Perder Investments Pty Ltd v Elmer, M.A.V

[1991] FCA 272

Re: PERDER INVESTMENTS PTY. LTD.
And: MARK ALBERT VINCENT ELMER
No. Q G155 of 1990
FED No. 272
Administrative Law - Licences
(1991) 23 ALD 545

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Administrative Law - transfer of licence under statutory discretion - whether consideration of invalid prohibitory policy makes decision not to transfer bad - whether invalid policy given valid operation by misapplication.

Licences - whether grounds for transfer where licence not renewed.

Torres Strait Fisheries Act 1984, ss.19, 24, 25, 36, 38

HEARING

BRISBANE

#DATE 23:5:1991

Counsel for the applicant: Mr V.K. Copley QC and Mr D. O'Gorman

Solicitors for the applicant: Bottoms Davies Nash

Counsel for the respondent: Mr W.V. Vitali

Solicitors for the respondent: Australian Government Solicitor

ORDER

The application be dismissed.

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

JUDGE1

This is an application for an order of review under the Administrative Decisions (Judicial Review) Act 1977. The application was filed on 5 December 1990 and complains of a decision refusing to transfer a Torres Strait prawn fishery fishing boat licence issued under the Torres Strait Fisheries Act 1984 ("the Act") to the applicant. The application originally filed was replaced by an amended application filed on the day of hearing. As the licence in question expired some time ago, the proceedings appear to be of academic interest only. The respondent took no point about that and I have dealt with the case as argued. In the result, however, the status of the licence appears to me a sufficient answer to the application; that point is discussed below.

1. On 18 December 1978, Messrs Fraser and Peacock, on behalf of Australia, and Somare and Olewale, on behalf of Papua New Guinea, signed a treaty dealing with the fisheries resources and seabed mineral resources of the Torres Strait; the treaty was subsequently ratified by both nations. It fixed the seabed boundary between the two nations in the Strait (Article 4) and established a Protected Zone (Article 10) principally "to acknowledge and protect the traditional way of life and livelihood of the traditional inhabitants including their traditional fishing and free movement". Under Article 21, the Parties agreed to "co-operate in the conservation management and optimum utilisation of Protected Zone commercial fisheries". Under Article 23, the Parties agreed to share the allowable catch in the Protected Zone in accordance with detailed provisions set out in that Article. Article 26 required the Parties to consult and co-operate in the issue and endorsement of licences to permit commercial fishing in the Protected Zone commercial fisheries.

2. On 15 February 1985 the Act came into force and a Joint Authority was established under it to manage a number of fisheries in the Australian part of the Protected Zone. That consisted of the Commonwealth Minister for Primary Industry, Mr Kerin, and the Queensland Minister for Primary Industries, Mr Turner. Under s.19(2) of the Act, "the Minister" is empowered to grant a licence -
   

"... in respect of a boat authorizing the use of the boat for taking fish in the course of commercial fishing in areas of Australian jurisdiction and for carrying, or for processing and carrying, in areas of Australian jurisdiction, fish that have been taken with the use of the licensed boat".

1. That is such a licence as is in issue here and "the Minister" in the section means, under s.19A of the Acts Interpretation Act 1901, "the Minister for the time being administering the provision"; that was, at relevant times, Mr Kerin. Under s.25(1) of the Act:
   

"Subject to sub-section (2) and to any condition of a licence relating to the transfer of the licence, the Minister may, in his discretion, upon application being made in accordance with the appropriate form by the holder of a licence granted under section 19 in respect of a boat and by another person as proposed transferee, transfer the licence in respect of the boat to the other person".

1. The Protected Zone Joint Authority is given certain of the Minister's powers by s.36(2) of the Act, which reads as follows:
   

"In relation to a Protected Zone Joint Authority fishery that is to be managed in accordance with the law of the Commonwealth, the powers of the Minister under the provisions of Part IV are exercisable under those provisions by the Protected Zone Joint Authority as if references to the Minister in those provisions were references to the Protected Zone Joint Authority".

