Re Stephen Raymond Stubbs and Robyn Ann Stubbs Trading As Wandwills v the Minister, Department of Industry and Commerce and JA Conlon, Assistant Secretary, Quota Control Branch, Department of Industry and Commerce [1984] FCA 7 (7 February 1984)

FEDERAL COURT OF AUSTRALIA

Re: STEPHEN RAYMOND STUBBS and ROBYN ANN STUBBS TRADING AS WANDWILLS
And: THE MINISTER, DEPARTMENT OF INDUSTRY AND COMMERCE AND J.A. CONLON,
ASSISTANT SECRETARY, QUOTA CONTROL BRANCH, DEPARTMENT OF INDUSTRY AND
COMMERCE
No. G173 of 1983
Administrative Law
3 FCR 209

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
McGregor J.(1)

CATCHWORDS

Administrative Law - judicial review - refusal by Minister to grant allocation of base quota for importation of goods - whether refusal was improper exercise of power - taking into account an irrelevant consideration - failure to take into account relevant considerations - whether there was a breach of the rules of natural justice - whether opportunity to state merits of case was afforded - whether "onus" to show entitlement was imposed on applicants - alleged adverse preconceived opinion - whether delay, if any, constituted a breach of rules of natural justice - whether there was no evidence to justify decision.

Administrative Decisions (Judicial Review) Act 1977 s.5

Customs Act 1901 s.273.

Administrative Law - Judicial review - Refusal by Minister to grant allocation of base quota for importation of goods - Whether refusal was improper exercise of power - Taking into account an irrelevant consideration - Failure to take into account relevant considerations - Whether a breach of the rules of natural justice - Whether opportunity to state merits of case was afforded - Whether "onus" to show entitlement was imposed on applicants - Alleged adverse preconceived opinion - Whether delay, if any, constituted a breach of rules of natural justice - Whether there was no evidence to justify decision - Administrative Decisions (Judicial Review) Act 1977 (Cth), s. 5 - Customs Act 1901 (Cth), s. 273. The firm of which the applicants were proprietors was issued with an "invitation" by the Department of Industry and Commerce to apply for base quota. The applicants applied for an allocation of base quota for the calendar year 1983. Correspondence between the applicants and the Department followed and by letter dated 12 or 13 May 1983 the applicants were informed that their application had been refused.

No appeal was lodged by them with the independent arbiter but they filed this application in the Federal Court seeking revue of the decision to refuse their application on the grounds, inter alia, of an improper exercise of the power conferred on the first respondent by his delegate the second respondent, and also of a breach of the rules of natural justice.

Held: (1) The "invitation" to make application for base quota itself emphatically indicated that the successful applicant should show that he genuinely intended to import quota goods in 1983.

(2) The power conferred on the first respondent had not been improperly exercised by the second respondent.

(3) There was no statutory provision which required certain or any matters to be taken into account; nor any indication other than that general principles of fairness that they should be observed.

(4) No breach of the rules of natural justice had been made out and the application should be dismissed with costs.

(Per McGregor J.): Observations upon the content of the obligations imposed by the rules of natural justice in the circumstances.

R. v. City of London Licensing Justices; Ex parte Stewart (1954) 1 WLR 1325; Sean Investments Pty Ltd v. MacKellar (1981) 38 ALR 363; Testro Bros. Pty Ltd v. Tait [1963] HCA 29; (1963) 109 CLR 353; Mobil Oil Australia Pty Ltd v. Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475; Twist v. Randwick Municipal Council [1976] HCA 58; (1976) 136 CLR 106; Salemi v. MacKellar (No. 2)(1977) [1977] HCA 26; 137 CLR 396; R. v. MacKellar; Ex parte Ratu (1977) CLR 461; Nashua Australia Pt y Ltd v. Channon (1981) 36 ALR 215; FAI Insurances Ltd v. Winneke (1982) 5 6 ALJR 388; Durayappah v. Fernando (1967) 2 AC 337; R. v. Gaming Board for Great Britain; Ex parte Benaim [1970] EWCA Civ 7; (1970) 2 WLR 1009; Ridge v. Baldwin [1963] UKHL 2; (1964) AC 40; Russell v. Duke of Norfolk (1949) 1 All ER 109; Ceylon University v. Fernando (1960) 1 WLR 223; Ansell v. Wells [1982] FCA 186; (1982) 43 ALR 41; Re Pergamon Press Ltd (1971) Ch 388; Gaiman v. National Association for Mental Health (1970) 3 WLR 42; McInnes v. Onslow-Fane (1978) 1 WLR 1520; Election Importing Co. Pty Ltd v. Courtice [1949] HCA 20; (1949) 80 CLR 657; R. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group [1969] HCA 10; (1969) 122 CLR 546, referred to.

HEARING

Sydney, 1983, November 9, 11; December 21, 23; 1984, January 3, 4; February 7. 7:2:1984

Solicitors for the applicants: L.S. Davis & Associates.

Solicitor for the respondents: T.A. Sherman, Acting Commonwealth Crown Solicitor.
M.P.S.

ORDER

1. The application is dismissed.

2. The applicants are to pay respondents' costs.

Orders accordingly.

DECISION

STEPHEN RAYMOND STUBBS and ROBYN ANN STUBBS (applicants) trading as WANDWILLS have, pursuant to the Administrative Decisions (Judicial Review) Act 1977 (the Act) made application to review a decision of THE MINISTER, DEPARTMENT OF INDUSTRY AND COMMERCE (first respondent) by his delegate J.A. CONLON (second respondent), or the second respondent, made in or about May 1983. The decision was a refusal to grant to the applicants an allocation of base quota for the importation of goods in a certain category, viz. the textiles, clothing and footwear category pursuant to application made in response to an "invitation" dated 22 July 1982 in that regard to the applicants. This document, omitting formal parts, reads:-

"The Government has decided that Base Quota may only be issued to
genuine importers who hold Previous Import Performance (PIP). As
Departmental records indicate that you hold PIP, you may now apply
for an allocation of Base Quota using the enclosed form, provided
that you genuinely intend to import quota goods in 1983.

Your attention is drawn to Section 234(e) of the Customs Act
which is reproduced below.

