ADMINISTRATIVE APPEALS TRIBUNAL - GENERAL ADMINISTRATIVE DIVISION

[2000] AATA 332

B J McMahon, Deputy President

27-31 March; 3-5, 28 April 2000 - Sydney

B J McMahon, Deputy President.    This is an application brought pursuant to s 39T of the Industry Research and Development Act 1986 to review a decision made under s 39F. Section 39T(4) provides that the hearing of a proceeding before this tribunal relating to a reviewable decision must take place in private. These reasons are therefore cast in such a way as to preserve the confidential identity of the applicant. It is, however, necessary in order to explain the decision to give some facts relating to the applicant's business and activities.

  2  The applicant was incorporated on 27 November 1995 as a public company limited by guarantee. Its objects are stated to be the carrying out of scientific research and development in relation to herbal medicines and plant extracts with emphasis on tea tree oil. This is an oil distilled from the leaves of the melaleuca alternifolia, which grows in large numbers in various parts of Australia but particularly around the north coast of New South Wales.

  3  On 25 September 1996, it lodged an application for registration pursuant to s 39F as a Registered Research Agency (RRA) in respect of the following classes of activity:

   

agriculture - forestry

 

agriculture - plant production and breeding

 

biotechnology - genetic engineering

 

pharmaceutical products and technology

 

chemical analysis

 

chemicals - organic

 

cosmetic products

 

environmental management

 

distillation process and technology

  4  The respondent board established by s 6 has delegated a number of its powers to its Tax Concession Committee, including the power to register research agencies. That committee undertook extensive enquiries upon receipt of the application. A decision was not made until some 15 months later on 17 December 1997. The decision was not conveyed until 9 January 1998. The respondent refused the application on the grounds appearing in that letter. The present application to this tribunal is a re-exercise of the respondent's administrative powers. This tribunal is therefore not restricted in its consideration of the application to the grounds for rejection stated by the Board.

  5  Probably the most important matter to be decided is the relevant date for reconsidering the application. The respondent contended that the appropriate date was 25 September 1996, the date of receipt of the original application. The applicant contended that the application should be examined in the light of the facts established as at the date of hearing. Neither party seriously pursued the third choice, namely that the application should be reconsidered as at the date of the Board's decision. In order to determine the relevant date, it is necessary to examine the statutory provisions.

  6  Registration of research agencies is provided for in s 39F which is in the following terms:

   

39F(1) Any body of persons, whether corporate or unincorporate, may make an application to the Board in writing, in accordance with a form approved by the Board, for registration as an Australian research agency for the purpose of performing a particular class of Australian research and development activities on behalf of registered eligible companies.

 

(2) The Board shall, in consultation with the Commission, as soon as practicable (and, in any event, within 90 days) after the commencement of this Part, formulate in writing criteria to be met by bodies wishing to be registered under this section and shall cause the criteria so formulated to be made available to any person upon request, without charge, and to be published in the Gazette and in such other manner as the Board considers appropriate.

 

(3) Where a body purported before the commencement of this Part to make an application to the Board for registration as an Australian research agency, the application shall be taken to have been as valid as it would have been if this section has [sic] been in force when the application was made.

 

(4) Subject to subsection (9), where an application has been made in accordance with subsection (1) and the Board is satisfied that the applicant meets the criteria, the Board shall register the applicant as an Australian research agency in respect of such class of Australian research and development activities as the Board considers the applicant is qualified to perform and shall give to the applicant notice in writing of the result of the application.

 

(5) The registration of an Australian research agency shall be taken to have had effect on and from:

 (a)  if the body concerned was, on 30 June 1988, an approved Australian research institute - 1 July 1988; or
 (b)  otherwise - the date on which the application for registration was received by the Board.

 

(6) Subject to subsections (7) and (9), the Board may, on application made by a registered Australian research agency in writing, in accordance with a form approved by the Board, vary the class of Australian research and development activities in respect of which the agency is registered and shall give to the agency notice in writing of the result of the application.

 

(7) The Board shall not vary the class of Australian research and development activities in respect of which an Australian research agency is registered so as to include additional activities unless the Board is satisfied that the agency is qualified to perform those additional activities.

 

(8) The date of effect of such a variation is the date on which the variation is made to the register of the Australian research agencies.

