Comptroller-General of Customs v Kawasaki Motors Pty Ltd
[1991] FCA 652
•04 NOVEMBER 1991
Re: COMPTROLLER-GENERAL OF CUSTOMS and GARRICK WILLIAM HAND
And: KAWASAKI MOTORS PTY LIMITED
No. N G405 of 1991
FED No. 652
Administrative Law - Customs
103 ALR 661
(1991) 32 FCR 243
(1992) 25 ALD 635 (extracts)
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont(1), Hill(2) and Heerey(3) JJ.
CATCHWORDS
Administrative Law - judicial review of errors of fact.
Administrative Law - judicial review - natural justice - statutory power - whether of legislative character - affect on community at large - whether natural justice applicable.
Customs - revocation of Commercial Tariff Concession Order - administrative order invalid - validity of order prior to making of consent order to set aside - effect on subsequent administrative order
Customs - revocation of Commercial Tariff Concession Order - applicability of criteria in s.269C(1)(a) and (b) Customs Act 1901 - whether provisions cumulative.
Administrative Decisions (Judicial Review) Act 1977: Ss.5(1)(b)(e), 5(2)(g), 5(3)(a), (b).
Customs Act 1901: Ss.269B(3), (5), 269C(1), 269P(1), (2).
Amcor Limited v Comptroller-General of Customs (1988) 79 ALR 221
Annetts v McCann (1990) 170 CLR 596
Attorney-General of Canada v Inuit Tapirisat (1980) 115 DLR (3d) 1
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Bates v Lord Hailsham (1972) 1 WLR 1373
Bread Manufacturers of New South Wales v Evans (1980) 38 ALR 93
Cohen v Jonesco London (1926) 1 KB 119
Commissioner of Police v Tanos (1958) 98 CLR 383
Dunlop v Woollahra Municipal Council (1982) AC 158
FAI Insurances Limited v Winneke (1982) 151 CLR 342
Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648
Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487
Hoffman-LaRoche and Co v Secretary of State for Trade and Industry (1975) AC 295
House v The King (1936) 55 CLR 499
J v Lieschke (1907) 162 CLR 447
Kinch v Walcott (1929) AC 482
Kioa v West (1985) 159 CLR 550
R v Electricity Commissioners (1924) 1 KB 171
Ridge v Baldwin (1964) AC 40
Salemi v MacKellar (No. 2) (1977) 137 CLR 396
Twist v Ranwick Municipal Council (1976) 136 CLR 106
Warren v Coombes (1979) 142 CLR 531
HEARING
SYDNEY
#DATE 4:11:1991
Counsel for the Appellants: P. Roberts
Solicitors for the Appellant: Australian Government Solicitor
Counsel for the Respondent: C. Stevens and B. Sullivan
Solicitors for the Respondent: Baker and McKenzie
ORDER
The appeal be allowed, with costs.
The orders made at first instance on 19 July 1991 be set aside; in lieu thereof, order that the application be dismissed, with costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
In proceedings for judicial review of an administrative decision, a judge of the Court ordered that the decision be set aside and granted consequential relief. The proceedings were brought by Kawasaki Motors Pty. Ltd. ("Kawasaki"), now the respondent, against the Comptroller-General of Customs ("the Comptroller") and his delegate, Garrick William Hand. The Comptroller and Mr Hand have appealed from the orders made at first instance. In order to understand the contentions of the parties on the appeal, it is first necessary to refer to the background facts.
The background facts
Since 1975, Kawasaki has imported, and distributed, "jet ski watercraft" which, it is common ground, are "ski craft, ride-on, direct drive, jet pump propelled" within the meaning of the Customs Tariff ("ski-craft"). In 1984, the Comptroller made a Commercial Tariff Concession Order ("TCO 8439946") pursuant to the provisions of Part XVA of the Customs Act 1901. On 11 September 1989, Hydro-Bike (Aust.) Pty. Ltd., claiming to be an Australian manufacturer of ski-craft known as "Thunderbolt", requested the Comptroller to revoke TCO 8439946 pursuant to the provisions of Part XVA of the Customs Act. On 4 October 1989, the Comptroller-General purported to revoke TCO 8439946. On 2 May 1990, Kawasaki instituted proceedings in this Court (No. G228 of 1990) for judicial review of the administrative decision to revoke TCO F439946. On 9 July 1990, the Australian Government Solicitor informed Kawasaki's solicitors that (1) a new decision to revoke TCO 8439946 had been made on 6 July 1990; and (2) the Comptroller and Mr Hand consented to orders being made in proceedings No. G228 of 1990 setting aside the decision under review in those proceedings. In that matter, on 20 July 1990, Davies J. made orders, by consent, inter alia, that:
"1. The decision of (Mr Hand) made on or about 4 October 1989 to revoke Tariff Concession Order No. 8439946 in respect of ski craft be set aside."
The proceedings at first instance
On 21 September 1990, Kawasaki instituted the present proceedings under the Administrative Decisions (Judicial Review) Act 1977 and under s.39B of the Judiciary Act 1903. The learned primary judge, after a contested final hearing, for the reasons he then gave, made orders (1) declaring that the purported revocation of TCO 8439946 made on 6 July 1990 was null and void, that as from 6 July 1990, no customs duty was payable with respect to Kawasaki's ski-craft; and (2) setting aside the decision made on 6 July 1990 to revoke TCO 8439946. The judge also made consequential orders. All of these orders are the subject of the present appeal.
The legislative schemeAs has been noted, the relevant legislative scheme is found in Part XVA of the Customs Act 1901 which, so far as is presently material, is as follows.
(1) The making of a concession orderBy s.269G(1) of the Customs Act, a person may make an application to the Comptroller for a concession order in respect of particular goods. By s.269C(1), subject to the other provisions of Part XVA, where the Comptroller, after considering an application under s.269G, is satisfied that -
"(a) goods serving similar functions to the particular goods are not produced in Australia; and
(b) goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business"
the Comptroller shall make a written order (known as a Commercial Tariff Concession Order: see s.269C(1C)) declaring that the particular goods are goods to which a prescribed item specified in the order applies.
By s.269B(1), "prescribed item" means an item in Schedule 4 to the Customs Tariff Act 1987 that is expressed to apply to goods that a Commercial Tariff Concession Order declares are goods to which the item applies.
By s.269B(3), identical goods shall be taken to serve similar functions; and by s.269B(4), without limiting s.269B(3), goods shall be taken to serve similar functions to other goods unless the Comptroller is satisfied that, if both goods were readily available for sale throughout Australia, there would be no significant part of Australia in which there would be significant cross-elasticity of demand between the goods. By s.269B(5), goods, other than unmanufactured raw products, shall not be taken to have been produced in Australia unless:
(a) the goods were wholly or partly manufactured in Australia; and
(b) not less than 1/4 of the factory or works cost of the goods is represented by the sum of:
(i) the value of labour of Australia;
(ii) the value of materials of Australia; and
(iii) the factory overhead expenses incurred in Australia in respect of the goods.
