Re Idpac Ika Pty Ltd and Australian Trade Commission [1988] AATA 61 (18 February 1988)

ADMINISTRATIVE APPEALS TRIBUNAL

Re: IDPAC IKA PTY. LTD.

And: AUSTRALIAN TRADE COMMISSION

No. S87/26

AAT No. 4155

Export Market Development

COURT

ADMINISTRATIVE APPEALS TRIBUNAL
GENERAL ADMINISTRATIVE DIVISION
R.A. Layton (Deputy President)
Dr J.T.B. Linn (Member)
Dr D.B. Williams (Member)

CATCHWORDS

Export Market Development - whether applicant company incurred any expenditure in relation to fares, consultants' fees and overseas representation as claimed - whether such expenditure, if incurred, constituted "eligible expenditure" within the meaning of s.4 of the Export Market Development Grants Act 1974.

Words & Phrases: "eligible expenditure"

Export Market Development Grants Act 1974, ss.3, 4, 4(1), 4(2), 4(3)

Associations Incorporation Act (S.A.) 1985

Re Ampol Ltd and Export Development Grants Board (1983) 5 ALN N61

Re Geoffrey Thompson and Growers Co-op Pty Ltd and Export Development Grants Board (1985) 7 ALN N242

Re Queensland Mines Ltd and Export Development Grants Board (1985) 7 ALD 357

Re Middle East Marketing Organisation Pty Ltd and Export Development Grants Board S.84/154, delivered 20 December 1985 (Decision 2483)

Speedo Knitting Mills Pty Ltd v. Commonwealth of Australia (1981) 37 ALR 417

Parker Pen (Aust) Pty Ltd v. Export Development Grants Board (1983) 46 ALR 612

HEARING

CANBERRA
18:2:1988

ORDER

The decision under review is affirmed.

DECISION

This is an application for review of a decision made by the then Export Development Grants Board ("the Board") pursuant to the Export Market Development Grants Act 1974 as it stood prior to the amendments effected by Act No. 110 of 1985 ("the Act") refusing a claim made on behalf of the applicant company in relation to expenditure on fares, consultants' fees and overseas representation totalling $46,743 in the year 1 July 1984 to 30 June 1985.

2. At the hearing, the applicant was represented by its director and public officer, Mr Harold S. Grimes. The respondent was represented by counsel, Mr S. Vorreiter. The evidence before the Tribunal consisted of the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 ("the T documents") and further documentation tendered at the hearing. In addition, Mr Grimes gave oral evidence on behalf of the applicant company.

3. The 1984-85 claim for a grant claimed eligible expenditure totalling $46,743, which consisted of $17,366 in respect of fares, $2,000 under the heading of "Literature and other Advertising", $19,577 in respect of overseas representation and $7,800 in respect of consultants' fees. The breakdown of those amounts is set out in T3/32 as follows:

"November/December 1984

Schedule PART B

1. FARES 6. OVERSEAS REPRESENTATION

Nov. 15 cheq. 18641 A$3,631.96
15 cheq. 18642 A$5,917.15
December - Additional Travel Costs 3,724.74
Sustenance - 44 days @ $50 2,200.00
Consultant Fees 6,250.00
ISA Additional Fares 26.11.84
Change of Routes: San Fran.
US$612.33 746.74
Extra Air Canada 10.12.84
Winnepeg-Saskatoon US$46.90 57.00
14.12.84 San Fran. L A US$89
16.12.84 Los Ang. Tokyo US$531___ 756.00
20.12.84 Tokyo Seattle 700.00
Seattle Saskatoon US$184 224.00
23.12.84 Saskatoon Los Ang.CA$299 336.00
27.12.84 Los Ang. Honolulu US$369.89 451.00
29.12.84 Honolulu Melbourne US$1,200 1,463.00

Extra Travel Cheques
Saskatoon HSG 11.12.84 CA$400 485.00
Tokyo JCB 19.12.84 US$820 1,000.00
Fares Dr B Jensen (p 3) 6,000.00
Dr L Kordel (p 3) 3,000.00

A$17,365.70 A$19,576.89

ADD: 7. CONSULTANTS FEES A$7,800 10. TOTAL
Consultants Overseas were numerous and most A$44,742.59
valuable but, because of the nature of the
Export Markets and the Objectives of them
no Charges were sought."

