Digislide Holdings Limited and Australian Trade Commission

[2011] AATA 822

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 822

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/4833

GENERAL ADMINISTRATIVE DIVISION		)
Re		DIGISLIDE HOLDINGS LIMITED

Applicant

And AUSTRALIAN TRADE COMMISSION

Respondent

DECISION

Tribunal Senior Member R W Dunne

Date18 November 2011  

PlaceAdelaide

Decision The Tribunal affirms the decision under review.  

..............................................

R W DUNNE
  (Senior Member)

CATCHWORDS

EXPORT MARKET DEVELOPMENT GRANTS – application for grant for 2008/2009 financial year – Australian Net Benefit Requirements (“ANBR”) – whether applicant meets each of the ANBR for the 2008/2009 financial year – whether applicant entitled to grant applied for – decision under review affirmed.  

Export Market Development Grants Act 1997 (Cth) ss 3, 4, 7(1), 9(1), 10, 70, 73, 73A

Export Market Development Grants (Australian Net Benefit Requirements) Determination 2008

Export Market Development Grants (Information and Document Requirements) Determination 2008 s 4

EMDG Administrative Guidelines s 4

Re The Wizard Group Pty Ltd and Australian Trade Commission [2011] AATA 383
Secretary, Department of Social Security v Guiseppe Alvaro [1994] FCA 1124
Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248
Hneidi v Minister for Immigration and Citizenship (2010) 182 FCR 115
Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634
Re Wong and Minister for Immigration and Multicultural Affairs (2006) 91 ALD 149

REASONS FOR DECISION

18 November 2011   Senior Member R W Dunne   

introduction

1.Digislide Holdings Limited, which is the applicant in this case (“Digislide”), designs, develops and commercialises miniature projection systems and products.  In an application to the Australian Trade Commission, which is the respondent in this case (“Austrade”), Digislide applied for a grant under the Export Market Development Grants Act 1997 (“Act”) in respect of the 2008/2009 grant year.  A delegate of the Chief Executive Officer of Austrade (“CEO”) decided to deny the application, and the decision was confirmed by the delegate on 8 October 2010.  Digislide has applied to this Tribunal for review of Austrade’s decision.

2.At the hearing, Digislide was represented by its Chief Executive Officer, Ms Luceille Outhred, and Austrade was represented by Mr P d’Assumpcao (from the office of the Australian Government Solicitor).  Ms Outhred gave oral evidence for Digislide, as did the following witnesses who gave evidence by telephone:

·Mr Kevin Bitar, Product Manager with Global Marketing Partners Inc, Woodland Hills, California, USA;

·Mr Bill Gardner, Chief Executive Officer, Digital Entertainment Insights, Morgan Hill, California, USA;

·Mr Mark Syme, President, Sonora Technologies Inc, Chemainus, BC, Canada; and

·Mr Douglas Harrison-Mills, a merchant banker and Founder of Brainforest.biz, Kent, United Kingdom.

3.I received into evidence the T documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) (Exhibit R1), together with the following exhibits:

·witness statement of Mr Kevin Bitar, Global Marketing Partners Inc, dated 13 May 2011 (Exhibit  A1);

·witness statement of Mr Bill Gardner, Digital Entertainment Insights, dated 19 July 2011 (Exhibit  A2);

·witness statement of Mr Mark Syme, Sonora Technologies, dated 6 June 2011 (Exhibit  A3);

·witness statement of Mr Douglas Harrison-Mills, Brainforest.biz, dated 10 June 2011 (Exhibit  A4);

·prospectus of Digislide dated 11 December 2008 (Exhibit  R2);

·financial statements and reports of Digislide for the period ended 31 December 2010 (Exhibit  R3);

·Digislide Update on Quarterly Report for June 2011 (Exhibit  R4);

·Market Release relating to Digislide’s admission to ASX Official List dated 21 August 2009 (Exhibit  R5);

·printout from ASX website relating to Digislide as at 10 August 2011 (Exhibit  R6);

·letter from Digislide to ASX dated 9 June 2011 and letter from ASX to Digislide dated 8 June 2011 (Exhibit  R7);

·letter from ASX to Digislide dated 31 January 2011 (Exhibit  R8);

·letter from Digislide to ASX dated 2 February 2011 (Exhibit  R9);

·bundle of documents to ASX relating to Change of Director’s Interest Notice for Digislide (Exhibit  R10);

·letter from Digislide to ASX regarding Proposed Debt Restructuring dated 5 May 2011 (Exhibit  R11); and

·Digislide Market Update dated 30 June 2011 (Exhibit  R12).

issue for the tribunal

4.The issue for determination is whether the Tribunal is satisfied that Digislide meets each of the Australian Net Benefit Requirements specified in s 4 of the Export Market Development Grants (Australian Net Benefit Requirements) Determination 2008 in respect of the 2008/2009 grant year.

legislation

5.The object of the Act (as described in s 3) is to bring benefits to Australia by encouraging the creation, development and expansion of foreign markets for Australian goods, services, intellectual property and know-how, and it does this by providing for an assistance scheme for eligible Australian exporters. Entitlement to a grant is provided under s 4 of the Act to persons that have incurred eligible expenses in a grant year in relation to eligible products and have applied in accordance with the Act. General rules for eligibility are set out in s 7(1) of the Act, which relevantly reads:

“7        General rules for eligibility

Person other than approved joint venture or trustee

(1)A person referred to in subsection 6(1) (other than an approved joint venture or a person acting in the capacity of trustee of a trust estate) is eligible for a grant in respect of a grant year if the following conditions are satisfied:

(a)the person was, in the opinion of the CEO of Austrade, genuinely carrying on business in Australia during the grant year;

(b)in the case of an individual, he or she was a resident of Australia during the time in the grant year when he or she was, in the CEO’s opinion, carrying on business in Australia;

(c)the person is not a grantee in respect of 7 or more previous grant years;

(d)the person’s income for the grant year is not more than $50,000,000;

(g)there are no disqualifying convictions outstanding against the person under section 17 when the person applies for the grant;

(h)if Division 5 applies to the person—the CEO has decided under section 20 that the person met the grants entry requirements;

(i)        if:

(i)the person is a grantee in respect of 2 or more previous grant years; and

(ii)the person’s application for a grant in respect of the grant year sets out a statement that the person chooses grants option B in relation to the grant year;

the CEO has decided under section 9 that the person meets the Australian net benefit requirements in relation to the grant year.”

