Purvis v Dairy Adjustment Authority [2006] FCAFC 50 (23 January 2006)

Last Updated: 6 April 2006

FEDERAL COURT OF AUSTRALIA

Purvis v Dairy Adjustment Authority [2006] FCAFC 50

ADMINISTRATIVE LAW – application pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from the Administrative Appeals Tribunal – deregulation of dairy industry – two statutory schemes implemented to facilitate financial assistance – claims made under Dairy Structural Adjustment Program Scheme 2000 and Supplementary Adjustment Dairy Assistance Scheme 2001 – applicants granted payment under one scheme but not the other – whether the Tribunal erred in its proper construction of the statutory schemes – 10 questions of law raised on appeal



Dairy Produce Act 1986 (Cth) Sch 2, cl 2
Administrative Appeals Tribunal Act 1975 (Cth) s 44(3)
Dairy Industry Act 1992 (SA)
Dairy Industry Adjustment Act 2000 (Cth)
Dairy Produce Legislation Amendment (Supplementary Assistance) Act 2001 (Cth)


Dairy Structural Adjustment Program Scheme 2000 s 30, 30(3A)
Supplementary Adjustment Dairy Assistance Scheme 2001 ss 8(4), (5)(a)(i)(ii)(iii)(iv), 13(5), 16


Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 cited
Hyundai Automotive Distributors Australia Pty Ltd v Australian Customs Service (1998) 81 FCR 590 cited
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 cited
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 cited
Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 cited


Pearce & Geddes, Statutory Interpretation in Australia (5^th Ed, 2001)




RONALD PURVIS, KAYLENE PURVIS & ROGER CLARK v DAIRY ADJUSTMENT AUTHORITY

No SAD 77 of 2005



BLACK CJ, BRANSON & FINN JJ
ADELAIDE
23 JANUARY 2006

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 77 OF 2005

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	RONALD PURVIS FIRST APPLICANT KAYLENE PURVIS SECOND APPLICANT ROGER CLARK THIRD APPLICANT
AND:	DAIRY ADJUSTMENT AUTHORITY RESPONDENT
JUDGES:	BLACK CJ, BRANSON AND FINN JJ
DATE OF ORDER:	23 JANUARY 2006
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The application be dismissed.











Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 77 OF 2005

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	RONALD PURVIS FIRST APPLICANT KAYLENE PURVIS SECOND APPLICANT ROGER CLARK THIRD APPLICANT
AND:	DAIRY ADJUSTMENT AUTHORITY RESPONDENT

JUDGES:	BLACK CJ, BRANSON AND FINN JJ
DATE:	23 JANUARY 2006
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 The applicants, Ronald and Kaylene Purvis and Roger Clark, are dairy farmers in the south east of South Australia. Towards the end of 1999 the Commonwealth and the States agreed to deregulate the dairy industry. That deregulation took effect on 1 July 2000. The Dairy Industry Adjustment Program, which was a creature of the Dairy Produce Act 1986 (Cth) ("the Act"), was developed to assist the industry to adjust to deregulation. Two schemes were formulated under that program, each of which enabled financial assistance to be made to dairy farmers to ease their transition to a deregulated market. That assistance was not intended to be by way of compensation or income support. The two schemes were the Dairy Structural Adjustment Program Scheme 2000 ("the DSAP Scheme") and the Supplementary Adjustment Dairy Assistance Scheme 2001 ("the SDA Scheme"). The Dairy Adjustment Authority ("the DAA") administered the making of payments under each scheme.

2 The applicants were each granted a payment right under the DSAP Scheme. They were unsuccessful in establishing their eligibility for a discretionary payment right under the SDA Scheme. They sought internal review of the decisions denying their eligibility. The DAA confirmed those decisions. They then sought review of the decisions by the Administrative Appeals Tribunal ("the Tribunal"). A Deputy President of the Tribunal affirmed the DAA’s decisions, albeit on different grounds. They now apply to this Court constituted as a Full Court under s 44(3) of the Administrative Appeals Tribunal Act 1975 (Cth).

BACKGROUND AND THE STATUTORY SETTING

3 Prior to deregulation, regulation of the dairy industry in South Australia was effected under the Dairy Industry Act 1992 (SA) through a state-wide market milk equalisation scheme. The scheme itself was embodied in an agreement ("the SAMME Agreement") between three processors of milk, the South Australian Dairy Farmers’ Association Inc and the South Australian Market Milk Equalisation Committee Ltd. It was authorised by the responsible Minister under the State Act. Its purpose was to ensure that the proceeds from the sale of "market milk" in the State were shared equitably amongst producers who delivered their milk to processors who were parties to the SAMME Agreement.

