GM Holden Limited v Commissioner of the Anti-Dumping Commission
[2014] FCA 708
FEDERAL COURT OF AUSTRALIA
GM Holden Limited v Commissioner of the Anti-Dumping Commission [2014] FCA 708
Citation: GM Holden Limited v Commissioner of the Anti-Dumping Commission [2014] FCA 708 Parties: GM HOLDEN LIMITED v COMMISSIONER OF THE ANTI-DUMPING COMMISSION (AS SUCCESSOR TO THE CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS AND BORDER PROTECTION SERVICE), MINISTER FOR IMMIGRATION AND BORDER PROTECTION and ANTI-DUMPING REVIEW PANEL (AS SUCCESSOR TO THE TRADE MEASURES REVIEW OFFICER) File number: VID 555 of 2013 Judge: MORTIMER J Date of judgment: 4 July 2014 Catchwords: ADMINISTRATIVE LAW – Application under Administrative Decisions (Judicial Review) Act 1977 (Cth) and Judiciary Act 1903 (Cth) for review of recommendations and decisions in relation to the issue of dumping and countervailing duty notices against Chinese importers pursuant to Customs Act 1901 (Cth) – construction of phrase “like goods” – whether denials of procedural fairness – construction of the statutory terms “normal value”, “material injury”, “public body” and “adequate remuneration” – construction of “selected” or “residual” exporters – no failure to afford procedural fairness – misconstruction of “investigated” resulted in misunderstanding and misconstruction by CEO and Minister of the terms “selected exporters” and “residual exporters” – reviewable decisions of CEO and Minister affected by jurisdictional error – application allowed in part. Legislation: Administrative Decisions (Judicial Review) Act1977 (Cth) s 5
Customs Act 1901 (Cth) ss 42, 269T, 269TAAC, 269TAC, 269TACB, 269TACC, 269TAG, 269TB, 269TC, 269TD, 269TDA, 269TDAA, 269TEA, 269TG, 269TJ, 269ZL, 269ZN, 269ZX, 269ZZA, 269ZZD, 269ZZE, 269ZZL, 269ZZK, 269ZZM
Customs Amendment (Anti-Dumping Commission) Act 2013 (Cth)
Customs Amendment (Anti-Dumping Improvements) Act (No 1) 2012 (Cth)
Customs Tariff (Anti-Dumping) Act 1975 (Cth) ss 8, 10
Evidence Act 1995 (Cth) s 191
Judiciary Act 1903 (Cth) s 39BAgreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
Cases cited: Avon Downs v Federal Commissioner of Taxation (1949) 78 CLR 353
Buck v Bavone (1976) 135 CLR 110
Cabal v Attorney-General (Cth) (2001) 113 FCR 154; [2001] FCA 583
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Foley v Padley (1984) 154 CLR 349
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54
Hope v Bathurst City Council (1980) 144 CLR 1
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149
Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21
Panasia Aluminium (China) Ltd v Attorney-General (Cth) (2013) 217 FCA 64; [2013] FCA 870
Pilkington(Australia) Ltd v Minister for Justice and Customs (2002) 127 FCR 92; [2002] FCAFC 423
R v Connell; Ex parte Hetton Bellbird Collieries Ltd (No 2) (1944) 69 CLR 407
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212; [2003] HCA 56
Swan Portland Cement Ltd v Minister for Small Business and Customs (1991) 28 FCR 135
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63
Thai Pineapple Canning Industry Corp Ltd v Minister for Justice and Customs (2008) 104 ALD 481; [2008] FCA 443
Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8WTO Appellate Body Report, United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, DS379 (11 March 2011)
WTO Appellate Body Report, United States — Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R (19 January 2004)
WTO Panel report, European Communities — Anti-Dumping Measure on Farmed Salmon from Norway, WTO Doc WT/DS337/R (adopted 15 January 2008)Aronson M and Groves M, Judicial Review of Administrative Action (5th ed, Lawbook, 2013)
Date of hearing: 24–26 March 2014 Date of last submissions: 26 March 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 257 Counsel for the Applicant: Mr RM Niall SC and Mr C Horan
Solicitor for the Applicant: Hunt & Hunt Lawyers Counsel for the Respondent: Mr PRD Gray SC and Ms Z Maud Solicitor for the Respondent: Australian Government Solicitor
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 555 of 2013
BETWEEN: GM HOLDEN LIMITED
Applicant
AND: COMMISSIONER OF THE ANTI-DUMPING COMMISSION
First RespondentMINISTER FOR IMMIGRATION AND BORDER PROTECTION
Second RespondentANTI-DUMPING REVIEW PANEL
Third Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
4 JULY 2014
WHERE MADE:
MELBOURNE
THE COURT DIRECTS THAT:
1.On or before 4.00pm on 18 July 2014, the parties file agreed proposed final orders reflecting the Court’s reasons for judgment, together with a note not exceeding two pages explaining the basis for the orders proposed.
2.If no agreement can be reached pursuant to paragraph 1, on or before 4.00pm on 18 July 2014, the parties file and serve separate proposed final orders reflecting the Court’s reasons for judgment, together with a submission not exceeding two pages explaining the basis for the orders proposed.
3.The parties have leave to file and serve submissions on costs, not exceeding three pages, on or before 4.00pm on 18 July 2014.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 555 of 2013
BETWEEN: GM HOLDEN LIMITED
Applicant
AND: COMMISSIONER OF THE ANTI-DUMPING COMMISSION
First RespondentMINISTER FOR IMMIGRATION AND BORDER PROTECTION
Second RespondentANTI-DUMPING REVIEW PANEL
Third Respondent
JUDGE:
MORTIMER J
DATE:
4 JULY 2014
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
This is an application for judicial review of six decisions, made by the Chief Executive Officer of the Australian Customs and Border Protection Service (now Commissioner of the Anti-Dumping Commission), the Trade Measures Review Officer (now Anti-Dumping Review Panel) and the Minister for Home Affairs (now Minister for Immigration and Border Protection), in respect of anti-dumping measures under the Customs Act 1901 (Cth) (the Customs Act). The decisions concern certain aluminium road wheels (ARWs) exported to Australia from the Peoples’ Republic of China (PRC). The applicant, GM Holden Ltd (Holden), seeks orders under s 5 of the Administrative Decisions (Judicial Review) Act1977 (Cth) (AD(JR) Act) and under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act). It requires an extension of time under the AD(JR) Act in respect of some of the decisions under challenge, which was not opposed by the respondents. The measures were imposed after an investigation following an application by Arrowcrest Group Pty Ltd (Arrowcrest), requesting the Minister to publish a dumping duty notice and a countervailing duty notice in respect of the wheels. Arrowcrest is a manufacturer of ARWs in Australia. The applicant purchases ARWs from a number of sources, including exports from the PRC. It objected to the imposition of such duties and actively participated in the investigation and decision-making process, seeking to persuade the respondents that such duties should not be imposed.
Chronologically, the first “decision” challenged is in fact a report in June 2012 by the Chief Executive Officer of the Australian Customs and Border Protection Service (CEO) to the responsible Minister, the Minister for Immigration and Border Protection. Pursuant to ministerial arrangements, the functions under the Customs Act were then performed by the Minister for Home Affairs. This report recommended the Minister publish a dumping duty notice and a countervailing duty notice in respect of the ARWs which had been the subject of an investigation under Part XVB of the Customs Act. The last decision under challenge was made in early May 2013, being the Minister’s decision to accept recommendations in a report by the CEO after a further investigation, and effectively maintaining the imposition of dumping duties and countervailing duties on the ARWs which had been the subject of the initial report by the CEO. Between these two decisions, four other decisions relating to the imposition of these duties are also challenged.
For reasons I set out below, I have concluded that Holden has made out one of its grounds of review. The respondents sought, and the applicant did not oppose, an opportunity to consider the Court’s conclusion and reasons for the purpose of making submissions about appropriate orders, if any of Holden’s grounds were successful. Directions have been made affording the parties that opportunity, and the Court will pronounce final orders after those submissions have been made and considered.
THE APPLICATION
Holden’s application is made under the AD(JR)Act and the Judiciary Act. No objection to the Court’s jurisdiction was made. Although several of the decisions challenged were in the form of recommendations or reports, the respondents did not submit the decisions lacked the character of finality, or insufficiently affected rights or interests, such that they could not be the subject of orders in the nature of certiorari.
The proceeding was commenced and continued by application and affidavit. At the hearing, Holden was granted leave to rely on a second further amended application, which contained one additional ground that had been addressed by both parties in their outlines of submissions filed before hearing. At the hearing, Holden indicated that it did not press grounds 6 and 7 of the second further amended application. Accordingly, they have not been considered.
Holden requires an extension of time under the AD(JR) Act in respect of some of the decisions challenged. The respondents did not oppose an extension of time being granted. Since the Court has jurisdiction under s 39B of the Judiciary Act in respect of the same decisions, it is in the interests of the administration of justice for the whole of the dispute between the parties to be ventilated and determined. An extension of time will be granted.
LEGISLATIVE SCHEME
Overview
The Customs Act is the domestic implementation of Australia’s obligations under a number of international agreements, which are set out in the judgment of Nicholas J in Panasia Aluminium (China) Ltd v Attorney-General (Cth) (2013) 217 FCA 64; [2013] FCA 870 at [7]. The one of principal importance in the present proceeding is the Anti-Dumping Agreement, or, more formally, the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994. A definition of dumping is set out in Art 2.1:
For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.
In Pilkington(Australia) Ltd v Minister for Justice and Customs (2002) 127 FCR 92; [2002] FCAFC 423 at [3], the Full Court described the central operation of Part XVB of the Customs Act:
Dumping is the exporting of goods to a country (here, to Australia) at a price below the “normal” or foreign domestic price of the goods. The Act provides for a procedure for the investigation of complaints of dumping made by Australian companies, which procedure involves the Chief Executive Officer (CEO) of the Australian Customs Service (Customs) providing a report to the Minister about the matter. That report is concerned with a period identified in steps leading up to the report as the “investigation period”. (In this case the “investigation period” ended on a date some twenty months before the Minister’s decision was made.) After considering the CEO’s report the Minister may take “anti-dumping measures” that include the publication of a “dumping duty notice” which has the effect of duty becoming payable under the Duty Act in respect of goods covered by it.
At [22]-[23], the Full Court explained the way in which Part XVB came to be introduced:
… it should be noted that Part XVB reflects, in substance, amendments to the Act made in 1994 by the Customs Legislation (World Trade Organisation Amendments) Act 1994 (Cth) (the 1994 Act) and in 1998 by the Customs Legislation (Anti-Dumping Amendments) Act 1998 (Cth) (the 1998 Act). The explanatory memorandum to the Bill which became the 1994 Act stated as follows:
This Bill is one of a package of Bills that make changes to Australian law to enable Australia to meet its obligations under agreements negotiated in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).
