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Administrative Appeals Tribunal of Australia |
Last Updated: 5 December 2000
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W1999/139
GENERAL ADMINISTRATIVE DIVISION )
Re LATITUDE FISHERIES PTY LTD
First Applicant
WILLOWOOD HOLDINGS PTY LTD
Second Applicant
And AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY
Respondent
Tribunal Deputy President T E Barnett Mr R D Fayle, Senior Member Dr E Christie, Member
Date 22 November 2000
Place Perth
Decision In accordance with s43 of the Administrative Appeals Tribunal Act 1975, the decision under review is affirmed.
.........(sgd T E Barnett)..........
Deputy President
CATCHWORDS
FISHERIES - grant of fishing permit - tuna fishing in S/WTBF - whether binding agreement resulted from sale of NPF permits under voluntary adjustment scheme - contracting powers of Commonwealth - changes to legislation and AFMA policies - precautionary principle - ecologically sustainable development - latent effort and economic considerations - estoppel, frustration, legitimate expectation considerations
Fisheries Administration Act 1991
Ansett Transport Industries (Operations) Pty Ltd v Commonwealth of Australia (1977) 17 ALR 513
Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 18
Bannister Quest Pty Ltd v AFMA (1997) 77 FCR 503
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 360
Freeman v Secretary, Department of Social Security (1988) 87 ALR 506
Gardner v Dairy Industry Authority of New South Wales [1977] 1 NSWLR 505
Haoucher v Minister for Immigration (1990) 93 ALR 51
Minister for Agriculture & Fisheries v Hulkin (unreported)
Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic (1990) 92 ALR 93
Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273
R v Liverpool Corporation; ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299
Re: Secretary, Department of Social Security and Plug, AAT Case W1998/404
22 November 2000 Deputy President T E Barnett; Mr R D Fayle, Senior Member and Dr E Christie, Member
1. On 4 November, 1998 solicitors for Latitude Fisheries Pty Ltd ("the first applicant"), wrote to the Australian Fisheries Management Authority ("AFMA" or "the respondent") applying for a fishing permit ("FP") to take tuna in Australian fishing zone areas, identified as the Southern and Western Tuna and Billfish Fisheries ("S/WTBF") This application was founded on the assumption that the predecessor Commonwealth department, the Australian Fishing Service, in 1989, had given an undertaking that the first applicant was entitled to an equivalent fishing boat licence (of a kind which had since ceased to be issued due to a change in legislation). In January 1999, the respondent refused to grant the permit, which decision was affirmed by a delegate of the respondent on 31 March 1999. In May 1999, the first applicant requested this Tribunal to review that decision pursuant to s165 of the Fisheries Management Act 1991 ("the Act") and the Administrative Appeals Tribunal Act 1975.
2. Willowood Holdings Pty Ltd ("Willowood"), a company beneficially owned by the same natural person shareholders as the first applicant, joined it as an applicant in this matter. Willowood's affairs and those of the first applicant and the two principal shareholders and directors, Mr J A (Bert) Boschetti and Mrs Julie Boshetti, (husband and wife), are enmeshed and directly connected with this application.
3. At the hearing Mr M Buss QC, instructed by Cocks Macnish, Solicitors, represented the applicants. Mr M Ritter, barrister, instructed by Ms Anna Ciffolilli, Solicitor represented the respondent. The following witnesses gave oral evidence for the applicants:
* Mr Graeme Stewart, consultant to the applicants;
* Mr J A Boschetti, director and executive officer of the applicants;
* Mrs Julie Boschetti, director and executive officer of the applicant; and
* Ms Lian Papaelias, an accountant.
4. The following witnesses gave oral evidence for the respondent:
* Mr Peter E Venslovas, a senior manager with the respondent; and
* Ms Mary B Lack; a senior manager with the respondent.
5. The Tribunal had before it documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 ("T documents"). In addition it received into evidence the following exhibits:
* A1 - Witness statement Mr Graeme Stewart, 22 October, 1999;
* A2a - Witness statement of Mrs Julie Boschetti, 22 October, 1999;
* A2b -Supplementary witness statement of Mrs Julie Boschetti, 28 April, 2000;
* A2c - Table of Detriment (this is also part of exhibit A5);
* A3 - Copy of a letter from Department of Primary Industries and Energy to Mr J A Boschetti, 16 January 1989 (a copy of this also appears at T4);
* A4 - copy of a facsimile from NPF Trading Corporation Pty Ltd to Australian Fishing Service, attention Mr Wesney, 22 June, 1989;
* A5 - Statement of Lian Papaelias, 28 April, 2000 (attaching a copy of A2c);
* A6a - Statement of Mr John Albert Boschetti, 22 October, 1999;
* A6b - Supplementary statement of Mr John Albert Boschetti, 27 April 2000;
* A7 - Bundle of additional documents, numbered 1 to 13 inclusively, filed with the Tribunal on 28 April, 2000;
* A8 - AFMA Board-in-confidence, Agenda Item 6 discussion papers relating to a meeting of the Board on 2 December 1999. This exhibit and the related evidence of Ms M Lack was subject to confidentiality order pursuant to s35 of the Administrative Appeals Tribunal Act 1975. The order restricts the circulation of the evidence to respective counsel, instructing solicitors and the Tribunal members. For that reason only oblique reference will be made to that evidence so as to preserve its confidentiality;
* A9 - Copy of a deed of discharge, executed by Willowood, 16 December, 1988;
* R1 - Copy of a letter from the first applicant to Mr G Stewart, 16 December, 1988;
* R2 - Copy of a letter from the first applicant to Mr P Neave, Western Tuna Mac, 28 April 1998;
* R3 - extract from application by the first applicant , in November 1999, to be joined as a party to a review by this Tribunal of a decision in another matter (unrelated to this review);
* R4 - statement of Peter Ernest Venslovas, 22 February, 2000;
* R5 - statement of Mary Bernadette Lack, 24 February, 2000.
6. The Tribunal heard evidence over five days. It related to surrounding circumstances and understandings in connection with correspondence between the first applicant and the Australian Fisheries Service ("AFS") and later, the AFMA (the respondent). The evidence addresses the first applicant 's submission that it has suffered or will suffer a financial detriment as a consequence of not being granted the tuna fishing licence in question. The evidence also goes to the policies and practices of the AFMA in relation to the granting of tuna fishing licences of the type applied for by the first applicant, the subject of this review.
Some relevant background information
7. The Australian fishing zone ("AFZ") is an area of sea over which Australia has exclusive rights by reason of international convention. Relevant definitions appear in section 4 of the Fisheries Management Act 1991:
Australian fishing zone means:
(a) the waters adjacent to Australia within the outer limits of the exclusive economic zone; and
(b) the waters adjacent to each external territory within the outer limits of the exclusive economic zone;
but does not include:
(c) coastal waters of, or waters within the limits of, a State or internal Territory; or
(d) waters that are excepted waters.
Exclusive economic zone means the exclusive economic zone, within the meaning of the Seas and Submerged Lands Act 1973, adjacent to the coast of Australia or the coast of an external Territory.
8. The Tribunal was informed that both the Commonwealth and the State governments have divided jurisdiction over the AFZ. The Commonwealth has jurisdiction in the zone extending to some 200 nautical miles from the coast and for which it controls the licensing of fishing. However, the States have jurisdiction over three nautical miles from the low water mark and control the licensing of fishing in that area. Therefore, if one is to fish (commercially) in a designated area, which extends beyond the three nautical mile limit, both Commonwealth and State (or States) licenses are needed.
9. The Commonwealth has divided the AFZ into discrete zones to facilitate management of the fisheries. the first applicant and Willowood were active in the Northern Prawn Fishery ("NPF") and were licensed by the State of Western Australia and the Commonwealth to fish there. The Fisheries Act 1952 was replaced by the Fisheries Management Act 1991 ("the Act") and a different type of license was issued under the latter. Formerly, the Commonwealth issued "Commonwealth Fishing Boat Licences" ("CFBL") but under the latter "FPs" ("FP") are issued. These are issued pursuant to s32 of the Act, which states:
Division 5--Fishing permits Grant of fishing permits
32. (1) AFMA may, upon application made in the approved form, grant to a person a fishing permit authorising, subject to subsections (1A), (1B) and (1C), 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.
(1A) Subject to subsection (1C), if an Australian boat is specified in the permit, the permit authorises the use as mentioned in subsection (1) of:
(a) subject to paragraph (b)--that boat; or
(b) if the person to whom the permit is granted, from time to time, by written notice given to AFMA, nominates for the purposes of the permit another Australian boat in lieu of that boat--the boat so nominated.
(1B) Subject to subsection (1C), if no Australian boat is specified in the permit, the permit authorises the use as mentioned in subsection (1) of such Australian boat (if any) as the person to whom the permit is granted, from time to time, by written notice given to AFMA, nominates for the purposes of the permit.
(1C) The permit does not authorise the use of an Australian boat unless the boat complies with any conditions to which the permit is subject.
(2) An application made for the grant of a fishing permit must provide AFMA with such information as it reasonably requires for a proper consideration of the application.
(3) Without limiting the operation of subsection (1), AFMA may refuse to grant a fishing permit if it has reason to believe that a requirement of a law of the Commonwealth, or of a State or Territory, has not been complied with in relation to the boat.
(4) A fishing permit may authorise the use of a boat:
(a) for commercial fishing generally; or
(b) for recreational fishing generally; or
(c) as a charter boat; or
(d) for specified fishing activities, including:
(i) the carrying of fish; or
(ii) the processing of fish; or
(iii) the testing of fishing equipment.
(5) A fishing permit is granted subject to the following conditions:
(a) if the fishing permit authorises fishing in a specified managed fishery--the holder of the permit must comply with any obligations imposed by, or imposed by AFMA under, the relevant plan of management on the holder of such a fishing permit;
(b) if the fishing permit authorises fishing in a specified managed fishery--the permit will cease to have effect if the plan of management for the fishery is revoked under subsection 20(3);
(c) the fishing permit may, under subsection 75(7), cease to have effect or, under subsection 79(3), cease to apply to a fishery;
(d) the fishing permit may be cancelled under section 39;
(e) no compensation is payable because the fishing permit is cancelled, ceases to have effect or ceases to apply to a fishery.
(6) A fishing permit:
(a) is subject to such other conditions as are:
(i) specified in the permit; or
(ii) prescribed in relation to permits granted under this section; and
(b) comes into force on the day specified for the purpose in the permit or, if no day is so specified, on the day on which it is granted; and
(c) subject to this Act, remains in force until the day specified for the purpose in the permit, being a day not later than 5 years after the day on which it came into force.
(7) Without limiting the operation of paragraph (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 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.
(8) AFMA may, by written notice given to the holder of a permit, whether or not at the request of the holder, vary or revoke a condition of the permit (not being a condition mentioned in subsection (5)) or specify a condition or a further condition to which the permit is to be subject.
(9) A permit ceases to be in force if the holder of the permit surrenders the permit by written notice given to AFMA.
(10) 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.
(11) A fishing permit is to be in the approved form.
10. The Tribunal understands that prior to the 1991 Act, to fish in the NPF managed fishery, a boat required two kinds of licenses. The first was specifically for the NPF and was divided between Class B and Class A units. Both were necessary to fish. One Class B unit was required for each boat together with a number of Class A units, which were issued according to various physical properties of the boat. The other kind of licence was the CFBL, which may not be restricted to any particular managed fishery, such as the NPF. It is further understood that CFBLs remained current subsequent to the 1991 Act, at least until they expired or were replaced by fishing licences pursuant to s32 of the 1991 Act.
11. Ms Lack summarises, in attachment K to her statement (Ex. R5), the various fishing licences and permits held by the applicants since 1994 up to the time of her statement in February 2000. Ms Lack gleaned this information from the statement of Mr J A Boschetti (Ex. A6a).
Boat name Periods Relevant permit/CFBL Licensee/Permit Holder Notes
Orion 1/7/94 - 1/11/94 FP Permit 60628A Willowood This was formerly a CFBL
and 11/9/95 - 7/96
Kobus II 5/8/99 - 30/6/00 60628A Willowood
First Class 11/7/95 - 17/10/95 FP 402734A JA & JE Boschetti Previously a CFBL. On 24/11/95 the first Class nomination was changed to "No boat".
9/6/94 - 8/6/95
5/7/95 - 3/7/96
Discovery III 12/7/99 - 30/6/00
Miss Pia II 23/5/94 - 22/5/95 FP402831A Latitude Previously a CFBL.
Orion 27/11/95 - 21/5/96 FP402831A Latitude On 28/10/97 the Orion was replaced with "No boat".
The boat nominated for this FP from 6/1/2000 - 30/6/2000 is Lella owned by Latitude
Code: FP is Fishing Permit. Source: Exhibit R5 and attachment K thereof (Statement by Ms M Lack)
12. Fishing Permits 606268A, 402734A and 402831A are conditional. The condition, amongst others, is that the nominated boat is allowed to fish for tuna and tuna-like species (excluding Southern Bluefin Tuna (Thunnus maccoyii)) in the area specified in Schedule 2 of the FP, by pelagic longline and troll, rod & reel and handline fishing methods. The Tribunal understands from the evidence that each FP allows fishing in the Australian fishing zone (excluding waters administered by a State or Territory) adjacent to South Australia west of meridian of longitude 141 degrees 00 minutes; Western Australia; Western Australia seaward of the 200 meter isobath; Northern Territory; and Queensland west of the meridian of longitude 142 degrees 30 minutes. The Tribunal understands that these permit fishing for tuna (except SBT) in the Australian fishing zones ordinarily described as the Southern and Western Tuna and Billfish Fisheries ("S/WTBF"), not restricted by the latitude 34oS"line", a point which will become relevant later in these reasons.
The relevant correspondence and events
13. In 1988 the applicants, Latitude and Willowood, and Mr and Mrs JA Boschetti (ie JA and Julie Boschetti) in their own rights operated fishing boats in the NPF. At the time the Commonwealth Government had a scheme to reduce the amount of fishing in the NPF, called the "NPF Voluntary Adjustment Scheme". The Northern Prawn Fishery Trading Corporation ("NPFTC") managed this scheme. The then executive officer of the NPFTC, Mr Graeme Stewart, gave evidence fundamental to these proceedings in relation to this scheme and transactions involving the applicants. The scheme arose from a contract between the Minister for Primary Industries and the NPFTC to negotiate the purchase of NPF units, previously described as Class B and Class A units, and to facilitate the sale of NPF boats displaced as a result of the reduced fishing effort and loss of licences. In December 1988 Mr Stewart began discussions with Mr J A Boschetti in these regards. Mr Boschetti gave evidence that at that time his operations were experiencing financial difficulties. These were attributed, amongst other related things, to a reduced catch in the NPF. He was therefore interested in selling some of the Class B and Class A units pursuant to the scheme.
14. Mr Boschetti's evidence and that of Mr Stewart are similar in relation to their recollection of the conditions for the sale of the units by the applicants. Mr Boschetti said that he agreed (in his capacity as a director of each of the applicants) to the sale of the units "only if the AFS agreed to issue the first applicant with a CFBL". Mr Stewart's evidence in this respect was the same. Mr Stewart said that he understood that the first applicant was not going to apply for the CFBL immediately, a similar statement to that of Mr Boschetti. Mr Boschetti said at paragraph 9 of his statement:
"It was from my point of view always a condition of sale of any NPF units under the Scheme that the Latitude Group retain the right to a CFBL so that it could fish for tuna in the future."
15. The evidence is that Mrs Boschetti typed a letter in December 1988 from a hand written draft provided by Mr Stewart. The letter, at T3, is reproduced in its entirety below:
Latitude Fisheries Pty Ltd
JA & JE Boschetti
Wednesday 14 December 1988
Australian Fisheries Service
Department of Primary Industries and Energy
GPO Box 858
CANBERRA ACT 2600
Attn: Mr G Gorrie
Dear Sir
RE: REQUEST FOR COMMONWEALTH FISHING BOAT LICENCE
We are presently negotiating with the NPF Trading Corporation Pty Ltd to sell 2 class B and 535 class A NPF Units. As part of that negotiation we have asked to keep one of the Commonwealth Fishing Boat licences to use in an unmanaged fishery in Commonwealth waters (The Longline Tuna fishery off the Western Australian Coast targeting Big Eye and Yellowfin Tuna).
I understand that Graeme Stewart has spoken to you about this.
It is our intention to Longline for Big Eye and Yellowfin Tuna which will be exported to the Japanese Sashimi Tuna Market. Should incidental catches of Southern Bluefin Tuna be made we would either lease or buy enough Southern Bluefin Tuna Quota to Accommodate this.
The vessel we will be using will initially be NPF Licenced vessels and should the catches prove to be as profitable as we anticipate we would then consider a purpose built vessel for which we require the licence we are seeking.
The area to be fished would be all Commonwealth Waters West of 125 degrees East (The West Australian Border).
It may be that at some later time we may have to alter our operations in the light of experience. If this happens we want to be assured that the conditions of the licence could be changed provided always that we do not effect some other managed fishery.
We would therefore ask that a conditional Commonwealth Fishing Boat licence be issued to Latitude Fisheries Pty Ltd for the taking of Tunas, except Southern Bluefin Tuna, in Commonwealth Waters West of 125 degrees East and that a letter be provide by the AFS advising that the condition of the licence may be altered in future if it felt appropriate and provided such changes do not effect any other managed fishery.
Yours faithfully
(Signed)
J A Boschetti
Director
16. The Tribunal notes what appears to be an inconsistency in the letter concerning just what the first applicant (or its persona, Mr Boschetti) was seeking from the Commonwealth - the first paragraph asked "to keep" a CFBL, whereas the last asks "that a conditional CFBL be issued ...".
