Novotel Barossa Valley Resort and Australian Trade Commission

[2013] AATA 860

[2013] AATA 860

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/5285
Re	Novotel Barossa Valley Resort
APPLICANT
And	Australian Trade Commission
RESPONDENT

DECISION

Tribunal	Deputy President K Bean
Date	2 December 2013
Place	Adelaide

The Tribunal declines to make the direction sought by the respondent.

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

Deputy President K Bean

CATCHWORDS

PRACTICE AND PROCEDURE – Application for Export Market Development Grant – Applicant initially contended its investors were in a partnership – Partnership argument subsequently withdrawn – Respondent sought Tribunal direction that the investors be notified they had been held out as partners – Whether necessary for Tribunal to contact investors for purposes of proceedings – Whether Tribunal has an obligation to notify investors of arguments previously advanced on their behalf – Tribunal declined to make direction sought.

LEGISLATION

Partnership Act 1891 (SA), s 14

Administrative Appeals Tribunal Act 1975, s 39

Export Market Development Grants Act 1997

CASES

Re VBN and Australian Prudential Regulation Authority (2006) 92 ALD 259

Applicant A26 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1050

REASONS FOR DECISION

Deputy President K Bean

2 December 2013

INTRODUCTION

1. The substantive application the subject of these proceedings relates to a request by the applicant (the Resort) for review of a decision of the respondent dated 25 October 2012, in which the respondent denied the Resort’s request for an Export Market Development Grant (EMDG).

2. A number of preliminary issues have arisen in the proceedings, one of which is the subject of this interlocutory decision.  In order to explain that issue, it is necessary to briefly explain the circumstances in which it arose.

   BACKGROUND

3. One of the bases for the Resort’s application for an EMDG was that it was “a partnership regulated by an Australian Law”,[1] and that contention was initially pressed on behalf of the Resort in these proceedings.[2]  In response to that contention, the respondent argued that in order to test the Resort’s assertion as to the existence of a partnership, it was necessary for contact to be made with each of the 140 investors in the Resort whom the Resort contended were partners in it.

   [1] T16/158.

   [2] Applicant’s Statement of Facts, Issues and Contentions, 3 May 2013.

4. After hearing argument on this issue, on 31 July 2013, I made the following Direction:

   THE TRIBUNAL DIRECTS that:

   1.The applicant is to file and serve statements from each of the 140 investors in the applicant at the time of the application pursuant to the Export Market Development Grants Act 1997 the subject of these proceedings addressing the following matters:

   (a)whether at that time they regarded themselves as being in a partnership with each of the 139 other investors, within the meaning of the Partnership Act 1891 (SA) (as distinct from being in a joint venture which is regarded as a partnership for tax purposes);

   (b)whether they are happy to be held out as a partner of the other investors, and understand the implications of this, including the implications which arise by virtue of section 14 of the Partnership Act 1891 (SA);

   (c)whether and to what extent they are aware of and understand the nature of these proceedings and whether they wish to be made a party to the proceedings;

   2.This matter be listed for a further directions hearing by telephone on 15 August 2013 at 10:00 am; and

   3.The parties are at liberty to apply.

5. At a subsequent Directions Hearing convened for the purpose of discussing the time-frame within which the proposed statements were to be filed and served, Mr Hamilton, who appeared on behalf of the Resort, advised that the Resort had decided not to pursue the “partnership argument”, but would continue to pursue an argument that the Resort was entitled to an EMDG on the basis that the “Responsible Entity” charged with the day-to-day management of the Resort was a trustee for the investors.

6. In response to the Resort adopting that position, the respondent asked me to rule that the 140 investors in the Resort should be notified of the claim which had been made on their behalf in these proceedings, that they were partners under the law of South Australia.  The respondent argues that the Tribunal is obliged to ensure that the investors are notified of this argument, even though it is no longer pursued on their behalf.  It is this issue which is the subject of this decision, as the respondent has requested a formal ruling on the point, together with written reasons.

7. I understand the respondent’s request to be for a direction that the Resort contact the investors and advise them of the argument which has been put on their behalf, and in seeking such a ruling, the respondent relies in part on its obligations as a model litigant.  For his part, Mr Hamilton has indicated that if such a direction is made, he is instructed to withdraw the Resort’s substantive application.

8. I propose to now address the issue upon which a ruling has been sought, having regard to the contentions and authorities advanced by the respondent.

   SHOULD THE TRIBUNAL MAKE A DIRECTION REQUIRING CONTACT TO BE MADE WITH THE INVESTORS IN THE RESORT?

   The respondent’s contentions

9. In support of its contention that the Tribunal should direct that contact be made with the investors, the respondent relies upon the decision of Deputy President Forgie in ReVBN and Australian Prudential Regulation Authority.[3]  In that decision, in determining whether the respondent was “circumscribed” by its Statement of Facts and Contentions, the Deputy President made reference to the respondent’s obligation to act as a model litigant.  The Deputy President also made reference to the respondent’s obligation to assist the Tribunal and the obligation on the Tribunal to ensure that “every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case”.[4]  In its written contentions relating to a proposed letter being sent to the investors, the respondent argued that its duty to act honestly and fairly “requires notification to the 140 investors of the claim made on behalf of their representative (Mr Hamilton) that they are considered partners under the law of South Australia.”[5]

   [3] (2006) 92 ALD 259, at [246]-[254].

   [4] Administrative Appeals Tribunal Act 1975, s 39.

   [5] Respondent’s contentions relating to letter to shareholders, filed on 26 July 2013, [2.1].

10. The respondent also argues that, because they have been held out as partners in the context of these proceedings, and because s 14 of the Partnership Act 1891 (SA) has the effect that a person who knowingly allows themselves to be held out as a partner can potentially be held liable as a partner, “the legal position of the investors, above and beyond the current Tribunal proceedings, has already arguably been affected”.[6]  The respondent argues that although “the act of holding out has already occurred … it is open to each of the investors to state that their consent has not been given for such a holding out (or alternatively to agree to be held out in this way)”.[7]  The respondent further contends that:

    Each of the investors is being put in the position of being denied this opportunity to respond.  However, they may eventually be appraised of this ‘holding out’ by the publication of the Tribunal’s decision, which will be a matter of public record.

    More adversely, they may be appraised of this holding out if and when a claim is being made about their liability as partners, having previously been held out as such.

    8.1  In this situation, and with hindsight, the opportunity to resist such a claim to have been held out as partners will include whether (and what) the investors stated to the Tribunal in response to this proposition when asked to do so.

    8.2  In this situation, the Tribunal has an onerous responsibility to ensure that the investors have the opportunity to respond to this alleged holding out.

    8.3  It may be they are content to be held out as partners in return for the financial benefit of doing so, and this opportunity should also not be denied to them.[8]

    [6] Respondent’s contentions, above n 5, [5.1].

    [7] Respondent’s contentions, above n 5, [6].

    [8] Respondent’s contentions, above n 5, [7]-[8].

11. In addition, the respondent has also contended that the Resort’s proposal to not press an argument that the investors in the Resort are in partnership with one another is “invalid unless the 140 investors who were integral to the original application have given their informed consent.”[9]  In support of that contention, the respondent relies upon observations of his Honour Justice Mansfield in Applicant A26 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs.[10]  In that matter, his Honour found he had power to set aside a Notice of Discontinuance which had been filed without instructions.  The respondent has also argued that Mr Hamilton should be asked to explain why he has not previously made known to the investors in the Resort that they have been put forward as being in partnership in the context of these proceedings.

    Consideration

    [9] Respondent’s contentions relating to letter to shareholders, including authorities, filed on 23 August 2013, footnote 6.

    [10] [2003] FCA 1050, at [21]-[23].

    Is there a need for contact to be made with the investors for the purposes of this application?

12. The contentions put forward by the respondent raise some relatively complex issues.  There is no issue that the respondent is subject to model litigant obligations and has an obligation to assist the Tribunal.  It is also clear that the investors in the Resort have been put forward as being in partnership with one another, both in the context of the original application to the respondent and in the context of these proceedings.

13. However, the respondent has consistently argued that the investors were not in partnership and Mr Hamilton has now indicated that the Resort does not wish to press an argument that the investors are or were partners.  In circumstances where both parties effectively agree that the Tribunal should not conclude that the investors are or were partners, I am not satisfied that it would be appropriate for the Tribunal to require further inquiries to be made, or make its own inquiries, as to whether or not the investors are or were partners.

14. However, that leaves two questions as follows:

    (a)whether in the circumstances outlined above, the Tribunal has any obligation to ensure that the investors are made aware of the proceedings and the arguments and representations made in them; and

    (b)whether the Tribunal should accept without further inquiry Mr Hamilton’s indication that the Resort does not wish to press an argument that the investors are or were in partnership with one another.

    Is the Tribunal obliged to ensure the investors are notified of the arguments put on their behalf?

15. As I understand it, Mr Hamilton is instructed by the Responsible Entity with respect to the Resort, which was Arena Investment Management Ltd and is now Property Investment Management Limited.  Under the terms of a deed to which all investors in the Resort are parties, the Responsible Entity is responsible for all aspects of the day-to-day management of the Resort.[11]

    [11] T3/31 cl 3.1(c)-(e) read with Constitution cl 4.1 and cl 20.

16. The question which arises therefore is whether, in circumstances where the investors have authorised the Responsible Entity to manage the Resort on their behalf, and the Responsible Entity has authorised Mr Hamilton to act for it in these proceedings, it is necessary or appropriate for the Tribunal to ensure direct communication with the investors about an issue which has arisen in the proceedings.  The respondent contends that this is necessary in order to avoid potential harm to the investors which may flow from them having been held out as partners, in an application form provided to the respondent, and in documentation filed and served in the course of these proceedings.  How this “holding out” is likely to come to the attention of anyone other than the respondent and the Tribunal (other than as a result of publication of this decision) remains unclear.

17. As I have indicated above, I am not satisfied that there is any need for the Tribunal to communicate with or require communication to be made with the investors for the purposes of resolving the application before the Tribunal.  The only issue is whether the Tribunal should make a direction of the kind sought by the respondent with a view to obviating potential harm to the investors.  After careful consideration however, I have concluded that in all of the circumstances, it would probably be beyond the power of the Tribunal to make such a direction.  When all is said and done, the Tribunal is of course an administrative decision-maker.  Whilst the Tribunal has power to make directions, that power is intended to be exercised for purposes connected with resolving an application before it.

18. In all the circumstances, I am not satisfied that the Tribunal has power to direct that communication be made with third parties, or indeed with the “clients” of duly authorised representatives in proceedings, for purposes other than the progression and resolution of an application before the Tribunal.  Further, even if the Tribunal would have power to make such a direction, I am not satisfied that it would be appropriate for the Tribunal to make the direction sought by the respondent in the circumstances of this application.

19. There have undoubtedly been some unusual aspects of this application, and the material before me would suggest that the contention was put on behalf of the investors that they were in partnership with one another, without reference to the investors themselves.  A suggestion that communication be made with the investors has resulted, first, in an indication from Mr Hamilton that his client did not wish to press the partnership argument, and subsequently, an indication that if a direction was made that communication take place with the investors, the application would be withdrawn.  However, I am not satisfied that these events give rise to an obligation on the part of the Tribunal to ensure communication with the investors about these matters, in circumstances where the question of whether the investors are or were in partnership is no longer a live issue in the proceedings.  Equally, I am not satisfied in all the circumstances that the Tribunal should direct Mr Hamilton to explain his apparent lack of communication with the investors in relation to the partnership issue.

    Should the Tribunal accept the Resort’s concession that it does not wish to press the partnership argument?

20. As I have indicated above, it is my understanding that Mr Hamilton is duly authorised to act on behalf of the Responsible Entity, which in turn is charged with the day-to-day management of the Resort,[12] and the respondent has not contended otherwise. As I understand it, Mr Hamilton has been instructed not to argue that the investors are or were in partnership with one another for the purposes of these proceedings. That concession is consistent with the position taken by the respondent in the proceedings that the investors have not at any time been in partnership with one another.

    [12] See above n 11.

21. The Tribunal is not obliged to accept concessions made by the parties, nor is it obliged to independently investigate every issue regardless of the positions taken by the parties.  On the material before me, it appears that the individual investors, or most of them, are not aware of these proceedings or the arguments which have been advanced in the proceedings.  However, they have effectively authorised the Responsible Entity to conduct the proceedings and the current Responsible Entity has apparently given instructions not to press an argument that they are in partnership with one another.

22. I have no reason to believe that this concession was made by Mr Hamilton without instructions from the Responsible Entity, or that the Responsible Entity is not authorised to conduct the affairs of the Resort.  Accordingly, while it is conceivable that there could be circumstances in which it would not be appropriate for the Tribunal to accept a concession made by a party, including where the Tribunal suspected the concession was not properly authorised or informed, I am not persuaded that I should not accept Mr Hamilton’s concession.  As I have previously indicated to the parties, if the question of whether the investors are or were in partnership had remained a live issue in the proceedings, I would have considered it necessary to advise the investors of the proceedings and also seek their response to questions relating to the partnership issue.  However, in circumstances where there is no live issue between the parties with respect to that question, and little before the Tribunal to suggest that the investors should be regarded as partners, I am satisfied that it is appropriate for me to accept Mr Hamilton’s concession on behalf of his client that the investors are not and were not in partnership, and the application cannot succeed to the extent that it relies upon the contrary proposition.

    CONCLUSION

23. I have accordingly concluded that it would not be appropriate for the Tribunal to direct that communication take place with the investors, as requested by the respondent, and I have decided to decline to make such a direction.

    DECISION

24. The Tribunal declines to make the direction sought by the respondent.

I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean.

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

Associate

Dated 2 December 2013

Date of directions hearing 15 August 2013 

Advocate for the applicant                  Mr S Hamilton

Solicitor for the respondent                 Mr L Leerdam

DLA Piper Australia