman of the Australian Livestock Export Corporation (Livecorp), both national research corporations. In 2008 he was awarded an Honorary Doctorate of Science in Agriculture by the University of Western Australia.
313.Mr Enright is experienced in live export markets particularly Asia and the Middle East and worked in Kuwait during Eid in 2013-2015 assisting management of Australian sheep in that supply chain. He participated in International Agricultural Research projects through his role with the Crawford Fund and was a member of the team to review the Australian Centre for Agricultural Research (ACIAR) for the Australian Government. He maintains a number of industry related positions. …
315.Andrew Way was appointed as a member of the Advisory Council on 24 November 2020. He holds a Bachelor of Veterinary Science from the University of Melbourne, obtained in 2002 and completed a Master of Applied Epidemiology in human health from the Australian National University in 2010. He is an accredited veterinarian under the Accreditation Program for Australian Veterinarians and also holds accreditation as an AQIS Accredited Export Veterinarian. Andrew has worked in small business, corporate agriculture, State and Commonwealth government roles.
316.Emma Walczak, recommended by the Chair, was appointed to the Advisory Council on 22 January 2021. She is a lawyer specialising in contracts.

We find that the establishment of the Advisory Council demonstrates that Emanuel takes seriously its animal welfare and corporate governance obligations. It supports our finding that the Applicants have rehabilitated and are now bodies corporate of integrity.
In conclusion, we find that that the Applicants have taken appropriate steps to address the issues of competence and integrity.
ISSUE 6: THE EXERCISE OF DISCRETION BY THE TRIBUNAL
Our findings with respect to Emanuel’s breaches of its licence and lack of competency and integrity enliven the discretion to cancel or suspend the licence or to impose a reprimand. Emanuel’s conduct, through its previous managing director, showed bad faith and a serious lack of integrity. Emanuel was aware that providing false PAT values endangered the welfare of the live-stock. Emanuel preferred its own interests over animal welfare interests and proceeded to provide false information to Dr Stacey and to the Department so that more live-stock could be loaded on to the Vessel. The experts agreed that over-stating the PAT values was a serious issue which significantly increased the risk of harm to live-stock. This increase in the risk of harm eventuated when 2,400 live-stock died on Voyage 25 to the Middle East in 2017.
Emanuel did not challenge the finding that Mr Graham Daws did not act in good faith and accepted that the PAT values were provided in disregard of Emanuel’s obligations under the regulatory framework. We have found that Emanuel breached conditions of its licence by failing to comply with the regulatory regime that applies to live-stock exporters. After the Second Show Cause Notice was issued, Mr Graham Daws resigned as managing director and Emanuel has since embarked upon a project of self-improvement, which addresses its lack of integrity and competence. Emanuel has taken further steps towards rehabilitation since the reviewable decisions were made in August and September 2018. An important step in that regard was the appointment of Dr Ludeman as a corporate governance and compliance officer in December 2018. Dr Ludeman identified a lack of formality at Emanuel, with respect to compliance systems, corrective action processes, management reports, meetings and records, as requiring attention. It is fair to say that this lack of formality has not been adequately addressed but there have been improvements in terms of the substance of these areas of deficiency. Importantly, a three-member Advisory Council has been appointed to provide advice to Emanuel in accordance with a written Charter. The third and final member was appointed in January 2021. An animal welfare policy has been developed along with other corporate governance policies and operations systems. We have heard evidence from the management team at Emanuel and we are satisfied that Emanuel has implemented the policies and systems necessary to redeem itself and satisfy us that it is a body corporate of integrity and competence.
We consider that the correct or preferable decision is not cancellation of the licences but rather a suspension until seven calendar days after the making of this decision. We note that the effect of our decision is that the licences of Emanuel and EMS will have been suspended for over three years. Accordingly, we are satisfied that the correct or preferable decision is to set aside the decisions under review and replace them with decisions to suspend the export licences.
ISSUE 7: EMS’S LICENCE
EMS is a wholly owned subsidiary of Emanuel and is therefore an “associate” of Emanuel, as contemplated by s 25A of the AMLI Act. Suspension of EMS’s Licence was appropriate due to its close association with Emanuel.
We found above that Emanuel has sufficiently rehabilitated itself so as to be a body corporate of integrity and competent to hold an export licence. We found that a period of suspension of Emanuel’s Licence was the appropriate exercise of discretion. It is therefore appropriate that there should be a corresponding period of suspension of EMS’s Licence (commencing from the date EMS’s Licence was initially suspended) because of the degree of association between Emanuel and EMS. It is appropriate that the suspension should end on the same day that Emanuel’s Licence suspension ends.
DECISION
The First Reviewable Decision (application 2018/5307) of the First Assistant Secretary dated 21 August 2018, to cancel Emanuel’s Licence, is set aside. The Tribunal substitutes a new decision that Emanuel’s Licence is suspended from 22 June 2018 to 3 December 2021, being seven calendar days from the date of this decision.
The Second Reviewable Decision (application 2018/5541) of the First Assistant Secretary dated 5 September 2018, to cancel EMS’s Licence, is set aside. The Tribunal substitutes a new decision that EMS’s Licence is suspended from 11 July 2018 to 3 December 2021, being seven calendar days from the date of this decision.

