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FEDERAL COURT OF AUSTRALIA
Panasia Aluminium (China) Limited v Attorney-General of the Commonwealth [2013] FCA 870
Citation: / Panasia Aluminium (China) Limited v Attorney-General of the Commonwealth [2013] FCA 870Parties: / PANASIA ALUMINIUM (CHINA) LIMITED and OPAL (MACAO COMMERCIAL OFFSHORE) LIMITED v ATTORNEY-GENERAL OF THE COMMONWEALTH and CAPRAL LIMITED (INTERVENER)
File number: / NSD 1653 of 2011
Parties: / TAI SHAN CITY KAM KIU ALUMINIUM EXTRUSION CO LIMITED and KAM KIU ALUMINIUM PRODUCTS SDN BHD and KAM KIU (AUSTRALIA) PTY LIMITED v ATTORNEY-GENERAL OF THE COMMONWEALTH and TRADE MEASURES REVIEW OFFICER and CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS AND BORDER PROTECTION SERVICE and CAPRAL LIMITED (INTERVENER)
File number: / NSD 1869 of 2011
Judge: / NICHOLAS J
Date of judgment: / 30 August 2013
Catchwords: / ADMINISTRATIVE LAW – Part XVB Customs Act 1901 (Cth) (Act) – anti-dumping measures – countervailable subsidy – aluminium extrusions exported from China to Australia by State-owned suppliers – whether supplier “public body” within the meaning of that term as used in definition of “subsidy” – consideration of Agreement on Subsidies and Countervailing Measures (SCM Agreement) – whether decision-maker misinterpreted or misapplied definition of “public body” as used in Act – whether decision-maker misinterpreted or misapplied World Trade Organization (WTO) Appellate Body jurisprudence on meaning of “public body” in SCM Agreement.
ADMINISTRATIVE LAW – Part XVB of Act – anti-dumping measures – where goods under consideration (GUC) consist of range of aluminium extrusions having different finishes – where decision-maker makes declarations pursuant to subss269TG(1) and (2) and subss269TJ(1) and (2) in respect of GUC – whether open to decision-maker to specify different variable factors in respect of different types of GUC pursuant to subs269TG(3) and subs269TJ(11) – consideration of statutory scheme in relation to determination of dumping margins – applicability of subs33(3A) of Acts Interpretation Act 1901 (Cth) to ss269TG and 269TJ – imposition of anti-dumping measures on consolidated or differentiated basis – whether imposition on differentiated basis permissible – relevance of WTO agreements – General Agreement on Tariffs and Trade 1994 – Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 – consideration of WTO Appellate Body jurisprudence on “zeroing”.
ADMINISTRATIVE LAW – Part XVB of Act – public notices published pursuant to subss269ZZI(2) and 269ZZL(2)(b) – consequences of non-compliance with subss269ZZI(2) or 269ZZL(2)(b) – whether any review by TMRO or reinvestigation by CEO or subsequent decision by Minister under s269ZZM liable to be set aside due to such non-compliance – whether non-compliance gave rise to denial of procedural fairness.
ADMINISTRATIVE LAW – Part XVB of Act – words and phrases – normal value – export price – non-injurious price – dumping margin – like goods – competitive market costs – for less than adequate remuneration.
