Brambles Australia Limited and Secretary, Department of Industry, Tourism and Resources
[2003] AATA 1032
•13 October 2003
CATCHWORDS – Automotive Competitiveness and Investment Scheme
– registration as an Automotive Service Provider – supply of returnable packaging system - whether applicant is a provider of automotive services – whether services of applicant are production services and so automotive services – whether services provided related to motor vehicles engines, engine components, automotive comments, automotive machine tools or automotive tooling - consideration adjourned.
ACIS Administration Act 1999 ss. 3, 6, 7, 14, 14A, 19, 20, 23, 24, 26, 53 and 54
ACIS Administration Regulations 2000 rr. 8 and 9
ACIS (Unearned Credit Liability) Act 1999
Acts Interpretation Act 1901 s. 15AA
Elazac Pty Ltd v Commissioner of Patents (1994) 125 ALR 663
Faywin Investments Pty Ltd v Federal Commissioner of Taxation (1989) 89 ALR 599
Cosco Holdings Pty Ltd and Commissioner of Taxation (AAT 12219B, 16 December, 1998)
McNicol v Pinch [1906] 2 KB 352
WEA Records Pty Ltd v Federal Commissioner of Taxation (1990) 96 ALR 365
Commonwealth v Genex Corporation Pty Ltd (1992) 176 CLR 277
M.P. Metals Pty Ltd v Federal Commissioner of Taxation (1967-68) 117 CLR 631
Federal Commissioner of Taxation v Jack Zinader Pty Ltd (1949) 78 CLR 336
Commissioner of Taxation v Jax Tyres Pty Ltd (1984) 5 FCR 257
Re Transplant and Breeding Services Pty Ltd and Australian Industrial and Development Incentives Board (1983) 5 ALN N94
IW v The City of Perth and Others (1997) 191 CLR 1
Ryde Municipal Council v Macquarie University (1978) 23 ALR 41
Randwick v Rutledge (1959) 102 CLR 54
Returned Services League of Australia (Victorian Branch) Inc and Anor v Latrobe Shire Council [2001] VSCA 122
DECISION AND REASONS FOR DECISION [2003] AATA 1032
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2002/404
GENERAL ADMINISTRATIVE DIVISION )
Re BRAMBLES AUSTRALIA LIMITED
Applicant
And SECRETARY, DEPARTMENT OF INDUSTRY, TOURISM AND RESOURCES
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Mr C Ermert (Member)
Mr W G McLean (Member)
Date: 13 October, 2003
Place: Melbourne
Decision:The Tribunal concludes:
1.that Brambles is not a provider of automotive services; and
2.adjourns further consideration to a date to be fixed.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 17 April, 2002, the applicant, Brambles Australia Limited (“Brambles”), applied for review of a decision of a delegate of the respondent, the Secretary of the Department of Industry, Tourism and Resources (“the Secretary”) dated 15 March, 2002. That decision was to refuse an application by CHEP Australia (“CHEP”) for registration for the Automotive Competitiveness and Investment Scheme (“ACIS”) as an Automotive Service Provider (“ASP”) made pursuant to s. 26(3) of the ACIS Administration Act 1999 (“Administration Act”).
At the hearing, Brambles was represented by Mr Cavanagh QC with Mr Fleming of counsel and the Secretary by Mr Hanks QC with Mr De Zilwa of counsel. Regard was had to the documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”). A statement, with 20 exhibits, by Mr Michael Peter Matthews, the General Manager of the Automotive Services Division of CHEP, was admitted in evidence. An order was made at the hearing restricting access to that statement and exhibits as well as Mr Matthew’s oral evidence relating to pricing issues to members and staff of the Tribunal, the parties and their representatives and the staff of Auscript. Mr Matthews also gave oral evidence.
THE ISSUES
It was agreed between the parties that the Tribunal would consider only one of the potential issues between them. That was whether Brambles is eligible to be registered as an Automotive Service Provider on the basis that it is a provider of production services and so of automotive services within the meaning of the Administration Act.
THE APPLICATION FOR REGISTRATION
On 28 September, 2001, Brambles, in the name of CHEP, applied for registration as an ASP. When asked to describe the main function of its main shareholder, CHEP stated that “Brambles is a global industrial services provider” (T documents, page 41). It said in a covering letter that its Automotive Services Division:
“… provides arrange (sic) of supply chain logistics services to the Automotive Industry. These services are specifically designed for the Automotive Industry, aimed at assisting the industry in its production activities to ensure efficiencies in the movement of product, and the systems that govern these activities.” (T documents, page 13).
CHEP revealed the total production value of automotive services that it had provided in Australia during the previous 12 months and that related to the production of motor vehicles or original equipment (T documents, page 36).
In a further letter dated 24 October, 2001, CHEP stated that it believed that the services that it provides to the automotive industry are “production services” and so “automotive services” within the meaning of r. 9(2) of the ACIS Administration Regulations 2000 (“Regulations”). It elaborated upon this:
“CHEP’s services are integral to the efficient working of the production systems of three of the four Australian automotive manufacturers. CHEP works with automotive component manufacturers and vehicle manufacturers by providing a returnable packaging system which includes the:
Supplying of industry standard returnable containers and crates; and
Designing and providing stillages that are custom made for the customer’s manufacturing process.
These stillages must be designed to the manufacturer’s specifications so that their interaction with the production process is optimised. For example, CHEP is currently working with Vectra, the firm charged with designing the production process for the new Holden V6 engine plant, to design the purpose built stillages to be used in this new state-of-the-art plant. Stillages for this project must be designed with a wide range of the customer’s production requirements in mind including:
the production system being used (eg. Kanban)
damage minimisation;
efficient movements from process to process;
ergonomic considerations;
space constraints;
compatibility with machinery and plant layout;
compatibility with product; and
any other requirements that the customer may specify.
Through the supply of our Returnable Packaging System CHEP then becomes an integral part of the manufacturer’s production system, by ensuring that our products are in position in the correct quantities and as they are required by the manufacturer. The production services we provide are critical to the efficient flow of production throughout the automotive manufacturing supply chain, an interruption to the flow of our products to and from the production line would be just as damaging as, say, an interruption in the supply of a particular component in the production line.” (T documents, pages 46-47)
In a further letter dated 9 November, 2001, CHEP gave further information as to the income it derived from its supply in relation to the production of motor vehicles or original equipment through the supply of intermediate bulk containers, plastic crates, plastic collapsible containers, metal stillages and customised dunnage. CHEP further stated that it operates a pool of plastic crates and customised inserts numbering approximately 662,800 units for the automotive industry. The items in this pool are replaced as they are scrapped and are added to in order to meet increased demand for its product. It went on to give details of the products it purchased for use by particular motor vehicle manufacturers.