6.Under s 9 of the Act, the CEO must decide whether a person, who has applied for a grant in respect of a grant year, meets the Australian Net Benefit Requirements in relation to that grant year. Section 9 relevantly reads:

“9        The CEO of Austrade must decide whether person meets Australian net benefit requirements

Application made in applicant’s own right

(1)      If:

(a)      a person has applied for a grant in respect of a grant year; and

(b)      the applicant is not an approved body; and

(c)      the application is made in the applicant’s own right; and

(d)the applicant is a grantee in respect of 2 or more previous grant years; and

(e)the application sets out a statement that the applicant chooses grants option B in relation to the grant year;

the CEO of Austrade must decide whether the applicant meets the Australian net benefit requirements in relation to the grant year.

Note:   The Australian net benefit requirements are the requirements determined under section 10.

….”

7.Section 10 of the Act states that the Minister may, by legislative instrument, determine that, for the purposes of the Act, certain specified requirements are the Australian Net Benefit Requirements for a grant year. By instrument dated 25 June 2008, the Minister made a determination under s 10 which is entitled Export Market Development Grants (Australian Net Benefit Requirements) Determination 2008 (“ANBR Determination”). Under s 4 of the ANBR Determination, the specified requirements for the 2008/2009 financial year are as follows:

(a)      the size of the commercial return received, or receivable, from the applicant’s international business activities in the grant year; and

(b)      the applicant’s financial position; and

(c)       whether the applicant has the financial resources to maintain its international business activities; and

(d)      whether the applicant’s international business activities generate or will generate substantial economic benefit for Australia in each of the following areas:

(i)        employment in Australia;

(ii)       new capital investment in Australia;

(iii)      the introduction of new technologies in Australia; and

(iv)      new valued-added operations in Australia.

8.The ANBR Determination is registered on the Federal Register of Legislative Instruments and, by reason of its registration, is taken to be a legislative instrument: s 5(3) of the Legislative Instruments Act 2003.  As a legislative instrument, the Acts Interpretation Act 1901 applies to the ANBR Determination as if it were an Act and as if each provision of it were a section of an Act.

9.The mechanisms for applying for, and the payment of, a grant are dealt with in Part 7 of the Act. Section 70 of the Act relevantly provides:

“70       How to apply for a grant

(1)A person may make an application to the CEO of Austrade for a grant in respect of a grant year.

(2)      The application must:

(a)be in a form, and be made in a manner, approved by the CEO of Austrade; and

(b)      be made within:

(i)        5 months after the end of the grant year; or

…

(2A)     If:

(a)       an applicant is not an approved body; and

(b)the applicant is a grantee in respect of 2 or more previous grant years; and

(c)       the applicant is applying in the applicant’s own right;

the application must set out not more than one of the following statements:

(d)a statement that the applicant chooses grants option A in relation to the grant year;

(e)a statement that the applicant chooses grants option B in relation to the grant year.

…

(2C)     If:

(a)      an applicant is not an approved body; and

(b)the applicant is a grantee in respect of 2 or more previous grant years; and

(c)if the applicant is applying in the applicant’s own right—the application sets out a statement that the applicant chooses grants option B in relation to the grant year; and

(d)if the applicant is applying in the applicant’s capacity as trustee of a trust estate—the application sets out a statement that the applicant chooses, in that capacity, grants option B in relation to the grant year; and

(e)      a determination is in force under section 73A;

the application must be accompanied by:

(f)such information (if any) as is specified in the determination; and

(g)      such documents (if any) as are specified in the determination.”

10.Section 73 of the Act sets out the grounds on which the CEO may refuse to consider an application. It reads:

“73       Grounds on which the CEO of Austrade may refuse to consider application

(1)      The CEO of Austrade may refuse to consider an application if:

(a)      the application is not in accordance with paragraph 70(2)(a); or

(b)the applicant, or (if the applicant is a body corporate that was a member of a related company group) a related company, has not complied with a request of the CEO under section 72; or

(c)an individual who has helped, in a prescribed capacity, to prepare the application has not complied with a request of the CEO under section 79.

Note:   For prescribed capacity see subsection 74(2)

(2)The CEO of Austrade must not consider an application made more than 5 months after the end of the grant year to which it relates.

(3)The CEO of Austrade must not consider an application if the application breaches subsection 70(2A), (2B) or (2C).”

11.Section 73A of the Act permits the CEO, by legislative instrument, to specify information or documents for the purposes of s 70(2C) of the Act. The Export Market Development Grants (Information and Document Requirements) Determination 2008 (“IDR Determination”) was made on 24 June 2008. Section 4 of the IDR Determination relevantly reads:

“4        Information and Document Requirements

(1) For paragraphs 70 (2C) (f) and (g) of the Act, the following information and document requirements are specified:

(a) the applicant’s business plan, including the applicant’s international marketing strategy;

(b)       the applicant’s audited statement of income, including:

(i) the income received by the applicant from international sources for the grant year; and

(ii) the income receivable by the applicant from international sources for the year following the grant year;

(c) the applicant’s audited profit and loss statement for the grant year and the year preceding the grant year;

(d) the applicant’s audited balance sheet for the grant year and the year preceding the grant year;

(e) a statement that details the economic benefits generated, or that will be generated, from the applicant’s international business activities in 2 or more of the following areas:

(i)        employment in Australia;

(ii)       new capital investment in Australia;

(iii)      introduction of new technologies in Australia;

(iv)      new value-added operations in Australia.

(2)       For subsection (1), a reference to:

(a)       an audited statement of income; or

(b)       an audited profit and loss statement; or

(c)       an audited balance sheet;

is a reference to a document that has been audited by a person who is a registered company auditor for the Corporations Act 2001.”

12.Both the ANBR Determination and the IDR Determination apply to Digislide’s grant application that is being considered in these proceedings.

preliminary question

13.Prior to the hearing, Mr d’Assumpcao (for Austrade) raised the jurisdictional question of whether Digislide’s grant application, dated 20 October 2009, was valid. He submitted that the application did not comply with s 70(2C) of the Act in that it was not accompanied by “such information” and “such documents” as specified in the IDR Determination, when read with s 70(2C)(f) and (g). Specifically, there was no evidence before me that Digislide provided an “audited statement of income, including … the income received by the applicant from international sources for the grant year”.  Mr d’Assumpcao referred to the decision of Deputy President P E Hack SC in Re The Wizard Group Pty Ltd and Australian Trade Commission [2011] AATA 383. In that case, the learned Deputy President held that the application lodged by the applicant did not comply with the requirements of s 70(2C) of the Act that it be accompanied by “such information” and “such documents” as specified in the IDR Determination. None of the matters specified in clauses 4(1)(a) to (e) of the IDR Determination were provided. It followed that the application made by the applicant was invalid and the respondent ought not to have considered it.