Completed application forms must be recieved in this office by 31
August 1982 otherwise entitlement to 1983 Base Quota may be
forfeited.

Australian Customs Notice No. 82/141 sets out entitlement
provisions in respect of PIP transferred after the date of this
letter.

Yours faithfully
(SGD.) J.A. CONLON
A/g Assistant Secretary WANDWILLS
Quota Control

Customs Act - Section 234(e) - Customs Offences

'No person shall-
(e) make in any declaration or document produced, delivered
or furnished to any officer any statement which is untrue in
any particular or produce, deliver or furnish to any officer
any declaration or document containing any such statement.

Penalty $1,000.'"

The application dated 24 August 1982 read:-

"The applicant named below applies for the allocation of Base Quota
for the calendar year 1983 based upon holdings of previous import
performance. The applicant undertakes that upon the issue of any
1983 base quota allocated as a result of this application, that the
base quota will be used, for the purposes of entry and clearance of
goods owned by the applicant, at the appropriate concessional rate
of duty as specified in the Customs (Tariff) Act.

Legal Name of Applicant:WANDWILLS

. . . . . "

The application for base quota by applicants was followed by correspondence

between the parties to which I shall refer.

A letter dated 13 January 1983, purporting to be from the second respondent, was sent to Mr. Stubbs for the applicants in the following terms, formalities omitted:-

"I refer to your application for 1983 base quota in which the
declaration included the following words '. . . the base quota will
be used for the purpose of entry and clearance of goods owned by
the applicant. . . '
An integral element of the present textiles, clothing and footwear
program is that base quota be allocated only to the genuine
importer.
Wandwills has cleared a quantity of goods during 1982, a high
proportion of which were imported in the name of another party.
You are required to demonstrate on what grounds base quota should
be allocated to Wandwills for 1983. Until consideration has been
given to your response, no 1983 base quota will be released."

After internal departmental interchange and further correspondence, the

applicants were advised of the refusal of the application by letter dated 12 or 13 May 1983 (the May letter). Omitting formalities this read:-

"I refer to your Application for 1983 Base Quota signed on 24
August 1982 and other correspondence with your business since that
date.

Information available to this office indicates that your business
has almost no record of Base Quota usage for goods beneficially
owned by the quota holder. Your business has engaged extensively in
transfers of Previous Import Performance.

Under these circumstances Base Quota will not be allocated to your
business in any of the following quota categories: 110, 115, 118,
121, 125 and 129.

The Minister has provided for procedures whereby persons who are
refused allocations of Base Quota may, if they are of the opinion
that the decision is incorrect, lodge an appeal with the
Independent Arbiter. The Independent Arbiter will, following
examination of the appeal, make his recommendation to the
Minister."
Appeals should be addressed to

Mr. K M Archer CBE
Independent Arbiter
C/o Assistant Secretary
Quota Control Branch
Department of Industry & Commerce
BARTON CANBERRA ACT 2600

(sgd.) J.A. CONLON"

No appeal was lodged with the Independent Arbiter.

The grounds of the application are:-
"(1) The decision was an improper exercise of the power conferred
upon the First Respondent by his delegate the Second Respondent, or
the Second Respondent by the Customs Act, 1901 (as amended).

PARTICULARS

(Pursuant to the order of Morling, J, made the 26th August, 1983 and

supplied by letter dated 8th September, 1983)

(i) The decision to refuse to issue to the Applicants the Base Quota in categories 110, 115, 118, 121, 125 and 129 was based, according to the reasons propounded by the Respondents on the premise that the Applicants had "almost no record of Base Quota usage for goods beneficially owned by the quota holder. . . . (and had) engaged extensively in transfers of Previous Import Performance" - see annexure "B" referred to in the affidavit of Stephen Raymond Stubbs sworn the 8th November, 1983 and filed herein. In this regard the Applicants allege that the First Respondent by his delegate the Second Respondent or the Second Respondent took an irrelevant consideration into account when they purportedly exercised the power.

(ii) In making the decision to refuse to issue to the Applicants the said Base Quota, the First Respondent by his delegate the Second Respondent or the Second Respondent failed to take into account:

(a) that on the 24th August, 1982 the Applicants completed and signed an Application in the form prescribed by the First Respondent by his delegate the Second Respondent or the Second Respondent for the issue of the said Base Quota

(b) that upon the signing of the said Application the Applicants gave an undertaking that, upon the issue of the said Base Quota to the Applicants the same would be used for the purpose of entry and clearance of goods owned by the Applicants at the appropriate concessional rate of duty as specified in the Customs (Tariff) Act: and

(c) that at the date of the completion and signing of the Application and of the giving of the undertaking the Applicants were the holders of Previous Import Performance in categories 110, 115, 118, 121, 125 and 129: and thereby failed to take into account relevant matters when purporting to exercise the power.

(2) There was a breach of the rules of natural justice.

PARTICULARS

(i) The Applicants were not afforded the opportunity of stating the

merits of their case since the First Respondent by his delegate the Second Respondent or the Second Respondent did not indicate to the Applicants any specific charge or complaint and accordingly;

(ii) The First Respondent by his delegate the Second Respondent or the Second Respondent should not, in the letter of the 12th January, 1983, have placed on the Applicants the onus of proving they were entitled to the issue of the 1983 Base Quota;

(iii) The First Respondent by his delegate the Second Respondent or the Second Respondent indicated an expression of preconceived opinion in that they indicated the Base Quota would be withheld from the Applicants "pending further investigation of the Application" - see paragraph 7 of the affidavit of J.H. Hall sworn the 21st September, 1983 and filed herein;

(iv) The delay in giving the decision in the circumstances of this case infringe the rules of natural justice.

(3) There was no evidence or other material to justify the decision of the First Respondent by his delegate the Second Respondent or the Second Respondent.

PARTICULARS

- See particulars in Ground (1) above.

(4) The decision was otherwise contrary to law.

PARTICULARS

- See particulars in Grounds (1) and (2) above."

In the same document, the applicants claim -

"1. An order quashing or setting aside the decision of the Respondents

to refuse to grant to the Applicants 1983 Base Quota allocation.

