Naomi Star Pty Limited -v- Minister for Fisheries [2001] NSWADT 77

CITATION: Naomi Star Pty Limited -v- Minister for Fisheries [2001] NSWADT 77 DIVISION: General Division APPLICANT PARTIES: Naomi Star Pty Limited RESPONDENT Minister for Fisheries FILE NUMBER: 993242 HEARING DATES: 15/05/2000 SUBMISSIONS CLOSED: 10/12/2000 DATE OF DECISION: 05/14/2001

BEFORE: Skinner PM - Judicial Member at 1 APPLICATION: Fisheries Management Act - fishing licence- endorsement on licence - Fishing licence - endorsement on licence MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Fisheries Management (General) Regulation 1995 Fisheries Management Act 1994 Virtu v Minister for Fisheries [2000] NSWADT 75 CASES CITED: Attorney-General (NSW) v Quin (1990) 170 CLR 1 Chief Constable of North Wales v Evans [1982] 1 WLR 1155 APPLICANT REPRESENTATION: C P O'Connor, solicitor RESPONDENT C Cory, solicitor ORDERS: 1 The reviewable decision is set aside; 2 In substitution, the Tribunal orders that the fishing boat licence for the boat 'Naomi Star', LFB 7097, shall as from 1 June 2001 be subject to a condition that the boat may be used to trawl for prawns in ocean waters more than three nautical miles from the baselines of the territorial sea, using not more than 60.0 metres length of headrope

1 This is an application by Naomi Star Pty Limited for review by this Tribunal of a decision by the respondent to impose a condition upon the commercial fishing boat licence which the applicant holds for the vessel Naomi Star, numbered LFB7097. 2 That condition provides that in being used to trawl for prawns in offshore ocean waters (ie. waters more than three nautical miles from the baselines of the territorial sea), the boat may not use nets with more than a total of 55.0 metres length of headrope. 3 The decision was notified by the respondent to the applicant in a letter dated 20 October 1998 from the then Director of Fisheries on behalf of the Minister. 4 After representations made directly to the respondent by the applicant through its solicitors, the decision was affirmed by the respondent in a letter to the applicant's solicitors dated 9 June 1999. After further representations by the applicant's solicitors to NSW Fisheries, the Department again affirmed the decision in a letter dated 21 September 1999. 5 The applicant then applied to this Tribunal for a review of the decision, by application filed 20 October 1999. 6 The matter came on for hearing before me on 15 May 2000. After taking evidence and hearing short oral submissions on that day, I received further detailed written submissions from both parties, up to 12 October 2000. Legislative and administrative scheme 7 The legislative and administrative scheme with which I have to deal in this case is comprised not only of the principal legislation (the Fisheries Management Act 1994 - 'the Act'), subordinate legislation (the Fisheries Management (General) Regulation 1995 – 'the Regulations') and the Licensing Policy of the Department, Version 2 issued November 1996 ('the Licensing Policy'), but also Management Rules issued by the Department, version 1.2 of September 1994 ('the Rules'). 8 Rights to trawl for prawns in offshore ocean waters of NSW were regulated by NSW Fisheries using the Rules, before the Act, the Regulations and the Licensing Policy commenced. That regulation was by means of conditions attaching to boat licences, rather than fishing licences, and as set out in the Rules. 9 When the Act, the Regulations and the Licensing Policy commenced, they continued the regulatory régime of the Rules for the Ocean Prawn Trawl Restricted Fishery defined by Division 2 of Part 8 of the Regulations. 10 Specifically, clause 178(2) of the Regulations provides: 178 Eligibility for endorsement (2) Offshore endorsement . A person is eligible for an offshore endorsement if the Minister is satisfied that the person owns a licensed fishing boat, or is the holder of a licence for a fishing boat that is in abeyance (under clause 149), and the fishing boat licence for the boat has an endorsement from the Director authorising prawn trawling in waters closed to prawn trawling under the fishing closure notification known as "OP1" 11 Part 8.0 of the Licensing Policy refers to 'Existing Managed or Restricted Fisheries' and relevantly provides: 8.4 Offshore Prawn Trawling. The offshore prawn trawl fishery currently encompasses NSW waters starting at 3 nautical miles from shore out to 4000 m isobath, extending from Barrenjoey Point to the Queensland border. A specific endorsement is required to use prawn trawl nets in this area. No additional boats are being endorsed. Transfer and replacement of authorised boats is subject to the provisions of the current management rules. Facts 12 In the hearing, the applicant called two witnesses in person and two by telephone, and the respondent called one Departmental officer, who adopted a lengthy statement, with relevant annexures, made by another senior officer. Various documents were tendered to me, and the respondent also filed with the Tribunal a full Statement of Reasons with annexures from the Departmental file. Extensive submissions were also made. From all of this material, I am satisfied of the following facts. 