Regional Director of Customs (WA) v Dampier Salt (Operations) Pty Ltd P34/1996 [1996] HCATrans 430 (4 November 1996)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P34 of 1996

B e t w e e n -

REGIONAL DIRECTOR OF CUSTOMS (WA)

Applicant

and

DAMPIER SALT (OPERATIONS) PTY LTD

Respondent

Application for special leave to appeal

DAWSON J

McHUGH J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON MONDAY, 4 NOVEMBER 1996, AT 11.55 AM

Copyright in the High Court of Australia

MR G.A.A. NETTLE, QC: May it please the Court, I appear with my learned friend, MR A.L. CAVANOUGH, for the applicant. (instructed by the Australian Government Solicitor)

MR G.A. FLICK, SC: If the Court please, I appear with MR A. SWEIDAN, for the respondent. (instructed by A. Sweidan)

DAWSON J: Yes, Mr Nettle.

MR NETTLE: The question for which to argue leave is sought is whether the legal conception of mining for minerals stops with the recovery of the minerals as this Court has previously held it does, or, alternatively, whether it extends beyond that to the treatment of minerals, the better to adapt them for some particular use, as the Full Federal Court has now held that it does.

In particular, the question is whether the processing and refinement of a recovered mineral in order to improve its specification to that dictated by a particular market in which the taxpayer chooses to sell is part of mining for minerals and thus mining operations as defined in section 164 of the Customs Act 1901 .

DAWSON J: That really raises the question, does it not, that definition. We do not need to go outside paragraph (g) do we, really? The production of salt by means of evaporation, is that not the definition?

MR NETTLE: That is part of the definition; it is certainly not the way in which the court below approached it in that it endeavoured and, indeed, did construe paragraph (g) by reference back to paragraphs (a) and (b).

DAWSON J: Yes. But really one comes back to (g) in the end, does not one?

MR NETTLE: To (g) in the end, certainly.

DAWSON J: Yes, and the question is whether this is production of salt by means of evaporation.

MR NETTLE: Within the meaning of paragraph (g) - - -

DAWSON J: Yes.

MR NETTLE: - - - accepting, as we would contend one ought, that paragraph (g) goes beyond what is in (a) and (b) and (a) and (b) is, as a matter of authority for this Court, confined to the recovery of the mineral. May I say what is intended by that is that if it is right in (a) and (b) to confine mining to recovery, then it is submitted that the same limitation ought be imposed upon paragraph (g). In other words, once there has been recovered common salt one has concluded the mining operation conceived of by paragraph (g).

DAWSON J: Really, what you say once there has been produced, rather than recovered, because that is the definition.

MR NETTLE: Then so be it, but "produced", it is submitted, means in the context the same thing as "recovered".

DAWSON J: All right. That is your submission, yes.

MR NETTLE: If your Honour please. The question is important, in our contention, for a number of reasons. First, because it directly affects applications for diesel fuel rebate by the mining industry which are worth in the order of $700 million a year. Secondly, because of the way in which the definition of "mining operations" - - -

KIRBY J: Seven hundred million in respect of salt?

MR NETTLE: No, of mining operations, your Honour.

KIRBY J: But we are only concerned with the salt aspect.

MR NETTLE: I know your Honours keep saying that, but I am trying to persuade you desperately - perhaps it is not putting it too highly - that it is really a case about mining operations and the way in which they are defined, and it is. The Court spoke about mining operations. It is a case which is now Full Court authority for the proposition that mining operations extends beyond recovery into treatment, the better to make something saleable in a market in which the taxpayer chooses to operate. The consequence of that - - -

DAWSON J: It turns on its own facts, does it not, really?

MR NETTLE: It does not, with respect.

DAWSON J: The harvesting of salt is a very different operation to opal mining, for instance, is it not?

MR NETTLE: I will not disagree with that, your Honour, but may I say the difficulty which the Collector faces is that, here is a case in which there can be no clearer finding of fact that the production of salt is completed at the wet stockpile - I refer to page 13 of the application book in paragraph 22 of the Tribunal's reasons for decision. A clearer finding of fact one could not find that, from both a common sense point of view and from a scientific point of view, common salt has been recovered or produced by the term of the wet stockpile and, further, everything which follows thereafter is simply refinement.

