CATCHWORDS Customs and Excise - customs duties - appeal from Administrative Appeals Tribunal - importation of vehicles having the characteristics of tractors - whether vehicles "tractors" as defined in Tariff - if so, whether they were derivatives of "agricultural tractors" as defined therein - whether it was open to the Tribunal as the tribunal of fact to conclude that the vehicles were "lifting machinery" within the Tariff - consideration of the question of whether the vehicles were imported in an incomplete or unfinished state and, if so, had the essential character of lifting machinery - observations on what amounts to a question of law and the circumstances in which the Court will interfere with the decision of an adminis- trative tribunal whose decisions on questions of fact are final - Customs Tariff 1966, paragraphs 84,.23.311 and 84,22.521 of Part II of first schedule, interpret- ative rule 2(1)(a) and notes 2 and 7 to Chapter 87 of Part II of first schedule. Blackwood Hodge (Australia) Pty. Limited v. The Collector of Customs, New South Wales No. NSW G4 of 1980 CORAM: Smithers, Fisher and Sheppard JJ. Date: 22 August, 1980 Sydney. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G4 of 1980 GENERAL DIVISION Between: BLACKWOOD HODGE (AUSTRALIA) PTY. LIMITED Applicant - and - THE COLLECTOR OF CUSTOMS, NEW SOUTH WALES Respondent ORDER JUDGES MAKING ORDER Smithers, Fisher and Sheppard JJ. DATE OF ORDER 22 August, 1980 WHERE MADE Sydney THE COURT ORDERS THAT : 1. The appeal be dismissed. 2. The decisions of the Administrative Appeals Tribunal of 24 December, 1979, be affirmed. 3. The applicant pay to the respondent his costs of the appeal. 1N THE PORFRAL CCUFT OF ACSTRALT? ) Wal) SOUTH WKALTS DISTRICT RESICTFY ) "o. G4 of 1989 GENEPAL CDIVISTON ) BETWEFM: RLACKUCOD HORcr (PUSTPYLTAS) FTY. -itl Appellant Pospondent CGFA'i: Smathers, Fisher and Sheppsrd JJ. Aa _Avarst 198 REASCHS POR JURCHENT SMITHERS J.: In this matter T have had the advantage of rez2ine the reasons of my brother Shtppard snd FF take the praviless cf referring to and adopting his statement of the cireprstancts in which th: cppeal is brought, th2 relevent Tariff previsic.s ir% the besic facts. I woule eeree with him ar big views of t™ burdens carriec by the apnelicrt to surcpert ats ercsel. Ihe Administrative Appecle risers) docwed thet tne vonliie: in question fall within the relevant wmrovisiors of sub-paregracs @4.22.251 of the Tariff as interpreted by reference to Teriff rul: 2(1) (a) applicable to Chapter 84 of the Tariff, as "lifting, handling, loading or unloading machinery imported in an incomplete state but having the essential character of goocs cf thet kind." In this appeal the appellant contends in the first instance that the Tribunal] erred in law in mekina the decisions refrrred to above. An appeal of this kind from the Administrative Aapperls Tribunal lies orly on 2 cvestion of law. Accorcirgly in or@er to succeed in its appeal the appellant must dGetenstrate that on no basis could the Tribunal have made the findirgs vucon which its decision was based. + In resrect of trese findings I would rcpeat tha passage in the judgment of Sheppard J. in the followin: terms:- "In the condition in which the vehicles were imported they were plainly not telphers nor conveyers. Nor, upon the uncontradicted gesecrictison of the vehicles in Nr. Wood's evidene> earlier recounted, does it readily occur to ono that thoy are properly Cescribeé, in the condition in which they came into this ccuntry, 2s lifting, haralinc, loading snd unloading machinery. Jn their candition upon importation they could net ke uged fer any of those purposes. The Tribunal itself w3s of thrt view. It was able to reach the cenclusior trat tha vehicles were within the parzyr2rh only by reason cf the overation it considered intareretstiv2 rule 2(1) (7) to have." The basis for that conclusion 1s set out in the follewirg paragraph of the Tribunal's reasons. "The findings s2t out above end cur descripticn of the units meke it clear that the machine hag been designed for th2 vovrros2 of adding various implements or eccessories to carry out a wide variety cf furctiors. The units are clearly used with many @ifferent accessories attached carryirg out the many functions which they were constructed to perform. We egree with the subrissyon thet the modifications performed by the supplicr upon the "skid units' rurchrsed fror 'International Harvester'. and 'Fore Tractor Division' reveal thst the imported machines, although incomplete, have been committed to beirg completed so as to be able to perform the functions specified withir item &4,22 ané were sufficiently complete to be identified as belonging to the classification in auestion. It is clesr that the importcad units have been adapted to accept a mast and ferkrs for lifting. Also the attachrent of hydravlic rams indicates that the machines heve been constructed for lifting purposes. Altcagether we consider that the units, althouch incomplete and unfinished, have a chsrecter which is on the evidence sufficient te suonort the classification contended for by the Collector." I doubt that the Tribunal in that paragraph came to grips with the real tests to be applied under rule 2(1) (a). However I do not doubt that by the application of the appropriate tests the finding tht the vehicles in guestion were lifting, handlina, lorcdirg or unleadirg machinery imcorted in an aincomplcte stat? wes quetifie". It iS convenient from this pornt ta use the cxrressicn "unit", in the sangular to refer to el) the vehicles actuzlly under discussion. All cbseervations harein are eauslly eppliceable to each vehicle. Tne imported unii was clearly wmechinery of tne self-propelling tractor kind. As jt stood it was eauicnoed te pull other vehicles or implements or to act as @ vcower unit and for controlling of various items of equirment which might ke fitted to it. It had three point linkage and provisions for power take off. It had rams so placed so as to sucply hydreulic power to forklift equipment on a mast or to other eaquirment such as a dozer blade, also on a mast. tt had also what is described es 2 third hydraulic double action spool valve for use with many of tho attachments available. It covld supply vover te items such 2s pumps or other machines. It would accept as a Fitting eauipmentr such as harrows, rotators, ro2ei sweorers 46nd the like. In anticipation of its use in lifting loads it is fitted with a counter weight at what cne may cal] its rear end. Jt may well be that the counter weight is useful when the machine is cperatine with heavy equipment such as a Gever blede or road sweeper. as the unit stood on the Customs House floor it could not lift, handle, load or unload any item of goods or materials. It is to be observed that the exrression "liftirg, hord@ling, loading or unloading" cefers not to lifting or handlira cf an iter of equipment such as the road sweeper or inderd the ferk lift pret itself when fitted to the unit, but to lifting, hendlire, leatira and unicadirg goods or materiale cf sore kind by werns of that equipment, In Cheneler & Co. v. Cclicctcr cf Custeme (1907) 3 7 er ee C.L.R. 1719 at p. 1725 Griffith C.J. speakira with reference to « tariff provision concerning articles with a tariff desianetion of 'manufactures of paper for advertisirg curposes' srid that tho words 'for advertising purpeses' S8id not relate to the intention or state of mind of the importer. He added, ' such words are words of differentiaticn denoting some cuslity aprarent in thre article itself to persons who know its character and which shows that it is especially fit for the particular currose epecifies rather than any other.' It seems to me that the words "Va ftina, handlina, loading or unloading" are also words of differentiation Aonoting a auelity apparent an the article in gquestion to persens whe know its character. Accordingly the question is whether the urit standing on the Customs House foor 1s in itself, to those who know, not merely a tractor power unit useful for many pursoses including the operation of equipment which may be fittcd to 1t for the purrese of lifting goods or digging ground or driving a puwp, but itself lifting, handling, loading or unlosding moachirery. Agreesbly with the above it would seem that whether the urit satisfies the description,"lifting, handling, lceding er unlosdirg machinery imported in an incomplete stete" depends umon whether 3° importea, 1t has some quality appercnt to fersons who know 1¢6 character which shows that it is within that definition, ML. Wood, the Marketing Manager of the Wanitou divisic™ of the appellant in Australia stated in his evidence that an *ustratis the unit when complcte 3S primarily @ lifting machine. Ane it would appear from his evidence that the seme is true of thre completed unit even in France and the United Kingdom, zltheuch its use for general agricultural purposes