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[2000] SASC 438
Supreme Court of SA
2000-12-21
Smoothpool Nominees P, Ors Lander J, Perry J
Original judgment source is linked above.
27/10/2000, 02/11/2000, 07/11/2000, 15/11/2000, 08/12/2000, 11/12/2000.
TORTS - MISFEASANCE IN PUBLIC OFFICE The plaintiffs, former professional fishermen, alleged that the defendants, who successively held public office as Directors of Fisheries, were guilty of maladministration of the Fisheries Acts 1917 and 1971 causing them financial loss in the carrying on of their businesses as abalone divers - consideration of the elements of the tort of misfeasance in public office. NEGLIGENCE - NEGLIGENT MIS-STATEMENT The plaintiffs alleged in the alternative that various representations and directions made by the defendants while holding office as Directors of Fisheries constituted negligent mis-statements - consideration of the question as to the circumstances in which an action in negligence is available where the plaintiff fails on the same facts in an action for misfeasance in public office - discussion of test of `vulnerability' as opposed to `proximity' and `reliance' - consideration of question whether action in negligence available, having regard to terms of the statutory provisions. PRACTICE AND PROCEDURE - EVIDENCE - CREDIT Consideration of approach to findings as to credit. LIMITATION OF ACTIONS - ASCERTAINMENT OF MATERIAL FACTS Consideration of approach to be adopted to an application for extension of time by plaintiffs guilty of long delay in instituting proceedings and inexcusable delays in prosecuting the proceedings once instituted. PRACTICE AND PROCEDURE - AVAILABILITY OF PLEA OF LACHES WITH RESPECT TO COMMON LAW CLAIM Discussion of principles involved in defence of laches raised in the context of delay in commencing proceedings based on causes of action at common law and delay in prosecuting them.
Plaintiffs: RAYMOND ARTHUR GEORGE EDWARDS AND DEEP SEA ARK (AUST) PTY LTD
Defendants: AM OLSEN, HPC TRUMBLE, JAMES C MCCOLL, IAN R KIRKEGAARD, RICHARD A STEVENS AND THE STATE OF SOUTH AUSTRALIA
Counsel: MR M BELL WITH HIM MR P CUTHBERTSON - Solicitors: CROWN SOLICITOR FOR THE STATE OF SOUTH AUSTRALIA
Defendants: RICHARD A STEVENS AND STATE OF SOUTH AUSTRALIA
Counsel: MR M BELL WITH HIM MR P CUTHBERTSON - Solicitors: CROWN SOLICITOR FOR THE STATE OF SOUTH AUSTRALIA
Judgment No. [2000] SASC 438
A. The Fisheries Act 1917 33
9. Legal principles - Misfeasance in Public Office 59
18. Final Conclusions and Disposal of the Actions 172
PERRY J. This judgment follows the joint trial of two actions.
1 Both actions concern the fishing industry, more particularly the commercial harvesting of abalone.
2 In one action, Mr Edwards and a company controlled by him, Deep Sea Ark (Aust) Pty Ltd ("Deep Sea Ark"), are plaintiffs. I will refer to that action as Mr Edwards' action.
3 In the other action, Mr Murphy is the sole plaintiff.
4 In Mr Edwards' action the first five defendants successively held office as Directors of Fisheries in and for the State of South Australia. That is subject to the qualification that for the first five years from his appointment in 1967, the defendant Mr Olsen's position was as Chief Inspector. As such, he headed the Department, and continued as head when the position was renamed in 1972 and thereafter as Director. For convenience I will refer to him throughout as holding the office of Director.
5 In Mr Murphy's action one of the former Directors of Fisheries, Mr Stevens, is sued in that capacity.
6 I will refer to the Directors of Fisheries who are sued as the director defendants.
7 In both actions the State of South Australia is joined as a defendant.
8 The plaintiffs seek damages for alleged misfeasance on the part of the director defendants in the discharge of their duties as public officers, and alternatively damages for negligence. In the main, the claims are based upon alleged maladministration of the various Fisheries Acts in their application to the South Australian abalone fishery over certain periods during which Mr Edwards and Mr Murphy carried on business as commercial abalone divers. Their claims run into some tens of millions of dollars.
9 In both actions the joinder of the State of South Australia is on the basis that pursuant to the Crown Proceedings Act 1972 (since repealed) it is liable to the plaintiffs for the alleged tortious conduct of the director defendants.
10 At the hearing Mr Edwards and Mr Murphy appeared in person. In Mr Edwards' case, he was permitted to represent Deep Sea Ark.
11 The trial extended over some 110 days, commencing in February 2000. The parties who gave evidence and the witnesses who took the stand amounted to some 45 in all. A very considerable volume of exhibits was tendered.
12 At times, despite my endeavours to confine the hearing to the issues raised between the parties, it seemed to be assuming the dimensions of a royal commission into the administration of the abalone fishing industry.
13 Altogether there are some 16 proceedings, including the two actions now before me, which have been instituted in this Court by abalone divers or companies with which they are associated. In all of those proceedings much the same claims are advanced against various Directors of Fisheries and the State of South Australia. The plaintiffs in all of the cases seek damages for misfeasance in public office, or alternatively, in negligence.
14 The first group of proceedings was brought in 1986. That included Mr Edwards' proceedings and three others. Mr Murphy instituted his proceedings in 1987. Other proceedings were issued at various stages between then and 1998.
15 The various acts and omissions alleged to have occurred, and which are said to give rise to the causes of action pursued in the proceedings, span a period of time commencing in the late 1960s and extending to the early 1980s. On the face of it, all of the proceedings were instituted outside of the relevant period of limitation. At least that is so if one puts aside contentions that in a few instances, proceedings on certain causes of action were brought within the relevant limitation period, having regard to the date upon which certain discrete causes of action are said to have arisen.
16 Regrettably the progress of the action through the courts has been appallingly slow. Interlocutory proceedings, particularly those to do with pleadings and discovery, became extraordinarily protracted. There were a number of interlocutory appeals, or attempted appeals. Applications were brought by the defendants to strike out some of the actions, but they were unsuccessful.
17 Eventually it was recognised that issues common to all or most of the cases involved questions of construction of the various Fisheries Acts which were in force during the period in question. That perception prompted a Master to state a case for the consideration of the Full Court. In the case stated, a number of questions, largely as to construction of the various Fisheries Acts and Regulations, were posed.
18 The case was stated in Mr Edwards' action, but the questions were formulated on the footing that the answers to them were likely to be relevant, at least in part, to all of the actions.
19 The case stated came on for hearing before a Full Court of which I was a member in May 1996. The judgment of the court was given on 25 September 1996.[1]
20 After the judgment of the Full Court on the case stated had been pronounced, efforts were made to bring the actions to trial. But delays continued.
21 At the end of the day, none of the parties will own up to responsibility for any of the delay, blaming others or events beyond their control. But insofar as it may be relevant to attribute any blame for the delay, it must be sheeted home primarily to the plaintiffs. In particular, I do not accept Mr Edwards' contention that the defendants are to blame, whether by reference to any supposed tardiness in making discovery of documents or otherwise.
22 It is for plaintiffs who have brought proceedings to get on with them in a timely fashion. Their failure to do so may have adverse implications for the plaintiffs with respect to applications for extension of time, costs, interest and a failure to satisfy the onus of proof where the factual basis of a particular issue can no longer be satisfactorily resolved due to witnesses having died or the recollection of those witnesses who have survived having faded due to ill health or the lapse of time.
23 Following the Full Court hearing, and in an endeavour to expedite the passage of the pre-trial proceedings, the court directed that the cases be judge-managed. I thereupon took in hand, with the assistance of a Master, the task of completing the pre-trial proceedings.
24 Towards the end of 1998 there was an attempt to mediate one of the cases, being an action brought by Mr Hopcroft and an associated company.[2] The defendants would not agree to mediation, whereupon, in the exercise of my power under s 65 of the Supreme Court Act 1935, I directed that a mediation proceed, notwithstanding the lack of consent of the defendants.[3] In the result, the mediation was unsuccessful.
25 Eventually I determined to bring the matters, or at least a representative group of them, to trial. In doing so I met with considerable opposition from the plaintiffs.
26 I first assigned a trial date, namely a date in February 2000, upon which to commence the hearing. I then heard argument as to how the matters might best be listed for trial.
27 The defendants contended that the preferable course would be to bring to trial initially a representative group of six actions, on the footing that together they raised what seemed to be the central issues joined in the proceedings taken as a whole. The plaintiffs opposed this course, and submitted that only the matter of Hopcroft should first be listed.
28 In June 1999 I ordered that the six actions which it had been suggested by the defendants should be brought to trial, come on for hearing in February 2000, on the footing that they be heard jointly, "subject to any further submissions which may then be made as to the sequence of trial of the actions".[4] The six actions which I ordered to be heard together were Mr Edwards' action, Mr Murphy's action and the actions brought by Mr Fox, Mr Ey, Mr Smith and Mr Hopcroft.
29 The parties other than Mr Murphy and Mr Hopcroft sought leave to appeal against that order. The application was referred to the Full Court. By order made on 14 October 1999, the Full Court refused leave to appeal.[5]
30 Mr Edwards made an application, heard in December 1999, that Mr Bell, leading counsel for the defendants, be disqualified from further appearing in the matter. The basis of the application was that Mr Bell had from time to time proffered advice with respect to fishing industry matters while a solicitor employed in the office of the Crown Solicitor of South Australia. Mr Edwards further submitted that there were instances where Mr Bell had given advice to the Fisheries Department, or officers of the department, which in effect caused them to act illegally. I dismissed his application for the reasons given ex tempore on Wednesday 22 December 1999.
31 Just before the trial was due to commence on 21 February 2000, I was advised by counsel that Mr Hopcroft's action had settled.
32 At that stage, apart from Mr Hopcroft, three of the plaintiffs were represented by counsel, namely Messrs Fox, Smith and Ey, the remaining two plaintiffs, namely Mr Edwards and Mr Murphy being unrepresented.
33 After the trial had proceeded for about a month, and while the cross-examination by Mr Bell of the first plaintiff to give evidence, Mr Fox, was still in progress, I was advised by counsel that the three actions of Fox, Ey and Smith had settled.
34 I thereupon proceeded with the hearing of Mr Edwards' and Mr Murphy's cases, the taking of evidence in those two cases having been completed on 28 September 2000.
35 At the conclusion of the cases presented by the plaintiffs, Mr Bell submitted that there was no case to answer with respect to certain elements in the various claims. After hearing argument from the parties, I allowed the submission as to two limited matters, but otherwise dismissed it.[6] The extent to which I allowed the submission of no case to answer appears later in these reasons.
36 When the taking of evidence had been completed I directed that written submissions be prepared by all parties in both actions. After the written submissions had been received, I heard oral argument from the plaintiffs and counsel for the defendants.
37 I should mention that a difficulty arose as to the actions which had been settled.
38 Initially there was some delay in securing the execution by the plaintiffs who had settled, of formal deeds recording the terms of settlement. Mr Hopcroft, Mr Ey and Mr Smith then challenged the enforceability of the settlements. Eventually Mr Ey and Mr Smith dropped their challenge, but Mr Hopcroft maintains his position, and acting on his own behalf, has taken out an application to set aside the settlement of his action. He pleads that he was subjected to duress or undue influence.
39 Although I have not been advised as to an amount of money which was paid to Mr Hopcroft, I eventually ordered the balance then remaining of his settlement moneys to be paid into court, and adjourned his application to set aside the settlement to a date to be fixed after the completion of the present proceedings.
40 At the outset of the joint hearing I made it clear that there could only be one body of evidence when trials were heard together in this way, but that out of that body of evidence each case fell to be considered individually and in accordance with the evidence which was admissible and relevant in the particular case.
41 The question arose upon settlement of Mr Fox's action as to how his evidence was to be treated, given that some of it was relevant to Mr Edwards' and Mr Murphy's claim. As I have indicated, Mr Fox's case settled at the stage when he was still undergoing cross-examination by Mr Bell of counsel for the defendants, and neither Mr Edwards nor Mr Murphy had had an opportunity to cross-examine him. Accordingly, I intimated that I would be prepared to have Mr Fox recalled for further cross-examination by the defendants and by Mr Edwards and Mr Murphy if any party sought that course, notwithstanding the fact that Mr Fox no longer pursued his own claim.
42 In the events which happened, Mr Bell intimated that he did not wish further to cross-examine Mr Fox, and both Mr Edwards and Mr Murphy intimated that they did not seek his recall for the purpose of cross-examination by them.
43 So that to the extent that it is relevant, Mr Fox's evidence, in part the subject of cross-examination by the defendants but not the subject of cross-examination by the plaintiffs, has been taken into account by me in resolving Mr Edwards' and Mr Murphy's cases.
44 Although an application was made during the pre-trial phase of the cases for an order that as trial judge, I should deal with certain discrete issues ahead of other issues, for example, by trying all questions of liability first, I declined to do so. In the result, the trial proceeded as to all aspects of Mr Edwards' and Mr Murphy's claims, that is, as to the alleged liability of the defendants, the applications for extension of time within which to institute the proceedings, and as to quantum.
45 At the outset of the hearing with respect to Mr Edwards' and Mr Murphy's claims, I spent some time dealing with arguments as to the pleadings, in the main with respect to objections by the defendants to the statements of claim of Mr Edwards and Mr Murphy.
46 Their statements of claim had been the subject of considerable attention during the pre-trial phase of the case. It became obvious that, particularly in the case of Mr Murphy, it was simply not possible to obtain pleadings which would answer to the standard which would be expected if they were legally represented.
47 However, both plaintiffs clearly had claims which were arguable and which they were entitled to present to the Court. In those circumstances I gave what assistance I could without going so far as to attempt to draft their pleadings for them. At the same time I intimated to the defendants that so long as they were fairly on notice as to the nature and extent of the claims, whether by way of the pleadings or by way of the expert reports which had been put forward by Mr Edwards and Mr Murphy in support of the quantification of their claims, or by way of opening addresses, that would be as far as the Court could go. I was not prepared to embark on a process of trying to achieve the impossible and seek to have the two unrepresented plaintiffs then remaining attempt to express their claims with the precision and in the terms which one might expect from experienced legal counsel.
48 It follows that the claims went to trial on pleadings which were far from satisfactory, but which were the best which could, in the circumstances, be achieved. The essential nature of the plaintiffs' claims was clear enough, and there was no suggestion that any evidence was adduced by either Mr Edwards or Mr Murphy which caught the defendants by surprise.
49 The fact that the plaintiffs were unrepresented gave rise to particular difficulties with respect to the leading of evidence. Again I was mindful of my responsibility on the one hand to remain impartial and to deal with all parties in an even-handed fashion, but on the other hand to give such assistance to the unrepresented plaintiffs as was reasonably necessary to enable their claims to be fully and adequately ventilated.
50 In the somewhat difficult situation in which I was placed, I found it necessary to lead both Mr Edwards and Mr Murphy in their examination-in-chief. I did so by reference to their pleadings and my understanding of the cases as opened by them. So far as their witnesses were concerned, I endeavoured to leave it to Mr Edwards and Mr Murphy to lead their witnesses. But at times it was necessary to intervene to put questions in an admissible way, sometimes following a series of objections by counsel for the defendants.
51 Obviously I could not properly intervene in the cross-examination by Mr Edwards and Mr Murphy of witnesses called by the defendants, except occasionally, when I found it necessary to put in an admissible fashion a line of cross-examination which they were endeavouring to pursue and as to which a successful objection had been taken.
52 A very considerable volume of documents was tendered, largely by the plaintiffs, more particularly Mr Edwards. There were numbered exhibits exceeding 5000 in all, some numbers representing volumes of documents.
53 Many of those exhibits are strictly irrelevant. I was not prepared, however, to entertain extended argument as to the relevance of particular exhibits. Rather, with some exceptions, I preferred to admit them on the footing that if they were relevant they would be taken into account and given whatever weight I considered appropriate. If irrelevant, they would be disregarded.
54 It was obvious from the outset that both Mr Edwards and Mr Murphy harboured strong feelings of antagonism towards the director defendants, or such of them as held office under the Fisheries Acts while the plaintiffs were diving for abalone. Furthermore, it was clear that the plaintiffs felt that over that period of time they had been badly treated by the Fisheries Department and its officers, and prevented from a full realisation of the financial benefits which their exertions as abalone divers deserved.
55 While it might be putting the matter too highly to suggest that they were pursuing a vendetta, they took every opportunity to criticise every conceivable aspect of the Department's regulation of the abalone fishing industry, at least insofar as it was perceived by them to be against the interests of the divers. In consequence a very considerable body of evidence was admitted which was of marginal relevance, if relevant at all, to the legal and factual issues upon which the cases fall to be determined.
56 In dealing with the admission of evidence, I took what some might suggest was a somewhat benign approach, partly as an expression of my concern to ensure that the unrepresented plaintiffs were not disadvantaged by reason of their inexperience with court procedures and lack of legal knowledge, and partly as an expression of my concern to ensure that all relevant evidence was before the Court.
57 However, in these reasons for judgment, I have confined myself only to items of evidence which are relevant to the determination of the issues. It may be assumed that I have taken into account all evidence which was presented, and that in making the findings of fact upon which the judgment turns, I have rejected the evidence inconsistent with those findings, even though in every case I may not specifically identify that evidence.
58 Much evidence was given during the case as to the fishing industry in general and as to the commercial taking of abalone in particular.
59 With some exceptions, such as in the case of aquaculture, fish stocks throughout the world are generally regarded as a "common property resource". It is this characteristic which gives rise to a natural tendency towards over-exploitation.
60 In response, regulatory authorities impose various forms of control. Commonly this is achieved by limiting entry to the fishery in one way or another, usually by some form of licensing. Sometimes, in the case of recreational fishing, the licensing will be associated with catch limits, and in the case of professional fisheries, with quotas.
61 In South Australia a regime of control by legislation was first imposed by the Fisheries Act 1917. In the form in which it was first enacted the legislation did not seek to control the structure of the fishing industry, and fishing licences were available to any person paying the prescribed fee. However, amendments to the Act and eventually new Acts which superseded it, imposed progressively more stringent methods of control. The changes included provision for the limitation of entry into specified fisheries, which was a feature of the new Fisheries Act of 1971 which replaced the 1917 Act.
62 In South Australia the administrative responsibility for the management of fisheries under the 1917 Act and its successors has at various times been combined with either game management or fauna conservation, and the department has been variously entitled to reflect this, as has the description of the director. For the purposes of this case, nothing turns on those changes. To avoid unnecessary complications in describing the department and the directors, I have referred to the Department and the directors in their various guises as the Fisheries Department and the Director of Fisheries.
63 State control of fishing extends in South Australia to the areas encompassed by the Gulfs and beyond that to the three-mile limit from the coastline. The Australian Government administers fishing beyond the three-mile limit up to twelve miles from the coast. Some species of fish travel between the two areas, which fact, together with other circumstances, has given rise to a degree of tension between Commonwealth and State fisheries legislation.
64 Although Mr Edwards attempted to make much of some of the difficulties imposed by the interaction of Commonwealth and State fisheries legislation, I am not satisfied that those supposed difficulties have any bearing on the outcome of either case. They are irrelevant to Mr Murphy's case.
65 This is largely because I accept the evidence of Dr Scoresby Shepherd that the distinction between Commonwealth and State jurisdictional limits over the sea bed was of no consequence to abalone fishermen who were licensed for that purpose under the State Acts and fished within State territorial waters.
66 Very few, if any, abalone is to be found in commercial quantities outside of State territorial waters. If there is or has been any occasional intrusion by abalone divers into Commonwealth waters, whatever may be the legal position, it has not had any practical consequences, in that the whole of the abalone catch has been brought to account under state legislation.
67 In South Australia the major fishing areas for abalone are: to the west, from a little north of Port Lincoln southwards and then north-westerly along the coast to D'Entrecasteaux Reef in the far north-west of South Australian waters; in the area of the gulfs, on the eastern side of Spencer Gulf from about Port Hughes southwards, the southern coast of Yorke Peninsula, the southern coast of Kangaroo Island and in Backstairs Passage in the area of Cape Jervis; in the south-east of the State, along the rocky coast east and south-east of Kingston.
68 The abalone is a mollusc, a gastropod, but unlike most gastropods it has a rather flattened shell. It is within the "snail" group of animals. Like a snail, it crawls on its foot, which is underneath its shell. Although occasionally individuals will travel over a sandy bottom to search for food, that is uncommon, and generally it is restricted to rock.
69 Two varieties are commonly found in South Australian waters. They are known as black lip (haliotis ruber) and green lip (haliotis laevigata). Green lip is more commonly harvested, comprising 55% of the catch in South Australia. It is somewhat more valuable on the market than black lip. Black lip, representing 45% of the South Australian catch, tends to congregate in caves or under rocky outlets, whereas green lip is found on more open, rocky formations.
70 Abalone generally do not travel far. Studies have indicated that in many locations individual abalone do not move more than a few centimetres in as long as ten years.
71 Fertilisation of eggs shed by female abalone occurs in the sea. Generally abalone are found in colonies, some quite dense. Abalone reach maximum size at seven to nine years of age.
72 Size limits are imposed upon abalone which may be taken by fishermen. Generally speaking, the minimum size at which abalone may be taken is reached in five to six years.
73 Abalone reach sexual maturity at about four years of age.
74 The maximum lifespan is probably 30 to 35 years, but that is rare. What has been described as the "ecological longevity" is more like 20 years. Fishermen generally take abalone aged from between five and ten years.
75 I accept the evidence of Dr Shepherd that a given population of abalone which is reduced by fishing by as much as 80% must be regarded as having "collapsed", in the sense that it would be unable to repopulate.
76 Initially, entry into the abalone fishery in South Australia was uncontrolled. But early in 1968 there was what has been described as "a flood" of divers into the fishery. By February 1968 there were over 100 divers operating and a record 1,852 tonnes of abalone was harvested in 1967/68. It was clear that such a level of catch could not be sustained in that it involved an over-exploitation of the virgin stock.
77 To reduce the number of divers, the Department introduced a permit system and then progressively withdrew many permits on technical grounds (commonly the failure to present catch returns as required by the Department).
78 By 1971/72 there were only 42 divers operating and the total catch had declined to 1,128 tonnes.
79 Currently the 35 divers may take a maximum annual quota varying between 7.6 and about 10 tonnes per year each.
80 What is described by the administrators as the "unit of effort" in the abalone industry was the individual diver, who was licensed. When systems of authorisations or permits were introduced, it was the individual diver who had the benefit of the authority or permit.
81 The technique of diving for abalone does not appear to have changed in its basics during the period since 1968 when commercial abalone diving commenced in South Australia.
82 A skin diver wearing a wet suit operates from a small boat. The aluminium boats in common use are known as "tinnies". In the early days scuba tanks were used, but now and for many years the divers breathe filtered air supplied through a long plastic hose from a compressor mounted in the boat. This apparatus is known as "hookah" gear.
83 In order to maintain the functioning of the compressor and the supply of air, to shift the boat in sympathy with the movements of the diver on the seabed, and to assist if difficulties arose, the diver is accompanied by another person who remains in the boat. That person is usually responsible for removing the flesh from the shell of the abalone. Although some abalone is landed in the shell, it appears that in most cases the flesh is removed from the shell on the boat. The person doing the shelling is sometimes called a "shucker".
84 The diver dislodges the abalone from its position attached to the rock face using a screwdriver or chisel-shaped abalone iron. He places the abalone in a nylon mesh bag which, when full, he brings up to the surface. The shucker helps to bring it on board.
85 Diving is hazardous. Apart from the ever present threat of being taken by a shark, divers may suffer decompression sickness. As well there is a high incidence of aseptic bone necrosis, deafness and arthritis.
86 I accept evidence that most abalone divers would only work to the age of about 40, or at the most 50 years of age. I reject evidence to the contrary.
87 The average price per kilogram for abalone has increased dramatically since the days when it first began to be harvested commercially in this State. For example, the price expressed in terms of meat weight in 1969 was 78 cents per kilogram, which rose to $8.10 by 1980. That is a multiple of over ten times compared with the comparative increase in the Consumer Price Index of not quite three times.
88 As the price increased, popular perception that it was a highly lucrative business activity heightened. This resulted in much increased demand by persons wishing to enter the industry.
89 As will be seen, abalone authorities did not become transferable until 1980. The legislative changes which gave rise to transferability heralded a period over which the price at which abalone authorities changed hands increased dramatically, to a value measured in millions of dollars. The increase in value in turn heightened pressures on individual authority holders, who were likely to have incurred significant financial liabilities in order to buy into the industry, to maximise their catch.
90 It is the pressures resulting from these tendencies which in part explain how some of the issues in the case have arisen.
91 From July 1971 control of the abalone industry in South Australia was divided between three geographical zones known as the Western, Central and Southern Zones, which roughly equate to the three areas which I have described earlier.[7]'' Eventually the number of divers in each zone became static. Since the mid-1970s until now, there have been 35 licences on issue, 23 in the Western Zone and six each in the Central and Southern Zones.
92 In retrospect and with the benefit of the wide-ranging evidence which has been presented during the course of the hearing, it has become clear that, by and large, control of the industry has been successful. What is by all accounts a somewhat fragile natural resource has been preserved.
93 This is in marked contrast to the over-exploitation which has occurred in other parts of the world, and even in other parts of Australia, where some abalone fisheries have collapsed.
94 Mr Edwards is now aged 55 years. He attended Adelaide Teachers College and took his studies almost to the completion of a BA degree. He did not pursue training for the teaching profession after the end of 1967 when he began abalone diving.
95 Three or four years before then he had started recreational diving. His interest was aroused in abalone diving after he saw a professional abalone diver taking abalone. Mr Edwards and a friend saw the potential and began full-time diving for abalone for a living.
96 Fairly early in 1968 he and his friend were able to obtain permits, the system for issuing permits for abalone diving to divers having just been introduced, and they established an operation at Baird Bay on the West Coast.
97 Soon after that, Mr Edwards took up diving from Elliston, which is also on the West Coast, teaming up with another diver. He then bought a boat of his own (he had been using his father's boat) and other plant and began to establish himself in the industry.
98 At that stage, he worked with a crew or shucker who was remunerated by taking a small percentage of the catch.
99 Eventually Mr Edwards bought a shack at Waterloo Bay near Elliston. He married in 1969. By his wife Suzette he had two sons who are now in their late twenties. He and Suzette separated in early 1979.
100 During the first few years Mr Edwards did not have any other remunerative occupation. His evidence is that he liked diving, enjoyed being his own boss, and made a reasonable living. He formed a partnership with his wife, but, to use his expression in evidence, "the Fisheries Department would never recognise my wife in any business relationships", and the abalone was sold in his name only. However, as was the case with many abalone fishermen, he accounted for the proceeds within the partnership which he described as "for taxation purposes".
101 In the early 1970s he bought a house at Port Lincoln, where he moved with his family, although he retained a shack at Elliston. He operated off the coast between Port Lincoln and Elliston. Occasionally he went up to Streaky Bay or Ceduna, and he made an excursion to the South-East and to Kangaroo Island, but his main area of operation was between Elliston and Avoid Bay.
102 In 1968 he went to Western Australia for a week or two. He next went there in the latter part of 1969, on that occasion for three or four months.
103 Initially he explored the coast between Esperance to Cape Leeuwin. He obtained a licence from the Western Australian Fisheries Department and he sold small amounts of abalone which he harvested in that State.
104 From 1971 onwards, when the scheme of licensing changed, he held what was then described as an A-class licence, together with an abalone permit. These were re-issued from year to year.
105 In 1971 or 1972 Mr Edwards and his wife purchased a prawn trawler in Queensland for about $22,500. He said in evidence that he had been keen to bring a trawler back to use in South Australia, that is, prawning off the coast of South Australia, but he thought that he would first try to learn something about the industry by operating the boat off the coast of Queensland.
106 He employed a skipper on the prawn boat who held the necessary licence to operate it in that State. The boat was operated for six months of the year in Moreton Bay, and for the remainder of the year in the Palm Islands group between Cairns and Townsville, sometimes at Charlotte Bay.
107 Mr Edwards and his wife sold the boat in 1974 or 1975. He maintained in evidence that he made a profit on its sale, the price then being something over $30,000.
108 Abalone was still his main source of income, the prawn operation being regarded by him as something of a sideline. His evidence was that he disposed of the prawn boat on failing to obtain the issue of a South Australian authority in 1974, when the Department issued seven more prawn authorities. As will be seen, one of the elements of the claim which he now pursues is based upon his failure to obtain a South Australian prawn authority.
109 In February 1974 there was a shark attack on another abalone diver named Terry Manuel at Streaky Bay. According to Mr Edwards' evidence, Mr Manuel's shark attack caused Mr Edwards to take stock of his position and to consider whether he should be looking at "alternative ventures".
110 In February or March 1974 he moved with his family to Adelaide, where he leased a house, and bought the business known as the Red Garter Restaurant at Burbridge Road, Hilton.
111 At that stage, apart from running the restaurant with his wife, he flew backwards and forwards to Port Lincoln, still maintaining an abalone diving operation there. The restaurant business was carried on in partnership with his wife Suzette.
112 I am not satisfied that the restaurant business was profitable. When asked in evidence to state whether he could give any idea of the net profits derived from the restaurant business, Mr Edwards said that he had "no idea". Mr Edwards and his wife disposed of their interest in the restaurant business in about December 1974 It seems likely that he sold it for something less than he paid for it. His evidence was that he sold it for some $12,000.
113 Mr Edwards had had no previous experience with a restaurant business. When asked in evidence-in-chief what prompted him to get out of the restaurant business, his answer was, "It was driving us crazy. It was long hours, hard work. We were away from our children".
114 In 1975 Mr Edwards claims to have been the co-inventor of a motorised shark cage. He received a Federal Government grant from the Fishing Industry Research Trust Account Committee amounting to $12,500 to cover his research and development costs.
115 In fact, he eventually acknowledged in evidence that the invention was the product of a joint endeavour between him and a Mr Ellis. The grant retrospectively covered costs incurred in the development of the shark cage which he had met from proceeds of sale of the prawn trawler and of the restaurant business. The work on that project took Mr Edwards about nine months which very likely includes a period between March and July 1975 when he put in "nil" catch returns.
116 So that between the Red Garter Restaurant in 1974 and the shark cage project in 1975 he did very little abalone diving.
117 Mr Edwards says that once the project on the shark cage was finished, he used it all the time when he dived for abalone, and that he returned to that occupation, diving from the shark cage, until he left the industry. However, there was no evidence to suggest that he made any money out of the shark cage as a commercial development.
118 It was not long before Mr Edwards became involved in other business ventures.
119 In the late 1970s he bought a fresh fruit juice round involving the delivery of fruit juice to shops and households at Port Lincoln. His wife did the deliveries while Mr Edwards went on with his abalone diving. That business only lasted about a year. Again there is no evidence that he made anything of consequence from it.
120 It was in about 1979 that he parted from Suzette. Later they were divorced.
121 Mr Edwards had other business sidelines apart from those to which I have so far referred.
122 From about the mid-1970s he began to spend periods at Andamooka prospecting for opal. He bought a shack there. He would go to Andamooka for perhaps a week at a time, possibly three or four times a year. He admitted in evidence that he did not make any money from that business.
123 In 1979 Mr Edwards set up an exhibition in a long van. The van was specially built for the purpose and was 30 to 35 feet long. The rear 20 feet or so, which was in fact a shipping container, was fitted with glass viewing windows to house a white pointer shark and a giant squid. He built a demountable annexe to the side of the van in which other exhibits were housed, including the shark cage, a collection of scrimshaw and some diving equipment, together with items obtained from shipwrecks.
124 He exhibited the display at the Adelaide Show of 1979 and subsequently at the Melbourne Show and at some country shows in South Australia and Victoria.
125 The maintenance of the exhibit, which required constant refrigeration of the shark and the squid, was beset with many practical problems. Again there is no evidence which satisfies me that this was a profitable business.
126 In November 1980 Mr Edwards sold his abalone authority and surrendered his A-class fishing licence. By then he was living with another woman who became his second wife, Sandra Campbell.
127 After selling out of the abalone business Mr Edwards went fossicking for gold in Victoria. He went to Victoria with the witness Danny Thorpe. Mr Edwards acquired some suction dredges which he used in Victorian rivers. According to the witness Mr Thorpe the venture lasted only about two months. I accept Mr Thorpe's evidence that the gold which was recovered, and it appears that there was some small recovery of gold, was meant to be pooled. But Mr Edwards never paid him his share or gave him any of the gold which was found.
128 It is obvious that the witness Mr Thorpe was very antagonistic towards Mr Edwards, and I have been circumspect in evaluating Mr Thorpe's evidence. But I accept his evidence with respect to the gold dredging venture. I also accept his evidence that he had put some $12000 into the travelling shark show and that he asked Mr Edwards for his money back after he became aware that Mr Edwards had received money on the sale of his abalone business.
129 I accept Mr Thorpe's evidence that Mr Edwards has never to this day repaid him, and that Mr Edwards' response to the request for repayment after Mr Edwards had sold out of the abalone business, was "Look, I haven't got that money. It is all invested. What do you think I am, anyway, Father Christmas".
130 Mr Edwards' evidence was that he had made "tens of thousands of dollars" from the gold dredging in about 1980. He asserted, and the point was not challenged, that he did not have to declare earnings from dredging for gold in his income tax returns. Later there was some sort of inquiry by the Australian Taxation Office as to what his earnings might have been in the gold dredging business, but Mr Edwards said in evidence that he had "cleared all that up"
131 The two of them set off to Queensland and Tasmania, amongst other things looking for sites at which the travelling exhibition might have been displayed. It does not appear that he in fact exhibited it other than to the limited extent which I have indicated. Eventually he disposed of the shark and preserved the squid in formalin, in which state it has since been housed at the museum at Wallaroo.
132 When Mr Edwards and Ms Campbell journeyed to Tasmania, they came across a wine bar known as Nickleby's Wine Bar. Mr Edwards bought the business, which involved a lease of the premises, and renamed the business the Rum Barrel Bar and Bistro. This was situated in Sandy Bay at Hobart.
133 He purchased the business in February 1982. The two of them ran the business for about a year and a half. He sold out in 1983. He maintains that it was profitable while he was running it. I am not satisfied that it was.
134 He says that he bought it for roughly $82000 and sold out for $95000, but there is no corroboration of that assertion and I am not prepared to accept Mr Edwards' evidence alone as to that. Evidence of an accountant, Mr Wishart, indicates that Mr Edwards' tax returns do not disclose any substantial profits being derived from that business.
135 Mr Edwards married Ms Campbell in 1985. In about 1997 they parted and divorce proceedings were in train between them at the time of the trial.
136 After selling the Hobart business, Mr Edwards and his wife returned to Adelaide. This was in about 1993. He brought some Huon pine off-cuts with him from Tasmania, intending to utilise them in a business involving impressing pieces of Huon pine with nautical designs. He bought some equipment to do with the business, but never actually got it started.
137 In late 1989 Mr Edwards was working in a foundry in Portland, Victoria, when he apparently suffered a fractured wrist. This was in about 1989. He made a successful claim for worker's compensation and received weekly payments of compensation for some not inconsiderable period.
138 Either then or after that he took up residence with his wife in Hamilton, Victoria. It seems likely that after the payments of worker's compensation ceased he subsisted on Social Security payments. At all events, towards the mid-1990s he set up a consultancy known as Moonraker Research Group. He was assisted in doing so by a payment of some $5000 under a Commonwealth scheme known as the NEIS scheme. The business was some sort of fisheries consultancy. His proposal was to assist Aborigines and others.
139 He did some unpaid work which he described as providing "research data and assistance" to the Aboriginal and Torres Strait Islanders Commission. He agreed that it was part of his consultancy proposal "to assist fishermen in liaising with solicitors to take action against governments". He admitted in cross-examination that he had said in the application document:
"Moonraker Research Group will act as a bridge between interested parties in preparing relevant documents and bridging as required".
"A particular niche market currently exists within the South Australian fishing industry, in particular in respect of fishermen/government liaisons and in respect of fishermen/solicitor liaisons".
He said that he meant by that that fishermen had:
".... a lot of trouble explaining or dealing with governments or solicitors ... and they need assistance, they need people to type letters for them and write and put it in better form."
140 However, when asked straight out whether he held himself out as an expert "in suing the South Australian Government" he denied that that was so, and suggested that people approached him because they heard that he was suing the Government.
141 His assertions in that respect stand to be contrasted with the findings which I make later in these reasons under the heading "Making a Business of Litigation".
142 At all events, it was the taxation inquiry to which I have earlier referred which, according to Mr Edwards, took him to the public library where initially he started to look at the taxation legislation. For some reason, not clearly explained in the evidence, he also began to look at the fisheries legislation, commencing with the 1917 Fisheries Act.
143 I have explained at some little length the nature of the many and varied activities pursued by Mr Edwards since he first began to earn a living. His evidence was supported by very fragmentary records of his business activities. In particular, he has failed to supply, although under an obligation to make discovery of them if still in his possession, a number of income tax returns relating to the earlier years and financial statements which one would expect to be in existence, given the nature of the business which he has been operating.
144 He admitted to maintaining accounts with a number of banks, but made only fragmentary discovery of bank statements.
145 At the end of the day I was left with the clear impression that Mr Edwards has been selective in the discovery which he has made in this case. Records which it suited him to produce were forthcoming, but few records which were of detriment to him have seen the light of day at the trial.
146 The defendants retained an accountant, Mr Richard Wishart, to examine the financial records and such other information as they were able to furnish to him of the plaintiff's business activities. He was also given the loss report prepared by Mr Irving of Sims Lockwood & Partners upon the basis of which Mr Edwards formulated his claim for damages.
147 Apart from concluding that the income losses as calculated by Mr Irving could not be accepted, Mr Wishart gave some more general evidence based upon what was known of Mr Edwards' actual business activities to date.
148 I was most impressed with Mr Wishart, who is a highly qualified accountant with a great deal of experience with small business operations. I was struck by the depth of his investigation into the industries in which Mr Edwards' business activities have been concentrated.
149 In his report concerning Mr Edwards' financial affairs and in his evidence, he gives a sage and hard-nosed assessment of what the records and the known history of Mr Edwards' business activities suggest as to Mr Edwards' business acumen and the likelihood of him building up the empire which he claims he was prevented from creating by reason of the alleged wrongful conduct on the part of the defendants.
150 In particular, I accept the general conclusions expressed by Mr Wishart, which include the following observations:
"It is my professional experience that a very small proportion of people are prepared to seriously pursue, and make the personal sacrifices necessary, to generate wealth substantially in excess of their normal living requirements. Mr Edwards makes numerous claims relating to a number of different fisheries and refers to attempts to enter those fisheries at different times. I believe there is a serious doubt that all such claimed actions would have been pursued, particularly in respect of later claims if an intended earlier claim had been successful. It is natural that if a person seeking to exploit a business opportunity is thwarted, a second opportunity will then be pursued. It is much less likely that a second opportunity will be pursued if the first opportunity was secured and exploited. Mr Edwards claims, amount to the establishment of very substantial and diverse fishing operations. His actual fishing activities to 1980 give no indication that he would be able to organise and manage such a business operation. His actual business activities since selling out of the Abalone Fishery in September 1980 do not show him to be a successful businessman. I do not have a statement of his assets and liabilities, but on the basis of income earned, it would seem that Mr Edwards has either lost most of the money generated from the sale of his abalone interest, or it is invested in non-income producing assets. Apart from the sale of the abalone licence in 1980 and the sale of marine items to the national maritime museum in 1988 for $33,950, the most substantial monetary returns reflected in his income tax return are receipts from Social Security and wages ....." (emphasis added)
151 As for Mr Edwards claims that he would have bought up various fishing licences to enable him to create the business empire which he states he would have embarked upon, Mr Wishart comments:
"... I believe it is unlikely that they would have been granted to him and that it is also seriously questionable as to whether he could have arranged finance to purchase them on the open market."