 

(9) Where the Board considers that it will be necessary for the purpose of dealing with an application under this section to make inquiries as to the applicant's qualifications to perform particular Australian research and development activities, the Board may, before dealing with the application, by notice in writing given to the applicant, require the applicant to pay such amount (not exceeding $1,000 or such higher amount as is prescribed) as the Board determines in or towards meeting the cost of the inquiries.

 

(10) If the Board:

 (a)  refuses an application to register a body as an Australian research agency; or
 (b)  refuses an application to register a body as an Australian research agency in respect of, or to vary the registration of a body that is a registered Australian research agency so as to include, particular Australian research and development activities;
the notice to the applicant stating the result of the application shall also state the reasons for the refusal.

 

(10A) The Board may, in consultation with the Commissioner at any time and whether or not within 90 days after the commencement of this Part, by writing, repeal, replace or amend criteria made under subsection (2).

 

(11) An instrument formulating criteria under subsection (2), or repealing, replacing or amending such criteria, is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 (Cth).

  7  The general rule applied in merits review is that account is taken of facts occurring after the date of the reviewable decision. The administrative decision making process is, as Davies J has said on a number of occasions, "a continuum" (Jebb v Repatriation Commission (1988) 80 ALR 329 at 333; 8 AAR 285 at 289 and Freeman v Secretary, Department of Social Security (1988) 87 ALR 506 at 509; 19 FCR 342 at 345; 15 ALD 671 at 674). It is now established beyond question that this tribunal may take account of material other than that which was before the decision-maker. However, this principle does not necessarily give the result that in each case the tribunal must decide the issue as at the date of hearing. It will be guided in each case by the exigencies of the relevant statute. The cases were collected by Hill J in Comptroller-General of Customs v Akai Pty Limited (1994) 50 FCR 511, where his Honour observed at 521:

   

The Tribunal is an administrative tribunal and, as has often been said, its function is merely to do over again what the original decision-maker did, working out, as a further step in administration, what it considers the decision ought to be: cf Mobil Oil Australia Pty Ltd v Commissioner of Taxation (Cth) (1963) 113 CLR 475 at 502 per Kitto J; Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 413-415 per Bowen CJ and Deane J, and more recently see Liedig v Commissioner of Taxation (1994) 50 FCR 461. In exercising its role, in what Davies J in Jebb v Repatriation Commission (1988) 8 AAR 285 at 288-289 referred to as "part of" an administrative "continuum", the Tribunal, within the ambit of the jurisdiction conferred upon it as a review authority, decides the matter by reference to the evidence before it and not the evidence before the decision-maker, taking into account events that may have occurred to the date of decision: cf Jebb (at 289-290); Lucas v Repatriation Commission (1986) 69 ALR 415 at 421; Ward v Nicholls (1988) 20 FCR 18 at 22, per Wilcox, J.

 

It is true that the review to be conducted by the Tribunal is a review of a specific decision and if that decision has to be made by reference to a particular point of time the Tribunal will be limited to deciding the question by reference to that point of time. That was the case in Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225, but ordinarily in such a case the Tribunal will not be limited to the evidence before the decision-maker although obliged to address the questions the decision-maker addressed.

  8  Does s 39F(5) fix a point of time with reference to which both the initial and the review decisions must be made? It was the applicant's submission that in the absence of s 39F(5) there would be no question but that the decision of the tribunal would be a re-exercise of the decision making power in accordance with facts existing at the time of the hearing before the tribunal. However, s 39F(5) is in the statute. It is necessary to construe it and to determine whether its effect continues after the original decision has been made. This is an important point for the applicant. On the facts put before me, the applicant would have a much better chance of success today than it would have had at 25 September 1996. Since then, the applicant has acquired larger and better equipped facilities, more skilled staff and more clients, enabling it to undertake research in fields other than those related to tea tree oil. I would not, of course, pre-judge the result of any application for registration if it were made today. It is sufficient to note for present purposes that the relevant facts were quite different when this application was first made to the Board.

  9  The applicant's submission was that the section operates in futuro. Subsection 39F(1), it was said, contemplates the performance of research and development activities by the applicant at some future time. The power to vary and the mode of exercising that power set out in ss 39F(6) and 39F(7) (it was said) supported this submission.

