His Honour said that the explanation given by Mr Rohan for adopting a uniform number of boat units for each Danish seiner was that, from 1987, the Danish seiner fleet was permitted to upgrade size and capacity without any alteration being required in the number of units allocated to each vessel under the 1988 Management Plan. His Honour said that the consequence was that boat units allocated to particular vessels no longer reflected or, at least, necessarily reflected, size or power of each vessel. Accordingly, the Wellington Cape, with 81 boat units, might or might not have had greater capacity to catch fish than another vessel with, say, 60 or 90 units allocated to it. His Honour said that, by deciding to allocate a uniform number of units for each vessel, the Authority was relieved of the need to reassess the size and power of each vessel after the permitted upgrade. His Honour said that certain propositions flowed from the use of the formula to determine quota entitlements for Danish seiner boats in relation to flathead and school whiting. These were:
"· First, the 30% component of the formula, said by the Advisory Committee to represent "investment", does not, in fact, differentiate between operators according to their investment in the industry. This is so whether investment is to be assessed by reference to the funds invested by a particular operator, or simply by reference to the capacity of the vessel. All operators are treated in an identical fashion, provided they satisfy a low 'catch history' threshold in any one of the six qualifying years.
· Secondly, the formula makes no attempt to measure the size and power of the vessels,
either during the qualifying period or during more recent periods, except perhaps insofar as some inferences as to capacity might be drawn from a particular vessel's catch history. However, the catch history of a particular vessel is likely to reflect many factors other than capacity, including the vessel's need for repairs and the diversion of the vessel to activities other than fishing for flathead and school whiting.
· Thirdly, as Mr Street [counsel for the then applicant, now the respondent] contended and Mr Roberts did not dispute, the formula, in substance, allocates quotas by reference to one criterion only: catch history. Thus the formula embodies a general policy that allocations of quota should reflect only the catch history of the particular vessels.
· Fourthly, the exclusive focus on catch history as the criterion for allocating quotas for flathead and school whiting provides no guidance as to the respective efficiency of operators in obtaining their catch. It is fair to say that a careful consultative process was undertaken in determining the appropriate means of assessing the catch history of each operator during the qualifying period. But the exclusive focus on catch history means that the formula does not address the differing capacity of vessels, nor the resources devoted by operators to achieving their respective catches during the qualifying period. Consequently, the formula, of itself, says nothing about the investment of capital and labour required by different operators to secure a particular quantity or value of fish in the SEF."
His Honour said that the meaning of para. 3(1)(c) of the Act was to be ascertained by a process of statutory construction, not by the application of text book economics. He thought that the paragraph was concerned, at least in part, with productive efficiency in the sense of maximising output at least cost to the operators of the vessels comprising the fishing industry which exploited the resources of the South East Fishery. He said that the paragraph directed attention
to economic efficiency "in the exploitation of fisheries resources". His Honour continued:
"Fisheries resources are exploited, in the first instance, by catching fish. They are also exploited by selling fish. The criterion of economic efficiency doubtless requires attention to be paid to returns likely to be derived from the catch, since this is necessary to assess the economic rent derived by the industry. But the criterion also requires that some attention should be paid to the resources - the capital and labour - required to produce the catch. For example, an industry that relies on a relatively old and poorly equipped fleet, requiring a high labour input for a given catch, is presumably more costly and therefore less efficient than one which utilises modern, technologically advanced vessels.
In my opinion, the difficulty with the formula applied by AFMA and the AAT in this case is that it pays no attention to economic efficiency, in the sense in which that term is used in s.3(1)(c) of the Management Act. Quotas are allocated by reference to historical catch levels of particular vessels, regardless of the investment made and the resources required by those operators to achieve the catches during the relevant period. The formula does not take into account the nature of the vessel or its equipment, nor the efficiency or otherwise of its operations, except insofar as these matters might have been reflected in the vessel's catch history. Nor does the formula take account of the resources required for the vessel or its operator to achieve a particular yield of fish (whether measured in value or weight) from the SEF, bearing in mind that quotas were allocated to operators some years after the relevant catch history period (1984-1989). In effect, the formula is a means of dividing a limited natural resource among the operators who happen to have exploited it during a particular period. The formula does this by calculating the respective shares of the catch that those operators enjoyed during that period. The emphasis on catch levels presumably rewards operators with larger catches, but it does not necessarily reward past or current economic efficiency. Nor does it penalise past or current economic inefficiency in exploiting the resources of the SEF. Indeed, it is difficult to see how the formula itself is at all concerned with economic efficiency in the exploitation of the fisheries resources in the SEF."