By s.269B(7), a person shall be taken to be capable of producing goods in the normal course of business if, in the normal course of business, he is prepared to accept orders for the supply of such goods that have been, are being, or are to be, produced by him.
By s.269L, the Comptroller shall not make a concession order unless he has published in the Gazette a notice inviting any persons who consider that there are reasons why the order should not be made to submit particulars of those reasons. By s.269M(1), a Concession Order shall be published in the Gazette as soon as practicable after it is made.
(2) The revocation of a concession orderWith respect to the revocation of concession orders, by s.269P(1), where the Comptroller became satisfied at any time during which a concession order in respect of particular goods is in force that if -
"(a) that order were not in force at that time; and
(b) an application were to be made at that time for a concession order in respect of the particular goods;"
a concession order would not be made in respect of the particular goods, the Comptroller may, in his discretion, by order in writing, revoke the order.
By s.269P(2), the circumstances in which the Comptroller may exercise his discretion under s.269P(1) not to revoke a concession order include, but are not limited to, the case where he considers that the revocation of the concession order would give an unfair advantage to any person. By s.269P(2A), where the Comptroller becomes satisfied that a concession order that is in force has become obsolete, the Comptroller may, by order in writing, revoke the concession order.
The reasoning at first instanceThe judge granted Kawasaki the relief it sought for several alternative reasons, all of which are now challenged on the appeal. In the first place, his Honour held that, as at 6 July 1990, the first TCO having been revoked on 4 October 1989, there was no TCO in force at that date; it followed that the second attempt, on 6 July 1990, to revoke the TCO was ineffective because, at that date, there was nothing to revoke, the TCO having gone in October 1989; and it was not to the point that, shortly thereafter, on 20 July 1990, the revocation order made in October 1989 was declared by the Court, by consent, to have been invalid.
Was the revocation of the TCO in July 1990 a nullity because of the purported revocation of the TCO in October 1989?
(1) The factsThe facts which are relevant for this purpose have been outlined. The details are as follows.
As has been said, on 2 May 1990, Kawasaki instituted proceedings challenging the validity of the revocation, in October 1989, of the TCO. On 6 July 1990, Mr Hand made a further revocation order in these terms:
"COMMERCIAL TARIFF CONCESSION REVOCATION ORDER
In pursuance of Section 269P(1) of the Customs Act 1901, I GARRICK WILLIAM HAND a delegate of the Comptroller, hereby revoke Commercial Tariff Concession Order No.: 84.39946 made on the 2nd day of August 1984, and represented by the Schedule of Concessional instruments reference(s) set out in THE TABLE below. This order of revocation shall have effect on and from sixth day of July 1990.
THE TABLE
Description of Prescribed
Particular Goods Item No.
Column 2 Column 3
SKI CRAFT, ride on, direct TC8439946 50 drive, jet pump propelled
Op. 1.1.88"
On 9 July 1990, the Australian Government Solicitor wrote to the solicitors for Kawasaki as follows:
"FEDERAL COURT PROCEEDINGS NO. G228 OF 1990 KAWASAKI PTY LTD v COMPTROLLER-GENERAL OF CUSTOMS AND ANOR. Thank you for your letter dated 6 July 1990 in the above matter providing your reply to my request for further and better particulars of the Amended Application and Statement of Claim.
I am instructed that a new decision to revoke was made by the second respondent, a delegate of the first respondent on 6 July 1990. I enclose a copy of the instrument of revocation for your information.
Accordingly, my clients will consent to orders setting aside the decision under review and will agree to pay your client's costs.
The Australian Customs Service will, upon application in the usual manner, refund the subject duty paid by your client from October 1989 to 6 July 1990. Please note, however, that interest will not be paid on the duty collected. I note that pursuant to the orders made by his Honour Mr Justice Davies on 8 June 1990 the respondents are to file and serve their defence by 18 July 1990. In view of the fresh decision to revoke I do not propose to file and serve a defence at this stage and I await your advice on your client's instructions in relation to the above."
(2) The legal consequences
It is clear that, on 6 July 1990, Mr Hand was aware of the challenge to the validity of the revocation order purportedly made in October 1989. It is also clear that, by 6 July 1990, Mr Hand had decided not to resist that challenge. Although the 1990 revocation order did not, in its terms, refer to the 1989 revocation order, it is plain that Mr Hand intended that the 1990 order would take the place of the 1989 order. In other words, in my view, the 1990 order should be treated as superseding by implication and thus itself purporting to revoke, the 1989 order. The question of law remains whether Mr Hand had power to do this.
In my opinion, Mr Hand, as the delegate of the Comptroller, had an implied, or incidental, power to revoke a revocation order the validity of which had been challenged on grounds which appeared to be substantial. As has already been said, I am further of the view that, in the exercise of his power to make the 1990 revocation order, Mr Hand, by implication, also exercised his implied statutory power to revoke the 1989 order.
To revert to the question whether the Comptroller or his delegate had any implied power to revoke a revocation order of doubtful validity; it is, of course, clear that the Comptroller and his delegate had express power to make, and to revoke, a TCO. As a necessary incident of these express powers, should there be implied a power also to revoke a revocation order where a doubt, on grounds which appear to be substantial, has been raised as to the validity of that order?
In his work, The Australian Federal System, Professor Lane says (at 339):
"Any grantee of power, whether constitutional, corporate or a private individual, receives (i) expressly, his main power; and (ii) impliedly, an in-built power to do all things necessary or...proper to give effect to his main power. This principle of implied incidental powers is not peculiar to constitutional law but applies wherever power is conferred. It arises from the necessity of the case, that is, the principle is necessary to make any conferral of power effective."
See also Professor Zines, The High Court and the Constitution, 2nd ed. at 33,328.
In D'Emden v Pedder (1904) 1 CLR 91, Griffith C.J. said (at 110):
"...where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective. This is, in truth, not a doctrine of any special system of law, but a statement of a necessary rule of construction of all grants of power, whether by unwritten constitution, formal written instrument, or other delegation of authority, and applies from the necessity of the case, to all to whom is committed the exercise of powers of government."
See also Keen Mar Corporation Pty. Ltd. v Labrador Park Shopping Centre Pty. Ltd. (1989) 67 LGRA 238 at 241.
In my opinion, the grant of a power to make, and to revoke, concession orders is made effective by the implication of a power to revoke a revocation order the validity of which has been called into serious question. In order to make the regime established by Part XVA of the Customs Act work effectively, it is necessary, I think, to imply a power to remove genuine doubts as to the validity of a revocation order, which doubt could threaten the effective working of the system, by construing Part XVA in such a way as to confer the power to revoke the doubtful revocation order.
It follows, in my view, that the challenge to the 1990 revocation order fails insofar as that challenge is based on the lack of any subject matter. In substance, if not in form, Kawasaki's contention was that the 1990 order was beyond power. It is true that Kawasaki's argument was put in terms of futility and ineffectiveness. These are not, themselves, grounds of constitutional or administrative invalidity, although they may indicate a challenge on the ground of lack of reasonableness. As Michael Taggart pointed out in his contribution "Rival Theories of Invalidity in Administrative Law: Some Practical and Theoretical Consequences" (in Judicial Review of Administrative Action in the 1980s) at 93-4:
"Up to the present day the organizing principle in Anglo-Australasian administrative law has been the ultra vires doctrine."
