Tasmanian Seafoods P/L v Peters [1999] QSC 144

4 The defendant held two licences in relation to the collection of trochus. The first was Master Pearler's Licence no. 126 issued pursuant to the Fisheries Act 1976 (Qld) and the other was Marine Parks Permit no. Q93004 issued pursuant to the Great Barrier Reef Marine Park Regulations (Cth) and the Marine Park Regulations (Qld). He also held a licence pursuant to the Fisheries Act with respect to the taking of beche-de-mer.

5 In October 1993 the plaintiff was interested in purchasing both a licence to collect trochus and a licence to collect beche-de-mer. Michael Joseph McEvoy, a marine broker, had a discussion with the defendant about the possible sale of his licences for $15,000 each. According to the defendant, on 2 December 1993 he signed two documents which had been faxed to him by Mr McEvoy. One was a deed of agreement which referred to the beche-de-mer licence and the other was the deed of agreement which is in dispute in this action. After signing these documents he faxed copies back to Mr McEvoy. The next day he photocopied them and sent four copies to the plaintiff's solicitors, as requested by Mr McEvoy. Mr McEvoy has deposed: "I personally witnessed the signature of the deed by the Defendant". Certainly it bears his signature as witness to that of the defendant, but if the defendant signed it in the circumstances he described, then Mr McEvoy must have appended his signature later.

6 The deed the subject of this action provided as follows:

A. The vendor is the holder of a permit to commercially collect trochus nilotizus ("trochus") issued by the Queensland Department of Primary Industry being permit No. Q93004 (herein called "the Permit").

C. The Vendor has agreed to sell and the Company has agreed to purchase all of the Vendors beneficial interest in the Permit on the terms and conditions herein contained.

D. The Permit will remain held in the name of the Vendor following the sale and the Vendor has agreed to hold the Permit on trust for the Company and on the terms and conditions herein provided.

1. The Vendor agrees to sell and the Company agrees to purchase free from all encumbrances all that the Vendor's right title and interest in the Permit including and without limiting the generality hereof all or any additional or extra or exploratory permits licenses developmental licenses quotas units or other rights licenses or privilege attaching to or issued or offered in respect to the Permit now or at any time hereafter as a consequence of the Vendor holding the Permit or authorising the Vendor to catch and sell beche-de-mer.

2. The purchase price for the Permit shall be the sum of FIFTEEN THOUSAND DOLLARS ($15,000.00), the purchase price shall be payable within seven (7) days of the date of signing this Contract.

6. The Vendor further warrants that all licence fees, payments, returns, permits and forms have been paid or completed to the satisfaction of the Queensland Department of Primary Industry and that there are no outstanding charges or restrictions on the Permit other than herein disclosed which shall hinder or prevent the Company from the absolute and unfettered and unrestricted use of the Permit other than those restrictions lawfully imposed by the Queensland Department of Primary Industry.

Following completion, the Vendor shall hold the Permit on trust for the Company and the Vendor must, without the limiting of generality of this trust;

(i) transfer the Permit to the Company upon the Permit becoming transferable;

(ii) revoke all existing permits, nominations to allow any other person to collect beche-de-mer pursuant to the Permit or otherwise use the Permit;

(iv) hold any permit issued in addition, substitution or amendment to the Permit on trust for the Company."

By clause 7 the defendant appointed the plaintiff and its principal executive officer as its attorney.

7 The first issue is that relating to errors in the text of the document - the reference to permit no. Q93004 in recital A and the references to beche-de-mer in clauses 1, 6(ii) and 7. Counsel for the plaintiff submitted that upon its proper construction the deed was referring to Master Pearler's Licence no. 126 and that the references to beche-de-mer should be read as references to trochus. Alternatively, he submitted that these errors could be corrected by rectification.

8 There was no "permit to commercially collect trochus nilotizus ... issued by the Queensland Department of Primary Industry being permit No. Q93004". The licence to collect trochus was indeed issued by the Queensland Department of Primary Industries. The permit no. Q93004 was not issued by that department but by the Great Barrier Reef Marine Park Authority and the Queensland National Parks and Wildlife Service. The licence issued by the Department of Primary Industries allowed searching for and taking of trochus for a commercial purpose whereas the other permit related to the use and entry of zones in marine parks for the commercial collection of trochus. In my view it is clear that the parties meant the licence to take trochus for commercial purposes issued by the Queensland Department of Primary Industries. In other words the maxim falsa demonstratio non nocet cum de corpore constat applies, and as a matter of construction, recital A should be read as if the words "being Permit No. Q93004" were deleted and, if necessary, as if the words "being Master Pearler's Licence No. 126" were inserted in lieu thereof. See Fitzgerald v Masters[1956] HCA 53; (1956) 95 CLR 420 at 426-427. See also Lewison K, Interpretation of Contracts, 2nd ed, Sweet & Maxwell, London, 1997, para 8.05.

