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Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Customs - proposed anti-dumping action - securities proposed to be required upon importation of motor tyres from New Zealand - power to require securities before imposition of anti-dumping duties - considerations to be taken into account before such securities may be required - relevance of international agreements relating to tariffs or trade.Administrative Decisions (Judicial Review) Act 1977, ss.5 and 6; Customs Act 1901, ss.4, 7, 42, 43 and 45;
Customs Tariff (Anti-Dumping) Act 1975, ss. 5, 6, 7, 8, 9, 10, 11 and 13; Customs Securities (Anti-Dumping)
Amendment Act 1982, and Customs Tariff (Anti-Dumping)
Amendment Act (No.2) 1982.
Customs - Dumping duties - Dumping of motor tyres imported into Australia - No anti-dumping duties imposed - Comptroller-General of Customs decided to require cash securities upon importation of motor tyres manufactured in New Zealand - Application for judicial review - Whether Comptroller-General has power to require securities before imposition of anti-dumping duties - Whether securities may be required only for compliance with Customs Act - Purpose of taking securities - Whether securities may be required for protection of Australian industry - Insubstantial quantity of dumped goods - Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5, 6 - Customs Act 1901 (Cth), ss 4, 7, 42, 43, 45 - Customs Tariff (Anti-Dumping) Act 1975 (Cth), ss 5, 6, 7, 8, 9, 10, 11, 13.
Administrative Law - Customs duties - Dumping duties - Decision to require cash securities upon importation of goods manufactured in New Zealand - Application for judicial review - Whether Comptroller-General has power to require securities before imposition of anti-dumping duties - Whether securities may be required only for compliance with Customs Act - Whether securities may be required for protection of Australian industry - Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5, 6 - Customs Act 1901 (Cth), ss 4, 7, 42, 43, 45 - Customs Tariff (Anti-Dumping) Act 1975 (Cth), ss 5, 6, 7, 8, 9, 10, 11, 13.
Statutes - Interpretation - "For compliance with this Act" - Customs - Whether compliance with Customs Act only - Customs Act 1901 (Cth), s. 42(1). The applicant, a company incorporated in New Zealand, carried on business in New Zealand as a manufacturer of motor tyres and exported a quantity of tyres to Australia. During the latter half of 1982, the Comptroller-General of Customs purported pursuant to s. 42 of the Customs Act 1901 (the Act) to impose cash securities upon the importation of tyres by the applicant into Australia. At that time no dumping duty had been imposed. The applicant applied to the Federal Court of Australia for a review of the decision of the Comptroller-General of Customs that cash securities be required or taken pursuant to s. 42 of the Act in respect of importations into Australia of tyres manufactured in New Zealand by the applicant. The application was made pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (the Judicial Review Act).
Held: Dismissing the application - (1) The phrase "for compliance with this Act" in s. 42(1) of the Act, when properly construed, means that the customs is empowered by s. 42 to require and take securities not only for compliance with the Act but for compliance also with the Customs Tariff (Anti-Dumping) Act 1975 (the Dumping Act) and the Customs Tariff 1966, since both those latter Acts provide that the Act is incorporated and is to be read as one with each of the Acts, and both impose duties of customs.
Cadbury-Fry-Pascall Pty Ltd v. Federal Commissioner of Taxation [1944] HCA 31; (1944) 70 CLR 362, followed.
Carmody v. F. C. Lovelock Pty Ltd [1970] HCA 35; (1970) 123 CLR 1, referred to.
(2) The Dumping Act expressly indicates Parliament's intention to pick up and apply the provisions of s. 42 of the Act to enable effective anti-dumping action to be taken prior to the actual imposition of dumping duties.
Deputy Federal Commissioner of Taxes v. Elder's Trustee & Executor Co. Ltd [1936] HCA 64; (1936) 57 CLR 610; Kirkness v. John Hudson & Co. Ltd (1955) AC 696; R. v. Comptroller-General of Customs; Ex parte Woolworths Ltd [1935] HCA 37; (1935) 53 CLR 308, distinguished.
(3) Pursuant to s. 42(1) of the Act securities will be taken "for compliance with this Act" if they are taken for the purpose of protecting Australian industry, that being the essential purpose and object of the Dumping Act.
(4) It is impossible to conclude that the action taken or proposed is so unreasonable as to be without any evidentiary foundation.
(5) Anti-dumping action may be taken where injury is being caused to Australian Industry and where exports are coming from a number of countries no one of which is itself exporting a substantial quantity of dumped goods.
(6) Although the New Zealand tyres were not the cheapest tyres of the kind available on the market, it does not follow that the New Zealand exports were not causing material injury to Australian industry.
(7) The Comptroller-General's approval of "immediate cash security action" was a decision for the purpose of the Judicial Review Act.
HEARING
1982, December 15-17, 21-23; 1983, February 25. 25:2:1983Application to the Federal Court of Australia pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 for review of a decision of the Comptroller-General of Customs.
R. B. Macfarlan and A. W. Street, for the applicant.
K. Mason Q.C. and L. S. Katz, for the respondents.
Cur. adv. vult.Solicitor.Solicitors for the applicant: Stephen Jaques Stone James.
