FEDERAL COURT OF AUSTRALIA Kimberley-Clark Australia Pty Limited v Secretary to the Department of Industry Tourism and Resources [2004] FCA 1438 ADMINISTRATIVE LAW – subordinate legislation – financial assistance by government to Australian resident manufacturers – textile, clothing and footwear industry – whether manufactured products fall within categories designated for assistance under statutory scheme – consideration of manufacturing process and nature of products manufactured – government decision below adverse to manufacturer upheld by AAT – whether AAT decision vitiated by erroneous construction of subordinate legislation – relevance of amendments to subordinate legislation after decision-making and prior to administrative review Textile, Clothing and Footwear Strategic Investment Program Act 1999 (Cth), ss 3, 8, 112), 14(2) and 85A(1) Textile, Clothing and Footwear Strategic Investment Program Scheme 1999, Part 1 of Schedule 1 Acts Interpretation Act 1901 (Cth), ss 15AA(1) and 15AB(1) The Australian Gas Light Co v The Valuer General (1940) SR (NSW) 126, applied Hepples v Federal Commissioner of Taxation (1991-1992) 173 CLR 492, referred to Grain Elevators Board (Vic) v Dunmuncle Corporation (1946) 73 CLR 70, referred to Cape Brandy Syndicate v Inland Revenue Commissioners [1921] 2 KB 403, referred to Commissioner for Inland Revenue v Hang Seng Bank Ltd [1991] 1 AC 306, referred to Allina Pty Ltd v Federal Commissioner of Taxation (1991) 28 FCR 203, referred to Interlego AG v Croner Trading Pty Limited (1992) 39 FCR 348, referred to Birch v Allen (1942) 65 CLR 621, applied Rose v Department of Social Security (1990) 21 FCR 241, distinguished KIMBERLEY-CLARK AUSTRALIA PTY LIMITED v SECRETARY TO THE DEPARTMENT OF INDUSTRY TOURISM AND RESOURCES NSD 1120 OF 2003 CONTI J 8 NOVEMBER 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1120 OF 2003 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: KIMBERLEY-CLARK AUSTRALIA PTY LIMITED APPLICANT AND: SECRETARY TO THE DEPARTMENT OF INDUSTRY TOURISM AND RESOURCES RESPONDENT JUDGE: CONTI J DATE OF ORDER: 8 NOVEMBER 2004 WHERE MADE: SYDNEY Index to Reasons for Judgment Paras 1 to 13 Background and details of disallowed claims 14 to 21 The legislative authority for establishment of the Scheme 22 to 27 Textile, Clothing and Footwear Strategic Investment Program Scheme 1999 28 to 36 The review by the AAT of the evidence below 37 to 39 The findings of the AAT is summary 40 to 50 The discussion of the Scheme by the AAT 51 to 68 The AAT's reasoning for dismissal of KCA's case below 69 to 70 Issues framed by Kimberley-Clark Australia Pty Limited as arising 71 to 82 The reasoning of Kimberley-Clark Australia Pty Limited in support of its grounds for application for administrative review 83 to 90 Amendment of the Scheme after the decision-making under challenge 91 to 106 The submissions of the respondent Secretary on the appeal 107 to 111 Conclusions IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1120 OF 2003 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: KIMBERLEY-CLARK AUSTRALIA PTY LIMITED APPLICANT AND: SECRETARY TO THE DEPARTMENT OF INDUSTRY TOURISM AND RESOURCES RESPONDENT JUDGE: CONTI J DATE OF ORDER: 8 NOVEMBER 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The decision of the Administrative Appeals Tribunal of 24 July 2003 in favour of the respondent Secretary to the Department of Industry, Tourism and Resources be set aside. 2. The case the subject of the proceedings for review be remitted to the Administrative Appeals Tribunal: (i) to determine according to law the applicant's claims for expenditure grants on the basis that each of the textile finishing activities as found by the Tribunal constituted a manufacturing activity within the meaning of para 5(1)(a) of the AusIndustry Textile Clothing and Footwear Strategic Investment Program Scheme 1999; and (ii) to determine according to law whether or not each of the applicant's products was an eligible TCF product as defined in s 3 of that Scheme. 3. The respondent pay the applicant's costs of the proceedings. 4. Either party have liberty to apply as to the form and carrying into effect of these orders in order to give full expression to the accompanying reasons for judgment. Note: 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 NSD 1120 OF 2003 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: KIMBERLEY-CLARK AUSTRALIA PTY LIMITED APPLICANT AND: SECRETARY TO THE DEPARTMENT OF INDUSTRY TOURISM AND RESOURCES RESPONDENT JUDGE: CONTI J DATE: 8 NOVEMBER 2004 PLACE: SYDNEY REASONS FOR JUDGMENT Background and details of disallowed claims 1 Kimberley-Clark Australia Pty Limited ('KCA') is an Australian company which manufactures a range of products, including infant garments, feminine hygiene products and adult incontinence products at its processing plants in Ingleburn, Albury and Warwick Farm in New South Wales and Lonsdale, Millicent and Tantoola in South Australia. KCA has business assets worth approximately $600 million, generating annual sales exceeding $800 million. It has about 1800 employees. It commenced business in Australia in the 1930's as Kotex Australia Limited. 2 KCA has a vertically integrated business, and most of the textiles it manufactures are used in the manufacture of KCA products. 67% of its profits are generated from the manufacture and sale of non-traditional textiles. Some textiles are however bought in for use in its products. In the course of its production processes, KCA also engages in textile finishing, a process undertaken to enhance the end-use properties of textiles. It is that process which attracts the focus of the litigation. 3 On 31 May 2000, KCA lodged an application for registration under the AusIndustry Textile, Clothing and Footwear Strategic Investment Program Scheme ('the Scheme') for the pre-program years 1998/1999 and 1999/2000 and the program year 2000/2001; that application was for grants for expenditure relating to: (i) new plant and equipment (Type 1 expenditure); (ii) research and product development activities (Type 2 expenditure); and (iii) textile clothing and footwear value added (Type 3 expenditure). 4 On 1 November 2000, KCA was notified that its registration was approved, on the basis of an eligibility test, for the pre-program periods the subject of those years; on 12 April 2001, KCA lodged an application for renewal of registration under the Scheme; on 11 May 2001, KCA was informed that its registration had been effected on the basis of an eligibility test for the 2001/2002 period. 5 On 21 May 2001, officers of the respondent Secretary's Department conducted an on-site inspection of KCA's manufacturing plant at Albury where KCA's non-woven fabric is produced; on 28 June 2001, officers of the Department conducted an on-site inspection of the KCA plant at Ingleburn, where disposable nappies are manufactured, incorporating thereby non-woven textile imprints manufactured at the Albury plant; a report on those visits was subsequently produced by the Department. The products the subject of the present dispute include not just disposable nappies, but also bed protectors, adult incontinence products and feminine hygiene products. 6 On or about 8 August 2001, KCA lodged a claim for Type 1, 2 and 3 grants under the Scheme, and a request for determination of grant entitlement; that claim and request related to the pre-program years 1998/1999 and 1999/2000 and the program year 2000/2001. Thereafter followed further correspondence as to the nature of the products manufactured and the expenditure in respect of which the claims were made. Ultimately on 19 November 2001, a delegate of the respondent Secretary decided that KCA's maximum grant eligibility in relation to the three pre-program years involved was $2,849,471, though the delegate did not determine the final grant entitlement, since KCA had not by that time provided a revised audited statement of total eligible revenue. That maximum grant eligibility related to what was described in the respondent Secretary's submissions as 'eligible Part A1 activities'. 7 KCA thereupon sought a reconsideration of the Department's decision, and supplied an independent audit report dated 6 December 2001 containing revised total eligible revenues; on 21 December 2001 the delegate of the respondent Secretary revised the amount of the grant payable downwards to $1,130,320, and disallowed requested grants of $21,072,088; on 16 January 2002, KCA applied to the Administrative Appeals Tribunal ('AAT') for a review of that decision. 8 On 7 November 2002, KCA lodged a Request for Determination of Grant Entitlements and claim form for the subsequent 2001/2002 program year with the respondent Secretary, together with supporting financial documentation; on 25 November 2002, an officer of the respondent Secretary requested further information regarding the claim for that second year's program, answers to which were provided on 2 December 2002. On 12 December 2002, the respondent Secretary advised KCA that its maximum eligible claim amount for the 2001/2002 program year was $698,614.68. 9 The result of the two decisions was therefore that grant applications totalling $21,072,088 were disallowed, and further that KCA's claim for Types 1, 2 and 3 expenditures were disallowed in any event as the products claimed in each case were not considered to constitute an eligible TCF activity within the meaning required by the Scheme. 10 On 8 January 2003, KCA requested a reconsideration of the quantification of the grant. On 7 February 2003, the delegate of the respondent Secretary confirmed the later decision of 12 December 2002. On 6 March 2003, KCA lodged an application with the AAT for review of that decision. 11 On 19-20 May 2003, reviews of the decisions of the delegate of 21 December 2001 and 7 February 2003 were heard by the AAT, constituted by Deputy President Mr R.P. Handley; on 24 July 2003, the AAT's reasons for confirmation of its decisions were delivered. The time taken by Mr Handley to give his decisions reflects the complexity of the subordinate legislation involved and of the circumstances of the dispute. 12 On 21 August 2003, KCA filed notice of appeal to this Court; the hearing of the appeal by this Court took place on 8 and 31 March 2004, and a regime for the submission of written submissions was by consent put in place, being submissions supplementary to those provided at the hearing of the appeal; those of the respondent Secretary were provided to the Court on 18 June 2004, and those of KCA in response on 16 July 2004. Moreover the submissions in each case were not strictly supplementary in content, but were largely by way of restatement (and to a degree of amendment) of the earlier written submissions, and what had been earlier submitted orally at the hearing of the proceedings. 13 The parties also provided clean and marked-up revised transcripts for the hearing on 8 March and 31 March 2004, 'marked up' in the sense of containing detailed references to the parts of documentation in evidence relied upon. The legislative authority for establishment of the Scheme 14 The primary legislation is the Textile, Clothing and Footwear Strategic Investment Program Act 1999 (Cth) ('the Act'), which took effect on 22 December 1999. Section 8 thereof obliges the Minister to formulate a scheme for the making of grants and/or loans in connection with, or incidental to, the design and manufacture in Australia of eligible textile, clothing and footwear products. Hence the statutory origin of the Scheme. 15 By s 3 of the Act, a so-called 'simplified outline of the Act' is set out in the following terms: '3 Simplified outline The following is a simplified outline of this Act: · This Act provides a framework for the implementation of the Textile, Clothing and Footwear Strategic Investment Program. · The Minister is required to formulate a scheme (the TCF (SIP) scheme) for the making of grants and/or loans in connection with the design and manufacture, in Australia, of eligible TCF products. · The total of the grants paid, and loans made, under the TCF (SIP) scheme must not exceed $700 million, reduced by any Regional Assistance Program supplementation payments. · The TCF (SIP) scheme will provide for 5 types of grants, to be known as follows: (a) grants in respect of new TCF plant/building expenditure; (b) grants in respect of TCF research and development expenditure; (c) grants in respect of TCF value-adding; (d) special grants in respect of second-hand TCF plant expenditure; (e) special miscellaneous grants in respect of TCF-dependent communities. · The TCF (SIP) scheme will run for 5 financial years, beginning with the 2000-2001 year. However, grants in respect of new TCF plant/building expenditure may be made for the 1998-1999 and 1999-2000 years, and special grants may be made for the 1999-2000 year. · Grants under the TCF (SIP) scheme are to be made in arrears. · Entities who wish to obtain grants under the TCF (SIP) scheme may be required to register under the scheme and to submit strategic business plans and accounts.' It will be seen that the legislation provides for grants and loans. What is here in dispute are grants, and in particular the quantification thereof. The above references to the TCF (SIP) scheme are of course to what I have already identified for present purposes as 'the Scheme'. It is the first three classifications of grants that are apparently here involved. Although the Scheme came into force on 22 December 1999, it will be seen from the above that it operated in respect of the abbreviation TCF, wherever used in the Scheme, means textiles, clothing an footwear. 16 Section 8 of the Act provided for the establishment of the Scheme, so far as is presently material, as follows: '8 TCF (SIP) scheme By the end of the period of 14 days beginning on the day on which this Act receives the Royal Assent, the Minister must, by writing, formulate a scheme (the TCF (SIP) scheme)for the making of grants and/or loans in connection with, or incidental to, any or all of the following: (a) the manufacture in Australia of products that, under the scheme, are taken to be eligible TCF products; (b) the design in Australia, for manufacture in Australia, of products: (i) that, under the scheme, are taken to be eligible TCF products; and (ii) some or all of which are intended to be sold in Australia; …' 17 Subsection 11(2) of the Act provides for five different types of grants, the three relevant to the present dispute, as already foreshadowed, being reproduced below from that subsection: '(a) the first type of grants are to be known as grants in respect of new TCF plant/building expenditure; (b) the second type of grants are to be known as grants in respect of TCF research and development expenditure; (c) the third type of grants are to be known as grants in respect of TCF value-adding; …' 18 Section 14(2) of the Act sets a cap in respect of the total grants in respect of TCF value-adding made to an entity for eligible activities, and s 15(2) sets a cap in respect of grants payable during a particular income year for various activities, including new TCF plant/building expenditure and research and development expenditure. 19 The Explanatory Memorandum to the Act contained the following General Outline: 'The Bill establishes the framework for the implementation of the Textile, Clothing and Footwear Strategic Investment Program. The program aims to foster the development of sustainable, internationally competitive TCF industries in Australia during the transition to a proposed free trade environment under the Asia Pacific Economic Cooperation (APEC) by providing incentives which will promote investment, innovation and value adding in the Australian TCF industries and better exploit Australia's natural advantages in raw materials such as wool, hides and cotton. As a result of Government's decision on Industry Commission Report No. 59 on the Textiles, Clothing and Footwear Industries, the structural adjustment assistance to be provided to the TCF industries under the Bill is in line with Government's decision to phase-down of customs rates of duty for textiles, clothing and footwear articles from 1 January 2005. The Customs Tariff Amendment Bill (to be cognated with the TCF (SIP) Bill) will amend the Customs Tariff Act 1995 to give effect to the phase-down of rates of duty for TCF articles. The TCF (SIP) Bill requires the Minister to formulate the TCF(SIP) Scheme for the making of grants in connection with the design for manufacturing and manufacturing, in Australia, of eligible TCF products. The TCF (SIP) scheme will provide for 5 types of grants, namely (so far as presently material): (a) for new TCF plant/building expenditure; (b) for TCF research and development expenditure; (c) for TCF value-adding; …' The Scheme will run for 5 financial years, beginning with the 2000-2001 year. However, grants in respect of new TCF plant/ building expenditure may be claimed for the 1998-99 and 1999-2000 years. Grants under the TCF (SIP) Scheme are to be made in arrears.' 