REASONS FOR JUDGMENT
SELWAY J
129 The appellant appeals from the decision of the primary Judge (Chief Executive Officer of Customs v Adelaide Brighton Cement (2003) 75 ALD 478). The primary Judge dismissed an 'appeal' from the Administrative Appeals Tribunal ('the AAT'). The AAT had held that the respondent was entitled to a rebate of the diesel fuel excise because it was carrying on 'mining operations' in quarrying limestone material for use in cement production. The question in issue before the AAT was whether, for the purpose of the relevant statutory definitions, the respondent was mining for minerals other than limestone. The AAT decided that the respondent was mining for the various component minerals within the limestone material that the respondent mined at its quarry. The primary Judge agreed. For the reasons given below I am of the view that the AAT came to the wrong conclusion because it made an error of law. For that reason I would allow the appeal and remit the matter back to the AAT for further consideration.
130 The facts upon which this appeal is brought are not in dispute. For my purposes they can be summarised shortly. The appellant manufactures cement. For this purpose it requires 4 minerals: calcite, silica, alumina and haematite. These minerals, particularly calcite, are contained in limestone. They may be found elsewhere. Calcite, for example, is also contained in marble and shell sands and the appellant has also obtained calcite from these sources. Nevertheless, in order to obtain calcite and the other minerals referred to above for the purpose of manufacturing cement the appellant extracts limestone material from a quarry it operates at Klein Point. The mining operations are open cut operations. The top soil and the hard limestone immediately below it (called 'kunkar') is extracted and discarded. The limestone immediately below that is tested for appropriate levels of the 4 required minerals. It appears that the limestone is mixed with other limestone from elsewhere in the quarry to ensure that the resulting mixture is consistent for the respondent's purposes. Assuming that the limestone meets the required specifications ('cement-grade limestone') the limestone is stored and used in cement production. Any limestone that does not meet those standards is discarded. At no stage are any of the four minerals physically separated from the remainder of the ore that is generally described as 'limestone' or, more particularly, 'cement grade limestone'.
131 The legal issue arising from those facts is whether the appellant is entitled to a diesel fuel rebate. In carrying out its quarrying activities at Klein Point, and in its subsequent use of cement grade limestone, the appellant used diesel fuel. It paid excise tax in relation to the purchase of that fuel. However, it is accepted by the parties that the appellant is entitled to a rebate of the duty it has paid if the diesel fuel was used 'in mining operations': see s 164(1)(a) of the Customs Act 1901 (Cth) (the Act). Hence, its eligibility for the diesel fuel rebate claimed depends on the respondent having used the diesel fuel in 'mining operations'. That term is defined in s 164(7) of the Act.
132 The definition changed with effect from 31 July 1997, but the parties are agreed that the changes are of no particular significance to the issues before the Court. It is sufficient to set out the current definition:
'mining operations means:
(a) exploration or prospecting for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or
(b) operations for the recovery of minerals, being:
(i) mining for those minerals including the recovery of salts by evaporation; or
(ii) the beneficiation of those minerals, or ores bearing those minerals;
…'
133 As might be expected the term 'mining operations' is defined in relation to the extraction of 'minerals'. That word is also defined in s 164(7) of the Act. The definition is a broad one encompassing, for example, liquid and gaseous substances. At all relevant times the definition was:
'minerals means minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic, except:
(a) sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel or water; or
(b) limestone (other than agricultural use limestone).'
134 The dispute between the parties is limited to the effect of par (b) of this definition. The appellant accepts that, but for that par, the respondent was carrying on 'mining operations' in quarrying for limestone at Klein Point. In particular the appellant accepts that 'limestone' used in cement production would be a 'mineral' for the purpose of the relevant definition if the exception to the definition of 'minerals' did not include par (b) (contrast North Australian Cement Limited v Federal Commissioner of Taxation (1969) 119 CLR 353 ('North Australian Cement No 1')with North Australian Cement Limited v Federal Commissioner of Taxation (1989) 89 ATC 4765 ('North Australian Cement No 2')). Given the breadth of the current definition, and the specific exclusion of 'limestone', that concession is properly made, whatever might be the position in other contexts.
