Tasmanian Seafoods Pty Ltd v Chief Executive, Department of Agriculture, Fisheries and Forestry
[2013] QCAT 425
| CITATION: | Tasmanian Seafoods Pty Ltd v Chief Executive, Department of Agriculture, Fisheries and Forestry [2013] QCAT 425 |
| PARTIES: | Tasmanian Seafoods Pty Ltd |
| v | |
| Chief Executive, Department of Agriculture, Fisheries and Forestry |
| APPLICATION NUMBER: | GAR292-12 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | 26 July 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul Kanowski, Presiding Member Simon Coolican, Member James White, Member |
| DELIVERED ON: | 20 August 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. 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. |
| CATCHWORDS: | REVIEW - Fishing quota allocation – relevance of government policy in final allocation Fisheries Act 1994 (Qld) ss 20(2)(a), 63, 185(1) Drake & Minister for Immigration and Ethnic Affairs [1979] AATA 179 |
APPEARANCES and REPRESENTATION:
| APPLICANT: | Tasmanian Seafoods Pty Ltd represented by Mr Grant Leeworthy (an employee of the company) |
| RESPONDENT: | Chief Executive, Department of Agriculture, Fisheries and Forestry represented by Mr Matthew Price (in-house counsel) |
REASONS FOR DECISION
INTRODUCTION
Tasmanian Seafoods holds a fishing boat licence, issued by the Queensland Department of Agriculture, Fisheries and Forestry, for the Queensland Tropical Rock Lobster Fishery. The quantity of lobster that a licence holder may catch each year depends on the number of ‘units’ attached to the licence. One unit represents one kilogram of lobster.[1] So for example, if there are 10,000 units attached to a licence, the licence holder is permitted to catch up to 10,000 kilograms of lobster per year.
[1] Fisheries Regulation 2008 (Qld) s 605A(3).
In the current proceeding, Tasmanian Seafoods asks QCAT to review a decision made by the Department in July 2012 to allocate a further 246 units to its licence. Tasmanian Seafoods’ licence already had 2,007 units, so the further allocation brought the total number of units for the licence to 2,253.
Tasmanian Seafoods says that 2,253 units is not a commercially viable amount, and that it should have been allocated more units in July 2012. It asks us to set aside the Department’s decision to allocate 246 units and substitute a decision to allocate 20,048 units, bringing its total allocation to 22,055 units.
The name of the Department responsible for fisheries has changed from time to time over the years. We will use the generic term ‘the Department’.
BACKGROUND
To understand the context of the July 2012 decision, it is necessary to go back as far as 1999. The following background matters are not in dispute.
In March 1999, Tasmanian Seafoods purchased its licence from another operator for $200,000. 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. As Tasmanian Seafoods has put it, management of the fishery was “‘input controlled’ with the number of dories being the most important factor in limiting fishing effort in the fishery”. So there were no units associated with Tasmanian Seafoods’ licence at that time, and no restriction, other than the operator’s own capacity, on the quantity of catch.
In May 2001 the Department issued an investment warning. It said it was reviewing and developing further management arrangements for the fishery, and that future catches and investment might not be recognised in the ultimate management arrangements. The Department warned operators not to increase their level of investment or activities until final management arrangements were in place.
The Department’s review took a long time, reaching a conclusion in December 2008. In that month a regulation came into force which allowed for catch quotas to be attached to licences, and capped the annual quota for all licences combined at 195,000 units.[2] Also in December 2008, the Department released its Policy relating to individual catch entitlements in the Queensland Rock Lobster Fishery. (There were some later amendments to the Policy, but they were not substantial). According to the Policy, it had been developed after extensive consultation with industry stakeholders.
[2] Fisheries Regulation 2008 (Qld) s 605A.
