Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd

[2019] HCATrans 203

[2019] HCATrans 203

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S161 of 2019

B e t w e e n -

COMPTROLLER-GENERAL OF CUSTOMS

Appellant

and

PHARM-A-CARE LABORATORIES PTY LTD (ACN 003 468 219)

Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 17 OCTOBER 2019, AT 9.45 AM

Copyright in the High Court of Australia

MR N.J. WILLIAMS, SC:   May it please the Court, in this matter I appear with MR D.P. HUME for the appellant.  (instructed by Australian Government Solicitor)

MR S.B. LLOYD, SC:   May it please the Court, I appear with MS J.E. TAYLOR for the respondent.  (instructed by Clayton Utz)

KIEFEL CJ:   Mr Williams, could you give us an estimate of time.

MR WILLIAMS:   I expect that I might be of the order of three‑quarters of an hour to an hour.

MR LLOYD:   Probably about an hour.

KIEFEL CJ:   We will comfortably finish by lunchtime.

MR WILLIAMS:   Yes, your Honour.

KIEFEL CJ:   In this circumstance, the Court will not bother with its morning break.

MR WILLIAMS:   May it please the Court.

KIEFEL CJ:   Thank you.

MR WILLIAMS:   In the oral outline, which we have handed up, we start in paragraph 2 with uncontroversial propositions that Schedule 2, the interpretation laws and Schedule 3, the tariff rules to the Customs Tariff Act1995 were enacted to give effect to Australia’s obligations under the international convention. 

The interpretation rules that are enacted, and I will go to a couple of them, with limited exceptions, the tariffs’ words are taken directly from the Convention.  Interpretation rule No. 1 – perhaps I should first go into the Act, which is in the joint bundle of authorities volume 1 and go first to page 19 of the joint bundle.  In section 7 of the Act, the Act gives the interpretation rules force:

for working out the tariff classification under which goods are classified.

Going then to page 27, in Schedule 2, the “General rules for the interpretation of Schedule 3 – Rule 1:

The titles of Sections, Chapters and sub‑Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions –

Of course, the notes assume large significance here.  The critical note is on page 46 of the book.

GORDON J:   So, are we going straight to the note, are we?

MR WILLIAMS:   Yes.

GAGELER J:   Are you going to come back to rule 2 and rule 3?

MR WILLIAMS:   I can deal with that at this point if that is ‑ ‑ ‑

GAGELER J:   Just in light of the findings of primary fact, how those rules apply.

MR WILLIAMS:   Yes, I will.  I will endeavour to come back to that.

GAGELER J:   Thank you.

MR WILLIAMS:   Your Honour is referring to the essential character reference in rule 2(a) and rule 3(b)?

GORDON J:   It really goes, 2(a), 2(b) – takes you to 3, 3(a), 3(b), requiring you to get to the essential character, does it not?

MR WILLIAMS:   It does, where one is dealing with, in 2(a), incomplete or unfinished ‑ ‑ ‑

GORDON J:   That does not apply here, does it?

MR WILLIAMS:   No.

GORDON J:   So, you go to 2(b) which takes you to rule 3.

MR WILLIAMS:   Yes, and then into rule 3(b):

Mixtures, composite goods . . . made up of different components, and goods put up in sets . . . shall be classified as if they consisted of the material or component which gives them their essential character –

GAGELER J:   You have a finding on that, probably against you.

MR WILLIAMS:   Well, we do have a finding in respect of one of the items, we do not accept the Full Court’s characterisation of the Tribunal’s reasons in dealing with the garcinia preparations as properly to be characterised as a finding of essential character.

GORDON J:   You mean in relation to it being cosmetic?

MR WILLIAMS:   Yes.

GORDON J:   Is that what you are referring to?

MR WILLIAMS:   Yes.

GORDON J:   You have got a finding against you from the Tribunal that it has got garcinia in it.

MR WILLIAMS:   Yes.  I will have to come to the Tribunal’s reasons for that in context.  What the Tribunal was doing in that passage of its reasons was to reject the submission that was put for the applicant to the Tribunal, but I will come to that in the context of the Tribunal’s reasons, if I might.

Note 1(a) is on page 46, the note was put into this form by amendments in 2001 that took effect on 1 January 2002 that gave effect to amendments that were made to the Convention during 2001 which commenced, for the purposes of the Convention, on 1 January 2002:

This Chapter does not cover:

(a)      Foods or beverages ‑

We say those are words of wide and imprecise connotation, but their meaning in context, first, to leave aside just for a moment the words in the first parentheses, must be wide enough to comprehend the later carve‑out of:

nutritional preparations for intravenous administration ‑

because otherwise that carve‑out would have no meaning.  And, secondly, to return then to the words in the first parentheses, must be wide enough to cover the matters, whether they be examples or enumerations that are within the first parentheses.  The reference to Section IV in brackets at the end is a parenthetical guide to where some, but not all, of the goods in the note are to be classified.  Many foodstuffs, of course, are outside Section IV:  linseed, sunflower seeds, castor oil seeds, cocoa leaves, are all in Section II, Chapter 12.  So it is a guide, a parenthetical guide, but no more.

GORDON J:   Does that apply to the same carve‑outs in (b) through to (h), that is construction, and that is the reference to the heading number?

MR WILLIAMS:   Well, each of those would need to be read in its own terms.

GORDON J:   You could have a different result where it could be, in effect, determinative.

MR WILLIAMS:   It may in the particular case, but each clause has to be read according to its terms.  We have referred in our written submissions, and we have handed up some extracts to the Court this morning, in an selection headed “Section II ‑Vegetable products”, that identifies a series of places in the Convention where, when the Convention intends to exclude the whole of a section it does so in terms.  So, on the first page in the notes, the Chapter 6, Note 1, at the end of Note 1:

nevertheless it does not include potatoes, onions, shallots, garlic or other products of Chapter 7.

Likewise, on the following page, Chapter 12, Note 3(c), for the purposes of a particular item, (b):

Spices or other products of Chapter 9 ‑

“Chapter 17 ‑Sugars and sugar confectionery”, on the next page of the extract:

This Chapter does not cover:

. . . 

(c)      Medicaments or other products of Chapter 30.

Exclusion, in effect, of the entire chapter.  Likewise, the following page, Note 1(c), an exclusion of:

Medicaments or other products of Chapter 30.

In similar terms “Section V –Mineral products”, Note 2(c):

Medicaments or other products of Chapter 30 ‑

Chapter 35, exclusions in paragraph (b) for:

Blood fractions –

With some exceptions:

medicaments or other products of Chapter 30 –

Note 1(d):

Enzymatic soaking or washing preparations or other products of Chapter 34 ‑

Chapter 40, Note 2(a):

This Chapter does not cover:

(a)      Goods of Section XI (textiles and textile articles);

. . . 

(e)      Articles of Chapter 90, 92, 94 or 96 ‑

So what we see in these extracts is a variety of drafting devices being applied but where an entire section is excluded, as in the last example, goods of section XI, that is done so expressly.  In other places ‑ ‑ ‑ ‑

GORDON J:   So here we have section IV dealing with things other than food.  Is it not a reference to those parts of section IV which are dealing with a subset of section IV?  Is that not the way you read section IV qualification in the second half of the second parentheses?