Once it is accepted, as I think it must be, that the 1990 order revoked, by necessary implication, the 1989 revocation order, the basis for the challenge no longer exists.
On behalf of Kawasaki, it was suggested that an analogy might be found in the notion that, in certain circumstances, an administrative officer can become "functus officio" (see R v Moodie (1977) 17 ALR 219 at 225). But, as Stephen, Murphy and Aickin JJ. said in Moodie (at 225), this was because "at that stage, there (was) no further function under the Act for the authorised person to perform (see also Re Bloomfield (1981) 4 ALD 204 at 208-210). The question remains whether, on the true construction of the statute, any function actually remained to be performed (see also The Collector of Customs v L.N.C. (Wholesale) Pty. Ltd., Davies J., unreported, 21 November 1989 at 10).
Some administrative decisions, once communicated, may be irrevocable. But where it appears to a decision-maker that his or her decision has proceeded upon a wrong factual basis or has acted in excess of power, it is appropriate, proper and necessary that the decision-maker withdraw his or her decision. In Rootkin v Kent County Council (1981) 2 All ER 227, Lawton L.J. said (at 233):
"It was submitted to us on the authority of a number of cases, of which the last in order of time was Re 56 Denton Road, Twickenham, Middlesex...that what the divisional education officer was doing was making a determination and, having once made a determination, he was not entitled to go back on it. In my judgment, that is a misconception. It is the law that if a citizen is entitled to payment in certain circumstances and a local authority is given the duty of deciding whether the circumstances exist and if they do exist of making the payment, then there is a determination which the local authority cannot rescind. That was established in Livingston v Westminster Corpn... But that line of authority does not apply in my judgment to a case where the citizen has no right to a determination on certain facts being established, but only to the benefit of the exercise of a discretion by the local authority. The wording of s 55(2) of the 1944 Act is far removed from the kind of statutory wording which was considered in Re 56 Denton Road, Twickenham and Livingston v Westminster Corpn. I cannot, for my part, see any basis for the submission that the decision of the divisional education officer in July 1976 was irrevocable when he found out what the true facts were."
Rootkin's Case was followed in Jones v Commissioner of Police (1990) 20 ALD 532 at 533.
To summarise, I am of the opinion that there was an implied power to revoke an order, including a revocation order, and that Mr Hand exercised that power on 6 July 1990. It follows, in my view, that the revocation order which was made on 6 July 1990 was not invalid on the ground that it lacked a subject matter on which to operate.
The other challenges to the revocation order
With respect to the other arguments advanced by Kawasaki to maintain that the 1990 revocation order was void, I have had the advantage of reading the judgment of Hill and Heerey JJ. I agree with their conclusions on these matters and with their reasons.
I would allow the appeal with costs, and set aside the orders made at first instance; in lieu thereof, it should be ordered that the application be dismissed, with costs.
JUDGE2
The respondent Kawasaki Motors Pty Limited ("Kawasaki") imports jet skis from Japan. Jet skis are motorised water craft ridden by an operator who sits astride the machine like a motorcycle rider. They meet the description in the Customs Tariff of "ski craft, ride-on, direct drive, jet pump propelled".
This case is concerned with a Commercial Tariff Concession Order ("TCO") granted under Part XVA of the Customs Act 1901 ("the Customs Act") in respect of ski craft and the revocation of that TCO.
On 31 July 1984 TCO 8439946 was granted in respect of jet skis as described.
An Australian company called Hydro-Bike (Aust) Pty Ltd ("Hydro-Bike") was, or claimed to be, the manufacturer in Australia of a jet ski called the "Thunderbolt". On 11 September 1989 Hydro-Bike applied for revocation of the TCO and the revocation was purportedly made on 4 October 1989. However on 2 May 1990 Kawasaki commenced proceedings No. NG 228 of 1990 in this court under the Administrative Decisions (Judicial Review) Act 1977 ("the AD(JR) Act") challenging that revocation. The application alleged that there had been a breach of the rules of natural justice, that procedures required by law had not been observed, that the decision was not authorised by the enactment in pursuance of which it was purportedly made, that it was an improper exercise of the power conferred by that enactment, that the decision involved an error of law, that there was no evidence or other material to justify the making of the decision and that the decision was otherwise contrary to law. Most, if not all, of those grounds would result in the decision being void ab initio were they to be established.
Customs took the view that this application was likely to succeed in that they "would have difficulty defending the decision on the evidence available to the decision-maker", to quote the evidence of Mr Paul O'Connor, the Director of the Court Section of the Customs service. Indeed in an affidavit sworn in these proceedings Mr O'Connor deposes that following the commencement of proceedings No. NG 228 of 1990 "it was accepted by the decision-maker that the said decision (of 4 October 1989) was invalid".
On 9 July 1990 the Australian Government Solicitor wrote to Kawasaki's solicitors referring to some further and better particulars which had been provided by Kawasaki. The letter continued:
I am instructed that a new decision to revoke was made by the second respondent, a delegate of the first respondent, on 6 July 1990. I enclose a copy of the instrument of revocation for your information.
Accordingly, my clients will consent to orders setting aside the decision under review and will agree to pay your client's costs.
The letter further advised that duty paid from October 1989 to 6 July 1990 would be refunded, although without interest. The question whether Kawasaki was entitled to interest is the subject of another appeal to the Full Court of this court.
The decision of 6 July 1990 to revoke the TCO is attacked in the present proceedings, No. NG 405 of 1990, which were commenced on 21 September 1990. In the meantime, on 20 July 1990, Davies J. had made orders by consent in No. NG 228 of 1990 in the following terms:
1. The decision of the second respondent made on or about October 4, 1989 to revoke Tariff Concession Order No. 8439946 in respect of ski craft be set aside.
2. The respondent pay the costs of the applicant of these proceedings to date.
2a. The question of the refund of the overpaid duty and the question of interest thereon be reserved.
3. Proceedings stood over to August 10, 1990 at 9:15am for liberty for any party to apply on two days notice.
Was there a TCO to Revoke on 6 July 1990?
Before the learned primary judge in the present proceedings Kawasaki argued that on 6 July 1990 the October 1989 revocation was still in force and remained so until the consent order of Davies J. fourteen days later. Therefore as at 6 July 1990 there was no TCO to revoke and hence the purported revocation of 6 July 1990 was a nullity. This argument was accepted by his Honour.
The decision on that point resolved the case in favour of Kawasaki. However his Honour went on to consider other attacks made on the order of 6 July 1990. Some of these attacks were rejected by his Honour but repeated by Kawasaki before us. We shall consider these shortly, but turn first to what might be called the futility point.
