Dalian Steelforce Hi-Tech Co Ltd v Minister for Home Affairs

JUDGE: NICHOLAS J DATE: 27 November 2015 PLACE: SYDNEY

FURTHER Background 1 These reasons should be read in conjunction with my previous reasons for judgment published on 21 August 2015 (Dalian Steelforce Hi-Tech Co Ltd v Minister for Home Affairs [2015] FCA 885). After publication of those reasons the parties were given the opportunity to file written submissions in relation to the appropriate form of final orders. There is a significant disagreement as to what orders should now be made. 2 In my previous reasons for judgment I concluded that the applicants were entitled to succeed on Issue 6 because the respondents had misconstrued s 269TAAC of the Customs Act 1901 (Cth) ("the Act") in finding that Program 20 was "specific" so as to amount to a countervailable subsidy. I also concluded that the applicants failed on Issues 1, 2, 3, 4 (each of which related to dumping), 5, 7 and 8 (each of which related to subsidisation). I found (at [117]) that the applicants were entitled to the relief they seek with respect to the countervailing duty notice published on 3 July 2012. The position is somewhat more complicated than the latter observation implies. 3 The question whether Program 20 was "specific" was considered by the second respondent ("the CEO") in Report 177. Report 177 included a recommendation by the CEO to the first respondent ("the Minister") that a notice be published pursuant to s 269TJ of the Act. 4 The CEO's finding that Program 20 was "specific" was not raised by the applicants in their application for review of the Minister's decision in accordance with Div 9 of Pt XVB of the Act. Hence, neither the Trade Measures Review Officer's review nor the subsequent reinvestigation by the CEO revisited the issue, and nothing is said of it in Report 203. 5 The disagreement that has arisen stems from the fact that the amount of dumping duty imposed was based upon a calculation that took account of the effects of Program 20. As explained in the respondents' submissions: a. Because Program 20 was also found to be relevant to the calculation of dumping margins, Customs recognised in Report 177 that the dumping margins and levels of subsidy that it had calculated involved a degree of overlap or double counting. b. In its recommendations on the imposition of measures, Customs noted that it had reduced the proposed rate of dumping duty by an amount reflecting the effect of Program 20 in order to eliminate double counting. c. Hence, while the final dumping margin calculated for Dalian Steelforce was 13.4%, the interim dumping duty imposed by the notice under s 269TG dated 12 June 2012 ("the s 269TG notice") was 2.3%. d. Report 203 concluded that the normal value which had been constructed for Dalian Steelforce's products, for the purpose of calculating the dumping margin, should be altered for reasons unrelated to the present issues. e. The recalculation of the dumping margin for Dalian Steelforce was contained in Confidential Appendix 1 to Report 203 [which is not in evidence]. The recalculated dumping margin was 10.6%. f. However, the interim dumping duty imposed as a result of the s 269ZZM notice, which relevantly varied the dumping duty notice in so far as it related to Dalian Steelforce, was zero [the relevant annexures to the notice are not in evidence] This adjustment, like the earlier one, was made in order to overcome the double counting which would otherwise have resulted from Program 20 having relevance to the calculation of both the dumping margin and the level of subsidy. (citations omitted) 6 Had it been necessary to do so, I would have given the respondents leave to reopen to tender that part of Report 203 referred to in para (e) above which is not already in evidence and the annexures to the notice referred to in (f) above. However, in their submissions in reply the applicants expressly acknowledged that the facts set out in paras (e) and (f) were not in dispute. I am satisfied that the respondents' analysis as outlined in paras (a)-(f) above is correct.

