Huon Aquaculture Group Limited v Secretary, Department of Primary Industries, Parks, Water and Environment

Solicitor for the First and Second Respondents: Solicitor-General Of Tasmania

Counsel for the Third Respondent: Mr A Pound

Solicitor for the Third Respondent: Clayton Utz

Counsel for the Fourth Respondent: Mr S Schrapel

Solicitor for the Fourth Respondent: Corrs Chambers Westgarth

Counsel for the Fifth Respondent: Ms K Cuthbertson

Solicitor for the Fifth Respondent: Shaun McElwaine & Associates

21 February 2018 In paragraph 74, the words "The First and Second Respondents are entitled to the costs of this application" have been deleted.

BETWEEN: HUON AQUACULTURE GROUP LIMITED First Applicant

HUON AQUACULTURE COMPANY PTY LTD Second Applicant

SOUTHERN OCEAN TROUT PTY LTD Third Applicant

AND: SECRETARY, DEPARTMENT OF PRIMARY INDUSTRIES, PARKS, WATER AND ENVIRONMENT First Respondent

DIRECTOR OF ENVIRONMENT PROTECTION AUTHORITY Second Respondent

MINISTER FOR THE ENVIRONMENT (COMMONWEALTH) (and others named in the Schedule) Third Respondent

JUDGE: KERR J DATE OF ORDER: 9 FEBRUARY 2018

1. Subject to any party filing an interlocutory application for an alternative order by 4.00 pm Wednesday 21 February 2018, the First and Second Respondent each cease to be a party to these proceedings without further order of the Court.
2. Upon either or both of the First and Second Respondents ceasing to be a party to these proceedings in consequence of the operation of order 1, the Applicants pay the First and Second Respondents' costs in these proceedings from their commencement up to and including the costs of their interlocutory application heard on 9 February 2018 on a party/party basis, to be taxed if not agreed. THE COURT NOTES THAT:
3. The Applicants and the Third Respondent will confer with the other parties with a view to settling orders for the future management of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

KERR J: 1 This is an interlocutory application on behalf of the First and Second Respondents in these proceedings that they cease to be parties and that the Applicants pay their costs of the originating application. 2 These proceedings were originally commenced by the Applicants (Huon Agriculture Group Limited, Huon Aquaculture Company Pty Ltd and Southern Ocean Trout Pty Ltd) (Huon) seeking declarations, inter alia, that the First and/or Second Respondent are the person or persons taking the action for the purposes of a decision of the Commonwealth Minister to permit expanded fish farming in Macquarie Harbour dated 3 October 2012, and that the expansion of the marine farming operations in Macquarie Harbour, pursuant to the Macquarie Harbour Marine Farming Development Plan October 2015, is not a controlled action for the purpose of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the Act). 3 Various orders were sought, including a prohibitory injunction "restraining the First Respondent and/or Second Respondent by itself, its servants, agents or otherwise howsoever from engaging in conduct in contravention of the Act". It is uncontentious that the First and Second Respondents were both necessary and proper parties to this proceeding as it was then pleaded. However, the pleadings and the orders sought have since undergone significant amendment.

