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High Court of New Zealand Decisions |
Last Updated: 24 September 2018
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
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CIV-2017-404-2831
[2018] NZHC 2309 |
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UNDER
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the Judicial Review Procedure Act 2016 and section 27 of the New Zealand
Bill of Rights Act 1990
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IN THE MATTER OF
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an application for judicial review
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BETWEEN
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HEINZ WATTIE’S LIMITED
Applicant
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AND
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THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT
First Respondent
THE MINISTER OF COMMERCE AND CONSUMER AFFAIRS
Second Respondent
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Hearing:
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20 August 2018
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Counsel:
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S J M Mount QC, K Anderson and K E Morrison for applicant V E Casey QC and
N T Butler for respondents
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Judgment:
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4 September 2018
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RESERVED JUDGMENT OF DOBSON J
HEINZ WATTIE’S LTD v THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2018]
NZHC 2309 [4 September 2018]
Contents
Scope of natural justice obligations [24]
Materiality of the new materials [39]
Analysis of intent of the Spanish preserved peach industry [48]
Other considerations justifying inadequate notice [58]
MBIE’s system meant that HWL should have asked [60]
Obligation to advise HWL inconsistent with international standards [65]
180 day time limit constrained opportunity for further submissions [67]
Second round for opposing interests also required? [74]
Introduction
[1] On 23 February 2017, the first respondent (MBIE) produced a report recommending that an anti-dumping duty on preserved peaches imported from Spain, which was due to expire, should not be continued. The second respondent (the Minister) approved the recommendation and decided, consistently with the report, that the anti-dumping duty should be terminated from 1 March 2017.
[2] The applicant (HWL) is the sole domestic producer of preserved peaches and was the applicant for the review process undertaken by MBIE. HWL contended that the anti-dumping duty, which had been in place since 2011, should continue rather than lapse after the five year period for which such duty applies. In this judicial review, HWL now challenges the lawfulness of the review process which led to the report.
[3] On 30 January 2017, MBIE had released an interim report on its review, which concluded that the anti-dumping duty should continue. Thereafter, MBIE received additional materials from the European Commission (EC) which, together with further data produced by MBIE’s research, were relied on in producing the final report on 23 February 2017. That report made the contrary recommendation that the anti- dumping duty should not be continued. MBIE did not draw HWL’s attention to the new materials.
[4] The essence of the judicial review is that MBIE’s process between the issue of its interim and final reports breached natural justice obligations owed to HWL to afford it an opportunity to respond to the materials adverse to HWL’s position. Arguably, HWL was deprived of any opportunity to make a submission to the decision-maker about the new material.
[5] A secondary criticism is that MBIE’s final report analysed the intent of the Spanish preserved peach industry as a factor relevant to whether dumping activity would occur if the anti-dumping duty was no longer in place. HWL had not been given any warning of such an assessment, and submitted that the intent of the Spanish producers could not be reliably ascertained and should not have been taken into account.
The statutory regime
[6] At the time of the review process leading to the interim and final reports, the relevant act was the Dumping and Countervailing Duties Act 1988 (the Act).1 The Act gives effect to arrangements agreed under the World Trade Organisation Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the WTO Agreement).2 As an exception to commitments to reduce tariffs on international trade, the WTO Agreement provided for a process by which jurisdictions which are signatories to it may impose anti-dumping or countervailing duties where justification for such measures has been made out. The provisions in the Act reflect the arrangements contemplated in the WTO Agreement without adopting the wording used in that agreement.
[7] The process for considering imposition of an anti-dumping duty is set out in s 10 of the Act. The process is initiated by an application on behalf of New Zealand producers of like goods to the chief executive of MBIE to conduct an investigation to determine both the existence and effect of any alleged dumping or subsidisation of any
goods.3 Such an application is required to be “properly documented”, with specified mandatory content comprising evidence of dumping or subsidisation, injury to the New Zealand industry, and a causal link between the two.4 A properly documented application must also provide such information as is reasonably available on 19 other topics likely to be relevant to the investigation.5
[8] The chief executive must be satisfied that sufficient evidence has been provided of the existing or intended dumping and material injury caused by it. If so, the chief executive may initiate an investigation to determine the existence and effect of the alleged dumping or subsidisation of goods. The chief executive is not to initiate an investigation unless it is supported by New Zealand producers representing 25 per cent or more of the total production of like goods, and the producers of more than 50 per cent of the total production for domestic consumption have indicated in writing either support for or opposition to the application.6
[9] In determining whether any material injury to an industry has been or is being caused, or is threatened, s 8 of the Act requires the chief executive to examine the volume of imports of dumped or subsidised goods, the effect of the dumped goods on prices for like goods in New Zealand, and the consequent impact on the relevant New Zealand industry. As with s 10, s 8(2) then adds a further list of considerations that the chief executive is to take into account in determining material injury.
[10] Before initiating any investigation under s 10, s 10(9) requires the chief executive to notify the government of the country from which the relevant goods are exported of the proposed investigation.
[11] Section 10(6) of the Act provides:
(6) The Secretary, after initiating an investigation pursuant to subsection (1), shall ensure that all interested parties to the investigation are given reasonable opportunity—
4 Section 10(2)(a).
5 Section 10(2)(b).
6 Section 10(3).
(a) to present in writing all evidence relevant to the investigation, and, upon justification being shown, to present such evidence orally:
(b) unless the information may be withheld under the Official Information Act 1982, to have access to all non-confidential information relevant to the presentation of their case and that is used by the Secretary in the investigation, and to prepare representations on the basis of that information:
(c) on request being made, to meet those parties with adverse interests in order to present opposing views.
