Australian Trade Commission v Hellay Laboratories Pty Ltd [2001] FCA 79 (16 February 2001)

Last Updated: 27 February 2001

FEDERAL COURT OF AUSTRALIA

Australian Trade Commission v Hellay Laboratories Pty Ltd

[2001] FCA 79

ADMINISTRATIVE LAW - application for review of decision of Administrative Appeals Tribunal - whether Tribunal erred in construction of the phrase "activity of engaging as a consultant on a short-term basis".

WORDS & PHRASES: "Short-term basis"

Export Market Development Grants Act 1997 (Cth), ss 3,29,33,37

Re Dinnet Holdings Pty Ltd and Australian Trade Commission (1998) 28 AAR 185, approved.

Re Robert Andrew Gordon Pottery Pty Ltd and Australian Trade Commission (1999) 55 ALD 551, approved.

AUSTRALIAN TRADE COMMISSION v HELLAY LABORATORIES PTY LTD

V544 of 2000

NORTH J

16 FEBRUARY 2001

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 544 OF 2000

BETWEEN:	AUSTRALIAN TRADE COMMISSION APPLICANT
AND:	HELLAY LABORATORIES PTY LTD RESPONDENT
JUDGE:	NORTH J
DATE OF ORDER:	16 FEBRUARY 2001
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal is dismissed.

2. The appellant is to pay the respondent's costs of and incidental to the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 544 OF 2000

BETWEEN:	AUSTRALIAN TRADE COMMISSION APPLICANT
AND:	HELLAY LABORATORIES PTY LTD RESPONDENT

JUDGE:	NORTH J
DATE:	16 FEBRUARY 2001
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

1 This is an appeal brought by the Australian Trade Commission (ATC) against a decision made by the Administrative Appeals Tribunal (the Tribunal) on 29 June 2000.

2 The application is brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), which allows a party to a proceeding in the Tribunal to "appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding."

3 The respondent, Hellay Laboratories Pty Ltd (Hellay), lodged a claim for a grant under the Export Market Development Grants Act 1997 (Cth) (the Act) for the 1996-97 grant year. The Tribunal found that consultancy fees of $79,452.00 paid by Hellay to a marketing consultant, Austprom International Pty Ltd (Austprom) were eligible expenses under Part 5 of the Act. The central issue on which the decision rested was whether, as the Tribunal found, Hellay undertook the activity of engaging Austprom on a short-term basis.

4 In consequence of this conclusion the Tribunal set aside the decision of the delegate of ATC which was under review and substituted that decision with a decision that the consultancy fees were eligible expenses for the purpose of a grant for the 1996-97 grant year.

LEGISLATION

5 The object of the Act is described in s 3 as follows:

"... to bring benefits to Australia by encouraging the creation, development and expansion of foreign markets for Australian goods, services, intellectual property and know-how. It does so by providing for an assistance scheme under which small and medium Australian exporters committed to and capable of seeking out and developing export business are repaid part of their expenses incurred in promoting those products."

6 Section 4 of the Act entitles a person to a grant if the person has, inter alia, incurred "eligible expenses" in a grant year.

7 Part 5 of the Act (ss 28-59) deals with eligible expenses. Section 29(a) 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 ..."

8 While only Item 6 in the table to s 33 is directly in issue, it is necessary to understand the entire scope of the table. Section 33 and the table provide as follows:

"33.

