Powerlift (Nissan) Pty Ltd and Anor and Chief Executive Officer of Customs and Crown Equipment Pty Ltd (Party Joined) and Toyota Material Handling Pty Ltd (Party Joined) [2010] AATA 34 (19 January 2010)

Last Updated: 24 February 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 34

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2007/ 5044

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Powerlift (Nissan) Pty Ltd

Applicant

And

Chief Executive Officer of Customs

Respondent

Crown Equipment Pty Ltd

Party Joined

DECISION

Tribunal

M D Allen, Senior Member

Date 19 January 2010

Place Sydney

Decision

The decision under review is AFFIRMED.

......................[sgd]........................
M D Allen, Senior Member

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 34

ADMINISTRATIVE APPEALS TRIBUNAL ) No.s 2007/0741,
) 2007/0742, 2007/0743

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Crown Equipment Pty Ltd

Applicant

And

Chief Executive Officer of Customs

Respondent

Toyota Material Handling Pty Ltd

Party Joined

DECISION

Tribunal

M D Allen, Senior Member

Date 19 January 2010

Place Sydney

Decision

The decisions under review are set aside and these matters remitted to the Respondent with the Direction that the relevant Tariff Concession Orders are REVOKED as and from the date revocation was requested by the Applicant.

...................[sgd]...........................
M D Allen, Senior Member

CATCHWORDS

CUSTOMS: Refusal to make Tariff Concession Order and revocation of Tariff Concession Orders. Walker Stackers put to the same use as Reach Trucks and Counterbalanced Forklifts and hence substitutable goods.

Inability of Administrative Appeals Tribunal to narrow the terms of the proposed TCO upon review.

LEGISLATION

Customs Act 1901 ss 269C, 269L, 269SH

CASES

Seguin Moreau Australia v Chief Executive Officer of Customs & ORS (1997) 77 FCR 410;

Riverwood Cartons Pty Ltd v Chief Executive Officer of Customs [1997] FCA 817; (1997) 77 FCR 493;

Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7

Toyota Material Handling Australia v Chief Executive Officer of Customs & Anor (2008) AATA 1108;

RE Lego Australia Pty Ltd v Comptroller General of Customs & Anor (Unreported AAT decision No. 10591, 11 December 1995);

RE Vulcan Australia Pty Ltd v Comptroller General of Customs [1994] AATA 150; (1994) 20 AAR 116;

RE Nordson Australia Pty Ltd v Chief Executive Officer of Customs & Anor (Unreported AAT decision No. 13036, 1 July 1998)

REASONS FOR DECISION

19 January 2010

M D Allen, Senior Member

1. The current proceedings relate to four Tariff Concession Orders (“TCO”) and these reasons should be read in conjunction with the Tribunal’s reasons for decision in Administrative Appeals Tribunal (“AAT”) matter [2008] AATA 1108 which involved the same parties and similar equipment.
2. The matters are:

2007/5044: An application by Powerlift (Nissan) Pty Ltd to review a decision by the Respondent dated 8 November 2007 affirming a prior determination not to make a TCO 0619386 in the following terms viz:

“REACH TRUCKS, RETRACTABLE MAST, NARROW AISLE, rider-seated as defined in Australian Standard 2359, having ALL of the following:

(a) load capacity NOT less than 1,300kg and NOT greater than 2,100kg at a 600mm load centre;
(b) battery powered;
(c) wheelbase NOT less than 1,350mm and NOT greater than 1,600mm;
(d) operator seated at right angles to the direction of travel”

2007/0741: An application by Crown Equipment Pty to review a decision by the Respondent dated 9 February 2007 to set aside a previous determination dated 11 November 2006 that revoked TCO 0101093 which reads:

“FORKLIFT TRUCKS, COUNTER-BALANCED, rider seated, as defined in Australian Standard 2359 Part 7-1995, having ALL of the following:

(a) load capacity exceeding 1,200kg but less than 1,800kg at a 500mm load centre;
(b) operator position facing the forward direction of travel;
(c) height with collapsed mast of less than 3m;
(d) wheelbase exceeding 1150mm but less than 1450mm;
(e) battery powered 48 volt electric system”.

