Kanthal Australia Pty Ltd v The Minister for Industry Techology & Commerce

Re: KANTHAL AUSTRALIA PTY LIMITED
And: THE MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE and
RAYMOND McMAHON
No. NSW G281 of 1987
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)

CATCHWORDS

Administrative Law - Customs - Dumping control - Determination of "export price" - Determination that purchase by importer not "an arms length transaction" - Determination that importer was "dumping" the imported goods - Competence of Customs officers to determine export price - No evidence as to authority to take that decision on behalf of Comptroller-General - Necessity for delegation of statutory discretionary power committed to Comptroller-General - Application of the presumption of regularity of official acts - Relationship between evidence of selling at a loss and a finding that importer not at arms length from exporter - Whether decision-maker misconstrued the relevant statutory provisions - Natural justice - Whether the Customs officers sufficiently identified to the applicant the subject matter of their inquiries - Bias - Whether decision-maker approached his task with actual bias towards applicant - Alleged failure to take into account a relevant consideration - Particular matter not put before decision-maker by applicant.

Customs Tariff (Anti-Dumping) Act 1975 ss.4, 4A, 8, 19.

Customs Administration Act s.14.

Customs Administration (Transitional Provisions and

Consequential Amendments) Act 1986 s.4.

Administrative Decisions (Judicial Review) Act 1977 ss.5, 13.

HEARING

SYDNEY

#DATE 23:11:1987

Counsel for the Applicant: Mr B.W. Walker

Solicitors for the Applicant: C.G. Gillis & Co

Counsel for the First Respondents: Mr G.S. Hosking; Solicitors

Solicitors for the Respondents: Australian Government Solicitors.

ORDER

1. The Application be dismissed.

2. The applicant pay to the respondents their costs of the proceeding.

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

JUDGE1

This proceeding challenges, under the Administrative Decisions (Judicial Review) Act 1977, the validity of certain decisions made under the Customs Tariff (Anti-Dumping) Act 1975.

The history of the proceeding

The applicant, Kanthal Australia Pty Limited imports from Sweden certain types of alloy steel chains and fittings. The imported goods are purchased from Gunnebo AB, a Swedish corporation. Although Kanthal is a subsidiary of another Swedish corporation, Kanthal Hoganas AB, the evidence is that there is no direct or indirect equity, financial or other interest between Kanthal on the one hand and Gunnebo on the other.
On 8 May 1985 the Minister for Industry, Technology and Commerce made a declaration under s.8(2) of the Customs Tariff (Anti-Dumping) Act concerning alloy steel chains and fittings. Section 8(2) provides in effect that, where the Minister is satisfied that goods of a particular kind have been, or may be, exported to Australia at an export price less than their normal value -- that is the home consumption price in the country of export -- and that, by reason thereof, material injury to an Australian industry has been, or may be, caused or the establishment of an Australian industry has been, or may be, materially hindered, the Minister may, by notice published in the Commonwealth of Australia Gazette, apply the provisions of s.8 to the goods. The effect of such an application is that thereafter a special Customs duty, known as dumping duty, becomes payable on the importation of such goods.
The effect of the Minister's declaration, of course, was to increase the amount of duty that might become payable by Kanthal upon the importation of the chains and fittings. Kanthal requested the Minister to consider revoking his declaration but he declined to do so. Kanthal then instituted a proceeding in this Court (NSW G.259 of 1986) challenging the Minister's decision. On 16 February 1987 I dealt with a preliminary aspect of that litigation, relating to discovery, but the principal proceeding has yet to be determined; the reason being the desire of the parties to take a later date than the earliest available in order to retain the counsel of their choice.
Section 8(4) of the Customs Tariff (Anti-Dumping) Act provides that, subject to a presently immaterial exception, the dumping duty payable in respect of goods to which s.8 applies "is a sum equal to the amount by which the amount of the export price of the goods is less than the amount of the normal value of the goods". It follows, of course, that the determination of the export price of the goods is an important element in the computation of the duty. The decisions challenged in this proceeding (NSW G.281 of 1987) relate to the determination of the export price of the goods.
Section 4A of the Act specifies the manner in which the export price of any goods shall be determined. It reads:

"4A. (1) For the purposes of this Act, 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;

(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);

(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 Comptroller determines having regard to all the circumstances of the exportation.

(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;

(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 Comptroller so directs, an amount calculated in accordance with such rate as the Comptroller 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 Comptroller 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 sub-sections, the export price of those goods shall be such amount as is determined by the Comptroller having regard to all relevant information.

(4) For the purposes of sub-section (3), the Comptroller may disregard any information that he 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."

