Case: Air International Pty Ltd v Chief Executive Officer of Customs [2002] FCA 355 ; (2002) 121 FCR 149
Outcome: considered
In support of the submission at [14] Cascade placed reliance on the observations of Tamberlin J, with whom O'Loughlin J agreed, in Air International Pty Ltd v Chief Executive Officer of Customs [2002] FCA 355 ; (2002) 121 FCR 149 at [53] . Speaking of the words pumps and compressors "of a kind used as replacement components in passenger motor vehicles", his Honour said: "It is helpful to look at actual use, if any, when deciding whether goods are of a kind used as replacement components. Where they are so used, then that points to a conclusion that they are 'of a kind' so used. The words 'of a kind' add a further level of generality to the expression 'used' so that even if (to use the Tribunal's expression) the goods are not so used but are within a range of goods of a type which are used, then they satisfy the required description." This treats the words "of a kind" in item 13 as words of expansion rather than limitation. Air International is a "use" and not a "marketed as" case. However it was said there was no reason why that should make the above passage inapplicable to item 13. 19 In Air International Hill J, dissenting, quoted with approval the decision of the Court of Appeal in Customs and Excise Commissioners v Mechanical Services (Trailer Engineers) Ltd [1979] 1 WLR 305, to which Gummow J had referred in Hygienic Lily . The question in the English case was whether couplings and winches were to be classified for value added tax purposes as "Goods of a kind suitable for use as parts of goods within item 1 or item 5". Hill J said at [28]: "Brown LJ held that the words 'goods of a kind' referred to some class or category or genus of goods which had characteristics in common. That holding is generally consistent with the Australian sales tax cases referred to in Clean Investments." Hill J then quoted with approval this passage from Megaw LJ's judgment (at 316-317): "It is not 'the goods' the particular articles, here the couplings and the winch which have to be suitable for use as parts. It is the kind of goods to which these particular articles belong, their genus, which has to be thus suitable. The addition of 'of a kind', would be meaningless if goods which are themselves suitable are necessarily also goods of a kind which is suitable. The question is, first, what is the relevant 'kind of goods' of which they are members; and, secondly, is that kind of goods generically, suitable for use as parts of the goods comprised in items 1 and 5 of Group 3." 20 I doubt that there is any real difference between the cases upon which the parties based their respective approaches to the construction of item 13. In Air International , before the passage set out at [16], Tamberlin J quoted at [47] from Hygienic Lily the passage appearing at [18], introducing it at [46]-[47] with the words: "In answering the question [whether the fans etc are goods 'of a kind used as replacement components'], it is necessary to construe the quoted expression as a whole. The intent or purpose of the manufacturer or importer is not the criterion to be applied. Nor is it necessary that the goods should in fact have been used or be used as replacement components. It is sufficient if they are 'of a kind' which can be so used. That is to say, if they come within the genus of 'goods used as replacement components'. In order to determine whether the goods are within that genus, it is necessary to examine the 'nature quality and adaptation of the goods in the class': see Gummow J in Hygienic Lily ...." When Tamberlin J went on to say, in the passage relied on by Cascade (set out at [16]), that it is helpful to look at actual use when deciding whether goods are 'of a kind' used in a particular way, because when they are so used, that points to a conclusion that they are 'of a kind' so used, his Honour was not, in my view, intending to depart from the approach mandated by the words of item 13 or that appearing in Hygienic Lily . He was simply saying that the answer to whether goods are of a kind used in a particular way may, depending on the circumstances, be assisted by looking at how they have in fact been used. 61 It will be apparent from what I have said at [46] to [60] that I have initially approached the "of a kind" issue in accordance with Cascade's submission recorded at [14]. The submission derives support from what two members of the Full Court said in Air International . See [16]. On this approach Ultra-C was not principally marketed, in the sense of mainly, chiefly, predominantly or preponderantly, as food for infants, giving that word the meaning appearing at [34]. 62 Obviously Cascade's "of a kind" formulation is more advantageous to it than the Commissioner's, because it focuses on its own marketing of Ultra-C. On the Commissioner's approach, Cascade's case more clearly fails. The genus to which Ultra-C belongs is in my view either cordials or blackcurrant concentrated syrups, including in either case Ribena and Bickford's. That group of products does not fall within item 13 (findings (p), (q) and (r)). Accordingly, nor does Ultra-C. If, contrary to my view, Cascade's fall-back genus submission is sound namely that Ultra-C is a genus of its own its case fails because of what I have said at [61]. 63 On the approach I have suggested at [22], Cascade's marketing of Ultra-C shows that the product is not of a kind marketed principally as food for infants.