20 The Second Reading of the Minister to the House of Representatives on 11 February 1999, in relation to what became the Act, included the following: 'The proposed Textile, Clothing and Foot­wear Strategic Investment Program Bill 1999 allows for the establishment of the TCF Strategic Investment Program as the key initiative for the TCF industries. The TCF Strategic Investment Program is a five-year, $700 million package aimed at encouraging additional investment in the TCF industries to add value to the products of early stage processing. The program aims to help in the development of sustainable, internationally competitive TCF industries in Australia during the transition to a freer global trade environment, by providing incentives which will promote investment, innovation and value adding in these industries… The benefits available under the TCF Strategic Investment Program will be paid as cash, annually and in arrears. All firms en­gaged in textile, clothing, footwear and leather manufacturing in Australia, as defined by the Australian Bureau of Statistics, will be eligible to apply for assistance under the program. The TCF Strategic Investment Program will come into effect on 1 July 2000, following the termination of the TCF Import Credit Scheme on 30 June 2000. The benefits to be paid under the program for investment ex­penditure on new plant and building, research and development activities and value adding will be calculated as follows: (i) Up to 20 per cent of eligible invest­ment expenditure on new plant and buildings; (ii) Up to 45 per cent of expenditure on eligible research and development related activities (including product development expenditure, other than advertising and media related expendi­ture); and (iii) Up to five per cent of TCF value added by the company in Australia in the year of their claim.' The last mentioned percentage is described in s 85A(1) of the Scheme, in relation to sales-based caps for grants, in terms as to TCF value added by the entity otherwise than during an eligible start-up period of the entity must not exceed 5% of the total eligible revenue…'. 21 It is apparently common ground that the claims lodged by KCA purportedly pursuant to the Scheme related to manufacturing activities of KCA undertaken in Australia. Textile, Clothing and Footwear Strategic Investment Program Scheme 1999 ('the Scheme') 22 The Scheme established by the Act is a comprehensive instrument, and came into force on 22 December 1999. It comprises what the Act denoted in certain sections already extracted as TCF (SIP). It is divided in the first place into so-called 'Parts', which then break down into Divisions and sometimes sub-divisions, and ultimately to sections and subsections, and then sometimes paragraphs of those subsections. After the concluding section 95 of Part 6, there follows Schedules, which divide into Parts, and which in turn break down to paragraphs and sometimes subparagraphs. It is not a charter which could readily be described as user friendly, particularly given the absence of any index. Because of the complexity of the structure I have described, the parties used in their submissions what may be described as shorthand references to critical segments to this complex and sometimes confusing maze of regulatory provisions. It is appropriate to set out below in particular the provisions of the Scheme reproduced in the AAT Decision, in order to facilitate a conspectus of those provisions implicitly regarded by the AAT as material for present purposes; what first appears below falls within Part 2, headed 'Types of Grants', and in particular Division 2.2 thereof headed 'Type 1 grants': '14(1) A Type 1 grant, for an entity, is a grant relating to eligible expenditure by the entity in connection with, or incidental to, any of the following activities carried on by the entity in respect of an eligible TCF activity: (a) the acquisition or construction of new TCF plant or equipment, of which the entity is the financial owner, for use exclusively in Australia; …' Then follows what appears within Section 16 under the sub-heading for Division 2.3 namely 'Type 2 grants'. '16(1) A Type 2 grant, for an entity, is a grant relating to eligible expenditure by the entity in connection with, or incidental to, any of the following activities carried on by, or on behalf of, the entity in respect of an eligible TCF activity: (a) a research and development activity of a kind mentioned in section 17; (b) a product development activity of a kind mentioned in subsections (2) and (3). (2) For paragraph (1) (b), a product development activity must be: (a) innovative product design within the meaning of section 18; or (b) innovative process improvement within the meaning of section 19; or …' Next relevantly follows what appears below within section 27 of the Scheme, under the sub-heading for Division 2.4, namely 'Type 3 grants': '27(1) A Type 3 grant, for an entity, is a grant relating to eligible TCF value added by the entity in respect of eligible TCF activities carried on by the entity in a program year. (2) A Type 3 grant may be made to an entity for a program year only if a Type 1 or Type 2 grant is also made to the entity for the program year. (3) A Type 3 grant may be made in addition to a grant of another type under the Scheme.' Type 4 and Type 5 grants relate to eligible expenditure not apparently here material. 23 Earlier in Part 1 of the Scheme, there appears within section 3, under the heading 'Definitions', the following key Scheme expressions (inter alia): 'Eligible TCF activity has the meaning give by section 5. Eligible TCF product means a product resulting from an eligible TCF activity mentioned in paragraph 5(1)(a) or (e). Eligible TCF value added, for an entity, has the meaning given by section 28. TCF plant or equipment means plant or equipment used in an eligible TCF activity.' 24 Also earlier in Part 1 of the Scheme, section 5 defined the meaning of 'eligible TCF activity', to the extent reproduced below in the AAT's reasons, as follows: '(1) For the Scheme, each of the following activities is an eligible TCF activity: (a) a manufacturing activity of a kind mentioned in Parts A to E of Schedule 1 carried on in Australia by an entity;… (b) an activity carried on in Australia by an entity in connection with, or incidental to, the design in Australia for manufacture in Australia of eligible TCF products, some or all of which are intended to be sold in Australia; (c) an ancillary activity carried on in Australia by an entity in connection with, or incidental to, a manufacturing activity mentioned in paragraph (a) (the manufacturing activity) carried on in Australia by that entity or another entity if, and only to the extent that, operations in respect of the ancillary activity and the manufacturing activity are wholly and mutually interdependent; (d) an ancillary activity carried on in Australia by an entity in connection with, or incidental to, an activity mentioned in paragraph (b) (the design activity) carried on by the entity or another entity if, and only to the extent that, operations in respect of the ancillary activity and the design activity are wholly and mutually interdependent; (e) an activity of a kind mentioned in part G of Schedule 1 carried on in Australia by an entity using an eligible TCF product resulting from a manufacturing activity mentioned in paragraph (a) carried on in Australia by the entity.' KCA emphasised throughout the proceedings what it characterised as 'the key distinction' between eligible TCF activity and eligible TCF product. Section 9 provides for the notion of 'total eligible revenue'. The above reference to Schedule 1 is to the provisions of the Scheme which occasioned substantial debate in the course of the review proceedings before the Court : that Schedule is headed 'Eligible TCF activities'. 25 The following subsection was added to s 5 of the Scheme having effect from 4 June 2001, which assumed some prominence in the reasons for decision of the AAT, and which involved further controversy as to its scope of operation in the present proceedings: '(2AB)Despite anything else in this section, a manufacturing activity of a kind referred to in Subdivision 21 or any of Subdivisions 23 to 29 of Division C of ANZSIC, and not mentioned in subsection 1, is not an eligible TCF activity.' The reference above to 'ANZSIC' is to Australia and New Zealand Standard Industrial Classification 1993; that abbreviation will be hereafter adopted. Under the heading to Schedule 1 to the Scheme, namely 'Eligible TCF activities', there appears in small print reference to ANZSIC as follows: 'Note The activities listed in this Schedule are based on Div C, Subdiv. 22 of the Australian and New Zealand Standard Industrial Classification (ANZSIC)'. The words based on in that context will be later addressed. The respondent Secretary maintained, in the course of written submissions, that '… this amendment was designed to clarify that the Scheme does not extend to the provision of grants in respect of the manufacture of products classified in ANZSIC outside of Subdivision 22 of Division C'. That contention was put in issue by KCA. The issue is one of construction of subsection (2AB) in the context of section 5 of Part 1 of the Scheme as a whole. 26 Section 28 of the Scheme states: 'What is eligible TCF value added by an entity For an entity, the total eligible TCF value added by the entity, in respect of eligible TCF activities carried on by the entity for a program year, is worked out in the way set out in Schedule 2.' The heading to Schedule 2 of the Scheme is Method of working out total eligible TCF value added by an entity. 27 Thereafter the AAT summarised the remainder of the Scheme conveniently as follows: 'The Scheme requires that if an entity intends to apply for a Type 1, Type 2 or Type 3 grant, they must apply to the Secretary to be registered for the Scheme (s 31(1)). The applicant is not eligible to register unless it carries on an eligible TCF activity (s 31(2)). The claim, made in accordance with s 52, is then assessed by the Secretary (s 61) who must be satisfied that if the claim is for a Type 1 grant, the amount of expenditure is eligible within the meaning of s 15; if the claim is for a Type 2 grant, the expenditure is eligible within the meaning of ss 23 - 26; and if it is a Type 3 grant, the amount of the expenditure is the total eligible TCF value added by the entity in accordance with s 28. Sections 64, 65 and 66 provide caps, respectively, for Type 1, 2 and 3 grants. Section 85A imposes an overall limit on the total grants that become payable to an entity during a particular year of income of the entity. At the time of making the claim, the applicant may request that the Secretary determine if the applicant is entitled to a grant (s 75). If the Secretary is satisfied that the applicant does qualify, then the Secretary must determine the amount to be paid (s 76). Section 87 provides that an entity affected by and dissatisfied with a decision may request the Secretary to reconsider the decision. Section 88(6) empowers the Tribunal to review the decision.' The review by the AAT of the evidence below 28 The AAT reviewed at length the written statement provided to the AAT by KCA's expert witness Professor Griffith, an emeritus professor of the University of New South Wales, where he was head of the School of Fibre Science and Technology from 1985 to 1997. Professor Griffith holds various honorary positions, including Chairman of the Australian National Advisory Council of the Textile Institute, and has wide experience as a consultant textile technologist, both to the Federal and State Governments and to other bodies, and has extensive research experience; he has more recently published widely in textile technical and general literature. The factual basis for Professor Griffiths' statement provided to the AAT, concerning KCA's manufacturing processes, was derived from the evidence furnished by three witnesses for KCA, namely Messrs Langer and Kirk and Dr Hearne. It is unnecessary for me to review their evidence, since the AAT appears to have implicitly accepted the same in the light of those aspects of the reasons for decision relating to Professor Griffiths' testimony. Professor Griffith was the only textile technologist who gave evidence in the proceedings. KCA made the submission that Professor Griffith's testimony was not challenged by contrary evidence, and that the same was accepted by the AAT. That submission would appear to be correct. 29 Professor Griffith provided, in his initial statement of 29 August 2002 to the AAT, explanations at some length upon the following subjects: (i) the structure and features of textiles, and their major applications, being to clothing and furnishings; (ii) the processes of textile finishing, which, when applied to textiles, produce particular desired properties, including the increasingly common form of fabric finishing known as lamination; and (iii) the process of lamination, commonly involving the adhesion of a layer of foam to a fabric for enhanced thermal insulation. Those explanations of Professor Griffiths, accompanied by definitions provided in 'Textile Terms and Definitions' published by the Textile Institute, which he described as 'the foremost international professional body of textile science and technology', are largely reproduced in the reasons for decision of the AAT. Those definitions included 'textile', 'fabric', 'fibre', 'finishing' and 'laminated fabric'. 30 As to the meaning of 'textile', I extract below some excerpts from Professor Griffiths' written statement: '17. A textile is a structure deriving from fibres and filaments as the basic element. 18. The most commonly recognised forms of textiles are fabrics, which are essentially two dimensional arrays of fibres… 19. These essentially single dimension assemblies of fibres in the form of yarns, threads, ropes etc are, together with the fibres themselves, also recognised as textiles… … 21. Textiles generally are flexible structures, thus finding their major application in clothing and furnishings… With the development of synthetic fibres in particular, alternate methods of coherent fibre assembly have been possible, and a plethora of new structures has arisen… 22. In many cases they have become substitutes for "traditional" textiles in "traditional" applications; in other cases they have given rise to new applications for textiles such as in fibre or fabric reinforced composites. … 24. A more sophisticated 'non-traditional' fibre is a spunbond/meltblown spunbond composite, what has entered the textile lexicon as 'SMS" fabric… The strands are directed between two layers of spunlaid web, the molten strands acting as a bonding or welding agent between the two spunbond layers. … Textile Finishing 25. Textile finishingrefers to processes applied to textiles to produce particular desired properties. 26. The process may be as simple as ironing or pressing to produce a flat surface, ranging to processes where fundamental chemical or physical change is imposed on the textile to give such properties as crease resistance, permanent pleating, water repellency, water impermeability, light impermeability, enhanced thermal insulation, enhanced surface decoration, increased surface smoothness, resistance to mildew, and resistance to insect destruction amongst others. 27. Textile finishing is almost always applied to the newly created textile, whether it be woven, knitted or the outcome of the newer fabric forming technologies. It recognises the limitations imposed on the fabric by those fabric forming processes, or the inherent deficiencies of the fabric structure compared to consumer expectations. 28. Simple physical finishing processes include surface shearing to remove excess fibre; singeing to remove surface fibre; brushing to raise additional surface fibre for softness of handle or enhanced thermal properties. 29. Chemical finishing may include the modification of the fibre structure to "remember" a specific configuration (in permanent pleat and crease resist applications); modification of fibre surface structure to reduce fabric shrinkage due to mechanical action (for wool particularly); addition of surface chemicals with natural water repelling properties (such as silicones); amongst others. 30. More advanced physical modification includes applying coatings of the fabric to increase stiffness or to give light impermeability, and the joining of the textile to a layer of another material which itself has properties which the textile does not have. 31. Such processing is known as laminating, a common example being the adhesion of a layer of foam to a fabric for enhanced thermal insulation. Such finished fabrics are commonly used in the manufacture of cold climate clothing. Alternatively the principal textile (very often lightweight and thin for aesthetic reasons) may be bonded to another fabric which has bulk and hence warmth, but no aesthetic appeal. 32. Lamination is an increasingly common form of fabric finishing. Optimum outcomes for a product can thus be achieved by combining different materials, which each contribute their particular properties, for the benefit of the product as a whole. That particular property might be low cost; high strength; desirable surface properties; moisture absorbence; or waterproofing; for instance. The total benefit could not be achieved from a single available component. These laminates are exemplifications of the adage that "the whole is greater than the sum of the individual parts". 33. Textile lamination is achieved by the adhesion of the principal textile to another component which adds valuable properties not presenting the original, which itself has other desirable properties. 