McEachern and Ors v Minister for Energy and Resources, and Ports

[2001] VSC 506

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 8162 of 2001

EOIN MALCOLM McEACHERN, DONELE McEACHERN AND MICHAEL ROBERT PARSONS	Plaintiffs
v.
THE HONOURABLE CANDY BROAD (IN HER CAPACITY AS MINISTER FOR ENERGY AND RESOURCES, AND PORTS) AND THE STATE OF VICTORIA	Defendants

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JUDGE:	PAGONE, J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	10, 11, 12 DECEMBER 2001
DATE OF JUDGMENT:	20 DECEMBER 2001
CASE MAY BE CITED AS:	McEACHERN v. MINISTER FOR ENERGY & RESOURES, AND PORTS
MEDIUM NEUTRAL CITATION:	[2001] VSC 506

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CATCHWORDS:      Duty to consult and to consider - Relevant considerations - Distinction between legislative and executive powers - Power to revoke and to amend - Statutory construction, Fisheries Act, ss. 64, 64A, 64B - Words and phrases: "value", "quantity".

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms. D. Mortimer	Fitzpatrick Teale
For the Defendants	Mr. W.F. Lally QC and Mr. A.J. McClelland	Victorian Government Solicitor

HIS HONOUR:

1. The plaintiffs challenge the validity of four orders made by the Minister for Energy and Resources, and Ports, on 1 November 2001 (gazetted on 5 November 2001) and made under ss.64 and 64A of the Fisheries Act 1995. Two of those orders (one under each of ss.64 and 64A respectively) are for the eastern zone of the Victorian rock lobster fishery and two (also one each made under ss.64 and 64A) are for the western zone of the Victorian rock lobster fishery. The orders are said to be invalid because (a) they were not made in compliance with the terms of s.64B, (b) they were made by the Minister having taken into account irrelevant considerations or by the Minister having failed to take into account relevant considerations, and (c) are otherwise invalid on their terms.

A. Duty to Consult and Consider: s.64B

1. Orders under ss.64 and 64A may not be made by the Minister unless s.64B has been complied with. That section provides:

"64B.   General quota order provisions

(1)The Minister must not make, revoke or amend an order under section 64 or 64A unless he or she has consulted with the commercial peak body and any other relevant consultative bodies and has considered any comments made by those bodies concerning the proposed recommendation."

There is thus created an express derogation from the statutory powers granted to the Minister in ss.64 and 64A. The exercise of the powers granted by those sections are restricted by the imposition upon the Minister of duties (a) to consult with the commercial peak body and any other relevant consultative bodies, and (b) to consider any comments made by these bodies. The plaintiffs allege that these duties to consult and to consider have not been discharged by the Minister before making the orders in November.

1. The legislative terms of s.64B bear the marks of some ill-fitting legislative amendment. Its immediate predecessor may be found in s.64(5) of the 1997 terms of the Act which provided:

"The Minister must not recommend the making, revocation or amendment of a notice unless she or he has consulted with the commercial peak body and any other relevant consultative bodies and has considered any comments made by those bodies concerning the proposed recommendation."

The duties of consultation and consideration attached then (as now) to matters described as those "concerning the proposed recommendation".  In the 1997 terms "the proposed recommendation" was clearly enough that contemplated at the commencement of the section and which the Minister recommended to the Governor in Council.  Under the 1997 terms of the provisions, it was the Governor in Council (and not the Minister) which made the orders.  Under those provisions the role of the Minister was to recommend the order for the Governor in Council to make. 

1. The current terms of the provisions are to the effect that it is the Minister who makes the orders, but the obligations to consult and consider in s.64B (taken from, and replacing, s.64(5)) are still expressed (no longer aptly) by reference to a proposed recommendation. This language is inapt because the Minister no longer recommends a proposal to the Governor in Council. It was common ground, and in my view it is plainly the case, that what is contemplated by the current terms of s.64B is that it is the Minister's proposed order (whether to be made, revoked or amended) that the section contemplates as being the subject of consultation and consideration. In other words that the proposed recommendation now contemplated is the proposal which the Minister may adopt and make as an order. That view is in conformity with the objective of the provision, makes sense of the provision, and gives effect to its terms. It is also in conformity with the legislative history (as evident in the predecessor provisions in 1997) and with comparable provisions in the current Act (for example, s.62).

