Australian Trade Commission v International Universities of Australia Pty Ltd

REASONS FOR JUDGMENT 1 The respondent, International Universities of Australia Pty Ltd (IUA), made a claim for a grant under the Export Market Development Grants Act 1974 (Cth) to recoup a portion of the expenditure allegedly incurred by it in the twelve months ended 30 June 1994 and 30 June 1995 in the development of overseas markets for educational services. The applicant, Australian Trade Commission, the statutory corporation administering the Act, was not satisfied that IUA was entitled to a grant and refused the claim. IUA successfully applied to the Administrative Appeals Tribunal for a review of that decision. This is an appeal from the decision of the Tribunal which, by reason of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), is confined to questions of law. 2 In the meantime, the Export Market Development Grants Act was repealed by the Export Market Development Grants (Repeal and Consequential Provisions) Act 1997 (Cth). However, the repealed Act continued to apply to a claimant whose claim for a grant under that Act had not yet been finalised: see cl 2 of Sch 1 of the 1997 Act. 3 Subject to certain immaterial exceptions a claimant is eligible for a grant under the Act in respect of a claim period (defined to include the twelve months ended 30 June 1994 and 30 June 1995) if "the claimant has incurred eligible expenditure in the claim period" and the amount of that expenditure exceeds a particular sum: s 14(1). Expenditure is eligible expenditure of a person if three conditions are satisfied, namely "only if it is incurred by the person" (s 11A(1)(a)), "only to the extent to which it is claimable expenditure" (s 11A(1)(b)) and "only if it is qualifying export development expenditure" (s 11A(1)(c)). 4 As regards the first condition, expenditure is relevantly incurred "only at the time when the amount of that expenditure is acquitted": s 3(6). An amount is taken to have been acquitted when that amount is paid or set off against money owing: s 3(9). 5 Division 2 of Part 1A of the Act sets out the kinds of expenditure that are claimable. IUA says that it incurred expenditure in each claim period that is claimable expenditure, because the expenditure relates to "eligible services". Section 11C, which is to be found in Div 2, relevantly provides: "(1) Expenditure is claimable expenditure if: (a) it is incurred by way of expenses of, contribution towards expenses of or payments made to, an agent for the purpose of: (i) the carrying out of market research or the obtaining of market information; or (ii) the advertising or other means of securing publicity or soliciting business; … (2) "Expenditure is claimable expenditure under this section only to the extent to which it relates to one or more of the following: (a) … (b) eligible services;" 6 The parties and the Tribunal have proceeded upon the assumption that subs 11C(1) and subs 11C(2) create separate kinds of claimable expenditure. This is probably incorrect. The better view appears to me to be that subs (2) ("expenditure is claimable expenditure under this section") operates to restrict the type of expenses that are made claimable by subs (1) ("expenditure is claimable expenditure if") and does not create a separate category of claimable expense. However, because the point was not argued I will follow the approach of the parties. 7 Returning to the "eligible services" that are referred to in s 11C(2)(b), services are eligible by virtue of regulations made under subs 43(2) or subs 43(2A): see the definition of "eligible services" in s 3. The Export Market Development Grants Regulations are made under s 43. They declare services of each kind specified in Sch 4 to be eligible services: see reg 6. Amongst those services are: "8. Educational services provided outside Australia, being: (a) services in respect of the provision of approved courses; (b) services in respect of the establishment of educational institutions, study centres or educational facilities; (c) services in respect of the provision of curricula or of course services; (d) services in respect of the provision of courses of study prepared by arrangement with individual clients outside Australia, being courses that are administered or intended to be administered individually to those clients; or (e) services in respect of the provision of courses of study related to the training of persons having responsibility for the training of other persons." 8 The final condition that must be satisfied is that the expenditure must be qualifying export development expenditure. Division 4 of Part 1A sets out the purposes for which expenditure must be incurred to be qualifying export development expenditure. Here IUA relies upon s 11Z(5) which provides that: "Expenditure is qualifying export development expenditure … if: (a) in the Commission's opinion, it is incurred primarily and principally for the purpose of: (i) creating or seeking opportunities for; or (ii) creating or increasing demand for; the supply … of eligible services outside Australia; and (b) the supply … is for reward and in the course of carrying on business in Australia." 