JUDGMENT No. ...... 3.s~ J!g 3 - --.- CATCHWORDS . - - - - - . - - -

CUSTOMS - Anti-Dumping - undertakings given after initial investigation - whether further investigation could be instigated by Minister when undertakings expired by force of sunset clause in legislation; "Normal Value" - whether power for Minister to alter "normal v a l u e " ; calculation - whether profit component to be considered at manufacturer or dealer level; "Export P r i c e " - appropriateness of date for exchange rate conversion - whether power to review calculation of export price - whether calculation should take into account interest at dealer and importer level - whether losses should be taken into account at dealer and importer level.

NATURAL JUSTICE - whether applicant whose calculations are rejected entitled to make further submissions.

Acts Interpretation Act 1901: s.33(1) Administrative Decisions (Judicial Review) Act 1977 Customs Act 1901: SS.269 - TAA(2) & (3); TAB(l), (2), (3) &

(4); TAC(1), (21, (6), (B), (g), (12) & (13); TAD; TAH; TAJ; TB; TG(l), (2) & (4); TJ(3); TM; T(2A). Anti-Dumuina AuthoriW Act 1988: s.5 & 7. Customs Tariff (Anti-Dumping) Act 1975: ss.4A, 8, 8(2A), 12A & 12B. Customs Tariff (Anti-Dumping) Amending Act 1988 Customs Tariff (Anti-Dumping) Amendment Act 1989. Customs Amendment Act 1991. Customs Legislation (Anti-Dumping) (Amendments) Act 1988. GATT Anti-Dumping Code.

Comptroller-General of Customs v Kawasaki Motors Ptv Ltd (1991) 103 ALR 661, considered. ~anthal Australia Ptv Ltd v Minister for Industrv, Technology & Eommerce (unreported, 23 November 1987), considered. Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, applied. Enichem Anic srl v Anti-Dumping Authority (unreported, 30 November 1992), discussed.

POWERLIFT INISSAN) PTY LTD & ANOR V MINISTER OF STATE FOR SMALL BUSINESS. CONSTRUCTION AND CUSTOMS & ORS

CORAM: HILL J PLACE: SYDNEY DATED: ,217 FEBRUARY

, -c,

.* K-, , . I ? l < )? ,d.

-, ,. , 3 1

FEDERAL COURT OF FEDERAL Wun 1

IN THE FEDERAL COURT OF AUSTRALIA ) )

NEW SOUTH WALES DISTRICT REGISTRY ) No NG 527 of 1 9 9 2

GENERAL DIVISION ) )

BETWEEN: POWERLIFT (NISSANI PTY LIMITED

First Applicant

NISSAN MOTOR CO LTD

Second Applicant

m: MINISTER OF STATE FOR SMALL BUSINESS. CONSTRUCTION AND CUSTOMS

First Respondent

THE COMPTROLLER-GENERAL OF CUSTOMS

Second Respondent

KEN BEAMAN

Third Respondent

CLARK EOUIPMENT AUSTRALIA PTY LIMITED

Fourth Respondent

CORAM: HILL J PLACE: SYDNEY DATED: 1 7 FEBRUARY 1 9 9 3

MINUTES OF ORDER

THE COURT DIRECTS THAT:

(1) The applicant brlng in short minutes of order on a date to be determined.

( 2 ) Costs are reserved.

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 ) No NG 527 of 1 9 9 2

GENERAL DIVISION ) )

BETWEEN: POWERLIFT INISSAN) PTY LIMITED

First Applicant

NISSAN MOTOR CO LTD

Second Applicant

m: MINISTER OF STATE FOR SMALL BUSINESS. CONSTRUCTION AND CUSTOMS

First Respondent

THE COMPTROLLER-GENERAL OF CUSTOMS

Second Respondent

KEN BEAMAN

Third Respondent

CLARK EOUIPMENT AUSTRALIA PTY LIMITED

Fourth Respondent

CORAM: HILL J PLACE: SYDNEY DATED: 1 7 FEBRUARY 1 9 9 3

REASONS FOR JUDGMENT

The applicants seek judicial review of what are said

to be seven separate decisions made by the first respondent,

the Minlster of State for Small Business, Construction and

Customs ("the Minister") by his delegate Mr Beaman, the thlrd

respondent ("the delegate"). As set out in the amended

application for an order of review, the decisions said to be

involved are as follows:

(a) The determination made by the Flrst Respondent by

hls delegate the Third Respondent purportedly

pursuant to s.269TAB(3) of the Customs Act 1901 on

or about 30 June 1992 relating to the export prices

of internal combustion engine powered forklift

trucks ("the goods") exported from Japan by Kohfuku

Tradlng Co. Ltd ("Kohfuku") ("the First Decision").

(b) The determination made by the First Respondent by

his delegate the Third Respondent purportedly

pursuant to s.269TAB(4) of the Customs Act 1901 on

or about 30 June 1992 relating to the export prices

of the goods exported by Kohfuku ("the Second

Decislon " ) .

(c) The determination made by the First Respondent by

his delegate the Third Respondent purportedly

pursuant to ~.269TAC(2)(c) and s.269TAC(9) of the

Customs Act 1901 on or about 30 June 1992 as to the

normal values of certain of the goods exported by

Kohfuku ("the Third Decision").

(d) The determination made by the First Respondent by

his delegate the Third Respondent purportedly

pursuant to ~.269TAC(2)(c)(ii)(B) of the Customs Act

1901 on or about 30 June 1992 as to the rate of

profit on the sale of the goods for the purposes of

the normal values of certain of the goods exported

by Kohfuku ("the Fourth Decision").

(e) The determination made by the First Respondent by

his delegate the Third Respondent purportedly

pursuant to s.269TAC(6) of the Customs Act 1901 on

or about 30 June 1992 as to the normal values of

certaln of the goods exported by Kohfuku ("the Fifth

Decision").

(f) The reascertainment made by the First Respondent by

hls delegate the Third Respondent purportedly

pursuant to s.269TAD of the Customs Act 1901 on or

about 30 June 1992 as to the normal value of goods

exported by Kohfuku ("the Sixth Respondent").

(g) The determination made by the First Respondent or

the Third Respondent his delegate pursuant to

s.269TAH ascertaining the equivalent Amount in

Australian currency of the normal value of certain

goods exported by Kohfuku made on or about 30 June

1992 or alternatively 23 or 24 July 1992 ("the

Seventh Decision " ) .

Many of the underlying facts are not in contention

and in respect of these the evidence was largely documentary.

There were, however, other matters which were the subject of

dispute at a factual level. I will deal flrst with the facts

whlch are not in dlspute and return later in the judgment to

discuss the factual matters ln relation to the arguments which

raise them.

The Historv of the Antl-Dumping ReDorts into Forklift Trucks

On 1 April 1987, Clark Equipment Australia Pty

Limited ("Clark") lodged with the Australian Customs Service a

complaint alleging that Japanese exporters of forkllft trucks

had been dumping products in Australia since January 1983.

They requested the imposition of security deposits as a matter

of urgency and the imposition of dumping duties. The

complaint concerned "engine (IC) powered forklifts of 2.0 to 5

tonne capacity inclusive". As wlll be seen, there was no

specific statutory regime for the lodgment of anti-dumping

complaints under the legislation then in force. That

complaint was accepted and an investigation was initiated on 9

November 1987.

By Australian Customs Notice Number 88 of 1988, a

preliminary finding was notified by the then acting

Comptroller-General announcing that the Australian Customs

Service ("ACS") was satisfied that material inlury in the form

of price suppression had been caused to the Australian

lndustry by dumping of the specified tonnage forklift trucks

from Japan. It was announced that provisional antl-dumping

measures would apply to certain forklift trucks from Japan

intended for home consumption on or after 9 May 1988, pending

the completion of the inquiries. It was announced that the

final flnding would be made on 2 September 1988.

That finding was announced in ACS Dumping Report No

141, dated 2 September 1988, concerning certain forklift

trucks from Japan. After concluding that the forklift trucks

in question had been exported from Japan to Australia at

levels significantly below normal values, that the Australian

industry had sustained material injury and that the injury

sustained by the Australian industry was causally linked to

dumping, the Report recommended that anti-dumping measures be

imposed upon the forklift trucks under inquiry exported from

Japan and that consideration be given to the acceptance of

minimum export price undertakings under s.8(2A) of the Customs

Tariff [Anti-Dumaina) Act 1975 ("the Anti-Dumping Act") if

exporters offered undertakings at levels that would not cause

or threaten material injury to the Australian industry.

That sub-section is set out later in the judgment.

On 22 September 1988, the requisite undertaking was

offered by Kohfuku Trading CO Limited of Japan ("the

exporter"), which company was the exporter of the relevant

consignments. Inter alia, the exporter agreed that future

consignments would be made at prices not less than those

specified in the undertaking or as may be ascertained pursuant

to s.4A of the Anti-Dumping Act from time to time. These

undertakings were accepted by ACS Notice 88/191 dated 4

October 1988.

In the meantime, on 1 September 1988, malor

amendments were made to the scheme of the anti-dumplng

legislation effective on that date. I will return to descrlbe

the original legislative scheme and these amendments later.

On 23 December 1988, Clark filed in this Court an

application for judicial review of the decision of the second

respondent, the Comptroller-General of Customs, as to normal

values of forklift trucks and of the decision to accept

undertakings in relation to the export of forklift trucks from

Japan pursuant to s .8 (2A) of the Anti-Dumping Act. Those

proceedings were settled and orders were made by consent

pursuant to which the Comptroller-General was to initiate an

inquiry into the normal values and export prices of goods the

subject of the September ACS Dumping Report durlng the period

1 April 1988 to 31 March 1989 for the purposes of

ascertaining, ln accordance with s.8 of the Anti-Dumping Act

whether or not the amount of the export prices of goods was

less than the amount of the normal value of the goods. In a

statement annexed to the short minutes of order, the

Comptroller stated that the review of normal values would be

conducted by suitably qualified offlcers of the ACS Dumping

Branch, Australian Capital Territory, who would allow Clark to

make such submission as it may wish to make prior to the

commencement of the revlew.

On 17 July 1989, the ACS published Notice 89/96,

announcing the instigation of the new inquiry and inviting

submissions. In November 1989, the ACS published a Review

Report 1989/1 setting out the findings on normal values and

export prlces. The ACS recommended, in para.13 of the Report,

that exporters be glven ten working days to offer price

undertakings and, in the event that an exporter did not offer

price undertakings, the Minister be advised to release the

exporter from their present undertakings, and to refer the

matter to the Anti-Dumping Authority for investigation, report

and advice. Subsequent to this Report, undertakings were

again offered by the exporter on 5 December 1989 and accepted

by the Minister.

