Trimknit Manufacturing Pty Ltd v Bates, Harvey

IN T93 FEDERAL COURT

OF AUSTRALIA

) )

L VICTORIA	DISTRICT	REGISTRY	) No. VG 183 of	1982
)

GEL?ETcRL DIVISION

)

BETWEEN :

TRIMKNIT MANUFACTURING PTY.

LTD.

AND : HARVEY

SATES

22 December 1983

KEELY J.

”

REASONS FOR

JUDGMENT

This is an application under S . 5 of the Administiativ- Decisions (Judlclal Review) Act 1977

> !

(the Judicial Revlew Act)

: i

for an order of review in respect

of a decision made by

the

I.--	I
f r

respondent as delegate

of the Minister of Business- an8 Consumer

1 -

’ 1

c; : I	Affairs.
1 .-. 3 1
! . . ‘ 4

The application dated

7 December, 1982 described the

“decision“ in the following terms

“Application

review

the decision

the

Respondent made on 17 December, l981 pursuant to the provisions of Sectlon 273 of the Customs Act

1901,

tSat the Applicant‘s taritf quotas for the

seven year period commenclng 1 January, 1981 be as

follows :

‘

‘.

-- -_.___ _ _ - _-

I i

.- 2.

( a )

71132

u n i t s

i n

r e s p e c t

k n i t t e d

c o a t s ,

jumpers,	card igans ,	weaters	and	the	l lke :
t u b e t o p s ,

(b)

$982,999-00

i n

r e s p e c t

o f

k n i t t e d

c o a t s ,

jumpers ,

cardigans,

weaters

and

the

h k e :

tube t ops . "

(The re ference	above	to	"1 January 1981" should
bs t o 1982)

Paragraph

( a )

r e f e r r e d

t o

d e c i s i o n

r e l a t i n g

t o

c o m p l e t e

garments ;

paragraph

(b)

re fe r red

d e c i s l o n

r e l a t i n g

" p a r t s for" garments.

Mr. Ostrowski, of Queens

Counsel, who

appeared

with

M r .

Hansen

for

t h e

a p p l i c a n t ,

s t a t e d

i n

final

address

t h a t

the

dec i s ion

sough t

t o

reviewed

w a s

:hat

r e l a t i n g

f u l l

ga rmen t s ,

no t

one

r e l a t lng

t o

pa r t s .

The

a p p l i c a t i o n s e e k s t o h a v e t h a t d e c i s i c n q u a s h e d o r s e t

aslde

and

an ' "order re fer r ing the Appf- lcant ' s appl ica t ion

for

t a r i f f q u o t a

t o the

respondent

for f u r t h e r c o n s i d e r a t l o n " .

Before

pass ing

the

subs tan t lve

ques t ions

involved

t h i s

a p p l l c a t i o n

d e s l r a b l e

t o

r e f e r

t o

the

r a l evan t

aspects

o f

t h e

a p p l l c a n t '

bus lness

t h e

p e r l o d

p r i o r

t o

December 1981 and the events	lead ing	up to tine b r ing ing of	t h i s
a p p l i c a t l o n .

. ..

The

appl icant

has

been

importer

kni t ted

garments

s i n c e 1971,

In t h e 24 month perlod

ending

30 J u n e ,

1980

(which

i s

the

r e l e v a n t p e r i o d f o r

the

pu rposes o f

t h i s app l i ca t ion

and

w i l l be

c a l l e d

t h e

b a s e

p e r i o d )

t h e

a p p l i c a n t

i m p o r t e d

f r o m

Korea, Honq Konp

and

the Caribbean

region

for the

purpose

o f

sale t o retailers,

l a r g e number of kni t ted

goods ,

inc luding

jumpers,

card lgans o r sweaters

(which

may be compendiously

r e f e r r e d

t o

as jumpers).

Some of those

goods

were

ready

for

sale t o retailers

~umpers upon

a r r l v n l

i n A u s t r a l i a b u t

t h e

vas t ma jo r i t ’y

the

~umpers

impor ted .

the

appl

icant

dur

ing

t h e b a s e p e r i o d c o n s i s t e d

f r o n t

and

back

pieces

or parts

jumpers,

which

these

reasons

w i l l be

c a l l e d p a r t s .

The

impor ted

par t s

were

i n

t h e

fprrn

f r o n t and

back

pieces

which,

when

sown t oge the r ,

made

complete

jumsers

s u i t a b l e

for sale

t o

r e t a i l e r s .

Those

p a r t s were

invoiced

dnd

packed

separa te ly

bu t

cons igned

the same shipment.

The

app l i can t

a r r anged

t o have

the

p a r t s

sown

t o g e t h e r

a f t e r

t h e

shipment

had

arrived

i n

A u s t r a l i a

r e l a t i v e l y

s m p l e

a n d

inexpensive operat ion.

Although M r .