14.In applying the decision in Re The Wizard, it was Mr d’Assumpcao’s contention that Digislide had not provided an “Audited Statement of International Income” for the grant year and that, in those circumstances, the auditor’s report did not satisfy s 4(1)(b)(i) of the IDR Determination. He submitted that Digislide’s application for review was invalid and I should affirm the decision under review. In my view, whether this submission can be sustained can only be determined by me by reviewing the relevant documents and by considering the submissions made by the parties in the course of the hearing. Moreover, the question of the Tribunal’s jurisdiction has relevantly been considered by the Federal Court a number of times. In Secretary, Department of Social Security v Guiseppe Alvaro [1994] FCA 1124, von Doussa J (with whom Spender and French JJ agreed) held that the right of this Tribunal to review a decision of the Social Security Appeals Tribunal (SSAT) existed “whether or not the decision reviewed by the SSAT, or the decision of the SSAT itself, was legally effective”.  von Doussa J said (at paragraphs 12 and 14 of his decision):

“12.  …

The scope of the jurisdiction of the AAT in the present case must depend upon the interpretation given to these provisions. The AAT has taken the narrowest view possible as to the meaning of "decision", namely that there must be a decision which constitutes a legally effective exercise of power conferred by the Act. On this interpretation if a purported decision lacks legal effect for any reason there is no ‘decision’ within the meaning of s.1283. It would follow by parity of reasoning that there is no ‘decision made in the exercise of powers conferred’ by the Act within the meaning of s.25(1) of the AAT Act. In relation to s.25 of the AAT Act this interpretation is contrary to the decision of the Full Court of this Court in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 24 ALR 307 where it was held that a decision made by an administrator in purported or assumed pursuance of a relevant statutory provision is reviewable under the AAT Act even if the administrative decision is legally ineffective or void: see Bowen CJ at 314-315, Smithers J at 339. That decision has been applied by another Full Court of this Court in The Hospital Benefit Fund of Western Australian Inc v Minister for Health, Housing and Community Services (1992) 16 AAR 566 at 573.

…

14. The right of review by the AAT of a decision of the SSAT given by s.1283(1) arises where an administrative decision made in purported exercise of powers conferred by the Act has, as a matter of fact, been reviewed by the SSAT. That right exists whether or not the decision reviewed by the SSAT, or the decision of the SSAT itself, was legally effective. A similar construction should also be accorded to ‘decision’ in ss.1239 and 1247 which respectively provide for internal review of decisions by the Secretary, and the review of decisions by the SSAT.”

15.Applying the decision in Alvaro, I find that Digislide’s grant application is valid and I have jurisdiction to review the application properly brought before me (see also the decision of Finn, Mansfield and Gyles JJ in Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 at paragraphs 28-30).

background facts

16.In this section of my reasons, I will set out the background facts that I have found.  The majority of these facts I have extracted from the T documents.  For the most part, there is no dispute between the parties as to these facts.   

17.In its application dated 20 October 2009, Digislide applied for a grant in respect of the 2008/2009 financial year under Option B by reference to the Australian Net Benefit Requirements (Exhibit R1, page 22).  Digislide stated that its total expenses/allowances in the 2008/2009 financial year were $543,367.  Its export earnings in the same period were $10,880 (Exhibit R1, page 24).  Accompanying the application were various supporting documents including business plans, a statement of export earnings, an audited statement of forecast income, annual reports, a statement of economic benefits generated and media announcements, among other documents.  On 13 May 2010, the original delegate determined that she was not satisfied that Digislide met the Australian Net Benefit Requirements.  Digislide lodged various objections to the determination but, having reviewed the additional information, the original delegate remained of the view that the application should be denied.  On 30 June 2010, Digislide requested reconsideration of the original delegate’s decision and provided additional material to the review delegate in support of its request.  On 8 October 2010, the review delegate confirmed the original delegate’s decision.  

18.In its statement pursuant to s 37 of the AAT Act and its supplementary detailed statement of reasons, Austrade stated that Digislide failed to satisfy each of the criteria detailed in the ANBR Determination. However, in its supplementary statement of reasons, it appears Austrade denied Digislide’s claim under the Act in respect of the 2008/2009 grant year under paragraphs (a), (b), (c), (d)(i) and (d)(iv) of s 4 of the ANBR Determination.

evidence of ms luceille outhred

19.Ms Outhred’s evidence was that Digislide was no longer a start-up company, but in 2008/2009 was an early expansion stage technology company.  It was at the end of its grant stage and was in the early stage of commercialisation.  There were no licensing or distribution agreements in place, but there was a heads of agreement with Haier in China.  When referred to Digislide’s audited statement of forecast income for the year ended 30 June 2010 (Exhibit  R1, page 114), Ms Outhred said that the forecasts had been based on the advice and recommendations given by Mr Bruce Newell (Digislide America’s Business Development Manager), Mr Jeff King (Digislide Chief Finance Officer) and Mr Joseph Tan (Digislide Business Development Manager in the greater Asia region).  However, the forecasts had been adversely affected by the global financial crisis in the USA and Europe.  These conditions had not been taken into account by Austrade when it said it would “take into account special circumstances, eg economic downturns and droughts cited by applicants as causes of lower than expected commercial returns in a grant year”.   

20.Ms Outhred was then referred to the Digislide Prospectus dated 11 December  2008 (Exhibit R2) where, at page 4 (paragraph 3), it was stated:

“… None of the products detailed in this Prospectus are currently in the market. 

Whilst the market for mobile communications and computer hardware is very large, the company has no reasonable basis to quantify the expected market size for Digislide’s products.”

Ms Outhred said that these comments in the Prospectus had been suggested by Digislide’s lawyers. 

21.Mr d’Assumpcao referred Ms Outhred to the letter from ASX dated 31 January 2011 (Exhibit R8) regarding reported developments impacting upon Digislide’s future cash flows.  Ms Outhred referred to Digislide’s response to ASX dated 2 February 2011 (Exhibit R9) explaining that the Australian Taxation Office and Austrade owed the company approximately $800,000 and that, if these funds had been received prior to 31 December  2010, the company’s cash position would have been vastly different.  She said that Digislide had no firm basis for believing that it would receive the Austrade grant of $200,000, but said that she believed it should be received when Digislide was entitled to a $600,000 R&D concessional rebate from the Australian Taxation Office following an extensive audit. 