4. In its claim for a grant, the applicant company, Idpac IKA Pty Ltd, describes itself as a "Manufacturer/Export Merchant/Consultant" (T3/11). The company was incorporated in South Australia as of 13 November 1984 (T3/15). It was specifically formed as an export market development company (T5/39), its function being to support the objectives of DA TEL Inc. DA TEL Inc. is incorporated under the Associations Incorporation Act (S.A.) 1985 and describes itself as "a peace memorial research foundation for the welfare of mankind with advancement of education, science and the arts". Mr Grimes, who represented the applicant company at the hearing of this application, is director and public officer of the applicant company in addition to being chairman of DA TEL Inc. (T5/39). Dr Lelord Kordel of Detroit and Dr Bernard Jensen of California are described as "founding members of DA TEL Inc". In addition to the applicant company and DA TEL Inc., Integrated Systems Administration ("ISA"), a partnership consisting of Mr Grimes and Mr H.P. Hendricks exists as a "partnership of convenience to assist DA TEL" and ""was there ready to assist IDPAC" (transcript, p 29). Dr Lelord Kordel and Dr Bernard Jensen are described as persons who are "accredited by ISA as Resident Overseas Rep resentatives" (T3/29).

5. The rules of DA TEL Inc. provide, inter alia:

"Title 1. The name of the association on incorporation
shall be DA TEL Incorporated.

Meaning 2. DA TEL is the abbreviation of the phrase
Diagnosis Automatically Translated/Transmitted
Electronically Logically.

Onjects (sic)
3. (a) To acquire and own all facilities and
property to provide a central point of
co-ordination of all activities directed to
disabled persons by virtue of the financial
subsidy available to their rehabilitation
as well as "sheltered workshops" for their
gainful employment, and in allied industry
and commerce or other pursuits.

(b) To advise and co-ordinate all existing
establishments to a common point of benefit
to those already being employed or aided,
and to establish beneficial extensions to
them to a desirable degree by each party.

(c) To accept voluntary participation in
Computing Programming Data to enable steady
progress to Automation in Medical
Diagnosis.

(d) To find employment in this programme as far
as possible for disabled persons of
suitable ability.

(e) To provide funds for medical research into
diagnosis that has application in Auto
mation and to aid and assist establishments
where this is being done on a co-ordinating
and co-operative basis.

(f) To conduct education into all phases of
healing that may be amenable to the main
objectives of recovery for disabled
persons.

(g) To conduct self-supporting establishments
so that there will be little or no need to
directly subsidize the disabled persons
employed in them.

(h) To provide suitable housing for disabled
persons on a permanent or tertiary basis as
and when amenable to the above purposes.

(i) To arrange legal assistance to disabled
persons or their next-of-kin in all matters
relating to their Estates and welfare.

(j) To undertake any industries or benevolent
activities to consolidate DA TEL Inc.

(k) To provide facilities for all concerned
with Electronic Data Processing for the
complete resolution of Diagnosis Auto
matically Translated/Transmitted Electron
ically Logically, their co-ordination with
Telecommunications and resolution of
amenable Therapy by the most practical and
expeditious method. All forms of healing
may be jointly known by the word Therapy."

(T13/102)

6. The applicant claims as eligible expenditure fares in relation to travel by Mr Grimes to America, Japan, Canada and Honolulu as set out previously in addition to return fares in relation to travel by Dr Jensen and Dr Kordel between America and Australia.

