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Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Customs - Anti-Dumping - undertakings given after initial investigation - whether further investigation could be instigated by Minister when undertakings expired by force of sunset clause in legislation; "Normal Value" - whether power for Minister to alter "normal value"; calculation - whether profit component to be considered at manufacturer or dealer level; "Export Price" - appropriateness of date for exchange rate conversion - whether power to review calculation of export price - whether calculation should take into account interest at dealer and importer level - whether losses should be taken into account at dealer and importer level.Natural Justice - whether applicant whose calculations are rejected entitled to make further submissions.
Acts Interpretation Act 1901: s.33(1)
Administrative Decisions (Judicial Review) Act 1977
Customs Act 1901: ss.269 - TAA(2) and (3); TAB(1), (2), (3) and (4); TAC(1), (2), (6), (8), (9), (12) and (13); TAD; TAH; TAJ; TB; TG(1), (2) and (4); TJ(3); TM; T(2A).
Anti-Dumping Authority Act 1988: s.5 and 7.
Customs Tariff (Anti-Dumping) Act 1975: ss.4A, 8, 8(2A), 12A and 12B.
Customs Tariff (Anti-Dumping) Amending Act 1988
Customs Tariff (Anti-Dumping) Amendment Act 1989.
Customs Legislation (Anti-Dumping) (Amendments) Act 1988.
GATT Anti-Dumping Code.
Comptroller-General of Customs v Kawasaki Motors Pty Ltd [1991] FCA 519; (1991) 103 ALR 661, considered.
Kanthal Australia Pty Ltd v Minister for Industry, Technology and Commerce (unreported, 23 November 1987), considered.
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, applied.
Enichem Anic srl v Anti-Dumping Authority (unreported, 30 November 1992), discussed.
HEARING
SYDNEY, 30 November, 1-4 December 1992 and 29 January 1993 Counsel and Solicitors Ms M. Beazley QC and Mr N. Hutley
for Applicant: instructed by Malleson Stephen Jacques
Counsel and Solicitors A. Robertson and S.J. Gagelerfor First, Second and instructed by Australian
Counsel and Solicitors Mr B.W. Walker instructed byfor Fourth Respondent: C.G. Gillis and Co
ORDER
THE COURT DIRECTS THAT:(1) The applicant bring in short minutes of order on a date toNote: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
be determined.
(2) Costs are reserved.
DECISION
HILL J. The applicants seek judicial review of what are said to be seven separate decisions made by the first respondent, the Minister of State for Small Business, Construction and Customs ("the Minister") by his delegate Mr Beaman, the third respondent ("the delegate"). As set out in the amended application for an order of review, the decisions said to be involved are as follows:(a) The determination made by the First Respondent by his2. Many of the underlying facts are not in contention and in respect of these the evidence was largely documentary. There were, however, other matters which were the subject of dispute at a factual level. I will deal first with the facts which are not in dispute and return later in the judgment to discuss the factual matters in relation to the arguments which raise them.
delegate the Third Respondent purportedly pursuant to
s.269TAB(3) of the Customs Act 1901 on or about 30 June 1992
relating to the export prices of internal combustion engine
powered forklift trucks ("the goods") exported from Japan by
Kohfuku Trading Co. Ltd ("Kohfuku") ("the First Decision").
(b) The determination made by the First Respondent by his
delegate the Third Respondent purportedly pursuant to
s.269TAB(4) of the Customs Act 1901 on or about 30 June 1992
relating to the export prices of the goods exported by
Kohfuku ("the Second Decision").
(c) The determination made by the First Respondent by his
delegate the Third Respondent purportedly pursuant to
s.269TAC(2)(c) and s.269TAC(9) of the Customs Act 1901 on or
about 30 June 1992 as to the normal values of certain of the
goods exported by Kohfuku ("the Third Decision").
(d) The determination made by the First Respondent by his
delegate the Third Respondent purportedly pursuant to
s.269TAC(2)(c)(ii)(B) of the Customs Act 1901 on or about 30
June 1992 as to the rate of profit on the sale of the goods
for the purposes of the normal values of certain of the
goods exported by Kohfuku ("the Fourth Decision").
(e) The determination made by the First Respondent by his
delegate the Third Respondent purportedly pursuant to
s.269TAC(6) of the Customs Act 1901 on or about 30 June 1992
as to the normal values of certain of the goods exported by
Kohfuku ("the Fifth Decision").
(f) The reascertainment made by the First Respondent by his
delegate the Third Respondent purportedly pursuant to
s.269TAD of the Customs Act 1901 on or about 30 June 1992 as
to the normal value of goods exported by Kohfuku ("the Sixth
Respondent").
(g) The determination made by the First Respondent or the Third
Respondent his delegate pursuant to s.269TAH ascertaining
the equivalent Amount in Australian currency of the normal
value of certain goods exported by Kohfuku made on or about
30 June 1992 or alternatively 23 or 24 July 1992 ("the
Seventh Decision").
The History of the Anti-Dumping Reports into Forklift Trucks
3. On 1 April 1987, Clark Equipment Australia Pty Limited ("Clark") lodged
with the Australian Customs Service a complaint alleging
that Japanese
exporters of forklift trucks had been dumping products in Australia since
January 1983. They requested the imposition
of security deposits as a matter
of urgency and the imposition of dumping duties. The complaint concerned
"engine (IC) powered forklifts
of 2.0 to 5 tonne capacity inclusive". As will
be seen, there was no specific statutory regime for the lodgment of
anti-dumping
complaints under the legislation then in force. That complaint
was accepted and an investigation was initiated on 9 November 1987.
4. By Australian Customs Notice Number 88 of 1988, a preliminary finding was notified by the then acting Comptroller-General announcing that the Australian Customs Service ("ACS") was satisfied that material injury in the form of price suppression had been caused to the Australian industry by dumping of the specified tonnage forklift trucks from Japan. It was announced that provisional anti-dumping measures would apply to certain forklift trucks from Japan intended for home consumption on or after 9 May 1988, pending the completion of the inquiries. It was announced that the final finding would be made on 2 September 1988.
5. That finding was announced in ACS Dumping Report No 141, dated 2 September 1988, concerning certain forklift trucks from Japan. After concluding that the forklift trucks in question had been exported from Japan to Australia at levels significantly below normal values, that the Australian industry had sustained material injury and that the injury sustained by the Australian industry was causally linked to dumping, the Report recommended that anti-dumping measures be imposed upon the forklift trucks under inquiry exported from Japan and that consideration be given to the acceptance of minimum export price undertakings under s.8(2A) of the Customs Tariff (Anti-Dumping) Act 1975 ("the Anti-Dumping Act") if exporters offered undertakings at levels that would not cause or threaten material injury to the Australian industry.
6. That sub-section is set out later in the judgment.
7. On 22 September 1988, the requisite undertaking was offered by Kohfuku Trading Co Limited of Japan ("the exporter"), which company was the exporter of the relevant consignments. Inter alia, the exporter agreed that future consignments would be made at prices not less than those specified in the undertaking or as may be ascertained pursuant to s.4A of the Anti-Dumping Act from time to time. These undertakings were accepted by ACS Notice 88/191 dated 4 October 1988.
8. In the meantime, on 1 September 1988, major amendments were made to the scheme of the anti-dumping legislation effective on that date. I will return to describe the original legislative scheme and these amendments later.
9. On 23 December 1988, Clark filed in this Court an application for judicial review of the decision of the second respondent, the Comptroller-General of Customs, as to normal values of forklift trucks and of the decision to accept undertakings in relation to the export of forklift trucks from Japan pursuant to s.8(2A) of the Anti-Dumping Act. Those proceedings were settled and orders were made by consent pursuant to which the Comptroller-General was to initiate an inquiry into the normal values and export prices of goods the subject of the September ACS Dumping Report during the period 1 April 1988 to 31 March 1989 for the purposes of ascertaining, in accordance with s.8 of the Anti-Dumping Act whether or not the amount of the export prices of goods was less than the amount of the normal value of the goods. In a statement annexed to the short minutes of order, the Comptroller stated that the review of normal values would be conducted by suitably qualified officers of the ACS Dumping Branch, Australian Capital Territory, who would allow Clark to make such submission as it may wish to make prior to the commencement of the review.
10. On 17 July 1989, the ACS published Notice 89/96, announcing the instigation of the new inquiry and inviting submissions. In November 1989, the ACS published a Review Report 1989/1 setting out the findings on normal values and export prices. The ACS recommended, in para.13 of the Report, that exporters be given ten working days to offer price undertakings and, in the event that an exporter did not offer price undertakings, the Minister be advised to release the exporter from their present undertakings, and to refer the matter to the Anti-Dumping Authority for investigation, report and advice. Subsequent to this Report, undertakings were again offered by the exporter on 5 December 1989 and accepted by the Minister.
11. Once again Clark initiated proceedings in this Court for judicial review,
both of the decisions made in assessing normal value
and in accepting
undertakings. These proceedings were again settled and a consent order was
made on 22 April 1991. That order is
significant for the purposes of the
applicants' submissions. By it, the decision to accept undertakings, pursuant
to ss.8(2A) of the Anti-Dumping Act and to suspend indefinitely his
consideration whether to publish a dumping duty notice under s.8 of that Act
in relation to the forklift trucks referred to in Review Finding 1989/1, was
set aside as from seven days prior to the
date of completion of the
reconsideration referred to in the second order. The second order then
provided:
"... that the Comptroller-General of Customs and12. The further inquiry was notified on 21 August 1991. On 21 September 1991, the undertaking given by the exporter, offered on 22 December 1988 and modified in December 1989, expired by effluxion of time having regard to the "sunset provision" now prescribed in s.269TM of the new Act. I shall set out that provision in due course. Despite protestations made by the customs agent for the exporter, John Dunkley Pty Limited, the ACS took the view that whilst the undertakings had expired, the ACS was empowered to continue inquiries into the question of dumping, material injury and causal links and that the Minister could, if relevantly satisfied, impose further anti-dumping measures.
the Minister for Industry, Technology and
Commerce consider according to law the
application lodged with the Comptroller-General
of Customs by Clark Equipment Australia Limited
in April, 1987 in relation to certain forklift
trucks on the basis that it is not an
Application to which section 269TB of the
Customs Act, 1901, applies."
