Federal Court of Australia|1992-12-04|Before: Wilcox J

Re Fliway-Afa International Pty Ltd v Australian Trade Commission [1992] FCA 597; (1992) 39 FCR 446 (4 December 1992)

Export Grants - Application for grant entitlement by Australian freight forwarder - Necessity for supply of "eligible services" outside Australia - Requirement that "eligible services" be supplied pursuant to a contract for the supply of services between the applicant and a person resident outside Australia - Claimed contracts between applicant and persons resident outside Australia made by "agents" of applicant - Whether Tribunal erred in law in characterising relationship between applicant and its overseas representatives as one of co-venture rather than agency - Effect in law of Tribunal's finding that no overseas representative had purported to bind applicant.

Solicitors for the Respondent: Australian Government Solicitor

2. The applicant pay to the respondent its costs of the proceeding.

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

WILCOX J: The applicant, Fliway-Afa International Pty Ltd, carries on business as a freight forwarder. The company sought grant entitlements pursuant to the Export Market Development Grants Act 1974 in respect of two financial years, 1986-1987 and 1988-1989. The respondent, the Australian Trade Commission, determined each of those applications in a manner partially favourable to the applicant and partially unfavourable. The applicant sought review of the partial refusals by the Administrative Appeals Tribunal. The review was conducted by Mr B.J. McMahon (Deputy President). He affirmed the decisions under review. The applicant challenges his decision, contending that it reflected error of law.

2. The Exports Market Development Grants Act was extensively amended in 1991. For present purposes, those amendments are immaterial. The case falls to be determined by reference to the form of the legislation in the relevant grant years.

3. The purpose of the Act is to encourage Australian suppliers of goods and services to seek overseas business which might yield export income for Australia. To this end, the Act provides for partial reimbursement of what the Act calls "eligible expenditure". The meaning of this term is explained by s.4(1) of the Act which relevantly provides:

"s.4(1) Subject to the succeeding provisions of this section, a

reference in this Act to eligible expenditure is a reference

to expenditure that, in the opinion of the Commission, has

been incurred by a person primarily and principally for the

purpose of creating or seeking opportunities, or creating or

increasing demand, for -

...

(e) the supply, by that person, for reward, in the course

of carrying on business in Australia, of eligible

services outside Australia;"

4. The term "eligible services" is defined in s.3 of the Act by reference to the regulations. By para.4 of Schedule 4 of the regulations, "eligible services" includes:

"Technical services in the field of transport, being services supplied

in relation to -

(a) the transport, by air or by sea, of passengers or freight; or

(b) towing operations at sea.

from a place outside Australia to a place in Australia or another place

outside Australia."

Freight forwarding services fall within this paragraph: see VIP Airfreight Pty Limited v Australian Trade Commission [1990] FCA 202; (1990) 96 ALR 667. It was, accordingly, common ground before the Tribunal that the services provided by the applicant for its customers constituted "eligible services".

5. It will, however, be recalled that s.4(1) limits "eligible expenditure" to expenditure incurred by a person carrying on business within Australia for the purpose of creating or seeking opportunities, or demand, for the supply by that person of eligible services outside Australia. It is not enough that the expenditure be directed to the creation of opportunities or demand for the services of some other person. The person incurring the expenditure, being a person carrying on business in Australia, must be the prospective service provider.

6. This requirement of identicality does not exclude the general principles of agency. Indeed, s.3(2) recognises the possibility of an agency by providing:

"For the purpose 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."

7. The Act deals with the question what constitutes a supply of eligible services outside Australia. Section 3(4) provides:

"For the purposes of this Act, a person shall be taken to supply

eligible services outside Australia ... if, and only if, the Commission

is satisfied that the services are supplied in pursuance of a contract

for the supply of the services between that person and a person resident

outside Australia."

