Curragh Queensland Mining Ltd v Wilson, A.V

[1989] FCA 163

Re: CURRAGH QUEENSLAND MINING LIMITED
And: A.V. WILSON; COMPTROLLER-GENERAL OF CUSTOMS and
JOHN NORMAN BUTTON, MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE
No. QLD G338 of 1988
FED No. 163
Customs - Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Customs - importation of gearboxes - application for ad hoc by-law for special rate of duty - application made after new system proposed by Minister - saving provision for old system - policy documents and Ministerial press releases on new policy to grant by-laws - whether decision-maker applied correct test - meaning of "reasonably available" - effect of shortfall in Australian capacity to produce - whether "reasonably available" if capable of being produced in Australia - whether policy statement as to ad hoc applications had effect of limiting decision-maker's discretion.

Administrative Law - judicial review - decision-maker failed to apply correct tests - whether same decision-maker should reconsider the matter - consideration of justice between the parties.

Administrative Decisions (Judicial Review) Act 1977, s.16(1)(d)

Customs Act 1901, ss.269C, 271, 272, 273, 273A

Customs Tariff Act 1982, s.27

HEARING

BRISBANE

#DATE 7:4:1989

ORDER

The court orders that the decision referred to in the statement of claim, namely that made by the first respondent on 15 July 1988 with respect to the applicant's application for a by-law under s.272 or determination under s.273, be set aside.

The matter to which the decision relates be referred for further consideration to the second respondent.

The respondents pay the costs of and incidental to the application, to be taxed.

The court directs that the second respondent cause a further consideration to be undertaken, if not by himself, then by a person other than the first respondent.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an application for an order to review a decision of the first respondent made in July 1988, the application to this Court being made under the Administrative Decisions (Judicial Review) Act 1977. In 1980, the applicant, which is a coalmining company, began to negotiate for the acquisition of two draglines for use on coalfields in this State. The machinery included gear cases - or, as some would say, gear boxes - worth several million dollars each. These were ordered in 1981 and imported late in 1982.

1. On 28 January 1983, the applicant, by its agent, gave notice of an intention to apply for the making of what is called a by-law, an expression which appears to cover an application under s.271, s.272 or s.273 of the Customs Act 1901. The application, proposed to be made to the second respondent, was to make a by-law or determination in respect of the gear cases relating to item 19 of Schedule 4 of the Customs Tariff Act 1982.

2. Section 271 of the Customs Act says, in effect, that where there is an item of customs tariff, the Comptroller, who is the second respondent, may make by-laws for the purposes of that item. Section 272 is as follows:
   

"The Comptroller may specify in a by-law made for the purposes of an item, or a proposed item, of a Customs Tariff that is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law -

(a) the goods, or the class or kind of goods, to which that item or proposed item applies;

(b) the conditions, if any, subject to which that item or proposed item applies to those goods or to goods included in that class or kind of goods; and

(c) such other matters as are necessary to determine the goods to which that item or proposed item applies."

Section 273 need be set out only in part. Section 273(1) says:

"The Comptroller may determine, by instrument in writing, that, subject to the conditions, if any, specified in the determination, an item, or a proposed item, of a Customs Tariff that is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law shall apply, or shall be deemed to have applied, to the particular goods specified in the determination."

The Customs Tariff Act at the time of the events I have been discussing was Act No. 113 of 1982, s.27 of which gave effect to the concessional rate of duty system embodied in Part I of Schedule 4.

1. The purport of s.27 is to enable special rates of duties to be set by inclusion of an item in that Part, and at relevant times there was such an item, being item 19, reading as follows:
   

"Goods, as prescribed by by-law, being goods a suitable equivalent of which that is the produce or manufacture of Australia is not reasonably available - General rate: 2%."