Solicitor for the respondents: B. J. O'Donovan, Commonwealth Crown
E. F. FROHLICH
ORDER
1. The application be dismissed.2. The question of costs be stood over for later argument.
DECISION
This is an application made pursuant to s.5 of the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act") for the review of a decision said to have been made by the second respondent, the Comptroller-General of Customs, that cash securities be required or taken pursuant to s.42 of the Customs Act 1901 in respect of the importations into Australia of motor tyres manufactured in New Zealand by the applicant. Relief is also sought under s.6 of the Act.The applicant is a company incorporated in New Zealand. The first respondent is the Minister for Industry and Commerce. The second respondent, as I have said, is the Comptroller-General of Customs.
The applicant does not carry on business in Australia nor is it registered here as a foreign company. When the proceedings were in their interlocutory stages, a submission was made on behalf of the respondents that the applicant, because it had no legal presence in Australia, had no standing under the Act to bring this application. That submission was not made at the final hearing, not, I think, because counsel had lost faith in it, but because the realities were such that it would have been easy enough for the applicant to have procured an associated company which does carry on business in Australia to prosecute the proceedings whether as an additional or a substituted applicant. I have mentioned the matter because I wish to make it clear that I have not considered the submission since the interlocutory stages when I expressed the tentative view that the proposition was open to serious doubt. However, I expressed no final view in relation to it, and, of course, do not do so now.
The applicant carries on business in New Zealand, inter alia, as the manufacturer of motor tyres. Three types of tyres are manufactured namely, bias tyres, textile radials and steel radials. Only radial tyres are in question in these proceedings.
A radial tyre has a reinforcing belt of either steel or textile. Steel radials are now fitted on almost all new cars sold in Australia. Theoretically textile radials are interchangeable with steel radials but steel radials have become the dominant product in the Australian market place because of a market view that they are a better and longer lasting product.
The applicant commenced significant export of tyres to Australia in February 1980. On 1 April, 1980, it entered into a distribution agreement with an Australian company, B.F. Goodrich Australia Limited. B.F.Goodrich has a marketing arrangement with a company, Tyrepower Limited. Under this agreement there are specified certain total aggregate purchase levels throughout Australia which it is thought ought desirably be achieved. The relevance of this evidence is that it indicates the possible level of imports of New Zealand tyres into Australia. As I understand the evidence the applicant does not export to Australia quantities of radial tyres which exceed in number one per cent of the tyres sold in Australia each year. It is not its intention to export tyres which will exceed in number 1.5 per cent of the tyres sold in Australia each year, although the agreement itself contemplates that exports could eventually rise to 3.5 per cent.
On 28 September, 1982, the second respondent published Australian Customs
Notice No.82/194. The notice, so far as it is relevant,
was as follows:
"DUMPING INQUIRY - PASSENGER CAR TYRES FROM NEW ZEALAND, NETHERLANDS,
REPUBLIC OF KOREA
In accordance with Australia's obligations under Article 6(f) of the GATT
Anti-Dumping Code, interested parties are advised that
inquiries have been
initiated to determine if export prices to Australia of certain passenger car
tyres from New Zealand, Netherlands
and Republic of Korea are less than the
normal value within the terms of Section 5 of the Customs Tariff
(Anti-Dumping) Act 1975.
This action follows a complaint made to the Department by the Australian
tyre manufacturing industry that material injury is being
caused and is
further threatened by dumped imports of tyres falling within sub-item
40.11.300, statistical codes 18 and 29 of the
Australian Customs Tariff.
The industry has submitted evidence, based on published price lists and
supplementary information lodged confidentially that export
sales of tyres
have been made to Australia at price levels which represent apparent dumping
margins up to 46% when compared with
tentative normal values for tyres in the
above-named countries. It has been claimed that such allegedly dumped imports
are causing
and further threatening injury to the local industry as evidenced
by loss of market share, inability to recover production cost increases
and in
some cases, necessitated actual price reductions. It has also been claimed
that underutilisation of plant capacity has been
caused resulting in higher
unit production costs and possible staff retrenchments.
Preliminary local inquiries have been made into the local industry's
claims and the Department is satisfied that there is sufficient
evidence to
justify the initiation of formal inquiries.
It is in the interest of importers of the above goods to ascertain whether
their purchasing prices of current and projected shipments,
at FOB level, are
less than normal values, and if so, to decide whether to continue purchasing
at such prices."
I shall later refer to the GATT Anti-Dumping Code and to the legislation
mentioned in the notice.
On 29 September, 1982, a Mr. Reith, who is employed in the Department of Industry and Commerce as "Assistant Secretary Dumping" wrote a memorandum to the Comptroller-General. The memorandum made reference to Customs Notice No.82/194 above set out. It reported that certain inquiries into the question of whether dumping of tyres from New Zealand, the Netherlands and Korea was continuing had been completed. The conclusion was that "prima facie evidence suggests that substantial dumping is occuring from the nominated sources", that is the three countries referred to. Mr. Reith recommended that "immediate cash security action" be taken. On 9 October, 1982, the Comptroller-General approved the course proposed.