34. The adhesion is achieved either through an applied adhesive agent (a glue in effect acting between the two components, or by modification of the surface of one or both components, for example by heat softening in the case of thermoplastic materials, and effecting a "weld" or "meld" between the two surfaces. In the present consideration, the lamination method is the application of an adhesive substance between textile fabric layers, with the application of pressure to ensure intimate surface contact.' 31 Thereafter Professor Griffiths set out the definitions of the undermentioned expressions provided in 'Textile Terms and Definitions' published by the Textile Institute, which he described as 'the foremost international professional body of textile science and technology: 'textile'; 'fabric'; 'fibre'; 'spunbond'; 'spunlaid'; 'meltblown'; 'non-woven fabric'; and 'finishing'. The final definition which he cited was that of 'laminated fabric', which I reproduce below: 'A material composed of two or more layers, at least one of which is a textile fabric, bonded closely together by means of an added adhesive, or by the adhesive properties of one or more of the component layers.' 32 The AAT recorded that Professor Griffith described as 'misleading' the following description of textile finishing in ANZSIC at page 61 thereof: 'This class consists of units mainly engaged in bleaching, dyeing, printing, pleating or other finishing yarns, threads, fabrics or other textiles on a fee or commission basis using client supplied materials or materials which are purchased or transferred in from other units.' He said it was misleading 'because most textile finishing is part of a continuous manufacturing process'. That criticism advanced by Professor Griffith is implicitly supported by the Scheme description of textile finishing later addressed in more detail. 33 Professor Griffith provided the following product descriptions to the AAT: '(a) Incontinence Products (i) DEPEND® Bed Protector This product, which is an article and not a garment, is laid over the bottom sheet on a bed to protect the sheet and mattress from soiling associated with incontinence. A textile surface is presented to the patient with a liquid impervious barrier on the underside. It incorporates two textile fabrics: a spunbonded fabric on the upper surface attached by adhesive to a spunbond/meltblown/spunbond composite known in the textile industry as an "SMS" fabric to which a thin polyethylene sheet has previously been laminated. Between the spunbond fabric and the SMS fabric is sandwiched a layer of absorbent material containing cellulose pulp. Professor Griffith said textile finishing occurs when the three layers are laminated, by adhesive, to form the sheet. The product only functions when all three layers are brought together. It is the white body-side fabric which is being finished by adding to it the absorbent layer. (ii) DEPEND® Shield This is a garment-like adult incontinence product that has elastic insertions for shaping and form fitting which can be attached to other garments, and comprising two layers of nonwoven fabric - one spunbonded (next to the skin of the wearer) and the other a SMS fabric to which a thin sheet of polyethylene film has previously been laminated. Between the two fabrics is sandwiched an absorbent core. The fibre side of the SMS/polyethylene composite is on the outside of the product, presenting a more desirable surface for handling, softness etc. Textile finishing occurs in the manufacturing process when the three layers are laminated using adhesives. There is no physical or chemical change to the textile itself except at the site of the bonding. (iii) DEPEND® Pad Incontinence Product This is an adult Incontinence pad which is worn inside an undergarment such as underpants to which it is temporarily adhered. Like the DEPEND Shield, it comprises two layers of non-woven fabric between which is sandwiched an absorbent core, with the layers being laminated using adhesives. The textile finishing is similar to that for the DEPEND Shield. (iv) DEPEND® Undergarment This is garment-like, larger than the DEPEND Shield, and has elastic strands incorporated into the sides for close body fit and to minimise leakage. The two outer layers are non-woven fabrics, the inner side of the outside layer, a SMS fabric, being laminated to a polyethylene film. The outer layer nearest the body is a spunbond fabric. Between the two outer layers is an absorbent core. The three layers are laminated using adhesives. In total, the product involves four laminating processes all of which are regarded as textile finishing. (b) Nappies (i) SNUGGLERS® (ii) VIP KIMBIES® (iii) HUGGIES® These products are disposable nappies and essentially similar. They have the characteristics of garments, ie shaped textile components and various attachments for shaping, solid containment and fastening. All have two layers of non-woven fabrics between which are sandwiched an absorbent bat and an impermeable polyethylene film which is laminated to the inner side of the outer layer of non-woven SMS fabric. In SNUGGLERS, the absorbent bat is contained between two layers of a spunbonded fabric, whereas in VIP KIMBIES and HUGGIES it is contained between two layers of paper tissue. No purpose would be served by gluing the absorbent pad to its wrap. Indeed, this might impede its absorption of liquid. There are other minor differences in detail between the three products, especially as to shape and attachments. The manufacture of all three products includes laminating processes: three in the case of SNUGGLERS and four in the case of VIP KIMBIES and HUGGIES. The adhesion of elastic is a garment process rather than textile finishing. (c) Feminine Hygiene Products KOTEX® Maxi Pad This product is a laminate of a spunbonded fabric to an impermeable polyethylene film, with an enhanced absorbent sandwiched between these two layers. Each of the three layers has its own function. The plastic backing is to protect the wearer's underwear. The body side layer presents a comfortable, textile layer next to the wearer's skin. Lamination is achieved by coating the constituent layers with adhesive and subjecting the assembly to pressure. The two applications of adhesive and subsequent bonding are textile finishing processes by lamination as defined above. The outcome is a process of manufacturing sanitary napkins by textile lamination. (ii) KOTEX® Ultrathin This product is similar to the KOTEX Maxi Pad with alternative absorption media. Assembly of the product involves three laminations using adhesive which are textile finishing processes. (iii) POISED® Liner This product is a laminate of body-side fabric to a liquid impervious polyethylene film between which are sandwiched an absorbent pad and a moisture transfer layer. Assembly involves three laminations using adhesive which are textile finishing processes. It may be observed that in the case of each of the above products, or what I may describe perhaps more appropriately as product sub-groups, there appears reference in Professor Griffith's descriptions of the involvement or occurrence of textile finishing and/or laminating processes, in most cases in circumstances where lamination constitutes, or is an aspect of, textile finishing processes. 34 In a subsequent statement provided to the Tribunal of 26 February 2003, Professor Griffiths provided further or supplementary opinions, in particular in relation to the matter of textile finishing, as follows: 'Opinion 11. Subject to the matters I note below, I agree in essence with the submission of the Respondent that "the textile finishing takes place simultaneously with converting, making up or assembly activities which are not textile finishing" in the case of every product listed with the exception of the Depend® Bed Protector. In the case of the Depend® Bed Protector, the only additional activities to the textile finishing activities involved in its manufacture are cutting, folding and packaging, which are not converting, making up or assembly activities. In the case of the other products listed, the manufacture of each of these products does involve processes other than the textile finishing processes. In my Report I have described these as "additional activities" and they include, for example, the insertion of elastic in some products or the attachment of fastening tape. At various points in my Report I have described these as "garment manufacturing processes". I do not consider these processes to be textile finishing processes and I stated as much in my Report. 12. My reservation relates to the use of the word "simultaneous" in the Respondent's submission, which implies an inter-dependence of the finishing processes and converting, making up or assembly activities. In reality there is no inter-dependence. All the finishing processes I have described could take place on a stand-alone basis, producing finished textile goods for subsequent and independent converting, make up or assembly. It is coincidental (or to the credit of the plant engineers and manufacturing system designers) that the two separate activities of textile finishing and product assembly are combined into a continuum of processes on a single manufacturing unit. 13. Traditionally, textile finishing activities were separate from converting, making up or assembly activities, often occurring between production of the original textile and conversion to the final product. An example of this would be the coating of curtain fabric to make it impermeable to light, before it is converted into curtains, or the application of an "anti-shrink" chemical to cotton cloth before it is made up into clothing. This might be done at 2 distinct points in the one factory, or the textile finishing activities might even be outsourced. However, KCA manufactures its products using sophisticated assembly lines that can combine a number of processes simultaneously. The fact that the processes occur simultaneously does not change the classification of the processes. In the manufacture of each of its products KCA performs textile finishing by lamination several times. 14. Furthermore, in my opinion the textile finishing activities are the core activities that occur during the manufacture of KCA's products. In the case of each product a textile that can be worn next to the skin is laminated with other textiles, an absorbent layer and a polyethylene layer to give the textile particular end-use properties, in particular making it extremely absorbent and impermeable to liquid. These end-use properties are essential to the function of KCA's products. The laminated textile product is shaped and accessories are added to make the product fit the user better, but the fundamental characteristics of the product are achieved by use of textile finishing activities. The references above to 'the Respondent' were of course to the respondent Secretary of the Department. The summaries or descriptions of Professor Griffith as to '… textile finishing by lamination several times' and as to '… laminated with other textiles', appearing in the above extracted segments 13 and 14 of his further opinion evidence, may be observed. So also may be observed his reference above to 'textile finishing activities' being '… core activities that occur during the manufacture of KCA's products'. Incidentally Professor Griffith provided a third statement in relation to the products HUGGIES and VIP KIMBIES, to which I need not specifically refer. KCA submitted that the AAT accepted Professor Griffith's evidence, which appears to have been at least substantially the case. 35 Although a number of other witnesses, who gave evidence for KCA to the AAT hearing below, were not the subject of submissions advanced by KCA on the present application for review, the AAT summarised the testimonies in the reasons for decision below, which I will now reproduce. Ms Doyle, the Product Category Manager for Baby Wear at 'Bonds", being a division of Pacific Brands Pty Ltd, upon the basis of her academic qualifications, and of her experience in the children's clothing industry since 1991, testified inter alia as follows (as reproduced by the AAT in its reasons for decision): 'Ms Doyle stated that she had observed a change in the design of products for the lower half of the baby's body since the early 1990s. An improved fit and reduction in the bulk of disposable nappies means that the shape of the baby's body is not significantly altered when the baby is wearing a nappy. In the same way that it used to be common to see babies dressed in cloth nappies and a T-shirt, it is now common to see babies dressed in a vest or T-Shirt and a disposable nappy. Disposable nappies have become a substitute for underpants until the baby is toilet trained.' That piece of evidence tended to assist at least KCA's co-called clothing issue, which however was not activated on the appeal. Nevertheless it provided some useful background material. 36 A registered mothercraft nurse Ms Goldfinch, engaged in private practice since 1983, involving as it did home visits to new mothers, and counselling on the challenges and problems facing new parents, including problems as to feeding, sleeping, play and medical needs, testified at least to the following extent recorded by the AAT, namely that 'disposable nappies are far more "user-friendly", in that they are more comfortable, fit better and are easier to dress the baby in, than cloth nappies'; Ms Goldfinch was thereafter recorded as adding that disposable nappies (to extract again from the AAT reasons): '… are also more absorbent than a cloth and can to some extent function as underwear, for example, if an infant is partly toilet trained. A significant difference from the cloth nappy is the way a disposable nappy should fit snugly to the child permitting other clothing to be worn with ease.' Again however, that piece of evidence was seemingly also directed more to KCA's so-called clothing contention, but nevertheless provided some further background material. The findings of the AAT in summary 37 The AAT framed the issues to be determined as follows, being issues submitted by KCA to concern questions essentially of construction of the subject legislation and the subordinate legislation: (i) first, how should KCA's manufacturing activities be classified under the Scheme? (ii) secondly, do KCA's products result from an eligible TCF activity referred to in s 5(1)(a) or (e) of the Scheme? The second question is closely linked to the first. Paragraphs 5(1)(a) and (e) of the Scheme have been earlier extracted in these reasons, sub-section 5(1) bearing the heading 'Meaning of eligible TCF activity'. AAT considered that if the answer to the above second question should be in the affirmative, then KCA 'may be eligible for grants under the Scheme'. I would substitute 'is prima facie eligible' for 'may be eligible', in that if the second question be answered in the affirmative, the matters in issue would be remitted for determination according to law. 38 The AAT found that KCA's products did not fall within Part A4 of Schedule 1 to the Scheme, Part A4 being of course headed 'Textile Finishing', and Part A as a whole being headed 'Textile Fibre, Yarns and Woven Fabric, and Schedule 1 being headed 'Eligible TCF activities'. 39 KCA summarised the findings of the AAT, supportive of the above conclusion, as follows: (i) whilst accepting the testimony of Professor Griffith, to the effect that the manufacture of KCA's products in issue involved a process of lamination for importing particular properties to the textile components of the end product, and that textile finishing as defined in Part A4 or perhaps better designated clause 4 of Part A, of Schedule 1 of the Scheme was involved, the AAT further found that textile finishing was not the end product of KCA's manufacturing activity, but occurred in the course of, and as a step in, a more complex manufacturing activity, where the end product was a manufactured good (or product); (ii) none of KCA's products could therefore be categorised as falling within the scope of Part A4 of the Scheme, notwithstanding the AAT's factual finding above; (iii) on that basis, KCA's products did not result from an eligible TCF activity as defined in s 5(1) of the Scheme; and (iv) in any event, KCA's products were specifically excluded from the Scheme by reason of the operation of subs 5(2AB) thereof. Thus it may be seen that the AAT characterised the critical issue of interpretation of the Scheme as involving the determination of a manufacturer's end product, and not, for want of a perhaps more precise description, an activity earlier involved in the manufacturing process. The discussion of the Scheme by the AAT 40 It was common ground before the AAT that KCA's products fell into three categories, (first) incontinence products, (second) disposable nappies and (third) feminine hygiene products; the respondent Secretary did not dispute at the AAT hearing that part of the process of manufacturing those products included laminating textile components. 41 Under the heading 'Discussion of the Law and Findings', the AAT recorded that the Scheme requires the classification of different manufacturing activities in order to determine whether they are eligible TCF activities, the defined meanings of which have been already extracted above from s 5 of Part 1 of the Scheme, and in particular those considered by the respondent Secretary to be here relevant (ie pars (a) and (e) thereof). Schedule 1 of the Scheme lists Eligible TCF activities under the headings to Parts A to G thereof. Those considered by the AAT to be potentially relevant for consideration are Part A4 Textile Finishing, Part C3 Sleepwear, Underwear and Infant Clothing Manufacturing, and Part C4 Clothing Manufacturing n.e.c. (that is, 'not elsewhere classified'). As I have already mentioned, the clothing issue does not ultimately fall for resolution. 