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Federal Court of Australia |
Customs - administrative review of decisions relating to the alteration of the rate of interim duty under Division 5 of Part XVB of the Customs Act - anti-dumping duty - export of fibreglass gun rovings from Brazil - declaration by Minister that normal value, export price and non-injurious price be revised upwards - changes in the variable factors relevant to the determination of interim duty - whether scope of review under s 269ZB confined to a consideration as to what changes had taken place in variable factors - meaning of "review" in Division 5 - whether broad or narrow construction of "review" is to be preferred - the base year for the purposes of calculating interim duty - Ministerial decision-making under Division 5 of Part XVB.
Administrative Decisions (Judicial Review) Act 1977
Customs Tariff (Anti-Dumping)Act 1975
Colpitts v ATC (1986) 70 ALR 554 - appl.
Powerlift (Nissan) Pty Ltd v Minister of State for Small Business, Construction and Customs (1993) 40 FCR 332 - appl.
MINISTER FOR SMALL BUSINESS AND CONSUMER AFFAIRS and CHIEF EXECUTIVE OFFICER, AUSTRALIAN CUSTOMS SERVICE v COMPANHIA VIDRARIA SANTA MARINA
NG 355 OF 1997
JUDGES: BEAUMONT, FOSTER AND TAMBERLIN JJ.
PLACE: SYDNEY
DATE: 29 OCTOBER 1997
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 355 of 1997 |
|
BETWEEN: | MINISTER FOR SMALL BUSINESS AND CONSUMER AFFAIRS
First AppELlant
CHIEF EXECUTIVE OFFICER, AUSTRALIAN CUSTOMS SERVICE Second AppELLant |
|
AND: | COMPANHIA VIDRARIA SANTA MARINA
Respondent |
|
JUDGES: | BEAUMONT, FOSTER AND TAMBERLIN JJ. |
| DATE OF ORDER: | 29 OCTOBER 1997 |
| WHERE MADE: | SYDNEY |
ORDERS:
1. Appeal dismissed, with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 355 of 1997 |
|
BETWEEN: | MINISTER FOR SMALL BUSINESS AND CONSUMER AFFAIRS
First AppELLant
CHIEF EXECUTIVE OFFICER, AUSTRALIAN CUSTOMS SERVICE Second AppELLAnt |
|
AND: | COMPANHIA VIDRARIA SANTA MARINA
Respondent |
JUDGES:
BEAUMONT, FOSTER AND TAMBERLIN JJ. DATE: 29 october 1997 PLACE: SYDNEY
BEAUMONT AND FOSTER JJ:
INTRODUCTION
Companhia Vidraria Santa Marina ("Marina"), the present respondent, exports fibreglass gun rovings ("the rovings") from Brazil to Australia. By its amended application for an order of review under the Administrative Decisions (Judicial Review) Act 1977 , Marina sought judicial review of the following decisions made under Part XVB (ss 269T-269ZJ) of the Customs Act 1901 ("the Act") (which Part contains special provisions relating to anti-dumping duties):
1. A decision made on 15 April 1996 by the Chief Executive Officer, Australian Customs Service ("the CEO"), the second appellant, consisting of a report under s 269ZB(4) of the Act in a review of the rate of "interim duty" imposed on goods of the kind exported by Marina ("the first decision").
2. A decision of the Minister for Small Business and Consumer Affairs ("the Minister"), the first appellant, making a declaration on 23 April 1996 under s 269ZC(1) of the Act which fixed each of the variable factors relevant to the determination of the interim duty ("the second decision").
A Judge of the Court held that judicial review ought to be granted and ordered that both decisions be set aside and that their subject matter be remitted to the CEO and the Minister respectively to be determined according to law. The CEO and the Minister now appeal from those orders.
THE LEGISLATIVE SCHEME
The structure of Part XVB of the Act is relevantly as follows. Division 1 (ss 269T-269TA) deals with preliminary matters, including definitions. Division 2 (ss 269TB-269TF) and Division 3 (ss 269TG-269U) deal with consideration of anti-dumping matters by the CEO and by the Minister respectively. Division 4 (ss 269V-269Y) deals with dumping duty or countervailing duty assessment. Division 5 (ss 269Z-269ZD), which is central to this litigation, deals with review of interim duty.
(a) The background
Section 269TG(2) provides:
"(2) Where the Minister is satisfied, as to goods of any kind, that:
(a) the amount of the export price of like goods that have already been exported to Australia is less than the amount of the normal value of those goods, and the amount of the export price of like goods that may be exported to Australia in the future may be less than the normal value of the goods; and
(b) because of that, material injury to an Australian industry producing like goods has been or is being caused or is threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered;
the Minister may, by public notice whether or not he or she has made, or proposes to make, a declaration under subsection (1) in respect of like goods that have been exported to Australia), declare that section 8 of the Anti-Dumping Act applies to like goods:
(c) that are exported to Australia after the date of publication of the notice or such later date as is specified in the notice; and
(d) the amount of the export price of which is less than the amount of their normal value."
