Bray Brothers P/L ATF Bray Family Trust trading as Bray Management and Australian Trade and Investment Commission (Austrade)

Bray Brothers P/L ATF Bray Family Trust trading as Bray Management and Australian Trade and Investment Commission (Austrade) [2020] AATA 143 (31 January 2020)
Division:GENERAL DIVISION
File Number(s): 2018/6041
Re:Bray Brothers P/L ATF Bray Family Trust trading as Bray Management
APPLICANT

AndAustralian Trade and Investment Commission (Austrade)
RESPONDENT

DECISION
Tribunal:Senior Member D R Davies
Date:31 January 2020
Place:Brisbane

The Tribunal affirms the decision under review.
................[SGD]................
Senior Member D R Davies
CATCHWORDS
EXPORT MARKET DEVELOPMENT GRANT – whether applicant is eligible for a grant – whether applicant supplied eligible services – approved promotional purpose test – decision under review affirmed.
LEGISLATION
Export Market Development Grants Act1997 (Cth)
Export Market Development Grants Regulations 2008 (Cth)
SECONDARY MATERIALS
Export Market Development Administrative Guidelines of Austrade
REASONS FOR DECISION
Senior Member D R Davies
31 January 2020
INTRODUCTION
Definitions

In this Decision:
Administrative Guidelines – means the Export Market Development Administrative Guidelines of Austrade as made under section 101 of the EMDG Act.
Austrade – means the Respondent, Australian Trade and Investment Commission.
Bray – means the Applicant, Bray Brothers Pty Ltd as trustee for the Bray Family Trust trading as Bray Management and also trading as Northrop & Johnson (Australia).
EMDG Act – means the Export Market Development Grants Act1997 (Cth).
EMDG Regulations – means the Export Market Development Grants Regulations 2008 (Cth).
Mr Bray – means Cameron Lorance Bray, a Director of Bray.
N&J (Aust) – means Northrop & Johnson (Australia).
Bray operates the business of managing a charter of luxury superyachts which are based in Australia for the owners of those yachts.
Bray lodged an application dated 28 November 2016 with Austrade for the 2015/16 grant years in respect of expenses incurred in relation to various marketing and promotional activities of its business.[1]
[1] Exhibit 1, Tribunal Documents, T9 p 46.
There is no issue that Bray is an eligible Applicant in accordance with the EMDG Act because it is an Australian incorporated company which was genuinely carrying on business in Australia at the relevant time.
Austrade’s original determination dated 18 December 2017 refused the application,[2] finding that Bray was ineligible for a grant for the 2015/16 grant year.
[2] Exhibit 1, Tribunal Documents, T7 p 33.
Bray requested that Austrade review that original determination by letter dated 11 October 2017.[3]
[3] Exhibit 1, Tribunal Documents, T5 p 25.
On 19 September 2018 Austrade confirmed its original determination deciding that:
(a)The Applicant is not Principal in the transaction and has not demonstrated eligibility under section 37 of the EMDG Act;
(b)The Applicant is not offering an eligible service. Therefore it does not meet section 25 of the EMDG Act;
(c)As the Applicant does not offer an eligible service, the Applicant does not meet the grant’s entry requirements in terms of section 21 of the EMDG Act;
(d)It is not considered that the Applicant provides a Tourism Service and is excluded in terms of Schedule 2(1)(j) “a service not mentioned in Schedule 1 that is provided to a foreign resident tourist in Australia”;
(e)EMDG Administrative Guidelines at 5.10.7(3) – the Applicant has not demonstrated that it promotes sales to Australian Inbound Tour Operators (ITOs); and
(f)EMDG Administrative Guidelines at 5.10.13 – the Applicant confirmed in email dated 28 March 2018 that it is not a registered ITO.[4]
[4] Exhibit 1, Tribunal Documents, T2 pp 6-7.
On 17 October 2018 Bray applied to the AAT for review of Austrade’s decision.
THE LEGISLATIVE PROVISIONS
The object of the EMDG Act is stated in section 3 as being:
“To bring benefit to Australia by encouraging the creation, development and expansion of foreign markets for Australian goods, services, intellectual property and know-how. It does so 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.”
Section 4 of the EMDG Act provides that a person:
“that is eligible under Part 3 for a grant in respect of a grant year, and has incurred eligible expenses in that grant year in relation to eligible products and has applied for a grant in accordance with Part 7 is entitled to a grant in respect of that grant year, in the amount worked out under Part 6.”
Section 7(1) of the EMDG Act relevantly provides that a person acting as a trustee of a trust estate is eligible for a grant in respect of a grant year if the person was genuinely carrying on business in Australia during the grant year as trustee of the trust estate. The Administrative Guidelines at paragraph 3.5.9 requires the trustee to be subject to the “approved promotional purpose” test. One of the aspects of that test involves the concept of product ownership or of the Applicant being considered to be the intended principal in export transactions.