The Policy was designed to guide delegates of the chief executive of the Department in administering licences. It provided for an ‘initial allocation’, consideration of any special circumstances, and a ‘reviewing allocation’ of units. The initial allocation amongst licence holders was of 165,750 units, which was 85% of the total 195,000 available. Under the initial allocation, each licence holder was to receive the number of units calculated under a formula based on their three highest annual catches in the years 1995 to 2001, their highest annual catch in the years 2002 to 2005, and their next highest annual catch in the years 1995 to 2005. Licence holders were to be sent a show cause notice about proposed allocations under the formula. They could request consideration of special circumstances which had limited their catch capacity, such as being a recent entrant to the fishery at the time of the investment warning.
Under the Policy, 15% (29,250) of the total units were held back to allow for additional allocations for demonstrated special circumstances, and for giving effect to any tribunal reviews. The ‘reviewing allocation’ part of the Policy dealt with the held-back units. While special circumstances requests and reviews were ongoing, the held-back units were to be temporarily distributed to licence holders ‘based on individual catch shares of allocated units’. Once all requests and reviews had been completed, any remaining held-back units were to be distributed to the licence holders ‘based on individual catch shares of allocated units’.
It is undisputed 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% of the permanently allocated units to date would then receive a further permanent allocation of 5% of any remaining units.
In December 2008 the Department sent Tasmanian Seafoods a show cause notice, proposing an allocation of 24 units. This number had been calculated under the formula, based on Tasmanian Seafoods’ catch history (of 142.8 kilograms in 2001, and nil in the other years).
In January 2009 Tasmanian Seafoods’ lawyer, Mr Chris Thompson of Law Essentials, wrote to the Department in response. Mr Thompson detailed the history of Tasmanian Seafoods, and steps it had taken which showed it was committed to serious involvement in the fishery. He submitted that special circumstances existed in that Tasmanian Seafoods had heeded the investment warning, and this had resulted in a low catch history. He argued for an allocation based on models other than catch history, such as using catch figures from the top two vessels in the fishery, or using catch figures from other vessels with six dories. Allocations were calculated for each of the models. Mr Thompson submitted that an allocation of at least 22,055 units, as a mid-point, would be appropriate.
The Department was not substantially moved. In June 2009 it made a permanent allocation of only 36 units to Tasmanian Seafoods. The Department acknowledged in its letter that Tasmanian Seafoods had been a recent entrant to the fishery at the time of the investment warning, but it did not accept as appropriate the models suggested by Mr Thompson. Instead, the Department slightly modified certain variables in the formula, and this resulted in the calculation of 36 units.
Tasmanian Seafoods appealed to the Fisheries Tribunal. In November 2009 the Tribunal accepted that Tasmanian Seafoods’ catch history prior to the investment warning had been low because it had not been able to find a suitable vessel, and that Tasmanian Seafoods had put on hold its efforts to find a vessel when the investment warning was issued. The catch that had been made in one year was simply by one of Tasmanian Seafoods’ vessels, normally used elsewhere, while passing through the fishery. The Tribunal found that the Department’s June 2009 decision, being based partly on Tasmanian Seafoods’ catch history during the period when it heeded the investment warning, was manifestly unfair. The Tribunal set aside the decision, and remitted the matter to the Department to make a new decision in accordance with the Tribunal’s reasons. The Tribunal indicated that it did not adopt the models suggested by Mr Thompson. Instead, it set out a modification to the Policy’s formula which involved using, for the years 2002 to 2005, not the actual figures for Tasmanian Seafoods’ catch, which was nil, but rather a figure (to be calculated by the Department) for the average catch of the fleet.
Shortly after this, in December 2009, the Fisheries Tribunal was abolished, and its functions transferred to QCAT.
In January 2010 the Department wrote to Mr Thompson advising of the decision it had reached to implement the decision of the Fisheries Tribunal. The letter showed what average catch figures had been used for the years 2002 to 2005, and explained how this resulted in an allocation of 2,007 units under the formula as modified. The Department allocated a further 1,971 units, to bring Tasmanian Seafoods’ allocation up to 2,007. The letter concluded with advice that Tasmanian Seafoods could appeal to QCAT within 28 days (or an extended period if the tribunal granted an extension) on a number of grounds including if it considered the decision manifestly unfair.
