Carbon Planet Limited and Australian Trade Commission

[2012] AATA 526

[2012] AATA  526

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/0686
Re	Carbon Planet Limited
APPLICANT
And	Australian Trade Commission
RESPONDENT

DECISION

Tribunal	Senior Member R W Dunne
Date	9 August 2012
Place	Adelaide

The extension of time is refused.

......................[Sgd]..................................................

Senior Member R W Dunne

CATCHWORDS

PRACTICE AND PROCEDURE - application for extension of time - export market development grants - applications for grants for 2007/2008 and 2008/2009 grant years - appointment of administrator(s) to applicant - statement of solvency - applicant found to be ineligible for grants - request for internal review - internal review not accepted as out of time - internal review conducted - extension of time refused by respondent - whether extension of time should be granted by Tribunal - extension of time refused.

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth), s 29(7)

Export Market Development Grants Act 1997 (Cth), ss 87(1), 87C, 98

CASES

Re Australian Telecommunication Commission and Commonwealth of Australia and Schmidt (1986) 9 ALD 349

Luna Lighting International Pty Ltd v Australian Trade commission [2000] AATA 881

REASONS FOR DECISION

Senior Member R W Dunne

9 August 2012

1. These interlocutory proceedings relate to an application by Carbon Planet Limited (“applicant”), made under s 29(7) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”), for an extension of time for lodging an application for review of a decision. The proceedings arise from applications made under the Export Market Development Grants Act 1997 (“EMDG Act”) made on 27 November 2008 for a grant for the 2007/2008 grant year and made on 30 November 2009 for a grant for the 2008/2009 grant year.

2. In relation to the proceedings, it became clear that the applicant had lodged two applications for review with the Tribunal under the AAT Act. The first was received on 13 April 2011 (matter number 2011/1373 – the “First Application”) and the second was received on 20 February 2012 (matter number 2012/0686 – the “Second Application”), together referred to in these reasons, where appropriate, as the “Applications”. To be clear, both Applications related to the applications for grant for the 2007/2008 and 2008/2009 grant years. However, the First Application related to a decision of the Australian Trade Commission (“respondent”) made on 20 July 2010. The Second Application related to a decision of the respondent made on 30 November 2011.

3. On 5 July 2010, an Australian Securities and Investments Commission search indicated that on the same day a notification of appointment of administrator was lodged in relation to the applicant. There were in fact two administrators, jointly and severally appointed, and they were Stephen James Duncan and Nicholas David Gyss. On 5 July 2010, the respondent sent an email to the administrators requesting that a statement as to solvency be provided on behalf of the applicant in accordance with s 87C of the EMDG Act by 12 July 2010, extended to 19 July 2010. The statement of solvency was not received by the respondent within the required and the extended timeframes.

4. On 20 July 2010, the respondent issued notices of determination for grant years 2007/2008 and 2008/2009 on the basis that the applicant was ineligible to receive a grant pursuant to s 87 of the EMDG Act. On 23 March 2011, the applicant (through its grants consultant, Mr Stuart Mitchell) requested the respondent to conduct an internal review of the determination made on 20 July 2010. On 24 March 2011, the respondent sent an email to Mr Mitchell advising that the internal review request was not accepted as it was made outside of the time limit imposed under s 98(2) of the EMDG Act. As mentioned above, on 13 April 2011 the applicant lodged the First Application with the Tribunal, seeking to review the respondent’s determinations made on 20 July 2010. On 28 July 2011, a telephone preliminary conference attended by Mr Mitchell (for the applicant) and Dr Stephen Thompson (for the respondent) was conducted by Conference Registrar Lock at the Tribunal. As a result of the conference, the applicant’s request for internal review dated 23 March 2011 was referred back to the respondent for reconsideration.

5. The internal review was carried out by Mr Ian Chesterfield, the respondent’s General Manager, Trade Development Schemes. In carrying out the internal review, Mr Chesterfield decided not to allow an extension of time under s 98(2)(b). However, he reconsidered the request pursuant to s 98(4). In doing so, he noted that a decision under s 98(4) was reviewable by the Tribunal in accordance with s 99 of the EMDG Act, which reads:

   “An application may be made to the Administrative Appeals Tribunal for the review of a decision of the CEO of Austrade that has been confirmed or varied under subsection 98(4).”

   Mr Chesterfield also noted (amongst other things) that the applicant was put into external administration while the respondent was still assessing the Applications for grants in relation to the 2007/2008 and 2008/2009 grant years and, on 9 July 2010, the respondent was informed by the administrators that all correspondence in relation to the Applications was to be with the administrators, and only with them.

