Pratt, F. v Olliffe, K.J.

[1986] FCA 568

NOT FOR DISTRIBUTION

FIONA PRATT and HELOISE RACHEL PRATT

(trading as SOUTHERN PAPER CONVERTERS) Applicants

and

KENNETH JOSEPH OLLIFFE	(a delegate of
the Comptroller-General	of the Customs)

m:	NORTHROP J.
W:	27 OCTOBER 1986

B:? application dated 6 May 1936. the applicants

sought an order of review of a decision by the respondent

which is said to have been made on 13 February 1986. The

decision is one which arises out of the applicstion of Part

XVA of the Customs Act. That Part was Introduced into the

Customs Act in 1983 and m substance enables a person to seek

a reduction in the amount of duty t o be paid m goods

imported Into Australia in certain circumstances. It 1 s a

relatlvely new Part and has not yet been examined in any

detail b:? the Courts althouah a decision was given in the

Federal Court of Australia constituted by Mr. Justice Davies

on 1 3 Al,gust 1986 in the clse of Davies [:rain Ptv. Ltd. v.

Com?troiier 1;enerxl of Cust~ms ~n rel3tion to the

construction and applicscion	of tvo c.f the 3PI:tiOnS	containet
In Part .WA.

The substance of the decisior, in relation to which

the appllcatlon to renew 1s brought appears In a letter

dated 1 3 Febr-.lsr:J 1986 from a deleqate of the Comptroller

General to th? applicants. In that letter there is a

parauraph and I quote:-

"Ha-zinu considered all of the information submitted

so far. I advise that I am not sat~sfied that a

prima facie case for concesslon has been

established in these circumstances."

It ma:? vel1 be that no final decision ha3 been made and the

applicants could supply further information to the delegate seeking a decision in the light of that further informatlon and havins reuard to what has been said from the bar table,

may be encouraged to do so.

But nevertheless. the matter 1 s proceedina at the

moment on the basis that a decision has been made and in the

absence of further action being takm. that decision is final

in the sense that the concession souqht has not been uranted.

Follovinq that letter, reasons for the deci7ion were souqht under s.13 of the Administrative Decision? (Judicial Review)

A S 1977 ("the Judicial Review Act") and these have been

supplied and are dated 8 April 1986. It was followmq the

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re,:?ipt of those re.353r.5 t n a t the prezent application was

Issued In May of this :;ear.

The ?rounds Touqht to be relied upaon as set out in

the application are those contained in the followmq

paragraphs of s.5 sub-section (1) of the Judicial Review Act;

parauraph (a), that a breach of the rules of natural	] U S ~ L S ~
occurred in connection with the makinu of the decislon:

parauraph (e). that the makina of the decision was an

improper exercise of the power conferred by the enactment in

pursuance of which it was purported to be made and by

appljrlnq sub-section ( 2 ) , the essence of that complaint 1s

that he decision maker took into account irrelevant

cons~deratlons o r failed to take into axount relevant

considerations: and finally. parauraph ( 1 ) - tha t the deci:ion

was othervase contrary to lav. T h o ~ e paraaraphs are not

referred to in the application itself but they are apparent

from a readinq of the qrmnds set out in the application an2

also the particulars of those grounds	a3	set out in the
application.

At a directions hearina. directions by consent were

made that the applicants file and serve any affidavit or

affldavlts on which they intend to rely on or before 3 0 June

1986 and that the respondent file and serve any affidavit or

affidavits on which he intends to rely on or before 30 July

1336. In accordance with those dlrections. the applicants

have filed an affidavit by Timothy Patrick Burke who was the

then solicitor for the applicants. I n substance. the

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affidavit gives a history of what had occurred and exhibits a number of documents which are ln existence relatins to this

particular spplication under the C.lstr,mf Act. Paragraphs	10
and 11 however. contain clalms xhich can be summarised	a3

sayinu that f w the proper determination of the judicial

review, it will be necessary f o r the applicants to obtain

discovery and t3 interrogate the respondent in r5lation to

this matter. Eeing emboldened b? those twc parauraphs. the

respondent by notlce dated 5 Auuust notified the appllcants

that he would move the Court for an order that the

application be dismissed with costs on the grounds that it

failed to disclose a reasonable cause of action; was

frivolous and vexatious and was an	abuse of the process of
the Court.