Vlahos,

current ly

and

ur ing

the

r e l e v a n t

pe r iod

d l r e c t o r

t h e

applicant,

sald in

ev ldence

t ha t

=he

k n z t t e d

g a r m e n t s

i m p o r t e d

d u r i n g

tine

r e l e v a n t

p e r i o d

w e r e

ordered

“ f u l l garments“,

is clear

t h a t the consignment

t he

vas t

ma jo r i ty

o f

j umpers

i n

the

form

par ts

was

a t

t h e

d l r e c t l o n

o f

t he

app l i can t .

Doub t l e s s

t he

o rde r

was

placed

for

a specific number

of ~umpers

with a direction that the order be

filled by consigning the approprlate numbers of front and hack parts whlch, when sown together, would comprlse the number of complete jumpers ordered.

A detalled account

of the legal and commercral reasons

behind the applicant's practice of importing the greater part

knitted goods in parts rather t5an as complete goods was not given' *to the Court. However it was stated by Mr. Ostrowsl:~,

that the practice was a "stratagem" devised by the appllcant

reduce the amount of customs duty which would have been payable

if all the jumpers ordered hacl been imported In their complete

form. The appllcant's stratagem was successful and it was saFd

by M r . Vlahos that a customs duty saving of approxlmately 11 per

cent on each jumper was achieved by importing jumpers In parts

rather than as complete jumpers. It may also be said that the

stratagem was successful in large measure because jumpers

imported in parts were classified - by officers of the aureau of

Customs as falling within the category of goods ln the Customs

Tariff Act whlch covered part garments. If the front and Sack

parts had been looked

at together and classified as garments

falling wlthin the tariff classrfrcatron applicable

to complete

jumpers, the applicant's stratagem would have been frustrated.

On l5 August, 1980 the Mlnister for Industry and Commerce

and the Minister for

Buslness and Consumer Affairs in a

jomt

medLa release announced new assrstance arrangements

for

the

5 .

textile industry which were to commence

on 1 January, 1982.

The programme

o f assistance was to run for seven years and

essentlal elements in it were the introductlon of revlsed categories of goods m the Schedule to the Customs Tariff Act,

and new tariff quotas applying to clothing products wlthin those

categories

goods them employed), the administral-ve

arrangements in

respect o f the establishment cf import

performance during the two-year base period and the allocatior!

of quotas f o r the duration of the seven year programme.

The salient features of the new quota arrangements relevant to these proceedlngs, as outllned

in a series of BureaL

of Customs Notices issued subsequent

to the announcement of the

assistance programme, may be briefly

sumarlsed as follows:-

Quotas applyrng to various categories of goods, includnc the category covering knitted coats, ~umpers, cardigans

and sweaters. would

be issued on a calendar year Sasrs

6 .

wxth

12 months

v a l i d i t y ,

commencing

1 January

each

year .

t h a t

c a t e q o r y ,

I n t e r

a l i a ,

s e p a r a t e

q u o t a s

would

apply to comple te and par t

Garments.

The

s i ze - of

q u o t a a l l o c a t e d

t o

importer

who

dur ing

the

base

per

iod

had

imported

“ l i k e ” goods

( t h a t IS

goods

f a l l i n g

w i t h i n

c a t e g o r y

s p e c l f l e d

u n d e r

t h e

new

arrangements)

depended

upon t h e number of "like" goods

en tered for home consumptlon

the

Importer

during

’rhat

per iod.

3 .

- Once

e s t a b l i s h e d ,

the

number

Imports

“ l i k e “ guods

d u r i n g

t h e

base period

would

remaln

for

the

s&en

year

pe r iod cormtlencing i January, 1982 and

would

a p p l i e d i n

each subsequent

year

to detemlne

the

impor t e r ‘ s sha re

o f

t h e

t o t a l

available

quota

i n

the

ca tegory

concern6:d.

That

number

was

known

v a r i o u s l y

a s

the

“base

quota“ ,

“establlshed

lmport performance“

“base performance“ or

s imply

the

.“base”

and

shal l

these

reasons

cal led

t he base.

The

method

e s t a b h s h i n q the base

was

d e a l t w i th

i n

t h e

B u r e a u

o f

Customs

Notice

8 0 / 1 7 6

(3CN

30/176).

Specrf lc

direct ions

were

given

respect

Lmportors

“ l ike“

goods

the

new

c a t e g o r y

k n l t r e d

c o a t s ,

1uinpers

e t c e t e r a ,

i n

t h e

a t t a c h m e n t

t o

BCY

80/176.

Appl icants

r e s p e c t

o f

t h a t

c a t e g o r y

were

r e q u i r e d

t o

e s t a b l i s h

“ l m p o r t

performance“

ln respect

complete garments

for

the per iod

January 1980 - 30 June 1980.

It seems tha t

imgor t

performance in respect of complete garments in the base

perlod prior to L January 1980 was established on the basls

of	records maintained by the Quota Control section of the

Department of

Industry and Commerce. It was stated in

BCX

80/176

that

separate schedule was required from each

imparter in respect of parts, detailing entrles

of part

garments

o f "Like" goods during the whole two-year base

period: no explanation was given

for that different

requireiraent in respect of parts. The closing	date	f o r
applications was stated as 28 November, 1980.