1. The particular item has in fact disappeared from the schedule. That was achieved by Act No. 176 of 1985, the Customs Tariff Amendment Act (No. 2) 1985, where the omission of the relevant item can be found at p 10 of the reprint. However, under s.273A of the Customs Act, the power to act under ss.272 and 273 continues to subsist, notwithstanding the repeal. Section 273A reads:
   

"The Comptroller may make a by-law or determination for the purposes of an item of a Customs Tariff notwithstanding that the item has been repealed before the making of the by-law or determination, but the by-law shall not apply to, and the determination shall not be made in respect of, goods entered for home consumption after the repeal of that item."

The qualification beginning with the word "but" does not, as is common ground, apply here.

1. The application itself was made in February 1983. Without formally declining to make a by-law, the second respondent did not in fact do so, and there was quite a deal of information supplied about the matter in ensuing years. The delay is certainly odd, but neither side says that it gives the parties any special rights in these proceedings. It seems to be common ground that if the application was not, as the applicant complains, dealt with according to law, then it now should be, although the application to the second respondent is quite old.

2. The first respondent, having appropriate authority by delegation from the second respondent, decided the application on 15 July 1988 and declined to make a by-law. He gave the reasons for his decision on 31 August 1988. The expression "make a by-law" is a convenient way of describing the process under s.273, as well as that under s.272.

3. It is an important part of the applicant's attack upon the decision that the decision-maker, the first respondent, did not apply the statute itself, but, rather, applied a gloss placed upon it by policy documents issued on 10 November 1982, to which further reference is made below. There was some debate before me as to what was the best guide to the reasoning processes of the first respondent, who gave oral evidence before me. I found him an impressive witness, but he did not tend to understate the extent to which he had regard to the legal principles which precluded him from treating the policy documents (to which I have referred) as entirely taking away his discretion or otherwise making an extra-parliamentary amendment of the statute.

4. It is my opinion that the best source of information as to the process whereby the decision was arrived at consists in the terms of the decision itself, given on 15 July 1988, together with the reasons given in the following month. These seem to me inherently more reliable than the first respondent's current reflections on the subject, which in the end I found to be only of marginal help. Although I have taken into account the oral evidence of the first respondent on the topics in question, I have found it unnecessary, in formulating these reasons, to make detailed reference to it.

5. Some account must, however, be given of the policy documents alluded to above. The policy documents consisted in a press release, to which was attached a statement about a Commercial Tariff Concession System. The press release was issued on 10 November 1982 by two Ministers, and it explained that the then Commercial By-law System would be modified so as to accord more closely with the government's industries assistance policy guidelines, to reduce administrative difficulties and costs. The press release said that in future the Commercial By-law System would be known as the Commercial Tariff Concession System. The press release went on to explain proposed changes, and legislation was foreshadowed as being likely to be introduced, commencing on 1 July 1983.

6. In fact, legislation was introduced effective from that date, and it was in the form of a new Part XVA inserted in the Customs Act, headed "Commercial Tariff Concession Orders". The press release had annexed to it, as I have mentioned, a statement explaining the new system, which began in the first paragraph headed "New Criterion" by saying:
   

"The Customs Act and relevant associated legislation will be amended to introduce a commercial tariff concession system under which

(a) the Minister shall determine that goods or a class or kind of goods may be imported into Australia at concessional rates of duty if he is satisfied that no goods or a class or kind of goods serving similar functions are produced in Australia or are capable of being produced in Australia in the normal course of business in Australia".

It is to be noted that the new Part, which came into force on 1 July 1983, uses language in s.269C reflecting the Minister's statement. It reads in part:

"Subject to this Part, where the Comptroller . . . is satisfied that -

(a) goods serving similar functions to particular goods are not produced in Australia; and

(b) goods serving similar functions to 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."

1. The effect of other provisions was to achieve the result that if an order was made under s.269C, concessional rates of duty applied. It is necessary to notice that the expressions used in the Ministerial statement and in s.269C do not have any counterpart in ss.272 and 273 or in item 19.

