Tasmanian Seafoods Pty Ltd v Chief Executive, Department of Agriculture, Fisheries and Forestry - [2014] QCATA 161

CITATION:

Tasmanian Seafoods Pty Ltd v Chief Executive, Department of Agriculture, Fisheries and Forestry [2014] QCATA 161

PARTIES:	Tasmanian Seafoods Pty Ltd t/as Tasmanian Seafoods (Applicant/Appellant)
v
Chief Executive, Department of Agriculture, Fisheries and Forestry (Respondent)

APPLICATION NUMBER:

APL417-13

MATTER TYPE:

Appeals

HEARING DATE:

29 May 2014

HEARD AT:

Brisbane

DECISION OF:

Senior Member O’Callaghan
Senior Member Stilgoe, OAM
Member Richards

DELIVERED ON:

2 July 2014

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Appeal dismissed.

2. Leave to appeal refused.

CATCHWORDS:

APPEALS – ADMINISTRATIVE LAW – where appeal on questions of law and application for leave to appeal on mixed law and fact – where applicant sought to review Departments decision regarding fishing quota allocation – where Tribunal had confirmed decision having regard to government policy – whether Tribunal had erred in law in is interpretation and consideration of government policy

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Mr Morehead of Moreheads Lawyers

RESPONDENT:

Mr S A McLeod of counsel

REASONS FOR DECISION

The Applicant seeks to challenge the decision of the Queensland Civil and Administrative Tribunal (‘the Tribunal’) dated 20 August 2013. The Tribunal ordered:
The decision of the Chief Executive’s delegate on 25 July 2012, to permanently allocate an additional 246 tropical rock lobster units to Tasmanian Seafoods Pty Ltd’s fishing boat licence, is confirmed.
Sections 146 and 147 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) prescribe this Appeal Tribunal's powers on appeal in this matter.
Before examining the Tribunal’s decision, it is necessary to refer to the legislative framework.
Section 3(1) of the Fisheries Act 1994 (Qld) (‘the Fisheries Act’) provides that:
The main purpose of this Act is to provide for the use, conservation and enhancement of the communities fisheries resources and fish habitats in a way that seeks to –
(a)apply on balance the principles of ecologically sustainable development; and
(b)promote ecologically sustainable development.
Section 3A(1) of the Fisheries Act identifies its main purpose. That main purpose is to be primarily achieved by:
(a)giving the Chief Executive appropriate powers to perform the Chief Executive’s functions under this Act; and
(b)providing for the following:
(i)the management and protection of fish habitats;
(ii)the management of commercial recreational and indigenous fishing;
(iii)the prevention, control and eradication of disease in fish; and
(iv)the management of aquaculture.
Section 20 outlines the functions of the Chief Executive. Section 20(1)(a) that the Chief Executive is responsible for:
… the management, use, development and protection of aquaculture, marine plants, fish habitats and, coral limestone and fisheries resources generally …
Section 20(2)(a) provides that one of the other functions of the Chief Executive is ‘… to ensure the fair division of access to fisheries resources for commercial, recreational and indigenous use …’.
Section 20A addresses the powers of the Chief Executive under the Fisheries Act, enabling such powers to be delegated (see s 21).
Section 63 of the Fisheries Act provides for the amendment of authorities.
The Regulation outlines the management provisions for the commercial crayfish and rock lobsters. Commercial fishing boat licenses endorsed with the fishery symbol ‘R’ are authorised to operate in the QTRL Fishery (see reg 602 of the Regulation).