17. On 16 January 1989, the Manager of the NPF (Adjustment Program Section), AFS replied, in the following terms (at T4):
Department of Primary Industries & Energy
16 January 1989
Mr JA Boschetti
Director
Latitude Fisheries Pty Ltd
PO Box 77
Geraldton WA 6530
Dear Mr Boschetti,
I refer to your letter of 14 December 1988 seeking to retain the right to a Commonwealth Fishing Boat Licence to take tuna in waters off Western Australia following the sale by you of 2 Class B units and 535 Class A units under the Northern Prawn Fishery Voluntary Adjustment Scheme.
I am very pleased to advise that should you sell these units under the Voluntary Adjustment Scheme it has been decided to allow you to retain the right to one unrestricted Commonwealth Fishing Boat Licence.
I apologise for any inconvenience caused by the delay in replying to your request and take this opportunity to wish you every success in your tuna fishing venture.
Yours sincerely
(Signed)
TF Meany
Manager
Northern Prawn Fishery and Adjustment Program Section
Australian Fisheries Service
18. Mrs Boschetti wrote to Mr Stewart on 16 December, 1988 the following letter (Ex. R1):
Latitude Fisherise Pty Ltd
16 December, 1988
Graeme Stewart & Associates,
PO Bix 280
Applecross WA 6153
Dear Graeme,
Please find enclosed Deeds of Discharge relating to the Sale of Northern Prawn Fishery Concessions as listed below:
Class B Unit No. 196 with 383 Class A Units in the name of Willowood Holdings Pty Ltd., $254,350.
Class B Unit No. 138 with 152 Class A Units in the name of Latitude Fisheries Pty Ltd. $196,400
Thanking you for your help in this matter.
Yours faithfully
(Signed)
J E Boschetti
19. That letter bears a stamp indicating receipt by "Aust. Fisheries" on 16 January 1989. It is unclear from the evidence why the letter was sent to AFS. It would appear from the evidence of both Mrs Boschetti and Mr Stewart that this was a covering letter sending the signed deeds to Mr Stewart to hold pending finalisation of the conditions referred to above.
20. On 22 June, 1989 Mr Stewart sent a facsimile on NPF Trading Corporation Pty Ltd letterhead, to the Australian Fisheries Service for the attention of Mr Wesney. The purpose of this facsimile is to request the AFS to reimburse the first applicant for a levy payment of $3,367.20 made by it in relation to one Class B and 152 Class A units swapped with "KFV" (no doubt a reference to another licensed fishing operation). the first two paragraphs of that facsimile (Ex. A4) state:
RE: LEVY PAYMENTS ON CLASS B 199 (sic) AND 152 CLASS A UNITS
1. Latitude Fisheries Pty Ltd are now in a position to finalize the sale of their unassigned unit holding to NPFVAS.
2. You will recall that this transaction involving 2 Class B units and 535 Class A units was commenced in December, 1988. At that time Mr Boschetti requested that as part of the transaction cancelling the two NPF licences, one Commonwealth Fishing Boat Licence be retained by Latitude Fisheries Pty Ltd. Latitude Fisheries' request was addressed to Mr Gorrie on 14th December, 1988. On 16th January, 1989 AFS wrote to Latitude Fisheries (AFS Ref:8716E) agreeing to the request. The decision was made the week before 19 January, 1988 (sic) while I was in Townsville ...(indecipherable).
21. The next relevant communication in this regard is a letter from NPFTC dated 30 June 1989 and signed by Mr Stewart as "Principal Representative" (T5). This letter is addressed to "Mr Con Keating, Manager, Northern Prawn Fishery and Adjustment Programs, Australian Fisheries Service". The first four paragraphs of that letter are relevant and set out below:
RE: DEED OF DISCHARGE FOR SALE OF CLASS B 199 AND 152 CLASS A UNITS
Attached is the Deed of Discharge for the sale of Class B 199 and 152 Class A units from Latitude Fisheries Pty Ltd to NPFVAS.
This completes a sale of two Class B units and 535 Class B units which was commenced in December, 1988 and interrupted (sic) in February, 1989 when Latitude Fisheries Pty Ltd became involved in a simultaneous licence transfer with KFV and Marta Fishing Pty Ltd.
As part of the sale of the two Class B units to NPFVAS it was agreed that one Commonwealth Fishing Boat Licence would be issued to Latitude Fisheries Pty Ltd.
Attached is a copy of a letter from DPIE (ref 8716E) advising that one Commonweathl (sic) Fishing Boat Licence would be issued. I would be pleased if you could arrange for the Commonwealth Fishing Boat Licence to be issued.
22. Mr Ritter, for the respondent, asked Mr Boschetti why no follow-up was made when no reply to the above letter was forthcoming:
MR RITTER: But as a result of that [request] you didn't get either a reply or a license after that request, did you?---No.
And you didn't make any follow up written communication about that?---No.
Why not?---Because I had a letter from AFS saying that I had an unrestricted license that I could use some time in the future.
How long did you think that was going to be valid for?---As long a it took me to build a boat.
What if that never happened?---Well, it did happen. (Tr. p.220)
...
Well, I'm interested in what you thought the undertaking was?---The undertaking was that when I get access to some money and done a bit of exploratory work in that fishery, I would build a purpose-built boat. (Tr. p.221)
...
Yes. But did you think that that letter meant that notwithstanding any changes to Commonwealth fishing policy, you would still have the right to a license?--- I think I allowed for that in that letter that we wrote. If there was any conditions changed, I didn't want it to affect us. I think it was mentioned in that letter. [a reference to the letter of 14 December 1988, T3]. (Tr. p.221)
...
Yes. All right. That's what your letter said but Mr Meany's letter didn't refer to that aspect, did it?---Well, what did he refer to? Where's the letter?
Look at T4, page 13, please?---Yeah.
The second paragraph doesn't make reference to that aspect of your letter, does it?---Well, I'm happy with Meany's letter. I took it at face value, that he agreed with what we asked for.
Well, you say in answer to my question that you thought your license would be given to you despite any changes in fishing policy?---Yes.
And you say that because you put that in your letter?---Yes.
But in Meany's letter, that aspect of your letter wasn't referred to, was it?---Well, probably not, but I was happy with his letter.
All right. But when he says in the second paragraph what he was pleased to advise you of, there's no mention there of changes to policies, [for] example?---No, he doesn't mention it, no, there's no mention.
And did you think that you would be entitled by this undertaking you say you were given in that letter to a fishing boat license even if the legislation changed so there was no such thing as a fishing boat license?---Well, I got what I asked for.
Well, I'm asking you what you believed that to be at the time?---I believe they gave me the right to go tuna fishing at some time in the future.
And that would be so despite any changes to policy and any changes to legislation?---Yep.
Whenever you wanted to use it?---Yeah, whenever I wanted to. Whenever circumstances allowed.
You could just stick your hand up and say: I'm ready to use the license now, can you please give it to me?---Yes. (Tr. p.222)
23. Later, the Tribunal asked Mr Boschetti about his then intentions. In response he said:
"I had some units that the Commonwealth wanted and if I agreed to sell those units, they agreed to let me have a licence to take tuna at some future date, that's all I wanted. And I think it's fairly explanatory here, that we couldn't do it at the present time because we were having a few problems, but as soon as we could, we went out and did what we said we were going to do. It was a licence to be used in the future, and they were aware of that." (Tr. p.279)
24. As observed, despite the request contained in that letter (T5), no action was taken by the addressee. Indeed, nothing of any relevance in this regard transpired until almost 6 years later when, on 26 May 1995, Mr Boschetti wrote to the respondent in the following terms (T8):
(Letterhead details not reproduced)
26 May 1995
The Manager
SBT and Western Tuna Fisheries
AFMA
PO Box 7051
Canberra Mail Centre ACT 2610
Dear Sir,
In January 1989 I sold to the NPF Voluntary Adjustment Scheme, 2 B Class units and 535 A class units.
Conditional on this transaction taking place was a commitment by the Australian Fisheries Service to allow me to retain a Commonwealth license enabling me to catch Tuna in WA waters. Please see copy of DPIE letter enclosed.
Would you please advise if AFMA will honour this commitment.
Yours sincerely
(Signed)
JA Boschetti
Encl
25. On 28 June 1995 Mr Paul Ryan, Manager, Licensing and Entitlements, Australian Fisheries Management Authority ("AFMA") the respondent in these proceedings, replied to Mr Boschetti, the first applicant , acknowledging his letter of 26 May 1995 (T9). In it Mr Ryan refers to the undertaking by AFS to be to allow [the first applicant ] to keep a CFBL and "not a request to retain an entitlement for revival at some future time." It then states: "I do not agree that Mr Meany's letter constituted an undertaking to revive an entitlement 6 1/2 years later." The letter goes on to explain that CFBLs existed under the 1952 Act which legislation was replaced by the 1991 Act, which created a new licence, the FP. It also refers to the respondent's published policies, in the July 1993 issue of Australian Fisheries Magazine, in relation to the grant of FPs- that FPs would not be granted on the basis of a CFBL that expired before 3 February 1992.
26. Evidence of the various communicative despatches by the respondent and its predecessor, the AFS, addressing the change in both law and policy in relation to the issued of CFBLs and FPs was provided to the Tribunal. The evidence, principally by Mr Venslovas, supplements T6 and T7. Document T6 is a supplement to the journal Australian Fisheries, in July 1993, headed "The New Look of Licensing", a publication by the respondent designed to alert those engaged in relevant fishing operations to the provisions of the then enacted 1991 Act, which replaced the 1952 Act. Mr Boschetti acknowledged that he would have received this publication either on his own behalf or as a director of the applicants.
27. The supplement (T6) begins with this introduction:
"The replacement of the Fisheries Act 1952 by the Fisheries Management Act 1991 has resulted in new arrangements for licensing fishing operations in the Australian fishing zone (AFZ)."
The Australian Fisheries Management Authority (AFMA) issues four types of fishery specific fishing concessions to commercial operators;
* Statutory Fishing Rights;
* Fishing Permits;
* Scientific Permits; and
* Foreign Fishing Boat Licences.
Fishing concessions granted under the Fisheries Management Act 1991 permit the holder to fish in specific fisheries, not in the entire AFZ. The new approach gives better resource protection because operators in each fishery can be readily identified. It also helps to identify fishermen who have a genuine commitment to each fishery and protects the interests of those who invest capital to develop new fisheries or undertake fisheries exploration.
28. The supplement (T6) then proceeds to discuss the respective attributes of each of the four types of fishery specific fishing concessions. In this respect it states, for FPs:
Fishing Permits
The main purpose of Fishing Permits is to allow access to fisheries where no Plan of Management exists.
Fishing Permits allow access to specific fisheries and to specific areas of the Australian fishing zone subject to certain conditions. Usually the conditions relate to the type of fishing equipment that can be used or the species of fish that may be taken. Sometimes, the conditions relate to catch reporting requirements and by-catch arrangements. The holder of a Fishing Permit must pay fees and levies. ... Fishing Permits are the main method of allowing exploratory and development fishing. The AFMA Board recently approved a policy to provide for the orderly exploration and development of new fisheries. This policy is outlined in Fisheries Policy Paper Number 4 Exploration and Development of a New Fishery. ...
29. The supplement (T6) then speaks of transitional arrangements and in reference to CFBLs states:
Commonwealth Fishing Boat Licences and Master Fisherman's Licences are still used in the fisheries that continue to be managed under the Fisheries Act 1952.
This is because the Commonwealth controls some fisheries to the low water mark. ...As the various State Acts refer specifically to the Fisheries Act 1952, it is not possible to authorise fishing operations in the northern prawn and tuna fisheries in waters off most States under the Fisheries Management Act 1991 until the States amend their legislation to refer to the Fisheries Management Act 1991. ...
All CFBLs that were current when the Fisheries Management Act 1991 was introduced on 3 February 1992 remained in force until they expired. Upon expiry they may have been replaced by Fishing Permits allowing access to fisheries that were not subject to formal plans of management. ...
Operators may fish using a combination of fishing concessions issued under the Fisheries Act 1991(sic) and the Fisheries Management Act 1952 (sic) ...
30. Document T6 sets out a comparative table showing the essential differences between the CFBLs and the new FPs. Amongst them is the point that the former are "usually not fishery specific" whereas the latter are "fishery specific". The supplement contains considerable detail, including an outline of policies relating to the grant of FPs and "Fishery Specific CFBLs authorising access to Fisheries not subject to specific management arrangements".
31. Document T6 then summarises the five "Policies on the Grant of FPs and Fishery Specific Commonwealth Fishing Boat Licences Authorising Access to Fisheries not subject to Specific Management Arrangements". Policies 1 and 3, in particular, relevantly state:
Policy 1
Operators who held Commonwealth Fishing Boat Licences (CFBLs) which expired prior to 3 February 1992 will not be granted a Fishing Permit solely on the basis that they held that CFBL. This policy will also apply to the grant of fishery specific CFBLs.
Policty 3
Operators who placed a CFBL into abeyance will not be granted a Fishing Permit on the basis of having held the CFBL in abeyance unless the application for the Fishing Permit is submitted within two years of the date the CFBL was placed in abeyance. ...
32. On 3 November 1994 the respondent issued a media release headed "Development of Management Arrangements for the Western Tuna and Billfish Fishery" (T7). the first three paragraphs of the release state:
DEVELOPMENT OF MANAGEMENT ARRANGEMENTS FOR THE WESTERN TUNA AND BILLFISH FISHERY
The Australian Fisheries Management Authority (AFMA) today announced further developments in the establishment of long term management arrangements for tuna and billfish fishing in Western Tuna and Billfish Fishery (WTBF). The WTBF covers tuna and billfish fishing not covered by the East Coast Tuna Fishery and Southern Bluefin Tuna Fishery management arrangements.
Following AFMA's media release of 23 May 1994, AFMA permitted some operators to exchange access to the East Coast Tuna Fishery for access to the WTBF. AFMA is now closing the WTBF to new entrants as the number of fishing entitlements granted for the fishery is considered to be sufficient at this stage in the development of the fishery.
'It is AFMA's policy to no longer approve applications from operators wishing to exchange access to the East Coast Tuna Fishery, for access to the WTBF,' Chairman of the AFMA Board, Mr Jim McColl, said today.
33. Following receipt of Mr Paul Ryan's letter of 28 June 1995 (T9) referred to above, the solicitor for the first applicant, wrote on its behalf submitting that the first applicant was entitled to be issued with a FP on the basis of the undertakings previously given by the AFS (the predecessor to the AFMA). The submission refers to the letter of 14 December 1988 (T3) and the reply of 16 January 1989 (T4) asserting that the first applicant , not having held the CFBL in question was not affected by the respondent's Policy 1 (T6 supra) which states that holders of CFBLs which expire before 3 February 1992 will not be granted a FP solely on the basis that they held a CFBL. It seems that the respondent treated that letter (and the letter of 14 December 1988 (T3)) as an application for a FP to fish for tuna, other than Southern Bluefin, in the W/STBF. It therefore put in train the events leading to this review of the decision of a delegate of the respondent on 7 January 1999 and its reconsideration and affirmation notified by letter of 31 March 1999, to the solicitors. (T25)
34. In his evidence Mr Stewart explained that at the time of negotiating with Mr Boschetti to purchase the applicants' Class B and Class A units in the NPF, it was then ministerial policy that no "licence splitting" should occur if it resulted in more boats being active in a fishing zone, particularly the NPF. He told the Tribunal that he understood that this was a fundamental consideration of the AFS when he discussed with their Messrs Meany and Wesney the condition which Mr Boschetti sought to enable him to retain a right to fish for tuna in the S/WTBF in future and therefore retain an unrestricted CFBL. He said that there was concern that this would amount to licence splitting. The following extract from the transcript addresses this evidence in particular:
MR BUSS: Yes. As best you can recall, can you indicate who mentioned this to you?---It was the view of Mr Wesney certainly. And probably Mr Meany. That the maintaining one Commonwealth fishing boat licence would clearly be licence splitting which the Minister would not be happy with. Issuing a new one, which was not part of the original package, was not licence splitting. (Tr. p45, lines 4-9)
35. During cross-examination, Mr Stewart acknowledged that at this time there was in place a ministerial directive in relation to a licence freeze policy which would ordinarily have prevented the issue of another CFBL. He admitted that in that light "it has to be very exceptional circumstances to issue a new licence. That's why it's not done very often. It has to be a good reason." (Tr.p.55, lines 36-39)
36. Mr Stewart also said that to the best of his knowledge that the conditional sale of the units in the NPF pursuant to the voluntary adjustment scheme, by the applicants was unique. (Tr. pp.45-46)
37. During his evidence Mr Boschetti said that whilst he was generally aware of the changes brought by the 1991 Act to the issue of FPs, he was not concerned that these affected what he believed to be a promise by the respondent (or more particularly, its predecessor, the AFS) to issue the first applicant a permit to fish for tuna in the AFZ waters known as S/WTBF. When the evidence of Mr Venslovas was put to Mr Boschetti and in particular, he was asked about his awareness of the various attachments (R4) and to T6 and T7 (above) he said he would have received these and may well have read them. Mrs Boschetti gave evidence that her husband was a keen reader of publications about his industry and those issued by the respondent, including the Australian Fisheries magazine and its supplements. Mr Boschetti confirmed this but said that he mainly focussed on articles that he believed were relevant to his then fishing operations. He admitted being at least vaguely aware of the "abeyance policy" but denied any knowledge about the "licence freeze" on CFBLs, and the policy on preventing "licence splitting', each referred to by Mr Venslovas. His evidence was that at the time of the issue of these circulars and articles by the respondent, in 1992 and 1993, as he did not then have a licence to fish for tuna he was not particularly concerned about the announcements even though he may have read them. He felt these announcements did not affect him then. However, by 1994 he was fishing for tuna and did note the relevant policy announcements about potential controls relating to tuna fishing. However, Mr Boschetti's evidence (supra) was that in his view none of these affected what he believed to be a promise to be issued with a fishing licence to enable him to fish for tuna (subject to conditions) in the unmanaged tuna fishing area known as the S/WTBF.
