v Li — * JUDGMENT Mo 766 7. S72. . CATCHWORDS we ADMINISTRATIVE LAW - Judicial Review - Customs - Anti-Dumping Act - operation of sub-ss.5(1) and (5) - determination of the Normal value of the goods - "the price paid ... in the country w® of export" - domestic price lists published by the exporter soe from time to time - determination based on 1983 price list - adjustment of the price paid in the country of export - prices paid in Sweden varied according to the discount given on the list price - discount calculated by reference to quantity of sales not level of trade - disallowance of adjustments claimed on in respect of packing and other items. Judicial Review - Claim made under Judicial Review Act, s.6, in relation to action of Minister after lodging of original application and after request to Minister to revoke Dumping Notice. Judicial Review - whether appropriate order is order quashing a decision or order setting aside decision. WORDS AND PHRASES - "quash" Customs Tariff (Anti-Dumping) Act 1975 (Cth), ss.5, 8, 20 Administrative Decisions (Judicial Review) Act 1977 (Cth), 88.5, 6, 16. KANTHAL AUSTRALIA PTY LIMITED v. MINISTER FOR INDUSTRY, . TECHNOLOGY AND COMMERCE Nos. G259 of 1986 and G564 of 1987 '+s Davies J. 23 December 1987 Sydney — "8 2 esiven 0 i 39 JANIS23 O° \_\ |BRDBRAL GOURT OR (0 AMBTRALIA NRO IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY Nos. G259 of 1986 GENERAL DIVISION CORAM: DATE: PLACE: and G564 of 1987 BETWEEN: KANTHAL AUSTRALIA PTY LIMITED Applicant AND: MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE Respondent Davies J. 23 December 1987 Sydney MINUTES OF ORDER The Court declares that the declaration under s.8(2) of the Customs Tariff (Anti-Dumping) Act 1975 made by the respondent in respect to the goods which are the subject of Dumping Report No. 107 on 8 May 1985 and published by the respondent in the Gazette dated 14 May 1985 was and is void. The Court orders that the declaration referred to in Order 1 be quashed as from 8 May 1985. The Court declares that the direction under s.5(5) of the Customs Tariff (Anti-Dumping) Act 1975 given by the respondent in respect to the goods which are the subject of Dumping Report No. 107 on 8 May 1985 was and is void. The Court orders that the direction referred to in Order 3 be quashed as from 8 May 1985. The Court declares that the applicant owes no liability to pay any dumping duty charged on goods which were the subject of the declaration referred to in Order 1. The Court orders the applicant to pay the costs of the respondent occasioned by or thrown away by reason NOTE: -2- of the amendment of the Statement of Claim and the commencement of proceeding No. G564 of 1987 during the hearing. The Court orders the respondent to pay the costs of the applicant of these proceedings, other than the costs of the amendment of the Statement of Claim and the commencement of proceeding No. G564 of 1987 during the hearing. The Court orders that,until further order,the evidence given in these proceedings and the Reasons for Judgment delivered on 11 December 1987 shall remain confidential and not be published to any person other than the parties and persons who having given an undertaking to the Court were permitted access to the confidential material, save that the Reasons for Judgment amended in accordance with the document entitled "Schedule of Deletions and Amendments for General Publication" dated 21 December 1987 may be published generally. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) Nos. G259 of 1986 ) and G564 of 1987 ) GENERAL DIVISION BETWEEN: KANTHAL AUSTRALIA PTY LIMITED Applicant AND: MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE Respondent CORAM: Davies J. DATE: 23 December 1987 PLACE: Sydney REASONS FOR JUDGMENT (AMENDED FOR GENERAL PUBLICATION) This is an application under ss.5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). At issue are decisions and actions taken by the Minister under the Customs Tariff (Anti-Dumping) Act 1975 (Cth)("the Act"). When referring to the Act I omit reference to recent amendments which were not applicable at relevant times. Section 8 of the Act provides that, if goods are exported from an overseas country to Australia at a price less than their normal value and such exports continue and if material injury to an Australian industry results therefrom, -2- or is threatened , the Minister may declare, by notice published in the Gazette, that s.8 applies to such goods exported to Australia after the date of publication of the Minister's declaration. In that event, a special duty of Customs, known as dumping duty is imposed. The dumping duty is ordinarily the amount by which the export price of the goods is less than the amount of the normal value, as defined, of the goods. The Minister has various other powers under the Act including the power to make decisions in the determination of normal value and to determine whether or not material injury has been or is being caused or threatened. This present application concerns principally decisions and actions of the Minister and of the Australian Customs Service ("the ACS") with respect to the determination of normal value, a declaration of the Minister under sub-s.8(2) of 8 May 1985, published on 14 May 1985, that s.8 applies to imports of the applicant ("Kanthal"), a direction of the Minister as to due allowances under sub-s.5(5), made 8 May 1985, and the subsequent refusal or lack of action to reverse those decisions. With respect to normal value, s.5 of the Act provided, at the time, inter alia:- "(1) Subject to this section, for the purposes of this Act, 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, 1f like goods are not so sold by the exporter, by other sellers of like goods. -3- (5) 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; (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. eee The subject goods are steel chains and hooks manufactured in Sweden by Gunnebo AB ("Gunnebo"). It 1s not in dispute between the parties that, for the purpose of dumping duty, the normal value of those goods should be assessed pursuant to sub-ss.5(1) and 5(5). Gunnebo sells its goods in Sweden to a wide variety of firms and organisations, 800 in all, some of whom are small end users and some of whom are large distributors. Gunnebo publishes a price list from which it gives a range of discounts, up to a certain amount to the smaller purchasers. With respect to the largest purchasers, much greater discounts are separately negotiated and given. These discounts appear to be primarily quantity discounts. In 1984, the six largest purchasers in Sweden received discounts in a certain range. Kanthal received varying discounts over its range of goods. The Minister, in his decision as to normal value, took as the basic figure under sub-s.5(1) list price less a certain percentage falling within the range of discounts to the six -4- largest purchasers in Sweden in 1984. I shall designate this percentage throughout these reasons as A%. He then made adjustments to that figure under sub-s.5(5). For