Once agaln Clark initiated proceedings in this Court

for judlcial revleir, both of the decisions made in assessing

normal value and in accepting undertaklngs. These proceedings

were again settled and a consent order was made on 22 April

1991. That order is significant for the purposes of the

applicants' submissions. By it, the decision to accept

undertaklngs, pursuant to ss.8(2A) of the Anti-Dumping Act and

to suspend indefinitely his consideration whether to publish a

dump~ng duty notice under s.8 of that Act in relation to the

forkllft trucks referred to in Review Finding 1989/1, was set

aside as from seven days prior to the date of completion of

the reconslderation referred to in the second order. The

second order then provided:

". . . that the Comptroller-General of Customs and the Minister for Industry, Technology and Commerce consider according to law the application lodged with the Comptroller-General of Customs by Clark Equipment Australia Limited In April, 1987 in relation to certaln forkllft trucks on the basls that it is not an Application to which section 269TB of the Customs Act, 1901, applies."

The further inquiry was notified on 21 August 1991.

On 21 September 1991, the undertaking given by the exporter,

offered on 22 December 1988 and modified in December 1989,

expired by effluxion of time having regard to the "sunset

provlslon" now prescribed in s.269TM of the new Act. I shall

set out that provision in due course. Despite protestations

made by the customs agent for the exporter, John Dunkley Pty

Limited, the ACS took the view that whilst the undertakings

had expired, the ACS was empowered to continue inquiries into

the question of dumping, material injury and causal links and

that the Minister could, if relevantly satisfied, lmpose

further anti-dumping measures.

Accordingly, in December 1991, Report No 91/23 was

published. That Report found no evidence of breaches of price

undertakings prlor to the explry of those undertakings on 21

September 1991 by the Japanese exporters who had provlded

them. An assessment was made of export prices said to be in

accordance with elther sub-sec.269TAB(l)(c) of the Customs Act

1901, as then in force ("the new Act"), or sub-sec.269TAB(3)

of the new Act. Normal values were also assessed in

accordance with either ss.269TAC(2)(c) or 269TAC(6) of the

Act. In the case of the applicants, export prices were said

to have been assessed under ~.269TAB(l)(c) and normal values

were sald to have been assessed in accordance wlth

269TAC(2)(c).

The Report described itself as involving "phase

three" of the consideration of the original dumping complaint

lodged by Clark in 1987, the first phase having concluded with

the acceptance of undertakings on 26 September 1988, and the

second phase having concluded with the acceptance of the

undertakings in December 1989.

On 27 February 1992, the ~inister made declarations

under s.269TG(2) that s.8 of the Anti-Dumping Act applles to

like goods to the forklift trucks exported, inter alia, into

Australia by Kohfuku Trading CO Llrnlted after the date of

publication of the notice where the amount of the export prlce

of those goods was less than the amount of their normal value.

The ACS then entered into a review of the findings

made in the Report of December 1991. The Revlew Finding No 1

of 1992 was published on 30 June 1992. In the summary of that

Revlew Finding, it was indicated that the review was initiated

seven weeks after the release in December 1991 of the Dumping

Report 91/23 and that it was:

" . . . restricted to deductive export prices, assessed in accordance with paragraph 269TAB(l) (c) or sub-section 269TAB(3) of the Act, for 'non-arms length transaction reasons', as explained at paragraphs 1.10 to 1.13 of Dumping Report No 91/23."

It was indicated that normal values were not

altered, but that there had been minor adjustments to them to

reflect certain options, attachments and componentry at

variance to basic model configuration. It was also noted that

the question of inclusion or exclusion of a profit component

in constructed normal values for basic models was considered,

the declslon being made to maintain the inclusion of a proflt

element.

The third matter in the review report relevant to

normal values was the question of the applicable date for

currency conversion purposes. The report aligns that date to

the date of the first arm's length sale - in effect the date

of sale to Australian end users.

The method of calculating the export price for the

applicants' products will be the subject of further discussion

later. Suffice it here to say that there was taken into

account the sale prices of Nomad, a dealer in Nissan forkllfts

which sold direct to the public. The Report recommended that

revised normal values and deductive export prices be applied

for forkllft trucks under reference, entered for home

consumption, on and after 30 June 1992.

The Leaislative Background

The present statutory scheme for the imposition of

antl-dumping duties and countervalling duties derives from the

General Agreement on Tariffs and Trade ("GATT"), registered in

accordance with the provisions of Article 102 of the Charter

of the Unlted Nations on 12 April 1979. Under Article 5 of

GATT Anti-Dumping Code, an investigation to determine the

existence, degree and effect of any alleged dumping is

norma l l v to be initiated upon a written request by or on

behalf of the industry affected. However, the GATT Code

recognises that, at least in special circumstances, the

authorities concerned with antl-dumping may themselves decide

to initiate an investigation without having recelved such a

request, although in so doing they are to proceed only if they

have sufficient evidence of dumping, injury and a causal link

between the dumped imports and the alleged injury.

On 27 August 1987, the Minister announced new

procedures relating to the investigation of complaints of

dumping of goods imported into Australia. These new

procedures would apply to complaints accepted on or after 1

September 1987. These procedures were contalned in Australian

Customs Notlce No 87/169, issued on 4 September 1987. The

terms of that Notice, and an analysis of the then non-

legislative procedure, is dealt with in a judgment of Lee J in

Merman Ptv Limited v Comptroller-General of Customs

(unreported, 16 September 1988).

Subsequently, that procedure received legislative

backing, and the p;esent provisions of S. 269TB, which relate

to the initiation of anti-dumplng investlgatlons upon the

complaint of a person or the government of a Third Country,

were inserted into the Customs Act 1901 by Act No 76 of 1988.

The general procedure now applicable is discussed in detail in

Mldland Metals Overseas Limited v Comotroller-General of

Customs (1991) 30 FCR 87. See too the decision of the Full

Court of this Court ln Swan Portland Cement Limited v

Comotroller-General of Customs (1989) 25 FCR 523.

Prior to the 1988 amendments, to be shortly

discussed, however, there had been no formal legislative

requirement for an initiating procedure for anti-dumping

complaints, the matter of dumping being largely dealt with by

the Anti-Dumping Act whlch empowered the Minister to publish a

notice in the Gazette having the consequence that dumping

duties would be applied to the goods or goods of the class of

goods referred to in the notice.

Prior t o the 1988 amendments, t he power t o accept

undertakings was dealt with b y s.8(2A) o f t he Anti-Dumping

Act, which section was i n the following form:

"Where the export o f a consignment o f goods t o A u s t r a l i a by an exporter has been under consideration by the Minister with a view t o determining whether or not a declaration should be made under t h i s section i n re lat ion t o the goods i n the consignment or t o goods o f the same kind a s the goods i n the consignment, the Minister may - ( a ) give notice i n writ ing t o the exporter s ta t ing that -

( i ) the Minister i s o f the opinion that i t would be appropriate for the exporter t o glve an undertaking i n accordance with paragraph ( b ) ;

and

( i l ) an undertaking i n the terms set out i n the notice may be sa t i s fac tory t o the Minister; and

( b ) whether or not a notice has been given t o the exporter i n accordance with paragraph ( a ) , suspend l n d e f l n l t e l y h i s consideration o f the export o f that consignment i f he i s given and accepts an undertaking by the exporter, i n terms that are sa t i s fac tory t o the Minister, that the exporter w i l l so conduct h i s future export trade t o Australia i n goods o f the same kind a s the goods i n the consignment as t o avoid causing or threatening material l n jury t o an Australian industry or hindering the establishment o f an Australian industry. "

The 1988 amendments included the Customs Legislation

(Anti-Dum~ina) (Amendments) Act 1988 (No 7 6 o f 1988) which,

i n t e r a l i a , inserted ss.269T1 2 6 9 T A t o 2 6 9 T F i n t o t h e Customs

Act 1 9 0 1 . Amendments were also made t o the Anti-Dumping Act,

b y t h e Customs T a r i f f (Anti-Dumping) Amending Act 1 9 8 8 (No.69

o f 1 9 8 8 ) , i n t e r a l i a , by amending s.8 o f tha t Act, so far as

it related t o undertakings, and by inserting a new sectlon,

s.12B o f tha t same Act, which section relevantly provided:

" ( l ) . . . ( 2 ) Where an undertaking i s entered in to a f t e r the commencement o f t h i s section under a relevant undertaking provision i n respect o f goods o f a particular kind, that undertaking shal l , unless provision i s made for i t s ear l ier expiration:

( a ) i f a t the time when the f i r s t - mentioned undertaking was entered i n t o , no previous undertaking relating t o l i k e goods i s i n force under a re1 evant undertaking provision and no previous notice relating l i k e goods i s i n force under a relevant no t i f i ca t ion provision - expire 3 years a f t e r the date that first-mentioned undertaking w a s entered in to ; and -

( b ) i f , a t the time when that f i r s t - mentioned undertaking i s entered i n t o , a prevlous undertaking relating t o l i k e goods i s i n force under a relevant undertaking provision or a previous notice relatlng t o l i k e goods i s i n force under a relevant no t i f i ca t ion provision - expire 3 years a f t e r the date on which that previous undertaking or not lce , or , i f there i s more than one such undertaklng or not ice , the f i r s t such undertaking or notlce was entered i n t o or published, as the case requires. "

This provision was, on occasions in the submiss~ons,

referred to as the "sunset provision " . However, sub-sec . ( 6 ) of s.12B inserted at the same time provided:

"Nothing in this sectlon shall be taken to imply that the Minister may not publish a notice under a relevant notification provision in respect of goods of a particular kind or enter into an undertaking in respect of goods of a particular klnd upon the expiration of all prevlous notices published under a relevant notification provision in respect of like goods and of all previous undertakings entered into under a relevant undertaking provision in respect of like goods. "

The final relevant piece of legislation introduced

In 1988 was the Anti-Dumping Authority Act No 72 of 1988 which

established the Antl-Dumping Authority. This Authority now

has, inter alia, the function of recommending to the Minister,

under s.7 of that Act, whether the Minister should publlsh a

dumping duty notice or a countervailing duty notice in respect

of goods, and where applicable, whether notices should be

given under sub-secs.269TG(4) or 269TJ(3) of the Customs Act

1901 (see s.5 of the Anti-Dumping Authoritv Act).

Further legislative amendments were made in 1989.

The Customs Tariff [Anti-Dumpina) Amendment Act 1989, (No 173

of 1989) repealed ss.8(2A) and 12B of the Anti-Dumping Act,

and re-enacted these provisions in the Customs Act in Division

3 of Part XVB of that Act. Thus, the old s.8(2A) became

s.Z69TG(4) of the Customs Act, and s.12B became s.269TM.

The purpose of these two amendments was essentially

to restructure the anti-dumping provisions of the Customs

legislation into dlscrete taxing and non-taxing Acts, havlng

regard to what were thought to be dlfficultles in s.55 of the

Constitution demonstrated by the decision of the High Court In

Air Caledonie International v The Commonwealth (1988) 165 CLR

462.

Transitional provisions were contained in s.9 of Act

No 173 of 1989 relevantly in the follovilng terms:

" ( 1 ) Any act or thing done... or any undertaking given or accepted, under a provision of the Customs Tariff /Anti- Dumwina) Act 1975 that is repealed and re- enacted in similar form in a provision (in the sub-section called the 'corres~onding provision') inserted in Part XVB of the Customs Act 1901 has effect, on and after the day this section commences, for all purposes as if it were an act or thing done under the corresponding provision."

