Warrick & Anor v South Australia

[2004] HCATrans 133

[2004] HCATrans 133

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A244 of 2003

B e t w e e n -

SHANE WARRICK

First Applicant

SOUTH AUSTRALIAN RIVER FISHERIES ASSOCIATION INC

Second Applicant

and

THE STATE OF SOUTH AUSTRALIA

Respondent

Application for special leave to appeal

GLEESON CJ
GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 30 APRIL 2004, AT 12.05 PM

Copyright in the High Court of Australia

MR P.A. HEYWOOD-SMITH, QC:   I appear for the applicants.  (instructed by Coates PL)

MR C.J. KOURAKIS, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear with my learned friend, MR C. JACOBI, for the respondent.  (instructed by Crown Solicitor for the State of South Australia)

GLEESON CJ:   Yes, Mr Heywood-Smith.

MR HEYWOOD-SMITH:   If the Court pleases, I intend to spend just a few moments in respect of the legislation in this case, the Fisheries Act 1982, before saying a few words about the facts and the circumstances surrounding the passage of the delegated legislation and then going on to the principles. I think that the Court has received a copy of the Act and the scheme of management for the river fishery. If I could ask the Court to briefly turn that up and to go to page 25 of the Act. The first section that I would ask the Court to note is section 36(1), by which:

an application –

(a)      for a licence shall be determined by the Director subject to and in accordance with the provisions of the scheme of management –

Section 37 is a significant section for the purposes of this application.  At the bottom of page 25 – and I must apologise, but I believe that the last line of that page may be omitted from the copy which the Court has.  I will read section 37(1):

Subject to subsection (2a), the Director may upon granting a licence, or at any other time, impose a condition of the licence, being a condition –

(a)      directed towards conserving . . . 

(b)      related to any other matter –

relevant to the scheme.  Then by (1a) significantly:

The Director may impose a condition of a licence notwithstanding that the effect of the condition is to prevent for a specified period –

(a)the taking of one or more species of fish . . . 

(b)the use of any device or equipment –

Those are the two matters that by regulation occurred here.  Subsection (2):

the Director may, at any time, revoke or vary a condition of a licence.

(2a)     The Director must not –

impose conditions, or vary conditions -

except with the approval of the Minister.

(2b)     Before giving his or her approval under subsection (2a), the Minister must –

do certain things, including:

(a)      give the holder of the licence and the prescribed fishing industry body notice in writing setting out the condition to be imposed . . . and

(b)      not later than 14 days after giving notice, consult or use his or her best endeavours to consult with the holder of the licence and the prescribed fishing industry body in relation to the matter.

And:

“prescribed fishing industry body” means –

it was then defined to include:

(a)      the South Australian Fishing Industry Council; or

(b)      if the Council ceases to exist –

I can tell the Court that at all material times the Council was in existence.

Section 43, I would simply ask for the Court to note is at page 29 whereby the Minister can deal with unforeseen exigencies by temporarily prohibiting the taking of certain fish.  Section 46 was a significant section for the purposes of this matter.  It is a regulation‑making section and provides, and again I apologise and must read the last line on this page, I believe:

The Governor may make regulations for the conservation; enhancement and management of the living resources of the waters to which this Act applies, the regulation of fishing and the protection of certain fish, and without limiting the generality of the foregoing, may by such regulations –

(a)      declare that any prescribed class of fishing activities constitutes a fishery;

(b)      prescribe a scheme of management -

and then goes on to indicate, in a multitude of ways, how the fishery might be regulated. Section 58 on page 47 provides for a right of appeal on the merits to the District Court in South Australia from certain decisions including:

(a)      by a decision of the Director refusing an application for an authority or the transfer of an authority or imposing or varying a condition –

in other words, any of the decisions made adversely to a licence‑holder in section 37.  The only other section that I would ask the Court to note is section 72 which is the general regulation‑making power and that is at page 54.