This Bill will amend the Customs Act 1901 and the Anti-Dumping Authority Act 1988 to bring Australia’s anti-dumping and countervailing regimes into conformity with the standards and principles arising from the Uruguay Round agreements.
While the fundamental elements of dumping and subsidy investigations remain unchanged the Agreements now provide much greater guidance and prescriptive direction in the conduct of an investigation. The Bill will amend the relevant Acts to incorporate the broader technical and operational matters as required by the agreements.
A summary of the main points follows.
…
• The terms of the agreements will also lead to a formalisation and expansion of the public file system which is intended to provide interested parties with the opportunity to comment on information available to the investigating authorities. There will be a corresponding emphasis on parties providing non-confidential versions of submissions and the possibility to disregard information if a non-confidential summary is not provided. Parties which are not directly involved in the particular investigation will also receive increased detail via a broader range of public notifications. While these provisions will impose additional obligations both on the administrators and interested parties, they should result in a process that is more transparent and open.
…
[emphasis added]The 1998 Act amended the procedure leading to a decision by the Minister. The then existing two-stage, two-agency investigative process, involving a preliminary inquiry by Customs and a further inquiry by the Anti-Dumping Authority (ADA), was changed. The ADA was abolished and Customs took on the sole responsibility for investigations. The second reading speech of the then Minister in respect of the Bill which became the 1998 Act included the following:
Australia has committed itself to anti-dumping and countervailing legislation which is consistent with the obligations imposed by the relevant agreements of the World Trade Organisation, WTO. Of particular importance is the obligation that “throughout an investigation all interested parties must have a full opportunity for the defence of their interests”, including the opportunity to see all relevant information, to acquaint themselves with the opposing views and to offer rebuttal arguments.
The 1998 amendments introduced the review function performed by the Trade Measures Review Officer (TMRO). That officer’s functions are of some importance to the applicant’s arguments in this proceeding and are dealt with in more detail below at [37]-[45]. It should also be noted that the legislative scheme has been subject to further amendment after the events giving rise to this proceeding, but those amendments need not be addressed.
Relevantly for this proceeding, the publication of notices under Part XVB of the Customs Act triggers the operation of ss 8 and 10 of the Customs Tariff (Anti-Dumping) Act 1975 (Cth) (the Duty Act) and the imposition of dumping duties and countervailing duties.
Before descending into the relevant detail of Part XVB, there is one further aspect of the Full Court’s decision in Pilkington 127 FCR 92; [2002] FCAFC 423 which is important to the resolution of the competing contentions in this proceeding. At [25]-[28], the Full Court set out the applicable principles of statutory construction in the context of a legislative scheme such as Part XVB:
The particular agreement negotiated at the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) to which the explanatory memorandum made reference (see [22] above) was the Implementation Agreement. The Implementation Agreement created international obligations upon Australia. To the extent that the Parliament has passed (as it has) legislation dealing with the subject matter of the Implementation Agreement, that legislation will be interpreted and applied, as far as its language permits, so that it is in conformity, and not in conflict, with Australia's international obligations. Where a statute is ambiguous (the conception of ambiguity not being viewed narrowly) the court should favour a construction consistent with the international instrument and the obligations which it imposes over another construction: Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 384 [97].
The ascertainment of the meaning of, and obligations within, an international instrument (here the Implementation Agreement) is to be ascertained by giving primacy to the text of the international instrument, but also by considering the context, objects and purposes of the instrument: Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 230 (per Brennan CJ, agreeing with McHugh J), at 240 (per Dawson J), at 251-256 (per McHugh J), at 277 (per Gummow J, also agreeing with McHugh J); and Morrison v Peacock (2002) 210 CLR 274 at 279 [16]; 192 ALR 173 at 176 [16] (per Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ). The manner of interpreting the international instrument is one which is more liberal than that ordinarily adopted by a court construing exclusively domestic legislation; it is undertaken in a manner unconstrained by technical local rules or precedent, but on broad principles of general acceptation: Stag Line Ltd v Foscolo Mango & Co Ltd [1932] AC 328 at 350; James Buchanan & Co Ltd v Babco Forwarding and Shipping (UK) Ltd [1978] AC 141 at 152; Fothergill v Monarch Airlines Ltd [1981] AC 251 at 281-282, 285, 293; Shipping Corporation of India Ltd v Gamlen Chemical Co (Australasia) Pty Ltd (1980) 147 CLR 142 at 159; Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 412-413; Applicant A at 255; and Morrison v Peacock at 279 [16]; 176 [16]. The reasons for this approach were described by Lord Diplock in Fothergill at 281-282, as follows:The language of that Convention that has been adopted at the international conference to express the common intention of the majority of the states represented there is meant to be understood in the same sense by the courts of all those states which ratify or accede to the Convention. Their national styles of legislative draftsmanship will vary considerably as between one another. So will the approach of their judiciaries to the interpretation of written laws and to the extent to which recourse may be had to travaux préparatoires, doctrine and jurisprudence as extraneous aids to the interpretation of the legislative text.
The language of an international convention has not been chosen by an English parliamentary draftsman. It is neither couched in the conventional English legislative idiom nor designed to be construed exclusively by English judges. It is addressed to a much wider and more varied judicial audience than is an Act of Parliament that deals with purely domestic law. It should be interpreted, as Lord Wilberforce put it, in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978] AC 141, 152, ‘unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation.’The need for a broad or liberal construction is reinforced by the matters which can be taken into account under Art 31 of the Vienna Convention on the Law of Treaties done at Vienna on 23 May 1969, in accordance with which Australian courts interpret treaties: Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 265; Commonwealth v Tasmania (Tasmanian Dam Case) (1983) 158 CLR 1 at 93, 177; and Applicant A at 251-252. The word “treaty” is defined in the Vienna Convention as an international agreement concluded between States in written form and governed by international law, whether in one or more instruments and whatever its particular designation. This covers the Implementation Agreement.
It is unnecessary to set out in detail the provisions of the Implementation Agreement. It sets out, in particular in Arts 5, 6 and 12, the framework for the investigation and determination of complaints in an ordered manner, giving some emphasis to the provision of relevant information in a public way to all interested parties. Procedural transparency is called for. This is not surprising given that the parties interested in any conclusion by the authorities (here the Minister) include foreign corporations and foreign governments. Also, Art 5 makes clear that the primary method of initiating an investigation is to be by written application by or on behalf of the “domestic industry”. Provision is also made for “the authorities” to initiate the investigation: see Arts 5.1 and 5.6.
Finally, the parties agreed that the applicable version of the Customs Act was that as at 25 June 2012. References to the scheme set out below are to that version.
Relevant aspects of the investigation process
An investigation into dumping may be required either as a result of a decision by the Minister (s 269TAG) or, and more usually, because of an application by a person. Both parties accepted that the application is intended by the scheme to frame the investigation which is then conducted, unless the application is rejected pursuant to ss 269TC(1)-(3). The application provision relies on the identification, as a matter of fact, of a “consignment of goods” although not necessarily one actually imported at the time of the application. It provides:
269TB Application for action under Dumping Duty Act
(1) Where:
(a) a consignment of goods:
(i) has been imported into Australia;
(ii) is likely to be imported into Australia; or
(iii) may be imported into Australia, being like goods to goods to which subparagraph (i) or (ii) applies;
(b) there is, or may be established, an Australian industry producing like goods; and
(c) a person believes that there are, or may be, reasonable grounds for the publication of a dumping duty notice or a countervailing duty notice in respect of the goods in the consignment;that person may, by application in writing lodged with the Customs in accordance with subsection (5), request that the Minister publish that notice in respect of the goods in the consignment.
Paragraph (b) should be noted. It allows for an application where there is currently no Australian industry, but where one “may be established”. This highlights a point made by Lockhart J in Swan Portland Cement Ltd v Minister for Small Business and Customs (1991) 28 FCR 135, to which further reference will be made, that “industry” is not the same as “market”: the provisions do not look only to what is occurring in the industry at the time of the consignment, but rather what might occur in the future.
As the applicant submitted, the focus of s 269TB is on a specific consignment of goods — in that way, the “goods” are readily identifiable at a factual level.
Subject to an applicant withdrawing the application, the CEO is then required by s 269TC, within a short period of time (20 days), to examine the application with a view to one of two consequences. Either the application will be rejected on the grounds provided in ss 269TC(1)-(2), or the application and the investigation process will be notified to the public, other exporters and governments of countries from which those exports come.
In s 269TC the referential phrase used is “goods the subject of the application”: this is one of the textual indicators that the reference point for comparison in respect of “like goods” comes from the goods as described in the application. Section 269TC(4) sets out, with considerable particularity, what must be published in the public notice. Several observations can be made about this provision, relevant to the grounds advanced by the applicant. The breadth and depth of notification is considerable, and this reflects the Anti-Dumping Agreement’s emphasis on the importance of notification, receipt of submissions and information, and consideration of those submissions and information. Section 269TC(4) is thus one example of the domestic implementation of the Anti-Dumping Agreement. The second observation is that the investigation process is intended to move efficiently and in a timely way, with time limits set out for various steps. The third is that the notification through subs (4) is designed to emphasise the importance of the public record as a receptacle of information for all interested parties.
On receipt of submissions from interested parties as invited by the notice, the CEO is empowered by s 269TD to make a preliminary affirmative determination that there appear to be sufficient grounds for the publication of dumping or countervailing duty notices. Such a determination was made by the CEO in the present circumstances.
A critical step then occurs — the publication of a Statement of Essential Facts on the public record. Section 269TDAA requires the document to foreshadow the facts the CEO proposes to rely on in making a recommendation to the Minister about the application. This stage is an important aspect of the scheme’s procedural fairness requirements. However it is also a way for the CEO to ensure that the information proposed to be used is as reliable and complete as it can be. By giving those with knowledge and information an opportunity to see the proposed factual findings and the material on which they are based, and to comment on them, the scheme intends to support the CEO’s fact-finding ability.
By s 269TEA (and provided there has been no termination of the investigation pursuant to s 269TDA), the CEO is required to report to the Minister on the outcome of the investigation (CEO report). The subject matter of the report is “the goods the subject of the application”, emphasising again how the scheme relies on the goods identified in the application to frame the investigation and decision-making powers and functions under Part XVB. The report is to contain recommendations to the Minister concerning dumping duties, the matters of which the Minister can be satisfied and what consequent notifications need to be given.
Section 269TEA(2) is important. It provides:
The CEO’s report must, to the extent that it is practicable to do so, also extend to any like goods not covered by the application but imported into Australia during the period starting on the date of initiation of the investigation and ending 20 days after the statement of essential facts in respect of the investigation is placed on the public record.