9 It is convenient now to relate the material facts. In mid 1993 the University of New South Wales and Monash University agreed to establish a company, to be known as International Universities of Australia Pty Ltd, for the purpose, among others, of providing technical assistance and expertise to enable a private university to be established in Indonesia. The laws of Indonesia prohibit a foreign corporation establishing a university except in conjunction with a local organisation. Accordingly, the universities entered into a memorandum of understanding with Yayasan Persaudaraan Bangbayang'66, an Indonesian foundation, to establish a new educational institution in Indonesia. 10 Shortly after this agreement was concluded, Monash University appointed Michael Andersen as a full-time consultant to assist in achieving the University's "overall aims and objectives for the Indonesian market". The consultancy agreement provided (by article 2) that: "The consultant will immediately undertake duties and responsibilities, which are a direct consequence of the memorandum of understanding signed on January 18, 1994 between Monash, the University of New South Wales and Yayasaan Persaudaraan Bangbayang Enam-Enam. (The Indonesian parnter) Those duties are to act as a liaison between Monash and the Indonesian partner co-ordinating all elements of the intended future joint venture company. The consultant will supervise all matters related to project management covering project start up, project execution and project close out working together with the joint cooperation project's joint working group team members. Furthermore, the consultant will perform all duties described within the joint venture technical assistance and management agreement under the specific job description the consultant will occupy in the joint venture company, as well as other tasks as required." A large proportion of the claimed eligible expenditure represents the amounts paid to Mr Andersen under the consultancy agreement. 11 In May or June 1994 the universities and the Foundation entered into an agreement styled a "Master Agreement" to give effect to their memorandum of understanding. By the master agreement the parties agreed to establish in Indonesia a company referred to as "the PMA Company" to implement the objective of establishing a new educational institution in Indonesia. The capital of that company was to be held as to 80 per cent by a company appointed by the Foundation and as to the balance by a company owned or controlled by the universities: article 9.3. The universities anticipated that their shares would be held by IUA, a company which the universities had incorporated on 3 February 1994 and in which each university held one half of the issued capital. The courses taught at the new university were to be managed and operated by the PMA company: article 19. To achieve this, article 5.3 of the master agreement imposed upon the universities an obligation: "[T]o provide such experience and resources within their possession or control in the areas of education related technology, know-how and human resources and to do such things as may be reasonably in their power to ensure that cooperation in the venture conducted by PMA Company is successful and the resources and experience to be provided in accordance with this clause are in areas of:- 5.3.1 continued faculty and instructor support; and 5.3.2 textbooks, instruction manuals and related materials, equipment and software; and 5.3.3 training programs, assistance and support as required in accordance with this Agreement; and 5.3.4 promotional, descriptive literature and related public relations and marketing support and assistance as related to the educational field. The Universities acknowledge that all students who participate in and successfully complete an undergraduate or postgraduate course offered pursuant to this Master Agreement will be awarded the same degree as if they had successfully completed the same course of study at the Universities." Article 6.2(c) contemplated that: "The PMA Company when established shall enter into a technical assistance agreement with the Foundation (or if the PMA Company is not permitted by Indonesian law to do so, the Universities will enter into a technical assistance agreement with the Foundation), which may be proceeded by an interim technical assistance agreement between the Foundation and the Universities pending formation of the PMA Company pursuant to the applicable terms and conditions hereof. The Foundation through its Lembaga will conduct only those project areas which the PMA Company is not permitted to conduct under Indonesian law;" 12 The Foundation and IUA entered into a technical assistance agreement on 8 June 1994. The recitals to that agreement record that: "C. The Parties are in the process of entering into integrated Master, Joint Venture and ancilliary Agreements whereby they shall be common shareholders in an Indonesian Joint Venture PMA Company, (hereinafter 'PMA Company') now being established to provide, among other things, enhanced technical assistance services to the Foundation on a long-term basis. D. There is an immediate need to provide certain initial educational programs to the Indonesian community before the PMA company can be commercialized." The technical assistance that IUA was required to provide was described in clause 1 as: "[A]ll the in-country technical academic assistance services, course materials, teaching aids, teaching staff, and know-how in accordance with Master Agreement Article 5.3 at it's own expense, in relation to the management and operation of a pre-University inscription preparation course of study (hereinafter, 'Uniprep') in Jakarta, Indonesia." The Foundation was obliged to pay a fee for the services rendered by IUA: clause 5. 