On 21 October, 1982, the Comptroller-General published a further Customs
Notice, 82/218. The heading on the notice referred only
to tyres imported from
the Netherlands and Korea. The notice referred to the earlier Customs Notice
82/194. Amongst other things
the notice said:
"Pending the completion of inquiries, provisional measures are being
introduced for certain tyres exported from Netherlands and
Republic of Korea.
These provisional measures will be in the form of dumping cash securities and
will apply to tyres entered for
home consumption after the date of publication
of this Notice. Collectors of Customs have been notified of normal values
tentatively
assessed by the Department and they will determine the need for
securities having regard to the amount, if any, by which the export
prices are
lower than the tentative normal values."
On 28 October, 1982, these proceedings were commenced. On that day a judge of this Court granted the applicant an injunction ex parte restraining the two respondents from requiring or taking cash securities pursuant to s.42 of the Customs Act in respect of the importation into Australia of tyres manufactured in New Zealand by the applicant.
There are in evidence two draft Customs Notices neither of which was in fact published. These show that, if the injunction granted on 28 October, 1982, had not been granted, the decision to require cash securities in respect of the importation of tyres would have extended to imports from New Zealand as well as from the Netherlands and Korea.
I next refer to the legislation which is in question in the proceedings. The
first Act to which I refer is the Customs Tariff (Anti-Dumping) Act 1975 ("the
Dumping Act"). The Act was amended by the Customs Tariff (Anti-Dumping)
Amendment (Countervailing Duties) Act 1982 (No.68 of 1982). That Act did not
amend the Dumping Act in any relevant respect so far as this case is
concerned. Section 6 of the Dumping Act provides that the Customs Act is
incorporated and shall be read as one with the Dumping Act. Section 7 provides
that duties of customs are imposed in accordance with the Dumping Act.
Sub-section 8(1) of the Dumping Act is as follows:
"(1) Subject to sections 13 and 14, where the Minister is satisfied, as to
any goods that have been exported to Australia, that
-
(a) the amount of the export price of the goods is less than the amount of
the normal value of those goods; and
(b) by reason thereof -or is threatened or the establishment of an Australian industry has been or may be materially hindered; or
(i) material injury to an Australian industry has been or is being caused
The expression "normal value of goods exported to Australia" is defined in
s.5 of the Act. Relevantly it is the price paid for like
goods sold in the
ordinary course of trade for home consumption in the country of export in
sales that are arms length transactions
by the exporter or, if like goods are
not so sold by the exporter, by other sellers of like goods. Subsequent parts
of s.5 are intended
to provide guidance as to the manner of arriving at the
price with which the section is concerned. For instance sub-section 5(5)
is as
follows:
"(5) Where the normal value of goods exported to Australia is the price
paid for like goods and that price and the export price
of the goods exported
-
(a) relate to sales occurring at different times;of the sales to which they relate,
(b) are not in respect of identical goods; or
(c) are modified in different ways by taxes or the terms or circumstances
Sections 9, 10 and 11 of the Dumping Act provide for the imposition of third country dumping duties, countervailing duties and third country countervailing duties respectively. The detail of these sections is not material but it should be mentioned that each contains a provision comparable to sub-paragraph 8(1)(b)ii) above set out.
Section 13 of the Dumping Act, so far as it is relevant, is as follows:published under sub-section 8(1), 9(1), 10(1) or 11(1) in respect of goods that have been entered for home consumption.
"(1) Subject to this section, the Minister shall not cause a notice to be
(4) Sub-section (3) applies to goods -ought to have known, that the amount of the export price of the goods was less than the normal value of the goods and that by reason thereof material injury would be caused to an Australian industry; or
(a) that have been imported into Australia by an importer who knew, or
Section 14 of the Dumping Act prohibits the Minister from publishing a notice under any provision of the 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.
I should interrupt this account of the legislation to say that none of the Customs notices to which I have referred is or was intended to be a notice for the purpose of s.8 of the Dumping Act. The notices were either notices informing interested persons of the Customs' intention or of action intended to be taken pursuant to s.42 of the Customs Act to which I have yet to refer. Notices under the Dumping Act are given by the Minister. Action under s.42 of the Customs Act is taken by the Comptroller-General or a Collector.
The effect of a notice or declaration under s.8 is to declare that the section applies to the goods the subject of the notice. Pursuant to sub-section 8(3) of the Act there is then charged upon the goods to which the section applies a special duty of customs known as dumping duty. By sub-section 8(4) the dumping duty is a sum equal to the amount by which the export price of the goods is less than the normal value thereof as defined. The intention of the legislation is to impose upon the importation of dumped goods a duty equivalent to the amount needed to bring the export price of the goods up to the price which similar goods would bring in their country of origin. Whether this duty falls on the exporter or the importer, the likely effect of its imposition is to prevent overseas competition which is unfair to Australian industry.
I next go to the relevant provisions of the Customs Act. Section 42, so far
as it is relevant, is as follows:
"(1) The Customs shall have the right to require and take securities for
compliance with this Act, for compliance with conditions
or requirements to
which the importation or exportation of goods is subject and generally for the
protection of the revenue of the
Customs, and pending the giving of the
required security in relation to any goods subject to the control of the
Customs may refuse
to deliver the goods or to pass any entry relating
thereto.
