Stemcor Pty Ltd and Chief Executive Officer of Customs
[2007] AATA 1347
•22 May 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1347
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2007/0021
GENERAL ADMINISTRATIVE DIVISION ) Re STEMCOR PTY LTD Applicant
And
CHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent
DECISION
Tribunal The Hon RNJ Purvis AM, QC, Deputy President Date22 May 2007
PlaceSydney
Decision
The Tribunal is satisfied on the basis of the material set forth in these reasons that BlueScope Steel Limited should be made a party to these proceedings. The Tribunal orders that BlueScope Steel Limited be a party to the present application.
..................[sgd].........................
The Hon RNJ Purvis AM, QC Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – application to be joined as a party to review of decision to reject application for tariff concession order – applicant and party requesting joinder both producers of flat rolled steel – potential producer of substitutable goods – whether interests of party requesting joinder are affected – joined as a party in earlier application – interest other than as a member of the public established – joinder in interest of a fair hearing and presentation of best evidence – joinder application granted
The Customs Act 1901, ss 269C, 269E, 269F, 269FA, 269H, 273GA
Administrative Appeals Tribunal Act 1975, ss 27, 30, 31
Re Control Investment Pty Ltd and Others v Australian Broadcasting Tribunal No 1 (1980) 3 ALD 74
The Federal Court in US Tobacco Co v Minister For Consumer Affairs (1988) 20 FCR 520
REASONS FOR DECISION
22 May 2007 The Hon RNJ Purvis AM, QC, Deputy President application
1. This is an application by BlueScope Steel Limited (“BlueScope”) to be joined as a Respondent in an application to the Tribunal for review of a decision made by the Chief Executive Officer of Customs (“the Respondent”) to reject an application for a Tariff Concession Order (“TCO”) in relation to flat rolled steal. In its application for the TCO Stemcor Pty Limited (“Stemcor”) stated:
Bluescope Steel Limited is the sole Australian producer of this product. Total production is put to subsidiary company’s own use to produce brand name Colourbond.
Product is not available in the normal course of business.
See covering correspondences.
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Refer to previous application TC0407546 and statement during AAT Hearing of 13 November 2006 by representative of Bluescope Steel that this product is not available.
2. Pursuant to the provisions of section 269H(1) of the Customs Act 1901 (“the Act”) the application was rejected on the grounds that:
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· I am aware of a producer in Australia of substitutable goods (269H(1)(d)); and
· I am not satisfied that the applicant has established to the satisfaction of the CEO that there are reasonable grounds for asserting that no substitutable goods are produced in Australia in the ordinary course of business (269H(1)(c)).
Customs awareness of such a producer arises from the material prepared for the Administrative Appeals Tribunal (AAT) proceedings of 13 November 2006 (No N2005/627).
It is noted that the description of goods that were the subject of the AAT proceedings and the description in the current application differ regarding width and thickness. These additional specifications may cause the TCO to be described in other than generic terms. However this potential breach of subsection 269SJ(1)(aa) was not pursued because these additional specifications have not changed the use to which the goods are put or are capable of being put i.e. “base material for continuous paint line applications”.
In considering whether the goods are substitutable, the sole consideration is whether the goods produced in Australia can be put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the TCO application can be put.
In the AAT proceedings, on the basis of information in its possession, Customs had formed the view that the goods produced by Bluescope Steel Limited (Bluescope) were substitutable. Stemcor Australia Pty Limited (Stemcor) also agreed that the goods were substitutable (AAT transcript – page 5, 5th paragraph). In the current TCO application Stemcor again stated that Bluescope is the sole Australian producer of this product (Form B443 – section 5).
In relation to the goods being produced in Australia, in the AAT proceedings, on the basis of information in its possession, Customs had formed the view that Bluescope’s goods were produced in Australia. Stemcor also agreed that the goods were produced in Australia (AAT transcript – page 5, 5th paragraph). In the current TCO application Stemcor again stated that Bluescope is the sole Australian producer of this product (Form B443 – section 5).