13 The applicant company was formed for the purpose of purchasing the fishing business comprised of the licensed fishing boat 'Naomi Star', its gear including nets, its catch history and the attached licenses and endorsements. This was a Recognised Fishing Operation ('RFO') under the Regulations. 14 The directors and shareholders of the applicant were and are Christopher Everson, his wife Julie Ann Everson, Harold Williams and his wife Margaret Williams. 15 The vendor of the business was Graham Owen, a licensed commercial fisher for many years, who had worked the Naomi Star since 1988. 16 Negotiations for the sale began in May 1998. At that time Mr Owen held a commercial fishing boat licence for the Naomi Star, in force until 11 April 1999, which allowed the use of nets with a maximum total headrope length of 63.5 metres. 17 The proposed purchase was a large commitment for the shareholders in the applicant company, involving the borrowing of money from a finance company. The shareholders provided cash flow projections to the finance company, based upon estimates of the amount of fish to be caught. 18 Those catch estimates were calculated assuming that the maximum headrope length for the net allowed to be towed by the Naomi Star after its purchase by the applicant would be 63.5 metres, as in the fishing boat licence for the Naomi Star which Mr Owen held at the time. 19 The headrope lengths for nets used on boats licensed to fish in the Offshore Ocean Prawn Trawl Fishery are prescribed by Part A7 of the Rules. 20 The applicant, through the Eversons at least, was aware of clauses A7.4 and A7.5 of the Rules, which provided as follows: A7.4 From 1 January 1995, the maximum headrope length for the fishery will be 60 metres, effective upon fishing boat licence renewal. A7.5 From 1 January 1995, any authorisation which is transferred, placed into abeyance or involved in an engine replacement will be subject to a maximum headrope length of 55 metres when a new licence is issued. 21 However, despite clause A7.4, the then current fishing boat licence for the Naomi Star held by Mr Owen authorised a maximum headrope length of 63.5 metres. This was clearly printed on the licence document, issued on 14 May 1998 and was displayed in large letters on the side of the Naomi Star. Mr Owen had held such a licence for several years, renewing it annually. 22 Tendered to me in the hearing was the 1994/1995 boat licence for the Naomi Star, issued to Mr Owen under the Fisheries and Oyster Farms Act 1935, and the 1995/1996, 1996/1997, 1997/1998 and 1998/1999 licences issued to him under the Act. 23 All of these licences authorised the Naomi Star to use nets with a maximum headrope length of 63.5 metres, except for the 1995/1996 licence, issued on 10 April 1995 and current to 11 April 1996. 24 Slightly different wording was used in each licence setting out the conditions including the headrope length, except for the 1997/1998 and 1998/1999 licences which were identical in the wording as to the conditions. In the 1994/1995 and 1995/1996 licences the maximum net length was typed in manually upon the pro-forma, whilst in the 1996/1997, 1997/1998 and 1998/1999 licences that figure was printed by the computer which printed the rest of the form. 25 Mr Owen gave evidence that when he received the 1995/1996 licence in April 1995 he telephoned the relevant fishery manager. He stated that this officer told him in effect that he could continue to fish with the 63.5 metre headrope nets that had been authorised by his previous yearly licence. Mr Owen accordingly continued to use the 63.5 metre nets, never changed the lettering on his boat, and in the three following years received licences reflecting the 63.5 metre length. 26 He stated that NSW Fisheries well knew that he used 63.5 metre nets and had on several occasions measured them during random inspections of his boat. 27 At the time of the negotiation of the sale of Mr Owen's RFO to the applicant it was clear that clause A7.4 of the Rules had not been applied to Mr Owen after 1995. 