Section 269ZZM 7 At all material times s 269ZZM relevantly provided: 269ZZM What happens after a reinvestigation? (1) After receiving a report by the CEO in respect of a reinvestigation under subsection 269ZZL(3), the Minister must: (a) affirm the reviewable decision concerned; or (b) revoke that decision and substitute a new decision. (2) The Minister's decision under subsection (1) takes effect from the time specified by the Minister. (3) Without limiting subsection (1), the Minister may, under that subsection: (a) publish a dumping duty notice or countervailing duty notice; or (b) vary a dumping duty notice or countervailing duty notice; or (c) revoke a dumping duty notice or countervailing duty notice and substitute another dumping duty notice or countervailing duty notice (as the case requires). (4) The Minister must give public notice of his or her decision. 8 Section 269ZZM was amended by the Customs Amendment (Anti-dumping Improvements) Act (No 1) 2012 (Cth). The relevant amendments took effect on 10 June 2013 viz. after the Minister's decision under s 269ZZM(1) was made and published. Amendments were also made to ss 269TAAC(3) and (4) by the Customs Amendment (Anti-dumping Improvements) Act (No 3) 2012 (Cth). These amendments took effect from 11 June 2013. Section 269TAAC of the Act in the form it took prior to such amendments appears at [75] of my previous judgment.

Section 16(1) of the Administrative Decisions (Judicial Review) Act 1977 9 Section 16(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act") provides: 16(1) On an application for an order of review in respect of a decision, the Federal Court or the Federal Circuit Court may, in its discretion, make all or any of the following orders: (a) an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the court specifies; (b) an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions as the court thinks fit; (c) an order declaring the rights of the parties in respect of any matter to which the decision relates; (d) an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the court considers necessary to do justice between the parties.

The parties' contentions 10 The orders sought by the applicants in their Further Amended Originating Application for Judicial Review ("the Amended Application") sought a declaration that the relevant decisions were invalid and of no effect together with orders that such decisions be quashed or set aside. The relevant decisions included the decision made in relation to notices based upon s 269TG of the Act (ie. dumping duties) and s 269TJ of the Act (countervailing duties). They also included the Minister's decision under s 269ZZM(1) which was made on 26 April 2013 and published on 13 May 2013. At all relevant times up until the delivery of my earlier reasons for judgment it has been the applicants' position that all such decisions were invalid and open to be set aside. 11 The public notice dated 26 April 2013 and published on 13 May 2013 pursuant to s 269ZZM(4) of the Act states that the Minister has decided to: (a) affirm [his] decision to publish dumping duty notices on 3 July 2012 in regards to HSS exported to Australia from China, Korea, Malaysia and Taiwan with the exception of Dalian Steelforce Hi-Tech Co., Ltd and countervailing duty notices in regards to HSS exported to Australia from China; and (b) vary the dumping duty notice published on 3 July 2012, in regards to Dalian Steelforce Hi-tech Co., Ltd only, with effect from the date of publication of this notice, so that the dumping duty notice is to be taken to have had effect as a different normal value had been fixed relevant to the determination of duties as set out in the confidential table to this notice. 12 The orders now sought by the applicants are relevantly as follows: 1. In so far as it applies to the first applicant and purports to affirm the decision to publish a countervailing duty notice in regards to certain hollow structural sections exported to Australia from China, the decision of the first respondent made pursuant to s 269ZZM(1) of the Customs Act 1901 (Cth) on 26 April 2013 and published on 13 May 2013 be set aside with effect from the date the decision was made. 2. In so far as it applies to the first applicant, the decision of the first respondent, made on 12 June 2012 and published on 3 July 2012, to publish a notice under s 269TJ(2) of the Customs Act 1901 (Cth) in relation to certain hollow structural sections exported to Australia from China, be set aside with effect from the date the decision was made. 13 The orders sought by the respondents are relevantly as follows: 1. Insofar as it applies to the First Applicant, the decision of the First Respondent made on 26 April 2013 pursuant to s 269ZZM(1) and (3) of the Customs Act 1901 (Cth) be set aside. 2. The matter be remitted to the First Respondent for consideration under s 269ZZM of the Customs Act 1901 (Cth) in accordance with the Court's reasons. 14 The key differences between the parties as reflected in their proposed orders may be summarised as follows: the applicants seek orders setting aside the Minister's decision of 26 April 2013 made under s 269ZZM(1) of the Act only in so far as it relates to the countervailing duty notice, whereas the orders the respondents seek would have the effect of setting aside the Minister's decision in respect of both the dumping duty notice and the countervailing duty notice; the respondents seek a further order remitting "the matter" to the Minister for consideration under s 269ZZM in accordance with the Court's reasons; and the applicants seek an order setting aside the Minister's original decision of 12 June 2012 made under s 269TJ(2) of the Act to publish a countervailing duty notice, whereas the respondents do not seek orders setting aside any of the Minister's original decisions. 15 The applicants submitted that the Court lacked the power required to set aside the dumping duty decisions. In particular, it was submitted: [T]here is no power to set aside the decision to affirm the publication of the dumping duty notice in circumstances where the Court has identified no error making that notice invalid (despite challenge being made to it by the applicants). Whether reliance is placed on s.16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 […] or the jurisdiction conferred by s.39B(1) of the Judiciary Act 1903, the Court can only quash or set aside an administrative decision that the Court has found to be invalid. The applicants placed emphasis upon the fact that the decision to publish a dumping duty notice and the decision to publish a countervailing duty notice are, in law, separate decisions. They also submitted that the decision of the Minister under s 269ZZM, properly analysed, consists of two decisions rather than one, the first to affirm the decision to publish the countervailing duty notice, and the second to vary the dumping duty notice, and that there was no power to set aside the decision of the Minister under s 269ZZM in so far as it related to the decision to publish the dumping duty notice on 3 July 2012.