Stemcor contends (Form B443 – section 5) that substitutable goods are not produced by Bluescope in the ordinary course of business. Customs notes that “ordinary course of business” is omitted from subsection 269SH(1)(d).
Even if “ordinary course of business” were to be considered a requisite condition for subsection 269SH(1)(d), on the basis of information possessed by Customs viz. Bluescope’s invoices showing sales to third parties in the 2 years prior to the current application being lodged, Customs is satisfied that Bluescope’s goods were produced in the ordinary course of business.
Customs also considers that Stemcor has not, as required by section 269FA, established to the satisfaction of the CEO that there are reasonable grounds for asserting that no substitutable goods are produced in Australia in the ordinary course of business. Stemcor simply states that the product is not available in the ordinary course of business, but does not provide any documentary evidence of its attempts to source the goods from Bluescope. Instead Stemcor refers to Bluescope’s statements in AAT proceedings. However, Customs does not consider that Bluescope made any statement at the AAT to the effect that substitutable goods were not available in the ordinary course of business.
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3. In the “Statement of Findings on Material Questions of Fact and Reasons for Decision” the Respondent inter alia stated:
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10. In making the decision the subject of this review, I considered that there was a producer in Australia of substitutable goods on the basis of:
(a) The previous decision by Customs to refuse to make a TCO for the goods;
(b) That an internal review had affirmed the decision to refuse to make a TCO;
(c) That after consultation with its legal representatives, Customs had been prepared to proceed to the AAT on this matter;
(d) The statement made by the applicant’s representative in the AAT proceedings of 13 November 2006, specifically that the goods produced by Bluescope were substitutable and were produced in Australia;
(e) The statement made by the applicant’s representative in the Application for a TCO dated 14 November 2006, specifically that Bluescope is the sole Australian producer of this product i.e. of the goods the subject of the TCO application; and
(f) That whilst the description of goods the subject of the TCO application had changed slightly, the goods remained substitutable.
11. I noted the statement in the TCO application that Bluescope’s total production is used by a Bluescope subsidiary company to produce Colourbond i.e. substitutable goods are not available in the ordinary course of business. However, I considered that:
(a) Production ‘in the ordinary course of business’ is not a requisite condition for subsection 269H(1)(d); and
(b) Even if ‘in the ordinary course of business’ were to be considered a requisite condition, that condition had been met as evidenced by Bluescope invoices showing sales to third parties in the 2 years prior to the TCO application being lodged (T10).
12. Section 269FA states that it is the responsibility of the TCO applicant to establish, to the satisfaction of the CEO, that on the basis of all information the applicant has or can reasonably be expected to have and all inquires that the applicant has made or can reasonably be expected to make, that there are reasonable grounds for asserting that the application meets the core criteria i.e. that on the day the application was lodged, no substitutable goods are produced in Australia in the ordinary course of business.
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4. In seeking to have the decision of the Respondent set aside Stemcor maintains that pursuant to section 273GA(1)(ma) of the Act the Respondent’s decision is “erroneously based, in that, the decision maker has incorrectly interpreted the meaning and intention of the legislation”.
5. In a letter of the 14 November 2006 accompanying the present TCO application it was stated:
This application is subsequent to our previous submission under your reference TC 0407546 and the consequence of the Administrative Appeals Tribunal hearing of 13 November 2006.
We seek that the information contained in the documentation to the above mentioned matters be regarded as the prescribed information for the purpose of this application.
It is further requested that consideration be given to the specific imprecise tenor of previous application with regard to the word “minimum” as referring to the width. Such was deemed by the tribunal to include all widths in excess of 938mm and therefore, rendered the application inappropriate.
During the course of the tribunal hearing the representative for Bluescope Steel advised that his client supplied many sizes (widths) less than and more than 938mm but, not that particular size. The evidence during even the brief proceedings demonstrated that alternative sizes are not substitutable and that the size 938mm is required as commerce demands.