Yet, by medium of reference to mining operations and the inclusion in the definition of "mining operations" of things which are said to be associated with it, went to be connected with it, the Full Court has, as it were, got from without that finding of fact to a conclusion that things which were done after production were part of mining operations, and it is because of the way in which the Full Court has gone about it that the Collector is now faced with a Full Court decision that notwithstanding that things are refinement and refinement only, they can nonetheless be mining operations for the purposes of this definition if it is necessary to engage in that refinement to render the product suitable for sale in the market in which the taxpayer chooses to operate.

KIRBY J: This is language of a statute, federal statute, Federal Court. I think this Court has said that, normally, it will leave such matters to the Federal Court. What is it that lifts this case up into a matter of importance that we should look at it?

MR NETTLE: Principally this; when most of the authorities which exist on the subject were decided there was within the definition two paragraphs - paragraph (c) and paragraph (ca) - which were termed the "sweeper" clauses. Last year, the Commonwealth Parliament enacted legislation - Act No 85 of 1987 - to remove those sweeper clauses, with the expressed intention of taking out of the definition of "mining operations" things which were only included in there because they were associated with, or integrally connected with.

The Full Court has now, by a process of reasoning from authorities which were to do with the old definition, infused back into mining operations activities which are associated with, or integrally connected with mining operations. The point is that Parliament has transparently and openly enacted legislation to change the position, with the expressed.....intention of limiting the Diesel Fuel Rebate Recovery Scheme, and the Full Federal Court, in the first decision which follows it to get to the Full Federal Court, has set that at nought.

Now, it is submitted, your Honour, that when the Parliament does so act transparently, and when a Full Federal Court gets to a conclusion which frustrates the effect of the amendment, putting it at its best, by a misconstruction of previous authority of this Court, what is revealed is a point which is worthy of the consideration of this Court and, thus, the grant of special leave.

Now, I do not put the case too highly when I say it does concern mining operations, because of the way in which the court below reasoned. It rejected the authority of this Court, which said that anything after recovery was not mining, and went on to adumbrate six propositions, the most expansive of which was that sometimes, if it is necessary for a taxpayer to sell into a particular market, and the market requires that the product be refined to a point or specification, then the refining activity of that sought ought be regarded as so closely associated with the mining activity strictly so called that it qualifies. We refer in particular to page 85 of the application book, where the sixth of those propositions, which begin at 84, line 13, appears.

DAWSON J: Now, what is the proposition you object to?

MR NETTLE: Proposition (6), your Honour, at page 85 of the application book.

DAWSON J: What is wrong with that?

MR NETTLE: It is wrong.

DAWSON J: Why?

MR NETTLE: Authority of this Court says that minerals are recovered. Once they are recovered and that which follows by way of refinement to better adapt them or improve them at particular application, is not part of mining operations. This Court, the Full Court of the Federal Court, has ignored that, starting at page 73 of this application book, by taking authorities which were to do with the sweeper clauses - I refer in particular to line 20 and following, page 75 - giving lip service to the fact that those decisions were to do with a definition which artificially expanded mining operations, to things which were associated with, or integral to, and then said, ignoring that lip service, that whenever a taxpayer chooses to sell his product in a market which demands a particular specification, his mining activity may be taken to extend beyond the point of recovery, to include all of the refinement necessary to lift the specification to that market in which he chooses to sell. And thus, in this case, because the Japanese, to whom this company chose to sell, demanded a particular specification, it was held that the additional degree of refinery, in fact de minimis, between wet stockpile and dry stockpile, was to be regarded as part of recovery or mining operation.

DAWSON J: But, you have to look at what was said in the context of the particular facts, and what was happening in the dry stockpile was, to a large extent, the same thing that was happening in the wet stockpile. The evaporative process was continuing; the salt was being treated by being turned over, and it is difficult to draw a distinction between the two stockpilings; wet stockpiling and dry stockpiling. There is no contention that wet stockpiling is part of the production of salt, is there?

MR NETTLE: There was a concession made by the Commissioner below - - -

DAWSON J: There is no question, is there?

MR NETTLE: Before you? No.

DAWSON J: No. And you have got to show what the difference between the two is, and what is being said there is not that every operation which takes place after the winning of the material from the ground, if that is relevant, is part of the mining operations, but some are so closely associated with that process as to be part of it. It might be a difficult line to draw in some cases. It may even be a difficult line to draw in this case, but a line has to be drawn.

MR NETTLE: Your Honour, doubtless a line does have to be drawn, but can I hark back to something I just said? That is, that Parliament did act expressly, last year, to take the sweeper clauses out.

DAWSON J: Maybe it did, but what it left was a clause which said the production of common salt.

MR NETTLE: Yes, and - - -

DAWSON J: Well, the court said here that the production of common salt goes on until such stage as it leaves the dry stockpile.

