Re Curragh Queensland Mining Limited v K Daniel; Comptroller-General of Customs and John Norman Button, Minister of Industry, Technology and Commerce [1992] FCA 44;

Re Curragh Queensland Mining Limited v K Daniel; Comptroller-General of Customs and John Norman Button, Minister of Industry, Technology and Commerce [1992] FCA 44; - FCA 1992 case summary — Zoe

[15]

"Q. Now, the contract which Curragh had for coal in

respect of this particular venture is dated 30 January

1981; is that right?

A. Sorry, what was that again?

Q. That is the contract with the Queensland Electricity

Generating Board?

A. I believe that is right.

Q. That is what these draglines were required for use in

respect of that contract; is that the position?

A. Well, yes, but it is a little bit more complicated

than that. The contract was one which gave an

assurance that the project would have a market for the coal.

Q. Right?

A. But it was not the sole market. There was an

intention to produce a coal mine which would sell coal

to the Queensland Electricity Generating Board as well

as for export.

(A copy of the contract was produced.)

Q. Would you turn to clause 4.1 of that contract, please;

that provides for a commencement date of that contract

of 1 October 1983. Do you see that?

A. Yes, I do.

Q. Can you tell me whether that commencement date was

agreed on the basis of the estimated - or taking into

account the estimated delivery dates of the draglines

by Dresser as set out in their letter of offer of 11

December 1980?

A. I believe that it was, yes.

Q. So is the position that in the way in which

negotiations proceed, you first find out when you can

get your draglines, and base your dig dates under the

contract on the availability of those draglines?

(Counsel for the applicant objected on the grounds of

relevance.)

Counsel for the respondent:

It is relevant, you Honour, for the exercise of

discretion by Mr Wilson. The evidence before Mr

Wilson, as appears from his affidavit, was that these

gearcases could have been manufactured by Vickers in

Australia, for this particular model - 8200 walking

draglines. Mr Wilson's evidence will be that Curragh

makes, in fact, a commercial decision as to whether

they get Vickers to make them or gets Dresser to make them.

Their contract appears to be based upon the

availability of them so that when one comes to

consider whether they are reasonably available, you

cannot look at your contract - the submissions will

be: you cannot look at your contract and say they

have got to have a dig date by 1 October 1983,

therefore, they are not reasonably available unless

they will be there and in place before 1 October 1983:

because that is not the process. The process is: you

find out your availability first and your dig date

then corresponds with your availability rather than

vice versa. That is really the relevance of this question.

(His Honour allowed the question.)

Q. I think, as I recollect it, we are simply asking you

to confirm whether you ascertain the availability of

the equipment and then negotiate your commencement

date of your coal supply contract to correspond with

that availability of equipment?

A. Yes, I believe that is the order in which the events occur."

[21]

"The first issue to be determined is whether Vickers could

have supplied the goods within a reasonable time frame. It

has been said on several occasions that the goods had to be

supplied to meet the contracted dig date. This, however, is

contradicted by the statement by Mr Ian Bannerman, the

Corporate Solicitor for Arco Coal Australia Inc, at the

hearing before the Federal Court. In response to

questioning Mr Bannerman responded to the question:

Question

'I think, as I recollect it, we are simply

asking you to confirm whether you

ascertain the availability of the

equipment and then negotiate your

commencement date of your coal supply

contract to correspond with that

availability of equipment.'

Answer

'Yes, I believe that is the order in

which the events occur'.

Although Mr McDonald (formerly of Vickers) has stated that

production planning began with the dig date and everything

worked back from that, Mr Bannerman's statement, which was

not challenged in Court, indicates that Curragh was not

locked into a specified dig date. It thus was open to have

had a later delivery date which may have enabled the

inclusion of Australian made gearcases. I note also that it

was said at a meeting on 10 November 1983 that the Curragh

machines were 5-1/2 weeks late.

The question of Vickers' capacity to produce the relevant

goods has featured strongly in your application. It has

been pointed out that the offer to supply for the Riverside

project (a BHP mine) was made on 2 December 1980. The offer

date for the Curragh project was 11 December 1980. The

dates for the letters of intent and their confirmation,

however, are in a different order with the Curragh project

being in front of the Riverside one. I note that the offer

made in relation to the Curragh contract only remained valid

if the offer was confirmed by a specified date and if

Curragh in fact got the contract to supply coal. I

therefore come to the conclusion that Curragh was not locked

into obtaining its draglines until after it knew that it had

obtained its coal supply contract. At that stage the

Riverside contract had not progressed to the stage where the

order had been confirmed.