Now, what the Act does not do is to make explicit provision for the removal of a fishery once established.  In this particular case, we are concerned with what is known as the River Murray Fishery, a fishery that extended from the New South Wales border to the mouth of the river and created some 30 reaches for 30 licence-holders covering about a third of the river.  The Act does not make an explicit provision for the removal of a fishery once established, or the loss of a licence other than in the ways upon which a right of appeal to the District Court applies.

I have included the scheme of management.  I do not need to take the Court to it.  Regulation 9 provides for the renewal of annual licences.  Regulation 10A makes provision for transfer.  I will come to that in a moment.  The facts appear in paragraph 10 of the summary of argument to the extent that the facts have not been accepted by our learned friends.  I can assure the Court that the facts there were included in compliance with the directive of this Court in Hancock Family Foundation v Porteous (2000) 74 ALJR 1536. The facts that appear there are facts found by the trial judge. They may not have been relied upon by the Full Court that took a particular view of the matter, but they were facts found and not overturned by the court.

The background to the matter is this.  In 1997, following successful negotiations with the government with a view to reorganising the commercial fishery rights in the river, which negotiations had occurred over two years through an industry committee, there was agreement that 39 licence-holders at that time would reduce their number to 30 and in consideration, therefore, they would obtain a transferable licence.  Pursuant to the scheme at that time, commercial fishers were permitted to take Murray cod and callop and they were permitted to use gill and bait nets.  Both the fish and the equipment were found by his Honour to be essential for the commercial viability of the fishery.

The government complied with its end of the bargain by including regulation 10A in the scheme of management, and the 30 remaining licence-holders paid some $450,000 to the nine who left.  At the time, the Minister, by media release, announced that the agreement would allow holders of the fishing reaches a solid business base with a secure future so they can adequately invest in upgrading their operations.

In 2002, the government amended the fishing regulations so as to exclude Murray cod and callop from the species allowed to be taken by commercial fishers and to prohibit the use of gill and bait nets. The effect was to, de facto, abolish the fishery. The decisions were made without consultation with the fishers or with the prescribed fishing industry body, and in a way so as to avoid the provisions of section 58 of the Fisheries Act, which guaranteed them a hearing and a District Court appeal.  I would ask the Court to go to page 52 of the application book, and to note the comment of the trial judge at line 20:

It would be curious if by variation to the regulations the Government could avoid scrutiny by the District Court of the removal of gill nets as available devices.  It may be assumed that if a change had been made to the licence conditions an appeal to the District Court would have been likely to succeed; the Departmental advice acknowledges this fact.

That departmental advice was in evidence.  These regulations were enacted in circumstances where the sustainability of the resource was not an issue, and no provision for compensation was offered by the amending regulations despite an ex gratia offer being made unconnected with the regulations.

GLEESON CJ:   Is the central issue that that was stated on page 73 of the application book in paragraph 9?

MR HEYWOOD-SMITH:   That is not the central issue of this application.  It is one of the, effectively, two special leave points.  Certainly we say that the approach that his Honour took by using section 39 of the Acts Interpretation Act really addressed the ultra vires issue in a particular way.  We would defend the interpretation that his Honour made of section 39, but our submission is that there is a more central special leave point than that, which I will come to.

Can I just conclude the factual summary?  This Court will probably be aware that in February 2002 there was an election.  Neither major party had the capacity to form a government without assistance from an independent.  Mr Lewis put forward a compact for good government, which included a requirement that the commercial fishery in the river be abolished.  The trial judge identified the compact as “the only reason for the government’s action was to honour its terms in the political compact”.  The Chief Justice on appeal agreed with that or said that his Honour was quite entitled to so find.

