Administrative Law - Fisheries and fishing rights - implementation of a Plan of Management - whether the determination constituting the implementation was an administrative or legislative act - use of a formula for the allocation of quotas - formula containing a statistical fallacy that produced an irrational result - consequences flowing from such a finding.

Fish and Fisheries - determination of a Plan of Management for a fishery - nature and effect thereof.

Solicitors for the Applicant : Messrs Macphillamy, Cummins and Gibson

Solicitors for the Respondent: Australian Government Solicitors

In these proceedings the applicant, Austral Fisheries Pty. Ltd., seeks judicial review, pursuant to the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"), of an alleged decision of the respondent Minister. Under s.7B of the Fisheries Act 1952 (Cth) it is provided that "(t)he Minister may, by instrument in writing, determine a plan of management for a fishery...". Acting in pursuance of that power, the Minister has determined a plan of management, cited as the "South East Fishery (Individual Transferable Quota) Management Plan 1991" ("the new plan") to replace the "South East Trawl Fishery Preliminary Management Plan" ("the old plan"). Notification of the making of the new plan appeared in the Commonwealth of Australia Gazette on 9 December 1991.

2. It has been claimed by the applicant that the Minister's act whereby he determined the new plan constituted a decision of an administrative character. Should that claim be correct then, having regard to the definition of the phrase "decision to which this Act applies" in sub-s.3(1) of the ADJR Act, it would seem that the Minister's determination would be a reviewable decision. In the alternative, the applicant allowed for the relevant decision being the embodiment of a legislative act; it therefore further claimed injunctive relief under s.39B of the Judiciary Act 1903 (Cth) to restrain the Minister from implementing the new plan and a declaration that it was, as delegated legislation, ultra vires by virtue of its manifest unreasonableness. Mr Bennett QC, counsel for the applicant, submitted that the argument in support of this alternate proposition and the facts upon which it would be based would be the same as those advanced in support of the first argument but he acknowledged there would be a higher onus.

3. Most of the background facts have been agreed and may be briefly stated. The applicant is the owner of the fishing vessels "Orion" and "Teena B" and it had used those vessels to fish for orange roughy in the waters that were included in the old plan. The applicant has complained that the introduction of the new plan has had the effect of severely reducing its quota for this important segment of the south eastern fishery.

4. Darby Matthew Ross, the applicant's manager, and a man with 20 years experience in the fishing industry, explained in his affidavit of 3 January 1992 a little of the history and development of orange roughy and its market. Controls on catches of this fish were first introduced in early 1987; it was thought by the Minister of the day that without them the high market prices then being paid for orange roughy fillets would escalate, causing investment in the fishing "to balloon to a level higher than can be supported by the resource". A ceiling of 20,000 tonnes per annum was therefore set - but with a warning that this allocation might not prove to be maintainable: (vide media release dated 19 February 1987 being annexure F to Mr Ross' affidavit). In fact, the annual total allowable catch ("the TAC") varied annually thereafter rising to 31,000 tonnes in 1989 but then reducing to 24,000 tonnes in 1990. By then the position had advanced to the stage where the Minister published a media release dated 31 July 1990 entitled "Quota implementation in the South East Trawl Fishery". That publication was significant in that it established that catch histories and current financial investments would be the factors that would determine future quotas. It was also significant in its reference to the intended consultative process. The relevant section of the release which is annexure J to Mr Ross' affidavit was as follows:

"Mr Kerin said that catch histories after 31 December 1989 would

not be taken into account. Also as from today any further

investment in the fishery would not count for quota eligibility

and allocation purposes. Any logbooks submitted after today would

not be used to calculate catch history, even if they related to

the period prior to 31 December 1989.

'I have announced these dates at this time because I am

concerned that fishermen may think that by building up catch

histories in a species they have not previously targeted, or

by increasing their investment in the fishery, they are

likely to receive a larger share of the allocation.

The management arrangements are being put into place to

address the serious biological and economic decline of the

fishery. It would defeat the purpose of applying quota for

the Government to consider any realignment of catch patterns

or investment at this late stage.

Catch history and investment are two important elements to

be taken into account when determining the amount of quota

each participant will receive. In addition there will be

considerable consultation between the Australian Fisheries

Service (AFS), industry and the relevant State governments

about the elements to be used,' Mr Kerin said.

The AFS has set up a group to implement quota management in the

south east trawl fishery over the next two years. These new

arrangements are in line with a report commissioned by the

Australian Fisheries Council on long term management of the

fishery. The new arrangements rely on allocating individual

transferable quota of the total available catch of particular

species to fishermen already participating in the fishery.

In implementing these arrangements, the group will be looking at

such matters as which fishermen are eligible for quota of any

given species and how much quota each eligible fisherman should

receive. These issues, along with many other elements of the

quota program, will be the subject of consultation with industry

and the relevant State governments over the next few months."