1. Part IV includes the provisions for grant and transfer of licence to which I have referred. In ss.19 and 25 respectively, the reference to a fishery "that is to be managed in accordance with the law of the Commonwealth" takes its meaning from s.31 which, to put it briefly, contemplates the making of arrangements between the Commonwealth and Queensland that the Authority is to have the management of a particular fishery in waters adjacent to Queensland. There is evidence (Exhibit 3) that an arrangement under this provision has been made in respect of part of the Protected Zone. It is not shown, in my opinion, that the licence here in question was issued only in respect of that part, but the case was conducted on the assumption that the licence was so limited and I am content to accept it.

2. The result is that the licence was able to be granted by the Authority under s.19(2) as if the Authority were the Minister and, similarly, the licence could be transferred under s.25 as if the Authority were the Minister. Further, under s.38, the Authority was given power to delegate any of its powers under the Act, with exceptions not relevant to this case; under s.38(4):
   

"A delegate of the Protected Zone Joint Authority is, in the exercise of his delegated powers, subject to the directions of the Protected Zone Joint Authority".

1. Here, relevant directions were given and they are discussed below. The respondent, Mr Elmer, was given a delegation under the relevant sections - i.e. 19(2) and 25, and other sections - dated 25 October 1989.

2. On 3 November 1988, the Authority issued a statement announcing, with respect to the Torres Strait prawn fishery, a "freeze on the transferability of licences". This was described in the statement as an "interim measure", but the statement said, in effect, that non-transferability of such licences on a long-term basis was being considered because there were too many prawn trawlers working in the Strait.

3. The evidence shows that a direction dated 16 December 1988 was given under s.38(4) of the Act, which is quoted above. There seems to be no copy of that direction in evidence, but it is quoted in part in reasons for judgment of Spender J. of 16 July 1990 referred to below. It appears that clause 2 of that direction reads as follows:
   

"Delegates shall not, pursuant to an application made on or after the relevant date under sub-section 25(1) of the Act, transfer a prawn licence to another person".

1. This direction was, as it seems to me, intended to give legal force to the policy which had been stated on 3 November 1988.

2. On 14 April 1989, there was issued the licence which is in question. It related to a boat called the "Dhikarr" and was stated to be valid until 2 December 1989. On 21 April 1989, the applicant agreed to buy from the then licensees (Colin Richard and Joy Olive Dwyer) certain property including the "Dhikarr" and licences associated with it, including the licence in issue here. The price was $320,000 and settlement was made conditional upon approval of the transfer of the licences (clause 11). That condition must have been waived, as to the subject licence, for the sale was settled although neither the Minister nor the Authority nor any delegate has acted to transfer the licence under s.25(1).

3. On 27 April 1989, the present applicant applied for transfer of the licence.

4. A few weeks later, viz. on 18 May 1989, the Authority made another joint statement which said that:
   

"Licences for prawn trawlers to fish in Australia's part of the Torres Strait Protected Zone will be non-transferable as a long term measure to reduce the number of boats in the fishery".

A later part of the statement of 18 May 1989 said:

"The prohibition on transfers will help to control the effort in the fishery and to prepare for the sharing of catch with PNG that is to come into operation during the five years beginning on 15 February 1990 ... The freeze provides that if the licence holder dies or leaves the industry for permanent incapacity, the licence may be transferred to either the spouse or a child of the licence holder. These exceptions to non-transferability will be reviewed after five years to assess whether they are inhibiting the effectiveness of the non-transferability policy".

1. On the face of it, the statement of 18 May 1989 appeared to be applicable to all future transfers, whether or not applied for before 18 May 1989. It will be noted that this statement of 18 May 1989 made an express exception to the general prohibition, that being for death or permanent incapacity.

2. On 1 August, a delegate of the Authority, one Lightowler, refused the application for transfer which was made on 27 April 1989. The decision advising of the refusal referred to the policy stated on 3 November 1988 and referred, implicitly, to the later statement of 18 May 1989.

3. On 11 August 1989, further directions were given by the Authority relating to the prawn fishery. These directions included a clause 6 reading as follows:
   "6. Transfer of Prawn Licence
   

6.1 Subject to paragraph 6.2, a delegate shall not, pursuant to an application made on or after the relevant date under subsection 25(1) of the Act, transfer a prawn licence to another person. 6.2 Until 1 January 1994 a delegate may, subject to paragraph 6.3, transfer to a spouse (or equivalent) or child of the original licensee a prawn licence on the death of the licensee or where the licensee is medicially (sic) certified to be permanently incapacitated and, on account of the permanent incapacity, where the licensee surrenders all his or her master fisherman's licences granted under a law of the Commonwealth or a State. 6.3 Until 1 January 1994 a delegate may, subject to paragraph 9.2, transfer a prawn licence issued to a company or partnership. 6.4 A delegate shall not transfer a prawn licence more than once".