152 In accepting that conclusion, I reject Mr Edwards' evidence as to his financial resources and the evidence of his witness Mr Vater, whom he proffered as a witness who would have been prepared to assist him with loans of capital.
153 Mr Murphy is 57 years of age. After leaving school he did not quite complete a diploma of chemical engineering. He gained employment in Melbourne, where he was brought up, as a contract draftsman. He pursued that occupation until the age of 27 when he went to Port Lincoln to live.
154 He had always had an interest in boats, in snorkelling, spear fishing and water pursuits. His brother Vincent ("Vin") had earlier embarked on a career as an abalone diver.
155 Mr Murphy joined his brother at Port Lincoln in about mid-1971 to turn his hand to abalone diving. By then he had tired of what he perceived as the confinements of office work as a draftsman. He began working for his brother as a sheller. Later in 1971, in time for the commencement of the cray fishing season, he bought a cray boat. His brother helped him with the financing of it, other moneys being obtained on a bank loan. Another person skippered the boat for him. Mr Murphy acted as deck-hand.
156 After the cray fishing season, Mr Murphy was engaged relief diving for his brother, and shelling. He then continued dividing his time between helping with his brother's abalone diving business and operating the cray boat.
157 His last season with the cray boat was between 1975 and 1976. During the intervening time he had also tried his hand at shark fishing, but this was not particularly successful.
158 In 1976 he sold the cray boat for $20000. By then he had paid off the loans from his brother and the bank. At that stage Mr Murphy was effectively operating independently from his brother under the business name Sunbeam Enterprises, but he still worked with his brother, helping his brother with the latter's business.
159 Mr Murphy assisted his brother by relief diving and shelling. This was his main living until he bought an abalone permit in his own right.
160 In 1978 or 1979 he started living with his partner Judy whom he married in October 1982.
161 Mr Murphy unsuccessfully applied for an abalone permit in his own right in 1976.
162 In 1980 Mr Murphy took up full-time relief diving. About then he spent some three months in North America and Alaska, spending some of his time looking at the abalone industry there, but he returned to Port Lincoln at a time soon after abalone authorities could be offered for sale. He began looking seriously for an authority which he could buy and operate on his own account.
163 Eventually he bought an authority for $115000 pursuant to an agreement dated 15 December 1980. Of the total purchase price of $115000, $10000 was attributed to an aluminium boat and other plant.
164 Mr Murphy began operating the authority immediately. He dived out of Sheringa Beach and Pt Drummond, selling his catch at Port Lincoln.
165 Although by that stage relief divers up to 21 days a year were permitted,[8] he rarely took advantage of that concession. He wanted to work as hard as he could for his own direct benefit in order to pay off the borrowings which financed his purchase of the authority. He had borrowed $50000 from his brother, mortgaged his house at Port Lincoln for about $25000 and left some money to be paid later to the vendor.
166 Mr Murphy traditionally fished for black lip abalone which he maintains threw less stress on his back, having regard to the difference in their usual habitat. He stated further that one reason why he concentrated on black lip abalone was that he suffered what he described as "a bubble sticking out of my eye - a nasty bend" when fishing at a depth of 85 feet. Subsequently he decided to confine himself to shallower water. He mainly dived 30 or 40 feet.
167 Mr Murphy bought a replacement boat in about mid-1981. He also bought a share in Shore Products, a processing company for abalone.
168 In about mid-1981 he formed a company, Sunbeam Fishing Nominees Pty Ltd, at a time when the abalone divers were lobbying hard for the right to own abalone authorities through a company.
170 Once the company and family trust structure was in place, Mr Murphy accounted for the proceeds of the operation of the abalone licence through the family trust.
171 Mr Murphy said in evidence that he worked hard at his business and dived for long, sustained periods because he "didn't know what the Fisheries Department would do next". He had a fear, for example, that the Fisheries Department might grant new licences which might have the effect of devaluing his own licence.
172 By then he was over 40 years of age. He had seen "good divers go to 50 years old", and he hoped to go to that age, with the idea of putting a diver in then full-time. He thought that he might then work as sheller to keep an eye on the fishing operation. He said in evidence:
"I loved the game but I was often heard to say if they could take the diving out of abalone diving, it would be a bloody good game."
173 Mr Murphy remained a member of the Abalone Divers' Association throughout the period he held his authority and operated it.
174 As was the case apparently with most abalone divers, the activity involved in diving and taking abalone threw unusual stresses on Mr Murphy's back. The divers wore heavy lead belts and lifted heavy containers of abalone. As well, there was the work involved in hitching the boat on the trailer to the truck.
175 Although Mr Murphy had suffered some back pains and discomfort before January 1983, it had not reached a level at which it was interfering with any of the activities with which he was involved.
176 On a day in January 1983 when he was doing some maintenance on his boat, he said that he lifted up the forward part of the frame of the boat trailer on which the boat was mounted in order to hitch it to the tow-bar of the truck. This was a manoeuvre which he had performed on many occasions. Although he was not aware of feeling anything at the time of the process, two or three hours afterwards he suddenly developed severe pain in the back. He said in evidence that he "couldn't move". His wife assisted him to the car and took him to Investigator Clinic where a doctor referred him on to a physiotherapist.
177 Eventually, with the assistance of a fibreglass back splint prescribed by a surgeon, Mr Fletcher, he was able to get back to diving, which, from the catch returns, appears to have been early in February 1983. He says he was fortunate in finding a big "hit" of abalone at a time when he had a relief diver, Mr Rex Bichard, with him.
178 By this time he was involved in trying to sell his licence. Indeed, he had commenced advertising it for sale even before the back incident.
179 I go into the detail of the circumstances surrounding his sale of the licence later in this judgment. For present purposes it is sufficient to note that he continued working the licence but with the assistance of a relief diver and subsequently the purchaser of his licence, a Mr Ken Bascombe.
180 A sale to Mr Bascombe was effected and Mr Bascombe took over Mr Murphy's abalone diving business in May 1983 for a price of $166000 for the abalone authority and items of plant, including his boat, at a further $16500, a total of $182500.
181 Mr Murphy had by then substantially paid off his brother, the bank and the other loans he had taken to buy the licence, so that most of the money derived from the sale came into his hands.
182 With the money which he received he bought some 25 acres at Byron Bay ($25000) and four blocks of land in Adelaide for approximately $15000 each. He sold his house at Port Lincoln and moved to Adelaide in 1984. He bought another house at Belair.
183 Mr Murphy then attempted to earn a living by buying and selling land and entering the building trade, but this venture was not profitable.
184 In January 1986 he bought a 48 foot fishing boat with the intention of fishing for tuna off Ulladulla on the New South Wales coast. He rented a house at Ulladulla. By then he had to borrow most of the money to buy into the boat, with its concomitant licence, for about $115000. He operated that business out of Ulladulla for about two years in partnership with Mr Max Stewart.
185 Although the returns from the tuna fishing operation were not substantial, he made a significant profit on resale of the boat when he sold out of that business in 1986.
186 He then had enough money to buy a house in Adelaide for $90000 in cash, and in July 1988 he went back to abalone shelling. After shelling for a year or two, he discussed with Trevor Dorward buying a Central Zone licence (there was one on offer at the time from a Mr Pennington for $900000). That did not proceed, as apparently Mr Dorward was not prepared to join in with the proposal.
187 Mr Murphy then made his living from a combination of investments and Social Security.
188 In 1999 he and his mother sold their suburban houses and together bought a 20-acre property in the Hills.
189 Mr Murphy has a son now aged 16 and a daughter now aged 14. The son is at TAFE and the daughter is still at school.
190 Mr Wishart conducted a similar exercise with respect to what was known of the financial affairs of Mr Murphy, as he did with respect to Mr Edwards. His opinions and conclusions are set out in his report.
191 Apart from some criticisms which he makes as to the calculation of alleged income losses performed by Mr Murphy's accountant Mr Staker, he makes some general comments as to Mr Murphy's record with respect to business ventures.
192 He comments that interest which could have been earned on the realisation of the capital appreciation of the value of the abalone licence when he came to sell it in 1983:
"... would have provided Mr Murphy with an above average income. That he subsequently lost this money in various alternate ventures is of little consequence, except that it demonstrates that he was prone to change on a regular basis and therefore unlikely to have maintained his fishing operations until the present day. ... Mr Murphy had suffered substantial losses from real estate dealings in 1985 and 1986, and it is doubtful that he could have raised additional moneys if required for a more extensive fishing operation in South Australia, even if the relevant licence had been obtainable." (emphasis added)
194 Initially both plaintiffs were legally represented, and statements of claim were drawn up by their solicitors and settled by counsel. Ordinarily one would look, at least in the first instance, to the statement of claim in each case to determine the nature of the claims.
195 However, before the close of the pre-trial phase of the cases, both Mr Edwards and Mr Murphy personally took over the conduct of the proceedings. Thereafter a number of amendments were made to the statements of claim which were drawn less expertly.
196 Furthermore, requests by the defendants for particulars of the plaintiffs' claims were eventually dealt with on the footing that rather than attempt further complicated amendments to the pleadings, the defendants would be entitled to treat the reports from the accountants who assisted both plaintiffs with the formulation of their claims, as a particularisation of them, at least as to matters of quantification, and inferentially to identify the nature of the business operations which the plaintiffs allege they would have conducted had it not been for the alleged wrongful conduct on the part of the defendants.
197 In any event, it is pertinent to point out that, irrespective of the deficiencies in the pleadings arising by reason of the fact that for most of the course of the proceedings the plaintiffs were unrepresented, pleadings generally have a diminishing role to play as the case, and I speak of any civil cause, proceeds through the course of the trial. I will expatiate a little on the varying role which pleadings fulfil as the case progresses, as it is commonly not fully understood.
198 Before the commencement of the hearing, the pleadings will have served the dual purposes of alerting the opposing party to the nature of the claim or defence, and of defining the issues. During the course of the hearing, the pleadings serve the additional purpose of confining the scope of the evidence to be adduced, in the sense that, to be relevant and admissible, evidence must relate to the issues as defined in the pleadings.
199 However, that latter observation is subject to the qualification that other issues may arise during the course of the hearing which become the real issues in the case, or additional issues, and which may supplement, displace or render irrelevant the formal statement of issues to be drawn from the pleadings.
200 In any event, the actual course of evidence might, for one reason or another, run outside the scope of the pleadings. This is a common enough circumstance.
201 At the end of the day, when all the evidence is in, the case must be determined on the body of evidence as it then appears, and not on the pleadings.
202 Furthermore, generally speaking, it is not necessary for the parties to plead matters of law or to identify specific causes of action. The court must give such relief as a party is entitled to on the basis of the evidence as it stands at the conclusion of the trial. This is subject to the qualification that, generally speaking, the court would be disinclined to countenance making an award in favour of a plaintiff on a cause of action which, if it had been identified at an earlier stage, might have altered the course of the trial, more particularly with reference to the nature of the evidence which might have been adduced.[9]
203 With those observations in mind, while I will refer to the claims as they appear in the statements of claim, I also make allowance for the fact that it became clear from the course of the evidence presented in each case, more particularly that of Mr Edwards, that the basis of his claim was not fully explained in the formal pleadings. Particularly bearing in mind the fact that he was unrepresented, I have endeavoured to make every allowance for this and to address the substance of his claims, whether they were adequately identified in the formal statement claim or not.
204 On the other hand, during the course of the trial I refused one or two applications by both Mr Edwards and Mr Murphy formally to amend their statements of claim, for reasons which I explained at the time, largely because they would have introduced a new claim or a new basis for an existing claim in circumstances which would have been unfair to the defendants.
205 Against the background of those observations, I will endeavour to summarise the salient features of each claim.
206 I include under this heading the claim by Deep Sea Ark.
207 As was the case with all of the abalone fishermen, during the whole of the time he was in the industry Mr Edwards held an A-class fishing licence, and separately a licence to employ another person in the business. It was the employee who managed Mr Edwards' boat while he was in the water, including the supply of air, and who did the shucking of the abalone when it was brought on board.
208 I have already referred to Mr Edwards' unsuccessful attempt in 1974 to obtain the issue of a prawn authority, and to his earlier brief incursion into the abalone fishing industry in Western Australia.
209 When Mr Edwards sold out his interests in the abalone fishing industry in 1980, he surrendered his A-class fishing licence and did not thereafter engage in the business of fishing, whether for abalone or for any other fish.
210 It is common ground that throughout the relevant period the Fisheries Department and the director defendants administered the abalone fishing industry, and indeed other managed fisheries, in accordance with what has been described as the "owner/operator" policy. The essential feature of that policy in its application to the abalone fishing industry was that, with certain exceptions which I will explain in due course, only the person licensed and authorised to take abalone could do so, that is, only that person could dive for abalone to the exclusion of the person engaged under the licence to employ. The employee was permitted to perform all of the necessary above-water operations, including shucking, but not to dive.
211 Another manifestation of the owner/operator policy in its application to the abalone fishery was that the Department, including the director defendants, regarded the licence or authority which authorised the taking of abalone as personal to the holder in the sense that it was the holder who was to have control of and who was to derive the benefits from its operation. Mr Edwards alleges that not only was it laid down by the director defendants that the holder was to be a natural person, but he or she was not permitted to hold the licence pursuant to a trust or similar arrangement by which the benefit of the fishing operation would enure to Mr Edwards.
212 Against that background, Mr Edwards and his company advance various claims. For present purposes the main elements may be summarised in this way.
(a) The director defendants acted wrongfully in refusing to allow persons employed under a licence to employ to dive for abalone, and in refusing to allow abalone authorities to be held in trust for another person, or by other means pursuant to which Mr Edwards or his company might have secured the benefit of the operation of abalone authorities by others.
(b) The dismissal of his application for a prawn boat authority in South Australia in 1974 was wrongful.
(c) Mr Edwards' surrender of his A-class fishing licence when he left the fishing industry in 1980 was mandated by wrongful policies adopted by and applied by the Department, and he should have been entitled to retain his A-class fishing licence.
(d) If he had done so, he would have entered the tuna fishing industry, more particularly he would have fished for sushimi quality tuna in Commonwealth waters, his belief being that a prerequisite for that was the holding of a South Australian A-class fishing licence as well as the necessary Commonwealth licence.
(e) The refusal by the Fisheries Department to countenance the issue of an abalone authority in the name of a corporation was wrongful and prevented his company, Deep Sea Ark, from owning and operating an abalone authority for his benefit.
(f) His failure to renew his Western Australian fishing licence was in response to wrongful assertions by the director defendants that he could not hold such a licence and at the same time retain his South Australian abalone authority.
213 Mr Edwards claims that had it not been for the various matters to which I have just referred, he would have remained in the industry, held abalone authorities indirectly through trusts, through his company and in more than one of the abalone fishing zones in South Australia, and at the same time held, directly or indirectly, fishing licences in Western Australian which would have enabled him to conduct a parallel abalone fishing business in that State.
214 As well, he would have had the benefit of the operation of a prawn authority in South Australia, and conducted a tuna fishing business based in South Australia.
215 Mr Edwards claims that the directions, representations and other conduct of the director defendants underlying the matters to which I have referred, in their impact on him, constituted misfeasance in public office. Alternatively Mr Edwards asserts that the various statements which the director defendants or officers of the Department acting on their behalf and at their direction made in support of the owner/operator policy and in the manifestations of it of which he complains, amounted to negligent mis-statements.
216 In summary, Mr Edwards' claims are multi-faceted. In short, they boil down to an assertion that wrongful acts on the part of the defendants deprived him of the opportunity to operate a large fishing undertaking which would have involved a number of elements incorporating the diverse fishing businesses which I have described.
217 As for the quantification of the claims, Mr John Irving, a partner in the firm of Sims Lockwood & Partners, Chartered Accountants, furnished a report and gave evidence. His opinion was given on an assumption that all of the business operations which Mr Edwards claims he was prevented from embarking upon had been carried out and were still being conducted. According to his calculations, to the date of his report given in March 1998, the losses incurred by Mr Edwards and his company, including interest which it is suggested he would have earned on the surplus profits in his hands, would have amounted to a figure of the order of $46 million, including capital losses said to be attributable to "premature" relinquishment of his licence and authority.
218 Mr Murphy carried on a business in his own right as a professional abalone diver between December 1989 and June 1983.
219 As originally formulated, Mr Murphy's Statement of Claim made assertions substantially replicating those made by Mr Edwards with respect to the alleged loss of an opportunity to derive benefits from employing divers to take abalone on his behalf. However, during the course of the hearing Mr Murphy abandoned any claim in that respect, calculated up to the time when he left the industry in 1983, although he maintained the claim for the period thereafter.
220 His claim was couched in somewhat similar terms to that pursued by Mr Edwards, namely, that by reason of the policies formulated and applied by the director defendants, he was deprived of the opportunity, rather than selling out of the industry, of maintaining his abalone fishing business by either employing somebody on his behalf to do the diving, or sharing the diving with him, or by making use of a trust or other arrangement by which his authority would be held by another for his benefit.
221 As in Mr Edwards' case, his claim is formulated on the same legal basis, that is, misfeasance in public office, or alternatively, negligent mis-statements.
222 In the result, Mr Murphy claims for the loss of income which he alleges he would have derived by reason of the operation of his licence during the intervening period between June 1983 and now, together with the difference between the capital value of his authority at the time he disposed of it in June 1983 and what it would be worth now.
223 A quantification of Mr Murphy's claim was effected by a chartered account, Mr Greg Staker of Greg Staker & Co. He offered the view that on the assumptions which he had been asked to adopt, and projecting his calculations up to June 2000, Mr Murphy's loss of income amounted to a figure of the order of $3 million, to which must be added a further alleged loss attributable to what it was suggested would be the accretion in the capital value of the licence and authority if they had remained in Mr Murphy's hands.
224 The defences are much the same in substance, although different in detail, in both cases.
225 While there is no denial of the owner/operator policy and of the fact that the plaintiffs were precluded by reason of the application of that policy from employing persons to dive for them, it is pleaded, in the first place, that in implementing the policy in that respect the director defendants acted bona fide and in accordance with the discretions given to them under the legislation. It is further pleaded that the director defendants honestly and reasonably believed that as a matter of law the licence to employ did not authorise the employee to dive and take abalone.
226 The director defendants plead that they "do not know and/or cannot recall particular occasions upon which representations of the kind asserted in the statements of claim as having been made by the defendants with respect to the owner/operator policy might have been made", and assert that even if the representations were made, they were not made in circumstances which exposed the defendants to any liability either by way of misfeasance in public office or negligence.
227 With respect to Mr Edwards' claim relating to corporate ownership, the defendants deny that a corporation might have lawfully held an abalone permit or authority during the period in question.
228 As for Mr Edwards' claim with respect to his application for a prawn authority, the defendants deny that it was assessed other than in accordance with proper procedures.
229 As for his assertion with respect to the surrender of his A-class fishing licence, the defendants assert that no relevant representations which might have induced that action on Mr Edwards' part were made by the director defendants, and that even if they were, that it did not have the consequences which he suggests.
230 As to both claims, the defendants assert that both plaintiffs left the abalone fishing industry for reasons unconnected with any conduct on the part of the defendants.
231 I do not at this stage attempt to summarise the claims for extension of time and the defences to those claims. It is best to address them discretely when I come to deal with that aspect of the matter.
232 From the start, commercial fishing for abalone has been controlled by the Fisheries Department, at first under the Fisheries Act 1917 and subsequently under the various Acts which have replaced it following its repeal in 1971.
233 In this summary, I do not deal with provisions relating to recreational fishermen, or other provisions not relevant to the issues which arise in these proceedings.
234 It may be assumed that where emphasis by use of italics appears, the emphasis is mine.
A. THE FISHERIES ACT 1917[10]
235 The Act had separate provisions dealing with licences on the one hand, and registration of boats on the other.
236 The licence was of general application; under s 53 it was an offence to take any fish or oysters "without a licence in that behalf".
237 Under s 13(1), licences to take fish and oysters were to be issued on application to that end, and payment of the fee. The licence was a yearly licence (13(2)), provided that every licence was to expire on the last day of November next after it is issued.
238 There was no procedure for renewal, strictly understood, although a licence holder could, at any time up to 60 days before the expiry of his or her licence, obtain another licence which was "deemed to be issued upon the date of expiry of the current licence" (s 13(2a)).
239 Section 13(4) contemplated that a licence could be issued to a body corporate, provided that it was a "body corporate which is established under and subject to the laws of some part of His Majesty's Dominions and which has its principal place of business in some part of His Majesty's Dominions".
240 Under s 14, a licence issued to an individual "shall be sufficient for the person named therein as licensee, and also for his wife or for one member of his family under the age of 21 years whilst his wife or such member is working with the same plant as such licensee".
241 A licence to employ another person to "take fish or oysters" might be issued on application to the Chief Inspector. The employee's licence was issued to the principal licence holder. The employee's licence was "deemed a sufficient licence to take fish and oysters for any one person employed as aforesaid by the person to whom the licence is issued" (s 14a(3) and (4)).
242 The scheme for registration of boats was set up under Division II, comprising s 16. This provided that no person might "take any fish or oysters for sale" in any boat, or use any boat to take fish or oysters for sale unless it was registered and marked in accordance with the Act and Regulations.
243 Pursuant to s 16(4), the ownership of a registered boat might be transferred.
244 The regulation-making power was to be found in Part VI (s 59), and was expressed widely.
245 The Fisheries Act was amended by the Fisheries Act (Amendment) Act 1967 (No 52 of 1967) (proclaimed into operation as from 1 November 1967) (see Gazette 2 November 1967, page 1963) to set up a permit system for the taking of crayfish. Permits might only be granted to holders of licences (new s 15c).
246 That amendment was short-lived. It was repealed by the Fisheries Act (Amendment)Act 1969 No 44 of 1969 (which came into affect on assent on 20 November 1969) which substituted a more elaborate scheme for the issue of crayfish permits.
247 There was a number of regulations passed under the 1917 Act before it was superseded by the 1971 Act as from 1 December 1971. There were, for example, regulations dealing with cray fishing (the Control of Cray Fish Regulations 1968, operative from 1 February 1968).
248 Specific attention to abalone fishing was first given in the Preservation of Abalone Resources Regulations 1968 which came into force on 22 February 1968.
249 The regulations introduced a permit system (reg 4(a)) proscribing the taking of abalone by diving or by any other method other than pursuant to an abalone permit.
250 An abalone permit holder could not take abalone other than from a fishing boat registered under the Act. But the permit was not attached to a particular boat.
251 Permits were issued in the discretion of the Chief Inspector of Fisheries, who might "in addition to any other matters indicated by the scope and purpose of the Act" and regulations take into account whether or not the applicant was a fit and proper person to hold such a permit (reg 7(d)(i)).
252 The taking of abalone pursuant to the permit was governed by reg 5 which provided:
"An abalone permit shall, subject to the Act, entitle the holder, or one person authorized from time to time by him (but not both at any one time) by diving, to take abalone, in abalone waters, but only so long as all conditions subject to which the permit has effect are complied with."
253 Certain conditions were prescribed in the regulations as conditions attaching to all abalone permits. They related largely to measures designed to control the taking of under-sized abalone (see reg 8(b)).
254 The Chief Inspector had the power to cancel a permit if satisfied that the holder had committed an offence or supplied false information (reg 11(b)).
255 A new set of regulations dealing with abalone taking was gazetted on 15 July 1971. Those regulations were in force only for some five months until the 1971 Act came into operation on 1 December 1971, under which new regulations were passed operative from the same date.
256 The July 1971 regulations introduced a system of zoning: see reg 7(1).
257 The previous provision (under the 1968 Preservation of Abalone Resources Regulations, reg 5) permitting an authorised person, in addition to the permit holder, to take abalone, was not continued. It was replaced by a provision which allowed a person nominated by the permit holder to be authorised during a period of illness or incapacity of the permit holder to take abalone for periods not exceeding 30 days. The regulation read:
"11(1) Where the Chief Inspector is satisfied, by production of a medical certificate, that a permit holder is ill or incapacitated, he may authorize a person nominated by the permit holder to take abalone during the period of the permit holder's illness or incapacity. (2) Any person so authorised shall, for the period of such authorization, be deemed to be the holder of the permit held by the permit holder who is ill or incapacitated. (3) The duration of the period of such authorization shall be as determined by the Chief Inspector, provided however, that such period shall not exceed 30 days."
258 A new scheme of regulation of the industry as a whole came into operation when the Fisheries Act 1971 was proclaimed, effective from 1 December 1971.
259 A central feature of the new scheme under the 1971 Act was the division of licences into class A and class B (s 28).
260 An A-class fishing licence was granted if the Director was satisfied that applicant intended to carry on the business of fishing for profit "as his principal business" (s 30(1)(a)).
261 On the other hand, a B-class fishing licence was to issue upon the Director being satisfied that the applicant intended to carry on the business of fishing for profit "regularly as a seasonal or part-time business".
262 Pursuant to s 31 of the 1971 Act, a body corporate could, with the consent of the Minister, be granted a fishing licence, provided that the requirements of that section, which are not relevant for present purposes, were met.
263 The question of employment by the holder of a fishing licence of another person to take fish is dealt with in s 32, which provided:
"32(1) The holder of a fishing licence shall not- (a) employ any other person to take fish unless he (the holder of the licence) also holds a licence authorizing him to employ persons to take fish; or (b) employ more persons to take fish than the number stated in such a licence held by him. ............. (2) Every licence to employ persons to take fish shall contain a statement of the maximum number of persons who may be employed pursuant to the licence. (3) The holder of a fishing licence shall not be required to hold a licence to employ by reason only of the fact that he employs a person who holds a fishing licence and in computing the number of persons employed, an employee who holds a fishing licence shall not be taken into account. ............."
264 Pursuant to s 34, the Director might refuse an application for a licence if the applicant was, inter alia, not a fit and proper person, or if the refusal was necessary "for the purpose of giving effect to any administrative policy approved by the Minister for the conservation of any species of fish or the proper management of any fishery".
265 Pursuant to s 42 of that Act, the Minister might grant a special permit to any person to take fish during such period in such waters and on such terms and conditions as might be specified in the special permit.
266 Registration of boats was perpetuated in the 1971 Act which provided (s 16) that a person was not to use a boat for the purpose of taking fish for sale or processing unless the boat was registered.
267 Section 19 contemplated that the owner of a registered boat might transfer it, in which event within one month after the transfer, the owner was obliged to give notice of the transfer to the Director (s 19(1)).
268 By the Fisheries Act Amendment Act 1976-1977 (Act No 27 of 1977), which came into operation on 26 January 1978, s 34 was amended by substituting the following provision:
"34. (1) The Director may- (a) grant an applicant a fishing licence or licence to employ; or (b) refuse an application for a fishing licence or licence to employ. (2) The Director shall not grant an applicant a fishing licence or licence to employ unless he is satisfied that the granting of that licence will not prejudice the proper management of the fishery in relation to which the relevant licence is applied for."
269 Section 34 was again amended by the Fisheries Act Amendment Act 1980 (No 41 of 1980) which came into force on 27 June 1980.[11] This provided, inter alia, for a system of review of a decision of a Director refusing an application for a licence of either kind. A request for a review was by application to the Minister.
270 A wide regulation-making power was conferred on the Governor pursuant to s 36 of the 1971 Act.
271 From the commencement of the 1971 Act, that is from 1 December 1971, new regulations were proclaimed under it.
272 The first set of regulations, namely the Fisheries (General) Regulations 1971 dealt, inter alia, with registration of boats. It set out a procedure to be followed by the owner of the registered fishing boat on its transfer, or on the transfer of the right to use it.[12]
273 A second set of regulations comprised the Managed Fisheries Regulations 1971, which, inter alia, perpetuated the permit system for the taking of abalone.
274 Reg 7 of the Managed Fisheries Regulations proscribed the taking of abalone unless the holder of the fishing licence had obtained a permit from the Director of Fisheries to do so.
275 Separately, the Managed Fisheries Regulations 1971 made provision for the grant to the owner for the time being of a boat of an "authority with respect to that boat" (reg 9).
276 The original form of the regulations provided that it was unlawful to take prawns or lobsters unless from the boat for which an authority to that end had been granted (reg 5). There was no requirement for an authority to take abalone. Both the permit and the authority were to be in the form of an endorsement on the applicant's fishing licence (reg 8).
277 It follows that in their original form, the Managed Fisheries Regulations 1971 provided for the taking of abalone pursuant to a permit endorsed on a fishing licence, whereas the taking of prawns or lobsters was regulated by an authority granted with respect to the boat from which the taking took place.
278 The 1971 regulations introduced other provisions specifically relating to abalone fishing (regs 31-35 inclusive).
279 Key features of those provisions are to be found in regs 31 and 35 which were as follows:
"31. Notwithstanding the provisions of paragraph 12 the Director shall not grant or renew an application for a permit to take abalone unless he is satisfied, by production of a medical certificate or otherwise, that the applicant is medically fit to dive. .............. 35. (1) Where the Director is satisfied by production of a medical certificate that a permit holder is ill or incapacitated, he may authorize a person nominated by the permit holder to take abalone during the period of the permit holder's illness or incapacity. (2) Any person so authorized shall, for the period of such authorization, be deemed to be the holder of the permit held by the permit holder who is ill or incapacitated."
280 The 1971 Managed Fisheries Regulations were amended by regulations made on 9 November 1972.
281 Amongst other things, the amending regulations inserted a new regulation:
"21A. No person shall be the holder of more than one of the authorities or permits listed hereunder:
282 Significant changes to the regulations were made by further amending regulations passed on 28 August 1980.
283 The first significant change was that the taking of abalone was to be regulated by the issue of an authority rather than a permit. The new abalone authority was one of the forms of authorities attached to a boat. This equated the regulatory system with that which had, for some time before then, applied to prawns and lobsters.
284 Reg 5, which previously applied only to boats used for the purposes of taking prawns or lobsters was amended to include the taking of abalone, so that it then read in part:
"5. A person shall not use a boat for the purpose of taking abalone, prawns or lobsters unless: (a) she is a boat for which an authority has been granted; and (b) she is under the immediate control of a person holding a Certificate of Competency; and (c) she is being used in all respects in accordance with the conditions of the authority."
That regulation was to be read together with reg 9:
"9. (1) The owner for the time being of a boat may apply to the Director for the grant to him of an authority with respect to that boat. (2) An applicant for an authority or permit shall pay the prescribed fee."
285 So it was that instead of an abalone permit being the prerequisite for the authorised taking of abalone, the regulation of the taking of abalone became a matter controlled by the grant of an authority attaching to a boat.
286 That change was to be read against the repeal of reg 35 of the 1971 Managed Fisheries Regulations, which was replaced by the following:
"35. (1) The Director, by endorsement made upon an abalone authority, may authorise any person of good character and repute who has been nominated by the holder of an abalone authority and is fit for the purpose of acting as a replacement for the holder of the abalone authority during the period specified in the endorsement, to take abalone in accordance with the abalone authority in lieu of the holder of the abalone authority for any period or periods not exceeding in the aggregate 21 days during the currency of the abalone authority and any person so authorised shall be entitled to take abalone during the period of authorisation as if he were the holder of the abalone authority. (2) Except as provided for by subregulation (3) of this regulation no authorisation pursuant to subregulation (1) of this regulation shall be valid unless it is obtained in advance of the period for which the authorisation is required. (3) In the event that it is impractical for the holder of an abalone authority to obtain an authorisation pursuant to subregulation (1) of this regulation in advance of the period of authorisation it shall be sufficient for the holder of the abalone authority to obtain prior authorisation by telephone from the Director or his delegate and to present the abalone authority for endorsement by the Director or his delegate within 48 hours of receiving any such telephone authorisation. (4) Any person whose name is endorsed upon an abalone authority pursuant to subregulation (1) of this regulation shall observe and perform during the period specified in the endorsement all the obligations on the part of the holder of the abalone authority to be observed and performed and contained in the fishing licence held by the holder of the abalone authority and the abalone authority upon which his name is endorsed. (5) Except as provided for by this regulation:- (a) no person shall be entitled to take abalone in accordance with an abalone authority or to dive from an authorised boat except the holder of the abalone authority; and (b) the holder of an abalone authority shall not cause, suffer or permit any person to take abalone or to dive from the boat in respect of which his authority is granted."
287 The regime as it stood under the 1971 Act and the regulations made under it, including the 1980 regulations to which I have referred, substantially remained in place until the Fisheries Act 1982, which supplanted the 1971 Act.
288 The 1980 amending regulations also provided, in a rather cumbersome and indirect way, for a de facto system of transfer of abalone authorities. They did so by means of a new provision, Reg 35AA.
289 The regulation permitted the owner of the authority to apply to cancel the authority, contemporaneously with an application for the issue of a new authority to a person who was effectively the transferee of the authority, all pursuant to what might be described as a contract of sale.
"35AA. The holder of an abalone authority who is required by the provisions of any contract to apply to the Director for the cancellation of the abalone authority or to refrain from making an application to the Director for the issue of a further abalone authority and any person who makes an application to the Director for the issue of an abalone authority in reliance upon, or as a consequence of, a holder of an abalone authority making application to the Director for the cancellation of his abalone authority or refraining from making an application for the issue of a further abalone authority in compliance with the provisions of any contract shall lodge with the Director within 28 days of the date of any such contract or at the time of making any such application (whichever shall be the sooner) a statutory declaration having annexed to it true and full copies of any note or memorandum in writing evidencing the contract and specifying separate amounts in respect of: (a) the value of the obligation on the part of the holder of the abalone authority under the contract to apply to the Director for the cancellation of the abalone authority or to refrain from making an application to the Director for the issue of a further abalone authority; (b) the value of any vessel transferable under the contract; and (c) the value of any equipment transferable under the contract."
291 This Act, which repealed the Fisheries Act 1971-1980, was not proclaimed into operation until 1 July 1984. As both Mr Edwards and Mr Murphy had left the fishery by then, I give only a brief outline of its provisions. Some understanding is necessary in view of the ongoing nature of the plaintiffs' claims.
292 Amongst other things, the 1982 Act, which is still in force, gives expression to various Commonwealth-State arrangements which had been developed over preceding years (s 6).
293 Part IV of the Act is headed "Regulation of Fishing etc". Fishing, for the purposes of a trade or business, is regulated by the grant of a licence "in respect of the fishery". By s 5(1), "fishery" means a class of fishing activities declared by regulation to constitute a fishery for the purposes of the Act.
294 Boats are to be registered under s 34(2) if used for the purpose of a fishing activity, registration being effected by endorsement of the licence held by the person in whose name the boat is registered. Furthermore, when used for fishing, the registered boat must be in the charge of a person who is "registered by endorsement of the licence as the master of the boat that may be used pursuant to the licence" (see s 34(2)(b)).
295 Section 36 provides that an application for a licence is to be determined by the Director "subject to and in accordance with the provisions of the Scheme of Management prescribed for the fishery". Furthermore, registration of a boat is not to be granted by the Director unless the applicant is the holder of a current licence.
296 Likewise, registration of a person as the master of a boat may only be given in favour of an applicant who is the holder of a current licence. Registration of the boat is effected by endorsement of the licence in relation to which the registration was granted (see s 36(4)).
297 Under s 38 of the Act, no licence is transferable except "where the Scheme of Management prescribed for a fishery provides that licences, or class of licences, in respect of the fishery are transferable ..." (see s 38(2)), in which event a transfer may be effected with the consent of the Director.
298 The Director's consent is predicated upon his or her satisfaction as to the matters "prescribed by the Scheme of Management" (see s 38(3)).
299 Regulations known as the Scheme of Management (Western Zone Abalone Fishery) Regulations 1984 to take effect on 1 July 1984 were gazetted. Under reg 3(4) no person shall at the same time:
"(a) be the holder of more than one fishery licence; (b) be the holder of a fishery licence and have an interest in another fishery licence; (c) have an interest in more than one fishery licence."
300 Furthermore, in determining eligibility for a licence, the Director shall have regard to the policy of "one person, one licence" (reg 13).
302 The number of abalone licences in the Western Zone is capped at 23 at any one time (see reg 8(1)). Furthermore, under reg 8(2) "the Director shall not grant a licence in respect of the fishery to a body corporate or to more than one person". Licences are to be issued by a tender process.
303 Reg 23 provides that a licence in respect of the fishery may be transferred with the consent of the Director.
304 The 1982 regulations were revoked by the Scheme of Management (Abalone Fisheries) Regulations 1991 which came into operation on 27 June 1991. Those regulations provide that no other licence is to be granted other than a licence in force under the revoked regulations immediately before the commencement of the new regulations (see reg 6(1)).
305 Licences might be transferred (se reg 9). A "catch quota system" was introduced (see reg 13).
306 Although further amending regulations have since been introduced, I do not attempt to summarise them, as they are not relevant to these proceedings.
307 There were no less than sixteen questions formulated for the consideration of the Full Court by way of the special case. Given that at that stage the only identification of factual issues was in the pleadings, to the extent that answers given were predicated upon assumptions based upon factual assertions in the pleadings, the answers cannot bind me where I have, as trial judge, reached different conclusions of fact.
308 Rather than attempt what could become a tedious dissection of each of the questions and answers, I will explain the conclusions reached by the Full Court in the context of the issues raised at the trial.
309 As I have explained, the Preservation of Abalone Resources Regulations 1968 which came into force on 22 February 1968 grafted onto the licence provisions under the 1917 Act a permit system relating specifically to abalone fishing. The permit system was perpetuated under the Preservation of Abalone Resources Regulations 1971 which were in force for about five months until new regulations were passed, operative from the coming into effect of the 1971 Act at the beginning of December 1971.
310 The Full Court held that the right to fish conferred on a person to whom a fishing licence had been granted under the 1917 Act was, pursuant to the statute, of a general nature and could not be abrogated or confined by the imposition of a separate permit system by regulation, any regulations to that end being beyond the regulation-making power conferred on the Governor by s 69 of the Fisheries Act 1917.
311 As it was put by Olsson J in the course of his reasons for judgment in the Full Court (with which relevantly I and Duggan J agreed):[13]
"On a fair reading of the statute it seems to me that there was no warrant for concluding that the general regulation-making power was intended to permit a significant whittling down (let alone a virtual abrogation) of statutory rights expressly conferred elsewhere in the enactment, save to the extent that the statute itself, in express terms envisaged that that would be the case. Parliament rendered it abundantly clear, in s 59 and other relevant sections, that this could be done in certain, clearly articulated, respects. To suggest that, quite apart from those aspects, the general fishing rights stemming from a commercial fishing licence could seriously be emasculated by the imposition of an additional permit (or secondary licensing system) is not logical and leads to a lack of cohesiveness in the statutory scheme itself. A more general right to anchor (sic) regulations necessary and convenient for the proper management of fisheries cannot, in my opinion, reasonably be construed as denying that which is expressly authorised by other specific licensing provisions in the statute."