13 The 1994 Master Agreement lapsed because the parties did not adhere to the timetable that was prescribed for taking the various steps required. On 26 September 1995 a further master agreement was entered into, substantially on the same terms as the earlier agreement. 14 In consequence of the above arrangements a private university was established in Indonesia. The Tribunal found that IUA "was to be involved in curricula design, campus design, installation of information technology systems, entry systems, financial management, student management, organisational management and marketing." 15 Robert Cochrane, the Chief Executive Officer of IUA, gave evidence to the Tribunal. He described the services provided by IUA as being "in respect of the establishment of educational institutions, the provision of curricula, the provision of courses of study delivered by arrangement with an Indonesian partner, being courses which are intended to be administered in Indonesia and services in respect of the provision of courses of study related to the training of persons having responsibility for the provision of training in Indonesia." Mr Cochrane also explained the role of Mr Andersen. He said: "Without the overseas representation the [Indonesian] university would not have been established and the market for technical services which is now coming to fruition would not have occurred. … [T]he overseas representative's services were directed entirely toward the establishment of an educational institution that also provided an opportunity for IUA in relation to the provision of curricula and other services as [previously] outlined." 16 In his evidence, Mr Cochrane summarised the nature of the expenditure that was claimed as the eligible expenditure of IUA. He said that it was for the marketing, promotion and establishment of representation in Indonesia. He explained that some of the expenditure was to promote the new university which would then "buy the services of [IUA]". The categories of expenditure for which the claim was made were described by the Tribunal as: "· fares · overseas visits allowances · literature and advertising · communications · overseas representation · agents/consultants, overseas · other" 17 However, there was a problem with the expenditure which caused the Commission to deny the claim for a grant. None of the expenditure was paid directly by IUA. All of the expenses were paid either by the universities or by a subsidiary of each university. Mr Cochrane explained that: "[M]oney was spent by both shareholders [of IUA], but on the understanding that this spending was on account of IUA. … In this case the new business established by the Universities commenced upon the signing of the [Memorandum of Understanding] and operations of that business commenced immediately, with the incorporation of the corporate entity IUA following … All of the expenses claimed were incurred by the new 'business' but using the cash resources of the two Universities and then being recorded in the books of IUA. During that interim period both the Universities provided funds for IUA business. The intention was for those funds to be provided on a loan basis to IUA. … It is important to note that the funds expended by the universities were funds expended on behalf of IUA." 18 Taking the marketing expenses as an example, Mr Cochrane described the accounting treatment of the payments as follows: "Q. So can you give me, just so I can understand it clearly, what would be the journal entries that would be and the names of the journals that would represent that accounting? A. A simple - I mean, if you are classified as marketing expenses, debit marketing expenses and credit, profit and loss appropriation account, credit bank if you've paid it yourself. In the fact that the monies were paid on our behalf by the universities it would have been debit marketing expenses and credit loan from the universities." 19 This evidence was substantially confirmed by documents that were tendered in evidence, including a summary of the accounting treatment by IUA of the payments made by the universities and the general journal of IUA for the six months ended 30 June 1995. These documents show that the payments by the universities were recorded as loans to IUA and that the obligations in respect of which the payments were made were treated as expenses incurred by IUA. Mr Cochrane did, however, misdescribe one aspect of the manner in which the payments were treated in the accounts. When a payment was made it was not debited to a particular type of expense, it was debited to a capital account. The evidence explained that this was because there was not expected to be an immediate return from the expenditure and therefore it was appropriate to record the expense as a capital item and not as a revenue expense. 20 The money lent to IUA was not repaid. Instead, after the claim periods, the debt was capitalised by the issue of shares in IUA. In accounting terms what transpired was that the universities were recorded as having released the debts due to them, the release produced a capital profit which was credited to a share capital purchase reserve fund and that fund was applied to pay the amount due on the allotment of new shares to the universities. 