in these countries 18 avit> extensive. However no witness statea that without tho mect the unit is litting, handling, loading or urlocding machirery, or what is more to the point, lifting, handling, losding or unlo¢dira machinery imported in an incomplete state. But the Tribunal was satisfied on the evidence to draw the conclusion that it was. I think the conclusion was justified. I do so because a person knowing the cherrcter of the unit would know that the essential character of the unit wes to serve as the mobile power plant and operating bese of tke unit when eouinped with the fork lift mast and that the whole composite entity operated as one integrated unit with interchange of hyutravlic fluid between the machine and the lifting gear of the m2st. Be would know that it is customary for the unit to be supplied Ey thr manufacturers with fork lift mast attached, end that on errival in Australia the appellent fits the mast to the unit before selling it. He would know that even for carrying out most of the operations of the unit other than lifting, hendlina lJoatirg or unloading materials the appropriate equipment is fitted to tre mast. Pe would know that the manufacturer's rare of the unit for marketing purposes was "site fork lift truck". To @ person sc informed 1t would be, in my opinion,tsrt cuzlities arporeat in the unit itself would reveal that it ves proserly deseribed as eee em apie nee ee wae lifting, handling, loading or unleadsing machinery imnorted in an incemplete state. Certainly the existence and situation of thea rams and the existence and situatien of the counter weight ané the provision to accept the mast all suggest that the machinery was constructed to receive further equipment to be viable and that, that equipment would contain lifting gear to be overated by hydraulic power supplied by the unit. Accordingly I would accept the finding of the Tribunal thet the unit is lifting, handling, loading or unloading maechirory imported in an incomplete state. But to oualify as an item within sub-para. 84.22.521 a unit which is lifting, handling, loading or unloading machinery imported in an incomplete state must have, as imported "the essential character" of goods of that kind, that is of lifting, handling loading or unloading machinery. {see Note 2(1) (a) to Chapter 84) lt appears to me that in the context of the schedule the expression "essential character" is used with respect to tre pbysical character or make-up of the article in question. When 1t 1S contemplated by the terms of the Schedule that an article may be treated as lifting machinery ever if 1t be an incomelete item of such machinery, clearly the referorce is to its physictl conditicn. When the terms of the schedule procecd te limit ths circumstances in which lifting wecbinery physically incerricts will qualify as lifting machinery, by stipulating thet the m-chirs wee on ee ee ee ee ee must have the essential charecter cf lifting machinery, it as to my mind, still referring to the physical condition of the article in question. In the abcence of the essential ferturc of 3 lifting machine, nemely basic gear by which things may be Jifted it i¢ difficult to think that the unit has the essential character of lifting machinery. "A thing mey be said to be essentinl to an ortity, if thet entity wovld not be what it is to be, or is, or was, if the part in question were wanting". (Fowler's English Usage 166] 9.189) 'It is only when it is considered as an ertity which includes the mast that this machine qualifies as liftine "achinery et all. Without the mast, aS it appears to me, it does not heve the character of a site fork lift truck. Without the mest that which is left does not have the essentie] character cf machinsry equipped for lifting, handling, losdinq or unlozd@ing materials. It is not a case, for instance, in which the unit was imported with the mast attached but inoperative because of the absence of some part, the ebsence of which @id not, from a prysical peint of view, deprive the machine of the basic elements of a meatori 1s Gr liftina mechine. Note 2(1) (a) to Chapter 84 is a saving clouse, desisned te avoid the frustration of the relevant crovisions by 2 croce"urs cf importing a whole machine less some cart possibly vitel, bat the abscnce of which does not Ceprive it, 35 eep on the floor, of tres chsarzcter, physically speeking, of a iF) [2] Oo sb "9 be iw Ay rr read a cu (e) Tr ~Pi) '4 that case the mechine can be seen te ko subst ¥ a) i) be e < le} =~ -r St ) designated kind and only prevented frer sacicfying th~ designation, namely a lifting mechine, because it is in = conditicn properly described as incomplete or unfirisn:d. But this saving provision does not apply when the essential eloment ic missing, that is, when that which 1s missing is a mejcr element relating in particular to that factor which is central to the relevant designation contained in the Tariff Schedule, namely the basic gear for performing a lifting oxveration, It is pointed out that the unit is adapted to accert = TESE and forks for lifting goods and that the attachment of the rars indicate that the unit has been censtructsed for purreses of receiving gear to permit it to lift end convey geods. Rut the rams will serve gear for raising and lowering various attachments which do not lift or convey goods. The relevant consideration 15 not whether the unit on the floor was Cesigre3 to receive othr parts, with which, when fitted,it would be able to perform lifting functions or whether it contains a good proportion of the "gear" which will contribute to lifting when the machine is complete but whether, as it stood it hed "the essertial cheracter" of lifting machinery. Certainly it had various features essertial to lilting machinery but it was incomplete in so significant a respect thot it could not be said to have the "essential choracter" of liftainsa machinery. As the mschine stocd fer assessrent of Juty 1t did ret have thet minimum of besic physical "furriture"™ wrth which te lift. For the purroses of current discussion on? is concern.d ret with the concept of the mechine complete with mast, but with the 10. machine as it stood on the floor. Tf€ it is Said that this is 3 narrow view to take of the extression "essentja] character" of lifting, handling, loading or unloading machinery I think the answer 1S that for the purpose in hand it is net merelv soma significant mechanical features which would contribute to lifting capacity that the unit was reguired to have but the essential character in a physical sense of machinery that is lifting, handling, loading or unloading machinery, nemely the besic elcments by which lifting, handling, loading or unloading are possible. * If then the Tribunal erred in holding that the unit on the floor had the essential character of a lifting mechine it is necessary to enguire-whether the error was one of law. In ry view it was. It seems clear that the Tribunal construed the vrovision of the schedule which requires that the article in question shoul have the essential character of lifting machinery as reouirins only that it should be apparent that the unit was designed and constructed to perform lifting operations if the mast or sirilor equipment be fitted thereto and that it had some sionificent physical elements of a lifting machine. But the trovisior is concerned with the physical condition cf the unit as it lay on the floor and the test is whether, as it stood, it had the essential character,namely the essential features, of liftirc nechinery. The Tribunal took a different view of the constructior cf the relevent statutory provision and was thus eble to say that the machine had the essential character of a liftine vrachine altrouch the eoer essential te enable it cerry out that function WAS missina, The ll. missing part was a major item of equipment of a large and complicated kind without which lifting was impossible and upon which, considered as a component of the machine, its very identity as a machine capable of lifting depended. A human being has a character separate from his physical components but that is not true of a site fork lift truck. In the light of the foregoing I am led to conclude that the articles in question do not satisfy the Tariff designation in sub-para. 84.22.521. I should add that aif the view expressed herein concerning sub-para. 84.22.52 of the Tariff had commended itself to a majority of the Court a question would have arisen as to whether the matter should be placed in the list for argument on the point. It was more or less passed over at hearing. I turn therefore to Tariff para.87.01.31. The appellant contends that the unit is to be regarded for tariff purposes as a wheeled tractor, that is, derivative of agricultural tractors within the scope of that item. To qualify as a tractor at all, for this purpose, it must, in accordance with note 2 to Chapter 87 of the Tariff appear that