7. There is also a claim in relation to "overseas representation". This claim relates to what appears to be largely accommodation and "sustenance" expenses incurred by Mr Grimes.

8. In addition, there are consultant fees purported to be paid by the applicant company to ISA of $7,800 (T3/33). In his oral evidence, Mr Grimes stated that the consultancy was paid in relation to his own work undertaken whilst overseas in the countries to which he travelled. This evidence, however, does not easily accord with the memo at T3/33 which refers to consultancy, from 22 May 1985 to 30 June 1985, a period of time which does not coincide with the period of travel in relation to which application for a grant is made at T3/32.

9. There is also a sum of $2,000 for payment sought by DA TEL Inc. from the applicant for the following:

" INVOICE

To IDPAC IKA Pty Ltd
70 Greenhill Road
WAYVILLE S.A. 5000

Research, preparation and presentation:
Prospectus for the Australian National Diagnostic
Grid

10 Copies.

5 copies mailed to the Prime Minister and Cabinet
March 1, 1985

$2,000"

(T3/34)

10. At the hearing, the respondent opposed the applicant's claim for grant and considered that the application for review should fail for the following reasons:

(1) There was no evidence that any amount had been expended
by the applicant company as sought;

(2) If such amounts were expended, it was not expenditure
within the meaning of sub-s.4(1) of the Act;

(3) If it was expenditure within the meaning of sub-s.4(1)
of the Act, it was not "eligible expenditure" within the
meaning of sub-s.4(2) of the Act;

11. By way of background, in order to consider this claim, it is necessary to set out some detail of the nature of the export activities which were claimed by the applicant. This is by no means an easy exercise because the documentation before the Tribunal as contained in the "T documents" was voluminous and, in many instances, the Tribunal found it to be unclear and con fusing. Further, the oral information given by Mr Grimes at the hearing appeared to place a different emphasis on the nature of the export activities of the applicant company than did the information contained in the "T documents".

12. Dealing firstly with the "T documents". The activities of DA TEL Inc. are clearly broad, but those specifi cally related to IDPAC and export marketing appear to focus on coordinating and improving medical diagnosis through Nuclear Magnetic Resonance Imaging ("NMRI"), "Charge Injection Devices" and "Sensor Interface Devices". If one had to summarise the activity of DA TEL Inc. it is possibly best expressed in the "T documents" as producing "a mean-data-bank of Digitized Integrated Diagnostic Imaging to enable Export Development of whole Meditronics Systems to gain substantial new money income from known sources". The process described in the "T documents" indicates an Australia-wide and indeed a world-wide programme to produce firstly a "National Diagnostic Grid" and later an international grid model. The National Diagnostic Grid was composed of appropriately qualified members contributing to a fund for the purposes of research and development, thereby attracting a 150% taxation concession. Qualifying members could be either medical practitioners or companies composed of medical practitioners or private hospitals. So far as one can discern, the aim of the programme is to maximise the use of digitised diagnostic imaging, particularly NMRI, so that such imaging was available throughout Australia for the benefit of Australians and not merely available as it is now in a few places in Australia. Similarly, an international diagnostic grid programme would be of benefit to the world.

13. Comparing the above information with the oral evidence given by Mr Grimes. Mr Grimes did not concentrate on the setting up of a diagnostic grid, but rather concentrated on the role of the applicant company in negotiating with and obtaining informa tion from American contacts. This information related to the means whereby DA TEL Inc. could encourage the manufacture within Australia of devices such as NMRI, Sensor Interface Devices and Charge Injection Devices or alternatively to arrange for their component parts to be imported to Australia and then the devices assembled in Australia subject to overcoming any patent dif ficulties. Mr Grimes informed the Tribunal that in the 1984-85 period, NMRIs, Sensor Interface Devices and Charge Injection Devices were being manufactured and assembled both as to the completed articles and the component parts, outside Australia. Mr Grimes, however, believed that Australia had the potential to manufacture or assemble these items within Australia and further considered that an Australian contribution might in fact improve the products and facilitate export from Australia to Canada where some contacts appeared to display some initial interest.

