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Federal Court of Australia - Full Court Decisions |
Last Updated: 10 February 2006
FEDERAL COURT OF AUSTRALIA
Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3
FISH AND FISHERIES – Quotas – Quota condition on
permit – Authority allots quota to fisherman – Application to
Administrative
Appeals Tribunal for review of allocation – Thereafter
fisherman sells permits and quota – Dismissal of application by
Tribunal
as frivolous and vexatious on ground that fisherman’s interests no longer
affected by allocation.
ADMINISTRATIVE LAW – Fisheries
– Quotas – Authority allots quota to fisherman – Application
to Administrative Appeals Tribunal
for review of allocation – Thereafter
fisherman sells permits and quota – Dismissal of application by Tribunal
as frivolous
and vexatious on ground that fisherman’s interests no longer
affected by allocation.
Fisheries Management Act 1991
(Cth), ss 32, 95, 165
Administrative Appeals Tribunal Act 1975
(Cth) s 42B(1)(a)
Fisheries Administration Act 1991 (Cth),
ss 5, 6, 7
Re Williams and Australian Electoral
Commission [1995] AATA 160; (1995) 38 ALD 366 applied
Director General Security v
Sultan (1998) 90 FCR 334 cited
Transurban City Link Ltd v Allan [1999] FCA 1723;
(1999) 95 FCR 553 applied
Allan v Transurban City Link Ltd [2001] HCA 58; (2001) 208
CLR 167 considered
Pawsey v Armstrong (1881) 18 Ch D 698
cited
Weiner v Harris [1910] 1 KB 285 cited
Addiscombe Garden
Estates Ltd v Crabbe [1958] 1 QB 513 cited
Street v Mountford [1985] UKHL 4;
[1985] AC 809 cited
General Steel Industries Inc v Commissioner for
Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
cited
PAUL FEARNLEY v
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
VID 342 OF
2005
FINN, SUNDBERG and EMMETT JJ
10 FEBRUARY
2006
MELBOURNE
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
|
BETWEEN:
|
PAUL FEARNLEY
APPELLANT |
|
AND:
|
AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
RESPONDENT |
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The appellant pay the respondent’s costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
REASONS FOR JUDGMENT
FINN and SUNDBERG JJ
INTRODUCTION
1 The appellant was at material times a fisherman in the Southern Shark Fishery (SSF). The respondent (AFMA) manages the SSF under the Fisheries Management Act 1991 (Cth) (the Act). The appellant was not satisfied with the quota of shark allocated to him by AFMA in relation to the 2001 fishing season (1 January to 31 December 2001), and on 13 August 2001 applied for review of the allocation by the Administrative Appeals Tribunal. By contract made on 17 December 2001 he sold the quota, and transferred to the purchasers the fishing permits to which the quota was attached. In consequence of those events the Tribunal dismissed his application as frivolous and vexatious pursuant to s 42B(1)(a) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). He appeals from that dismissal.
LEGISLATIVE BACKGROUND
Fishing permit provisions
2 A person must not engage in commercial fishing in the Australian fishing zone without holding a fishing permit or acting on behalf of the holder of a fishing permit: s 95 of the Act. Section 32 provides for the grant of fishing permits. Subsection (1) provides:
"AFMA may, upon application made in the approved form, grant to a person a fishing permit authorising, subject to subsections (1A), (1B), (1C) and (1D), the use by that person, or by a person acting on that person’s behalf, of an Australian boat for fishing in a specified area of the AFZ or a specified fishery."
Where an Australian boat is specified in the permit, the permit authorises the use of the boat as mentioned in subs (1): subs (1A). The permit does not authorise the use of an Australian boat unless the boat complies with any conditions to which the permit is subject: subs (1C). Subsection (5) specifies a number of conditions to which a fishing permit is subject. It is also subject to such other conditions as are specified in the permit: subs (6)(a). By subs (7) the conditions that may be specified in a fishing permit include, but are not limited 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 methods or equipment that may be used to take fish; or
(e) the methods or equipment that may be used to process or carry fish."
Subsection (10) provides:
"Except where a fishing permit is stated to be non-transferable, AFMA may, on the application of the holder of the permit and of another person as proposed transferee, transfer the permit to that other person."
Section 95(1)(d) provides that the holder of a fishing permit must not contravene a condition to which the permit is subject. Contravention is an offence.
Review provisions
3 By s 165(2) a person affected by a "relevant decision" of AFMA who is dissatisfied with the decision may request AFMA to reconsider it. A decision under s 32 is a relevant decision for the purposes of s 165(2): s 165(1). AFMA must reconsider the relevant decision and may make a decision in substitution for or revoking it: subs (5). Where, as a result of a reconsideration under subs (5), AFMA makes a decision on review either in substitution for or revoking the relevant decision, it must inform the person who made the request of the result of its reconsideration: subs (6). Subsection (7) provides that an application may be made to the Administrative Appeals Tribunal for review of a "reviewable decision". A reviewable decision is one made by AFMA under subs (5): subs (1). Subsection (11) provides:
Where a relevant decision is made and the person who made the relevant decision gives to a person whose interests are affected by the decision written notice of the making of the decision, that notice must include a statement to the effect that a person affected by the decision:
(a) may, if the person is dissatisfied with the decision, seek a reconsideration of the decision by AFMA under subsection (2); and
(b) may, subject to the Administrative Appeals Tribunal Act 1975, if the person is dissatisfied with a decision of AFMA upon that reconsideration, make application to the Administrative Appeals Tribunal for review of that decision."
Subsection (12) provides:
"Where AFMA makes a reviewable decision and gives to a person whose interests are affected by the decision written notice of the making of the decision, that notice must include a statement to the effect that, subject to the Administrative Appeals Tribunal Act 1975, application may be made to the Administrative Appeals Tribunal for review of the decision to which the notice relates by or on behalf of a person whose interests are affected by the decision."
THE PERMIT AND THE SALE
The fishing permit
4 On 18 December 2000 AFMA issued fishing permit No 1606C to the appellant. The permit authorised him to use the boat Jean Bryant for commercial fishing in the SSF, subject to the conditions specified in schedule 4. The conditions specified include condition 25:
"This fishing permit is not transferable except by application on the approved forms to AFMA. Subject to AFMA approval, only whole permit and quota packages may be transferred in 2001."
The permit is stated to have effect from 1 January to 31 December 2001. The appellant also held fishing permit 1606 relating to a different vessel, the Albatross II. That permit is in a similar form to permit 1606C.
Delegate’s decision
5 On 18 December 2000 AFMA imposed quota for school and gummy shark on the appellant’s permit. The appellant sought a reconsideration of the 18 December decision. The decision on the reconsideration is contained in AFMA’s delegate’s letter to the appellant dated 15 May 2001. It indicates that as part of AFMA’s implementation of quota management of the SSF, it had invited fishermen to have their catch history verified for the best three years in the period 1994 to 1997. Although the appellant had applied for a licence in 1993, he did not obtain one until 1997, and accordingly did not have a catch history in the relevant period. In order to get around this difficulty, the delegate verified a catch history for the appellant for the years 1992, 1999 and 2000. Based on this history the delegate allocated the following quota for the 2001 fishing season: School Shark – 119 kg and Gummy Shark – 15,667 kg. The delegate described this as "an increase of 15,786 kilograms on your previous allocation". It thus appears that the 18 December 2000 quota was nil. The delegate set aside that decision.
The sale
6 The "Fishing Quota Sale Contract" in the appeal book is undated. Recital A is as follows:
"The Vendor is the owner of a Fishing Quota Type Southern Shark Fishery Gummy Shark Quota currently for 15,667 kg and School Shark Quota for 119 kg held in connection with AFMA permits 1606 and 1606C and associated Tasmanian Fishing Licences as described in Certificate No TO42742."
By clause 1 the purchasers agree to pay $229,950.50 plus GST:
"which amount shall be payable by a deposit equal to ten per centum of the price on signing (which amount has been paid) with the then residue plus GST on 17th December 2001 or earlier by mutual agreement."
(It thus appears that the undated contract was signed at some time before 17 December 2001). Clause 2 is in part as follows:
"2.2 Only the Quota identified herein is the subject of the change of beneficial ownership pursuant to this Contract.
2.3 Each party shall make due and diligent application for transfer of the Quota and shall sign all forms as and when required.