the unit is "a vehicle constructed essentially for hauling or pushing another vehicle, appliance or load." To qualify ultimately as a vehicle within the scope of para.87.0i1.31 it must appear that not only is it to be regarded as a tractor but as a wheeled tractor being a derivative of agricultural tractors. The Tribunal was prepared to assume but not to decide that the unit was to be regarded as a wheeled tractor, but took the view that it could not be regarded as a derivative of an agricultural tractor. However, to have made a decision in favour of the appellant on this issue it would hzve been necessary for the ?ribunal to have made a finding that the unit was constructed 12. essentially for hauling or pushing another vehicle, appliance or load. \ In this connection, it appears to me, that the essential question was, what purrose was 1t by reference to which the fora of construction was determined? If one cen identify that purpose one can then say.for what.it was essentially that the unit was constructed. It is a question therefore, whether either hauling or pushing or both, were in the approrriate sense, the purrose or purposes to which essentially, the form of censtruction as edevoted by the manufacturer was directed. In relation to that question it 1s approrriate, I think, to consider the ultimate purposes for which the unit was constructed, that is the purposes of the unit as a whole with the fork lift mast fitted to it. To decide the critical question, "hauling" must be defined. There is no difficulty about pushira. The Tribunal referred to the defintion in the Randor House Dictionary of the English Language in which the following neenings of "hauling" appear, namely, "to pull or draw with force, move by drawina, drag," "to cart or transoort, carry," "to do carting or transport, or move freight commercially". The Shorter Oxford Dictionery with resecect to the verb "to houl" supgiies meanings including, "to pull or drag with force" end "to trenscort by cart or other conveyance.' ore ee ee eee 13. The New Oxford Dictionary defincs "hauline" as "the action of pulling, dragging or traction". ""Haulier" is defined as, "a man employed in hauling something e.g. coal in a mine." . Although it is true that "hauling" js sometimes applied te the movement of goods by truck such use of the word is, I think, a somewhat strained one. Normally in the concert of hauling there is the notion of pulling. Thus one hauls logs from the forest. And one finds the word "hauling" us2d as the converse of "pushing". One cannot ignore the logical notion thet "houling" was preferred to "pulling" merely to incorporate those aspects of pulling which are usually called havlirg, rather than to expand the meaning of hauling to comprehend the tyne of cartage cerforre?d by a fork lift truck. And this is so even althcugh the unit is capable of handling and carrying short lengths of logs. It seems beyond doubt that essentially, the form of construction of the unit has been determined by reference to the function of lifting and carrying loads of goods and materials on rough grovnd. To this purpose it owes its strengthened chassis, its counter weight, certain of its hydraulic equipment, the design of 1ts wheels, the reversing of the seat and its adaption te accett the fork litt mast. It 1s true of course that the unit 1s constructed to heul and push. But the reason that the unit 1s constructed in the Fern it is, is not to be found in the purpose that it verforms thors functions, but that it performs es a fork lift truck. 14. In the course of time the agriculturel tractor which was a vehicle to do the work of a horse has had so much power built into it that it can, in effect, perform as a sinale entity the work of a horse, dray, lorry and crane. And it is adapting the tractor to perform the functions of.dray, lorry and crane, and indeed adding digging and similar functions, that has determined the forr of construction of the unit. Accerdingly, it is my view that if the Tribunal haZ found it necessary to decide whether the unit was constructed essentially for hauling or pushing, it would have been concelled to decide in the negative. This-is sufficient to dispose of the contenticn that the unit falls within Tariff para.37.01.31. But as this opinion is merely my own, I feel I should indicate wy views ir respect of the remaining matter of contention. The Tribunel rejected the submission that the unit falls within Teriff para 87.01.31 on the grounds that it was not a @4erivative of agricultural tractors. However, I am not satisfied that this was a sound ground. It is a little difficult to decide whether in reletion to wheeled tractors the words of differentiation contained in the text of paragraph 87.01.31, nemely "egricultureal wheeled trrctere and other wheeled trectors thet ore Jerivatives of zarieulteurcl trectors" 1s to be read distinctively co that with respect ta any Particular unit the last word, ""trecters" shovld be read as Orn = eee ee - -- 15. "tractor", or whether the reauirerent is sitely that the urit should be a derivative ofagricultural tractors as a class. To av t mind a thing is a derivative of anether thing when it can be said of the thing in question that its condition or mike-up is the result of a process in which it can be seen that from the origins] thing there was a development or series of develormants in circumstances that in a material way each development owed something to the nature and quality in the first instance of tha origin2}l and thereafter of each preceding thing. According to Note 7 to Chapter 87 of the Tariff an agricultural tractor is a two-wheel drive tractor of = kind used solely or principally in agriculture, horticulture or viticulturc. According to the dictionary, or perhaps,more specifically, the Encyclopaedia Britannica an agricultural tractor is-a vahicle of the same kind. A reference to derivatives of aqricultursl tractors would seem therefore to refer to derivatives of units which were two-wheel drive tractors of a kind used solely or Principally in agriculture, horticulture and viticulture with some kind of wotor or engine operating to drive the wheels by belt or chain or otherwise. If therefore the relevent words in para, 7.01.31 of the Tariff recuire derivation from the class of vehicies known ct Gefined as agricultural tractors, the reeulting encuiry is whether the unit ain question is derived fror tht simple clsss of vebicls. Change and development is of the essence in the process cf Rte eee ee eee oF 16. derivation. Derivation to my mind has 4a wide connotation. Tt encompasses development with substantial changes over time. And it seems to me to be no error to refer to the sleek modern limousine as something derived from thoce rotor cars which carried Grivers and passengers in the days of Fdward VII. Similarly, I would have little difficulty in identifying the unit in cuestion in this case as derivative of agricultural tractors. It has wheels, provision for a driver, it pulls implements and other items, it has a motor with transmission of rower to the wheels by gears and shaft and its purpose is, inter alia, to cultivetec the land and @o other things which assist the farmer in his agricultural pursuits. That 1S a description of something very like an agricultural tractor. And when one says it 1S very different from the original, namely, that it has pneutatic tyres, is petrol or diesel driven and has sophisticated gears | [oy transmission, that to my tind 1s evidence of derivaticn. Chan ? «a re) in the nature and design of the motor or engine which are incorporated in existing versions of agricultural tractors from time to time are but incidents in derivation. But if the words of para. &7.01.31 require that the unit bo Gderived from some particular agricultural tractor the question in this case was whether it is derived from a particuler aariculturc]) tracter, formerly manufacture€ and marketed by tho McCormick Company. The Tribunal took the view that this was the acrrocriatr? question. According to the Shorter FEnelish Pictionary, #2 derivotive is something "characterised fy transmission", or "oF en rere me mre ee ae 17. derived character or nature". Accor3irqg to Cherbers Twentisth Century Dictionary, a derivative is something "derived or tak < 1D a from something else", "not radical or original", "that which is derived, a word formed from another word". "Derivation" according to the Shorter Oxford Dictionery includes "transmission, ~communication, the action of drawing, obtaining or deducing Fron 5s source" and in grammar, "the tracing of the origin of a word from its root or radical elements" The Chambers Dictionary includes "the descent or evolution of man or animals." " The subject in hand concerns wheeled tractors and the guestion is whether one is derived From another. Focs the tractor in question have its source in an agricultural tractor? Is it something not