312 I should point out that the validity of the Preservation of Abalone Regulations of 1968 and 1971, insofar as they erected an abalone permit system, was not directly called into question in the sixteen questions which were posed for the consideration of the Full Court. Neither do I think that it was necessary to pronounce on the validity of the abalone permit system in order to answer those questions. That is so, except that insofar as the validity of the so-called "owner/operator policy" was raised in the case stated, and insofar as the owner/operator policy was applied and administered with respect to abalone permit holders, I suppose that it was proper to have regard to the validity of the permit system itself.
313 As will be seen, the fact that the permit system under the Preservation of Abalone Regulations of 1968 and 1971 was held by the Full Court to be invalid, does not have any significant impact on the considerations relevant to the determination of the plaintiffs' claims for damages for misfeasance in public office or negligent mis-statement.
314 Furthermore, no question could be raised as to the validity of the system which replaced the permit system, after the enactment of the 1971 Fisheries Act. The regulation-making power conferred on the Governor pursuant to s 36(1) of the 1971 Act specifically extended to the making of regulations requiring fishermen "to hold a permit in addition to a fishing licence" (s 36(2)(a)), and separately required persons using boats for the taking of fish "... to hold authorisation certificates in respect to boats so used" (s 36(2)(b)).
315 In view of those provisions, not surprisingly, no attack was launched on the validity of the Managed Fisheries Regulations made under the 1971 Act which obliged the holder of a fishing licence to obtain a permit to take abalone, or the separate provisions requiring the owner for the time being of a boat to obtain an authority with respect to it.
316 The Full Court had some difficulty in identifying the content of this policy, although its existence did not seem to be in doubt.
317 Lack of clarity over the content of the policy was a product of the fact that it was never written down and formally adopted as a policy by the Minister or the Department. Furthermore, its application varied somewhat as between the different fisheries, for example, as between the prawn fishery and the abalone fishery.
318 Given the fact that the case stated necessarily fell to be determined ahead of trial, the Full Court was obliged to consider the "owner/operator policy" in the terms in which it had been pleaded in the defence.
"9.1 Was the 'owner/operator' policy pleaded in the defence a valid administrative policy approved by the Minister for the conservation of any species of fish or for the proper management of any fishery within the meaning of s 34(2) of the Fisheries Act 1971 (SA) or otherwise a lawful policy pursuant to prerogative powers retained by the Crown with respect to fisheries?" (emphasis added)
"In so far as such a policy may have been formulated, it was not a valid administrative policy approved by the Minister, or otherwise a lawful policy."
In their defence[14] the defendants admitted that they:
"... gave directions to the holders of abalone permits and authorities, as the case may be, that, subject to the relief diver provisions in force from time to time, the permit or authority holder, and only the permit or authority holder should dive and collect abalone from the seabed."
320 The defendants further pleaded that a direction in those terms was justified for a number of reasons, one of those being "the owner/operator policy adopted by respective Ministers of the Crown to whom the administration of relevant fisheries legislation was committed ........"
321 Having had the benefit of receiving the evidence given at the trial, it is plain to me that the owner/operator policy in its application to the abalone fishery had two essential elements:
(a) Except for the relief diver provisions, only the permit or authority holder could dive and collect abalone from the seabed. This means that employees employed pursuant to a licence to employ endorsed on the abalone diver's licence, were not permitted to dive and take abalone.
(b) The licensed abalone diver who was the holder of the permit or authority was the unit of fishing effort. This meant that the Department and the director defendants regarded the permit or authority holder as the person who was to be in sole control of the fishing operation. He or she was to sell fish in his or her name only, and the authority or permit could not be held in the name of more than one person, whether in partnership or not, or in the name of a corporation.
322 It was a further manifestation of the owner/operator policy that, generally speaking, the profits from the fishing operation by the abalone authority or permit holder were to inure for his or her benefit. But as I will explain later in this judgment, the full ramifications of trust or other arrangements which might have created a right in others to a share in the profits of the operation of the abalone diving business, were not completely understood or consistently administered by the Department or the director defendants.
323 However, generally speaking, the Department and its officers were not concerned with how the abalone diver disposed of the profits of the operations. There were many instances known to the Department of the profits being shared, ostensibly for income tax purposes, in some sort of family partnership. But beyond that, there was a grey area where the evidence does not establish that there was a clear line drawn by the Department as to what was acceptable to it or not.
324 Be that as it may, in its impact upon the questions which is it necessary for me to address in order to determine the issues raised in the trial, it is sufficient for me to accept the ruling of the Full Court that on a proper construction of the Fisheries Acts (and this finding applies to both the 1917 and the 1971 Acts) a person employed under a licence to employ issued to an abalone diver had a lawful right to dive for and take fish. To the extent that the application of the owner/operator policy purported to deny that right, it was invalid.
325 I stress, however, that it was only that aspect of the owner/operator policy which was raised for consideration by the Full Court, given the fact that question 9.1 related only to the owner/operator policy as pleaded in the defence. The defence did not raise or identify any other aspect of the owner/operator policy. It follows that the decision of the Full Court does not extend to any other aspect of the owner/operator policy, assuming, as is the case, that I find that there were other elements in it.
326 Reg 5 of the 1968 Preservation of Abalone Resources Regulations which purported to confine the right to dive to the abalone permit holder or one person authorised by him or her from time to time (but not both at any one time) was likewise held to be invalid, given that it was part of the permit system which itself was held by the Full Court to be beyond power.
327 Although, as I have explained, the policies of the Department and its officers, which to some extent proscribed indirect holding of licences by trust or other arrangements, might properly be regarded as part of the owner/operator policy, it is perhaps better to discuss the Full Court's decision with respect to that aspect of the matter in conjunction with the specific questions which were posed in that regard.
C. TRANSFERS, TRUSTS, CORPORATE HOLDINGS AND PARTNERSHIPS
328 With respect to these matters, the Full Court considered two questions. They were:
"9.6 Was a fishing licence, a permit, a licence to employ, and/or a boat certificate of authorisation or registration, capable of being transferred or alienated at law or in equity or otherwise held in trust or by a body corporate and/or by a partnership and if yes did such transfer or alienation require the approval of the Director of Fisheries? 9.13 Was an abalone permit or authority capable of being transferred except pursuant to the procedure established by Regulation 35AA?"
329 Until 28 August 1980 there was no statutory "right" (as opposed to a legitimate expectation which might arise by operation of law) to a renewal of an abalone permit and no "right" to transfer such a permit.
330 Even when reg 35AA came into force as from 28 August 1980, this did not create a true right to transfer in the legal sense, although it provided a de facto procedure which enabled what were in reality transfers to take place. I have already discussed this aspect of the operation of reg 35AA earlier in this judgment.
331 Subject to the de facto transfer procedure envisaged by reg 35AA as from 28 August 1980, the Full Court held that licences, authorities and permits were personal to the holder and not transferable.
332 In the course of its answer to question 9.6, the Full Court further held:
"An authorisation certificate granted in respect of a boat pursuant to the Managed Fisheries Regulations, 1971 (SA), remained effective following the grant by the owner of that boat of 'a proprietary interest of any kind (whether legal or equitable)' in the boat, which expression must be taken to include transfer or alienation, at law or in equity, provided that the consent in writing of the Director had first been obtained in accordance with Regulation 17 of the Managed Fisheries Regulations, 1971."
333 On the other hand, the Full Court came to the conclusion that there was nothing in the statute and regulations to prevent a fishing licence, permit, licence to employ or a boat authorisation certificate being held in trust for some other person or body corporate "... provided that full control over its exercise remains in the hands of the legal holder to the exclusion of any beneficiary".[15]
"There does not appear to have been any policy consideration under the statutes or regulations which would found a prohibition against the vesting of beneficial interests in licences, registrations, authorities or permits in parties other than the actual holder, because this would have had no impact on the proper management of relevant fisheries or the due discharge of the legal and practical responsibilities of the legal holder, which would remain unaltered. Licences, registrations, authorities and permits are clearly 'property', the beneficial ownership of which can form the subject matter of legal relationships, absent some express statutory provision to the contrary (see Pennington v McGovern;[17] Kelly v Kelly[18]). I would therefore hold that this was the situation. There is no perceivable basis on which it could be asserted that any such transaction required the approval of the Director, because it nevertheless remained the legal responsibility of the person in whom the licence, authority or permit was vested, actually to exercise the relevant rights and discharge all legal obligations under the applicable statute and regulations. Whether or not, on a licence, registration, authority or permit coming up for renewal, the Director could, legitimately, take into consideration any beneficial divesting of interest is a matter for debate, but it does not arise for consideration on the questions as posed."
335 In the separate reasons which I published in the Full Court, I added a caveat with respect to trust arrangements. I said:[19]
".... it seems to me to be part and parcel of the scheme of both the 1917 and the 1971 Acts and the regulations made under each of those Acts that the control of a licence or authority must be in the hands of the holder of the licence or authority. The fact that in many instances it is only a fit and proper person who may hold a licence or authority is a strong indicator towards that conclusion.
True it is that in law a beneficiary under a trust cannot control the exercise by the trustee of any legal authority or licence which he or she might own. But in practice (as opposed to legal theory), the situation may be quite different.
If, to take an extreme example, a person with a known long criminal record was the beneficial owner by way of a series of trust instruments of every fishing licence in South Australia, the conclusion that he or she might in fact be in a position to control the operation of those licences might be inescapable.
It follows that in my view, although a licence or authority or the like might be held in trust for some other person or body corporate, full control over its exercise must remain in the hands of the legal holder to the exclusion of any beneficiary, otherwise the existence of a trust could make nonsense of the statutory scheme." (emphasis added)
336 In the result, in its formal answer to the question as to holding in trust, the Full Court stated that a fishing licence, permit, licence to employ or a boat authorisation certificate-
"... might be held in trust for some other person or body corporate, provided that full control over its exercise remained in the hands of the legal holder to the exclusion of any beneficiary." (emphasis added)
337 Separately, the Full Court held that a corporation could be the owner of a registered boat, but a corporation could not be the owner of a boat for which an abalone authority had been granted under the Managed Fisheries Regulations 1971.
338 Furthermore, it held that a fishing licence, permit, licence to employ or boat authorisation certificate might be held by a body corporate or jointly by and in the name of the partners constituting a partnership except in the case of an abalone permit or authority. The reason for the view which the Full Court took as to the personal nature of an abalone permit or authority appears in the reasons of Olsson J, and it is unnecessary for me to repeat them here.
339 It is convenient at this stage to say a little more about the question of control over the operation of a fishing licence, permit or authority.
340 I have already referred to the passage in my judgment published in the Full Court where I comment on this aspect of the matter in the context of trust arrangements.
341 On reflection, I was pitching the comment too high when I stated that:
"... in law a beneficiary under a trust cannot control exercise by the trustee of any legal authority or licence which he or she might own."
342 It is conceivable that an instrument creating a trust may confer on a beneficiary a measure of control over the exercise of any authority or licence which might be held by the trustee, or for that matter, the carrying on of a business by a trustee. But if the beneficiary had in reality full control, such as might be exercised by the legal owner, the arrangement might be regarded as a sham.
343 But under the Preservation of Abalone Resources Regulations 1968 the abalone permit holder must be a "fit and proper person to hold a permit".[20] There is a corresponding provision with respect to the grant of an authority or permit under reg 11 of the Managed Fisheries Regulations 1971, in that amongst the criteria to be taken into account in considering any application for such a grant the Director may take into account whether "in his opinion":
"(a) the applicant is a fit and proper person ...."
344 If the permit holder (assuming for one moment, contrary to the decision of the Full Court, the validity of the permit provisions under the 1917 Act) or authority holder holds the permit or authority in trust for another person, and that other person has pursuant to the trust instrument effective control of the operation of the authority or permit, the situation would arise in which the fishing operation was being controlled by a person who has not been shown to be a fit and proper person to be associated with its operation, and may in fact be a person who would not be regarded as a fit and proper person to be granted a permit or authority if he or she had applied for it in his or her own name.
345 Those considerations led me to offer the observation, which I have quoted above from the reasons for judgment delivered by me in the Full Court, that:
"... full control over its [the licence or authority] must remain in the hands of the legal holder to the exclusion of any beneficiary, otherwise the existence of a trust could make nonsense of the statutory scheme."
346 I have earlier referred to the terms of reg 21A of Managed Fisheries Regulations under the 1971 Act which was inserted by amendment effective from 9 November 1972. For convenience I repeat the text of the regulation which was:
"No person shall be the holder of more than one of the authorities or permits listed hereunder:
347 The Full Court held the regulation to be invalid.
348 The Full Court held that it was not lawful for the defendant Mr Olsen to cancel or refuse to renew Mr Edwards' licences, permits or boat certificates issued under the Fisheries Act 1917 or the Fisheries Act 1971 on the grounds that he contemporaneously held a licence to take fish, including abalone, in Western Australia.
349 It is, of course, another question whether or not in fact Mr Olsen did cancel or refuse to renew Mr Edwards' licences, et cetera, on that ground.
351 The Full Court held that it was not lawful for the director defendants to refuse to register for each of the plaintiffs in Mr Edwards' action, that is, Mr Edwards himself and his company, Deep Sea Ark, at the same time "one or more boats to take fish for sale".
"It is clear that mere registration of a boat does not carry with it any right to fish on a commercial basis. ... Neither s 17 [of the 1971 Act] nor the FGR [Fisheries General Regulations] 1971 qualifies the right to seek registration and neither even infers any discretion to refuse registration of any boat, provided that it meets the requisite technical requirements.
It is said that, over some period of time, the defendants sought to erect and apply a policy whereby boats owned by corporate owners would not be registered and registration would not be granted to more than one boat per owner.
In my opinion the Crown Solicitor was plainly correct when, in effect, he advised, on 11 October 1973, that there was no lawful basis for the policy sought to be applied."
353 Question 9.9 in the special case stated for the opinion of the Full Court reads:
"Was it lawful in dealing with an application under Regulation 17(1) of the Managed Fisheries Regulations 1971 to impose as a condition of approval thereof that the applicant agree to forfeit all other licences, certificates or permits previously issued to that applicant under the said Fisheries Act 1971."
354 This question was not answered by the Full Court.
H. DELEGATION BY THE DIRECTOR TO THE PRAWN FISHING INDUSTRY ADVISORY COMMITTEE AND/OR THE MINISTER OF FISHERIES
355 This has to do with Mr Edwards' claim with respect to his failed application for the issue to him of a prawn authority in 1974.
356 It is sufficient at this stage to cite the question and answer as set out in the order made on the case stated:
"Question 9.12 Was it competent for the first defendant to delegate to the Prawn Fishing Industry Advisory Committee and/or the Minister of Fisheries the power to grant or refuse an authority or permit under Reg 11 or the power to consent to or refuse the transfer of a proprietary interest (legal or equitable) in an authorised boat under Reg 17 of the Managed Fisheries Regulations 1971(SA)? Answer It was competent for the first defendant to delegate the power referred to in this point of law to the Minister of Fisheries but not to the Prawn Fishing Industry Advisory Committee."
7. THE DECISION IN EDMUNDS, SMOOTHPOOL NOMINEES PTY LTD and ANOR v PICKERING and ORS
357 (I will refer to Smoothpool Nominees Pty Ltd as Smoothpool.)
358 This was a case heard in 1999 by Lander J. He delivered judgment on 23 December 1999.[22]
359 Amongst the issues which fell for determination by Lander J was a question of the validity of a Deed of Trust pursuant to which the holder of a Class A fishing licence and abalone authority agreed to hold the licence and authority in trust for a company controlled by another abalone diver.
360 It is necessary for me to consider the propriety of such an arrangement, having regard to Mr Edwards' written submission in which he states:[23]
"The trust arrangements [which he intended to utilise] would have been reduced to written Deeds similar in terms to the content of the Deed of Trust dated 21 October 1980 executed between Greg Pickering and Smoothpool Nominees Pty Ltd."
361 This was the Deed of Trust the validity of which was considered by Lander J in the Smoothpool case.
362 Later, when I indicated in arguendo that I had some reservations as to the validity of a trust in these terms, Mr Edwards resiled from his written submission and suggested that in fact any trust deed which he would have had drawn up would have differed somewhat. I do not believe him when he makes that somewhat opportunistic suggestion. His written submission is plain and unambiguous.
363 A copy of the Pickering and Smoothpool Nominees Deed of Trust was tendered in evidence before me. The Deed recites the fact that Mr Pickering, an abalone diver, "as the agent and trustee" of Smoothpool, a company controlled by Mr Edmunds, had agreed to purchase from Mr Fox a Class A fishing licence and authority to take abalone. Pursuant to the Deed Mr Pickering agreed to hold the licence and authority and to "conduct business pursuant to the licence and the authority" as agent and trustee for Smoothpool. Mr Pickering agreed to hold all abalone and abalone shell taken by him and all proceeds of sale of the same in trust for Smoothpool, and agreed to "deal with all abalone and all abalone shell in such manner as the principal may from time to time direct and request" (clause 4). It was further provided:
"13. The Diver shall carry on the business at all times and from time to time in accordance with the directions of the principal and shall do all such things as may be necessary or as the principal may request from time to time to carry on the same and to the best advantage."
364 Furthermore, Mr Edmunds was not entitled to appoint a relief diver unless Smoothpool agreed and requested that course.
365 In my opinion, if it was necessary for me so to hold, I would reach the view that the ability of Smoothpool to direct Mr Edmunds as to the whole of the carrying on of the business conducted under the licence and authority gave to Smoothpool an element of control which is inconsistent with the regulatory scheme under both the 1917 and 1971 Acts, and rendered the trust invalid.
366 However, in the case heard by him, Lander J came to a different conclusion and upheld the validity of the trust.
367 In the course of his decision Lander J considered the argument put by Mr Pickering that the trust was illegal. One of the grounds argued in support of that argument was that "... the arrangements associated with the trust left the control of the authority in persons other than the holder of the authority".[24] In considering that argument, Lander J had regard to my judgment in Edwards v Olsen (supra). He observed:[25]
"It is clear enough from his reasons that Perry J was concerned that the legal owner of the authority had the responsibility and the obligations to comply with the Act and Regulations. It was the legal owner who must be answerable for any breach of the Act or Regulations to the exclusion of tbe beneficiary.
I think that has to be so. If trusts are permitted, and it is clear enough that they are, it must be the legal owner who has the responsibility and obligation to comply with the Act and Regulations. The legal owner could not escape that obligation by pointing to a direction given by a beneficiary to him or her which then caused the legal owner to contravene either the Act or the Regulations.
Where the Court therefore is referring to control over the exercise of the authority the Court is indicating the responsibilities which are imposed upon the legal holder.
In particular Mr Clayton said that although the relationship itself of trustee and beneficiary were indications of lack of control that Mr Gregory Pickering's lack of control was demonstrated by the terms of the Deed of Trust."
368 Lander J then goes on to refer to a number of clauses in the Trust Deed, including clause 13 which I have quoted above. He placed particular reliance upon clause 9 of the Deed of Trust which obliged Mr Pickering to comply with the Act and Regulations.
369 With respect to Lander J, in my opinion, the fact that the holder of the licence or authority is obliged to comply with the Act and Regulations would not necessarily operate to save the situation.
"In a sense, however, there is no tension between the obligations owed under the Act and Regulations and the obligations owed to Smoothpool Nominees Pty Ltd. There must be an overriding obligation on the part of the legal owner to comply with the Act and Regulations so as to preserve the trust property for the beneficiary. In that respect compliance by the legal owner is in the interests of the beneficial owner."
"... the terms of the Deed of Trust did not deprive Mr Gregory Pickering of control so as to breach the Regulations."
372 With respect to Lander J, I reach a different conclusion, particularly bearing in mind the terms of clause 13 of the Deed, and also having regard to the fact that pursuant to the Deed Mr Pickering is constituted not only trustee of Smoothpool but also the agent of Smoothpool.
373 After the coming into operation of the 1971 Act, s 38 of that Act was also relevant to the question of control. That section provides:
"38. A person shall not- (a) lend or hire out any licence or permit issued to him; (b) without reasonable excuse have in his possession or under his control any licence or permit not issued to him; or (c) falsely represent himself to be the person named in any licence or permit. Penalty: One hundred dollars."
374 While apart from s 38, I would reach the same conclusion for the reasons which I have given. But that section constitutes a further reason why any trust deed or arrangement pursuant to which a person other than the holder of a licence or permit had control of it would be committing an offence if the control was "without reasonable excuse".
375 Again, with respect to Lander J, I disagree with his finding that s 38 is not of application in this context, and "must be read in conjunction with s 40".[27] He seemed to be suggesting that s 38 had no other application apart from its association with s 40. If that were so, the words in s 38 "under his control" would be otiose.
376 In considering the question whether or not there existed "reasonable excuse", one would be entitled to have regard to the Act and Regulations as a whole, including regulations requiring the Director to be satisfied that a person applying for an abalone authority or permit was "a fit and proper person".
377 I cannot think of circumstances in which the words "without reasonable excuse" would operate to legitimise a trust arrangement in terms of the Smoothpool and Pickering Trust Deed.
378 That Trust Deed gave a degree of control to the beneficiary which hardly differed from the control which would ordinarily be exercised by the legal owner. Looked at broadly, it is at least arguable that a trust in those terms was a sham and that it really amounted to a contract of employment. I should make it clear that it is no part of my role to revisit the propriety of Lander J's decision in the Smoothpool case. My observations are confined to construing the legality of the Deed of Trust, which coincidentally was an exhibit in the proceedings as well as in the Smoothpool case.
379 This ruling was delivered on 3 August 2000.[28]
380 The first contention put forward by Mr Bell in support of his application was that the submission of no case to answer should succeed insofar as no material facts which could support an extension of time with respect to some of the causes of action pleaded in each case had either been identified in the Statement of Claim or in the evidence presented by the plaintiffs.
381 I ruled that ultimately he might well be right in that submission, and the plaintiffs could not assume that their claims for an extension of time would be allowed.
382 However, I was not prepared to dismiss any part of their claims or of their applications for extension of time on that ground at that stage of the case. I refrained from doing so as a matter of discretion.
383 However, I allowed the submission of no case to answer in two respects.
384 I upheld the submission of no case to answer with respect to the issue of the ownership of an abalone permit or authority by a body corporate or jointly by or in the name of the partners constituting a partnership. I did so on the footing that the answers by the Full Court to the special case submitted for its consideration concluded those issues in favour of the position taken by the defendants.
385 Insofar as Mr Edwards had put arguments which, if accepted, would fly in the face of the judgment and order of the Full Court in that respect, I upheld the defendants' contention that the arguments should be rejected.
386 Furthermore, I rejected Mr Edwards' related contention that reg 31 of the Managed Fisheries Regulations 1971 was invalid. I use the word "related" as it was reg 31 which obliged the Director not to grant or renew a permit to take abalone "unless he is satisfied, by production of a medical certificate or otherwise, that the applicant is medically fit to dive". That was in turn one of the bases upon which the Full Court held that a body corporate could not be the holder of an abalone permit.
387 I summarised my second ruling in the following way:[29]
"Secondly, insofar as the Fisheries Act (Amendment) Act 1980 (No 41 of 1980) which came into force on 27 June 1980 inserted subs (5) and (6) to s 32 of the Act, and insofar as those new subsections permitted the imposition of conditions upon a licence to employ limiting the circumstances in which an employee might take fish, I rule that the conditions subsequently endorsed on the plaintiffs' licences imposing such a limitation are and were at all times valid."
388 It followed that any claim based on the assertion that such a condition was invalid stood to be dismissed.
9. LEGAL PRINCIPLES - MISFEASANCE IN PUBLIC OFFICE
390 However, modern statements of the essential elements of the tort, more particularly those contained in the decision of the High Court in Northern Territory v Mengel,[32] are sufficiently definitive for the purpose of resolution of the issues raised in this case. I note in passing that the principles enunciated by the House of Lords in their recent judgment in Three Rivers District Council and Ors v Bank of England (No 3)[33] do not differ in their essential respects from the formulation which appears in Northern Territory v Mengel (supra).
391 The first three requirements of the tort are generally recognised to be that the defendant must be a public officer, that there must be an invalid exercise of power or purported exercise of power, and the defendant must be shown to have had the requisite state of mind. As well, the plaintiff must, of course, suffer damage.
392 The issue of damages carries with it the concomitant questions of causation, foreseeability and remoteness. While those latter elements will often give rise to difficulty, it is unnecessary to address them in this case. That is because a consideration of the first three requirements as I have defined them, particularly the third, the requisite mental element, is sufficient to determine the case.
393 A public officer has been defined as "an officer who discharges any duty in the discharge of which the public are interested, more clearly so if he is paid out of a fund provided by the public".[34] There can be no question but that the director defendants and other officers of the Fisheries Department who were involved in the relevant dealings concerning the plaintiffs were public officers. Indeed, no issue in the case has been raised as to that aspect of the matter.
394 Neither has it been doubted during the course of the trial that the actions of the director defendants in formulating and publishing directives and policies with respect to the abalone fishery and in their dealings with the plaintiffs during the course of the defendants' administration of the Fisheries Acts and Regulations constituted exercises of power or purported exercises of power by them in their capacity as public officers.
395 But this element of liability for the tort of misfeasance is not satisfied unless the act of the public officer said to be an exercise of power is shown to be invalid, in the sense that either there is no power to be exercised, or the exercise of the power has miscarried in a way which would warrant judicial review and the setting aside of the administrative action:
"There can be no tortious liability for an act or omission which is done or made in valid exercise of a power."
396 In this case there is no doubt that the acts complained of on the part of the director defendants were acts committed by them in the discharge of their function as public officers. There is, however, contention between the parties as to whether or not the various acts were authorised by the various Fisheries Acts and Regulations. To the extent necessary, I address that issue in due course.
397 The third requirement of the tort, a requirement which is of central importance in the resolution of the case, is as to the state of mind of the defendant.
398 In the early cases, it was said that malice was essential to the action.[36] Modern cases recognise that proof of "targeted malice", as it has come to be called, that is, conduct specifically intended to cause injury to the plaintiff, is not the only means by which the mental element may be satisfied. It is now accepted that the requirement of proof of the necessary state of mind of the defendant may be satisfied if the public officer is shown to have acted with actual knowledge ".... that he has no power to do the act complained of and that the act will probably injury the plaintiff".[37]
399 Where there is targeted malice, the purported exercise of power, even though ostensibly within power, is invalid as the public officer has acted for an improper or ulterior motive.
400 Both cases, that is, where there is targeted malice or where there is conduct accompanied by actual knowledge that there is no power to engage in that conduct, involve bad faith. In the first instance the act is in bad faith as it is committed for an improper or ulterior motive. In the second case it involves bad faith in that the public officer lacks an honest belief that his or her act is lawful.
401 So that for this element of the tort to be satisfied, there must be bad faith in one or other of the two senses which I have explained.
403 In cases involving bad faith of the second kind which I have described, it has sometimes been argued that the knowledge of the public officer that the act is beyond power may be constructive knowledge, or to put it in the language of the pleader, it is sufficient to prove that the public officer either "knew or ought to have known" of the absence of power. While the argument that the test could be satisfied in that way was expressly rejected by the High Court in Northern Territory v Mengel,[38] both the High Court in that case and the House of Lords in their decision in the Three Rivers case accepted that, absent actual knowledge of the absence of power, the requisite state of mind might be proved if it could be shown that the public officer was "recklessly indifferent as to the existence of the power to engage in the conduct which caused the plaintiff's loss".[39]
404 So that, to put the matter comprehensively, the element of bad faith which is essential to proof of the requisite state of mind, may be satisfied by evidence amounting to targeted malice in the sense which I have explained that expression, or lack of an honest belief that the act is lawful. Lack of an honest belief that the act is lawful may be demonstrated either by actual knowledge of the lack of power or reckless indifference as to the availability of the power.
405 I very much doubt that if a plaintiff fails in an action for misfeasance in public office, he or she can succeed in an action in negligence, at least when the negligence is said to amount to no more than a failure on the part of the defendant to exercise reasonable care in ascertaining the nature and extent of his or her powers.
406 During the course of his judgment in Northern Territory v Mengel, Brennan J said:[40]
"The plaintiffs submit that the requisite elements of the cause of action are satisfied by 'constructive knowledge' of the absence of power to engage in particular conduct and foreseeability of the injury suffered by the plaintiff. This submission carries concepts familiar in the law of negligence into the tort of misfeasance in public office to which, in my opinion, those concepts are foreign. A public officer is appointed to his or her office in order to perform functions in the public interest. If liability were imposed upon public officers who, though honestly assuming the availability of powers to perform their functions, were found to fall short of curial standards of reasonable care in ascertaining the existence of those powers, there would be a chilling effect on the performance of their functions by public officers. .... the tort of misfeasance in public office is not concerned with the imposition of duties of care. It is concerned with conduct which is properly to be characterised as an abuse of office and with the results of that conduct." (emphasis added)
A little later he went on to say that:[41]
"Public officers, like all other subjects, are liable for conduct that amounts to a tort unless their conduct is authorised, justified or excused by statute. A statute is not construed as authorising, justifying or excusing tortious conduct unless it so provides expressly or by necessary intendment. In particular, a statute which confers a power is not construed as authorising negligence in the exercise of the power. Thus liability may be imposed on a public officer under the ordinary principles of negligence where, by reason of negligence in the officer's attempted exercise of a power, statutory immunity that would otherwise protect the officer is lost.[42] But there is an obvious difference between the malice, knowledge or reckless indifference as to the existence of a power that is an element in the tort of misfeasance in public office and negligence in the exercise of a power which precludes a plea of statutory authority to engage in the conduct complained of.
A distinction must therefore be drawn between an absence of reasonable care in ascertaining whether a power is available for exercise and an absence of reasonable care in exercising an available power. Error by a public officer in the ascertainment of available power may found a misfeasance action, if at all, only if the public officer knew that there was no power[43] or was recklessly indifferent as to the existence of the power to engage in the conduct which caused the plaintiff's loss."
407 Brennan J goes on to refer to the decision of Diplock J in O'Connor v Isaacs.[44] In that case, Diplock J said, in a passage cited with approval by Brennan J:
"If A, acting in perfectly good faith, orders B to do something, which order both A and B erroneously think A is entitled to give, and B does it, I know of no principle which makes A liable for any damage suffered by B as a result of doing it. It seems to me that it is damnum absque injuria. If a policeman, who has a limited authority, orders me to cross the road in circumstances where he has no right to do so, and I do so, and as a result of that I suffer damage, both of us erroneously thinking that he is entitled to give such an order to me, I cannot see any principle on which I should be entitled to recover from the policeman the damage which I have suffered as a result of our mutual mistake of law. Now, if A does it maliciously, then it may well be that an action will lie, whether or not he has got the authority to give the order, although in Gelen v Hall[45]
the court left open the question whether an action would lie." (emphasis added)
"That element [the state of mind of the public officer] defines the legal balance between the officer's duty to ascertain the functions of the office which it is his or her duty to perform and the freedom of the individual from unauthorised interference with interests which the law protects. The balance that is struck is not to be undermined by applying a different standard of liability - namely, liability in negligence - where a plaintiff's loss is purely economic and the loss is attributable solely to a public officer's failure to appreciate the absence of power required to authorise the act or omission which caused the loss.[46]
The law does not speak with a forked tongue when dealing with the limit of liability of a public officer. It is unnecessary now to consider whether additional factors (eg, express representation of authority or known reliance on authority) may attract liability to a public officer under the law governing the tort of negligence." (emphasis added)
408 I accept that, arguably, the majority in Northern Territory v Mengel might be thought to have recognised the possibility of the existence of a liability in negligence based on a failure to become aware of the absence of a relevant power, where the tort of misfeasance in public office was not made out. In particular, the observations of the majority (Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ) in the following passage in their joint judgment might support the view that the only reason that the Inspectors in that case were not liable in negligence was because of a lack of evidence of the lack of power:
"Given that the argument made on behalf of the Mengels with respect to misfeasance in public office extended to an assertion of their entitlement to succeed also in negligence, it is appropriate to note that it is not open to them to make a case in negligence based on the proposition that the Inspectors should have known that their actions were unauthorised. ........ To make good the assertion that the Inspectors should have known that there was not an approved programme, it is necessary for there to be a positive finding that there was no approved programme."[47]
409 However, it is unnecessary to attempt to resolve what tensions may exist between that passage and the relevant part of the judgment of Brennan J because, as will be seen, the plaintiffs' case in negligence cannot, in my view, succeed.
410 In any event, the passages to which I have referred in Brennan J's judgment serve to illustrate the incongruity in allowing concepts peculiar to the law of negligence to intrude into the narrowly defined tort of misfeasance in public office. More particularly, Brennan J's judgment prompts the observation that it would hardly seem right to define the limits of the liability for misfeasance in public office in terms which exclude a liability predicated on a failure to exercise reasonable care in ascertaining the existence of a power, but then to allow recovery in negligence. In such a case, where all that could be shown was such a failure on the part of the public officer, a finding of negligence would render nugatory the very careful formulation of the liability of public officers for misfeasance which finds expression in cases such as Northern Territory v Mengel.
411 On the other hand, there may be "additional factors" beyond a mere failure to ascertain the existence of a power which could perhaps give rise to a liability in negligence.
412 I draw attention also to observations made in two other cases referred to by Brennan J in his judgment in Northern Territory v Mengel.
"But what emerges from the evidence is a picture of a minister (whose evidence was accepted by the judge as having been honestly given) acting in accordance with what he conceived to be his duty under the relevant legislation, and acting moreover, at all times, on the advice of the relevant cabinet committee, upon which departmental officers were in attendance. The Court of Appeal considered that he had in fact exceeded his powers; but, in reaching that conclusion, they proceeded on a somewhat different view from that acted upon by Wild CJ in reaching the same conclusion on a matter which, in the respectful opinion of their Lordships, must in any event have been open to serious argument. As a matter of sheer common sense, it must be unlikely that the minister should, in such circumstances, have been guilty of negligence ...." (emphasis added)
414 In Calveley v Chief Constable of the Merseyside Police,[50] which concerned the question whether police officers investigating complaints against other officers who were subsequently charged with breaches of discipline had failed to conduct the investigations properly or expeditiously, the following observation appears in the judgment of Lord Bridge:[51]
"Where no action for malicious prosecution would lie, it would be strange indeed if an acquitted defendant could recover damages for negligent investigation. Finally, all other considerations apart, it would plainly be contrary to public policy, in my opinion, to prejudice the fearless and efficient discharge by police officers of their vitally important public duty of investigating crime by requiring them to act under the shadow of a potential action for damages for negligence by the suspect."
415 Even if, despite the dicta to which I have referred, one was to assume that the dismissal of an action for damages for misfeasance in public office is no bar to an action for negligence based on the same conduct of the public officer, it does not seem to me that on a proper formulation of the principles upon which liability in negligence could arise, considered independently of the tort of misfeasance, the plaintiffs are any better off.
416 The case is one in which economic loss is alleged to have been suffered in consequence of negligent mis-statements. Underlying the allegation of negligent mis-statements is the assertion that the defendants were negligent in failing properly to construe, as a matter of law, the relevant provisions of the legislation and the nature and extent of their powers under the Fisheries Acts and Regulations. The negligent mis-statements are pleaded and asserted in terms which necessarily imply such a failure.
417 A negligent mis-statement may be a product of a failure adequately to investigate the factual accuracy of the assertions embodied in the statement, but this does not take the case out of the category of negligent mis-statement.
418 Furthermore, here, the case is one in which the loss alleged to have been suffered is unquestionably purely economic, now that earlier pleas as to interference with the health of the plaintiffs have no longer been pursued. (I mention in parenthesis that the circumstances in which the plaintiffs advanced a claim for damages for personal injury and then withdrew it are explained later in my reasons.)
419 Simply to categorise the case as one of negligent mis-statement alleged to have caused purely economic loss does not take one very far in determining the critical questions in this case, which are whether there was in fact a duty of care, and if so, the content of the duty and whether there was a breach of the duty.
420 The circumstances of the case give rise to the need to have regard to the refinements and distinctions which the courts have superimposed upon the general law of negligence in dealing with allegations of negligence against public authorities and public officers.
421 In the first place, there is a well known distinction, which I apprehend still to be valid, between policy and operational decisions. The distinction has been described in this way by Mason J:[52]
"The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognise that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness."
422 While I must accept that formulation, the distinction is more relevant in cases involving the exercise of an administrative discretion based exclusively on government or ministerial policy.
423 Although the defendants have argued that the impugned statements and directions by the defendants have as their source policies which may be traced back to the Minister of Fisheries in office at the relevant time, the gist of the action is that the defendants knew or should have known that they were promulgating policies or giving directions which conflicted with the legal entitlements of the plaintiffs, having regard to the terms of the Fisheries Acts and Regulations.
424 Given those considerations, the distinction between policy and operational factors does not take one very far.
425 Some assistance, however, may be obtained from the decision of the High Court in Crimmins v Stevedoring Industry Finance Committee,[53] more particularly in the judgment of McHugh J. The case concerned the liability, if any, of the Australian Stevedoring Industry Authority to a waterside worker who contracted mesothelioma from exposure to asbestos dust. The question was whether the authority owed to him a duty of care, having regard more particularly to the statutory provisions pursuant to which the authority regulated stevedoring operations.
426 After referring to the policy/operational distinction and the above quoted dicta of Mason J in Heyman (supra) and of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council,[54] McHugh J referred to criticisms of the distinction, citing Lord Hoffmann's judgment in Stovin v Wise[55] where the latter described the test as inadequate.
"The Supreme Court of the United States in United States v Gaubert[57] has also pointed out that almost anything done by a public authority involves discretion in policy judgments about priorities and resources. In Pyrenees, two justices of this court expressed the view that the distinction was unhelpful on the facts of that case."[58]
"[87] Despite these criticisms, there is some support in this country for the distinction, albeit not in the form described in X (Minors). It may be that functions and powers which can be described as part of the 'core areas' of policy-making, or which are quasi-legislative or regulatory in nature, are not subject to a common law duty of care.[59]
Outside this narrowly defined policy exception, however, as Professor Todd has argued, it seems preferable to accommodate the distinction at the breach stage rather than the duty stage.[60] He has argued:
The question whether a decision was made within the ambit of a statutory discretion seemingly has a direct analogy with the question whether a professional or skilled person took reasonable care in exercising his or her professional judgment. The professional person is not bound to ensure that he or she has made the right decision or to guarantee success in any particular venture. Rather, his or her obligation is to speak or to act within the boundaries reasonably to be expected of a person claiming skill and competence in the particular area. Whether a public or a private defendant is involved, the same kind of question can be asked in relation to any acts or decisions involving the exercise of judgment ...
'And the degree of care expected of a public body in meeting the standard of reasonableness must be determined in the light of its obligation to carry out various statutory functions and its inability simply to desist from any exercise of its responsibilities ... So the funding and other resources which are available to meet the demands which are made upon the public body are very relevant ....'" (emphasis added)
428 McHugh J then goes on to repeat an observation which he made in Pyrenees:
"[89] ..................... '[T]he fact that the authority owes a common law duty of care because it is invested with a function or power does not mean that the total or partial failure to exercise that function or power constitutes a breach of that duty. Whether it does will depend upon all the circumstances of the case including the terms of the function or power and the competing demands on the authority's resources.' [90] To highlight the different position of statutory authorities therefore, it also seems best to formulate an authority's duty by reference to what a 'reasonable authority' - rather than a 'reasonable person' - would have done (or not done) in all the circumstances of the case."