2.4 The beneficial ownership of the Quota herein sold shall pass to the Purchaser when the full purchase price plus GST thereof has been paid to the Vendor .... The payment shall be made to Bass Marine Trust Account, agent for the Vendor, to hold in trust pending AFMA approval of the transfer."
7 Clause 3 is as follows:
"That whilst the said AFMA permits 1606 and 1606C and the Tasmanian Fishing Licences described in Certificate No. TO42742 are required to transfer to the Purchaser in connection with the sale of Quota it is expressly agreed between the parties as follows:-
(a) the Vendor shall have the unlimited use, free of charge or cost, permits and licences to attach and use as the Vendor shall deem fit, save only, for use being consistent with the conditions associated with such Licence and Quota for so long as the Vendor shall desire save only that the Vendor shall pay the annual renewal fees that attach to such licence and permits;
(b) that should the Licences and Permits become transferable separately from the Quota herein sold then the Vendor shall forthwith transfer the said Licence and Permits back to the Vendor’s absolute ownership on notice without payment of any type or kind save that statutory transfer fees, if any, shall be paid by the Vendor;
(c) the Purchaser acknowledges that their proprietorship of the said Permits and Licence are subject at all times to their obligation to the Vendor as hereinbefore defined and should, for any reason, the Purchaser propose a sale or disposal of the Quota that requires a transfer of the Licence and Permits to their new Purchaser, then subject to the Vendors consent, such sale or transfer shall be subject to the obligations herein and the Purchaser shall procure from the new Purchaser, a like covenant in favour of the Vendor before the due transfer of the Licence and the Permits; and
(d) that the entitlement to use the unused Quota for the current year shall remain with the Vendor for the Vendor to complete the Quota with the benefit of the next year’s Quota being available to the Purchaser."
Transfer of permits
8 On 8 December 2001 the purchasers signed an Application for Transfer of Permits. The appellant signed on 10 December. The application related to permits 1606 and 1606C, and stated that the Albatross II was being transferred along with the permits. The application form recorded that the permits expired on 31 December 2001. The form bears an AFMA stamp "Entered 11 December 2001 – Licensing Register". According to the Tribunal, AFMA approved the transfer of the permits "in about the middle of December 2001".
THE TRIBUNAL’S DECISION
Who is entitled to make an
application under the Act?
9 The Tribunal noted that s 165(7) of the Act provides only that an application may be made to the Tribunal for review of a reviewable decision, and does not specify that the person who may apply must be a person who is affected, or whose interests are affected, by the decision. However, in providing for review of a decision made by AFMA, s 165(2) speaks of "a person affected by a relevant decision". In providing for notification of the right to seek review of a reviewable decision, subs (12) speaks of "a person whose interests are affected by the decision". Subsection (11) requires AFMA to give a person "whose interests are affected by the decision" notice of the making of the decision, which notice must contain a statement of certain rights of the "person affected by the decision".
10 The Tribunal concluded that the right to seek review of AFMA’s reviewable decisions is limited to those who are affected by those decisions and does not extend to any broader group. Neither party took issue with this aspect of the Tribunal’s reasoning.
Were the appellant’s interests affected at time of application?
11 The Tribunal was of the view that at the time he lodged his application on 13 August 2001 the appellant was a person whose interests were affected by AFMA’s decision. That was because he held a permit granted under s 32 of the Act subject to conditions that limited the quantity of shark he could catch in the SSF in the 2001 fishing season.
Were the applicant’s interests affected after the transfer?
12 The Tribunal was of the view that:
"With the sale, he transferred his right to fish commercially in the SSF. While the permits continued to be transferred to the Purchasers, it could not matter to him whether the amounts of quota attached to those permits were altered in any way even if they were altered as a result of a variation of his quota in the 2001 fishing season. He could not fish in the SSF and he did not receive or lose any remuneration based on the quota the Purchasers could fish by using the permits. The price had already been negotiated and agreed upon. Even if AFMA’s decision relating to the 2001 fishing season had some effect on the next or subsequent fishing seasons, it could not affect Mr Fearnley’s interests while the permits were transferred to the Purchasers."
13 The Tribunal rejected the appellant’s argument that clause 3 of the contract of sale conferred a continuing interest on the appellant because of the possibility that the purchasers might transfer the fishing licences and permits back to him. The Tribunal noted that as the law stood, quota and permits are inseparable: a quota cannot be transferred without also transferring the permits. As the Tribunal said, "Quota is simply a condition of the fishing permit that is transferred". It has no separate identity apart from the permit, and thus no identifiable separate value. The Tribunal concluded:
"Whether or not the Act will be amended to allow the separation of permits and quota is a matter for speculation; nothing more .... While the future remains speculative, I do not consider that Mr Fearnley’s agreement with the Purchasers regarding the permits can give him any interests that can be said to be currently affected by AFMA’s decision. I must decide the issue of his interest at the present time and not on the basis of what may occur in the future."
Dismissal of application as frivolous and vexatious
14 Section 42B(1)(a) of the AAT Act empowers the Tribunal, "at any stage of the proceeding", to dismiss an application if it is satisfied that it is frivolous or vexatious. After referring to Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366, Director General Security v Sultan (1998) 90 FCR 334 and the decision of the Full Court in Transurban City Link Ltd v Allan [1999] FCA 1723; (1999) 95 FCR 553, the Tribunal said:
"This too is a case that, on the law as it exists today, will lead to no practical outcome for Mr Fearnley .... [The application] is futile and so [it] must be regarded as frivolous and vexatious to continue it."
Granting a fishing permit to the appellant
15 The Tribunal rejected a submission that the Tribunal should require AFMA to grant him a permit with the appropriate endorsement entitling him to fish in the SSF. It said it had no power to make such an order. It was AFMA’s function to issue permits. The Tribunal was empowered to review AFMA’s refusal of a permit application, and if appropriate, to substitute a decision that an applicant be granted a permit. Save for its power to substitute such a decision, it had no power to grant permits.
RELEVANT AUTHORITIES
Williams
16 Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366 was a decision of the Administrative Appeals Tribunal constituted by the Tribunal President (Mathews J) and Beaumont and Hill JJ. It involved an application to dismiss proceedings before the Tribunal on the basis either that the applicant had no standing under s 27 of the AAT Act, or that the proceeding was frivolous or vexatious and should be dismissed under s 42B of that Act. At the time he brought the application, the applicant had an interest which was affected by the disputed decision. However, that interest was dependent on the occurrence of a future event, and by the time of the hearing, the possibility of that event occurring had ceased to exist. The Tribunal said at [27] to [28], [37] and [39]:
"The question thus arises as to whether a person who had standing under the AAT Act to apply for review of a disputed decision should be entitled to maintain the proceedings notwithstanding that the underlying interest which provided that standing has ceased to exist.
It is here that the matters to be considered under the issue of standing become inextricably connected with those which are raised under s 42B of the AAT Act.
... where, as here, the significant factual matters are agreed between the parties, and the only issues in dispute relate to the legal consequences which follow, the genuineness of the applicant’s belief as to the legitimacy of his claim must bow before a finding that, as a matter of law, no legitimate purpose can be achieved by continuing with the proceeding. And this is the finding we have reached in this case.
...
In this case the outcome of the proceedings, whether successful to the applicant or otherwise will be devoid of any practical effect .... The interest which gave the applicant standing to commence the proceedings has long ceased to exist. He has no legitimate interest in pursuing them further. Accordingly, in our opinion, while the proceedings were not instituted vexatiously, they have become vexatious."
The application was accordingly dismissed under s 42B of the AAT Act.
Transurban
17 The appellant in Transurban applied to the Tribunal to review a decision of the Development Allowance Authority to issue a certificate in relation to certain infrastructure borrowings in connection with the construction of a toll road in Melbourne. Such a certificate entitled the holder to concessional taxation treatment. Transurban held such a certificate. At the time of his application the appellant owned a house near the road. Thereafter he sold the house and moved to a location far removed from the road. The main question for the Full Court (Black CJ, Hill, Sundberg, Marshall and Kenny JJ) was whether the appellant was a person affected by the decision to issue a certificate to Transurban. It was held that he was not.
18 A subsidiary question was whether, if the appellant was a person affected at the time he made his application for review, he ceased to have that character when he moved house. Although it was not necessary for the Court to decide this question, it did consider it. In doing so, it had in mind the words of s 27 of the AAT Act – "a person ... whose interests are affected by the decision" – and those of s 119(1) of the Development Allowance Authority Act 1992 (Cth), the statute under which certificates were issued – "a person who is affected by a reviewable decision". Their Honours said at [60]:
"The question here is whether, if the change of circumstances arises after the date of application but before hearing or decision, the Tribunal must continue with the review on the basis of an accrued right conferred either by s 27 of the AAT Act alone, or in combination with s 119 of the DAA Act."