By this provision, the comparison required to be made in the report by the CEO is between the goods in the consignment on which the application was based, and goods which are identical in all respects or have characteristics closely resembling the goods in the consignment. If such goods were imported in the period referred to in subs (2), that provision requires the CEO to report on them (and the effect of their importation) if practicable. Section 269TEA(3) requires the CEO to have regard to the two rounds of submissions for which the scheme provides, one round before and one after the publication of the statement of essential facts. Section 269TEA(4) confers a discretion on the CEO to have regard to late submissions made in the second round, the import of the provision being that late submissions should not delay the timely preparation of the report to the Minister. That judgment is left by the statute to the opinion of the CEO.
The dumping duty notices
On receipt of the CEO report the Minister is then able to address the question whether to publish dumping duty notices or countervailing duty notices. This is the task imposed by s 269TG. There are comparable provisions relating to the publication of notices concerning third-country dumping duties or countervailing duties, based on material injury to an industry in that third country. Those provisions are not presently relevant, although they turn even more centrally on the concept of “like goods”, because it is only the “like goods” which are being imported into Australia. The comparative term in these third-country provisions is “any goods produced or manufactured in a particular country”. There is nothing in the text or context of these provisions which suggests the term “like goods” is used any differently there than in the provisions with which this case is concerned, especially since the term is defined in s 269T. The proposition that the “respects” or characteristics to which the definition in s 269T refers are physical or use-based, rather than extending to matters such as market, is reinforced by the comparative term’s focus on production and manufacture. The comparison is, in my opinion, to be one capable of practical judgment.
The power to issue notices is conditioned on the Minister’s satisfaction as to a number of matters. The proposition that the use of this language requires the repository’s satisfaction to be formed according to law is well established: R v Connell; Ex parte Hetton Bellbird Collieries Ltd (No 2) (1944) 69 CLR 407 at 430 per Latham CJ; Avon Downs v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360 per Dixon J; Buck v Bavone (1976) 135 CLR 110 at 118-119 per Gibbs J; Foley v Padley (1984) 154 CLR 349 at 353 per Gibbs CJ, at 370 per Brennan J.
The formation of such a state of satisfaction by the repository of the power has been characterised as itself a jurisdictional fact: see Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21 at [130]-[137] per Gummow J; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54 at [183] per Gummow and Hayne JJ. Some commentators have questioned this approach: see Aronson M and Groves M, Judicial Review of Administrative Action (5th ed, Lawbook, 2013) at [4.490]. The debate need not be addressed in these reasons: whether or not the formation by the Minister of a state of satisfaction is characterised as a jurisdictional fact, the key question is whether it was lawfully formed, in accordance with the authorities at [25] to which I have referred. On grounds 1 and 2, the applicant raises the “narrow” kind of jurisdictional fact argument to which Aronson and Groves refer in the paragraph cited above.
Section 269TG relevantly provides (omitting the provisions concerning undertakings in place of duty notices which are of no relevance to the issues in this proceeding):
(1) Subject to section 269TN, where the Minister is satisfied, as to any goods that have been exported to Australia, that:
(a) the amount of the export price of the goods is less than the amount of the normal value of those goods; and
(b) because of that:(i) material injury to an Australian industry producing like goods has been or is being caused or is threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered; or
(ii) in a case where security has been taken under section 42 in respect of any interim duty that may become payable on the goods under section 8 of the Dumping Duty Act—material injury to an Australian industry producing like goods would or might have been caused if the security had not been taken;
the Minister may, by public notice, declare that section 8 of that Act applies:(c) to the goods in respect of which the Minister is so satisfied; and
(d) to like goods that were exported to Australia after the CEO made a preliminary affirmative determination under section 269TD in respect of the goods referred to in paragraph (c) but before the publication of that notice.(2) Where the Minister is satisfied, as to goods of any kind, that:
(a) the amount of the export price of like goods that have already been exported to Australia is less than the amount of the normal value of those goods, and the amount of the export price of like goods that may be exported to Australia in the future may be less than the normal value of the goods; and
(b) because of that, material injury to an Australian industry producing like goods has been or is being caused or is threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered;the Minister may, by public notice (whether or not he or she has made, or proposes to make, a declaration under subsection (1) in respect of like goods that have been exported to Australia), declare that section 8 of the Dumping Duty Act applies to like goods that are exported to Australia after the date of publication of the notice or such later date as is specified in the notice.
(3) Where:
(a) a notice under subsection (1) declares particular goods to be goods to which section 8 of the Dumping Duty Act applies; or
(b) a notice under subsection (2) declares like goods in relation to goods of a particular kind to be goods to which that section applies;
the notice must, subject to subsection (3A), include a statement of the respective amounts that the Minister ascertained, at the time of publication of the notice:
(c) was or would be the normal value of the goods to which the declaration relates; and
(d) was or would be the export price of those goods; and
(e) was or would be the non‑injurious price of those goods.(3A) If any person who has provided information to assist the Minister to ascertain the normal value, export price or non‑injurious price of goods to which a declaration under subsection (1) or (2) relates claims, in writing, that the information is confidential or that the inclusion in a notice under that subsection of that value or price would adversely affect the person’s business or commercial interests:
(a) in accordance with subsection 269ZI(9) the Minister is not required to include in the notice a statement of that value or price; but
(b) upon request the CEO may notify that value or price to persons who, in the CEO’s opinion, would be affected parties in any review of the rate of interim duty imposed on like goods to the goods to which the declaration relates.(3B) In ascertaining a normal value and export price for goods of the residual exporter, the Minister must ensure that:
(a) the normal value does not exceed the weighted average of normal values for like goods of selected exporters from the same country of export; and
(b) the export price is not less than the weighted average of export prices for like goods of selected exporters from the same country of export.(3C) For the purposes of subsection (3B), the weighted average of normal values and the weighted average of export prices of the selected exporters must not include any normal value or export price if:
(a) in a comparison under section 269TACB involving that normal value or export price, the Minister has determined:
(i) that there is no dumping; or
(ii) that the dumping margin, when expressed as a percentage of the export price or weighted average of export prices used to establish that dumping margin, is less than 2%; or
(b) that normal value was determined under subsection 269TAC(6) or that export price was determined under subsection 269TAB(3).
…
(5) In giving a notice, and in considering the terms of any proposed undertaking, the Minister must have regard to the desirability that any price increase to which the undertaking relates is limited to an amount such that the total price of the goods is not more than the non‑injurious price of the goods.
In terms, s 269TG does not specify that the Minister must rely on the report prepared by the CEO under s 269TEA in the formation of her or his satisfaction, but that is the inference which should be drawn from the structure of the scheme set out Part XVB. Although the Minister may initiate an investigation without an application (see s 269TAG), the Customs Act nevertheless contemplates there will be an investigation even on an exercise of this “own motion” power and, therefore, a CEO report. That report should be seen as a mandatory consideration for the Minister. Whether the Minister can go outside the CEO report and, if so, what procedural fairness constraints may attach need not be considered in determining the arguments in this proceeding.
The statutory task under s 269TG informed the submissions of both parties in this proceeding. Aspects of the task may be identified as follows:
·Operating under either or both of the two different scenarios in ss 269TG(1) and 269TG(2), there are three central factual issues about which the Minister must be satisfied before notices can issue: whether the “export price” of the goods is less than the “normal value” of those goods, whether there is material injury to an Australian industry and, thirdly, whether that material injury was caused by the margin between the export price and the normal value of the goods.
·Section 269TG(1) is concerned with any specific consignments of goods to which the application in s 269TB relates, and any “like goods” exported to Australia after a preliminary determination by the CEO under s 269TD but before the publication of a duty notice about the consignment goods. That is, it operates on goods already exported to Australia before the date of issue of any duty notices.
·Section 269TG(2) operates prospectively. For it to operate consistently with s 269TG(1) and to provide coverage for dumping measures that are connected to an investigation, the phrase “goods of any kind” must be construed by reference to the description of goods given in the s 269TB application. The respondents submitted as much and I accept that submission. That is because otherwise there would be no reference point for the comparison with export price and normal value of “like goods” also required by subs (2). It is also because the application frames the investigation by the CEO on which the Minister’s satisfaction must be based. However, the existence of the Minister’s own motion power in s 269TAG may explain why s 269TG(2) needs to turn on the more broadly expressed subject matter of “goods of any kind”. Any duty payable under ss 8 and 10 of the Duty Act operates on “like goods” exported to Australia after the date of publication of the notice.
·Section 269TG(2) thus involves a more speculative exercise than s 269TG(1) because it operates on “like goods” which may be exported to Australia in the future. Thus, it involves the Minister being satisfied that the export price of those like goods “may” be less than their normal value.
·In the case of a notice issued pursuant to either ss 269TG(1) and (2), there is a requirement for the notice to specify the normal value, the export price and the non-injurious price for the goods.
·Section 269TG(3B) operates as a control on the task in s 269TG(3). For reasons I will outline in more detail below, I reject the respondents’ submission that ss 269TG(3B) and (3C) only operate where there has been a sampling exercise under s 269TACB(8). In my opinion, subs (3B) (and, therefore, subs (3C)) operates as a general control on the determination required to be made by the Minister pursuant to s 269TG(3). Its purpose is to control the levels of duty which can be set for exporters who have not been investigated and, accordingly, about whose exports nothing reliable is known: that is, “residual exporters” within the meaning of that phrase in s 269T.
Section 269TJ makes similar provision in relation to countervailing duties. I reproduce it because notices also were issued under this section by the Minister:
(1) Subject to section 269TN, where the Minister is satisfied, as to any goods that have been exported to Australia, that:
(a) a countervailable subsidy has been received in respect of the goods; and
(b) because of that:(i) material injury to an Australian industry producing like goods has been or is being caused or is threatened or the establishment of an Australian industry producing like goods has been or may be materially hindered; or
(ii) in a case where security has been taken under section 42 in respect of any interim duty that may become payable on the goods under section 10 of the Dumping Duty Act—material injury to an Australian industry producing like goods would or might have been caused if the security had not been taken;
the Minister may, by public notice, declare that section 10 of that Act applies:
(c) to the goods in respect of which the Minister is so satisfied; and
(d) to like goods that were exported to Australia after the CEO made a preliminary affirmative determination under section 269TD in respect of the goods referred to in paragraph (c) but before the publication of that notice.(2) Where the Minister is satisfied, as to goods of any kind that:
(a) a countervailable subsidy:
(i) has been received in respect of goods the subject of the application that have already been exported to Australia; and
(ii) may be received in respect of like goods that may be exported to Australia in the future; and
(b) because of that, material injury to an Australian industry producing like goods has been or is being caused or is being threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered;
the Minister may, by public notice (whether or not he or she has made, or proposes to make, a declaration under subsection (1) in respect of like goods that have been exported to Australia), declare that section 10 of the Dumping Duty Act applies to like goods that are exported to Australia after the date of publication of the notice or such later date as is specified in the notice.
