Chief Executive Officer of Customs v W & D Engineering Pty Ltd [1999] FCA 460

FEDERAL COURT OF AUSTRALIA

Chief Executive Officer of Customs v W & D Engineering Pty Ltd

[1999] FCA 460

CHIEF EXECUTIVE OFFICER OF CUSTOMS v W & D ENGINEERING PTY LTD

VG 2 OF 1998 RYAN J 19 APRIL 1999 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 2 OF 1998

ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS

TRIBUNAL

BETWEEN: CHIEF EXECUTIVE OFFICER OF CUSTOMS

Applicant

AND: W & D ENGINEERING PTY LTD

Respondent

JUDGE: RYAN J

DATE OF ORDER: 19 APRIL 1999

WHERE MADE: MELBOURNE

MINUTES OF ORDER

THE COURT ORDERS: 1. That the application be granted. 2. That the decision of the Tribunal be set aside. 3. That the decision of the delegate of the applicant, the subject of the application to the Tribunal, be affirmed. 4. That the respondent pay the applicant's costs of the application. AND THE COURT DECLARES: That the respondent's palletisers and depalletisers are not "robotic machines" as defined in s 4 of the Bounty (Machine Tools and Robots) Act 1985.

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 2 OF 1998

ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS

TRIBUNAL

BETWEEN: CHIEF EXECUTIVE OFFICER OF CUSTOMS

Applicant

AND: W & D ENGINEERING PTY LTD

Respondent

JUDGE: RYAN J

DATE: 19 APRIL 1999

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 This is an application by way of appeal under s 44 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"). On 11 December 1997, the Administrative Appeals Tribunal ("the Tribunal") constituted by Deputy President G. L. McDonald and Members, Mr A. Argent and Brigadier C. Ermert set aside a decision of a delegate of the applicant, the Chief Executive Officer of Customs which had been affirmed on review. That decision was to the effect that certain machines being palletisers and depalletisers manufactured by the respondent, W & D Engineering Pty Ltd ("W & D Engineering") did not qualify for a bounty under s 21(3) of the Bounty (Machine Tools and Robots) Act 1985 ("the Bounty Act"). To qualify in that way, it was necessary for the palletisers and depalletisers to come within the definition of "robotic machine" within s 4 of the Bounty Act. That definition was in these terms: "'robotic machine' means a completely assembled power fed machine that: (a) is controlled by an integrated computer controller: (b) consists of: (i) a structure with mechanical linkages and joints capable of handling objects by simultaneous movements in 2 or more axes; or (ii) a prescribed structure; (c) is designed to operate independently of human control when the computer controller that controls it is programmed; and (d) utilises: (i) a system known as pick and place; (ii) a system known as playback (point to point); (iii) a system known as playback (continuous path); or (iv) a prescribed system; and (e) if it were imported into Australia, would be goods to which: (i) a heading in Chapter 84 or 85 in Schedule 3 to the Tariff Act; or (ii) a heading in Schedule 3 to the Tariff Act determined by the Minister by instrument in writing; would apply; not being: (f) an automatic guide vehicle; (g) a teleoperated equipment; or (h) a machine included in a class of machines in respect of which a declaration under subsection 6(5) is in force; or (i) lifting and handling machinery, known as a skip handling machine, to which subheading 8422.30.00 in Schedule 3 to the Tariff Act would apply if the machinery were imported into Australia." 2 The Tribunal noted in its reasons that none of the exclusions contained in paragraphs (f), (g), (h) or (i) of that definition had any application to W & D Engineering's palletisers and depalletisers. It was also noted as common ground that those palletisers and depalletisers did not consist of a "prescribed structure" as stipulated in paragraph (b)(ii) and did not utilise a "prescribed system" as contemplated by paragraph (d)(iv). 3 After the uncontroversial conclusion that the requirements in each of paragraphs (a) to (e) were cumulative, the Tribunal considered, first, whether W & D Engineering's palletisers and depalletisers were "robotic machines" within the meaning of s 4(b)(i). The Tribunal's analysis of this question was set out as follows in paragraph 7 of its reasons: "The Act provides a detailed and express definition of what is to constitute a 'robotic machine' in s 4 of the Act. The first step is to determine whether there is an ordinary meaning which can be given to the words used in the definition and, if so, what it is. The words used in s 4(b)(i) are, in the opinion of the Tribunal, able to be given an ordinary meaning. That there are no technical words used is not fatal to a finding that ordinary words used in a particular context, bearing in mind the overall purpose for which the legislation was passed, can be found to have a trade usage. It is as well first to see, however, whether the use of the words, having regard to their ordinary meanings, can result in the applicant's machinery failing to meet the criteria. It is not disputed that the applicant's machinery consists of 'a structure with mechanical linkages and joints capable of handling objects'. Nor is it disputed that the objects can be handled '…by simultaneous movements in two or more axes'. It is obvious from watching the video of the machinery operating that goods are able to be progressed in one direction while simultaneously other goods are turned so that they face another direction. That action is achieved through the structure using mechanical linkages and joints capable of handling objects. Accordingly, each of the four machines satisfies the definition because it evidences the capability of the machinery to handle objects by simultaneous movement in two axes. What, however, is disputed is not so much the meaning of the words, with perhaps one exception, but rather it contends that a specialised meaning should replace the ordinary meaning which can be attributed to the criterion. The exception relates to the use of the word 'handling' and the Tribunal will return to this in paragraph 9." 4 A review was then undertaken of the evidence of Dr Kassler, an expert witness called on behalf of the Chief Executive Officer of Customs, but the Tribunal rejected his contention that the phrase "handling objects" in paragraph (b)(i) of the definition connoted the transfer of a unit load from one pose to another by means of a "hand or end effector" analogous to a biological hand and joined to an "arm" by an articulated link similarly analogous to a biological wrist. 