His Honour's references to AFMA and SEF are, of course, references to the Authority and the South East Fishery respectively.
His Honour said that his conclusion was supported by an internal minute of 12 July 1995 prepared within the Authority in relation to the respondent's request for an amendment to the 1995 permit. The minute noted that the Wellington Cape's allocation of 81 units under the old system of boat unit allocation was higher than the average of the fleet. The minute pointed out that boat unit allocations did not necessarily reflect the fishing capacity or efficiency of other fleet vessels since, from 1987, they could be upgraded to 55 feet without the need to assign additional boat units to them. But, so his Honour said, the Authority, having discarded a measure that, at one stage, might have provided some indication of relative efficiency, did not substitute another criterion that measured or recognised economic efficiency.
His Honour went on to consider whether there was an error of law. He referred to the decision of Brennan J (as he then was) when the President of the Tribunal, in Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 and to well known passages in his Honour's decision which appear at 640-1 and 645. His Honour referred also to a number of the cases in which Brennan J's observations have been applied by the Court.
His Honour then said:
"In my opinion, if attention is confined to the policy relating to the allocation of quotas, as embodied in the formula, that policy failed to take account of a relevant consideration, namely, the objective of maximising economic efficiency in the exploitation of fisheries resources. In the present case, the policy was implemented by AFMA and the AAT, in relation to the 1994 permit, because the formula was used to impose quota conditions. The policy was implemented by AFMA and the AAT, in relation to the 1995 permit, because they refused the applicant's request to vary the quota conditions, and did so on the ground that there was no basis for departing from the formula."
His Honour referred to the judgment of Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 39 in which Mason J said that a decision-maker only failed to take into account a relevant consideration if he or she was bound to take that consideration into account when making the decision.
His Honour then turned to the transferability of quotas. Amongst other things his Honour said:
"My reading of the documents prepared by or for AFMA, insofar as they appear in the appeal books, does not suggest that AFMA specifically considered whether the formula for allocation of quotas could be regarded as consistent with the objective of economic efficiency by reason of the transferability of the quotas. In this respect, it is significant that the formula was used to allocate 1993 quotas even though for that year stringent restrictions were imposed on the transferability of quotas. In 1994 and 1995, restrictions on transferability were eased, but the formula remained unchanged. This suggests that introduction of the formula was not related to the free transferability of quotas. Moreover, the reason given by Mr Rohan for allocating a uniform number of boat units was simply that operators had been permitted to upgrade their vessels without any need to acquire additional units to reflect the greater power or capacity of the upgraded vessels. This explanation does not suggest that attention was paid to whether the objective of economic efficiency was served by a formula which is exclusively concerned with catch history."
In conclusion, on the question whether the decisions under appeal involved the omission of a relevant consideration, his Honour said that he considered that the policy applied by the Authority and the Tribunal excluded such a consideration, namely, the objective expressed in para. 3(1)(c) of the Act. He said his conclusion was not affected by the fact that in 1994 and 1995, quotas could be transferred to existing or new operators in the fishery.
His Honour said that, in his view, the Tribunal erred in two respects. It held that it lacked jurisdiction to review the Authority's decision to confirm the issue of a permit to the respondent for 1993 which imposed quota conditions. His Honour, for reasons which he gave, considered that the Tribunal did have jurisdiction to review that decision. That is not a matter which is the subject of appeal before us, but it should be mentioned that because his Honour thought that there was no utility in doing so, he did not think that any relief should be granted in respect of the 1993 permit. More importantly he thought that the Tribunal had erred in that it had applied a general policy in relation to the respondent's 1994 and 1995 permits embodied in the formula for determining quota conditions which failed to take into account the objective of economic efficiency stated in para. 3(1)(c) of the Act. Accordingly, he made the declarations and the order referred to at the commencement of these reasons.
The submissions made on behalf of the appellant did not challenge the construction placed upon para. 3(1)(c) of the Act by Sackville J. The construction his Honour adopted is supported by the terms of a policy statement released by the Minister in December 1989. This policy statement was referred to in the second reading speech in which the Bill which became the Act was introduced; see Hansard for the House of Representatives, 6 December 1990, pp.4644 et seq. Amongst other things the policy statement said:
"The three overriding objectives of the management controls outlined in this policy statement are:
· to ensure the conservation of fisheries resources and the environment which sustains those resources;
· to maximise economic efficiency in the exploitation of those resources; and
· to collect an appropriate charge from individual fishermen exploiting a community resource for private gain.