14. The travel undertaken by Mr Grimes is described in the statement annexed to the applicant's claim as being:

"An Assignment was given to the principal of ISA -
Integrated Systems Administration - Overseas Rep
resentative of DA TEL Inc. to follow up the informa
tion discussed with its two Resident Overseas
Representatives in ISA (Founding Members of DA TEL
Inc. and professional colleagues) by such principal of
ISA, H S Grimes, in undertaking an investigatory trip
involving Japan, USA and Canada at an early convenient
date. This began on November 17, 1984, shortly after
IDPAC I K A Pty Ltd was incorporated."

(T3/16)

and further, it was stated:

"On arrival in San Francisco from Tokyo, the under
signed obtained a copy of the Congress of the United
States Office of Technology Assessment Washington D C
Health Technology Case Study 27: Nuclear Magnetic
Resonance Imaging Technology (September 1984). Its
infinite value in regards to Meditronics Systems was
discussed with various Consultants from that time,
including one with whom the undersigned had attended
the First Seminar on Computer Graphics in Medicine at
Pittsburgh, March 1972. He is an Emeritus Professor
of Computing Science.

Canada was visited in accordance with an open letter
from its High Commission in Canberra, which directed
attention to Federal and Provincial Health Depart
ments. Because considerable potential was found at
Saskatoon, Saskachewan, a return visit was made to
investigate the possibility of it being a Regional
Centre for the developing plans which, by March 1,
1985, were provided in the Prospectus for the
Australian National Diagnostic Grid and the Off-shore
National and Regional Diagnostic Grids which would
eventuate in due course."

(T3/16-17)

15. As to the attendance by Dr Kordel and Dr Jensen, it is unclear as to the reason for their attendance in Australia except the information contained in T3/30 which states:

"The two Resident Overseas Representatives, Dr Lelord
Kordel of Detroit and Dr Bernard Jensen of Escondido
CA, visited Australia at the time IDPAC IKA was
formed. Both are Research Personnel in Metabolism
and Nutrition and were briefed on the developments of
Products which relate to the improvement in Diagnosis.
Dr Kordel visited Adelaide on this account. Dr Jensen
was accompanied by ISA Principal in Brisbane and
Melbourne over a period of two weeks, during which
substantial discussion and planning was done.

ISA Expenditure is calculated at $3,000 for Dr Kordel
(his basic costs) and at $6,000 for Dr Jensen (his
basic costs and those of ISA Principal.

Further discussions and briefings were held in USA
during the International trip which followed in
November and December 1984."

(T3/30)

16. Turning now to the legislation. The Act is described in the preamble as "an Act relating to Grants for the purpose of providing Incentives for the Development of Export Markets". This stated purpose is executed by means of "grant entitlements" paid to certain persons by the then Board in respect of "eligible expenditure" incurred during a particular year. "Eligible expenditure" is stated in s.3 of the Act to have the meaning given by s.4. Section 4 of the Act consists of two main sub- sections; sub-s.4(2) was described in Re Ampol Limited and Export Development Grants Board (1983) 5 ALN N61 as "exhaustive" and prescribes limited items of expenditure which are within "expenditure for the purposes of s.4". In that case, the Tribunal also stated that in order for expenditure to be "eligible expenditure" pursuant to sub-s.4(2), it must firstly be expenditure within the meaning of sub-s.4(1) (see also Re Geoffrey Thompson and Growers Co-operative Co Pty Ltd and Export Development Grants Board (1985) 7 ALN N242 and Re Queensland Mines Limited and Export Development Grants Board (1985) 7 ALD 357).

17. Although the word "expenditure" is defined in sub- s.4(2), that definition is not exhaustive in itself, in that "expenditure" is defined as "expenditure to the extent that it is incurred ... " and thereafter in paras. (a) to (e) the words "expenses" and "expenditure" occur frequently.