(3B) In giving a notice, and in considering the terms of any proposed undertaking, the Minister must have regard to the desirability that any price increase arising from the undertaking is limited to an amount such that the total price of the goods is not more than the non‑injurious price of the goods.
(3C) The Minister:
(a) may give a notice under subsection (2A) whether or not the giving of such a notice has been recommended by the CEO in a recommendation under section 269TEA; and
(b) may accept an undertaking whether or not the acceptance of such an undertaking has been recommended by the CEO in a recommendation under section 269TEB; and
(c) must not:(i) give a notice to a government or exporter under subsection (2A); or
(ii) accept an undertaking from a government or an exporter;
in respect of particular goods or like goods unless a preliminary affirmative determination, or an equivalent determination in an investigation conducted under section 269TAG, has been made to the effect that there are grounds for publication of a countervailing duty notice in respect of those like goods; and(d) must not accept an undertaking from an exporter unless the government of the country of export consents to the giving of the undertaking; and
(e) must give public notice of any undertaking so accepted.…
(11) If a notice under subsection (1) or (2) declares particular goods to be goods to which section 10 of the Dumping Duty Act applies, the notice must, subject to subsection (12), include a statement setting out:
(a) the amount of countervailable subsidy that the Minister ascertained, at the time of publication of the notice, had been or would be received in respect of the goods to which the notice relates; and
(b) the amount that the Minister has ascertained, at that time, was or would be the non‑injurious price of the goods.
The three concepts which inform the determination of the Minister under ss 269TG and 269TJ, and to which reference has already been made, should be noted.
Section 269TAB establishes how the “export price” for goods is to be ascertained:
(1) For the purposes of this Part, the export price of any goods exported to Australia is:
(a) where:
(i) the goods have been exported to Australia otherwise than by the importer and have been purchased by the importer from the exporter (whether before or after exportation); and
(ii) the purchase of the goods by the importer was an arms length transaction;
the price paid or payable for the goods by the importer, other than any part of that price that represents a charge in respect of the transport of the goods after exportation or in respect of any other matter arising after exportation; or
(b) where:(i) the goods have been exported to Australia otherwise than by the importer and have been purchased by the importer from the exporter (whether before or after exportation); and
(ii) the purchase of the goods by the importer was not an arms length transaction; and
(iii) the goods are subsequently sold by the importer, in the condition in which they were imported, to a person who is not an associate of the importer;
the price at which the goods were so sold by the importer to that person less the prescribed deductions; or
(c) in any other case—the price that the Minister determines having regard to all the circumstances of the exportation.(1A) For the purposes of paragraph (1)(a), the reference in that paragraph to the price paid or payable for goods is a reference to that price after deducting any amount that is determined by the Minister to be a reimbursement of the kind referred to in subsection 269TAA(1A) in respect of that transaction.
(2) A reference in paragraph (1)(b) to prescribed deductions in relation to a sale of goods that have been exported to Australia shall be read as a reference to:
(a) any duties of Customs or sales tax paid or payable on the goods; and
(b) any costs, charges or expenses arising in relation to the goods after exportation; and
(c) the profit, if any, on the sale by the importer or, where the Minister so directs, an amount calculated in accordance with such rate as the Minister specifies in the direction as the rate that, for the purposes of paragraph (1)(b), is to be regarded as the rate of profit on the sale by the importer.(3) Where the Minister is satisfied that sufficient information has not been furnished, or is not available, to enable the export price of goods to be ascertained under the preceding subsections, the export price of those goods shall be such amount as is determined by the Minister having regard to all relevant information.
(4) For the purposes of this section, the Minister may disregard any information that he or she considers to be unreliable.
(5) Paragraphs (1)(a) and (b) apply in relation to a purchase of goods by an importer from an exporter whether or not the importer and exporter are associates of each other.
Section 269TAC establishes how the “normal value” for goods is to be ascertained. The relevant provisions are as follows:
(1) Subject to this section, for the purposes of this Part, the normal value of any goods exported to Australia is the price paid or payable for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods.
(1A) For the purposes of subsection (1), the reference in that subsection to the price paid or payable for like goods is a reference to that price after deducting any amount that is determined by the Minister to be a reimbursement of the kind referred to in subsection 269TAA(1A) in respect of the sales.
(2) Subject to this section, where the Minister:
(a) is satisfied that:
(i) because of the absence, or low volume, of sales of like goods in the market of the country of export that would be relevant for the purpose of determining a price under subsection (1); or
(ii) because the situation in the market of the country of export is such that sales in that market are not suitable for use in determining a price under subsection (1);
the normal value of goods exported to Australia cannot be ascertained under subsection (1); or
(b) is satisfied, in a case where like goods are not sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter, that it is not practicable to obtain, within a reasonable time, information in relation to sales by other sellers of like goods that would be relevant for the purpose of determining a price under subsection (1);the normal value of the goods for the purposes of this Part is:
(c) except where paragraph (d) applies, the sum of:
(i) such amount as the Minister determines to be the cost of production or manufacture of the goods in the country of export; and
(ii) on the assumption that the goods, instead of being exported, had been sold for home consumption in the ordinary course of trade in the country of export—such amounts as the Minister determines would be the administrative, selling and general costs associated with the sale and, subject to subsection (13), the profit on that sale; or
(d) if the Minister directs that this paragraph applies—the price determined by the Minister to be the price paid or payable for like goods sold in the ordinary course of trade in arms length transactions for exportation from the country of export to a third country determined by the Minister to be an appropriate third country, other than any amount determined by the Minister to be a reimbursement of the kind referred to in subsection 269TAA(1A) in respect of any such transactions.
(3) The price determined under paragraph (2)(d) is a price that the Minister determines, having regard to the quantity of like goods sold as described in paragraph (2)(d) at that price, is representative of the price paid in such sales.
…
(6) Where the Minister is satisfied that sufficient information has not been furnished or is not available to enable the normal value of goods to be ascertained under the preceding subsections (other than subsection (5D)), the normal value of those goods is such amount as is determined by the Minister having regard to all relevant information.
(7) For the purposes of this section, the Minister may disregard any information that he or she considers to be unreliable.
Section 269TACB then provides for how the Minister is to determine whether dumping has occurred, using those concepts:
(1) If:
(a) application is made for a dumping duty notice; and
(b) export prices in respect of goods the subject of the application exported to Australia during the investigation period have been established in accordance with section 269TAB; and
(c) corresponding normal values in respect of like goods during that period have been established in accordance with section 269TAC;the Minister must determine, by comparison of those export prices with those normal values, whether dumping has occurred.
(2) In order to compare those export prices with those normal values, the Minister may, subject to subsection (3):
(a) compare the weighted average of export prices over the whole of the investigation period with the weighted average of corresponding normal values over the whole of that period; or
(aa) use the method of comparison referred to in paragraph (a) in respect of parts of the investigation period as if each of these parts were the whole of the investigation period; or
(b) compare the export prices determined in respect of individual transactions over the whole of the investigation period with the corresponding normal values determined over the whole of that period; or
(c) use:(i) the method of comparison referred to in paragraph (a) in respect of a part or parts of the investigation period as if the part or each of these parts were the whole of the investigation period; and
(ii) the method of comparison referred to in paragraph (b) in respect of another part or other parts of the investigation period as if that other part or each of these other parts were the whole of the investigation period.
(2A) If paragraph (2)(aa) or (c) applies:
(a) each part of the investigation period referred to in the paragraph must not be less than 2 months; and
(b) the parts of the investigation period as referred to in paragraph (2)(aa), or as referred to in subparagraphs (2)(c)(i) and (ii), must together comprise the whole of the investigation period.(3) If the Minister is satisfied:
(a) that the export prices differ significantly among different purchasers, regions or periods; and
(b) that those differences make the methods referred to in subsection (2) inappropriate for use in respect of a period constituting the whole or a part of the investigation period;the Minister may, for that period, compare the respective export prices determined in relation to individual transactions during that period with the weighted average of corresponding normal values over that period.
(4) If, in a comparison under subsection (2), the Minister is satisfied that the weighted average of export prices over a period is less than the weighted average of corresponding normal values over that period:
(a) the goods exported to Australia during that period are taken to have been dumped; and
(b) the dumping margin for the exporter concerned in respect of those goods and that period is the difference between those weighted averages.(4A) To avoid doubt, a reference to a period in subsection (4) includes a reference to a part of the investigation period.
(5) If, in a comparison under subsection (2), the Minister is satisfied that an export price in respect of an individual transaction during the investigation period is less than the corresponding normal value:
(a) the goods exported to Australia in that transaction are taken to have been dumped; and
(b) the dumping margin for the exporter concerned in respect of those goods and that transaction is the difference between that export price and that normal value.(6) If, in a comparison under subsection (3), the Minister is satisfied that the export prices in respect of particular transactions during the investigation period are less than the weighted average of corresponding normal values during that period:
(a) the goods exported to Australia in each such transaction are taken to have been dumped; and
(b) the dumping margin for the exporter concerned in respect of those goods is the difference between each relevant export price and the weighted average of corresponding normal values.(7) Subject to subsection (8), the existence of dumping and the size of a dumping margin will normally be worked out for individual exporters of goods to Australia.
(8) If the number of exporters from a particular country of export who provide information in relation to an application for a dumping duty notice is so large that it is not practicable to determine the existence of dumping and to work out individual dumping margins for each of them, the Minister may, on the basis of information obtained from an investigation of a selected number of those exporters:
(a) who constitute a statistically valid sample of those exporters; or
(b) who are responsible for the largest volume of exportations to Australia that can reasonably be investigated;decide whether dumping exists, and, if it does, fix dumping margins for such selected exporters and for exporters who are not so selected.
(9) If information is submitted by an exporter not initially selected under subsection (8) for the purposes of an investigation, the investigation must extend to that exporter unless to so extend it would prevent the investigation’s timely completion.
(10) Any comparison of export prices, or weighted average of export prices, with any corresponding normal values, or weighted average of corresponding normal values, must be worked out in respect of similar units of goods, whether determined by weight, volume or otherwise.
A different method is used for determining if it is necessary to impose countervailing duties. One of the applicant’s grounds relates specifically to the functions performed under s 269TACC. Section 269TACC provides:
(1) If:
(a) a financial contribution referred to in paragraph (a) of the definition of subsidy in subsection 269T(1); or
(b) income or price support referred to in paragraph (b) of that definition;is received in respect of goods, the question whether that financial contribution or income or price support confers a benefit, and, if so, the amount of subsidy attributable to that benefit, are to be worked out according to this section.
(2) If a financial contribution in respect of goods is a direct financial payment received from a government of a country, a public body of that government or of which that government is a member, or a private body entrusted or directed by that government or public body to carry out a governmental function, a benefit is taken to be conferred because of that payment.