1. Statutory duties upon Ministers to consult and to consider are not mere formalities.  In this legislation they are imposed as pre-conditions to the exercise of certain statutory powers which are otherwise expressly denied to the Minister.  The content of such duties will vary according to the legislative context in which they are found and according to the factual circumstances in which they are to be discharged.  In this case the legislative context is such that the content of the duties is large.  The powers which may be exercised after consultation and consideration, but which may not be exercised without prior consultation and consideration, affect livelihoods and the commercial operation of large numbers of persons engaged in, or affected by, an industry.  The powers given to the Minister contemplate the making of orders after the Minister has had the benefit of being informed about their impact and consequences.  That can best occur if those consulted have, in turn, a full and meaningful appreciation of what changes are in contemplation.[1]  In this case there has been on any view some consultation and consideration.  However, the plaintiffs contend that there are three critical aspects of the orders about which there was not. 

   [1]See Rollo v. Minister of Town Planning [1948] 1 All ER 13 at 17; Leichardt Municipal Council v. Minister for Planning (1992) 78 LGERA 306 at 336-8; Port Louis Corporation v. Attorney-General of Mauritius [1965] AC 1111 at 1116, 1121, 1124

1. The first of those complaints concerns a change in the terms of paragraph 2 of the initial order made under s.64(1) between 10 May 2001 and 1 November 2001. On the earlier of those dates, the Minister had made corresponding orders to those which she made in November. The May orders were revoked on 1 November 2001 as a first step in the making of the new orders on that day. A reason for the revocation was that paragraph 2 of the initial quota orders made under s.64(1)(b) in May did not set out a "method" as required by that provision. The plaintiffs contend that the change effected by this clause, however, had another function, namely, to implement the defendants' "policy position that future increases to the TAC could be auctioned off rather than allocated to all existing licence holders".[2]  This change, it was said, was not the subject of consultation and consideration. 

   [2]Refer to second amended statement of claim, para. 42, particular (i).

1. The facts do not, in my view, sufficiently support the plaintiffs' contentions in relation to this claim.  The changes to paragraph 2 of the quota order in November (that is, the change between paragraph 2 of the May order and that in November) does not implement a government policy of the kind alleged.  Indeed it is clear that no policy had yet been finalised and, in any event, the consultations and considerations which occurred expressly touched upon the topic complained about.

1. The second failure to consult and consider which is alleged against the defendants concerns the reallocation of relinquished quota under a buy back scheme. The buy back scheme in question, and the context in which it may be applied, have potentially significant negative impact upon those in the industry. The material does indicate a change in the approach preferred by government at the end of August 2001 and the method adopted does differ as between the eastern zone and the western zone. Whatever its impact, and whatever the reasons for treating the two zones differently, it was contended for the defendants that the buy back scheme could not form part of an order under s.64 or 64A, that it did not form part of the orders made in November and that, in any event, there had been consultation and consideration about the matters.

1. I doubt the correctness of the defendants' submission that a buy back scheme could not form part of an order under s.64 or s.64A. In my view it would be too narrow a construction of the terms of those sections to exclude from their contemplation a buy back scheme intended to form part of a method for setting the number of individual quota units for the quota fishery or the method for calculating individual quotas to each access licence issued in respect of the quota fishery. However, I accept that the buy back scheme in question approved by the Minister at the end of August 2001 was not part of the orders made in November. I also accept that the buy back scheme was part of the general discussions between the Government and the industry prior to the making of the orders in November.

1. The third, failure to consult and consider which is alleged against the defendants, concerns an amendment to the terms of paragraph 2 of the orders by the substitution of the words "the value of an individual quota unit" for the words "quantity of rock lobsters comprising an individual quota unit".  There is no doubt that this change occurred.  However, evidence was given by a Mr Green to the effect that this change was made by him as what he described as an editorial change made for consistency with previous orders that the Department had prepared for quota orders for the scallop and abalone fisheries.  It was certainly Mr. Green's view and intention that the change made was not and did not affect the meaning or effect of the order.  The decision to make the change was purely his and gave no effect to any government or ministerial policy to change the meaning of the draft order which had been made available to the industry for consultation.

