Tasman Timber Ltd v Minister for Industry & Commerce

[1982] FCA 332

IN THE FEDERAL COURT OF AUSTRALIA )

1

NEW SOUTH WALES REGISTRY NO.G 196 OF 1 9 8 2

GENERAL DIVISION

BETWEEN :

Applicants

ANC :

MINISTER FOR INEUSTRY AND
COMMERCE and THE COMPTROLLER-

GENERAL OF CUSTOMS

Respondents

REASONS FOR JUDGVENT

-	11 NOVEMBER	1 9 8 2
AT SYDNEY

LOCKHART p- J. The applicants seek interlocutory injunctions

restraining the respondents from imposing cash securities
pursuant to S. 42 of the Customs Act 1901 in respect of the

importation of softwood timber from New Zealand.

The injunctions are sought in aid of the applicants'

claims under the Administrative Decisions (Judicial Review) Act

1 9 7 7 ( l ' the Judicial Review Act").	The applicants seek an order
of review of the decision which is said to have	been made by the
first or the second respondent	to impose cash securities pursuant

t o S 42. The f i r s t t h r e e a p p l i c a n t s c l a i m t o be persons

aggrieved by the decision	on	t h e	ground	that	they manufacture	i n
New Zealand	square	dressed	structural	softwood	t imber	("the

Timber") and export it t o A u s t r a l i a f o r s a l e h e r e . The l a s t two

appl icants c la im to be persons aggrieved i n t ha t t hey ca r ry on i n

Austral ia the business of importers and i n the course of that

business import he Timber in to Aus t r a l i a from New Zealand. A l l

t h e a p p l i c a n t s a s s e r t t h a t t h e i m p o s i t i o n of cash s ecu r i t i e s i s

I

c o n t r a r y t o law.

The Oepartment of Indus t ry and Commerce ( " t h e

Department"), of which the Austral ian Customs Service forms p a r t ,

i s responsible for the adminis t ra t ion of the Customs Tar i f f

(Anti-Dumping) Act 1975 ( " t h e Anti-Dumping Ac t " ) . One of the

functions of the Cepartment i n administering the Anti-Dumping Act

i s t o d e t e r m i n e w h e t h e r , i n r e s p e c t of g o o d s e x p o r t e d t o

Australia, there has been rendered any f inanc ia l a s s i s t ance i n

g

r e spec t of the product ion, manufacture carr iage , or export of

such goods.

Certain companies engaged i n t h e A u s t r a l i a n t i m b e r

indus t ry and The Woods and Forests Department of South Australia

complained t o the Gepartment t h a t the New Zealand Government had

provided New Z e a l a n d e x p o r t e r s t o A u s t r a l i a of t h e Timber

f inanc ia l s s i s tance , descr ibed as increased expor t t axa t ion

incen t ives and export performance taxat ion incent ives , to the

extent of 19 .09% of the FOB value (pre- tax) of the Timber.

The Department has commenced an examination of the

complaints and a request	has	been	made	of	the	N e w	Zealand
Government for informat ion	as	to	the	na ture	and	ex ten t of	any

On 9 August 1982 the Comptroller-General of Cus toms

issued Australian Customs Notice N o . 82 /157 whereby he gave

n o t i c e t h a t i n q u i r i e s had been i n i t i a t e d under the provis ions of

the Anti-Dumping Act t o determine whether export prices of timber

a r e l e s s t h a n normal values for those goods i n New Zealand. The

not ice sa id :  -

"Evidence i n the form of pr ic ing information

and cos t ing da ta ind ica tes tha t expor t sa les

of square dressed s t ructural softwood timber

have been made t o A u s t r a l i a a t p r i c e l e v e l s

which represent apparent dumping margins of up

t o 49% when compared t o domest ic pr ice levels

fo r s imi l a r timber i n N e w Zealand. I t has

b e e n c l a i m e d b y t h e i n d u s t r y t h a t s u c h

a l legedly dumped imports have caused and a r e

caus ing i n ju ry a s ev idenced by r educed

p r o d u c t i o n , f a l l i n g s a l e s a n d s u p p r e s s e d

p r i c e s , l e a d i n g t o a n i n a b i l i t y t o r e c o v e r

cos t increases . I'

The Comptroller-General published an Australian Customs

Not ice N o . 8 2 / 2 2 8 d a t e d 3 November 1 9 8 2 announcing the

commencement	of	inquir ies	t o determine	the	existence,	degree	and
e f f e c t	o f	any	subsidy	i n respect	of	exports	of the Timber from

N e w Zealand. The not ice said :-

"The Department i s s a t i s f i e d t h a t t h e r e i s

su f f i c i en t . ev idence t o j u s t i f y i n i t i a t i n g an

,

:.. . . . . . . . . . t , . . . . . . . . . . . . ~. . . . . , . . . . . . . . . . . . . , .