. . . . . . . . .Collector on behalf of the Customs."
(3) The rights of the Customs under this section may be exercised by a
Because of an argument relied upon by the applicant I should mention also sub-sections (1A) and (2) of the section. These, in effect, extend the right of the Customs to take securities under the section to cases involving the payment of a penalty under the Customs Undertakings (Penalties) Act 1981 and for the purposes of s.16 of the Excise Act 1901.
The "Customs" is defined in s.4 to mean the Department; see s.19B of the Acts Interpretation Act 1901. Reference should also be made to s.7 which provides that there shall be a Comptroller-General of Customs who, under the Minister, shall be the permanent head of the Customs and shall have the chief control of the Customs throughout the Commonwealth.
Section 43 provides that a security under s.42 is to be given in a manner
and form approved by a Collector of Customs and may be,
subject to that
approval, by bond, guarantee, cash deposit or any other method. Sub-section
45(2) is as follows:
"(2) A security in respect of any duty that may be payable on goods under
section 8, 9, 10 or 11 of the Customs Tariff (Anti-Dumping) Act 1975 shall be
cancelled before the expiration of the prescribed period after the date of the
security."
Sub-section 45(3) specifies the "prescribed period" mentioned in sub-section
(2).
For the purposes of dealing with arguments based on the provisions of s.14 of the Dumping Act earlier referred to it is necessary to refer to certain international trade agreements some of which are in evidence. There is first the General Agreement on Tariffs and Trade ("GATT"). It is not in evidence. There is then an agreement on the implementation of Article VI of GATT. There are two such agreements, one being the original agreement and the other the revised agreement. Both are in evidence. The reason why both were tendered was uncertainty as to which applied. Eventually it was agreed that it was the earlier agreement which was the relevant one. There is little difference between the two agreements and nothing turns, for the purposes of this case, on whether one applies the first or the second.
Although New Zealand is a party to GATT it is not a party to either of these agreements. Australia is a party to all agreements.
In addition to the agreements to which I have referred there is an agreement to which Australia and New Zealand alone are parties. It is the New Zealand Australia Free Trade Agreement ("NAFTA") and it is in evidence.
The submissions of the applicant originally concerned the question of whether it was lawful for the Comptroller-General to act pursuant to s.42 of the Customs Act and whether, if it were, he had nevertheless acted illegally or wrongfully because he had not observed the provisions of s.14 of the Dumping Act which required him to be satisfied that action he proposed to take was not inconsistent with Australia's international trade obligations. However, discussion which occurred during the argument in relation to matters relied upon by the applicant in support of its submissions based on s.14 eventually led its counsel to submit that, for certain reasons later to be mentioned, there was no warrant for the taking of anti-dumping action in respect of the importation of tyres from New Zealand. Thus the applicant's submissions fall into three groups. In relation to some of these submissions it will be necessary to refer to further evidence. But I think it more convenient to do that as I come to deal with each submission.
Before coming to the detail of the submissions I should mention certain amendments to the legislation which came into effect after the events in question in this case. The legislation is contained in the Customs Securities (Anti-Dumping) Amendment Act 1982 (No.137 of 1982) and the Customs Tariff (Anti-Dumping) Amendment Act (No.2) 1982 (No.136 of 1982). Both these Acts came into operation on 24 November, 1982. By the first of them there was inserted into s.42 of the Customs Act a further sub-section, (1B), which provides that the right of the Customs under sub-section (1) to require and take a security includes the right to require and take securities in respect of any duty that may be payable on goods under the Dumping Act. The amendment is expressly said not to imply that the right did not exist under the Customs Act in the form in which it was prior to the amendment. The same Act also removed from the area of judicial review under the Judicial Review Act decisions made under s.42 of the Customs Act to require and take securities in respect of duty that may be payable under the Dumping Act.
The second of the Acts above referred to repealed s.14 of the Dumping Act.
It was agreed by counsel that except in one respect later to be mentioned the amendments to the legislation to which I have referred were not relevant for the outcome of the present proceedings.
The submissions made on behalf of the applicant based on s.42 of the Customs
Act were as follows:
1. The section does not permit the Customs to take securities in respect of
duties that are or may become payable pursuant to the
Dumping Act.
2. The section is only apt to permit the taking of securities in respect of
anti-dumping duties which are in fact due and payable.
3. The only purpose, relevantly, for which securities may be taken under the
section is the protection of the revenue. The evidence
establishes that the
reason why cash securities were to be taken was to provide interim protection
of Australian industry. That was
not a purpose which would authorise the
taking of the securities.
The two submissions made concerning the absence of justification for
implementing anti-dumping action were:
4. The export price of the tyres to be imported was not less than the normal
value thereof; see s.8(1) of the Dumping Act (p.7 hereof).
5. Imports of motor tyres from New Zealand were not causing or threatening to
cause material injury to the Australian motor tyre industry
(ibid).
