FEDERAL COURT OF AUSTRALIA ADMINISTRATIVE LAW - Administrative Appeals Tribunal decision affirming respondent's decision to refuse applicant's application for a tariff concession order for imported French oak barrels for maturation of wine - whether Tribunal incorrectly interpreted Customs Act 1901 (Cth), s 269C(b) - whether evidence to support Tribunal's decision - whether decision was Wednesbury unreasonable - whether irrelevant considerations were taken into account - whether inadequate reasons were given for the Tribunal's conclusions. WORDS AND PHRASES - "the market for the substitutable goods" - "substitutable goods" - Customs Act 1901 (Cth), ss 269B(1) and 269C(b). Administrative Appeals Tribunal Act 1975 (Cth) - ss 43(2B), 44 Customs Act 1901 (Cth) - ss 269C, 269P Trade Practices Act 1974 (Cth) - s 4E In re Tooth & Co Ltd; In re Tooheys Ltd (1979) ATPR 40-113 Trade Practices Commission v Australian Meat Holdings Pty Ltd (1988) ATPR 40-876 Queensland Wire Industries Pty Ltd v BHP Ltd (1988) 167 CLR 177 Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598 Tabag v Minister for Immigration and Ethnic Affairs (1982) 45 ALR 705 SEGUIN MOREAU, AUSTRALIA v CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS SERVICE & ORS VG 82 OF 1996 DRUMMOND J BRISBANE 14 AUGUST 1997 IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG 82 of 1996 ) GENERAL DIVISION ) BETWEEN: SEGUIN MOREAU, AUSTRALIA Applicant AND: CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS SERVICE Respondent A P JOHN & SONS PTY LTD and C A SCHAHINGER PTY LTD Parties Joined JUDGE: DRUMMOND J PLACE: BRISBANE DATED: 14 AUGUST 1997 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The applicant pay the respondent's costs of and incidental to the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG 82 of 1996 ) GENERAL DIVISION ) BETWEEN: SEGUIN MOREAU, AUSTRALIA Applicant AND: CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS SERVICE Respondent A P JOHN & SONS PTY LTD and C A SCHAHINGER PTY LTD Parties Joined JUDGE: DRUMMOND J PLACE: BRISBANE DATED: 14 AUGUST 1997 REASONS FOR JUDGMENT This is an appeal under s 44 the Administrative Appeals Tribunal Act 1975 (Cth) from the decision of the Tribunal affirming a decision of the respondent. The respondent's decision was made under s 269P the Customs Act 1901 (Cth) (the Act); it was to the effect that the applicant's application for a tariff concession order (TCO) for "barrels, oak of the scientific name Quercus Robur and Quercus Petraea, of a kind used for the storage of wine during the maturation process in the production of table wine" did not meet the core criteria prescribed by s 269C of the Act. The respondent accordingly refused to make the TCO sought. The grounds of appeal are, firstly, that the Tribunal failed to properly interpret s 269C of the Act in so far as that it held that "the market for the substitutable goods" in s 269C(b) was limited to the market for locally made French oak barrels and did not also include the market for locally made American oak barrels; secondly, that there was no evidence to support the Tribunal's finding that a reduction in duty on imported French oak barrels was likely to have a significant adverse affect on the market for locally made barrels; thirdly, that in view of the evidence before the Tribunal to the effect that decisions made by Australian wine makers to purchase imported French oak barrels rather than Australian-made French oak barrels were not governed by price, but rather by the style of wine to be produced, the Tribunal's finding the subject of Seguin Moreau's second ground of appeal was unreasonable, in the Wednesbury sense of unreasonableness; fourthly, the Tribunal, in reaching its decision, took into account irrelevant considerations, viz, the debt servicing levels and efficiency of the Australian coopering industry and the apprenticeship scheme operated by that industry, and, fifthly, that the Tribunal failed to comply with its duty to give reasons for its conclusions that, since 1986, the fall in the volume of locally made French oak barrels and the increase in the volume of imported French oak barrels was a consequence of the reduction in import duty on the latter and that the grant of the TCO sought would be likely to have a significant adverse affect on the market for locally made barrels. I have summarised the numerous grounds of appeal to the five headings under which they can be grouped. Each is said to involve an error of law. The applicant applied under s 269F of the Act for a TCO in respect of imported French oak barrels used in wine making. The date fixed pursuant to s 269C by reference to which the question whether the applicant's TCO application met the core criteria was 23 February 1994. Submissions opposing the grant of this TCO were lodged with the respondent by three Australian coopers who make wine barrels from French oak and American oak. The Tribunal noted that this imported timber enters duty free, while the duty on imported French oak barrels (which had been reduced from 15% ad valorem to 10% by 1988 and which was 9% as at 23 February 1994) assists Australian coopers in competing with imported barrels. Following the respondent's refusal to grant the TCO, the applicant applied to the Tribunal for review of that decision pursuant to s 273GA(1)(n) of the Act. It was unsuccessful and has now appealed to this Court. Two of the three Australian coopers who opposed