Perder Investments Pty Ltd v Lightowler
[1990] FCA 376
•16 JULY 1990
Re: PERDER INVESTMENTS PTY LTD
And: MARK ANDREW LIGHTOWLER
No. G1 of 1990
FED No. 376
Administrative Law
25 FCR 150
101 ALR 151
COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.(1)
CATCHWORDS
Administrative Law - Judicial Review - refusal to transfer fishing boat licence - principles as to the application of a policy in the exercise of a discretion - validity of directions to delegates pursuant to s. 38 (4) Torres Strait Fisheries Act 1984.
Torres Strait Fisheries Act 1984 ss. 8, 19, 25, 30, 31, 34, 36, 38.
HEARING
BRISBANE
#DATE 16:7:1990
Counsel for the applicant: Mr. K. Copley Q.C. and Mr D. O'Gorman
Solicitors for the applicant: Hemming and Hart T/A for Bothems Davies Nash
Counsel for the respondent: Mr. P. Dutney
Solicitors for the respondent: Australian Government Solicitor
ORDER
The decision by the respondent to refuse the transfer from Colin Richard Dwyer and Joy Olive Dwyer to Perder Investments Pty Ltd of Torres Strait Fishing Boat Licence No. H00609B be set aside.
The application for transfer of Torres Strait Fishing Boat Licence No. H00609B to Perder Investments Pty Ltd be remitted to the Protected Zone Joint Authority to be determined according to law.
The respondent should pay the applicant's costs, to be taxed if not agreed.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an amended application for an order of review in respect of a decision by Mark Andrew Lightowler, a licensing officer of the Queensland Fish Management Authority, to refuse to transfer Torres Strait Fishing Boat Licence No. HOO609B, issued under the Torres Strait Fisheries Act 1984 ("the Act") from Colin Richard Dwyer and Joy Olive Dwyer to Perder Investments Pty Ltd.
The applicant is the purchaser of a fishing vessel "Dhikarr" and associated licences, including the Torres Strait Fishing Boat Licence No. HOO609B, from Colin Richard Dwyer and Joy Olive Dwyer. The licence is necessary to permit the trawler to operate in the waters to which the Act applies. The agreement to purchase is dated 21 April 1989. The purchase price was $320,000.00, and was apportioned as to the vessel $233,000.00 and as to licences $87,000.00. The licences the subject of the agreement included a Queensland Commercial Fishing Vessel Licence No. VO4178E together with all current endorsements thereon; Commonwealth Fishing Boat Licence (endorsed N.P.F. and 117) No. B457466; and the Torres Strait Fishing Boat Licence at the centre of this application. The purchase agreement was subject to and conditional upon the approval by the appropriate authorities, on or before the date of settlement, of the transfer from the vendor to the purchaser of the above three licences. Settlement was effected, however, on 6 July 1989. Thus it appears that that condition (contained in cl. 11 of the agreement) was waived.
The Torres Strait Fishing Boat Licence No. HOO609B was valid from 14 April 1989 to 2 December 1989. It was issued by Mr. Lightowler, the present respondent, as delegate of the Protected Zone Joint Authority ("the Authority"), and pursuant to s. 19(2) of the Act. The licence was in respect of the prawn fishery within the jurisdiction of the Authority.
The Authority is established by s. 30(1) of the Act. It consists of the "Commonwealth Minister" and the "Queensland Minister" (s. 30(2)). Section 30(3) provides:
"The Protected Zone Joint Authority has such functions in relation to fisheries in respect of which arrangements are made under section 31 as are conferred on it by this Part and by the law of Queensland."
Section 30(7) provides:
"All courts and persons acting judicially shall take judicial notice of the signature of a person who is or has been a member of the Protected Zone Joint Authority or a deputy of such a member and of the fact that he is, or was at a particular time, such a member or deputy."