(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 1 Column 2 Column3

Item Activity Expenses

1 maintaining an overseas so much of the expenses

representative on a long term basis incurred by the applicant

in a foreign country to the extent to in a grant year in :

which the representative is (a) maintaining the

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

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

2 any visit (marketing visit) made by all expenses:

the applicant or its agent to any (a) incurred by the

place in or outside Australia to applicant in payments

the extent to which the visit is to persons that, in

made for an approved Austrade's opinion, were

promotional purpose not closely related to the applicant; and

(b) that are allowable expenses under section 34

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

3 any communication by the all reasonable expenses

applicant or its agent with a incurred by the applicant potential buyer or a distributor, in payment to persons representative or consultant to the that, in Austrade's extent to which the communication opinion, were not closely

is made for an approved related to the applicant

promotional purpose

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

4 the provision, primarily for an all reasonable expenses

approved promotional purpose, incurred by the applicant of free samples to a person that that are attributable to

is not a resident of Australia, as the actual cost of

follows: providing the samples

(a) provision outside Australia of

samples relating to any eligible

product of the applicant;

(b) provision in Australia of samples

relating to eligible tourism services

supplied by the applicant

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

5 participation by the applicant or all reasonable expenses

its agent in a trade fair, or the incurred by the applicant

provision by the applicant or its in payments to persons

agent of promotional literature that, in Austrade's

or other advertising material, opinion, were not closely

to the extent to which this is done related to the applicant

for an approved promotional purpose

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

6 engaging as a consultant on a all reasonable expenses

short term basis (either in or incurred by the applicant

outside Australia) a person that,

in Austrade's opinion, is not closely

related to the applicant, to the extent

to which the person undertakes

market research, or marketing

activities, related to an approved

promotional purpose

____________________________________________________________"

9 The term "approved promotional purpose" referred to in Item 6 is explained in Subdivision 3 of Division 2 of Part 5 of the Act (ss 36-38). It is sufficient for present purposes to set out s 37(a) which provides:

"For the purpose 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:

(a) eligible goods owned by the applicant and that the applicant intends to sell for export or to export and sell ..."

THE DECISION OF THE TRIBUNAL

10 After setting out the relevant legislation, the Tribunal stated that the only question in issue was whether in relation to the claim for the 1996-97 grant year Hellay engaged Austprom as a consultant on a short term basis within the meaning of Item 6 in the table in s 33.

11 The Tribunal then made the following findings of fact:

"10. ...Hellay is a privately owned Australian company which was established in 1990. It had a modern manufacturing facility in Dandenong, a Melbourne south-eastern suburb. Chemical additives, pharmaceutical, health-food, food and cosmetic products are manufactured. Hellay operates as a licensed manufacturer and toll manufacturer for large and small companies, including several well known brands. Hellay also wholesales products in Australia on its own behalf. Manufacturing, either under licence or for wholesaling is Hellay's core activity.

11. The Managing Director of Hellay, Dr Douglas Hawley, who has a PhD in biochemistry, decided in 1995 to investigate business opportunities in Asia and approached Mr Ross Harvey, the principal director of Austprom, for assistance in undertaking a preliminary assessment of the export potential into Asia in two broad categories, one for cereal based products and the other chocolate based drinks.

12. Austprom is a consulting company which provides business development and marketing advice and services to Australian food and beverage companies seeking to market their products in South East Asia.

13. The first substantive discussions between Dr Hawley and Mr Harvey took place in September 1995. Austprom presented Hellay with a business development and marketing proposal (Exh. D). The document, which contained broad ranging proposals for marketing initiatives by Hellay throughout South East Asia, concluded:

`8.1 I trust the above proposal sets out the broad parameters of the project. Fine tuning and detailed planning is obviously necessary but the project is a major undertaking and necessitates long term corporation commitment. The above is the start of a project which will change the structure and significantly enhance the value of Hellay Laboratories.'

14. Austprom hoped to develop a long term relationship with Hellay which if established would be of mutual benefit to Austprom and Hellay. Indeed the report suggested that at a future time it was possible that consideration could be given to Mr Harvey joining Hellay. In evidence Dr Hawley said that that particular matter had at no time been taken further.

15. On 29 January 1996 Dr Hawley wrote to Mr Harvey in the following terms:

`Further to our recent discussions and your proposal concerning assistance to Hellay in our export plans to Asia, I would like to confirm our decision for Hellay to engage Austprom International for this project along the guidelines outlined in your proposal.

