Bond and Australian Trade and Investment Commission

[2023] AATA 1633

Bond and Australian Trade and Investment Commission [2023] AATA 1633 (16 June 2023)

Division:GENERAL DIVISION

File Number:2022/7136          

Re:Geoffrey Bond

APPLICANT

AndAustralian Trade and Investment Commission

RESPONDENT

DECISION

Tribunal:R Cameron, Senior Member

Date:16 June 2023  

Place:Melbourne

The Tribunal affirms the decision under review.

...............................[SGD].........................................

R Cameron, Senior Member

CATCHWORDS

FOREIGN AFFAIRS AND TRADE – application for payment of export market development grant – claimable expenses in respect of eligible promotional activities under section 33 of the Export Market Development Grants Act 1997 – obtaining, under the law of a foreign country, of rights in relation to eligible intellectual property – whether Australian intellectual property registration costs are eligible expenses – statutory construction of the word “obtaining” – patent applications not made under law of a foreign country – intellectual property registration costs are ineligible expenses – $15,000 threshold not met – jurisdiction to entertain additional claim – additional claim not subject of review by respondent – no jurisdiction to hear additional claim – decision under review affirmed

LEGISLATION

Australian Trade and Investment Commission Act 1985

Export Market Development Grants Act 1997

Export Market Development Grants Legislation Amendment Act 2020

Patents Act 1990

CASES

Drake and Minister for Immigration and Ethnic Affairs (No 2), Re (1979) 2 ALD 634

SECONDARY MATERIALS

EMDG Administrative Guidelines

REASONS FOR DECISION

R Cameron, Senior Member

16 June 2023

INTRODUCTION

1. The applicant seeks review of a decision made by the respondent, the Australian Trade and Investment Commission (‘Austrade’), on 2 August 2022 (‘the reviewable decision’).[1]

   [1] The reviewable decision is document T26 of the T documents.

2. The reviewable decision was undertaken following a reconsideration request made by the applicant with respect to an earlier determination made by the respondent. The reviewable decision found that expenses claimed by the applicant relating to the registration of provisional Australian patents in the sum of $14,148 were not eligible expenses that could be claimed by him under the relevant provisions of the Export Market Development Grants Act 1997 (‘EMDG Act’). The effect of this finding was that the applicant’s claim in relation to the 2020/2021 grant year did not meet or exceed the required statutory minimum threshold of $15,000, meaning that no export market development grant (‘EMDG’) was payable to him.

   THE LEGISLATIVE FRAMEWORK OF THE EMDG ACT AS IT APPLIES TO THIS APPLICATION

3. In this case it is appropriate to take into account the objects of the EMDG Act as it then applied and must be applied to this application.[2] They are to bring benefits to Australia by encouraging the creation, development and expansion of foreign markets for Australian goods, services, intellectual property and know-how. This objective is to be achieved by providing for an assistance scheme under which small and medium Australian exporters committed to and capable of seeking out and developing export businesses are repaid part of their expenses incurred in promoting those products.

   [2] The EMDG Act was amended by the provisions of the Export Market Development Grants Legislation Amendment Act 2020. Section 15(1) of that Act provides that despite the amendments made to the EMDG Act by the Schedule, the EMDG Act and the Australian Trade and Investment Commission Act 1985, as in force immediately prior to the commencement of that section, continue in force in relation to grants in respect of the years ending on 30 June 2021 or earlier. As noted above, the applicant’s claim which is the subject of this application, was in relation to the 2020/2021 Grants year. Therefore, by reason of the foregoing matters, the EMDG Act as in force prior to the grant year commencing on 1 July 2021 continues to apply.