8. It was common ground before the Tribunal that the applicant did not, itself, provide freight forwarding services outside Australia. It operated only within Australia. However, the applicant had agreements with several overseas freight forwarders. The applicant described these companies as "agents". The learned Deputy President said that the main issue before him was whether those arrangements amounted to agreements of agency, within the legal meaning of that term, so as to make the supply of services by the overseas freight forwarders the supply of services by the applicant. Put another way, in the language of counsel who appeared for the applicant in this proceeding, the question was whether overseas freight forwarders who entered into arrangements in their own country with exporters of goods to Australia, in relation to the handling of those goods prior to leaving the country of origin, did so on their own behalf as principals or as agents of the applicant.

9. It appears from the Tribunal's reasons for decision that there was argument before the Tribunal regarding the meaning in law of the word 'agent'. The Deputy President dealt with this question in a way which has not attracted criticism before me. It is not necessary for me to refer to what he said, other than to note his comment that the word "agent" is often used loosely, especially by non-lawyers. For example, as the Deputy President mentioned, it is commonplace for the word to be applied to a representative of a company within a particular area, even though the representative has no authority to enter into a contract on behalf of the principal. The Deputy President referred to the decision of the High Court of Australia in International Harvester Company of Australia Pty Limited v Carrigan's Hazeldene Pastoral Company [1958] HCA 16; (1958) 100 CLR 644; in particular, a passage at 652-653 which includes the following:

"Agency is a word used in the law to connote an authority or capacity in

one person to create legal relations between a person occupying the

position of principal and third parties. But in the business world its

significance is by no means thus restricted ...

No one supposes that the 'distributing agent' or 'exclusive agent' in a

particular 'territory' for a proprietary commodity or specific kind of

article or machine is there to put a 'consumer' in contractual relations

with the manufacturer. In the case of any wide geographical

distribution there is a general understanding of the practices of

allotting territories, of zoning, of providing some regional

superintendence of dealers or distributing 'agents' as well as of the

maintenance, and sometimes of the proper use, of the machine or article.

None of this implies that the manufacturer or the head supplier

contracts with the ultimate buyer or 'consumer' as vendor."

10. The Deputy President turned to the question whether the various overseas freight forwarders had the authority or capacity to create legal relations between the applicant and customers in their areas. In considering that question, he examined, first, the agreements between the applicant and the overseas freight forwarders and, secondly, evidence (primarily from the applicant's managing director, Trevor David Williams) concerning the manner in which the applicant conducted its affairs.

11. The Deputy President identified what he called, "three waves of agreements between the applicant and its overseas representatives". He found that the major overseas representative of the applicant is the Union Transport Group of Germany. Apart from Germany, the company also has offices, or subsidiaries, in the United Kingdom, Canada and the United States of America. The first of the relevant agreements was made between the applicant and the German and English Union Transport companies in 1981. This agreement was tendered in evidence before the Tribunal. The Deputy President found that the nature of the relationship created by the agreement is indicated by its first five operative clauses:

"1. All parties agree to co-operate with each other for the

development of air cargo and to exchange information mutually

concerning the handling of cargo as an airfreight forwarder

between AUSTRALIA and GERMANY and U.K.

2. All parties will make every effort to increase traffic by active

calling, the following up of sales leads and personal presentation

of Routing Order if geographically possible.

3. All parties agree to adapt their rate structures to meet

competition particularly when large volume traffic is involved

subject to the final rate being a viable proposition for both

parties.

4. Profit Share - It is agreed initially that U.A.T. and U.T. shall

receive 75% of current traffic and FLI CARGO is to receive 25%.

All traffic generated by all parties from this point on is to be

on a 50/50 profit share.

Profit Share shall be based upon the difference of the agreed nett

buying rate and the freight shown on the hawb less possible

onforwarding/incentive charges payable.

5. It is also agreed at a point in time, when all parties have a fair

share of freight moving, then agreement moves to a total 50/50

profit share."

12. The abbreviation "hawb", in para.4, is a reference to the house airway bill.

13. The Deputy President commented on this form of agreement in the following way:

"The relationship contemplated by this agreement was clearly one of

loose association between business houses seeking to assist each other

in obtaining market share. Although later agreement tended towards a

more formal definition of the relationship, it seems to me that the

evidence points to the fact that the original arrangements are still

observed in practice."

14. There was evidence before the Tribunal that the United States of America was excluded from the initial agreement with the Union Transport Group because the applicant already had a representative in that country. However, the other arrangement was terminated in December 1983. In early 1984 the applicant appointed the United States Union Transport Company to guard its interests in that country. Mr Williams deposed that, as the applicant had a prior relationship with Union Transport in other countries, it was thought unnecessary to reduce to writing the United States agreement. No written agreement was made with the United States Union Transport Company until a "third wave" agreement was made in February 1991.

15. The "second wave" of agreements came into existence in 1987 when the applicant entered into agreements with the China National Foreign Trade Transport Corporation in relation to freight originating in China and destined for Australia, with Meadows Freight for similar freight originating in the Philippines and with Japan Transport Group ("JTB") for freight originating in Japan. The Deputy President said that the nature of these relationships was illustrated by the first four operative clauses of the JTB agreement:

"1. Appointment

JTB appoints FLIWAY as its sole agent in Australia and FLIWAY

appoints JTB as its sole agent in Japan. Both appointments

pertain to air freight traffic between Japan and Australia vice

versa only.

2. Services

A) The objective of this mutual bilateral Agreement is to

achieve a close and successful business relationship in the

air freight field, which should produce for JTB/FLIWAY a

greater portion of the air freight market between Japan and

Australia.

JTB/FLIWAY will strive to handle each others' air freight

consignments in order to secure the interest of their

respective traffic.

B) JTB/FLIWAY will provide each other with sales leads and

routing orders. It is understood that JTB/FLIWAY will

follow said leads, and present each others' routing orders

to the shippers concerned immediately after receiving said

orders.

C) JTB/FLIWAY will continually exchange their current

consolidation tariffs to enable each other to quote only the

air freight rates in effect.

D) JTB/FLIWAY shall turn over documents pertaining to

JTB/FLIWAY individual and consolidation consignments

addressed to the consignee or to the consignee's authorized

representative promptly without imposing service charges.

E) Concerning JTB/FLIWAY shipments with freight charges

collectable from consignees, it shall be the responsibility

of JTB/FLIWAY to collect payment of all charges due before

making final delivery.

F) Should an individual consignee in Japan or Australia refuse

his consignment, JTB/FLIWAY shall communicate this to the

shipping party to this Agreement at once by telex/Fax.

Further instructions (sic) relating to such shipments shall

be (in each case requested by JTB or FLIWAY) issued by the

shipper of the goods.

G) All expenses for telephones, telegrams, telex messages or

other communications sent in connection with or pursuant to

this Agreement, as between parties hereto, shall be paid for

by the sender, irrespective of the right of said party to

charge his principal with these expenses.

3. Commission

JTB/FLIWAY shall split the profit on 50:50 base. The profit means

the balance between the airline buying rate and gross freight

amount charged to customer.

4. Accounting

A) JTB will keep an account in Japanese Yen for its receivable

payments, and FLIWAY will keep an account in USD for its

receivable payments.

B) Not later than 15 days of the month following occurrence

(sic) of transaction, each party hereto shall submit to the

other a statement of accounts receivable for the previous

month.

C) JTB will remit the aggregate amount as per FLIWAY invoice

within fifteen (15) days of receipt of same. JTB

remittances shall be addressed to:

D) FLIWAY will remit the aggregate amount as per JTB invoice

within fifteen (15) days of receipt of same. FLIWAY

remittances shall be addressed to:

THE DAI-ICHI KANGYO BANK, LTD

Yurakucho Branch, 1-21-1, Yurakucho

Chiyoda-ku, Tokyo, Japan

A/C No. 77-006-131355.

E) Possible bookkeeping differences of either party shall be

brought to the attention of the other party within seven (7)

days of occurrence in order to discuss and settle them

within the month."

16. In relation to this form of agreement the Deputy President commented:

"Although the role of each of the companies is described as that of an

agent, it is apparent from the terms of the agreement that what is

contemplated falls far short of the mutual appointment of agents in the

International Harvester sense. The word appears to be used loosely to

equate with a territory representative, each of which is to be rewarded

by a percentage of profits. Again, in my view, the evidence points to

the fact that this view of the relationship was more in keeping with the

facts than the view expressed in later documentation in the third wave

of agreements."