the purpose of these reasons, I do not differentiate between the different goods imported by Kanthal, though in practice it may be necessary to do so. The principal issue in this case is how the provisions of sub-ss.5(1) and 5(5) should be applied, having regard to the fact that the goods were sold in Sweden by Gunnebo at prices which varied according to the discount given. Mr M.H. Tobias, Q.C., senior counsel for Kanthal, put as his main submission the view that the words "the price" in sub-s.5(1) refer not to a price at which the exporter sells the goods in the country of export in sales that are arms-length transactions, but to the range of prices at which the exporter so sells. He submitted that, as Gunnebo's range of prices included the list price at the top of the range of discounts to its six largest purchasers in Sweden in 1984, the Minister was bound to determine a normal price which was or included that lowest price. He submitted that sub-s.5(1) confers no discretion upon the Minister. He submitted that, as the fact was that Gunnebo made sales in Sweden to one firm, SSAB, at list price less the percentage at the top of the range of discounts to its six largest purchasers in Sweden in 1984, normal price to be adopted under sub-s.5(1) was either that price or a range of prices including that price and -5- therefore, effectively, that price. I reject the argument that the words "the price" in sub-s.5(1) refers to a range of prices. I also reject the argument that the Minister is bound to take the lowest price at which the exporter sells in the country of export. The words "the price" refer to a price and it 1s from that price that the normal value of the goods exported to Australia is to be determined. Sub-section 5(1) implies the existence of a price with respect to which comparisons may be made and adjustments effected pursuant to sub-s.5(5). If the prices charged by the exporter in the country of export are simply random and arbitrary, they do not provide a basis for a determination of normal value and they would be disregarded. The Minister would then act pursuant to sub-para. 5(2)(a)(ii) and would determine that the sales were not suitable for use in determining a price that was to be the basis of normal value. But if there is an orderly pricing structure, either one price or prices which vary according to factors that are ordinarily taken into account in commerce, then it is possible to ascertain a basic price to which appropriate adjustments may be made for the terms and circumstances of the sales and like matters of which sub-s.5(5) speak. Paragraph 5(2)(d) which refers to "the price determined by the Minister to be representative of the price paid for like goods ... ", sub-s.5(5) which specifies -~6- "comparison with that export price", sub-s.5(6) which uses the term "properly comparable" and the term "normal value" itself all show that s.5 seeks to ascertain a price which 1s not a random or special price but one which is derived from ordinary commercial dealings and, therefore, a price with which the export price to the importer may be fairly compared. If the exporter sells in the country of export at only one price, then that will be the price adopted by the Minister. Adjustments may only have to be made pursuant to sub-s.5(5) with respect to matters such as advertising and packing which may reflect differences between the home and the export trade. When the exporter sells domestically in a range of prices, it will be necessary for the Minister to adopt a basic price and to make all appropriate adjustments reflecting not merely differences between the home trade and the export trade but also all those differences that would affect the basic price if the trade between the exporter and the importer had been trade on the domestic market. The object in each case is to obtain a normal value with which the export price may be fairly compared. As 15s stated in sub-s.5(5), all adjustments should be made to exclude differences in the terms and circumstances of the sales and like matters so that there are not present differences which could affect the comparison of the normal value, deduced from the domestic price in the country of export, with the export price. The views I have expressed so far are not, I think, -7- significantly different from those put by Mr B.T. Sully, Q.C., senior counsel for the Minister. However, I have formed the opinion that the consideration I have mentioned was not properly undertaken and that there were errors in the approach adopted by the officers of the Australian Customs Service. A simple illustration is that the Minister's decision as to normal value and his decision that dumping duty should be applied were taken in May 1985, based upon Gunnebo's December 1983 price list less A%, adjusted for some minor items with which I shall later deal. The normal value then arrived at by ACS and the Minister has been the normal value adopted by ACS since that date, notwithstanding that Gunnebo has since issued other price lists. As a matter of law, the approach taken by ACS in this respect has been wrong. Having decided that there was dumping and that the dumping was causing material injury to Australian industry, ACS has, with a view to protecting Australian industry against dumping, held steadfast to the view of normal value adopted by ACS and the Minister in 1985. ACS and the Minister have no power to fix normal value in this way. Normal value as calculated under sub-ss.5(1) and 5(5) is based upon the price in the country of export. Whenever that price alters, so does the normal value. Section 5 does not give to the Minister the power to fix normal value for the purposes of the Act, it empowers him under sub-s.5(5) to give directions as to any adjustments that ought appropriately to be made to the price in the country of -8- export. If he gives directions to adjust the home price by reason of advertising, packing, terms of trade, quantity discounts and the like, those directions will stand until altered. But they must be given effect by being applied to the price which the exporter receives from time to time on sales in the country of export. Whenever the exporter changes his domestic price, the normal value should be recalculated. Yet, a minute paper of 8 December 1986 shows that normal values for Kanthal were based by ACS on the Swedish price list of 27 December 1983 while a letter from ACS to Kanthal's customs agent of 23 June 1987 states that "comparison of these prices ... show that dumping margins are apparent." The Act does not intend that 1987 export prices will be compared with 1983 domestic prices. To make such a comparison when later domestic prices are known is inconsistent with sub-ss.5(1) and (5). There was an even more significant and fundamental error in the approach of ACS. The simplest and most straightforward manner of calculating "the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export and sales that are arms-length transactions by the exporter" was to adopt the price set out in Gunnebo's price list as