Kohlhoff and Department of Industry, Science and Resources

Case •

[2001] AATA 273

•

5 April 2001

DECISION AND REASONS FOR DECISION [2001] AATA 273

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2000/752

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      BRYAN KOHLHOFF         
  Applicant
           And    DEPARTMENT OF INDUSTRY, SCIENCE AND RESOURCES      
  Respondent

DECISION

Tribunal       The Hon R N J Purvis QC,  Deputy President

Date 5 April 2001

Place Sydney

Decision       The Tribunal affirms the decision under review.        
  ……………………………….
  R N J Purvis
  Deputy President
CATCHWORDS

  • Application for registration as registered shipbuilder – whether applicant is entitled to retrospective registration – whether applicant entitled to registration in respect of multiple periods, each period being one year – whether registered at all times during the construction or modification of a vessel – Minister's discretion to register applicant or cancel registration – whether applicant has capacity to successfully complete the construction or modification of bountiable vessels – prospective element of registration period

Bounty (Ships) Act 1989 – ss 4, 8, 17

REASONS FOR DECISION

The Hon R N J Purvis, QC Deputy President             
the application   

  1. The present application entails a consideration of the Bounty (Ships) Act 1989 ("the Act") and more particularly the construction to be placed upon the wording of section 17 of that Act.

  2. The issues for determination were identified by the Department of Industry, Science and Resources ("the Respondent") as:

    " Whether pursuant to section 17 of the Bounty (Ships) Act 1989… the Applicant is entitled to registration as a registered shipbuilder from 19 February 1998.
    In particular,
    (1) whether under section 17(3)(a)(i) of the Act the Applicant is entitled to registration in respect of a period which has fully expired (retrospective registration);
    (2) whether by way of an initial application the Applicant is entitled to registration in respect of multiple periods,  each period being one year."

  3. On 23 September 1999 Mr Bryan Kohlhoff, as the agent of Atlay Catamarans Universal Pty Ltd trading as Cougar Catamarans ("the Applicant") applied for registration as a registered shipbuilder under the Act. Initially the Applicant sought registration from 19 April 1996, this date being amended to 19 February 1998. On 20 April 2000 a delegate of the Respondent notified the Applicant of the decision that the Minister was unable to register an applicant retrospectively from a date that is more than one year from the date of the notice issued under subsection 17(3) of the Act.

  4. The Applicant was requested to advise a preferred one year registration period for the 23 September 1999 application "bearing in mind that it must be for a period that extends at least some time into the future".  This the Applicant did not do but maintained his view as to the possible retrospectivity of the legislation.

  5. In an annexure to his application to the Tribunal of the 16 May 2000, the Applicant stated that,

    "Application for registration of Atlay Catamarans Pty Ltd as a shipbuilder under section 17 of the Bounty (Ships) Act 1989 was made to AusIndustry, of the Department of Industry, Science and Resources, the administrator of the Act.
    The registration is to cover the building period of a bountiable vessel for which a claim for bounty was lodged in compliance with relevant section 11 of the Act. The building period of this vessel was from 19 February 1998 to 19 August 1998.
    The Department asserts that the Act does not permit retrospective registration to which I disagree and furthermore there has been exactly a similar instance when the Minister approved such an application."

the hearing

  1. At the hearing of the application before the Tribunal, the Applicant appeared on his own behalf, the Respondent being represented by Ms Judith Pownall an authorised officer of the Australian Government Solicitor.

  2. The documents lodged by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were received into evidence. The Applicant tendered written material which was marked as exhibits, namely:

Exhibit No  Description  Date         
A        Minute Paper with guidelines to the interpretation of Bounty Legislation     26 April 1990
B        Claim for Bounty Payment Form No 596 with attachments, and Shipbuilding Contract for Vessel No 115         lodged 8 March 2001 with Tribunal         

  1. The Tribunal was invited to determine the matter on the basis of the written material tendered before it together with submissions both oral and writing made by and on behalf of the parties.
    the now relevant facts

  2. The Applicant is a shipbuilder. On the 23 September 1999 an application for registration as a shipbuilder under the Act was received by the Respondent. The Applicant had been registered as a registered shipbuilder prior to that date and for the period 23 August 1994 to 22 August 1995.