19 Speaking of Williams, the Court said at [66]:
"In practice it made no difference to the result which would follow. As their Honours observed at 374, because the applicant's interest which gave him standing had long ceased to exist, there was no legitimate interest in his pursuing the application further and accordingly the proceedings should be dismissed as vexatious, notwithstanding that there was an arguable basis for challenging the decision. However, the decision could be seen as supporting the view that the question of standing is to be determined only at the outset of the application and that thereafter, if the matter is to be dismissed, it is because it has become frivolous or vexatious."
The Court said at [69] that it was unnecessary to determine the issue posed at [18]
"for the obvious reason that whether standing is conclusively determined at the time of review but the application becomes vexatious if circumstances change, or whether standing may be reconsidered if circumstances change, the result is the same. The proceedings will be dismissed. In the present case had we been of the view that Mr Allan did have standing at the time of instituting the application to the Tribunal for review, we would have been of the view that, had circumstances changed to take away from him the interest in the proceedings he had at the time of application, his application should be dismissed."
20 An appeal to the High Court was dismissed: Allan v Transurban City Link Ltd [2001] HCA 58; (2001) 208 CLR 167. The majority (Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ) did not deal with the subsidiary issue canvassed in the Full Court. However, Kirby J, who dissented, said at [80]:
"To the respondent’s suggestion that the appellant was obliged to demonstrate that his interests were affected by the decision in question throughout the review process, the answer must be given that this is not what the legislation says. It is certainly not the way in which the AAT Act has been interpreted. That does not mean that a supervening change in the position of the person applying for review of the decision, or in that person’s ‘interests’, would be irrelevant to a final decision of the AAT or, indeed, as to whether a decision would be made by it. But it is irrelevant to the establishment of the preconditions to the initiation of review for which ss 119 and 120 of the DAA Act and ss 25 and 27 of the AAT Act respectively provide."
The footnote to the third sentence is to s 42B of the AAT Act. Thus, while rejecting any requirement of continuous affection, his Honour accepted that s 42B can, in an appropriate case, be used to terminate a proceeding where there has been a change in the "interests" of the applicant in the course of the review process.
GROUNDS OF APPEAL
21 Only six of the eleven grounds of appeal were pursued.
Grounds 4 and 6
22 The complaint here is that the Tribunal erred in finding that the effect of the contract was that the appellant had no interest in the permits and the quota after 2001, and ought to have held that he retained a reversionary interest in the permits and/or quota sold. The Tribunal asked itself the question:
"Once his permits were transferred to the Purchasers, did Mr Fearnley continue to have an interest affected by AFMA’s decision in relation to the 2001 year?"
It answered that question in the negative. In this connection it found as follows:
• the appellant sold his permits
• with the sale he transferred his right to fish commercially in the SSF
• the purchasers applied to AFMA for the transfer of the permits
• AFMA approved the transfer and transferred the permits to the purchasers
• so long as the purchasers held the permits, it could not matter to the appellant whether the quota was altered
• the contract made provision for the transfer of the permits back to the appellant in certain events
• quota is simply a condition of a fishing permit that is transferred; it has no separate identity apart from the permit.
23 The appellant’s initial case seems to be that he did not sell his permits. The contract related solely to his quota. The appellant’s written submissions include this passage:
"Importantly the Contract:
• is expressly in relation to the quota as opposed to the permit (Recitals A and B, clauses 1 and 2);
• is in relation only to the quota given under the decision of AFMA, namely 15,667 kg gummy shark and 119 kg school shark."
As we understood the submission, it was that because the permits were not in fact sold, the Tribunal was in error in concluding that the appellant had no interest that was affected by the decision.
24 It may be that in the events that have happened the precise terms of the contract no longer matter. Section 32(10) of the Act empowers AFMA, on the application of the holder of a fishing permit and the proposed transferee, to transfer the permit to the proposed transferee. The appellant and the purchasers applied for a transfer, and AFMA transferred the permits. The Tribunal’s findings, which were eminently open to it, appear to us to make the preceding contract irrelevant. In any event, the contract does not on its proper construction relate only to quota. Recital A is set out at [6]. It says that the appellant is the owner of a fishing quota held in connection with AFMA permits. Recital B’s reference to "Vendor’s Quota" is to the quota held in connection with the permits, as is the Quota the subject of the sale in clause 1.
25 The opening part of clause 3 is somewhat garbled – "whilst the said AFMA permits ... are required to transfer to the Purchaser ...". Presumably what is meant is that the permits "are required to be transferred" to the purchaser in connection with the sale of the quota. That would accord with the description of the quota in Recital A – "Quota ... held in connection with AFMA permits", and with clause 2.3. By the time the parties had executed the contract they had already signed the Application for Transfer of Permits. Thus, the obligation in clause 2.3 to sign all forms required "for transfer of the Quota" is a reference to the transfer of the permits without which the Quota, as a "condition" attached to the permits, could not get across to the purchasers. This understanding of clause 2.3 conforms with the structure of the Act. Similarly, the "approval of the transfer" in clause 2.4 is a reference to the transfer of the permits. Clause 3(b) reflects the reality that the permits will, as a result of the sale, pass to the purchasers. The purchasers’ obligation to "transfer [them] back to the Vendor’s absolute ownership" will arise only if it should become possible to transfer the permits "separately from the Quota". That event will happen only if the Act is amended to unbundle permits and their inhered quota. Clause 3(c) also reflects the reality that "proprietorship" of the permits has passed to the purchasers.
26 The declamation in clause 2.2 that "Only the Quota ... is the subject of the change of beneficial ownership" is at odds with other parts of the contract, including the opening part of clause 3, and subclauses (b) and (c). As indicated at [24], it is also at odds with what the parties intended was to happen (and what in fact happened), namely the transfer of the permits. Indeed the contract as a whole is a strange mixture of reluctant acknowledgment of the realities of life under the Act and an embarrassed pretence that what was going to happen (and did happen) was to be treated as if it had not occurred.
27 Clause 2.2 is a "false label". There are many examples in the law where the court rejects the label that parties have attached to their contract. If the true relationship between parties revealed by their contract is that of partners, a declaration by them that they are not partners will avail them nothing. See, for example, Pawsey v Armstrong (1881) 18 Ch D 698 and Weiner v Harris [1910] 1 KB 285 at 290. Similarly, where for a term of years exclusive possession of land is passed from one to another, the parties’ attachment of the label "licence" will not alter its character as a lease. See Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513 and Street v Mountford [1985] UKHL 4; [1985] AC 809. The position is nicely stated by Lewison, The Interpretation of Contracts 3rd ed (2004) at 295-296:
"The nature of the relationship between the parties is to be determined by the substance of the obligations into which they have entered; and if their contract is described by a label inconsistent with that substance, or if the parties incorrectly state what they believe to be the effect in law of their contract, the label or the statement will be rejected.
Although parties are free to enter into what contracts they please (subject to questions of illegality and public policy), they are not competent to determine the nature of the relationship created by the terms of the contract into which they have freely entered. The meaning of the contract (in the sense of determining what is the substance of the obligations into which the parties have entered) is a question of construction; that is of ascertaining the presumed intention of the parties. However, the legal effect of the contract is to be determined as a matter of law; not as a matter of construction."
28 Accordingly, we reject the submission that the contract "is expressly in relation to the quota as opposed to the permit". And, as we have said, the permits were in fact transferred by AFMA to the purchasers.
29 As an alternative claim, the appellant contends that the effect of clause 3.1(b) is that the appellant "retained either a reversionary interest [or] an option to acquire the permits in particular circumstances". The phrase "reversionary interest" is not apposite to describe what the parties agreed to. In relation to property, a reversion is an interest therein that is not transferred but is retained by the owner. Here the appellant transferred the permits to the purchasers. However the latter agreed that if the permits were ever to become transferable separately from the quota, they would transfer them "back to the Vendor’s absolute ownership". They also acknowledged that their "proprietorship" of the permits was subject to the aforesaid obligation. We discern no error in the Tribunal’s approach to this issue, which we have recorded at [13]. In particular, the Tribunal’s observation that the quota is simply a condition of the permit and has no separate identity, is in our view correct.
