Gilmore and Australian Fisheries Management Authority - [2005] AATA 943

CATCHWORDS – FISHERIES – Southern Shark Fishery – fishing permits – Individual Transferable Quota – whether quota should be varied – verification of catch history on which quota based – decision affirmed regarding verification but varied to reflect increased quota calculated by Australian Fisheries Management Authority.

A New Tax System (Australian Business Number) Act 1999
Fisheries Act 1952
Fisheries Administration Act 1991 ss. 7 and 9
Fisheries Management Act 1991 ss. 3, 4, 5, 17, 21, 32, 32(1A), 32(1B), 38, 39, 61, 71, 72, 95 and 165
Income Tax Assessment Act 1936 ss. 6 and 262A
Income Tax Assessment Act 1997 s. 3-10(1)
Migration Act 1958 s. 499

Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265
Australian Fisheries Management Authority v Graham (2003) 127 FCR 436
Bannister Quest Pty Ltd v Australian Fisheries Management Authority (1997) 77 FCR 503
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60
PW Adams Pty Ltd v Australian Fisheries Management Authority (1998) 49 ALD 68
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Re Fischer and Australian Fisheries Management Authority (2002) 71 ALD 665
Re Howard and Australian Fisheries and Management Authority [2005] AATA 360
Re Markellos and Australian Fisheries Management Authority [2005] AATA 914

DECISION AND REASONS FOR DECISION [2005] AATA 943

ADMINISTRATIVE APPEALS TRIBUNAL )
) S2002/205

GENERAL ADMINISTRATIVE DIVISION )

Re TREVOR RAY GILMORE

Applicant

AndAUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent

DECISION

Tribunal: Deputy President S A Forgie

Date: 27 September 2005

Place: Adelaide

Decision:The Tribunal:
1.varies the decision of a delegate of the respondent dated 20 May 2002 setting aside a decision dated 21 December 2000 and substituting a new decision by:
(a)omitting the references in the condition attached to the permit issued to the applicant to:
(i)     the trunked weight equivalent of 672kg of School Shark units and 3,784kg of Gummy Shark units; and
(ii)     an Individual Transferable Quota (“ITQ”) for the 2002 fishing season of 504.50kg of School Shark and 2,916.59kg of Gummy Shark; and
(b)substituting a reference in the condition to:
(i)     a new ITQ of 861 units of School Shark and 5,276 units of Gummy Shark; and

2. otherwise affirms the decision dated 20 May 2002.
S A FORGIE
Deputy President

REASONS FOR DECISION

Mr Trevor Gilmore holds a permit entitling him to fish for School Shark and Gummy Shark in the Southern Shark Fishery (“SSF”). Attached to that permit is a condition that he must not exceed the Individual Transferable Quota (“ITQ”) of School Shark and Gummy Shark assigned to him. His ITQ is based in part on the amount of School Shark and Gummy Shark that he caught, and that he has been verified as catching,[1] during his best three years in the period 1994 to 1997. Mr Gilmore and the Australian Fisheries Management Authority (“AFMA”), which administers the SSF, have reached agreement on all but one part of their dispute. The area of their disagreement concerns the period during which Mr Gilmore leased his permit to Mr Kym Smith. Mr Gilmore argues that his ITQ should be based on a catch history assessed on the log books that Mr Smith was required to keep under South Australian law and that he, Mr Gilmore, should not be required to verify that catch history. I have decided that Mr Gilmore’s log books, whether completed by himself or Mr Smith, are insufficient to verify his claimed catch history and that he has not otherwise verified it.

THE ISSUE

[1] i.e. Mr Gilmore’s verified catch history

The only issue to be resolved in this case is whether the ITQ allocated to Mr Gilmore should take regard of the amount of School Shark and Gummy Shark that he claims were caught during the period in which he leased his permit to Mr Kym Smith. This depends on whether or not his claims have been verified.

BACKGROUND

Mr Gilmore’s participation in the fishing industry

Mr Gilmore has lived in Streaky Bay in South Australia for nearly forty years. A little over thirty years ago, he purchased a shark fishing boat, the Kyana, and started his fishing career. Until 2003, he maintained a keen interest in fisheries management and research. He holds a Western Australian open scale fish licence with crustacean, rock lobster and crab endorsements. Although he holds a small amount of School Shark and Gummy Shark quota on his permit for the SSF, Mr Gilmore does not have a boat with which to fish for that quota. Mr Gilbert is a past President of the West Coast Northern Zone Research Lobster Association and a past industry representative of the South Australian Fishing Industry Council. For three terms, he has been a member of the Southern Shark Fishery Management Committee (“SharkMAC”). He has also played a role in the preparation of the South Australian Fishery Report by tagging fish, measuring water temperature at various levels and measuring his catch.

The reviewable decision

A delegate of the Australian Fisheries Management Authority (“AFMA”) decided on 20 May 2002 that the condition attached to Mr Gilmore’s 2001 permit should have permitted him to catch the trunked weight equivalent of 672 School Shark units and 3,784 Gummy Shark units. That meant that his quota for the 2002 fishing season was 504.50kg of School Shark and 2,916.59kg of Gummy Shark.[2] AFMA calculated Mr Gilmore’s quota on the basis of the catch history shown in his catch returns and log books where that catch history was verified by other records.
[2] Exhibit 1 at 9

Negotiations between Mr Gilmore and AFMA after the hearing

At the hearing, Ms Mortimer indicated that AFMA would re-credit an 11% deduction for Whiskery Shark that it had previously made from his 1994 and 1995 catch histories. The deduction had been imposed for those fishermen recording their catch on the South Australian Commercial Fishing Daily Log (“Daily Log”) as it did not distinguish between species and so did not distinguish Whiskery Shark. Those completing Commonwealth records, as did Mr Gilmore from 1 July 1997, had to distinguish between species. AFMA acknowledged that there were difficulties in proving the areas in which Mr Gilmore was fishing and the likelihood that Whiskery Shark were, or were not, caught in those areas. Taking into account the time and cost in undertaking that task as well as any increase in Mr Gilmore’s ITQ if there were no discount, AFMA decided that it would not apply the 11% discount to his catch history and so re-credited that which it had already deducted.

As agreed at the hearing, Ms Margot Sachse, who is the Principal Investigator for the AMS Project,[3] personally undertook an audit of Mr Gilmore’s 1997 catch history. He had not contested AFMA’s verified catch histories for 1994 and 1995 and he had not fished in 1996. Ms Sachse did so after exchanging documents with Mr Gilmore and their agreeing on a list of dockets. In a letter to Mr Gilmore dated 28 September 2004, she set out the final agreed catch history for 1997 together with AFMA’s recalculation of his quota allocation having regard to that catch history. Mr Gilmore’s verified catch history for 1997 was 2,429.27kg of School Shark and 9,260.96kg of Gummy Shark trunked weight. The three years of catch history led to a best three year catch figure of 5,253.35kg of School Shark and 14,390.72kg of Gummy Shark and a new ITQ of 5,051 units of Gummy Shark and 808 units of School Shark for 2001.
[3] Alternative Management Strategies Project in the Southern and Eastern Scalefish and Shark Fishery

Ms Sachse further recalculated Mr Gilmore’s quota based on the amended catch histories for the years 1994, 1995 and 1997 and advised Mr Gilmore of it in a letter dated 21 October 2004. She did so as the 11% Whiskery Shark deduction had not been re-credited for the years 1994 and 1995. It had only been re-credited for 1997. That led to a revised ITQ of 5,276 Gummy Sharks and 861 School Shark units. After Mr Gilmore advised her in a letter dated 26 October 2004 that he agreed with her assessment of his catch histories for those years, AFMA attached the additional quota to his permit.

Background to the introduction of the Fisheries Administration Act 1991

On the basis of the material I have in the documents lodged under s. 37 of the Administrative Appeals Tribunal Act 1975,[4] I find that shark fishing occurs in waters off the coast of South Australia, Tasmania and Victoria. The catch in the SSF largely comprises Gummy Shark and School Shark. For many years, there have been concerns about overfishing shark and these concerns are exacerbated by the slow growing nature of sharks, their slow rate of attaining sexual maturity and the fact that they produce only a few young at a time.[5]
[4] Exhibit 1
[5] Southern Shark Fishery Task Force, Southern Shark Fishery Report on Future Management at [3.1] -[3.2]: Exhibit 1 at 30-31

Until relatively recent times, responsibility for the management of the SSF was shared between the Commonwealth and each of the three States. Before 1986, no specific licence or endorsement was required to fish for shark in Commonwealth, Victorian or Tasmanian waters. Provided a boat had appropriate licences to fish in Commonwealth or State waters, it could fish for shark. Only South Australia required an endorsement to fish for shark.[6] The second half of the 1980s saw the introduction of various restrictions on shark fishing. In 1986, limited entry was introduced in the Commonwealth sector of the SSF after it was foreshadowed in November 1985.[7] In July 1986, the transfer of endorsements was frozen.[8]
[6] Australian Bureau of Agricultural and Resource Economics, Management options for the southern shark fishery; An economic analysis at 12-16: Exhibit 1 at 103
[7] Southern Shark Fishery Task Force, Southern Shark Fishery Report on Future Management at [4]: Exhibit 1 at 33-34
[8] Southern Shark Fishery Task Force, Southern Shark Fishery Report on Future Management at [4]: Exhibit 1 at 34

Since then, other restrictions have been imposed on shark fishing in the waters comprising the SSF. They have included, for example, legal minimum lengths, legal maximum lengths, closed seasons and prohibition on the possession of certain species of shark. This was followed by an interim management plan introduced in the Commonwealth gillnet fishery based on the issue of gillnet endorsements to fishermen with a history of operating in the SSF. The interim management plan did not extend to longline fishing or to fishing in State waters. Based on their catch history, fishermen were issued with either six units of net (each being 600 metres) or with five or fewer units of net. In all, 1,678 net units were allocated among 248 boats. Strategies were put in place regarding amalgamation of allocations and restrictions on the transfer of allocations in order to reduce the number of allocated nets. Levels of fishing in the Commonwealth waters of the SSF reduced and, by 1988, 40% of the nets allocated to fishermen had been removed from the shark fishing industry. The allocations issued to fishermen under that interim management plan were reduced by an average of 36% in 1991.[9]
[9] Australian Bureau of Agricultural and Resource Economics, Management options for the southern shark fishery; An economic analysis at 12-16: Exhibit 1 at 103-107