22.Ms Outhred was then referred to Digislide’s announcement to the ASX dated 30 June 2011 (Exhibit R12).  In the announcement, projected revenue for the 2011 financial year was shown as $1.5 million, whereas actual revenue had only been $0.6 million.  The announcement also said, “The projections were based upon anticipated revenue being generated from both the newly established Joint Venture in the USA, existing USA retail channels and Indian distribution networks”.  Ms Outhred said that the revenue projection had not been achieved because of a logistics problem with Ingram Micro.  This would result in projected revenues being deferred into the new financial year.  A distribution agreement with Ingram Micro, which she described as a US fortune 500 company with 180,000 retail distribution outlets, had been finalised in May 2011.  At that time, Digislide decided it would significantly reduce distribution costs to subsume all distribution in the USA through Ingram Micro.  She then said that the 2011/2012 revenue projections were not available.  Digislide was working with Ingram Micro and it was expected that sales revenue would ramp up significantly. 

23.Next, Ms Outhred was referred to Digislide’s letter to ASX dated 5 May 2011 (Exhibit R11) relating to proposed debt restructuring.  Under the proposal, a debt of $300,000 would be converted into convertible notes with a fixed term to maturity.  She said that this arrangement was a commercially sensible proposal which tied more of Digislide’s external debt into a uniform debt structure with consistent terms and lower interest rates.  She said Digislide was currently still solvent, costs had been reduced, but she did not know whether current liabilities still exceeded current assets.  However, there were current liabilities of $1 million owed to related parties and there was an assurance from these parties that there would be no demand for repayment of the liabilities.  When asked about the number of employees of Digislide, she said that there were currently six full-time employees, eight contracted consultants (who worked 3-4 days per week), and that there were another ten contractors that Digislide generated work for.  When asked how the grant of $200,000 would be used, she said it would be expended on further market development, such as overseas airfares, overseas accommodation and meals, the cost of bringing Mr Felix DiMartino (international market expert) to South Australia to advise Digislide, the cost of undertaking Blackberry demonstrations overseas and travel and accommodation of personnel going to the United States for the Blackberry demonstrations. 

evidence of mr kevin bitar

24.Mr Bitar explained that Global Marketing is a market incubator and distributor of emerging technology products that works in conjunction with Ingram Micro and other major distribution channels.  His evidence largely related to the relationship that Global Marketing developed between Digislide and Ingram Micro.  He said that Global Marketing was, in effect, a division of Ingram Micro.  As to Digislide itself, he said its products were unique in the gaming market and should go well in the United States.

25.In cross-examination by Mr d’Assumpcao, Mr Bitar said he thought that, notwithstanding the current economic climate in the United States, the Digislide products would still be marketable there.  A marketing plan for Digislide products had been finalised and included email marketing, direct marketing, press release and other marketing media.  The economic climate in the United States was slowly recovering and now was the right time there for Digislide’s products.  The products were unique and the economic climate would not adversely affect consumer’s receptivity of them.  As soon as the Digislide products hit Global Marketing’s warehouse, the marketing program would be started by their marketing department. 

evidence of mr bill gardner

26.Mr Gardner’s evidence was that the market crashed in the United States in 2008/2009.  Consumers cut back their spending, the housing market died, the stock market fell and unemployment soared.  By 2010, the United States was clearly in a recession which had a devastating effect on the retail market.  When he was first approached by Digislide, he found its products were innovative and his initial reaction was one of excitement.  There were few other similar products that were in competition with Digislide’s products.  Retailers were interested in the products, but were not keen to take inventory because of the state of the economy.  Digislide did not have a warehouse for its products in the United States.  The Digislide projectors were less expensive than those offered by competitors and retailers were reluctant to buy into this cheaper concept.  He was surprised that retailers had not taken up these new products as they had done in the past.  Because of the state of the economy, retailers were skittish about taking new and untested products.  He said there were no dramatic differences in the market at the moment.  There were some products that retailers carried inventories of, but there were others where little inventory was held.  Where inventory was held, it was in the big product range and not in the range of small projector products.  Digislide’s use of Ingram Micro to market their products was a good idea.  It had a larger credit line and was a large distributor into business.

27.In cross-examination, Mr Gardner said that Digislide experienced difficulties when it entered the US market in 2009/2010.  It had no inventory on hand and markets typically required a lot of nurturing to grow in the case of new technology products.  Although Digislide dealt through Ingram Micro, there was no formal arrangement between Digislide and Digital Entertainment Insights.  Mr Gardner said he anticipated that Digislide gaming products would have more success.  Digislide had demonstrated the X-Box 360 and Wi-i and one specific video gaming retailer was particularly interested in the products.  When asked how the current economic climate in the US might affect consumer receptivity of new products of this type, he said it was very difficult for him to make any sort of projection.  He could not say whether any new technology product would have an easy time in the current market.  Any projection of the market would be speculative at this stage, but it would be easier than it was a couple of years ago.  When questioned further, Mr Gardner acknowledged that he had placed large caveats on his evidence because he was being asked to talk about a corporation outside of the US, rather than a large US corporation, like Apple. 

evidence of mr mark syme

28.Mr Syme’s evidence was that Digislide had provided Sonora Technologies with support and financial assistance in relation to its involvement in creating technology for an interactive kiosk at the Canadian Winter Olympics in 2010.  Sonora Technologies had since customised Avatar, a 3D software platform, for use by a Digislide subsidiary in Australia by way of a licence for the entire VSDN network.  The licence related to the Avatar speech recognition technology.  He said the grant of the licence, in his view, involved bringing new technology to Australia.  In particular, Digislide would benefit from the 3D graphics and the speech recognition technology as a single unit.  As to the sale of Digislide products in Canada, because of the global financial crisis in 2008/2009, there was a collaborative decision made not to move ahead and for there to be a delayed take-up of Digislide’s products.  He said Digislide’s products compared favourably with the larger gaming products and e-commerce projection systems.  As to the current market situation in Canada, Mr Syme said that Digislide’s products would stand out.  However, he said he was a software developer and not a retailing expert, but he believed that the good times were coming before year end.  When asked what he perceived to be the retail sales market for Canada for Digislide products, he referred to the revenue projections appearing at page 5 of his witness statement. 