published from time to time. That price could then be adjusted, having regard to all the relevant circumstances of the sale to the applicant. One such relevant circumstance was the quantity of the trade between Gunnebo and the applicant, for the evidence available at the time and since has shown that the level -9- of discount was based wholly or primarily on quantity. Discounts for quantity are an ordinary feature of commerce. Having determined the appropriate level of discount, the Minister ought to have given a direction pursuant to sub-s.5(5) as to it and that adjustment together with any other adjustments directed ought to have been applied to Gunnebo's price list from time to time. Rather than adopt this approach, the original calculations adopted as "the price" the price payable by two Swedish purchasers who were said to be dealing at the same level of trade as Kanthal. The price so adopted was list price minus A% for that was the discount received by these two Swedish companies. The exercise was flawed. The two Swedish companies whose prices were adopted, Kull & Hallberg and Stallinef, did not in fact have a trade similar to that of Kanthal. In later years, another company, SIGAB, which had earlier received a discount of some percentage, but later received A&%, being a somewhat higher percentage, was adopted by ACS as the benchmark. Even so its level of trade was not shown to be comparable. But the more important point is that it was made clear in the first investigative report on this matter that discounts were not based on the level of trade. Indeed SSAB, which received the greatest discount, was described in that report as an end user. It was made plain in that report and in subsequent reports that the discounts were based wholly or primarily upon quantity. The task was therefore not to determine the price paid by a Swedish company regarded as trading at the same level but to ascertain what discount the volume of trade which Kanthal had with Gunnebo ~10- would have attracted if Kanthal had been trading 1n Sweden. That task was never undertaken. Rather, the prices paid by Kull «& Hallberg and by Stallinef were adopted and the Minister gave no direction as to the level of discount. It will often be appropriate to adopt the price charged by the exporter to domestic purchasers who operate at the same level of trade (wholesale etc) as the importer. Thus, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, which entered into force for Australia on 21 October 1982, states in Article 2, paragraph 6:- "... the two prices shall be compared at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possible the same time." However, that approach is not appropriate where, as in the present case, a domestic purchaser or purchasers fairly comparable to the importer cannot be identified or where, as in the present case, domestic prices are not calculated by reference to the level of trade but by reference to the quantity of sales. Another error in the reasoning process was that it was thought that sales to SSAB should be ignored because the discount rate given to SSAB took into account the total level of sales from Gunnebo to that company and not just its sales of the subject goods. But this fact did not provide a reason for rejecting the relevance of the sales to SSAB. It simply pointed to the necessity to determine what discount Kanthal would have received having regard to the quantum of the purchases made by it. That was not done for the price of list price less A% was adopted by reference to the -11- wholesale level of trade, not the volume of sales. In brief, notwithstanding that the discounts 1n Sweden were primarily quantity discounts, the Swedish prices were not adjusted by the Minister or ACS for the purposes of dumping duty, by reference to the fact that the sales of the subject goods to Kanthal far exceeded the sales of such goods to any other purchaser, whether Swedish or overseas. I turn now to the facts in more detail, first to a report dated 13 November 1984 made by Mr A.L. Walsh, ACS representative in Brussels. Mr Walsh reported, inter alia:- "6.3 Domestic sales are by price list, a copy of which is at Appendix 11. From this list price discounts are available with 5 or 6 customers receiving discounts in excess of [X]%; these customers take [Y]% of all sales. 6.4 Appendix 12 is a list of these customers showing their discounts Discounts are negotiated annually, with each individual customer of importance. Appendix 12 is a copy of latest SSAB negotiation. 6.5 The sum of sales to the Australian customer 1s well in excess of sales to any of the above companies. Gunnebo claim that as Swedish Steel (SSAB) is their largest customer, the discount granted for normal value purposes should be [2]%. Reference to Appendix 13 however will show that this company (an end user) has a lesser off~take than the other companies (distributors) but receives a higher discount. I can only conclude that total sales of all Gunnebo products influence SSAB receipt of the highest discount and therefore the discount available to the national distributors should be the appropriate level. 6.7 Whilst I recognize that Australian sales of the goods under reference are well in excess of domestic sales, for a domestic end user to be granted a higher -12- discount than a distributor, suggests the discount structure 1s based on total sales rather than sales only of the Chain and Lifting Division. Accordingly it is probable that the discount to the two national distributors is similarly arranged. I also recognize that there remains a difference in level between master distributor and distributor however no adjustment is considered necessary for this fact as 1t is apparent that quantity or other reasons determines the discount level not the level in the market. 6.8 Accordingly without more detailed information on the Swedish domestic structure, I consider A% as the appropriate discount from the price list. It should be noted that my reservation to accept any higher discount was made known to Gunnebo, particularly the thought that the discount was based on total sales, and acceptable evidence has not been presented to change that view. It is also likely that sales to Australia may in the short term diminish after the initial stock build up. 6.11.In view of the information provided in the two previous paragraphs, I am satisfied that domestic price list amounts less a discount of A% represent sales in the ordinary course of trade and are valid for use in determining normal value vide Section 5(1) of the C.T.A.D.A." Mr Walsh then went on to consider what he regarded as the due allowance claims to be considered under sub-s.5(5). The due allowance items did not include a discount for quantity. As stated in the above paragraphs, Mr Walsh was of the view "that quantity or other reasons determines the discount level not the level in the market." and that "the discount structure 1s based on total sales rather than sales only of the Chain and Lifting division." Yet, Mr Walsh never formed a view as to what discount