(3) If:
(a) there is no financial contribution of the kind referred to in subsection (2) received in respect of goods; but
(b) a financial contribution of another kind, or income or price support, is received in respect of those goods from a government of a country, a public body of that government or of which that government is a member, or a private body entrusted or directed by that government or public body to carry out a governmental function;the question whether that financial contribution or income or price support confers a benefit is to be determined by the Minister.
(4) In determining whether a financial contribution confers a benefit, the Minister must have regard to the following guidelines:
(a) the provision of equity capital from the government or body referred to in subsection (3) does not confer a benefit unless the decision to provide the capital is inconsistent with normal investment practice of private investors in the country concerned;
(b) the making of a loan by the government or a body referred to in subsection (3) does not confer a benefit unless the loan requires repayment of a lesser amount than would be required for a comparable commercial loan;
(c) the guarantee of a loan by the government or a body referred to in subsection (3) does not confer a benefit unless, without the guarantee, the enterprise receiving the loan would have to repay a greater amount;
(d) the provision of goods or services by the government or body referred to in subsection (3) does not confer a benefit unless the goods or services are provided for less than adequate remuneration;
(e) the purchase of goods by the government or body referred to in subsection (3) does not confer a benefit if the purchase is made for more than adequate remuneration.(5) For the purposes of paragraphs (4)(d) and (e), the adequacy of remuneration in relation to goods or services is to be determined having regard to prevailing market conditions for like goods or services in the country where those goods or services are provided or purchased.
The meaning of “public body” in s 269TACC(2) and the meaning of “less than adequate remuneration” in s 269TACC(4)(d) are raised by the applicant’s grounds of review in this proceeding.
Review
If the Minister determines under ss 269TG or 269TJ to publish notices concerning dumping duties or countervailing duties, a review process exists under Div 9 of Part XVB for an “interested party”. That term is defined in s 269ZX. It is common ground Holden was within the definition.
The TMRO is a suitably qualified or experienced independent statutory officer, with the same protection and immunity as a Justice of the High Court (see s 269ZN). She or he is appointed for a term not exceeding three years. An officer of the Australian Customs and Border Protection Service (Customs) cannot be appointed to the office, which sits outside the Department: see ss 269ZL(1), (3). In substance, the TMRO provides a form of merits review, with two notable constraints. First, the TMRO is restricted to the material which was before the CEO when the CEO made her or his recommendations to the Minister: ss 269ZZK(4), (6). Second, the TMRO is not empowered to overturn or change the Minister’s decisions, but is restricted to making recommendations (s 269ZZK(1)), which the Minister is free to accept or reject (s 269ZZL(1)(b)).
A review is initiated by an application in accordance with the requirements in s 269ZZE, within 30 days after the publication of the notices: s 269ZZD. Section 269ZZE(2) sets out express requirements for the application:
(2) Without limiting paragraph (1)(c), an application must:
(a) contain a full description of the goods to which the application relates; and
(b) particularise the ground or grounds that, in the applicant’s view, would warrant the reinvestigation of a finding or findings that formed the basis of the reviewable decision; and
(c) specify the finding or findings.Although the “reviewable decision” as defined in s 269ZZA is the decision of the Minister to publish a dumping notice or a countervailing duties notice (a decision not to do so is also reviewable — see s 269ZZA(1)(b)), the review is not to be conducted in order necessarily to alter the Minister’s decision. The function is more limited than that. As is apparent from the terms of s 269ZZE(2), the focus in the review is on the reasons why particular findings should be reinvestigated by the CEO. The findings which can be reinvestigated are ones which “formed the basis” of the reviewable decision: that is, the scheme requires the findings to have some material connection to the conclusion reached by the Minister. That reinvestigation, as the subsequent aspects of the review scheme demonstrate, may or may not produce different findings and may or may not result in a change to the Minister’s decision.
It is important to note the definition of “finding” in s 269ZX:
finding, in relation to a reviewable decision under Subdivision B, means a finding on a material question of fact or on a conclusion based on that fact.
Thus, the Minister’s reasoning processes by which she or he arrived at the determination to publish dumping or countervailing duty notices can be challenged on this review.
Putting to one side the provisions dealing with, essentially, summary rejection of an application for review, s 269ZZK sets out how the review is to be conducted:
(1) If an application is not rejected under section 269ZZG or 269ZZH, the Review Officer must make a report to the Minister on the application by:
(a) recommending that the Minister affirm the reviewable decision; or
(b) recommending that the Minister direct the CEO to reinvestigate a finding or findings that formed the basis of the reviewable decision, being the finding or any of the findings specified in the application.(2) In a report under subsection (1), the Review Officer must:
(a) if the Review Officer is of the view that the finding or findings specified in the application should be affirmed—recommend that the Minister affirm the reviewable decision; and
(b) if the Review Officer recommends that a finding or findings be reinvestigated—set out the finding or findings; and
(c) set out the reasons for the Review Officer’s recommendations.(3) The report must be made:
(a) at least 30 days after the public notification of the review under section 269ZZI; but
(b) not more than 60 days after that notification, or such longer period allowed by the Minister in writing because of special circumstances.(4) In making the recommendation, the Review Officer:
(a) must not have regard to any information other than the relevant information; and
(b) subject to subsection (5), must only have regard to the relevant information and any conclusions based on the relevant information that are contained in the application for the review or in any submissions received from interested parties within 30 days as mentioned in section 269ZZJ.(5) The Review Officer must not have regard to a submission under subsection (4) if:
(a) the person giving the submission claims that information included in it is confidential or is information whose publication would adversely affect a person’s business or commercial interest; and
(b) the person fails to give a summary of that information to the Review Officer in accordance with section 269ZZY.(6) In this section:
relevant information means:
(a) if the reviewable decision was made pursuant to an application under section 269TB—the information to which the CEO had had regard or was, under paragraph 269TEA(3)(a), required to have regard, when making the findings set out in the report under section 269TEA to the Minister in relation to the making of the reviewable decision; and
(b) if the reviewable decision was made pursuant to an investigation initiated by the Minister as mentioned in section 269TAG—the information:(i) that was collected for the purposes of that investigation in accordance with the Minister’s requirements; and
(ii) that was before the Minister when the Minister made the reviewable decision.
It will be seen that, like the CEO function, the review function is recommendatory. The TMRO has available two options under s 269ZZK(1) — either a recommendation that the Minister affirm the reviewable decision, or a recommendation that one or more findings which are the subject of the application for review should be reinvestigated. The TMRO is, through the definition of “relevant information”, restricted to a consideration of the material which was before the CEO and in the CEO’s report to the Minister under s 269TEA.
Section 269ZZL(3) is the only provision in Part XVB which deals expressly with the conduct of the further investigation by the CEO. In marked contrast to the very detailed scheme established for the principal investigation, the scheme is relatively silent about the manner in which any further investigation is to be conducted.
Minister’s function after review
Upon receipt of the TMRO’s report, the Minister must affirm the reviewable decision if either that is what the TMRO recommends, or the Minister decides to reject the TMRO’s recommendations for further investigation.
If, however, the TMRO recommends further investigation of a finding or findings, ss 269ZZL(2), (3) and (4) relevantly provide:
(2) If the Minister accepts a recommendation by the Review Officer to require the CEO to reinvestigate a finding or findings, the Minister must:
(a) in writing, require the CEO to:
(i) make further investigation of the finding or findings, having regard only to the information and conclusions to which the Review Officer was permitted to have regard; and
(ii) report the result of the further investigation to the Minister within a specified period; and
(b) by public notice indicate the acceptance of that recommendation (including particulars of the requirements made of the CEO).
…
(3) The CEO must conduct an investigation in accordance with the Minister’s requirements under subsection (2) and give the Minister a report of the investigation concerning the finding or findings within the specified period.
(4) In a report under subsection (3), the CEO must:
(a) if the CEO is of the view that the finding or any of the findings the subject of reinvestigation should be affirmed—affirm the finding or findings; and
(b) set out any new finding or findings that the CEO made as a result of the reinvestigation; and
(c) set out the evidence or other material on which the new finding or findings are based; and
(d) set out the reasons for the CEO’s decision.Any further notices by the Minister
By s 269ZZM(1), on receipt of a report from the CEO after the reinvestigation, the Minister is empowered either to affirm the reviewable decision or revoke it and substitute a new decision. In turn, by s 269ZZM(3) the Minister may publish, vary or revoke dumping and countervailing duty notices in accordance with the decision made under subs (1).
The scheme contemplates that, even if the CEO has changed her or his findings and conclusions on the matters which were further investigated, the Minister is not obliged to accept any new or different recommendations. Subject of course to matters such as the legal requirements of rationality and reasonableness, she or he is able to maintain the dumping or countervailing duty notices in the form they were made.
FACTUAL FINDINGS
The parties agreed facts pursuant to s 191 of the Evidence Act 1995 (Cth), and annexed to the statement of agreed facts were a number of documents relevant to the resolution of the issues in the proceeding, including those recording the six decisions under challenge. The parties also read affidavits which sought to prove facts not the subject of the statement, and which formed the evidentiary basis for the subsequent agreed facts.
While resolution of the applicant’s grounds of review may involve the proper characterisation of the facts revealed by the evidence, there was no cross-examination, and no party identified any contentious matters of fact. The following facts are established by the evidence, including the agreed facts.
Holden is a wholly-owned subsidiary of General Motors Company, which is listed on the New York Stock Exchange and has its headquarters in Detroit, Michigan in the United States of America. Holden is a major Australian motor vehicle manufacturer which designs, builds and sells vehicles throughout Australia and overseas. Its headquarters are in Port Melbourne, Victoria. It has an engine manufacturing plant in Port Melbourne and vehicle manufacturing operations in Adelaide, South Australia. Holden is represented by approximately 235 dealerships nationwide.
Holden is responsible for design, vehicle and powertrain engineering for its locally made vehicles and also performs work for global General Motors programs.
As I describe in more detail below, Part XVB of the Customs Act has been subject to a number of significant amendments since the time at which the decisions in this proceeding were made. The first respondent is now, by reason of the Customs Amendment (Anti-Dumping Commission) Act 2013 (Cth), the Commissioner of the Anti-Dumping Commission. During the period of decision-making with which this proceeding is concerned, the CEO held the position the Commissioner now holds. The third respondent, the TMRO, is also an office which no longer exists. On 10 June 2013, it was replaced by the Anti-Dumping Review Panel: see Customs Amendment (Anti-Dumping Improvements) Act (No 1) 2012 (Cth).
The responsibilities of the second respondent, the Minister for Immigration and Border Protection, were at all relevant times performed by the Minister for Home Affairs, pursuant to administrative arrangements.
Arrowcrest is a manufacturer of ARWs in Australia. Relevantly, it trades as ROH Automotive and ROH Wheels Australia. During the course of its investigation, the CEO estimated that Arrowcrest accounted for more than 95% of the Australian production of ARWs during the investigation period. The Australian market for ARWs was approximately 2 million pieces during the investigation period.
