J. Wattie Canneries Ltd v Hayes, T.P. (Comptroller-General of Customs)

Re: J. WATTIE CANNERIES LIMITED
And: THOMAS PLUNKETT HAYES, COMPTROLLER-GENERAL OF CUSTOMS; PETERSVILE
INDUSTRIES LIMITED and McCAIN FOODS (AUSTRALIA) PTY LIMITED
No. NSW G568 of 1986
Customs

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Keely J.
Wilcox J.
Gummow J.

CATCHWORDS

Customs - Anti-dumping - Requirement by Customs of provision of security in respect of any duty that may be payable under Customs Tariff (Anti-Dumping) Act - Inquiry necessary to be made before security may lawfully be required - Necessity for temporal relationship between dumping and the suffering of material injury by Australian industry - Whether there was evidence to sustain conclusion that duty may be payable - Rules of natural justice - Whether applicable to decision to require security - Whether Customs obliged to disclose to importer the substance of the complaints against it - Whether Customs obliged to pursue inquiries registered by importer - Leave to amend points of claim.

Customs Act 1901 s.42.

Customs Tariff (Anti-Dumping) Act 1975 ss.4A, 5, 5A, 6, 7, 8, 10, 13.

HEARING

SYDNEY

#DATE 21:7:1987

Counsel for the Appellant: Mr G.A. Flick with Mr B. O'Sullivan

Solicitors for the Appellant: Freehill, Hollingdale & Page

Counsel for the First Respondent: Mr C. Stevens with Ms P. Sharpe

Solicitors for the First Respondent: Australian Government Solicitor

Counsel for the Second and Third Respondents: Mr C.A. Sweeney

Solicitors for the Second and Third Respondents: McDonnell, Moffitt, Dowling, Tayler

ORDER

The application for leave to amend be refused.

The appeal be dismissed.

The appellant pay to each of the respondents their respective costs of the appeal.

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

JUDGE1

This appeal raises questions regarding the inquiries to be made, and procedures to be followed, prior to the imposition, under s.42 of the Customs Act 1901, of securities in respect of dumping duties payable under the Customs Tariff (Anti-Dumping) Act 1975.

The facts

The appellant, J Wattie Canneries Limited, is a New Zealand company. It is the largest processor of frozen, canned and dehydrated vegetables in New Zealand. The company is a major processor and exporter of frozen peas. In December 1983 or January 1984 Wattie entered the Australian frozen vegetable market, selling a range of products, including frozen peas, to food service distributors and retailers in Victoria. In April 1985 the company expanded its frozen pea sales, both by extending its packaging choices and by selling to New South Wales traders. A major feature of the company's marketing strategy was the supply of frozen peas to the major food retailing chains.
The Edgell/Birds Eye Division of Petersville Industries Limited, which company is the second respondent, and McCain Foods (Australia) Pty Limited, the third respondent, are Australian processors and distributors of frozen foods, including frozen peas. They became concerned about the competition presented by Wattie. In October 1985 they lodged a complaint with the Australian Customs Service ("ACS") that Wattie was exporting subsidized frozen peas from New Zealand at dumped prices, and had thereby caused and threatened material injury to the Australian industry.
Following some preliminary investigation, on 5 February 1986 Mr T P Hayes, Comptroller-General of Customs, and the first respondent to this appeal, issued Australian Customs Notice No.86/14. That notice referred to the complaint made by Petersville and McCain and invited submissions from interested parties in order to assist ACS in reaching a preliminary finding. Attention was drawn to the issues to be addressed in reaching a preliminary finding, viz:

"(a) that exports are taking place at dumped prices and/or subsidies are granted on such exports;

(b) that the Australian domestic industry is suffering material injury or material injury is threatened; and

(c) that there is a causal link between (a) and (b)."

During the course of its inquiry into the complaint ACS received written submissions from each of the parties and also from other interested persons and organizations. Inquiries were made by officers of ACS of various retailers, amongst others. On 21 August 1986 Mr Hayes published Australian Customs Notice No.86/211 in which he announced the nature of the preliminary finding. That notice included the following:

"It has been established that a subsidy in the form of Export Market Development Taxation Incentive has been paid on frozen peas exported from New Zealand to Australia. The ACS considers that the amount of the subsidy is sufficient to have caused, and to threaten, material injury to the Australian industry. Accordingly, under the terms of Article 2 of the GATT Code on Subsidies and Countervailing Duties, further inquiries into this aspect will be pursued.

The ACS is satisfied that sufficient evidence has been provided to show that exports of frozen peas have been made to Australia from New Zealand at prices less than normal values and that material injury has been caused and is threatened to the Australian industry as a result of these exports. Accordingly, further inquiries will now proceed.

Following examination of import trends from New Zealand, it is considered that provisional measures are warranted to prevent further material injury being caused during the period of investigation.

These measures will take the form of cash securities or documentary securities with surety, at the option of the importer, and will apply to the goods under inquiry entered for home consumption after the date of this Notice. Collectors of Customs have been advised of the basis on which securities are to be taken."