By s 8(4) of the Customs Tariff (Anti-Dumping)Act 1975 ("the Anti-Dumping Act"), it is relevantly provided that the interim dumping duty payable on goods the subject of a notice under s 269TG(2) of the Act:
"is an amount equal to the sum of:
(a) the difference between the export price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the notice and the normal value of goods of that kind as so ascertained, or last so ascertained; and
(b) if the export price of those particular goods is lower than the export price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the notice - the amount by which the latter export price exceeds the former."
Section 269TG(3) of the Act relevantly provides:
"Where:
(a) ...
(b) a notice under subsection (2) declares like goods in relation to goods of a particular kind to be goods to which that section applies;
the notice must... include a statement of the respective amounts that the Minister ascertained, at the time of publication of the notice:
(c) was or would be the normal value of the goods to which the declaration relates; and
(d) was or would be the export price of those goods; and
(e) was or would be the non-injurious price of those goods."
(b) The review provisions
As has been noted, the review provisions, with which this case is centrally concerned, are found in Division 5 of Part XVB.
The circumstances in which a review of interim duty may be sought by an affected party are provided for by s 269Z(1) as follows:
"269Z. (1) If:
(a) a dumping duty notice or a countervailing duty notice has been published in respect of goods; and
(b) an affected party considers that it is appropriate to review the rate of interim duty imposed on goods of that kind because one or more of the variable factors relevant to the determination of interim duty has changed;
the affected party may, by application lodged with the CEO, request a review of the rate of interim duty.
The phrase "variable factors relevant to the determination of interim duty" is defined, for present purposes, by s 269T(4E)(a) as follows:
"(4E) In this Act, a reference to variable factors relevant to the determination of interim duty payable on goods the subject of a dumping duty notice or a countervailing duty notice is a reference:
(a) if the goods are the subject of a dumping duty notice - to the normal value, export price and non-injurious price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the notice;"
The Minister may make a similar request in the circumstances provided for by s 269Z(2) as follows:
"(2) If:
(a) a dumping duty notice or a countervailing duty notice has been published in respect of goods; and
(b) the Minister considers that it may be appropriate to vary the rate of interim duty because one or more of the variable factors relevant to the determination of interim duty may have changed;
the Minister may, at any time, by notice in writing, request the CEO to review the rate of interim duty."
Section 269Z(3) provides as follows for time limits for an application by an affected party:
"(3) An application under subsection (1) must not be made earlier than 12 months after:
(a) the day of publication of the dumping duty notice or countervailing duty notice to which the application relates; or
(b) if a review has, or reviews have, already been undertaken under subsection (1) or (2) - the day on which the Minister published the result of the last such review to be undertaken."
Section 269ZA(1) prescribes the following with respect to the content of an application by an affected party:
"269ZA. (1) An application under subsection 269Z(1) for review of interim duty must be in writing and contain:
(a) a description of the kind of goods to which the dumping duty notice or countervailing duty notice the subject of the application relates; and
(b) a statement of the variable factor or factors relevant to the determination of interim duty that, in the opinion of the applicant, have changed; and
(c) a statement of the amount by which each such factor has changed and information to establish that amount."
Section 269ZB(4) makes the following provision with respect to the consideration by the CEO of an application, or request, for review:
"(4) The CEO must, not later than 100 days after the day of publication of the notice, after considering the application for review any submissions made and any other material he or she considers relevant, give the Minister a report recommending:
(a) that the rate of interim duty remain as originally calculated; or
(b) that the rate of interim duty be altered;
and setting out the CEO's reasons for so recommending."
As has been noted, the first decision challenged in these proceedings was made under s 269ZB(4).
The second decision challenged in this litigation was, as previously mentioned, made under s 269ZC(1), which provides as follows:
"269ZC. (1) After considering the recommendation of the CEO and the reasons for that recommendation, the Minister must, subject to subsection (2) by notice in writing published in the Gazette:
(a) declare that, with effect from the day of publication of the notice, this Act and the Anti-Dumping Act are taken to have had effect as if the Minister had, in the dumping duty notice or countervailing duty notice, as the case requires, fixed each of the variable factors relevant to the determination of interim duty at the respective amounts specified in the notice; or
(b) declare that, for the purposes of this Act and the Anti-Dumping Act, each of the variable factors relevant to the determination of interim duty is to remain unchanged;
and where the Minister does so, he or she must notify the applicant accordingly."
THE BACKGROUND FACTS
There was no dispute about the background facts.
In early 1994, Marina commenced the export of the rovings from Brazil to Australia.
In January 1994, the Australian Customs Service ("the ACS") made a preliminary finding that rovings imported from China, Korea, Taiwan and Venezuela were at "dumped" prices.
In May 1994, the Anti-Dumping Authority ("the ADA") reviewed the ACS finding and found that, in 1991, the Australian market was not affected by any such dumping. In making its finding, the ADA used a "net selling price" achieved by the local industry for 1991 to calculate the "unsuppressed" selling price to ascertain the "non-injurious" price. This notion of the "unsuppressed" price is not one recognised, at least by that description, in the legislation, but is basic to the calculation of the "non-injurious" price. The "unsuppressed" selling price is the price for the relevant item unaffected by dumping. Hence the recourse to the "net selling price" for 1991.