In late November 1980 the aFpllcant furnished the

Bureau of Customs wlth a schedule m the form prescribed by ECPl 80/176 setting out, in a column headed "imports claimed

as base performance", the respective number

of part garments

in the form of fronts and backs entered for home consumptioc on stated- dates during the base perlod. The aggregate number

of part garments llsted in the schedule amounted to	-
approximately 500,000 units.

T h e scheme outlined in the 3ureau of Customs

Notlces was such that in the normal course the Bureau

Customs in Canberra would have

used

the informatlon

contained in both the application

and the departmental

records to establish the import performance for

tine two year

. .

base

per iod

respec t

o f

whole

garments

and

par t

garnepts

and some form

no t i f ica t lon

would

then

have

been

glven

the	app l i can t .

However,

in December L980 c lo th lng

par t s

impor ted

the

a p p l i c a n t

a r r i v e d

and

were

c l a s s i f i e d

Melbourne

customs

authori t ies

complete

garments .

Duty was

assessed

on t h a t basis

although

they

were

o f

s u b s t a n t i a l l y

t h e

Same

na tu re &.S

those

imported

the base

period,

which

had

been

classlfled

p a r t

g a n n e n t s -

The

duty

the

December

shlpment

w a s p a i d

u n d e r

p r o t e s t .

The

a p p l i c a n t ' s

a g e n t ,

. L4 January. 1981, wrote

Quota

Control

Branch

i n

Canberra poin t ing out

the

c l a s s i f i c a t i o n as

complete garments

i	of	t h e	a p p l i c a n t ' s	i m p o r t s	in December	1980 which were of
i

s u b s t a n t i a l l y

the

saiue

n a t u r e a s

t h o s e F r e v i o u s l y c l a s s i f l e d

p a r t s .

The

l e t t e r

r e f e r e d

t o

t h e

q u e s t i o n

c a l c u l a t l n g

base

p e r f o r m a n c e

a n d

s t a t e d

t h a c

" a l l

p r e v i o u s

b a s e

!	pe r fo rmance	ca l cu la t lons	a re	-	now	i n c o r r e c t a n d	t h a t	t h e y
I

1	shou ld	have	been	subs t an t i a l ly	h lghe r .	Th i s	would	have
!

enabled

them

impor t

no re

and

t he re fo re

sus t a ln

h igher

I	l	performance and quota".	By	a	l e t t e r	d a t e d	2	FeDruary,	1 9 8 1
I

M r . Thompson, the

Chief

Inspector ,

Quota

Control

3rmch

the Department o f Business

and.

Consumer Affairs , Canberra,

informed the applicant's agen t

ha t

ma t t e r s

conce rn ing

the

c l a s s l f l c a t l o n

g a r m e n t

p a r t s

w a s

be lng

mves t iga t ed .

There was

a l s o an

exchange

o f

correspcndence

the

_oerlcd

January

t o

ear ly February

1981,

be tween the app l i can t ' s agen t

and

t h e

C o l l e c t o r

Customs,

Melbourne,

regardmg

the

basrs

f o r t h e c l a s s i f i c a t l o n o f

the

shlpment In

December

1980.

A t a time when the

correspondence

between

the

app l i can t ' s

agen t

and

the

Customs

a u t h o r l t l e s

i n

Melbourne

and

Canberra

regarding

the

c l a s s i f i c a t i o n

t h e

December

1980 shipment had not

been

concluded,

the

a p p l i c a n t

was

n o t i f i g d ,

l e t t e r d a t e d

10 March.

is81 signed by an

o f f i c e r

the Bureau o f Customs i n

C a n b e r r a ,

i t s

"base.

performance", in,

r e s p e c t

D€

whole

garments

the

ca tegory

kn i t t ed

coats,

jumpers ,

ca rd igans

e tce te ra .

The

l e t t e r

o f

n o t i f x a t i o n

acknowledged

t h e

a p p l x a n t '

" a p p l l c a t i o n

f o r

amendment

o f

t h e a d v i s e d t o t a l a p p r o v e d

base

performance

68 ,684

u n i t s "

a p p a r e n t l y

t h e

f l g u r e

n o t i f i e d

t o

t h e

a p p l i c a n t i n a

le t ter ,

da t ed

Yovember,

1980,

from

t h e

rnspector ,

Quota

Control .

The

l e t t e r

o f

10 March,

1981

s t a t e d t h a t

" A f t e r exammation of the documentation submitted

y o u r

base

performance has been determlned as follows

Amendment

Nil

J u l y 1978 - June 1980 : Previously accepted

= 68,684

Approved amendment

2 , 4 4 8

T o t a l Approved

Base

7 1 , 1 3 2 "

d e t e r m i n i n g

t h e

a p p l i c a n t '

base

(i.e. t h e

" to ta l

approved

base"

i n =he l e t t e r of

10 March,

1981) the

depar tment

re l led

upon

the

records

gcods

imFOrted

the

10.

applicant in the -base perlod, supplemented by information

supplied by the applicant. Those records contained, inter

alia, the tarLfE classlficaticn which was applied to those

goods

the

time

they were

Imported; the tariff

classification applied to the garment pieces entered for

home

consumption by the

applicant in that base period was that for

"parts". The evidence cf Mr. Thompson 1s that in determlning

the base the department regarded itself

as bound by the

classification so recorded; further that, unless the Collector of Customs amended the records, there would be no deFrture .from .the orLginal c.lassificatioon in determlning

the base.