-4-

i nves t ig s t ion and has reached a preliminary

affirmative f inding. Pending the completion

of i n q u i r i e s it has been decided t o impose

countervai l ing cash secur i t ies o n imports of

square dressed structural softwood timber f r o m

New Zealand on and	from	t h e	d a t e	o f	t h i s
no t i ce . I'

The Timber i s currently being shipped from New Zealand

t o Aus t r a l i a and a t l e a s t one sh ip i s i n the Por t o f Sydney

await ing clearance.

I

The companies engaged i n the Austral ian t imber i n d u s t r y

which complained t o t h e Department a s se r t t ha t each o f them has ,

a s a r e s u l t of the exports of the Timber to Aus t r a l i a , su f f e red

i n j u r y .	The	r e s p o n d e n t s	a s s e r t	t h a t	t h e s e	c o m p a n i e s	h a v e
furn ished	repor t s	to	the	Department	which	a r e t o t h e e f f e c t	t h a t
t h e	companies	have	suffered	injury	i n var ious	respects	including

reduced log intakes, reduced working hours, reduced numbers of

employees by dismissal of employees, reduced work for haulage

contractors , reduced sel l ing pr ices and reduced p r o f i t s .

*

The p r i n c i p l e s r e l a t i n g t o the grant ing of in te r locutory

i n j u n c t i v e r e l i e f a r e w e l l known and I w i l l not repeat them. 1

t u r n f i r s t t o	the question whether	the applicants have	made out a
pr ima facie case	i	n	the re levant sense .

I t i s common ground t h a t on 2 8 September 1981 Aus t ra l ia

accepted	the	Agreement	on	In te rp re t a t ion	and	Application	of
A r t i c l e s V I ,	X V I ,	and	X X I I I of	the	General Agreement	on	T a r i f f s

and Trade. That Agreement i s commonly known as "the Subsidies

"reduce or e l iminate non-tar i f f measures or ,

where t h i s i s n o t appropriate , to reduce or

e l i m i n a t e t h t r a d e i r r e s t r i c t i n g o r

d i s t o r t i n g e f f e c t s , and to b r ing s u c h measures

e f f e c t i v e	m o r	u n d e r
i n d i sc ip l ine" . e r n a t i o n a l
The S u b s i d i e s Code c l a r i f i e s and eve lops ex i s t ing

p rov i s ions on t hese measu res a l r eady found i n t h e G e n e r a l

Agreement. I t aims t o e n s u r e that he use of subsidies by any

signatory does n o t harm the t rad ing in te res t s o f another , and

t h a t c o u n t e r v a i l i n g m e a s u r e s do n o t u n j u s t i f i a b l y i m p e d e

r i g h t s and fo r i n t e rna t iona l su rve i l l ance obligations covering these measures, and a mechanism

and set t lement of disputes .

The questions which a r i s e i n t h i s c a s e do not lack

complexity. They involve c lose considerat ion of provis ions of

the Customs Act, the Anti-Dumping A c t , the Subsidies Code and the

New Zealand-Australia Free Trade Agreement (''NAFTA''). This i s

p l a i n l y a case ca l l ing for a f ina l hea r ing a s soon as poss ib le .

I t i s not appropr ia te to come t o any conclusions except on a

pr ima facie basis as to the comparat ive s t rengths and weaknesses

of the arguments advanced b y t h e p a r t i e s . I do not propose t o

s e t o u t	f u l l y those	arguments.	I t w i l l be	s u f f i c i e n t i f I	r e f e r
t o them	b r i e f l y .

The Customs A c t i s incorporated and sha l l be read as one

w i t h t h e Anti-Dumping A c t (Anti-Dumping Act S. 6 ) .