Achievement of these objectives will create a stable economic and biological environment in which fishermen can operate with greater confidence and economic security.
Management controls which maximise economic efficiency involve a lower level of fishing effort and lower costs than in an uncontrolled situation, and in virtually all cases are also consistent with the biological sustainability of the resources."
Paragraph 1.2 of the statement is headed, "Scope of policy statement". It is there said:
"The Government recognises that commercial fishermen as entrepreneurs aim to maximise profits. It also recognises the propensity for fisheries to attract excess investment, resulting in over-exploitation and reduced profitability. The Government's aim in managing fisheries is, therefore, to create conditions where the reasonable business aspirations of fishermen can be attained while safeguarding the fishery resource."
From these statements it may be seen that a principal aim of the policy was to balance the need for conservation and, at the same time, to have regard to the reasonable business aspirations of fishermen. That would be achieved by maximising economic efficiency in the exploitation of the fishery.
Reference may also be made to the Report, "Fisheries Reviewed", published in December 1993 by the Senate Standing Committee on Industry, Science, Technology, Transport, Communications and Infrastructure. Appendix E to the Report is a summary of the policy statement. The Committee said that the thrust of the "Policy Document" was subsequently incorporated into the legislative package establishing the Authority and its functions; see at 107-8.
Counsel for the appellant conceded that his Honour was correct in stating that the allocation formula itself did not take account of economic efficiency. The objective of the formula, so counsel said, was to provide an equitable allocation of available quota among those who were considered to be existing stakeholders in the Fishery. Counsel said that the allocation formula, however, was but one part of an overall policy. The overall policy took into account all the objectives in s.3 of the Act. Counsel submitted that it was wrong to divide up the policy into constituent parts as Sackville J had done, and then to enquire in relation to one part of the policy whether it fulfilled a particular objective in s.3.
The difficulty I have with this submission lies in the use of the word "must" in the subsection and, in conjunction with that, the linking of each of the five objectives with the word "and". In my opinion that means that each objective must be pursued by the Minister and by the Authority. It is only possible to find out whether that has happened in a given case by analysing the decision which has been made and reaching a conclusion on whether each of the objectives has been taken into account. It is not possible to undertake that exercise compendiously. To do so runs the risk that one of the objectives which the Minister is obliged to pursue may be omitted. The only way in which the exercise can be performed is by looking at each objective individually. No doubt there will be cases in which the Minister may give varying degrees of weight and emphasis to this or that objective. So long as each objective is pursued, there will be no breach of duty.
But if one of the objectives is not pursued at all, then that will not be the case.
Something was said during the course of the argument about the fact that the provisions of s.3 laid down objectives. The section is not couched in language which expressly says that the Minister or the Authority must take into account particular matters. Such a provision is not uncommon in a variety of Acts of Parliament. But, in my opinion, the position is no different because the objectives under s.3 must be pursued by the Minister and the Authority in the administration of the Act, so far as the Minister is concerned, and by the Authority in the performance of its functions under the Act. One of its functions is to grant permits under s.32.
Counsel also said that the creation of individual transferable quotas was an integral step in maximising economic efficiency in the exploitation of the resources of the Fishery. The creation of quotas permitted operators to adjust their fishing capacity through the purchase and sale of quotas with the effect of maximising individual efficiency. Cost efficient operators would be expected to purchase quotas from less efficient operators who would leave the industry. In this way, the amount of fishing inputs used to take the allowable catch would be reduced and overall economic efficiency increased. Restrictions on the transfer of quotas were imposed in response to uncertainty resulting from the combination of reviews and court challenges that followed the introduction of the system and were a temporary measure.
In my opinion, this submission does not answer the criticism of what was done made by his Honour nor does it answer the respondent's submissions. I see little point to the statement that restrictions were introduced in response to uncertainty resulting from reviews and court challenges. If decisions are not being made according to law, they ought to be reviewed and, as necessary, set aside. As to the more substantial part of the submission, I do not gainsay that it would be possible to give effect to para. 3(1)(c) of the Act by instituting a system which took account only of catch history, nor do I gainsay that it may be possible to achieve that end by creating a situation in which economically weaker operators would sell and leave the field. That is not, however, how I perceive the material which was before the Tribunal. It seems to me to be more consistent with a situation in which the Authority had to deal with a number of existing operators in the fishery who stood to lose substantial amounts of money and their livelihoods as a consequence of taking into account boat units which were designed to reflect the investment made in equipment and which would have given effect to the objective mentioned in the policy statement of encouraging the efficient operation of operators. Taking account only of catch histories, and long past catch histories at that, would be unlikely to have the effect contended for by counsel. Of course, the appeal lies only on a question of law and it is, I think, for the respondent to demonstrate that a material consideration, namely the requirements of para. 3(1)(c) of the Act, as omitted from account. But I think the totality of the material which was before the Tribunal, particularly the evidence given by Mr Rohan, tends to demonstrate that that is indeed what occurred. A further pointer to that being the case is so much of the decision of the delegate earlier quoted as dealt with the respondent's contention that the allocation formula used was unfair and resulted in significant financial disadvantage. What the delegate said seems to me to run counter to the general thrust of counsel's submission.