38. Mr Boschetti was asked why he never made inquiries of the respondent about what he understood to be a right to a FP during the period after 1991 when these policies and changes were being introduced and which clearly affected the rights of fishermen to fish for tuna in the relevant zone. The Tribunal understands Mr Boschetti's evidence in this regard that he was very busy at the time as the business was not going as well as he wanted and he was fairly well preoccupied with its day to day management. His evidence (supra) was that (in any event) he had what he wanted (the promise) and when the businesses were in a position to fund a purpose built tuna fishing vessel he would apply for the licence. He said that he would never have sold the 2 Class B and 535 Class A units in the NPF had he not been promised "a right to and unrestricted licence to take tuna in Western Australian waters", (Tr. p.214).
39. Mr Boschetti's evidence was that as the business was then in a better financial position to consider building the purpose built vessel, the letter of 26 May 1995 (T8) was written to inquire whether the respondent would "honour this commitment".
40. Mr Boschetti was asked about the businesses' purchase of tuna FPs from the Eastern States when he had a right, so he said, to be issued with one free. This is the exchange in that regard:
MR RITTER: Now this [a reference to T7, the media release of 3 November 1994 (supra)] concerned a number of things but, in particular it made reference ... to the exchange of permits from the east coast to the Western Tuna and Billfish fishery. You were aware of that policy, weren't you?---Yeah, I became aware of it, yes.
Well, in particular you utilised that policy, didn't you?---I did.
Because you bought four units from people who were fishing on the east coast, didn't you?---Yes.
Any you then used the swaps or exchange policy to use them on the west coast?---yes.
To go fishing for tuna?---Yes
...
And at this stage you say you still had this entitlement to a licence to fish for tuna, based on that commitment that you say you got from Mr Meany?---Yes.
Well, why not exercise that entitlement at that time if you had it?---Well, we didn't have the money to put on a new boat in the fishery. And that is the time I said that we were going to apply for it. And that is when we applied for it. Then.
...
Well, here was a situation where, according to your evidence, you could have gone to AFMA and said, "I want that licence or permit now", couldn't you?---I could have done but I didn't do it.
But instead you bought permits on the east coast?---That is true.
Well, I suggest to you that if you had -if you thought you had this commitment to a licence, you wouldn't have spent money purchasing licences on the east coast. You would have just asked for your free licence to use on the west?---Well, I said before that we have got 20 licences. I am in the fishing business. And I believe that those units were of some use to me in the Western Tuna Fishery. And that had nothing to do with the licence I tried to get from Meany.
...
Without thinking about that [the right], you go off and pay money for licences to swap?---That is exactly what I did, yeah.
Well, that would be foolish business practice, wouldn't it, Mr Boschetti, with respect?---What, buying four licences?
When you had one that you could use for free and you said all along that you were struggling, yes?---Well, I though it was a good business decision to buy those four licences.
...Why buy [the four licences] to use for tuna fishing when you had one, according to you, that you could use for free?---Well, why - I don't know why I didn't ask them for that license then.
It suggests, does it not, that you didn't really think you had that license or the entitlement to that license?---Well, I have to disagree with what your saying. (Tr.pp.249-250)
41. The following questions put by Mr Ritter to Mr Boschetti, and his answers, relate to the various fishing licences held and vessels involved in "the business" and Mr Boschetti's intentions in these regards:
Mr RITTER: Mr Boschetti, Mr MacNish asked you about the four licenses in the Tuna and Billfish Fishery that you currently have and you say that there are three boats that can be used on three of those licenses at the moment? ---At different times of the year, yes.
Yes. And there's one license for which you have no boat?---Its not been used.
No. In fact, the endorsements on the license at the moment would reflect that there was no boat on three of those four licenses, wouldn't it?---Yes.
And that's because the Business Class and the first Class are currently being used for rock lobster fishing?---That's correct.
Yes. But you use those two boats for tuna fishing outside the rock lobster season?---Correct.
And the Discovery 3 was the purpose-built vessel?---Yes.
For tuna fishing?---Yes.
And that's used for tuna fishing throughout the year?---Yes.
And when you were negotiating with Mr Stewart, what you wanted in the end was a license or a permit as it now is, which would allow you to use a purpose-built vessel when it was ultimately built?---Correct.
Yes. So in effect, you now have what you want?---No.
Well, you've got a license which can be used for your purpose-built vessel and it is used, isn't it?---I've got four licenses.
Yes. But you have a license which is used for a purpose-built vessel?---Yes.
The Discovery 3, was that launched in July ... 1999?---Yeah, I think so. I can't be sure.
Okay. And you don't currently have any other boats sitting idle that you could use for tuna fishing if you were granted another license?---No.
Nor are there any boats under construction?---No.
What it would give you, though, is the capacity to use another boat when one became available to you, if and when one became available to you?---Yep.
And in addition to that, there is the fourth license at the moment, which you could use to fish for tuna if and when you had a boat available to use?---Yeah. My intentions are to use those four licenses that I've got, plus the one that I'm going to get.
Right. So your intention is to maximise use of all those licenses if you get the other one?---Yes.
Yes. And therefore increase the amount of fishing in the fishery by using those licenses?---I don't necessarily agree with that. I wouldn't know.
A simple point, though, is if you've got another boat out there fishing, you would hope to catch, as you say, 200 tonnes of tuna per annum?---Yeah.
...
The D. PRESIDENT: ... Is that what you have in mind, if you get the license?---To put another [boat] into the fishery, yes, it is.
Another purpose-built?---I intend to have as many as I can on those licenses, all purpose-built. (Tr. pp.215-217)
42. Much of the rest of the cross-examination of Mr Boschetti by Mr Ritter concerned Mr Boschetti's views on the sustainability of tuna fishing in the Western and Southern Tuna and Billfish fisheries (W/STBF). In particular Mr Boschetti was examined in relation to a letter which he had written in April 1998, by way of a submission, to the Western Tuna MAC (Ex. R2). That letter was written at a time when the government was considering removing all internal fishing boundaries including the divide between the Western and Southern tuna and billfish fisheries. That divide is referred to as latitude 350S and is approximately off the town of Margaret River in Western Australia. The letter is reproduced below:
Latitude Fisheries Pty Ltd (letterhead)
Mr Peter Neve
Executive Officer
Western Tuna Mac
PO Box 7051
Canberra Mail Centre ACT 2601
Dear Peter,
Re: Internal fishing boundaries in the WTBF and STBF
I apologise for the late arrival of our submission regarding the proposed changes to the internal boundaries.
I wish to express my concern over altering the present boundaries. I am opposed to any changes to the present boundaries until further information is available regarding the sustainability of the fishery. I believe there is a potential fishery on the West Coast, for Broadbill and Tuna, however the resource has not yet been properly assessed as to how much effort it can sustain.
At present there are 40 permit holders with only a small number of these being active. We are in possession of 4 licenses and have been fishing since 1992 in the rock lobster off seasons. As you are aware we have invested considerable time and resources in developing and exploring this fishery. As we have investigated this fishery, much interest in it has been generated. Licenses are available for purchase quite readily for those wishing to pursue this interest.
Over recent years there has been a considerable increase in effort on the east coast of Australia. Vessels have become larger and more efficient in fishing effort. This too is likely to occur in the Western Fishery over the forthcoming years by the present operational permit holders and those holders who do not currently operate may choose to commence. The latent effort in the fishery at present is too great to even consider opening it up further. Time is needed to observe and develop this fishery.
We are involved in the Western Rock Lobster Fishery and the Northern Prawn Fishery and have been involved in significant reductions of effort under management plans to preserve the Fisheries. The NPF in particular has seen drastic reductions through costly buy-back schemes. These types of management plans have the potential to become very costly to implement in the long term. I believe this should be taken into consideration as any short term cost saving measures could easily eventuate into long term expensive measures should the Western Tuna Fishery be over fished.
We hold the view that the fishery is not likely to support even the present 40 permits holders. Opening this fishery's boundaries even under Option 1 at this stage of development would be very premature and perhaps damaging to the resource. We are strongly opposed to any changes at present.
Yours faithfully
(signed)
Bert Boschetti
43. Mr Ritter referred Mr Boschetti to this letter. The following record of the transcript relates:
Mr RITTER: And indeed in the ... third paragraph you confirmed that you had four licences?---Yes
And you said there are 40 permit holders with a small number of these being active?---I don't know if that number is correct. I'm not sure if that number is correct.
All right. But you wrote that on the basis of your understanding that it was correct, did you?---At the time, yes.
Yes. Do you know the correct figure now?---No. 125 - I know that the number is for both fisheries.
Total for both fisheries?---Total for both fisheries, yes.
Is that just long line?---Yes.
If I put to you that it was 89 long line and the rest were other forms of fishing, would you accept that?---89?
Eighty nine long line licences in both fisheries?---I seem to recall the number 125.
I think the number 125 encompasses long line plus permits which allow other than long line?---No. I don't have any - I'm not sure; ...
... But you say in that third paragraph that you were in possession of four licences?---Yes.
And you go, in the next paragraph, to say:
There's been a considerable increase in effort on the east coast of Australia.
?---Yes
The vessels have become larger and more efficient in fishing effort.
?---Yes.
This too is likely to occur in the Western Fishery over the forthcoming years by the present operational permit holders and those holders who do not currently operate may choose to commence.
?---Yes.
In other words, there were people who held permits which weren't using them to the full extent that they may do?---Say that last bit again, I didn't ...
Yes. In other words, there were permit holders who could fish in the Western Fishery who weren't using those permits?---That's right, weren't using them, yes.
In the same way that you have permits now that you don't exploit in the fishery?---Yeah.
Okay. And the fact that people could use those permits to fish in the fishery is what's known sometimes as "latent fishing effort"?---Yes.
Okay. And you say in that sentence then:
The latent effort in the fishery at present is too great to even consider opening it up further.
?---Yes.
And there has been a closure of the fishery at that stage, hadn't there?---Yep.
Yes. And are you still of the view that the latent effort in the fishery is too great to even consider opening it further?---Yeah, I do.
Why is it then that you want an extra ... permit?---Look, if they'd have given me the permit when I applied for it none of this would have applied.
Well, I don't see that as answering my question, Mr Boschetti. If you agree that the latent effort in the fishery at present is too great to consider opening it up further how do you reconcile that with your application for another permit?---I suppose I can't.
No. Do you agree with the next sentence still: "Time is needed to observe and develop this fishery"?---Yes.
... [y]our point was, ..., that if a decision is taken now to open up the fishery and it's decided down the track that the fishery should contract again, the exercise of contraction can be a long and costly exercise?---I agree.
That was your point, wasn't it?---Yes, it is.
And that was your point being relevant to the opening up of the Western Fishery?---Yes.
And it's still a valid point. Yes?---Yes.
Then in the next paragraph you say:
We hold the view that the fishery is not likely to support even the present 40 permit holders.
?---Well, that is my view.
... And you say ... that, "Opening the fisheries boundaries is premature"?---Yes.
"And perhaps damaging to the resource"?---Yeah
And they are views that you adhere to as well?---Yes. (Tr. pp.263-267)
44. Later, in re-examination of Mr Boschetti's evidence in relation to the letter to Western Tuna MAC (Ex. R2) Mr MacNish for the applicant put the following questions which Mr Boschetti answered as below:
Mr MACNISH: At the time you wrote the letter in April '98 over how many years had you invested time and resources in developing that fishery, [the WTBF]?---Since 1989
... So over a period of 9 years you had, is it the case, invested a considerable amount of money---?---Yes
--- in developing that fishery. Was it a concern of yours that if all of the internal boundaries between all of the tuna fisheries around Australia were removed that there might at least be a flood of activity in the Western Tuna Fishery?---I believe that to be the case, that would happen.
And were you, at the time you wrote this letter, concerned to protect your commercial interests and your investment in the fishery?---Yes.
At the time you wrote this letter did you personally have the benefit of any scientific evidence to back up your express concerns?---No
45. Mr Ritter, on behalf of the respondent, then produced a copy of an application by the first applicant in these proceedings, to be joined in another matter before the Tribunal in November 1999 (Ex. R3). The document was put to Mr Boschetti in his capacity as a director of the first applicant. He confirmed that he was familiar with the application and that it reflected views that he still held. The essence of the application was to join (the present respondent) in opposing an application by another (fisherman) party, which held a FP in the STBF, to seek a right to fish for tuna in the WTBF. That right would be achieved if the restriction on the FP to fish north of the 340S latitude "line" were to be removed.
46. In its pleading for the application to join, the first applicant submitted that if the application was successful then it "will suffer financial hardship" due to increased access to the WTBF by other commercial fishermen, increased competition, over exploitation of the WTBF and depletion of fish stocks (para 11 of Ex. R3). It further submitted:
13. It is in the interests of all licence holders in the WTBF and the STBF that the Demarcation Line is maintained since:-
(A) the Demarcation Line substantially limits access to both the WTBF and the STBF;
(B) limitations on access to the WTBF and the STBF ensure the ecological sustainability of the fisheries and prevent over exploitation of their resources;
(C) the complete lack of any scientific and pragmatic data about the resources of the WTBF not only cannot justify the effective removal of the Demarcation Line and increased access to the WTBF, but is a substantial reason why the Demarcation line should remain as an effective barrier between the WTBF and the STBF;
(D) the removal of the Demarcation Line would threaten the sustainability of the resources of the STBF and the WTBF and Australia's credibility within the international fisheries community. (para 13 Ex. R3)
47. In paragraph 15 of its application to be joined, (Ex. R3), the first applicant repeats its views expressed in paragraph 13(C) concerning "the complete lack of any scientific and pragmatic data about the resources of the WTBF", and submitted that the demarcation between the two tuna fisheries should be maintained in accordance with the exercise of "the precautionary principle". Mr Boschetti said, in answer to a question put to him by Mr Ritter, that he understood what was meant by the precautionary principle. The Tribunal is satisfied that Mr Boschetti has a proper understanding of that principle which is defined as follows :
3.5.1 precautionary principle-
Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.
In the application of the precutionary principle, public and private decisions should be guided by:
(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and
(ii) an assessment of the risk-weighted consequences of various options.
48. Later, the Tribunal asked Mr Boschetti what he understood by the expression "over exploitation" used in the submission to be joined (Ex. R3) above. He confirmed that it was a reference to both the effects on the fishing stocks and the economic prosperity of those fishing the particular resource; (Tr. p.278). Indeed, in paragraph 12 of its submission (Ex. R3), the first applicant asserts that it will be disadvantaged if the Demarcation Line is removed. And those disadvantages are enumerated as resulting from a decline in the current value of WTBF fishing licences, an erosion of the benefit of its considerable investment in the WTBF (through increased competition) and possible "over exploitation of the fishery's resources"; (Ex. R3, p.3).
Evidence relating to the Table of Detriment
49. On 27 and 28 April 2000, the two business days prior to the commencement of the hearing in this matter, the applicants' solicitor filed with the Tribunal a supplementary statement of evidence for each of Mrs J E Boschetti (Ex. A2b) and Mr J A Boschetti (Ex. A6b) and a statement of evidence by Ms Lian Papaelias (Ex. A5). The supplementary statement filed on behalf of Mrs J E Boschetti and the statement filed on behalf of Ms Papaelias deal with what the applicants assess as a financial detriment suffered by them in consequence of having sold, in 1989, the 2 Class B and 535 Class A units in the NPF previously mentioned.
50. The respondent objected to this evidence on the basis that it was not given reasonable notice and was, in effect, taken by surprise, having no time to prepare an appropriate cross-examination of either Mrs J E Boschetti or Ms Papaelias. No cross-examination was conducted by the respondent in respect of this evidence. The respondent submitted in these circumstances that the evidence should be given no weight. The Tribunal, whilst sympathetic to this submission never-the-less does canvass the evidence for the sake of completeness but as will be seen, that evidence has no bearing on the decision reached.
51. The Tribunal finds it helpful to explain what it understands the Table of Detriment (Ex. A2c) proposes. The relevant evidence relating to the source and reliability of the figures used in the calculations will be mentioned subsequently. In essence, the Table is a calculation of what the applicants say they have forgone, in financial gains otherwise likely to have eventuated up to the time of the hearing, because they sold their 2 Class B units and the 535 Class A units in the NPF, in 1989. The Table makes relevant calculations for three separate periods, each commencing in 1988 and ending respectively in 1995, 1998 and 2000. The Table begins by stating the amount received as a result of the sale of those units to the government for $450,750. It then inflates that amount by the Reserve Bank 10 year Treasury Bond rates prevailing from 1988 to 2000 to calculate the present value of the consideration as at 1995, 1998 and 2000. The Table then calculates the "cost of maintenance of A units" by multiplying, for each year 1989 to 1999 inclusively, 535 (being the number of Class A units sold) by the annual licence fee payable to maintain each of those units in the NPF. It then provides a total of those amounts for the three periods mentioned, to 1995, 1998 and 2000. Then follows a calculation based on the fact that in 1993 all NPF licences were subject to a compulsory surrender scheme requiring the surrender of 30.76 percent of licences. Apparently, the government made no payment for the units surrendered. The Table then assumes that the applicants would have purchased the same number of units as surrendered in order to maintain the number of Class A units at 535. Therefore, the Table calculates that on the basis that a Class A unit was then selling for $1,440, it would have cost the applicants, in 1993, $342,720 to replace the 238 Class A units, compulsorily surrendered. The Table then calculates what would have been the value of those 535 Class A units if held to 1995, 1998 and 2000 respectively, using unit values of $4,000, $6,800 and $6,500 respectively and adding to each of those three amounts a value for two Class B units. The next factor taken into consideration in the Table is an hypothetical sum receivable should the 535 Class A units have been leased. The hypothetical revenue is calculated for 1995, 1995 to 1998 inclusively, and 1995 to 1999 inclusively. The accumulated amounts for the three periods are: 1995, $176,550; 1995 - 1998, $749,000; and 1995 - 1999, $957,650. The Table then summarises the foregoing amounts for each of the three periods from 1988 to 1995, 1998 and 2000 respectively, concluding that the financial detriment suffered, because the Class B and Class A units in the NPF were sold in 1988 and 1989, is $714,477, $2,605,725 and $2,319,983 respectively.