LEGISLATIVE BACKGROUND
From 1 January, 2001, ACIS was established by the Administration Act. Section 3 states that the purpose of the Administration Act:
“… is to provide transitional assistance to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation.”
ACIS provides incentives in the form of what the Administration Act describes as “duty credits”. A “duty credit” is a “… modulated capped production credit, modulated uncapped production credit, or modulated investment credit that has been entered in the ACIS ledger” (s. 6(1)). Duty credits can be used to offset Customs duty on eligible imports. Rebates or refunds can also be obtained in exchange for duty credits. Duty is levied and acquitted when goods are entered for home consumption.
Section 53(1) caps at $2 billion the amount that the Secretary may enter in the ACIS ledger in respect of modulated capped production credit and modulated investment credit. In determining the amounts entered in the ledger, the Secretary must also take into account particular amounts received, or likely to be received, by the Commonwealth by way of liability imposed under the ACIS (Unearned Credit Liability) Act 1999 as well as amounts received, or likely to be received, as offsets of particular duty credit against this liability (s. 53(2)). Section 54 provides for a sales cap on participants.
Motor Vehicle Producers (“MVPs”), Automotive Component Producers (“ACPs”), Automotive Machine Tool, Tooling Producers (“AMTPs”) and ASPs, who are known collectively as “participants” if they are registered under the Administration Act (s. 6(1)), are able to claim duty credits according to the provisions of that legislation. Subdivision A of Division 3 of Part 2 of the Administration Act sets out the rules regarding registration while Subdivision B is concerned with particular applications for registration. Rules regarding registration include rules about the number of registrations that a person may have under ACIS (s. 14). Unless an applicant has been given permission by the Minister to apply under s. 20, the Secretary must not grant an application for registration under s. 26 unless satisfied that registering the applicant would further the purpose set out in s. 3 of the Administration Act (s. 14A(2)). That is so “even if an applicant to whom … [s. 14A] applies meets the requirements for registration under ACIS …” (s. 14A(2)). In the context of an ASP, the words “requirements for registration under ACIS” mean “… all of the registration requirements applicable to an applicant to whom this section applies including the requirements set out in … paragraph 19(1)(a) or (b)” if the applicant is applying for registration as an ASP (s. 14A(3)(e)).
Subdivision B of Division 3 is concerned with applications for registration. Of relevance in this case is s. 19, which is concerned with the registration of ASPs. Under that section, a person may apply for registration as an ASP if he, she or it is a provider of automotive services and if one of three circumstances is applicable. The expression “automotive services” is defined to mean “… design, development, engineering or production services of a kind declared by the regulations to be automotive services for the purposes of this Act” (s. 6(1)).
The effect of rr. 9(1) and (2) of the Regulations is that, subject to r. 9(4)), the kinds of services declared to be automotive services for the purposes of the Administration Act are:
“design, development, engineering or production services for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling, relating solely to:
(a)design, development, engineering or production, including normal design functions; or
(b)development activities, including the manufacture of prototypes and testing; or
(c)the development and installation or purpose-designed systems for quality assurance and process control; or
(d)the layout design of production equipment.” (r. 9(2))
The qualification in r. 9(4) and the provisions of rr. 9(3) and (5) are not relevant in this case.
The expression “automotive machine tools”, to which reference is made in r. 9(2), is defined in r. 8(1) as, subject to r. 8(5), those in r. 8(2) of the Regulations. Regulation 8(2) provides that the kind of machine tools that are “automotive machine tools” are:
“… machine tools:
(a)that are designed and built to be used solely for:
(i)the production of motor vehicles, engines, engine components or automotive components; or
(ii)facilitating the provision of automotive services; or
(b)that, when used with interchangeable tooling, are used solely or mainly for a function mentioned in paragraph (a).”
Regulations 8(3) and (4) are also relevant in that they provide that:
“(3) Without limiting subregulation (2), machine tools of a kind mentioned in that subregulation include machine tools for the following functions:
(a)cutting, welding, or forming materials;
(b)casting, forging, moulding and extrusion;
(c)heat treatment;
(d)surface finishing;
(e)assembly;
(f)measuring or testing.
(4)Also machine tools of a kind mentioned in subregulation (2) include machine tools for handling physical inputs that are integral to the production process.
Example for subregulation (4)
A robotic arm that loads blanks into a stamping machine.”
Regulation 8(2) is, however, qualified by the operation of r. 8(5), which provides:
“However, machine tools of a kind mentioned in subregulation (2) do not include the following:
(a)Machine tools for the production of raw materials;
(b)Machine tools that are ordinarily hand-held;
(c)stillages (other than stillages that are purpose-built for automotive production) or other passive storage equipment.”
The word “production” has the meaning given to it by s. 7 (s. 6(1)). When reference is made to that section, though, it is seen that it is not “production” whose meaning is given but when a person is “taken to produce” a thing or when certain things are “taken to have been produced in Australia”:
“(1) For the purposes of this Act, a person is taken to produce a thing even if the process of production consists entirely of assembling the thing from component parts and the person does not produce any of those component parts.
(2)For the purposes of this Act, a person is taken to produce a thing only at the time when the person sells the thing produced.
(3)Subject to subsections (1) and (2), an engine is taken to have been produced in Australia if:
(a)the fitting of the crankshaft into the engine is carried out in Australia; and
(b)the engine has passed final quality control at the end of a production line in Australia.
(4)Subject to subsections (1) and (2), a motor vehicle is taken to have been produced in Australia if the motor vehicle:
(a)has undergone a process of colour coated painting in Australia; and
(b)has passed final quality control at the end of a production line in Australia.
(5)Subject to subsections (1) and (2), an engine component is taken to have been produced in Australia if:
(a)at least one substantial process in the manufacture of the component is carried out in Australia; and
(b)the component has passed final quality control at the end of a production line in Australia.
(6)Subject to subsections (1) and (2), an automotive component, an automotive machine tool or automotive tooling is taken to have been produced in Australia if:
(a)at least one substantial process in the manufacture of the automotive component, automotive machine tool or automotive tooling is carried out in Australia; and
(b)the automotive component, automotive machine tool or automotive tooling, as the case requires, has passed final quality control at the end of a production line in Australia.
(7)An automotive service is taken to have been provided in Australia if:
(a)the design, development, engineering or production work comprising that service is carried out predominantly in Australia; and
(b)payment has been received for carrying out the service.”