The reference to "the Comptroller" is a reference to the Comptroller-General of Customs, who now has the general administration of the Act.
There is an issue between the present parties as to whether the determination of the export price of the types of alloy steel chains and fittings imported by the applicant should be made under para.(a) or para.(b) of s.4A(1). The applicant asserts that each of its purchases from Gunnebo has been "an arms length transaction"; and in this proceeding it challenges the decision made on behalf of the Comptroller-General to the contrary. In connection with that matter sub-ss.(2) and (3) of s.4 are important. They are as follow:

"(2) For the purposes of this Act, a purchase or sale of goods shall not be treated as an arms length transaction if--

(a) there is any consideration payable for or in respect of the goods other than their price;

(b) the price is influenced by a commercial or other relationship between the buyer, or an associate of the buyer, and the seller, or an associate of the seller; or

(c) in the opinion of the Comptroller, the buyer, or an associate of the buyer, will, directly or indirectly, be reimbursed, be compensated or otherwise receive a benefit for, or in respect of, the whole or any part of the price.

(3) Without limiting the generality of sub-section

(2), where--

(a) goods are exported to Australia otherwise than by the importer and are purchased by the importer from the exporter (whether before or after exportation) for a particular price; and

(b) the Comptroller is satisfied that the importer, whether directly or through an associate or associates, sells those goods in Australia (whether in the condition in which they were imported or otherwise) at a loss, the Comptroller may, for the purposes of paragraph

(2)(c), treat the sale of those goods at a loss as indicating that the importer or an associate of the importer will, directly or indirectly, be reimbursed, be compensated or otherwise receive a benefit for, or in respect of, the whole or a part of the price."

The present proceeding deals only with questions relating to the assessment of dumping duty. These questions are material only upon the assumption that the Minister's original declaration under s.8(4) is valid. As the validity of that assumption falls for determination in NSW G.259 of 1986, it would ordinarily have been appropriate to defer consideration of the present question untils it was first determined whether the declaration was valid. However, in July 1987 a practical problem arose in that Kanthal was expecting the arrival in Sydney of a vessel containing a large shipment of relevant goods. It anticipated that the Australian Customs Service ("ACS") would refuse to clear the goods until duty, as calculated by the Service, had been paid. Accordingly, Kanthal commenced this second proceeding to clarify the proper method of computation of dumping duty, assuming that it was payable at all. Under the circumstances, arrangements were made for a prompt hearing of this second matter but the purpose of these arrangements was largely defeated by the fact that, after the conclusion of the evidence on 25 August 1987, it took a total of two and a half months for counsel to complete the process of providing to the Court their written submissions. I understand that some agreement was reached between the parties as to the course to be taken in relation to shipments arriving prior to the decision of the Court.
The Application of Kanthal, as amended on 29 July 1987, seeks review of two separate decisions, which are said to be decisions of the Minister, the first respondent to this proceeding, or alternatively of Mr Raymond McMahon, Assistant Collector of Customs, Import Control, who is the second respondent.
The first decision is described as the decision "that sales by Gunnebo AB to the applicant of grade 80 alloy steel chain and fittings ('the goods') were sales to which the provisions of s.4A(1)(a) of the Customs Tariff (Anti-Dumping) Act 1975 ('the Act') did not apply ('the arms length decision')". The second decision is described as the decision "that, for the purposes of the Act, the normal value of the goods exceeded the export price of the goods ('the dumping decision')".
It is not clear that either of these decisions was taken by or on behalf of the Minister or Mr McMahon. But it is clear that decisions to those effects were made within ACS on behalf of the Comptroller-General. No point has been taken by the respondents as to any lack of proper parties. Had they done so, an appropriate amendment would almost certainly have been allowed. In the circumstances, therefore, it is proper to deal with the matters raised by the applicant upon their merits, treating the Minister as being an appropriate respondent to answer for any deficiencies in the decisions taken on behalf of the Comptroller-General.
The Amended Application specified six grounds of attack upon the decisions but in counsel's final submission only four grounds were pressed: that the arms length decision was taken by a person who had no authority to take the decision; that the arms length decision, and accordingly the dumping decision, was based upon an incorrect interpretation of s.4(3) of the Act; that the decisions were vitiated by the denial of natural justice and actual bias; and failure to take into account relevant considerations.