[12] By s 10A of the Act, the chief executive is required to give all parties to the investigation written advice of the essential facts and conclusions that will likely form the basis for any final determination. Although s 10A does not in terms require an interim report, that is the form in which MBIE complied with s 10A in this case. I understand this is its usual practice. The step is required within 150 days of initiating the investigation. Then, within 180 days of initiation, the final determination is to be made by the Minister as to whether the goods are being dumped and whether, by reason thereof, material injury has been or is being caused to, or is threatened against, an industry.7
[13] If the final determination produces a positive finding, then the Minister may impose an anti-dumping or countervailing duty under s 14. The period for which such a duty can be imposed is five years.8
[14] The prospect of extending the period in which any anti-dumping duty is imposed is addressed in s 14(8) in the following terms:
(8) The Secretary may, on his or her own initiative, and shall, where requested to do so by an interested party that submits positive evidence justifying the need for a review, initiate a review of the imposition of anti-dumping duty or countervailing duty in relation to goods and shall complete that review within 180 days of its initiation.
[15] If such a review is undertaken (they are generally referred to as “sunset reviews”), then the anti-dumping duty continues to apply until the review is
7 Section 13.
8 Section 14(9A), except goods from Singapore, where the period is three years.
completed.9 This provides for continuity in those cases where a review determines that the anti-dumping duty should continue to apply. On the respondents’ view of the statutory scheme, the fact that initiation of a review extends the period for which the anti-dumping duty applies creates an imperative for timely completion of the review within the 180 days stipulated in s 14(8). That pressure is not present in an original investigation under s 10, where the goods that may become subject to an anti-dumping decision and imposition of duty are, at the time, able to be imported free of any such duty.
The factual background
[16] Because HWL is the only processor of preserved peaches in New Zealand, it comprises the New Zealand industry for such goods. In 2009, a five year term for a countervailing duty on imports of preserved peaches from the European Union (EU) came to an end. In November 2010, HWL applied to what was then the Ministry of Economic Development, seeking an investigation into the dumping of preserved peaches from Spain. That resulted in a finding that an anti-dumping duty was justified and such a duty was imposed for a five year term from August 2011.
[17] In July 2016, the month before that duty was due to expire, HWL applied to MBIE to initiate a sunset review under s 14(8) of the Act. The positive threshold was made out and MBIE began its review on 4 August 2016. MBIE sought further information from HWL and there were numerous exchanges between them, including provision of further information by HWL on 30 September 2016 and a verification visit to HWL’s Auckland premises on 26 October 2016.
[18] On 30 January 2017, MBIE issued its interim report, which recommended the continuation of the duty and sought comment from interested parties by 10 February 2017.
[19] On 10 February 2017, the EC filed a three page submission which questioned the adequacy of the evidence for the provisional findings recorded in the interim report. The submission made the point that trade defence measures against various
9 Section 14(9).
countries had been in place for 20 years, which shielded the New Zealand industry from any competition. It also pointed out that imports from China and South Africa in much more significant volumes than from Spain were also undercutting New Zealand prices. The EC’s submission made reference to a 2016 report by the Centre for the Promotion of Imports from Developing Countries into Europe, or CBI, an agency of the Netherlands Ministry of Foreign Affairs (the CBI report).
[20] MBIE personnel undertook their own further research, including consideration of a report from the United States Department of Agriculture (USDA report) on world markets and trade in relation to fresh peaches and cherries. Each of these fresh items was referred to in MBIE’s final report, which was issued on 23 February 2017. The report found that if the anti-dumping duty was not continued there was likely to be continuation of dumping, but there was insufficient evidence to say that it would be likely to occur at volumes that would cause material injury to the New Zealand industry (that is, HWL).
[21] HWL did not check with MBIE in the period leading up to the deadline of 10 February 2017 as to whether further submissions had been received from interested parties. Had they done so, MBIE operates an arrangement for electronic distribution of such materials under the somewhat inappropriately named “public file”. Restricted access to such material, via the internet, is made possible for interested parties who request it.
[22] There is a difference between the parties as to the utility of any request that HWL might have made to access new submissions filed with MBIE because of the time MBIE was likely to have taken to post the new materials to its public file once HWL had made the request. Several months after the final decision, HWL made such a request. MBIE took approximately one month to update the content of the public file. However, Ms Casey QC submitted for the respondents that was not representative of the time MBIE would have taken to update the file during the investigation. The work was accorded a much lower priority once the investigation had been completed and the Minister’s decision made.
[23] HWL thereafter commenced this judicial review on 30 November 2017. In defending the allegations of inadequate process, MBIE argues that it was for HWL to ask if further submissions had been received, that HWL was very experienced at dealing with these processes, and that conformity with the international standards required in the WTO Agreement would preclude any relief that required the investigation process to be repeated.