Rather than applying for a review of the January 2010 decision, in February 2010 Tasmanian Seafoods applied for a ‘renewal’ of the Fisheries Tribunal decision. ‘Renewal’ is a process allowed under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) in certain situations, such as where there are problems interpreting a final decision of QCAT.[3] In July 2010 QCAT dismissed Tasmanian Seafoods’ application on the basis that the Fisheries Tribunal would not have had the power to vary its final orders.
[3] Section 133.
Although not explored in detail in QCAT’s reasons, it is undisputed that there was a difference of opinion between the parties about what the Fisheries Tribunal had meant by ‘the fleet’. The Department included in its January 2010 calculations of average catches the catch figures for all licence holders other than Tasmanian Seafoods, including nil catches. Tasmanian Seafoods’ position was that only the catch figures of active operators should have been included.
In the reasons, QCAT commented that the orders sought by Tasmanian Seafoods would in any event have been ‘beyond anything contemplated by the expression “renewal”’ and ‘the proper course was for [Tasmanian Seafoods] to make an application to QCAT for review of the new decision of the [Department] ...’.[4]
[4] Paragraph 34 of the reasons.
Almost a year later, in May 2011, a senior officer within the Department, Mr Jim Groves, emailed Mr Leeworthy of Tasmanian Seafoods to follow up a discussion about Tasmanian Seafoods’ dissatisfaction with its allocation of units. Mr Groves suggested that Tasmanian Seafoods could send any additional information to Ms Stephanie Slade, who was the delegate who made the January 2010 decision, but he added that he thought Ms Slade’s decision already took full account of the extenuating circumstances. He added:
I understand that you were informed by QCAT last year of the proper process to apply for review of the most recent decision and I would suggest that you take up this option if you are dissatisfied with the current situation. Although you will be out of time in lodging a new appeal with QCAT, Fisheries Queensland will not object to this matter being heard.
In June 2011 Tasmanian Seafoods sent further material to Ms Slade, and submitted that 2,007 units was inadequate. Tasmanian Seafoods asked the Department to depart entirely from the formula on the basis that Tasmanian Seafoods had special circumstances as a recent entrant. Tasmanian Seafoods expanded on a number of Mr Thompson’s earlier arguments, and repeated Mr Thompson’s suggestion that the allocation to Tasmanian Seafoods should be at least 22,055 units.
Ms Slade sent a detailed response in September 2011 in which she advised that she was not persuaded to change her decision of January 2010.
On 17 July 2012 Tasmanian Seafoods wrote to the Department advising that it remained dissatisfied with its allocation of 2,007 units. It said that in an effort to exhaust all available options before returning to QCAT, it was writing to request that the Department review the company’s circumstances and the application of the Policy to the company’s situation. It reiterated a number of background facts, asked for a fair allocation, and concluded ‘alternately we request your consent for a full merits based review in QCAT as was offered by Jim Groves’.
In July 2012 the Department obtained confirmation from QCAT that there were no outstanding applications by Tasmanian Seafoods.
On 25 July 2012 the Department sent two letters to Tasmanian Seafoods. One was from Ms Maria Mohr (who had taken over Mr Groves’ position) to the effect that a review by the Department of ‘the allocation decisions’ was not warranted. The second letter was from Dr John Kung advising that as delegate of the chief executive he had decided to permanently allocate a further 246 units to Tasmanian Seafoods, bringing its total allocation to 2,253 units. Dr Kung gave reasons for his decision in the letter. These included that there were 21,260 units remaining after special circumstances requests and tribunal reviews; such request and reviews had all been completed; Tasmanian Seafoods held 1.155% of the units that had been permanently allocated up to that point; and so, as per the Policy, Tasmanian Seafoods would receive a further permanent allocation of 246 units (which is 1.155% of 21,260).
