DECISION AND REASONS FOR DECISION [2000] AATA 1025
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W1999/139
GENERAL ADMINISTRATIVE DIVISION )
Re LATITUDE FISHERIES PTY LTD
First Applicant
WILLOWOOD HOLDINGS PTY LTD
Second Applicant
And AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
RespondentDECISION
Tribunal Deputy President T E Barnett Mr R D Fayle, Senior Member Dr E Christie, Member
Date22 November 2000
PlacePerth
Decision In accordance with s43 of the Administrative Appeals Tribunal Act 1975, the decision under review is affirmed.
.........(sgd T E Barnett)..........
Deputy President
CATCHWORDS
FISHERIES – grant of fishing permit – tuna fishing in S/WTBF – whether binding agreement resulted from sale of NPF permits under voluntary adjustment scheme – contracting powers of Commonwealth – changes to legislation and AFMA policies – precautionary principle – ecologically sustainable development – latent effort and economic considerations – estoppel, frustration, legitimate expectation considerations
Fisheries Act 1952
Fisheries Administration Act 1991
Fisheries Management Act 1991
Ansett Transport Industries (Operations) Pty Ltd v Commonwealth of Australia (1977) 17 ALR 513
Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 18
Bannister Quest Pty Ltd v AFMA (1997) 77 FCR 503
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 360
Freeman v Secretary, Department of Social Security (1988) 87 ALR 506
Gardner v Dairy Industry Authority of New South Wales [1977] 1 NSWLR 505
Haoucher v Minister for Immigration (1990) 93 ALR 51
Minister for Agriculture & Fisheries v Hulkin (unreported)
Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic (1990) 92 ALR 93
Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273
R v Liverpool Corporation; ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299
Re: Secretary, Department of Social Security and Plug, AAT Case W1998/404
REASONS FOR DECISION
22 November 2000 Deputy President T E Barnett; Mr R D Fayle, Senior Member and Dr E Christie, Member
On 4 November, 1998 solicitors for Latitude Fisheries Pty Ltd ("the first applicant"), wrote to the Australian Fisheries Management Authority ("AFMA" or "the respondent") applying for a fishing permit ("FP") to take tuna in Australian fishing zone areas, identified as the Southern and Western Tuna and Billfish Fisheries ("S/WTBF") This application was founded on the assumption that the predecessor Commonwealth department, the Australian Fishing Service, in 1989, had given an undertaking that the first applicant was entitled to an equivalent fishing boat licence (of a kind which had since ceased to be issued due to a change in legislation). In January 1999, the respondent refused to grant the permit, which decision was affirmed by a delegate of the respondent on 31 March 1999. In May 1999, the first applicant requested this Tribunal to review that decision pursuant to s165 of the Fisheries Management Act 1991 ("the Act") and the Administrative Appeals Tribunal Act 1975.
Willowood Holdings Pty Ltd ("Willowood"), a company beneficially owned by the same natural person shareholders as the first applicant, joined it as an applicant in this matter. Willowood's affairs and those of the first applicant and the two principal shareholders and directors, Mr J A (Bert) Boschetti and Mrs Julie Boshetti, (husband and wife), are enmeshed and directly connected with this application.
At the hearing Mr M Buss QC, instructed by Cocks Macnish, Solicitors, represented the applicants. Mr M Ritter, barrister, instructed by Ms Anna Ciffolilli, Solicitor represented the respondent. The following witnesses gave oral evidence for the applicants:
· Mr Graeme Stewart, consultant to the applicants;
· Mr J A Boschetti, director and executive officer of the applicants;
· Mrs Julie Boschetti, director and executive officer of the applicant; and
· Ms Lian Papaelias, an accountant.
The following witnesses gave oral evidence for the respondent:
· Mr Peter E Venslovas, a senior manager with the respondent; and
· Ms Mary B Lack; a senior manager with the respondent.
The Tribunal had before it documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 ("T documents"). In addition it received into evidence the following exhibits:
· A1 - Witness statement Mr Graeme Stewart, 22 October, 1999;
· A2a – Witness statement of Mrs Julie Boschetti, 22 October, 1999;
· A2b –Supplementary witness statement of Mrs Julie Boschetti, 28 April, 2000;
· A2c – Table of Detriment (this is also part of exhibit A5);
· A3 – Copy of a letter from Department of Primary Industries and Energy to Mr J A Boschetti, 16 January 1989 (a copy of this also appears at T4);
· A4 – copy of a facsimile from NPF Trading Corporation Pty Ltd to Australian Fishing Service, attention Mr Wesney, 22 June, 1989;
· A5 – Statement of Lian Papaelias, 28 April, 2000 (attaching a copy of A2c);
· A6a – Statement of Mr John Albert Boschetti, 22 October, 1999;
· A6b – Supplementary statement of Mr John Albert Boschetti, 27 April 2000;
· A7 – Bundle of additional documents, numbered 1 to 13 inclusively, filed with the Tribunal on 28 April, 2000;
· A8 – AFMA Board-in-confidence, Agenda Item 6 discussion papers relating to a meeting of the Board on 2 December 1999. This exhibit and the related evidence of Ms M Lack was subject to confidentiality order pursuant to s35 of the Administrative Appeals Tribunal Act 1975. The order restricts the circulation of the evidence to respective counsel, instructing solicitors and the Tribunal members. For that reason only oblique reference will be made to that evidence so as to preserve its confidentiality;
· A9 – Copy of a deed of discharge, executed by Willowood, 16 December, 1988;
· R1 – Copy of a letter from the first applicant to Mr G Stewart, 16 December, 1988;
· R2 – Copy of a letter from the first applicant to Mr P Neave, Western Tuna Mac, 28 April 1998;
· R3 – extract from application by the first applicant , in November 1999, to be joined as a party to a review by this Tribunal of a decision in another matter (unrelated to this review);
· R4 – statement of Peter Ernest Venslovas, 22 February, 2000;
· R5 – statement of Mary Bernadette Lack, 24 February, 2000.
The Tribunal heard evidence over five days. It related to surrounding circumstances and understandings in connection with correspondence between the first applicant and the Australian Fisheries Service ("AFS") and later, the AFMA (the respondent). The evidence addresses the first applicant 's submission that it has suffered or will suffer a financial detriment as a consequence of not being granted the tuna fishing licence in question. The evidence also goes to the policies and practices of the AFMA in relation to the granting of tuna fishing licences of the type applied for by the first applicant, the subject of this review.
Some relevant background informationThe Australian fishing zone ("AFZ") is an area of sea over which Australia has exclusive rights by reason of international convention. Relevant definitions appear in section 4 of the Fisheries Management Act 1991:
Australian fishing zone means:
(a) the waters adjacent to Australia within the outer limits of the exclusive economic zone; and
(b) the waters adjacent to each external territory within the outer limits of the exclusive economic zone;
but does not include:
(c) coastal waters of, or waters within the limits of, a State or internal Territory; or
(d) waters that are excepted waters.Exclusive economic zone means the exclusive economic zone, within the meaning of the Seas and Submerged Lands Act 1973, adjacent to the coast of Australia or the coast of an external Territory.
The Tribunal was informed that both the Commonwealth and the State governments have divided jurisdiction over the AFZ. The Commonwealth has jurisdiction in the zone extending to some 200 nautical miles from the coast and for which it controls the licensing of fishing. However, the States have jurisdiction over three nautical miles from the low water mark and control the licensing of fishing in that area. Therefore, if one is to fish (commercially) in a designated area, which extends beyond the three nautical mile limit, both Commonwealth and State (or States) licenses are needed.
The Commonwealth has divided the AFZ into discrete zones to facilitate management of the fisheries. the first applicant and Willowood were active in the Northern Prawn Fishery ("NPF") and were licensed by the State of Western Australia and the Commonwealth to fish there. The Fisheries Act 1952 was replaced by the Fisheries Management Act 1991 ("the Act") and a different type of license was issued under the latter. Formerly, the Commonwealth issued "Commonwealth Fishing Boat Licences" ("CFBL") but under the latter "FPs" ("FP") are issued. These are issued pursuant to s32 of the Act, which states:
Division 5--Fishing permits Grant of fishing permits
32. (1) AFMA may, upon application made in the approved form, grant to a person a fishing permit authorising, subject to subsections (1A), (1B) and (1C), the use by that person, or by a person acting on that person's behalf, of an Australian boat for fishing in a specified area of the AFZ or a specified fishery.
(1A) Subject to subsection (1C), if an Australian boat is specified in the permit, the permit authorises the use as mentioned in subsection (1) of:(a) subject to paragraph (b)--that boat; or
(b) if the person to whom the permit is granted, from time to time, by written notice given to AFMA, nominates for the purposes of the permit another Australian boat in lieu of that boat--the boat so nominated.(1B) Subject to subsection (1C), if no Australian boat is specified in the permit, the permit authorises the use as mentioned in subsection (1) of such Australian boat (if any) as the person to whom the permit is granted, from time to time, by written notice given to AFMA, nominates for the purposes of the permit.
(1C) The permit does not authorise the use of an Australian boat unless the boat complies with any conditions to which the permit is subject.
(2) An application made for the grant of a fishing permit must provide AFMA with such information as it reasonably requires for a proper consideration of the application.
(3) Without limiting the operation of subsection (1), AFMA may refuse to grant a fishing permit if it has reason to believe that a requirement of a law of the Commonwealth, or of a State or Territory, has not been complied with in relation to the boat.
(4) A fishing permit may authorise the use of a boat:(a) for commercial fishing generally; or
(b) for recreational fishing generally; or
(c) as a charter boat; or
(d) for specified fishing activities, including:(i) the carrying of fish; or
(ii) the processing of fish; or
(iii) the testing of fishing equipment.(5) A fishing permit is granted subject to the following conditions:
(a) if the fishing permit authorises fishing in a specified managed fishery--the holder of the permit must comply with any obligations imposed by, or imposed by AFMA under, the relevant plan of management on the holder of such a fishing permit;
(b) if the fishing permit authorises fishing in a specified managed fishery--the permit will cease to have effect if the plan of management for the fishery is revoked under subsection 20(3);
(c) the fishing permit may, under subsection 75(7), cease to have effect or, under subsection 79(3), cease to apply to a fishery;
(d) the fishing permit may be cancelled under section 39;
(e) no compensation is payable because the fishing permit is cancelled, ceases to have effect or ceases to apply to a fishery.(6) A fishing permit:
(a) is subject to such other conditions as are:
(i) specified in the permit; or
(ii) prescribed in relation to permits granted under this section; and(b) comes into force on the day specified for the purpose in the permit or, if no day is so specified, on the day on which it is granted; and
(c) subject to this Act, remains in force until the day specified for the purpose in the permit, being a day not later than 5 years after the day on which it came into force.(7) Without limiting the operation of paragraph (6)(a), the conditions that may be specified in a permit include conditions relating 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.(8) AFMA may, by written notice given to the holder of a permit, whether or not at the request of the holder, vary or revoke a condition of the permit (not being a condition mentioned in subsection (5)) or specify a condition or a further condition to which the permit is to be subject.
(9) A permit ceases to be in force if the holder of the permit surrenders the permit by written notice given to AFMA.
(10) Except where a fishing permit is stated to be non-transferable, AFMA may, on the application of the holder of the permit and of another person as proposed transferee, transfer the permit to that other person.
(11) A fishing permit is to be in the approved form.
The Tribunal understands that prior to the 1991 Act, to fish in the NPF managed fishery, a boat required two kinds of licenses. The first was specifically for the NPF and was divided between Class B and Class A units. Both were necessary to fish. One Class B unit was required for each boat together with a number of Class A units, which were issued according to various physical properties of the boat. The other kind of licence was the CFBL, which may not be restricted to any particular managed fishery, such as the NPF. It is further understood that CFBLs remained current subsequent to the 1991 Act, at least until they expired or were replaced by fishing licences pursuant to s32 of the 1991 Act.