13. Accordingly, in December 1991, Report No 91/23 was published. That Report found no evidence of breaches of price undertakings prior to the expiry of those undertakings on 21 September 1991 by the Japanese exporters who had provided them. An assessment was made of export prices said to be in accordance with either sub-sec.269TAB(1)(c) of the Customs Act 1901, as then in force ("the new Act"), or sub-sec.269TAB(3) of the new Act. Normal values were also assessed in accordance with either ss.269TAC(2)(c) or 269TAC(6) of the Act. In the case of the applicants, export prices were said to have been assessed under s.269TAB(1)(c) and normal values were said to have been assessed in accordance with 269TAC(2)(c).
14. The Report described itself as involving "phase three" of the consideration of the original dumping complaint lodged by Clark in 1987, the first phase having concluded with the acceptance of undertakings on 26 September 1988, and the second phase having concluded with the acceptance of the undertakings in December 1989.
15. On 27 February 1992, the Minister made declarations under s.269TG(2) that s.8 of the Anti-Dumping Act applies to like goods to the forklift trucks exported, inter alia, into Australia by Kohfuku Trading Co Limited after the date of publication of the notice where the amount of the export price of those goods was less than the amount of their normal value.
16. The ACS then entered into a review of the findings made in the Report of
December 1991. The Review Finding No 1 of 1992 was
published on 30 June 1992.
In the summary of that Review Finding, it was indicated that the review was
initiated seven weeks after
the release in December 1991 of the Dumping Report
91/23 and that it was:
"...restricted to deductive export prices,17. It was indicated that normal values were not altered, but that there had been minor adjustments to them to reflect certain options, attachments and componentry at variance to basic model configuration. It was also noted that the question of inclusion or exclusion of a profit component in constructed normal values for basic models was considered, the decision being made to maintain the inclusion of a profit element.
assessed in accordance with paragraph
269TAB(1)(c) or sub-section 269TAB(3) of the
Act, for 'non-arms length transaction reasons',
as explained at paragraphs 1.10 to 1.13 of
Dumping Report No 91/23."
18. The third matter in the review report relevant to normal values was the question of the applicable date for currency conversion purposes. The report aligns that date to the date of the first arm's length sale - in effect the date of sale to Australian end users.
19. The method of calculating the export price for the applicants' products will be the subject of further discussion later. Suffice it here to say that there was taken into account the sale prices of Nomad, a dealer in Nissan forklifts which sold direct to the public. The Report recommended that revised normal values and deductive export prices be applied for forklift trucks under reference, entered for home consumption, on and after 30 June 1992.
The Legislative Background
20. The present statutory scheme for the imposition of anti-dumping duties
and countervailing duties derives from the General Agreement
on Tariffs and
Trade ("GATT"), registered in accordance with the provisions of Article 102 of
the Charter of the United Nations on
12 April 1979. Under Article 5 of GATT
Anti-Dumping Code, an investigation to determine the existence, degree and
effect of any alleged
dumping is normally to be initiated upon a written
request by or on behalf of the industry affected. However, the GATT Code
recognises
that, at least in special circumstances, the authorities concerned
with anti-dumping may themselves decide to initiate an investigation
without
having received such a request, although in so doing they are to proceed only
if they have sufficient evidence of dumping,
injury and a causal link between
the dumped imports and the alleged injury.
21. On 27 August 1987, the Minister announced new procedures relating to the investigation of complaints of dumping of goods imported into Australia. These new procedures would apply to complaints accepted on or after 1 September 1987. These procedures were contained in Australian Customs Notice No 87/169, issued on 4 September 1987. The terms of that Notice, and an analysis of the then non-legislative procedure, is dealt with in a judgment of Lee J in Merman Pty Limited v Comptroller-General of Customs (unreported, 16 September 1988).
22. Subsequently, that procedure received legislative backing, and the present provisions of s.269TB, which relate to the initiation of anti-dumping investigations upon the complaint of a person or the government of a Third Country, were inserted into the Customs Act 1901 by Act No 76 of 1988. The general procedure now applicable is discussed in detail in Midland Metals Overseas Limited v Comptroller-General of Customs (1991) 30 FCR 87. See too the decision of the Full Court of this Court in Swan Portland Cement Limited v Comptroller-General of Customs (1989) 25 FCR 523.
23. Prior to the 1988 amendments, to be shortly discussed, however, there had been no formal legislative requirement for an initiating procedure for anti-dumping complaints, the matter of dumping being largely dealt with by the Anti-Dumping Act which empowered the Minister to publish a notice in the Gazette having the consequence that dumping duties would be applied to the goods or goods of the class of goods referred to in the notice.
24. Prior to the 1988 amendments, the power to accept undertakings was dealt
with by s.8(2A) of the Anti-Dumping Act, which section was in the following
form:
"Where the export of a consignment of goods to25. The 1988 amendments included the Customs Legislation (Anti-Dumping) (Amendments) Act 1988 (No 76 of 1988) which, inter alia, inserted ss.269T, 269TA to 269TF into the Customs Act 1901. Amendments were also made to the Anti-Dumping Act, by the Customs Tariff (Anti-Dumping) Amending Act 1988 (No.69 of 1988), inter alia, by amending s.8 of that Act, so far as it related to undertakings, and by inserting a new section, s.12B of that same Act, which section relevantly provided:
Australia by an exporter has been under
consideration by the Minister with a view to
determining whether or not a declaration should
be made under this section in relation to the
goods in the consignment or to goods of the same
kind as the goods in the consignment, the
Minister may -
(a) give notice in writing to the exporter
stating that -
(i) the Minister is of the opinion that it
would be appropriate for the exporter to
give an undertaking in accordance with
paragraph (b); and
(ii) an undertaking in the terms set out
in the notice may be satisfactory to the
Minister; and
(b) whether or not a notice has been given to
the exporter in accordance with paragraph (a),
suspend indefinitely his consideration of the
export of that consignment if he is given and
accepts an undertaking by the exporter, in terms
that are satisfactory to the Minister, that the
exporter will so conduct his future export trade
to Australia in goods of the same kind as the
goods in the consignment as to avoid causing or
threatening material injury to an Australian
industry or hindering the establishment of an
Australian industry."
"(1)...26. This provision was, on occasions in the submissions, referred to as the "sunset provision". However, sub-sec.(6) of s.12B inserted at the same time provided:
(2) Where an undertaking is entered into after
the commencement of this section under a
relevant undertaking provision in respect of
goods of a particular kind, that undertaking
shall, unless provision is made for its earlier
expiration:
(a) if at the time when the first-mentioned
undertaking was entered into, no previous
undertaking relating to like goods is in
force under a relevant undertaking
provision and no previous notice relating
like goods is in force under a relevant
notification provision - expire 3 years
after the date that first-mentioned
undertaking was entered into; and -
(b) if, at the time when that first-mentioned
undertaking is entered into, a previous
undertaking relating to like goods is in
force under a relevant undertaking
provision or a previous notice relating
to like goods is in force under a relevant
notification provision - expire 3 years
after the date on which that previous
undertaking or notice, or, if there is
more than one such undertaking or notice,
the first such undertaking or notice was
entered into or published, as the case
requires."
"Nothing in this section shall be taken to imply27. The final relevant piece of legislation introduced in 1988 was the Anti-Dumping Authority Act No 72 of 1988 which established the Anti-Dumping Authority. This Authority now has, inter alia, the function of recommending to the Minister, under s.7 of that Act, whether the Minister should publish a dumping duty notice or a countervailing duty notice in respect of goods, and where applicable, whether notices should be given under sub-secs.269TG(4) or 269TJ(3) of the Customs Act 1901 (see s.5 of the Anti-Dumping Authority Act).
that the Minister may not publish a notice under
a relevant notification provision in respect of
goods of a particular kind or enter into an
undertaking in respect of goods of a particular
kind upon the expiration of all previous notices
published under a relevant notification
provision in respect of like goods and of all
previous undertakings entered into under a
relevant undertaking provision in respect of like goods."
28. Further legislative amendments were made in 1989. The Customs Tariff (Anti-Dumping) Amendment Act 1989, (No 173 of 1989) repealed ss.8(2A) and 12B of the Anti-Dumping Act, and re-enacted these provisions in the Customs Act in Division 3 of Part XVB of that Act. Thus, the old s.8(2A) became s.269TG(4) of the Customs Act, and s.12B became s.269TM.
29. The purpose of these two amendments was essentially to restructure the anti-dumping provisions of the Customs legislation into discrete taxing and non-taxing Acts, having regard to what were thought to be difficulties in s.55 of the Constitution demonstrated by the decision of the High Court in Air Caledonie International v The Commonwealth (1988) 165 CLR 462.
30. Transitional provisions were contained in s.9 of Act No 173 of 1989
relevantly in the following terms:
"(1) Any act or thing done... or any31. The Customs Act was further amended in 1991 by the Customs Amendment Act (No 82 of 1991) which came into effect on 26 June 1991. Relevantly to the present case that Act amended s.269TM of the Customs Act 1901, sub-secs.(1), (2) and (3), and substituted the following relevant sub-sec.(2):
undertaking given or accepted, under a provision
of the Customs Tariff (Anti-Dumping) Act 1975
that is repealed and re-enacted in similar form
in a provision (in the sub-section called the
'corresponding provision') inserted in Part XVB
of the Customs Act 1901 has effect, on and after
the day this section commences, for all purposes
as if it were an act or thing done under the
corresponding provision."
"Where an undertaking is entered into after this32. Sub-sec.(3) of s.9 of the 1991 Act then provided:
section commences under a relevant undertaking
provision in respect of goods of a particular
kind, that undertaking expires 3 years after the
day on which it was entered into unless
provision is made for its earlier expiration."