135 However, the appellant says that the mining operations were to extract limestone within the terms of par (b) and that consequently the operations were not 'mining operations' as defined and the diesel fuel rebate is not applicable. The respondent, on the other hand, says that it was not seeking to extract 'limestone' but rather the 4 minerals comprised within it. The respondent says that it was carrying out mining operations and is entitled to the rebate.
136 The dispute was ultimately considered by the AAT. It identified the question that it had to resolve as being 'the identification of the minerals for which Adelaide Brighton Cement was mining'. In a careful and detailed decision the AAT reached the view that the separation of the kunkar from the rest of the limestone showed that the respondent was not seeking to extract mere limestone, but was seeking to extract the 4 minerals as it claimed. Consequently, the AAT held that the respondent was entitled to a diesel fuel rebate in relation to diesel used in the 'mining operation'. There was also an issue before the AAT as to the extent of that mining operation, but that aspect of its decision has not been subject to any review and need not concern this Court.
137 The appellant 'appealed' to this Court from the decision of the Tribunal: see s 44 Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'). In relation to such an 'appeal' the jurisdiction of this Court is limited to the correction of errors of law. The 'appeal' was dismissed at first instance. The primary Judge held that there had been no error of law by the AAT. The appellant appeals to this court from that decision. In essence the appellant repeats the argument it put to the primary Judge - on the facts as found it was an error of law to conclude that the respondent was entitled to a diesel fuel rebate.
138 Both the AAT and the primary Judge relied upon two previous decisions of this Court: Goliath Portland Cement v Chief Executive Officer of Customs (2000) 101 FCR 11 ('Goliath')and David Mitchell Ltd v Chief Executive Officer of Customs (2001) 107 FCR 252 'David Mitchell'). The primary Judge carefully considered both decisions in his reasons. The appellant has argued before this Court that these two decisions are inconsistent and that David Mitchell should not be followed. The practice in this Court, even when sitting as a Full bench of 5 Justices, is that previous Full Court decisions should be followed unless those decisions are 'plainly wrong' or unless there are inconsistent Full Court decisions: see Transurban City Link Ltd v Allan (1999) 95 FCR 553. Consequently the question of whether the previous decisions are inconsistent is important in determining what answer should be given on this appeal. It will be necessary to return to this issue below.
139 I remind myself that the identification of the correct meaning of a statute (and of the words and phrases within it) is a question of law. On the other hand where the correct meaning of a particular word is its usual or ordinary meaning then the question whether particular facts fall within that meaning is usually a question of fact. See generally Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 ('Agfa-Gevaert') at 394-396. Of course a determination that particular facts fall within the 'usual meaning' of a word or phrase may disclose that the decision maker has not properly interpreted the statute in which case a decision which might otherwise be characterised as one of fact nevertheless involves an error of law.
140 I turn then to the correct legal interpretation of the relevant statutory provisions. The first thing to note about the correct meaning of the provisions is that the availability of the rebate is dependent upon the identification of the subjective purpose of the purchaser. Under s 164(1) of the Act the rebate is payable to a person who purchases diesel fuel 'for use by him in mining operations'. (Although, if ultimately used for a different purpose, the rebate is repayable: see s 164(2).) Plainly enough the purpose in s 164(1) of the Act is the subjective purpose of the purchaser.
141 Similarly, the use of the word 'mining' in the term 'mining operations' as defined in s 164(7) of the Act suggests strongly that the relevant operations are purposive - the relevant operations are for the purpose of digging in the earth to extract minerals. The definition of 'mining operations' is consistent with this purposive approach. This is shown by the use of the word 'for' throughout the definition. Similarly, the activities referred to are not limited to the extraction or recovery of minerals, but to activities directed to the relevant purpose - exploration, prospecting, removal of overburden and so on. These activities may be preparatory to the creation of a mine, but are directed to the relevant purpose.