MR WILLIAMS:   We read it as a parenthetical guide to where some but not all of the exclusions might be found.

GAGELER J:   You say that the standard drafting technique, if it were only food or beverages, within section IV would be not to use brackets but to say “of section IV”?

MR WILLIAMS:   Correct.  If I can turn then to Note 1(a) contextually, first – and by this stage we are at point 5(a) of our outline ‑ the text arrives from a multilateral convention and is to be read in that light.

The context in which it should be construed includes the Convention.  The Convention has equally authentic English and French language versions.  The English and French language versions of the Convention are set out in the appellant’s book of further materials at page 14.  Exhibit C in landscape format – this was the form of the amendment that was made in 2001 to put the text into the form that it is now found within the domestic law.  At the top there is, on the right‑hand side, the English version.  Your Honours will see that is precisely reflected in the domestic statute.  On the left‑hand side – where the only parenthetical reference is to section 4 – and there are no qualifying words at the outset:

Foods or beverages –

That is apparent, simply from looking at the structure of the text itself.  We also note that, in both the English and the French versions, there is an exclusion at the end for intravenously administered nutritional preparations.

The English language meaning of those texts is on the following page.  We do not rely on the translator’s note at the foot of that page.  And, with that exclusion, the admissibility of this material may be uncontroversial.  In any event, the Convention itself ‑ ‑ ‑

KIEFEL CJ:   Is that accepted, because there was an objection to this material, was there not?

MR WILLIAMS:   There was.  There was an objection particularly to the translator’s note.

KIEFEL CJ:   Yes.

MR WILLIAMS:   Mr Lloyd will deal with that in due course.

KIEFEL CJ:   I see, thank you.

MR WILLIAMS:   But, we do not rely on the translator’s notes at the foot of the page. 

KIEFEL CJ:   The respondent does not dispute the French translation?

MR WILLIAMS:   That is so. 

KIEFEL CJ:   The French version.

MR WILLIAMS:   I will let Mr Lloyd speak for himself.

KIEFEL CJ:   Yes.

MR WILLIAMS:   The respondent does not dispute that the words “Foods or beverages” do not ‑ ‑ ‑

KIEFEL CJ:   Are absent.

MR WILLIAMS:   ‑ ‑ ‑ are absent.  The respondent does not dispute that the words:

other than nutritional preparations for intravenous administration –

appear in both the English and the French versions.

KIEFEL CJ:   Yes.

MR WILLIAMS:   The Tribunal, in this respect, had its own version.  Having regard to the difficulty of finding this, it is understandable that the Tribunal might have found the previous version and the parties did not correct the Tribunal but the Tribunal, at one point, was working off the incorrect previous version when it was – the Tribunal threw out in respect of the French version – was working off the incorrect previous version.

BELL J:   The explanatory notes issued by the relevant international organisation in relation to the Convention – I do not believe they are before the Court.  Do they refer to food and beverages in the explanation of the note to Chapter 30?

MR WILLIAMS:   I would have to have that checked.  No other party here I think relies on those notes, although they were in contention ‑ ‑ ‑

BELL J:   They were in contention below.

MR WILLIAMS:   Below, that is right, but I do not believe that either party places reliance on them and, for that reason, they are not in the material, but I will have that checked.

BELL J:   I see.  Yes.

MR WILLIAMS:   We refer in the outline to the authority on which we rely for this material, but I will deal with that in reply if it becomes necessary.  The Vienna Convention is in part reproduced in the book but not a key part and we have handed up an extract that has a more complete reference, it is headed “Multilateral” in the materials that have been handed to your Honour this morning.  Article 31(1):

1.        A Treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

2.        The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text ‑

There are then matters set out.  We say plainly enough that includes the equally valid French text.  And then in Article 33 “Interpretation of Treaties Authenticated in Two or More Languages”, if:

a treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the treaty provides ‑

otherwise.  Sub‑rule 3 of Article 33:

3.        The terms of the treaty are presumed to have the same meaning in each authentic text.

So whatever else that means, it means that “food supplements” here has the same meaning as the French “compléments alimentaires” in the French version, which is not preceded by the words “Foods or beverages”.

BELL J:   Mr Williams, I am wondering where this aspect of the argument really takes you. As I understand it, you accept that some effect must be given to the Parliament’s choice to include the words “Foods or beverages” in Note 1(a).  Your contention is that they are to be construed broadly, and you make good that argument by reference to the inclusion of:

other than nutritional preparations for intravenous administration ‑

Once it is accepted that some effect must be given to the Parliament’s choice to include the words, where does the interesting issue about the significance of the distinction between the two authentic texts take you?

MR WILLIAMS:   It comes in in this way.  There are, of course, two textual indications that we rely on within the English version of Note 1(a).  There is first the words in parentheses, which we say in ordinary drafting would require one to read general words of imprecise connotation, at the beginning, words like “Foods or beverages” in a way that is wide enough to include the matters that are referred to within the brackets, whether they are an enumeration, an expansion, or examples does not matter.

It is only where the introductory words are intractable and could not be read so as to include the examples that one would have a question of disregarding words that Parliament has inserted into the parenthetical reference, words like “food supplement”; so that is the first point.  We make those points by reference to text, parenthetical words plus the intravenous administration.  But we say, in any event, one has constructional choice here in reading the words “Foods or beverages” in a context ‑ in a textual context in which there are these tensions with the words in parentheses that follow, and the exclusion of intravenous nutritional preparations.

So, in resolving that constructional tension, one has regard to the matters to which the Acts Interpretation Act directs us – that includes 15AB(2)(d) – the terms of “any treaty . . . referred to in the Act”.  The Treaty is referred to here – the word “Convention” is defined in the Act.  One then uses that aid of the Treaty – and we say that includes the equally valid French version – in resolving this constructional tension.

BELL J:   Does it not get you into a hopelessly circular argument?  Yes, under the Interpretation Act, one has regard to the Treaty – the terms of the Treaty, in the authentic English version, are largely reproduced in the Act.  You accept effect must be given to the choice to include food and beverages.  I understand your first argument.  It just seems to me rather difficult to see where your second argument gets you.

MR WILLIAMS:   Where it gets us is this.  The Parliament here has enacted legislation to give effect to its solemn international commitment to introduce a harmonised tariff system and one that is harmonised in a particular way.  If the Parliament – by its use of the words “Foods or beverages” – the introductory words – and if the Court, by its construction of those words, arrives at a construction – that is, incompatible with the French text – then the purpose of the Treaty has been defeated and one would not presume that that is Parliament’s intention. 

Where there is a French text – which, as we say, is plain in not having the introductory words – it goes straight into what, in the English text is the parenthetical words – one could not say that the introductory words in the English text are the dominant constructional frame of reference.