17. The "third wave" of agreements was in a different form. The Deputy President found that these agreements came into existence during the course of negotiations between the applicant and the respondent in respect of the applicant's claim of reimbursement under the Export Market Development Grants Act. He said:

"It is clear, and Mr Williams freely admitted, that that these

agreements were entered into in order to support the basis of the

applicant's claims. They were also entered into long after the relevant

grant years. However, Mr Williams insisted that the agreements

reflected and recorded prior arrangements between the parties."

18. The Deputy President illustrated the form of these agreements by quoting the first four clauses of the agreement between the applicant and the Union Transport Corporation in the United States:

"1. The AGENT shall:

Act for the PRINCIPAL in all matters relating to the receiving,

packing, transfer and airfreight of cargo from various consignors

within the United States of America to various receivers in

Australia and in particular shall;

a) Provide office and cargo terminal locations in the United

States of America as required by the PRINCIPAL to offer

competitive services to consignors throughout the United

States of America.

b) Prepare on behalf of the PRINCIPAL and at its direction all

airwaybills of shipments to Australia, for consignors to

whom the PRINCIPAL has undertaken to provide airfreight

forwarding services.

c) Undertake on behalf of the PRINCIPAL any subcontract

arrangements with airlines or other carriers for the

movement of shipments to Australia.

d) Send to the PRINCIPAL such documents as are required to land

the goods in Australia in a timely and orderly manner.

e) Assist the PRINCIPAL in sales and promotional activities as

required by the PRINCIPAL including communications by

telephone, telex or mail with prospective consignors.

f) Undertake to confirm contracts for shipment of goods to

Australia with various consignors on behalf of the PRINCIPAL

at rates advised by the PRINCIPAL.

g) Enter into a mutually agreeable Service Contract for the

supply of office, secretarial, telephone, telex and other

services as required by the PRINCIPAL to promote its

business.

h) Arrange for all rates proposed by the PRINCIPAL and accepted

by the various consignors to be entered into the records for

charging and accounting purposes.

i) Where freight charges are prepaid to receive such freight

charges from consignors on behalf of the PRINCIPAL and

account to the PRINCIPAL for all such receipts promptly and

fully.

j) Make available his books of account relating to all

shipments to Australia for inspection by the PRINCIPAL.

2. The PRINCIPAL shall:

a) Provide to the AGENT the know how and systems together with

marketing effort in developing cargo from various consignors

in the United States of America.

b) Provide the AGENT with such instructions as are necessary to

allow the AGENT to properly execute on behalf of the

PRINCIPAL such freight forwarding services as the PRINCIPAL

requires.

c) Use its best endeavours to maximise the utilisation of the

PRINCIPAL'S specialist freight forwarding services by:

i) Appointing and maintaining Sales Promotion

Representatives in the United States of

America to promote its services to

consignors in the United States of

America.

ii) Undertaking advertising and other

promotional activities of its services in

the United States of America.

3. It is mutually agreed that the PRINCIPAL shall consider the AGENT

as independent contractor and that the PRINCIPAL and the AGENT

shall indemnify each other against loss arising from neglect or

default of their respective employees or any other reason to a

maximum of A$5,000 and shall maintain insurance policies covering

public liability and property damage which might occur in the

course of moving shipments from the United States of America and

Australia.

4. This Agreement records the terms of the oral agreement which as

(sic) existed between the PRINCIPAL and AGENT since February, 1984

and is deemed to have commenced on that date."

19. The Deputy President pointed out that the rate of commission is not stipulated in the form of agreement. It was to be agreed between the parties from time to time. He referred to evidence from Mr Williams:

"that in 95% of the cases with all associated companies, including the

United States company, the rate of commission was fixed at 50% of the

profit, being 50 per cent of the difference between the amount billed to

the exporter and the amount charged by the airline or shipping company."