Scope of natural justice obligations
[24] As with all components of natural justice obligations, the extent of a decision- maker’s obligation to inform interested parties of relevant information it has received, and to afford opportunities to comment on it, is intensely context-specific.10
[25] For the applicant, Mr Mount QC relied on a number of cases in which the decision-maker received and relied on new material after consulting with interested parties. From a relatively early High Court decision considering the process adopted by the Commerce Commission, he relied on the following obiter observations:11
We recognise that the procedure which the commission normally follows, ie the circulation of a draft determination inviting responses, and the holding of a conference of the interested parties at which evidence and submissions in response to the draft are received, goes a long way towards meeting the requirements of fairness. But the commission must always be alert to ensure that the fairness encouraged by that procedure is not undermined by what occurs thereafter. In other words the procedure to that point does not necessarily exhaust the requirements of fairness. It may be necessary to go further by ensuring that any matter of substance which may then emerge and which is likely to be material to the final determination is made known to the applicant or principal participant with an opportunity for reply. In the end it is a matter of degree, weighing the practicalities of the sometimes tight time restraints under which the commission must operate against the importance of the material involved. While basic fairness must be preserved the desire to conform to the niceties may have to be tempered by the need for an urgent commercial solution, bearing in mind at the same time, that the issues to be resolved, at least in a merger situation, are not so much the resolution of legal rights between adversaries as the less precise task of weighing private commercial interests against those of the public, of which the commission is in a sense the guardian.
Ultimately the commission must stand back and ask itself whether the use it is intending to make of a particular idea or item of evidence is fair, without
10 Daganayasi v Minister of Immigration [1980] 2 NZLR 130 (CA) at 141.
first inviting a response from those whom it might affect. We apprehend a useful test might be for a tribunal such as this to ask itself if it is satisfied that its decision on the point would have been the same without adopting that idea or item of evidence. If the new material is merely a make-weight to reinforce an otherwise supportable conclusion, the exigencies of the commission’s procedures and the need for a prompt result may justify no further reference. But if the new material is the only means by which a particular conclusion could be reached then to do so without reference is likely to result in unfairness or, which is equally undesirable, in a reasonable apprehension of unfairness.
[26] Mr Mount also invited analogy with the reasoning in Contact Energy Ltd v Electricity Commission.12 In that judicial review, the Electricity Commission was preparing a methodology for Transpower to allocate its revenues among its customers. Participants in the electricity industry would be impacted in different ways depending on the methodology adopted. After consultation had occurred, the Electricity Commission moved from a previous provisional view to a methodology that had arguably not been in contemplation.
[27] The issue was whether the change in approach was sufficiently material to require a further round of consultation. Recognising that the scope of obligations would be determined on the particular facts of the case, MacKenzie J found that options adopted by the Electricity Commission after it had consulted had not been “on the table” when submissions were received.13 The fact that a consulter modifies its view as a result of a consultation process does not mean that a further round of consultation must always be undertaken. It is a question of the relative significance of the change that occurs between consultation and the final decision.14 The relative tightness of a timeframe to which the decision-maker is subject may be relevant, but it does not justify depriving applicants for review of the opportunity of consultation that would otherwise be required.15
[28] More recently, in a judicial review challenge to the process adopted by the board of inquiry into the proposed Ruataniwha water storage scheme in Hawke’s Bay,
12 Contact Energy Ltd v Electricity Commission HC Wellington CIV-2005-485-624, 29 August 2005.
13 At [29].
14 At [30].
15 At [33].
after reviewing both New Zealand and United Kingdom decisions, Collins J observed:16
[120] ... There can be no doubt a decision-maker must re-consult if the final decision differs in a fundamental way from the decision which was indicated at the time of consultation. However, some New Zealand decisions suggest the duty is engaged at a lower threshold. For example, in Air New Zealand Ltd v Nelson Airport Ltd Miller J found that further consultation might have been required if advice contained in a report already in the decision-maker’s possession differed in a “material[ly] adverse way”.
[29] Mr Mount also cited the observation of Professor Joseph in his text on constitutional and administrative law, where the learned author observes:17
The dissemination of draft decisions operates as a form of public law estoppel, that the final decision will contain nothing materially new. A decision that includes some new point, material to the outcome of the case but not put to the parties, will invite judicial review.
[30] The proposition that an estoppel arises may be a reasonable reflection of a number of New Zealand decisions but, with respect, it risks overstatement when expressed without qualification. The materiality of the difference in outcome inevitably involves questions of degree. Other influences operating on the decision- maker, such as constraints on the decision-maker’s process and the relative importance of the issue on which a different view is expressed, may determine whether natural justice requirements oblige the decision-maker to re-consult.
[31] Ms Casey emphasised that context is everything. The scope of obligations must reflect the statutory scheme, including time constraints. She cited the assessment of a statutory decision-making process involved in New Zealand Fishing Industry Association Inc v Minister of Agriculture and Fisheries.18 That litigation related to the scope of an obligation on the Ministry of Fisheries to confer when considering annual variations to resource rentals payable in respect of fishing quotas. In the High Court, McGechan J considered the process set out in s 107G(6) of the Fisheries Act 1983, which required the Minister to advise persons concerned and invite them to make
submissions within a defined time period. The relevant provision was in the following terms:
(6) Before making any recommendation under subsection (1) of this section, the Minister shall advise the Fishing Industry Board and such other persons or organisations as the Minister considers appropriate, of the proposed recommendation and the reasons for it, and shall invite the Board and the persons and organisations (if any) to make submissions to the Minister in respect of the recommendation before such date, being not less than 28 days after the date of the Minister’s advice as to the proposed recommendation, as the Minister may specify.
