Young and Anor and Secretary, Department of Agriculture Fisheries and Forestry
[2004] AATA 59
•23 January 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 59
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/993
GENERAL ADMINISTRATIVE DIVISION ) Re BARRY YOUNG AND PIONEER SEAFOODS PTY LTD Applicants
And
SECRETARY, DEPARTMENT OF
AGRICULTURE FISHERIES AND FORESTRY
Respondent
DECISION
Tribunal Mr O Rinaudo, Member Date23 January 2004
PlaceBrisbane
Decision The Tribunal sets aside the decision under and in substitution therefor the Tribunal decides that the applicants are fit and proper persons in respect of the Prescribed Goods (General) Orders 1985.
...................(Sgd).......................
O Rinaudo
Member
CATCHWORDS
FISHERIES – regulation – export – registration of establishments - cancellation - whether applicants are fit and proper persons – meaning of “fit and proper persons” - applicants had used a prohibited substance on exported fish – criminal proceedings taken by State and Commonwealth authorities – applicants leading exporter and expert in the field – valuable contributions made to the community and industry – level of criminality involved – contrition – applicants unlikely to re-offend – decision set aside
Exports Control Act 1982, s 25
Exports Control (Orders) Regulations 1982
Prescribed Goods (General) Orders 1985, Part 5Veterinary Chemical Administration Act 1992
Chemical Usage (Agricultural and Veterinary) Control Act 1988
Penalties and Sentences Act 1992 (Qld), s 12Agricultural and Veterinary Chemicals Administration Act 1992, s 60
Drake v Minister for Immigration and Ethnic Affairs (1978) 46 FLR 409
Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99
Re Furnari and Secretary, Department of Social Security (1989) 17 ALD 293Re Wilco Meats Pty Ltd and Secretary, Department of Agriculture, Fisheries and Forestry (1999) 59 ALD 214
Hughes and Vale v The State of New South Wales (1955) 93 CLR 127
Petrocaro v Consumer Affairs (1994) 62 SASR 387
Re Percival and Australian Securities Commission (1993) 30 ALD 280
Re SRH and Comptroller-General of Customs (1995) 37 ALD 581
Re Control Customs Pty Ltd v Chief Executive Officer of Customs (2002) 64 ALD 461
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
McDonald v Director-General of Social Security (1984) 1 FCR 354
Taylor v Minister of State for Health (1989) 23 FCR 53
Casaratta v Australian Postal Commission (1989) 86 ALR 399REASONS FOR DECISION
23 January 2004 Mr O Rinaudo, Member Decision under Review
1. By letter dated 6 September 2002, the delegate of the Secretary of the Department of Agriculture, Fisheries and Forestry Australia informed the applicants that, for the reasons attached to that letter, the delegate had decided to revoke the export registrations of all premises registered in the name of Pioneer Seafood Pty Ltd and of the applicant Barry William Young. The applicants sought review of this decision and, on 24 October 2002, the Deputy Secretary made the following determinations:
(a)Mr Barry William Young is not regarded as being a fit and proper person in accordance with Order 47 of the Prescribed Goods (General) Orders;
(b)Pioneer Seafoods Pty Ltd is not regarded as being a fit and proper person in accordance with Order 47 of the Prescribed Goods (General) Orders; and
(c)that the registration for establishments 3143 at Gladstone, 3177 at Bowen and 7660 at Mackay occupied by Pioneer Seafoods Pty Ltd be revoked pursuant to Order 43 of the Prescribed Goods (General) Orders.
2. The applicants made application to the Administrative Appeals Tribunal for review of these decisions on 12 November on the following grounds:
(i)the decisions are wrong and unreasonable having regard to the merits of the matter;
(ii)the decision imposes penalty out of proportion to the gravity of any breaches committed.
The Role of the Tribunal
3. This review is governed by section 43(1) of the Administrative Appeals Tribunal Act 1975 which provides:
“For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:
(a)affirming the decision under review;
(b)varying the decision under review; or
(c)setting aside the decision under review and:
(i)making a decision in substitution for the decision so set aside; or
(ii)remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.”
4. The role of the Tribunal on review was considered in Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99 at 106, where Merkel J noted:
“When reviewing an administrative decision under section 43(1) the AAT stands in the place, and is empowered to exercise all the relevant powers and discretions, of the decision-maker in respect of the decision under review. The AAT hears the matter de novo in the light of the evidence placed before it.”
5. Bowen CJ and Deane J observed, in Drake v Minister for Immigration and Ethnic Affairs (1978) 46 FLR 409 at 419, that:
“The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before it. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.
Putting to one side the possible different case of a decision-maker who has special expertise, the AAT is neither entitled nor required to place weight upon the fact that the original decision-make had exercised her or his discretion in a particular way: see Colins at 412.”
6. Further, Senior Member Gibson in Re Furnari and Secretary, Department of Social Security 1989-90 17 ALD 293 at 294 noted:
“In the exercise of its functions of review the Tribunal is not confined to material which was before the primary decision-maker or to events which occurred up to the time of the primary decision; Commonwealth of Australia v Ford (1986) 9 ALD 433 at 437-9.”
Decision
7. The decision of the Tribunal in this application is to set aside the decisions made by the Deputy Secretary on 24 October 2002 and instead substitute the following decisions:
§that Barry Young is a fit and proper person in accordance with Order 47 of the Prescribed Goods (General) Orders; and
§that Pioneer Seafoods Pty Ltd is a fit and proper person in accordance with Order 47 of the Prescribed Goods (General) Orders.
History
8. The history of this matter can be shortly stated. Mr Barry William Young, one of the applicants, is the Managing Director of Pioneer Seafoods Pty Ltd, the other applicant. Mr Young and his wife are the sole directors and shareholders of the company. Pioneer Seafood Pty Ltd was incorporated in Queensland on 6 October 1987.