The circumstances against which these regulations were made, we say can be summarised as follows.  The regulations were directed at the River Murray Fishery.  The applicants had recently expended considerable sums on the faith of an agreement with the government which was stated to offer them a secure future.  The effect of the regulations was to bypass the provisions of the Act, which afforded them an opportunity to be heard in a matter that affected their property and economic rights and denied them the right of appeal to a court.  The effect of the new regulations was to destroy the commercial viability of the commercial fishing and render their licences valueless.  The government in 2002 knew all of these things and, nevertheless, passed regulations which did not carry with them any right to proper redress for rights destroyed, that being done without consultation with either the licence-holders or the prescribed industry body and against a background of there being no demonstrated sustainability issues.

In the lower courts, one of the bases for challenge of this delegated legislation was an unreasonableness test, per se.  It is submitted by the applicants that the case of Brunswick Corporation v Stewart (1941) 65 CLR 88 acknowledges such test and it is expressed by Justice Starke as being unreasonable in the sense that it is “so oppressive or capricious that no reasonable mind can justify it” and by Justice Williams as “such oppressive or gratuitous interference with the rights of those who are subject to it as could find no justification in the minds of reasonable men”.

Now, our learned friend, we note in the reply, suggests that the reasonableness test has been considered by this Court on numerous occasions.  Can I just briefly tell the Court what we say is the history.  In 1933 the High Court in Williams v Melbourne Corporation addressed the issue of validity of delegated legislation and Justice Dixon expressed the test in a way which has subsequently, we say, been developed into what we have described as the proportionality test.

In 1941, when Brunswick Corporation v Stewart was heard, his Honour had left the Court for a time and the Court was comprised of Justices Rich, Starke and Williams.  Our learned friends refer the Court to King Gee Clothing v Commonwealth in 1945 when his Honour Justice Dixon had returned to the Court.  His Honour there expresses a view obiter that there is no such thing as the unreasonableness test per se, but Brunswick v Stewart is not referred to by any of the judges in that decision.  It is not apparent that it was even cited to them and my research has led me to believe that the decision has not been the subject of comment by this Court since.

Now, the acknowledgement of the existence of an unreasonableness test per se, we say, apart from the learned textbook authors in Pearce & Argument who devote a chapter to the topic, Chapter 21; Justice Lockhart in the Austral Fisheries Case (1993) 112 ALR 211 at 214 - they express it is such a case. Your Honour Justice Gummow in the Dover Fisheries Case (1993) 116 ALR 54 at 64, when your Honour was on the Federal Court, acknowledges the existence of such a case and it is our submission that the applicant is entitled to approach this Court and say that at least until this Court says otherwise an unreasonableness test per se exists.

If that is the case, then, in our submission, it is difficult to say what matters can be excluded from the consideration as to what is unreasonable.  Here, we say that there was a legitimate expectation, a legitimate expectation by the licence-holders that if their licences were to be removed in the circumstances of the history, particularly the negotiations prior to 1997, it would be done with procedural fairness, which if it did not ‑ ‑ ‑

GUMMOW J:   Is there a finding about that by the primary judge?

MR HEYWOOD-SMITH:   About ‑ ‑ ‑

GUMMOW J:   As to the expectation?

MR HEYWOOD-SMITH: No, there is not, not specifically, although the passage that I - I do not believe that he did. I think that I am right in saying I do not think he made a specific finding. But in our submission, there would be entitled to be inferred a further legitimate expectation, if not that their licences would only be removed in circumstances that gave rise to a section 58 appeal, then at least in circumstances where, if the statutory procedure was to be availed of to bring about this effect that procedural fairness would require that at least the Minister consult with the licence‑holders and the industry body that it would otherwise consult with under the alteration of conditions under section 37.

Now, there is a subsidiary question, we say.  If unreasonableness is unconfined then we would suggest that there is no reason why it would be not impacted upon by international human rights instruments.  We refer the Court to, obviously, the Universal Declaration of Human Rights, clause 17.2 that, “No one should be arbitrarily deprived of his property.”  We say that that ‑ ‑ ‑

GUMMOW J:   What is the property here?