Holden purchases ARWs from a number of sources, including exporters from the PRC. They are incorporated into the manufacture of new vehicles in Australia, whether for an entirely new vehicle program or for a new model in an existing vehicle program. Holden’s decisions on the sourcing and purchase of ARWs are based on a number of factors, including the ability of a seller to meet demand, the specifications, quality of the product and price.
Sales of ARWs in Australia occur through the “Original Equipment Manufacture” (OEM) sector and the “Aftermarket” (AM) sector. The existence of these sectors is important to several of Holden’s grounds of review in this proceeding.
Aside from Holden and an independent and separate entity known as Holden Special Vehicles, the other Australian passenger motor vehicle manufacturers which purchase ARWs as original equipment for use in the manufacture of their vehicles are the Toyota Motor Corporation Australia, the Ford Motor Company, and Ford Performance Vehicles. There is collaboration between these motor vehicle manufacturers and the ARW manufacturers in relation to new designs. Production contracts can be awarded up to two years prior to the production phase of a new vehicle or new model of an existing vehicle. The typical life-cycle for the development, production and sale of a new vehicle or a new model of an existing vehicle is between two and five years.
In contrast, in the AM sector, ARWs are designed by ARW manufacturers. The purchasers in Australia in this sector are primarily wheel importers, tyre wholesalers, tyre retailers, performance motor vehicle aftermarket customer service divisions, passenger motor vehicle retailers and manufacturers of trailer vehicles.
During the investigation period, this sector represented over 70% of the Australian combined ARW market.
In late September 2011, Arrowcrest lodged with Customs an application pursuant to s 269TB of the Customs Act requesting the Minister to publish a dumping duty notice and a countervailing duty notice in respect of certain ARWs exported to Australia from the PRC.
The goods the subject of the application were described as ARWs for passenger motor vehicles, including wheels used for caravans and trailers, in diameters ranging from 13 inches to 22 inches, whether finished or semi-finished, unpainted, painted, chrome plated, forged or with tyres. There were some exclusions which are not material to the issues on judicial review.
On 7 November 2011, Customs published Australian Customs Dumping Notice No 2011/54 pursuant to s 269TC of the Customs Act. The notice invited interested parties to lodge submissions concerning the publication of the dumping and countervailing duty notices no later than close of business on 19 December 2011.
In early November 2011, Customs wrote to Holden and told it about the ARW investigation. It asked Holden to complete an importer questionnaire for the purposes of the investigation and to facilitate a visit to Holden’s premises to discuss the investigation and verify information provided in its response to the importer questionnaire. Holden responded to Customs’ questionnnaire and a visit to Holden’s premises by Customs occurred in late January 2012.
Prior to this visit, Customs had conducted a visit to Arrowcrest’s premises, in early November 2011. Customs published a report about that visit in late December 2011. This report was published by Customs on what is known as the “public file” or “electronic public record”. The CEO is required by s 269ZJ of the Customs Act to maintain a public record for purposes relating to applications under s 269TB. It will be recalled that the public and transparent conduct of the investigation and wide participation in the decision-making process are key aspects of the Anti-Dumping Agreement.
Customs’ visit report set out the application by Arrowcrest, the investigation process and timeline, a detailed description of the goods and the Australian industry and market. It then examined in detail sales, costs to make and sell ARWs, the economic condition of the ARW industry and what could be said to be the causal relationship between the goods Arrowcrest alleged were being dumped and the injury Arrowcrest claimed to be suffering. All these matters, as recorded in the visit report, were of course from the perspective of, and reliant on information from, Arrowcrest.
In this investigation report, amongst other matters, there was a section dealing with Arrowcrest’s position in the OEM market. This section dealt with Arrowcrest’s supply relationship with various motor vehicle manufacturers in Australia. In relation to Holden, the report made the following statement:
Arrowcrest advised it had supplied Holden with ARWs and steel wheels for many years. Arrowcrest provided Holden with a quote for steel wheels in 2001 but as directed by GM Global Purchasing in Detroit, Holden awarded the business to Korea. Shortly thereafter Holden’s ARW business was awarded to a Chinese supplier. Arrowcrest attempted to regain some business recently with a quote for the Holden Cruze wheels but was unsuccessful.
In mid-December 2011, Holden made a submission to the CEO in respect of his investigation. It appears the submissions may have been in response to the Arrowcrest visit report which was placed on the public record in November 2011. The submission was 14 pages in length, and was prepared and submitted by Holden’s legal representatives. Two versions were produced — confidential and non-confidential. The non-confidential version was in evidence before the Court and said by both parties to be sufficient for the purposes of this proceeding.
Holden’s submission emphasised to the CEO the particular disadvantage Holden was likely to suffer (as opposed to some of their competitors, such as Ford Australia and Mitsubishi Australia) from the imposition of dumping duties, including any interim measures. The submissions said Holden “generally rejects” Arrowcrest’s contention that the Australian industry (including Arrowcrest) has suffered material injury from Chinese exports. The submission put a contention that ARWs produced for the OEM and AM sectors were not “like goods” for the purposes of Part XVB of the Customs Act, made submissions about how the normal value and export price should be calculated in applying the provisions of the Customs Act, made express submissions about whether there was “material injury” for the purposes of the Customs Act and sought the opportunity to provide further information and make further submissions.
Customs’ visit to Holden’s premises in Port Melbourne in late January 2012 also resulted in the production of a report by Customs, entitled an “Importer Visit Report”. This was also published on the public record. The report identified the purpose of Customs’ visit to Holden in the following terms:
The purpose of this visit was to:
•confirm that GMH is the importer of ARWs as identified within the import database and obtain information to assist in establishing the identity of the suppliers/exporters of the ARWs GMH imports;
•verify information on GMH’s imports of ARWs to assist in the determination of export price;
•establish whether the purchases of ARWs by GMH was in arms length transactions;
•recommend how export price for exporters or ARWs that supply GMH may be determined; and
•provide the company with an opportunity to discuss any issues it believed relevant to the investigation.
The report records Holden’s position on whether the OEM and AM ARWs are “like goods”, how the Australian market should be defined, and how Holden went about choosing a supplier for ARWs. The report also used information provided by Holden to calculate export prices for selected shipments, and to identify exporters in the PRC.
Following on from Customs’ site visit, on 20 February 2012 Holden made a second submission to the CEO, stating it should be read with its first submission. This submission was again made by its legal representatives. The second submission dealt again with Holden’s arguments on “like goods”, developing those by reference to more detailed submissions on the characteristics of OEM and AM ARWs. It also dealt with matters such as the calculation of “normal value” and subsidy for the purposes of the Customs Act, and the approach which should be taken to the question of whether there has been material injury to the Australian industry, picking up and supporting submissions made by other Australian motor vehicle manufacturers.
International Trade Remedies Issues Paper 2012/181
In March 2012, Customs published International Trade Remedies Issues Paper 2012/181 which outlined its preliminary views on three issues relevant to its investigation into ARWs exported from the PRC. Relevantly for the issues in this proceeding, Customs outlined its preliminary views on which goods should be considered “like goods” for the purposes of Arrowcrest’s application. Customs set out its approach to the question of what goods were “like goods” in the following terms:
Like goods to the goods the subject of the application are ARWs produced by the Australian industry and sold into the Australian market and ARWs produced by Chinese manufacturers and sold into the Chinese domestic market.
Customs and Border Protection regards like goods as identical goods (goods that are identical in physical characteristics) and in the absence of identical goods, goods closely resemble the goods. Customs and Border Protection assesses whether goods closely resemble the goods against the following criteria:
(1) Physical likeness;
(2) Commercial likeness;
(3) Functional likeness;
(4) Production likeness; and
(5) Other considerations e.g. marketing.
(Emphasis in original.)
The issues paper then rehearsed the competing contentions about the identification of “like goods” and stated Customs’ preliminary view in the following terms:
It is Customs and Border Protection’s preliminary view that the difference between OEM and AM ARWs relates to the different channels of distribution. The manufacture and sale of OEM wheels involves the car industry in the process of developing and designing the wheel whereas the development and design of AM wheels is principally controlled by the wheel manufacturer. OEM and AM wheels share similar physical and technical characteristics and are interchangeable. There is also evidence that AM ARWs are being placed on new passenger motor vehicles by motor vehicle dealers before customers take delivery without affecting the new car warranty.
It is Customs and Border Protection’s preliminary view that the Australian ARW market will be treated as a single market ie OEM and AM wheels will not be treated as two separate goods.
It is also Customs and Border Protection’s preliminary view that OEM and AM are separate segments of the Australian ARW market which will be analysed separately in injury/causation analysis.
The conclusion in the last sentence concerning injury and causation is of particular relevance to Holden’s grounds of review in this proceeding.
On 10 April 2012, Holden, through its legal representatives, made a further submission to Customs, commenting on this issues paper. The focus of this submission was again on the characterisation of “like goods” for the purposes of the investigation.
Following the statutory process, pursuant to s 269TDAA Customs published a Statement of Essential Facts at the end of April 2012, and placed this document on the electronic public record. As the document stated and the Customs Act contemplates, the statement of essential facts gives notice to all interested parties of the facts on which the CEO (or, in this case, a delegate of the CEO) charged with making recommendations to the Minister will base her or his recommendations, and notice of the recommendations which are proposed to be made.
On the existence of an Australian industry, the statement of essential facts made the following preliminary findings and conclusions:
Customs and Border Protection found:
• there is an Australian industry producing like goods;
• the like goods were wholly manufactured in Australia by Arrowcrest; and
• the Australian industry consists of one main Australian manufacturer of ARWs, being the applicant. The applicant manufactures the majority of Australian produced ARWs and as such any injury to the applicant is considered representative of overall injury to the Australian industry. All other Australian manufacturers were contacted and their volumes considered too small to be considered separately.The statement of essential facts then reported preliminary findings and conclusions that there had been dumping of goods to more than a negligible extent, finding a variety of dumping margins (expressed as a percentage of export price), with the highest margin being for what the document identified as “selected non-cooperating exporters”, where the margin was fixed at 32.9%. The document also reported preliminary findings and conclusions that there were countervailable subsidies operating in 34 programs in the PRC, and found subsidy margins (expressed as a percentage of export price) to varying degrees. Again the highest margin was for “selected non-cooperating exporters” where the margin was found to be 58.8%.
There was a reported preliminary finding and conclusion of injury, expressed in the following way:
Customs and Border Protection has made the preliminary finding that in the investigation period the Australian industry producing like goods experienced injury in the form of:
• lost sales volume;
• lost revenue;
• price suppression;
• lost profits and profitability;
• reduced return on investment;
• reduced employment; and
• reduced capacity utilisation.The document then recorded the finding that the dumping and subsidisation had caused material injury, and may cause further injury, such that the CEO proposed to recommend to the Minister that a dumping duty notice and a countervailing duty notice be published in accordance with the Customs Act.