the first and second respondents' submissions 4 For the First and Second Respondents, Mr Turner relied on his written submissions filed on 6 February 2018, and supplemented those submissions in oral argument. 5 At [12] of his written submissions, Mr Turner referred the Court to r 9.08 of the Federal Court Rules 2011 (Cth) (the Rules): Removal of parties by Court order A party may apply to the Court for an order that a party that has been improperly or unnecessarily joined as a party, or has ceased to be a proper or necessary party, cease to be a party. Note The Court may make an order for the future conduct of the proceeding. 6 He submitted that: 13. In Prentice v Cummins Sackville J had occasion to consider the scope of Order 6 Rule 9 of the previous Federal Court Rules. That rule was the predecessor to Rule 9.08. … 15. His Honour referred to News Limited and Ors v Australian Rugby Football League Limited and Ors. At [12] he quoted the relevant part of the reasons for judgment in that case. 16. At [13] his Honour said: "The reasoning of the Full Court in News Limited v ARL makes it clear that the test of whether a person ought to be joined in proceedings is whether the orders sought would directly affect that person's rights or liabilities. The fact that the pleadings make allegations about the conduct of a person does not, of itself, establish that the person ought to be joined. Similarly, a person already joined as a party to proceedings, may be "unnecessarily joined" for the purposes of O.6 r.9 notwithstanding that the pleadings alleged that he or she has acted in what loosely might be described as an improper manner". [Footnotes omitted] 7 Mr Turner's written submissions concluded that: 19. Whilst it might be said that until the abandonment of "two sets of challenges", formalised by the first iteration of the Third Further Amended Statement of Claim the First and Second Respondents were relevantly liable (in the sense of there having been contended a breach by them of s.77A(2) of the EPBC Act, and a declaration sought to that effect and an injunction restraining action in contended breach of that section), such liability is no longer maintained. In the words of Perram J in BJ McAdam Pty Ltd v Jax Tyres (No. 4) the "forensic adventure has ended in failure". In consequence, the First and [Second] Respondents should have their costs of the proceeding. 20. The First and Second Respondents remain entangled in a litigation net cast by the Applicants. They respectfully invite the Court to let them swim free. [Footnotes omitted] 8 In oral submissions Mr Turner referred the Court to the history of the pleadings in these proceedings and, most pertinently, to the terms in which this matter remains before the Court. 9 Mr Turner referred the Court to the Applicants' Third Further Amended Originating Application, as filed on 1 December 2017. It demonstrated, he submitted, that the Applicants had abandoned all of the claims that they had earlier pressed as alternatives to the declaration they still sought "that the decision of the Third Respondent [the Commonwealth Minister] made on 3 October 2012, that the action referred to the Third Respondent was not a controlled action for the purpose of the Act, provided it is undertaken in the manner set out in the decision, is invalid." 10 The alternative orders that had been sought by the Applicants immediately prior to their having filed their Third Further Amended Originating Application had included: 2. … (a) that the First Respondent and/or Second Respondent contravened s 77A(2) of the Act by taking action that was inconsistent with the particular manner specified in the notice of the decision; (b) alternatively, that the First Respondent and/or Second Respondent has engaged, alternatively engages and proposes to engage, in conduct contravening s 77A(2) of the Act by taking action that is inconsistent with the particular manner specified in the notice of the Decision. 3. In the further alternative … an injunction restraining the First Respondent and/or Second Respondent by itself, its servants, agents or otherwise howsoever, from taking action that is inconsistent with the particular manner specified in the notice of the Decision. Those claims having been abandoned, Mr Turner submitted the First and Second Respondents had no further interest in the proceedings. 11 Mr Turner referred the Court to the terms of the Applicants' Third Further Amended Statement of Claim. He submitted that none of the facts pleaded could give rise to a possibility of any order being made by the Court having a direct impact on any right or liability of the First or Second Respondent. 12 Mr Turner pointed to the Applicants having accepted, in their written submissions, that the only substantive relief they now sought against the First and Second Respondents in these proceedings was a declaratory order that the decision of the Commonwealth Minister in question was invalid. On that premise, Mr Turner submitted that the First and Second Respondents no longer were necessary or proper parties to these proceedings, and as such were entitled to cease to be parties. 13 Mr Turner submitted that the position of the State with respect to its regulatory responsibilities was entirely distinct from that of the Commonwealth. He drew the Court's attention to the fact that the State's regulatory regime had changed in recent times and, in particular, to the enactment of the Finfish Farming Environment Regulation Act 2017 (Tas). Mr Turner submitted that the regulatory responsibilities of the State had nothing to do with the Commonwealth per se, and could not be relevantly affected by a decision of the Third Respondent: …[W]hat the State does pursuant to the duties, powers and functions under those statutes is not relevantly affected by the decision that was made by the third respondent. The regime exists and will continue to exist regardless of the outcome of this proceeding. (transcript p 6 lines 25-28) 14 Mr Turner acknowledged that the First and Second Respondents in their defences had each denied the matters pleaded at [38] of the Third Further Amended Statement of Claim. However, Mr Turner submitted that nothing pleaded in that paragraph, even were its premises to be established in these proceedings, could directly affect any right or liability of either of the First or Second Respondents. The pleading was directed exclusively to the validity of a decision of the Third Respondent (Commonwealth Minister) made in October 2012. 15 In support of his submission, Mr Turner cited Prentice v Cummins [2002] FCA 1140; (2002) 194 ALR 94 (Prentice), per Sackville J at [12]: 12. In News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410, the Full Court cited with approval (at 524) observations by Lord Diplock, in delivering the opinion of the Privy Council in Pegang Mining Co Ltd v Choon Sam [1969] 2 MLJ 52, in relation to a precursor to O 6 r 8. Lord Diplock said this (at 55-56): "The cases illustrate the great variety of circumstances in which it may be sought to join an additional party to an existing action. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases … … A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?" The Full Court made these comments (at 525) about the test formulated by Lord Diplock: "The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent … The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential." 16 Mr Turner submitted that the possibility that findings might be made by the Court adversely affecting the reputation of one or both of the First and Second Respondents, as he accepted hypothetically might be made in these proceedings, did not constitute a proper basis for their joinder. 17 With respect to the decision of the Third Respondent, the validity of which remains the subject of these proceedings, Mr Turner submitted that it was "permissive" in nature. 18 When the Commonwealth Minister makes a determination that certain proposed conduct of a third party will not constitute a controlled action if it is undertaken in a particular manner, the effect of that decision is that that third person, when undertaking that action, is immunised from the consequences that might otherwise arise under the Act provided they comply with the manner requirements set by the Commonwealth Minister. Whether valid or otherwise, such a decision imposed no obligations on the First or Second Respondent, nor did it confer on either of them any rights. The Commonwealth Minister's decision had no direct impact on any State regulatory body. No right or liability of either the First or Second Respondent was thereby directly affected. 19 Mr Turner drew the Court's attention to the reasoning of the High Court in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1, particularly the comments at [131] and [133] of the joint judgment of French CJ, Gummow, Hayne, Heydon and Kiefel JJ as an indication of the circumstances in which, should a matter involve proprietary rights which went beyond affecting any indirect interests of a person in the proceedings, they must be joined as a proper and necessary party to the proceedings. Mr Turner submitted that no such circumstance applied in the present matter. 20 Finally Mr Turner drew the Court's attention to the decision of Perram J in BJ McAdam Pty Ltd v Jax Tyres Pty Ltd (No 4) [2013] FCA 643 (BJ McAdam). In that matter his Honour had observed (at [10]) that whatever might originally have been pleaded, that case had since been abandoned: In those circumstances, whatever it is that the plaintiffs actually originally sued Colnagow for, that forensic adventure has ended in failure. Mr Turner submitted that the reasoning of Perram J should be followed. The First and Second Respondents had initially been necessary and proper parties to the proceedings, but whatever might originally have been pleaded, that case having been abandoned, they were entitled to cease to be so.