According to the correspondence put in evidence and

paragraph 15 of the Statement

of Reasons furnlshed by the

Acting Assistant Secretary, Cuota Control,

?OK the "decision"

in relatlon to which thzs application

is brought, on 2 June,

1981 a representatlve of the applrcant's agent and

Mr. Vlahos

had a dLscussion with offlcers of the Quota ContrDl Tariff

and Revenue aranches

of the Departxent of Business and

Consumer Affalrs.

It appears from a letter dated 24 June,

1981 from F.M. McDonogh, signing for the

Assistant Secretary,

Tarrff, to the applicant's agent and from the Statement of Reasons that the sublect of these discussions y.las the dassificatlon of the parts Lmported in the December shipment. According to the Statement of Reasons, xr. Vlahos

hnd the representative

of the applicant's agent in those

d i scuss ions

"were

adv i sed

t ha t

ce r t a in

goods

( i . e .

goods

imported

the December shipment) could

not

be regarded as

subs t an t i a l ly comple t e and were

iden t i f i ed and c l a s s l f i ed a s

parts

for

garmen t s " :

fu r the r ,

t ha t

" M r .

Vlahos

raised

t h e

ques t ion

o f

r e fund

du ty

pas t

sh ipments

en te red

ing

complete quota (sic) and t h a t Mr,

Vlahos was advised t o

c o n t a c t

the

C o l l e c t o r o f Customs

i n r e s p e c t t o

this

mat te r" .

The

evidence is t h a t

t h e

d i s c u s s i o n s

t o o k

p l a c e

wi*

view

t o b r i n g i n g i n t o q u e s t l o n t h e c l a s s i f i c a t i o n

Melbourne

customs

a u t h o r i t i e s

o f

t h e

December

shipment of

par ts

and

t l e r e

is 'no

evidence

t o

t h e

t e r m s

any

d i s c u s s r o n

r e l a t i n g

t o

t h e

q u e s t i o n

t h e

d e t e r m i n a t i o n

the

"base" n o t i f i e d

t o t h e

a p p l l c a n t

on 10 March,

1981.

The

let ter

o f

2 4 June ,

L 9 8 1

conf i rmed

t h e

c o n t e n t

o f

the

d i s c u s s i o n on 2 June,

1981..

It stated that the goods were

correctly

c l a s s i f i e d

w i t h l n

i t e m

60.05.171

(1.e.

t h e

item

app ly ing

pa r t

t o

ga rmen t s )

a l s o

s t a t e d

t h a t

t h e

Co l l ec to r

o f Customs

in Melbourne

had

been

advlsed

t h a t t h a t

was

the

c o r r e c t

c l a s s i f i c a t l o n

o f

t h e

g a r m e n t s

I n

t h e

December shipment.

d i d

not

appear

f rom

fur ther

correspondence

the evldence of iXr. Vlahos

tha t

the appl lcant sought

refund

. .

o f

d u t y

i n

t h e

l L g h t

o f the

views

expressed

the

Canberra

Customs

au tho r i t i e s .

Fu r the r

exchanges

the

p e r i o d

J u l y

1981 t o January

1982 occurred between

the

a p p l l c a n t ' s

a g e n t

a n d t h e a p p l l c a n t ' s s o l i c i t o r s

the

one hand

and

the

Quota

12.

the

Bureau

Customs,

Canberra

the

o the r .

a p p e a r s

t h a t

Ju ly

1981

the

applicant renewed

the submisslon made r n

t h e

l t t e r

January,

1981

regard ing

the

de te rmina t lon

L t s base

b u t no

amendment

t he base has been

made.

It was common ground

between

t:?e p a r t i e s that the

de termlna t ion ,

da ted

1 7 December,

198i, was made m

exe rc l se

o f the' powers

conferred

under

S .

273(1)

the

Customs

A c t

and,

requi red by

tha t s e c t i o n , was madc

i n an

instrument

i n K i t l n g .

There

was

a l s o h0

d i s p u t e

t h a t

It was made l n

o r d e r

t o

g r v e

e f f e c t

t o

t h e

new

t a r i f f

quo ta

r r angemen t s

r e f e r r e d

t o

e a r l l e r .

M r .

Ostrowski

informed

the

Court

that

t he dec l s ion desc r ibed

i n

t h e a p p l i c a t i o n

was

cons t i t u t ed by

d e t e r m i n a t i o n

made

b y

t h e

M l n L s t e r ' s

d e l e g a t e

o n

1 7

December,

1981.

The

d e t e r m l n a t i o g

w a s

h e a d e d

" M l n l s t e r i a l

Determination - Quota Goods" and

re fer red

t o

f l g u r e s

and

d e s c r i p t l o n s

c o n t a i n e d

i n

p a r t i c u l a r

columns

t a b l e

a p p e a r i n g

t h e

same

page .

