Collector of Customs for NSW v Putale Pty Ltd

[1983] FCA 207

Re: THE COLLECTOR OF CUSTOMS FOR NEW SOUTH WALES
And: PUTALE PTY. LIMITED
No. G268 of 1982
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.
Neaves J.
Beaumont J.

CATCHWORDS

Administrative Law - Judicial review - Decision that goods are prohibited imports - No licence authorising importation - Whether goods excepted from application of Customs (Import Licensing) Regulations - Construction of Exception Notice made by Minister - Submission that court had no jurisdiction since only question of fact raised - Questions of law and questions of fact - Meaning of statutory rules of interpretation raising question of law.

Administrative Decisions (Judicial Review) Act, 1977 - s.5

Customs Act, 1901 - ss.50, 203, 229(1)(b)

Customs Tariff Act, 1966 - s.14 and Schedule 1 (Part I, Interpretative Rules and Part II)

Customs Tariff Amendment Act, 1980 - Schedule 8

Customs Tariff Amendment Act, 1982 - Schedule 6

Customs (Import Licensing) Regulations - regs. 7 and 17(1)

HEARING

SYDNEY

#DATE 26:8:1983

ORDER

1. The appeal be dismissed.

2. The appellant pay the respondent's costs of the appeal.

JUDGE1

This is an appeal from orders and a declaration made by a Judge of the court in an application under s.5 of the Administrative Decisions (Judicial Review) Act, 1977. The application was heard immediately before a similar application by Thomas Zyfert and Louis Muller. The Judge granted relief in both applications. In both matters, the Collector of Customs appealed. The appeal in the other matter was heard by another Full Court. A decision has recently been given in that appeal (Minister for Industry and Commerce v. Zyfert and Muller 18 August, 1983, unreported).

The administrative decision the subject of the application for an order of review was a decision made by an officer of Customs under s.203 of the Customs Act, 1901 to seize certain goods imported into Australia by the respondent. The goods were said to be forfeited goods by virtue of the operation of para. (b) of sub-s. 229(1) which provides that all prohibited imports, that is to say all goods the importation of which is prohibited under s.50 of the Customs Act, 1901 are forfeited to the Crown. The judgment under appeal held that the goods were not prohibited imports and granted to the respondent relief of the kind which it sought.

THE FACTS

The primary facts, as found by the learned Judge, are not in dispute and are as follows:

The article in question, a fully fitted body for a Porsche motor vehicle, arrived in Australia by air freight in August, 1982. It was the subject of an air waybill and was carried on a pallet in the hold of the aircraft. On the same flight, but shipped under a different air waybill, were a number of parts, including an engine and a gearbox which could have been used for the purpose of building or assembling the body into a fully fitted motor car. However, it was not the intention of the respondent to use those parts for this purpose. They were intended for another vehicle or body, not the subject of any relevant importation. Although the parts which arrived at the same time and on the same flight as the body in question could have been used in connection with it, other parts were needed before the body could have become a roadworthy vehicle. The body was fully fitted in the sense that the interior was virtually complete; it contained all body panels (including bumper bars), windows, lights, wipers, a tool kit, horn, battery, tyre pump, fuel and oil tanks, brake master cylinder and pedal, clutch, accelerator, airconditioning, instruments, radio cassette, gear stick, carpets, seats, head lining, door trims, fuel pump and filters, torsion bars, wiring, tubes and linkages and a steering wheel.

Complete as the body was, the goods lacked essential mechanical parts such as an engine, a gear box, steering mechanism, wheels, suspension and sub-frame. Although a used car of less than five years of age, the vehicle had been dismantled before shipment.
THE LEGISLATION

Section 50 of the Customs Act 1901 provides that the Governor-General may, by regulation, prohibit the importation of goods into Australia. The power may be exercised by prohibiting the importation of goods unless specified conditions or restrictions are complied with. The regulations may provide, inter alia, that the importation of the goods is prohibited unless a licence, permission, consent or approval to import the goods or a class of goods in which the goods are included has been granted as prescribed by the regulations. By reg. 7 of the Customs (Import Licensing) Regulations the importation of any goods (not being goods which are exempted from the application of the regulations) is prohibited unless a licence under the regulations to import the goods is in force and the conditions and restrictions (if any) to which the licence is subject are complied with. The Minister may except from the application of the regulations "any goods or any goods included in a class of goods" (sub-reg. 17(1)).