Section 37 of the EMDG Act provides for claims for eligible expenses incurred for the promotion of certain eligible goods and eligible services.
Pursuant to section 107 of the EMDG Act “eligible products” is defined to relevantly mean “eligible goods” or “eligible services”.
Section 107 of the EMDG Act defines “eligible goods” as having the meaning in section 24.
Section 107 of the EMDG Act defines “eligible services” as meaning “eligible non-tourism services” or “eligible tourism services”.
A “non-tourism service” is defined by section 107 of the EMDG Act as meaning:
“A service other than:
(a)a tourism service; or
(b)a service specified in the regulations.”
An “eligible tourism service” is defined by section 107 of the EMDG Act as having the meaning given by sub-section 25(2).
Sub-section 25(2) of the EMDG Act relevantly provides that a tourism service is an eligible tourism service if the service is supplied in Australia to a person that is not a resident of Australia.
Schedule 1 of the EMDG Regulations sets out activities which are a tourism service.
Section 33 provides that expenses claimable under Items 1A, 1B and 2 of the Table in that section are only eligible if they have been incurred for an approved promotional purpose.
Section 101 of the EMDG Act provides that the Minister must determine by legislative instrument (relevantly):
“(1)(baa) Guidelines to be complied with by the CEO in determining, for the purposes of paragraph 24(b), whether Australia will derive a significant net benefit from the sale of goods outside Australia.
(2) …guidelines to be applied by the CEO of Austrade for the exercise by the CEO of any of his or her other powers under this Act.
(3) The CEO of Austrade must comply with the relevant guidelines (if any) determined under this section in exercising any of his or her powers or functions under this Act.”
Paragraph 5.10.6 of the Administrative Guidelines provides that in most cases expenses would only be eligible where the Applicant is promoting exports to be made in the capacity of principal. This means that the Applicant must:
(a)“Own the products being promoted for export;
(b)Be the seller or intended seller of these products to foreign residents, rather than being for example an agent of the seller;
(c)Must include transactions for claimed expenses and export earnings (if any) in the Applicant’s accounts, not just in consolidated accounts or in the accounts of a related entity.”
ISSUES FOR THE TRIBUNAL
The parties have each provided a Statement of Facts, Issues and Contentions[5] and Bray provided an Amended Statement of Facts, Issues and Contentions[6], and Austrade a Supplementary Outline of Submissions[7].
[5] Exhibit 4, Respondent’s Statement of Facts, Issues and Contentions, dated 2 May 2019, and Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019.
[6] Exhibit 2, Applicant’s Amended Statement of Facts, Issues and Contentions, dated 8 October 2019.
[7] Exhibit 3, Respondent’s Supplementary Outline of Submissions, dated 9 September 2019.
These statements and submissions were primarily directed to the issue of whether Bray was acting as the principal for the purposes of the EMDG Act.
Bray has made various contentions as to the product or service which it is providing as follows:
(a)“Yacht Charter Management Service”[8]
(b)“A Yacht Charter Management Service by selling charters in Australia to foreign residents”.[9]
(c)“The product being the right to charter a yacht”.[10]
(d)“The service provided can be split into two components, namely the boat and services. As far as the boat is concerned, the Applicant sources the Australian owned vessel and facilitates the transition with the overseas visitor… In this part of the transaction the Applicant is acting in the role of an Inbound Tour Operator (ITO)… with regards to services this entails the provision of a crew, including but not limited to, food and beverages and fuel which the Applicant sources and provides to the overseas visitor.”[11]
(e)“At the appeal visit meeting on 12 July 2018, the Applicant stated that the boat owner sourced the chef, who then sourced the food, beverages and fuel. The service promoted only involves the sourcing of the boat.”[12]
(f)“Bray Management supplies a yacht charter service where a client is able to walk on the yacht at the start of the charter and all the catering and staffing needs have been taken care of by Bray Management. Once the charter is finished, the client walks off the yacht and Bray Management finalises the charter arrangement.”[13]
[8] Exhibit 1, Tribunal Documents, T9 p 46.
[9] Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019, para 2.
