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FEDERAL COURT OF AUSTRALIA
Nordland Papier AG v AntiDumping Authority [1999] FCA 10
CUSTOMS AND EXCISE – antidumping – application to review decision of Minister, on recommendation of AntiDumping Authority, to publish dumping duty notices in respect of coated paper exported to Australia – ascertainment of “normal value” of goods – whether applicant’s domestic sales were arms length transactions – whether a rebate such as a volume rebate may be regarded as a reimbursement, compensation or benefit for, or in respect of, the whole or any part of the price – rebate compared to discount
STATUTORY INTERPRETATION – effect of international instruments such as GATT on construction of statute – whether legislative amendments are reliable indicators of parliamentary intent at time of original enactment
WORDS AND PHRASES – “normal value”, “arms length transactions”, “rebate”, “price”, “in respect of”, “reimbursement”
Customs Act 1901 (Cth), ss269TAA, 269TAB, 269TAC, 269TB, 269TD, 269TG
Administrative Decisions (Judicial Review) Act 1977 (Cth), s11(1)(c) and s13
Customs Legislation (Antidumping Amendments) Act 1998 (Cth), s22 and s25
Toyota Motor Sales Australia Ltd v Collector of Customs (1991) 28 FCR 27 at 29 cited
Queensland Independent Wholesalers Ltd v Commissioner of Taxation (1991) 29 FCR 312 cited
Hyundai Automotive Distributors Australia Pty Ltd v Chief Executive Officer Australian Customs Service [1998] FCA 297 cited
Colgate Palmolive Pty Ltd v Commissioner of Taxation (1998) 98 ATC 4748 applied
Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110 at 111 cited
Powers v Maher (1959) 103 CLR 478 at 484, 485 cited
State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412 at 416 cited
Frost v Collector of Customs (1985) 9 FCR 174 cited
ICI Australia Operations Pty Ltd v Fraser (1991) 34 FCR 564 at 569, 570 cited
Rocklea Spinning Mills Pty Ltd v AntiDumping Authority (1995) 56 FCR 406 at 417 cited
North Sydney Municipal Council v PD Mayoh Pty Ltd (1988) 14 NSWLR 740 at 745 cited
L Vogel & Son Pty Ltd v Anderson (1968) 120 CLR 157 at 162, 169 cited
Kalwy v Secretary, Department of Social Security (1992) 38 FCR 295 at 299 cited
Grain Elevators Board of Victoria v Shire of Dunmunkle (1946) 73 CLR 70 at 86 referred to
Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 382 cited
Re Samuel [1913] AC 514 at 526 referred to
Callow v Commissioner of Taxation (1997) 73 FCR 421 at 426 cited
NORDLAND PAPIER AG v THE ANTI-DUMPING AUTHORITY AND THE MINISTER OF STATE FOR CUSTOMS AND CONSUMER AFFAIRS AND AUSTRALIAN PAPER LIMITED
NG 787 of 1998
LEHANE J
14 JANUARY 1999
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALES DISTRICT REGISTRY / NG 787 of 1998
BETWEEN: / NORDLAND PAPIER AG
Applicant
AND: / THE ANTI-DUMPING AUTHORITY
First Respondent
THE MINISTER OF STATE FOR CUSTOMS AND CONSUMER AFFAIRS
Second Respondent
AUSTRALIAN PAPER LIMITED
Third Respondent
JUDGE: / LEHANE J
DATE OF ORDER: / 14 JANUARY 1999
WHERE MADE: / SYDNEY
THE COURT ORDERS THAT:
1. Within fourteen days of delivery of this judgment, the applicant file and serve short minutes of orders appropriate to give effect to these reasons.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIANEW SOUTH WALES DISTRICT REGISTRY / NG 787 of 1998
BETWEEN: / NORDLAND PAPIER AG
Applicant
AND: / THE ANTI-DUMPING AUTHORITY
First Respondent
THE MINISTER OF STATE FOR CUSTOMS AND CONSUMER AFFAIRS
Second Respondent
AUSTRALIAN PAPER LIMITED
Third Respondent
JUDGE: / LEHANE J
DATE: / 14 JANUARY 1999
PLACE: / SYDNEY
REASONS FOR JUDGMENT
1 This is an application for review of two decisions. One is a decision of the first respondent (the Authority) constituted by its Report No.185 dated March 1998 (the Report), in so far as the Report contained findings and recommendations in respect of goods exported to Australia from Germany by the applicant (Nordland). The other is the decision (or decisions) of the second respondent, the Minister, made on or about 1 May 1998, to accept and adopt the findings and recommendations of the Authority in the Report in respect of those goods and to publish, in relation to them, dumping duty notices under s269TG(1) and (2) of the Customs Act 1901 (Cth). Nordland seeks orders setting aside each decision and remitting the subject matter of each to the Authority and the Minister, respectively, for determination according to law.