The Customs Act was further amended in 1991 by the

Customs Amendment Act (No 82 of 1991) which came into effect

on 26 June 1991. Relevantly to the present case that Act

amended s.269TM of the Customs Act 1901, sub-secs.(l), ( 2 ) and

(3), and substituted the following relevant sub-sec.(2):

"Where an undertaking i s entered i n t o a f t e r t h i s sectlon commences under a relevant undertaking provision i n respect o f goods o f a particular klnd, t h a t undertaking expires 3 years a f t e r the day on which i t w a s entered i n t o unless provision i s made for i t s ear l i e r expiration. "

Sub-sec.(3) o f s.9 o f t he 1 9 9 1 Act then provided:

"Where an undertaking was entered i n t o under a relevant undertaking provision o f the Principal Act before t h i s section commences, sub-section 2 6 9 T M ( 2 ) and (3) o f the Prlnclpal Act as i n force lmmedlately before t h i s section commences continue i n force i n relation t o that undertaking as i f the amendments made by paragraph 1 ( a ) o f t h i s sectlon had not been made."

Sub-section ( 6 ) o f s.269TM was omltted, but no

saving provision was enacted. The Explanatory Memorandum

accompanying the 1 9 9 1 amendments noted tha t t h e omission o f

sub-sec.(6) was consequential on the amendments made. I t

continued:

"Because the new subsections make clear that not ices or undertakings have a maximum 3 year l i f e , subsection 1 6 ) i s no longer necessary. "

The Applicants' Firs t Submission as t o Power

For the applicants, it was submitted tha t on t h e

t rue construction o f t he legislation, as l n force a t relevant

times, the undertakings given by the exporter expired in

September 1991 and that thereafter the Minister had no power

to instigate anti-dumping investigations leading ultimately to

the imposition of antl-dumplng duty, other than after a fresh

complaint had been lodged either by a person, or, in the case

of a Third Country, complaint by that country under the

provisions of s.269TB. It was conceded by the respondents

that the undertakings of the exporter did, in fact, explre in

September 1991 and that no fresh complaint had been lodged

under the provisions of s.269TB.

The submission is not easy to follova. Its starting

point is that as and from 21 December 1989, the undertaking

given by the exporter was to be treated as if given under

s.269TG(4). So much must be conceded. Once the undertaking

was given and accepted, the Minister's consideration of the

particular consignment of the export of goods or like goods to

that in that consignment was suspended indefinitely. Prior to

the undertaking expiring, the undertaking was governed by

ss.12A and 12B of the Anti-Dumping Act, including sub-sec.(6)

of s.12B. These provisions were, of course, as the history

set out above shows, ultimately inserted in the Customs Act,

relevantly in s.269TM.

By the time the undertakings expired, however,

s.269TM(6) had been repealed. It was submitted that from the

time that sub-section was repealed, it was clear that the

power in the Minister to reactivate a consideration of a

particular consignment of goods was coextensive with the

duration of the undertaking, so that the power to reactivate a

consideration of that assignment under the provisions of

s.269TG(4) expired at the same time as the undertaking

expired. Thus it was said that, absent a new complaint under

S. 269TB, the Minister lacked power to conduct any further

investigation, and this was so notwithstanding the order of

this Court that it do so, albeit not under s.269TB.

The submlsslon was said to affect both the 1992

Report and the 1991 Report. As the 1992 Report was merely a

revlew of the 1991 Report, if the 1991 Report was without

power, a fortiori so too was the 1992 Report.

In my opinion, the submission suffers from two

difficulties. The flrst is that it assumes that at the time

the undertakings had expired, the only way anti-dumping

inquiries could be instituted, and in consequence anti-dumping

duty reports made and duty imposed, was following the

instigation of a complaint under s.269TB. In my view, that is

not a correct construction of the legislation.

There seems no doubt that prior to the 1988

amendments, that is to say, prior to the introduction to the

Act of s.269TBf there was no statutory procedure at all for

the initiation of inquiries into anti-dumping. As has already

been noted, the Minister had the power to declare that s.8 of

the Antl-Dumping Act applied to the relevant goods, thereby

effectively bringing about an imposition of anti-dumping duty.

As a matter of practicality, that inquiry would normally be

instituted following a complaint but, in an appropriate case,

the Minister himself could initiate such an inquiry.

In that matter, as in deciding ultimately whether to

Impose the duty, the Minister would no doubt be guided by

departmental officers assisting him. Indeed, it was this

informal procedure which gave rise to the original 1987

complaint by Clark. When the 1988 amendments were introduced,

there was no suggestion in the wording of those amendments or,

for that matter, in the intrinsic material accompanying them,

that s.269TB was to be an exclusive code for the instigation

of antl-dumping investigations.

It may well be that s.269TB is an exclusive code

governing the making of complaints by persons or Third Country

governments, although that is not a matter which it is

necessary to determine. The real point is that the power of

the Minister to publish a notice declaring that s.8 of the

Anti-Dumplng Act applies to particular goods, and thereby to

impose anti-dumping duty, is not made subject to the making of

a complaint under s.269TB. That power can arise on any

occasion where the Minister reaches the necessary satisfaction

as described in s.269TG. In particular, the Minister may

reach that satisfaction after making hls own investigation

guided, as was the case before the 1988 amendments, by

departmental officers. That is probably a sufficient answer

to the applicants' submissions.

However, the applicants' submissions depend also

upon an assertion that the suspension of the consideration

glven by the Minister to a particular consignment on the

acceptance of an undertaking operated only for the duratlon of

the undertaking. It is then said that the power of the

Minister to reconsider the export of a particular consignment

under s.269TG(4) is coextensive with the duration of the

undertaking. Thus it is said that upon the explry of an

undertaking, the legislative scheme requires the lodgement of

the fresh complaint.

It was noticed earlier that, under the legislative

scheme, once an undertaking has been given and accepted, the

statutory effect is that the Minister's consideration of the

export of the particular consignment is suspended

indefinitely. It is not, of course, suspended by statute

permanently. The word "suspendu has its ordinary English

meaning of "defer", "postpone" or "put in a state of being

kept undetermined". There is nothing in s.269TG(4) (b) of the

Act or its predecessor, s.8(2A) of the Anti-Dumping Act, which

suggests to the contrary. Prima facie, the suspension is not

coextensive with the giving of the undertaking - the

undertaking after the introduction of the sunset provisions

had only a limited life, a maximum of three years. The

suspension on the other hand was merely indefinite.

No doubt the legislative intention was that the

suspension would continue during such time as the undertaking

glven was in fact complied with. No doubt the further

intention was that if the undertaking was not complied with

during the time it was in force, then the Minister could

resume his consideration of the export of the particular

consignment; likewise, if the undertaking for any reason came

to an end that consideration could be resumed.

However, it is difficult to see that this

construction is in any way affected by the sunset provisions,

wlth or without s.lZB(6) of the Anti-Dumping Act. All the

sunset clause provisions do is to ensure that the undertaking

itself explres on a nominated date, in effect three years

after the undertaking is entered into. That of its own would

hardly seem to imply that on the expiration of that period of

time the Minister's indefinitely suspended consideration is

thereafter a permanently suspended consideration.

Sub-section (6) of s.12B appears to have been

inserted as a matter of caution. Interestingly, it rated no

comment ln the Explanatory Memorandum circulated by authority

of the then Minister for Industry, Technology and Commerce,

Senator Button, with the Customs Tariff (Anti-Dum~ina)

Amendment Bill 1988 which inserted it. Nothing in the

termination of the undertakings in September 1991 prevented

the Minister resuming the consideration of the export of the

consignment which had been suspended.

Further, with respect, I agree with counsel for the

fourth respondent that the applicants can gain no assistance

from textual discussions of the GATT treaty. The present

question must be determined by reference to the Australian

legislation and not the treaty whlch provldes merely the

background to understanding it. In any event, perusal of the

GATT treaty provides no answer to the present question.

Finally, it was submitted by counsel for the first,

second and third respondents that, as there had been no attack

on the notice given under s.Z69TG(Z), the applicants were now

precluded from submitting that the decisions under review were

bad because to do so would involve a collateral attack on the

notice under s.Z69TG(Z). That notice had been in existence

for a substantial period of time and it was noted that the

applicants had participated in the inqulry. In these

circumstances, it was submitted that relief should be refused

on discretionary grounds in any event. Reference was made to

the declsion of the Full Court of this Court in Sandvik

Australia Ptv Limited v Commonwealth of Australia (unreported,

9 October 1990, Davles, Jenkinson and Hlll JJ). I t is

unnecessary for me to consider this submission.

Was there a basis for revlew of normal value under s.269TAD?

I t will be recalled that in the 1992 Report, (Review

Flnding 92/1) there was a review of "normal value" of the

fork-lift trucks in question. I t was submitted that in 1992,

the Minister had no power to re-ascertain the normal values of

the goods under s.269TAD of the Act because the Minister had

not formed the opinion, or could not properly have formed the

oplnion, that a relevant factor to the ascertainment of the

normal value of the goods had altered.

Section 269TAD provides:

"Where the Minister has, for the purpose of publishing a notice under s.269TG or s.269TH declaring that section to apply to goods that may be imported into Australia, being like goods to goods that have been so imported, ascertained the normal value of the imported goods, the Minister may, at any time, and from time to time, if the Minister is of the opinion that any factor relevant to the ascertainment of the normal value of goods to which that section applies has altered, re-ascertain that normal value and, where the Minister does so, the Minister is to publish that normal value as so re-ascertained in the Gazette unless, in the oplnlon of the Minister, the publication of that information would adversely affect the business or commercial interests of any person. "

The 1992 Review Report made mlnor adjustments to

normal values to:

"reflect those options, attachments and componentry at variance to basic model configurations, fitted upon exportation from Japan to those specific forklifts that were traced through to those 'arms length transactions' within Australia that were selected as the 'starting points for deductive exercises to establish export prlces. "

The Report considered also, in relation to normal

values, the inclusion or exclusion of a profit component in

constructed normal values, ultimately concluding to maintain

the inclusion of that profit element. The final matter dealt

with in the Report, so far as impacting upon normal values,

was the question of the applicable date for currency

conversion purposes. Ultimately the Report concluded that

this date should be aligned to the date of the first arm's

length sale - in effect, the date of sale to Australian end

users.

It was submitted that no relevant factor had changed

since the 1991 Report; all factors which were considered in

the 1992 Review were factors under consideration in the 1991

Report. What was involved in the 1992 Review was what counsel

for the applicants chose to refer to as a "change of

methodology".

To appreciate the argument, it is necessary to say

something of the basic scheme of the anti-dumping duty.

It is a pre-condition to the publication of a

declaration by the Minister declaring that s.8 of the Anti-

Dumping Act is to apply (and thereby to impose anti-dumping

duty) that the Minister form an opinion, either as to goods

exported to Australia (s.269TG (1) ) , or goods of a like kind,

(s.269TG (2)) that the amount of the export price of the goods

is less than the amount of the normal value of those goods.

Similarly, when the duty comes to be imposed under the Anti-

Dumping Act, the dumping duty is, subject to s.8(5) of that

Act, the difference between the export price of the particular

goods and the normal value of the goods.

