Amcor Ltd v. Comptroller-General of Customs & Ors [1987] FCA 354

Federal Court of Australia|1987-07-10|Before: Neaves J

ADMINISTRATIVE LAW - Judicial review - Customs - Application for Commercial Tariff Concession Order - Paper making machines - Whether goods serving similar functions produced or capable of being produced in Australia - Whether decision-maker failed to consider whether significant cross-elasticity of demand between goods - Whether decision-maker failed to consider whether order for goods to be produced in Australia would be accepted "in the normal course of business".

Administrative Decisions (Judicial Review) Act 1977 (Cth), s.5

AUSTRALIAN CAPITAL TERRITORY No. ACT G 25 of 1986 DISTRICT REGISTRY

BETWEEN : AMCOR LIMITED (formerly known as APM Limited) Applicant AND: COMPTROLLER-GENERAL OF CUSTOMS

The application be dismissed.
The applicant pay the respondents' costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BETWEEN : AMCOR LIMITED (formerly known as APM Limited) Applicant AND: COMPTROLLER-GENERAL OF CUSTOMS

Amcor Limited (formerly known as APM Limited) ("APM")

seeks an order of review under the Administrative Decisions

(Judicial Review) Act 1977 (Cth) ("the Judicial Review Act") in

respect of the refusal of the respondents to make a Commercial Tariff Concession Order pursuant to Part XVA of the Customs Act

1901 (Cth) in respect of certain paper making machines.

Part XVA of the Customs Act comprises ss.269B to 2695S inclusive. Sub-section 269G(1) provides that a person may make

an application in writing to the Comptroller-General of Customs

("the Comptroller") for a concession order in respect of particular goods specified 1n the application. The expression "concession order" 1s defined in sub-s.269B(1) to mean a Commercial Tariff Concession Order provided for by s.269C. An application 1s to contain such particulars as are prescribed and 1s to be lodged with the Comptroller (sub-s.269G(2)). The required particulars are prescribed in sub-reg.181(1) of the

a description that adequately identifies the goods (par.(d));

a description of the function that the goods normally serve (par.(j));

the tariff classification that applies to the goods (par.(m)) and the rate of duty applicable (par.(n));

. details of communications between the applicant and each person with whom the applicant has communicated in writing for the purpose of determining whether the person produces, or is capable of producing, in Australia in the normal course of business, goods that serve the function described pursuant to the requirement in par.(j);

the extent of any competition that would exist between the goods and similar goods that a person produces, or is capable of producing, in Australia in the normal course of business, if the goods were imported (par.(s)); and

a description that the applicant considers would adequately identify the goods for the purposes of the making of a concession order (par.(u)).

"(1) Subject to this Part, where the Comptroller, after considering an application

under section 269G for the making of an order under this section 1n respect of particular goods, 1s satisfied that -

(a) goods serving similar functions to the particular goods are not produced in Australia; and

{b) goods serving similar functions' to the particular goods are not capable of being produced in Australia by any person in the normal course of business,

the Comptroller shall make a written order, to be known as a Commercial Tariff Concession Order, declaring that the particular goods are goods to which a prescribed item specified in the order applies."

Sub-sections 269B(3), (4), (5), (6) and (7) provide:

"(3) For the purposes of this Part, identical goods shall be taken to serve similar functions.

(4) Wathout limiting sub-section (3), for the purposes of this Part, goods shall be taken to serve similar functions to other goods unless the Comptroller is satisfied that, 1f both goods were readily available for sale throughout Australia, there would be no significant part of Australia in which there would be significant cross-elasticity of demand between the goods.

(5) For the purposes of this Part, goods, other than unmanufactured raw products, shall not be taken to have been produced in Australia unless -

(a) the goods were wholly or partly manufactured in Australia; and

(b) not less than 1/4 of the factory or works cost of the goods is represented by the sum of -

(i) the value of labour of Australia; (ii) the value of materials of Australia; and (i1i) the factory overhead expenses incurred in Australia 1n respect of the goods.

(6) For the purposes of this Part, goods shall not be taken to have been partly manufactured in Australia unless at least one substantial process in the manufacture of the goods was carried out in Australia.

(7) For the purposes of this Part, a person shall be taken to be capable of producing goods in the normal course of business if, in the normal course of business, he is prepared to accept orders for the supply of such goods that have been, are being, or are to be, produced by hin."