It is common ground that at the date of importation of the goods in question no licence was in force authorising their importation. The goods, therefore, answer the description of prohibited imports within the meaning of para. 229(1)(b) of the Customs Act, 1901 unless at the time of importation they had been excepted from the application of the Customs (Import Licensing) Regulations. The answer to that question depends on the meaning and effect of Exception Notice No. M61 made by the Minister of State for Business and Consumer Affairs on 30 March, 1982 and published in Commonwealth of Australia Gazette No. S59 on 1 April, 1982. The notice was expressed to have effect from the latter date.

By that notice the Minister excepted from the application of the Customs (Import Licensing) Regulations the goods specified in the schedule to the notice. Item 4 in the schedule describes the goods thereby excepted in the following terms:

"Goods other than:

(a) used, second-hand or disposals earth-moving or excavating vehicles, machinery or equipment e.g. rock buggies, dumpers, graders, draglines, mechanical shovels, loaders, ditchers, excavators, scrapers, bulldozers and parts thereof;

(b) used, second-hand or disposals tractors (not being agricultural tractors) road rollers and parts thereof;

(c) used, second-hand or disposals material handling equipment (e.g. cranes, forklift trucks) and parts thereof, but not including goods falling within Item 86.06 in Schedule 1;

(d) used, second-hand or disposals four-wheel drive vehicles having a gross vehicle weight of less than 10.16 tonnes, excluding public service type passenger vehicles, of a kind falling within Items 87.02, 87.03 or 87.04 in Schedule 1;

(e) passenger motor vehicles of a kind falling within sub-paragraph 87.02.119 in Schedule 1, but not including vehicles over five years of age."

The references to Schedule 1 are by reason of the terms of the notice, to be read as references to Part.II of Schedule 1 to the Customs Tariff Act, 1966 as proposed to be altered.

(The learned Judge and the other Full Court were inadvertently referred to an earlier notice, No. M55, but, so far as relevant, it was in the same terms.)

Thus, although the statutory context is that of the licensing of imports, in the case of passenger motor vehicles (para.4(e)) the Parliament has chosen to classify what may or may not be imported by reference, in part, to the Customs Tariff Act, 1966.

By Act No. 105 of 1980, assented to on 6 June, 1980, the Customs Tariff Act, 1966 was amended (with effect from 1 January, 1980) by substituting a new item 87.02, so far as material, as follows:

"87.02 Motor vehicles for the transport of persons, goods or materials (including sports motor vehicles, other than those falling within item 87.09); 87.02.1 - Vehicles of a kind operated by self-contained power (other than four-wheel drive vehicles, battery operated vehicles or air-cushion vehicles), being--

(a) motor cars;

(b) station wagons; or

(c) derivatives of motor cars or station wagons; 87.02.11 -- Assembled: 87.02.111 -- As prescribed by by-law 95.5% 95.5% 87.02.119 -- Other 57.5% 57.5% 87.02.12 -- Unassembled: 87.02.121 -- As prescribed by by-law 25% 25% 87.02.129 -- Other 35% 35%"

By Act No. 30 of 1982, assented to on 19 May, 1982, the Customs Tariff Act, 1966 was further amended, with effect from 19 August, 1981, by substituting a new item 87.02.1 as follows:

"87.02.1 Vehicles of a kind operated by self-contained power (other than four-wheel drive vehicles, cab over forward control vehicles, battery operated vehicles or air-cushion vehicles), being

(a) motor cars;

(b) station wagons; or

(c) variants of motor cars or station wagons. 87.02.11 - Assembled 87.02.111 --- As prescribed by by-law 95.5% 95.5% 87.02.112 --- As prescribed by by-law 131.5% 131.5% 87.02.119 --- Other 75.5% 75.5%"

(The learned Judge was inadvertently referred to Act No. 105 of 1980 as the provision in force at the relevant time. As at August, 1982 that provision was, so far as material, no longer in force).

