Zalups and Australian Fisheries Management Authority
[2003] AATA 908
•15 September 2003
DECISION AND REASONS FOR DECISION [2003] AATA 908
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2001/399
GENERAL ADMINISTRATIVE DIVISION )
Re MARIS ZALUPS Applicant
And
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent
DECISION
Tribunal Deputy President DG Jarvis Date15 September 2003
PlaceAdelaide
Decision The Tribunal sets aside the decision under review and remits the application to the respondent for re-consideration in accordance with these reasons.
DG Jarvis
(Signed)
Deputy President
CATCHWORDS
FISHERIES – respondent introduced Individual Transferable Quotas for permits in Southern Shark Fishery – ITQs based on best 3 years of catch between 1994 and 1997 – changed management arrangements – whether differential economic impacts on permit holders were minimised – whether cogent reasons not to apply policy – whether application of policy unjust – exceptional circumstances – earlier proceedings in AAT – progressive osteoarthritis producing inability to fish - ITQ of zero – application remitted to respondent with recommendations
Fisheries Management Act 1991 s32, s32(1), s4(1), s17, s17(4), (5) (6)(a), (b), s3(1), (2)
Administrative Appeals Tribunal Act 1975 s37
Australian Constitution s51(xxxi)
Fisheries Administration Act 1991 s7
Re Fischer and Australian Fisheries Management Authority (2002) 71 ALD 665
Re Graham and Australian Fisheries Management Authority (2002) 71 ALD 700
Australian Fisheries Management Authority v Graham [2003] FCA 231
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
Re Lewis and Comcare [2002] AATA 197
Giorginis v Kastrati (1988) 49 SASR 371
Callaghan v William C Lynch Pty Ltd (1962) 79 WN (NSW) 830REASONS FOR DECISION
15 September 2003 Deputy President DG Jarvis 1. This is an application to review a decision made by a delegate of the Australian Fisheries Management Authority (“AFMA”) pursuant to s32 of the Fisheries Management Act 1991 (the “Act”) to impose conditions on a permit issued to the applicant on 15 February 2001.
2. The permit authorised the applicant to fish using 1,000 hooks – long line (demersal) in the Southern Shark Fishery (“SSF”) during the period 15 February to 31 December 2001. The permit was attached to his vessel Encounter II. It allowed the applicant to fish in that part of the SSF lying in the Australian Fishing Zone in waters adjacent to the South Australian coast. The permit did not authorise the applicant to fish within State waters (that is, within 3 nautical miles of the base line of South Australia). The permit was subject to a condition that the total trunked weight of gummy and school shark which could be caught pursuant to the permit was nil.
3. The applicant represented himself. The respondent was represented by Ms A Dornau of the Melbourne office of Dibbs, Barker Gosling. Evidence was given by the applicant and by Ms Margot Sachse, who is the manager of the Gillnet, Hook and Trap Fishery, formerly the Southern Shark and South-East Non-trawl Fisheries.
4. The Tribunal admitted the following documents as evidence:
(a)the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (exhibit A1 :T Documents, T1 – T48);
(b)copy of fishing permit for period from 15 February 2001 to 31 December 2001 (exhibit A2);
(c)witness statement of the applicant entitled “AAT Transcript” (exhibit A3);
(d)Mr Zalups’ undated submission to the Southern Shark Fishery Quota Allocation Independent Review Panel (exhibit A4);
(e)statement by Mr Zalups dated 2 August 2003 in response to Ms Dornau’s letter dated 31 July 2003 to the Deputy Registrar of the Adelaide Registry of this Tribunal (exhibit A5);
(f)bundle of photographs depicting Encounter II and exceptional shark catch in 1990 or 1991 (exhibit A6);
(g)letter dated 25 July 2003 to Dr Brenton Martin from the respondent’s solicitors and attached copy of medical notes and reports provided in response to a Summons issued to Dr Martin (exhibit A7);
(h)letter from Harry Paul dated 12 February 2002 (exhibit A8);
(i)summary entitled “Chairman’s Summary of Shark MAC44” (exhibit A9);
(j)letter dated 7 August 2003 from the applicant to the Administrative Appeals Tribunal with attachments marked A, B, C, D, E, F and a submission to the Southern Shark Independent Allocation Review Panel (exhibit A10);
(k)letter dated 11 August 2003 from the applicant to the Administrative Appeals Tribunal addressing matters raised in a fax from counsel for AFMA dated 11 August 2003 (exhibit A11);
(l)statement of applicant re exhibit R12 (being witness statement of Captain Ferrao dated 10.9.2003) (exhibit A12);
(m)letter dated 19 May 1994 from Mr PJ Ryan of AFMA to Mr Zalups (exhibit R1);
(n)Fishing Permit covering period 21 April 1996 to 30 June 1996 including letter of 9 May 1996 from Cindy O’Brien of AFMA to Mr Zalups (exhibit R2);
(o)Fishing Permit covering period 1 July 1996 to 30 June 1997 (exhibit R3);
(p)fishing log book page for June 1996 and attachment (exhibit R4);
(q)letter dated 31 July 2003 from Ms A Dornau to the Deputy Registrar of the Adelaide Office of this Tribunal, and enclosures comprising the Terms of Reference of the Southern Shark Fishery Independent Allocation Review Panel (exhibit R5);
(r)outline of evidence of Ms Margot Sachse and Annexures 1 to 5, including document marked as exhibit A2 (exhibit R6);
(s)document headed “Attachment 1 – Fishery Statistics 2001” (exhibit R7);
(t)information showing number of quota permits by reference to gear and access outside coastal waters (exhibit R8);
(u)letter dated 22 January 1997 to Mr Zalups from Adam Sharp of AFMA (exhibit R9);
(v)letter dated 14 August 2003 from counsel for the respondent and its enclosures, comprising copies of Commonwealth fishing boat licences for periods expiring on 30.09.91 and 30.09.92 respectively, and fishing permits for various periods from and after 06.01.93, with the last such permit expiring on 31.12.03 (exhibit R10); and
(w)graphs depicting the initial allocation of shark quota in 2003 marked A, B, C and D respectively (exhibit R11); and
(x)statement of Captain Walter Francis Ferrao dated 10.09.2003 and its annexures marked A, B and C respectively (exhibit R12).
Background To This Review
5. The hearing of this matter was deferred pending the outcome of the applications to this Tribunal in Re Fischer and Australian Fisheries Management Authority (2002) 71 ALD 665 and Re Graham and Australian Fisheries Management Authority (2002) 71 ALD 700, and the subsequent appeals to the Federal Court in those two matters in Australian Fisheries Management Authority v Graham [2003] FCA 231.
6. The applications in the Fischer and Graham matters were heard together, both in this Tribunal and on appeal in the Federal Court. In its reasons for decision the Tribunal traced the history of AFMA’s regulation of the SSF which culminated in the imposition in early 2001 of a total allowable catch (“TAC”) for the SSF as a whole, and the allocation of individual transferable quotas (“ITQs”) for each permit holder. This regime entailed “output controls”, instead of earlier management by means of “input controls” entailing limiting the type or extent of equipment which permit holders were entitled to use when fishing for shark. The Tribunal recounted that the new “output control” regime had been recommended by an independent advisory panel, the Southern Shark Allocation Advisory Panel, after extensive consultation with the industry. In accordance with the Panel’s recommendation, AFMA determined that ITQs would be allocated by reference to the ratio between the aggregate of the best three annual catches made by each permit holder between 1 January 1994 and 31 December 1997. This recommendation was intended to give effect to the principle that catch history attached to the permit pursuant to which the catch was taken, and not to the person who held the permit when the catch was taken. The Tribunal further noted that the Panel had been requested to advise AFMA on the most appropriate basis for allocation of ITQs in the SSF in accordance with Fisheries Management Paper No. 8 (“FMP8”) entitled “Allocation of Fishing Concessions Where Management Arrangements Change” (which is included at T17 in exhibit A1 in the present matter), and the Tribunal recounted certain passages from this paper. These passages included the following:
“This Fisheries Management Paper sets out AFMA’s policy and a procedural framework for the allocation of fishing concessions where a decision has been taken to change management arrangement in a fishery for which management arrangements are already in place and fishing concessions have been granted to eligible operators. For example this could be where a move is made from
· a non transferable input control system to a transferable unitised input control system; or
· an input to an output control (individual transferable quota) system.