As discussed with you, we would like to initially limit our expenditure to a net figure of approximately $60,000 taking into account any benefits received from export market development grants.'

16. The offer was accepted and during the period January - June 1996, Austprom conducted extensive field and consumer research into the export potential to Asia of various nutritious cereal mix and drink products and produced a number of reports, including a project status report dated 4 March 1996 which revealed that there was significant potential for Hellay's products in Asia. This report indicated that further technical research and development needed to be carried out by Hellay before several identified export projects could be advanced. According to Dr Hawley, Austprom's role was to provide specific input into testing the market viability of the products while Hellay was responsible for direct liaison with the potential customer on technical research and development, commercial negotiations and logistics.

17. Hellay obtained a grant under the Act for the grant year 1995-96 for consultancy fees paid to Austprom during the period January - June 1996.

18. On 1 July 1996 Austprom provided a Trip Report to Hellay (Exh. F Attachment 2) which essentially summarised the identified opportunities. This report identified eleven distinct major projects with seven different companies in five different countries. Following further discussions, Austprom was engaged to proceed with further work on three projects considered to be viable, a cereal beverage in Singapore, a multigrain cereal porridge in the Philippines and a chocolate beverage product in Singapore. Austprom recommended that the commercialisation phase for these products should commence immediately. Hellay decided that the other projects were to be put on hold or progressed slowly as they were regarded as secondary.

19. The report also proposed additional consultancy work to be performed by Austprom for Hellay. It was Dr Hawley's evidence that he did not then nor subsequently commit to the extra work as a total package. He believed that the export opportunities that Austprom had uncovered were worth pursuing, but as Hellay's resources were limited, it would be better for Hellay to play a bigger role implementing its export plan than that proposed by Austprom. Accordingly, Hellay decided to engage Austprom for specific assignments where assistance was required, which was the basis of the work undertaken by Austprom in the 1996-97 grant year.

20. During the 1996-97 grant year six overseas assignments were undertaken by Austprom on behalf of Hellay each one separately agreed to by Dr Hawley. These are listed in Table 1 to the applicant's Statement of Facts, Matters and Contentions. Each assignment had one or two prime objectives related to the key projects referred to above. Other secondary objectives usually related to secondary projects were generally included in the overseas visits because it made financial sense that they be advanced when Mr Harvey was in the region.

21. The role of Austprom in advancing the projects was confined to particular aspects of the marketing plan as a cost control mechanism relative to Hellay's responsibilities in carrying out the plan. The work undertaken by Austprom for Hellay during the 1996-97 grant year is detailed in paragraph 3 of Mr Harvey's statement (Exh.C). It is unnecessary to recite the detail here. At the end of the 1996-97 grant year Hellay had no commitment to Austprom and there was no understanding of further work that Austprom might undertake for Hellay.

22. Mr Harvey's evidence corroborated Dr Hawley as to the business arrangement between Hellay and Austprom. Dr Hawley approved the expenditure at each step and did not approve all the proposals / recommendations made by Austprom. Mr Harvey understood that Austprom did not have an ongoing retainer and that the approval and agreement of Dr Hawley was required before any proposed assignment could be commenced. The arrangements ranged from advanced marketing support for hot cereal products for the Philippines to exploratory development work on instant pre-packed meals for Indonesia and China. As well several variations and formulations of chocolate beverage products were being developed with differing product characteristics for particular countries. In evidence both Dr Hawley and Mr Harvey impressed as credible witnesses."

12 The Tribunal then referred to two previous decisions of the Tribunal concerning the meaning of the expression "short term" engagement. It concluded that each of those cases was decided on its own particular facts.

13 The Tribunal next observed that the Act did not stipulate a maximum period which would limit the nature of a short term consultancy. It referred to a public policy ruling made in 1997 and which was designed to clarify the interpretation of "short term" for the guidance of officers in determining whether a consultant has been engaged on a short term basis. Under the heading "Key assessment principles" the policy ruling reads:

* A consulting assignment lasting up to 3 months will generally be eligible. In particular cases the assignment may extend over a period of up to 12 months.