[10] Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019, para 14.
[11] Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019, para 7.6.
[12] Exhibit 5 Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019, para 7.7 and Exhibit 1, Tribunal Documents, T6 p 27.
[13] Exhibit 1, Tribunal Documents, T57 p 232.
Bray contends that it is the principal in the transaction. It invoices the charterer and receives the full amount payable by the charterer, after which it pays suppliers including the owner of the vessel.[14]
[14] Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019, para 10.
In its Amended Statement of Facts, Issues and Contentions, Bray amended his previous contention that it should be assessed under the category of ITO stating that:
“The Applicant… does not wish to be assessed under the categories of tourism service providers who can claim for grants… namely that of an inbound tour operator. The Applicant contends that the reference to an inbound tour operator was for purposes for example only…”[15]
[15] Exhibit 2, Applicant’s Amended Statement of Issues, Facts and Contentions, dated 8 October 2019, para 4.
Austrade contends in its Statement of Facts, Issues and Contentions:[16]
(a)That Bray is not a principal to the transaction for the purposes of the EMDG Act.
(b)That Bray only operates as a broker or stakeholder for which it is paid a commission.
(c)There is no right to charter a yacht beyond the signed agreement between the charterer and the owner and that no such right reposed in Bray.
(d)There is not an eligible product as required by the EMDG Act which has been purchased from a supplier for on-sale.
[16] Exhibit 4, Respondent’s Statement of Facts, Issues and Contentions, Dated 2 May 2019.
Austrade in its Supplementary Outline of Submissions[17] contends that Bray’s marketing and promotional expenditure is directed to parties who do not directly produce any income for Bray. Even if Bray could be regarded as the principal in the transaction there is no intention on the part of Bray as central agent to sell to other charter brokers and agents and sub-brokers.
[17] Exhibit 3, Respondent’s Supplementary Outline of Submissions dated 9 September 2019.
Accordingly, the issues to be considered by the Tribunal are:
(a)What is the service which Bray is providing?
(b)Is it an eligible service under the EMDG Act?
(c)If it is an eligible service, is the activity an eligible promotional activity for an approved promotional purpose in accordance with section 37(1) of the EMDG Act in that Bray intends to sell that service to persons that are not residents of Australia?
CONSIDERATION
The Tribunal had before it Exhibits 1-8 which were admitted by consent and included the Tribunal Documents, the affidavit of Cameron Bray with exhibits to that affidavit and the parties’ Statements of Facts, Issues and Contentions and written submissions.
Mr Bray, a director of Bray also gave oral evidence to the Tribunal. The parties were represented by solicitors, Mr de Koorte for Bray and Mr Leerdam for Austrade.
Mr Bray gave evidence that Bray was the charter manager for luxury yachts based in Australia. He said it acted as marketing agent to market yachts for charter to sub-listed brokers and agents around the world with the goal of having high net worth tourists charter luxury yachts in Australia. He said that Bray enters into Central Agency Agreements with the yacht owner to manage the charter of the yacht and part of its responsibility under that agreement is to provide marketing material for the yacht to other brokers and sub-listed agents so that it is of a consistent high quality. He said that part of this marketing and promotion is done through YachtFolio which was an industry-only website. He said that this website is only available to its members which were yacht brokers. It is not available to the public including yacht owners and potential charterers.
Mr Bray said that usually a potential charterer approaches the yacht broker that he usually deals with in the overseas country. That broker then reviews the available yachts on YachtFolio and if the charterer wishes to charter one of the yachts which Bray manages then the overseas broker would contact Bray and negotiate the charter of that yacht. He said that in most cases Bray only deals with the overseas broker and not the individual charterer.
In response to a question from Mr de Koorte, Mr Bray said that the product which Bray was selling was a high end tourism service to high net worth individuals. He further said that the product is superyacht charter.
Mr Bray said that Bray was the principal in the transaction because the Central Agency Agreement with the owner makes it the principal on behalf of the owner as Bray does all the marketing and negotiating of the charter on behalf of the owner. This evidence suggests that in undertaking these activities on behalf of the owner, Bray is more likely to be the agent of the yacht owner rather than the principal.