2. Under para.4 of the Ministers' statement, the new arrangements were to operate on and from July 1983. Subsequent paragraphs went on to deal with interim arrangements. Paragraph 5, headed "Interim arrangements i.e. from now until 30 June 1983" began:
   

"Applications will continue to be considered under the existing provisions of item 19 in schedule 2 . . ."

(which, it is common ground, should be "schedule 4") -

". . . to the Customs Tariff Act and sections 271-273 of the Customs Act. The following aspects of the Government's decision will, however, be implemented immediately . . ."

and there follows a list of four matters: effective date of concessions, availability of concessions, the treatment of intransit goods, and the definition of "produced in Australia".

1. The only one of those provisions which, as it seems to me, is necessary to mention in any further detail, is the availability of concessions. This is dealt with in para.9 of the Minister's statement. That is headed "Availability of Concessions" and it concludes with the expression:
   

"No provision will be made for ad hoc decisions to be issued to individual importers".

The correct interpretation of that expression, in its context, plainly appears to be that the type of importer whose application was discussed by the Full Court in Minister for Industry and Commerce v. Western Mining Corporation Ltd (1985) 7 FCR 67 could no longer apply under the new system, that is, a particular importation of goods by a particular importer would not be able to be separately dealt with.

1. Counsel for the respondents suggested that I should read that and other similar provisions as if they said that no provision will be made for ad hoc decisions to be issued to individual importers except in special circumstances. I find it impossible to arrive at that reading.

2. What has happened, according to the applicant's case, is that whereas there was an entitlement in the applicant to be dealt with under the old regime, it was dealt with under the interim arrangements, which so far as relevant corresponded to the provisions of the new Part XVA which came into force on 1 July 1983. The applicant contends - and it is not disputed, and seems to me to be correct - that it continued to have a right to have its application, made early in 1983, dealt with under ss.272, 273 and 273A, notwithstanding the introduction of the new system, and notwithstanding the fact that in 1985 the very item which is the centre of the dispute was itself deleted from the Customs Tariff Act 1982; nothing is said by counsel, nor appears to me, to turn on that.

3. In the end, the immediately relevant statutory provisions, although forming part of a more complex set of provisions, are not in themselves very extensive. The essence of the matter is that the Comptroller had, under ss.272 and 273, power to make a by-law or determination to bring particular goods within the scope of item 19. It is important, from the point of view of the applicant's case, that both s.272 and s.273 included within their scope not only classes of goods, but particular goods. The expression "particular goods", it is true, is used in s.273 and not in s.272, but it is clear enough that the word "goods" where it first appears in the introduction to s.272 means particular goods and not a class or kind of goods.

4. In considering whether to exercise his power under s.272 or s.273, the Comptroller would ordinarily have to consider whether the goods in question were ones in respect of which a "suitable equivalent . . . that is the produce or manufacture of Australia is not reasonably available."
   Reasonable Availability

5. Mr McMurdo, for the applicant, contended that the first respondent, who was the decision-maker, erred in his treatment of this subject. The way in which the first respondent dealt with reasonable availability was undoubtedly prompted by the policy statement to which I have alluded, but the error alleged to have existed, if it did exist, may, in my view, be discerned from the terms of the reasons themselves, given on 31 August 1988.

6. Paragraphs 23 and 24 of those reasons read as follows:
   

"23.As from 10th December 1982 the new policy modified all previous criteria for the granting of a by-law. Although the Comptroller (or his Delegate) had to be satisfied within the 'suitability equivalent reasonably available' requirements, the IAC's recommendation (refer paragraph 1 supra) as accepted by the Government (refer paragraphs 2 to 5 supra inclusive) required the decision maker to place a different emphasis upon each requirement.

24. 'Suitably equivalent' was modified to the extent of considering goods as a class or kind of goods. 'Reasonably available' was modified by the strengthening of the existing criteria (refer paragraph 5 supra) that shortfall in Australian capacity to produce should not be a sufficient reason to grant a by-law."