4 The SAMME Agreement distinguished between "market milk" and "manufacturing milk". Importantly for present purposes, the definition of "manufacturing milk" (but not of "market milk") included UHT milk and flavoured milk. The contrary was the case under the two Commonwealth schemes.

5 Under the South Australian Scheme, the farmgate (or sale) price of market milk was set by the Minister for Agriculture. Nineteen per cent of the milk produced by dairy farmers was treated under the Scheme as having been produced by a dairy farmer as market milk (irrespective of the actual percentage so produced). This figure was used to spread the benefits of superior income from market milk across all producers in South Australia.

Dairy Produce Act 1986 (Cth)

6 This Commonwealth Act is important for contextual reasons. With national agreement to deregulate the dairy industry achieved, the Act was amended by the Dairy Industry Adjustment Act 2000 (Cth) to add a Schedule 2 which constituted the Dairy Industry Adjustment Program. Part 2 of the Schedule provided a framework for the DSAP Scheme; it required the responsible Minister actually to formulate the DSAP Scheme; and the Scheme itself was to be directed towards ensuring the achievement of the policy objectives established in the framework. It is this contextual background to the Scheme (which was gazetted on 14 April 2000) that makes the supporting parliamentary materials for the 2000 amending Act of relevance in the interpretation of the DSAP Scheme itself. The Scheme was estimated to cost about $1.74 billion over eight years.

7 In 2001, Schedule 2 to the Act was further amended by the Dairy Produce Legislation Amendment (Supplementary Assistance) Act 2001 (Cth). A new Part 1A was added to the Schedule to establish the framework for the SDA Scheme. It had similar requirements to those noted above for the DSAP Scheme relating to ministerial formulation of the scheme and consistency with the policy objectives of the framework. The parliamentary materials for the 2001 amending Act are likewise relevant in the interpretation of the SDA Scheme which was gazetted on 1 August 2001.

8 All that need be noted of the provisions of the DSAP scheme is that, subject to qualifying conditions, a person could claim to be eligible for a standard payment right and to be entitled to receive DSAP payments. It was the DAA that determined the "face value" (hence the amount) of the payment right in accordance with the provisions of the Act and the Scheme. As noted, Mr and Mrs Purvis and Mr Clark had payment rights under this Scheme.

9 The genesis of the SDA Scheme lay in the recognition that targeted funding was needed for individuals and regions dependent on the dairying industry who or which were experiencing greater than anticipated adjustment pressure following deregulation of market milk farmgate prices by State governments: see Dairy Produce Legislation Amendment (Supplementary Assistance) Bill 2001, Explanatory Memorandum, par 1; Second Reading Speech, Representatives, 24 May 2001, 26967 ff. Though such targeted funding was the principal regulatory objective of the amending legislation, the amendment also included the provision of assistance to those persons who experienced a "significant event", "significant crisis" or "significant anomalous circumstances" "which limited their eligibility under DSAP": Explanatory Memorandum, par 13. The present application concerns a decision under the provision dealing with "significant anomalous circumstances".

10 The SDA Scheme created a number of payment rights of which the "discretionary payment right" is of present relevance. It is sufficient to say for present purposes that a dairy farmer who was granted a payment right under the DSAP Scheme and who was taken to be affected by significant anomalous circumstances for the purposes of s 8(5) of the SDA Scheme was eligible for a discretionary payment right.

11 Section 8(5), insofar as presently relevant, provides:

"(5) An entity is taken to be affected by significant anomalous circumstances because of this subsection if but only if:

(a) all the following apply:

(i) the entity held an interest in a dairy farm enterprise at 6.30 pm on 28 September 1999;
(ii) before 28 September 1999 there was a change or an atypical feature in the ownership or management of the enterprise;
(iii) the Minister determines that the change or feature significantly and adversely affected the entity’s eligibility for a payment right under the DSAP scheme, or significantly and adversely affected the face value of such a payment right;
(iv) the Minister determines that this subsection should apply to the entity."

12 Section 13 of the SDA Scheme obliged the Minister to give a face value to a discretionary payment right if the claimant was eligible for, and the Minister decided to grant, the right. Section 13(5) stipulated that, in deciding whether to grant a discretionary payment right, the matters the Minister must take into account included any information the DAA gave the Minister in relation to the matter. Section 16 provided for the determination by the Minister of the face value of a discretionary payment right granted to an eligible person and the matters that must be taken into account in that determination.