6. In its “Statement of Issues” the Applicant set forth in enumerated paragraphs what it considered to be the issues for review, namely:
1. Whether the applicant’s application for the making of a Tariff Concession Order (“TCO”) to cover certain imported goods (“the goods”) is in satisfaction of the core criteria set down in s.269C of the Customs Act 1901 (Cth) (“the Act”).
2. Whether “substitutable goods” to the goods, as defined in s.269B(1) of the Act are produced in Australia in “the ordinary course of business”, as defined in s.269E(1) of the Act.
3. Whether s.269H(1)(d) of the Act precludes the respondent from having regard to the core criteria requiring that production of the “substitutable goods” is “in the ordinary course of business”.
4. Whether evidence of sale of goods not meeting the description of the TCO goods is evidence of production of “substitutable goods … in the ordinary course of business”.
5. Having regard to the above, whether the respondent was correct in its decision to reject the application for TCO in respect of the goods pursuant to the applicant’s application.
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7. In a letter of 9 March 2007 sent on behalf of Stemcor and addressed to the Tribunal it was stated that:
… the matter under review relates solely to a technical issue relevant to the respondent’s ability to reject the applicant’s application and does not extend to any decision pertaining to the making of a TCO, we respectively disagree with the application by Bluescope Steel Ltd to be joined as a party in these proceedings.
8. The latter mentioned short statement is clearly inconsistent with the Applicant’s “Statement of Issues” provided by it on about 12 March 2007.
9. At the hearing of the joinder application this contention was elaborated upon as is detailed later in these reasons. BlueScope in its joinder application maintains that:
The matter under review relates to steel that was previously subject to TCO Application TC 0407546 and AAT matter N2005/627. The Customs decision to reject new TC Application TC 0618569 we believe is based on their contention that a Local Manufacturer of substitutable goods exists and that Bluescope Steel Ltd manufactures those goods in the normal course of business. As was the case in TC 0407546 Bluescope Steel Ltd would be adversely affected by the granting of a TCO. We believe that the goods described in TC 0618569 are identical to those covered in TC 0407546. Section 269H(d) of the Customs Act states that Customs cannot accept a TCO Application where it is aware of a local manufacturer of substitutable goods and we believe material submitted in the course of Application TC 0407546 forms basis of that decision.”
10. It was submitted by counsel appearing on behalf of BlueScope that the issues before the Tribunal in the present application include whether there are reasonable grounds for believing that Stemcor has discharged the responsibility referred to in section 269FA of the Act and whether the Respondent was aware of any producer in Australia of substitutable goods. Further, whether on the basis of the material that was known to the Respondent or available at the time the application was rejected, should the TCO application have been rejected pursuant to the provisions of section 269H of the Act.
11. The joinder application is not opposed, and indeed is supported by the Respondent.
relevant legislative provisions
12.The relevant provisions of the Act are:
269B Interpretation
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Substitutable goods, in respect of goods the subject of a TCO application or of a TCO, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application or of the TCO can be put.
269C Interpretation-core criteria
For the purposes of this Part, a TCO application is taken to meet the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
269E Interpretation-the ordinary course of business
(1) For the purposes of this Part, other than section 269Q, goods (other than made-to-order capital equipment) that are substitutable goods in relation to goods the subject of a TCO application are taken to be produced in Australia in the ordinary course of business if:
(a) they have been produced in Australia in the 2 years before the application was lodged; or
(b) they have been produced, and are held in stock, in Australia; or
(c) they are produced in Australia on an intermittent basis and have been so produced in the 5 years before the application was lodged;
and a producer in Australia is prepared to accept an order to supply them.