The word “services” is defined in s. 6(1) to mean “includes the provision, grant or conferral of any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities under a contract, for which remuneration is payable in the form of a royalty or similar exaction.”
The first of the three circumstances specified in s. 19 requires that, in the 12 months preceding the application, the production value of automotive services provided by that person in Australia was at least $500,000 and at least 50% of that production value was for services related to the production of motor vehicles or original equipment (s. 19(1)(a)). The second circumstance applies if the first does not. It requires that the person is able to demonstrate, to the satisfaction of the Secretary, that in the 12 months following the application, the production value of automotive services proposed to be provided by that person is likely to be at least $500,000 and at least 50% of that production value was for services related to the production of motor vehicles or original equipment (s. 19(1)(b)). The third circumstance applies if neither of the first two circumstances applies. That circumstance arises if the Minister has, under s. 20, given the person permission to apply for registration as an ASP (s. 19(1)(c)).
A person who wishes to apply for registration as an ASP must fulfil the formal requirements set out in s. 23 in relation to the content of the application and must lodge that application in accordance with s. 24 and after the Administration Act commenced on 30 December, 1999. The Secretary must then examine the application pursuant to s. 26. Section 26(2) sets out the criteria of which the Secretary must be satisfied in considering the application. If he is satisfied of each, he must grant the application. The only criterion that is relevant in the context of this case is that in s. 26(2)(a), which provides that the Secretary must be satisfied “that the applicant is eligible to apply for that registration”. If the Secretary is not satisfied of a matter set out in ss. 26(2)(a) to (g), the Secretary must inform the applicant that the application is refused and provide reasons for that refusal (s. 26(3)). The Secretary must do so in writing.
CONSIDERATION
There was no issue between the parties, and we find, that CHEP is one of the businesses owned and operated by Brambles. CHEP’s business, which is carried on in a number of countries, involves the provision of container pooling services to a wide range of retail and industrial customers. Among those customers are those operating in the automotive industry. In Australia, CHEP provides services to three of Australia’s automotive manufacturers. For the purpose of this case, though, we are concerned only with the services it has provided to one of those manufacturers: Holden Limited (“Holden”). Should CHEP be successful in its application, the services it provides to each of the three manufacturers will need to be considered by the Secretary in light of the decision in relation to Holden.
In relation to the services that CHEP provides to Holden, the issues that we must consider relate to the Holden V6 engine programme. On the basis of the evidence of Mr Matthews, we find that CHEP has a contract with Holden to provide a customised returnable container system with respect to Holden’s V6 engine programme (“V6 Returnable Container System”). The V6 Returnable Container System was developed by CHEP as a result of an invitation by Holden to CHEP and others to develop a returnable packaging system. At the time, Holden had been using wooden crates and disposable packaging that required unpacking and disposal by a team of eight people before the components entered the production line. On the basis of Mr Matthew’s evidence, we find that CHEP consulted closely with Holden as to the needs of its production line and the specifications that the packaging needed to meet. Pursuant to a contract with CHEP, the packaging, that we will refer to as “trays”, were designed by Flight Group Ltd and Plexicor Australia Pty Ltd (“Plexicor”). The trays, which are made of plastic, and the tooling required to manufacture them were manufactured by Plexicor, which sub-contracted with another firm to manufacture the pallets onto which trays are packed for transport. Samples of the trays were subjected to trials by Holden in consultation with CHEP.
We find that, in general terms and without referring to pricing information that is protected by the confidentiality order, the V6 Returnable Container System works in this way. Holden’s V6 engine and associated components are manufactured in Detroit in the United States of America. Pursuant to a contract between it and Holden, CHEP either delivers the trays to the premises of the manufacturers of the V6 engine and of the associated components or those manufacturers collect them from CHEP. The trays come in a variety of sizes and with a variety of inserts but each is designed especially for a V6 engine or a particular associated component. The inserts and the trays are designed to protect the engines and the associated components from damage such as corrosion or rubbing. In preventing them from rubbing the crate, the V6 engine and associated components are also protected from being contaminated by the material from which the tray is made. Contamination is also minimised by the cleaning process to which CHEP subjects the trays before they are provided to the manufacturers. The design of the trays also takes into account matters such as the space constraints of Holden’s motor vehicle assembly production line, the need to enable processes to be carried out efficiently on that production line and ergonomic considerations relating to those personnel working on the production line.
Each tray is filled by a manufacturer in Detroit and it is stacked by that manufacturer on other filled trays. The top tray in each stack is capped and the trays are strapped together. They are placed on pallets, which are then loaded by the manufacturer into sea containers designed especially for Holden’s V6 engine components. The sea containers are taken by Holden’s transport provider in the United States of America to its selected shipping line for shipping to its motor vehicle manufacturing plant at Fisherman’s Bend in Victoria.
Once the sea containers arrive at Fisherman’s Bend, the pallets of trays are removed by persons engaged by Holden and sent directly to its production line. The components are taken from the individual trays as they are required on the production line. When they are emptied, the trays are again stacked. Holden delivers the empty trays to CHEP’s on site depot at the Fisherman’s Bend plant and CHEP then takes them to its own off-site depot where it cleans and inspects each tray. Once that process is completed, they are then packed by CHEP into sea containers and sent back to Detroit where they are again filled and returned to Australia as before.
CHEP monitors the flow of trays to ensure that the manufacturers of the V6 engine and the associated components have sufficient numbers of trays in which to pack the items. CHEP monitors its trays to ensure that it does not suffer “leakages” of its property and so have insufficient trays to provide to the manufacturers. In order to ensure that it has sufficient trays, it contacts Holden several times each week so that it is aware of its production schedule, forward delivery volumes and trading stock availability and can ensure that sufficient trays are “in the loop” to ensure that the number of V6 engine components required for Holden’s production requirements can be taken to Fisherman’s Bend. Is there a wider obligation on CHEP to ensure that Holden has sufficient V6 and associated components at any one time to meet its production requirements? A Purchase Order states that “CHEP is to ensure that there is sufficient equipment placed in the system to meet Holden Engine Operations’ scheduled requirements”. There is no evidence of any contract between CHEP and the manufacturers of the V6 engine components to supply those goods to it. The only reference is to the supply of “equipment” in the Purchase Order. Given the operation of the V6 Returnable Container System and in the absence of any evidence that CHEP itself has a contract to procure the supply of the V6 engine components, we have concluded that “equipment” must refer to the trays and not to the items in those trays.