9. Mr Young has been a fisherman for over thirty-one years. He says he is a third generation fisherman. Mr Young expanded the business of Pioneer Seafoods Pty Ltd by finding markets in Hong Kong and China. Pioneer Seafoods Pty Ltd is a company which exports seafood including frozen prawns, scallops and live fish. The company is said to have a turnover of approximately $30m and to employ in excess 200 staff.
10. Mr Young became aware of a substance which he knew as “yellow powder” in his dealings with fish traders in Hong Kong and China. He became aware that “yellow powder” was extensively used in Hong Kong, Japan, the Philippines, Indonesia and America. The substance is expressed to be an external wash in the treatment of skin damage and other infections in live fish.
11. Mr Young became aware that by treating his live fish with this substance he was able to obtain a better rate of survival and a higher price for his fish in the Asian markets to which he supplied. He began bringing “yellow powder” to Australia to use on his live fish in Australia.
12. In about December 1997, his importation of “yellow powder” became known to the Australian Quarantine Inspection Service at the Cairns Airport. He was required to leave the substance with the AQIS officer for testing but was later invited to pick up the “yellow powder” which he did.
13. In about May 1998, an AQIS officer wrote to Pioneer Seafoods Pty Ltd advising that the substance was a banned substance and should not be used. Notwithstanding that Mr Young acknowledged receiving this advice, he continued to use the substance on his live fish exports to his Asian markets in Hong Kong and China. The “yellow powder” was identified as a banned substance known as sodium nifurstyrenate. It was reported in the notice that:
“…scientific evidence indicates that sodium nifurstyrenate has a potential to cause cancer in humans and can be toxic when swallowed, inhaled or comes into contact with the skin. Prohibited chemical substances such as sodium nifurstyrenate and nitrofurazone must not be used as a treatment for fish under any circumstances.”
14. Raids were carried out on the premises of Pioneer Seafoods Pty Ltd by AQIS officers and by officers of the Animal and Plant Health Service (State). As a result of these raids and subsequent investigations, charges were laid against Mr Young and Pioneer Seafoods Pty Ltd in respect of the importation and use of the banned substance.
15. Four charges were brought by the State Authorities against Mr Young and Pioneer Seafoods Pty Ltd, which were heard and determined by the Magistrates’ Court on 2 May 2002. Both defendants entered pleas of guilty to the charges. On this occasion the Court fined Pioneer Seafoods Pty Ltd $8,000 and Mr Young $4,000 and ordered that $245 be paid by each of them in respect of costs. The Magistrate also ordered that no convictions be recorded.
16. A further charge was brought by the Commonwealth authorities on 10 May 2002. Mr Young pleaded guilty on behalf of the company to importation of a veterinary chemical product known as albaziu, a chemical product neither registered or exempt under the Veterinary Chemical Administration Act 1992 (albaziu contained sodium nifurstyrenate). A conviction was recorded and the Magistrate fined the company $6,600.
17. On 13 May 2002, the Manager, Corporate Assessments and Review, Department of Agriculture, Fisheries and Agriculture Australia, wrote to Mr Young personally and on behalf of the company requesting them to show cause why their export registration licences should not be revoked.
18. After consideration of the relevant material, the decision under review was made by the Deputy Secretary of 24 October 2002.
19. At the hearing of the application the following exhibits were tendered:
§Exhibit 1 The T documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
§Exhibit 2 Statement of Barry Young
§Exhibit 3 Four photographs – Gladstone Business
§Exhibit 4 Four photographs – Bowen Business
§Exhibit 5 Two photographs – Cairns Business
§Exhibit 6 Two photographs – Brisbane Business
§Exhibit 7 - Two photographs – shop Hong Kong
§Exhibit 8 One photograph – Yuan-Tin, China
§Exhibit 9 One photograph – vessel Pioneer Seafoods
§Exhibit 10 Four photographs Gzhaung, China
§Exhibit 11 Bundle of letters
§Exhibit12 Transcript – Conversation Michael Potts and Barry Young
20. Mr Young was called and gave evidence. Evidence was also given by Mr Stephen Watson.
Legislative Framework
21. The Exports Control Act 1982 provides in section 25 for the making of regulations. Pursuant to the Exports Control (Orders) Regulations the Prescribed Goods (General) Orders 1985 (PGGO) were made. Part 5 of the PGGO sets out the procedures for registering establishments in accordance with the orders. Order 43 sets out the grounds for revocation of the registration of an establishment and provides insofar as it is relevant to this application as follows:
“Where there are reasonable grounds to believe that:
…
(g)any of the following persons ceases to be deemed to be fit and proper in accordance with Order 47:
(i)where a body corporate is specified in the certificate of registration of an establishment as the occupier of the establishment, that body corporate or a person who managers or controls the operations carried on at that establishment by the body corporate:
…
(iii)in any other case the occupier of the establishment; the secretary may by instrument in writing, revoke the registration of the establishment in respect of one or more of the export operations from which the establishment is registered.”