1. The substitution of a concept of "value" for that of "quantity" made by Mr. Green appears to have proceeded from an understanding that the word "value" was similar to “quantity”.  The word "value" can mean "the magnitude of a quantity or measurement", although it is not the first meaning found in the dictionaries to which I was referred, and was not the meaning of the word which commended itself to me as its usual or ordinary meaning.  If I was called upon to construe the meaning of the word "value" in the abstract, I would find against the defendants.  However, the word "value" appears in cl. 2 of the initial quota and its meaning must be judged in that context.  In that context the word "value" is being used as an integer for the calculation of the number of individual quota units.  In that context the use of the word "value" is being used in the sense of "quantity" rather than in the sense in which I might ordinarily have understood the term.  In any event, the use of the word "value" as being somehow synonymous with "quantity" is evident from the statutory meaning of "individual quota unit", which is defined in s.4 as meaning a "quantity" of a species of fish (by number, volume, weight or value).  In other words, the idea that the "value" of a species of fish is a means of determining its "quantity" is found explicitly in the terms of the Act itself.  I conclude, therefore, that the proper construction of the word "value" as found in the order is in the sense of "quantity".  For that purpose I do not need to rely upon the evidence of Mr. Green concerning his intention when using the word.  His evidence, however, is of assistance in rebutting a contention that any properly construed change in meaning was an intentional addition to subject matter that required consultation and consideration.  It may be (although it is strictly irrelevant to the meaning to be given to the order) that the desire for consistency referred to by Mr. Green was in part motivated by a desire to determine quantity by reference to the integer of weight as expressly contemplated by the definition of "individual quota unit" found in s.4.  It follows that, in my opinion, this claim of failure to consult and consider must also fail.

1. The material available to me established that the Minister has relevantly consulted for the purposes of s.64B. On 12 September 2001 the Minister wrote to the relevant bodies required to be consulted, informing them of the proposal to revoke the orders and to issue new orders. Explanation was given about the reasons and about the extent of variation between the orders made in November and those which had been made in May. The letter was accompanied by a copy of the proposed orders which was almost identical, and in substance was the same, as those made in November. There then followed correspondence and meetings between the relevant persons which amounts to consultation and to a consideration of such responses as were made. The consultation and consideration was by the Minister personally both in fact and in law. That some was undertaken by the Minister through authorised officers and departments does not lessen the actual consultation undertaken by the Minister personally or lessen the actual consideration of the matters by the Minister when put to her directly by those with whom consultation is to occur or indirectly to her by them through her Department. In any event, the consultation and consideration by the Minister may in this context be through the duly authorised officers of her department.[3] 

   [3]Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1986) 162 CLR 24 at 38, O'Reilly v. State Bank of Victoria Commissioners (1983) 153 CLR 1 at 11.

B.       Consideration Argument

1. The next category of challenge to the orders was on the basis that the Minister had taken into account irrelevant considerations or had failed to take into account relevant considerations. Counsel for the plaintiffs correctly conceded that this argument relied upon the Minister's powers under ss.64 and 64A being administrative rather than legislative in character. In my view they are legislative in character and, therefore, the challenge cannot succeed.

1. The distinction between that which is legislative and that which is executive in character is often easy to state and often difficult to apply.  In Commonwealth v. Grunseit[4] Latham, C.J. said:

"The general distinction between legislation and the execution of legislation is that legislation determines the content of a law as a rule of conduct, or a declaration as to power, right or duty, whereas executive authority applies the law in particular cases."[5]

In Bienke v. Minister for Primary Industries and Energy[6] Gummow, J. considered that a management plan for the northern prawn fishery was legislative in character rather than being a decision of an administrative character. These cases, and the many others touching upon the distinction, provide helpful guidance, but ultimately do not decide the nature of the powers with which I am concerned. In my view the provisions with which I am concerned are legislative in character because they contemplate the making of an order by a Minister laying down a rule of conduct or a right in respect of the categories referred to in ss.64 and 64A. The rights of, and obligation on, those governed by the orders made under those sections do not exist independently of the making of the order. The orders are not the application of some right or rule of conduct that may be found to exist prior to the order having been made.

[4](1943) 67 CLR 58

[5]ibid 82

[6](1994) 125 ALR 151 (upheld by the Full Court at (1995) 63 FCR 567)