  10  I have difficulty in accepting this submission on a plain reading of the subsection in its context. It seems to me that s 39F(5) was intended to confer benefits on applicants where the investigation of their claims (as in this case) was lengthy. It was intended to ensure that whatever rights flowed from registration were not to be denied to an applicant until the final decision of the Board. If the applicant was ultimately successful, then it was deemed to have the benefits of registration retrospectively to the date on which the application was received by the Board. To my mind this makes that date the relevant date for considering the present application, as it was the date on which the Board would have continued to focus over the 15 months of its investigation. As the Board was entitled to take account of facts between September 1996 and December 1997 to establish whether eligibility had been demonstrated as at the earlier date, so also this tribunal is entitled to take into account subsequent facts, but only for the same reason, namely to consider whether eligibility was established as at 25 September 1996.

  11  The applicant sought to show that this approach to construction might have "a number of unattractive consequences". It suggested that an applicant confronted with a lengthy investigation process could continuously file applications during the course of that process as more equipment had been acquired, further employees retained or further clients were identified. As the applicant's eligibility position improved from month to month, it could file a succession of applications. It was suggested that it could not have been the legislative policy to encourage multiple overlapping applications.

  12  Whilst I recognise the practical difficulties that could emerge from such a procedure, the argument does not seem to me to go to the proper construction to be put on the subsection according to its own terms. There is just as much substance in the respondent's submission that the subsection may have been designed to avoid the very situation to which the applicant points.

  13  It may well have been designed to discourage a mere shell of an applicant lodging an application and then building up its eligibility qualifications over the investigation period until such time as it could claim total compliance with the criteria. Little assistance is to be derived from s 3 which sets out the object of the Industry Research and Development Act 1986 (Cth) as follows:

   

The object of this Act is to promote the development, and improve the efficiency and international competitiveness, of Australian industry by encouraging research and development activities.

A better guide to the legislative scheme might be found in s 39G, dealing with cancellation of registration. This section appears to provide against the contingency of qualifications falling away after the registration has been achieved. The fact that a mechanism for cancellation is provided may well indicate that criteria may be met obliging the Board to register an applicant but as circumstances change in an applicant's activities, the question of cancellation of registration is to be considered. Reference is made to this possibility in para 20 of the guidelines to which I will later turn.

  14  The interpretation which I have suggested seems to me to be consistent with the wording of the subsection and the context of the other subsections. The applicant suggested that there was a residual discretion to be found in s 39G(4). If the applicant meets the criteria, the Board is obliged to register it as an RRA. It was submitted that in the absence of compliance with the criteria, the Board still had a discretion (although not an obligation) to grant registration. In my view, this is not the meaning intended by s 39F(4), which gives an entitlement to registration only when the applicant meets the criteria. That entitlement is to be examined as at the date upon which the claim is made.

  15  Subsection 39F(2) requires the Board, in consultation with the Commissioner for Taxation, to formulate criteria to be met by those wishing to be registered under the section. A document headed "Industry Research and Development Board Guideline - Registered Research Agencies" was published in the Commonwealth Gazette on 26 April 1995. Because of some apparent doubt, both the guidelines and the criteria were validated by the Industry Research and Development Amendment Act 1995 (Cth). That Act refers to a distinction between guidelines and criteria, although only criteria are to be prescribed pursuant to s 39F(2). It is doubtful whether the guidelines, which are included in the same document as the criteria, have the status of delegated legislation by virtue of the amending Act.

  16  Subsection 39F(11) provides that an instrument formulating criteria is a disallowable instrument. The document that was published deals with both criteria and guidelines. It also deals with explanatory matter clearly intended for the guidance of the public. The whole document does not resemble instruments that are commonly promulgated as disallowable instruments. The general informative part of the document is more like a pamphlet. Subsection 39F(2) confers both a duty and a power on the Board to formulate criteria and publish the criteria in the Gazette. The power and the duty to publish in the Gazette extends only to the criteria. Publication of other material in the Gazette, including the general information and other guidance apart from the criteria, goes outside the duty and the power granted by s 39F(2). These parts of the document, in my view, do not constitute a disallowable instrument and have no greater legal force or effect by reason only of their publication in the Gazette. In my view, the only parts of the document having the force of law binding upon me are to be found in para 14 which is in the following terms:

   

The Board, pursuant to subsection 39F(2) of the Industry Research and Development Act 1986 (Cth) has formulated the following criteria to be met by bodies wishing to be registered as research agencies under section 39F:

 

Employment criterion

 

For an organisation to be considered an RRA:

 •  it must employ a minimum of one full-time research person and another four full-time, or full-time equivalent, research staff;
 •  the full-time researcher must have tertiary qualifications to university degree level in science or technology; and
 •  of the balance of the minimum of four full-time or four full-time equivalent staff, each staff member must have either:
 -  tertiary qualifications to university degree level in science or technology; or
 -  no less than five years of referable research experience in a particular scientific or technological field.