30 We accept that clause 3.1(b) gave the appellant something that might be described as "an option to acquire the permits" in the event that, the permits having become transferable separately from the quota, the appellant gives the purchasers notice of that fact. However, as the Tribunal said, for this event to come to pass, the Act will have to be amended. After saying that whether the Act would be relevantly amended was a matter for speculation, the Tribunal added:
"If it were to be amended, it is equally open to speculate what entitlement a fishing permit would have. The quota would be separate and, in its current form as a condition of the fishing permit, it is the quota that determines the amount of shark that may be caught while the fishing permit determines that they may be caught at all. If the fishing permit and quota were simply separated in their current form, one wonders what value the fishing permit would have without its quota allocation."
The Tribunal went on to say, as recorded at [13], that the appellant’s agreement with the purchasers (clause 3.1(b)) did not give him an interest that was currently affected by AFMA’s decision. With this conclusion we agree.
31 The structure of s 32 of the Act (see [2]), the "approved" Fishing Permit and the Application for Transfer of Permit, show that a permit is personal to its holder. See in particular s 32(1), (1A), (5)(a), (8), (9) and (10). The suspension and cancellation provisions (ss 38 and 39) point in the same direction. The Act recognises licence holders, whether original or as transferees. The scheme of the legislation does not accommodate transferors who have a contractual right in certain events to a retransfer of a licence. For the same reason, the Act does not recognise the notion of a permit being held on trust, as clause 2.2 of the contract appears to contemplate.
32 It is also said that the Tribunal ought to have held that the appellant had a continuing obligation to pay licence fees in respect of the permits and/or quota, and that this obligation was "a sufficient interest". The Tribunal recorded the appellant’s agreement with the purchasers that he would pay the annual renewal fees that attach to the Tasmanian licences and the permits. It also found that the appellant continued to pay all annual fees for the permits and AFMA levy fees. The Tribunal was correct to say that the appellant’s contractual obligations to the purchasers with regard to the permits cannot give him any interest that can be said to be currently affected by AFMA’s decision.
33 The appellant also relied on his status as a fisherman who would continue to deal with AFMA and who was entitled to apply for permits and quota in future years. It is said that future decisions of AFMA are likely to continue to be based on historical factors, including previous quotas and catch history. The appellant claims that until it is set aside, the decision under review remains on foot and will affect future dealings between him and AFMA. Reliance is placed on PW Adams Pty Ltd v Australian Fisheries Management Authority (1995) 60 FCR 387 at 407. That decision is of no assistance to the appellant. The applicant there held the relevant permit up to its expiry date. Here, however, the appellant had disposed of his permit before its expiration. Because the appellant now has no permit to fish in the SSF, his previous quotas and catch history have no current relevance.
34 Next it is claimed that it is AFMA’s stated practice, "despite the expiry of a [permit] under review, to act upon a decision of the Tribunal in the present year". It is said that a determination by the Tribunal that the applicant ought to have been allocated additional quota will be, or is likely to be, acted upon by AFMA by the issue of a new permit with a quota under that policy. The practice referred to is said to be based on passages in the transcript of proceedings before the Tribunal where AFMA’s counsel said:
"It seems to be put on behalf of the applicant that AFMA intends to frustrate the intention of the legislature by asserting that the permit issued in 2000-2001 is an annual permit and it does not exist in 2004. That is not the respondent’s position at all. In fact ... it is almost an inevitable occurrence where this Tribunal deals with these kinds of applications that it is dealing with permits from a year that is past, and this respondent’s position almost invariably is that it will implement the Tribunal’s decision in relation to the present year."
But as counsel went on to say, that practice is not applicable to someone like the appellant who no longer holds a permit. If the Tribunal were to continue with the review, and were to set aside the decision under review and replace it with an increased quota allocation, that would accrue to the purchasers, the current permit holders.
35 The practice referred to is based on AFMA’s power in s 32(8) of the Act, of its own motion, to vary a condition of a permit "or specify a condition or a further condition to which the permit is to be subject". Obviously that power can have no application to someone who, at the time of the variation, is no longer the holder of a permit. The submission that the appellant has a subsisting interest on the basis of AFMA’s practice is based on the mistaken belief that it applies to someone who is no longer engaging in commercial fishing in the SSF.
36 Then it is said that even if the result of the review is that any alteration of quota benefits the purchasers, the appellant also has an interest as a fisherman in the same industry whose quota would be affected as a result. This is said to be admitted by AFMA’s counsel in argument before the Tribunal. We have read the passage in the transcript that was said to contain the admission. Counsel there referred to quota condition cases where persons other than the permit holder have interests that may be affected. Another permit holder may say that an increase in the applicant holder’s quota will mean a reduction in his own. Counsel said that would be an interest that would be affected by the reviewable decision. That is a fact situation quite different from the appellant’s. He cannot be affected by an increase in the quota attached to permit 1606C. He has no quota that can thereby be reduced, because he has no permit.
Ground 7
37 The Tribunal is said to have erred
"in ruling that the question of frivolity under s 42B(1)(a) of the AAT Act could be reviewed on the basis of a change of circumstances ...."
This curious formulation is made more comprehensible by what it is then said the Tribunal ought to have done, namely to determine the question of frivolity at the time the application is lodged. There is no substance in the apparent contention that the Tribunal had no power to determine the question of frivolity when it did. It ignores the words of s 42B(1)(a) of the AAT – "at any stage of the proceeding". See [14].
Grounds 9 and 10
38 The appellant claims in ground 9 that the Tribunal failed to consider, in relation to the issue of frivolity, the relief sought in his amended application, and ought to have found that
• "such relief was available to the Tribunal"
• the granting of such relief would be of practical utility to the appellant
• the application was therefore not frivolous.
Ground 10 repeats part of ground 9 by contending that the Tribunal erred in ruling that no new permit could be issued to the appellant as a result of the review.
39 The Tribunal set out the relief sought:
"1. The decision-maker’s decision to deny the applicant catch history for the period 1994 to November 1997 be declared null and void.
2. That the decision-maker should have allocated quota to the applicant in the amount of 33 tonnes.
3. That the decision-maker failed to take into consideration the relevant factor namely that the applicant fished in an area where there were no other fishermen or there were only few fishermen.
4. That the consequence of the decision-maker’s wrong decision created economic hardship for the applicant such that he had no option but to transfer his licence and quota.
5. That the transfer which contained the clause obliging the transferee to transfer back to the applicant his licence/permit once the respondent permitted the splitting of his licence/permit quota ... be validated by the respondent.
6. That the respondent acknowledges that the applicant has continued to pay annual fees for the relevant licence/permit and AFMA levy fees.
7. That the respondent grant a licence/permit to the applicant with the appropriate endorsement which entitled the applicant to fish in the SFF fishery."
40 The Tribunal correctly said at the beginning and again at the end of its reasons, that in view of its decision under s 42B(1)(a) of the AAT Act it did not need to consider whether or not the delegate’s decision on the total allowable catch was reviewable. As the Tribunal said:
"Quite apart from any other issues, I can only review a decision if it is the subject of an application. As I have dismissed the application, I have no proper foundation on which I may consider the matter at all."
That applies to paragraphs 1 to 4 of the amended application.
41 The Tribunal also rejected the appellant’s submission that AFMA should grant him a fishing permit with the appropriate endorsement entitling him to fish in the SSF. We have recorded what the Tribunal said at [15]. It is unexceptionable. That deals with paragraph 7 of the amended application.
42 The Tribunal could not have made an order in terms of paragraph 5. It had no power to order AFMA to "validate" a contractual provision the terms of which were not in dispute between the parties to it. It was not in dispute that the appellant had complied with his contractual obligations as to payment of fees. The Tribunal so found. There was no occasion for it to make an order in terms of paragraph 6, that the respondent "acknowledge" what was not in dispute between the contracting parties.
Ground 11
43 This contends that the Tribunal erred in summarily dismissing the application on the basis of frivolity. One of the reasons given for the Tribunal’s error in this connection is the "absence of settled law". Williams, Transurban in the Full Court, and the observations of Kirby J in the High Court, provide ample authority for the course the Tribunal took. It was submitted that it was wrong to dismiss the proceeding under s 42B in the absence of agreement between the parties as to the factual matters relied on by the Tribunal. Reference was made to the passage in Williams set out at [16]. The Tribunal’s power under s 42B to dismiss an application as frivolous or vexatious is no more fettered than a court’s comparable power. It is not a precondition to the exercise of the power that the parties are agreed as to the facts, and the Tribunal in Williams did not suggest it was. Rather, it was positing a clear situation in which the power could be used. In any event, the relevant facts were not in dispute. It was common ground that the permits had been transferred to the purchasers. It was the transfer of the permits that formed the basis of the Tribunal’s decision, not the contract. The contract was of course relevant, because it explained how the transfer came about. But it was the transfer that mattered.