22. Order 47 sets out the requirements for determining whether a person is a fit and proper person and provides:
“47.1 The Secretary may determine whether a person is regarded as being a fit and proper person for the purposes of the Act or regulations or orders made under the Act, having regard to:
(a)subject to Part VIIC of the Crimes Act 1914, whether the person has been convicted of an offence against the Act or against any other law of the Commonwealth or a law in force in a State or Territory; and
(b)whether the person, either alone or jointly with another person, owes to the Commonwealth any amount by way of:
(i)a fee for a service performed at a registered establishment; or
(ii)a charge or levy arising under a law of the Commonwealth; or
(iii)a penalty for failure to pay a charge or levy arising under a law of the Commonwealth; and
(c)whether the person has, either alone or jointly with another person, failed to pay any fee, charge, levy or penalty of that kind within 30 days after the due date for payment; and
(d)whether the person has made a false or misleading statement:
(i)in any application or notice under the Act, or under regulations or orders made under the Act; or
(ii)otherwise, either orally or in writing, in relation to operations, or proposed operations, at a registered establishment, or a proposed registered establishment, or in any way relating to the export of prescribed goods; and
(e)whether the person has contravened any other notice, instruction, condition or restriction under the Act, or under regulations or orders made under the Act; and
(f)whether the person, either alone or jointly with another person:
(i)has been refused a licence, permit or approval to export prescribed goods; or
(ii)has been granted a licence, permit or approval to export prescribed goods which has been revoked, suspended or cancelled; and
(g)any other relevant matter in relation to the person; and
(h)whether an associate of the person would not be regarded as a fit and proper person for the purposes of the Act, or regulations or orders made under the Act, having regard to the matters referred to in paragraphs (a) to (g) (inclusive).”
Submissions
23. The applicants were represented by Mr Hack of Counsel and the respondent was represented by Mr Flanagan of Counsel. Each provided the Tribunal with written submissions and made oral submissions to the Tribunal. Counsel for the applicants noted that, on a proper consideration of Order 47.1, the Tribunal should bear in mind that the specific use of the conjunctive “and” requires the decision-maker to have regard to eight different matters. It is only after a consideration of all eight matters that the Tribunal should consider whether the person is a fit and proper person or not.
24. In this case the Counsel for the applicants noted that the applicants were not indebted to the Commonwealth, had not failed to pay any outstanding fees, had not made any false or misleading statements and had not contravened any notice, instrument or restriction under the Act, nor had they been refused a licence. Accordingly there was only one element of Order 47 that had been breached. That is the conviction of an offence referred to in paragraph (a).
25. In those circumstances it was submitted that, in the exercise of discretion, the only proper decision is that the applicants are and remain fit and proper persons.
26. Counsel for the applicant then listed fourteen reasons why the Tribunal should regard the applicants as fit and proper persons:
Mr Young’s personal background
It was highlighted that Mr Young has been a fisherman for some 31 years who started from humble beginnings with one fishing boat in 1984 to create a company which has outlets in Gladstone, Brisbane, Bowen, Mackay, Cairns, Hong Kong and China with a turnover of approximately $30m per year.
Contribution to the Economy
It was noted that Mr Young employs in excess of 200 persons in his various factories and is the largest operator in the Queensland retail fish market currently purchasing approximately 40% of Queensland’s live fish for export.
Penalty out of Proportion to Conduct
It was noted by Counsel for the applicant that if the registration of the plants in Gladstone, Bowen and Mackay are revoked this will ruin the applicant’s business. Counsel noted the Court appearances and fines imposed by the two Magistrates in respect of charges brought both by State and Commonwealth Authorities. Counsel noted that the stress of the circumstances surrounding the charges had caused his marriage to suffer and break down. Counsel noted that “while Mr Young and his company have acted illegally and wrongly, when all is taken into account they have been severely punished. The conduct of Mr Young and his company, whilst being wrong, is not of such criminality to require the total destruction of Mr Young’s business”.
Conduct of Business Affairs
Counsel noted that a significant number of persons with whom Mr Young has had business dealings have provided references and these are contained in the T documents.
Benefits to Australians
Counsel noted that the applicant company is 100% Australian owned and operated. Counsel made reference to the comment by the Magistrate who convicted the company on 10 May 2000 (at T8 page 75, page 22 line 8 of the transcript) where he said Australia “needs people like this defendant” in reference to Barry Young.
Lack of Criminality
Counsel noted that whilst accepting that the applicants’ conduct had been illegal there was a lack of criminality in the conduct. This was reflected in the Magistrates imposing fines at the bottom of the allowable scale of fines. There was no evidence that “yellow powder”, in fact, harmed any person. Counsel referred to the evidence provided by Ms McGuire who holds a Master of Pharmacological Science degree that, “despite the lack of data in humans, its pharmacokinetics and safety in fish has been widely studied, with concentration of drug infused tissues decreased under a detectible level after 48 hours. Based on fish exports to the antibiotic having a minimum of 7 days between exposure and their available for sale. No effects in humans ingesting the fish are predicted”.
Counsel also noted the comments of Mr Patrick Chan, Chairman of the Hong Kong Chamber of Seafood Merchants Ltd when he said “this yellow powder has been used for in excess of 30 years in Hong Kong and there has been no ill effects recorded”. Counsel submitted in the circumstances that “accordingly the best scientific information available upon the effects of sodium nifurstyrenate upon humans accords with the practical experience that the substance does not affect humans”.
Yellow Powder in wide use in Asia
Counsel noted that Hong Kong is the only market to which Mr Young exports his live fish. He noted that in that market “yellow powder” has been used for some thirty years and is lawful. Counsel noted that “it was quite absurd therefore to suggest that the use of minute quantities of yellow powder in Australia to export to a country that extensively uses yellow powder could be said to have affected Australia’s trade reputation”.
Use of Yellow Powder Elsewhere
Counsel noted that sodium nifurstyrenate was lawfully used in most countries around the world. It was only banned in America on 7 May 2002 and in the Philippines only from 2 January 2001.
No Prior Convictions
Counsel noted that the applicants had not had any prior convictions for any offence.
Mr Young has shown Contrition for his Actions
Counsel noted the applicant’s statement at paragraphs 15 and 19. Counsel noted that contrition was a difficult thing to demonstrate. The applicants had attempted on two occasions to meet with AQIS officers to demonstrate his contrition. However, AQIS officers declined to speak to Mr Young. Counsel noted “the true issue is not the existence of contrition or remorse but whether it is unlikely that there will be a lapse in the future”.