Consideration 16 It is not necessary to decide whether the Court's powers permit the Court to set aside the decision to publish the dumping duty notice on 3 July 2012. In the present case the decision which the respondents say should be set aside is the first respondent's decision of 26 April 2013 pursuant to s 269ZZM(1) which, in my view, is properly regarded as a single decision. This characterisation is consistent with the terms of the notice published on 13 May 2013 and the way in which the decision was characterised by the applicants in their Amended Application. 17 The decision of 26 April 2013 is open to be set aside because it involved an error of law. The error of law directly affected the decision in two relevant respects. First, in so far as the decision affirmed the decision to publish the countervailing duty notice on 3 July 2012, it was affected by error in the manner identified in my earlier judgment. Secondly, in so far as the decision varied the dumping duty notice published on 3 July 2012, it was affected by the same error of law in that it wrongly assumed (as did the original dumping duty notice of 3 July 2012) that the countervailing duty had been calculated in accordance with the requirements of the Act and that a particular rate of countervailing duty would apply. 18 The orders that I propose to make will set aside the decision of 26 April 2013 in so far as it applies to the first applicant and require the Minister to reconsider the decision of 26 April 2013 in accordance with the Court's reasons. 19 In my view, it is neither necessary nor desirable to set aside the decisions made on 3 July 2012. The orders I propose to make will ensure that the matter is re-determined by the Minister in accordance with my reasons. 20 The applicants drew attention in their submissions to the amendment made to s 269TAAC(4) with effect from 11 June 2013, which removed the opening words "[d]espite the fact that access to a subsidy is established by objective criteria". The omitted words were critical to the resolution of the construction issue upon which the applicants succeeded. There were also, as I have mentioned, amendments made with effect from 11 June 2013 to s 269TAAC(3). I think it appropriate in the circumstances to make an additional direction requiring the Minister to undertake his further consideration of the matter under s 269ZZM in accordance with the provisions of the Act as they stood at 26 April 2013. This will ensure that the first applicant is not disadvantaged by the change to ss 269TAAC(3) and (4) that took effect after the decision of 26 April 2013 was made. 21 The other orders I propose to make (including in relation to costs) were agreed between the parties. 22 There will be orders accordingly. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.