Secretary of State for Foreign and Commonwealth Affairs v Quark Fishing Ltd.

A public authority need not invite representations before making a foreign-policy decision that limits the number of available licences. But, once applicants must compete for the limited licences by reference to comparative regulatory compliance, fairness ordinarily requires clear advance notice of the criterion, disclosure of the intended evidential basis, and a reasonable opportunity to make representations.

A settled practice may create a legitimate expectation that a factor, such as loyalty to a fishery, will be considered. It cannot be discarded without fairness and rational justification. A licensing decision must rest on a fair and reliable factual basis. A later direction which merely reinstates an allocation already quashed, without substantive reconsideration, is unlawful.

Quark Fishing Ltd sought a licence for its vessel, the Jacqueline, to fish for Patagonian toothfish in the South Georgia and South Sandwich Islands Maritime Zone. After advice from the Foreign and Commonwealth Office, only two of four United Kingdom or Overseas Territories-flagged vessels received licences. The Secretary of State subsequently directed the Commissioner to ensure that the Jacqueline was not licensed.

In earlier proceedings, the Supreme Court of South Georgia and the South Sandwich Islands quashed the Director of Fisheries’ original refusal and required a fresh decision. In the Administrative Court, Scott Baker J quashed the Secretary of State’s later direction. The Secretary of State appealed. The central issues were whether the selection procedure was fair, whether loyalty to the fishery was a relevant consideration, and whether comparative compliance data in CCAMLR Table 55 provided a lawful basis for refusing the licence.

1. Appeal dismissed unanimously. Laws LJ gave the judgment, with which Jonathan Parker and Aldous LJJ agreed. The Secretary of State’s direction remained quashed.

2. Section 5(1) of the South Georgia and South Sandwich Islands Order 1985 supplied the source of the Secretary of State’s power. Its exercise nevertheless remained subject to ordinary public-law standards. The foreign-policy decision to reduce the number of British-registered vessels to two did not require consultation or representations from affected operators.

3. However, the subsequent choice between the four British-registered candidates was different. It depended on their comparative compliance with CCAMLR measures. Fairness required that the operators be told that only two licences would be issued, the proposed criterion for selection, and the intended use of Table 55, and be given a timely opportunity to respond.

4. Past licensing practice had generated a legitimate expectation that loyalty to the fishery would be considered. The Secretary of State could not wholly disregard it, as between the four candidates, without first allowing representations and without a rational basis for doing so.

5. The Secretary of State had not given a fair and comprehensive account of the decision-making process. Applying the approach in Padfield [1968] AC 997, the court could draw an adverse inference where material reasons remained obscure or conflicted. The original allocation’s basis was unclear.

6. The direction of 7 June 2001 did not show a fresh substantive reconsideration after the original refusal had been quashed. Independently, Table 55 was an unfair basis for refusal. Its treatment of night setting was doubtful, its streamer-line criticism was largely technical, its entry on offal discharge in 2000 was wrong, and its comparison disadvantaged a vessel which had fished in earlier years. Each ground justified dismissal of the appeal.

• Court of Appeal (Civil Division): dismissed the Secretary of State’s appeal and upheld the quashing of the direction: [2002] EWCA Civ 1409.
• Queen’s Bench Division, Administrative Court: Scott Baker J quashed the Secretary of State’s direction on 5 December 2001. Permission to appeal was granted by the judge.
• Supreme Court of South Georgia and the South Sandwich Islands: in earlier proceedings, the Chief Justice quashed the Director of Fisheries’ original refusal to license the Jacqueline and remitted the matter for a fresh decision.