9 What then of the references to beche-de-mer in the body of the deed? The agreement is to be construed as a whole and in the light of the circumstances surrounding its making. Recital A contains a definition of the subject matter of the deed. It is proper, therefore, to regard it as controlling the operative part of the deed at least insofar as it defines the subject matter of the permit, the beneficial interest in which was being sold. One very relevant circumstance is that contemporaneously with the execution of this deed a document was executed with respect to the licence to take beche-de-mer. In accordance with the principle in Fitzgerald v Masters, the document should be so construed that beche-de-mer is read as trochus.

10 Accordingly, it is not necessary to consider rectification.

11 The parties recited in the agreement that the licence was then non-transferable. Their intention, as expressed in the deed, was that the defendant should hold the licence (and any issued in addition to, substitution for or amendment of it) on trust for the plaintiff until such time as it became transferable. See cl.6(i) and (iv). The licence for the period from 1 January 1993 until 31 December 1993 was in evidence, and there was evidence that it was regularly renewed. New legislation, the Fisheries Act 1994, commenced on 27 January 1995. It replaced the licences with authorities and by a transitional provision, s.233, provided that the licence under the former Act should continue in force as if it were an authority under the new Act. There were subsequent renewals of the authority under the new legislation. On 31 December 1996 the authority issued under the new legislation expressly became transferable by the operation of the Fisheries Amendment Regulation (No 5) 1996.

12 On 19 February 1997 the plaintiff submitted a transfer to the defendant for execution. Upon receiving no response, on 24 March 1997 it attempted to effect a registration of the transfer using the power of attorney conferred pursuant to cl.7 of the deed. The Queensland Fisheries Management Authority (which is responsible for transfers under the new legislation) refused to give effect to the transfer without the authorisation of the defendant. Subsequently the defendant entered into an agreement to sell the authority to a third party. The Queensland Fisheries Management Authority refused to effect that transfer because of the prior lodgment of an application for transfer by the plaintiff. On 1 April 1998 Mr Justice Lee granted an injunction preventing the defendant from dealing further with the authority.

13 The licence was issued pursuant to the Fisheries Act 1976 which was concerned with the management of the fishing industry and the protection, conservation and management of fisheries resources. When first enacted, it dealt with Commercial Fishing (Part III), Oystering (Part IV) and Pearling (Part V) as well as Coral, Coral Limestone and the Like (Part VI), Processing of Marine Products (Part VII) and the Management and Protection of Fisheries Resources (Part VIII). Subsequently, the part dealing with commercial fishing was repealed and that was dealt with in other legislation, and Part VIA - Commonwealth-State Management of Fisheries was inserted.

(a) shall not search for or take for a commercial purpose ... trochus or have in possession at a place where pearling is carried on any of those things;

unless he is the holder of a master pearlier's licence ..."

"30. Licensing of person and vessels for pearling. (1) The Minister may grant and issue licences of the several descriptions following:-

(c) shall be in force for a period not exceeding 12 months;

(d) shall be subject to such terms, conditions or restrictions as are prescribed and such further terms, conditions or restrictions as the Minister in a particular case thinks fit, inserted therein or endorsed thereon;

(e) shall, in the case of a licence referred to in subsection (1), authorize the holder to do such acts and things as are prescribed with respect thereto;

15 The Minister might cancel, revoke or suspend the licence under s.80 which provided (so far as relevant):

"80. Cancellation, revocation or suspension of licence or other authority.

(1) The Minister at any time during the currency of a licence, permit, certificate or other authority granted and issued under this Act-

(b) may suspend for such period as he thinks fit (not exceeding the balance of the term thereof),

that licence, permit, certificate or other authority if-

(c) it was issued in error or granted in consequence of a false or fraudulent document, statement or representation;

(i) is convicted of an offence against this Act, the Fishing Industry Organization and Marketing Act 1982 or, in relation to any apparatus, fish, marine product or fishing vessel, The Criminal Code;

(ii) fails to comply with any term or condition thereof;

(e) there has been a substantial change of circumstances since the grant thereof; or

(f) for any other reason the Minister is of opinion that the holder is not a fit and proper person to hold it or that it is in the interests of the fishing industry to do so.