The preliminary finding, which was published at that time, is a lengthy document. It deals with the material injury alleged by the complainants, the course of the inquiry, the share of the market, over the preceding five years, held respectively by Australian production, New Zealand imports and other imports and the nature and extent of subsidies received by Wattie from the New Zealand government. The document discusses the methods which had been adopted for determining export price, normal value and material injury. In para.10.4 of the finding it is said that "comparison of normal values with export prices has confirmed the existence of dumping margins".
(For the purposes of this case the appellant concedes that there was material before the officer who found the facts set out in the preliminary finding, Mr C E Ryan, Chief Inspector of the Dumping Operations Branch of the ACS, from which he could reach the tentative conclusion, without legal error, that during the period September 1985 to January 1986 it was selling frozen peas to the Australian market at an export price which was less than normal value.)
The preliminary finding deals at some length with the issues of material injury and causation; clearly the major matters for consideration. Reference is made, in para.11.5, to a comparison made by ACS between the store prices of the Wattie imports and the costs of manufacture and sale by the Australian industry of those same items. It is said that ACS found "that the into store prices of proprietary label and generic peas are below the Australian industry's costs to make and sell". The view is expressed that this had led to price undercutting and had had the effect of preventing the price increases necessary to compensate for cost increases incurred by the Australian industry. The finding went on:

"11.6 The ACS undertook inquiries with retailers and wholesalers which confirmed claims by the Australian industry that it had suppressed prices in order to retain existing markets. Further, the ACS found that in some cases the Australian industry had lowered prices below the full cost to make and sell in order to compete in the market place.

11.7 In rebuttal, Wattie Aust requested the ACS on 20 June 1986 to undertake inquiries with a group of major retailers on the question of frozen pea prices following its entry to the Australian market. For the purposes of the preliminary finding, the ACS considers that price undercutting has led to price suppression by the Australian industry. Accordingly, the request by Wattie Aust has not be (sic) pursued at this time."

The refusal referred to in para.11.7 is important in relation to one aspect of the appellant's case: the alleged denial of natural justice.

The preliminary finding analyses figures relating to Australian production of frozen peas and the claimed loss of market share by the Australian industry. The view is expressed that there had been a decrease in production but "in relative terms the industry has maintained its market share in a diminishing market". Reference is made to the allegations made by the Australian producers as to the reduction in employment and the loss of revenue caused by the reduced level of production.
The matters put by Wattie in reply to the complaints made by the Australian industry are set out in section 12 of the finding. Particular reference is made to a claim by Wattie that the concentrated buying power of the retailers had forced the processors to bid against each other, as a result of which Wattie itself had suffered injury. Reference is also made to Wattie's claim that any increase in sales, or in market share, by New Zealand imports had not been at the expense of the Australian industry but, rather, in replacement of imports from other countries which had left the market.
The conclusions of the preliminary inquiry were set out in section 13 of the document:

"13.1 The ACS has examined the claims and subsequent rebuttals made by the parties to this complaint. On the available evidence, the ACS concludes that:

. subsidies have been paid or granted on frozen peas exported to Australia from New Zealand,

. frozen peas have been exported to Australia from New Zealand at prices less than assessed normal values,

. material injury has been caused and is threatened to the Australian industry as a result of these exports to Australia at dumped and subsidised prices; and

. provisional measures are considered appropriate against future imports of the goods to prevent the continuation of material injury to the Australian industry during the period of investigation.

13.2 In arriving at its conclusions, the ACS considers that material injury has been caused to the Australian industry as a result of price undercutting by the New Zealand imports. The price undercutting caused the industry to reduce and suppress prices so as to compete. Edgell, the major processor, has suffered a marked reduction in return on investment and profitability. The evidence presented by Edgell shows that its average net price per kg of frozen peas sold in 1984/85 was considerably less than the average net prices it obtained in 1983/84. This was at the time that Wattie Aust was entering the Australian retail market. The evidence shows that there has been little improvement in 1985/86 when there have been increases in the cost to make and sell frozen peas."