The applicants' submissions 21 On behalf of the Applicants, Ms Scott submitted that the Court should not grant the application sought by the First and Second Respondents. She relied on her written submissions filed on 8 February 2018 opposing the First and Second Respondents' interlocutory application, and supplemented those submissions with oral argument. Ms Scott submitted: 6. The Applicants accept the State's submission that the proper test to be applied in determining whether a party is a proper or necessary party to a proceeding, for the purposes of r 9.08 of the Rules, is that set out in the decision of the Full Court of the Federal Court in News Limited and Ors v Australian Rugby Football League Limited and Ors [(1996) 64 FCR 410 at [13]]. 7. The test to be applied is: "…whether the orders sought would directly affect that person's rights or liabilities…" 8. The test is not whether substantive relief is sought against the party seeking to withdraw or whether the pleadings disclose a cause of action directly as against the party seeking to withdraw. 9. In the decision of Victoria v Sutton [(1998) 195 CLR 291], which was also cited by the State in its outline of submissions, His Honour Justice McHugh held [at 316] that: "…it is the invariable practice of the courts to require such a person [whose rights or interests may be affected by an order of the court] to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order." [Emphasis in submissions] 22 Ms Scott submitted that the First and Second Respondents remained proper and/or necessary parties to these proceedings, notwithstanding that the Applicants no longer pursued their former claim that either or both had been the party taking the action (fish farming in Macquarie Harbour). She submitted that: 11. …the Court will still need to determine the extent of the State's role in the particular manner as set out in the decision of the Third Respondent, which is the subject of the proceeding. The determination of the State's role is still fundamental to the issues as canvassed on the current pleadings. 12. The Applicants are no longer pursuing the claim that the State is the party taking the action because, pursuant to s. 77 of the Environment Protection and Biodiversity Conservation Act 1999, the relevant factor is the Commonwealth Minister's belief. Following receipt of the briefing paper to the Commonwealth Minister (which was adopted as the reasons for decision), on 29 September 2017, the Applicants formed the view that the Commonwealth Minister had adopted a positive belief, as stated in the briefing paper, that the action would only be undertaken by the marine farmers. 13. It is submitted however that the Court will still be required to determine what the State's role is in the particular manner set out in the Decision. It is submitted that no argument can be made against the fact that both the referral document and the Decision envisage the State making decision, issuing directions and reviewing matters as part of the manner set out in those documents. 14. The Applicants' submission is that the role required to be taken by the State in the particular manner is the key defect in the Decision because the role of the State is central to the particular manner set out, and yet the State is not the person taking the action. The Court will, in order to determine the claims made by the Applicants at paragraphs 38(b)(iii) and 38(d)(i)-(iii) of the TFASOC, need to make findings as to whether the Decision requires that the State do certain things and/or whether certain things done by the State are incorporated into the Decision. It is submitted that the Court will need to make findings as to the extent of the State's role under the Decision and whether this means that the Decision is invalid. 15. If the State is not a party to these proceedings, the Court will not have the benefit of the State's submissions. Further, if the State is not a party to these proceedings the State will not be bound by any findings made by the Court as to its responsibilities and role pursuant to the Decision; only the remaining parties would be bound. 16. An example of the difficulty that the State's withdrawal would create, is if the Court determined that any biomass decision made by the State pursuant to the State statutory framework, was a biomass determination for the purposes of 2(f) of the Decision, or that any amendment to water quality limit levels in the marine farming licences was incorporated into the Decision. If, despite making these findings, the Court determined that the Decision was not invalid, or the Court declined to exercise its discretion, the State would not be required to consider the objectives contained in the EPBC Act, in making a decision on either of these matters. [Footnotes omitted] 23 Ms Scott submitted at [19] that the First and Second Respondents continued to have an interest as the regulatory body responsible for administering the action, and at [20] submitted that the First and Second Respondents' administrative responsibilities in that regard were clearly established. She referred to several documents, the existence of which were not in dispute. 24 Ms Scott then submitted: 21. The referral of the action by the State to the Third Respondent was treated by the Third Respondent as made pursuant to s 69 of the EPBC Act. 22. Section 69(1) of the EPBC Act provides: "A State, self-governing Territory or agency of a State or self-governing Territory that is aware of a proposal by a person to take an action may refer the proposal to the Minister for a decision whether or not the action is a controlled action, if the State, Territory or agency has administrative responsibilities relating to the action." 23. By reason of the State's administrative responsibilities relating to the taking of the action, it is a necessary and/or proper party to the proceeding, whose interests (being, the administrative responsibilities) will be directly impacted by the outcome of the proceeding. 24. Additionally, if the Applicants are successful in obtaining a declaration that the Decision is invalid, the referral of the action will revert to the status of being an undetermined referral made by the State, which identifies the State as the proponent. 25. The Applicants submit that this is not a case where there is merely an "arguable possibility" that a party "may" be affected by an order of the court; the Applicants submit that the State will be directly affected by the outcome of the proceeding, on the basis that the outcome of the proceeding will establish the parameters of their ongoing responsibilities relating to marine farming in Macquarie Harbour. [Emphasis in submissions] 25 Ms Scott summarised the Applicants' written submissions as follows: 29. The State is impacted by the Court's decision in all or any of the following capacities: (a) as a proponent (subject to the Third Respondent's decision being determined to be invalid); (b) as a delegated decision maker; (c) as a party bound to take action or make decisions; and (d) as a regulatory authority for the action. 26 Against the contingency that the Court might take a view other than that which the Applicants' submissions had advanced, Ms Scott submitted at [30] that even if the First and Second Respondents were correct that no orders might be made against them, relief to permit them to cease as parties is discretionary. As authority for that proposition, she cited Wily (as Trustee of the Bankrupt Estate of Fuller) v Fuller [2000] FCA 1512 (Wily) per Hill J at [54]. Accordingly, she submitted: 31. The Applicants submit that, even if the Court finds against the Applicants' submission and finds that it is not strictly necessary (as a matter of law) that the State remains a party to the proceeding, it is appropriate as a matter of discretion for the Court to require that the State remains a party to the proceeding. 32. The Applicants submit that, were the State removed as a party to the proceeding, the State would cease to be bound by the outcome of the proceedings. This would be at odds with the State's administrative responsibilities regarding the taking of the action (both in the context of the Decision, which is the subject of the proceeding, and the Tasmanian legislative framework) and would be an undesirable outcome. 27 Ms Scott acknowledged that the Court could not require the First and Second Respondents to participate actively in the hearing against their will, but submitted that, should they not wish to do so, the appropriate course would be for them to file submitting notices and, if they chose, to seek to be heard on the issue of costs. 28 As to the matter of costs, Ms Scott submitted: 35. …if the Court is inclined to grant the orders to allow the State to cease being a party to the proceeding, then any order as to costs should be reserved until the conclusion of the proceeding. 36. It is submitted that the Court's findings [in] the proceeding[s] are likely to be relevant to the costs order. It is further submitted that a part costs order is best avoided, and it is noted that at least part of the State's costs will be associated with matters relevant to issues that are yet to be determined. 37. Further, the Applicants may, subject to the Court's determination on the substantive issues, seek to raise issues of the conduct of the parties relevant to the issue of costs and these matters are best left to the conclusion of the proceedings. 29 In oral submissions, Ms Scott rejected Mr Turner's analogy that the First and Second Respondents had been caught in the net of these proceedings; rather, she submitted, the net they were caught in arose out of the decision that was the subject of the proceedings. As a consequence of that decision, the State had acquired rights and liabilities that would be affected by the outcome of these proceedings. 30 As to what those rights and liabilities were, Ms Scott referred to the s 77 notice at page 541 of the Application Book (the referral decision). In particular, she referred to clause 2(f) of that decision: 2. To ensure there are no significant impacts on the Tasmanian Wilderness World Heritage Area and the Maugean Skate as a result of water quality changes, the person taking the action must: … f. The total biomass held across all lease areas must not exceed 52.5 percent of the modelled maximum sustainable biomass until limit levels are reviewed in mid 2013, and must not exceed any such altered levels as may be identified thereafter by the Tasmanian Government. (Emphasis in original as defined terms) 31 The reference to the Tasmanian Government was a reference to the Tasmanian agency responsible for administering and regulating the Macquarie Harbour Marine Farming Development Plan October 2005. Read as defined, the referral decision anticipated the necessity for a role for the First and Second Respondents. That extended to their capacity to "otherwise prescribe" the compliance limits for "substantial benthic visual impact at a compliance site", "substantial benthic visual impact within a lease area", "substantial benthic physio-chemical impact at a compliance site" and "substantial benthic biological impact at a compliance site". 32 Ms Scott submitted that, under the referral decision, the First and Second Respondents had been conferred with a permission, obligation or responsibility to prescribe those conditions. She submitted that "any determinations made by the state marine farming licences are incorporated into the substance of the particular manner [requirements] that [are] set out in this decision" (transcript p 22 lines 28-30). 33 Ms Scott submitted that what the Applicants had pleaded in [38] of the Third Further Amended Statement of Claim referred to those rights, liabilities and responsibilities of the First and Second Respondents. For example, Ms Scott drew the Court's attention to paragraph 38(d)(iii) which pleads that: Conditions 2(b), 2(c) and 2(f) require, in accordance with the Definitions, the following matters be reviewed and re-determined by the First and/or Second Respondent: (a) Limit levels (b) Total biomass 34 Ms Scott submitted that the impact of a decision by the Court, whether it be that the Minister's decision be valid or otherwise, would directly affect the rights and liabilities of the First and Second Respondents as referred to in News Limited & Ors v Australian Rugby Football League Limited & Ors [1996] FCA 870; (1996) 64 FCR 410 (News Limited). She submitted that the Applicants had not resiled from their claim that the State parties had a role or responsibility in the application of the particular manner determination. The way in which the Commonwealth Minister had made his decision, properly understood, involved a conferral of responsibility and power on the State. 35 In relation to the matter of costs, if the Court were to hold to the contrary, Ms Scott submitted that the Applicants had only recently become aware of the basis upon which the Minister had made his decision, following their having been provided with a previously undiscovered briefing paper somewhat recently.