The background facts
Before turning to those grounds, it is desirable to refer to some of the events which preceded the relevant decisions.
On 23 May 1985 the Australian Embassy in Brussels notified Kanthal's supplier, Gunnebo AB, of the normal values which had been determined by the Minister for the relevant goods, if imported into Australia from Sweden. Those values have since remained unchanged. In January 1986 Kanthal recommenced the importation of goods the subject of the Minister's declaration, allegedly at prices equal to the determined normal values. Kanthal resold those goods in Australia, allegedly always at prices above the normal values.
During the latter half of 1985 ACS commenced a review of the normal values which had been notified in May. Kanthal retained a firm of trade consultants, ITC (Australia), to assist it in connection with that review. During 1986 Mr G N Day, of that firm, exchanged correspondence with the Minister, and with officers of ACS. The main topic of that correspondence was the Service's review of normal values, which review was relevant to the outstanding request to the Minister to revoke the declaration of 8 May 1985. However, on 30 September 1986, Mr P.W. English, Assistant Comptroller-General, wrote to Mr Day asking him to arrange an appointment for Mr John Tatnell, Chief Inspector, Dumping Special Projects, to meet with Kanthal. Mr English said that this review would "cover importations and sales of the goods under reference in Australia by Kanthal during the last financial year for which audited accounts and financial statements are available and in the period from the end of the audited period to 30 August 1986". Mr Day acknowledged this letter on 3 October, stating that the matters raised had been referred to Kanthal.
Mr Day obviously understood that the matter referred to in the letter of 30 September related to export prices. On 13 October he again wrote to Mr English. His letter commenced: "Further to our letter of 3 October 1986 concerning the review of export prices ...". The letter went on to suggest a meeting in November, rather than in October as had been requested by Mr English, and to refer to the need to obtain the return of some documents which were in the possession of the solicitors in connection with the earlier litigation. Mr English acknowledged this letter on 24 October 1986; he also describing it as "concerning the review of export prices". Also on 13 October, Mr Day wrote a letter to the Minister requesting revocation of the dumping deduction.
On 12 November 1986 Mr Day wrote again to the Minister. He made a number of complaints, including bias by ACS towards Kanthal's commercial interests and denial of natural justice. He complained of delays in the ACS review of normal values and he commented that some 18 months had elapsed since the initial request for review "and the issue is still being successfully deferred by Customs on the pretext that 'no decision can be made on these matters until the export price of the chain and fittings from Sweden can be established'".
By letter dated 14 November, the Minister responded to Mr Day's letter to him of 13 October. The letter included the following:

"The Customs Tariff (Anti-Dumping) Act 1975 provides for revocation of a notice in cases where I am satisfied that (if the notice were not in force) I would not currently be authorised under the Act to cause the notice to be published.

The Australian industry has claimed that the Swedish chain and fittings imported by your client are being sold in the Australian market at less than the full costs of importing and resale. The Australian industry has claimed that this alleged 'sales dumping' is causing the continuation of material injury to the industry. An officer of the ACS is currently attempting to make a mutually convenient appointment with your client to enable the export price of these goods to be established.

I am advised that in these circumstances, the ACS is not in a position to make recommendations to me on your request for revocation of the notice or on the appropriate level for normal values. The ACS will not be able to do so until the information necessary for the determination of export price is provided, and until such information is assessed in conjunction with updated information to be obtained from the Australian industry."

By a letter dated 25 November 1986 to the Assistant Comptroller-General, Mr Day nominated 10 December 1986 as a suitable date for a meeting between Mr L. Woodend, General Manager of Kanthal, and Mr Tatnell. He requested information prior to the meeting as to the allegations of sales dumping made to ACS.
Mr English responded to this letter on 28 November, confirming the meeting arrangements and continuing:

"In response to your request for details of the allegations of sales dumping, I have attached copies of the documents relating to those allegations submitted to the A.C.S. by PWB. The only PWB documents held by the A.C.S. which are considered relevant and which are not attached are documents relating to price negotiations with their customers on which PWB have specifically requested confidential treatment. At the request of PWB a paragraph identifying customers by name has also been deleted from the facsimile of 25 November 1986.

The purpose of the visit to your client is to enable the determination of export price as provided for in the Customs Tariff

(Anti-Dumping) Act 1975. Thus the matter in question is not solely related to your client's 'current pricing structure' as suggested in your letter."

Mr English went on to itemise the information that would be required "for the establishment of export price under Section 4A of the Customs Tariff (Anti-Dumping) Act 1975". Later in the letter he referred to "the primary purpose of the visit" as being "to enable determination of export price".
On 10 December 1986 Mr Tatnell and Mr J Howard, another ACS officer, attended the meeting with Mr Woodend. Mr Day was also present. The meeting extended over some hours. Both Mr Tatnell and Mr Howard took notes. According to those gentlemen, Mr Tatnell told Mr Woodend and Mr Day that they were attending to "establish", or to "enable the determination of", export prices.
Mr Tatnell sought information from Mr Woodend, working from a check list which he produced in evidence. When he requested evidence as to the "into store" cost of the goods, Mr Woodend produced some documents. Mr Tatnell made some test checks, from which he concluded that the worksheets did not represent the true "into store" cost of the goods. He thought that the worksheets understated the Australian dollar costs of the goods. An exchange rate of seven Swedish krona to one Australian dollar had apparently been used; whereas the market rate at that time was about 4.5Skr:$A1. This understatement was exacerbated by the fact that duty, shipping and landing costs were allocated upon the basis of the understated figures. Mr Tatnell asked whether the worksheets had been prepared for their visit. Mr Woodend said that they had been prepared recently and that the handwritten source documents had been destroyed. According to Mr Tatnell, Mr Woodend said during conversation that it was the practice of Kanthal to deduct a rebate from the Gunnebo account "and pay the amount based on the agreed seven krona exchange rate".
The reference to an agreed rate of seven krona was apparently intended, and understood, to be a reference to an agreement made between Gunnebo and Kanthal in June 1985, shortly after the original declaration by the Minister. This agreement is recorded in a letter from Mr A E Berg of Gunnebo to Mr Woodend dated 11 June 1985 as follows:

"I was extremely disappointed to hear that we lost our case on the dumping charge and that now normal values have been emposed (sic) on Chain and Fittings. We must take immediate action to challange (sic) the decision something which I believe you are already doing.

In the meantime, however, we must have stability on the Australian market place. I would like to propose the following after our telephone conversation last evening.

1. Kanthal will continue to purchase Chain and Fittings which are subject to the dumping duty.

2. For a period of two years Gunnebo will invoice items as per normal value. The exchange rate for these items will be 7 Swedish Crowns = 1 Australian Dollar.

3. In return for this set exchange rate, Kanthal must guarantee, over the two year period, to purchase $1,000,000 of Chain and Fittings from Gunnebo. The details can be discussed later."

The two year period referred to in that letter had not, of course, expired by the date of the visit of Mr Tatnell and Mr Howard. The period has since expired and the evidence is that Kanthal failed to purchase $1,000,000 worth of chains and fittings during the two years. In the event, Mr Tatnell was not able to reach a firm conclusion as to what exchange rate had been made to apply to particular transactions; and the evidence does not enable me to reach any finding about that matter.
At the time of the meeting Mr Woodend handed to the Customs officer a letter from his company, dated 9 December, responding to allegations of sales dumping which had been made by an Australian manufacturer, Pitt Waddell Bennett Chains Limited. The officers told him that they would take this letter away and give consideration to the matters which it contained. On 14 January 1987 Mr Howard wrote to Mr Woodend, referring to the letter and stating a view that the claims made by Pitt Waddell Bennett Chains "were justified and did warrant further investigation". He said that ACS now had a number of matters to consider. He promised to write again when those matters had been resolved.
On 11 February 1987 Mr Tatnell signed a document -- dated 4 February 1987 -- entitled "Export Price Determination - Certain Steel Chain and Fittings ex Sweden". The document read:

"The following export prices have been determined following inquiries with Kanthal Australia Pty Limited for certain chain and fittings ex Sweden.

Export prices are determined for 3 periods: 1 May 1985 to 31 December 1985; 1 January 1986 to 30 June 1986 and the period after 1 July 1986.

Shipments in each of these periods will require separate calculations of dumping duty payable.

Confidential Instructions will be issued for current determined export price to enable collection of dumping duty on future shipments."

Attached to the document was a schedule setting out prices, expressed in Australian dollars, in respect of each of numerous items in relation to each of the three periods mentioned. The schedule referred to s.4A(1)(b) of the Act. A further attachment consisted of a document signed by Mr Tatnell, as delegate to the Minister and pursuant to s.4A(2)(c) of the Act, directing that the rate of profit on sales of alloy chain and fittings from Sweden by Kanthal after May 1985 be 6.45% of the net sales price in Australia. There were also attached three schedules, each being a determination of costs under s.4(3A)(b) in respect of the various items for one of the three periods referred to in the Export Price Determination.
Following the decisions made by Mr Tatnell, further work was carried on in ACS relating to normal value. On 22 June 1987 an officer of ACS wrote to customs agents acting for Kanthal in relation to various shipments of relevant goods. The letter stated that "it has been determined that these goods are subject to the application of Dumping Duties". The agents were informed that a demand had been made upon Kanthal for short levy of duty; the relevant sum being $155,024.98.
The decision referred to in this letter is the decision challenged in the present proceedings. Kanthal suggests that the decision embodies the two separate decisions which it has described as "the arms length decision" and "the dumping decision". This analysis is not challenged. Neither do the respondents deny that both of these decisions are decisions made under the Customs Tariff (Anti-Dumping) Act and so are decisions reviewable in this proceeding.
Kanthal sought from the Minister and from the Acting Comptroller-General a statement pursuant to s.13 of the Administrative Decisions (Judicial Review) Act in relation to the decisions embodied in the letter. The statement was furnished on their behalf by Mr Tatnell. The Findings on Material Questions of Fact referred to the declaration in May 1985, the subsequent complaint by Pitt Waddell Bennett Chains and the purchases by Kanthal from Sweden. In para.5 Mr Tatnell referred to the visit of 10 December:

"On 10 December 1986, Mr John Howard, an officer of the Dumping Division of the Australian Customs Service and I attended Kanthal's premises at Daking Street, North Parramatta. We had discussions with Mr Len Woodend of Kanthal and Mr Graeme Day of I.T.C.