"269K(1)}) Where the Comptroller decides not to make a concession order for which an application .... has been made .... he shall, in a prescribed manner, give the applicant notice, in writing of the decision.

(2) The giving of a notice under sub-section (1) an respect of a concession order does not prevent the Comptroller giving further consideration to the application or applications for that concession order or reversing the

On 13 November 1985 APM made application in writing to the Comptroller for a Commercial Tariff Concession Order. The application followed the placing by APM in February/March 1985 of an order with Voith S.A. Maqinas E. Equipamentos of Sao Paulo, Brazil, a wholly owned subsidiary of J.M. Voith GmbH of Germany, for the supply and delivery of a paper making machine having a wire width of 5.6 m. The machine was to be manufactured 1n Brazil for a total cost of $10,133,059.97. The machine is required by APM for making

white papers for the office and computer papers market.

The application was made on a printed form identified by the letters and figure "CTC1". The

Suggested Commercial Tariff Concession Order Wording

Paper making machines having a wire width of 5.6 mor greater including initial spares but not including other parts or components when imported separately

For making white papers for the office and computer papers market

The application was accompanied by a letter dated 4 November 1985 signed by Mr Michael Haywood, a licensed Customs Agent and the General Manager of Brambles International Trade Consultants, a Division of Brambles International Freight Pty. Limited, who was acting on behalf of APM. It referred to discussions which APM had had with Johns Perry Industries

"This Company, whilst manufacturing certain components for paper making machines, do not manufacture paper making machines of the s51z2ze required or of the same technology required by

The application was considered by Mr Kenneth Olliaffe, an officer of the Australian Customs Service and relevantly a delegate of the Comptroller. Mr 011iffe is the second respondent to this proceeding. By letter 13 February

"T refer to an application for a Tariff Concession Order made on behalf of APM Ltd in respect of paper making machines (your reference 10-396).

I have carefully examined the material available in this matter.

It 1s claimed by your clients that no local manufacturer is able to supply a complete paper machine.

I believe it is correct to say that the only likely local manufacturer in this product area, Johns Perry Engineering, of Adelaide, has not previously supplied a complete machine, and similarly, that ail componentry for such a machine is not capable of being manufactured locally.

However, the position, as conveyed by Johns Perry to you in its letter of 28 January 1986 accompanied by form CTC 2 in the affirmative, is that Johns Perry is prepared to accept orders for paper machines.

I have made enquiry and have also been given direct statements to this effect.

Providing the terms of section 269B of Part XVA of the Customs Act are met, the incorporation of overseas technology, expertise or componentry in a locally made machine does not disqualify its manufacturer from assistance provided by the Parliament.

My responsibilities in terms of the Tariff Concession provisions include that I be satisfied that goods serving similar functions are not capable of being produced in Australia.

Having considered all of the information submitted, I advise that I am not satisfied that

a prima facie case for concession has been established in these circumstances."

Having sent telex messages to Mr Haywood and APM on 3 March 1986 that the application for a concession order was refused, Mr Ollaiffe wrote to Mr Haywood on 4 March 1986 in

"I refer again to your application for a Tariff Concession Order made on behalf APM Ltd for paper making machines (your reference IC-396).

Further to my letter of 13 February 1986, I am informed by Johns Perry Engineering that, subsequent to your visit to the company on 19 February 1986, Johns Perry has maintained and will maintain its position in respect of preparedness to accept orders for the supply of goods serving similar functions to those for which you sought concessional admission.

For the reasons as conveyed to you in my letter referred to above and having regard to the continuing circumstances of this matter, I have no alternative but to confirm my telex advice to you dated 3 March 1986 and refuse your application in terms of S.269K of the Customs Act.

I have arranged for a copy of this advice to be supplied to Mr J. Barassi of APM Ltd."

A request was subsequently made on behalf of APM that the decision evidenced by Mr Olliffe's letters dated 13 February and 4 March 1986 be reviewed. That review was carried out by Mr Russell Adrian Shakespear, an officer of

the Australian Customs Service senior to Mr Olliffe. Mr

Shakespear is the third respondent to this proceeding.

concluded that the decision should not be altered. He wrote

to Mr Haywood a letter dated 21 April 1986 in the following

"I refer to your letter of 11 March on behalf of Australian Paper Mills requesting a review of a decision refusing an application for a tariff concession for a paper making machine having a wire-width of 5.6m or greater. The review undertaken by the internal review group has now been completed.