Where an administrative order is challenged in the courts, there is considerable debate as to the interim validity of the order, that is to say the legal effect to be given to it pending a decision in the litigation. In Hoffman-LaRoche and Co v Secretary of State for Trade and Industry (1975) AC 295 the House of Lords held that there is a presumption of validity in favour of a disputed order during the time that must elapse before the court can decide the question.
The question at issue was whether the Crown should be granted an interim injunction to enforce an order having the force of law, the validity of which was to be challenged, without the necessity of giving an undertaking as to damages.
In the circumstances of the case, their Lordships were of the view (Lord Wilberforce dissenting) that the Crown was entitled to an injunction. Lord Reid, although of the view that an order made under statutory authority was as much the law of the land as an Act of Parliament unless and until it is found to be ultra vires, considered that it was for the party against whom the interim injunction was sought to show "special reasons" which justice required that the injunction should not be granted or be granted on terms: (1975) AC at p 341.
Lord Morris of Borth-y-Gest (at p 350) spoke of the invidious position that would arise if a court of law declined to enforce a law in a manner directed by Parliament. Lord Cross expressed the view (at p 371) that there could be exceptional circumstances where an injunction enforcing a law claimed to be invalid would be refused. However, the appellants had failed to show an argument which was prima facie so strong that an interim injunction should not be granted without an undertaking as to damages.
Lord Diplock said (at p 365):
Under our legal system, however, the courts as the judicial arm of government do not act on their own initiative. Their jurisdiction to determine that a statutory instrument is ultra vires does not arise until its validity is challenged in proceedings inter partes either brought by one party to enforce the law declared by the instrument against another party or brought by a party whose interests are affected by the law so declared sufficiently directly to give him locus standi to initiate proceedings to challenge the validity of the instrument. Unless there is such challenge and, if there is, until it has been upheld by a judgment of the court, the validity of the statutory instrument and the legality of acts done pursuant to the law declared by it are presumed. It would, however, be inconsistent with the doctrine of ultra vires as it has been developed in English law as a means of controlling abuse of power by the executive arm of government if the judgment of a court in proceedings properly constituted that a statutory instrument was ultra vires were to have any lesser consequence in law than to render the instrument incapable of ever having had any legal effect upon the rights of duties of the parties to the proceedings (cf Ridge v Baldwin
(1964) AC 40).
Later, his Lordship said (at pp 366-367):
Their only answer to the application for an interim injunction to enforce the order against them is that they intend to challenge its validity. It is not disputed that they have locus standi to do so, but this does not absolve them from their obligation to obey the order while the presumption in favour of its validity prevails - as it must so long as there has been no final judgment in the action to the contrary.
It will be observed that in Hoffman-LaRoche no court had passed upon the validity of the order. What was involved was the status of the order prior to invalidity being determined. The case throws no light upon the position where, as here, an order of the court has been made setting aside the order with the consequence that it is to be treated as void ab initio.
The Privy Council in Dunlop v Woollahra Municipal Council (1982) AC 158 rejected the claim of the plaintiff for compensation by way of damages for losses sustained during the period in which the development of his land had been restricted by resolutions of the defendant council. These resolutions had been challenged by the landowner and held by the New South Wales Supreme Court to be invalid. The Privy Council said (at p 172):
The effect of the failure (to give the plaintiff a hearing) is to render the exercise of the power void and the person complaining of the failure is in as good a position as the public authority to know that that is so. He can ignore the purported exercise of the power. It is incapable of affecting his legal rights.
Professor Wade (Administrative Law, 6th Edition, p 347) criticises this view as "unrealistic" and argues that void acts should be treated as operative de facto so "the courts can escape from the more inconvenient consequences of carrying their doctrine of nullity to its logical conclusions" (p 348).
However in our opinion the short answer in the present case is that problems of the kind mentioned only arise during such time as the validity of the relevant order is in dispute. Indeed Professor Wade discusses this issue under the heading "Interim Effect of Disputed Orders". In the present case, by 6 July 1990 there was for all practical purposes no relevant dispute. Customs had accepted that the application to set aside the order of 4 October 1989 was likely to succeed. Counsel for Kawasaki sought to rely on the fact that Mr O'Connor's view of the prospects of success in the Federal Court proceedings were expressed in something less than an expectation of absolute certainty of defeat, but we think nothing turns on such a distinction. Customs, having taken legal advice, had reached the decision not to defend the order of 4 October 1989 in the courts and indeed had resolved to pay Kawasaki's costs. The reality is that Customs were treating the order of 4 October 1989 as not validly made.
Ordinarily a person adversely affected by an administrative order which the decision-maker subsequently accepts has not been validly made would be only too ready to agree that the order should be treated as void. In the present case it is only the circumstance that an attack is made on a later order which has resulted in Kawasaki taking the paradoxical position of urging the validity, at least temporarily, of an invalid order made against its interests. But the question whether an administrative order can effectively be treated as void by the decision-maker without the need for any order of a court has to be considered as a matter of principle independently from the particular circumstances of this case.
It would in our opinion be strange if an administrative order remained valid until set aside by an order of a court even though the decision-maker did not seek to uphold the order. Courts have long recognised the rule of policy that there is a public interest in the avoidance of litigation and the termination of litigation by agreement when it has commenced. The argument that disputed orders could not be treated, by agreement of all concerned, as void would directly conflict with that rule. Parties would be forced into pointless and wasteful litigation.
For much the same reasons, we do not accept the argument that in making the order of 4 October 1989 the decision-maker had exhausted all the powers that were available to him. This really begs the question whether there was a valid exercise of those powers on 4 October 1989. Customs has accepted there was not.
A separate basis for rejecting Kawasaki's argument is to be found in the consent order made by Davies J. on 20 July 1990. Absent some invalidating element such as fraud or duress, of which there is no suggestion here, an order "which in other respects answers to the description of a res judicata is nonetheless so because it was made in pursuance of a consent and agreement of the parties": Spencer Bower on Res Judicata (p 37); Cohen v Jonesco London (1926) 1 KB 119 at p 125; Kinch v Walcott (1929) AC 482 at p 493. As between Kawasaki and Customs, Davies J.'s order of 20 July 1990 establishes conclusively that the purported order of 4 October 1989 was void and, having regard to the nature of application NG 228 of 1990, void ab initio.
Production and Capacity to ProduceKawasaki sought to uphold the decision of the learned trial judge on a number of alternative grounds which arise for consideration if, as we have found, the earlier purported revocation of 4 October 1989 did not in the circumstances have the effect that the revocation of 6 July 1990 could not be made.
Before going to this part of the case it will be necessary to set out the relevant statutory provisions.
The power to make TCOs is found in s.269C(1) of the Customs Act which provides:
Subject to this Part, where the Comptroller, after considering an application under section 269G for the making of an order under this section in respect of particular goods, is satisfied that -
(a) goods serving similar functions to the particular goods are not produced in Australia; and
(b) goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business, the Comptroller shall make a written order, declaring that the particular goods are goods to which a prescribed item specified in the order applies.
In s.269B(3) it is provided:
For the purposes of this Part, identical goods shall be taken to serve similar functions.