2. An order that the First Respondent by his delegate the Second Respondent or the Second Respondent be directed to reconsider the Application dated 24th August, 1982 lodged by the Applicants in relation to the issue of the Applicants of 1983 Base Quota Allocation.

3. Such further order or orders as the Court thinks fit."

For reasons unnecessary to set out, senior counsel for the applicants has sought that certain relief by way of Declarations be granted.

The understanding of this matter will be facilitated by reference to background material contained, e.g. in the affidavit of John Herbert Hall employed in the Department of Industry and Commerce in the position of Acting Assistant Secretary, Quota Control Branch. He said in paragraphs (3) and (4) -

"The importation of some goods into Australia is controlled quantitatively by Tariff Quotas. Tariff Quotas provide for the importation of a defined ceiling of goods at "normal" rates of duty whereas goods imported above the Tariff Quota ceiling attract additional duty, commonly referred to as "penalty" duty.

A 7 year programme of Tariff Quotas providing assistance for the Textile Clothing and Footwear industries commenced on 1 January 1982. The major portion of Tariff Quota is allocated to persons with a record of importing like goods in a specified period, and is called Base Quota. Approximately 20% of Tariff Quota is made available by public tender and is called Tender Quota. Base Quota is issued to genuine importers as a proportion of their imports during the 2 base years ended 30 June 1980. Imports in the base period are known as "Previous Import Performance". Annexed hereto and marked with the letter "A" is a true copy of a document entitled "Explanatory Note on Goods Subject to Quantitative Restrictions" prepared by Quota Control Branch, Department of Industry and Commerce, which provides information with regard to the Tariff Quota system."

Annexure "A" contained the following statement under the heading "Base Quota" -

"Under the arrangements provided for the allocation of Base Quota the Government determined that the Base Quota should be issued to genuine importers as a proportion of their imports during two base years ended 30 June 1980. Imports in the base period are now known as "previous import performance" (PIP). (Under the earlier program previous imports were identified as base performance). To establish PIP for the current program importers were invited by various Bureau of Customs Notices to provide details of their imports in the two-year period mentioned above."

In the same document it was stated, inter alia, -

"Allocation of Quotas and Bona Fides of Quota Holders

8. It is recognised that the introduction of Tariff Quotas places a

scarcity value on both quota and PIP. There are some people who see quotas as a commodity which can itself be traded - generally for a financial consideration. Since 1979 the Government has been actively trying to minimise trading in quota.

9. The Government decided that, as an essential element of the current seven-year program, Base Quota, which made available free of charge, be allocated only to genuine importers. Initial advice was made, inter alia, in BCN 80/176 (page 7, "bona fides applicant"). The Department issued BCN 81/24 covering Base Quota allocation for 1982. In respect of 1983 and 1984 quota years the Department has written to each person or company holding PIP and invited them to lodge an application for Base Quota. Each application for Base Quota includes an undertaking regarding the intended use of quota allocated as a result of the application.

10. Following consideration of the report of the TC&F Review Committee (see BCN 80/167 pages 3/4 of Attachment to Media Release) on quota levels for the following year, the Government announces a level of goods (ceiling) which may be entered under quota. The Base Quota ceilings are used to calculate a "factor" which, when applied to the person's PIP gives the Base Quota he may expect to receive the following year.

. . . .

Genuine Importer Checks

13. An importer is regarded as genuine within the quota regime if he

has a genuine need for quota to clear his own goods. It is recognised that commercial circumstances may change. However quota holders who misuse quota by clearing goods owned by others or by applying for quota merely to transfer it are identified by investigation.

14. In August 1981 the then Minister for Business and Consumer Affairs approved the procedures which would be followed to put into effect the Government's decision that Base quota only be allocated to genuine importers. It has since been necessary to take action to prevent methods of deliberate circumvention of Government policy in this area. In particular the Minister agreed that, following examination of an application for Base Quota there are three options available to the Department.

- Quota released, where there is no basis for further examination

- Quota withheld, where there is evidence of misuse of quota or where

previous use of quota may be consistent with speculating in quota

- Quota allocation refused, where a person or company has clearly failed to establish his bona fides as a genuine importer

. . . . "

Senior counsel for the applicants conceded, in effect, that the material set out in this document is relevant to the facts with which this review is concerned.

Section 273 of the Customs Act 1901 reads -

"(1) The Minister may determine, by instrument in writing, that,

subject to the conditions, if any, specified in the determination, an item, or a proposed item, of a Customs Tariff 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 particular goods specified in the determination.

(2) The Minister may make a determination under the last preceding sub-section for the purposes of an item, or a proposed item, of a Customs Tariff whether or not he has made a by-law for the purposes of that item or proposed item.

(3) Where, under this section, the Minister determines that an item, or a proposed item, of a Customs Tariff shall apply, or shall be deemed to have applied, to goods, that item or proposed item shall, subject to this Part and to the conditions, if any, specified in the determination, apply, or be deemed to have applied, to those goods as if those goods were specified in a by-law made for the purposes of that item or proposed item and in force on the day on which those goods are or were entered for home consumption."

The firm, Wandwills, came into existence in November 1980. I shall treat, as have the parties, claims or assertions by, or in letters from, Stephen Raymond Stubbs as if made or written by, or on behalf of, the applicants. They commenced dealing in import quotas during 1981 and concluded a large number of transactions for the sale and purchase of Previous Import Performance (PIP) and tender quota up to August 1982. Mr. Stubbs gave evidence in which he accepted that the applicants were not "a genuine importer" prior to the end of December 1982. He stated -

"In 1982 prior to 31 August we were not attempting to be a genuine importer. We were a trading house. We imported a very small quantity of our quotable goods, but our main business during that period was more or less purchase and transfer of tender quota and PIP.

. . . . The purchase and resale of tender quota and previous import performance."

On its letterhead, Wandwills is described as -

"importers of fashion clothing import and export merchants."