…
Allocation of fishing concessions:
Establishment of well defined, divisible, secure and transferable fishing concessions are a major factor in the successful pursuit of AFMAs ESD, economic efficiency and cost effective management objectives. However, it is recognised that continually changing the method of allocation of fishing concessions will weaken those concessions and make effective fisheries management difficult. Accordingly, the fishing concessions that exist in the fishery at the time that management arrangements are proposed to change, are the ones that will be taken into account under any allocation of concessions required by the move from one management regime to another.
It should also be recognized that there will be instances where in pursuing AFMAs legislative objectives it is not possible to achieve an equivalent translation of the fishing concession when changing from one management regime to another. Clearly, in these circumstances, it is not possible to design an allocation formula that would have absolutely no impact on the relative economic position of individual operators.
A body of legal case history in relation to allocation of fishing concessions has been established both in Australia and overseas which demonstrates that fishing concession allocations resulting in a significant and differential economic impact on individual operators (which cannot be balanced against fisheries management objectives) run the risk of being successfully challenged. From a legal and fisheries management perspective, AFMA will explicitly endeavour to minimise any adverse differential economic impact on individual operators.
Therefore AFMAs approach to allocation of fishing concessions is based on the premise that, in making any management changes, AFMA will ensure:
· such changes are consistent with and support the pursuit of AFMAs legislative objectives; and
· any differential economic impact of allocations on individual fishing concession holders are minimised unless there are reasons, justifiable with AFMAs legislative objectives, that dictate otherwise.”
The Tribunal noted that when the Panel made its report to AFMA, the Panel assumed that permits were not transferable. However, after reviewing all of the evidence before it, the Tribunal found that, in fact, permits were effectively transferable without reference to catch history, and permits accordingly had an intrinsic value.
7. In Fischer’s case, the applicant had a relatively poor history of catching shark in the years 1994, 1995 and 1996 due to his concentration on non-trawl fish in those years. The ITQ allocated to his permit was therefore comparatively low and, on Mr Fischer’s evidence, such that having regard to his investment in the fishery and his vessel, it was virtually economically impossible for him to operate, so that he regarded his permit as almost worthless. In Graham’s case, the applicant had suffered an injury requiring a hip replacement in 1990, and because he was no longer capable of the heavy lifting and long periods away from port involved in shark fishing, he subsequently concentrated on cray fishing. He therefore had no catch history for gummy shark in the period which AFMA had determined, and was allocated a zero quota for shark.
8. The Tribunal decided, in effect, that because the permits were transferable, they had value even if fishing were not undertaken, and that in the circumstances of the two applicants, the differential economic impact of the introduction of the ITQs based on catch history had not been minimised, and there were reasons which would dictate a departure from AFMA’s policy. Further, the Tribunal, after referring to the judgment of Brennan J in Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634, at 642, found that the new management policy “tended to produce an unjust decision”, and accordingly the policy decision was not sound but was flawed. The Tribunal accordingly decided to remit both matters to AFMA for reconsideration.
9. An appeal to the Federal Court in these matters was dismissed by Ryan J on 24 March 2003. His Honour found that the Tribunal’s decision, including its finding that the permits or the rights they conferred were transferable, was not vitiated by any error of law, and in paragraph 29 of his judgment said:
“On the principal issue of whether permits were transferable, if the permits had conferred rights which were strictly personal to the permit holders, then it would have been difficult to take exception to a decision to allocate ITQ by reference to catch history alone, as that could reasonably have been regarded as the most reliable indicator of future performance. If however, the Tribunal was right to conclude that the permits were transferable in the sense that a permit holder could ‘transfer the income stream to another person upon sale or lease’ and ‘acquire a capital benefit upon sale’, it follows that AFMA’s decisions had been made in accordance with a policy that proceeded upon a flawed assumption. If a permit holder could have assigned to another person an interest in the permit, and derived an income stream or realised a capital value as a result, catch history alone would be an incomplete or unreliable measure of value of the permits immediately before the proposed change. As soon as it is possible for a lesser interest than an undivided personal right to fish to be carved out of a permit and for income to be thereby derived by the permit holder and the holder of the lesser interest, there is a value in the permit which can properly be taken into account in any change of policy for management of the relevant fishery. That is manifestly so where one of the policy objectives of such management is, to the extent practicable, to preserve the economic position of fishermen in relation to each other. Similarly, as soon as there is a market for the permits, even if transfers are now only granted by AFMA upon the death or serious incapacity of a permit holder, the resultant value of the permits as ‘life insurance’ or ‘superannuation’ is also something properly to be taken into account in changing the rights attaching to the permits.”
10. Following the decision of the Federal Court in the Fischer/Graham cases, AFMA determined to review the SSF allocation policy in accordance with the decision of the Federal Court and the Tribunal. It appointed a Southern Shark Fishery Independent Allocation Review Panel to consult with interested operators, deliberate and provide a formal advice to the Board of AFMA by 16 September 2003. A copy of the new Panel’s terms of reference is included in exhibit R5 in the present matter. I note that in paragraph 2 of the Terms of Reference, the Panel is to advise the AFMA Board “on the appropriate formula for allocating school and gummy shark ITQs amongst individuals based upon:
· the Panel’s findings as to the relative economic position of operators taking into account the value of SSF permits; and
· any other considerations arising from further information it receives from the industry, and the documents provided under paragraph 3.”
Paragraph 3 of the Terms of Reference identifies a number of matters or sources which the Panel should consider in assessing the market for and value of permits, and paragraph 6 requires the Panel to determine whether any person who may be advantaged as a result of an AFMA decision arising from the report should receive any additional temporary quota adjustment for any disadvantage up to the date of implementation of the decision. It also appears from exhibit R5 that port meetings were held at six venues across the eastern states in the week 14-18 July 2003, and written submissions were called for from all interested parties by 25 July 2003. A total of 61 submissions were received, including a submission from the applicant in these proceedings.
11. After the applicant had been issued with his 2001 permit which was subject to the nil quota, the applicant requested an internal review of his ITQ. He signed a standard letter which had been prepared for use by a number of fishermen who were dissatisfied with their allocations. The letter signed by the applicant is document T32 in the T Documents. I note from paragraph 16 of the internal minute included in exhibit A1 that this letter was identical to the request for internal review provided by Mr Fischer. It asserts in part that the allocation of quota was insufficient for his business to be viable, and that the allocation across concession holders had been made with no regard to their stock of wealth or ability to generate income and that the use of catch history for allocation of quota to individual fishers was inappropriate. In his evidence the applicant complained that the zero allocation attributed to his permit in 2001 had emasculated the value of his permit. He said that he had applied for his permit every year and it was an “equity” which belonged to him. He was never made aware that a failure to exploit his permit would result in a zero allocation of quota. He contended that the ITQ catch history allocation policy denied that fishermen treated their permits as assets capable of capital realisation.
12. In view of the decision in the Fischer/Graham cases to the effect that AFMA’s policy with respect to allocating ITQs was flawed, and in view of the impending review by AFMA of that policy in the light of the report from the Panel, which will include advice from the Panel on the appropriate formula for allocating ITQs based upon the Panel’s findings as to the relative economic position of operators taking into account the value of SSF permits as well as the other considerations referred to in the terms of reference, I intimated at the outset of the hearing of this matter that I proposed to set aside the decision under review and to remit the application to the respondent for reconsideration in the light of the amended policy which is to be adopted by AFMA.
13. However, the applicant also sought a review of the decision of AFMA’s delegate on the grounds that exceptional circumstances applied in his case and that (in addition to the failure to recognise the intrinsic value of the permit) the respondent should have allocated quota to the applicant as a consequence of those exceptional circumstances. I note that a similar issue arose in Graham’s case, and the Tribunal proceeded to examine that issue and found that Mr Graham had not been engaged in shark fishing activity because of a pre-existing hip injury during the relevant years and had not been put on notice that the absence of being able to demonstrate a history of shark fishing would result in him being denied a shark fishing quota when the management practices changed. The Tribunal decided that those circumstances were exceptional, and that his allocation of an ITQ should accordingly be reviewed. The Tribunal therefore remitted the matter to AFMA for reconsideration in accordance with the Tribunal’s reasons.