29.In cross-examination by Mr d’Assumpcao, Mr Syme acknowledged that he was not an expert in relation to the revenue projections for Digislide products that appeared in his witness statement.  The projections were based on input provided by his associate, Mr Shaun Donnelly, and his clients within the retail sector.

evidence of mr douglas harrison-mills

30.During the course of his evidence, Mr Harrison-Mills was asked about the basis he used for valuing joint ventures involving Digislide, particularly Digismart Commerce.  After identifying various valuation bases, he said that his valuation for Digismart Commerce had been as conservative as possible.  The two companies involved held IP assets and a consensus had been reached as to the value of those assets.  The IP portfolio components were given values, such as the patents within the companies, and other IP was also given a value.  He said that this valuation was made around 2003/2004. 

31.Mr Harrison-Mills was asked about widely held stock and how the sale of such stock might influence the value of a company.  He said that selling shares drives the value of a company down five times faster or further than buying the shares drives the value up.  When asked about the effect that the global financial crisis had on markets in Europe and on consumer electronics, Mr Harrison-Mills referred generally to his witness statement (Exhibit A4).  In his statement, he referred to a BBC news report which stated that “Mobile phone sales have plummeted by a record amount in the first quarter of 2009, as the global financial crisis sapped demand”.  The news report referred to the record decline in sales by all of the five biggest mobile phone manufacturers, which indicated the state of the market that Digislide was going into at that time.  He also referred to UK data which outlined the impact on sales/profits of consumer electronics retail groups as a result of the global financial crisis.  The data reported small declines in sales over the previous financial year, however profits for the groups referred to dropped by between 75 percent and 77 percent over the same period.  The drop in retail sales and profits was a result of various factors, including the decrease in consumer spending in tandem with the dramatic loss of jobs during the same period.  According to statistics published by the UK Office of National Statistics, there was a decline in household consumption expenditure of 30 percent between 2008 and 2009, and a further decline of approximately 11 percent between 2009 and 2010. 

32.When asked about the potential for Digislide products in the UK, having regard to all the matters in his statement, Mr Harrison-Mills said that the potential was good, but it was a matter of time.  Digislide could have realistic potential, but growth was more difficult.  The company could have realised its potential by getting involved in China, but instead it chose to remain in Australia.  This had made Digislide’s growth more difficult, but more praise worthy. 

33.When asked by Ms Outhred about Digislide’s chances of generating multi-millions of dollars in annual turnover, Mr Harrison-Mills said he did not want to comment.  He said there were too many problems involved.  However, he went on to say that one deal with a mobile platform company could result in multi-millions in turnover to Digislide.  But he could not put a time limit on when such a deal might occur.  When asked how he would rank Digislide as a possible takeover target by a major icon, he said that the company was a must to have on anyone’s shopping list.  Its technology was useful and its acquisition would stop anyone else from buying it.

34.When asked by Mr d’Assumpcao in cross-examination whether Digislide could generate multi-millions of dollars in annual turnover, Mr Harrison-Mills said the situation could go either way.  It would be successful if it did something quickly or it could take longer.  He said he was hesitant in making projections and could not be certain which way Digislide would go.  If Apple was interested in Digislide’s technology and proceeded with it, Digislide would become successful.  As to Digislide’s success, he said he was “slightly on the positive side of the fence”.  When asked about projection technology, he said that major players might put off this type of technology or they would wait and see and, if it was successful, would take over the small players who had developed it.

the contentions

35.Digislide (through Ms Outhred) addressed how it satisfied each of the Australian Net Benefit Requirements for the 2008/2009 financial year.  The Australian Net Benefit Requirements were considered in reverse order and, to summarise, the contentions were as follows:

(a)      Digislide’s international business activities generated or will generate substantial economic benefits for Australia in relation to new value-added operations in Australia: Digislide is the only projection company in Australia specialising in miniature laser technology and, in addition to its own cutting edge activities, it provided value-added benefits for use by other entities and organisations, such as the South Australian local government association.  It also undertook a marketing program with graduate and post-graduate students from the University of Adelaide, providing them with opportunities to transfer their theoretical knowledge into practical applications.  Digislide has also been involved in dry land farming through H2Oasis Energy and with computers through My Own Pad.  It has also licensed technology from offshore to further enhance VSDN technology to enable mobile phones, i-phones and other technology to receive videos on demand, and has brought into Australia, through a license agreement the Spectralis, green laser technology which had potential not only for leisure, but also for defence purposes.

(b)      Digislide’s international business activities generated or will generate substantial economic benefits for Australia in relation to the introduction of new technologies in Australia: Digislide is the only company in Australia developing laser based projection.  It is developing technology for particular projection into devices, such as Blackberry mobile phones, is looking to enter into a license with Apple for the installation of a projector into the i-Pod device, and has obtained a licence from Sonora Technologies in relation to the Avatar speech recognition technology. 

(c)       Digislide’s international business activities generated or will generate substantial economic benefits for Australia in relation to new capital investment in Australia: Digislide was a start-up company in 2003 and was publically listed in 2009.  It has generated $36 million in investment in Australia and $6 million in kind through incubation providers.  It has generated $18 million in investment from interstate to South Australia and $2 million from overseas.  Since 1 July 2009, Digislide has generated $8.5 million capital investment in cash, equipment and loans.

(d)      Digislide’s international business activities generated or will generate substantial economic benefits for Australia in relation to employment in Australia: In 2003, Digislide had three people employed and in 2008 it had 16 people employed.  The number increased to 17 in 2009 and 18 in 2010.  The bulk of these employees were full-time for six months or more.  In addition, there have been six or seven professionals and trainees working for Digislide.  Beyond this, Digislide generated employment externally.  Between 2006 and 2010, Digislide generated work for seven external contractors.  

(e)      Digislide has the financial resources to maintain its international business activities: Digislide holds a $2.4 million converting note which is capable of being called upon.  It also has letters from major shareholders committing in excess of $2 million of additional investments, if required, to undertake international business activities, and $1 million of that commitment is still available for call.  There is a further $350,000 investment committed, pending shareholder approval, and just under $5 million by way of capital injection available via the Fortrend Securities Investment Facility. 