5 The Tribunal also rejected Dr Kassler's contention that the Bounty Act was designed to confine payment of the bounty to what could be described as "high technology" robots in which he included trajectory operated robots capable of controlling more than one axis simultaneously when affecting motion from one robot pose to the next. In Dr Kassler's opinion, a "sequence" robot having a control system in which the state of machine movements occurs axis by axis in a desired order, the completion of one movement initiating the next, was not of the requisite "high technology" category to attract the bounty. In rejecting Dr Kassler's approach, the Tribunal observed, in paragraph 11 of its reasons: "There is no dispute as to the meanings to be ascribed to the words in s 4(b), and neither party suggests any of the words should be ascribed a technical meaning. What the respondent seeks to do, however, is to apply a trade understanding of what is constituted by a 'robot' and incorporate that meaning into the term 'robotic machine'. Where, as is the case here, the statute sets out the criteria which must be fulfilled before a machine can be determined to be a robotic machine then it is not legitimate, in the view of the Tribunal, to seek by ascribing a trade usage to narrow the field so as to exclude machinery which otherwise falls within the ordinary meaning arising from the use of the words set out in the nominated statutory criteria. There is no warrant for the Tribunal adopting an interpretation that would narrow the ordinary meaning which would otherwise be given to the words used in the section. Dr Kassler seems to have taken the view that the two types of robot he describes are, for purposes of satisfying the definition contained in the Act, mutually exclusive. There is nothing in the definition which excludes both sequenced and trajectory robots from falling within the definition so that both qualify to be eligible for payment of a bounty. If the legislature had meant to exclude the more unsophisticated robots from the benefits of receiving a bounty it could easily have confined the definition to extend to trajectory robots only. If the legislature had meant to confine the definition in s 4(b)(i) in the way urged on the Tribunal by acceptance of Dr Kassler's evidence, it would have been a simple matter of including the word 'one' before the word 'objects' in the second line and making the latter word singular. That the legislature has not done so leaves the Tribunal satisfied that the definition should not be read narrowly so as to exclude the applicant's robotic machines from its ambit." 6 On the remaining question of whether W & D Engineering's palletisers and depalletisers fell within paragraph (d)(i), (ii) or (iii) of the definition, the Tribunal considered that the descriptions of systems known as "pick-and-place" "playback (point-to-point)" and "playback (continuous path)" were of a trade or technical kind. By way of illustrating the trade or technical meanings of those expressions, the Tribunal referred to these passages from the 1982 Australian Science and Technology Council ("ASTEC") Report: "'Pick-and-place' robot uses a set of mechanical stops and switches to control the movements of the mechanical system. For this reason, only certain position of the arm can be specified; the arm is driven by one position to another, but without control of intermediate positions. The machine is well suited to simple repetitive tasks such as transferring parts from one machine to another and for this reason is called a pick and place robot. 'Playback' robots are described as having '…a much more extensive computer (microprocessor or mini computer) and feedback system'. Special mechanisms known as servomechanisms are used in playback robots to control each element of the mechanical structure. These mechanisms allow each element of the robot to sense how far it is from the desired position, and in which direction it must be driven so that the correct position is reached. To program a playback robot to perform a particular task, the programmer uses the servomechanisms to drive the robot to each position needed to carry out the task; the position is then recorded in the robot's memory. The robot is 'taught' to do a job by driving it through each step in the task. When the robot starts operating, the computer is used to activate the servo systems. This type of robot has gained its name because it 'plays back' the sequence of positions from its memory when performing the required task. Playback robots fall into two classes: those with point-to-point movement and those which continuously control the movements of the robot while moving from one point to another. In a point-to-point, the only information which is stored in the robot's memory is the location of each robot element at the start and finish of a particular step: intermediate information is not given. Thus a particular path from one point to another cannot be followed. However, in some applications it is essential that the robot follow a particular path (to avoid hitting an obstacle, for example). Continuous path robots have a control system which allows the robot to follow a smooth, specified path between two points." 7 It was then concluded as a matter of fact after viewing a video tape of W & D Engineering's palletisers and depalletisers in operation and hearing the evidence of its managing director, Mr Durran, that the machines in question utilised the "playback (point-to-point) system". That conclusion was expressed in these paragraphs: "15. The applicants contend that the machines are playback robots in that each machine utilises the programmed memory of its controller to move objects from one defined point to another. The applicant did not attempt to differentiate between the point to point and continuous path descriptions of operation as applied to the machines in dispute. Essentially the difference is that a point to point system specifies only the start and finish of a particular step in the system's operation, whereas the continuous path system also specifies the path to be followed between the start and finish point. … 17. Based on the descriptions of the operations of the machines given in the evidence of Mr Durran, and as seen in the video, and in the absence of any sufficient evidence to support refutation from the respondent, the Tribunal is satisfied that the machines in dispute operate as playback robots. The Tribunal accepts that the machines in dispute operate as playback (point to point) robots but without direct evidence the Tribunal cannot accept that the machines operate as playback (continuous path) robots. 18. Based on these considerations the Tribunal finds that the machines in dispute meet the requirements of s 4(d)(ii), but do not meet the requirements of s 4(d)(i), (iii) and (iv). Since each of the sub-clauses of s 4(d) are to be read disjunctively, the applicant is able to satisfy the provisions of that section." 8 This application raises two distinct questions. The first concerns the proper construction of paragraph (b)(i) of the definition of "robotic machine" in s 4 of the Bounty Act. The second question is whether W & D Engineering's machines satisfy the requirements of paragraph (d)(ii) of that definition. However, before considering the substance of those questions, it is necessary first to examine whether they can be entertained by this Court.