  3. At the time of lodging the September 1999 application for registration, the Applicant advised that it had had a fisheries processing vessel under construction since April 1996 and that it sought registration with retrospective effect from 1 April 1996.  The Applicant later advised that the first invoice received in respect of such vessel was issued on the 19 April 1996.  The application for registration identified seven bountiable vessels completed or in the process of being completed during the period June 1996 to September 2000.  The Applicant, however, did not seek registration in respect of one of such vessels, which had been exported, to New Zealand. 

  4. On 3 December 1999 a delegate of the Respondent advised the Applicant that the application for registration from 19 April 1996 was not acceptable, and hence refused on the basis that the Act required a shipbuilder to seek registration for a period that extended at least for some time into the future. The Applicant was requested to reconsider the commencement date of the registration period that he sought so that it covered a 12 month period part of which extended into the future. On 22 February 1999 the Applicant amended the commencement date for retrospective registration from 19 April 1996 to 19 February 1998. Maintaining its position that registration was not available for the amended retrospective period, on 20 April 2000 the Respondent suggested to the Applicant that he nominate a later date from which the registration period for the application could commence. He declined to do so. On 24 May 2000 a delegate of the Respondent affirmed the decision to refuse to grant the application for retrospective registration.

  5. On 5 March 2001, during the currency of the hearing, the Applicant was granted leave to further amend his application thereby identifying only one bountiable vessel for registration under subsection 17(2) of the Act. That vessel was described as Yard No. 115 named "Cat Cocos", a 24 metre, aluminium, 150 passenger, twin hull ferry with an estimated total cost of $1,952,320. The relevant contract was dated 20 February 1998 and had made provision for the commencement date of construction to be 19 February 1998, the contract completion date the 19 August 1998. Construction of the vessel was completed on time.

  6. A claim for payment of bounty referable to the "Cat Cocos" was made under date 17 August 1999 (the date of lodgement is not known), five weeks prior to the relevant application for registration being lodged, namely the 23 September 1999.

  7. The Applicant does not now make a claim in respect of any other bountible vessel for the purpose of its application for registration under section 17 of the Act, other then the "Cat Cocos".
    the legislative frame work

  8. It is not necessary for the purpose of these reasons to outline the legislative history of the ships bounty scheme and various amendments to the Act that have occurred since its enactment. Suffice it to say that the Act provides for bounty to ship builders who meet the registration criteria and who construct or modify bountiable vessels in Australia initially from 1 July 1989 to 30 June 1995, the latter date being extended from time to time and now due to expire on 30 June 2004.

  9. In his Second Reading speech  in respect to the Bounty (Ships) Bill delivered on 5 April 1989, the then Minister inter alia said:

    "To be eligible to receive bounty, shipbuilding must meet the clearly defined registration criteria proposed in clause 17 of the Bill. These criteria have been introduced so that assistance is channelled towards those shipbuilders who have the potential to be world competitive…In 1984 the Government targeted the assistance to shipbuilders with a long-term commitment to their particular industry. The aim then as it is now was to create a world competitive industry capable of exporting and capable of long term survival with lowering levels of subsidy."

  10. The Minister also said:

    "The current legislation the Bounty (Ships) Act 1980 provides for a cash limited bounty assistance scheme to shipbuilders who commence construction of vessels prior to 30 June 1989. The proposed Bill will continue this form of assistance, at rates, which will be phased down until June 1995, when the bounty assistance is proposed to cease. The continued assistance for that period is considered essential so that this industry can continue to build on the significant gains in efficiency and competitiveness it has achieved over the last few yeas."

  11. A shipbuilder is entitled to be paid bounty under the Act if it was a registered shipbuilder at all times during the construction or modification of a vessel {subsections 8(3C) and 8(3D)(a)). Subsection 4(1) of the Act defines "registered shipbuilder" to mean "a person registered as a ship builder by the Minister under section 17 of this Act".