Section 42 of the Customs A c t p rov ides tha t t he C u s t o m s

sha l l have t he r i gh t t o r equ i r e and t a k e s e c u r i t i e s f o r c e r t a i n

purposes	including	the	protection	of	the	revenue	of	the	Customs
and,	pending	the	giving	of the	required	securi ty	i n	r e l a t i o n	t o

any goods s u b j e c t t o the cont ro l o f the Customs, t o r e f u s e t o

d e l i v e r the goods or t o p a s s any e n t r y r e l a t i n g t h e r e t o .

I/

S e c t i o n 1 0 o f t h e Anti-Dumping A c t a u t h o r i s e s t h e

Minister, by notice published i n t h e G a z e t t e , t o d e c l a r e t h a t S.

10 app l i e s t o any goods that have been exported t o Aus t ra l ia and

t h a t ( a ) i n the country of or igin of export of the goods, there

has been goods a subsidy and ( b ) by reason paid or granted upon the expor t o r car r iage o f those

thereof mater ia l in jury t o an

Australian industry has been or i s being caused or threa tened or ,

i n a case where secur i ty has been taken under S. 42, mater ia l

i n j u r y t o an Austral ian industry would or might have been caused

i f t h e s e c u r i t y had not been taken. I n t h e r e s u l t s p e c i a l d u t i e s

of Customs a r e imposed, known as counterva i l ing d u t i e s . Such

not ices may opera te re t rospec t ive ly where security has been taken

under S.	4 2 .
The applicants submitted that the only arguable purpose

for imposing cash securi t ies i n t h i s case i s fo r t he p ro t ec t ion

of the revenue of the Customs by p rese rv ing t he ab i l i t y of the

Customs, i f a f ina l de te rmina t ion of subsidy and causa l ly r e l a t ed

material injury is made, to impose retrospective duties:

Anti-Dumping Act, S. 13.

The applicants submitted that if it appears that no

restrospective countervailing duties could lawfully be imposed pursuant to s s . 10 and 13 of the Anti-Dumping Act, after a final determination of the matter by the Customs, the imposition of cash securities is bad.

Section 14 of the Anti-Dumping Act provides that the

Minister shall not cause a notice to be published under any

provision of that Act unless he is satisfied that the publication

of the notice is not inconsistent with Australia's obligations

under any international agreement relating to tariffs or trade.

The applicants submitted that, if the notice imposing

cash securities is given in contravention	of	Australia's
international obligations, a subsequent notice	by the Minister
imposing retrospective duties to the extent	of	the cash

securities would itself be	a contravention of Australia's
international obligations because	it would impose retrospective
duties in circumstances where	, if Australia's international
obligations had been observed, no retrospectivity would	have been
permissible.

It was said that the imposition of cash securities is a

breach of Australia's international obligations for the following

. .

. . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . , \ I I . . , . . . . . # . ~ % , . . . . . . '. c - - *

-8-

reasons :  -

( a ) t h e S u b s i d i e s Code ( A r t i c l e 2 pa rag raph 1 5 )

r e q u i r e s p u b l i c n o t i c e t o b e g i v e n o f a n y

p r e l i m i n a r y a f f i r m a t i v e f i n d i n g n b y

inves t iga t ing au tho r i ty . The no t i ce m u s t s e t

fo r th the f ind ings and conclusions reached on a l l

i ssues o f f a c t and law considered mater ia l by the

W

i n v e s t i g a t i n g a u t h o r i t i e s a n d t h e r e a s o n s a n d

bas i s t he re fo r . The appl icants submi t ted tha t the

n o t i c e r e l i e d on by the r e sponden t s i n t h i s ca se

i s t h a t of 3 November 1982 and t h a t it does not

comply w i t h paragraph 15.