42 The AAT drew attention at once at the outset to the note at the beginning of Schedule 1, placed immediately under the heading Eligible TCF activities, reading as follows: 'The activities listed in this Schedule are based on Division C, Subdivision 22 of the Australian and New Zealand Industrial Classification (ANZSIC).' I have already made reference to that note, but having regard to the complexity of the Scheme, repetition thereof is convenient in this further context. Thus it was the view of the AAT that where appropriate, reference could be made to ANZSIC as an extrinsic aid in the interpretation of relevant legislative provisions. Subdivision 22 of ANZSIC is headed 'Textile, Clothing, Footwear and Leather Manufacturing'. 43 The AAT considered that s 5(2AB) of the Scheme, inserted as it was by an amending instrument that took effect on 4 June 2001, and which I have earlier extracted, 'made the ANZSIC classifications an integral part of the Scheme', being a factor which was said to have produced the consequence that 'manufacturing activities classified outside Subdivision 22 fall within the Scheme', that Subdivision 22 being of course part of ANZSIC. Such finding appears to have constituted a material aspect of the AAT's reasoning in favour of the respondent Secretary. The Explanatory Memorandum in relation to the amendment instrument stated as follows: 'This amendment clarifies what is meant by eligible TCF activity under the TCF (SIP) Scheme by expressly aligning eligible TCF activities in the Scheme with Subdivision 22, Division C, Manufacturing, of the Australian New Zealand Standards Industrial Classifications (ANZSIC), published in 1993 by the Australian Bureau of Statistics. It is noted that the Productivity Commission also relied on ANZSIC to define the TCF industry in its review of the industry in 1997. The amendment of Section 5 is intended to make it clear that activities of a kind mentioned in Subdivision 21 or any of Subdivisions 23-29 of Division C of ANZSIC are not an eligible TFC activity unless mentioned in subsection 5(1).' 44 For what it may ultimately matter in the context of the present proceedings, the above opening words of the Explanatory Memorandum by expressly aligning would not seem to be at least entirely appropriate. For present purposes in any event, the relevant words of the Explanatory Memorandum are I think the concluding ones, namely '… not mentioned in subsection 5(1)'. KCA's case focuses on its asserted satisfaction of activities the subject of subsection (1) of section (5), and in particular paragraph (a) thereof, being '… manufacturing activity of a kind mentioned in Parts A to E of Schedule 1 carried on in Australia by an entity', and in particular what appears in Part A of Schedule 1 to the Scheme. That Part A of Schedule 1 to the Scheme is headed 'Textile Fibre, Yarn and Woven Fabric', and the paragraph thereof critical to KCA's case, headed 'Textile Finishing', reads as follows: '4 Textile Finishing This category consists of any activities involved in the processes of dyeing, printing, and finishing, including any process or impregnation, coating or lamination for imparting particular end use properties to yarns, fabrics or other textiles. · Textile dyeing, including textile pigmentation · Textile printing, including flock printing · Label, printed cloth, manufacturing · impregnation, coating or lamination.' That paragraph was frequently referred to in the submissions of the parties simply as 'A4', and I will take the liberty of sometimes doing likewise. 45 Both parties also made reference to the following paragraphs of Part C of the Schedule, which may be conveniently extracted below as part of an introduction to aspects of this subordinate legislation referred to in the respective submissions of the parties: '3 Sleepwear, Underwear and infant Clothing Manufacturing This category consists of the manufacturing of foundation garments, underwear sleepwear or infants' clothing from purchased or transferred in materials. · Brassieres, manufacturing · Corsets, manufacturing · Foundation garments, manufacturing · Girdles, manufacturing · Infants' clothing, manufacturing · Sleepwear, manufacturing · Underwear, manufacturing 4 Clothing Manufacturing n.e.c. This category consists of manufacturing of headwear, fur or leather clothing, clothing or clothing accessories n.e.c., and also includes the provision of clothing trade services such as hem stitching, basque knitting or buttonholing. · Belts, manifesting (for clothing) · Clothing accessories, manufacturing n.e.c. · Clothing, fur, manufacturing · Clothing, leather or leather substitute, manufacturing n.e.c. · Clothing manufacturing n.e.c., including clothing for protective or safety purposes · Gloves, manufacturing (except rubber gloves) · Handkerchief, manufacturing. · Hats or headwear, manufacturing.' I should record that it would appear that ultimately the above segments C3 and C4 would appear to have no direct bearing upon the issues arising on this present application for review of the AAT's decision. As I have elsewhere indicated, the so-called 'clothing issue' appears to be discarded from the application for review made to the Court. Nevertheless in the context of the parties' submissions on this complex and somewhat disorderly piece of subordinate legislation, the presence of C3 and C4 seemed to continue to attract a measure of attention in the present proceedings in this Court for administrative review. Hence for completeness I will refer to aspects of the AAT's discussion of the implications of C3 and C4 in recording that decision. 46 The respondent Secretary appears to have contended to the AAT that in so far as KCA undertook laminating activities in the manufacture of its products, those activities were not susceptible to be classified under A4 as 'Textile Finishing', but rather were composite activities in which lamination occurs, along with a number of other processes, and that only in a highly artificial sense could those activities be described as textile finishing. The respondent Secretary appears to have further contended to the AAT that the manufacture of the relevant KCA products fell outside the ambit of the Scheme because KCA's items of manufacture included baby napkins and sanitary napkins (and like goods), and not the manufacture of clothing or any sub-category of clothing within C3 and C4. That above submission of the respondent Secretary as to the operation of A4, or what may be more specifically described as the reading down of A4, may be foreshadowed at once to be beset with difficulty. 'Textile Finishing' the subject of A4 addresses any activities involved in the processes of… finishing…, including any process of…(inter alia) lamination for imparting particular end use properties to… textiles. 47 Purportedly by way of further elaboration upon the scope of operation of s 5(2AB) of Part 1 of the Scheme (ante), the AAT next referred to that part of subdivision 25 of ANZSIC (Petroleum, Coal, Chemical and Associated Product Manufacturing) comprising class 2543 Medicinal and Pharmaceutical Product Manufacturing, which reads: '2543 Medicinal and Pharmaceutical Product Manufacturing This class consists of units mainly engaged in manufacturing drugs, medicines, medicinal chemicals or other pharmaceutical products for human or veterinary use. Units mainly engaged in manufacturing herbal medicines are also included in this class. Exclusions/ReferencesUnits mainly engaged in manufacturing sheep or cattle dips or blowfly specifics or pesticides are included in Class 2544 Pesticide Mfg. Primary Activities Anthelmintic mfg Ointment mfg Antibacterial mfg Pharmaceutical preparation mfg Antibiotic mfg Saccharin mfg Antitoxin mfg Saline powder mfg Baby napkins mfg Sanitary napkins mfg Barrier cream mfg Serum mfg Contraceptive mfg Tampons mfg Ether mfg Toilet lanolin mfg Feed supplement mfg Toxin mfg Medical gas mfg n.e.c. Vaccine mfg Medicine mfg Vitamin product mfg' Morphine mfg 48 The reference above to Baby napkins, Sanitary napkins, Tampons and Toilet lanolin manufacturings may be observed. The AAT recorded on that purported footing, as follows: 'Thus, pursuant to the Respondent's contentions, if the relevant KCA products manufacturing activity should be classified under class 2543, for example, as "Baby napkins" or "Sanitary napkins" manufacturing or the manufacturing of a like product, then s 5(2AB) of the Scheme excludes that manufacturing from the definition of eligible TCF activity.' For what it may ultimately matter, that observation of the AAT is not seemingly correct. I would not read the ANZSIC reference to 'Primary activities' as exemplifying exclusions, but rather as indicating what falls within the scope of the relevant class. Moreover the fact that KCA's more recently manufactured baby napkins and sanitary napkins may have advanced to an achievement of a clothing characteristic would surely not disqualify the same for those reasons as primary activities within the foregoing ANZSIC classifications of those product descriptions. In any event, any such issue would no longer appear to involve a critical matter for resolution. 49 The submission of KCA to the AAT on that issue, as the AAT purportedly recorded, '[b]y contrast', should be recorded for completeness in any event: 'Subsection 5(2AB) recognises that a manufacturing activity can be of a kind that is referred to in Subdivision 21 or any of Subdivisions 23 to 29 of Division C of ANZSIC and also be of a kind mentioned in Parts A to E of Schedule 1 to the Scheme. However, it is only where the activity is not mentioned in Parts A to E of Schedule 1 to the Scheme that sub-section 5(2AB) can operate. In this regard the wording of sub-section 5(2AB) stands in stark contrast to subsection 5(2A). Here, each claimed manufacturing activity is of a kind mentioned in Parts A4, C3 and C4 of Schedule 1. It follows that sub-section 5(2AB) does not apply. Further, and in any event: (a) the reference in ANZSIC 2543 is to "baby napkins". This reference is suggestive of the square piece of fabric employed for use to form, with other components, the traditional nappy, and not garments of the kind manufactured by the Applicant; (b) there is no reference to adult incontinence products; and (c) there is no reference to the textile finishing activities of Part A4 in Schedule 1.' 50 The above reference to 'Parts A to E of Schedule 1 to the Scheme' is to subpars (a) to (e) of para (1) of Section 5 of Part 1 of the Scheme. I have earlier extracted the full text of that subs 5(1) of Part 1 of the Scheme. It was in the context of the AAT's recitation in its reasons for decision, which I have found necessary to fully recount above, that the AAT moved immediately thereafter to provide what it described as '… the key to resolving this issue'. The AAT's reasoning for dismissal of KCA's case below 51 The view of the AAT was that the key to resolving the principal issue arising, being the operation of subs 5(1) of Part 1 of the Scheme, was to determine the meaning of the term 'manufacturing activity' in the context of s 5(1)(a) of the Scheme by the application of the principles of statutory interpretation. The starting point of the AAT's reasoning in that regard was subs 15AA(1) of the Acts Interpretation Act 1901 (Cth), which states: '(1) In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.' The AAT thereafter referred to s 15AB(1) of that legislation, which the ATT summarised as permitting of reference to certain extrinsic materials, where capable of assisting in ascertaining the meaning of a provision of a statute, in order to confirm the ordinary meaning, or determine the meaning where the provision is ambiguous or obscure, or where the ordinary meaning leads to a result that is manifestly absurd or unreasonable. The AAT next referred to subs 15AB(2) of that legislation, which it described as setting out non-exhaustively the type of extrinsic material that may be referred to, including an explanatory memorandum relating to the bill before the Parliament containing the provision, and to the second reading speech in relation to that bill. The AAT referred further to s 46 of that legislation, which provides that delegated legislation made pursuant to a power conferred by a statute should be construed with the same meanings as used in that statute, unless the contrary intention appears. 52 The AAT reasoned that in order to determine the meaning of manufacturing activity in para 5(1)(a) of the Act, it is necessary to gain an understanding of the purpose or object underlying that legislation, and in particular, whether the Scheme made under the auspices thereof is intended to apply in all situations where a manufactured product contains textile components, or only in situations where the finished product is itself a textile or comprises clothing. For what it may matter, that reference to clothing would appear to have related to the C3 and C4 issues no longer seemingly involved in the remaining still complex issues for resolution. It was emphasised that '[a]mbiguities in the legislation permit reference to relevant extrinsic material to assist in clarifying the purpose or object of the legislation'. The AAT referred to the Explanatory Memorandum to the Textile, Clothing and Footwear Strategic Investment Programme Bill 1999, which the AAT recorded in part as follows: 'The Bill establishes the framework for the implementation of the Textile, Clothing and Footwear Strategic Investment Program. The program aims to foster the development of sustainable, internationally competitive TCF industries in Australia during the transition to a proposed free trade environment under the Asia Pacific Economic Cooperation (APEC) by providing incentives which will promote investment, innovation and value adding to the Australian TCF industries and better exploit Australia's natural advantages in raw materials such as wool, hides and cotton.' The reference to TCF is of course to textiles, clothing and footwear. The rationalisation of what had been for a very long time Australia's protected manufacturing textiles, clothing and footwear industries has been of course an objective of staged pursuit for some time. Hence the Australian Government's introduction of finance incentives to Australian manufacturing industries over some decades or so to meet the introduction of international competition, whereof the present legislation and subordinate legislation is an example. 53 The AAT referred also to the Second Reading Speech to the House of Representatives on 11 February 1999 (page 2455), containing similar material, as follows: 'The proposed Textile, Clothing and Footwear Strategic Investment Program Bill 1999 allows for the establishment of the TCF Strategic Investment Program as the key initiative for the TCF industries. The TCF Strategic Investment Program is a five year, $700 million package aimed at encouraging additional investment in the TCF industries to add value to the products of early stage processing. The program aims to help in the development of sustainable, internationally competitive TCF industries in Australia during the transition to a freer global trade environment, by providing incentives which will promote investment, innovation and value adding to these industries. The program will also provide incentives to areas which are heavily dependent on TCF manufacturing industries, primarily regional areas. The benefits available under the TCF Strategic Investment Program will be paid as cash, annually and in arrears. All firms engaged in textile, clothing, footwear and leather manufacturing in Australia, as defined by the Australian Bureau of Statistics, will be eligible to apply for assistance under the program.' 54 It is not readily apparent why these extrinsic legislative materials are not of equal assistance to both parties, though as will later appear, the respondent Secretary in particular sought to gain assistance to his or her case, merely by reason of the circumstance that the amount allocated by executive government to the program was purportedly limited, or did so at least initially, to $700 million. 55 Upon the footing of the above extrinsic legislative material, the AAT observed that the object or purpose of the Act and the Scheme, made of course under the auspices thereof, is to provide incentives to encourage investment in the textile, footwear and clothing industries in Australia in order to foster the development of sustainable and internationally competitive TCF industries in Australia during the transition to a freer global trade environment. The focus of para (a) of subs 5(1) of the Scheme was said by the AAT to be on manufacturing activity, and further that the relevant Parts of Schedule 1 of the Scheme were said to involve textile finishing (Part A4), the manufacture of sleepwear underwear and infant clothing (Part C3), or the manufacture of clothing not elsewhere classified (Part C4). Two observations may be observed in that latter regard. The first is that the expression manufacturing activity used in subs 5(1) (and para (a) in particular) is one of wide import, picking up everything of that description contained in Parts A to E of Schedule 1 to the Scheme (except what is identified in subss (2A) and (2AB) of s 5 of Part 1). The second is that paragraphs (b) to (e) of subs 5(1) of the Scheme refer to 'activity' of wider dimension. Para 4 of Part A of Schedule 1 to the Scheme headed 'Textile Finishing' is incidentally, commody referred to in the AAT's reasons, and in the parties' written submissions, and occasionally in these reasons, by the abbreviation 'A4'. 