Sharp Corporation of Australia Pty Ltd v Collector of Customs

(1995) 59 FCR 6

---

(Decision by: Hill J)

Sharp Corporation of Australia Pty Ltd
vCollector of Customs

Court:

Judges: Davies J

Hill JBeazley J

Legislative References:
Administrative Appeals Tribunal Act 1975 - s 44(1)
Customs Tariff Act 1987 - Schedule 3
Income Tax Assessment Act 1936 - The Act
Sales Tax (Exemptions and Classifications) Act 1935 - Schedule 1

Case References:
-

Hearing date: 13 February 1995
Judgment date: 4 September 1995

---

Decision by:
Hill J

I have had the opportunity of reading in draft form the joint judgment of Davies and Beazley JJ and agree with the orders proposed by their Honours and with the conclusions which they have reached. I wish only to add some brief comments on the issue whether the appeal from the Administrative Appeals Tribunal raised a question of law.

The Tribunal was of the view that no particular component of the toner replacement kit gave to the whole an essential character, with the result that R3(c) of the general rules for the interpretation of the tariff required the kit to be classified under sub-heading 8473.30, being the last in numerical order among the relevant headings which equally merited consideration. The judgment appealed from took a different view of R3(b) and in particular its relation to R3(c).

It was submitted that the finding by the Tribunal that R3(b) had no application was a finding of fact and raised no question of law. It followed, it was said, that his Honour erred in concluding that there was a material component which gave to the goods their essential character, such that R3(c) had no application.

At the heart of the submission lies the well established rule that the ascertainment of the ordinary meaning of a word is but a question of fact: Australian Gas Light Co v The Valuer General (1940) 40 SR(NSW) 127 at 137-8 per Jordan CJ; Hope v Bathurst City Council (1980) 144 CLR 1 at 7-8 per Mason J. So it is said that the meaning of the phrase "essential character", that phrase being made up of ordinary English words, is likewise a question of fact.

The next step in the argument is to say that the question whether a particular set of facts comes within the description of such a word or phrase is likewise one of fact, a proposition for which Australian Gas Light Co is also authority. A finding by the Tribunal that a particular material component gave to particular goods their essential character would be a finding of fact: Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449.

However, even where the Tribunal has made a finding of essential character, a limited right of appeal to this Court may arise. That finding may not be open on the evidence. If so, the Tribunal has erred in law in reaching it. Likewise, in arriving at its finding, it is possible in a particular case that the Tribunal might err in law, for example, by failing to afford to a party procedural fairness, or the Tribunal might have misdirected itself in law, for example, because it adopted an incorrect view as to the relationship between R3(b) and R3(c).

The rule that a question of fact is involved in determining whether facts fall within the meaning of a word once that meaning is ascertained, may cause confusion. The confusion comes about because there are actually two related rules, the distinction between which is not always readily apparent. The first of these rules is generally expressed as being that where the facts have been fully found or there is no dispute as to the facts and the question is whether those facts necessarily fall within the description of a word or phrase in a statute, that will be a question of law. This is the sixth proposition enunciated by Jordon CJ in the Australian Gas Light Co case. The rationale for this principle is clear enough. If only one meaning is open but a tribunal arrives at a different meaning, underlying the tribunal's conclusion must be an error of principle, that is to say, an error of law.

The second related principle is that where the facts found are capable of falling within or without the description used in the statute, the decision which side of the line they fall on will be a decision of fact and not law. Such a decision will generally involve weight being given to one or other element of the facts and so involve matters of degree.

When in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Neaves, French and Cooper JJ enunciate their fifth proposition in terms that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is "generally" a question of law, the reason for the qualification lies in the fact that the fifth proposition is in truth the two separate and related propositions to which I have already referred.

Turning to the facts of the present case where the primary facts were not in dispute, the question whether it was open for the Tribunal to find that no one material or component gave the goods their essential character was clearly a question of law. It was a question which on his Honour's view of the construction of Rules 3(b) and (c) and their relationship to each other, had been decided erroneously by the Tribunal. If, as I think to be the case, it was open to the Tribunal to find that no one material or component gave to the toner kit an essential character, then its finding that R3(b) was inapplicable involved no more than a finding of fact which could not be reviewed by this Court.