In s.269B(5) it is provided:
For the purposes of this Part, goods, other than unmanufactured raw products, shall not be taken to have been produced in Australia unless -
(a) the goods were wholly or partly manufactured in Australia; and
(b) not less than 1/4 of the factory or works cost of the goods is represented by the sum of -
(i) the value of labour of Australia;
(ii) the value of materials of Australia; and
(iii) the factory overhead expenses incurred in Australia in respect of the goods. The revocation of TCOs is provided for in s.269P(1): Where the Comptroller becomes satisfied at any time during which a concession order in respect of particular goods is in force that, if -
(a) that order were not in force at that time; and
(b) an application were to be made at that time for a concession order in respect of the particular goods, a concession order, or a concession order specifying the item that is specified in the first-mentioned concession order, would not be made in respect of the particular goods (whether by reason that the order would relate to all the particular goods, to goods included in a class of the particular goods or otherwise), the Comptroller may, in his discretion, by order in writing revoke the first-mentioned concession order.
In substance therefore the exercise of revoking a TCO involves considering and refusing a notional application for a TCO for the goods concerned. The same criteria as those prescribed by s.269C(1) are to be considered, although s.269P provides for an additional discretion. As to that, s.269P(2) provides:
The circumstances in which the Comptroller may exercise his discretion under sub-section (1) not to revoke a concession order include, but are not limited to, the case where he considers that the revocation of the concession order would give an unfair advantage to any person.
The statement of reasons under s.13 of the AD(JR) Act dated 24 August 1990 was made by Mr Ronald George Houston "acting in the position and carrying out the duties of Garrick William Hand" who was the relevant decision-maker. Some criticism was made of the fact that the decision-maker himself did not make the s.13 statement but, as we understand it, this was not advanced as a separate ground of invalidity. The statement contains the following findings on the material questions of fact:
1. On 2 January 1990 Mr W. O'Brien of the Australian Customs Service contacted Mr R. Woodleigh, Managing Director of Hydo-Bike (Aust) Pty Limited. Mr O'Brien was informed, amongst other things, that the company had officially launched their "jet-ski" on that day and that descriptive material and a video would be forwarded to the Australian Customs Service by the end of the week.
2. On 14 February 1990 Mr G. Hand visited the premises of Hydro Bike (Aust) Pty Limited and interviewed Mr R. Woodleigh, its Managing Director in relation to the local manufacture of jet skis. On 28 February 1990 Mr Hand wrote a Minute to his superviser in which he reported upon his visit to those premises. Of particular significance are the following extracts from that Minute:
"Mr Woodleigh advised that the company is in the process of changing its name to THUNDERBOLT JET SKIS and relocating the factory to Unit 3 Taree Street, Burleigh Heads, Phone No. (075) 934472."
....
"A Jet Ski was on firm order (deposit paid) and the ski was close to completion. It was to be delivered to Stoney Creek Motor Cycles, Sydney by Monday 19 February."
3. The Minutes states that Mr G. Hand was advised that the company was changing its name to Thunderbolt Jet Skis Pty Limited with Mr Woodleigh still as Managing Director. Significantly, the Minute also states that the company:
"...has manufactured a proven prototype, is currently actively seeking orders, has a lease for factory premises with options, has obtained necessary patents, finance arranged, prepared advertising etc and is dedicated to the production of an Australian made jet ski."
4. As a result of that visit Mr G. Hand was satisfied that the company had a firm order for a jet ski, a number of inquiries for orders and was provided with projected production figures.
5. Mr G. Hand was also satisfied that Thunderbolt Jet Skis Pty Limited (formally Hydro-bike (Aust) Pty Limited had produced a proven prototype and was actively seeking orders for the supply of jet skis.
6. In a letter dated 23 April 1990 Mr Woodleigh wrote to the Australian Customs Service providing photographs of the Thunderbolt Jet Skis Pty Limited jet ski assembly line and advising of the production level of jet skis and the average construction time.
7. On 25 May 1990 Thunderbolt Jet Skis Pty Limited wrote to the Australian Customs Service. Enclosed with the letter was a video illustrating the operation of the jet ski, together with an invoice evidencing the sale on 25 May 1990 of one jet ski to a New South Wales company.
8. On 14 June 1990 the General Manager of Thunderbolt Jet Skis Pty Limited Ms K. Chaffey wrote to the Australian Customs Service and stated the following: "I confirm that Thunderbolt Jet Skis Pty limited is now in full production with regards to the manufacture of 'Australian Made Jet Skis', and have all the components to complete
(..) units.
Of these (..) units, (..) fully completed and being used for promotions and advertising purposes. Of the remaining (..), (..) are fitted with motors and only require the finishing touches."
(The deletions were made to preserve confidentiality.)
9. An article in the Gold Coast Bulletin of 29 June 1990 entitled "Jet Ski maker takes on the world" cites states that Thunderbolt Jet Skis Pty Limited was soon launching the jet ski in competition with Kawasaki Ltd. The article is not inconsistent with the local manufacturers' intention to launch the jet ski and with the production of a limited quantity for sale.
10. On 6 July 1990 as delegate of the Comptroller-General of Customs in respect of the previously mentioned legislation, Mr G. Hand revoked the TCO. The statement contained the following reasons for decision:
11. In coming to the decision to revoke the TCO on 6 July 1990, Mr Hand, as delegate of the Comptroller-General had to be satisfied that if the Order were not in place and an application were to be made as at that date for a concession order in respect of "SKI CRAFT, ride on, direct drive, jet pump propelled" such an application would not have been granted.
12. This required him to address the provisions of section 269C of the Act and the definitions contained within section 269B. To this end, Mr Hand had to be satisfied that goods serving similar functions were not produced in Australia or such goods were not capable of being produced in Australia in the normal course of business.
13. Mr Hand has noted on the relevant file that Thunderbolt Jet Skis Pty Limited provided information concerning the jet ski that it had produced or was in the course of producing. He also had before him information described in paragraphs 5 to 12. Mr Hand had to consider if the jet ski craft of the latter company could constitute "identical goods" (within the meaning of sub-section 269B(3) of the Act) to those falling within the TCO. On the basis of the information available in the relevant file I consider that it likely that Mr Hand did consider that the jet ski was such.
14. On the basis of the information on the relevant file, Mr Hand did consider whether there was any cross-elasticity of demand (within the terms of sub-section 269B(4) of the Act) between the jet ski of Thunderbolt Jet Skis Pty Limited and the craft described in the TCO.
15. The jet ski produced by Thunderbolt Jet Skis Pty Limited is, on the information provided by the latter company, a jet powered ski craft. It is used for recreational purposes and is a craft falling within similar applications to craft falling within the TCO. If it is assumed that the jet ski and craft falling within the TCO were available within any market, any decrease in the price of the imported craft would result in a decrease in the demand for Thunderbolt Jet Skis Pty Limited's craft.