Ms Lack summarises, in attachment K to her statement (Ex. R5), the various fishing licences and permits held by the applicants since 1994 up to the time of her statement in February 2000. Ms Lack gleaned this information from the statement of Mr J A Boschetti (Ex. A6a).
Boat name Periods Relevant permit/CFBL Licensee/Permit Holder Notes
Orion 1/7/94 - 1/11/94 FP Permit 60628A Willowood This was formerly a CFBL
and 11/9/95 - 7/96
Kobus II 5/8/99 - 30/6/00 60628A Willowood
First Class 11/7/95 - 17/10/95 FP 402734A JA & JE Boschetti Previously a CFBL. On 24/11/95 the first Class nomination was changed to "No boat".
9/6/94 - 8/6/95
5/7/95 - 3/7/96
Discovery III 12/7/99 - 30/6/00
Miss Pia II 23/5/94 - 22/5/95 FP402831A Latitude Previously a CFBL.
Orion 27/11/95 - 21/5/96 FP402831A Latitude On 28/10/97 the Orion was replaced with "No boat".
The boat nominated for this FP from 6/1/2000 – 30/6/2000 is Lella owned by Latitude
Code: FP is Fishing Permit. Source: Exhibit R5 and attachment K thereof (Statement by Ms M Lack)Fishing Permits 606268A, 402734A and 402831A are conditional. The condition, amongst others, is that the nominated boat is allowed to fish for tuna and tuna-like species (excluding Southern Bluefin Tuna (Thunnus maccoyii)) in the area specified in Schedule 2 of the FP, by pelagic longline and troll, rod & reel and handline fishing methods. The Tribunal understands from the evidence that each FP allows fishing in the Australian fishing zone (excluding waters administered by a State or Territory) adjacent to South Australia west of meridian of longitude 141 degrees 00 minutes; Western Australia; Western Australia seaward of the 200 meter isobath; Northern Territory; and Queensland west of the meridian of longitude 142 degrees 30 minutes. The Tribunal understands that these permit fishing for tuna (except SBT) in the Australian fishing zones ordinarily described as the Southern and Western Tuna and Billfish Fisheries ("S/WTBF"), not restricted by the latitude 34oS"line", a point which will become relevant later in these reasons.
The relevant correspondence and eventsIn 1988 the applicants, Latitude and Willowood, and Mr and Mrs JA Boschetti (ie JA and Julie Boschetti) in their own rights operated fishing boats in the NPF. At the time the Commonwealth Government had a scheme to reduce the amount of fishing in the NPF, called the "NPF Voluntary Adjustment Scheme". The Northern Prawn Fishery Trading Corporation ("NPFTC") managed this scheme. The then executive officer of the NPFTC, Mr Graeme Stewart, gave evidence fundamental to these proceedings in relation to this scheme and transactions involving the applicants. The scheme arose from a contract between the Minister for Primary Industries and the NPFTC to negotiate the purchase of NPF units, previously described as Class B and Class A units, and to facilitate the sale of NPF boats displaced as a result of the reduced fishing effort and loss of licences. In December 1988 Mr Stewart began discussions with Mr J A Boschetti in these regards. Mr Boschetti gave evidence that at that time his operations were experiencing financial difficulties. These were attributed, amongst other related things, to a reduced catch in the NPF. He was therefore interested in selling some of the Class B and Class A units pursuant to the scheme.
Mr Boschetti's evidence and that of Mr Stewart are similar in relation to their recollection of the conditions for the sale of the units by the applicants. Mr Boschetti said that he agreed (in his capacity as a director of each of the applicants) to the sale of the units "only if the AFS agreed to issue the first applicant with a CFBL". Mr Stewart's evidence in this respect was the same. Mr Stewart said that he understood that the first applicant was not going to apply for the CFBL immediately, a similar statement to that of Mr Boschetti. Mr Boschetti said at paragraph 9 of his statement:
"It was from my point of view always a condition of sale of any NPF units under the Scheme that the Latitude Group retain the right to a CFBL so that it could fish for tuna in the future."
The evidence is that Mrs Boschetti typed a letter in December 1988 from a hand written draft provided by Mr Stewart. The letter, at T3, is reproduced in its entirety below:
Latitude Fisheries Pty Ltd
JA & JE BoschettiWednesday 14 December 1988
Australian Fisheries Service
Department of Primary Industries and Energy
GPO Box 858
CANBERRA ACT 2600Attn: Mr G Gorrie
Dear Sir
RE: REQUEST FOR COMMONWEALTH FISHING BOAT LICENCEWe are presently negotiating with the NPF Trading Corporation Pty Ltd to sell 2 class B and 535 class A NPF Units. As part of that negotiation we have asked to keep one of the Commonwealth Fishing Boat licences to use in an unmanaged fishery in Commonwealth waters (The Longline Tuna fishery off the Western Australian Coast targeting Big Eye and Yellowfin Tuna).
I understand that Graeme Stewart has spoken to you about this.
It is our intention to Longline for Big Eye and Yellowfin Tuna which will be exported to the Japanese Sashimi Tuna Market. Should incidental catches of Southern Bluefin Tuna be made we would either lease or buy enough Southern Bluefin Tuna Quota to Accommodate this.
The vessel we will be using will initially be NPF Licenced vessels and should the catches prove to be as profitable as we anticipate we would then consider a purpose built vessel for which we require the licence we are seeking.
The area to be fished would be all Commonwealth Waters West of 125 degrees East (The West Australian Border).
It may be that at some later time we may have to alter our operations in the light of experience. If this happens we want to be assured that the conditions of the licence could be changed provided always that we do not effect some other managed fishery.
We would therefore ask that a conditional Commonwealth Fishing Boat licence be issued to Latitude Fisheries Pty Ltd for the taking of Tunas, except Southern Bluefin Tuna, in Commonwealth Waters West of 125 degrees East and that a letter be provide by the AFS advising that the condition of the licence may be altered in future if it felt appropriate and provided such changes do not effect any other managed fishery.
Yours faithfully
(Signed)
J A Boschetti
Director
The Tribunal notes what appears to be an inconsistency in the letter concerning just what the first applicant (or its persona, Mr Boschetti) was seeking from the Commonwealth – the first paragraph asked "to keep" a CFBL, whereas the last asks "that a conditional CFBL be issued …".
On 16 January 1989, the Manager of the NPF (Adjustment Program Section), AFS replied, in the following terms (at T4):
Department of Primary Industries & Energy
16 January 1989
Mr JA Boschetti
Director
Latitude Fisheries Pty Ltd
PO Box 77
Geraldton WA 6530Dear Mr Boschetti,
I refer to your letter of 14 December 1988 seeking to retain the right to a Commonwealth Fishing Boat Licence to take tuna in waters off Western Australia following the sale by you of 2 Class B units and 535 Class A units under the Northern Prawn Fishery Voluntary Adjustment Scheme.
I am very pleased to advise that should you sell these units under the Voluntary Adjustment Scheme it has been decided to allow you to retain the right to one unrestricted Commonwealth Fishing Boat Licence.
I apologise for any inconvenience caused by the delay in replying to your request and take this opportunity to wish you every success in your tuna fishing venture.
Yours sincerely
(Signed)
TF Meany
Manager
Northern Prawn Fishery and Adjustment Program Section
Australian Fisheries Service
Mrs Boschetti wrote to Mr Stewart on 16 December, 1988 the following letter (Ex. R1):
Latitude Fisherise Pty Ltd
16 December, 1988
Graeme Stewart & Associates,
PO Bix 280
Applecross WA 6153Dear Graeme,
Please find enclosed Deeds of Discharge relating to the Sale of Northern Prawn Fishery Concessions as listed below:Class B Unit No. 196 with 383 Class A Units in the name of Willowood Holdings Pty Ltd., $254,350.
Class B Unit No. 138 with 152 Class A Units in the name of Latitude Fisheries Pty Ltd. $196,400
Thanking you for your help in this matter.
Yours faithfully
(Signed)
J E Boschetti
That letter bears a stamp indicating receipt by "Aust. Fisheries" on 16 January 1989. It is unclear from the evidence why the letter was sent to AFS. It would appear from the evidence of both Mrs Boschetti and Mr Stewart that this was a covering letter sending the signed deeds to Mr Stewart to hold pending finalisation of the conditions referred to above.
On 22 June, 1989 Mr Stewart sent a facsimile on NPF Trading Corporation Pty Ltd letterhead, to the Australian Fisheries Service for the attention of Mr Wesney. The purpose of this facsimile is to request the AFS to reimburse the first applicant for a levy payment of $3,367.20 made by it in relation to one Class B and 152 Class A units swapped with "KFV" (no doubt a reference to another licensed fishing operation). the first two paragraphs of that facsimile (Ex. A4) state:
RE: LEVY PAYMENTS ON CLASS B 199 (sic) AND 152 CLASS A UNITS
1. Latitude Fisheries Pty Ltd are now in a position to finalize the sale of their unassigned unit holding to NPFVAS.
2. You will recall that this transaction involving 2 Class B units and 535 Class A units was commenced in December, 1988. At that time Mr Boschetti requested that as part of the transaction cancelling the two NPF licences, one Commonwealth Fishing Boat Licence be retained by Latitude Fisheries Pty Ltd. Latitude Fisheries' request was addressed to Mr Gorrie on 14th December, 1988. On 16th January, 1989 AFS wrote to Latitude Fisheries (AFS Ref:8716E) agreeing to the request. The decision was made the week before 19 January, 1988 (sic) while I was in Townsville …(indecipherable).
The next relevant communication in this regard is a letter from NPFTC dated 30 June 1989 and signed by Mr Stewart as "Principal Representative" (T5). This letter is addressed to "Mr Con Keating, Manager, Northern Prawn Fishery and Adjustment Programs, Australian Fisheries Service". The first four paragraphs of that letter are relevant and set out below:
RE: DEED OF DISCHARGE FOR SALE OF CLASS B 199 AND 152 CLASS A UNITS
Attached is the Deed of Discharge for the sale of Class B 199 and 152 Class A units from Latitude Fisheries Pty Ltd to NPFVAS.
This completes a sale of two Class B units and 535 Class B units which was commenced in December, 1988 and interrupted (sic) in February, 1989 when Latitude Fisheries Pty Ltd became involved in a simultaneous licence transfer with KFV and Marta Fishing Pty Ltd.
As part of the sale of the two Class B units to NPFVAS it was agreed that one Commonwealth Fishing Boat Licence would be issued to Latitude Fisheries Pty Ltd.
Attached is a copy of a letter from DPIE (ref 8716E) advising that one Commonweathl (sic) Fishing Boat Licence would be issued. I would be pleased if you could arrange for the Commonwealth Fishing Boat Licence to be issued.
Mr Ritter, for the respondent, asked Mr Boschetti why no follow-up was made when no reply to the above letter was forthcoming:
MR RITTER: But as a result of that [request] you didn't get either a reply or a license after that request, did you?---No.
And you didn't make any follow up written communication about that?---No.
Why not?---Because I had a letter from AFS saying that I had an unrestricted license that I could use some time in the future.
How long did you think that was going to be valid for?---As long a it took me to build a boat.
What if that never happened?---Well, it did happen. (Tr. p.220)
…
Well, I'm interested in what you thought the undertaking was?---The undertaking was that when I get access to some money and done a bit of exploratory work in that fishery, I would build a purpose-built boat. (Tr. p.221)
…
Yes. But did you think that that letter meant that notwithstanding any changes to Commonwealth fishing policy, you would still have the right to a license?--- I think I allowed for that in that letter that we wrote. If there was any conditions changed, I didn't want it to affect us. I think it was mentioned in that letter. [a reference to the letter of 14 December 1988, T3]. (Tr. p.221)
…
Yes. All right. That's what your letter said but Mr Meany's letter didn't refer to that aspect, did it?---Well, what did he refer to? Where's the letter?
Look at T4, page 13, please?---Yeah.
The second paragraph doesn't make reference to that aspect of your letter, does it?---Well, I'm happy with Meany's letter. I took it at face value, that he agreed with what we asked for.
Well, you say in answer to my question that you thought your license would be given to you despite any changes in fishing policy?---Yes.