Legislation: / Acts Interpretation Act 1901 (Cth), s33
Administrative Decisions (Judicial Review) Act 1977 (Cth), s11
Customs Act 1901 (Cth), ss 269T, 269TAAC, 269TAAD, 269TAA, 269TAB, 269TAC, 269TACA, 269TACB, 269TACC, 269TAE, 269TAF, 269TB, 269TEA, 269TG, 269TJ, 269TL,269ZZI, 269ZZK, 269ZZL, 269ZZM
Customs Regulations 1926 (Cth), reg 180
Customs Tariff (Anti-Dumping) Act 1975 (Cth) ss8, 10
Trade Practices Act 1975 (Cth), s46
Cases cited: / Al Abdullatif Industrial Group Co Ltd v Minister for Justice and Customs [2000] FCA 758
Australian Finance Direct Limited v Director of Consumer Affairs Victoria (2007) 234 CLR 96
Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374
ChuKheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1
Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation(1981) 147 CLR 297
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
Minister for Immigration and Citizenship v SZIAI (2009) 259 ALR 429
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323
Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273
Pilkington (Australia) Ltd v Minister for Justice and Customs (2002) 127 FCR 92
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Re Queensland Cooperative Milling Association Ltd;
Re Defiance Holdings Ltd (1976) 25 FLR 169
Seven Network Ltd v News Ltd (2009) 182 FCR 160
Date of hearing: / 14 and 15 May 2012
Place: / Sydney
Division: / GENERAL DIVISION
Category: / Catchwords
Number of paragraphs: / 176
Counsel for the Applicants in Proceeding NSD 1653 of 2011: / Mr N Williams SC and Mr M Izzo
Solicitor for the Applicants in Proceeding NSD 1653 of 2011: / Minter Ellison
Counsel for the Applicants in Proceeding NSD 1869 of 2011: / Mr MRSpeakmanSC and Mr JD Smith
Solicitor for the Applicants in Proceeding NSD 1869 of 2011: / Corrs Chambers Westgarth
Counsel for the Respondents: / Mr G KennettSC and Mr D Thomas
Solicitor for the Respondents: / Australian Government Solicitor
Counsel for the Intervener: / Mr SB Lloyd SC and Ms AM Mitchelmore
Solicitor for the Intervener: / Clayton Utz
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IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALESDISTRICT REGISTRY
GENERAL DIVISION / NSD 1653 of 2011
BETWEEN: / PANASIA ALUMINIUM (CHINA) LIMITED
First Applicant
OPAL (MACAO COMMERCIAL OFFSHORE) LIMITED
Second Applicant
AND: / ATTORNEY-GENERAL OF THE COMMONWEALTH
Respondent
AND: / CAPRAL LIMITED
Intervener
JUDGE: / NICHOLAS J
DATE OF ORDER: / 30 august 2013
WHERE MADE: / SYDNEY
THE COURT ORDERS THAT:
- Within 7 days the applicants are to file and serve a draft minute of the orders they contend should be made having regard to these reasons for judgment and, in particular, their success in relation to Issue G2.
- The proceeding stand over to a date to be fixed for further hearing concerning the appropriate form of orders including as to costs.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALESDISTRICT REGISTRY
GENERAL DIVISION / NSD 1869 of 2011
BETWEEN: / TAI SHAN CITY KAM KIU ALUMINIUM EXTRUSION CO LIMITED
First Applicant
KAM KIU ALUMINIUM PRODUCTS SDN BHD
Second Applicant
KAM KIU (AUSTRALIA) PTY LIMITED
Third Applicant
AND: / ATTORNEY-GENERAL OF THE COMMONWEALTH
First Respondent
TRADE MEASURES REVIEW OFFICER
Second Respondent
CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS AND BORDER PROTECTION SERVICE
Third Respondent
AND: / CAPRAL LIMITED
Intervener
JUDGE: / NICHOLAS J
DATE OF ORDER: / 30 august 2013
WHERE MADE: / SYDNEY
THE COURT ORDERS THAT:
- Within 7 days the applicants are to file and serve a draft minute of the orders they contend should be made having regard to these reasons for judgment and, in particular, their success in relation to Issue G2.
- The proceeding stand over to a date to be fixed for further hearing concerning the appropriate form of orders including as to costs.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION / NSD 1653 of 2011
BETWEEN: / PANASIA ALUMINIUM (CHINA) LIMITED
First Applicant
OPAL (MACAO COMMERCIAL OFFSHORE) LIMITED
Second Applicant
AND: / ATTORNEY-GENERAL OF THE COMMONWEALTH
Respondent
and: / CAPRAL LIMITED
Intervener
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALESDISTRICT REGISTRY
GENERAL DIVISION / NSD 1869 of 2011
BETWEEN: / TAI SHAN CITY KAM KIU ALUMINIUM EXTRUSION CO LIMITED
First Applicant
KAM KIU ALUMINIUM PRODUCTS SDN BHD
Second Applicant
KAM KIU (AUSTRALIA) PTY LIMITED
Third Applicant
AND: / ATTORNEY-GENERAL OF THE COMMONWEALTH
First Respondent
TRADE MEASURES REVIEW OFFICER
Second Respondent
CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS AND BORDER PROTECTION SERVICE
Third Respondent
AND: / CAPRAL LIMITED
Intervener
JUDGE: / NICHOLAS J
DATE: / 30 august 2013
PLACE: / SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
1There are two proceedings before me which have been heard together. The applicants in each proceeding challenge the validity of various decisions made by the Attorney-General of the Commonwealth (theAttorney) and other officers of the Commonwealth under the provisions of Part XVB of the Customs Act 1901 (Cth) (the Act).