On 15 September 1986 Wattie obtained from Beaumont J an order to show cause, under s.39B of the Judiciary Act 1903, in relation to the issue of writs of certiorari and prohibition. Interlocutory relief was sought, restraining Mr Hayes from imposing any cash security in accordance with the preliminary finding. The order nisi sought final relief in the form of an order quashing the decisions announced on 21 August 1986.
In the event no interlocutory relief was granted but, Petersville and McCain having been added as respondents, arrangements were made for an early final hearing. In order to clarify the issues points of claim were filed by Wattie. They raised four main grounds: that Mr Hayes failed to carry out the comparison which, as a matter of law, he was obliged to make between the normal value of the relevant goods and the material injury caused by those goods as at the date of the values so determined; that Mr Hayes misconceived the nature of the inquiry which he was bound in law to conduct by reason of an incorrect identification of the subject goods; that in conducting his inquiry Mr Hayes owed a duty to Wattie to make certain inquiries and to accord Wattie an opportunity to be heard; and, finally, that, in imposing cash securities upon Wattie, Mr Hayes exceeded his powers in that he imposed the cash securities for an improper purpose. Beaumont J found against Wattie in relation to each ground. He dismissed the Application and discharged the order nisi. Only the first and third of these grounds is re-argued before us.
The connection between dumping/subsidy and material injury
The appellant submits that, in reaching a preliminary finding and in deciding to impose cash securities, the Comptroller-General is under a duty to determine whether goods are being exported to Australia at less than normal value -- in common parlance, "dumped" -- and whether, as at that date, material injury is being occasioned to the relevant Australian industry by the dumping of the goods. The appellant says that, in the present case, ACS considered the two matters as at different dates; the question of dumping being looked at in respect of the period June 1985 to January 1986, whilst material injury was considered as at 1984.
To put this submission into context it is desirable to refer to the relevant legislation. The Customs Tariff (Anti-Dumping) Act 1975 deals with each of the concepts "export price", "normal value" and "material injury". Section 4A(1)(a) provides that, where goods have been exported to Australia otherwise than by the importer and have been purchased by the importer from the exporter in an arms length transaction, the "export price" of those goods is the price paid or payable for the goods by the importer, less any transportation or other costs arising after exportation. Separate provisions apply to cases where there is no arms length purchase. "Normal value" is defined by s.5(1) as being the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in arms length sales by the exporter, or if like goods are not so sold by the exporter, by other sellers of like goods. The section goes on to provide other methods of determining normal value in cases to which sub-s.(1) does not apply.
The Customs Tariff (Anti-Dumping) Act does not define "material injury to an Australian industry" but s.5A sets out criteria by which the existence of such an injury is to be determined. These criteria require consideration of volumes, trading patterns, prices, and the effect of the exportation of the goods to Australia both upon prices paid for goods made in Australia and upon Australian industry.
The Act provides for the imposition of two different types of special duties, which are payable in addition to any Customs duties otherwise payable (s.21). The first special duty, dumping duty, may be imposed under s.8 of the Act. Under sub-s.(1) the Minister may, by notice in the Gazette, declare that the section applies to any goods that have been exported to Australia where:

"(a) the amount of the export price of the goods is less than the amount of the normal value of those goods; and

(b) by reason thereof--

(i) material injury to an Australian industry has been or is being caused or is threatened or the establishment of an Australian industry has been or may be materially hindered; or

(ii) in a case where security has been taken under section 42 of the Customs Act in respect of any duty that may become payable on the goods under this section--material injury to an Australian industry would or might have been caused if the security had not been taken"

Subsection (2) empowers the Minister to apply the section to goods of a particular kind where he is satisfied, as to goods of that kind, that:

"(a) the amount of the export price of goods of that kind 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 goods of that kind that may be exported to Australia in the future may be less than the normal value of the goods; and

(b) by reason thereof, material injury to an Australian industry has been or is being caused or is threatened, or the establishment of an Australian industry has been or may be materially hindered"

Section 8(3) provides that dumping duty shall be charged, collected and paid on goods to which the section applies. Usually, the amount of the dumping duty is the difference between the normal value and the export price of the goods.

Section 10 deals with countervailing duties, payable, inter alia, upon goods exported to Australia in respect of which, in the country of origin or of export, there has been paid or granted, upon their production, manufacture, carriage or export, a subsidy, bounty or other form of financial assistance, thereby causing one of the effects referred to in s.8(1). Section 10(3) provides that there shall be charged, collected and paid on such goods a special duty known as a countervailing duty, the amount of which is specified by sub-ss.(4) and (5); commonly, an amount equal to the relevant financial assistance.
Section 13 of the Act imposes some limitations upon the goods to which ss.8 and 10 may be applied. Generally speaking, a notice may not be published applying either of those sections to goods that have already been entered for home consumption (s.13(1)); at the time of which entry the goods must already be in Australia: see Customs Act 1901 s.68. However, the succeeding sub-sections qualify this limitation. They include sub-s.(2) which permits the publication of notices under ss.8 and 10 concerning any goods in relation to which security has been taken under s.42 of the Customs Act in respect of duty payable under the appropriate section of the Customs Tariff (Anti-Dumping) Act, or in relation to which ACS had the right to require and take such security. This qualification is of some importance in the case of continuing importations during the period of a lengthy investigation as to whether particular goods are dumped or subsidized goods.

There is no provision for the taking of securities in the Customs Tariff (Anti-Dumping) Act itself. This is left to s.42 of the Customs Act, a statute which is incorporated, and to be read as one, with the Customs Tariff (Anti-Dumping) Act: see s.6 of the latter Act. Section 42 relevantly provides.

"42. (1) The Customs shall have the right to require and take securities for compliance with this Act, for compliance with conditions or requirements to which the importation or exportation of goods is subject and generally for the protection of the revenue of the Customs, and pending the giving of the required security in relation to any goods subject to the control of the Customs may refuse to deliver the goods or to give any authority under section 39 to deal with the goods.