14. It seemed to me that (having regard to the decision in Graham’s case), it would be appropriate in the present matter to determine the question of whether cogent reasons or exceptional circumstances existed which made it inappropriate to apply the quota allocation policy (involving, as it does, a determination of verified catch history) in determining the allocation of quota applicable to the permit issued to the applicant. I am mindful that the application relates to the applicant’s 2001 permit, which expired on 31 December 2001. However, AFMA acknowledged that if the Tribunal determined that any allocation of quota should have been included in that permit, AFMA would make a corresponding allocation in respect of the applicant’s current permit. The hearing before me accordingly proceeded on the somewhat restricted basis referred to above, and the parties agreed with my suggestion that I should determine this matter before the adoption by AFMA of its amended policy, which according to exhibit R5 is due to occur on 16 September 2003.
15. The applicant also argued that the allocation of a zero ITQ meant that the respondent had acquired property, namely his fishing permit, other than on just terms, contrary to s51(xxxi) of the Australian Constitution. This argument raised a number of further issues but, following the conclusion of the hearing, both parties agreed with my suggestion that I would not deal with this issue in these reasons, to enable the applicant to review his position in the light of the effect on him of the proposed amended policy which will be adopted by AFMA shortly. If AFMA adopts a revised policy which reflects the intrinsic value of permits, the applicant may decide not to pursue this aspect of his review application. I further indicated that if following the adoption of the revised policy by AFMA the applicant still wishes to pursue his constitutional argument then both parties would be at liberty to adduce further evidence and argument on this aspect of the current proceedings.
The Legislation
16. AFMA was established under the Fisheries Administration Act 1991 (“the Administration Act”) and has various functions enumerated in s7 of that Act, including devising management regimes in relation to Australian fisheries, devising fisheries adjustment programs and fisheries restructuring programs, consulting and co-operating with the industry and members of the public generally in relation to the activities of AFMA, and as provided by an associated law, establishing and allocating fishing rights and functions relating to plans of management.
The Fisheries Management Act 1991 is an associated law for the purposes of the Fisheries Administration Act 1991. I will now summarise certain provisions of the Fisheries Management Act 1991 insofar as they are relevant to the present matter.
Provision is made in s17 for AFMA to determine plans of management for fisheries after consultation with such persons engaged in the fishing industry as appear to it to be appropriate and after giving due consideration to any representations made to it. The plan of management for a fishery must set out its objectives, the measures by which the objectives are to be attained and the performance criteria against which the measures taken are to be assessed (s17(5)). It may provide for the management of that fishery by means of a system of fishing concessions (s17(6)(b)). A “fishing concession” means a statutory fishing right, a fishing permit or a foreign fishing licence (s4(1)). A “fishing permit” means those permits granted under s32 of the Act.
Under s32(1), upon an application being made to it in an approved form, AFMA may grant a person a fishing permit authorising the person, or another person on his or her behalf, to use an Australian boat for fishing in a specified area of the Australian Fishing Zone or in a specified fishery. An application for the grant of a fishing permit must provide AFMA with such information as it reasonably requires for a proper consideration of the application (s32(2)). Under s32(5), a fishing permit is granted subject to certain statutory conditions set out in that subsection, and under s32(6)(a) is subject to such other conditions as are specified in the permit or prescribed in relation to permits granted under s32. Under s32(7), without limiting s32(6)(a), “the conditions that may be specified in a permit include conditions relating to:
(a) the fish that may be taken; or
(b) the quantity of fish that may be taken; or
(c) the rate at which fish may be taken; or
(d) the method or equipment that may be used to take fish; or …”.
Section 165(2) of the Act provides that a person affected by a “relevant decision” who is dissatisfied with the decision may request AFMA to reconsider the decision. A “relevant decision” is defined in s165(1) to include a decision under s32 of the Act. Section 165(5) provides that within 45 days after receiving the request, AFMA must reconsider the relevant decision, and may make a decision in substitution for the relevant decision, whether in the same terms as the relevant decision or not, or revoking the relevant decision. Section 165(7) states that an application may be made to the AAT for review of a “reviewable decision”. A “reviewable decision” is defined in s165(1) as a decision of AFMA under s165(5).
Section 3(1) provides that AFMA must pursue the following objectives in the performance of its functions:
“(a)implementing efficient and cost-effective fisheries management on behalf of the Commonwealth; and
(b )ensuring that the exploitation of fisheries resources and the carrying on of any related activities are conducted in a manner consistent with the principles of ecologically sustainable development and the exercise of the precautionary principle, in particular the need to have regard to the impact of fishing activities on non-target species and the long term sustainability of the marine environment; and
(c) maximising economic efficiency in the exploitation of fisheries resources; and
(d)ensuring accountability to the fishing industry and to the Australian community in AFMA’s management of fisheries resources; and
(e) achieving government targets in relation to the recovery of the costs of AFMA.”
Under s3(2) AFMA must have regard to the objectives therein, relevantly subsections (a) and (b) provide that through proper conservation and management measures, the living resources of the AFZ are not endangered by over-exploitation and achieve the optimum utilisation of the living resources of the AFZ.
Management Controls in the SSF
17. The T Documents (exhibit A1) include a number of media releases, reports, notices, minutes, circulars and other papers prepared by the relevant Ministers, AFMA and other organisations, commencing with a media release dated 25 September 1984 and leading up to the adoption and implementation by AFMA of the ITQ allocation regime with effect on and from 1 January 2001. The effect of this material is well summarised in the respondent’s very helpful statement of facts and contentions, and is also set out in detail in a number of other decisions of this Tribunal, including Fischer’s case. In view of the somewhat restricted scope of the present review, it is not necessary to repeat that summary in these reasons, but I have taken into account the evolution of the current regime and the reasons for it. In particular, I have had regard to FMP8 (which is referred to in paragraph 6 of these reasons) and to the verification requirements of AFMA as evidenced by the enclosure to T23, which apparently emanated from Fisheries Administration Paper No. 8 (“FAP8”) entitled “Verifying Catch History”. This in turn is referred to in T24, although FAP8 was not tendered in the present proceedings.
Evidence
18. From the evidence before me I make the following findings. The applicant started fishing at Cape Jervis in South Australia in about 1975 or 1976 as a helper on another fisherman’s vessel. He then purchased his own vessel, and in 1981 purchased a larger vessel, Encounter II. He pioneered the use of long lining for sharks at Cape Jervis (a small fishing port in South Australia), and used 4 lines which were 2 nautical miles long and customarily set them three times a day. A few years later, in response to the promotion of tourism in that area of South Australia by the Government and the media, he started a charter boat operation to take people out fishing. He continued to engage in fishing when he was not able to charter his vessel, and derived income from both activities. He subsequently surrendered his State fishing permit, and after that he was unable to fish within 3 nautical miles of the base line of South Australia. The applicant did not fish between 1986 and 1989, because he was concentrating on his charter boat/tourism activities. However, after that there was a downturn in those activities, and so he returned to fishing activities until 1993.
19. The applicant described certain features of his fishing operations and his vessel Encounter II in some detail. His vessel is fitted with dual engines and a hydraulic line hauler, and this enables one engine to drive the hydraulics independently of the other engine which propels the boat when hauling the lines. This combination of equipment is unusual for smaller vessels like Encounter II. The vessel is a trailer boat of approximately 8 tonnes gross and because there are no mooring facilities at Cape Jervis, it was launched and retrieved to a trailer on a daily basis. He also modified the size of the ice box on Encounter II so that when it was full it could contain 1.3 tonnes of shark. The applicant said that the combination of the vessel and equipment enabled him to operate what was probably the largest in-shore long line operation in South Australia, and to the best of his knowledge no-one at Cape Jervis or anywhere else in South Australia had run long lines to the length and extent which he did. The other boats at Cape Jervis were small by comparison with Encounter II. He was able to take his vessel out in bad conditions, whereas a number of the smaller boats at Cape Jervis could only venture out in good weather. He said that the tides and currents in the area of either side of Backstairs Passage (which is adjacent to Cape Jervis) are amongst the strongest in the Southern Hemisphere, making the waters some of the most dangerous in the world, and as a result, shark fishing around Cape Jervis is confined to using hooks and not nets.