Change in Operations
Counsel noted that Mr Young has re-organised his business affairs to ensure that there are more staff employed in critical areas. He has also made it clear that the applicant company must be clean, safe and law abiding.
Length of Time in Legal Conduct and Current Circumstances
Counsel noted that the AQIS raids took place on 9 August 2000, some two years and eight months ago. Since then the applicants have continued to export live fish. It is noted that the business has been conducted lawfully and properly.
References
Some forty-nine references have been obtained on behalf of the applicants. Counsel noted that the letters established beyond any doubt that Mr Young is extremely skilled and knowledgeable in the area of live fish export. Indeed he is the leading expert in Australia. Mr Michael John Ball has over thirty years experience in the fishing industry in Queensland and in New South Wales. As he says in paragraph two of his affidavit, “there is no person in the fishing industry in Queensland or New South Wales with Barry Young’s knowledge and capability”.
27. Counsel for the applicants referred the Tribunal to the decision of Re Wilco Meats Pty Ltd and Secretary, Department of Agriculture, Fisheries and Forestry (1999) 59 ALD 214 at 222, where the Tribunal said:
“The expression ‘fit and proper’ has been the subject of considerable past judicial and Tribunal considerations. As Toohey and Gaudron JJ pointed out in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380 the expression…takes its meaning from the context, from the activities in which the person is or will be engaged and the ends to be served by those activities. …
In the instant case whether a person is fit and proper is to be determined by reference to whether the applicant and those associated with it will, or will be likely to, properly conduct their business in relation to the preparation of meat for the Australian export industry. It is clear that the Australian community has an interest in ensuring that those operating registered premises have the knowledge and ability to carry out the functions necessary to prepare and present the meat for export and will act honestly in the conduct of their business …”
And further, at page 225, the Tribunal said:
“In the instant case the Tribunal recognizes that a sufficient length of time has passed between the commission of the offence and the present to allow the opportunity for the applicant to be considered to be rehabilitated. He certainly has not committed any other like offences (or any offences at all) which, in the interim, have brought him to the attention of the authorities. By all accounts he has operated his business and personal affairs honestly and fairly.”
28. Counsel noted that the applicant in that case, Mr Anschitz, was a major figure in a meat substitution scandal in 1980. Mr Anschitz was found guilty of conspiracy to defraud, fined $30,000 and sentenced to one year of imprisonment. Such imprisonment being suspended for a period of one year. Counsel noted that Mr Anschitz conduct involved appearing at the Royal Commission and refusing to answer questions. He was convicted and fined for failing to answer questions before the Royal Commission. He subsequently absconded and failed to re-attend at the Royal Commission. He also failed to disclose that he had been convicted of failing to answer questions before the Royal Commission. He had falsely declared information when seeking re-registration. Counsel submitted that the conduct of Mr Anschitz showed far more criminality than that of Mr Young and quoted at page 227:
“The Tribunal is satisfied that Mr Anschitz is, as he has claimed in his evidence to the Tribunal, a hard working man. The Tribunal is satisfied that he was and is still considerably distressed at the trouble which he has found himself as a result of his involvement in the meat scandal as exposed by the Royal Commission. Whilst he may have sought to play down his involvement in the criminal activity associated with the meat scandal the Tribunal accepts that he is determined that he would not let friendship with Mr Boehm, influence him again in the conduct of his business affairs. …
It was abundantly clear, for instance, the vivid and enthusiastic description he gave of the work he carried out in upgrading the premises that he has a commitment to the maintenance of high standards in the industry. The Tribunal is satisfied that he has the experience and expertise as well as the financial resources to successfully direct and control the applicant’s business in the preparation of meat for export. The Tribunal is also satisfied that, whilst he may not have been forthcoming as to his detailed involvement in the commission of conspiracy offence, he, nevertheless, appreciates the seriousness of the offence and has reached a genuine determination not be involved in such activity again. The Tribunal is satisfied that the applicant and Mr Anschitz are fit and proper persons for the purposes of filling the requirements of Order 47.1 of the Orders.”
29. Counsel noted that in the present case Mr Young’s conduct is not nearly as offending as Mr Anschitz’.. However, he noted that Mr Young, like Mr Anschitz, has a commitment to the maintenance of high standards in the industry, has significant experience and expertise as well as the financial resources to successfully direct the conduct of the business of Pioneer Seafoods. Counsel noted that Mr Young now appreciates the seriousness of the offences and has reached a genuine determination not to be involved in the activity again. Counsel urged that, in the circumstances, Mr Young is a fit and proper person for the purposes of fulfilling the requirements of Order 47.1.
30. Counsel for the respondent confirmed that the proper issue for the Tribunal was whether the applicants are fit and proper persons for the purposes of Order 47 of the Prescribed Good (General) Orders 1985. Counsel sought to assist the Tribunal with the definition of “a fit and proper person” by reference to the decision in Hughes and Vale v The State of New South Wales (1955) 93 CLR 127, where, at 156-157, Dixon CJ, McTiernan and Webb JJ considered the expression in the following terms:
“The expression ‘fit and proper person’ is of course familiar enough as traditional words when used with reference to office and perhaps of vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. ‘Fit’ (or ‘idoneus’) with respect to an office is said to involve three things, honesty, knowledge and ability: ‘honesty to execute it truly, without malice, affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty he neglects it’ – Coke. When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances: R v Hyde Justices. In another such case it was decided that if in the view of the justices the security of tenure enjoyed by the proposed licencee in the premises was insufficient, that was a good ground for holding that he was not a fit and proper person to be the holder of the licence. …It is evident that under paragraph (a) of sub-section (4) the commissioner is invested with an authority to accept or reject an applicant the exercise of which depends on no certain or definite criteria and which in truth involves a very wide discretion. If guidance is sought in that paragraph of sub-section (3) which more or less corresponds, namely paragraph (c) nothing more definite will be found. What under paragraph (c) the commissioner is required to have regard to is the ‘character, suitability and fitness’ of the applicant to hold the licence applied for.”