( b ) A r t i c l e 5 paragraph 1 o f t h e S u b s i d i e s Code

provides	that	provis ional	measures	may	be	taken
o n l y	a f t e r	a	prel iminary	aff i rmat ive	f inding	has
been made	t h a t a	subs idy ex is t s	and	t h a t	t h e r e	i s

suf f ic ien t ev idence o f in jury as provided for i n

Ar t i c l e 2 paragraph 1 ( a ) t o ( c ) . P r o v i s i o n a l

m e a s u r e s s h a l l n o t be a p p l i e d u n l e s s t h e

a u t h o r i t i e s c o n c e r n e d j u d g e t h a t t h e y a r e

necessary to prevent injury being caused ur ing

p e r i o d	t h e	of	i n v e s t i g a t i o n s .	A r t i c l e	2
sub-paragraphs	1 ( a )	t o	( c )	r e q u i r e s	t h a t

counterva i l ing dut ies may only be imposed pursuant

t o i n v e s t i g a t i o n s i n i t i a t e d a n d c o n d u c t e d i n

accordance with the provisions of Ar t i c l e 2; t h a t

an	inves t iga t ion sha l l normal ly be	in i t ia ted	upon
a wri t ten request	by or on behalf of	the	industry

a f fec ted :  and tha t t he r ques t ha l l i nc lude

suff ic ient evidence of : -

( i ) a subsidy and, i f p o s s i b l e , i t s amount:

(ii) i n j u r y w i t h i n the meaning of Ar t ic le V I o f

the General Agreement in t e rp re t ed by t he

Subsidies Code: and

(iii) a causal l i n k between the subsidies , imports

and the al leged injury.

The	appl icants	submit ted	that	i n t h i s	c a s e	t h e r e
i s no evidence	of	injury,	that	it	i s not	possible

t o say that	provis ional	measures	w i l l	prevent
i n j u r y and	t h a t there	i s no	causal	l i n k between

the subsidised imports and the a l leged in jury

because, i f cash or o t h e r s e c u r i t i e s a r e imposed

by the respondents, imports w i l l be made from

North America which w i l l f i l l the gap and the

i n j u r y , a n y , i f w i l l continue. The appl icants .

a s s e r t e d a l s o t h a t i f any i n j u r y t o the l oca l

industry has been sustained it i s due t o t h e

economic recession i n Austral ia and n o t t o any

s u b s i d i e s t h a t may have been imposed o n t h e

e x p o r t s from New Zealand.

Other arguments were put forward by the applicants based on Article 3 paragraph 1 and Article 2 paragraphs S , 5 and 9 of the Subsidies Code which are said to lead to the conclusion that the imposition of cash securities is a breach of

Australia’s international obligations under that

Code. I need	not	set	out	those	additional
arguments.

-

(c) Subject to the provisions of Article 10 of hAFTA

and consistently with its other international

obligations, a Member State is prohibited by

paragraph 1 of Article 10 from levying dumping or

countervailing duties on goods imported from the

Territory of another Member State. Under

paragraph 2 a Member State may only impose duties if there is no satisfactory outcome of

consultations between the Nember States to W

paragraph 3 if the two Member States do not reach consider measures to prevent future injury. Under a mutually satisfactory solution within a period

of sixty days from the commencement of the

consultations the Member State into whose

territory the goods are being imported may levy
dumping or countervailing duties on those gocds.
The applicants submit that it is implicit that a
country may not unilaterally adopt during the

per iod of c o n s u l t a t i o n a measure t o p r e v e n t

fu r the r i n ju ry and tha t ca sh secu r i t i e s cons t i t u t e

such a measure, hence they cannot be imposed

d u r i n g the period of consultation.

The respondents submitted: -

( a ) T h a t t h e r e i s no " d e c i s i o n . . .made under an

enactment' ' within the meaning of S. 3 of t he

J u d i c i a l Review A c t , t h a t A u s t r a l i a n Customs

Notice N o . 82/228 i s not a decis ion made under an

enactment and does not evidence any such decision]

and t h a t , even i f it could be construed i n favour

of the appl icants i n t h i s r e s p e c t , any decis ion

was taken	ot	by	either	respondent	b u t by	the
relevant	State	Col lector	of	Customs	( S . 8 of	the

Customs Act ) . The respondents submitted that

decis ions under S. 42 of the Customs Act are taken

by the Customs and t h a t it i s c l ea r from S. 43 of the Customs Act t h a t it i s the re levant S ta te

Collector of Customs who makes requirements	under
S.	42 .

( b ) That the whole of the applicants ' case based on

the Subsidies Code and NAFTA i s introduced through

a misconception of S. 14 of the Anti-Dumping A c t .