20. In 1994, AFMA decided not to grant the applicant access to the hook section of the SSF because he did not satisfy the then requisite criteria of a minimum average catch of 2 tonnes per year of school and gummy shark in the best two of the three qualifying years then relevant, namely 1986, 1987 and 1988. In October 1994 the applicant applied to this Tribunal to review AFMA’s decision and on 4 April 1996, the Tribunal set aside AFMA’s decision and remitted the matter to AFMA with the following directions:
“1.The Applicant is to be granted a permit to enable him to undertake demersal long-line fishing for shark in the Southern Shark Fishery.
2.Any permit issued to the Applicant is to contain the following restrictions, namely:
(i)to be limited to 1,000 hooks only or 4 long-lines, each 2 kilometres long with hooks set at 15 metre intervals;
(ii)that the vessel Encounter II (or any other vessel operated by or on behalf of the Applicant) is only to operate out of Cape Jervis South Australia;
(iii)the Applicant’s fishing activities are restricted to that part of the Australian Fishing Zone adjacent to the coastal waters of South Australia.”
21. Following the delivery of the Tribunal’s decision, a permit was issued to the applicant by AFMA on 22 April 1996. The applicant went out to fish for shark on only one trip after that, on 16 and 17 June 1996. By then he had not been shark fishing for about 2½ years and he found that the work of commercial shark fishing had become too heavy for him to manage in view of his deteriorating physical condition. According to an invoice dated 17 June 1996 issued to the applicant by Cape Fisheries of Cape Jervis, the applicant sold 71 kilograms of shark following that trip (see the invoice included in exhibit A10).
22. The applicant continued his charter boat/tourism activities after regaining a permit to fish in the SSF as a result of the Tribunal’s 1996 decision, but consistently with his realisation that he was no longer fit enough to carry out commercial shark fishing, he sold his long lines and other related shark fishing equipment in about 1998.
23. Reference was made in paragraph 21 above to the applicant’s deteriorating physical condition. He was born on 11 September 1950. He gave evidence that he sustained a serious injury in 1964 in an explosion which severed his left leg. He said that doctors at the Royal Adelaide Hospital were able to re-attach the severed leg, but his severe injury resulted in a lengthy period of incapacity and the subsequent development of osteoarthritis. A further summary of the applicant’s medical condition and its progression is contained in exhibit A1 at page 319, where the applicant provides a summary of his original injury and its subsequent effect on him. This summary is endorsed by the applicant’s general practitioner, Dr Brenton Martin, with a note to the effect that he has read the summary and agrees with “the medical content and the time frame”. This summary reads as follows:
“As a teenager, in an accident, explosives blew my left leg; below the knee, right off. I spent the following 18 months on crutches before I walked unaided and I am lucky to have my leg at all.
It is probably the beginning of the condition that affects my knees and hip today. From Dr Oakshotts letter it is clear that the onset of the condition that afflicts Maris Zalups was at an early age.
I was slightly surprised when told my right knee, the good leg, was worse than the left. I now know that it is because I have favored it whilst working and walking.
At the time of my accident I do recall the surgeon Dr Betts explaining that my legs would give me trouble, as I grew older.
This then is the background to my present condition that has been assessed by Dr Brenton Martin, my GP and Dr Roger Oakshott my orthopedic surgeon.
Although I have always been aware that my legs were not quite right by about the early 1990’s it was I was experiencing a significant level of pain and discomfort.
At this point in time I did not understand what exactly it was and believed that if I went “easy” on my legs I would get over it.
The nature of osteoarthritis is such that there are good days and bad ones, but the overall direction is downhill as the joints progressively wear away.
The slow progression of my degenerative arthritis continued and by about 1995 – 1996 the cartilage in my knees was worn to the point where bone on bone could be heard and felt as I walked.
I used soluble aspirin to take away the pain and inflammation and tolerated it until in 1998 I consulted Brenton Martin on my options as by now it was becoming intolerable. Up until about 1998 the “condition” slowly deteriorated which I understand is normal for this disease.
Since then there has been a rapid acceleration, to the point where I can no longer stay on my feet more than two hours or so and maneuver stairs sideways like a crab.
Last year Dr Oakshott injected both knees and hip with steroids to alleviate the situation and give me breathing space while I await surgery.
These then are the facts concerning my condition and these are the facts in regard to osteoarthritis. Dr Brenton Martin will support them when he returns from leave about Monday week.” (sic)
The reference in this summary to “Dr Oakshotts letter” appears to be a reference to a medical report dated 12 April 2001 from Dr Roger Oakeshott (T37) which reads as follows:
“Mr Zalups had bilateral open menisectomies performed at a young age. Subsequently, however, he went on to perform very heavy work shark fishing which involves a great deal of impact stress on the knees. He subsequently has ended with chronic degenerative arthritis.
I believe that Mr Zalups has significant osteoarthritis which has certainly been contributed to by his commercial fishing.”
24. The applicant’s left knee was replaced on 1 July 2003, and he said that he expected that his right knee would be replaced on 12 August 2003, and that he would have an operation on his left hip next winter. Exhibit A7 comprises a copy of a letter from the respondent’s solicitors to Dr Martin, and the documents produced in response to the summons which had been enclosed with that letter. These reports include a number of reports from radiologists on his knees and hips, and a report from Dr Mario Penta, dated 30 June 2003 which includes the following information:
“I reviewed Maris on the 24th June … He presented with a long history of symptomatic bilateral knee osteoarthritis. His other significant history includes bilateral open medial meniscectomies, fractures of his left tibia and fibula and left hip osteoarthritis (which was tolerable).
Examination of the knees revealed marked varus malalignment and fixed flexion deformities which were more pronounced on the left. Flexion was limited to 100 degrees on the left and 110 degrees on the right. Good foot pulses were palpable. The plain radiographs revealed bilateral tri-compartmental degeneration which was advanced in the medial compartments.
His symptoms were severe enough to warrant bilateral total knee joint replacements. I have recommended a left knee joint replacement first followed by the right 6 weeks later. I plan to do this for him at a mutually convenient time in the near future …”.
25. The respondent called Ms Margot Sachse to give evidence. Her evidence was in the main a formal account of the introduction and application of the ITQ regime generally, and its application to the applicant in particular, and I accept her evidence except to the extent that it is inconsistent with the determinations which I will proceed to make in these reasons for my decision. Ms Sachse briefly summarised the various changes in the management of the SSF over the years preceding the decision by AFMA in 1997 to adopt the system of ITQs or output control, and the steps taken by AFMA to consult with operators and to seek advice from appropriately qualified independent experts. She said the new policy eventually came into effect on 1 January 2001, and its introduction had been delayed by the need to negotiate an off-shore constitutional settlement involving the Commonwealth and the States of South Australia, Victoria and Tasmania and also by the process of checking the claims of catch history made by operators in accordance with the verification procedures adopted by AFMA. She referred to the permit issued to the applicant and to the conditions attached to it. She said that the condition to the effect that the applicant was required to operate out of Cape Jervis was removed in 2002 as part of a relaxation of some input controls following the introduction of ITQs into the fishery. She said that as early as 6 June 1997, all SSF operators (including the applicant) were warned that shark catches taken after 10 April 1997 would not be considered for inclusion in the quota allocation process, and she referred to document T15. She said that the applicant received notification of the proposed allocation of quota and the verification process on 6 September 1999, and she referred in that regard to document T23 and document T24 in exhibit A1, which is headed “General Guidelines for AFMA Officers Verifying Shark Catch History”. She said that it was thought this verification process should result in improved, but not perfect, data – thus lessening the chances of distorted allocations. She said that the applicant (together with all shark fishers and interested persons) was advised of the formula governing ITQ allocation in September 1999 and was invited to apply for quota allocation.
26. Ms Sachse explained that the failure of AFMA to allocate any school or gummy shark quota to the applicant was based on the application of AFMA’s formula governing the allocation of ITQs, that is, that the allocation to each concession holder would be proportional to the relative aggregate catch of each concession holder in their three best years during the period 1 January 1994 to 31 December 1997. She then referred to communications passing between the applicant and AFMA and subsequently between the applicant and the reviewing delegate of AFMA, and to the findings of the reviewing delegate.
27. Ms Sachse said that the catch verifications were processed from the following types of documents:
· primary verifiable documents, being landing documents from the fish cooperatives and relevant fish marketing authorities, invoices, receipts, sales dockets or carrier consignment notes prepared at the time of transaction; and
· supporting documents, being log books (catch returns to authorities or personal records) and financial records which showed that monies were received following the taking or sale of the fish referred to in the primary verifiable documents.