One particular transaction in respect of base quota has been mentioned in evidence. In the affidavit of the second respondent, it appears that on or about 14 December 1982 the applicants had applied to receive by transfer substantial quantities of base quota from Target Australia Pty. Limited (Target). About the same date an advertisement appeared in the "Financial Review" in terms indicating that the Target quota was being offered for sale by the applicants. This was not denied in evidence by Mr. Stubbs; nor is it disputed that this is a fair view of the evidence. This might have been the first time that 1982 base quota had been sought to be attained by transfer by, or on behalf of, the applicants. Following application, the transfer of the base quota in question was approved on condition the applicants establish that they had goods on confirmed order and that such goods would be entered using the quota. However, no goods were entered by the applicants against it.

At material times the second respondent was Assistant Secretary of Quota Control, Department of Industry and Commerce. His duties included keeping under review the activities of businesses dealing in quota in order to decide their eligibility for quota under the textiles, clothing and footwear category.

Senior counsel for the applicants, in argument, conceded that it was not for this Court to determine the correctness or otherwise of the decision, or whether or not the applicants were a genuine importer. Rather the task for this Court was to determine what the decision maker took into account when he made his decision and whether he was entitled to take such matters into account.

Counsel pointed out that the so called "invitation" issued to the applicants included the application form specifically addressed to them. This document contained an undertaking; everything else apart, the applicants had to fill in and give that undertaking; the invitation for the application recognized, as the document showed, that the applicants were the holders of PIP. Therefore, said counsel, the applicants had a "legitimate expectation" that they would receive the quota. This meant, he submitted, referring to Ground 2 of the application, that the principles of natural justice applied to this situation. Referring to the first ground of the application and to the May letter, he submitted that the applicants, having no history of trading with the use of base quota, could offer with the application only the undertaking sought. The decision maker is taking into account that the applicants had no record of base quota usage, as mentioned in the May letter, constituted a reliance on extraneous matter. He called attention to the evidence given by Mr. Stubbs that the applicants were attempting to be genuine importers. He submitted that the trading in units which had been referred to in, for example, material before the decision maker, was not forbidden; rather, it was encouraged. Therefore, he said, proper weight should be given to the form of application itself including the undertaking it contained. However, the undertaking had not been taken into account. Further, the applicants had done everything possible to satisfy the Department as to their entitlement. He submitted that consideration of the Target transaction could have no relevance to his clients application, particularly in view of the letter from the applicants to the Department of Industry and Commerce dated 23 December 1982. He referred to the letter of 13 January 1983 set out above. He submitted, in support of the second ground of the application, that it was open to the criticism that it did not set out what was required of the applicants. As I understood his argument, he said that it was therefore fair comment for his client to answer in its letter of 2 February 1983, that the letter of 13 January 1983 was "misleading".

Counsel submitted that the delay in giving the refusal to the application until May 1983 was unreasonable; the answer should have been given before the beginning of 1983. The delay, in his submission, constituted a denial of natural justice. He conceded that not in all cases where a decision was to be made were the principles of natural justice applicable; but were in this case, particularly as the applicants held PIP. He referred to Nashua Australia Pty. Ltd. v. Channon 36 ALR 215 (Nashua) at p.225-226. The circumstances there, he said, were distinguishable. Matters, he said, which were considered relevant to the withholding of the quota by the second respondent should have been the subject of advice to the applicants, so they would know what "case" they had to meet. Further, he submitted, the respondent had and should not have had a preconceived view about the application. He referred to Nagle v. Feilden (1966) 2 Q.B. 633 (Nagle) at p.646; McInnes v. Onslow-Fane (1978) 1 W.L.R. 1520 (McInnes) particularly at p.1530; Salemi v. MacKellar (No. 2) [1977] HCA 26; (1976) 137 C.L.R. 396 (Salemi): Heatley v. Tasmanian Racing and Gaming Commission [1977] HCA 39; (1976) 137 C.L.R. 487. In addition, and by analogy, the failure to grant the application or a contemplation that it might not be granted, was equivalent to denying a "right to work" to the applicants; even if this could not be considered under the rules as a failure to accord natural justice, it was a capricious exercise of a discretion.

The delay resulted from the decision maker's indulging in an exchange of letters when he knew the probable decision would be that the applicants were not to receive a quota because they were not genuine importers. Therefore, the delay constituted an improper misuse of power, particularly when long before May 1983 the second respondent had made enquiries, discussed the matter fully with other officers and expressed the view that the applicants were "probably" not entitled. The respondents were therefore in a position to give the applicants a definitive answer long before May 1983. He referred to Thornton v. Repatriation Commission [1981] FCA 76; 35 ALR 485 (Thornton) at p.489: Regina v. Evans 62 L.T. 570 (Evans): Allen v. Sir Alfred McAlpine & Sons Ltd. (1968) 2 Q.B. 229 (Allen). In the result, he submitted, his clients were not given an opportunity to deal with the notion that they were not a "genuine importer". He referred to Halsbury's Laws of England 4th ed. Vol. 1. para. 74. Further, in support of Ground 1 of the application, he submitted that the respondents had failed to take into account at all, or give proper weight to, the application form completed and signed by the applicants and the undertaking contained therein; this had a special significance where there was no previous base quota. He submitted that there was no evidence or other material to justify the decision of the first respondent by the second respondent. He referred to Shrimpton v. The Commonwealth [1945] HCA 4; (1944) 69 C.L.R. 613. As to how an undertaking should be regarded, he referred to R v. City of London Licensing Justices. Ex parte Stewart (1954) 1 W.L.R. 1325 (City of London Justices). He submitted that the evidence of the second respondent concerning a grant of quota, viz. in respect of 1352 units in category 102, was a demonstration of the acceptance that the applicants were genuine importers. Further, he contended that the decision was otherwise contrary to law.