MR HEYWOOD-SMITH:   The property is the rights associated with the licence, and in our submission, I think we have included in our summary of argument the authorities which address the nature of the rights of a licence of this sort, Harper v Minister for Sea Fisheries, so that we say that it would be appropriate, in terms of a standard of unreasonableness, to have consideration to those matters.  The proper purpose was raised - I do not really have the time to address that.  It is not a special leave point, but if leave were to be granted it would be appropriate, we say, for it to be heard because it could be encompassed within what is reasonable.  I might also say ‑ ‑ ‑

GUMMOW J:   Wait a minute, it may be that these notions of unreasonableness are no more than a subspecies of improper purpose.

MR HEYWOOD-SMITH:   Well, it may be, but there is no reason to ‑ ‑ ‑

GUMMOW J:   What do you say is the content of this unreasonableness notion, at large, what is its content?

MR HEYWOOD-SMITH:   Well, it is hard to know what the content is on the authority of Brunswick v Stewart.  There is nothing which is excluded from the consideration, we say.  The proportionality test, of course, focuses on a different issue which is the exercise of the power and whether the regulation is reasonably adapted to the particular end of power.  We say that the unreasonableness per se is not so confined.

GLEESON CJ:   Thank you, Mr Heywood-Smith.  Yes, Mr Solicitor.

MR KOURAKIS:   If the Court pleases, in my submission, ultimately unreasonableness is just another form of ultra vires.  There is unreasonableness if there is no real exercise of the power.  The court below accepted the existence of a separate test of unreasonableness ‑ ‑ ‑

GUMMOW J:   Where do they do that?  Where do we see that?

MR KOURAKIS:   They dealt with it, firstly the Chief Justice at application book 93 from paragraph 118.  There was not a separate consideration of it, if your Honours please, but the discussion proceeds on the acceptance of that form of challenge, however, it finds that it is not made out on the facts of the case in the judgment of his Honour Justice Gray at application book 122, from paragraphs 215 through to 218.  They are, in fact, dealt with together.  They have the relationship referred to by your Honour Justice Gummow that in the end they come down to a question as to whether the power was properly exercised.

Your Honours, in this case, the purpose of the regulations in the sense of the effect that the regulation was calculated to achieve was a purpose only related to fisheries management and, therefore, within power.  The wisdom of it was open to political discussion and there was much discussed in the lead‑up to the making of the regulations in this case, but as much as minds might differ about the wisdom of the particular amendment to the fisheries management that those regulations effected, it remained plainly an exercise within power.

GUMMOW J:   Justice Besanko dealt with it, perhaps best, at page 125, paragraph 227, with reference to what we had said in Tanner.

MR KOURAKIS:   Yes, and his Honour either cited that passage and leading on to application book 126 refers to the arguments either side as to whether gill nets should be used or not as to whether the particular fish ‑ ‑ ‑

GUMMOW J:   Yes, exactly.  That being the state of affairs, the added circumstance that there were political motives involved, you say is irrelevant.

MR KOURAKIS:   Yes, and, in fact, the argument seems to confuse motive and purpose.  Purpose invites attention to the effect that is sought to be achieved, not just the legal effect but the practical effect flowing from the legal effects of the decision.  The regulation affected fisheries in the Murray.  The reason for it included the pact with Mr Lewis.  There were also, as it turns out, many other people who were advocating for that change and good policy reasons to make it.  The precipitating motive, if you like, for exercising the power should not be confused with the purpose, the end sought to be achieved.  All of their Honours below found clearly that the end sought to be achieved, not just the legal effect, but the practical operation of the regulation, was one within the scope of the enabling statute ‑ ‑ ‑

GUMMOW J:   What do you say about legitimate expectation?