The "export price" is to be determined under the

provisions of s.269TAB. In the case where the particular

goods are exported to Australia by some person other than the

lmporter ( 'the exporter') and have been purchased by the

importer from the exporter, the purchase having been an arm's

length transaction, the export price will be the price paid or

payable for the goods by the importer other than any part of

that price that represents a charge in respect of transport or

other matter arising after exportation. In other words, in

this simple case the export price will be the price actually

paid in a particular transaction: ~.269TAB(l)(a). Where,

however, the purchase of the goods by such an importer was not

an arm's length transaction, and the goods were subsequently

sold by the lmporter in the condltlon in whlch they were

imported to a non-associate, the export price will be the

price at whlch the goods were so sold, less certaln specified

deductions: ~.269TAB(l)(b). In such a case also, the export

price will reflect an actual transaction, ie, the price in the

transaction with the non-associate. In other cases, the

export price is to be an amount to be determined by the

Minister, havlng regard to all the circumstances of the

exportation: s.269TAB(l)(c) and cf s.269TAB(3) applied in the

present case.

Because the export price is essentially a flgure to

be derived from the particular facts of a particular

transaction and relates to particular goods, it is unlikely

that there would be a need for the Minlster to review his

calculation of export price. If he had made a mistake, then

clearly, he could correct it, because he had not properly

calculated the amount in the first place. No specific power

is conferred by the Act to enable him so to do but, if express

power be required, regard could be had to S. 33(1) of the Acts

Inter~retation Act 1901 which provides:

"Where an Act confers a power or imposes a duty, then, unless the contrary intention appears, the power may be exercised and the duty shall be performed from time to time as occasion requires."

By contrast, however, normal value is not a figure

to be derived by reference to a particular sale. It remalns a

constant, unaffected by particular transactions. It is to be

calculated in accordance with s.269TAC and, in the normal

case, will be the prlce paid for llke goods sold in the

ordlnary course of trade for home consumption in the country

of export in sales that are arm's length transactions by the

exporter or, if like goods are not so sold by the exporter, by

other sellers of like goods. Because sales may not be arm's

length or some other factor may make the normal rule

inapplicable, s.269TAC provides a number of alternative ways

of calculating the "normal value" of the goods. Some of the

problems involved are dealt with later in this judgment and

also in the judgment of the Full Court of this Court in

Enlchem Anic S . . v The Anti-Dumwina Authoritv (unreported,

30 November 1992).

There may arguably be greater room for judgment to

be exercised in the calculation of "normal value" than there

will be in the calculation of "export prlce". But what is for

present purposes more material is that the "normal value" 1s a

constant and not a changeable figure. This is clearly

reflected in s.269TAD, which provides a contrary intention to

s.33(1) of the Acts Interpretation Act 1901.

The power to reascertaln 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 arrlved 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 ln a relevant

factor. The limitation contained in s.269TAD is imposed upon

the power to re-ascertain, not upon any power to inquire as a

preliminary to reascertaining "normal value".

There is a question whether the Minister would be

empowered, either by s.269TAD or otherwise, to correct a

determination of "normal value" where the Minister formed the

view that the previous calculation of "normal value" was

erroneous. In thls context, the decision of the Full Court of

this Court in Com~troller-General of Customs v Kawasaki Motors

Ptv Ltd (1991) 103 ALR 661 could have some relevance. That

case did not deal with s.269TADf instead it concerned the

exercise of the power to make and revoke concession orders

under Part XVA of the Act. Beaumont J suggested that a case

could arise where the decision-maker, having performed his

functlon under the legislation, had become "functus officio"

cf B v Moodle (1977) 17 ALR 219 at 225. Ordinarily, however,

as his Honour said (at 667):

"Some administrative decisions, once communicated, may be irrevocable. But where it appears to a decision-maker that his or her decision has proceeded upon a wrong factual basis or has acted in excess of power, it is appropriate, proper and

necessary that the decision-maker withdraw his or her decision. "

If s.269TAD is an exclusive code for the

reascertainment of "normal value" then, so it is submitted,

unless it be construed so as to encompass a reascertainment

after a wrong decision, the Minister would never be able to

correct an error which he had made. Put in another way, the

realisation by the Minister that he was wrong must constitute

an alteration of a relevant factor. It is not necessary to go

so far. If the ~inister has erred in law so that he had not

performed the "function" conferred upon him, there could be no

reascertainment of the normal value since there could not have

been a valid initial "ascertainment". This at least will be

so when a court has set aside, ab initio, (as in Kawasaki) the

initial decision. Implicit in the legislative scheme will be

that the Minister must initially ascertain the normal value

and that s.269TAD has no operation unless that has happened.

However, clearly, s.269TAD was not intended to apply

to a case where the Minister made a valid determination, but

1s later merely dissatisfied with it. There must be the

formation of opinion as to the alteration of a material

factor. The real issue in the present case is what is meant

by the words "alteration in a relevant factor". For the

applicants it was submitted that there was no factor at all

which changed between December 1991 and July 1992. Rather, it

was submitted that the Delegate of the Minister became nervous

about the way he went about calculating the normal value in

1991 and reviewed the methodology involved. Relevant factors

were said to include matters such as price variations, a

matter mentioned in the notes to s.5AA (the precursor of

s.269TAD) in the Explanatory Memorandum accompanying the

Customs Tarlff (Anti-Dumwinal Amendment Bill 1988. In my

view, the word "factors" should be taken as encompassing all

matters whlch are made relevant to the determination of the

"normal value" by the terms of s.269TAC. For the power to

reascertain to be enlivened, there will need be some change in

these matters. The applicants' submlsslons were supported by

counsel appearing for Toyota Motor Sales Australia Ltd, the

applicant in other proceedings heard on this issue at the same

time.

Counsel for the first, second and thlrd respondents

submitted that the word "factor" did not mean "fact", and that

each of the matters enumerated above and activating the review

of "normal value" in the present case was, relevantly, a

factor. Wlth respect, I do not agree. In my view, there was

not, in the present case, any relevant alteration in any

relevant factor and it is not suggested that the Delegate of

the Minister formed any view other than that which appeared in

the Review Report on the matter.

It was submitted by counsel for the first, second

and third respondents that the applicants should, as a matter

of discretion, be refused relief. It was said to be a fact

that the 1992 review was instigated at the request, inter

alia, of the applicants. Should this be the case, I would be

inclined to exercise the discretion adversely to the

applicants because, I do not see why, if the lnquiry was

undertaken at the request of the applicants and the applicants

were thereafter dissatisfied as to the outcome of it, the

applicants should then be heard to say that there was no power

in the Minister to undertake the review.

The applicants submlt that there is no evldence to

this effect and that the highest the evidence goes is that the

Australian Customs Service initiated a review of deductive

export prices and that the review was undertaken in response

to a number of submissions lodged with the Australian Customs

Service after the release of Dumping Report No 91/23. I agree

with this submission. I should say that the mere fact that

the applicants participated in the inquiry would not, of

itself, cause me to exercise my discretion adversely to them.

They were in a posltlon that an inquiry was being held which

was expected to and did constitute a review of normal value

and export price and whether or not it is correct to say that

in a legal sense the applicants had no alternative but to

participate. In a practical commercial sense this is clearly

the case, and the applicants should not suffer merely because

co-operation in the inquiry was a commercial necessity. I

would, accordingly, grant rellef on this ground on the basis

that the Minister had no power to make the review he did.

Was there Dower to review exuort Drlce?

For the reasons which I have already set out, I am

of the view that there was power in the Mlnister to review, in

an appropriate case, the calculation of the "export prlce".

Section 269TAD, albeit a specific provision, can not be taken

as ralslng an implication that power to review "normal value"

being expressly stated, albeit confined, there was no power to

review "export price".

In my opinion, the power is to be found in s.33(1)

of the Acts Interpretation Act 1901. I find it unnecessary to

consider whether s.33(1) of that Act, when considered in

conjunction with s.269TAJf may also have operation.

The argument that to have a constrained power to

revlew the normal value but an unrestrained power to revlew

export price produces absurdity, does not seem to me to be

particularly cogent, having regard to the different roles

played by normal value and export price in the scheme of the

Act, as earlier discussed.

Whether the inclusion o f a wro f i t component was i n error

For the applicants it was submitted t h a t assuming

the Minister had power t o reassess i n the 1 9 9 2 Report "normal

value", he erred when so dolng i n f a i l l n g t o exclude a p r o f i t

component when making tha t reassessment.

The competing arguments are well summarised i n t h e

Report, which referred t o the circumstances ex i s t ing as being

posslbly unlque t o the Japanese f o r k l l f t market. The Report

then continued i n Chapter 7 "Issues Arising and Decisions":

" ( i ) There are two d i s t l n c t l e v e l s o f trade for Gur (Goods under Revlew) i n Japan: manufacturer t o dealer, and dealer t o end user.

( l i) The most recent overseas ACS inquir ies revealed t h a t sales a t the manufacturer t o dealer l e v e 1 , a1 though u s u a l l y prof i table , were rendered 'non - arms length' by a number o f f a c t o r s , p a r t i c u l a r l y t h e payment o f rebates.

( i li) The converse was found a t the dealer t o end user l e v e l ; although usually 'arms l e n g t h ' , these sales were rendered ' no t i n the ordinary course o f trade' by belng found t o be a t l e v e l s that d i d not recover a l l relevant cos t s , v l z t o buy-in and r e s e l l .

( i v ) I t w a s claimed...on behalf o f Nissan . . . t h a t t h e l a t t e r situation - o f (iii) above - should ' t r igger ' application o f s u b - s e c t i o n 2 6 9 T A C ( 1 3 ) ,

r e g a r d l e s s o f the p r o f i t a b i l i t y o f d o m e s t i c m a n u f a c t u r e r t o d e a l e r s a l e s ; e s s e n t i a l l y t h a t paragraph 269TAC(2) ( c ) b a s e d normal v a l u e s , now applicable i n v i e w o f t h e s e p a r a t e disqualifications o f b o t h t r a d e leve ls f o r s u b - s e c t l o n 2 6 9 T A C ( l ) p u r p o s e s , ( and u n a v a i l a b i l i t y o f d a t a on p r l c e s t o t h l r d c o u n t r i e s - p a r a g r a p h 269TAC(2) ( d ) ) , s h o u l d e x c l u d e a p r o f i t component . T h e c o n t r a r y argument i s t h a t t h e m e t h o d o l o g y o f paragraph 2 6 9 T A C ( 2 ) ( c ) , b y i t s v e r y n a t u r e , r e t u r n s the ACS t o the m a n u f a c t u r e r t o d e a l e r t r a d e l e v e l , s i m p l y b e c a u s e d e a l e r s d o n o t m a n u f a c t u r e f o r k l i f t s , and paragraph 269TAC(2) ( c ) r e q u l r e s the i n p u t o f p r o d u c t i o n c o s t s d e r i v a b l e o n l y a t t h a t t r a d e l eve1 ; t h e r e f o r e , a s t he m a n u f a c t u r e r t o d e a l e r t r a d e level was disqualified n o t f o r ' o r d i n a r y c o u r s e o f t r a d e r e a s o n s ' , b u t r a t h e r f o r ' n o n - a r m s l e n g t h t r a n s a c t i o n ' r e a s o n s , the ACS i s o b l l g e d t o i n c l u d e a p r o f i t component i n these paragraph 269TAC(2) ( c ) b a s e d normal v a l u e s . "

I t was t he argument summarised i n (v) above w h i c h

u l t i m a t e l y g a i n e d a c c e p t a n c e and w h i c h t he a p p l i c a n t s c l a i m

drew a f a l s e d i c h o t o m y . T h e a p p l i c a n t s ' w r i t t e n submission o n

the m a t t e r proceeded a s f o l l o w s :

"Under s269TAC ( I ) s a l e s a t d i f f e r e n t leve ls c a n be u s e d . A d j u s t m e n t s mus t be made u n d e r T A C ( 8 ) . S i m i l a r l y u n d e r TAC(2) a d j u s t m e n t s mus t be made u n d e r T A C ( 9 ) . The a d j u s t m e n t s a r e d i r e c t e d t o e n s u r e comparab i l l t y o f t h e s a l e u n d e r c o n s i d e r a t i o n w i t h the e x p o r t s a l e . The

export sale was not a sale by the manufacturer to the importer.