31. Counsel noted that the expression was further considered by the High Court in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Toohey J and Gaudron JJ at page 380.
“The expression ‘fit and proper person’, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.”
32. Counsel noted that Toohey and Gaudron JJ then proceed to analyse the relevant provisions of the relevant legislation in that case to give meaning to the expression “fit and proper person”. It was submitted that regard must be had to the context in which the Secretary in the present is determining whether a person is regarded as being a fit and proper person. Counsel noted the following comments made by the Deputy Secretary, at paragraph 5.3, outlining the origins of legislative scheme:
“The origins for this legislative scheme arose from the meat substitution scandal of the early 1980s where unscrupulous operators jeopardised Australia’s food and agriculture product export trades by exporting product unfit for human consumption misrepresented as fit product. Countries receiving Australian exported food have a right to be satisfied that only persons who are regarded as fit and proper for the purposes of the export control legislation have the right to export food. The explanatory memorandum for the legislation stated that stringent controls within Australia were an essential prerequisite to maintaining export markets for primary products. It is even more important given that much of the regulatory regime for the export of food is in fact self regulation by industry. Allowing a person to continue to self regulate when they have been found not to be a fit and proper person would, in my view, be difficult to justify to our markets.”
Counsel noted that the object of the Orders was “to ensure that proper standards are maintained in the export industry”.
33. Counsel considered that the principles to be extracted from the relevant authorities were as follows:
“(a) A distinction is to be drawn between convictions for offences which directly relate to the nature of the business to be carried on pursuant to the licence or registration and convictions for offences that are not directly relevant. In News Broadcasting Limited v Australian Broadcasting Tribunal it was held that a conviction for an offence unrelated to broadcasting is not to be viewed in the same light as an offence arising directly from the holding or operation of the licence. The conviction of an unrelated offence may disclose some personal misconduct which, in turn, bears upon the professional conduct of the licensee, but it will not always be so. There are many kinds of breaches of the law which, while deserving condemnation, do not jeopardise the fitness to hold a licence or the capacity to meet the conditions and obligations of a licensee under the Act.”
34. Counsel noted the comments of Olsson J in the South Australian Supreme Court case of Petrocaro v Consumer Affairs (1994) 62 SASR 387 at page 391 where his Honour said:
“Quite clearly the nature and seriousness of previous convictions will necessarily very considerably in their importance, as well as the weighting which ought properly be attributed to them, bearing in mind the significance which those convictions must necessarily have in relation to the type of work envisaged by the particular licence sought.”
35. Counsel for the respondent submitted that insufficient time had passed between the date of conviction and the date of the decision to revoke registrations for the Tribunal to be satisfied that the applicants are now rehabilitated. Counsel noted that in the case of Re Wilco Meats, referred to by the applicant, Mr Anschitz pleaded guilty and was convicted of offences in 1990 arising out of matters investigated by the Royal Commission in 1982. His application for registration having been made in 1998. Counsel noted that in Re Wilco Meats, the Tribunal had commented that:
“…a person once considered not to be fit and proper may, over time and following showing remorse and a determination not to repeat those or other offences, at some time be regarded as rehabilitated.”
36. Counsel noted that, with a greater emphasis now placed on co-regulation, greater reliance on the integrity of those participating in the industry was required. Counsel submitted that this was not a matter of consideration of administrative conduct but rather of criminal conduct. Counsel referred to the decision in Re Percival and Australian Securities Commission (1993) 30 ALD 280 where it was noted that:
“His situation could not be equated with those who have been found guilty of gross misconduct. He has not been charged with any offence. In his view his faults are of an administrative nature. He now believes that he is much improved and that to be punished (as he understands it) for the sins of the past by deprivation for life of his former qualification as a registered liquidator, would not be a just act.”
In this case, however, Counsel noted:
“In the case the convictions being of a serious nature and being directly related to the conduct of the applicants’ export business of live fish constitutes overwhelming evidence of an absence of fitness and propriety.”
37. Counsel submitted that the matter being dealt with by the Tribunal was a decision to revoke registration not a re-application for registration. In this regard Counsel for the respondent referred to in Re SRH v Comptroller-General of Customs (1995) 37 ALD 581 where the Administrative Appeals Tribunal decided to uphold the initial decision to cancel the licence but reversed the decision refusing to re-licence. In this case Counsel submitted that it is premature for the Tribunal to accept the assurances made by Mr Young that he has taken steps to ensure that no further breaches will occur. In this regard Counsel referred to the Tribunal decision of Re Control Customs Pty Ltd v Chief Executive Officer of Customs (2002) 64 ALD 461 at 469 where it was stated:
“It is trice to say that intrinsic character does not readily change. However, if it is to be maintained there has been a change, evidence to this effect is required the same to be objectively established as a issue of fact. There has not been placed before the Tribunal any evidence as to this issue other than that of the mere passage of time. The Tribunal is satisfied that Mr Evans did not set forth the factual situation in the first corporate application and was not truthful in answers provided in the second application. The Tribunal is further satisfied that Mr Evans conducted himself contrary to the provisions of the Corporations Law even be it that he maintained he was not aware of the consequence of his conduct. He should, however had been so aware.”
38. Counsel further submitted that the issue of whether the company was a fit and proper person rested on whether Mr Young was determined to be a fit and proper person. Counsel provided authority of Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 to support this contention. In particular Counsel for the respondent noted the following passage:
“When the question is whether, having regard to its character or reputation, a company is fit and proper, the answer may be given by reference to the conduct, character or reputation of the persons by and through whom it acts or who are otherwise relevantly associated with it. The identity of the persons relevant to the character and reputation of a company will necessarily vary according to the circumstances of the company under consideration. … The question whether it is sufficient to have regard to one person or necessary to have regard to others when determining whether a company is fit and proper is one that depends on the circumstances of the company and not on any legal requirement imported by the expression ‘fit and proper’.. It follows that, in appropriate circumstances, the question of the fitness and propriety of a company to hold a commercial licence under the Broadcasting Act may be determined by reference to the conduct, character or reputation of a single person associated with it.”
39. Counsel for the respondent submitted that the applicant’s were not fit and proper persons because they had imported and used a chemical banned by the Commonwealth in 1992 and which had the potential to be procarcinogenic and mutagenic in humans. The applicants were using the chemical in four plants namely Cairns, Bowen, Gladstone and Brisbane and the use of the chemical was not a one off situation. Mr Young had admitted that AQIS had sent notices not to use certain chemicals and that he should not be using the “yellow powder”. He had ceased using the chemical at the time of the search warrants, partly because of receipt of an AQIS notice. The chemical was stored in depots in Brisbane and Cairns but was only used in Bowen and Gladstone. He knew that he should not have been using the chemical. No one had paid to have the chemical tested in Australia. The use of the chemical made a significant difference to the commercial value of live fish overseas. Mr Young did not know whether the chemical was safe or unsafe. He had been using the chemical for some years. The use of the chemical could harm Australia’s reputation as an exported of safe food. Counsel also noted it is not challenged that the European Union has closed market access to seafood products from some countries following the detection of chemicals.
40. Mr Young had shown no contrition for his actions. Counsel referred to comments by the Magistrate hearing the State charges who said:
“…But you don’t seem to be even acknowledging any degree of blameworthiness in all of this.”
Counsel submitted that:
“What is required is evidence establishing the fact that Mr Young is truly remorseful for the commission of the offence.”
41. Counsel submitted that the Tribunal should reject the contention made by the applicant that the decision imposes a penalty out of proportion to the gravity of any breaches committed. Counsel referred particularly to the statement of Deputy Secretary who said:
“A conviction and fines is imposed following the commission of offences under the relevant legislation. This decision, while ultimately flowing from the same set of facts is an administrative decision and relates to the regulation of the export of prescribed goods and is not an additional ‘punishment’ for breaches of other legislation.”
42. Counsel noted that the Deputy Secretary was not determining punishment but rather was determining whether the applicant’s continued to be fit and proper persons under the Orders. And noted that the Deputy Secretary found that:
“…because of the serious nature of the type of activity undertaken by Mr Young and the direct relationship of the safe export of food, it would be an affront to the legislative scheme put in place in 1982 (the Export Control Act 1982) and subordinate legislation) to make a finding that the relevant persons were not regarded as fit and proper but still allow them to operate a registered establishment under the Order.”
43. Counsel noted that having made a determination that the persons were not fit and proper persons led to only one conclusion and that is that the registration should be revoked. Counsel noted that the various orders all have a pre-requisite that the relevant person is a fit and proper person and referred particularly to Order 24, 27, 35, 43, 45 and 46.
44. The Counsel for the respondent made submissions rejecting the claims by the applicant in particular that “yellow powder” was used in other countries and that revocation of the registration would cause economic hardship. In this regard Counsel noted that sufficient evidence was placed before the Tribunal for the Tribunal to properly consider this issue. Counsel noted that the responsibility for proving the existence of the facts relied on by the applicant fell to the applicant. Counsel noted that a failure to produce evidence may lead the Tribunal to draw an unfavourable inference: McDonald v Director-General of Social Security (1984) 1 FCR 354 at 358 and Taylor v Minister of State for Health (1989) 23 FCR 53 at 59 and Casaratta v Australian Postal Commission (1989) 86 ALR 399 at 413. Counsel noted that there was no direct evidence to suggest the business would be ruined and submitted that the Tribunal should not rely on the bold assertion of the Major of Gladstone, Mr Peter Carones, who stated in reference:
“Pioneer Seafoods Pty Ltd is a very major business in the city of Gladstone. It is by no means an exaggeration to say that the forcing of Pioneer Seafoods Pty Ltd and Barry Young out of business will be a disaster for the community of Gladstone.”
45. Counsel further submitted that the fact that the applicants had introduced new procedures in an attempt to ensure compliance with the law and to eliminate the possibilities of further breaches of the law was irrelevant to the Tribunal’s determination. Counsel submitted that new procedures could not make a person who is not “fit and proper” into a fit and proper person.
Discussion and Decision
46. The applicants currently hold registration of establishments for the export of seafood under the Prescribed Goods (General) Orders 1985 and the Export Control (Processed Food) Orders made pursuant to regulation 3 of the Export Control (Orders) Regulations 1982. The registrations are for the applicants’ premises at Gladstone (registration number 3143), at Bowen (registration number 3177) and at Mackay (registration number 6770). Essentially this registration allows the applicant’s to export live fish out of Australia.