The Applicant’s Grounds for Appeal/Leave to Appeal

The grounds specified under Part C of the Application (and repeated in the Applicant’s Outline of Submissions) are as follows:
1.The QCAT misdirected itself as to the status of the policy as at 25 July 2012 in assessing that special circumstances should not have been considered by the decision-maker delegate.
2.The QCAT acted ultra vires s.20 of the QCAT Act in purportedly deciding that the earlier opportunities for review cured any injustice.
3.The QCAT erred in holding that the amendment of the Applicant’s authority on 25 July 2012 by the decision-maker delegate was not manifestly unfair.
Grounds 1 and 2 involve appeals on questions of law only whereas ground 3 involves an appeal on a question of mixed law and fact and requires the leave of this Appeal Tribunal. (s 142 of the Act)

Factual Matrix and ‘The Policy’

The Applicant is a holder of a Commercial Fishing Boat Licence (‘CFBL’) and was first registered as a holder of the CFBL on 13 April 1999, which allowed it to take tropical rock lobsters in the Queensland Tropical Rock Lobster Fishery (‘QTRL Fishery’).
The quantity of lobster that a licensed holder may currently catch each year depends on the number of units attached to the licence.
One unit represents one kilogram of lobster: s 1605A(3) of the Fisheries Regulation 2008 (Qld) (‘the Regulation’).
The QTRL Fishery is managed by Fisheries Queensland within the Department of Agriculture, Fisheries and Forestry (‘DAFF’).
The Respondent’s delegate by decision dated 25 July 2012 increased the permanent holding of tropical rock lobster units associated with the Applicant’s licence by 246 units (246 kilograms) resulting a total holding of 2253 units.
Prior to that decision being made the Applicant held 2007 units.
The Applicant subsequently filed proceedings in the Tribunal seeking the Tribunal review the Delegate’s decision. (see GAR292-12, 20 August 2013.)
On 20 August 2013, the Tribunal confirmed the Decision.
It is that decision which is the subject of the present application for leave to appeal or appeal before this Appeal Tribunal.

An Aside

The following background matters were not in dispute before the original Tribunal.
In March 1999, Tasmanian Seafoods purchased its licence from another operator for $200,000.00. The licence allowed the use of a vessel of up to 18.71 metres in length with six dories.
At that time there was no cap on the total yearly catch for individual licence holders or for the fishery generally.
There were no units associated with the Applicant’s licence at that time and no licence restrictions as to the quantity of its catch.
In May 2001, the Department issued an investment warning.
The substance of the investment warning was that it was in the process of developing further ‘management arrangements’ for the fishery and that ‘future catches and investment might not be recognised in the ultimate management arrangements’.
Operators were warned not to increase their level of investment or activities until final management arrangements were in place.
The Department’s review concluded in December 2008 some nearly seven years later.
The regulatory response allowed quotas to be attached to Licences.
The regulation capped the annual quota for all licences combined at 195000 units. (See Fisheries Regulation 2008 (Qld) s 685A).

The Policy

At the same time, the Department released its policy relating to individual catch entitlements in the QRL Fishery (‘the Policy’).
The purpose of the Policy is to guide delegates of the Chief Executive of the Department in administering licences.
The Policy essentially involved a two-step process. Firstly, an ‘initial allocation’ of units to licences, followed by administrative consideration of any special circumstances as to the adequacy etc of initial allocations, insofar as the initial allocation applied to individual licences (response to the Show Cause Notice); then, secondly a ‘reviewing allocation’ of the units attached to licences.
Of the 195000 units available for all licences, 165750 units were initially allocated (85 per cent) amongst licence holders.
At the allocation stage, licence holders were sent a Show Cause Notice concerning proposed allocations under the formula adopted for the purposes of the allocation (and contained in the Policy).
Licence holders could under the Show Cause Notice request consideration of special circumstances which had limited their catch capacity.
One ‘special circumstance’ is, being a ‘recent entrant’ to the fishery at the time of the investment warning (namely May 2001).
It is accepted the Applicant is a ‘recent entrant’ by definition having purchased its licence in March 1999.