The motion was taken under 0.20 r.2, but a

reference to 0.54 r.6 shows that in applying 0.20 r.2. to

aeplications under the Judiclal Review Act, the first ground

is to be read as "the appllcation fails to disclose a

reasonable basis for the application". The matter has

proceeded on the basls that the issue to be determined on

this motion is whether the application does disclose a

rea3onable basis for the applicatian itself.

Counsel for the applicants has made it quite clear

that for the purposes of this motion. he does not rely at all

on any of the matters set o u t in paragraphs 10 or 11 of the

affidavit of Mr. Burke but does indicate that if the matter does proceed. it may well be that he will apply for limited

discovery, for instance. of certair, document3 which are

referred to In the reason? for deci3lon by the respsndent but

which have not yet been ldentliled. :?e	parauraph i D r,f	the
reasons for leclslon.

Counsel for the respondent says that this 1s a

departure from what appears in the affidavit. It may well be

5 0 but at the present time there has been no motion by the

applicants for interrogatories or for discovery and the Court

proceeds to consider the motion on the material present17

before it and as adisclosed S:z th? application itself, the

statement of ressons given in support of the decision and

augmented. If necessary, by documentation which is annexed to

the affldavit of Mr. Burke.

Part XVA of the Customs Act. as has been said. is a

relatively new item of legislation and does contain in it

some difficult questions of construction. In substance, it

enables a person make application to the to

Comptroller-General for the concession. see s.269G, and under

s.269C. subject to Part XVA, and I quote:-

" ... where the (Comptroller-General), after

considering an application under section 269G for

the making of an order under this section in

respect of particular goods, is satisfied that-

(a)	goods servinu simllar functions to the
particular goods are not produced in

Australia: and

(b)	uoods serving similar functions to the
particular goods are not capable of being

produced in Australia by any person in

the normal courge of business,

the cComptroller-General) shall make a written

order. to be known as a Cxnmerclal Tarlff

Concession Order. deslarmg that C ~ P partlcular

~ocd3 are qocds t9 which 3 prezcribed item

specified in the order spplles. '

The ?ff?ct of such an order is that reduced tariff is paid.

Reference should be made also to s.269B of the Act

which contalns a number of definltlons and in partlcular

sub-sections ( 3 ) . (4). (5) and ( 7 ) . Sub-3ections ( 3 ) and ( 4 )

are of importance because they are concerned with the concept

of qoods taken to serve similar functions as is sub-sectlnn

( 5 ) and sub-section (71, but I do not need to get involved In

a detailed consideration of those provisions.

For present purposes it is cufflcient to say that

the applicant had made application in accordance with Part

XVA of the Customs Act in relation to q3ods beinu a special

type of paper-makinu machlne not previously manufactured in

Australia. The question is whether that machine is capable

of beinu produced in Australia by	any person in the normal
course of business.

In this case, there 13 a suggestlon that there is

In Australia such a person. namely, Johns Perry Industries

Pty. Limited ("Johns Perry") of Adelaide. After the

application had been made, there was a certain degree of

information sought by and on behalf of the respondent in

relation to whether Johns Perry could produce goods serving

slmilar functions to the goods to be imported by the

applicant. the substance of the pwjitlon bein? that Johns

Perry claims that it zould produce such a machine but would

rely on assistance from an merseas company but that, in any

event. it still came within the provisions of sub-section

269B15), but there would be certain conditions arising from

the construction and production of such a machine and would need to be produced pursuant to the speciflcatlons of the applicants. It was not a case where the machine itself is normally produced in Australia. They are not qoods which are

presently available. but they vould be aoods identical to

goods which would be import& provided the specifications are

the same, and provided also that some parts of the components

would need to be at least partly produced sutside Australia.