 

Facilities criterion

 

Organisations seeking RRA status must have research and development facilities in Australia:

 •  which shall be sufficient for the research staff to undertake their work; and
 •  which shall be appropriate to the field or fields of research in which the RRA seeks to be registered.

 

Pricing structure criterion

 •  The fee and charges structure of the applicant must be on normal commercial terms.

 

Multiple client criterion

 •  An organisation seeking RRA status must hold itself available to undertake work on behalf of companies which are not related to the organisation as determined for the purposes of the Corporations Law.

  17  Paragraph 17 is expressed to deal with other considerations in these terms:

   

Other Considerations

 

In addition to the criteria, the Board will consider the following matters when assessing an application for RRA status:

 

Competence

 

The competence of the applicant to manage and perform R&D will be assessed against:

 •  the administrative arrangements to plan and overseas [sic] the performance of R&D;
 •  any achievements which are relevant to the performance of the R&D including that which yielded commercial results;
 •  the annual value of R&D undertaken; and
 •  the principle [sic] source of income of the organisation:

 

Independence

 

The applicant will be required to demonstrate that:

 •  there are no grounds for a conflict of interest between itself and its clients;
 •  it will act in the best interests of its clients;
 •  clients will have control over the R&D undertaken; and
 •  it can maintain the confidentiality of its R&D on behalf of clients and the security of information obtained from clients.

 

Pricing Policy

 •  The applicant must satisfy the Board that, where its pricing policy is not based on normal commercial terms, as may be the case with a public sector entity, the price involves neither a use of government resources to subsidise the price nor is it intended as a means of unfairly exploiting the incentive.

  18  It was the respondent's submission that the last subparagraph of para 17 dealing with pricing policy, being related to the third subparagraph of para 14 dealing with pricing structure criterion and using a phrase (normal commercial terms) appearing in both must be taken to be part of the criteria. In my view, the language is not capable of bearing that meaning. The reference to pricing policy appears to be deliberately included in the paragraph headed "Other Considerations". It also seems to be directed to circumstances appropriate to a public sector entity or an organisation resembling such a body. In that case, it appears to be directed to a possible misuse of public funds to the detriment of research bodies in the private sector. I have concluded that the subparagraph in para 17 has nothing to do with the similarly named subparagraph in para 14.

  19  I am therefore to consider whether the applicant complied with the 4 prescribed criteria as at 25 September 1996. The first criterion is referred to as the employment criterion. The applicant applied for registration in respect of nine classes of activities. Because of circumstances to which reference will later be made, it could be said to be engaged in activities on behalf of syndicate members only in 4 of those fields, namely chemicals organic, pharmaceutical products and technology, chemicals analysis and cosmetic products. Three of the persons employed at the relevant date were employed in forestry or agriculture and related activities. It was the respondent's submission that these should be disregarded in considering whether the employment criterion had been met. In my view, this is putting a gloss on the criterion. Research experience in a particular scientific or technological field is expressed to be essential only as an alternative to tertiary qualifications. There were 4 scientists employed by the applicant on the relevant date. Their managing director, also a qualified scientist, was active in the affairs of the applicant, even if not technically employed. A highly qualified director had been engaged by an agreement dated 15 July 1996. He did not take up his duties until October 1996 but between the date of his contract and the date of assuming full-time duties, he was engaged in procuring equipment for the applicant. All 6 of these people had tertiary qualifications to university degree level in science or technology. Notwithstanding the reference in s 39F(4) to the activities which the Board considers the applicant is qualified to perform, the fact is that the employees are sufficient to meet the prescribed criteria, which are not qualified in any way by reference to proposed activities. It seems to me, therefore, that the applicant met the employment criterion at the relevant date.

  20  I turn now to the facilities criterion. An organisation seeking RRA status must have research and development facilities sufficient for the research staff to undertake their work and appropriate to the fields of research in which it seeks to be registered. The applicant did not have any of the highly specialised equipment, which it subsequently acquired. Nevertheless, it did have some equipment, which was housed, in a temporary laboratory in the campus of a provincial university at the relevant date. As it happened, the equipment was sufficient for the research staff to undertake their work because most of the research was contracted out. The work of the staff was to analyse and process the result of outsourced research. I consider that at the relevant date, the applicant therefore complied with the facilities criterion.

  21  It did not however, in my view, comply with either the pricing structure criterion or the multiple client criterion. Failure to comply with any one of the criteria is fatal to the application as they are clearly cumulative requirements. The failure of the applicant stems from the way in which it was financed.

  22  Three investment schemes were launched pursuant to prospectuses dated respectively 5 December 1995, 8 May 1996 and 3 June 1996. Monies received ultimately from these schemes constituted the applicant's financial resources and set out in the prospectuses were the conditions and limitations governing the way in which these resources were to be dealt with. Each of the schemes was structured essentially in the same manner. In one plan individuals, and in 2 other plans, companies were invited to participate in the business of research for and development for potential manufacture and sale of specified tea tree oil based products. The products in the first personal plan were intended to be in the fields of acne treatment, hospital and antiseptic products and oral hygiene. These were the same products intended to be developed in the first company plan. The second company plan aimed at the personal health care market in skincare, bath and shower products, deodorants and haircare. It was intended that scientific research would be carried out into certain areas to develop products in these fields incorporating tea tree oil. The investors' intentions were realised by entering into an agreement with a management company. That company was given full authority to conduct the research business on behalf of the participants. It did this by entering into a second agreement with each participant and with the applicant as the researcher and a trustee company.

  23  It was not necessary for each participant to provide cash with its application as this amount was available on loan from a related loan company. The applicant and the management company had five directors in common. All the directors of the loan company were also 3 of these 5 persons. A large number of subscriptions, or participation's, was accepted from many persons or companies which admittedly were not related one to the other or to the applicant. It was therefore submitted on the applicant's behalf that it met the multiple client criterion. In my view, this submission cannot succeed. At the relevant date the applicant was undertaking work only upon instructions from the management company with which it had a common directorship. The fact that the management company was acting on behalf of individual participants does not, in my view, constitute a satisfaction of the criterion, notwithstanding the fact that individual participants were parties to the agreements. The applicant undertook work, at the relevant date, only on behalf of a company (the management company) which it controlled through a common directorship in accordance with the tests set out in s 50AA of the Corporations Law. It is quite possible, in the application of s 46 of that Law, that the management company could be deemed to be a subsidiary of the applicant by virtue of the applicant's degree of control over it. In either event, the 2 companies must be regarded as related for the purposes of Chapter 1, Div 6 of the Corporations Law.

  24  There were terms of the agreements which ensured that, for all practical purposes, the only party entitled to commission research and to obtain the benefits of it was the management company in its own right. In doing so, it could not be said that the relationship between the management company and the applicant was based on normal commercial terms. As there was only one virtual client of the applicant, the financial relationship between them determined the fee and charges structure of the applicant.

  25  Loan agreements were available to all participants for the whole of their investment. In the case of a typical loan of $50,000 provided by the loan company, the following conditions applied:

 •  The participant was required to pay an application fee of $750.
 •  It was required to repay $12,500 of the principal sum advanced by 12 monthly instalments of $1042. It was also required to pay interest for the first year of the loan amounting to $7500. These were the only cash requirements which a participant had to meet.
 •  The participant was not required to make any further repayments of the principal sum lent to it, or to pay any interest, other than from profits resulting from the exploitation of the research and development.
 •  The management company retained its control, its individual identity and its domination of the arrangements through a provision that the entire loan and all outstanding interest were liable to be paid to the loan company if the participants, through a meeting (the mechanics of which were set out in the agreement) voted to replace the manager.
 •  Of the $50,000 paid by the loan company to the manager at the direction of the participant, $5000 was to go to the manager as a management fee and the balance to the applicant as pre-payment of the consideration for it performing the research and development work. However, the applicant deposited this money back with the loan company on a non-recourse deposit. Thus, in the financial year ended 30 June 1996, the applicant received $76,335,784 in pre-paid research fees for work to be done for the investment schemes. The vast bulk of this was placed back on deposit with the loan company. The applicant's balance sheet at 30 June 1996 showed that it had on deposit a total sum of $70,804,752. Except for the real cash components which participants were required to find, the remainder of the movements of money between all parties could well have been effected through journal entries.
 •  The non-recourse terms meant that repayment of the deposits to the applicant was subject to the loan company recovering loans from the participants. The monies deposited by the applicant with the loan company were to be repaid only if the loan company was repaid by the participants. Consequently, there was a real and significant possibility that the money on deposit with the loan company would not become available to the applicant to be spent on research and development.