Clearly, then, from the Department’s perspective, 246 units was the final allocation to be made to Tasmanian Seafoods under the Policy. On 25 July 2012, Dr Kung also permanently allocated all of the remainder of the held-back units amongst the other licence holders. There were no allocations to five licence holders, who presumably had missed out on initial allocations, and the allocations to the other 22 licence holders ranged in size between one and 4,650 units.
THE SCOPE OF THE CURRENT APPLICATION FOR REVIEW
The history of the present QCAT proceeding is itself a little complicated. Suffice it to say that, with the clarification brought by pre-hearing decisions made by Senior Member O’Callaghan, the scope of the present proceeding is limited to reviewing Dr Kung’s decision of 25 July 2012.
It is noteworthy that Tasmanian Seafoods has never applied for a review of Ms Slade’s decision of January 2010. It did apply, in January 2013, for a review of her September 2011 decision, but QCAT refused an extension of time in January 2013.
In legal terms, Dr Kung’s decision of 25 July 2012 was a decision of the chief executive of the Department (by a delegate) under section 63 of the Fisheries Act 1994 (Qld) to amend Tasmanian Seafoods’ licence. Tasmanian Seafoods has exercised its right under section 185 of that Act to seek a review by QCAT of the decision on the basis that it is manifestly unfair.
The issues we need to determine are, firstly, whether Dr Kung’s decision was manifestly unfair; and secondly, if it was, what decision should be made instead.
WAS DR KUNG’S DECISION MANIFESTLY UNFAIR?
Tasmanian Seafoods argues that Dr Kung should have allocated 20,048 units to correct the shortcomings of the earlier processes that had left it with a small and unviable allocation. In summary, Tasmanian Seafoods contends that it is a serious operator which has always intended to make full use of its licence. This is evidenced, it says, by various steps it took related to marketing, processing capacity, and so on. It made a large outlay, of $200,000, for a licence allowing one of the largest capacities in the fleet. Tasmanian Seafoods says the use of the Policy’s formula, relying as it does on catch history, even as modified by the Fisheries Tribunal decision, is unfair in its circumstances. It was a recent entrant which had not been in a position to secure a suitable vessel prior to the investment warning. There were significant constraints on its choice of vessel: had it temporarily used a smaller vessel, under the then Boat Replacement Policy its licence capacity would have shrunk correspondingly. When the investment warning was issued, it heeded the warning and so did not conduct fishing in the following years. In these circumstances, it argues, the allocation of only 246 units by Dr Kung was manifestly unfair. The fair approach, it argues, would have been to adopt Mr Thompson’s suggestion of a total allocation of 20,055 units.
Tasmanian Seafoods observes that one of the chief executive’s functions is to ensure the fair division of access to fisheries resources.[5] In his statement of evidence, Mr Leeworthy advances some other legal arguments, relating for example to the renewal provisions in the Act, to the Legislative Standards Act 1992 (Qld), and to the Constitution. We will not consider these arguments separately, because they are subsidiary to the principal argument that the decision under review is manifestly unfair on the facts.
[5] Fisheries Act 1994 (Qld) s 20(2)(a).
Tasmanian Seafoods also submits that Dr Kung’s decision to allocate all of the remaining held-back units on 25 July 2012 restricted its potential to successfully seek review of the decision affecting it.
Tasmanian Seafoods concedes that it has not applied to QCAT for a review of the Department’s decision of January 2010. It says this was because it lacked a clear understanding of what process was appropriate. It parted company with Mr Thompson’s firm some time during 2010. It had ‘many other operational duties’ which took up ‘the time and focus for the company’. This meant it took time to unearth documents confirming the company’s serious intent about using its licence. The company also made efforts to resolve the matter with the Department before resorting to a QCAT review.