* Consultancies will not be regarded as short term where a consultant is engaged on an ongoing basis.

* Where the consultant is not engaged on an ongoing basis, one assignment per consultant will be allowed except in particular circumstances.

Austrade will allow any consulting arrangement which falls into one of the following categories:

1. An assignment lasting less than 3 months. Only one assignment per consultant except in the following circumstances:

* the consultant's assignments are clearly for different markets (countries) or for different products; and

* the consultant works for other clients, and

* there is a gap between consulting assignments of at least one month, and there is no arrangement in place (written or unwritten) for the applicant to use the consultant on an ongoing basis. Repeated assignments or renewed arrangements could indicate that there is an ongoing arrangement in place.

2. An assignment lasting 3-12 months which is for a one-off project and which is based on a specified product and market region or on other specified terms. Austrade will only allow one assignment per consultant and no renewals would be allowed for this category of assignment."

14 The Tribunal indicated that the delegate's decision had been based on the policy ruling. However, the policy ruling did not have legislative force and it was necessary for the Tribunal to consider all relevant factors "including (but not limited to) the nature of the relationship between the applicant and the consultant, the particular needs of the business the applicant is developing and the purpose for which the consultant was engaged" (par 30).

15 Then followed a general discussion concerning the construction of the words "short term". First, the Tribunal referred to the Macquarie Dictionary definition of the words and concluded that a "short" period of time is a relative concept. Then the Tribunal observed that the meaning depended upon the context in which it was used. Also, the expression was to be given its ordinary meaning, there being no suggestion that it had some special meaning. In the end the Tribunal concluded that the expression referred to "a comparatively short time".

16 Lastly, the Tribunal stated the reasons it found that Hellay engaged Austprom as a consultant on a short term basis in the 1996-97 grant year. It said:

"34. Consultancy on a short term basis is not, in the present circumstances, capable of a precise definition because there is no benchmark for time in the marketing activities of the products being developed by Hellay. Its meaning has to be considered in the context of the activities undertaken. The object and purpose of the Act is to encourage export markets for Australian goods, by providing an assistance scheme to small and medium enterprises. Establishing a product presence in Asia requires a commitment over time. This is recognised in Austrade advice and publications. It was clearly in Mr Harvey's mind in making his initial proposals to Hellay and was certainly understood by Dr Hawley. Viewed in this way, Austprom's work for Hellay covered a comparatively short period of time given the product development and marketing requirements for the particular markets. That is not to say that it is necessary to look to the purpose of the Act in determining the meaning of the term which is to be found in its ordinary meaning.

35. A close examination of the facts reveal that the consultancy was not for a fixed period. It was not an exclusive arrangement in that Austprom was free to engage in other consultancy work. At first it was a broad ranging brief to investigate export marketing opportunities followed by specific identified projects. Austprom's broad proposals provided the basis to encourage Hellay to make its first real steps towards marketing in Asia.

36. The initial proposal by Austprom dated 21 September 1995 (Exh. D) was intended as a discussion document and formed the basis of the first project, undertaken in the 1995-96 grant year following the letter of acceptance. The 1 July 1996 proposals (Exh. F Attachment 2) were broad in scope to the extent that almost any subsequent activity could be said to be included. It does not follow however nor do we accept that as a consequence of initial broad proposals, that all subsequent engagements necessarily were part of a continuing engagement. While it is true that Austprom undertook consultancy work for Hellay from January 1996 to February 1999, we are satisfied that during the grant year 1996-97, the relevant period under consideration, that Austprom was engaged as a consultant on a short term basis. The fact that consultancy work was done in other periods before and after the grant year while instructive is not necessarily conclusive of the issue. By that we do not mean to say that we are quarantining the work done in the grant year in determining whether the engagement was on a short term basis. The nature of the consultancy was a series of engagements for particular projects with monitoring reappraisal and renewal from time to time. There was no overall obligation for either party to continue the association beyond the grant year notwithstanding that further work was done after the grant year.

37. In oral evidence and by production of his diary entries Dr Hawley was able to demonstrate that the relationship with Austprom was one based on a series of separate limited objectives. Some projects fell within the umbrella of the original Asian market strategy. Others were opportunistic or emergency, for instance, where action was required regarding a troubled market launch in the Philippines and on another occasion with financial problems arising from the Asian economic crisis. Dr Hawley, being a prudent man, was anxious to ensure that any commitment was limited and not open ended.

38. Although the projects were closely related, this does not negate the fact that Austprom was separately engaged on various projects. A relationship between projects does not in itself create a long term engagement nor in our opinion is it correct to say that the projects "were aspects of the applicant's core business" as submitted by the respondent. Hellay's core business is concentrated in Australia and is directed largely towards manufacturing and wholesaling in Australia. The entry into Asia was a new venture requiring an adaptation of skills and knowledge of the Asian markets which Hellay lacked and Austprom was able to provide. The services provided by Austprom were on an "as required" basis and as a series of short term assignments.

ARGUMENTS ON APPEAL

17 Mr Hanks QC, who appeared on behalf of ATC, explained the central argument as follows:

"... here we have six projects and what the tribunal has done is to say each of those projects was autonomous or independent in the sense that by entering into or by asking Austprom to undertake project 1 or project 4, Hellay was not committing itself to any other project and for that reason you have to say that that was the separate engagement, a distinct engagement.

Then you look at each of those six engagements, as the tribunal does, by itself, independent of the other engagements, and you ask, "Well, is that engagement short-term?" But to ask that is the wrong question. You must look at what occurred during the grant year. You must look at the relationship between the exporter and the consultant. You must then ask, can we characterise what occurred throughout the grant year as ... engaging as a consultant, to use the precise language of item 6, on a short-term basis a person to provide marketing services. When you consider the composite phrase the focus is not on the particular project or the particular legal commitment which is made from time to time. The focus must be on the totality of the relationship between the exporter and the consultant.

Now, that's the point that we put the tribunal in our final submission [sic]. That is that the language used in item 6 is a reference to a composite phrase which requires considerations of the totality of the relationship and that it was not appropriate to reconstruct or atomise the various activities undertaken by the consultant on behalf of the exporter and to look at each of them in isolation. As it were, go through and tick project one, project two, project three and say well, each of those is a short-term engagement. But that's not the issue which the act proposes for determination. Now, that really is quite a, we think, a fundamental issue relating to the construction of item 6 and the proper approach to the assessment of facts.

That's why we think it's an important issue to bring to the court. We're not saying, and I think the respondent would in a sense put words into our mouth, that a series of "distinct or separate engagements" lie outside item 6 necessarily. What we are saying is that you have to look at the totality of the relationship."

18 Mr Raitt, who appeared on behalf of Hellay, explained the respondent's argument as follows:

"... whether the expenses were incurred in engaging a consultant on a short-term basis is simply a matter of fact to be assessed, weighing up the facts and circumstances. It's clear that the tribunal weighed up all the facts and circumstances that the appellant says it should. What the appellant doesn't like is the way that weighing up took place and the outcome of it. But that doesn't create an error of law that can be appealed in this court."

CONSIDERATION

19 The Administrative Appeals Tribunal has considered the construction of Item 6 in s 33 in two cases.

20 In Re Dinnet Holdings Pty Ltd and Australian Trade Commission (1998) 28 AAR 185 the Tribunal affirmed a decision of ATC to reject an application for a grant under the Act. The applicant company claimed a grant for the 1996-97 year for the hiring of a marketing consultant to promote the sale of live seafood to Hong Kong, Singapore, Malaysia, Brunei and Mauritius. The applicant had engaged the same marketing consultant in the previous four grant years. In each of the previous years it had concluded one agreement for the entire period.