The applicant's submissions based on failure to comply with s.14 of the
Dumping Act, that is the then obligation of the Minister not to publish a
notice under that Act unless he were satisfied that the publication
of the
notice was not inconsistent with Australia's obligations under any
international tariff or trade agreement were:
6. There was no evidence of dumping because the New Zealand prices adopted for
the purpose of the preliminary inquiry which had taken
place were not prices
which it was appropriate to adopt for this purpose pursuant to the definition
of "normal value" in s.5 of the
Dumping Act and in both the agreement on the
implementation of Article VI of GATT and the provisions of NAFTA. For
practical purposes this submission
is no different in substance from
submission 4 above.
7. The respondents failed to consider whether the New Zealand exports were
causing or threatening to cause material injury to the
Australian industry as
distinct from the question of whether exports of tyres from other countries
were having or threatening to
have this effect. This submission is only an
aspect of submission 5 above.
8. The action proposed by the respondents was contrary to the provisions of
Article 8 of the GATT implementation agreement because
the notices therein
provided for had not been published. That submission has no counterpart in any
of the previous submissions.
In addition to disputing each of these propositions, senior counsel for the respondents submitted that there was no jurisdiction under the Judicial Review Act because there was no relevant decision. He submitted that the Court may have had jurisdiction to grant relief under s.6, as distinct from s.5, of that Act but contended that relief under s.6 would no longer be of utility because of the provisions of the amended legislation. This submission was made generally but was made particularly in relation to submissions 6, 7 and 8 because of the repeal in the amending legislation of s.14 of the Dumping Act.
Also in relation to the applicant's submissions based upon s.14, it was submitted that the GATT implementation agreement had no relevance to the present case because New Zealand was not a party to it.
I proceed to deal with these submissions in the order in which I have stated
them.
Submission 1
This submission proceeds upon a misconception of the Customs Act. The misconception is that duties of customs are imposed by the Customs Act itself. If that were so the submission would have substance because s.42 makes no mention of the Dumping Act. On the other hand it expressly extends the operation of the section to penalties which a person may become liable to pay under the Customs Undertakings (Penalties) Act 1981 and to duties under the Excise Act 1901. However, duties of customs are imposed by the Customs Tariff Act 1966; see s.15(1); cf. Cadbury-Fry-Pascall Pty. Limited v. Federal Commissioner of Taxation [1944] HCA 31; (1944) 70 C.L.R. 362. The Dumping Act is another Act which imposes duties of customs; I refer to s.7 earlier mentioned and also to Carmody v. F.C. Lovelock Pty. Limited [1970] HCA 35; (1970) 123 C.L.R. 1.
Section 42 empowers the Customs to take securities "for compliance with this
Act". The Customs Tariff Act, like the Dumping Act, contains a provision
(section 5) to the effect that the Customs Act is incorporated and is to be
read as one with the Tariff. The effect of such a provision was discussed by
Williams J. in the Cadbury
case (supra at p.388). After referring to some
authorities his Honour said of a similar provision in the Income Tax Act 1939,
incorporating
the provisions of the Income Tax Assessment Act 1936:
"The Tax Act and the incorporated Assessment Act is, therefore, a single
Act and one which falls within this section of the Constitution. But the only
effect of the section is to invalidate any provision therein dealing with any
other matter than the imposition of taxation."
Thus the Customs is empowered by s.42 to require and take securities, not only for compliance with the Customs Act, but for compliance also with the Tariff and the Dumping Act, both those latter Acts providing that the Customs Act is incorporated and is to be read as one with each of the Acts. Each, as I have said above, imposes duties of customs.
For the above reasons the first submission is rejected.Submission 2
This submission is based upon the proposition that securities may not be required unless there is payable upon the importation of the goods in question a customs duty which is then and there due and payable. The position was said to be no different if regard were had to the words "for compliance" with the Act rather than to those specifying the protection of the revenue as a purpose for which securities may be required. No question of compliance with the Act could arise until duties were actually imposed.
The evidence establishes that at the time action was purported to be taken pursuant to s.42 of the Customs Act no dumping duty had been imposed in respect of any shipment of tyres likely to be imported in the immediate future. Action under s.8 of the Dumping Act had not resulted in any notice declaring the goods to be goods to which the section applied. That stage had not been reached. It may or may not be reached in the future depending on the outcome of inquiries which were continuing at the time the evidence in the case concluded.
But for certain provisions of the legislation I would have had reservations concerning the power to take securities in situations where there was no duty payable at the time of importation. However, the argument is, in my opinion, resolved against the applicant by the presence in the legislation of sub-paragraph 8(1)(b)(ii), the comparable provisions in ss.9, 10 and 11 and s.13. Of these provisions s.13 is the most important. It authorises the publication of a notice under sub-section 8(1) of the Act in respect of goods that have already been entered for home consumption so long as security has been taken in relation to them under s.42 of the Customs Act in respect of any duty which may become payable under s.8. Thus the section authorises the retrospective imposition of dumping duties so long as the conditions provided for in sub-section 13(2) and in certain other sub-sections to which I need not refer have been complied with. Moreover, the provisions of sub-section 13(2) refer expressly to s.42 of the Customs Act and contemplate that securities may be taken prior to the actual imposition of any duty. They may be so taken whether they are for the protection of the revenue or for compliance with the legislation.