On the basis of Mr Matthew’s evidence, we find that CHEP is paid by Holden by reference to each V6 engine or associated component delivered to it. The payment for each is structured so that the cost of CHEP’s V6 Returnable Container System is recovered. Between 40% to 50% of the amount paid by Holden to CHEP is driven by capital costs, which include the design, prototype tooling and the purchase of the trays.
We will now turn to the provisions of the Administration Act regulating registration as an ASP. The criteria of s. 26(2) are cumulative in that the Secretary must be satisfied of each of the matters specified in its seven paragraphs before he may, and indeed must, grant an application for registration. In his decision dated 15 March, 2002, the Secretary has made a decision only in relation to the matter specified in the first of those paragraphs, s. 26(2)(a). As we have said, that paragraph provides that the Secretary must be satisfied that the applicant for registration must be “… eligible to apply for that registration”.. Given that the ordinary meanings of the word “eligible” include “…2. legally qualified to be elected or appointed to office …” (Macquarie Dictionary, 2nd edition, 1987), it seems to us that a person cannot be eligible to apply for registration as an ASP unless he or she may apply for registration and whether or not that is so is governed by s. 19.
The first criterion that Brambles must satisfy under s. 19 is that it is a “provider of automotive services”. As we have said, the expression “automotive services” is defined to mean “… design, development, engineering or production services of a kind declared by the regulations to be automotive services for the purposes of this Act” (s. 6(1)). Of those declared to be automotive services by r. 9, Brambles relies in the first instance on its V6 Returnable Container System, or some part of it, being “… production services for motor vehicles, engines, engine components, automotive components … relating solely to …” one of the aspects specified in r. 9(2). In the second instance, Brambles relies on its V6 Returnable Container System, or some part of it, being automotive services that are “… design, development, engineering and production services for … automotive machine tools relating solely to … design, development, engineering or production …” (r. 9(2)(a)). The “automotive machine tools” to which Brambles relates its automotive services are “… stillages that are purpose-built for automotive production …” and so are automotive machine tools within the meaning of r. 8(5)(c).
We will begin with the first aspect of Brambles’ position and with the expression “production services”.. Although not defined, each of its components is defined in the Administration Act and we have already set those out above (see paragraphs 13 and 14). Neither definition purports to be exhaustive and both are defined in terms of inclusion. Beginning with the word “production”, we have already noted that it is not that word that s. 7 defines. Instead, it specifies when items are “taken to have been produced in Australia” and when a person is “taken to produce” a thing. The provisions of s. 7 do not seek to prescribe what is meant by “production” and it is clear that they are not intended to do so but only to ensure that certain activities are caught within its parameters whatever those parameters may be. Taking s. 7(1) as an example, it provides that “… a person is taken to produce a thing even if the process of production consists entirely of assembling the thing from component parts …” (emphasis added). It does not purport to prescribe the parameters of when a person is taken to produce a thing but to ensure that such assembly is caught within those parameters, whatever they may be. The same can be said of each of the other provisions in s. 7.
In so far as they are relevant, the ordinary meanings of “production”, which is a noun, include:
“… 1. The act of producing; creation; manufacture. 2. That which is produced; a product. 3. Econ. the creation of value; the producing of articles having an exchangeable value. 4. the total amount produced. …” (Macquarie Dictionary, 2nd edition, 1987)
The word was considered by Lockhart J in Faywin Investments Pty Ltd v Federal Commissioner of Taxation (1989) 89 ALR 599 in the context of s. 124ZAF(1)(a) of the Income Tax Assessment Act 1936, which allows a deduction for capital moneys expended in producing, or contributing to the cost of producing, a film. His Honour said:
“The word ‘production’ has been considered in various cases in different contexts. See for example GTK Trading Pty Ltd v Export Development Grants Board (1981) 40 ALR 375 at 382 in the context of producing goods within the meaning of the Export Expansion Grants Act 1978 (Cth) ss 3, 4(1); and Secretary of State for Employment and Productivity v C Maurice & Co Ltd [1969] 2 AC 346 in the context of the expression ‘production and distribution’ for public supply under the Selective Employment Payments Act 1966 (UK) s 2(2)(a)(3). In Div 10BA, in particular s 124ZAF(1)(a), when talking of the cost of producing a film, the relevant elements of production of the film are all the steps in the process or processes of production of the film as a result of which the film is created. To produce the film is to bring it into existence from its constituent elements and as a result of the various processes whereby it is put together. It is the action or process of producing the film and all the ingredients involved in that.” (page 608)
Given the terms of s. 7, we have looked also to the ordinary meanings of the word “produce”:
“1. to bring into existence; give rise to; cause: to produce steam. 2. To bring into being by mental or physical labour, as a work of literature or art. 3. Econ. to create (something to have an exchangeable value) …” (Macquarie Dictionary, 2nd edition, 1987)
Although mindful of the dangers of interpreting a word by reference to the meanings ascribed to the words by which its ordinary meanings are given in a dictionary, we think that a consideration of the way in which the word “manufacture” has been interpreted is relevant. That is particularly so in view of the provisions of ss. 7(1), (3) and (4) which clarifies that certain things have been produced in circumstances in which it might otherwise be questioned whether that thing was produced or merely assembled. Various cases have considered the word “manufacture”.. These cases were considered by the Tribunal in Cosco Holdings Pty Ltd and Commissioner of Taxation, AAT 12219B, 16 December, 1998, (Deputy President Forgie, Senior Member Beddoe and Mr Horrigan, Member) but we will set out only their essence in these reasons.
In McNicol v Pinch [1906] 2 KB 352, Darling J, with whom Bray J agreed, said that:
“... You can only make one thing out of another. I think the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made.” (page 361)
His Honour concluded that the “... appellants did not make saccharin, because they began and ended with saccharin” (page 362) even though the saccharin with which they began was of a different grade of sweetness from that with which they finished. This approach has been adopted in Australia under earlier sales tax legislation in, for example, WEA Records Pty Ltd v Federal Commissioner of Taxation (1990) 96 ALR 365 at 369-370 (Davies J) and the High Court in Commonwealth v Genex Corporation Pty Ltd (1992) 176 CLR 277 at 288-289 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ).