Then it was said on behalf of the appellant that there was no necessity for the appellant to "prove" that the objectives in s.3 were taken into account in formulating the overall policy "particularly as it was never an issue in the proceedings" in the Tribunal. That it was not is common ground. Counsel also said that the case put in this Court on behalf of the respondent was only tangentially related to the issue of economic efficiency which had been isolated by Sackville J in his judgment. Counsel said that the case put by the respondent at first instance in this Court focussed on the individual economic circumstances of the respondent. It was said that the respondent did not have sufficient quota to be economically viable and therefore the economic efficiency objective in s.3 was not fulfilled.
I am prepared to accept that that was the case and the fact that it was is the occasion for the concern I expressed at the outset of this judgment about whether this case was properly brought as an appeal to the Tribunal rather than as an application for judicial review under the Judicial Review Act. I shall say more of this in a moment.
I do agree that there was no necessity for the appellant to prove that the objectives in s.3 were taken into account in formulating the overall policy. It was not incumbent on the appellant to prove anything. But the conclusions I have drawn have come, not from any absence of evidence on the part of the appellant, but from a consideration of the totality of the material which was before the Tribunal. Furthermore, it is not correct to say, as the submission does, that the case put by the respondent before Sackville J focussed on the individual economic circumstances of the respondent. Counsel for the respondent handed up a copy of the written submissions which had been made to his Honour. Paragraph 8 of those submissions fairly raises, in my opinion, the point now being considered. The submission said that the boat units for Danish seiners were effectively ignored by all being deemed to have a value of 100. The consequence was that the specific value in engine and hold capacity of the specific Danish seiner, the economic investment in the vessel and the equipment, was ignored and the allocation of quota occurred by the selective history of a particular vessel for a particular species of fish. This was said to be contrary to the notion of boat units permitting differentiation between Danish seiners and contrary to the legislative objective of economic efficiency. The point upon which the respondent succeeded was therefore taken before the primary Judge. It is true to say, however, that it does not appear to have been taken before the Tribunal. We were referred to para. 41 of the Tribunal's decision in respect of the 1993 and 1994 licences. It was suggested that that indicated that the submission now relied upon had been made to the Tribunal. Having read the paragraph, I regret to say that I am unable to find in it any indication that such a submission was made.
Finally, counsel for the appellant said that, if the Authority were required to attain economic efficiency in the Fishery through the allocation process, this would necessarily involve the allocation of quota to the lowest cost operators with the most profitable fishing operations. In practice, the Authority could only hope to achieve this aim through the auctioning of quota as the most efficient operators would be expected to value the quota most highly. But counsel said that that approach was fraught with problems of equity for those operators already established in the Fishery. In my opinion that submission takes the matter no further. The whole question is whether economic efficiency has been taken into account. It does not appear to me that it was and that is the end of the matter. As I have said, there may be other ways of taking the objective in question into account. For present purposes it is enough to say that it seems patent to me that it was not taken into account in formulating the policy which everybody seems to agree existed and in applying that policy to the circumstances of this case.
It follows that I am in agreement with Sackville J in relation to the approach he took. That leaves the question whether it was appropriate for the respondent to seek review of the decision by way of the Administrative Appeals Act rather than the Judicial Review Act. As I have indicated, I have misgivings about this matter. My concern is that the real complaint which the respondent has is to be found in the Authority's decisions rather than in those of the Tribunal. No point based on this matter was taken by counsel for the appellant. Counsel did complain that the matter had not been taken in the Tribunal and also submitted - I have indicated that I would reject the submission - that the point was not taken before his Honour. But counsel made it quite clear that his client was not prejudiced by the taking of the point for the first time before Sackville J nor would it have been prejudiced, as I understood the submission, if the point had been taken for the first time by his Honour himself after he reserved his decision. This was because the appellant had had every opportunity of raising the matter before this Court and because it did not suggest that, if the matter had been raised before the Tribunal, the evidence would have come out any differently from the way it did.