Austrade granted leave to appeal court decision

A long-running dispute between a Sydney-based jewellery firm and government trade body Austrade is headed back to the courts.

The argument centres around a decision by Austrade to turn down Isaac Jewellery's application for $120,000 of funding administered through the federal government's Export Market Development Grant (EMDG) scheme.

A hearing at the Federal Court in Sydney was told that several years ago brothers Isaac and Aram Atakliyan set up a company called ABJ Australia to design, manufacture and wholesale jewellery. During its 25 years of operation, the business exported substantial amounts of jewellery and received seven EMDG grants.

In 2004 the brothers had a falling out and shortly after both formed new companies engaged in jewellery manufacturing with stock and equipment from ABJ being split equally between the pair. Isaac Jewellery purchased a property in Sydney with the purchase price partly met using a portion of the proceeds of the ABJ sale.

In July 2007 Isaac Jewellery lodged an application form with Austrade for a grant under the EMDG scheme in respect of $120,114 claimed expenditure incurred during the 2006/07 financial year.

Austrade rejected the claim on the grounds that Isaac Jewellery was essentially a continuation of the ABJ business. This meant that under the guidelines of the EMDG - which in part stipulates that any grant paid to the previous owner is to be treated as having been paid to the new owner - the company had therefore exhausted the maximum entitlement of grants.

Isaac Jewellery then sought a review by Austrade of its decision with the review determining there were "too many similarities not to warrant the application of Section 94".

Isaac Atakliyan then sought a judicial review of the decision with the Administrative Appeals Tribunal finding in his favour. It ruled that under the guidelines of the EMDG Isaac Jewellery should have been considered as a new business entity and not just a continuation of the ABJ business.

The case then made its way to the Federal Court where Austrade argued the tribunal made two errors of law in reaching its decision.

In a written ruling released earlier this month, Justice J Cowdroy found the tribunal had "misconstrued" and "misapplied" the guidelines governing the scheme.

Justice Cowdroy ordered the judgement of the Administrative Appeals Tribunal be set aside and the Austrade case reheard. Both parties will return to the courts on March 4 to determine costs.