MR NETTLE: With respect, only by means of an artificial construction of statutory definition. The finding of fact was that the salt had been recovered at the wet stockpile. That was what I showed your Honour at page - - -

DAWSON J: A form of salt had been recovered at the - - -

MR NETTLE: Scientifically and from a commonsense point of view, was the express finding, salt had been recovered.

DAWSON J: Well I suppose before the evaporative process takes place, you could say salt has been recovered in brine, but the point is that the evaporative process is what produces the product which finally is, as they said, saleable.

MR NETTLE: But it is the "saleable" which is the point. To think back, if one will, on earlier decisions of this Court, that is to say, blending coal of different specifications in order to make it saleable in a the particular market, was held to be a process of refinement or treatment and not part of the process of mining coal.

DAWSON J: Yes.

MR NETTLE: Think of Mr Justice Toohey when President of the Administrative Appeals Tribunal in Cliffs Robe River, where he expressly animadverts to the distinction between recovery and activities which are associated with it, and pushes them off and will only include them as he was dealing with the matter at that time, because the statutory definition pulled them back in. Now here Parliament, whether effectively or not perhaps does not matter for the moment, has, as I said, expressed, as you have seen in explanatory material, that it wants to get rid of those things which were previously included on the basis that they were associated or connected with mining, as this Court has held it to be, and therefore - - -

McHUGH J: Mr Nettle, is not the real problem here that what the court says at pages 84 and 86 in the book about mining operations, that those six operations really had nothing to do with this case, that they are obiter, that what the court should have been concentrating on was whether the facts of the case came within paragraph (g), and they talk about mining operations, and you may or may not have a good point about their treatment of it, but it seems to me that it is just all obiter; that none of those propositions have got anything to do with this case.

MR NETTLE: But, your Honour, that would be a submission I would make to you if you were kind enough to grant leave to appeal, but the point is now, if I may say so with great respect, the only way they have got around the fact that this was not the production of common salt within the meaning of paragraph (g) was to elevate this analysis which culminates in the six propositions in order to produce a conclusion that where something is beyond recovery, or in this case production, but is necessary in order to make the product suitable for sale, it can be included. Now that impacts not just on this little case; it has an immediate, a direct and dramatic effect - - -

McHUGH J: Well I can understand the six propositions are of general application and arguably there are some steps, or some of them, are arguably wrong, but does that really arise in this case when the true issues are analysed?

MR NETTLE: Yes, it does because here you have a perfect vehicle in the fact that we have a finding that common salt was produced by the time of the wet stockpile. On any analysis the production of common salt cannot be, as it were, narrower than mining for minerals or mining operations within the meaning of paragraphs (a) and (b). I say that because the paragraphs which follow (a) and (b) artificially extend. We have the Full Court saying that one may include within mining operations (a) and (b) and thus within paragraph (g) things which are beyond recovery and are refinement necessary to produce a marketable product.

DAWSON J: But this is not a mining operation. The inclusive definition brings in something that simply is not mining.

MR NETTLE: Correct.

DAWSON J: One has to say when the production of salt takes place. The court has come to a conclusion on the facts that it takes place when the process on the dry stockpile ceases, but that is not going to affect anything else.

MR NETTLE: But, your Honour, the court has not come to any conclusion on the facts. The conclusions were come to on the facts below in the tribunal and the conclusion on the facts below was that common salt was produced at the wet stockpile and expressly everything which followed was to treatment.

DAWSON J: Yes, common salt in the sense of something that was identifiable as salt but not common salt within the meaning of the definition.

MR NETTLE: Indeed common salt within the meaning of the definition. They said that both a common - - -

DAWSON J: It is sodium chloride when it is in brine but - - -

MR NETTLE: No, your Honour.

DAWSON J: Perhaps you will direct us to the particular passage.

MR NETTLE: Yes, certainly. It is back to page 22. Before I ask your Honours to read that, can I remind your Honours that when we are talking about a difference in specification of water content of less than 1 per cent as between the wet stockpile and the dry stockpile and that on the facts the bulk, if not the totality, of the salt of the wet stockpile was already in a marketable condition, there was minimal de minimis improvement as between the two.

DAWSON J: Maybe, but it was still the same process of evaporation which took place in the dry stockpile.

MR NETTLE: In the sense that if you put salt in the sun it dries, yes.

DAWSON J: Yes, and the whole business of producing salt is evaporation. That is how it is produced.

MR NETTLE: By and large, yes.