the grant of the TCO were joined as parties to the proceeding before the Tribunal. Extensive evidence, including evidence from a number of Australian wine makers, was put before the Tribunal. At the relevant date, s 269C provided: For the purposes of this Part, a TCO application is to be taken to meet the core criteria if, on the day occurring 28 days before the day on which the application was lodged: (a) no substitutable goods were produced in Australia in the ordinary course of business; or (b) substitutable goods were produced in Australia in the ordinary course of business but the granting of the TCO was not likely to have a significant adverse effect on the market for the substitutable goods. The terms "substitutable goods" were defined in s 269B(1) to mean: in respect of goods the subject of a TCO application or of a TCO, means goods produced in Australia that are put to a use that corresponds with a use (including a design use) to which the goods the subject of the application or of the TCO can be put. The Tribunal recorded in its reasons that: "As it is common ground that substitutable goods were produced in Australia in the ordinary course of business the question for consideration is whether the Tribunal is satisfied that as at 23 February 1994 the granting of a TCO was not likely to have a significant adverse affect on the market for the substitutable goods". It did not immediately identify just what goods comprised this agreed range of substitutable goods. In this Court, the respondent and the applicant acknowledged that what was agreed below was that all locally made barrels of French oak and American oak were substitutable goods in relation to the goods the subject of the TCO application. The respondent did not seek to resile from this concession, but submitted that "the market" referred to in s 269C(b) and which is of relevance to this appeal was not the market for all locally made barrels but only the market for locally made French oak barrels. The applicant submits that the legislation requires the decision-maker to identify the "substitutable goods" and then assess the impact of a TCO on the whole of that particular market; instead, so the applicant contends, the Tribunal assumed, conformably with what was common ground between the parties, that the substitutable goods were locally made barrels of both American and French oak and then assessed the impact of the TCO on only a discrete part of the market for those substitutable goods, viz, the part comprising trade in locally made French oak barrels. The respondent contends that this is the correct approach. It argues that the "market" in s 269C(b) is not co-extensive with the market for the "substitutable goods", which latter concept is defined in s 269B(1), and that s 269C(b) requires the decision-maker to assess what effect the TCO will have only on that part of the market for the substitutable goods in which there will be an impact from the introduction of duty-free imports. The Tribunal said: While it is true that barrels, whether of French or American oak, have a common containment function in the maturation process, the concept of a corresponding use, central to the definition of substitutable goods, necessarily involves purposes other than containment when considered in relation to French oak barrels. The use of French oak barrels, as the application recites, is the 'maturation of premium grade wine'. It would not be reasonable to conclude that the function of an oak wine barrel is merely the storage of wine and whether it is constructed of French oak or American oak is irrelevant. There would be more economical ways of storing wine than in such containers. The evidence indicates that French oak barrels are not interchangeable with American oak barrels for particular wine making styles. As such, the market for substitutable goods which may be significantly adversely affected by the grant of the TCO is the market for French oak barrels. The comments the Tribunal here made about French oak barrels having a more specific use than as containers for wine and also not being interchangeable with American oak barrels, can only sensibly be read as going to the issue of identifying just what are the Australian produced goods that are put to a use that corresponds with a use to which the imported French oak barrels can be put, ie, to the issue of what are the "substitutable goods" for the purposes of the case before it. I therefore reject the applicant's submission that the Tribunal never sought to identify what were the substitutable goods. The difficulty for the Tribunal was that it was confronted, as a result of the respondent's concession, with the parties saying that it was common ground that the substitutable goods produced in Australia were barrels of both American and French oak. But the Tribunal did not determine the case by asking whether the market for that broad range of barrels would be affected by the grant of the TCO. Instead, it identified the only market of relevance to that question as the market limited to locally produced French oak barrels. It appears clearly enough to have done this because it read s 296C(b) as referring to a market limited to "substitutable goods" and it could not identify that market without first identifying what were truly "substitutable goods" in relation to the TCO goods. By proceeding in this way, the Tribunal did not allow itself to be absolved, by the