Mitco DB Pty Ltd v Chief Executive Officer of Customs

REASONS FOR JUDGMENT 1 This is an application by motion on notice for an order under s 11(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) extending the time for the lodgment of an application to review a decision of the respondent notified by letter dated 10 April 1996. The motion was filed nearly three years after the notification of the decision. 2 The dispute arises out of the provisions of the Customs Act 1901 (Cth) and the Customs Tariff Act 1987 (Cth) dealing with concessional rates of duty. The applicant imported an automatic granite and marble slab grinding and polishing machine, which it entered for home consumption on 11 March 1994. An application for a Tariff Concession Order was lodged on 16 March 1994, and refused on 16 August for reasons given on 24 August 1994. Initially, following the refusal, the applicant commenced proceedings in the Administrative Appeals Tribunal for merits review of that decision, but by application dated 22 December 1994 it applied to the respondent in reliance upon Item 56 of Schedule 4 of the Customs Tariff Act for the concession made available by s 25 of that Act and s 273 of the Customs Act. Item 56 covers: "Capital equipment classified under a heading or subheading in Chapter 84, 85 86, 87 …, 89 or 90 of Schedule 3 which, in the opinion of the Minister for Industry, Science and Technology, is technologically more advanced, more efficient or more productive than equipment currently available from Australian manufacture and which is ineligible for a Tariff Concession Order, as prescribed by by-law." 3 It is not in dispute that, as at March 1994, the established policies in relation to tariff concession orders and Item 56 determinations required a tariff concession order to be pursued first, and refused, before an Item 56 determination could be made; and had the effect that, if such a determination were made, it would be back-dated to 28 days before the lodgment of the application for a tariff concession order. Thus, in the present case, a successful application would have covered the goods imported by the applicant on 11 March 1994. 4 However, on 6 May 1994, Australian Customs Notice No 94/27 announced a change of policy. It included the statement that "no further retrospective claims will be considered", except for certain presently irrelevant types of applications. This change of policy proved to be the rock on which the application for an Item 56 determination foundered. 5 The Department did not immediately reject the application as inadmissible. The substantial questions raised were examined, and it appears to have been considered that the equipment did meet the criteria of Item 56. However, somewhat over a year after the application was lodged, the respondent informed the applicant by letter dated 29 February 1996 that he was "unable to make a Determination on the basis that [the] application is retrospective, as the machine for which Item 56 approval is sought was imported prior to the applications for a tariff concession order and an Item 56 Determination being lodged." The language in which this rejection of the application is couched raises a question I have previously considered, in a somewhat different factual context, in ACI Operations Pty Ltd v Chief Executive Officer of Customs (1998) 53 ALD 86. In that case, I felt justified in concluding (at 90) that very similar words to the statement "I am unable to make a determination" should be understood, not as suggesting some legal bar, but as expressing "a loose, almost colloquial, indication that the circumstances in which [the decision maker] was asked to exercise his discretion were not such as to enable him to conclude that he should exercise it in favour of the applicant". However, in the present case, it is arguable that the opposite view should be taken. There is material suggesting the respondent's letter was written on the basis of a minute submitted to one of his delegates stating that "a concession if granted in this instance, would be of no benefit to the Applicant, as the goods were imported three days prior to the lodgement of the TCO application". This, on the face of it, appears to suggest a legal bar. If so, I think the application raises a real question whether a mere policy guideline was wrongly treated as legally binding, or whether the policy was applied too rigidly, and without a proper consideration of the individual case: see Howells v Nagrad Nominees Pty Ltd (1982) 43 ALR 283 at 306-307; Chumbairux v Minister for Immigration and Ethnic Affairs (1986) 74 ALR 480 at 492-494. 6 The applicant sought reconsideration of the decision communicated by the letter of 29 February 1996, and that decision was reviewed, but affirmed by a letter dated 10 April 1996. It is this decision which the applicant now seeks to have judicially reviewed. The applicant says the policy against retrospective determinations, expressed in rigid terms, clashes with s 273 of the Customs Act, since the section envisages retrospective applications. Further, the applicant says that the present case would not involve, in any realistic sense, retrospectivity, as the Item 56 application was a continuation (after a delay necessitated by the respondent's own requirement that pursuit of a TCO must precede an Item 56 application) of the one application for a concession made contemporaneously with the importation of the goods. Yet further, the applicant says that if the policy did apply, and was valid, there was nevertheless a failure to give to its case the individual consideration which the law requires. Finally, the applicant relies on the principle of Wednesbury unreasonableness. 7 I am satisfied, as I have already indicated, that there is a real and bone fide case which the applicant wishes to pursue. That is not to say this case will ultimately succeed, but it may do so. The question then is whether the applicant has shown circumstances justifying the discretionary grant of an extension of time of the considerable length involved here. 8 Although the questions of principle raised by the matter are far from unimportant, the amount of money at stake is only $16,447.63. The applicant says that, in the light of the relative smallness of this sum, it was entirely reasonable of it to delay commencing proceedings while ever recourse to discussion and requests for internal review within the administration of Customs remained open. The material placed before me makes it clear that the applicant did not simply sit on its rights, or fold its hands and do nothing. On 15 April 1996, ie within less than a week, it made a request under the Freedom of Information Act 1982 (Cth) for documentation relating to the decision and, some documents being withheld by the respondent, it obtained them through a similar request to the Department of Industry, Science and Technology. On 12 June, the applicant complained of the withholding of