52. Mrs Boschetti provided background evidence as to how the various valuation figures used in the Table were ascertained. The amounts shown in the Table for the sale consideration in 1988 and 1989 were actual amounts received (for other sales) and referred to previously in evidence. The amounts used to calculate the cost of levies to maintain the units were actual amounts for all but the 1995 year which was "guessed' (Tr. p82, lines 31- 40). The amount used to calculate the cost of the hypothetical repurchase of the 238 units compulsorily surrendered was based on actual purchases and sales (of other units) in 1993 (Tr. p83). The value attributed to the units was based on verbal unconfirmed information obtained from a person who was then an AFMA board member actively involved in the fishing industry (Tr. p85, line 14) and actual purchases by the applicants (Tr. p85). Similarly, the amount attributed to the hypothetical leasing of the units from 1995 was based on actual leases in 1995, 1997 and 1998 and a guess for 1996 (see Tr. p86).
53. As mentioned, the respondent did not cross-examine on this evidence contending that it was prejudiced by late notice. The Tribunal is satisfied, on the basis of Ms Papaelias' evidence that the arithmetic is correct. However, that witness was not able to take the matter any further and indeed had no actual knowledge of the assumptions and hypotheses upon which the calculations were based. The Tribunal, in the circumstances, is reluctant to accept the Table of Detriment (Ex. A2c) as setting out a reasonable statement of financial detriment suffered by the applicants because they sold their two Class B and 535 Class A units in the NPF in 1988 and 1989. The evidence of Mr Boschetti and supported by Mr Stewart is that those units would not have been sold if Mr Boschetti had understood that the first applicant would not have been entitled to a CFBL (or FP as it now is) at some future time. In the opinion of the Tribunal it is pure conjecture whether, in the years since 1988, that had the units not been sold, then the applicants would have derived the sort of financial results fundamental to the calculations. Having regard to the issue before the Tribunal and its task of reviewing the decision under review, the Tribunal is of the opinion that the evidence relating to an hypothetical financial detriment suffered by the applicants is not relevant. The Tribunal makes no findings as to whether the calculations are reasonable, reliable or otherwise. Simply put, in the opinion of the Tribunal the applicants are drawing a rather long bow in their "but for" calculations based on the fundamental premise attested to by Mr Boschetti. That premise is that the applicants would not have sold their 2 Class B units and their 535 Class A units in the first place unless they had a promise to be issued with a CFBL as and when they applied for it in future. The fact is that the applicants did sell those units at the time. Mr Boschetti admited that at the time of the sale of the two Class B and 535 Class A units in 1989, the first applicant was experiencing a downturn in its NPF business and that the sale was probably motivated by what was then perceived to be sound commercial judgement which included a plan to diversify in future into tuna fishing.
54. Based on the evidence of Mr Boschetti and Mr Stewart, the Tribunal accepts as fact that the sale of the units in the NPF was conditional upon the said promise. However, that, of itself is not sufficient. And in the light of other commercial considerations pertaining at the time it is not open to draw an inference of fact that the sale of the units would not have gone ahead without the promise. Hindsight is a marvellous thing and allows reflection on one's past actions to conclude that given present knowledge one may well have behaved differently. This, in the Tribunal's respectful opinion, is all that can be concluded about the statement of detriment. It cannot, by its very nature, create a factual matrix upon which the Tribunal can draw conclusions. In the Tribunal's opinion, put at its highest, the statement of detriment is an expression of opinion, not fact or indeed, an inference which cannot be supported by positive proved facts.
55. The Tribunal simply observes that on the basis of the evidence of Mrs Boschetti there are many unsatisfactory aspects to the basis of the calculations of the financial detriment claimed which, if they were at all relevant, then they may not be reliable.
The evidence of Mr Venslovas and Ms Lack
56. Mr. Venslovas has been a Senior Manager in Compliance with AFMA since February 1992. Prior to this appointment he was employed by Australian Fisheries Service. Mr. Venslovas said that during the period 1988/89 when various Class 'A' and 'B' units in the Northern Prawn Fishery were surrendered, the second applicant held units and one CFBL at the time the buy-back was being undertaken or negotiated. However, the first applicant held one Class 'B' unit and several Class 'A' units, but did not hold a CFBL in respect of the Class 'B' unit. He said that the management arrangements at that time required a CFBL before the Class 'A' and Class 'B' units could be activated, that is, by attaching those units to the CFBL. The units held without an accompanying CFBL were referred to as "units in abeyance" or "units in suspense".
57. Mr. Venslovas referred to the "License Splitting Policy" introduced in 1984 (R4, PEV 4) at a time when the number of limited entry fisheries was increasing. It followed an agreement between the Commonwealth and relevant State and Territory Ministers. The policy reflected concerns of over-exploitation of fishing stocks. The then Australian Fishing Council ("AFC") "endorsed the general concept that where a boat was endorsed to operate in more than one limited entry fishery, or more than one zone of a limited entry fishery, the licensee not be permitted to transfer those endorsements separately except in accordance with specific criteria applying to the fishery concerned." (R4, PEV 4, p19) Such a split of licences would allow two or more boats to operate compared to the previous situation where only one boat operated in respect of those licences.
58. Mr. Venslovas said at the time of Mr. Meany's letter to the applicant (T4) in January 1989, that "any CFBL held by the applicant would have allowed access to tuna fisheries, in particular, the western tuna fishery".
59. Mr. Venslovas stated that after the introduction of a freeze on the issue of new licences in July 1985, a "Licence in Abeyance Policy" was adopted by the AFS. This policy was explained in a document sent to the AFC in 1987. The policy allowed operators who were in the process of changing boats (or changing their business operations) and who held a CFBL, to place their licence in "limbo" for up to two years, until such time as they completed the relevant transactions. When a licence was placed in abeyance, the following conditions arose:
* In the case of a Commonwealth license, any State licence attached to it was also placed in abeyance;
* the entitlement to reactivate a licence in abeyance had to be exercised within a two year period;
* the right to reactivate any licence placed in abeyance was also subject to any change in fisheries management arrangements that occurred during the abeyance period; and
* there was no guarantee that a licence in abeyance would be reactivated or renewed.
60. Mr. Venslovas said that the licence in abeyance policy could apply, or potentially apply, to Northern Prawn Fishery licences.
61. Mr. Venslovas stated that changes in the licence in abeyance policy arose following the replacement of the Fisheries Act 1952 by the Australian Fisheries Management Act 1991 ("the AFM Act"). From 1994, under the AFM Act, FPs could only be issued to a "natural person or company" and no longer to particular boats. The reason, he explained, was to enable operators to retain their entitlement in the form of a FP without the need to place it in abeyance. By this means, operators would continue to contribute to the management of the fishery by paying management levies.
62. Mr. Venslovas stated that CFBL's continued to be issued after the AFM Act came into operation, subject to conditions. After 3 February 1995, CFBL's became "fisheries specific". Prior to this the operator was not confined to a particular fishery.
63. Mr. Venslovas referred to a number of strategies adopted by Australian Fisheries over time to ensure that operators in a particular fishery were aware of the new developments in fisheries management and policies that would affect their operations. These included publication of articles in commercial fishing journals, press releases and ministerial announcements. The intention was to ensure that fishermen, in making business decisions took account of actual and proposed policies. He said that some of the proposed policies invited public, as well as industry submissions, as part of the policy determination process.
64. Mr. Buss asked Mr Venslovas about the distinction between a "cancelled licence" and a "licence in abeyance". He said that "cancelled" referred to a situation where the licence had expired and not renewed or placed in "abeyance" prior to expiry. He added that if a licence was cancelled then, normally, it could not be reactivated. He said that AFMA considered the term "in abeyance" applied in the following instances:
* when an expired licence, which had not been renewed (at its expiry time) was placed "in abeyance" by the licensee instead of being renewed; and
* when the licensee of a current licence not then in use requested it be held "in abeyance".
65. Both instances required an application by the licensee prior to expiry. Licences in abeyance could not be used. The licensee was required to apply to reactivate it. As mentioned, there was no guarantee that AFMA would necessarily reactivate a licence in abeyance.
66. Mr Venslovas distinguished licences officially "in abeyance" from those not being used at any particular time. The latter were considered to be "latent effort licences". The Tribunal understands that annual renewal fees would be payable in relation to such licences but not in relation to the former.
67. The following is the transcript of questions by Mr Buss of Mr Venslovas, in relation to what Mr Buss termed a "more lenient approach" by AFMA to issuing fishing concessions in the Southern and Western Tuna and Billfish Fisheries ("S/WTBF"):
Mr Buss: And is it correct that CFBLs continued to be issued for most tuna fisheries until early 1995?---That's correct.
Thank you. Is it correct that in 1994 AFMA facilitated the exchange of ETBF [Eastern Tuna and Billfish Fishery] concessions for S and WTBF concessions in an attempt to encourage development of the fishery?---That's correct, to my knowledge.
Is it correct that in late 1997 AFMA reconsidered management measures, including vessel length restrictions, internal boundaries [of Fisheries] and licence splitting?---That's correct.
Is it correct that in 1997 the WTMAC [Western Tuna MAC] recommended and AFMA accepted that a more lenient approach to what are known as licence splitting applications be taken?---Within the existing cap on licences, yes.
And was it the purpose of that more lenient approach by AFMA to enable the transfer of W and STBF fishing concessions independent of other fishing concessions?---That process was only allowed for in 1994. The fishery was subsequently closed to new licences in December 1994.
Well, would you agree with this proposition: in November 1997 the WTMAC recommended and AFMA accepted that a more lenient approach to what are known as licence splitting applications be taken enabling the transfer of W/STBF fishing concessions independent of other fishing concessions?---Yes, that was to allow (interruption) ... licence splitting within the existing WTBF fishery under the cap on the number of authorisations that were issued in respect of that area.
Well, do you agree that this more lenient approach was taken to facilitate access to S/WTBF fishing permits?---It allowed for a more flexible approach.
Well, would you just answer the question: do you agree with the proposition that the more lenient approach was taken to facilitate access to Southern and Western Tuna and Billfish Fishing Permits?---No, I don't agree with that. I would say that it allowed a more flexible approach within the existing framework, and the existing framework being the total number of licences or authorisations. So it didn't allow for any additional authorisations to be issued but it allowed those that had them more flexibility in their areas of operation and so forth.
If Ms Lack expressed the view that this more lenient approach was taken to facilitate access to Southern and Western Tuna Billfish Fishing Permits, would you defer to her view on that point?---I would.
Do you agree that in December 1997 the AFMA Board agreed to remove vessel length restrictions in the Southern and Western Tuna Billfish Fishery effective from 1 July 1998?---Yes. (Tr.pp.311-312)
68. In response to a Tribunal question concerning restrictions in renewing CFBLs prior to 1995, Mr. Venslovas in essence said there were no formal restrictions until AFMA replaced the AFS, when fishery specific CFBLs were issued. Mr Venslovas said "However, [the fishery specific restrictions were not] really stringently applied because AFMA didn't have the resources to go through and verify all the catches and so forth that operators were submitting to prove a previous commitment. So, for all intents and purposes, they were renewed as a matter of course"; (Tr. p.313)
69. Mr. Venslovas agreed with the proposition that a person operating in the Northern Prawn Fishery, subsequent to 1995, would have only required Class "B" units and Class "A" units as statutory fishery rights. However, these rights would not have given rights to fish outside the NPF (i.e. in the S/WTBF).
70. During re-examination, Mr. Venslovas was questioned on AFMA policy in a situation where a person held an inactive CFBL in 1989 and sought to make it active in 1995, stating:
"Well, AFMA would have considered that CFBL would have been in abeyance from '89 and the 2 year period would have expired in '91 and based on that policy, they would not have been granted a CFBL." (Tr. p.316)
71. Furthermore, Mr. Venslovas said the outcome would have been the same if someone held a CFBL in 1989 and just let it expire. However, the evidence is that if the person had paid the annual licence fees to retain the CFBL, although not using it, it would have been regarded as "latent fishing effort" with no restrictions prior to 1992 on its becoming active. Mr Venslovas made relevant observations though, about such a CFBL being activated after 1995 in that any fishing concession would then have been designated fishery specific. After 1995 fishing concessions in the NPF did not require a CFBL; (Tr. p.314). The Tribunal understands that it is Mr Venslovas' evidence that there was no automatic right to have a "latent effort CFBL" (which, prior to 1992 was required for the NPF), to be granted S/WTBF specific rights in 1995.
72. During further re-examination of Mr. Venslovas by Mr. Ritter, he stated that there were occasions where operators who applied to reactivate a licence were unsuccessful because they did not comply with the licensing or management policies in place at that time. For example, he cited the policy that provides no guarantee to the issue of a fishing permit after 1992, solely on the basis that the person held a CFBL.
73. Ms Lack's evidence is that since 30 December 1994 there was a "limited entry policy" operating in the S/WTBF- "Limited entry is a limit on the number of operators that can operate in a fishery. And that is usually implemented by way of the issue of a limited number of permits or licenses for a fishery." (Tr. p320) The following is the transcript where Mr Buss specifically questions Ms Lack about controls then existing on fishing and specifically in relation to the then "limited entry policy" for the S/WTBF:
Mr BUSS: Now, there are two main types of fisheries management measures that can be adopted, aren't there? One of them is input controls and the other one is output controls?---That's correct.
And input controls rely on restrictions on the inputs to fishing, is that correct?---Generally, yes.
And they would include such matters as the number of vessels. Would you agree with that?---Yes.
Also the type and amount of gear and fishing time?---Yes.
And the purpose of those restrictions is really to control the catch, isn't it?---Indirectly, yes.
Yes. The purpose of output controls is to limit the quantity of fish that may be caught through setting limits on the total allowable catch per vessel or per licence?---Yes
All right. Now, you mentioned I think, that at the moment the Southern and Western Tuna and Billfish Fisheries are managed through input controls?---That's right.
In particular through fishing permits?---Yes.
It's correct, isn't it, that a limited number of permits are issued annually and that's why you've referred to this [as] limited entry policy?---That's right.
The permits which are issued specify, don't they, the area of operation and the fishing methods that can be used?---They do.
And a single permit can provide for more than one fishing method?---Yes, they can.
An example of that would be the provision for one permit to permit or specify long-lining and minor line fishing?---Yes, it would.
Now, are there any additional controls which are imposed on operators in the fishery in order to limit the catch?--- There are some. For example, we are concerned about the bi-catch, we call it, of sea birds. Operators are required to use tory poles to minimise sea bird bi-catch when they're operating in certain areas.
All right. Are there any other controls you can think of?---There are some bi-catch limits on some species under our optional constitutional settlement with Western Australia.
So, are there limits, for example, in place in relation to the catch of big-eye and yellowfin tuna?---No, there are not.
What about in the case of per seine operators? Are there limits in the case of the catch of those species?---There are bi-catch limits in place on per seine operations generally targeting skipjack and their take of big-eye and yellowfin tuna is restricted. (Tr. p. 328 line 17 - p.329, line 23).
74. Ms. Lack, in response to a question put to her by Mr Ritter said that until a management plan is introduced into the S/WTBF the only instruments (controls on catch) that AFMA has in place are the fishing zone internal boundaries and the limited entry policies. The following is the transcript relating to this evidence:
Mr RITTER: And until that management plan comes into place is the 34 degree line an example of the management controls that exist at the moment?---It certainly is, it's one of the only two instruments that we have in place.
The other being?---Limited entry.
All right. Now you've mentioned, in passing again, I think, something of the history of AFMA's position on licence splits in this fishery from the period 1997 to 1999. Perhaps if you can just reiterate and summarise what changes there have been?---Certainly. There has been what we call a no licence splitting policy in place in relation to Commonwealth and State fisheries since mid 80s. There's always been the ability to allow licence splits where the relevant managers of the fishery, be they Commonwealth and/or State, agreed that the split in itself would not lead to increased effort in a fishery where there was concern about the level of effort. In relation to the Southern and Western Tuna and Billfish Fishery, it was agreed in November 1997 that a more relaxed application of the licence splitting policy should be applied in the Southern and Western Tuna and Billfish Fisheries. That was consistent at the time with our desire to encourage development of the fishery by a domestic fleet. That relaxation, if you like, of the policy meant that from then on within AFMA when an application to split a licence package that contained a Southern and Western Tuna and Billfish Permit was received the manager of the Southern and Western Tuna and Billfish Fishery would approve it from that fishery's perspective. Now, of course, if another manager, be it a State manager or a Commonwealth manager, rejected the application on the basis of the impact that the split would have on their relevant fishery, then the split did not proceed even though it had been given approval in relation to the Southern and Western Tuna and Billfish Fishery. And that policy was applied in relation to the fishery until, as I said, the Board [of AFMA] changed that policy in December 1999.
Why did it change the policy?---It changed the policy because it believed that we had provided sufficient encouragement for activation of effort through the licence splitting policy and other means, and again it was concerned not to further encourage the activation of effort in the fishery.
(Tr.p.326, line 29 - p.327, line 17)
75. Ms. Lack said that one boundary line - the 34ºS [latitude] line, separated the Southern and Western Tuna and Billfish Fisheries. One permit could provide an operator with access to both of these fisheries. However, some operators were restricted to the WTBF, whereas other operators were restricted to the STBF. The majority of operators had access to both. Currently there are 124 FPs issued for the S/WTBF. Of these, 89 were long-line permits of the type sought by the applicant.
76. Ms. Lack said that two types of inactive permits identify "latent effort". These were permits that were held but not currently attached to an active vessel and those, although attached to an active vessel, that vessel was not operating either at all or to its maximum capacity in the fishery.
77. Ms. Lack said that currently (i.e. in 1999), as a measure of latent effort, 35 percent of long-line FPs having access to both S and WTBF were inactive and that 85 percent of those having access to the STBF were inactive.