the third respondent's submissions 36 Mr Pound appeared for the Commonwealth Minister. He advised that the Minister neither supported nor opposed the First and Second Respondents' interlocutory application, but wished to be heard as to the proper characterisation of the Commonwealth Minister's decision. 37 Mr Pound submitted that the Applicants' characterisation of the referral decision should not be accepted. He took issue with [13] to [19] of the Applicants' written submissions, in which the Applicants asserted that the State had a role under the decision, and/or had been conferred certain responsibilities or powers by way of that decision. 38 Mr Pound submitted that the Minister's decision had not required the State to do anything. The decision had been made based on the Minister's understanding and belief as to how the decision would be carried out. The Commonwealth did not dispute that as an aspect of forming that belief, the Minister had taken into account the State regulatory system and how it would operate. However, Mr Pound distinguished that from any circumstance whereby the Minister's decision in relation to the manner and form by which the action could be undertaken might be said to confer a responsibility, a duty, a power or a liability. He said the correct lens through which the referral decision should be viewed was that the Minister had proceeded simply on an understanding that the State's powers were part of the bedrock of circumstances relevant to the belief the Minister had formed that the action proposed to be undertaken was not a controlled action provided it was taken in a particular manner, but no more. 39 Mr Pound submitted that the Applicants' submissions amounted to them seeking to turn their allegation that there could not be compliance with the manner and form conditions in the referral decision such that it was uncertain and invalid into a circumstance in which, through the back door, the Applicants could litigate a case they had expressly abandoned. The Court should not accept that the Commonwealth Minister's determination had conferred powers or responsibilities on the State, and should reject the proposition that it required the First or Second Respondents to do anything.