  12. Section 17 so far as it is relevant to this application provides:

"Registration of persons
(1) Subject to this section, a person may be registered under this section as a registered shipbuilder for the purposes of this Act.
(2) An application for registration under this section as a registered shipbuilder may be made to the Minister, in accordance with the appropriate approved form, by a person who carries out or proposes to carry out the construction or modification of bountiable vessels in Australia.
(3) Subject to subsections (6) and (8), where an application for registration is made under subsection (2) by a person who, in the opinion of the Minister, carries out or proposes to carry out the construction or modification of bountiable vessels in Australia, the Minister shall:

(a) Register the applicant as a registered shipbuilder by:

(i) signing a notice, in writing, stating that the applicant is registered as a registered shipbuilder for a period of one year commencing on such day, occurring after 30 June 1989, as is specified in the notice, whether that day occurs before, on, or after, the day of issue of the notice; and
(ii) causing the notice to be served on the applicant; or

(b) refuse to register the applicant as a registered shipbuilder and causing a notice in writing stating that the Minister has refused to register the applicant as a registered shipbuilder to be served on the applicant.

…
(5) The registration of a person in respect of whom the Minister has issued a notice under paragraph (3)(a) shall have effect in accordance with the terms of that notice.
(6) The Minister shall not register an applicant for registration unless:

(a) the applicant is a body corporate incorporated under a law of the Commonwealth or of a State or Territory;
(b) the applicant lodges, with the application, the documents set out in subsection (7);
(c )the applicant demonstrates, to the satisfaction of the Minister, that the applicant has technical and financial management skills necessary to ensure the successful completion of the construction or modification of bountiable vessels;
(d) the applicant demonstrates, to the satisfaction of the Minister, that during the period to which the application relates:

(i) the applicant will have access to such facilities, including a waterfront site, as are necessary for undertaking the construction or modification of bountiable vessels;
(ii) at least 75% of the applicant's activities will be devoted to the construction or modification of vessels of more than 150 but not more than 20,000 gross construction tons; and
(iii) the applicant will at all times have in its employment at least 40 persons involved in the business of constructing or modifying vessels referred to in subparagraph (ii) and at least one apprentice for every 8 tradespersons included within the 40 persons who are so involved; and

(e) the applicant complies with any other condition of registration that is specified in the regulations for the purpose of this paragraph.

(7) For the purposes of subsection (6), an applicant for registration shall lodge with the application:

(a)an independent auditor's report verifying the applicant's capacity:

(i) to fund the construction or modification of bountiable vessels; and
(ii) to meet all financial liabilities likely to be incurred by the applicant in connection with the construction or modification of bountiable vessels or with performance guarantees given in relation to bountiable vessels;

(b)a business plan that outlines:

(i) the applicant's current position in the world market for the construction or modification for bountiable vessels including a statement of the applicant's position in that market with respect to products and technology;
(ii) the applicant's business objectives over a period (in this subsection called the planning period) commencing at the start of the period to which the application relates and ending on the expiration of 5 years or of the period to which the Act applies, whichever first occurs, and the applicant's strategies for achieving those objectives;
(iii) the applicant's anticipated employment, investment and production levels during the planning period;
(iv) the applicant's plans for using bounty funds that are paid to the applicant; and
(v) the applicant's perception of how the phase-down in the rate of bounty will affect the applicant's business; and

(c) a statement estimating the amount of bounty to which the applicant believes the applicant will become entitled during the financial year in which the application is made and of the amounts of bounty to which the applicant is likely to become entitled during each subsequent financial year within the period to which the Act applies.