21 Before the Tribunal there was considerable debate as regards whether IUA had incurred any eligible expenditure within the meaning of s 14(1)(a) in view of the fact that all expenses had been paid by the universities. For IUA it was submitted that when the expenses were paid by the universities (or their subsidiaries) those payments were made on behalf of IUA and accordingly by IUA. In this connection reference should be made to s 3(2) which provides: "For the purposes of this Act, where an act is done by an agent on behalf of his principal, it shall be deemed to be done by the principal and not by the agent." 22 The Commission argued that if reliance were to be placed on s 3(2) it was necessary for IUA to establish that the universities had been appointed to act as the agents of IUA in relation to the transactions in respect of which the expenses were paid. It submitted that the evidence did not support a finding that the universities were agents of IUA and moreover that the contrary was true, namely that IUA was the agent of the universities. 23 The Tribunal resolved this issue in favour of IUA at least regarding the expenses that were paid after the date of its incorporation. To understand how the Tribunal was able to reach this conclusion I will set out two paragraphs from its reasons: "18. The purpose of s.11A(1)(a) is to restrict claims to the person incurring the expenditure, i.e. to stop expenditure incurred by one party being claimed by another. This, no doubt, is to preclude expenditure incurred by one person being claimed or claimable as being eligible expenditure in order to receive a grant by another person. The use of the adverb 'only' coupled with the use of the definite article before the word 'person' in sub-clause (a) of s.11A(1) combine to make it apparent that the legislature intends to restrict eligibility to the person incurring the expenditure. In the opinion of the Tribunal s.3(2) is an enabling provision and it is not to be read restrictively. The Act has as its preamble, '… the purpose of providing Incentives for the Development Export Markets' [i.e. for Australian goods know how, etc]. It is beneficial legislation. As such it must be given an interpretation which promotes its stated purpose (see Dawson J in Mills v Meeking and Another (1990) 169 CLR 214 at 235 - while his Honour was the dissenting judge in this case, there is nothing which suggests the purposive approach of statutory interpretation should otherwise than be applied). If ultimately the grant claimant is, in fact, the person incurring the expenditure, then the expenditure should be regarded as being incurred by that person. 19. In the instant case the Tribunal is satisfied that the evidence establishes that, from the time of the signing of the first MOU, the universities intended to, and did, incorporate a company (the applicant) for the purpose of representing their joint interests in the cooperative venture to establish a private university in Indonesia. Until its incorporation, the applicant could not incur any expenditure because it is not 'a person' (s.3(1) of the Act defines a person as including a company). Accordingly, any claim for expenditure in the period prior to 3 February 1994 it is not able to succeed. In the period prior to incorporation, and indeed for some period after incorporation, the universities (or their subsidiaries) were utilised as the funding and administrative vehicles to progress the universities' intentions. Accordingly, the consultancy agreement with Mr M. Andersen is expressed to be with Monash. That agreement was signed on 30 January 1994 prior to the incorporation of the applicant. The Tribunal is satisfied that the consultancy agreement was reached in contemplation at that time of the applicant's incorporation: that it was always intended that the applicant would be responsible for the payment of Mr Andersen's fees and expenses; and that ultimately this was recorded as being the case in the accounts. Accordingly, the Tribunal accepts this and other expenditure arising in a similar way to be, in fact, incurred by the applicant rather than by Monash or UNSW." 24 Let me say at the outset, the issue raised for the determination of the Tribunal was not to be resolved by reference to the beneficial nature of the Act and by the rule of construction that an enactment be interpreted in accordance with its purpose. Although it is always the task of a court of construction to interpret a statute according to the intent of Parliament (Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 234), the purposive approach is usually called in aid when an application of the ordinary and grammatical meaning of a statute to the subject matter with which it deals with gives rise to unintended consequences: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation of the Commonweatlh of Australia (1981) 147 CLR 297 at 305-321. The purposive approach is not, however, limited to those circumstances. In Mills v Meeking (1990) 169 CLR 214 at 235 Dawson J said: "The requirement that a court look to the purpose or object of the Act is thus more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction. The mischief or purpose rule required an ambiguity or inconsistency before a court could have regard to purpose. The approach required by [the purposive rule] needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction." (citations ommitted) 25 Here the relevant provisions of the Act, which I have already set out, can be applied intelligently and consistently with its other provisions without departing from their ordinary or grammatical meaning. This is not a case where a choice must be made between competing interpretations. Indeed the Tribunal in its reasons did not point to a possible construction of the Act which did not conform to the plain meaning of the language employed. Further, this is not a case of a provision in a statute where more than one possible construction is open. Although contending for a beneficial construction, IUA did not refer to any section which, when considered in its context, was said to have a meaning that was different from its ordinary meaning. 