Therefore TAC(12) (c) does not 'by its very nature' return 'the ACS to the manufacture to dealer trade level'. It only commences at that point in so far as it involves the construction of a 'normal value'. That it may involve a further sales level is made clear in TAC (2) (c) (ii) (A).

Therefore there is no essential reason to distinguish between levels of sale and to give a limited effect to the proviso to TAC(2) (c) (li) (B). "

To make the competing submissions intelligible, it

is necessary to summarise the statutory scheme for the

determination of "normal value", recognising that the

significance of "normal value" in the legislative scheme is

that dumping may be found to exist and dumping duty ultimately

become payable where the "normal value" arrlved at is more

than the "export price" of the goods. I t must also be

recalled that export price is, in the usual case of an arm's

length purchase of the goods by an importer from the exporter

to Australia, the actual purchase price at which the goods

were sold by the importer excluding transport or charges in

respect of any other matter arising after exportation: c£

s.269TAB of the Customs Act.

Glven the evident policy of the legislation to deter

overseas producers dumping goods into Australia at prices less

than those prevailing overseas, it could be assumed that the

legislature would endeavour to have a congruence between the

method of calculating "normal value", essentially the overseas

component of the equation, and that used in calculating the

"export price", so as to ensure that like is compared to like.

Looked at purely as a matter of policy, it would be strange if

the normal value were to be determined as being the price

prevailing at a retail level of dealer to customer, taking

into account the retail profit on the one hand, whereas the

export prlce was calculated at a wholesale level, not taking

into account the retail profit write up. To do so would be to

increase the normal value at the expense of the export prlce,

and make it more likely that dumping would be found to exlst,

when on a comparison of like with like it did not.

Turning then to the calculation of "normal value",

the starting polnt is (adopting the convention of excluding

from the section references the numbers 269 in thls

discussion) TAC(1). That expresses the normal mode of

calculating "normal value" to be:

"the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods. "

The need for congruence with the method of

calculating the "export price" is recognised by TAC(8) which

provldes :

"Where the normal value o f goods exported t o Australia i s the price p a i d for l i k e goods and t h a t price and the export prlce o f the goods exported:

( a ) re la te t o sales occurring a t d i f f e r e n t tlmes; or

( b ) are not i n respect o f ldent lcal goods; or

( c ) are modified i n d i f f e r e n t ways by taxes or the terms or circumstances o f the sales t o which they re la te ;

that price p a i d for l l k e goods i s t o be taken t o be that price p a i d adjusted i n accordance with directions by the Minister so t h a t those d i f f e rences would not a f f e c t i t s comparison with that export price."

Where, as here, the Minister i s s a t i s f i e d t h a t t h e

sales for home consumption i n Japan are not suitable for use

i n determlnlng normal value because o f lack o f arm's length

dealings, or because they are not i n the usual course o f

t rade, then sublect t o T A C ( P ) ( d ) , not presently re levant , t he

normal value i s t o be determined i n accordance wi th T A C ( 2 ) ( c ) ,

" the sum o f :

( i ) such amount a s the Minister determines t o be the cost o f production or manufacture o f the goods i n the country o f export; and

( i i) on the assumption that the goods, instead of being exported, had been sold for home consumption i n the ordinary course o f trade i n the country o f export:

( A ) such amounts as the Minister determines would be the del ivery

charges and other costs necessarily lncurred in that sale; and

(B) subject to subsection (13), an amount calculated in accordance with such rate, if any, as the Minister determines would be the rate of profit on that sale.. . "

TAC(9) provides for adjustments to be made to thls

value, again deslgned to obtain a congruence between the

method involved in calculating normal value and that involved

in calculating export price. That sub-sectlon provides that

in a case to which TAC(Z)(c) applies that:

"the Mlnister must make such adjustments, in determining the costs to be determined under that paragraph, as are necessary to ensure that the normal value so ascertained is properly comparable with the export price of those goods."

Prima facle, the language of TAC(Z)(c) suggests that

consideration should be directed only at the level of the

manufacturer and not at the level of a dealer, for it is the

manufacturer's costs of production which are used as the

starting point. No actual sale is thereafter to be looked at.

Rather, there is to be assumed a hypothetical sale in the

ordlnary course of trade in the country of export, so that the

profit margin on that sale is to be calculated. The sub-

section does not indicate who the hypothetical seller is to

be, but presumably it is the manufacturer. Neither is there

any indication as to who the hypothetical purchaser is to be,

that is to say, whether the sale is to be at the wholesale or

retail level.

Section TAC(13) operates where section TAC(12) does.

Briefly, section TAC(12) deals with the case where sales in

the country of export, albeit arm's length sales have for an

extended tlme been less than the costs of production or

manufacture plus costs necessarily incurred in the sale of the

goods by the seller of those goods, and it is likely that the

seller will not be able to recover those costs. In this case,

the sales are to be treated as non-arm's length sales, with

the consequence that TAC(2) must have application rather than

TAC(1). TAC(13) then provides:

"Where, because of the operation of subsection (12), the normal value of goods is required to be determined under subsection (Z), the Minister shall not include in his or her calculation of that normal value any profit component under sub-subparagraph (2) (c) (ii) (B)".

The Minister submits that the present was not a case

where TAC(12) required the normal value to be determined under

TAC(2) because, although TAC(12) would have applied if

attention were focused at the level of dealer to end user, it

was unnecessary to consider TAC(12) where consideration was

given to the manufacturer to dealer level. Put in another

way, it is said that the reason TAC(2) is made applicable is

not because of TAC(12), but because at the manufacturer to

dealer level, there were not arm's length transactions and, as

a result, at that level, the sales prices were unsuitable for

use under TAC ( 1 ) . Thus, normal value is not requlred to be

determined under TAC(2) by virtue of the operation of TAC(12),

but is required to be determined under TAC(2) by virtue of the

operatlon of TAC(2)(a).

The question is essentially a matter of construction

of 269TAC. There are, in my opinion, three possible

interpretations. One possible view is that where TAC(2) is

made applicable because of two sections, TAC(2)(a) and

TAC(12), the Minister can choose whichever route to TAC(2) he

prefers, and TAC(13) will have application only where the

route chosen is through TAC(12). The second view is that

where both TAC(12) and TAC(2) (a) lead to the determination of

normal value, TAC(2) is to be read sublect to the remainder of

TAC, including TAC(12) and (13), so that if TAC(12) is

literally satisfied, that section requires the Minister to

determine normal value under TAC(2), with the consequence that

TAC(13) will always have application. The third view is that,

although the Minister may appear to have a choice whether to

apply TAC(2) having regard to TAC(Z)(a) or TAC(12), that

choice must be exercised having regard to the method of

calculating the export price. Where, as here, the export

price was calculated by reference to the prices prevailing at

the dealer to end user level, the provision of TAC(12) has to

be tested at that level. At that level, the requirements of

TAC(12) would have been satisfied, with the result that

TAC(13) would have come into operation.

Of these three alternatives, two lead in this case

to the conclusion contended for by the applicants; only the

first leads to the result contended for by the Minister.

Although I see point as a matter of policy in the third

alternative, I think that the second alternative is, as a

matter of construction, correct. It is, in any event,

unnecessary to choose between these alternatives, as each

arrives at the same result. The first alternative seems to me

to be incorrect in allowing the Minister to choose the route

to TAC(2), without regard to the appropriateness of that route

in the scheme of the legislation, nor to the fact that the

provisions of TAC(2 ) are subject to the provisions of TAC( 12 )

and (13). The result must be that the decision to calculate

normal value made in the 1992 Report must be set aside.

The proper date for determining the exchanae rate

Each of the "normal value" and the "export price" of

goods, if not expressed in foreign currency, must be converted

to an "equivalent amount" in Australian currency: s .269T(2A).

Section 269TAH(l) of the Customs Act then provides for

currency conversions to be made "in accordance with a fair

rate of exchange at the appropriate date".

There is no definition of the "appropriate date".

What that date is must, therefore, be determined by reference

to the context of the legislation.

As has already been emphasised, the scheme of the

relevant legislation is to compare the "export price" in

respect of goods with the "normal value" of those goods, both

to determine the preliminary question of whether there has

been dumping, and to determine the quantum of anti-dumping

duty payable. From this scheme, the applicants advance the

argument that where normal value is expressed in foreign

currency (that will usually be the case, having regard to the

method of calculation), the appropriate date for the

calculation of the exchange conversion will be the same date

as is chosen for the calculation of the export price.

Otherwise, it is said, the determination of dumping could

depend upon the vagaries of fluctuating exchange rates.

As an abstract proposition of law, the respondents

do not deny this proposition. They say, however, that the

evidence in the present case establishes that it was not

necessary to make a conversion to calculate the "export price"

of the goods. Thls being the case, it is only necessary that

the decision-maker select an "appropriate date" for the

conversion of the "normal value". Since the export price was

calculated using as its starting point the first arm's length

sale in respect of each of the goods under review, that, it is

submitted, is an appropriate date for the conversion. Thls is

so, it is submitted, notwithstanding that in the present case,

a perlod of up to eleven months elapsed between the date of

the actual export sale of the goods and the date of the first

arm's length sale. The alignment of the currency conversion

date for the purposes of calculating the "normal value" with

the date of the first arm's length sale was appropriate, it

was said, because it gave a single reference date for the

consideration of the export price and normal value of each

forklift truck exported to Australia.

There can be no doubt that where currency rates are

volatile, the use of different conversion dates for the

calculation of "normal value" and "export price" of goods

would lnvolve either an error of law or, alternatively,

unreasonableness. It would create what the applicants

referred to as a new form of dumping, "exchange rate dumping";

the creation of a difference, expressed in Australian dollars,

between export price and normal value dependent totally upon

exchange rate fluctuation.

The dlspute between the parties arises because the

calculation of the "export price" in the present case was a

"deductive" calculation made under s.269TAB(3), rather than a

calculation made under s.269TAB(l) dependent upon an actual

export sale. The same problem could arise under

~.269TAB(l)(c).