(1A) ...

(1B) The right of the Customs under sub-section (1) to require and take a security includes the right to require and take securities in respect of any duty that may be payable on goods under the Customs Tariff

(Anti-Dumping) Act 1975.

(2) ...

(3) The rights of the Customs under this section may be exercised by a Collector on behalf of the Customs."

Subsection (1B) was added to the Act by s.4 of the Customs Securities (Anti-Dumping) Amendment Act 1982, the purpose being to resolve doubts -- which were probably unfounded: see Feltex Reidrubber Ltd v. Minister for Industry and Commerce (1983) 67 FLR 32 at pp.40-41 -- whether s.42, as it then stood, was sufficiently wide to enable the Customs to take securities in respect of duties arising under the Customs Tariff (Anti-Dumping) Act.
The learned trial judge took the view that the appellant's argument upon the first ground "breaks down at the threshold". He referred to s.42(1B) as giving ACS the right to require and take securities in respect of any duty that may be payable on goods under the Customs Tariff (Anti-Dumping) Act. His Honour saw nothing in s.42 which obliged the Customs, at the time of requiring security, to consider whether, as at a particular date, there was both dumping and material injury. He emphasised that s.42(1B) uses the words "may be payable" and held that, at the security stage, Customs was required to do no more than to form a judgment whether duty may be payable at a future date under the Customs Tariff (Anti-Dumping) Act.
This approach is challenged by counsel for the appellant. They submit that the power to take a security pursuant to s.42 "takes its colour" from the primary power to impose duties under the Customs Tariff (Anti-Dumping) Act, so that a security may only be required in a case where there is material before ACS upon each of the elements required for a valid Ministerial declaration under s.8 or s.10, as the case may be. In support of that submission they refer to a passage in the judgment of Lockhart J in Tasman Timber Ltd v. Minister for Industry and Commerce (1983) 67 FLR 12 at pp.27-29. The passage is lengthy but, as it is at the heart of the appellant's argument, we set it out in full:

"The s.42 power to take securities is supportable in this case only if it was exercised for the protection of the revenue of the customs. That is not a power at large. It is a power in aid of the ultimate imposition of countervailing duties. Those duties generally cannot be retroactive in respect of goods that have been entered for home consumption. Section 13 contains exceptions to this prima facie rule, including the important provision in s.13(2) that countervailing duty may be retroactive in respect of goods that have been entered for home consumption if security was taken under s.42 in respect of any countervailing duty that might become payable under s.10.

The taking of security under s.42 is an interim or provisional measure taken by the customs to protect the revenue against any ultimate imposition of countervailing duty in respect of goods entered for home consumption in the meantime. The Act does not itself define the circumstances in which security may be taken or the matters to which the customs must have regard in determining whether security should be taken, but it does not follow that the power is uncircumscribed or limitless. It must be exercised bona fide, reasonably and within the limits and for the objects intended by Parliament. The object is to protect the revenue arising from customs duty, but that does not support the imposition of a penalty or a discriminatory tax upon an importer. In R. v. Comptroller-General of Customs; Ex parte Woolworths Ltd (1935) 53 CLR 308 Starke J. said of s.42 of the Customs Act at p 341: 'Security certainly may be required for the protection of the revenue, but that does not warrant any forfeiture of the importer's money, or any penalty upon him. It is a new form of exaction, and would require explicit statutory authority. No such authority is found in the Customs Act, or elsewhere.'

The power to take security pursuant to s.42 must take its colour and content from the primary power to impose countervailing duties which it supports. Countervailing duties by their very nature are duties imposed on the importer of goods equal to the exporter's government subsidy to prevent the dumping of the goods. If a countervailing duty were greater than the subsidy it would be a penalty or forfeiture or an ordinary impost acting as a trade barrier. The necessity for a countervailing duty to equal or balance the exporter's government subsidy is not only inherent in the very nature of such a duty but is recognized expressly by the Act in s.10(4) which provides, so far as relevant: '... the countervailing duty in respect of goods is a sum equal to the amount of the subsidy, bounty, reduction or remission of freight or other financial assistance that has been paid or granted, directly or indirectly, upon the production, manufacture, carriage or export of the goods.'

When the department is considering the taking of security for the protection of the revenue it must have in mind that the security to be taken is in aid of any countervailing duty that may ultimately be imposed and that, relevantly to this case, a countervailing duty cannot be imposed unless the Minister is satisfied that a subsidy or other financial assistance has been paid or granted in the country of export upon the export of those goods and that by reason thereof material injury to an Australian industry would or might have been caused if the security had not been taken under s.42 ...

The department cannot be expected to prophesy the precise amount of any subsidy that the foreign Government has or may have paid or granted. But before requiring security it must address itself to the question whether a subsidy has been paid or granted and, if so, its amount or extent and whether by reason thereof material injury to the relevant Australian industry has been or may be caused. Some reasonable attempt must be made by the department to determine these matters before requiring security. The effect of requiring security can be far reaching. The imposition of countervailing duty and any earlier taking of security necessarily affects Australia's relations with the trading partner concerned and people engaged in trade both in Australia and the other country. Such actions here affect fiscal policy and private interests there. They are serious steps and must not be taken lightly."

