Growers Wine Group Pty Ltd and Wine Australia

[2019] AATA 3274

Growers Wine Group Pty Ltd and Wine Australia [2019] AATA 3274 (2 September 2019)

Division:GENERAL DIVISION

File Number(s):      2019/4926

Re:Growers Wine Group Pty Ltd

APPLICANT

Wine AustraliaAnd  

RESPONDENT

DECISION

Tribunal:Deputy President P Britten-Jones

Date:2 September 2019

Place:Adelaide

The application for a stay dated 14 August 2019 is refused.

..........................[sgnd]........................

Deputy President P Britten-Jones

CATCHWORDS

Administrative Appeals Tribunal – Practice – Application for stay of decision – Decision of Wine Australia to cancel wine export licence – Interests of Australian wine industry outweigh interests of the applicant – Administrative Appeals Tribunal Act 1975, s 41(2)

LEGISLATION

Administrative Appeals Tribunal Act 1975, s 41(2)
Wine Australia Act 2013, ss 3, 37J, 39A, 40E
Wine Australia Regulations 2018, ss 9, 13

REASONS FOR DECISION

Deputy President P Britten-Jones

2 September 2019

1. This is Growers Wine Group Pty Ltd’s (“the Applicant”) application for a stay of Wine Australia’s (“the Respondent”) decision of 9 August 2019 to cancel the wine export licence of the applicant.

2. The Applicant has filed with the Tribunal an application for review of that decision. The Tribunal has granted the parties an expedited hearing of that review, listing it for four days from 1 October 2019.

3. The Tribunal has power under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) to make orders staying or otherwise affecting the operation or implementation of the decision for the purpose of securing the effectiveness of the hearing and determination of the application for review. The Tribunal has discretion to grant a stay if it is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review.

4. Section 41(1) of the AAT Act makes it clear that lodging an application for review does not itself provide a ground for support of a stay. I must be of the opinion that it is desirable to grant a stay. Before reaching this opinion, I must take into account the interests of any persons affected by the review. Those interests are to be identified by reference to the statutory scheme under which the decision under review was made.[1] In the case of a cancellation of a wine export licence the statutory scheme is the Wine Australia Act 2013 (Cth) (“the WA Act”) and the Wine Australia Regulations 2018 (“the Regulations”).

   [1] Australian Securities & Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130, [50]–[51]

5. The WA Act sets out its objects in s 3 which include:

   (aa)     to support the growth of the wine industry…; and

   (b)      to control the export of grape products from Australia; and

   (c)to promote the consumption and sale of grape products, both in Australia and overseas; and

   (d)to enable Australia to fulfil its obligations under prescribed wine-trading agreements and other international agreements.

6. A further relevant object relates to the label integrity program in Part VIA of the WA Act. Section 39A states:

   The object of this Part is to advance the objects of this Act by helping to ensure the truth, and the reputation for truthfulness, of statements made on wine labels, or made for commercial purposes in other ways, about the vintage, variety or geographical indication of wine manufactured in Australia.

7. The Respondent has found that the Applicant has committed contraventions of ss 39J(1), (2) and (3) relating to record keeping requirements in Part VIA of the WA Act.

8. The statutory scheme in Part VIB at s 40E also provides for an offence if a person sells or exports wine with a misleading description and presentation. The Respondent has found that the Applicant contravened s 40E with respect to its sales of Shiraz, Chardonnay and Sauvignon Blanc.

9. The Respondent has exercised its power under s 13(1) of the Regulations to cancel the applicant’s licence to export on the basis of the contraventions and that there has been a material change in the applicant in relation to a matter mentioned in s 9(3) of the Regulations. The respondent points to ss 9(3)(d), (e) and (g) setting out matters to be considered in deciding whether to grant a licence, namely:

   (d)any matter relating to the applicant that may adversely affect the export trade in grape products;

   (e)any other matter relating to the promotion of the export of grape products that relates to the applicant;

   …

   (g)      whether the applicant is a fit and proper person.