44 For the same reason, we do not accept that the Tribunal was obliged to expatiate upon the interaction or relationship between the contract and the Act. We have engaged in that exercise at [23] to [28], and that has confirmed our view that the Tribunal was right in concentrating on what happened, rather than seeking to uncover the dissimulation sought to be practised by the contract.
45 Nor do we think there is any substance in the complaint that the Tribunal acted without properly directing itself as to the relevant considerations in relation to summary dismissal. It referred to what had been said in Williams on this topic, and quoted the observations of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.
CONCLUSION
46 The appeal must be dismissed.
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I certify that the preceding forty-six (46) numbered paragraphs are a true
copy of the Reasons for Judgment herein of the Honourable
Justices Finn and
Sundberg.
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Associate:
Dated: 10 February 2006
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IN THE FEDERAL COURT OF AUSTRALIA
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VICTORIA DISTRICT REGISTRY
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VID 342 OF 2005
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ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
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BETWEEN:
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PAUL FEARNLEY
APPELLANT |
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AND:
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AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
RESPONDENT |
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JUDGES:
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FINN, SUNDBERG & EMMETT JJ
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DATE:
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10 FEBRUARY 2006
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PLACE:
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MELBOURNE
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REASONS FOR JUDGMENT
EMMETT J
47 The appellant, Mr Paul Fearnley, has at various times been engaged in fishing activities in the Australian fishing zone. He was dissatisfied with the conditions on which the respondent, Australian Fisheries Management Authority (‘the Authority’), granted him a permit under the Fisheries Management Act 1991 (Cth) (‘the Management Act’) and applied for review by the Administrative Appeals Tribunal (‘the Tribunal’) of the Authority’s decision. The Tribunal dismissed his application as being frivolous. Mr Fearnley complains that the Tribunal made an error of law in so doing.
LEGISLATIVE FRAMEWORK
48 It is desirable to say something about the fisheries legislation, as well as the provisions for review of decisions made under that legislation.
THE FISHERIES LEGISLATION
49 The Authority is established by s 5 of the Fisheries Administration Act 1991 (Cth) (‘the Administration Act’). Under s 7(1)(a), the Authority has the function of devising management regimes in relation to Australian fisheries. Under s 6 of the Administration Act, the Authority, in the performance of its functions, must pursue, inter alia, the objectives of implementing efficient and cost effective fisheries management on behalf of the Commonwealth.
50 Under s 3(1) of the Management Act, certain objectives must be pursued by the Authority in the performance of its functions and by the Minister administering the Management Act. Those objectives include:
• implementing efficient and cost effective fisheries management on behalf of the Commonwealth;
• 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;
• maximising economic efficiency in the exploitation of fisheries resources.
51 Section 95(1) of the Management Act relevantly provides that a person must not, at a place in the Australian fishing zone, engage in commercial fishing unless, relevantly, the person is, or is acting on behalf of, the holder of a fishing concession. Further, under s 95(1)(d), a person who is the holder of a fishing concession that is in force must not contravene a condition of the fishing concession. A person who contravenes those conditions is guilty of an offence punishable, on conviction, by a fine. Strict liability applies to such punishment.
52 Under s 4 of the Management Act, the term fishing concession includes a fishing permit. A fishing permit is defined as a fishing permit granted under s 32 of the Management Act. Section 32(1) of the Management Act relevantly provides that the Authority may, upon application, grant to a person a fishing permit authorising the use by that person of an Australian boat for fishing in a specified area of the Australian fishing zone or a specified fishery. Under s 32(4)(a), a fishing permit may authorise the use of a boat for commercial fishing generally; under s 32(4)(b), a fishing permit may authorise the use of a boat for specified fishing activities.
53 Under s 32(5), a fishing permit is granted subject to a number of conditions, including the following:
• the fishing permit may be cancelled under s 39;
• no compensation is payable because the fishing permit is cancelled, ceases to be in effect or ceases to apply to a fishery.
In addition, under s 32(6)(a)(i), a fishing permit is subject to such other conditions as are specified in the permit. Section 32(7) provides that the conditions that may be specified in a permit include conditions relating to:
(a) the fish that may be taken; and
(b) the quantity of fish that may be taken.
Section 32(8) authorises the Authority to vary or revoke a condition of a fishing permit or specify a condition or a further condition to which the permit is to be subject.
54 Under ss 32(6)(b) and 32(6)(c), a fishing permit comes into force on the day specified, for the purpose in the permit, and remains in force until the day specified, for the purpose in the permit, being a day not later than five years after the day on which it came into force. Under s 32(10), the Authority may, on the application of the holder of a permit and of another person as proposed transferee, transfer the permit to that other person.
55 Section 38(1) authorises the Authority to suspend the operation of the fishing permit in certain circumstances. Under s 39(1), the Authority may, whether or not it has previously suspended a fishing concession, cancel the concession in certain circumstances including:
• if the holder of the fishing permit is convicted on an offence against the Management Act;
• if to do so would be in accordance with a condition of the permit relating to cancellation.
REVIEW OF DECISIONS
56 Section 165(2) of the Management Act provides that a person affected by a relevant decision who is dissatisfied with the decision may request the Authority to reconsider the decision. Under s 165(1), relevant decision includes a decision of the Authority under s 32. Section 165(5) provides that the Authority must, within 45 days after receiving the request, consider the relevant decision and may make a decision in substitution for the relevant decision or revoking the relevant decision.
57 Under s 165(7), an application may be made to the Tribunal for review of a reviewable decision. Section 165(1) provides that a reviewable decision means a decision of the Authority under s 165(5).
58 Section 25(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’) provides that an enactment may provide for applications to the Tribunal for review of decisions made in the exercise of powers conferred by that enactment and under s 25(4) the Tribunal has power to review any decision. Section 27(1) provides that, where an enactment provides that an application may be made to the Tribunal for a review of a decision, the application may be made by or on behalf of any person whose interests are affected by the decision.
59 Under s 43 of the AAT Act, for the purposes of reviewing a decision, the Tribunal may exercise all the powers and discretions conferred on the person who made the decision. However, under s 42B(1)(a), where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious, dismiss the application. Under s 44 of the AAT Act, a party to a proceeding may appeal to the Federal Court, on a question of law, from any decision of the Tribunal in that proceeding.
MR FEARNLEY’S FISHING PERMIT
60 In 1993, Mr Fearnley applied for a fishing permit to operate in the Southern Shark Hook Fishery. On 18 December 2000, the Authority granted fishing permit No. 1606C (‘Permit 1606C’) to Mr Fearnley, authorising the use of the vessel Jean Bryant for commercial fishing in the Southern Shark Hook Fishery, using a 1,000 hook demersal long line. Permit 1606C was to have effect from 1 January 2001 to 31 December 2001. It was granted subject to a number of conditions including the following:
‘1. This Fishing Permit allows fishing by the methods, and subject to the restrictions, specified in Attachment A.
2. This Fishing Permit allows the taking or carrying of all demersal shark species, subject to any limitations described in Condition 3, and by catch described in Attachment A...
3. This Fishing Permit only allows fishing for a quota species if:
(a) the weight specified in the quota column 1 (seasonal quota holdings) of the species limit table in Attachment B in relation to that quota species is greater than zero; and
(b) the total trunked weight of fish taken is less than the weight specified in the quota column of the species limit table in Attachment B in relation to that quota species.
...
25. This fishing permit may be transferred ... by application on the approved forms to [the Authority]. Subject to [Authority] approval, only whole permit and quota packages may be transferred in 2001.
...’ [emphasis added]
61 Attachment A to the Fishing Permit described ‘area of waters’ and ‘methods’, the detail of which is not presently relevant. Attachment B was to the following effect:
‘This attachment shows the trunked weight of school shark and gummy shark allowed to be taken under the authorisation of your fishing permit, subject to the conditions on that permit.
The amounts relate to your entitlement of quota species, resulting from initial allocation or from the transfer of quota, or to trip limits which have been imposed on certain species.