Mr Bray said that in the industry the overseas broker which deals directly with the client which is the potential charterer is known as the retail broker. He said that there is no agreement in place between the retail broker and the charter manager other than the MYBA Charter Agreement. He said that Bray as charter manager supplies the retail broker with the marketing and promotional material for the yacht which it represents. He said that the charter manager has the agreement with the owner to arrange charters of the yacht. He said that the industry accepted split of the charter fee under the MYBA Charter Agreement is 15% to the retail broker and 5% to the charter manager.
In his affidavit, Mr Bray says that Bray enters into Central Agency Agreements with the yacht owners which appoint Bray as the sole and exclusive agent for the owners’ vessel.[18]
[18] Exhibit 7, Affidavit of Cameron Bray, Exhibits BB1-BB17, dated 19 June 2019, para 3.
Mr Bray’s affidavit exhibits a number of Central Agency Agreements with yacht owners, including Exhibits BB2 and BB11. In his affidavit and in his evidence, Mr Bray said that clause 2 of the Central Agency Agreement sets out the services which Bray is to carry out on behalf of the owner. These services include:
(a)Listing the yacht on YachtFolio;
(b)Listing the vessel on CharterFleet.com;
(c)Marketing and advertising in the Yacht at major boat shows;
(d)Distributing brochures and information to charter brokers/agents worldwide;
(e)Centralised coordination and fielding of enquiries to the owner and captain and answering questions from other charter brokers/agents; and
(f)Centralised coordination and communication of charter management including reviewing charter agreements prior to approval by the owner. This includes the collection and disbursal of charter funds according to the charter contract.
Mr Bray said that the Central Agency Agreement provides for a total commission of 20% of the charter fees comprised of:
(a)A 5% charter marketing and management fee payable to Bray; and
(b)A retail charter commission not to exceed 15%.
The retail charter commission is deducted from the charter fee and payable to the charter broker or agent. The charter marketing and management fee of 5% is also deducted from the charter fee.
Some of the Central Agency Agreements referred to by Mr Bray including the agreement with respect to the yacht “Alani”[19] contain the following provision:
“7. Authority The owner authorises N&J to act reasonably and in the best interest of the owner and the yacht at all times in connection with the proposed and actual charter of the yacht including, without limitation, the collection and holding of all charter income and the payment of all necessary fees, costs, commission, expenses and taxes as indicated in each individual charter agreement. N&J shall have no authority to enter into charter or other third party contracts on the owner’s behalf.”
[19] Exhibit 7, Affidavit of Cameron Bray, Exhibit BB11, dated 19 June 2019.
Mr Bray gave evidence that Bray had entered into a licence agreement with Northrop and Johnson Holding Company Inc. a Florida corporation which allowed Bray to use the service mark “Northrop & Johnson” in relation to Bray’s business in Australia. Mr Bray said that Northrop and Johnson was an internationally known name in relation to the sale, charter and brokerage of yachts and similar vessels. He said that Bray traded as N&J (Aust) in relation to its international yacht charter business.
Mr Bray said that the Central Agency Agreement provides that for each charter a Charter Agreement, namely the current MYBA Charter Agreement must be entered into. MYBA is the worldwide yachting association based in France which has a standard yacht charter agreement for use by its members and brokers.
There are a number of Charter Agreements exhibited to Mr Bray’s affidavit and in the Tribunal Documents. Exhibit BB13 to Mr Bray’s affidavit[20] is three MYBA Charter Agreements for the yacht “Alani”. One of those is also in the Tribunal Documents[21]. In relation to the Charter Agreement dated 18 April 2016, Mr Bray said that the owner and the charterer signed the Charter Agreement and Bray signs as broker or stakeholder as the case may be. In this particular Charter Agreement Bray is the broker. The Charter Agreement provides for it to be signed by the owner, the charterer, the broker and the stakeholder. The Charter Agreement provides that the owner lets the vessel to the charterer for the charter fee for the charter period. It then sets out the respective responsibilities of the owner and charterer.
[20] Exhibit 7, Affidavit of Cameron Bray, Exhibits BB1-BB17, dated 19 June 2019.
[21] Exhibit 1, Tribunal Documents, T27 p 116.