26 How then does the statute operate? Section 14(1)(a) imposes a requirement that the claimant is the person who has incurred the expenditure that is said to be eligible expenditure. That requirement is emphasised in s 11A(1)(a) which provides that expenditure is eligible expenditure of a person only if it is incurred by that person. Another requirement that is imposed by s 14(1)(a) is that the expenditure must be incurred in the claim period. It will only be incurred in the claim period if the amount of that expenditure is acquitted (that is paid or set off) in that period. That is the effect of subs 3(6) and subs 3(9). If the expenditure is in respect of services, those services must be supplied by the claimant. Finally, the services must be supplied in the course of a business carried on in Australia by the claimant: see generally Export Development Grants Board v Miller Pohang Coal Co Pty Ltd (1985) 61 ALR 125; Fliway-Afa International Pty Ltd v Australian Trade Commission (1992) 39 FCR 446. 27 Although, expenditure is only incurred when it is acquitted, the requirement that the claimant be the person who incurs the expenditure means more than that the claimant be the person who has paid that expenditure. The combined effect of ss 14(1)(a), 11A(1)(a), 3(6) and 3(9) makes it clear that the claimant must also be the person who has assumed the obligation that is discharged on acquittal. That is, expenditure is "incurred" under this Act only when the claimant has both assumed the obligation to pay an expense which is enforceable at law (Nilsen Development Laboratories Pty Ltd v Federal Commissioner of Taxation (1981) 144 CLR 616 at 627) and has acquitted that expense. It is not necessary to decide whether the obligation must be assumed under a contract or by some other means, as for example pursuant to principles of restitution or according to the doctrines of equity. 28 The finding by the Tribunal that "it was always intended that [IUA] would be responsible for the payment of [the relevant] fees and expenses: and that ultimately this was recorded as being the case in the accounts" is supported by the evidence to which I have referred. The books of account of IUA show that it received loans from the universities and the indirect evidence is that the books of account of the universities record these amounts as having been lent to IUA. These entries, which the Tribunal found were made to record the intentions of the parties, establish the making of the loans: In re Harmony and Montague Tin and Copper Mining Co (Spargo's case) (1873) 8 Ch App 407; Manzi v Smith (1975) 132 CLR 671, Federal Commissioner of Taxation v P Iori & Sons Pty Ltd (1987) 87 ATC 4775; Brookton Co-op Society Ltd v Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 441. It follows that while the expenses were actually paid by the universities, or their subsidiaries, in law the expenses were paid by IUA. 29 However, that was not an end to the enquiry. It was still necessary for the Tribunal to find that the obligation to pay the expenses had been assumed by IUA. In respect of expenditure incurred after the incorporation of IUA, one way the obligation could arise is if the agreement which was the source of the obligation had been entered into by IUA or by its agent engaged for that purpose. With regard to pre-incorporation contracts, such as the consultancy agreement with Mr Andersen, the position is not so straightforward. Statutory provision apart, a contract made on behalf of a company not yet incorporated does not affect the company when it is later incorporated. There could be no liability on the company, because it was not a legal entity with capacity to enter into a contract before it was incorporated and thus it could not contract either directly or through the agency of another person: Black v Smallwood (1966) 117 CLR 52. Of course the unauthorised act could be "adopted" by the company after it has become incorporated by conduct that justifies the conclusion that the company had itself entered into the agreement. Section 131 of the Corporations Law now enables a pre-incorporation contract to which the section applies to be ratified by a company formed after the contract was entered into. The section applies to a written contract that was entered into in the name of the proposed company and to a contract entered into by a person acting as agent or trustee for the proposed company: see s 131(1). To be effective, ratification must take place within a reasonable time. That is to say, the non-existent company must be incorporated within a reasonable period of time after the pre-incorporation contract was entered into and it must ratify that contract within a reasonable period. 