As restrictions on shark fishing were introduced and varied over the years, there were various reports, media releases and information releases to the public. On 25 September 1984, for example, the then Minister for Primary Industry said that a special Task Force, known as the Shark Task Force, was considering the introduction of controls in the SSF.[10] When the Shark Task Force reported, the Minister said, its report would be circulated to the industry and public meetings would be held in each State. While no decision on controls had been made at that time, the Minister emphasised that controls were being considered and additional investment in the industry at that time would not be appropriate. A similar warning was issued a few months later in April 1985[11] following advice on 14 December 1984[12] that a discussion paper would be circulated at the end of January 1985. It was circulated on 25 February 1985 and public meetings arranged to discuss it.[13]
[10] Exhibit 1 at 11
[11] Exhibit 1 at 12-13
[12] Exhibit 1 at 68-69
[13] Exhibit 1 at 72-73

The introduction of limited entry in what was then known as the Southern Shark Gillnet Fishery was announced by the Minister in a media release dated 29 November 1985[14] and the conditions for entry were announced in an information bulletin issued by the Minister’s Department on 30 December 1985.[15] Further details were given in a further bulletin dated 22 July 1986.[16] A discussion paper outlining management options for the fishery was released to members of the fishing industry on 11 December 1986.[17] Limitation of boats into the Southern Shark Gillnet Fishery as from 28 February 1986 had earlier been announced on 25 February 1986.[18] On 17 October 1990, the then Minister for Primary Industry and Energy warned fishermen not to invest in automatic longline equipment as options for restricting its use for taking shark would soon be finalised.[19] In late 1990, the Australian Fisheries Service (“AFS”) established the SSF Structural Adjustment Task Force.[20]
[14] Exhibit 1 at 14-15
[15] Exhibit 1 at 16-19
[16] Exhibit 1 at 20
[17] Exhibit 1 at 65
[18] Exhibit 1 at 66-67
[19] Exhibit 1 at 83
[20] Exhibit 1 at 98

The establishment of AFMA

Until AFMA was established on 3 February 1992, the Department of Primary Industries and Energy managed the SSF first under the Fisheries Act 1952[21] and then under the Fisheries Management Act 1991 (“Act”). AFMA was established under the Fisheries Administration Act 1991 (“Administration Act”) to undertake a number of functions including:
[21] The Fisheries Act 1952 was repealed with effect from 3 February 1995 by the Fisheries Legislation (Consequential Amendments) Act 1991, s. 3.
“(a) to devise management regimes in relation to Australian fisheries;
(aa)…
(b)to devise fisheries adjustment programs and fisheries restructuring programs;
(c)to consult, and co-operate, with the industry and members of the public generally in relation to the activities of the Authority;
(d)to devise exploratory and feasibility programs relating to fishing;
(da)…
(e)to establish priorities in respect of research relating to fisheries managed by the Authority and arrange for the undertaking of such research;
(ea)…
(f)…
(g)…
(ga)…
(h)the functions specified in section 9 relating to consultation;
(j)…
(k)…
(m)as provided by an associated law:
(i)to establish and allocate fishing rights;
(ii)…
(iii)functions relating to plans of management;
(iv)…
(v)to undertake, on behalf of the Commonwealth, management responsibilities in relation to fisheries management arrangements entered into with the States and Territories;
(vi)…
(ma)…
(n)…”[22]

AFMA may consult with persons, bodies or Governments including persons or bodies representative of the whole or part of the industry.[23]

[22] Administration Act, s. 7(1)

[23] Administration Act, s. 9(1)(a)

The object of the Fisheries Management Act 1991

In performing its functions, AFMA must pursue:
“… the following objectives …:
(a)implementing efficient and cost-effective fisheries management on behalf of the Commonwealth; and
(b)ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle, in particular the need to have regard to the impact of fishing activities on non-target species and the long term sustainability of the marine environment; and
(c)maximising economic efficiency in the exploitation of fisheries resources; and
(d)ensuring accountability to the fishing industry and to the Australian community in AFMA’s management of fisheries resources; and
(e)achieving government targets in relation to the recovery of the costs of AFMA.” [24]
[24] Act, s. 3(1)

Management of fisheries

Under s. 17 of the Act, AFMA must either determine a plan of management for a fishery to which the Act applies or determine that a plan of management is not warranted. A “fishery” is defined to mean:
“… a class of activities by way of fishing, including activities identified by reference to all or any of the following:
(a)     a species or type of fish;
(b)     a description of fish by reference to sex or any other characteristic;
(c)     an area of waters or of seabed;
(d)     a method of fishing;
(e)     a class of boats;
(f)     a class of persons;
(g)a purpose of activities.” [25]

A “fish” is defined to include “… all species of bony fish, sharks, rays, crustaceans, molluscs and other marine organisms, but does not include marine mammals or marine reptiles.”[26]

[25] Act, s. 4(1)

[26] Act, s. 4(1)

Where AFMA determines that a plan of management is warranted, it must determine the plan of management in writing only after following the procedural steps set out in that section. Once a plan of management relates to a fishery, it is known as a “managed fishery”.[27]
[27] Act, s. 4(1)

A plan of management for a fishery may provide for its management by means of statutory fishing rights and other fishing concessions.[28] A “fishing right” means a “statutory fishing right”[29] and that in turn means one or other of the nine rights specified in s. 21.[30] Among those rights is a right to take a particular quantity of fish from a managed fishery. A “fishing concession” means a statutory fishing right, a fishing permit or a foreign fishing licence.[31] A “fishing permit” is a reference to a permit granted under s. 32 of the Act.[32]
[28] Act, s. 17(6)(b)
[29] Act, s, 4(1)
[30] Act, s. 4(1)
[31] Act, s. 4(1)
[32] Act, s. 4(1)

Fishing permits

In general terms sufficient for this case, a person may not engage in commercial fishing in the Australian fishing zone (“AFZ”) unless the holder of a fishing permit or acting on behalf of a holder of fishing permit. In broad terms, the AFZ comprises the waters adjacent to Australia within the outer limits of the exclusive economic zone[33] adjacent to Australia’s coast and the waters adjacent to each external territory within those outer limits.[34] It does not include State proclaimed waters but the Commonwealth may make an arrangement with a State with respect to a particular fishery in waters that are relevant to that State and that are not managed by a Joint Authority.[35]
[33] Act s. 4(1) and see also Seas and Submerged Lands Act 1973 ss. 3(2) and (2A) and the Schedule incorporating Articles 55 and 57 of the United Nations Convention on the Law of the Sea. At present, the exclusive economic zone is no more than 200 nautical miles beyond and adjacent to Australia’s territorial sea. In general terms, Australia’s territorial sea is no more than 12 nautical miles from the low water line: Seas and Submerged Lands Act 1973 s. 3(1) and the Schedule incorporating Articles 3 and 4 of the United Nations Convention on the Law of the Sea.
[34] Act, s. 4(1) as amended with effect from 16 December 1999 by the Fisheries Legislation Amendment Act (No.1) 1999, s. 3 and Schedule 1, items 4 and 5
[35] Act, s. 72 and see also ss. 61 and 71 regarding the formation of and management by a Joint Authority.

Section 32(1) provides that, upon an application’s being made to it in an approved form, AFMA may grant a person a fishing permit. Subject to certain provisos dependant upon whether a boat is specified in the fishing permit or not,[36] that permit authorises the person to whom it is granted (or a person acting on his or her behalf) to use an Australian boat for fishing in a specified area of the AFZ or in a specified fishery.[37] The boat must comply with any conditions to which the fishing permit is subject.[38] The fishing permit may authorise the use of a boat for various activities specified in s. 32(4) including commercial fishing generally.[39]
[36] Act, ss. 32(1A) and (1B)
[37] Act, s. 32(1)
[38] Act, s. 32(1C)
[39] Act, s. 32(4)(a)

Section 32(5) provides that a fishing permit is granted subject to a number of conditions that are specified in that provision. AFMA may not vary those conditions.[40] In addition to those conditions, a fishing permit is subject to any other conditions that are specified in the permit itself or prescribed in relation to permits granted under s. 32.[41] The conditions that may be specified in a fishing permit include, but are not limited to:
“(a) the fish that may be taken; or
(b)the quantity of fish that may be taken; or
(c)the rate at which fish may be taken; or
(d)the methods or equipment that may be used to take fish; or
(e)the methods or equipment that may be used to process or carry fish.”[42]
[40] Act, s. 32(8)
[41] Act, s. 32(6)(a)
[42] Act, s. 32(7)

If the holder of a permit surrenders the permit by giving AFMA written notice, that permit ceases to be in force.[43] With one exception, AFMA may transfer a permit to a person other than its holder if the holder and that other person ask it to do so.[44]
[43] Act, s. 32(9)
[44] Act, s. 32(10)

Once a fishing permit has been issued, AFMA may vary or revoke a condition to which it is subject by virtue of s. 32(8). It may also specify a condition or a further condition.[45] If AFMA wishes to take either of these courses, it must give written notice to the holder of the fishing permit and it may do so at the request of the holder of the fishing permit or at its own instigation.[46]
[45] Act, s. 32(8)
[46] Act, s. 32(8)

Section 95(1)(d) provides that the holder of a fishing permit must not contravene a condition to which that permit is subject and s. 95(1)(e) provides that he or she must not cause or permit a person acting on his or her behalf to contravene such a condition. Similarly, a person acting on behalf of the holder of a fishing permit must not contravene such a condition.[47] Contravention is an offence.[48] If AFMA has reasonable grounds to believe that there has been a contravention of a condition on a fishing permit, it may suspend the operation of that fishing permit in accordance with s. 38.[49] If the holder of a fishing permit is convicted of an offence against the Act, Regulations or any other law of the Commonwealth, Papua New Guinea or an Australian State or Territory relating to fishing, AFMA may cancel the fishing permit.[50] It may also cancel it if to do so would be in accordance with a condition of the fishing permit relating to its cancellation.[51]
[47] Act, s. 95(1)(f)
[48] Act, ss. 95(2)-(7)
[49] Act, s. 38(1)
[50] Act, s. 39(1)(a)
[51] Act, s, 39(1)(b)

A decision under s. 32 is a “relevant decision” for the purposes of s. 165(1) of the Act. AFMA made a relevant decision on 21 December 2000. By complying with the requirements of ss. 165(2) and (4), “A person affected by a relevant decision …” may ask AFMA to reconsider the decision. A “relevant decision” includes a decision it has made under s. 32. If AFMA makes a decision on review either in substitution for or revoking the relevant decision (i.e. its “reviewable decision”, ss. 165(1) and (5)), it must inform the person who made the request under s. 165(2) of the result of its reconsideration).[52] AFMA made a reviewable decision on 20 May 2002. Section 165(7) then provides that:
“An application may be made to the Administrative Appeals Tribunal for a review of a reviewable decision.”[53]
[52] Act, s. 165(6)
[53] Act, s. 165(7)

Management of the South East Fishery, the predecessor of the SSF, in the 1980s

The SSF was previously part of the South East Fishery (“SEF”) and was managed by the AFS. The precise area of the SEF varied somewhat depending on the precise gear that was used. In broad terms, it encompassed waters within the AFZ adjacent to New South Wales, Victoria, Tasmania and South Australia but beyond three nautical miles from the coast. Within the SEF, shark fishing with hooks and gillnets was managed as the SSF, trawling for scalefish was managed as the South East Trawl Fishery (“SETF”) and all methods of gillnet, longline, trotline, dropline and other means of targeting species of scalefish were included in the South East Non Trawl Fishery (“SENTF”).