The Charter Agreement provides that the charter fee plus the advance provisioning allowance is payable to the broker’s client’s account. Clause 20 of the Agreement provides that the funds received by the broker are then immediately transferred to the stakeholder if the broker is not the stakeholder, and then held by the stakeholder. 50% of the charter fee is then paid to the owner by the stakeholder after deduction of the full commission on the date of commencement of the charter period. The balance of the charter fee is paid to the owner on the first working day after the completion of the charter period.
Clause 16 of the Charter Agreement requires the owners to insure the vessel against various risks. There are no insurance obligations imposed on the broker or stakeholder by the Charter Agreement.
Clause 24 of the Charter Agreement sets out various provisions between the owner and the broker and the stakeholder including:
(a)The commission is earned by the broker and stakeholder upon the signature of the agreement by the owner and the charterer and is payable by the owner on the full charter fee.
(b)If any agreement is reached directly between the charterer and owner within two years then the broker is entitled a commission on the charter fee for that further charter.
(c)The broker and stakeholder have no responsibility for loss or damage suffered by the owner or the charterer in respect of the charter.
(d)The owner and the charterer indemnify the broker and stakeholder for any loss or damage suffered by them as a result of liability to any third party arising from promoting or introducing the charter, performing the agreement or performing the duty of stakeholder.
Mr Bray in his evidence said that Bray carries on the service of charter, marketing and management for the owner in accordance with the Central Agency Agreement. Mr Bray also said that under the Central Agency Agreement Bray is the principal promoting those services for the yacht to retail brokers. He said that Bray is the principal because no one else is permitted to present charters for the yacht to the owner.
Mr Bray impressed me as a frank and truthful witness in the evidence which he gave to the Tribunal.
Eligible Service
As previously mentioned, Mr Bray in his evidence said that the product Bray was providing was a superyacht charter service. This service is provided pursuant to the terms of the Central Agency Agreement which Bray enters into with the owner of a yacht available for charter. This Agreement sets out the services which Bray carries out on behalf of the owner, to which I have previously referred.
Tourism Service
Mr de Koorte in his submissions stated that the service provided by Bray was a superyacht charter service which it performs by marketing to retail brokers.
He submitted that it was a tourism service in accordance with the EMDG Act as it was within Schedule 1(d) of the EMDG Regulations as it was:
“Accommodation for at least one night other than accommodation for foreign residents studying or working in Australia”
Or alternatively it was within Schedule 1(e) as it was “a tour”.
Mr de Koorte also acknowledged to the Tribunal that in view of the evidence given by Mr Bray and the submissions referred to in the previous paragraph that the various descriptions and submissions as to the service provided by Bray in the Applicant’s Statement of Facts, Issues and Contentions[22] and the Applicant’s Amended Statement of Facts, Issues and Contentions[23] were no longer relevant to the extent that they were inconsistent with the submissions which he made to the Tribunal as referred to in the previous paragraph.
[22] Exhibit 5, Applicant’s Statement of Facts, Issues and Contentions, dated 28 March 2019.
[23] Exhibit 2, Applicant’s Amended Statement of Issues, Facts and Contentions, dated 8 October 2019.
I consider that the service which Bray is providing and which is to be assessed for eligibility under the EMDG Act is the marketing and management of the charter of superyachts on behalf of the owner in accordance with the Central Agency Agreement entered into with the yacht owners.