radical or original but evolved by transmission, Geduction or being "taken from" something else? It was' accected by the Tribunal that the machine is not redical or origirzi, It is said to be aderivative of a skid unit which has becn incorporatedin various agricultural tractors. But the skid unit is only the basic unit providing fower transmission and aeare. Those items are uscful for agriculturél tractors but Jo not in themselycs gave to any mechanical entity the character of an agricultural tractor. That character 18 provized by the tractor chassis, the size and arrangement of its wheels, its brakes, its steering gear, its tyres, its provision for the accermofation of the driver and for attaching imslencnts 3n3 otn2r agricultural equipment which has to be pulled or owoushe@ toacther wirh incidentals such as lights, warning hooters, stors for mounting meme ne ee eee ee 18. and other things. Its function was to operate on the ferm ard elsewhere. These features may well be reqarded as those which, together witn its power and transmission gear, whether skid unit or other, give the agricultural tractor its character as euch. And the machines in question have all these things. When one comes to the question of derivation it is not of great importance whether, fer instance, the driver's seat faces in one direction or another. As time goes on and the tractor acquires added functions such changes are merely innovations for better verformance of the unit. The same is true in relation to the introduction into the machine of a strengthened chassis. That which is Serived, almost by Gefinition, differs from the original. If the origin2l was really used as a model to be modified and added toto produce the ultimate machine for its functions, alterations were inevitable, but alterations are of the essence of derivation. Accordingly, it is difficult to see why the unit in guestion is said to be derived not from the McCormick agricultural tractor but from the skid unit. The skid unit is but the power anc transmission element of the unit and was but the power and transmission clement when first introduced into the McCormick agricultural tractor. It ue umportant to emohasise that the unit whose derivation is in question in . this case 1S not only the power 6nd transaicsion but the unt ceuprising the whole vehicle. The Tribunal found that the unit has "a historical connecticn Nong ce te nee me ee eee ee ee ee with agricultural tractors in particular a McCormick tractor. The makers took an [agricultural] tractor andj exrerimented with additions. They then substantially modified the machine in order that it might meet its intended purposes", In cther swords the ultimate unit was the result of experiment with the original en3 presumablyowed much thereto. Such a finding is certainly a firm foundation for thinking that the resulting mechine may wel] ke a Gerivative of the original. That the latter was the source in 3 real sense of the former seems clear. The existence of the connection be it historical, indicates that throughout the whole process there was an unbroken connecting thread of a physical kird with the probability that each step in ths process owee somethina to what had gone before. Where an original machine kas beer . "taken" and experimented upon and a modified mechine hee results4, the connection between the original ané@ the ultimate is eJmrost inevitably more than historical. And when the uvltirate unit will for practical purposes do all that the former would do and other things as well, I find it compelling to thank that there is significant physical connection in the relevant sense. I do not see a basis for ccnfining the elenent of derivation to the skid unit elone rather than the other essential trector features unless the view be teken that dorivatien imnlies practical identity between the origina] end the Jerived. Prov th? point of view of gerivation the aedeption in the vlcirete techin2 of the same skid unit is strong evitence of vhysies] connection. When what is involved not only aincorsorer2s the came fO%Ir SR een ee eee --+- - + "—— transmission and gear unit but also other features albeit modified, as were in the original, the evidence of derivation in a real sense is guite persuasive. Of course the introduction of the skid unit brought ebeut considerable changes in the original agricultural tractor. Rut whenever it was introduced it was but a step in the imeroverent of power and transmission of the basic thing, the two wheel drive tractor. The skid unit was large and inflexibte. Physical changes to accommodate it were obviously reauvired. &nd doubtless the power and efficiency of the skid units contributed to the efficient development of what was in hend, namely a tractor that would accommodate the mast with a]1 the manifold advantages flowing therefrom. But at first and last the basic purpose and design of an agricultural tractor was preserved, namely the particular sizes and designs of the wheels, the tyres, the provision for the driver and provision for pulling loads, It appears to me that in the decision of the Tribunal there is an erroncous assessment of the role of the skid unit. That unit is, after all, merely a power and transmission unit, the hand maiden, of the vehicle. The vehicle had to be modified to accept the skid unit, but the wodifications were but developments of the vehicle and what was produced at the end was a vehicle improved in performance but still a two wheeled tractor, self-propelling, for use in agriculture. That 1t was more does not mean that 1t was not a derivativ2® of tha "cCorsick agricultural tractor. 70 say that the resulting unit wes ""b3se Ou on" the skid unit is to say ne rore thsn thet the vebicle was TE NT em cement te mee ros 21. modificd to accept it. The skid unit did not dictate tho svelity of the ultimate vehicle as a tractor. Those things which meko the unit a tractor in ordinary parlance do not come from the skid unit They come from the McCormick tractor medified ard changed to accommodate and make use of the power of the skid unit. Eut it is the fundamental features of an agricultural tracter which make the unit both a vehicle and a tractor. It would seem to me from the comments of the Trabunal thst it construed the expression "derivative of agricultuural tractors" as requiring substantial physical identity in the derivative with the original. It emphasised that it looked for physical derivation and not merely historical connection. In the course of its reasons for its decision the Tribtnal observed that "the fact that a Fordson or International Harvester engine and transmission which is basically what the skid unit is, constitutes an important part of the subject goods can har2ly mean that an item of such goods is a derivative of another rroduct (an agricultural tractor) that is itself based uvon such a skid unit" I understand this to mean that the fact that the ski? unit isc an important part of the subject goods, the Manitou vehicles, can hardly mean that the unit under discussion (the Manitou) 1s e Gerivative of the McCormick agricultural tractor that is itself based upon such a skid unit. With this one can aares subject te a reservation as to whether "kased upon" Goes not is-state tha situation in respect of the McCortick tractor when incorroretina Soetoro ee - ee ee 22. the skid unit. But adopting a slightly different form of words, it may certainly be said that the fact that the Manitou incorporates the skid unit which is also incorporated in the McCormick is certainly a physical connection between the McCormick and the Manitou of first rate importance on the question of whether the Manitou is derived from 'the McCormick. Therein there is a direct physical connection between them. Accordingly I would conclude that the unit in question is a derivative of agricultural tractors and of an agricultural . tractor. But whether the difference in conclusion between the Tribunal and that expressed herein be due to an error of law does not in the circumstances call for determinaticn. In the result I would set aside the decisions of the Tribunal. made on the 24th day of December 1979 concerning the vehicles the subject thereof in matters No. 1005Lof 1978 and No. 116 of i979 and remit the matter for further consideration. To certiiy that itis end the tents one Qi 3 % 'ue Conv of the wv. i) ¢ ¢ | is'c= ft e ' eLvuln vl 21S oar A3 .vciate Citas. Dated: 22 deash, iqgo IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G4 of 1980 GENERAL DIVISION BETWEEN: BLACKWOOD HODGE (AUSTRALIA) PTY. LIMITED Applicant - and - THE COLLECTOR OF CUSTOMS NEW SOUTH WALES Respondent CORAM: Smithers, Fisher and Sheppard JJ. Ao fuguast \9g0 FISHER J.: In this matter I have had the advantage of reading in REASONS FOR JUDGMENT draft form the reasons of Sheppard J. I am in agreement with his conclusion that the vehicles in question do not fall within paragraph 37.91.31 of the