With effect from 28 February 1986, the entry of boats to the SSF to gillnet sharks was limited to those who held a shark-endorsement on their Commonwealth Fishing Boat Licence.[54] Although the limit was imposed as an interim measure, it was imposed pending the implementation of a longer term plan. The Southern Shark Fishery Management Plan 1988 (“SSF88”) was ultimately developed for the SSF under the Fisheries Act 1952 and it came into force on 29 April 1988.[55]
[54] Announced by the Minister for Primary Industry (“Minister”): Exhibit 1 at 66-67. Entry into the demersal longline fishery was similarly restricted in January 1994. The outline of the entry criteria for that fishery appear at Exhibit 1 at 135-148.
[55] SSF88 was based on recommendations in the report entitled Southern Shark Fishery – Report on Future Management prepared by the Southern Shark Fishery Task Force: Exhibit 1 at 21-82. That task force had been established by the Australian Fisheries Council.

Development of management plan for the SSF between 1992 and 1996

In February 1988, the Southern Shark Fishery Management Committee (“SharkMAC”) was established to advise the Minister[56] on the management of the SSF and as a forum to promote discussion on management and research in the SSF. It comprised representatives from the Commonwealth and State Governments and industry as well as scientists.
[56] Since AFMA’s inception in February 1992, SharkMAC has reported directly to it.

In November 1990, the Southern Shark Research Group concluded that the controls on gear and equipment (or “input controls”) introduced under SSF88 were ineffective in cutting back the fishing effort and shark landings to the 1982 level. Unless catches in the SSF were reduced to somewhere between 500 and 1,000 tonnes, the fishery face collapsed.[57] As a result, the AFS established the SSF Structural Adjustment Task Force in late 1990. That Task Force examined ways to address continuing overcapacity in the SSF and SharkMAC considered options to reduce effort put into the SSF. On 6 December 1991, the Australian Bureau of Agricultural and Resource Economics (“ABARE”) released a paper entitled Management Options for the Southern Shark Fishery.[58] ABARE outlined the choices that were available: either reduce the catch to a level where it was sustainable or temporarily reduce the catch to an even lower level so that future landings and profits can be increased. In so far as School Sharks were concerned, the optimal outcome would be to close the SSF for eight to twelve years to allow the stock to recover. Alternatively, areas of the SSF could be closed and there could be restrictions on gear type and mesh size to reduce catches of School Sharks to a sufficient level to allow stocks to recover. The same optimal outcome was recommended for Gummy Sharks. If that were not appropriate, the fleet should be reduced to approximately 20 boats while maintaining then current catch levels.[59]
[57] Exhibit 1 at 98
[58] Exhibit 1 at 85-133
[59] Exhibit 1 at 97

In June 1996, AFMA commissioned Fisheries Economics, Research & Management Specialists (“FERM”) to report into future management options for the SSF. FERM released a report entitled Future Management Options for the Southern Shark Fishery in early 1997. FERM noted that the inability to transfer endorsements in the SSF had inhibited economic efficiency in that fishery. It also canvassed the need for profound jurisdictional rationalisation and concluded that a properly designed and implemented Individual Transferable Quota system (“ITQ system”) would offer a number of advantages over tighter input controls.[60]
[60] e.g. controls over the number of boats and nets permitted in the SSF

The Shark Fishery Assessment Group (“SharkFAG”) prepared a report for SharkMAC in November 1996.[61] It estimated that, at the beginning of 1995, the biomass of School Shark in the SSF lay between 15% and 46% of the unfished level in the SSF. SharkFAG predicted that there was a high probability that the then current effort in the SSF would lead to further reductions in the population size of School Shark. If there were to be an 80% probability that mature biomass would be above the 1996 level of mature biomass in 15 years, there would need to be a catch reduction in the order of 35%. The required reductions could be phased in but that would result in a lower long-term sustainable catch.[62]
[61] Exhibit 1 at 149-159
[62] Exhibit 1 at 149

Moves to introduce individual transferable quotas in 1997

On 6 June 1997, AFMA issued a media release entitled “Shark operators warned about increasing catches”.[63] It referred to a meeting of SharkMAC which was held in April 1997 and which, subject to support from the wider industry, recommended the introduction of an ITQ system. Should it be decided that catch history would be taken into account in determining quotas, AFMA determined that catch histories after 10 April 1997 would not be taken into account.
[63] Exhibit 1 at 160

In June 1997, FERM prepared a background paper entitled “Re-allocation of Fishing Concessions where Management Arrangements have Changed” for the Board of AFMA.[64] FERM began its report by examining why governments regulate fisheries. In summary, it said that it did so as unregulated fisheries tend to become over-harvested. That in turn leads to problems of conserving the fish stock on the one hand and economic difficulties for fishermen on the other. FERM then went on to examine three tools used to reduce over-harvesting and excess capacity. They were individual transferable quotas (“ITQs”), input controls and competitive total allowable catches (“TACs”) (as opposed to a non-competitive TAC). Each tool was considered by FERM.
[64] Exhibit 1 at 170-184

The report also examined the relationship between property rights in fisheries and over-harvesting and economic inefficiency. In essence, FERM reported that a central economic problem of commercial fisheries is the over-capacity of its fishermen. That arises when the fishery’s stocks are plentiful and the fishermen expand their capacity as a result. As long as there are no barriers to new entrants in the fishery, the number of fishermen operating in the fishery grows but the stock in the fishery does not. As a consequence, the catch is spread increasingly more thinly among an increasingly greater number of fishermen. In competing for greater returns than their competitors, fishermen acquire more equipment in an attempt to become more competitive against other fishermen and to increase their catch size relative to those other fishermen. In doing so, they increase the cost of fishing and reduce the net return that they would otherwise receive from their catch. Taken across all operators in a fishery, the increased costs dissipated in this way can be substantial.

FERM also reported on why it considered that quota allocations based on individual operator economic efficiency is contrary to the requirement that AFMA pursue the objective in s. 3(1)(c) of the Act of maximising economic efficiency in the exploitation of fisheries resources. It noted that AFMA maintains that it would be operating against that objective were it to attempt to use the relative economic efficiency of individual harvesters as a criterion when re-allocating fishing concessions. Quite apart from that consideration, FERM found that ascertaining the efficiency of individual operators would require analysis of detailed data, some of which is not available. The costs of such a task would have to be factored into any calculation of economic efficiency and, as they would be prohibitively expensive, must be contrary to maximising economic efficiency. Even if that were not so, it would be analytically impossible to assess each individual operator’s economic efficiency given the various types of gear used in the same fishery and the various restrictions imposed on various types of gear. Were it analytically possible, the incentive for individual operators to illustrate a high degree of efficiency, FERM said, would weaken the data base used for fisheries management and stock assessment. That would lead in turn to a need to improve the manner in which the data is validated.

FERM then linked its reasons back to the issue of fishing rights with which it had dealt. In summary, basing quota on the basis of each individual fisherman’s efficiency significantly weakens each fisherman’s fishing concession. It does so because it creates uncertainty in the holders of those concessions and exposes them to the risk of challenge because there is no known method of determining economic efficiency in the industry. The value of a fisherman’s investment in his or her enterprise is not a reliable measure of efficiency.

FERM recommended that it was desirable that any re-allocation of fishing rights avoids differential economic or wealth impacts on resource users. Such impacts cannot be avoided and it is not possible, it suggested, to devise a system that had absolutely no impact on the relative economic positions of fishermen.

In September 1997, AFMA released a paper entitled the “Allocation of Fishing Concessions where Management Arrangements Change” (Fisheries Management Paper Series FMP No. 8) setting out its policies and procedural framework for the allocation of fishing concessions where a decision has been taken to change the management arrangements in a fishery.[65] It attached the paper prepared by FERM as an information paper to its policy paper[66] and stated the objects it was required to pursue in performing its statutory functions.[67] As to the allocation of fishing concessions, AFMA said:
“Establishment of well defined, divisible, secure and transferable fishing concessions are a major factor in the successful pursuit of AFMA’s ESD, economic efficiency and cost-effective management objectives. However, it is recognised that continually changing the method of allocation of fishing concessions will weaken those concessions and make effective fisheries management difficult. Accordingly, the fishing concessions that exist in a fishery at the time that management arrangements are proposed to change, are the ones that will be taken into account under any allocation of concessions required by the move from one management regime to another.
It should also be recognised that there will be instances where, in pursuing AFMA’s legislative objectives, it is not possible to achieve an equivalent translation of the fishing concession when changing from one management regime to another. Clearly, in these circumstances, it is not possible to design an allocation formula that will have absolutely no impact on the relative economic position of individual operators.
…
… From a legal and fisheries management perspective, AFMA will explicitly endeavour to minimise any adverse differential economic impacts on the individual operators.
Therefore, AFMA’s approach to allocation of fishing concessions is based on the premise that, in making any management changes, AFMA will ensure that:
such changes are consistent with and support the pursuit of AFMA’s legislative objectives; and
any differential economic impacts of allocations on individual fishing concession holders are minimised unless there are reasons, justifiable with respect to AFMA’s legislative objectives, that dictate otherwise.”[68]
[65] Exhibit 1 at 163-169
[66] Exhibit 1 at 165
[67] Exhibit 1 at 166
[68] Exhibit 1 at 166-167

Changes in management in the Commonwealth and State fisheries in 1999

On 30 April 1999, a Memorandum of Understanding (“the MOU”) had been executed between the Commonwealth and each of the States of South Australia, Tasmania and Victoria. At that time, AFMA managed the SETF and the Great Australian Bight Trawl Fishery (“GABTF”) in which sharks were taken as well as the SSF. Each of the three fisheries formed part of the AFZ adjacent to South Australia, Tasmania and Victoria. The MOU recorded that AFMA had decided that School Shark and Gummy Shark would be managed by determining the TAC of each species in the SSF, which was enlarged by the addition of the coastal waters of each of South Australia, Tasmania and Victoria. Holders of fishing concessions in the SETF and the GABTF, already managed by AFMA, and in the enlarged SSF were to be allocated ITQs for School Shark and Gummy Shark as a means of managing those fisheries. The Southern Shark Allocation Advisory Panel (“the Shark Allocation Panel”) was asked to report on the apportionment of the TAC of School Shark and the TAC of Gummy Shark among the SSF, the SETF and the GABTF.