And you say that because you put that in your letter?---Yes.
But in Meany's letter, that aspect of your letter wasn't referred to, was it?---Well, probably not, but I was happy with his letter.
All right. But when he says in the second paragraph what he was pleased to advise you of, there's no mention there of changes to policies, [for] example?---No, he doesn't mention it, no, there's no mention.
And did you think that you would be entitled by this undertaking you say you were given in that letter to a fishing boat license even if the legislation changed so there was no such thing as a fishing boat license?---Well, I got what I asked for.
Well, I'm asking you what you believed that to be at the time?---I believe they gave me the right to go tuna fishing at some time in the future.
And that would be so despite any changes to policy and any changes to legislation?---Yep.
Whenever you wanted to use it?---Yeah, whenever I wanted to. Whenever circumstances allowed.
You could just stick your hand up and say: I'm ready to use the license now, can you please give it to me?---Yes. (Tr. p.222)
Later, the Tribunal asked Mr Boschetti about his then intentions. In response he said:
"I had some units that the Commonwealth wanted and if I agreed to sell those units, they agreed to let me have a licence to take tuna at some future date, that's all I wanted. And I think it's fairly explanatory here, that we couldn't do it at the present time because we were having a few problems, but as soon as we could, we went out and did what we said we were going to do. It was a licence to be used in the future, and they were aware of that." (Tr. p.279)
As observed, despite the request contained in that letter (T5), no action was taken by the addressee. Indeed, nothing of any relevance in this regard transpired until almost 6 years later when, on 26 May 1995, Mr Boschetti wrote to the respondent in the following terms (T8):
(Letterhead details not reproduced)
26 May 1995
The Manager
SBT and Western Tuna Fisheries
AFMA
PO Box 7051
Canberra Mail Centre ACT 2610Dear Sir,
In January 1989 I sold to the NPF Voluntary Adjustment Scheme, 2 B Class units and 535 A class units.
Conditional on this transaction taking place was a commitment by the Australian Fisheries Service to allow me to retain a Commonwealth license enabling me to catch Tuna in WA waters. Please see copy of DPIE letter enclosed.
Would you please advise if AFMA will honour this commitment.
Yours sincerely
(Signed)
JA Boschetti
Encl
On 28 June 1995 Mr Paul Ryan, Manager, Licensing and Entitlements, Australian Fisheries Management Authority ("AFMA") the respondent in these proceedings, replied to Mr Boschetti, the first applicant , acknowledging his letter of 26 May 1995 (T9). In it Mr Ryan refers to the undertaking by AFS to be to allow [the first applicant ] to keep a CFBL and "not a request to retain an entitlement for revival at some future time." It then states: "I do not agree that Mr Meany's letter constituted an undertaking to revive an entitlement 6 1/2 years later." The letter goes on to explain that CFBLs existed under the 1952 Act which legislation was replaced by the 1991 Act, which created a new licence, the FP. It also refers to the respondent's published policies, in the July 1993 issue of Australian Fisheries Magazine, in relation to the grant of FPs– that FPs would not be granted on the basis of a CFBL that expired before 3 February 1992.
Evidence of the various communicative despatches by the respondent and its predecessor, the AFS, addressing the change in both law and policy in relation to the issued of CFBLs and FPs was provided to the Tribunal. The evidence, principally by Mr Venslovas, supplements T6 and T7. Document T6 is a supplement to the journal Australian Fisheries, in July 1993, headed "The New Look of Licensing", a publication by the respondent designed to alert those engaged in relevant fishing operations to the provisions of the then enacted 1991 Act, which replaced the 1952 Act. Mr Boschetti acknowledged that he would have received this publication either on his own behalf or as a director of the applicants.
The supplement (T6) begins with this introduction:
"The replacement of the Fisheries Act 1952 by the Fisheries Management Act 1991 has resulted in new arrangements for licensing fishing operations in the Australian fishing zone (AFZ)."
The Australian Fisheries Management Authority (AFMA) issues four types of fishery specific fishing concessions to commercial operators;· Statutory Fishing Rights;
· Fishing Permits;
· Scientific Permits; and
· Foreign Fishing Boat Licences.
Fishing concessions granted under the Fisheries Management Act 1991 permit the holder to fish in specific fisheries, not in the entire AFZ. The new approach gives better resource protection because operators in each fishery can be readily identified. It also helps to identify fishermen who have a genuine commitment to each fishery and protects the interests of those who invest capital to develop new fisheries or undertake fisheries exploration.
The supplement (T6) then proceeds to discuss the respective attributes of each of the four types of fishery specific fishing concessions. In this respect it states, for FPs:
Fishing Permits
The main purpose of Fishing Permits is to allow access to fisheries where no Plan of Management exists.
Fishing Permits allow access to specific fisheries and to specific areas of the Australian fishing zone subject to certain conditions. Usually the conditions relate to the type of fishing equipment that can be used or the species of fish that may be taken. Sometimes, the conditions relate to catch reporting requirements and by-catch arrangements. The holder of a Fishing Permit must pay fees and levies. … Fishing Permits are the main method of allowing exploratory and development fishing. The AFMA Board recently approved a policy to provide for the orderly exploration and development of new fisheries. This policy is outlined in Fisheries Policy Paper Number 4 Exploration and Development of a New Fishery. …
The supplement (T6) then speaks of transitional arrangements and in reference to CFBLs states:
Commonwealth Fishing Boat Licences and Master Fisherman's Licences are still used in the fisheries that continue to be managed under the Fisheries Act 1952.
This is because the Commonwealth controls some fisheries to the low water mark. …As the various State Acts refer specifically to the Fisheries Act 1952, it is not possible to authorise fishing operations in the northern prawn and tuna fisheries in waters off most States under the Fisheries Management Act 1991 until the States amend their legislation to refer to the Fisheries Management Act 1991. …
All CFBLs that were current when the Fisheries Management Act 1991 was introduced on 3 February 1992 remained in force until they expired. Upon expiry they may have been replaced by Fishing Permits allowing access to fisheries that were not subject to formal plans of management. …
Operators may fish using a combination of fishing concessions issued under the Fisheries Act 1991(sic) and the Fisheries Management Act 1952 (sic) …
Document T6 sets out a comparative table showing the essential differences between the CFBLs and the new FPs. Amongst them is the point that the former are "usually not fishery specific" whereas the latter are "fishery specific". The supplement contains considerable detail, including an outline of policies relating to the grant of FPs and "Fishery Specific CFBLs authorising access to Fisheries not subject to specific management arrangements".
Document T6 then summarises the five "Policies on the Grant of FPs and Fishery Specific Commonwealth Fishing Boat Licences Authorising Access to Fisheries not subject to Specific Management Arrangements". Policies 1 and 3, in particular, relevantly state:
Policy 1
Operators who held Commonwealth Fishing Boat Licences (CFBLs) which expired prior to 3 February 1992 will not be granted a Fishing Permit solely on the basis that they held that CFBL. This policy will also apply to the grant of fishery specific CFBLs.
Policty 3
Operators who placed a CFBL into abeyance will not be granted a Fishing Permit on the basis of having held the CFBL in abeyance unless the application for the Fishing Permit is submitted within two years of the date the CFBL was placed in abeyance. …
On 3 November 1994 the respondent issued a media release headed "Development of Management Arrangements for the Western Tuna and Billfish Fishery" (T7). the first three paragraphs of the release state:
DEVELOPMENT OF MANAGEMENT ARRANGEMENTS FOR THE WESTERN TUNA AND BILLFISH FISHERY
The Australian Fisheries Management Authority (AFMA) today announced further developments in the establishment of long term management arrangements for tuna and billfish fishing in Western Tuna and Billfish Fishery (WTBF). The WTBF covers tuna and billfish fishing not covered by the East Coast Tuna Fishery and Southern Bluefin Tuna Fishery management arrangements.
Following AFMA's media release of 23 May 1994, AFMA permitted some operators to exchange access to the East Coast Tuna Fishery for access to the WTBF. AFMA is now closing the WTBF to new entrants as the number of fishing entitlements granted for the fishery is considered to be sufficient at this stage in the development of the fishery.
'It is AFMA's policy to no longer approve applications from operators wishing to exchange access to the East Coast Tuna Fishery, for access to the WTBF,' Chairman of the AFMA Board, Mr Jim McColl, said today.
Following receipt of Mr Paul Ryan's letter of 28 June 1995 (T9) referred to above, the solicitor for the first applicant, wrote on its behalf submitting that the first applicant was entitled to be issued with a FP on the basis of the undertakings previously given by the AFS (the predecessor to the AFMA). The submission refers to the letter of 14 December 1988 (T3) and the reply of 16 January 1989 (T4) asserting that the first applicant , not having held the CFBL in question was not affected by the respondent's Policy 1 (T6 supra) which states that holders of CFBLs which expire before 3 February 1992 will not be granted a FP solely on the basis that they held a CFBL. It seems that the respondent treated that letter (and the letter of 14 December 1988 (T3)) as an application for a FP to fish for tuna, other than Southern Bluefin, in the W/STBF. It therefore put in train the events leading to this review of the decision of a delegate of the respondent on 7 January 1999 and its reconsideration and affirmation notified by letter of 31 March 1999, to the solicitors. (T25)
In his evidence Mr Stewart explained that at the time of negotiating with Mr Boschetti to purchase the applicants' Class B and Class A units in the NPF, it was then ministerial policy that no "licence splitting" should occur if it resulted in more boats being active in a fishing zone, particularly the NPF. He told the Tribunal that he understood that this was a fundamental consideration of the AFS when he discussed with their Messrs Meany and Wesney the condition which Mr Boschetti sought to enable him to retain a right to fish for tuna in the S/WTBF in future and therefore retain an unrestricted CFBL. He said that there was concern that this would amount to licence splitting. The following extract from the transcript addresses this evidence in particular:
MR BUSS: Yes. As best you can recall, can you indicate who mentioned this to you?---It was the view of Mr Wesney certainly. And probably Mr Meany. That the maintaining one Commonwealth fishing boat licence would clearly be licence splitting which the Minister would not be happy with. Issuing a new one, which was not part of the original package, was not licence splitting. (Tr. p45, lines 4-9)
During cross-examination, Mr Stewart acknowledged that at this time there was in place a ministerial directive in relation to a licence freeze policy which would ordinarily have prevented the issue of another CFBL. He admitted that in that light "it has to be very exceptional circumstances to issue a new licence. That's why it's not done very often. It has to be a good reason." (Tr.p.55, lines 36-39)
Mr Stewart also said that to the best of his knowledge that the conditional sale of the units in the NPF pursuant to the voluntary adjustment scheme, by the applicants was unique. (Tr. pp.45-46)
During his evidence Mr Boschetti said that whilst he was generally aware of the changes brought by the 1991 Act to the issue of FPs, he was not concerned that these affected what he believed to be a promise by the respondent (or more particularly, its predecessor, the AFS) to issue the first applicant a permit to fish for tuna in the AFZ waters known as S/WTBF. When the evidence of Mr Venslovas was put to Mr Boschetti and in particular, he was asked about his awareness of the various attachments (R4) and to T6 and T7 (above) he said he would have received these and may well have read them. Mrs Boschetti gave evidence that her husband was a keen reader of publications about his industry and those issued by the respondent, including the Australian Fisheries magazine and its supplements. Mr Boschetti confirmed this but said that he mainly focussed on articles that he believed were relevant to his then fishing operations. He admitted being at least vaguely aware of the "abeyance policy" but denied any knowledge about the "licence freeze" on CFBLs, and the policy on preventing "licence splitting', each referred to by Mr Venslovas. His evidence was that at the time of the issue of these circulars and articles by the respondent, in 1992 and 1993, as he did not then have a licence to fish for tuna he was not particularly concerned about the announcements even though he may have read them. He felt these announcements did not affect him then. However, by 1994 he was fishing for tuna and did note the relevant policy announcements about potential controls relating to tuna fishing. However, Mr Boschetti's evidence (supra) was that in his view none of these affected what he believed to be a promise to be issued with a fishing licence to enable him to fish for tuna (subject to conditions) in the unmanaged tuna fishing area known as the S/WTBF.