documents and drew attention to the grant of concessions to others who had imported similar machines. On 25 July, the applicant wrote a follow-up letter, since it had received no reply. It raised the alternative possibility that a payment by act of grace might be made. At that stage, it received only a formal reply. On 7 August, the respondent wrote stating that it would need to take further time for "the preparation of a considered response on the matter". That considered response still being awaited, on 1 November 1996 the applicant wrote again, and finally on 26 November 1996, the respondent wrote advising (inter alia): "In my view, it would be improper for me or my delegate to ignore policy guidelines in force when I or he make a decision in favour of those in place at some earlier time, unless exceptional circumstances apply. In this case, I understand that, based on all the information before him, the delegate … could not discern any exceptional circumstances which would have allowed him to depart from the policy guidelines in force when he made his decision." 9 There was no delay in the applicant's response. On 9 December 1996, it wrote requesting a further review of the Item 56 determination in order to save the costs of litigation. Once again, the respondent took a number of months to reply, but in a letter of April 1997 notified that he had decided to adhere to the grounds of the original refusal. The comment may reasonably be made that requests for reconsideration which had taken so long to deal with must have been seen as raising substantial issues. 10 The applicant wrote yet again on 24 April 1997 seeking yet further reconsideration, and received a negative response on 19 May 1997. Further correspondence during 1997 and into 1998 led to a meeting between a representative of the applicant and a representative of the respondent on 6 May 1998. Subsequent correspondence shows that the parties were at cross-purposes as to the result of that meeting. The applicant understood it was favourable. However, the respondent's representatives took the view that no agreement had been reached at the meeting, and this view was reiterated in letters dated 4 September 1998, 11 November 1998 and 31 December 1998. Shortly after the last of these letters, the application with which I am now concerned was filed. 11 At the hearing, there was no suggestion that the respondent would suffer any prejudice by the grant of an extension of time, except in the sense that, it was said, he had understood, after the expiry of the time for the making of an application under the judicial review legislation, his decision would stand. This argument is somewhat inconsistent with the known facts. For nearly three years, the respondent's officers were involved with the applicant in discussions which cannot be presumed to have been a charade. On the basis, which I confidently accept to be true, that those discussions were sincerely pursued, the result was not seen as irrevocably fixed, so as to be removed from the possibility of change. 12 It has been repeatedly asserted that the Court has a wide discretion, not trammelled by any requirement to find special circumstances: Aerolineas Argentinas v Federal Airports Corporation (1995) 63 FCR 100 at 126; Pozniak v Minister for Health (1986) 9 ALN 256. From time to time, there have been assertions (as in Aerolineas Argentinas at 126) that "[a]n acceptable explanation of the delay must be given". But this is not in accord with the modern authorities: Comcare v A'Hearn (1993) 45 FCR 441 at 444; Dix v Crimes Compensation Tribunal [1993] 1 VR 297 at 302; Finnegan v Parkside Health Authority [1998] 1 WLR 411; Cohen v McWilliam (1995) 38 NSWLR 476 at 479. The true position is that an explanation of the delay is relevant, and the showing of it or the failure to show it, or the quality of any explanation shown, may be decisive in a particular case; but the Court always retains a discretion to give relief having regard to all of the circumstances. In any event, I consider that the applicant's pursuit of attempts to reach agreement, though very persistent and prolonged, was in all the circumstances reasonable, so as to provide an "acceptable explanation". 13 The other considerations referred to in Aerolineas Argentinas at 126 are generally favourable to the application. Ultimately, although, of course, the applicant has the burden of making a sufficient case to persuade me I should exercise my discretion in its favour, once all the circumstances have been exposed, the Court's role is to determine whether or not justice would be best served by acceding to the applicant's request. At the hearing, I concluded that it would, and made orders accordingly. The foregoing are my reasons, which I then reserved, for so doing. 14 So far as costs are concerned, in applications of this kind, the applicant is commonly ordered to bear the costs because, as is sometimes said, he is a suppliant for an indulgence. It is, of course, easy to see the matter in this light where a party has simply been dilatory for no satisfactory, or no particular, reason. But, in other cases, it is more appropriate to see an applicant as seeking the exercise of a statutory discretion conferred on the Court just because a fixed time limit for the bringing of a proceeding should not govern all cases. Although the order is discretionary, the applicant may come as a person invoking a right to apply expressly provided to meet circumstances such as those in which he stands. It is not accurate to think of an applicant so placed as a suppliant for an indulgence. In Darwin Broadcasters Pty Limited v Australian Broadcasting Tribunal (1990) 21 FCR 524 at 534, Beaumont J effectively made no order as to costs. In Wedesweiller v Cole (1983) 47 ALR 528, which, like the present case, involved a substantial period of delay, Sheppard J ordered that the costs of the applications for extension of time be costs in the applications to be brought by the applicants for review. This course was not followed in the circumstances of Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305 at 315-316, where the applicant was ordered to pay the respondent's costs of the application, but it is clear that the discretion is fully wide enough to justify its adoption in an appropriate case. In some situations, and particularly where the delay is explained by attempts to resolve the matter without litigation, the approach taken by Sheppard J may well be called for. The principles adopted by the courts should not discourage parties from attempting to reach pacific agreements rather than engage in all-out legal war. However, in the present instance, the Court would be able to judge the merits of the negotiations that took place more accurately after hearing the review itself, and accordingly, when I made my orders, I reserved the question of costs to the ultimate hearing. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett.