Federal Court of Australia|1990-07-18|Before: Davies J

Re Universal Magazines Pty Ltd v Comptroller-General of Customs [1990] FCA 244; 21 ALD 502 (18 July 1990)

Administrative Law - Judicial Review - Bounty (Books) Act 1986 (Cth) - Customs Tariff - consumer guides - whether publication "essentially devoted to advertising" - trade advertising material - whether irrelevant considerations taken into account - whether failure to take into account relevant considerations - whether decisions unreasonable.

Administrative Law - natural justice - whether failure to indicate a departure from previous decisions amounted to procedural unfairness.

Solicitor for the respondent: Australian Government Solicitor

The decision of Mr Charlton made on 7 August 1989 be set aside and the matter be remitted to the respondent for reconsideration according to law.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

This is an application for orders of review with respect to two decisions, one of 10 May 1989 and the other of 7 August 1989, made under the Bounty (Books) Act 1986 (Cth). At the hearing it was conceded that, as the second decision had reconsidered the first, the second decision was the effective decision.

2. The subject publications were 8 booklets entitled "The Complete Gardener's Buying Guide" (New South Wales and Victoria editions), "The Bargain Shopper's Guide" (Adelaide and Brisbane editions), "Choosing a School for your Child" (Adelaide, New South Wales and Victoria editions) and "Inside Melbourne". Each of the publications was described on its front cover as "A Gregory's Consumer Guide". The booklets were published by the applicant, Universal Magazines Pty Ltd, and were sold at newspaper and book shops for prices of $5.95 and $6.95 each.

3. Section 4(1) of the Bounty (Books) Act 1986 defines a "bountiable book" as follows:-

"... a book that, at the time its production is

completed, is a book that, if it were imported

into Australia, would be -

(a) goods in respect of which duty of Customs

would not be payable; or

(b) goods to which item 4901, 4903 or 4905 in

Schedule 3 to the Tariff Act would apply,

but does not include a book that, at that

time, is an ineligible book."

"(1) A reference in this Act to an ineligible

book shall be read as a reference to -

...

(c) a book that is -

...

(ii) a directory relating to a trade, business

or profession conducted;

...

in Australia or in a place or places in

Australia."

4. The provisions of the Customs Tariff appear in Chapter 49. Chapter Note 5 provides:-

"Subject to Note 3 to this Chapter, 4901 does

not cover publications which are essentially

devoted to advertising (for example,

brochures, pamphlets, leaflets, trade

catalogues, year books published by trade

associations, tourist propaganda). Such

publications are to be classified in 4911."

"PRINTED BOOKS, BROCHURES, LEAFLETS AND SIMILAR

PRINTED MATTER, WHETHER OR NOT IN SINGLE

SHEETS:"

"OTHER PRINTED MATTER INCLUDING PRINTED

PICTURES AND PHOTOGRAPHS."

"- Trade advertising material, commercial

catalogues and the like"

5. The amended application, brought under s.5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"), raises many grounds of challenge. Errors of law, procedural unfairness, the improper exercise of power, the taking into account of irrelevant considerations, the failure to take into account relevant considerations and unreasonableness are all relied upon. Each ground has been given many particulars. The technicality of the grounds beguilingly disguises the point that the classification of goods is generally a question of fact for the judgment of the decision-maker or tribunal of fact and is not a matter for review by this Court under the ADJR Act. That Act looks to defects in a decision-making process or in a decision which invalidates the decision as a matter of law. An error of fact is not such an error.

6. The words with which we are concerned in the Bounty (Books) Act and and in Items 4901 and 4911 of the Customs Tariff and in Chapter Note 5 to Chapter 49, are ordinary words of the English language. The meaning of such words and the issue as to whether goods fall within the classification provided by such words are, for the most part, matters of fact or of fact and degree and a decision on such matters cannot be challenged, absent an error of law. See The Australian Gas Light Co. v. The Valuer General [1940] NSWStRp 9; (1940) 40 SR (NSW) 126 per Jordan C.J. at p 137; Lombardo v. Federal Commissioner of Taxation [1979] FCA 66; (1979) 28 ALR 574 per Bowen C.J. at p 576. With respect to a like decision, Stephen J. said in Rotary Offset Press v. Deputy Commissioner of Taxation (1972) 46 ALJR 609:-

"It seems to me that the test properly is one

of popular usage and to my mind the matter was

well expressed by Mr Justice Wood when he said

in Re Bradshaw's Guide; Ex parte Stillwell

(1903), 29 VLR 415, that the matter is

entirely a question of fact to be decided upon

an inspection of the document guided by common

knowledge."