Mr Boschetti was asked why he never made inquiries of the respondent about what he understood to be a right to a FP during the period after 1991 when these policies and changes were being introduced and which clearly affected the rights of fishermen to fish for tuna in the relevant zone. The Tribunal understands Mr Boschetti's evidence in this regard that he was very busy at the time as the business was not going as well as he wanted and he was fairly well preoccupied with its day to day management. His evidence (supra) was that (in any event) he had what he wanted (the promise) and when the businesses were in a position to fund a purpose built tuna fishing vessel he would apply for the licence. He said that he would never have sold the 2 Class B and 535 Class A units in the NPF had he not been promised "a right to and unrestricted licence to take tuna in Western Australian waters", (Tr. p.214).
Mr Boschetti's evidence was that as the business was then in a better financial position to consider building the purpose built vessel, the letter of 26 May 1995 (T8) was written to inquire whether the respondent would "honour this commitment".
Mr Boschetti was asked about the businesses' purchase of tuna FPs from the Eastern States when he had a right, so he said, to be issued with one free. This is the exchange in that regard:
MR RITTER: Now this [a reference to T7, the media release of 3 November 1994 (supra)] concerned a number of things but, in particular it made reference … to the exchange of permits from the east coast to the Western Tuna and Billfish fishery. You were aware of that policy, weren't you?---Yeah, I became aware of it, yes.
Well, in particular you utilised that policy, didn't you?---I did.
Because you bought four units from people who were fishing on the east coast, didn't you?---Yes.
Any you then used the swaps or exchange policy to use them on the west coast?---yes.
To go fishing for tuna?---Yes
…
And at this stage you say you still had this entitlement to a licence to fish for tuna, based on that commitment that you say you got from Mr Meany?---Yes.
Well, why not exercise that entitlement at that time if you had it?---Well, we didn't have the money to put on a new boat in the fishery. And that is the time I said that we were going to apply for it. And that is when we applied for it. Then.
…
Well, here was a situation where, according to your evidence, you could have gone to AFMA and said, "I want that licence or permit now", couldn't you?---I could have done but I didn't do it.
But instead you bought permits on the east coast?---That is true.
Well, I suggest to you that if you had –if you thought you had this commitment to a licence, you wouldn't have spent money purchasing licences on the east coast. You would have just asked for your free licence to use on the west?---Well, I said before that we have got 20 licences. I am in the fishing business. And I believe that those units were of some use to me in the Western Tuna Fishery. And that had nothing to do with the licence I tried to get from Meany.
…
Without thinking about that [the right], you go off and pay money for licences to swap?---That is exactly what I did, yeah.
Well, that would be foolish business practice, wouldn't it, Mr Boschetti, with respect?---What, buying four licences?
When you had one that you could use for free and you said all along that you were struggling, yes?---Well, I though it was a good business decision to buy those four licences.
…Why buy [the four licences] to use for tuna fishing when you had one, according to you, that you could use for free?---Well, why – I don't know why I didn't ask them for that license then.
It suggests, does it not, that you didn't really think you had that license or the entitlement to that license?---Well, I have to disagree with what your saying. (Tr.pp.249-250)The following questions put by Mr Ritter to Mr Boschetti, and his answers, relate to the various fishing licences held and vessels involved in "the business" and Mr Boschetti's intentions in these regards:
Mr RITTER: Mr Boschetti, Mr MacNish asked you about the four licenses in the Tuna and Billfish Fishery that you currently have and you say that there are three boats that can be used on three of those licenses at the moment? ---At different times of the year, yes.
Yes. And there's one license for which you have no boat?---Its not been used.
No. In fact, the endorsements on the license at the moment would reflect that there was no boat on three of those four licenses, wouldn't it?---Yes.
And that's because the Business Class and the first Class are currently being used for rock lobster fishing?---That's correct.
Yes. But you use those two boats for tuna fishing outside the rock lobster season?---Correct.
And the Discovery 3 was the purpose-built vessel?---Yes.
For tuna fishing?---Yes.
And that's used for tuna fishing throughout the year?---Yes.
And when you were negotiating with Mr Stewart, what you wanted in the end was a license or a permit as it now is, which would allow you to use a purpose-built vessel when it was ultimately built?---Correct.
Yes. So in effect, you now have what you want?---No.
Well, you've got a license which can be used for your purpose-built vessel and it is used, isn't it?---I've got four licenses.
Yes. But you have a license which is used for a purpose-built vessel?---Yes.
The Discovery 3, was that launched in July … 1999?---Yeah, I think so. I can't be sure.
Okay. And you don't currently have any other boats sitting idle that you could use for tuna fishing if you were granted another license?---No.
Nor are there any boats under construction?---No.
What it would give you, though, is the capacity to use another boat when one became available to you, if and when one became available to you?---Yep.
And in addition to that, there is the fourth license at the moment, which you could use to fish for tuna if and when you had a boat available to use?---Yeah. My intentions are to use those four licenses that I've got, plus the one that I'm going to get.
Right. So your intention is to maximise use of all those licenses if you get the other one?---Yes.
Yes. And therefore increase the amount of fishing in the fishery by using those licenses?---I don't necessarily agree with that. I wouldn't know.
A simple point, though, is if you've got another boat out there fishing, you would hope to catch, as you say, 200 tonnes of tuna per annum?---Yeah.
…
The D. PRESIDENT: … Is that what you have in mind, if you get the license?---To put another [boat] into the fishery, yes, it is.
Another purpose-built?---I intend to have as many as I can on those licenses, all purpose-built. (Tr. pp.215-217)
Much of the rest of the cross-examination of Mr Boschetti by Mr Ritter concerned Mr Boschetti's views on the sustainability of tuna fishing in the Western and Southern Tuna and Billfish fisheries (W/STBF). In particular Mr Boschetti was examined in relation to a letter which he had written in April 1998, by way of a submission, to the Western Tuna MAC (Ex. R2). That letter was written at a time when the government was considering removing all internal fishing boundaries including the divide between the Western and Southern tuna and billfish fisheries. That divide is referred to as latitude 350S and is approximately off the town of Margaret River in Western Australia. The letter is reproduced below:
Latitude Fisheries Pty Ltd (letterhead)
Mr Peter Neve
Executive Officer
Western Tuna Mac
PO Box 7051
Canberra Mail Centre ACT 2601Dear Peter,
Re: Internal fishing boundaries in the WTBF and STBF
I apologise for the late arrival of our submission regarding the proposed changes to the internal boundaries.I wish to express my concern over altering the present boundaries. I am opposed to any changes to the present boundaries until further information is available regarding the sustainability of the fishery. I believe there is a potential fishery on the West Coast, for Broadbill and Tuna, however the resource has not yet been properly assessed as to how much effort it can sustain.
At present there are 40 permit holders with only a small number of these being active. We are in possession of 4 licenses and have been fishing since 1992 in the rock lobster off seasons. As you are aware we have invested considerable time and resources in developing and exploring this fishery. As we have investigated this fishery, much interest in it has been generated. Licenses are available for purchase quite readily for those wishing to pursue this interest.
Over recent years there has been a considerable increase in effort on the east coast of Australia. Vessels have become larger and more efficient in fishing effort. This too is likely to occur in the Western Fishery over the forthcoming years by the present operational permit holders and those holders who do not currently operate may choose to commence. The latent effort in the fishery at present is too great to even consider opening it up further. Time is needed to observe and develop this fishery.
We are involved in the Western Rock Lobster Fishery and the Northern Prawn Fishery and have been involved in significant reductions of effort under management plans to preserve the Fisheries. The NPF in particular has seen drastic reductions through costly buy-back schemes. These types of management plans have the potential to become very costly to implement in the long term. I believe this should be taken into consideration as any short term cost saving measures could easily eventuate into long term expensive measures should the Western Tuna Fishery be over fished.
We hold the view that the fishery is not likely to support even the present 40 permits holders. Opening this fishery's boundaries even under Option 1 at this stage of development would be very premature and perhaps damaging to the resource. We are strongly opposed to any changes at present.
Yours faithfully
(signed)
Bert Boschetti
Mr Ritter referred Mr Boschetti to this letter. The following record of the transcript relates:
Mr RITTER: And indeed in the … third paragraph you confirmed that you had four licences?---Yes
And you said there are 40 permit holders with a small number of these being active?---I don't know if that number is correct. I'm not sure if that number is correct.
All right. But you wrote that on the basis of your understanding that it was correct, did you?---At the time, yes.
Yes. Do you know the correct figure now?---No. 125 – I know that the number is for both fisheries.
Total for both fisheries?---Total for both fisheries, yes.
Is that just long line?---Yes.
If I put to you that it was 89 long line and the rest were other forms of fishing, would you accept that?---89?
Eighty nine long line licences in both fisheries?---I seem to recall the number 125.
I think the number 125 encompasses long line plus permits which allow other than long line?---No. I don't have any – I'm not sure; …
… But you say in that third paragraph that you were in possession of four licences?---Yes.
And you go, in the next paragraph, to say:There's been a considerable increase in effort on the east coast of Australia.
?---Yes
The vessels have become larger and more efficient in fishing effort.
?---Yes.
This too is likely to occur in the Western Fishery over the forthcoming years by the present operational permit holders and those holders who do not currently operate may choose to commence.
?---Yes.
In other words, there were people who held permits which weren't using them to the full extent that they may do?---Say that last bit again, I didn't …
Yes. In other words, there were permit holders who could fish in the Western Fishery who weren't using those permits?---That's right, weren't using them, yes.
In the same way that you have permits now that you don't exploit in the fishery?---Yeah.
Okay. And the fact that people could use those permits to fish in the fishery is what's known sometimes as "latent fishing effort"?---Yes.
Okay. And you say in that sentence then:The latent effort in the fishery at present is too great to even consider opening it up further.
?---Yes.
And there has been a closure of the fishery at that stage, hadn't there?---Yep.
Yes. And are you still of the view that the latent effort in the fishery is too great to even consider opening it further?---Yeah, I do.
Why is it then that you want an extra … permit?---Look, if they'd have given me the permit when I applied for it none of this would have applied.
Well, I don't see that as answering my question, Mr Boschetti. If you agree that the latent effort in the fishery at present is too great to consider opening it up further how do you reconcile that with your application for another permit?---I suppose I can't.
No. Do you agree with the next sentence still: "Time is needed to observe and develop this fishery"?---Yes.
… [y]our point was, …, that if a decision is taken now to open up the fishery and it's decided down the track that the fishery should contract again, the exercise of contraction can be a long and costly exercise?---I agree.
That was your point, wasn't it?---Yes, it is.
And that was your point being relevant to the opening up of the Western Fishery?---Yes.
And it's still a valid point. Yes?---Yes.
Then in the next paragraph you say:We hold the view that the fishery is not likely to support even the present 40 permit holders.
?---Well, that is my view.
… And you say … that, "Opening the fisheries boundaries is premature"?---Yes.
"And perhaps damaging to the resource"?---Yeah
And they are views that you adhere to as well?---Yes. (Tr. pp.263-267)
Later, in re-examination of Mr Boschetti's evidence in relation to the letter to Western Tuna MAC (Ex. R2) Mr MacNish for the applicant put the following questions which Mr Boschetti answered as below:
Mr MACNISH: At the time you wrote the letter in April '98 over how many years had you invested time and resources in developing that fishery, [the WTBF]?---Since 1989
… So over a period of 9 years you had, is it the case, invested a considerable amount of money---?---Yes
--- in developing that fishery. Was it a concern of yours that if all of the internal boundaries between all of the tuna fisheries around Australia were removed that there might at least be a flood of activity in the Western Tuna Fishery?---I believe that to be the case, that would happen.
And were you, at the time you wrote this letter, concerned to protect your commercial interests and your investment in the fishery?---Yes.