The SSF Industry Development Program

In June 1999, the Department of Agriculture, Fisheries and Forestry – Australia established a Working Group to advise on the most appropriate methods to provide a one-off structural adjustment assistance to the holders of fishing permits granted for the SSF under the Industry Development Program (“SSFIDP”). On the basis of Ms Sachse affidavit,[69] I find that the SSFIDP was intended to smooth the introduction of ITQs, help operators deal with the reduction in shark catches and increase the economic efficiency of the SSF. The SSFIDP proposed a buy out of SSF permits and their associated net/hook units. The Commonwealth Government agreed to fund the buy-out up to $2.6 million. Operators were invited to express their interest in the buy-out.
[69] Exhibit 2 at [39]

Those operators who met the eligibility criteria specified in the SSFIDP were provided with assistance. Despite being required to surrender their permits, those operators retained the right to hold any School Shark or Gummy Shark allocated to them. They could buy and lease quota but lost their right to fish for shark commercially. The SSFIDP provided for payments for surrendered permits based on $8,000 per gillnet and $25 per hook. Forty permit holders surrendered their permits under the SSFIDP.

Development of apportionment and allocation policy in the SSF

On 15 July 1999, the Shark Allocation Panel issued a report entitled “Report of Advice Concerning Apportionment and Allocation in Respect of School Shark and Gummy Shark”.[70] The report began by noting that the SSF was to be enlarged and the classes of persons authorised to fish in that fishery were to be increased. That was to occur by Offshore Constitutional Settlement Arrangements (“OCS Arrangements”) to be made between the Commonwealth and the States of South Australia, Victoria and Tasmania under s. 72 of the Act. The OCS Arrangements would provide that all activities by way of commercial fishing for School Shark and Gummy Shark in the coastal waters of the States would be managed by AFMA. The enlarged SSF comprised various sectors including the South Australian sector of licensed fishers with access to School Shark and Gummy Shark. Each of the sectors was defined by reference to an area of water and, in broad terms, that comprised the coastal waters (as defined in s. 5 of the Act) of each State other than Victoria for its coastal waters were designated as a shark nursery area and closed.
[70] Exhibit 1 at 186-208

The Shark Allocation Panel stated that it had sent a letter to all shark fishing concession holders “in the fisheries the subject of our Terms of Reference”.[71] That letter was dated 5 March 1999 and addressed “Dear Shark Fisher” and does not otherwise identify the fishery within which the shark fisher fishes.[72] Given the Terms of Reference identify the SSF as comprising sectors including the South Australian sector of licensed fishers with access to School Shark and Gummy Shark, I have concluded that the letter was sent to South Australian shark fishers. Submissions were sought from individuals and groups. Meetings were held at various centres including Mt Gambier, Port Lincoln and Adelaide.[73]
[71] Exhibit 1 at 192
[72] Exhibit 1 at 220-221
[73] Exhibit 1 at 192

The Shark Allocation Panel concluded that:
“In pursuit of its objectives of ‘ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle’, the AFMA Board proposes such a reduction. The Panel considers that, in those circumstances, apportionment of the TAC of school shark between the three fisheries should reflect directly the proportionate share of each fishery in the recent aggregate catch of school shark of the three fisheries. The share of the TAC of the Great Australian Bight Trawl Fishery will be very small indeed if that method of apportionment is adopted. But we consider that the fishermen of all three fisheries will bear the burden of the proposed catch reduction equitably if the constraint is proportioned to the magnitude of their recent catches. We would hope that the burden could be mitigated both by provision for carry-over and carry-under from year to year and by transferability of ITQs between the three fisheries as well as between the sectors of the Southern Shark Fishery.
The Panel has reached the same conclusion about the appropriate basis of apportionment of the TAC of gummy shark. Apportionment by reference to the proportionate share of each of the three fisheries in the recent aggregate catch of those three fisheries is in our opinion equitable in its constraining effect on fishing effort, and also tends to minimise ‘differential economic impacts on individual fishing concession holders.’”[74]
[74] Exhibit 1 at 194-195

It then went on to consider what recent period should be chosen for catch history by which to apportion among the three fisheries. Referring to AFMA’s press release dated 6 June 1997, the Shark Allocation Panel said that it could have been understood to refer only to allocation of ITQs among individual fishing concession holders in the SSF as constituted at that time. The Shark Allocation Panel, however, considered that the OCS Arrangements were well publicised and that most shark fishermen, whether Commonwealth or State, would have become aware of it. Although AFMA’s press release had warned that catches recorded after 10 April 1997 would not be taken into account, the Shark Allocation Panel considered that any increase in fishing effort in the remaining months of 1997 following 10 April 1997, whether in ignorance or with deliberate disregard of the warning, would be unlikely to have been substantial. It thought it desirable that the chosen period be as recent as might reasonably be for three reasons: it enabled the present relative economic positions of fishermen to be accurately reflected; the period would be long enough to obviate the distortions which in a short period tend to flow from the circumstances that shark catch is affected by the degree of effort being expended at different times on targeting other species; aggregations and distribution of shark vary from year to year; and weather conditions affect the number of shark taken each year. A period of four years from 1 January 1994 to 31 December 1997 was recommended as the apportionment period.[75] The Shark Allocation Panel considered that the data required to support an allocation system of School Shark and Gummy Shark is the catch history for the same period as that chosen for the apportionment of the TAC among the three fisheries.[76]
[75] Exhibit 1 at 197
[76] Exhibit 1 at 197

It recognised that there were difficulties in ascertaining a reliable catch history for both apportionment and allocation. Much of the catch history from 1994 to 1997, the Shark Allocation Panel found, was recorded against the registration number or symbol of the vessel into which the catch was taken. Considerable difficulties would be encountered, the Shark Advisory Panel considered, were there to be an attempt to identify the particular fisheries or sectors in which shark were caught by fishermen who were authorised to fish in more than one of them between 1994 and 1997. It considered that each sector in the enlarged SSF should be apportioned a share of the TAC, reasonably proportioned to the present relative economic position of that community. Each sector’s share, so proportioned, was best ascertained by reference to the sector’s share of recent fishery catch history.

After consultation with fishermen, the Shark Allocation Panel considered that a process of shark catch verification and audit was important if allocation were to be based in any way on catch history. That was so because fishermen had expressed concern that some of their number had logged shark catches greater in weight than that actually caught. Verification and audit was important to give fishermen confidence in the system and to ensure that allocation was fair to each of the fishermen. It considered whether any weight should be given to the manner in which the shark were caught (e.g. by line or by net) but decided to recommend that the manner of catching should be disregarded.[77]
[77] see discussion generally at Exhibit 1 at 197-200

On 6 September 1999, AFMA wrote to “Shark Fishers and other interested persons”.[78] It advised that it had decided at its meeting on 31 August 1999 to accept the Shark Allocation Panel’s recommendations for apportionment of the TAC among the enlarged SSF, SETF and the GABTF. Apportionment would be on the basis that the TAC for each fishery would be proportional to the relative aggregate catch in each during the four years from 1 January 1994 to 31 December 1997.
[78] Exhibit 1 at 240-245

AFMA also announced the manner in which the TAC for School Shark and Gummy Shark would be allocated in the enlarged SSF. It noted that it had deferred making its decision on the basis on which allocation would be made in the SETF and the GABTF as it had yet to determine the quota mechanism which would be adopted. In the case of the enlarged SSF, it announced that it would allocate an ITQ to individual concession holders and the quota that each received would be proportional to the aggregate catch of each in their best three years during the period from 1 January 1994 to 31 December 1997. South Australian sector licensed fishermen with access to School Shark and Gummy Shark were eligible for allocation of quota. AFMA foresaw that exceptional circumstances could affect a fisherman’s catch and it addressed that issue when it said:
“… To a large extent, the possibility of catch history being affected by exceptional circumstances in any one year has been addressed by the recommendation that only the best three of the four year period 1994-97 be taken into account. Persons who believe that their catch history has been affected by exceptional circumstances will have the opportunity to appeal when the catch verification process has been completed, quota has been allocated, and Permits varied or granted. If you are not satisfied with your quota allocation, you can appeal after a Permit has been varied or granted, and the quota appears as a condition of the Permit. You will be notified of your full appeal rights when you receive your Permit and/or quota allocation.”[79]
[79] Exhibit 1 at 242

Enclosed with AFMA’s letter was a document describing the catch history verification process.[80] It stated that catch could be verified if it had been taken legally under a valid concession endorsed for, among others, the South Australian sector of licensed fishers with access to School Shark and Gummy Shark. Where a concession had been transferred, any catch history was also transferred with the concession. It was the responsibility of the current concession holder, and not AFMA, to obtain evidence of catch history for periods prior to his or her holding the concession.
[80] Exhibit 1 at 244-245

In order to enable catch history to be verified, each concession holder was required to produce two sorts of documents. They were primary verifiable documents and supporting documents and were required to establish four things: a relationship between the catch and the concession by referring to the boat, skipper or concession holder; the year of the catch if not the precise date; the weight and/or the total price paid for each shark species; and that payment was received for the catch. Where each shark species could not be identified and was referred to only as “shark”, “mixed shark” or “flake”, the concession holder was required to claim it as catch for the species he or she believed was taken, if that were possible, and to provide as much evidence as possible to support that claim. AFMA would refer to such matters as price per kilogram and logbooks to determine the species. If it could not do so, the catch would be verified as “other (than school and gummy) shark”.[81]
[81] Exhibit 1 at 245

The primary verifiable documents and the supporting documents were described in the following way by AFMA:
“PRIMARY VERIFIABLE DOCUMENTS: landing documents from fish cooperatives and relevant Fish Marketing Authorities, invoices, receipts, sales dockets or carrier consignment notes prepared at the time of transaction;
AND
SUPPORTING DOCUMENTS: logbooks (catch returns to authorities or personal records completed at the time the fish were taken), and financial records (eg bank statements) which show that monies were received following the taking or sale of the fish referred to in the primary verifiable document. (Individuals and companies are required to keep financial records for at least seven years for taxation purposes, and generally banks keep transaction records for a similar period of time, copies of which can be obtained by the account holder for a small fee).”[82]
[82] Exhibit 1 at 245