The principles which might be applied in undertaking the task of identifying whether there is “a different thing from that out of which it is made” was considered by Windeyer J in M.P. Metals Pty Ltd v Federal Commissioner of Taxation (1967-68) 117 CLR 631. Having quoted the above passage from McNicol v Punch, Windeyer J continued:
“But what is a different thing? Various paraphrases were offered to me, such as a ‘substantially different thing’, not merely an ‘altered thing’; ‘a new entity’; ‘a distinct commodity’. But these are all pregnant with ambiguity. Identity and difference, as concepts, must always be related to some quality of the thing or things in respect of which identity or difference is to be determined. It may be colour, shape, chemical composition or any other quality. To speak of ‘substantial differences’, as distinct from small differences, means little or nothing, unless some quality of the thing is postulated as its essential. And whether a thing is so different a thing from the thing or things out of which it was made as to be properly described as a new commodity may depend not only upon physical characteristics but also on differences in its utility for some purposes. ...” (page 638)
Some reference was made to the process itself by Dixon J in Federal Commissioner of Taxation v Jack Zinader Pty Ltd (1949) 78 CLR 336 but Sheppard J in Commissioner of Taxation v Jax Tyres Pty Ltd (1984) 5 FCR 257 said that:
“…The critical question is always that earlier stated by his Honour when adopting what was said by Darling J in McNicol v Pinch. What is made must be a different thing from that out of which it is made; otherwise there is no manufacture.” (page 267)
A number of cases have considered the practical issue of whether a different thing has been made from that out of which it is made so that the thing can be said to have been manufactured: Carfax Waste Paper Co. Ltd v Minister of Labour [1968] 1 WLR 1166, Readymix Concrete (WA) Pty Ltd v Federal Commissioner of Taxation (1971) 71 ATC 4107. In all these cases, though, it must be borne in mind that:
“Windeyer J warned against the principles derived from the cases being applied in too abstract a sense. At all times, it is necessary to have regard to the ordinary meaning of the language. It is not, therefore, appropriate to conclude that the chef who fillets a fish, peels and cuts potatoes and cooks the two to produce fish and chips can be regarded as a manufacturer. That is so even though what he or she has done is to make a new commodity from the ingredients and to render usable (in the sense of edible) that which (to some at least) was not usable in their raw form. (see pages 639-640 and also Federal Commissioner of Taxation v Rochester (1934) 50 CLR 225 at 226 per Dixon J).” (Cosco Holdings Pty Ltd and Commissioner of Taxation, AAT 12219B, 16 December, 1998 at paragraph 41)
Having regard to the structure of the Administration Act and the Regulations, the ordinary meanings of the word “production” and the manner in which Parliament has sought to include certain activities within the compass of the word “production” through s. 7, it seems to us that it means the act of producing, creating or manufacturing the thing that it is produced, created or manufactured. The expansionary provisions of s. 7 lead us to consider that it is arguable that, like manufacture, “production” requires that there can be no production unless the thing that is produced is different from that out of which it is made (see McNicol v Pinch at paragraph 31 above). This conclusion is inconsistent with the view expressed in Re Transplant and Breeding Services Pty Ltd and Australian Industrial and Development Incentives Board (1983) 5 ALN N94 (Davies J, Mr Pascoe and Mr Sinclair, Members) that “production” is wider than “manufacture” but it is consistent with the conclusion of Lockhart J in Commissioner of Taxation v Jax Tyres Pty Ltd when he said:
“‘Production’, which is included in the definition of ‘manufacture’ (par 3(1)(a)), is a word of wide import; but it still involves the element of producing something different from the materials from which it was made. It is not possible to formulate precise definitions of such general terms as ‘manufacture’ and ‘production’; but they do not bear a restricted meaning. Whatever answers the description of ‘manufacture’ or ‘production’ of goods according to accepted usage of the English language is within the Act.” (page 261)
Returning to the word “service”, its ordinary meanings include:
“1. an act of helpful activity. 2. The supplying or supplier of any articles, commodities, activities, etc., required or demanded. 3. the providing or a provider of some accommodation required by the public, as messengers, telegraphs, telephones, or conveyance. 4. the organised system of apparatus, appliances, employees, etc., for supplying some accommodation required by the public. …” (Macquarie Dictionary, 3rd edition, 1997)
The width of meanings ascribed to the word “service” and its related word “services” was recognised by the High Court in IW v The City of Perth and Others (1997) 191 CLR 1 (Brennan CJ, Dawson, Gaudron, McHugh and Gummow JJ; Toohey and Kirby JJ dissenting). It can also vary in its shades of meaning but whatever those shades may be:
“… As a reference to any standard dictionary will show, although the word ‘services’ has a wide application, it imports always the notion of some assistance or accommodation being made available by one person to another. …” (Adamson v New South Wales Rugby League Ltd (1991) 103 ALR 319 at 337 per Wilcox J)
What then of the expression “production services”? Unlike “transport”, which can commonly be found both as a noun and an adjective, the word “production” is a noun and, except in an instance such as a “production assistant”, is not generally used as an adjective. That has caused us some difficulty in its interpretation. Marrying the ordinary meanings of its component words, “production services” could have various shades of meaning of which we have identified three: one relating to the direct provision of services and the other to their indirect provision; and one that incorporates both direct and indirect provision:
assistance or activities or the supply of articles or commodities that are themselves an integral part of the activities, articles or commodities required for the production, creation or manufacture of a thing; or
assistance or activities or the supply of articles or commodities, which are not themselves an integral part of the activities, articles or commodities required for the production, creation or manufacture of a thing but which facilitate, or (and perhaps more broadly) are directed in some way to, those activities or the supply or provision of articles or commodities that are such an integral part; or
assistance or activities or the supply of articles or commodities that are themselves an integral part of the activities, articles or commodities required for the production, creation or manufacture of a thing or that facilitate, or are directed in some way to, those activities or supply.
In choosing which interpretation is to be preferred, regard must be had to s. 15AA of the Acts Interpretation Act 1901 (“AI Act”), which requires that:
“… in the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
When we look to the purpose or object of the Administration Act stated in s. 3, we see that it is intended to encourage competitive investment and innovation in the Australian automotive industry. It will achieve this object by providing transitional assistance. The rationale behind the encouragement of such competitive investment and innovation is that it will enable the Australian automotive industry to achieve sustainable growth both in the Australian market and internationally in the context of trade liberalisation. It does so by providing for MVPs, ACPs, AMTPs and ASPs, who are registered, to claim duty credits according to the provisions of the Administration Act. MVPs undertake the production of motor vehicles or engines, ACPs are producers of, in general terms, components for use in vehicles and AMTPs are producers of automotive machine tools that are, again in general terms, designed and built for use solely in the production of motor vehicles, engines, engine components or automotive components.
Stopping at this point, it is open to conclude that ASPs, as providers of production services and so of automotive services, merely complete the circle of people required for production of motor vehicles. They are the people who may be called upon, or to whom the activities are “contracted out” to undertake the activities that are specified in r. 9(2)(a) to (d) and that an MVP, ACP or AMTP may otherwise choose to be performed “in-house”.. It would be open to attribute to the expression “production services” its first meaning i.e. assistance or activities or the supply of articles or commodities that are themselves an integral part of the activities, articles or commodities required for the production, creation or manufacture of a thing. Whether we would go beyond that meaning to adopt the third meaning would also be a matter that would remain open.
