Goliath Portland Cement & Anor v CEO Customs

[2001] HCATrans 84

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Hobart  No H5 of 2000

B e t w e e n -

GOLIATH PORTLAND CEMENT CO LIMITED

First Applicant

SHAW CONTRACTING PTY LIMITED

Second Applicant

and

CHIEF EXECUTIVE OFFICER OF CUSTOMS

Respondent

Application for special leave to appeal

GAUDRON J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT HOBART ON THURSDAY, 5 APRIL 2001 AT 2.12 PM

Copyright in the High Court of Australia

MR G.A. FLICK, SC:   If your Honours please, I appear with MR N.J. BEAUMONT, for the applicant. (instructed by Freehills)

MR A. ROBERTSON, SC:   May it please the Court, I appear with DR A. GELBART, for the respondent. (instructed by the Australian Government Solicitor)

GAUDRON J:   Thank you, Mr Robertson.  Yes, Mr Flick.

MR FLICK:   Your Honours, the applicant claimed in these proceedings an entitlement to diesel fuel rebate.  It was entitled to that rebate if the operations we were carrying out were mining for minerals or if what we were doing was beneficiating minerals or ores bearing minerals.  Before the Tribunal, the applicant advanced a case and was successful in advancing a case that its operations were mining and the Tribunal rejected evidence and submissions that we were quarrying or manufacturing.  The Tribunal accepted that we had a purpose and that our purpose was to recover minerals.  Those ‑ ‑ ‑

HAYNE J:   What was the mineral that was being recovered or the subject of the beneficiation?

MR FLICK:   A number, your Honour, although the Full Court only deal with one.  The answer to your Honour’s question is that we were recovering or extracting a number of minerals, being calcite, predominantly calcite, but also alumina, silica and iron, all of which was necessary to make cement.  The Full ‑ ‑ ‑

HAYNE J:   This was a single, continuous process in which limestone was taken at one end and the end product of which was cement, was it not?

MR FLICK:   Yes.

HAYNE J:   In what sense were you recovering or engaging in beneficiation of calcite, alumina, silica or iron?

MR FLICK:   Your Honour, that question, with respect, conceals a difficulty.  To the extent that we were, to use a neutral term, digging up a number of products, the alumina, the silica and the iron, we said we were mining for those minerals.  We were digging them out of the ground, we were specifically seeking them out so that we could use them.  Now, that was a mining operation and we were digging out of the ground that which was there.  The question of beneficiation comes up when you are talking about recovering or getting the lime, the calcium oxide, out of the limestone.  The statutory expression, to address your Honour’s question, is one of beneficiation of minerals ‑ ‑ ‑

HAYNE J:   Beneficiation of those minerals, those minerals being, presumably, those covered by the expression “operations for the recovery of minerals”.

MR FLICK:   Yes.  The expression, your Honour, is “beneficiation of minerals or ores bearing minerals as an integral part of operations for their recovery”.  The way in which it was put before the Tribunal and the way in which the Tribunal resolved it was that the word “beneficiation” simply meant making fit for purpose.  We said that we were beneficiating a mineral, namely the lime, or we were beneficiating an ore, namely the limestone.  The Tribunal accepted that.  Our point on that issue, your Honour, is that if one looks at the reasons of the Full Court, it seems to have rejected our entitlement on the basis that, as Justice Hayne put a moment ago, it was a continuous process and it is a manufacturing process, although they did not say so, and exclusively could not be mining because it was manufacturing, and, as Justice Hayne was suggesting, that what we were doing was not recovering something which was there.  There was some process of alchemy going on or some process of synthetic production of something which was not there.

Before the Tribunal the same argument was run and the way in which it was addressed was to say, “If you look at the definition of “minerals”, it is minerals in any form”.  We got the lime, it did not come from nowhere ‑ ‑ ‑

GAUDRON J:   That is the question, did you get the lime?

MR FLICK:   Yes, your Honour, we say that we did.

GAUDRON J:   Was there ever a point at which you could identify lime separately and distinct from everything else?

MR FLICK:   Yes, your Honour, and we will ‑ ‑ ‑

HAYNE J:   Which then continued on its merry way down the continuous process until cement emerges at the other end.

MR FLICK:   Yes.

HAYNE J:   The fact that you can identify a point at a point in a continuous process that there is an intermediate product seems to be the core of the argument you wish to put, is it not?

MR FLICK:   It is a core, your Honour.  Can I just raise one thing and then leave it to one side.  The Full Court only directed attention to calcite, it did not address how we described the recovery processes for the other products, the alumina, the silica and the iron.  That was a mining operation, the Tribunal so found, and it is exclusively a question of fact.  The Full Court did not say that that finding of fact was one which was not reasonably open.  It did not say that you could not describe our processes as mining.  One would have though the decision of the Full Court on that ‑ ‑ ‑

GAUDRON J:   What you had to have were mining operations, did you not?