Where primary verifiable documents originated from certain sources, the document continued, AFMA might waive the requirement to produce supporting financial documents. A concession holder was required to produce documents that established:
“a relationship between the catch and the concession (by referring to the boat, skipper or concession holder etc);
the date (at least the year);
the weight and/or the total paid for each shark species (or for ‘mixed shark’, ‘shark’, or ‘flake’ – see below); and
that payment was received for that catch.
If the document only specifies the weight or price for ‘mixed shark’, ‘shark’, or ‘flake’, you should provide as much evidence as possible to the CVT as possible in order to establish the species breakdown. Supporting documents could include personal logbooks completed at the time the catch was taken and catch returns to authorities. AFMA will use a set of criteria, including reference to the price per kg paid and logbooks, to determine whether the catch will be verified as school or gummy shark or under some other category. If there is insufficient evidence to accurately verify the species breakdown, the catch will be verified as ‘other (than school and gummy) shark’.”[83]
[83] Exhibit 1 at 245

AFMA prepared general guidelines for its officers verifying shark catch history.[84] It drew the officers’ attention to Fisheries Management Paper Series FMP No. 8 and stated shortly that:
“The objective of the catch verification process is to substantiate claims made by concession holders concerning demersal shark catches taken for commercial gain in each year during the period 1 January 1994 – 31 December 1997.”[85]
[84] Exhibit 1 at 246-255
[85] Exhibit 1 at 246

The document repeated the information regarding primary verifiable documents and supporting financial records. It explained that, while SEF2 forms detailing catches are verified, they could not be used as primary documents in the

verification process. An explanation was given:

“… This is because during the period, school and gummy shark weights were recorded as a ‘combined’ weight under the heading ‘SHX’. As these species were not under quotas, there was some sloppiness about recording, with some processors recording all shark species under the heading ‘SHX’, and others not including shark on their forms at all.
In fairness to SSF operators who must produce evidence (price paid per kg) to show that their catch was school and gummy shark and not some other species, SEFT operators will be required to reproduce their original landing documents, receipts etc to show that school and gummy shark was taken, and can only use SEF2 forms as secondary documents.
If primary documents are not available for a catch recorded on SEF2 form, and supporting evidence can be provided as to the species breakdown, verification will be considered at the discretion of the AFMA Management Section after assessing the risk to the integrity of the verification process …”[86]

[86] Exhibit 1 at 251

The requirement for Supporting Financial Records might be waived in two sets of circumstances:
“The CVT [Catch Verification Team] may waive the requirement for supporting financial documents to support a series of primary documents from a particular source if the applicant can produce financial records to support several of these dockets in a similar period (eg in the same year), or a high proportion of all documents issued by that source for that operator.
…
As a result of experience in the SENTF catch verification process, invoices, receipts and sales dockets issued by certain fish receivers can be accepted without supporting documentation. These sources are generally large fish receivers whose operations are well known to AFMA, and in particular there were no difficulties establishing the authenticity of primary documents from these sources by reference to supporting documents when these were requested in the course of the SENTF catch history verification process.
The need for supporting financial documents will usually be waived if a SEF2 form is available that accounts for the catch.
However if some doubt exists about a catch, the CVT can ask for supporting financial documents to be produced within 28 days of their visit.”[87]
[87] Exhibit 1 at 251

The general guidelines took a wide view of the financial records that could be used to support a primary document. They included cheque butts, deposit slips, passbooks or other records of payment. A concession holder’s cash book or similar record was not regarded as an independent record but could be used as a supporting financial record for small amounts if the CVT decided to do so after assessing the risk to the verification process. Catch history could be established if a primary document could be linked to a financial record showing either the amount recorded on the docket, or an amount calculated from the weight using the average price paid for that species in that period, and made on, or shortly after, the date on the docket. Where primary documents do not provide sufficient information, a bank deposit record could be used to link a docket to an operator where the operator was not explicit on the docket or to clarify the year in which a catch was taken if the docket is undated.

Logbooks were also dealt with in the general guidelines:
“Logbook records, both personal logs filled out by skippers and catch returns submitted to fisheries authorities, are not appropriate for establishing catch history except as secondary source of information, due to concerns that some operators may have falsified their logbooks in case catch history was used in subsequent ITQ allocation.
Logbooks, both personal logs filled out by skippers and catch returns submitted to fisheries authorities by operators, are really no more than claims that certain catches have been made. In many cases, operators were required to fill in logbooks at sea, and therefore cannot accurately complete the weight of fish caught. While submission of logbooks was generally required between 1994-97, a variety of logbooks were filled in, under different rules in different States, and the extent to which the requirement to submit logbooks was enforced varied. Some States treat logbook data as belonging to the skipper of the vessel used to take the fish, others treat it as belonging to the holder of the fishing licence.
Logbook records can be used in certain circumstances to determine the species breakdown of a catch that was recorded on dockets as ‘shark’, ‘flake’ or ‘school and gummy shark’ provided the price paid is consistent with the species indicated ….
If a clear pattern emerges that indicates a particular operator’s logbooks are reasonably accurate (ie a series of verifiable dockets which are closely matched by the logbook records) primary documents which are consistent with logbooks but do not clearly refer to a concession, may be verified at the discretion of the AFMA Management Section after assessing the risk to the integrity of the verification process.
Generally, if a catch is recorded as ‘fish’ on the primary document, logbooks can not be used to determine the species breakdown of the catch. However, if a clear pattern emerges that indicates a particular operator’s logbooks are reasonably accurate (ie a series of verifiable dockets which are closely matched by the logbook records), the logbook records could be used to determine the species breakdown of a catch recorded as ‘fish’ (provided the price paid is consistent with the species indicated), but only if either:
·the primary document accounts for the combined weight of all shark and scalefish taken in the period; or
·other documents can be produced that account for the weight of scalefish recorded in logbooks in that period; or
·logbooks indicate that no scalefish was taken in a similar period.
In some areas, shark is marketed under the name ‘butterfish’. A document relating to a sale of ‘butterfish’ could be accepted as relating to demersal shark if this is consistent with logbook records.”[88]
[88] Exhibit 1 at 252-253

A combination of secondary material may be sufficient to verify a catch history without the need to produce primary verifiable documents but only if the AFMA Management Section considered it appropriate to do so after assessing the risk to the integrity of the verification process.

New SSF permits specifying ITQs as a condition of SSF permits

From mid December 2000, AFMA sent out new SSF permits specifying as a condition the ITQ which restricted the permit holder’s catch of School Shark and Gummy Shark. 197 of those permits were granted. The allocations of ITQs varied greatly among permit holders as did their catch histories. From 1 January 2002, modifications were made to the gear restrictions. This reflected the change in emphasis in the SSF from input controls to output controls. From 1 January 2003, the SSF and the SENTF were amalgamated into a single gillnet, hook and trap fishery known as the Gillnet Hook and Trap Fishery (“GHATF”).

Development of the 2001 allocation policy

Following Ryan J’s judgment in Australian Fisheries Management Authority v Graham,[89] AFMA began developing its 2001 policy in accordance with the reason given by the Tribunal in the earlier Re Fischer and Australian Fisheries Management Authority.[90] It appointed a Southern Shark Independent Allocation Review Panel (“SSIAR Panel”) to review, reconsider and report to the AFMA Board regarding the allocation of School Shark and Gummy Shark for the SSF. Based on the evidence of Ms Margot Sachse, the Manager of the GHATF,[91] I find that the SSIAR Panel, comprising the Honourable John Lockhart and an economist, Mr David Purcell, held port meetings in six venues across the eastern States and received 90 submissions. It was asked to advise the AFMA Board on the formula appropriate for allocating School Shark and Gummy Shark ITQs among individual operators. That formula had to take account of its findings regarding the operators’ relative economic positions after taking into account the value of their SSF permits and any other considerations arising from its consultations with industry.
[89] (2003) 127 FCR 436
[90](2002) 71 ALD 665
[91] Exhibit 2

In October 2003, the SSIAR Panel reported back to the AFMA Board. I find that the SSIAR Panel concluded that the relative economic position of permit holders in the SSF prior to the introduction of ITQs was a function of both the value of the permit, as representing an entitlement to fish, and the catch history, as representing the value of the income stream derived from the utilisation of the permit. Except for those operators who held a shark permit as a result of the OCS Arrangements, it recommended that the following formula be adopted to take account of both aspects:
“(a) The value of the permit based on the amounts established under the buyback scheme adjusted using the applicable discount rate to 2003 dollars (that is, $8,000.00 per gillnet and $25.00 per hook as established under the SSFIDF …); and
(b)The quantum of catch history based on the best three years in the period 1994 – 1997 …”[92]

For those operators who held a shark permit as a result of the OCS Arrangements, the SSIAR Panel recommended that the 2001 allocation formula remain based solely on the best three years in the period 1994 to 1997. The rationale for its recommendation had been that the State shark concessions had not been transferable. On 17 October 2003, the AFMA Board accepted the SSIAR Panel’s recommendations and they became AFMA’s formal policy in respect of the ITQ allocation.

THE EVIDENCE

[92] Exhibit 2 at [72(a)]

Lease of permit to Mr Smith

Mr Gilmore said that he leased his licence to Mr Kym Smith, who has since died. Mr Gilmore said that he leased his permit to Mr Kym Smith for the period from October 1994 to July 1995 for a sum of $87,000. That figure was shown in his income tax return for the year ended 30 June 1995.[93] There was no written lease, Mr Gilmore said. A written lease was unnecessary as Mr Smith paid all of the money at the outset. When asked whether he regarded this as an appropriate way in which to conduct business, Mr Gilmore replied that he thought it was. Mr Smith had seemed happy with the arrangement as he had wanted the shark endorsements. Mr Gilmore had been happy as he had not wanted to chase the money at a later stage. He had entered written agreements in the past and had ended up in court. They had no agreement about Mr Smith’s filling out all necessary records but, if Mr Smith did not complete them, penalties would have been imposed on Mr Gilmore.
[93] Exhibit C, item 48

Mr Michael Tonkin wrote a letter dated 15 June 2001.[94] He said that he skippered Mr Smith’s boat, the Aurora, from the end of October 1994 until July 1995. He caught quantities of shark and scale fish, which he diligently recorded on the Daily Log, and sold them to the Fish Factory. I note that he signed the Daily Log for the months of January to June 1995.[95] He recorded that he sold the fish to the Fish Factory for the months of January and February 1995 and to Famazos Fish for the remaining months in the period. Dockets in the materials are dated in 1997 and are headed “Fish Factory” followed by the words “Pty Ltd Famazos”.[96]
[94] Exhibit 1 at 305
[95] Exhibit H
[96] Exhibit 1 at 275-281

The records of shark caught on Mr Gilmore’s permit

Mr Gilmore said that he recorded in his taxation returns the amount that he received for the sale of his fish. He did not keep detailed records in accordance with any requirement of the Income Tax Assessment Act 1936 (“ITA Act”). He had a permit from the South Australian Fisheries Department permitting him to sell fish from his boat directly to the public. He did not need a fish processors’ licence for those sales for which he received between $2,000 and $3,000 each year.

