The "like goods" argument (grounds 1 and 2)
110 Grounds 1 and 2 were expressed in the following way:
1. The Declarations, January 2013 Minister's Decision and May 2013 Minister's Decision involved an error of law or was not authorized by the Customs Act (Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") ss 5(1)(d) and (f)) and constituted jurisdictional error or a failure to exercise jurisdiction.
(a) The Declarations were not authorised by s 269TG and s 269TJ of the Customs Act because the goods included with the scope of the Declarations were not "like goods", namely aluminium road wheels produced for the Original Equipment Manufacture ("OEM") market and aluminium road wheels produced for the After Market ("AM").
(b) Further or alternatively, in making the said decisions, the Minister adopted and applied an erroneous construction of the term "like goods" in s 269T of the Customs Act by construing "characteristics" as being limited to physical characteristics and as not including market considerations such as cost structures, price, route to market, market segmentation, and other market
considerations.
(c) Further or alternatively, in making the said decisions, the Minister erred in treating OEM aluminium road wheels and AM aluminium road wheels as "like goods" but subjecting them to separate injury, causation and price analysis, including the calculation of non-injurious price.
(d) Further or alternatively, the fact as to whether OEM aluminium road wheels and AM aluminium road wheels are "like goods" within the meaning of s 269T of the Customs Act was a jurisdictional fact on which the power to make the said decisions depended, and in fact, OEM aluminium road wheels and AM aluminium road wheels are not "like goods".
2. The CEO Decision and the TMRO Decision involved an error of law or was not authorized by the Customs Act (ADJR Act ss 5(1)(d) and (f)) and constituted jurisdictional error or a failure to exercise jurisdiction.
(a) The Applicant refers to and adopts paragraphs 1 (a) to (d) as if the references to the Minister were a reference to the CEO and TMRO respectively
111 Holden contends it was erroneous to characterise OEM and AM ARWs as "like goods" for the purposes of investigations into dumping duty or countervailing duty and erroneous to impose a single set of dumping measures for the entire ARW industry. It contends the error can be described in one of two alternative ways. First, the existence of goods as like goods is a jurisdictional fact for the investigation of anti-dumping measures, and the steps consequent upon an investigation. Alternatively, there was a misconstruction or misapplication of the definition of "like goods" such that the various decision-makers asked the wrong question by disregarding the differences in the markets for each of OEM and AM wheels and concluding the differences were no more than different channels of distribution.
112 In Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 at [37]-[41], Spigelman CJ described the character and function of a jurisdictional fact:
The issue of jurisdictional fact turns, and turns only, on the proper construction of the statute: see, eg, Ex parte Redgrave; Re Bennett (1946) 46 SR (NSW) 122 at 125). The parliament can make any fact a jurisdictional fact, in the relevant sense: that it must exist in fact (objectivity) and that the legislature intends that the absence or presence of the fact will invalidate action under the statute (essentiality): Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 A:JR 841 at 859-861; 153 ALR 490 at 515-517.
"Objectivity" and "essentiality" are two inter-related elements in the determination of whether a factual reference in a statutory formulation is a jurisdictional fact in the relevant sense. They are inter-related because indicators of "essentiality" will often suggest "objectivity".
Any statutory formulation which contains a factual reference must be construed so as to determine the meaning of the words chosen by parliament, having regard to the context of that statutory formulation and the purpose or object underlying the legislation. There is nothing special about the task of statutory construction with regard to the determination of the issue whether the factual reference is a jurisdictional fact. All the normal rules of statutory construction apply. The academic literature which describes "jurisdictional fact" as some kind of "doctrine" is, in my opinion, misconceived. The appellation "jurisdictional fact" is a convenient way of expressing a conclusion - the result of a process of statutory construction.
Where the process of construction leads to the conclusion that parliament intended that the factual reference can only be satisfied by the actual existence (or non-existence) of the fact or facts, then the rule of law requires a court with a judicial review jurisdiction to give effect to that intention by inquiry into the existence of the fact or facts.