20. The Deputy President turned to the evidence of actual practice. He noted that the applicant sought to encourage overseas exporters to deal with its appointed overseas representatives by requesting its Australian importer client to sign documents called "routing orders". A sample routing order was set out in the reasons for decision. This sample was addressed to the overseas exporter. The document included the following:

"After careful consideration, it has been decided to appoint Fliway-AFA

International Pty. Ltd as our freight forwarding agent for Australia.

To assist us, would you kindly arrange for all further airfreight orders

to be shipped to us by:

UNION AIR TRANSPORT

The above are Fliway-AFA's agent in your country.

The representative of the above named agent will call on you giving

their best service at all times."

21. The Deputy President noted the reference in this document to Union Air Transport being the applicant's agent in the United Kingdom. He commented:

"Earlier documents took a slightly different form and referred to the

overseas freight forwarder as an associate company of the applicant.

... In evidence, Mr Williams said that the earlier routing orders were

prepared with his approval in 1988 and were in standard use by the

company. At the time, the applicant was a small company competing with

multi-nationals and it appeared to him, conducive to gaining market

strength if the overseas companies with which he dealt could be

described as associated companies. He said that as his company grew,

the need to refer to his agents in this way diminished and it was more

appropriate to refer to them simply as agents."

22. The Deputy President explained that it was the applicant's contention, before him, "that when a routing order was accepted by an exporter, that exporter thereupon became a client of the applicant and entered into contractual relations with it through the agency with the overseas freight forwarder". He referred to evidence from Mr Williams that on occasions, the applicant rendered direct assistance to the exporter.

23. The Deputy President turned to the matter of payment:

"The overseas freight forwarder collects the cost of services (including

freight to be disbursed) directly from its local exporter and remits to

the applicant its agreed share of profit. All accounting is done at the

point of origin of the goods. Where freight is paid collect, the

applicant would bill the importer and remit the moneys to the overseas

freight forwarder at the point of origin of the goods for the purpose of

accounting. Only then would the applicant's share of profit be remitted

back."

24. The Deputy President noted two cases where goods had been lost or damaged in transit. But he found that the circumstances revealed by the evidence were not indicative of the nature of the relationship between the applicant and overseas freight forwarders. This view is not criticised.

25. Paragraph 34 of the Deputy President's reasons lies at the heart of the applicant's argument in this appeal. The paragraph reads:

"34. All of the overseas freight forwarders have established

businesses, which were in existence long before any arrangements

were entered into with the applicant. Throughout the

documentation, the status of the overseas freight forwarders as

independent contractors is emphasised. There is no evidence of

any of the overseas freight forwarders having entered into any

obligation binding upon the applicant as principal. There is no

evidence of a fiduciary relationship between them, which one would

expect to see in any agency relationship. The relationship

between the overseas freight forwarder and the exporter is

documented as if they are the exclusive parties to the

relationship. There is no evidence that the exporters regard

themselves as in any way to be bound to the applicant, except

through their acquiescence in the routing orders. These orders,

in my view, do no more than request the exporter to deal directly

with the overseas freight forwarder. Compliance with that

request, it seems to me, does nothing to establish legal relations

between the exporter and the applicant. Some attempt was made to

fill this evidentiary gap by letters from Australian importers and

selected exporters. Examples may be seen at pages 346 and 352 of

the s.37 documents. These letters were written in April 1991 well

after the present claims arose. Although not in identical form,

they were clearly written at the request of the applicant for use

in the present proceedings. Consequently, they are of extremely

limited use."

26. I will return to para.34 in a moment. I first note the Deputy President's reaction to the applicant's reliance upon the form of the third wave of agreements. He referred to the applicant's submission that, although the agreements were made after the relevant periods and in the context of negotiations between the applicant and the respondent, they should be taken into account because they recorded arrangements in existence at the relevant years. The Deputy President commented:

"There is no evidence that the third wave agreements are shams.

Nevertheless it seems to me that they do not accurately reflect the

factual nature of the relationship between the applicant and the

overseas freight forwarders in the relevant grant years. This is not to

suggest any impropriety against the applicant. It is quite possible

that, in all honesty, the applicant misconceived the situation."