Tariff and with his reasons for that conclusion. I also agree with his view that the Tribunal was not in error in point of law in holding that the vehicles fell within paragraph 84,22.521 of the Tariff. As the appeal to this court lies only upon a question of law (Administrative Appeals Tribunal Act 1975 s.44) the jurisdiction of the court depends upon a finding by it that the Tribunal has made an error of law which affects its decision. The true position of the court in these circumstances has been stated by Lord Radcliffe in Edwards (Inspector of Taxes) v Bairstow 11956] A.C. 14 at p.36, which statement I 1tesp-ctfully adopt: "When the case comes before the court it 1s its duty to examine the determination having regard to its knowledge of the relevant law. If the case contains anything 2x facie which 1s bad law and which beats upon the determination, 1t 1s, obviously, erroneous in point of law. But, without any such misconception appearing ex farz1e, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those carcumstances, too, the court must intervene, It has no option but to assume that there has been some misconception of thc law and that this has been responsible for the determination. So there, too, there has been >rror in point of Law. I do not think that 1t much matters whether this state of affairs is described as one 1n wiich there is no evidence to support the determinatio1 or as one in which th> evidence 1S inconsistent with and contradictory of the determination, or as one 1n which the true and only reasonable conclusion contradicts the determination, Rightly understood, eash phrase propounds the same test. For my part, I prefer the last of the three, since I think that 1t 1s rather misleading to speak of there being no evidence to support a conclusion whon in cases such as these many of the facts are likely to be neutral in themselves, and only to take their colour from the combination of circumstances 2n which they are found to occur." I would comment in passing that I see the last sentence of the extract from Lord Radcliffe's reasons as having particular relevance to the facts of this present matter. It assists in arriving at the proper decision on this aspect of the appeal. However 1t 18 appropriate, because of the nature of the error of law alleged here, that I draw attention to the reservations of Dixon J. (as he then was) 2n Commissioner of Taxation v Miller (1946) 73 C.L.R. 93 when considering whether an appeal lay to the High Court from a decision of a Board of Review. At page 104 he said: "As the Board of Review 1S an administrative body 1t may be doubted whether a decision by it can be said to involve a question of law because it 1s based on insafficient evidence. But, no doubt, if the facts coming before the Board were incapable »f the legal comples.ion Placed upon them, that would itnvelve a question of law and the difference 1S not great." This point was neither taken nor argued before us and T am relieved by my ultimate decision not to Nave to consider it. However in circumstances where the Triminal was ontitled to anform atself on any matter in such manner as it thought fit (Administrative Appeals T ibunal Act 1975 s.33(c)) and particularly whece as here the parties expressly agreed that anything the Tribunal saw on an inspection of the vehicles might be regarded as evilence, 1t may 1n subsequent matters require consideration, Hereafter I shall 's assume, probably without justification that Sir Owen Dixen's doubt was unfounded. For the applicant in this matter to succeed it 1S nacessary that it establish that there are no reasonable grounds for the Tribunal's finding that the vehicles should be classified within paragraph 84.22.521, an other words that th=re 1s no evidence upon which 1t could reasonably rely to support its conclusion that the vehicles were imported in an incomplete or unfinished state. It is quite irrelevant and nothing to the point that this court might prefer to come to a different or contrary conclusion; the applicant must establish that such conclusion is the only true amd reasonable conclusion, Any conclusion as to whether th> vehicles are ancomplete or unfinished relates to the identification of the vehicles and the subsequent question of the proper classification under the Tariff of the same does not arise for consideration at this stage. Unless there 1S no evidence upon which the Tribunal can reasonably support its finding, 1t will not be in error ona question 2f law. It follows that 1f there 1s some evidence upon which the Tribunal can rely, the question whether the Tribunal has correctly determined that the vehicles were imported in an ancomplete or unfinished state 1S 32 question of fact upon which there 1s no appeal to this court. As Diplock L.J. (as he then was) said in Reg v Deputy Industrial Injuries Commissioner, Ex parte Moore [1965)1 Q.B. 456 at p.488:- "If at (the evidencé] is capable of having any probative value, the weight to be attached to it 185 a matter for the person to whom Parizament has entrusted the responsibility of deciding the issue. The supervisory jurisdiction of the High Court docs not entitle it to usurp this responsibility and to substitute its own view for his." It 1s my firm view that this court when hearing appsals from a Tribunal constituted for the purpose ».f reviewing decisions of this nature, should adopt a restrained approach. Parliament contemplated that only 1n exceptional circumstances should the decision of the Tribunal not be the final decision. This doses not mean that when an error of law is iduntified, the court should be reluctant to intervene. In fact, 1t 1S under a duty to do so. Rather 1t should heed the comments of Davies L.J. (as he then was) an Reg v Industrial Injuries Commissioner, Ex parte Amalgamated Engineering Union (No. 2) [1966] 2 Q.B. 31 at p.50:- "T should like to echo the words of my Lord, Lord Denning M.R., in saying that I deprecate the practice, and hope it would not continue, of attempting to magnify or inflate questions of fact into questions of law and of trying to obtain decisions from the courts on matters which the legislature would appear to have thought suitable for decision by the various bodies and authorities set up under the Act of 1946." As Lord Radcliffe said in Edwards v Bairstow supra at p.38:- " ...by the system that has been sct up the commissioners are the first tribunal to try an appeal, and in the interests of the efficient administration of justice their decisions can only be upset on appeal if thoy have been positively wrong in law. 'The court 1s not a second opinion, where there is reasonable ground for the first." Lord Reid stated 1n Griffiths v J.P. Harrison (Watford) Ltd, fi963 A.C. 1 at p.16 that only if "their decision was unreasonable" is the applicant entitled to a second opinion. In the pres ont circumstances such a first decision 15 only unreasonable if no reasonable man could have come to the conclusion that the vehicle was an zuncomplete or unfinished fork lift truck. In such c1rcumstan- ces only does the necessary foundation for the intervention of this court subsist. So long as there are one or more relevant features, physical or otherwise, upon which a reasonable man might rely for his opinion that the unit in question was such a truck, the question remains a question of fact. The further question might be posed, namely whether such features are sufficiontly significant to warrant one conclusion rather than another, but this 1s a question of degree and again a question of fact. I refer to Lord Radcliffe in Edwards v Balrstow supta at p.33. The relative significance which a Tribunal attaches to particular features, usually physical, and whether it was justified, 1s, so lony as the features exist, a question of fact and should not be disturbed, The Australian Gas Light Co v The Valuer-General 40 S.R. (N.S.W.) 126 per Jordan C.J., at p.138: "If however, the facts so inferred are capable of being regarded as either within or without the description, according to the relative significance attached to tho, a decision either way by a tribunal of fact cannot br disturbed by a superior Court which can determine only questions of law." It was accepted before us that the expression "Incomplcte and unfinished" was not a term of art, being a popular and not a technical expression. Certainly nou evidence was heard as to any different meaning in the commetcial world. Thus the common understanding as to what the words m-an 1s not a question of law but of fact. In the same way that McTiernan J,, 1n Henderson v Forbes 49 A.L.J.R. 335 at p.336 was of the opinion that whether goods would be characterised as "coatcd'" was a question of fact, so whether the vehicles 1n question here would be characterised or described as incomplete or unfinished 1s a question of fact. Thus the threshold question for determination 1s whether there was available any evidence upon which a reasonable man might rely in identifying the vehicles as incomplete and unfinished. In my opinion such evidence 1S available. The contest 1s whether the vehicles should be identified as complete tractors or incomplete or unfinished fork lift trucks, However in the circumstances that the Tribunal's decision is that they are incomplete or unfinished fork lift trucks, the quastion for this court 1S more correctly stated as whether there 15 some evidence to support the finding that they are incomplete and un- finished fork lift trucks or whether the conclusion that they are complete tractors 1s the only true and reasonable conclusion, An interesting discussion in the use of the word "unfinished" 1n customs duty legislation 1s to be found in Newman Manufacturing Company v Marrable {193 2 K.B. 297 where the articles under consideration were described by the plaintiff as beads, and by the defendant as unfinished buttons. It was cleat, as Horridge J.,at p.20: found, that "they could not be used as they are as buttons without the addition of some sort of shank. It 1s unquestionable that they were imported for the purpose of having shanks attached to them, and being made into complete buttons." His Lordship's conclusions were in the following terms: --. 