attitude of the parties as to what was common ground, from its duty to correctly identify just what were the Australian made goods that were "substitutable goods" with respect to the imported French oak barrels the subject of the TCO application. Having decided that it should confine its examination to imported French oak barrels and locally made French oak barrels, the Tribunal then considered the evidence touching on the consequences for Australian producers of French oak barrels of a reduction in duty, and thus in price, of imported French oak barrels. It found: The cost of French oak barrels is therefore an important factor in wine production and a reduction in duty on the imported barrel is likely to have a significant influence on purchasing decisions, to the detriment of the Australian coopers. The Tribunal concluded its reasons, saying: Consequently, on all of the evidence before us when applying the test required by the legislation the conclusion which must have been reached, as at 23 February 1994, is that the volume of locally made French oak barrels had declined since 1986, the volume of imports had increased as a consequence of reduced import duty and that the grant of a TCO at that time, when the duty was 9% with the certainty of a phased reduction down to 5% by the year 1996, was likely to have a significant adverse effect on the market for locally made barrels for the maturation of wine and for French oak barrels in particular. I read the reference to "the market" in this passage of the Tribunal's reasons as a reference to the market for locally made French oak barrels, not to a wider market encompassing both locally made American oak and French oak barrels: the Tribunal was careful to identify the only market it should examine in order to see whether the core criterion in s 269C(b) was satisfied as the market limited to those goods which came within the definition of "substitutable goods" in s 269B(1); it then identified that as the market for locally made French oak barrels. The Tribunal accordingly confined its examination of the evidence touching on what was likely to happen if the TCO was granted to the evidence dealing with the impact the lifting of duty on imported French oak barrels would be likely to have on the activities of Australian coopers in producing French oak barrels here; the Tribunal made no attempt to examine what impact the availability of cheaper imported French oak barrels might have on the production here of all barrels or on the production here of American oak barrels. In my opinion, the Tribunal was correct in construing s 269C(b) as requiring it to have regard to the impact of the grant of a TCO on the whole of the market for all the goods identifiable in the material before the decision-maker as "substitutable goods". It was also right to identify those goods as limited to locally made French oak barrels, once it concluded that French oak barrels were not interchangeable in use with American oak barrels, a factual conclusion the correctness of which is not attacked. I therefore agree with the applicant's submission as to the proper construction of s 269C(b). But I reject its arguments that the Tribunal was bound by the agreement of the parties to dispose of the case on the basis that the relevant "substitutable goods" embraced all locally made barrels; nor, as I have indicated, do I accept that it did determine the case on that basis. There is, in my opinion, no justification for the respondent's assumption the respondent appears to have made that s 269C(b) is intended to operate only by reference to an adverse effect on the totality of all kinds of goods produced in Australia that are capable of falling within the definition of "substitutable goods" in relation to a particular TCO application. It is true that a TCO, once made, permits anyone to import, duty free, goods of the description in the TCO. The provisions for public notification of the making of a TCO application and which entitle anyone to oppose the application (s 269K) and the provisions which empower the respondent to solicit submissions opposing a TCO application and to obtain information relevant to making a determination on that application (s 269M) suggest that a TCO is only to be made in circumstances in which the respondent will have identified all the kinds of goods made in Australia that are likely to be affected by the grant of the TCO. But the ordinary meaning of the words used in s 269C(b), and in the definition of "substitutable goods", is not such as to require the respondent to identify the entire range of locally made goods capable of being subjected to competition from the imported product before he can apply the criterion in s 269C(b) to a particular TCO application. If only one kind of locally produced good is identified and open to possible competitive harm from the imported good the subject of a TCO application, that is enough to require the respondent to consider whether the TCO application meets the criterion in s 269C(b): he does not have to satisfy himself that the entire range of locally produced goods capable of being harmed by competition from the imported good, if duty on it is removed, has been identified, before he can apply s 269C(b). In the Industry Commission Report No 9 of 8 March 1991, which, according to the Minister's Second Reading Speech on the Customs Legislation (Tariff Concessions and Anti-Dumping) Amendment Bill 