(Australia). Mr Woodend also showed us documents relating to the goods as listed below:

(i) A letter to the Assistant Comptroller-General, Dumping Policy and Administration Branch dated 7.12.86

(ii) Kanthal price lists relating to the sale of the goods in Australia as follows: . Price list marked '1984 Old Price List'; and

. Price List effective 1 August 1986

(iii) Documents relating to the purchase, importation and clearance of the goods in the period from the date of the Gazette Notice to the date of the visit to Kanthal's premises, being: . entries for home consumption . dissection sheets . dissection sheet x ref and message sheets

. commercial invoices . customs agents invoices . bills of lading . wharf and handling receipts . documents prepared by Kanthal purported to represent the into-store costs of the goods, subsequently described as rebate calculation sheets; and . air waybill

(iv) Statement of account No. 8877, Westpac Banking Corporation, Sydney Office

(v) handwitten documents prepared by Kanthal described as being

. rebate summary sheets . stock records of deliveries (sales) . 1985 payments (expenses of chain division)

. general company expenses - 1985 . interest expenses - 1985

(vi) Copy of a telefax to Graeme Day, ITC dated 17 November 1986 from Mr Len Woodend, Kanthal, relating to chain purchases by Kanthal

(vii) Kanthal document titled 'Key Figures' said to be a financial statement for Kanthal relating to the 9 month period ending 30 September 1986

(viii) audited financial accounts and statements for 1985 for Kanthal

(ix) commercial invoices relating to sales of the goods in Australia by Kanthal

(x) a copy of a letter from Gunnebo AB to Kanthal dated 11 June 1985; and

(xi) stock records for the goods."

Mr Tatnell then referred to a report received by him from Brussels in July 1986 and, in para.7 of the statement, to the making, between 10 December and 17 December 1986, of certain calculations and notes from which he prepared a report entitled "Sales Route Inquiries - Kanthal Australia Pty Ltd". That document, which is in evidence, sets out in detail the information obtained by Mr Tatnell and Mr Howard. It contains comments by Mr Tatnell, which include his belief that some of the information he was given on 10 December was false. Certain figures are analysed by Mr Tatnell so as to show that most of the subject lines are being resold by Kanthal below cost.
Under the heading "The Reasons for the Decision" in the s.13 statement Mr Tatnell said this.

"11. There was a current Notice pursuant to section 8 of the Customs Tariff

(Anti-Dumping) Act 1975 in relation to the goods.

12. I received complaints from the major Australian manufacturer of the goods.

13. Following consideration of the material and information detailed at paragraphs 5 and 6 I was satisfied, for the purposes of sub-section 4(3) of the Act, that the goods were being sold by Kanthal at a loss in Australia. In being so satisfied I had considered, for the purposes of sub-section 4(3A), that there was little likelihood of those losses being recovered within a reasonable time. In view of the abovementioned sale at a loss I formed the necessary opinion for the purposes of paragraph 4(2)(c) of the Act and accordingly the purchase or sale of the goods as between Gunnebo AB and Kanthal was not an arms length transaction.

14. In view of the above I calculated the Export Price of the goods in accordance with paragraph 4A(1)(b) of the Act after calculating the prescribed deductions pursuant to sub-section 4A(2) of the Act.

I turn to the applicant's grounds of attack upon the decision.
The competence of the decision: Mr Tatnell's authority