The Applicants

(i) Mr and Mrs Purvis

13 Up until 1997, the milk produced on the Purvis’ property was delivered to Dairy Vale Foods Ltd ("Dairy Vale") at its factory in Mount Gambier. Dairy Vale produced, amongst other things, UHT and flavoured milk products ("non-white milk"). In 1997, Mr and Mrs Purvis changed processors from Dairy Vale to De Cicco Industries Pty Ltd ("De Cicco"). De Cicco did not produce any significant quantities of non-white milk.

14 It should be noted that the DAA made the concession, which was accepted by the Tribunal, that if the change of processor was a change in the management of a dairy farm enterprise for s 8(5)(ii) purposes, that change had a significant and adverse effect on the face value of Mr and Mrs Purvis’ DSAP payment rights for the purposes of s 8(5)(iii). The apparent reason for this is that Dairy Vale did, but De Cicco did not, produce non-white milk. This did not matter in working out their "market milk" production under the SAMME Agreement as that was fixed at 19 per cent and did not include non-white milk. Under the DSAP Scheme "market milk" included non-white milk. In consequence, under the DSAP Scheme, if they had stayed with Dairy Vale, the percentage of market milk delivered by their enterprise in the 1998/1999 financial year would, for DSAP Scheme purposes, have been significantly higher than only the deemed 19 per cent delivered to De Cicco.

15 We would note in passing that the Tribunal recounted the evidence of Mrs Valerie Monaghan, a rural financial counsellor, to the effect that a lower South East dairy farmer producing the average production for the South East who supplied a factory other than Dairy Vale would have received $67,000.00 less in DSAP Scheme and SDA Scheme payments compared with a comparable South East dairy farmer who supplied Dairy Vale.

(ii) Mr Clark

16 Prior to July 1997, Mr Clark supplied milk to Kraft Foods Ltd ("Kraft"). It did not produce any significant quantities of non-white milk. Kraft ceased operations in South Australia in July 1997. Mr Clark considered he was unable to change to a processor that was a significant producer of non-white milk. His new processor was Warrnambool Cheese & Butter Factory Company Holdings Ltd ("Warrnambool").

THE TRIBUNAL’S DECISION

17 The claimed eligibility of Mr and Mrs Purvis and Mr Clark for discretionary payment rights under s 8 of the SDA Scheme was founded on s 8(5) of the scheme. The "significant anomalous circumstances" on which they each relied related to their respective changes in 1997 to a processor which did not produce significant quantities of non-white milk.

18 The DAA determined that, in respect of each of them, there had not been a "change or an atypical feature in the management of [their respective enterprises]" as required by s 8(5)(a)(ii) of the SDA Scheme. In consequence they were not eligible for discretionary payment rights.

19 Their respective applications for review of the DAA’s decisions were rejected, the Tribunal confirming those decisions but on different grounds.

The Purvis decisions

20 In the cases of Mr and Mrs Purvis, the Tribunal found that (i) they held an interest in a dairy farm enterprise at the relevant time (s 8(5)(a)(i)); (ii) there had been a change or an atypical feature in the management of their enterprise (s 8(5)(a)(ii)), that change being the change of processor in mid 1997; (iii) the change had a significant and adverse effect on the face value of their DSAP payments (s 8(5)(a)(iii)); but that (iv) the discretion to determine that s 8(5)(a) applies to them should not be exercised in their favour (s 8(5)(a)(iv)).

21 The Tribunal characterised the s 8(5)(a)(iv) discretion as a narrow one, not circumscribed by any presumption or assumption that the Minister would grant a discretionary payment right and as not prescribing factors to which regard must be had. Nonetheless, it was to be exercised in light of the object and subject matter of the SDA scheme and its place in the package that was introduced to assist dairy farmers with deregulation.

22 The following four paragraphs, which were minutely dissected at the hearing of the appeal (cf Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271-272), encapsulate the Tribunal’s reasons for exercising the discretion adversely to Mr and Mrs Purvis:

"156. The policy to which DAA has regard is that set out in its Business Guidelines (at [58]) above. It expressly states that it is not exhaustive. I consider it consistent with the provisions of the SDA Scheme and of the DSAP Scheme. It does no more than draw attention to factors that may be considered without stipulating any particular result when that is done. I have considered those factors but have done so in light of the purpose of both the SDA Scheme and the DSAP Scheme. In summary, the payments under those schemes are not intended to be arbitrary but are based on the milk that was delivered to processors in the base year and, in effect, the use that the processor made of that milk. The way in which the actual volumes is calculated is subject to some variations but the overall intention is to ensure that DSAP payments are based on whether a levy was paid on the milk so that it is market milk or whether the producer received a DMS payment so that it is manufacturing milk.