The Policy - Implementation

It is clear from the tenor of the Policy that the First stage is an initial allocation of quota stage where units are allocated to particular Licences endorsed with ‘R’ fishery symbols.
The Policy clearly identifies this stage as an allocation stage. The mechanism prescribed provided a means to achieve a starting point for implementation of the quota system attached to Licences.
In order to advise licence holders of their Quota allocation at this stage Show Cause Notices were sent.
The notices provided a mechanism for Licence holders to ask for variation of the allocation proposed, (a Condition endorsed on the face of the Licence). The Policy gave Licence holders 28 days to respond seeking variation of conditions.
The Policy provides two bases for reconsideration of the proposed allocation set out in the Show Cause Notice: namely, incorrect logbook information or ‘special circumstances’.
The Special Circumstances for reconsideration of initial allocations are set out at page 6 of the Policy.
Licence holders requesting a ‘Reconsideration’ were required to send a Request for Reconsideration to Fisheries Qld (‘FQ’).
The request was to contain the review reason (i.e. incorrect logbook information or special circumstances and any other information – as defined in the Policy).
Once received and reviewed by FQ a notification of the outcome was to be sent to the Licence holder in a Decision Notice.
QF Decisions are subject to review and/or appeal to QCAT.
The second stage of the policy deals with reviewing allocation of units.
The Policy allows for a temporary allocation of quota units during quota years prior to finalisation of all Applications and Appeals (using the mathematical approach) and a final allocation of units.
If prior to 1 July of a quota year, quota units were available then they were temporarily distributed to allow all quota units to be available to be used during any fishing season.
This only occurred prior to all Applications and Appeals being finalised.
Significantly, the reviewing allocation part of the policy deals with the held back units. While special circumstances requests and reviews were ongoing (in quota years), the held back units were to be temporarily distributed to licence holders ‘based on individual catch shares of allocated units’.
Upon finalisation of TRL quota Applications, Appeals to QCAT and compliance with QCAT Directions a final allocation was made.
The final allocation of units was an allocation of units remaining of the Total Allowable Catch for the TRL Fishery to Licence holders.
FQ distributed remaining units to Licence holders based on individual catch shares of allocated units – the ‘mathematical approach’.
It was undisputed before the original Tribunal that the intended effect of the policy was that after requests for consideration of special circumstances and Tribunal reviews had been completed, a licence holder for example who had been allocated 5 per cent of permanently allocated units to date would then receive a further permanent allocation of any remaining units based upon the mathematical approach.