269FA The applicant’s obligation
It is the responsibility of an applicant for a TCO to establish, to the satisfaction of the CEO, that, on the basis of:
(a)all information that the applicant has, or can reasonably be expected to have; and
(b)all inquiries that the applicant has made, or can reasonably be expected to make;
there are reasonable grounds for asserting that the application meets the core criteria.
269H Screening the application
(1)Not later than 28 days after a TCO application is lodged, the CEO must:
(a) if he or she is satisfied:
(i) that the application complies with section 269F; and
(ii) that, having regard to the information disclosed in the application and to the particulars of the inquiries made by the applicant, there are reasonable grounds for believing that the applicant has discharged the responsibility referred to in section 269FA; and
(b) if he or she is not aware of any producer in Australia of substitutable goods;
by notice in writing given to the applicant, inform the applicant that the application is accepted as a valid application; and
(c) if he or she is not so satisfied; or
(d) if he or she is aware of such a producer;
by notice in writing given to the applicant, inform the applicant that the application is rejected and of the reasons for the rejection.
13.The Administrative Appeals Tribunal Act 1975 as amended provides:
27 Persons who may apply to Tribunal:
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(2) An organization or association of persons, whether incorporated or not, shall be taken to have interests that are affected by a decision if the decision relates to a matter included in the objects or purposes of the organization or association.
30 Parties to proceeding before Tribunal:
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(1A) Where an application has been made by a person to the Tribunal for a review of a decision, any other person whose interests are affected by the decision may apply, in writing, to the Tribunal to be made a party to the proceeding, and the Tribunal may, in its discretion, by order, make that person a party to the proceeding.
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31 Tribunal to determine persons whose interests are affected by decision:
(1) Where it is necessary for the purposes of this Act to decide whether the interests of a person are affected by a decision, that matter shall be decided by the Tribunal and, if the Tribunal decides that the interests of a person are affected by a decision, the decision of the Tribunal is conclusive.
14. The “interests which are affected” within the meaning of the above statutory provision refer to interests which those bodies have in the subject matter of the decision other than as members of the public (see Re Control Investment Pty Ltd and Others v Australian Broadcasting Tribunal No 1 (1980) 3 ALD 74). It is submitted on behalf of BlueScope that its interests may be affected by the decision in either a beneficial or adverse way. The Federal Court in US Tobacco Co v Minister For Consumer Affairs (1988) 20 FCR 520 held that a person seeking to be joined as a party must be able to identify a relevant interest or demonstrate a genuine affectation of an interest which attaches to that person. The nature of the interest required in a particular case will be influenced by the subject matter and context of the decision under review. As was indicated in Re Control Investment Pty Ltd (supra) at pages 80 to 81, once the interests of a person are seen to be relevantly affected there remains a discretion as to whether joinder is to be ordered, such discretion to be exercised in accordance with a duty to provide a fair hearing and deal with the review application as expeditiously as possible.
15. A question the Tribunal is to ask itself is thus, whether there is any reason to suspect that in making an order for joinder, the Tribunal’s ability to provide a fair hearing and deal with the matter expeditiously would be adversely affected. Indeed it may be that representations on behalf of BlueScope will be beneficial in this regard. That is, the Tribunal is to determine whether BlueScope does have a relevant interest that may be affected by the decision to be made in the application and that it is in the interests of ensuring as best it can, that the correct or preferable decision is in due course made, that BlueScope be made a party to the proceedings and be enabled to adduce such relevant evidence as may assist in arriving at such a decision.
BlueScope contentions in support of it becoming a party to the hearing
16. On the basis of the factual situation and the issues raised, BlueScope maintains that its interest is one expressly contemplated by the provisions of the Administrative Appeals Tribunal Act.
17. The goods identified in the present application are, with the exception of dimension, identical to the goods the subject of the earlier 2005 application. It is maintained by BlueScope that if made a party to the present application, it will endeavour to establish that there is no material difference between the goods described in each of the applications.