the first and second respondents' reply 40 In reply, Mr Turner took issue with the Applicants' submission that the State had been or might revert to the status of the proponent of any of the actions which were the subject of the manner determination made by the Minister. He submitted that s 69 of the Act "clearly contemplates that referral may be made by an administrative entity such as the State, as occurred in this instance" (transcript p 35 lines 35-37). Mr Turner submitted that although the referral decision "contemplates certain things being done by the State", that, as Mr Pound had submitted for the Commonwealth, it would mischaracterise that decision to conceive of it imposing any duties or liabilities on the State, to have conferred any rights on the State or to have required the State to act in a particular way.

fourth and fifth respondents 41 Mr Schrapel for the Fourth Respondent indicated that the Fourth Respondent did not take a position on the application. Ms Cuthbertson for the Fifth Respondent adopted the submissions of the First and Second Respondents.

consideration 42 The Court is grateful for the careful submissions that Mr Turner, Ms Scott and Mr Pound made. The parties are in substantial agreement as to the principles that should apply. It is the application of those principles that divides them. Having regard to those submissions, I am satisfied that the principles I am bound to apply to determine whether or not the First and Second Respondents remain proper and necessary parties to these proceedings are as set out in the decision of the Full Court in News Limited per Lockhart, von Doussa and Sackville JJ at pages 523 to 525. In that case, the Full Court held that the question is to be decided according to the test proposed by Lord Diplock delivering the opinion of the Judicial Committee of the Privy Council in Pegang Mining Company Ltd v Choong Sam [1969] 2 MLJ 52 at pages 55 to 56: The cases illustrate the great variety of circumstances in which it may be sought to join an additional party to an existing action. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases. It has been sometimes said … that a party may be added if his legal interests will be affected by the judgment in the action but not if his commercial interest only would be affected. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between 'legal' and 'commercial' interests helpful. A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action? 43 At page 525 of the joint judgment in News Limited, their Honours held that: The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 at 322 per Kirby J. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential. 44 Accordingly, I accept that there must be a direct, rather than an indirect affectation of the person's rights or liabilities if that person is to be required to be joined as a party to a proceeding. It is no more than the logical corollary of that proposition that a person who is able to establish that their rights and obligations are not relevantly directly affected, but who have been joined, may apply to cease to be a party. As to how a court is to identify whether or not a right or liability is "directly" affected, I regard myself as bound by what was stated by their Honours at 525: Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that mist be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. 45 The centrality of the effect of the orders sought upon a third party and the distinction between a circumstance which involves only indirect effects as opposed to those which are direct, is well illustrated by how the Full Court itself dealt with the particular circumstances before it in News Limited. Those proceedings had concerned a dispute originating in the conduct of News Limited in seeking to set up a rival rugby competition to that operated by the Australian Rugby Football League. 46 In those complex proceedings, neither the players nor the coaches had been joined as parties. For that reason, certain orders that had been sought and made by the primary judge which had directly affected their rights and obligations were set aside by the Full Court. 47 However, it is important to note that that was only required because those orders had been sought and made; otherwise the players and coaches would not have been required to have been joined as parties to the proceeding. 48 Under the heading "Non-joinder of the players and coaches" at page 525, their Honours reasoned as follows: In the present case, in so far as the remedies sought at trial by the League and ARL against News, SLPL and the Franchisees were confined to damages based on unlawful inducement of breaches of the players' and coaches' contracts, the Super League players and coaches were not necessary parties who ought to have been joined. An award of damages against News and the Super League companies would not directly affect the rights or liabilities of the players or coaches. Their non-joinder did not prevent the Court from considering, for the purpose of this party of the claim, whether breaches of players' and coaches' contracts with their clubs had occurred. 49 The only orders presently sought by the Applicants are orders that the Commonwealth Minister's decision was invalid; an order quashing that decision; and an order that the matter be remitted to the Commonwealth Minister for reconsideration according to law. Ms Scott accepts that those orders do not directly seek relief against either the First or Second Respondent. 50 However there is a residual claim for the Court to make "such further or other orders as the Court thinks fit". I reject that I would be entitled to construe that request for relief at large so as to catch any matter not manifest in the pleadings; however if it is foreseeable, having regard to the Applicants' pleadings, that an order that would directly affect the rights or liabilities of the First and/or Second Respondents might be capable of being made, I accept that they would need to remain parties to these proceedings. 51 I therefore turn to the paragraph of the pleadings that is submitted by the Applicants to put the question of the First and Second Respondents' rights and liabilities in issue. 52 Paragraph 38 of the Applicants' Third Further Amended Statement of Claim is the basis upon which Ms Scott submits that the Applicants' pleadings leave open the possibility of the Court making such an order. It is as follows: 38. In the alternative to paragraphs 21, 22, and 25, tThe Applicant repeats paragraph 5-7 and states that if the Action, for the purposes of the Decision, is the marine farming as undertaken by the Marine Farmers alone, the Decision is invalid on the basis that the Decision was not authorised by ss 75, 77 and 77A of the Act, in that it was made on the basis of the Minister believing that the Action would be taken in a particular manner, and: (a) the Decision was based upon, and the notice of the Decision contains, conditions that are uncertain. PARTICULARS (i) It is unclear who the 'person taking the action' is pursuant to the Decision and therefore who is required to comply with the conditions. (ii) Condition 1(a) requires that "measures" are taken but does specify what those measures are. (iii) Condition 2(b) requires that "measures" are taken but does specify what those measures are. (b) the Decision was based upon, and the notice of the Decision contains, conditions that are uncertain and lack finality. PARTICULARS (i) Insofar as conditions 1(a) and (d) and 2(b) and (c) afford "the person taking the action" the ability to determine for himself or herself conditions for the undertaking of the action, the Decision is uncertain. (ii) Conditions 2(a), 2(b), 2(c) and 2(f) lack finality in that, in accordance with the Definitions, the following matters must be reviewed and re-determined: (A) Monitoring sites (B) Limit levels (C) Total biomass (iii) Conditions 1(d) and 2(c) require that targeted management measures must be undertaken, which in accordance with the Definitions includes decisions and actions to be taken by the First and/or Second Respondents. (c) the Decision was based upon, and the notice of the Decision contains, conditions that are not directed to the manner in which a particular person will take the Action, but rather to the aggregate effects of the activities of all of the Marine Farmers. PARTICULARS (i) Condition 1(a) requires that measures are taken to prevent the impacts referred to arising from "marine farming operations", be taken across all leases. (ii) Condition 2(b) requires that measures to ensure that the rolling annual median value does not exceed