56 The first question arising was said by the AAT to be whether textile finishing, which takes place in the course of other (the AAT's emphasis) manufacturing activities, thereby exemplified in the manufacturing of sanitary napkins, and described by the AAT as 'not in itself the end product of the manufacturing activity in question', is to be separately identified as a manufacturing activity under Part A4 (of course of Schedule 1 to the Scheme). The AAT recorded that the respondent Secretary did not dispute 'that part of the process of manufacturing the relevant KCA products included laminating textile components'. 57 The AAT next recorded its acceptance of Professor Griffith's evidence that the manufacture of each of the relevant KCA products involved a process of lamination for imparting particular properties to the textile components of the end product, and '[t]hus, textile finishing as defined in Part A4 of Schedule 1 of the Scheme is involved'. The AAT emphasised however that '… the textile finishing itself is not the end product of KCA's manufacturing activity', since '[t]he textile finishing occurs in the course of and as a step in a more complex manufacturing activity where the end product is a manufactured good'. Thus the AAT articulated in a nutshell the theme of its decision ultimately reached. That 'end product' is at the heart of the issues of construction arising. 58 In the AAT's opinion, 'the Scheme only makes sense' if the focus of its application is placed on 'the overall manufacturing activity rather than its composite parts', the AAT giving the following example: '… the end activity might be dyeing textiles, or coating a textile with an impervious waterproof layer (both within Part A4), or it could be manufacturing pyjamas or nightgowns (ie manufacturing sleepwear within Part C3), or manufacturing handkerchiefs (within Part C4). In each case, it is the overall manufacturing activity – the sum of its composite parts, which is the activity on which the focus should be placed when classifying activities for the purpose of the scheme.' I am unable with respect to discern how that illustration advances the analysis the subject of the AAT's reasons for decision to any significant extent. If dyeing or coating a textile fulfils the Schedule 1 test as an 'end activity', because of the operation of the para 4 Textile Finishing notion the subject of Part A of Schedule 1, why not KCA's process of lamination? Para 4 commences of course with the description… 'any activities involving in the processes of…'. I confess to an absence of understanding as to where that analysis takes the AAT's process of decision-making. 59 Having advanced those considerations, the AAT further reasoned to the effect that regard must be paid to Subdivision 25 Class 2543 Medicinal and Pharmaceutical Product Manufacturing, which I have earlier extracted in these reasons from the text of ANZSIC. After stating somewhat rhetorically '… what do the terms "baby napkins" and "sanitary napkins" used there mean', the AAT offered the preliminary answer, somewhat for the advantage of KCA's perspective, that '… given that the list of primary activities noted in class 2543 is non-exhaustive and, presumably, intended to be indicative of the range of manufactured products included in that class, some latitude should be allowed in attributing a meaning to the terms "baby napkins" and "sanitary napkins"'. But what latitude, it may respectfully be asked? The AAT would not accept KCA's contention that the reference to baby napkins '… is suggestive of a square piece of fabric employed for use to form, with other components, the traditional nappy, and not garments of the kind manufactured by [KCA]'. But why not, I would respectfully query, if KCA's product serves that function, as well as something more? Nor was the AAT persuaded, so the reasons for decision continued, '… by the fact that class 2543 makes no reference to adult incontinence products as justification for interpreting the term "sanitary napkin" narrowly', the AAT finding that 'napkin' was used in that context in the sense of a nappy as defined in the Macquarie Concise Dictionary (3rd ed 1998) definitions as follows: 'A piece of muslin, cotton, or some disposable material, fastened around a baby to absorb and contain its excrement (alteration of NAPKIN)', and secondly in the sense of 'sanitary napkin': 'a soft, absorbent, disposable pad worn during menstruation to absorb the discharge from the uterus'. Moreover the AAT incorporated into its reasons the same Dictionary's definition of 'sanitary' as follows: '1. having to do with health or the conditions affecting health, especially with reference to cleanliness, precautions against disease, etc. 2. favourable to health; free from dirt, germs etc.' But what if not only those functions are indeed fulfilled, but also more, as KCA claimed? 60 By reference to those dictionary definitions, the AAT expressed the opinion that incontinence products of the kind at issue in the present proceedings, except the 'Depend Bed Protector', were all forms of disposable napkin, the purpose of which, like sanitary napkins, is to absorb a bodily discharge, and furthermore, that the word 'sanitary', taken on its own, is sufficiently broad to cover bodily discharges other than those associated with menstruation, and so 'sanitary napkin' could also be interpreted more broadly to include all napkin-type products, the purpose of which is to absorb or contain bodily discharges. Given moreover that the primary activities listed in Subdivision 25 class 2543 are non-exhaustive, and that the class covers medicinal and pharmaceutical products for human use, the Depend® Bed Protector should be treated, in the AAT's view, as a like product to 'baby napkins' and 'sanitary napkins', since it is a product for human health and cleanliness. 61 Upon the purported footing of the analysis of the proceeding paragraph, the AAT concluded at that point of its discussion that '[t]he manufacturing activity involved is the manufacturing of an incontinence product, and although textile lamination is involved, it is neither textile finishing nor clothing manufacture'. I confess to difficulty in following the AAT's process of reasoning, and to the conclusion above restated. 62 Up to this point of its reasoning and findings, the AAT acknowledged that it had 'focused on Part A4 Textile Finishing, when read in conjunction with s 5(2AB) and Subdivision 25 class 2543 of the ANZSIC'. I interpolate to observe at once that subs 5(2AB) did not appear to be a critical limb or step in the AAT's process of reasoning which I have thus far sought to reproduce, despite the emphasis appearing in the AAT's reasoning on that subsection. The AAT then recorded that '[r]eference should also be made to Parts C3 and C4 of Schedule 1 to the Scheme', Part C3 relating to 'Sleepwear, Underwear and Infant Clothing Manufacturing' and Part C4 relating to 'Clothing Manufacturing n.e.c.' (Parts C3 an C4 have been of course earlier extracted in full in these reasons). 63 Seemingly in the wider context of its reasoning I have thus far reproduced in relation to the KCA claim for assistance in its favour of the terms of Parts C3 and C4, the AAT next recorded the following contentions of KCA to the AAT: (i) 'The contemporary infants disposable nappy is a comfortable, well fitting and snug garment which takes the place of an undergarment (the AAT referring in that regard to the evidence of Mrs Goldfinch (ante)); it is common for a baby to be dressed in a disposable nappy and a vest or T-shirt, in which case the disposable nappy is being worn as clothing (the AAT referring to the evidence of Ms Doyle referred to above); Dr Fisher had referred to the nappy as a "sufficient clothing for a baby or infant", and "a complete garment in themselves". Clearly enough nappies are used as sleepwear for infants…'. (ii) 'It follows that the manufacture of nappies is a manufacturing activity of a kind mentioned, specifically, in Part C3 of Schedule 1. Therefore the manufacture of nappies is an "eligible TCF activity" and a nappy is an "eligible TCF product".' (iii) 'Feminine hygiene products and incontinence products are worn under outer clothes, and next to the skin. They clearly function as underwear and sleepwear. It follows that the manufacture of incontinence products and the manufacture of feminine hygiene products is each a manufacturing activity of a kind mentioned, specifically, in Part C3 of Schedule 1. Therefore, in each case, the manufacture of each of the products is an "eligible TCF activity" and an "eligible TCF product".' 64 Thereafter the AAT recorded verbatim in its reasons for the decision the following KCA contentions '[w]ith regard to Part C4, which I again reproduce in summary, though verbatim,below: (i) 'Further the applicant submits that the manufacture of each of the nappy products, incontinence products and feminine hygiene products is a manufacturing activity of a kind mentioned in Part C4 (clothing manufacture not elsewhere classified including the manufacture of protective clothing) of Schedule 1 of the Scheme.' (ii) 'This category includes "clothing for protective or safety purposes".' (iii) 'The Macquarie Dictionary provides the following definitions: "protective" as "1. Having the quality of protecting. 2. Tending or designed to protect". "protect" as including "1. To defend or guard from attack, invasion, annoyance, insult etc.; cover or shield from injury or danger".' (iv) 'The Applicant submits that its nappy products, incontinence products and feminine hygiene products have a 'protective' function in at least two senses. The first is in the sense that the products protects (sic) the wearer's skin from injury in the sense of protecting it from urine; the second is in the sense of enhancing the feeling of "security" of the wearer and protecting, particularly in the case of feminine hygiene products and adult incontinence products, other garments which are worn.' 65 The respondent Secretary contended in response, so the AAT thereafter recorded, that KCA's products were not clothing of any kind, and that disposable nappies were more accurately described as 'baby napkins' rather than 'infants' clothing, for the following reasons again set out verbatim below: (i) 'Feminine sanitary pads and most of the adult incontinence products (the pad and the shield) are worn inside underpants. Their function is to collect bodily waste fluids and to protect clothing. It is not itself clothing.' (ii) 'Even though baby napkins and the Depends (sic) Undergarment can be worn without clothing and even though they may make it unnecessary to wear underclothing (or in the case of baby napkins any clothing), this did not make these products clothing themselves. Their critical function remains to collect bodily waste fluids. They are worn solely because the wearer does not have bowel or bladder control and have a medicinal or hygiene function; they are no longer worn when the person concerned gains (or regains) bowel and bladder control.' (iii) 'The Respondent contends that, on any construction of the Scheme, the products are not clothing.' 66 The AAT expressed its concluding opinion that the principal function of KCA's nappies, feminine hygiene and incontinence products was, as the respondent Secretary submitted, to collect bodily fluids or waste, that being a hygiene function; while unlike the feminine sanitary pads and most of the adult incontinence products, which are absorbent pads worn inside underwear, the DEPEND Undergarment and disposable nappies could be worn without other underwear, their principal function was nevertheless the absorption or collection of bodily fluids and waste. In short, so the AAT's concluding opinion continued, they were used once and then disposed of, and could not be washed for re-use. The AAT further concluded that those products only served as underwear as a matter of containment and convenience. The AAT found that none of the KCA products could be categorised as falling within Part C3 or C4, since they were essentially medicinal or hygiene products which were more appropriately categorised as products falling within Subdivision 25 class 2543. 67 The AAT thus concluded this further or second main segment of its reasons for decision to the effect that none of the KCA products in issue fell within Parts A4, C3 or C4 of Schedule 1 of the Scheme, and those products were specifically excluded from the Scheme by reason of s 5(2AB) thereof. Consequently the AAT further concluded that the subject products of KCA did not result from an eligible TCF activity, as defined in subs 5(1) of the Scheme, and therefore the decisions of the respondent Secretary under review must be affirmed. 68 As I have already sought to explain, by reason of the complexity of the structure of the Scheme, and its lengthy and detailed provisions, I have found it appropriate to describe in some detail the process of reasoning of the AAT, and the order in which that reasoning appears. Although the emphasis of the KCA challenge on the appeal related to the textile finishing provisions of Scheme the subject of A4, I have found it appropriate to summarise findings of the AAT made in relation to the operation of C3 and C4 of the same Schedule 1 as well, so that the context of the AAT's detailed reasoning can be appreciated. The complexity of the Scheme, and the issues tendered to the AAT, were such that the AAT was presented with a very formidable task. My task as been simplified, relatively speaking, by the structure and content of the issues framed by KCA as arising on the present application for review, though as will appear in the next paragraph of these reasons, reference merely of a contextual nature is made to C3 and C4 in the context of the framing of those issues. Issues framed by Kimberley-Clark Australia Pty Limited as arising 69 KCA sought to distill the issues arising on this present application for review by first outlining what KCA described as the primary findings of the AAT that KCA's products did not fall within Part A4 of the Scheme, that segment of course being headed 'Textile Finishing': (i) the AAT accepted the evidence of KCA's expert Professor Griffith that the manufacture of each of KCA's subject products involved a process of lamination for imparting particular properties to the textile components of the end product, and that textile finishing, as defined in Part A4 of Schedule 1 of the Scheme, was involved; (ii) the AAT further found however that textile finishing itself was not the end product of KCA's manufacturing activity, but occurred in the course of, and as a step in, a more complex manufacturing activity where the end product was a manufactured good; (iii) on that basis, the AAT reasoned that none of KCA's products could be categorised as falling within Part A4 of the Scheme, notwithstanding the finding of fact referred to in (ii) above; (iv) on that basis moreover, the AAT found that KCA's products did not result from an eligible TCF activity, as defined in subs 5(1) of the Scheme; (v) the AAT also appeared to hold that KCA's products were specifically excluded from the Scheme by reason of subs 5(2AB) thereof; and (vi) having regard to the AAT's determination that KCA's products did not fall within Part A4 of the Scheme relating to Textile Finishing, nor within the other Parts of Schedule 1 to the Scheme on which KCA relied, namely Parts C3 and C4, it was not clear why it was necessary for the AAT to consider the exclusion purportedly effected by subs 5(2AB) of the Scheme (KCA submitted that the AAT erred in any event in its construction and application of subs 5(2AB) of the Scheme). 70 KCA framed its grounds of appeal based upon the following alleged errors of law: (i) the AAT erred in determining the words 'manufacturing activity' in para 5(1)(a) of the Scheme, in so far as the same concerned textile finishing, 'were to be construed as confined to "textile finishing"', which is itself the end product of a manufacturing activity ('textile finishing' being of course one of the 'Eligible TCF Activities' the subject of Schedule 1 to the Scheme and in particular what was commonly referred to as Part A4 thereof (ie para 4 of Part A of that Schedule); (ii) the AAT erred in its construction of the meaning of 'eligible TCF activity' in s 5 of the Scheme, in so far as it concerned the activity of 'textile finishing'; (iii) having found that 'textile finishing' was involved in the manufacture of each of KCA's products, the AAT ought to have determined, and erred in not so determining, that such activity was a 'manufacturing activity' within the meaning of para (a) of subs 5(1) of the Scheme, and therefore was an 'eligible TCF activity' as defined or described within that section 5 as a whole; (iv) in so far as it purported so to do, the AAT erred in construing subs 5(2AB) of the Scheme so as to apply to the activity of 'textile finishing', and thereby to exclude that activity from being an 'eligible TCF activity' for the purpose of the Scheme; (v) alternatively, in so far as it purported to do so, the AAT erred in applying subs 5(2AB) of the Scheme, so as to exclude the activity of 'textile finishing' from being an 'eligible TCF activity' for the purposes of the Scheme; (vi) the AAT failed to consider and determine whether each of KCA's products the subject of its claims resulted from an 'eligible TCF activity' (being 'textile manufacturing' as defined or described in Part A1 of Schedule 1 to the Scheme), and was hence an 'eligible TCF product' as defined in s 3 of the Scheme for the purpose of determining the sales-based cap for grants pursuant to subs 85(1) of the Scheme, and KCA's eligibility for a Type 3 grant (Part 5 of the Scheme relates to 'Claims for grants' and extends over 25 pages of the Scheme). The reasoning of Kimberley-Clark Australia Pty Limited in support of its grounds for application for administrative review 71 The essence of the submissions of KCA in support of those grounds was that the AAT's reasoning below implicitly imported a gloss or limitation on the operation of s 5 of Part 1 of the Scheme (headed 'Meaning of eligible TCF activity'), in the form in which the Scheme existed at the relevant times, which was not supported by the terms of s 5, or any other provisions of the Scheme, and further that the language of Schedule 1 thereto '…seem to envisage the very activity that [KCA] engaged in, and which the AAT found as a fact, to have occurred'. 72 KCA focused specifically upon the critical Schedule 1 to the Scheme, headed 'Eligible TCF activities', and that segment of Part A thereof headed 'Textile Fibre, Yarn and Woven Fabric Manufacturing' appearing under the sub-heading 'Textile Finishing' (which has been frequently denoted as A4), which contains the category description '… any activities involved in the processes of… finishing, including any process of… lamination for imparting particular end use properties to… textiles'. KCA submitted upon that footing that Schedule 1 did not limit those activities or processes of textile finishing to any particular stage of a manufacturing process, let alone to 'an end activity', or I would interpolate, to any end product, as the respondent Secretary seemingly or effectively contended. KCA emphasised that Part A of Schedule 1 to the Scheme, headed 'Eligible TCF activities', instead 'embraced the manufacturing activity of textile finishing at whatever stage that activity might be undertaken in the course of a manufacturer's manufacture of goods'. Consistently with that submission, para (a) of subs 5(1) of Part 1 of the Scheme includes within the definition of eligible TCF activity which is described as a manufacturing activity of a kind mentioned in Parts A to E of Schedule 1…'. 73 In particular as to the notion of lamination,where twice appearing in para 4 of Part A of Schedule 1 to the Scheme headed 'Textile Finishing', KCA asserted that it was common ground that part of KCA's process of manufacture of its relevant products was that of 'laminating textile components' (citing para 36 of the AAT's reasons for judgment), KCA pointing out that Professor Griffith's undisputed evidence was that textile finishing occurred in KCA's process of manufacture of each of its products the subject of claim (including the Depend Bed Protector). KCA contended that the description lamination was thus used in A4 in its technical sense, the meaning whereof Professor Griffith described at some length in his principal statement in evidence of 29 August 2002 at paras 25 to 34, as follows: '25. Textile finishing refers to processes applied to textiles to produce particular desired properties. 26. The process may be as simple as ironing or pressing to produce a flat surface, ranging to processes where fundamental chemical or physical change is imposed on the textile to give such properties as crease resistance, permanent pleating, water repellency, water impermeability, light impermeability, enhanced thermal insulation, enhanced surface decoration, increased surface smoothness, resistance to mildew, and resistance to insect destruction amongst others. 27. Textile finishing is almost always applied to the newly created textile, whether it be woven, knitted or the outcome of the newer fabric forming technologies. It recognises the limitations imposed on the fabric by those fabric forming processes, or the inherent deficiencies of the fabric structure compared to consumer expectations. 28. Simple physical finishing processes include surface shearing to remove excess fibre; singeing to remove surface fibre; brushing to raise additional surface fibre for softness of handle or enhanced thermal properties. 29. Chemical finishing may include the modification of the fibre structure to 'remember' a specific configuration (in permanent pleat and crease resist applications); modification of fibre surface structure to reduce fabric shrinkage due to mechanical action (for wool particularly); addition of surface chemicals with natural water repelling properties (such as silicones); amongst others. 30. More advanced physical modification includes applying coatings to the fabric to increase stiffness or to give light impermeability, and the joining of the textile to a layer of another material which itself has properties which the textile does not have. 31. Such processing is known as laminating, a common example being the adhesion of a layer of foam to a fabric for enhanced thermal insulation. Such finished fabrics are commonly used in the manufacture of cold climate clothing. Alternatively the principal textile (very often lightweight and thin for aesthetic reasons) may be bonded to another fabric which has bulk and hence warmth, but no aesthetic appeal. 32. Lamination is an increasingly common form of fabric finishing. Optimum outcomes for a product can thus be achieved by combining different materials, which each contribute their particular properties, for the benefit of the product as a whole. That particular property might be low cost; high strength; desirable surface properties; moisture absorbance; or waterproofing; for instance. The total benefit could not be achieved from a single available component. These laminates are exemplifications of the adage that 'the whole is greater than the sum of the individual parts'. 33. Textile lamination is achieved by the adhesion of the principal textile to another component which adds valuable properties not present in the original, which itself has other desirable properties. 34. The adhesion is achieved either through an applied adhesive agent (a glue in effect) acting between the two components, or by modification of the surface of one or both components, for example by heat softening in the case of thermoplastic materials, and effecting a 'weld' or 'meld' between the two surfaces. In the present consideration, the lamination method is the application of an adhesive substance between textile fabric layers, with the application of pressure to ensure intimate surface contact.' 74 In the context of embracing the foregoing descriptions of textile finishing and lamination, Professor Griffith said that he was mindful of the definitions of 'textile', 'fabric', 'fibre', 'laminated fabric' and other definitions appearing in 'Textile Terms and Definitions' published by the Textile Institute, which he described as '… the foremost international professional body of textile science and technology'. In relation to Professor Griffith's evidence as to the technical meaning of textile finishing, where used in A4 of the Schedule, it was submitted by KCA, and rightly not seemingly disputed by the respondent Secretary, that the process of lamination, referred to in A4, imported a technical meaning which Professor Griffith's expertise qualified for acceptance by the Court, in accordance with the doctrinal scope of the well known dictum of Jordan CJ (with whom Halse Rogers and Davidson JJ agreed) in The Australian Gas Light Co v The Valuer General (1940) SR (NSW) 126 at 137, as follows: '… evidence is receivable as to the meaning of technical terms… and the meaning of a technical term is a question of law.' Of course as his Honour continued by way of contrast, '[t]he question whether a particular set of circumstances comes within the description of such a word or phrase is one of fact'. 75 I observe that the Macquarie Dictionary defines laminate as inter alia 'to separate or split into thin layers'. As KCA submitted in any event, there was nothing in the meaning of the word 'lamination', where used in Part A of Schedule 1 to the Scheme, which operated to restrict its meaning to an 'end product' concept or activity, KCA referring in that regard to para 13 of Professor Griffith's second statement (ie of 26 February 2003), which I need not reproduce and also to para 14 thereof, where he stated as follows: 'Furthermore, in my opinion the textile finishing activities are the core activities that occur during the manufacture of KCA's products. In the case of each product a textile that can be worn next to the skin is laminated with other textiles, an absorbent layer and polyethylene layer to give the textile particular end-use properties, in particular making it extremely absorbent and impermeable to liquid. These end-use properties are essential to the function of KCA's products. The laminated textile product is shaped and accessories are added to make the product fit and user better, but the fundamental characteristics of the product are achieved by use of textile finishing activities.' There is in my opinion considerable force in the foregoing KCA submissions upon the construction and operation of s 5 of Part 1 of the Scheme. 76 KCA subsequently recorded that the Scheme has since been amended by Textile, Clothing and Footwear Strategic Investment Scheme Amendment 2003 (No. 1), which was gazetted on 23 July 2003, being incidentally the day before the publication of the AAT's decision the subject of the present application for review. That amendment: (i) amended s 3 of the Scheme so as to change the definition of eligible product; (ii) added to s 5(2A) of the Scheme (relating to activities not being eligible TCF activity) the manufacture of 'prescribed products, their design and ancillary activities related to their design and manufacture'; and (iii) amended s 5(3) of the Scheme so as to include as 'prescribed products', disposable baby napkins, sanitary napkins, disposable bed protectors and disposable incontinence products. As will later appear, KCA placed reliance upon those later amendments as an independent basis for qualifications of its relevant products within the purview of the Scheme, notwithstanding the conceptual hurdle inherent in seeking to construe a legislative or regulatory precept by reference to any later amendment made thereto. 77 The next principal segment of submissions advanced by KCA addressed specifically the operation of subs 5(2AB) of the Scheme, which, by way of amendment to the eligible TCF activity definition provisions of s 5 of Part 1 of the Scheme, took effect on and from 4 June 2001. As I have earlier recorded, the AAT held that at least by virtue of the insertion of that subsection into that s 5, manufacturing activities not within the classifications of ANZSIC fall outside the entire scope of operation of the Scheme. Subs 5(2AB) has been of course earlier reproduced. 78 It was submitted by KCA that in order for a manufacturing activity to be disqualified as an eligible TCF activity pursuant to subs 5(2AB), it must satisfy two descriptions, as follows: (i) it must be referred to in subdivision 21 or any of subdivisions 23 to 29 of Division C of ANZSIC; and (ii) it must not be mentioned in subsection (1) of s 5 of the Scheme; However KCA's eligible TCF activity contended for, being textile finishing within s 4 of Part A of Schedule 1 to the Scheme (earlier identified herein also as A4) in the nature of a process of lamination, Part A relating generally to textile fibre, yarn and woven fabric manufacturing, was asserted by KCA to be a manufacturing activity falling within the scope of subdivision 22 of ANZSIC. For that latter reason alone, subs 5(2AB) was asserted by KCA to be denied an operation, such as to render the relevant KCA activity of lamination 'not an eligible activity'. In addition, KCA contended that such activity was mentioned in s 5(1) of the Scheme, so that the second limb of subs 5(2AB) also rendered the same inapplicable to the present case. Accordingly, it was further contended by KCA that subs 5(2AB) had no operation upon KCA's claim, in so far as concerned Eligible TCF activities the subject of Part A of Schedule 1 to the Scheme, and therefore to the extent that the AAT may have relied on any operation of subs 5(2AB) to defeat KCA's claim, the AAT thereby erred in law. Those submissions of KCA in relation to the meaning and scope of operation of subs 5(2AB) are in my opinion correct. 79 The concluding principal submission of KCA, was therefore in summary to the effect that the AAT failed to consider and determine according to law whether KCA's relevant products resulted from eligible TCF activities, being textile manufacturing in the nature of Textile finishing, within Part A of Schedule 1 to the Scheme, and were each in consequence qualified an eligible TCF product as defined in s 3 of the Scheme, and thus additionally for the purpose of determining the sales-based cap for grants imposed by s 85A(1) of the Scheme, and KCA's eligibility for a Type 3 grant. That latter subsection reads as follows: 'The total grants that become payable to an entity during a particular income year of the entity (the claim year) in respect of eligible expenditure incurred by the entity or TCF value otherwise than during an eligible start-up period of the entity must not exceed 5% of the total eligible revenue for the income year of the entity preceding the claim year.' 80 A submission advanced by KCA in chief of a different kind to what I have addressed thus far in these reasons was also made by KCA in terms which, by reason of its complexity, necessarily needs to be repeated verbatim: it was to the effect that the AAT omitted entirely to address and determine the issue raised below on the part of KCA described in the following terms, and for the following reasons: 'M. CALCULATING TOTAL ELIGIBLE REVENUE (TER) 108. In calculating total eligible revenue pursuant to section 9 of the Scheme for the purposes of determining the sales-based cap for grants pursuant to sub-section 85A(1) of the Scheme, the applicant's sales of the bed protectors, nappies, adult incontinence products and the feminine hygiene products should be taken into account. This is so even if its submission on Parts A4, C3 and C4 are not accepted. The reason for this is that the revenue to be taken into account is the total revenue from sales of "eligible TCF products". An "eligible TCF product" is a "product resulting from an eligible TCF activity". The respondent has accepted, and determined grants based on the fact that the applicant's textile manufacturing activities are eligible under Part A1 of the Schedule 1. In each case the applicant's relevant product, made from eligible textiles is, therefore, a product resulting from an eligible TCF activity, without more. In this regard the vertical integration of the applicant's business is such that its manufacture of the final product can be seen to commence with the manufacture of the textiles used in those products. 109 It is submitted that the words "resulting from" where appearing in the definition of "eligible TCF product" in section 3 import the notion of causation well-known in the law. What is required of the decision-maker is a commonsense evaluation of the causal chain. The words "resulting from" do not require, as a matter of ordinary language, that there is only one cause for the result. This is consistent with the legal notion of causation: March v E. & M.H. Stramare Pty Ltd (1991) 171 CLR 506 at 509. A number of factors may, of course, combine to bring about a result. However it is sufficient for "something" to result from "something else" if that "something else" is a necessary precondition, even though other factors may be necessary as well. In this regard a "but for" test is a relevant and appropriate test. The purpose for which the textile inputs are brought into existence is for use "downstream" by the applicant. In this case the nappies, incontinence products, feminine hygiene products and bed protectors would not have existed but for the applicant's manufacturing activity of making the textile inputs. 110. In this regard it is also important to bear in mind that "results from" does not import an idea of causation limited to "the immediate proximate cause", a notion which has now been disapproved of in the law: Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 463. 111. In this case it is clear that the delegate put a gloss upon the definition of "eligible TCF product" by requiring that the TER be calculated by reference to products that result "directly" from an "eligible TCF activity": see the letter from AusIndustry to the applicant dated 25 October 2001 [T doc 28 p 225]. In this regard the delegate misdirected herself and did not consider the correct question. In the end result, what happened in the present case was that the respondent calculated a TER based only on the applicant's sales of A1 textile to third parties. In so doing the delegate completely ignored the A1 textile destined to be made up into the ultimate products sold by the applicant. This gave an artificially low TER and thus an artificially low cap to the grants awarded to the applicant. 