Where the process of construction leads to the conclusion that parliament intended that the primary decision-maker could authoritatively determine the existence or non-existence of the fact then, either as a rule of the law of statutory interpretation as to the intent of parliament, or as the application of a rule of the common law to the exercise of a statutory power - it is not necessary to determine which, for present purposes - a court with a judicial review jurisdiction will inquire into the reasonableness of the decision by the primary decision-maker (in the Wednesbury sense Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223), but not itself determine the actual existence or non-existence of the relevant facts.
113 This ground contends the exercises of power in ss 269TG and 269TJ miscarried by reason of the jurisdictional facts in those provisions not being made out. This ground is not expressed to be an attack on the validity of the application because of the existence of a jurisdictional fact in s 269TB(1)(b). There is no basis for treating the existence of "like goods" as a jurisdictional fact in these two provisions.
114 First, at a textual level, both ss 269TG and 269TJ use the language of "satisfaction". This, as Spigelman CJ observed in Timbarra 46 NSWLR 55; [1999] NSWCA 8 at [42], often, but not necessarily, tends against a conclusion of jurisdictional fact. That is because the use of such language indicates Parliament's intention that the repository of the power himself or herself is to determine whether the contested facts exist or do not exist. Like terms such as "opinion" or "belief", satisfaction refers to a state of mind and, in doing so, contemplates that reasonable minds may differ.
115 Each of the provisions identifies several factual matters which need to be determined. For example, under s 269TG, aside from the identification of "like goods", the Minister must form a state of satisfaction about whether the "export price" is less than the amount of the "normal value" of the goods, whether there has been "material injury" and, if so, whether it is to an "Australian industry", and whether the material injury is caused by the difference between the export price and the normal value. There is no basis in the text or structure of the provision to single "like goods" out as a fact the Parliament intended objectively to exist, while at the same time identifying the remaining factual issues as matters for the Minister authoritatively to determine. Nor is there any basis on which it might be said that Parliament intended that all of the factual matters involved in a decision under s 269TG were objectively to exist before the power to issue a notice arose.
116 Further, in Timbarra at [44] Spigelman CJ said:
The authorities suggest that an important, and usually determinative, indication of parliamentary intention, is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the primary decision maker or, in some other way, necessarily arises in the course of the consideration by that decision maker of the exercise of such a power. Such a factual reference is unlikely to be a jurisdictional fact. The conclusion is likely to be different if the factual reference is preliminary or ancillary to the exercise of a statutory power. The present case is, so far as I have been able to discover, unique in that the one statutory regime contains the same factual reference in both kinds of provisions.
…
117 The text and structure of ss 269TG and 269TJ demonstrate the latter of the two circumstances posited by Spigelman CJ. Neither provision expresses the factual question of "like goods" as a preliminary matter to the exercise of power. Rather, as I have observed above, the assessment whether there is an "Australian industry producing like goods" (ss 269TG(1)(b)(i) and 269TJ(1)(b)(i)) is but one of many factual determinations for the Minister which arises in the course of his consideration whether to exercise the power to issue notices or not. Contrary to the applicant's submissions, determination of whether there is an "Australian industry producing like goods" is not a threshold issue. Since the statutory task set out in s 269TEA for the CEO in making recommendations to the Minister is to recommend whether the Minister can be satisfied of the matters the Minister needs to consider before issuing notices (see s 269TEA(1)(d)), the identification of "like goods" is no more a threshold to the CEO's task than it is to the Minister's, and certainly not to the TMRO's. The provisions in issue here can be compared, in terms of text and structure, with those considered by Weinberg J in Cabal v Attorney-General (Cth) (2001) 113 FCR 154; [2001] FCA 583.
118 The context in which the phrase appears also tends against the applicant's contention. It should be noted that the statutory phrase is not, in fact, "like goods" at all. It is "an Australian industry producing like goods" or, in s 269TG(2), also "like goods which have already been exported to Australia", although the applicant did not develop how its construction argument applied in the latter circumstance. The words which come before the phrase "like goods" inform the meaning to be given to them, a matter to which I return below. When the whole phrase is considered in its context it is apparent that the Minister is called on to make several factual judgments, of an evaluative nature, of which the contested phrase is but one. There is no basis to select out the phrase "like goods" and ascribe to Parliament an intention that what constitutes like goods must be objectively determined, while all the other factual issues in each of the provisions are to rest on the opinion of the Minister.