Section 31 provides for the making of arrangements between the Commonwealth and Queensland. Relevantly it provides:
"(1) Subject to this section, the Commonwealth may make an arrangement with Queensland that the Protected Zone Joint Authority is to have the management of a particular fishery in waters adjacent to Queensland.
(2) An arrangement under sub-section (1) shall provide either that -
(a) the fishery (being a fishery wholly or partly in the Protected Zone coastal waters of Queensland) is to be managed in accordance with the law of the Commonwealth; or
(b) the fishery (being a fishery wholly or partly in waters on the seaward side of the Protected Zone coastal waters of Queensland) is to be managed in accordance with the law of Queensland.
By a proclamation of Thursday, 14 February 1985, an arrangement pursuant to s. 31 of the Act was announced. Clause 2(2) of that proclamation provides:
"It is hereby arranged, in pursuance of sub-section 31(1) of the Torres Strait Fisheries Act 1984, that the fisheries to which this clause applies shall be managed in accordance with the law of the Commonwealth by the Protected Zone Joint Authority established by section 30 of that Act."
That clause applied to the fishery in the area of the Protected Zone south of the Fisheries Jurisdiction Line. The effect of this proclamation is that the commercial fishing for prawns in that area but outside the limits of Queensland was to be managed by the Authority in accordance with the law of the Commonwealth.
Section 34 provides for the functions of the Authority:
"Where there is in force an arrangement under this Part under which the Protected Zone Joint Authority has the management of a fishery and the fishery is to be managed in accordance with the law of the Commonwealth, the Protected Zone Joint Authority has the functions of -
(a) keeping constantly under consideration the condition of the fishery;
(b) formulating policies and plans for the good management of the fishery; and
(c) for the purposes of the management of the fishery -
(i) exercising the powers conferred on it by this Part; and
(ii) co-operating and consulting with other authorities (including Joint Authorities established under the Fisheries Act 1952) in matters of common concern."
In this context, s. 8 refers to the objectives of the Act:
"In the administration of this Act, regard shall be had to the rights and obligations conferred on Australia by the Torres Strait Treaty and in particular to the traditional way of life and livelihood of traditional inhabitants, including their rights in relation to traditional fishing."
The preamble to the Act is in these terms:
"An Act relating to fisheries in certain waters between Australia and the Independent State of Papua New Guinea"
Section 36 deals with the powers of the Authority with respect to the powers conferred by Part IV of the Act dealing with, inter alia, the issue, renewal and transfer of licences. Section 36 relevantly provides:
"(1) Subject to this section, a licence, Treaty endorsement or entry granted or made under this Act otherwise than by virtue of this section does not authorize the doing of any act or thing in or in relation to a Protected Zone Joint Authority fishery.
(2) 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."
Section 38 deals with delegation by the Authority and provides in part:
"(1) Subject to this section, the Protected Zone Joint Authority may, by instrument, either generally or as otherwise provided by the instrument, delegate to a person any of its powers under this Act, other than this power of delegation or the powers that it has by virtue of the operation of sub-section 35(1).
(2) A power so delegated, when exercised by the delegate, shall, for the purposes of this Act, be deemed to have been exercised by the Protected Zone Joint Authority.
(3) A delegation under this section may be expressed as a delegation to the person from time to time holding, or performing the duties of, a specified office in the Department or a specified office in the service of Queensland or an authority of the State of Queensland or under the law of Queensland.
(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.
(5) A delegation of a power under this section -
(a) may be revoked, by instrument, by the Protected Zone Joint Authority (whether or not constituted by the persons constituting constituting the Protected Zone Joint Authority at the time at which the power was delegated); and
(b) does not prevent the exercise of the power by the Protected Zone Joint Authority. ..."
Of particular importance to this matter are sub-sections 38(2) and (4).