112. It follows of course that the position is a fortiori if the Tribunal accepts, as the applicant submits it should, that the A4 textile finishing activities undertaken by the applicant in the course of manufacturing the products were, in each case, an "eligible TCF activity". As the applicant has already submitted, each of these activities imparts the necessary (essential) end-use properties which are required for each of the products to perform its intended function. It is submitted that it can clearly be seen that, in that instance, the product resulted, in each case, from an "eligible TCF activity". Once again, the evidence given by Professor Griffith in paragraph 12 of his statement of 26 February 2003 [Ex. A3] is important. The textile finishing activities are the core activities that occur during the manufacture of the relevant products. The laminated textile product is shaped and accessories are added to make the product fit the user better, but the fundamental characteristics of the product are achieved by use of textile finishing activities. There is no evidence to the contrary. … N. TYPE 3 GRANT 114. The same reasoning applies in relation to the applicant's claim for a Type 3 grant. The concept of "TCF value-adding" is only defined in the Scheme by the manner of its calculation as directed in section 28 and described in Schedule 2. An important component in the equation set out in Schedule 2 is "turnover" which includes revenue from the sales of an entity's "eligible TCF products". Once again, one is driven to the definition of "eligible TCF product" in section 3 and the question of whether the product results from an "eligible TCF activity". 115. Once again the applicant submits the applicant's sales of the bed protectors, nappies, adult incontinence products and the feminine hygiene products should be taken into account. This is so even if its submissions on Parts A4, C3 and C4 are not accepted. The position is, however, a fortiori if one or more of the applicant's submissions in relation to Parts A4, C3 and C4 are accepted.' The reference above to TER is to an abbreviation for total eligible revenue falling for determination, and the reference above to TCF is of course to textile clothing and footwear. 81 KCA therefore sought the making on the appeal of the following findings, irrespective of the outcome of my resolution of the grounds of appeal already addressed: (i) KCA's products result from, first, its activities of manufacturing non-woven textiles (which the respondent Secretary determined to be eligible under the Scheme), and secondly its textile finishing activities; (ii) KCA's products are therefore each an eligible TCF product by virtue of the definition of that term contained in s 3 of the Scheme; and (iii) accordingly the revenue from the sales of these products should be included for the purposes of calculating, first, KCA's value added 'by reference to Schedule 2 of the Scheme, secondly KCA's total eligible revenue by reference to s 9 of the Scheme. 82 KCA sought further as a consequence that KCA's claim should be remitted to the AAT to determine the quantum thereof, on the basis of findings in its favour sought in the preceding paragraph. Thus KCA sought the remission to the AAT for determination of all issues in relation to this sixth ground of appeal. In the light of the complexities of the issues I am also determining, and the outcome of such determinations, I do not think that it is appropriate that I should resolve the merits of this additional complex issue, at least in advance of my publication of the principal issues arising on the application presently in the course of review. Amendment of the Scheme after the decision-making under challenge 83 The issue addressed by this segment has been foreshadowed already in these reasons. The Textile Clothing and Footwear Strategic Investment Scheme Amendment 2003 (No 1) ('the Amendment') was gazetted on 23 July 2004, which was one day prior to the AAT's handing down of its reasons for decision on 24 July 2004. In the course of the hearing below, the question arose as to whether the amendment may be properly taken into account in determining the proper construction of the Scheme prior to that amendment being made. Primarily, KCA's submissions to the Court were framed in terms that seemingly raise no basis for consideration of the terms of that recent amendment to the Scheme. Nevertheless KCA additionally pressed for the resolution of this further issue in principle, in the context of the present application for judicial review, and referred me to authority purportedly bearing upon the issue, which I will now summarise. 84 In Hepples v Federal Commissioner of Taxation (1991-1992) 173 CLR 492 at 539, McHugh J spoke of his '… difficulty with the notion that the terms of an amendment enactment can throw light on an earlier enactment', but nevertheless referred to the existence of 'high authority for the proposition that the terms of an amendment Act may be used to construe the Act which it amends', being Grain Elevators Board (Vic) v Dunmuncle Corporation (1946) 73 CLR 70 at 85-6 (per Dixon J as he then was) and Cape Brandy Syndicate v Inland Revenue Commissioners [1921] 2 KB 403 at 414 (per Lord Sterndale MR. His Lordship's dictum in Cape Brandy was later approved by the Privy Council in Commissioner for Inland Revenue v Hang Seng Bank Ltd [1991] 1 AC 306 at 324 (Lord Bridge delivering the advice of the Judicial Committee of the Privy Council). More recently in Allina Pty Ltd v Federal Commissioner of Taxation (1991) 28 FCR 203 however, a Full Federal Court (Lockhart Burchett and Gummow JJ) said at 212 as follows: There was some debate before us as to the circumstances in which courts are entitled to examine a later statute to determine whether it throws any light upon the interpretation of an earlier statute. Plainly this course can be taken when the words of an earlier statutory are ambiguous, but if the words of the earlier statute are clear, little assistance can be gained from the later statute. Also, care must be exercised to ensure that the words in the later statute have not been inserted to remove possible doubts…' Subsequently in Interlego AG v Croner Trading Pty Limited (1992) 39 FCR 348 at 382, Gummow J (with whose reasons both Black CJ and Lockhart J agreed) observed as follows: 'There is a line of authority that an amendment may be taken into account in determining the scope of the prior legislation, or at least to avoid a result which would render the amendment unnecessary, or futile or deficient…' 85 Whilst KCA's primary position adopted in its submissions was to the effect that the meaning and import of sections 3 and 5 of Part 1 of the Scheme, prior to the above amendment which took effect on 23 July 2003, were susceptible to ascertainment without the need to take into account the terms of that amendment, KCA nevertheless submitted that the construction of those sections, for which it contended, was supported by that amendment gazetted on 23 July 2003. 86 The amendments effected to the Scheme substituted for the definition of eligible TCF product then prevailing in section 3 of Part 1 of the Scheme (ie the Scheme applicable from 1999 which I have already addressed in these reasons) the following new definition of that term: '… means a product resulting directly and predominantly from an eligible TCF activity mentioned in paragraph 5(1)(a) (other than an activity carried on in relation to a prescribed product within the meaning of section 5) or paragraph 5(1)(e)' and added to the existing subs 5(2A) of Part 1 of the Scheme a new paragraph (e), as follows: '(e) the manufacture of a prescribed product', Those amendments simultaneously inserted in subs 5(3) of Part 1 of the Scheme a definition of 'prescribed product' as follows: 'prescribed product means any of the following: (a) disposable baby napkins; (b) sanitary napkins; (c) panty liners; (d) disposable bed protectors; (e) disposable incontinence products.' The amendments were effected by an instrument called Textile, Clothing and Footwear Strategic Investment Program Scheme Amendment 2003 (No. 1). 87 On the face of the matter, and absent any explanation forthcoming from the respondent Secretary, it might seem to be more than coincidental that those amendments were made in relation to those five specific products presently in contention, and at a time following the conclusion of the AAT hearing, yet prior to the handing down of the AAT's decision. The amendments fall to be compared with the generality of the term Eligible TCF product which appeared in section 3 of Part 1 of the Scheme at all material times prior to the amendment, and continues apparently so to do. The reason why those amendments were made was not apparently disclosed to KCA. 88 KCA submitted that the meaning of sections 3 and 5 of Part 1 of the Scheme, prior to the amendments being made, was ascertainable without the need to take into account the terms of the amendment, and that in any event, it could not be cogently argued that the amendments were designed to remove possible doubts, particularly given that the same introduced a new regime of meaning of 'prescribed product', as well as an assessment regime as to of fact and degree, by virtue of the expression resulting directly and predominantly. 89 KCA submitted further that the words in parenthesis in this amendment to Section 3 of the Scheme refer to an activity carried on in relation to a prescribed product, being words said by KCA to qualify the expression eligible TCF activity mentioned in paragraph 5(1)(a) (to cite precisely the language of the amended definition). KCA additionally submitted that those words are inapposite to describe an overall or entire activity, described by KCA as the linchpin argument deployed on the construction of section 5(1)(a) prior to its amendment. Rather KCA asserted that the expression an activity carried on in relation to a prescribed product is apposite to describe an activity, such as textile finishing, which can be carried on in relation to a product, such as a nappy, in the context of other activities also being carried on. Thus it was said by KCA that the amendment operates to confirm the construction of s 5(1)(a) of the Scheme for which it contends. 90 It is seemingly mystifying that no indication appears within the text of the amendment, or in any accompanying official announcement, in the context of the then subsistence of the present dispute, specifically as to the time from which the amendment should take effect, if retroactive operation of the amendment was intended. I have not encountered sufficient assistance from the authorities cited for the resolution of this further issue arising. In the circumstances I think that it would be unsafe for me to seek to determine the scope of the regulatory intention inherent in that recent amendment in its present form, and absent any official explanation as to its proposed operation. The submissions of the respondent Secretary on the appeal 91 The respondent Secretary framed its case on the appeal, in its supplementary submissions provided after the conclusion of the hearing, principally to the effect that '[KCA] seeks to read Part A4 of Schedule 1 out of context, and in a manner inconsistent with expressly-incorporated extrinsic materials'. The reason thereby advanced was that Part A4 of Schedule 1 to the Scheme headed 'Textile Finishing' purports to address a category of Part A, earlier headed 'Textile Fibre, Yarn and Woven Fabric Manufacturing', being a process of textile finishing characterised by the respondent Secretary as purportedly dealing with 'the manufacture of laminated or otherwise finished textile fibres yarns and fabrics, not with the manufacture of any product that includes a process of textile lamination'. Earlier in submissions, the respondent Secretary had framed its case to similar effect, namely that '… s 5 of the [Scheme] obliges the decision-maker to focus upon the overall manufacturing activity being undertaken… [and] does not permit a decision-maker to characterise a manufacturing activity by reference to just one element of a more complex, and different, manufacturing activity'. Upon that footing, the respondent Secretary further contended that '[t]he far-reaching construction for which [KCA] contends is inconsistent both with the structure of the Scheme, and with the structure of ANZSIC, on which it is based'. 92 It is perhaps appropriate that I first address the ANZSIC aspect of the contention thereby advanced by the respondent Secretary, based as it is upon the provisions of subs 5(2AB) of Part 1 of the Scheme, before I conclude upon the submission directed to 'the structure of the Scheme'. That contention was summarised by the respondent Secretary in the following terms: '… this amendment was designed to clarify that the Scheme does not extend to the provision of grants in respect of the manufacture of products classified in ANZSIC, outside of Subdivision 22 of Division C.' I would reject that contention of the respondent Secretary. It is one matter for subs 5(2AB) of Part 1 of the Scheme to deny qualification as an eligible activity within the scope of s 5 of Part 1 of the Scheme, which in my opinion subs 5(2AB) purports to do, in the case of any manufacturing activity of a kind referred to in Subdivision 21 or any of Subdivisions 23 to 29 of Division C of ANZSIC and not mentioned in subsection 1. It is entirely another matter whether a manufacturer qualifies in relation to an eligible TCF activity within subsection 1, being a manufacturing activity of a kind mentioned in Parts A to E of Schedule 1 carried on in Australia. For that reason alone, the respondent Secretary's purported reliance upon subs 5(2AB) as a basis for disqualification is misconceived. I should further add for completeness that although subs 5(2A) of Part 1 of the Scheme stipulates four exclusions from the Scheme notion of eligible TCF activity (see pars (a) to (d) of subs 5(2A)), none of those exclusions are suggested by the respondent Secretary to import any present relevance. 93 I would next observe that the category of activities the subject of Part A4, headed Textile Finishing, addresses activities involved in the processes of dyeing, printing and finishing, being activities described in Part A4 as including any process of … lamination for imparting particular end use properties to yarns, fabrics or other textiles…'. Thereafter four processes are indicated seemingly by way of exemplification, significantly the last being Impregnation, coating or lamination. Those activities are not reflective of end products, or at least necessarily so, but rather of processes integral to end products. 94 The respondent Secretary purported to support the its principal Part A4 submission, as to alleged inconsistency with the so-called structure of the Scheme based upon end products alone, supposedly by reference to an analogy to the circumstances of KCA's case to the motor vehicle manufacturing process involved by way of the lamination of textile seat covers. The respondent Secretary observed upon that footing that '[m]anifestly that was not the intention of the Scheme, which is directed to the textile, clothing and footwear industries, not to industries that manufacture different products which merely "involve" some of the same broadly-described processes at some point in the course of manufacture'. KCA responded however to what it described as that 'absurd' example of a car manufacturer's lamination of its textile interior finishes, in the following terms: '… As this illustration demonstrates, if a car manufacturer (Company X in the applicant's illustration in the supplementary submissions of 30 March 2004) were to spend $1,000,000 on textile plant or equipment to laminate textile interiors, and a further $1,000,000 on research and development (and in doing so, invests heavily in the TCF industry), then it would be eligible to receive grants for that expenditure under the Scheme. If these laminated interiors are incorporated into its cars, then these cars are the products that "result from" that activity and therefore (on the applicant's analysis) eligible TCF products under the Scheme. However, rather than creating an "absurdity" as the respondent contends, the only consequence of this is that the hypothetical car manufacturer can obtain its full grant eligibility in respect of its eligible expenditure under the Scheme. This is hardly an absurd result. The applicant submits that the purpose of the revenue cap in the Scheme, which is based on the sale of eligible TCF products, is simply to avoid a situation where the government underwrites an entity which cannot generate revenue (in the form of sales of products) from the activities in respect of which it makes a claim for expenditure. The revenue cap and the definition of products in the Scheme are not designed to exclude entities in certain industries from the operation of the Scheme, or artificially limit their grant entitlements (as the respondent contends). It was open to Parliament to exclude certain entitled or industries from the operation of the Scheme; it did not do so.' There is persuasive force involved in that KCA response, such as in my opinion to render that particular attempted adverse exemplification of KCA's case of no assistance to the resolution of the issues of regulatory construction arising. 