[32] McGechan J considered that this was not “consultation”:19
A “consultation”, as recognised elsewhere in the Act, may involve one action of inquiry and one of response, but just as easily can involve an ongoing dialogue over a protracted period. I refer to the remarks of Morris J in Fletcher v Minister of Town and Country Planning:
Consultation may often be a somewhat continuous process and the happenings at one meeting may form the background of a later one.
I have little doubt s 107G(6) was drawn specifically to avoid that risk. The Minister was tied into a scheme which involved only one variation per fishing year, necessarily before 1 October. He was not to be forced past this deadline by some never-ending “consultation”, perhaps deliberately protracted. There would be one notification and one finite opportunity to answer: no more. That scheme does not necessarily entitle the Minister to ignore relevant considerations coming to his attention subsequently, under general principles of administrative law, but compliance is sufficient to meet the statutory procedural requirements.
[33] This analysis was expressly adopted by Cooke P in the Court of Appeal’s decision upholding McGechan J.20
[34] Ms Casey also invited analogy with the approach in Australia. The scope of a party’s entitlement to be heard drew the following comment:21
The case is not one in which the legislature is silent as to the right to be heard, so that the common law can fill the void. The legislature has addressed itself to the very question and it is not for the Court to amend the statute by engrafting upon it some provision which the Court might think more
19 New Zealand Fishing Industry Association Inc v Minister of Agriculture and Fisheries
HC Wellington CP649/87, 11 August 1988 at 40 (citations omitted).
21 Brettingham-Moore v St Leonards Municipality [1969] HCA 40; (1969) 121 CLR 509 at 524 per Barwick CJ.
consonant with a complete opportunity for an aggrieved person to present his views and to support them by evidentiary material.
[35] Ms Casey emphasised that the statute provides for an investigative process leading to an administrative decision. There is no inter-partes determination of rights and these features arguably lessen the standard to which natural justice obligations should apply.
[36] Further, the international obligations New Zealand has assumed pursuant to its membership of the WTO commit it to promoting lowered trade barriers and free trade. Those commitments require a threshold to be met (in this case of dumping activity causing material injury) before the exception to free trade represented by an anti- dumping duty can be justified. These international obligations require domestic interests seeking an anti-dumping duty to discharge a positive onus that dumping is occurring and that it is causative of material injury. On the respondents’ characterisation of the system, that onus must be required when local industries seek to initiate an investigation, and in making out the grounds for an anti-dumping duty.
[37] On the basis of the authorities reviewed, I treat the basic test as requiring a decision-maker to afford an interested party a further opportunity to make submissions where the decision-maker has received material relevant to a proposed changed outcome, after it has indicated a provisional stance to the interested parties. If the proposed outcome would not have changed without reliance on the new material, then interested parties will arguably be deprived of an adequate opportunity to make submissions. On the other hand, if the change in outcome between an interim and final determination was in prospect without the new material, which is no more than corroborative of reasoning that was in contemplation, then a further round of consultation is unlikely to be required.
[38] Compliance with a procedure specified in statute or some other controlling source may not be sufficient in every case to discharge obligations to afford adequate consultation opportunities. Circumstances that are likely to influence the scope of the obligation to afford a further opportunity to interested parties will include:
- relatively how vital or acute the interested party’s interest is in the outcome;
Materiality of the new materials
[39] The written submissions for the respondents accepted the materiality of the new materials that were considered by MBIE and were adverse to HWL’s interests. In her oral submissions, Ms Casey suggested that materiality of all these sources should not be assumed. The respondents’ submissions contended that HWL had conceded in its submissions that the USDA report was not significant in MBIE’s analysis. That somewhat overstates HWL’s position, although it did attribute less materiality to the USDA report. Mr Jules Croft, a trade adviser with approximately 30 years’ experience in trade measures, completed two affidavits in support of the application for judicial review. He was not otherwise relevantly engaged by HWL and gave evidence as an expert. Mr Croft made the point that the fall in production of fresh peaches in 2017 due to unfavourable weather (which was acknowledged in the final report) arose in a different market, and that a drop in the volume of fresh peaches in the market does not necessarily lead to a drop in the volume of preserved peach production, which appeared to be constant. The report cites the USDA report as implicitly affording a measure of corroboration for the argument in the EC submission to the effect that preserved peach production was expected to decrease.
[40] Ms Casey submitted that the range of potential outcomes of the review that ought to have been in the minds of interested parties should have taken into account
the onus that had to be discharged in establishing existing or intended dumping, and that such dumping is causing, or would cause, material injury. The latter is not an onus that can be discharged readily. To lower the standard of proof would be to compromise New Zealand’s international obligations.
[41] Given the existence of that onus, Ms Casey submitted that MBIE is entitled to expect that interested parties in HWL’s position will remain vigilant until the end of the process, appreciating the risk that MBIE might be confronted with other information that challenges the sufficiency of evidence to discharge the onus on both points. In this case, that was the difference between the outcome foreshadowed in the interim report, and the final outcome. There was insufficient evidence of material injury.
[42] A comparison of the interim and final reports clearly suggests that the reasons for the contrary conclusions in the final report were materially contributed to by the new materials. I note that Dr Peter Crabtree, the general manager of Science, Innovation and International at MBIE, who signed off the report to the Minister, has deposed:
I recall discussing the European Union submission with the Team and the implications of the new information in that submission, in light of the tests that MBIE was applying under the Act and the balance of the evidence.