This attachment should be retained at all times with your fishing permit.
A new attachment will be issued after any transactions involving transfer of quota are completed.’
On the reverse of Attachment B was a table as follows:
Species Limits
Common Name |
Scientific Name |
Quota (kgs) |
Trip Limit (kgs) |
Gummy Shark (trunked weight) |
Mustelus antarcticus |
0 |
Not applicable |
School Shark (trunked weight) |
Galeorhinus galeus |
0 |
Not applicable |
62 Mr Fearnley was dissatisfied with the decision of the Authority to grant a fishing permit subject to those conditions. He therefore requested the Authority to reconsider its decision pursuant to s 165(2) of the Management Act. On 15 May 2001, a delegate of the Authority set aside the original decision of the Authority and replaced it with a decision that Mr Fearnley ‘be allocated the following amounts of quota’ for the 2001 fishing season:
School Shark |
119kg |
Gummy Shark |
15,667kg |
Mr Fearnley subsequently made an application to the Tribunal for review of the delegate’s decision of 15 May 2001.
63 However, at some time during December 2001, after making that application, Mr Fearnley entered into an arrangement with Theodore Van Boom, Miranda Van Boom and Lucas Hill (together ‘the Purchasers’) in relation to, inter alia, Permit 1606C. The arrangement was evidenced by an instrument headed ‘Fishing Quota Sale Contract’ (‘the Sale Instrument’).
64 The Sale Instrument contained the following recitals:
‘A [Mr Fearnley] is the owner of a Fishing Quota Type Southern Shark Fishery Gummy Shark Quota currently for 15,667 kg and School Shark Quota currently for 119 kg held in connection with AFMA permits 1606 and 1606C and associated Tasmanian Fishing Licences as described in Certificate No. TO42742.
B [Mr Fearnley] wishes to sell, and the purchaser wishes to buy [Mr Fearnley’s] Quota.’
65 The operative parts of the Sale Instrument were relevantly in the following terms:
‘1. The purchaser purchases the Quota for the sum of... ($229,950.50) PLUS GST which amount shall be payable by a deposit equal to ten per centum of the price on signing (which amount has been paid) with the then residue plus GST on 17th December 2001 or earlier by mutual agreement.
2. The parties agree as follows:
...
2.2 Only the Quota identified herein is the subject of the change of beneficial ownership pursuant to this Contract.
...
2.4 The beneficial ownership of the Quota herein sold shall pass to the Purchaser when the full purchase price plus GST thereof has been paid to [Mr Fearnley]...
2.7 The parties acknowledge that the price for the quota takes into account the quota reductions proposed in year 2002 by [the Authority].
...
3 It is further expressly agreed between the parties as follows:
3.1 That whilst the said [Authority] permits 1606 and 1606C and Tasmanian Fishing Licences described in Certificate No. TO42742 are required to transfer to the Purchaser in connection with the sale of Quota it is expressly agreed between the parties as follows:
(a) [Mr Fearnley] shall have the unlimited use, free of charge or cost, permits and licences to attach and use as [Mr Fearnley] shall deem fit, save only, for use being consistent with the conditions associated with such a Licence and Quota for so long as [Mr Fearnley] shall desire save only as [Mr Fearnley] shall pay the annual renewal fees that attach to such licence and permits;
(b) that should the Licences and Permits become transferable separately from the Quota herein sold then the Vendor [sic] shall forthwith transfer the said Licence and Permits back to [Mr Fearnley’s] absolute ownership on notice without payment of any type or kind save that statutory transfer fees, if any, shall be paid by [Mr Fearnley];
(c) the Purchaser acknowledges that the proprietorship of the said Permits and Licence are subject at all times to their obligation to [Mr Fearnley] as herein before defined and should, for any reason, the Purchaser propose a sale or disposal of the Quota that requires a transfer of the Licence and Permits to their new Purchaser, then, subject to [Mr Fearnley’s] consent, such sale or transfer shall be subject to the obligation herein and the Purchaser shall procure from the new Purchaser, a like covenant in favour of [Mr Fearnley] before the due transfer of the Licence and Permits; and
(d) that the entitlement to use the unused Quota for the current year shall remain with [Mr Fearnley] for [Mr Fearnley] to complete the Quota with the benefit of next year’s Quota being available to the purchaser.’
66 On 8 December 2001, the Purchasers, and, on 10 December 2001, Mr Fearnley, signed an application for transfer of Permit 1606C. That application was received by the Authority on 11 December 2001. On 17 December 2001, the Authority issued to the Purchasers a fishing permit, also expressed to be Permit No. 1606C. The second Permit 1606C was in similar terms to the first Permit 1606C granted to Mr Fearnley, except that the name of the boat specified was Albatross II, which was named in the application for transfer of Permit 1606C. The particulars of Attachment A were relevantly the same as those contained in Attachment A to Mr Fearnley’s Permit 1606C. Further, the conditions specified in the Purchasers’ Permit 1606C were relevantly the same as those shown in Mr Fearnley’s Permit 1606C.
67 Although the Purchasers’ Permit 1606C referred to an Attachment B, there was no Attachment B. However, there was another Attachment A, dated 17 December 2001, which relevantly said as follows:
‘This attachment shows the whole weight of fish allowed to be taken under the authorisation of your fishing permit, subject to the conditions on that permit.
The amounts related to your entitlement of quota species, resulting from initial allocation or from the transfer of quota.
This attachment should be retained at all times with your fishing permit.
A new attachment will be issued after any transactions involving transfer of the quota are completed.’
The reverse of that Attachment A contained a table as follows:
Species Limits
Common Name |
Scientific Name |
Quota (kgs) |
Gummy Shark |
Mustelus antarcticus (Trunked Weight) |
0 |
School Shark |
Galeorhinus galeus (Trunked Weight) |
0 |
The reference to ‘0’ in the third column is puzzling. Counsel for the Authority indicated to the Court that ‘0’ appears because, by 17 December 2001, Mr Fearnley had taken the total quantity of fish permitted by the condition of his Permit 1606C, as amended by the delegate’s decision.
THE PROCEEDING IN THE TRIBUNAL
68 The original form of application to the Tribunal was not before the Full Court. On 10 February 2004, Mr Fearnley’s solicitors wrote to the Tribunal saying as follows:
‘1. The decision-maker’s decision to deny the applicant catch history for the period 1994 to November 1997 be declared null and void.
2. That the decision-maker should have allocated quota to the applicant in the amount of 33 tonnes.
3. That the decision-maker failed to take into consideration the relevant factor namely that the applicant fished in an area where there were no other fishermen or there were only few fishermen.
4. That the consequences of the decision-makers’ wrong decision created economic hardship for the applicant such that he had no option but to transfer his licence and quota.
5. That the said transfer which contained the clause obliging the transferee to transfer back to the applicant his licence/permit once the respondent permitted the splitting of his licence/permit quota – a copy of the fishing quota sale contract is Annexure marked "A" be validated by the respondent.
6. That the respondent acknowledges that the applicant has continued to pay annual fees for the relevant/licence permit and AFMA levy fees.
7. That the respondent grant a licence/permit to the applicant with the appropriate endorsement which entitled the applicant to fish in the SFF fishery.’
That letter was treated by the Tribunal as an amended application.
69 Following an application by the Authority pursuant to s 42B(1)(a), a hearing took place before a Deputy President of the Tribunal on 1 March 2004 and on 17 February 2005, the Deputy President dismissed Mr Fearnley’s application. The underlying reason for doing so is that Mr Fearnley had entered into the Sale Instrument.
70 The Tribunal concluded that Mr Fearnley’s application had become frivolous because, following the Sale Instrument, he effectively divested himself of the valuable commercial right that the Permit 1606C constituted. He had been paid a not insignificant consideration by the Purchasers for the transfer of Permit 1606C. The Tribunal concluded, therefore, that, following completion of the Sale Instrument, Mr Fearnley ceased to have any interest in the subject matter of the review by the Tribunal.
71 The Tribunal accepted that Mr Fearnley had had a relevant interest at the time when he lodged his application. However, the Tribunal considered that, when the time came for it to deal with the Authority’s application under s 42B, Mr Fearnley no longer had a relevant interest. That circumstance came about by his own actions in entering into and giving effect to the Sale Instrument. The Tribunal considered that the pursuit by Mr Fearnley of review of the Authority’s decision was therefore frivolous within the meaning of s 42B(1)(a).