21 In relation to the 1996-97 grant year the applicant claimed that it had made three separate agreements each of which was dated 15 November 1996 and each relating to a different product exported by the applicant. However, in cross-examination the office manager of the applicant conceded that agreements had been completed after May 1997 by which time the activities claimed under the agreements had been completed. He also conceded that the agreements had been drawn up in order to bolster a claim for a grant by dividing the work done by the consultant into three projects, each relating to one of the types of seafood sold by the applicant. The Tribunal said at 190:

"The question of whether or not a consultant is engaged on a short term basis is one which must be answered against the background of the EMDG Act and the overall relationship between the parties."

22 The Tribunal also said at 190-191:

"Although in the 1996/1997 year the parties completed three separate consultancy agreements, the Tribunal finds that the agreements were completed in that manner in order to facilitate a finding of a short term consultancy and that in fact the engagement of Mostyn was not substantially different from that which had existed in the previous grant years.

...

Viewed against the background of the industry in which the applicant was involved and the nature of the goods being promoted, the agreements prior to the 1996/1997 grant year, and the actions of the parties during that year, evidence an ongoing relationship in which Mostyn was acting on behalf of the applicant. The Tribunal is satisfied that this was not an engagement on a short term basis. It follows, therefore, that the applicant's claim must fail."

23 In Re Robert Andrew Gordon Pottery Pty Ltd and Australian Trade Commission (1999) 55 ALD 551 the Administrative Appeals Tribunal again affirmed the decision of the ATC to reject an application for a grant. The applicant conducted a pottery manufacturing porcelain, stoneware and ceramic products for household use. It engaged a marketing consultant with a view to expanding it's business overseas. As to Item 6 in the table contained in s 33 the Tribunal said at par 32:

"We consider that regard must be had to all the relevant factors which will include, but not necessarily be limited to:

* the nature of the relationship between the consultant and the applicant including:

- the length and purpose of the engagement under consideration in the claim;

- the length and purpose of previous engagements between them; and

- the exclusivity or otherwise of the particular engagement which is under consideration in the claim.

* the particular needs of a business such as that of the applicant in creating, developing and expanding overseas markets and the activities of the applicant in those matters including:

- the nature and duration of marketing plans whether past, current or projected;

* the purpose for which the consultant was engaged including:

- the nature of the tasks which it was engaged to undertake;

- the duration of those tasks; and

- their place in the overall plans and activities of the applicant."

24 The Tribunal then turned to the facts of the case. It observed that the commencement of the relationship between the applicant and the consultant occurred in 1993 when they entered into a two year contract. The consultant was bound not to represent other firms offering merchandise similar to that offered by the applicant. The consultant was an integral part of the efforts of the applicant to sell its products overseas, being described as "the export arm" of the applicant. The contract continued uninterrupted for a further year after the initial two year period. The contract was terminable on six months notice and the Tribunal found that the relationship had been governed by a contract in force for three and a half years.

25 The Tribunal concluded at par 38:

"Having regard to all aspects of the relationship between RAGP and SGM, we are satisfied that theirs was, until its termination, a continuing relationship extending over a considerable length of time. SGM's role was an integral part of RAGP's operations in so far as it was responsible for its overseas marketing efforts. On no view of the facts can we come to the conclusion that SGM was engaged by RAGP on a short term basis."

26 The object of the Act is to bring benefits to Australia by encouraging the creation, development and expansion of foreign markets for Australian products. It does this by reimbursing specific expenses of small and medium Australian exporters who seek out and develop export markets. The expenses reimbursed under Item 6 are for market research and marketing activities "related to an approved promotional purpose". One such purpose is described in section 37 as "creating, seeking or increasing demand or opportunity in a foreign country for ..." certain products.

27 Clearly enough the reference to short-term in Item 6 is a reference to a time period to be seen in relation to some other time period. That is to say the concept expressed is a relative, not an absolute, concept. The basis of the engagement is short-term in relation to some other thing.