95 The respondent Secretary's submissions next undertook an annotated summary of the content of the Scheme, purportedly to make good a claim as to structural inconsistency inherent in KCA's case. After referring to the following division of Schedule 1 into what was described as seven broad parts, designed to provide classifications of the segments of the TCF industry intended to benefit from the Scheme, namely: 'Part A - Textile Fibre, Yarn and Woven Fabric Manufacturing; Part B - Knitting Mills Manufacturing; Part C - Clothing Manufacturing; Part D - Footwear manufacturing; Part E - Leather and Leather Product Manufacturing; Part F - Early-stage Processing; Part G - Made-up Textile and Leather Product Manufacturing' the respondent Secretary put forward the following contentions as to the evident implications relevantly of that structure of classifications: (i) in terms of falling within the Scheme definition of 'eligible TCF activity', a manufacturing activity of a kind mentioned in Parts A to E of Schedule 1, which is carried out in Australia, meets that definition, referring thereby to the text of s 5(1)(a) of Part 1 of the Scheme; (ii) Parts F and G of Schedule 1, relating respectively to 'Early-stage Processing' and 'Made-up Textile and Leather Product Manufacturing', comprise categories not directly relevant to the issues arising in the present proceedings; and (iii) Parts A to E are divided into further sub-categories of manufacturing (examples of those sub-categories have already been recorded in these reasons). So much may be broadly correct, except that the Part F category relates to a category not involving a finished or end product. 96 Referring then specifically to the critical fourth category of Part A of Schedule 1 headed 'Textile Finishing', appearing as it does of course under the overall heading to Part A of Schedule 1 to the Scheme headed 'Eligible Fibre, Yarn and Woven Fabric Manufacturing', the respondent Secretary's submissions continued as follows: 'A proper construction of the Schedule recognises that the number of subcategories in each Part are to be read as a more detailed classification of the broader heading. The applicant's case seeks to read subcategories out of the context in which they appear.' The first of those observations is essentially neutral to the issues arising. The second is however controversial. 97 In that Scheme context, the respondent Secretary contended that the Scheme is intended to provide benefits to the textile clothing and footwear industries, and not to all Australian industries. So much may be regarded as obvious. The respondent Secretary then however submitted that 'manufacturing activities classified outside of subdivision 22 of ANZSIC would fall outside the Scheme', that ANZSIC subdivision 22 bearing the description 'Textile, Clothing, Footwear and Leather Manufacturing' (being a subdivision of Division C of ANZSIC). I have already indicated the reason why that must be rejected, namely by reason of the inclusion of the words and not mentioned in subsection 1contained in subs 5(2AB) of Part 1 of the Scheme. For that reason it is unnecessary for me to closely examine the contents of subdivision 22 (ie of Division C of ANZSIC, headed Textile, Fibre, Footwear and Leather Manufacturing), extending as it does over nine pages involving category descriptions numbered 2211 to 2262. 98 After then referring to the yearly caps based upon expenditure for certain kinds of grants (ie Type 1 as to the lesser of two criteria, one being 5%), and to the overall cap provisions stipulated by s 85A of the Act based upon a revenue notion, the respondent Secretary's submission continued as follows: 'This is particularly relevant in the context of a scheme which has capped funding. A grant to persons outside of the TCF industry could detrimentally affect the assistance available to those within the industry.' That unspecific observation begs the question of course as to what constitutes the parameters as to persons not outside of the TCF industry for ANZSIC purposes. It reflects a further instance of the respondent Secretary's submissions designed to invoke bureaucratic budgetary estimates as relevant to the interpretation of the qualifying parameters to entitlement under the Scheme. There can be no definitive, or indeed sensible, implication open to be drawn, as to disqualification of KCA's claims for approximately $20 million, upon the footing merely of the Government estimates of claims being limited to $700 million (see in that regard the reference to that estimated sum appearing in the Second Reading of the Bill, and elsewhere to the duration of operation of the Scheme, placed before the Parliament, which material has been earlier extracted in these reasons). Much more criteria would be required before any reliable or sensible inference could be drawn, merely from that estimate of $700 million, as to the scope of operation of the Scheme upon the circumstances of individual claims such as the present. It is to my mind an entirely unsatisfactory proposition for the respondent Secretary to formulate that the KCA claim for $20 million is unsustainable, as a matter of regulatory interpretation, at least partly because of the extrinsic circumstance of budget estimates, supposedly up to $700 million, made in relation to the prospective five year period of operation of the Scheme. 99 Returning then to the terms of section 4 of Part A of Schedule 1 (ie what the parties abbreviated to 'A4'), the respondent Secretary submitted that 'as the [AAT] determined, and as is obvious, the manufacturing process relied upon by [KCA] do not produce fibres, yarns or fabrics but disposable baby napkins, sanitary napkins and bed protectors', such reference to 'fibres yarns or fabrics' being apparently to the Part A heading earlier identified in these reasons, namely of course Textile Fibre, Yarn and Woven Fabric Manufacturing, and what appears thereunder. When Part A4 is read in context in a context dealing with fabric manufacturing, so the respondent Secretary's submission continued, KCA's case cannot be sustained. The essence of that submission of the respondent Secretary was accepted by the AAT, as the respondent Secretary pointed out. 100 Put another way by the respondent Secretary, the KCA lamination activities were '… not done in the manufacture of textile fibre, yarn or fabrics', but rather '… in the manufacture of nappies, sanitary pads etc', and further that the lamination activities were not fairly to be described as '… any activities involved in the processes of… finishing, including any process of… lamination for imparting particular end use properties to yarns, fabrics or other textiles'. The respondent Secretary continued moreover that '[r]ather, they are composite activities in which lamination occurs, along with a number of other processes, and the final product has a combination of properties deriving from its composite of materials which can only in a highly artificial sense be described as a finishing of the body-side textile layer'. 101 It is difficult however to conceive what is 'highly artificial', or indeed artificial at all, about activities intrinsic to the manufacturing process of the ultimate product, indeed what is substantially or significantly intrinsic, as Professor Griffiths' testimony exemplifies. In any event, the respondent Secretary concluded, '[t]hat was largely a question of fact for the Tribunal', without defining however what was to be inferred from the purported description 'largely'. The resolution of an issue of law in any event may well require an understanding of the nature of the factual basis giving rise to any such issue, in any event, the true interpretation or construction of subordinate legislation normally involves an issue of law (Birch v Allen (1942) 65 CLR 621 at 626-7 per Latham CJ, with whom the other members of the High Court agreed). The submissions of the respondent Secretary, which I have been recording in this segment, have largely addressed the interpretation correctly to be given to contents of the Scheme and of Schedule 1 thereto. The respondent Secretary did not contend that a determination as to the construction or interpretation of this present species of subordinate legislation constituted by the Scheme, albeit not taking the form of regulations, did not constitute an issue of law. Indeed to have so contended would have been erroneous. I should add for completeness however that I do not think that the Scheme relevantly involves beneficial legislation, such as for instance the social security legislation involved in Rose v Department of Social Security (1990) 21 FCR 241, and accordingly I think that the normal principles governing interpretation of subordinate legislation should be regarded as here applicable. 102 The response of the respondent Secretary to the concluding basis or segment of appeal, being that the subject of the so-called sixth ground of appeal advanced by KCA, and thus involving the issue lastly summarised in the segment of these reasons headed 'Issues framed by Kimberley-Clarke Australia Pty Limited as arising', was framed in the respondent Secretary's written supplementary submissions as follows: (i) an eligible TCF product (that is of course a qualifying textile clothing or footwear product) is one which results from a specified manufacturing activity, being the first eligible TCF activity referred to in para (a) of subs 5(1) of Part 1 of the Scheme; (ii) the true issue arising, in the light of the Scheme definition of eligible TCF product appearing in s 3 of Part 1 of the Scheme, involved the identification of a product resulting from an eligible TCF activity, to borrow from the text of that Scheme definition earlier reproduced in [23] above), such activity being necessarily a manufacturing activity (the expression used of course in para (a) of subs 5(1) of Part 1 of the Scheme) carried out by KCA; (iii) the so-called 'simple answer' to that issue was a product described by the respondent Secretary as 'certain kinds of fabric'; (iv) that KCA's products cannot be characterised as resulting from any KCA manufacturing activity was apparent from the fact that they are not manufactured by those activities at KCA's activities at Albury, but rather are the result of other manufacturing activities undertaken by KCA at other plants; and (v) it is self-evident that baby and sanitary napkins do not result from the manufacturing activities undertaken by KCA at its plant in Albury that makes rolls of fabric. 103 Accordingly the respondent Secretary made the submission that it should not be inferred that the AAT failed to have regard to KCA's contentions on this alternative KCA approach the subject of the sixth ground of appeal. Alternatively it was submitted by the respondent Secretary that '… because the only lawful conclusion is that these napkins do not result from the manufacturing activities carried on at Albury, any failure to consider the submission could not constitute a material error'. 104 Those submissions evince however an interpretation of the critical para 4 of Part A of Schedule 1 headed Textile Finishing, without regard to the text of that para 4 and of its context within the wider scope of that Part A, significantly headed Textile Fibre, Yarn and Woven Fabric Manufacturing, and paras 1 to 3 thereof in particular, which refer for example to fibres and yarns as well as fabrics. The language of para 4 is to my mind too intractable to permit the limited interpretation or construction advanced by the respondent Secretary. Moreover the further contention of the respondent Secretary as to disqualification of a product satisfying the Scheme definition of manufacturing activity (see again s 5(1)(a) of Part 1), by reason of the first stage, or extent of first stage, manufacture occurring at one KCA locality (ie its Albury factory), notwithstanding completion of manufacture at another KCA locality, as has been seemingly propounded by the respondent Secretary on the alternative, may be peremptorily dismissed as without foundation, unsupported as it is by reference to any text of the Scheme and the generality otherwise of the Scheme provisions, inclusive of what I have already extracted. Conclusions 105 The AAT's process of reasoning, and in consequence its conclusions, are in my opinion vitiated by the reviewable errors of law, to which I have already referred and identified in the course of these reasons, and which may be summarised below: (i) the AAT failed to give effect, in the course of its decision-making, and thus as reflected in the reasons for decision, to the true scope of meaning and operation of the Scheme definition of eligible TCF activity, and in particular, that aspect thereof comprising a manufacturing activity of a kind mentioned in Parts A to E of Schedule 1 carried on in Australia by an entity, involving the manufacturing activity of Textile Finishing, by reason in particular of the process of lamination for imparting particular end use properties to yarns fabrics and other textiles undertaken in the course of that manufacturing activity; and (ii) put another way, the AAT failed to give proper and appropriate effect, in its process of decision-making and as reflected in and by its reasons for decision, to the Scheme definitions of eligible TCF activity and eligible TCF product, notwithstanding that the products of KCA resulted from an activity involved in the processes of finishing… including any process of lamination for imparting particular end use properties to yarns fabrics or other textiles. 106 Moreover I would observe that had the AAT given expression to those key expressions, and I would add, particularly with the assistance of the evidence of KCA's expert witness Professor Griffiths, being evidence not contradicted by expert testimony of any other expert witness in the case, to the effect that those expressions were satisfied by the manufacturing activities of KCA and the relevant products of KCA produced by those activities, the AAT would have been likely to have found in principle in favour of KCA's manufacturing activities. 107 Of course, all issues of fact fall ultimately to be resolved by the AAT on remission of the proceedings, and not by this Court, though in the light of this extraordinary dispute, it is I think legitimate for the Court to merely proffer that observation, given the content of the respective submissions of the parties, and in particular, the emphatic written submissions tendered on behalf of the respondent Secretary on this application. Given findings on subordinate legislative interpretation in favour of KCA, which I have formulated above, the proceedings should be remitted to the appropriate decision-maker for determination in accordance with my findings, and in the light otherwise of my reasons for judgment, and in the context of that remission, the decision-maker should address and determine the issue as to calculation of the so-called Total Eligible Revenue the subject of my earlier discussion. 108 I should confirm for completeness that the provisions of ANZSIC have no decisive bearing upon the resolution of the issues falling for consideration and determination by the AAT, and further that the AAT appears to have entertained in its reasons, in consequence of the respondent Secretary's submissions below, an incorrect view as to the operation of subs 5(AB) of Part 1 of the Scheme. In that regard, I would refer to observations I have already made on that subject in these reasons. 109 During the course of my detailed account of the reasons for the AAT's decision below, and the submissions of the parties to the Court, I have found it appropriate to make observations as to the viability or merits thereof, accompanied by explanations for so doing. I have adopted that course in the particular context of this complex subordinate legislation. I think that to do so has been hopefully of more ultimate assistance to the parties, because of the detail and complexity of this subordinate legislation, and thus necessarily of the respective submissions of the parties, rather than defer such observations and explanations to a segment confined to conclusions. Hopefully it will be also of more assistance to a Full Court, should this litigation extend further. 110 I am therefore of the opinion that upon the true construction of the Scheme, the manufacturing activities of KCA the subject of these proceedings for review at all material times and for all material purposes fell within the scope of the qualification parameters the subject of the Scheme. KCA's application for review must accordingly be upheld, and the decision of the AAT consequently set aside. The respondent Secretary must pay the costs of the application for review. 111 The orders which I have made accord with the text of KCA's filed application, except for at liberty to apply. I have included liberty to apply, in case the parties would seek any variation to that relief, in the light of my reasons and findings in this complex dispute. I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 8 November 2004 Counsel for the Applicant: DM Yates SC with RC Titterton Solicitor for the Applicant: Deacons Counsel for the Respondent: NJ Williams SC with SB Lloyd Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 8 and 31 March 2004 Date of Final Submissions 16 July 2004 Date of Judgment: 8 November 2004