4. There are several sections of the EMDG Act which must be considered for the purposes of this application.

5. Section 29, “Eligible expenses-general”, contains several criteria that must be satisfied by an applicant for a grant with respect to expenses incurred by them in “a grant year”. It need not be reproduced in full for the purposes of these reasons. However, the section is referred to in its entirety for its full force and effect. The expenses must be, under section 33, “claimable expenses” in respect of an eligible promotional activity. Further, the expenses are to be incurred (within the meaning of Division 3 of Part 5) by the applicant: if the applicant is not a grantee in respect of any previous grant year, during the grant year or the immediately preceding year or alternatively, in any other case, during the grant year. Finally, the section prescribes that the expenses, together with other expenses of the applicant that satisfy subparagraphs (a) to (c) of that section, add up to $15,000 or more.

6. “Claimable expenses in respect of eligible promotional activities” are set out in a Table contained in section 33 of the EMDG Act. Relevantly for the purposes of this application, the only “Claimable expenses in respect of eligible promotional activities” with respect to the grant or registration or taking other applicable steps with respect to rights in relation to eligible intellectual property are those enumerated or identified in item 8 in the Table to section 33. It is useful to reproduce item 8 in the Table to section 33 in full. It prescribes as follows:

Column 1 Item	Column 2 Activity	Column 3 Expenses
8	obtaining, under the law of a foreign country: a)    the grant or registration; or b)    the extension of the term of registration; or c)    the extension of the period of registration; of rights in relation to eligible intellectual property, if the grant, registration or extension is for an approved promotional purpose	all reasonable expenses incurred by the applicant in payments to persons that, in the opinion of the CEO of Austrade, were not closely related to the applicant, up to a limit of: a)    if the applicant is a grantee in respect of any previous grant year—$50,000 for the grant year; or b)    if the applicant is not a grantee in respect of any previous grant year—$50,000 for the grant year and the immediately preceding year.

1. Division 3 of Part 5 of the EMDG Act, “When are expenses incurred?”, consists of two sections. Section 58 provides that subject to section 59, an expense is taken to have been incurred by an applicant at the time when the expense is “acquitted.” An expense is taken to have been “acquitted” at the time when the amount is paid or set off, with the written consent of the creditor, against money owed by the creditor or another person to the applicant.

2. Reference should also be made to section 59 which also forms part of Division 3 of Part 5 of the EMDG Act. That section provides that if the amount of an expense would be taken to have been incurred during a grant year and the goods or services for which an expense has been incurred, or some of them, were not provided before the end of the grant year; the amount or part of the amount relating to those goods or services that were not provided, is to be taken, if the CEO of Austrade so determines, to be incurred only when the goods or services are provided.

3. Section 80 of the EMDG Act requires the CEO of Austrade to consider each application for a grant, determine whether the applicant is entitled to a grant and, if so, determine the amount of such grant.

4. Additionally, regard should also be had to the EMDG Administrative Guidelines applicable to applications made under the EMDG Act (‘EMDG Guidelines’). The EMDG Guidelines represent government policy and should be applied by the Tribunal as decision-maker unless there is good reason not to do so.[3] The relevant paragraph of the EMDG Guidelines is section 5.9.5. That section records that registration of intellectual property rights in Australia does not provide international protection. Expenses of registering intellectual property rights in Australia up to and including 17 January 2016, are not eligible. It also records that provisional patent applications are provided for by the Patents Act 1990 and do not offer any patent protection themselves, and these are also ineligible.

   [3] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

   THE APPLICANT’S ADDITIONAL CASE ADVANCED SINCE THE COMMENCEMENT OF THE APPLICATION IN THE TRIBUNAL

5. In material lodged with the Tribunal and served on the respondent by the applicant since the commencement of this proceeding the applicant has sought to maintain an additional or fresh case against the respondent. The material in support of the applicant’s additional case was not placed by the applicant before the decision-maker who made the reviewable decision.

6. Details of the applicant’s additional case can be found, by way of example, in a submission lodged by him with the Tribunal on 23 May 2023. This document contains details of a variety of expenses and calculations of various claims. They include, but are not limited to, several items totalling approximately $41,498. Details of these claims have also been helpfully appended to the respondent’s Statement of Facts, Issues and Contentions at Attachment B.