18. For reasons which the Tribunal set out in Re Middle East Marketing Organisation Pty Ltd and Export Development Grants Board S.84/154, 20 December 1985 (2483), at p 9 of the Reasons for Decision, we consider that the word "expenditure" in relation to sub-s.4(2) refers to expenditure or expense that is a payment of money or a liability to pay money in relation to a matter set out in paras.4(2)(a) to (e) of the Act. Further, for reasons also set out in Middle East Marketing (supra), we consider that such expenditure or expenses must be incurred, that is, defrayed, discharged or borne in the year claimed.

19. Therefore, the first matter which the Tribunal must decide is as to whether or not there has been any expenditure by the applicant in relation to the matters which it claims. At the hearing, the applicant was unable to provide the Tribunal with any invoices, cheque butts or any other proof that the items alleged to have been defrayed, discharged or borne by the applicant company in the year claimed were so expended. Subsequent to the hearing, a large volume of material was submitted to the Tribunal by the applicant company which was in turn referred by the Tribunal to the respondent for its comment as to whether such material supported the applicant's claim that moneys were expended by the applicant company for the expenses which it claimed in the grant year.

20. By letter dated 2 February 1988, the respondent submitted to the Tribunal that of the material provided on behalf of the applicant company, the only documentation which would indicate that any expenditure had been incurred was the copies of airline tickets issued by Westpac Travel, Adelaide in respect of a trip to the United States, Canada, Japan and Hong Kong undertaken by Mr Grimes in November/December 1984. Further, there is no indication in the material that those tickets were paid for by the applicant company. In addition, there was no documentation to support any other expenditure. This Tribunal agrees with these submissions.

21. Assuming, however, that moneys were defrayed by the applicant company for expenses as claimed, the next issue the Tribunal will consider is as to whether or not any such expenditure constitutes expenditure within the meaning of sub-s.4(2) of the Act.

Whether fares paid for Mr Grimes constitute expenditure under sub-s.4(2) of the Act:

22. Sub-s.4(2) of the Act is set out in Appendix 1 hereto. In order for the fares paid in respect to travel by Mr Grimes to be "expenditure" within the meaning of sub-s.4(2) of the Act, they must be expenses of the type described in paras. 4(2)(a) to (e) of the Act, but not excluded by paras.(f) to (m). Assuming for the purposes of argument that moneys were paid by the applicant to various airline companies for fares in relation to Mr Grimes' travel to the USA, Canada and Japan as claimed, the first question is whether or not those were expenses of an "agent" for the purpose of either the carrying out of market research or the obtaining of market information or advertising (placitum 4(2)(a)(i)) or other means of securing publicity or soliciting business (placitum 4(2)(a)(ii)).

23. Giving the most beneficial construction possible to the activities apparently undertaken by Mr Grimes, it could be said that in travelling to America, Japan and Canada, he was obtaining information as an agent of the applicant company concerning firstly a possible market for NMRI, Sensor Interface Devices and Charge Injection Devices and secondly, as concerning whether there was a possible market for the component parts of such devices to be manufactured or assembled in Australia. Such activity could also be regarded as obtaining market information or soliciting business for the applicant company. Therefore, prima facie, such expenditure may be expenditure within the meaning of placita 4(2)(a)(i) and (ii) of the Act. Alter natively, and again giving a beneficial construction of Mr Grimes' activities, if he was travelling to America, Japan and Canada for the purpose of obtaining information about setting up an "Integrated International Digitised Diagnostic Grid", such activity could, for similar reasons, be interpreted as expenses of an agent for the purpose of obtaining market information or for soliciting business for the applicant company under sub- s.4(2) of the Act.