It was submitted on behalf of the applicant that the provisions of the Dumping Act relied upon by the respondents ought not to be given the effect which I think they have because the words of s.42 themselves did not extend the Customs' power to cases where duties were not due and payable. It was said that the provision was included in a taxing statute and ought to be strictly construed. It was further said that references to s.42 in the Dumping Act were made by the draftsman under the erroneous assumption that s.42 went further than it did.
I agree that the provision is contained in a taxing statute. But I have to consider the Dumping Act which is intended to protect Australian industry. It is true that it imposes a tax or duty but I would not readily apply to such an Act the strict construction which the principle relied upon sometimes calls for.
In support of his proposition that Parliament had included provisions referring to s.42 of the Customs Act in the Dumping Act under the erroneous assumption that it extended to the taking of securities in respect of importations upon which no duty was presently payable, counsel referred to Deputy Federal Commissioner of Taxes v. Elder's Trustee and Executor Company Limited [1936] HCA 64; (1936) 57 C.L.R. 610 and to Kirkness v. John Hudson & Co. Limited (1955) A.C. 696. I do not refer to the detail of these cases. They establish that there may be occasions when Parliament does enact further legislation under the erroneous impression that earlier legislation upon which the later legislation is based makes a particular provision. If this is not in fact the case, the later legislation will not achieve Parliament's intention. But always the question is one of construction.
The two authorities relied upon establish that later legislation may sometimes be used to resolve an ambiguity in earlier legislation. But if the words of the earlier Act are clear and unambiguous resort to later legislation will not be permitted even where it is reasonably clear that Parliament has proceeded under a wrong impression of the meaning of the earlier provision. In my opinion this is not a case of ambiguity. Nevertheless it is a case of quite a different kind from those relied upon by counsel for the applicant. It is a case where Parliament has in the Dumping Act expressly indicated an intention to pick up and apply the provisions of s.42 of the Customs Act to enable effective anti-dumping action to be taken prior to the actual imposition of dumping duties.
Finally, in relation to submission 2, reliance was placed by counsel for the applicant upon dicta in The King v. Comptroller-General of Customs; ex parte Woolworths Limited [1935] HCA 37; (1935) 53 C.L.R. 308. In my opinion that case was decided upon totally different facts and is not of assistance in the resolution of the present problem.
For the reasons I have given submission 2 is rejected.Submission 3
I propose to deal with this submission upon the basis that the evidence establishes that securities were required, not because of any fear on the part of the Customs that dumping duties ultimately imposed would not be paid, but because the taking of securities was necessary, in the view of the Customs, for protection of the Australian motor tyre industry. I do not refer to the detail of the evidence because it is all one way. But in saying what I have, I do not wish it to be thought that I have been unmindful of submissions made on behalf of the respondents that securities were taken in fact for the protection of the revenue as well as for the purpose I have mentioned. It will be seen that I have not found it necessary to deal with those submissions.
In developing this submission counsel for the applicant concentrated his attention upon the question of whether the purported action pursuant to s.42 was for the protection of the revenue of the Customs. That, however, is only one of the purposes for which securities may be required. The Customs are also empowered, as I have mentioned, to take securities "for compliance with this Act". For reasons earlier given the reference to "this Act" is a reference, inter alia, to the Dumping Act itself. Thus it follows that securities may be required for compliance with the Dumping Act.
In dealing with the submission it is first necessary to look to the purpose of the Dumping Act. Its essential purpose is the protection of Australian industry. Its object is to protect manufacturers here from exposure to what, as the GATT agreements indicate, is internationally regarded as unfair competition brought about by the dumping of goods on to the market at prices below which the goods would normally be sold in their home country. The Dumping Act sets out to achieve this purpose by imposing duties upon the importation of such goods. The duties are intended to force the exporter and/or importer of the goods back to a situation under which an amount (made up of export price plus duty) equivalent to a normal selling price will have to be paid. The complex of sections which make up the Dumping Act provide the machinery whereby all this is to be achieved.
However, it is not sufficient simply to have regard to the purpose for which the Dumping Act was enacted. That is because the relevant words are "for compliance with this Act", that is, inter alia, for compliance with the Dumping Act. They are not "for the purposes of this Act". But if, as my rejection of submission 2 suggests it is, it be lawful to require securities in advance of the actual imposition of dumping duties, why will securities not be taken for compliance with the Act, if they are taken for the purpose of protecting Australian industry, that being the essential purpose and object of the Dumping Act. Once one concludes, as one should, that s.13 of the Dumping Act along with sub-paragraph 8(1)(b)(ii) and its counterparts in ss.9, 10 and 11 of that Act empowers the taking of securities prior to the imposition of any dumping duty, the inquiry is at an end. Subject to the applicant's further submissions the Customs have proceeded in the way intended by Parliament.