6. In his Reasons for Decision, Mr Chesterfield examined the merits of the applicant’s request made on 23 March 2011, as well as the grounds in its application to the Tribunal dated 13 April 2011. He noted that s 87(1) provides that a grant is not payable if, at the time when, or at any time after, the person is under insolvency administration. In the case of the applicant, it became entitled to a grant in the relevant sense when the respondent made its determination on 20 July 2010. Moreover, the absence of a statement of solvency under s 87C(2) meant that the application for an extension of time, and the applicant’s substantive application, could not possibly succeed. Further, if Mr Mitchell was suggesting that he or the applicant could provide a certificate of solvency, it was clear that only the administrators could do so under s 87C(3)(d) of the EMDG Act.

7. As a result, the respondent (in Mr Chesterfield’s Reasons for Decision dated 30 November 2011) determined that the application for an extension of time to review the notices of determination for the 2007/2008 and 2008/2009 grant years should not be granted.

8. When Mr Mitchell received the decision made by Mr Chesterfield dated 30 November 2011 he arranged for the Second Application (dated 20 February 2012) to be lodged with the Tribunal.  This action meant that the Tribunal had the two Applications, dealing substantially with the same issues, for consideration.

   LEGISLATIVE PROVISIONS

9. Under s 29(2) of the AAT Act, any application to this Tribunal for review of the internal review decision was due 28 days after the Reasons for Decision were provided to the applicant on 30 November 2011. The applicant did not file an application within the required period and sought an extension of time for lodging the Second Application. The respondent opposed the extension of time application. The Tribunal is given a discretion to extend the time for making an application for review by s 29(7) of the AAT Act. Section 29(7) provides as follows:

   “Tribunal may extend time for making application

   (7)       The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so."

10. The EMDG Act contains provisions dealing with entitlement to a grant and to reconsideration of reviewable decisions. The provisions relevantly read:

    “87  Person under insolvency administration

    (1)       Despite Subdivision 2, a grant, or an advance on account of a grant, is not payable to a person if, at the time when, or at any time after, the person becomes entitled to the grant or advance:

    (a)       if paragraph (b) does not apply—the person or (where applicable) an associate of the person; or

    (b)       if the person is entitled to the grant or advance in the capacity of trustee of a trust estate:

    (i)        the person or (where applicable) an associate of the person; or

    (ii)       any beneficiary of the trust estate or (where applicable) an associate of the beneficiary;

    is under insolvency administration.

    …”

    “87C When is a body corporate under insolvency administration?

    (1)       Subject to subsection (2), a body corporate is under insolvency administration only if:

    (a) it is in any of the following situations under the Corporations Law:

    (i)        the body corporate is being wound up;

    (ii)       there is a receiver, receiver and manager, or other controller, of property of the body corporate who has functions or powers in connection with managing the body corporate;

    (iii)      the body corporate is under administration;

    (iv)      the body corporate has executed a deed of company arrangement that has not yet terminated;

    (v)       the body corporate has entered into a compromise or arrangement with another person and the administration of the compromise or arrangement has not been concluded; or

    (b) the body corporate is in a situation of a kind referred to in paragraph (a) under the law of an external Territory or a foreign country.

    Note:    For external Territory and foreign country see section 2B of the Acts Interpretation Act 1901.

    (2)       Despite subsection (1), a body corporate that, apart from this subsection, would be under insolvency administration is taken not to be under insolvency administration if there is in force a certificate given by the person administering the body corporate stating that the body corporate is able to pay all its debts as and when they become due and payable.

    Note:    For person administering the body corporate see subsection (3).

    (3)       In subsection (2):

    person administering a body corporate means whichever of the following has been appointed in relation to the body corporate:

    (a) the liquidator or provisional liquidator of the body corporate;

    (b) the receiver, receiver and manager, or other controller, of property of the body corporate;

    (c) the administrator of the body corporate;

    (d) the administrator of the deed of company arrangement executed by the body corporate;

    (e) the administrator of any compromise or arrangement into which the body corporate has entered;

    (f) a person exercising, under the law of an external Territory or a foreign country, the same functions and the same powers as a person referred to in one of paragraphs (a) to (e).”

    “98  Reconsideration of reviewable decisions

    (1)       A person who is affected by a reviewable decision may, if dissatisfied with the decision, request the CEO of Austrade to reconsider it.

    (2)       The request must be made by written notice received by the CEO of Austrade:

    (a)       within the period of 30 days after the day on which the person first receives notice of the decision; or

    (b)       within such further period as the CEO allows.

    (3)       The notice must set out the reasons for making the request.

    (4)       After receiving the request, the CEO of Austrade must reconsider the decision and may confirm or vary the decision in such manner as the CEO thinks fit.

    Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires applicants to be notified of their review rights.”

    CONSIDERATION

11. The interlocutory proceedings in this matter were confusing because the applicant had lodged both Applications in relation to the applications for grant for the 2007/2008 and 2008/2009 grant years. In relation to the First Application, I am satisfied that the respondent effectively informed Mr Mitchell on 24 March 2011 that it considered the matter had been resolved on 20 July 2010, and the application under s 98(1) of the EMDG Act was out of time. The respondent did not make a relevant decision on 24 March 2011.