This, however, is not the point at which we may stop. There is a much wider context in which the expression is used and must be interpreted. It provides that the “production services [are] for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling, relating solely to …” those matters in r. 9(2). The words “relating to” and “solely” require some consideration.
Beginning with “solely”, the New Shorter Oxford English Dictionary defines it as:
“1. As a single person or thing; without any other as an associate, partner, etc.; alone. I.ME. 2 Only, merely, exclusively. Also (contextually), entirely, altogether”
In its ordinary meaning, therefore, the word “solely” means “only” or “to the exclusion of all else”.. This is the meaning it has been given when interpreted in other contexts as, for example, in Ryde Municipal Council v Macquarie University (1978) 23 ALR 41 (Gibbs ACJ, Stephen and Murphy JJ and Aickin and Jacobs JJ dissenting). In that case, the High Court considered whether certain land was vested in the Macquarie University and used or occupied by the University solely for the purposes of the University. If it was used solely then the University was exempt from rates. The land was in the centre of the campus and was the site of a building constructed by the University Union. The Union leased most of the building to various shops and banks which were open to the public but used mostly by the students. The leases also provided a source of income for the Union.
In his judgement, Gibbs ACJ, who was one of the majority, decided that the use of the land was wholly ancillary to, and directly facilitated, the carrying out of the principal objects of the University. It was not collateral or additional to those purposes. He continued:
“Was it used ‘solely’ for those purposes? The question must be considered from the point of view of the University - was the use, by the University, solely for its purposes? The fact that the University derives some subsidiary and incidental benefit from using the land for its purposes does not mean that the land is not used exclusively for University purposes: Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation, supra, at p. 170. In Randwick Corporation v Rutledge, Windeyer J said (102 CLR at 94): ‘When such words [as ‘exclusively’ or ‘solely’] are present, it is a question of fact whether the land is being used for any purpose outside the stipulated purpose ... As Kitto J said in Lloyd v Federal Commissioner of Taxation [(1955) 93 CLR 645 at 671], such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use’.
The word ‘solely’ may do no more than add emphasis, or perhaps precision. The present is not one of those cases in which part of the land in question was used for one purpose, and part for another. The question is whether in letting the land, or in approving of the grant of the leases by the union (whichever was technically the position), the University was pursuing the independent object of obtaining revenue from the rents. It was put in argument before us that the learned primary judge did not expressly find that the purpose of gaining revenue was only incidental, but that is, I consider, implicit in his findings. He found that the Council of the University was ‘fully entitled to come to the conclusion that the establishment of the facilities in question was calculated to promote the objects and interests of the University by avoiding the necessity of students and staff seeking such facilities having to spend time travelling to other shopping centres’. He further found that the land ‘should be regarded as used by the University for its purposes because, although leased to various tenants for commercial purposes, they provide facilities which the University considers to be necessary or incidental to achieving its purposes’.. It cannot be inferred from his findings, and the evidence does not suggest, that the University, in letting the land, was pursuing the independent purpose of raising money. The receipt of the rent by the union was a subsidiary and incidental (although, no doubt, by no means a negligible) benefit from the use of the land for the purposes of the University.
For the reasons I have given I have reached the conclusion that Waddell J and the majority of the Court of Appeal were correct in holding that the land was used by the University solely for the purposes thereof ...” (pages 50-51)
Stephen J, with whom Murphy J agreed, relied on similar principles in reaching his conclusion but expanded upon the distinction between collateral or independent purposes and incidental purposes:
“It remains to see whether any authorities stand in the way either of my interpretation of the meaning of par (fii) or of my mode of application of it to the facts of this case. First as to meaning: I take the components of the phrase ‘used by the University solely for the purposes thereof’ in the same order as previously. ‘Solely’ and its equivalents in comparable legislation have been the subject of much judicial commentary but for present purposes it is enough to refer to two cases only. In Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159, the question whether land was used ‘exclusively for charitable purposes’ was in issue and it was held that the sale of produce grown at a training farm for delinquent boys in no way prejudiced the land’s exemption from rates: ‘it would be fantastic to hold that the land would not be rateable if the appellant destroyed or gave away the surplus products resulting from such trading that remained after satisfying the needs of the inmates but that it would be rateable if it diposed of such surplus at a profit and used that profit in aid of the revenues of the institution’: per Dixon CJ, Williams and Webb JJ at p 171. The commercial activity involved in the sale of produce was ‘merely incidental to the pursuit on the land of the charitable objects of the occupier’ (also at p 171). So here the receipt of rents by the University is likewise incidental to the use of the Market for the purposes of the University. In the much cited judgment of Windeyer J in Randwick Corporation v Rutledge (1959) 102 CLR 54 at 93, his Honour spoke of the use of ‘solely’ and ‘exclusively’ as familiar in rating law and as adding emphasis, its function being to exclude cases where land is used for purposes which are ‘collateral or independent, as distinct from incidental to the stipulated use’ (at p 94). Applying this to the present case, there is, in my view, no element of collateral or independent purpose present in this case: the only use made of the Market site by the University is in the provision of facilities to staff and students.” (page 55)
In the earlier case of Randwick Municipal Council v Rutledge (1959) 102 CLR 54 (Dixon CJ, Fullagar, Kitto, Menzies and Windeyer JJ), Windeyer J summarised the essence of the principles expressed in these two passages:
“… The presence of ‘exclusively’, ‘solely’, or ‘only’ always adds emphasis; and is not to be disregarded … such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use. Even without such words, an exemption from rating based upon use or occupation for a particular purpose or in a particular manner can only apply when the property is so used that it can properly be described as used for that purpose or in that manner, any other user being merely incidental, or at least not inconsistent with such main user.” (page 94
In this case, there seems to us to be no reason to attribute any different meaning to the word “solely” other than that adopted in its ordinary meaning in Ryde Municipal Council v Macquarie University and Randwick Municipal Council v Rutledge and applied by the Victorian Court of Appeal in Returned Services League of Australia (Victorian Branch) Inc and Anor v Latrobe Shire Council [2001] VSCA 122 (Callaway, Batt & Buchanan JJ.A). That is, the word “solely” should be given its meanings of “only” or “to the exclusion of all else”.. As is evident in the authorities, this means that, in the context of r. 9(2), there must be a consideration of whether the services identified in that provision relate only (and to the exclusion of all else) to the activities specified in rr. 9(2)(a) to (d). They may do so if they also relate to other activities but only if those other activities are incidental to the activities specified in rr. 9(2)(a) to (d).. If those other activities are collateral to those activities specified in rr. 9(2)(a) to (d), even if only in a small way, the former cannot be said to be solely related to the latter.