30 The Tribunal did not explore any of these issues. The Tribunal said that if a claimant "ultimately" incurred the eligible expenditure then the expenditure should be regarded as having been incurred by that person. Having found that it was always intended that IUA be responsible for the fees and that this was "ultimately" what was recorded, the Tribunal held that the expenditure had been incurred by IUA. This analysis focuses on the claimant as the person who has made payment of the claimed expenditure, but it does not deal with whether the claimant was obliged to make that payment. In the absence of any finding that IUA was liable to meet the expenses in question, the conclusion that IUA had "incurred" the eligible expenditure was not open as a matter of law. 31 In order to succeed in its claim IUA was also required to show that it had incurred the claimed expenditure principally for the purpose of creating or increasing demand for its supply of educational services: s 11Z(5) and item 8 of Sch 4 to the Regulations. Before the Tribunal, the Commission argued that as IUA provided educational services pursuant to the 1994 technical services agreement any expense incurred after the agreement was entered into could not relevantly be said to create or increase a demand for those services. The basis for the argument was the assumption that no demand could be created after the agreement, because the Indonesian university was under an obligation to accept the services that were supplied to it by the agreement. 32 The Tribunal did not deal directly with this argument. After referring to the relevant provisions of the legislation and regulations the Tribunal said: "It is clear from the 1994 master agreement, as confirmed in the 1995 master agreement, that it was contemplated that a new educational institution was to be established in Indonesia. It was Mr Cochrane's evidence that, even with the support and involvement of [the Foundation], there was still a need for money to be expended in increasing the demand for the new educational establishment in Indonesia. In this exercise Mr Andersen was to play a pivotel role. The Tribunal is satisfied from the evidence that expenditure was incurred for the purpose of increasing the demand for the supply of an eligible service and hence the expenditure qualifies." 33 Earlier the Tribunal had described the various agreements that had been entered into and the type of educational activities that were to be provided by IUA. Later, when dealing with another aspect of the case, the Tribunal found that the expenditure had been "incurred in the marketing and promotional activities aimed at increasing the demand for educational services which it [IUA] sought to provide". This was a reference to the subjective intention of IUA in incurring the expenditure: Parker Pen (Aust) Pty Ltd v Export Development Grants Board (1983) 46 ALR 612 at 621. 34 Leaving aside for the moment the argument concerning the effect of the technical services agreement, I should mention another contention by the Commission. It was said that the findings that I have just referred to did not support the conclusion that the expenditure by IUA related to the supply of educational services. I do not agree. In its reasons, the Tribunal described how the Indonesian university came to be established and it set out the services that were to be provided to the new university. It will be remembered that the provision of service for the establishment of a university and the services that were provided to the new university are educational services within cl 8(b) and cl 8(c) of Sch 4. That the purpose of the expenditure was one of the purposes required by s 11Z(5) is evident from the express findings made. In this connection I find support in what was said by Jenkinson J in Commonwealth of Australia v Borg (1994) 20 AAR 299 at 308-9: "The written reasons of the Tribunal for its decision afford a narrative account of the relevant events and of the substance of some of the medical opinion evidence before the Tribunal. The narrative is so expressed as to expose the conflicting expert opinions on the questions which the tribunal considered critical to the determination of the review. The reasons do not explicitly state those questions as those which the Tribunal considered to be critical, but the expression of the Tribunal's conclusions, considered in the light of the preceding narrative, enable the questions to be identified with confidence. The only criticism which might be made of the document is that it does not explicitly indicate reasons for preferring one expert witness to another. But those reasons can be inferred from the whole content of the document. In my opinion this ground fails. 35 What of the argument concerning the effect of the technical services agreement? In the end the Commission conceded, correctly in my opinion, that it was open for the Tribunal to find that by increasing the demand for the new university IUA would be increasing the demand for its supply of educational services. To put the matter more simply, by encouraging enrolment at the Indonesian university, IUA would thereby increase the amount of educational services the university would need to acquire from it. Hence the existence of the technical services agreement could not, of itself, take the claim outside s 11Z(5). 36 In the end, the complaint articulated by the Commission was that the Tribunal should have dealt with its submission concerning the effect of the agreement, but failed to do so. This was said to be an error of law that justified setting aside the decision. 