Evidence has been presented by former employees of Vickers

about the pre-production planning for, amongst others, the

Riverside project. Reference has been made to computer

scheduling and visits to the United States on this project.

No comment at all in the relevant statements has been made

about what, if any, such work was undertaken within the

Vickers organization in relation to gearcases for Curragh

(or for the R.W. Miller contract). Vickers had shown

interest in this contract, but as discussed in more detail

below, Dresser have stated that they had decided to offer

gearcases from overseas for the Curragh project. There is

also contained in the Discovery papers in a document marked

202, a comment that Dresser wished to maximise the use of

their own facilities for the Curragh project. I would have

liked to have been able to examine the Vickers production

planning records but Mr McDonald has stated that to his

knowledge they no longer exist.

It is clear that Vickers did tender for the R.W. Miller

contract. It would seem reasonable to assume that to be

able to tender there would have had to have been work done

in relation to production planning. Yet Mr McDonald does

not refer to either the Miller or the Curragh projects in

his statement.

Taking all these factors into account, I am not satisfied

that if Vickers had been able to participate in the Curragh

contract, an aspect which will be discussed below, that it

would not have been able to supply the relevant goods in a

reasonable time frame. It has been shown that the time from

the actual placement of the order to the actual delivery of

the goods was approximately 2-1/2 years. By the evidence of

Mr Bannerman it has been shown that the dig date is not a

finite date but depends on the supply of the necessary equipment.

It is not contended that Vickers would have been able to

supply to meet the designated dig date but rather that in a

time frame which covers several years that Vickers may have

been able to supply within a reasonable time frame. In

terms of supply within a reasonable time frame I am not

satisfied that Vickers' desired production of the gearcases

was 'not reasonably available'."

[23]

"In the event, there is a clear statement that Vickers was

not requested to make the gearboxes. There is also no

evidence that Vickers were authorised to use the relevant

drawings and specifications. There is thus the situation

where Vickers were not permitted to manufacture the goods

for Curragh. The submission from your Solicitors is that

because such is the case it follows that the goods cannot be

said to be reasonably available and thus the desired

determination must be granted.

In the light of the fact that Vickers were not permitted to

manufacture the gearcases because of the restrictions in

their Manufacturing Agreement I conclude that they could not

be regarded as being able to satisfy the 'reasonably

available' criterion. I would, therefore, prima facie grant

the determination that you have sought. However, despite

being satisfied that suitably equivalent goods the produce

or manufacture of Australian are not reasonably available it

does not follow that a determination must be granted.

The power vested in the Comptroller-General in relation to

section 273 of the Customs Act provides him with a

discretion as to whether a determination will be granted.

The purpose of the Customs Tariff Acts is to provide

assistance to Australian industry. The rate of duty

applicable to the goods in question would have been

established following a public enquiry by the Industries

Assistance Commission and the passage of the necessary

legislation through Parliament. That tariff assistance was

only intended to be reduced when Australian made goods which

are suitably equivalent are not reasonably available. I am

not satisfied that if approval or authorisation had been

given to Vickers, that they could not have produced suitably

equivalent goods that would have met the criterion of being

reasonably available.

It would be unusual if the availability of concessional

admission could depend solely on a decision taken outside

Australia to withhold permission to make goods which could

otherwise be made in Australia. This is particularly so

when it appears that the decision of the American

manufacturer was influenced by factors relating to the

maximization of the utilization of its own facilities.

I have therefore decided that it is not appropriate to grant

an application for a concession when the reason that the

concession would be granted is that Australian made goods

are not reasonably available only because of the overseas

manufacturer withholding permission to make the goods.

Accordingly I have decided not to grant the determination

that you have sought."

At a glance

Court

Decision date

Before

Source

Judgment (68 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (9)

Re Curragh Queensland Mining Limited v K Daniel; Comptroller-General of Customs and John Norman Button, Minister of Industry, Technology and Commerce [1992] FCA 44; (1992) 34 FCR 212 (1993) 27 ALD 181 (E (14 February 1992)