When

t h e

a p p r o p r i a t e

tranSp0SltiOnS

from

tine

t a b l e

s r e

made,

t oge the r

.rith Some

mlnor

adjustment

the

arrangement

words,

the

operative

p a r t of

the determlnatron

read as

fol lows

"In

pursuance

of Sect ion 273 of t h e Customs A c t

1901, I, t h e delegate of the

Mln i s t e r

for

t he

t lme

be ing

adminis te r lng

the

A c t ,

he reby

de t e rmine

t ha t

i tem

672

Schedule

P a r t

t o

t h e

Customs

T a r i f f A c t 1966 as proposed

t o be

altered

s h a l l

a p p l y t o goods

t h a t are

k n r t t e d

c r o c h e t e d

c o a t s ,

j u m p e r s ,

card igans ,

sweaters and

t h e l ike and

tube

t o p s ,

e n t e r e d

f o r

home

consumption

the

o w n e r

s p e c i f i e d

i n

t h e

s c h e d u l e

a t t a c h e d

h e r e t o

a n d

I n

r e s p e c t

any

such

owner,

such

quan t l ty

a s

xo t

t o

exceed

ur ing

the

pe r iod

commencing

t h e f l r s t d a y o f J a n u a z y

L982

and ending on

the

f i rs t day

December

1982 t h e amount

s p e c i f i e d o p p o s i t e t h a t

owner

in the

abovementioned

schedule

and

t o which

goods

the

tem 60.05.150 applles;

and

(ii)

en te red

for

home_ consumpt lon not ear l ie r than

the f irst day of January 1982 a n d

n o t

l a t e r

t han

the

t h i r t y

f i r s t

of December 1982: i n

t o t a l n o t i n excess

of 9514092."

The

determinat ion

included

the

f l g u r e

"8201"

I n a

box

headed

"quota per iod",

and

the words "This Determination is n o t

t r a n s f e r a b l e "

t h e

foo t

the

document.

Opposlte

the

d e s c r i p t i o n

" o w n e r "

t h e

w o r d s

"as

p e r

a t t a c h e d

s c h e d u l e "

appeared.

Annexed

t o the determlnat lon

submit ted

evidence

w a s a page

whlch

w a s

p a r t

s c h e d u l e c o n t a x l n g , I n t e r a l l a ,

the names of various firms or companies

uncler

the heading

"owner

name"

and,

opposi te

each

name,

f l g u r e s subsumed

under

columns

headed,

i n t e r a l ia ,

"Base",

"Ent i t lement"

and

"Allocation" .

Apparently the complete

schedule

contained

the names o f

a l l

impor te rs a f fec ted

the determination.

Neither the column

headed

"Base" nor

the

column headed

"Entitlement"

in the schedu le

was

r e f e r r e d t o i n t h e body o f the

. determination.. The determlnaticn

only

r 'efqrred

t o ;WO

p a r t s

the schedule, namely,

the p a r t setting o u t the name

o f t he

owner

and

t h e

p a r t

u n d e r

t h e

column

headed

"Aliocat lon"

recordmg

f i g u r e

o p p o s i t e

t h e

name

o f

t h e

owner.

the

column

"Allocat ion"

opposl te

the

a p p l i c a n t ' s

name

there

appeared

the

fLgure 30302 .00 .

It was common g r o u n d

t h a t

f l y u r e

represented

3 0 , 3 0 2

u n i t s

ga-ments

and

d l d

no t

r ep resen t

amount of money.	-
-

It 1s apparent on an

ana lys i s

o f

the

t e x t

o f

t h e

d e t e r m l n a t l o n

t h a t ,

i n

r e s p e c t

t h e

a p p l x a n t ,

it determined

tha t i tem 572

Schedule

P a r t

the

Customs Tarlff

Act

"as proposed

a l t e r e d " , would

apply

resGect

of " ' m l t t e e

o r crocheted

coacs ,

lumpers ,

cardigans,

sweaters

and

the

l lke

and

tube

tops"

(being

ocds

whlch

l tem

60.05.150

the

Schedule t o the Customs T a r l f f

A c t as

proposed

t o

z l t e r ed

would otherwise apply)

"en tered

-Cor hcrne

consumption"

the

applicant in the perlod 1 January 1982 to 31 December 1982 in a

quantity not exceedlng 30302 units. In short the respondent

determined that item

672 (instead of item

60.05.150) of the

Customs Tarlff Act would apply to the first

30,302 goods (wltfiin

the description mentioned) entered f o r home consumptlon by t:?e applicant in 1982, The rate of customs duty under the ne'w arrangements in respect of goods to whlch item 672 applied was

50%. whereas the

rate of customs duty where item

6ir.05.150

applied was 50% plus $5-00 per garment; hence the effect of the

determination was to. apply a lower rate of customs. duty to the

first 30,302 knitted coats., jumpers, cardigans etcetera enteree

f o r home consumption by the applicant

in the

12 month period

commencing 1 January, 1982.