DAWSON J: Not by and large. That is how it is produced.

MR NETTLE: I say "by and large" because of the need to refine it, removing impurities and - - -

DAWSON J: Yes, you remove the impurities but the essential process is one of evaporation.

MR NETTLE: I agree with that, your Honour.

DAWSON J: Which is the passage where - - -

MR NETTLE: It is paragraph 22 at page 13. What I am directing your Honours' attention is that:

From a common sense and from a scientific point of view.....common salt (sodium chloride) is produced at Dampier and Lake McLeod when the product is harvested.....and washed. The product on the wet stockpile is already common salt and any further processing or refining by way of drainage, evaporation and working over the pile with machinery is part of the process of preparing the common salt for sale to the applicant's customers in its chosen market in accordance with the contract specification and typical specifications.

It was the elevation of the quality of the salt from common salt to a super quality which was undertaken at the dry stockpile. It is submitted that on the most basic of authorities decided by this Court, that is refinement. If turning lignite into anthracite is refinement, then turning dry and saleable salt into even better and drier salt must also, it is submitted, be refinement. What the Full Court has done is throw all that out and with it the effect of the repeal of the sweeper clauses and leave the position that there now may be included in every application for mining rebate any degree of refinement on the basis that the taxpayer says, "I want to sell into that particular market. I must refine in order to do it. Therefore, what I do by way of refinement is part of the mining operation".

KIRBY J: There is a new definition here, a new line drawn. Is it a wrong consideration to take into account that if you are not content with the line that you have unique capacity to have the line redrawn, especially if it has large fiscal consequences?

MR NETTLE: Not wrong to take into account, but may we submit this, your Honour, action was taken last year, the consequence of a number of decisions which expanded the application of the rebate scheme. It is very difficult now to conceive of what further amendment one might make in order to make clear that what was set out to be done last year has not been achieved.

KIRBY J: If the Full Federal Court decision stands then you say it has a lot of financial consequences?

MR NETTLE: Yes.

KIRBY J: It is not difficult to get Parliament to try to make the line a little bit more clear.

MR NETTLE: To try again? I do not know whether it is difficult or not with politics, but it is difficult, even if one stops to think about it, to formulate an amendment which would say, other than one means fair dinkum salt production or salt production other than the refinement of salt production or some such thing, and when one is talking about a definition like this with post stamps, as they are called- - -

KIRBY J: Your strength is you had the finding of fact, and you say with that finding you should not have had this decision on the Federal Court.

MR NETTLE: I do submit that, but I also submit that when the Commonwealth Parliament has enacted expressly amendments which are set at nought by a Full Federal Court on the basis of ignoring authority of this Court, what is yielded is a question appropriate for the grant of leave. If the Court please, that is our application.

DAWSON J: Yes, Mr Flick?

MR FLICK: We say that my friend's proposition is basically this: that the entitlement to rebate extends up to a point and not beyond, when the mining operation is incomplete. It is incomplete because, on any view of the facts, there was virtually no market into which the product could be sold. That is at the appeal book page 67. It is incomplete because, on any view of the facts, even in the dry stockpile, extraneous product was still being extracted and it is incomplete because the process in the wet stockpile and the dry stockpile was a continuous process.

What my friend wishes the Court to endorse is a proposition which says that in beneficial legislation the entitlement to rebate extends, but only for an incomplete mining process. With great respect to him, we say that the decision of the Full Court is a decision which correctly identifies the questions of law; correctly applies those principles to the factual issues - - -

McHUGH J: What about the six propositions that are set out at pages 84 to 86, do you say they are correct?

MR FLICK: They are not the application of the principles to the facts. They are obiter, and as expressed, they are correct because they are so qualified as to give rise to questions as to what factual content would ever fall within them. But, we do say they identify the legal questions correctly; they apply them to the facts correctly; this decision is essentially one as to the facts. The second point that we make is that this case does not set at nought the 1995 and 1996 amendments.

McHUGH J: But you have to read paragraph (g) as though it said the production of common salt for sale by means of evaporation.

MR FLICK: No, with great respect, not, your Honour. What this Court has consistently held is that the word "mining" is something different from and precedes - and a variety of words are used by different judges of this Court - later treatment of the product extracted. It is different from the utilisation of the product which is extracted but it extends up to the point of time at which you do have a product which is recovered from the earth.

McHUGH J: Yes, but that is one of the difficulties I have with this case as to why there is any reference to mining operations at all. Did we not hold in the ICI Case that the production of common salt by means of evaporation was not mining, and was not (g) brought in specifically to overcome - - -

MR FLICK: Precisely.