429 While paragraph [90] of the passage which I have just quoted identifies the approach to be adopted where there is a duty of care, paragraph [87] makes it clear that the exercise of functions and powers in what McHugh J describes as "part of the 'core area' of policy making, or which are quasi-legislative or regulatory in nature" may not be subject to a duty of care at all.
430 As the actual decision in Crimmins makes clear, however the matter is to be approached, the first step must be to construe the terms of the statute defining the functions and powers of the statutory authority whose conduct is impugned. On a proper construction of the relevant statute, it may be possible to infer an intention to exclude a common law duty of care, either because the statute enables the relevant functions and powers to be characterised as "policy making" or "quasi-legislative or regulatory" or for some other reason.
431 If the terms of a statute indicate such an intention, that is an end of the matter. If they do not, one must then have regard to the relationship between the plaintiff and the statutory authority and the context in which the relevant transaction occurred to determine whether or not according to ordinary common law principles such a duty arises.
432 If one reaches that further stage, earlier authorities dealing with negligent mis-statements suggest that concepts of "proximity" and "reliance" are all-important.[62] But the decision of the High Court in Perre v Apand Pty Ltd[63] suggests that those concepts have been displaced by the concept of "vulnerability".
433 Just what is meant by "vulnerability" and how the test of "vulnerability" is to be applied is not yet well settled. As it was put by Gray J in CLT v Connon and Ors:[64]
"Although the High Court has moved away from the doctrine of proximity[65] no unified approach has been established to take its place."
"[43] The notion of general reliance has been the subject of some criticism[66] and more recent decisions of this court have tended to focus on the vulnerability of the person who suffers injury,[67] on the one hand, and, on the other, the knowledge of risk and the power of the party against whom a duty of care is asserted to control or minimise that risk.[68]"
434 So that the present position would appear to be that if the statute excludes a duty of care, that is an end of the matter. If it does not, one has regard to the concept of vulnerability in order to determine whether a duty of care exists.
435 If a duty of care is held to exist, it becomes necessary to ascertain whether there is a breach of it. In determining whether there is a breach, one must first have regard to the nature of the duty. Here, the nature of the duty, if any, is correctly to ascertain the legal entitlements of the plaintiffs and to give accurate advice to them with respect to those entitlements.
436 What must be borne in mind is that the mere fact that inaccurate advice is given, that is, inaccurate in the sense that it does not truly reflect the legal entitlement of the plaintiff, may not prove a breach of the duty. A number of other considerations must be borne in mind before concluding that there is a breach. Those considerations will include considerations such as those referred to by McHugh J, which I repeat, namely:
"[89] ....... '... the terms of the function or power and the competing demands on the authority's resources.' [90] .... what a 'reasonable authority' - rather than a 'reasonable person' - would have done (or not done) in the circumstances of the case."
437 The director defendants were not lawyers, although they had legal advice available through the Crown Law Department when the occasion arose to seek and obtain it. A relevant factor in considering the reasonableness of their failure to seek advice to underpin the directions they gave may be whether or not anybody suggested that the Act and Regulations should be construed otherwise.
438 To summarise my conclusions as to the principles relevant to consideration of the plaintiffs' case in negligent mis-statement:
(1) It is doubtful that a plaintiff who fails in an action for misfeasance in public office can succeed in an action for negligence when the negligence is said to amount to no more than a failure on the part of the public officer concerned to exercise reasonable care in ascertaining the nature and extent of his or her powers.
(2) In such a case, arguably there would need to be "additional factors" in the sense explained by Brennan J in Northern Territory v Mengel (supra) before there could be any liability in negligence.
(3) However, if an action in negligence is to be entertained in this case, it should be dealt with in accordance with the particular principles applicable to an action for damages in the nature of economic loss said to have been suffered in consequence of negligent mis-statements by a public authority purporting to act under powers conferred by statute. In that context, the following matters in particular should be borne in mind:
(a) Although it is still appropriate in a proper case to have regard to the distinction between policy and operational decisions, the more useful distinction for present purposes may be that identified by McHugh J in Crimmins v Stevedoring Industry Finance Committee (supra) when he suggested that "functions and powers which can be described as part of the 'core areas' of policy making or which are quasi-legislative or regulatory in nature are not subject to a common law duty of care".
(b) In any event, however the matter is approached, if the terms of the statute indicate an intention to exclude a common law duty of care, that is an end of the matter.
(c) If the terms of the statute do not indicate such an intention, the court must consider whether in all the circumstances a duty of care existed.
(d) In determining whether a duty of care existed, notions of proximity and reliance are no longer dominant considerations. Rather the court must have regard to the concept of "vulnerability" as explained in Perre v Apand Pty Ltd (supra).
(e) Even if a duty of care did exist in this case, the giving of incorrect advice or directions which were outside of the powers conferred by the statute (and I make no finding at this stage as to whether that occurred) is not necessarily indicative of a breach.
(f) In determining whether there has been a breach, the Court must have regard to the nature of the function and powers of the authority, the fact that there are competing demands upon its resources, that its officers cannot necessarily be presumed to have technical legal expertise, or that they were necessarily at fault in failing to seek legal advice, and all other relevant circumstances.
439 I will deal with the question of the outcome of the application of those principles to the facts established in this case under the heading of "Conclusions as to Liability".
440 At this stage I will deal with the essential factual findings.
441 In approaching the question of credibility, I am mindful of the recent dictum of Kirby J in which he drew attention to the "fallibility of judicial evaluation of credibility from the appearance and demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the court room."[69] In these proceedings, however, with respect to the witnesses whose testimony is central to the success or failure of the plaintiffs' claims, more particularly but not limited to Mr Edwards, there is much objective, documentary evidence which supports the adverse view which I eventually reached as to their credit.
442 Mr Edwards gave his evidence-in-chief over a period of three days. He was cross-examined over a period of a further twenty days.
443 I do not accept him as a witness of truth. I believe that he has manipulated and orchestrated both his own action and the other actions which he has promoted. Throughout the proceedings he has been motivated by a single-minded determination to attack the Fisheries Department and the Directors of Fisheries on every possible basis which he could perceive or invent with a view to maximising what he hoped to be a substantial return by way of damages.
444 In reaching that view, I have had regard to the impressions which I gained while he was in the witness box, together with the substantial body of documentary and other evidence which confirms that conclusion.
445 In the result, I am not prepared to accept Mr Edwards' evidence upon any question of significance in the action unless it is intrinsically likely or unless it is corroborated by other credible evidence which I am prepared to accept.
446 I do not attempt the task of tabulating every instance where I believe that he was lying, both in and out of court. The case is unusual in the number of instances where that was clearly so. Rather, I refer to the major items of evidence which have led me to the view which I hold as to his credit.
(a) DISHONEST CORRESPONDENCE AND DEALINGS WITH THE DEPARTMENT OF FISHERIES
447 The evidence established a course of conduct on the part of Mr Edwards commonly, but not only, through the agency of his second wife, by dishonest and deceptive means to obtain or attempt to obtain information from the Department of Fisheries which he thought might assist his case and the other cases which he was promoting.
448 At one stage during the course of his evidence he said:
"Q. You didn't get your wife to ring up Mr Fox imploring him to sign the document [a document pursuant to which Mr Edwards stood to receive a percentage of the proceeds of Mr Fox's action]. A. I didn't get my wife to do anything. Q. You never got your wife to do any of your business affairs. A. No, I wouldn't get Sandy to do my business, I'm quite capable of doing my own. Sandy has her own head for business and doesn't do things under my instructions." (emphasis added)
449 Subsequently he was questioned about letters written by his wife to the Department of Fisheries in which she sought to obtain access to documents, using her maiden name. I will refer to the letters in due course. Mr Edwards was questioned along the following lines:
"Q. Before you married your second wife did you ever get her to do any of your business. A. She, well, she typed, she wrote letters from time to time in her maiden name. ..... Q. Would she write letters with her maiden name on your business. A. I remember the Fisheries refused to give up their papers and Sandy wrote to them, said she was researching a book and she wanted access to archives; and it would have been very useful for me to have that same access, if she got access, because we would have both gone in. Insofar as that's my business, yes, she did. Q. You told her to write that letter, didn't you. A. Well, we discussed it. Q. You told her to write that letter using her maiden name because you thought she might get access to information which you might not get using your name. A. Well, no, it - there would be no difference in the access, I wouldn't have thought. ........ Q. You told this Court a moment ago your second wife never wrote letters or conducted your business, didn't you. A. Well, for the most part, she didn't. Q. This is one of your modus operandi; to use other people to conduct your business. That's what you've done throughout your life. ..... A. I think its probably good business not to show your hand. I think it's very good business. I think it's very clever." (emphasis added)
450 Later, under further cross-examination, Mr Edwards would not accept that such conduct was deceptive or that he was trying to trap the Department.
451 An example of one of the letters in question is dated 28 November 1985. This is a letter written by Mr Edwards' wife, using her maiden name Campbell, to the Director of Fisheries. The letter reads:
"Dear Sir, Re: Proposed Purchase of an Interest in an Abalone Fishery Licence I propose to purchase an interest in an abalone fishery licence in the West Coast abalone fishery. The 'interest' I propose to purchase will involve me in an agreement, arrangement or understanding, the effect or purpose of which is that the holder of the abalone fishery licence will act at my direction or in accordance with my wishes or instructions when he engages in the West Coast abalone fishery. Would such a proposal be legal? Would such a proposal be considered by the Department?"
452 Despite the technical language used in the letter, Mr Edwards denied that he had received any legal assistance in the drafting of it. But when cross-examined about the difference between an "agreement" and an "arrangement" he said, "I can't understand it, quite honestly", and then suggested that he had taken the words out of the regulations.
453 Be that as it may, despite his lame suggestion that there might have been a "proposal" which he and his wife had in mind to pursue in the West Coast abalone fishery, there was clearly no transaction which would properly be described in the terms set out in the letter. The letter did not constitute a genuine inquiry but, as the defendants suggest, amounted to nothing but an attempt to trap the Department.
454 Ms Campbell wrote again to the Department in early 1986. Although her letter was not tendered, the Department's reply dated 5 February 1986, over the signature of the defendant Mr Stevens in his capacity as Director of Fisheries, is addressed to "Mr (sic) S.H. Campbell". Clearly it is responding to a letter from Mr Edwards' wife. Mr Stevens' letter commences:
"I refer to your letter of 4th of February 1986 in which you request access to departmental records associated with your manuscript entitled 'Recollections of a Fisherman'."
455 In his letter Mr Stevens goes on to indicate that the Government did not allow general access to State Government department records but that there were others she might approach, as to which he gave details.
456 In his evidence Mr Edwards admitted that it was mainly his idea to write the letter. He admitted that neither he nor his wife ever had any intention of writing a book entitled "Recollections of a Fisherman". Eventually he admitted:
".... the purpose of the letter was to get to the archives of the documents. Q. It was a pretence, wasn't it. A. Yes, absolutely."
457 I note that by the stage his wife made the inquiry which provoked the response of 5 February 1986, Mr Edwards had consulted solicitors, Genders Wilson.
458 By letter of 19 April 1985 Mr Edwards wrote to the Director of the Department of Fisheries in Western Australia. In the letter he inquired whether in the period between 1970 and 1980 the Western Australian Department was ever "involved with the" South Australian Fisheries Department "in an agreement which limited abalone divers in South Australia from holding an abalone licence in Western Australia and vice versa?". After asking for further information on the same topic, Mr Edwards stated in the letter that he required the information as it would be useful for a thesis on abalone for the 1988 Bi-Centennial celebrations.
459 He agreed in evidence that he was not preparing any such thesis, and that the suggestion to the contrary was not true, although he denied that it was a lie. He said in evidence that he worded the letter in that way as he felt that otherwise he might not have got the information he wanted.
460 Mr Edwards apparently enlisted the help of his wife to write other letters to the Director of Fisheries, the editor of SAFIC magazine and to the Minister of Fisheries, after the proceedings had been issued and served, seeking information. One or two of the letters embody a series of questions which resemble a set of legal interrogatories.
461 By letter dated 25 July 1985 Deep Sea Ark purported to make an inquiry of the Director of Fisheries. The letter makes no mention of Mr Edwards and shows as the address of Deep Sea Ark an address at Klemzig which turns out to be the address of Mr Edwards' father.
462 The letter is signed off with the seal of Deep Sea Ark. Not only is it strange to use of a company seal to sign off a letter which was of no legal significance, but I have no doubt that this device was used by Mr Edwards to conceal its true authorship.
463 In the letter Deep Sea Ark states that it proposes to purchase an abalone licence in the West Coast Zone "from the current holder of an abalone fishery licence".
"I write to inquire whether such a proposal meets your approval and would gain your consent. Also whether any particular regulation in the Scheme of Management (Western Zone Abalone Fishery) Regulations 1984, precludes bodies corporate from engaging in such an agreement. I seek your approval as soon as possible so that negotiations can be finalised."
465 Mr Edwards admitted in evidence that in fact no negotiations had taken place. There was no proposal to purchase a licence. The letter was nothing more than another colourable ploy to obtain what Mr Edwards thought might be damaging admissions by the Department.
(b) UNTRUTHFUL STATEMENTS IN EVIDENCE BY MR EDWARDS AS TO THE STATE OF THE ABALONE FISHERY
"In respect of the Western Zone operation ...... apart from the money involved, and the incredible opportunities being offered, to be able to purchase an abalone authority there - and I might say in the Central Zone which we intend to do in a moment - for the sorts of money they were being offered for, knowing that they could be paid off within two years and own the things outright, with the incredible possibilities that they would probably go through the roof one day, they would never have gone downwards in value and the way abalone looked it could not be anything but rosy."
467 When he was cross-examined about this part of his opening he was asked the following question:
"Q. Was that [the passage which I have just quoted] an accurate statement of your view at the time that you sold the abalone authority, namely that the abalone fishery in the Western Zone looked rosy. A. Yes, there were stacks of abalone in deep water and on the far West Coast. ....... Q. You were optimistic about the future of the abalone fishery at that time. A. In terms of purchasing businesses, yes."
468 The opening and that evidence is totally inconsistent with what Mr Edwards told a number of other witnesses whose evidence to the contrary I accept. I set out the detail of that evidence later in this judgment under the heading "Why the Plaintiffs sold out of the Abalone Fishing Industry".
469 It will be seen from my references to the other evidence, notably statements to the witnesses Mr Thorpe, Mr Bichard, Mr Craig and Mr Newton, that Mr Edwards had told them that the abalone industry was "knackered", "stuffed" or "buggered". He went so far as to try to persuade others, for example, the witness Mr Ford, whose evidence I refer to later, not to buy into the industry because of the state into which the abalone stocks had dwindled.
470 I also take into account the very many comments in catch returns made by Mr Edwards to the same effect.
471 For example, in his catch return of September 1978 he described the state of the fishery as "critically overfished". In the following month, that is, October 1978, he added the following comment to his catch return:
"Critically overfished. [An expression which he repeats a further seven times with reference to different areas from which he was fishing that month, followed by "the abalone industry zone ABC, the Western Zone] Will be destroyed in six months. Critical."
472 I am satisfied that Mr Edwards lied in evidence when he suggested that the Western Zone was in fact viable, that it "looked rosy", and that a fortune was to be made if he had been allowed to expand his operation there by employing other divers to dive for him, either by some form of trust arrangement or otherwise.
473 Likewise, I believe that he was plainly dishonest in his evidence when he attempted to explain away the damning effect of the endorsements on the catch returns by suggesting either that he was only referring to shallow water or that he was only trying to build up a case to support his application to move to the Central Zone. There was no reference to shallow water in the catch returns and no qualification in the various statements in the catch returns to the effect that the industry was in a critical condition.
474 In any event, I accept other evidence in the case, particularly that given by Dr Shepherd, that there were no substantial untapped stocks of abalone in deep waer. The main depth range fished in the Western Zone was 10 to 20 metres, which was a little deeper than the main diving depth in the Central Zone. All known populations of abalone off the South Australian coast are, and were in Mr Edwards' time, regularly fished. The suggestion by Mr Edwards, made throughout the case, that there were substantial untapped abalone stocks in deep water is a deliberate fiction created by him in an endeavour to explain away the damaging comments in the catch returns, and to bolster his claim for damages.
475 In his efforts to avoid the damaging inferences which clearly might be drawn from the statements in the catch returns, Mr Edwards sought refuge in irrelevancies:
"Q. The comment at the bottom of that return, October '78, is a general comment which says, 'The abalone industry Zone ABC will be destroyed in six months'. You did not believe that at the time but you wrote that comment on the return, is that not so. A. No, I didn't believe it at the time and I did write it, yes. Q. Isn't that dishonest. A. No, I don't think so. I think it's trying to write a note so it shakes the people into realisation, at the Fisheries, that they are unlawfully denying my right to employ, and I was running the risk of drowning every day and they didn't care."
(c) UNTRUE STATEMENTS BY MR EDWARDS WITH RESPECT TO HIS HEALTH
476 Mr Edwards agreed in the course of his cross-examination that he had told the Court in opening that he was "as fit as a mallee bull". He said that the only claim he had ever made against anybody in respect of his health was when he broke his wrist while working at Portland Smelters in 1989 or 1990. For that he received weekly payments of compensation for three or four years.
477 He said further in cross-examination that he could not recall any other claims which he had made "as a result of health problems". He said that he had had "the bends once or twice, some twinges" but it never stopped him diving. He also said that he had never had bone necrosis and there had been no sign of it on his x-rays. He had suffered from some back injuries and had seen chiropractors from time to time, but he had not suffered any bone deterioration or degeneration, and according to his evidence he had never been diagnosed with having rheumatism, memory loss or "repetitive strain injury".
478 That evidence to a substantial degree flies in the face of allegations made in an amended Statement of Claim filed on his behalf on 29 October 1987. Pursuant to amendments made by leave of a Master made on 1 October 1987, he pleaded, inter alia:
".... in consequence of diving alone he [Mr Edwards] sustained back injury, decompression sickness, bone deterioration and degeneration, rheumatism and memory loss and repetitive strain injury".
479 Subsequently, in a further amended Statement of Claim filed on 10 August 1988, he withdrew any claim for personal injury, including the particulars which I have just set out.
480 Quite apart from the inconsistencies between the amended pleading and Mr Edwards' evidence, the genuineness of his claim with respect to personal injuries is seriously called into question by reason of the fact that five other plaintiffs, whom Mr Edwards' was assisting with their claims, amended their statements of claim to plead a claim for damages with respect to personal injuries in almost exactly the same terms. Their amendments, likewise, were made in October 1987 and withdrawn more or less simultaneously with the withdrawal of Mr Edwards' claim in August 1988.
481 In the case of Mr Ey, his amended Statement of Claim alleged that he had sustained "back injury, decompression sickness, bone deterioration and degeneration, rheumatism and memory loss" - the only difference in comparison with the particulars pleaded Mr Edwards being that he did not advance a claim for "repetitive strain injury". The particulars in the claims of Mr Fox and Mr Smith, Mr Milanovic and Mr Symons are pleaded in exactly the terms as in Mr Ey's case.
482 Mr Edwards gave evasive and unconvincing answers in cross-examination when asked to explain how it came about that the other plaintiffs had amended their claims more or less simultaneously to allege injuries in the same term as his own plea.
483 Furthermore, he admitted that he had no expert report supporting his plea that any of the conditions alleged in his amended Statement of Claim resulted from diving.
484 The evidence leaves me in no doubt that Mr Edwards encouraged other abalone divers to bring proceedings similar to those which Mr Edwards instituted against the director defendants, purported to assist them with the proceedings, and received substantial sums of money from them, part of which Mr Edwards kept for himself and part of which went into a fund from which lawyers' fees were paid.
485 I have already referred to the fact that some sixteen actions have been commenced in this Court in all, although in one or two instances the same plaintiff has instituted more than one of those actions. There are thirteen different plaintiffs, that is, former abalone divers who have brought the actions.
486 At some time before any of the proceedings were instituted, and for a period of time after his own action had been commenced, Mr Edwards contacted a number of other abalone divers in an endeavour to encourage them to bring similar proceedings.
487 If the matter had rested there, the situation would have been unremarkable. The claims of parties who, for example, bring a class action are not to be doubted simply because the plaintiffs are all bringing similar claims.
488 In this case, however, there is another dimension which gives rise to concerns as to Mr Edwards' probity. Mr Edwards reached or attempted to reach agreements with some of the plaintiffs pursuant to which, on a sliding scale, he would receive a substantial proportion of any damages which they might recover in their actions.
489 For example, an unsigned memo of agreement between Mr Edwards and Mr Fox provided that in consideration of Mr Edwards having undertaken, at Mr Fox's request during a period of some nine years immediately preceding the date of the signing of the agreement, "certain works" for Mr Fox, Mr Edwards was to receive a payment of $5000 "immediately" and a further $405000 in the event that Mr Fox was successful, whether by way of a judgment or settlement in his own action to the extent of receiving assets or property worth not less than $1.5 million. If Mr Fox's recovery exceeded $2.5 million there would be an additional $206000 odd payable, together with interest. Other provisions provided for lesser amounts being payable if Mr Fox's recovery was less than $1.5 million.
490 There was a similar agreement between Mr Fox and Mrs Edwards, involving payments of smaller amounts. Similar agreements or draft agreements between Mr and Mrs Edwards on the one hand and Mr Murphy on the other were also exhibited.
491 Mr Edwards gave evidence that Mr Parr, another of the plaintiffs, made an oral agreement with him to pay "a share of anything he won" if he joined in the litigation. As for another of the plaintiffs, Mr Cawthorne, Mr Edwards' evidence was:
"... when he came aboard I put it to him that he should pay us something at the end but there was never anything in writing."
492 Mr Edwards admitted in evidence that he had received $5000 in cash from each of Mr Fox, Mr Smith, Mr Ey, Mr Thomas and Mr Parr.
493 It appears that Mr Hopcroft was linked into some of the arrangements, and like Mr Edwards, he stood to receive substantial sums if certain of the plaintiffs were successful. The evidence as to just what the arrangements were with Mr Hopcroft is not clear, but from time to time it appears that he has been working in conjunction with Mr Edwards in endeavouring to ferret out and amass evidence to assist the claimants against the Department and the director defendants, for which he stood to be recompensed.
494 Dealings between Mr Edwards and another of the plaintiffs whom he assisted, namely Mr Southwick, are particularly instructive.
495 When first challenged whether he had received any money from Mr Southwick, Mr Edwards' evidence was:
"Q. Are you able to tell the Court why you were given that money by Mr Southwick. A. To pay my bills, to live on. Q. It was to help you in these proceedings, wasn't it. A. I wouldn't say that. It was to pay my bills. Graham is a friend of mine. ..... Q. Are you saying that Mr Southwick sent you money just so that you could pay bills. A. To do what I liked with. Q. And what did you provide to him so that he would pay you money. How were you helping him. A. He simply gave me money, knowing that I was involved in the case."
496 Later, during the course of cross-examination, he gave further evidence as follows:
"Q. How much has Mr Southwick paid you. A. How do you mean quote "paid" me. Q. Paid you. A. Gifted (sic) you mean? Q. I don't care if its a gift or services rendered. A. Graham has given me a number of amounts of money over a period of years. Q. How much. A. Probably $20000, $25000 maybe."
497 Mr Edwards said that he could not remember whether or not the payments were made before Mr Edwards obtained Mr Southwick's file from the Fisheries Department which was on 9 September 1997.
498 The Southwick proceedings were issued on 22 October 1998. Mr Edwards' bank statements disclose that substantial sums of money in excess of $50000 in total were transferred from Mr and Mrs Southwick or his associated companies to Mr Edwards between November 1997 and April 2000. The period of time during which the payments from Mr Southwick or his associated companies were made, considered in association with the date upon which the first payment was received from Mr and Mrs Southwick, which in turn was soon after Mr Edwards obtained Mr Southwick's file from the Fisheries Department, leave me in no doubt that the payments, far from being a gift, were in fact payments extracted by Mr Edwards in consideration of the "assistance" which he was purporting to give to Mr Southwick with respect to the latter's proceedings.
499 I do not pause to go into the circumstances surrounding certain transactions between Mr Edwards and Mr Bowman. Mr Bowman paid very substantial sums of money to Mr Edwards from a date in 1985. Mr Bowman is not one of the plaintiffs in the proceedings. Mr Edwards suggested in evidence that the payments, which amounted to more than $50000, were gifts by Mr Bowman, although there is some suggestion that at one stage Mr Edwards agreed to help Mr Bowman with a book which the latter was writing. Eventually Mr Bowman sued Mr Edwards to recover the moneys paid. Mr Bowman became an inmate of Glenside Hospital, and he died in October 1990.
500 While Mr Edwards' dealings with Mr Bowman are highly suspicious, I make no reliance on them in reaching my findings as to Mr Edwards' lack of credit. I do so for two reasons. In the first place, it is clear that the Court has not been given a full account of the transactions involving him. In the second place, Mr Edwards' credibility is, in any event, destroyed by other uncontrovertible evidence.
501 Apart from the transactions to which I have referred, Mr Edwards also entered into an agreement with Mr Edmunds company, Smoothpool, with respect to Smoothpool's claim against Mr Pickering. A written agreement was tendered in evidence which, although unsigned, is dated 1995. Pursuant to the agreement, Mr Edwards stood to receive seven and a half per cent of the value of the abalone licence sought to be recovered in the Smoothpool proceedings, plus seven and a half per cent of any moneys obtained by way of damages, together with a further payment of $4000, by reason of having consented to act as a director of Smoothpool.
502 Mr Edwards' evidence was that he attended in court during as many of the 52 days that the Smoothpool trial ran as he could. But despite that close involvement with the case and the terms of the agreement, he was vague and evasive as to just what assistance he was providing to Mr Edmunds or his company. The most that he would say was that he provided "whatever assistance I could".
503 I should say that Mr Edwards established a bank account in the name of "Abalone Divers Action Group" into which he says that each of the plaintiffs whom he was assisting paid moneys from time to time. Although he denies ever taking any money out of the account for his own purposes, and maintains that it was paid to lawyers, he admitted that some payments had been made to his wife "for typing".
504 The relationship between Mr Edwards and the plaintiffs was not always harmonious, and the group of plaintiffs who were prepared to contribute and liaise with him varied from time to time. Mr Murphy was at one stage part of the group, but then left it to make his own way, for reasons not clearly explained in the evidence.
505 The evidence and the transactions to which I have so far referred under this heading leave me in no doubt that for a considerable period of time Mr Edwards has been making a business out of conducting the litigation and assisting others to conduct it. He has an ability to persuade people to part with very considerable sums of money for services which he is now able to describe only in the most nebulous of terms.
506 He said on several occasions during the course of giving evidence that he was "hungry for money". That he was candid enough to make that admission does not, of course, bear on his credit. But the efforts to which he has gone to make money out of the litigation, that is, both his own proceedings and the proceedings instituted by the others in the group, confirm the impression I have reached independently from other items of evidence that he is prepared to say or do anything in order to advance his claims.
507 The manner in which he has by various means promoted a tangled web of litigation, and the fact that he has such a vested interest in the outcome beyond the ordinary desire of any litigant to win, coupled with his concealment of the full nature and extent of his involvement with the other plaintiffs, must be accepted as one of the many matters which together destroy his credibility.
508 There were many other instances during the course of the evidence where Mr Edwards admitted to having made dishonest statements of one kind or another, or was proved to have done so.
509 The documentation given to the Department of Fisheries at the time of the sale of his abalone authority to Mr Haagmans contains a number of dishonest statements.
510 The memorandum of agreement dated 28 October 1980 evidencing the sale describes the consideration as $12500 for the "fishing vessel plus motors and associated equipment", $42500 for the remainder of the plant and equipment and $60000 for the "abalone fishing entitlement", a total of $115000.
511 In a supporting statutory declaration submitted to the Fisheries Department Mr Edwards confirmed the values to which I have just referred.
512 Under cross-examination Mr Edwards admitted that the value of $60000 attributed to the "abalone fishing entitlement" was a gross underestimate, but he would not concede that his declaration was false. Clearly, it was knowingly false.
513 Likewise, the declaration as to the value of the fishing vessel was knowingly false.
514 The boat was first constructed in 1977 and when first registered, Mr Edwards declared its value to be $5500. In the declaration made on 15 September 1980 to support Mr Edwards' application for a fishing licence and abalone authority for the 1980-1981 licensing year, he declared the value of the boat as $6000. That was only six weeks before he declared the value of it to be $12500 in the documents evidencing the sale.
515 Eventually, in cross-examination, Mr Edwards admitted that there was a "discrepancy". Clearly, in the declaration authenticating the values in the contract of sale, as submitted to the Fisheries Department, Mr Edwards falsely inflated the statement of value of the boat.
516 He also gave deliberately false evidence with respect to the condition of the boat at the time of the transfer of the authority to Mr Haagmans. He said in evidence that the boat had not shown any signs of metal fatigue and that its condition was "okay" at the time of sale.
517 In giving that evidence, Mr Edwards obviously overlooked the fact that in a letter to the Director of the Department of Fisheries dated 7 November 1980 he stated that the vessel:
"... shows sign of aluminium metal fatigue, and could develop a dangerous crack at sea at any time in the future .... It would be unwise to use the boat any more under commercial conditions. ....... He [Mr Haagmans] will be risking his life and the life of his deckhand if he does not immediately replace the ....... vessel I have just transferred to him with the authorisation."
518 Mr Edwards' misrepresentations concerning the boat went further.
519 Initially in evidence he claimed that he handed over the boat and the other items of plant to Mr Haagmans "on the spot" when the sale was effected. Subsequently it became clear that Mr Haagmans did not take the boat or the two vehicles and other equipment said to form part of the contract of sale.
520 In fact I am satisfied that there was a separate clandestine agreement executed by Mr Haagmans and Mr Edwards providing for the boat, the vehicles and the other items of plant to be retained by Mr Edwards by way of a variation of the formal sale contract. Mr Edwards maintained throughout the case a denial that there was any such side agreement, but the account of Mr Coates, the solicitor who attended to the documentation evidencing the sale, refers to a "long-hand preparation of further memorandum of agreement", and a letter from Mr Coates to Mr Haagmans dated 27 November 1980 refers to "a photocopy of a memorandum of agreement that relates to the $1 receipt".
521 I am satisfied that Mr Edwards has suppressed the separate side agreement, concealing its existence from both the Department of Fisheries and from the Court. Mr Haagmans' evidence throws some light on the true position:
"Q. Was there another document that dealt with that equipment separately. A. That it would not be part of the sale? Q. Yes. A. Yes. Q. Who prepared that document. A. ..... it would have been Mr Coates ....... Q. That document [Mr Coates' letter of 27 November 1980] refers to Mr Coates' forwarding to you a photocopy of a memorandum of agreement that relates to a $1 receipt. Have you searched for that document over the last year or so. A.. I have. Q. Have you been able to locate it. A. No, I haven't. Q. You told the Court that you didn't end up getting any of the equipment, including the boat. What was the reason for that. ........ A. The bottom line is, no, I didn't want the equipment. My main aim was to secure a permit, an abalone permit. ........ Q. Can you recall whose idea it was to prepare this separate agreement for $1 in relation to the agreement. I am told Mr Coates prepared it but whose idea was it. A. Mr Edwards. Q. Did he tell you why he wanted the two contracts and have the transaction carried out in that way. A. No, we didn't go into that discussion."
522 In his 1974 application for a prawn authority Mr Edwards untruthfully stated that the boat which he was hoping to use for prawn fishing in South Australia was "presently undergoing refrigeration". That was clearly not the case, as eventually he was obliged to admit.
523 The application which Mr Edwards made for a NEIS grant is a highly misleading document containing what Mr Edwards must have been aware were half-truths or deliberate untruths. Amongst the more glaring false statements in that document is the following statement:
"He [Mr Edwards] .... chose to establish an abalone fishing business in 1968 based at Port Lincoln in South Australia. ..... The principal [Mr Edwards] owned similar abalone business interests contemporaneously in Western Australia. The ventures were successful." (emphasis added)
524 Mr Edwards never owned an abalone business interest in Western Australia. Furthermore, the quoted passage was an extraordinary assertion by somebody who now pleads as part of his case against the director defendants that he was wrongfully prevented from "contemporaneously" setting up an abalone diving business in Western Australia while he held his South Australian abalone authority!
525 In the same document he describes his operation of the Red Garter Restaurant as a successful business, which clearly it was not, neither was his operation of Nickleby's Wine Bar, as to which he makes the same comment.
526 The NEIS application conveys the impression that Mr Vater and his companies which were involved in aquaculture were a major client and had approached Mr Edwards for advice and assistance. In his evidence before me Mr Vater could not recall that his company was ever a client of Mr Edwards' consultancy (Moonraker Research Group), and said that the suggestion that he ever used Moonraker Research Group as a fisheries consultancy for any of his aquaculture pursuits was "news to me".
527 Despite the fact that Mr Bell of counsel for the defendants made much of these and other examples of Mr Edwards' dishonesty during the course of the defendants' submissions, Mr Edwards in his very extensive closing written submissions made no reference to the examples of this which had been given, and did not attempt to explain them or cast his involvement in the transactions to which they relate in an innocent light.
528 I accept Mr Murphy as basically an honest witness. While he was drawn out in cross-examination to admitting some extreme and in some respect eccentric views as to political and social issues relevant to his attitude to the Department and its management of the fisheries, I remain of the view that basically he was telling the truth.
529 This does not mean that I accept all of his evidence as accurate. To a degree it was coloured by his feelings of antagonism towards the Department and the director defendants and what he believes to have been the poor treatment he received as an abalone diver at the hands of the Department.
530 There was also, in large measure, a degree of unconscious "shaping" of his evidence to fit the case which, many years after the relevant events occurred, he now wishes to pursue.
531 Likewise, I am satisfied that, perhaps unconsciously, he has allowed himself to be influenced by Mr Edwards, given the latter's position as "ringleader" of the group of plaintiffs, and has adopted as his own many of Mr Edwards' assertions against the defendants. In other words, there may have been an unconscious merger, to a degree, of both cases.
532 All of the director defendants who were named as defendants gave evidence. Some of them were elderly and their recollections were eroded by the passage of time.
533 Generally speaking, I accept their evidence. Where I am unable to accept it, this is a product not of dishonesty but of fading or imperfect recollection on their part.
534 The defendant Mr Olsen was the focus of lengthy cross-examination by Mr Edwards. At the time of giving evidence he was over 82 years of age.
535 The impression he gave suggested to me that he would have been careful of the proprieties of his office.
536 It is clear that he was administering a very difficult industry, but despite Mr Edwards' attacks on him, he seems to have done so effectively and with particular regard to the value of liaising with the fishermen themselves.
537 He was capable of the occasional unguarded, outspoken comment, which might have been regarded as offensive, but this does not detract from his veracity as a witness. In particular, the expression which he used on one occasion in which he described abalone divers as a "disorganised rabble of beach bums" does not deflect me from the view which I take as to his credit with respect to his evidence relevant to the issues in these proceedings. I note that he used that expression at a meeting of AFIC (SA Branch) on 17 January 1969, when there were over 100 abalone permits on issue.
538 True it is that both Mr Olsen and some of the other director defendants were at times confused as to the owner/operator policy. However, I think that what appears to be some confusion in that respect stems from the fact that it was never clearly recorded in detail, nor were the differences in its application between the various controlled fisheries clearly defined.
539 Most of the director defendants confessed to a lack of complete understanding of the legal ramifications of trusts and of some other legal concepts, but this does not reflect on their credit.
540 A group of expert witnesses gave evidence as to the fishing industry.
541 Evidence was given Dr Scoresby Shepherd, a marine biologist. His evidence was particularly valuable as he has been employed by the South Australian Department of Fisheries from 1968, during which time he has made a particular study of the abalone fishery.
542 Before then he obtained an LLB degree from Adelaide University and lectured in law and practised law until he joined the Department of Fisheries.
543 While practising law he participated in a bottom survey of Gulf St Vincent, and was actively involved as an honorary researcher with the South Australian Museum, studying marine invertebrates. He has written or contributed to a large number of scientific papers. During his period with the Department and with an allied body, South Australian Research and Development Institute (SARDI), he was responsible for a number of research activities, particularly in connection with the abalone populations, both in Australia and various places abroad.
544 It is clear that he is of high standing within his profession and a world-renowned expert in the study of abalone.
545 I accept his evidence and prefer it to what little evidence there was which conflicted with it. In particular I accept the estimations which he made as to the extent of the abalone resources in South Australia over the relevant period.
546 Although some criticism was advanced as to particular techniques used by him in that respect, I am satisfied that his estimations were broadly correct and provided a reliable foundation, in the first place, upon which the Department based a number of its policies involved in the regulation of the abalone fishery, and in the second place, for the purposes of resolution of certain issues posed in these proceedings.
547 Professor Parzival Copes, a resident of Vancouver, British Columbia, Canada, is an economist with a particular interest in fisheries. He has been employed as Professor of Economics at Simon Fraser University, British Columbia, for many years, and has written or contributed to many books, reports and articles.
548 In 1986 and in 1990 he undertook studies for the South Australian Government as to prawn fisheries management in South Australian waters, particularly with reference to Gulf St Vincent and Investigator Strait, and in 1978 prepared a report for the South Australian Department of Agriculture and Fisheries on resource management for the rock lobster fisheries of South Australia. In 1976 he prepared a review of South Australian fisheries for the Department of Agriculture and Fisheries.
549 He prepared a report on the instructions of the Crown Solicitor for the purposes of these proceedings. I accept the broad thrust of his report and the central conclusions to which he was drawn.
550 Evidence was given by Dr J.D. Prince, an Australian marine biologist acknowledged internationally as an expert on abalone fisheries. Dr Prince impressed me, and I accept his evidence.
551 Mr Brian Jeffries, who is president of the Tuna Boat Owners' Association of Australia since 1988 and a former chairman of the Australian Seafood Industry Council, was called by the defendants to speak of the tuna fishery. He had an intimate knowledge of that industry. I accept his evidence in preference to Mr Edwards' evidence as to the state of the tuna fishing industry at the relevant time and the feasibility of a commercial operation in the tuna industry of the kind which Mr Edwards suggested he wanted to develop.
552 Mr Geoffrey Jones was called by the defendants to give evidence as to the state of the marine scale fishery. He has qualifications in zoology and much experience as a research officer in the marine scale fishery of South Australia. Since 1977 he has been the chief researcher in South Australia involved with the biological assessment of the species taken in the South Australia marine scale fishery. He is currently employed as a researcher with the South Australian Aquatic Sciences Centre. I accept his evidence.
553 As for the accountants, I accept all of those who gave evidence as competent in their fields, and I accept the accuracy of their calculations. Apparent differences between them may be explained by reference to differences in assumptions which they were asked to make, and differences in the tasks which they were asked to address.
554 I accept, therefore, the evidence of the accountants called by the plaintiffs, namely, Mr Irving and Mr Staker. But in both instances they were not invited to bring any critical judgment to bear upon the feasibility of the two plaintiffs launching into the business operations which they were asked to assume would have been conducted, and their evidence stands or falls according to the factual findings as to those matters.