Mr. Lightowler is covered by an instrument of delegation signed by the federal Minister for Primary Industries and Energy, Mr. Kerin and the Queensland Minister for Primary Industries, Mr. Harper dated 18 May 1989. The delegation by the Authority, pursuant to s. 38(1) of the Act, delegated to the person occupying or performing the duties of an office, the position number of which was specified in the first column of the Schedule to the instrument of delegation, the powers and functions of the authority with respect to Australian boats and Australian citizens as contained in the sections and sub-sections of the Act specified in the second column of the Schedule to the instrument of delegation. The effect of this instrument of delegation was to delegate to Mr. Lightowler, the present respondent, who then occupied the position numbered 990959, the powers and functions conferred, inter alia, by ss. 19(1), 19(2) and 25. Section 19 deals with the grant of fishing licences and s. 25 with the transfer of licences.
Section 25 provides:
"(1) 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."
The qualification contained in sub-section (2) is not presently relevant. Thus it is apparent from s. 25 that the transfer of fishing licences is a matter calling for the exercise of a discretion.
By an application dated 21 April 1989, the vendors of the Dhikarr and the proposed purchaser applied to the Authority for a transfer of the licence HOO609B to the applicant. This application was submitted to the Queensland Fish Management Authority under covering letter of 10 July 1989 together with a submission dated 6 July 1989. Before the submission of those documents, by a letter dated 24 April 1989, the solicitors for the applicant informed the Queensland Fish Management Authority of the purchase and requested details of the licences issued in respect of that vessel relating to fishing operations.
The Queensland Fish Management Authority, by letter of 27 April 1989, advised the applicant's solicitors of the details of the Queensland Commercial Fishing Vessel Licence, the Commonwealth Fishing Boat Licence and the Torres Strait Fishing Boat Licence and then continued as follows:
"You are advised that in accordance with a current 'freeze' on the transfer of any Torres Strait Fishing Boat licence enclosed for the prawn fishery the Torres Strait Fishing Boat Licence number H00609B would be required to be surrendered before the Queensland Commercial Fishing Vessel and Commonwealth Fishing Boat licences for this vessel could be transferred. A declaration agreeing to this surrender is required to be completed by both the transferors and the transferees."
The "freeze" here referred to is a reference to a joint statement dated 3 November 1988, headed "TORRES STRAIT PRAWN FISHERY: CLOSURES AND FREEZE ON LICENCE TRANSFERS". In this statement, Mr. Kerin and Mr. Harper announced the closure of the Torres Strait Prawn Fishery and a freeze on the transferability of licences for that fishery. The joint statement said:
"The closures and the freeze were recommended to the PZJA by a working party which included representatives of the prawn fishing industry and Torres Strait Islanders. The recommendations were also supported by scientific advice which indicated the lengthened closure would allow small recruiting tiger prawns to grow and disperse through the fishery, increasing the value of the potential harvest."
The statement also said:
"In the meantime, the working party recommended a freeze on licence transfers as an interim measure to retain the status quo and stop speculation while discussions continue."
It continued:
"The Ministers said that they saw considerable merit in
the proposal to introduce non-transferability of Torres Strait prawn licences on a long-term basis as a method of reducing the number of licensed vessels in the fishery."
It ended:
"Non-transferability will reduce the number of licensed vessels without affecting the fishing patterns of existing operators. It will simply ensure that when an existing operator leaves the fishery he will not be replaced."
The submission which accompanied the application for the transfer of the licence under cover of the letter of 10 July 1989 indicated that the directors of the applicant were Trevor Crettenden and Susan Felton both of 87 Cedar Street, Palm Cove, and indicated that since 1980 Mr.Crettenden had skippered various vessels solely in the Torres Strait. It pointed to the difficulty he would experience in having to fish and navigate unfamiliar waters. He had a personal commitment to fishing in the Torres Strait over a long period. In addition to other matters, the submission said:
"It is our understanding that the current 'Freeze' on Torres Strait licence transfers is a temporary measure only, designed to keep the 'Status Quo' and that industry members have in fact been invited to comment thereon. we submit that the plicy positively disadvantages those such as Mr Cretenden who have devoted their whole fishing activities to the area as skippers and are prevented from the benefit of that experience in acquiring their own boats. We submit that the application of this policy to Mr Cretenden through his company would be an abuse of the discetion, given the facts of this particular case. Mr Cretenden, through his company, is not a speculator but a genuine fisherman whose only experience relates to the Torres Strait."