"Where an undertaking was entered into under a33. Sub-section (6) of s.269TM was omitted, but no saving provision was enacted. The Explanatory Memorandum accompanying the 1991 amendments noted that the omission of sub-sec.(6) was consequential on the amendments made. It continued:
relevant undertaking provision of the Principal
Act before this section commences, sub-section
269TM(2) and (3) of the Principal Act as in
force immediately before this section commences
continue in force in relation to that
undertaking as if the amendments made by
paragraph 1(a) of this section had not been made."
"Because the new subsections make clear thatThe Applicants' First Submission as to Power
notices or undertakings each have a maximum 3
year life, subsection (6) is no longer
necessary."
35. The submission is not easy to follow. Its starting point is that as and from 21 December 1989, the undertaking given by the exporter was to be treated as if given under s.269TG(4). So much must be conceded. Once the undertaking was given and accepted, the Minister's consideration of the particular consignment of the export of goods or like goods to that in that consignment was suspended indefinitely. Prior to the undertaking expiring, the undertaking was governed by ss.12A and 12B of the Anti-Dumping Act, including sub-sec.(6) of s.12B. These provisions were, of course, as the history set out above shows, ultimately inserted in the Customs Act, relevantly in s.269TM.
36. By the time the undertakings expired, however, s.269TM(6) had been repealed. It was submitted that from the time that sub-section was repealed, it was clear that the power in the Minister to reactivate a consideration of a particular consignment of goods was coextensive with the duration of the undertaking, so that the power to reactivate a consideration of that assignment under the provisions of s.269TG(4) expired at the same time as the undertaking expired. Thus it was said that, absent a new complaint under s.269TB, the Minister lacked power to conduct any further investigation, and this was so notwithstanding the order of this Court that it do so, albeit not under s.269TB.
37. The submission was said to affect both the 1992 Report and the 1991 Report. As the 1992 Report was merely a review of the 1991 Report, if the 1991 Report was without power, a fortiori so too was the 1992 Report.
38. In my opinion, the submission suffers from two difficulties. The first is that it assumes that at the time the undertakings had expired, the only way anti-dumping inquiries could be instituted, and in consequence anti-dumping duty reports made and duty imposed, was following the instigation of a complaint under s.269TB. In my view, that is not a correct construction of the legislation.
39. There seems no doubt that prior to the 1988 amendments, that is to say, prior to the introduction to the Act of s.269TB, there was no statutory procedure at all for the initiation of inquiries into anti-dumping. As has already been noted, the Minister had the power to declare that s.8 of the Anti-Dumping Act applied to the relevant goods, thereby effectively bringing about an imposition of anti-dumping duty. As a matter of practicality, that inquiry would normally be instituted following a complaint but, in an appropriate case, the Minister himself could initiate such an inquiry.
40. In that matter, as in deciding ultimately whether to impose the duty, the Minister would no doubt be guided by departmental officers assisting him. Indeed, it was this informal procedure which gave rise to the original 1987 complaint by Clark. When the 1988 amendments were introduced, there was no suggestion in the wording of those amendments or, for that matter, in the intrinsic material accompanying them, that s.269TB was to be an exclusive code for the instigation of anti-dumping investigations.
41. It may well be that s.269TB is an exclusive code governing the making of complaints by persons or Third Country governments, although that is not a matter which it is necessary to determine. The real point is that the power of the Minister to publish a notice declaring that s.8 of the Anti-Dumping Act applies to particular goods, and thereby to impose anti-dumping duty, is not made subject to the making of a complaint under s.269TB. That power can arise on any occasion where the Minister reaches the necessary satisfaction as described in s.269TG. In particular, the Minister may reach that satisfaction after making his own investigation guided, as was the case before the 1988 amendments, by departmental officers. That is probably a sufficient answer to the applicants' submissions.
42. However, the applicants' submissions depend also upon an assertion that the suspension of the consideration given by the Minister to a particular consignment on the acceptance of an undertaking operated only for the duration of the undertaking. It is then said that the power of the Minister to reconsider the export of a particular consignment under s.269TG(4) is coextensive with the duration of the undertaking. Thus it is said that upon the expiry of an undertaking, the legislative scheme requires the lodgement of the fresh complaint.
43. It was noticed earlier that, under the legislative scheme, once an undertaking has been given and accepted, the statutory effect is that the Minister's consideration of the export of the particular consignment is suspended indefinitely. It is not, of course, suspended by statute permanently. The word "suspend" has its ordinary English meaning of "defer", "postpone" or "put in a state of being kept undetermined". There is nothing in s.269TG(4)(b) of the Act or its predecessor, s.8(2A) of the Anti-Dumping Act, which suggests to the contrary. Prima facie, the suspension is not coextensive with the giving of the undertaking - the undertaking after the introduction of the sunset provisions had only a limited life, a maximum of three years. The suspension on the other hand was merely indefinite.
44. No doubt the legislative intention was that the suspension would continue during such time as the undertaking given was in fact complied with. No doubt the further intention was that if the undertaking was not complied with during the time it was in force, then the Minister could resume his consideration of the export of the particular consignment; likewise, if the undertaking for any reason came to an end that consideration could be resumed.
45. However, it is difficult to see that this construction is in any way affected by the sunset provisions, with or without s.12B(6) of the Anti-Dumping Act. All the sunset clause provisions do is to ensure that the undertaking itself expires on a nominated date, in effect three years after the undertaking is entered into. That of its own would hardly seem to imply that on the expiration of that period of time the Minister's indefinitely suspended consideration is thereafter a permanently suspended consideration.
46. Sub-section (6) of s.12B appears to have been inserted as a matter of caution. Interestingly, it rated no comment in the Explanatory Memorandum circulated by authority of the then Minister for Industry, Technology and Commerce, Senator Button, with the Customs Tariff (Anti-Dumping) Amendment Bill 1988 which inserted it. Nothing in the termination of the undertakings in September 1991 prevented the Minister resuming the consideration of the export of the consignment which had been suspended.
47. Further, with respect, I agree with counsel for the fourth respondent that the applicants can gain no assistance from textual discussions of the GATT treaty. The present question must be determined by reference to the Australian legislation and not the treaty which provides merely the background to understanding it. In any event, perusal of the GATT treaty provides no answer to the present question.
48. Finally, it was submitted by counsel for the first, second and third
respondents that, as there had been no attack on the notice
given under
s.269TG(2), the applicants were now precluded from submitting that the
decisions under review were bad because to do
so would involve a collateral
attack on the notice under s.269TG(2). That notice had been in existence for
a substantial period
of time and it was noted that the applicants had
participated in the inquiry. In these circumstances, it was submitted that
relief
should be refused on discretionary grounds in any event. Reference was
made to the decision of the Full Court of this Court in Sandvik
Australia Pty
Limited v Commonwealth of Australia (unreported, 9 October l990, Davies,
Jenkinson and Hill JJ.). It is unnecessary
for me to consider this
submission. Was there a basis for review of normal value under s.269TAD?
49. It will be recalled that in the 1992 Report, (Review Finding 92/1) there was a review of "normal value" of the fork-lift trucks in question. It was submitted that in 1992, the Minister had no power to re-ascertain the normal values of the goods under s.269TAD of the Act because the Minister had not formed the opinion, or could not properly have formed the opinion, that a relevant factor to the ascertainment of the normal value of the goods had altered.
50. Section 269TAD provides:
"Where the Minister has, for the purpose of51. The 1992 Review Report made minor adjustments to normal values to:
publishing a notice under s.269TG or s.269TH
declaring that section to apply to goods that
may be imported into Australia, being like goods
to goods that have been so imported, ascertained
the normal value of the imported goods, the
Minister may, at any time, and from time to
time, if the Minister is of the opinion that any
factor relevant to the ascertainment of the
normal value of goods to which that section
applies has altered, re-ascertain that normal
value and, where the Minister does so, the
Minister is to publish that normal value as so
re-ascertained in the Gazette unless, in the
opinion of the Minister, the publication of that
information would adversely affect the business
or commercial interests of any person."
"reflect those options, attachments and52. The Report considered also, in relation to normal values, the inclusion or exclusion of a profit component in constructed normal values, ultimately concluding to maintain the inclusion of that profit element. The final matter dealt with in the Report, so far as impacting upon normal values, was the question of the applicable date for currency conversion purposes. Ultimately the Report concluded that this date should be aligned to the date of the first arm's length sale - in effect, the date of sale to Australian end users.
componentry at variance to basic model
configurations, fitted upon exportation from
Japan to those specific forklifts that were
traced through to those 'arms length
transactions' within Australia that were
selected as the 'starting points for deductive
exercises to establish export prices."
53. It was submitted that no relevant factor had changed since the 1991 Report; all factors which were considered in the 1992 Review were factors under consideration in the 1991 Report. What was involved in the 1992 Review was what counsel for the applicants chose to refer to as a "change of methodology".
54. To appreciate the argument, it is necessary to say something of the basic scheme of the anti-dumping duty.
55. It is a pre-condition to the publication of a declaration by the Minister declaring that s.8 of the Anti-Dumping Act is to apply (and thereby to impose anti-dumping duty) that the Minister form an opinion, either as to goods exported to Australia (s.269TG (1)), or goods of a like kind, (s.269TG (2)) that the amount of the export price of the goods is less than the amount of the normal value of those goods. Similarly, when the duty comes to be imposed under the Anti-Dumping Act, the dumping duty is, subject to s.8(5) of that Act, the difference between the export price of the particular goods and the normal value of the goods.