(f)       Digislide’s financial position: As at 30 June 2009, Digislide had access to $3,008,000 from funds raised from its IPO, $2.4 million available via the converting note and $3 million in trade credits, a total of $8,408,000.  Digislide had also been offered a further $20 million line of credit from AGS Capital in New York.  Moreover, Digislide’s auditors did not express any concern about its ability to continue carrying on its business.

(g)      The size of the commercial return received, or receivable, from Digislide’s international business activities in the grant year: Digislide will have increasing commercial return from its international business activities in the grant year from licensed distribution channels and reseller agreements in America, Indonesia, Singapore, South Africa, Saudi Arabia, Romania, Canada and India.  Digislide has also secured joint development agreements and heads of agreement with Apple, Ericsson, Sony Ericsson and Haier (in China).        

36.Austrade (through Mr d’Assumpcao) largely disagreed with Digislide’s contentions. As s 4 of the ANBR Determination is cast in conjunctive terms, Digislide must satisfy each of paragraphs (a) to (d) in the section to be eligible for the grant it is seeking. The Australian Net Benefit Requirements were considered and, to summarise again, Austrade’s contentions were as follows:

(a)       The size of the commercial return received, or receivable, from Digislide’s international business activities in the grant year: Overseas sales of Digislide products amounted to $10,880 in the 2008/2009 grant year. Digislide’s audited statement of forecast income for the 2009/2010 financial year forecast sales for the Asian market of $3,195,031, sales for the USA market of $1,944,640 and sales for the European market of $984,884. Digislide asserted that its international sales in the USA, Indonesia, Singapore, South Africa and China were $145,917. Under its Guidelines, Austrade assesses this requirement according to the information in Digislide’s audited statement of income referred to in s 4(1)(b) of the IDR Determination. Digislide had not demonstrated that the projected commercial return received, or receivable, from Digislide’s international business activities in the grant year was reasonable. On the available information, the criterion in s 4(a) of the ANBR Determination is not met.

(b)      Digislide’s financial position: Digislide was not in a strong financial position.  It was heavily in debt and had been so for some time.  In its financial statements for the period ended 31 December 2010, Digislide’s current liabilities exceeded its current assets by approximately $1.9 million.  Its losses for the same period were approximately $1.64 million.  In an independent audit report to the members of Digislide and Controlled Entities dated 30 September 2010, the auditor reported that “The business operated by Digislide Holdings is not yet selling sufficient volumes of product to cover costs and, as such the going concern assumption is significantly uncertain”. 

For the above reasons and those set out more fully under (c) below, the criterion in s 4(b) of the ANBR Determination is not met.

(c)       Whether Digislide has the financial resources to maintain its international business activities: Having regard to Digislide’s 2009/2010 financial statements where the company had a net operating loss of $4,738,131, sales revenue of $614,118, a negative cash flow of $438,756 and total current liabilities in excess of total current assets of $1,067,491, Digislide was not financially viable. Digislide did not have the financial resources necessary to carry out the proposed international activities to the degree it forecast. Despite the additional capital that Digislide had raised by floating the company on the ASX, the criterion in s 4(c) of the ANBR Determination is not met.

(d)       Whether Digislide’s international business activities generated or will generate substantial economic benefits for Australia: Digislide’s international business activities in respect of employment in Australia, new capital investment in Australia, the introduction of new technologies in Australia and new value-added operations in Australia are not such that they generated or will generate substantial economic benefits for Australia. There may have been international business activities that generated or will generate economic benefits for Digislide, but these were not international business activities of a level that generated or will generate substantial economic benefits for Australia. The criterion in s 4(d) of the ANBR Determination is not met.

consideration

Does Digislide meet each of the Australian Net Benefit Requirements specified in s 4 of the Export Market Development Grants (Australian Net Benefit Requirements) Determination 2008 in respect of the 2008/2009 grant year?

37.Pursuant to ss 9 and 10 of the Act, the CEO must decide whether an applicant for an export market development grant meets the Australian Net Benefit Requirements in relation to the grant year for which the application has been made. The Australian Net Benefit Requirements for a grant year are set out in the ANBR Determination. If the applicant is applying in the applicant’s own right and chooses Option B in relation to the grant year and an IDR Determination is in force under s 73A of the Act, the application must be accompanied by such information (if any) and such documents (if any) as are specified in the IDR Determination. The Australian Net Benefit Requirements in respect of the 2008/2009 grant year are set out in paragraph 7 of these reasons.

38.Austrade has issued the EMDG Administrative Guidelines (“Guidelines”) which contain Austrade’s policy for decision-makers exercising powers under s 9 of the Act. The Tribunal is to take into account the Guidelines and give them appropriate weight: Hneidi v Minister for Immigration and Citizenship (2010) 182 FCR 115 at [61]. However, the overarching principle is that the Tribunal must make an independent assessment on the material before it: Hneidi at [59]. Further, where a Minister (in this case, the CEO) has adopted a general policy as a guide to the exercise of a discretionary power, the Tribunal will consider an argument against its application to the facts of the case but “cogent reasons” will have to be shown against its application: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 (at page 645); Hneidi at [48].

39.I note that, in its letter dated 8 October 2010 (Exhibit R1, page 388), Austrade indicated that Digislide’s grant application was denied for four reasons, they being because the criteria in paragraphs (a), (b), (c), (d)(i) and (d)(iv) of s 4 of the ANBR Determination had not been met.

Evidence of Witnesses

40.Ms Outhred’s evidence was extensive, but it often focused on irrelevant matters, such as the awards and accolades that Digislide had received over time.  These awards and accolades may have been praiseworthy, but they were of little assistance in my consideration of Digislide’s contentions.  Ms Outhred was at pains to criticise Austrade for its lengthy consideration of Digislide’s application.  All this occurred, notwithstanding my continual reminders that her evidence should only address issues that were relevant to prosecuting Digislide’s application for review.  Doing this would enable me to reach the correct and preferable decision on the evidence available. 

41.In giving her evidence initially, Ms Outhred referred to Digislide’s international sales for the year ended 30 June 2010.  These sales were outlined in Exhibit  R1 (at page 307) as follows:

“America   4,896

Indonesia   13,642

Singapore   22,175

South Africa  102,500

China   2,500

Total International Sales  145,917”

Based on the individual sales shown, the correct total international sales figure should have been $145,713.  When Exhibit R1 (at page 307) is analysed, the following comment appears after the above international sales:

“Following the formalisation of these distribution agreements international sales for the year ended 30^th June 2010 totalled $145,917 (2009) nil.”