GAGELER J:   Mr Williams, if you are going to read the French text as having the same meaning as the English text, or vice versa, why are we focusing on food or beverages?  Is it not the words “such as” that allow some latitude of constructional choice?  So, if you read those words – if you read it as being “Food or beverages of the following kinds” ‑ ‑ ‑

MR WILLIAMS:   Yes.

GAGELER J:   ‑ ‑ ‑ then the two texts are perfectly consistent.

MR WILLIAMS:   Yes, precisely, in our submission; including “of the following kinds”?

GAGELER J:   No, not including “of the following kinds” ‑ ‑ ‑

GORDON J:   No.

GAGELER J:   ‑ ‑ ‑ but just “of the following kinds” – because that is all the French text.

MR WILLIAMS:   Yes, we would accept that. 

GAGELER J:   So, then you have got to come to this in due course.  But, you have got a finding that these are food supplements, I think.  There is a finding of the Tribunal against you, that the goods in question answer the description of food supplements.

MR WILLIAMS:   Or, do not answer the description – was the Tribunal’s finding.

GORDON J:   Do not.

GAGELER J:   I am sorry, do not answer the description, I am sorry.

MR WILLIAMS:   We will deal with that.

GAGELER J:   Yes.

MR WILLIAMS:   The Tribunal applied the wrong test in making that finding.  I will come to that in just ‑ ‑ ‑

GORDON J:   Then you will have to deal with the other – the factual finding about this essential character which would put them as a medicament, upfront – whether you even get to – whether you can overcome that – whether you can change it in order to fit it within the note.

MR WILLIAMS:   Can I come within the next four or five minutes to the Tribunal’s reasons when I will deal with each of those because we say that the Tribunal has come at the matter from the wrong direction and asked the wrong question and those findings are coloured in that way.

So, that is what we say about context.  We accept what your Honour Justice Gageler says about the French text.  But, just to set what we say would be the correct test in applying Note 1(a) – or, indeed any of the tariff – one does not ask how goods would ordinarily be described.  One asks whether the good meets the statutory description.  Mr Lloyd’s automatic data processing machine would, in ordinary parlance, be described as a computer.  It would, only in the most technical customs tariff context, be referred to as an automatic data processing machine. 

But, in order to assess its classification, you take the good, with its characteristics, and you ask whether it meets the description of an automatic data processing machine.  You do not start off by saying, I am going to call this a computer because that is what everyone else does and then try to fit it within the tariff.  Or to use the terms – perhaps, on 42, I think of the book – to take it to the context of some of the tariffs that were in issue here, a hard ‑ ‑ ‑

GORDON J:   Sorry, where are you?

MR WILLIAMS:   Page 42 of volume 1 of the ‑ ‑ ‑

KIEFEL CJ:   Yes, we are working from the pamphlet.

MR WILLIAMS:   I am sorry.

KIEFEL CJ:   At some point, the Court will advise the parties that the court book will not need legislation that is coming.

MR WILLIAMS:   I am sorry, your Honours.

KIEFEL CJ:   We should have drawn your attention to it, Mr Williams.  I apologise.

MR WILLIAMS:   If we are working on the same pamphlet, it is at page 78 of the pamphlet, I hope, and it is 1704, if we are working on the same reprint.

KIEFEL CJ:   Yes. 

MR WILLIAMS:   So 1704:

SUGAR CONFECTIONERY (INCLUDING WHITE CHOCOLATE), NOT CONTAINING COCOA.

Does the Court have 1704?

KIEFEL CJ:   Yes.

MR WILLIAMS:   A hard, disc‑shaped lolly on a stick would, in ordinary parlance in Australia, be referred to as a “lollipop”.  It would not, by any consumer of such a product leaning over a shop counter, be described as a “sugar confectionery not containing cocoa”.  But for classification you do not start by saying:  what would this ordinarily be called?  It is a lollipop; therefore it is not a sugar confectionery.  You start with the good and then you ask how the tariff, properly construed, applies to that good.  With that background, perhaps I should ‑ ‑ ‑

GORDON J:   Mr Williams, how then does the process set out in Schedule 2, particularly at, for present purposes, rule 3(b) apply in that context?  Where does that sit in stepping through?

MR WILLIAMS:   When you are holding up the good, you do need to identify its characteristics.

GORDON J:   Thank you.  That is all I need to know.

MR WILLIAMS:   Mr Lloyd’s computer has certain characteristics.  It is able to be programmed and it has a memory.  Those characteristics bring it within the description of an automatic data processing machine.  Likewise, a lollipop has certain characteristics; you do have to identify them.  If there are multiple ingredients, then there is a question of which is dominant.  In no circumstance do you start with the ordinary description, in our submission.

Could I, before turning to the Tribunal’s reasons – and I may be in breach of my promise to the Court of about three or four minutes, but I will not be long.  Heading 2106, at page 45 of the book for our friends and at page 94 I think of the reprint, compilation No. 68:

2106FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED OR INCLUDED

That is a residual heading.  When we come to the garcinia preparations, that will be directly in issue, but the Court sees that it is residual because of its structure:

2106   NOT ELSEWHERE SPECIFIED OR INCLUDED

And then stepping down to some specific ones:

2106.90 ‑ Other –

Then there are some specific others.  Then there is:

2106.90.90 – Other.

So other, other.  A more residual category than “other, other” is difficult to identify within the tariff. 

If I can then make good my promise to turn to the Tribunal’s reasons, there were two types of goods in issue which we identified in paragraph 8.  In the court book at page 19, the Tribunal in paragraph 51 turns to the question of construction.  It attributes a meaning to:

“such as” ‑

Perhaps not much turns on whether it is:

“for example” ‑

but we do not necessarily accept that that is the right way of reading it, but the Tribunal then turns, in the line beginning:

in the ordinary English sense.  Putting to one side the words “food supplements”, each of the other items . . . refers to a food or to a beverage properly so‑called.  In our opinion that suggests that the expression “food supplements” also refers to things which are either of “Foods or beverages”.

This process of deconstruction of the provision, followed by interpretation, followed by reconstruction, is one that we say is the beginning of error in the Tribunal’s reasons.  They go on directly from that, having excluded the words that provide important context to the meaning of:

“Foods or beverages”‑

They go on to say why they prefer the view that:

“food supplements” . . . must refer to a food (or no doubt in some cases, to a beverage).  If that is correct the view would not be open that something is not a food (or a beverage), but yet is a food supplement . . . If the view of context which we prefer is correct –

we take that to be a reference to the deconstruction and reconstruction immediately above:

then in order to conclude that goods are a food supplement within the meaning of Note 1(a), one would also need to conclude that the goods are food, or a beverage.

In this, of course, it is noteworthy that the Tribunal makes no reference at all to the exclusionary words at the end of the note, the reference to intravenous preparations.  Going over then to paragraph 55:

It may be noted that the French text of the Convention, said to be equally authentic, does not begin with the . . . words “Foods or beverages” . . . That seems to us to be a very doubtful aid to construction of the English text ‑

Now, with respect, we say that is in error because it is part of context and context of this kind is, in our submission, a perfectly legitimate aid to construction.  And then the Tribunal goes on to say:

an insufficient basis on which to resolve a doubt . . . More to the point we do not think that the French text can be resorted to in order to raise such a doubt.