16. The information provided by Thunderbolt Jet Skis Pty Limited and available to Mr Hand demonstrates that the jet ski was in the stage of being launched upon the market and there had been production of one if not more jet skis. The existance of quotations, orders and an invoice for the sale of one unit and the action taken by the company to retain a Marketing Consultant indicates that the jet ski was available for order and sale in the ordinary course of business.
17. Mr Hand did accept that Thunderbolt Jet Skis Pty Limited had demonstrated a production capacity for jet skis and that the company had manufactured a jet pump propelled, direct drive, ride on ski craft and that there was cross elasticity of demand between the company's craft and those referred to in the TCO.
18. In my opinion, based on the information contained in the relevant file Mr Hand determined that had the TCO not been in place and had he received an application for a tariff concession order in relation to "jet pump propelled, direct drive, ride on, ski craft" that concession would not have been grated. On 6 July 1990 Mr Hand revoked the TCO.
In the hearing before us it was substantially accepted that Hydro-Bike's product and Kawasaki's product were "identical goods" within the meaning of s.269B(3) and therefore were to be taken as "serving similar functions". However his Honour then proceeded into an area of inquiry, the nature of which is summarised in the following passage from his judgment:
Finally, a question arises in s.269C(1) as to whether, assuming identity or functional similarity between the Thunderbolt and the Kawasaki product as described in the TCO, it can be said that there was sufficient evidence to justify a finding that as at 6 July 1990 the Thunderbolt jet ski/bike was being produced in Australia and was capable of being produced here in the normal course of business. The respondents came to the conclusion that there was such evidence.
After reviewing the evidence before him, his Honour concluded: The evidence presented at this hearing could not found a proper conclusion that identical or functionally similar goods were actually being produced in Australia or were capable of being produced here in the normal course of Thunderbolt's business.
In our respectful opinion, this approach was incorrect. The criteria in s.269C(1)(a) and (b), made applicable in the case of a proposed revocation by virtue of s.269P(1), are not cumulative. If the decision-maker is not satisfied that goods serving similar functions to the particular goods are not produced in Australia, that is the end of the matter. It is not necessary to go on to consider whether goods serving similar functions are capable of being produced in Australia. It can be noted at this point that his Honour made reference to Amcor Limited v Comptroller-General of Customs (1988) 79 ALR 221, a decision of the Full Court. However Amcor was concerned with the criterion imposed by s.269C(1)(b), that is to say capability of being produced, and in particular whether the goods in question were capable of being produced in Australia "in the normal course of business".
Error of FactIn the present case, as the s.13 statement makes clear, the prior question of actual production was considered; see especially paras. 2, 3, 4, 5, 6, 7, 16 and 17 (supra). It has to be steadfastly kept in mind of course that the decision-maker had to be satisfied that relevant goods were not produced in Australia. Plainly a finding of fact was involved. The applicability of judicial review under the A.D.(J.R.) Act to such a finding was considered by Mason C.J. in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at p 340. His Honour said:
.....in ordinary circumstances, a finding of fact, including an inference drawn from primary facts, will not constitute a reviewable decision because it will be no more than a step along the way to an ultimate determination. Of course an ultimate determination which depends upon a finding of fact vitiated by error of law or made without evidence is reviewable: see s.5(1)(f) and (h). In such a case the finding of fact may be challenged as an element in the review of the ultimate determination. But the point remains that ordinarily a finding of fact will not be susceptible to review independently of the ultimate decision.
Powerful considerations support the correctness of this view. The Administrative Appeals Tribunal Act 1975 (Cth) ("the A.A.T. Act") provides specifically for review on the merits by the Administrative Appeals Tribunal. It is scarcely to be supposed that the Parliament, in so providing, nevertheless intended to invest the Federal Court with a similar jurisdiction under the A.D.(J.R.) Act, for that would be the effect of that Act if it were to confer jurisdiction to review findings of fact generally. Indeed, the concept of judicial review which finds literal expression in the title of the A.D.(J.R.) Act and in its operative provisions tells against the existence of such a wide jurisdiction. The expression "judicial review", when applied to the traditional review functions of the superior courts in our system of justice, exercisable by means of the prerogative writs and the grant of declaratory relief and injunction, ordinarily does not extend to findings of fact as such. To expose all findings of fact, or the generality of them, to judicial review would expose the steps in administrative decision-making to comprehensive review by the courts and thus bring about a radical change in the relationship between the executive and judicial branches of government. Amongst other things, such a change would bring in its train difficult questions concerning the extent to which the courts should take account of policy considerations when reviewing the making of findings of fact and the drawing of inferences of fact.
At pp 355-360 of his judgment, Mason C.J. reviewed the law bearing on judicial review under the AD(JR) Act of administrative decisions on error of fact. We shall not repeat the whole of that passage in this judgment, but particular attention might be paid to the following remarks of his Honour (at p 356):
Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.
(His Honour's emphasis.)
Brennan J. (at p 365) agreed with the judgment of Mason C.J. and Toohey and Gaudron JJ. (at p 387) stated their Honours' "general agreement with the observations of Mason C.J. as to the grounds upon which factual findings may be reviewed".
Before the learned primary judge evidence was given about the Thunderbolt jet ski. This included evidence from Mr John McCaffrey, a mechanical engineer from the New South Wales University of Technology, which was to the effect that the Thunderbolt jet ski "is not a production item but rather it appears... to be an early stage proto-type. The subject Thunderbolt jet ski is not... of merchantable quality." Mr McCaffrey expressed concern for the safety of riders of the Thunderbolt jet ski which he examined and its environmental impact on Australia's waterways, difficulties in availability of spare parts and servicing and warranty performance. He concluded by stating the view that "the sale on a commercial basis of the Thunderbolt jet ski which I examined would be a disservice to the Australian manufacturing industry as a whole and would discredit Australia's reputation as an exporter of quality, presentable and reliable products". Mr McCaffrey expressed his agreement with a technical report by a Mr Murray Sayle, who also gave evidence before his Honour. That report extends over almost six pages of single-spaced typing. It contains detailed criticism of the mechanical features of the Thunderbolt jet ski and compares it most unfavourably with the Kawasaki jet ski. There was also some evidence about a newspaper article announcing a launch of the Thunderbolt jet ski.
The approach which his Honour took to these factual matters appears from the following passage from the judgment:
Accepting orders
Kawasaki submitted that the respondent had regard to a number of irrelevant considerations. Some of the considerations pointed to are that Thunderbolt:
1. planned to market its jet skis worldwide;
2. was actively seeking orders;
3. provided a quote for supply to the Philippines. Following the views of the Full Court in Amcor, as I must, I find that these considerations were relevant to the question whether the local manufacturer was accepting orders in the normal course of business.
Supply
I agree with Kawasaki's submission that the respondents should have asked themselves and determined whether the Thunderbolt product was commercially marketable; that is, they should have addressed the question whether Thunderbolt was capable of supplying the orders it was seeking.
