Pilkington (Australia) Ltd v The Anti-Dumping Authority & Anor

[1995] FCA 205

CATCHWORDS

ANTI-DUMPING - statutory construction.

Customs Act 1901 (Cth): s 269TAB(1)(a), (c)
Anti-Dumping Authority Act 1988 (Cth):
Customs Tariff (Anti-Dumping) Act 1975 (Cth)

Brutus v Cozens [1973] AC 854
New South Wales Associated Blue-Metal Quarries Limited v Federal Commissioner of Taxation (1956) 94 CLR 509
Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60
Neal v Department of Transport (1980) 3 ALD 97
Hope v Bathurst City Council (1980) 144 CLR 1
Australian National Railways Commission v Collector of Customs (SA) at 389 (Sheppard and Burchett JJ)
Collector of Customs v Pozzolanic Enterprises Pty Limited (1993) 43 FCR 280

PILKINGTON (AUSTRALIA) LIMITED v THE ANTI-DUMPING AUTHORITY & ORS
No. NG 672 of 1994
Lockhart, Lee and Beazley JJ
7 April 1995
Sydney

IN THE FEDERAL COURT OF AUSTRALIA )
  )    No. NG 672 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
  )
GENERAL DIVISION                 )

BETWEEN:  PILKINGTON (AUSTRALIA) LIMITED
  Appellant

AND:THE ANTI-DUMPING AUTHORITY

First Respondent

THE MINISTER OF STATE FOR SCIENCE AND SMALL BUSINESS

Second Respondent

MINUTES OF ORDER

CORAM:    LOCKHART, LEE AND BEAZLEY JJ
PLACE:    SYDNEY

DATE:     7 April 1995

THE COURT ORDERS THAT:

The appellant and the respondents file and serve written submissions in relation to the relief which ought to be granted by the Court by ........ ...... .

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

IN THE FEDERAL COURT OF AUSTRALIA )
  )    No. NG 672 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
  )
GENERAL DIVISION                  )

BETWEEN:  PILKINGTON (AUSTRALIA) LIMITED
  Appellant

AND:THE ANTI-DUMPING AUTHORITY

First Respondent

THE MINISTER OF STATE FOR SCIENCE AND SMALL BUSINESS

Second Respondent

CORAM:LOCKHART, LEE AND BEAZLEY JJ

PLACE:    SYDNEY
DATE:     7 April 1995

REASONS FOR JUDGMENT

LOCKHART AND BEAZLEY JJ:     This appeal, which is within a small compass, arises out of the determination, by the Anti-Dumping Authority (the ADA), of the export price of clear float glass (CFG) exported to Australia from Indonesia and the Peoples Republic of China.

The appellant submits that the ADA erred in law in the manner in which it applied s 269TAB(1)(a) and s 269TAB(1)(c) of the Customs Act 1901 (Cth) (the Act) to the determination of the export price of CFG exported from Indonesia and the Peoples Republic of China respectively.

Statutory scheme
Part XVB of the Act contains "Special Provisions Relating to Anti-Dumping Duties", which together with the Anti-Dumping Authority Act (1988) (Cth) and the Customs Tariff (Anti-Dumping) Act 1975 (Cth), forms the legislative scheme for the imposition of dumping duties upon goods exported to Australia. In general terms, dumping duty may be imposed on goods exported to Australia where the amount of the export price is less than the normal value of the goods and because of that, material injury to an Australian industry producing like goods has been or is being caused or threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered: s 269TG. Section 269TAB is the mechanism within Part XVB whereby export price is determined. Normal value, which for present purposes may be described as the determination of the price of goods in their home market, is determined in accordance with s 269TAC.

Background
The applicant is the sole manufacturer in Australia, and is also an importer, of CFG.  In December 1991, it applied to the Australian Customs Service (the ACS) for the publication of dumping and countervailing notices in respect of CFG exported to Australia.  On 11 May 1992 the ACS made a preliminary finding that there were sufficient grounds for the publication of a dumping duty notice in respect of CFG imported from, inter alia, Indonesia and the People's Republic of China.  In September 1992, the ADA made its report in which it recommended anti-dumping action against exports of CFG from a number of countries including Indonesia and the People's Republic of China. 

This appeal relates to a challenge to the ADA's determination under s 269TAB of the export price of CFG exported from those two countries. Relevantly s 269TAB provides:

"(1)For the purposes of this Part, the export price of any goods exported to Australia is:

(a)where:

(i)the goods have been exported to Australia otherwise than by the importer and have been purchased by the importer from the exporter (whether before or after exportation);  and

(ii)the purchase of the goods by the importer was an arms length transaction;

the price paid or payable for the goods by the importer, other than any part of that price that represents a charge in respect of the transport of the goods after exportation or in respect of any other matter arising after exportation;  or

...

