La Macchia v Minister for Primary Industries and Energy

[1992] FCA 673

Re: TONY LA MACCHIA; FRANK LA MACCHIA; ELIZABETH LA MACCHIA; RUTH LA MACCHIA;
ANDREW LA MACCHIA; ANTONIO MUSUMECI; ROCCO MUSUMECI; VINCENZO MUSUMECI and
LUCIA MUSUMECI
And: SIMON CREAN, THE MINISTER OF PRIMARY INDUSTRIES AND ENERGY and
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Nos. N G598, 597 and 596 of 1992
FED No. 673
Delegated Legislation - Courts and Judges - Interlocutory Injunctions
(1992) 110 ALR 201

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Burchett J.(1)

CATCHWORDS

Delegated Legislation - unreasonableness - absurdity - construction of power to make delegated legislation as not contemplating irrational legislation.

Courts and Judges - stare decisis - respect to be accorded by one judge of the Federal Court to a decision of another judge of the Court.

Interlocutory Injunctions - whether establishment of a serious question to be tried is sufficient where individual seeks to restrain enforcement of delegated legislation, claimed to be invalid, which was designed to protect some general public interest.

Richardson v. The Forestry Commission (1988) 164 CLR 261 at 275.

Castlemaine Tooheys Ltd v. State of South Australia (1986) 161 CLR 148

Hamilton Island Enterprises Pty Ltd v. Commissioner of Taxation (1982) 1 NSWLR 113 at 119

Nottinghamshire County Council v. Secretary of State for the Environment (1986) AC 240 at 247-8

Williams v. The Mayor, Aldermen, Councillors and Citizens of the City of Melbourne (1933) 49 CLR 142 at 155

Austral Fisheries Pty Ltd v. The Minister for Primary Industries and

Energy (O'Loughlin J., unreported, 28 July 1992).

Fisheries Act 1952, s.7B

HEARING

SYDNEY

#DATE 11:9:1992

Counsel for the Applicants: Mr R.W.R. Parker QC with Mr P.W. Bates

Solicitor for the Applicants: Thomson Rich O'Connor

Counsel for the Respondents: Mr R.J. Burbidge QC with Mr P. Roberts

Solicitors for the Respondents: Australian Government Solicitor

ORDER

1. The Court orders that the questions for separate decision be answered as follows:

(a)(i) Yes;

(a)(ii) Yes;

(b) Yes;

(c) Paragraph 11 is void;

(d) No, in any case.

2. Costs reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Each of these matters involves an application, in reliance on s.39B of the Judiciary Act 1903, for relief that includes an injunction to restrain the first respondent from implementing the South East Fishery (Individual Transferable Quota) Management Plan 1991; a declaration that the notification of the making of this Management Plan by Commonwealth Government Gazette of 9 December 1991 is of no force or effect; and consequential relief. Amongst the forMs of consequential relief sought are orders aimed at stopping actions taken by the Australian Fisheries Management Authority to enforce observance of the Plan. Resolution of the questions raised by the applications has been said to be extremely urgent, on the footing that the Management Plan limits the quantity of a migratory species of fish (Gemfish) available to be caught, and that migration of this species to southern waters is imminent. The applicants claim they will incur severe losses if compelled to comply with the terms of what they contend is an invalid management plan during the short period prior to the migration of these fish out of the fishery area. Accordingly they have sought interlocutory relief.

1. Notwithstanding the consequences of delay, it did not seem to me that these cases could possibly be appropriate for the granting of interlocutory injunctions on the basis merely of a serious question to be tried, together with a favourable finding of a balance of convenience. There cannot be an interlocutory, interim or provisional declaration as to the validity of the delegated legislation constituted by the Management Plan; it is either valid, or it is not. (See Inland Revenue Commissioners v. Rossminster Ltd (1980) AC 952 at 1000, per Lord Wilberforce.) If it be not actually held invalid, the balance of convenience could hardly favour a grant of an injunction to serve private interests in preference to the wide general interests involved in the Management Plan. In Richardson v. The Forestry Commission (1988) 164 CLR 261 at 275, Mason C.J. referred to:-
   

"the general principle that, in the absence of compelling grounds, it is the duty of the court to respect, indeed, to defer to the enactment of the legislature until that enactment is adjudged ultra vires".

He cited Castlemaine Tooheys Ltd v. The State of South Australia (1986) 161 CLR 148 and Davids Holding Pty Ltd v. Byrnes (1987) 71 ALR 251. Although this principle has been stated with reference to Acts of Parliament challenged on constitutional grounds, I think there is scope for its application in relation to a management plan adopted pursuant to legislation of the kind here in question. In particular, the remarks of Mason A.C.J. in Castlemaine Tooheys at 156 suggest that an interlocutory injunction to restrain prosecutions, or investigatory actions directed to possible prosecutions, would not readily be granted in the absence of a final conclusion of invalidity of the Management Plan.