28 The Rules also provided in clause A7.6: A7.6 Whilst some authorisations may be allocated less than 33 net units [defined elsewhere in Part A7 to mean metres of headrope], no vessel is required to tow less than the net units contained within Table 2, effective upon fishing boat licence renewal. 29 Table 2 provided for minimum towable net units of 33.0 and 38.5 in different areas of the fishery. 30 This is an example then upon the face of the Rules themselves that what was prescribed in them was not necessarily to be put into practice by NSW Fisheries. 31 Further, this 38.5 metre provision in Table 2 was an increase from an existing limit of 33 metres, but shortly after publication of the Rules, in December 1995 all fishers in the Offshore Prawn Trawling Fishery had received letters advising that there was a moratorium on the increase until further notice. 32 Mr and Mrs Everson were experienced commercial fishers and owned and operated another boat in the ocean prawn trawl fishery. They were well aware of licensing requirements and the management of fisheries in NSW by way of guidelines and policies, and the contract of sale was not to be completed until confirmation of the Department's approval of the transfer of all components of the fishing business, including the boat licence. 33 Mrs Everson was spokesperson for the company and as such followed up the transfer application, and made other enquiries and checks with NSW Fisheries in respect of the entitlements of the RFO that the company was contracting to buy from Mr Owen. 34 Mrs Everson stated that Mr Owen had told her of the 1995/1996 boat licence providing for 60 metres headrope length and of the subsequent conversation he had with the fisheries manager. 35 She also stated that her husband had mentioned something about a possible reduction of headrope length to 55 metres and that she was aware of something in the Rules to that effect. 36 To check on these matters and to ensure that the applicant was indeed purchasing an entitlement to use nets with 63.5 metres of headrope, Mrs Everson made telephone enquiries of the Department. Alleged oral representations 37 Mrs Everson stated that from her own experience and that of other fishers of which she knew, she considered it quite normal practice to telephone New South Wales Fisheries for advice. She stated that indeed this form of informal communication was encouraged. She stated that although she had experienced delays in the past in her dealings with the Department she had never before obtained wrong information and she felt entitled to rely upon the telephone advices that she got. 38 Mrs Everson stated that it had always been her understanding that 'written fishery rules' were unreliable as 'many are never implemented'. 39 She gave recollections of telephone conversations with departmental officers, who she named. She stated that 'to the best of my recollection' she spoke to a particular officer, who she named, who in answer to a specific query as to whether the Naomi Star may have her net allocation reduced to 55 metres when bought by the applicant, told her 'No, there's no rule that we are aware of that will reduce her from the current 63.5 net allocation'. 40 She also gave evidence of a conversation with a second departmental officer, which while not directly confirming the earlier representation, was consistent with it. 41 The finance company officer also gave evidence in the applicant's case as to telephone enquiries made by him of NSW Fisheries about whether there were any encumbrances upon the boat licence. Although he stated that he would have expected to be told of any intended reduction in headrope length, he did not specifically enquire as to net size. 42 The respondent presented evidence to the effect that the officer named by Mrs Everson as making the first representation was not the appropriate officer to ask, which Mrs Everson should have known from various publications circulated widely in the industry; that there was no record in the Departmental files of the alleged conversations despite Departmental practice and training to record such matters; and that, in short, it was unlikely that the representation was made. 43 Without finding that the representation was not made, I find myself unable to accept the applicant's case that it was made. I accept the evidence and submissions put by counsel for the respondent against this finding. 44 Although I accept that Mrs Everson made telephone enquiries, and in the context and for the reasons as she stated, despite her firming up in her oral evidence as to the name of the officer the original statement of Mrs Everson is qualified by reference to the state of her recollection, and it is met by the evidence presented by the respondent as referred to above. 