28 In light of the object of the Act, and the scheme for the reimbursement of market research or marketing activity expenses, short-term is used to describe the relationship between the activities undertaken and the totality of the time and other factors required for the development of the market for the product in question.

29 The table to section 33 itself provides in Item 1 for a contrasting situation to the situation provided for in Item 6. Item 1 provides for reimbursement for a claimant who maintains an overseas representative on a long-term basis. That is to say, reimbursement will be made for the cost of an overseas representative who is maintained for a long period when that period is measured against the period required to develop the particular market for the product in question.

30 Thus, what constitutes a long-term basis or a short-term basis will depend on the features of the market for the product being developed.

31 Hence, the Tribunal in Dinnet was correct to approach that case in the way which has been set out in par 21 of these reasons as follows:

"Viewed against the background of the industry in which the applicant was involved and the nature of the goods being promoted, the agreements prior to the 1996/1997 grant year, and the actions of the parties during that year, evidence an ongoing relationship in which Mostyn was acting on behalf of the applicant."

32 The same approach, with some helpful elaboration of relevant factors to be considered, was followed in Robert Andrew Gordon Pottery Pty Ltd in the passage extracted at par 22 of these reasons.

33 Both these cases rightly focused on the nature and duration of the process of development of the export market in question in seeking to establish whether the claimant was involved in the activity of engaging someone as a consultant on a short-term basis.

34 On the other hand, it is doubtful whether the part of the public policy ruling extracted in par 11 of these reasons provides a proper basis in principle for determining whether a claimant undertook the activity of engaging someone as a consultant on a short-term basis. The policy ruling stipulates certain specific durations of consultancy as the touchstone for whether the determining applicant has engaged the consultant on a short-term basis. For example, the policy states that a consultancy of less than three months is "short-term" while a consultancy of more than three months will only be deemed short-term if it is in relation to a "one off" project. It is difficult to see how the concept of "short-term" can be defined with such specificity, given that it depends on the relationship between the consultant's work and the requirements for the development of the particular market. Each assessment will depend on an evaluation of the particular product in question, and hence, what is short term for the development of one product may be long-term for another. Although the policy statement is not binding on decision-makers, it is doubtful whether the present statement provides any valid assistance to decision-makers. On the contrary, in its present form the policy statement is capable of diverting decision-makers from their proper function.

35 In the present case the Tribunal commenced it's reasoning in par 34 in a passage previously set out as follows:

"34. Consultancy on a short term basis is not, in the present circumstances, capable of a precise definition because there is no benchmark for time in the marketing activities of the products being developed by Hellay. Its meaning has to be considered in the context of the activities undertaken. The object and purpose of the Act is to encourage export markets for Australian goods, by providing an assistance scheme to small and medium enterprises. Establishing a product presence in Asia requires a commitment over time. This is recognised in Austrade advice and publications. It was clearly in Mr Harvey's mind in making his initial proposals to Hellay and was certainly understood by Dr Hawley. Viewed in this way, Austprom's work for Hellay covered a comparatively short period of time given the product development and marketing requirements for the particular markets. That is not to say that it is necessary to look to the purpose of the Act in determining the meaning of the term which is to be found in its ordinary meaning."

36 To approach the matter in this way was correct. The Tribunal compared the period of Austprom's work with the period necessary to develop the particular products. It assessed the work undertaken by Austprom by reference to the totality of the relationship between Hellay and Austprom.

37 Paragraph 34 of the Tribunal's reasons expressed the Tribunal's fundamental reasoning. In the following pars 35-8 the Tribunal examined the nature of the relationship between Austprom and Hellay in more detail. It is in this examination that the Tribunal explained that the work was done by Austprom pursuant to separate engagements for specific work rather than as part of an ongoing general engagement. This part of the Tribunal's reasoning attracted the central argument of ATC, namely, that the Tribunal focused on the individual assignments rather than on the overall relationship between Austprom and Hellay.