It is helpful first to discuss the scheme of

s.269TAB to understand the competing submissions. In the

ordinary case, the export price of particular goods will be

the actual arm's length price paid by an importer to the

exporter, after excluding any component in that prlce for

transportation or any matter arising after exportation:

s.Z69TAB(l)(a). Essentially, ~.269TAB(l)(a) requires little

more than a perusal of the invoice price. If that price were

not expressed in Australian dollars, then clearly the

appropriate date for conversion would be the date of that

export transaction.

However, if exporter and importer are not at arm's

length, then the Act recognises the need to adopt some other

method of calculation to work back to what an arm's length

prlce between exporter and importer would have been. The

slmplest calculation, and that with which ~.269TAB(l)(b) and

the related subsection s.Z69TAB(Z) is concerned, commences

with the price received by the lmporter for the sale of the

goods to an arm's length third party and proceeds to deduct

from that price certain amounts to arrive at an approximation

of the arm's length price from the exporter to the importer.

However, where the importer and the purchaser from

the importer are associates, or where the information

furnished about the transactions undertaken is for some reason

defective, the Minister is given a wider discretion to

determine the "export price". However, whether the Minister

acts under s.269TAB(l)(c) or s.269TAB(3), his task remains the

same, namely to arrive at the best approximation he can of the

price that would have been paid by the importer to the

exporter for the goods in an arm's length sale, less the costs

of export and any cost relevant to post export transactions.

In maklng that calculatlon, the Minister will take into

account all the circumstances of the actual exportation,

subject to that information being unreliable or there being

insufficient information supplied about it. However the

calculatlon is made, it will be an attempt to construct, so

far as is possible, an arm's length price between importer and

exporter at the time of the actual export transaction.

Logically therefore, whether the calculation is made under

sS269TAB(l)(a) or some other section, such as ~.269TAB(l)(c),

if the figure arrlved at is expressed in forelgn currency, the

appropriate date for conversion will be the date of the export

transaction.

Although, as the respondents submit, the actual

export price derlved by Mr Beaman was expressed in Australian

dollars, that is a somewhat incomplete description of what

happened. Having regard to the relationship that existed

between the importer in this case, Powerlift, and the

exporter, and between Powerlift and its dealer, Nomad

Materials Handling Pty Limited ("Nomad"), Mr Beaman chose to

commence his calculations with the price which Nomad, a dealer

in forklift trucks, sold to its customers in arm's length

sales. That price was expressed in Australian dollars. It

was then necessary to make a number of deductions to work back

to what the arm's length price would have been between the

exporter and Powerlift if an arm's length relationship between

those companies had existed. One of the factors in the

calculation involved the actual prlce pald by Powerlift to the

exporter for the goods. This figure was relevant, inter alia,

to enable a calculation to be made of the profit made by

Powerlift. In his calculations, Mr Beaman properly converted

thls price to Australian dollars at the date of the actual

export transaction. All other elements of the calculation

were in Australian dollars.

Slnce the figure arrived at by Mr Beaman was his

approximation of an arm's length price at the date the actual

export transaction took place, in my view, the date of that

export transaction is the only appropriate date to adopt to

make the currency conversion of the "normal value". That view

is reinforced by virtue of the fact that it was also the date

adopted by Mr Beaman to convert an element in his calculation

to Australian currency. To adopt any other date on the

present facts would, in my view, involve an error of law.

Denial of Natural Justlce

For the applicants, it was submitted that they were

denied procedural falrness because natural justice required

that they be told in "clear and adequate terms" what procedure

was to be adopted in the determination of the export price

and, in particular, that Mr Beaman proposed to allocate sales

and administration expenses among the goods under review by

reference to the expenses of other companies.

Considerable time was taken up in the case with

evidence of what happened at two meetlngs between officers of

the Australian Customs Service and representatives of the

applicants and their customs agents on 2 3 and 2 4 March 1 9 9 2 .

On this matter, evidence was given on behalf of the appllcants

by Mr Dunkley, of John Dunkley Pty Limited, customs agents for

the appllcants, Mr Ackland, the General Manager of Powerlift

(Nissan), and Mr Truter, an employee of John Dunkley Pty

Limited. For the Minister, evidence was given by Mr Beaman,

Assistant Director of Dumping Operations with the ACS and Mr

Tierney, an investigation offlcer within the industry

assistance sub-program of the ACS. There was extensive cross-

examination of the witnesses, particularly Mr Beaman.

The background of these meetings was that Mr Beaman

wished to visit Powerlift, GFW and Nomad (the last two being

Powerllft Nissan dealers) to determine export prlces. Mr

Beaman wished to inspect documentation in respect of certain

models of forklift trucks. The meeting on 23 March 1992 was

at the premlses of Nomad. According to Mr Ackland, Mr Beaman

commenced this meetlng by saying:

"I'm sorry to take up your time once agaln, but every time we do a review somebody complains about what we have done ... I'll nominate a number of the sales by Nomad and ask that you provide me with all the usual documentation relating to those sales. As you know from the past review, I need to see the documents that show the price to the end users, and all the documents which relate to Nomad's selling, administration, workshop and other expenses concerning those sales."

Thereafter, Mr Beaman selected a number of samples

from the list of sales, and documentatlon in respect of those

sales was obtained. Mr Beaman then sought and obtained a

print-out of expenses, including particularly overhead

expenses, and there then ensued a long discussion about the

allocation of certain overhead expenses, having regard to the

fact that Nomad sold not only forkllft trucks of the

particular models involved in the inquiry, but other forkllft

trucks, as well as used forklift trucks and spare parts. The

discussion roamed over various items wlth discussion and

apparent acceptance on various percentages appropriate to

particular items.

On 24 March 1992, a meeting was held at the premises

of Powerlift which lasted virtually all day. At that meeting

there was discussion of the schedules provlded by Nomad and

discussion as to the percentages of expenses and the

proportion relevant to the particular forklift truck models

under review. According to the applicants' evidence, various

percentage figures were agreed upon by Mr Beaman as

"acceptable allocations".

Subsequently, and without further discussion with

representatives of the applicants, the Report of 30 June 1992

was prepared in relatlon to the selling and administrative

expenses to be taken into account in determining the FOB

export prices of the goods under revlew. At no tlme was

anyone on behalf of the applicants told that the ACS had

obtained information from other importers of forklift trucks

which indicated that the selling and administration expenses

of those importers in relation to forklift trucks lnvolved

different percentages of selling prices to those percentages

applicable to Powerlift, nor did any representative of the ACS

at any time request any explanation as to the reasons why

other importers might have different percentage allocations.

The evidence adduced for the respondents differed in

some of its detail from that given by Mr Ackland and the other

witnesses for the applicants. The most significant difference

was that Mr Beaman deposed that he had said at the outset of

the first meeting:

"I will select one sale for each of the models you have sold since 1 July 1991. I will then need to establish all costs, charges and expenses in relation to these selected fork1 ift charges and expenses in relation to these selected forkllft sales incurred at the dealer level. Please realise that the information gathered in these next few days will not necessarily form the basis of final decisions. I intend to compare each party's clalmed allocations for selling and administration expenses for consistency as each is selling virtually homogeneous forklifts in an intensely competitive market. Moreover, I will be examining each party's infrastructure to ald in this comparison."

Mr Beaman further deposed that later in the

discussion he had said:

"You must reallse that your claims on allocations will need to be compared with those of your competztors and if they are irreconcilably at variance, I will need to seek legal advlce. "

Mr Tlerney's evidence substantially corroborated Mr

Beaman's evldence. A note made by Mr Tierney tendered in

evidence made no reference to this part of the conversation.

To the extent that it is necessary to reconclle the

various accounts of the meetings, I accept the evldence of Mr

Ackland and Mr Dunkley in preference to that of Mr Beaman and

Mr Tlerney. I had the impression that Mr Beaman, in

particular, perhaps not consciously, was seeking to justify

himself by a process of ex post facto reconstruction. Mr

Tlerney had, in my view, little real recollection of what

happened at the meeting and I accept the submission of counsel

for the applicants that his evidence was prompted by reading

Mr Beaman's affldavlt. By contrast, Mr Ackland and Mr Dunkley

were impressive witnesses and I accept them as witnesses of

truth.

For the applicants it was submitted that I should

find that :

"the Applicants were given:

(a) no opportunity to address the alleged 'wlde discrepancies' between the figures of the various exporters;

(b) no opportunity to make submlsslons as t o the appropriateness of a comparison between the allocation by the First Applicant of its selllng and adminlstratlon expenses and those undertaken by other importers;

(c) no opportunlty to address whether in truth there was any comparability between its allocation of selling and administratlon expenses and those of other corporations;

(d) no opportunity to further justlfy the a1 locat ion o f selling and administratlon expenses which had been agreed in March 1992 in light of the change in approach by the Thlrd Respondent in May 1992;

(3) no opportunlty to address the questlon of whether, even if the allocation basls was rejected, it was appropriate to use a ratio based on the company' S overall expenses and revenues (ie across its whole business, not just sales of forklift trucks) ;

(f) no opportunity to address the question of whether, even if the allocation basis was rejected, it was appropriate to utlllse the company's accounts on a proflt centre basis. "

The evidence of the applicants, which I accept,

enables me to make each of these findings and I do so.

However, it does not follow that the applicants are entitled

to succeed on this polnt.

It is well established that the content of the rules

of natural justice must depend upon the particular statutory

context and the circumstances in which the question arises:

v West (1985) 159 CLR 550 at 585-6. The applicants

submit that where the decision-maker has indicated a certain

approach as one he is likely to pursue, and has done so in

order to permit the party affected to make submissions in

respect of that approach, procedural fairness does require

that he advise if there is to be a fundamental change in that

approach. Further, it is submitted that procedural fairness

requires that where all information requested by the decision-

maker has been provided, the party affected must be lnformed

that the decision-maker proposes to reject its information as

"unreliable".

While procedural fairness requires that a party

interested in the potential imposition of dumping duty must be

afforded the opportunity to be heard in respect of matters

relevant to whether there has been dumping, and, in the

result, a recommendation that a notice be published under

s.269TG, that obligation does not require that every step in

the decision-making process be made only in consultation with

that person. There was no obligation upon the decision-maker

to inform the applicants of the way in which his mind was

working or put to them any tentative views he had formed. To

borrow from the judgment of Wilcox J in Kanthal Australia Pty

Limlted v The Minister for Industry, Technolosv and Commerce

(23 November 1987, unreported, at 29):

"It was encumbent upon him to direct their attention to the subject matter and to hear what they had to say. This he did. In my vlew there was no failure to observe the dictates of natural ]ustlceU.

To conclude that the figures were unreliable

involved the decision-maker in the making of a judgment which

was his to make. It did not involve him in making any

inference adverse to the applicants, or deciding some issue of

fact adverse to the applicants. The decision-maker here was

faced with a considerable divergence in the range of figures

of overheads. He heard what the applicants had to say about

the allocation of their own overhead expenses and then reached

a conclusion. So to do is not a breach of natural justice.