18. BlueScope has, it is submitted, a relevant interest in supporting the decision made by the Respondent because it is a producer in Australia of substitutable goods and was a party to the earlier proceedings. It is maintained that the making of a TCO necessarily requires consideration of whether or not there is a domestic producer of substitutable goods whose interests are expressly contemplated in the TCO process. A domestic producer should, it is said, have a right to be heard before the making of a TCO and on review from a decision refusing a TCO. Indeed it can on its own motion, pursuant to the Act, apply for a TCO to be revoked. Thus a person claiming to be a domestic producer has an interest in the entire process. BlueScope is the sole Australian producer of the relevant steel products. It is these products that will be the subject of an inquiry as to whether or not they are substitutable.
19. Further, it is said that in earlier proceedings an application was made by Stemcor for a TCO in “terms that include the present product”. BlueScope was joined as a party to those proceedings, opposing the grant of the TCO on the issue of substitutability.
20. BlueScope now says that there is an overlap between the substance of the earlier application and the present application. The Respondent relied upon the material provided by BlueScope to the Tribunal in the former proceedings in order to reach its decision in the present application. BlueScope now seeks to protect its position in the industry and in order to do this it says that it should be enabled to be a participant presenting appropriate evidence to substantiate its contention as to substitutability between the goods for which a TCO is sought and the steel products produced by it. It is only if BlueScope is a party that the Tribunal, it is submitted, can be effectively informed as to the relevant factual situation including the technical details of the products.
21. Whilst the Respondent will seek to support and maintain the decision, much of the material relied upon was and will be provided by BlueScope. Even be this so, the interests of the Respondent and BlueScope are not the same. Indeed it is preferable for the Respondent to adopt an objective role in the hearing, leaving the real contest to the commercial enterprises whose financial interests will be the most affected, the latter including preservation of the decision in the earlier application.
22. BlueScope is a domestic manufacturer of what it maintains are substitutable goods. It says that it produces in Australia goods that are put or are capable of being put to a use that corresponds with the use to which the goods the subject of the rejected application for a TCO can be put. It is, it is said, a pivotal component as to whether or not there is a producer of substitutable goods.
consideration of stemcor’s contentions in opposition to the joinder application
23. It is asserted on behalf of Stemcor that in the present application the Tribunal is not, as was the Respondent, required to decide whether substitutable goods were made in the ordinary course of business. Rather, the issue for the Tribunal is whether the application should or should not have been accepted by the Respondent.
24. Thus the issue in the joinder application is said to be whether or not the decision to reject the application affects the interests of BlueScope, this in contrast to a decision on the merits of the TCO application itself. It is said that in deciding to reject an application the Respondent cannot have regard to submissions from manufacturers, but is to consider only the provisions contained in section 269F. One of such provisions is section 269F(3)(d). At the stage of considering the section 269F requirements, it is said that the interests of BlueScope have not been affected and any decision to be made by the Respondent is to be one regardless of submissions from BlueScope.
25. It seems to me, however, that the latter submission is difficult to maintain in light of the material already noted and provided by Stemcor in support of its TCO application. This is further so when it is submitted on behalf of Stemcor that the Respondent did not have grounds upon which to be:
…not satisfied that the applicant has established to the satisfaction of the CEO that there are reasonable grounds for asserting that no substitutable goods are produced in Australia in the ordinary course of business.
26. There is here an argument as to whether BlueScope provided material to this effect in the earlier proceedings to which BlueScope was a party. This is raised as a relevant issue in the present application.
27. It is true that if the application for a TCO had not been rejected and in due course a TCO not granted, BlueScope would be enabled to present evidence and make submissions in any subsequent Administrative Appeals Tribunal application. But this should not prevent it being a party and able to adduce evidence in relation to the rejection of the application for non compliance with the prerequisites of sections 269F, 269FA and 269C.
28. Section 269H, the screening section, under which the TCO application was rejected is intended, as was submitted on behalf of BlueScope, to enable the Respondent to reject an application when there is an awareness of a producer in Australia of substitutable goods. The section operates to the benefit of local producers. BlueScope if joined as a party will contend that the Respondent made the correct decision.