In March 1994, ACI Australia Limited trading as ACI Fibreglass, a local manufacturer of rovings, applied to the ACS for the imposition of anti-dumping measures against the export of rovings from Brazil.
In July 1994, the ACS made a preliminary finding that there were sufficient grounds for the issue of a dumping duty notice in respect of rovings exported from Brazil.
This finding was reviewed by the ADA in November 1994. The ADA report, which found that it was still appropriate to base the unsuppressed local selling price on that achieved in 1991, recommended that the Minister take anti-dumping measures against rovings exported from Brazil.
In December 1994, the Minister accepted the ADA's recommendation and signed a dumping duty notice accordingly ("the first notice").
In June 1995, Marina increased its export price to Australia to the non-injurious price specified in the first notice.
In December 1995, Marina applied, pursuant to s 269ZA(1) for a review of the rate of interim duty.
THE FIRST DECISION
On 15 April 1996, as has been said, the ACS reported to the Minister pursuant to s 269ZB(4). The report found that prices in 1990, and not 1991, were appropriate in establishing the unsuppressed selling price. It did so after receiving representations from ACI Fibreglass that the previous acceptance by the ADA of 1991 as the relevant year had been in error. The ACS recommended that the Minister not alter the rate of interim duty for this reason:
"Despite increases in the export price, normal value and non-injurious price, the rate of interim duty remains the same because the margin between the export price and non-injurious price has not changed."
THE SECOND DECISION
On 23 April 1996, as previously mentioned, the Minister accepted this recommendation and made declarations under s 269ZC(1) that the normal value, the export price and the non-injurious price, as originally ascertained in the first notice, be revised upwards.
MARINA'S CHALLENGE
By its amended statement of claim, Marina claimed that the CEO:
"misconstrued the provisions of section 269ZB as allowing the ACS to recommend a change to the non-injurious price factor in the calculation of the interim duty when there had been no change in that factor since the date of the first dumping duty notice; ...[and] as allowing a review of the original recommendation of the ADA of the non-injurious price for the interim duty."
Marina further claimed that the Minister:
"misconstrued the provisions of section 269ZC as allowing him to change the non-injurious price factor in the calculation of the interim duty when there had been no change in that factor since the date of the first dumping duty notice; ...[and] misconstrued the provisions of section 269ZB as allowing a review of the original recommendation of the ADA of the non-injurious price for the interim duty."
THE REASONING AT FIRST INSTANCE
In upholding Marina's claim for judicial review, the learned primary Judge said:
"As a result of the process that is contemplated, an anti-dumping notice must specify three things, being the normal value, the export price and the non-injurious price. Whatever might be the scope of the process under division 2, all that is to be reviewed under division 5 are the three matters which are to be stated in a dumping notice. It is significant that what is involved is a review of the interim duty limited to the review of those three factors. Those three matters are the only matters which fall for review under division 5.
The scope of the exercise required under division 5 is narrower than the scope of the exercise which must be undertaken before a dumping notice is published. It would be curious if the limited review that is contemplated under division 5, as compared with the division 2 and division 3 process, left open the possibility that the base which was being reviewed could be completely undermined by reason of the CEO adopting a completely different approach to the establishment of the three matters which are reviewed.
In addition to those considerations is the language of section 269Z itself. What is involved is a consideration of whether any of the variable factors has changed. That signifies, in the context of the scheme of the Act in my view, that what the CEO was required to do was consider what had happened since the Minister published the Original Notice or last carried out a review. It would be curious, in my view, that, if the CEO were simply considering what had changed, he or she could nevertheless embark on an inquiry that undermined the conclusion reached by the Authority after the enquiry... which had been carried out under division 2."
THE ARGUMENTS FOR THE MINISTER AND THE ACS ON THE APPEAL
On behalf of the appellants the following submissions are made:
* If the circumstances in which a review of a dumping notice may be sought have arisen, the CEO has a duty to conduct "a review of the interim rate of duty" in accordance with Division 5 of the Act. The use of the word "review" imports that there should be a reconsideration of those matters which are the subject of the review with a view to correction or improvement. (See Colpitts v ATC (1986) 70 ALR 554 at 565-6; Re Brindle (1992) 35 FCR 506 at 508-512).
* His Honour's reference to "undermin(ing) the conclusion reached by the Authority" appeared to assume that the role of the ADA in the initial dumping notice process was in some way inviolate. Why this should be so was not explained and is not readily apparent. Merely because the role of the ADA in the initial dumping notice procedure is subsequent to that of the CEO and the ADA conducts a review, does not mean that the ADA is superior to the CEO, or that the ADA's report takes precedence over the report of the CEO on a Division 5 review. Whatever may be the hierarchical position on the initial inquiry, the ADA plays no role in a Division 5 review.