(c)in any other case - the price that the Minister determines having regard to all the circumstances of the exportation."

CFG exported from Indonesia
The ADA found that Australian buyers of CFG placed orders with an Australian company, Overseas Glass Agencies Pty Limited (OGA).  OGA placed the orders with a company in Singapore, Asahi Glass Company Limited (Asahi Singapore).  Asahi Singapore then placed the orders with its partly owned subsidiary in Indonesia, PT Asahimas Flat Glass Co Limited (Asahimas Indonesia) which is the only manufacturer of CFG in Indonesia which exports the product to Australia.  Asahimas Indonesia exported the CFG direct to the Australian customer, but invoiced Asahi Singapore for the goods and freight with payment to be made within 15 days after the invoice date.  The usual form of invoice stated that the goods were "sold by order and for account and risk of" Asahi Singapore.  There was no regular pattern or system for invoicing Asahi Singapore for the goods.  Sometimes they were invoiced before and sometimes after they were shipped.  Asahimas Indonesia informed Asahi Singapore of the shipping date to Australia.

Asahi Singapore in turn invoiced OGA for the CFG.  The invoice to OGA included the price of the goods invoiced by Asahimas Indonesia as well as a charge for Asahi Singapore commission on the sale.  The usual form of invoice from Asahi Singapore to OGA bore the notation "sold by order and for account and risk of" OGA.   OGA then invoiced the Australian buyer.

The ADA treated Asahimas Indonesia as the exporter and OGA as the importer of the CFG and applied s 269TAB(1)(a) to calculate the export price of the goods. It was argued at the trial that OGA was not the "importer" of the CFG, but this argument failed before the trial Judge and was not pursued on appeal. There is no dispute that in the circumstances s 269TAB(1)(a) was applicable. However, there is a dispute as to the manner of its application to Asahi Singapore's commission charge. In calculating the export price, the ADA deducted this commission as "a charge in respect of any other matter [ie other than the transport of the goods after exportation] arising after exportation". 

The learned trial Judge (Heerey J) found that "exportation" meant "the physical departure of the goods from Indonesia" and that the commission was a charge in respect of a matter arising after exportation.  The trial Judge's reasoning in this regard was:

"It was after [the physical departure of the goods from Indonesia] that the Asahi Singapore commission arose.  It seems reasonable to infer that if the goods had not been exported from Indonesia, in the sense mentioned, no charge would have been payable to Asahi Singapore".

His Honour's construction of the meaning of "exportation" (in the sense of the physical departure of the goods from Indonesia) is not in dispute. However, it was submitted that his Honour should have found that in deducting the commission from the price paid or payable for the goods by the importer, the ADA erred in law in that it misapplied the test laid down by s 269TAB(1)(a) to the facts as found. The submission, distilled to its fundamental point, was that there was only one conclusion open to the ADA on the facts it found, namely, that the commission arose prior to, or at the latest, at the point of, exportation and that a failure to make that finding constituted an error of law.

The proper application of s 269TAB(1)(a) requires, first, the determination of the meaning of the phrase "arising after" in s 269TAB(1)(a) and then a determination of when the commission charge arose in relation to the time prescribed by the statutory test. The trial Judge did not address either of these matters.

The question of whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law: Brutus v Cozens [1973] AC 854. The ordinary meaning of a word or its non-legal technical meaning is a question of fact: New South Wales Associated Blue-Metal Quarries Limited v Federal Commissioner of Taxation (1956) 94 CLR 509 at 512; Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 78; Neal v Department of Transport (1980) 3 ALD 97 at 107-108. The question of whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law subject to the qualification stated by Kitto J in New South Wales Associated Blue-Metal Quarries Limited v Federal Commissioner of Taxation (1956) 94 CLR 309 in these terms:

...whether the material before the Court reasonably admits of different conclusions as to whether the appellant's operations fall within the ordinary meaning of the words [of the statute] so determined...is a question of law;  see also per Isaacs and Rich JJ in Australian Slate Quarries Limited v Federal Commissioner of Taxation (1923) 33 CLR 416 at 419.  If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion; and that is a question of fact: see per Williams J in the Broken Hill South case."