The Appeal

The first and second grounds of appeal set out in the application for leave to appeal or appeal necessarily involve an appeal on a question of law.
Both orally and in written submissions it was argued that the Tribunal decision misconstrued the operation of both the policy and the investment warning.
It was urged upon the Tribunal that the Respondent should have considered the special circumstances approach at the second stage rather than the mathematical approach envisaged in the Policy.
Ultimately, it was submitted that the policy should be interpreted so that special circumstances be taken into account at each stage of executive decision making.
It was submitted that such an approach would avoid ‘inconsistency with relevant investment warnings’.
In deciding whether Dr Kung’s decision was manifestly unfair, the Tribunal (see paragraph 40) stated as follows:
In making the final allocation of 246 units, Dr Kung followed the policy. The policy does not have the force of law. It is merely a guide to the exercise of the power under s. 63 of the Fisheries Act.
The Tribunal went on to state that that did not mean that Government policy should be ignored. It mentioned the importance of fostering consistency in decision making and referred to a decision of Justice Brennan in Drake & Minister for Immigration and Multicultural Affairs (1979) AATA 179. In that decision it was held that the Administrative Appeals Tribunal should ordinarily follow Government policy unless there is a cogent reason in the particular case to do otherwise.
In coming to its decision the Tribunal adopted the same approach because:
a)    it considered that the policy was designed to allow the orderly application of units.
b)    the envisaged process was that submissions by licence holders that the formula produced an unjust result because of special circumstances would be sorted out through the ‘show cause’ process and any resulting Tribunal reviews.
c)    the held back units would be available for any additional allocations resulting from Departmental reconsiderations and Tribunal reviews.
d)    once those processes had been exhausted, it could be assumed that the licence holders had been prepared to accept as reasonable what they had been allocated, or pursued (or at least had the opportunity to pursue rights of Tribunal review if they felt the allocations were unfair).
e)    any remaining held back units would then be allocated in the same proportions as permanent allocations up to that point.
It went on to state significantly ‘the policy does not envisage that special circumstances would again be taken into account at the stage of the final allocation of held back units’.
The Tribunal referred to the drawn out nature of such a process and came to the conclusion that there is obvious sense in the approach taken by the Policy for equity matters to be addressed in the initial allocation/review process, and then for a purely mathematical calculation to be made at the final allocation stage.
They considered that the policy provided a fair and workable system overall.
The Tribunal accepted that it was legally open to them as it was to Dr Kung to depart from the policy at the final allocation stage.
However, they came to the conclusion that there was no cogent reason to do so in the case.
The reasons are as follows:
a)    Tasmanian Seafoods had been given and had taken opportunities to explain its equity concerns to the Department and the Fisheries Tribunal;
b)    it was informed of its right to apply for review by QCAT of the January 2010 Departmental decision implementing the Fisheries Tribunal decision;
c)    had Tasmanian Seafoods availed itself of that opportunity, it could have tried to convince QCAT that the Fisheries Tribunal decision had not been correctly implemented, or even perhaps that a different method of allocation was warranted in view of the number of units resulting from the implementation (which presumably the Fisheries Tribunal was not in a position to predict);
d)    Tasmanian Seafoods did not avail itself of that opportunity;
e)    any injustice to Tasmanian Seafoods in the size of the final allocation is outweighed by other factors namely the earlier opportunity for review and the problems caused for the Department and other licence holders in departing from the purely mathematical approach at the final stage.
The Tribunal concluded that in the circumstances where Tasmanian Seafoods had previously been afforded reasonable opportunities to have its equity concerns addressed and where a departure from the mathematical approach to the final allocations would be quite problematic, it considered that the correct and preferable decision was that the mathematical approach to final allocations suggested by the policy was appropriately applied by Dr Kung. The Tribunal confirmed his decision.
In our view, the Tribunal did not misdirect itself as to the status of the policy and correctly found that a departure from a mathematical approach to the final allocations would be quite problematic.
The Tribunal correctly identified the issues they were required to determine.
Those issues were:
a) whether Dr Kung’s decision was manifestly unfair; and secondly,
b) if it was, what decision should be made instead.
Returning to the first ground of appeal, it is urged that the Tribunal misdirected itself as to the status of the policy as at 25 July 2012 in assessing that special circumstances should not have been considered by the decision maker delegate.
Mr Morehead who appeared for the Applicant before this Appeal Tribunal, strongly argued that the special circumstances criteria relevant to the allocation stage, was something that should have been considered by Dr Krung.
He submitted that ‘a fair division of access must have been considered at final allocation and was not’.
He submitted that the Tribunal misconstrued the operation of the policy when it confirmed Dr Kung’s mathematical approach in preference to considering the special circumstances, namely the issuing of the investment warning at the allocation stage.
He submitted that one of the purposes of the policy is the establishment of ‘special circumstances that may be considered as reasons to depart from the allocation formula’.
He submitted that the exclusion of special circumstances as a consideration from the permanent allocation decision, ignored the fundamental consequence of that, namely that the policy made to protect the TRL Fishery in fact rewarded those who ignored the investment warning and punished those, so it was submitted, like the Applicant who paid the investment warning heed and conserved the fishery by not increasing their fishing effort pending the implementation of the policy.
Finally it was submitted that the correct and preferable position is that the policy be interpreted in such a manner that special circumstances be taken into account at each stage of the executive decision making, thus avoiding inconsistency with relevant investment warnings.
It was submitted by the Respondent that the Applicant’s argument encapsulated above, fundamentally misunderstands the application of the policy.
That submission is correct. The application of the policy was considered by the Tribunal at [9] – [11] of their decision. Their observations contained in those paragraphs correctly describe the application of the policy.
The Tribunal, at [13] – [20], detail the Applicant’s response to allocations and subsequent challenge to the departmental decision to the then Fisheries Tribunal.
It then noted that the Delegate followed the policy in making the final allocation of 246 units to the Applicant.
In doing so, it observed as follows:
[41]The policy was designed to allow the orderly allocation of units. Clearly the envisaged process was that the submissions by license holders that the formula produced an unjust result because of special circumstances would be sorted out through the show cause process and any resulting Tribunal reviews. The held back units would be available for any additional allocations resulting from departmental reconsiderations and Tribunal reviews. Once those processes had been exhausted, it could be assumed that the license holders had been prepared to accept as reasonable what they had been allocated, or pursued (or at least had the opportunity to pursue) rights of Tribunal review if they felt the allocations were unfair. Any remaining held back units would then be allocated in the same proportions as the permanent allocations up to that point.