1992 (Hansard, 7 May 1992, p 2665), introduced Pt XVA of the Act in the form which is of present concern, there is reference, at p 25 et seq, to the evolution of tariff policy to the stage where, at the date of the Commission's Report, Government policy involved the implementation of a program of phased tariff reductions. But although the core criteria in s 269C in force at the relevant date permitted the grant of a TCO where that would result in some harm to locally produced goods, ie, harm that does not, however, amount to "a significant adverse effect on the market for" those goods, that is only a limited qualification to what I consider remains the objective of the tariff concession system in Pt XVA. This was described by the Industry Commission as a system: "which, at least in principle, only permits tariffs to be waived in the absence of local production" (p 31). In my opinion, the object of Pt XVA of the Act continues to be to protect all Australian-made goods from competition of any significance from imported goods. That this is the legislative object is most clearly discernible from the provisions of Division 4 of Pt XVA: a TCO made when there was no local production touched by the imported product must be revoked, if a local manufacturer later commences production of a good with which the imported good the subject of the TCO will be actually or potentially competitive to a significant degree. The ordinary meaning of the words of s 269C(b) read with the definition of "substitutable goods" is that, if there is identified a single Australian operation producing goods (A) and a TCO is sought in respect of the importation of goods (B), if goods (B) are in fact put to the same use as goods (A) or are capable of being put to that same use, the TCO must be refused, if removal of duty on goods (B) would have a significant adverse affect on the Australian manufacturer's trade in goods (A). This is so whether or not goods (A) are the only locally made goods in fact likely to suffer from import competition. Reading the statutory provisions in this way gives full effect to the legislative intent and makes it unnecessary to give the expression "the market for the substitutable goods" in s 269C(b) the artificial meaning contended for by the respondent. In order to construe this phrase in s 269C(b), there is, in my opinion, no reason to go to concepts of substitution that play an important part in competition law, where the notion of "substitutable goods" is well known: it commonly describes the range of potential demand side substitutions, over the longer term, for a particular product. It is a concept that plays an important part in defining the market of relevance to a given competition law problem, eg, whether a supplier of a particular product accused of exercising monopoly power in fact has that kind of power in the market in which he sells his product. If there is what is judged, in the circumstances, to be a sufficient degree of cross-elasticity of demand between two products, the market of relevance to the particular competition law problem will include both. See s 4E the Trade Practices Act 1974 (Cth): In re Tooth & Co Ltd; In re Tooheys Ltd (1979) ATPR 40-113; Trade Practices Commission v Australian Meat Holdings Pty Ltd (1988) ATPR 40-876 at 49,480 and Queensland Wire Industries Pty Ltd v BHP Ltd (1988) 167 CLR 177 at 199 (where it is also pointed out that potential supply side substitutions may also be relevant in resolving such problems although, historically, emphasis has been placed on demand side substitutions). Whether one product is substitutable for another on the demand side (as well as on the supply side) involves questions of degree: Queensland Wire Industries at 199. It is not concerned with whether one product is put to a use to which another product is or can be put, so much as with what changes will take place in consumer preferences, in the longer term, if the supplier of a particular product gives less by, eg, raising prices or lowering quality. It is not a test capable of precise application. In contrast, the expression "substitutable goods" in s 269C(b) is given a precise meaning by its definition in s 269B(1): goods produced in Australia will be "substitutable goods" in respect of the goods the subject of a TCO application only if the goods produced in Australia are, at the relevant date, put to a particular use and that use corresponds with a use to which the goods the subject of the application for the TCO "can be put", ie, are in fact put or are capable of being put. It is only once goods produced in Australia meet this description that they will be "substitutable goods" in relation to goods the subject of a TCO application and, if goods produced in Australia are "substitutable goods", then s 269C(b) directs attention to "the market for the substitutable goods", ie, the market in Australia in which those Australian produced goods are traded. The expression "the market …" in s 269C(b) is a term with a narrower and more precise connotation than that expression has in general economic discourse or in the context of competition law. In the latter contexts, the word "market": …is not susceptible of precise comprehensive definition when used as an abstract noun in an economic context. The most that can be said is that "market" should, in the context of the [Trade Practices] Act, be understood in the sense of an area of potential close competition