47. Pursuant to Order 43 of the Prescribed Goods (General) Orders 1985 where there are reasonable grounds for the Secretary to believe that certain things set out in that section have occurred, the Secretary may, by instrument in writing revoke the registration of an establishment. The revocation can apply in respect of one or more of the export operations for which the establishment is registered. For present purposes the relevant part of the section is sub-section (g) which says that if any of the persons being either a body corporate, a person who is a member of a partnership or in any other case, the occupier of the establishment ceases to be deemed to be a fit and proper person in accordance with the provisions of Order 47, then the Secretary may revoke the registration of the establishment. Order 47.1 as set out above provides that the Secretary may determine whether a person is regarded as being a fit and proper person for the purposes of the Act or Regulations or Orders having regard to a number of issues. In this case paragraph (a) relating to a person having been convicted of an offence against the Act is met. Paragraph (b) whether any person owes the Commonwealth fees and levies is not applicable. Paragraph (c) which relates to persons failing to pay fees, levies or charges within 30 days after the due date for payment is also not applicable. Paragraph (d) which relates to persons having made false or misleading statements is again not applicable in this case. Paragraph (e) relating to whether a person has contravened any other notice, instruction, condition or restriction under the Act or under Regulations or Orders made under the Act is also not applicable. Paragraph (f) relating to refusing of a licence or revocation, suspension or cancellation of a licence is again not relevant in this case. Paragraph (g) is relevant and will be further discussed. Paragraph (h) relating to associates of persons not being regarded as fit and proper persons is not applicable in this case.
The Convictions
48. Before the Magistrates’ Court in Brisbane on 2 May 2002, Mr Young pleaded guilty on his own behalf and on behalf of Pioneer Seafoods Pty Ltd to charges brought the Department of Primary Industries (State) in respect of four charges under section 8 (with respect to the company) and section 30A (in respect of Mr Young) of the Chemical Usage (Agricultural and Veterinary) Control Act 1988 for the use of a unregistered chemical (sodium nifurstyrenate). After lengthy submissions both from Counsel on behalf of the applicant and the respondent, Mr Young in person, the presiding Magistrate fined the company $8,000, Mr Young $4,000 but did not record convictions against each. This is a significant factor.
49. Pursuant to section 12 of the Penalties and Sentences Act 1992 (Qld) a Court has a discretion to record or not record a conviction. However, pursuant to sub-section (2) of that section, if a conviction is not to be recorded the Court must have regard to all circumstances of the case including the nature of the offence, the offenders character and age and the impact that recording a conviction will have on the offenders economic or social wellbeing or changes of finding employment. Sub-section (3) notes that except as otherwise provided, a conviction without recording the conviction is taken not to be a conviction for any purpose and the conviction must not be entered in any records except in the records of the Court before which the offender was convicted and in the offender’s criminal history but only for the purposes referred to in sub-section (4)(b), which are not relevant in this case.
50. From reading the transcript of proceedings before the Magistrate it is clear that the Magistrate regarded the fines imposed as being at the lower order of fines that might have been imposed. It is also clear that the Magistrate took into account the fact that Mr Young and the company had no prior convictions of any type. The Magistrate did not give reasons for his decision and accordingly it is difficult to know what other factors he took into account. In particular whether he took the applicants’ submission that it was possible that registration may be revoked if a conviction was recorded into account.
51. On 10 May 2002, the company was charged with an offence against section 60(B)(1)(A)(ii) of the Agricultural and Veterinary Chemicals Administration Act 1992, namely the importation of a veterinary chemical product known as Albaziu, a chemical product neither registered or exempt under the Act. Albaziu contains 1.1% sodium nifurstyrenate, On this occasion the Magistrate gave reasons noting that the maximum penalty for such importation is 300 penalty units or 1500 penalty units in the case of a corporation (five times the penalty associated with an individual) making a total maximum fine of $165,000. Shortly before giving his decision, the presiding Magistrate adjourned submissions so that the complainant could obtain advice about whether sodium nifurstyrenate was commonly available in pet shops. This was a submission that was made by the defendant Mr Young. Upon resuming, the Magistrate was informed that the chemical is not available generally or at all. This seemed to have a persuasive effect on the magistrate who said with respect to the issue of conviction:
“It is totally inappropriate not to record a conviction in this case because if I did, I would have to hand down a penalty in accordance with section 19(1)(b) of the Crimes Act.It is most certainly not a trivial offence and the only other basis would be if I formed the view that the offence was committed under extenuating circumstances. I was, at one stage, sympathetic towards the Chief Executive Officer of the corporation prior to lunch and indeed adjourned to enable Mr Porritt (Counsel for the complainant) to make further enquiries which he did via Canberra, but it cannot be said that there are extenuating circumstances. The view that I take, on all of the material before me is as I repeat, this being a case of Chinese courage, as it were, simply proceeding knowing full well that there was no authority, or no registration of the product and simply importing it and using it to maintain a level of competitiveness with Chinese competitors who apparently use it all the time. It is appropriate that a pecuniary penalty be imposed then I have regard to the schedule put forward by the Crown. Mr Porritt, quite fairly in my view, has submitted that a penalty, somewhere in the vicinity of Patterson, file No C1372 is appropriate in this case. I might say but that for that submission I would have imposed a pecuniary penalty of an even greater amount that what I propose to order. … In all the circumstances, it is appropriate, in my view to impose a penalty of 60 penalty units bearing in mind that the maximum for a corporation is 1500. The defendant corporation is convicted and fined $6,600. It follows, of course, that a conviction is recorded, so far as Federal law is concerned ,,, given the pleas of guilty, the fines and the conviction in respect of the importing charge against the company.”
52. The Tribunal is satisfied that the applicants knowingly used an unregistered chemical in the treatment of fish for live export and knowingly imported an unapproved veterinary chemical product. Mr Young knew that the chemical was not approved for use in Australia and that it could pose a risk to human health. Mr Young, in using the chemical, must have been aware that this could do harm to Australia’s reputation as an exporter of safe food.
53. The Tribunal accepts the submission of the respondent that the fate of the corporation Pioneer Seafoods Pty Ltd rise or falls on the fate of the Mr Young, its Managing Director and, to all intents and purposes, its sole director and shareholder.