I certify that the preceding three hundred and eighty-six (386) paragraphs are a true copy of the reasons for the decision herein of Deputy President Britten-Jones and Senior Member Dr M Evans-Bonner

.....[Sgd]...................................................................
Associate
Dated: 26 November 2021

Dates of hearing:
22 February 2021–26 February 2021
2 March 2021– 5 March 2021
17 March 2021
5 May–7 May 2021

Solicitors for the Applicant: HFW Australia

Counsel for the Applicant:

Solicitors for the Respondent:

Mr M J Feutrill SC and Mr E M Heenan

Sparke Helmore Lawyers

Counsel for the Respondent:

Ms T L Wong SC and Mr M P Cleary

GLOSSARY

DEFINED TERM DEFINITION

2012 EA Notice Export Advisory Notice 2012 – 08 dated 8 May 2012

2016 EA Notice Export Advisory Notice 2016 – 16 Management and Removal of Rejects dated 10 June 2016

AAT Act Administrative Appeals Tribunal Act 1975 (Cth)

AICD Australian Institute of Company Directors

AMLI Act Australian Meat and Live-stock Industry Act 1997 (Cth)

Animals Order Export Control (Animals) Order 2004 (Cth)

ASEL Australian Standards for the Export of Livestock Version 2.3, 27 April 2011

Conditions Order Australian Meat and Live-stock Industry (Conditions on live-stock export licenses) Order 2012 (Cth)

CRMP Consignment risk management plan

Emanuel Emanuel Exports Pty Ltd

Emanuel’s Licence Emanuel licence number L006

EMS EMS Rural Exports Pty Ltd

EMS Show Cause Notice Show cause notice issued to EMS on 22 July 2018

EMS’s Licence EMS licence number L366

ESCAS Exporter Supply Chain Assurance System

Export Control Act Export Control Act 1982 (Cth)

First Assistant Secretary The delegate of the Secretary who made the First and Second Reviewable Decisions. For convenience, we have referred to the delegate as the “Secretary” throughout our reasons

First Reviewable Decision Decision of the First Assistant Secretary (Secretary) dated 21 August 2018 to cancel Emanuel’s Licence

First Show Cause Notice Show cause notice issued to Emanuel on 1 May 2018

HSRA Heat stress risk assessment

ILE International Livestock Export Pty Ltd

Interpretation Act Acts Interpretation Act 1901 (Cth)

KLTT Kuwait Livestock Trading Company

LiveCorp Australian Export Corporation Ltd

NOI Notice of Intention to Export

PAT Pen Air Turnover

RETWA Rural Export and Trading (WA) Pty Ltd

Second Reviewable Decision Decision of the First Assistant Secretary (Secretary) dated 5 September 2018 to cancel EMS’s Licence

Second Show Cause Notice Show cause notice issued to Emanuel on 22 June 2018

SFIC Statement of Facts, Issues and Contentions

Standards Order Australian Meat and Live-stock Industry (Standards) Order 2005 (Cth)

Manual Registered Premises Operations Manual for Peel Feedlot

Transitional Act Export Control (Consequential Amendments and Transitional Provisions) Act 2020 (Cth)

Vessel MV Awassi Express

Dates of hearing:	22 February 2021–26 February 2021 2 March 2021– 5 March 2021 17 March 2021 5 May–7 May 2021
Solicitors for the Applicant:	HFW Australia
Counsel for the Applicant: Solicitors for the Respondent:	Mr M J Feutrill SC and Mr E M Heenan Sparke Helmore Lawyers
Counsel for the Respondent:	Ms T L Wong SC and Mr M P Cleary

DEFINED TERM	DEFINITION
2012 EA Notice	Export Advisory Notice 2012 – 08 dated 8 May 2012
2016 EA Notice	Export Advisory Notice 2016 – 16 Management and Removal of Rejects dated 10 June 2016
AAT Act	Administrative Appeals Tribunal Act 1975 (Cth)
AICD	Australian Institute of Company Directors
AMLI Act	Australian Meat and Live-stock Industry Act 1997 (Cth)
Animals Order	Export Control (Animals) Order 2004 (Cth)
ASEL	Australian Standards for the Export of Livestock Version 2.3, 27 April 2011
Conditions Order	Australian Meat and Live-stock Industry (Conditions on live-stock export licenses) Order 2012 (Cth)
CRMP	Consignment risk management plan
Emanuel	Emanuel Exports Pty Ltd
Emanuel’s Licence	Emanuel licence number L006
EMS	EMS Rural Exports Pty Ltd
EMS Show Cause Notice	Show cause notice issued to EMS on 22 July 2018
EMS’s Licence	EMS licence number L366
ESCAS	Exporter Supply Chain Assurance System
Export Control Act	Export Control Act 1982 (Cth)
First Assistant Secretary	The delegate of the Secretary who made the First and Second Reviewable Decisions. For convenience, we have referred to the delegate as the “Secretary” throughout our reasons
First Reviewable Decision	Decision of the First Assistant Secretary (Secretary) dated 21 August 2018 to cancel Emanuel’s Licence
First Show Cause Notice	Show cause notice issued to Emanuel on 1 May 2018
HSRA	Heat stress risk assessment
ILE	International Livestock Export Pty Ltd
Interpretation Act	Acts Interpretation Act 1901 (Cth)
KLTT	Kuwait Livestock Trading Company
LiveCorp	Australian Export Corporation Ltd
NOI	Notice of Intention to Export
PAT	Pen Air Turnover
RETWA	Rural Export and Trading (WA) Pty Ltd
Second Reviewable Decision	Decision of the First Assistant Secretary (Secretary) dated 5 September 2018 to cancel EMS’s Licence
Second Show Cause Notice	Show cause notice issued to Emanuel on 22 June 2018
SFIC	Statement of Facts, Issues and Contentions
Standards Order	Australian Meat and Live-stock Industry (Standards) Order 2005 (Cth)
Manual	Registered Premises Operations Manual for Peel Feedlot
Transitional Act	Export Control (Consequential Amendments and Transitional Provisions) Act 2020 (Cth)
Vessel	MV Awassi Express