78. Ms. Lack said that the "precautionary principle" warranted a cautious approach to the development of fisheries where there was an absence of full scientific knowledge. She said that recent management decisions by AFMA in relation to the S/WTBF were "based clearly on a precautionary approach". In this regard Mr Buss put the following questions to Ms Lack:
Mr BUSS: Ms Lack, it's the Board of AFMA, isn't it, which determines plans of management for fisheries?---Yes, it is. Sorry, a plan of management has also to be approved by the Minister.
Yes, I accept that, but before a plan is submitted to the Minister for his acceptance the Board of AFMA must determine that a plan of management for a fishery should be approved and adopted?---That's right.
Are you a member of the Board of AFMA?---No, I'm not.
Have you ever been a member of the Board?---No, I haven't.
Now, you mentioned the precautionary principle, it's correct isn't it, that the precautionary principle applies where there are threats of serious or irreversible environmental damage?---That's correct.
And the principle, as you understand it, states that where there are threats of serious or irreversible environmental damage lack of full scientific certainty should not be used as a reason for postponing measure to prevent environmental degradation?---That's correct.
Now, in relation to fisheries management, as you understand it the [pre]cautionary principle is concerned with achieving a balance between exploitation of resources on the one hand and conservation of resources on the other. Correct?---Yes, I would accept that.
Thank you. Now, in the Indian Ocean approximately 1.2 million tonnes of tuna and billfish are taken annually?---That's right.
And of that tonnage approximately 250,000 tonnes is taken using the long-line method. Is that correct?---Yes. (Tr.p.327, line 29 - p.328, line 13)
79. Ms. Lack stated that AFMA has had concerns over fishing effort levels in the S/WTBF since 1994. Prior to that they had no concerns. The introduction of the limited entry policy was seen as a precautionary measure as it decreased access to the S/WTBF from around 5,000 CFBLs to around 280 permit holders initially. However, at that time, there was very little activity in this fishery. (Tr. p.323, lines 5-14)
80. Ms. Lack said that in late 1999 AFMA's policy in relation to the S/WTBF changed markedly. Prior to that its position was one of actively encouraging development in the fisheries in a manner consistent with the limited entry policy. For example, through mechanisms such as removal of vessel length restrictions and a reduction in the number of internal boundaries in 1998. Up until September 1998 internal boundaries created about 13 zones in the S/WTBF.
81. However, this position of actively encouraging development in the S/WTBF changed following the December 1999 meeting of AFMA. At that meeting the Board had before it information about increased interest in the S/WTBF, an increase in the value of those permits and an increase in applications to split permits. Also that meeting was provided with relevant information from the CSIRO, including projections of catch and effort in the fishery. It also received information from the Indian Ocean Tuna Commission ("IOTC") which had met in September 1999 and which expressed concerns for big-eye stocks in the Indian Ocean. In the light of this the AFMA Board decided to move away from its position of active encouragement. Moreover, the AFMA Board:
"agreed that until a management plan was put in place for the fishery, the line at 34ºS should remain in order to contain the activities of those permits that have access only to the Southern Tuna and Billfish Fishery. And, in addition to that, it reinstated a tighter application of the no licensing policy in relation to the S/WTBF permits." (Tr. p.324 lines 22-27)
82. Mr Ritter put the following questions to Ms Lack in relation to the proposals to introduce a management plan for the S/WTBF:
Mr RITTER: Now is it the intention, then, to move to a management plan to manage existing permits in the fishery?---It is. That decision was actually taken, I think, around the middle of last year [1999]. But in making its decision in December [1999], the Board reiterated the urgency of the need to develop a management plan for the fishery.
And would the management plan involve any relaxation of the limited entry policy at all?--- There is certainly no intention of doing that.
No. What sort of things are being looked at in the management plan?---We are at the early stages of development of the nature of the plan. But the plan will involve the allocation of statutory fishing rights. The strongest form of fishing right that we are able to allocate. And that right will either provide operators with a maximum amount of catch that they can take in relation to a particular species through quota. Or it will set limits on the amount of gear that operators can use. (Tr. p.324, line 29 - 44)
83. Ms Lack said that the AFMA Board had agreed that when the management plan was in place, the demarcation line at 340S latitude would be removed because stronger management controls could be achieved through mechanisms other than through the retention of the line. She also agreed with Mr Buss that the preparation of such a management plan can be protracted and can take many years. She further agreed that the management plan in question for the S/WTBF is at present in its very early formative stages; (Tr.p.354, lines 4 - 6).
84. Ms. Lack in her evidence in chief, referred to available catch data in the S/WTBF for the three main species targeted - big eye tuna, broadbill swordfish and yellow fin tuna. The Tribunal understands that the catch data was based on AFZ Australian licensed operators' logbook records over the period 1994 to 1999. She said that over the two year period from 1997 to 1999, there had been a 9 to 10-fold increase in the catch of big eye tuna (from 43,122 kilograms to 400,976 kilograms), a species for which there was some concern about stock sustainability in the Indian Ocean. Subsequent to this evidence, Ms Lack was able to provide a more comprehensive table of catches including those of Japanese fishing operators who were licensed to fish in the S/WTBF. The Japanese fishing permits to operate in the S/WTBF reduced from 29 boats in 1994, to 23 boats in 1995, to 15 boats in 1996, and to 9 boats in 1997, the final year in which permits were granted. The comparative catches of the three mentioned species in 1999 of 400,967 kilograms was a 2.6 fold increase (compared with a 9 to 10-fold increase mentioned earlier) over the total 1997 catch of 152,222 kilograms, which includes the recorded catch of the Japanese licensees.
85. Furthermore, Ms Lack said, with respect to the long-line fishing, of the type of permit for which the first applicant had applied, that there had been a growth in the number of hooks set in the fishery for each month in 1998/99, compared with 1997/98. The table (Ex. R5, p58) shows a graph of total hooks deployed in the S/WTBF between September 1997 and August 1999. It rises from around 25,000 to about 400,000. The information was compiled from licensed permit holders operating in the S/WTBF. (Tr. p325, lines 1 - 33) The Tribunal understands that this table does not include the number of hooks set by the Japanese in either September or October 1997 (when Japanese fishing in the AFZ ceased) in the S/WTBF. To that extent the graph does not indicate a complete measure of increased activity in the zone but it can be assumed from the foregoing information about numbers of Japanese tuna boats at the time that it would not have made a significant difference.
86. Under cross-examination by Mr. Buss, Ms. Lack told the Tribunal that a total of 1,200,000 tonnes (i.e. 1,200,000,000 kilograms) of tuna and billfish were taken annually in the Indian Ocean and about 0.25m tonnes (i.e. 250,000 tonnes or 250,000,000 kilograms) of this total were taken annually using the long-line method. (Tr. p.328, lines 9-13) This ratio, differently expressed is that 20.83 percent of total Indian Ocean catch was taken by the longline method.
87. In terms of fishing effort, Ms. Lack agreed that the amount of effort of the Australian limited entry fleet was "relatively small" compared to the total effort in the Indian Ocean. In this regard Mr Buss asked the following questions:
Mr BUSS: Now this is a document which was put before the AFMA Board by AFMA management which sought, amongst other things, to summarise reasons for retaining the line at 34 degrees south and reasons for removing the line?---That's correct. It's an assessment of retention and removal of the line against AFMA objectives. (Tr. p.363, lines 16-20)
... [it] says:
"The counter sustainability argument has focused on the highly migratory nature of the stocks that are accepted as being part of the broader Indian Ocean stocks and the relatively small amount of effort in the Australian limited entry fleet"
You would accept, wouldn't you, that it's accurate to describe the amount of effort of the Australian limited entry fleet as being relatively small?---It is, in relation to the total effort in the Indian Ocean, certainly.
What was the tonnage of stock caught in the Indian Ocean? How many million tonnes was it?---I think - well, by the long line method I thing there were 250,000 tonnes of tuna and billfish.
And overall it was about 1.2 million, wasn't it?---In total 1.2, mostly taken by the per seine method. (Tr. p.363, line 34 to p.364, line 10)
88. Mr Buss, earlier in his cross-examination of Ms Lack, had touched on the matter of stocks of tuna and billfish in the S/WTBF. The following exchange between himself and Ms Lack occurred:
Mr BUSS: ... What I am suggesting to you ... is that uncertainty exists as to the status of broader Indian Ocean stocks of these species but there is no indication for concern regarding the status of these species targeted in the S/WTBF?---Yes, I would agree with that.
That's correct, isn't it?---Yes, it is.
And that remains your view today?---Yes; although, having attended in December the meeting of the Indian Ocean Tuna Commission - that is, separate to the working party meeting of September - the full meeting of the Commission in December and having heard that Commission's response to this scientific advice that it received, I would have to say that I'm more concerned now about the status of - the broader status of big-eye stocks than I was in November.
Well, you may be in relation to the Indian Ocean, but not in relation to the S/WTBF?---Well, it is the same stock.
What I'm suggesting to you is that, even today, that you hold the view that there is no indication for concern regarding the status of these species in the S/WTBF although some uncertainty exists in relation to the broader Indian Ocean. That was your position as at late November 1999, its your true position today?---No, I'm saying that my position today is that I am concerned about Indian Ocean stocks of big-eye tuna, and that extends to concern for the increased effort on that stock in the AFZ.
Well, what statistics have you received in relation to big-eye stock within the S/WTBF between late November 1999 and today?---None. (Tr.p.326, lines 16 - 44)
89. Later in her evidence, in response to a question put to her by the Tribunal, about the potential risks related to migratory species, big-eye tuna, broadbill swordfish and yellowfin tuna, the three tuna species here in question, Ms Lack said:
Dr CHRISTIE: ... And the effects of those particular risks on the fishery?---In a general rather than in relation to this fishery?
In relation to this fishery?---In relation to this fishery, well, again, we are speculating to some extent as to what those risks and the extent of those risks are. And at what point they will ... be realised. It is difficult to know - we don't think we know that for very few fisheries. Data is difficult to come by. Migratory tuna stocks are particularly difficult to get good solid information on. So it is very difficult to know at what point your risks are actually going to cut in. That is why ... the precautionary approach is so relevant to fisheries management. Because there is so much uncertainty.
You raise the question of migratory species and it is a fairly obvious one but there hasn't been any evidence or any comment on it at this stage. What potential problems does migratory species have for the evaluation of risk or for the question of sustainability?---Well, certainly, if we take the S/WTBF, for example, we have already talked about the fact that the stocks that we fish within the AFZ ... are part of the broader Indian Ocean tuna stocks. And we have heard that approximately 1.2 millon tons of tuna is taken out of that broad Indian Ocean by a range of countries. Some of those countries are responsible fishing nations. Others are not. Hence, our need to get involved in regional fisheries management arrangements and to try and pool scientific expertise so that any potential difficulties with stocks are identified sooner rather than later. And identified as a group of countries rather than by an individual country. (Tr. p.378, lines 1 - 30)
90. Ms. Lack acknowledged that in relation to the then AFMA proposal in March 1998, to remove the 340S latitude internal boundary between the STBF and WTBF, AFMA expected slow growth in the those zones over the following few years. (Tr. p329, lines 40 - 44 & p330, lines 7 - 11)
91. Ms. Lack stated that when AFMA decided to remove all boundaries in the S/WTBF, other than the boundary at 34ºS, the Board considered that this decision was consistent with the following legislative objectives of the AFM Act at that time:
* efficient and cost effective fisheries management;
* economic efficiency; and
* ecologically sustainable development ("ESD").
92. This decision became effective from 1 September 1998 and resulted in three types of exclusive fishery access. Those being access to either STBF or WTBF only and access to both.
93. [NOTE - THIS PARAGRAPH IS SUBJECT TO A S35 CONFIDENTIALITY ORDER]
94. In relation to the November 1999 Western Tuna MAC report, Ms Lack's evidence was that she then held views in relation to the effect of certain policies on market prices of fishing concessions. She believed that by retaining the 340S demarcation line between the STBF and WTBF together with a no licence-split policy (and limited entry), the effect would be artificially to push up the price of licences to fish in those zones, at least until the management plan was introduced. When asked by Mr Buss whether this is still her view, she agreed that this was a consequence; (Tr. p.353, lines 20 - 28).
95. Mr. Buss questioned Ms. Lack about arguments for removal of the 34ºS line. Ms. Lack agreed that the line impeded the legislative objective of AFMA of pursuing economic efficiency. In addition, that the line did not have a role as a stock boundary; nor would the line, of itself, control effort increase of Indian Ocean stocks.
96. In relation to licence splitting applications prior to November 1999, where the split involved the S/WTBF and a permit for another Commonwealth fishery, Ms. Lack stated that the approval of the two relevant AFMA managers was required. Such approval was based on their perspective of the fishery for which they were responsible. Moreover, she acknowledged that whereas the policy in the S/WTBF was to encourage fishing effort, the ETBF had reached the limits of its capacity. As a consequence, the manager of that fishery generally refused a license split on the basis that it may increase fishing effort in that fishery. (Tr. p.347, line 17 - p.348, line 4)
97. [NOTE - THIS PARAGRAPH IS SUBJECT TO A S35 CONFIDENTIALITY ORDER]
98. Mr Buss then put the following proposition to Ms Lack:
Mr BUSS: So, what I'm suggesting to you is that the Group believed, and importantly, you believed that, even at late November 1999, to allow another 38 permits would or would not be sustainable?---That's right, and we still don't know whether or not it would be sustainable. That's the uncertainty associated with fisheries management. (Tr. p.360, lines 21 - 27)
99. The Tribunal pursued the question of AFMA's approach for achieving its legislative objective for ESD in relation particularly to the S/WTBF. Ms. Lack was referred to the Council of Australian Governments (December 1992) document "A National Strategy for ESD" and specifically the objectives for "Fisheries Ecosystem Management". The transcript in this respect states:
Ms LACK: (in response)... So as far as we are concerned, the fishery is currently being managed in accordance with our understanding of the ESD objective and the precautionary principle and of course, our move to a management plan that will also be implemented under the Act and in accordance with those objectives of the Act is further justification of the fact that the fishery is being managed in accordance with those objectives.
... we haven't done what you would call a specific review of the fishing fleet capacity in the S/WTBF, but for example, we are aware of the number of active vessels. We are aware, as we saw in the attachment to my statement, of the number of hooks that are being set. We collect that information though logbooks and we can analyse that data. And that really is capacity.
... As we've discussed, the management plan is in its early stages. We have not yet decided what the nature of the statutory fishing rights will be.
DR CHRISTIE: The next element [of an ESD plan] looks at assigning priorities for scientific and economic research activities?---... - each managed fishery has what we call a fishery advisory group which takes all sorts of research into account in providing the board with advice on, if you like, changes to management arrangements that might be required on the basis of research that's undertaken. Each management advisory committee also has a research committee and that research committee prioritises research for the fishery. It then seeks expressions of interest from researchers to undertake research according to that list of priorities. ...(Tr. p. 372, line 31 to p.37375, line 5 refer)
100. In the opinion of the Tribunal and with respect, the remainder of Ms Lack evidence in this regard is a mixture of fact and opinion which makes no specific reference to actual research or results thereof in relation to the S/WTBF. The Tribunal is at pains to note that the Tribunal put these questions to the witness without notice. In the opinion of the Tribunal Ms Lack did her best to answer the questions honestly however, much of what was being asked of her was outside her particular area of expertise, it being of a scientific nature rather than environmental economics. For that reason she was unable to respond directly to the particular questions.
101. After parties had completed their submissions the Tribunal received for its consideration a further document tendered by the applicant's solicitor. The respondent did not object to the late tender of the document provided the document was neither annotated nor the subject of any submission. It was accepted on that basis. The document is titled: "AFMA Discussion Paper, July 2000 - Management Options for the Eastern Tuna and Southern and Western Tuna Billfish Fisheries". The document is qualified as being only a discussion paper and should not be relied upon as being a final statement of management arrangements for the Eastern Tuna and Billfish Fishery or the S/WTBF. It seeks discussion on management issues raised and it stresses that it is not a statement of AFMA's policy, either for the fisheries or for fisheries management generally. For reference purposes the document is marked for identification as D1. It canvasses five alternate means of fishery management: the status quo; hook pool method; boat day method; hook day method; and individual transferable quotas ("ITQ") method. The last method is an "output control" method whereas the other options are all "input control" methods, since the status quo refers to "the current management arrangements which control inputs limiting the number of vessels". (D1, p.4) Aspects of D1 appear to the Tribunal to be of relevance to these proceedings, in the sense that the development of a management plan for the S/WTBF is a central issue in relation to the respondent's policies concerning the issue of future FPs in those fisheries.
102. D1 commences with a discussion of the brief history of how the ETBF and the S/WTBF have been managed so far and the need to consider in parallel, future management options for the three fisheries. It proposes that the fisheries would be managed under similar arrangements although under separate Management Plans. (D1, p.2) It then submits that a management plan is specifically required under section 17 of the Fisheries Management Act 1991. Therefore, it is obliged to determine a management plan for all Commonwealth fisheries, and that such plans should provide "numerous benefits for commercial operators and other stakeholders from managing a fishery under a Statutory Management Plan". (D1, p.2) The perceived benefits for commercial operators, in particular, are then listed.
103. The discussion paper takes the view that "the best option for administering an output control management system is to grant SFRs (statutory fishing rights) as Individual Transferable Quotas ("ITQs"). The size of the TAC (total allowable catch) will determine the weight value of the SFR (in kilograms) for the period of the TAC". (D1, p.13)
104. The discussion paper states:
AFMA suggests that if an ITQ system is adopted that only the key target species, bigeye, broadbill, yellowfin and striped marlin (in the STB) come under quota. As the fisheries develop, byproduct species may or may not need to be added. (D1, p.13)
105. It then discusses the ITQ option under three headings - Ecologically Sustainable Development, Economic Efficiency and Cost Effective Management. In relation to the former it states, inter alia:
ITQs offer the most direct and effective means of responding to overfishing (the key sustainability issue) because catch limits (TACs) are placed on particular species. This is the main reason they have been adopted in over-exploited fisheries such as the SBT, southern shark, orange roughy and gemfish. However, ITQs also have broad applicability for providing access to under-utilised species.