McHUGH J: Yes.

MR FLICK: That is why I have answered your Honour's question by saying the six principles at the end are obiter. They are not necessary to the decision. What is necessary to the decision is to pursue either of two routes - one route is the route travelled by Justice Lee at first instance where he adopted what, with great respect one would have thought, was the easier way home for Dampier Salt, namely to seize upon paragraph (g) - production of common salt by evaporation. That is what he found. The Full Federal Court adopted a more difficult, and with great respect, more circuitous route home, but to seize upon what constitutes mining.

McHUGH J: I would have thought your strongest point was they should have been looking only at (g) and arguement was part of the continuation of the process of the separation of the mineral.

KIRBY J: But is not that correct - given the history of the case - change of the legislation and is not that a matter that concerns the Director? He says that, "Now we've got this Full Court decision which takes on a different context and is going to be applied unless reversed in this Court and which may have ramifications outside salt mining".

MR FLICK: It may. The significant amendments made in 1995 were to delete the phrase which appeared in the old paragraph (c) and (ca), namely, "in connection with". That, of course, was a phrase which appeared in section 122 of the old tax legislation which my friend refers to. The second thing which the 1995 amendments did was to delete the reference to whether the production occurred at the place of mining or elsewhere.

It was a deliberate attempt, so my friend says, and he is right, that those amendments attempted to confine the entitlement to rebate and to potentially, although he does not put this expressly, to distinguish the tax cases, but that which remains constant throughout all of the amendments - this is what one suspects was what was motivating the Full Court and motivating the Full Court to go beyond that which was strictly necessary for them to decide, because they could have stopped at paragraph (g), as Justice McHugh points out, but what remained constant were the two phrases, namely, "mining for minerals" and the phrase, "as an integral part of the operation".

So what one has in this case is an analysis of, albeit on Justice McHugh's tentative view, an analysis which was unnecessary for the decision. What one has is the Full Court asking themself the question, "What constitutes mining?" It is the recovery of the product. It is the recovery of the product free of deleterious material, and that only occurred after it went through the dry stockpile. It is not correct, with respect to my friend, to say that this is a treatment, or utilisation of a product. You are still extracting from the product out of the ground extraneous material, and that was done by way of the electromagnet.

But you have the Full Court saying what constitutes mining, what constitutes the purpose, because the phrase is still "mining for minerals". So the commercial objective of the mining company remains relevant, and you have the Full Court directing their attention to the question as to whether it was a continuous process, whether it was an integral process. Justice Lee said that and so did the Full Court.

So, our submissions quite simply, your Honour, are these, that the propositions at the end of the Full Court judgment - the six propositions - are obiter. If one looks at the legislation, as amended, there were the two roots which either the judge, at first instance, or the Full Court could have pursued. It did have to direct its attention to the 1995 amendments. It did. It did have to exclude that which was previously eligible, namely, a process which was in connection with mining. But it found that the mining process was not complete because the product had not, at that stage, been recovered.

McHUGH J: There are still matters that are not mining operations in the strictest sense that come within the definitions, even since the 1995 amendments, are there?

MR FLICK: Yes. For example, paragraph (g) may be the best example one can give.

McHUGH J: But apart from (g), I meant are there not other ancillary operations that still come within it? Was (c) and (ca) taken out completely?

MR FLICK: They were taken out completely.

McHUGH J: Completely, yes.

MR FLICK: Now, where the room for argument is going to be, presumably, is what now falls within the phrase "as an integral part" and that which was previously "in connection with", but that is not this case. But if your Honours trace through the argument in this case from the tribunal, through Justice Lee and to the Full Court, all three forums that have looked at it have adopted processes of analysis. But at the end of the day, it is either the production of common salt by evaporation - my friend cannot be right when he says it is complete, albeit there is virtually no market into which you can sell it, and he cannot be right if what is produced is something which still contains within it deleterious material.

So, if you pursue the paragraph (g) line, the result is correct and my friend's proposition is wrong. If you pursue the Full Court's reasoning, it does correctly apply the decisions of the High Court and the Full Federal Court and reaches the like conclusions. And the only prospect of special leave would be whether the 1995 amendments had been set at nought, and we say, rather than being set at nought, they are being fully applied. With respect, your Honour, they are our submissions.

DAWSON J: Yes, Mr Nettle.