157. The effect of Mr and Mrs Purvis’s changing processors from Dairy Vale to De Cicco was that a greater proportion of their milk was processed as manufacturing milk than would have happened had they remained with Dairy Vale. Therefore, they received a lesser DSAP payment than they would have received had they remained with Dairy Vale for generally 46.23 cents per litre was paid for market milk and 8.96 cents per litre for manufacturing milk. The difference, the Second Reading Speech states, reflects the premium paid for market milk under the regulated systems that prevailed in the States before deregulation and recognised the price of market milk after deregulation was expected to fall towards that of manufacturing milk. While the package was not about compensation, it was about recognising those consequences of deregulation.

158. Like other dairy farmers, Mr and Mrs Purvis took into account a range of factors in reaching their decision to transfer from Dairy Vale to De Cicco or to remain with Dairy Vale. The return that they would receive from each processor was at the heart of those factors. It was at the heart of their decision to transfer. By moving to De Cicco, they received a greater return for their milk at the time. They have received payments according to the milk they actually delivered and the amount that was market milk and the amount that was manufacturing milk. That is in accordance with the DSAP Scheme and its rationale.

159. If I were to decide that they should receive an SDA payment because they would have made a different decision had they known that they would have received a greater sum had they remained with Dairy Vale, I would be undermining the DSAP Scheme and its rationale. I would be effectively deciding to give them DSAP payment at the higher market milk rate for a certain portion of their milk when they actually sold that portion not as market milk but as manufacturing milk. I would be making that decision when they have already received payment for that portion at a rate greater than they would have received for it had they sold it as market milk. This would not be an appropriate exercise of the discretion and I decline to exercise it. Therefore, I have decided that Mr and Mrs Purvis are not entitled to an SDA payment under the SDA Scheme and I affirm the decision under review."

The Clark decision

23 The Tribunal found, as with Mr and Mrs Purvis, that Mr Clark had the interest required by s 8(5)(a)(i) and that there had been a change in the management of his enterprise for s 8(5)(a)(ii) purposes, that change being the mid-1997 change of processor, but that while that change had an adverse effect on the face value of his DSAP payment right, that effect was not "significant" as required by s 8(5)(a)(iii). Accordingly it was not necessary to consider how the s 8(5)(a)(iv) discretion should be exercised.

24 The Tribunal’s reasons for concluding that the effect of the change of processor on the face value of Mr Clark’s DSAP payment right was not significant are contained in the following paragraphs which also were minutely dissected at the hearing of the appeal:

"119. Combination of the two words in the one expression ‘significant and adverse’ in s 8(5)(a)(iii) does not persuade me that the words should be given anything other than their ordinary meanings. In this case, the change in the management of the dairy enterprise must have unfavourably affected the face value of an entity’s payment right to an extent that has some meaning or is worth noting. That leaves open as to the basis on which meaning and worth are to be judged and I will return to that.

120. The DAA initially submitted that the proportion of market milk was not altered by Mr and Mrs Clark’s decision to change from Kraft to Warrnambool. There was evidence from Mr Rice, however, that Kraft supplied 1.6% of its milk to Nippy’s to process into non-white milk. I accept that evidence and also note Mr Almond’s submission that this would translate into a 3% difference in the DSAP payment made in relation to Mr and Mrs Clark’s dairy enterprise. Given that Mr Clark received $99,496, the DSAP payment made for Mr and Mrs Clark’s dairy enterprise was $198,992. A 3% difference in that figure is in the order of $5,970.

121. Although no evidence was given on this aspect, I consider that it is reasonably open to me to conclude that a sum of almost $6,000 is a sum that is worth noting to Mr and Mrs Clark. That is so even when taken against a background of a DSAP payment for the enterprise of almost $200,000. I find that he and his wife have used the DSAP payments they have received on ongoing costs on their dairy farm. A further sum of that magnitude would be put to good use on their dairy farm and be worth noting and so significant to them.

122. Is significance judged by reference to Mr and Mrs Clark’s view or is [it] judged by some more general standard. After all, the Minister indicated in the Second Reading Speech delivered on the introduction of the Dairy Industry Adjustment Bill 2000 to amend the Act ("Second Reading Speech") that the total value of the package was $1.74 billion of which he estimated $127 million would flow to South Australia under the DSAP Scheme.

123. I note that s 8(3) of the SDA Scheme also requires regard to be had to what is significant in the context of a significant event or crisis. Unlike s 8(5), some guidance is given as to what is regarded as significant. That comes in the form of s 8(4), which makes provision in relation to s 8(3)(c). Section 8(3)(c) provides that an entity is taken to be affected by a significant event or a significant crisis if, but only if, there was a significant reduction in the volume of milk delivered by the dairy farm enterprise during the base year compared with that enterprise’s normal year volume of milk. Sections 8(3)(a) and (b) specify other than events and crises. I have set out the provisions of s 8(4) above (at [24]). In essence, if in the base year an enterprise delivered less than 70% of the milk it normally delivered, the reduction may be taken to be significant.