The first ground affects only the "arms length decision"; but that was, of course, an essential ingredient in the "dumping decision". Until an export price had been determined it would be impossible to say that dumping -- that is export to Australia at an export price less than normal value -- had occurred.
The applicant's point is that the determination of export prices which was made on 11 February 1987 was made by Mr Tatnell, and not by the Comptroller-General. In his evidence Mr Tatnell said that he personally made these determinations and that the Comptroller-General was not involved in the matter in any way. Section 14(1) of the Customs Administration Act 1985 provides that the Comptroller-General may, by writing signed by him, delegate to any person all or any of his powers or functions.
There was no evidence, one way or the other, as to whether any powers had been delegated by the Comptroller-General to Mr Tatnell. According to some of the documents executed on 11 February 1987, certain powers had been delegated by the Minister to Mr Tatnell. Neither their date nor their content was proved. The Minister had power, under s.19 of the Customs Tariff (Anti-Dumping) Act, to delegate his powers and functions under that Act, except certain powers not presently material. Section 4 of the Customs Administration (Transitional Provisions and Consequential Amendments) Act 1986 continued in force, after the transfer of powers and functions from the Minister to the Comptroller-General, instruments executed by the Minister under his former powers.
The respondents submit that it does not matter whether or not Mr Tatnell had an appropriate delegation; that, as an officer of ACS, it was competent for him to carry out duties entrusted by the statute to his superior, the Comptroller-General. It is said that functions are frequently given to Ministers or other officers in the knowledge that it will be impossible for them personally to discharge all those functions; the intent being that, in the performance of the functions, they shall be assisted by officers who will, in practice, frequently make important decisions.
No doubt this is factually correct. It may readily be accepted that Parliament assumes and intends that, in the day to day administration of their portfolios, Ministers will have the assistance of officers of their departments. This assistance must extend to the taking of some decisions on their behalf. Similarly, where functions are committed by statute to a particular officer within the public service, such as the Comptroller-General of Customs. But I think that it goes too far to say that, in a case where a statute invests in a Minister or a designated officer the power to affect the legal position of a citizen by a decision which depends upon the formation of an opinion, or the exercise of a discretion, by that Minister or officer, the decision may be taken by any person working under the general control of that Minister or officer. This is particularly the case in respect of legislation which makes specific provision for the delegation of powers and functions. If the respondents' broader submission is correct, such provisions would often have little purpose. It seems to me unlikely that it would often be thought appropriate to delegate functions and powers, like those contained in the Customs Tariff (Anti-Dumping) Act, to persons not within ACS.
However, the submission put on behalf of the applicant assumes that, in fact, there was no relevant delegation to Mr Tatnell. This was a matter which was not investigated at the trial. I have summarized such evidence as there is upon the matter. It is insufficient to allow any conclusion to be drawn, one way or the other. The applicant's submissions in reply accept that this is so; but they seem to assume that, under such circumstances, the applicant must succeed on this point. I do not agree. The Court is concerned with the validity of an official act. In this area the presumption of regularity applies. In default of any reason to conclude to the contrary, the presumption is that a person purporting to perform an official act has the necessary authority to do so. In McLean Bros & Rigg Ltd v Grice (1906) 4 Pt.1 CLR 835 at p.850 Griffith CJ quoted, and applied to the proceedings of a company, the statement of principle made by Brewer J, of the United States Supreme Court, in Knox County v Ninth National Bank (1892) 147 US 91 at p.97: "It is a rule of very general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act". In the present case, in the view I take, Mr Tatnell could lawfully make a determination under s.4(2) of the Customs Tariff (Anti-Dumping) Act only if there had been performance of a prior act, the granting to him of an appropriate delegation. In the absence of evidence to suggest to the contrary, the view must be taken that there was such a delegation. The first ground of attack upon the decision fails.

Error of law: the construction of s.4(3)
The second ground relied upon by the applicant is an allegation that Mr Tatnell misconstrued s.4(3) of the Act. Counsel for the applicant submits that s.4(3) does not create any irrebutable presumption; it is not a deeming provision. The sub-section, he says, is intended merely to enable the Comptroller-General to treat the fact that the Australian importer resells the goods at a loss as indicative of the fact that the importer will receive some benefit in respect of the price. This submission is not disputed on behalf of the respondents. It is obviously correct.
The real question, in regard to this aspect of the case, is whether Mr Tatnell approached the formation of his opinion upon any other basis. Reliance is placed upon the following evidence:

Q. "... is this how you acted in this case: having undertaken an exercise for which you gathered information on 10 December to determine whether Kanthal was selling at a loss, and having decided that Kanthal was selling at a loss, you regarded the factual matters as concluded, and that as a matter of law thereafter you should proceed on the basis that the transaction between Gunnebo and Kanthal was not arms length?"

A. "That is correct."

Q. "It is the fact of reimbursement compensation or benefit that matters rather than the possibility is not that right?"

A. "No not necessarily under this part of the Act. There is no need for the fact to be proven in my contention."

Q. "Did you form any opinion as to the actual arms length nature of the relationship between Kanthal and Gunnebo?"

A. "Yes, the actual arms length nature I did, yes."

Q. "Was than an opinion you formed by coming to the conclusion that Kanthal was selling at a loss?"

A. "That is correct."

Q. "And nothing more?"

A. "That is correct."

This evidence must be placed in its context. Upon a number of occasions in his evidence Mr Tatnell used language which indicated a correct understanding of the role of s.4(3) as set out above. Never at any time did he suggest, as an abstract proposition, that a finding of reselling at a loss compelled the Minister to form the opinion referred to in s.4(2)(c).