1. After some discussion of these issues, the parties agreed to attempt to formulate separate questions, in relation to the validity of the Management Plan, for decision before any trial in the proceedings (see Order 29 rule 2). The questions, as ultimately drafted, were prefaced by an agreement, "(f)or the purpose of determining the applications before the Court", that "on 9 December 1991 the Minister notified in the Commonwealth Government Gazette the existence of a plan, the South East Fishery (Individual Transferable Quota) Management Plan 1991 ('the new plan')"; that the "new plan was a plan of management determined by the Minister by instrument in writing pursuant to the power contained in s.7B of the Fisheries Act 1952 (Cwlth)"; and that a "quota of gemfish was assigned to each of the Applicants and others in the industry, pursuant to paragraphs 8 and 11 of the new plan". The questions were stated as follows:-
   

a. (i) Whether the formula in paragraph 11 of the new plan when applied to gemfish produces as between those to whom a quota has been assigned an irrational and absurd result; or

(ii) Whether the said formula involves an irrationality or absurdity.

b. If so, should it be concluded that some invalidity follows?

c. If so, is paragraph 11 alone invalid or void or is the new plan itself invalid or void?

d. If the new plan is invalid does that invalidity affect in any way the validity of the total allowable catch

(TAC) of gemfish, which is referred to in paragraph 7.1 and schedule 3 of the new plan? If so how?

1. At the time the questions were drafted, there were available to the parties and to the Court the reasons for judgment of O'Loughlin J. in Austral Fisheries Pty Ltd v. The Minister for Primary Industries and Energy (unreported, 28 July 1992), but not his Honour's orders in that matter, which he did not make until 2 September 1992, when he declared that para. 11 of the Management Plan was void. The formulation of the questions and much of the argument, in the present matters, were directed to debating whether it was a consequence of the Austral Fisheries decision that para. 11 was void, or only that it was incapable of valid application to the particular species of fish with which Austral Fisheries was directly concerned, orange roughy. That debate, as is now clear, has been foreclosed by the decision actually made by O'Loughlin J., unless I accept the submissions of each party that I should decline to follow his Honour in one or other respect - the respondents say he erred in finding para. 11 void, while the applicants say he should have gone further and held the entire plan invalid.

2. The doctrine of stare decisis does not, of course, compel the conclusion that a judge must always follow a decision of another judge of the same court. Even a decision of a single justice of the High Court exercising original jurisdiction, while "deserving of the closest and respectful consideration", does not make that demand upon a judge of this court: Businessworld Computers Pty Ltd v. Australian Telecommunications Commission (1988) 82 ALR 499 at 504. But the practice in England, and I think also in Australia, is that "a judge of first instance will as a matter of judicial comity usually follow the decision of another judge of first instance (scilicet of co-ordinate jurisdiction) unless he is convinced that the judgment was wrong": Halsbury, 4th ed., vol. 26 para 580. The word "usually" indicates that the approach required is a flexible one, and the authorities illustrate that its application may be influenced, either towards or away from an acceptance of the earlier decision, by circumstances so various as to be difficult to comprehend within a single concise formulation of principle. (For example, it has been suggested that decisions upon the effect of sections of the Income Tax Assessment Ac 1936 present a special need for consistency: Rabinov v. Federal Commissioner of Taxation (1982) 82 ATC 4517 at 4523.) Understood as expressing a usual or general rule, the following statement of Rogers J. in Hamilton Island Enterprises Pty Ltd v. Commissioner of Taxation (1982) 1 NSWLR 113 at 119 is consistent with the proposition I have quoted from Halsbury:-
   

"In my view it is of cardinal importance in the proper administration of justice that single judges of State Supreme Courts exercising federal jurisdiction should strive for uniformity in the interpretation of Commonwealth legislation. Unless I were of the view that the decision of another judge of co-ordinate authority was clearly wrong I would follow his decision."

1. Section 7B of the Fisheries Act 1952 (the replacement of which by the Fisheries Management Act 1991 - see also the Fisheries Legislation (Consequential Provisions) Act 1991 - had no presently relevant effect) authorised the Minister to "determine a plan of management for a fishery in proclaimed waters". There is no dispute that the plan now in question relates to such a fishery. By sub-sec.(2) of sec.7B, it is laid down that:-
   

"A plan of management for a fishery shall set out -

(a) the objective of the plan of management; and

(b) measures by which the objective is to be attained."