Senior counsel for the respondents submitted that the invitation, in requiring the applicant to be in possession of PIP and to make the application upon the form provided, which contained the undertaking, was setting out prerequisites for the making of an application. In order to become entitled to base quota, an applicant, who had satisfied these prerequisites, then had to be a genuine importer as Government policy indicated. The question as to whether the applicants were "a genuine importer" was what the second respondent had determined; it should be borne in mind that the second respondent was not considering only one application but other applications by other applicants including a company in which the applicants were sole directors and shareholders; having regard to previous activities of the applicants in trading in quota units, as was conceded, and to the Target transactions, the second respondent was entitled to refuse to accept the undertaking or not to be persuaded that the applicants were "a genuine importer". Further the contention that there was no evidence that the undertaking was taken into account was, he said, answered at least by the letter of 13 January 1983 (set out above) which quoted it. The form of this letter, according to evidence elicited in cross-examination was suggested by, and therefore considered by. Mr. Moore, (Director, Quota Control Branch) for the respondents. He drew attention to the word "usage" in the May 1983 letter. In his submission, as there was evidence upon which the second respondent could rely to make his decision, this Court was not entitled to consider whether or not that decision was correct. Weight which should be attached to evidence was a matter peculiarly for the decision maker. The onus of showing that the second respondent took into account irrelevant considerations or failed to take into account relevant considerations rested, he submitted, upon the applicants. He referred to Election Importing Co. Pty. Ltd. v. Courtice [1949] HCA 20; (1949) 80 C.L.R. 657 (Election) at p.665: Water Conservation and Irrigation Commission (N.S.W.) v. Browning [1947] HCA 21; (1946) 74 C.L.R. 492 at p.505 per Dixon J. (as he then was). Referring to legislation lacking an express statement of the considerations upon which the exercise of a power is said to depend, his Honour said -

"The discretion is, therefore, unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view."

and later -

"I have before remarked on the impossibility, when an administrative discretion is undefined, of a court's doing more than saying that this or that consideration is extraneous to the power." (authority cited).

Counsel cited The Queen v. Australian Broadcasting Tribunal; Ex parte 2HD Pty. Ltd. [1979] HCA 62; (1979) 144 C.L.R. 45 at p.49-50. He submitted that any evidence given by Mr. Stubbs before this Court as to his intention, had he received a base quota, was irrelevant; such evidence was not before the decision maker at the time he made his decision. He referred to concessions by Mr. Stubbs in evidence (quoted above) that Wandwills was not a genuine importer at any relevant time prior to making the application. Rather it had been a trader in units. It could not be said, he submitted, that to take into account the trading operations of the applicants both in PIP and in tender quota were considerations "extraneous to the power". The evidence showed not only that the Target transaction was properly taken into account, but also that during 1982 the applicants had imported very little goods in their own name; they had, in fact, imported goods in the name of others. The second respondent, in determining that the applicants were not "a genuine importer" did not base this decision on a fact or facts which did not exist. He submitted that s.5(1)(h) and s.5(3) of the Act did not apply; this was not a "no evidence" case. Even if, to the contrary of his argument, the second respondent had not taken into account the undertaking given in the application, there was nothing, he said, in any statutory provisions which, as a matter of law, required him to do so. He referred to Sean Investments Pty. Ltd. v. MacKellar 38 ALR 363 (Sean Investments) at pp.370, 371, 374, 375; Clarke and Kann v. Deputy Commissioner of Taxation (unreported - Sheppard J., 4 November 1983); in particular, to pp.16 and 17; Trimknit Manufacturing Pty. Ltd. v. Harvey Bates (unreported - Keely J., 22 December 1983). He submitted that the allocation of base quotas pursuant to the seven year programme was purely an administrative procedure undertaken by the Department within the statutory power to make determinations of concessional rates of duty referable, so he said, to s.273 of the Customs Act.

Counsel argued that the rules of natural justice did not apply to the situation here or, even if they did, they did not require the respondents in the circumstances here to provide to the applicants information as to the "case it had to meet" or a hearing. He referred to McInnes; Nashua. Moreover the applicants were provided with such information; they were given, as the correspondence showed, an opportunity to meet or discuss the matter. Letters written to the applicants on 14 December and 21 December 1982, showed the applicants that the question in the minds of the decision makers was whether the applicants would be operating as genuine importers; that the reply from Mr. Stubbs sought to justify his trading activities, indicating that he was well aware of that issue. The extent to which any such trading had occured was obviously within the knowledge of Wandwills. He referred also to a telex dated 25 February 1983, Nagle, he said, was not an authority as to natural justice; R v. Gaming Board for Great Britain, ex parte Benaim [1970] EWCA Civ 7; (1970) 2 All ER 528 (the Gaming Board case) at p.532, was concerned with an Act which laid down specific criteria to which regard had to be paid and thus it was distinguishable. Respondents anyway had complied with what Lord Denning at p.534 said -

"They must let him know what their impressions are so that he can disabuse them."

This, he said, was not a "legitimate expectation" case. Nor did the respondents "deprive" (in the sense used in Schmidt v. Secretary of State for Home Affairs (1969) 2Ch. 149 at p.170) the applicants of anything; that the applicants had PIP had nothing to do with the issue as to whether they were "a genuine importer". The circumstances were within the second classification by Megarry V.-C. in McInnes at p.1529. He referred also to Nashua as being under the same section of the Customs Act, viz. s.273, from which it could be deduced that the rules of natural justice had no application. Any question of delay, he submitted, did not fall under the heading of "natural justice"; in the cases regarding delay no decision had been given and the application was in the form of mandamus. See Evans; Thornton; or striking out as in Allen. He submitted that s.7 of the Act, not involved here, dealt with the situation where a decision had not been made. A delayed decision, he said, could not be described as "capricious". Nor could it be said to be "contrary to law" as stated in ground 4, said to be referable to s.5(1)(j) of the Act. Delay, he said, was not a matter which was covered by any of the grounds of a s.5 application. He submitted, anyway, that on the facts there had been no culpable inordinate delay, unreasonable or otherwise. He referred to Carter v. The Egg and Egg Pulp Marketing Board (Vict.) [1942] HCA 30; (1942) 66 C.L.R. 557 at p.584. He submitted that upon the facts of this matter it could not be said that the decision of the second respondent was "capricious" or one that no reasonable person could have made. By analogy, the decision to withhold the quota pending information that the applicants were a genuine importer could not be said to be unreasonable. He submitted that the notion of preconceived opinion, attributed by the applicants to the respondents, would operate only if it were shown that the decision maker was not willing to forgo his opinion after hearing the facts; on the evidence here, the second respondent was not unwilling to hear facts or change his opinion. He referred to The Queen v. Commonwealth Conciliation and Arbitation Commission; Ex parte Angliss Group [1969] HCA 10; (1969) 122 C.L.R. 546 (the Angliss Group case) at p.555. Quota had been reserved for Wandwills, he said, but withheld pending information to be provided; it was not refused in the interim period. Further, the applicants had not had cast upon them an "onus" or proving that they were entitled to a base quota; but if so, this was not inappropriate having regard to knowledge they had which perhaps was not available to the respondents; they were asked to provide information rather than to discharge some onus of proof. He referred to Election at p.665.