119 To the extent the applicant's submissions then move to treat the phrase "like goods" as a jurisdictional fact and to make submissions as to the findings the Court should make about whether OEM and AM ARWs are "like goods", those submissions need not be further considered.
120 Nevertheless, the text and context of ss 269TG and 269TJ indicate that the Minister's satisfaction about whether there is material injury to an Australian industry producing like goods is a core aspect of the statutory task in each provision. If the Minister's decision revealed a misunderstanding of that task, including by reason of a misconstruction of the statutory terms, his decision to issue notices would be without jurisdiction: Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 at [75] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.
121 Holden's challenge did not centre on anything the Minister said about the phrase "like goods" in the reasons for his decisions, which were provided pursuant to Holden's request under the AD(JR) Act. Those reasons were brief, and in substance involved cross-references back to the source documents such as Reports 181 and 204 and the TMRO report. The term "like goods" is, as I have observed, a defined term in s 269T. The applicant's contention on ground 1 does not concern any asserted constructional choice about the term "like goods" in s 269T, but rather the application of the defined term to OEM and AM ARWs. The applicant's written submissions summarised how this argument was put against each of the CEO, the Minister and the TMRO:
Once Customs had concluded that OEM ARWs and AM ARWs were physically similar, it effectively disregarded all other differences in the separate markets - for example, by treating those differences as amounting to no more than different channels of distribution, or as merely a difference in the name given to otherwise identical goods according to the stage at which the ARW is fitted to the vehicle. The TMRO adopted too narrow a focus on physical design and time of fitting. Each of Customs and the TMRO ignored or discounted the market considerations that were identified in Holden's submissions and the many "characteristics" of OEM ARWs which did not "closely resemble" those of AM ARWs.
122 Holden submitted that the evidence showed OEM ARWs were designed and developed pursuant to a production contract several years in advance and "physically attached as an integrated part of a complete vehicle" which is then sold to retail customers. In contrast, it submitted, AM ARWs were sold to retail customers as "standalone" products, and were packaged, advertised and marketed as separate products. On this basis, the applicant submitted, OEM ARWs are not "identical in all respects" to AM ARWs, nor do they have "characteristics closely resembling" each other.
123 The use of the adjective "like" in the phrase "like goods" invites a comparison between the goods which are the subject of the application, as they are defined in the application, and other goods produced by Australian industry. The goods defined in the application are, within s 269T, identified as the "goods under consideration". The question is, what does the statutory definition, read in context, suggest the comparison is to consist of?
124 The definition in s 269T allows for two alternative assessments. The first is goods which are "identical in all respects". The second is goods which "although not alike in all respects" have "characteristics closely resembling" the goods which are the subject of the application. It is clear that the statute uses "identical" and "alike" in the same way in this definition. Both nouns focus on a visual or physical comparison. This is reinforced by the use of the word "characteristics" in the alternative assessment, which implies a comparison of the physical characteristics of the goods themselves, including but not limited to their appearance. Characteristics would include, for example, the composition of the goods, the materials used to manufacture them, their outward appearance and the uses for which they were suitable in a commercial and practical sense. This approach is consistent with provisions in Part XVB such as s 269TC(4)(a) where, as one of the mandatory requirements of the notice the CEO must give upon receipt of an application the CEO proposes to investigate, the "particulars of the goods the subject of the application" must be set out. The use of the term "particulars" implies in my opinion physical features of the goods which can be the subject of a list in a notice such as this.
125 The definition in s 269T closely follows the terms of Art 2.6 of the Anti-Dumping Agreement, which provides:
Throughout this Agreement the term "like product" ("produit similaire") shall be interpreted to mean a product which is identical, i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.
126 The use of the term "product" in the Anti-Dumping Agreement, together with the other phrases in Art 2,6, emphasises that the comparison required is a visual or physical one. Adopting the approach to which I have referred at [12] above, a construction of s 269T which focuses on the matters to which I have referred in [124] above is consistent with the terms of the Anti-Dumping Agreement. The WTO decisions to which the Court was referred, and in particular the WTO Panel report, European Communities - Anti-Dumping Measure on Farmed Salmon from Norway, WTO Doc WT/DS337/R, adopted 15 January 2008, at [7.16]-[7.75], appear to adopt a similar approach.