Sub-section (5) then provides:-

"(5) Where, in a plan of management for a fishery, the Minister determines the fishing capacity permitted for the fishery, then, without limiting the generality of sub-section (2), the plan of management may make provision for and in relation to -

(a) the division of the fishing capacity permitted for the fishery into units (in this section referred to as 'units of fishing capacity');

(b) the allocation to persons of units of fishing capacity in the fishery;

(c) the assignment of units of fishing capacity to boats, and the holding, and cessation of holding, of units of fishing capacity in relation to boats;

(d) requiring units of fishing capacity to be held in relation to boats;

..."

1. The Plan of Management was adopted in reliance on this section, and published in the Gazette under s.7C on 9 December 1991. It fixed a total allowable catch (TAC) for each of various species of fish, including orange roughy and gemfish, and, by paragraphs 5 and 6, stated the following objectives and measures for attaining them:-
   

"Objectives

5. For the purposes of subsection 7B(2) of the Act, the objectives of this plan are -

(a) to achieve a level of parental biomass for each stock in the fishery consistent with optimum sustainable yields for that stock having regard to among other things scientific assessments of the status of that stock; and

(b) to promote optimum utilisation of the resource in the fishery.

Measures for attaining objectives

6. The principal measures for attaining the objectives specified in paragraph 5 are -

(a) determining the TAC for each specified species that may be taken from the fishery;

(b) at the commencement of this plan dividing the TAC for each specified species into units of fishing capacity and allocating those units to individual operators in the fishery; and

(c) exercising the powers in Part III of the Act so as to prevent a person from using a boat, other than in the course of exempt fishing, to take in a season a liveweight of specified species exceeding the quota in relation to the units in respect of that species which are assigned to the boat."

There was then set out by para. 11, in a series of formulae, a method for the calculation of the number of units of a specified species of fish to be allocated in respect of each boat. It is one component of this formula which has led to the decision of O'Loughlin J. and to the present dispute. This component seeks to enable account to be taken of an appropriate average share (in respect of each particular boat) of the total catch, for a period covering several years, the number of years varying according to the species of fish.

1. The difficulty with para. 11 was identified by Dr D.F. Nicholls, who is Reader in Statistics and Dean of the Faculty of Economics and Commerce at the Australian National University. He described the method of allocation as "inherently fallacious". That is because it involves the simple addition of percentages of annual catches, which percentages are then averaged for the period, without taking account of annual variations of total fleet catches. A procedure of that kind can produce startling results because of the disproportionate effect of small numbers in a year of low total fleet catch, when they may represent significant percentages. How distorted the result may be is illustrated by an example the witness gave in Austral Fisheries and in the present cases, which is set out at p 16 of the judgment of O'Loughlin J. I forbear to repeat it, but I note that it demonstrates the method may produce figures which must be described as devoid of useful meaning for the purposes of a comparison involving the numbers represented by the percentages averaged. Dr Nicholls said the method produces an "irrational result".

2. For the respondents, evidence was called, to answer the evidence of Dr Nicholls, from Dr D.G. Pederson, a Senior Lecturer in statistics at the University of Canberra. Dr Pederson disputed that the method in question is "inherently fallacious", but conceded "there is the potential for producing results for which a high weight is given to years with a low fleet catch." He added: "In my opinion this potential does not invalidate the use to which the formula is put provided one is aware of the effects of variation in fleet catch." But awareness of a distortion is of little use unless the formula is adjusted. Although it was argued for the respondents that the effects of the method may have been deliberately chosen by the Minister, and there was some remarkably general evidence that the officer responsible for developing the method had the benefit of computer simulations (how complete they were was not revealed) and "was fully aware of the effects of the formula on individuals", I can only conclude to the contrary. If such a method had been deliberately adopted in order to achieve some designed weighting effect, there must have been calculations demonstrating the validity of going about the task in that way; none were produced, nor was their existence suggested. Nor were the respondents able even now to suggest, except as a generalisation, how the weighting would work out to produce some rational or desirable result. I note that O'Loughlin J. remarked upon the same difficulty about the evidence before him. Furthermore, the terms of s.7B may have required a statement of the weighting objectives and the measures (including the suggested deliberate bias of the formula) by which those objectives were to be attained; if the section did not, on its true construction, require this, it certainly made it likely consideration would have been given to such a statement. There is no hint of any consideration of this matter, although measures were stated which included "allocating ... units to individual operators in the fishery".

3. As between the experts, I should say that I prefer the evidence of Dr Nicholls, and I accept the views expressed in his affidavit about the fallacy involved in para. 11. In reaching this conclusion, I have not failed to take account of what I think were, in the main, verbal infelicities rather than substantial concessions extracted during his cross- examination. Dr Pederson appeared to me to be evading, rather than dealing with, the real issue.