...
The main issues that may impact on ESD under ITQs are discarding, the quality of data collected, catch monitoring and the TAC setting. These are the issues that determine whether the regime can directly promote sustainability. These issues are somewhat compounded by the multi-species nature of the ETBF and the S/WTBF.
... The most obvious benefit of implementing quotas in the tuna fisheries at this time is the fact that the fisheries are not over-exploited and quotas should not limit fishing production to an extent that forces discarding. (D1, p.14)
106. In relation to Economic Efficiency, the discussion paper states:
ITQs act as an incentive for efficient investment and therefore over-capitalisation is unlikely. Despite the fact that some operators will engage in wasteful practices like discarding and highgrading, ITQs present no real impediments for the fleet to maximise economic efficiency.
...
ITQs will not place limitations on fishing method (within acceptable options) and therefore provide scope for the development of different fishing strategies, such as has occurred in SBT through farming operations or other niche fishing operations such as low volume/high value fishing. (D1, pp.14-15)
107. Under the heading of Cost Effective Management, the discussion paper makes the following comment:
To the extent that ITQs may attract higher management costs, this must be weighed against the more important objectives of ESD and economic efficiency, particularly if the costs per operator are not significantly higher relative to other regimes. (D1, p.15)
108. The discussion paper then concludes that in the opinion of the respondent, on the basis of the analysis contained in the discussion paper, that "the ITQ option is the most cost effective management tool for the ETBF and the S/WTBF in terms of pursuing the Government's legislative objectives". (D1, p.15) The paper then lists seven key benefits that it has identified for managing the fisheries under ITQs. (D1, p.15) It concludes that the respondent believes that "hook days" is the most effective regime under the input control options, and invites written comment and submissions by 1 September 2000 (nearly two months after release of the paper).
Findings of fact
109. On the basis of the evidence the Tribunal summarises below its findings of fact. These are in addition to the findings of fact in relation to the applicants' table of detriment (Ex. A2c) already discussed.
110. The Tribunal finds as fact that Mr and Mrs Boschetti, (the corporate mind of the applicants), believed that when the applicants sold their 2 Class B and 535 Class A units in the NPF to the Commonwealth in 1989, that they would be granted, in future, a concession to fish for tuna in the S/WTBF. They believed at the time that that concession would be an unrestricted CFBL. This belief was founded in the correspondence exchanged between the parties and referred to in paragraphs 15 to 21 inclusively above.
111. The Tribunal finds as fact that the then manager of the Northern Prawn Fishery and Adjustment Program Section, Mr Meany, agreed that the first applicant, as a condition of selling it's Class B unit and its 383 Class A units, as part of the contract mentioned in the previous paragraph, was permitted "to retain the right to one unrestricted Commonwealth Fishing Boat Licence". The evidence of Mr Stewart suggests that this arrangement was unique insofar as the NPF Adjustment Program was concerned. None of Mr Meany, Mr Wesney or Mr Gorrie, officers of the respondent who were then involved in the purchase of the units in the NPF, were called to give evidence. At least one of those persons appeared to be still connected with the Commonwealth public service and the other two were living in Canberra (evidence of Mr Venslovas and Ms Lack). However, in a facsimile message to the applicants' solicitors from Mr Paul Ryan, the respondent's Manager Licensing and Entitlements, reference is made to contact in February 1996 with Mr Meany:
"I have spoken to Mr Meany and ascertained his understanding of the arrangements with Mr Boschetti at the time [a reference to the negotiations in 1988-89]. Mr Meany has indicated that it was not intended that any undertakings made in 1989 should override existing or future management arrangements. The undertakings were made in the light of the "freeze" on the issue of Commonwealth Fishing Boat Licences (CFBLs) announced by the then Minister for Primary Industry, Mr John Kerin, in July 1985. Under that "freeze" it would not have been possible to grant an additional CFBL to allow operation in the Western Tuna and Billfish Fishery, and the unrestricted CFBL referred to by Mr Meany could only have been generated by the "splitting" of the NPF Units under the Management Plan in place at the time from the CFBL allowing the operations of one of the Latitude Fisheries boats. Accordingly, the treatment of the CFBL as being held in abeyance from the date of the surrender of the NPF units is consistent with management arrangements in place at the time and the intent of the(sic) Mr Meany's letter."
112. Therefore, on the evidence as a whole and in particular, the actual words used in the letter to Mr Boschetti by Mr Meany (T4), the Tribunal concludes that the respondent intended that the applicants retain one of their CFBLs as a split from the NPF units and hold it as a "licence in abeyance" or some other reserved right. The evidence supports the finding of fact that at the time this arrangement by the then AFS was unusual if not unique. It is, however, also apparent from the evidence that the first applicant at the time did not have a CFBL, so in this sense Mr Meany's undertaking was meaningless. Notwithstanding that fact, which in the Tribunal's opinion was not realised at the time by any of the persons involved in the negotiations, (the Boschettis, Mr Stewart, Mr Meany, Mr Wesney or Mr Gorrie), there was a commonly shared intention to permit the first applicant to fish for tuna in the S/WTBF in future. The Tribunal finds that having sent its letter in reply of 16 January 1989 (T4), the respondent (or its predecessor the AFS) believed that it was under no obligation specifically to follow-up or to place a time limit on the undertaking (in T4). If, as has been concluded, the respondent understood that the promise was to keep an unrestricted CFBL which, at the time, would have been subject to the "abeyance policy" then there was no need to monitor that promise, since licences held in abeyance were held for a discrete duration (up to two years) before being reactivated by the holder or cancelled.
113. Notwithstanding the previous finding of fact, the Tribunal concludes on the evidence of the Boschettis and Mr Stewart that in June 1989, when the signed deed of discharge was conveyed to Mr Keating, manager of the Northern Prawn Fishery and Adjustment Scheme (T5), Mr Boschetti in particular, believed that the AFS had promised to issue him with an unrestricted CFBL to fish for tuna in the S/WTBF.
114. The Tribunal finds as fact that Mr Boschetti and to a lesser extent, Mrs Boschetti, were informed by various means, from 1985 through to 1995 and beyond, about the changing policies of the respondent (and its predecessor) in relation to the NPF "licence freeze", "licence in abeyance", "licence splitting" and also the "limited entry" policy particularly in relation to the S/WTBF. The Tribunal finds that they were on notice about the particular policy changes that impacted on licensees' rights to fish for tuna in the ETBF, the STBF and the WTBF. Further the Tribunal finds that Mr Boschetti was aware of the phasing-out of CFBLs after the introduction of the replacement legislation, the Fisheries Management Act 1991 and the new scheme of licensing with fishery specific FPs.
115. The Tribunal finds as fact that Mr Boschetti believed that as he did not have the license in question (not having applied for it) he was not affected by any of the relevant policy changes in relation to that expectation. However, the Tribunal also finds as fact that it is not reasonable for Mr Boschetti to have assumed, in 1995, that a "promise" made ancillary to a contract negotiated in 1988 and settled in 1989, would be unaffected by intervening changes, in both governing Commonwealth legislation and related policies, directed at the very substance of the "promise" as he understood it - the issue of a CFBL.
116. The Tribunal finds as fact that the sale of the 2 Class B and 535 Class A units in the NPF in 1989 was primarily motivated by what the Boschettis believed to be a sound management decision at the time. The purpose of the sale was to divest NPF concessions then considered surplus to requirements and realise some needed working capital. Their NPF fishing business was not then as successful as they would have hoped and was experiencing difficulties brought about by lower than expected catches and other adverse market influences.
117. The Tribunal also finds as fact that at that time Mr Boschetti (an experienced hands-on fisherman) had formed an opinion that tuna in the S/WTBF should be exploited by Australian fishermen and not left to the Japanese. He had carried out his own enquires which led him to this belief. He believed that there were then good prospects to develop that fishery profitably. He made plans to test the fishery by deploying slightly modified prawn fishing vessels during the NPF off-season, which he did at great cost but without much success. The Tribunal finds that the Boschettis' businesses, in the early 1990s, outlaid several hundred thousand dollars to prove the viability of those tuna fisheries in the Indian Ocean AFZ. It was on the basis of these results that the Boschettis commissioned a purpose-built tuna boat, Discovery III, to concentrate on developing the fisheries, although that vessel was also deployed in the NPF during season.
118. The Tribunal finds as fact that some time between about 1992 and 1995 Mr Boschetti made a conscious decision to invest large amounts of capital as and when it became available, to fish for tuna in the AFZ's S/WTBF. Also, those plans were never abandoned even though during the time other related fishing business exigencies were engaging the Boschettis' time, resources and attention so that their plan to exploit the S/WTBF was suspended, but never abandoned. The Tribunal accepts that it was primarily for those reasons that the Boschettis made no attempt to apply to the respondent until 1995, for what they then believed, justifiably or otherwise, to be their right to a tuna fishing concession in the S/WTBF.
119. The Tribunal finds as fact that insofar as the Boschettis understood that they had a right to either retain or to be issued with a CFBL in 1989, that because of the effluxion of time, material changes in the law (different legislation and different fishing rights) and policies of the respondent (formerly the AFS and now AFMA), that specific right (if it existed as a matter of law) did not survive those changes. That finding in the Tribunal's opinion, is not inconsistent with the previous finding of fact that they believed that they retained a right to a licence to fish for tuna in future; albeit that the right was incapable of being a CFBL. And further, the Tribunal finds as fact that the Boschettis' failure to follow-up with the respondent or its predecessor, to affirm the right, which they understood to exist, was a consequence of the circumstances of their businesses during the interregnum from 1989 to 1995. The obtaining of a new licence to fish for bigeye and yellowfin tuna and broadbill swordfish in the S/WTBF was not a priority during that time, given the then prevailing business exigencies. The Tribunal finds as fact that they merely rested on what they thought to be their rights (evidenced, as they understood by T3 and T4) however, as found above, in the Tribunal's opinion, that inaction was not prudent.
120. The Tribunal finds as fact that the Boschettis made discrete business decisions without regard to their then understanding that they had the right mentioned above. Specifically, the businesses purchased two tuna fishing concessions in the ETBF to allow them to fish for tuna in the S/WTBF (using the then existing swap technique). The Tribunal accepts Mr Boschetti's evidence that at no time did he regard the right to a tuna fishing concession as something that should be considered as an alternative to the purchase of one of the concessions. Mr Boschetti in particular, believed that the decision to purchase the concessions was a sound business practice at the time and consistent with his long term tuna fishing plans. The Tribunal finds as fact that the Boschettis are committed to tuna fishing and to developing an efficient and profitable tuna fishing business in the S/WTBF. They are first and foremost fishermen operating in the NPF and the S/WTBF. They are "in it for the long haul". Also, the Tribunal finds that the specific licences purchased are part of the plan to achieve this objective, as is the expectation to obtain a fresh concession as a result of what they believe to be their rights.
121. The Tribunal finds as fact that the existing limited entry policy of the respondent, coupled with its proposal to introduce a comprehensive Management Plan for the S/WTBF, in the interests of consistent decision making ordinarily would preclude the issue of any newly applied for FP.
122. The Tribunal finds as fact that there is very little scientific information before the Tribunal about the ESD of the S/WTBF.
123. The Tribunal finds as fact that there is sufficient knowledge to support the view that the tuna species in question are migratory and that they are exploited in both the Indian Ocean AFZ and the broader Indian Ocean.
124. The Tribunal finds as fact that the data available to the respondent about the tuna species in question . is the best available and is sourced from its own records compiled from FP logbook returns, CSIRO and from external IOTC information presented to the IOTC working parties and meetings attended by respondent's representatives.
125. The Tribunal finds as fact that the respondent does not believe that there is currently over-exploitation of Bigeye and Yellowfin tuna species within the S/WTBF (c/f D1, p.14).
126. The Tribunal finds as fact that the long-line method of taking the tuna species in question and proposed to be used by the applicants in the S/WTBF does not, of itself, pose a serious threat to the sustainability of the tuna species in question
127. The Tribunal finds as fact that the current input controls set in place by the respondent (limited entry and retention of the line at 34oS) provide a cautious and responsible approach to managing the S/WTBF in the interim before implementing its yet to be finalised Management Plan.
128. The Tribunal finds as fact that, in terms of known current levels of exploitation of the S/WTBF of the tuna species in question, and having regard to the input controls now in place (supra), that at present there are no "threats of serious or irreversible environmental damage". [NOTE - THIS SENTENCE IS SUBJECT TO A S35 CONFIDENTIALITY ORDER]
The Respondent's Submissions
129. Before setting out a precis of the respondent's submissions it is relevant to cite the Objectives of the Act as provided in section 3, the definition of the "precautionary principle" and the provisions of section 16 and subsection 17(10):
3 Objectives
(1) The following objectives must be pursued by the Minister in the administration of this Act and by AFMA 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.
4 Interpretation
(1) In this Act, unless the contrary intention appears:
...
precautionary principle has the same meaning as in clause 3.5.1 of the Intergovernmental Agreement on the Environment, a copy of which is set out in the Schedule to the National Environment Protection Council Act 1994.
National Environment Protection Council Act 1994.
Schedule
3.5.1 precautionary principle -
Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degredation.
In the application of the precautionary principle, public and private decisions should be guided by:
(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and
(ii) an assessment of the risk-weighted consequences of various options.
Section 16 of the Fisheries Management Act 1991 states:
16 AFMA to pursue objectives
(1) In performing its functions under this Part, AFMA must pursue its objectives and, in addition, act in accordance with its corporate plan and its current annual operational plan.
(2) Nothing in subsection (1) is taken to limit the operation of subsection 17(10).
17 Plans of management
...
(10) While a plan of management is in force for a fishery, AFMA must perform its functions, and exercise its powers, under this Act in relation to the fishery in accordance with the plan of management.
130. Mr Ritter submitted that the respondent (and therefore this Tribunal on review) is required by law to take into account the relevant objectives as set out in s3(1) above, which includes a requirement that the level of aggregate profits derived by operators in the S/WTBF are maximised and "maintainable in the long term from the resources of the fishery"; see Bannister Quest Pty Ltd v AFMA (1997) 77 FCR 503 at 515. He further submitted that since the decision in Bannister Quest, the Act was amended to introduce explicitly the need to approach fisheries management by having regard to the "precautionary principle". This involves identifying risks and then developing policies as appropriate, to avoid risks ensuring biological sustainability of fish stocks and preservation of the marine environment upon which fish stocks depend. These considerations, he submitted, are fundamental to the respondent's limited entry policy for the S/WTBF, a policy consistent with the objectives in s3(1)(b) and (c). In this regard, in particular, Mr Ritter referred to the IOTC Working Party report of September 1999 (R5 at para. 55) which cites a number of factors that indicate there may be problems with the status of stocks of Bigeye tuna "if the catches continue at the current high levels" and that " the stock is likely to become over-exploited in the very near future". He pointed out that the IOTC recommended a halt to increasing catches of Bigeye tuna and other restrictive measures in this regard. Exhibit R5, attachment E(ii) is a table of catches of key species from 1994 to 1999 in the S/WTBF, including those by the Japanese. It shows recorded catches in kilograms, for Bigeye tuna:
1994 1995 1996 1997 1998 1999
128,512 124,497 193,512 155,222 160,857 400,967
Mr Ritter submitted that this table evidences a trend for increases in the catch of Bigeye tuna, a matter of relevance to assessing risk under the precautionary principle. To this end, he submitted, the respondent at its meeting on 1 and 2 December 1999 (referred to in R5, paras 49 and 50 and Tr. 326-327) resolved, as a matter of urgency to develop a management plan for the S/WTBF, to retain the boundary line at 340S and, until that plan is in place, prohibit any further licence splitting which may result in increased fishing effort in the zone.
131. Mr Ritter submitted that neither the Minister (responsible for Primary Industries and therefore the Fisheries Act 1952) nor the Secretary to the Department (the AFS in this instance) had power to agree to grant a licence under that Act, except in respect of foreign fishing boats, a reference to s9B of that Act. He submitted that the absence of a power to do so in the legislation is significant. He cited Gummow J, in Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic (1990) 92 ALR 93, at 111, where his Honour quotes (with approval) from the judgment of Lord Greene MR in an unreported decision Minister for Agriculture & Fisheries v Hulkin: "the power given to an authority under a statute is limited to the four corners of the power given". Mr Ritter submitted that because the legislature saw fit to give a specific power to the Minister to agree to grant a licence in respect of a foreign fishing boat, then absent any specific power, neither the Minister nor the Secretary had a power to enter into an agreement to grant a licence pursuant to s9 of the 1952 Act. That section provided that "the Minister or Secretary may grant to a person a master fisherman's licence authorising the person to be in charge of a boat that is being used for fishing in proclaimed waters or in a specified area of proclaimed waters".
132. Mr Ritter referred to the evidence before the Tribunal about the various policy changes implemented by the Australian Fishing Service, the predecessor of the respondent prior to the establishment of the respondent (AFMA) under s.5 of the Fisheries Management Act 1991, in February 1992. In particular, he referred to the "freeze" on the grant of new CFBLs which came into effect in July 1985 (R4, paragraphs 6 & 7 and PEV 1 and 2) and the "licence in abeyance" policy which came into effect in 1987. That policy allowed CFBLs to be placed in "limbo" for up to two years. He submitted that as these were well understood policies in 1989 and in their light, that neither Mr nor Mrs Boschetti could have then anticipated that the AFS would issue the applicants with a new CFBL. The Tribunal takes this submission to imply that the Boschettis had in mind, when agreeing to sell the applicant's Class B and Class A units in the NPF, permission to keep an existing CFBL, which, he submitted is what the letter of 14 December 1988 (T3) asks for in its first paragraph.
133. Mr Ritter submitted that the respondent, since November 1994, pursuant to its obligations under s3 of the Act, [the objectives], had a policy generally to close the S/WTBF to new entrants. He submitted that this policy should be applied in the present case unless there are very cogent reasons for not applying it. And on the facts of this case, no such cogent reasons exist. Mr Ritter maintains that the November 1994 policy is founded on the s.3(1)(b) and s.3(2) objectives in particular. He submitted that this policy, which was well publicised, is consistent with responsible management of the fisheries and is a legitimate management tool as is the maintenance of the line at latitude 340S.