(2) A cancellation, revocation or suspension under this section-

(a) shall not be questioned in any proceeding whatever;

(b) does not confer upon the holder a right to compensation.

16 Under the Fisheries Regulations 1977 (made pursuant to s.91 of the Act):

"D.1 Licences. A master pearler's licence shall authorise the holder thereof-

(i) to search for and to take for a commercial purpose pearls, pearl-oysters, pearl shells, green snails or trochus or to have in possession at a place where pearling is carried on any of those things; and

(ii) to employ in pearling and have in charge a pearling vessel."

17 The licence in question contained four pages of conditions and geographical limitations. The conditions included the size of the trochus which could be taken, the vessel which was to be used (the "Crested Tern"), the total quantity that could be taken, the method of taking, the records to be kept and procedures for inspection of the take.

18 Unlike other licences (eg an oysterer's licence: s.25, licences in respect of vessels: ss.25 and 37 and a marine products factory licence: s.37), a master pearler's licence was not expressed to be able to be transferred. I consider that there was an implied prohibition on transfer of a master pearler's licence.

19 The court cannot grant specific performance unless the licence was property capable of being the subject of a trust. If the licence was property, was the beneficial interest alienable, even if the legal interest was not? The plaintiff's counsel submitted that the legislation was directed at ensuring that the licensee exploited the fishery responsibly and that it was not directed at or concerned with who got the benefit of the fruits of that exploitation; in other words, that there was no implied barrier to the transfer of the beneficial interest.

20 In Australian Capital Television Pty Ltd v The Commonwealth [1992] HCA 45; (1992) 177 CLR 106 at 165-66, Brennan J said:

"In Reg. v. Toohey; Ex parte Meneling Station Pty. Ltd.[1], Mason J. cited with approval the definition of property given by Lord Wilberforce in National Provincial Bank Ltd. v Ainsworth[2]:

`Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.'

`Assignability is not in all circumstances an essential characteristic of a right of property. By statute some forms of property are expressed to be inalienable. Nonetheless, it is generally correct to say, as Lord Wilberforce said, that a proprietary right must be "capable in its nature of assumption by third parties".'

Although property is generally assignable, that is not universally so for, as Isaacs J. said in Commissioner of Stamp Duties (N.S.W.) v. Yeend, `[a]ssignability is a consequence, not a test' of a proprietary right[4]. Assignability may therefore be denied to what is, by other tests, properly found to be property. Nonetheless, the want of assignability of a right is a factor tending against the characterization of a right as property."

21 It is not insignificant that the Act itself contemplated that there might be "an interest in" a licence or permit: see s.16 which provided:

"16. Prohibition in respect of acquiring or holding interest. An inspector shall not acquire or hold an interest in a licence, permit, certificate or other authority granted and issued under this Act or a contract or agreement with respect to taking or farming any fish or marine product for a commercial purpose."

22 Counsel for the plaintiff referred me to a number of cases dealing with fishing licences in other jurisdictions: Harper v Minister for Sea Fisheries & Ors [1989] HCA 47; (1989) 168 CLR 314; Kelly v Kelly (1990) 64 ALJR 234; Pennington v McGovern (1987) 45 SASR 27, Austell Pty Ltd v Commissioner of State Taxation (WA) (1989) 20 ATR 1139 and Fitti v Minister for Primary Industries and Energy & Anor (1993) 40 FCR 286. In all those cases apart from Fitti and Harper, the relevant licence was able to be transferred subject to the consent of a Minister or statutory authority. In Fitti, the licence could be transferred without consent and transferability was not considered in Harper.

23 Harper was concerned with the question whether a licence fee was a tax or an excise. Mason CJ, Deane and Gaudron JJ described a licence to fish for abalone in these terms at p. 325:

"In that context, the commercial licence fee is properly to be seen as the price exacted by the public, through its laws, for the appropriation of a limited public natural resource to the commercial exploitation of those who, by their own choice, acquire or retain commercial licences. So seen, the fee is the quid pro quo for the property which may lawfully be taken pursuant to the statutory right or privilege which a commercial licence confers upon its holder."

"When a natural resource is limited so that it is liable to damage, exhaustion or destruction by uncontrolled exploitation by the public, a statute which prohibits the public from exercising a common law right to exploit the resource and confers statutory rights on licensees to exploit the resource to a limited extent confers on those licensees a privilege analogous to a profit à prendre in or over the property of another. A limited natural resource which is otherwise available for exploitation by the public can be said truly to be public property whether or not the Crown has the radical or freehold title to the resource. A fee paid to obtain such a privilege is analogous to the price of a profit à prendre; it is a charge for the acquisition of a right akin to property."

