Proclaim Management Solutions Pty Ltd and Australian Trade Commission

[2007] AATA 1113

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1113

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2006/587

GENERAL ADMINISTRATIVE DIVISION		)
Re		PROCLAIM MANAGEMENT SOLUTIONS PTY LTD

Applicant

And AUSTRALIAN TRADE COMMISSION

Respondent

DECISION

Tribunal G.D. Friedman, Senior Member

Date30 January 2007

PlaceMelbourne

Decision For reasons given orally at the hearing the Tribunal affirms the decision under review.  

(sgd) G. D. Friedman

Senior Member

EXPORT MARKET DEVELOPMENT GRANTS - claim management company - provision of services to overseas insurers - whether supplied outside Australia  

Export Market Development Grants Act 1997 s 25(3)

Graham Marsh Golf Design Pty Ltd v Australian Trade Commission [2001] AATA 916

Re Associated Marine Group and Export Development Grants Board (1983) 5 ALD 407

REASONS FOR DECISION

30 January 2007 G.D. Friedman, Senior Member

1.        Proclaim Management Solutions Pty Ltd (Proclaim) applied for an export market development grant in 2004-05 in relation to its supply of claim management services to insurers based in London, United Kingdom.  The Australian Trade Commission refused the application on the grounds that the service was supplied in Australia, so the company was not eligible for a grant.  Proclaim seeks review of the decision.

ISSUE

2.        The issue before the Tribunal is whether the service provided by Proclaim was supplied outside Australia.

LEGISLATIVE FRAMEWORK

3. Section 25(3) of the Export Market Development Grants Act 1997 (the Act) 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.

PROCLAIM’S BUSINESS ACTIVITIES

4.        Proclaim was established in 1999 by Mr J. Broome and provides outsourced claims management solutions to companies that are self-insured, and to local and overseas insurers.  The company’s annual turnover is more $3 million and export income has grown to between 15 to 20 per cent of total revenue.

5.        Mr Broome told the Tribunal that in 2001 the company commenced exporting its services to insurers based in London, and has been successful in handling small claims in Australia on behalf of insurers as well as providing consultancy services.  He said that Proclaim applied for an export market development grant in 2004-05 to assist its delivery of services to the London market and to explore other business opportunities.  Mr Broome stated that the services included managing incidents and claims in Australia on behalf of London insurers; managing claim funds on behalf of London insurers; reporting incidents, claims and financial transactions to London; and providing risk profiles and benchmarks through reports to London.

6.        Mr Broome submitted that the company supplied a claim management service to its London clients and the supply was consumed in London, so the service was supplied outside Australia.  He stated that the supply should be directed to where the service is supplied to, rather than where it comes from, because if a service is supplied it must, by extension, be supplied to the receiver of the service.  He explained that Proclaim was not supplying a service other than at the request of and to its overseas clients, hence the company was supplying the service from Australia but outside Australia.  Mr Broome also suggested that the company has been discriminated against because it was supplying a service rather than a more tangible product such as wine.

WERE PROCLAIM’S SERVICES SUPPLIED OUTSIDE AUSTRALIA?

7.        The Oxford Dictionary defines supply in the transitive verb sense as, among other things:

To help, aid, assist, to succour, relieve, to support, maintain…

To fulfil, satisfy (a need or want) by furnishing what is wanted. 

In view of this definition the Tribunal accepts that the word should be given a reasonably wide meaning, and is more than to deliver something to somebody at a certain time.

8.        Proclaim provides services to clients, including a London-based insurance company and satisfies the needs of that client.  This is based on a contractual arrangement which specifies a range of provisions relating to various aspects of the products including place and method of delivery, jurisdiction and dealing with disputes.  In satisfying the terms of its contractual agreement Proclaim provides a range of services that help, assist and maintain, so that the range of activities goes beyond the mere delivery of services to the client.

9.        In Graham Marsh Golf Design Pty Ltd v Australian Trade Commission [2001] AATA 916 the Tribunal held that the applicant provided marketing and consultancy services to golf course projects in the USA. In Re Associated Marine Group and Export Development Grants Board (1983) 5 ALD 407 the Tribunal held that the applicant supplied eligible services outside Australia by providing vessels for charter by overseas customers.

10.      Although Proclaim’s client is London-based, and claims may be adjusted from London, the Tribunal finds that the services were provided in Australia for incidents or events that occurred in Australia, and processing of the claims was carried out in Australia and legal rights arose in Australia.  For these reasons the Tribunal finds that the service provided by Proclaim was not supplied outside Australia and was not an eligible external service within the meaning of s 25(3) of the Act. The Tribunal does not consider that Proclaim has been discriminated against in any way. Clearly products such as wine that are exported from Australia are supplied outside Australia.

DECISION

11.      For reasons given orally at the hearing the Tribunal affirms the decision under review.

I certify that the eleven [11] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

(sgd)        Lydia Zozula

Associate

Date of hearing:  30 January 2007
Date of decision:  30 January 2007
Advocate for applicant:                Mr J. Broome
Counsel for respondent:             Mr P. Ginnane

Solicitor for respondent:              Collins House Legal