As to the applicants argument that since the transfer of PIP and tender quota had been approved, that material should not have been used as a reason for withholding the quota and finally refusing it. Counsel said that when so approving, respondents were determining quite a different issue. To the submission that no residual discretion was left in the second respondent because it was excluded, or had been excluded, by the terms of the letter of 22 July 1982 inviting applications, he submitted that the "invitation" did not say, nor was any common sense inference to be drawn, that merely because an applicant held PIP, he should be granted base quota. He distinguished the authority which had been relied upon, viz., City of London Justices. He said it was permissible that there should be a policy laid down as to how a discretion should be exercised so long as it was not one which was said to apply to every case irrespective of the merits of any application.

I have not attempted to restate all the arguments by counsel on each side. No question has been raised as to the entitlement of the respondents to issue the (so called) "invitation" of 22 July 1982, or to the inclusion in the application form of the undertaking or to there being a condition that an applicant for quota be a genuine importer. Section 273 of the Customs Act 1901 is said, without dispute, to authorise this administrative process. Other sections of that Act are also empowering, viz. ss.7 and 8, ss.9 and 10 (delegation), s.132B (as to the Minister's power to state a specified person's quota in goods of a particular kind for a declared period). Section 132B(5) might also be thought to have some relevance here. Part XV of the Customs Act 1901 authorises the formulation of a scheme for calling tender (s.266) and such scheme may provide for transfer of a right to import. Section 6, to which the judgement in Nashua referred (at p.277), in Part 11 of the Act headed "Administration", was repealed in 1974: see s.3 Act No. 28 of 1974. This section provided that until it was otherwise lawfully determined the Customs Acts should be administered by the Minister of State for the Commonwealth administering the Customs.

However, for the present purposes, I accept, as have the applicants, that, in so far as statutory authorisation is needed, the decision in respect of which review is sought was properly made. I should say that, in my opinion, there was no reason shown why, if there was some association between the principals of one firm, in this case Wandwills, and another company which was making a similar application, the decision maker could not consider both applications together if he thought he would be assisted thereby. If unfair prejudice resulted from this process the situation might be different. Here, no such prejudice has been shown.

It will be convenient for me to refer to the grounds of the amended application in the order that they appear, though this has not necessarily been the way in which counsel have dealt with them. It is claimed that the decision was an improper exercise of the power conferred upon the second respondent, this ground being referable to s.5(1)(e) of the Act. According to the applicants, the second respondent improperly exercised his power, firstly, by taking into account the irrelevant consideration that there was ". . . . . no record of Base Quota usage . . . . for goods beneficially owned by the quota holder . . . . 'and had' engaged extensively in transfers of Previous Import Performance" 'the May letter). The emphasis, in my opinion, in the first portion of that statement is on the word "usage"; i.e. to have a usage of base quota it was not necessary that it should have been allotted initially; one who did not have such a quota might very well acquire it by transfer. A genuine importer might well do so to enable it to import. That there had been no such usage might be thought to be some indication that an applicant was not a genuine importer. Base quota might be granted in due course by reason of acquisition of PIP; however, were the PIP transferred, the advantage possibly of so using it would be lost though there might be some other financial gain in trading in such units. A history of trading might well be regarded by the decision maker as indicating that a present applicant was such a trader rather than a genuine importer. The words of Dixon J., as he then was, quoted earlier, are in point. It could not be said that these considerations were fanciful, capricious or irrelevant; nor is there any "warrant" for saying so. I am mindful in so saying of the statements by Deane J. in Sean Investments at p.375 that it is ". . . largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards." Also, objectively speaking, in my opinion, the trading might be thought by the decision maker to be of assistance and relevant in deciding to withhold base quota

". . . based upon holdings of previous import performance."

How could it be inferred that this was not taken into account when the instruction states that because the applicants are holders of PIP they may apply, following which they do so apply? There is a reference to PIP acquisition and transfer in the Minute dated 11 May 1983. A specific reference to PIP held by Wandwills was made in a telex dated 25 February 1983 from the second respondent to Mr. Stubbs. Though I have been unable to understand why the holding of PIP should intrinsically be an inducement to the Department to issue a base quota, clearly, this was so treated by the Department and, it seems, referred to in Government policy. The material to which I have referred indicates that such holding was present to the minds of the decision makers well before the decision was made. The subject generally of a base quota entitlement related to PIP holding is also referred to in correspondence e.g. letters of 2 February 1983, 25 February 1983 and 4 March 1983; and, at least in general terms, in the Minute dated 11 May 1983. The correspondence above, in my view, indicated an awareness of the relationship between PIP holding and the issue of base quota whether or not it be in the specific categories which were the subject of the application. Further, some aspects of the correspondence do refer to the particular PIP holding related to the categories the subject of the application. I am persuaded that, if the second respondent was required to take account of the holding of PIP in the categories stated, it has been shown that that matter was within the consideration or contemplation at all relevant times of the second respondent, a consideration which extended, though no doubt intermittently, over months.