in particular goods and/or services and their substitutes … … The economy is not divided into an identifiable number of discrete markets into one or other of which all trading activities can be neatly fitted. One overall market may overlap other markets … The outer limits (including geographic confines) of a particular market are likely to be blurred: their definition will commonly involve assessment of the relative weight to be given to competing considerations in relation to questions such as the extent of product substitutability and the significance of competition between traders at different stages of distribution.. Per Deane J in Queensland Wire at 195 and at 196. The previous version of s 269C(b) required the making of a TCO if the Comptroller was satisfied that "goods serving similar functions to the particular goods [the subject of the TCO application] are not capable of being produced in Australia by any person in the normal course of business". The definition section of the earlier version of s 269B(1) provided that "identical goods shall be taken to serve similar functions" and that "goods shall be taken to serve similar functions to other goods unless the Comptroller is satisfied that, if both goods were readily available for sale throughout Australia, there would be no significant part of Australia in which there would be significant cross-elasticity of demand between the goods". This earlier version of s 269C(b) thus adopted the general economic concept of substitutability as the criterion for determining whether a TCO should be made. However, those provisions were replaced by the provisions of present concern, as the Minister's Second Reading Speech shows, to give effect to the recommendations of the Industry Commission Report No 9. These recommendations were intended to meet what the Minister described as "a growing dissatisfaction with the operation of the [then] current system". The Commission discussed at length the difficulties encountered in giving practical effect to the imprecise criterion contained in the earlier version of s 269C. See, eg, pp 76-78 and also p 82, where it is said: The Commission's concern is not primarily with the use of technical expressions, such as 'cross-elasticity of demand'. The fundamental difficulty is that the underlying economic concepts, even when expressed plainly and well understood, cannot be an operable basis for administrative decisions. The provisions of present relevance adopt a simpler and more precise criterion for determining whether a TCO application should succeed, in the context of legislation which has the objective of relaxing import duties on particular goods only where that will not cause significant damage to the Australian producer of any broadly similar goods. I reject the applicant's complaints that the Tribunal misconstrued s 269C(b) and made an error of law in identifying "the market for the substitutable goods" as limited to the market for locally made French oak barrels. The applicant also complains that there is no evidence to support a number of findings of fact made by the Tribunal. In Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598, the Full Court said, at 601: An appellant [against a decision of the Tribunal brought pursuant to s 44 of the AAT Act] who attacks a conclusion of the Tribunal because of deficiency of proof said to amount to error of law must show, if he is to succeed, that there was no material before the Tribunal upon which the conclusion could properly be based. In the concluding passage of its reasons set out above, the Tribunal summarised its view of the critical facts which it relied upon to reach its conclusion that the grant of a TCO on 23 February 1994 would be likely to have a significant adverse affect on the market for locally made French oak barrels for the maturation of wine. Ground 4B(vii) of the applicant's notice of appeal asserts that there is an absence of evidence to support this ultimate finding of the Tribunal as to the impact of the grant of the TCO it seeks. The applicant did not in its notice of appeal state this finding accurately: there should be added, "and for French oak barrels in particular", and I have explained why I do not think the Tribunal's finding the subject of this ground of appeal can be read as a finding with respect to a market comprising all Australian made oak barrels (as the applicant suggests), but should instead, be read as a finding limited to the market comprising locally made French oak barrels. Grounds 4B(i), (ii), (v) and (vi) each focus on particular statements in the Tribunal's reasons that are all subsumed in the Tribunal's ultimate finding. All four grounds can be dealt with by determining whether there is any substance in the allegation in Ground 4B(vii) as to a want of evidence to support the finding that the making of a TCO was likely to have a significant adverse affect on the market for locally made French oak barrels, for the maturation of wine. (While the applicant did not abandon reliance on grounds 4B(iii) and (iv), it acknowledged that a finding by this Court in its favour here would probably not be determinative of the fate of the appeal, a view with which I agree. The applicant said that it did not intend to pursue either of these grounds "at any great length". Since they involve matters peripheral to the outcome of the appeal I will pass over them entirely.) There was a substantial body of