In Inland Revenue Commissioners v. Scottish and Newcastle Breweries Ltd (1982) 1 WLR 322 Lord Lowry, with whom Lord Salmon, Lord Fraser and Lord Bridge expressed agreement said, at p 327, with respect to the word "plant":-

"For present purposes, my Lords, I might be

permitted to repeat in a slightly condensed

form what I said on an earlier occasion in

Schofield v. R. and H. Hall Ltd. (1975) NI 12,

a case which was also concerned with plant:

(1) It is a question of law what meaning is to

be given to the word "plant", and it is for

the courts to interpret its meaning, having

regard to the context in which it occurs. (2)

The law does not supply a definition of plant

or prescribe a detailed or exhaustive set of

rules for application to any particular set of

circumstances, and there are cases which, on

the facts found, are capable of decision

either way. (3) A decision in such a case is a

decision on a question of fact and degree and

cannot be upset as being erroneous in point of

law unless the commissioners show by some

reason they give or statement they make in the

case stated that they have misunderstood or

misapplied the law in some relevant

particular. (4) The commissioners err in

point of law when they make a finding which

there is no evidence to support. (5) The

commissioners may also err by reaching a

conclusion which is inconsistent with the

facts which they have found. I would also

refer to the classic statement of Lord

Radcliffe in Edwards v. Bairstow (1956) AC

14, 36."

7. Several of the grounds of challenge fall into discrete areas. One is that there was a breach of the rules of natural justice in the making of the two decisions. It was submitted that procedural fairness had not been granted as, prior to the first decision of 10 May 1989, equivalent publications had been granted a bounty and the applicant had not been advised that there was any change in the view previously held. Perhaps counsel for the applicant had in mind as the next step in the argument that, as the first decision was invalid by reason of the breach of the rules of natural justice, then any subsequent decision affirming or repeating that decision would equally be invalid. For example, in Ridge v. Baldwin [1963] UKHL 2; (1964) AC 40, Lord Reid said at p 81:-

"So the only operative decision is that of the

watch committee, and, if it was a nullity, I

do not see how the statement by the Secretary

of State (his decision on appeal) can make it

valid."

However, the second decision taken on 7 August 1989 was a reconsideration by a more senior officer who was also authorised to take decisions under the Act. Thus, his decision was independent of the earlier decision and, having been taken at a subsequent time by a senior officer, was thereafter the effective decision. It was not flawed by any defect as to procedural fairness that there may have been with respect to the first decision. I do not hold that the first decision was flawed by procedural unfairness but simply that, if it was so flawed, that error did not flow through to the now effective decision of 7 August 1989.

8. Before the decision was taken on 7 August 1989, the applicant had been fully apprised of the issue which was being considered. Representatives of the applicant had had discussions with appropriate officers on 29 June 1989. There was another lengthy discussion on 12 July 1989. On 26 July 1989, the applicant sent a fax of several pages setting out the matter as it saw it.

9. Counsel for the applicant claimed that the officers to whom the representatives of the applicant spoke did not relay to the decision-maker, Mr Charlton, all of the matters that had been put. That may be so, but I see no element of procedural unfairness in what occurred. The applicant had a fair opportunity to put its case both orally and in writing and had an opportunity, if it was dissatisfied with the decision taken, of having the matter reviewed by the Administrative Appeals Tribunal on its merits. Before the Administrative Appeals Tribunal, the applicant would have been entitled to appear and to be represented and to put any matter it wished with respect to both facts and law. In this light, procedural fairness did not require that the representatives of the applicant should have had the opportunity to speak personally with the actual decision-maker or that substantially verbatim reports of the meetings should have been conveyed to him.

10. In my view, the substance of the applicant's case was put to and considered by Mr Charlton. I therefore reject the challenge based on the principles of procedural unfairness.

11. Another discrete ground of review is that Mr Charlton took into account views which officers of Customs, who were involved in classifications under Chapter 49, had with respect to the application of Items 4901 and 4911. In my opinion, as the Bounty (Books) Act referred to and incorporated provisions of the Customs Tariff, it was appropriate for Mr Charlton to take advice, if he wished to do so, from officers of Customs experienced in classifica- tions under Chapter 49. The meaning of the Act was a relevant, indeed a crucial matter, for his consideration.

