Sb6G NOT FOR DISTRIBUTION IN THE FEDEPAL COURT OF AUSTRALIA ) ) VICTORIA DISTPICT REGISTRY ) 7. Ne. G 142 of 1996 ) GENERAL DTYISION BETWEEN : FIONA PRATT and HELOISE RACHEL PRATT (trading as SOUTHERN PAPER CONVERTERS ) Applican Tt EB} and KENNETH JOSEPH OLLIFFE (a delegate of the Comptroller-General of the Customs} Respondent > ar COURT: NORTHROP J. DATE: 27 OCTOBER 1986 PLACE: MELBOURNE EX TEMPORE REASONS FOR JUDGMENT By application dated 6 May 1986. the applicants sought an order of review of a decision by the respondent which is said to have been made on 13 February 1986. The decision is one which arises out of the application of Part XVA of the Customs Act. That Part wag introduced into the Customs Act in 1983 and in substance enables a perszon to seek a reduction in the amount of duty to be paid on goods imported into Australia in certain circumstances. It is a relatively new Part and has not yet been examined 1n any detail by the Courts although a decision was given in the Federal Court of Australia constituted by Mr. Justice Davies ts on 19 August 1986 in the case of Davies Craig Pty. Ltd. v. Comptrolier General ot Customs in relation to the construction and application of two of the sections contained in Part XVA. The substance of the decision in relation to which the application to review 1S brought appears ina letter dated 13 February 1986 from a delegate of the Comptroller General to the applicants. In that letter there is a paraqrarh and I quote:- "Having considered all of the information submitted so far. I advise that I am not satistied that a prima facie case for concession has been established in these circumstances." It may well be that no final decision has been made and the applicants could supply further information to the delegate seeking a decision in the light of that further information and having regard to what has been said from the bar table, may be encouraged to do so. But nevertheless, the matter 15 proceeding at' the moment on the basis that a decision has been made and in the absence of further action being taken, that decision is final in the sense that the concession sought has not been granted. Following that letter, reasons for the decision were sought under s.13 of the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act") and these have been supplied and are dated 8 April 1986. It was following the receipt of those reasons tnat the orezent application was issued in May of this year. The grounds sought to be relied upon as set out in the application are those contained in the following paragraphs of s.5 sub-section (1) of the Judicial Review Act; paragraph (a), that a breach of the rules of natural justice occurred in connection with the making of the decision: paragraph (e), that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made and by applying sub-section (2}, the essence of that complaint 13 that the decision maker took into account irrelevant considerations or failed to take into azcount relevant considerations: and finally, paragraph (]), that the decision was otherwise contrary to law. Those bdaragraphs are not referred to in the application itself but they are apparent from a reading of the grounds set out in the application and also the particulars of those grounds a3 set out in the application. At a directions hearing, directions by consent were made that the applicants file and serve any affidavit or affidavits on which they intend to rely on or before 30 June 1986 and that the respondent file and serve any affidavit or affidavits on which he intends to rely on or before 30 July 1986. In accordance with those directions, the applicants have filed an affidavit by Timothy Patrick Burke who was the then solicitor for the applicants. In substance, the affidavit gives a history of what had occurred and exhibits a number of documents which are in existence relating to this particular application under the Castoms Act. Paragraphs 10 and 11 however, contain claims which can be summarised as saying that for the proper determination of the judicial review, 1t will be necessary for the applicants to obtain discovery and to interrogate the respondent in relation to this matter. Being emboldened by those two paraqraphs, the respondent by notice dated 5 August notified the applicants that he would move the Court for an order that the application be dismissed with costs on the qrounds that it failed to disclose a reasonable cause of action; was frivolous and vexatious and was an abuse of the process of the Court. The motion was taken under 0.20 r.2, but a reference to 0.54 r.6 shows that in applying 0.20 r.2. to applications under the Judicial Review Act, the first ground is to be read as "the application fails to disclose a reasonable basis for the application". The matter has proceeded on the basis that the issue to be determined on this motion 18 whether the application does disclose a reasonable basis for the application itself. Counsel for the applicants has made it quite clear that for the purposes of this motion. he does not rely at all on any of the matters set out in paragraphs 10 or 11 of the affidavit of Mr. Burke but does indicate that if the matter does proceed, it may well be that he will apply for limited discovery, for instance. of certain documents which are referred to 1n the reasonz for decision by the respondent but which have not yet been identified, see paragraph 12 of the reasons for jecision. Counsel for the respondent says that this 1s a departure from what appears in the affidavit. It may well be 30 but at the present time there has been no motion by the applicants for interrogatories or for discovery and the Court proceeds to consider the motion on the material presently before it and as disclosed by the application itself, the statement of reasons given in support of the decision and augmented, if necessary, by documentation which is annexed to the affidavit of Mr. Burke. Part XVA of the Customs Act. as has been said, is a relatively new item of legislation and does contain in it some difficult questions of construction. In substance, it enables a person to make application to the Comptroller-General for the concession, see s.269G, and under s.269C, subject to Part XVA, and I quote:- . where the (Comptroller-General), after considering an application under section 269G for the making of an order under this section in respect of particular goods, is satisfied that- (a) goods serving similar functions to the particular goods are not produced in Australia: and (b) goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business, the (Comptroller-General) shall make a written order, to be known as a UVommercial Tariff Concession Order. declaring that the particular qocd3 are qoads to which a prescribed item specified in the order applies. ' The effect of such an order is that reduced tariff is paid. Reference should be