27. The Deputy President turned to other matters, in a paragraph which also attracted criticism:

"36. In the operation of the overwhelming majority of arrangements with

the overseas freight forwarders, there is an agreement to share

profits equally. This is not the extent of reward one would

normally expect to find a principal paying to his agent. ... To

agree to pay half the profit on every transaction is, however, not

only to agree to pay an inappropriately high amount. It also

tends to give character to the arrangement. The best way the

arrangements can be characterised, in my view, is that of

co-venturers. This is certainly reflected in the first agreement

with Union. The spirit of the arrangement is that each of the

applicant and the overseas freight forwarders mutually assist each

other to acquire new clients and to build up their respective

businesses and to use the facilities that each offers the other

for that purpose. In doing so, each retains its status as

independent contractor but each shares in the profit of any

particular transaction brought about through mutual endeavours.

In my view, none of the overseas freight forwarders can properly

be regarded as an agent of the applicant in the relevant grant

years."

28. The Deputy President concluded by saying that:

"the applicant does not satisfy the test required by the words 'by that

person' in subs.4(1)(e) of the Act, and accordingly is not entitled to a

grant in respect of eligible expenditure for the supply of services

outside Australia."

29. The applicant recognises that its right of appeal to this Court from the Tribunal's decision is limited to appeal on a question of law: see s.44 of the Administrative Appeals Tribunal Act 1975. But its counsel argues that the Deputy President fell into error of law in his analysis of the factors leading him to reject the applicant's contention that the overseas freight forwarders were its agents; so that the supply of services by those companies constituted a supply by the applicant itself, within s.4(1)(e) of the Exports Market Development Grants Act. He says that none of the findings of fact set out in para.34 of the Tribunal's decision are inconsistent with a relationship of agency between the applicant and the overseas freight forwarder. For example, counsel says, many persons who are agents, in the strictest sense of that term, carry on an established business in their own right; they are often independent contractors. Counsel points out that one would not expect to see evidence of a fiduciary relationship between a principal and agent; the fiduciary relationship arises as a matter of law because of the mutual obligations into which the parties have entered. It is common, says counsel, for a relationship between principal and agent to be documented as if they were the only parties involved in the relationship. Turning to para.36, counsel argues that it is not inconsistent with a relationship of principal and agent for the parties to share equally the profits of a transaction; whether a one half share is an inappropriately high amount depends upon the circumstances of the case rather than the nature of the relationship.

30. I agree with all these comments of counsel. If it appeared to me that the Deputy President had rejected the claim of agency because, for example, he considered this inconsistent with the overseas freight forwarder being an independent contractor with its own established business, I would agree that he had fallen into an error of law. But I do not think that, on a fair reading of paras.34 and 36, it should be concluded that Mr McMahon regarded any of these matters as decisive. I think that, in evaluating the nature of the relationship, he was simply listing features of that relationship and characteristics of the overseas freight forwarders. Some matters were obviously more significant than others. For example, it seems to me that the third matter mentioned in para.34, the absence of evidence that any of the overseas freight forwarders has entered into an obligation binding the applicant as principal, was a matter of cardinal importance. It was important, also, that neither the "first wave" or "second wave" form of agreement authorised the overseas freight forwarder to bind the applicant. But the Deputy President did not assign importance to the factors he noted. He merely mentioned these matters on the way to a conclusion, in para.36, about the "character of the arrangement". This was the critical question for his decision. He answered it by saying that the best way to characterise the arrangements was "that of co-venturers". In the remainder of para.36 he gave reasons for this characterisation. These reasons were open to him on the evidence.

31. Reference should be made to two specific points put by counsel for the applicant in connection with paras.34 and 36. First, counsel argues that the third matter, the absence of evidence that an overseas freight forwarder has entered into an obligation binding the applicant as principal, overlooks the doctrine of undisclosed principal; that is, that a person may contract as agent for another even though this fact does not appear on the face of the contract. There is no doubt about that principle. But the evidence in this case was not confined to contracts between overseas freight forwarders and overseas clients. It included a considerable volume of material passing between the applicant and the overseas freight forwarders. There is no hint in that material of an authority for the overseas freight forwarders to bind the applicant. On the contrary, the whole tenor of the documentation is that the applicant and the overseas freight forwarders will each do their best to direct business in the other's country to the other party; their reward being a 50% share of the profit earned on any transaction which results.