This statement was adopted by Mason J with whom Gibbs CJ,  Stephen, Murphy and Aickin JJ agreed in Hope v Bathurst City Council (1980) 144 CLR 1 at 7. See also Australian National Railways Commission v Collector of Customs (SA) (1985) 8 FCR 264 and Collector of Customs v Pozzolanic Enterprises Pty Limited (1993) 43 FCR 280, where the Full Court of this Court stated at 288:

"...when a statute uses words according to their ordinary meaning and the question is whether the facts as found fall within those words [then] [w]here it is reasonably open to hold that they do ...the question whether they do or not is one of fact...The corollary of this of course is that where only one conclusion is possible, the matter is a question of law."

The Macquarie Dictionary, 2nd ed, defines  "arise - (arose, arisen, arising)"  to mean "to come into being or action, originate, appear". The context in which s 269TAB(1)(a) appears does not indicate that the words "arising after" are used with other than their ordinary English meaning and that is the meaning they bear in s 269TAB(1)(a). Indeed, it is difficult to perceive circumstances where such words could be used other than in accordance with their ordinary meaning. Nothing needs to be said about the meaning of "after" which also bears its ordinary meaning.

The commission came into being or originated when orders were placed with Asahi Singapore. It is probable that the commercial structure of the sale comprised a composite transaction involving the placement of the order through Asahi Singapore. However, even if the sale is categorised as two distinct transactions with the service provided by Asahi Singapore to OGA being viewed as a distinct transaction, the result is no different. The transaction pre-dated the exportation of the goods. The only associated or relevant circumstances which arose after exportation were that sometimes the goods would be invoiced to Asahi Singapore after they had been shipped and Asahi Singapore forwarded its invoice to OGA after the goods had been shipped. However s 269TAB(1)(a) is not concerned with the processing of charges, but, as its express terms state, with charges in respect of matters "arising after exportation",  for example, loading charges, storage charges or holding charges.

Nor is the test under the subsection whether a charge would or would not have been made if a transaction had a different commercial structure, as his Honour appears to have considered relevant. Once it was found that OGA was the importer so that s 269TAB(1)(a) applied, the only task to be undertaken was that prescribed by the section, that is, to ascertain the price which was paid or payable for the goods by the importer, less charges in respect of any matter "arising after exportation".  The test under the section is a temporal one related to the point of exportation.  The expression "matters arising after exportation" can refer only to an event in relation to the goods.  Asahi Singapore's commission did not arise after exportation.  It arose on lodgment of the order with it by OGA.   The commission charged was intrinsically linked with OGA's order for the goods prior to exportation or prior to Asahi singapore's order for the goods from the exporter.   It follows from what we have said that as the application of the statute to the facts as found was susceptible to only one answer, namely, that the commission charge was not a matter arising after exportation.  The ADA, contrary to his Honour's finding, erred in law.  Accordingly, the appeal on the first issue should be allowed.

CFG exported from Peoples Republic of China
The facts found by the ADA in respect of CFG exported from the Peoples Republic of China were as follows.  There are several producers of CFG in China who export to Australia.  The largest exporter is Guandong Float Glass in Australia.  An Australian firm, George Fethers and Co (Fethers) acts as a selling agent for Guandong Float Glass.  Australian buyers place orders with Fethers which passes the orders to Guandong Float Glass.  Guandong Float Glass invoices the Australian customers direct at a landed duty paid into store price and purchasers make payments direct to Guandong Float Glass.  Fethers is responsible for clearing the GFC through Australian Customs and shipping it to customers but it does not purchase it.  Guandong Float Glass pays two commissions to Fethers.  Relevantly for the purposes of the appeal was the commission paid pursuant to clause 4.A.1 of a Sales Representative Agreement entered into between Guandong Float Glass and Fethers whereby Fethers was appointed as an independent sales representative in Australia for Guandong Float Glass' products.  Clause 4.A.1 provided:

"AS COMPLETE COMPENSATION FOR REPRESENTATIVE's services to an independent sales representative hereunder, GFG shall pay REPRESENTATIVE, on sales resulting from orders for Subject Products transmitted by REPRESENTATIVE and accepted by GFG a commission....  Payment shall be made by GFG to REPRESENTATIVE after receipt by GFG of the sales price from customers."

The rate of commission was a matter of confidential evidence.

The ADA found that Guandong Float Glass was both the exporter and importer of the goods and thus assessed export prices under s 269TAB(1)(c). There is no challenge to this aspect of the ADA's determination. The ADA deducted costs of overseas and Australian freight, marine insurance, customs duty, port and handling charges, the commission paid to Fethers and other costs incurred after exportation of the goods from the (landed duty-paid into-store) price (the ADA's report, para. 5.4.2).