made also to s.269B of the Act which contains a number of definitions and in particular sub-sections (3), (4), (5) and (7). Sub-sections (3) and (4) are of importance because they are concerned with the concept of goods taken to serve similar functions as is sub-section (5) and sub-section (7), but I do not need to get involved in a detailed consideration of those provisions. For present purposes it is sufficient to sav that the applicant had made application in accordance with Part XVA of the Customs Act in relation to goods being a special type of paper-makina machine not previously manufactured in Australia. The question is whether that machine is capable of being produced in Australia by any person in the normal course of business. In this case, there i3 a suggestion that there is in Australia such a person, namely, Johns Perry Industries Pty. Limited ("Johns Perry") of Adelaide. After the application had been made, there was a certain degree of information sought by and on behalf of the respondent in relation to whether Johns Perry could produce goods serving Similar functions to the goods to be imported by the eee te applicant. the substance of the position being that Johns Perry claims that it could produce such a machine but would rely on assistance from an overseas company but that, in any event, it still came within the provisions of sub-section 269Bi(5), but there would be certain conditions arising from the construction and production of such a machine and would need to be produced pursuant to the specifications of the applicants. It was not a case where the machine itself is normally produced in Australia. They are not goods which are presently available. but they would be goods identical to goods which would be imported provided the specifications are the same, and provided also that some parts of the components would need to be at least partly produced outside Australia. It ig not desirable that I should express any views on the substantive issue raised by the application. This is an interlocutory order seeking to bring to an end an application properly commenced in this Court, and it 1s quite clear that in considering any such application the Court only makes an order bringing the proceedings to an end in what can be described as exceptional circumstances such as cases where there is no arguable case, the claim is bad beyond description and cannot possibly succeed. In fact. the Chief Justice in the Australian Steel Case, 112 C.L.R., uses a number of expressions whch have been used in the past to describe the very high onus cast upon a person seeking an order under 0.20 r.2 that an application be dismissed. In the present case, 1t seems to me that there are a number of matters which call for consideration oy the Court and which fustify the refusal of the motion brouwght Ey the respondents. Firstly, the question has been raised. and it appears to be a genuine question. as to the nature of the function of the delegate of the Comptroller-General in the exercise of the powers conferred by Part XVA. To some extent, it is true that the onus. if that {s the correct word to describe what the applicant must do when he makes application to satisfy the delegate that he comes with the Part, is on the applicant but in this regard reference is made to the care with which that word must be used in relation to matters of this kind. See McDonald Vv. Director-General of Social Security (1984) 1 F.C.R. 354. This is highlighted in the present case by the fact that the delegate made his own inquiries of Johns Perry, and in those circumstances, after making those inquiries and obtaining information, is he then under an obligation to disclose that information to the applicant in order to allow the applicant to answer that information? This is put in the application as a breach of the rules of natural justice in the absence of that being done. In this area of law 1t may be more accurate to describe it as a breach of administrative fairness, where the Court is required to ensure that an administrator exercising powers conferred upon him acts fairly insofar as the applicant is concerned. It 13 not absolutely clear whether there has been a breach of the rules of matural justice. to use the terminoloay contained in paragraph 9(1l)(a) of the Judicial Review Act, but there is at least in my opinion grounds for saying that this is a matter which does require investigation and of itself justifies the refusal to grant the motion, particularly having regard to the high onus cast upon the respondent in seeking orders of this kind. [In addition to that. questions arise as to what are relevant matters for consideration by the delegate in exercising those powers, and what material must be considered particularly having regard to the definitions in sub-sections 269B(3) and (4) of the Customs Act. and the meanings to be given to sub-section (5) of that section, and to the question of what goods are capable of being produced in Australia in the normal course of business by Johns Perry, in this case. The statement of reasons given by the defendant has get out a number of facts upon which the decision is based, under the heading of the findings on material questions of fact. and sets out the evidence upon which the decision was based, at paragraph 19, and continues:- "In addition I had access to documents supplied by SPC. Johns Perry and Macbro, contained on Departmental file No. C85/33869," - 10 - The reasons for decision are then set out in paragraphs 20 to 25, and I do not repeat them. But. in mv opinion. there is a basis for the Court to investigate those reasons for decision to see if in fact thev are appropriate having regard to the proper construction of the sections of the Act to which I have referred and the facts of this particular case, which are complex and difficult and are based upon a large number of documents which would need to be considered in some detail before any final view could be formed. For that reason also, questions arise which do merit a full investigation by this Court. In these circumstances, I do not express any views as to whether in a case of this kind where qoods are to be manufactured according to specifications they are to he identical goods within the meaning of sub-section 269B(3) of the Act or should come within sub-section (4) of that section. I say that in view of the opinion expressed by Mr. Justice Davies in the case already cited which deals with the meaning to be given to sub-section (4). In any event, a nice question will arise in this case as to what are identical goods for the purposes of the Act, having regard to the facts of this case. Accordingly, the motion is refused. I certify that this and the nine preceding pages are a true copy of the reasons for Judgment herern of the Honourable Mr. Justice R.M. Northrop. fe LOarlle Associate ~ $ Noo SUITE 27 October 1986 —