10. With this statutory scheme in mind, I consider that those persons affected by the grant of a stay go beyond the Applicant and its employees, customers and suppliers. It extends to actors in the broader wine industry whose interests will be affected if the reputation of the Australian wine industry is harmed.

11. The Applicant does not deny certain contraventions of s 39J(3) and s 40E of the WA Act which it says were caused by the ex-CEO, Mr Mayfield, who has since been removed. Now that the one “bad egg” has been removed, the Applicant argues that there is no issue with respect to the ongoing staff who have been instrumental in ensuring ongoing compliance since the conduct of Mr Mayfield was identified and he was removed. In these circumstances, the Applicant argues that it is a fit and proper person to hold a licence and that the decision cancelling the export licence was not the correct or preferable one.

12. I have had the benefit of affidavits from the current CEO of the Applicant and from Stephen Guy, the General Manager Market Access of the respondent. I have also had access to the documents lodged under s 37 of the AAT Act by the Respondent.

13. Of course, the Tribunal is not to conduct a mini trial at this stage and is not to make concluded findings of fact on this application. An important issue for determination on the review application will be the extent of any involvement (if any) of the remaining staff in contraventions by the Applicant. Counsel for the Respondent took me to documentation relevant to that issue but I am not in a position to determine that issue and I would not accept either the Applicant’s or the Respondent’s respective contentions of having good prospects of success.

14. Having said that, I am required to consider the prospects of success and the affidavit material does disclose circumstances which, if established in the substantive hearing, could at least provide a basis for success on the review application. However, those circumstances are highly contentious and no doubt will be the subject of rigorous cross-examination. Consequently, I am not in a position to conclude as to prospects of success other than to say on the material before me that it could not be said that the Applicant has poor prospects of success.

15. I will continue to consider those other factors outlined in the seminal decision of Re Scott and ASIC.[2]

    [2] (2009) 51 AAR 114

16. The next factor is the consequence for the Applicant of the refusal of a stay. The impact of this as a factor has significantly diminished due to the expedited hearing. The Applicant has significant quantities of wine contracted for export. It will not be able to fulfil some of those contracts if a stay is not granted. However, the Applicant would not have to cease all its operations because 30% of its customers are domestic. Some financial hardship would flow but the material does not disclose a significant risk of insolvency or liquidation.

17. Next are the public interest and the consequences for the Respondent if a stay is granted. I accept the contention of the Respondent that the interests of the broader wine industry are a relevant interest that needs to be considered. The reputation for integrity and truthfulness is integral to the Australian wine industry. The Applicant has admitted to numerous contraventions and it is in the interests of the Australian wine industry as a whole for the regulator to be seen to be taking enforceable action with respect to its findings. Ensuring compliance with the label integrity program in Part VIA of the WA Act and with the protection of geographical indications and other terms regime in Part VIB is critical for protecting the export trade in Australian wine. This is a significant factor which outweighs the Applicant’s interests.

18. I have already concluded that there is insufficient material for finding the Applicant would likely become insolvent or be wound up if a stay is not granted for the relatively short period before the review application can be determined. I conclude that the review would not be rendered nugatory if a stay is not granted.

19. Another relevant matter is that, since the decision on 9 August 2019, the Applicant has been able to continue to export. An indulgence of three weeks has been afforded to the applicant.

20. If a stay is not extended today then the Applicant will have to cease its exports pending any decision on the review application now listed for 1 October 2019. I note that the export licence of the Applicant was due to expire in any event tomorrow on 3 September 2019.

21. In all of these circumstances, I am not of the opinion that it is desirable to grant a stay. I do not consider that a stay is needed to secure the effectiveness of the hearing.

22. The application for stay dated 14 August 2019 is refused. I will give the Applicant until tomorrow to cease its exports. The interim stay made on 16 August 2019 will operate up to and including 3 September 2019.

I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Deputy President P Britten-Jones.

............................[sgnd]..........................

Associate

Dated: 2 September 2019

Dates of hearing:	30 August 2019
Representative for the Applicant	Mr M Douglas instructed by O’Loughlins Lawyers
Representative for the Respondent	Mr T Begbie instructed by Australian Government Solicitors