127 The respondents submitted that the application of the definition of "like goods" to OEM and AM ARWs for which the applicant contended posited a question about how "alike" OEM and AM ARWs were as between themselves. That, the respondents submitted, was not the question posed by the statute. I agree with that submission.
128 It will be recalled that the description of the ARWs given in the application was as follows:
The goods the subject of the application (the goods) are aluminium road wheels for passenger motor vehicles, including wheels used for caravans and trailers, in diameters ranging from 13 inches to 22 inches.
For clarification, the goods include finished or semi-finished ARWs whether unpainted, painted, chrome plated, forged or with tyres and exclude aluminium wheels for go-carts and All-Terrain Vehicles.
129 The applicant's argument does focus on points of difference as between OEM and AM ARWs, rather than looking at the ARWs which were described in Arrowcrest's application, and asking whether the ARWs produced by Arrowcrest were "like goods" to the ARWs as described in the application.
130 The applicant placed some emphasis on the terms of s 269TG(2), and the use of the phrase "goods of any kind", as the alternative situation to that in subs (1), which dealt with the export to Australia of a specific consignment of goods. The applicant submitted this phrase intended to refer to a "genus" and, if that is the case, then OEM and AM ARWs were not one "genus" of ARW, but two. Again, the flaw in this argument is to engage in a comparison between OEM and AM ARWs, which is not the comparison the statute requires. In subs (2), the phrase "goods of any kind" must, as the respondents submitted, be seen still to refer to the goods identified in the application under s 269TEA. The use of the term "like goods" in a phrase together with "to an Australian industry producing…" implies, as the respondents submitted, a need to identify a single industry which produces the goods said to be like goods. That may confine the class or genus to which the description "goods of any kind" might be applied. That is, however, the extent of the confinement. It occurs first by reference to the description of goods in the application, or identified by the Minister in exercise of his own motion power, and second by reference (if s 269TG(2) is engaged) to the need to identify a single Australian industry producing what are said to be the like goods. Beyond those two matters, there is no textual or contextual basis for any necessary further division of goods by reference to the markets to which they may be directed.
131 Seen in this way, the applicant's arguments are not about construction at all. They are about the application of the phrase "like goods produced by an Australian industry" to a particular factual situation. In Swan Portland Cement 28 FCR 135, in the context of a claim by the applicant in that case that, as the sole manufacturers and suppliers of cement clinker in Western Australia, it constituted an "Australian industry" within the meaning of s 269TG(1)(b)(i), Lockhart J stated (at 144-145):
In my opinion, the expression "Australian industry" in the context of the anti-dumping legislation refers to an industry viewed throughout Australia as a whole and does not refer to a part of that industry, whether the part be determined by geographic, market or other criteria. The difficulty seems to me to lie, not in defining the expression, but in determining on the facts of a given case whether a particular industry answers the statutory description of an Australian industry. The latter is not a question of construction; it is a question of identification by the relevant fact-finding body, in this case, the Authority.
The determination whether material injury to an Australian industry producing like goods has been, or is being caused, or is threatened, is not an exercise of counting heads of markets, production or distribution centres or things of this kind. It is essentially a practical exercise designed to achieve the objective of determining whether, when viewed as a whole, the relevant Australian industry is suffering material injury from the dumping of goods.
The present case raises the difficulties nicely. There is no dispute about the relevant market being the market in Western Australian for clinker. To say that the clinker industry must be regarded throughout Australia as a whole does not mean that the threat caused by dumping only in Western Australia and which may injure only the players in the market in Western Australia, cannot constitute material injury to the Australian clinker industry as a whole. Plainly it may where, for example, the continuance of the dumping may annihilate the West Australian industry. I find no difficulty with the proposition that an injury of this kind may constitute material injury to the Australian market as a whole. It depends on the facts of the case and inevitably it is a question of degree that involves balancing all relevant considerations and integers before concluding whether or not the dumping constitutes material injury to the Australian industry. For these reasons I reject the applicants' argument that it was necessary to interpret "an Australian industry" as they contended to achieve the purpose of the legislation of ensuring that industries in Australia are not damaged by competition from foreign exports at dumped prices.