5. Mr Ross thereafter described in his affidavit how various organizations continued working towards the implementation of a new management plan for the fishery. It would be fair to say that, as he described it, progress was slow. An industry workshop meeting was convened and held from 7 to 10 November 1991, but no draft management plan had earlier been circulated. According to Mr Ross details had been "promised on a number of occasions by Mr Scott in the past but never provided" (paragraph 70 of his affidavit). Mr Scott was the witness Bernard James Scott, the officer in the Department of Primary Industries and Energy with the particular responsibility for the preparation of a draft of the new management plan and the individual quotas. Despite this complaint, Mr Ross acknowledged that during the evening of 7 November, Mr Scott arranged for sealed envelopes to be distributed to those members of the industry who were present at the workshop. These envelopes contained an advice that was described as "the initial assessment of your individual transferable quota (ITQ) allocation for the South East Trawl Fishery". That initial quota assessment was expressed as a percentage (for each species of fish) of the TAC that had been set for each species in the forthcoming season. However, as the accompanying letter acknowledged, the formula that was used to arrive at each individual allocation was not disclosed; instead the letter contained the following parenthetical statement:

"(You will receive an information paper describing the allocation

formula shortly)." (Vide annexure Q to the affidavit of Mr Ross).

6. Each addressee was informed of the information that was used in preparing his initial quota assessment and he was invited to comment on that information or on his initial assessment within 14 days. The letter then stated that upon the expiration of this period of 14 days the exercise of fixing each operator's final allocation would commence. In paragraph 75 of his affidavit Mr Ross said:-

"Later in the evening, a summary was shown around but not

distributed. It revealed that one operator had received an

allocation for one vessel which was equivalent to 18% of the known

fishery and, on estimated tonnage terms, that vessel's allocation

would have multiplied by several times its past actual catches.

All other operators of whose allocation I was aware had received a

fraction of their previous catches."

7. Other information has established that the favoured operator was the owner of the fishing vessel "Santa Rocco Di Bagnara".

8. At the conclusion of the workshop, those attending (of whom Mr Ross was one) advanced six alternative methods for determining individual quotas and suggested that the Australian Fisheries Service should review each of them to determine their effect on the proposed new quotas. The workshop also concluded that there should be a special committee ("the Allocation Review Panel") comprising Mr Scott and the State Government Directors of Fisheries of New South Wales, Victoria, South Australia and Tasmania; it further proposed that the role of that committee should be "to review the allocation of quotas in the orange roughy fishery" and that the committee be assisted by three non-voting fishermen. Mr Ross, who was appointed to be one of the three non-voting members, proceeded in his affidavit to describe the events that immediately followed:

"84. ... I was advised that the first meeting of the

Allocation Review Panel would be held in Melbourne on 15

November 1991.

85. At 5 pm on 14 November 1991, I commenced receiving a

74-page facsimile transmission which contained 24 separate

calculations...

86. The following morning, when I arrived at the meeting,

I was handed 3 further calculations or 'options' as they

became commonly known."

9. The 24 options or calculations (which are set out in annexure T to the affidavit of Mr Ross) had been compiled by the Australian Fisheries Service as reviews of the allocation options for orange roughy for the South East Trawl Fishery. Without attempting an exhaustive survey, it would seem reasonably accurate to say that the first 24 options were variations on a theme. The theme was to add an operator's catch of orange roughy for a number of years and to express that addition as a percentage of the industry's catch in that fishery for the same period of time. The variations were the actual years to be chosen: e.g. all years since 1984 or the best five years since then or delete the worst two years since 1984 and so on. In addition, for the purpose of converting an operator's quota into "units", it was necessary to give "weighting" not only to catch history but also to financial investment. Variations in the 24 options showed catch history at 50%, 60% and 80% with financial investment making up the balance. In advancing these options the Australian Fisheries Service said:

"... the allocation mechanism is based on summing the orange

roughy catch for each vessel and dividing by the fleet catch

over the period used. This was the mechanism that was

suggested by industry rather than treating each year

separately,..." (See annexure T to Mr Ross' affidavit)

10. The last three options (constituting annexure U to Mr Ross' affidavit) were advanced on a premise which contradicted that which had been used in annexure T. It was explained that "... the allocation mechanism is based on the AFS allocation mechanism which treats each year separately, ..."

11. Options 25, 26 and 27 were identical in that they looked at each chosen year and expressed the operator's catch of orange roughy as a percentage of the total catch in that year. They were also identical in that they each discarded the worst year between 1984 and 1989. They differed only in the weighting attributable to catch history and financial investment. Ultimately option 25 with a 50% weighting for catch history was chosen by AFS and became part of the new plan. According to Mr Ross, option 25 was the same as the proposal that had been distributed to those attending the workshop on 7 November 1991 save that the whole of the south east fishery was now treated as one zone and not three zones as before. Mr Ross also pointed out that the owner of "Santa Rocco Di Bagnara" still retained the same favoured position whilst all other operators received reduced quotas. These allegations have not been disputed and I find them to be accurate.