I t was s u b m i t t e d t h a t S . 1 4 r e l a t e s t o t h e

Minister responsible for the administration	f the
Anti-Dumping Act and imposes obligations	only on

the Minister. There has been no decision by the Minister in this case which could be the subject

of any review nor has there been any threat of any

decision by the Minister. There has been no decision by the Minister to cause a notice to be published under S. 10 of the Anti-Dumping Act and

W

there is no suggestion of any imminent decision by the Minister to cause a notice to be published under that section. All that is the subject of

these proceedings is a decision by the

Comptroller-General, if there be a decision at

all, evidenced by the Australian Customs Notice of

3 November 1982.

(c) That,	if S. 14 were applicable to this case, the prohibition of which it speaks is imposed on the	Minister causing the notice to be published under	the Anti-Dumping Act unless he is satisfied that
the publication of the notice is not inconsistent
with Australia's obligations under international
agreements relating to tariffs or trade. Th e
Minister may become satisfied in the future that
the publication of a notice would not be
inconsistent with Australia's obligations under its international agreements, and this may be a
view hich he could reasonably take. Fo r
instance, he may reasonably take the view that
c e r t a i n of the requirements of the Subsidies Code
o r of NAFTA are directory rather than mandatory.

I am s a t i s f i e d , having considered al l the evidence and

the submiss ions o f t h e p a r t i e s , t h a t t h e a p p l i c a n t s h a v e

es tab l i shed prima a fac ie case i n the r qu is i te s nse . I

emphasise t h a t I have not come t o any conclusion as to the

ul t imate outcome of the case or the ul t imate success of any of

the submissions advanced by any of t h e p a r t i e s . I n p a r t i c u l a r ,

t h e t e s t Leon Laidley P t y . Limited propounded by Deane J. i n Transport Vforkers' Union v .

(1980) 2 8 A . L . R . 589 ( a t p . 600) i s i n

point i n th i s case namely, t h a t on an appl ica t ion for an

i n t e r l o c u t o r y i n j u n c t i o n t h e C o u r t d o e s n o t " u n d e r t a k e a

preliminary	tr ial"	but	considers	whether	there	i s	' ' a	f a i r ly	open
ques t ion	t o	be	determined	a t	h e	h e a r i n g " .	This	case	involves

the considerat ion of act ions and decis ions by the Minister for

Industry and Commerce and t h e Comptroller-General of Customs and

q u e s t i o n s a s t o w h e t h e r t h o s e a c t i o n s and d e c i s i o n s a r e

cons is ten t w i t h Aus t r a l i a ' s i n t e rna t iona l ob l iga t ions . I t i s

obviously inappropriate that such questions are determined at

th is interlocutory stage of the proceeding.

I t u r n to the balance of convenience.

The evident purpose of the Anti-Dumping Act i s t o

protect Australian domestic i n d u s t r y . I r e f e r r e d e a r l i e r t o t h e

complaints made by c e r t a i n companies engaged i n the Austral ian

timber i n d u s t r y to the Aus t ra l ian Government about he alleged

provis ion of f inancial ass is tance by the New Zealand Government

t o New Zealand	exporters	to	Australia	of	the	Timber.	There	i s
some	e v i d e n c e	t h a t	h o s e	members	o f	t h e	A u s t r a l i a n	t i m b e r

i n d u s t r y have suffered and w i l l s u f f e r i n j u r y a s a r e s u l t of the

a l legedly subs id ised expor t s to Aus t ra l ia of the Timber. Indeed

-

the Comptroller-General appears to have formed a provis iona l view

t o t h a t e f f e c t . On the other hand the re i s ev idence tha t i f cash

s e c u r i t i e s	were	imposed	the	pr ice	o f	t h e	Timber	would	be
increased	by	1 9 . 0 9 % .	The	pr ice	o f	the	Timber	i s	present ly

$235.00 per cubic metre compared w i t h the price of local t imber

of $200-$203.00 per cubic metre. Imports of the Timber from New

Zealand have already fallen by 31%. I t i s sa id t o be not

un l ike ly tha t the impos i t ion o f cash secur i t ies w i l l render the

New Zealand imports of the Timber uncompetitive. I t i s a l so sa id

t h a t t h e r e s e c u r i t i e s i s no l i k e l i h o o d t h a t t h e i m p o s i t i o n of cash

w i l l r e s u l t i n increased sales of domestic timber.