45 Also, although I accept the evidence of the finance company officer I do not accept that it establishes an oral representation upon which the applicant can rely, either standing on its own or as corroboration of the alleged representations to Mrs Everson. 46 I am also cognisant of the considerations to which I referred in Virtu v Minister for Fisheries [2000] NSWADT 75, at [67]-[76]. As I stated in Virtu and for the reasons there set out, there would need to be a high degree of satisfaction at the evidentiary level, and a finding of 'grave injustice,' before I would accept an alleged oral representation as binding upon a government department. In my opinion, although there may be circumstances in which the 'grave injustice' test is made out in respect of an oral representation, it is more difficult to be so satisfied where an aggrieved party has seen fit to conduct important business with a large and diverse government department through oral communications only. 47 Indeed the Licensing Policy commences on the first page with a warning, under a heading in bold and block letters to that effect, which inter alia states: 'Individuals who wish to take up commercial fishing or change their existing fishing businesses should discuss their proposals with NSW Fisheries and obtain written advice before making any financial commitment'. Written representation 48 The applicant however also complained that there had been a written representation made to it by NSW Fisheries, upon which it relied, which was subsequently sought to be avoided by the Department. 49 The evidence revealed that after a price was struck for the RFO between the parties in May and June of 1998, in early July NSW Fisheries was notified of the proposed sale with a request for the preparation of an Interim Transfer Agreement for execution by the parties. 50 The Department must prepare this document as it has attached to it the Validated Catch History ('VCH') print out, which is a fundamental component of the RFO and must be formally accepted as correct by the parties to the transfer of the RFO. 51 The documentation was received by the parties in late July, and executed by them and then returned to NSW Fisheries. However the contract for sale between the applicant and Mr Owen was not to be completed until the receipt by the applicant of a new fishing boat licence in its name on the same terms and conditions as that of Mr Owen – particularly allowing a maximum net headrope length of 63.5 metres. 52 Such a licence was issued on 18 August 1998, in force until 11 April 1999 - the same period as that of Mr Owen's which it replaced. Upon its receipt a few days later the parties to the sale completed the contract on 24 August 1998 in the office of the finance company by the payment of the purchase price, which was a substantial sum of money. 53 The evidence in the applicant's case, which I accept, was that the applicant would not have proceeded with the purchase, at least at that price, unless the fishing boat licence was in the terms as that issued to it on 18 August 1998. Critically, the received licence, upon which completion took place, had included the 63.5 metre headrope allowance. Administrative error 54 The letter of 20 October 1998 to the applicant from the Director of Fisheries was relevantly in the following terms: 'I am writing in regard to the Offshore Prawn Trawler "Naomi Star", LFB7097, recently transferred into your name. Under the current Ocean Prawn Trawl management rules any authorisation which is transferred, is placed into abeyance, or is involved in an engine replacement will be subject to a maximum headrope length of 55 metres when the new licence is issued. Due on [sic] oversight the net units on your transferred licence were not altered at the time of the transfer. Your reprinted boat licence has now been forwarded to the NSW Fisheries office at Maclean. Please contact the Fisheries Officer and arrange a meeting to swap your current licence for the altered one. I apologise for any inconvenience. It is your obligation as a holder of a commercial fishing licence to be fully aware of the regulations controlling your fishing activity.' 55 The reprinted fishing boat licence provided for a maximum headrope length of 55 metres, and was expressed to be in force, as before, to 11 April 1999. 56 The evidence in the respondent's case before me was that this 'oversight' was as the result of an administrative error in two respects. The first was that the computer database which had been set up in or about 1995, to be combined or 'merged' with the other pro-forma material for fishing boat licences so that they would be wholly computer printed as from 1996, had failed to take account of clauses A7.4 and A7.5 of the Rules. 