24. Notwithstanding that we have considerable doubt as to whether there is sufficient information before us to be satisfied that these beneficial constructions were the purposes of the applicant because of the general lack of clarity and confusion of aim as disclosed in the "T documents" and the oral evidence of Mr Grimes, we are prepared, for the purpose of argument, to assume that this criteria has been fulfilled in relation to the fares paid for Mr Grimes.

25. Further, if the fares were payable by the applicant company to the airline companies and not to Mr Grimes as director of the company, such expenses would not be excluded by placitum 4(2)(a)(iv) of the Act. Nor would such expenditure be excluded by paras.4(2)(f) to (m); and it would specifically be allowed as "fares" in placitum 4(2)(g)(i) of the Act.

Whether accommodation, sustenance and/or entertainment expenses paid for Mr Grimes claimed under the heading "Overseas Representation" constitute expenditure under sub-s.4(2) of the Act

26. Paragraph 4(2)(g) of the Act provides that "expenditure" does not include expenses in respect of travel, accommodation, sustenance or entertainment other than, inter alia, placitum (iv):

"expenses in respect of accommodation, sustenance or
entertainment outside Australia in respect of or in
relation to a visit by a person who is carrying out
the duties of a sales representative of the claimant
outside Australia from a place outside Australia to
another place or other places outside Australia."

27. In this case, it is doubtful that Mr Grimes was a person carrying out the duties of a sales representative of the applicant outside Australia, such duties being performed between places outside Australia. He was not a sales representative deployed outside Australia, he was a director of the applicant company deployed within Australia on an overseas trip to and from Australia. This is, however, not the only barrier to such expenses constituting "expenditure" within the meaning of sub- s.4(2) of the Act. It would appear that these expenses were paid to Mr Grimes and as Mr Grimes was a director of the applicant company, such payment would be excluded pursuant to placitum 4(2)(a)(iv) of the Act.

28. Therefore, expenses claimed by the applicant for Mr Grimes under the heading "Overseas Representation" are not expenses within the meaning of sub-s.4(2) of the Act.

Whether fares paid for Dr Kordel and Dr Jensen constitute expenditure within the meaning of sub-s.4(2) of the Act

29. Assuming such fares were paid by the applicant company to the airlines in respect of travel undertaken by Doctors Kordel and Jensen between America and Australia and further, giving a beneficial construction to their activities in Australia, that is, that they were either obtaining and providing the applicant with information relevant to the manufacture or assembly of Digitised Diagnostic Imaging Devices or their component parts in Australia; or they were obtaining and providing the applicant company with information relevant to the setting up of an Integrated Digitised Diagnostic Grid programme, then it could be argued that the doctors were "agents" of the company for the purpose of obtaining "market information" (placitum 4(2)(a)(i) of the Act)). However, there is a lack of clear information as to precisely what the doctors did in Australia and therefore the purpose of their travel expenses is doubtful. However, for the purpose of argument, we are prepared to assume that the criteria contained in sub-s.4(2) have been fulfilled in relation to these fares.

Whether fees for consultancy paid to ISA constitute expenditure within the meaning of sub-s.4(2) of the Act

30. As to the expenditure of $7,800 in relation to consultancy; this amount was paid to ISA and is apparently related to Mr Grimes' work whilst overseas. Mr Grimes is a partner of ISA. Even assuming a beneficial interpretation of Mr Grimes' activities, namely that such payment was for the purpose of obtaining market information or soliciting business for either the manufacture or assembly of the Digitised Diag nostic Devices or their components or, alternatively, the setting up of an Integrated Digitised Diagnostic Grid programme, ISA appears to be a "prescribed associate" within the meaning of placitum 4(2)(a)(iiiA). That placitum in turn is defined in para.4(8)(c) as "any person determined by the Board to be a person not at arm's length from the claimant or the association". In this instance, ISA is not a body at arm's length from the claimant, and therefore a payment to ISA, because of Mr Grimes' work, would not be expenditure within the meaning of para.4(2)(a) of the Act.