142 The relevant purpose is a subjective purpose. Subject to the comments below, the determination of subjective purpose is a determination of a fact. The relevant fact would normally be proven by establishing what is actually done, on the basis that the best evidence of a person's purpose is usually what the person actually does. However, the real possibility exists, particularly at a stage preparatory to actual mining, that a person's purpose might be to mine for a mineral or minerals even if no particular minerals are ultimately recovered, or indeed, if quite different minerals are ultimately recovered. At the stage of exploration, for example, the explorer's subjective purpose may be to explore for limestone even though ultimately the person discovers gold, not limestone. Clearly enough evidence of what is recovered will usually be relevant to the question of purpose, but it is not determinative of it.
143 Similarly, the fact that something is actually extracted does not mean that its extraction was the relevant subjective purpose. For example, if nuggets of gold were contained in a body of limestone and the limestone was extracted to get at the gold then, if it were necessary to determine whether the purpose of the mining operations was mining for gold or mining for limestone, it might well be concluded that the relevant subjective purpose was the extraction of gold, not limestone. The extraction of the limestone might well be characterised as either a waste product or a by-product of the gold mining operation. Such an example is sufficiently obvious as to suggest that the correct legal characterisation of the relevant purpose is a simple question of fact. This is because the apparent obviousness of the result may mislead as to the process of legal characterisation involved.
144 As already remarked, the identification of the relevant subjective purpose is a question of fact to be determined in this case by the AAT. However, that statement is subject to the AAT having correctly determined the meaning of 'mining operations' and 'minerals' in the Act so as to enable it to ascertain what the relevant subjective purpose is for the purpose of the Act. The determination by the AAT was not simply one of fact - it also included the correct legal interpretation of the relevant words of the Act. Put that way it is clear that the issue before the AAT was not simply one of fact, but also one of law.
145 Some of the words used in the definition of 'mining operations' may be used in a technical or specialised sense. The word 'beneficiation' is an example: see Abbott Point Bulk Coal v Collector of Customs (1992) 35 FCR 371 at 374. However, both parties agreed that the word 'limestone' in par (b) of the definition of 'minerals' is used in its usual and normal meaning. I agree. Although some more precise definitions were attempted in the evidence given before the AAT, the usual and normal dictionary meaning of the word 'limestone' is 'a rock consisting wholly or chiefly of calcium carbonate'. There is no doubt that what was being extracted from the quarry at Point Klein was properly described as 'limestone'.
146 The Tribunal nevertheless found that the respondent was mining for minerals other than limestone, namely the four minerals, including calcite, contained within the limestone. In my view that finding by the AAT was based upon its assumption that each mineral is mutually exclusive of all other minerals with the consequence that the factual identification of the relevant mineral being sought by the respondent as 'calcite' (or the other three minerals) necessarily meant that it was not 'limestone'. This can be seen in two paragraphs of its reasoning:
'Having regard to all of the material, I find that the material that Adelaide Brighton Cement obtains from Klein Point is generally known both by it and by others in the industry as limestone. It is not, however, mining it for its being limestone. If it were doing that, it would have no need to discard the kunkar or to test the remaining limestone to ensure that it meets certain prescribed standards. I am satisfied that it is mining it for four specific compounds that the limestone contains: calcite, silica, alumina and haematite.
…But for the exclusion of limestone from the definition of minerals, it would follow that Adelaide Brighton Cement is entitled to a diesel fuel rebate up to and including its stockpiling the material at Klein Point. Does the exclusion of limestone disentitle it? In view of the findings that I have already made, I do not consider that it does. I have found that Adelaide Brighton Cement's object in mining is not limestone. Indeed, it discards some of the limestone as suitable only for land re-examination [sic - reclamation]. Its operations I have found are for the recovery of calcite, alumina, silica and haematite. They are not for the recovery of limestone. The fact that limestone does or may contain those four minerals does not detract from this finding. The section focuses on Adelaide Brighton Cement's operations and on what those operations are for. It does not focus on whether the minerals sought by Adelaide Brighton Cement are found in limestone and disentitle the company to a diesel fuel claim on that basis.'