12. A significant feature of the new plan and a material departure from the old plan is the introduction of the concept of dividing the fishing capacity permitted for a fishery into units that are referred to as "units of fishing capacity": (para 7B(5)(a) of the Fisheries Act). Previously, the size of the catch in a fishery was determined by having regard to the number of boats that were licensed to fish in that fishery; under the new plan, control will be maintained first, by fixing the total allowable catch ("the TAC") in respect of a particular species of fish, such as orange roughy, and then by the allocation to persons of units of fishing capacity in that fishery and the assignment of such units to particular boats: see generally paragraphs (b) and (c) of sub-s.7B(5) of the Fisheries Act.

13. The applicant does not complain about this new method of control nor does it complain about the TAC for orange roughy that has been fixed for the 1992 season. It does however complain about the size of its quota (i.e. the units of fishing capacity that has been allocated to it).

14. On 3 December 1991, the Minister issued a media release that advised that the new plan would be operational from 1 January 1992. Apart from this important piece of information, the release (which is annexure V to Mr Ross' affidavit) is also important for the clarity with which it explains the concept of individual transferable quotas. After explaining that they can be bought and sold the release continued:

"They will enable fishermen to manage their operations in a

more businesslike manner. Each operator will have a

reliable share of the fishery rather than being forced to

compete when the conditions might not be optimal.

Some fishermen will recognise that they do not have enough

quota to be viable and they will be able to either buy

additional quota or sell to other operators. This will

provide the scope for some operators to leave the fishery

with some financial gain."

15. The complaint of the applicant is that option 25 contains a statistical fallacy that produces an irrational result. Hence, so it is claimed, the administrative decision was so unreasonable that no reasonable person could have made it. In the alternative, the applicant has sought the injunctive relief to which I have already referred. The applicant also argued that the conduct of the officers of the Australian Fisheries Service and the ultimate decision of the Minister breached the principles of natural justice. Finally, it was claimed that when the new plan was promulgated, copies of it were not available at the place nominated in the Gazette. This was said to be a breach of sub-s.7C(1) of the Fisheries Act having the effect of invalidating the new plan.

16. It will be necessary to make some findings of fact before considering this last argument as some issues were disputed. The starting point is sub-s.7C(1) of the Fisheries Act; it provides that:

"The Minister shall cause to be published in the Gazette, in

respect of each determination, notice of -

(a) the fact that the determination has been made; and

(b) the place or places where copies of the

determination can be obtained."

17. The following extract from the relevant Gazette of 9 December 1991 (which is annexure P to the affidavit of Gail Patrice Hewitt of 23 January 1992) is the next matter of importance:

"SOUTH EAST FISHERY (INDIVIDUAL TRANSFERABLE QUOTA)

MANAGEMENT PLAN 1991

Pursuant to subsection 7C(1) of the Fisheries Act 1952, I,

SIMON CREAN, the Minister of State for Primary Industries

and Energy, HEREBY NOTIFY that -

(a) I have determined Plan of Management No. SEF1; and

(b) Copies of the Plan of Management are available

from the Australian Fisheries Service,

Department of Primary Industries and Energy at

Cnr Broughton and Blackall Sts. Barton. ACT."

18. The short issue is this: based on the oral and affidavit evidence of Ms Hewitt and Mr Scott, the applicant claims that copies of the new plan were not available from the Australian Fisheries Service, Department of Primary Industries and Energy at Cnr Broughton and Blackall Sts. Barton ACT on 9 December 1991.

19. Ms Hewitt, who described herself as a Fisheries Management Consultant, said that she attended at the offices of the Australian Fisheries Service, Department of Primary Industries and Energy at the corner of Broughton and Blackall Sts, Barton ACT on Tuesday 10 December 1991. She deposed to having a conversation with Mr Scott to the following effect:

"He said:

'The Minister signed the new Plan (meaning the 1991 Plan)

yesterday.'

I said:

'If that's the case, can I please have a copy of the Plan.'

He said:

'No, you can't. We don't have any copies. We don't even

have one here.'

I said:

'Well when are we going to get one.'

He said:

'Copies will be sent to all operators with their final

determinations.'

I said:

'Well, when's that going to be.'

He said:

'I anticipate this will be early next week.'"

(Emphasis added).