57 However, Mr Owen had had three previous licences issued with this error, so the oversight in respect of the licence issued to the applicant on 18 August 1998 was the fourth in respect of the Naomi Star. 58 Also the wording of the licences issued to Mr Owen for 1996/1997 and 1997/1998 were quite different, as between themselves and also when compared with the 1995/1996 licence. On their face, someone responsible for their production had spent some time re-wording them. The oversight in respect of the database was therefore more than just momentary. 59 The other administrative error was in the process of issuing the 18 August 1998 licence to the applicant. The file had not gone to the relevant Fisheries manager for the Offshore Prawn Trawling Fishery who, it was the respondent's case, would have imposed the 55 metre limit. 60 However, the fact remains that a clear representation in writing was made to the applicant, upon which it acted. I accept that it suffered detriment as a result of the respondent's decision some two months later that the representation was incorrect. It had paid a higher purchase price for the RFO as a result of negotiations conducted upon the basis of the larger net, with finance obtained upon cash flow projections based on the larger net. 61 I do not accept the respondent's argument that it did not intend the applicant to act upon the representation, or know that it would. The licence was issued with conditions which the applicant was meant to follow. The correct statement in the letter from the Director dated 10 October 1998 that the applicant is obliged to be fully aware of the regulations does not however authorise the respondent to provide incorrect information. 62 The issue of the 18 August 1998 licence was in a context where the Department and indeed the Minister, because of a letter complaining of delays written directly to him by Mrs Everson, well knew of the proposed transfer of the RFO. The only rational view can be that the Department was aware that the applicant would rely on this new licence. 63 The actions of the applicant were also not unreasonable. The mode of completing the contract is quite usual conveyancing practice. Also, even if the Department was not aware of the incorrect licences issued to Mr Owen for the previous two years, there is other evidence of policies as published in the Rules not being applied, and the applicant was entitled to assume that this was but another example of that practice. The correct and preferable decision 64 Under s 63 of the Administrative Decisions Tribunal Act 1997 ('the Tribunal Act'), in determining this application for review of the decision of the respondent through his delegate as set out in the letter to the applicant dated 20 October 1998, I must decide what is the correct and preferable decision, having regard to the material before me and any applicable law. 65 In coming to the correct and preferable decision in this case I must 'have regard to' the law as to estoppel, which clearly is enlivened by the circumstances before me. 66 As cited in Virtu, above, at [71], in Attorney-General (NSW) v Quin, (1990) 170 CLR 1, Mason CJ said at p 17, citing abundant authority: The Executive cannot by representation or promise disable itself from, or hinder itself in, performing a statutory duty or exercising a statutory discretion to be performed or exercised in the public interest, by binding itself not to perform the duty or exercise the discretion in a particular way in advance of the actual performance of the duty or exercise of the power; and at p 18 he continued: What I have just said does not deny the availability of estoppel against the Executive, arising from conduct amounting to a representation, when holding the Executive to its representation does not significantly hinder the exercise of the relevant discretion in the public interest. And, as the public interest necessarily comprehends an element of justice to the individual, one cannot exclude the possibility that the courts might in some situations grant relief on the basis that a refusal to hold the Executive to a representation by means of estoppel will occasion greater harm to the public interest by causing grave injustice to the individual who acted on the representation than any detriment to that interest that will arise from holding the Executive to its representation and thus narrowing the exercise of the discretion. 