MR FLICK:   Mining for minerals.

GAUDRON J:   But did you not have to have mining operations as that term is used in section 164(7)?

MR FLICK:   Yes, your Honour, yes, and the Tribunal found that we were engaging in mining operations as opposed to quarrying, as opposed to manufacturing.

GAUDRON J:   I do not understand why you say “as opposed to”.  I mean, the two are not necessary mutually exclusive, I should have thought.

MR FLICK:   No, no, they are not mutually exclusive and, indeed, if the finding is that we were engaging in mining operations for these other minerals, that is a finding of fact, it cannot be corrected by the Full Court, it does not fall within section 44 and one would have thought the approach of this Court since Broken Hill which says it is exclusively a question of fact would preclude the Full Court from saying, “What the Tribunal found to be mining, we call manufacturing”.  Indeed, the Tribunal went to say, “When does manufacturing start?” and the Tribunal went on to say “Where is the source of this argument that it is manufacturing and what significance do we give to the fact that the process is continuous?”.  The Tribunal said the evidence in support of that was “idiosyncratic”, to use their expression, was of marginal value and they rejected it.  Our first point is that is a finding of fact, it does not fall within 44 and the Federal Court could not interfere with it.  Indeed, the trial judge, Justice Heerey, accepted that.  That is the point which I said to Justice Hayne I would raise and then leave.

To address the question as to the balance of the project, namely the recovery of the calcite or the lime, whether it was a continuous process or not, the Tribunal said and found that that process was beneficiation, that finding was reasonably open to it and it is a finding of fact which cannot be disturbed under 44 unless 44 is some gateway to greater powers of the Federal Court.  To the extent that you have to establish that the product was there to be recovered, we convinced the Tribunal and the Tribunal found that the lime was there in association with carbon dioxide and all that we did to recover it or to obtain it, which was the finding, was to heat it up.  We burnt off the carbon dioxide and were left with what we set out to achieve.

The contrary proposition was one which said it was not there in the first place.  You could not find it and it was some sort of synthetic production.  That, the Tribunal said, was founded upon a school textbook, which - the expression was “an oversimplification” of what the product was.  So if you have to say, is the lime there in the first place, if you have to prove that, notwithstanding that the word “minerals” is defined as meaning minerals in any form, we did and the Tribunal said, “It is there in association with something else and you recover it and you obtain it by burning it off”.

HAYNE J:   In what sense do you say that that mineral was recovered?

MR FLICK:   We obtained it, it was separately identifiable and you could separate it if you wanted to, but our ‑ ‑ ‑

HAYNE J:   But you did not.

MR FLICK:   No, our process was continuous.  But if one can stop there and leave continuity aside for a moment, your Honours, if I may.  If you have to say within the meaning of 164 you can only recover something which was there, the finding of the Tribunal was that it was there, you recovered it by obtaining it by burning off the carbon dioxide.  That was a finding which was reasonably open to the Tribunal.  The Tribunal explained its reasons for that conclusion and that, too, is a finding of fact which cannot be interfered with, so long as it is reasonably open.  We say not only is it reasonably open, it was manifestly correct.

To come back to Justice Hayne’s question on what significance do you give to continuity, again, that was the subject of evidence before the Tribunal which is addressed in its reasons and what was being put to the Tribunal by the respondent was that because it was a continuous process, it was not mining, it became manufacturing.  What was put ‑ ‑ ‑

HAYNE J:   Leave aside that dichotomy for a moment, assume that dichotomy to be irrelevant.  If the process is a continuous process, you begin with one set of inputs and you end with an output or set of outputs.  In considering the expression “operation for the recovery of minerals”, including mining for those or beneficiation of those, why should you have regard to any intermediate form in which the inputs may be found during this continuous process?  Why are you not having regard only to inputs and final output?

MR FLICK:   For the finding or the conclusions of the Full Court to be correct and for that proposition to be sustained, namely a process which is continuous, is not whether it is manufacturing or the recovery of a mineral, for that contention of the Full Court to be correct, it has to be the only conclusion which these facts are capable of supporting.  The moment these facts are reasonably capable of supporting a different conclusion, namely whether it is mining for minerals or beneficiation of minerals, or beneficiation of ores bearing minerals, the moment that finding of fact is open, then that is a finding of fact which the Court cannot interfere with.

HAYNE J:   You say it is a finding of fact.  The basic facts about what happened in this process, at least by the end of the Tribunal’s decision, were not matters for dispute, were they?  The real question was the application of the statute to those processes then understood, and that is a question of law surely?