Reference should also be made to item 87.05: "Bodies (including cabs) for motor vehicles of a kind falling within items 87.01, 87.02 or 87.03."

Sub-paragraph 87.02.119 is in Chapter 87 of the Tariff which is entitled, "Vehicles, other than Railway or Tramway Rolling Stock, and Parts therefor".

There are a number of notes which precede the items in the chapter. Notes 9 and 10 are as follows:

"9. In a sub-item (other than sub-item 87.10.2) paragraph or sub-paragraph in this Chapter, 'unassembled' means goods that are not assembled or are not further assembled than a stage that constitutes a sub-assembly.

10. In a sub-item, paragraph or sub-paragraph in this Chapter, 'assembled' includes goods that are not 'unassembled' by virtue of the last preceding note."

Sub-section 14(1) of the Customs Tariff Act 1966 provides:

"The Rules for the Interpretation of Part II of Schedule 1 set out in Part I of Schedule I have effect for the purpose of ascertaining -

(a) within which item or items any goods fall and, if the goods fall within two or more items, which one of those items applies to the goods;

(b) if the item that applies to the goods is divided into sub-items - within which of those sub-items the goods fall and, if the goods fall within two or more of those sub-items, which one of those sub-items applies to the goods;

(c) if the sub-item that applies to the goods is divided into paragraphs - within which of those paragraphs the goods fall and, if the goods fall within two or more of those paragraphs, which one of those paragraphs applies to the goods; and

(d) if the paragraph that applies to the goods is divided into sub-paragraphs - within which of those sub-paragraphs the goods fall and, if the goods fall within two or more of those sub-paragraphs, which one of those sub-paragraphs applies to the goods."

Rule 1, sub-rule 2(1) and par. 3(1)(a) of the rules provide:

"1. (1) The titles of Divisions, Chapters and Sub-chapters in Part II of this Schedule are provided for reference only, and shall not be used for the purpose of interpreting this Schedule.

(2) For the purpose of ascertaining whether goods fall within an item, sub-item, paragraph or sub-paragraph or whether an item, sub-item, paragraph or sub-paragraph applies to goods, regard shall, subject to sub-rule (3) of this rule, be had to the terms of items (including sub-items, paragraphs and sub-paragraphs) and of notes to Divisions and Chapters and, except where those terms otherwise require, to rules 2, 3 and 4 of these Rules.

(3) For the purpose of ascertaining whether goods fall within an item or whether an item applies to goods, regard shall not be had to the terms of any sub-item; for the purpose of ascertaining whether goods fall within a sub-item or whether a sub-item applies to goods, regard shall not be had to the terms of any paragraph; for the purpose of ascertaining whether goods fall within a paragraph or whether a paragraph applies to goods, regard shall not be had to the terms of any sub-paragraph.

2. (1) A reference in an item (including a reference in a sub-item, paragraph or sub-paragraph) to goods of a particular kind shall be read as including a reference to:

(a) goods that are imported in an incomplete or in an unfinished state but have the essential character of goods of that kind; and

(b) goods that are imported in an unassembled or in a disassembled state but, if assembled, would be goods of that kind or would be goods to which paragraph (a) of this sub-rule applies.

3. (1) Where, for any reason, goods fall within two or more items, two or more sub-items of an item, two or more paragraphs of a sub-item, or two or more sub-paragraphs of a paragraph, the item, sub-item, paragraph or sub-paragraph, as the case may be, that applies to the goods shall, subject to sub-rule (2) of this rule, be ascertained in accordance with the following principles:

(a) If one of the items, sub-items, paragraphs or sub-paragraphs, as the case may be, provides a more specific description of the goods than any other of the items, sub-items, paragraphs or sub-paragraphs, that firstmentioned item, sub-item, paragraph or sub-paragraph, as the case may be, applies to the goods."