4. O'Loughlin J., in Austral Fisheries, having come to the same conclusions of fact, went on to consider whether the Minister's adoption of the Management Plan was an administrative or a legislative act. He held that the plan was delegated legislation. It may be that some qualification of this view should be accepted, having regard to what has since been said by French J. in Latitude Fisheries Pty Ltd v. The Honourable Simon Crean, Minister for Primary Industry and Energy (unreported, 12 August 1992, at 36). But that would serve to strengthen, rather than weaken, O'Loughlin J's ultimate conclusion that the Minister's exercise of the power conferred by the Fisheries Act was so absurd as to establish that this was one of those extremely rare cases where an action taken pursuant to such a power must be held vitiated upon the principle stated by Lord Scarman in Nottinghamshire County Council v. Secretary of State for the Environment (1986) AC 240 at 247-248, where he said, speaking on this issue with the general agreement of the other members of the House:-
   

"For myself, I refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his senses. The evidence comes nowhere near establishing any of these propositions. Nobody in the case has ever suggested bad faith on the part of the Secretary of State. Nobody suggests, nor could it be suggested in the light of the evidence as to the matters he considered before reaching his decision, that he had acted for an improper motive. Nobody now suggests that the Secretary of State failed to consult local authorities in the manner required by statute. It is plain that the timetable, to which the Secretary of State in the preparation of the guidance was required by statute and compelled by circuMstance to adhere, involved him necessarily in framing guidance on the basis of the past spending record of authorities. It is recognised that the Secretary of State and his advisers were well aware that there would be inequalities in the distribution of the burden between local authorities but believed that the guidance upon which he decided would by discouraging the high spending and encouraging the low spending authorities be the best course of action in the circumstances. And, as my noble and learned friend, Lord Bridge of Harwich, demonstrates, it was guidance which complied with the terms of the statute. This view of the language of the statute has inevitably a significant bearing upon the conclusion of 'unreasonableness' in the Wednesbury sense."

It is, of course, made plain in this passage that mere unreasonableness will not do: see also King Gee Clothing Company Pty Ltd v. The Commonwealth (1945) 71 CLR 184 at 195; Clements v. Bull (1953) 88 CLR 572.

1. For myself, I think Lord Scarman's reference to the significance of the language of the empowering statute is important in relation to the present problem. The Fisheries Act 1952 (by s.5B) sets for the Minister the twin objectives of protection of fisheries from "over-exploitation" and achievement of their "optimum utilization". It is contemplated that these objectives will be served by management plans under s.7B, which contains provisions, quoted earlier in these reasons, for the allocation of units of fishing capacity. Neither these provisions nor the objectives of the Act suggest that the allocation is to be arbitrary or determined by the capricious consequences of a kind of statistical lottery. Where a statute provides for an allocation of a scarce resource amongst participants in the relevant industry, in general, and failing some clear indication to the contrary, the statute should be understood as authorising a method of allocation in accordance with some intelligible principle appropriate to achieve a reasonable division as between those participants. On the expert evidence before me, the principle upon which the method here in question was selected is not intelligible (and if there was some intelligible basis the respondents were in a position to prove it in detail, so that I am entitled to give full weight to the inferences arising from the evidence of Dr Nicholls: Jones v. Dunkel (1959) 101 CLR 298), and the result is a demonstrably arbitrary and unequal sharing. It was suggested by counsel for the respondents that the inequalities in respect of orange roughy were not as striking as O'Loughlin J. thought. As I do not have before me precisely the same evidence as he had before him, I cannot accept, or even properly consider, this submission. But very serious inequalities were demonstrated, both in respect of orange roughy and also in respect of gemfish.

2. Not only am I not persuaded to decline to follow the decision in Austral Fisheries - I am positively persuaded that the Fisheries Act, on its true construction, did not authorise the adoption of a management plan providing for an allocation in accordance with para. 11. That paragraph "could not reasonably have been adopted as a means of attaining the ends of the power": Williams v. The Mayor, Aldermen, Councillors and Citizens of the City of Melbourne (1933) 49 CLR 142 at 155, per Dixon J. See also The Mayor, Councillors and Citizens of the City of Brunswick v. Stewart (1941) 65 CLR 88 at 99.

3. Consequently, I would answer questions (a)(i), (a)(ii) and (b) in the affirmative. In agreement with O'Loughlin J., I hold it follows that para. 11 of the Management Plan is void. But I am unable to see any justification for the suggestion made by counsel for the applicants in argument, without supporting it by any detailed analysis of the provisions of the plan, that the fixing of the total allowable catch is in some way tainted by the invalidity of para. 11. Nor has it been demonstrated that any other provision of the plan is so connected with para. 11 as to be vitiated with it. Questions (c) and (d) will be answered accordingly.