Whether the expense of $2,000 for literature and advertising is expenditure pursuant to sub-s.4(2) of the Act

31. The invoice in relation to which this expense allegedly occurred appears to relate to the "Australian National Diagnostic Grid" (T3/34), being literature or advertising prepared by DA TEL Inc. Assuming that such literature constitutes "advertising" or "other means of securing publicity or soliciting business" (placitum 4(2)(a)(ii)), it would appear that such expenses were paid to "an associated company carrying on business in Australia" (placitum 4(2)(a)(vi)) and is thereby excluded as expenditure. The term "associated company" is defined in sub-s.4(8) of the Act and in our view, the operations of DA TEL Inc. are able to be controlled either directly or indirectly by the applicant company and therefore expenses of $2,000 paid to it are excluded as expenditure pursuant to sub- s.4(2) of the Act.

Whether the items claimed are "eligible expenditure" pursuant to sub-s.4(1) of the Act

32. Assuming, for the purpose of argument, and despite our findings to the contrary, that the claimed items do constitute "expenditure" pursuant to sub-s.4(2) of the Act, are they also "eligible expenditure" pursuant to sub-s.4(1) of the Act?

33. Sub-section 4(1) as it stood at the relevant time in relation to this application is set out in Appendix 2.

34. The only item which may be relevant to the facts in this application is para.4(1)(a) of the Act. Sub-section 4(1) contains a number of specific matters on which the applicant bears the onus of satisfying the Tribunal (Speedo Knitting Mills Pty Ltd v. Commonwealth of Australia (1981) 37 ALR 417). The first such matter which an applicant must establish is that the expenditure has been incurred "primarily and principally" for the purposes set out in that sub-section. As to the meaning of "primarily and principally", in Speedo Knitting Mills Pty Ltd (supra) it was stated that the question as to whether expenditure was primarily and principally for a purpose as defined within sub-s.4(1) is one of fact and, further, that the onus was on the applicant to establish that contention. In Parker Pen (Aust) Pty Ltd v. Export Development Grants Board [1983] FCA 77; (1983) 46 ALR 612, Lockhart J., at pp 619 and 620 of the Reasons for Decision indicated that, in his view:

"The draftsmen used both words to emphasise that it is
only where the board is satisfied that expenditure has
been incurred mainly or chiefly (to use neutral
adverbs) for the required purpose that the expenditure
answers the description of "eligible expenditure"."

35. The meaning of the word "purpose" was considered by Woodward J. in Speedo Knitting Mills Pty Ltd (supra). In addition, Lockhart J. in Parker Pen (Aust) Pty Ltd (supra) observed at p 621 of the Reasons for Decision that:

"The word "purpose" is, of course, susceptible of a
variety of meanings depending on its context. In the
context of s 4(1) the inquiry must be to ascertain
whether the expenditure was incurred by the person
primarily and principally for the purpose of creating
or seeking opportunities or creating or increasing
demand for the stipulated objects, including the sale
by that person for export of eligible goods manu
factured in Australia. This involves a subjective
element. The purpose must be someone's purpose. It
is the purpose of the person mentioned in the sub-
section. To ignore subjective elements is wrong.
There is, of course, a difference between the
essential elements in the notion of purpose and the
means whereby purpose is ascertained. Purpose may be
gleaned either from subjective or objective elements
or, more usually, both. A person may say what his
purpose is, but the objective facts may cast doubt
upon the credibility or reliability of his statement.
It is for the Tribunal of fact to consider all the
circumstaances and conclude whether the requisite
purpose has been established. Objective facts are
usually more reliable than mere protestations of
purpose, intent or state of mind, which, although
susceptible of testing in cross-examination, are
intrinsically impenetrable and inscrutable."

36. Summarising the principles which emerge from these cases; the Board, and also this Tribunal, must be satisfied that the main or chief purpose of the incurring of expenses, as ascertained by objective facts, in conjunction with the sub jective expressed intention of the claimant must be for the purposes specified in sub-s.4(1) of the Act.