124. Although s 8(4) concerns an unrelated matter and even then it is not determinative of whether there has been a significant event or crisis, it is indicative of what Parliament considers to be significant. While a 30% reduction in a normal year’s volume of milk does not necessarily mean a 30% reduction in a DSAP payment, such a reduction in the overall volume of milk on which the DSAP payment is calculated is certainly of some consequence. I consider that s 8(4) should be taken as a guide to Parliament’s intention that what is to be treated as significant is something that is assessed against a broader background than that of the individual dairy farmer. It is to be assessed against a background of the scheme of the package and of the assistance it gives in the deregulation of the dairy industry. When I do that, I conclude that a change of 1.3% in the milk that is to be regarded as market milk for a dairy enterprise and a consequent change in the order of 3% in the DSAP payment that is to be received by Mr and Mrs Clark is not significant."

THE APPLICATION

25 The Supplementary Notice of Appeal raises what are said to be 10 questions of law which are matched by 10 grounds of appeal. It is necessary to deal with each such question and corresponding ground in turn as they cannot be determined in an omnibus way notwithstanding that the majority of them relate to alleged miscarriages in the Tribunal’s exercise of discretion under s 8(5)(a)(iv) adversely to Mr and Mrs Purvis. Further, it should be said that the applicants have not, in the main, elaborated significantly upon each of the various questions and grounds raised. Most have been dealt with compositely.

26 A Notice of Contention was filed by the respondent. Given the view we take of the questions raised by the applicants it is unnecessary to refer to its content although brief passing reference will be made to an aspect of it later in these reasons.

The Questions of Law and Grounds of Appeal

Question (a): Whether on the proper construction of s 8(5)(a)(iv) of the Supplementary Dairy Assistance Scheme 2001 ("SDA Scheme") the Minister (or his delegate) in exercising the discretion in s 8(5)(a)(iv) can take into account as a reason for refusing to exercise the discretion in favour of the appellants, that payments had been made to the appellants under s 30 of the Dairy Structural Adjustment Program Scheme 2000 ("DSAP Scheme").

Corresponding ground: The Tribunal wrongly construed s 8(5)(a)(iv) of the SDA Scheme as permitting a matter that was not relevant to the exercise of the (Ministerial) discretion in s 8(5)(a)(iv), namely, s 30 of the DSAP Scheme, to be taken into account, in that the latter section had already been applied in determining the appellants’ entitlements under the DSAP Scheme and such entitlement was a pre-condition for satisfaction of s 8(5)(a)(iii) of the SDA Scheme.

27 This ground is problematic. Section 30 requires the DAA in prescribed circumstances and in a prescribed way to make notional adjustments to the amount of market milk and manufacturing milk delivered by a particular dairy farmer in the base year, commencing 1 July 1998. Such adjustments would affect the overall enterprise amount of a dairy farm enterprise, hence the face value of the relevant entity’s face value of its DSAP standard payment right.

28 It is perfectly clear on a fair reading of the Tribunal’s decision that it did not take into account that payments had been made to the applicants under s 30 of the DSAP Scheme. No such payments were so made and the applicants in their reply submissions now concede this was "technically correct". Nonetheless they still contend that the refusal of their claim for assistance was dependent on s 30.

29 They refer by number, but without further elaboration, to seven paragraphs which are said to make out this ground. The first five of these simply relate to evidence before the Tribunal. The remaining two, while acknowledging that the applicants had received DSAP payment rights in accordance with the DSAP Scheme and its rationale, do not have the complexion the applicants seek to attribute to them. As the respondent has put it, it is not apparent from the Tribunal’s reasons that s 30 expressly or impliedly influenced the Tribunal’s exercise of discretion.

30 It most probably is the case that s 30 of the DSAP Scheme could not apply, and would not be applied, to the applicants in any event because their deliveries were made to producers under the SAMME Agreement: see s 30(3A). Given our conclusions above, it is unnecessary to express a concluded view on that question.

31 We reject this ground.

Question (b): Whether on the proper construction of s 8(5)(a) of the SDA Scheme, payment rights are granted under that section or under section 13 of the SDA Scheme.

Corresponding ground: The Tribunal wrongly considered that a payment right under the SDA Scheme was granted under s 8 instead of under s 13 of the SDA Scheme, and thereby considered that the discretion to be exercised under s 8(5)(a)(iv) was to determine whether to grant a payment right as contrasted with eligibility for such a payment right.

32 The paragraphs of the Tribunal’s reasons, if read in a disaggregated way, would suggest in some places that the discretion the exercise of which was being considered was the granting of discretionary payment rights under s 13 of the SDA Scheme rather than the determination under s 8(5)(a)(iv) that would lead to Mr and Mrs Purvis being eligible for a discretionary payment right.

33 There was no reviewable decision relating to the grant of discretionary payment rights under s 13 and the Tribunal, in those circumstances, had no jurisdiction to consider the granting of such rights. Despite some of the language used in the Tribunal’s reasons, we are satisfied that the Deputy President was aware that the reviewable decision before her related to ss 8(1) and 8(5) of the SDA Scheme. Her reasons clearly differentiate between eligibility for, and the grant of, payment rights in the description given of the SDA Scheme. It is equally clear from the structure of the reasons, and in particular from the highlighted questions asked, that the Tribunal addressed sequentially the questions required to be answered under s 8(5)(a) in respect of each applicant. In considering the discretion to be exercised in relation to the Mr and Mrs Purvis, the Tribunal explicitly identifies it as being given by s 8(5)(a): see Reasons, pars 151 and 153.

34 Whether or not the occasional slip from the language of SDA "payment right" to that of SDA "payment" arose from oversight, error in proof-reading, or occasional mistake, we are satisfied that the Tribunal intended to, and did, exercise the jurisdiction required under s 8(5)(a). To the extent, if at all, that the reference to "SDA payment" was mistaken, we are equally satisfied that the error so made by the Tribunal should not be characterised as material having regard to the overall text and structure of the reasons: cf Hyundai Automotive Distributors Australia Pty Ltd v Australian Customs Service (1998) 81 FCR 590 at 599.

Question (c): Whether the Tribunal correctly identified the intention of the DSAP and SDA Schemes as being to ensure that entitlements or eligibility for payments depends upon whether an entity paid a DMS Levy or received a DMS payment.

Corresponding ground: The Tribunal wrongly considered that the overall intention of the DSAP Scheme was to ensure that DSAP payments were based on whether an entity paid a DMS Levy or received a DMS payment; whereas the stated purpose of the Schemes was to help dairy farmers adjust to the effects of deregulation of the dairy industry by providing for four types of payments, including discretionary payments.

35 This ground relates to par 156 of the Tribunal’s reasons which have been set out at [22] above. By way of background, the Tribunal had earlier found that in the pre-deregulation era all dairy farmers paid a monthly levy on the volume of "drinking milk" they supplied to processors, that term being used to describe market milk and non-white milk. It also found that the processors paid a monthly levy on all "drinking milk" sold by them in Australia. The money raised by the levy was returned to farmers who sold manufacturing milk in the form of a Domestic Market Support ("DMS") payment.

36 The applicants’ contention as to the Tribunal’s characterisation of the overall intention of the DSAP scheme appears to address an issue different from that being addressed by the Tribunal. We are satisfied that by the time the Tribunal made the impugned observation in par 156, it was not directing its comment to the purpose of both the SDA Scheme and the DSAP Scheme as such. Its subject was more prosaic. It was concerning itself with the basis on which DSAP Scheme payments were calculated and it described the "overall intention" of the scheme in that regard as being to ensure payments were based on whether the milk was market milk or manufacturing milk. The reference to the levy and to a DMS payment was a circuitous and perhaps somewhat distracting way of making an unobjectionable finding. The primary method for divining an enterprise’s "overall enterprise amount" under the DSAP Scheme involved an essentially mechanical calculation of the amounts of market milk and manufacturing milk delivered by an enterprise in the 1998/1999 financial year: see Dairy Produce Act 1986 (Cth), Schedule 2, clause 2.

37 The applicants’ submissions on this ground of appeal seek to attribute to the language of the Tribunal a meaning it does not have.

Question (d): Whether the Tribunal was correct in considering that to grant a payment right to the Appellants (Purvis) under s 8(5)(a) of the SDA Scheme would be undermining the DSAP Scheme and its rationale.

Corresponding ground: The Tribunal wrongly considered that the grant of a payment right to the Appellants would lead to undermining the DSAP Scheme and its rationale.

38 The ground here relates to the entirety of par 159 of the Tribunal’s reasons.

39 It is clear from the Explanatory Memorandum to the Dairy Produce Legislation Amendment (Supplementary Assistance) Bill 2001 that having announced on 28 September 1999 it would provide an adjustment package should all States decide to deregulate, the Commonwealth chose the same date as defining the point in time at which a dairy farm entity was to have "eligible interest" in a dairy farm. Paragraph 90 of the Explanatory Memorandum stated that:

"It is considered that it would be unreasonable for farmers to be aware of the Government’s decision and have accounted for it in any contractual arrangements prior to 6.30 pm on 28 September 1999."

40 In his Amended Witness Statement, Mr Purvis commented as follows on the DSAP payment scheme (at [21]):

"21. Until we made our own enquiries, we did not appreciate, nor were we told, that the amount of money available under the DSAP Scheme would be paid based on whether the processor we supplied also produced UHT & flavoured milk. Had we known this at the time of making the decision to change processor, I think it is highly unlikely that we would have changed processor from Dairy Vale, who produced UHT & flavoured milk, to De Cicco, who did not produce UHT & flavoured milk."

41 As the above quotation from the Explanatory Memorandum makes plain, this was the very state of affairs the timing of the DSAP Scheme was designed to avoid. In this sense the Tribunal’s observation was unexceptionable. The Tribunal, in par 159, proceeded to enlarge upon why it would be objectionable to, in effect, adjust the rates for market milk and manufacturing milk which the applicants had in fact previously received. What is implicit in pars 157-159 of the Tribunal’s reasons is that Mr and Mrs Purvis took a particular commercial decision that resulted in their being dealt with in a particular way under the DSAP Scheme. Their commercial decision may have disadvantaged them, but the DSAP Scheme was applied to them as it was designed to and this was the substance of their complaint. That complaint was about the DSAP Scheme itself as it operated on their particular circumstances as at 28 September 1999.

42 By way of footnote to the above, we note that the DAA has abandoned those parts of its Notice of Contention in this appeal that the Tribunal should have found that there had not been a change in the management of the dairy farm enterprise within the meaning of s 8(5)(a)(ii) of the SDA Scheme. Notwithstanding that the DAA has taken this course, we would not wish it to be assumed that we consider that the contention was unarguable. Both the structure of s 8(5)(a)(ii) and the above quoted extract from the Explanatory Memorandum might suggest otherwise.

Question (e)(i): Whether on the proper construction of s 8(5)(a)(iii) of the SDA Scheme, s 8(4) of the SDA Scheme can be taken into account in construing the word "significant" in s 8(5)(a)(iii) of SDA Scheme.

Corresponding ground: The Tribunal erred, in respect of Roger Clark only, in considering: (i) that s 8(4) of the SDA Scheme could be taken into account in determining the meaning of the word "significant" in s 8(5)(a)(iii) of SDA Scheme, when it was not a relevant consideration.

43 This ground relates to pars 123 and 124 of the Tribunal’s reasons. All that need be said of it is that "the cardinal rule of statutory interpretation ... requires the words of a statute to be read in their context": K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 315; see generally Pearce & Geddes, Statutory Interpretation in Australia (5^th Ed, 2001), [4.2]. The Tribunal did no more than was required of it; it acknowledged s 8(4) concerned an unrelated matter, but it considered, correctly as we indicate below, that it provided a guide as to what Parliament intended to be treated as "significant".

Question (e)(ii): Whether on the proper construction of s 8(5)(a)(iii) of the SDA Scheme, the word "significant" in that sub-section is to be construed having regard to the face value of the particular entity’s DSAP payment rights or the total value of the DSAP and SDA Schemes.

Corresponding ground: The Tribunal erred, in respect of Roger Clark only, in considering: (ii) that on the proper construction of s 8(5)(a)(iii) of the SDA Scheme, the effect on the face value of the Appellant Clark’s DSAP payment right was not "significant" within the meaning of s 8(5)(a)(iii).

44 This ground relates to par 122 and part of par 124. Given what we have to say about the particular language used, it is appropriate to repeat what was said in those paragraphs:

"122. Is significance judged by reference to Mr and Mrs Clark’s view or is [it] judged by some more general standard. After all, the Minister indicated in the Second Reading Speech delivered on the introduction of the Dairy Industry Adjustment Bill 2000 to amend the Act (‘Second Reading Speech’) that the total value of the package was $1.74 billion of which he estimated $127 million would flow to South Australia under the DSAP Scheme.

...

124. ... I consider that s 8(4) should be taken as a guide to Parliament’s intention that what is to be treated as significant is something that is assessed against a broader background than that of the individual dairy farmer. It is to be assessed against a background of the scheme of the package and of the assistance it gives in the deregulation of the dairy industry. When I do that, I conclude that a change of 1.3% in the milk that is to be regarded as market milk for a dairy enterprise and a consequent change in the order of 3% in the DSAP payment that is to be received by Mr and Mrs Clark is not significant". (Emphasis added.)