1. Reading this quite literally, it seems to say that by some means the previous application of the expression which appears in item 19, "reasonably available", was modified so that shortfall in Australian capacity to produce should not be a sufficient reason to grant a by-law.

2. The principle may be illustrated in this way: suppose that two importers wish to bring in a certain quantity of particular goods about the same time, each requires the goods within a period of, say, 12 months and the facts are that there is capacity in Australia to produce goods to satisfy only one within that time. Then, reading para.24 as I do, the result would be that there would not be a sufficient reason to grant a by-law in favour of either. It is to be noted that the expression used by the first respondent was not that a by-law could be granted but in the exercise of discretion would not be; the suggestion was that the very words used in the statute, "reasonably available", were modified to produce the result mentioned. Mr Dutney, for the respondent, devoted considerable ingenuity to explaining away the actual words used and invited me to read them down by reference to the oral evidence, but my suspicion, which has firmed into a comfortable feeling about the matter, is that the draftsman of these paragraphs meant what he said.

3. Paragraph 24 refers, it will have been noticed, to para.5 of the reasons, which quotes from the terms of what is described as an "Interpretation of Item 19 By-law Criteria". The quotation is as follows:
   

". . . In the by-law context there is no requirement for local manufacturers to be able to supply the whole of the Australian needs for a particular good. The fact that there may be a gap between total demand and local production is recognized and taken into account when levels of tariff assistance are set."

1. This seems to me to be consistent with the construction I have placed upon the reasons; that is, the question whether or not goods are available in the sense of being within the existing production capacity of Australian industry is to be treated as immaterial. In my opinion, that is not a construction which the words "reasonably available" are capable of bearing. There was, as I have said, some question raised as to whether the error, for that I believe it to be, was caused by a statement of policy tending towards illegal action or by a mistaken application of a policy not having that tendency. It seems to me unnecessary to resolve that point, although on the face of it the former view appears correct. The first respondent took from the expression used in para.5 the implication that if there is not enough local capacity to manufacture the goods in question, then there is no occasion to grant a by-law. Any doubt, in my opinion, which one may rationally entertain as to whether the first respondent was treating the expression "reasonably available" as if it had been modified in an extra-parliamentary way is dispelled by reference to para.25 of his reasons.

2. This reads as follows:
   

"On the material before me (refer paragraphs 10 to 14 supra inclusive), I as a Delegate of the Comptroller, determined that goods of the kind referred to by the Applicant in the application for the by-law were produced or were capable of being produced in Australia at the relevant time being the time prior to the importation of the goods. It was therefore inappropriate for a by-law to be granted" (emphasis added).

1. It would be noted that the first respondent as delegate determined that the goods were either produced or capable of being produced. Of course, if they were merely capable of being produced that might or might not mean that they were reasonably available. One would have to consider the urgency of the would-be importer's requirement for the goods in question, the time likely to be necessary to prepare to make the goods, and so forth.

2. It was suggested before me, and I agree, that the alternatives ("produced or capable of being produced") are quite appropriate considerations under the new system, but I believe that to be a wrong test to be applied under the former statutory provisions. I have been forced to the conclusion that what was done, as to the "reasonably available" criterion, was to treat it as having been modified, so that if the goods in question were "capable of being produced in Australia" at the relevant time, then the situation was one which was within the description at the end of paragraph 25; that is, "inappropriate for a by-law to be granted".

1. It is my opinion that, in the respect asserted by the applicant, there was an error of law. The applicant was entitled to have his application considered by the first respondent in accordance with the relevant statutory provisions, and not (as was done) as if the test were whether the goods were produced or capable of being produced (that being the test under the new system) but on the basis of a decision whether the goods were "reasonably available".
   Ad hoc Application

2. Section 273(1) empowers the Comptroller to make a determination that a particular item shall apply to particular goods specified in the determination, and as I have mentioned, s.272, although not using similar language, has a similar affect. Mr McMurdo argued that, by applying the policy statement, the first respondent had erroneously treated his discretion as limited, so that he could not make what was described in argument as an ad hoc determination.