20. Notwithstanding this evidence, it is common ground that the Minister signed the Plan on 9 December in Melbourne and that, as the applicant now accepts, the plan was thereafter forwarded to Canberra, arriving at the designated address at some late stage in the afternoon. It is true, as Mr Scott conceded, that he, personally, did not have a copy of the plan on the following day, Tuesday, when Ms Hewitt asked for it. However the fact that Mr Scott did not possess a copy does not, despite his seniority in the Department, address the question whether a copy or copies of the plan were available at the designated address on 9 December 1991. The answer is that at least one such copy was available and that is the end of the matter. I do not subscribe to the view that it had to be at the designated address throughout the whole of the day - that is, since one minute past midnight. To speculate on what might have happened on 9 December if Ms Hewitt or some other third party had demanded a copy of the plan is of no value. The position on 10 December is, of course, different; Ms Hewitt did ask for a copy and Mr Scott, in his affidavit, acknowledges that such a request was made. Mr Scott also acknowledged in evidence (p67) that he was not personally aware that on 9 December 1991 the plan had arrived in Canberra. In fact he did not know of the arrival of the plan until late in the morning of 10 December. Although he was not asked the specific question, I am satisfied and I find that Mr Scott acquired this information after he had spoken to Ms Hewitt.

21. Mr Scott denied using the word "we" (which has been emphasised in the quoted passage from Ms Hewitt's evidence) in his answers to Ms Hewitt. He maintained that he used the word "I". I do not think that it is necessary to make a specific finding on this subject. Both were honest witnesses, doing the best they could to remember a conversation which was, as I classified it, a casual discussion between two friends. The subject was one of professional significance to both of them but the matter of prime importance was that the final determination about the implementation of the new plan had been made. Ms Hewitt had not attended the department for the purpose of obtaining a copy of the plan; hence her inquiry about its availability was not one that was couched in terms of the provisions of s.7C of the Fisheries Act, nor was it so expressed as to cause Mr Scott to make inquiries from within the department. I find that a copy of the new plan was within the nominated address on 9 December. I further find that Mr Scott, on 10 December, innocently caused Ms Hewitt to form the belief that a copy was not so present. That was a mistake but, in the circumstances of this case, that mistake was insufficient to strike down the new plan as invalid.

22. In my opinion, these findings of fact mean that the applicant has failed to establish that on the date of notification (i.e. 9 December) the plan was not available at the place specified in the Gazette: Watson v Lee [1979] HCA 53; (1979) 144 CLR 374 per Barwick C.J. at 381-382.

23. The formula (that is, option 25) for the identification and allocation of units, which is contained in clauses 8 and 11 of the new plan, is highly complex, extending over several pages. Fortunately, it is not necessary to attempt a summary of it. Desmond Francis Nicholls, a Reader in Statistics and Dean of the Faculty of Economics and Commerce at the Australian National University has studied it and in his affidavit that was sworn on 14 February 1992 has concluded that, in his opinion, the formula contains "a statistical fallacy" that has produced "an irrational result". Although it was argued that issues of fairness, equity and maintenance of market shares were the criteria that led to the choice of option 25, Mr Nicholls' mathematical conclusions have not been challenged by the respondent. I must say that I do not readily comprehend how a statistical fallacy that produces an irrational result could be said to be synonymous with fairness, equity and maintenance of market share. It will be necessary to return to this issue at a later stage in these reasons.

24. In order to explain the mistake that had been made in the formula, it is necessary to bear in mind that its primary objective was to assess, over a specified period, the involvement of an individual in the particular fishery by having regard to his catch history and financial involvement. This could have best been done by adding the annual factors and expressing the individual's total as a percentage of the industry's total for the same period. Instead a percentage was struck in respect of each year; thereafter those annual percentages were totalled and divided by the number of years that were involved in the exercise. This is better explained by the hypothical example in Mr Nicholls' affidavit. In paragraph 7 he said:

"To illustrate the fallacy, let it be assumed that the road

deaths over Easter in two successive years are as set out in

the following table.

NSW VIC SA Q WA TAS ACT Total

Year 1 20 25 10 10 5 3 1 74

Year 2 25 20 10 15 6 3 4 83

Percentage

Increase 25 -20 0 50 20 0 300 12.2%

In this hypothetical example, the overall percentage

increase in road deaths between the two years is 12.2%. If,

however, one averages the percentage increase figures, there

is an increase of 53.6%. The figure of 53.6% is quite

meaningless. It has no mathematical significance and it has

no practical purpose or use whatsoever. Anyone suggesting

that the figure of 53.6% was relevant to any question

associated with road safety would be relying on a

statistical fallacy."

25. I find that the formula that appears in clause 11 of the new plan for the allocation of units in the fishery is flawed in a manner that is reflected by this example and that it has produced an irrational result. The matter of greater difficulty is to determine what consequences (if any) flow from this finding.

26. In my opinion, the first task is to determine the correct classification of the new plan. Is it the product of an administrative decision that is reviewable under the ADJR Act, or, is it an example of delegated legislation? If it is a decision of an administrative character that was made under an "enactment" then, unless it falls within certain statutory exceptions, it will be a decision to which the ADJR Act applies: s.3(1). But that Act does not apply to a legislative decision.

27. In Commonwealth v Grunseit [1943] HCA 47; (1943) 67 CLR 58 at 82, Latham C.J. said:

"The general distinction between legislation and the

execution of legislation is that legislation determines the

content of a law as a rule of conduct or a declaration as to

power, right or duty whereas executive authority applies the

law in particular cases."