I note that this description is consistent with the verification process enclosed with the letter from AFMA dated 6 September 1999 (i.e. T23) in which shark fishermen and other interested persons were advised of the new ITQ system. Ms Sachse said that in most cases, primary verifiable documents were accepted where there was secondary evidence, for example bank statements. In some cases, AFMA management waived the requirement for secondary evidence, for example in the case of summary print-outs from large processors. She proceeded to elaborate on the verification requirements and the process used to establish the breakdown of species of shark.
28. Ms Sachse then referred to the documents upon which the applicant had sought to rely to verify his catch history in the years preceding 1 January 1994, and said that they fell far short of the verifiable documentation sought by AFMA and supplied by other SSF operators in the catch history verification process. Ms Sachse said that there were many instances where operators were unsuccessful in substantiating their catch history, because the documents produced did not satisfy the verification requirements. Further, she said that it was well-known in the industry that there was a cash economy, and it was thought that people who benefited from the cash economy should not benefit from an allocation of quota which had not been verified. She said that it would be inequitable to the operators who have had their shark ITQs allocated on the basis of verifiable documentation to accept the applicant’s “tenuous” claim that certain figures referred to in paragraph 52 of the 1996 decision of this Tribunal reflected his shark catch history during the relevant period. I note, however, that in the present matter the applicant said that he does not rely on that aspect of the 1996 decision, and that his former solicitor should not have referred to that aspect in his communications with the reviewing delegate.
29. Ms Sachse further referred to catch data in respect of the total catch of gummy and school shark by South Australian long liners in the years from 1991 onwards, and to the decline in stocks in the waters accessible by the applicant. She concluded that it would be inequitable to allow the applicant to base his quota allocation on his claimed catch for the period for 1990 to 1994 when the SSF quota allocation of other South Australian operators had been based on their catches in subsequent years when shark stocks were less abundant. I also note that the applicant suggested that the decline in total shark catch did not necessarily of itself indicate that stocks were declining, since this might simply have reflected a decline in the total fishing effort by commercial shark fishers over the relevant years.
30. Ms Sachse further said that even though the applicant’s permit was subject to a zero quota allocation, he could have leased his permit to another operator, who could in turn have leased quota, or alternatively, the applicant could have sold his permit. She said that the cost of leasing quota was of the order of $1.20 per kilogram and the bench mark price of shark was $8.00 to $9.40 per kilogram. She said that if some additional allocation were made to the applicant, there would be no change to the ITQs of any other operators in the current year, so that effectively the TAC (i.e. total allocated catch) would be increased in the current year. However, next year the TAC would not be increased, based on the scientific advice which AFMA had, but instead every other operator’s quota would be reduced a little to provide for the quota allocated to the applicant. Ms Sachse further said that from the information contained in exhibit R8, it appeared that of 24 operators who had held permits with an entitlement of 1,000 hooks, 4 operators had received no quota, and another 6 operators had received an allocation of less than 100 kilograms. Of the 2,000 hook operators, 2 operators had received no allocation.
31. When the oral evidence in this matter concluded on the second day of the hearing, I agreed that the respondent could tender further documents which it did not have available, and to receive a statement from the South Australian Department of Transport to the effect that persons holding a coxswain’s certificate would be qualified to skipper a vessel such as Encounter II. On 11 August 2003 the respondent provided this information in the form of a copy email from one Captain Water Francis Ferrao. When this was provided to the applicant, he made certain further submissions and provided further information in relation to the possibility of engaging a person holding a coxswain’s certificate to captain his vessel for shark fishing operations (see exhibit A11). He also sought to obtain further information from Captain Ferrao which, in my view, could have been the proper subject of cross-examination if Captain Ferrao had been called to give evidence. Subsequently, a statement of Captain Ferrao was obtained by the respondent in a form which contained the further information sought by the applicant, and this (including its 3 attachments) was admitted by consent as exhibit R12. The applicant then sought to provide further information in response, and the parties agreed to his tendering a statement in the form of exhibit A12. The applicant acknowledged that he did not wish to cross examine Captain Ferrao on exhibit R12, and counsel for the respondent acknowledged that she did not wish to cross-examine the applicant on exhibit A12. I shall revert to the contents of these statements later in these reasons.
Issues and Contentions
32. The applicant contended that exceptional or even unique circumstances existed in his case and, accordingly, he should be awarded appropriate quota notwithstanding his lack of catch history in the years 1994 to 1997. He referred in this regard to AFMA’s refusal to grant him a permit during the period from 1994 until April 1996, (when his permit was reinstated following his first application to this Tribunal). He pointed out that AFMA itself had denied him the opportunity of evidencing his catch history right in the middle of its own chosen time frame for catch history (see exhibit A3, page 5). After he had his permit reinstated, his medical condition precluded him from engaging in shark fishing. In earlier submissions to AFMA, the applicant had also referred to the failure of his marriage of 25 years as a further basis for his claim for exceptional circumstances, but he subsequently withdrew that aspect of his claim (see exhibit A3, page 1.5).
33. It is necessary for me to consider the issues which arise in the present matter against relevant policies adopted by AFMA. In this regard, I refer to the remarks of Brennan J in Re Drake and the Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 in relation to ministerial policy. His Honour said, at page 645:
“When the Tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the Tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision in the circumstances of the particular case. Where the policy would ordinarily be applied, an argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application, especially if the policy is shown to have been exposed to parliamentary scrutiny.
The general practice of the Tribunal will not preclude the Tribunal from making appropriate observations on ministerial policy, and thus contributing the benefit of its experience to the growth or modification of general policy; but the practice is intended to leave to the Minister the political responsibility for broad policy, to permit the Tribunal to function as an adjudicative tribunal rather than as a political policy-maker, and to facilitate the making of consistent decisions in the exercise of the same discretionary power.
The general practice will require the Tribunal to determine whether the policy is lawful, not in order to supervise the exercise by the Minister of his discretion, but in order to determine whether the policy is appropriate for application by the Tribunal in making its own decision on review.”
I also refer to the detailed discussion of Davies J in Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 relating to the circumstances where a decision-maker can depart from policy. His Honour reviewed a number of relevant authorities dealing with this issue, including other decisions relating to policies in respect of the management of fisheries.
34. I also note that in the circular letter dated 6 September 1999 advising shark fishers and other interested persons of the adoption of the ITQ system (T23), reference was made to the consideration of exceptional circumstances. The letter said:
“To a large extent, the possibility of catch history being affected by exceptional circumstances in any one year has been addressed by the recommendation that only the best three of the four year period 1994-97 be taken into account. Persons who believe that their catch history has been affected by exceptional circumstances will have the opportunity to appeal when the catch verification process has been completed, quota has been allocated and Permits varied or granted. If you are not satisfied with your quota allocation, you can appeal after a Permit has been varied or granted, and the quota appears as a condition of the Permit. You will be notified of your full appeal rights when you receive your Permit and/or quota allocation.”
As I understand the effect of this circular letter, the ITQ system can accordingly entail a determination by the reviewing delegate of whether or not catch history has been affected by circumstances in particular cases, and that is a matter which will be taken into account when the delegate makes a decision. In the present matter AFMA’s reviewing delegate advised the applicant that as part of her review she could consider whether there were any special circumstances or cogent reasons which would cause her to depart from AFMA’s quota allocation policy in the applicant’s case (see T34). An application to this Tribunal for a review of the delegate's decision can therefore also, in my view, entail a determination by this Tribunal of whether or not an applicant’s catch history has been affected by special or exceptional circumstances. I note that in a number of decisions of this Tribunal following the adoption of the ITQ regime, Tribunal members have examined this question and have referred to the interpretation of the concept of exceptional circumstances in other contexts. It seems to me that this question may be different from the approach referred to by Brennan J in Re Drake (No.2), and entails a test which applicants might satisfy more readily, since this question may not afford as much weight to the relevant policies (which, of course, assist decision-makers to arrive at consistent decisions and thus enhance the satisfaction with the decision-making process of persons affected by those decisions). Nevertheless, as the circular letter (T23) contemplates that there can be an examination of exceptional circumstances, I propose to determine this matter in accordance with the remarks of Brennan J as set out in paragraph 33 above, and also to examine the question of whether the applicant’s catch history has been affected by exceptional circumstances.