The reference to “nil” international sales in 2009 is confusing, given that Digislide’s grant application (Exhibit R1, page 24) referred to export earnings in 2008/2009 of $10,880.

42.Ms Outhred was asked about Digislide’s revenue and international sales forecasts appearing in the T documents and other exhibits.  She acknowledged that Digislide’s audited statement of forecast income for the 2009/2010 financial year forecast sales for the Asian market of $3,195,031, sales for the US market of $1,944,640 and sales for the European market of $984,884.  These forecasts had been based on the advice and recommendations of Digislide officers but, surprisingly, none of these people were called to give evidence about their advice and recommendations.  Instead, Ms Outhred explained away the forecasts by saying that they had been adversely affected by the global financial crisis in the USA and Europe.  And these conditions had not been taken into account by Austrade when it said it would “take into account special circumstances, eg economic downturns and droughts cited by applicants as causes of lower than expected commercial returns in a grant year”.  However, it seems to me that “special circumstances” will only properly be taken into account when there is no other reason, on the material available, that would explain or cause lower than expected commercial returns in a grant year.

43.In relation to the other witnesses who appeared for Digislide, it was Mr d’Assumpcao’s submission that their evidence, concerning compliance with the Australian Net Benefit Requirements, was largely irrelevant. 

44.Mr Bitar was positive about the prospects of moving Digislide’s products.  He noted that Digislide’s first shipment was on its way (I assume, to Global Marketing) and, if it continued with its marketing strategy, it would achieve sales.  Mr d’Assumpcao suggested that he was overly optimistic about moving Digislide’s products in the US climate. 

45.Mr Gardner gave evidence of his relationship with Digislide in 2009/2010 and made reference to various failed attempts to penetrate the US market in the wake of the global financial crisis.  He said he ceased business dealings with Digislide in about October 2010 and regarded its products as highly innovative with the potential to “explode”.  However, he was surprised about consumer reluctance to buy Digislide’s products.  He was more pessimistic than Mr Bitar about the US economy and thought that the future of new technology sales was speculative.  There were new products in the market and also market awareness of the hand-held projector.  Market success of this new product would depend on the state of the US economy.

46.During the course of giving his evidence, Mr Syme was referred to the Digislide sales revenue projections referred to in his witness statement.  He agreed that he was not an expert and did not independently calculate the revenue projections, given that his statement was almost wholly directed to the global financial crisis and the state of the US economy.  In these circumstances, Mr d’Assumpcao submitted he was not in a position to offer an opinion that I could accept.  I agree with this submission.  However, Mr Syme certainly was in a position to explain the technologies and licences that Digislide held with Avatar Technology and its success in Canada. 

47.Mr Harrison-Mills had been involved with Digislide since about 2002 and was familiar with its financial situation.  He thought it was a matter of time before Digislide was successful, but he could not say when this would occur.  He was not prepared to rate the chances of Digislide making multi-millions of dollars in sales revenue.  Given the state of the US economy, even the major players were getting it wrong.  Unless Digislide penetrated the market with its products, major players will have established positions, and whether Digislide was successful would depend on the relationships it developed with these players. 

48.As to the evidence generally of Mr Bitar, Mr Gardner, Mr Syme and Mr Harrison-Mills, Mr Bitar’s evidence relating to Digislide differed noticeably from the evidence of the others.  Nevertheless, I agree with the submission that Mr d’Assumpcao made, to which I refer in paragraph 43 above.  In that regard, I note that, apart from Mr Harrison-Mills, these witnesses all came into contact with Digislide after the 2008/2009 grant year.  To the extent that Digislide blamed the global financial crisis as explaining away the ability to make significant international sales in the grant year, the evidence of these witnesses must be questioned.  Their evidence was relevant to the efforts Digislide had taken to realise multi-million dollar projections, but nothing more.  As a result, Digislide was experiencing difficulty in having a major player pick up its products.  An example was the agreement with Apple, but this agreement was not set in stone and was only at Stage 3 of the 4 Stage arrangements.

Compliance with ANBR Determination

49.I now address Digislide’s compliance with each of the Australian Net Benefit Requirements in respect of the 2008/2009 grant year. Under the Guidelines, Digislide must address each of the requirements in s 4 of the ANBR Determination by supplying information and documents, as specified in the IDR Determination, in the manner set out in paragraph 3.7.2 of the Guidelines and to the extent indicated in paragraph 3.7.3 of the Guidelines. It is clear that s 4 of the ANBR Determination is cast in conjunctive terms. Moreover, the Act appears to impose a temporal limitation on what material the Tribunal can consider, in Digislide’s case, after the 2008/2009 grant year. This temporal limitation is evident from the reference to “a grant in respect of that grant year” in s 4 of the Act, and that the CEO “must decide whether the applicant meets the Australian Net Benefit Requirements in relation to the grant year” in s 9(1). Additionally, s 4(a) of the ANBR Determination speaks in terms of “the size of the commercial return received, or receivable, from the applicant’s international business activities in the grant year”. It is therefore clear that the Tribunal cannot consider material outside of the 2008/2009 grant year for this criterion. However, there would appear to be no such temporal limitation, on the face of paragraphs (b) to (d) of s 4 of the ANBR Determination, as to relevant evidence that may be considered by the Tribunal: see ReWong and Minister for Immigration and Multicultural Affairs (2006) 91 ALD 149 at [23]-[24].

50.Analysing each of the criteria in s 4 of the ANBR Determination as they relate to Digislide, I find as follows:

(a)      Commercial return: Digislide projected strong and increasing international sales. The 2009/2010 forecast sales are as detailed in paragraph 36(a) of these reasons (see also Exhibit R1, page 253). The conservative revenue forecast for USA sales were set at $5 million (2010), $15 million (2011), $25 million (2012) and $35 million (2013) (see Exhibit R1, page 226). Export earnings (or overseas sales of Digislide products) amounted to $10,880 in the 2008/2009 grant year (see Exhibit R1, page 24). In my view, Digislide has not demonstrated that the projected commercial return from its international business activities is reasonable, given that it has very limited exporting experience. Moreover, there is currently no firm basis to conclude that Digislide will achieve the projected overseas sales. To date, Digislide has not provided any independent material or information, other than bare assertions and optimistic forecasts, which proves otherwise. Digislide has sought to place a great deal of reliance on the impact of the global financial crisis, and has effectively defined this as “the crux of the issue”. I acknowledge that the global financial crisis would have contributed to Digislide’s low international sales when compared to the projected figures. However, I accept Mr d’Assumpcao’s contention that Digislide’s lack of overseas sales in the grant year was not caused by the global financial crisis, but rather by the absence of distribution channels, of retail agreements or a comprehensive marketing strategy to penetrate international markets. These matters would explain or cause the lower than expected commercial returns in the 2008/2009 grant year. All of Digislide’s recent efforts into the United States have been directed through Ingram Micro, pursuant to a distribution agreement finalised in May 2011 and in an unstable market that had developed there. This delayed strategy has failed to result in an increase in the size of the commercial return, received or receivable, from Digislide’s international business activities in the 2008/2009 grant year. On the evidence available, I am not satisfied that the criterion in s 4(a) of the ANBR Determination is met.