555 As to that, the evidence of Mr Wishart I found particularly helpful, and I accept his evidence without qualification.
556 As for evidence of valuation, two witnesses gave evidence. They were Mr Aschberger on behalf of Mr Edwards and Mr Morris on behalf of the defendants. Where their evidence conflicts, I prefer the evidence of Mr Morris over that of Mr Aschberger.
557 It is unnecessary to examine further the differences between the accountants and my preference as to their evidence where it conflicts, as the plaintiffs' cases on liability fail, and it is unnecessary for me to go into any question of assessment of their damages.
558 I did, however, make use of the evidence of Mr Irving and Mr Staker in particular, in order to assist in understanding the nature of the plaintiffs' claims.
559 Mr Brian Chatterton, a former Minister of Agriculture, Fisheries and Forests in the Dunstan and Corcoran Labor Governments gave evidence by video link from Italy where he has resided since 1990. He held his portfolio as Minister between June 1975 and late 1979 and was then shadow Minister in the same area until 1982.
560 When the Bannon Government was returned in 1982, he again held the post of Minister of Agriculture, Fisheries and Forests until he resigned from office in April 1983.
561 Mr Chatterton gave evidence as to the owner/operator policy and as to other policies which underscored the administration of the legislation by the director defendants. I accept his evidence.
562 I do not accept the evidence of Mr John Verrier, called by Mr Edwards, on the issues which his evidence addresses. I accept the contentions as to Mr Verrier contained in the defendants' written submissions, which demonstrate that for a variety of reasons, he had an axe to grind with the Department of Fisheries, by whom he had been employed as an Assistant Inspector of Fisheries between August 1968 and February 1971.
563 I reject his denial of a conversation with the defendants' witness Mr Jeffries. Although that conversation did not specifically relate to Mr Edwards' proceedings, that false denial is a matter to be taken into account in assessing his credit generally.
564 I was not impressed with his demeanour, and his responses to questions were, at times, evasive and unconvincing.
565 It is unnecessary for me to set out my views as to the credit of other lay witnesses who were called, as I explain during the course of the judgment my approach to their evidence.
B. WHY THE PLAINTIFFS SOLD OUT OF THE ABALONE FISHING INDUSTRY
566 Mr Edwards sold out his interests in the abalone fishing industry in October 1980. The contract of sale which he signed with the Haagmans was dated 28 October 1980. It states that the sale price is $115000. I have already commented on the misleading evidence given by Mr Edwards as to the manner in which that figure was made up.
567 Be that as it may, the question which needs to be addressed is the reason why Mr Edwards sold out.
568 Mr Edwards' case was that he sold out principally because he thought it unsafe to go on diving with only one in the water.
569 During his evidence-in-chief there is the following passage of evidence:
"Q. At all events, you say that what motivated you to sell was concern at the fact that you didn't think that it would be safe to go on diving, being the only one in the water. A. Yes, more than anything. Q. Was that the main reason you sold. A. I would say that would be the predominant reason. I can't think of anything outstanding that comes to mind."
570 Furthermore, it was Mr Edwards' case that if he had been able to employ divers to dive on an ongoing basis, that is, other than simply as relief divers, rather than get out of the industry, he would have remained in it, employing divers and building up his "empire" by that means, by means of direct holding of authorities, by means of trusts and by corporate holdings through his company.
571 Elsewhere during the course of cross-examination he said that he was happy to get out as a diver, but not to get out of the industry "as such".
572 Clearly, it was the introduction of the regulations permitting transferability which was the trigger which prompted Mr Edwards, and for that matter a number of others, to leave the industry at that stage. The alacrity with which Mr Edwards sold out once transferability provisions were introduced makes it plain that he was keen, indeed anxious, to leave when he did. I am not satisfied that he has been frank with the Court as to the underlying reason.
573 I accept that he did entertain a degree of fear in diving. But I do not think that it was the hazards proposed by diving on his own, but rather the fear of a shark attack, even though he was using a shark cage. He continued to speak to a number of others of his fear of sharks even after he had taken to using the shark cage.
574 Contrary to his evidence, I find that his predominant motive in quitting the industry was his belief that the abalone fishery in South Australia was fished out, and that there was no future in it.
575 There were some other factors which came into play. He was restless and wanted to try his hand at other things. I do not discount the possibility that he also had in mind investing his money in a way that would make it difficult for his former wife to have any of it.
576 As to that, I accept the evidence of Mr Thorpe during the course of his examination-in-chief:
"Q. Did he (Mr Edwards) say anything about what he was going to do with the money that he got from Mr Haagmans. A. He was going to invest it, and in particular, he wanted to put it aside so his ex-wife couldn't get any part of - get her hands on it." (emphasis added)
577 Evidence that Mr Edwards believed at the time that the abalone fishery was fished out is overwhelming.
578 In the first place, a number of comments written by Mr Edwards on his catch returns furnished to the Fisheries Department make it clear what his belief was. The catch returns include a column headed "Comments" with a sub-heading "State of this abalone stock, recruitment, etc". In his return for January 1979 Mr Edwards stated that the stock was "over-fished ... sadly and badly over-fished". In a return in August 1978 he described the area worked by him as "badly over-fished", and in the following month, September 1978, he described it as "critically over-fished". In his return for October 1978 he described almost every area fished by him as "critically over-fished". On that return he added the expression "the abalone industry zone A, B, C will be destroyed in six months - critical".
579 When four new licences were issued in 1978 Mr Edwards put on his return, "The four new licences was a gross error on the department's part. Recall immediately!".
580 At other times he suggested that catches in the Central Zone were better.
581 Throughout 1979 there was a developing crescendo of comments by him suggesting that one or more divers should be transferred from the Western Zone to the Central Zone. As he put it, for example, in his return of January 1980, "... to take pressure off the over-worked ABC zone".
582 Evidence, which I accept, was given by a large number of witnesses as to statements made by Mr Edwards at various times, particularly towards the time when he sold out of the industry, in which he reiterated his belief that the industry was no longer viable. At times he expressed himself in colourful language.
583 Mr John Carroll, the skipper of Mr Edwards' prawn boat, said that Mr Edwards had told him "... he was an abalone diver and I understood he wanted to go out of the abalone diving industry". Mr Danny Thorpe, an abalone sheller who worked in that capacity for Mr Edwards between 1977 and the time when Mr Edwards sold his licence, gave the following evidence during the course of his examination-in-chief:
"Q. During the period from 1977 until 1980 when Mr Edwards sold out of the abalone fishery, did he ever express to you any views as to the state of the fishery. A. When I worked with Mr Edwards he was always on about the industry being knackered. Q. Was that his word or someone else's. A. Yes, knackered, stuffed. He was always wanting to have transferability and get out, all he ever waited for was transferability to get out."
584 Elsewhere he said, "... he [Mr Edwards] was always on about how the game was finished".
585 I accept Mr Thorpe's evidence as to a conversation which occurred when Mr Thorpe was travelling in a car with Mr Edwards after Mr Haagmans had handed over a cheque for the purchase price of Mr Edwards' authority at Elliston. I accept in particular that:
"... on the way home [from Elliston] once he had the money in his hand his exact words - and I've never forgotten them - was 'that dickhead will never pay that licence off, because the ab game is stuffed'."
586 I accept also the evidence of the witnesses Rex Bichard, Norm Craig and Leonard Newton that on various occasions Mr Edwards had told them that the abalone industry was "stuffed" or "buggered".
587 I accept two witnesses who had dealings with Mr Ey to buy his authority. One of those witnesses was Mr Graham Ford who deposed that he had had a conversation with Mr Edwards at Mr Edwards' house. Mr Ford's evidence was:
"... he told me that the industry was just about stuffed and I'd be silly to buy a licence."
588 Mr Edwards' comment to Mr Ford influenced the latter to call off his attempt to buy Mr Ey's authority.
589 In fact it was another witness, Norman Craig, who eventually bought Mr Ey's authority.
590 Mr Craig, who was an abalone diver himself, had had a long association with Mr Edwards since the late 1960s. They often fished together.
591 It was Mr Craig who went with Mr Edwards to Western Australia. Mr Craig gave evidence of discussions with Mr Edwards at about the time the latter was selling his authority to Mr Haagmans. He said:
"Q. At about that time, either shortly before or shortly afterwards, did Mr Edwards ever say anything to you about why he was getting out of the fishery. A. At that particular stage there was two possibly three reasons he gave. One was the fishery was going downhill; the second one was that he had animosity towards the Association and the divers in general, for not agreeing to push the cause of transferability, and also the cause of having ownership in a company name. Q. At the time that he got out of the fishery did he try to talk you into doing anything. A. Yes. Around about that time, during those years - I'm talking probably three or four years - he discussed that I should get out of the fishery. Q. Did he tell you why you should get out of the fishery. A. Because he didn't think there was the recuperative power of the stocks there. .... He believed it would collapse quickly."
592 Mr Craig also gave evidence that at the time Mr Edwards sold out the latter had become "very enthusiastic" about prospecting in streams for gold. Mr Craig's evidence was:
"... he thought it would be a good business. He had heaps and heaps of books on it and read up about it in those books."
593 Another contributing factor to Mr Edwards' decision to sell out of the industry was the substantial increase in the price of abalone during the last year of his operation. As it was put by the accountant, Mr Wishart:
"In that 1980 year, the last year that Mr Edwards dived for abalone, the price increased by 56%. This price increase would have had a significant effect on the value of the licence and it is quite probable that anyone wishing to sell would have seen it as a propitious time to do so." (emphasis added)
594 In summary, Mr Edwards quit the abalone industry because he believed that it was fished out and that there was no future in remaining in it.
595 He was influenced as well by the fact that transferability having been introduced and a substantial increase in the price of abalone having just occurred, it appeared to be a good time to sell.
596 He was and remains essentially of a restless disposition, and he felt that the time had come to try his hand at something else.
597 I do not believe that he would have contemplated someone else holding his authority for him in trust, or the perpetuation of his abalone diving operation by use of employee divers, even if those options had appeared to be open at that time, as neither of those options would have returned to him the value of the authority. As was the case with a number of abalone divers, selling the authority meant that he could cash in on the very substantial value which it represented at that time. It opened up opportunities for investment for him, and it helped to secure his position vis a vis his ex-wife.
598 Mr Murphy's situation and the reasons which prompted him to leave the industry are quite different from Mr Edwards'.
599 Mr Murphy was active in the industry, at least as a diver on his own account, for a much shorter time than was the case with Mr Edwards. As I have explained, it was only in December 1980 that Mr Murphy bought an authority and began diving on his own account, and he sold out in May 1983. The nature of his operation was different from that of Mr Edwards. He fished mainly for black lip as opposed to green lip abalone. Furthermore, he rarely used relief divers, and it does not appear from his evidence that he maintained any significant business interests in parallel with his abalone diving operation.
600 When Mr Murphy opened his case, I was given the impression that the main factor behind his decision to sell out of the industry was the injury to his back which he suffered in January 1983. However, as his evidence unfolded, it became increasingly clear that Mr Murphy's decision to sell out of the industry more likely had its genesis in other factors.
601 In late 1981 or early 1982 an article appeared in Rural Politics, a publication of the Labor Party Rural Affairs Committee which criticised what were seen to be adverse consequences of the Liberal Government's policy permitting transferability, more particularly the dramatic escalation in the market price of abalone authorities which it was suggested had occurred as a result.
602 The Rural Politics article was discussed at a committee meeting of the Abalone Divers' Association on 12 January 1982. Mr Murphy's evidence was that the article "scared the hell out of me".
603 Mr Murphy first advertised his authority for sale in October 1982. Although the Liberal Government of Dr Tonkin was still in power, the election campaign at that stage was well under way and resulted in the election of the Labor Government under the premiership of John Bannon, who came into power on 6 November 1982.
604 On 30 October 1982 an article in the Sunday Mail newspaper quoted the then Opposition spokesman on fisheries, Mr Chatterton, as saying:
"... huge increases in the cost of fishing licences had prevented many young people from entering the industry. An ALP government would investigate the possibility of granting more authorities."
605 Mr Chatterton is further quoted as suggesting that the Government (the then Liberal Government) had "given in to pressure groups and limited the number of authorities to increase their value", referring to the fact that the value of an abalone authority had increased from $20000 some three years before then to $150000 at that time.
606 In his evidence, Mr Murphy said that he was concerned at that report and other material which confirmed his fear that a Labor government would issue more authorities.
607 The Sunday Mail article precipitated a meeting of the Abalone Divers' Association the next day to discuss what action should be taken in light of the article. That meeting supported the placing of a political advertisement in the press in favour of the current government.
608 The advertisement was placed in The Advertiser of 4 November 1982. It was a full-page advertisement purporting to be inserted on behalf of "the South Australian fishing industry" and was in general laudatory terms stating that the last three years had "seen more stability, confidence and progress in fisheries management than in the whole preceding decade".
609 While Mr Murphy does not appear to have shared Mr Edwards' gloomy outlook as to the future of the industry, he regarded any possibility of the issuing of more permits as a threat both to his livelihood and to the value of his authority which he had worked so hard to obtain and pay off. It was against that background that his evidence was that:
"My attitude at the time of advertising was Chatterton had come on with this threat of the new licences, granting new licences. I wanted to feel the market to see which way I should jump should he decide to do that. I was panicking, working hard, sore back ... they demoralised me with all this sort of talk."
610 The reference in that passage of evidence to his sore back and other evidence which he gave as to that make it clear that although there was a definitive injury to the back in January 1983, the continued stresses of diving had already before then started to give rise to some back symptoms, although not of a disabling kind.
611 He gave evidence, though, that he "made the final decision to sell the licence when the back failed".
612 After his back failed, Mr Murphy took on a sheller, Mr Bichard, who had shown some interest in buying. When eventually Mr Bichard did not proceed with the purchase of the authority, he took on Mr Bascombe in the hope that he might buy, as eventually he did.
613 Throughout his evidence Mr Murphy identified various reasons for selling out. At one stage he said that a factor in his decision to sell out was:
"... the political behind-the-scenes threats ... open threats of putting in more licences and reducing the value of my property ... Even though I just discovered a massive hit of abalone ... I was so scared of the pollies that I bailed out." (emphasis added)
"Another reason [for getting out] was I was still in debt. I knew that the tax man was going to catch up with me."
Elsewhere he said that they (the divers) knew that the new regime (the new Labor government) "had no company ownership coming".
614 It is clear also from his evidence that he was concerned at having reached the age of about 40 in 1983 and was aware that many abalone divers did not feel up to maintaining a diving career much after that age. He was also concerned that his brother was diagnosed with necrosis, and Mr Murphy did not know if there was a genetic predisposition for him to contract the same disease.
615 While Mr Murphy was not so garrulous as Mr Edwards in the sense that there was not the same sort of evidence forthcoming from persons to whom he had complained about the industry and indicated his reasons for leaving it, I am satisfied on the whole of the evidence that he left the industry for a combination of factors, predominant amongst them being:
(a) a fear that the value of his licence would be diminished by an incoming Labor government issuing more licences; and
(b) his health, problems with his back having been exacerbated by the incident which occurred in January 1983.
616 Furthermore, although he might have remained in the industry if he could have employed somebody to dive for him, he realised that this was not permitted by the Department. The niceties of the legality of that policy were not something which he applied his mind to.
617 As for trusts, despite his evidence to the contrary, I find that he did not believe that a feasible option was to have his licence and authority held in trust for him, as he heard of the problems occasioned with that sort of transaction between Edmunds and Pickering.
"The first I knew of trusts - I didn't know that such a thing existed - was when Pickering ran off with Edmunds' licence. I was intimately involved but certainly my brother was. Mr Pickering came to see my brother - older man speaking with a young fellow in a field he didn't like - and my brother called in Mr Coates [solicitor] and said 'What can we do about this?' and organised it for him and he took off with the licence. That put me right of trusts but that is what I learned what a trust was. I had no idea about trusts before then." (emphasis added)
619 He substantiated that statement in opening during the course of evidence. See, for example, the passage in his cross-examination:
".... I didn't know what a trust was until Pickering did the runner ....."
620 Mr Pickering "did the runner" or repudiated the trust arrangements between him and Mr Edmunds in June 1982.
621 From time to time Mr Murphy suggested that a representation had been made by the defendant Mr Stevens by letter to the Abalone Divers' Association read out at about the time of the letter to the Association which was understood to be an indication that the Department would not tolerate a situation in which a licence or authority was held in trust.
622 It appears that the letter was in fact a letter dated 28 April 1981 addressed to Mr Garnaut, secretary of the Abalone Divers' Association over the signature of Mr Stevens. The letter reads:
"Dear Mr Garnaut At the Abalone Management Liaison Committee meeting of 12 February 1981 I undertook to investigate the situation where your association believed that a person was still controlling an abalone authority, although it had been transferred from that person. Following a further check of the documents lodged with this Department for those abalone authorities which have been transferred, there is no evidence to suggest that any person who has transferred an authority still retains control over that authority. Should there be evidence at any time in the future of this situation occurring, I will cancel the authority concerned and call for applications under criteria established by the Abalone Management Liaison Committee for the reallocation of that authority."
623 I do not accept that Mr Murphy understood the letter or whatever report was given to him about the letter to be addressing the question of trusts. To do so would be to run counter to the clear evidence which he has given that he had no concept of what a trust was until "Pickering did the runner", which was over a year after Mr Stevens' letter.
624 As I have said, it was not until well over a year later that Mr Murphy could have heard anything about trusts. But what he heard then served to put him off the idea that they represented a means of perpetuating his involvement with the abalone industry by some form of indirect ownership or control.
625 There is evidence from Mr Bascombe, the purchaser of Mr Murphy's licence, of a conversation he had after he had handed over the purchase price. His evidence, which I accept, was:
"I asked Terry if he had any records or maps that I could now have so I could see where he dived and where maybe I could dive in the next few years to catch up on it, and Terry told me that basically the best thing you could do was to go to Drummond, he had done very well there, I'd be a fool to go anywhere else. He went on to explain that he had the best out of the licence and I might pay it off but I would not do as well as he did. He had skun the industry........." (emphasis added)
C. THE DEFENDANTS' REPRESENTATIONS AS TO EMPLOYEE DIVERS, CORPORATE HOLDING, PARTNERSHIPS AND TRUSTS
626 As I have explained, the Full Court held that as a matter of law, throughout the relevant period a company or partnership could not directly hold an abalone permit or authority. It follows that so far as the plaintiffs assert that there were misrepresentations by the defendants to the same effect, the so-called misrepresentations were true and could not found an action for negligent mis-statement or misfeasance in public office.
627 I so ruled on the submission by the defendants that there was no case to answer, with the result that those particular alleged misrepresentations need not be considered further.
628 It is not surprising that against that background the emphasis in the presentation of Mr Edwards' case was on alleged representations denying the right of employee divers to dive and take abalone, and on the alleged assertions by the defendants which denied the right of Mr Edwards or his company to enjoy the beneficial ownership of abalone authorities by means of a trust, the trustee being the diver and holder of the abalone authority.
629 Mr Murphy, on the other hand, eschewed reliance upon any representations which might have been made as to employee divers, or as to trusts, at least up to the time when he left the industry. This was on the footing that he conceded that he would not have been inclined to avail himself of any such option, even if it had been thought to be open to him prior to his leaving the industry. But he maintained that use of employee divers, or some form of trust holding of his authority were options which he would have considered when he made the decision to quit the industry in 1983, had the alleged misrepresentations not been made.
630 It is convenient to deal first with the allegations as to alleged representations by the defendants as to employee divers.
631 In the case of Mr Murphy's claim, my ruling on the no-case submission puts him out of court on that part of the claim as relates to the defendants stipulation that employees could not dive to take abalone. This is because in that ruling I upheld the imposition of conditions limiting the circumstances in which an employee might take fish as a valid exercise of the power conferred by the Fisheries Act (Amendment) Act 1980 which came into force on 27 June 1980. It was after that, namely towards the end of 1980, that Mr Murphy entered the industry. During the whole of the time that he operated as a diver, his licences to employ were endorsed with conditions which prevented him from utilising the services of employees to dive. Given the validity of those conditions, any claim by him with respect to use or non-use of employee divers must fail.
632 As for Mr Edwards' claim in this respect, in his Statement of Claim Mr Edwards alleges that at all material times he had "a lawful right to employ a person to take fish, including abalone, for sale" in that he held a licence to employ persons which had been issued under the Fisheries Acts, and that on a proper construction of the legislation the employee was entitled to take fish for sale, as opposed to being confined to the above-water functions associated with the control of the boat, supply of air and shucking.
633 He further alleges that he was denied the right to employ divers to take abalone by reason of various directions given from time to time by the director defendants and various named inspectors between 1968 and 1980, the substance of the directions being that he was "not to employ a person to take fish, including abalone, for sale in the exercise of the plaintiff's rights under the licences and other statutory rights" which he held.
634 While the evidence given at the trial as to the specific directions pleaded by Mr Edwards did not square with the particulars asserted in the Statement of Claim, there is no doubt that the defendants took the view that an employee engaged under a licence to employ could not dive to take abalone but was confined to the other above-water tasks to which I have referred. They made this known to the abalone divers in various ways, including by the giving of directions by the fisheries inspectors who dealt with the abalone divers. Indeed, it appears that if an inspector found an employee wearing a wet suit while on a boat being used for abalone diving, this was regarded by the inspector as a suspicious circumstance provoking the need to investigate whether or not the employee had been diving.
635 There was lengthy cross-examination of the director defendants as to the reason why they held the view which they did as to the limited rights which could be exercised by employees, and why they made or caused to be made the directions which gave effect to their views.
636 In their evidence, the director defendants who were called variously described the prohibition against employees diving for abalone as a matter of policy, or in some instances, as part of what they believed to be the regulatory scheme for the control of abalone diving laid down in the Act and Regulations.
637 As to the former, for example, Mr Trumble gave evidence that he believed that Minister Chatterton knew of the policy against employees diving, and approved it. He said that he believed that it had come up for discussion between him and Minister Chatterton on a number of occasions. Elsewhere he said that he believed that it was a policy that the Government had approved.
638 Furthermore, his evidence was that to have allowed existing permit holders to increase the effort by employing other persons "to dive with or as well as, or in tandem with them" would have caused an (unacceptable) increase in effort. He said that "philosophically" the Government of the day while he was in office believed that any additional access should be shared among new entrants to the fishery rather than by employees.
639 Mr Olsen on the other hand gave evidence from which I infer that he believed that the prohibition against employees diving for abalone was a consequence of the terms upon which the abalone permits were issued. He said on a number of occasions that his belief was that under the statutory and regulatory scheme the permit to take abalone was personal to the holder; that the holder was the unit of effort; and that all diving for abalone, except in the case of the relief diving provisions, must be by the permit holder.
640 Some support for Mr Olsen's view may be gained from a consideration of reg 4(a) of the Preservation of Abalone Resources Regulations 1968 which provided, subject to exceptions which are not material for present purposes:
"... [a] person shall not by diving or by any other method whatsoever, take abalone from or under abalone waters unless that taking is effected pursuant to an abalone permit and in accordance in all respects with the conditions subject to which that permit has effect."
641 To the same effect was Reg 4(1) of the Preservation of Abalone Resources 1971, and Reg 7 of the Managed Fisheries Regulations 1971.
642 Mr Olsen took the view that given that the permit to take abalone was endorsed on the licence of the abalone fisherman who had obtained the permit, he was the only person authorised to dive.
643 Neither Mr Olsen nor the other director defendants had occasion to consider the legal effect of the provisions in the 1917 and 1971 Fisheries Acts relating to licences to employ.
644 Under the 1917 Act, the Chief Inspector might issue to a licence holder "an employee's licence to take fish and oysters" (s 14a(1)), "fish" being defined to include every species of fish, which would include abalone.
645 Under the 1971 Act, the licence to employ was a licence authorising the holder of a fishing licence "to employ persons to take fish" (s 32). Once again, the definition of fish included abalone.
646 It is clear that none of the director defendants considered the legal effect of the words in the two sections to which I have referred which were accepted by the Full Court as making it clear that the licence to employ entitled the employee to take fish. That the director defendants had no occasion to attempt to construe those provisions, or to seek legal advice as to them, is in part explained by reason of the fact that no-one ever challenged the director defendants on the matter or suggested otherwise.
647 Indeed, the prohibition of employees diving appears to have been supported by the abalone divers themselves through the Abalone Divers' Association.
648 For example, at a general meeting of the Abalone Divers' Association held on 8 January 1980, possible requirements for transferability which had previously been agreed to at a meeting of the Abalone Liaison Committee were endorsed by resolution of those present. The points endorsed included:
"6. Only a licence holder or his duly authorised relief diver will be permitted to dive from an authorised abalone boat."
649 Indeed, preceding discussions between the Association and the Department over many years relating to various changes which were made to the relief diving provisions and the relief diving provisions themselves, all proceeded on the tacit assumption that were it not for the relief diving provisions, only the abalone permit or authority holder could dive and take abalone.
650 Mr Edwards was prone to write lengthy, argumentative letters over every aspect of the Department's policy with which he had a complaint or grievance, but there is no evidence of Mr Edwards challenging this aspect of the regulation of the industry.
651 Furthermore, the director defendants are not to be taken to be at fault in failing to anticipate that years later when the Full Court in 1996 came to address as a specific question of law whether the prohibition of employee divers was consistent with the relevant provisions of the Acts and Regulations, the answer would be in the negative.
652 At the end of the day, I am satisfied that in the case of each of the director defendants who gave evidence, to the extent that it has been proved that they gave directions prohibiting the use of employees to dive, they believed that it was a valid direction, in the sense that they were authorised to make it, having regard to the terms of the Act and Regulations, or they believed that as a matter of policy it was justified in the sense that the additional effort which would have resulted from the employment of employee divers to take abalone would have led to the collapse of the industry.
653 In my opinion, their belief as to the potentially disastrous impact on the viability of the abalone resources of the use of employees to dive was well founded. In reaching that view, I rely particularly on evidence of Mr Scoresby Shepherd, which I accept, to the effect that the industry would not have been able to sustain, through the 1970s and 1980s, a doubling of the amount of fishing effort which would have resulted from each diver having an employee entitled to dive and take abalone, and that if that had eventuated he would have recommended very strongly that action should be taken quickly to limit the increase in effort.
654 Realistically, despite arguments put to me to the contrary, which I reject, if employees were allowed to dive and take abalone, all of the abalone divers are likely to have availed themselves of the ability to use their employees to do so.
655 Against that background, I summarise my findings of fact on this issue as follows:
(a) In various communications to abalone divers in general and Mr Edwards in particular, the director defendants made statements and gave directions to the effect that employee divers could not dive for and take abalone.
(b) The director defendants honestly believed either that the statements and directions were lawful as the expression of administrative policies authorised by the Minister and the Government of the day, or that they were justified on a proper construction of the Acts and Regulations.
(c) No question was ever raised, whether by abalone divers or others, as to the lawfulness of the directions at the time when they were given.
(d) All of the director defendants believed that to allow employee divers to dive and take abalone would result in a substantial increase in diving effort which would, in turn, be likely to lead to a collapse of the fishery.
(e) The view that it would be likely to lead to a collapse of the fishery was correct.
(f) If any question had been raised as to the lawfulness of the directions, the director defendants would have sought legal advice and taken measures to ensure that diving effort was not increased, whether by refraining from issuing licences to employ, by closure of the fishery, by imposition of a quota, or by such other means under the existing legislation as might have been available, or as a last resort by seeking amendments to the legislation.
656 I turn now to the separate question of alleged representations by the defendants which were said to deny the right of abalone divers to enter into arrangements which would result in their licences, permits or authorities being held by another in trust for them.
657 The pleadings in which both plaintiffs advanced their claims on this head are somewhat fragmentary.
658 In his Statement of Claim (para 16A) Mr Edwards pleads that on 15 September 1980 he and Deep Sea Ark made application to the defendant Mr Stevens to have issued to him as trustee for and on behalf of Deep Sea Ark:
"(a) an A-class fishing licence by way of renewal; (b) an abalone authority in replacement of the abalone permit; and (c) a licence to employ a person to take fish by way of renewal; and (d) a boat registration certificate by way of renewal."
659 Mr Edwards further pleads (para 17) that between August 1980 and October 1980 Mr Stevens failed to "consider and determine according to law, and in breach of his statutory duty" properly to determine the application. He asserts that Mr Stevens failure to do so was by reason of a policy which he knew was not authorised by and was inconsistent with the 1971 Fisheries Act and the regulations thereunder, that policy being in part a policy "to refuse to countenance the transfer, assignment, creation of joint interest in and charging of abalone permits and A-class fishing licences" (para 18A(i)).
660 Although the policy as pleaded did not refer to trusts, separately in the Statement of Claim (para 19A) Mr Edwards asserts that the A-class fishing licence and his boat and boat authorisation and registration certificates were:
"(i) alienable at law; and (ii) capable of being impressed with an enforceable trust by the first plaintiff in favour of the second plaintiff; ...."
661 He goes on to plead (para 19B) that additional A-class fishing licences and licences to employ, and additional boats, whether in respect of the Western, Central or Southern abalone zones were similarly:
"(i) alienable to either of the plaintiffs at law; and (ii) capable of being contemporaneously impressed with an enforceable trust by the holder thereof (whether the first plaintiff or another) in favour of the second plaintiff (or the first plaintiff as the case may be); ...."
662 He further alleges that as a result of the "conduct and policy" of Mr Stevens, he and his company were deprived of their rights, inter alia, to "(d) create or grant or otherwise alienate interests, at law or in equity, in the licences, permit, certificates and authority" which they held "and/or the benefit of profits of exploitation therefrom" (para 20).
663 Mr Murphy's plea as to this aspect of the matter is rather more direct. He asserts (para 9) that between 1980 and 1983 the defendant Mr Stevens and fisheries officers under his direction and control represented orally and in writing to Mr Murphy that the latter's:
"... A-class fishing licence and the abalone authority or authorisation certificate issued with respect to the plaintiff's boat were not capable and were believed by the first-named defendant to be not capable of being impressed with a trust binding the holder thereof or etc ........"
664 At the trial, the evidence, particularly the evidence given by Mr Edwards, deviated from the pleadings.
665 During the course of his examination in chief T2230] he said:
"I was told they [permits and fishing licences] can't be the subject of a trust. Q. Who told you that and when. A. Mr Olsen, Mr Kirkegaard. Q. Is that from the early days. A. Inspectors. Right through, yes. Q. From '68 onwards. A. I was written to in about 1973 by Mr Olsen saying the owner had to be the operator in prawns, crayfish and abalone. They could not be the subject of operation by someone who didn't own it. The owner had to be the operator. Q. But an owner could be an operator but hold the proceeds in trust for someone else. Did you understand that. A. Now you are moving to the proceeds as against the licences themselves. We were told right through my career, by all the defendants, that whoever caught the fish, he had to catch it for his own benefit, his own exclusive benefit, and they couldn't be caught for the benefit of another. We were told that .... There were to be no trusts over licences or the profit streams from them." (emphasis added)
666 He repeated evidence to much the same effect during the course of his examination and cross-examination.
667 I note in passing that his assertion in the passage which I have quoted that the fish had to be caught for the exclusive benefit of the fisherman is inconsistent with his own experience, in that for many years before his first marriage ended, Mr Edwards accounted for the profits of his abalone sales through a partnership with his then wife.
668 Mr Edwards also gave evidence that "around the time of transferability" (which I assume was some time in 1981) he talked to Mr Stevens:
"... about the transferability concept; that my company wished to purchase licences and authorities; that I wished to retain mine in trust, or in some way retain ownership and get the benefits of what I already had, and to expand my own interests as well as my company ....."
669 There are several other passages of evidence where Mr Edwards suggests that in a telephone conversation at about the time transferability came in Mr Stevens told him that there were to be "no trusts or absentee ownership". Mr Edwards spoke of applying, on 15 September 1980:
"... to hold it (the authorisation certificate) in trust for the company, and around the turn of August, at the start of September when I was dealing with Mr Stevens, I spoke to him on the phone and made a verbal application as a partnership (sic) application."
670 The application of 15 September 1980 referred to in that passage of evidence is no doubt the "application in writing" referred to in para 16A of Mr Edwards' Statement of Claim.
671 In fact that application, which was tendered in evidence, was in the form of an application for the re-issue of a licence and abalone authority for the ensuing licensing year. It read in part as follows:
"DEPARTMENT OF FISHERIES GPO Box 1625, Adelaide, South Australia 5001 To enable the issue of your fishing licence and abalone authority for the 1980-81 licensing year, it will be necessary for you to nominate on this form the vessel which is to be authorized to take abalone. Name of Licence Holder: (R.A.G. EDWARDS for) DEEP SEA ARK (AUSTRALIA) PTY LTD Address: 14 WASHINGTON ST., PORT LINCOLN, 5606
672 It will be seen that there is no mention of a "trust" in the application. The expression "(R.A.G. Edwards for)" the company could be interpreted in a number of ways.
673 If Deep Sea Ark was to be the licence holder, then any trust presumably would be by Deep Sea Ark in favour of Mr Edwards, but the expression "(R.A.G. Edwards for)" Deep Sea Ark would run counter to that suggestion.
674 A more natural construction of the document is that Mr Edwards was applying for the issue of a licence in the name of his company - which would have been consistent with his campaign to endeavour to persuade the Fisheries Department to allow licences to be held by corporations.
675 Mr Edwards suggested during the course of opening that the attitude of Mr Stevens was that:
"... if the owner didn't want to be the operator, such as in my case, it meant I would get out, and the main option I wanted to actually retain the property in it, through a trustee holding the licences etc for my benefit, we were threatened that if we did it and the Director at that stage .... Mr Stevens, found out, then a committee that he was part of, including some of the people from the Abalone Divers Group, would actually choose who the licence and authority would go to and cancel it. ....."
676 The only item of evidence with respect to any possible threat of that kind, indicate that the so-called threat did not mention trusts at all.
677 I have already quoted the text of a letter dated 23 April 1981 from Mr Stevens to the Secretary of the Abalone Divers' Association. I repeat the text of the letter, which reads:
"At the Abalone Management Liaison Committee meeting of 12 February, 1981, I undertook to investigate the situation where your association believed that a person was still controlling an abalone authority, although it had been transferred from that person. Following a further check of the documents lodged with this Department for those abalone authorities which have been transferred, there is no evidence to suggest that any person who has transferred an authority still retains control over that authority. Should there be evidence at any time in the future of this situation occurring, I will cancel the authority concerned and call for applications under criteria established by the Abalone Management Liaison Committee for the reallocation of that authority."
678 It is clear from the terms of the letter that it does not speak of trusts as such, at all. It speaks of the retention of control over an authority by a person who has transferred it. It is true that one means in which control might be retained over an authority after the transfer of it is by means of some form of trust. But that is not the only means of doing so.
679 The retention of control over an authority held in the name of another person gives rise to difficulties in effective management of the fishery as well as legal problems which I refer to in my decision in the Full Court, and which I comment on again elsewhere in this judgment.
680 Viewed in that light, the message contained in the letter is unexceptional.
681 For present purposes, it is important to note that the letter of 23 April 1981 was written after Mr Edwards had left the fishery. There is no evidence to support the conclusion that Mr Edwards was made aware of the letter at about the time it was written.
682 Mr Edwards accepted in cross-examination that the defendants Mr Olsen, Mr Trumble, Mr McColl and Mr Kirkegaard probably did not use the word "trust", but merely talked in terms of owner/operator.
683 I think it highly doubtful that anything was said about trusts until after transferability was introduced as from 28 August 1980, as it was not possible to transfer a licence or authority to another person at all, let alone for the transferee to hold it in trust for the transferor, until then.
684 None of the director defendants who gave evidence lend any support for Mr Edwards' allegations concerning representations as to the holding of licences or authorities by a trustee. Indeed, the evidence of the defendants, which I accept in preference to that of Mr Edwards, was that no representations were ever made to Mr Edwards concerning trusts.
685 Mr Trumble's evidence was that he did not believe that "the question of trusts ... arose during the time" that he was involved. He was Director between 15 October 1975 and 30 June 1976.
686 Mr Trumble also said "I know nothing about trusts then or now", although his "general understanding" was that a licence or authority could not be held by the person shown to the holder on the face of it, on behalf of another person.
687 This he understood to be one of the manifestations of the owner/operator policy, that is, that the holder had to the operator and the person who derived the profits from the operation.
688 He said that it was of no consequence to him what people did with the proceeds of the operation once they had been earned, unless they were applied in some way which contravened the fisheries regime.
689 Mr Olsen's evidence was that it was never suggested to him that an abalone permit could be held by a person on trust for another entity as "it was endorsed on the licence that it was issued to the licence holder". On the other hand, elsewhere the following passage occurs in his evidence:
"Q. So whether they [licence and authority holders] had borrowed money to buy the licence and were paying somebody back, or whether they were putting the profits into a partnership for their wife, or whether, even, they were paying money to somebody who was entitled to proceeds under deed of trust, were not matters of concern to the Department. A. No. That is the situation, and I believed in the first place that most of these kinds of things were raised as income sharing and reducing their income tax. That was what was indicated to me right at the very beginning, why they went into partnerships, and so that to me was a matter that was outside the province of the fisheries management. Q. You wanted to see an individual person as the licence and authority holder. A. Yes. Q. Then you had somebody whom you could oblige to comply with the Act and Regulations. A. Yes. Q. And charge if they were guilty of an offence. A. Yes. Q. And ... whatever arrangements they might have had with others, either to split income or to finance themselves, were not matters of any concern to you. A. No. ...."
690 Mr Olsen also said that he could not remember if Mr Edwards had ever raised a suggestion that an abalone permit could be held in trust.
691 I do not regard another passage in Mr Olsen's evidence to the effect that he was aware of a policy of the Minister that abalone permits and authorities were not to be the subject of a trust as reliable, in view of the totality of his evidence. I believe that he is mistaken in his memory as to that or was confused by the question. Certainly there is no document referring to any such policy.
692 Mr McColl's evidence was that he could not recall any discussions about trusts and the holding of, or involvement of persons by means of, trusts in the managed fisheries and that during his time in office the issue of a trust never came up. If the matter had arisen, he would have taken the view that as the abalone permit was endorsed on a A-class licence held by a natural person, that precluded the holding of a permit through the mechanism of a trust or corporation. At the same time, what business arrangements were entered into by a licence holder was not a matter "specifically of concern".
693 Mr Kirkegaard likewise gave evidence that he was sure that he did not represent to Mr Edwards at any time that an abalone permit or authority was not capable of being "impressed with a trust", as that was not a phrase which he would use. His evidence was that before 1985 or 1986 he had not heard anything about a trust situation in abalone, and that while he was in the Department he did not have occasion to apply his mind to the holding of abalone permits or authorities on trust as distinct from "any other kind of corporate arrangement". His evidence was that he had very little understanding of trusts.
694 Mr Stevens denied that he had ever represented to Mr Edwards that an abalone permit or authority was not capable of being impressed with a trust. If he had been challenged about trusts, he would have sought advice. He thought, however, that the "no absentee ownership" principles were implicit in the Act and Regulations and were never challenged. He did not have any understanding of what was meant by a trust when he was Director.
695 Furthermore, Mr Stevens denied having any conversation on the telephone in about 1980 with Mr Edwards in which Mr Edwards told him that he had a company and that his company wanted to purchase interests in the Western and Central Zones at the one time.