1. If, however, I am wrong in this conclusion, it would then be necessary to consider whether the failure alleged by the plaintiffs had been made out. The failure alleged is that the Minister did not have regard, or adequate regard, to the matters relevant to objective 3(e) to the Fisheries Act 1995. That objective is "to promote the welfare of persons engaged in the commercial fishing industry and to facilitate the rationalisation and restructuring of the industry". Counsel for the defendants was not able to point to a specific consideration of matters that "promoted the welfare of persons engaged in the commercial fishing industry" in question. He pointed, however, to the generality of the invitations for consultation which had been made by the Minister and her Department. He also pointed to some of the material sought by the Minister or her Department which might to some extent illicit or bear upon the promotion of the welfare of persons engaged in the commercial fishing industry. The facts persuade me that the Minister had regard to all that was put to her and that she did not preclude from consultation and consideration the matters that might fall within s. 3(e). A person who complains about the failure of another to consider something bears some burden to show that the matters were pressed for consideration and not considered. The plaintiffs have not been able to show that they pressed matters relevant to the objectives in s. 3(e) which the Minister failed to take into account. The approach taken by the plaintiffs to the consultation process was to seek information from the Minister before making full responses. That approach may have been justified, but carries with it the risk that they failed to put to the Minister material that they say now should always have been considered. They cannot complain if the Minister does not take into account something which the plaintiffs say should have been taken into account on what was known and which they did not press.

C.       Invalidity of the Orders

1. Different grounds for invalidity were advanced on behalf of the plaintiffs based upon the construction of the orders and of the operative section. The first ground for invalidity was said to be that the orders made in November were beyond power because there was no power in s.64 to revoke and make new orders in respect of the same fishery. In support of that contention it was said that it was necessary to imply a limit on the power to revoke and to re-make orders so as to give effect to restrictions found in s.64(3). That provision limits the Minister's powers to make amendments in certain circumstances. The limitations evident in that provision may be to no effect if the Minister's powers of revocation and remaking are construed without restriction.

1. The scheme created by s.64 is one which is designed not to permit changes easily. The Minister may make orders under s.64 which, if they include a declaration under s. 64(1)(d)(i), are designed to have a substantial measure of permanency. That is because that sub-section permits the Minister to declare that individual quota units in the quota fishery may be transferred permanently. Such a declaration is calculated to ensure a substantial measure of certainty and permanence in the orders made by the Minister. Where such a declaration has been made (as was the case with the orders made in May as well as those in November) the Minister's power of amendment in respect of the declaration made under that section, as well as anything under s. 64(1)(a), (b) or (c), may only be amended in the narrow circumstances contemplated in s.64(3). Not only is the amendment narrow, but notwithstanding its narrowness the amendments which may be made (even to correct errors arising from an accidental slip) appears on its face (and I construe the legislation to have the effect) to be subject to the requirement in s.64B of consultation and consideration. In other words, even a minor amendment to correct an accidental slip must go through the process of consultation contemplated by s.64B. All this adds to the sense of permanence and rigidity that was intended once an order was made by the Minister that included a declaration under s.64(1)(d)(i).

1. Section 64(1) expressly provides powers to make, revoke and amend quota orders. Such powers do not, therefore, depend upon provisions such as s.41A of the Interpretation of Legislation Act 1984. Section 64(2) of the Fisheries Act 1995 expressly confers upon the Minister a power to "revoke or amend" an order "at any time". It is only the power of amendment which is expressly narrowed by the next section. There is no doubt, however, that the legislation permits the Minister to revoke the whole of an order at any time. What is less clear is whether the Minister may re-exercise the power to make orders in s.64(1) after an order has been revoked. It was submitted for the Minister that the limitation upon the power of amendment could have no application in circumstances where what needed to be changed was not capable of change by amendment. In this case, the change needed was to correct a defect in the May orders in that that they had not determined the method for setting the number of quota units for a fishery as s.64(1)(b) requires. It was said, therefore, that an alteration of this kind could not be the subject of amendment under s.64B, and that the restriction imposed by that section could have no operation where what was sought to be done could not be done through the power of amendment. I do not accept the basis upon which the argument proceeds, but a difficulty with the argument is that its acceptance would result in the limitations to the power of amendment being pointless. Nor does the view advanced accommodate what appears to me to be the evident objective of the provisions, namely, to give permanence to the orders made under s.64(1) and to make alterations to it difficult. An additional consideration in support of that conclusion is to be seen from the way in which the provisions formerly found in s.64 of the Act as at 1997 have been divided and re-enacted through ss.64 and 64A. The scheme now provided for divides the orders in two parts: the Minister may make orders under s.64 which are intended to have an ongoing operation whilst orders made under s.64A operate only for a specified period. It is not surprising to find in such a scheme that the orders intended to operate indefinitely would have a substantial measure of permanence. The amendments permitted by s.64(3) are, of course, not only for what might be described as errors or slips. On the contrary, the amendments permitted by s.64(3)(a) are broadly "to give effect to the management plan for the quota fishery declared under s.28, or to any change to that plan".