evidence that conflicted with the Tribunal's ultimate conclusion expressed in the penultimate paragraph of its reasons, as the Tribunal itself acknowledged when it observed that "some witnesses stated that their decision to purchase French made barrels is unaffected by price". For example, Mr Henriks, the person responsible for buying new oak barrels to meet Southcorp Wines requirements, gave evidence that that large wine maker's new oak barrel requirements were governed not by price but by the organisation's assessment of the volume of each style of wine made by it which would be sold in the relevant future period; apparently Southcorp's financial position is such as to free it from price constraints in making its decisions on new oak barrel acquisitions. Mr Henriks said that it followed that: "the removal of the tariff on imported new oak barrels manufactured out of French oak will have no affect on our buying strategy for new oak barrels". Mr Deans, a senior wine maker with the Orlando Wyndham group, gave similar evidence. Mr Halliday, a wine maker and well-known wine writer, said that for one particular style of wine he made he chose French oak barrels made by one particular French cooper, in preference to French oak barrels made by other French coopers and by Australian coopers, because he considered that it was the barrel best suited to that particular wine style. He added: "our decision to purchase French barrels is unaffected by price and will continue to be unaffected by price in the future." He explains his decision on the basis that barrels from his French cooper have different characteristics and thus impart different qualities to the particular wine style in the making of which he uses those barrels, from the products of other French coopers and Australian coopers, even though the latter's barrels are cheaper than the barrel he uses. He points out that if he were making a different style of wine which required oak he might well choose, as the most suitable barrel, a locally made one of American oak; he adds that any such decision would also be taken without regard to price. However, there was a significant body of evidence, much more than a mere scintilla, which fully entitled the Tribunal to conclude that cost was a factor which influenced the decisions of some wine makers to buy imported French oak barrels rather than locally made French oak barrels. The Tribunal was not, eg, obliged to accept what Mr Henriks had to say in his affidavit evidence and to which I have referred above: the material before the Tribunal included a letter of 10 June 1994 which Mr Henriks sent to the applicant's agent in connection with the latters' TCO application. This letter contains Mr Henriks' detailed comparison of the costs of the locally made and the imported French oak barrels; he concludes with the observation that he thinks that a French supplier of new oak to Australian coopers is artificially inflating the price because it is more interested in selling French made barrels to Australia than the timber and says: "it is for this reason that Southcorp is now investigating alternative suppliers of French oak for manufacture of barrels in Australia". Cost is not irrelevant, even for Southcorp. In an earlier letter of 18 March 1994 to the applicant's agent, Mr Henriks referred to other action being taken by Southcorp to arrange for the manufacture in Australia of French oak barrels suitable for Southcorp requirements, action dictated entirely by cost considerations. Mr Henriks also acknowledged in oral evidence that one of the reasons why his organisation fills its French oak barrel requirements by importing French oak staves and having them made into barrels here is that that involves lower costs than importing fully assembled barrels. Mr Deans in his oral evidence conceded that his organisation would take advantage of the opportunity to reduce costs, provided that did not impact on quality, and that the cost of acquisition of barrels was an important consideration depending on "the price point of the product we are producing"; ie, the lower the selling price of a wine style requiring French oak, the more important it would be to obtain the necessary barrels at the cheapest cost, consistent with maintaining the quality of the particular wine style. Not surprisingly, there was also material, which the Tribunal was entitled to act on, from the Australian coopers who opposed the making of the TCO and which explained why they considered that a drop in duty on the imported barrel would adversely affect sales of locally made French oak barrels. There was also significant evidence that sales of locally made French oak barrels had fallen over the recent period during which there had been a reduction in duty on imported French oak barrels, notwithstanding an expansion in Australian wine production, and also evidence that, over this same period, there had been an increase in sales of imported French oak barrels. This is evidence from which the Tribunal was entitled to draw the inference that there was a causal link between the reduction in duty on the imported article and harm in the form of loss of sales to the locally made article. The principals of the two Australian coopers gave evidence to this effect. This included their respective production figures for American and French oak barrels in the period 1986 to 1995 and also figures for total imports of American and French oak