696 As for the letter of 23 April 1981, to which I have referred, Mr Stevens believed that the retention of control over an authority by a transferor after transfer provisions came into effect in 1980 could affect the management of the fishery, as the control of taking of the fish would then be out of the hands of the person who was the licence holder. For that reason he believed that it would be in contravention of the Act and Regulations and give rise to a situation in which the licence might be cancelled.
697 The defendants submit that the evidence suggests that Mr Edwards himself was against "absentee ownership". They refer first to certain catch returns in which Mr Edwards complains about a Mr Thomson's activities. They refer also to a discussion paper put forward by Mr Edwards in September 1980 to Mr Stevens with respect to company ownership in the limited entry fisheries. Neither item of evidence, however, could be taken as clear support for the defendants' contention, and I make no finding as to that submission.
698 Mr Edwards attempted to make much of what he suggested were admissions by the defendants as to the Minister's policy with respect to trust holdings in the Case Stated to the Full Court. But I am not prepared to regard those so-called admissions as significant, in view of other evidence as to the circumstances in which the Case Stated was drawn up.
699 Turning to Mr Murphy's evidence about trusts, this was, to say the least, inconclusive.
700 When Mr Murphy was asked in evidence in chief as to the assertions in his Statement of Claim that Mr Stevens or people under his direction and control had represented that the abalone authorisation and the A-class fishing licence could not be held in trust or transferred to a corporation or two or more persons, he was asked what produced in his mind that belief. His answer was:
"I was at an Abalone Divers' Association meeting in 1981, I believe it was, where a letter from Mr Stevens to the association was read in my presence, where he said he would cancel the licence of anyone entering into a trust arrangement. He didn't use the words "trust arrangement" but he described the trust arrangement. Q. Do you remember in what terms it was described. A. Anyone who retained control of a licence while not actually doing the diving. .... "
701 Clearly, he must have been referring to the letter from Mr Stevens to the secretary of the Abalone Divers' Association dated 23 April 1981, but as Mr Murphy accepted in his evidence, that only refers to the question of retention of control by a transferor.
702 Although at one point Mr Murphy says that he spoke to Mr Trevor Dorward about holding the authority in trust for him, this was before, as he put it, "Mr Pickering had run off with" a licence, and it was not until then, which was after he had first spoken to Mr Dorward about it, that he knew anything about trusts at all.
"I didn't put the trust to him [Dorward] because I didn't event know about trusts at that time; I put the company to him, which I had only just started. I said 'sooner or later we will have company ownership of authorities' because the divers had been lobbying for it for years and that was my intention in starting the company. I wanted to put Dorward into the company. I didn't even know about trusts -"
704 Elsewhere in his evidence, he said that he would have preferred to have entered into a trust arrangement or to employ a diver rather than sell the licence and authority as he did in 1981, if he had been able to do either of those things.
"Q. ... Would you have sold out to Mr Bascombe or anyone else for that matter at that time [1983] if you had been able to employ a diver to dive for you. A. No. Q. Would you have sold out to him or anyone else at that time if you had been able to allow someone to hold your authority in trust for you. A. No. Q. Did you explore before selling out to him or anyone the possibility that they might hold the licence in trust for you. A. No, not after having seen Pickering run with Edmunds' licence. Q. Well, is this the position, your knowledge of what occurred with the Pickering licence deterred you from going into any trust arrangement. A. Most certainly." (emphasis added)
706 That evidence and other equivocal evidence from Mr Murphy fails to satisfy me that any representations concerning holding of a licence or authority in trust were ever made to Mr Murphy as opposed to the understanding which was conveyed to him that a transferor could not retain control over the operation of the licence. Furthermore, after he had heard of the transaction between Mr Pickering and Mr Edmunds, he was deterred in any event from entering into a trust arrangement.
707 Although he seems to have had at that time little understanding of what a trust involved, it is clear from his evidence as to Mr Stevens' letter of 23 April 1981 that Mr Murphy understood that the essence of a trust arrangement, the entering into of which would result in the cancellation of a licence, was the retention of control by a transferor over the operation of a licence by the transferee. If that is what he understood by a trust, it is clear that any form of trust that he might have been prompted (contrary to his evidence) to have entered into, is likely to have been in objectionable form, in that the form of any such trust is likely to have been one in which a retention of control was part of the trust arrangement.
708 In the discussion, earlier in this judgment, of the validity of the Deed of Trust which was considered by Lander J in the Smoothpool case, I offer the view that a Deed of Trust in those terms would embody an unacceptable retention of control on the part of the beneficiary, and that any such arrangement would arguably be regarded as a colourable contract of employment, as well as raising the possibility of an infringement of s 38 of the 1971 Act.
709 The evidence leaves me in no doubt that, despite Mr Edwards' protestations to the contrary, any trust arrangement which he, or for that matter Mr Murphy, might have entered into, if they had considered that option at the time when they were selling out of the abalone industry, would have been in similar terms. I do not believe that either of them would have been prepared to relinquish control over the operation of the abalone diving business pursuant to a trust arrangement on more normal terms.
710 The point, however, is hypothetical, as, for the reasons which I have given, I do not believe that either of them was deterred from entering into a trust arrangement by reason of any representations made by the director defendants.
711 In Mr Edwards' case I do not accept his assertion that he would have entered into a trust arrangement had he believed that it was open to him to do so. That suggestion is very much in the nature of a recent invention which is a product of Mr Edwards' opportunistic attempt to capitalise upon his later realisation that a point could be taken against the director defendants over the issue of trusts.
712 In Mr Murphy's case, entering into a trust arrangement was not an option which he was prepared to consider after he became aware of the problems experienced by Mr Edmunds.
713 While the director defendants had a perfectly legitimate concern over any sort of arrangement which resulted in a retention of control over the operation of a licence or authority by a vendor, none of them had any clear concept of the legal characteristics of a trust, and as I have found, none of them made any representations of the kind now asserted by the plaintiffs.
714 I summarise my findings of fact as to the issue of trusts as follows:
(a) I am unable to find, even on the balance of probabilities, that any representations were made either to Mr Edwards or to Mr Murphy by any of the director defendants or by any officers in the employ of the Department that an abalone permit or authority could not be held by one person in trust for another.
(b) All of the director defendants in one way or another took it to be implicit in the owner/operator policy that the holder of a permit or authority must be in sole control of the fishing operation conducted pursuant to it.
(c) Consistently with that view, once provisions for transferability were introduced, the director defendants and the Department were concerned to ensure that a transferor did not retain control over the operation of the licence. The legal mechanism, whether it be a trust arrangement or some other transaction by which any such control might have been exercised, was not a matter to which they applied their minds.
(d) None of the director defendants had any developed idea of the legal concept of a trust. Most of them did not even use the term or come across it in connection with the operation of abalone permits or authorities. They were not opposed to trusts as such. They were opposed to trusts or other arrangements by which a person other than the permit or authority holder exercised control over the operation of the permit or authority.
(e) Concern to ensure that the holder of an authority was in sole control of its operation stemmed from a genuinely held belief by the defendants that to countenance any other situation or arrangement would be to make it difficult to police the provisions of the Act and effectively to manage the operation of the fishery. They wanted to be able safely to assume that the person endorsed on the licence as the holder of the abalone permit or authority was responsible for any operations conducted under it.
(f) On the other hand, again with slight differences in the manner in which they expressed this aspect of the matter, all of the director defendants were of the view that once the holder of an abalone permit or authority had sold the fish, that person was entitled to dispose of the proceeds as he or she thought fit and through whatever legal arrangement they might have had with others eg to account for the proceeds in a partnership, or even through a trust, so long as any such arrangement did not confer a right of control over the operation of the permit or authority upon a person other than the holder of it.
(g) In any event, neither Mr Edwards nor Mr Murphy would have entered into a trust arrangement as opposed to selling out of the fishery, even if they had believed this to be an available option at the time.
11. MR EDWARDS' CLAIM WITH RESPECT TO WESTERN AUSTRALIAN ABALONE
715 One of the outposts of the fishing empire which Mr Edwards claims he was prevented by the defendants from establishing was an abalone fishing business in Western Australia.
716 I have explained how it came about that Mr Edwards obtained a licence to fish for abalone in Western Australia while on a trip to that State in 1969.
717 He claims that he was deterred from renewing it and going ahead with his plans to establish a business there by reason of the attitude taken by the South Australian Fisheries Department, more particularly by Mr Olsen, who was Director at the time. He claims that had he been permitted to do so, he would have first obtained a licence in his own name and travelled between South Australia and Western Australia, diving on his licence or authority in each State.
718 He further claims that in 1972, when he asserts that licences became transferable in Western Australia, (other evidence suggests that more accurately this occurred in the mid-1970s) he would have purchased a second one, and either operated both licences through persons holding on his behalf, that is, by trustees, or when his two sons were old enough, he expected them to be willing to take them up and dive on them, for his benefit.
719 The formal pleading advanced by Mr Edwards in support of his claim in connection with the Western Australian abalone fishery appears between paragraphs 23 and 26 of his Statement of Claim.
720 The claim is based on representations alleged to have been made by the defendant Mr Olsen.
721 Mr Edwards pleads (para 23) that between 1969 and 1971 Mr Olsen orally represented to him that he was "precluded from contemporaneously holding or exploiting a licence to take fish, including abalone, for sale under the South Australian legislation and the corresponding legislation of the State of South Australia", and further that he orally "threatened" Mr Edwards with cancellation of Mr Edwards' South Australian licence and abalone permit, or "threatened" that it would not be renewed if he "continued to hold or exploit a Western Australian licence, interest".
722 Mr Edwards further pleads (para 24) that after obtaining a fishing licence in Western Australia in 1969, he intended to renew it, and further, obtain other fishing licences in Western Australia to be held by trustees to operate in trust for his benefit, but that the misrepresentations and threats made by Mr Olsen deflected him from carrying out those intentions, with the result that he suffered loss of profits which he might have derived from the Western Australian operation.
723 After seeing and hearing Mr Edwards in the witness box I was left in no doubt that he embellished his claim when giving evidence and modified it in order to cope with what he perceived to be the exigencies of cross-examination.
"West Australia welcomed me with open arms and said 'We need people like you to open it up. We need people that know something about the game.' As it is we have opened it up and made an export industry that is now bringing millions to Western Australia. I hold myself responsible for that and I am proud of that. I was one of the people that kicked it off .........."
He said elsewhere during cross-examination that in Western Australia:
"I found abalone wherever I dived .... It is the most fabulous fishing country possibly in the world."
725 I do not accept any of that evidence. It is typical of Mr Edwards' efforts to substantiate his claims by false evidence and puffing statements.
726 The defendants called Mr Bernard Bowen, currently Chairman of the Environmental Protection Authority in Western Australia, who held office as Director of the Department of Fisheries in Western Australia for forty years between November 1951 and November 1991. Not surprisingly Mr Bowen had an intimate knowledge of the fishing industry in that State and was well aware of the circumstances in which the abalone fishery was developed, although his primary concern was with the rock lobster, prawn and the pearl industries. He had never heard of Mr Edwards and denied that Mr Edwards had had any contact with him. I accept his evidence that he would not have dealt personally with Mr Edwards and issued him with a licence in 1969, as Mr Edwards suggested, as that was not his role within the Department.
727 Other former fisheries officers were called from Western Australia. One of them, Mr Ostle, was an investigation officer of the Western Australian Fisheries Department between 1961 and 1992.
728 In 1969 and 1970 Mr Ostle had occasion to give advice to a small group of divers from the eastern States and Western Australia who were endeavouring to establish the abalone industry. He said that he knew most of the so-called "pioneer divers" by name and by face. He did not recall Mr Edwards being one of them.
729 Another Western Australian witness, Dr Penn, is currently a Director of Fisheries Research in Western Australia. He joined the Western Australian Fisheries Department in 1967. When he started with the Department he was employed in the capacity of a research scientist. Initially his task was to work on the abalone fishery. As a result of his own diving experience and management of fisheries, he became aware of the group of divers who were responsible for establishing the industry in that State.
730 He recalls that the quantities that were being caught in the late 1960s, 1968 or 1969, were "relatively small .... and .... the market was very shaky". A decent living could only be made out of abalone diving in 1968 or 1969 in Western Australia, in his view, "with a fair bit of difficulty".
731 Dr Penn was able to give the names of some of the divers who were the main divers in the early days of the abalone fishery in Western Australia. He did not recall Mr Edwards' name, and he said in evidence that Mr Edwards' name ".... certainly ...... doesn't come up in any of the licensed divers that we had dealings with at that stage or the divers we licensed". Dr Penn gave evidence that his job "as a researcher was primarily to work with the divers to interpret the catch statistics". I am satisfied that he would have come in contact with Mr Edwards if the latter's assertions that he was one of the pioneers was true.
732 As for the allegations with respect to the alleged representations and so-called threats from Mr Olsen, having regard to the whole of the evidence, I am not satisfied that they were made. Indeed, I am satisfied that they were not made.
733 While there are some difficulties in piecing together exactly what Mr Edwards did with respect to abalone diving in Western Australia in 1969 and 1970, his catch returns suggest that he was in Western Australia from 23 November 1968 to 10 December 1968 and late September 1969 to January 1970.
734 The "licensing card" relating to Mr Edwards, being a record kept by the Western Australian Department of Fisheries, was tendered in evidence. That record establishes that Mr Edwards' held a Western Australian licence from 17 October 1969 to 31 December 1969 (the licensing year being the calendar year), and from 19 October 1970 to 31 December 1970. Despite Mr Edwards' evidence to the contrary, I am satisfied that the 1970 licence could not have been issued without an appropriate application being made and without payment of the fee.
735 I am satisfied also that Mr Edwards made an application for the reissue of the licence in 1970.
736 Mr Edwards' evidence was that he posted to Adelaide from Western Australia in November 1969 an application for renewal of his South Australia abalone permit. He remained in touch with his wife's parents at Elliston, to which address he expected the permit to sent out. His evidence was that when it was apparently not sent out, he got in touch with the Department and spoke to Mr Olsen by telephone. He said in evidence:
"I was told that my licence would not be renewed and that I was required to come back from Western Australia, which I did. I shot back in a hurry. ... Q. Were you given to understand that it wouldn't be renewed unless you were living in South Australia. A. Yes. Q. Is that what made you return. A. Absolutely."
737 Mr Edwards further gave evidence that he received a letter at about the same time from Mr Olsen indicating that his application had been refused.
738 It seems clear that this was a letter dated 2 January 1970. The actual letter to Mr Edwards was not tendered in evidence, but a copy of a letter to another fisherman, Mr Lee, of that date was tendered, together with a departmental record indicating that a letter in the same terms was sent to eight other fishermen, including Mr Edwards.
"Dear Sir Application for Abalone Permit I wish to inform you that your application for an Abalone Permit has been refused on the basis of the conditions set out in Regulation 7(d)(ii) of the Preservation of Abalone Resources Regulations 1968. The Regulation reads as follows:- 7(d) 'The Chief Inspector of Fisheries may grant or refuse the permit applied for (which, if granted, shall be in the form of schedule two) and for the purpose of reaching a decision upon the application shall, in addition to any other matters indicated by the scope and purpose of the Act and these regulations as being relevant, take into account the following matters namely, whether, in his opinion - (ii) the abalone resources of the abalone waters are such that, in all the circumstances, they will not be adversely affected by the taking of abalone in pursuance of the permit.' Yours faithfully
740 In cross-examination Mr Edwards said that Mr Olsen had told him on the phone:
"... I could not have an interest in Western Australia at the same time ... and if I wanted my South Australian permit I would need to fish in South Australia."
He went on to say that in response to Mr Olsen, he told him in effect that he would be coming back to South Australia and would not be fishing in Western Australia thereafter.
741 If that was true, it is surprising that he received the letter from Mr Olsen. Mr Edwards could offer no explanation in evidence why such a letter would have been sent to him if the conversation he had with Mr Olsen was in the terms which he suggested.
742 His account of the matter then underwent some change. He said later during his cross-examination that Mr Olsen had said to him that "... there was a special interstate agreement in place under the legislation in both State" which precluded him from holding a licence in Western Australia as well as in South Australia. Mr Edwards was obliged to concede under further cross-examination that he had neither mentioned any such agreement in opening, nor was it referred to in the pleadings. In fact I am satisfied from other evidence that there never was any such agreement.
743 Of course, if Mr Olsen had in any way conveyed to Mr Edwards that the latter could not hold a Western Australian licence contemporaneously with a South Australian licence, the action of Mr Edwards in obtaining a renewal of his Western Australian licence later in 1970 is inexplicable.
744 In 1974, when Mr Edwards applied for one of the additional prawn authorities, he openly disclosed to the Department that he had prawning interests in Queensland. That he did so is inconsistent with any belief on his part, which he dramatised from time to time in his evidence, that as a result of Mr Olsen's intimations to him he was fearful of losing his South Australian licence if he held a fishing licence or authority in any other State.
745 It may be that from at least the time of the coming into operation of the 1971 Act onwards Mr Olsen took the view that the holding by an applicant for an A-Class fishing licence, of a licence in another State or Territory, would prompt the need for an investigation to ensure that the carrying on of business under the A-Class fishing licence to be issued in this State was the "principal business" of the applicant. This was a requirement of s 30(1)(a) of the 1971 Act, which, as I have indicated, was in force as from 1 December 1971. But that circumstance, which no doubt prompted Mr Olsen to scrutinise applications carefully from applicants known to hold fishing interests in other States, does not deflect me from making the findings which I have made with respect to Mr Edwards' allegations as to representations said to have been made by Mr Olsen at the end of 1969 or early in 1970.
746 It is in any event clear from other evidence in the case that Mr Edwards never had a serious intention of developing an abalone diving business in Western Australia, and that he would have faced serious obstacles if he had attempted to do so.
747 As early as May 1968 the Western Australian Department of Fisheries became concerned at attempts by abalone fishermen from Victoria and South Australia particularly, to break into the industry in Western Australia. The Department thought that many of the fishermen who attempted to do so entertained serious misconceptions as to the profitability of the industry in Western Australia.
748 By a letter of 17 May 1968, Mr Waldon, who held the position of Publicity and Extensions Officer with the Western Australian Department, wrote to Mr Olsen enclosing an article intended to dispel misconceptions as to the state of the abalone fishery in Western Australia. In the letter he said:
"It is felt that if the contents of this article could be made known to the fishermen of your State, it might prevent unnecessary expense and disappointment by transferring their operations to Western Australia. Perhaps this may be suitable for your local bulletin or newspaper."
749 Mr Olsen gave the article wide publicity, sending copies of it to The Advertiser, The News, the Sunday Mail and to the ABC. With a memo dated 13 June 1968, Mr Olsen circulated the article amongst his own departmental officers, with an instruction to bring it to the attention of abalone fishermen.
"WESTERN AUSTRALIAN ABALONE FISHERY Many letters are being received in Western Australia by both the Department of Fisheries and Fauna and members of the fishing industry regarding the opportunities available for experienced and equipped abalone fishermen from other States. Most of these letters are from abalone fishermen of Victoria and South Australia where restrictions upon the industry have prompted them to look further afield to perhaps less restrictive or more lucrative areas. Not only are these letters of enquiry arriving - in some cases fishermen themselves turn up fully expecting to find a well established industry ready to offer them prospects. This is far from the truth and several fishermen - sorrier but wiser - have already returned to their home state after finding out that the trip West was to no avail. This Department finds it difficult and time consuming to answer individually all the letters and questions about the abalone industry in this State. It feels that the publication of the facts regarding this fishery might prevent disappointment and expense for abalone fishermen considering transferring their operations to Western Australia. The industry in Western Australia is based on a different and smaller species to that fished in South Australia and Victoria - in fact it can hardly be defined as an industry when the total stockpiled catch for the 1967/68 season was only in the vicinity of 25,000 lb. .......... The Eastern states' method of catching by using boats and Hooker units and by diving in up to 50 feet of water is not applicable to Western Australia. Here the bulk of the catch is collected within a depth of about 6 feet and usually in surf conditions which can only be worked on calm, flat days. It is, therefore, a part time industry which relies on weather conditions and so does not provide regular or guaranteed employment. With collecting conditions as they are the absolute maximum daily catch rate is in the vicinity of 150 lbs (shucked) per day - and this possibly over a ten hour or longer collecting period. At 23 cents per pound this does not make for a very profitable day, out of which must come time and travelling expenses to the more inaccessible places by four-wheel drive. At present only one company is buying shucked abalone which is stockpiled for future distribution or marketing. The economics of operating outside the 30 mile range from Perth, coupled with the uncertainty of future marketing appear to make the industry hardly worthwhile for the individual - particularly if it involves the selling of existing assets and equipment in the Eastern States and a trip to the West. But what of the areas east of Albany? True, the species here is the same as in South Australia and would require the same catching techniques and equipment but again other factors are against it. Firstly there is still only one market available which is in Perth. The company concerned would probably pay 30 cents per pound (shucked) but delivered in Perth which is some 250-300 miles from the catching grounds. Secondly the seas in the Albany region are rough for a considerable part of the year. Many may disclaim this but a check with the Weather Bureau will support this with a large number of days when the wind and sea condition would make collecting almost impossible. And lastly, not enough is known of the stocks and sizes of the population existing in the region.' If you are prepared to create your own markets and methods of distribution, gamble on the weather, collect specimens (M roei) which do not reach much more than 4" (with a 3" minimum size imposed) and work under adverse conditions then do so - but remember we are advising against the risk of success."
751 A further disincentive to persons coming to Western Australia hoping to establish themselves in the abalone fishery there, occurred in February 1971. On 5 February 1971 an administrative instruction was circularised by the Western Australian Department of Fisheries to all of its licensing officers setting out the criteria upon which abalone concessions, as the authority to fish for abalone was called in that State, were to be granted.
752 That circular included amongst the criteria for the grant or refusal of abalone concessions the following:
"3.1 The applicant must qualify as a licensed professional fisherman - that is, he must spend the major part of his working time in professional fishing and derive a substantial part of his income from the sale of fish he has caught or assisted in catching. Abalone fishing is no longer a part-time occupation. 3.2 He must be trained, equipped and capable of sustained abalone fishing to qualify under 3.1. Preference has generally been given to those with a recorded history of abalone fishing but concessions will not be granted to anyone who holds an abalone license in another State." (emphasis added)
753 Dr Penn gave evidence that the administrative instruction was the basis for the issuing of the concessions, and that a successful applicant for a licence for a concession in Western Australia would necessarily have to establish by virtue of his catch returns that he had been a substantial abalone diver in previous years. If in the year or years before his application a diver had put in nil returns or had not sent in any returns, then he would not have been considered for one of the first concessions.
754 At the time the concessions were introduced, the Western Australian Department issued them to previous licence holders and did not call for applications.
755 When transferability in Western Australian concessions was introduced, the administrative instruction continued to apply, which meant that any concession holder would be obliged to spend the major part of his or her working time in professional fishing in Western Australia as opposed to other places. Residency in Western Australia (whatever constitutional arguments might have been raised in that respect) remained a requirement. Dr Penn's evidence in the relevant respects was confirmed by Mr Bowen.
756 It is also clear from the evidence that the holder of the concession was the only person who could dive in Western Australia - in other words Western Australian authorities applied an owner/operator policy. There were no provisions for relief or employee divers in that State.
757 Mr Norman Craig travelled to Western Australia on at least two occasions with Mr Edwards when they looked over possible areas from which to dive for abalone. The evidence suggests that the first time was in 1969 and the second time about the mid-1970s. Mr Craig's evidence makes it plain that none of the grounds or potential grounds for abalone fishing off those parts of the coast of Western Australia which they visited were as well populated as the grounds which they were working in South Australia. Part of Mr Craig's evidence was as follows:
"Q. Did he [Mr Edwards] say anything about what his intentions were, in terms of fishing there [in Western Australia]. A. We talked about that there always could be a fishery there. His intention was - you know we talked about the intention was - that if ever a new area was found he could there and fish there. Q. By new area you mean something better than what you had seen so far. A. That is correct. ....... Q. Did Mr Edwards ever indicate that the point had been reached where he would want to go over there. A. No."
758 Mr Edwards admitted that he went to Western Australia with Mr Craig in about 1975 and that they did some diving for abalone. The fact that he did so clearly indicates that he was not relying on any alleged statement from Mr Olsen in late 1969 or early 1970 supposedly precluding him from holding a licence in Western Australia contemporaneously with a licence in South Australia. It is equally clear that he did not find the situation on any of the trips he made to Western Australia sufficiently encouraging to attempt to establish a foothold in that State.
759 I mention in passing that I do not overlook a passage in the evidence of Mr Olsen where he stated that he could recall on at least one occasion speaking to Mr Edwards about diving for abalone in Western Australia. He said, however, that:
"My response was that under the terms of the Act of 1971 his principal business was (sic) diving for abalone in South Australia. ...... I did properly advise him that if he was going to dive in Western Australia then he wasn't having his principal business in South Australia under the requirements of the Class A licence."
760 Mr Olsen's evidence does not lend any support for the view that there was any discussion of the kind suggested by Mr Edwards in late 1969 or early 1970. I think it more likely that any discussion with Mr Edwards concerning the possibility of fishing for abalone in Western Australia took place after the 1971 Act came into force.
761 In summary, with respect to this aspect of Mr Edwards' claim:
(a) I find that the alleged misrepresentations and threats were never made.
(b) There was never an agreement in place between South Australian and Western Australian fishing authorities precluding the contemporaneous holding of licences in both States.
(c) That at least after the 1971 Act came into force in South Australia an applicant for a Class A fishing licence who proposed to fish for abalone would have to satisfy the Director of Fisheries that fishing for abalone in South Australia was to be his or her principal business. This would have made it difficult to maintain a substantial abalone diving operation in another State.
(d) As from February 1971 the administrative guidelines in Western Australia which defined the criteria upon which abalone concessions were granted or refused, precluded the grant of a concession to a person holding an abalone licence in another State, and obliged an applicant to satisfy the Western Australian authorities that he or she would have to spend the "major part of his working time in professional fishing and derive a substantial part of his income from the sale of fish".
(e) It is unlikely that if Mr Edwards had made application for a Western Australian abalone concession, he would have been successful.
(f) In any event, Mr Edwards never had a serious intention to fish for abalone in Western Australia and did not satisfy himself that the abalone stocks in Western Australia were sufficient to justify any attempt to establish a business there.
12. MR EDWARDS' CLAIM RE HIS APPLICATION FOR A PRAWN AUTHORITY
762 By written application dated 18 March 1974, Mr Edwards and his then wife Suzette made an application for an authority to fish for prawns. The application was on a printed form which required the insertion of a number of particulars.
763 On the form, Mr Edwards explained that he had been fishing for abalone since 1968, but that he would "welcome the chance to enter the prawn fishery" for a number of reasons, which he set out. One of them was his loss of confidence in diving since Terry Manuel's death, and his concern as to the risk of the development of bone necrosis. He sought the authority on the footing that, if granted, he would operate from the prawn vessel which he had bought in Queensland, the Moonraker.
764 On the form he falsely stated that it was "presently undergoing refrigeration". As I have pointed out in my findings as to credit earlier in this judgment, I am satisfied that this was a deliberate untruth. He also stated that the vessel was owned by his wife, but in his Statement of Claim Mr Edwards alleges (para 13A(1)) that the boat was purchased in the name of his "family partnership".
765 In the application Mr Edwards stated that if his application was successful, a licence should be granted on the basis that he or Mrs Edwards would be engaged full time as owner/operator on board the vessel. This carried a clear implication that Mr Edwards would no longer fish in the abalone industry. However, his evidence was that he in fact intended to continue abalone fishing.
766 At all events, his application was unsuccessful.
767 In his Statement of Claim Mr Edwards alleges that the defendant Mr Olsen acted "wrongfully and maliciously" in refusing the application. His claim sounds in misfeasance in public office, although there is an alternative claim in negligence (see para 32A).
768 The plea that Mr Olsen acted wrongfully is particularised in the Statement of Claim in the following terms:
"13A ........ (4) In support of the allegation that the first defendant acted wrongfully, the first plaintiff relies on the following facts:- I. The first defendant did not consider or deal with the said application dated 18 March 1974 as required by Section 17 of the Fisheries Act 1971, and/or regulation 11 of the Managed Fisheries Regulations 1971. II. The first defendant referred the said application to the Minister of Fisheries who was not empowered to deal with it. II(I) Insofar as the first defendant's action was a delegation to the Minister of his decision making powers or functions in respect of the application referred to in paragraph 13A(4)I herein: (a) the action was known by the first defendant to be unlawful by virtue of advice received by the first defendant from time to time, and noted as accepted by him, that it was his responsibility sole, and not the Minister's to determine an application for the issue of a prawn authority; and (b) the first defendant knew that in the absence of a written delegation as required by Section 7 of the Fisheries Act 1971, the power and function to deal the said application remained vested in himself sole: (c) deleted III. The said Minister referred the said application to the Prawn Fishing Industry Advisory Committee which was not empowered to deal with it. IV. The said Committee wrongfully and unlawfully recommended that the first defendant, or alternatively, the Minister of Fisheries (hereinafter the "Minister") refuse the said application, or in the alternative, refused the application itself and rejected it. DETAILS 1. The Committee was not lawfully delegated, and could not lawfully be delegated any power or function of the first defendant (or the Minister as the case may be) to deal with or determine the first plaintiff's application, or to bind the first defendant (or the Minister as the case may be) in any valid dealings they had with the application. ................... 7. On 1 August 1974, the Committee unlawfully selected the seven successful prawn authority applicants, determined there would be no appeal of its decision, and unlawfully rejected the first plaintiff's application dated 18 March 1971. ................"
769 Mr Edwards further pleads in support of his claim that Mr Olsen acted maliciously, repeating the allegations which I have just set out, and making a further allegation:
"II. The said Prawn Fishing Industry Advisory Committee and subsequently the first defendant acted on and adopted invalid policy considerations and/or policy considerations extraneous to the Fisheries Act 1971. Particulars of the Policy The policy considerations appear in various minutes of the said Committee to which the first plaintiff will refer for their full terms and effect."
770 Mr Edwards goes on to claim that in consequence of Mr Olsen's conduct, he was deprived of "his lawful right to have the application .... considered and granted on its merits .... and according to law" and to exploit it. In consequence, he claims to have suffered economic loss.
771 In their defence, the defendants, more particularly Mr Olsen, deny any impropriety in the process of consideration of the applications; assert that Mr Olsen made the decision to refuse Mr Edwards' application, as opposed to either the Minister of the Committee; that at all times he acted "and believed he was acting bona fide and according to law" and in accordance with the Fisheries Act 1971 and the Managed Fisheries Regulations which were in force at the time, and in accordance with his understanding of administrative policies "approved by the Minister for the administration of fisheries legislation".
772 Alternatively the defendants plead that if in fact either the Minister or the Committee made the decision to refuse Mr Edwards' application (which is denied), had Mr Olsen himself considered the application, he would have come to the same decision and would have exercised his discretion in the same way if the decision had been his alone.
773 The defendants further plead that the applications made by the successful applicants were of "higher merit" than Mr Edwards' application and would have been selected in preference to his, in any event.
774 In order to consider the issues raised by the pleadings, it is necessary to say a little more about the statutory and regulatory provisions pursuant to which the applications were considered.
775 Under regulations 11 and 12 of the Managed Fisheries Regulations 1971, it was for the Director, in his discretion, to grant or refuse an application for an authority. The two regulations set out a number of factors which the Director might take into account in determining an application, including the question whether the applicant was a "fit and proper person", the fitness of the applicant's boat, and the state of the fish resources, more particularly with respect to the zone or zones to which the boat was to be assigned.
776 At the time of Mr Edwards' application and for some time before then the South Australian prawn fishery was regarded as a lucrative industry, and competition for authorities was fierce. The records of the Department of Fisheries record that 150 applications for prawn authorities had been made before February 1973.
777 In July 1973, Cabinet resolved to set up a committee for each of the managed fisheries to act "on an advisory basis". In accordance with that decision, approval was given in February 1974 for the establishment of the Prawn Fishing Industry Advisory Committee ("PFIAC").
778 As was the case with the committees set up in the other managed fisheries, PFIAC was charged with the role of advising the Minister on the issue of authorities. The terms of reference for the Committee were "to assess applications for authorities in the prawn fishery and recommend to the Minister to whom authorities are to be issued". The minute providing for the establishment of PFIAC concludes with the following:
"The total number of authorities in the fishery will continue to be determined by the Minister on the advice of the Director of Fisheries. It is proposed there be no right of appeal against the recommendation of the Committee and decision of the Minister in regard to the issue of authorities."
779 It must be accepted that the terms of that minute might be thought to lend faint support for the central contention by Mr Edwards, namely, that instead of his application being considered and either granted or refused by Mr Olsen, it was the Committee and/or the Minister who purported to discharge the role assigned to Mr Olsen under the regulations.
780 In a minute from Mr Olsen to the Minister dated 5 February 1974, Mr Olsen set out a history of the guidelines used for the issue of prawn permits and authorities from April 1968, together with some additional guidelines which Mr Olsen recommended should be adopted. The Minister endorsed on Mr Olsen's minute his approval of the criteria as suggested by Mr Olsen.
781 The first meeting of PFIAC took place on 26 February 1974. At the meeting, the Minister of Fisheries, Mr Broomhill, expressed the hope that the Committee would remove much of the "present criticism levelled at the Department and the Minister on the allocation of prawn authorities". He further stated that "the Advisory Committee had been set up by me to advise me on the allocation of available prawn authorities".
782 Mr Edwards' application for an authority followed an advertisement by the Department which was published in March 1974, the last date for applications being 30 April 1974.
783 Before that date, the Department received no less than 153 applications and nine further applications by 2 May 1974. A preliminary meeting as to the processing of the applications was held by PFIAC on 16 May 1974. Mr Olsen was not present, but Inspector Fairbanks, a licence assessor, from the Department attended. The meeting adopted a "policy recommendation" setting out some thirteen criteria which were intended to be taken into account in determining the applications.
784 According to the evidence of Mr Olsen, which I accept, he thereafter culled the applications, with the assistance of his staff, by reference to the approved criteria, to arrive at a short list of the order of fifteen. From those he made what he clearly regarded as his final selection of five applicants in Spencer Gulf and two applicants in Gulf St Vincent, the appointment of which he then recommended to the Minister.
785 The Minister thereupon referred the matter to the Advisory Committee. PFIAC met on 4 and 5 July 1974. Mr Olsen was present. Part of the minutes read:
"Selection of Seven Applicants for the new Prawn Authorities Although it was not possible to finally recommend the names of the seven persons who could be issued with prawn authorities until the Honourable the Minister had approved the final criteria and policy for entry into the prawn fishery, the Committee made a preliminary selection of names as follows:"
786 The names which were then set out, together with some remarks as to their applications, were Laslett, Smith, De Longville, Dunstan, Crawford, Degillio and Salvemini. Against Mr Salvemini's name was recorded a note which expressed some doubt as to the suitability of the vessel owned by Mr Salvemini. The note read in part "if vessel is found to be unsuitable, the recommendation will be withdrawn".
787 On 22 July 1974, Cabinet approved the Minister's recommendation as to the policy which should be adopted for the issue of the prawn authorities. This was in terms of the policy as previously considered by Mr Olsen and PFIAC. Subsequently, on 1 August 1974 PFIAC met again. Mr Olsen was again present. The Committee recommended the issue of authorities to the six persons previously named, with the exception of Mr Salvemini. In lieu of Mr Salvemini they recommended that an authority be offered either to Mr Kemp, or if he was unwilling, Mr Sheridan. The reason for this substitution was that, as recorded in the minutes of the meeting, Mr Salvemini's vessel had in the intervening period been found to be unsuitable as it was out of survey.
788 On 2 August 1974, Mr Olsen had a ninety-minute discussion with Mrs Johnston of the Crown Solicitor's Office. According to his diary note, this was in connection with "the policy on prawns".
789 The only evidence tendered as to what occurred appears from a reference to the meeting in the minutes of the PFIAC meeting which occurred on 12 September 1974, where it was noted that "as recommended to the Minister of Fisheries, Mrs E. Johnston of the Crown Law Department was consulted on the legality of certain criteria for the selection of applicants in the policy for the management of the prawn fishery. Mrs Johnston advised Mr Olsen that the Department and the Minister "had sufficient legislative competence to make criteria and policy for the prawn fishery".
790 In the meantime, by a minute of 2 August 1974, the secretary of PFIAC advised the Minister of the seven applicants who were recommended to receive prawn authorities. The Minister approved and advised Mr Olsen accordingly. Mr Olsen then advised the successful and unsuccessful applicants. Mr Edwards was advised by letter of 16 August 1974 that his application was unsuccessful.
791 Both PFIAC and Mr Olsen received complaints from unsuccessful applicants and from the Ombudsman on behalf of some unsuccessful applicants, but Mr Edwards is not listed amongst the complainants, at least as at 12 September 1973. Furthermore, Mr Edwards gave no evidence of making any complaint to the Department at the time, although Mr Olsen gave evidence that Mr Edwards in fact complained to him.
792 Whatever may be the position as to that, I have no doubt that Mr Edwards was well aware at the time, of the policy which had been adopted by the Minister, as it was widely promulgated. A copy was sent to the Abalone Divers' Association, and it was published in SAFIC magazine of August 1974, which I find was likely to have been sent to Mr Edwards at his home address at Netley.
793 During the course of his decision on the case stated to the Full Court, Olsson J observed:[70]
"That is not to say that, in arriving at his own independent decision, the Director was not entitled to have regard to properly evolved Government policies and recommendations of the Committee. Plainly he was (R v Anderson; Ex parte Ipec-Air Pty Ltd;[71] Ansett Transport Industries (Operations) Pty Ltd v Commonwealth[72]). On the other hand what he was not entitled to do was, as Kitto J stressed in Ipec-Air, to abdicate his personal duty of forming a judgment in light of all relevant considerations and merely rubber stamp a policy or recommendation emanating from other sources, so that, in truth, his decision was that of others and not the decision of the person required by the statute to make it. Whether that occurred in the instant case must abide the outcome of the trial."
794 In his evidence, Mr Olsen firmly rejected the suggestion that the Committee rather than him had ultimately made the selection of the successful applicants. It is true that Mr Olsen agreed that he was "concerned to get some industry input into the process" of selection, but he emphasised in various ways that he did not consider himself bound by the Committee's views, or for that matter, the view of the Minister.
795 It is not without significance that on another occasion, namely, on 22 July 1974, at a meeting of PFIAC, Mr Olsen dissented from a majority decision of the Committee on an application for the purchase of an authorised prawn vessel, and proceeded to exercise his discretion in accordance with his own view rather than that of the Committee on that occasion.
796 In any event, I accept Mr Olsen's evidence as to what process was followed with respect to Mr Edwards' application, including the means by which the final seven were selected. In particular, I accept his evidence that the final decision was his and not the decision of either the Committee or the Minister.
797 It follows that I should accept the defendants' submission that Mr Olsen exercised his discretion under regulations 11 and 12 of the Managed Fisheries Regulations 1971 in a proper manner, and that the refusal of Mr Edwards' application was lawful. In exercising his discretion, he was clearly entitled to have regard to the policy approved by the Minister and the views expressed by the other members of PFIAC.
798 In any event, even if I was to uphold Mr Edwards' submission that Mr Olsen did not exercise the discretion to grant or refuse his application, Mr Edwards would be no better off.