* There is no legislative, or other, reason why, in a Division 5 review, the CEO should adopt what he considers to be a flawed basis for ascertaining non-injurious price simply because it was the method used by the ADA in its inquiry. The language of Division 5 does not give rise to the implication that there exists such a fetter on the CEO's reporting power. To imply such a fetter requires a virtual re-writing of Division 5.
* Since the CEO was required by s 269ZB(4) to consider relevant submissions, and since the terms of Division 5 require a "review of the rate of interim duty", it is difficult to see how or why the CEO should be required to ignore the submission of ACI Fibreglass that the base year chosen by the ADA for the purposes of calculating non-injurious price was inappropriate. To interpret Division 5 as imposing restrictions on the CEO from dealing with this matter in his report to the Minister, or from expressing his opinion as to the appropriate methodology, or from utilising what the CEO considered to be the most appropriate methodology, would serve no legislative purpose and could give rise to perversity.
* In the CEO's report there are at least three differences in methodology from that used by the ADA in its report, yet his Honour's judgment only deals with one of these differences. If the judgment at first instance is correct, this presumably means that the CEO could not validly have made a report involving any of these changes in methodology.
* It was assumed in his Honour's judgment that the Minister's decision was tainted by the content of the CEO's report. This assumption was not warranted. No reason was given by his Honour why the Minister is, or should be, inhibited in making a decision under s 269ZC by reason of the way in which the ADA went about ascertaining non-injurious price. There is no valid reason why the Minister's power should be so fettered.
CONCLUSIONS ON THE APPEAL
In our opinion, the answer to the appellants' arguments is to be found, as the primary Judge held, in the structure and language of Division 5 itself.
It will be recalled that, relevantly, the structure and language of the Division are as follows:
* An affected party may request a review if, inter alia, that party considers that it is appropriate "because one or more of the variable factors relevant to the determination of interim duty has changed" (s 269Z(1)(b)). (Emphasis added).
* The Minister may request a review if, inter alia, the Minister considers that it may be appropriate to vary the rate "because one or more of the variable factors relevant to the determination.... may have changed" (s 269Z(2)). (Emphasis added).
* An application for review must state "the amount by which each [variable] factor has [in the applicant's opinion] changed and information to establish that amount" (s 269ZA(1)(c)). (Emphasis added).
* After considering the application, any submissions and any other material considered relevant, the CEO reports to the Minister recommending, with reasons, that the rate (a) "remain as originally calculated" or (b) "be altered" (s 269ZB(4)).
* After considering the recommendation and its reasons, the Minister must declare that:
(a) The Act and the Anti-Dumping Act 1990 are thenceforth taken to have had effect as if the Minister had, in the dumping duty notice, fixed each of the relevant variable factors at the respective amounts then specified; or
(b) For the purposes of the Act and the Anti-Dumping Act, each of the relevant variable factors is to remain unchanged (s 269ZC(1)).
It is important for present purposes to note, as his Honour also emphasised, that a review can only occur if the party affected, or the Minister, considers that one or more of the relevant variable factors has, or may have, changed. It is also significant, in this context, that the only material functions of the Minister are (a) to fix each of the variable factors at a specified amount or (b) to declare that each factor is to remain unchanged.
These provisions indicate, in our opinion, that the inquiry to be undertaken by the CEO and the Minister in the course of the review is not unfettered, as the appellants' argument would suggest. On the contrary, when the relevant provisions of Division 5 are read as a whole, the text demonstrates an intention to confine the scope of the review to those areas where there has, or may have, been a change in one of the variable factors. Conceptually speaking, there is nothing perverse in restricting the scope of the review in this way.
This conclusion is reinforced by the approach taken by Hill J in Powerlift (Nissan) Pty Ltd v Minister of State for Small Business, Construction and Customs (1993) 40 FCR 332, in considering earlier, but similar, legislation. His Honour said (at 345):
"The power to re-ascertain 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." (Emphasis added).
We agree with the primary Judge, for the reasons he gave, that judicial review ought to be granted.
The appeal should be dismissed, with costs.
|
I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of their Honours Justices
Beaumont and Foster |
Associate:
Dated: 29 October 1997
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 355 of 1997 |
OF THE FEDERAL COURT OF AUSTRALIA
| BETWEEN: | MINISTER FOR SMALL BUSINESS AND CONSUMER AFFAIRS
FIRST APPELLANT
CHIEF EXECUTIVE OFFICER OF CUSTOMS SECOND APPELLANT |
|
AND: | COMPANHIA VIDRARIA SANTA MARINA
RESPONDENT |
JUDGES:
BEAUMONT, FOSTER & TAMBERLIN JJ DATE: 29 OCTOBER 1997 PLACE: SYDNEY
This appeal concerns the scope of the administrative review which the Chief Executive Officer of Customs ("the CEO") is required to conduct when considering the alteration of the interim rate of anti-dumping duty under Division 5 of Part XVB of the Customs Act 1901 (Cth) ("the Act") which comprises ss 269Z to 269ZD of that Act.