134. Mr Ritter submitted further, in relation to Mr Meany's letter of 16 January 1989 (T4), that it was a notice of a decision to allow retention of one unrestricted CFBL. It makes no mention of "issue". It was a reference to maintaining or keeping or continuing an existing entitlement and nothing more. He submitted that the letter cannot be construed in any other way - there is no intention to create a contract for the issue of a new CFBL. He submitted that the letter cannot be construed as binding, 10 years later, on a statutory authority not in existence at the time when the letter was written and notwithstanding any intervening changes in the law and policies.
135. Mr Ritter further submitted that the Northern Prawn Fishery Management Plan did not extend to the Minister power to agree to issue in future a current fishing licence as part of any agreement reached under Part 8 (The Voluntary Adjustment Scheme) of that Plan. He cited paragraphs 27.1 and 27.3 in support. These state:
27.1 The Minister may, from time to time, invite tenders for the surrender of units.
27.3 The Minister may treat directly with the holder of Class A units who, at any time other than a time when an invitation is open pursuant to paragraph 27.1, by letter addressed to the Department signed by the unit holder in the presence of a witness whose name and address shall be stated, make an offer to surrender.
He submitted that paragraph 27.1 merely entitles the Minister to treat directly and beyond the time specified in paragraph 27.2 for the surrender Class A NPF units. This, he said, cannot be construed as empowering the Minister to enter into an agreement, firstly, to grant a licences when there is no other power in the Act to do so; and secondly, to fetter the exercise of a statutory discretion in the immediate future, or indeed, some 10 years hence. He submitted that there was neither authorisation for the so called contract and in any event such a contract would be incompatible with the exercise of the statutory duty. He cites in support Mason J in Ansett v Commonwealth at 17 ALR p.531:
"The decisions to which I have referred are all cases in which the contract or undertaking held to be invalid was one to which the repository of the power or discretion was a party. The contract or undertaking was therefore an anticipatory fetter by that person on his future exercise of the statutory power or discretion. At the same time, because the contract or undertaking was not one authorized by the relevant legislation, or was incompatible with it, the contract or undertaking was invalid or ultra vires."
136. Mr Ritter summarised his arguments in relation to his contention the there could not now be issued a new FP in consequence of any undertaking or otherwise which is reflected in the correspondence in evidence (T3, T4, T5, T8):
Firstly, there was no power under the Fisheries Act 1952 to enter into a contract to grant a CFBL to an Australian boat and therefore any contract would have been ultra vires.
Secondly, the issue of a new CFBL would not have been possible because it was contrary to the ministerial direction under s6 of the Fisheries Act 1952. He said that that power refers to ministerial directions and to that extent it binds the Secretary or his delegate in the performance of his/her functions under the Act. This is a direct reference to the ministerial direction referred to in paragraph 6 of Mr Venslovas' witness statement (R4 and PEV 1). That was a direction, dated 31 July 1985, that no future licence will be granted to an Australian boat, under s.9 of the Fisheries Act 1952, not otherwise eligible to be granted a licence under existing limited entry management arrangements in force after 21 July 1984. It is further submitted in this respect that the exception in paragraph 1(c) of the direction does not apply to the applicants. This obtains, it is submitted, because they did not provide the written evidence which that exception requires (see recital) to support any contention that the boat was to be used exclusively in the developing S/WTBF. Further, it was submitted that there is no written evidence that those fisheries were, in 1989, developing. So, in sum, even if there was a contractual arrangement, it could be of no binding effect.
Thirdly, the contract in any event would not be binding as a matter of public policy because neither a Minister nor a statutory authority could hamstring the future exercise of a discretion by entering into contracts absent a specific statutory authority to do so. He submits that the very fact that there have been changes to policy, legislation and relevant knowledge in the intervening years since 1989 are the reasons why the capacity to grant fishing permits should be unfettered by these types of previous contractual arrangements. He cites Mason J in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth of Australia (1977) 17 ALR 513, at 530:
"Yet on the other hand the public interest requires that neither the government nor a public authority can by a contract disable itself or its officer from performing a statutory duty or from exercising a discretionary power conferred by or under a statute by binding itself or its officer not to perform the duty or to exercise the discretion in a particular way in the future."
137. Mr Ritter further submitted that the evidence shows that the respondent's policies of limited entry into the S/WTBF and the demarcation line at latitude 34oS are evidence of a management policy reflecting the principles of ESD. It is these policies which the respondent must consider in relation to any application for a FP in the respective zone. To require the respondent to ignore those policies in exercising a discretion under s32 of the FM Act would be to fetter the respondent in a way which was contrary to the public interest.
138. It was submitted that in this case no alleged commitment made in 1989 could operate to hamstring the respondent in carrying out its task 10 years later without regard to its current objectives and policy changes in the interim. It was further submitted that there can be no estoppel in this instance, where there is a statutory discretion vested in the Minister, citing in support McHugh J in the High Court judgment in Haoucher v Minister for Immigration (1990) 93 ALR 51, at 72:
"In cases which do not involve the exercise of statutory discretions or duties, a Minister of the Crown may be estopped from denying a fact or promise. But just as a Minister cannot bind himself or herself by contract to exercise a discretion in a particular way (Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1997) 139 CLR 54 at 74-6; 17 ALR 513), so a Minister invested with a statutory discretion cannot impair the exercise of the discretion by a representation that he or she will or will not exercise the discretion in a particular way or at a particular time: Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416 at 424; Brickworks Ltd v Warringah Corporation (1963) 108 CLR 568 at 577; Rootkin v Kent County Council [1981] 1 WLR 1186 at 1195-6; [1981] 2 All ER 227 at 233-4."
139. Mr Ritter acknowledged that the citation above as it reflects the decision in the Ansett Transport Industries case was a reference to the dissenting judgment of Mason J. However, he argued that although this was from a dissenting judgment, nothing in the majority judgment of Barwick CJ, Gibbs and Aickin JJ suggests that Mason J was wrong on this point. He said that the distinction of the majority was that the particular (Two Airlines) agreement in question was supported by legislation. He submitted that in this case, there being no statutory support for a binding agreement on a future administration in a particular way that therefore, what is cited above by his Honour McHugh J is sufficient. In addition Mr Ritter cited in support the decision in Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic 91990) 92 CLR 93 at 111:
"... in the case of a discretion, there is a duty under the statute to exercise a free hand and unhindered discretion and an estoppel cannot be raised (any more than a contract might be relied on) to prevent or hinder the exercise of the discretion ..."
140. Mr Ritter further submitted that the discretion granted to the respondent under s32 of the FM Act, to grant a FP, is subject to policy and therefore not simply an operational matter. In this respect, he submitted, it is not circumscribed by any estoppel, citing in support Gummow J at 116 in Kurtovic where his Honour suggested that decisions which are the object of statutory discretion are at the policy level.
141. Mr Ritter submitted that even if there was a contract in January 1989, which is denied, it has been frustrated by:
* the establishment of a new statutory authority (the respondent);
* the S/WTBF becoming a limited entry fishery at the end of 1994;
* that CFBLs were no longer granted under the 1991 Fisheries Management Act, even though in some cases they were renewed till February 1995 specifically to area, species and method; (a reference to Mr Venslovas' evidence); and
* that FPs are quite different to CFBLs as the former are area, species and method specific whereas the latter were not (except in the case of renewal between 3 February 1992 and 2 February 1995 as mentioned above).
Mr Ritter supported this contention, that the contract (if any) was frustrated by the turn of events since January 1989, because, if performed, it would result in a radically different outcome to that which was originally agreed. In this respect he referred the Tribunal to Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 360. At 376-377, Aickin J makes the following observations:
"The doctrine [of frustration] is now generally expressed as depending on changes in the significance of the obligations undertaken and the surrounding circumstances in which the contract was made. This development was explained by the House of Lords in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696:
'Lord Loreburn ascribes the dissolution to an implied term of the contract that was actually made. This approach is in line with the tendency of English courts to refer all the consequences of a contract to the will of those who made it. But there is something of a logical difficulty in seeing how the parties could even impliedly have provided for something which ex hypothesi they neither expected nor foresaw; ... So perhaps it would be simpler to say at the outset that frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do. ... But, even so, it is not hardship or inconvenience or material loss itself which calls the principle of frustration into play. There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for.'"
142. Mr Ritter said that because the applicants had received full commercial value as result of selling the NPF Class B and Class A units in 1989 they had not suffered any detriment. That and other reasons already expressed, including the 1994 limited entry policy into the S/WTBF, are sufficient cogent reasons not to grant the FP sought by the applicant. He said that even if the applicants may have had a unique position in 1989 that has been washed over and eroded to nothing as a result of intervening events. Those events are the changes to the law, policy, the passage of time, the fact that the applicant did nothing for many years to enforce whatever rights they thought they had, and this despite the announced changes in policy which had a direct bearing on fishing permits and the S/WTBF in particular.
143. Mr Ritter further submitted that the evidence shows that the applicants have not been frustrated in fulfilling what was their stated objective in 1989, to fishing for Bigeye and Yellowfin tuna. They have since, in 1994, secured tuna fishing licences to allow them to operate in the S/WTBF and they have since had constructed a purpose-built fishing vessel for that purpose, the Discovery III (albeit nominated by Mr and Mrs Boschetti). The fact that they have not been issued with an additional specific FP to fish that zone for those tuna has not hampered their business endeavours to date. And their current fishing activities, it was submitted, resulted after the applicants had carried out their 1989 stated intention of exploring the zone, initially using their NPF boats. Further, it was submitted, the applicants and the Boschettis have currently between them three inactive tuna fishing licences for the S/WTBF and do not now have under construction any new boat to activate any of those FP. These facts, it was submitted add weight to any other cogent reasons for not deviating from the current limited entry policy in the fisheries in question.
144. Mr Ritter submitted that the respondent (and therefore the Tribunal on review) is required to take account of the interests of other participants in the fishery, that is, holders of FPs in the S/WTBF, none of whom is represented in these proceedings. He submitted that to now issue a new FP to the respondents would raise serious issues of fairness and should be averted without hearing from those affected: R V Liverpool Corporation; ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299 at 308. In this respect Mr Ritter referred to the evidence of Mr Boschetti concerning his submission to this Tribunal to be joined in the other matter relating to the decision of the respondent not to remove the boundary line at 340S, (supra).
The Applicants' Submissions
145. In deciding whether the applicants had a contractual right to be issued with a FP to fish for the three mentioned species in the S/WTBF, Mr Buss urged the Tribunal to have regard, not just to the relevant correspondence, but also to the evidence of Messrs Stewart and Boschetti in relation to the surrounding circumstances which gave rise to that exchange of letters. He submitted that the evidence is clear, that both Mr Stewart and Mr Boschetti understood that the units in the NPF would not have been sold in the absence of a condition requiring a future right to fish for tuna (except Southern Bluefin) in those fisheries. He submitted that because of the then well understood "freeze" on licence splitting that it is unreasonable to assume that the applicants would have understood the promise to be that of enabling a split-out of a currently held CFBL, a matter which he submitted, Mr Stewart had discussed with Commonwealth officers. He submitted that the only reasonable conclusion is that to satisfy the condition, a new fishing concession would have needed to be issued. And this he submits was the clear understanding of Mr Boschetti at the time, that it was plainly contemplated that there would be a right to an unrestricted CFBL. He submitted, in this respect, that Mr Stewart held over the already signed deeds of discharge given to him by the Boschettis in January 1989 pending confirmation of the undertaking to be issued with a new CFBL. That he submits, was achieved and is clearly the intent of Mr Stewart's letter to Mr Keating in June 1989 (T5) when the deeds were handed over.
146. Mr Buss submitted that the applicants relied to their detriment upon the undertaking. He submitted that the Table of Detriment (Ex. A2c) quantifies this substantial cost. This submission is based on the evidence that the applicants would not have surrendered the NPF units without the undertaking as they had then a range of opportunities available if they had retained those units.
147. Mr Buss submitted that the Tribunal should not take into consideration the fact that the applicants (and the Boschettis) acquired, in 1994, additional FPs to fish for tuna in the S/WTBF. He submitted that the evidence is that this purchase was, at the time, a sensible business decision consistent with the stated objectives of the Boschettis and the applicants, which, to a degree, relied upon the undertaking by the AFS in January 1989.
148. Mr Buss submitted that for the respondent to now grant a FP to the (first) applicant would not have any material adverse effect on the respondent's policies or upon the S/WTBF. He submitted that there is not at present a plan of management for the S/WTBF pursuant to s17 of the FM Act 1991 and the fisheries are regulated by the limited entry policy and the line at S340. He submitted that because of the uniqueness of this application that to now issue a FP pursuant to the promise would have no precedential value. He further submitted that the precautionary principle has no relevance or at most an insignificant relevance. This obtains, he submitted, because there is no evidence of threats of serious or irreversible environmental damage in the S/WTBF. He submitted that the latent effort in the fisheries has existed for many years and has not affected the respondent's policies, at least till December 1999, of encouraging development in the fisheries.
149. Mr Buss submitted that the Tribunal should have no regard to the present circumstances of the applicants, except to acknowledge that they are "in the fishing industry for the long haul". That, he submitted, supports (the applicants') clearly stated intention of fishing in the S/WTBF given the FP which is the subject of this application.
150. Mr Buss submitted that for the respondent to now grant a FP to the (first) applicant would not materially affect the interests of other FP holders in the S/WTBF. He said that to do so would not create a situation where every other FP holder needed to be heard: see Gardner v Dairy Industry Authority of New South Wales [1977] 1 NSWLR 505 at 518-9, and R v Liverpool Corporation, ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299 at 308-9. He based this conclusion on the contention that in the present case there are unique circumstances and also the ample evidence of latent effort in the fisheries. He further submitted in this regard that currently the Indian Ocean yields some 1,200,000 tonnes of tuna and billfish annually. The applicants' evidence is that they would hope to yield up to 200 tonnes in total of all three species if granted the FP, that is, 0.0167% of the total estimated annual Indian Ocean catch.
151. Mr Buss submitted that the evidence (particularly Ex. A8) supports the conclusion that the respondent, at least until December 1999, encouraged the development of the S/WTBF. This he submitted, is a critical matter when taken in the context of the Tribunal's present task, to review the respondent's decision of 7 January 1999 not to grant the applied for FP (T20). Mr Buss supported this contention by reliance on the Federal Court decision (Davies J) in Freeman v Secretary, Department of Social Security (1988) 87 ALR 506. As the Tribunal understands this submission, it is that an application for the grant of a FP is analogous to an application for the grant of a social security pension. In that context it is only the conditions prevailing at the time of the original decision which is under review that should be considered by the decision maker. The submission, as understood, is that in those circumstances the decision maker cannot have regard to subsequent disqualifying events to disentitle an applicant for a pension when all the preconditions at the time of application are met. The difficulty which the Tribunal has with that submission is that in Freeman, the Federal Court was dealing with the cancellation of a widow's pension on the grounds that the applicant no longer qualified as a "widow" since she was, at the time of cancellation, living as a "wife in a bona fide domestic relationship although not legally married". The court upheld the decision under review notwithstanding evidence that subsequently, but before the primary merits review of the decision by the Administrative Appeals Tribunal, the applicant had ceased that disqualifying relationship and qualified as a "widow". In Freeman, his Honour said:
"In Jebb's case, I approved the general approach of the Administrative Appeals Tribunal '... to regard the administrative decision-making process as a continuum and to look upon the tribunal's function as a part of the continuum so that, within the limits of the reconsideration of the decision under review, the tribunal considers the applicant's entitlement from the date of application or other proper commencing date to the date of the tribunal's decision'.
However, the present appeal extends that principle beyond its scope. It does not follow from that principle that the tribunal in the present case was obliged to make a finding as to Mrs Freeman's entitlement to a widow's pension as at the date of the tribunal's decision or to make a decision as to cancellation of a pension on 19 May 1987 by reference to the facts as they stood as at the date of the tribunal's decision.
...
Regard must always be had to the nature of the decision which is under review. In Re Tiknaz, Re Easton, Jebb's case and McGourty's case, the decision under review was a decision refusing to grant a pension or benefit that had been applied for. In each case, it was held that there was jurisdiction to consider entitlement not only as from the date of the application but also entitlement up to the date of the tribunal's decision. This was because the function of the Administrative Appeals Tribunal formed part of an administrative continuum and, in reviewing a refusal to grant a pension or benefit that had been applied for, it was proper for the tribunal to consider the entitlement to the pension not only as at the date of the application for the pension or benefit or at the date of the decision refusing to grant it but also up to the time of the tribunal's decision." (pp.508-509)
152. In the present case the Tribunal is dealing with an application for a FP pursuant to s32 of the FM Act 1991. In that respect, the Tribunal is part of the continuum of administrative decision making as Davies J put it in Freeman. To adopt the approach put to us by Mr Buss could well disadvantage as much as advantage different applicants in different circumstances - for example, the original decision may have been plainly correct at the time and if circumstances have changed since such that the reverse may now apply the cure is to make a fresh application. And another example - if the tribunal was to grant a permit when one was incorrectly denied by the original decision maker but in the interim, policies had eventuated which rendered that permit otiose, it would be an exercise in futility to grant the permit on the basis of previously prevailing conditions. In the present case of course, intervening policies, since January 1999 when the original decision was made, would not, in the Tribunal's opinion, render a subsequently granted FP otiose. However, to now grant the application would clearly be contrary to the presently prevailing policies of the respondent. In the context of reaching the preferable or correct decision in this matter, on the basis of Freeman and other cases cited, that factor is one of the relevant considerations to which the Tribunal, as part of the administrative continuum, must give proper weight in reaching its decision.