2The first proceeding is brought by Panasia Aluminium (China) Limited and a related company (collectively referred to as Panasia) against the Attorney.
3The second proceeding is brought by Tai Shan City KamKiu Aluminium Extrusion Co Limited and two related companies (collectively KamKiu) against the Attorney, the Trade Measures Review Officer (theTMRO) and the Chief Executive Officer of the Australian Customs and Border Protection Service (the CEO).
4The decisions the subject of both proceedings relate to the alleged dumping of goods consisting of aluminium extrusions with a variety of finishes exported to Australia from the People’s Republic of China (China) and anti-dumping measures taken with respect to such goods.
5The relief sought by Panasia and KamKiu include orders setting aside a decision of the Attorney made on 23 August 2011 pursuant to s269ZZM of the Act. By that decision the Attorney affirmed his earlier decision of 21 October 2010 (published on 28 October 2010) to publish dumping and countervailing duty notices, but also varied those notices in some significant respects.
6Capral Ltd (Capral) is a company that carries on business in Australia manufacturing and supplying aluminium extrusions. Capral was granted leave to intervene in both proceedings. It appeared at the hearing, and made oral and written submissions which, for the most part, adopted those made by the respondents.
LEGISLATIVE BACKGROUND
7There are a number of interrelated international agreements by which Australia, a member of the World Trade Organization (WTO), is bound that are referred to in Part XVB of the Act. These are:
- the World Trade Organization Agreement establishing the World Trade Organization done at Marrakesh on 15 April 1994 (the WTO Agreement);
- the General Agreement on Tariffs and Trade 1994 (GATT 1994);
- the Agreement on Subsidies and Countervailing Measures (the SCM Agreement);
- the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Anti-Dumping Agreement).
As will be seen, various arguments presented in these proceedings drew for support from decisions of the WTO Appellate Body concerned with the interpretation of both the SCM Agreement and the Anti-Dumping Agreement.
8There were significant amendments made to Pt XVB of the Act in 1994 and 1998 to bring Australia’s laws with respect to dumping into conformity with Australia’s international obligations under GATT 1994, the SCM Agreement and the Anti-Dumping Agreement. The legislative background to these changes is discussed in some detail by the Full Court in Pilkington (Australia) Ltd v Minister for Justice and Customs (2002) 127 FCR 92 (Mansfield, Conti and Allsop JJ) at [19]-[28] and I will not repeat that discussion here.
9The provisions of PtXVB of the Act are technical and complex. They must be interpreted in accordance with the settled principles of statutory construction. As always, the interpretative task begins with a consideration of the terms of the relevant legislation (Australian Finance Direct Limited v Director of Consumer Affairs Victoria (2007) 234 CLR 96 at [34] per Kirby J). Recourse to the international agreements will only be of assistance in resolving the questions of construction in this case where the relevant provisions are ambiguous, and where the international agreements may assist in resolving the ambiguity (see, for example, ChuKheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 38 per Brennan, Deane and Dawson JJ; Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 286-287 per Mason CJ and DeaneJ).
10Nevertheless, to better understand some of the basic concepts and principles upon which PtXVB is based it is useful to refer to some of the key provisions of the relevant international agreements.
11Article VI(1)-(2) of GATT 1994 provides:
(1)The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one country to another
(a)is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,
(b)in the absence of such domestic price, is less than either
(i)the highest comparable price for the like product for export to any third country in the ordinary course of trade, or
(ii)the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit.