On any view, Note 1(a) raised a constructional issue.  There were general words at the beginning, parenthetical words in the first set of parentheses, then an exclusion, on any view there was a question of construction, and it was not a matter of raising a doubt.  The Tribunal then goes on to refer to a fact that there is another difference, that is, the exclusionary words:

other than nutritional preparations ‑

does not occur in the French.  Now the Tribunal’s version, which it had found itself, was the incorrect version.  The Tribunal was not corrected, but that is not correct.  Turning then to paragraph 57:

The word “food” is not apt to describe a vitamin preparation ‑

Now to begin with, the use of the word “vitamin preparation” is a label that the Tribunal has come up with, it is not the actual good, although we accept that that is the outcome of an Article 3(b)‑type process.

KIEFEL CJ:   How would you frame the correct question?  What should the Tribunal have asked itself?

MR WILLIAMS:   These goods, as we have characterised them, do or do not fall within the statutory description.  One sees – first of all, the Tribunal is construing the word “food” – having excluded “food supplements”, it had to consider whether these were food supplements at some point, either by direct reference to the words within the parentheses or by having read “foods or beverages” as wide enough to include food supplements.

KIEFEL CJ:   Food supplements.

MR WILLIAMS:   So, the proper question would have been – the question is whether these goods, as we have described them – or found them to be – fall within the description of “food supplement”.

GORDON J:   Are you going to go to paragraph 60?

MR WILLIAMS:   Yes, yes, I will.  But, in 57, the Tribunal has set off on the wrong track in several respects.  The reasoning for the first sentence is really in the second line:

A vitamin preparation would not ordinarily be so described –

We are back to whether Mr Lloyd is working on an automatic data processing machine – in the sense in which that expression is ordinarily used.  It would be described as a “vitamin preparation” or by some other similar words embodying vitamin:

On the other hand –

in the last sentence:

to our understanding it would not be a usual use of language to describe a vitamin preparation as food.

Lollipop, automatic data processing machine – we say that is just the wrong approach, with respect.

In paragraph 60  – to answer your Honour Justice Gordon – we accept that the Tribunal has characterised the goods in a particular way and we accept that that is a finding of fact but we did not challenge that finding.  But, nonetheless, that finding is not determinative.  The Tribunal still has to apply the proper test.  It can identify the goods using the Article 3(b) – or the rule 3(b) – process as being – although they are 70 to 80 per cent sugar, they do contain vitamins and we regard that as giving them their essential character.  But, the Tribunal still has to apply the right test, having characterised the goods, still has to apply the law, and you do not apply the law by saying, if you ask someone in the street, what would they call this?

GAGELER J:   Mr Williams, is it the correct approach to apply Note 1(a), having gone through rule 2 and rule 3(b) or do you say that those rules are left to one side and the note is to be applied as a matter of ordinary language without those technical rules applying?

MR WILLIAMS:   The terms of rule 1 – if your Honours will excuse me a moment while I turn it up – the terms of rule 1 give primacy, in our submission, to the chapter notes and the headings. 

GAGELER J:   No, I follow that, but when you are applying the chapter notes and the headings, if rule 2 and rule 3 are not excluded by those chapter notes, do you apply the process of reasoning set out in those rules?  Really, I am asking, do you step through rule 2(b) here and say, this is a mixture of glucose, sucrose, gelatine and vitamins?

MR WILLIAMS:   We are happy to accept, for the purposes of argument, that you do.  We are happy to accept that the Tribunal has characterised the goods in a particular way using a rule 3(b) approach.

GAGELER J:   And 3(b) – then you apply the goods as so characterised in accordance with – sorry, you then apply Note 1(a) to the goods as so characterised in accordance with rule 3(b) – that is the correct approach?

MR WILLIAMS:   For the purposes of argument, we are content to accept that because, even having characterised the goods in the way that the Tribunal did, it still fell into error because it applied the wrong test.  It adopted a process of characterisation that might be orthodox within 3(b) but, accepting that finding of fact, it still had to apply the law, not some passer‑by test, when it came to applying the tariff to the goods as so characterised. 

GAGELER J:   Paragraph 60 is the application of rule 3(b)?

MR WILLIAMS:   Yes.  Perhaps I should qualify what I just said in one small sense by reference to rule 3.  Rule 3 applies where goods are prima facie classifiable under two or more headings.

GORDON J:   That is why we are asking you.

MR WILLIAMS:   Yes.

GORDON J:   One starts with this characterisation under 2(b) where you have got a mixture and you have worked out what, in a sense, is the substance.  Then is says:

When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings –

So, here, the argument would be arguably confectionary or the medicaments heading.  One then says, the heading which most provides – one is directed to (b) – one has to ask what the essential character of the good is and then the answer is, you are taken across.

MR WILLIAMS:   Goods are not, prima facie, classifiable under Chapter 30 if Note 1(a) applies.

GORDON J:   That is the argument.  At what point does the 1(a) analysis come in?  One way of reading Schedule 2 is that you take the order and put the notes, in a sense, primacy, unless it has been excluded, but the rules that are to be applied are then set out under the following rules to determine how you deal with the note.

MR WILLIAMS:   For the purposes of today’s case, we are content to accept that one applies the 3(b) analysis before getting to the Note 1(a).  We are content to accept that the goods have been characterised in a particular way by reference to their essential purpose – that is, even though they are 80 per cent sugar, it is the vitamins that give them their essential character.  Even with that characterisation, the Tribunal has fallen into error because it has not applied the tariff.  It has applied a passer‑by test.

BELL J:   Because it was not open to the Tribunal to conclude that the preparation, the essential characteristic of which was a vitamin in a material that enabled it to be readily consumed in what might be described as a measured dose, it was not open to it to conclude that that did not answer the description for the purposes of the tariff – reading the tariff as a whole – as a food supplement, as distinct from a medicament under 3004.

MR WILLIAMS:   We would say that when one applies food supplement properly rather than, first of all, reading it out as the Tribunal did, then misapplying the test to the point where it said, “it will apply and even if”. 

BELL J:   I am taking you to the Tribunal’s alternative analysis which did not depend upon a view that a food supplement had to be a food within the food or beverages formulation. 

MR WILLIAMS:   Yes, I will come to that immediately.  The answer to that is in paragraph 62:

We do not think that vitamin preparations would naturally or normally be described as food supplements in this country.

First, the Tribunal has used its label of “vitamin preparations”, and then it has, rather than asking whether they fall within the description of food supplements, it has looked for ‑ and we see this particularly in the last sentence of 62:

whatever the reason may be, we think that a vitamin preparation would naturally be referred to as such rather than as a food supplement.

BELL J:   Putting to one side the language for the moment, and just addressing the question of whether it was open to the Tribunal to conclude, looking at the tariff understood as a whole, that a pastille, the essential character of which involved the component of the vitamin, which was in a substance to make it readily ingestible in what might be described as a measured dose, you say it is not open to read a product of that character as not a food supplement, particularly when one has regard to the terms of 3004.50.00.