799 In the first place, it is clear that Mr Olsen had in fact by a perfectly proper process of consideration of the relevant criteria, and with the assistance of his departmental officers, reduced the applicants to a short list of fifteen or so (it is not clear whether Mr Edwards was in the short list) and then agreed with the view of PFIAC as to the seven successful applications. It follows that it is likely that if neither PFIAC or the Minister had been involved, Mr Olsen would nonetheless have reached the same decision.
800 In the second place, it seems unlikely that Mr Edwards' application would have succeeded on the merits. I accept the defendants' contention that Mr Edwards' had "...far less experience of commercial fishing in South Australia than the successful applicants"; did not hold a current certificate of competency as required by the Managed Fisheries Regulations in circumstances in which there is no reason to suppose that he necessarily would have qualified for it under the Marine Act; his boat was not currently registered for fishing in South Australia; and he provided false information in his application, which itself is an offence under regulation 10 of the Managed Fisheries Regulations.
801 Finally, it seems to me that however the matter is approached, Mr Olsen acted bona fide, and no possible basis is established in the evidence to support a finding that he acted with the requisite mental element necessary to sustain a finding of misfeasance in public office. In that regard, as I have already pointed out, he went to the trouble of having a long discussion with Mrs Johnston of the Crown Law Department as to the legality of the selection criteria.
802 In these circumstances, the alternative claim in negligence cannot be sustained.
803 Both the pleadings and the evidence as to this head of the claim are, to say the least, fragmentary.
804 There is only a glimmering of the claim in the pleadings.
805 In Mr Edwards' Statement of Claim, after referring to the allegations concerning the alleged wrongful denial by the defendants of Mr Edwards' right to employ persons to dive for abalone, he goes on to allege that the conduct of the defendants in that respect:
"(A) ... was calculated to cause as an inevitable consequence thereof and did cause the first-named plaintiff loss and damage .......... (C) But for the directions hereinbefore referred to, the first-named plaintiff would have employed a person or persons when circumstances warranted, and at times when increased effort was justified to take fish including abalone under his direction and control throughout the duration of his licences, and, if he had done so: (iv) he would have been able to derive further income from other fishing operations pursuant to his 'A' class fishing licence and licence to employ, including fishing for tuna for export, (by personal exertion and by means of employees) and thereby the first-named plaintiff has suffered economic loss. DETAILS The economic losses of the plaintiffs as referred to are contained in a the report dated 9 March 1998 of Sims Lockwood & Partners ......." (emphasis added)
806 The Sims Lockwood report of 9 March 1998 contains the following paragraph:
"5.3 Prevention from obtaining and exploiting additional licences Had the plaintiff been allowed to acquire multiple licences through a nominee, I am instructed that he would have obtained additional licences to fish for abalone in the Central Zone of South Australia, abalone in Zone 2 of Western Australia as well as prawn and tuna licences in South Australia. Furthermore, additional South Australian abalone licences would have been obtained in the Western and Central Zones by the plaintiff company, Deep Sea Ark (Aust) Pty Ltd."
"I might say, had I not been forced to sell out absolutely my abalone authority and authorised boat, as against being allowed to retain it in trust, and for myself to buy others and my company to buy others, had it not been for that, had I not been forced to not enjoy that option .... I would not have lost my A class fishing licence .... I was not allowed to sell the authorised abalone boat to anyone for any price, unless I was prepared to forfeit absolutely all other licences I held. In losing my A-class fishing licence I lost the right to even continue in the fishing game, as an alternative to abalone, by entering into the tuna fishery. .... at that stage tuna was a burgeoning fishery, there was long-lining and trolling down the south-east, Mr Ollrich was a pioneer in it and Mr Cawthorne. ...... The A-class fishing licence enabled me to take tuna and other fish for sale in State water but it was coupled with the fact that the only way we fishermen were being told they could fish in Commonwealth waters was to have a State licence. So it was the key to the door which enabled me to fish right through South Australian waters. Q. You say it would also have given you access to Commonwealth waters. A. Yes."
808 So it is then that the basis of Mr Edwards' claim for alleged losses with respect to tuna fishing has vacillated between assertions that he was deprived of the opportunity to enter the tuna fishery by reason of conduct on the part of the defendants which denied him a full realisation of his right to employ persons to dive, and an alleged wrongful insistence that he surrender his A-class fishing licence as a condition of the sale of his abalone authority in 1980.
809 But later in the course of his opening, Mr Edwards agreed that had he been allowed to proceed with his plans for abalone, he would not have fished for tuna at all, as the abalone activities would have kept his hands full.
810 Contrary to what Mr Edwards said later as to an intention to fish in State and Commonwealth waters, earlier he said that most of the tuna he was going to catch was in Commonwealth waters. He did not intend to operate in State waters as tuna was in Commonwealth waters.
811 In evidence he said that he would have kept the A-class licence if he had been able to. Despite the fact that Mr Edwards' evidence was that he would not have fished for tuna had he been permitted to go on fishing for abalone, his accountant, Mr Irving, prepared calculations of Mr Edwards' alleged loss on the footing that he would have commenced fishing for tuna in January 1981 and that between then and the date of his report dated 30 June 1997 he would have derived a profit from the tuna fishing business of $1,597,464 together with an enhancement in the value of the tuna licence or authority of $469000, a total of $2,066,464.
812 As I have said, Mr Edwards' evidence is not consistent as to whether or not he intended to fish for tuna in South Australian or in Commonwealth waters, or a mixture of both. Be that as it may, any link between the forfeiture of his A-class fishing licence, which was a purely State licence, and the alleged loss of the opportunity to fish for tuna has not clearly been established in the evidence.
813 In the first place, he has not proved any representations to do with the surrender of his A-class fishing licence.
814 The form which he filled out and signed, namely the formal application to sell an authorised abalone vessel, said clearly at the start of the form:
"Do you wish to retain your SA fishing licence for operation in another fishery (eg scale, shark, etc)?"
Against which Mr Edwards answered, "No". The form went on:
"If yes: proposed purchaser must be the holder of a SA fishing licence, for you to retain your SA fishing licence for use in scale/shark fishery. If the proposed purchaser is not the holder of a SA fishing licence, you will be required to relinquish your SA fishing licence if this application is approved. If you are not prepared to relinquish your SA fishing licence, this application cannot be considered."
815 Interestingly, under the heading "Future Activities" Mr Edwards ringed the answer "Other employment" in a box in which, apart from that answer, the alternatives were "Retirement/ill health/other reason".
816 It will be seen from the introductory part of the application form that Mr Edwards did not indicate a desire to retain his SA fishing licence, that is, his A-class fishing licence. Furthermore, it was not stipulated in the form that he must surrender it in any event. He was only obliged to relinquish it if the proposed purchaser was not the holder of an SA fishing licence.
817 The reason why the form was worded in that way became clear from the evidence of the Directors of Fisheries, more particularly Mr Olsen, who said that the stipulation in the form was "just a policy of the Department" and he said that the policy:
"... meant that there was no increase in the number of licences. Q. Because the issue of licences is all regulated by an overall perception of what the various fisheries could stand .... A. Yes: with both the state of the stock and the number of units that were operating on the stock. Q. So in the case when there was a transfer, you didn't want to see an increase in the number of licences happening as a result of that. A. That's right."
818 The evidence of Mr McColl was that between 1976 and 1979 (it must have been a little later, having regard to the date of the form given to Mr Edwards) it had the effect of putting "a cap on a (sic) number of class A licences on issue at any particular time". He said in amplification of that observation:
".... the scale fishery was not a managed fishery at that time, it was effectively an open entry fishery and it was what might be called a residual fishery and it was showing significant signs of stress and strain. There was also recreational fishing pressure on it."
819 Mr Kirkegaard said that in 1977 it was apparent that there was a problem in the scale fishery which was highlighted by the Jones Report, and that the problem was understood by him to be that there was too much effort. According to Mr Kirkegaard, a freeze was brought in in about mid-1977 in relation to class A fishing licences. The freeze was in anticipation of the Jones Report before it became public.
820 According to Mr Kirkegaard, the freeze had a statutory base, in that the Jones Report made it apparent that any further class A licences would prejudice the proper management of the fishery within the meaning of s 34(2). This was a management policy, according to Mr Kirkegaard, which extended across all fisheries.
821 Mr Kirkegaard expatiated on the reasons for the policy, and indicated that the policy had ministerial approval. This was certainly his understanding and belief. The relevant Minister at the time was Mr Chatterton, hence Mr Kirkegaard's "fiat" to the licensing officers effectively freezing the issue of any further class A licences.
822 In the directive dated 2 September 1977, he states, inter alia:
"The practice of allowing retiring licensed fishermen from a managed fishery to continue to hold a class A licence is not approved."
823 Mr Kirkegaard regarded the policy or principle as a lawful one. He said that he saw himself as having a discretion whether or not to issue a class A licence to a new purchase, and that the discretion was fettered by s 34(2) "in enjoining me not to issue unless I could be satisfied that the proper management of the fishery would not be prejudiced".
824 Mr Kirkegaard's indication that the policy had the support of the Minister, Mr Chatterton, was supported by the evidence of Mr Chatterton himself. Mr Chatterton said that the basis of the policy was his concern that in the scale fishing industry catches were declining and economic returns to scale fishermen were poor. He said that he felt it necessary to freeze the number of scale fishermen and hope that over a period of time he could get a number of fishermen to retire, and this would reduce the effort and return the scale fishery to profitability.
825 Insofar as the form signed by Mr Edwards in which he applied for approval of the transfer of his abalone permit required the relinquishment of his class A fishing licence unless the purchaser already had one, this was a valid policy of the Department. Furthermore, I think that its formulation and application was in good faith and could not be said in its application to Mr Edwards to be evidence of misfeasance. Likewise, there is no possible basis to support a claim in negligence as to this aspect of the matter.
826 If one looks at some of the evidence, at least of Mr Edwards, on the face of it, the absence of his class A fishing licence could not have prevented him from fishing for tuna in Commonwealth waters, which at times he appeared to be saying was the only place in which he wished to fish for tuna. There was certainly nothing shown by way of statutory or other legal provisions which obliged a person applying for a Commonwealth licence, that is, a licence to fish in Commonwealth waters for tuna, to have a South Australian licence as a pre-condition.
827 Mr Edwards did refer in this context to a minute from a Mr Poole, an administrative assistant within the Fisheries Department, to the Director of Fisheries dated 15 August 1980. The minute is endorsed to indicate that it was seen by Mr Stevens on 11 August 1980, but that endorsement cannot be accurate, given the date of the minute itself.
"TO THE DIRECTOR OF FISHERIES: Several fishermen have been trying to get us to issue Commonwealth licences when their applications for SA fishing licences and subsequent appeals have failed. There has been an agreement between Commonwealth and States since 1952 that a person must hold a State fishing licence before he can obtain a Commonwealth licence. We have therefore refused these applications. The Commonwealth also has been saying we have no right to refuse although it has now been pointed out to them that the Agreement above is still binding and that we do not intend to issue the licences. If we did issue the licences it could mean that every applicant who is refused a SA State licence could get a Commonwealth licence and we would then have no freeze on numbers in the Scale fishery. I have been expecting a reaction from the Commonwealth over this but we have had none so far. The topic is also not on the Standing Committee Agenda for September and this is surprising. Legally we are on shaky ground, and threats have been made by a Mr Josephs of Kangaroo Island to take the matter up with the local Commonwealth Member. No doubt when the offshore Constitutional Settlement has been finalised between Commonwealth and SA the problem will disappear.
829 There is no other evidence which establishes whether or not an agreement of the kind referred to in paragraph 2 of the minute was in place and operative in 1980. However, it must be accepted that the minute lends some support to the view that if a fisherman had attempted to obtain the issue of a Commonwealth licence without having successfully applied for a South Australian fishing licence, the application may have been refused.
830 Although the memo includes the phrase "legally we are on shaky ground", the first paragraph of the minute indicates that several fishermen unsuccessfully appealed against their failure to obtain the issue of a South Australian fishing licence.
831 I have referred to the allegation in paragraph 12(C)(iv) of Mr Edwards' Statement of Claim which is the only express reference to any losses associated with a denial of an opportunity to fish for tuna. That plea was first introduced into the Statement of Claim by way of an amendment incorporated in a further amended Statement of Claim filed on 28 August 1995, some nine years after the proceedings had been instituted.
832 Not without some justification, the defendants contend that the claim is very much an afterthought and that I should find that Mr Edwards never had any serious intention at any relevant time of fishing for tuna.
833 They further contend that if he had intended to fish for tuna, given that the Commonwealth fishery was unrestricted as at 1 January 1981, he could have done so pursuant to a Commonwealth fishing boat licence using an employee skipper and crew. the very manner of operation that his expert accountant, Mr Irving, was instructed to assume Mr Edwards would adopt.
834 The explanation which he offered in evidence was that he did not apply for a Commonwealth fishing boat licence as he could not do so without first obtaining a State licence.
835 The question arises whether, if in fact Mr Edwards had been advised in 1980 that he could not obtain the issue of a Commonwealth licence without having a South Australian licence, there is no reason at all why he could not have applied for a South Australian fishing licence, or indicated on the form which he signed when he transferred his authority to Mr Haagmans that he wished to retain it.
836 If he seriously intended to fish for tuna, one would have expected him to apply for a Commonwealth licence to do so, and at the same time, if his belief was that a South Australian fishing licence was a necessary prerequisite, to apply for that as well.
837 At all events, there is a dearth of evidence that any representations were made to Mr Edwards by any of the director defendants on the topic.
838 Suggestions that Mr Stevens or Mr Kirkegaard had told Mr Edwards that he was required to surrender his South Australian class A licence in 1980 were not pleaded and were not referred to prior to trial. Mr Stevens had no recollection of any discussions when the matter was raised when he was giving evidence, and the suggestion that Mr Kirkegaard might have done so was never put to him during the course of his evidence.
839 I find that the suggestion of statements to that effect by either Mr Stevens or Mr Kirkegaard is a concoction designed by Mr Edwards to bolster this aspect of his claim.
840 In any event, the evidence, particularly the evidence of Mr Jeffries, satisfies me that the manner in which Mr Edwards suggested that he might have fished for sashimi tuna, given the limitations of the boat and equipment which he was intending to use, and the fishing technique (trolling), was unlikely to be productive of commercial yields.
841 My conclusions as to the factual findings and some incidental findings as to matters of law on this topic are as follows:
(1) The requirement that Mr Edwards surrender his A-class fishing licence at the time of his sale of his abalone business in the event that the purchaser did not hold such a licence was the expression of a valid ministerial policy.
(2) I am unable to find on the evidence that there were any representations made to Mr Edwards as to any requirement that it was necessary for him to hold a South Australian fishing licence as a prerequisite for the issue of a Commonwealth licence.
(3) Mr Edwards never had an intention to fish for tuna, and his belated claim on this head is a concoction which has its genesis in Mr Edwards' discovery of documents which suggests that there might have been an agreement between the Commonwealth and the State of South Australia of the kind referred to in the minute of 15 August 1980.
(4) In any event, if there was such an agreement, there is no basis upon which I could hold that it was not a valid agreement.
(5) Insofar as Mr Edwards' claim under this head sounds in misfeasance in public office, there is simply no evidence which could support a finding that any of the elements in the tort have been established.
(6) For similar reasons, the alternative claim in negligence must fail.
842 I have not so far referred to a claim made by Mr Murphy that he was wrongfully denied a right to hold, simultaneously, "boat authorisation certificates" with respect to more than one boat (Statement of Claim, paras 9B, 10.A.II, 14.4(ii)).
843 He maintained in evidence that there was a practice for abalone divers to be permitted to operate from two boats, commonly a smaller "tinny" and a larger, heavier fibreglass boat. He said that this enabled a choice to be made as to which was more manoeuvrable in the particular sea conditions which might be prevailing, with the result that fishing efficiency was enhanced.
844 There was little support in the evidence given by other divers for that suggestion. I am unable to find that it was a widespread or widely understood practice.
845 The claim is advanced with respect to the period after Mr Murphy sold out of the industry, on the footing that if he had remained, utilising some form of trust holding, the fishing operations would have been carried on from two authorised boats, with a consequent increase in the catch.
846 The short answer to the claim is my finding that Mr Murphy sold out of the industry for reasons unconnected with any action on the part of the defendants.
847 Furthermore, although the Full Court held that more than one boat might be registered, having regard to the regulations, there was no obligation on the defendants to issue an abalone authority with respect to more than one boat. Clearly, once the system of authorities attaching to boats replaced the permit system, the defendants were entitled to confine any abalone diver to one boat and one authority.
848 Mr Edwards concedes in his Statement of Claim and in the presentation of his case that for any of his claims to be entertained he requires an extension of time under the Limitation of Actions Act 1936.
849 In the case of Mr Murphy, for reasons which I will come to, he eventually submitted that he was not in a position where he required any extension of time. It is not surprising that, in the face of that submission, emphasis was placed by the defendants to Mr Murphy's claim, on a submission that in his case particularly, the defence of laches was made out.
850 The relevant period of limitation is six years, given that the two causes of action in question, namely, misfeasance in public office and negligence, are both actions "founded on tort" within the meaning of s 35 of the Limitation of Actions Act.
851 The relevant parts of s 48 of the Act are as follows:
"48. (1) Subject to this section, where an Act, regulation, rule or by-law prescribes or limits the time for- (a) instituting an action; or (b) .......... (c) ........... a court may extent the time so prescribed or limited to such an extent, and upon such terms (if any) as the justice of the case may require. (2) .................. (3) This section does not- (a) ............ (b) empower a court to extend a limitation of time prescribed by this Act unless it is satisfied- (i) that facts material to the plaintiff's case were not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff; or (ii) that the plaintiff's failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances, and that in all the circumstances of the case it is just to grant the extension of time. (4) ..........."
852 Section 48 was inserted into the Act by an amendment effective from 19 May 1972.
853 After some initial uncertainty, it was eventually established that the ascertainment of the material fact within the meaning of the section need play no part in the plaintiff's decision to sue. As it was put by the High Court in Sola Optical Australia Pty Ltd v Mills:[73]
"There is no warrant for writing into the Act ...... that, to attract the operation of s 48(3)(b)(i), there must be some interaction between the material fact and the plaintiff's decision to sue. It is materiality to the plaintiff's case that must be shown."
854 As for materiality, the court went on to say in their judgment in the same case:[74]
"A fact is material to the plaintiff's case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case."
855 In Sola Optical the ascertainment by the plaintiff of the contents of a specialist's report dealing with her injuries the subject of her claim was held to be "... capable of being material to the respondent's case in the sense that the report represented available evidence that could be called in support of her case."[75]
856 In an early authority it was said by Bray CJ that:
"... it is the ascertainment of fact which is required, not the ascertainment of opinion. I do not think that the receipt of advice from counsel that the party has a good cause of action could be regarded as the ascertainment of a material fact for the purpose of s 48, but it [is] not necessary to decide that now."[76]
857 Although that statement of principle by Bray CJ is strictly obiter, since Napolitano v Coyle it has been accepted as good law.[77]
858 I come now to a consideration of the facts said to be material to each of the plaintiff's cases and which are put forward in support of the application for an extension of time.
859 In paragraph 34.1 of Mr Edwards' Statement of Claim he pleads:
"The first named plaintiff [Mr Edwards] admits that the cause of action for damages referred to in paragraphs 11 and 12 became statute barred progressively from about 1974."
860 There are in fact two causes of action for damages referred to in paragraphs 11 and 12. They are the causes of action sounding in misfeasance in public office and negligence, relating to the alleged representation concerning licences to employ.
861 No doubt 1974 is referred to, as that is six years after 1968, which is the year from which Mr Edwards asserts that he began to experience losses under this head of claim.
862 The expression "statute barred progressively" and various submissions put from time to time by Mr Edwards raise the question as to whether or not, when the conduct of the director defendants is said to have been repetitive and ongoing, a succession of fresh causes of action is generated which would give the limitation of action defined in s35 of the Limitation of Actions Act an ambulatory effect.
863 To be specific, in the case of alleged directions said to have been given by the director defendants, which, on Mr Edwards' case, were beyond the limits of their statutory authority and amounted to acts of misfeasance in public office, no less than 24 occasions are identified, stretching between 1968 and 1980 upon which the director defendants or their officers are alleged to have orally repeated directions precluding Mr Edwards from utilising an employee to dive. Although the date of the alleged 1980 direction is not pleaded, if it happened to be after 22 August 1980, it would be within six years of the date of issue of the writ on 22 August 1986. I ignore for the moment the fact that clearly Mr Edwards had decided to sell out of the industry before August 1980, and any operative representations or directions asserted by him against the director defendants presumably took place before then.
864 The cause of action is complete when any loss is first suffered.
865 In my opinion, where the alleged directions do no more than give expression to an ongoing policy and do not differ in substance or effect, there is only one cause of action which arises when loss was first said to have been suffered, which in this case is 1968. The director defendants or fisheries officers acting on their behalf have merely repeated earlier directions to the same effect which earlier directions were acted upon by the plaintiffs. Subsequent directions did not cause any different response or alteration in the plaintiffs' position or circumstances, as opposed to the consequences of the earlier directions. In my opinion, in such circumstances the Court should approach the matter on the footing that there is one cause of action, and that it arose when damage was first suffered as a result of the earliest of the directions relied upon by the plaintiff.
866 Even if I was to be wrong in that conclusion, given that Mr Edwards left the industry as a result of the sale of his licence in November 1980 and that the proceedings were instituted on 22 August 1986, the only cause of action which would not be out of time and which would not require an extension of the time for the commencement of proceedings would be a cause of action which arose on or after 22 August 1980.
867 Even adopting the most gymnastic approach to the question as to when any particular cause of action sued upon arose, I am unable to perceive that any of the causes of action relied upon by Mr Edwards in his proceedings could possibly be said to have arisen after August 1980 as opposed to some date before then.
868 In any event, Mr Edwards did not suggest otherwise. He came to court on the basis that he required an extension of time in which to sue on all of his causes of action.
869 Statements of Mr Olsen in relation to the licence to employ are alleged to have commenced in 1968. Insofar as I am of the view that any cause of action arose when the first of such statements was made and acted upon by Mr Edwards and was at that time productive of loss or damage, the cause of action would necessarily relate to the regime of the administration under the 1917 rather than the 1971 Fisheries Act.
"All actions to be brought against the Minister or any inspector, officer or other person for anything done under this Act shall be commenced within six months after the act complained of was committed."
871 Section 48(1) of the Limitation of Actions Act 1936 extended the time for the bringing of such an action to one year.
872 Section 48 came into force on 19 May 1972. I accept the contention of the defendants that any cause of action which was barred at that time was barred for ever. It was not revived or capable of being revived by recourse to the provisions contained in s 48 by which an extension of time to sue could be sought: see Van Vliet v Griffiths.[78]
873 For similar reasons, an extension of time to institute proceedings with respect to the alleged claim for loss of the ability to hold a Western Australian licence contemporaneously with the South Australian fishing licence must fail. This is because, on Mr Edwards' own case, the cause of action in Western Australia must have arisen before 9 January 1970. That is on the assumption, which I think is correct, that any cause of action arising with respect to the alleged inability of Mr Edwards to develop a fishing business in Western Australia is a separate and distinct cause of action.
874 I will refer seriatim to the alleged material facts pleaded.
875 (1) Mr Edwards pleads (Statement of Claim, para 34.1.1) that the "endorsement on his licences" [being the licence to employ a person to take abalone endorsed on his A-class fishing licence] "conferred on him a right to employ a person". I assume that the intent of the pleader is to suggest not simply that the endorsement conferred a right to employ a person, but that it conferred a right to employ a person to dive for abalone.
876 He goes on to plead that he ascertained that fact by reason of his receipt, in about March 1986, of a letter of advice dated 21 February 1986 from "junior counsel retained by the first named plaintiff's then solicitors".
877 The letter in question was tendered in evidence. It is a letter from Mr Philip McNamara of counsel to Genders Wilson & Partners, then solicitors for Mr Edwards. The letter is a lengthy letter, and I do not pause to set it out in full.
878 Mr McNamara begins by quoting the question which had been posed upon which Mr Edwards had sought his "urgent advice". He states the question in these terms:
"Did the endorsed authorisation to employ one or more persons to take fish (item 2 on our yearly licence) give the licence holder an unequivocal right to use that person (sic) as a second diver in his diving business?"
879 Mr McNamara goes on to analyse the various statutory provisions relating to the grant of fishing licences, including licences to employ. Amongst other provisions, Mr McNamara had regard to regulation 35(5) of the Managed Fisheries Regulations 1971 as amended in August 1980. As I have explained above, this purported to confine the authority to take abalone from an authorised boat to the holder of the abalone authority and to the exclusion of any person employed by him or her, except in the case of a relief diver who might be authorised to take abalone for a specified period not exceeding 21 days (regulation 35(1)).
880 In the result, Mr McNamara answered the question posed for him as follows:
"(a) Until 28 August 1980 'yes', if the licence bore the necessary indorsements (sic); (b) After 28 August 1980: 'No', irrespective of the contents of the licence."
881 Neither the question posed nor the answer to the question, nor anything else in the letter of advice of 21 February 1986, could possibly amount to a material fact within the meaning of s 48. I repeat what fell from Bray CJ in Napolitano v Coyle:[79]
"I do not think that the receipt of advice from counsel that the party has a good cause of action could be regarded as the ascertainment of a material fact."
882 Of course, Mr McNamara's opinion fell short of being an opinion that Mr Edwards had a good cause of action. It was no more and no less than an opinion as to the legal entitlements of the person holding an A-class fishing licence with a licence to employ endorsed upon it, having regard to the relevant provisions of the Fisheries legislation.
883 (2) The next alleged material fact pleaded by Mr Edwards appears in paragraph 34.1.2 of the Statement of Claim where he asserts:
"In about August 1986, he [Mr Edwards] ascertained that one John Verrier, a former Fisheries officer, was willing and able to give evidence in support of the allegations herein that the conduct of the defendants was actuated by malice towards the first named plaintiff, in that the defendants had acted knowingly contrary to law."
884 In support of that plea, Mr Edwards' own evidence was:
"A. John Verrier told me, in front of Barry Hopcroft, who was there, that he was asked to spy on four people from South Australia, myself, Barry Hopcroft - when I say 'myself', Ray Edwards, Barry Hopcroft, John Ey and a fourth person that doesn't come back to me for the moment, but it will, and that if we made any movements to Western Australia, he was to report me to the Director of Fisheries, because the Director of Fisheries intended to cancel the permit of anyone that went to Western Australia .... and he further told me that he had had discussions with Mike Koch, and that Mike Koch had had discussions with Mick Olsen about it, and that Verrier had raised the fact with Mike Koch to raise with Olsen that, in his view, there was no reason why people couldn't take up interests in Western Australia contemporaneous to South Australia, and he told me that in his view, he thought it was a bluff, and he put it to Mike Koch, and Mike Koch said 'Yes', Mick Olsen, ' it is a bluff'. That's what he told me, amongst other things."
885 Mr Verrier was called to give evidence. Although no longer with the Fisheries Department, he explained that he had been an assistant inspector in the Fisheries Department between 1968 and 1971.
886 He deposed to a discussion with Mr Koch in the following terms:
"Q. In relation to divers employing other people, did you have discussions with Mike Koch, a senior inspector. A. Yes, in the latter part Mike Koch came over to work with me as my senior, and I held discussions about - being new, or learning, under a learning curve, I was trying to find out how the Act was implemented - and quite a few discussions I held with Mike Koch about the fact that there was provision for these people, the divers, to have an employee's licence, as all the other fishermen, but it was the policy that they weren't allowed to have an employee's licence. I was confused by this so I held discussions with Mike Koch and asked him why that was the case. During the winter months, when we had a lot of time when we weren't doing much, we'd hold discussions about different facets of the job and the law, and how we were to do briefs and so on, and I said 'Why, under the section of the Act, can't they do this? Show me where.' He couldn't do that and I said, 'Why is it?', and he said 'It's bluff'. I said, 'It must be. Why don't these people put it to the test and take the department to court?', and he said 'Well, if you were a diver, would you do it? It would cost you too much money, for one thing, and you'd probably lose your licence for another', so in other words we had them bluffed, and he agreed. It was bluff, and that was our conclusion, as in discussion between the two of us. I couldn't understand how that could be, but - "
887 Mr Koch was called to give evidence. He denied ever having a conversation with Mr Verrier along those lines. His evidence was:
"Q. Did Mr Verrier ever ask you a question along these lines; why couldn't an employee of an abalone diver dive and take abalone from the bottom of the sea. A. I don't recall a direct question in that nature but it was - the taking of abalone could only be done by the licensed permit holder and, I mean, that - there would have been no doubt at times that we have discussed such matters in the course of who could do what and where. Q. Did you ever tell Mr Verrier that there was no provision in the Act that prevented employees diving and taking abalone from the seabed and that it was a bluff that the department or the inspectors were putting forth. A. No, no. Q. Is it likely you would have ever said anything like that. A. No.
Q. Why do you say it wasn't a bluff. A. Well, because the legislation was quite specific, that the permit holder was the person that could take the fish, and that's why the abalone permit was issued to an individual; it was to authorise that person to take the abalone. Q. Did Mr Verrier ever say to you, in connection with the sort of conversation I have put to you, which you have denied, but I will put this further part: did he ever say to you words along these lines: 'Why don't these people put it to the test and take the department to court' and did you say 'If you are a diver would you do it. It would cost you too much money and you'd probably lose your licence, so in other words, we had them bluffed'. A. No.
Q. Can you think of any conversation Mr Verrier might have been referring to when he gave evidence along those lines. A. Definitely not. I mean, if I knew that what we were enforcing was a bluff, if I was aware of that, I would have made an issue of it because you can't enforce a law that doesn't exist. So, no, I can't think of any - to my knowledge we have never had any legislation or anything that was a bluff."
888 I have already made findings as to the credibility of both Mr Edwards and Mr Verrier. I accept the evidence of Mr Koch. I find that no such conversation with Mr Koch as deposed to by Mr Verrier occurred.
889 Of course, it does not follow that Mr Verrier's conversation with Mr Edwards, as alleged by them, did not occur. But for that to have occurred, Mr Verrier would have fabricated his account to Mr Edwards of what Mr Koch is alleged to have told him. That is unlikely.
890 In the result, Mr Edwards fails to prove, on the balance of probabilities, that the conversation which he alleges took place between him and Mr Verrier occurred.
891 I note, to make it clear that the point has not been overlooked, that in any event, Mr Edwards' evidence was not consistent. As pointed out by the defendants, Mr Edwards later suggested that the Verrier/Koch conversation about bluffing related to the alleged Western Australian representation rather than as to the rights of employee divers.
892 (3) Mr Edwards asserts that certain documents, which he maintains he saw for the first time in about August 1986 (presumably before the writ was issued on 22 August 1986), "provide corroborative evidence of his own intended evidence".
893 The question, of course, is not whether the documents might provide corroborative evidence, but whether or not his awareness of the documents amounts to the ascertainment of a material fact within the meaning of s 48.
"(i) minutes of a meeting of the Abalone Divers' Association's (sic) of South Australia held on 8 January 1980; and (ii) a report in the Sunday Mail newspaper published on about 20 March 1977."
895 As for the minutes, these indicate that a number of members of the Association were present, although not Mr Edwards, and that the defendant Mr Kirkegaard was present. Although he is not listed amongst those present or amongst the "invited guests", Mr Kirkegaard answered a number of questions which, together with his answers, are summarised in the minutes.
896 The minutes are lengthy. They extend over seven pages of close typing. Most of them concern the questions put to Mr Kirkegaard and his answers. These are on topics such as concern by the abalone divers as to the level of licence fees; problems arising from the use of relief divers; the possibility of periodic closures of the fishery, and some other incidental matters.
897 I have carefully perused the minutes but I am unable to see that they identify any fact which could be regarded as a material fact for the purposes of s 48.
898 The lengthy answers given by Mr Edwards when examined in the course of his evidence in chief as to what he regarded as significant in the minutes leaves me none the wiser as to what he asserts to be the significance of the document in identifying any material fact. His answers are rambling and at times less than coherent. To a large extent, they centre upon the record in the minutes of things said by Mr Kirkegaard relevant to safety and health issues of the divers, an issue which is not relevant to the proceedings.
899 Mr Edwards has failed to satisfy me that this document identifies any material fact.
900 The other document, the report in the Sunday Mail newspaper published on about 20 March 1977, is a short article under the heading "Relief Diver Refused". It commences:
"An abalone diver believes he has been victimised by the Fisheries Department."
901 The article identifies the diver concerned as a Mr J.R. Kroezen, described as "recently a leading critic of departmental licensing policy". The article centres upon his complaint as to the alleged conduct of the Fisheries Department in refusing to allow him to employ a relief diver for a fortnight while he went into annual army reserve training. It quotes various comments by Mr McColl, the then Director of Agriculture and Fisheries, in terms justifying the Department's decision.
902 There is nothing either in the article or in Mr Edwards' evidence about the article which persuades me that the article contains or identifies any material fact within the meaning of s 48.
903 Furthermore, given my view as to Mr Edwards' credit, I am not prepared to accept his evidence that he first learnt of either document when Mr Kroezen brought them to Mr Edwards' flat in 1986. Elsewhere in Mr Edwards' evidence he says it was Mr Symons who gave the documents to him. Neither Mr Kroezen nor Mr Symons were called to give evidence.
904 The Abalone Divers' Association had a practice of sending minutes to all licence holders at the time. Friends of Mr Edwards' were at the 1980 meeting the subject of the minutes. I think it more likely that by one means or another he learnt of the minutes at the time of the meeting, or shortly thereafter. Also I think it more likely that he was aware of the Sunday Mail article at about the time of its publication.
905 In any event, the onus is on Mr Edwards to satisfy me that both documents contain material facts, and that he did not ascertain the material facts until a time within twelve months of issuing the proceedings.
906 He has failed to satisfy me as to both matters.
907 In paragraph 34.1.4 of the Statement of Claim Mr Edwards asserts:
"The first named plaintiff's right to declaratory relief, as sought in prayer 3 of the Writ, is not statute barred."
908 In the first place, the operative prayer for relief is that contained in the Statement of Claim which in that respect supersedes the endorsements on the writ. While certain declarations are sought by way of relief in the Statement of Claim, the making of declarations is an exercise of the equitable jurisdiction of the court, and is discretionary.
909 It would not be right to make declarations as to an entitlement for relief if proceedings to enforce the entitlement by way of an action for damages, or other substantive relief, was statute barred.
910 It follows that this plea does not avail Mr Edwards.
911 (4) Paragraph 34.2 of the Statement of Claim commences:
"The plaintiffs admit that the cause of action referred to in paragraphs 27 to 30 became statute barred in about September 1986. However, the plaintiffs say that in May 1986, they ascertained that the representations referred to in paragraphs 27 and 30 were false."
912 The paragraph then proceeds to identify occasions or means by which the plaintiffs, which I assume means Mr Edwards, first ascertained the relevant facts.
913 The pleas in paragraphs 27 to 30 of the Statement of Claim relate to the claims concerning companies, partnerships and trusts. I assume that Mr Edwards asserts that those claims became statute barred in about September 1986, as it was in about September 1980 that he agreed to sell out of his abalone business. Although this was not explained in the plea, I assume that the underlying assumption is that it was in about September 1980 that for that reason these claims crystallised, in the sense that he then suffered damage which completed the alleged causes of action.
914 There are a number of difficulties associated with this analysis of the situation.
915 In the first place, I do not accept the defendants' contention that it is the date of the filing of the Statement of Claim (the first Statement of Claim was filed on 29 December 1986) rather the date of the commencement of the proceedings by the issue and service of the writ, which is the critical date for the purposes of s 48.
916 Pursuant to s 48(4), when an extension of time is sought pursuant to the section, although the action may be instituted in the normal manner:
"... the process by which it is instituted must be endorsed with a statement to the effect that the plaintiff seeks an extension of time pursuant to this section."
917 The endorsement on the writ issued by Mr Edwards and his company on 22 August 1986 seeks an order "to the extent that may be necessary in the circumstances" that the time within which the action should have been instituted be extended pursuant to s 48. It indicates in general terms that the ground upon which the extension is sought is that "facts material to the plaintiffs' claim were not ascertained by them until after the expiration of the period of limitation" and that the action was instituted by them within twelve months after the ascertainment of those facts.
918 A plaintiff may either serve a Statement of Claim with the writ or serve it subsequently. The writ did not particularise any of the claims, but no criticism can be made of that. A writ may be issued simply identifying the claims in short general terms, relying on the Statement of Claim to give appropriate detail.
919 So that if the relevant facts were ascertained by the plaintiffs "in about September 1986", as asserted in paragraph 34.2 of the Statement of Claim, the proceedings were issued within time and no extension of time would be necessary.
920 However, Mr Edwards faces a number of difficulties with respect to this aspect of the matter.
921 The first occasion upon which it is asserted in paragraph 34.2 that the plaintiffs learnt that the representations in paragraphs 27 and 30 were "false" was "at a conference with their legal advisers in early May 1986".
922 It is clear, however, that the legal advisers were not communicating to the plaintiffs facts, as opposed to an opinion, namely, an opinion that under the relevant provisions of the statute and regulations licences or authorities might be held in trust. At least, Mr Edwards has not identified any "fact" as opposed to opinion" being referred to at the conference. In any event, I am not satisfied that advice to that effect was given on that occasion in the absence of clear evidence as to what took place at the conference. No-one who was present was called to give evidence as to that aspect of the matter. Relevant records have been destroyed. It is Mr Edwards' evidence alone which I am asked to accept as to this aspect of the matter.
923 For the reasons already given, I am not prepared to accept his evidence on any matter unless there is independent supporting evidence which I am prepared to accept.
924 Mr Edwards goes on then to refer to a circular letter dated 15 October 1980 from Mr Stevens to holders of fishing licences/abalone authorities as being a source of his ascertainment of the falsity of the representations as to trusts, being a circular which he says he first saw in August 1986.
925 As Mr Edwards had, by about the date of that circular, left the abalone fishing industry, it may well be that he did not receive the letter, which in fact is in the form of a notice, at about the time it was apparently sent out.
926 But even assuming that he first saw it in August 1986, it does not contain anything capable of being construed as evidence of a material fact.
927 The notice, which is on the letterhead of the Department of Fisheries, is in the following terms:
"A form is enclosed for you to request the issue of a fishing licence/abalone authority for the 1980/81 licensing period. The endorsements on the licence and the schedule(s) of conditions attached are based on the Government announcements on the 23rd April, 1980 in respect of the marine scale fishery, and the results of negotiations which have taken place with AFIC and the Abalone Divers' Association of SA Inc; please note that Section 34 of the Fisheries Act provides the means whereby conditions can be reviewed. PLEASE SIGN THE FORM IN THE PLACE PROVIDED AND RETURN IT TO THIS OFFICE WITH THE TOTAL AMOUNT SHOWN. DO NOT MARK OR DETACH THE LICENCE FORM OR ENDORSEMENT(S) OR THE SCHEDULE(S) OR CONDITIONS IN ANY WAY. Consultation with AFIC has resulted in a new licence fee of $50.00 and a licence to employ fee of $15.00 (for each employee). The fees for the abalone authority for 1980/81 are as indicated in my circular dated 28th August, 1980. Although an employee sheller may not dive from the authorized vessel to take fish for sale he is nevertheless involved in the taking of fish for sale under the provisions of the Fisheries Act and must be covered under a licence to employ. My previous advice to you in this matter is to be disregarded. Please note that you as the licence holder have been noted as the owner of the vessel in both the abalone authority and certificate of vessel registration. You have been requested to nominate a vessel which will become the authorized vessel for the 1980/81 licensing year. For ease of identification of gear the registration number allocated to this vessel must be marked on your gear - the number will become your licence number and will be retained by you for as long as you hold a current fishing licence. Following discussions at the Abalone Management Liaison Committee on 2nd October, 1980 it was agreed that before an authorized vessel can be replaced, the Department must be advised three months in advance of the proposed replacement. Any application to replace a vessel due to accidental loss must be made to the Director of Fisheries. When the face of the fishing licence has been receipted with the cash register imprint, it will be returned to you with the Endorsements and the Schedule(s) of conditions in booklet form, enclosed in a plastic bag. This will then be your Fishing Licence for 1980/81.