[43] That acknowledges that the new materials were relatively important. The EC submission did not explicitly argue for the opposite conclusion to that in the interim report. Rather, it firmly reminded the New Zealand Government of the importance of being satisfied that the evidentiary onus had been made out. The EC submission invited a different perspective on the likely scale of imports of Spanish preserved peaches, and the relative importance the projected modest volumes of imports would have in creating a risk of material injury for the New Zealand preserved peach industry.
[44] A reasonable decision-maker in the position of the MBIE officers responsible for preparing the reports could be expected to approach the assessment of whether HWL had made out the onus on the two critical issues somewhat differently between the interim and final reports. However, the tests on the adequacy of evidence ought
only to accommodate a relatively modest difference of degree. If the prospect of applying a different evidentiary test in the final report was in prospect, interested parties could reasonably expect that to be flagged in the interim report.
[45] As it was, the conclusion to the Executive Summary in the interim report was stated as follows:
MBIE concludes that if anti-dumping duties are removed it is likely that dumping will resume and this will likely cause a recurrence of material injury to the New Zealand industry. On this basis, MBIE has further concluded that anti-dumping duties should be continued.
[46] In contrast, the conclusion to the Executive Summary in the final report was as follows:
The Spanish industry may, over longer timeframes, have the capacity and intention to resume exports into New Zealand in volumes that would be significant relative to New Zealand production and consumption (market size). However, based on the lack of positive evidence available to it MBIE is not able to conclude that it is “likely” that the Spanish industry will resume exports to New Zealand at quantities sufficient to cause material injury to the domestic industry.
[47] I am satisfied that the difference in conclusion between the interim and final reports would not have occurred without the MBIE analysis taking into account the EC submission and its references to the CBI report, plus the USDA analysis identified in MBIE’s further research. From a comparison of the reasoning in the two reports, the new materials are reasonably seen as game changers in the sense that a contrary conclusion in the final report would not have been arrived at without them.
Analysis of intent of the Spanish preserved peach industry
[48] The other element of the analysis in the final report that is allegedly new and unheralded is the projection as to the likely intentions of the Spanish preserved peach industry for exporting products to New Zealand. Mr Mount submitted that no warning was provided to HWL, in the interim report or otherwise, that an assessment of intent would assume relevance. He further submitted that consideration of such intent was taken into account wrongly.
[49] In Mr Croft’s experience, he has not observed any previous decisions in which MBIE has relied on intent. Mr Croft doubted that the intent of an entire industry, as distinct from an individual exporter, could be ascertainable. Making an abstract assessment of intent is therefore neither a relevant nor workable concept in considering the likelihood of dumping by the industry that would cause material injury in New Zealand. Mr Croft opined that, had HWL been given warning that MBIE would rely on some concept of intent, it could have produced effective counter-arguments.
[50] Ms Casey’s response to this criticism was that reference to matters of intent was not new in the final report, and that the same line of reasoning was alluded to in the interim report. In any event, in the absence of an allegation that reliance on it constituted an error of law, it was not an error by MBIE to refer to it in the final report. Internationally, WTO jurisprudence supposedly acknowledges the concept of intent to export to a particular market as well as capacity to do so.
[51] None of the relevant criteria in the Act contemplate that an investigation will attempt to assess the intent of an exporting industry in the jurisdiction being considered. In prescribing the nature of the inquiry as to the existence of material injury to the New Zealand industry, s 8(1) directs that regard is to be had to “the dumping or subsidisation of goods imported or intended to be imported”.
[52] I treat “intended” in that phrase to mean “planned” so that the relevant inquiry takes into account goods that have been imported into New Zealand or which can be identified as allocated or intended for subsequent import. In that sense, it does not involve an inquiry about intentions of participants in the industry as to where they plan to market future production.
[53] No doubt in some contexts, marketing intentions of a country’s particular industry will be ascertainable through, for example, published comments. In other circumstances, however, there will be no evidence from which to discern an objective intention of an industry. I accept Mr Croft’s opinion (in the absence of such an objectively disclosed intention) that the unarticulated and potentially diverse intentions of the participants in an industry such as the Spanish preserved peach
industry are unlikely to yield reliable evidence about the volume and pricing of future exports to New Zealand.
[54] In the final report, it appears that all but one of the references to intent are coupled with the concept of capacity. The capacity for the Spanish preserved peach industry to export to New Zealand is able to be assessed by various forms of data available, albeit with varying levels of reliability. If “intent” contemplates the unarticulated plans of diverse exporters in Spain, then questions would arise as to the reliability of whatever sources were relied upon to form a view on such intent. However, if it contemplates intent as discerned from or influenced by perceived capacity, then that could be relevant to the assessment without such questions arising.
[55] Ms Casey referred to passages in the interim report where the analysis touched on matters such as the propensity of Spanish production to be exported to New Zealand, projections that Spanish producers will seek to supply additional export markets such as New Zealand, and that markets such as New Zealand would be an attractive proposition to Spanish exporters. When the concept of the intent of an industry is assessed in the context of its capacity to sell to a particular export market, these aspects of the analysis in the interim report do raise considerations that are loosely synonymous with matters of intent.
[56] The issue here is not whether MBIE erred by having regard to an irrelevant consideration. The issue is whether it has changed its analysis between the interim and final reports by adding a discrete factor that HWL was not given warning of and which it might be expected to have challenged. In addressing that question, I am not persuaded that matters of intent had been inadequately foreshadowed in the interim report. Nor am I satisfied that adding matters of intent was sufficiently material to the different outcome in the final report as to have status as a matter that enabled the converse outcome to be reached.