Reference is also made to the fact that the transfer sought would not introduce further "effort" to the fishery and requested:
"...the PZJA to exercise his discretion and exempt our client from the application of the relevant policy and approve the transfer of the Torres Strait licence endorsed for the Prawn Fishery attaching to the vessel 'Dhikarr' to Perder Investments Pty Ltd."
By letter dated 1 August 1989 the Secretary of the Queensland Fish Management Authority advised:
"I refer to your submission on behalf of Perder Investments Pty Ltd, to be exempted from the current non-transferability to (sic) Torres Strait Prawn boat licences policy introduced by the Protected Zone Joint Authority (P.Z.J.A.).
The non-transferability policy which was introduced on 3 November, 1988 for an interim period has subsequently been retained by the (P.Z.J.A.) on a permanent basis. However, an exception is made where the present licencee dies or is permanently incapacitated, the licence may be transferred to either a wife or equivalent or a child of the original licencee. Therefore under current policy, your submission to have your client's boat licence for 'Dhikarr' exempted from the non-transferability policy has been refused, and accordingly the current Torres Strait Licence number H00609B should be returned to this office."
Central to these proceedings is a direction to delegates under the Act by Mr. Kerin "for an (sic) on behalf of the Protected Zone Joint Authority" in respect of the relevant prawn fishery. The delegates covered by the direction dated 16 December 1988 included persons to whom the Protected Zone Joint Authority had delegated its powers or functions under the Act pursuant to s. 38(1) of the Act. Specifically, that direction in cl. 2 dealt with the transfer of prawn licences in the following terms:
"Delegates 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."
And cl. 3 provided under 'Transfer of Licence Package' which includes Prawn Licence:
"Pursuant to an application made on or after the relevant date under subsection 25(1) of the Act, delegates shall not transfer a licence package to another person unless the prawn licence is forfeited to the delegate."
The date of the direction is 16 December 1988, and the instrument of delegation is dated 18 May 1989. In any event, Mr. Lightowler regarded himself as bound by this direction.
The grounds on which the application for an order of review of this decision proceeded were that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made, that it involved an error of law, or that it was otherwise contrary to law. Included in the ground based on an improper exercise of the statutory power was the particular that "the respondent had exercised a personal discretionary power at the direction or behest of another person" and that "the respondent had exercised a discretionary power in accordance with a rule of policy without regard to the merits of the particular case;".
The reasons of the respondent for his decision to refuse the transfer of the Torres Strait Licence read in part:
"The Directions to Delegates prohibited the transfer of a prawn licence to another person. In the circumstances the delegate considered the prohibition on the transfer of a prawn licence applied to the Applicant.
At the time of making the decision, the Delegate was aware of PZJA's relaxing of its Directions in connection with prawn licences to allow the transfer of a licence to the spouse or equivalent or child of the original licensee in circumstances where the licensee had died or become permanently incapacitated. Even though the Applicant was not entitled to be considered under the exemptions provided in the further Directions. On the facts and evidence available to the Delegate, the Applicant did not fulfil any of those criteria whereby a transfer of the said licence was permissible. None of the submissions lodged by the Applicant pointed to there being any other facts to bring the Applicant within the exemption of the further Directions whereby a transfer to it might be allowed."
It seems, however, that the purported exemption referred to in these reasons arose as the result of further directions given on 11 August 1989, subsequent to the decision in this case, which was communicated to the applicant by letter of 1 August 1989. As at the date of decision, the direction of 16 December 1988 was the only direction operative. The date of Mr. Lightowler's reasons is 6 December 1989, which might explain the mistaken reference to the "relaxing of its directions", which did not apply as at the date of the decision under review.