928 In the next paragraph of the Statement of Claim Mr Edwards asserts that he first learnt in about August 1986 of the fact that holders of prawn and rock lobster authorities operated through companies or as trustees for companies. I accept the contention of the defendant that this is plainly a dishonest assertion.
929 Quite apart from any other considerations, Mr Edwards wrote a letter to the Director of Fisheries dated 22 April 1985 in terms indicating that Mr Edwards knew at that time of the different situation in respect of prawn fishery. Also in a letter dated 20 May 1985 to the Director of Fisheries, Mr Edwards specifically refers to the lists published in the SAFIC magazine of fishing licence owners which in the letter he acknowledges "... continually listed a considerable number of companies owning A class licences by way of nominee ...".
930 On the whole of the evidence, I am satisfied that Mr Edwards well knew of the matters asserted in paragraph 34.3 of the Statement of Claim much earlier than August 1986.
931 His earlier knowledge also leads me to reject the suggestion made in paragraphs 34.3.2 and 34.3.3 that Mr Edwards first learnt of the alleged falsity of the representations concerning trust holdings by reading in about August 1986 the SAFIC magazine which had been published in May 1978 and by reading minutes of the meeting of the Abalone Management Liaison Committee held on 12 February 1981. I am not satisfied that he did not read those documents other than at about the time they came into existence.
932 The PFIAC claim was added by way of an amendment to the pleadings effected pursuant to leave granted by Master Bowen Pain by order dated 2 July 1991. In paragraph 34.5 of the Statement of Claim, Mr Edwards pleads as follows:
"The first plaintiff admits that the cause of action referred to in paragraph 13A of this statement of claim [PFIAC claim] became statute barred in or about April 1980. However, the first plaintiff ascertained for the first time in or about June 1990 the facts referred to in paragraphs 13A(4) and (5) of this statement of claim when he first saw the said minutes of the said committee and became aware he had a cause of action."
933 I approach this aspect of the matter on the footing that for an extension of time to be granted with respect to the amended plea in which the PFIAC claim is pursued, Mr Edwards must satisfy the Court on the balance of probabilities that he ascertained the material fact with respect to the PFIAC claim within the twelve months prior to 2 July 1991.
934 The plea in paragraph 34.5 of the Statement of Claim, when it refers to "in or about June 1990" is hardly apt to identify an occasion within twelve months prior to 2 July 1991.
935 As for evidence on the topic, this is lacking. Mr Edwards' evidence is that it was Mr Corigliano who brought or sent the PFIAC minutes to him. Mr Corigliano was not called. Mr Edwards did not give evidence as to just when it was that the minutes first reached him and when he read them except that it was in 1990.
936 The evidence is simply not sufficient to discharge the onus on Mr Edwards to prove that he first saw the minutes within twelve months of the amendment which pleaded this claim.
937 So that even assuming in Mr Edwards' favour that his perusal of the minutes constituted the ascertainment of a "material fact" within the meaning of s 48, a conclusion challenged by the defendants, the plea for an extension of time with respect to the PFIAC claim must fail.
938 For these reasons, Mr Edwards' various claims for an extension of time to bring the proceedings, with respect to such of the causes of action as were out of time when the writ was issued, fail.
939 Mr Murphy's summons was issued on 9 April 1987. The first Statement of Claim pleaded by him was annexed to the writ. It included a claim (para 23):
"To the extent that may be necessary in the circumstances, the plaintiff hereby makes application as provided for in s 48(4) of the Limitation of Actions Act 1936."
940 Although clearly that was an application for an extension of time, it does not in fact say so in as many terms, as it is bereft of any particulars, including any particulars as to the ascertainment of material facts.
941 The Statement of Claim underwent a number of amendments, including amendments which purported to include "particulars of material facts". That plea is in the following terms:
"24.1 The Plaintiff says that facts material to his case within the meaning of section 48 of the Limitation of Actions Act were not ascertained by him until after 26th August 1994 when he first obtained access to substantial and previously undiscovered files kept by the defendants at the State Archives and first inspected by the plaintiff after that date. PARTICULARS OF MATERIAL FACTS The following vital documents which the plaintiff first became aware of on or after the 26th of August 1994 and which contains material facts upon which the plaintiff rely as follows together with related Plaintiff Edwars annex marked A; (i) Letter from the Crown Solicitor to Director of Fisheries dated 13/4/81 (ii) Letter from Crown Solicitor to the Honourable the Attorney-General dated 11/10/73 24.2 Further or in the alternative the plaintiff says that (i) The defendants' failure to provide adequate discovery of the said files and (ii) statements made in letters to the effect that the defendants were unaware of the existence of the said files, which statements were false. PARTICULARS (1) Letter from South Australian Department of Fisheries to G.D. Chamberlain dated 25th July 1990 (2) Letter from Crown Solicitors Office to Armour & Co dated 5 April 1993 (3) Letter from Crown Solicitors Office to Armour & Co dated 28 October 1993 (4) Letter from Crown Solicitors Office to Armour & Co dated February 1994 amounted to conduct leading to the plaintiff's failure to institute the within cause of action within the meaning of section 48(3)(b)(ii) of the Limitation of Actions Act 1936. 24.3 The plaintiff's right to declaratory relief as sought in paragraph 3 of the relief sought by the plaintiff hereinafter appearing is not statute barred. 24.4 The plaintiff says that, in all the circumstances, it is just that the time for institution of these proceedings be extended to the date hereof."
942 The plea is obviously defective in that it does not name a date when Mr Murphy might be said to have ascertained material facts within the meaning of s 48, being a date within twelve months of the commencement of the proceedings in 1987. Ascertainment of an alleged material fact on or after 26 August 1994 could obviously not satisfy that requirement.
943 Furthermore, I am not satisfied that there were any shortcomings in the making of discovery by the defendants which in any way prejudiced Mr Murphy.
944 If the matter had rested there, I would have endeavoured to assist Mr Murphy properly to plead whatever case he might have had for an extension of time, and to present what evidence might have been available to him on the topic. But in the events which happened, I came to the view that it was unlikely that he needed to apply for an extension of time, and for that reason I did not pursue the matter further with him.
945 Despite allegations to the contrary in his Statement of Claim, during the course of the trial Mr Murphy abandoned any claim with respect to the alleged loss of an opportunity to derive benefits from employing divers to take abalone on his behalf except for the period following his departure from the industry in June 1983. The calculation of his damages does not commence until then.
946 Of course, it would not be open to a plaintiff to manipulate the situation by abandoning a claim for losses prior to a date within the limitation period in order to avoid the need to apply for an extension of time to institute proceedings. In such a situation one would have to look at the reality of the plaintiff's position. If in fact the cause of action upon which the plaintiff sues is complete at an earlier date the waiver of a claim for damages over some intervening period could not affect the position.
947 But at the end of the day, I am not satisfied that that is the case. I accept Mr Murphy's evidence to the effect that he would not have availed himself of the opportunity to employ divers or to look for any form of indirect holding of his licence and abalone authority until sometime after he injured his back at the beginning of 1983. I am satisfied that in an endeavour to maximise his returns from abalone diving he would have treated the operation of his licence and authority as personal to himself for as long as he could. Support for this view is borne out by the fact that Mr Murphy never, or hardly ever, used relief divers.
948 Effectively I have treated his claim as being a claim for loss of an opportunity to perpetuate his involvement in the abalone industry as from about June 1983 by utilisation of employee divers or some form of trust ownership of his licence and authority. In real terms, the loss which he suffered, if at all, was when (on his case) believing that neither of those strategies was open to him and that he had little option but to sell out of the industry, he did so in June 1983.
949 Mr Cuthbertson for the defendants contended that, even assuming Mr Murphy's claim to be truthful, he would not have availed himself of trustee ownership until January 1983. Mr Murphy suffered a loss when he acquired the abalone authority which was subject to "the alleged unlawful policies, thus diminishing the value of his authority .... If Mr Murphy's claim that value of the authority is diminished due to acts of the first defendant, it would follow that damages would occur as soon as he purchased the authority".
950 If the restrictions devalued the authority at the time of Mr Murphy's purchase of it, then the argument works both ways. He would have had to pay more for the authority absent those restrictions if they had not been in place at the time. Indeed, in those circumstances he may not have been able to afford to buy into the fishery at all!
951 But at all events, in my opinion, the argument put forward by Mr Cuthbertson in that respect should not be accepted. The real and substantial impact upon Mr Murphy occurred when he decided to sell out of the industry in 1983. The fact that I do not accept his contention that this was because of his bad back but rather for other reasons which I have already explained, does not alter the fact that that is when he effectively lost the opportunity of maintaining an interest in the industry by indirect means. That is when, effectively, if he suffered a loss, it arose.
952 In both causes of action, that is misfeasance and negligence, the cause of action does not arise until the loss is suffered. So much is conceded by Mr Cuthbertson.[80]
953 Mr Murphy does not require an extension of time to institute his proceedings.
954 Having regard to my conclusion as to Mr Murphy's position, this question is of potential relevance only to Mr Edwards' claim. Even then, having regard to my conclusion that he has not proved the ascertainment of a material fact within the twelve months of instituting the proceedings, no question of the discretion strictly arises.
955 But if I was to be wrong in my conclusion as to ascertainment of material facts, it would be necessary to deal with the defendants' contention that the discretion under s 48, even if any foundation for its exercise was to be established, should be exercised against granting an extension of time for Mr Edwards' claim to be instituted.
956 The defendants point out that most of the claims made in the proceedings relate to actions and statements allegedly made in the period between 1968 and 1974, but the writ was not issued until 22 August 1986.
957 At the trial I permitted the tender of a number of affidavits proffered by the defendants which deposed to unsuccessful attempts by various employees of the Crown Solicitor's Office to locate documents of various kinds which would obviously have been relevant to the defence of Mr Edwards' claim. Documents which could not be located but which might well have been found if the proceedings had been issued in a timely fashion include records of the Abalone Divers' Association, dockets in the State Archives relating to the Minister of Fisheries, including ministerial dockets on the abalone industry for the period prior to 1970 and between 1973 and 1975, and parts of the abalone industry dockets for 1970 to 1972 and 1976 and 1977.
958 A number of diaries of the director defendants cannot be located, and there are a number of missing dockets and documents of the Crown Law Department relevant to issues in the proceedings. There has been difficulty in obtaining a number of medical reports, bank records and financial documents concerning Mr Edwards. A file of Genders Wilson & Partners can no longer be located, as is the case with files as to other solicitors who have represented Mr Edwards from time to time. The opinion of Neville Rochow dated September 1985 referred to by Mr Edwards during the course of his evidence is no longer extant, and neither is the opinion of Mr T. Gray QC (as he then was) which has been referred to in evidence and which undoubtedly was given at some stage in 1986.
959 I do not give details of all of the documents which were not able to be located after the institution of proceedings.
960 Mr Stevens gave evidence that Mr Roder, who was Minister of Fisheries and responsible for the administration of the Fisheries Act and Regulations at the critical time between 1979 and 1982, has dementia, and in Mr Stevens' view, is not fit to give a coherent account of himself in the witness box. I am satisfied that Mr Roder was justifiably not called because of his condition.
961 As for the director defendants who were called and the witnesses called by the defendants who were involved in dealings with Mr Edwards or in the abalone industry at the time during which he was fishing for abalone, their recollection was obviously impaired by the lapse of time. Several of the witnesses (including some of Mr Edwards' own witnesses) said expressly that they would have been able to recollect matters upon which they were being questioned in the witness box more clearly if it had not been for the long delay.
962 Even in the case of witnesses who did not give express evidence to that effect, I have no hesitation in inferring that where their recollections were obviously impaired, there would have been a better chance of them remembering important matters more clearly if the action had been instituted in a timely fashion.
963 In all the circumstances, the factors to which I have referred leave me in no doubt that the presentation of the defence has been seriously prejudiced by the lapse of time. The lapse of time encompasses not only the period between the relevant events occurring and the institution of the proceedings, but also the interval of time between the institution of the proceedings and the commencement of the trial.
964 I have already pointed out that responsibility for the inexcusable delay in getting on with the proceedings must be with Mr Edwards and his company rather than the defendants.
965 If, contrary to the views which I have expressed, a proper basis was made out in the evidence so as to enliven the discretion to extend the time for the institution of the proceedings under s 48, in all the circumstances, I would refuse the application.
966 The defendants advance a plea of "laches" against Mr Murphy's claim. They do so in the following terms (Defence, para 18(A)):
"This action is wholly unmaintainable (sic) owing to the laches, acquiescence and delay of the plaintiff in commencing the proceedings."
967 Some eight paragraphs of particulars are then set out detailing the alleged failure by Mr Murphy to complain to Mr Stevens as to Mr Stevens' conduct upon which Mr Murphy now bases his claim, and matters going to alleged prejudice of the defendants in pursuing their defence.
968 If laches is available as a defence, the Court is entitled to take into account both delay in commencing the proceedings and delay in prosecuting them.[81] However, the defendants have chosen only to rely upon delay in commencing the proceedings.
969 In any event, the problem for the defendants is that the availability of defence of laches in answer to a legal as opposed to an equitable claim is doubtful.
970 While admittedly obiter, the following assertion by Deane J in Orr v Ford[82] is apposite:
"The availability of a defence of laches and what will suffice to make it good depends upon the nature of the claim. Laches is an equitable defence and is not available in answer to a legal claim."
972 On the present state of authority I think it unwise for a judge at first instance to decide the point unless it is essential in order to dispose of an action.
973 In this case, as Mr Murphy's claim must be rejected on the merits, it is unnecessary for me further to consider the defence of laches.
974 The application of the legal principles as I have defined them to my conclusions as to relevant factual matters results in the following outcomes with respect to the various claims which are advanced by the plaintiffs:
975 The claims by Mr Edwards and Mr Murphy concerning the use of employee divers based upon alleged statements and directions of the director defendants or other officers within the Department of Fisheries, fail.
976 Any such statements or directions which were made or given, were not made or given in circumstances attracting a liability on the part of the defendants or any of them either for the tort of misfeasance in public office or in negligence.
977 The tort of misfeasance in public office is not made out, as I am satisfied that all of the director defendants acted bona fide. They held a genuine belief that upon a proper construction of the Act and Regulations, or having regard to policies lawfully laid down by the Government of the day, a licence to employ did not permit the employee to dive and take abalone.
978 In particular the plaintiffs have failed to prove a lack of an honest belief on the part of the director defendants that their statements and directions were lawful. There was no actual knowledge on the part of any of the director defendants of any lack of power to impose any limitation upon the use which might be made of the licence to employ, nor has a reckless indifference as to the availability of any such power been made out on the evidence.
979 Accordingly, the plaintiffs have failed to establish the element of bad faith which is essential to proof of the requisite state of mind.
980 Insofar as the plaintiffs advance their claim in the alternative on the basis of negligent mis-statements, the allegations in that respect are founded on an alleged failure on the part of the director defendants to exercise reasonable care in ascertaining the nature and extent of their powers. In such circumstances, it is doubtful that negligence will be established if the conduct in question does not amount to misfeasance in public office.
981 If I was to be wrong in that conclusion, it would become necessary to have regard to the question whether in all the circumstances the director defendants owed a duty of care to the plaintiffs. But no such duty of care can properly be found to exist if the relevant statutory provisions indicate an intention to exclude such a duty.
982 In my opinion, such an intention should be inferred upon a proper construction of the provisions of the Fisheries Acts which were in force throughout the period in question.
983 The Acts conferred responsibility for the control of commercial fishing operations upon the Fisheries Department and the director defendants. It was the responsibility of the Department and its officers to administer the various fisheries in accordance with their understanding of the Act and Regulations and any relevant policies generated by the Government of the day.
984 It was a natural consequence of the regulatory scheme imposed by the statutes that the Fisheries Department and officers of the Department, including the director defendants, would have regular contact with licensed fishermen. This involved, amongst other things, the need to answer any queries which might be made from time to time by fishermen as to what particular licences, permits or authorities permitted them to do with respect to their fishing operations.
985 In my opinion, it was not within the contemplation of the Fisheries Acts that the director defendants or any other officers of the Fisheries Department would be exposed to a liability in negligence if in their dealings with licensed fishermen they may not have accurately described the extent of the legal authority conferred by a particular licence, permit or authority, or if they made an innocent mistake as to the legal entitlement of licensed fishermen in some respect.
986 That is not to say that there may be cases where particular circumstances could arise where the Department or its officers might have been liable for inaccurate advice or unlawful directions. But there is no evidence in this case of any circumstance which could give rise to liability, such as evidence indicating any serious doubt as to the lawfulness of any conduct on the part of the Department or its officers, and the failure to take reasonable steps to clarify any such doubt.
987 I have found that there was never any challenge to the approach adopted by the Department and its officers, including the director defendants, to the attitude which they took over the rights attaching to the licence to employ. Indeed, there is much evidence to suggest that this aspect of the regime of control of the fishery manifested by the Department and its officers was accepted without question by the licensed fishermen, and indeed, with the concurrence of many or most of them.
988 To saddle the director defendants or the State of South Australia with liability in negligence in such circumstances would, to use the words of Brennan J in Northern Territory v Mengel give rise to:[85]
"..... a chilling effect on the performance of their functions by public officers."
989 Neither the director defendants nor the departmental officers dealing with the plaintiffs from time to time held themselves out as lawyers, and I am not satisfied that they ever purported to give legal advice. On the contrary, they simply administered the Acts and Regulations in accordance with their honest belief as to the legal effect of the Act and Regulations.
990 It would be neither feasible nor sensible to think that the law would require the director defendants or their officers, in their day to day contact with the plaintiffs and the other fishermen in the abalone industry, to respond to every query by every fishermen as to the extent of the authority conferred by particular licences, authorities or permits by suggesting that they should work it out for themselves or see a lawyer.
991 While I accept that the extent to which the immunity from suit for negligence which by inference arises on a proper construction of the statutes will have some limitations, and that it could not be construed as a blanket immunity applying to everything which the director defendants or the departmental officers might say or direct in the course of their administration of the Act, the circumstances of both cases now before me fall far short of transgressing the boundary between what might and might not be actionable, having regard to the statutory provisions.
992 Even if, contrary to those findings, there was a duty of care, it could only ever be a duty to exercise reasonable care. What is reasonable is to be assessed according to all of the circumstances, including the fact that the director defendants and the other departmental officers with whom the plaintiffs dealt were not lawyers and did not hold themselves out as lawyers. Abalone divers, either individually or through their association, did not hesitate to seek and obtain legal advice when it suited them to do so. They were far less "vulnerable" than the plaintiffs suggested.
993 The terms of the legislation, particularly bearing in mind Reg 7 of the 1971 Managed Fisheries Regulations were not so clear cut as to support the conclusion that the director defendants and their officers were negligent in failing to anticipate the decision of the Full Court given in 1996, in which it was held that employees might dive and take abalone.
994 In any event, if that had been realised earlier, other measures would have been introduced to peg the level of fishing effort at the same level, and the plaintiffs would not have been any better off.
B. THE CLAIMS CONCERNING THE DEFENDANTS' REPRESENTATIONS AS TO CORPORATE HOLDINGS, PARTNERSHIPS AND TRUSTS.
995 Any representations which might have been proved with respect to corporate holdings and partnerships were, as I have already indicated, true, having regard to the decision of the Full Court.
996 Insofar as the plaintiffs assert that the director defendants gave or made any representations proscribing the holding of licences, permits or authorities on trust for another, the factual basis for the allegations has not been made out on the evidence. This claim fails for that and the other reasons which I have set out in my consideration of this head of claim.
C. MR EDWARDS' CLAIM WITH RESPECT TO WESTERN AUSTRALIAN ABALONE
997 I have made factual findings which destroy the basis of this claim as advanced by Mr Edwards. It is unnecessary to repeat the specific conclusions which I have set out above.
D. MR EDWARDS' CLAIM RE HIS APPLICATION FOR A PRAWN AUTHORITY
998 I have already made factual findings which illustrate that there was no irregularity in the processing of Mr Edwards' application for a prawn authority. No basis for recovery under this head has been made out.
999 It will be seen from my factual findings with respect to this aspect of the matter that there was nothing said or done by the defendants which prevented Mr Edwards from fishing for tuna. The most likely explanation for his failure to do so was that he never had any serious intention of operating a tuna fishing business.
1000 Insofar as this claim is linked with the assertion that Mr Edwards was wrongfully required to surrender his South Australian A-Class licence in 1980, in the first place, it has not been established that the holding of a South Australian A-Class licence was a prerequisite for the obtaining of a Commonwealth tuna fishing licence.
1001 In the second place, I am of the view that any obligation to surrender the A-Class fishing licence on selling out of the abalone fishery only in the event that the incoming purchaser did not already hold an A-Class fishing licence, has not been shown to have been unlawful.
1002 This falls to be dismissed for the reasons already given.
1003 It will be seen from the above that none of the plaintiffs' claims have been made out on the merits.
1004 Strictly, an analysis of the merits was unnecessary in Mr Edwards' case, as he has not established an entitlement to an extension of time for the commencement of his proceedings, which are otherwise statute barred.
1005 But I took the view that it would be unfortunate after such a long trial if I did not deal with his claim on the merits.
1006 I have not troubled to assess damages, given my findings as to liability.
1007 Standing back from the case for one moment, in retrospect one could be pardoned for thinking that the plaintiffs were fortunate to have made such a handsome income from their abalone businesses, and that they received on leaving the industry fair market value, having regard to the not inconsiderable sale price which they obtained. That they did so was largely a result of the successful management by the director defendants of what by all accounts was a fragile natural resource which could easily have been lost.
1008 I think it unfortunate that the plaintiffs did not rest content with that, and instead saw fit to raise such misconceived claims, which were, as I ultimately conclude, largely baseless.
1009 The observations of the witness Professor Parzival Copes are apposite:
"The superior condition of South Australian fisheries - compared with those of many other jurisdictions - that I observed in the mid-1970s owes much to Olsen's foresight. I find it ironical that the plaintiffs in the case before us should be challenging the application of limited entry licensing and claiming loss of income in that connection. There can be no doubt that in the absence of limited entry at the time, the profitable rock lobster, abalone and prawn fisheries of the State would have been swamped by additional fishing units, causing catches and revenues per vessel to drop severely and destroying the profitability of these fisheries. The plaintiffs in fact have been fortunate to have had licensed access to a limited entry fishery, which has shielded them from exposure to the unfortunate conditions that have prevailed in the distressed open-access fisheries of many other jurisdictions."
1011 In the case of Mr Edwards, the dismissal is on the ground that his proceedings are statute barred. But in any event, they would be dismissed on the merits.
1012 The dismissal of Mr Murphy's action is on the merits, and the defence that his proceedings are statute barred is not made out.
1013 In the event of an appeal, I reserve the right to publish a separate engrossment of these reasons which includes references to transcript page numbers and exhibits.
1. Olsson, Perry and Duggan JJ, judgment No S5703 reported in (1996) 188 LSJS 153 and [1996] SASC 5703; (1996) 67 SASR 266.
3. See Perry J (unreported) judgment No S7009, 21 December 1998.
4. Ex tempore reason for ruling delivered Wednesday 16 June 1999.
5. See Doyle CJ, Mullighan and Wicks JJ, judgment No [1999] SASC 411.
6. See ruling 3 August 2000, judgment No [2000] SASC 263.
7. The precise locations are as follows. the Western Zone is comprised of all coastal waters west of the meridian of longitude 136º 30' east; the Central Zone all coastal waters between the meridian of longitude 136º 30' east and 139º east; the Southern Zone all coastal waters east of the meridian of longitude 139º east, together with the waters south of the parallel of latitude 37º south and east of the meridian of longitude 138º, excluding the waters of the Coorong and of the Murray River. [D5030]
8. Managed Fisheries Regulations 1971-1980, reg 35 as substituted by amending regulations gazetted on 28 August 1980.
9. See, for example, S.P. Hywood Pty Ltd v Standard Chartered Bank Ltd (unreported) Perry J, 21 December 1992, Supreme Court judgment No 53764.
10. The Act came into force on assent on 15 November 1917.
12. Fisheries (General) Regulations 1971, reg 6(1).
13. [1996] SASC 5703; (1996) 67 SASR 266 at 276.
14. The defence underwent a number of additions. I refer to the defence in the form in which it was filed on 23 June 1992.
22. Lander J, 23 December 1999, unreported judgment No [1999] SASC 510.
23. Submission by plaintiffs as to the actions and representations of Stevens in para 16A, 27 and 29 of the claim, page 45.
24. Reasons for Judgment, para 1321, page 211-212.
28. Judgment No [2000] SASC 263.
30. See Turner v Sterling [1726] EngR 585; (1671) 2 Vent. 25; (1672) 86 ER 287.
31. Tampion v Anderson [1973] VicRp 70; [1973] VR 715 at 720 cited in Northern Territory v Mengel (1995) 185 CLR 307 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ at 345.
34. R v Whitaker [1914] 3 KB 1283 per Lawrence J at 1296.
35. Northern Territory v Mengel per Brennan J, 185 CLR at 356.
36. See, for example, Ashby v White [1790] EngR 55; (1703) 2 Ld Raym 938; 3 Ld Raym 320; 92 ER 126; 710 cited by Brennan J in Northern Territory v Mengel, 185 CLR at 356.
37. See Three Rivers District Council and Ors v Governor and Company of the Bank of England [2000] UKHL 33; [2000] 2 WLR 1220 per Lord Steyn at 1231.
39. Northern Territory v Mengel per Brennan J 185 CLR at 359. See also per Mason CJ et al at 347.
42. Benning v Wong [1969] HCA 58; (1969) 122 CLR 249 at 256; Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 458, 484.
43. See Takaro Properties Ltd v Rowling [1986] NZCA 27; [1986] 1 NZLR 22 at 39.
44. [1956] 2 QB 288 at 313.
46. cf Takaro Properties Ltd v Rowling [1986] NZCA 27; [1986] 1 NZLR 22 esp at 68; but see Rowling v Takaro Properties Ltd [1987] UKPC 2; [1988] AC 473 at 511-512.
52. Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 469.
54. [1995] UKHL 9; [1995] 2 AC 633 at 738-9.
55. [1996] UKHL 15; [1996] AC 923 at 951.
57. [1991] USSC 49; 499 US 315 (1991).
58. [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 358-9 per Toohey J, 393-4 per Gummow J.
59. Citing Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 60 ALR 1; 157 CLR 424 at 469 per Mason J, 500 per Deane J; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 at 393-4; [1998] HCA 3; 151 ALR 147 per Gummow J; Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 at 593-6; 135 ALR 128 per Black CJ, Davies and Sackville JJ.
60. Todd, Liability in Tort of Public Bodies, in Mullany & Linden (eds), Torts Tomorrow - A Tribute to John Fleming (1998) 36 at 46-47.
61. Todd, Liability in Tort of Public Bodies, in Mullany & Linden (eds), Torts Tomorrow - A Tribute to John Fleming (1998) 36 at 47.
62. See, for example, The Council of the Shire of Sutherland v Heyman and Anor [1985] HCA 41; (1985) 157 CLR 424 and San Sebastian Pty Ltd v The Minister [1986] HCA 68; 162 CLR 340.
64. Unreported, Full Court, 6 July 2000, judgment No [2000] SASC 223 at para 84.
65. Hill v Van Erp (1996-1997) 188 CLR 159; Perre v Apand [1999] HCA 36; (1999) 198 CLR 180; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330.
66. See Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 344 per Brennan CJ 385-8 per Gummow J, 408-12 per Kirby J; Stovin v Wise [1996] UKHL 15; [1996] AC 923 at 953-5 per Lord Hoffmann (Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreeing); Capital & Counties Plc v Hampshire County Council (1997) EWCA Civ 3091; [1997] QB 1004 at 1026-8 per Stuart-Smith LJ delivering the judgment of the court.
67. See Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 at 551; [1994] HCA 13; 120 ALR 42 per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ; Hill v Van Erp (1997) 142 ALR 687, 188 CLR 159 at 186 per Dawson J (Toohey J agreeing), 216 per McHugh ; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 372-3 per McHugh J, 421 per Kirby J, Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at 194 per Gleeson CJ, 202 per Gaudron J, 236 per McHugh J, 259-260 per Gummow J, 289 per Kirby J and 327-328 per Callinan J.
68. See, for example, Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 362 per Toohey J, 372 per McHugh , 389 per Gummow J, 420-1 per Kirby J; Perre v Apand Pty Ltd (1999) [1999] HCA 36; (1999) 198 CLR 180 at 194-195 per Gleeson CJ, 202 per Gaudron J, 236 per McHugh J, 259 per Gummow J, 288-289 per Kirby J, 298-299 per Hayne J and 327-328 per Callinan J. See also Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 307 per Kirby P; Stovin v Wise [1996] UKHL 15; [1996] AC 923 at 939-40 per Lord Nicholls of Birkenhead; Brown v Heathcote County Council [1986] 1 NZLR 76 at 82.
69. State Rail Authority of NSW v Earthline Constructions Pty Ltd (In Liquidation) and Ors (1999) 160 ALR 585, para 88, page 617.
70. 67 SASR 288-289.
73. [1987] HCA 57; (1987) 163 CLR 628 per Wilson, Deane, Dawson, Toohey and Gaudron JJ at 636. See also Wright v Donatelli [1995] SASC 5291; (1995) 65 SASR 307 per Lander J at 320:
"The plaintiff is under no obligation to establish that the material fact caused or even contributed to the decision to bring proceedings."
76. Napolitano v Coyle (1977) 15 SASR 559 at 570.
77. See, for example, Edmunds and Ors v Pickering and Ors (supra) per Lander J at para 1206 "opinions do not qualify as material facts".
78. 19 SASR 195 (Walters J) and (1979) 20 SASR 524 (Full Court).
81. Lamshed v Lamshed [1963] HCA 60; (1963) 109 CLR 440. ? applied by Lander J in Edmund v Pickering para [1458]
82. [1989] HCA 4; (1988-1989) 167 CLR 316 at 340.
84. [1977] 1 WLR 970 per Goff LJ at 979.
Olsson, Perry and Duggan JJ, judgment No S5703 reported in (1996) 188 LSJS 153 and [1996] SASC 5703; (1996) 67 SASR 266.
[3] See Perry J (unreported) judgment No S7009, 21 December 1998.
[4] Ex tempore reason for ruling delivered Wednesday 16 June 1999.
[5] See Doyle CJ, Mullighan and Wicks JJ, judgment No [1999] SASC 411.
[6] See ruling 3 August 2000, judgment No [2000] SASC 263.
[7] The precise locations are as follows. the Western Zone is comprised of all coastal waters west of the meridian of longitude 136º 30 east; the Central Zone all coastal waters between the meridian of longitude 136º 30 east and 139º east; the Southern Zone all coastal waters east of the meridian of longitude 139º east, together with the waters south of the parallel of latitude 37º south and east of the meridian of longitude 138º, excluding the waters of the Coorong and of the Murray River. [D5030]
[8] Managed Fisheries Regulations 1971-1980, reg 35 as substituted by amending regulations gazetted on 28 August 1980.
[9] See, for example, S.P. Hywood Pty Ltd v Standard Chartered Bank Ltd (unreported) Perry J, 21 December 1992, Supreme Court judgment No 53764.
[10] The Act came into force on assent on 15 November 1917.
[11] See Gazette 26 June 1980, page 1718.
[12] Fisheries (General) Regulations 1971, reg 6(1).
[13] [1996] SASC 5703; (1996) 67 SASR 266 at 276.
[14] The defence underwent a number of additions. I refer to the defence in the form in which it was filed on 23 June 1992.
[22] Lander J, 23 December 1999, unreported judgment No [1999] SASC 510.
[23] Submission by plaintiffs as to the actions and representations of Stevens in para 16A, 27 and 29 of the claim, page 45.
[24] Reasons for Judgment, para 1321, page 211-212.
[28] Judgment No [2000] SASC 263.
[30] See Turner v Sterling [1726] EngR 585; (1671) 2 Vent. 25; (1672) 86 ER 287.
[31] Tampion v Anderson [1973] VicRp 70; [1973] VR 715 at 720 cited in Northern Territory v Mengel (1995) 185 CLR 307 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ at 345.
[34] R v Whitaker [1914] 3 KB 1283 per Lawrence J at 1296.
[35] Northern Territory v Mengel per Brennan J, 185 CLR at 356.
[36] See, for example, Ashby v White [1790] EngR 55; (1703) 2 Ld Raym 938; 3 Ld Raym 320; 92 ER 126; 710 cited by Brennan J in Northern Territory v Mengel, 185 CLR at 356.
[37] See Three Rivers District Council and Ors v Governor and Company of the Bank of England [2000] UKHL 33; [2000] 2 WLR 1220 per Lord Steyn at 1231.
[39] Northern Territory v Mengel per Brennan J 185 CLR at 359. See also per Mason CJ et al at 347.
[42] Benning v Wong [1969] HCA 58; (1969) 122 CLR 249 at 256; Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 458, 484.
[43] See Takaro Properties Ltd v Rowling [1986] NZCA 27; [1986] 1 NZLR 22 at 39.
[44] [1956] 2 QB 288 at 313.
[46] cf Takaro Properties Ltd v Rowling [1986] NZCA 27; [1986] 1 NZLR 22 esp at 68; but see Rowling v Takaro Properties Ltd [1987] UKPC 2; [1988] AC 473 at 511-512.
[52] Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 469.
[54] [1995] UKHL 9; [1995] 2 AC 633 at 738-9.
[55] [1996] UKHL 15; [1996] AC 923 at 951.
[57] [1991] USSC 49; 499 US 315 (1991).
[58] [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 358-9 per Toohey J, 393-4 per Gummow J.
[59] Citing Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 60 ALR 1; 157 CLR 424 at 469 per Mason J, 500 per Deane J; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 at 393-4; [1998] HCA 3; 151 ALR 147 per Gummow J; Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 at 593-6; 135 ALR 128 per Black CJ, Davies and Sackville JJ.
[60] Todd, Liability in Tort of Public Bodies, in Mullany & Linden (eds), Torts Tomorrow - A Tribute to John Fleming (1998) 36 at 46-47.
[61] Todd, Liability in Tort of Public Bodies, in Mullany & Linden (eds), Torts Tomorrow - A Tribute to John Fleming (1998) 36 at 47.
[62] See, for example, The Council of the Shire of Sutherland v Heyman and Anor [1985] HCA 41; (1985) 157 CLR 424 and San Sebastian Pty Ltd v The Minister [1986] HCA 68; 162 CLR 340.
[64] Unreported, Full Court, 6 July 2000, judgment No [2000] SASC 223 at para 84.
[65] Hill v Van Erp (1996-1997) 188 CLR 159; Perre v Apand [1999] HCA 36; (1999) 198 CLR 180; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330.
[66] See Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 344 per Brennan CJ 385-8 per Gummow J, 408-12 per Kirby J; Stovin v Wise [1996] UKHL 15; [1996] AC 923 at 953-5 per Lord Hoffmann (Lord Goff of Chieveley and Lord Jauncey of Tullichettle agreeing); Capital & Counties Plc v Hampshire County Council (1997) EWCA Civ 3091; [1997] QB 1004 at 1026-8 per Stuart-Smith LJ delivering the judgment of the court.
[67] See Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 at 551; [1994] HCA 13; 120 ALR 42 per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ; Hill v Van Erp (1997) 142 ALR 687, 188 CLR 159 at 186 per Dawson J (Toohey J agreeing), 216 per McHugh ; Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 372-3 per McHugh J, 421 per Kirby J, Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at 194 per Gleeson CJ, 202 per Gaudron J, 236 per McHugh J, 259-260 per Gummow J, 289 per Kirby J and 327-328 per Callinan J.
[68] See, for example, Pyrenees Shire Council v Day [1998] HCA 3; (1998) 151 ALR 147; 192 CLR 330 at 362 per Toohey J, 372 per McHugh , 389 per Gummow J, 420-1 per Kirby J; Perre v Apand Pty Ltd (1999) [1999] HCA 36; (1999) 198 CLR 180 at 194-195 per Gleeson CJ, 202 per Gaudron J, 236 per McHugh J, 259 per Gummow J, 288-289 per Kirby J, 298-299 per Hayne J and 327-328 per Callinan J. See also Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 307 per Kirby P; Stovin v Wise [1996] UKHL 15; [1996] AC 923 at 939-40 per Lord Nicholls of Birkenhead; Brown v Heathcote County Council [1986] 1 NZLR 76 at 82.
[69] State Rail Authority of NSW v Earthline Constructions Pty Ltd (In Liquidation) and Ors (1999) 160 ALR 585, para 88, page 617.
[73] [1987] HCA 57; (1987) 163 CLR 628 per Wilson, Deane, Dawson, Toohey and Gaudron JJ at 636. See also Wright v Donatelli [1995] SASC 5291; (1995) 65 SASR 307 per Lander J at 320:
"The plaintiff is under no obligation to establish that the material fact caused or even contributed to the decision to bring proceedings."
[76] Napolitano v Coyle (1977) 15 SASR 559 at 570.
[77] See, for example, Edmunds and Ors v Pickering and Ors (supra) per Lander J at para 1206 "opinions do not qualify as material facts".
[78] 19 SASR 195 (Walters J) and (1979) 20 SASR 524 (Full Court).
[80] See Hawkins v Clayton (1988) 164 CLR 539.
[81] Lamshed v Lamshed [1963] HCA 60; (1963) 109 CLR 440. ? applied by Lander J in Edmund v Pickering para [1458]
[82] [1989] HCA 4; (1988-1989) 167 CLR 316 at 340.
[84] [1977] 1 WLR 970 per Goff LJ at 979.
(1996) 67 SASR 266
(1995) 185 CLR 307
(1969) 122 CLR 249
(1985) 157 CLR 424
(1999) 167 ALR 1
(1998) 192 CLR 330
(1996) 63 FCR 567
(1999) 164 ALR 606
(1997) 142 ALR 687
(1994) 179 CLR 520
(1988) 12 NSWLR 293
(1999) 160 ALR 585
(1987) 163 CLR 628
(1995) 65 SASR 307
(1977) 15 SASR 559
(1988) 164 CLR 539
(1963) 109 CLR 440
(1987) 45 SASR 27
(1990) 64 ALJR 234
(1998) 151 ALR 147
(1985) 60 ALR 1
(1999) 198 CLR 180
(1965) 113 CLR 177
(1977) 139 CLR 54
(1979) 20 SASR 524