[57] I accordingly come back to the relative materiality of the other matters taken into account for the first time in the final report and of which HWL did not have notice. From a comparison of the relevant parts of the two reports, I am satisfied that the opposite conclusion reached in the final report could not have been logically arrived
at without material reliance on the new materials that were not made available to HWL. It is inappropriate to express any view on the merits of the competing views on those topics, but on the affidavit evidence I am also satisfied that there is a reasonable prospect that an opportunity afforded to HWL to counter the new material could not be dismissed as having no influence on the final outcome.
Other considerations justifying inadequate notice
[58] A finding that the opportunity to respond afforded to HWL was inadequate in the circumstances of this case leads to the issue of whether there are any countervailing interests that justified the absence of an opportunity to respond to the new material.
[59] Four issues arise:
(a) first, whether MBIE’s system was sufficient so that an onus would rest on HWL to ask for any fresh materials to be identified leading up to, or immediately after, the 10 February 2017 deadline;
(b) second, whether HWL’s expectation that it would be advised of the new materials is inconsistent with international standards;
(c) third, whether the 180 day time limit was sufficiently important to constrain what would otherwise be the extent of the opportunity that should be afforded to HWL; and
(d) fourth, and related to the third issue, whether, if a second round of consultation was invited from HWL, even-handedness would require MBIE to then refer HWL’s submission in response to the new EC submission back to the EC for it also to be given a second opportunity.
MBIE’s system meant that HWL should have asked
[60] MBIE defended the adequacy of its system for communicating submissions lodged by other parties. This contemplates that interested parties will enquire about
further information MBIE had received. The further information would then be placed on the public file in response to any such request. I am not persuaded that these arrangements were sufficient to discharge MBIE’s natural justice obligations in the present case where new material received since the interim report was being relied on to produce a contrary outcome.
[61] At a practical level, there is some doubt as to the efficacy of leaving the initiative with an interested party to enquire. The facts here demonstrate that any request made up to the deadline for submissions on 10 February 2017 would probably not have identified the new materials that were received on that last day and then relied on within a short time frame by MBIE. Further, it took MBIE substantially longer to post the new materials to the public file that were relied on when requested some months later. That may have been atypical because of the low priority attributed to it. However, that cannot justify any assurance that a request from HWL on or about 10 February 2017 would have been accorded sufficient priority for HWL to get access via the public file to the new materials within a day or two. Such circumstances suggest that providing new information to an interested party by a process that left the initiative with the interested party to enquire would be haphazard and, in the present situation, inadequate.
[62] It is instructive to compare the terms in which the interaction with interested parties is to occur on the present investigation, with the statutory language used in New Zealand Fishing Industry Association.22 Section 10(6) addresses the process for an original investigation undertaken under that section, but it is common ground that materially the same process is to occur in a sunset review conducted under s 14. Those conducting the investigation are to afford a reasonable opportunity for interested parties to present all evidence in writing, with the additional prospect of presenting evidence orally. MBIE is to afford access to all non-confidential information that is relevant to the presentation of the case for interested parties and that is used by MBIE in the investigation, affording an opportunity for the interested parties to prepare representations on the basis of that information. Unlike the narrower requirement for advice of intended steps in the fisheries context, s 10(6) clearly contemplates
consultation, including the prospect of conveying information on more than one occasion where the information has not previously been conveyed and is to be used by MBIE in its review.
[63] Section 10(6)(b) casts the obligation in terms that MBIE has to afford access to information for interested parties (rather than an obligation “to advise” interested parties). However, I do not accept that statutory language means it would necessarily be adequate for MBIE to respond, only when asked for access to new materials by an interested party. At least in circumstances such as the present, affording access to new information that is to be used by MBIE when asked does not discharge the process obligation imposed.
[64] I am accordingly satisfied that there was an onus on MBIE to bring the new materials that were relevant to its change of view to the attention of interested parties, including HWL.
Obligation to advise HWL inconsistent with international standards
[65] The WTO produces analytical papers on the application of various articles in the WTO Agreement. Ms Casey relied on a January 2018 analytical index on art 6 of the WTO Agreement that addresses the evidentiary process in anti-dumping investigations. In commenting on a provision in the article that provides “evidence presented ... by one interested party shall be made available promptly to other interested parties”,23 the commentary cited a WTO panel report which found that regular access to the file maintained by the investigating body would be sufficient to satisfy the obligation to make information promptly available.24 Arguably, as an experienced participant in such investigations, HWL could be attributed with awareness of the international standard.
[66] I am not satisfied from the limited context provided in the WTO commentary that the finding in the specific case cited is of general application to circumstances such as the present. Even if it were, I am not satisfied that the standards expected by
23 WTO Agreement, above n 2, art 6.1.2.
New Zealand courts in domestic challenges need to defer to different standards apparently applied by an international trade body.
180 day time limit constrained opportunity for further submissions
[67] The respondents argued that the statutory scheme required a tight turnaround for submissions subsequent to issue of the interim report, and completion of the review. Adopting the process under s 10A requiring an interim report within 150 days, and the constraint in s 14(8) requiring a sunset review to be completed within 180 days, means that this turnaround is to occur within 30 days. That statutory imperative, intended to be consistent with WTO standards, could not contemplate a second round of submissions because the time would be too short for meaningful involvement by interested parties. Ms Casey instanced other circumstances in which there might be a range of parties comprising the New Zealand industry, and interested parties overseas including governmental agencies and businesses that might require expert assistance to engage in the process. In some cases, language may be an issue. Arguably, HWL’s claim that it could have responded with a further submission at very short notice should not dictate the expectation for consultation when its position is quite different from many others that MBIE deals with.