In Tasman Timber Lockhart J was concerned with cash securities against countervailing duties but, as Sheppard J held in Feltex Reidrubber at p.45, the same principles must apply to the taking of cash securities against dumping duties. It follows, say counsel, that security may not be required in respect of dumping duty until ACS has addressed itself to the questions whether there has been dumping ie export to Australia at less than normal value in New Zealand, whether this dumping has caused material injury to the Australian industry and, if so, approximately what was the extent of the dumping margin.
Subject to one observation, we agree with the views expressed by Lockhart J which we have quoted. The observation is that we do not understand that, in using the words "address itself to the question", in the last quoted paragraph, Lockhart J meant to indicate that ACS must have reached any concluded view upon the matters which he specified. The situation is analogous to that which arises in other statutory contexts requiring the formation of preliminary views; for example, under s.155 of the Trade Practices Act 1974 -- as to which see W A Pines Pty Limited v. Bannerman (1980) 41 FLR 175 at pp.179, 188-189 -- and under s.165(4) of the Conciliation and Arbitration Act 1904 -- as to which see Ferguson v. Meat Industry Employees' Union (Toohey J, 5 November 1986, not reported), noting the test: "real not merely theoretical possibilities". The matters arising under the relevant section of the Customs Tariff (Anti-Dumping) Act must have been "addressed", that is considered, for the purpose of forming a preliminary opinion as to the possibility of duties becoming payable under that section; but no final conclusion need have been reached. As counsel for the second and third respondents said, s.42 confers a "wharfside power", one to be exercised at short notice in a working environment. To limit the power to take a cash security to a situation where all the investigation necessary to enable the Minister to make a declaration under the Customs Tariff (Anti-Dumping) Act has been completed would be largely to defeat its purpose. As Lockhart J himself pointed out in Tasman Timber at p.27, "s.42 may apply in respect of duty that is not necessarily payable when security is taken or that may never become payable".
This approach to s.42 is consistent with that taken in Feltex Reidrubber. In that case, at p.45, Sheppard J said that, at the security stage, "the court would be loath to interfere unless it were satisfied that there was no reasonable basis whatsoevever for the action which was proposed". In Tasman Timber Lockhart J held (at pp.29-30) that the facts pointed inescapably to the conclusion that the department had addressed itself to materially irrelevant considerations and had failed to consider materially relevant considerations.
Contemporaneity of dumping/subsidization and material injury
The question then, in the present appeal, is whether the appellant has made out a case that ACS did not consider the matters of dumping New Zealand frozen peas in Australia, existing or threatened material injury to the Australian industry and the causal connection between the two; not in a final or definitive way but so as to enable the formation of a genuine opinion that duties "may be payable" in relation to such goods under the Customs Tariff (Anti-Dumping) Act. An essential ingredient of any such opinion must be that there was reason to believe that relevant declarations might in the future be made under that Act.
By reason of the view he took upon the threshold question, the trial judge did not find it necessary to set out findings as to whether there was material before ACS, as at 21 August 1986, entitling it to believe that duties may be payable under the Customs Tariff (Anti-Dumping) Act. But we have considered the relevant material for the purpose of reaching a conclusion upon that question. In our opinion the material amply supported that belief.
It is common ground between all of the parties that, for several years before the date of the preliminary finding, the Australian market had been over-supplied with frozen peas. Demand had been contracting. There had been intense competition for orders between distributors, whether Australian or overseas-based. Wholesale prices in Australia had been virtually static. In real terms, having regard to inflation, they had been falling. Into that market Wattie moved, offering -- and selling -- frozen peas produced with the benefit of subsidies paid by the New Zealand government; so giving rise to the possibility of the imposition of countervailing duties if it was established that the effect of those subsidies was to cause or to threaten material injury to the Australian industry. Unless Wattie's sales were to be obtained entirely at the expense of other imports, without causing price suppression by Australian producers, in such an environment material injury must, of course, occur.
As was revealed by information gathered by ACS from retail chains, during the period July 1984 to January 1986 Wattie actively competed with the Australian industry in seeking contracts for the supply of frozen peas to the leading Australian food retailers. On numerous occasions it offered to sell at prices below the price currently being paid to the Australian producer who had previously supplied the particular retailer. Although it appears that the company was often not successful in capturing contracts with those retailers, the effect of its competition was to force the Australian suppliers further to depress their prices, to a point below the cost of production. And New Zealand imports did increase, as a proportion of total Australian sales. The information obtained by ACS clearly showed that, during this whole period, Wattie's activities had caused material injury to the Australian industry.
Counsel for the appellant emphasize that the only period during which there is material to support the view that Wattie was dumping on the Australian market was from September 1985 to January 1986. This is because the only information as to normal value obtained by ACS was in the form of Wattie's New Zealand price lists published respectively in September 1985 and on 20 January 1986. But, as is conceded, these lists establish the existence of dumping during that period. It follows that, during the five months immediately preceding the commencement of the enquiry, Wattie was causing material injury to the Australian industry by selling upon the Australian market frozen peas which were both subsidized and dumped.
There is no information as to normal value after January 1986 but ACS found that Australian prices remained depressed and that the Australian industry continued to suffer injury because of the competition of Wattie. No doubt it is correct to say that more information would have had to be obtained, and the position brought up to date, to enable the Minister to be satisfied under s.8(1) that particular later shipments had been, or were being, dumped. There may already have been enough material -- it is not necessary to determine the matter -- to enable the Minister to be satisfied that the case fell within sub-s.(2) of s.8. A mere threat of material injury is, of course, enough. It is sufficient to say that the information in the possession of ACS in August 1986 addressed all three relevant questions arising under s.8 -- dumping, material injury and the causal relationship between the two -- and all three questions arising under s.10 -- subsidization, material injury and the causal relationship -- and abundantly supported the belief that this was a case in which duties might become payable under one or both of those sections.
Natural justice: does it apply?
The second line of attack upon the preliminary finding and the decision to require cash securities is that Wattie was denied natural justice. The complaint has two aspects: a failure by ACS to disclose to Wattie the substance of the material to be relied upon by it in making the decision and a failure to embark upon specific inquiries suggested by Wattie during the course of the preliminary investigation. However, it is first necessary to deal with a submission -- put on behalf of the Comptroller-General -- that the requirements of natural justice do not apply to a decision to take cash securities under s.42. Three matters are put in support of this contention: the finding is a preliminary one only, not necessarily resulting in the imposition of duties by the Minister under the Customs Tariff (Anti-Dumping) Act; the power under s.42 may have to be exercised under circumstances of urgency; and the decision to require securities under s.42 is a decision excluded from review under the Administrative Decisions (Judicial Review) Act 1977.
We do not believe that these considerations, whether considered separately or cumulatively, justify the view that the decision to require securities is one from which the requirements of natural justice are excluded. The effect of such a decision is to occasion to an exporter to Australia, or to the Australian importer, the dilemma either of ceasing to bring in particular goods or to incur extra expense in so doing. We were informed by counsel for the Comptroller-General that, since the Tasman Timber case, the requirements in relation to securities have been modified. The evidence shows that the cost of providing securities in the present case is fairly modest but it is an additional business expense imposed upon the appellant by the decision of the Comptroller-General. That cost is not recoverable, whatever the Minister's decision. Furthermore, as counsel pointed out, the decision to require securities may introduce an uncertainty as to the ultimate position regarding particular goods which may itself be detrimental to the business of an exporter or importer.
In Twist v. Randwick Municipal Council (1976) 136 CLR 106 at pp.109-110 Barwick CJ described as "fundamental and universal", "the common law rule that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power". Those words have been quoted or echoed upon numerous occasions since that time in the High Court of Australia. In Kioa v. The Minister for Immigration and Ethnic Affairs (1985) 62 ALR 321 at p.346, Mason J said that the law had now developed to the point that it required "the clear manifestation of a contrary intention" to oust the duty to accord procedural fairness in the making of administrative decisions which affect rights, interests and legitimate expectations. A decision to require securities under s.42 is a decision to affect adversely the rights of persons associated with the importation of those goods. Unless the relevant statute, either expressly or by implication, excludes the common law principle, the decision must be regarded as one to which the requirements of natural justice apply.
It is true, as counsel submit, that a decision under s.42 may have to be made as a matter of urgency. But that circumstance does not exclude the duty to act in accordance with the rules of natural justice. The relationship between natural justice and urgent circumstances was discussed by Wilcox J in Marine Hull and Liability Insurance Co Ltd v. Hurford (1985) 10 FCR 234 at pp.240-242. Upon appeal the approach there indicated was adopted, at least implicitly, by all members of the Full Court: see 10 FCR 476. The approach is consistent with what was said in Kioa by Mason J at p.347, by Brennan J at p.370 and by Deane J at p.383. We adopt the analysis of Wilcox J and apply it to the facts of this case by saying that the rules of natural justice are not excluded merely by the fact that the power granted by s.42 may sometimes have to be exercised under circumstances of urgency. As was pointed out in Durayappah v. Fernando (1967) 2 AC 337, circumstances of urgency may affect the content of the rules in particular cases, especially in relation to the opportunity to be heard. But that is a different question and one having no relevance to the present case.