The first of the three questions relied upon by the applicant directed Mr Tatnell's attention to this particular case. There is no doubt that Mr Tatnell reached the conclusion, as a result of considering the information given to him on 10 December 1986, that Kanthal was selling at a loss. It is equally clear that he relied upon that conclusion, and nothing more, to form the opinion referred to under s.4(2)(c). I think that this is all that he was saying in the first of the three passages I have quoted. It is true that the words "as a matter of law" appear in the question, to which Mr Tatnell assented, but it would be unreasonable to take from this an indication that Mr Tatnell was saying that, as a matter of law, whenever reselling at a loss occurred the Comptroller-General must form an opinion under s.4(2)(c). To take that course would be to overlook that his attention was being directed to the particular occasion.
Immediately prior to the second passage relied upon by counsel, Mr Tatnell assented to the proposition that "it is not the agreement, it is the payments that matter". He was then asked, in effect, whether it was the fact of payment that mattered rather than the possibility. He obviously understood that question to be directed to proof of the fact, as is made clear in the second sentence of his answer. So understood, the answer is not wrong. The whole point of s.4(3) is to allow an inference of payment to be drawn from a particular fact: reselling at a loss.
As to the third passage, it is enough to say that this is merely descriptive of Mr Tatnell's process of reasoning upon this occasion. Subject to the other grounds relied upon in this proceeding, he was entitled by s.4(3) to adopt that process.
In his written submissions counsel for the applicants put this proposition:>

"The respondents should have ensured that the formation of the Comptroller-General's s.4(2)(b) opinion, for the purposes of the s.4A(1) finding of arms-length or not, should have been made on the basis of real evidence beyond a mere indication supplied by the sale of the goods under reference at a loss in Australia. The provision of s.4(3) of the Act do not dispense the Comptroller-General from proceeding to form an opinion which can actually be expressed as one concerning the existence or not of the relevant reimbursement, compensation or other benefit in respect of the price.">

> I read this submission as intending to refer to s.4(2)(c), rather than to s.4(2)(b). But it goes too far. If it were necessary, for the formation of an opinion under s.4(2)(c), to have "real evidence beyond a mere indication supplied by the sale of the goods under reference at a loss in Australia", there would be no point in s.4(3). It is true, as counsel submits, that the ultimate question for the Comptroller-General is that referred to in s.4(2)(c). But s.4(3) allows him to base that opinion upon the fact of reselling at a loss.> > Natural justice and bias>

The third ground relied upon by the applicant was that the decision was that Mr Tatnell denied the applicant natural justice and was biased. These are, in reality, two separate grounds, success upon either of which would be sufficient for the applicant to make out its case of invalidity.
In a preliminary finding, which had been published by ACS in 1984, doubt had been expressed upon the question whether there was an arms length relationship between Kanthal and Gunnebo; but in a report issued in April 1985 ACS had expressed itself as satisfied upon that matter. As counsel for the applicant submits, these circumstances give special force to the proposition that the Comptroller-General was under an obligation to hear Kanthal before reaching a conclusion that it was, in fact, not at arms length from Gunnebo, so that the provisions of s.4A(1)(b) applied to the case.
Counsel for the respondents does not dispute the existence of an obligation to afford natural justice to Kanthal. He contends that this obligation was in fact discharged.
In support of his submission that the Comptroller-General failed to accord natural justice to his client, counsel for the applicant relies particularly upon the evidence relating to the meeting of 10 December. Rightly, in my view, he sees this meeting as being decisive in the thinking of Mr Tatnell. Counsel says that the evidence is significant not only in relation to what happened at the meeting, but also in connection with what did not happen. He refers, in particular, to the failure of the ACS officers to address themselves at that meeting to the truth or otherwise of the allegations made against Kanthal by Pitt Waddell Bennett Chains.
Four things are clear about this meeting. First, as a matter of deliberate decision, Mr Tatnell and Mr Howard did not raise the Pitt Waddell Bennett Chains allegations at that meeting. Indeed, when those matters were referred to by Mr Woodend and Mr Day, in the context of the delivery by them of the letter of 9 December, the ACS officers expressly indicated that they did not wish to deal with those matters at that time but that they would prefer to concentrate that day upon the determination of export price. Secondly, Mr Woodend and Mr Day were aware, since the meeting was first mooted, that its purpose was to enable the ACS officers to address the matter of export price. Thirdly, there is no suggestion that either Mr Tatnell or Mr Howard declined to receive any information, or to hear any submission, which either Mr Woodend or Mr Day might care to put before them upon the matter of export price. Finally, neither of the ACS officers, in terms, raised with the Kanthal representatives the question whether the company was at arms length from Gunnebo. The reason, according to Mr Tatnell, was that when he went to the meeting he had no preconception as to whether there was an arms length relationship or not. His purpose was "to obtain information from Kanthal to enable me to make a decision on whether there was an arms length relationship or not".
I think that the issue about natural justice depends upon a determination of the question whether the ACS officers were bound, before reaching the conclusion that there was no arms length relationship, to raise this particular issue with Mr Woodend and Mr Day. I do not think that they were. Mr Woodend and Mr Day knew that the purpose of the meeting was to enable the ACS officers to gather information which would assist them in determining the matter of export price. Mr Woodend and Mr Day, especially Mr Day, were aware of the terms of the Act and, in particular, that s.4A provided for alternative methods of fixing the export price. The critical factor in determining whether the first alternative -- that provided by para.(a) -- should be used was whether the parties were at arms length. In the determination of export price, this is always a potential matter for consideration. It is true that, some eight months earlier, an ACS report had expressed satisfaction upon that score. But this did not conclude the matter. There was always a chance that, in the light of additional information, a contrary conclusion would be reached before the final decision was made. There is no suggestion that, on 10 December, either of the ACS officers indicated that he was of the view that Kanthal and Gunnebo were at arms length, or otherwise lulled Mr Woodend or Mr Day into a belief that it was unnecessary for Kanthal to put forward information or submissions on that matter. On the contrary, the two ACS officers put Mr Woodend through a searching examination which included questions concerning Kanthal's relationship with Gunnebo, going back to 1980, his agreement about the use of a seven krona exchange rate, the arrangements between the two companies regarding freight and rebates, the procedures relating to the payment by Kanthal for goods supplied by Gunnebo and the delays in making payments. In the light of these questions it would be naive to doubt that Mr Woodend and Mr Day well appreciated that Mr Tatnell and Mr Howard were giving consideration to the arms length question. They had a full opportunity to put whatever they wished upon that matter. It was not encumbent upon Mr Tatnell to inform Mr Woodend and Mr Day of the way in which his mind was working or to put to them any tentative views he had formed. It was encumbent upon him to direct their attention to the subject matter and to hear what they had to say. This he did. In my view there was no failure to observe the dictates of natural justice.
As to bias, I agree with counsel for the respondents that there is no evidence that Mr Tatnell was biased against Kanthal. There were certainly matters troubling him before he attended the meeting of 10 December; and plainly he was not impressed with the quality of some of the information he was given during that meeting. But there is no reason to doubt his evidence that he approached his task without any preconception and with a readiness to make up his mind by reference to the information he obtained. In view of the allegation of bias, it is relevant to say that, during his evidence, I formed a favourable impression of Mr Tatnell. He was cross-examined, with vigour and at length, but he remained a fair and careful witness. I detected no animosity in him to Kanthal or to its representatives, and there was never any occasion upon which I felt difficulty in accepting what Mr Tatnell was saying. Further reflection upon the case, in the light of counsel's submissions, has not changed my impression.