MR KOURAKIS:   In my submission, a legitimate expectation has no place to play within the question of reasonableness.  It attempts in the way in which it has been put by the applicants, attempts to give legitimate expectation a substantive right, and in my submission that is not so.  Any suggestion that within the area of procedural fairness, legitimate expectation could be elevated to achieve such a substantive right has been rejected in Australia.  My learned friends attempt in their argument ‑ ‑ ‑

GUMMOW J:   But he also says his clients should have been given a hearing, does he not?

MR KOURAKIS:   There was not an argument that they were denied a hearing, they were consulted.  The argument that is put in the summary of argument is that the legitimate expectation affects the content of reasonableness and it is said that they had a legitimate expectation not to be heard in the event that there might be a change, but that they had a legitimate expectation that their licences would continue in perpetuity.

It is said that that expectation then limits the scope of the Minister’s legislative power.  In my submission, it is simply an impossible notion to allow the expectations of private individuals to affect the breadth and content of a statutory power, but that is the argument that they appear to make.  That particular argument is expressed in that way, that is, a legitimate expectation to a substantive right in paragraph 12 of the applicant’s summary of argument.

Your Honours, as to the other question which is agitated in the application, the construction of section 39, that matter is dealt with in paragraphs 100 to 105 of the Chief Justice’s reasons and paragraphs 196 and 197 of Justice Gray’s reasons.  The section itself can be found at application book 85 in paragraph 70.

Your Honours, my learned friend made the submission that there was no express power in the Fisheries Act to vary the scheme of management regulations.  It is section 39 which gave that power and gives the power to vary and revoke regulations generally.  There is only one proviso to what is the very plain and wide terms of the power.  That proviso appears at the foot of page 85.  It reads that:

unless the terms used in conferring the power, or the nature of the subject matter or the objects of the power, indicate that it is intended to be exercised either finally in the first instance or only subject to certain restrictions.”

Their Honours, Chief Justice Doyle and Justice Gray in the passages to which I have referred, found that the reference there to subject matter of the objects of the power is a reference back to the enabling statute, in this case the Fisheries Act.  Your Honours have been taken to section 46.  The power there is in the widest terms.  It must envisage the making and varying of

schemes depending on the circumstances that affect the fishery at any particular time.  If the Court pleases, there are no other submissions.

GLEESON CJ:   Thank you, Mr Solicitor.  Yes, Mr Heywood-Smith.

MR HEYWOOD-SMITH:   Just a couple of points, if the Court pleases.  With respect, we say our learned friend is wrong to suggest that the Full Court dealt with an unreasonableness test per se.  Justice Doyle in paragraph 118, application book 93, addresses only the proportionality test.  Justice Gray at paragraph 215, application book 215, addresses only the proportionality test.  In our submission, Justice Besanko at paragraph 227 that your Honour Justice Gummow referred my friend to at application book 227 also addresses only a proportionality test and this, I can assure the Court, despite the fact that in the lower court the tests were separately advanced.

Can I also suggest that the distinction that our learned friend seeks to draw between motive and power is one which really has nothing behind it when the Court considers what is being submitted.  In our submission, a reading of Toohey’s case does not suggest that there is any such distinction.

Finally, it was suggested, perhaps in an oblique way, by my learned friend that the licence-holders and the industry body were consulted prior to the regulations.  Can I ask the Court to go to application book 13 and to paragraph 42.  Here his Honour deals with the history of the developments leading up to the regulations and he says:

On 7 June 2002 the Minister held a meeting with the licence holders in the Fishery and explained that the compact with Mr Lewis had altered the timeframe (10 years) previously recommended by the Parliamentary ERD Committee . . . 

The Minister provided each licence holder with a memorandum.

The memorandum then sets out exactly what happened.  The evidence was clear that there was no opportunity given prior to this meeting to the licence-holders or to the industry body prescribed by the Act to have any impact in that decision which was presented as a fait accompli.  If the Court pleases.

GLEESON CJ:   Thank you.

The Court is of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave.  The application is refused with costs. 

We will adjourn now until 2.00 pm.

AT 12.37 PM THE MATTER WAS CONCLUDED