  26  These arrangements are contrary to "normal commercial terms". The fees and charges structure referred to in the pricing structure criterion do not simply refer to fees and charges, which an applicant might invoice to third parties. The criterion must relate to the way in which the financial relationship between the researcher and the client was structured. There was virtually only one client and the structure was certainly not on normal commercial terms.

  27  That phrase is not defined in the criteria document. It is, however, referred to in s 39C, which is in the following terms:

   

39C. The exploitation of a particular result of any activity shall be taken for the purposes of this Part to be an exploitation otherwise than on normal commercial terms if, in the opinion of the Board, any contract or transaction relating to that exploitation would not have been entered into, or contained the terms that would not have been contained or would have been different, if the contract or transaction had been entered into by persons dealing with each other at arm's length and from positions of comparable bargaining power.

  28  The relationship between the managing company, which commissioned the research, and the applicant, could not be said to be a relationship at arm's length. As was pointed out by an investigating accountant engaged by the respondent (whose evidence was largely unchallenged by the applicant) there is a lack of independence and a conflict of interest between the parties promoting, managing and conducting the scheme. The tax benefit obtained by the participant is the dominant reason for entering into the plans. A typical corporate participant in a plan stood to earn a net tax benefit of $30,069 for an outlay of $21,154 yielding a profit of $8915, which may be expressed as a 42.1% profit after tax on investment.

  29  Although tax benefits obtained by participants are in a sense irrelevant to the pricing structure of the applicant, it is necessary to consider them to understand why the applicant would enter into such arrangements and how it is that such arrangements cannot be regarded as being on normal commercial terms.

  30  The fact that significant funds were placed by the applicant on deposit with a commercially related entity was not disclosed in the relevant prospectuses. The fact that the funds were placed on deposit at low rates of interest and in circumstances that made it highly questionable whether the deposits would ever be recovered because of the performance of the business, are not normal commercial terms. The locking up of research and development funds on deposit dependent upon the future successful commercial exploitation of the research and development is not a normal commercial decision. It is explicable only with reference to the intentions of the participants to obtain taxation advantages. It was suggested that because arm's length participants had entered into these arrangements, they were therefore normal commercial arrangements. I reject that submission. In the first place, not all the financial transactions that were in fact carried out appear to have been contemplated in the prospectus. If a participant was unaware, for example, that monies for which it had incurred a loan obligation were to be passed on to the researcher only on condition that the researcher re-deposited those monies with the loan company, the participant may not have regarded such an arrangement as a normal commercial transaction. The proposal was not disclosed as such in the prospectus. Secondly, what might be normal for an investor seeking a taxation advantage is not necessarily normal commercial terms looked at from the point of view of the researcher, when those terms have been designed not with the commercial requirements of the researcher in mind but with the taxation benefits of the participants.

  31  The actual expenditure on research in the period to 30 June 1996 was less than .1% of the fees charged to the participants. It was restricted as a result of the arrangements with the loan company. 6.3% of fees paid were paid to the promoters and at least a further 11% of fees were paid to the management company. Of course some of this came about because large amounts of money were raised close to the end of the financial year. The fact that expenditure on research was not greater may be another pointer to the fact that this application is premature, as well as being in conflict with the prescribed criteria.

  32  In my view, the relationship between the applicant and the management company, being the fees and charges structure between the client and the researcher, were based on terms that were remote from normal commercial terms. The applicant must fail to meet the criterion on that ground alone.

  33  Accordingly, it will not be necessary to examine the application against the additional considerations set out in para 17 of the Guidelines. In particular, it will not be necessary to consider whether the use of "government resources" is "intended as a means of unfairly exploiting the incentive".

  34  For these reasons, the decision under review is affirmed.

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