35. In view of the matters relied upon by the applicant, and having regard to the decision in Graham’s case, I find that there are cogent reasons peculiar to the applicant which would make it inappropriate for AFMA to determine the applicant’s quota by reference to the best available catch in the years 1994 to 1997 and that it would be unjust to the applicant to do so. Indeed, the reviewing delegate accepted that the applicant’s inability to hold an SSF hook permit from January 1994 to April 1996 constituted cogent reasons for departing from a strict application of the quota allocation policy. She decided to substitute the years 1992, 1993, 1997 and 1998 as the period to demonstrate catch history, instead of the period from 1 January 1994 to 31 December 1997. Counsel for AFMA submitted that the selection of these years sought to ascertain the applicant’s relative economic position in the SSF (as required by FMP8, i.e.T17) whilst promoting equity as between all operators in the SSF, and further, that the inclusion of the years 1997 and 1998 accorded with the SSAP’s findings that:
· the myriad of input controls in the SSF became less marked from 1994 (see T19, pages 200-203); and
· a more recent catch history accurately reflects the present economic positions of the operators (see T19, page 204).
I cannot see that the lessening of input controls from 1994 would be relevant to the applicant, because when his permit was reinstated in April 1996, it was subject to a number of conditions relating to input controls, as well as the limitation requiring the applicant only to operate out of Cape Jervis. As to the second point, whilst the Panel made statements to the effect referred to by counsel, this was in the context of a comparison with the recent shark catch of other individuals in order to measure the applicant’s relevant economic position, and at page 205 the Panel proceeded to recommend the period of four years ending 31 December 1997 (see T19, page 205). This was the period which the Panel thought it appropriate to examine in order to ensure that the present relative economic positions of fishermen were accurately reflected (see T19, page 197.5). The Panel apparently regarded this as satisfying its proposition that the more recent the catch history the better would be the minimising of differential economic impacts on individual fishermen in the process of ITQ allocation (see T19, page 203.2). In the present matter I find that the applicant was unable to fish at all in the years 1997 and 1998 due to the continued deterioration of his osteoarthritis, and he had no catch history in those years. Further, he was not aware that failure to exploit his permit would result in a zero allocation of quota, and AFMA had not told him this (see exhibit A3, page 18). I therefore consider that the selection of the years 1997 and 1998 would be unjust to the applicant, and that his catch history in those years was affected by exceptional circumstances, namely the effects of his osteoarthritis. Whilst his medical condition is clearly serious and will continue to affect him, he is nevertheless optimistic that his proposed surgery will be successful and will give him a new lease of life (T40). The present matter is similar to Graham’s case, where the Tribunal found that the imposition of a catch history when the applicant was unable to engage in shark fishing because of a pre-existing hip injury tended to produce an unjust decision in the circumstances of that case. In my opinion, because the implementation of the ITQ policy as from 1 January 2001 was itself some three years after the end of the qualifying period selected by the policy, and because of the particular circumstances applicable to the applicant in this matter, AFMA, in applying its quota allocation policy by reference to catch history between 1994 and 1997, should have allocated quota by determining, from all of the information available to it, the applicant’s likely annual catch in the best three years between 1994 and 1997 if he had not been prevented from fishing because of the factors which had prevented him from doing so. This in turn would entail examining the applicant’s circumstances and operations in the period prior to 1994, when he was denied a permit by AFMA. I refer in more detail to this process in paragraph 43 below.
36. I accept the applicant’s evidence as to the special features of his fishing vessel and equipment, and its superiority to other shark fishing vessels located at Cape Jervis. He said that his ice box (with its capacity of 1.3 tonnes) had been full several times on his fishing trips, but this would be unusual and an exceptionally good catch, and the last time this had happened was in 1990 or 1991. He said that on a good day he would catch 200 to 300 kilos, but quite often only 30 to 40 kilos or less, and that if the fish were there, he could get up to 300 kilos in any one day. He said that as a “guesstimate”, he would catch about 5 tonnes a year and if he had devoted himself entirely to shark fishing activities to the exclusion of tourist activities, he said that he would add another 2 to 3 tonnes a year to that figure. He said that certain records of his catch history in the years before 1994 were produced in the earlier proceedings in this Tribunal, and were returned to him by AFMA under cover of a letter dated 26 January 1997 (exhibit R9), but he subsequently destroyed them. In cross-examination, the applicant provided estimates of the numbers of days per month when he customarily engaged in his fishing operations in the years 1991 to 1993, and his estimates varied from 5 or 6 days per month in January, being the busiest tourist period, to up to 20 days a month until the bad weather set in in July each year. The applicant’s evidence was of a general nature and I am left with unsatisfactory evidence on this issue, and an absence of documentary evidence of catch history in these earlier years.
37. In reviewing the evidence as to the applicant’s fishing activities prior to 1994, counsel for AFMA pointed out that the applicant had not complied with the verification requirements of FAP8, and submitted that to allow him to qualify for a different allocation of ITQ without satisfying these criteria would produce inequity as between all operators. It was further submitted that the catch verification process applied to the applicant’s claim for catch history provided for the equitable and consistent allocation of ITQs in the SSF in accordance with FAP8, and catch history verification was important to give fishermen confidence in the system of regulation introduced by AFMA and to ensure that allocation was fair to each fisherman. By way of response to AFMA’s contentions, the applicant said that the only records that he had had were submitted to the Tribunal in the earlier proceedings. He said that in part, his difficulty in obtaining documentary evidence was because the buyer at Cape Jervis was the party who was involved in his marital break-up, and there might be difficulties obtaining records from him. In addition, he admitted that a number of sales of catch were made for cash, and therefore no documents were available. The applicant also tendered a letter from a fish processor at Port Adelaide stating that he was a long-line fisherman in the years 1990 to 1994 and sold some fish to him, and normally this was approximately 100 to 300 kilograms and on one occasion he had about 997 kilograms (see exhibit A8). The applicant placed considerable reliance on the decision of this Tribunal in the earlier proceedings to reinstate his entitlement to a fishing permit after assessing his catch history. He thought it inappropriate that AFMA should require verification from him in respect of his catch history in the period prior to when he was denied access to the SSF, because the earlier decision constituted an “acknowledgment” that he had at least caught 2 tonnes or more in any two of the previous qualifying years, that is a total of 4 tonnes at least. He regarded the earlier decision as “verifiable documentation of very nearly the highest order” (see exhibit A3, at page 55).
38. On analysis, I do not think that the earlier decision of the Tribunal in favour of the applicant entailed a finding by the Tribunal that the applicant satisfied the requisite catch history of a minimum of 2 tonnes of school and gummy shark per year in at least two of the relevant years. According to the Tribunal’s reasons for decision, there was no convincing evidence as to what the applicant’s actual catch was in any particular year, and the applicant was forced to concede either that his estimate of the weight of shark caught by him in the years 1989 to 1993 was wrong or that the income declared by him from fishing for taxation purposes was understated (see paragraph 36 of the Tribunal’s reasons for decision). Further, the Tribunal said that witnesses called by the applicant to support his argument of involvement in the fish industry did not materially assist his case, and the Tribunal could not rely on those witnesses to corroborate the applicant (see paragraph 37 of the reasons). Further, his estimates of catch could not be supported by documentary evidence (see paragraph 39 of the reasons). Nevertheless, I find that because of this earlier decision by this Tribunal and the applicant’s view of its significance, the applicant did not think it necessary to keep certain receipts which had been used in the earlier proceedings and which were returned to him under cover of a letter from AFMA of 26 January 1997, and he accordingly destroyed them.
39. Once again, it is necessary to examine whether the application of the catch verification policy would tend to produce an unjust decision in the circumstances of the applicant’s case, and whether there are cogent reasons why the policy should not apply (see Re Drake and Minister for Immigration and Ethnic Affairs (No. 2), (supra)). In the present matter, I accept that the applicant honestly believed that he did not need to keep his records in respect of his activities in the years prior to 1994, in view of his understanding of the relevance and importance of the Tribunal’s decision in the earlier proceedings. Because in these circumstances he had destroyed his records, it seems to me that the application of the verification policy would operate unfairly to the applicant, and that there is good reason to excuse the applicant from compliance with it. The circumstances which gave rise to the destruction of the records are likely to be very unusual and perhaps unique to the applicant. Further, the documents which he did produce, namely the photographs comprising exhibit A6 and the letter from Harry Paul of The Fish Processors (exhibit A8) were consistent with the applicant’s oral evidence as to his fishing activities and the capacity of his vessel and equipment. Taking into account all of the circumstances, I consider that it was unfair to the applicant to allocate him a zero quota because of the lack of verification of his catch history. Because the applicant’s circumstances are so unusual, the allocation of quota to him notwithstanding the lack of verification of catch history should not in my opinion cause other operators to loose confidence in the fairness of the system applied by AFMA.