In what way must the activities be solely “relating … to” the activities specified in rr. 9(2)(a) to (d)? In so far as they are relevant in this case, the ordinary meanings of the word “relate” are:
“… to bring into or establish association, connection, or relation … (Macquarie Dictionary, 3rd edition, 1997)
The meaning of the expression “relating to” has been considered in a number of cases and the variations of meanings attributed to it were summarised by Fitzgerald JA in Oceanic Life Ltd v Commissioner of Taxation (1999) 168 ALR 211 (Sheller, Beazley and Fitzgerald JJA) at 224-225:
“The width of the phrase ‘relating to’ is undoubted. Lord Macnaghten stated that ‘[t]here is no expression more general or far-reaching’: Commissioner of Inland Revenue v Maple & Co (Paris) Ltd [1908] AC 22 at 26. See also Fountain v Alexander (1982) 150 CLR 615 at 629; 40 ALR 441; Colakovksi v Australian Telecommunications Corp (1991) 100 ALR 111; Secretary, Department of Foreign Affairs and Trade v Boswell (1992) 108 ALR 77; PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 131 ALR 377 at 398, although the addition of the words ‘or depending on’ was presumably intended to give the combined phrase ‘relating to or depending on’ a wider operation than ‘relating to’. The difficulties of construction presented by such language have also been noted. Taylor J observed that ‘… the expression “relating to” … is … vague and indefinite …” and ‘‘ … leaves unspecified the plane upon which the relationship is [to be] sought and identified’: Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602; at 620. One area of debate has been whether, in particular legislation, a relationship need or need not be ‘direct’ or ‘direct and immediate’: see, for example, Ausfield Pty Ltd v Leyland Motor Corp of Australia Ltd (No 2) (1977) 14 ALR 457 at 460, 462; Re Dingjan; Ex parte Wagner (1995) 128 ALR 81 at 110, 115; Joye v Beach Petroleum NL (1996) 137 ALR 506 at 514. See also Perlman v Perlman (1984) 51 ALR 317. Overall, the position judicially adopted has been that the operation of the phrase ‘relating to’ is determined by the statutory context and purpose: Butler v Johnston (1984) 55 ALR 265 at 268; Hatfield v Health Insurance Commission (1987) 77 ALR 103; at 106–7.”
Although the expression “relating to” is of wide import when taken on its own, in this case it is qualified by the word “solely”.. Applying the interpretation of the words “relating … to” and “solely” to r. 9(2), it follows that each of the services specified in the opening words of that provision (i.e. the design, development, engineering or production services for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling) must have a connection with, and so be related to the activities specified in rr. 9(2)(a) to (d).. They may have an incidental connection with another activity but they may not have any collateral connection, however small, to any activities that are not specified. Therefore, for the purposes of this case, production services must be “…for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling” and those production services must be connected solely with design, development, engineering or production, including normal design functions …(r. 9(2)(a)).
But what of the activities that are specified? Are they confined to the plain meaning of the activities specified or do they extend to incorporate the broader activities that are a necessary part of them. Taking production as it is the matter with which we are concerned, the question becomes: Is our consideration under r. 9(2)(a) confined to activities that relate solely to the act of producing, and so production, or may it be extended to incorporate activities that in practical terms must necessarily precede or follow from the act of producing? Such activities might include marketing of the goods resulting from the act of producing and transporting them to market. Having regard to the purpose of the Administration Act and Regulations, the purpose of ACIS is to encourage competitive investment and innovation in the Australian automotive industry. The rationale behind that stated purpose extends to enabling the Australian automotive industry to achieve sustainable growth both in the Australian market and internationally in the context of trade liberalisation but that does not mean that such issues are the object of ACIS. They are a hoped for outcome of the encouragement of competitive investment and innovation in the Australian automotive industry.
An examination of the particular provisions of the Administration Act and the Regulations does not alter our view. In relation to “automotive tooling”, Parliament chose to incorporate in its meaning not only tooling solely for the production of motor vehicles, engines, engine components or automotive components (r. 9A(2)(a)) but also for facilitating the provision of automotive services (r. 9A(2)(b)). In relation to automotive machine tools, it provides that those tools are those used solely (or, in limited circumstances, mainly) for production or facilitating the provision of automotive services (r. 8(2) but it expressly includes “… machine tools for handling physical inputs that are integral to the production process” (r. 8(4)). In both instances, Parliament has expressly included a process or item that might otherwise be regarded as beyond the act of production. It has made no such provision in relation to automotive services or in relation to production. Certainly, it is true that s. 7 of the Administration Act extends the meaning of production but it does not extend it beyond either end of the production line.
Section 7(2) does not alter our view. In providing that “a person is taken to produce a thing only at the time when the person sells the thing produced”, it is not seeking to incorporate into the meaning of “production” or into “production services” economic factors or factors extending beyond the act of production. It is effectively deeming the time of production and so linking it with the concept of “production value”, which is relevant in the registration of an ASP. In relation to automotive services, the “production value” is “the value of that service … worked out in accordance with regulations made for the purpose of the definition” (s. 6(1)). Pursuant to r. 14(3), the production value of automotive services is the “total revenue from the provision of services”.. In view of the principles set out by Heerey J in Elazac Pty Ltd v Commissioner of Patents (1994) 125 ALR 663 at 666 and in view of the fact that the Act and Regulations together provide a detailed regime, it is legitimate to interpret a provision of the Act while having regard not only to the provisions of the Act but also of the Regulations. When we do that, it seems to us that the production value must necessarily be linked to the sale of the services and their provision. In view of the scheme of the Act and the Regulations, s. 7(2) is specifying the time at which production is deemed to occur but is not going beyond that.