the limit levels which requires that measures are taken across all leases. (d) the Decision was based upon, and the notice of the Decision contains, conditions that the substantive content of which will depend on decisions to be made from time to time by the First Respondent. PARTICULARS (i) Condition 1(d) requires that targeted management measures must be undertaken, which in accordance with the Definitions includes decisions and action to be taken by the First and/or Second Respondents. (ii) Condition 2(a) requires that the number and location of monitoring sites be reviewed in mid 2013 but does not specify how this review will occur. (iii) Conditions 2(b), 2(c) and 2(f) require, in accordance with the Definitions, that the following matters must be reviewed and re-determined by the First and/or Second Respondent: (A) Limit levels (B) Total biomass (e) the Decision is an unreasonable exercise of the power conferred in ss.75, 77 and 77A of the Act in that it is outside the scope, purpose and objectives of the Act. PARTICULARS (i) The purpose of the Decision is to set out the manner in which an action must be taken that will ensure that the action will not have, and is not likely to have, an adverse impact on the matters to be protected under the Act. (ii) The notice of the Decision contains conditions 2(b), 2(c) and 2(f) which are subject to review and re-determination based on unspecified criteria and an unspecified process. 53 In my opinion, [38] in the form it is pleaded does not support the contentions that Ms Scott advances on the Applicants' behalf. Nothing pleaded in [38] alleges that either the First or Second Respondent became bound by the referral decision to take any particular action or became subject to any particular liability. Nor does it plead that the State accepted contractual, or some other responsibility in relation to its implementation. 54 What is pleaded at [38] are simply the premises upon which the Applicants base their contentions that this Court should conclude that the Minister's decision was invalid. The particulars that are referred to in that pleading in support of those premises are no more than the specific facts the Applicants seek to establish and rely on in support of that proposition. 55 In my opinion, there is nothing pleaded directly or necessarily to be implied in [38] to support the Applicants' submission that their pleading is to be construed as asserting that the First and/or Second Respondents were made subject to, or through their conduct subjected themselves to, any duty or obligation to conduct themselves in accordance with the terms of the referral decision. Nor do I identify anything in the Applicants' pleadings at [38] that might be construed as an allegation that the referral decision conferred any power or responsibility on either the First or Second Respondents, not already possessed of them pursuant to State law. 56 Moreover, assuming I may be wrong to confine my consideration to the pleadings, nothing was referred to me by counsel for the Applicants in the decision record that might entitle the Court to make orders directly affecting any right or liability of either of the First or Second Respondents. The highest point suggestive of that possibility my own research has been able to identify was a letter sent by Kim Evans, Secretary of the Department of Primary Industries, Parks, Water and Environment dated 5 September 2012 addressed to James Tregurtha, Assistant Secretary, Environment Assessment Branch of the Commonwealth Department of Sustainability, Environment, Water, Population and Communities (at AB pp 379-420). 57 In that letter, Mr Evans explains how the State had regulated, and in the future would regulate marine farming in Tasmania. He writes (at page 381): All marine farming operations in Tasmanian waters have the same licence conditions relating to unacceptable benthic impacts. The licence conditions are based on extensive international and local research, with the local research particularly focusing on the effects of marine farming derived organic enrichment on sediment condition and recovery processes. The following licence conditions relating to unacceptable benthic impact are currently in all marine farming licences for operations in Macquarie Harbour. These conditions will also be included in the licences granted for the operation of the proposed expanded marine farming operations. There must be no significant visual, physio-chemical or biological impacts at or extending beyond 35 metres from the boundary of the Lease Area. The following impacts may be regarded as significant: Visual Impacts: • Presence of fish feed pellets; • Presence of bacterial mats (e.g. Beggiatoa spp.); • Presence of gas bubbling arising from sediment, either with or without disturbance of the sediment; • Presence of numerous opportunistic polychaetes (e.g. Capitella sppp., Dovilleid spp.) on the sediment surface. In the event that a significant visual impact is detected at any point 35 metres or more from the lease boundary, the licence holder may be required to undertake a triggered environmental survey or other remedial activity determined by the Director. 58 In relation to future matters, Mr Evans explains to Mr Tregurtha that State-issued marine farming licences would contain conditions that require licence holders to undertake a water quality program to monitor changes in indicator levels relative to prescribed limits within the harbour: As you are aware, as part of the ongoing development of the model which was used by the State Government to assess the amendment to the Macquarie Harbour Marine Farming Development Plan, the three companies have been collecting monthly water quality data since September 2011. The model will be recalibrated during the first review cycle of the adaptive management framework, using at least 12 months of water quality data within the harbour that reflects the current extent of marine farming activities. Marine farming licences will contain conditions that require the licence holders to undertake a water quality program to monitor changes in indicator levels relative to prescribed limits within Macquarie Harbour. The monitoring program will involve continued assessment of the water quality indicators - ammonia, nitrate and dissolved oxygen, at 11 sites throughout the Harbour (refer Map 2 for sample locations) until mid 2013 after which the number of monitoring sites will be reviewed. In addition the marine farming licences will require quarterly reporting and interpretation of the results of the water quality monitoring program. Water quality limits will be contained within marine farming licences, and will be based on the 80th/20th percentile values of the water quality indicators, based on the predictive biogeochemical and hydrological model outputs. The percentage vales of the water quality indicators will be: • Ammonia - 80th percentile; • Nitrate - 80th percentile; • Oxygen - 20th percentile. As a precautionary measure to ensure that expansion of salmonid production in the harbour does not significantly impact on water quality, interim water quality limits have been established for the above water quality indicators. These interim limits will be in place until the first review of the adaptive management framework is completed in mid 2013, and will be included as mandatory conditions within the marine farming licences. In mid 2013 the interim water quality limit levels will be reviewed. The approach to water quality limits after the review will be based on the 80th/20th percentile as is the case for the interim levels outlined above. The reviewed figures will be derived from a recalibrated biogeochemical and hydrological model that will be informed, amongst other things, by at least 12 months of water quality data collected from the harbour, and further predictive modelling. 59 In my opinion, once the context of that correspondence is understood, it does not appear to me open to the Court as possible to construe Mr Evans' letter as him giving legally binding undertakings on the Tasmanian government's behalf. Mr Evans' letter simply describes and explains what the State government and its agencies responsible for the management of marine farming in Tasmania had done in the past, and intended to do into the future pursuant to their own distinct responsibilities under State law. 60 Thus, I have been unable to identify any basis either on the pleadings, and insofar as I have been able to identify matters not referred to by counsel in relation to the record, that might give rise to an occasion whereby the Court might make "such further or other orders" as would directly affect either of the First or Second Respondents' rights or liabilities. 