Counsel for the appellant readily conceded that the Minister has a broad discretion under s 269TAB(1)(c), limited only by the requirement that regard be had "to all the circumstances of the exportation". However, he submitted that in this case, the ADA applied a test to the determination of export price under s 269TAB(1)(c) which was similar to the test under s 269TAB(1)(a). The test it applied required a determination of export price by reference to the point of exportation, so that charges incurred after exportation were to be deducted from the export price. The adoption of such a test as a matter of discretion was not challenged. However, it was submitted that, once having decided to adopt a specific test for the determination of export price, the same considerations arose as under s 269TAB(1)(a). Accordingly, it was submitted that the ADA erred in law because, on the test it applied, there was only one possible answer to the question whether the commission was a charge incurred after exportation - namely, that it was not.

It is possible that by its express reference to commission as a charge to be deducted from the landed (duty-paid into-store) price the ADA, in its discretion, determined that it was a charge which should be deducted, without characterising the charge as one "incurred after exportation". If this is so, the appellant's case must fail because, as was found by the trial judge, once s 269TAB(1)(c) applied, the Minister has a broad discretion.

However, if, as the appellant submitted, the ADA adopted a test for a category of charges which were to be deductible, namely, those "incurred after exportation", and included the commission as such a charge, the question arises whether the test adopted should take on the character of a statutory test and be subjected to the rigours of construction and application which apply to statutes.  We do not think that it should.  In the first place, when a word is used in a statute, its meaning is derived from and operation governed by its context and the nature, purpose and scope of the legislation.  There is no such context when a word is used in a descriptive way by a decision maker who is exercising a discretion.  Further, to apply the same principles as are applied to statutory interpretation would elevate the language used by the decision-maker to the status of a legislative enactment.  It also involves the unwarranted assumption that the language has been deliberately chosen after the same degree of forethought and analysis as occurs when parliamentary counsel draft legislation.  In a practical sense, to so treat the words of a decision-maker could also confine the discretion which is conferred by the section.  That does not mean that the determination made in the exercise of the discretion may not be challenged upon appropriate grounds, but that is a different issue and one which does not arise here.

The success of the appeal on this issue depended upon acceptance of the appellant's argument which we have rejected. The primary Judge held that once it was accepted that s 269TAB(1)(c) applied, it was a question of fact for the ADA to determine what items or charges were to be taken into account in the calculation of export price. That determination as such was not challenged. It follows that the appellant's appeal on the second issue also fails.

Form of relief
That leaves outstanding the orders which the Court ought to make. Counsel for the respondent submitted that even if there was an error in the application of s 269TAB, such error was immaterial. It was submitted that as the amount of the normal value for Indonesia also excluded any amount for commission, if the export price had not been calculated net of commission, a due allowance would be required in the normal value calculation. It was submitted that the deduction in the one case from export price and the addition in the other to the normal value would mean that the overall effect would be nil. Counsel for the appellant did not accept that this was necessarily so. However, he acceded to the respondent's application that, if the Court did uphold the appeal in whole or part, it was appropriate for the parties to make submissions on the form of any order after the reasons for judgment were available.

Accordingly, we propose to uphold the appeal in so far as it relates to the exports from Indonesia, but otherwise to dismiss the appeal. The Court shall not make these orders today but shall do so when it has considered the further submissions of the parties.

I certify that this and the preceding 12 pages
are a true copy of the Reasons for Judgment
of the Honourable Justices Lockhart and Beazley.

Associate:

Dated:    7 April

IN THE FEDERAL COURT    )
OF AUSTRALIA  )
NEW SOUTH WALES    )
DISTRICT REGISTRY  )
GENERAL DIVISION   )    NO.  NG 672 OF 1994

B E T W E E N:     PILKINGTON (AUSTRALIA) LIMITED

Appellant

and

THE ANTI-DUMPING AUTHORITY

First Respondent

and

THE MINISTER OF STATE FOR SCIENCE AND SMALL BUSINESS

Second Respondent

CORAM:  LOCKHART, LEE, BEAZLEY JJ.
DATE :  7 APRIL 1995
PLACE:  SYDNEY

REASONS FOR JUDGMENT

LEE J:

I have perused the draft reasons for judgment of Lockhart and Beazley JJ. and agree that the appeal should be allowed to the extent, and for the reasons, stated by them but consider it necessary to add some remarks in respect of the apparent construction of s.269TAB of the Customs Act 1901 ("the Act") applied by the Anti-Dumping Authority ("the Authority") in this matter.