was appropriate having regard to Kanthal's quantity of sales. Notwithstanding his finding that the discounts appeared to be related to quantity, Mr Walsh did not go on to consider the significance of his finding that the sales to Kanthal were well in -13- excess of the sales (presumably of the subject goods) to any of the Swedish companies. A subsequent report of 26 September 1985 by Mr M.J. Henry, ACS representative in Brussels, likewise found that the top ten customers in Sweden take a volume of trade roughly equivalent in total to the applicant's volume in trade (presumably also of the subject goods). Mr Walsh understood the substance of this fact but failed to consider what discount was appropriate in the light of the quantity of the Australian trade. On 14 December 1984, Mr Henry who was then in Australia, reported:- "Sales of the goods under reference are made on the Swedish domestic market, therefore normal values are assessed in accordance with sub-section 5(1) of the Act." Mr Henry then went on to consider discounts and other due allowances. He reported:- "An A&$ discount on each individual item is considered the maximum discount granted on domestic market. Level adjustment - Gunnebo has claimed on affidavit that discounts similar to those granted on the export market are available to any purchaser on the Swedish domestic market who takes similar volumes as Kanthal Australia. The ACR [Australian Customs Representative] questions this and I am not certain that the full amount should be given. However some allowance should be made;" Mr Henry also took into account other allowances. In the end he concluded that there was only minor dumping and that any dumping was not injurious to the Australian market. Mr Henry even then did not -14- squarely face up to the issue of the quantity discounts and did not seek to determine what discount the volume of Kanthal's purchases would have attracted if they had taken place in Sweden. He did not act upon Gunnebo's affidavit. Mr Henry's reference to A% as the maximum discount was incorrect for SSAB always received a discount in excess of that. In any event, the maximum discount 1n Sweden was not determinative for Kanthal had a much greater trade in the subject goods than any Swedish purchaser. In April 1985, an inquiry into the subject goods resulted in Dumping Report No. 107. On the question of price the report was brief and not illuminating. The report said:- "9.5 Evidence was obtained of arms length sales made by the exporter to domestic customers in the ordinary course of trade. These sales have been used by the Department as the basis for normal value assessment under sub-section 5(1) of the Act. 9.6 Discounts which are given in domestic sales made in the ordinary course of trade have been allowed from domestic list prices." The normal values set out in Appendix 5 to the Dumping Report were based upon the December 1983 price list less A% discount with other minor adjustments. The Minister accepted the Report and, on 8 May 1985, signed a declaration of the application of s.8 of the Act. That was published in the Commonwealth of Australia Gazette on 14 May 1985. On 8 May 1985, the Minister also signed a direction to adjust the normal value, under sub~s.5(5). The figures given as to normal value prior to the adjustment were ~15- those set out in the Dumping Report, that is to say 1983 list prices less A%. That direction of 8 May 1985, which was based upon the December 1983 price list, has since been treated by the ACS as establishing "the price" for the purposes of sub-s.5(1) and therefore normal value prior to adjustment under sub-s.5(5). Yet, a report from Mr Henry of 26 June 1986 referred to a price list of 20 August 1984 and to a November 1985 price list which Mr Henry described as the latest. Mr Henry recommended in that report that normal value should be based upon the November 1985 price list less a quantity discount greater than A% and other due allowances totalling a certain percentage. Information obtained by Mr Henry after the decisions of 8 May 1985 confirmed information in earlier reports, namely, that the discounts were based on quantity not on the level of trading. In his report of 26 September 1985, Mr Henry said:- "3.7 Sales on the domestic market are made to end users, whereas sales on the export market are made to sister companies or direct subsidiaries who act as distributors, or to no related distributors who have a sole agency agreement. Not all direct subsidiaries handle the full range of Gunnebo's products, so in some countries there is a sole agent (not related) who handles chain and lifting components while the company's direct subsidiary handles other goods, such as fastening equipment, or fencing or stainless steel wire. 6.3 Gunnebo sell directly to end users and do their own distribution. During initial discussions -16- Gunnebo claimed to sell some 30% of its produce to local distributors. However an indepth examination of the market showed that these 'distributors' were not Gunnebo distributors and did not receive any consideration over and above that accorded other customers. A.C.R. Walsh in his report noted the peculiarity of end users receiving better discounts than 'distributors'. In reality these 'distributors' are really end users who may or may not opt to onsell some of their purchases. 6.4 Gunnebo claim their domestic customers to be around 800 in number. However a small proportion of these take a significant proportion of domestic sales. ... 6.5 Prices are list less negotiated discounts. These discounts are said to be granted according to purchasing power. Gunnebo claims that selling prices to a customer, such as Swedish Steel [SSAB], are discounted bearing in mind evaluations of current market conditions to a big customer. No special conditions are applicable. Latest domestic price list 1s at Appendix 5." Despite requests for reconsideration, and action taken by way of reconsideration, ACS did not shift its ground, save as I have said that the two companies on whose discounts the original finding was based ceased to figure in reports. Apart from Mr Henry's report of 26 June 1986, which has not been implemented, the earlier processes of reasoning, which I have found to be erroneous, continued. See, for example, the report of 26 September 1985 in which Mr Henry reported:- "6.6 Appendix 6 is a random selection of invoices for larger and smaller buyers on the domestic market showing various discounts according to volume bought. It is noted that the largest buyer, Sigab AB receives an A% discount, whereas Swedish Steel receives a higher percentage for smaller quantities. Since discounts are given for purchasing power, it is deduced that Swedish Steel receive the extra discount for purchases other than G.U.R. As such these are not allowable." -17- This finding was made notwithstanding Mr Henry's earlier comment that the applicant had a trade roughly equivalent to the total of the trade of the top ten customers in the subject goods. Likewise, on 20 November 1985 the Assistant