The relevant provisions of the Act which provide for review of the interim rate read as follows:
"269Z (1) If:
(a) a dumping duty notice or a countervailing duty notice has been published in respect of goods; and
(b) an affected party considers that it is appropriate to review the rate of interim duty imposed on goods of that kind because one or more of the variable factors relevant to the determination of interim duty has changed;
the affected party may, by application lodged with the CEO, request a review of the rate of interim duty.
....
269ZA (1) An application under subsection 269Z(1) for review of interim duty must be in writing and contain:
(a) a description of the kind of goods to which the dumping duty notice or countervailing duty notice the subject of the application relates; and
(b) a statement of the variable factor or factors relevant to the determination of interim duty that, in the opinion of the applicant, have changed; and
(c) a statement of the amount by which each such factor has changed and information to establish that amount.
.....
269ZB (1) As soon as practicable after:
(a) the lodgment of an application under subsection 269Z(1); or
(b) the receipt of a request under subsection 269Z(2);
but not later than 25 days after the lodgment of the application or receipt of the request, the CEO must publish a notice in the Gazette and in a newspaper circulating in all States and internal Territories stating that it is proposed to review the rate of interim duty attaching to the goods the subject of the application or request.
......
(4) The CEO must, not later than 100 days after the day of publication of the notice, after considering the application for review and any other material he or she considers relevant, give the Minister a report recommending:
(a) that the rate of interim duty remain as originally calculated; or
(b) that the rate if interim duty be altered;
and setting out the CEO's reasons for so recommending.
269ZC (1) After considering the recommendation of the CEO and the reasons for that recommendation, the Minister must, subject to subsection (2) by notice in writing published in the Gazette:
(a) declare that, with effect from the day of publication of the notice, this Act and the Anti-Dumping Act are taken to have had effect as if the Minister had, in the dumping duty notice or countervailing duty notice, as the case requires, fixed each of the variable factors relevant to the determination of interim duty at the respective amounts specified in the notice; or
(b) declare that, for the purposes of this Act and the Anti-Dumping Act, each of the variable factors relevant to the determination of interim duty is to remain unchanged;
and where the Minister does so, he or she must notify the applicant accordingly.
......
(3) If the Minister publishes a declaration under paragraph (1)(a), this Act has effect, with effect from the day of publication of the declaration, as if each of the variable factors relevant to the determination of interim duty as so fixed under that paragraph had been ascertained for the purpose of the dumping duty notice or the countervailing duty notice.
......"
Background
The amount of interim dumping duty payable is determined by three variable factors, namely: the ascertained normal value; the ascertained export price, and the non-injurious price ("NIP"). The maximum amount of dumping duty that may apply is an amount equal to the difference between the normal value and the export price. The normal value of goods is, in most circumstances, the price paid for the goods in the domestic market of the country of export. A lesser amount of dumping duty will apply if such lesser amount is sufficient to remove the injury to the Australian industry caused by dumping. For this purpose the NIP is calculated. That is the price at which the goods could be imported into Australia without injury to Australian manufactures.
The NIP is ascertained by first calculating an "unsuppressed selling price" ("USP"). The USP is the price the goods would be sold for in the Australian market in the absence of dumping. In determining the USP the procedure is to first look to the market price for guidance. That is to examine the prices of the locally produced goods at a time when the market was not affected by dumping. If this procedure is not possible, then attention is directed to the Australian industry's current costs to make and sell, and an estimate of the profit (if any) which would be achieved by the industry in a market not affected by dumping is added on. To estimate this profit the procedure is to look to the market for guidance. The method then works back to a free-on-board ("FOB") price by deducting all relevant costs which would be incurred by an importer. If the FOB price is less than the normal value then this price would be the NIP, as defined in s 269TACA.
In early 1994 the applicant began exporting fibreglass gun rovings ("the goods") to Australia from Brazil. In January 1994 the Australian Customs Service ("the ACS") had made a preliminary finding that such goods imported from China, Korea, Taiwan and Venezuela were at dumped prices and that there were sufficient grounds for the publication of a Dumping Duty Notice in respect of such imports. In May 1994 the Anti-Dumping Authority ("the ADA") reviewed this positive preliminary finding and found, among other matters, that the Australian market had not been affected by dumping in 1991. On this basis the ADA then used the net selling price achieved by the local industry for 1991 to calculate the USP as a basis for ascertaining what would be the NIP for the purposes of the Customs Tariff (Anti-Dumping) Act 1975 (Cth). The use of the year 1991 as the base year for calculation purposes is important on this application.
On 18 March 1994 ACI Fibreglass lodged an application with the ACS requesting that anti-dumping measures be taken against the goods imported from Brazil. The ACS made a preliminary finding that the goods had been exported at dumped prices. In November 1994 the ADA reviewed the preliminary finding of the ACS and recommended that the Minister take anti-dumping action against imports of the goods from Brazil. In its report of 21 November 1994 the ADA found, as it had in its May report, that it was appropriate to base the USP on the local industry's net selling price in 1991.
On 5 December 1994 an Australian Customs Dumping Duty Notice was issued under the provisions of s 269TG of the Act in respect of the goods imported from Brazil. The publication of this Notice followed the ADA's November report being forwarded to the Minister for Small Business and Consumer Affairs ("the Minister"). The ADA recommendations in that respect were accepted by the Minister.