barrels in the four years, 1992 to 1995. Duty on all imported barrels was at the rate of 15% until 1988, when it fell to 10%; it fell again in 1993 to 9%, and thereafter by 1% each year. This evidence is incomplete, in so far as figures are not available for imported barrels before 1992. But the two local coopers' total production of French oak barrels in the period 1986 to 1995 was (save for the 1988 year) stagnant, during a period when there is evidence of a substantial expansion in the wine industry, including an increase in the period 1986 to 1993 in the production of premium wine, ie, the kind likely to be oaked, of from 38% to 52% of total wine production, expected to rise to 60% by 1995. The evidence for the period 1992 to 1995 (which includes two years subsequent to the date by reference to which the TCO application has to be determined, but which was properly available to the Tribunal) shows a steady fall in Australian-made French oak barrels, as a percentage of total Australian consumption of French oak barrels, and a matching rise in imports, as duty fell on imports each year by 1%. It was open to the Tribunal to accept this evidence and to make the ultimate finding it did. Although it disavows it, the applicant's real complaint is that the Tribunal's conclusions were against the weight of the evidence. I am far from persuaded that such a complaint would be well founded. But even if it were, that does not show error of law by the Tribunal, for the reasons stated in Collins at 601. As to ground of appeal 4C, the Tribunal observed that cost of French oak barrels was an important factor in wine production and a reduction in duty on imported barrels was therefore likely to harm Australian coopers. It was in this context that it then referred to increases in debt servicing incurred by the Australian coopering industry, as it adjusted to the phased reduction in duty on imported barrels. In saying that, the Tribunal was, I think, doing nothing more than explaining why the removal of duty on the imported French oak barrel sought by the applicant would detrimentally affect Australian coopers: it would do that by cutting profits and adding to this debt burden. I also read its reference to the Australian industry being efficient and having an operative apprentice scheme as doing nothing more than identifying, in elliptical fashion, areas of the industry's operations that would be exposed to detriment if locally made French oak barrels were subjected to increased price competition from imported French oak barrels as a result of the removal of duty on the latter. It follows that the Tribunal did not, as the applicant here contends, take into account irrelevant considerations in arriving at its ultimate decision. Ground of appeal 4D, in which the applicant attacks the Tribunal's ultimate conclusion as unreasonable (and thus involving an error of law, for the reasons stated in Tabag v Minister for Immigration and Ethnic Affairs (1982) 45 ALR 705 at 727) because of the evidence that wine makers decide between imported French oak barrels and the locally made ones not on price but by reference to the styles of wine they make, must fail: I have referred to the evidence that cost remains a factor in wine makers' purchasing decisions and that cost is of greater or lesser importance, depending on the price point of the particular wine style that requires oaking. This evidence is, in large part, in the form of concessions made in cross-examination by wine makers who had earlier asserted the contrary and in the form of statements made by them out of court, that contradict what they told the Tribunal. The Tribunal cannot be said to have made an unreasonable decision, when it has such evidence to justify its conclusion, as well as the body of evidence from the Australian coopers that the wine makers' decisions on whether to use imported French oak or locally made French oak barrels are price-sensitive. The short answer to the contention raised by ground of appeal 4E that in two respects the Tribunal failed in its duty under s 43(2B) the Administrative Appeals Tribunal Act to give reasons for its ultimate conclusion that imports have increased as a consequence of reduced duty and that the grant of a TCO would harm the market for locally made French oak barrels is that the Tribunal, in the course of its reasons, considered in some detail the evidence as to whether price affects the decisions of wine makers to acquire French oak barrels and found that "the cost of French oak barrels is therefore an important factor in wine production and a reduction in duty on the imported barrel is likely to have a significant influence on purchasing decisions, to the detriment of Australian coopers". This finding, arrived at after the review of the evidence undertaken by the Tribunal and exposed in its reasons, enables it to be understood, in all the detail required by s 43(2B), why the Tribunal reached its ultimate conclusion. I reject this attack on the Tribunal's decision. The appeal is dismissed. I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond Associate: Dated: 14 August 1997 Counsel for the Applicant: J Slonim Solicitor for the Applicant: Slonims Counsel for the Respondent: MJ Crennan Solicitor for the Respondent: Australian Government Solicitor Solicitor for the Parties Joined: Louis Gross & Associates Dates of Hearing: 31 October and 1 November 1996 Date of Judgment: 14 August 1997