147 It seems to me to be plain from that process of reasoning of the Tribunal that the Tribunal was of the view that its conclusion that what the respondent was seeking to use in its cement processing, was the calcite, silica, alumina and haematite contained within the limestone material necessarily meant that the respondent was not mining for 'limestone'.
148 It is not surprising that the AAT reached this conclusion. There is at least dicta of this Court in Goliath at 18-19 which would seem to support this approach. It was so understood by a subsequent Full Court in David Mitchell at 257. The primary Judge also seemed to understand Goliath in this way (see at pars [46]-[53]). Nevertheless, I think that the Chief Justice is correct in his analysis of Goliath in his reasons in this case. Notwithstanding the comments in Goliath at 18-19, the actual decision in that case was that where limestone was mined in circumstances similar to those in this case then, as a matter of legal construction, the relevant mineral was 'limestone'. On this basis it seems to me that there is an inconsistency between the actual decision of the Full Court in Goliath and the decision of the Full Court in David Mitchell, notwithstanding that the Court in David Mitchell plainly thought it was applying Goliath. Given that inconsistency this Full Court, comprised as it is of 5 Judges, is free to consider the matter afresh and from first principles.
149 In that context it seems to me that the assumption made by the Tribunal that each mineral is mutually exclusive is erroneous and that the error, relating as it does to the meaning of the statute, is one of law. The assumption involves an error in interpretation that because a thing has a particular name it must be different from something with a different name. The identification of an appropriate name is thus viewed as a conclusion as to its nature and character.
150 There is no doubt that the respondent was mining limestone, or more accurately, this particular limestone, because of its inherent qualities. It was mining this limestone because it contained the four minerals that the respondent needed to make cement. The most significant of these minerals was 'calcite'. 'Calcite' in its ordinary dictionary meaning refers to 'one of the commonest minerals, calcium carbonate, occurring in a great variety of crystalline forms; calspar, limestone, marble and chalk consist largely of calcite'. Not all limestone contains calcite. Not all calcite comes from limestone. Nevertheless, some limestone is limestone only because it is a rock of a particular form which contains calcite. Given the definitions of 'limestone' and 'calcite' it is clear enough that they overlap.
151 The respondent says that there is no such overlap - there is a factual finding that the purpose was to mine calcite and that is the end of it. But that would only be true if the assumption made by the AAT was true - that calcite and limestone are mutually exclusive categories of minerals. The respondent says that whenever the product the miner seeks to recover is not limestone 'as such' (meaning unadulterated limestone used in its raw state for that purpose), but rather its constituent elements (such as calcite) then it is not 'limestone'. The only example given where such unadulterated limestone might be used was in road making or where the limestone is used directly as a building material (in South Australia, for example, limestone known as 'Mount Gambier stone' has been used in building houses). The consequence of treating calcite and limestone as mutually inconsistent categories is that the exclusion of 'limestone' from the definition of minerals effectively has no, or at least very limited content.
152 In my view 'calcite' and 'limestone' are not mutually exclusive minerals. The same thing may properly be described as both calcite and limestone. This is the issue that was raised and considered by Heerey J in Chief Executive Officer of Customs v Goliath Portland Cement Co Ltd (1999) 29 AAR 182 ('Goliath 2') at 186:
'If "limestone" has been expressly excluded from the statutory definition of "minerals" it seems to me to follow inexorably that the essential and defining component of limestone, namely calcite, must also be excluded. One cannot mine for calcite without mining for limestone, and vice versa. Goliath´s argument requires treating the exclusion as if it read "(other than agricultural use limestone or limestone where what is sought is not the limestone as such, but a mineral that is found in the limestone)".'
153 In that case His Honour concluded that calcite and limestone were invariably the same thing. I do not think that that approach is correct either. However, it is not necessary to accept the correctness of his Honour's approach in order to acknowledge that Heerey J has identified a real issue requiring an answer.