In the language

of the Bureau G:

Customs Notices the number of goods of the category mentioned

the	determlnation which an importer could import during the

specified period

at a lower rate of duty was the importer's

"quota".

In my opinion, it follows that, notwcthstanding the

recltatlon of other figures under the columns headed "Sase" anc

"Entitlement" In the schedule, the determination

made on l7

December, 1981 dld not "determine" the

"Base" - nor dld i:

determine the "Enritlement"

of the applicant "for the seven year

- .

perlod"

commencing

1st

January,

1982.

Plainly the

determinatlon was not a decision determining "the Applicant's

tariff quotas for the seven year perlod comnericrnq" 1 January,

assertion to that effect; the determunation vas lmlted on its

face to goods to

be "entered for home consumption" durlng

1982.

Further, even

if the amended application were to

treated as if it had words inserted Into it so that its thirl line read the l'. . applicant's base for the purpose of fixin5

tarLff quotas for the seven year period commencing

1st January",

irr

oplnion the determination could not be construed

"determinlng" the appl-cant's base. The determinatlon certain11

dld n a t state that It "determlned" that base: the flgbre

in the

column headed "base"

in the schedule to the determination shoulc

be read as merely recording (not dete-vlning) the figure whlcf

was in fact used in the determlnatlon as the base. Further, as

has been shown earlier, the applicant had been notified some

nine months previously that its "base performance

has

beer

determlned" at the figure of 71,132.

That notiflcatlon, on 1C.

March, 1981, of the base performance flgure havlng

been

"determined" is necessarily inconsistent wlth that base havlnc been "determined" by the declslon made by the resgondent on 1' December, 1981.

.	A	further	reason	for	re~ectlng the	constructlon	f	the
- _

determlnation, made under S . 273 of the Customs Act, as havin, "determlned" the appllcant's base 1s that, In my oplnlon, tha. section does not contemplate or authorize a iete-minatlon by :h( Minister or his delegate, cf an importer's "base" ln

17 L

particular period for the purpose of using that base as

a factor

in allocating a quota in respect of a certain category of goods

to that importer. Section	2 7 3	of the Customs Act provides as
follows :-

"273-(1) The Minister may determine, by instrument

in writing, that, subject

to the condltions, If

any; speclfied in the determlnation, an

item, or a

proposed item,

of b Customs Tarlff that is

expressed to apply to goods, or to a class or kind

of goods, as prescribed by by-law shall apply, or

*shall be

deemed to have applied, to the partlcular

goods specifled in the determination.

(2) The Minister may make

a determinatlon

under the last preceding. sub-section f o r the purposes o f an item, or a prclposed Item, of a Customs Tariff whether or not he has made a by-law

for the purposes

o f that ltem or proposed ltem.

( 3 )

Where, under this section, the Mlnister

determlnes that an item, or a proposed item, of a Customs Tariff shall apply, or shall be deemed to have applied, to goods, that Ltem or proposed item,

shall, subject to this Part and to the conditions,

if	any, specifled in the determlnation, apply, or

b e deemed to have applled. to those goods as

those goods were specifled ln a by-law made

for

the

purposes of that ltem or proposed item and in force

on the day on which those gocds

are or were entered

f o r home

consumptlon?'

The

determinatiort whlch the Mlnister may nake under

S .

273 of the Act is explicltpy spelt oct and the determlnatlon

17 December, 1981 conforms to the conchticns contalned

ln S.

273. In my opinion S . 273 cdnnot be construed in any sense as empowering the Minister to determine the applicant'

S "base".

18.

The

fundamental d d f i c u l t y i n

t he way

o f

t h e a p p l l c a t i o n

i s

t h a t

t h e a p p l l c a n t

r e a l l y

seeks

t o have

s e t a s i d e

dec i s lon

t h a t

t h e a p p l l c a n t '

"base performance"

i n the two

year

per-od

1978-80 was ?l,

132

u n i t s :

t h a t

was

made

c l e a r

i n two

ways.

F i r s t ly ,

the

a p p l i c a t i o n

itself

r e f e r s ,

i n

paragraph

( a ) , t o

71,132

uni t s -

Secondly ,

hLs

f i n a l

address ,

M r .

Qstrowski ,

after havlng time t o cons ide r

whe the r

t he

app l i ca t ion

r equ i r ed

amendment,

s a i d

t h a t

h e

would

not

seek leave t o amend

t h e

a p p l i c a t i o n

s a y l n g

"I have

thought

about

LL and

t h i n k the

end

res i l t is t h a t I do

not

want

t o make any

amendments.

Whichever

way I t r y

t o

c l a r i f y

t h i n g s ,

the

end

r e s u l t

seems

t o m e t h a t

they

seem

t o f l n l s h u p ,

second

thoughts , not being clearer

all" -

He also r e f e r r e d t o "the

base

performance

which

1 s what

u n d e r

t h e

a l

t t a c k ,

t h e

b a s i c

i s s u e " .