56. The "export price" is to be determined under the provisions of s.269TAB. In the case where the particular goods are exported to Australia by some person other than the importer ('the exporter') and have been purchased by the importer from the exporter, the purchase having been an arm's length transaction, the export price will be the price paid or payable for the goods by the importer other than any part of that price that represents a charge in respect of transport or other matter arising after exportation. In other words, in this simple case the export price will be the price actually paid in a particular transaction: s.269TAB(1)(a). Where, however, the purchase of the goods by such an importer was not an arm's length transaction, and the goods were subsequently sold by the importer in the condition in which they were imported to a non-associate, the export price will be the price at which the goods were so sold, less certain specified deductions: s.269TAB(1)(b). In such a case also, the export price will reflect an actual transaction, ie, the price in the transaction with the non-associate. In other cases, the export price is to be an amount to be determined by the Minister, having regard to all the circumstances of the exportation: s.269TAB(1)(c) and cf s.269TAB(3) applied in the present case.
57. Because the export price is essentially a figure to be derived from the
particular facts of a particular transaction and relates
to particular goods,
it is unlikely that there would be a need for the Minister to review his
calculation of export price. If he
had made a mistake, then clearly, he could
correct it, because he had not properly calculated the amount in the first
place. No
specific power is conferred by the Act to enable him so to do but,
if express power be required, regard could be had to s.33(1) of the Acts
Interpretation Act 1901 which provides:
"Where an Act confers a power or imposes a duty,58. By contrast, however, normal value is not a figure to be derived by reference to a particular sale. It remains a constant, unaffected by particular transactions. It is to be calculated in accordance with s.269TAC and, in the normal case, will be 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 arm's length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods. Because sales may not be arm's length or some other factor may make the normal rule inapplicable, s.269TAC provides a number of alternative ways of calculating the "normal value" of the goods. Some of the problems involved are dealt with later in this judgment and also in the judgment of the Full Court of this Court in Enichem Anic S.r.l v The Anti-Dumping Authority (unreported, 30 November 1992).
then, unless the contrary intention appears, the
power may be exercised and the duty shall be
performed from time to time as occasion requires."
59. There may arguably be greater room for judgment to be exercised in the calculation of "normal value" than there will be in the calculation of "export price". But what is for present purposes more material is that the "normal value" is a constant and not a changeable figure. This is clearly reflected in s.269TAD, which provides a contrary intention to s.33(1) of the Acts Interpretation Act 1901.
60. The power to reascertain normal values under s.269TAD is quite limited. It will operate only where there has been an alteration in a relevant factor. It can not be enlivened merely because the Minister is dissatisfied with the figure arrived at, or has changed his mind. This is not to say that the Minister could not embark upon an inquiry to determine whether there has been an alteration in a relevant factor. The limitation contained in s.269TAD is imposed upon the power to re-ascertain, not upon any power to inquire as a preliminary to reascertaining "normal value".
61. There is a question whether the Minister would be empowered, either by
s.269TAD or otherwise, to correct a determination of "normal
value" where the
Minister formed the view that the previous calculation of "normal value" was
erroneous. In this context, the decision
of the Full Court of this Court in
Comptroller-General of Customs v Kawasaki Motors Pty Ltd [1991] FCA 519; (1991) 103 ALR 661
could have some relevance. That case did not deal with s.269TAD, instead it
concerned the exercise of the power to make and revoke
concession orders under
Part XVA of the Act. Beaumont J suggested that a case could arise where the
decision-maker, having performed his function under the legislation,
had
become "functus officio" cf R v Moodie (1977) 17 ALR 219 at 225. Ordinarily,
however, as his Honour said (at 667):
"Some administrative decisions, once62. If s.269TAD is an exclusive code for the reascertainment of "normal value" then, so it is submitted, unless it be construed so as to encompass a reascertainment after a wrong decision, the Minister would never be able to correct an error which he had made. Put in another way, the realisation by the Minister that he was wrong must constitute an alteration of a relevant factor. It is not necessary to go so far. If the Minister has erred in law so that he had not performed the "function" conferred upon him, there could be no reascertainment of the normal value since there could not have been a valid initial "ascertainment". This at least will be so when a court has set aside, ab initio, (as in Kawasaki) the initial decision. Implicit in the legislative scheme will be that the Minister must initially ascertain the normal value and that s.269TAD has no operation unless that has happened.
communicated, may be irrevocable. But where it
appears to a decision-maker that his or her
decision has proceeded upon a wrong factual
basis or has acted in excess of power, it is
appropriate, proper and necessary that the
decision-maker withdraw his or her decision."
63. However, clearly, s.269TAD was not intended to apply to a case where the Minister made a valid determination, but is later merely dissatisfied with it. There must be the formation of opinion as to the alteration of a material factor. The real issue in the present case is what is meant by the words "alteration in a relevant factor". For the applicants it was submitted that there was no factor at all which changed between December 1991 and July 1992. Rather, it was submitted that the Delegate of the Minister became nervous about the way he went about calculating the normal value in 1991 and reviewed the methodology involved. Relevant factors were said to include matters such as price variations, a matter mentioned in the notes to s.5AA (the precursor of s.269TAD) in the Explanatory Memorandum accompanying the Customs Tariff (Anti-Dumping) Amendment Bill 1988. In my view, the word "factors" should be taken as encompassing all matters which are made relevant to the determination of the "normal value" by the terms of s.269TAC. For the power to reascertain to be enlivened, there will need be some change in these matters. The applicants' submissions were supported by counsel appearing for Toyota Motor Sales Australia Ltd, the applicant in other proceedings heard on this issue at the same time.
64. Counsel for the first, second and third respondents submitted that the word "factor" did not mean "fact", and that each of the matters enumerated above and activating the review of "normal value" in the present case was, relevantly, a factor. With respect, I do not agree. In my view, there was not, in the present case, any relevant alteration in any relevant factor and it is not suggested that the Delegate of the Minister formed any view other than that which appeared in the Review Report on the matter.
65. It was submitted by counsel for the first, second and third respondents that the applicants should, as a matter of discretion, be refused relief. It was said to be a fact that the 1992 review was instigated at the request, inter alia, of the applicants. Should this be the case, I would be inclined to exercise the discretion adversely to the applicants because, I do not see why, if the inquiry was undertaken at the request of the applicants and the applicants were thereafter dissatisfied as to the outcome of it, the applicants should then be heard to say that there was no power in the Minister to undertake the review.
66. The applicants submit that there is no evidence to this effect and that the highest the evidence goes is that the Australian Customs Service initiated a review of deductive export prices and that the review was undertaken in response to a number of submissions lodged with the Australian Customs Service after the release of Dumping Report No 91/23. I agree with this submission. I should say that the mere fact that the applicants participated in the inquiry would not, of itself, cause me to exercise my discretion adversely to them. They were in a position that an inquiry was being held which was expected to and did constitute a review of normal value and export price and whether or not it is correct to say that in a legal sense the applicants had no alternative but to participate. In a practical commercial sense this is clearly the case, and the applicants should not suffer merely because co-operation in the inquiry was a commercial necessity. I would, accordingly, grant relief on this ground on the basis that the Minister had no power to make the review he did.
Was there power to review export price?
67. For the reasons which I have already set out, I am of the view that there
was power in the Minister to review, in an appropriate
case, the calculation
of the "export price". Section 269TAD, albeit a specific provision, can not be
taken as raising an implication
that power to review "normal value" being
expressly stated, albeit confined, there was no power to review "export
price".
68. In my opinion, the power is to be found in s.33(1) of the Acts Interpretation Act 1901. I find it unnecessary to consider whether s.33(1) of that Act, when considered in conjunction with s.269TAJ, may also have operation.
69. The argument that to have a constrained power to review the normal value but an unrestrained power to review export price produces absurdity, does not seem to me to be particularly cogent, having regard to the different roles played by normal value and export price in the scheme of the Act, as earlier discussed.
Whether the inclusion of a profit component was in error
70. For the applicants it was submitted that assuming the Minister had power
to reassess in the 1992 Report "normal value", he erred
when so doing in
failing to exclude a profit component when making that reassessment.
71. The competing arguments are well summarised in the Report, which referred
to the circumstances existing as being possibly unique
to the Japanese
forklift market. The Report then continued in Chapter 7 "Issues Arising and
Decisions":
"(i) There are two distinct levels of72. It was the argument summarised in (v) above which ultimately gained acceptance and which the applicants claim drew a false dichotomy. The applicants' written submission on the matter proceeded as follows:
trade for Gur (Goods under Review)
in Japan: manufacturer to dealer,
and dealer to end user.
(ii) The most recent overseas ACS
inquiries revealed that sales at the
manufacturer to dealer level,
although usually profitable, were
rendered 'non - arms length' by a
number of factors, particularly the
payment of rebates.
(iii) The converse was found at the dealer to
end user level; although usually 'arms
length', these sales were rendered 'not in
the ordinary course of trade' by being
found to be at levels that did not recover
all relevant costs, viz to buy-in and resell.
(iv) It was claimed...on behalf of
Nissan...that the latter situation -
of (iii) above - should 'trigger'
application of sub-section
269TAC(13), regardless of the
profitability of domestic
manufacturer to dealer sales;
essentially that paragraph
269TAC(2)(c) based normal values,
now applicable in view of the
separate disqualifications of both
trade levels for sub-section
269TAC(1) purposes, (and
unavailability of data on prices to
third countries - paragraph
269TAC(2)(d)), should exclude a
profit component.
(v) The contrary argument is that the
methodology of paragraph
269TAC(2)(c), by its very nature,
returns the ACS to the manufacturer
to dealer trade level, simply
because dealers do not manufacture
forklifts, and paragraph
269TAC(2)(c) requires the input of
production costs derivable only at
that trade level; therefore, as the
manufacturer to dealer trade level
was disqualified not for 'ordinary
course of trade reasons', but rather
for 'non - arms length transaction'
reasons, the ACS is obliged to
include a profit component in these
paragraph 269TAC(2)(c) based normal values."
"Under s269TAC (1) sales at different levels can73. To make the competing submissions intelligible, it is necessary to summarise the statutory scheme for the determination of "normal value", recognising that the significance of "normal value" in the legislative scheme is that dumping may be found to exist and dumping duty ultimately become payable where the "normal value" arrived at is more than the "export price" of the goods. It must also be recalled that export price is, in the usual case of an arm's length purchase of the goods by an importer from the exporter to Australia, the actual purchase price at which the goods were sold by the importer excluding transport or charges in respect of any other matter arising after exportation: cf s.269TAB of the Customs Act.
be used. Adjustments must be made under TAC(8).