(8) The Minister may require an applicant for registration under this section to give such information as the Minister considers necessary for the purposes of this Act and may refuse to register the person unless the information is given to the satisfaction of the Minister.
(9) Where, at any time during a period of registration of a person as a registered shipbuilder, the Minister becomes satisfied that the person:

(a) no longer carries out the construction or modification of bountiable vessels n Australia;
(b) has ceased to be a body corporate referred to in paragraph (6)(a);
(c) no longer has the skills referred to in paragraph (6)(c);
(d) no longer meets a requirement referred to in subparagraph (6)(d)(i),
ii) or (iii); or
(e) has ceased to comply with any other condition of registration or of renewal of registration specified in accordance with paragraph (6)(e);

the Minister may cancel the registration of the person as a registered shipbuilder by causing a notice, in writing, stating that the registration of the person as a shipbuilder is cancelled with effect from a day specified in the notice, not being a day earlier than the day of issue of the notice, to be served on the person. "

submissions and decision

  1. It is the Applicant's contention that the wording of the Act does not support the view taken by the Respondent that the Minister may only back date the registration to commence, at most, a year before the day of issue of the notice. The Applicant maintains that the relevant limitation allows the Minister to register an Applicant by issuing a notice on such day occurring after 30 June 1989 as specified in the notice, whether that day occurs before, on or after the day of issue of the notice. The Minister, it is said, has in fact wide powers in terms of the Act to backdate the registration to, in the present instance, the 19 August 1998. This concession reflecting the beneficial construction to be placed upon and the intent of the legislation.

  2. The Applicant further maintains that where in the Explanatory Memorandum is made reference to a "notice of registration" specifying the date "provided it is not earlier than 1 July 1989", this reinforces the power of the Minister to allow complying registrations as from that date. If, it is said, even be they retrospective so far as continuation is concerned, Parliament did not intend to allow past period registrations then there would have been included in subsection 17(3)(a)(j) of the Act words to the effect of "but no earlier than a year from the date of notice". It is noted however by the Tribunal that subsection 17(3) is subject to subsection 17(6) and 17(8), the significance of this to be discussed shortly.

  3. The Applicant as has already been mentioned maintains that in making a decision in this matter consideration should be given to the beneficial nature of the legislation as well as the "Guide to the Interpretation of Bounty Legislation" circulated in a minute paper of the 20 April 1990 (Exhibit A). Whilst the latter document is no doubt of assistance to officers of the Department construing legislation such as the Act, which is, it is conceded, to be construed beneficially rather than narrowly, the guide is relevant where construction presents a difficulty such as there instanced and/or where there is ambiguity in the legislation. The Tribunal does not in the present instance find that the legislation is ambiguous or that the wording of section 17 falls within the purport of the Guide, the legislative intent is apparent on the face of the statutory provisions.

  4. In summary, the Applicant maintains that the Respondent is seeking to deprive the shipbuilder of a legitimate claim and that the Act "never envisaged that shipbuilders such as Atley Catamarans, having been in the boat building business since 1969, should be disadvantaged by the interpretation of the Act through legalistic subjective views".

  5. As has already been indicated in these reasons, the Respondent submits that pursuant to section 17 of the Act, the Applicant is not entitled to registration in respect of a period which has fully expired. The period of retrospective registration applied for would, if granted, require the Minister to register the Applicant retrospectively from a date that was more than one year from the date of the issue of a notice of registration. The maximum period under the Act for registration is one year.

  6. Subsection 17(3)(a)(j) empowers the Minister, if in his opinion an applicant carries out or proposes to carry out the construction or modification of bountiable vessels in Australia to register the applicant as a registered shipbuilder. The Minister may do this by signing a notice in writing, stating that the applicant is registered as a shipbuilder for a period of one year commencing on such a day (after 30 June 1989) as is specified in the notice, whether that day occurs before, on, or after the day of issue of the notice. Once registered, an applicant may make one or more applications each for a further one-year period of registration occurring after the end of the most recent registration period. Whilst it is said if subsection 17(2) and 17(3)(a) were read in isolation they may appear to give the Minister wide powers in respect of the period for which registration may be granted, they are as a matter of statutory construction to be read in the context of the whole section, especially subsections 17(6) and 17(8).