2 In relation to the Authority’s decision, Nordland also seeks an order (presumably under s11(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth)) extending the time for filing the application for review to 3August 1998, the day on which the application commencing this proceeding was filed. It may be said immediately that no argument was directed to the application for that order, and the evidence and submissions proceeded on the basis that the Court would deal with the substantive grounds on which Nordland attacks the decisions. I see no reason why time should not be extended and an order extending it, as sought, will be made.
3 A statement of reasons delivered by the Minister, under s13 of the Administrative Decisions (Judicial Review) Act and dated 3 July 1998, makes it clear that the Minister’s decision was based upon an acceptance and adoption of the Authority’s recommendation. Argument proceeded on the basis (which I think is correct) that if the decision of the Authority is to be set aside, the Minister’s decision must be set aside likewise.
Facts; impugned decisions
4 The facts may be stated sufficiently for present purposes largely by reference to allegations in Nordland’s amended statement of claim filed on 27August 1998 admitted by the first and second respondents.
5 Nordland is a German corporation. For some years it has exported coated paper to Australia from Germany. The third respondent (Australian Paper) is an Australian company which manufactures coated paper. On 19 July 1997 Australian Paper lodged an application under s269TB(1) of the Customs Act requesting that the Minister publish dumping duty notices in respect of certain coated paper exported to Australia from countries including Germany. On 20November 1997 the Chief Executive Officer of Customs (Customs) made a preliminary finding under s269TD(2) of the Customs Act that there were sufficient grounds for the publication of dumping duty notices in respect of goods exported to Australia from Germany by Nordland.
6 On 1December 1997, Customs referred to the Authority, under s296TD(2)(b) of the Customs Act, the question whether publication of the notices sought by Australian Paper, in respect of goods exported to Australia by Nordland, was justified. On 31 March 1998 the Authority delivered the Report to the Minister. The Authority found that:
(a) goods exported to Australia from Germany by Nordland had been dumped;
(b) the Australian industry producing coated paper had suffered material injury caused by dumping;
(c) future exports of goods by Nordland to Australia from Germany might be dumped; and
(d) there was a threat of material injury to the Australian industry producing coated paper from future exports of goods by Nordland from Germany to Australia.
7 The Authority recommended that the Minister:
(a) publish a dumping duty notice under s269TG(1) of the Customs Act in respect of goods already exported to Australia from Germany by Nordland; and
(b) publish a dumping duty notice under s269TG(2) of the Customs Act in respect of goods to be exported to Australia from Germany by Nordland.
8 Those findings and recommendations comprise the decision of the Authority of which Nordland seeks review. The Minister’s decision to accept and adopt the findings, and to publish the dumping duty notices recommended, was made on 1May 1998 and is the decision of the Minister of which Nordland seeks review.
9 Dumping duty notices were published on 4May 1998.
10 A finding of dumping and the imposition of dumping duties require (Customs Act, s269TG) a comparison between the “export price” of goods exported to Australia and their “normal value”. Those terms are defined in s269TAB and s269TAC, respectively. The grounds on which Nordland attacks the decisions of the Authority and the Minister relate particularly to the way in which the Authority ascertained the “normal value” of the goods exported by Nordland to Australia.
11 Section 269TAC relevantly provides:
“269TAC.(1) Subject to this section, for the purposes of this Part, the normal value of any goods exported to Australia is 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.
…
(8) Where the normal value of goods exported to Australia is the price paid for like goods and that price and the export price of the goods exported:
(a) relate to sales occurring at different times; or
(b) are not in respect of identical goods; or
(c) are modified in different ways by taxes or the terms or circumstances of the sales to which they relate;
that price paid for like goods is to be taken to be that price paid adjusted in accordance with directions by the Minister so that those differences would not affect its comparison with that export price.”
12 It is sufficient to say of the subsections immediately following subs(1) that they provide a regime in accordance with which normal value may be determined by the Minister in various circumstances in which the Minister is satisfied that it is not possible, or practicable, to apply subs(1).