Again, Kawasaki submitted that a number of irrelevant considerations were taken into account, namely that Thunderbolt:
4. had obtained relevant patents and trade names;
5. had stocks of engines and could obtain other parts at short notice;
6. showed the jet ski in use on video. I find that these considerations were relevant to the issue of ability to produce but not of sufficient substance and weight to found a conclusion that Thunderbolt was producing or capable of producing an identical product to the Kawasaki jet ski described in the TCO within the ordinary course of business. Kawasaki submitted that the Australian jet ski product was as at 6 July 1990 not yet manufactured but was merely a prototype or, as it was described at the hearing, a "home-made back yard jet ski". The one jet ski sold by the Australian manufacturer was not a production model. Mr McCaffrey testified that there was a fine line between seeing this particular model as a poor quality product or as a prototype. He also testified that in order for this particular jet ski to be produced on a production or manufacturing line, what was needed was "total redesign, retesting and then tooling up for the manufacturer. That could be anything from three months to one year." I accept this evidence.
As with the cross elasticity test, the respondents argued that the quality of the Australian product was not a relevant consideration. They also submitted that there was no evidence to suggest that the quality was so inferior as to require the exercise of a discretion not to revoke.
On this issue, both these submissions are clearly wrong. The Full Court in Amcor stated that to achieve the statutory capability to supply the goods, they must be of an acceptable quality. The evidence established that the single Thunderbolt jet ski produced was qualitatively inadequate. It may even still be experimental or at least still be in a developmental phase. In other words, Thunderbolt was unable to supply a jet ski of sufficient quality to comply with the features of the "competitive environment" which Amcor requires. Kawasaki further submitted that, having regard to the conflict between the information in the newspaper article and other information, and in the context of earlier misstatements as to when production would be occurring, the respondents should have made further inquiries. On this basis it was contended that there should be a finding that Thunderbolt jet skis were in fact not in commercial manufacture as at 6 July 1990 and that the company was not then capable of producing jet skis in the normal course of business. The respondents, in this submission, had made an unreasonable decision by virtue of undue weight being given to irrelevant factors and lack of consideration for relevant factors.
I agree with Kawasaki's submissions in these respects. What the second respondent saw and learned in his February visit was of minimal value as support for his conclusions on production and supply. The dubious, unreliable and inconsistent nature of Mr Woodleigh's various assurances and promises must or ought to have raised further doubts, at least sufficiently to have required further inquiries. The evidence presented at this hearing could not found a proper conclusion that identical or functionally similar goods were actually being produced in Australia or were capable of being produced here in the normal course of Thunderbolt's business.
In my opinion, the respondents did not sufficiently or in substance consider this question and there was insufficient evidence before them to make an affirmative finding if it had been considered. To all intents and purposes the evidence makes it impossible to conclude that Thunderbolt could have met the Amcor requirements of supply in a competitive environment of quality goods at a competitive price within a reasonable time. This was a significant error.
This passage illustrates the error as to the construction of s.269C(1) already identified. The question of the alleged qualitative inadequacy of the Thunderbolt jet ski as against the Kawasaki product was not relevant because that issue only arose, as Amcor indicates, in the context of considering the capability of production "in the normal course of business".
Finally, in our respectful view his Honour went beyond the legitimate function of a court exercising jurisdiction under the AD(JR) Act when errors of fact are relied upon. The course the hearing took before his Honour, and in particular the reception of evidence of the kind we have briefly indicated, was in practical respects little different from what would occur if Kawasaki were exercising a right of appeal by way of re-hearing. The error of this approach is illustrated by a contention put on behalf of Kawasaki before us. It was said that the learned trial judge "determined, as facts, that there was neither production nor a capacity to produce,...". No doubt that is what his Honour did, but this is the precise opposite of the function prescribed by the AD(JR) Act, as the High Court has clearly affirmed in Bond.
The s.13 statement includes findings of primary fact by the decision maker. There is no basis for concluding that these facts did not exist: AD(JR) Act, s.5(3)(b). (We leave aside the question of Hydro-Bike's change of name, which for reasons we shall shortly state was an irrelevant issue.) The decision-maker had to decide whether he was satisfied goods identical to those described in the TCO were not produced in Australia. Apart from the cost requirements of s.269B(5), which were not raised in the present case, there is no relevant statutory definition of "production". It is not a term of art. The facts mentioned in the s.13 statement could reasonably be regarded as relevant to the question whether nor not there was production of the goods. It is not to the point that others might reasonably and rationally draw a different conclusion from these facts. His Honour was not hearing an appeal in the strict sense where the appellate court is free to draw inferences of fact, cf Warren v Coombes (1979) 142 CLR 531 or even an appeal constrained by those principles which apply to appeals from discretionary orders, cf House v The King (1936) 55 CLR 499. Nor do we think there was any obligation on the decision-maker to make "further enquiries". Once there was some relevant material before the decision-maker from which he could reasonably make the decision, the fact that other relevant material might have been available had it been sought will not invalidate his decision: AD(JR) Act, s.5(1)(b), (3)(a), subject only to the applicability of the Wednesbury principle: s.5(1)(e), (2)(g).
Kawasaki argued that the alleged inferior quality of the Thunderbolt jet ski was a relevant matter for the purpose of the exercising of discretion under s.269P(1) and that the decision-maker had failed to take that into account. However in our opinion this matter was not a matter legally required to be considered: AD(JR) Act, s.5(3)(a). Amcor may have the effect that this disparity of quality is relevant in considering the "normal course of business" for the purposes of s.269C(1)(b), but, as we have said, this criterion did not arise for consideration in the present case.
Natural JusticeHis Honour rejected Kawasaki's argument that Customs were in breach of the rules of natural justice by failing to give it notice of the contemplated revocation of the TCO and the opportunity to make representations. Before us Kawasaki sought to uphold the judgment in its favour on that ground.
Recent decisions of the High Court, and in particular Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 and Annetts v McCann (1990) 170 CLR 596, develop the law on natural justice
... to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention.
(per Mason C.J. in Kioa v West (1985) 159 CLR 550 at p 554, cited by the majority in Annetts 170 CLR at p 598.)
However the decisions cited in Annetts have the common feature that they concerned procedures affecting personal or property rights or expectations: Commissioner of Police v Tanos (1958) 98 CLR 383 (declaration of premises as a disorderly house), Twist v Ranwick Municipal Council (1976) 136 CLR 106 (demolition of dilapidated building), Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 (warning off racecourses), FAI Insurances Limited v Winneke (1982) 151 CLR 342 (licence to carry on workers compensation insurance business), J v Lieschke (1907) 162 CLR 447 (declaration of child as neglected or uncontrollable), Kioa v West (1985) 159 CLR 550 and Haoucher v Minister for Immigration and Ethnic Affairs (deportation orders). Annetts itself concerned procedures in a coroner's court. All the bodies exercising the statutory powers there under consideration in these cases would have been recognised by Atkin L.J. as "persons having legal authority to determine questions affecting the rights of subjects": cf R v Electricity Commissioners (1924) 1 KB 171 at p 205.