I have examined all papers associated with this application and have carefully considered the points raised in your letter. I note your concern about the way the application has been handled and the impressions gained by you and your client during the early part of 1985 regarding Johns Perry's capacity to manufacture paper making machines.

Notwithstanding, the fundamental issue to be considered is whether at the time the application was lodged, goods serving similar functions were produced or were capable of being produced in Australia in the normal course of business. Might I say at this point that the goods with which I am concerned are paper making machines per se, which may incorporate components sourced overseas. The machines are not, for Tariff Concession purposes, being notionally divided.

I turn now to the matter of your appeal against the Delegate's decision not to approve your application for a Tariff Concession Order. That decision was made on the basis of the response by Johns Perry to your enquiry to that company, and the information and advice gained by the Delegate during a visit to Johns Perry's premises.

As you know, it is the applicant's responsibility to establish the case for a concession order. Where the applicant disagrees with a _ local manufacturer's claims, that local manufacturer should be re-approached, in writing, putting the reasons for the difference of opinion, and requesting a written response to the points raised. Copies of all outward correspondence and the originals of all responses are required to be produced in accordance with Customs Regulation 181(1)(q) and (r).

The Delegate's responsibilities, after all of this has transpired (with or without resolution) are, inter alia, to consider the evidence and make a decision in terms of the legislation.

In this particular case, Johns Perry have claimed that they have sufficient resources, expertise and technical knowledge (including, if necessary access to the resources of Beloit International) to place them in a position to be able to accept orders for a paper making machine serving similar functions. Their preparedness to accept an order was said to have been advised you during discussions, and was later confirmed in writing in their letter to you dated 28 January 1986. Their capabilities were fully tested by Mr K. Olliffe of this office during an inspection of their manufacturing facilities on 20 November 1985. Mr Olliffe has reported that in his view the claims are totally justified. Further, Johns Perry have not resiled from their earlier position.

Against Johns Perry's claims and Mr Olliffe's findings I have weighed evidence presented by you in support of a concession. The evidence presented by you however consists largely of statements about a situation that was purported to exist when the overseas order was placed. (The precise date of order, has never been conveyed to this office).

You claim further that ina meeting with Johns Perry last year 'they stated that they could not make the 5.6 metre width and did not oppose a reference for complete goods ....'. You have submitted no evidence to support such a claim which contrasts directly with Johns Perry's statements to you in their letter and CTC2 form

However, as I have stated earlier, regardiess of Johns Perry's perceived position in the market at the time the overseas order was placed the question to be considered is whether, at the time the application was lodged, that company was capable of producing goods serving similar functions in the normal course of business.

Having regard to the claims made by Johns Perry and the evidence gathered by this office regarding Johns Perry's manufacture, and bearing in mind their proven capacity, demonstrated over many years, to produce complex machinery to order, including for the paper making industry, I would have no justification in setting aside their claims. Accordingly I can only endorse the advice previously conveyed to you that a case for a Concession Order has not been established.

This now completes the internal review procedures available. However I should draw your attention

alia 'a person whose interests are affected by the making of the order, or the decision not to make the order as the case may be, may request the Minister, in writing, to refer to the Industries Assistance Commission (IAC) the question

It should be appreciated that the Minister is not required to comply with such a request nor is he obliged to accept the recommendations of the IAC should he refer the matter to it.

In regard to appeals, the IAC in Report No 305 to the Government on the Commercial By-law System recommended that the grounds for referring a review of a decision would be if:-

(a) the matter involves an important principle of wide application: and

case that the internal review process has been inadequate."

It is the decisions evidenced by the letters dated 13 February 1986, 4 March 1986 and 21 April 1986 that are

the subject of the application for an order of review.