At the time you wrote this letter did you personally have the benefit of any scientific evidence to back up your express concerns?---NoMr Ritter, on behalf of the respondent, then produced a copy of an application by the first applicant in these proceedings, to be joined in another matter before the Tribunal in November 1999 (Ex. R3). The document was put to Mr Boschetti in his capacity as a director of the first applicant. He confirmed that he was familiar with the application and that it reflected views that he still held. The essence of the application was to join (the present respondent) in opposing an application by another (fisherman) party, which held a FP in the STBF, to seek a right to fish for tuna in the WTBF. That right would be achieved if the restriction on the FP to fish north of the 340S latitude "line" were to be removed.
In its pleading for the application to join, the first applicant submitted that if the application was successful then it "will suffer financial hardship" due to increased access to the WTBF by other commercial fishermen, increased competition, over exploitation of the WTBF and depletion of fish stocks (para 11 of Ex. R3). It further submitted:
13. It is in the interests of all licence holders in the WTBF and the STBF that the Demarcation Line is maintained since:-
(A) the Demarcation Line substantially limits access to both the WTBF and the STBF;
(B) limitations on access to the WTBF and the STBF ensure the ecological sustainability of the fisheries and prevent over exploitation of their resources;
(C) the complete lack of any scientific and pragmatic data about the resources of the WTBF not only cannot justify the effective removal of the Demarcation Line and increased access to the WTBF, but is a substantial reason why the Demarcation line should remain as an effective barrier between the WTBF and the STBF;
(D) the removal of the Demarcation Line would threaten the sustainability of the resources of the STBF and the WTBF and Australia's credibility within the international fisheries community. (para 13 Ex. R3)
In paragraph 15 of its application to be joined, (Ex. R3), the first applicant repeats its views expressed in paragraph 13(C) concerning "the complete lack of any scientific and pragmatic data about the resources of the WTBF", and submitted that the demarcation between the two tuna fisheries should be maintained in accordance with the exercise of "the precautionary principle". Mr Boschetti said, in answer to a question put to him by Mr Ritter, that he understood what was meant by the precautionary principle. The Tribunal is satisfied that Mr Boschetti has a proper understanding of that principle which is defined as follows :
3.5.1 precautionary principle-
Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.
In the application of the precutionary principle, public and private decisions should be guided by:(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and
(ii) an assessment of the risk-weighted consequences of various options.
Later, the Tribunal asked Mr Boschetti what he understood by the expression "over exploitation" used in the submission to be joined (Ex. R3) above. He confirmed that it was a reference to both the effects on the fishing stocks and the economic prosperity of those fishing the particular resource; (Tr. p.278). Indeed, in paragraph 12 of its submission (Ex. R3), the first applicant asserts that it will be disadvantaged if the Demarcation Line is removed. And those disadvantages are enumerated as resulting from a decline in the current value of WTBF fishing licences, an erosion of the benefit of its considerable investment in the WTBF (through increased competition) and possible "over exploitation of the fishery's resources"; (Ex. R3, p.3).
Evidence relating to the Table of DetrimentOn 27 and 28 April 2000, the two business days prior to the commencement of the hearing in this matter, the applicants' solicitor filed with the Tribunal a supplementary statement of evidence for each of Mrs J E Boschetti (Ex. A2b) and Mr J A Boschetti (Ex. A6b) and a statement of evidence by Ms Lian Papaelias (Ex. A5). The supplementary statement filed on behalf of Mrs J E Boschetti and the statement filed on behalf of Ms Papaelias deal with what the applicants assess as a financial detriment suffered by them in consequence of having sold, in 1989, the 2 Class B and 535 Class A units in the NPF previously mentioned.
The respondent objected to this evidence on the basis that it was not given reasonable notice and was, in effect, taken by surprise, having no time to prepare an appropriate cross-examination of either Mrs J E Boschetti or Ms Papaelias. No cross-examination was conducted by the respondent in respect of this evidence. The respondent submitted in these circumstances that the evidence should be given no weight. The Tribunal, whilst sympathetic to this submission never-the-less does canvass the evidence for the sake of completeness but as will be seen, that evidence has no bearing on the decision reached.
The Tribunal finds it helpful to explain what it understands the Table of Detriment (Ex. A2c) proposes. The relevant evidence relating to the source and reliability of the figures used in the calculations will be mentioned subsequently. In essence, the Table is a calculation of what the applicants say they have forgone, in financial gains otherwise likely to have eventuated up to the time of the hearing, because they sold their 2 Class B units and the 535 Class A units in the NPF, in 1989. The Table makes relevant calculations for three separate periods, each commencing in 1988 and ending respectively in 1995, 1998 and 2000. The Table begins by stating the amount received as a result of the sale of those units to the government for $450,750. It then inflates that amount by the Reserve Bank 10 year Treasury Bond rates prevailing from 1988 to 2000 to calculate the present value of the consideration as at 1995, 1998 and 2000. The Table then calculates the "cost of maintenance of A units" by multiplying, for each year 1989 to 1999 inclusively, 535 (being the number of Class A units sold) by the annual licence fee payable to maintain each of those units in the NPF. It then provides a total of those amounts for the three periods mentioned, to 1995, 1998 and 2000. Then follows a calculation based on the fact that in 1993 all NPF licences were subject to a compulsory surrender scheme requiring the surrender of 30.76 percent of licences. Apparently, the government made no payment for the units surrendered. The Table then assumes that the applicants would have purchased the same number of units as surrendered in order to maintain the number of Class A units at 535. Therefore, the Table calculates that on the basis that a Class A unit was then selling for $1,440, it would have cost the applicants, in 1993, $342,720 to replace the 238 Class A units, compulsorily surrendered. The Table then calculates what would have been the value of those 535 Class A units if held to 1995, 1998 and 2000 respectively, using unit values of $4,000, $6,800 and $6,500 respectively and adding to each of those three amounts a value for two Class B units. The next factor taken into consideration in the Table is an hypothetical sum receivable should the 535 Class A units have been leased. The hypothetical revenue is calculated for 1995, 1995 to 1998 inclusively, and 1995 to 1999 inclusively. The accumulated amounts for the three periods are: 1995, $176,550; 1995 – 1998, $749,000; and 1995 - 1999, $957,650. The Table then summarises the foregoing amounts for each of the three periods from 1988 to 1995, 1998 and 2000 respectively, concluding that the financial detriment suffered, because the Class B and Class A units in the NPF were sold in 1988 and 1989, is $714,477, $2,605,725 and $2,319,983 respectively.
Mrs Boschetti provided background evidence as to how the various valuation figures used in the Table were ascertained. The amounts shown in the Table for the sale consideration in 1988 and 1989 were actual amounts received (for other sales) and referred to previously in evidence. The amounts used to calculate the cost of levies to maintain the units were actual amounts for all but the 1995 year which was "guessed' (Tr. p82, lines 31- 40). The amount used to calculate the cost of the hypothetical repurchase of the 238 units compulsorily surrendered was based on actual purchases and sales (of other units) in 1993 (Tr. p83). The value attributed to the units was based on verbal unconfirmed information obtained from a person who was then an AFMA board member actively involved in the fishing industry (Tr. p85, line 14) and actual purchases by the applicants (Tr. p85). Similarly, the amount attributed to the hypothetical leasing of the units from 1995 was based on actual leases in 1995, 1997 and 1998 and a guess for 1996 (see Tr. p86).
As mentioned, the respondent did not cross-examine on this evidence contending that it was prejudiced by late notice. The Tribunal is satisfied, on the basis of Ms Papaelias' evidence that the arithmetic is correct. However, that witness was not able to take the matter any further and indeed had no actual knowledge of the assumptions and hypotheses upon which the calculations were based. The Tribunal, in the circumstances, is reluctant to accept the Table of Detriment (Ex. A2c) as setting out a reasonable statement of financial detriment suffered by the applicants because they sold their two Class B and 535 Class A units in the NPF in 1988 and 1989. The evidence of Mr Boschetti and supported by Mr Stewart is that those units would not have been sold if Mr Boschetti had understood that the first applicant would not have been entitled to a CFBL (or FP as it now is) at some future time. In the opinion of the Tribunal it is pure conjecture whether, in the years since 1988, that had the units not been sold, then the applicants would have derived the sort of financial results fundamental to the calculations. Having regard to the issue before the Tribunal and its task of reviewing the decision under review, the Tribunal is of the opinion that the evidence relating to an hypothetical financial detriment suffered by the applicants is not relevant. The Tribunal makes no findings as to whether the calculations are reasonable, reliable or otherwise. Simply put, in the opinion of the Tribunal the applicants are drawing a rather long bow in their "but for" calculations based on the fundamental premise attested to by Mr Boschetti. That premise is that the applicants would not have sold their 2 Class B units and their 535 Class A units in the first place unless they had a promise to be issued with a CFBL as and when they applied for it in future. The fact is that the applicants did sell those units at the time. Mr Boschetti admited that at the time of the sale of the two Class B and 535 Class A units in 1989, the first applicant was experiencing a downturn in its NPF business and that the sale was probably motivated by what was then perceived to be sound commercial judgement which included a plan to diversify in future into tuna fishing.
Based on the evidence of Mr Boschetti and Mr Stewart, the Tribunal accepts as fact that the sale of the units in the NPF was conditional upon the said promise. However, that, of itself is not sufficient. And in the light of other commercial considerations pertaining at the time it is not open to draw an inference of fact that the sale of the units would not have gone ahead without the promise. Hindsight is a marvellous thing and allows reflection on one's past actions to conclude that given present knowledge one may well have behaved differently. This, in the Tribunal's respectful opinion, is all that can be concluded about the statement of detriment. It cannot, by its very nature, create a factual matrix upon which the Tribunal can draw conclusions. In the Tribunal's opinion, put at its highest, the statement of detriment is an expression of opinion, not fact or indeed, an inference which cannot be supported by positive proved facts.
The Tribunal simply observes that on the basis of the evidence of Mrs Boschetti there are many unsatisfactory aspects to the basis of the calculations of the financial detriment claimed which, if they were at all relevant, then they may not be reliable.
The evidence of Mr Venslovas and Ms LackMr. Venslovas has been a Senior Manager in Compliance with AFMA since February 1992. Prior to this appointment he was employed by Australian Fisheries Service. Mr. Venslovas said that during the period 1988/89 when various Class 'A' and 'B' units in the Northern Prawn Fishery were surrendered, the second applicant held units and one CFBL at the time the buy-back was being undertaken or negotiated. However, the first applicant held one Class 'B' unit and several Class 'A' units, but did not hold a CFBL in respect of the Class 'B' unit. He said that the management arrangements at that time required a CFBL before the Class 'A' and Class 'B' units could be activated, that is, by attaching those units to the CFBL. The units held without an accompanying CFBL were referred to as "units in abeyance" or "units in suspense".
Mr. Venslovas referred to the "License Splitting Policy" introduced in 1984 (R4, PEV 4) at a time when the number of limited entry fisheries was increasing. It followed an agreement between the Commonwealth and relevant State and Territory Ministers. The policy reflected concerns of over-exploitation of fishing stocks. The then Australian Fishing Council ("AFC") "endorsed the general concept that where a boat was endorsed to operate in more than one limited entry fishery, or more than one zone of a limited entry fishery, the licensee not be permitted to transfer those endorsements separately except in accordance with specific criteria applying to the fishery concerned." (R4, PEV 4, p19) Such a split of licences would allow two or more boats to operate compared to the previous situation where only one boat operated in respect of those licences.
Mr. Venslovas said at the time of Mr. Meany's letter to the applicant (T4) in January 1989, that "any CFBL held by the applicant would have allowed access to tuna fisheries, in particular, the western tuna fishery".