1. It follows, in my view, that the Minister has a power of general revocation in s.64(2) which may be exercised "at any time" but which may not be exercised as a mere step in a remaking or refashioning of the orders made under s.64(1). The Minister has a powerful tool unilaterally to bring to an end a scheme created by orders made under s.64(1). What the Minister may not do, however, is to use that power together with the powers in s.64(1) to bring about an amendment to those orders. The same does not hold true in relation to the further quota orders made under s.64A because the power of amendment in s.64A(2) is unrestricted.

1. The conclusions about the construction of the provisions do not depend upon what was said in the explanatory memorandum when the current provisions were enacted by s.9 of the Fisheries (Amendment) Act 2000. If, however, it be a matter where ambiguity may be seen from the provisions, recourse to the explanatory memorandum does support the construction which I have adopted. In the explanation to s.9 of the amending Act, it was said:

"If permanent transfer of quota is allowed, the Minister cannot vary the zones or method of setting or allocating quota unless the variation gives effect to a management plan or to a change to a management plan or if there is an error in the order."

It is clear that the restrictions to variations would only arise if permanent transfer of quota was allowed.  That is not surprising since the effect of allowing the permanent transfer of quota is to create important and valuable property rights that should not be interfered with easily.  That precondition having been satisfied, however, the effect of the restrictions on amendments must be given effect. 

1. The revocation in November of the May orders was, in my view, a step in the amendment of the May orders.  That can be seen from a comparison of the May orders with the November orders:  they bear substantial resemblance to each other and their variations can be detected easily.  The revocations occurred on the same day as the November orders were made.  The nature of the revocations as an essential element in the amendment of the orders intended to operate in the fisheries can be seen also from history and correspondence leading up to November 2001.  The May orders can be revoked and, if revoked, I have no doubt that new orders can be made, but I do not believe that the powers of “revocation and making” are available where what is being done is in substance the amendment of the May orders.  That, in my view, is what has occurred here and which the Minister may not do consistently with the limitation upon amendments.

1. The consequence for the orders in question in this case is that the two initial orders purported to be made under s.64(1) in November 2001 are invalid and of no effect. It also follows, however, that the revocations purportedly made on the same day are also of no effect. Those revocations were not formally challenged by the plaintiffs but counsel for both parties accepted in argument that a necessary consequence of my acceptance of the challenge to the orders based upon the limitation found to the power of amendment might be that the revocations purportedly made were equally invalid. That is, that the revocations were ineffective because they formed an integral part of an interrelated package of delegated legislation with the objective of amending the May orders contrary to the limitation found in s.64(3). A further consequence of this is that the orders which had been made in May have not effectively been revoked and continue to be in force.

1. It was submitted for the defendants that the defect with the orders made in May were not capable of amendment under s.64(3)(b). I do not agree. The defect with the orders were said to be that they had not determined the method for setting the number of quota units for a fishery as s.64(1)(b) required. This, in my view, is an error arising from an "omission" within the meaning of s.64(3)(b)(ii). In my view there is no obstacle to the Minister making the desired change to the May orders by amendment through the mechanism provided for by s.64(3) and 64B.

1. It is not necessary for me to consider the other grounds of invalidity urged by the plaintiffs, although it may be desirable if I express my views about them.  It was contended by the plaintiffs that the buy back scheme constituted an allocation of quota otherwise than in accordance with the initial quota orders and that this circumstance rendered the initial quota orders invalid.  I do not accept those contentions and adopt the submissions made for the defendants on this issue.  The next challenge was that the alteration in cl. 2 of the November orders by use of the word "value" rendered the orders invalid.  I have dealt with this construction argument when dealing with the contention that there had not been consultation and consideration in respect of this proposed change.  In my view the word "value" did not, as a matter of construction, alter the meaning of cl. 2.

D.       Orders

1. Accordingly I declare that each of the following orders made by the Minister and published in the Victorian Government Gazette of 5 November 2001 are invalid and of no effect:

(a)       Revocation of quota order for the Rock Lobster Fishery;

(b)      Initial quota order for the eastern zone of the Victorian Rock Lobster Fishery;

(c)       Further quota order for the eastern zone of the Victorian Rock Lobster Fishery;

(d)      Initial quota order for the western zone of the Victorian Rock Lobster Fishery;

(e)       Further quota order for the western zone of the Victorian Rock Lobster Fishery;

I will hear counsel on what orders should be made as to costs.

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