[68] In addition, Ms Casey emphasised that the statutory requirements at the interim stage were not for a full draft of reasons and conclusion. Rather, s 10A requires “written advice of the facts and conclusions that will likely form the basis of any final determination”. Ms Casey submitted that the investigative and decision-making processes are similar to those considered in the fishing industry judicial review.25 MBIE is therefore obliged to have regard to the range of views of all interested parties, but in the end is required to reach a decision against the statutory criteria without necessarily resolving the positions of competing interests after receipt of more than one submission from each. She submitted that the statute does not require any second round of submissions and arguably the timeframes contemplate that it will not occur.
[69] Ms Casey accepted that if the review process extends beyond the 180 day limit in the statute, that does not render the resulting decision unlawful. However, the respondents did not accept the inference HWL invited from the record of time periods involved in previous investigations that it was appropriate to exceed the statutory time limit in any case where the exigencies of a proper process required it.
[70] The respondents’ submissions included a schedule of the 48 trade remedies investigations undertaken by the responsible ministry since 2000. Of the 48 investigations, six were completed beyond the 180 day time limit. Three of those six were 181 days, with the others being completed in 189, 194 and 201 days. The three longest investigations were all original investigations under s 10 of the Act, assessing whether there was evidence of past dumping causing material injury in circumstances where no duty had been imposed whilst the investigation was underway. Ms Casey suggested that the imperative to complete a sunset review on time was greater because an anti-dumping duty continued to apply until the sunset review had been concluded.
[71] However, the international commitment made is not as definitive as the respondents suggest. The relevant article in the WTO agreement specifies:26
Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review.
[72] Mr Mount argued that the individual circumstances of the previous investigations were not directly relevant. The point was that non-compliance with the statutory 180 day limit was not fatal, and that the interests of all involved in the process were better served if an adequate process that discharged natural justice obligations was provided within any sunset review, rather than risking the prospect of it having to be done again.
[73] I agree with Mr Mount on this point. The time limit is certainly more than a best endeavours aspiration. New Zealand has elected to impose a tighter time constraint in s 14(8) of the Act than the international standard contemplated in the WTO Agreement. Having represented that commitment to all other signatories to the
26 WTO Agreement, above n 2, art 11.4.
WTO Agreement, MBIE is obliged to commence and complete such investigations within 180 days unless extenuating circumstances require it to go beyond that period. That MBIE was not in a position to comply because of the time limit is not a sufficient answer to HWL’s complaint of breach of the obligations.
Second round for opposing interests also required?
[74] Ms Casey submitted that if MBIE had provided the new materials to HWL and invited a prompt comment from them, then to the extent that any new HWL comment contradicted matters in the new materials, MBIE would be obliged to afford a further opportunity to those other interests (essentially the EC).
[75] I am not satisfied that such requirement would necessarily be triggered. It cannot be ruled out and each case must turn on its own facts. However, that prospect does not arise as a sufficient excuse for not providing HWL with notice of the new material that was being relied on by MBIE to reverse the outcome HWL thought was likely to occur. HWL was the applicant for review, and whilst it could not treat MBIE as in any sense bound to adhere to the analysis in its interim report, in the present circumstances it had a different interest to those who submitted, after the interim report, that MBIE had insufficient evidence for the conclusions it had indicated at that stage.
Relief
[76] If a material procedural deficiency is made out, HWL sought a declaration that the final report was prepared in breach of natural justice. In addition, it sought the quashing of the Minister’s 1 March 2017 decision to terminate the anti-dumping duty on preserved peaches from Spain with a direction that MBIE carry out a fresh s 14 review in compliance with natural justice. This should include preparation of a further briefing for the Minister.
[77] Where a material breach of the natural justice obligations on a decision-maker is made out, the discretion in respect of granting relief will not lightly be exercised against doing so.27 However, there are a number of issues to be considered.
[78] The respondents firmly resist any relief beyond a declaration, arguing that the Court lacks jurisdiction because any direction to reconsider would be inconsistent with the international commitments made by New Zealand in the WTO Agreement. Alternatively, such relief is not provided for under the Act, or is not warranted in light of the disruption to the interests of others that would be caused by a further review being undertaken. The respondents also raised the delay of nine months in HWL commencing its application for judicial review as disentitling conduct.
[79] Ms Casey cited the Court of Appeal’s observation on remedies in Air Nelson Ltd v Minister of Transport:28
In considering whether to exercise its discretion not to quash an unlawful decision or grant another remedy, the court can take into account the needs of good administration, any delay or other disentitling conduct of the claimant, the effect on third parties, the commercial community or industry, and the utility of granting a remedy.
[80] A further s 14 sunset review is certainly not a contingency provided for in the Act. For instance, would an order requiring a sunset review to be undertaken afresh trigger the retrospective restoration of the anti-dumping duty for the period of some 18 months by application of s 14(9)(b) of the Act? Mr Mount conceded that HWL would not press for a review to occur on those terms.