40. It was further submitted by counsel for AFMA that departure from the catch verification policy would affect the allocation of quota to other operators in the SSF, in circumstances where the other operators have conformed to the requirements of FAP8, have been allocated ITQs based on verified catch histories and have made investment decisions on the basis of their allocation of ITQs. I understand that if the applicant were to be allocated some quota instead of a zero allocation, some reduction would have to be made next year to the quota allocated to all other permit holders. However, it appears from the information before me that if some allocation were to be granted to the applicant, it should be of a relatively modest order, and the resulting adjustment made to the allocation of other operators would be insignificant.
41. Finally, counsel for the respondent relied upon FMP8 (being the paper entitled “Allocation of Fishing Concessions Where Management Arrangements Change”, i.e. T17). It was submitted that the application of the policies to the applicant would not produce a harsh and unfair result, and reference was made to Skoljarev v AFMA (see paragraph 33 above). As mentioned, one of the precepts of FMP8 is that any differential economic impacts of allocations on individual fishing concession holders are minimised unless there are reasons, justifiable with respect to AFMA’s legislative objectives, that dictate otherwise. In support of this contention, counsel for AFMA submitted as follows.
(a)There was insufficient evidence to support the applicant’s claim that his chronic arthritis had prevented him from fishing in the SSF since mid 1994. I consider that this submission is not well founded; there is ample medical evidence of the nature and effect of the applicant’s condition, and I accept his evidence that after his absence from shark fishing for some two and a half years, he found that the work was physically too onerous for him to continue when he went out on one trip in June 1996. Further, it was his inability to obtain a permit which had prevented the applicant from fishing in the SSF from 1994 until April 1996.
(b)Counsel for the respondent submitted that in the event that the applicant was totally incapacitated during the period from 1994 to 1999, he made a commercial decision not to employ a skipper. She referred to the applicant’s evidence when he was asked in cross-examination whether he had attempted to employ a skipper to run his vessel after he found on 17 June 1996 that he could no longer engage in shark fishing because of his osteoarthritis and his answer was that there was no-one in Cape Jarvis authorised to skipper his vessel because it required a Master 5 Certificate. Counsel further referred to the evidence of Captain Ferrao to the effect that a person holding a coxswain’s certificate would be qualified to skipper a vessel such as Encounter II and that on or after April 1996, there were 5 persons in the Cape Jervis vicinity, and 393 people in South Australia, who held current coxswain’s certificates.
In his recent statement (exhibit A12) the applicant said with respect to persons holding coxswain’s certificates that to the best of his knowledge, there was no-one resident at Cape Jervis who had the necessary qualifications and experience to utilise the much larger scale long lines and fishing operation entailed in using his vessel in the waters where he customarily operated.
Counsel for the respondent submitted that there was no evidence before me that the applicant made any real inquiries as to the existence of any suitable persons to skipper his vessel. Counsel referred to the relevance of the evidentiary onus of proof in administrative proceedings as explained in Re Lewis and Comcare [2002] AATA 197, and the following observations in paragraph 101:
“… and ultimately the tribunal, in considering the claim, can only act on the evidence before it, to do otherwise would be to commit an error of law. Thus in a practical sense, if not in a strict legal sense, it will be the responsibility of an applicant for review to ensure that there is laid before the tribunal all material which it will be necessary for the tribunal to have before it to enable it to come to a decision.”
Counsel further referred to the matter of Ileris and Comcare (1999) 56 ALD 305 in relation to the weight to be attached to the evidence given by the applicant in cross-examination compared with the applicant's later statements as to his reasons for not engaging a skipper.
It is true that the applicant apparently thought that any substitute skipper would be required to hold a Master 5 Certificate because of a condition of the Certificate of Survey/Registration of Encounter II (see his cross-examination on this issue, and also exhibit A11). However, after receiving information from Captain Ferrao as to the qualifications of coxswains, he conceded that this condition of the Certificate of Survey/Registration only applied when Encounter II was used for the purposes of carrying passengers. The applicant’s initial understanding as to the requirement for a Master 5 Certificate would, of course, explain why he did not engage a substitute skipper, since no-one with this qualification was available at Cape Jervis. As regards other qualified persons, namely persons holding coxswain’s certificates, whilst there is evidence from Captain Ferrao that such persons were legally qualified to skipper Encounter II, there is no evidence that any such persons had the necessary practical experience to skipper Encounter II on commercial shark fishing activities, having regard to its specialised gear and the limitation on the fishing permit that the vessel was restricted to operating out of Cape Jervis. The evidence from Captain Ferrao accordingly only goes part of the way towards refuting the applicant’s explanation as to why he did not engage a substitute skipper. Further, from the evidence before me Cape Jervis is a small fishing village, and the applicant has lived there for many years. It is a reasonable inference that the applicant would know whether or not there were any other residents in the area who had the necessary practical experience to skipper Encounter II on shark fishing operations, and he has said that to the best of his knowledge there were no such persons until recently (see exhibit A12).
On the evidence before me, I am unable to find that the applicant made “a commercial decision not to employ a skipper”, as contended for by counsel. I find that if the applicant turned his mind to the possibility of engaging a skipper to use his permit after his final fishing trip in June 1996 (and this is not clear on the evidence) he did not do so because he understood at the relevant time that there was no-one available at Cape Jervis who was qualified to act as a substitute skipper for shark fishing activities.
(c)It was further contended by counsel for AFMA that there was no evidence to support the applicant’s claims of financial hardship for the period following his grant of a permit in 1996. As to this, the applicant did make reference to the costs of the earlier proceedings before this Tribunal, and to costs associated with the property settlement following the breakdown of his marriage, but there is no evidence as to how this interfered with his utilisation of his shark fishing permit, after this was reinstated in 1996. However, the applicant also referred to the devaluation of his permit in consequence of the zero allocation of quota as from 2001. In my view, having regard to the applicant’s evidence that this zero allocation did cause financial hardship to him in that he could then only utilise his permit by buying in quota or by employing a skipper, and having regard to the circumstances referred to in paragraph 43 below, I find that the zero quota allocation has produced financial hardship and was unjust to the applicant, and constitutes a reason in this matter for departing from AFMA’s policy.
(d)Counsel for the respondent further contended that the evidence submitted by the applicant supported a finding that he made a commercial decision not to utilise his permit since mid 1994. In my opinion, this submission is contrary to the evidence that the applicant had been denied a permit during the period from 1994 until April 1996, when his permit was reinstated following the determination of this Tribunal in the earlier proceedings. This submission is also contrary to the evidence as to the applicant’s physical condition, because when he went out on a fishing trip in June 1996 he found out after an absence from shark fishing for some 2½ years that he was unable to cope with the heavy work involved. I therefore reject this submission, subject however to my remarks in paragraphs 42 and 43 below.
(e)Finally, in the context of FMP8 counsel for the respondent submitted that the applicant’s claimed incapacity and financial hardship were a reflection of his individual economic position relative to other operators and not a short-term aberration in the measurement of that position. If quota had not been introduced into the SSF these factors would still have restricted the value the applicant could have derived from his permit. Further, the respondent contended that there had been no differential economic impact of the nil shark quota allocation decision on the applicant as he had not fished in, or been dependent upon the fishery, since mid 1994.