2007/0742: An application by Crown Equipment Pty Ltd to review a decision by the Respondent dated 9 February 2007 to set aside a previous determination dated 11 November 2006 that revoked TCO 0208347 which reads:

“FORKLIFT TRUCKS, internal combustion piston engine, counterbalanced, operator seated, having ALL of the following:

(a) rated load capacity NOT less than 1,000kg but NOT greater than 1,400kg at a 600mm load centre;
(b) overhead guard as defined in AS2359.7;
(c) maximum height with collapsed mast of 3100mm;
(d) 4 wheels with pneumatic profile;
(e) front wheel diameter NOT less than 450mm;
(f) engine capacity NOT less than 8kW but NOT including forklift trucks with closed loop engine management systems or catalytic mufflers.”

2007/0743: An application by Crown Equipment Pty Ltd to review a decision by the respondent dated 11 February 2007 setting aside a previous determination dated 11 November 2006 that revoked TCO 0206974 which read:

“FORKLIFT TRUCKS, SIT-ON RIDER CONTROL, COUNTER-BALANCED, as defined in AS2359 Part 7-1995, having ALL OF THE FOLLOWING:

(a) load capacity rated to a height exceeding 3m of 1200kg to 1800kg at a 600mm load centre;
(b) rider facing the forward direction of travel;
(c) height with collapsed mast of less than 3m;
(d) wheelbase of 1150mm to 1450mm;
(e) battery-powered electrical system of NOT less than 30V;
(f) power steering with steering wheel;
(g) all wheels cushioned or pneumatic tyres;
(h) weight without batteries exceeding 2650kg.”

Due to an administrative error TCO 0206974 was not reinstated but a new TCO 0701895 was declared in substitution for the previously revoked TCO.

3. Although in matter 2007/5044 the named Applicant is Powerlift (Nissan) Pty Ltd, the conduct of the proceedings was undertaken by the Party Joined in matters 2007/0741, 742, 743 Toyota Material Handling Australia Pty Ltd. This was an administrative arrangement in that Nissan was the actual applicant for the TCO in question, and therefore the only party who could seek review of the decision. Toyota supported Nissan’s application and for administrative efficiency the Tribunal directed that Toyota have the conduct of the application made by Nissan as it would be heard at the same time as the application to which Toyota had been joined as a party.
4. The question in these proceedings is the same as in the proceeding being matter [2008] AATA 1108 viz were substitutable goods produced in Australia on the relevant day.
5. The term “Substitutable Goods” is defined in section 269B Customs Act 1901 as:

“...means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods, the subject of the Application or of the TCO, can be put.”