In about June 1995 the respondent increased the export price of the goods exported to Australia to the NIP set by the first Dumping Duty Notice. On 15 December 1995 the respondent lodged an application under s 269ZA for review of the interim dumping duty rate applied to the goods exported from Brazil on the basis that a variable factor, namely the export price, had changed.
In the Commonwealth Gazette, dated 9 January 1996, the ACS announced that it had initiated a review of the interim duty rate. Submissions were received from the respondent and from Australian importers of the goods and a local producer, namely ACI Fibreglass.
The review was completed by 15 April 1996. On that date the CEO furnished a report to the Minister containing recommendations. The ACS found that changed circumstances had altered the level of the variable factors, but that there should be no change in the actual rate of interim duty. On 23 April 1996 the Minister accepted the recommendations of the CEO and signed a declaration under subs 269ZC(1) of the Act. This declaration was published in the Commonwealth Gazette and the Australian Financial Review on 15 May 1996.
The Minister made it clear in his Statement of Reasons dated 26 June 1996, furnished pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), that he accepted and adopted the findings contained in the report from the CEO and specified therein as the basis for his decision. It must follow therefore in this case that if the finding of the CEO was unauthorised then the decision of the Minister must also be set aside.
Application for Review
The respondent, in its amended Statement of Claim contended that both the CEO and the Minister had erred in law because they had misconstrued the provisions of s 269ZB as permitting a review of the original recommendation by the ADA as to the NIP for consideration of interim duty. In other words the contention was, in substance, that the scope of review permitted under s 269ZB was confined to a consideration as to what changes had taken place in the variable factors and did not extend to reviewing the determination of the 1991 base year used by the ADA, which had been previously accepted by the Minister.
The primary judge held that Division 5 of the Act did not authorise the CEO, in the conduct of the review, to go behind and reconsider the determination that had been made by the ADA when providing its report.
Accordingly, his Honour ordered that determinations of the Minister and of the CEO be set aside and that the subject matter of those decisions be remitted to the CEO and the Minister for determination according to law. He also ordered that the CEO and the Minister should pay the costs of the respondent.
Essentially, the reasoning of the primary judge is encapsulated in the following statements:
"As a result of the process that is contemplated, an anti-dumping notice must specify three things, being the normal value, the export price and the non-injurious price. Whatever might be the scope of the process under division 2, all that is to be reviewed under division 5 are the three matters which are to be stated in a dumping notice. It is significant that what is involved is a view if the interim duty limited to the review of those three factors. Those three matters are the only matters which fall for review under division 5.
The scope of the exercise required under division 5 is narrower than the scope of the exercise which must be undertaken before a dumping notice is published. It would be curious if the limited review that is contemplated under division 5, as compared with the division 2 and division 3 process, left open the possibility that the base which was being reviewed could be completely undermined by reason of the CEO adopting a completely different approach to the establishment of the three matters which are reviewed.
In addition to those considerations is the language of section 269Z itself. What is involved is a consideration of whether any of the variable factors has changed. That signifies, in the context of the scheme of the Act in my view, that what the CEO was required to do was consider what had happened since the Minister published the Original Notice or last carried out a review. It would be curious, in my view, that, if the CEO were simply considering what had changed, he or she could nevertheless embark on an inquiry that undermined the conclusion reached by the Authority after the inquiry that which had been carried out under division 2.
Counsel for the respondents referred to the fact that it would be necessary to reconsider all of the three factors once the trigger for review had been pulled. He made reference specifically to the question of inflation, suggesting that it would be illogical for a review to ignore such a matter. That must be correct. However, the applicant's response is that inflation is a change. That is also correct. What would have changed would be the value of money and that would have brought about circumstances where any of the three variable factors may have changed. That is clearly something which it would be appropriate for the CEO to consider. That, however, is a different consideration from investigating the underlying basis upon which the three factors had been determined for the purposes of the Original Notice.
I do not consider that section 269ZB(4) authorised the CEO, in the conduct of the review that is required by that provision, to go beyond the determinations that had been made by the Minister in accepting or considering the recommendation of the Authority in making the declaration in the original Notice. I consider therefore that the applicant should succeed in this application." (Emphasis added)
The "variable factors" which are referred to in the above quoted section are the normal value of the goods; the export price, and the NIP.
These variable factors are referred to in s 269TG (3)(a), (c), (d) and (e) respectively.
The conclusions and recommendations of the CEO, on the review under consideration, included the following statements:
"Customs found the variable factors relevant to the determination of interim duty for exports of FGR by Santa Marina of Brazil, have altered.
...
With regard to the NIP, Customs recommends that the appropriate method for calculation of the USP is to base it on the local manufacturer's average selling price for with an adjustment by the Manufacturing Industries Index (non-metallic mineral products subdivision), for the period December 1990 to December 1995. Based on importer's costs, deductions are then made from the USP to produce a NIP at the FOB level.