42. The submission referred to in paragraph 41(e) is clearly justified by FMP8, and in particular AFMA’s approach to “endeavour to minimise any adverse differential economic impacts on individual operators”, and “any differential economic impacts of allocations on individual fishing concession holders unless there are reasons, justifiable with respect to AFMA’s legislative objectives, that dictate otherwise.” However, in my view, when assessing the issue of relativity with other operators, it is necessary to take into account the date at which that relativity was assessed. Whilst the new ITQ regime was not introduced until 1 January 2001, the allocation of ITQs and the assessment of relativities between operators was based on catch history between 1994 and 1997. From the evidence before me, it is clear that the applicant was increasingly affected by osteoarthritis, and that until about 1998 his condition slowly deteriorated and then rapidly deteriorated (see paragraph 23 above). Whist he found that he could not manage shark fishing when he went on the trip on 16 and 17 June 1996, after an absence from shark fishing of 2½ years when he did not have a permit, it would not necessarily follow that if it had not been for that enforced absence, he would not have continued to engage in commercial shark fishing from and after 1994. I find that it is likely that because of his slowly deteriorating condition, the extent of his fishing activities would have gradually diminished over the qualifying period of 1994 to 1997 and then ceased altogether because of the rapid acceleration of his osteoarthritis in 1998. It is clear that the applicant did reach a stage where he decided not to continue to engage in commercial shark fishing, because he sold his gear to other fishermen in (as far as he recalls) 1998.. Other operators had their allocations determined by reference to catch history from 1994 to 1997, in accordance with the ITQ policy which became operative in January 2001. They might have substantially increased or reduced their fishing operations after 31 December 1997, or perhaps might have been totally prevented from engaging in fishing operations due to illness after that date, but I assume that these events would not have impacted on the ITQs which had been arrived at according to their catch history from 1994 to 1997. Indeed, if the applicant had established a catch history between 1994 and 1997, but then sold his shark fishing gear in 1998, I assume that his ITQ would not have been affected. In my opinion, if the above assumptions are correct, the correct application of AFMA’s new ITQ regime was to assess relativities between operators by reference to catch history during the qualifying period of 1994 to 1997. Accordingly, the applicant’s failure to engage in fishing activities after this qualifying period should not prejudice the applicant in the circumstances of this matter.
43. For all of the above reasons, I have concluded that the applicant should not have been denied an allocation of quota when AFMA implemented the new ITQ regime. In my opinion, the allocation of quota should have been determined by determining the applicant’s probable verifiable catch history in the best three years from 1994 to 1997 on the assumption that he had not been precluded from fishing during the period when he had been unable to obtain a permit (i.e. until April 1996, when his permit was reinstated). This determination should take into account the following matters.
(a)A determination should be made of the applicant’s catch history in (say) the best three of the four years preceding the qualifying period of 1994 to 1997, not with a view to substituting the applicant’s verified catch history during the best three of the four years prior to 1994 and treating that as his catch history during the qualifying period of 1994 to 1997, but as a starting point in determining what his catch history was likely to have been during that qualifying period, if he had not been prevented from fishing during that period.
(b)In making the determination under (a), all relevant circumstances should be taken into account, including:
· the fact that the applicant would no doubt have continued to use his vessel for his tourism/charter boat activities, and would not have engaged in commercial shark fishing on a full-time basis;
· the capacity of the applicant’s vessel and of his fishing gear, and his competence as a fisherman arising from his long experience in commercial fishing activities and his familiarity with the area in which he carried out those activities;
· the evidence of the applicant which, whilst unsatisfactory and imprecise, indicates that he was in a position to, and did, engage in commercial shark fishing activities reasonably intensively following his return to that activity after the decline in 1989 in his tourist related operations;
· the fact (as I have found) that his shark fishing activities would have gradually diminished because of the progression of his osteoarthritis and its increasingly adverse impact on his ability to engage in commercial shark fishing;
· any diminution in stocks of gummy and school shark in the area where the applicant customarily operated during the qualifying period of 1994 to 1997 compared with the level of stocks in the period 1 January 1991 to 31 December 1993; and
· the applicant should not be given credit for cash sales which were not declared for income tax purposes. In this regard I note that in Giorginis v Kastrati (1988) 49 SASR 371, Von Doussa J said, at page 376:
“A court should not, generally speaking, make a finding favourable to the plaintiff in a personal injury case that his income is otherwise than he has disclosed to the revenue authority unless the plaintiff admits the non disclosure. A fortiori, such a finding should not be made where the plaintiff denies that he has failed to properly disclose his income. Unless the plaintiff admits the falsity of his income tax returns the court should not speculate in his favour, for example that his pre-accident earnings were probably higher than he has disclosed. Rather, the court should adopt the income figures actually disclosed and base the assessment of damages on them. Again, if this results in a low assessment, that is the consequence of the plaintiff adhering to the accuracy of his income tax returns.”
In the present matter, where other operators have had their catch history assessed only after a strict verification process, the applicant should not in my opinion be given any credit for cash sales.
(c)In the circumstances of the present matter, it is of course unlikely that an assessment of the applicant’s probable catch history for the best three of the four qualifying years will be ascertainable with any precision. In cases where courts have the task of assessing damages, there are sometimes difficulties in calculating losses from the evidence before the court. In Callaghan v William C Lynch Pty Ltd (1962) 79 WN (NSW) 830, at 834, the Full Court of the Supreme Court of New South Wales said:
“Many cases illustrate that uncertainty in the quantification of damage, either in cases of contract or tort, does not prevent an assessment provided that some broad estimate can be made … Obviously the law will disregard possibilities that are slight or chances which are nebulous; otherwise all the circumstances of the situation must be taken into account … where precise evidence is obtainable the court naturally expects to have it. Where it is not, the court must do the best it can.”
In some cases, in a similar vein, courts have referred to using a “broad axe” approach in quantifying damages (see for example, Northern Territory v Mengel (1994) 95 NTR 8, at paragraph 272 and Watson, Laidlaw & Co Ltd v Pott (1914) 31 RPC 104, at 118 per Lord Shaw). Of course, this approach ordinarily would be wholly inappropriate where quota is to be allocated by AFMA so as to divide TAC between eligible operators in a way which minimises the economic impact of any changed policy on those operators, and would be inconsistent with AFMA’s policies, including in particular the catch verification policy, where other operators have had other quotas assessed strictly by reference to verified catch history. However, where these policies should not be applied to particular applicants for cogent reasons or because they would produce an unjust result, it may be necessary to make a broad assessment, and I consider that this approach should be adopted in the particular circumstances of the present matter.
(d)I note that the applicant claims that in consequence of the decision of this Tribunal in his earlier proceedings, he should be allocated a quota of 4 tonnes. For the reasons referred to in paragraph 38, I do not think that this is a correct analysis of that decision. It seems to me that an allocation of the order of half this claimed amount, that is 2 tonnes, may well be more appropriate so as to reflect the considerations referred to in subparagraphs 43(a), (b) and (c) above. However, clearly I am not in a position to assess the effect of the factors which I have identified, and AFMA is much better placed to assess these matters.
44. I have not attempted separately to reiterate the applicant’s various contentions, since I believe that in considering and dealing with the respondent’s submissions I have also dealt with his contentions which are included in his somewhat discursive and emotive documentary and oral evidence and submissions.
45. My above reasons are based on the ITQ policy notified by AFMA to fishermen and other interested parties on 6 September 1999, where the relativities between permit holders was determined wholly by reference to catch history during the qualifying period of 1994 to 1997. As I understand it, the applicant’s quota will now be determined by reference to an amended policy to be adopted by AFMA in substitution for that policy, which has been held to be flawed. If in consequence of the decisions of the Federal Court and this Tribunal in Fischer’s case, AFMA’s amended policy entails making an allocation to permit holders based on the intrinsic value of those permits, the applicant, in common with other permit holders, would of course be entitled to an allocation of quota calculated in accordance with the stipulations of that amended policy. If the amended policy also entails a supplementary allocation of quota based on catch history in order to minimise the economic impact on permit holders, then the applicant should not complain if he is excluded from that supplementary allocation in view of his decision in about 1998 to withdraw from commercial shark fishing, as evidenced by the sale of his fishing gear. However, it is not appropriate for me to speculate as to the contents of the amended policy, or how it might affect the applicant.
46. For the reasons referred to above, I set aside the decision under review and remit the application to the respondent for reconsideration in accordance with these reasons.
I certify that the 46 preceding paragraphs are a true copy
of the reasons for the decision herein
of Deputy President DG JarvisSigned: .......................................................................................
N. Quirke AssociateDate/s of Hearing 4 & 5 August 2003 and 10 September 2003
Date of Decision 15 September 2003
Counsel for the Applicant In Person
Counsel for the Respondent Ms A Dornau
Solicitor for the Respondent Dibbs, Barker Gosling
2
5
0