Similarly under TAC(2) adjustments must be made
under TAC(9). The adjustments are directed to
ensure comparability of the sale under
consideration with the export sale. The export
sale was not a sale by the manufacturer to the
importer.
Therefore TAC(12)(c) does not 'by its very
nature' return 'the ACS to the manufacture to
dealer trade level'. It only commences at that
point in so far as it involves the construction
of a 'normal value'. That it may involve a
further sales level is made clear in
TAC(2)(c)(ii)(A).
Therefore there is no essential reason to
distinguish between levels of sale and to give a
limited effect to the proviso to
TAC(2)(c)(ii)(B)."
74. Given the evident policy of the legislation to deter overseas producers dumping goods into Australia at prices less than those prevailing overseas, it could be assumed that the legislature would endeavour to have a congruence between the method of calculating "normal value", essentially the overseas component of the equation, and that used in calculating the "export price", so as to ensure that like is compared to like. Looked at purely as a matter of policy, it would be strange if the normal value were to be determined as being the price prevailing at a retail level of dealer to customer, taking into account the retail profit on the one hand, whereas the export price was calculated at a wholesale level, not taking into account the retail profit write up. To do so would be to increase the normal value at the expense of the export price, and make it more likely that dumping would be found to exist, when on a comparison of like with like it did not.
75. Turning then to the calculation of "normal value", the starting point is
(adopting the convention of excluding from the section
references the numbers
269 in this discussion) TAC(1). That expresses the normal mode of calculating
"normal value" to be:
"the price paid for like goods sold in the76. The need for congruence with the method of calculating the "export price" is recognised by TAC(8) which provides:
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."
"Where the normal value of goods exported to77. Where, as here, the Minister is satisfied that the sales for home consumption in Japan are not suitable for use in determining normal value because of lack of arm's length dealings, or because they are not in the usual course of trade, then subject to TAC(2)(d), not presently relevant, the normal value is to be determined in accordance with TAC(2)(c), as being:
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; or
(b) are not in respect of identical goods; or
(c) are modified in different ways by taxes or
the terms or circumstances of the sales to
which they relate;
that price paid for like goods is to be taken to
be that price paid adjusted in accordance with
directions by the Minister so that those
differences would not affect its comparison with
that export price."
"the sum of:78. TAC(9) provides for adjustments to be made to this value, again designed to obtain a congruence between the method involved in calculating normal value and that involved in calculating export price. That sub-section provides that in a case to which TAC(2)(c) applies that:
(i) such amount as the Minister determines to
be the cost of production or manufacture
of the goods in the country of export; and
(ii) on the assumption that the goods, instead
of being exported, had been sold for home
consumption in the ordinary course of
trade in the country of export:
(A) such amounts as the Minister
determines would be the delivery
charges and other costs necessarily
incurred in that sale; and
(B) subject to subsection (13), an
amount calculated in accordance with
such rate, if any, as the Minister
determines would be the rate of
profit on that sale..."
"the Minister must make such adjustments, in79. Prima facie, the language of TAC(2)(c) suggests that consideration should be directed only at the level of the manufacturer and not at the level of a dealer, for it is the manufacturer's costs of production which are used as the starting point. No actual sale is thereafter to be looked at. Rather, there is to be assumed a hypothetical sale in the ordinary course of trade in the country of export, so that the profit margin on that sale is to be calculated. The sub-section does not indicate who the hypothetical seller is to be, but presumably it is the manufacturer. Neither is there any indication as to who the hypothetical purchaser is to be, that is to say, whether the sale is to be at the wholesale or retail level.
determining the costs to be determined under
that paragraph, as are necessary to ensure that
the normal value so ascertained is properly
comparable with the export price of those
goods."
80. Section TAC(13) operates where section TAC(12) does. Briefly, section
TAC(12) deals with the case where sales in the country
of export, albeit arm's
length sales have for an extended time been less than the costs of production
or manufacture plus costs necessarily
incurred in the sale of the goods by the
seller of those goods, and it is likely that the seller will not be able to
recover those
costs. In this case, the sales are to be treated as non-arm's
length sales, with the consequence that TAC(2) must have application
rather
than TAC(1). TAC(13) then provides:
"Where, because of the operation of subsection81. The Minister submits that the present was not a case where TAC(12) required the normal value to be determined under TAC(2) because, although TAC(12) would have applied if attention were focused at the level of dealer to end user, it was unnecessary to consider TAC(12) where consideration was given to the manufacturer to dealer level. Put in another way, it is said that the reason TAC(2) is made applicable is not because of TAC(12), but because at the manufacturer to dealer level, there were not arm's length transactions and, as a result, at that level, the sales prices were unsuitable for use under TAC(1). Thus, normal value is not required to be determined under TAC(2) by virtue of the operation of TAC(12), but is required to be determined under TAC(2) by virtue of the operation of TAC(2)(a).
(12), the normal value of goods is required to
be determined under subsection (2), the Minister
shall not include in his or her calculation of
that normal value any profit component under
sub-subparagraph (2)(c)(ii)(B)".
82. The question is essentially a matter of construction of 269TAC. There are, in my opinion, three possible interpretations. One possible view is that where TAC(2) is made applicable because of two sections, TAC(2)(a) and TAC(12), the Minister can choose whichever route to TAC(2) he prefers, and TAC(13) will have application only where the route chosen is through TAC(12). The second view is that where both TAC(12) and TAC(2)(a) lead to the determination of normal value, TAC(2) is to be read subject to the remainder of TAC, including TAC(12) and (13), so that if TAC(12) is literally satisfied, that section requires the Minister to determine normal value under TAC(2), with the consequence that TAC(13) will always have application. The third view is that, although the Minister may appear to have a choice whether to apply TAC(2) having regard to TAC(2)(a) or TAC(12), that choice must be exercised having regard to the method of calculating the export price. Where, as here, the export price was calculated by reference to the prices prevailing at the dealer to end user level, the provision of TAC(12) has to be tested at that level. At that level, the requirements of TAC(12) would have been satisfied, with the result that TAC(13) would have come into operation.
83. Of these three alternatives, two lead in this case to the conclusion contended for by the applicants; only the first leads to the result contended for by the Minister. Although I see point as a matter of policy in the third alternative, I think that the second alternative is, as a matter of construction, correct. It is, in any event, unnecessary to choose between these alternatives, as each arrives at the same result. The first alternative seems to me to be incorrect in allowing the Minister to choose the route to TAC(2), without regard to the appropriateness of that route in the scheme of the legislation, nor to the fact that the provisions of TAC(2) are subject to the provisions of TAC(12) and (13). The result must be that the decision to calculate normal value made in the 1992 Report must be set aside.
The proper date for determining the exchange rate
84. Each of the "normal value" and the "export price" of goods, if not
expressed in foreign currency, must be converted to an "equivalent
amount" in
Australian currency: s.269T(2A). Section 269TAH(1) of the Customs Act then
provides for currency conversions to be made "in accordance with a fair rate
of exchange at the appropriate date".
85. There is no definition of the "appropriate date". What that date is must, therefore, be determined by reference to the context of the legislation.
86. As has already been emphasised, the scheme of the relevant legislation is to compare the "export price" in respect of goods with the "normal value" of those goods, both to determine the preliminary question of whether there has been dumping, and to determine the quantum of anti-dumping duty payable. From this scheme, the applicants advance the argument that where normal value is expressed in foreign currency (that will usually be the case, having regard to the method of calculation), the appropriate date for the calculation of the exchange conversion will be the same date as is chosen for the calculation of the export price. Otherwise, it is said, the determination of dumping could depend upon the vagaries of fluctuating exchange rates.
87. As an abstract proposition of law, the respondents do not deny this proposition. They say, however, that the evidence in the present case establishes that it was not necessary to make a conversion to calculate the "export price" of the goods. This being the case, it is only necessary that the decision-maker select an "appropriate date" for the conversion of the "normal value". Since the export price was calculated using as its starting point the first arm's length sale in respect of each of the goods under review, that, it is submitted, is an appropriate date for the conversion. This is so, it is submitted, notwithstanding that in the present case, a period of up to eleven months elapsed between the date of the actual export sale of the goods and the date of the first arm's length sale. The alignment of the currency conversion date for the purposes of calculating the "normal value" with the date of the first arm's length sale was appropriate, it was said, because it gave a single reference date for the consideration of the export price and normal value of each forklift truck exported to Australia.
88. There can be no doubt that where currency rates are volatile, the use of different conversion dates for the calculation of "normal value" and "export price" of goods would involve either an error of law or, alternatively, unreasonableness. It would create what the applicants referred to as a new form of dumping, "exchange rate dumping"; the creation of a difference, expressed in Australian dollars, between export price and normal value dependent totally upon exchange rate fluctuation.
89. The dispute between the parties arises because the calculation of the "export price" in the present case was a "deductive" calculation made under s.269TAB(3), rather than a calculation made under s.269TAB(1) dependent upon an actual export sale. The same problem could arise under s.269TAB(1)(c).
90. It is helpful first to discuss the scheme of s.269TAB to understand the competing submissions. In the ordinary case, the export price of particular goods will be the actual arm's length price paid by an importer to the exporter, after excluding any component in that price for transportation or any matter arising after exportation: s.269TAB(1)(a). Essentially, s.269TAB(1)(a) requires little more than a perusal of the invoice price. If that price were not expressed in Australian dollars, then clearly the appropriate date for conversion would be the date of that export transaction.
91. However, if exporter and importer are not at arm's length, then the Act recognises the need to adopt some other method of calculation to work back to what an arm's length price between exporter and importer would have been. The simplest calculation, and that with which s.269TAB(1)(b) and the related subsection s.269TAB(2) is concerned, commences with the price received by the importer for the sale of the goods to an arm's length third party and proceeds to deduct from that price certain amounts to arrive at an approximation of the arm's length price from the exporter to the importer.