Mr. Venslovas stated that after the introduction of a freeze on the issue of new licences in July 1985, a "Licence in Abeyance Policy" was adopted by the AFS. This policy was explained in a document sent to the AFC in 1987. The policy allowed operators who were in the process of changing boats (or changing their business operations) and who held a CFBL, to place their licence in "limbo" for up to two years, until such time as they completed the relevant transactions. When a licence was placed in abeyance, the following conditions arose:
· In the case of a Commonwealth license, any State licence attached to it was also placed in abeyance;
· the entitlement to reactivate a licence in abeyance had to be exercised within a two year period;
· the right to reactivate any licence placed in abeyance was also subject to any change in fisheries management arrangements that occurred during the abeyance period; and
· there was no guarantee that a licence in abeyance would be reactivated or renewed.
Mr. Venslovas said that the licence in abeyance policy could apply, or potentially apply, to Northern Prawn Fishery licences.
Mr. Venslovas stated that changes in the licence in abeyance policy arose following the replacement of the Fisheries Act 1952 by the Australian Fisheries Management Act 1991 ("the AFM Act"). From 1994, under the AFM Act, FPs could only be issued to a "natural person or company" and no longer to particular boats. The reason, he explained, was to enable operators to retain their entitlement in the form of a FP without the need to place it in abeyance. By this means, operators would continue to contribute to the management of the fishery by paying management levies.
Mr. Venslovas stated that CFBL's continued to be issued after the AFM Act came into operation, subject to conditions. After 3 February 1995, CFBL's became "fisheries specific". Prior to this the operator was not confined to a particular fishery.
Mr. Venslovas referred to a number of strategies adopted by Australian Fisheries over time to ensure that operators in a particular fishery were aware of the new developments in fisheries management and policies that would affect their operations. These included publication of articles in commercial fishing journals, press releases and ministerial announcements. The intention was to ensure that fishermen, in making business decisions took account of actual and proposed policies. He said that some of the proposed policies invited public, as well as industry submissions, as part of the policy determination process.
Mr. Buss asked Mr Venslovas about the distinction between a "cancelled licence" and a "licence in abeyance". He said that "cancelled" referred to a situation where the licence had expired and not renewed or placed in "abeyance" prior to expiry. He added that if a licence was cancelled then, normally, it could not be reactivated. He said that AFMA considered the term "in abeyance" applied in the following instances:
· when an expired licence, which had not been renewed (at its expiry time) was placed "in abeyance" by the licensee instead of being renewed; and
· when the licensee of a current licence not then in use requested it be held "in abeyance".
Both instances required an application by the licensee prior to expiry. Licences in abeyance could not be used. The licensee was required to apply to reactivate it. As mentioned, there was no guarantee that AFMA would necessarily reactivate a licence in abeyance.
Mr Venslovas distinguished licences officially "in abeyance" from those not being used at any particular time. The latter were considered to be "latent effort licences". The Tribunal understands that annual renewal fees would be payable in relation to such licences but not in relation to the former.
The following is the transcript of questions by Mr Buss of Mr Venslovas, in relation to what Mr Buss termed a "more lenient approach" by AFMA to issuing fishing concessions in the Southern and Western Tuna and Billfish Fisheries ("S/WTBF"):
Mr Buss: And is it correct that CFBLs continued to be issued for most tuna fisheries until early 1995?---That's correct.
Thank you. Is it correct that in 1994 AFMA facilitated the exchange of ETBF [Eastern Tuna and Billfish Fishery] concessions for S and WTBF concessions in an attempt to encourage development of the fishery?---That's correct, to my knowledge.
Is it correct that in late 1997 AFMA reconsidered management measures, including vessel length restrictions, internal boundaries [of Fisheries] and licence splitting?---That's correct.
Is it correct that in 1997 the WTMAC [Western Tuna MAC] recommended and AFMA accepted that a more lenient approach to what are known as licence splitting applications be taken?---Within the existing cap on licences, yes.
And was it the purpose of that more lenient approach by AFMA to enable the transfer of W and STBF fishing concessions independent of other fishing concessions?---That process was only allowed for in 1994. The fishery was subsequently closed to new licences in December 1994.
Well, would you agree with this proposition: in November 1997 the WTMAC recommended and AFMA accepted that a more lenient approach to what are known as licence splitting applications be taken enabling the transfer of W/STBF fishing concessions independent of other fishing concessions?---Yes, that was to allow (interruption) … licence splitting within the existing WTBF fishery under the cap on the number of authorisations that were issued in respect of that area.
Well, do you agree that this more lenient approach was taken to facilitate access to S/WTBF fishing permits?---It allowed for a more flexible approach.
Well, would you just answer the question: do you agree with the proposition that the more lenient approach was taken to facilitate access to Southern and Western Tuna and Billfish Fishing Permits?---No, I don't agree with that. I would say that it allowed a more flexible approach within the existing framework, and the existing framework being the total number of licences or authorisations. So it didn't allow for any additional authorisations to be issued but it allowed those that had them more flexibility in their areas of operation and so forth.
If Ms Lack expressed the view that this more lenient approach was taken to facilitate access to Southern and Western Tuna Billfish Fishing Permits, would you defer to her view on that point?---I would.
Do you agree that in December 1997 the AFMA Board agreed to remove vessel length restrictions in the Southern and Western Tuna Billfish Fishery effective from 1 July 1998?---Yes. (Tr.pp.311-312)
In response to a Tribunal question concerning restrictions in renewing CFBLs prior to 1995, Mr. Venslovas in essence said there were no formal restrictions until AFMA replaced the AFS, when fishery specific CFBLs were issued. Mr Venslovas said "However, [the fishery specific restrictions were not] really stringently applied because AFMA didn't have the resources to go through and verify all the catches and so forth that operators were submitting to prove a previous commitment. So, for all intents and purposes, they were renewed as a matter of course"; (Tr. p.313)
Mr. Venslovas agreed with the proposition that a person operating in the Northern Prawn Fishery, subsequent to 1995, would have only required Class "B" units and Class "A" units as statutory fishery rights. However, these rights would not have given rights to fish outside the NPF (i.e. in the S/WTBF).
During re-examination, Mr. Venslovas was questioned on AFMA policy in a situation where a person held an inactive CFBL in 1989 and sought to make it active in 1995, stating:
"Well, AFMA would have considered that CFBL would have been in abeyance from '89 and the 2 year period would have expired in '91 and based on that policy, they would not have been granted a CFBL." (Tr. p.316)
Furthermore, Mr. Venslovas said the outcome would have been the same if someone held a CFBL in 1989 and just let it expire. However, the evidence is that if the person had paid the annual licence fees to retain the CFBL, although not using it, it would have been regarded as "latent fishing effort" with no restrictions prior to 1992 on its becoming active. Mr Venslovas made relevant observations though, about such a CFBL being activated after 1995 in that any fishing concession would then have been designated fishery specific. After 1995 fishing concessions in the NPF did not require a CFBL; (Tr. p.314). The Tribunal understands that it is Mr Venslovas' evidence that there was no automatic right to have a "latent effort CFBL" (which, prior to 1992 was required for the NPF), to be granted S/WTBF specific rights in 1995.
During further re-examination of Mr. Venslovas by Mr. Ritter, he stated that there were occasions where operators who applied to reactivate a licence were unsuccessful because they did not comply with the licensing or management policies in place at that time. For example, he cited the policy that provides no guarantee to the issue of a fishing permit after 1992, solely on the basis that the person held a CFBL.
Ms Lack's evidence is that since 30 December 1994 there was a "limited entry policy" operating in the S/WTBF– "Limited entry is a limit on the number of operators that can operate in a fishery. And that is usually implemented by way of the issue of a limited number of permits or licenses for a fishery." (Tr. p320) The following is the transcript where Mr Buss specifically questions Ms Lack about controls then existing on fishing and specifically in relation to the then "limited entry policy" for the S/WTBF:
Mr BUSS: Now, there are two main types of fisheries management measures that can be adopted, aren't there? One of them is input controls and the other one is output controls?---That's correct.
And input controls rely on restrictions on the inputs to fishing, is that correct?---Generally, yes.
And they would include such matters as the number of vessels. Would you agree with that?---Yes.
Also the type and amount of gear and fishing time?---Yes.
And the purpose of those restrictions is really to control the catch, isn't it?---Indirectly, yes.
Yes. The purpose of output controls is to limit the quantity of fish that may be caught through setting limits on the total allowable catch per vessel or per licence?---Yes
All right. Now, you mentioned I think, that at the moment the Southern and Western Tuna and Billfish Fisheries are managed through input controls?---That's right.
In particular through fishing permits?---Yes.
It's correct, isn't it, that a limited number of permits are issued annually and that's why you've referred to this [as] limited entry policy?---That's right.
The permits which are issued specify, don't they, the area of operation and the fishing methods that can be used?---They do.
And a single permit can provide for more than one fishing method?---Yes, they can.
An example of that would be the provision for one permit to permit or specify long-lining and minor line fishing?---Yes, it would.
Now, are there any additional controls which are imposed on operators in the fishery in order to limit the catch?--- There are some. For example, we are concerned about the bi-catch, we call it, of sea birds. Operators are required to use tory poles to minimise sea bird bi-catch when they're operating in certain areas.
All right. Are there any other controls you can think of?---There are some bi-catch limits on some species under our optional constitutional settlement with Western Australia.
So, are there limits, for example, in place in relation to the catch of big-eye and yellowfin tuna?---No, there are not.
What about in the case of per seine operators? Are there limits in the case of the catch of those species?---There are bi-catch limits in place on per seine operations generally targeting skipjack and their take of big-eye and yellowfin tuna is restricted. (Tr. p. 328 line 17 – p.329, line 23).
Ms. Lack, in response to a question put to her by Mr Ritter said that until a management plan is introduced into the S/WTBF the only instruments (controls on catch) that AFMA has in place are the fishing zone internal boundaries and the limited entry policies. The following is the transcript relating to this evidence:
Mr RITTER: And until that management plan comes into place is the 34 degree line an example of the management controls that exist at the moment?---It certainly is, it's one of the only two instruments that we have in place.
The other being?---Limited entry.
All right. Now you've mentioned, in passing again, I think, something of the history of AFMA's position on licence splits in this fishery from the period 1997 to 1999. Perhaps if you can just reiterate and summarise what changes there have been?---Certainly. There has been what we call a no licence splitting policy in place in relation to Commonwealth and State fisheries since mid 80s. There's always been the ability to allow licence splits where the relevant managers of the fishery, be they Commonwealth and/or State, agreed that the split in itself would not lead to increased effort in a fishery where there was concern about the level of effort. In relation to the Southern and Western Tuna and Billfish Fishery, it was agreed in November 1997 that a more relaxed application of the licence splitting policy should be applied in the Southern and Western Tuna and Billfish Fisheries. That was consistent at the time with our desire to encourage development of the fishery by a domestic fleet. That relaxation, if you like, of the policy meant that from then on within AFMA when an application to split a licence package that contained a Southern and Western Tuna and Billfish Permit was received the manager of the Southern and Western Tuna and Billfish Fishery would approve it from that fishery's perspective. Now, of course, if another manager, be it a State manager or a Commonwealth manager, rejected the application on the basis of the impact that the split would have on their relevant fishery, then the split did not proceed even though it had been given approval in relation to the Southern and Western Tuna and Billfish Fishery. And that policy was applied in relation to the fishery until, as I said, the Board [of AFMA] changed that policy in December 1999.
Why did it change the policy?---It changed the policy because it believed that we had provided sufficient encouragement for activation of effort through the licence splitting policy and other means, and again it was concerned not to further encourage the activation of effort in the fishery.
(Tr.p.326, line 29 – p.327, line 17)
Mr Buss submitted that for the respondent to now grant a FP to the (first) applicant would not have any material adverse effect on the respondent's policies or upon the S/WTBF. He submitted that there is not at present a plan of management for the S/WTBF pursuant to s17 of the FM Act 1991 and the fisheries are regulated by the limited entry policy and the line at S340. He submitted that because of the uniqueness of this application that to now issue a FP pursuant to the promise would have no precedential value. He further submitted that the precautionary principle has no relevance or at most an insignificant relevance. This obtains, he submitted, because there is no evidence of threats of serious or irreversible environmental damage in the S/WTBF. He submitted that the latent effort in the fisheries has existed for many years and has not affected the respondent's policies, at least till December 1999, of encouraging development in the fisheries.