Comptroller-General, Dumping Policy and Administration Branch, wrote to Kanthal's Customs agent as follows:- "Following our discussions on 31 October 1985 I now confirm that prices to SIGAB AB, on the basis of domestic list prices less A%, presently reflect the appropriate basis for normal value, established in terms of sub-section 5(1) of the Customs Tariff (Anti-Dumping) Act 1975. The normal values established under this provision have been adjusted in accordance with the provisions of Section 5(5) and 5(9) of that Act. It is conceded that SVENSKT STEEL [SSAB] presently enjoys a discount of domestic list prices in excess of A%. However, information available to this office indicates that SVENSKT STEEL presently takes a lesser quantity of the particular chains and fittings under inquiry (vide paragraph 2 of Dumping Report No. 107) than does SIGAB AB. Offtake by SIGAB AB of these particular chains and fittings ('like goods') is understood to be closest in volume to imports by Kanthal Australia Pty Ltd. In these circumstances and in accordance with current administrative practice, sales to SIGAB AB are appropriate in terms of sub-section 5(1) of Australia's anti-dumping legislation to determine normal value. Discounts available because of volume of sales of 'other' goods are not taken account of in determining appropriate discount level." In brief, the erroneous reasoning continued. The evidence does not disclose any change from the prices specified in the Dumping Report and the Minister's direction of 8 May 1985. On 20 January 1987, the Acting Minister wrote to Kanthal's customs's agent that, "The review of normal values is complete ..." If any change to normal values was perceived in the review, that change has not been communicated to Kanthal. -18- The principles to be applied were recently considered in Minister for Aboriginal Affairs & Anor v. Peko-Wallsend Ltd and Ors (1986) 66 A.L.R. 299. Mason J., with whose reasons Gibbs and Dawson JJ. expressed general agreement, said at pp.308-9:- "The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision 1s one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action. That ground now appears in s 5(2)(b) of the ADJR Act [Administrative Decisions (Judicial Review) Act 1977] which, in this regard, is Substantially declaratory of the common law. Together with the related ground of taking into account irrelevant considerations, it has been discussed in a number of decided cases, which have established the following propositions: (A) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he 1s bound to take into account in making that decision (Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375; CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 at 183, 196-7; Ashby v Minister of Immigration [1981] 1 NZLR 222 at , 230, -3). The statement of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] I KB 223 at 228, that a decision- maker must take into account those matters which he 'ought to have regard to' should not be understood in any different sense in view of his Lordship's statement on the following page that a person entrusted with a discretion 'must call his own attention to the matters which he is bound to consider'. (B) What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this court has held that, where a statute confers a discretion which in its -19- terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except 1n so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard (see R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 27 ALR 321; 144 CLR 45 at 49-50, adopting the earlier formulations of Dixon J 1n Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at -8, and Water Conservation and Irrigation Commission (NSW) Vv Browning (1947) 74 CLR 492 at 505). By analogy, where the ground of review 1s that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject matter, scope and purpose of the Act. (C) Not every consideration that a decision-maker 1s bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor might be so insignificant that the failure to take it into account could not have materially affected the decision (see, for example, the various expressions in Baldwin & Francis Ltd v Patents Appeal Tribunal {19 AC at } Hanks v Minister of Housing and Local Government [1963] I QB 999 at 1020; Rv Chief Registrar of Friendly Societies; Ex parte New Cross Building Society Tiseay QB 227 at x65) A similar principle has been enunciated in cases where regard has been had to irrelevant considerations in the making of an administrative decision (R v Bishop of London (1889) 24 QBD 213 at 226-7; R v Rochdale Metropolitan Borough Council; Ex parte Cromer Rin Mill Ltd [1982] 3 All ER 761 at ESTO. (D) The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role 1s to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned (Wednesbury Corporation at 228)." Mr Sully laid emphasis on the difficulty which the Minister and the ACS face in a matter such as this in obtaining information and in arriving at a decision. He said -20- that ACS did the best it could by sending officers to Sweden to discuss the matter with Gunnebo and to report back. Mr Sully referred to the well known statement of Deane J. in Sean Investments v. MacKellar (1981) 38 A.L.R. 363 at 374-5. Mr Sully submitted that all relevant matters were taken into account. One should certainly not look unduly critically at what has occurred in a matter such as this. ACS has difficulty in ascertaining what are the relevant facts with respect to transactions that occur in other countries. And sub-s.5(4) of the Act recognises this. Nevertheless I am of the view that, in the present case, there was a failure to consider the issues on a correct basis. There was a failure to adjust Gunnebo's listed prices having regard to the quantity of Kanthal's trade. There is nothing in the material before the Court which discloses a decision by ACS as to what was the appropriate discount from the price list having regard to the volume of the Australian trade set and no direction was given by the Minister with respect to it. That was not a matter of peripheral interest. It went to the heart of the issue. In the circumstances, I am of the view that there was a failure on the part of the Minister to consider a relevant and crucial issue which ought to have been considered having regard to "the subject matter, scope and purpose of the Act". Normal value could not properly be ascertained for the purposes of the Act unless that aspect of the matter was investigated and a view formed on it. -21- For these reasons I am of the view that the Minister's two decisions of 8 May 1985 and the publication of the declaration under s.8 in the Government Gazette on 14 December 1985 were wrong in law and should be annulled. The failure to take into account a relevant consideration that, in the circumstances of the case, the decision-maker was bound to consider, is an error of law resulting in an improper exercise of the statutory power. See s.5(1)(e) and s.5(2)(b) of the Administrative Decisions (Judicial Review) Act 1977. The next issue raised in the proceedings relates to allowances claimed by Kanthal under sub-s.5(5) but disallowed by the Minister in his direction of 8 May 1985. The recommendation which went to the Minister on 30 April 1985 from the Assistant Secretary, Dumping Operations Branch, gave effect to the findings in Dumping Report No. 107. It appears that the principal material brought to the Minister's attention was that report. Paragraph 9.7 and 9.8 of the report dealt with the matters as follows:- "9.7 A further adjustment to domestic net prices has been made under the provisions of sub-section 5(5) of the Act in order to take account of differences between conditions and terms of domestic sales and those of export sales to Australia in relation to identification tags. These expenses relate to differences in required specifications between goods for the domestic market and those exported to Australia. 