Next it is stated in the application that there was a breach of the rules of natural justice. These rules do not apply in all instances of a person or body being disadvantaged by a decision: see Testro Bros. Pty. Ltd. v. Tait [1963] HCA 29; (1963) 109 C.L.R. 353 per Kitto J. at p. 369; Mobil Oil Australia Pty. Ltd. v. Federal Commissioner of Taxation [1963] HCA 41; (1964) 113 C.L.R. 475 (Mobil Oil) per Kitto J. at p. 502; Twist v. Randwick Municipal Council [1976] HCA 58; (1976) 136 C.L.R. 106 per Barwick C.J. at p. 109; Salemi per Barwick C.J. at pp. 400, 401, per Gibbs J. (as he then was) at p. 419; The Queen v. MacKellar; ex parte Ratu [1977] HCA 35; (1976) 137 C.L.R. 461; Nashua per Lee J. at p. 225; FAI Insurances Ltd. v. Winneke [1982] HCA 26; 41 ALR 1 per Mason J. at pp.12,13,19; Duravappah v. Fernando (1967) 2 A.C. 337 (Durayappah); the Gaming Board case per Denning L.J. at p. 430; cases collected in Halsbury's Laws of England 4th ed. Vol. 1, para.74. First I should say that, as I understand it, there is nowhere any authoritative explicit statement which categorises the list of cases, or circumstances in which, the rules of natural justice are to operate - Twist v. Randwick Municipal Council (supra). If they do apply, how they operate will vary. Assistance in recognizing the circumstances in which such principles do apply and operate is found in Russell v. Duke of Norfolk (1949) 1 A11 ER 109 at p. 118; Ridge v. Baldwin [1963] UKHL 2; (1964) A.C. 40; Ceylon University v. Fernando (1960) 1 W.L.R. 223 at pp. 231 and 232; Mobil Oil at p. 504; Salemi per Barwick C.J. at pp. 400-404, per Gibbs J. (as he then was) at p.418 et seq, per Stephen J. at p. 440, per Jacobs J. at pp. 451,452; Ansell v. Wells [1982] FCA 186; 43 ALR 41; In re Pergamon Press Ltd. (1971) Ch. 388; Duravappah at p. 349; Gaiman v. National Association for Mental Health (1970) 2 A11 ER 362 at pp. 375-379; Halsbury's Laws of England 4th ed. Vol. 1, para. 64. Here there is no statutory provision which requires certain or any matters to be taken into account; nor any indication, I suggest, other than possibly general principles of fairness that they should be observed. The circumstances here are not unlike the second classification of Megarry V.-C in McInnes at p. 1529. I incline to the view that the rules of natural justice had no application in the circumstances. However, it will be convenient to consider the particulars upon which the applicants rely for the contention that they were denied some of the advantages which flow from an acceptance of and application of such rules. The first particular of this alleged breach is that they were not afforded the opportunity of stating the merits of their case, since the first respondent "..... did not indicate to the Applicants any specific charge or complaint". In my opinion, upon the evidence to which reference has been made, it is clear that the applicants were afforded every opportunity of stating the merits of their case. They were given an indication of what has been referred to in argument for convenience as the specific "charge or complaint" against them. The very fact that the expression "specific charge or complaint" is used indicates the difficulty of this 223 at pp. 231 and 232; Mobil Oil at p. 504; Salemi per Barwick C.J. at pp. 400-404, per Gibbs J. (as he then was) at p. 418 et seq, per Stephen J. at p. 440, per Jacobs J. at pp. 451,452; Ansell v. Wells [1982] FCA 186; 43 ALR 41; In re Pergamon Press Ltd. (1971) Ch. 388; Duravappah at p. 349; Gaiman v. National Association for Mental Health (1970) 2 All ER 362 at pp. 375-379; Halsbury's Laws of England 4th ed. Vol. 1, para. 64. Here there is no statutory provision which requires certain or any matters to be taken into account; nor any indication, I suggest, other than possibly general principles of fairness that they should be observed. The circumstances here are not unlike the second classification of Megarry V.-C in McInnes at p.1529. I incline to the view that the rules of natural justice had no application in the circumstances. However, it will be convenient to consider the particulars upon which the applicants rely for the contention that they were denied some of the advantages which flow from an acceptance of and application of such rules. The first particular of this alleged breach is that they were not afforded the opportunity of stating the merits of their case, since the first respondent ". . . did not indicate to the Applicants any specific charge or complaint". In my opinion, upon the evidence to which reference has been made, it is clear that the applicants were afforded every opportunity of stating the merits of their case. They were given an indication of what has been referred to in argument for convenience as the specific "charge or complaint" against them. The very fact that the expression "specific charge or complaint" is used indicates the difficulty of this submission. There was neither charge nor complaint; but there was a discretion to be exercised upon grounds, no doubt, of common sense and sound administration of Customs procedure with due weight given to the existence of relevant Government policy providing for the issue of base quota to such persons as could be said to be "a genuine importer". What has been described as the "invitation" (set out earlier) to make application for base quota itself emphatically indicated that the successful applicant should show that he genuinely intended to import quota goods in 1983. The quality of being a genuine importer was referred to, though not precisely in answer to the application, in the letter dated 14 December 1982 sent to Mr. Stubbs. The preoccupation of the "Branch" with the attribute, "genuine importer", is again revealed in the letter dated 21 December 1982 to Mr. Stubbs. Specifically in response to the application itself, the Australian Customs Service in a letter to Mr. Stubbs dated 13 January 1983 and purportedly signed by the second respondent stated -

"An integral element of the present textiles, clothing and footwear program is that base quota be allocated only to the genuine importer. . . . .

You are required to demonstrate on what grounds base quota should be allocated to Wandwills for 1983."

This letter I have quoted more completely earlier.

The "genuine importer" issue was taken up by the applicants in the letter dated 2 February 1983 to the Department of Industry and Commerce and marked for the attention of Mr. Conlon. Perhaps the letter did not advance the applicants' position nor provide any information upon which one might, in the then existing circumstances, have expected the base quota to be allocated. The applicants might well have been thought, in the mind of the decision maker, to have failed to offer any acceptable material which supported their application or established that they then were, or intended to be, "a genuine importer". Again, on 25 February 1983, a telex addressed to Mr. Stubbs over the name of the second respondent said, amongst other things -

"To assist in consideration of your submission, you may wish to give specific details of the operation of Wandwills which would establish that Wandwills is a genuine importer."

In answering, Mr. Stubbs in his telex of 28 February 1983 stated, inter alia -

"We agree we were asked by letter of 13/1/83 to demonstrate the grounds on which our firm should be granted 1983 base quota.

We feel that our letters of 16/12/82 and 2/2/83 confirmed that our firm is entitled to our 1983 base quota without restriction."

