Export Development Grants Board v. Thompson & Growers Co-Op Pty Ltd

(1985) 6 AAR 276

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(Judgment by: Smithers J)

Re: Export Development Grants Board
And: Geoffrey Thompson and Growers Co-Operative Company Pty Ltd

Court:

Judges:
Smithers JBeaumont J
Everett J

Subject References:
Administrative Law

Judgment date: 24 July 1985

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Judgment by:
Smithers J

I have had the advantage of reading the reasons for judgment of Beaumont J. in this matter and express my concurrence in them. I would add the following observations with reference to the respondent's claim for a grant from the Export Development Grants Board based on the contention that the expenditure of $12,215.00 paid by it to Mr. Stokes as a technical consultant for services rendered by him was expenditure incurred by way of soliciting business within the meaning of that expression where it appears in s.4(2) (a)(ii) of the Export Market Development Grants Act 1974 (the Act). The services rendered by Mr. Stokes are set forth in the statement of facts in the reasons of Beaumont J. to which I take the liberty of referring.

Expenditure by way of soliciting is expenditure incurred in and about an exercise of soliciting. In the collocation of words in sub-para. (ii) of para. (a) of sub-s.2 of s.4 of the Act the dominant notion is that of obtaining business by advertising in public or soliciting in public or private, although one would conclude that the advertising in public or soliciting in private is more in mind.

The essential feature of advertising or soliciting is communication of something thought likely to induce another to purchase goods which one wishes to sell. The dictionary meanings most apt in the context are "to entreat or petition a person for, to urge or importune, or to draw on or allure by some specious representation or argument"; see Shorter Oxford Dictionary. There is no suggestion in these meanings that soliciting involves giving assurances or making representations that action of some kind will be taken by the party soliciting to back up his entreaties. Yet it would be reasonable to attempt to induce a potential purchaser to buy one's goods by giving assurances that one intends to, or will take action such as to install new or improved machinery to give better service, or to engage in some other action which will operate as an inducement to another party to enter into the purchase that would surely be an exercise of soliciting business. And the expense of communicating such matters of inducement would be an expense of soliciting.

It appears that in the transaction under consideration in the present case, assurances were given that services such as those performed by Mr. Stokes would be provided by the respondent. It appears also that but for these assurances the relevant contract for the purchase of fruit would not have been entered into by the purchaser. The question is whether the expenditure involved in carrying out the assurances was expenditure of soliciting.

When, in the exercise of soliciting business, one gives assurances or represents that one will do any one of many possible things the prospect of which being done may induce the potential customer to do business, the performance of that which is assured or represented may or may not become a term of the contract. If it becomes a term of the contract then what was initiated as an exercise in soliciting has been converted into negotiation and then into contract. In that case the performance in accordance with the contract is not an exercise of soliciting and the expense of so performing is not an expense of soliciting. It is carrying out business obtained by soliciting.

But if what was assured or represented does not become a term of the contract and performance of it rests merely in moral obligation or commercial policy, there may yet be a relationship between that performance and the exercise of soliciting. Circumstances may exist in which performance of an assurance given to secure a contract is part of a total exercise of soliciting. Where a potential purchaser from whom business is solicited states, for instance, that he would consider doing business only if the vendor had an agent resident in his city, and the vendor, with the express and only purpose of obtaining the business, appoints the agent, informs the potential purchaser that he has done so and urges that fact as a reason for the purchaser entering into a contract to buy, it might be difficult to say that the whole exercise, including making good the assurance, was not an exercise in soliciting. In such a case expenses of appointing and maintaining the agent or some of them could properly be regarded as expenditure of soliciting.

But where what occurs is that in the course of soliciting business a trader gives an assurance, not constituting a term of any contract, to a potential purchaser that he will take some step of a kind likely to make a purchase more attractive, then, although that step is actually taken, the process of soliciting ceased when the assurance was given. To carry out the step in question was but to carry on the trader's business. This is clear when the step is taken after the hoped for contract of purchase has been entered into. If it is taken before the making of the contract, but the fact that it had been taken is not made known to the purchaser the taking of that step is also not an act of soliciting. It is but an incident in the carrying on of business in an honourable and practical way.

It may be thought that the performance of an assurance is so closely connected with the giving of the assurance, that, like it, the performance must be characterised as an act of soliciting. But the distinction between soliciting by way of giving assurances and performing what was assured would be done is akin to that between making a contractual provision and performing it. The making of the contractual promise was an inducement for the promises of the other party. The performance of the promise was quite another matter, divorced from inducement and sounding in the carrying out of obligations and business. Similarly, to perform what one has given assurance would be done is simply to carry out one's business commitments, even those commitments which are not legally binding.

In the present case the situation was that the assurance that activities such as those engaged in by Mr. Stokes at the point of loading and the point of unloading the cargo was given before the contract was made and the contract was entered into by the purchaser under the influence of that assurance. On the findings of the Tribunal from which the appeal is brought, the situation was such that a legal obligation did not arise from the giving of the assurance. Performance of that which was the subject of the assurance, namely the rendering of the services of Mr. Stokes, occurred after the contract had been made. It is clear therefore that although the giving of the assurance was an act of soliciting the business, the performance of the services rendered by Mr. Stokes was not.

Accordingly, I agree with the orders proposed by Beaumont J.