154 The respondent refers to some extrinsic material which, the respondent says, supports the interpretation for which it contends, namely that calcite is to be treated as separate from 'limestone'. As the reasons of the Chief Justice show, if the extrinsic material is to be relied upon it may suggest a different result from that contended for by the respondent. However, for my part I think that the mischief is clear enough. I do not think that the word 'limestone' is ambiguous, notwithstanding the difficulties there may be in a particular case in determining whether a particular mineral should be characterised as 'limestone' or not. Nor did the parties allege that the word was ambiguous - they agreed that it bore its usual and normal meaning.
155 However, the fact is that the AAT did not read the word 'limestone' in its usual and normal meaning. Instead it read the word 'limestone' as meaning 'limestone other than limestone where the purpose of its extraction is the constituent minerals contained within it'. This is what the respondent means when it says that the word 'limestone' means 'limestone as such'. This interpretation of the word 'limestone' is necessarily inconsistent with the approach that the word 'limestone' is to be understood in its usual and ordinary meaning.
156 Furthermore, the interpretation proposed by the respondent causes a number of logical difficulties with other aspects of the definition of 'minerals'. First, the definition expressly refers to 'agricultural limestone'. It would appear that this refers to limestone applied to the soil so as to react with it for the improvement of soil quality. If so it is the calcium carbonate within the limestone, rather than the limestone 'as such', which is the active ingredient. When that calcium carbonate is in the form of calcite then, on the approach put forward by the respondent, the agricultural limestone would be characterised as 'calcite'. Mr De Wijn QC, who appeared for the respondent, accepted that the interpretation he proposed meant that the qualification for 'agricultural limestone' was unnecessary because the relevant product recovered was not limestone. As Heerey J pointed out in Goliath 2 at 186 the same issue arises in relation to the exclusion of bentonite and kaolin from the exclusion of clay in par (a) of the definition of 'mineral' (contrast Goliath at 18-19). On the other hand, if the word 'limestone' used in the definition is interpreted in its normal and ordinary meaning then 'agricultural limestone' remains limestone (or at least it may do so) even if the active part of it that is intended to be used is calcite.
157 On the other hand, the appellant argues that if the relevant minerals (in this case calcite and the other three minerals) are not separated from the mineral containing it (in this case limestone) then, as a matter of law, it is the mineral containing it which is being mined, not those which are contained within it. It proposes what is in effect a mechanical test based upon whether or not there has been a physical separation of the relevant minerals from that mineral in which they were derived. The problem with this test is that it ignores the significance of the subjective purpose of the miner which has been referred to above. Of course, the separation of the mineral may provide factual evidence of what that relevant subjective purpose is. For example, if iron was smelted from haematite, this would provide evidence that at least subsequent to the smelting operation the subjective purpose was to obtain iron, not haematite. But this does not necessarily determine the question of what the relevant subjective purpose was prior to the smelting, or even what it was if the smelting had never occurred.
158 The haematite example seems to me to be useful in suggesting what the correct approach to characterisation must be. If haematite were excluded from 'minerals' in the same way that 'limestone' currently is, would it be an answer for a miner to say that it was not mining haematite 'as such' but was mining haematite for the purpose of extracting iron with the consequence that the qualification did not apply? It seems to me that the answer would almost certainly be 'no'. It would usually be implicit in the purpose of mining for haematite that the ultimate purpose was to extract iron. The exclusion of haematite would be rendered entirely ineffective by attempting to distinguish between haematite and iron, even if haematite, in its 'raw' state did have some separate uses. The answer, its seems to me, is to be found in the identification already made that the relevant words should bear their usual and normal meaning. Once that is accepted then the relevant question to be asked is whether on the facts as fully found in the particular case the subjective purpose of the claimant is characterised in ordinary language as the extraction of 'haematite' or some other mineral. Where the haematite was being mined for the purpose of smelting iron then the answer would be yes. Where it is being mined for the purpose of extracting (say) diamonds that were thought to be within it (or where that is a purpose of sufficient significance) the answer would probably be 'no'.