61 Mr Pound was correct, in my opinion, to take issue with the Applicants' submission that the Commonwealth Minister's referral decision had, or could have, any direct effect on the rights or liabilities of the First or Second Respondent: What the Commonwealth Minister takes issue with is that the applicants respond to that submission by the first and second respondents by saying, "Well, your Honour's decision will affect the rights and liabilities of the first and second respondents because the decision requires the first and second respondents to do certain things", and it is the Commonwealth's position that the decision does not require the first and second respondents to do anything. The first and second respondents will exercise their own powers under their own legislation, and the fact that they will do is simply one part of the bedrock of circumstances on which the Minister formed his belief that the proposed action would be undertaken in a particular manner. (transcript p 34 lines 10-19) 62 Ms Scott may be correct, and I do not take Mr Turner to have disputed it, that if this Court determines that the Commonwealth Minister's referral decision was invalid, that that outcome may give rise to indirect consequences for the State and its regulatory instrumentalities. However, any such indirect effects would not, in my view, satisfy the requirements established by the Full Court in News Limited which is binding upon this Court. 63 I am therefore satisfied, as Mr Turner submits, that the First and Second Respondents are no longer, within the meaning of the test that this Court must apply, proper and necessary parties to these proceedings as they are now pleaded. 64 I therefore turn to Ms Scott's submission that, notwithstanding that conclusion, the Court should exercise its discretion to require them to remain parties in the proceeding. I accept that such a discretion exists. That is the ratio of the decision in Wily. While a decision of a single judge, I should apply it unless persuaded that it was plainly wrong. I am not so satisfied. 65 However, in my opinion, consistent with the conclusion reached in BJ McAdam by Perram J, it is a discretion only to be exercised in exceptional circumstances. The starting position is that a party against whom a proceeding has been commenced but is no longer properly a necessary or proper party because of an amendment to the pleadings, will be entitled to an order that they cease to be a party and to have their costs. 66 The circumstances in Wily were exceptional. In Wily, the person seeking to cease to be a party had voluntarily chosen to participate in those proceedings from the outset. He had maintained his right to do so, notwithstanding Hill J having drawn his attention on at least two occasions to the fact that it was unnecessary for him to do so. He had actively participated in those proceedings notwithstanding his lack of direct interest. Only at a very late stage did he seek to cease to be a party - motivated by a desire to obtain a forensic advantage. In those circumstances, his Honour declined to grant him leave to cease to be a party. Colloquially, his Honour might be said to have concluded that the applicant then seeking to cease to be a party should not be permitted to have his cake and eat it too. In my view, the reasoning in Wily was based on the applicant's prior inconsistent conduct, disabling him from obtaining the relief he sought. 67 I am reinforced in my conclusion that the discretion to require a person to continue as a party in a proceeding against his or her will when they are no longer a proper or necessary party within the meaning of News Limited is to be exercised only in exceptional circumstances by the decisions of Sackville J in Prentice and in Prentice v Cummins [2002] FCA 1165 (Prentice No 2). Even though a forensic advantage was sought in those proceedings, his Honour declined to exercise a discretion to compel a party to remain in proceedings in which they no longer wished to participate and to which they were no longer a proper and necessary party. 68 By contrast, in these proceedings, until the Third Further Amended Originating Application and Third Further Amended Statement of Claim were filed, the First and Second Respondents had been compelled to be parties. They have brought their application without delay after the Applicants' amendments of their pleadings disclosed to them that they may not be necessary and proper parties. I see nothing disentitling in the conduct of the First and Second Respondents or their counsel that would stand as a bar to my granting the application they have made. 69 I do not doubt, as Ms Scott contends, that the Court might be assisted by submissions from Mr Turner or other counsel on behalf of the First and Second Respondents. However, such benefit as that might provide cannot be compelled. 70 Prentice No 2 is relevant for an additional reason: in that matter, his Honour deferred making an order that a person cease to be a party until after a pending application to amend the pleadings that might have altered that position had been determined. Only then did his Honour formalise the orders he had foreshadowed making in Prentice. 71 A potentially similar issue arises in the present case because the pleadings in these proceedings are not technically closed. The Applicants have yet to file their replies to the respondents' defences. 72 It would be wrong to speculate as to whether anything that the Applicants might plead by way of a proper reply might alter the circumstances I have referred to above. Ms Scott made no submissions that the Applicants intended to do so. However, against even a small contingency that it might, I will make a self-executing order to come into effect only after a short period following the expiry of the period remaining available for the filing of any reply by the Applicants. Until that time, it will be open to any party to apply for alternative orders. 73 Turning to the issue of costs, I do not accept there to be anything before the Court that would disentitle the First and Second Respondents to their prima facie right, as a party against whom proceedings have been initiated but then withdrawn, to have their costs, assuming that that order will come into effect. I am unpersuaded by Ms Scott's submission that the Applicants came to be on notice regarding the difficulties of establishing their case against the First and Second Respondents only recently. Quite early in these proceedings I drew the Applicants' attention to certain potential difficulties they might have in advancing a claim that the First and Second Respondents were the parties undertaking the action the subject of the referral decision, having regard to the decision of the Full Court in Secretary, Department of Primary Industries, Parks, Water and Environment v Tasmanian Aboriginal Centre Inc [2016] FCAFC 129; (2016) 244 FCR 21 per Allsop CJ, Griffiths and Moshinsky JJ. 74 Further, as I explored with Ms Scott in oral submissions, the only costs not already the subject of previous orders for costs thrown away that would be in issue appear to be those which have arisen since the pleading of the Third Further Amended Statement of Claim and its covering originating application. Assuming the hanging order I have made comes into effect, the First and Second Respondents must be entitled to their costs of this application. Having regard to that, any additional costs will be minimal. 75 However I see no basis, and it was not contended otherwise by any of the respondents, that costs should be ordered on any basis other than the ordinary party and party basis. 76 In consequence of what I have discussed, I will make orders as follows: (1) Subject to any party filing an interlocutory application for an alternative order by 4.00 pm Wednesday 21 February 2018, the First and Second Respondent each cease to be a party to these proceedings without further order of the Court. (2) Upon either or both of the First and Second Respondents ceasing to be a party to these proceedings in consequence of the operation or order 1, the Applicants pay the First and Second Respondents' costs in these proceedings from their commencement up to and including the costs of their interlocutory application heard on 9 February on a party/party basis, to be taxed if not agreed. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr.

SCHEDULE OF PARTIES TAD 4 of 2017 Respondents Fourth Respondent: PETUNA AQUACULTURE PTY LTD Fifth Respondent: TASSAL OPERATIONS PTY LTD (ACN 106 324 127)