92. However, where the importer and the purchaser from the importer are associates, or where the information furnished about the transactions undertaken is for some reason defective, the Minister is given a wider discretion to determine the "export price". However, whether the Minister acts under s.269TAB(1)(c) or s.269TAB(3), his task remains the same, namely to arrive at the best approximation he can of the price that would have been paid by the importer to the exporter for the goods in an arm's length sale, less the costs of export and any cost relevant to post export transactions. In making that calculation, the Minister will take into account all the circumstances of the actual exportation, subject to that information being unreliable or there being insufficient information supplied about it. However the calculation is made, it will be an attempt to construct, so far as is possible, an arm's length price between importer and exporter at the time of the actual export transaction. Logically therefore, whether the calculation is made under s.269TAB(1)(a) or some other section, such as s.269TAB(1)(c), if the figure arrived at is expressed in foreign currency, the appropriate date for conversion will be the date of the export transaction.
93. Although, as the respondents submit, the actual export price derived by Mr Beaman was expressed in Australian dollars, that is a somewhat incomplete description of what happened. Having regard to the relationship that existed between the importer in this case, Powerlift, and the exporter, and between Powerlift and its dealer, Nomad Materials Handling Pty Limited ("Nomad"), Mr Beaman chose to commence his calculations with the price which Nomad, a dealer in forklift trucks, sold to its customers in arm's length sales. That price was expressed in Australian dollars. It was then necessary to make a number of deductions to work back to what the arm's length price would have been between the exporter and Powerlift if an arm's length relationship between those companies had existed. One of the factors in the calculation involved the actual price paid by Powerlift to the exporter for the goods. This figure was relevant, inter alia, to enable a calculation to be made of the profit made by Powerlift. In his calculations, Mr Beaman properly converted this price to Australian dollars at the date of the actual export transaction. All other elements of the calculation were in Australian dollars.
94. Since the figure arrived at by Mr Beaman was his approximation of an arm's length price at the date the actual export transaction took place, in my view, the date of that export transaction is the only appropriate date to adopt to make the currency conversion of the "normal value". That view is reinforced by virtue of the fact that it was also the date adopted by Mr Beaman to convert an element in his calculation to Australian currency. To adopt any other date on the present facts would, in my view, involve an error of law.
Denial of Natural Justice
95. For the applicants, it was submitted that they were denied procedural
fairness because natural justice required that they be
told in "clear and
adequate terms" what procedure was to be adopted in the determination of the
export price and, in particular,
that Mr Beaman proposed to allocate sales and
administration expenses among the goods under review by reference to the
expenses of
other companies.
96. Considerable time was taken up in the case with evidence of what happened at two meetings between officers of the Australian Customs Service and representatives of the applicants and their customs agents on 23 and 24 March 1992. On this matter, evidence was given on behalf of the applicants by Mr Dunkley, of John Dunkley Pty Limited, customs agents for the applicants, Mr Ackland, the General Manager of Powerlift (Nissan), and Mr Truter, an employee of John Dunkley Pty Limited. For the Minister, evidence was given by Mr Beaman, Assistant Director of Dumping Operations with the ACS and Mr Tierney, an investigation officer within the industry assistance sub-program of the ACS. There was extensive cross-examination of the witnesses, particularly Mr Beaman.
97. The background of these meetings was that Mr Beaman wished to visit
Powerlift, GFW and Nomad (the last two being Powerlift Nissan
dealers) to
determine export prices. Mr Beaman wished to inspect documentation in respect
of certain models of forklift trucks.
The meeting on 23 March 1992 was at the
premises of Nomad. According to Mr Ackland, Mr Beaman commenced this meeting
by saying:
"I'm sorry to take up your time once again, but98. Thereafter, Mr Beaman selected a number of samples from the list of sales, and documentation in respect of those sales was obtained. Mr Beaman then sought and obtained a print-out of expenses, including particularly overhead expenses, and there then ensued a long discussion about the allocation of certain overhead expenses, having regard to the fact that Nomad sold not only forklift trucks of the particular models involved in the inquiry, but other forklift trucks, as well as used forklift trucks and spare parts. The discussion roamed over various items with discussion and apparent acceptance on various percentages appropriate to particular items.
every time we do a review somebody complains
about what we have done...I'll nominate a number
of the sales by Nomad and ask that you provide
me with all the usual documentation relating to
those sales. As you know from the past review,
I need to see the documents that show the price
to the end users, and all the documents which
relate to Nomad's selling, administration,
workshop and other expenses concerning those sales."
99. On 24 March 1992, a meeting was held at the premises of Powerlift which lasted virtually all day. At that meeting there was discussion of the schedules provided by Nomad and discussion as to the percentages of expenses and the proportion relevant to the particular forklift truck models under review. According to the applicants' evidence, various percentage figures were agreed upon by Mr Beaman as "acceptable allocations".
100. Subsequently, and without further discussion with representatives of the applicants, the Report of 30 June 1992 was prepared in relation to the selling and administrative expenses to be taken into account in determining the FOB export prices of the goods under review. At no time was anyone on behalf of the applicants told that the ACS had obtained information from other importers of forklift trucks which indicated that the selling and administration expenses of those importers in relation to forklift trucks involved different percentages of selling prices to those percentages applicable to Powerlift, nor did any representative of the ACS at any time request any explanation as to the reasons why other importers might have different percentage allocations.
101. The evidence adduced for the respondents differed in some of its detail
from that given by Mr Ackland and the other witnesses
for the applicants. The
most significant difference was that Mr Beaman deposed that he had said at the
outset of the first meeting:
"I will select one sale for each of the models102. Mr Beaman further deposed that later in the discussion he had said:
you have sold since 1 July 1991. I will then
need to establish all costs, charges and
expenses in relation to these selected forklift
charges and expenses in relation to these
selected forklift sales incurred at the dealer
level. Please realise that the information
gathered in these next few days will not
necessarily form the basis of final decisions.
I intend to compare each party's claimed
allocations for selling and administration
expenses for consistency as each is selling
virtually homogeneous forklifts in an intensely
competitive market. Moreover, I will be
examining each party's infrastructure to aid in
this comparison."
"You must realise that your claims on103. Mr Tierney's evidence substantially corroborated Mr Beaman's evidence. A note made by Mr Tierney tendered in evidence made no reference to this part of the conversation.
allocations will need to be compared with those
of your competitors and if they are
irreconcilably at variance, I will need to seek
legal advice."
104. To the extent that it is necessary to reconcile the various accounts of the meetings, I accept the evidence of Mr Ackland and Mr Dunkley in preference to that of Mr Beaman and Mr Tierney. I had the impression that Mr Beaman, in particular, perhaps not consciously, was seeking to justify himself by a process of ex post facto reconstruction. Mr Tierney had, in my view, little real recollection of what happened at the meeting and I accept the submission of counsel for the applicants that his evidence was prompted by reading Mr Beaman's affidavit. By contrast, Mr Ackland and Mr Dunkley were impressive witnesses and I accept them as witnesses of truth.
105. For the applicants it was submitted that I should find that:
"the Applicants were given:106. The evidence of the applicants, which I accept, enables me to make each of these findings and I do so. However, it does not follow that the applicants are entitled to succeed on this point.
(a) no opportunity to address the alleged
'wide discrepancies' between the figures
of the various exporters;
(b) no opportunity to make submissions as to
the appropriateness of a comparison
between the allocation by the First
Applicant of its selling and
administration expenses and those
undertaken by other importers;
(c) no opportunity to address whether in truth
there was any comparability between its
allocation of selling and administration
expenses and those of other corporations;
(d) no opportunity to further justify the
allocation of selling and administration
expenses which had been agreed in March
1992 in light of the change in approach by
the Third Respondent in May 1992;
(3) no opportunity to address the question of
whether, even if the allocation basis was
rejected, it was appropriate to use a
ratio based on the company's overall
expenses and revenues (ie across its whole
business, not just sales of forklift
trucks);
(f) no opportunity to address the question of
whether, even if the allocation basis was
rejected, it was appropriate to utilise
the company's accounts on a profit centre basis."
107. It is well established that the content of the rules of natural justice must depend upon the particular statutory context and the circumstances in which the question arises: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 585-6. The applicants submit that where the decision-maker has indicated a certain approach as one he is likely to pursue, and has done so in order to permit the party affected to make submissions in respect of that approach, procedural fairness does require that he advise if there is to be a fundamental change in that approach. Further, it is submitted that procedural fairness requires that where all information requested by the decision-maker has been provided, the party affected must be informed that the decision-maker proposes to reject its information as "unreliable".
108. While procedural fairness requires that a party interested in the
potential imposition of dumping duty must be afforded the
opportunity to be
heard in respect of matters relevant to whether there has been dumping, and,
in the result, a recommendation that
a notice be published under s.269TG, that
obligation does not require that every step in the decision-making process be
made only
in consultation with that person. There was no obligation upon the
decision-maker to inform the applicants of the way in which his
mind was
working or put to them any tentative views he had formed. To borrow from the
judgment of Wilcox J in Kanthal Australia
Pty Limited v The Minister for
Industry, Technology and Commerce (23 November 1987, unreported, at 29):
"It was encumbent upon him to direct their109. To conclude that the figures were unreliable involved the decision-maker in the making of a judgment which was his to make. It did not involve him in making any inference adverse to the applicants, or deciding some issue of fact adverse to the applicants. The decision-maker here was faced with a considerable divergence in the range of figures of overheads. He heard what the applicants had to say about the allocation of their own overhead expenses and then reached a conclusion. So to do is not a breach of natural justice. Nor did the evidence establish any ground, whether as a result of anything said by those representing the ACS or of any practice engaged in by the ACS, for a legitimate expectation that the decision-maker would adopt the percentage allocations submitted for by the applicants. There was, no doubt, hope that the figures discussed at the two meetings would be accepted, but I would find that the applicants were aware the possibility existed that the figures ultimately accepted could differ from those discussed.
attention to the subject matter and to hear what
they had to say. This he did. In my view there
was no failure to observe the dictates of
natural justice".