(b)      Financial position:  On the evidence available, it appears that Digislide has not been in a strong financial position for some time.  Its current liabilities have exceeded its current assets by significant amounts in the years ended 30 June 2009 ($2,031,163) and 30 June 2010 ($1,067,491).  Digislide’s current liabilities also exceeded its current assets in the period ended 31 December 2010 ($1,880,829).  Digislide’s sales revenue for the financial years ended 30 June 2009 and 30 June 2010 and for the period ended 31 December 2010 has also been adversely affected.  The sales revenue figures for these financial years and for the latter period were 2009 ($42,869), 2010 ($614,118) and 31 December 2010 ($76,170).  Sales revenue for the year ended 30 June 2011, although less than the projected revenue figure of $1.5 million, was $326,576.  The market value of the ordinary fully paid shares in Digislide at the time of its official quotation on the ASX on 24 August 2009 was $1.25 per share.  According to an ASX internet extract dated 10 August 2011, the last sale of Digislide ordinary fully paid shares was $0.035 per share.  In various annual reports and statements relating to Digislide’s financial position, the independent auditors have made statements about the uncertainty regarding Digislide’s position as a going concern.  For example, in the Independent Audit Report to the members of Digislide and Controlled Entities dated 30 September 2010, the following comments were made:

“Inherent Uncertainty Regarding Going Concern

Without qualification to the opinion expressed above, attention is drawn to the following matter.  As indicated in Note 1(p) to the financial statements, the business operated by Digislide Holdings is not yet selling sufficient volumes of products to cover costs, and as such the going concern assumption is significantly uncertain due to the following factors:

·the business currently does not generate sufficient trading revenues to meet its current cost structure and is reliant on capital injections and loans from shareholders; and

·the current liabilities exceed the current assets by $1,067,491; and

·the Group has a cash position of only $2,949.

The going concern basis has been adopted on the basis that there is a reasonable expectation that the Group will be able to raise sufficient funds from shareholders until the Group is in a position of generating sufficient cash from the commercialisation of its products going forward.”

Further, on the issue of its status as a going concern, Digislide reported (Exhibit  R1, page 340):

“(p)     Going Concern continued

·The nature of the liquidity of the company is limited by the ability of the trade dollars and stock to be readily converted to cash within a reasonable time to assist in repayment of debts as they fall due.”

Digislide’s financial statements for 2008/2009 and 2009/2010 reveal that the company had the following:

At 30 June 2009	At 30 June 2010	At 30 June 2011
Net operating loss ($4,738,131)	Net operating loss ($260,042)	Net operating loss ($1,964,517)
Sales revenue ($614,118)	Sales revenue ($42,869)	Sales revenue ($326,576)
Excess current liabilities ($1,067,491)	Excess current liabilities ($2,126,759)	Excess current assets ($193,048)

Having regard to the above details and on the evidence before me, I am not satisfied that Digislide is financially viable, even though it has improved its position in the financial year ended 30 June 2011. In my view and on balance, Digislide is still a struggling company trying to break even. Based on its past sales revenue figures, its sales forecasts for the future six months are mildly over-optimistic. There is no reasonable basis that Digislide will realise its projections and achieve its profitability forecast. In my view, the criterion in s 4(b) of the ANBR Determination is not met.

(c)       Financial resources: Ms Outhred’s evidence was that, as at 30 June 2009, Digislide had access to $3,008,000 from funds raised from its IPO, $2.4 million available via the converting note (see Exhibit R1, page 363) and $3 million in trade credits, a total of $8,408,000. It appears there was also just under $5 million available via the Fortrend Securities Investment Facility. In addition, Digislide had been offered a further $20 million line of credit from AGS Capital in New York. It appears that this may be (or be related to) the facility being sought through Allied Mortgage & Securities Pty Ltd (see Exhibit R1, page 309), but Ms Outhred’s evidence on the issue was unclear and no documentary evidence was produced or referred to which showed that the facility had been secured. Although Ms Outhred did not produce or refer to satisfactory and acceptable documentary evidence relating to all of the funds and facilities that were referred to above, I am satisfied that there was sufficient evidence overall to support Digislide’s contention that it has (or now has) the financial resources to maintain its international business activities. It follows that the criterion in s 4(c) of the ANBR Determination is met.

(d)      International business activities - substantial economic benefits for Australia: Ms Outhred gave evidence that Digislide’s international business activities generated or will generate substantial economic benefits in relation to employment in Australia, new capital investments in Australia, the introduction of new technologies in Australia and new value-added operations in Australia.  There may have been international business activities that generated or will generate economic benefits for Digislide.  However, there was no (or little) evidence that these international business activities, in each of the areas mentioned, were at a level that generated or will generate “substantial economic benefits for Australia”. In the absence of this evidence, I am not satisfied that the criteria in s 4(d) of the ANBR Determination is met.    

conclusion

51.As already mentioned in these reasons, s 4 of the ANBR Determination is cast in conjunctive terms. Digislide must satisfy each of the criteria in paragraphs (a) to (d) in the section to be eligible for the grant in respect of the 2008/2009 grant year. My finding is that each of the criteria in s 4(a), s 4(b) and s 4(d) of the ANBR Determination are not met in respect of the 2008/2009 grant year.

decision

52.For the reasons outlined above, the decision under review is affirmed.

53.

54.

I certify that the 52 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne

Signed:         .........J Coulthard.......................................
  Associate

Dates of Hearing  10-12 August 2011
Date of Decision  18 November 2011

Advocate for the Applicant       Ms L Outhred

Digislide Holdings Limited
Counsel for the Respondent     Mr P d'Assumpcao
Solicitor for the Respondent     AGS