The respondents raised a preliminary question whether APM should be permitted to seek an order of review in respect of the decision taken by Mr Olliffe on the ground that that decision was no longer the operative decision adversely affecting the applicant's interests. It was

submitted that Mr Olliffe's decision had been superceded by the decision, albeit to the same effect, made by Mr Shakespear in the exercise of the powers of internal review

recognised by sub-s.269K(2) of the Customs Act. For APM it

was submitted that Mr Olliffe's was the operative decision, Mr Shakespear not having made a fresh decision of his own but having done no more, so the argument ran, than fail to initiate steps that might lead to a reversal of the previous

In the result, I have not found 1t necessary to reach a definitive conclusion on the point. However, I incline to the view that, for the purposes of the Judicial Review Act, Mr Shakespear is to be taken to have himself made a decision refusing the application for a Commercial Tariff Concession Order and that his is the operative

The ground on which APM relies is that Mr Olliffe and Mr Shakespear failed to consider whether goods serving similar functions to the goods in respect of which the Commercial Tariff Concession Order was sought were capable of being produced in Australia by a person in the normal course of business. The decision-makers were said to have failed in two respects. First, it was submitted that there had been a failure to apply the test required by sub-s.269B(4) in that, in comparing the functions of the imported goods and those of the potential local product, there had been a failure to address the question whether, if both goods were readily available for sale throughout Australia, there would be significant cross-elasticity of

demand between those goods. Secondly, 1t was submitted that

there had been a failure to address the question whether, if

Johns Perry were to accept an order for the supply of a paper making machine having a wire width of 5.6m or greater, the acceptance of that order would be in the normal

Before examining these submissions, reference should be made to the material which the decision-makers had before them and upon which the challenged decisions were

I have already referred to the application and the letter dated 4 November 1985 which accompanied it. Prior to the application being made, certain correspondence had passed between Brambles International Trade Consultants ("Brambles") and Johns Perry. That correspondence consisted of a letter dated 1 August 1985 from Brambles to Johns Perry and a reply thereto dated 8 August 1985. The letter dated 1 August 1985 enclosed a schematic diagram, and provided limited technical details, of the machine which APM

"assess and comment, from a Practical and realistic standpoint in the market place, as to whether the importation of a complete paper making machine at concessional rates would be competitive or potentially competitive with paper making machines which may be manufactured in the normal course of business by your company."

"We have received your letter dated 1.8.85 and the attached machine layout drawing, and wish to make the following comments 1n relation to your

application. Johns Perry - Perry Engineering Division, as Beloit Corporation (U.S.A.) licensees and as

Machinery manufacturers (and designers) 1n our own right, have manufactured and continue to manufacture a large range of paper making machinery and equipment for use in the industry.

Various items of equipment depicted in the attached machine layout drawing are similar to items currently or previously made under licence to Beloit Corporation.

The current tariff concession order relating to 6m and greater machines, whilst still being valid, 1s by no means the current limitation of our manufacturing capability for some items of paper machine equipment.

With reference to Beloit Italia's (not Beloit Australia's) unsuccessful bid, we must state that carte blanche entry of Beloit equipment (should they have been successful) because of our close involvement with them would certainly not have been entertained and we would suggest that the duty level would have been commensurate with the amount of equipment capable of being made by Johns Perry - Perry Engineering Division. Our

position with regard to tariff concession in the mechanical manufacturing field (in the paper or

other industries) has always been and must continue to be one of consistency in our dealings with the Customs Department and be in accordance with our current capability.

In order not to disadvantage any application for tariff concession it would be desirable to know the full scope of equipment purchased by APM and an honest assessment made of the extent of Johns Perry - Perry Engineering capability in that scope, and in doing so successfully satisfy the parameters set out in the CTC2 form.

In the laght of this situation we will await your response before completing the CTC2 form."

Customs Service by Mr J.C. Barass1, APM's General Manager -

"Complete Paper Machines of the size in question of 5.6 metres wire width or greater are not manufactured in Australia and the capability to manufacture an advanced technology fine paper machine as proposed by APM 1s also not available in Australia. This position is reflected in the current Tariff Concession Order for all papermaking machines 6 metres in wire width and greater.

I believe the supply of small, unsophisticated papermaking machines 1S within the capability of local manufacturers, however no local manufacturer 1s able to supply a complete machine regardless of size and certainly not large machines as proposed in our TCO application, nor machines of advanced technology.

In addition no manufacturer in Australia is able to offer a complete package, that is, the inclusion of associated process system design for a papermachine, nor able to provide overall performance guarantees for a complete paper machine project.