That the decision-maker erred in applying s.269TAB(3)
110. It is clear from Paragraph 8.6 of the June 1992 Report that Mr Beaman
took the view that it was necessary to investigate dealer
to end-user sales as
Powerlift did not usually sell to customers at arm's length. The applicants
submit that s.269TAB(1)(b) was
applicable, whether or not such sales were to
customer at arm's length. Thus it is said that Mr Beaman erred in the
construction
of the legislation or, alternatively, took into account an
irrelevant consideration.
111. This submission, clearly correct so far as concerns s.269TAB(1)(b),
leaves out of account the provisions of s.269TAB(3) which
provides:
"Where the Minister is satisfied that sufficient112. Clearly the formation of an opinion under s.269TAB(3) precludes the operation of s.269TAB(1). There is no particular reason why the calculation under s.269TAB(3) must be made in the same way as the calculation under s.269TAB(1)(b). As a matter of law, the fact that there was no arm's length sale by Powerlift might not necessitate the investigation of dealer to end-user sales in the calculation under s.269TAB(3). However, clearly no error of law would be committed in so doing.
information has not been furnished, or is not
available, to enable the export price of goods
to be ascertained under the preceding
subsections, the export price of those goods
shall be such amount as is determined by the
Minister having regard to all relevant information."
113. The real complaint of the applicants, as I understand it, is that the opinion under s.269TAB(3) was formed only because the Minister disregarded as "unreliable" the allocation of expenses by the applicants. Hence, the applicants sought to challenge the finding of unreliability under s.269TAB(4).
114. Section 269TAB(4) enables the Minister, in determining the export price, to disregard any information he considers to be unreliable. Mr Beaman determined, in his report of 30 June 1992, that the information provided by Powerlift Nissan was unreliable and that, in the result, he was satisfied that information had not been furnished, or was not available to enable the export price to be determined under s.269TAB(1). The Minister's decision was, as has been noted, based upon an analysis of information obtained by other importers. This analysis was the subject of challenge by the applicants. It was submitted that the procedure employed by Mr Beaman "demonstrated" the absence of any rational basis for the rejection of the material put forward by Powerlift Nissan. Mr Beaman's approach was criticised on the basis that one of the bases for rejecting the allocation put forward by Powerlift Nissan was to permit the adoption of a consistent approach for the purpose of arriving at an approximately consistent figure between various companies so as to act equitably.
115. To state all the criticisms made would make this judgment, already long, most unwieldy. I content myself with saying that whilst the criticisms would not have led me to regard the information advanced by Powerlift Nissan as being unreliable, that decision is not a matter for the Court. It was, and remains, a matter for Mr Beaman, and its exercise was not so unreasonable that no reasonable decision-maker could conclude as Mr Beaman did. Further, it simply is not correct that Mr Beaman "relied exclusively" on material outside the business of Powerlift Nissan and in so doing failed to take into account a relevant consideration. What Mr Beaman did was adopt a basis of estimation which he considered to be preferable.
116. The applicants then sought to explore in detail the decision made under
s.269TAB(4). Their written submissions read as follows:
"The comparison of costs which led ultimately to117. This argument is met by the respondents in two ways. First, it is submitted that a decision to invoke s.269TAB(4) was not a "decision" to which the Administrative Decisions (Judicial Review) Act 1977 applied. What was said by the High Court in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, especially at 339, was relied upon in support of this submission. That case makes it clear that a "reviewable decision" in the present context must be something more than an intermediate determination made on the way to an ultimate decision (at least unless the statute provided for the making of a final ruling on the point). It must be a determination, authorised by the statute, effectively resolving an actual substantive issue. The decision to disregard unreliable information in itself would not be a decision; the reviewable decision in the present circumstances is the decision whether to calculate the export price under s.269TAB(1)(a), (b) or (c), or perhaps the making of the calculation itself. If that decision is itself unreasonable, or arrived at in error, then the applicants would, however, still be entitled to succeed.
the application of section 269TAB(3) and TAB(4)
depended upon the identification of 'widely
disparate' selling and administration expenses
between the various importer and dealer groups
(the First Applicant and Nomad, Toyota and
Hodgson) and importer/dealer companies (MLA and
Yale). Those discrepancies were only identified
after the aggregation of the selling and
administration expenses relevantly of the First
Applicant and Nomad. Therefore the decision
under section 269TAB(4) as to unreliability only
came about as a result of an error of law in the
construction of section 269TAB(1)(b) on the part
of the Third Respondent."
118. The real matter in controversy between the parties lay with the rejection of sales and administration expenses by the decision-maker because he was unable to reconcile what he saw as widely disparate claims of applicable expense allocation to the goods under review.
119. The procedure adopted by the decision-maker was, in the applicants'
submission, as follows:
"...the Third Respondent:120. Although some aspects of what Mr Beaman did invited questions, I do not think that it can be said that he was precluded, as a matter of law, from finding the applicants' allocations unreliable, given the material which was available to him, and notwithstanding that some of that material could be challenged as not being comparable. Once the applicants' material was able to be disregarded, then Mr Beaman was authorised to proceed to make a calculation under s.269TAB(3). The decision made under s.269TAB(3) was accordingly not unreasonable.
(i) Aggregated the selling and
administration expenses identified
originally at import and dealer
levels in respect of (a) the First
Applicant and Nomad; and (b) Toyota
and Hodgson;
(ii) In the case of the First Applicant
and Nomad added together the
allocated selling and administration
expenses expressed as a percentage
of the revenue derived from the sale
of forklift trucks (as ascertained
at the meeting in March 1992);
(iii) In the case of Toyota and Hodgson he
aggregated the percentage put forward by
Toyota (in respect of a different period
to that under review) as relevant to
selling and administration expenses with
that ascertained in respect of Hodgson.
(iv) He then compared the two totals in
(ii) and (iii) to the selling and
administration percentage put
forward by MLA (in respect of sales
in which there was no dealer
involved) and therefore which had
entirely different costs and
expenses.
(v) He concluded there was a 'wide
disparity' between the figures
identified in (ii) and (iii) and
those identified in (iv);
(vi) He rejected the allocation of
selling and administration expenses
put forward at the March meetings
and ascertained a percentage figure
by dividing the revenue of the
company (which is concerned with
more than including different goods
the goods under reference) by the
total sales and administration
expenses of its entire business. A
similar process was applied to MLA,
but only to a division of that
company's business.
(vii) He accepted the percentage allocation by
Nomad, and the percentages put forward by
Hodgson and Toyota."
121. An alternative but related submission was that the scheme of the legislation required that, even if applying s.269TAB(3), s.269TAB(1) could only be departed from to the extent required to compensate for the insufficient material. So, it was said, to consider a transaction level not contemplated by s.269TAB(1) involved an error of law.
122. The initial premise upon which the submission is based is, in my view, flawed. There is nothing in s.269TAB(1), or any other section of the Customs Act, which requires that s.269TAB(1) is predominant. Section 269TAB(3) is not a power dependant upon or ancillary to s.269TAB(1). Indeed, as was submitted by the respondent, the existence of s.269TAB(3) is justified in terms where the export price can not be ascertained under s.269TAB(1)(a) or (b). All that need here be said is that the calculation under s.269TAB(3) would need to be a calculation consistent with the scheme of the legislation. There was no error committed by Mr Beaman in proceeding as he did under s.269TAB(3).
The Treatment of Interest
123. The applicants submit, and the respondents deny, that Mr Beaman's
treatment of interest in calculating the export price of the
goods was
internally inconsistent. The applicants say that when Mr Beaman dealt with
interest as an expense at the Nomad level,
he did so by applying it against
all purchases of forklift trucks Nomad made from Powerlift Nissan. When
dealing with it at the
Powerlift level, he credited interest to the sale of
all forklift trucks to Powerlift Nissan, including sales to other dealers.
The
failure to take into account this 'internal transaction' on a dollar for
dollar basis is said to have had the effect of depressing
the export price and
thereby increasing the amount of duty payable.
124. To this submission the respondents reply that the treatment of interest on a 'dollar for dollar basis' is a purely factual matter, which did not arise on the methodology utilised by Mr Beaman, which was to base deductions for expenses according to percentages derived by dividing aggregate expenses by aggregate revenue.
125. To assess this submission, it is necessary to analyse precisely what Mr Beaman did. The background to the problem is that Nomad purchased trucks from Powerlift in a transaction where the terms of trade provided for interest to be payable by Nomad to Powerlift on outstanding balances. At the Nomad level, Mr Beaman properly set out to calculate the selling and administration expenses on a per unit basis so as to deduct from the Nomad selling price of each vehicle under review a portion of selling and administration expenses. He did this by taking the total sales and administration expense of Nomad and dividing the figure arrived at by the total revenue of Nomad to reach a percentage figure. This he then applied to each item. He took the view that it was either difficult or impossible on the material provided to him to arrive at a precise figure for each component of sales and administration expenses. This approach is of course unobjectionable. It was not incumbent, for example, upon Mr Beaman to calculate the precise interest payable on each forklift truck sold by Nomad. Nevertheless, the method used by him was an approximation for this course. He had arrived at a composite figure which included his estimate of the interest payable by Nomad to Powerlift.
126. Mathematically, it is possible to calculate the percentage which interest played in the figure arrived at as representing the proportion of selling and administration expenses per item sold. Thus the overall percentage arrived at by Mr Beaman was 12.8%. This was constituted as to 48% by the interest component. Put in another way, of the selling and administration expenses per item sold by Nomad, 48% was attributable to interest. With this knowledge it is possible to calculate in respect of each model truck the amount of interest in fact taken into account.