As appears from those reasons, and this was not disputed by counsel for the respondent, this was not a case where the subjective circumstances of the applicant had been considered against the background of a general policy and, after a consideration of the intrinsic subjective factors, a decision had been made in accordance with a general policy. What occurred in this case was that the decision-maker considered himself bound by the direction that had issued under s. 38(4). The central submission on behalf of the applicant was that a refusal to transfer any licence is not the adoption of a policy in the exercise of a discretion but was a refusal to exercise any discretion at all. Shortly put, the submission was that the statutory discretion conferred on the delegate pursuant to s. 25 in relation to the transfer of licences had not been exercised in this case, and the decision made by the delegate acting on the blanket direction of the Authority of 16 December 1988 involved an error of law.
The principle that a decision-maker cannot abrogate a discretion by the application of a universal policy with no consideration of the merits of the matter is clear from the authorities. In Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 640, Brennan J. was concerned with the inter-relationship of ministerial policy and ss. 12 and 13 of the Migration Act 1958 which deal with the deportation of an immigrant. His Honour said at 640-641:
"The Minister must decide each of the cases under
ss. 12 and 13 on its merits. His discretion cannot be so truncated by a policy as to preclude consideration of the merits of specified classes of cases. A fetter of that kind would be objectionable, even though it were adopted by the Minister on his own initiative. A Minister's policy, formed for the purposes of ss. 12 and 13 of the Migration Act, must leave him free to consider the unique circumstances of each case, and no part of a lawful policy can determine in advance the decision which the Minister will make in the circumstances of a given case. That is not to deny the lawfulness of adopting an appropriate policy which guides but does not control the making of decisions, a policy which is informative of the standards and values which the Minister usually applies. There is a distinction between an unlawful policy which creates a fetter purporting to limit the range of discretion conferred by a statute, and a lawful policy which leaves the range of discretion intact while guiding the exercise of the power."
Brennan J. had introduced these comments with a statement of general principle at 640:
"Of course, a policy must be consistent with the
statute. It must allow the Minister to take into account the relevant circumstances, it must not require him to take into account irrelevant circumstances, and it must not serve a purpose foreign to the purpose for which the discretionary power was created. A policy which contravenes these criteria would be inconsistent with the statute (see Murphyores Incorporated Ltd. v. The Commonwealth (1976) 136 CLR 1; Drake v. Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60; 24 ALR 577 at 589, and the cases there cited). Also, it would be inconsistent with ss. 12 and 13 of the Migration Act if the Minister's policy sought to preclude consideration of relevant arguments running counter to an adopted policy which might be reasonably advanced in particular cases. "
In British Oxygen Co. Ltd. v. Board of Trade (1971) AC 610, Lord Reid, with whom Lords Wilberforce and Diplock agreed, said at 624-5:
"It was argued on the authority of Rex v. Port of
London Authority, Ex parte Kynoch Ltd. (1919) 1 KB 176 that the Minister is not entitled to make a rule for himself as to how he will in future exercise his discretion. In that case Kynoch owned land adjoining the Thames and wished to construct a deep water wharf. For this they had to get the permission of the authority. Permission was refused on the ground that Parliament had charged the authority with the duty of providing such facilities. It appeared that before reaching their decision the authority had fully considered the case on its merits and in relation to the public interest. So their decision was upheld.
Bankes L.J. said, at p 184:
'There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the tribunal may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction to be drawn between these two classes.'"
Lord Reid continued at 625:
"The general rule is that anyone who has to exercise a statutory discretion must not 'shut his ears to an application' (to adapt from Bankes L.J. on p 183). I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and then they will almost certainly have evolved a policy so precise that it could well be called a rule. There can be no objection to that, provided the authority is always willing to listen to anyone with something new to say - of course I do not mean to say that there need be an oral hearing."