2m my view the statute was directed against those who imported goods which were not quite buttons, but upon which the bulk of the work had been done abroad, and very little remained to be done by the manufacturer an England. I think that was the reason why the words 'buttons... whether finished o1 unfinished' were used an this section. In my judgment these articles were unfinished buttons; they were going to be buttons, and they were going to have a shank put into them. The insertion of that shank only involved one-seventh of the total cost of the finished button, This article with a hole ready to have a shank put into it was an unfinished button within the meaning of s.9 of the Finance Act, 1928." In the present case there are certain facts which it could be said would have entitled or justified the Tribunal in concluding that the vehicles were tractors. But such a finding does not necessarily mean that that conclusion is the true and only reasonable one. The Tribunal p5inted to sther facts, namely the large counter weight which was on the vehicle, the purpose of which was to make the vehicle more stable when it was lifting material, and which although it would aid the vehicle in pushing a load, was not attached for this purpose. Likewise the presence of two hydraulic rams at the front of each vehicle, again fitted for the purpose of assisting a lifting operation. There was also evidence that each vehicle had been adapted to accept a mast and also forks, which attachments were essentially for the purpose of lifting material. For the purpose of assessing the significance 1t would attach to those features, the Tribunal perfectly properly took into account the capabilities of the vehicle as a tractor, 1.e. its capacity to haul or push. In this regard it found that the hauling or pushing of which 1t was capable was "of the most ad hoc kind", If it were pushing the driver would ba facing the opposite direction to that 1n which the vehicle was travelling. If 1t were pulling from the steering wend of the vehicle, stcering would be difficult in slippery or reugh conditions. Likewise the counter weight, which was "robust enough to push anything along" if pushed at the steering end, required that the object to be pushed be of the right shape and in the right position to enable the counter weight to make contact with it. In these circumstances it 1S not possible to say that there was no evidence to support the decision or that all the evidence was inconsistent with and contradictory of the decision. This court might feel that such a decision 1S unsatisfactory and that too much significance was attached by the Tribunal to these features. However in the laght of the principles abovementioned it can not say that 1t 1S unreasonable in circumstances where there 15 sume evidence, the weight or significance of which the Tribunal is alone entitled to assess, to support the conclusion that the vehicles were imported 1n an incomplete state. It must follow that they had some of the characteristics of lifting machinery and whether such characteristics were suffic1rently significant to enable the conclusion that they had "the essential character" 1s a question of degree and thus of fact. I agree the appeal should be dismissed. = { certify that this and the / preceding pages are a true copy of the Reasons for Judgment of Mr Justice YS _—— Dated: 42 haquok, 98> IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G. 4 of 1980 GENERAL DIVISION Between: har HODGE (AUSTRALIA) TX. Applicant - and - THE COLLECTOR OF CUSTOMS, NEW SOUTH WALES SS Respondent CORAM: Smithers, Fisher and Sheppard JJ. REASONS FOR JUDGMENT va A r SHEPPARD J.: RAR uc wal (g go This is an appeal pursuant to s.44 of the Administrative Appeals Tribunal Act, 1975, against the decision of the Administrative Appeals Tribunal made on 24th December, 1979. The decision was given in respect of a dispute between the applicant and the Collector of Customs as to the correct amount of customs duty to be paid in respect of the importation by the applicant into Australia of certain goods. The applicant is a company carrying on business in Australia. It is an importer of machinery of various kinds. The goods the subject of the dispute may be described neutrally as vehicles. Four are involved. One was entered for home consumption on 3lst May, 1978, two on 28th November, 1978, and the fourth on 3rd April, 1979. The Collector originally decided that the first vehicle was properly classified as falling within paragraph 84,.23.311 of the Customs Tariff 1966 (hereinafter referred to as the Tariff). He subsequently decided that the correct classification of that vehicle and the remaining three vehicles was that they were within paragraph 84.22.5211. The applicant on the other hand, eventually contended (it is immaterial to refer to its earlier con- tentions) that the vehicles fell within paragraph 87.01.31. The description of the vehicles is not in contest. To a layman each of the vehicles bears general resemblance to a tractor, They were so described in the evidence of Mr. S.R. Wood who is the applicant's marketing manager for the vehicles. Each vehicle has four wheels - two large driving wheels at the front and two smaller wheels at the back. The engine is behind the driver who sits on a seat close to the front of the vehicle. It is directed by a steering wheel which operates the two smaller wheels at the rear. The front wheels are fixed and do not change direction. The wheels are fitted with large rubber tyres. At the rear is a draw hook that would enable another vehicle, for example a trailer, to be hooked on and pulled. Also at the rear, underneath the engine of the vehicle, is a large counterweight. At the front of each vehicle are fitted two hydraulic rams. All vehicles are similar. They differ only in their capacities. Two have a capacity of 4 tonnes, one a capacity of 2.5 tonnes and the other a capacity of 2 tonnes. The vehicles were imported from France. They were manufactured in Ancenis by a company Braud & Faucheux S.A.. The manufacturer took as a base or starting point what is known as a skid unit acquired either from the Ford Motor Company or International Harvester. The skid unit comprised an engine, a gear box, a differential and transmission to two stub axles which could be fitted with driving wheels. The name "skid unit" comes from the letters S.K.D. which stand for Semi Knocked Down. The skid unit is fitted to a very strong chassis. The housing over the engine is of sturdy construction as are the wheels and other parts fitted by the manufacturer. The tyres fitted to the wheels are tractor tyres. In the condition in which the vehicles were imported there were no attachments other than the counterweight, towing hook and hydraulic rams to which reference has been made. There were holes bored in a shaft at the rear of the vehicles to which could be attached a bar or chains for pulling. The counterweight itself could be used for pushing. But the evidence establishes that each of the vehicles the subject of this appeal and a large number of others imported into Australia were brought in to be used as what are known as site lifts. They were to be fitted with a lifting mast and used as a fork lift truck not so much on smooth surfaces such as would be found in warehouses or factories, but on 3. farms or building sites where the terrain is rough and uneven. The purpose of the counterweight is to make the vehicle stable when it is lifting. If the vehicle were to be used only for pulling or pushing there would be no need for a counterweight to be fitted. The evidence establishes that the vehicles are used