159 Similarly, in this case, the question the AAT was required to determine was whether on the facts as fully found the subjective purpose of the respondent should be characterised in ordinary parlance as the extraction of 'limestone' or some other mineral. In this case there is no doubt what the respondent's subjective purpose was. It was to carry out the mining operation already described to extract the product derived from that operation so as to use that product in the manufacture of cement. The issue in this case is not what the purpose was, but how 'the product' should be characterised for the purpose of the statutory definition of 'mining operations'. More particularly, the question in this case was whether the material in the stockpile, being the material that the respondent intended to produce, was properly described in ordinary language as 'limestone' or as some other mineral or minerals or as including some other mineral or minerals. In my view the AAT did not ask itself this question. Its failure to do so was an error of law.
160 Although the error made by the AAT was an error of law, the correct answer to the question that the AAT was required to determine also involved the determination of a question of fact: see Agfa-Gevaert at 394-396 contrast Goliath at 19 [30].
161 If the only specific mineral within the stockpiled material that was required by the respondent was calcite then the answer to the factual inquiry that the AAT was required to undertake would seem to be obvious, even though it is a question of fact for the AAT. The answer would seem to be that which the respondent itself gave. It described the product of its mining operations as 'limestone'. It described the process of cement making as involving the use of 'limestone'. What evidence there was suggested that everyone else did the same. This is not surprising. The ultimate product was cement. The Macquarie Dictionary relevantly defines cement as a material 'commonly made by burning a mixture of clay and limestone'. That is the common understanding. It is reflected in the discussions and reasoning in cases such as North Australian Cement (No 1) and North Australian Cement (No 2). It is specifically discussed by Heerey J in Goliath 2 at 187 in a manner which seems to me to be both correct and unanswerable. The common and usual understanding is that 'limestone' is the mineral used in cement production - this is entirely consistent with the evidence before the AAT as to what the respondent called the product it produced. The fact that it was the calcite comprised in limestone that was the 'real' mineral used in making cement is not an answer - that mineral when in this particular form is normally and usually described as 'limestone' and falls within par (b) of the definition of 'mineral' in the Act.
162 That factual inquiry may be more difficult where, as here, the respondent makes use of four minerals that are contained within the particular 'limestone' and not just calcite. As a matter of fact it may be that all of the four minerals identified in the AAT reasons, in the form in which they were stockpiled, would also ordinarily or usually be described as 'limestone'. 'Limestone' is not solely comprised of calcium carbonate. It might well comprise other substances, including other minerals. Obviously it did in this case. The respondent described the product produced and stockpiled by it as 'limestone' even though it comprised not just calcite, but also the other three minerals. On the view which I have taken of the meaning of the relevant provisions of the Act, the question for the AAT remains the same: was the product extracted by the respondent 'limestone' as usually and ordinarily understood or was it limestone plus some other minerals. In my view the answer to that question is not necessarily answered merely by identifying minerals other than calcite which are used by the respondent in making cement. The product containing those other minerals could still be described as 'limestone'.
163 On the other hand, it is at least possible that the respondent's subjective purpose in using the three minerals other than calcite may have the factual result that the product in the stockpile was not only limestone as normally and usually understood, but instead or in addition one or other of the other minerals that were important to cement production. Factors such as the relative value of the mineral, its ready availability, its relative importance, whether it is usually found in limestone and so on, may well prove important in the factual inquiry of whether the product in the stockpile is only 'cement grade limestone' or that plus some other mineral.
164 Given the error in interpretation referred to above, in my view this factual issue was not explored before or by the AAT. As the AAT has still to make the relevant factual determinations based upon the understanding of the Act as discussed above, it is necessary for the case to be remitted to the AAT for further consideration of whether the material in the stockpile would be described in ordinary and usual language as 'limestone' or as 'limestone' plus one or more other minerals.
165 In my view the appeal should be allowed. I would order that the decisions of the primary Judge given on 5 August 2003 and of the AAT given on 14 August, 2002 should be set aside and that the matter be remitted to the AAT for further consideration. I would also order that the respondent pay the appellant's costs of the proceedings in this Court.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Selway.