Graham Marsh Golf Design Pty Ltd and Australian Trade Commission
[2001] AATA 916
•5 November 2001
DECISION AND REASONS FOR DECISION [2001] AATA 916
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W1999/37
GENERAL ADMINISTRATIVE DIVISION )
Re GRAHAM MARSH GOLF DESIGN PTY LTD
Applicant
And AUSTRALIAN TRADE COMMISSION
Respondent
DECISION
Tribunal Associate Professor S D Hotop, Senior Member Dr D Weerasooriya, Member
Date5 November 2001
PlacePerth
Decision The Tribunal sets aside the decision under review and, in substitution therefor, decides that Graham Marsh Golf Design Pty Ltd ("GMGD") is entitled, pursuant to s4 of the Export Market Development Grants Act 1997, to a grant under that Act, in respect of the grant year commencing on 1 July 1997 and ending on 30 June 1998, in the amount worked out under Pt 6 of that Act on the basis that the expenses incurred by GMGD during that year by way of payments made by GMGD to Amundson Marketing & Consulting totalling $134,568.15 are "claimable expenses in respect of eligible promotional activities", within the meaning of s33 of that Act, and are therefore "eligible expenses", within the meaning of s29 of that Act, incurred by GMGD in that year.
...........(sgd S D Hotop)...........
Senior Member
CATCHWORDS
BOUNTIES AND OTHER SUBSIDIES – Export Market Development Grant – whether applicant incurred eligible expenses in 1997/98 grant year in relation to eligible products – whether expenses incurred by applicant were in respect of an eligible promotional activity for an approved promotional purpose – whether applicant supplied eligible external services
Export Market Development Grants Act 1997 ss 4, 25(3), 29, 33, 37(d), 58, 107
Re Southbank Corporation Pty Ltd and Australian Trade Commission (2000) 30 AAR 465
REASONS FOR DECISION
5 November 2001 Associate Professor S D Hotop, Senior Member Dr D Weerasooriya, Member
Introduction
This is an application by Graham Marsh Golf Design Pty Ltd ("GMGD") for review of a decision made on 11 January 1999 by an officer of the Australian Trade Commission ("Austrade") under s98(4) of the Export Market Development Grants Act 1997 ("EMDG Act"). That decision confirmed a decision made by another officer of Austrade on 11 September 1998 that, pursuant to GMGD's application for a grant under the EMDG Act for the 1997/98 "grant year" received by Austrade on 27 August 1998, the grant amount payable to GMGD was $0.
At the hearing GMGD was represented by Mr M Atkinson, solicitor, and Austrade was represented by Mr J Allanson of counsel. The Tribunal had before it the statement and documents ("T documents") lodged by Austrade in accordance with s37 of the Administrative Appeals Tribunal Act 1975 and the following documentary exhibits tendered by the parties:
statement of Orlando Jose Fernandes dated 16 December 1999 (A1);
statement of Robert John Elliott dated 12 November 1999 (A2);
bundle of documents described as "Applicant's Trial Bundle" comprising documents numbered 1 - 64, pages 1-240 (A3);
statement of David Lowe (undated) filed on 2 November 1999 (A4);
affidavit of Mark Amundson sworn on 15 May 1999 (A5);
supplementary statement of Mark Amundson dated 12 March 2001 (A6);
Austrade form entitled "Export Market Plan Guide" relating to the "Grants Entry Test" completed on behalf of Graham Marsh Golf Design (USA) Pty Ltd ("GMDG (USA)") for the purpose of an application by GMGD (USA) for a grant under the EMDG Act for the 1998/99 grant year, together with an attachment entitled "Grants Entry Test" (comprising 10 pages) and financial statements regarding GMGD (USA) for the year ended 30 June 1999 (R1);
statement of Peter James Nibbs dated 2 July 1999 (R2); and
extract (comprising page 11) from the EMDG Administrative Guidelines prepared by Austrade, dated March 1998 (R3).
Oral evidence was given by Orlando Fernandes, Robert Elliott, David Lowe and Mark Amundson (who were called as witnesses by GMGD), and by Peter Nibbs (who was called as a witness by Austrade).
The Factual Background
On 27 August 1998 Austrade received a completed "Application for Grant 1997/98" form signed by Robert John Elliott and dated 26 August 1998, whereby application was made by GMGD for a grant under the EMDG Act for the 1997/98 "grant year". In that form it was indicated that GMGD was a "body incorporated under the Corporations Law" and that its "core business" comprised "services" which were described as follows:
"Golf course designs, construction supervision, greenkeeping and golf course landscaping services".
In its abovementioned application for a grant under the EMDG Act GMGD claimed expenses totalling $145,000.00 in the 1997/98 year. Those expenses comprised "overseas representation" ($138,168.00), "marketing visits" ($5,864.00), and "trade fairs, literature, advertising" ($968.00). Included in the claimed "overseas representation" expenses was the amount of $134,568.15 which GMGD claimed was paid by it during the 1997/98 year to "Amundson Marketing & Consulting" ("AM&C"), located in South Dakota, United States of America ("USA"), for promoting and marketing activities in the USA during the period from 1 July 1997 to 30 June 1998.
In its abovementioned decisions of 11 September 1998 and 11 January 1999 (the latter being the reviewable decision in this matter), Austrade disallowed GMGD's claimed expenses relating to the abovementioned payments totalling $134, 568.15 made by it to AM&C. By reason of s29(d) of the EMDG Act (see below), it necessarily followed from the disallowance of those claimed expenses that no grant was payable under the EMDG Act to GMGD for the 1997/98 grant year.
The Statutory FrameworkThe EMDG Act, which is described in its long title as "(a)n Act relating to the grant of financial assistance to provide incentives for the development of export markets", commenced on 1 July 1997 (s2). By s4 a person is entitled to a grant under the Act in respect of a "grant year" (defined, relevantly, in s107 to mean, among other years, "the year commencing on … 1 July 1997") if that person:
"(a) is eligible under Part 3 for a grant in respect of (that) grant year; and
(b)has incurred eligible expenses in that grant year in relation to eligible products; and
(c) has applied for a grant in accordance with Part 7;".
In the present case it is common ground that the requirements of paras (a) and (c) of s4 have been met. The matter in dispute between the parties is whether GMDG has fulfilled the requirements of para (b) of s4.
The key phrases "eligible expenses" and "eligible products" are defined in s107 of the EMDG Act as follows:
"eligible expenses has the meaning given by Division 1 of Part 5";
"eligible products means:
(a) eligible goods; or
(b) eligible services; or
(c) eligible intellectual property; or
(d) eligible know-how".
Relevantly, the phrase "eligible services" is in turn defined in s107 to mean:
"(a) eligible external services; or
(b) eligible internal services; or
(c) eligible tourism services"
and, relevantly, s107 provides that the phrase "eligible external services has the meaning given by subsection 25(3)".
Part 4 (ss23-27) of the EMDG Act deals with "eligible products" including "eligible services", which phrase is the subject of s25. Relevantly, s25(3) provides:
"Subject to subsection (4), an external service is an eligible external service if the service is supplied outside Australia to a person that is not a resident of Australia".
The phrase "external service" is defined in s107 to mean
"any service other than a service that is declared by the regulations not to be an external service".
Regulation 7 of the Export Market Development Grants Regulations provides that certain services are not external services, but none of those specified services is of the kind with which the present case is concerned.
Part 5 (ss28-59) of the EMDG Act deals with "eligible expenses". Section 29 (in Div 1 of Pt 5) provides:
"Subject to section 30, expenses incurred by an applicant for a grant in respect of a grant year are eligible expenses if the following conditions are satisfied:
(a)the expenses are, under section 33, claimable expenses in respect of an eligible promotional activity;
(b)if the applicant is an approved trading house or an approved joint venture –the expenses are related to the approved activity, project or purpose of the trading house or of the joint venture (as the case may be);
(c)the expenses were incurred (within the meaning of Division 3) by the applicant:
(i)if the applicant is not a grantee in respect of any previous grant year – during the grant year or the immediately preceding year; or
(ii)in any other case – during the grant year;
(d)the expenses, together with other expenses of the applicant that satisfy paragraphs (a) to (c), add up to $20,000 or more."
Division 2 of Pt 5 deals with "claimable expenses in respect of eligible promotional activities". Section 33 relevantly provides:
"(1)The activity specified in column 2 of an item in the following table is an eligible promotional activity in relation to an applicant.
(2) The expenses specified in column 3 of an item in the following table, to the extent to which they are not excluded expenses under Subdivision 4, are claimable expenses of the applicant in respect of the activity specified in column 2 of that item.
Claimable expenses in respect of eligible promotional activities
Column 1Column 2 Column 3
ItemActivity Expenses
1maintaining an overseas so much of the expenses
representative on a long term incurred by the applicant in a
basis in a foreign country to the grant year in:
extent to which the representative (a) maintaining the
is maintained for an approved representative; and
promotional purpose (b) meeting the expenses
incurred by the
representative in soliciting
business for the applicant;
that, together with similar
expenses (if any) incurred in
respect of other representatives
during the grant year, does not
exceed $200,000
…".
The phrase "approved promotional purpose", which appears in column 2 in the above table, is explained in Subdiv 3 of Div 2 of Pt 5 of the EMDG Act. Section 37 relevantly provides:
"For the purposes of section 33, an eligible promotional activity in relation to an applicant is for an approved promotional purpose if it is carried out for the purpose of creating, seeking or increasing demand or opportunity in a foreign country for any of the following:
…(d) if the applicant is not an approved body or an approved trading house—eligible services supplied by the applicant;
…".
The final provision of the EMDG Act which it is relevant to note for present purposes is s58 (in Div 3 of Pt 5) which explains when an expense is "incurred" for the purposes of the Act. Section 58 provides:
"(1) Subject to section 59, an expense is taken to have been incurred by an applicant only at the time when the amount of the expense is acquitted.
(2) For the purposes of subsection (1), the amount of an expense incurred by an applicant is taken to have been acquitted at the time when that amount:
(a) is paid off; or
(b) is set off, with the written consent of the person (creditor) to whom it is payable, against money owed by the creditor or another person to the applicant.
(3) For the purposes of subsection (2), if an amount is paid by cheque or payment order, the amount is taken to be paid when the bank or financial institution on which the cheque or payment order is drawn debits the drawer's account.
…".
The Oral Evidence
Orlando Fernandes
Orlando Fernandes gave his occupation as Chartered Accountant and stated that he is a professional adviser to, and a director of, GMGD. He confirmed that he had made a written statement on 16 December 1999 for the purposes of this case. The contents of that statement, which was tendered in evidence by the applicant (Exhibit A1), are as follows:
"1. My Involvement
1.1I am a Director of both Graham Marsh Golf Design Pty Ltd (GMGD), a trustee company for the unit trust, Graham Marsh Golf Design Unit Trust, as well as Graham Marsh Golf Design (USA) Pty Ltd, a trustee company (incorporated in Australia) for the unit trust, Graham Marsh Golf Design (USA) Unit Trust;
1.2The other directors of GMGD are Kevin Moore, resident in Perth and Graham Marsh, ordinarily resident in Perth;
1.3The other directors of GMGD (USA) by Kevin Moore, resident in Perth, Robert Elliott, resident in Carrara, Queensland and Graham Marsh, ordinarily resident in Perth;
1.4I act as adviser to the Marsh Group and am involved in authorising all contracts entered into by both trustee companies in association with one other director, who is available at the relevant time;
1.5The compilation of the 1997/98 Austrade Claim was prepared by GMGD's regional office in Robina on the basis that GMGD had paid all of the overseas representative office outgoings in the fiscal year ended 30 June 1998;
1.6Such disbursement was in accordance with the agency arrangement entered into by GMGD with Amundson Marketing & Consulting of South Dakota, USA;
1.7GMGD continues to provide golf design services to clients both nationally and overseas, including South East Asia, United States and Europe, to the extent that such services fall within the general ambit of its design and implementation services. Where, however, the ambit of the contract may go beyond merely the provision of design and implementation services, for example, joint venture arrangements or where equity provisions are sought, GMGD may not be the appropriate entity and thus the reason for the settlement of an alternative unit trust to focus on the latter type of contract arrangements.
2.Set up of GMGD (USA)
2.1GMGD (USA) is a unit trust, with the fixed interest therein being held by the principal beneficiaries, Graham and Julie Marsh;
2.2GMGD... is also a unit trust, again with the fixed interest therein being held by the principal beneficiaries Graham and Julie Marsh;
2.3GMGD tenders for contracts where the nature of services are conventionally in the nature of design and implementation by contracts;
2.4The United States market particularly is a more developed market and proposals with mixed opportunities are sometimes presented. To the extent that the ambit of the negotiations go beyond that of mere design and implementation, the latter are capable of being dealt with through GMGD (USA);
3.Audit of 97/98 Austrade Claim
3.1The audit of the 97/98 Austrade Claim was conducted in Robina by the Austrade Inspectorate with David Lowe, an employee (not director) of GMGD being present;
3.2I was not approached to obtain any explanation for the use of overseas agents by both GMGD and GMGD (USA);
3.3I was not advised (prior to the refusal of the application) of the nature of any concerns on behalf of Austrade and/or their understanding, inter alia, of:
·The fixed interest rights held directly by the beneficiaries in GMGD and GMGD (USA) respectively (being unit trusts), not companies (sic);
·The nature of activities conducted by GMGD and GMGD (USA);
·The nature and term of appointment of the overseas agents by GMGD and GMGD (USA)."
Mr Fernandes confirmed that the "agency arrangement" referred to in para 1.6 of his statement was the "Agreement for Consulting Services" made between GMGD and AM&C. A copy of that Agreement is included in the bundle of documents comprising Exhibit A3 (pp 4-7). By that Agreement, which is dated 19 December 1995, GMGD retained the services of AM&C "as its exclusive representative in the USA to promote interest from existing golf clubs and potential developers in GMGD's services" (which were described in the Agreement as "international design, construction and supervisory consulting services for golf course facilities and clubs") and, in consideration for the services to be performed by AM&C under the Agreement, GMGD agreed to pay to AM&C a specified monthly fee and all reasonable expenses incurred in the performance of its services. The duration of the Agreement was expressed to be 12 months commencing on 1 January 1996 but it was provided that it "shall be renewed on an annual basis" unless either party gave written notice of termination to the other party. Mr Fernandes also confirmed that that Agreement had in fact since been "extended annually on an oral basis".
In response to a question from the Tribunal Mr Fernandes elaborated on the measures taken by GMGD to secure work in the USA. He said that in approximately August 1996 GMGD entered into preliminary negotiations with a USA corporation, HNTB, which was also engaged in (inter alia) golf course design work. He said that the intention of those parties was that GMGD would not establish a "formal permanent presence " in the USA but that golf course development work would be procured by HNTB in the USA and the design work would then be "on-contracted" to GMGD in Australia. The abovementioned negotiations ultimately culminated in a "Cooperation Agreement" between HNTB Corporation and GMGD on 19 December 1997 (Exhibit A3, pp 60-74). He added that throughout this period GMGD "continued to utilise the services of Mark Amundson" of AM&C.
Mr Fernandes said that it was understood that the association between GMGD and HNTB Corporation might lead to "deals" involving a greater degree of risk and it was thought prudent by the directors of GMGD that GMGD (USA) (a company incorporated in Australia on 7 March 1997), rather than GMGD, should be a party to such contracts. He added, however, that no such "opportunities" involving GMGD (USA) arose during the 1997/98 year.
In cross-examination Mr Fernandes said that the abovementioned Cooperation Agreement was terminated by the mutual consent of the parties at the end of February 1998. He said that during the period of operation of that Agreement, namely from December 1997 to February 1998, Mark Amundson was providing services to GMGD (USA) as well as to GMGD.
Mr Fernandes was referred to a letter from Fehily Loaring Pty Ltd to Austrade dated 3 November 1998 whereby a request was made on behalf of GMGD for a reconsideration of Austrade's decision of 11 September 1998 in this matter. On pages 2 and 3 of that letter (Exhibit A3, pp 142 and 143) the following statements were made:
"…
Graham Marsh Golf Design Pty Ltd will be the principal in rendering the services by virtue of the fact that all of the skilled personnel, whether it relates to drafting estimating, compiling quotations etc are all employed by it. Graham Marsh Golf Design (USA) Pty Ltd has no technical staff of its own.
Graham Marsh Golf Design Pty Ltd provides a full golf course planning design and design implementation supervision service. These services are provided by Australian employees within Australia. Hence, it is only the consultational items that may require Graham Marsh and/or a representative to attend to overseas (sic).
…
Graham Marsh Golf Design (USA) Pty Ltd was established to limit the liability of the business' entrance into the American market and not to expose their existing ventures to any potential liabilities incurred in the American market. It is recognised that the USA is a highly litigious environment and it is considered appropriate that adequate commercial protections be adopted. Therefore, Graham Marsh Golf Design (USA) Pty Ltd will be subcontracting the entire project assignment to Graham Marsh Golf Design Pty Ltd. This essentially means that Graham Marsh Golf Design Pty Ltd is in fact the principal that will deliver the services through its fully transparent subcontract arrangement with Graham Marsh Golf Design (USA) Pty Ltd.
…".
Mr Fernandes was asked whether the last abovequoted paragraph contained an accurate representation of what was intended by GMGD and GMGD (USA). He said that an arrangement, as indicated in that paragraph, wherein GMGD (USA) contracted directly with parties in the USA and subcontracted assignments to GMGD, was "one possibility", but, he added, another possibility was that GMGD "would be contracting directly". He elaborated:
"… GMGD (USA) doesn't have employees. If GMGD (USA) undertook a high risk project, it would need to secure on a sub-contract basis the employees from GMGD. But GMGD (USA) would be the principal, both in executing that contract on a project by project basis, and it would receive the rewards therefor. If, however, it was a pure, straight design service, GMGD would have gone ahead and done that work directly in its own right and receive the rewards therefor."
(Transcript, p36)
Robert Elliott
Robert Elliott gave evidence by telephone from Queensland. He confirmed that he had signed a written statement, dated 12 November 1999, for the purposes of these proceedings. The contents of that statement, which was tendered in evidence by the applicant (Exhibit A2), are as follows:
"… I am the General Manager of Graham Marsh Golf Design Pty Ltd (GMGD). I have been in the employee of GMGD for nearly (11) eleven years and have been General Manager for the past (8) eight years.
As General manager I am responsible to the company's Managing Director (MD), Mr Graham Marsh, with my portfolio being:· Management/administration of all company facets to Managing Director's requirements:
·Administration
·Finance
·Construction
·Design
·Auxiliary Services
· GMGD monthly reporting update to Directors
· Liaison with overseas agents, design and construction representatives
· Implementation of company Business Plan
Being responsible for implementation of daily company activities, all such activities are carried out to Directors instructions and policies as so determined by the Directors.
The agreement between Mr Mark Amundson of Amundson Marketing & Consulting, South Dakota, USA (AMC) and GMGD was initiated by the MD with said agreement executed by the MD and witnessed by the undersigned on 19 December 1995.
The agreement was initially for a 12 month period, renewable annually at the discretion of the MD.
AMC, acting as an independent contractor, was to:
promote interest from existing golf clubs and potential developers in GMGD's services;
promote GMGD and Graham Marsh within the framework of the company's philosophies;
make initial contact with parties who may be interested in employing the services of GMGD;
set up meetings and negotiations with interested parties;
advise and assist in designing and adopting marketing and negotiating strategies appropriate to the customs and style and business in the USA.
Compensation via a monthly fee and expenses was to be paid to AMC in US dollars. This agreement has been renewed annually and is currently still in place.
GMGD's core markets since 1986 have been Australasia, Japan and South East Asia. With the downturn in golf course design, specifically in SEA, the company has had to look to other markets to fill the business void. The USA and European markets have been identified as regions of greatest opportunities to provide design services. The US market alone creates 400-600 courses per annum. With such a large market to cover, a non-exclusive consultancy arrangement was entered into with a multidisciplinary company HNTB of Kansas in December of 1997. As HNTB was a US registered company it was considered appropriate to establish a new company GMGD (USA) to accommodate projects that would be created under the HNTB association, while still continuing to pursue business that was appropriate to GMGD.
It became apparent from January to March of 1998 that HNTB did not have the design skills and business attention to see GMGD (USA)'s needs and the arrangement 'cooled' and subsequently lapsed.
GMGD (USA) was registered on 7 March, 1997. GMGD would provide all planning, design and design implementation services from our Gold Coast, Queensland office for GMGD (USA) as well as continuing to provide such services directly to the USA market, as directed on a project by project basis.
Two projects in the USA and currently under construction. Both projects were initiated by Graham Marsh and AMC and subsequently commissioned with no involvement by the undersigned. All policy and decisions in relation to US projects were the responsibility of Company Directors.
Specific to the 1997/98 Export Market Development Grant application the undersigned instructed the financial controller, Mr David Lowe, to reconcile and prepared the application as at 1 July, 1998. My instructions for compilation was that Mark Amundson acted as agent for GMGD throughout the whole of the financial year ended 30 June 1998, in accordance with the continuing Agency Agreement. Mark Amundson also commenced to act as agent for GMGD (USA) from December 1997 with the potential HNTB arrangement coming on-stream. However, as mentioned, the HNTB arrangement lapsed by March 1998 with no further project work being required by Mark Amundson specifically on such project.
Accordingly, in consultation with instructions from my directors, as GMGD had paid all of Mark Amundson's agency fees in the financial year ended 30 June 1998 and, but for the HNTB assistance, all work had been rendered to GMGD, I instructed David Lowe to reflect such outgoings in the Austrade claim documents (which disclosure is in accordance with the financial accounts and tax returns for GMGD).
…".
Mr Elliott confirmed that the abovementioned Agreement between GMGD and AM&C, which was executed on 19 December 1995, has since been renewed annually. As regards the 2 current projects in the USA referred to in his statement, Mr Elliott identified those as golf courses known as "Old Silo" (formerly "Silver Creek") and "Wild Marsh" (formerly "Buffalo Run").
As regards the reference in his written statement to Mark Amundson's commencing also to act as agent for GMGD (USA) from December 1997, Mr Elliott explained that he was not thereby implying that GMGD itself ceased to operate in December 1997. He said that GMGD continued to operate throughout the 1997/98 year and continues to operate at the present time. He added that GMGD (USA) was a separate entity "which could be called upon for specific projects", but that "the total thrust of [their] business development in the USA was always GMGD". (Transcript, p46)
In cross-examination Mr Elliott was asked to explain the reasons for the establishment of GMGD (USA). He said that HNTB Corporation (with which GMGD had entered into a Cooperation Agreement in December 1997) was a "multi-discipline planning and architectural company" with 50 offices throughout the USA and it was felt that the association with HNTB Corporation would create opportunities for project work. He said that it was also felt that it might be advantageous, in securing project work from American clients, to utilise a company (GMGD (USA)) whose name indicated a connection with the USA. He added that it was not intended that all projects arising out of the association with HNTB Corporation would be developed by GMGD (USA) – instead, the utilisation of GMGD (USA) was regarded as an available option, to be determined on a project-by-project basis. He reiterated, however, that "the main thrust was always going to be GMGD at that time". (Transcript, p 48)
Mr Elliott was next questioned about the 2 current projects in the USA, referred to in his written statement. He said that one project – "Old Silo" in Kentucky – was contracted by GMGD, and the other project – "Wild Marsh/Buffalo Run" in Minnesota – was ultimately contracted by GMGD (USA). He said that "Old Silo" was their main project in the 1997/98 year but that "a lot of preamble planning work" on the "Wild Marsh/Buffalo Run" project also was done during that year. He added that at that time the "main thrust" was GMGD in relation to both projects, but that ultimately the "Wild Marsh/Buffalo Run" project was contracted to GMGD (USA) after the 1997/98 year.
David LoweDavid Lowe gave evidence by video from Queensland. He confirmed that he had prepared a written statement for the purpose of an audit by Austrade of GMGD's application for a grant under the EMDG Act for the 1997/98 year. The contents of that statement, which was tendered in evidence by the applicant (Exhibit A4), are as follows:
"… I am employed by Graham Marsh Golf Design (GMGD) as the Financial Controller for the company. My primary role in the Company is to maintain the accounting records of the Company in order to prepare monthly and annual management financial statements for the Directors. I am empowered to initially process transactions as I interpret them in accordance with general accounting principles but that final decisions on accounting treatment rests with the Directors of the Company. Preliminary financial statements are prepared by me and submitted to the Directors for finalisation and approval by them.
I am authorised to purchase small items to enable the Company to function on a day-to-day basis. I do not have authority to commit the Company to any major contractual obligations either revenue or expenditure wise. Any commitment of the Company to major obligations is only carried out after discussions with the Directors or General Manager. It is part of my duties to ensure that expenses are processed to enable their settlement.
My duties also included the preparation and completion of Statutory returns and applications for grants with the exception of the Company's Income Tax Return, which was handled by the Directors in Perth.
1998 EXPORT MARKET DEVELOPMENT GRANT APPLICATION
The audit of GMGD's application for an Export Market Development Grant (EMDG) for the year ended 30 June 1998 took place in our offices on 9th September 1998. It was conducted by Mr Nibbs and he had with him an assistant whose name I cannot recall.
Mr Nibbs was working through the application in a systematic manner asking for evidence, which was supplied, of payments and receipts to support the schedules attached to the application. When he got to Schedule 9, Related Company Provision, he asked whether there were any other companies in the group. I mentioned to him that there was also Graham Marsh Golf Design (USA) (GMGD (USA)).
There was a discussion on the role of GMGD (USA) during which I discussed, to the best of my knowledge, our working arrangement with HNTB and that any jobs Mark Amundson, our North American representative, signed up would be handled by the joint venture with GMGD providing our part of the services required via a sub-contracting arrangement with GMGD (USA). I had mentioned that no jobs had been signed to date and that the arrangement with HNTB was cooling.
…".
In his evidence-in-chief Mr Lowe confirmed that, as part of his duties to process GMGD's expenses, he received regular invoices from Mark Amundson and he duly processed them.
In cross-examination Mr Lowe acknowledged that GMGD (USA) had made an application for a grant under the EMDG Act for the 1998/99 year and that he had prepared that application. He confirmed that in the 1998/99 year the proportion of the total fees paid to Mark Amundson that related to the purposes of GMGD (USA) was 90%.
In re-examination Mr Lowe confirmed that GMGD did not make an application for a grant under the EMDG Act for the 1998/99 year because the relevant expenditure of GMGD in that year was below the minimum threshold to qualify for a grant.
Peter NibbsPeter Nibbs also gave evidence by video from Queensland. Mr Nibbs confirmed that he had prepared a written statement, dated 2 July 1999, for the purpose of these proceedings. The contents of that statement, which was tendered in evidence by the respondent (Exhibit R2), are as follows:
"1. Until my retirement in July 1998 I was employed as Manager Investigations in the Brisbane office of the Australian Trade Commission.
2. On 27 August 1998 the Applicant, Graham Marsh Golf Design Pty Ltd (GMGD) lodged a 1997/98 claim for export grant (EMDG claim) pursuant to the Export Market Development Grants Act 1997 (EMDG Act). The EMDG claim was allocated to me for investigation on 7 September 1998. The contact designated on the claim form was David Lowe, the Financial Controller of GMGD.
3. I contacted Mr Lowe on 7 September 1998 and arranged to visit the claimant on 9 September 1998.
4. I visited the claimant's office on 9 September 1998 and interviewed Mr Lowe. The purpose of my investigation was to establish that GMGD was eligible to receive an EMDG grant and that it had incurred eligible expenditure which would entitle it to a grant.
5. It is a normal part of investigations into an EMDG claim to enquire about the existence of other companies which are associated with, or related to, the claimant company. In response to my query on this point Mr Lowe advised me of a company, Graham Marsh Golf Design (USA) Pty Ltd (GMGD (USA)) which had been incorporated on 7 March 1997.
6. I asked Mr Lowe why this company had been incorporated and what role it would play in the future activities of GMGD. He informed me that it was established to be the principal in contracts expected to be won in America, the objective being to keep American business separate from all other business of the claimant company. Mr Lowe informed me that GMGD (USA) would not have any staff and that all necessary design work would be performed by GMGD which would supply its services direct to GMGD (USA) which would, in turn, supply services to the American buyer.
7. After receiving this information I continued with my investigation and, as far as my investigation enabled me to do so, verified that the expenditure claimed had, in fact, been incurred by GMGD. The expenditure claimed for overseas representation constituted, by far, the largest item of expenditure.
8. On the basis of this investigation I concluded that, although it may have incurred eligible expenditure for overseas representation, GMGD had not incurred the expenditure for overseas representation for an eligible purpose under the EMDG Act as it was not intended to be the principal in any export transactions resulting from that expenditure.
9. When I returned to my office after the meeting I prepared a file note of my discussion, a true copy of which is contained in the 'T' documents at page 47."The file note referred to in para 9 of Mr Nibbs' written statement is as follows (T4, p47):
"OVERSEAS REPRESENTATION
At the commencement of the investigation I asked Mr Lowe (Financial Controller) about related companies as a company named GVM Nominees Pty Ltd is mentioned in folio 98/9 but is not listed as a related company.
I also asked Mr Lowe if there were any more companies in the group. He mentioned Graham Marsh Golf Design (USA) Pty Ltd, which was incorporated on 7 March 1997 – see 98/15.
In response to my question as to the purpose of this company Mr Lowe advised that it was established to be the principal in contracts expected to be won in America, the idea being to keep American business separate from the rest of the world.
GMGD (USA) P/L would not have any staff and all design work would be done by the claimant company but the claimant would supply its services to GMGD (USA) P/L not to the American buyer.
The incorporation of GMGD (USA) P/L may also have something to do with the fact that the claimant has come to the conclusion that the only way it will gain work in America is if a financial investment is made in any golf courses it hopes to design in America – see US representative's comments at 98/40, para 2.
Given Mr Lowe's advice I can only conclude that the claimant's ongoing promotion in America via its US representative has the objective of gaining contracts for a related company not for the claimant. Accordingly, the expenditure claimed for the US representative is assessed as ineligible as the claimant company is not intended to be the principal in any export transactions in the US."In his examination-in-chief Mr Nibbs was asked whether he recalled any mention of an American company called HNTB in his discussion with Mr Lowe (referred to in his abovementioned written statement) and he responded that he did not.
In cross-examination Mr Nibbs explained that, after his retirement from Austrade in July 1998, he, at Austrade's request, did further work for Austrade as an Investigations Officer and it was in that capacity that, in September 1998, he investigated GMGD's application for a grant under the EMDG Act for the 1997/98 year. He confirmed that it was on the basis of his abovementioned discussion with Mr Lowe that he came to the conclusion that the whole of the expenditure claimed by GMGD for its USA representative (Mark Amundson) should be disallowed.
Mr Nibbs was referred to a report by Mark Amundson headed:
"GMGD REPORT – FEBRUARY 1998".
He confirmed that that was the document which he referred to as "98/40" in the penultimate paragraph of his abovementioned file note (set out in paragraph 27 above). The contents of that document (T4, p49) are (relevantly) as follows:
"The month of February brought some progress and a few new leads. We continue to work on the project in Kentucky, the project in South Dakota and have 2 new leads on projects in Wisconsin. I also attended the Golf Course Superintendents National Convention and Trade Show in Anaheim, CA.
The project in Kentucky has changed considerably since we first became involved in it. It is now at a point where the project is going to be completed as a private venture instead of a city owned golf course. The reason for the change is that public bond money will not be able to be used for the project thus the lower interest rates are not available. We are currently in final negotiations with the developer to secure the land for the golf course at no cost and receive some other compensations or concessions from the developer. I would anticipate that we would have an agreement in place in the next 10 days. The project will move forward with Graham and Bill Kulby (sic) as partners in the project. The concept is for GMGD to design the course, LUI to build it, and the partnership operate and manage the course. The financial aspects of the project are yet to be determined but there will be some cash put into the deal as well as debt incurred. The intention is for Graham and Bill to be 50/50 partners. In the long run this project will have the chance to be much more successful as a private venture than a public one and could prove to be a very successful venture. The goal is to get the agreement signed and then move forward with a schedule of starting construction in July or August of this year with an opening set for spring of 2000.
The project in South Dakota has moved forward this month. I have identified a person who is willing to consider taking on the cost of developing the golf course by himself. He has looked at the land and is very impressed. The current land owner is willing to donate the land for the golf course and lodge and then he will own and operate the hunting and fishing for the project. The landowner and I met with the Core of Engineers to discuss potential limitations for the project and we found very few limitations. In fact the Core was very excited about the potential project and willing to help. I see this as a very important project for GMGD in the fact that this golf course will get written up in every golf magazine because of the uniqueness of the land and the concept of the project. The Sand Hills Golf Course that Crenshaw did in Nebraska has gotten much publicity and this land and setting is better than the Sand Hills. The next step is to get the potential developer, Graham and Bill Kubly together to discuss the project. They will all be in Arizona in early April and I intend to arrange a meeting at that time. This could start by this fall with an opening in spring 2000. I would see GMGD getting a design fee for this as the potential developer is not necessarily looking for any partners to own the project with.
…".
Mark Amundson
Mark Amundson gave evidence by telephone from the USA. He confirmed that he had sworn an affidavit, dated 15 may 1999. The contents of that affidavit, which was tendered in evidence by the applicant (Exhibit A5), are as follows:
"1. I …carry on business in the United States under the trading name Amundson Marketing & Consulting;
2. I rendered overseas representation services to Graham Marsh Golf Design Pty Ltd (GMGD) throughout the 12 month period, 1 July 1997 to 30 June 1998;
3. I confirm that I was paid regularly throughout the abovementioned period and directly by GMGD for my services;
4. I confirm that our overseas representative services were never terminated at any time during this period and I continue to render such services to GMGD;
5. My mandate from GMGD is that GMGD provide full golf planning, design, implementation and supervision services to United States customers on a fixed fee basis and generally will not participate in any joint venture or equity ownership project."
Mr Amundson also confirmed that be had prepared a supplementary written statement dated 12 march 2001. The contents of that statement, which was also tendered in evidence by the applicant (Exhibit A6), are as follows:
"…
HNTB
During the latter half of 1997, the relationship with HNTB developed to the point where in December 1997, GMGD and HNTB signed a co-operation agreement. It was intended that HNTB would source projects in the USA in which Graham Marsh might be able to invest.
Unfortunately, HNTB simply did not produce the marketing leads for us that we expected. Further, Graham Marsh and I had concerns about the time they had available to devote to the relationship with us and the quality of some of their work.
That led to the agreement coming to an end, effectively, by March 1998.LUI
In the 1997/1998, year, I further developed a working relationship with Bill Kubly and his US company, Landscapes Unlimited.
This has proved to be fruitful and resulted in GMGD winning the contract to design the Old Silo project in the 1997/1998 year. Later, GMGD (USA) secured the contract for the Buffalo Run project in Minnesota, another project with Landscapes Unlimited.ROLE OF GMGD (USA)
I have never been involved in any decisions by the directors of GMGD and GMGD (USA) as to which entity would obtain the contract to design any particular golf course development.
Many golf course project opportunities exist in the US; some of these opportunities are for straight design work and others are for projects that may require an investment by Graham Marsh. Both sorts of opportunities were sourced by me and presented to me during the 1997/1998 year.
In my experience, either GMGD (USA) or GMGD could have been the eventual provider of the design services for the 'equity' projects in which Graham Marsh might have invested. For example, in the Old Silo project, GMGD provided its design services directly to the Limited Liability Company in which Graham Marsh has invested.
As I said in my earlier statement, my mandate from GMGD was that GMGD itself was, as a company, not interested in taking up any equity in any US project or participating in a US joint venture.ADDRESSING OF INVOICES AND HEADING OF MONTHLY REPORTS
Until November 1997, I addressed the monthly expense statements and invoices specifically to GMGD. From then on I did not specifically address these to GMGD because I knew that GMGD (USA) had been formed to potentially do business in the US, even though I was never responsible for making the decision as to which company a project would be assigned, and I thought it would be easier to just send one report and expense statement. The heading of these reports and expense statements was of no significant consequence.
Until April 1998, I produced my reports with a heading of 'GMGD'. From April 1998, I changed the heading to GMGD (USA) because of the same reasons stated above. There was no reason for the change other than for simplification on my part and so that I did not have to do two reports and two expense statements. I was still doing work for GMGD, just as I always had been.OLD SILO
In the 1997/1998 year, the major marketing project I was involved in for GMGD was the project in Kentucky known now as Old Silo, previously known as Mt Sterling and Silver Creek.
As it eventually developed, GMGD did the design work for this project for a US Limited Liability Company ('LLC') which became the project developer. Graham Marsh invested in the LLC, as did Landscapes Unlimited.
To advance this project during the 1997/1998 year, I travelled to Mt Sterling many times to move this project forward. The real estate developer was very inexperienced and it took many meetings with him to keep things going. We also had to have numerous meetings with the city of Mt Sterling as they were very inexperienced in this type of development. GMGD did a great deal of work with preliminary planning etc. to show these people so they could try and grasp the scope of this project. There had never been a project to (sic) this scope completed in the area previously.
This was the single project that occupied most of my time in the 1997/1998 year.ALBUQUERQUE
In the 1997/1998 year, I met with Roger Cox, a real estate developer who had a large parcel of land that he wanted to do a golf course and residential development on. I travelled to Albuquerque a number of items to present GMGD to them and to try and reach an agreement with Roger Cox to hire GMGD to design the proposed golf course. The proposed client took a great deal of time in making the decision but in the end chose a group that had done some of the preliminary work on the routing of the course.SOUTH DAKOTA
In the 1997/1998 year, I worked on a proposed project in South Dakota. The project was to develop a high-end resort out in the remote central region of South Dakota. I met with a variety of people and experts trying to move this project forward. The intent was for GMGD to design the project. Due to a variety of problems, the project never was taken to completion.OTHER PROJECTS
Throughout the 1997/1998 year, I was involved in the marketing of the services of GMGD in respect of many other potential projects that did not proceed (for various reasons). These other projects are referred to in my monthly reports. I was involved in the marketing of GMGD, sometimes peripherally, to developers of courses from the Canary Islands right through to Mexico.BUFFALO RUN
This is a project undertaken in association with Landscapes Unlimited. In the discussions concerning this project, it was anticipated that GMGD would provide the design for the necessary re-modelling of the course (and Graham Marsh would invest directly in the project at least to the same level as the design fee).
Subsequently, when a formal contract was prepared, GMGD (USA) was inserted as the company providing the design services. I was not involved in the decision to use GMGD (USA) for this project.
The marketing and development of this project occupied most of my time in the 1998/1999 year."
Mr Amundson confirmed that the contents of both his affidavit and his supplementary statement were true and accurate.
In cross-examination Mr Amundson was referred to the series of monthly reports he prepared during the 1997/98 year. The Tribunal notes that Mr Amundson made regular monthly reports for each of the months from October 1997 to June 1998 (inclusive): see Exhibit A3, pp49, 58-59, 78, 84-85, 92-93, 97-98, 105-106, 116-117, 119-120. The reports for the months of October 1997 and April – June 1998 are headed "GMGD (USA)", whereas the reports for the months of November – December 1997 and February – March 1998 are headed "GMGD". The heading of the relevant report for the month of January 1998 is simply "JANUARY 1998 REPORT", without a reference to either GMGD or GMGD (USA).
Mr Amundson said that he never made any distinction in his work between GMGD and GMGD (USA). Asked to what extent his activities were directed towards promoting the design of golf courses by "Graham Marsh Golf Design", on the one hand, and producing investment opportunities for Graham Marsh himself, on the other, Mr Amundson responded:
"My efforts were 100 per cent for Graham Marsh Golf Design to design the golf course because if Graham Marsh Golf Design does not design the golf courses then there would be no investment by Graham Marsh."
(Transcript, p118)
Later Mr Amundson said:
"…Graham Marsh Golf Design's interest is to design the golf course, just as Landscapes Unlimited's interest is to build the golf course …the ownership structure is decided upon after that, that's another matter, but the crux of the issue is that Graham Marsh Golf Design must get the contract to design the golf course and that is what all the efforts were made for in all my meetings."
(Transcript , p118)
The Issues
The general issue in this case is, of course, whether GMGD is entitled, pursuant to s4 of the EMDG Act, to a grant under that Act in respect of the grant year 1 July 1997 – 30 June 1998. The determination of that issue depends on whether GMGD has fulfilled the requirements specified in paras (a), (b) and (c) of s4. It being common ground that paras (a) and (c) have been satisfied in this case, the remaining question is whether GMGD has satisfied the requirements of para (b) of s4 – that is, whether GMGD incurred "eligible expenses" in the abovementioned grant year in relation to "eligible products". The answer to that question ultimately depends on the determination of the following issue:
whether the expenses, in the amount of $ 134,568.15, incurred by GMGD in the year 1July 1997 – 30 June 1998 in respect of the services rendered by AM&C were expenses in respect of an "eligible promotional activity" (as specified in s33 of the EMDG Act) for an "approved promotional purpose" (as explained in s37 of that Act) – namely (relevantly), "the purpose of creating, seeking or increasing demand or opportunity" in the USA for "eligible services supplied by" GMGD (s37(d)).
In order to determine that issue, it must also be determined:
whether the relevant "eligible services" supplied by GMGD were (relevantly) "eligible external services" (within the meaning of s25 (3) of the EMDG Act) – that is, services "supplied outside Australia to a person that is not a resident of Australia".
The Submissions
The primary submission made by Mr Atkinson (for GMGD) was that in the 1997/98 grant year AM&C was maintained by GMGD for an "approved promotional purpose", namely, to promote the "eligible external services" of GMGD to be supplied by GMGD outside Australia directly pursuant to contracts between GMGD and non-resident (USA) entities. In support of that submission Mr Atkinson submitted that the evidence before the Tribunal established that in the 1997/98 grant year Mark Amundson (of AM&C) was engaged principally in seeking to produce a contract between GMGD and a USA company whereby GMGD would design a golf course ("Old Silo") located in the USA, and provide other related services in the USA, for the benefit of that USA company. He also submitted that Mark Amundson's other activities in the USA in the 1997/98 grant year were also directed to securing golf course design work in the USA for GMGD. Accordingly, he submitted, GMGD was entitled to a grant under the EMDG Act by reason of the expenses incurred by it in the 1997/98 grant year in respect of AM&C.
Mr Atkinson also submitted, in the alternative, that even if GMGD supplied the relevant "eligible external services" to non-resident (USA) entities indirectly, through the interposition of GMGD (USA) in all contracts with USA entities, GMGD would still be entitled to a grant under the EMDG Act. He cited Re Southbank Corporation Pty Ltd and Australian Trade Commission (2000) 30 AAR 465 in support of the proposition that eligible external services may be "supplied" (within the meaning of ss25(3) and 37(d) of the EMDG Act) by one person to another even if there is no direct contractual relationship between those persons. Accordingly, he submitted that even if GMGD provided the relevant services to USA entities in the USA through the interposition of GMGD (USA) (which itself would be in a direct contractual relationship with the relevant USA entity regarding the provision of those services), GMGD would nevertheless have "supplied" those services to those USA entities, within the meaning of ss25(3) and 37(d) of the EMDG Act.
Mr Allanson (for Austrade) submitted that expenses incurred by GMGD in the 1997/98 grant year in respect of AM&C were not "eligible expenses" within the meaning of s29 of the EMDG Act. He submitted that such expenses incurred by GMGD were not "claimable expenses in respect of an eligible promotional activity" because AM&C had not been maintained by GMGD for an "approved promotional purpose" (within the meaning of s33 of the EMDG Act). He submitted that AM&C was not maintained by GMGD for the purpose of "creating, seeking or increasing demand or opportunity" in the USA for "eligible services supplies by" GMGD, within the meaning of s37(d) of the EMDG Act. Instead, he submitted, relevant services supplied by GMGD were supplied by it to GMGD (USA) (a "resident of Australia": see s114 of the EMDG Act) and were, accordingly, not "eligible services" within the meaning of s25 of the EMDG Act. Any relevant services "supplied outside Australia to a person that is not a resident of Australia" (within the meaning of s25(3) of the EMDG Act) in this case were, he submitted, supplied by GMGD (USA), and not by GMGD. Accordingly, he submitted, GMGD was not entitled, pursuant to s4 of the EMDG Act, to a grant under that Act for the 1997/98 grant year.
Consideration and FindingsFor the purpose of determining whether GMGD is entitled to a grant under the EMDG Act in respect of the 1997/98 grant year, the crucial issue which the Tribunal must determine is whether the expenses incurred by GMGD in relation to AM&C in the 1997/98 grant year were expenses in respect of "maintaining" AM&C "for the purpose of creating, seeking or increasing demand or opportunity in a foreign country" (namely the USA) for "services supplied by" GMGD itself – not GMGD (USA) – "outside Australia (namely, in the USA) to a person that is not a resident of Australia": see, in particular, ss33, 37(d) and 25(3) (respectively) of the EMDG Act. There is no dispute that the total amount of the abovementioned expenses incurred by GMGD in relation to AM&C in the 1997/98 grant year was $134, 568.15, and the Tribunal so finds.
On the basis of the documentary and oral evidence before it, the Tribunal finds that:
on 19 December 1995 GMGD entered into an "Agreement for Consulting Services" with AM&C whereby GMGD retained the services of AM&C "as its exclusive representative in the USA to promote interest from existing golf clubs and potential developers in GMGD's services" (which were described in the Agreement as "international design, construction and supervisory consulting services for golf course facilities and clubs") and, in consideration for the services to be performed by AM&C under the Agreement, GMGD agreed to pay AM&C a specified monthly fee and all reasonable expenses incurred by AM&C in the performance of its services;
that Agreement commenced on 1 January 1996 and has been renewed by the parties annually since that date;
the "overseas representation" expenses, in the total amount of $134,568.15, paid by GMDG to AM&C during the 1997/98 grant year were paid pursuant to that Agreement;
throughout the 1997/98 grant year AM&C (through Mark Amundson) continually promoted and marketed in the USA the relevant services provided by GMGD to persons resident in the USA.
As regards the lastmentioned finding, the Tribunal accepts the evidence of Mark Amundson that, during the 1997/98 grant year, he devoted most of his time to promoting and marketing the services of GMGD in relation to the "Old Silo" golf course project in Kentucky, USA but that he also devoted time during that year to promoting and marketing the services of GMGD in respect of proposed golf course projects in Albuquerque (New Mexico), South Dakota and other places in the USA, as well as in other parts of the world including Mexico and the Canary Islands.
As regards GMGD (USA), the Tribunal notes at the outset that there is no evidence before it that there was any formal contractual relationship between GMGD (USA) and AM&C, or that GMGD (USA) incurred any expenses by way of payments to AM&C, during the 1997/98 grant year. The Tribunal accepts the evidence of Mr Fernandes and Mr Elliott that GMGD (USA) was incorporated (on 7 March 1997) for the purpose of being the contracting party (instead of GMGD) in certain high-risk golf course projects in the USA (which might arise out of the then existing association between GMGD and HNTB Corporation) that were deemed by the directors of GMGD to be inappropriate for GMGD's direct involvement. The Tribunal also accepts the evidence of Mr Fernandes and Mr Elliott that during the 1997/98 grant year – in particular, from December 1997 (when the formal Cooperation Agreement between HNTB Corporation and GMGD was executed) until February/March 1998 (when the association between GMGD and HNTB Corporation effectively ceased) – AM&C were providing consulting and marketing services to GMGD (USA) as well as to GMGD. Indeed, it appears from the evidence of Mark Amundson, and from the monthly reports he provided to GMGD from October 1997 to June 1998, that he (on behalf of AM&C) was providing consulting and marketing services to both GMGD and GMGD (USA) throughout the 1997/98 grant year. His evidence was that he did not distinguish between GMGD and GMGD (USA) in his work and that the way he headed his monthly reports – "GMGD" or "GMGD (USA)" – was of "no significant consequence". Mr Amundson's evidence that during the 1997/98 grant year he rendered consulting and marketing services to GMGD (USA), however, in no way detracts from the fact (as already found by the Tribunal) that throughout that year he (on behalf of AM&C) continually promoted and marketed in the USA the golf course design and related services provided by GMGD in the USA .
On the basis of the whole of the evidence before it, the Tribunal finds that, pursuant to the Agreement for Consulting Services dated 19 December 1995, GMGD retained the services of AM&C in the USA in the 1997/98 grant year for the purpose of promoting interest from existing golf clubs and potential developers in GMGD's services (namely, international design, construction and supervisory consulting services for golf course facilities and clubs) in the USA, and incurred expenses in that year in the amount of $134,568.15 in maintaining AM&C and meeting the expenses incurred by AM&C in soliciting business for GMGD in the USA.
Accordingly, the Tribunal finds that the expenses incurred by GMGD in the 1997/98 grant year by way of payments made by GMGD to AM&C totalling $134,568.15 are "claimable expenses in respect of eligible promotional activities", within the meaning of s33 (see item 1 in the table) of the EMDG Act, in that they were incurred in maintaining, and meeting the expenses incurred by, AM&C in the USA for an "approved promotional purpose", namely, "creating, seeking or increasing demand or opportunity" in the USA for services supplied by GMGD outside Australia (namely, in the USA) to persons that are not residents of Australia (see s37(d) with s25(3) of the EMDG Act).
The Tribunal find therefore, that the abovementioned expenses incurred by GMGD in the 1997/98 grant year by way of payments made by GMGD to AM&C totalling $134,568.15 are "eligible expenses" within the meaning of s29 of the EMDG Act. That being the case, it follows that GMGD is entitled, pursuant to s4 of the EMDG Act, to a grant under that Act in respect of the 1997/98 grant year.
Given the abovementioned findings, it is not necessary for the Tribunal to consider and determine Mr Atkinson's alternative submission set out in paragraph 36 above.
Decision
For the above reasons the Tribunal sets aside the decision under review and, in substitution therefor, decides that GMGD is entitled, pursuant to s4 of the EMDG Act, to a grant under that Act, in respect of the grant year commencing on 1 July 1997 and ending on 30 June 1998, in the amount worked out under Pt 6 of that Act on the basis that the expenses incurred by GMGD during that year by way of payments made by GMGD to AM&C totalling $134,568.15 are "claimable expenses in respect of eligible promotional activities", within the meaning of s33 of that Act, and are therefore "eligible expenses", within the meaning of s29 of that Act, incurred by GMGD in that year.
I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor S D Hotop, Senior Member
Dr D Weerasooriya, MemberSigned:
.................................(sgd S Railton)...............................
AssociateDate/s of Hearing 19 & 20 February 2001 and 14 March 2001
Date of Decision 5 November 2001
Counsel for the Applicant Mr M Atkinson
Solicitor for the Applicant Healy Pynt
Counsel for the Respondent Mr J Allanson
Solicitor for the Respondent Australian Government Solicitor
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