MR WILLIAMS:   I will come back to the particular ‑ ‑ ‑

BELL J:   I am directing your attention to the:

MEDICAMENTS . . . CONSISTING OF MIXED OR UNMIXED PRODUCTS FOR THERAPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES

3004.50.00 – Other, containing vitamins ‑

MR WILLIAMS:   One only gets to that, as indeed one only gets ‑ we would say, as our primary submission, one only gets to any question about Article 3(b) or about the further items once one has got through the chapter notes, and in the chapter notes one starts with an exclusion of, we say, food supplements.  One asks, then, whether these vitamin products are a food supplement.  And the Tribunal ‑ we do not need to go so far as your Honour Justice Bell is putting to us ‑ we do not have to say that a contrary view was not open, all we need to show is to show that the Tribunal did not apply the right test, and the matter then has to be remitted for the Tribunal to do so.  What we would say, in ordinary parlance, vitamin, or even vitamin preparations, if you use the Tribunal’s label, but certainly these products, as they are characterised, are well open to be described as a food supplement.  That is one of the‑ ‑ ‑

BELL J:   So you are now coming to the well open based on an ordinary understanding ‑ ‑ ‑

MR WILLIAMS:   Yes.

BELL J:   ‑ ‑ ‑ which, as I apprehend it, some of the authorities commend.

MR WILLIAMS:   Yes.

BELL J:   If one does not read the Tribunal’s reasons with an eye too keenly attuned to error, that is how one might understand paragraphs 60 to 62.

MR WILLIAMS:   Well, first we come to the well open view, in response to your Honour Justice Bell’s question to me as to whether the other was open.

BELL J:   Yes, I understand that.

MR WILLIAMS:   We say it was well open, but we do not think it is a fine reading of 62, in the light of what has gone before and, indeed, what comes afterwards, where the Tribunal has been considerably occupied, if not preoccupied ‑ in 57, for example – with ordinary use of language and what label would ordinarily be given to this, and particularly in 62 itself, in the concluding sentence:

we think that a vitamin preparation would naturally be referred to as such rather than as a food supplement.

Mr Lloyd’s automatic data processing machine would be referred to as “a computer”, not ‑ ‑ ‑

BELL J:    How does one determine what is a food supplement?

MR WILLIAMS:   First of all, there may be a process of construction and we say that the Tribunal went wrong in that respect, to begin with, first by eliminating it.

BELL J:   Looking at its alternative argument, Mr Williams, on that alternative argument, put to one side the opening words “Foods or beverages”, how does one determine, for the purposes of this Act what is a food supplement?

MR WILLIAMS:   One, ordinary process of construction – text, context, purpose.

KIEFEL CJ:   Natural and ordinary meaning?

MR WILLIAMS:   Text, context and purpose and natural and ordinary meaning.

KIEFEL CJ:   Your point is that, at the first step you do not apply natural and ordinary meaning to a good; you look for the closest description within the tariff.

MR WILLIAMS:   Yes.

KIEFEL CJ:   Then when you find that, then you apply the natural and ordinary meaning textually.

MR WILLIAMS:   When you are construing the tariff.

KIEFEL CJ:   Yes.

MR WILLIAMS:   But the Tribunal has come about this completely the wrong way.  The Tribunal started with the good and said, what would a passer‑by call this?  Well, it would be a vitamin preparation or an automatic data processing machine or a lollipop.  Therefore, it is not ‑ ‑ ‑

KIEFEL CJ:   When you come to construe food supplement, you read it as something supplementary to the food one has in a diet.

MR WILLIAMS:   Yes.

KIEFEL CJ:   Vitamins follow that because vitamins are a large part of the reason that one has diets.

MR WILLIAMS:   Yes, and vitamin preparations, to use that term – I do not want to give evidence from the Bar table ‑ are commonly consumed as a supplement to an ordinary diet.  If an ordinary diet is inadequate in some way, perhaps because of no animal products there might be a need for particular vitamin supplements to supplement the diet, so that would be a food supplement.  That is a common example in the case of people who make particular choices about the food they eat, but that would be an ordinary meaning, to say that that is a food supplement.

GAGELER J:   So are you saying that a vitamin has to be regarded as a food supplement, can only be regarded as a food supplement?

MR WILLIAMS:   No.  I am saying it was well open to regard it as a food supplement.  I say that responsibly to Justice Bell, who put the contrary proposition to me and the question whether it is is one to be determined by the Tribunal applying the right test, not applying the wrong test.

GAGELER J:   Mr Williams, have you had a look at sub‑chapter XI, heading 2936, page 228 of the print?

MR WILLIAMS:   Sorry, your Honour:  I will just wait for the automatic data processing machine to be passed up to me.  Your Honour asked me about 2936?

GAGELER J:   Yes. 

MR WILLIAMS:   Yes, your Honour.

GAGELER J:   All I am drawing your attention to is that vitamins are specifically included within this section.  It will be very odd if they are taken out as a food supplement by the note.

MR WILLIAMS:   If they fall within “food supplement” properly construed, and we accept that “food supplement” properly construed would involve a process of construing the chapter as a whole, that may be so.  I am not here to argue the correct classification of these goods and the Court is not embarked on that; I am here to argue that the Tribunal erred in law in the test that it did apply.

GAGELER J:   What precisely was the error of law?

MR WILLIAMS:   First, they left “food supplements” out of Note 1(a) altogether.  That was an error of construction.  Secondly, when they came to food supplements, after having said, it is not a food; therefore, it is not with it.  When they came to say, anyway we will just for residual purposes consider whether it is a food supplement, they applied the wrong test. 

Instead of asking whether the good fell within the description of “food supplement”, an undertaking of process of construction of the kind that your Honour Justice Gageler and others of your Honours are taxing me with, that there are other provisions in here which look like they might cover vitamins.  These are relevant provisions.  We accept that.  There is a process of construction to be undertaken.  The Tribunal did not do that.  The Tribunal said in the last sentence of 62 in very clear terms ‑ and this is not fine parsing or analysing ‑ a passer‑by would call them a vitamin preparation.

GORDON J:   Is that not because in large part the Comptroller was putting to the Tribunal that he had had a choice to make and the choice you put up as the alternative to 3004 point, whatever it was, the confectionery question, the confectionery heading.

MR WILLIAMS:   Yes.  If the matter is back before the Tribunal, that will be ‑ ‑ ‑

GORDON J:   No, that is what you did before the Tribunal.

MR WILLIAMS:   Yes, yes.

GORDON J:   They are the options you gave it.  You said to the Tribunal, we do not accept that it should be free as a medicament in a dose containing a vitamin.  We contend it should be classified elsewhere.

MR WILLIAMS:   Yes.  But, in classifying – contrary to the Comptroller’s primary position – the Tribunal fell into legal error. 

GORDON J:   I am just not quite sure what the error is at the moment.