However,

t h e

dec l s lon

a s t o the

a p p l i c a n t ' s

base

performance

l n

i t s

f i n a l

amended form was

made

on 10 March, 1981, t h a t 1s t3 say, :line

months

before

the

de te rmlna t ion

whlch

the

appl lcant

seeks

review as consti tuting

the--decrslon

and

Mr. Ostrowski 5216 ln

his- opening

address

t ha t t h e deczslon of

10 Xarch,

1981 w a s no t

determlnat ion chal lenged

the

p r e s e n t a p p l i c a t l o n .

short ,

the amended

app l i ca t ion

be fo re

the

Court ,

both

i n Zts wrr€ten

form

and

as explalned

oral

s t ibmisslons,

Soes

n o t seek t o rev lew

the

dec ls lon

which

the

appl lcant

r e a l i t y

wlshes

t o h a v e s e t a s i d e ( i . e .

t h e d e c l s l o n t h a t

the

a p p l l c a n t ' s

base

was

71 ,132

u n l t s )

and

<?e

de te rmina t lon ,

made

l 7

December, 1981, whLch It, does

eek

t o

have

s e t

a s lde

dld

n o t

19.

d e t e r m i n e

t h a t

base

p e r f o r m a n c e

f l g u r e .

~ c c o r d i n g l y ,

t h e

app l i ca t ion mus t

dismissed.

However, as. the. matter has

been

argued

a t some

l eng th

shall

express

very

brlefly m y opinlon as to

ther

a rguments

advanced i n suppor t of

the attack o n

t h e d e c i s i o n

allocating

base

t o the

applicant.

M r .

O s t r o w s k i

i n

f i n a l

address

said t h a t

the a p p l i c a n t - bid n o t rely upon paragraphs

2 and

( a d only

relied upon ground

6 a s a

"catch-all")

what were descrlbed as

the grounds of the

app l i ca t ion

bu t

wh ich

were

I n

f a c t

t h e

p a r a g r a p h s

s e t t i n g

o u t

the

r e a s o n s

t h a t

t h e

a p p l i c a n t

was

"aggrieved by the dec l s ion" .

Tkle "grounds" so described. relied

upon

t h e a p p l i c a n t w e r e i n

the

following

terms :-

IL1.

The

p r o c e d u r e s

t h a t

were

requi red

law

t o

observed

connect lon

w i t h

t h e making

the	decis ion were not observed.

The

making

of the

decLsion

was

improper

exercise

o f t h e

power

confer red

t h e

e n a c t m e n t

i n

p u r s u a n c e

which

i t

w a s

p u r p o r t e d t o

made.

The

d e c i s i o n

v o l v e d

e r r o r

o f

law,

whether

n o t

t he

e r ro r

appea r s

t h e

r eco rd o f t he dec i s ion . "

20.

A s t o ground

1, which mirrors

5(1) ( b ) of

the J u d l c i a l

Review A c t ,

M r .

Ostrowski

submltted

that

procedures

required

law

t o be observed in connect lon wlth

the

maklng

the dec ls lor .

had

n o t been.

observed.

H e

conceded

tha t

could

pOlnt

a n y

f a i l u r e

t o

b s e r v e

procedure

required

s t a t u t e

and

sought to r e l y upon

the

p rocedures

which he said were

required

by case law.

Reference

was made

t o

t h e

d e c l s l o n s

t he

Administratlve

Appeals

Trlbunal

i n

R e Gissinq

C o l l e c t o r Of

Customs (1977) 1 A.L.D.

144 and i n lie Renaul t

'VholesalePty.

L t d . v C o l l e c t o r o f Customs

(No:

3 )

(1978) 2

A.L.D.

111.

was

submitted

t ha t

t i nese

ca ses

i l l u s t r a t ed

t he

p rocess

reasonlng

which

the

Minister

o r h is

de lega te

1 s

requlred

empluy

ln determlning the t a r l f f

c l a s s i f l c a t l o n

a p p r o p r i a t e

t c

p a r t i c u l a r goods.

IR my opln lon

there

i s

s u b s t a n c e

i n

t h z t

submission.

authority was

c l t e d f o r

t he p r o p o s i c i o n

t h a t

che

words

"procedures

Ynat were requi red by law",

appearing

S(1)

(b )

t h e

J u d i c l a l

Revlew

Act,

extend

bey0r.d

procedures

requi red

s t a t u t e o r

subordinate

l e g i s l a t i o n

t o

inc lude

the

processes of lega l reasonlng e x t a n t i n l e g a l d e c l s l o n s . I accept 'Lhe submlsslon of M r . Moshlnsky, of counsel, who appeared

f o r the

r e sponden t ,

t ha t

t hose

words

not

so extend

and

that

has

n o t b e e n

e s t a b l i s h e d

t h a t

t h e r e

was

any

f a i l u r e

observe procedures required

law.

Ground 3 , whlch, it w a s explained, was based upon e

Content ion

that

the

respondent

reachrng

the

dec ls lon

:?ac

f a l l e d

t o

a k e

i n t o

a c c o u n t

r e l evan t

zons lde ra t lon ,

wa:

. ..

. __

- .