I consider that the importation of all paper machines 5.6 metres or wider at concessional cates of duty would not compete with any paper machines capable of being made in Australia."

es of Johns Perry and discussed the application for a

Commercial Tariff Concession Order with Messrs R. King, F.

"With regard to paper machines in general, Johns Perry maintain that:

they have not said that they will not or are not prepared to accept orders for paper making machines

they have manufactured or refurbished a range of equipment used in paper manfr for a number of paper producers and in sizes in excess of 6m wire width

while in smaller wire widths there is more JPs CJohns Perry} can locally manufacture as distinct from units of say 5 moor greater; the issue remains one of preparedness to supply rather than totally manufacture

paper equipment which would be locally manufactured were an order to be received, would consist of:

(1) Pulpers ie preparation equipment being agitators or refiners but not including screens or cleaning equipment

(8) Calendar assembly but not including control crown or swimming rolls

(9) Electrical equipment on a subcontract basis eg ASEA or SIEMENS (with significant local

There followed a reference to certain equipment for which

there was no local manufacture and which would have to be

"To sum up:

Johns Perry, 1t seems to me at this stage, do have a capability in terms $269C(1)(b), at least in taking into

account local content provisions of S.269B(5), (6) and (7).

Johns Perry have indicated a preparedness to accept orders for complete paper making machines, albeit in conjunction with Beloit, USA from whom such technology is licensed.

The correctness of the report concerning the components that could be manufactured by Johns Perry, though with some qualifications and additions, was confirmed by Johns Perry ina telex message dated 12 December 1985. On 13 December 1985 Johns Perry confirmed to Mr Olliffe that they, in conjunction with their technology partner Heloit

International, would accept an order for the supply of a

There was also before the decision-makers a further letter, dated 28 January 1986, addressed by Johns Perry to

"We refer you to the above fearlier correspondence] and return herewith your above referenced CTC2 form dated 24.1.86, duly completed and signed.

In answering the questions on the CTC form, we draw your attention to the following most important comments:

In effecting our licence agreement with Beloit International, the Perry Engineering Division has manufactured, Or 1S capable of manufacture of the following components of the paper making machines at our works here in Mile End, Adelaide.

a) Preparation equipment including pulpers, agitators, refiners and tankage.

c) Press sections including suction rolls and plain paper rolls.

e) All paper dryers both top and bottom up to 4000mm face.

h) Calendar assembly, excluding control crown, chilled iron or swimming rolls.

j) Paper machine support structure and machine frames.

As we have advised you during discussions in our offices, we at Johns

Perry would, in conjunction with our technology partner, Beloit International, accept an order for goods serving similar functions to those listed in (a) and (b) of CTC2.

Several components of a complete paper making machine are currently outside the manufacturing capability of the Johns Perry works at Mile End, Adelaide. These components are as follows:-

1i1) Screens or screening equipment. 1v) Spray systems. v) Winders.

vii) Proprietary equipment such as valves, controllers, etc.

If such items were included in an order that Johns Perry received in conjunction with its technology partner, Beloit

International, such items would be supplied by sub-contracting."

The reference to the functions listed 1n (a) and (b) of CTC2 in sub-par.2 of the letter was a reference to the description of the goods to be imported and the suggested Commerical Tariff Concession Order wording as appearing on the front sheet of the form, those details being identical with those set out in APM's application and referred to above. The form CTC2 was completed by Johms Perry by answering the following four questions in the manner

Do you produce in Australia any goods serving similar functions to the goods listed at A and B on page 1? Yes

for production in Australia of any goods serving similar functions to those listed

Payable on the goods listed at A and B on page 1 have a substantially adverse effect on the market that 1s available

Do you know of any other Australian manufacturer of the goods listed at A

Reference should also be made to a letter dated 13 February 1986 from Brambles to the Australian Customs Service. In that letter Brambles, while accepting that Johns Perry manufactured certain components of paper making machines and provided for the maintenance of such machines previously imported, challenged the view that Johns Perry could be regarded as a manufacturer of a complete paper making machine with a wire width of 5.6 m. Having made the point that what APM required was a machine of that size and type and that smaller width machines would not be

"As there is no choice for APM or other paper makers to consider the smaller machines' there must therefore be a significant absence of cross @lasticity of demand. With this absence it cannot be regarded that a smaller machine can be Cin] competition with a 5.6 metre machine.