For the above reasons the third submission is rejected.Submission 4
The evidence upon which it was concluded on behalf of the respondents that
the applicant's export price for the goods was below
their normal value is to
be found in a letter dated 15 October, 1982, from a company associated with
the applicant to a Mr. Balzary,
an officer of Customs. The letter set out the
prices charged for tyres in New Zealand. Relevantly it said:
"Our domestic prices are:tyres
National OE
Price Price to Govt
Freight Motor Contract Bulk Buy
Paid Assemblers
One-off Ex Factory Ex Factory
Sale to Auckland Auckland
Dealers 95 tyres 180 tyres 500
per day per day per day---------
-------- ---------- ----------
165x13 textile 76.65 48.92 39.03 32.19column of the table. The abbreviation "OE" stands for "original equipment", and refers to tyres sold to motor vehicle assemblers to be fitted to new vehicles. It is common ground that none of the tyres exported to Australia would be likely to be so used. They were for fitting to existing vehicles to replace tyres which had worn out.
185x14 88.0 56.99 44.37 36.96
165x13 steel 92.0 60.24 45.48 33.12
185x14 106.50 69.55 52.23 38.34"
The Customs selected the prices for steel radial tyres under the second
The Customs selected the figures in the second column as best indicating the relevant domestic price because calculations based on exports of steel radial tyres to Australia revealed that these averaged out at 110 tyres per day over a calendar year. The calculation was done upon the basis of a 365 day year, not upon the basis of the number of working days in a year.
Tyres exported to Australia comprise not only steel radials but also a considerable quantity of textile radials and some bias tyres. If the calculation were done by taking into account the entirety of the applicant's exports to Australia, the average daily figure would be approximately 157 rather than the 110 adopted by the Customs.
The applicant challenged the exercise done by the Customs because:1. It was inappropriate to select prices charged motor assemblers for tyres to be fitted to new vehicles.
Evidence given on behalf of the respondents acknowledged the difficulty of the exercise. But it was said that even if one adopted a daily figure of 157 instead of 110 the third column was inappropriate because it involved supply pursuant to a government contract. Prices obtained for supply to a government would not necessarily provide a sound indication of the price for which the tyres were or could be sold on the New Zealand home market. The respondents' evidence acknowledged that the second column might be misleading because it was for the sale of tyres to be fitted to new vehicles, that is it was for tyres not, as in the case of the exports, to be fitted as replacement tyres to existing vehicles. However, if one were to ignore the second column, the more appropriate column to use was the first column which would result in an even greater dumping margin. Whatever column one used, criticisms could be made of the course taken. The correct method of arriving at normal value might need to involve the discarding of all the figures in the columns and the assertainment of the normal value by resort to one of the methods provided for in s.5 of the Dumping Act, sub-section (5) which I have earlier set out.
The substantial submission of the respondents was that, bearing in mind the nature of the exercise, the need to act quickly because of the believed harm which was being caused Australian industry and the whole of the circumstances of the case, including a great deal of evidence which the respondents had from the local industry, the course taken was a reasonable one.
It is to be remembered that the challenge which is being made is not to the actual imposition of dumping duties, but to the propriety in October 1982 of requiring cash securities whilst further inquiries continued. The applicant's arguments based on power at that stage to require securities have, for the reasons given in relation to submissions 1, 2 and 3, failed. Upon the assumption that the respondents have the requisite power, the question arises as to the circumstances in which they will be justified in acting as they wish to do. Section 8 of the Dumping Act itself requires no more than that the Minister be satisfied. If the matter had proceeded to a stage where dumping duties had been imposed, there could have been no successful challenge to that imposition if the evidence revealed a sufficient basis for that satisfaction. In no way would the Court assume to itself the task of inquiring into what particular normal values should be.
But, as I have said, that stage has not been reached. In those circumstances the Court would be loath to interfere unless it were satisfied that there was no reasonable basis whatsoever for the action which was proposed. The relevant provision of the Judicial Review Act seems to me to be paragraph 5(1)(h) rather than paragraph 5(1)(e) which was heavily relied upon by counsel for the applicant. The essence of paragraph (h) is that there was no evidence or other material to justify the making of the decision.
In determining what my approach should be I have been assisted by reference
to the judgment of Lockhart J. in Homebush Bay Timbers
Pty. Limited v.
Minister for Industry and Commerce (15 February, 1983). There his Honour said
(p.35):
"The Department cannot be expected to prophesy the precise amount of any
subsidy that the foreign Government has or may have paid
or granted. But
before requiring security it must address itself to the question whether a
subsidy has been paid or granted and,
if so, its amount or extent and whether
by reason thereof material injury to the relevant Australian industry has been
or may be
caused. Some reasonable attempt must be made by the Department to
determine these matters before requiring security. The effect of
requiring
security can be far reaching. The imposition of countervailing duty and any
earlier taking of security, necessarily affects
Australia's relations with the
trading partner concerned and people engaged in trade both in Australia and
the other country. Such
actions here affect fiscal policy and private
interests there. They are serious steps and must not be taken lightly."
His Honour was concerned with a case which involved the taking of securities
for the possible imposition of countervailing duties
under s.10 of the Dumping
Act rather than with the imposition of dumping duties under s.8. But what his
Honour has said is as apt for this case as it was for that with which he was
dealing.
