Industry R&D Board v Phai See Investments Pty Ltd [2001] FCA 532

February 28th, 2014

In the case of the Industry R&D Board v Phai See Investments Pty Ltd [2001] and Industry Research and Development Board v Mainstar One Holding Pty Ltd [2001], the federal court ruled in favour of Phai See and allowed Mainstar’s application.


  • Phai See and Mainstar applied to the IR&D Board for registration in respect of the year of income ended 30 June 1996, resulting in each application being refused.

  • Applications were made to the AAT for a review of the IR&D Board’s decisions pursuant to s 39T of the Act.

  • The AAT found that Phai See was entitled to registration in the relevant year, but that Mainstar was not.

  • The IR&D Board “appeals” to the Federal Court from AAT’s decision insofar as it concerns Phai See.

  • Mainstar also “appeals” to the Federal Court pursuant to s 44 insofar as AAT affirmed the Board’s decision not to register Mainstar.


  • The IR&D Board’s appeal against the decision of the AAT that Phai See was entitled to registration for the relevant year will be dismissed with costs, resulting in a loss for the IR&D Board.

  • Mainstar’s appeal is allowed; the decision not to register Mainstar as an eligible company under s 39J of the Industry Research and Development Act 1986 is set aside and the matter is remitted to AAT to be determined in accordance with law.

The AAT applied the correct legal test and concluded that R&D activities claimed by Phai See were directly related to the carrying on of the core activities. AAT does not explain why it rejected the case which was articulated by Mainstar. A failure to give adequate reasons is an error of law, and the matter must be remitted to AAT for further consideration.

Click here to view the Industry Research & Development Board v Phai See Investments Pty (2001) case.