12. In my view, the First Application is not before me and has been overtaken by the Second Application.  In the event that I am wrong in this view, the decision I reach in relation to the Second Application applies with equal force to the First Application.   

13. In relation to the Second Application, any application to this Tribunal for review of the internal review decision made by the respondent was due 28 days after the Reasons for Decision of Mr Chesterfield were provided to the applicant on 30 November 2011.  The applicant did not file an application within the required period and, by an application filed on 20 February 2012, has sought an extension of time for lodging the application to the Tribunal.

14. The prima facie rule is that proceedings will not be entertained out of time and an applicant must positively satisfy the Tribunal that it is proper to exercise the discretion in s 29(7) of the AAT Act to extend time: see Re Australian Telecommunications Commission and Commonwealth of Australia and Schmidt (1986) 9 ALD 349. The respondent submitted, correctly in my view, that a number of considerations are to be taken into account by the Tribunal in deciding whether to extend time. One of the considerations is the strength of the applicant’s substantive case. In relevantly analysing this consideration, the respondent submitted that the applicant’s substantive application continues to have no prospects of success. The applicant was under insolvency administration for the purposes of the EMDG Act on 20 July 2010, and a statement of solvency under s 87C(2) has not been provided. The applicant was put into external administration under s 436A(1) of the Corporations Act 2001 on 1 July 2010. Therefore, the applicant was under insolvency administration for the purposes of the EMDG Act and the grant was not payable from 1 July 2010 onwards. On 20 July 2010, the critical date for the purposes of s 87(1) of the EMDG Act, the applicant was still under insolvency administration. There was no certificate of solvency under s 87C(2), consequently no grant was payable on that date in accordance with s 87C(1)(a)(iii) of the EMDG Act.

15. On 22 October 2010, the applicant and its directors entered into Deed of Company Arrangement (“DCA”) with the administrators under s 439C of the Corporations Act. Again, there was no certificate of solvency under s 87C(2) of the EMDG Act, and consequently no grant was payable on and after that 22 October 2010 in accordance with s 87C(1)(a)(iv) of the EMDG Act.

16. It appears that, from a search of the Australian Securities and Investments Commission’s website, the applicant is still under administration. There is no evidence that the DCA has terminated, or a certificate of solvency has been provided. Therefore, s 87C(1)(a)(iv) of the EMDG Act continues to operate.

17. In its submissions, the respondent has referred to the decision of the Tribunal in Luna Lighting International Pty Ltd v Australian Trade Commission [2000] AATA 881. The applicant in Luna Lighting had become entitled to a grant within the meaning of s 87(1) on 8 February 1999 when the Commission made its determination. Indeed, on that date, the grant was payable. However, the applicant subsequently came under insolvency administration within the meaning of s 87C of the EMDG Act. As a consequence, the balance of the grant was not payable, in accordance with “the clear words of the section”. The Tribunal said:

    “The combination of subsections (1) and (2) of section 87 are, in our view, a clear expression of the legislature to deny payment of a grant to an applicant who is under insolvency administration at a time when such payment is due.”

    Here, the applicant is in a worse position than the applicant was in Luna Lighting. Here, a grant was not payable on 20 July 2010 by operation of s 87C(1)(a)(iii) of the EMDG Act, and is still not payable by operation of s 87C(1)(a)(iv) of the EMDG Act.

18. The respondent submitted (and I accept) that:

    (a)the Luna Lighting decision;

    (b)the plain wording of s 87(1) of the EMDG Act; and

    (c)the continuing absence of a certificate of solvency under s 87C(2) of the EMDG Act,

    are fatal to the applicant’s prospects of success on the substantive issue if the Tribunal was to allow an extension of time. Further, if the applicant is suggesting that it (via Mr Mitchell) can provide a certificate of solvency, it is clear that only the administrators can do so under s 87C(3)(d) of the EMDG Act.

19. At the conclusion of the interlocutory hearing, Mr Mitchell suggested that Mr Chesterfield did not apply an independent approach when reaching his decision on 30 November 2011.  He referred to an email sent by Mr Paul Stead to Mr Geoff O’Connell on 24 March 2011.  This is not a matter that is within the application for extension of time that was lodged by the applicant on 20 February 2012.  It is not a matter that is within the jurisdiction of the Tribunal to consider on review.

    DECISION

20. For the reasons outlined above, the extension of time is refused.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of

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Administrative Assistant

Dated  9 August 2012

Date(s) of hearing	3 July 2012
Advocate for the Applicant	Mr Stuart Mitchell, Export Solutions
Advocate for the Respondent	Mr Stephen Thompson
Solicitors for the Respondent	Sparke Helmore