MR FLICK:   Your Honour, no, it is a question of fact.

HAYNE J:   What the application of the statute to the facts is a question of fact?

MR FLICK:   Yes, yes.  If you look at Broken Hill, your Honour - now admittedly that is a case under the tax legislation and the expression there was “involving a question of law” - the High Court in Broken Hill said whether or not something is a mining operation is a question of fact, and that is where I get the expression from.  If that finding of fact is reasonably open to it, you cannot interfere with it.  Now, in Vetter’s Case, your Honours will recall Justice Kirby talked about perverse findings.  There is no suggestion that the finding of the Tribunal here was perverse.  It is a finding which is open to it.

GAUDRON J:   But, ultimately, was the Full Court not considering the meaning of the expression “mining operations”?

MR FLICK:   Yes.

GAUDRON J:   Did it not in effect say that for there to be mining operations, minerals must be physically recovered as such?

MR FLICK:   Yes, your Honour, is the short answer.

GAUDRON J:   Yes, well now, that is a question of law, is it not?

MR FLICK:   Your Honour, whether facts fall within an expression, once you have determined the meaning ‑ ‑ ‑

GAUDRON J:   No, but that much is right, is it not, that that was a question of law?

MR FLICK:   We do not agree that the interpretation of the phrase “mining operations” is a question of law.  We say Broken Hill says it is a question of fact.  We do not agree that mining for minerals is a question of law.  That is a question of fact.  And we do not agree that beneficiation of minerals is a question of law, it is a question of fact.  But whether it is law ‑ ‑ ‑

GAUDRON J:   But what is the meaning of the expression “mining operations” as used in section 164(7)?  Now, that is a question of law, is it not?

MR FLICK:   Well, your Honours, have just overruled Broken Hill South, if that is correct.

HAYNE J:   Really, Mr Flick, really, that is just not helpful, is it?

MR FLICK:   Well, your Honour, may I just take your Honours to ‑ ‑ ‑

HAYNE J:   Grapple with the point, if you would.

MR FLICK:   Your Honours, we say that that is a question of fact and we say that that ‑ ‑ ‑

GAUDRON J:   Whether something is or is not a mining operation may be a question of fact, but whether or not “mining operations” bears a particular meaning must be a question of law, surely.

HAYNE J:   Are the words used in their ordinary English sense, what is the meaning to be given to the statute is, I would have thought, par excellence a question of law.

MR FLICK:   Your Honours, I have put what I wish to put on that.  May I just conclude on this point, if I may.  The reason why we say this case goes beyond the significance of the particular issues involved, one, we say there is a question as to what extent on a section 44 appeal the Full Court can recharacterise findings of fact and say something is manufacturing as opposed to mining.  Secondly, we say that there is a real question as to the extent to which the Federal Court is departing from whether it is a question of law or a question of fact; the extent to which the Full Federal Court is departing from the approach in Broken Hill which said if it is reasonably open, the Court would not interfere with it; and departing from ICI, namely, if something is in association with it, it can be recovered.

We say that there is a real question of wide importance for the mining industry because this process, whereby the product is heated and the carbon dioxide is released to the atmosphere is entirely analogous to, so the Tribunal found, processes involved in the production of iron.  So, if this is not mining, then there is a real question as to whether the recovery of aluminium from bauxite, a real question as to the recovery of iron from siderite, as it was called, whether that is mining as well.  Now, your Honours, for those reasons, we say the decision is wrong, the Federal Court has trespassed beyond the jurisdiction entrusted to it and the case is, because it is within a very limited compass factually, an appropriate vehicle in which to raise those questions.  If the Court pleases.

GAUDRON J:   Yes, thank you, Mr Flick.  Yes, we need not trouble you, Mr Robertson.

The decision of the Full Court in this matter turns on the proposition that for there to be mining operations, as that term is used in section 164(7) of the Customs Act, minerals must be physically recovered as such.  That is a question of law.  The Full Court also held that the evidence before the Administrative Appeals Tribunal did not permit of a finding that minerals were physically recovered as such.  That too is a question of law.  The outcome of the appeal to the Federal Court turned on those questions and thus the appeal was determined on questions of law.  Accordingly, the jurisdictional grounds upon which the applicant seeks special leave to appeal do not arise. 

Moreover, neither the question of construction, nor the question of the sufficiency of the evidence to found the Tribunal’s decision, is one which raises any issue of general legal principle which might appropriately attract the grant of special leave to appeal.  Accordingly, special leave is refused with costs.

The Court will now adjourn briefly to reconstitute.

AT 2.32 PM THE MATTER WAS CONCLUDED