3. I have already mentioned the reference to this subject in para.9 of the attachment to the Ministerial statement. I refer also to the Australian Customs Notice issued on 11 November 1982, no.82 of 238, para.(b) of which makes a similar statement. Again, the contention made on behalf of the respondents was that these indications of policy were merely general and not absolute. Even if that is so, the ultimate question is whether or not, on a fair reading of all the documents together, the applicant is right in saying that the first respondent treated the possibility of an ad hoc application as being entirely excluded. I say the documents must be read together, because the statement of reasons makes reference to the Customs Notice and the policy statement, in particular, by saying in the third paragraph:
   

". . . the following features of the new system will come into operation from 10 December, 1982:-

(b) Availability of Concessions No further ad hoc concessions will be issued . . ."

Paragraph 24 of the statement of reasons, which is quoted above, asserts that "'Suitably equivalent' was modified to the extent of considering goods as a class or kind of goods." Consistently with that, para.25, which has also been quoted, makes a determination with respect to goods "of the kind referred to by the Applicant in the application for the by-law".

1. In referring to an ad hoc determination, the parties intended to deal with the question of by-laws or determinations with reference to particular importations, rather than with reference to classes or kinds of goods. It appears to me that in para.25 there is strong evidence that what the first respondent attempted to do was not to decide whether a suitable equivalent for the particular goods sought to be imported was available, but to decide whether goods of the kind referred to were available. In using the word "available", of course, I am passing over the other criticism, that the expressions used were taken from the terms of s.269C, which came into force on 1 July 1983.

2. When item 19 and ss.272 and 273 are read together, they appear to me to contemplate the possibility of making a by-law or determination in respect to particular goods. Mr Dutney argued that the first respondent did not altogether exclude the notion of an ad hoc by-law or determination, but applied the statutory test faithfully, adding to it only some consideration of the question whether because of the availability of the particular class of goods a by-law should, as a matter of discretion, be granted. I can find no hint of this in the actual words used at the time when, it seems with some care, the first respondent wrote his reasons. I therefore am forced to the conclusion that the point taken by the applicant, that the first respondent has not dealt with the application as one requiring consideration of the matters in item 19 with respect to particular goods, is right; whether one says the first respondent has altogether excluded the possibility of making an ad hoc determination - or however one puts it - it seems to me that the error is there.

3. On the two grounds I have dealt with, the decision in question must be set aside. A third point taken on behalf of the applicant related to the retrospective operation of any determination. Since no determination was made in favour of the applicant, the matter seems to me to be peripheral, but it nevertheless has some substance. I find it unnecessary, however, to deal with the point.

4. The only other question which arises is whether my direction should be such as to permit reconsideration of the matter by the first respondent. The power to make a direction excluding reconsideration by the first respondent is one the exercise of which depends on all the circumstances. Here, although the first respondent has conscientiously and thoroughly approached the difficult task he was given, namely, one of applying his mind to the former system, in force years ago, I have been obliged to reach the conclusion that he did not apply the correct statutory tests. I think that the extent to which this occurred is such that it is necessary, in order to do justice between the parties (to use the expression in s.16(1)(d) of the Administrative Decisions (Judicial Review) Act) that an order be made that on the reconsideration, the matter be handled by a person other than the first respondent; I hasten to add that in making that order I do not in any way intent to impugn the first respondent's ability or integrity.

5. It will be ordered that the decision referred to in the statement of claim, namely that made by the first respondent on 15 July 1988 with respect to the applicant's application for a by-law under s.272 or determination under s.273, be set aside. It will further be ordered that the matter to which the decision relates be referred for further consideration to the second respondent, and it will be directed that the second respondent cause a further consideration to be undertaken, if not by himself, then by a person other than the first respondent.