12. Another ground was that Mr Charlton's decisions were void as unreasonable. I could not, however, hold that Mr Charlton's decisions were such that no reasonable decision-maker could have come to them. Mr Charlton considered that all the subject publications were "essentially devoted to advertising" and held that opinion strongly. Counsel for the applicant took an equally strong position that all the publications were not so devoted. My own view is that the several publications have differing characteristics and should be considered having regard to their particular features. These contrary views demonstrate how untenable it would be to hold that Mr Charlton's decisions were decisions to which no reasonable decision- maker could have come.

13. It was alleged that Mr Charlton failed to take into account the following relevant circumstances, inter alia:-

"(v) The manner in which the publications

were offered for sale to the public at

large.

...

(vii) The manner in which the books were

retailed;

...

(x) That not all bodies of a particular

category would be automatically

included in the book dealing with that

subject matter;

(xi) That there was an editorial policy to

determine what was included and what

was not included in each book;

(xii) That the inclusion of an advertisement

did not automatically ensure contents

within the Editorial policy of a

reference to that Advertiser in any

capacity."

14. Mr Charlton conceded in his evidence that he was not influenced by these matters. However, although they were relevant by way of background information, the matters were peripheral to the essential character of the publications. The question to be determined, whether the goods were essentially devoted to advertising, had to be determined primarily from an examination of the publications themselves. Their character as advertising matter depended upon their inherent characteristics, not upon any of the above matters. It appeared from the publications themselves what was the audience to which they were directed and that they would be available for sale at the prices marked. Mr Charlton did not overlook in this respect any matter which would have influenced his decision.

15. I turn now to the other grounds of challenge. I do not propose to deal with them seriatim or indeed to deal at all with those that are quite untenable. The basic issue is whether Mr Charlton genuinely considered the matters before him having regard to the statute.

16. The decision taken on 10 May 1989, which was communicated to the applicant by letter dated 15 May 1989, relied upon the two points, the first being that the subject publications were essentially devoted to advertising and the second being that the publications were each a directory relating to a trade, business or profession conducted in a place or places in Australia. The letter of 15 May 1989 said:-

"Whilst it is acknowledged that bounty may have

been paid on this type of publication in the

past, the delegate of the Comptroller-General

has recently had cause to review these

decisions and has now determined that the

publications would be ineligible for the

reasons outlined above."

The letter would support a view that a policy relating to "this type of publication", whatever that may be, affected decision-making in the bounty area.

17. Mr Charlton did not concern himself with the question whether the publications were directories, and so excluded from bounty by s.5(1)(c) of the Bounty (Books) Act. He made his decision solely on the basis that the books were essentially devoted to advertising. Mr Charlton applied a comment of Deputy President C.J. Bannon Q.C. in ESN Federal Publishing Co and Collector of Customs ("the ESN case) delivered 28 April 1989. The Deputy President considered whether bounty was payable on a publication entitled "Sonic Australia's Music Industry Reference Yearbook". The learned Deputy President held that that work was essentially devoted to advertising and, in any event, was a directory within the meaning of s.5(1)(c) of the Bounty (Books) Act. In the course of his reasons, the Deputy President said:-

"Advertising occurs if public attention is

drawn to offers for sale, or offers of

services by public notice."

18. The letter communicating Mr Charlton's decision of 7 August 1989 included the following paragraphs:-

"I refer to your letter of 26 July 1989

requesting a review of the decision by the

Regional Manager Bounties, New South Wales, to

refuse bounty on eight titles published by our

company.

As advised by Messrs John Murphy and Michael

McMahon in Sydney, and Messrs Garry Hand and

Peter Johnson in Canberra, the refusal was

based on the decision handed down by the

Administrative Appeals Tribunal (AAT) on 28

April 1989 re ESN Federal Publishing Company

and Collector of Customs (N89/56).

Whilst earlier editions of these books were

bountiable, the ACS now has to take into

consideration the principles behind the

decision by the AAT when determining the

eligibility of publications similar to 'Sonics

Australia's Music Industry Reference

Yearbook'.

Your publications were deemed similar and

accordingly have been refused bounty.

The guidelines relating to directories and

advertising are currently under review by

Bounties in conjunction with Tariff and the

Department of Industry, Technology and

Commerce. You would naturally be advised

immediately if the outcome of the review

results in any changes to our present policy.

I also wish to bring to your attention

paragraph 33(1)(d) of the Bounty (Books) Act

1986 which allows you to refer the decision to

the AAT for review."