Mr Gilmore said that the log books were sent back to him without the entries for July 1995. He believed that Mr Tonkin had completed those for April and June 1995 and that he had been competent and diligent in doing so. Rather than risk losing the catch, he telephoned Mr Smith, who put him onto the skipper. The skipper told him that he had caught fish and told him the weight and condition of the fish caught as well as the days on which they were caught and the area. Mr Gilmore said that he understood that Mr Smith used several boats to fish and, often, fish would arrive at the dock from more than one of his boats at the same time. Mr Toumazos, of the Fish Factory, wrote a letter dated 6 June 2001 stating that he believed that the fish he purchased from the end of October 1994 until the end of July 1995 were from Mr Smith’s boat, the Aurora, fishing with Mr Gilmore’s licence.[97] The last words that Mr Smith had said to him before his sudden death were that he had better get some catch history to him for his quota.
[97] Exhibit 1 at 304

Mr Gilmore said that he could not recall when he had completed the entries for July 1995. It is possible that he did so when he received a letter from the South Australian Research and Development Institute (“SARDI”). When he asked Mr Tonkin for the fish he caught in July 1995, Mr Gilmore presumed that Mr Tonkin had looked at his sales and his last cheque. He could not recall whether Mr Tonkin gave him all of the information in one conversation or not. Mr Gilmore believed that Mr Tonkin had undertaken the task diligently.

Mr Tonkin, who has worked in the fishing industry for 25 years, said that he had worked as a skipper and owner/operator for the last 20 of those years. He worked as a skipper for the late Mr Smith in 1994 on a boat fishing with Mr Gilmore’s permit. That boat might have been the Aurora for the crayfish season but he was on different boats for other parts of the year. Mr Tonkin said that he filled out the Daily Logs required by the South Australian Department of Fisheries and submitted them to Mr Smith each month. He could not recall Mr Gilmore’s getting in touch with him to ask him about the Daily Log for July 1995. Later, in re-examination, Mr Tonkin said that he did not fish for shark in the first two months as the shark reel was not operating.

When he sold the fish from the boat, he thought that he would have sold them under a company name associated with Mr Smith. There were two companies that he was aware of: Bookman and KGK Transport. In the main, Mr Tonkin said, he sold the fish to the Fish Factory. Usually, though, Mr Smith met the boat at the dock. He would decide to whom the fish were sold and their price. Mr Tonkin completed the Daily Logs from the Fish Factory dockets given to him by Mr Smith at the end of the month. Daily Logs had to be submitted by the 15^th of each month and, after he had submitted them, Mr Tonkin returned the dockets to Mr Smith. He knew that Mr Smith sold some to a local hotel and to a private purchaser from the South East of South Australia but sales were a matter for Mr Smith.

The heading of each Daily Log in the period January 1994 to December 1997 had been changed to read “South Australian Commercial Fishing Monthly”. Mr Gilmore signed each of them but had crossed out the printed words preceding the space for his signature. Those words read “I certify that the information on this form is complete and correct”.[98] Mr Gilmore said that he had been told by Dr Rob Lewis of SARDI at several meetings that he could cross out those words. He rejected Ms Mortimer’s suggestion that, by crossing out the words, he was consciously asserting that the information was not correct and complete. His point in crossing them out was that the information might be passed on to somebody else as correct and he did not want any such person to pass it on. He wanted to go along with what every body else did. In response to the suggestion that this did not make sense if the information was in fact reliable, Mr Gilmore said that people might think that the information might be given to the Family Court or the Australian Taxation Office (“ATO”). In his own situation, he did not know whether he would be happy for the ATO to get hold of the information. The records reflected his catch and not his income although he acknowledged that he derived income from his catch. Dr Lewis knew that the information was correct and complete.
[98] Exhibit E

Each Daily Log showed only the number of days fished in each month in that period and the total landed catch and condition of a number of species of fish including School Shark and Gummy Shark. In the month of January 1994, the names of the species were written in Mr Gilmore’s hand. Mr Gilmore said that he had “no idea” whether he had gone out on the boat in January 1994. The Daily Log had not been filled out at sea but either on the boat or at home. In the main, he filled them out at home from the cheques he received and his daily notes. The daily notes were kept by whoever was on the boat when the fish were caught; either him or a skipper. There was nothing scientific about the daily notes as they simply recorded the catch shot by shot. They recorded the number of shark caught on each shot. That was the normal way of doing it as it was not possible to weigh fish at sea. An estimate could be made at sea but otherwise they were weighed when they were landed and purchased. The estimate of weight depended on the size of the shark and was that there were either 90 or 100 to 104 sharks to the tonne.

From 1 July 1997, Mr Gilmore was required to complete a return known as the “Australian General Confidential Daily Fishing Log – GN01” (“the GNO1”).[99] It required details of the species caught in Commonwealth or State waters and the area in which they were caught on a shot by shot basis. The form required the weight of the catch to be estimated and details of unloading and the purchaser to be recorded.
[99] Exhibit 3 at MS1

Mr Gilmore acknowledged that he had altered some of the dockets he had been given from the Fish Factory. He had added the word “shark” to docket no. 1160, dated 7 March 1997, after crossing out a word that is now illegible and he could not recall.[100] To docket No. 1134, dated 24 February 1997, he had added the words “130kg shark” and had crossed out one of the entries, and so reduced the weight, previously shown for crayfish.[101] He did the same with docket No. 659, dated 22 July 1997[102] and docket No. 1402, dated 21 November 1997.[103] Mr Gilmore said that he had made the alterations to make the point to AFMA that documents could be altered. He had not told AFMA that he did so for that reason but instead presented them as genuine documents and relied on them to verify his catch history. He had thought that Gummy Shark were not under threat but knew that School Shark were. Because School Shark were under threat, there was a limit on the number of nets that could be in the water as the greater the number of nets, the greater the possibility that School Shark would be caught.
[100] Exhibit 1 at 278
[101] Exhibit 1 at 279
[102] Exhibit 1 at 280
[103] Exhibit 1 at 281

Mr Gilmore did not hesitate to agree that he had been dishonest. When he had submitted his Claim for Shark Catch History, he had not read the note at the bottom of the first page. That note was to the effect that it was an offence under the Act for a person to make a statement or furnish information that was to that person’s knowledge false or misleading in any particular.[104]
[104] Exhibit A at 1

In a note dated 16 November 1999, Ms Sachse recorded that:
“Mr Gilmore had objections to the catch verification process. While he clearly understood the ‘General Consent and Declaration Form’ he would not sign it without making alterations.
Mr Gilmore claimed that he had enough power with his fish buyers to convince them to write dockets that matched amounts deposited into his bank accounts between 1994-1997. He said that these amounts would be for the sale of crays, but we wouldn’t know that when he produced dockets backdated purporting to be sales of sharks.”[105]
[105] Exhibit 3, MS4

In cross-examination, Mr Gilmore agreed that he had made a statement to this effect to members of the catch verification team. Most fishermen, including he, had the power with any fish buyer, he maintained. He wanted AFMA to know that this was possible.

Mr Gilmore said in a letter dated 11 January 2001 that the lessee had diligently filled out the Daily Log as he was required to do under South Australian law.[106] In cross-examination, he agreed that Mr Smith, the lessee, had not completed them but Mr Tonkin had completed them as I have already mentioned above.[107] Mr Gilmore said in his letter that recovering the sales dockets would be nearly impossible but he agreed in cross-examination that he had not tried to recover them at all. He had made no approach to Mr Smith’s widow and, at the time he wrote his letter had not been back to the Fish Factory to obtain copies of any dockets. At the time he wrote his letter, he had been unaware that other fishermen had leased their licences to Mr Smith.
[106] Exhibit 1 at 291
[107] at [63] and [65]

Mr Gilmore asked that his claimed catch be verified only against his Daily Logs. When he wrote his letter, he knew that his proposal was directly contrary to AFMA’s verification policy. He believed that verifying his claimed catch history against log books is the fairest way and continues to hold that view. Mr Gilmore does so on the basis that the Daily Logs had been lodged either at the time the fish were caught or soon afterwards. Failure to complete them was punishable by a fine for a first offence, licence suspension for a second and licence cancellation for a third. They were submitted to a government agency and could not be altered. Other documents might be created at a time close to the fish being caught but his point was that those documents could be altered.

Mr Gilmore accepted that he “very possibly” had a conversation with Ms Trish Stone on 12 February 2001 and that he might have said the following even though “it’s not terribly accurate”:[108]
[108] transcript, 28 October 2004
“For one year his licence was leased
-skipper filled out logbooks
-but no documents – sold his shark for cash.
-1-2 tonnes over 6 months
Should not be relevant how they were sold – eg where there are no dockets b/c sold for cash.
Should accept his logbooks.”[109]

Mr Gilmore said that he had no idea whether Mr Smith had sold his shark for cash. He had sold some of his own for cash but he did not have any documentary records for those transactions. Each year, he would give his accountant an estimate of the amount he received for cash transactions and that figure was included in his income tax return.

[109] Exhibit 1 at 293

A statement issued by the Bank of South Australia,[110] shows the amount of $7,427.50 as paid into Mr Gilmore’s bank account on 17 February 1997. An invoice from Blancheport Fisheries is dated 18 February 1997 and shows that amount as paid to Mr Gilmore, $5,942.00 to his son, skipper and part owner, Mr DR Gilmore and $1,337.00 to Mr Larson, who was the deckhand at that time.[111] Mr Gilmore said that it was possible to read the invoice as having been written after the transaction in light of its date. It could also be read as being misdated. If it were being reconstructed, care would have been taken to use the correct date.
[110] Exhibit D, Attachment 4
[111] Exhibit 1 at 272

Invoice No. 11797 was also issued by Blancheport Fisheries and showed various amounts paid to Mr Gilmore, his son, Mr Larson and Mr J. Wright.[112] It recorded $7,525.22 as paid to Mr Gilmore on 10 January 1997 and the fish as being received on 8 January 1997. A total of 2,143kg of small flake was recorded by Blancheport Fisheries. When asked to identify that catch on his Daily Logs, Mr Gilmore pointed to 770kg of Gummy Shark and 120kg of School Shark and 67kg of Bronze Whaler caught in five days in December 1996.[113] As far as January 1997 was concerned, he could not identify from the Daily Logs whether the shark were caught before or after 8 January 1997. There was no way, Mr Gilmore said, that he could identify from the Daily Logs what fish were caught on which day. He explained that:
“… it is basically impossible to tell what dockets match with what records in log books as far as the time goes because the log books are monthly and the dockets are paid at … the end of a trip or a series of trips, whenever you went in and decided to get paid. The dockets that you see, in a lot of cases, aren’t the actual dockets of the fish that were received but they could be an addition of several receipt books … if you unload four times and you don’t bother to get paid, the final docket that is written out is what you get paid for. Now, when you are working two fisheries you often unload every day.”[114]

Mr Gilmore said that he had not personally fished for shark since 1993 or 1994 or even some time before that.

[112] Exhibit 1 at 273

[113] Exhibit E

[114] transcript

AFMA’s policy

Ms Sachse said that AFMA has rejected claims where fishermen relied only on logbooks and did not support their claims with receipts or landings or dockets from those receiving the fish. The logbooks are regarded as secondary documentation and the other documents as primary documentation. There have been about half a dozen fishermen whose claims have been rejected on this basis. Others have had them rejected when they have been able to supply only photocopies of primary documentation such as dockets but have not been able to match the payments on the dockets with any banking records. Fewer than five fishermen have had their claims rejected on that basis. Photocopied records have also been rejected when another family member has relied on the originals of those documents to support a separate claim for catch history. Others have been rejected on the basis that the dockets showed an Australian Business Number (“ABN”) but were dated during a period before ABNs had been introduced. ABNs were introduced by the A New Tax System (Australian Business Number) Act 1999 with effect from 8 July 1999 and so quite some time after the years of 1994 to 1997 with which catch history is concerned. If a fishermen relied on catch that had been sold for cash and for which there were no records, AFMA rejected the claim.

Sale of permit

Mr Gilmore has since sold his permit for $40,000 with a further $5,000 for his South Australian rock lobster endorsement on his State marine scale licence. Initially, he had sold only his rock lobster endorsement and State licence to Mr Andrew Ferguson. He then understood that the two could not be separated and Mr Ferguson wanted the permit in his name as well. Neither Mr Gilmore nor Mr Ferguson fished for shark in this time.

CONSIDERATION

In so far as policy is concerned, there are instances in which the Tribunal is bound to have regard to policy lawfully formulated by the Executive Government[115] and others as part of the factual matrix.[116] This case requires me to consider whether I can have regard to AFMA’s policy in reviewing the condition on Mr Gilmore’s permit and, if so, what that policy is. The policy that was followed in 2001 allocating Mr Gilmore the quota that formed one of the conditions of his permit has been found wanting by Ryan J in the Federal Court. Ryan J had found that, in developing the policy, the Southern Shark Allocation Advisory Panel:
“… had proceeded on an assumption, contrary, as I have found, to the facts and the preferable legal analysis, that the permits were entirely non-transferable. … Once it is acknowledged that the permits could be transferred, even in limited circumstances, or that there were rights which could be carved out and alienated by the permit holder for commercial advantage, it follows that there were considerations which AFMA should have taken into account, but did not, in allocating the new ITQs. That is not to say … that those considerations should be decisive in arriving at the correct and preferable decision.”[117]

I am bound by his Honour’s judgment and so unable to apply the policy developed in 2001. At the same time, AFMA’s 2004 policy is not applicable as it has been applied only to operators in the Commonwealth sector of the SSF and not to those operating only in State waters.

[115] e.g. Migration Act 1958, s. 499

[116] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 645 per Brennan J, President

[117] Australian Fisheries Management Authority v Graham (2003) 127 FCR 436 at 452 per Ryan J

Even though the policies developed in 2001 and 2004 are inapplicable, that does not mean that the Tribunal is free to make its decision on any basis that it thinks fit. Certainly, in providing that a permit is subject to such conditions as are specified in the permit, s. 32(6)(a) of the Act does not place any apparent constraints upon AFMA’s, and so the Tribunal’s, discretion to specify conditions. There are, however, constraints and they are found by reference to the policy of the Act and its provisions.[118] That policy may, in some cases, also be gleaned from the extrinsic material such as the Minister’s Second Reading Speech.[119]
[118] Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 205 and see also Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J and 602; 80 per Smithers J
[119] Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265 at 375-6; 271-2, per Woodward J

I have set out the Act’s objectives above.[120] On their face, those objectives would seem difficult, if not impossible, to achieve in every case. That impression is consistent with the conclusion reached by Ryan J in Australian Fisheries Management Authority v Graham when he said of s. 3(1) that “The provision is exhortatory, and each objective cannot be pursued with equal vigor at one and the same time. …”.[121]
[120] Act, s. 3(1) and see [14] above
[121] (2003) 127 FCR 436 at 451

There is also a question whether AFMA must have regard to those objectives in setting permit conditions. That was a matter considered by Branson J in PW Adams Pty Ltd v Australian Fisheries Management Authority,[122] Branson J considered whether AFMA must have regard to the objectives in s. 3, and in particular s. 3(1)(c), in considering the conditions to be specified in an individual fisherman’s fishing permit. After analysing the Act and the Administration Act, her Honour concluded that:
“… it is a misreading of the Administration Act and the Management Act, to suggest that it is a function of AFMA, within the meaning of those Acts, to determine the conditions to be specified in any individual fishing permit under s 32 of the Management Act. AFMA has the power to determine such conditions (s 32(6) of the Management Act). AFMA has a discretion to exercise such a power in the performance of its function to grant fishing permits pursuant to s 32 of the Management Act. Such a discretion must be exercised by AFMA in such a way that, in the performance of its function granting fishing licences, it pursues the objective, among other objectives, of ‘maximising economic efficiency in the exploitation of fishing resources’. …”[123]
[122] (1998) 49 ALD 68
[123] (1998) 49 ALD 68 at 76

The distinction between AFMA’s functions and its discretion to impose quota as a condition of issuing a licence to an individual operator was also considered by Branson J:
“Plainly, there is a difference between ‘maximising economic efficiency in the exploitation of fisheries resources’ and maximising the economic efficiency of individual participants in the fishing industry. The objectives of AFMA are objectives intended to be pursued in the public interest; they are not intended to require AFMA to pursue, assuming that it would be possible for it to do so, the separate interests of individual participants in the fishing industry. Of course, in many circumstances, the respective interests of individual participants in the fishing industry and the public interests which AFMA is required by its objectives to pursue in the performance or its functions will be consistent. In some circumstances they will not be consistent.”[124]

As Ryan J observed, though, in the later case of Australian Fisheries Management Authority v Graham, that does not mean “… that the economic effect on participants in the industry is irrelevant to a decision to be taken by AFMA in the management of a fishery.”[125]

[124] (1998) 49 ALD 68 at 76-77

[125] (2003) 127 FCR 436 at 451

In summary, while AFMA is not under any obligation to take into account the interests of individual operators in carrying out its functions according to the objectives in s. 3(1) of the Act, it will not carry out those objectives, or some of them, without having some regard to the interests of individual operators. It will not, for example, achieve its objective of maximising economic efficiency in the exploitation of fisheries resources[126] when changing the management of a fishery if its decision results in injustice to an individual operator[127] and that injustice is not supported by another objective.[128]
[126] Act, s. 3(1)(c)
[127] Australian Fisheries Management Authority v Graham (2003) 127 FCR 436 at 452 per Ryan J
[128] Bannister Quest Pty Ltd v Australian Fisheries Management Authority (1997) 77 FCR 503 at 549-550 per Drummond J

I have used the word “injustice” because it is the word used by Ryan J in Australian Fisheries Management Authority v Graham. It is a word whose meaning is simple enough – a “… wrong; unfairness …”.[129] But what is regarded as a wrong or an unfairness can vary so much from person to person. What is unjust to one person may not be seen that way by another. One person may suffer, or perceive to suffer, an injustice but others in a similar situation may not. In the context of the Act, whether there is injustice to the individual must be assessed by reference to the objectives governing the way in which AFMA’s functions are carried out. As AFMA states in its FMP No. 8,[130] any management changes must be made, among others, on the premiss that:
“any differential economic impacts of allocations on individual fishing concession holders are minimised unless there are reasons, justifiable with respect to AFMA’s legislative objectives, that dictate otherwise.”[131]
[129] 2002, Shorter Oxford English Dictionary, 5^th edition
[130] T documents at 165-169
[131] T documents at 167