In summary, then, after taking all of these aspects into consideration, we have concluded that, in so far as they are relevant to the context of this case, “automotive services” are “production services for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling …”.. Those production services are services, being assistance or activities, related solely to production and so to the act of producing. If they are to come within r. 9(2)(a), they may not relate to any collateral or independent activity although they may incidentally fulfil another role or achieve another purpose.We also note that the use of the word “for” in r. 9(2)(a).. The production services are for motor vehicles, engines, engine components, automotive components, automotive machine tools or automotive tooling. The ordinary meanings of the word “for” in a context such as this are:
“… 2. intended to belong to, suit the purposes or needs of, or be used in connection with: a book for children, a box for gloves. …” (Macquarie Dictionary, 2nd edition, 1987)
Turning now to the V6 Returnable Container System, we find that it is an integral part of the system adopted by Holden at its Fisherman Bend plant that V6 engine components required for production of some of its motor vehicles are made in the United States of America and brought to Australia. It is also an integral part of that system that those components are supplied as required by the production line without interrupting its operation and without the need for Holden to stockpile components pending their use on its production line. Looked at in an overall fashion, then, CHEP’s V6 Returnable Container System is an integral part of the system installed by Holden for the production of its motor vehicles.
Regulation 9(2) is not, however, worded in quite those terms. It does not ask us to consider whether CHEP’s activities are for, and so for the benefit of, Holden’s manufacturing enterprise. Rather, it divides up some of the activities that lead to a motor vehicle’s being available for purchase. It divides them into motor vehicles, their components (engines, engine components and automotive components) and automotive machine tools and automotive tooling required to put them together. The assistance or activities directed to the act of production, and so the production assistance, must relate to one or more of those aspects of the finished motor vehicle that sits in the showroom and to none of the other activities that may be required to get it there.
When looked at in this way, CHEP’s activities are not directed to providing any form of service to the act of producing the V6 engine components, be they engine components or automotive components, in the United States of America. Its activities in relation to them commence only after they have been produced and their activities are directed to the carriage of the items that have been produced although it is not itself responsible for their carriage. CHEP’s systems and equipment are designed in close consultation with Holden and tailor made for Holden’s precise needs but its activities at this stage are related solely to the provision of purpose-built trays enabling the items to be carried by others. Its activities do not change. Indeed, it is not engaged in the carriage of the goods at any stage and it does not retrieve its trays until after they have been emptied.
The delivery of the V6 engine components to Fisherman’s Bend is vital for they are required in the production of motor vehicles. According to the extended definitions in s. 7(1), Holden’s assembling the V6 engine and associated components with other components in order to assemble a motor vehicle would mean that it is taken to have produced it but the delivery of the V6 engine components in CHEP’s trays does not mean that its activities are related to that assembly, solely or otherwise. They are related to the supply of the items but not to their assembly with other components and so not to the production of the motor vehicle. They facilitate the assembly as the manner in which they are set out in the trays is designed with the needs of the operator and the production line in mind. It follows that we do not consider that CHEP’s V6 Returnable Container System may be described as production services, and so automotive services, within the meaning of r. 9(2)(a).. The conclusion that we have reached is not affected by the manner in which the trays are provided, be it by hire or otherwise, or by the fact that CHEP engaged others to design and manufacture, or to assist it in the design and manufacture of the trays it uses.
The second aspect relates to the trays themselves and to the submission that they are stillages and so automotive tools. The word “stillages” is not defined in either the Administration Act or the Regulations. Although not defined in the Macquarie Dictionary, it is defined in the New Shorter Oxford Dictionary to mean:
“… 1. Brewing. A stand for casks. 2. In various industries, a stand for keeping something from the ground 1875.”
The term is used in the Regulations in the context of r. 8 dealing with automotive machine tools. The expression “automotive machine tools” is not defined but a “machine tool” is defined as “… a power-operated machine, as a lathe, etc., used for general cutting and shaping operations.” (Macquarie Dictionary, 2nd edition, 1987). Regulations 8(2), (3) and (4) are expressed in inclusionary terms and so either clarify or extend the ordinary meaning of what are “machine tools”. Regulation 8(5) qualifies what may be regarded as machine tools and it is in this context that stillages come into play. The effect of r. 8(5)(c) is that stillages that are purpose-built for automotive production are regarded as machine tools. Stillages that are not so built and other passive storage equipment is not so regarded. The remaining two paragraphs of r. 8(5) are directed to machine tools.
Putting r. 8(5)(c) to one side for the moment, the whole tenor of r. 8 is concerned with machine tools. No mention is made of containers or storage systems in any way. Given its context, it seems to us that the stillages to which reference is made are stands used to keep something from the ground and that have been purpose-built for automotive production. Mr Matthews gave evidence that trays of the type we have considered may be referred to as stillages in the United States of America. On the evidence we have, we are not satisfied that the trays are known as stillages in Australia. It is a matter on which there may be further evidence but we do not need to reach a conclusion that the trays are, or are not stillages for we are not satisfied that Brambles would be assisted in its case even if they are properly regarded as stillages within the meaning of r. 8(5)(c).
If the trays are stillages, we are satisfied that they are purpose-built for automotive production in the sense that they are purpose-built so that their contents may be retrieved in an undamaged fashion by the operator, mechanical or human, on the production line in the most efficient manner. For the reasons that we have given earlier, we do not find that they are designed and built for use solely for the production of motor vehicles, engines, engine components or automotive components within the meaning of r. 8(2)(a)(i). We do find, however, that they facilitate, in the sense of “… make easier or less difficult …” (Macquarie Dictionary, 2nd edition, 1987) the provision of production services at Fisherman’s Bend within the meaning of r. 8(2)(a)(ii).. The question, though, is whether they are designed and built solely for that purpose for they must be if they are to be regarded as automotive machine tools within the meaning of r. 8.. We are not satisfied that they have been designed and built solely for that purpose. They have been designed and built solely for Holden’s purposes but some of those purposes relate to facilitating the provision of production services and some relate to the transportation of the V6 engine components. Certainly, that transportation is intended to ensure that they arrive in an undamaged condition. That may be said to facilitate production services when they arrive in an undamaged condition but, at the same time, the trays are designed and built for their transportation. Transportation is one of the intended uses of the trays and, for the reasons that we have given above, is not to be regarded as the provision of automotive services. It follows that they are not designed and built to be used solely for facilitating the provision of automotive services.
It would follow from our conclusions that Brambles is not a provider of automotive services but it was agreed between the parties that we should not make a final decision. Rather, we should adjourn further consideration lest Brambles wishes to pursue another avenue to establish that it is eligible for registration. For these reasons, we adjourn further consideration.
I certify that the sixty preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie
Mr C Ermert (Member)
Mr W G McLean (Member)
Signed: ................................................................
P. Paczkowski Associate
Date/s of Hearing 3 April, 2003
Date of Decision 13 October, 2003
Counsel for the Applicant Mr A. Cavanough QC and Mr M. Fleming
Solicitor for the Applicant Minter Ellison
Counsel for the Respondent Mr P. Hanks QC and Mr E. de Zilwa
Solicitor for the Respondent Australian Government Solicitor
8
5
0