The court concluded that it was not a tax and not an excise.

24 In Kelly's case the court determined that an abalone authority could be partnership property (although it was not in the circumstances of the case). The court focused on the transferability of the licence, albeit subject to consent. At p.236 the court said:

"Whatever the position with the abalone permit, there can be no doubt that the abalone authority gave rise to valuable rights which were capable of being held for the partnership in such a way as to constitute partnership property: see Ambler v Bolton (1872) LR 14 Eq 427; O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310. Despite the fact that it could only be done indirectly and with the consent of the Director of Fisheries, it was plainly possible to make what was effectively the transfer of an authority for consideration, thus enabling a value to be placed upon it. This was so, notwithstanding that there were certain requirements in respect of an abalone authority which were personal to the holder, such as the requirement that he be medically fit to dive."

25 In Pennington, the South Australian Full Court determined that a fishing licence held pursuant to that State's Fisheries Act was a proprietary interest capable of being the subject matter of a trust. At p.32 King CJ focused on provisions as to the contemplated value and transferability of the licence and as to the right to hold it notwithstanding that its exercise was subject to the direction and instructions of others.

26 In Austell, the Western Australian Supreme Court held that a fishing licence under that State's legislation and the rights conferred by it were proprietary in nature and within the definition of "property" in the Stamp Act. This was so notwithstanding that the transfer was subject to consent.

27 In Fitti, the Federal Court held that licences to fish and units held under a plan of management for prawn fishing in the Gulf of Carpentaria pursuant to s.20 of the Fisheries Act 1952 (Cth) were property classified as property. Accordingly any proposed reduction in the number of units held by a fisherman had to be on just terms under s.51(xxxi) of the Constitution.

28 In my view, the licence in question in the present case did have the character of property. There was an implied prohibition on transfer of the legal title, but no such implied prohibition on transfer of the beneficial title. Accordingly, it could be the subject of a trust. The annual renewal of the licence did not change its identity. Nor did the repeal of that legislation and the subsequent issue of authorities under the new legislation. See Pennington at p.31.

29 The next question is whether specific performance ought to be ordered in the circumstances.

30 In correspondence emanating from the defendant and his solicitors, the defendant disputed that he was ever paid the $15,000 referred to in the deed. (Affidavit of M.A. Jonsson filed 25 March 1998 para.14.) The plaintiff claims that the purchases were funded through payments made to Mr McEvoy and credit from Mr McEvoy arising from an earlier transaction. The plaintiff relies on an authority Mr McEvoy says was given to him by the defendant to pay the relevant moneys to one Ian Wakelin. The authority relied on was in the following form:

COULD YOU PLEASE SIGN THE FOLLOWING STATEMENT AUTHORISING US TO PAY TO CRESTED TERN JOINT VENTURE THE FIFTEEN THOUSAND DOLLARS FOR THE SALE ? LEASE OF YOUR TROCHUS BECHE DE MER PERMIT.

I BRETT W PETERS HEREBY AUTHORISE BEN LEXCEN MARINE TO PAY ALL THE FUNDS OWED TO ME ($15,000[)] TO IAN WAKELIN OR HIS NOMINEE."

The document is dated 9 December 1993 and is signed "Brett Peters". To the defendant's knowledge, Mr McEvoy held a "Ben Lexcen Marine" franchise. Mr McEvoy states that the purchase price was paid in two payments made by him to the bank account of Ian Wakelin in accordance with this authority.

31 On 1 April 1998 in the injunction application before Mr Justice Lee, the plaintiff agreed to pay into court $20,000 "on account of the purchase price and interest thereon if the defendant is ultimately successful upon that issue".

32 On the evidence placed before me at the trial, I find that the authority was valid and that the plaintiff paid the $15,000 by making payments (in accordance with the direction) to Ian Wakelin.

33 In all the circumstances, the plaintiff is entitled to specific performance of the agreement, and to an account of profits as from 9 May 1994 (7 days after the date of the deed).

34 I shall ask counsel for the plaintiff to submit a draft order.

[1] [1982] HCA 69; (1982) 158 C.L.R. 327, at p. 342.

[2] [1965] UKHL 1; [1965] A.C. 1175, at pp. 1247-1248.

[4] [1929] HCA 39; (1929) 43 C.L.R. 235, at p. 245.