1. It will be noted that the directions of 11 August 1989 referred to applications made "on or after the relevant date"; that was defined to be 3 November 1988. Since the application to transfer the subject licence was made on 27 April 1989, the directions of 11 August 1989 just referred to applied to it.

2. On 2 December 1989, the licence expired, but in the meantime, the disappointed applicant had filed an application to this Court, challenging the decision to refuse transfer. That application succeeded. On 16 July 1990, Spender J. ordered that the decision to refuse transfer be set aside and that the application be remitted to the Authority to be determined according to law.

3. The reasons given by Spender J. need not be quoted here, but should be read with these reasons. His Honour held the refusal to be bad on the ground that the direction of 16 December 1988 was invalid as being inconsistent with the statutory discretion to transfer. His Honour held, in effect, that the power to give directions to delegates under s.38(4) could not be exercised in such a way as to empower a delegate to do something which the Authority itself could not do; since the Authority could not apply a "policy of uncritical or blanket prohibition on transfer", nor could it direct a delegate to do so.

4. There was no challenge to the reasons of Spender J. The principle underlying the rule against replacement of a statutory discretion by a statutory prohibition is simply respect for Parliamentary sovereignty. Where Parliament says that in certain circumstances there is a discretion to grant permission, then no official may replace that law by one to the opposite effect - for example, by a law requiring that in no circumstances shall permission be granted. Both the statement of policy of 3 November 1988 and the direction of 16 December 1988 which, in relevant respects, implemented it, were read as laying down an absolute prohibition on transfer (as to the large category of licences they dealt with) and, in my opinion, correctly so read.

5. After the decision of Spender J., the applicant pressed for reconsideration of the question of transfer and on 2 November 1990, there was given the decision here complained of.

6. That decision was given by the respondent as delegate. The letter notifying it included the following passages:
   

"The non-transferability policy which was introduced by the P.Z.J.A. on 3 November, 1988 for an interim period has subsequently been confirmed by the P.Z.J.A. as the permanent policy for the Torres Strait Prawn Fishery.

Your application for special consideration to be exempted from the Torres Strait Prawn Fishery non-transferability policy for the boat 'Dhikarr' has been re-examined. I would advise that such application has been refused as it is not in accordance with the licensing policy for the Torres Strait Prawn Fishery, and the reasons provided by you were viewed as insufficient to warrant a variation to that policy".

1. It should be noted that, although the decision of 2 November 1990 was given after both sets of directions referred to above - i.e. those of 16 December 1988 and those of 11 August 1989 - it referred to neither. It referred expressly to the policy statement of 3 November 1988 and implicitly to that of 18 May 1989. The implicit reference is in the statement that the 1988 policy was confirmed as the permanent policy; that was done by the second policy statement.

2. On the same date, reasons for the decision were given. They referred in some detail to circumstances put forward by and on behalf of the applicant in favour of the transfer. They asserted that the direction dated 16 December 1988 had been ignored because of the reasons of Spender J.; they made no reference to the further directions of 11 August 1989 which were, as I pointed out, applicable in their terms to the subject application for transfer; however, it appears to me that one should take it that the directions of 11 August 1989 were also, supposedly, ignored.

3. The substance of the reasons is that the respondent has not applied the direction and has not blindly applied the policy, but has, taking all matters into account, "decided to adopt the Ministers' policy ...". A paragraph to which Mr Copley QC, who led Mr O'Gorman for the applicant, particularly referred read as follows:
   

"9. In considering this issue, the Delegate contends that the Ministers' policy is not a hard and fast rule of law but a policy informative of the standards and values which the Ministers usually apply".