Nor did the evidence establish any ground, whether as a result

of anythlng said by those representing the ACS or of any

practice engaged in by the ACS, for a legitimate expectation

that the decision-maker would adopt the percentage allocations

submitted for by the applicants. There was, no doubt, hope

that the figures discussed at the two meetings would be

accepted, but I would find that the applicants were aware the

possibility exlsted that the figures ultimately accepted could

differ from those discussed.

That the decision-maker erred in a ~ ~ l v i n a s.269TABf3)

It is clear from Paragraph 8.6 of the June 1992

Report that Mr Beaman took the view that it was necessary to

investigate dealer to end-user sales as Powerllft dld not

usually sell to customers at arm's length. The applicants

submit that ~.269TAB(l)(b) was applicable, whether or not such

sales were to customer at arm's length. Thus it is said that

Mr Beaman erred in the construction of the legislation or,

alternatively, took into account an irrelevant consideration.

This submission, clearly correct so far as concerns

s.Z69TAB(l)(b), leaves out of account the provisions of

s.Z69TAB(3) which provides:

"Where the Minister is satisfied that sufficient information has not been furnished, or 1 s not available, to enable the export price of goods to be ascertained under the preceding subsections, the export price of those goods shall be such amount as is determined by the Minlster having regard to all relevant information."

Clearly the formation of an opinion under

s.269TAB(3) precludes the operation of s.269TAB(l). There is

no particular reason why the calculation under s.269TAB(3)

must be made in the same way as the calculation under

s.269TAB(l) (b). As a matter of law, the fact that there was

no arm's length sale by Powerlift might not necessitate the

investigation of dealer to end-user sales in the calculation

under s.269TAB(3). However, clearly no error of law would be

committed in so dolng.

The real complaint of the applicants, as I

understand lt, 1s that the opinion under s.269TAB(3) was

formed only because the Minister disregarded as "unreliable"

the allocation of expenses by the applicants. Hence, the

applicants sought to challenge the finding of unreliability

under s.269TAB(4).

Section 269TAB(4) enables the Minister, in

determining the export price, to disregard any information he

considers to be unreliable. Mr Beaman determined, in his

report of 30 June 1992, that the information provided by

Powerllft Nissan was unreliable and that, in the result, he

was satisfied that information had not been furnished, or was

not available to enable the export price to be determined

under s.269TAB(l). The Minister's decision was, as has been

noted, based upon an analysis of information obtained by other

importers. This analysis was the subject of challenge by the

applicants. It was submitted that the procedure employed by

Mr Beaman "demonstrated" the absence of any rational basis for

the relection of the material put forward by Powerlift Nissan.

Mr Beaman's approach was critlclsed on the basis that one of

the bases for rejecting the allocation put forward by

Powerlift Nissan was to permit the adoption of a consistent

approach for the purpose of arriving at an approximately

consistent figure between various companies so as to act

equitably.

To state all the criticisms made would make this

judgment, already long, most unwieldy. I content myself with

saying that whilst the criticisms would not have led me to

regard the information advanced by Powerllft Nissan as being

unreliable, that decision is not a matter for the Court. It

was, and remains, a matter for Mr Beaman, and its exercise was

not so unreasonable that no reasonable decision-maker could

conclude as Mr Beaman did. Further, it slmply is not correct

that Mr Beaman "relied exclusively" on material outside the

business of Powerlift Nissan and in so doing failed to take

into account a relevant consideration. What Mr Beaman did was

adopt a basls of estimation which he considered to be

preferable.

The applicants then sought to explore in detail the

decision made under s.Z69TAB(4). Their written submissions

read as follows:

"The comparison of costs which led ultimately to the application of section 269TAB(3) and TAB(4) depended upon the Identification of 'wldely disparate' selling and admlnlstration expenses between the varlous Importer and dealer groups (the First Applicant and Nomad, Toyota and Hodgson) and importer/dealer companies (MLA and Yale). Those discrepancies were only Identified after the aggregation of the selllng and administration expenses relevantly of the First Applicant and Nomad. Therefore the declslon under section 269TAB(4) as to unreliabllity only came about as a result of an error of law in the construction of section 269TAB(l) (b) on the part of the Third Respondent. "

Thls argument is met by the respondents in two ways.

First, it is submitted that a decision to invoke s.Z69TAB(4)

was not a "decision" to whlch the Administrative Decisions

(Judicial Review) Act 1977 applied. What was said by the High

Court in Australian Broadcastina Tribunal v Bond (1990) 170

CLR 321, especially at 339, was relied upon in support of this

submission. That case makes it clear that a "reviewable

decision" in the present context must be something more than

an intermediate determination made on the way to an ultimate

decision (at least unless the statute provided for the making

of a final ruling on the point). I t must be a determination,

authorised by the statute, effectively resolving an actual

substantive issue. The decision to disregard unreliable

information in itself would not be a decision; the reviewable

decision in the present circumstances is the decision whether

to calculate the export price under ~.269TAB(l)(a), (b) or

(c), or perhaps the making of the calculation itself. If that

decision is itself unreasonable, or arrived at in error, then

the applicants would, however, still be entitled to succeed.

The real matter in controversy between the partles

lay with the rejection of sales and admlnistratlon expenses by

the decision-maker because he was unable to reconcile what he

saw as widely disparate clalms of applicable expense

allocation to the goods under review.

The procedure adopted by the decision-maker was, in

the applicants' submission, as follows:

" . . . the Third Respondent : (1) Aggregated the selllng and

administration expenses identified originally at import and dealer levels in respect of (a) the First Applicant and Nomad; and (b) Toyota and Hodgson;

(11) In the case of the First Applicant and Nomad added together the allocated selling and administration expenses expressed as a percentage of the revenue derived from the sale of forklift trucks (as ascertained at the meeting in March 1992);

(iii) In the case of Toyota and Hodgson he aggregated the percentage put forward by Toyota (In respect of a different perlod to that under review) as relevant t o selling and administration expenses with that ascertained in respect of Hodgson .

( i v ) He then compared t h e two t o t a l s i n ( i i) and (iii) t o t h e s e l l i n g and adminls trat lon percentage p u t forward by MLA ( i n respec t o f s a l e s i n which there was no dealer invo lved) and t h e r e f o r e which had e n t i r e l y different c o s t s and expenses.

He concluded there was a 'wide d l s p a r l t y ' between t h e f l g u r e s i d e n t i f i e d i n ( i i) and (iii) and those i d e n t l f l e d i n ( i v ) ;

( v i ) He re j ec ted t h e a l loca t ion o f s e l l i n g and a d m i n i s t r a t i o n expenses put forward a t t h e March meetlngs and ascertained a percentage f lgure b y d l v l d i n g t h e revenue o f t h e company (which i s concerned w i t h more than inc luding d i f f e r e n t goods t h e goods under r e f e r e n c e ) b y t h e t o t a l s a l e s a n d adminis trat ion expenses o f i t s e n t i r e bus iness . A s i m i l a r process was applied t o MLA, but o n l y t o a d i v i s i o n o f t h a t company' s bus iness .

( V 1 1 ) He accepted t h e percentage a l loca t ion b y Nomad, and t h e percentages put forward b y Hodgson and Toyota . "

Although some aspec ts o f what Mr Beaman d i d i n v l t e d

q u e s t i o n s , I do not t h l n k t h a t it can be said t h a t he was

precluded, as a matter o f law, from f ind ing t h e appl icants '

a l l o c a t i o n s u n r e l i a b l e , glven t h e material whlch was ava i lab le

t o him, and notwithstanding t h a t some o f t h a t material could

be challenged as not being comparable. Once t h e appl icants '

material was able t o be disregarded, then Mr Beaman was

authorised t o proceed t o make a ca lcu la t ion under s.269TAB(3).

The decision made under s.269TAB(3) was accordingly not

unreasonable.

An alternative but related submission was that the

scheme of the legislation required that, even if applylng

s.269TAB(3), s.269TAB(l) could only be departed from to the

extent required to compensate for the insufficient material.

So, it was said, to consider a transaction level not

contemplated by s.269TAB(l) involved an error of law.

The initlal premise upon which the submission is

based is, in my view, flawed. There is nothing in

s.269TAB(l), or any other section of the Customs Act, whlch

requlres that s.269TAB(l) is predominant. Section 269TAB(3)

is not a power dependant upon or ancillary to s.Z69TAB(l).

Indeed, as was submitted by the respondent, the existence of

s.269TAB(3) is lustlfied in terms where the export price can

not be ascertained under ~.269TAB(l)(a) or (b). All that need

here be said is that the calculation under s.Z69TAB(3) would

need to be a calculation consistent with the scheme of the

legislation. There was no error committed by Mr Beaman in

proceeding as he did under s.269TAB(3).

The Treatment of Interest

The applicants submit, and the respondents deny,

that Mr Beaman's treatment of interest in calculating the

export price of the goods was internally inconsistent. The

applicants say that when Mr Beaman dealt wlth interest as an

expense at the Nomad level, he did so by applying it against

all purchases of forklift trucks Nomad made from Powerlift

Nlssan. When dealing with it at the Powerlift level, he

credited interest to the sale of all forklift trucks to

Powerlift Nissan, including sales to other dealers. The

failure to take into account this 'internal transaction' on a

dollar for dollar basis is said to have had the effect of

depressing the export price and thereby increasing the amount

of duty payable.

To this submission the respondents reply that the

treatment of interest on a 'dollar for dollar basis' is a

purely factual matter, which dld not arlse on the methodology

utilised by Mr Beaman, which was to base deductions for

expenses according to percentages derived by dividing

aggregate expenses by aggregate revenue.

To assess thls submission, it is necessary to

analyse precisely what Mr Beaman did. The background to the

problem is that Nomad purchased trucks from Powerlift in a

transaction where the terms of trade provided for interest to

be payable by Nomad to Powerlift on outstanding balances. At

the Nomad level, Mr Beaman properly set out to calculate the

selling and administration expenses on a per unit basis so as

to deduct from the Nomad selllng price of each vehicle under

review a portion of selling and administration expenses. He

did this by taklng the total sales and administration expense

of Nomad and dividing the figure arrived at by the total

revenue of Nomad to reach a percentage figure. This he then

applied to each item. He took the view that it was either

difficult or impossible on the material provided to him to

arrlve at a precise figure for each component of sales and

administration expenses. This approach is of course

unobjectionable. It was not incumbent, for example, upon Mr

Beaman to calculate the preclse interest payable on each

forklift truck sold by Nomad. Nevertheless, the method used

by hlm was an approximation for this course. He had arrived

at a composite flgure which included his estimate of the

interest payable by Nomad to Powerlift.

Mathematically, it is possible to calculate the

percentage which interest played in the figure arrived at as

representing the proportion of selling and administration

expenses per item sold. Thus the overall percentage arrived

at by Mr Beaman was 12.8%. This was constituted as to 48% by

the lnterest component. Put in another way, of the selling

and administration expenses per item sold by Nomad, 48% was

attributable to interest. With this knowledge it is possible

to calculate in respect of each model truck the amount of

interest in fact taken into account.