6. In attempting to ascertain what may or may not be substitutable goods, a crucial step is to define the purpose to which the goods are to be put. For example, in Seguin Moreau Australia v Chief Executive Officer of Customs & Ors (1997) 77 FCR 410 the question was the use of American Oak barrels as opposed to French Oak for the maturation of wine. Had the question been what were suitable containers for wine then a different decision could have been made. Cf Riverwood Cartons Pty Ltd v Chief Executive Office of Customs [1997] FCA 817; (1977) 77 FCR 493 where the question was related to the packaging of cans and bottles.
7. All that is required to find that substitutable goods exist is that the goods are put to the same use. Thus issues such as price (RE Lego Australia Pty Ltd v Comptroller General of Customs & Anor (Unreported AAT decision No. 10591, 11 December 1995), quality (RE Vulcan Australia Pty Ltd v Comptroller General of Customs [1994] AATA 150; (1994) 20 AAR 116) and superior operation (RE Nordson Australia Pty Ltd v Chief Executive Officer of Customs and Anor (Unreported AAT decision No. 13036, 1 July 1998) are irrelevant.
8. The Goods the subject of these proceedings may be described as follows:
   1. As to TCO 0619386 the subject goods are retractable mast rider operated reach trucks which are more particularly described as a special type of forklift truck in which the mast holding the forks can be pushed away from the drivers compartment by means of hydraulics. When operating with the mast extended the reach truck becomes a counterbalanced forklift and operates in much the same way.
   2. As to TCOs 0101093, 0208347, and 0701895 the subject goods are as stated rider-seated counter-balanced forklift trucks, the TCOs 0101093 and 0208347 refer to battery powered forklift trucks, ie electric counterbalanced forklifts, whereas TCO 0701895 refers to internal combustion engine (either petrol, LPG or diesel) forklifts.
9. As pointed out in evidence, internal combustion engine forklifts should not be operated in areas without proper ventilation, and electric forklifts are used for this application and they are also used for applications where fumes might affect the goods being transported.
10. An issue in these proceedings was what was meant in TCO 0208347 by the words: “4 wheels with pneumatic profile”; and in TCO 0701895 “all wheels cushioned or pneumatic tyred.”
11. The matter of tyres was to my mind explained by the evidence of Mr Watts. Thus while I accept that the terms pneumatic, pneumatic profile and cushioned all have particular technical meanings, I do not consider that these particular tyre types affect the issues raised in these proceedings.
12. A not dissimilar issue arose regarding forklifts that are used in applications where they are required to traverse uneven surfaces. I am satisfied that there is a genus of lift trucks that are referred to as “rough terrain” forklifts and they are used primarily where there are no paved surfaces. Quite clearly the walker stacker is not substitutable for these goods.
13. The purpose of the walker stacker manufactured by Crown Equipment Pty Ltd (“Crown”), and claimed to be substitutable for the goods in the TCOs was explained by a director of Crown, Mr Walsh. Their application is primarily in small to medium businesses where they are used to meet a truck that comes with goods, to remove a pallet holding the goods from the truck and place it within a building either on a rack or on the ground.
14. Crown accepts the Tribunal decision in the matter [2008] AATA 1108, but is now particularly concerned with forklifts and reach trucks that can stack up to 6m as they particularly compete with the walker stacker that can lift to 5.7m. The higher level of lifting in the earlier matter revolved around equipment for large distribution centres but below 6m involves the bulk of retail storage facilities and it is here that the walker stacker faces competition from the TCO goods.
15. Of concern are a large number of forklifts or reach trucks sourced from Asia that could come within the TCO. Questioned about speed of operation it was the opinion of Mr Walsh that in the small business application speed of operation was not a predominant issue.
16. A particular advantage of the walker stacker is that the operator does not have to be qualified to use it. It therefore has a use in, for example, unloading trucks and storing goods at suburban supermarkets where untrained staff can perform the operations.
17. Mr Ballantyne, an Industrial Engineer, who gave evidence in the previous proceedings also gave evidence in the current matters. In his evidence he adhered to his previous opinion, viz that the walker stacker is not substitutable for counterbalanced trucks primarily, as I understood his evidence, because counterbalanced trucks enabled higher speeds of operation.
18. At transcript page 195 the following exchange took place:

“Q: That the whole picture I’m getting is, what you are saying is, whether you go for a counterbalanced or a walker stacker is simply a matter of degree depending on...

A: You have to do a benefit analysis as to what timings you are looking at, how fast do you want to do it, how often are you going to do it, and that.

Q: Efficiency?

A: Yes, in the case of efficiency the choice is clear.

Q: And then perhaps at the end cost may come into it.

A: May do, yes.”

19. As to Mr Ballantyne’s diagram purporting to show the relative speed of operation between a counterbalanced truck and a walker stacker, in cross examination it became clear that it was not based on actual operating times and that the purported advantage of counterbalanced trucks had to be discounted to allow for variables such as time to maximum speed, operators readiness, and actual distance travelled.
20. Mr Palmer is the product safety standards and engineering manager of Toyota Material Handling Pty Ltd (“Toyota”). In his evidence, he was able to explain some of the difficulties in seeking to ascertain the use and usages of various lifting equipment. He pointed out that Toyota was basically in the business of selling or leasing new forklifts. After the lease on a forklift expires, Toyota does not seek to retail it but rather disposes of it to a dealer who then on-sells it. As he put it “basically when it goes to the wholesaler, we do not control where that forklift ends up”.
21. That situation was also discussed in the evidence of Mr Stewart who I found to be an impressive witness. He pointed out that many factors might influence the purchase of material handling equipment and for second-hand equipment there was no guarantee that the best equipment for the particular task would be purchased.
22. Mr Palmer’s evidence can be summed up by his comments in cross examination, viz that a walker stacker compared to a counterbalanced truck came down to intensity of use.
23. At page 263 of the transcript, the following passage occurs:

“Q: Whether it’s 20 pallets a day, 20 pallets a week it can be done, can it not, using a walker stacker?