Mr Buss submitted that the Tribunal should have no regard to the present circumstances of the applicants, except to acknowledge that they are "in the fishing industry for the long haul". That, he submitted, supports (the applicants') clearly stated intention of fishing in the S/WTBF given the FP which is the subject of this application.
Mr Buss submitted that for the respondent to now grant a FP to the (first) applicant would not materially affect the interests of other FP holders in the S/WTBF. He said that to do so would not create a situation where every other FP holder needed to be heard: see Gardner v Dairy Industry Authority of New South Wales [1977] 1 NSWLR 505 at 518-9, and R v Liverpool Corporation, ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299 at 308-9. He based this conclusion on the contention that in the present case there are unique circumstances and also the ample evidence of latent effort in the fisheries. He further submitted in this regard that currently the Indian Ocean yields some 1,200,000 tonnes of tuna and billfish annually. The applicants' evidence is that they would hope to yield up to 200 tonnes in total of all three species if granted the FP, that is, 0.0167% of the total estimated annual Indian Ocean catch.
Mr Buss submitted that the evidence (particularly Ex. A8) supports the conclusion that the respondent, at least until December 1999, encouraged the development of the S/WTBF. This he submitted, is a critical matter when taken in the context of the Tribunal's present task, to review the respondent's decision of 7 January 1999 not to grant the applied for FP (T20). Mr Buss supported this contention by reliance on the Federal Court decision (Davies J) in Freeman v Secretary, Department of Social Security (1988) 87 ALR 506. As the Tribunal understands this submission, it is that an application for the grant of a FP is analogous to an application for the grant of a social security pension. In that context it is only the conditions prevailing at the time of the original decision which is under review that should be considered by the decision maker. The submission, as understood, is that in those circumstances the decision maker cannot have regard to subsequent disqualifying events to disentitle an applicant for a pension when all the preconditions at the time of application are met. The difficulty which the Tribunal has with that submission is that in Freeman, the Federal Court was dealing with the cancellation of a widow's pension on the grounds that the applicant no longer qualified as a "widow" since she was, at the time of cancellation, living as a "wife in a bona fide domestic relationship although not legally married". The court upheld the decision under review notwithstanding evidence that subsequently, but before the primary merits review of the decision by the Administrative Appeals Tribunal, the applicant had ceased that disqualifying relationship and qualified as a "widow". In Freeman, his Honour said:
"In Jebb's case, I approved the general approach of the Administrative Appeals Tribunal '… to regard the administrative decision-making process as a continuum and to look upon the tribunal's function as a part of the continuum so that, within the limits of the reconsideration of the decision under review, the tribunal considers the applicant's entitlement from the date of application or other proper commencing date to the date of the tribunal's decision'.
However, the present appeal extends that principle beyond its scope. It does not follow from that principle that the tribunal in the present case was obliged to make a finding as to Mrs Freeman's entitlement to a widow's pension as at the date of the tribunal's decision or to make a decision as to cancellation of a pension on 19 May 1987 by reference to the facts as they stood as at the date of the tribunal's decision.
…
Regard must always be had to the nature of the decision which is under review. In Re Tiknaz, Re Easton, Jebb's case and McGourty's case, the decision under review was a decision refusing to grant a pension or benefit that had been applied for. In each case, it was held that there was jurisdiction to consider entitlement not only as from the date of the application but also entitlement up to the date of the tribunal's decision. This was because the function of the Administrative Appeals Tribunal formed part of an administrative continuum and, in reviewing a refusal to grant a pension or benefit that had been applied for, it was proper for the tribunal to consider the entitlement to the pension not only as at the date of the application for the pension or benefit or at the date of the decision refusing to grant it but also up to the time of the tribunal's decision." (pp.508-509)In the present case the Tribunal is dealing with an application for a FP pursuant to s32 of the FM Act 1991. In that respect, the Tribunal is part of the continuum of administrative decision making as Davies J put it in Freeman. To adopt the approach put to us by Mr Buss could well disadvantage as much as advantage different applicants in different circumstances – for example, the original decision may have been plainly correct at the time and if circumstances have changed since such that the reverse may now apply the cure is to make a fresh application. And another example – if the tribunal was to grant a permit when one was incorrectly denied by the original decision maker but in the interim, policies had eventuated which rendered that permit otiose, it would be an exercise in futility to grant the permit on the basis of previously prevailing conditions. In the present case of course, intervening policies, since January 1999 when the original decision was made, would not, in the Tribunal's opinion, render a subsequently granted FP otiose. However, to now grant the application would clearly be contrary to the presently prevailing policies of the respondent. In the context of reaching the preferable or correct decision in this matter, on the basis of Freeman and other cases cited, that factor is one of the relevant considerations to which the Tribunal, as part of the administrative continuum, must give proper weight in reaching its decision.
Mr Buss submitted that the power of the predecessor to the respondent, the AFS, to enter into an agreement to issue a fishing concession in future is not circumscribed by the provisions of s9B of the Fisheries Act 1952. He submitted that one cannot imply from s9B of the Fisheries Act 1952 that absent a similar provision relating to Australian boats, any such agreement would be ultra vires. Mr Buss canvassed the history of the 1981 amendments giving rise to s9B which granted the Minister, on behalf of the Commonwealth, power to enter into an agreement to grant a licence in respect of a foreign fishing boat. He explained that the amendment was introduced as part of a package to allow the Commonwealth to charge significantly higher fees to foreign fishing boats than to Australian boats. He explained that complementary amendments and Bills were necessary to comply with s55 of the Constitution which provides that laws imposing taxation (and presumably fishing licence fees) shall deal only with one subject of taxation. He submitted that s35 of the FM Act 1991 is consistent with those provisions.
Notwithstanding those submissions the Tribunal's powers in relation to reviewing decisions of the respondent not to grant a FP must be circumscribed by s32 of the FM Act 1991. That section provides for the grant of a FP subject to the conditions set out in subsection (5). Those are concurrent conditions and not prospective and indeed provide for the permit to cease to have effect or be cancelled given specified circumstances as provided in subparagraphs (5)(b), (c) and (d). Subsection (6) provides that a FP shall come into force on a day specified or if none then on the day it is granted. That provision is consistent with the scheme of the FM Act 1991, that the grant of a FP is a consequence of an application (made in the approved form) pursuant to the Regulations, as specified in s168(1) of the FM Act 1991. In the Tribunal's opinion the respondent may only grant FPs pursuant to s32. There is nothing in the FM Act 1991 or its regulations which empowers the respondent (and therefore the Tribunal) to grant a FP on the basis alone of a promise or agreement entered into at an earlier time than the date of the relevant application. In the opinion of the Tribunal, the decision to grant a FP pursuant to s32 is discretionary and must be made having regard to relevant policies authorised by s32 of the FM Act 1991.
Mr Buss submitted that the Commonwealth may contract upon any topic, regardless of whether the same result could have been achieved by legislation: see Hogg PW, Liability of the Crown, second edition, The Law Book Co, 1989 at p.166 which states:
The Crown's common law power to enter into contracts could, of course, be restricted by the terms of the Constitution. However, the Constitution of Canada does not change the general rule that the Crown in right of each government possesses the contractual power of a natural person. In particular, the Crown's power to contract is not restricted by the same limits as apply to the exercise of legislative power. A contract creates rights and obligations by virtue of the voluntary agreement of the parties. It does not unilaterally impose rights and obligations as a statute does. There is therefore no reason to confine the power to contract within the limits of the power to legislate, and the courts have not done so. The government of Canada, or the government of a province, may enter into contracts for purposes that it could not accomplish by legislation. The position in Australia is probably the same as in Canada, that is, the Commonwealth government or the government of a state may contract upon any topic, regardless of whether it could have accomplished the same result by legislation. In every jurisdiction, there are statutory provisions respecting procurement and other government contracts and it is a matter of interpretation whether any of them actually limit the power of the Crown to enter into contracts. .
Mr Buss submitted that the common law power of the Commonwealth to contract in the manner contemplated in this case is only circumscribed if restricted by statute, which, he submitted, is not the case in these proceedings.
Mr Buss submitted that the Voluntary Adjustment Scheme for the NPF was a commercial initiative of the Commonwealth in conformity with the then policies of the AFS. The Commonwealth empowered its agent with the responsibility of implementing the scheme and in doing so enter binding contracts to achieve that objective, which happened in this case. Mr Buss submitted that the agreement to issue a fishing concession of the type discussed, at the time of concluding the agreement pursuant to that scheme is consistent with it and within the commercial contracting powers of the Commonwealth. He submitted that in doing so the Minister or respondent is not precluding or fettering itself from exercising its statutory discretionary powers or from performing public duties by entering into incompatible contractual or other undertakings. He submitted that the promise is consistent with the objectives of the power and compatible with the power of the respondent to grant fishing permits. He submitted that to now issue a FP is not against the public interest and is compatible with notions of fairness and enhancing public confidence in government contracts and dealings. In this respect he cited the High Court decision in Ansett Transport Industries (supra), relying on the dissenting judgment of Mason J previously referred to in these reasons.
Mr Buss submitted that the agreement in question, entered into by the former AFS has not been frustrated as a result of the establishment of the respondent pursuant to the Fisheries Administration Act 1991. He submitted that the respondent is an agent of the Commonwealth and commenced acting in that capacity when the AFS terminated. It was not, he submitted, the termination of the contract (the agreement) but merely the emergence of a substitute party whose identity is the same – the Commonwealth.
Mr Buss submitted that the respondent is estopped from denying that it is obliged, under the representations, to issue the (first) applicant with a FP. The representation, he submitted, was promissory in character and related to operational as distinct from policy matters. In the alternative, he submitted that the respondent is estopped from denying its obligation to issue the FP as to do so would occasion greater harm to the public interest than any detriment to the public interest arising from the narrowing of the exercise of the respondent's discretion: Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 18 and 20. In further support of this submission Mr Buss referred to the following statement by Lord Denning in R v Liverpool Corporation, ex parte Taxi Fleet Owners [1972] QB 299 at 308:
"But that principle does not mean that a corporation can give an undertaking and break it as they please. So long as the performance of the undertaking is compatible with their public duty, they must honour it. And I should have thought that this undertaking was so compatible. At any rate they ought not to depart from it except after the most serious consideration and hearing what the other party has to say: and then only if they are satisfied that the overriding public interest requires it. The public interest may be better served by honouring their undertaking than by breaking it. This is such a case. It is better to hold the corporation to their undertaking than to allow them to break it. Just as it was (cites two cases in support)."
Conclusion
This matter has come to the Tribunal pursuant to s165(7) of the FM Act 1991, for review of the decision of a delegate of the respondent, pursuant to s165 of that Act, not to grant a FP to the (first) applicant. In the Tribunal's opinion, but for the promise referred to above and encapsulated in the evidence generally and in particular at T3 and T4, no FP to catch the three species in question in the S/WTBF, would be granted. This obtains because of the respondent's then policy of limited entry to those fisheries, policies forming part of the decision-making matrix established by sections 32 and 3 of the FM Act 1991.
Therefore, the question before the Tribunal is whether the preferred or correct decision is now to grant the FP. In the opinion of the Tribunal that decision cannot be made, in keeping with the duties and responsibilities of the respondent (as provided by legislation) without due regard to the following factors:
The rights of the applicants, if any, stemming from the promise.
Whether those rights include a right to be granted a FP.
Whether the respondent is estopped from denying its obligation (if any) to grant the FP.
Whether the applicants have a legitimate expectation that the (first) applicant has a right to be granted a FP.
Whether the grant of a FP now, to the (first) applicant would be contrary to the public interest or affect the rights of others not party to this application.
These matters will now be dealt with, by reference to the evidence, the findings of fact (supra) and the submissions of parties.