.	closely related to ground	4, namely, that "the decislon involved
-

an error of law". As I understood it Xr. Ostrowski's submnlsslnn

in relation to ground

3 vas that, in calculating the applicant's

base, Customs authorities had acted upon the records it

kept,

which recorded

all entries for home consunption by the

applicant

of garment pieces as parts, and dld not consider whether those

garment pieces had been properly classified in those entries.

He contended that this application of the records of entry \=as

"mechanical" and amounted to

a failure to take lnto

account a

relevant consideration- Whilst the evidence of Mr. Thompson

showed that mporters' bases were calculated on the- basLs of

recorded entries, without considerxng whether the garment pleces

had been properly classified as parts in those recorded entries,

that is n o t sufficient

establish

that a relevant

consideration was not

taken into account. It would be necessary

for the applicant to establish that the customs authoritles were

bound to consider whether the goods referred to

m those records

had been properly classified.

It should be noted that

the

calculation of

base in respect of importers was purely an

administrative procedure undertaken as a factor in the allocation of a quota as foreshadowed in the propose;-

arrangements.

In undertaklng that task the customs authorltres

were not under any duty to observe statutory criteria and it was

largely a matter

f o r

them to determine whlch matters they

regarded as relevant in fixing bases (cf. Sean Investnencs

P t y .

Ltd. v Mackellar (1981) 3 8 A.L.R.

363 at 3 7 5 ) .

In the event the

basrs chosen for the calculation of the base

wzs set out in

t h e

Bureau of Customs notlces which made it clear that rellance

would be placed upon the records of entries m detarmming the

base for mdividual Importers. In my oGulion, there is no

implication made in them that the classiflcation l n those

lrecords would be reconsidered; I accept Mr. Noshinsky's

subnussion as to the meaning of tile words "If entered correctly"

appearlng in paragraph 11 of BCN 8Q/L60.

Ground

4 simLlarly assumes that, in establlshlng the

base, the customs authorlties were bound to consider the

question of whether 'the garments had been correctly

classified

in the earlier recorda. For the reasons qlven that subrn1ssLon

is also re~ected.

Even if I am wrong in regard to the obligatLon

of customs

authoritles to reconslder the origlnal classlflcatlon of

'he

goods, 1.

do not acceDt

Mr. Ostrowksi's subrnlssion that the

origlnal classifications lnvolved an error

of k w in that those

classifications were contrary to the "Rules of t:- InterpretLtion of the First Schedule" appearxg An Part 1 of t.

First Schedule to the Customs Tarlff Act

1-366-72.

The description of goods b y reference t3 whlch the

apQlicant's lmports during the base period were classified was contained in a Minlsterial by-law made mder ?art X V l of the Customs Act- Mr. OstrowskL submltte2 that the by-law was, as a matter of. law, "a part of tine Schedcl? to the Custons Tarlff

A c t " .

He conceded t h a t h e

was

unab le t o p o l n t t o

any sectlon of

t h e

s t a t u t e which

provided

t h a t t h e

Minister's by-law

was

t3 be

p a r t of

the

Schedule t o the Customs T a r i f f

A c t and

then

said

"There is no such

sec t ion .

Notwi

ths

tanding

tha t ,

submissmn

t h a t

s u c h

by-law

d e t e r m i n a t l o n

h a s

f o r

a l l

p u r g o s e s

not

v i r t u a l l y , h a s

f o r

a l l

p u r p o s e s

t h e

e f f e c t

be ing

i n

t.he

Schedule

t m t h e Customs

Tar i f f

A c t

. .

t ha t

de te rmlna t ion

n r

by-law

has

t h e e f f e c t of be ing in

t he

Schedu

t o

the

CustoPs

T a n -

A c t "

(Transcr ip t

age

137). Mr. Ostrowskl

sought

t o

suppor t

t ha t

submiss ion by r e fe rence to the dec i s lon

o f

E l l i c o t t

, J.

in . Toohey's

case

(1981) 36 A.L.R.

64 and of

the

' F u l l

Court

appeal

from

that

dec i s ion

( ( 1 9 8 2 )

A.L.R.

2 6 0 )

b u t

i n

opinlon,

the

judgments '

i n

those

cases

not

supDort

the

submission-

O n t h a t

m a t t e r

M r .

Moshlnsky's

submission

was

t h a t

t h o s e

r u l e s

t h e i r

f a c e

o n l y

a p p l y

t o

t h e

m t e r p r e t a t i o n

t h e F i r s t t h a t i n this case the respondent was

S c h e d u l e

t o

t h e

Customs

T a r i f f

A c t .

H e

po in t ed

ou t

n o t

i n t e r p r e t i n g

words

lr:

t h a t

Flrst

Schedule

because

the

relevant

!	a l l the	c i rcumstances	of t h e case, rnc luding	thc	fact	t h a t	t h e
i	!

i	determinat ion	was	l i m i t e d	m	i t s	ope ra t ion	t o	goods	t o	be
I .

t	1 ;	e n t e r e d for home	consumption	in	1982.	There	i s	cons iderable
i	i	i

[1983] FCA 411

22 Dec 1983