MR WILLIAMS:   The first error of construction in eliminating food supplements altogether.  Then, when turning, as a by the way, to food supplements in paragraph 62, it simply approached the matter the wrong way around as it had in 57, and as it made very plain at the end of 62 it was doing here – it was applying an ordinary label test rather than construing – engaging with some of these admittedly difficult questions that arise in construing the tariff as a whole – it simply went for the passer‑by test.

GAGELER J:   At some point, you have got to come down to ordinary English words and the question of whether facts fully found fall within the meaning of ordinary English words.  That appears to me to be all the Tribunal was asking itself and answering at paragraph 62.

MR WILLIAMS:   If it is a question of ordinary English words, then the Tribunal has not done that in 62.  The Tribunal has approached it from a completely different viewpoint.  It started with the good and said, how would this be described, rather than starting with the tariff.  It has come at it completely the wrong way around.  Those are the errors we put, essentially.

I should say for the record, in answer to your Honour Justice Gageler and your Honour Justice Gordon, I have said, for the purposes of argument, we are content to accept that one would go through the Article 3(b) analysis first.  Our primary position would be that, because of the primacy that section 7 gives to rule 1, you need to start with rule 1.  But, the Court does not have to grapple with that because ‑ ‑ ‑

GORDON J:   Rule 1 says, “according to the following provisions”.  It just dictates the order in which you must go through it.  Rule 1 ends with the words “according to the following provisions”.  That is why I put to you before which point – what significance does this note have in this form of analysis?

MR WILLIAMS:   Our formal position – our formal primary position – is that rule 1 comes first because of section 7.  But, the Court does not need to engage with that for the purposes of the argument because even if it were otherwise, in our submission, the Tribunal erred here because it did not apply the law to the goods as it had characterised them.

GAGELER J:   So, if it had done its job correctly, where do you get to – 1704 or 2106, and how?

MR WILLIAMS:   That, we would say, is a question for the Tribunal, properly applying the law.  First, if it did not read “food supplements” out, it would have, we say – we will say – we did say and would say again – that, properly construed, these preparations were a supplement to an ordinary diet and they were within the exclusion provided by Note 1(a). 

So that would then take you out from section XI altogether, and you would then be in the process of properly characterising the goods, or giving it its most appropriate heading elsewhere, having excluded chapter 11 because of the operation of Note 1(a) – sorry, chapter 30, yes.  I am not sure whether that has addressed your Honour’s question.

GAGELER J:   Not really, but that is okay.  I think you have explained why you are not addressing it.  You are saying it is not for us to determine.

MR WILLIAMS:   Yes.  It is ultimately a question for the Tribunal, applying the law as properly construed.

BELL J:   In considering the ordinary meaning of “food supplements” for the purposes of Note 1(a) to chapter 30, the Tribunal would appropriately have regard to context, including here not only the provisions of chapter 11, with its particular treatment of vitamins, but the provisions of heading 3004 and dropping down to 3004.50.00, which is concerned with medicaments for therapeutic or prophylactic uses that are put up in measured doses.  And it would consider whether a good, the essential characteristic of which was a vitamin put up in glucose in a measured dose, was within the ordinary meaning of “food supplements”, having regard, amongst other things, to that statutory context; is that fair?

MR WILLIAMS:   Precisely, with respect.

BELL J:   Yes.

MR WILLIAMS:   And that would include the question whether the goods were for therapeutic of prophylactic uses.

BELL J:   Yes.

MR WILLIAMS:   As opposed to dietary supplement uses, that one would step though ‑ ‑ ‑

KEANE J:   The difference being that therapy or prophylactic is concerned with either the treatment or prevention of an illness, rather than the maintenance of general good health.

MR WILLIAMS:   Indeed, through a balanced diet.

KEANE J:   Through a balanced diet.

MR WILLIAMS:   Yes.  So I think that has taken me through to 62 of the Tribunal’s reasons, and in turn to paragraph 10 of our note.  Turning then to the weight‑loss preparations which have ‑ ‑ ‑

GORDON J:   I am sorry, just before we leave that.

MR WILLIAMS:   Yes.

GORDON J:   The problem here, though, is you have got a finding by the Tribunal that their essential character was that they were for therapeutic and prophylactic use.  What do we do with those passages at 73 to 74 of the Tribunal’s reasons for decision?

MR WILLIAMS:   Well, the Tribunal reached that view after misconstruing the note, and misapplying the note.  If the Tribunal had correctly construed the note and correctly applied it, it would have been asking about food supplements at the outset, construing that phrase by reference to the particular headings and subheadings within it, and forming a view as to whether these goods fell within the food supplements category, or the category to which your Honour Justice Bell I think has just taken me, further down.

BELL J:   Did not the Tribunal make the factual finding at 73 based, amongst other things, on reference to Chambers Science and Technology Dictionary?

MR WILLIAMS:   Well, it made that finding with respect to the goods, but that was not a process of construction of the tariff, and its finding in respect to the goods followed from its erroneous exclusions in 51 to 55, 57 and 62 of food supplements, and if it had not diverted itself from the correct path at that earlier stage, it would have been asking the question in different terms.

GAGELER J:   Mr Williams, as a matter of construction of the tariff, is it permissible to use a subheading as an aid to a construction of a heading?

MR WILLIAMS:   I believe so.  I believe so because within rule 1 there is a deal of both l‑o‑r‑e and l‑a‑w involved here and I will glance over my shoulder at some point to see whether I have transgressed against one, but terms of headings and any relative section or chapter notes, those are the controlling provisions, the headings, and relative section or chapter notes ‑ ‑ ‑

GAGELER J:   I do not see an answer in the ‑ ‑ ‑

MR WILLIAMS:   No.

GAGELER J:   ‑ ‑ ‑ Schedule 2.

MR WILLIAMS:   Your Honour, will ‑ ‑ ‑

GAGELER J:   The particular application I have in mind is in construing heading 3004, is it permissible to take into account subheading 3004.50, but I am really concerned with the question of interpretive principle, whether ‑ ‑ ‑

MR WILLIAMS:   Rule 6 on page‑ ‑ ‑

BELL J:   Yes.

MR WILLIAMS:   Sorry, rule 6 might provide some answer to your Honours, related subheading notes.

GAGELER J:   I am not sure what that tells me.  I thought the l‑o‑r‑e used to be that you looked only at the headings, and only once you are in a heading is it permissible to look at the subheadings but that may not be ‑ it does not seem a particularly sensible approach, but there is a lot about this area of law that is counterintuitive.

MR WILLIAMS:   I am not sure that I can assist your Honours beyond the reference to rule 6, which does refer to headings of subheadings, but rule 1 does appear to give primacy to headings and section or chapter notes.

BELL J:   What do you submit is the effect of rule 6 in Schedule 2?

KIEFEL CJ:   A puzzle within a puzzle.

MR WILLIAMS:   Yes.  Well, one works down in the hierarchy starting with heading, section, and chapter notes, and if one is descended beyond the heading, section, and chapter notes, and got into the chapter, one then uses the terms of the subheadings and any subheading notes.  That appears to be the statutory hierarchy.