1. Mr Copley asserted, and it seems to me correct, that this is not an accurate description of either policy.

2. In his oral evidence, the respondent used expressions which throw doubt upon the assertion in the written reasons of the decision that the directions of 16 December 1988 had been ignored. This is hardly surprising; in relevant respects, the statement of policy of 3 November 1988 said much the same as the directions of 16 December 1988 so that the task of having regard to the former and ignoring the latter would be a difficult one. An example of the difficulty of drawing the distinction is to be found in the respondent's evidence. When it was put to the respondent that no guidelines had been published "in relation to this policy", he remarked:
   

"The policy was enunciated on two occasions, the first by press statement and the second in the detailed directions to delegates".

1. The respondent also said in defending the content of paragraph 9 of his reasons quoted above:
   

"Okay. In the - first of all, it is a limited number of people, your Honour. There is a hundred and fifty people. Each and every person received a copy of the press release and also the directions that were applying at the time that explained that (sic) the strict application of the policy in detail".

1. It appears to me merely playing with words to say that the respondent ignored the directions which, in relevant respects, gave effect to the policy statements. Mr. Copley argued that the statements were bad for the same reasons as the directions were bad and that, being bad, they could not be applied. One starts from the premise which underlay the judgment of Spender J., namely that an absolute prohibition on transfer is inconsistent with the statutory discretion to transfer. It appears to me that one must hold the policy statement of 3 November 1988, as well as that of 18 May 1989, to be invalid. What the respondent has done is to treat those statements as giving a discretion; this is seen from the content of paragraph 9 quoted above. The contention there set out is, in my opinion, incorrect. It is true that the policy statements make some reference to standards and values, in the sense that reasons for the prohibition on transfer are given, but they do so in no other sense; nor is there any truth in the suggestion that the statements inform the public as to what is usually done. They simply say, so far as relevant, that licences of this kind cannot be transferred at all (the first statement) and that they cannot be transferred except in cases of death and permanent disability (the second statement).

2. Mr Vitali, for the respondent, argued that since the respondent's evidence as to the process he went through is uncontradicted, it should be accepted. I might have been inclined to accede to that, were it not for the content of paragraph 9 and the respondent's adherence to it in his oral evidence. Although I feel some sympathy for the respondent, who appeared to me to be given a difficult task, I cannot accept that he truly read the policy statements, or either of them, in the way paragraph 9 of the reasons suggests.

3. Another, rather different, defence put up by the respondent in his evidence was that he read the policy as subject to the same statutory discretion. If one were to spell that out at length, it would amount to saying that, appreciating that the policy statements could not take effect in their own terms, they were read down as permitting the exercise of a discretion. But this is not the line taken in the reasons given on 2 November 1990; it appears to me to be an afterthought.

4. The respondent gave evidence to the effect that the transfer would have been allowed, but for the policy. It appears to me unfair to him to take that too literally. Had there been no policy, it seems to me likely that the respondent would have had to take into account those matters of fact which brought the policy about and, in particular, over-fishing. Nevertheless, it seems to me very probable that the application for transfer would have succeeded, but for the policy.

5. The question then becomes whether a policy which is inconsistent with the Act can, nevertheless, be taken into account and, indeed, be treated as decisive. What the respondent claims to have done, in accordance with paragraph 9 quoted above, is, in substance, to misapply the policy, to treat it as merely informing the public of values and standards usually applied. In my opinion, since the policy was, so far as relevant, invalid, it should have been treated as irrelevant; although I have found no authority directly in point, it does not appear to me that an invalid policy can be given a valid operation by misreading it.

1. The question remains: what order should be made? Mr. Copley argued that the decision should be set aside and a declaration made having the effect of requiring a favourable answer to be given to the application. It seems to me plain that that should not be done.

2. The licence expired on 2 December 1989. The Act gives the Minister power to renew a licence, under s.24, but only if application for renewal is made not earlier than two months, nor later than one month, before the expiration of the period for which the licence was granted, renewed or last renewed: s.24(1). There is no evidence that any such application was made.

3. Although the point was not argued, I shall assume in favour of the applicant that the power to transfer a licence under s.25 enables transfer of one which has expired. But even if that be so, it could not possibly be proper for the Court to require that a transfer be effected when such a transfer would, unless renewal followed or accompanied the transfer, be futile.

4. The application will be dismissed but, in the circumstances, without costs.