At that time, Mr Charlton had not himself seen the publication which was the subject of the ESN case. The emphasis placed by this letter upon the alleged similarity of the subject publications to that publication and the specific reference to the ESN case suggest, however, that Mr Charlton himself was influenced by a view or policy that publications of that type were not proper subjects for bounty.

19. In his first statement of reasons delivered under s.13 of the ADJR Act, Mr Charlton merely said, as to his reasons for decision:-

"11. Following consideration of the material

listed at paragraph 9(v), I decided that the

publications were essentially devoted to

advertising and that they would properly be

classified to Tariff Item 4911 if they were imported."

20. In a supplementary statement of reasons, Mr Charlton said, inter alia:-

"5B In considering the term 'essentially

devoted to advertising' I took into

account my own understanding of those

terms and the following as indicated by

the AAT:

- Chapter Note 5 to Chapter 49 of the

Customs Tariff Act 1987 does not use

the words 'devoted to advertising'

in the sense of 'intentionally

devoted to advertising';

- 'devoted' is used in the sense of

'given up to advertising' and it

becomes a factual question whether

or not the publication is so given

up;

- the fact that most of the

information is factual, and free

from puffs and blandishments, does

not prevent it being advertising;

- advertising occurs if public

attention is drawn to offers for

sale, or offers of services by

public notice."

21. The last point there made adopted the comments of the Deputy President in the ESN case.

22. I turn now to one of the publications to which it is useful to refer as a point for discussion, that is, "Choosing a School for your Child" (Sydney). The supplementary reasons delivered under s.13 said in respect of this publication:-

"(iii) Choosing a School for your Child

- are described on the cover as 'a

consumer guide' and are written in a

style that is designed to promote

schools;

- lists schools and describes services

that each school offers together

with contact phone numbers and

sometimes costs;

- in addition there is a section

described as a 'products and

services section' that advertises

products and services that are

related to education;

- whilst educational in nature and not

written by each school the

information on the schools promotes

the services each school has to

offer to enable a decision to be

made in choosing a school."

23. In his evidence given to the Court as to the publication, Mr Charlton said, inter alia:-

"And so far as the schools guide is concerned

did you not consider that that was a means of

disseminating information to enable persons to

compare what is available at different

schools?---I have no doubt that is the purpose

of the book as well.

Did you not consider that that was the

principal purpose of the book?---I did not

consider that, no, I considered that the

essential purpose was to, similar to the other

publications, to advertise what was available

and what was not to the general public.

When you use the word advertise in that sense

of advertise, do you mean it in the sense of

disseminating information?---No, I mean it in

the sense of promoting the availability of

particular services or goods and so forth to

the public and that is what I consider the

essential purpose of the booklet.

...

But, sir, in relation to, again, choosing the

schools as the instance, when you formed the

view that the publication was essentially

devoted to advertising, did that not contain

within it implicit in your reasoning that it

was fundamentally and principally devoted to

advertising?---No; it meant that, I believed,

the essential purpose, the essential thing,

the essence of the booklet was to promote it -

promote the schools."

24. This evidence suggests that Mr Charlton was attempting to rationalise his decision. The work "Choosing a School for your Child", which was retailed for $6.95, certainly contained some advertising matter but it was in essence a reasonably comprehensive description of the private and government schools in the Sydney region. No doubt it was not totally comprehensive but, from appearance, it was not selective. It gave information about the schools in the Sydney region, more detailed information being given about secondary schools than primary schools. The details included information as to the particular interests developed in a school. It could not reasonably be suggested that the work essentially attempted to promote all or any particular schools in the area. What it did was to give a description of schools and information about them so as to enable a person who was interested in sending a child to a new school to make a comparison.

25. Not all the publications were alike in this respect. For example, the "Bargain Shoppers' Guide" was selective as to the goods and services which it discussed and therefore tended to promote the goods and services described, over those which were not mentioned. The very nature of this publication, dealing with goods and services offered for sale, could give it a different character in relevant respects to others. But these differences were not discussed by Mr Charlton.