45 This ground proceeds upon a misconception as to what was conveyed by the Tribunal’s approach and finding in par 124. In par 122 the Tribunal does refer to the total value of the DSAP package. The prefacing of that sentence with the words "After all" probably was meant to suggest it was unlikely that "significance" was to be judged by reference to Mr and Mrs Clarke’s view. However, the Tribunal did not in that paragraph identify what "some more general standard" might be. That was done in par 124 where it was said what was "significant" was to be assessed against a background of the scheme of the package, etc. It clearly committed no error so saying. It was merely engaging in orthodox contextual construction: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408.

46 At the hearing of the appeal, counsel for the applicant attempted to mount a new attack on the Tribunal’s actual conclusion that a change in the order of 3 per cent of the Clarke’s DSAP payment was not significant. This, ultimately, was based on the bare assertion that that characterising 3 per cent as not significant is so surprising that it must reflect an error of principle that cannot be identified. We cannot agree with this. Given the standard above by which the Tribunal measured significance, we cannot say that the Tribunal’s decision was not one properly open to it.

Question (f)(i): Whether the Tribunal was required or permitted to take into account in the exercise of the discretion under s 8(5)(a)(iv) of the SDA Scheme that the Appellants, prior to deregulation, received more for their manufacturing milk than did dairy farmers selling to processors who produced UHT and flavoured milk, but received on average $67,000.00 less in DSAP and SDA Scheme payments;

Corresponding ground: The Tribunal wrongly considered that it was not required in exercising the discretion under s 8(5)(a)(iv) of the SDA Scheme to take into account the factors mentioned in paragraph 2(f)(i).

47 This ground relates to a matter to which the Tribunal did refer in describing the evidence before it. Given the reason already noted for the Commonwealth having prescribed 28 September 1999 as the defining date for eligible interests, it can hardly be said that the differential impact of the DSAP Scheme as it was (and was intended to be) applied to dairy farmers with different contractual arrangements was a consideration which, nonetheless, the Tribunal was required to consider for s 8(5)(a)(iv) purposes. The subject matter, scope and purpose of the SDA Scheme, considered in the context of the DSAP Scheme, the Act and the parliamentary materials to which we have referred do not necessitate such an implication: Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40.

Question (f): Whether the Tribunal was required or permitted to take into account in the exercise of the discretion under s 8(5)(a)(iv) of the SDA Scheme the following:

(ii) that the grant of an SDA payment to the Appellants would undermine the DSAP Scheme and its rationale;
(iii) that the grant of an SDA payment to the Appellants would in effect be to give the DSAP payment at the higher market milk rate for a proportion of the milk when they originally sold that proportion not as market milk but as manufacturing milk;
(iv) that the Tribunal would be making a decision when the Appellants had clearly received payment for that portion at a rate greater than they would have received for it had they sold it has [sic] market milk.

Corresponding ground: The Tribunal wrongly took into account the factors mentioned in pars 2(f)(ii), (iii) and (iv) above.

48 In light of what we have said, particularly in relation to Questions (d) and (e)(ii), nothing further need be said about the first two of the above allegedly irrelevant considerations. As we have indicated, both are matters to which it was quite permissible for the Tribunal to advert as part of the mosaic of its reasoning.

49 The third "consideration", the DAA concedes, contains an error insofar as it is suggested that the rate for manufacturing milk received by Mr and Mrs Purvis was greater than the rate they would have received for market milk. This, it is said, was an unintentional slip as the reasons of the Deputy President disclose at a number of places that she well understood that the rate for market milk was higher than for manufacturing milk: Reasons par 51 ("[the] manufacturing milk rate ... was always a rate lower than ... the price for market milk"); see also pars 65 and 67. The DAA submits, in consequence, that the sentence does not convey what the Deputy President would have wished to convey and they advance a suggestion as to what that might have been. Alternatively, it is said that, as the Tribunal had two other reasons for not exercising the s 8(5)(a)(iv) discretion, this error was not a material one.

50 Accepting that there was an error, it is unnecessary for us to speculate as to what the Deputy President was intending to say if it was something different from what the sentence in the reasons convey. We are satisfied that in the context of these reasons the error was not a material one.

CONCLUSION

51 We will order that the application be dismissed.

I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justices Branson and Finn.

Associate:

Dated: 23 January 2006

Counsel for the Applicants:	Mr N Morcombe QC with Mr A Tokley
Solicitor for the Applicants:	Mellor Olsson Lawyers
Counsel for the Respondent:	Mr P Almond QC with Mr J Pizer
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	29 November 2005
Date of Judgment:	23 January 2006