As far as the aspect of serving a similar function is concerned, the comparison must revolve around what is practical and realistic in the market place and the key factor is competition or potential competition which exists between the imported and locally produced goods. There are no 5.6 metre width machines manufactured in Australia and there is no competition between the large and the _ small machines both serving different needs of the industry."

The letter was critical of the information made available by

Johns Perry and asserted that, at a meeting in Adelaide, that company had "advised that they could not manufacture the size APM required". Tt was disputed that Johns Perry could accept orders for complete paper making machines, contending that any order would be accepted by Beloit International with Johns Perry being no more than a

Following the receipt by Brambles of Mr Olliffe's letter dated 13 February 1986, the text of which is set out earlier in these reasons, a meeting took place on 19 February 1986 between representatives of Brambles and Johns Perry. Johns Perry maintained the position that it was prepared to accept orders for the supply of goods serving similar functions to those for which a Commercial Tariff Concession Order was sought by APM. Upon that information being conveyed to Mr Olliffe, he determined that the application should be refused. The letter dated 4 March

1986 to which reference has already been made was then sent.

For the purposes of the review by Mr Shakespear of Mr Olliffe's decision, Brambles were invited to submit any new evidence which would support the application for a concession order. In response to that request Mr Haywood called upon Mr Shakespear and presented a letter from Brambles dated 11 March 1986. The letter argued the case for the making of a concession order. The arguments were

similar to those put to Mr Olliffe though the argument that

Johns Perry were not capable of producing a complete machine "in the normal course of business" was elaborated at greater length than it previously had been. Johns Perry was described as "a known manufacturer of certain components for paper making machines and possible manufacturer of the small conventional paper making machines". It was contended that the manufacture of a complete machine embraces' more than mechanical engineering skills and requires experienced paper making technological know how which, the writer said, he

believed Johns Perry did not possess. The letter concluded:

"Finally the Tariff Concession criterion regarding manufacturing equipment capable of performing a similar function must be examined from a practical and realistic position in the market place. Anyone examining the market place when A.P.M. had to make their decision to purchase could not but find that Johns Perry were

not offering paper making machines to the industry."

Mr Haywood also put oral submissions to Mr Shakespear. However, no new or additional factual material in support of the application was presented. Johns Perry provided some additional information, being information which it had supplied to APM at its request. The substance of that information was that a notional factory costing exercise had been completed for a machine which Johns Perry would produce on APM's order. According to Mr Olliffe, the information

"The results, with the main machine broken down into major components, range from 0% for the necessary imported components through 60% for the Fourdrinier unit up to 100% for stuff like end

rollers, machine frame and storage. Even excluding further equipment that he could

Mr Shakespear's decision was conveyed to Mr Haywood by letter dated 21 April 1986, the text of which has already

It is common ground that paper making machines having a wire width of 5.6 m or greater for use in making white papers for the office and computer papers market were not, at the date of the application for a Commercial Tariff Concession Order, being produced in Australia (sub-s.269(1)(a)). The question for the decision-makers was, therefore, whether they were satisfied, on the material before them, that goods serving similar functions to paper making machines of the above description were capable of being produced in Australia by any person in the normal course of business (sub~-s.269C(1)(b)). The question concerning similarity of function which that provision of the Act poses is to be answered by reference to the criteria specified in sub-s.(3) or (4) of s.269B, namely identity of the goods (in the sense of mechanical or physical function) or, alternatively, significant cross-elasticity of demand between the goods (a market or economic test): Davies Craiq

Pty. Ltd. v. Comptroller-General of Customs (Davies J. - 19

is the relevant provision. Applying that provision, the

decision-makers were bound to conclude that the goods specified in the application and the goods which could he produced by Johns Perry served similar functions unless they were satisfied that, 1f both goods were readily available for sale throughout Australia, there would be no significant part of Australia in which there would be significant

It 1s important to recognise that a Commercial Tariff Concession Order applies in respect of all goods, by whomsoever imported, meeting the description of the goods specified in the order which are imported into Australia after the date specified 1n the order. It follows that, in the present case, the decision-makers were to answer the question posed by sub-s.269(1)(b) not in relation to the machine, with its particular features and characteristics, which APM was purchasing from Voith S.A. Maquinas E. Equipamentos and proposed to import into Australia, but in relation to a class of goods, namely paper making machines

having a wire width of 5.6 mor greater and having the

The decision-makers were, therefore, not bound to take into account such matters as the configuration of the machine being imported, the specifications in accordance with which it was to be constructed, technical data relating to its performance, its price, the warranties or performance guarantees (if any) which may have been given by the

manufacturer, or the projected date of delivery of the

imported machine. I should add that, if 1t be the position that the decision-makers were entitled to take those matters into account, APM 1s not ina position to complain that they failed to do so as APM took no steps to support its

application with material pertinent to those matters.