GAGELER J:   If you take the last sentence of rule 6, implicit in it is perhaps that a chapter note is to be regarded as a note to a heading.  Then when you get to the subheadings, it is to be regarded as a note to a subheading, so you do not really start with the chapter note.  You start with the headings and treat the chapter notes as notes to headings.

GORDON J:   Which is, I think, the proposition I was putting to you before.  It is the order in which you do it.  When one starts with rule 1, it tells you that you apply those notes in the following order and rule 6 confirms that it is a note to each of the headings and to each of the subheadings.  One starts there.  One does not start at the other end.

MR WILLIAMS:   Rule 1:

shall be determined according to the terms of the headings and any relative Section or Chapter Notes ‑

GORDON J:   “According to the following provisions”.  It then gives you the order in which you are to do it and rule 6 reinforces that view. 

MR WILLIAMS:   No, but according to the following provisions is alerted by the preceding words.

KIEFEL CJ:   The proviso.

MR WILLIAMS:  

provided such headings or Notes do not otherwise require –

So, “such headings or Notes”, so you start with a note and if you fail in the note, then you do not get any further into the chapter.  That is rule 1 – both numerically and in order of primacy – the way in which it is turned, that it is the primary rule.

GAGELER J:   This is quite an important question – how the chapter notes relate to the headings.  There is no international understanding that we should be aware of?

MR WILLIAMS:   I might have to take that on notice, your Honour, because I am not sure that for our ‑ ‑ ‑

KIEFEL CJ:   Could we have a note, say, within seven days?

MR WILLIAMS:   Yes, we will do that.

KIEFEL CJ:   And, the respondent to respond within seven days.

MR WILLIAMS:   Yes.  May it please the Court.  So turning, then, in paragraph 10 of our note, to the Tribunal’s reasons on page 31 of the book, paragraph 79, once again we see a continuation of the same process of reasoning:

A weight‑loss preparation would not ordinarily be described as a food or as a food supplement in our opinion.

Again, this is a passer‑by test.  There is a note at the foot of the paragraph that is of some importance:

The efficacy of garcinia for the purpose of weight‑loss is in dispute, as we understand the evidence before us.

The Tribunal makes no finding about that question.  I should then, just in passing, note that in paragraph 80, the Tribunal begins to deal with a submission that the applicant put and, in particular, that in the middle of the paragraph after the reference to “Forever Living Products”:

other products that are sold and used for therapeutic purposes are within the heading –

So, the Tribunal, in the next few paragraphs, deals with that submission.  And, it comes in paragraph 84, on the following page, to the Comptroller‑General’s response to that:

that the garcinia preparations contain no reference to treating disease and that there is nothing in the claims made on the packaging that could lead the Tribunal to conclude that the products are medicaments for therapeutic or prophylactic purposes.

Then the Tribunal makes a finding.  This is a finding in the Comptroller‑General’s favour:

We doubt that a weight‑loss product, as such, is for a therapeutic or prophylactic purpose, and we doubt that the product is properly described as a medicament.  It would be different if it treated or prevented obesity or some related disease or ailment.  The main purpose of the garcinia preparations appear to us to be cosmetic.

So it is a passing observation.  The Tribunal has not in that paragraph set itself the task of determining the essential character.  It does not use that phrase and it is putting it by way of a reason for rejecting the proposition that was put to it by the applicant. So they are saying, in effect, it is not a 3004 therapeutic, prophylactic or a medicament for therapeutical prophylactic purposes.

GAGELER J:   Is it implicit, Mr Williams, that the Tribunal has conducted a 3(b) analysis and said that what gives the essential character to these goods is the – what sort of acid it is ‑ the equivalent of the vitamin – is that not implicit in what they have done?

MR WILLIAMS:   The Tribunal has not expressed itself to be applying an essential character test and in its terms the finding is about the main purpose of preparations ‑ ‑ ‑

GORDON J:   If you go back to paragraphs – I think it is 2 and 10 of the Tribunal’s reasons – it sets out its analysis of these products and that it contains this acid, which is the scientific name of “garcinia”.

MR WILLIAMS:   Yes, but in this passage here it is asking whether it is for a therapeutic or prophylactic purpose in circumstances where it has made no finding about whether the goods actually have a weight‑loss effect and it just makes an observation about the main purpose.  The main purpose appears to be cosmetic.  We say that is not properly to be read as an essential character finding.  It is not part of an analysis of essential character.

The Tribunal then goes on to give its reasons for the classification of these goods, in paragraph 87. 

86Therefore we need to look at other headings within which the goods are classifiable.

87The other candidates suggested are again headings 1704 and 2106.  Heading 1704 seems an inappropriate classification of the goods since they would be regarded as weight‑loss products rather than confectionery, despite the contents of the excipients.  Heading 2106 food preparations seems inappropriate for reasons we have already mentioned in rejecting a submission that Note 1(a) to Chapter 30 applies.

Now, it is unclear what this is a reference to.  It seems to be a reference back to paragraph 79, the third sentence:

They appear to us not to be within Note 1(a) to Chapter 30.  A weight‑loss preparation would not ordinarily be described as a food or as a food supplement in our opinion.

Now, there are two ways of reading the finding in the last sentence of 87.  One is, to be a food preparation, it must be a food – in other words, the like reasoning that it applied when it says:

for reasons we have already mentioned –

So that is the like reason.  Or it could be read as it would not ordinarily be described as food preparations.  Now, whichever of those – we say that is the universe of realistic possibilities of what the Tribunal meant in this sentence – and each of those is erroneous.  “Food preparation” is a different term which is, as I have said earlier, a residual category, and indeed a highly residual category, and it is to be read according to its terms, and not to be equated with “food supplement”.  If on the other hand the test being applied is it would not ordinarily be described as food preparations, for the reasons I have given at perhaps excessive length, that is not the right test.

So with those observations, can I turn to the Full Court at page 61 of the book.  In paragraph 31 the Full Court agreed with the Tribunal, and obviously we make the same criticism there with the process of construction involved in “food supplements”.  I should mention the beginning of 37, which our friends rely on, on page 63:

It follows, in our view, that the reference to “foods or beverages” is not a reference to any food or beverage, but only to those foods or beverages which are addressed in “Section IV” of the Tariff.  If Parliament had intended otherwise, it might have not referred to Section IV at all.

Well, one could equally say, if the Parliament had so intended, it would have – as it did in a variety of other places in comparable contexts – have said “foods or beverages within Section IV”.  It did not do that.  It merely included, we say by reference of guidance note, a parenthetical reference to section 4.  Going over then to 38, having considered the matter further in some detail, in paragraph 38:

The question thus for consideration is not whether the vitamin preparations comprise “food” or “food supplements”, but rather whether they fall within a heading or subheading within Section IV.

This language is quite unequivocal.  We accept that there is a tension between it and the language that the court has used in the opening words of 37, where it seems to be asking about foods or ‑ ‑ ‑

KIEFEL CJ:   Well, this is where it diverges from the Tribunal, is it not?