Rule 4 provides that where goods do not fall within any item, the item that applies to the goods is the item that applies to goods that are most akin to those goods.

For the appellant it is contended that the goods imported by the respondent are properly described as a passenger motor vehicle of a kind falling within sub-paragraph 87.02.119 in Schedule 1 to the Customs Tariff Act, 1966 and that, it being conceded that, if properly so described, the vehicle is not over five years of age, the importation of the goods was prohibited, there being, as has been said, no licence in force authorising the respondent to import such a vehicle.

JURISDICTION

It was submitted on behalf of the appellant that the learned Judge had no jurisdiction in the matter. In essence, the submission was put upon the footing that the only question raised was one of fact, that is, of classification of the goods, and in the absence of any question of law, the court lacked jurisdiction. Reference was made to Hope v. The Council of the City of Bathurst (1980) 144 C.L.R. 1 at p.7 per Mason, J.

In our opinion, even if the Court acquires jurisdiction under the Administrative Decisions (Judicial Review) Act, 1977 only if a question of law is raised, this proceeding does raise such a question. In our view, consideration of the contentions of the parties as to the meaning or impact, if any, of the statutory rules of interpretation itself raises a question of law and not merely a question of fact. The application of such an interpretative rule presumably involves a departure from the ordinary or popular meaning of the words employed. This serves to emphasise that it is necessary to engage in "a process of construction" in order to arrive at the meaning of the words in the Customs Tariff Act 1966 (see Hope's Case (at p.8) per Mason, J.). In this sense, it may be said that the statutory meaning of the terms in question is a special technical one in the nature of a term of art and this involves a question of law (see Lombardo v. Federal Commissioner of Taxation (1979) 28 A.L.R. 574 at p.577). In our view, a question of law is involved in this proceeding even if it be assumed, for the purposes of the argument, that the grounds stated in s.5 of the Administrative Decisions (Judicial Review) Act, 1977 are so confined. Prima facie, they are not so limited (cf. Administrative Appeals Tribunal Act 1975, s.44(1)). In the present case, para.(d) of s.5(1) -- "that the decision was not authorised by the enactment in pursuance of which it was purported to be made" -- would appear to be the appropriate provision, if any, to be invoked. It is at least strongly arguable that the Court would have jurisdiction under this paragraph, even if no question of law, in the strict sense, arose. However, for the reason given, the process of construction required by the statutory rules of interpretation in this case does raise a question of law in any event.

It follows, in our opinion, that the Court had jurisdiction to deal with the application made in this proceeding.

CONSTRUCTION OF THE EXCEPTION NOTICE

The appellant contends that the goods are properly classified as goods in an "incomplete" state, which have the essential character of a motor vehicle so that, by dint of the application of interpretative rule 2(1)(a), the goods should be treated as if they were a motor vehicle for the purposes of the Customs Tariff Act, 1966 and thus of the Customs (Import Licensing) Regulations and the exception notice. The appellant does not suggest that the goods were in any "unfinished" state within the meaning of rule 2(1)(a); nor does he rely upon rule 2(1)(b).

In our opinion, the concession that used goods are not in an "unfinished" state for the purposes of rule 2(1)(a) was rightly made. On the other hand, whilst a secondary meaning of "incomplete" suggests something not fully formed, or not fully made (see the Oxford English Dictionary), its primary meaning is "lacking a part or parts or not having all parts arranged in a final or functional order" (see Webster's Third New International Dictionary). It may therefore be possible to describe the goods here as in an "incomplete" state in that sense (but see Zyfert and Muller, supra, per Fox, J. at p.14).