MR NETTLE: If your Honour pleases. May we direct the Court's attention very briefly to tab 1 of the applicant's books of materials, where the Court will find the definition of "mining operations" as it was before the 1985 amendment and will see, in particular, paragraphs (c) and (ca), thus sweeper clauses? That is to say, they added to the definition of "mining operations" things which were not mining operations, but which were connected with or associated with. Secondly, might we very briefly go to what was said by Justice Toohey, then President of the Administrative Appeals Tribunal? Your Honours will find that under tab 15, at page 222, second full paragraph beginning with:

Although counsel for both parties referred the Tribunal to a number of -

reasons - the next sentence is important:

The meaning of "mining operations" in the legislation under review is in some respects both wider and narrower than the meaning the phrase might otherwise bear. It is narrower because par. (a) refers only to mining for minerals and not to associated operations. But it is wider because par. -

(c) - it is a typo for (c), as one can see from the Full Court decision -

introduces other operations so long as they are connected with mining.

MR NETTLE: And that is his Honour referring to the effect of the sweeper clauses. I very briefly then go to the fact that in 1995 those sweeper clauses were taken out, ask your Honours to look at the explanatory memorandum under tab 9.

DAWSON J: The inclusion of common salt, that definition - - -

MR NETTLE: It precedes the 1995 amendments, your Honour.

DAWSON J: It has remained there.

MR NETTLE: This is now tab 9 at page 11 of the explanatory memorandum at the right side. The heading is:

Item 8 - Subsection 164(7) (definition of "mining operations")

Item 8 omits the existing definition of "mining operations" in subsection 164(7) of the Customs Act and substitutes a new definition of "mining operations".

Could I ask the Court to go to the bottom six lines of the page:

The amendment proposed by this item removes any doubt that the DFRS is a targeted scheme providing rebate of customs and excise in duty in respect of diesel fuel used in those activities that fall fully within the activities specified in the new definition of "mining operations", rather than in respect of activities that may, in a loose sense, go towards "encouraging" mining operations.

And finally - - -

DAWSON J: And seems to, in the paragraph above that line, assume that production of common salt is not a mining operation and is only artificially included.

MR NETTLE: Thank you, your Honour, I am obliged.

DAWSON J: Yes.

MR NETTLE: And finally might we direct the Court's attention to paragraph 10 to the second reading speech, to the third page of it - I believe it is unnumbered - about two-thirds of the way down the page there is a heading in bold:

Sitting suspended from midday to 12.11 pm.

Mr Lindsay having referred just before that to the removal of the "sweeper clauses", says a number of things, in the last sentence of that paragraph:

The interpretation of these `sweeper clauses' has been a main source of contention over the years, and has generated most of the litigation in the lifetime of the scheme.

The amendments proposed in items 4 and 8 of schedule 1 to the bill are to remove the subjectivity associated with the `sweeper clauses', and to replace those clauses with an objective list of activities that are eligible for rebate.

I go over the page:

It should be noted that, although the proposed amendments will necessarily narrow the range of activities for which rebate is payable, farmers and miners will generally be unaffected. The intention of these amendments is to put beyond doubt that the scheme is not meant to provide rebate eligibility for activities which are not sufficiently connected with mining or agriculture;

Now, your Honours, it is submitted that before this decision of the Full Federal Court, it was clear as a matter of authority of the Full High Court and of what Mr Justice Toohey had correctly interpreted, that mining activities - that is to say, mining for minerals and mining operations - do not go beyond recovery. What is beyond recovery is refinement. It is submitted that this Parliament has enacted legislation on the faith of that and it has been frustrated by what the Full Federal Court has done.

McHUGH J: This legislation survived the last budget, did it not?

MR NETTLE: Yes it did, but there was a technical amendment made in 1996 proposed by the - it makes no relevant difference. If the Court please.

DAWSON J: What is involved in this application is the definition of "mining operations" in section 164(7) of the Customs Act 1901 (Cth), which includes in paragraph (g), "the production of common salt by evaporation". The conclusion reached by the court below that the process of producing common salt continues until the dry stockpile stage, was reached by reference to the particular nature of the process of harvesting salt and is not attended with sufficient doubt to warrant the granting of special leave to appeal. The fact that the Full Court of the Federal Court may, in its reasoning, have gone beyond what was necessary to reach its conclusion is not, in the circumstances, sufficient to justify special leave to appeal. Special leave is accordingly refused.

MR FLICK: Your Honour, we seek costs.

DAWSON J: Do you say anything about that, Mr Nettle?

MR NETTLE: No.

DAWSON J: Refused with costs.

AT 12.32 PM THE MATTER WAS CONCLUDED