Customs recommends that the Minister does not alter the rate of interim duty for the following reason:
despite increases in the export price, normal value and non-injurious price, the rate of interim duty remains the same because the margin between the export price and non-injurious price has not changed.
...."
In the earlier report of the ADA sent to the Minister on 21 November 1994, the ADA had concluded at 34 as follows:
"In its last inquiry into fibreglass gun rovings, the Authority was satisfied that the Australian market was not affected by dumping in 1991. Consequently, prices during that year were not affected by dumping. The Authority decided to calculate USP's using the net selling price achieved by the local industry in that year. These prices were increased to an amount equivalent to the increase in the Consumer Price Index from the December quarter of 1991 to the March quarter of 1994." (Emphasis added)
In contrast, the CEO in his Minute of Recommendation of 15 April 1996, said:
"In calculating the non-injurious price, Customs has departed from the method used by the ADA during the original inquiry in two ways. firstly, Customs has used the 1990 average selling price realised by the local industry, ACI Fibreglass, as a base year, compared to 1991 used by the ADA. Secondly, Customs has preferred to index the base year by a Manufacturing Industries Index as opposed to the more broadly based Consumer Price Index selected by the ADA.
The exporter has expressed concerns about the change in base year for the calculation of the non-injurious price. Customs considers that the presence of dumped imports in the Australian market during 1991 and their adverse impact on the selling price of the local industry (sales were unprofitable for the second half of that year), makes the use of that year inappropriate.
Customs recommends that 1990 be selected as a base year because the average selling price realised by ACI Fibreglass remained relatively stable from mid 1989 through to the end of 1990." (Emphasis added)
The question therefore arises whether the CEO was empowered, in a Division 5 review, to revisit the use of 1991 as a base year when calculating the NIP.
Scope of Review
The term used to describe the function of the CEO under Division 5 is "review". This term is a familiar one in administrative law. It connotes a process of correction, confirmation or alteration of an earlier decision or determination. The meaning of the term "review" is not fixed and will vary according to the context in which it is used as Burchett J points out in Colpitts v Australian Telecommunications Commission (1986) 70 ALR 554 at 565-566.
The respondent submits that the expression "review" in Division 5 should be read in a narrow sense because the Act contemplates that the role of the CEO is of a preliminary or prima facie nature and that the substantive recommendation has already been made by the ADA after conducting its inquiry. The role of the CEO is therefore concerned with updating the variable factors as the result of any changes in the values of those factors which had been previously fixed. The respondent points to the fact that if the CEO makes a negative preliminary finding under s 269TD of the Act, a disappointed applicant can refer the matter to the ADA which can in turn reconsider the matter and reverse the decision of the CEO. In these circumstances it is said that it would be a strange result if the CEO could in effect revisit the earlier conclusion reached by the ADA.
In my view this line of reasoning should not be accepted because it assumes that there is a form of "appellate" process in place somewhat analogous to the hierarchy one finds in the judicial appellate structure. Indeed, a broad analogy was drawn in submissions by reference to an appellate court remitting a matter to the primary judge who then recanvasses the substance of the decision reached by the appeal court. This is not an apt analogy. The mandate of subs 269ZB(4) should not be delimited by any such general implications. The present case is concerned with a process designed to produce a report recommending whether interim duty ought be varied. The scope of the inquiry is spelt out in s 269ZB. That is the provision, read in context, which describes the matters to be taken into account and the purpose and end result of the review.
The wording of subs (4) makes it clear that the function of the CEO is to review the rate of interim duty imposed on goods of the relevant kind. This is apparent from the wording of ss 269Z(1)(b); 269ZA(1) and 269ZB(1). The application which enlivens the review process is described as being one for review of the rate of interim duty. The recommendation arising from the review is directed to the rate of interim duty. It is the rate of interim duty which is the subject matter of the inquiry and not only the change in any one or more of the variable factors.
Counsel for the respondent referred to remarks made by Hill J in Powerlift (Nissan) Pty Ltd v Minister of State for Small Business, Construction and Customs (1993) 40 FCR 332 at 345. At the point of the judgment where those remarks were made his Honour was considering the review power of the Minister under s 269TAD (now repealed) which provided:
"Where the Minister has ... ascertained the normal value of the imported goods, the Minister may, .... 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 the normal value..." (emphasis added)
His Honour said of this provision at 345:
"The power to re-ascertain 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 re-ascertaining `normal value'.
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."
The remarks of his Honour do not bear on the present case because his Honour was there considering whether the Minister's conditional power had arisen. As his Honour points out (at 346) the real issue in that case was what was meant by the words "alteration in a relevant factor". In the present circumstances there is no doubt that the power of review conferred on the CEO has been enlivened.
The base year for the purposes of calculation is clearly both a relevant and important matter in relation to the determination of the amount of the interim rate and was so regarded by the CEO. The question of the correct base year was raised in submissions to the CEO.