MR WILLIAMS:   Yes.  Yes.  Well, it may have diverged in 37.  The Tribunal did not adopt this reasoning, and our friends did not encourage the Full Court to do so.  But in 38 it certainly diverged from the Tribunal.  So the Court will understand the criticisms we make of that passage by reference to what we have said earlier.  Then as to the garcinia preparations, page 74, paragraph 68:

we think that the Tribunal’s reliance upon its earlier reasoning concerning the application of Note 1(a) . . . was not erroneous.

Now, the court does not actually say, with respect, why that is so.  There is no reasoning set out for why that is so.  The court then goes on to what seems to us to be a different point:

In that respect, it did not only rely on those reasons.

Now, with respect, we do not accept that either because the only reason the Tribunal did give was its reference to the earlier reasons.  What the Full Court goes on to here with this finding of fact and the re‑characterisation of this passing observation about the purpose being cosmetic, the re‑characterisation of this is an application of the essential character test, observing that:

It was not challenged on appeal.

It was a finding in the Comptroller‑General’s favour, so it is unlikely it would be:

Having so characterised these products, it follows that they were not “food preparations”.  In other words, in the context of Section IV and Ch 21, a product whose essential character is “cosmetic” cannot also bear the essential characteristic of being a “food preparation”.

We say, with respect, why not?  A Weight Watchers meal might fall within both those descriptions but the finding was not an essential character finding and the duality or the division that the Full Court saw in the last sentence is one that we say does not withstand scrutiny, by reference, for example – we have given some other examples in written submissions – but a Weight Watchers meal might have that dual character as well.

Your Honours, in the concluding paragraphs of the note we set out the errors that we say the Full Court and the Tribunal made, but they have been sufficiently developed by reference to what we have already said and I am afraid I have already grossly exceeded my estimate.  Unless there are matters with which I can assist the Court, those are our submissions.

KIEFEL CJ:   Thank you, Mr Williams.  Yes, Mr Lloyd.

MR LLOYD:   The appeal concerns whether the orders of the court below are the orders that should have been made.  The respondents say they were.  There are two grounds of appeal and some of the matters my friend has raised we say exceed the grounds.  The first ground pertains to the construction of Note 1(a).

Now, if ground 1 is successful on the basis that the Full Court erred in attributing an operational effect to section IV at the end of the sentence, we say that the appeal should still be dismissed because it does not show that the orders of the court below were not the correct orders.  If ground 1 is successful on the basis that Note 1(a) excludes not only foods or beverages but also food supplements which are not foods or beverages then we would still say the appeal should be dismissed because the Tribunal made findings in relation to both foods and food supplements.  It still would not reveal error in the Tribunal’s reasons, so the correct order of the court below would have still been to dismiss it, even if the non‑preferred construction of Note 1(a) was preferred by this Court.

That then leaves me just with the notice of contention point.  I have, in effect, foreshadowed that we do not think we need to put on a notice of contention.  We have, however, prepared a conditional notice of contention,

which we just do not want to prejudice my client’s position if the Court thinks that one is necessary.  So if I can hand up copies of this.

Now, this is a point, we say, that was taken in the Tribunal, which is why there was the alternative findings at the Tribunal.  It was taken below; it was taken in the special leave application as a reason not to grant special leave.  It was taken in our written submissions.  It was responded to in their reply.  There is no prejudice, we say, in allowing this.

But again, our primary position is the finding in relation to food supplements was challenged in the court below.  It was expressly addressed and rejected, and the approach of the Tribunal was expressly endorsed and, in those circumstances, we say that a notice of contention is not required.  May it please the court, they are the ‑ ‑ ‑

KIEFEL CJ:   Thank you, Mr Lloyd.  Yes, Mr Williams.

MR WILLIAMS:   Your Honours, in relation to the notice of contention, and in relation to one other matter, that being the explanatory notes that Justice Bell raised with me early in my address, might we have leave to indicate our response in the note that was sent through?

KIEFEL CJ:   In the note that you are providing.

MR WILLIAMS:   We have only just seen the notice of contention.

KIEFEL CJ:   Yes.

MR WILLIAMS:   We do not have any instructions about it.  Our friend referred early on to Note 2.  Footnote 1 of our submissions refers to a case which is not in the book and that I therefore will not go to, that deals with Note 2, if I can just mention that in passing.

Our friends referred to page 21 of the common appeal book, to the Tribunal at paragraph 57, that I also referred to and in the course of our friend’s address at several points he sought to substitute the Tribunal’s words of “vitamin preparation” with “vitamin delivery system”.  Of course, that is not the term the Tribunal used and it is not to be substituted for the Tribunal’s term, it is a re‑characterisation.

But the opening words of 57 do not refer to these vitamin preparations, which might be apt to pick up the earlier analysis, but rather refer to the indefinite article “a vitamin preparation”, but perhaps little turns on that.  In relation to the affidavit, our friend said that none of it should be admitted.  The text, of course, which is where I went first, I think that was page 14, is available to the Court because it is ‑ ‑ ‑

KIEFEL CJ:   What do you need it for, given the concessions?

MR WILLIAMS:   Little may turn on this.  I will not address it further than to say that as a matter of principle, when the Court is construing an international convention, having regard to what Justice Brennan said in Gerhardy v Brown, the Court engaged in construction of public statutes should not regard itself as bound by the inter partes concessions of litigants.

That is the only point we rely on and we sought to, in the most open way possible, put forward the construction by reference to expert evidence as Justice Heydon counselled in the paragraphs of…..that we refer to.  But we certainly accept that there is no difference between the parties in relation to it.  But, on any view, the text of the Convention, including the French text, is available to the Court as extrinsic material, by reference to 15AB(2)(d) of the Acts Interpretation Act.

The “wharf‑side test” ‑ if there is no ambiguity in the application of a provision, then there is no occasion to go back to other processes of construction.  But the submissions that the respondent put in respect of this are applicable to any question of use of extrinsic material, or any question of use of legislative history, and where questions of construction arise, it is necessary to undertake those processes, aided at the wharf‑side, as your Honour Justice Gageler pointed out, by manuals and legal advice.

In relation to grounds, these matters have been fully agitated in submissions, and there is no point taken about a want of fairness to our friends in relation to the issues that arise.  We take particular points about construction.  Our friends seek to meet those points by saying, well anyway, there is a finding of fact there.  We point to the deficiencies in the finding of fact, and we say that our grounds are well and truly sufficient.  I expect we will not have a difficulty with our friend’s notice of contention but, in any event, the matters have been fully agitated.

In relation to – if your Honours would excuse me a moment.  Yes, foods within section IV, page 64 of the book, paragraph 38.  Our friends rely on, in effect, the opening sentence of paragraph 37.  We rely on the unequivocal language of paragraph 38:

The question thus for consideration is not whether the vitamin preparations comprise “food” or “food supplements”, but rather whether they fall within a heading –

It is perfectly unambiguous language, but in the end it may be that little turns on that, in any event.  Unless there are matters the Court wishes to raise, those are our submissions.

KIEFEL CJ:   Thank you.  The Court reserves its decision in this matter and adjourns to 9.30 am tomorrow in Melbourne and in Sydney.

AT 12.11 PM THE MATTER WAS ADJOURNED