The	U . S . A .	and	Canada	are	subs tan t ia l	expor te rs	o f	t imber	to
Aus t ra l ia	and	there	i s evidence	that	importers	here	may	look	t o

those sources to import imber i f t he p r i ce of t he Timber from

New Zealand were t o r i s e . The imported price of timber from the

U . S . A . and Canada i s lower than the price of domestic timber. I

am n o t s a t i s f i e d on the vidence presently before me tha t he

imposi t ion of cash securi t ies i n r e l a t i o n t o t h e Timber imported

from New Zealand w i l l r e s u l t i n a r i s e i n the p r ice o f , o r

i n c r e a s e d demand f o r , l oca l timber and any consequen t improvemen t

i n the f i n a n c i a l p o s i t i o n o f the members of the A u s t r a l i a n timber

i n d u s t r y .

I a m a l s o m i n d f u l o f t h e f a c t t h a t i n a n o t h e r

a p p l i c a t i o n for i n t e r l o c u t o r y i n j u n c t i v e r e l i e f r e c e n t l y heard b y

a n o t h e r J u d g e of this C o u r t i n v o l v i n g c e r t a i n common i s s u e s

( F e l t e x R e i d r u b b e r L i m i t e d , 2 November 1 9 8 2 ) i n t e r l o c u t o r y

i n j u n c t i o n s were g r a n t e d .

Other q u e s t i o n s a r i s e i n c o n s i d e r i n g where the b a l a n c e

of c o n v e n i e n c e l i e s ; b u t o v e r a l l I a m s a t i s f i ed t h a t it l i e s i n

f a v o u r of g r a n t i n g i n t e r l o c u t o r y i n j u n c t i o n s p e n d i n g the f i n a l

h e a r i n g o f the p r o c e e d i n g .

The q u e s t i o n s a r i s i n g i n t h i s case d o n o t l e n d

t h e m s e l v e s r e a d i l y t o s o l u t i o n o n a n i n t e r l o c u t o r y h e a r i n g . I t

i s a c lass ic case of the n e e d f o r a n u r g e n t f i n a l h e a r i n g . A l o t

of money i s i n v o l v e d . The f i n a n c i a l i n t e r e s t s o f the a p p l i c a n t s

. . . . . . . . . . .

-16-

as exporters and importers of timber from New Zealand to

Australia are at stake. It is highly undesirable that questions

concerning Australia's international obligations are considered

definitively otherwise than on a final hearing.

Before parting with the matter I should say that a

preliminary objection to the Court's power to entertain the

application under the Judicial Review Act and a fortiori	the
application for interlocutory relief was made by the respondents.	-
It was argued by the respondents that a person who claims to be
aggrieved under the Judic:*al Review Act must a person who is	+

amenable to the court's jurisdiction. It was said that prima

facie a benefit such as that conferred by the Judicial Review Act

upon an applicant is conferred upon a person who owes obedience to the laws of Australia and whose interests the Judicial Review Act is designed to protect. Reliance was placed upon a number of reported cases, in particular Jeffreys v. Boosey C18541 4 H.L. Cas. 815. 1

This objection was taken when the hearing for

interlocutory relief commenced and the first three applicants

were the only applicants in the case, all being exporters of

timber from New Zealand. It	was after the preliminary objection
was taken that application was made	by the first three applicants

to add the last two applicants who are importers of timber from
New Zealand into Australia. In my opinion the appropriate course
to take with this preliminary objection is to defer ruling on it

u n t i l the f ina l hear ing of the p roceeding , i f the ob jec t ion i s

still maintained.

The orders of the Court are as follows :-

Upon the appl icants by their counsel giving the usual

under tak ing as to damages the respondents are res t ra ined u n t i l

the hear ing of this proceeding or fur ther order i n respec t of the

importation of square dressed structural softwood timber from New

Zealand to Aus t r a l i a by the appl icants or any of them from giving

e f f e c t t o A u s t r a l i a n Customs Notice No. 8 2 / 2 2 8 dated 3 November

1982 and from imposing cash or any o t h e r s e c u r i t i e s p u r s u a n t t o

S. 4 2 of the Customs Act 1901 as incorporated with the Culstoms

Tar i f f (Anti-Dumping) Act 1975.

The costs of the a l l p a r t i e s w i l l be cos t s i n the

proceeding.