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Confidential and Industry Research and Development Board

Confidential and Industry Research and Development Board

Case [2000] AATA 332 28 April 2000

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DECISION AND REASONS FOR DECISION [2000] AATA 332

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N98/480

GENERAL ADMINISTRATIVE DIVISION       )
           Re      CONFIDENTIAL
  Applicant
           And    INDUSTRY RESEARCH AND DEVELOPMENT BOARD
  Respondent

DECISION

Tribunal Mr B.J. McMahon (Deputy President)

Date28 April 2000
PlaceSydney

Decision      The decision under review is affirmed.
  (Sgd) BJ McMahon ..............................................
  Deputy President
CATCHWORDS
INDUSTRY RESEARCH AND DEVELOPMENT – Registered Research Agency – Industry Research and Development Act 1986 section 39F – whether the relevant date is at application or hearing – whether the Employment criteria and Facilities criterion were met – whether the Pricing Structure and Multiple Client criterion were met – whether dealing conducted on normal commercial terms – Employment and Facilities criterion met – Multiple Client criterion not met as companies related – Pricing Structure criterion not on normal commercial terms – decision affirmed
WORDS AND PHRASES – normal commercial terms
Industry Research and Development Act 1986 ss 3, 39C, 39F, 39T
Industry Research and Development Amendment Act 1995 (No. 84 of 1995)
Industry Research and Development Board Guideline – Registered Research Agencies published Commonwealth Government Gazette 26 April 1995.
Jebb v Repatriation Commission (1988) 80 ALR 329
Freeman v Secretary, Department of Social Security (1988) 15 ALD 671
Comptroller-General of Customs v Akai Pty Limited and Others (1994) 50 FCR 511

REASONS FOR DECISION

Mr B.J. McMahon (Deputy President)

This is an application brought pursuant to section 39T of the Industry Research and Development Act 1986 (the Act) to review a decision made under section 39F. Section 39T(4) provides that the hearing of a proceeding before this Tribunal relating to a reviewable decision must take place in private. These reasons are therefore cast in such a way as to preserve the confidential identity of the applicant. It is, however, necessary in order to explain the decision to give some facts relating to the applicant's business and activities.
The applicant was incorporated on 27 November 1995 as a public company limited by guarantee. Its objects are stated to be the carrying out of scientific research and development in relation to herbal medicines and plant extracts with emphasis on tea tree oil. This is an oil distilled from the leaves of the melaleuca alternifolia, which grows in large numbers in various parts of Australia but particularly around the north coast of New South Wales.
On 25 September 1996, it lodged an application for registration pursuant to section 39F as a Registered Research Agency (RRA) in respect of the following classes of activity:
"agriculture – forestry
agriculture – plant production and breeding
biotechnology – genetic engineering
pharmaceutical products and technology
chemical analysis
chemicals – organic
cosmetic products
environmental management
distillation process and technology"

The respondent board established by section 6 has delegated a number of its powers to its Tax Concession Committee, including the power to register research agencies. That committee undertook extensive enquiries upon receipt of the application. A decision was not made until some 15 months later on 17 December 1997. The decision was not…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Confidential and Industry Research and Development Board [2000] AATA 332
Case: [2000] AATA 332
Decision Date: 28 April 2000

CaseChat Overview and Summary

The parties in this case were the Confidential and Industry Research and Development Board, the appellant, and several companies that had applied for registration as Research Agencies, the respondents. The dispute centred on whether these companies met the criteria set out in the Industry Research and Development Act 1986 to be registered as Research Agencies. The matter was heard by the Federal Court of Australia. The court was required to determine several legal issues, including whether the relevant date for assessing compliance with the criteria was at the time of application or at the time of hearing, and whether the Employment and Facilities criteria, as well as the Pricing Structure and Multiple Client criteria, had been met by the respondents.

The court found that the Employment and Facilities criteria were satisfied by the respondents, as they employed staff and possessed facilities suitable for conducting research. However, the court determined that the Multiple Client criterion was not met because the companies were related and did not operate independently of each other. Additionally, the court held that the Pricing Structure criterion was not met because the companies did not deal with each other on normal commercial terms. The court emphasised the importance of the "normal commercial terms" requirement and noted that the relationship between the companies was not indicative of such terms. The court's decision was based on a thorough analysis of the relevant legislation, guidelines, and case law, including Jebb v Repatriation Commission and Freeman v Secretary, Department of Social Security.

In affirming the decision of the board, the court held that the respondents did not meet all the criteria for registration as Research Agencies under the Act. The court found that the Employment and Facilities criteria were satisfied, but the Multiple Client and Pricing Structure criteria were not. The court's reasoning was based on a careful examination of the evidence and the applicable legal standards. The final orders of the court affirmed the decision of the board and upheld the decision that the respondents were not entitled to be registered as Research Agencies.

Orders