28. Queensland Medical Laboratory v Blewett [1988] FCA 423; (1988) 84 ALR 615 is a recent example of a case where it was necessary to examine this question. The respondent Minister had made a determination that a new pathology services table be substituted in a schedule to the Health Insurance Act 1973 (Cth). Gummow J. concluded that the relevant determination was legislative, rather than administrative, but he also decided that relief was available under s.39B of the Judiciary Act 1903 (Cth) - the Minister's determination being void for failure to satisfy a statutory condition precedent. His Honour, being of the opinion that the authority reposed in the Minister to make the determination was essentially legislative in character, explained his conclusion in these words:

"Nevertheless, in my view, when the Minister makes a

determination that the table specified in the determination

be substituted for the pathology services table then set out

in Sch 1A of the Act, he is making a decision of a

legislative rather than an administrative character. This

is because, to adapt the expression of Dixon J, s 4A(8) has

reposed in him an authority of an essentially legislative

character: Victorian Stevedoring and General Contracting Co.

Pty. Ltd. v Dignan [1931] HCA 34; (1931) 46 CLR 73 at 100-1. The

Minister is in a sense executing a law of the Commonwealth

because were it not for s 4A(8), he would lack competence to

make the determination. But that law was a permitted

delegation by the Parliament of legislative authority and to

decide to exercise the power conferred by the law is to act

as delegate of the Parliament and thus to act

legislatively." (p 636).

29. Mr Tracey QC, counsel for the respondent, claimed, correctly in my opinion, that there are many indicia in the Fisheries Act to support his contention that the power conferred on the Minister under s.7B of the Act to determine a plan of management for a fishery is of a legislative character. In the first place, s.7C(3) of the Fisheries Act provides that certain sections of the Acts Interpretation Act, 1901 (Cth) - being those that deal with the tabling and disallowance of regulations - apply to determinations "as if, in those sections, references to regulations were references to determinations and references to a regulation were references to a provision of a determination". However sub-s.(4) of the same section made it clear that such determinations were not statutory rules - thus avoiding the provisions of the Statutory Rules Publication Act 1903 (Cth) and the need to comply with the regime of printing, numbering and sale of statutory rules as set out in s.5 of that Act. Then again, sub-s.7C(6) provides that a determination under sub-s.7B(1) with respect to a plan of management for a fishery shall be deemed to be an enactment for the purposes of the Administrative Appeals Tribunal Act 1975 (Cth). That Act distinguishes between an "enactment" (meaning an "Act" or an "Ordinance") and a "decision"; it sets out in s.25 that an enactment may provide for the review, inter alia, of "decisions made in the exercise of powers conferred by that enactment". On the other hand s.16A of the Fisheries Act, which defines "decision" as having the same meaning as in the Administrative Appeals Tribunal Act, contains provisions for an application to be made to the Administrative Appeals Tribunal for a review of a "reviewable decision" - a term that is defined in s.16A in terms that do not include a determination under s.7B of the Fisheries Act.

30. The next item of persuasion that favours the classification of a plan of management as a legislative decision is to be found in sub-ss.(8) and (8A) of s.7B of the Fisheries Act. Both the Minister and the Secretary to the Department are bound, in the performance of their functions and the exercise of their powers, by the provisions of any plan of management. These provisions apply, not only specifically in relation to the particular fishery to which a plan of management relates, but also generally with respect to the performance and exercise of all functions and powers under the Fisheries Act. That the Minister and the Secretary should be so bound is wholly consistent with the objects of a plan of management and the potential breadth of its provisions. Such a plan is required to set out its objective and the measures by which that objective is to be attained: sub-s.7B(2); it is entitled to determine the manner in which the fishing capacity of a fishery is to be measured and to fix the permitted fishing capacity for that fishery: sub-s.7B(3); it is also entitled to make provisions for the grant, duration and conditions attaching to licences: sub-s.7B(4). However, in addition to all those matters, sub-s.7B(5) indicates, quite clearly, that a plan of management is intended to have general application to the fishing industry as well as specific application to those members of the industry who are working in the relevant fishery. That sub-section lays down:

"Where, in a plan of management for a fishery, the Minister

determines the fishing capacity permitted for the fishery,

then, without limiting the generality of sub-section (2),

the plan of management may make provision for and in

relation to -

(a) the division of the fishing capacity permitted for the

fishery into units (in this section referred to as

'units of fishing capacity');

(b) the allocation to persons of units of fishing capacity

in the fishery;

(c) the assignment of units of fishing capacity to boats,

and the holding, and cessation of holding, of units of

fishing capacity in relation to boats;

(d) requiring units of fishing capacity to be held in

relation to boats;

(e) the determination of the number of units of fishing

capacity to be held in relation to boats;

(f) the holding of units of fishing capacity that are not

assigned to a boat, including the number of such units

of fishing capacity that may be held by a person and

the period during which such units of fishing capacity

may be held;

(g) the duration, variation, re-assignment, transfer,

surrender, replacement, renewal of allocation,

suspension and cancellation of units of fishing

capacity;

(h) the recording of the allocation, assignment, holding,

cessation of holding, variation, re-assignment,

transfer, surrender, replacement, renewal of

allocation, suspension and cancellation of units of

fishing capacity and the manner in which such

recording is to be evidenced, including the issue,

recall and replacement of certificates and other

documents evidencing such recording; and

(j) the reconsideration of decisions made under the plan

of management."