29. The Respondent in making its rejection decision had regard to the “core criteria” as to whether substitutable goods were produced in Australia in the ordinary course of business. BlueScope’s evidence will be material in establishing whether or not the application meets the criteria.
decision
30. It is clear that this is an appeal against a decision under section 269H to reject a TCO application. It is not an appeal against a refusal to make a TCO. However, in the opinion of the Tribunal, similar considerations apply when considering a joinder application.
31. I am satisfied on the basis of the material identified above that BlueScope might well be a producer in Australia in the ordinary course of business of substitutable goods. This is a factual situation yet to be proven. A result favourable to Stemcor would or could affect the interests of BlueScope. The interest of BlueScope is other than as a member of the public. I am further of the opinion that BlueScope has identified a relevant interest and/or demonstrated a genuine affectation of an interest which attaches to it. It maintains and would seek to maintain that it is the producer of substitutable goods.
32. It is in the interests of ensuring a fair hearing to all parties that might be affected by the Tribunal’s decision and that the Tribunal has before it all relevant evidentiary material, that BlueScope should be joined as a party. BlueScope by reason of its participation in the earlier application, having obtained a favourable result in that application and now in light of the present application having its commercial and industrial position possibly placed at risk, has an interest over and above the general public. BlueScope is the entity that is in the best position to adduce relevant evidence as to the goods that it produces and as to whether it is in fact a producer of substitutable goods. The Respondent is not. The Respondent would have to rely upon what it is told by BlueScope. It has no first hand knowledge of the actual situation. Not only will BlueScope be able to adduce relevant evidence but its involvement in the proceedings will ensure the presentation of the best evidence. BlueScope will be able to instruct its legal representatives as to the avenues best to be pursued.
33. It seems to me that as a matter of procedural fairness BlueScope should be enabled to present its position to the Tribunal in opposition to Stemcor and in aid of protecting its commercial position. It is a position of which the Tribunal should be made aware. BlueScope was affected by the reviewable decision and will clearly be affected by the review of the decision.
34. As was submitted on behalf of the Respondent it is necessary for an Applicant for a TCO to comply with the provisions of sections 269F and 269FA. If the Respondent is not aware of any producer of substitutable goods in Australia it can proceed with the application. If the Respondent is not satisfied as to these matters or either of them, the application can be refused. That is what happened in the present instance.
35. The Respondent therefore maintains that he was aware of or had knowledge of a producer of substitutable goods in Australia, this from the decision made in relation to the earlier TCO application, as identified by the Applicant in its support of its application, and the material provided largely by BlueScope that lent support to that decision. The prerequisites for statutory consideration of an application include particulars of enquiries made by an Applicant “to assist in establishing that there were reasonable grounds for believing that … there were no producers of substitutable goods” (s269F(3)(d)). The Respondent was of the opinion having considered the earlier application and the material produced by BlueScope that this prerequisite had not been established. The interests of BlueScope are relevantly affected by the decision and may be by any review of it. BlueScope should be a party to these proceedings in order to ensure a fair hearing and a disposition of the substantive application as expeditiously as possible. I am satisfied on the basis of the material set forth in these reasons that BlueScope should be joined as a party in these proceedings. Accordingly the Tribunal orders that BlueScope be made a party to the present application.
I certify that the 35 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon RNJ Purvis AM, QC, Deputy President
Signed: ............[Emily Gadsby]........
AssociateDate/s of Hearing 1 May 2007
Date of Decision 22 May 2007
Representative for the Applicant Mr M Rich
Counsel for the Respondent Mr L Kennedy
Counsel for the Joinder Applicant Mr R Niall
Key Legal Topics
Areas of Law
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Administrative Law
Legal Concepts
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Jurisdiction
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Standing
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Joinder
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