Later the telex referred to the quotas -

". . . which have been improperly witheld . . . "

It may be thought that the telex did not seek to state any facts or put forward any further arguments in response to the enquiry made by the second respondent. Nevertheless, on 2 March 1983 a further letter, signed by the second respondent and referring to earlier correspondence and the invitation to demonstrate the grounds on which 1983 base quota should be allocated to the applicants, stated -

"Your response of 2 February 1983 does not provide grounds on which 1983 Base Quota could be allocated to Wandwills. As indicated in the letter from the Department on 14 December 1982 (to which you responded on 16 December), the total involvement of Wandwills in the current Textiles Clothing and Footwear quota regime needs to be addressed."

The telex gave a further 28 days in which to demonstrate the grounds and reserved the afternoon of Friday 11 March 1983 free of other appointments, if Mr. Stubbs wished to discuss aspects of the current quota regime. In a letter written on behalf of the applicants and for the attention of Mr. Conlon dated 4 March 1983, it was said -

"I now wish to demonstrate in writing and further reiterate the same grounds expressed in our two previous letters, of 16/12/82, and 7/2/83, as to why Wandwills should have its Base Quotas released to it . . . "

The letter sought to establish that there existed a genuine intention to import such goods that had been the subject of the application. It also said -

"As regards Wandwills import pattern for the balance of 1983: Due to the current economic climate, and the looming election we would prefer to dispose of certain of our Base categories, which, due to the small base holdings, made it unprofitable to import such a small quantity of goods."

It is unnecessary that I should consider the validity of the so called reasons offered by the applicants or the cogency of the arguments as to why the relevant base quota should have been allocated. Suffice to say, that in my view it is quite clear that the applicants were advised of the "charge or complaint" and afforded every opportunity of stating the "merits of their case".

The second particular in respect of the alleged breach of the rules of natural justice is that the first respondent -

". . . . . should not . . . . have placed on the Applicants the onus of proving they were entitled to . . . . 1983 Base Quota."

In my opinion, no such onus was imposed; there was merely an enquiry or request for information which could best come from the applicants. No question of onus in a curial sense was imposed or sought to be imposed upon the applicants. As I understood him, senior counsel for the applicants agreed with the latter proposition during argument. I have noted the submission by the resondents as to onus based on Election earlier mentioned and to which I would add the Gaming Board case at p. 430.

The third particular of the alleged breach is that the first respondent -

". . . . indicated an expression of preconceived opinion in that they

indicated the Base Quota would be withheld . . . . . "

I wonder whether here there has been a failure properly to appreciate the meaning of "withheld" as opposed to "refused". This distinction emerges explicitly in the "Explanatory Note on Goods subject to Quantitative Restrictions" attached to the affidavit of Mr. Hall quoted earlier and to which reference was made during argument. In fact it was made clear in correspondence that the withholding was pending the applicants availing themselves of the opportunity afforded them to furnish information; an interim decision as it were. Had there been a preconceived or tentative opinion adverse to the applicants, still the respondents would not thereby have been guilty of a breach of the rules of natural justice so long as there was no shutting out of the applicants from making further submissions which would then be taken into account. In this regard it is perhaps helpful to refer to what was said by the seven members of the High Court in the joint judgment in the Angliss Group case at pp. 553-554 cited by senior counsel for respondents in argument -

"Those requirements of natural justice are not infringed by a mere lack of nicety but only when it is firmly established that a suspicion may reasonably be engendered in the minds of those who come before the tribunal or in the minds of the public that the tribunal or a member or members of it may not bring to the resolution of the questions arising before the tribunal fair and unprejudiced minds. Such a mind is not necessarily a mind which has not given thought to the subject matter or one which, having thought about it, has not formed any views or inclination of mind upon or with respect to it."

And later at p. 555 -

"It is of course the duty of the members of the Commission always to have and to display a willingness, indeed an anxiety, to give full and fair consideration to every relevant argument that may be addressed to them for a revision or even an abandonment of announced opinions."

Nothing in the evidence suggests there was failure by respondents to give full or fair consideration to the applicants or their "case".

Next the applicants contend that the delay until May 1983 in giving the decision on the issue of base quota for that year is such as to constitute a breach of the rules of natural justice. The difficulty that emerges in discussing delay where a decision has been given before proceedings commenced, as in the present context, is apparent. However, it is, in my view, clear from the correspondence that the delay, if there was such, was attributable at least in part to the care with which the second respondent approached his responsbilities in that he wished to give the applicants the opportunity to show by information or facts, which they might have had in their possession and perhaps known only to them, that indeed they were "a genuine importer"; or were to be "a genuine importer"; and to the applicants failure to provide information which the respondents regarded, in the process of making a decision, as advancing the applicants cause.

In my opinion, having regard to the course of dealing between the parties, and the correspondence which is before me the delay here could not be said to have been either unreasonable or capricious; the length of time which passed because correspondence continued may have been longer than one would ordinarily expect. It has not, however, in my opinion, been shown to be inordinate; and, certainly, it was contributed to by the applicants for whose benefit it occurred. Quite apart from the difficulty of fitting the concept of delay as some justiciable breach into the rules of natural justice in these circumstances. I do not regard the delay here as of such magnitude or the circumstances in which it occurred as such that it could be said to offend rules of fairness.

The third ground upon which the application relies is that there was no evidence or other material to justify the decision of the respondents. This ground, in my view, needs no detailed discussion. There was evidence before the second respondent of applicants' dealing in tender quota and PIP. There was an assertion or undertaking by the applicants that they had an intention to be a genuine importer. The weight of all such evidence was a matter for the decision maker; but it is not correct to say there was no evidence to justify the decision.

The final ground upon which the applicants rely is that the decision was contrary to law. It is sufficient to say that the applicants have not made out any case that the decision was contrary to any statute or legal principle to which I was referred.

At an early stage in this case it was argued that the real grounds for the respondents' decision were different from those set out in the May letter. I disagree. That letter was the culmination of early correspondence. The concern expressed in that correspondence and other material (e.g. the Minute dated 11 May 1983) was with the "genuine importer" issue. The May letter in its second paragraph expressed reasons for the refusal to accept applicants as genuine importers and hence to allocate the quota.

I have considered written material on the question of costs provided by the parties after decision reserved.

The orders I make are -

The application is dismissed.

The applicants are to pay respondents costs.