Sampling is not intended wholly to replace consideration of the exportations of individual exporters: subs (9) requires the investigation to extend to information provided by individual exporters who have not been selected in the sampling exercise, unless to do so would prevent the timely completion of the report. The scheme thus contemplates that the CEO will examine, and “investigate”, the exportations of all those exporters who provide information on an individual level to the CEO.
Section 269TACB(8) could not have been triggered in the present case, because only six of the 117 exporters provided information to the CEO. As the respondents submitted, it could not be said that the number of relevant exporters was so large that it was not practicable to determine the existence of dumping and work out the margins for each of the exporters.
Subsection (9) provides the key to rejecting the respondents’ submission of a connection between the operation of s 269TACB(8) and s 269TG(3B). The respondents seek to have those individual exporters who are not selected in a sampling exercise as the only ones who would fit the definition of “residual exporter”. They seek to equate those who are “investigated” in s 269T with a “sample” in s 269TACB. There are several flaws in this argument. First, it self-evidently will not cover all circumstances — as in this case, where there is no sampling exercise. The scheme does not suggest that the classification of selected and residual exporters should not be applied unless there is a sampling exercise. They are freestanding definitions and do not themselves refer to s 269TACB. The placement of s 269TG(3B) in the general discretion to issue dumping duty notices also is not consistent with the respondents’ submissions — if those submissions were correct, one would expect to find a provision like s 269TG(3B) with the sampling provisions in s 269TACB.
Instead, s 269TACB(9) indicates that, even where a sampling exercise is conducted, the statute contemplates those outside the sampling exercise who have provided information will also be investigated and will be considered by the statute to have been “selected exporters”. Those exporters do not have any dumping margin addressed by averages, but rather by reference to their own information, that is the intent of the scheme. I do not consider that the term in s 269TACB(8), “exporters who are not so selected”, is synonymous with ‘residual exporters” in s 269T. Rather, I consider it refers to those exporters who will be picked up by subs (9) and who will still, the scheme assumes, be categorised as selected exporters.
Finally, the text and context of s 269TG(3B) simply do not suggest it is limited in the way identified by the respondents. Although the respondents describe the effect of s 269TG(3B) as a “benefit”, in my opinion it may be better to describe it as a cap or a limit on the calculations which can be made in respect of residual exporters. Those exporters will not be given individual assessments based on the information provided — they will have to take their chances with the averages set out in subs (3B). That may or may not be to their advantage. In my opinion, the scheme does not intend to allow the CEO to penalise those she or he characterises as “non-cooperating” exporters with a form of calculation of margin which is, in effect, left up to the CEO herself or himself to determine, without regulation from the statute. The rest of the scheme for calculation of margins is carefully detailed and described. If s 269TG(3B) is given effect in the way Holden contends, calculations for residual exporters are also contained and regulated rather than, as occurred here, allowing the CEO, apparently arbitrarily, to select highest and lowest values and prices and arrive at a very high dumping margin.
The TMRO was correct to identify this aspect of the report as erroneous and to direct it be reinvestigated. The way the CEO carried out that reinvestigation also suffered from the same flaw.
In those circumstances, the recommendations of the CEO in Report 181, the Minister’s decision to issue the dumping notice based on those recommendations, the CEO’s recommendations on reinvestigation in Report 204 and the Minister’s affirmation of the reviewable decision were affected by jurisdictional error, because of a misunderstanding and misconstruction of what the statute means by the use of the terms “selected” and “residual” exporters.
Countervailing subsidy: public body/adequate remuneration findings (grounds 10 and 11)
Grounds 10 and 11 were expressed in the following way:
10. In making the CEO Decision, Subsidy Declaration and the May 2013 Minister's Decision, the CEO and the Minister erred in the construction and application of the phrase “public body” in the definition of “subsidy” in s 269T of the Customs Act by applying the term to “state-invested enterprises” in circumstances where the material before the Minister did not disclose the exercise of any “government functions or authority” by the state-invested enterprises (ADJR Act s 5(1)(f)) and constituted jurisdictional error or a failure to exercise jurisdiction.
11. In making the CEO Decision, the Subsidy Declaration and the May 2013 Minister’s Decision, the CEO and the Minister erred in the construction or application of the phrase “adequate remuneration” in s 269TACC(4) of the Customs Act (as it was at all relevant times) by applying a “market price” test rather than an “adequate return on investment” test.
Next, Holden contended that in his decision on the imposition of countervailing duty, the CEO had misinterpreted two statutory concepts and so his decision was affected by jurisdictional error.
This ground concerns the CEO’s decision-making about a program in the PRC called Program 1. Program 1 (the first program in a table produced by the CEO in his statement of essential facts and in Report 181) was a program whereby aluminium was said to be provided by government to manufacturers and producers of ARWs in the PRC at less than fair value. As part of the investigation, the CEO forwarded a questionnaire about this program (and others) to the government of the PRC, and received a response. After visiting selected exporters, the CEO added further programs he considered could constitute countervailing subsidies in relation to ARWs, and gave the PRC government a further questionnaire, to which it also provided a response. Arrowcrest’s allegation was that PRC exporters of ARWs benefited from the provision of raw material (in the form of aluminium and aluminium alloy) from the PRC government at less than adequate remuneration, through state-invested enterprises (SIEs). There seemed to be no real debate on the material provided to the CEO, whether through selected exporters or through the PRC government, that these SIEs were significant suppliers of aluminium and aluminium alloy to the PRC ARW exporters, and this was consistent with findings made by the CEO in an earlier investigation into aluminium extrusions. The volume purchased could not reliably be ascertained.
For the definition of countervailable subsidy in s 269TAAC to apply, there needed to be a “subsidy” within the meaning of that phrase in s 269T of the Customs Act. That definition provides:
subsidy, in respect of goods that are exported to Australia, means:
(a) a financial contribution:
(i) by a government of the country of export or country of origin of those goods; or
(ii) by a public body of that country or of which that government is a member; or
(iii) by a private body entrusted or directed by that government or public body to carry out a governmental function;
that is made in connection with the production, manufacture or export of those goods and that involves:
(iv) a direct transfer of funds from that government or body to the enterprise by whom the goods are produced, manufactured or exported; or
(v) a direct transfer of funds from that government or body to that enterprise contingent upon particular circumstances occurring; or
(vi) the acceptance of liabilities, whether actual or potential, of that enterprise by that government or body; or
(vii) the forgoing, or non collection, of revenue (other than an allowable exemption or remission) due to that government or body by that enterprise; or
(viii) the provision by that government or body of goods or services to that enterprise otherwise than in the course of providing normal infrastructure; or
(ix) the purchase by that government or body of goods provided by that enterprise; or
(b) any form of income or price support as referred to in Article XVI of the General Agreement on Tariffs and Trade 1994 that is received from such a government or body;
if that financial contribution or income or price support confers a benefit in relation to those goods.
First, Holden contended the CEO had misinterpreted the term “public body” in the definition of subsidy in s 269T, and its misinterpretation led it to conclude that state-owned enterprises that manufacture aluminium and aluminium alloy in the PRC are “public bodies”. Holden submitted that the TMRO had been correct to see this finding as erroneous, and to recommend it be reinvestigated. However, when the CEO came to reinvestigate it, in Report 204 he simply maintained his original conclusion, so that the error Holden identified persisted, it submitted.
Second, Holden contended the CEO had misinterpreted and misapplied the phrase “adequate remuneration” in s 269TACC(4)(d), in considering whether raw materials for the wheels (aluminium and aluminium alloy) had been provided for “less than adequate remuneration”. Holden submitted it was erroneous to compare the prices which would prevail in a competitive market with the price paid, and instead the comparison should be to focus on whether there had been an adequate return on investment. Since there was no evidence on this latter issue, the CEO could not lawfully have reached the conclusion he did, Holden submitted.
The approach taken by the CEO, given there was no definition of “public body” in the Customs Act, was to draw from a decision of the WTO Appellate Body in United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, DS379 (11 March 2011), where the WTO Appellate Body set out some of the indicia which could be used to identify a public body: namely, is there a statute or other legal instrument which vests government authority in the entity concerned; does the entity exercise governmental functions and does it exercise meaningful control over an entity. The first indicium was not made on the CEO’s analysis of the way PRC SIEs operated — there was no statute or instrument vesting government authority in the SIEs. However the CEO considered the second and third indicia were made out on the material. The TMRO disagreed that they were.
Having noted that the approach taken by the WTO Appellate Body adopted an approach to the tem “public body” which was likely to be the same as that adopted by an Australian Court, the TMRO found:
The evidence analysed by Customs indicates that certain producers of aluminium and/or alloy are actively taking steps to comply with the policies promulgated by the Government of China, and display an awareness that there may be negative consequences to their business if they fail to do so. However, in my view, active compliance with the governmental policies and/or regulation does not equate to the exercise of governmental functions or authority. It does not evidence the essential element of exercising a power of governments over third persons.
Customs substantially relied on s 36 of the Company Law, which requires SIEs making investments to comply with National Industrial Policies. But in my view this section requires no more than compliance with the policies of the Government of China. It falls short of establishing that State-Invested aluminium or alloy producers are invested with the power to control, compel, direct or command private bodies and persons.
Moreover, even if it were accepted that the Government of China exercises meaningful control over State-Invested aluminium or alloy producers, the third test drawn from DS379 would again not be met, in my view, because the evidence again fails to establish that the enterprises are exercising governmental authority.In its submissions on this ground, Holden relied on the approach taken by the TMRO and did not advance any independent submissions. The respondents submitted the TMRO did not dispute the approach taken by the CEO in Report 181 to determine whether or not SIEs that manufacture aluminium and aluminium alloy in China were “public bodies” for the purpose of the definition of “subsidy” in s 269T. Rather, the TMRO disagreed with the CEO’s analysis of the evidence and findings in relation to “indicia 2” and “indicia 3”.
I agree with the respondents’ submissions. Holden made no submission on the construction of the term “public body” in the definition of “subsidy” in s 269T. It did not submit the approach taken by the WTO Appellate Body was wrong. It did not advance any separate or independent construction of the term: cf Panasia 217 FCR 64; [2013] FCA 870. It simply adopted what the TMRO had said. And all that amounted to was a disagreement on fact finding with the CEO. No error of law, let alone a jurisdictional one, is made out.
The second aspect of this ground — the construction of the term “adequate remuneration” in s 269TACC(4) was but only broadly developed in oral submissions on behalf of Holden. Again, reliance was placed on the analysis of the TMRO. The term is not defined in the Customs Act and the CEO adopted an approach using competitive market price for aluminium in the PRC. Customs found that the PRC government influences on the market for aluminium and aluminium alloy in the PRC distorted all prices within that market, so that the PRC domestic price was unsuitable to use. Instead, Customs applied data from the London Metal Exchange to construct competitive market prices for aluminium and aluminium alloy in the PRC.
