In Lamason v Australian Fisheries Management Authority  FCA 245, the Federal Court of Australia considered a challenge to the validity of a provision of a Commonwealth legislative instrument, the Eastern Tuna and Billfish Fishery Management Plan 2005 (the Plan).
The Eastern Tuna and Billfish Fishery is one of a number of fisheries managed by the Australian Fisheries Management Authority (AFMA). The Federal Court challenge concerned one aspect of a new management regime, introduced through the Plan, which effected a transition from regulating the take of certain species in the fishery by a system of annual fishing permits to a system based on Statutory Fishing Rights (SFRs).
The Plan was determined following an extensive consultation process. The method by which it allocated SFRs was to compare the values of different categories of existing fishing permits and to allocate SFRs to the holders of those permits according to their relative values. This relative value was based on factors such as the permit's authorised area of access and historical level of activity. The relevant provision of the Plan, section 32, contained a table which accorded a "Relative Price Factor" to each of the various categories of permits. The applicants, who were existing permit holders and eligible for a grant of SFRs under the Plan, sought a declaration of invalidity in respect of item 5 of the table, being the category of permit applicable to the permits they held. The applicants contended, as they had in earlier submissions made during the consultation process, that the Relative Price Factor for that category of permits was calculated in a way which resulted in the permits being undervalued. In particular, the applicants argued that it was derived by a method that was casual and imprecise, irrational, illogical, unreasonable and capricious, and was against the weight of evidence and submissions to AFMA.
The applicants further contended that item 5 of section 32 was not reasonably appropriate and adapted to attain AFMA's legislative objective of maximising economic efficiency in the exploitation of fisheries resources.
Spender J considered a line of relevant authorities concerning challenges to the exercise of statutory powers on the basis of unreasonableness or irrationality.
His Honour noted the distinction between the test of validity in cases involving legislative instruments and cases involving administrative decisions where administrative discretions are exercised. He observed that, in the case of a legislative instrument, the matter has to go even further than Wednesbury unreasonableness. Wednesbury unreasonableness is derived from Associated Provincial Picture Houses v Wednesbury Corporation  1 KB 223 and is the doctrine that operates to vitiate an administrative decision where, in general terms, there has been an abuse of discretion. It applies where a decision is so unreasonable that no similarly qualified decision maker would have made the decision.
His Honour applied the test for validity of delegated legislation adopted by Gummow J in Bienke v Minister for Primary Industries and Energy (1994) 125 ALR 151. There, Gummow J stated the question to be "whether there is a 'real connection' between the delegated legislation and the purpose for which the Parliament conferred the authority to make the law under challenge".
Accordingly, Spender J held that the question of validity in this case was:
"...whether the determination of the Management Plan goes beyond what could reasonably be adopted for the purpose of allocating statutory fishing rights in the Fishery and promoting the economic efficiency of the Fishery, it not being enough that the Court itself might think that the Plan as amended inexpedient or misguided..."
After carefully considering the provision of the Plan in question and the consultation process adopted in the formulation of the Plan, together with AFMA's legislative objectives, powers and functions, his Honour dismissed the application, finding that the evidence was strongly against the conclusion that the determination of the provision was not reasonably adapted to the achievement of AFMA's objectives under the Act.
His Honour observed that:
"... the evidence here merely underlies the fact that the determination of the Management Plan, including in particular item 5 of 32 was made after prolonged public debate, was legislative in character, turned on matters of fact and judgment, which involved expert knowledge and opinion. In my judgment, the [Allocation Advisory Panel] did not carry out its task irrationally or unreasonably, nor did the Authority."
His Honour ultimately held that, on the evidence, it was impossible to conclude there was no real connection between the Plan and the purpose for which Parliament conferred power on AFMA to determine the Plan.
The decision demonstrates the high threshold to be met by applicants who seek to invalidate delegated legislation on the basis of unreasonableness or irrationality. It confirms that where the validity of a legislative instrument, as opposed to an administrative decision, is challenged on the basis of irrationality or unreasonableness, it is not sufficient to demonstrate Wednesbury unreasonableness.
The Court has confirmed that where delegated legislation is under challenge, for an applicant to succeed, what is required is the absence of "a real connection" between the delegated legislation under challenge and the purpose for which Parliament conferred authority to make it.
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