Mr Gilmore does not challenge AFMA’s policy that the ITQ for each fisherman should be assessed, in part, by reference to his catch history in his best three years from 1994 to 1997. What he challenges is that it should also be assessed by reference to his best three verified annual catches in those years. This is the submission that was made in Re Markellos and Australian Fisheries Management Authority.[132] The view that I have reached in this case regarding the general principles to be applied is the same as in that:
“95.               In reviewing the ITQ allocated to Mr Markellos, I have had regard to the principles that would normally guide my decision. Those guidelines would normally involve my having regard to any policy developed by AFMA although I am not limited to it. That follows from the fact that, although the Tribunal is not bound in this context to have regard to any of AFMA’s lawfully formulated policies,[133] any such policies are part of the factual matrix.[134] In view of Ryan J’s judgment in Australian Fisheries Management Authority v Graham,[135] I cannot have regard to AFMA’s policy that was followed in 2001 in allocating Mr Markellos’s ITQ.[136] At the same time, AFMA’s 2004 policy is not applicable as it has been applied only to operators in the Commonwealth sector of the SSF and not to those such as Mr Markellos operating in State waters.
96.                  In a case such as this, though, there is no need for me to consider the guidelines as a whole. Mr Lazarevich has disputed only one aspect of AFMA’s policy in formulating the ITQ. That aspect is the means by which the catch history used as a step in determining that ITQ is determined or, to use the language of AFMA, is verified. That is the aspect on which I need to focus.
97.                  When I do that, it is apparent that the resources of a fishery must be a critical factor in the development of any policy to manage that fishery. That is apparent from AFMA’s obligation to pursue an objective to ensure that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner that is consistent with, among others, ecologically sustainable development[137] and maximises the economic efficiency of that exploitation.[138] At the same time, it is clear that AFMA must make its decision in a manner that can be supported by reason and notions of fairness. Those factors are inherent in the requirement that AFMA pursue an objective of ensuring accountability to the Australian fishing industry and the Australian community.[139] In some instances, it is not possible for AFMA to pursue each objective in each decision that it makes.[140] This is not one of them. The history that I have set out shows, for example, that AFMA has developed its various policies having regard to scientific studies about the available fish stocks, the impact of fishing effort on those stocks and the steps required to preserve fish stocks at a sustainable level. It has attempted to ensure that sustainable levels are maintained by regulating the fishing effort either through the regulation of the equipment that fishermen can use or, more recently, through limiting the weight of each fisherman’s catch. In doing so, AFMA has also had regard to the economic consequences to fishermen of its measures in regulating and limiting their fishing efforts. That has followed from the principles in Australian Fisheries Management Authority v Graham.
98.                  It becomes apparent that the reliability of the information AFMA uses in developing its policy and in regulating the fishery is vital. If, for example, its information regarding the level of fish stocks does not accurately reflect the true situation, it may develop a policy that leads to overfishing to the extent that the fish stock is reduced to a level below a sustainable level. Alternatively, it may develop a policy that unnecessarily limits fishermen’s rights to fish and so their income. That. in turn, might not maximise the economic efficiency in the exploitation of fisheries resources. The accuracy of the information that AFMA uses is equally important in applying its policy. If it is not accurate, the application of the policy could lead to overfishing of the fish stock and so to unsustainable ecological development of the fishery. If inaccurate information leads to under fishing of the fishery, it is hard to say that AFMA has maximised the economic efficiency in the exploitation of fisheries resources. Inaccurate information may also lead to inequities between fishermen were one fisherman permitted to catch a greater share of the TAC than would be permitted by the proper administration of the policy. Inequities of that sort would undermine the confidence of other fishermen and the Australian community in the system as they would undermine the relative economic position of those who were previously engaged in shark fishing in the various sectors of the SSF.
99.                  Given that fishing is a human activity conducted in often trying conditions, it is difficult to compile records of a catch with precision while a fisherman is on board his vessel. This finding is supported by the evidence in this case and recorded in Mr Markellos’s records. Mr Markellos himself said that he estimated the weight of his catch while on board. He was very confident of his ability to estimate it accurately and that may well be so. Others, though, may not be as good or as careful at the task as he believes himself to be even though they may share his confidence. This in itself is a sound reason for requiring fishermen to provide further information supporting their own records whether maintained at sea or prepared subsequently.
100.                The verification policy is based on this sort of philosophy. Although it distinguishes between primary and supporting documents and places greater reliance on primary documents, the policy does allow some flexibility in the documents that it will accept. The limits of flexibility are prescribed by the need for the documents, either alone or when taken with other documents, to establish four matters: a relationship between the catch and the concession by referring to the boat, skipper or concession holder; the year of the catch if not the precise date; the weight and/or the total price paid for each shark species; and that payment was received for the catch. There is some emphasis on the type of shark that has been caught and that must be so given AFMA’s regulation of particular species of shark in the fishery. AFMA has placed primary weight on documents that evidence dealings between the fisherman and third parties regarding dealings with his catch rather than on documents prepared solely by a fisherman recording his catch. The former sorts of documents are more likely to reflect on all four matters that are being looked for. The latter sort are more likely to reflect on the first two but not on the weight, price per kilogram of the fish or that payment was received. Payment for the catch as well as the catch itself is important given that AFMA is charged with having regard to maximising the economic efficiency of the fishery. It is not charged with the regulation of recreational fishing.”
[132] [2005] AATA 914
[133] e.g. Migration Act 1958, s. 499
[134] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 645 per Brennan J, President
[135] (2003) 127 FCR 436 at 452 per Ryan J
[136] My reasons are set out in Re Howard and Australian Fisheries and Management Authority [2005] AATA 360
[137] Act, s. 3(1)(b)
[138] Act, s. 3(1)(c)
[139] Act, s. 3(1)(d)
[140] This is consistent with the conclusion reached by Ryan J in Australian Fisheries Management Authority v Graham (2003) 127 FCR 436 at 451 when he said of s. 3(1) that “The provision is exhortatory, and each objective cannot be pursued with equal vigour at one and the same time. …”

Although there was no written lease, I am satisfied that Mr Gilmore leased his permit to Mr Smith during the period October 1994 to June or July 1995. I say June or July 1995 because Mr Tonkin stated that the lease was until July 1995 but he completed the Daily Log only until June 1995.

In this case, Mr Gilmore has asked me to have regard only to the Daily Logs completed in respect of the time during which he had leased his permit to Mr Smith. On the basis of his evidence, I find that, to the extent that Mr Gilmore has tried to find dockets in support of the entries in the Daily Logs, his efforts have not been successful in relation to this period. I find that he has not approached Mr Smith’s widow for her assistance and has not approached the Fish Factory or other fish processors to whom Mr Smith might have sold his fish. Given that he lodged his claim for catch history in 1999, it could be expected that the records would still have been available given the obligation under s. 262A of the ITA Act to retain records. . In general terms, s. 262A of the ITA Act requires that “… a person carrying on business must keep records that record and explain all transactions and other acts engaged in by the person that are relevant for any purpose of this Act”.[141] A “business” is defined to include “… any profession, trade, employment, vocation or calling, but does not include occupation as an employee”.[142] The records that must be kept include any documents that are relevant for the purpose of ascertaining the fisherman’s income and expenditure[143] and they must be kept to enable his or her liability under the ITA Act to be readily ascertained.[144] Although there are exceptions requiring a longer period, a person is required to keep the records for five years after they were prepared or obtained or after completion of the transactions to which they relate.[145] The Income Tax Assessment Act 1997, which came into operation on 1 July 1997, continues to require the records to be kept in this way.[146]
[141] ITA Act, s. 262A(1)
[142] ITA Act, s. 6(1)
[143] ITA Act, s. 262A(2)(a)
[144] ITA Act, s. 262A(3)(b)
[145] ITA Act, s. 262A(4)
[146] Income Tax Assessment Act 1997, s. 3-10(1)

The evidence that I do have as to the sale of School Shark and Gummy Shark is nebulous. Mr Tonkin was the skipper of Mr Smith’s boat using Mr Gilmore’s permit to fish for shark. I accept that he did not do so for the whole of the lease period and base that finding on his evidence the shark reel was not working for part of the period as well as on the fact that he only completed Daily Logs for six months and not for the full period of the lease. I accept that he was diligent in his efforts to complete the Daily Logs correctly. I accept his record of the Fish Dealer or Fish Processor to whom the fish was sold as it is recorded at or about the time of the transaction. On the basis that Famazos Pty Ltd and the Fish Factory are the same entity, I accept that they were sold to the Fish Factory during the period January to June 1995. That is consistent with the letter written much later in 2001 by Mr Toumazos, of the Fish Factory.

The fact that Mr Toumazos has supported Mr Tonkin’s evidence is not sufficient. Both go to some extent towards establishing a relationship between the catch and Mr Gilmore’s permit. I say to some extent because there is some doubt whether all of the School Shark and Gummy Shark that Mr Smith sold to the Fish Factory was caught with Mr Gilmore’s permit. That doubt comes from Mr Tonkin’s evidence that he competed the Daily Logs from Fish Factory dockets given to him by Mr Smith at the end of each month but that he knew that not all of Mr Smith’s sales were made to the Fish Factory; some were made to a local hotel and to a buyer from the South East.

Without the Fish Factory dockets, the evidence does not go anyway towards establishing the total price paid for each shark species or that payment was received for the catch. Both elements are essential in the verification process in view of AFMA’s being required to have regard to maximising the economic efficiency of the fishery.

Quite apart from these matters, Mr Gilmore has himself illustrated why it is essential to have more than one source of documentary evidence in order to trace the fish caught on a permit through their sale to the cash received for them. He has provided several illustrations. One is his admission that he altered dockets. That illustrates the need for more than one source of material to support the claim. One may be altered but, if it has to be fitted into a pattern and part of that pattern is provided by documents provided by third parties, the less likelihood that there will be that alterations will occur. The second illustration comes from his evidence that he and other operators had enough power with fish buyers to convince them to write dockets that matched amounts deposited into their bank accounts between 1994-1997 and that purported to be for the sale of shark when they were for the sale of another species. If this were true, and I have no evidence regarding it other than Mr Gilmore’s claim, it would be a very serious matter indeed. In this context, it simply illustrates that it is essential that catch records, such as those shown in a Daily Log, are supported by other material. Just as the dockets would not be sufficient on their own, nor is the Daily Log. Both are essential elements in tracing the School Shark and Gummy Shark from being caught on the permit to their sale.

In view of the business framework within which he operated, it is reasonable to expect that Mr Gilmore would have maintained and retained records to show his income and expenditure during the previous five years. Furthermore, it is reasonable to expect that Mr Gilmore would have kept “records that record and explain all transactions and other acts …”[147] involved in earning his income. He chose not to enter a written lease when he entered his agreement with Mr Smith. He chose not to require Mr Smith to maintain certain records regarding his catch. No doubt, that arrangement had some attraction for him at the time but it has added to his difficulties in producing documentary support for his claim.
[147] ITA Act, s. 262A(1)

In view of the matters that I have raised, I am not satisfied that Mr Gilmore should be able to verify his catch history by reference to his Daily Logs alone. For the reasons I have given, it would be unsafe to permit him to do so for they do not establish the necessary links between catch on the permit and sale. Furthermore, it would be grossly unfair to other operators in the SSF to permit him to do so. They have been allocated ITQs on the basis of their catch histories that have not only been claimed, as is effectively Mr Gilmore’s situation, but verified by reference to other material including third party material. Again for the reasons that I have given, it is appropriate that the verification policy apply equally to Mr Gilmore’s claim as to theirs. There is nothing that makes his circumstances special and justifying any change. Other operators have been refused all or part of their claimed catch histories because they have not been able to produce documents to verify them. Unfortunately, Mr Gilmore finds himself in the same position

Having regard to the agreement that has been reached between the parties and to the reasons I have set out above, I:
1.vary the decision of a delegate of the respondent dated 20 May 2002 setting aside a decision dated 21 December 2000 and substituting a new decision by:
(a)omitting the references in the condition attached to the permit issued to the applicant to:
(i)the trunked weight equivalent of 672kg of School Shark units and 3,784kg of Gummy Shark units; and
(ii)an Individual Transferable Quota (“ITQ”) for the 2002 fishing season of 504.50kg of School Shark and 2,916.59kg of Gummy Shark; and
(b)substituting a reference in the condition to:
(i)a new ITQ of 861 units of School Shark and 5,276 units of Gummy Shark; and
2.otherwise affirm the decision dated 20 May 2002.
I certify that the ninety-nine preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,

Signed: …………………....................................

Nathaniel Wills Associate

Dates of Hearing  27 and 28 May 2004,
10 to 13 August 2004
Date of Decision  27 September 2005
For the Applicant  self represented
Counsel for the Respondent         Ms. D. Mortimer

Solicitor for the Respondent Ms A. Dornau
Dibbs Abbott Stillman