Failure to take into account a relevant consideration
The final ground argued is that the respondents failed to take into account a relevant consideration, namely the effect of existing inventory on the comparison of export prices and domestic selling prices and the desirability of Kanthal being able to offer a complete range, including the goods under reference. (The same matter is attempted to be put another way by saying that the respondents took into account an irrelevant consideration: the domestic selling price at the time of the arrival of the relevant goods into Australia. However, that complaint is clearly untenable. Section 4(3) makes it clear that selling price is relevant to the formation of an opinion under s.4(2)(c) and thus to the question whether the importer and exporter were at arms length.)
In his evidence Mr Woodend referred to some things which he would have said to Mr Tatnell and Mr Howard if he had been told that they considered that Kanthal was selling goods at a loss. These things related to the necessity for Kanthal to present to customers a range of products, the cost of which is worked out upon the basis of averaging the costs incurred for particular items. Counsel concedes that, upon the evidence, none of these things were, in fact, said to the ACS officers; but he contends that they were intrinsically relevant to the decision which the Comptroller-General had to make and that Mr Tatnell should, therefore, have obtained information on these matters before reaching the conclusion that the parties were not at arms length.
Counsel for the respondent does not dispute that the matter referred to by Mr Woodend, if it had been put before the ACS officers, would have been a matter which Mr Tatnell would have been bound to take into account. Depending upon the information he obtained, consideration of the effect of averaging particular costs over a range of products might have precluded him from drawing an inference, which might otherwise have been available, arising from the fact that particular goods were being sold at a loss. But, although they were bound to listen to Kanthal's case, Mr Tatnell and Mr Howard were not bound to make that case. Notwithstanding that Mr Woodend and Mr Day knew the purpose of the visit of 10 December, they chose not to put that information before ACS, either upon that day or subsequently. Under those circumstances, they cannot properly contend that the decisions which were made were bad in law because of the failure of the respondents to take that information into consideration. This fourth ground also fails.
There is no doubt that the applicant is unhappy about the factual conclusions reached by Mr Tatnell, and which form the basis of the decisions now complained of. Whether those conclusions are justified is a matter about which I have formed no view. The facts are for the Comptroller-General, and his officers, to determine. In the absence of an attack upon the decision upon the ground of unreasonableness, in the sense of that term used in s.5(2)(g) of the Administrative Decisions (Judicial Review) Act, they are not matters for the Court. And no such ground has been advanced.
In my opinion none of the grounds of challenge to the subject decisions is made out. The Application should be dismissed with costs.

[1987] FCA 648

23 NOVEMBER 1987