At paragraph 42, the Tribunal observed:
[42]The policy does not envisage that special circumstances would again be taken into account at the stage of the final allocation of held back units. This is understandable. Allowing further adjustments on the basis of special circumstances in the final stage would give license holders disappointed with their final allocations, as adjusted by any reconsiderations or Tribunal variations, another ‘bite of the cherry’. It would further hold up final allocations. If the special circumstances were up for consideration again, there could be a further drawn out process of further considerations and reviews. Once permanent allocations of all units have been made, further adjustments became problematic because there is a legislative cap on the total number of units allowed. Any increased allocation to a unit holder means that the department must strip units from another license holder or holders, potentially triggering further reviews …
In conclusion, the Tribunal observed as follows at paragraph 43:
[43]There is obvious sense in the approach taken by the policy for equity matters to be addressed in the initial allocation/review process, and then for a purely mathematical calculation to be made at the final allocation stage. We consider that the policy provides a fair and workable system overall.
The above sufficiently addresses the first ground of appeal. It is clear that the Tribunal did not misdirect itself as to the status of the policy as at 25 July 2012. It is clear from the context of the policy and from the Tribunal’s decision, that special circumstances were not something that should have been considered by Dr Kung on 25 July 2012.
By that date, the allocation stage and time for applications to review and/or appeal initial allocations was over.
As at that date, all that had to be done was the final allocation of remaining units between the license holders based on the mathematical approach envisaged in the policy. The first ground of appeal fails.
The second ground of appeal involves an assertion that the Tribunal acted ultra vires s 20 of the Act in purportedly deciding that the earlier opportunity for review cured any injustice. Section 20 of the Act is in the following terms:
20.Review involves fresh hearing
(1)The purpose of the review of a reviewable decision is to produce the correct and preferable decision.
(2)The Tribunal must hear and decide a review of a reviewable decision by way of a fresh hearing on the merits.
The second ground of appeal fails. The Tribunal expressly noted that its function was to determine whether the Delegate’s decision was manifestly unfair (see [31] of the decision). It was cognisant of the Applicant’s argument that the earlier processes had left it with a small and unviable commercial allocation (see decision at [3] and [32]).
After detailing relevant procedural history, the Tribunal determined that in the circumstances, there was no cogent reason to depart from the policy. Consequently, in conformity with s 20 of the Act, the Tribunal below heard and decided the review of the reviewable decision by way of a fresh hearing on the merits.
The Tribunal identified the nature of decision being reviewed and the issues that they were required to determine at [30] – [31] of their decision.
The decision under review was the decision of 25 July 2012 that amended the Applicant’s license.
There is nothing in the Tribunal’s decision to suggest that it did not conduct itself as required by s 20 of the Act.
The Tribunal was required to review Dr Kung’s decision.
It did so, in conformity with the Act.
The issue before the Tribunal with respect to Dr Kung’s decision was whether or not his decision was manifestly unfair and if so, what decision should be made by the Tribunal instead. In coming to the correct and preferable decision, it was open to the Tribunal to find that the earlier opportunity for review cured any injustice. (see Chronology)
The third ground of appeal is that the Tribunal erred in holding that the amendment of the authority on 25 July 2012 was not manifestly unfair. Fundamental to this ground of appeal is that the Tribunal was wrong in not finding that Dr Kung should have taken into account special circumstances instead of adopting the mathematical approach as per the policy. Given the decision with respect to the first two grounds of appeal, this Appeal Tribunal is not disposed to give leave to appeal.