Any Other Relevant Factors
54. It has been contended that Mr Young has not shown contrition for his actions. The Tribunal was referred to his submissions to the Magistrate which when he first denied that he had received any notice from AQIS banning the chemical. He further tried to justify his actions on the basis that “everybody was doing it” and he had been singled out. He told the Magistrate that the actions of AQIS “was purely a vendetta against Barry Young because he was a tall poppy” and “the real aim of the exercise is that they want a criminal conviction Aqis so they can knock me out of the industry, that’s the bottom line”. As previously stated in response to the presiding Magistrate’s comments “… but you don’t seem to be even acknowledging any degree of blame worthiness in all of this”, Mr Young responded “if had a fair level playing field here I would not mind. This is not a level playing field. This is nowhere near level…They have not even bothered to find out about it. These people have got the same drugs as what I am using”.
55. The respondent notes that no remorse was expressed in the applicant’s submissions in relation to the show cause notice. The respondent further rejects the purported remorse expressed in the applicants’ letter of 21 June 2002 (T13 p108) as being “nothing more than an after thought expressed for the purposes of avoiding deregistration”.
56. A display of remorse or contrition is an indication that the person recognises that they have done wrong and confirms that they will not do the same thing again. Clearly an important factor for consideration by the Tribunal is the likelihood of a reoccurrence of the actions of the applicants. There are some considerations which the Tribunal has taken into account in respect of the failure by the applicant to be contrite in this case. The applicant is, to all intents and purposes, a self made man. He has a substantial business. He has a great deal to lose. There is no doubt that many of the things which he has said which the respondent points to as being a lack of contrition may have been better left unsaid. However, they reflect the applicant’s perception of the treatment he received from the respondent. It does appear in the cold light of day that the applicant understands the error of his ways and has indicated his intention to ensure that he complies with the law in the future. He was, of course, subject to regular and on-going audits by the respondent subsequent to the raids in 2002.
57. The respondent has noted that Mr Young was untruthful and attempted to hide both the fact that he was aware that the use of the chemical was unlawful and that he was, in fact, using it.
58. It is clear, insofar as the Tribunal is concerned, that Mr Young was at all times aware or ought to have been aware that the use of “yellow powder” was prohibited and that he should not have been using it. The Tribunal is satisfied that he used it to obtain a commercial advantage in the market place.
59. So are the applicants fit and proper persons? Based on the Tribunal’s findings, there is no doubt that the applicants have broken the law and have potentially placed at risk live exports to other markets of live fish.
60. The Tribunal must have regard to the potential for failure of the applicant’s business if the export registrations are removed. However, the Tribunal does not put a great weight on this as being an issue, as pointed out by the respondent’s Counsel, the evidence on this point was vague. However, the Tribunal accepts that it is most likely that the Tribunal will suffer substantial financial loss if it is not allowed to export live fish. It seems clear on the evidence that the export of live fish is a substantial part of the applicant’s business. The Tribunal notes that there was conflicting evidence about how the applicant disclosed the “yellow powder” to AQIS officers at Cairns Airport. The applicant says he declared the substance. The respondent says that he was discovered with the substance in his possession. Either way the substance became known to AQIS in Cairns who told the applicant that they would examine it and advise him. Insofar as the applicant is concerned AQIS did examine it and advised him later that day to come and collect the substance. It was only subsequent to this that a notice was sent in the form set out in the material advising that sodium nifurstyrenate is not legal and should not be used as it has possible health implications. It is not sufficient for the applicants to say that they did not read the notice or it did not come to their direct attention or that it was not clear. The applicants had a responsibility to ensure that they were complying with all notices issued by the respondent. However, having said that, the respondent must take some responsibility for having, at least to some extent, confused the issue by not alerting the applicants immediately that the substance was illegal and confiscating it when they had the opportunity.
61. It should be noted that neither Mr Young nor the company have ever been charged or convicted of any offence prior to the offences relating to this incident. The convictions in this case were of course directly related to the licence or registration – see New Broadcasting Ltd v Australian Broadcasting Tribunal (supra). It should however, be noted that in respect to Mr Young he has not, for all intents and purposes been convicted of any offence as no conviction was recorded in the first proceedings and he was not a party in the second. The company had a conviction recorded in respect of the second offence. In adopting the wording of the Tribunal in Re Wilco Meats (supra), the real issue to be determined when determining whether a person is fit and proper is whether the applicants will be likely to properly conduct their business in relation to the export of live fish. It is clear that the Australian community has an interest in ensuring that those operating registered premises have the knowledge and ability to carry out the functions to prepare and present the fish for export and will act honestly in the conduct of their businesses.
62. The Tribunal accepts that, unlike Mr Anschitz in the Wilco Meats case, the applicants in this case have not been involved in substantial deception and criminality. The penalties in the present case fall significantly short of large fines ($30,000) and lengthy imprisonment terms (suspended one year sentence).
63. Whilst the Tribunal accepts the thrust of the submission by the respondent that time needs to elapse between the determination of fit and proper person and reapplication, the Tribunal needs to balance that with the two primary considerations:
§are the applicants likely to re-offend in the way that they have or any other way (that is are they truly rehabilitated); and
§whether the deregistration would be so grossly unfair as to be inappropriate given all of the circumstances.
64. In this regard, the Tribunal has had regard to the significant number of references provided to the Tribunal by various business associates and competitors of the applicant. In all the circumstances the Tribunal considers that the applicants remain fit and proper persons in respect of the Prescribed Goods (General) Orders 1985.
I certify that the 64 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed: Sarah Oliver
AssociateDate of Hearing 17 February 2003
Date of Decision 23 January 2004
Counsel for the Applicant Mr P E Hack SC
Solicitor for the Applicant Kenny and Partners
Counsel for the Respondent Mr P J Flanagan
Solicitor for the Respondent Minter Ellison
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