What this trend of authority leaves untouched is the clear distinction between statutory powers the exercise of which is necessarily directed towards the rights and expectations of individuals and those which affect the community at large or a section of it: Kioa 159 CLR at p 148 per Deane J.; Minister for Arts, Heritage and Environment v Deko-Wallsend Ltd (1987) 15 FCR 274 at pp 305-7 per Wilcox J.
In determining whether the rules of natural justice apply, high authority warns that the classification of the power as executive or legislative "seems only to introduce a distracting complication into the process of its decision": Bread Manufacturers of New South Wales v Evans (1980) 38 ALR 93 at p 103 per Gibbs C.J. In similar vein, Mason and Wilson JJ. commented that "the question of the application of the rules of natural justice is not to be determined merely by affixing a label to describe the character of the task which is under consideration" (at p 117).
But there are nevertheless features characteristic of the legislative process which, if present where a statutory power is under consideration, may point towards a conclusion that Parliament did not intend exercise of the power to be conditioned on the exercise of the rules of natural justice. Speaking of the authority whose orders were under consideration in Bread Manufacturers, Gibbs C.J. said (at p 103):
Its function, at least in the present case, was to make a general decision of a discretionary character which affected all consumers and sellers of bread. In Salemi v MacKellar (No. 2) (1977) 137 CLR 396 at p 452 Jacobs J. drew a distinction between an act which directly affects a person individually, and one which affects him simply as a member of the public or a class of the public, and an executive or administrative decision of the latter kind is truly a "policy" or "political" decision and is not subject to judicial review. Although it is unsafe to generalise, I respectfully agree with the significance of the distinction.
Similar considerations arose in Attorney-General of Canada v Inuit Tapirisat (1980) 115 DLR (3d) 1, a decision of the Supreme Court of Canada. Canadian legislation provided that where an increase in telephone rates was proposed, hearings were to be held by the Canadian Radio; television and Telecommunications Commission ("CRTC"). The legislation provided for an appeal to the Governor-General in Council who could vary or rescind any order of the CRTC. The issue in the case was whether there was any obligation on the Governor-General in Council to observe the rules of natural justice. In Australia the case assisted the High Court to reach the conclusion that a statutory power vested in a Governor in Council could be conditioned on the giving of natural justice: FAI Insurances Limited v Winneke (1982) 151 CLR 342. However while accepting that judicial review was not necessarily excluded where a power was so vested, the court in Inuit held that the particular statutory power in question did not import the rules of natural justice. Giving the judgment of the court Estey J. said (at p 17):
It is my view that the supervisory power of s.64..... is vested in members of the Cabinet in order to enable them to respond to the political, economic and social concerns of the moment. Under s.64 the Cabinet, as the executive branch of government was exercising the power delegated by Parliament to determine the appropriate tariffs for the telephone services of Bell Canada. In so doing the Cabinet, unless otherwise directed in the enabling statute, must be free to consult all sources which Parliament itself might consult itself had it retained this function.
Later Estey J., in a passage cited by Brennan J. in Kioa (1985) 159 CLR at p 620, said (at p 19):
I realise however that the dividing line between legislative and administrative functions is not easy to draw..... The answer is not to be found in continuing search for words that will clearly and invariably differentiate between judicial and administrative on the one hand or administrative and legislative on the other. It may be said that the use of the fairness principle.... will obviate the need for the distinction in instances where the tribunal or agency is discharging the function with reference to somebody akin to a lis or whether the agency might be described as an "investigating body"..... Where, however, the executive branch has been assigned a function performable in the past by the legislature itself and where the res or subject matter is not an individual concern or a right unique to the petitioner or appellant, different considerations may be thought to arise.
Duties of Customs are imposed on goods imported into Australia: Customs Tariff Act 1987, s.21. The rate is the rate of duty in force when the goods are entered for home consumption: Customs Act, s.132(1). A TCO has the effect that, while it is in operation, a lower rate of duty, or a nil rate, is payable. So a TCO is of general application in the sense that, like the Customs Tariff itself, it applies to goods of a particular description regardless of the identity of the importer, the local manufacturer of competing goods, the suppliers, customers, employees or creditors of such persons or any other person who might be commercially affected. The following comments of Megarry J. in Bates v Lord Hailsham (1972) 1 WLR 1373 at p 1378 are apt:
Let me accept that in the sphere of the so-called quasi-judicial the rules of natural justice run, and that in the administrative or executive field there is a general duty of fairness. Nevertheless, these considerations do not seem to me to affect the process of legislation, whether primary or delegated. Many of those affected by delegated legislation, and affected very substantially, are never consulted in the process of enacting that legislation; and yet they have no remedy.... I do not know of any implied right to be consulted or make objections, or any principle upon which the courts may enjoin the legislative process at the suit of those who contend that insufficient time for consultation and consideration has been given.
The regime of Customs duties, including variations effected by TCOs, is at any given time the scoreboard of the enduring contest waged between the forces of Free Trade and Protection. As well as the direct commercial interests of the kind mentioned, there are social, political and economic considerations affecting the whole Australian community. The rules of natural justice are in our opinion inapplicable in such a setting.
This conclusion is reinforced by reference to the terms of s.269R, which makes provision for certain matters to be referred to the Industries Assistance Commission in the circumstances there specified. By s.269R(1):
Where the Comptroller:
(a) makes a concession order (not being an order under sub-section 269P(10)); or
(b) decides not to make a concession order for which an application has been made (not being an application deemed to have been made under subsection 269J(1) or
(2)), otherwise than by reason of the operation of paragraph 269E(1)(b);
a person whose interests are affected by the making of the order, or the decision not to make the order, as the case may be, may request the Minister, in writing, to refer to the Industries Assistance Commission the question whether the order should have been made.
By s.269R(2):
Where the Comptroller revokes a concession order under subsection 269P(1), a person whose interests are affected by the revocation may request the Minister, in writing, to refer to the Industries Assistance Commission the question whether the concession order should have been revoked.
However, significantly for present purposes, by s.269R(3) it is also provided that:
Nothing in this Part or in the Industries Assistance Commission Act 1973 shall be taken to require the Minister to:
(a) comply with any request made under this section to refer any question to the Industries Assistance Commission; or
(b) act in accordance with any report made to him by the Industries Assistance Commission as the result of the referral under this section of any question.
In our opinion, the provisions of s.269R, consistently with the reasoning in Twist's Case, above indicate that the natural justice argument advanced on behalf of Kawasaki should not be accepted.
Separate Legal Entities
It was also argued in support of the judgment appealed from that a separate company called Thunderbolt Jet Skis Pty Ltd became involved and this was a different entity from Hydro-Bike. There was more than merely a change of name. It was said that the decision-maker failed to take into account this as a relevant consideration and also based the decision on a particular fact which did not exist.
In our opinion, the identity of a person or persons who might have some commercial interest in the revocation of the TCO was not a relevant consideration. What the statutory decision in question is concerned with is the production of goods in Australia. The identity of the producer is not relevant.
ConclusionIn our opinion the appeal should be allowed with costs and the orders made on 19 July 1991 set aside, in lieu of those orders, it should be ordered that the application be dismissed, with costs.
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