7. The Tribunal will consider whether it has the power or jurisdiction to entertain this additional claim.

   
   
   
   
   
   

   BACKGROUND FACTS

8. On 26 November 2021 the applicant lodged with the respondent, Austrade, an application for an EMDG for the 2020/2021 grant year.[4] The application consisted of three schedules which provided particulars of eligible expenses incurred by the applicant amounting to $24,490. The products that the applicant identified which he intended to sell to foreign residents were a low power consumption timer circuit, a website, heating/cooling fan kits and an anti-hijacking electronic device.

   [4] Document T4 of the T documents.

9. Schedule 8: “Registration of eligible intellectual property (IP)” of the EMDG application for the 2020/2021 grant year identified three items of expenditure which were described as “Patent application”. A total sum of $14,148 was paid to a supplier known as “IP Monitor Pty Ltd”; in the section headed “Country”, Australia was identified.

10. The application lodged for an EMDG for the 2020/2021 grant year was considered by the respondent and a determination made (‘Determination’).[5] The Determination disallowed the applicant’s claim for what was described as “Australian IP registration costs” amounting to $14,148. The Determination provided that expenses relating to registering provisional Australian patents were not eligible under section 33 of the EMDG Act as also outlined in the EMDG Guidelines. Therefore, as the expenses claimed for IP registration were not eligible, the total eligible expenses required to receive a grant fell below the $15,000 minimum threshold under the EMDG Act. Accordingly, no EMDG was payable by the respondent to the applicant.

    [5] The Determination is document T26 of the T documents.

11. The applicant promptly sought a reconsideration of the Determination, as he was entitled to do, under section 98(1) of the EMDG Act. In undertaking the reconsideration of the Determination, the reviewable decision presently before the Tribunal was made.

    THE ISSUES BEFORE THE TRIBUNAL

12. The Tribunal considers that there are two issues before it to be considered.

13. Firstly, were the IP registration costs of $14,148 claimed in the EMDG application of 26 November 2021 eligible expenses within the meaning of item 8 of the Table to section 33 of the EMDG Act?

14. Secondly, is the applicant able to maintain the additional case as now framed by him?

    CONSIDERATION

    The first issue: were the IP registration costs of $14,148 eligible expenses?

15. The applicant’s contentions with respect to this issue were particularly difficult to follow. As the Tribunal is best able to distil the applicant’s argument from the material before it, the applicant contends that the IP registration costs of $14,148 were eligible expenses within the meaning of item 8 of the Table to section 33 of the EMDG Act if the reference in that item to the word “Obtaining” is properly construed and applied.

16. The crux of the applicant’s argument is that the proper meaning or construction of the word “Obtaining” as used in item 8 of the Table to section 33 of the EMDG Act is to the effect of “in the process of purchasing or earning something”. In this context it would mean that the section properly construed and applied extends to obtaining patents under the laws of a foreign country as contemplated by item 8.

17. It is further contended by the applicant that a contextual interpretation or construction of this item means that it does apply to a subsequent application that may be made by him for patents or a similar form of protection by way of intellectual property in a foreign jurisdiction. He contends that a broad, rather than a narrow construction, should be placed on the word “Obtaining” because item 8, when read as a whole, does not include any temporal restraint on when the relevant IP registration or protection in a foreign jurisdiction is obtained. Therefore, it captures potential expenditure that may be made in the future, and also current expenditure on IP protection in Australia which might be used as a springboard for a future patent or other IP application made under the law of a foreign country within the meaning of section 33.

18. The Tribunal cannot accept the applicant’s contention as to the construction and application of item 8 of section 33 of the EMDG Act.

19. The construction of the term “Obtaining” is not particularly difficult. It captures coming into the possession or enjoyment of, or procuring or gaining something, or generally acquiring it or getting it in. It is a word that is frequently found in a variety of statutes that are applied in many different settings.