THE APPEAL
72 On 16 March 2005, Mr Fearnley filed a notice of appeal from the Tribunal to the Federal Court. The decision of the Tribunal was a decision of a presidential member and the Chief Justice has directed that the appeal be heard by a Full Court.
73 In his Notice of Appeal, Mr Fearnley articulated the following questions of law:
1. Whether Mr Fearnley is a person whose interests are affected by the delegate’s decision, within the meaning of s 27 of the AAT Act.
2. Whether a reversionary interest in the subject matter of a decision is a sufficient interest within the meaning of s 27.
3. Whether Mr Fearnley’s standing should be considered by the Tribunal on the basis of a change in circumstance.
4. Whether the frivolity of an application can be considered by the Tribunal on the basis of a change in circumstance.
5. Whether the absence of a practical outcome renders a proceeding frivolous within the meaning of s 42B(1)(a) of the AAT Act.
6. Whether Mr Fearnley’s application was frivolous within the meaning of s 42B(1)(a) of the AAT Act.
7. Whether the Tribunal should have relied upon evidence of subjective intention in construing a written agreement.
8. Whether the Tribunal ought to have considered the issues of standing and frivolity in an interlocutory decision without a full consideration of all relevant evidence.
It is dubious whether any of those propositions raises a question of law, as distinct from constituting a ground upon which it is said that the Tribunal erred.
74 The grounds of appeal in Mr Fearnley’s Notice of Appeal were not entirely clear. The grounds that are still pressed by Mr Fearnley might be summarised as follows:
1. The Tribunal erred in finding that the effect of the Sale Instrument was that Mr Fearnley had no interest in ‘the Permits and Quota’ after 2001 and ought to have held that Mr Fearnley retained a reversionary interest in ‘the Permits and/or Quota sold’ and had a continuing obligation to continue to pay licence fees in respect of ‘the Permits and/or Quota’, which constituted a sufficient interest within the meaning of s 27 of the AAT Act.
2. The Tribunal erred in not holding that it was authorised by s 43 of the AAT Act to determine that Mr Fearnley should have been granted an additional fishing permit in respect of ‘additional quota’.
3. The Tribunal erred in not holding that the question of frivolity, within the meaning of s 42B(1)(a), should be determined at the time of lodging an application and that the lack of practical utility, following a change in circumstances, goes, if to anything, to the question of remedy.
4. The Tribunal erred in dismissing Mr Fearnley’s application on the basis of standing or frivolity without a full consideration of the evidence and without properly directing itself as to the relevant considerations in relation to a summary dismissal.
It is convenient to deal with the grounds separately.
MR FEARNLEY’S CLAIMED INTEREST
75 Mr Fearnley contends that he has a continuing interest in the outcome of a review by the Tribunal within the meaning of s 27(1) of the AAT Act on several alternative bases. First, he says that his right to call for a retransfer of Permit 1606C gives him an interest. Secondly, he says that, because, under the Sale Instrument, he has an obligation to ‘pay the annual renewal fees that attach’ to Permit 1606C, he has an interest. That contention depends upon the proposition that such fees would vary according to the outcome of the Tribunal’s review. Thirdly, Mr Fearnley claims that he has a continuing interest because of the possibility that he may, at some time in the future, apply for a new permit and the conditions upon which any such new permit might be granted might depend upon the conditions attaching to Permit 1606C.
Reversionary Interest
76 There was no suggestion that, if the Tribunal reached a favourable conclusion on the review, Mr Fearnley would have had any entitlement to payment of further consideration by the Purchasers. Mr Fearnley, however, points to the provision of the Sale Instrument that purports to provide that the Purchasers obtain beneficial ownership of ‘only the Quota identified herein’. He says that, if the review was decided favourably, and a higher quota was substituted, he would have some residual right under the Sale Instrument to enjoy the benefit of that higher quota.
77 Mr Fearnley characterises his rights under the Sale Instrument as either a reversionary interest or an option to reacquire the fishing permits in particular circumstances. He points to the following aspects of the Sale Instrument as indicating that he retained an interest in Permit 1606C:
(1) The Sale Instrument refers in recitals A and B and clauses 1 and 2 to the quota rather than to Permit 1606C.
(2) The Sale Instrument relates only to the existing quota, as appears from Clause 2.2.
(3) Mr Fearnley is to be entitled to continued use of Permit 1606C.
(4) Mr Fearnley continues to be responsible for the payment of renewal fees.
(5) The Purchasers are to retransfer Permit 1606C to Mr Fearnley should it become transferable separately from ‘the Quota’.
(6) Mr Fearnley’s continued interest is protected by the operation of Clause 3.1(c), which requires that any transferee of Permit 1606C recognise the rights and interests of Mr Fearnley.
(7) Mr Fearnley retained the entitlement to use ‘the unused Quota for the current year’ under Clause 3.1(d).
78 Mr Fearnley’s Notice of Appeal, and the submissions made on his behalf on the hearing of the appeal, exhibit a basic misapprehension of the effect of the Management Act. The Sale Instrument exhibits a similar misapprehension of that effect. Indeed, the terms of Attachment B to Permit 1606C probably engendered those misconceptions.
79 But for the operation of s 95 of the Management Act, there would be no reason why Mr Fearnley and the Purchasers could not fish for such species of fish in such quantities in such areas as they saw fit. Section 95, however, prohibits any person from engaging in commercial fishing unless, relevantly, the person is the holder of a fishing permit. The holder of a permit is authorised by the Authority, pursuant to s 32 of the Management Act, to use an Australian boat for fishing but subject to the conditions upon which the permit is granted.
80 The Authority has no power to grant a quota to any person. The Management Act does not refer to quotas. However, the Authority has developed policies pursuant to which it imposes conditions upon the grant of fishing permits that have the effect, pursuant to s 32(7), of limiting the species of fish that may be taken and the quantity of fish that may be taken in pursuance of the authority granted by the fishing permit. The Authority simply authorises a particular activity, so long as that activity does not result in taking a quantity of fish of a particular species greater than that specified by the Authority in the relevant permit.
81 Mr Fearnley transferred Permit 1606C to the Purchasers, as contemplated by s 32(10) of the Management Act. Following that transfer, whatever might be the language used in the Sale Instrument, Mr Fearnley was no longer authorised to use any vessel for fishing. On the other hand, following the transfer, the Purchasers were authorised to use a specified vessel for fishing in the specified area, subject to the conditions upon which Permit 1606C was granted. While, in form, the Authority granted a permit to the Purchasers for the balance of the period to which Mr Fearnley’s Permit 1606C related, it is clear enough that the effect was a transfer, rather than the grant of a new permit. The Purchasers’ Permit 1606C related to the same area and was subject to the same conditions as Mr Fearnley’s Permit 1606C.
82 It was certainly open to Mr Fearnley and the Purchasers to agree that, in certain circumstances, Mr Fearnley could require the Purchasers to transfer Permit 1606C back to him. However, pending such retransfer, the only person authorised by Permit 1606C to use an Australian vessel for fishing was the Purchasers. Following a retransfer, Mr Fearnley would have been authorised to use an Australian vessel for fishing to the exclusion of the Purchasers.
83 Despite the reference in the Sale Instrument to ‘the annual renewal fees’, there is nothing in the Management Act that refers to the renewal of a permit. Under ss 32(6)(b) and (c), a fishing permit comes into force on the day specified and remains in force until the day specified. Doubtless it would be possible for the Authority to grant a further permit on more or less the same terms for a different period. Such a further grant might be fairly characterised as a renewal. Further, there may be some presumption, or indeed may be a term of the Authority’s policies, that a further permit would be granted to the holder of an expired permit on much the same terms and conditions, save for the period during which the permit is to remain in force.
84 The question is whether, notwithstanding the misapprehension that seems to underlie the Sale Instrument and Mr Fearnley’s contentions, he has some residual entitlement in relation to Permit 1606C. The Tribunal concluded, in effect, that, even if there was a successful outcome in relation to the review of the delegate’s decision, in the sense that the limits might be increased, Mr Fearnley could not possibly benefit from that result. That entails a consideration of precisely what was meant by the Sale Instrument when it refers to Mr Fearnley’s entitlement to ‘continued use’ of Permit 1606C and the entitlement to use ‘the unused quota for the current year’.
