Berith Pty Ltd Trading as Food Processing Equipment v Terence John Minogue No. SCGRG 91/2832 Judgment No. 3699 Number of Pages 3 Customs and Excise Commerce (Trade Descriptions)

[1992] SASC 3699

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(2), COX(1) AND MATHESON(3) JJ

CWDS
Customs and excise - commerce (trade descriptions) - Customs - Tariff Concession Order 8438.50 exempting "Filling machines, sausage, designed to automatically fill, portion and link" - machine imported that filled and portioned but did not link, or divide, sausages - machine's circuit board planned for linking process, and linking arm available as accessory - whether machine "designed" to link sausages.

HRNG ADELAIDE, 6 October 1992 #DATE 12:11:1992
Counsel for appellant:     Mr B F Beazley
Solicitors for appellant:    Andersons Barker Gosling
Counsel for respondent:     Ms S J Singh
Solicitors for respondent: Australian Government Solicitor

ORDER
Appeal dismissed.

JUDGE1 COX J In 1989 the appellant attempted to import a sausage-making machine into Australia. It was seized by the Customs because, they said, the appellant had not paid the proper duty. Three different proceedings were begun by the parties in the District Court of Adelaide, all raising the question whether the machine came within an exemption created by Tariff Concession Order 8438.50 made pursuant to Item 50 of Schedule 3 of the Customs Tariff Act 1987 (C/w), as amended - "Filling machines, sausage, designed to automatically fill, portion and link". It seems that all three matters were called on before the trial Judge and that the parties agreed that the disputed question should be decided as a preliminary issue. The learned Judge heard evidence and argument and resolved the question in favour of the Customs. The importer has appealed, by leave, in one of the matters against what was really an interlocutory order. We were told by counsel that the parties will regard this Court's interpretation of the tariff concession order as applicable to all three proceedings. 2. The machine in question was made in Spain. It is described as a Cato vacuum stuffer with doser, model ECVE in the Cato range. The machine compresses the sausage meat and extrudes a predetermined quantity into sausage casing. It performs those functions, filling and portioning, automatically but the operator then has to twist, or link, the individual sausages by hand in order to make the familiar chain of sausages. This is because the machine lacks a linking arm which will perform the dividing function automatically. It is possible, though with some trouble, to attach such a linking arm to this model. The question is whether the imported sausage-filling machine was, in the words of the concession order, "designed to automatically fill, portion and link" sausages. 3. The trial Judge heard evidence from a director of the appellant company who had seen these machines, with linking arm attached, at the factory in Spain. However, not all sausage manufacturers will need the linking device, and there was evidence suggesting that it was not the manufacturer's intention that the ECVE model should be used in Australia with a linking arm. Nevertheless, a suitable linking arm, with its own motor, could evidently be bought as an accessory from the manufacturer and a technician would be able to fit it to the machine. There was evidence from an expert that the electronic circuit board in the imported model was specially planned and wired to accommodate a linking arm. However, it was not just a matter, say, of screwing the arm into an available socket. Holes had to be drilled in the right position on the side of the machine and, according to the expert witness, a few hours' electrical work was needed to modify the machine to accept the automatic linking attachment. 4. The key word in the concession order is, of course, the word "designed". That would seem to bring in the notion of purpose or intention, but the cases show that this is not to be judged subjectively but according to the character and function of the machine. In Re Beautiful Day Pty Ltd and Collector of Customs (Queensland) (1977) 1 ALN No.8, the question was whether certain imported garments answered the description of a Customs tariff item that referred to "goods designed exclusively for use by men." There were competing submissions involving the manufacturer's intention and the use to which the garments were likely to be put. As to this the Administrative Appeals Tribunal said -
    "The criterion for classification depends upon the design,
    not use, of the garments. Design is not ascertained by
    enquiring from the designer as to his intentions. The test
    is an objective one which is capable of being applied at the
    port of entry and at the time of entry of the goods. Design
    is inferred from the appearance of the goods, judged by
    reference to the current modes of dress adopted by the sexes
    in Australia at the time of import. The material, colour,
    cut, decoration and get-up of the garments is relevant. The
    relevant modes of dress are those adopted in Australia, not
    overseas, and thus a garment designed for exclusive use by
    males in the country of origin may not necessarily be so
treated on importation into Australia." 5. See also, as to the relevance of the nature of the goods at the point of importation, Chinese Food and Wines Supplies Pty Ltd v. Collector of Customs (Vic) (1987) 72 ALR 591, at 599. 6. I do not think that the actual filling machine imported by the appellant could be said to be designed to link sausages automatically, or indeed at all. It was incapable of performing that function until a separate linking arm had been bought and fitted, and that would involve some hours' work from a competent technician. The machine was perfectly serviceable in its imported state. It is not as though it was somehow incomplete (cf. Reg. v. Clarke
(1986) 1 WLR 209) or that buying or using a sausage-filling machine in this form was abnormal. It simply meant that, if chains of sausages were wanted, the last step would have to be performed by hand. If instead the machines were required to make the larger sausages that are divided by clips, not by twisting, the linking arm would presumably be of no use, anyway. Obviously the imported machine was regarded by its manufacturer, as indeed by the appellant importer, as a normal and saleable piece of equipment, and in fact the evidence is that when the Customs eventually released it the appellant sold it, still without any linking arm, to a substantial smallgoods company in this State. 7. Mr Beazley, for the appellant, likened the situation to a motor car that has its engine and other components specially constructed to take an air-conditioner. The car will still be "designed" to include air-conditioning (so the argument ran) even though no air-conditioner is actually fitted to the car. But the way the proposition is stated really obscures the true question. The formula analogous to the concession order wording would rather be, "Is this particular motor car designed to cool, or 'air condition', the occupants?" I think the answer must be that it is not. No doubt it could be said that the car is designed to take an air-conditioner, but that is another matter. So here, there was a perhaps a sense in which the sausage-filling machine, as imported, was designed to take a linking arm, but the machine was not itself designed to link sausages. That was not its purpose or function. In my opinion, the learned trial Judge came to the correct decision. I would dismiss the appeal.

JUDGE2 KING CJ I consider that the appeal should be dismissed for the reasons given by Cox J.

JUDGE3 MATHESON J I agree that the appeal should be dismissed for the reasons given by Cox J.