127. At the level of Powerlift, Mr Beaman commenced with figures prepared by Powerlift, in effect a six months profit and loss account, which showed an item, "interest received", as a "departmental expense". The interest shown under that heading represented the interest received from Nomad for trucks financed, whether or not those trucks were models under review or not. That interest was shown as a negative amount, that is to say, the effect of treating it as a negative expense was to add it on to profit. Mr Beaman, having rejected the allocation of expenses put forward by the representatives of Powerlift, ultimately, as we have seen, adopted a figure calculated as a percentage of selling and administration expenses over all sales. The effect of this was to spread the interest receipt from Nomad over the whole of Powerlift sales. It can readily be seen that the figure taken into account as interest at the Powerlift level, referable to the goods under review, was a figure different from that taken into account at the Nomad level. The inconsistent treatment was unnecessary, illogical and, in my view, unreasonable.
128. In the course of argument, I raised with counsel for the respondents two matters not argued by the applicants but which troubled me. Since, in my view, the matter must be returned to the decision-maker for further calculation, I raise these matters at this stage so that there may not be a need for further consideration by this Court at a later time. First, the interest was clearly not an expense (albeit a negative expense) of Powerlift. It represented income of Powerlift. It was the treatment of the amount as an expense which seems to have prompted Mr Beaman to include it in the allocation which he made of expenses over all sales. When seen as an item of income, it is clear that no question of allocation arises. More significantly, however, is the need to recognise the role interest plays in a calculation such as the present.
129. Interest payable by a dealer such as Nomad to a vendor to it with which it is associated may, depending upon the circumstances, either be a holding cost, that is to say clearly a post export charge, or it may be, in a particular case, something other than interest (for example, an enhancement of purchase price). There is no suggestion here that the interest payable from Nomad to Powerlift was other than a holding charge of Nomad.
130. As a holding charge, the interest payable to Powerlift clearly had to be deducted from the price paid by an arm's length customer to Nomad, for it was a post-export expense. The amount should not be taken into account at all at the level of the vendor/financier. If the amount is in truth interest, then when looking at the profit of the associated vendor, it is not a profit related to the goods under review, any more than an arm's length profit on the sale of other goods would be.
The Treatment of Losses
131. The applicants criticise Mr Beaman's calculation of export price for
failing to make a deduction for losses at the dealer transaction
level. This
came about, so it was submitted, because Mr Beaman believed that he was bound
in law to apply the methodology established
by s.269TAB(2) to transactions at
both the dealer and importer level. The methodology in s.269TAB(2) is, in
terms, applicable only to transactions at the importer level under
s.269TAB(1)(b). It clearly has no direct relevance to transactions at the
dealer level.
132. Mr Beaman, in his affidavit evidence, explained his treatment of losses
as follows:
"...I constructed an export price by selecting133. Mr Beaman was cross-examined on the matter. Counsel for the applicants commented that he had made no allowance for losses in respect of sales from Powerlift to Nomad. To this Mt Beaman answered:
the price paid in the first arms length sale of
each model exported to Australia and deducting
from that price duties, sale taxes, costs,
charges, expenses and profits arising in
relation to the goods under reference so as to
work back to a deductive FOB price.
I chose to make no adjustment for losses
incurred in relation to the sales of the goods
at the dealer level. This was in the context of
my finding that the sales from the importer to
the dealer were not at arms length... In this
context, I considered that to make an adjustment
for losses on sales by the dealer would have
had the effect of negating the possibility of
'sales dumping'. The phenomenon of 'sales
dumping' may occur where a constructed export
price is below the invoiced export price to the
extent of the loss, in consequence of the
selling price in the first arms length
transaction in Australia not recovering all
relevant costs.
For the same reason I chose to make no
adjustment for losses incurred in relation to
sales of the goods at the importer level."
"No, that was my interpretation of the law."134. This passage makes it clear that Mr Beaman adopted the approach which he did with respect to losses because he believed that as a matter of law he was compelled so to do. If that belief were wrong in law, then Mr Beaman's decision will have miscarried. It is necessary, therefore, to return to the legislation and the policy enshrined in it to determine whether Mr Beaman was so bound.
The cross-examination then continued:
Ms Beazley: Nor did you make any allowance for
the treatment of losses at the level of the
sales by Nomad to the end user?
Mr Beaman: I would answer that in the same way.
Ms Beazley: You say that is because of your
interpretation of the law, is that your answer
as to why you have not done so?
Mr Beaman: Yes, except that I did take advice
from my peers so it was not exclusively my
interpretation, but with that qualification, yes.
Ms Beazley: And your interpretation of the law
was one which derived out of a scheme in section
269TAA, I take it?
Mr Beaman: Basically, yes.
Ms Beazley: In almost all cases the sales by
Nomad to the end users were at a loss, were they not?
Mr Beaman: There were quite a number of losses.
When I added in the element of interest, yes,
that did have that effect."
135. It will be recalled that where importer and exporter are not at arm's
length, s.269TAB(1)(b) requires the calculation of export price to be made by
commencing with the sale from the importer to the importer's customer at arm's
length, and deducting therefrom the deductions prescribed in s.269TAB(2),
including the profit, if any, made by the importer on that sale (subject to
the case where the Minister specifies that profit at
a particular rate is to
be disregarded). Section 269TAA is an interpretation provision designed to
assist in the determination whether a particular transaction is at arm's
length for the
purposes of s.269TAB(1)(b). Relevant to the present problem,
it provides:
"(2) Without limiting the generality of136. Section 269TAA (1)(c) provides that a purchase or sale of goods is not to be treated as an arm's length transaction if:
subsection (1), where:
(a) goods are exported to Australia otherwise
than by the importer and are purchased by
the importer from the exporter (whether
before or after exportation) for a
particular price; and
(b) the Minister is satisfied that the
importer, whether directly or through an
associate or associates, sells those goods
in Australia (whether in the condition in
which they were imported or otherwise) at a loss;
the Minister may, for the purposes of paragraph
(1)(c), treat the sale of those goods at a loss
as indicating that the importer or an associate
of the importer will, directly or indirectly, be
reimbursed, be compensated or otherwise receive
a benefit for, or in respect of, the whole or a
part of the price."
"(c) in the opinion of the Minister the buyer,137. Underlying these provisions is what the parties in evidence referred to as "sales dumping". Sales dumping occurs, so the December 1991 Report put it in Chapter 11 "Export Prices", when:
or an associate of the buyer, will,
directly or indirectly be reimbursed, be
compensated or otherwise receive a benefit
for, or in respect of, the whole or any
part of the price."
"sales to end users are at price levels that do138. The most normal case of sales dumping will occur where the goods under review have not entered Australia at a price less than the normal value in the country of export, but have thereafter been "dumped" by being sold at a loss by the importer, under an arrangement that the exporter will reimburse the importer for that loss. The significance of s.269TAA(2) is that it permits the Minister, in effect, to assume the existence of a reimbursement agreement, where a loss arises. It does not make it mandatory for the Minister to do so. It may be possible to conceive of "sales dumping" where no reimbursement arrangement exists. It is a possibility neither addressed by the legislature in s.269TAA(2), nor by the parties in argument before me, and I put it to one side here.
not cover all costs to import, modify (where
applicable) and sell."
139. It is obvious enough that a reimbursement arrangement may exist not merely as between importer and exporter, but also as between exporter and more remote parties. So, for example, if importer and dealer are associated, then dumping could occur, notwithstanding that the actual invoiced export price is no less than normal value if the dealer were to sell at a loss and that loss were to be reimbursed.
140. However, the mere fact that a sale is at a loss at the dealer level would not necessitate the conclusion that sales dumping was taking place. There might well be legitimate commercial reasons unrelated to dumping which brought about the sales at a loss. At least where the decision-maker is unable to avail him or herself of s.269TAA(2), the determination of whether sales dumping has occurred as part of a step in the process of determining an ultimate export price involves a question of judgment. No legal prescription binds the decision-maker to assume reimbursement and thereby disregard losses. Given a finding of fact that there is a likelihood of reimbursement, compensation or benefit, he may disregard losses. Such a likelihood may often, if not usually, be inferred. Absent consideration of that question, however, the decision-maker would, in my opinion, err in law in disregarding losses at the dealer level.
141. Had that been the only ground upon which the applicants were successful, however, I would not have sent the matter back to the relevant decision-maker. This is so because in the December 1991 Report there was a finding that sales dumping had in fact occurred. The making of such a finding would have entitled Mr Beaman, in any event, to disregard losses incurred by Nomad.
142. By way of an alternative submission, the applicants contended that, if the importer and dealer were to be treated as related entities, it was appropriate for losses and profits to be netted off. In the circumstances of the present case, it is unnecessary to explore this submission.
The absence of a delegation
143. The applicants finally submitted that the exercise by Mr Beaman of the
Minister's power under s.269TAB(4) was void, because the Minister had not
delegated expressly that power to Mr Beaman. The submission was no more than
formally put.
144. The delegation to Mr Beaman, which was in evidence, specifically referred to the Minister's power under s.269TAB(1)(c), s.269TAB(2)(c) and s.269TAB(3), but made no reference to the power under s.269TAB(4). The applicants submit that while s.269TAB(4) is related to s.269TAB(3) and has no independent operation, it nevertheless confers upon the Minister a separate power from that conferred by s.269TAB(3) and accordingly can only be exercised by the Minister personally in the absence of a delegation.
145. With respect, I disagree. Delegation of the power under s.269TAB(3) carries with it, in my opinion, the power for the purposes of s.269TAB(3) to disregard information considered to be unreliable. There is no requirement for a separate delegation by the Minister of the power conferred by s.269TAB(4).
Conclusion
146. The applicants have been successful on a number of matters, and in these
respects the matter must go back to the decision-maker
to do again in
accordance with law. I would direct the applicants to bring in short minutes
of order reflecting the matters dealt
with in this judgment. If the parties
are unable to agree as to the terms of those orders I will hear argument on a
date to be agreed
with counsel when I will also hear argument as to costs.
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