An examination of Mr Olliffe's letters dated 13 February and 4 March 1986 informing APM of his decision discloses that, while the writer acknowledges that he 1s required to be satisfied, before making a concession order, that goods serving similar functions to those in respect of which the order is sought are not capable of being produced in Australia, there 1s no express reference to cross-elasticity of demand in respect of the goods in question. There is, however, a general reference to the necessity for the requirements of s.269B of the Customs Act to be met though, in its context, the reference would appear to be to provisions of that section other than sub-s.(4). That Mr Olliffe should have made no express reference to cross-elasticity of demand is understandable when one has regard to the arguments that were put to him on behalf of APM. The argument that was put on cross-elasticity of demand was confined to a contention that there would be no cross-elasticity of demand, and consequently no competition, between imported paper making machines having a wire width of 5.6 m or greater and having the function specified in the application and a locally produced machine having a lesser wire width. This argument reflected APM's contention that

Johns Perry, while being capable of producing components for

paper making machines and possibly of producing small, unsophisticated paper making machines, did not have the capability or the technological know how to manufacture a machine with a wire width of 5.6 m or greater. A machine of that dimension and function and the small conventional machines were said to serve different markets and not to he 1n competition with each other. Mr Olliffe's letters were obviously directed to those arguments. It 1s of significance that 1t was not contended on behalf of APM that there would be no crosSs-elasticity of demand between an imported paper making machine of the requisite dimensions

and function and a similar machine locally produced.

An affidavit was sworn in this matter by Mr O0lliffe on 7 October 1986. Paragraph 24 states that, before writing

the letter dated 13 February 1986, he considered all of the

material then available to him. The paragraph continues:

"Implicit in my consideration of the material was whether the goods to be imported had the potential to compete with goods capable of being produced in Australia by Johns Perry. I came to the view that in this matter a case for concessional admission had not been established."

In cross-examination, Mr Olliffe was asked what part of the statute he had in mind in undertaking the exercise referred to in par.24 of his affidavit. He

"Well, certainly B and C because why I was looking at - what I had before me was an application for a concession for a class or kind

of goad. It was not just under consideration as a 5.6 metre wide machine for APM. It was whether the criteria could be met for a proposed

The references to "B" and "C" are clearly references to ss.269B and 269C of the Customs Act. The following

"Q. You were concerned not only with the effect 1t would have on Amcor, but also the effect that it would have on the next person who wanted to bring ina machine that answered that description?

A. That is right and that is a consideration that I extend every day in my work.

Q. And what did you consider when you undertook the consideration of the material to determine the question whether the goods to be imported had the potential to compete with goods that could be made by Johns Perry?

A. Well, of course I was aware that we were in the general heavy engineering industry area, that we are talking about purpose built equipment, generally dealt with ona tender basis over a long period of time for a great deal of money. I had to consider whether the imported goods as applied for in the case of the APM application - and I had others - in relation to the APM application, would compete with any equipment which Johns Perry were capable of producing in terms of the tariff concession

QO. But compete in what terms - compete in what areas?

look at B(3) and B(4) and we talk about cross-elasticity, what we are really saying in the legislation 1s competition and in this sort of one off speciality engineering area, an order placed overseas for this sort of equipment 1s an order or a sale that Johns Perry would not get.

I did not understand that. But what were the areas in which Johns Perry were capable of competing?

In the general paper making machine area. We are only talking in TCO terms here. It might well be that commercially nobody in the Australian paper industry would bother to place with them an order, unfortunately.

Well, when you talk about competing, there are a number of ways in which one can compete, are not there? You can compete in terms of price?

You can compete in terms of the quality of the product that you can deliver. You can compete 1n terms of the warranties you are prepared to give?

Yes, certainly. Backup for breakdown and maintenance? Yes, all those things.

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