in overseas countries for a wide variety of purposes including agricultural purposes, They are fitted with many different attachments although from the literature which was in evidence before the Tribunal many used for agricultural purposes have lifting masts attached to them. The use of the vehicles in Australia has not been so wide ranging. The evidence of Mr. Wood establishes that most, if not all, the vehicles imported into Australia, including the four in question, were intended to be used as fork lift trucks on building sites. The history of the development of the vehicles is important in the light of some submissions which were made by the applicant. The vehicles were apparently developed from a McCormick agricultural tractor. Originally the com- plete tractor including bonnet and shield was used. The driver's seat and steering wheel were reversed so that the vehicle was steered from what was originally the rear of the tractor rather than the front. A mast articulated on the driving axle was added as was the counterweight at the rear. The original chassis was reinforced. Later it was only the skid units which Braud @ Faucheux used as a basis for the manufacture of the vehicles, The balance of the units were fabricated by the company. Later still the skid units themselves were slightly modified in order to satisfy the needs of the company's tractors, namely, heavy loads and rough terrain. The units imported into Australia are not equipped with lifting masts or other accessories because under the terms of the contract between the company and the applicant the applicant purchases these items separately. The Tribunal held that the vehicles were properly classified under paragraph 84.22.521, I pause to say that I have had some difficulty in knowing how properly to describe the various items, using that expression neutrally, in the Tariff. I do not find the provisions of s.13(2) of the Tariff (which defines "item", "sub-item", "paragraph" and "sub-paragraph") particularly clear on this question when its provisions are reed in conjunction with the schedules to the Tariff. I have tried to use what I believe to be the nomenclature of the legislature. If I have failed in this endeavour, my meaning will nevertheless be clear. Paragraph 84,22.521 is in Chapter 84 of the Tariff. Chapter 84 is in Division XVI which is entitled "Machinery and Mechanical Appliances; Electrical Zquipment; Purts Therefor", Chapter 84 is entitled "Boilers, Machinery and Mechanical Appliances; Parts Therefor", Item 84,22 De specifies: "Lifting, handling, loading or unloading machinery, telphers and conveyors, not being machinery falling within item 84,23", It is not relevant to refer to item 84.23. After item 84,22 there follow a number of paragraphs referring to various kinds of lifting, handling, loading and unload- ing machinery. These are not material. Paragraph 84,22,52 is, "Other machinery, but not including parts therefor specified in paragraph 84,22,53", That para- graph has no relevance. The other machinery referred to in paragraph 84.22.52 is machinery of the kind specified in item 84,22, that is lifting, handling, loading or unloading machinery, telphers and conveyors. Paragraph 84,22.521 applies to machinery which is within paragraph 84.22.52 and which does not have a working weight of more than 50 tonnes. None of the vehicles here in question had a working weight of more than 50 tonnes. It was the applicant's submission that the vehicles could not as a matter of law fall within paragraph 84,22.521 because at the date of their importation they could not be used for lifting, handling, loading or unloading. Each was capable only of pulling or pushing another vehicle or load. As has been mentioned the applicant contended that the vehicles were properly classified within paragraph 87.01.31. That paragraph is within Chapter 87 of the Tariff which is within Division XVII which is entitled "Vehicles, Aircraft and Parts Therefor; Vessels and Certain Assorted Transport Equipment." Chapter 87 is entitled "Vehicles, Other Than Railway or Tramway Rolling Stock and Parts Therefor." Item 87.01 specifies tractors (other than those falling within Item 87.07) whether or not fitted with power take-offs, winches or pulleys. The submissions of the parties were such as not to make it relevant to refer to item 87.07. Paragraph 87,01.31 specifies tractors which are: "Agricultural wheeled tractors and other wheeled tractors that are derivatives of agricultural tractors: Having a power of, or exceeding, 15 kilowatts at the power take-off". The notes to Chapter 87 define the expressions "tractor" and "agricultural tractor". Note 2 defines "tractor" to meani- "a vehicle constructed essentially for hauling or pushing another vehicle, appliance or load, whether or not the first-mentioned vehicle contains sub- sidiary provision for the transport, in connexion with the main use of the tractor, of tools, seeds, fertilisers or other goods". Note 7 defines "agricultural tractor" to mean: "a two-wheel drive tractor of a kind used solely or principally in agriculture, horticulture or viticulture". There is another part of the definition to which it is unnecessary to refer. At the hearing before the Tribunal it was the applicant's contention that the vehicles were either agricultural tractors within the definition of that expression in Note 7, or were derivatives of agricultural tractors. At the hearing before 7. this Court the submission that the tractors were agricultural tractors was abandoned but it was contended tnat they were derivatives of agricultural tractors. It was said that the Tribunal's decision that they were not derivatives of agricultural tractors was erroneous in point of law, It was the primary submission of the Collector that no point of law arose in the case and that the determin- ations of the Tribunal which were challenged were deter- minations of questions of fact against which there was no appeal to this Court. The Collector further submitted that the Tribunal nad, in any event, made no error of law in arriving at its decisions. There are contained in Part I of the first schedule to the Tariff rules for the interpretation of Part II of that schedule. The relevant provisions of the Tariff are contained in Part II of its first schedule. The way in which these rules are to be used is provided for in s.14 of the Tariff itself. It is unnecessary to refer to the detail of s.14, but one of the rules should be mentioned. It is Rule 2(1)(a) which is as follows: "2,(1) A reference in an item (including a reference in a sub-item, paragraph or sub- paragraph) to goods of a particular kind shall be read as including a reference to - (a) goods that are imported in an incomplete or in an unfinished state but have the essential character of goods of that kind;" I deal first with the yuestion of whether the Tritunal's decision that the vehicles were not within paragraph 87.01.31 was erroneous in point of law. In order to succeed the applicant must demonstrate that the evidence is such that the vehicles must fall within the words of the paragraph. In this respect I refer to Currie v. Inland Revenue Commissioners (1921) 2 K.B.332, where Lord Sterndale said (p.336): "There may be circumstances in which nobody could arrive at any other conclusion than that what the man was doing was carrying on a profession; and therefore looking at the matter from the point of view of a judge directing a jury, the Judge would be bound to direct them that on the facts they could only find that he was carrying on a profession, That reduces it to a question of law. On the other hand, there may be facts on which tne direction would have to te given the other way. But between those two extremes there is a very large tract of country in which tne matter becomes a question of degree; and where that is the case the question is undoubtedly in my opinion, one of fact; and if the Commissioners came to a conclusion of fact without having applied any wrong principle then their decision is final upon the matter," I refer also to Lombardo v. Federal Commissioner of Taxation (1979) 28 A.L.R. 574 at p.576. I think there is a question as to whether the applicant's submission raises a question of law. In the view thet I take of the matter, however, I do not consider it necessary to determine that matter. As earlier mentioned the applicant did not argue before this Court that the vehicles were agricultural tractors, but it did argue that they were derivatives of agricultural tractors, I confess to finding it difficult to understand what is meant by the expression "derivatives of agricultural tractors". I think counsel for the Collector laboured under the same difficulty when he endeavoured to provide examples of tractors which would fall within that classification. But what- ever it is that the expression may cover, I am satisfied that the vehicles here in question are not