The legislative scheme for the imposition of anti-dumping duties and the implementation of treaty obligations undertaken by Australia under the General Agreement on Tariffs and Trade has been discussed in numerous cases.  (See:  Tasman Timber Ltd. v. Minister for Industry and Commerce (1983) 46 A.L.R. 149 at 151-153; Swan Portland Cement Ltd. v. Minister for Small Business and Customs (1991) 28 F.C.R. 135 at 146; I.C.I. Australia Operations Pty. Ltd. v. Fraser (1992) 34 F.C.R. 564 at 568.) It has been a fertile field for litigation and this case is another grain in the harvest.

The role of the Authority in investigating and reporting upon complaints of dumping, is as set out in the legislative scheme and limited by the terms of that legislation unaided by consideration of economic theories which may have led to the measures taken to protect Australian industries against dumped goods. (See:  Hyster Australia Pty. Ltd. v. Anti-Dumping Authority (1993) 40 F.C.R. 364 per Hill J. at 372-373.)

In the present case, in respect of the goods manufactured in and exported from Indonesia, the Authority relied upon para.269TAB(1)(a) of the Act to determine the "export price" of those goods. That price could only be determined under that sub-section if the goods exported to Australia were purchased by an importer from an exporter in an arms-length transaction.

The importer, Overseas Glass Agencies Pty. Limited ("O.G.A."), purchased the goods by submitting purchase orders to Asahi Glass Company Ltd. ("Asahi") in Singapore.  Asahi is incorporated in Japan and carries on business in Singapore.  In its report the Authority described Asahi as follows:

"Asahi is a major Japanese glass producer.  It has shareholdings in glass producers in a number of Asian countries including some of the countries under reference.  These glass producers are all owned jointly with local companies.  Asahi does not hold a majority share in any of them."

One of the glass manufacturers in which Asahi has such a shareholding is P.T. Asahimas Flat Glass Co. Ltd. ("Asahimas"). According to its report the Authority concluded that Asahimas was the exporter of the goods under para.269TAB(1)(a) of the Act. Asahimas was the manufacturer of the goods and arranged for the goods to be exported from Indonesia to Australia pursuant to directions received in orders placed with it by Asahi. On those facts it could not be said that O.G.A. purchased the goods from Asahimas.

The only transaction in which O.G.A. participated as importer was the contract formed when its purchase orders were accepted by Asahi.  The purchase orders submitted by O.G.A. to Asahi stipulated the prices O.G.A. would pay for the goods and Asahi's subsequent invoices to O.G.A. were rendered in those amounts.

An entity which carries on business as a supplier of goods to an importer and which, in the conduct of that
business, contracts for a manufacturer to export the manufacturer's goods directly from the country of origin to the importer, may be the exporter of the goods for the purpose of para.269TAB(1)(a) of the Act. (See: Van Bael, Bellis, Anti-Dumping and other Trade Protection Laws of the EEC (2nd Ed.) (Oxfordshire: CCH Editions Limited, 1990) pp.83-84.)  If that were the true position in this case the question whether some part of the price charged by Asahi to O.G.A. was a "charge in respect of (a)...matter arising after exportation" could not arise.  In its report the Authority did not explain why the transactions entered into by O.G.A. and Asahi were not regarded as transactions made between an importer and an exporter.

Before his Honour, and on the hearing of this appeal, it was not submitted that the Authority erred in treating Asahimas as the exporter from which O.G.A. purchased the goods under para.269TAB(1)(a) of the Act. The issue put before the Court by the parties was whether the Authority erred in treating the profit recorded in the invoices rendered by Asahi as a "charge in respect of a matter arising after exportation".

If that question falls to be decided it must be decided in the manner stated by their Honours in their reasons.

With regard to the consequential orders and the submission by counsel that if the appeal succeeds the "normal value" of the goods exported from Indonesia would have to be recalculated under s.269TAC of the Act by taking into account the "Asahi commission", it is not obvious to me that the "commission" would have any bearing upon the normal value of the goods calculated by the Authority under s.269TAC of the Act. The Authority relied upon para.269TAC(2)(c) of the Act to construct a notional normal value for the goods based upon the information it had obtained as to the costs of production and of sale of the goods in Indonesia and as to an appropriate profit margin. The "commission" was, and remains, irrelevant to that calculation

Notwithstanding that reservation I agree with the orders proposed by their Honours.

I certify that the preceding five (5) pages are a true copy of the Reasons for Judgment of his Honour Justice Lee.

Associate:
         Date:

APPEARANCES

Counsel for the Applicant:       Mr Walker SC with Mr Speakman

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

Counsel for the Respondent:      Mr Robertson with Ms Abadee

Solicitors for the Respondent:    Australian Government Solicitor

Date of hearing:                 22 February 1995