153. Mr Buss submitted that the power of the predecessor to the respondent, the AFS, to enter into an agreement to issue a fishing concession in future is not circumscribed by the provisions of s9B of the Fisheries Act 1952. He submitted that one cannot imply from s9B of the Fisheries Act 1952 that absent a similar provision relating to Australian boats, any such agreement would be ultra vires. Mr Buss canvassed the history of the 1981 amendments giving rise to s9B which granted the Minister, on behalf of the Commonwealth, power to enter into an agreement to grant a licence in respect of a foreign fishing boat. He explained that the amendment was introduced as part of a package to allow the Commonwealth to charge significantly higher fees to foreign fishing boats than to Australian boats. He explained that complementary amendments and Bills were necessary to comply with s55 of the Constitution which provides that laws imposing taxation (and presumably fishing licence fees) shall deal only with one subject of taxation. He submitted that s35 of the FM Act 1991 is consistent with those provisions.
154. Notwithstanding those submissions the Tribunal's powers in relation to reviewing decisions of the respondent not to grant a FP must be circumscribed by s32 of the FM Act 1991. That section provides for the grant of a FP subject to the conditions set out in subsection (5). Those are concurrent conditions and not prospective and indeed provide for the permit to cease to have effect or be cancelled given specified circumstances as provided in subparagraphs (5)(b), (c) and (d). Subsection (6) provides that a FP shall come into force on a day specified or if none then on the day it is granted. That provision is consistent with the scheme of the FM Act 1991, that the grant of a FP is a consequence of an application (made in the approved form) pursuant to the Regulations, as specified in s168(1) of the FM Act 1991. In the Tribunal's opinion the respondent may only grant FPs pursuant to s32. There is nothing in the FM Act 1991 or its regulations which empowers the respondent (and therefore the Tribunal) to grant a FP on the basis alone of a promise or agreement entered into at an earlier time than the date of the relevant application. In the opinion of the Tribunal, the decision to grant a FP pursuant to s32 is discretionary and must be made having regard to relevant policies authorised by s32 of the FM Act 1991.
155. Mr Buss submitted that the Commonwealth may contract upon any topic, regardless of whether the same result could have been achieved by legislation: see Hogg PW, Liability of the Crown, second edition, The Law Book Co, 1989 at p.166 which states:
The Crown's common law power to enter into contracts could, of course, be restricted by the terms of the Constitution. However, the Constitution of Canada does not change the general rule that the Crown in right of each government possesses the contractual power of a natural person. In particular, the Crown's power to contract is not restricted by the same limits as apply to the exercise of legislative power. A contract creates rights and obligations by virtue of the voluntary agreement of the parties. It does not unilaterally impose rights and obligations as a statute does. There is therefore no reason to confine the power to contract within the limits of the power to legislate, and the courts have not done so. The government of Canada, or the government of a province, may enter into contracts for purposes that it could not accomplish by legislation. The position in Australia is probably the same as in Canada, that is, the Commonwealth government or the government of a state may contract upon any topic, regardless of whether it could have accomplished the same result by legislation. In every jurisdiction, there are statutory provisions respecting procurement and other government contracts and it is a matter of interpretation whether any of them actually limit the power of the Crown to enter into contracts. .
156. Mr Buss submitted that the common law power of the Commonwealth to contract in the manner contemplated in this case is only circumscribed if restricted by statute, which, he submitted, is not the case in these proceedings.
157. Mr Buss submitted that the Voluntary Adjustment Scheme for the NPF was a commercial initiative of the Commonwealth in conformity with the then policies of the AFS. The Commonwealth empowered its agent with the responsibility of implementing the scheme and in doing so enter binding contracts to achieve that objective, which happened in this case. Mr Buss submitted that the agreement to issue a fishing concession of the type discussed, at the time of concluding the agreement pursuant to that scheme is consistent with it and within the commercial contracting powers of the Commonwealth. He submitted that in doing so the Minister or respondent is not precluding or fettering itself from exercising its statutory discretionary powers or from performing public duties by entering into incompatible contractual or other undertakings. He submitted that the promise is consistent with the objectives of the power and compatible with the power of the respondent to grant fishing permits. He submitted that to now issue a FP is not against the public interest and is compatible with notions of fairness and enhancing public confidence in government contracts and dealings. In this respect he cited the High Court decision in Ansett Transport Industries (supra), relying on the dissenting judgment of Mason J previously referred to in these reasons.
158. Mr Buss submitted that the agreement in question, entered into by the former AFS has not been frustrated as a result of the establishment of the respondent pursuant to the Fisheries Administration Act 1991. He submitted that the respondent is an agent of the Commonwealth and commenced acting in that capacity when the AFS terminated. It was not, he submitted, the termination of the contract (the agreement) but merely the emergence of a substitute party whose identity is the same - the Commonwealth.
159. Mr Buss submitted that the respondent is estopped from denying that it is obliged, under the representations, to issue the (first) applicant with a FP. The representation, he submitted, was promissory in character and related to operational as distinct from policy matters. In the alternative, he submitted that the respondent is estopped from denying its obligation to issue the FP as to do so would occasion greater harm to the public interest than any detriment to the public interest arising from the narrowing of the exercise of the respondent's discretion: Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 18 and 20. In further support of this submission Mr Buss referred to the following statement by Lord Denning in R v Liverpool Corporation, ex parte Taxi Fleet Owners [1972] QB 299 at 308:
"But that principle does not mean that a corporation can give an undertaking and break it as they please. So long as the performance of the undertaking is compatible with their public duty, they must honour it. And I should have thought that this undertaking was so compatible. At any rate they ought not to depart from it except after the most serious consideration and hearing what the other party has to say: and then only if they are satisfied that the overriding public interest requires it. The public interest may be better served by honouring their undertaking than by breaking it. This is such a case. It is better to hold the corporation to their undertaking than to allow them to break it. Just as it was (cites two cases in support)."
Conclusion
160. This matter has come to the Tribunal pursuant to s165(7) of the FM Act 1991, for review of the decision of a delegate of the respondent, pursuant to s165 of that Act, not to grant a FP to the (first) applicant. In the Tribunal's opinion, but for the promise referred to above and encapsulated in the evidence generally and in particular at T3 and T4, no FP to catch the three species in question in the S/WTBF, would be granted. This obtains because of the respondent's then policy of limited entry to those fisheries, policies forming part of the decision-making matrix established by sections 32 and 3 of the FM Act 1991.
161. Therefore, the question before the Tribunal is whether the preferred or correct decision is now to grant the FP. In the opinion of the Tribunal that decision cannot be made, in keeping with the duties and responsibilities of the respondent (as provided by legislation) without due regard to the following factors:
* The rights of the applicants, if any, stemming from the promise.
* Whether those rights include a right to be granted a FP.
* Whether the respondent is estopped from denying its obligation (if any) to grant the FP.
* Whether the applicants have a legitimate expectation that the (first) applicant has a right to be granted a FP.
* Whether the grant of a FP now, to the (first) applicant would be contrary to the public interest or affect the rights of others not party to this application.
162. These matters will now be dealt with, by reference to the evidence, the findings of fact (supra) and the submissions of parties.
The rights of the applicants, if any, stemming from the promise.
163. The Tribunal has found, as fact, that there was an agreement between the first applicant and the AFS, the predecessor to the respondent, that that applicant be permitted to retain the right to one unrestricted CFBL. That agreement was negotiated over a period, between late 1988 and 30 June 1989. The agreement was a unique arrangement at the time. At the time there was in place a "freeze" on the granting of new CFBLs, which restriction embraced the S/WTBF and other fisheries. At that time "licence splitting" was still possible. At the time CFBLs could be held "in abeyance" but only for up to two years whereupon they would be reactivated by consent of the AFS or otherwise be cancelled.
164. In the Tribunal's opinion the promise or agreement at the time was intended by the AFS to be limited to the retention of an unrestricted CFBL which might be subject to the abeyance policy if not then otherwise active. In the opinion of the Tribunal the evidence supports the conclusion that it was intended by the AFS that once the NPF units were sold any remaining CFBL (which was required for operations in the NPF at the time) would go into abeyance and be subject to that policy. It was further intended by the respondent that the first applicant or possibly the second could activate that CFBL to fish for tuna in the S/WTBF, but subject to the then "licence in abeyance" policy.
165. Those, in the opinion of the Tribunal, were the inherent rights of the applicants arising from the promise or agreement and the contractual obligations of the AFS. These obligations of the AFS were compatible with the then policies of the AFS and also not contrary to the then powers of the AFS as evidenced by its then licence freeze and licence in abeyance policies.
Whether those rights include a right to be granted a FP
166. In the opinion of the Tribunal it is not an issue as to whether pursuant to the promise discussed above a CFBL or a substitute concession is retained and activated. FP granted pursuant to s32 of the FM Act 1991 are granted subject to conditions. That section provides sufficient proscribed discretion to the respondent to ensure that any FP granted conforms with policies at the time including any management plan pursuant to s17 of that Act. So, other concerns aside, it matters not whether a CFBL could have been granted if the grant of a FP achieved the same intent. However, CFBLs continued to be renewed until 1995 for various reasons discussed. That is well beyond the licence in abeyance period that might reasonably have applied to the applicants in relation to any rights established under the agreement as discussed. In the opinion of the Tribunal the applicants' rights did not extend, in the circumstances, to the grant of a FP on the basis of the promise or agreement alone. If the applicants are to succeed in this matter then it must be for other reasons.
Whether the respondent is estopped from denying its obligation (if any) to grant the FP and whether the applicants had a legitimate expectation that a FP ought to be granted upon application
167. The applicants have relied on an ameliorating principle, that of estoppel to support their submission that the respondent cannot now resile from granting a FP. They submitted that the conduct of the respondent (and its predecessor, the AFS) since the promise or agreement gives rise to an estoppel. The applicants submitted that at no time did the respondent advise them that the promise would not be honoured. The Tribunal understands that complementary to this submission is the submission that the applicants had a legitimate expectation to be granted a CFBL, and therefore, a FP. This legitimate expectation arose from the promise, a promise never resiled from by the respondents notwithstanding a change of agency, new policies and new legislation.
168. However, the respondent says that the applicants cannot, as a matter of fact in this case, or as a matter of law, rely on the respondent's failure to communicate its reservations about the applicants' rights arising from the agreement. It says that the applicants were put on notice of all the critical intervening events, including the enactment of the FM Act 1991 and its consequences for fishing concessions, the licence freeze in the S/WTBF and the policy stopping licence splitting. The evidence before the Tribunal supports this contention. In Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 208 Gummow J relevantly said:
"As a starting point, I should note that the present case is not one where a party asserts that the executive or other public authority is estopped from asserting that a particular action, of which the other party seeks performance, would be ultra vires as exceeding the powers given by or pursuant to a law of the Parliament. Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying."
169. In Re: Secretary, Department of Social Security and Plug, AAT Case W1998/404, August 2000, the Tribunal, presided over by the President, said:
"The courts consider that powers and obligations given to the executive under statute is limited to the extent of the power given. To decide otherwise would allow an extension of power and responsibility by the action of those whose duty it is to exercise the power. The general principles of estoppel must be, in public law, limited by the ultra vires doctrine (see Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98 at 105-7 per Davies and Branson JJ) and if the effect of creating an estoppel would contradict a statute and extend the duty and authority of a decision maker it will not operate.
170. In this case the applicants argue that the respondent is now prevented by the doctrine of estoppel from relying on an argument that legislative and policy changes in the interim prevent the grant of the FP pursuant to that promise. This, they argue, obtains because the respondent made a previous commitment in circumstances where that was the result of protracted negotiations at the time and crucial to the actual commercial agreement then reached. However, if only for the effluxion of time, some ten years since the promise, the Tribunal cannot accept that argument because its effect would be to grant a FP contrary to policy existing at this time and therefore ultra vires the statute. Further reasons are that to adopt the doctrine of estoppel in favour of the applicants would require action by the respondent beyond its powers as circumscribed by the FM Act 1991 and the matrix of the policies pursuant to that Act.
171. In the opinion of the Tribunal the applicants did not have, in 1999 at least, a legitimate expectation to be issued with (or granted) a FP. Whist the applicants may have had a legitimate expectation to retain an unrestricted CFBL in 1989, pursuant to the licence in abeyance policy, that expectation did not survive (see findings of fact (supra)). It is well established that Commonwealth decision-makers must make decisions consistent with legitimate expectations unless the person adversely affected has been given adequate notice of reasons for not proceeding in that way: (see Minister of State for Immigration & Ethnic Affairs v Teoh (1995) 183 CLR 273 at 291-292, Mason CJ and Deane J). The Tribunal has found as fact that the applicants through their "corporate minds" the Boschettis, especially that of Mr Boschetti, had a reasonable if not legitimate expectation that the applicants were entitled to be granted a fishing concession in the future to fish in the S/WTBF for tuna, except Southern Bluefin. However, for reasons expressed above and based on the evidence and findings of fact, in the Tribunal's opinion, that expectation ceased to have legitimacy well before the first applicant made its application pursuant to s32 of the FM Act 1991 which gave rise to these proceedings.
172. The Tribunal is also influenced by its previous finding of fact in relation to the alleged detriment suffered by the applicants as a result of entering into the agreement in question. In the opinion of the Tribunal even if there was a detriment suffered, for the reasons already expressed, it could not be as a result of having sold the NPF units. Any alleged detriment, in the Tribunal's opinion, is not something to which it should have regard in reaching its decision in this matter.
Whether the grant of a FP now, to the (first) applicant would be contrary to the public interest or affect the rights of others not party to this application
173. In the opinion of the Tribunal, if this application was confined to different facts, that is, the promise had been made more recently in the light of present policy and notwithstanding that the promise in question was counter to existing policy, then, in those circumstances the Tribunal would have considerable sympathy with the application. For, in the opinion of the Tribunal, it would undermine public confidence in government if it resiled from honouring any such unambiguous promise. The only other consideration would be to take account of the possible undermining of the public interest should government be seen to grant a favour not otherwise available to the public at large. But that would necessarily be weighed against the circumstances giving rise to the promise. Given a background of independent, reasonable and honest dealings the Tribunal would clearly be confronted with a dilemma. However, in the present case, where in the opinion of the Tribunal all relevant dealings were independent, reasonable and honest, the Tribunal is of the opinion that no such dilemma exists. In the opinion of the Tribunal there is no legal obligation for the respondent to grant the FP sought. To do so would be contrary to existing policy and indeed contrary to policy in place since 1994 when the licence freeze in the S/WTBF commenced. At best there may be a case for a moral obligation to grant the FP, but that, in the Tribunal's opinion is not something on which it can decide in the absence of compelling other supporting reasons.
174. On the other hand, in the opinion of the Tribunal, the evidence before it does not support a conclusion that to grant one further FP as sought would offend against the "precautionary principle" since there is not before the Tribunal sufficient scientific evidence of a serious threat to ecological sustainability of the three species in question using the long-line method as proposed by the applicants. The evidence is that there is significant "latent effort" in both the STBF and the WTBF. The evidence is that the respondent is not concerned that that latent effort is likely to be activated before it brings down its management plan pursuant to s17 of the FM Act 1991, a plan likely to eventuate in 2001. The evidence is that the respondent is satisfied on the information available to it, that its present management measures of limited entry, restriction on by-catch and the demarcation line at S340 are effective and that there is no present ESD risk in the S/WTBF from long-line fishing.
175. The Tribunal heard little evidence as to whether the interests of other fishing operators would be affected should the applicants be granted a FP. That class of person would include those currently operating in the S/WTBF, those with latent effort FP for those fisheries and those who might otherwise apply for a FP if these were unrestricted in number. The Tribunal heard evidence that currently a FP in those fisheries has a market value from $400,000 with access only to the STBF, to around $600,000 or thereabouts for access to both S/WTBF. So clearly, there is a demand and supply situation supporting that value. In any economically determined commercial market, such as for FPs, any increase in supply will affect the price. But there is no evidence as to how the market value would be affected by the grant of one additional permit. The Tribunal heard evidence that currently there are 51 long-line permits with access to the WTBF and 83 long-line permits with access to the STBF. Of those, 44 are confined to the STBF. So whilst it is likely that the grant of a further FP with access to both would impact adversely on the existing market value (ceteris parabis), the Tribunal is not able to draw any conclusion other than that. The measure of the adverse effect on current FP licence holders of a fresh FP cannot be meaningfully quantified on the evidence before the Tribunal.
176. On balance, the Tribunal concludes that to now grant the FP, the subject of this application would not have any significant effect on the interests of other FP holders generally, other interested persons (who have not been identified) or the public generally. Because of the uniqueness of the surrounding circumstances of this application which has led to this review, it is reasonable to conclude that no precedent would be set by granting such a FP. Notwithstanding, after having heard the evidence and submissions and having given them the most serious consideration (see Lord Denning in Liverpool, supra), the Tribunal is of the opinion that this is an instance
where the public interest would not be served, nor confidence in consistent application of established government policy upheld, by departing from the practice and policy of the respondent and granting a FP contrary to those policies.
177. Finally, in the opinion of the Tribunal the evidence is that the application is too late. The Tribunal cannot simply ignore the relevant intervening events between 1989 and 1999, referred to above. In the Tribunal's opinion, as mentioned, if the applicants had a contractual right to be granted a CFBL in 1989, then by their very inaction and passive reliance on what they understood to be their rights in the interim, that right has been jeopardised by supervening events which run to the very core of the right in question and of which the applicants were fully apprised. In the opinion of the Tribunal, even acknowledging the previously mentioned conclusions about ESD in the S/WTBF, and having regard to all the evidence and the above reasons, the correct or preferred decision in this matter is to affirm the decision of the respondent under review.
I certify that the 177 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President T E Barnett; Mr R D Fayle, Senior Member and Dr E Christie, Member
Signed:
Associate
Dates of Hearing 1-5 May 2000 and 30 June 2000
Date of Decision 22 November 2000
Counsel for the Applicant Mr Buss
Solicitor for the Applicant Messrs Cocks MacNish
Counsel for the Respondent Mr Ritter
Solicitor for the Respondent Ms Ciffolilli
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