Due allowance shall be made in each case for differences in conditions and terms of sale, for differences in taxation, and for other differences affecting price comparability.*
(2)In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product. For the purposes of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1.*
[The asterisks call up supplementary provisions which may be ignored for present purposes.]
12As is apparent from ArtVI(1), there are two principal elements to dumping. First, the products of one country must be introduced into another country at less than normal value. Secondly, the introduction of such products at less than normal value must cause or threaten material injury to a domestic industry or retard the development of such an industry. So far as the latter element is concerned, ArtVI(6)(a) of GATT 1994 provides:
No contracting party shall levy any anti-dumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry.
13The Anti-Dumping Agreement specifies in greater detail the circumstances in which an anti-dumping measure may be applied. Article 2.1 provides:
For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.
Article 2.4 provides “[a] fair comparison shall be made between the export price and the normal value” and also explains how such a comparison should be undertaken. Article 2.6 defines “like product” as follows:
Throughout this Agreement the term “like product” (“produitsimilaire”) shall be interpreted to mean a product which is identical, i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.
Article 9.1 provides:
The decision whether or not to impose an anti-dumping duty in cases where all requirements for the imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the importing Member. It is desirable that the imposition be permissive in the territory of all Members, and that the duty be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry.
Article 9.3 then provides (inter alia) that “[t]he amount of anti-dumping duty shall not exceed the margin of dumping as established under Article 2.”
14Part XVB of the Act contains an elaborate set of provisions which regulate the imposition of dumping duties including various provisions concerned with the determination of export price (s269TAB), normal value (s269TAC), “the non-injurious price of goods” (s269TACA) (these being the three values referred to in the Act as the “variable factors”) and dumping margins (s269TACB). Other provisions of Part XVB of the Act that may be relevant for the purposes of determining the variable factors and, ultimately, dumping margins, include s269TAAD (ordinary course of trade) and s269TAA (arms length transactions).
15Section 269TACB is a central provision which establishes how the variable factors, once ascertained in accordance with other relevant provisions of the Act, are to be used in determining whether dumping has occurred. Section269TG is the provision of the Act that permits the Minister to impose dumping duty by the publication of a dumping duty notice if dumping has occurred. However, the circumstances in which the Minister may impose dumping duty are closely confined by the terms of the section and related provisions including, in particular, s269TAE (material injury to industry).
16Turning to countervailing subsidies, ArtVI(3) of GATT 1994 provides:
No countervailing duty shall be levied on any product of the territory of any contracting party imported into the territory of another contracting party in excess of an amount equal to the estimated bounty or subsidy determined to have been granted, directly or indirectly, on the manufacture, production or export of such product in the country of origin or exportation, including any special subsidy to the transportation of a particular product. The term “countervailing duty” shall be understood to mean a special duty levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or indirectly, upon the manufacture, production or export of any merchandise.*
17The SCM Agreement contains more detailed provisions regulating the imposition of countervailing duties. Article 1 of the SCM Agreement provides that a subsidy shall be deemed to exist in various situations including, most relevantly, if there is a “financial contribution by a government or any public body within the territory of a [WTO] Member” and “a benefit is thereby conferred.”
18The word “subsidy” is defined in s269T of the Act and the expression “countervailable subsidy” in s269TAAC. I will say more about these definitions and related provisions later in these reasons when considering the specific issues which arise for determination.
19Section 269TJ permits the Minister to impose countervailable duty where he or she is satisfied that a countervailable subsidy has been received and, because of that, material injury to an Australian industry producing like goods has been caused or is threatened or the establishment of an Australian industry producing such goods has been or may be materially hindered. The Minister does this by the publication of a countervailing duty notice.
FACTUAL BACKGROUND
20On 11 May 2009 Capral lodged an application under s269TB of the Act requesting that dumping duty and countervailing duty notices be published in respect of certain aluminium extrusions exported to Australia from China. In response, the Australian Customs and Border Protection Service (Customs) undertook an investigation that culminated in the provision by the CEO to the Attorney of a report entitled “Report to the Minister No148 – Certain aluminium extrusions exported to Australia from the People’s Republic of China” (Report148). The investigation period was from 1 July 2008 to 30 June 2009.