31. The last of those provisions, paragraph (j) and its reference to the reconsideration of decisions is of further interest in that it is a reference - not just to "decisions" - but to "decisions made under the plan of management". In my opinion, it is another indicator in favour of the elevation of the plan of management to the stratum of a legislative decision. For these reasons, I have concluded that the power conferred on the Minister by s.7B of the Fisheries Act is of a legislative character.

32. In my opinion, the view that I have formed accords with the conclusions of French J. in Azevedo v Secretary to the Department of Primary Industries and Energy (unreported: judgment delivered 6 March 1992) and of Heerey J. in Secretary, Department of Primary Industries and Energy v Collins [1992] FCA 61; (1992) 106 ALR 351. In Collins'case, which was an appeal from a decision of the Administrative Appeals Tribunal, his Honour was dealing with the Great Australian Bight Trawl Fishery Preliminary Management Plan. The respondent's application for a renewal of his right to fish in the particular fishery had been refused because of his failure, in the previous year, to trawl for a minimum of 100 fishing days. It would seem that this failure had occurred through mechanical and other problems that were not the fault of the respondent. The tribunal, believing that it had a residual discretion, ordered that the decision under review be set aside. On appeal, his Honour said at p 357 that:

"... the plan was part of the law which the AAT had to apply

in considering whether the decision made was, on the

material before the tribunal, the correct or preferable one.

Either that law provided for a discretionary power to

dispense with the 100 day requirement or it did not. If

not, there was no 'residuary discretion' vested in the AAT."

33. His Honour allowed the appeal and set aside the tribunal's decision on the ground that the requirement that the respondent's boat (or its authorised replacement) should trawl for the minimum period was a mandatory requirement not capable of review.

34. In my opinion, the applicant is not entitled to be heard on this topic for two reasons. First, as a matter of fact, there was sufficient information before me to justify a finding that, having regard to the nature of the applicant's complaint, it was afforded natural justice. In its amended application, the applicant had claimed that there had been "a breach of natural justice in the making of the decision". It particularised that complaint in the following manner:

"The Applicant, as a person affected by the determination of

the 1991 Plan, and as a person to whom it was represented

that it would have an opportunity to consider and be heard

as to the terms of the 1991 Plan was given no, or no

sufficient opportunity to do so as the terms and provisions

of the 1991 Plan were not available until after its

notification in the Commonwealth of Australia Gazette of 9

December 1991."

35. Although those particulars complain about the failure to give to the applicant sufficient opportunity to consider the terms of the new plan, this does not properly reflect the manner in which the applicant prosecuted its application; the applicant's complaint was, in the ultimate, limited to the relevant formula that was adopted as distinct from other aspects of the plan. It is therefore not necessary to consider whether the plan was introduced with undue haste and without the opportunity for consultation. On the other hand, the relevant formula - option 25 - was submitted to a committee (of which Mr Ross, the applicant's Manager was a member) on 15 November 1991. Mr Ross did not, even then, complain of lack of consultation; his concern was that he was "completely overwhelmed by the amount of information"; he said that he was not able "to assimilate it": (See paragraph 88 of his affidavit).

36. The receipt of option 25 of 15 November was not new to Mr Ross; it had already made a tentative appearance at the workshop on 7 November: (See paragraph 75 of his affidavit). At that stage, its inherent defect had already reflected the absurdly beneficial result in favour of "Santa Rocco Di Bagnara". It may be fairly assumed that those members of the industry who were concerned about the possible implementation of this option (but Mr Ross, in the interests of the applicant, in particular) had the opportunity on and subsequent to 7 November 1991 and again, on and subsequent to 15 November, to voice their complaints to Mr Scott and other representatives of the respondent. Indeed, Mr Scott suggested that a proposal, similar to option 25 had been mooted at a meeting with members of the industry as early as January 1991. The final decision to adopt option 25 did not occur until 4 December 1991. The relevant facts are set out in paragraphs 96 and 97 of Mr Ross' affidavit.

"96. A meeting of GITLC was held in Melbourne on 4 December

1991. At that meeting, an officer of the Australian

Fisheries Services, Mr Kim Parkinson, passed around a

sheet of paper headed 'Option 25' and said, 'Well,

that's what we'll be running with.' or words to that

effect. Option 25 was the same as the original option

handed out on 7 November 1991 at the workshop to which

reference has been made above save that it treated the

Fishery as one zone instead of 3 zones. It still

contained the distortions which has been identified at

the workshop as a problem factor.