85 The period in respect of which Permit 1606C was granted has now expired. Had the application to the Tribunal been determined prior to the end of that period, Mr Fearnley may have had some entitlement. The entitlement appears to have been to continue to fish, notwithstanding that he was no longer the holder of Permit 1606C. It may be possible to characterise the Sale Instrument as an agreement that Mr Fearnley would be entitled to fish on behalf of the Purchasers. That, clearly enough, was not the intention.
86 The Authority accepts that, while the Management Act does not refer to renewals of fishing permits, the Authority, in fact, treats a new application by an existing holder of a fishing permit as a renewal. The Authority has a practice of granting a further fishing permit on more or less the same conditions, subject to possible changes in limits, to a holder of an expired fishing permit, with the same permit number. On that basis, one might draw the inference that the Purchasers have been the holders of Permit 1606C for periods subsequent to 2001 and that Mr Fearnley would have continued to be the holder of Permit 1606C in subsequent years, if he had not requested a transfer of Permit 1606C to the Purchasers.
87 Nevertheless, in the light of the scheme of the Management Act, it is difficult to see how Mr Fearnley has any continuing or residual interest, notwithstanding the provision of the Sale Instrument that he Purchasers are to retransfer Permit 1606C to Mr Fearnley, should it become transferable separately from ‘the Quota’. The Tribunal rejected that as mere speculation. There is no reason to conclude that there is any possibility that the scheme of the Management Act will be changed such that the apparent residual intention of Mr Fearnley and the Purchasers might come to fruition. It was open to the Tribunal to conclude that that possibility is so remote that it would be frivolous for Mr Fearnley to pursue his review of the Authority’s decision, in the absence of the Purchasers as parties to the review application.
Renewal Fees
88 The Regulations made under the Fishing Licences Act 1991 (Cth) (‘the Licences Act’) provide for the fees payable on the grant of a fishing permit. As at 2001, Regulation 16.2(2)(c) and Regulation 16.2(2)(e) provided for a fixed fee per quota. After 2004, Regulation 11.2(2)(a) and Regulation 11.2(2)(b) provided for a fee per quota unit. The effect is that, the higher the limit or quota, contained in any condition upon which a fishing permit is granted, the greater the fee.
89 Thus, in that sense, Mr Fearnley had what might be characterised as a negative interest in the outcome of the Tribunal’s review. To the extent that the Tribunal concluded that a limit in excess of that imposed by the delegate was appropriate, Mr Fearnley would have a greater liability under the Sale Instrument than at present. Curiously, therefore, from that point of view, Mr Fearnley’s interest in the outcome of the Tribunal’s review was to ensure that the limit determined by the delegate was not increased. There would clearly be no utility for Mr Fearnley in pursuing the review. It was open to the Tribunal to conclude that, in those circumstances, the pursuit of the review application would be frivolous.
Future Applications
90 Mr Fearnley contends, in the alternative, that he was entitled to the benefit of a policy of the Authority that, in the future, it would act on a basis consistent with its past decisions. He suggests that, if he applied for a permit in the future, the Authority’s policy would have the effect that a favourable decision of the Tribunal in the application that was dismissed would be taken into account in considering the conditions upon which any further fishing permit might be granted to Mr Fearnley.
91 While counsel for Mr Fearnley referred to certain policies of the Authority, nothing was before the Tribunal to indicate that, in circumstances where Mr Fearnley had transferred a fishing permit to a third party, the conditions of that fishing permit would have any bearing whatsoever on any subsequent application that Mr Fearnley might make for a new fishing permit. There is nothing to suggest that, if Mr Fearnley made a further application for another permit, in the future, the terms of the conditions upon which Permit 1606C was granted would have any relevance at all.
RELIEF
92 Mr Fearnley contended that, if the Tribunal reached a favourable conclusion on the review and imposed a limit in excess of that contained in the conditions of Permit 1606C, it would be open to the Tribunal, as he claimed in his amended application, to grant a new fishing permit to him that would entitle him to engage in commercial fishing, quite independently of any activity on the part of the Purchasers under Permit 1606C, under a further fishing permit with that excess as the limits in the new permit. Such a proposition is difficult to sustain.
93 The decision of the Authority, to grant a permit subject to conditions, was the decision reconsidered by the Authority’s delegate. That reconsideration gave rise to the reviewable decision of 15 May 2001. It is that reviewable decision that is the subject of the application for review to the Tribunal.
94 Under s 43(1) of the AAT Act, the Tribunal can exercise, for the purpose of reviewing the delegate’s decision, all the powers and discretions that are conferred by the Management Act on the Authority. More particularly, the Tribunal could set aside the decision under review and make a decision in substitution for that decision, or remit the matter for reconsideration in accordance with directions or recommendations given by the Tribunal. Mr Fearnley contends that, to effect practical justice between the parties, the Tribunal could issue a permit to Mr Fearnley ‘and allocate Quota to that Permit’.
95 However, that is not something that could be done by the Authority, much less by the Tribunal. Mr Fearnley originally applied under s 32(1), in accordance with s 32(2), for a fishing permit. So far as the materials before the Court indicated, Mr Fearnley applied for only one permit. One permit was granted. That permit was granted subject to conditions. Mr Fearnley was dissatisfied with the conditions. However, Mr Fearnley then applied for transfer of Permit 1606C and the Authority transferred the Permit to the Purchasers.
96 There was no application for a second permit. Had there been one and it was refused, Mr Fearnley would have the rights to have that decision reconsidered and the decision, on reconsideration, to be reviewed by the Tribunal. However, he has not taken that course. This ground has no substance.
CHANGED CIRCUMSTANCES
97 Where an interest that gives an applicant standing to commence a proceeding in the Tribunal ceases to exist, that applicant has no interest in pursuing the proceeding further. Although such a proceeding might not be vexatious when instituted, it becomes vexatious when no legitimate purpose can be achieved by continuing with the proceeding (see Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366). If, contrary to Mr Fearnley’s contentions, he no longer has an interest under s 27 in the outcome of the Tribunal’s review of the Authority’s decision, it would be open to the Tribunal to dismiss the proceeding as frivolous or vexatious under s 42B(1)(a) of the AAT Act.
SUMMARY DISPOSAL
98 The Tribunal may dismiss an application at any stage of the proceeding if it is satisfied that the application is frivolous or vexatious. When an application for such dismissal is made by a respondent, it is a matter for the applicant to adduce before the Tribunal, on the hearing of such an application, all such evidence as the applicant wishes to have before the Tribunal, to resist the assertion that the proceeding is or has become frivolous.
99 Section 42B(1)(a) of the AAT Act makes it unequivocally clear that the Tribunal may, at any stage of a proceeding, dismiss an application if it is satisfied that the application is frivolous or vexatious. Mr Fearnley contended that, in connection with an application under s 42B, it was incumbent upon him to do no more than demonstrate an arguable or prima facie case. Further, he said, the Tribunal should not have exercised its power under s 42B in relation to Mr Fearnley’s application because of the ‘absence of settled law’ on the questions raised in the proceeding.
100 There is nothing in the provision to support that contention. Of course, where a party to a proceeding moves for such dismissal, the applicant must, as a matter of procedural fairness, be afforded the opportunity to put before the Tribunal such material as the applicant wishes to rely upon in support of his application. There can be no suggestion that Mr Fearnley was denied the opportunity of putting before the Tribunal whatever material he intended to rely upon in support of his application. Having given Mr Fearnley the opportunity to adduce such evidence as he was advised, the Tribunal was entitled to deal with the Authority’s application for dismissal pursuant to s 42B, on the basis of that material. There was no error on the part of the Tribunal in concluding, on the basis of that material, that it would be frivolous for the proceeding to remain on foot because Mr Fearnley was no longer a person whose interests were affected by the decision under review, assuming, of course, that the Tribunal made no error in reaching that conclusion.
CONCLUSION
101 There was no error of law on the part of the Tribunal in dismissing Mr Fearnley’s application on the basis that it was, at the time of dismissal, frivolous. The appeal should be dismissed. Mr Fearnley should pay the Authority’s costs of the appeal.
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I certify that the preceding fifty-five (55) numbered paragraphs are a true
copy of the Reasons for Judgment of the Honourable Justice
Emmett.
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Associate:
Dated: 10 February 2006
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Counsel for the Applicant:
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A Greinke
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Solicitors for the Applicant:
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Thomson Rich O'Connor
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Counsel for the Respondent:
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D Mortimer SC
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Solicitors for the Respondent:
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Dibbs Abbott Stillman
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Date of Hearing:
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15 and 17 November 2005
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Date of Judgment:
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10 February 2006
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2006/3.html