[81] Ms Casey argued that any requirement to conduct a further review led to the prospect of an anti-dumping duty being imposed in circumstances that are outside those in which New Zealand has agreed to confine itself under the WTO Agreement. The terms of the WTO Agreement require any anti-dumping duty to be imposed on a sunset review only after it has been justified by an investigation that follows the correct process and results in a final determination that the evidence establishes the required factual basis, all of which is to be completed within time frames that are now not
27 Phipps v Royal Australasian College of Surgeons [2000] 2 NZLR 513 (PC) at [27]; and
E H Cochrane Ltd v Ministry of Transport [1987] 1 NZLR 164 (CA) at 148.
28 Air Nelson Ltd v Minister of Transport [2008] NZCA 26, [2008] NZAR 139 at [59].
possible. I am not persuaded that such requirements, or other procedural directions contained in the WTO Agreement, can operate to exclude the jurisdiction of the Court to grant administrative law relief. As Mr Mount pointed out, the WTO Agreement also obliges member countries to have a system for judicial review of the lawfulness of the administrative processes involved.
[82] Ms Casey also argued that a court order is not required to procure a further investigation. HWL is entitled to request a fresh investigation under s 10 of the Act, provided that it can satisfy MBIE in a properly documented application that there is sufficient evidence of existing or intended dumping and related material injury.
[83] HWL’s rejoinder to this is that such an opportunity is inadequate because an entirely fresh investigation under s 10 is customarily conducted by MBIE reviewing past experience. In this case, past experience is complicated because the dumping duty applied until February 2017 and the conduct of Spanish preserved peach exporters was influenced, until that date, by the existence of the anti-dumping duty. Although Mr Mount did not add to the point, a further concern might be that, having been entitled to a properly conducted sunset review which has not occurred, it ought not to be required to go back to square one and compile sufficient evidence to justify a fresh investigation under s 10. This is a process matter rather than a substantive one, as HWL would still have to make out the onus of harmful impact before any duty was re-introduced.
[84] The amendment to the Act in late 2017 has also introduced a new consideration of the public interest.29 Again, HWL has not had the sunset review it was entitled to prior to that new consideration coming into effect. Mr Mount argues the matter ought now to be reconsidered on the same legal basis as applied at the time.
[85] The error here is one of process. Taken to its logical conclusion, Ms Casey’s submission would preclude any direction to MBIE to reconsider, irrespective of how egregious a breach of natural justice obligations was found to exist. Given the WTO recognition of the need for each State party to the agreement to maintain a system for judicial review, that implicitly carries with it the recognition that errors of process may
29 Trade (Anti-dumping and Countervailing Duties) Act 1988, ss 10F–H and 17H–J.
lead to directions from the domestic courts. That necessarily recognises the appropriate jurisdiction to entertain judicial review and for processes to be undertaken again in conformity with relevant administrative law obligations.
[86] Further, criticisms of the type Ms Casey is concerned about are likely to arise if, on appeal to a WTO panel, it was found that a substantive decision was not justified, for example because of insufficient evidence. The relief sought here does not intrude in any way on MBIE’s task in assessing the substantive requirements for the previous anti-dumping duty to be prospectively reinstated. Applicants for review in HWL’s position need to be mindful that judicial review can lead to pyrrhic victory, in that the decision-maker reconsiders the issue in compliance with its process obligations, and may ultimately arrive at the same conclusion.
[87] The relationship between the provisions of the Act and the WTO Agreement cannot operate as any form of privative exclusion of the Court’s jurisdiction in judicial review. The orders contemplated in this case come within the Court’s jurisdiction under s 17(6) of the Judicial Review Procedure Act 2016 which provides:
...
(6) If a matter is referred back to any person under subsection (3),—
(a) the act or omission that is to be reconsidered continues to have effect (subject to any interim order) unless and until it is revoked or amended by that person:
(b) the person has jurisdiction to reconsider and determine the matter in accordance with the court’s directions despite anything in any other enactment:
(c) the person must have regard to—
(i) the court’s reasons for giving the direction; and
(ii) the court’s directions.
[88] In these circumstances, it is appropriate to craft a remedy that addresses the prejudice caused to HWL by the breach of natural justice obligations owed to it. In that regard, HWL had an inadequate opportunity to advance arguments in support of
continuation of the anti-dumping duty in a review procedure. That review took into account existing trade data but also assessed the capacity of the Spanish preserved peach exporting industry in the future, with the anti-dumping duty removed.
[89] HWL is entitled to a declaration that MBIE’s process between the issue of its interim and final reports breached obligations of natural justice owed to HWL as an interested party to convey to it new material that was being relied on by MBIE in its final report to reach a conclusion contrary to that signalled in MBIE’s interim report.
[90] HWL is also entitled to the following orders:
(a) The second respondent’s 1 March 2017 decision to terminate the anti- dumping duty in issue is quashed.
(b) MBIE is directed to re-consider its sunset review of the justification for an anti-dumping duty against Spanish preserved peaches. Such review is to be conducted on terms that consider past, present and future conduct in the import of the relevant products but without triggering s 14(9)(b), with the consequence that any anti-dumping duty is only to be restored once a decision justifying such duty is made and then only prospectively from the date of such decision.
(c) The review is to be conducted on the terms of the Act as in force in August 2016 when MBIE initiated the sunset review.
Costs
[91] HWL is entitled to costs on a 2B basis.
Dobson J
Anthony Harper, Auckland for applicant Crown Law, Wellington for respondents
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