Schedule 1 of the Administrative Decisions (Judicial Review) Act was amended in 1982 by the addition of para.(p) excluding from review under that Act decisions under s.42 of the Customs Act to require and take securities in respect of duty that may be payable under the Customs Tariff (Anti-Dumping) Act. In Kioa two members of the High Court referred to the circumstance that the deportation decisions by the Minister under s.18 of the Migration Act 1958 were by then subject to review under the Administrative Decisions (Judicial Review) Act as a reason for departing from the decisions, in Salemi v. MacKellar (1977) 137 CLR 396 and R. v. MacKellar; Ex parte Ratu (1977) 137 CLR 461, that deportation decisions were not subject to the rules of natural justice: see per Mason J at p.347 and per Deane J at p.383. But the converse does not apply. The principles of natural justice were evolved long before the enactment of the Administrative Decisions (Judicial Review) Act and they have application to administrative decisions which do not fall within the terms of that Act. If it had been the intention of Parliament in 1982 to exclude the principles of natural justice in connection with a decision under s.42 of the Customs Act, it might have been expected to have done so directly; rather than relying upon an inference drawn from its having taken the more limited step of excluding review under one particular statute, the Administrative Decisions (Judicial Review) Act.
In our opinion it is not correct to say that the principles of natural justice are inapplicable to the decision made by the Comptroller-General on 21 August 1986. The two matters put by Wattie must be considered upon their merits.
Failure to disclose the material to be relied upon
As to the first matter, failure to disclose the substance of the material to be relied upon, we agree with what was said by the trial judge:

"... the argument proceeds upon the footing that the subject inquiry was, or was to be equated with, a decision to impose duty. As has been said, Customs had only embarked upon the preliminary inquiry whether provisional measures in the form of requiring securities were warranted. What does the duty to act fairly require in the present circumstances? (cf. Kioa v. Minister for Immigration and Ethnic Affairs (1985) 62 ALR 321 per Mason J. at p 347). In my opinion, to act fairly in the present case did not require Customs to warn the prosecutor of the material upon which it proposed to rely for the purpose of making a preliminary finding or even a summary of that material. Fairness would, in my view, be achieved if the prosecutor were informed that a complaint had been made that the prosecutor had engaged in activities in consequence of which duty may be imposed under the anti-dumping legislation and if the prosecutor were afforded an adequate opportunity to be heard on that question. The details of the history of the inquiry conducted by Customs which I have recounted indicate that the prosecutor was apprised of the possibility that securities may be required pursuant to s.42(1B) and the prosecutor was given every opportunity to make submissions, and did in fact make submissions, to Customs on that question. I do not think that, given the preliminary stage of proceedings and the provisional character of the measures involved, fairness required that Customs go further and give the prosecutor the benefit of the details suggested."

In fact ACS went further than to apprise Wattie of the nature of the allegations made against it and to provide an opportunity for it to respond. There were detailed discussions during the course of which ACS informed Wattie of the conclusion reached in its April 11 document about dumping during the period June 1984 to January 1985. It did not pass on all of the information it had obtained but this was understandable. Much of that information was obtained in commercial confidence. Even if there had been a general obligation to inform Wattie of the information obtained by ACS, the discharge of that obligation in the particular case would have to be balanced against the necessity to respect commercial confidence; compare the similar tension between discovery of relevant documents in litigation regarding anti-dumping decisions and commercial confidence which was discussed in Kanthal Australia Pty Limited v. Minister for Industry, Technology and Commerce (Wilcox J, 16 February 1987, not reported).
Failure to make the requested inquiries
In connection with the second matter, failure to make the requested inquiries, we have already mentioned that, in para.11.7 of the preliminary finding, ACS acknowledged that Wattie had requested it, on 20 June 1986, to make certain inquiries of major retailers in regard to frozen pea prices and that it had decided not to take that course at that stage. In his reasons for judgment the trial judge summarized the steps taken during the course of the investigation. It is necessary merely to pick up the main points in this summary. Immediately after publication of Australian Customs Notice No.86/14, steps were taken to inform both Wattie and members of the Australian industry of the fact of the inquiry. Senior officers of ACS interviewed representatives of interested parties, including Wattie. Submissions dated 25 February 1986 were received from a firm of government relations consultants representing Wattie in which were set out the company's response to the complaint and its denial of dumping. During March further information was received from both the Australian industry and from Wattie, including submissions from the latter dealing specifically with freight, export price, normal value, material injury and causal link. ACS officers put a number of Wattie's claims to the consultants representing Edgell. Those officers also made some independent inquiries about prices. On the basis of the information he had received, dealing with contracts made between June 1984 and the end of January 1986, Mr Ryan prepared a document dated 11 April 1986 in which he concluded that the claims of price suppression and material injury were justified.
Notwithstanding this conclusion, Mr Ryan did not immediately proceed to a preliminary finding. There appear to have been two main reasons for the delay. Firstly, it appears that some information -- particularly in regard to freight rates and subsidization in New Zealand -- was not yet to hand. Secondly, at about that time, the ambit of the inquiry was widened when the consultants for Edgell drew attention to the prices of bulk packs of frozen peas. During April and May investigations upon all these matters continued. Those investigations involved frequent contacts between ACS officers and the representatives of Wattie. On 30 May 1986 the solicitors for Wattie provided to Mr Ryan a comprehensive submission which was discussed at a meeting held on 3 June 1986 between ACS officers and representatives of Wattie, of its consultants and of its solicitors. A further submission was received from the consultants to Edgell on 19 June 1986. Upon the following day Wattie's consultants submitted a further submission listing retailers and distributors of frozen peas whom they urged ACS to approach. They enclosed a suggested questionnaire which included questions upon several matters, including prices -- going back to 1983 -- market shares, the reasons why particular orders had been lost and retailers' perception of the market. ACS did not take up this suggestion, apparently because the officers believed that they already had sufficient information on these matters.
The argument put upon this aspect of the matter is that, in a case where a person potentially affected by a decision requests the decision-maker to obtain information potentially relevant to the decision from another person, the dictates of natural justice require that the decision-maker seek such information before making a decision adverse to the person. Counsel called in aid a passage in the judgment of Wilcox J in Prasad v. Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at p.169 in which it was suggested that in determining whether a decision is unreasonable -- in the sense of being a decision which no reasonable person could have reached, upon the material before the decision-maker -- the court may be entitled to consider not only those facts which were known to the decision-maker, actually or constructively, but also such additional facts as the decision-maker would have learned but for any unreasonable conduct by him. The use of the word "constructively" in this passage seems to have been misunderstood. We read it, not as importing any equitable doctrine of constructive notice, but simply as a shorthand term to refer to matters which were not in fact within the personal knowledge of the decision-maker but which the decision-maker was deemed by law to have before him or her; as was the case, for example, in Minister for Aboriginal Affairs v. Peko Wallsend Limited (1986) 60 ALJR 560.
The matter being discussed in Prasad was unreasonableness, not natural justice. But, leaving that aside, the submission leaves out of account the limitations on the duty to make inquiries which Wilcox J set out in the following paragraph, at pp.169-170:

"A power is exercised in an improper manner if, upon the material before the decision-maker, it is a decision to which no reasonable person could come. Equally, it is exercised in an improper manner if the decision-maker makes his decision -- which perhaps in itself, reasonably reflects the material before him -- in a manner so devoid of any plausible justification that no reasonable person could have taken this course, for example by unreasonably failing to ascertain relevant facts which he knew to be readily available to him. The circumstances under which a decision will be invalid for failure to inquire are, I think, strictly limited. It is no part of the duty of the decision-maker to make the applicant's case for him. It is not enough that the court find that the sounder course would have been to make inquiries. But, in a case where it is obvious that material is readily available which is centrally relevant to the decision to be made, it seems to me that to proceed to a decision without making any attempt to obtain that information may properly be described as an exercise of the decision-making power in a manner so unreasonable that no reasonable person would have so exercised it."

It may be accepted that the matters referred to in the questionnaire suggested on behalf of Wattie were all relevant to the inquiry then being conducted by ACS. But no attempt has been made to argue that they were of central importance to the matter or that the answers would have been likely to reveal information not already available to ACS. By the time the suggestion was made ACS had already amassed a considerable amount of information, as a result of an intensive investigation extending over several months during which its officers had interviewed all interested parties, including Wattie, on several occasions. In the absence of any suggestion of bad faith, there is no reason to question the decision of ACS as to whether the suggested questionnaire would add to its stock of useful information. Wattie knew the questions being considered and had its own opportunity to put relevant material before ACS. Finality was itself a matter of some importance, especially bearing in mind that importations were occurring and that the inquiry was designed merely to reach a preliminary finding about securities and would not conclude the ultimate issue as to whether declarations should be made under the Customs Tariff (Anti-Dumping) Act. Whether considered under the procedural heading of natural justice or as a substantive matter going to reasonableness, the failure by ACS to make the further inquiries requested by Wattie does not vitiate the decision.
Amendment of the points of claim
At a late stage of the trial Wattie sought to amend its points of claim in order to make clear that it challenged the finding that there was a causal relationship between the subsidy paid to Wattie by the New Zealand government and material injury to the Australian industry. Leave was refused and, before us, Wattie seeks leave to appeal against that refusal. In so doing, Wattie argues that no amendment is really necessary because, upon their proper construction, the points of claim raise an issue upon this matter. It is said by counsel for the appellant that the trial was conducted upon this basis; although there is some dispute about that claim. Counsel for the appellant say that they seek the amendment merely for more abundant caution. They say that, if the amendment were granted, no additional evidence would be called by the appellant and no further argument would thereby become available to it.
We do not need to form any opinion upon the questions whether the trial judge erred, in the exercise of his discretion, in refusing the proposed amendment or whether any error was such as to warrant intervention by an appellate court: as to which see the principles referred to in Adam P Brown Male Fashions Proprietary Limited v. Philip Morris Incorporated (1981) 148 CLR 170 at p.177 and in the cases there cited. We have been content to read the points of claim as putting in issue the matter referred to by counsel and to deal upon their merits with all of the substantive matters raised by the appellant. Whether or not the amendment were granted, the appeal must fail.
The application for leave to amend will be refused and the appeal will be dismissed with costs.

[1987] FCA 381

21 JULY 1987