20. The words “Obtaining, under the law of a foreign country”, in the first part of item 8 of the Table to section 33 of the EMDG Act are neither difficult to construe or apply to the facts of this case. They require a successful applicant for an EMDG to successfully apply under the laws of a foreign country for eligible intellectual property rights. That did not occur in this case. If an application for an IP right is made under the applicable laws of Australia, the party concerned is not eligible for an EMDG.

21. There was in evidence before the Tribunal several documents that had been generated by the applicant’s firm of Patent Attorneys. These documents included several tax invoices which claimed fees for the services rendered by the Patent Attorneys for the preparation and filing of a provisional patent application for the inventions concerned. Additionally, there was a letter from the applicant’s Patent Attorney, Mr Milne, dated 29 April 2022. These documents demonstrate, as was contended for by Mr Leerdam on behalf of the respondent, that the applications for the grant of patents made by the applicant were made to the Australian Patent Office in Canberra, under the provisions of section 29 of the Patents Act 1990. It goes without saying, therefore, that the applications concerned were not made under the law of a foreign country as required by item 8 of section 33 of the EMDG Act. Therefore, the registration costs claimed by the applicant in the sum of $14,148 made in his application for an EMDG for the 2020/2021 grant year are not eligible expenses that can be claimed under section 33 of the EMDG Act.

22. It should also be observed that the letter from Mr Milne of 29 April 2022 informed the applicant that once a provisional patent application had been filed, one could claim priority by filing continuation applications with respect to the inventions concerned, so as to gain further protection in foreign countries under either the Paris Convention or the Patent Cooperation Treaty. There was no evidence before the Tribunal that any steps had been taken by the applicant to file a continuation application under either the Paris Convention or the Patent Cooperation Treaty. It should be repeated that there is simply no evidence to establish that the applicant was obtaining, under the law of a foreign country, rights in relation to eligible intellectual property.

23. By reason of the finding above that the IP registration costs of $14,148 claimed by the applicant in his EMDG application of 26 November 2021 were not claimable expenses within the meaning of section 33 of the EMDG Act, the total amount of eligible expenses was as identified in the reviewable decision, namely $10,342. Accordingly, because the total of the eligible expenses does not add up to $15,000 or more, no grant is payable to the applicant by reason of the fact that not all of the conditions in section 29 of the EMDG Act have been satisfied. In other words, the $15,000 minimum threshold for the applicable grant year imposed by that section has not been achieved by the applicant.

    The second issue: is the applicant able to maintain the additional case as now framed by him?

24. The reviewable decision presently before the Tribunal is a reconsideration of an earlier decision. It is made by the CEO of the respondent, Austrade, as required by operation of section 98(4) of the EMDG Act. It is from this decision, and this decision only, that an application may be made to this Tribunal for review.

25. The additional case that has now been advanced by the applicant at the hearing of this matter before the Tribunal was not the subject of a review by the CEO of Austrade. Therefore, because the additional case now advanced by the applicant and any material relied upon in support of that case were not reconsidered by the CEO of Austrade, as required by section 98(4) of the EMDG Act, this Tribunal on review is not empowered or does not have the jurisdiction to entertain the additional case as now advanced by him.

    CONCLUSION AND DECISION

26. By reason of the foregoing matters, because the Tribunal has concluded that the total of the eligible expenses claimed in the application that was made by the applicant to Austrade on 26 November 2021 do not add up to $15,000 or more, no grant is payable to the applicant. Further, the Tribunal considers that it has no jurisdiction to hear and determine the additional case as framed by the applicant. Accordingly, the reviewable decision is affirmed.

I certify that the preceding 32 (thirty-two) paragraphs are a true copy of the reasons for the decision herein of R Cameron, Senior Member

.....................[SGD]............................

Associate

Dated: 16 June 2023

Date of hearing:	30 May 2023
Applicant:	Self-represented
Advocate for the Respondent:	Mr Lenny Leerdam
Solicitors for the Respondent:	Keypoint Law