The TMRO disagreed with this approach, concluding that the term “requires an assessment of the adequacy of the return on investment”. It took account of statements of the WTO Appellate Body in United States — Final Countervailing Duty Determination with respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R (19 January 2004) and by the Macquarie Dictionary definition of “remuneration” and “remunerate”. This was an issue on which it recommended further investigation, which the Minister accepted. The CEO, however, on further investigation in Report 204, maintained the approach he had taken originally.
Again, Holden in submissions on this ground adopted the reasoning of the TMRO. Although that reasoning provides another mechanism by which remuneration might be assessed, it is not the only one for which the statute allows. I accept the respondents’ submissions that there is nothing in the text, context or purpose of s 269TACC(4) which suggests only one way of assessing adequate remuneration is permissible. This is a statutory scheme which is replete with alternative methods of calculation and which leaves for the CEO, and the Minister (and the TMRO on review), considerable latitude about the adoption of methods in any given factual case. That is to be expected because of the particular combination of difficulty of access to reliable information from exporting countries, uncertainty of evidence about influences in those markets, potential lack of cooperation, and the absence of coercive powers and the difficulties of finding appropriate benchmarks for pricing in various circumstances.
These are choices for the CEO and the Minister in the first instance, and the TMRO on review. On any further investigation, neither the CEO nor the Minister are bound by the views of the TMRO on review, although no doubt they are a relevant consideration. Choice of method by which to calculate whether remuneration for provisions of goods by government is “less than adequate” is left by this scheme as a matter for the decision-makers. Nicholas J reached a similar conclusion in Panasia 217 FCA 64; [2013] FCA 870 at [83], and I respectfully agree with his Honour’s reasoning .
This ground is not made out against any of the respondents
Procedural fairness: no notice of departure from aspects of TMRO decision (grounds 5A and 5B)
Grounds 5A and 5B were expressed in the following way:
5A. In conducting the reinvestigation, the CEO failed to accord procedural fairness to the Applicant:
(a) by failing to notify the Applicant that it was proposing to revisit or depart
from the findings and reasons for the TMRO decision and the January 2013
Minister’s decision, and in particular the findings:(i) that non-cooperating exporters were “residual exporters” and not “selected exporters” (TMRO Report, pp 49-51);
(ii) that State-invested enterprises that manufacture aluminium and aluminium alloy in China were not “public bodies” for the purposes of the definition of “subsidy” in s 269T (TMRO Report, pp 59-65); and
(iii) that “adequate remuneration” for the purposes of s 269TACC(4)(d) required an assessment of the adequacy of return on investment and could not be determined by reference only to competitive market price (TMRO Report, pp 65-69);(b) by failing to give the Applicant an opportunity to be heard on why the CEO should not revisit the above findings and reasons for the TMRO decision and the January 2013 Minister’s decision, or alternatively why those findings and reasons were correct.
5B. By reason of the denial of procedural fairness by the CEO, the May 2013 Minister’s Decision involved a denial of procedural fairness (ADJR Act s 5(1)(a)) or an error of law (ADJR Act s 5(1)(D) and constituted jurisdictional error or a failure to exercise jurisdiction.
Finally, by the additional ground in the second further amended application, Holden submitted there had been a further denial of procedural fairness because, on further investigation pursuant to s 269ZZL, the CEO did not give Holden notice that, on the two issues (namely, “non-cooperating exporters” and whether Chinese aluminium producers were “public bodies”) it did not accept the findings of the TMRO and would reach conclusions opposed to those reached by the TMRO. If there was a denial of procedural fairness in this way by the CEO on the reinvestigation there was, Holden contended by ground 5B, an invalidating effect on the Minister’s decision in May 2013 to affirm the reviewable decision.
Relying on Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591-592; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63 at [29]-[32]; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212; [2003] HCA 56 at [22]; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 at [194], Holden contended it had a legitimate expectation that the CEO would not revisit or depart from the TMRO findings without giving interested parties such as Holden an opportunity to be heard on why he should not revisit or depart from those findings. That expectation arose, it submitted, because it was not “obviously … open on the known material” (see Alphaone 49 FCR 576) that the two matters on which the TMRO had reached the opposite conclusion to the CEO would be determined on the reinvestigation in a way contrary to Holden’s submissions, and contrary to the findings of the TMRO.
Holden submitted that, when the CEO invited submissions, he did not provide any indication that the reasons of the TMRO would be revisited, or not accepted. Had he done so, Holden would have made submissions as to why the TMRO findings were correct and the reinvestigation should have proceeded on that basis.
The respondents submitted the TMRO’s findings were “provisional” and did not bind the CEO on a further investigation. The TMRO was only required to determine, on the basis of the particulars contained in the application, that there were “reasonable grounds to warrant the reinvestigation of the finding or findings specified in the application”: see 269ZZF. The TMRO’s views were in that sense not conclusive, the respondents submitted, but rather provisional and could not bind the CEO on a further investigation.
I do not accept the respondents’ characterisation of the TMRO finding as “provisional”. The scheme gives it no such character. It is true that the Minister need not accept the recommendation and need not order a further investigation. However, if the Minister does accept the TMRO investigation, the CEO is obliged to conduct a further investigation. Some conclusive effect is given to the TMRO finding. It is to be assumed, in my opinion, that if the scheme has authorised the TMRO to recommend a finding made by the CEO should be investigated again, it is because there is something erroneous about its reasoning, methods or the material relied on or a combination of all of those matters. The CEO’s finding on a material question of fact or conclusion based on such a fact is, in the TMRO’s opinion, flawed. If the Minister accepts the recommendation of the TMRO, she or he should be taken to agree that the flaw should cause the CEO to re-examine and reconsider what he had reported to the Minister, even if perhaps she or he should not necessarily be taken to agree with what the TMRO has said.
Holden’s use of legitimate expectation in this context may be unnecessary. It seems to me its argument is based squarely on SZBEL 228 CLR 152; [2006] HCA 63 at [35], where the Court stated:
The Tribunal is not confined to whatever may have been the issues that the delegate considered. The issues that arise in relation to the decision are to be identified by the Tribunal. But if the Tribunal takes no step to identify some issue other than those that the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered dispositive are “the issues arising in relation to the decision under review”. That is why the point at which to begin the identification of issues arising in relation to the decision under review will usually be the reasons given for that decision. And unless some other additional issues are identified by the Tribunal (as they may be), it would ordinarily follow that, on review by the Tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant.
Although the statute does use the term “reinvestigation” in some parts of s 269ZZL, subss (3) and (4) provide:
(3) The CEO must conduct an investigation in accordance with the Minister’s requirements under subsection (2) and give the Minister a report of the investigation concerning the finding or findings within the specified period.
(4) In a report under subsection (3), the CEO must:
(a) if the CEO is of the view that the finding or any of the findings the subject of reinvestigation should be affirmed — affirm the finding or findings; and
(b) set out any new finding or findings that the CEO made as a result of the reinvestigation; and
(c) set out the evidence or other material on which the new finding or findings are based; and
(d) set out the reasons for the CEO’s decision.This second “further” investigation is confined to the finding or findings which the Minister requires the CEO to investigate under s 269ZZL(2). The detailed scheme for notification and procedural fairness which is established in relation to the principal investigation under Div 2 of Part XVB is not repeated in relation to the conduct of this further investigation, no doubt because of its limited nature.
Assuming the CEO is by these provisions required to undertake a full re-examination of her or his reasoning process and the material on which it relied to reach the conclusion the TMRO has identified as flawed, there is nothing in the scheme to suggest the CEO is prevented ultimately from adhering to her or his initial reasoning and conclusions. The review process confronts the CEO with a different analysis, and the view of an independent person that the CEO’s conclusion and/or reasoning were flawed. So long as the CEO engages in a bona fide further examination of those findings, taking into account what the TMRO has said, she or he will perform her or his statutory task.
The prospect she or he may adhere to her or his original reasoning and conclusion is obvious in the circumstances as one of at least two options available to the CEO. There may be circumstances (not this case) where what the TMRO has said, and the material (perhaps by way of submission) considered by the TMRO gives rise to such new issues that the CEO will be obliged to afford interested parties an opportunity to make further submissions by foreshadowing her or his proposed conclusions in advance, consistently with the approach outlined in SZBEL 228 CLR 152; [2006] HCA 63. One cannot discount the possibility of such a situation arising.
It is not, however, the current situation. Holden was well aware of the TMRO’s reasoning process from the review report. It was well aware of the CEO’s process from his original report. It should be taken to realise the CEO had no obligation under the scheme to change his position to that stated by the TMRO, but rather to consider what the TMRO had said and investigate the matters again, both at a factual and at a conclusionary level. Unlike the situation in SZBEL 228 CLR 152; [2006] HCA 63, the only matters which could under the statute form the subject of the further investigation were the very matters decided differently by the TMRO. The issues for any further investigation were framed by the TMRO’s identification of those matters. The issues — and the two competing assessments of them — were obvious, and the evidence shows Holden was in fact afforded a further opportunity by the CEO to make submissions at this stage.
As it has turned out, I have found the CEO’s original conclusion on one of the two matters identified by the TMRO to be affected by jurisdictional error. By maintaining his position in Report 204, the CEO perpetuated that jurisdictional error. Having examined the TMRO recommendations, he had a choice whether to change his recommendations upon further investigation. He chose not to and there was no denial of procedural fairness to Holden in that process, but there was jurisdictional error.
The procedural fairness challenge to the CEO in respect of the reinvestigation must fail. Accordingly, ground 5A must also fail.
CONCLUSION
The CEO misconstrued the terms “selected exporter” and “residual exporter” in s 269T of the Customs Act, as they operate in s 269TG. That misconstruction was adopted and acted on by the Minister because he accepted the recommendation of the CEO as to dumping margins for those entities the CEO identified as “selected non-cooperating exporters”, and published notices under s 269TG using those margins. Although the TMRO identified an error (and therefore his decision is not affected by the same misconstruction), on further investigation, the CEO adhered to the position he had originally taken and, in Report 204, recommended the same dumping margins, based again on the same group of “selected non-cooperating exporters”, using again the lowest export price and the highest normal value so as to produce a margin of 29.3%, and not considering that calculation to be affected by the constraint imposed by s 269TG(3B).
Therefore, the CEO’s further recommendation in Report 204 suffered the same misconstruction, which remained present in the dumping duty notices issued by the Minister.
Otherwise, Holden’s grounds of review are not made out. Directions will be made in relation to the filing of proposed terms of order reflecting these reasons for decision. The parties will also be given an opportunity to make short submissions on the question of costs, should they choose to do so.
I certify that the preceding two hundred and fifty-seven (257) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate:
Dated: 4 July 2014
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