Conclusion

In the circumstances, with respect to the first two grounds of appeal, the Appeal Tribunal confirms the Tribunal’s decision. With respect to the third ground of appeal, the Appeal Tribunal refuses leave to appeal the decision.

CHRONOLOGY

1.	13 April 1999	Applicant registered as holder of commercial fishing boat licence (CFBL) licence number 4016
2.	May 2001	The Department issued an investment warning concerning future catches and investment and indicating those may not be recognised in the ultimate management arrangements
3.	December 2008	Department sends Tasmanian Seafoods a Show Cause Notice proposing the allocation of 24 units based on its catch history
4.	23 December 2008	Chief Executive approves the policy relating to individual catch entitlements in the Queensland Tropical Rock Lobster Fishery. As a result of the initial allocation under the terms of the policy, the Applicant was allocated a total holding of 2007 units
5.	January 2009	Tasmanian Seafoods’ lawyer corresponds with the Department in response
6.	June 2009	Department makes a permanent allocation of only 36 units to Tasmanian Seafoods
7.	November 2009	Fisheries Tribunal accepted that Tasmanian Seafoods catch history prior to the investment warning had been low and found that the Department’s June 2009 decision was manifestly unfair. The Tribunal set aside that decision and remitted the matter to the Department to make a new decision in accordance with the Tribunal’s reasons
8.	December 2009	Fisheries Tribunal abolished, functions transferred to QCAT
9.	January 2010	Department wrote to Mr Thompson, Tasmanian Seafoods’ lawyer advising of the decision it had reached to implement the decision of the Fisheries Tribunal. In that letter, the Department advised Tasmanian Seafoods that it could appeal to QCAT within 28 days of the date of that letter (and various other things)
10.	Post February 2010	Tasmanian Seafoods rather than applying for a review of the January 2010 decision, applies for a renewal of the Fisheries Tribunal decision (see QCAT Act).
11.	July 2010	QCAT dismissed Tasmanian Seafoods application on the basis that the Fisheries Tribunal would not have the power to vary its final orders
12.	May 2011	Further correspondence between the Department and Tasmanian Seafoods
13.	June 2011	Tasmanian Seafoods sends further material to the Department submitting that 2007 units was inadequate
14.	17 July 2012	Tasmanian Seafoods wrote to the Department advising that it remained unsatisfied with its allocation of 2007 units
15.	25 July 2012	The Respondent’s delegate increased the permanent holding of tropical rock lobster units associated the with Applicant’s licence by 246 units to 2253 units (the Decision ultimately under Appeal)
16.	July 2012	The Department obtained confirmation from QCAT that there were no outstanding applications by Tasmanian Seafoods
17.	25 July 2012	The Department wrote to Tasmanian Seafoods advising: (a) that a review by the Department of the “allocation decisions” was not warranted and secondly, a letter from Dr John Kung advising that he had decided to permanently allocate a further 246 units to Tasmanian Seafoods (the decision ultimately under appeal). The decision of Dr Kung of 25 July 2012 was the focus of the application to review heard on 26 July 2013 and delivered on 20 August 2013
18.	26 July 2013	Decision of QCAT confirming the decision of the Chief Executive’s delegate of 25 July 2012 (that proceeding being limited as a result of the decision made by Senior Member O’Callaghan to reviewing Dr Kung’s decision of 25 July 2013)