37. Considering those ingredients in relation to the provisions of para.4(1)(a) of the Act; the Tribunal must be satisfied that the expenditure has been incurred mainly for the purpose of creating or seeking opportunities or creating or increasing demand for the sale by the applicant for export or alternatively export by the applicant and sale by it of "eligible goods" manufactured, produced, assembled or processed in Australia. This in turn requires the Tribunal to consider the meaning of "eligible goods". "Eligible goods" are defined in sub-s.5(1) of the Act, the terms of which are set out in Appendix 3.

38. The effect of the definition of "eligible goods" in sub-s.5(1) of the Act is that those goods should be substantially of Australian origin. The first issue for determination is what constitutes the "goods" to which this applicant's expenditure relates. As to what constitutes the "goods", there appear to be two different proposals. The first as gleaned from the "T documents" is that the "goods" comprise a programme for an Integrated Digitised Diagnostic Grid. The second as expounded by Mr Grimes, in his oral evidence is that the goods are NMRIs, Sensor Interface Devices and Charge Injection Devices and/or their component parts. As to the latter, the evidence of Mr Grimes is quite clear that as at the time when expenditure was incurred, all NMRIs, Sensor Interface Devices and Charge Injection Devices were manufactured and assembled outside Australia both in whole and in their component parts. There is no aspect of these "goods" which have an Australian origin. Therefore none of the expenditure claimed by the applicant satisfies the criteria in para.4(1)(a) because the relevant goods were not manufactured, produced, assembled or processed in Australia in the grant year (transcript, pp 20-26).

39. As to whether the grid programme constituted "eligible goods", the word "goods" is not defined in the Act. According to the normal principles of statutory interpretation, in the absence of such definition, the word is usually given its ordinary meaning. The usual meaning of the word "goods" would be articles of trade, wares, merchandise or chattels (see The Shorter Oxford Dictionary and The Macquarie Dictionary). A programme such as this applicant has devised or proposed to devise does not constitute "goods" and further, even if it did, part of the purpose of the applicant company is to devise an Australian grid programme for use in Australia. Such a programme could not possibly have any export use and an international programme is yet to be devised. Therefore, none of the expenditure claimed relates to "eligible goods" within the meaning of sub-s.4(1) nor sub-s.5(1) of the Act.

40. For these reasons, therefore, the Tribunal considers that the applicant has not made out its claim and the decision of the Board under review should be upheld.

41. In rejecting this application for review, the Tribunal considers it appropriate to make certain observations as Mr Grimes appeared to the Tribunal to regard any rejection of the applicant company's claim as a slight against himself, his companies and related partnerships and their work and activities.

42. The applicant may have, as one of its ultimate aims, the purpose of encouraging the production of technological development of digitised imaging for medical diagnostic purposes within Australia rather than have Australia import that tech nology from overseas. This may be a very laudable aim, but in order for that aim to be achieved with the assistance of the Act, a number of statutory criteria must be satisfied in order to obtain a grant. The applicant cannot expect government subsidy in relation to ideas for future export. Eligible goods must be in existence. In this case, there are no goods presently manufactured, produced, assembled or processed in Australia of the type that the applicant seeks to promote and until such time as those items with a significant Australian content within the meaning of s.5 of the Act are in existence, grants of the type sought by the applicant cannot be obtained.

43. A refusal to provide a grant to the applicant should not be regarded as an adverse reflection on the applicant's motives and initiatives but rather should indicate that the relevant criteria have not been satisfied. Mr Grimes, when presenting the applicant's case, did so with little regard to the provisions of the Act nor indeed, to the guidelines attached to the application form itself, although later written submissions received did refer to some provisions of the Act. It is therefore not surprising that the applicant company is unable to fulfill the requirements of the Act when no attention appears to have been given by the applicant company to the specific provisions of the Act in the relevant grant year.