It is true that ss 269Z, 269ZA and 269ZC are concerned with and refer to changes in variable factors. But it is in subs 269ZB(4) that the responsibilities of the CEO and the relevant considerations are set out. The provision does not state in terms that the material must be restricted or relevant only to a consideration of the changes in any of the variable factors. The question posed in this case is not whether the conclusion of the ADA might be "undermined" by the recommendation of the CEO, but rather what is the meaning and scope of subs (4) and also whether the CEO should be prevented from giving the Minister the benefit of his considered views as to whether there should be any alteration of the interim rate of duty.
While ss 269Z and 269ZA are respectively concerned with the circumstances in which review can be sought and with the contents of an application, it is subs 269ZB(4) which describes the matters which must be considered in carrying out the review. That provision directs the CEO as to what must be done consequent upon the review, namely, that the CEO must give the Minister a report which recommends whether the rate of interim duty should be altered or should remain as originally calculated. Reasons must be furnished for any recommendation.
The scope of review has to be inferred from those matters which must be considered and the purpose of the review as expressed in the provision. The direct and immediate consequence of the review is that recommendations must be made as to whether the interim rate of duty should be changed.
No doubt the findings as to changes in variable factors are significant considerations but they are not, in my view, the sole or exclusive matters for consideration. The provision is designed to encompass a wide range of considerations to which regard must be had. On its face it is not narrowly framed so as to clearly confine the matters to be examined.
It is also apparent that the Minister is not bound by the recommendation, opinion or findings of the CEO. The Minister has a discretion to choose between alternatives. The underlying purpose of the review by the CEO is to inform the Minister as to the CEO's opinion as to a change in the rate in order that the Minister can make a properly informed decision in the best interests of the relevant Australian industry.
The circumstance that the purpose of the report is to inform and guide the Minister as to the alteration or non-alteration of the interim rate, in my view, supports the conclusion that the scope of review should be given a broad, rather than a narrow interpretation. As a matter of practical administration, it is obviously appropriate that the Minister should be as well informed as possible on matters which bear upon the exercise of his discretion under s 269ZC.
This is not a situation where this Court is considering and conducting an examination of the jurisdictional limits of a person or body charged with making a final determination, but rather it is considering an administrative review process intended to furnish relevant information and recommendations from the Chief Executive Officer of the Customs Service for guidance of the Minister. The process is designed to result in the making of a properly informed Ministerial decision directed to the public interest in protecting, where appropriate, manufacturers in Australia from dumping by overseas suppliers.
This is not a context in which it is appropriate to adopt a restrictive approach to interpretation which could result in the Minister, when considering the recommendation of the CEO, not being able to take into account or even have the benefit of, the considered and up to date reasoned conclusions of the senior government officer charged with administration of the Act. Such a consequence would be curious to say the least. This consequence will result if the CEO is prevented from making, or if the Minister is prevented from considering, a recommendation as to the advisability of re-examining the appropriate base year for calculation of the NIP.
Subsection 269ZB(4) obliges the CEO to consider not only the application for review but also any submissions made, together with any other material he or she considers relevant. The provision is framed in broad subjective terms as is evident from the reference to materials which the CEO considers relevant. Subsection 269ZB(4) travels well beyond the terms set out in the application for review and extends to submissions made not only by the respondent but also by other interested parties. Of course, neither the CEO nor the Minister is at liberty to consider matters at large. The material considered must bear on the tasks which the CEO and the Minister are required to perform, namely to recommend whether the rate of interim duty should be changed and to make declarations. However, the inescapable fact is that in so doing, the CEO is not, in the language of the provision, confined solely to an examination of changes in any one or more of the variable factors.
In relation to the goods here under consideration, the CEO, for the reasons given has concluded that it is both reasonable and appropriate that the base year should be 1990 and not 1991. Clearly, the CEO considered that there is merit in the submission of ACI Fibreglass in this report. It is also evident that the CEO considered that a re-examination of the base year was relevant to the question whether the rate of interim duty should be changed. In my view, it was open to the CEO to consider this matter to be relevant and to re-examine it and inform the Minister of his reasons for concluding that the 1990 year ought to be preferred as a base year.
No sound reason has been advanced in this proceeding as to why the Minister should be foreclosed from considering and adopting this recommendation and the conclusion of the CEO of the ACS, when addressing an important decision in the public interest of Australia as a trading nation. Accordingly, I am persuaded that the primary judge erred in holding that the review by the CEO under Division 5 must be confined to considering only changes in variable factors and that the review did not permit a reconsideration of the ADA conclusion as to the proper base year to be used in the calculation of the non-injurious price.
For these reasons the appeal is allowed with costs. The orders made by the primary judge should be set aside. The respondent should pay the appellant's costs of the hearing below.
|
I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice
Tamberlin |
Associate:
Dated: 29 October 1997
|
Counsel for the First and Second Appellants: | Mr P Roberts |
| Solicitor for the First and Second Appellants: | Australian Government Solicitor |
| Counsel for the Respondent: | Mr S Gageler |
| Solicitor for the Respondent: | Baker & McKenzie |
| Date of Hearing: | 19 September 1997 |
| Date of Judgment: | 29 October 1997 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1997/1129.html