The next matter to be considered is whether that is an eligible service under the EMDG Act.
As previously mentioned, section 25 of the EMDG Act sets out what are eligible services. It provides subject to sub-section 4, a non-tourism service or a tourism service is respectively an eligible non-tourism service or eligible tourism service if the service is supplied to a person who is not a resident of Australia.
As previously mentioned, Schedule 1 of the EMDG Regulations sets out the services which are a tourism service. Mr de Koorte in his submissions for Bray to the Tribunal said that the only bases on which the services provided by Bray met the requirements of Schedule 1 was that it was “accommodation” or alternatively “a tour”.
He submitted that accommodation in a superyacht is within Schedule 1. It is not contended by Bray that its service meets the description of any of the other services set out in Schedule 1.
There is no definition for “accommodation” given in the EMDG Act. Accordingly it is necessary to consider the ordinary meaning of that word. The Macquarie Dictionary (3^rd Edition) defines “accommodation” relevantly as:
“Lodging or food and lodging.”
It defines “lodging” as:
“1.Accommodation in a house, especially in rooms for hire:
To furnish board or lodging.
2.A place of abode, especially a temporary one.
3.(Plural) a room or rooms hired for residents in another’s house.”
It defines “abode” relevantly as:
“A dwelling place; a habitation”
It defines a “dwelling place” as:
“A place of residence or abode.”
It defines a “residence” relevantly as:
“The place, especially the house, in which one resides.”
On its ordinary meaning, I do not consider that the service of the marketing and management of the charter of superyachts is the service of the providing of accommodation as referred to in Schedule 1 of the EMDG Regulations.
It was also contended that Bray’s service was providing the service of “a tour” within Schedule 1. There is no definition of “a tour” in the EMDG Act. Accordingly, it is necessary to consider the ordinary meaning of those words. The Macquarie Dictionary defines the noun “tour” relevantly as:
(a)“A travelling around from place to place.
(b)A long journey including the visiting of a number of places in sequence.”
On the ordinary meaning of the noun “tour” I do not consider that the service of the marketing and management of the charter of superyachts is the service of providing a tour in accordance with Schedule 1 of the EMDG Regulations.
Whilst Bray does not submit that its service meets the description of any other services referred to in Schedule 1, I have considered the other services described in Schedule 1. The only one which is consider could be relevant is “(b) passenger transport by water”. Again, the EMDG Act does not define that term and regard must be had to the ordinary meaning of those words. The Macquarie Dictionary defines “passenger” relevantly as:
“One who travels by some form of conveyance.”
It defines “transport” relevantly as:
“The act or method of transporting or conveying; conveyance.
A system of conveying passengers or freight.”
While the charterer of a superyacht could be considered to be a passenger on the yacht which has its own captain and crew, having regard to the ordinary meaning of the words “passenger transport by water” I do not consider that the service of the marketing and management of the charter of superyachts is the service of providing passenger transport by water in accordance with Schedule 1 of the EMDG Regulations.
Accordingly, I do not consider that Bray’s service of the marketing and management of the charter of superyachts on behalf of the owner is a tourism service for the purposes of Schedule 1 of the EMDG Regulations. It follows that it is not an eligible tourism service in accordance with section 25(2) of the EMDG Act.
Non-tourism Service
Whilst Bray has not contended that its service is an eligible non-tourism service within section 25 of the EMDG Act, I will now consider whether it meets those requirements.
Section 107 of the EMDG Act defines a “non-tourism service” as meaning:
“A service other than:
(a)a tourism service; or
(b)a service specified in the Regulations.”
Schedule 2(1) of the EMDG Regulations sets out the services that are not non-tourism services. The only one which could be applicable in the present case is:
“(j) a service not mentioned in Schedule 1 that is provided to a foreign resident tourist in Australia.”
Schedule 1 is a reference to the services which are determined to be tourism services which I have previously considered. The word “tourist” is not defined by the EMDG Act. The Macquarie Dictionary defines “tourist” as:
“One who tours especially for pleasure.”
Whilst I consider that a charterer of a superyacht who is a foreign resident would be a tourist, the question is whether Bray’s service is being provided to that foreign resident tourist. Bray’s service is the marketing and management of the charter of superyachts on behalf of the owner. The evidence is that Bray provides the services set out in the Central Agency Agreement on behalf of the owner by dealing with overseas yacht brokers and that the charterer deals with its own broker which in turn deals with Bray in relation to the charter. The evidence is that Bray does not have direct contact with the charterer.
I find that Bray supplies its service under the Central Agency Agreement to the owners of the superyacht. I find that Bray sells its service to the owner of the superyacht who then pays Bray a fee or a commission on the charter fee. In carrying out this service for the owner it deals with overseas brokers but it does not deal directly with charterers.
I therefore consider that Bray’s service is not a service not mentioned in Schedule 1 of the EMDG Regulations that is provided to a foreign resident tourist in Australia and that it is therefore a non-tourism service.
In accordance with section 25(1) of the EMDG Act, a non-tourism service is an eligible non-tourism service if the service is supplied to a person who is not a resident of Australia. There are 10 Central Agency Agreements in evidence before the Tribunal.[24] It appears that nine of those are between Bray and Australian resident owners and only one[25] in respect of the yacht “Spirit” is with My Spirit Pty Ltd whose principal place of business is described as 5 Barclay Woods, St. Louis, Missouri, USA. I am satisfied that Bray’s service is predominantly supplied to Australian residents.
[24] Exhibit 1, Tribunal Documents T29 and Exhibit 7, Affidavit of Cameron Bray, Exhibits BB2, BB8, BB11 and BB16, dated 19 June 2019.
[25] Exhibit 7, Affidavit of Cameron Bray, Exhibit BB8, dated 19 June 2019.
Accordingly, I find that Bray’s service is not supplied to a person who is not a resident of Australia. I find that Bray’s service of the marketing and management of the charter of superyachts on behalf of yacht owners in accordance with the terms of the Central Agency Agreement is not an eligible non-tourism service in accordance with section 25(1) of the EMDG Act.
I find that Bray’s service does not satisfy the requirements of section 25 of the EMDG Act as it is not an eligible tourism service, nor an eligible non-tourism service. The Application must therefore fail.
DECISION
The decision of Austrade dated 19 September 2018 is affirmed because Bray did not supply eligible services pursuant to section 25 of the EMDG Act in order to receive an export market development grant pursuant to the EMDG Act for the grant year 2015/16.

I certify that the preceding 73 (seventy -three) paragraphs are a true copy of the reasons for the decision herein of Senior Member D R Davies

..............[SGD].............
Associate
Dated: 31 January 2020

Date of Hearing: 4 December 2019

Solicitors for the Applicant: Mr H de Korte, TDK Lawyers

Solicitors for the Respondent: Mr L Leerdam, DLA Piper Australia

[2020] AATA 143

31 January 2020

Key Legal Topics

Areas of Law

Administrative Law

Tax Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Jurisdiction

Standing

Date of Hearing:	4 December 2019
Solicitors for the Applicant:	Mr H de Korte, TDK Lawyers
Solicitors for the Respondent:	Mr L Leerdam, DLA Piper Australia