Having given the matter close consideration, I am not satisfied that this is a case where the Court should interfere. As the evidence called on behalf of the respondents conceded, its approach was open to a number of criticisms. For reasons earlier mentioned, none of the columns of the table may give a reliable guide to the normal values of the tyres in question. If I were myself charged with the exercise, that is the view I would probably take. But, as I have earlier said, the matter is not for the Court. It is for the Comptroller-General or one of the Collectors to make the best judgment he can in the circumstances of each case. Upon the facts of this case I find it impossible to reach the conclusion that the action taken or proposed is so unreasonable as to be without any evidentiary foundation.
In particular, although the adoption of the figures in the second column of the table as a basis for determining normal values is open to question, it should not be regarded as so unreasonable or unwarranted as to lead to the conclusion that there was no basis at all for the decision which was made. Despite strong submissions to the contrary by counsel for the applicant I do not see why the respondents should have been obliged to adopt a daily supply figure based on all exports rather than upon exports of steel radial tyres alone. The allegations of dumping concerned only steel radial tyres and the evidence establishes that these presently are the dominant tyre upon the Australian market. It is true that the quantity of 110 tyres per day is above the figure of 95 in the heading of the second column of the table and also that it represents the price obtained from sellers of new motor vehicles. But one might think that the price to them would be less than the price obtained from purchasers whose business it is to replace tyres on existing vehicles. That would lead one, as the Customs evidence suggested, to adopt the figures in the first column rather than the second.
I have weighed these various matters and the careful submissions made about them by counsel for the applicant as best I can. Having done so, I am not satisfied that there was not a sufficient evidentiary basis for the conclusion which was arrived at.
Accordingly I reject submission 4.Submission 5
This was based on two matters; firstly the indiscriminate lumping together of New Zealand exports along with those of the Netherlands and Korea, and, secondly, upon evidence that the New Zealand tyres were not being sold in Australia as the cheapest tyres which could be obtained on the market. Those selling the New Zealand tyres were not price leaders. As to the first of these considerations there is evidence from the respondents that although the New Zealand share of the market has not to date been more than one per cent, that is still a significant percentage. In any event a consideration of the entirety of the legislation in question does not suggest that dumping action may not be taken where harm is being caused to Australian industry and exports are coming from a number of countries no one of which is itself exporting a substantial quantity of dumped goods. If five per cent of a particular market was an insignificant percentage, but 25 per cent was not, it would be my view that dumping action might properly be taken in respect of the exports of five countries each of which had five per cent of the market. Any other view would leave a very large loophole in the legislation for which its language provides no warrant.
In support of his submissions on this aspect of the matter counsel for the applicant referred to evidence which suggested that the only reason dumping action was taken in respect of New Zealand exports was because of a fear that if it were not it would appear that there had been discriminatory action taken in favour of New Zealand against both the Netherlands and Korea. There are statements in some of the exhibits which would suggest that this was a reason why dumping action was taken. But there is also evidence that the reason it was not taken at the time securities were required in respect of exports from the Netherlands and Korea was because of a need for consultation pursuant to the provisions of NAFTA. In all the circumstances I do not consider the reference in the evidence to discriminatory action a reason why the action which was proposed to be taken in respect of New Zealand exports was unlawful.
It remains to consider the submission based on price leadership. The evidence tends to establish that the New Zealand tyres were not the cheapest tyres available on the market. But to my mind that does not lead to the conclusion that the New Zealand exports were not causing material harm to Australian industry. All sorts of considerations would need to be taken into account before one could reach such a conclusion. The respondents had ample evidence from Australian industry sources that harm was being caused. They were clearly entitled to reach the conclusion that there was a substantial risk that this was the case. I emphasise that the stage where actual dumping duties were to be imposed had not been reached. The respondents were concerned only with the question of whether action under s.42 of the Customs Act should be taken.
For the above reasons the applicant's fifth submission is rejected.Submissions 6 and 7
These raise no different considerations from those raised by submissions 4
and 5. Accordingly both submissions are rejected.
Submission 8
As previously stressed, the action which has so far been taken involves no more than a decision to require securities pursuant to s.42 of the Customs Act. Action has not been taken pursuant to s.8 of the Dumping Act. It is therefore inappropriate to reach a conclusion at this stage upon the question of whether any such action would in fact contravene s.14 of the Dumping Act. But for the repeal of that section on 24 November, 1982, it may have been appropriate, assuming the evidence established a threatened breach of the section, to contemplate giving injunctive relief pursuant to s.6 of the Judicial Review Act. But such a course would not now be appropriate because s.14 has gone.
I therefore reject submission 8. My rejection of it means that I do not need to consider the argument that the GATT implementation agreement has no application in the present case because New Zealand is not a party to it. Nor is it necessary to consider the detailed submissions which were made based on the provisions of that agreement and certain of the evidence in the case.
I have thus rejected each of the applicant's submissions. I do not express a concluded view on the question of jurisdiction which was argued by senior counsel for the respondents, but I do think that the Comptroller-General's approval on 9 October, 1982, of the action proposed by Mr. Reith (see p.5 hereof) is a decision for the purposes of the Judicial Review Act.
For the reasons I have given the application fails and is dismissed. Because of certain matters discussed in argument, I do not now deal with costs. This is a matter which can be dealt with after the parties have had an opportunity of considering what I have said.
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