In R. v. Port of London Authority Ex parte Kynoch Ltd (1919) 1 KB 176, Bankes L.J. had made reference to R. v. London City Council (1918) 1 KB 68. In the latter case, the applicant had asked for permission to sell pamphlets in one of the city parks and was told:
"In reply to your letter (undated) I have to state that
the Council has decided that no permits for the sale of literature at the Council's parks and open spaces are to be issued. I regret that it is not possible to make exception to this rule even in a most deserving case."
Bankes L.J. said at 185:
"The Divisional Court regarded that not as the
adoption of a policy in the exercise of a discretion but as a refusal to exercise any discretion."
I would regard that conclusion as entirely applicable to the present application.
In Sagnart Investments Limited v. Norwich Corporation (1971) 2 QB 614, Lord Denning said at 626:
"I take it to be perfectly clear now that an
administrative body, including a licensing body, which may have to consider numerous applications of a similar kind, is entitled to lay down a general policy which it proposes to follow in coming to its individual decisions, provided always that it is a reasonable policy which it is fair and just to apply. Once laid down, the administrative body is entitled to apply the policy in the individual cases which come before it. The only qualification is that the administrative body must not apply the policy so rigidly as to reject an applicant without hearing what he has to say. It must not 'shut its ears to an application': see (1971) AC 610, 625, per Lord Reid. The applicant is entitled to put forward reasons urging that the policy should be changed, or saying that in any case it should not be applied to him. But, so long as the administrative body is ready to hear him and consider what he has to say, it is entitled to apply its general policy to him as to others."
The respondent in fact conceded that Mr. Lightowler had not exercised a discretion when deciding this matter but rather had followed obediently the direction given to him under the Act. Such direction, the respondent submitted, was a lawful direction pursuant to s. 38(4) of the Act and therefore there is no error to be found in the decision or conduct of Mr. Lightowler in following that direction. If there was any reviewable error, the respondent submitted, it should have been directed at the validity of the direction to delegates dated 16 December 1988.
The real contention between the parties, as I see it, is thus the lawfulness of the relevant direction to the delegates by the Authority, purporting to be pursuant to s. 38(4) of the Act. In my view the direction is invalid. It is quite inconsistent with the statutory discretion conferred on the Authority by the combination of ss. 25(1) and 36(2). It was conceded by the respondent that, if the Authority itself had applied the policy reflected in the direction of 16 December 1988 and had applied a blanket prohibition on the transfer of licences in the case of the application made by Perder Investments Pty Ltd, then such a decision could not be justified. But it was submitted that the same conclusion did not follow where a delegate had applied a policy of uncritical or blanket prohibition on transfer pursuant to a direction given under s. 38(4) of the Act.
In my opinion, this argument cannot be accepted. Section 38(2) provides that a power so delegated, when exercised by the delegate, shall, for the purposes of the Act be deemed to be exercised by the Authority. If the refusal to exercise a discretion by the Authority itself would be bad, then it cannot be made good by directing a delegate to refuse to exercise that discretion, because s. 38(2) deems that decision to be a decision of the Authority itself. A decision by the Authority can not be both valid and invalid at the same time.
It follows that, in my view, the Authority cannot permissibly under s. 38(4) give a direction to its delegates the effect of which is not to guide the exercise of the discretionary power but to prevent its exercise absolutely. The direction was thus unlawful and Mr. Lightowler's acting on it had the consequence that he "shut his ears" to the application. In my opinion, the applicant has made out grounds 3, 4, and 6(e) of its application; that is to say, the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made; it involved an error of law and, in particular, the respondent exercised discretionary power in accordance with the rule or policy without regard to the merits of the particular case.
The decision by the respondent to refuse to transfer Torres Strait Fishing Boat Licence No. H00609B issued under the Torres Strait Fisheries Act 1984 from Colin Richard Dwyer and Joy Olive Dwyer to Perder Investments Pty Ltd is set aside. In the circumstances I think it appropriate to remit that application to the Protected Zone Joint Authority to be determined according to law.
The respondent should pay the applicant's costs, to be taxed if not agreed.
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