It i s not desirable that I should express any views on the substantive issue raised by the application. This is

an interlocutory order seekmg to bring to an end an

application properly commenced in this Court, and it is quite

clear that In considering any such application the Court only

makes an order bringing the proceedings to an end in what can

be descrlbed as exceptional circumstances such A S cases where

there is no arguable case. the claim is bad beyond

description and cannot possibly succeed. In fact. the Chief

Justice in the Australian Steel Case. 112 C.L.R.. uses a

number of expressions whch have been used i n the past to

describe the very hlgh onus cast upon a person seeking	an
order under 0.20 r.2 that an appllcation be dismissed.

In the present case. It seems to me that there are

a number of matters which call f o r consideratlsn DY the Court

and vhich 1u;t:fy the refusal of the rnot1r.n br?..?ht k y the

respondents. Firstly, the question has been rslsed. and it

appears to be a genuine question. as to the nature of the

function of the delegate of the Comptroller-General in the

exerclse of the powers conferred by Part W A . To some

extent, it is true that the onus. if that is the correct word

to describe what the applicant must do when he makes

application to satisfy the delegate that he comes with the

Part, is on the applicant but in this reqard reference is

made to the care with which that word must be used in

relation to matters of this kind. See McDonald v.

Director-General of Social Securltv (1984) 1 F.C.R. 354.

This is highiighted in the present case b:r the fact that the

deleuate made his own inquiries of Johns Perry, and in those

circumstances. after making those inquiries and obtaininu

information, is he then under an obligation to disclose that

information to the applicant in order to allow the applicant

to answer that information? This is put in the application

as a breach of the rules of natural justice in the absence of that being done. In this area of law it may be more accurate to describe it as a breach of administrative fairness. where

the Court is required to ensure that an administrator

exercising powers conferred upon him acts fairly insofar	as
the applicant is concerned.

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It 1s not absolutely clear whether there has been a

breach of the rules of natural ustice. to use the

termlnolouy contained in paraqrsph 5cl)taI of the Judicial

Revlew Act. but there is at least in my opinlon grounds for

saying that this is a matter which does require investigation

and of itself justifies the refusal to ?rant the motion.

particularly having regard to the high onus cast upon the

respondent in seeking orders of this kind. In addltion to

that, questions arise as to what are relevant matters for

consideration by the delegate in exercising those powers, and

what material must be considered particularly having regard

to the definitions in sub-sections 269B(3) and (4) of the

Customs Act, and the meanings to be given to sub-section (5)

of that section, and to the questlon of what goods are

capable of being produced in Australia in the normal course

of business by Johns Perry, in this case.

The statement of reasons given by the defendant has

set out a number of facts upon which the decision is based,

under the heading of the findings on materlal questions of

fact, and sets out the evidence upon which the decision was

based, at paragraph 19, and continues:-

"In addition I had access to documents supplied by

SPC. Johns Perry and Macbro. contained on

Departmental file No. C85/33869."

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The reasons for decision are then set out in paragraphs 20 to

25. and I do not repeat them. But. In my opinion. there is a

basis for the Court to investlgate those reasons for declslon

to see if in fact they are appropriate having regard to the

proper construction of the sections of the Act to which I

have referred and the facts of this particular case, which

are complex and difficult and are based upon a large number

of documents which would need to be considered in some detail

before any final view could be formed. For that reason also,

questions arise which do	merit a full investlgation by thi3
Court.

In these circumstances. I d o n o t express any views

as to whether in a case of this kind where goods are to	be
manufactured according to specificatlons they are to be

identical goods within the meaning of sub-section 269B(3) of

the Act or should come within sub-section ( 4 ) of that

section. I say that in view of the opinion expressed by Mr.

Justice Davies in the case already cited which deals with the

meaning to be given to sub-section ( 4 ) . In any event, a nice

question will arise in this case as to what are identlcal

goods for the purposes of the Act. havlng regard to the facts

of this case.

Accordingly. the motion is refused.

I certify that this and the rune p r e b g

pages are a copy of the reasons for

ju3-t herem of tl-e Mmurable

Mr. Juskce R.M. Northrop.

c

Associate -: _.. .c-t\-,* . . . . . . . c,?c& . . . . .. 21 October 1986

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