32. This brings me to counsel's second point. He says that, if there is a share of profits, there must be a partnership relationship between the applicant and each of its overseas representatives; and, as a partner is the agent of the firm and each other partner, a contract entered into by the overseas freight forwarder is a contract entered into on behalf of the applicant.

33. Counsel for the respondent protested that it was never the applicant's case before the Tribunal that there was a partnership between the applicant and each of the overseas freight forwarders. Judging by Mr McMahon's reasons for decision, this seems to be correct. Certainly, there is no finding of partnership. Although profit sharing is a normal incident of partnership, profit sharing does not necessarily establish a partnership relationship. People often agree to share the profit of a transaction - for example, by payment of a commission - without intending to establish a relationship of partnership. The creation of a partnership relationship depends upon the intention of the parties. In the present case there is no evidence of such an intention; indeed, each of the three forms of agreement suggests to the contrary.

34. It is true that the Deputy President described the relevant relationship as that of "co-venturers". It is also true that, on occasion, a joint venture may constitute a partnership; see United Dominions Corporation Limited v Brian Pty Limited [1985] HCA 49; (1985) 157 CLR 1. But the term "co-venturers" is a loose one: see UDC at 10. It does not necessarily mean that there is a partnership relationship. In the present case, the Deputy President explained what he meant. There was no notion of sharing losses. The parties merely agreed to "assist each other to acquire new clients and to build up their respective businesses and to use the facilities" of each other for this purpose.

35. It seems to me that the Tribunal's finding that there was no evidence that any of the overseas freight forwarders entered into an obligation binding the applicant as principal meant that there was no evidence of the applicant having supplied eligible services outside Australia. It will be recalled that s.3(4) provides that, for the purposes of the Act, a person shall be taken to supply eligible services outside Australia only if the Commission - on review, the Tribunal - is satisfied that the services were supplied pursuant to a contract for the supply of services between that person and a person outside Australia. The applicant did not claim that it had itself made any contracts for the supply of services to persons outside Australia; its case was that this was done on its behalf by its overseas "agents". But once that case was negatived, by the finding that there was no evidence of any contract binding the applicant having been entered into by any of the "agents", the requirement of s.3(4) remained unsatisfied.

36. For the sake of completeness, I should mention that, during the course of his submissions, counsel for the applicant took me to the evidence concerning a number of importations into Australia. It is clear that, from time to time, the applicant corresponded with one of the overseas freight forwarders in connection with the arrangements concerning a particular consignment. On occasions it conveyed, sometimes in forceful terms, the substance of its Australian client's wishes. This is not surprising. One would expect a need to co-ordinate arrangements for movement of the goods. But what is interesting, in the present context, is that nowhere in this correspondence is there a claim that the overseas exporter is a client of the applicant. In each case, the applicant's client is the Australian importer. The routing orders are not a method of persuading the overseas exporter to retain the services of the applicant; but rather those of the overseas freight forwarder, although, indirectly, this retainer benefits the applicant. In short, counsel's excursion through the evidence supports the Deputy President's finding that there is no evidence of a contract between the applicant and any overseas exporter.

37. I not only think that the applicant has failed to demonstrate legal error by the Deputy President. As it seems to me, on the factual findings he made, the Deputy President was bound, as a matter of law, to confirm the original decision. The present appeal should be dismissed with costs.

Market Development Grants Act 1974

Appeals Tribunal Act 1975

Re Fliway-Afa International Pty Ltd v Australian Trade Commission [1992] FCA 597;

At a glance

Court

Decision date

Before

Source

Judgment (65 paragraphs)

Re Fliway-Afa International Pty Ltd v Australian Trade Commission [1992] FCA 597; (1992) 39 FCR 446 (4 December 1992)

Parties

Legislation Cited (2)

Cases Cited (4)