I have considered the "pricing argument" put forward by the applicants and reject it for three reasons. First, the term "industry" on its plain meaning does not have any geographical connotations and it certainly does not equate with the term "market". The term "industry" is defined in The Shorter Oxford English Dictionary as (relevantly) "a particular branch of productive labour, a trade or manufacture". K Yorston and I Winlaw, The Australian Commercial Dictionary, (5th ed, 1972), defines "industry" as consisting of "a group of firms producing closely related and therefore competitive products". A Dictionary of Economics (4th ed), defines "industry" as being "a productive enterprise, especially manufacturing or certain service enterprises such as transportation and communications, which employs relatively large amounts of capital and labour. It is also used to identify a special segment of productive enterprise such, for example, as the steel industry". The Dictionary of Business and Economics, defines it as a "specific branch of mining, manufacturing, or processing, in which a number of firms produce the same kind of commodity or service, or are engaged in the same kind of operation".
While the above definitions are by no means identical, in no definition is there a reference to geographical or market considerations. An industry, using its plain meaning, is defined only by the product involved. The description "Australian", when added to "industry" provides the only geographical reference in s 269TG of the Customs Act.
132 Although the applicant submitted Lockhart J's decision should be distinguished or not followed, no argument was developed as to why that was so. In my respectful opinion, his Honour was correct in his approach to the term "industry", defining it by reference to a product rather than a market. This reinforces the construction I have given to "like goods produced by an Australian industry" as a phrase which focuses on the physical characteristics of the goods in question rather than their markets.
133 Further, as his Honour observed, there will be questions of fact and degree involved in the application of these statutory phrases to a given circumstance. Those are assessments the Parliament has left to the formation of the Minister's satisfaction.
134 In my opinion, what occurred here was that Holden erected identified factual differences between OEM and AM markets and distributions and then sought to import those differences into the scheme of ss 269TG and 269TJ, when the scheme did not require the decision-maker to evaluate those differences for the purposes of forming a view whether there was an "Australian industry producing like goods". The statutory question was a practical one to be answered by a comparison predominantly of the physical characteristics of and uses for the products produced by the Australian industry, with those which were the subject of the application under the Customs Act by Arrowcrest.
135 As Lockhart J goes on to observe in Swan Portland Cement 28 FCR 135 at 145 that, when the Minister is determining the question of "material injury" within the meaning of s 269TEA, and may examine price, that is not to say considerations of the "'market" are irrelevant, to the contrary. Once price has to be considered, it will be set by the market, and as markets within an industry may differ, so may prices, and in that way the Minister may have to consider different price impacts in order to determine whether an injury, across an industry, is material. None of this involves, as Holden's argument seeks to do, dividing goods with similar physical characteristics and uses into categories on the basis of the markets in which those goods are sold.
136 Neither the Minister, nor the CEO nor the TMRO, adopted an erroneous construction of the term "like goods", nor of the phrase "like goods produced by an Australian industry".
137 In his Report 181, the CEO stated:
It should be noted that 'the goods' described in the initiation notice for an investigation cannot be changed once the investigation has commenced. The description of the goods covered by this investigation covers both OEM and AM wheels. The evidence shows that Arrowcrest manufactures ARWs for both the OEM and AM markets and an issue considered is whether those goods manufactured by Arrowcrest are 'like' to the exported goods which are both OEM and AM wheels.
138 The CEO then addressed physical likeness, commercial likeness, functional likeness and production likeness between the goods listed in Arrowcrest's application and the goods produced by the Australian industry and concluded:
i. Physical likeness:
- Products made by the Australian industry have a physical likeness to the goods exported to Australia from China;
- Arrowcrest manufactures ARWs in sizes 13" to 20". Arrowcrest has supplied sufficient evidence that 20" wheels can be substituted with 22" wheels;
- The like goods are manufactured by Arrowcrest to meet Australian Standards.
ii. Commercial likeness:
- Australian industry products compete directly with imported goods in the Australian market, both OEM and AM, as evidence by the supply of the Chinese ARWs to many customers of the Australian industry.
iii. Functional likeness:
- Both imported and Australian produced goods have comparable or identical end-uses as evidence by Australian industry customers that source equivalent Chinese made ARWs.