Clearly, the outcome of the overall process is unsatisfactory for Tasmanian Seafoods. It has been left with a small allocation of units, which we accept is not commercially viable. It may be able to buy more units from other operators, but obviously the cost involved would be considerable. We understand why Tasmanian Seafoods feels it has been unfairly treated. Despite that, we do not consider, on balance, that Dr Kung’s decision was manifestly unfair.
Our role is to make the correct and preferable decision, having regard to the merits.[6] This means that we must make the decision that we think Dr Kung should have made on 25 July 2012.
[6] Queensland Civil and Administrative Tribunal Act 2009 s 20.
As at 25 July 2012, Dr Kung could have delayed making permanent allocations of the held-back units, to allow Tasmanian Seafoods a further opportunity to apply to QCAT for a review of the Department’s decision of January 2010. We accept that Tasmanian Seafoods had not applied because it was confused about the correct process, distracted by other demands of its business, and so on. But the company had been notified by the Department in January 2010 of its right to apply to QCAT. It was reminded of this right by QCAT in the July 2010 reasons, and again by Mr Groves in May 2011. It had parted company with its lawyers, but it was a well-established commercial enterprise trying to enhance the value of an asset. It should have engaged another lawyer if it needed advice.
By July 2012, two and a half years had passed since the January 2010 decision. Tasmanian Seafoods had still not applied to QCAT for a review of that decision. By that time its right to apply was subject to it being granted an extension of time because the 28 day period for lodging an application had well and truly expired. There was no guarantee that QCAT would have granted an extension of time after such a long delay, even if the Department had consented. Other operators had a legitimate interest in the allocation process being finalised for the sake of certainty about their allocations, and so that they would gain a full complement of tradeable permanent units instead of a mix of permanent units and non-tradeable temporary units. On balance, we consider the preferable course was to finalise the allocation process for the fishery, notwithstanding Tasmanian Seafoods’ indication that it was still interested in applying to QCAT if necessary.
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 section 63 of the Fisheries Act. But that does not mean that government policy should be ignored. It plays an important role in fostering consistency in decision-making. In Drake & Minister for Immigration and Multicultural Affairs,[7] Justice Brennan said that the Administrative Appeals Tribunal should ordinarily follow government policy, unless there is a cogent reason in the particular case (such as injustice being produced by the application of the policy) to do otherwise. We consider that the same approach should be taken by QCAT.
[7] [1979] AATA 179.
The Policy was designed to allow the orderly allocation of units. Clearly, 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. 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 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. Any remaining held-back units would then be allocated in the same proportions as the permanent allocations up to that point.
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 at the final stage would give licence holders disappointed with their initial allocations, as adjusted by any reconsiderations or tribunal variations, another ‘bite at the cherry’. It would further hold up final allocations. If special circumstances were up for consideration again, there could be a drawn-out process of further reconsiderations and reviews. Once permanent allocations of all units have been made, further adjustments become 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 licence holder, or holders, potentially triggering further reviews. Perhaps the Department could enter the market to buy units for a licence holder found to have been unfairly treated, as Tasmanian Seafoods has suggested would be one solution in its own case, but that should not be the routine task of a regulatory body allocating quotas.
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.
While it is legally open to us, as it was to Dr Kung, to depart from the Policy at the final allocation stage, we do not believe there is a cogent reason to do so in this case. Tasmanian Seafoods had been given and had taken opportunities to explain its equity concerns to the Department and the Fisheries Tribunal. It was informed of its right to apply for a review by QCAT of the January 2010 departmental decision implementing the Fisheries Tribunal decision. Had it 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). But Tasmanian Seafoods did not avail itself of that opportunity. 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.
CONCLUSION
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, we consider that the correct and preferable decision is the mathematical approach to the final allocations suggested by the Policy. This is what Dr Kung did, and so we confirm his decision.
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