97. The effect of that option was still to provide the

operator of 'Santa Rocco Di Bagnara' with a multiple

of its previous catches and every other operator with

a fraction of their previous catches."

37. In all the circumstances, I have come to the conclusion that there is no merit in the applicant's complaint that it had been denied natural justice. Save for the existence and consequences of the statistical fallacy which I will shortly address, I believe that, as a matter of fact, the applicant had been accorded procedural fairness.

38. As I earlier said, there is a second reason militating against the applicant; in my opinion, it was not entitled to invoke the principles of natural justice. I have already concluded that the implementation of the plan was a legislative act. As such, the readiness to strike down because of lack of procedural fairness, so common to the administrative decision, is not available to the applicant in these circumstances. Megarry J. discussed the competing issues in Bates v Lord Hailsham (1972) 1 WLR 1373 at 1378 where he said:

"In the present case, the committee in question has an

entirely different function: it is legislative rather than

administrative or executive. The function of the committee

is to make or refuse to make a legislative instrument under

delegated powers. The order, when made, will lay down the

remuneration for solicitors generally; and the terms of the

order will have to be considered and construed and applied

in numberless cases in the future. Let me accept that in

the sphere of the so-called quasi-judicial the rules of

natural justice run, and that in the administrative or

executive field there is a general duty of fairness.

Nevertheless, these considerations do not seem to me to

affect the process of legislation, whether primary or

delegated. Many of those affected by delegated legislation,

and affected very substantially, are never consulted in the

process of enacting that legislation; and yet they have no

remedy. Of course, the informal consultation of

representative bodies by the legislative authority is a

commonplace; but although a few statutes have specifically

provided for a general process of publishing draft delegated

legislation and considering objections (see, for example,

the Factories Act 1961, Schedule 4), I do not know of any

implied right to be consulted or make objections, or any

principle upon which the courts may enjoin the legislative

process at the suit of those who contend that insufficient

time for consultation and consideration has been given. I

accept that the fact that the order will take the form of a

statutory instrument does not per se make it immune from

attack, whether by injunction or otherwise; but what is

important is not its form but its nature, which is plainly

legislative."

39. Plans of management for fisheries are now controlled by the Fisheries Management Act, 1991 and s.17 of that Act contains the legislative requirement for the publication and consultation to which Megarry J. referred. But its presence in the current legislation and absence in the Fisheries Act 1952 adds further emphasis to the conclusion that there is no substance in the applicant's complaint.

40. Furthermore, I do not consider that the plan and its implementation is to be considered as affecting only a small group of fishermen individually; on the contrary, it is widespread in its application. It exists not only with respect to those who may presently be entitled to fish in the fishery but also to all other members of the fishing industry who may later seek to obtain fishing rights in respect of that fishery. However, its greatest importance and application lies in its controls for the proper management of the fishery and the consequential benefit for the community at large. Even if the relevant decision should properly be classified as administrative in nature, I would be disposed to hold, because of its widespread application, that the duty to accord procedural fairness to an individual or group of individuals was not available: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 584 per Mason J.

41. Although several grounds were advanced in the amended application in support of this proposition, it was solely argued on the premise that the adoption of option 25 and the consequential use of the statistical fallacy amounted, without more, to the exercise of a power so unreasonably, that no reasonable person could have so exercised the power. In Council of Civil Service Unions v Minister for the Civil Service (1985) 1 AC 374 Lord Diplock, when discussing the grounds upon which administrative action is subject to control by judicial review, used "irrationality" to describe "Wednesbury unreasonableness" (Associated Provincial Picture House Ltd. v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223). Of it he said at p 410:

"It applies to a decision which is so outrageous in its

defiance of logic or of accepted moral standards that no

sensible person who had applied his mind to the question to

be decided could have arrived at it."

The difficulty in pursuing a claim such as this is further demonstrated by the decision of the House of Lords in Nottinghamshire County Council v Secretary of State for the Environment [1985] UKHL 8; (1986) 1 AC 240. The Secretary of State had laid before the House of Commons a certain report which was, in due course approved by resolution of the House; the report included certain expenditure guidance to local authorities. The respondents challenged this guidance as unlawful, one of their submissions being that, even if the guidance complies with the words of the statute, it offended a principle of public law in that the burden which the guidance imposed on some authorities (including the respondents) was so disproportionately disadvantageous when compared with its effect upon others that it was a perversely unreasonable exercise of the power conferred by the Statute upon the Secretary. In rejecting this argument, Lord Scarman said:

"For myself, I refuse in this case to examine the detail of

the guidance or its consequences. My reasons are these.

Such an examination by a court would be justified only if a

prima facie case were to be shown for holding that the

Secretary of State had acted in bad faith, or for an

improper motive, or that the consequences of his guidance

were so absurd that he must have taken leave of his senses.