- Both imported and Australian produced goods may be fitted on passenger motor vehicles and used for the same purpose.
iv. Production likeness:
- Based on evidence obtained from visits to Arrowcrest and Chinese exporters, the Australian industry products are manufactured in a similar manner to the imported goods.
The findings above lead to the conclusion that the Australian produced products, some of which are not identical, have characteristics closely resembling the imported goods. These findings are not premised on a comparison of individual imported and domestically produced models, but rather represent a global consideration.
Customs and Border Protection has therefore found that the ARWs produced by the Australian industry are like goods to the goods exported from China.
139 For the reasons I have set out, there is nothing in the construction of the phrase "like goods produced by the Australian industry" which precluded the approach taken by the CEO in Report 181, nor which precluded the Minister accepting and acting on those recommendations in issuing the notices. In its argument, Holden did not challenge the four categories of "likeness" identified in Report 181, but rather sought to identify factual differences between the markets for OEM and AM wheels. This, I have found, sought to move away from the statutory task.
140 The TMRO was, as the respondents submitted, more influenced by the physical characteristics of the wheels than the uses to which they were put. In the TMRO report he said, relevantly, after extracting the definition of like goods from s 269T:
This definition does not use terminology such as "substitutable", but rather focuses on characteristics. Goods may have characteristics closely resembling those of the goods under consideration even if some further alteration is required in order to put the goods to the same end use and even if they are incapable of being altered to perform an identical use. Whether or not that alteration or a difference in characteristics precludes a good from being a like good will necessarily be a question of fact and degree.
The goods that are subject to the investigation are those describes by Customs as:
…aluminium road wheels for passenger motor vehicles, including wheels used in caravans and trailers, in diameters ranging from 13 inches to 22 inches. For clarification the goods include finished or semi-finished ARWs whether unpainted, painted, chrome plated, forged or with tyres and exclude aluminium wheels for go-carts and All-Terrain vehicles.
The review applicants object to the treatment of wheels that are sold in both the AM and OEM market segments as like goods. In my view, the only essential difference between the segments is the time of fitting the wheel, which is not a difference related to the product itself, but rather to the application of the product.
ARWs may be technically different one from the other because the car manufacturer requires or chooses to specify particular requirements in relation to quality, design or fit. But in my view such differences are insufficient for the goods to be considered not like goods. I consider this to be the case even if the manufacturer's requirements arise from a particular regulatory standard that it has to meet as a consequence of applying the ARW to a new vehicle.
It is not necessary that goods be identical to be "like", but simply that they have characteristics closely resembling those of the goods under consideration. Accordingly, the fact that a wheel will fit only a particular brand or model of car does not render it unlike in this sense. Nor does the fact that a car manufacturer may choose or be required to fit to a new vehicle a wheel of a higher quality than those sold for fitting to used cars. And while a manufacturer may choose not to fit to its new cars wheels of a more "radical" design favoured by some individual owners of used cars, that choice is driven by its perception of what will sell in the mass market. Notably, it is not that long ago that most manufacturers offered as original equipment only steel wheels with decorative hubcaps, and not the spoked alloy wheels then sold in the after-market segment which they commonly fit as standard equipment today.
In my view, there is but one market for ARWs falling within the definition of goods under consideration, albeit with two segments that are relatively easily discernible at any point in time (although particular designs may move from the AM segment to the OEM segment over time as new car manufacturers perceive consumer demand to change).
141 The applicant submitted this approach was "too narrow", which was not quite the same submission as the construction argument. It was a matter for the TMRO how he assessed each of the different kinds of characteristics of the ARWs he was required by the statute to compare in reviewing the Minister's decisions based on the CEO report. He could, as he did, place more weight on the physical characteristics. This is not a narrow approach but rather it is one which emphasises, in a way which was open to him, the features of the ARWs he considered "closely resembled" those in the application.
142 None of the decisions which grounds 1 and 2 seek to impugn adopted an incorrect construction of the term "like goods" in s 269T such as to result in jurisdictional error, or error of law.