9.8 The following claimed adjustments were disallowed: Sales Promotion: in relation to advertising, exhibitions and special -22- activities expenses, the Department considers that these expenses are in the nature of fixed expenses which would be incurred whether or not sales are made and therefore they have been disallowed. Furthermore, in respect of the claim for catalogue expense, the Department has evidence which indicates that this expense is borne by the exporter in both the domestic market and the export market to Australia. Packing: The Department 1s not satisfied as to the existence and the extent of any difference between packing for export sales and those for domestic sales. Field Sales Organisation: these are considered to be fixed expenses which would have been incurred whether or not sales were made to Australia. Service Stock: these are considered to be fixed expenses which would have been incurred whether or not sales were made to Australia. Proof Test Costs: from the evidence provided during overseas inquiries with the exporter, these costs appear to be incurred whether the goods are for export or domestic consumption. Added Administrative Costs: these are considered to be fixed expenses which would have been incurred whether or not sales were made to Australia." It will be seen that, with respect to the items of sales promotion and field sales organisation, these items were disallowed on the ground that they were "fixed expenses which would be incurred whether or not sales are made". Administrative expenses were disallowed on a like basis. It was correctly submitted by Mr Tobias that the reasoning of the report in this respect was in error and failed to turn its attention to the correct issue. It is this very type of expense, an expense that would have been incurred whether or not there had been sales to -23- Australia, that ought to be considered for allowance under sub-s.5(5). Only those costs which, in an ordinary arms length transaction, one would expect to be reflected in the prace of goods sold to Australia should be taken into account. If there are other costs in the domestic market which one would not expect to be reflected in an arms length price of sales to Australia, then they should be considered for allowance. Mr Tobias pointed to the fact that Gunnebo sold the subject goods to more than 800 customers throughout Sweden and that some of its sales were at the retail level. He pointed out that Gunnebo conducted an advertising and promotions campaign directed to the Swedish market and that 1t maintained a sales and after sales organisation which serviced the Swedish market. Mr Tobias submitted with force that the costs of these activities were not costs that one would expect to be reflected in the price of goods sold to Australia for they had no application to Australian sales. The matters so pointed out were suggestive of differences which ought to be considered for allowance under sub-s.5(5). It is of no moment to say that there would have been incurred whether or not there were sales to Australia. That is the very point of considering their allowance under sub-s.5(5). Mr Tobias also correctly pointed out that these costs were not properly characterised as fixed costs. They were ordinary revenue expenditure of Gunnebo. They were not matters related to the fixed capital structure of the Gunnebo ~24- organisation. I agree with Mr Tobias's submission that the reasoning of the report was in these respects in error. I do not, however, accept Mr Tobias's contention that necessarily an allowance should have been made for these costs. It may well be that the discount levels over a certain rounded percentage have, ina broad way, taken matters such as this into account. Once the appropriate discount level has been adopted, there should not be any further allowance made for matters which would have been taken into account in arriving at that level. I therefore make it clear that I express no view one way or another as to whether allowances under sub-s.5(5) should be made for these items. That is a matter for further investigation and consideration. The finding with respect to packing was that the ACS was not satisfied as to the existence and extent of any difference. Mr Tobias rightly said that this is a matter to which attention ought specifically to have been directed and the facts of the matter ascertained. If there were differences in packing for the domestic market on the one hand and for export on the other, that difference should be taken into account under sub-s.5(5) so as to increase or to reduce the price otherwise determined. It was unsatisfactory to leave the matter in the situation as it was left when Mr N.C. Balzary reported on 20 February 1985, thus:- "disallow; unless this was positively verified ... What is the physical difference between domestic and export packing if any and what is the cost difference? That's what I want to know." -25- Mr Balzary's questions were relevant but it was not satisfactory to leave this issue in this uncertain light, as 1t remained at the time of Dumping Report No. 107. Again, I do not indicate that this is an item that should have been allowed. But the facts should have been ascertained. I note that Mr Henry, who subsequently investigated the question of due allowances, did not ascertain any difference in packing costs that ought to be taken into account. Stock costs were disallowed on the basis that they were fixed expenses which would have been incurred whether or not sales were made to Australia. This reasoning likewise was in error and I need not repeat myself. With respect to stock costs, Mr Tobias put the view that there were differences between Gunnebo's costs for the domestic Market and for the export market for Gunnebo was required to hold stock for the domestic market whereas Gunnebo supplied Kanthal pursuant to substantial forward orders and it was Kanthal which held the stock in Australia and incurred the stock costs. These are matters which deserve consideration and Mr Henry's reports of 26 September 1985 and 26 June 1986 both supported an allowance in this regard. But they are