67 I do not accept the respondent's argument that these considerations do not apply because of s 108(6) of the Act, which provides that: The Minister may, at any time by notice in writing to the holder of a licence for a boat, revoke or vary the conditions of the licence or add new conditions. This subsection does not apply to conditions prescribed by the regulations. 68 In any event, as I note above, the legislative and administrative scheme is not just the Act. Section 108(6) of the Act must be looked at in the context of the whole scheme. 69 I also have regard to the law as to negligent misrepresentation. 70 It may be that the applicant may have rights against the respondent, because of these laws, which it can enforce in other forums. However this Tribunal is not a court, and this is a merits review not judicial review. Within the provisions of the Tribunal Act I am reviewing, and entitled to change, the decision. I am not limited to a review of the decision making process, which is ordinarily the province of judicial review (see per Lord Brightman in Chief Constable of North Wales v Evans, [1982[ 1 WLR 1155, at 1173), nor only to remedies available to courts and in particular then to the intricacies of the law as to estoppel. 71 Under s 64(1) of the Tribunal Act I must give effect to any relevant Government policy in force as at 20 October 1998 except to the extent that the policy is contrary to law or the policy produces an unjust decision in the circumstances of the case. 72 In my opinion clauses A7.4 and A7.5 of the Rules constitute Government policy within the meaning of s 64(1). They are not contrary to law. However, in my opinion, the application by the respondent of clause A7.5 to the applicant as from 20 October 1998 was unjust in the circumstances of this case. 73 In my opinion, it was unjust for the applicant to have done everything a prudent purchaser could have done to ensure that its rights were protected prior to completing a substantial purchase, and to go ahead and complete upon the basis of the respondent's transfer condition not being applied to it, only to have imposed upon it two months subsequently that very condition, which directly affected the financial profitability of its venture 74 Further, in my opinion it would be unjust to now impose upon the applicant the 55 metre headrope length. In my opinion, in the circumstances the issue to the applicant on 18 August 1998 of the boat licence with the 63.5 metre headrope limit amounted to a representation that clause A7.5 of the Rules was not to be applied to the applicant, and the respondent should be held to that representation, which in good faith the applicant acted upon. 75 I think that this is 'correct and preferable' whether I arrive at that view under s 63 of the Tribunal Act by application of the principles of estoppel against the Executive expounded by Mason CJ in Attorney-General (NSW) v Quin, above, or by not applying Government policy because of an unjust result, pursuant to s 64 of the Tribunal Act. 76 However, the boat licence was only in force until 11 April 1999, and I do not think that its issue can be interpreted as a representation that clause A7.4 of the Rules would not be applied upon the renewal of the licence. 77 In my opinion neither can the past practice of the Department in not applying clause A7.4 to Mr Owen in 1996 and 1997 be relied upon by the applicant as such a representation to it. 78 The applicant has had to use 55 metre headrope nets for 18 months, until I ordered a stay on 15 May 2000. However, it to some extent kept its catch up by working for longer periods, and also it has had the enjoyment of a 63.5 metre condition for a 14 months, when it really was entitled to expect only some seven months under that limit before the Department exercised the 60 metre limit under clause A7.4. 79 I am conscious of the objects of the Act as set out in s 3, particularly to conserve the fishery resources of NSW, and the Government policy to limit the maximum headrope length for the fishery to 60 metres, as set out in clause A7.4 of the Rules. 80 In my opinion the correct and preferable decision to determine this application for review is that the fishing boat licence for the 'Naomi Star' shall now, subject to a reasonable opportunity for the applicant to adjust its nets and associated gear, be subject to a condition that it use not more than 60.0 metres length of headrope for its nets. 81 Accordingly I order as follows: 1. The reviewable decision is set aside. 2. In substitution, the fishing boat licence for the boat 'Naomi Star', LFB7097, shall as from 1 June 2001 be subject to a condition that the boat may be used to trawl for prawns in ocean waters more than three nautical miles from the baselines of the territorial sea, using not more than 60.0 metres length of headrope. I make no award as to costs.