26. In adopting the words of the Deputy President in the ESN case, Mr Charlton took them out of context and thus gave to the word "advertising" a wider meaning than it customarily has in ordinary parlance. In earlier times, the word "advertise" had the meanings of "to call the attention of (another)"; ... "To give notice of" ... "To give warning or information (of)". See the Shorter Oxford Dictionary which also gives to the word "advertisement" the meanings "attention", "admonition", "information", "notification". The current use of the term "advertisement" and the manner in which it is used in Chapter 49 will be found in the Macquarie Dictionary. This defines the term "advertise" as follows, inter alia:-

"1. to give information to the public

concerning; make public announcement of, by

publication in periodicals, by printed

posters, by broadcasting over the radio,

television, etc. .. 2. to praise the good

qualities of, in order to induce the public to

buy or invest in. 3. to offer (an article)

for sale or (a vacancy) to applicants, etc.,

by placing an advertisement in a newspaper,

magazine, etc."

27. That Dictionary treats the meanings "to give notice, advice or information to; inform" as archaic. The Dictionary defines "advertisement" as:-

"any device or public announcement, as a

printed notice in a newspaper, a commercial

film on television, a neon sign, etc.,

designed to attract public attention, bring in

custom, etc."

"1. the act or practice of bringing anything,

as one's wants or one's business, into public

notice, esp. by paid announcements in

periodicals, on hoardings, etc., or on

television ... 2. paid announcements;

advertisements."

28. As Gibbs J. said in Deputy Commissioner of Taxation of the Commonwealth v. Rotary Offset Press Pty. Ltd.(1971) 45 ALJR 518 at p 521:-

"The word 'advertise' means to make generally

or publicly known, as to give public notice

of, but the phrase 'advertising matter' in the

context of item 51 must have a somewhat more

limited meaning, and must be restricted to

published announcements of a business kind,

for example, calling attention to the fact

that property is for sale and setting out its

qualities, especially the desirable ones."

"In other words, if the periodical on its face

appears to be designed to promote the sale of

property by means of a public announcement

that it is for sale, and by giving a

description of its qualities and a statement

of its price, it is "advertising matter"

notwithstanding that its publication was, in

fact, promoted not only by the desire to sell

the property, but for other purposes as well."

29. Chapter 49 itself gives an indication of what it intends to be included in sub-item 4911.10.00, for that sub-item refers to "trade advertising material, commercial catalogues and the like". When Chapter Note 5 refers to "publications which are essentially devoted to advertising" and specifies that such publications are to be classified in Item 4911, it also provides examples of what is intended. Those examples are:-

"... brochures, pamphlets, leaflets, trade

catalogues, yearbooks published by trade

associations, tourist propaganda)".

30. It was therefore a relevant matter that none of the publications were "trade advertising material, commercial catalogues and the like" or were "brochures, pamphlets, leaflets" or readily fell into the classification of "trade advertising material, commercial catalogues, trade catalogues, yearbooks published by trade associations or tourist propaganda".

31. So we come to the final point, whether there was an error and if so was it an error of fact or of law. On this I have vacillated. In the end I have come to the conclusion that Mr Charlton adopted the Deputy President's words verbatim and that those words, read verbatim, are not consistent with the meaning of Chapter Note 5 or of the terms of Item 4911, both of which show that what are to be included are publications directed to offers for sale and offers for service rather than information about those matters. In the context of Chapter 49, the term "advertising" has a more limited meaning than Mr Charlton gave to it. Item 4911 is concerned with publications in the nature of or analogous to trade advertising material. No doubt, the item is extended by Chapter Note 5. But publications such as brochures, pamphlets, leaflets, trade catalogues, year books published by trade associations and tourist propoganda which are essentially devoted to advertising fall readily into this category. It is therefore impermissible to give to the word "advertising" in Chapter Note 5 a meaning wider than is consistent with the context in which it appears.

32. For this reason, I am of the view that the decision under review should be set aside and the matter remitted for reconsideration. I give no direction or indication as to the result of that reconsideration. Any observations of mine as to matters of fact should be regarded as no more than that. Matters of fact are matters to be decided by the decision-maker. It will be for the decision-maker to decide whether the subject publications are or are not subject to bounty. The decision will, of course, be open to review on the merits by the Administrative Appeals Tribunal.

33. In the circumstances, the decision of Mr Charlton must be set aside and the matter will be remitted to the respondent for reconsideration according to law. The respondent should pay the costs of the application.

Decisions (Judicial Review) Act 1977

Re Universal Magazines Pty Ltd v Comptroller-General of Customs [1990] FCA 244; 21 ALD 502

At a glance

Court

Decision date

Before

Source

Judgment (69 paragraphs)

Re Universal Magazines Pty Ltd v Comptroller-General of Customs [1990] FCA 244; 21 ALD 502 (18 July 1990)

Parties

Legislation Cited (12)

Cases Cited (2)