38 In my view this is too narrow a reading of the Tribunal's reasons. The discussion concerning the individual assignments was undertaken for a particular and limited purpose. It was directed to negativing any suggestion that there was an underlying assignment of a long-term nature. The issue is introduced in par 35 as follows:

"At first it was a broad ranging brief to investigate export marketing opportunities followed by specific identified projects. Austprom's broad proposals provided the basis to encourage Hellay to make its first real steps towards marketing in Asia."

39 The conclusion is explained and elaborated in the following pars 36-8. On the facts of this case, the initial proposal put together by Austprom contained very broad ranging proposals. Had Austprom been engaged to perform all of the work originally suggested there would have been a strong argument that the work could not have been undertaken on a short-term basis. The Tribunal concluded that Austprom was not engaged to perform all the work originally proposed. Rather, it was engaged to perform specific limited functions closely defined by Hellay. Thus, the Tribunal said in par 36:

"It does not follow however nor do we accept that as a consequence of initial broad proposals, that all subsequent engagements necessarily were part of a continuing engagement."

40 And the Tribunal then concluded:

"The nature of the consultancy was a series of engagements for particular projects with monitoring reappraisal and renewal from time to time. There was no overall obligation for either party to continue the association beyond the grant year notwithstanding that further work was done after the grant year."

41 Thus, the Tribunal did not rely upon the individual assignments to hold that the relationship between Austprom and Hellay was on a short-term basis. It correctly determined that all the work done by Austprom covered a comparatively short period in relation to the time necessary for the development of the relevant markets. In support of this conclusion it examined the nature of the relationship between Hellay and Austprom to see whether there was a continuing obligation to complete all of the work originally proposed. Having concluded that there was no such obligation, the original conclusion stood.

42 Mr Hanks was correct in submitting that is was necessary for the Tribunal to consider the totality of the relationship between Austprom and Hellay, and it would have been wrong for the Tribunal to have focused on the individual assignments and to conclude from those alone that the engagement was on a short-term basis. However, that is not what the Tribunal did. The basis for the Tribunal's decision was that Austprom's work for Hellay covered a comparatively short period of time given the product development and marketing requirements of the particular products. As the initial proposal made by Austprom was broad, it was necessary for the Tribunal to explain why the breadth of the proposal did not contradict its expressed view that the work covered a comparatively short period of time relative to the time needed to develop the market for the products. It did this by showing that the initial broad proposal had been cut back by Hellay, limiting Austprom to separate specific assignments.

43 The matter may be understood in another way. Mr Hanks contended that the essence of the Tribunal's reasoning was that a series of short-term engagements of a marketing consultant over a grant period constitutes the activity of engaging a consultant on a short-term basis. That approach, he said, was wrong in law. Such an approach would indeed have been wrong in law. But it is not the approach which was taken by the Tribunal. The Tribunal did not hold that the engagement of Austprom was on a short-term basis because Hellay engaged Austprom on a series of short-term, specific enterprises. Rather, it started by looking at the whole relationship between Austprom and Hellay. It then compared the work done as a result of that relationship with the time needed, and other requirements, of developing the export markets in question. In relation to that exercise, the engagement of Austprom was on a short-term basis. The Tribunal discussed the particular nature of the specific engagements simply to answer the argument that the broadness of the initial proposal made by Austprom could only have been executed by a long-term engagement.

CONCLUSION

44 In the result the Tribunal made no error of law and the appeal must be dismissed with costs. The respondent submitted that this may be an appropriate case for the award of indemnity costs against the appellant. In my view, the respondent has not established that this is a case in which it would be appropriate for the Court to award indemnity costs.

I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.

Associate:

Dated: 16 February 2001

Counsel for the Applicant:	Mr P J Hanks QC
Solicitor for the Applicant:	Tuckers Lawyers
Counsel for the Respondent:	Mr G D Raitt
Solicitor for the Respondent:	Anderson Rice
Date of Hearing:	6 December 2000
Date of Last Written Submissions	11 December 2000
Date of Judgment:	16 February 2001