A: It can be done. It’s whether it’s practically (sic) and whether it’s realistic to do it”.

24. Mr Palmer further explained his evidence by stating:

“I do not have a lot of experience on the retail side of the business and that attests to the sales, my dash is more to do with the larger companies and supporting the sales and those sorts of things. I don’t really get involved with whether a walker stacker should be used for this application or whether a reach truck or whether a counterbalanced truck should be used. That is the salesman. He discusses that with the customer and they come to a decision as to what should be used. I don’t go out with the salesman and sell a forklift with him”.

25. The question of the substitutability of any equipment for the task was, as stated above, addressed by Mr Stewart. As he pointed out in evidence, not all choices are logical and he gave the example of a company where walker stackers and low lift-height reach trucks were being used in tandem but the walk behind stackers were being replaced by reach trucks because the employees, through their union, expressed a preference to sit down to perform their tasks.
26. In other circumstances the walker stackers have been replaced by high-reach trucks or forklifts because the latter can perform both tasks, ie both high lift and low-medium lift.
27. At transcript page 288, Mr Stewart said:

“Yesterday... we spoke about the Asian market and we spoke about the Asian trucks coming in with low lift heights relevant to the TCO. The industry in Australia is, for want of better term, under siege from this equipment.”

28. This statement by Mr Stewart was challenged by Toyota, but having regard to Exhibit C9 and the evidence with regard to that exhibit I am satisfied that low-cost Asian imports do come within the TCO and successfully compete against the Crown walker stackers.
29. In the course of evidence on behalf of Toyota, much was made of apparent limitations caused by obstacles such as drains etc across loading docks. Given the evidence of Mr Stewart, I am satisfied that this purported difficulty has been exaggerated and methods can be adopted to obviate any such impediments. So far as the Sydney Markets are concerned I consider the uses seen there, although illustrative, are in many ways peculiar to that location.
30. The evidence of the witnesses in this matter satisfies me that the use of the reach trucks, counterbalanced trucks and the walker stacker, the subject of these proceedings, is to unload goods from a hardstanding in front of a warehouse and then to transport those goods either to racks within the warehouse or to deposit them inside the warehouse, from which point they are then stored.
31. The diagram by Mr Ballantyne which is annexed to his statement in these proceedings, well illustrates the particular uses.
32. In these proceedings the equipment discussed were concerned with low to medium lift heights, for example up to 5.3m maximum.
33. I am satisfied that reach trucks or counterbalanced trucks are used as of choice in high volume high paced transport distribution hubs. Apart from this, I am satisfied that walker stackers are entirely substitutable for the TCO goods, in that they all have the same “use”, viz that as set out in paragraph 30 above.
34. Toyota submitted that if the decision of the Tribunal was to set aside the reviewable decision in the reach truck matter, viz matter 2007/5044 then the Tribunal should consider narrowing the terms of the TCO.
35. My opinion is that that course is not open to the Tribunal. There is no doubt that the Tribunal has all the powers and discretions available to the original decision maker, see Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7. However section 269L of the Customs Act 1901 sets out the steps that must be taken in order to amend a TCO application (including a narrowing of the description of the goods) but the power to amend a TCO is not given to the Respondent upon the review of a decision not to make a TCO see s269SH Customs Act 1901. Given the various steps that must be taken in order to amend a TCO application and that no amendment power is given to a reconsideration upon internal review, I find that there is no power in the AAT upon review of a reconsideration decision to amend a proposed TCO.
36. Given my finding that the walker stackers have the same use as the TCO goods, then the reconsideration decision in matter 2007/5044 is AFFIRMED, and the reconsideration decisions in matters 2007/0741, 742, and 743 are remitted to the Respondent with the Direction that the relevant TCOs are revoked as and from the date revocation was requested by the Applicant in those proceedings.
    

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.

Signed: ..............{sgd}..................................................

K. Lynch, Associate

Date/s of Hearing 20 - 23 Oct 2009 and 3 December 2009

Date of Decision 19 January 2010

Counsel for the Applicant J. Scarcella

Solicitor for the Applicant M. Watson.

Solicitor for the Respondent G. Komora

Solicitor for Party Joined O. Shtein