matters for the Minister's consideration once the facts have been ascertained. I repeat in this regard also that any allowance made should not duplicate matters broadly taken into account in the discount level. I need say no more about these matters. As I have -26- already indicated, the discount level was one of the matters with respect to which a direction pursuant to sub-s.5(5) should have been given. The direction actually given on 8 May 1985 should be annulled. If the Minister considers the matter further, his consideration will take account of all relevant items including the matters I have discussed above. The last major issue to mention is the claim made under s.6 of the Administrative Decisions (Judicial Review) Act 1977 with respect to the action, or from Kanthal's point of view the inaction, which occurred after the Minister's decisions of 8 May 1985. On 29 July 1985, Kanthal's customs agent sought "an urgent review of the established normal values". Other requests for a change of view followed. On 4 December 1985, Kanthal's customs agent requested the Assistant Comptroller-General to give favourable consideration to the issue of a notice under sub-s.20(1) of the Act. That sub-section read prior to amendment:- "The Minister may, by notice published in the Gazette, revoke a notice published in pursuance of this Act and shall do so if he is satisfied that, if the notice were not in force, he would not be authorized by this Act to cause the notice to be published." On 13 October 1986, Kanthal's customs agent formally requested the Minister to revoke his Dumping Notice of 8 May 1985. The last evidence before the Court is a letter from the ACS of 28 August 1987 which stated that the ACS was examining the current injury situation and that after further investigation 1t would be in a position to make a recommendation to the Minister as to whether or not the measures should be revoked. ~27- The original proceedings, No. G259 of 1986, were lodged prior to the making of the formal request to the Minister for revocation of the Dumping Notice. Accordingly, Application No. G564 of 1987, was lodged on 6 November 1987 to encompass the action or inaction which occurred after the lodging on 2 July 1986 of the application in G259 of 1986. These proceedings under s.6 of the Administrative Decisions (Judicial Review) Act 1977 appear to me to have been largely misconceived. For example, both applications included the extravagant claim that "as to the conduct, that an error of law, has been, is being or is likely to be committed in the course of the conduct and is likely to be committed in the making of the proposed decision (whether or not to revoke Notice No. 1985/D17)." The amended statement of claim likewise included the ground "24.(e) there is no evidence or other material to justify the making of the proposed decision, if it were a decision against revocation of the Notice." Plainly, claims such as these cannot be supported. Counsel for the applicant were asked to submit proposed orders under this part of the application. Minutes of six proposed orders were submitted, of which the first was:- "A. An order that the re&Spondent consider according to law and in accordance with the reasons for this judgment whether to revoke Notice No. 1985/D17 pursuant to s.20(1) of the Customs Tariff (Anti~Dumping) Act 1975." Perhaps counsel intended that these reasons for judgment would consider the voluminous correspondence in detail, making comments thereon as a guide to the Minister so that he could consider the -28~ Matter in accordance with the reasons for judgment. But the function of the Court 1s not to advise the parties with respect to what should be done. Its sole function is to determine whether or not there has been an error which should be corrected by an order of judicial review. However, it is unnecessary to consider this aspect of the application further. I have already stated my view that the Minister's decisions of 8 May 1985 were in error and should be set aside. No further order is required. Mr Sully thought it proper to bring to the Court's attention a view held that, while the Court has power to set aside the decision of the Minister to make and issue the Dumping Notice, that order may be ineffectual in a practical way because the Minister's declaration did not take effect of its own force, but only on its publication in the Gazette. Mr Sully said that publication occurred on 14 May 1985 and that was a fact which could not now be set aside. In this submission, Mr Sully put the view that the appropriate order of the Court might be that the Minister revoke the Dumping Notice pursuant to sub-s.20(1). I would not direct the Minister to revoke the Dumping Notice on the ground that, if the notice were not in force, the Minister would not be authorised by the Act to cause the notice to be published, that is to say on the ground specified by sub-s.20(1). I have no view and it would be inappropriate that I should form a view as to what is the normal value of the subject goods, as to whether that normal value is above or below the -29- price at which Kanthal has been importing goods or threatens to import goods and as to whether in any event there 1s any material injury to Australian industry or threat thereof. These are all Matters for the Minister, not for the Court. However, s.16 of the Administrative Decisions (Judicial Review) Act 1977 empowers the Court to make an order either setting aside or quashing a decision. Paragraph 16(1)(a) provides:-— "16. (1) On an application for an order of review in respect of a decision, the Court may, in its discretion, ig make all or any of the following orders: an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the Court specifies (a) The Oxford English Dictionary gives these meanings of the verb "quash":- "1. fo annul, to make null or void (a law, decision, election, etc.); to throw out or reject (a writ, indictment, etc.) as invalid; to put an end to, stop completely (legal proceedings). 2. To bring to nothing; to crush or destroy; to put down or suppress completely; to stifle (esp. a feeling, idea, scheme, undertaking, proceeding, etc.) " In legal proceedings, the word "quash" has been most frequently used in proceedings when certiorari has been sought and ordered to correct errors of judicial and quasi-judicial bodies. In R. v. Northumberland Compensation Appeal Tribunal, Ex parte Shaw (1952) 1 K.B. 338, Denning L.J. considered the history of the -30- remedy of certiorari. At pp.350-1, his Lordship said, in relation to statutory tribunals:- "The Court of King's Bench used on certiorari to quash the orders of the commissioners for errors on the face of them, such as when they failed to set out the facts necessary to show that they had jurisdiction in the matter, or when they contained some error in point of law. It is recorded that on one celebrated occasion the commissioners refused to obey a certiorari issued out of the King's Bench, and for this the whole body of them were 'laid by the heels.' The control thus exercised over the