At the level of Powerlift, Mr Beaman commenced with

figures prepared by Powerlift, in effect a six months profit

and loss account, which showed an item, "interest received",

as a "departmental expense". The interest shown under that

headlng represented the interest received from Nomad for

trucks financed, whether or not those trucks were models under

review or not. That interest was shown as a negative amount,

that is to say, the effect of treating it as a negative

expense was to add it on to profit. Mr Beaman, havlng

rejected the allocation of expenses put forward by the

representatives of Powerlift, ultimately, as we have seen,

adopted a figure calculated as a percentage of selllng and

administration expenses over all sales. The effect of this

was to spread the interest receipt from Nomad over the whole

of Powerlift sales. It can readily be seen that the flgure

taken into account as interest at the Powerlift level,

referable to the goods under review, was a figure different

from that taken lnto account at the Nomad level. The

inconsistent treatment was unnecessary, illogical and, in my

view, unreasonable.

In the course of argument, I raised with counsel for

the respondents two matters not argued by the applicants but

which troubled me. Since, in my view, the matter must be

returned to the decision-maker for further calculation, I

ralse these matters at this stage so that there may not be a

need for further consideration by this Court at a later time.

First, the lnterest was clearly not an expense (albeit a

negative expense) of Powerlift. It represented income of

Powerlift. It was the treatment of the amount as an expense

which seems to have prompted Mr Beaman to include it in the

allocatlon which he made of expenses over all sales. When

seen as an item of income, it is clear that no question of

allocatlon arises. More signif lcantly, however, is the need

to recognise the role interest plays in a calculation such as

the present.

Interest payable by a dealer such as Nomad to a

vendor to it with which it is associated may, depending upon

the circumstances, either be a holding cost, that is to say

clearly a post export charge, or it may be, in a particular

case, something other than lnterest (for example, an

enhancement of purchase price). There is no suggestion here

that the interest payable from Nomad to Powerlift was other

than a holding charge of Nomad.

As a holding charge, the interest payable to

Powerlift clearly had to be deducted from the price paid by an

arm's length customer to Nomad, for it was a post-export

expense. The amount should not be taken into account at all

at the level of the vendor/financier. If the amount is in

truth interest, then when looking at the proflt of the

associated vendor, it is not a profit related to the goods

under review, any more than an arm's length profit on the sale

of other goods would be.

The Treatment of Losses

The applicants criticise Mr Beaman's calculation of

export price for failing to make a deduction for losses at the

dealer transaction level. This came about, so it was

submitted, because Mr Beaman believed that he was bound in law

to apply the methodology established by s.269TAB(2) to

transactions at both the dealer and importer level. The

methodology in s.269TAB(2) is, in terms, applicable only to

transactions at the importer level under s.Z69TAB(l)(b). It

clearly has no direct relevance to transactions at the dealer

level.

Mr Beaman, in his affidavit evidence, explained his

treatment of losses as follows:

"...I constructed an export price by selecting the price paid in the first arms length sale of each model exported to Australia and deducting from that price duties, sale taxes, costs, charges, expenses and profits arising in relation to the goods under reference so as to work back to a deductive FOB price.

I chose to make no adjustment for losses incurred in relation to the sales of the goods at the dealer level. This was in the context of my finding that the sales from the importer to the dealer were not at arms length.. . In this context, I considered that to make an adjustment for

losses on sales by the dealer would have had the e f f e c t o f negating the poss ib i l i t y o f ' sales dumping' . The phenomenon o f ' s a l e s dumping' may occur where a constructed export price i s below the invoiced export price t o the extent o f the l o s s , i n consequence o f the se l l i ng price In the f irst arms length transaction i n A u s t r a l i a not recovering a l l relevant costs .

For the same reason I chose t o make no adjustment for losses incurred i n re lat ion t o sales o f the goods a t the importer l eve1 . "

Mr Beaman was cross-examlned on the matter. Counsel

for t h e applicants commented tha t he had made no allowance for

losses i n respect o f sales from Powerlift t o Nomad. To t h i s

M t Beaman answered:

"No, that w a s my interpretation o f the l a w . "

The cross-exammation then continued:

M S Beazley: Nor d i d you make any allowance for the treatment o f losses a t the leve l o f the sales by Nomad t o the end user?

M r Beaman: I would answer that i n the same way.

M S Beazley: You say that i s because o f your interpretation o f the l a w , i s that your answer a s t o why you have not done so ?

M r Beaman: Yes, except that I d i d take advice from my peers so i t w a s not exclusively my interpretat ion, b u t wlth that qualification, yes.

MS Beazley: And your Interpretation of the law was one whlch derived out of a scheme in section 269TAA, I take it?

Mr Beaman: Basically, yes.

MS Beazley: In almost all cases the sales by Nomad to the end users were at a loss, were they not?

Mr Beaman: There were quite a number of losses. When I added in the element of ~nterest, yes, that dld have that effect. "

This passage makes it clear that Mr Beaman adopted

the approach whlch he did with respect to losses because he

believed that as a matter of law he was compelled so to do.

If that belief were wrong ln law, then Mr Beaman's decision

will have miscarried. It is necessary, therefore, to return

to the legislation and the policy enshrined in it to determine

whether Mr Beaman was so bound.

It will be recalled that where importer and exporter

are not at arm's length, ~.269TAB(l)(b) requires the

calculation of export price to be made by commencing with the

sale from the importer to the importer's customer at arm's

length, and deducting therefrom the deductions prescribed In

s.269TAB(2), including the profit, if any, made by the

Importer on that sale (subject to the case where the Minister

specifies that profit at a particular rate is to be

disregarded). Section 269TAA is an interpretation provision

designed to assist in the determination whether a particular

transaction i s a t arm's length for the purposes o f

~ . 2 6 9 T A B ( l ) ( b ) . Relevant t o the present problem, it provides:

" ( 2 ) Without l imi t ing the generali ty o f subsection ( l ) , where:

( a ) goods are exported t o A u s t r a l i a otherwise than by the Importer and are purchased by the importer from the exporter (whether before or a f t e r exportatlon) for a particular price; and

( b ) the Minister i s s a t i s f i e d that the importer, whether d i rec t l y or through an associate or associates, s e l l s those goods i n Australia (whether i n the condition i n whlch they were imported or otherwise) a t a l o s s ;

the Minister may, for the purposes o f paragraph ( l ) ( c ) , t rea t the sale o f those goods a t a l o s s as indicating that the importer or an associate o f the importer w l l l , d i r e c t l y or indirectly, be reimbursed, be compensated or otherwise receive a b e n e f i t f o r , or i n respect o f , the whole or a p a r t o f the price."

Section 269TAA ( l ) ( c ) provides tha t a purchase or

sale o f goods i s not t o be treated as an arm's length

transaction i f :

" ( c ) i n the opinion o f the Minister the buyer, or an associate o f the buyer, w i l l , d i r e c t l y or ind i rec t l y be reimbursed, be compensated or otherwise receive a b e n e f i t f o r , or i n respect o f , the whole or any p a r t o f the price. ' l

Underlying these provisions is what the parties in

evidence referred to as "sales dumping". Sales dumping

occurs, so the December 1991 Report put it in Chapter 11

"Export Prices", when :

"sales to end users are at price levels that do not cover all costs to import, modify (where applicable) and sell."

The most normal case of sales dumping will occur

where the goods under review have not entered Australia at a

price less than the normal value in the country of export, but

have thereafter been "dumped" by being sold at a loss by the

importer, under an arrangement that the exporter will

reimburse the importer for that loss. The slgnlflcance of

s.269TAA(2) is that it permits the Minister, in effect, to

assume the existence of a reimbursement agreement, where a

loss arises. It does not make it mandatory for the Minister

to do so. It may be possible to conceive of "sales dumping"

where no reimbursement arrangement exists. It is a

possibility neither addressed by the legislature in

s.269TAA(2), nor by the parties in argument before me, and I

put it to one side here.

It is obvlous enough that a reimbursement

arrangement may exlst not merely as between importer and

exporter, but also as between exporter and more remote

parties. So, for example, if importer and dealer are

associated, then dumping could occur, notwlthstandlng that the

actual lnvolced export price is no less than normal value if

the dealer were to sell at a loss and that loss were to be

reimbursed.

However, the mere fact that a sale is at a loss at

the dealer level would not necessitate the conclusion that

sales dumping was taking place. There might well be

legitimate commercial reasons unrelated to dumping which

brought about the sales at a loss. At least where the

decision-maker is unable to avail him or herself of

s.269TAA(2), the determination of whether sales dumping has

occurred as part of a step in the process of determining an

ultimate export price involves a question of judgment. No

legal prescription binds the decision-maker to assume

reimbursement and thereby disregard losses. Given a finding

of fact that there is a likelihood of reimbursement,

compensation or benefit, he may disregard losses. Such a

likelihood may often, if not usually, be inferred. Absent

consideration of that question, however, the decision-maker

would, ln my opinion, err in law in disregarding losses at the

dealer level.

Had that been the only ground upon which the

applicants were successful, however, I would not have sent the

matter back to the relevant decision-maker. This is so

because in the December 1991 Report there was a finding that

sales dumping had ln fact occurred. The making of such a

finding would have entitled Mr Beaman, in any event, to

disregard losses incurred by Nomad.

By way of an alternative submission, the applicants

contended that, if the importer and dealer were to be treated

as related entities, it was appropriate for losses and profits

to be netted off. In the circumstances of the present case,

~t is unnecessary to explore this submission.

The absence of a delegation

The applicants finally submitted that the exercise

by Mr Beaman of the Minister's power under s.269TAB(4) was

void, because the Mlnlster had not delegated expressly that

power to Mr Beaman. The submission was no more than formally

put.

The delegation to Mr Beaman, which was in evidence,

specifically referred to the Minister's power under

~.269TAB(l)(c), ~.269TAB(2)(c) and s.269TAB(3), but made no

reference to the power under s.269TAB(4). The applicants

submit that while s.269TAB(4) is related to s.269TAB(3) and

has no independent operation, it nevertheless confers upon the

Minister a separate power from that conferred by s.269TAB(3)

and accordingly can only be exercised by the Minister

personally in the absence of a delegation.

With respect, I disagree. Delegation of the power

under s.269TAB(3) carries with it, in my opinion, the power

for the purposes of s.269TAB(3) to disregard information

considered to be unreliable. There is no requirement for a

separate delegation by the Minister of the power conferred by

s.269TAB(4).

Conclusion

The applicants have been successful on a number of

matters, and in these respects the matter must go back to the

decision-maker to do again in accordance with law. I would

dlrect the applicants to bring in short minutes of order

reflecting the matters dealt with in this judgment. If the

partles are unable to agree as to the terms of those orders I

wlll hear argument on a date to be agreed with counsel when I

wlll also hear argument as to costs.

I certify that this and the preceding seventy-two (72) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justlce Hill.

Counsel and Solicitors MS M Beazley QC and Mr N Hutley for Applicant: instructed by Malleson Stephen

Jacques

Counsel and Solicitors A Robertson and S J Gageler for First, Second and instructed by Australian Thlrd Respondents: Government Solicitor

Counsel and Solicitors Mr B W Walker instructed by for Fourth Respondent: C G Gillis & CO

Dates of Hearing: 30 November and 1-4 December 1992, 29 January 1993

Date Judgment Delivered: 17 February 1993