It is more difficult to characterise the goods as having the "essential character" of goods of that kind for the purposes of rule 2(1)(a). In our opinion, it is at least doubtful whether the subject goods, in their present state, have the "essential character" of a motor vehicle although incomplete. However, having regard to the view which we have formed in the matter, this question need not be determined (but see Zyfert and Muller, supra, per Fox, J. at p.14).

In our opinion, the subject exception notice, on its true construction, intends to pick up goods which, first, may be fairly described as "passenger motor vehicles" and secondly, fall within the statutory definition found in sub-para. 87.02.119 in Schedule 1. The use of the description "passenger motor vehicles" rather than "goods" in this connection is significant. It is an indication that, in the first instance at least, the draftsman intended to deal with something more specific than what could, neutrally, be described as "goods". Thus, the description in the exception notice should be read as having two distinct limbs. The first limb refers to "passenger motor vehicles" in the ordinary, popular sense. The second limb refines the class of vehicles referred to in the first limb by restricting that class to those falling within the special meaning to be derived from the application of the treatment accorded "other assembled motor vehicles of a kind operated by self-contained power" by the provisions of the Customs Tariff Act, 1966 construed by reference to the interpretative rules.

In the first instance then, the question arises: is it proper to describe the fully fitted body as a "passenger motor vehicle" for the purposes of the first limb of the definition? That is, are the imported goods a "passenger motor vehicle" in the ordinary, popular sense? At this stage, it is not necessary to consider the application, if any, of the special rules of interpretation provided for by the Customs Tariff Act, 1966.

It must be accepted that questions of fact and degree inevitably arise in the present context. For example, a passenger motor vehicle without wheels or even without an engine could still properly be characterised as, in substance, a motor vehicle. Yet as more items are stripped from the unit, it begins to change its character until, by a process of transmogrification, it has become, in truth, nothing more than a car body.

In the present case, the unit had been dismantled to the point where, in our opinion, it could fairly be described as a fully fitted car body rather than as a motor vehicle. Its total lack of mechanical parts is, we think, determinative in this respect. In our view, the first ingredient in the description in para.(e) of the exception notice, that is, "passenger motor vehicles" has not been satisfied in the present case, irrespective of the application, if any, of sub-para.87.02.119 in Schedule 1 and the interpretative rules.

It follows that the subject goods are not covered by para.4(e) of the exception notice.

Three further matters should be mentioned. First, it may be said that the approach we have taken fails to give any weight to the rules usually employed in the identification of goods for tariff purposes (see Re Renault (Wholesale) Pty. Ltd. and Collector of Customs (No. 3) (1978) 2.A.L.D. 111; Blackwood Hodge (Australia) Pty. Ltd. v. Collector of Customs, New South Wales (No. 2) (1980) 3 A.L.D. 38; Re Tridon Pty. Ltd. and Collector of Customs (1982) 4 A.L.D. 615 at p.620). In our view, those rules would only have relevance here if it became necessary to consider the further question whether sub-para. 87.02.119 applies. In this connection, it is significant that the exception arises in the context of import licensing and not that of the tariff. It may be accepted that different considerations may well apply in the latter connection but, in our view, they do not assist here. Secondly, it is not necessary to consider what consequences, if any, flow from the fact that, although Act No. 30 of 1982 was not assented to until 19 May, 1982, it operated from a date prior to the date of the subject exception notice which is dated 30 March, 1982 (cf. Craies on Statute Law, 7th Ed. (1971) at p.404). Finally, we note that in the appeal Minister for Industry and Commerce v. Zyfert and Muller (supra) it was common ground between the parties that the only question to be determined was whether sub-para.87.02.119 applied. In this appeal, the matter was approached differently by the parties. No such common ground existed. It was necessary for this Court to determine the preliminary question whether the exception notice applied in the first instance. Having determined this question adversely to the appellant, it was not necessary for us to consider the next question, which was determined by the other Full Court in Zyfert and Muller, supra namely, whether the goods fell within sub-para.87.02.119.

The appeal is dismissed with costs.