37 Dennis Wilcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267 concerned an appeal from a decision of the Tribunal affirming a decision by the Commissioner of Taxation to disallow an objection against an assessment under the Income Tax Assessment Act 1936 (Cth). The taxpayer had sold shares for more than it had paid. The Commissioner taxed the excess as profit. At the hearing the taxpayer argued that the shares were worth more than it had paid and that the value of the shares should be taken into account in determining whether it had derived assessable income. The Tribunal did not deal with this argument. Its failure to do so was said to be an error of law. Jenkinson J, with whom Woodward and Foster JJ agreed, said (at 276-277): "But this submission concerning the ascertainment of profit was worthy of serious consideration and was seriously advanced to the tribunal. It ought, therefore, to be inferred that the submission was inadvertently overlooked by the tribunal either when the reference was being decided or when the reasons for the decision were being committed to writing (cf Sullivan v Department of Transport (1978) 20 ALR 323 at 353). In either event there has been, in my opinion, an error of law by the tribunal, so that the power of this court which s 44(1) of the Administrative Appeals Tribunal Act 1975 confers to decide the appeal 'on a question of law' is available. The failure of the tribunal to carry out the duty to consider and determine each question of law and fact relevant to the determination of the reference to it of the respondent's decision, or the failure to carry out the duty imposed by s 43(2) of that Act, as the case may be, has brought about a miscarriage of justice by preventing this court from affording the parties a determination whether the tribunal's decision was vitiated by error of law: see Pettitt v Dunkley [1971] 1 NSWLR 376." 38 In this case, the only submission that was put to the Tribunal, as appears from the transcript of proceedings, was that: "The expenses that are claimed, the Tribunal must be satisfied, were incurred primarily or principally for the purpose of creating demand for those services. Now, what we know from the evidence, in my submission, is that from 8 February 1994, IUA had a contract to supply those services, and there was, in my submission, no need whatsoever to spend any money primarily and principally to create demand or create opportunity for the provision of its services to YPB66, or to the University. The University was contractually bound to accept those services." 39 It is true that the Tribunal did not deal with this argument in terms. However, at the heart of the submission was the contention that there was no need for IUA to spend money to create or increase a demand for its services. The Tribunal did deal with this contention. It found that the purpose of the expenditure was to create or increase a demand for the services provided by IUA. It follows from this finding that the Tribunal was required to reject the argument of the Commission. The Tribunal did not fail to meet its statutory obligations. 40 In any event, even if I am wrong in this conclusion, I would not set aside the decision of the Tribunal on this account alone. In view of the finding that was made concerning the purpose for the expenditure and the considerable evidence that supported that finding, no useful purpose would be served in remitting the matter to the Tribunal for a further hearing. That exercise would be futile for it is inevitable that the same result would be reached: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145. 41 There remains one final matter that must be mentioned. At the commencement of the hearing the Commission sought leave to add an additional ground of appeal. The ground sought to be raised was that in virtue of specific findings of fact that had been made by the Tribunal, it was precluded from holding that IUA was eligible for a grant. The findings to which reference was made were that (a) some of the claimed payments were made by IUA in the relevant grant year; (b) reimbursement was subsequently made by IUA outside the claim periods; and (c) ultimately IUA's responsibility for the payment of the consultant's fees and expenses was recorded as such in the accounts. The conclusion sought to be drawn from these findings was that even if the claimed expenditure was eligible expenditure, the expenses were not incurred in any relevant claim period. 42 That is not what was meant by the findings, in my opinion. The first finding is to be understood as meaning IUA did not directly make the payments in question. The second finding is a reference to the fact that the amounts that had been lent to IUA to enable it to make the payments were reimbursed (as it turned out by way of release) outside the claim period. So understood, each finding is supported by and is in accordance with the evidence. These findings do not preclude the conclusion that the payments were made within the claim periods and, subject to establishing that they were incurred by IUA, that the requirements of the Act have been satisfied. Accordingly, leave to amend will be refused. In the result, the appeal will be allowed with costs and the matter remitted to the Tribunal. If in the course of its reconsideration, the Tribunal makes similar findings to those just mentioned it should not treat them as determinative of the case. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.