13 In this case the Authority, in its Report, concluded that Nordland’s own domestic sales could not be used for the purpose of ascertaining “normal value” because its domestic sales were not “arms length transactions”; that was so, in turn, because the sales were made under arrangements which included the payment of volume rebates by Nordland to buyers of its products. That reasoning, Nordland says, involves an error of law and that error is one of the bases on which the decisions of the Authority and the Minister are attacked.
14 Having excluded Nordland’s own domestic sales from consideration, the Authority proceeded to the next step required by s269TAC. It found “normal value” to be the price paid for like goods sold domestically by another seller, Hannover Papier AG (Hannover), subject to some adjustments under subs(8). The Authority’s use of the Hannover sales was, Nordland submitted, vitiated by two errors. One was that the Authority failed to investigate the effect on price of differences (as between Nordland and Hannover) in the volume and frequency of sales. Failure to do so amounted to an error of law (failure to consider, or misapplication of, s269TAC(2)(a)(ii) and s269TAC(2)(b) of the Customs Act), Wednesbury unreasonableness and a failure to take into account relevant considerations.
15 Secondly, it was said that the Authority had misapplied the legislation, and had acted unreasonably in the Wednesbury sense, in adopting in substance the following chain of reasoning. The Hannover sales were relatively infrequent and involved relatively small quantities; those circumstances merited adjustments in accordance with s269TAC(8); on the basis of the available information, the Authority was, however, unable to quantify the effect, if any, on prices of the differences in frequency and quantities of sales; nevertheless, the Hannover sales were an appropriate reference point for the ascertainment of normal value.
16 Other attacks were made in the amended statement of claim upon the way in which the Authority reached its conclusions, but in the end counsel for Nordland pressed only those which I have just described.
Normal value; arms length transactions
17 The only domestic sales which may be used to ascertain normal value are sales “that are arms length transactions” (s269TAC(1)). Section 269TAA(1), though it does not define the expression “arms length transactions”, provides that certain sales and purchases are not to be treated as arms length transactions:
“269TAA.(1) For the purposes of this Part, a purchase or sale of goods shall not be treated as an arms length transaction if:
(a) there is any consideration payable for or in respect of the goods other than their price; or
(b) the price is influenced by a commercial or other relationship between the buyer, or an associate of the buyer, and the seller, or an associate of the seller; or
(c) in the opinion of the Minister the buyer, or an associate of the buyer, will, directly or indirectly, be reimbursed, be compensated or otherwise receive a benefit for, or in respect of, the whole or any part of the price.”
18 The other subsections of s269TAA elaborate subs(1) in certain respects, notably by providing, in subs(4), an exhaustive definition of “associate”, but a decision in this case does not require consideration of any of the elaborations.
19 In the ordinary sense of the term, a transaction of a kind described in any of the paragraphs of s269TAA(1) might, or might not, be an arms length transaction. Even paragraph (b), which comes closest to the ordinary concept of “arms length transaction”, is not, I think, an exception: the fact that there is a commercial relationship between buyer and seller which influences price does not necessarily result in the purchase or sale being other than an arms length transaction in the ordinary sense. However that may be, the effect of each of the three paragraphs is that, for the purpose of ascertaining normal value, any sale or purchase described by any of the three paragraphs of subs(1) is deemed not to be an arms length transaction.
20 The controversy in this case concerns par(c). The Authority proceeded (and thus the Minister proceeded also) on the understanding that par(c) had the result that if sales were made on terms, or subject to an understanding, that the buyer would receive payment of a rebate (calculated, for example, by reference to quantities of goods purchased over a period) the sales were not arms length transactions. That was so because such a rebate, unlike a discount (the commercial effect of which was similar – perhaps indistinguishable), involved a repayment by seller to buyer of a proportion of the price already paid by the buyer for goods previously bought: even if the repayment was effected by offset against the price of goods bought later. Such a repayment, however effected, was a reimbursement: a reimbursement of part of the price paid; or, if not strictly to be regarded as a reimbursement of “part of the price”, nevertheless it was a reimbursement relating to the price and thus “in respect of” the price. Because Nordland’s sales to domestic customers were made on a basis which allowed the purchaser a volume rebate (of the kind I have described) the result was that its domestic sales could not be regarded as arms length transactions and, therefore, could not be used in order to ascertain normal value.