derivatives of agricultural tractors in the sense in which that expression is used in the relevant paragraph. It was submitted by counsel for the applicant that they were derivatives of agricultural tractors because they were modelled on or based upon the old McCormick agricul- tural tractor, That was said to be so notwithstanding that no more than the skid unit used in the manufacture of present day agricultural tractors was now used, Counsel referred to a number of dictionary meanings of the words "derived" and "derivative" and showed that one meaning of the expression "derived from" was "coming from a source", It was submitted that this was the meaning which the word derivative had in the relevant provision and that the relevant source was an agricultural tractor, I agree that the expression "derived from" means "coming from a source", However, the source from which the vehicles here in question had to come in order to fall within the paragraph was an agricultural tractor, It is true, historically speaking, that the vehicles developed, firstly by the adaptation of an old McCormick agricultural 1c, tractor, then by the taking of the skid unit from such a tractor and finally by the manufacture of a skid unit more particularly suited to the needs of a vehicle intended by the manufacturer to be able to stand up to the hard work for which these vehicles are designed. But I do not think that the paragraph in question is speaking of the historical development of agricultural tractors. Rather it is concerned to specify an article which itself has been derived from an existing agricultural tractor. To my mind the article, whatever it is, must have been developed from an actual agricultural tractor, not developed from such a tractor in the sense of being modelled upon something which in former times was an agriculturel tractor or part of such a tractor, It is for that reason that I am of the opinion that the vehicles do not fall within paragraph 87.01.31. The next question is whether the Tribunal was in error in point of law in holding that the vehicles fell within paragraph 84,22.521 of the Tariff. In the con- dition in which the vehicles were imported they were plainly not telphers nor conveyors, Nor, upon the uncon- tradicted description of the vehicles in Mr. Wood's evidence earlier recounted, does it readily occur to one that they are properly described, in the condition in which they came into this country, as lifting, handling, loading and unloading macninery. In their condition upon importation they could not be used for any of those ll. purposes. The Tribunal itself was of that view. It was able to reach the conclusion that the vehicles were within the paragraph only by reason of the operation it considered interpretative rule 2(1)(a) to have. The provisions of that rule have been earlier set out. The question is, firstly, whether the vehicles were imported in an incomplete or in an unfinished state and, if that be so, secondly, whether they have the essential character of lifting, handling, loading or unloading machinery. An appeal lying only upon a question of law the applicant will, upon the basis of the principles earlier adverted to, fail unless it be demonstrated that on no basis could tne Tribunal have reached the con- clusion that the vehicles were imported in an incomplete or unfinished state, or, if it was open to tne Tribunal to hold that they were in such a state, that the vehicles (being in that state) could not on any basis be said to have had the essential character of lifting, handling, loading or unloading machinery. The critical paragraph of the Tribunal's reasons for decision is as follows: "The findings set out above and our description of the units make it clear that the machine has been designed for the purpose of adding various implements or accessories to carry out a wide variety of functions. The units are clearly used with many different accessories attached carrying out the many functions which they were constructed to perform, we agree with the sutmission that the modifications performed by the supplier upon the 'skid units' purchased from 'International Harvester' and 'Ford Tractor Division' reveal that 12. "the imported machines, although incomplete, have been committed to being completed so as to be able to perform the functions specified within item 84,22 and were sufficiently com- plete to be identified as belonging to the classification in question. It is clear that the imported units have been adapted to accept a mast and forks for lifting. Also the attach- ment of hydraulic rams indicates that the machines have been constructed for lifting purposes. Altogether we consider that the units, although incomplete and unfinished, have a character which is on the evidence sufficient to support the classification con- tended for by the Collector," There is no express mention in that paragrapn of the counterweight, but I would regard the statement that the vehicles had been adapted to accept a mast and forks for lifting as an indirect reference to it. The evidence establishes that the only purpose of the counterweight is to enable the vehicles to be fitted with an attacnment at the other end which will either itself be heavy or capable of lifting heavy weights. The weight at the rear of the vehicle would counter the effect of such a loading and thus keep the vehicle stable. If the vehicle were not fitted with a lifting attachment or an attachment which itself was of substantial weight, there would be no purpose in the vehicle being fitted with the counterweight. For similar reasons there is no purpose either in its being fitted with the hydraulic rams unless something be added. It 1s the presence of the counterweight and the hydraulic rams which lends support to the contention that the vehicles were imported in an incomplete or unfinished state. On the other hand the vehicles could te driven 13. and steered. They were capable of pushing or pulling objects including other vehicles. Those matters could suggest that the vehicles were complete in themselves at the time of importation. A tribunal entrusted with deciding how the vehicles should be characterised for the purposes of the Tariff was obliged to take all those considerations into account in reaching a conclusion, Plainly the Tribunal here did so. Having done so it reached the conclusion that the vehicles were imported in an incomplete or unfinished state but had the essential character of goods described in the relevant paragraph of the Tariff. The question is whether it was open to the tribunal to come to those conclusions. In resolving that question the principle which is to be applied is that stated by Lord Sterndale in Currie v. Inland Revenue Commissioners ((1921) 2 K.B. at p.336) earlier cited. Having reflected upon the matter at some length I have reached the conclusion that, by reason of the presence of the counterweight and the hydraulic rams, it was open to the Tribunal, as the tribunal whose decisicns on questions of fact were final, to come to the conclusion that the vehicles were imported in an incomplete, if not unfinished, state, notwithstanding that in many respects they had the features of a complete and finished article. Once that conclusion is reached, 1t follows, almost as a corollary, that the vehicles had the essential character 14, ea we W of lifting machinery. To hold otherwise would be to put on one side the conclusion already arrived at, namely that the vehicles had been imported in an incomplete state. I should add that in reaching my conclusions I have borne in mind that it is the state or condition of the goods at the time of importation that is the determining factor. The test is an objective one. The purpose of the manufacturer or exporter on the one hand or the importer or user on the other can have no relevance. Otherwise rates of duty for identical articles would vary depending upon what their proposed use was to be. It is the intrinsic nature of the article itself which has to be considered. That is not to say, however, that it will not be relevant to take into account in determining the nature of an article and the question of whether it is in an unfinished or incom- plete state the ordinary use to which such an article might reasonably be expected to be put. What ought to be left out of account is the particular purpose which an exporter or importer may have had in mind for the article in question. Nothing in the reasons of the Tribunal leads me to think that it misdirected itself in relation to the matter I have last mentioned. For the reasons I have given I am of opinion that the appeal should be dismissed and the decision of the Tribunal affirmed. The applicant should pay the respondent's costs. I cartify that tis avd the }4& preceding are a true copy of the reasons for ) pages judgment herein of The Honourabl 15+ mr Justice Sheppard. < A lh ~~ Associate Dated 2% Rr, \q8e