  7. It is maintained on behalf of the Respondent that section 17 of the Act requires the Minister to register a shipbuilder as a registered shipbuilder for a period that extends at least for some time into the future. The statutory pre-requisites for registration imply that an application for registration must relate to a period that has not wholly elapsed. That is the period of registration must have a prospective element. This it is said is evidenced by various expressions appearing in section 17. Subsection 17(2) refers to "a person who carries out or proposes to carry out" the construction or modification of vessels. This refers to a present or prospective activity. Subsection 17 (3) refers to a person who "carries out or proposes to carry out" construction or modification. Subsection 17(3) is specifically made subject to subsections 17(6) and 17(8). Subsection (6) in several of its paragraphs refers to activities that can only occur after registration is effected. Thus an applicant is to demonstrate technical and financial management skills, that it "will have access to facilities", that "the applicants activities will be devoted" to construction or modification and that the applicant "will at all times" have in its employment at least the designated 40 persons.

  1. Again, subsection 17(6)(e) requires an applicant to comply with any other condition of registration "specified in the regulations for the purpose of the paragraph".  Subsection 17(7) details information to be lodged with an application, including an auditor's report verifying the applicant's capacity to fund a construction or modification and to meet all financial liabilities.  It would hardly be competent for an applicant to provide a report verifying a capacity of this nature if the same referred to a wholly completed period.  Subsection 17(7)(b) refers to a business plan outlining various stipulated requirements, included amongst which are the applicant's "current position in the world market", the applicant's "business objectives", the applicant's "anticipated employment" and "plans for using bounty funds".  Subsection 17(7)(c) refers to the necessity of providing a statement "estimating the amount of bounty to which the applicant believes the applicant will become entitled during the financial year in which the application is made".  This would hardly be apposite to an application referring to a period wholly in the past. 

  1. Again, subsection 17(8) enables the Minister to require additional information to be provided by an applicant "necessary for the purposes of this act" and "may refuse to register the person unless the information is given to the satisfaction of the Minister".  Subsection 17(9) enables the Minister to cancel the registration of a person if, at any time during a period of registration, the Minister becomes satisfied, that the person "no longer carries out the construction or modification", or  "has ceased to be a body corporate", or "no longer has the skills", or "no longer meets a requirement", or " has ceased to comply" with any other conditions of registration.

  2. The Tribunal is satisfied that the construction placed upon section 17 by the Respondent is correct. Subsection 17(3) is to be read in the context of the whole of section 17, the section clearly containing an element of prospectivity. The Minister is to be satisfied as to the capacity of an applicant to meet the requirements stipulated in the legislation, in order that there might be a "successful completion of the construction or modification of bountiable vessels". There is a need for the Minister to be satisfied that "during the period to which the application relates" the applicant will have appropriate facilities, devote work towards stipulated activities and have the required number of employees. There is also an obligation to comply with any other condition of registration. There could thus not be compliance with a condition or conditions of registration if registration related to a period wholly expired. Again, the independent auditors report refers to the Applicant's capacity to fund the construction and meet financial liabilities. This relates to an ability displayed at the time of the application, and prospectively. Likewise, the business plan envisaged by subsection 17(7)(b) looks to the present and future being the "applicant's current position" and "the applicant's business objectives". Subsection 17(9) enables the Minister to cancel the registration in the event of one or other of the happenings therein detailed occurring. It would hardly be competent, in such an event, for a Minister to cancel a registration when the period for which registration had been granted had wholly elapsed.

  1. The Tribunal is satisfied that section 17 of the Act should be given the construction maintained for it by the Respondent. The Applicant is not entitled under the Act to registration in respect of a period which has fully expired and is not entitled to registration in respect of multiple periods each period being one year.

  2. For the reasons herein before set forth the Tribunal affirms the decision under review.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R N J Purvis, QC Deputy President

Signed:         .....................................................................................
  Associate

Date/s of Hearing  13 March 2001
Date of Decision  5 April 2001
Counsel for the Applicant        Self-represented
Solicitor for the Respondent    Ms J Pownall

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