The rights of the applicants, if any, stemming from the promise.The Tribunal has found, as fact, that there was an agreement between the first applicant and the AFS, the predecessor to the respondent, that that applicant be permitted to retain the right to one unrestricted CFBL. That agreement was negotiated over a period, between late 1988 and 30 June 1989. The agreement was a unique arrangement at the time. At the time there was in place a "freeze" on the granting of new CFBLs, which restriction embraced the S/WTBF and other fisheries. At that time "licence splitting" was still possible. At the time CFBLs could be held "in abeyance" but only for up to two years whereupon they would be reactivated by consent of the AFS or otherwise be cancelled.
In the Tribunal's opinion the promise or agreement at the time was intended by the AFS to be limited to the retention of an unrestricted CFBL which might be subject to the abeyance policy if not then otherwise active. In the opinion of the Tribunal the evidence supports the conclusion that it was intended by the AFS that once the NPF units were sold any remaining CFBL (which was required for operations in the NPF at the time) would go into abeyance and be subject to that policy. It was further intended by the respondent that the first applicant or possibly the second could activate that CFBL to fish for tuna in the S/WTBF, but subject to the then "licence in abeyance" policy.
Those, in the opinion of the Tribunal, were the inherent rights of the applicants arising from the promise or agreement and the contractual obligations of the AFS. These obligations of the AFS were compatible with the then policies of the AFS and also not contrary to the then powers of the AFS as evidenced by its then licence freeze and licence in abeyance policies.
Whether those rights include a right to be granted a FPIn the opinion of the Tribunal it is not an issue as to whether pursuant to the promise discussed above a CFBL or a substitute concession is retained and activated. FP granted pursuant to s32 of the FM Act 1991 are granted subject to conditions. That section provides sufficient proscribed discretion to the respondent to ensure that any FP granted conforms with policies at the time including any management plan pursuant to s17 of that Act. So, other concerns aside, it matters not whether a CFBL could have been granted if the grant of a FP achieved the same intent. However, CFBLs continued to be renewed until 1995 for various reasons discussed. That is well beyond the licence in abeyance period that might reasonably have applied to the applicants in relation to any rights established under the agreement as discussed. In the opinion of the Tribunal the applicants' rights did not extend, in the circumstances, to the grant of a FP on the basis of the promise or agreement alone. If the applicants are to succeed in this matter then it must be for other reasons.
Whether the respondent is estopped from denying its obligation (if any) to grant the FP and whether the applicants had a legitimate expectation that a FP ought to be granted upon applicationThe applicants have relied on an ameliorating principle, that of estoppel to support their submission that the respondent cannot now resile from granting a FP. They submitted that the conduct of the respondent (and its predecessor, the AFS) since the promise or agreement gives rise to an estoppel. The applicants submitted that at no time did the respondent advise them that the promise would not be honoured. The Tribunal understands that complementary to this submission is the submission that the applicants had a legitimate expectation to be granted a CFBL, and therefore, a FP. This legitimate expectation arose from the promise, a promise never resiled from by the respondents notwithstanding a change of agency, new policies and new legislation.
However, the respondent says that the applicants cannot, as a matter of fact in this case, or as a matter of law, rely on the respondent's failure to communicate its reservations about the applicants' rights arising from the agreement. It says that the applicants were put on notice of all the critical intervening events, including the enactment of the FM Act 1991 and its consequences for fishing concessions, the licence freeze in the S/WTBF and the policy stopping licence splitting. The evidence before the Tribunal supports this contention. In Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 208 Gummow J relevantly said:
"As a starting point, I should note that the present case is not one where a party asserts that the executive or other public authority is estopped from asserting that a particular action, of which the other party seeks performance, would be ultra vires as exceeding the powers given by or pursuant to a law of the Parliament. Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying."
In Re: Secretary, Department of Social Security and Plug, AAT Case W1998/404, August 2000, the Tribunal, presided over by the President, said:
"The courts consider that powers and obligations given to the executive under statute is limited to the extent of the power given. To decide otherwise would allow an extension of power and responsibility by the action of those whose duty it is to exercise the power. The general principles of estoppel must be, in public law, limited by the ultra vires doctrine (see Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98 at 105-7 per Davies and Branson JJ) and if the effect of creating an estoppel would contradict a statute and extend the duty and authority of a decision maker it will not operate.
In this case the applicants argue that the respondent is now prevented by the doctrine of estoppel from relying on an argument that legislative and policy changes in the interim prevent the grant of the FP pursuant to that promise. This, they argue, obtains because the respondent made a previous commitment in circumstances where that was the result of protracted negotiations at the time and crucial to the actual commercial agreement then reached. However, if only for the effluxion of time, some ten years since the promise, the Tribunal cannot accept that argument because its effect would be to grant a FP contrary to policy existing at this time and therefore ultra vires the statute. Further reasons are that to adopt the doctrine of estoppel in favour of the applicants would require action by the respondent beyond its powers as circumscribed by the FM Act 1991 and the matrix of the policies pursuant to that Act.
In the opinion of the Tribunal the applicants did not have, in 1999 at least, a legitimate expectation to be issued with (or granted) a FP. Whist the applicants may have had a legitimate expectation to retain an unrestricted CFBL in 1989, pursuant to the licence in abeyance policy, that expectation did not survive (see findings of fact (supra)). It is well established that Commonwealth decision-makers must make decisions consistent with legitimate expectations unless the person adversely affected has been given adequate notice of reasons for not proceeding in that way: (see Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273 at 291-292, Mason CJ and Deane J). The Tribunal has found as fact that the applicants through their "corporate minds" the Boschettis, especially that of Mr Boschetti, had a reasonable if not legitimate expectation that the applicants were entitled to be granted a fishing concession in the future to fish in the S/WTBF for tuna, except Southern Bluefin. However, for reasons expressed above and based on the evidence and findings of fact, in the Tribunal's opinion, that expectation ceased to have legitimacy well before the first applicant made its application pursuant to s32 of the FM Act 1991 which gave rise to these proceedings.
The Tribunal is also influenced by its previous finding of fact in relation to the alleged detriment suffered by the applicants as a result of entering into the agreement in question. In the opinion of the Tribunal even if there was a detriment suffered, for the reasons already expressed, it could not be as a result of having sold the NPF units. Any alleged detriment, in the Tribunal's opinion, is not something to which it should have regard in reaching its decision in this matter.
Whether the grant of a FP now, to the (first) applicant would be contrary to the public interest or affect the rights of others not party to this applicationIn the opinion of the Tribunal, if this application was confined to different facts, that is, the promise had been made more recently in the light of present policy and notwithstanding that the promise in question was counter to existing policy, then, in those circumstances the Tribunal would have considerable sympathy with the application. For, in the opinion of the Tribunal, it would undermine public confidence in government if it resiled from honouring any such unambiguous promise. The only other consideration would be to take account of the possible undermining of the public interest should government be seen to grant a favour not otherwise available to the public at large. But that would necessarily be weighed against the circumstances giving rise to the promise. Given a background of independent, reasonable and honest dealings the Tribunal would clearly be confronted with a dilemma. However, in the present case, where in the opinion of the Tribunal all relevant dealings were independent, reasonable and honest, the Tribunal is of the opinion that no such dilemma exists. In the opinion of the Tribunal there is no legal obligation for the respondent to grant the FP sought. To do so would be contrary to existing policy and indeed contrary to policy in place since 1994 when the licence freeze in the S/WTBF commenced. At best there may be a case for a moral obligation to grant the FP, but that, in the Tribunal's opinion is not something on which it can decide in the absence of compelling other supporting reasons.
On the other hand, in the opinion of the Tribunal, the evidence before it does not support a conclusion that to grant one further FP as sought would offend against the "precautionary principle" since there is not before the Tribunal sufficient scientific evidence of a serious threat to ecological sustainability of the three species in question using the long-line method as proposed by the applicants. The evidence is that there is significant "latent effort" in both the STBF and the WTBF. The evidence is that the respondent is not concerned that that latent effort is likely to be activated before it brings down its management plan pursuant to s17 of the FM Act 1991, a plan likely to eventuate in 2001. The evidence is that the respondent is satisfied on the information available to it, that its present management measures of limited entry, restriction on by-catch and the demarcation line at S340 are effective and that there is no present ESD risk in the S/WTBF from long-line fishing.
The Tribunal heard little evidence as to whether the interests of other fishing operators would be affected should the applicants be granted a FP. That class of person would include those currently operating in the S/WTBF, those with latent effort FP for those fisheries and those who might otherwise apply for a FP if these were unrestricted in number. The Tribunal heard evidence that currently a FP in those fisheries has a market value from $400,000 with access only to the STBF, to around $600,000 or thereabouts for access to both S/WTBF. So clearly, there is a demand and supply situation supporting that value. In any economically determined commercial market, such as for FPs, any increase in supply will affect the price. But there is no evidence as to how the market value would be affected by the grant of one additional permit. The Tribunal heard evidence that currently there are 51 long-line permits with access to the WTBF and 83 long-line permits with access to the STBF. Of those, 44 are confined to the STBF. So whilst it is likely that the grant of a further FP with access to both would impact adversely on the existing market value (ceteris parabis), the Tribunal is not able to draw any conclusion other than that. The measure of the adverse effect on current FP licence holders of a fresh FP cannot be meaningfully quantified on the evidence before the Tribunal.
On balance, the Tribunal concludes that to now grant the FP, the subject of this application would not have any significant effect on the interests of other FP holders generally, other interested persons (who have not been identified) or the public generally. Because of the uniqueness of the surrounding circumstances of this application which has led to this review, it is reasonable to conclude that no precedent would be set by granting such a FP. Notwithstanding, after having heard the evidence and submissions and having given them the most serious consideration (see Lord Denning in Liverpool, supra), the Tribunal is of the opinion that this is an instance
where the public interest would not be served, nor confidence in consistent application of established government policy upheld, by departing from the practice and policy of the respondent and granting a FP contrary to those policies.Finally, in the opinion of the Tribunal the evidence is that the application is too late. The Tribunal cannot simply ignore the relevant intervening events between 1989 and 1999, referred to above. In the Tribunal's opinion, as mentioned, if the applicants had a contractual right to be granted a CFBL in 1989, then by their very inaction and passive reliance on what they understood to be their rights in the interim, that right has been jeopardised by supervening events which run to the very core of the right in question and of which the applicants were fully apprised. In the opinion of the Tribunal, even acknowledging the previously mentioned conclusions about ESD in the S/WTBF, and having regard to all the evidence and the above reasons, the correct or preferred decision in this matter is to affirm the decision of the respondent under review.
I certify that the 177 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President T E Barnett; Mr R D Fayle, Senior Member and Dr E Christie, Member
Signed:
................................(sgd S Railton).................................
AssociateDates of Hearing 1-5 May 2000 and 30 June 2000
Date of Decision 22 November 2000
Counsel for the Applicant Mr Buss
Solicitor for the Applicant Messrs Cocks MacNish
Counsel for the Respondent Mr Ritter
Solicitor for the Respondent Ms Ciffolilli
- AGLC
- Latitude Fisheries Pty Ltd and Anor and Australian Fisheries Management Authority [2000] AATA 1025
- Case
- [2000] AATA 1025
- Decision Date
CaseChat Overview and Summary
The court found that no binding agreement existed between the applicants and AFMA based on the sale of NPF permits. The court noted that the Fisheries Management Act 1991 and related policies did not create an enforceable contract or agreement. The court further examined the Commonwealth's contracting powers, finding that the statutory framework did not support the applicants' claim for a binding agreement. Regarding the precautionary principle and ecologically sustainable development, the court held that while these principles are important, they did not override the statutory authority of AFMA to grant or refuse permits. The court also dismissed the applicants' claims of estoppel, frustration, and legitimate expectation, finding insufficient evidence to support these arguments.
The court concluded that AFMA acted within its statutory powers in refusing to grant the applicants a tuna fishing permit. The decision was based on the statutory framework and the precautionary principle, which did not require AFMA to grant the permit despite the applicants' financial claims. The court's reasoning centred on the statutory authority of AFMA and the lack of a binding agreement or enforceable contract between the parties.
Orders
Orders of the court
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Background
Background to the litigation
Evidence
Evidence Before The Court
Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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