Commissioners of Sewers was used by Holt C.J. aS a precedent to control by certiorari the orders of any tribunal set up by Parliament, such as the College of Physicians and the Commissioners for the repair of Cardiff Bridge. Since that time it has never been doubted that certiorari will lie to any statutory tribunal. It was suggested before us on behalf of the Crown that, in the case of these statutory tribunals, the Court of King's Bench only interfered by certiorari to keep them within their jurisdiction, and not to correct their errors of law. There are, however, many cases in the books where certiorari was used to correct errors of law on the face of the record. A striking instance was where the Commissioners of Sewers imposed an excessive fine, and it was quashed by the Court of King's Bench on the ground that in law their fines ought to be reasonable. Other instances are the numerous cases where certiorari was used to determine the validity of a sewer's rate imposed by the Commissioners of Sewers. There are several cases where an auditor's certificate has been quashed for error of law on the face of it. And I have no doubt that many more instances could be found throughout the books. The principles on which the court acted in the case of the Commissioners of Sewers will be found set out in Cummins v. Massam (1643) March 196 (ed. 1675), 202 (ed. 1685). See Callis on Sewers (4th ed., 1823), pp.203-4, 342-4; and Chitty's Practice, Vol.II, at p.370. The decisions of Holt C.J. are Groenwelt v. Burwell (1700) 1 Salk. 144; 1 Ld.Raym. 454-469 and the case of Cardiff Bridge (1699) 1 Salk. 146; 1 Ld.Raym. 580. The case of an auditor's certificate is Reg. v. White (1883-4) 11 Q.B.D. 309; 14 Q.B.D. 358. His Lordship held that the appeal should be dismissed and said, at p.354:~ "we have here a simple case of error of law by a tribunal, an error which they frankly acknowledge. The decision must be quashed, and the tribunal will then -31- be able to hear the case again and give the correct decision." In the 19th century, parliaments, both 1n the United Kingdom and Australia, provided many statutory means of challenging many decisions by way of certiorari, particularly decisions as to the imposition of rates. Thus, in The Attorney-General v. The Shire of Hampden [1876] 2 V.L.R. 138 at 146, 1t was said of provisions of the Local Government Act 1874 (Vic) enabling an appeal against a rating decision:- ""... at all events the Court of General Sessions, if its attention were called to the hardship, and it were satisfied of its existence, might totally quash the rate." See also Menzies v. Shire of Newshead [1870] 1 V.L.R. 88 at 89. I need not give further examples. The word "quash" came to be used in a wide variety of circumstances when it was desired to annul for error what had occurred by way of decision or proceeding. The width of the term was recently enunciated by Moffitt P., with whom Hutley & Glass JJ.A. concurred, in Bilbao v. Farguhar (1978) 1 N.S.W.L.R. 528 at pp.538-9. His Honour said:- "First they rely upon the nature of the order provided by s.37(2) as the step preliminary to ordering another inquest, namely that the 'first inquest ... be quashed'. It was argued that only an order could be quashed and that to guash an inquest meant only to quash the ultimate finding. In support they called in aid the alleged nature of the prerogative power to quash in relation to inquests. No authority was produced which supports this submission. Of course, it is fairly unlikely that such a question would arise, except where there existed some provision such as s.28. In any event, reliance on the alleged earlier law is inconsistent with the appellants' arguments that seek to reject the prerogative powers on the basis that they ~32- have been displaced by the Supreme Court Act, 1970 by reason of it being a code. TE this were so, and indeed in any event, the question is: What meaning is to be given to the word 'quashed' in this Act with the novel provision made by s.28? and not: 'What were the limits of the common law power to quash?' I would not agree that the word 'quash' has the limited meaning contended for. The Oxford English Dictionary provides the following: '1. To annul, to make null, or void, (a law, decision, election etc.); to throw out (a writ ... etc.) as invalid; to put an end to ... (legal proceedings). 2. To bring to nothing; ...' The words used 1n s.37(2) provide that 1t is the 'inquest ...' which may be quashed. In terms the power is not confined to the finding. In any event, I find no difficulty in applying the word ''quash' to an inquest where there has been a decision not to resume it, or to an inquest where the evidence has been taken and the coroner has come to a conclusion the subject of a statement which he transmits to the Attorney-General. An order made by the Supreme Court quashing such an inquest nullifies the proceedings of the coroner, including any decision come to by him in exercise of his jurisdiction as a coroner, so the new inquest then ordered takes its place." It is, therefore, not necessary to consider whether an order that the dumping declaration of 8 May 1985 published in the Commonwealth of Australia Gazette on 14 May 1985 be set aside would be ineffective to annul that notice. I am inclined to think it would not. An order setting aside what has occurred in the past does not change the facts of what occurred but merely deems what occurred to be of no effect in the eye of the law. However, the word "quash" is the appropriate term to use for it is understood to annul what has occurred whether that occurrence took place by publication in a gazette or otherwise. In the circumstances, the Court should declare that the dumping declaration of 8 May 1985 published in the Gazette on 14 May 1985 and the direction given under sub-s.5(5) of the Act on 8 May 1985 were and are void and order that they be quashed ab initio. The respondent should pay the costs of these proceedings -33- but the respondent should have any costs thrown away by the late amendment to the statement of claim made during the hearing of the proceedings. During his submissions, Mr Tobias intimated that he may seek to have the order of the Court include an order as to the repayment of any dumping duty paid and like ancillary relief. I shall therefore not now make any formal order but direct that, within five days, counsel for the applicant bring in agreed minutes of order in accordance with these reasons. In the event that there is any dispute as to the form and content of the order, I shall hear counsel thereon. I certify that this and the 32 preceding pages are a true copy of the Reasons for Judgment (amended for general publication) of the Honourable Mr Justice Davies. Associate: Jo Geade, Date: 23 December 1987 Counsel for the applicant: Mr M.H. Tobias Q.C. with Mr B. Walker Solicitors for the applicant: c.G. Gillis & Co. Counsel for the respondent: Mr B.T. Sully Q.Cc. with Mr G. Hosking Solicitors for the respondent: Australian Government Solicitor Dates of hearing: 2-5 November 1987