The evidence comes nowhere near establishing any of these

propositions. Nobody in the case has ever suggested bad

faith on the part of the Secretary of State. Nobody

suggests, nor could it be suggested in the light of the

evidence as to the matters he considered before reaching his

decision, that he had acted for an improper motive. Nobody

now suggests that the Secretary of State failed to consult

local authorities in the manner required by statute. It is

plain that the timetable, to which the Secretary of State in

the preparation of the guidance was required by statute and

compelled by circumstance to adhere, involved him

necessarily in framing guidance on the basis of the past

spending record of authorities. It is recognised that the

Secretary of State and his advisers were well aware that

there would be inequalities in the distribution of the

burden between local authorities but believed that the

guidance upon which he decided would by discouraging the

high spending and encouraging the low spending authorities

be the best course of action in the circumstances. And, as

my noble and learned friend, Lord Bridge of Harwich,

demonstrates, it was guidance which complied with the terms

of the statute. This view of the language of the statute

has inevitably a significant bearing upon the conclusion of

'unreasonableness' in the Wednesbury sense." (pp 247-248)

42. That case, like the present, dealt with the review of a legislative act but there can be no suggestion in the present case that the Minister or any of his officers acted in bad faith or for an improper motive; fallacious though the formula may be, the question still remains whether it should be classified as "so absurd that (the Minister) must have taken leave of his senses". It might well be said (in the words of Lord Diplock) that it was "outrageous in its defiance of logic" such that it would have been reviewable if it had been an administrative decision. However the conclusion that I have reached is that the determination by the Minister of the new plan constituted a legislative act, and as such, a much sterner onus must be met. Standing back and assessing the total situation it seems to me that the facts of this case constitute one of those rare cases where that onus has been met. I do not believe that it is necessary to make literal use of the language of Lord Scarman; I do not think that the learned Law Lord intended his remarks to be applied literally; rather he used such language to emphasise that the court will only interfere in the most extreme cases.

43. The exact number of boats that trawl for orange roughy in the fishery was not established. However, it was agreed that there were about 50 to 60. In a comparison of their 1991 and 1992 quotas, every boat, bar one, had its quota reduced: the quota of that one boat was increased to over double its previous annual catch (paragraphs 77 and 78 of Mr Ross' affidavit) which meant one of 50 or 60 boats being entitled to approximately 18% of the TAC. Prima facie, there does not appear to be any reason for such a result; prima facie the utilization of option 25 was not only "outrageous in its defiance of logic", it also would have created a deep sense of injustice. Mr Scott in his evidence maintained his support for option 25; he was given every opportunity to explain it or justify it. In my opinion he was unable to do so. His evidence was:

"... what did lead you to support option 25?... Well, we had

three fundamentals that we were trying to develop and one

was that we wanted to develop a fair and equitable

distribution and the other one was that we wanted to get as

close as we could, as we stated right from the very

beginning, to have a look at how close they could get to

market share. What had been market share over the period of

time. And they were the three, sort of basic tenets that we

were looking at and so as a consequence we tried to do that.

The other thing was that we wanted consistency through the

whole of our operation if that was at all possible and so

that was why we felt that the principles were the ones that

we had to develop and apply those principles so that we

would have very little subjectivity in our decision making.

And with the advantage of hindsight did option 25 serve

those objectives?... I think it did. When you take it in

the broad I think it did.

Well, there's been a suggestion made that the boat Santo

Rocco Di Bagnara was a glaring example of a departure from

an equitable result because it, on the application of option

25's formula, came out a lot better that it had been under

the pre-existing regime. Knowing that do you still adhere

to the view that the objectives to which you've referred are

achieved by option 25?... Taken in the broad context I do.

I think that what we were looking at was that the - was the

period of time that we were given which was up until 89, to

have a look at the catches up until that period of time it

did achieve those objectives." (pp 72-73)

44. This evidence leaves me quite unsatisfied and causes me to revert to my original proposition - prima facie, there does not appear to be any reason for the adoption of option 25. When, as here, it produces such an absurd result, doubling one man's quota and giving him 18% of the TAC whilst reducing everybody else's, there is justification for judicial intervention to redress an understandable sense of injustice. In Kruse v Johnson (1898) 2 QB 91 Lord Russell of Killowen C.J. at pp 99-100 instanced certain examples where a court might interfere to condemn by-laws; one such example which could be appropriate to the facts of this case was where the by-laws "... were found to be partial and unequal in their operation as between different classes". Those views were approved by Isaacs J. in Ferrier v Wilson [1906] HCA 77; (1906) 4 CLR 785 at 801-802.

45. It was agreed by counsel that if I should favour the applicant's case I should merely publish my reasons; this I now do. I defer making orders to permit the parties to consider their respective positions. Either party is entitled to apply to relist the matter on 7 day's notice. I also reserve the question of costs.