Deswandy and Ors and Minister for Immigration and Citizenship

[2007] AATA 1405

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1405

ADMINISTRATIVE APPEALS TRIBUNAL      )

GENERAL ADMINISTRATIVE  DIVISION       )          N2006/1474

)        N2006/1475
  )        N2006/1476             )        N 2006/1477

)
Re		RACHMAD DESWANDY, MEINITA LAKSMI PAWAKA, ALICIA AZZAHRA DEMITRI, RACHMAD FEBRIANDI DEMITRA

Applicants

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal Ms R Hunt, Senior Member;
Mr D Connolly, Member

Date7 June 2007

PlaceSydney

Decision The Tribunal affirms the decisions under review.  

…........... [Sgd] ................

R Hunt

Presiding Member

CATCHWORDS

MIGRATION – business skills visa – cancellation – primary visa holder - failure to meet visa conditions - no eligible business – no substantial ownership of business - no participation in day to day management – no genuine effort - no exercise of residual discretion – no extreme hardship to secondary visa holders.

LEGISLATION

Migration Act 1958 section 134

Migration Series Instructions No 133 (MSI 133)

CASES

Hope v Bathurst City Council (1980) 144 CLR 1

Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690

Puzey v Commissioner of Taxation [2003] FCAFC 197

Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 (25 February 2003)

Re Setia Wan v Minister for Immigration and Multicultural Affairs [2002] AATA      260

Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481

Wang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 961

REASONS FOR DECISION

7 June 2007	Ms R Hunt, Senior Member; Mr D Connolly, Member
introduction

1.      Mr Rachmad Deswandy is an Indonesian citizen who was granted a subclass 128 business skills visa on 20 January 2003. His wife, Meinita Pawaka, daughter, Alicia Demitri, and son, Rachmad Demitra, were granted secondary visas at the same time as dependants of Mr Deswandy. The matters before us are Mr Deswandy’s application N2006/1474, and the applications of Meinita Laksmi Pawaka, N2006/1475, Alicia Azzahra Demitri, N2006/1476, and Rachmad Febriandi Demitra, N2006/1477. The secondary visa holders claim that cancellation of their visas would cause them extreme hardship.

background

2.      Mr Deswandy first arrived in Australia on 29 June 2003. The respondent’s delegate cancelled his subclass 128 business skills visa on 6 October 2006. The cancellation decision was based on the ground that Mr Deswandy had not complied with the terms of his visa in that he had not obtained substantial ownership of an eligible business in Australia, had not participated in day-to-day management of such a business, and had not made genuine efforts to achieve these objectives. His dependent family’s visas were also cancelled as a result except for the visa of his daughter, Alicia Demitri. Counsel for the respondent informed us her visa was not cancelled for technical reasons or was an oversight.

3.      Mr Deswandy claimed his visa should not be cancelled because he holds a 10% share in North Stradbroke Island Operations Pty Ltd and North Stradbroke Properties Pty Ltd (hereinafter referred to as ‘North Stradbroke Island Companies’ or ‘Manta’) and had invested $130,000 in the business conducted by these entities. He further said he acts as marketing director of these businesses. As well, he has developed business in Indonesia and claims he is involved in day-to-day management of the North Stradbroke business through his board membership. He said he has transferred at least $A650,000 to Australia and has purchased three residential properties, with a total value of no less than $A1,800,000. Two of these real estate holdings are investment properties.

Mr Deswandy’s evidence about his business activities

4.      In oral evidence to the tribunal, Mr Deswandy explained that he came to Australia in 2003 to make investments through Santosa Properties Pty Ltd, a trustee for the Santosa-Deswandy Family Trust (the trust). He said Mr Santosa is a family friend and a businessman with interests in both Australia and Indonesia. During 2003-4 and in 2006, Mr Deswandy said that he purchased three residential properties in Melbourne with a combined value of around $A1.3 million. One of these properties he used as a residence and the others were rental properties. He conceded the properties were subject to mortgage but did not provide us with details of the amount secured. Mr Deswandy agreed that between the time his visa was issued, on 20 January 2003, and was cancelled, on 6 October 2006, he spent only 137 days in Australia. He referred us to a letter from his doctor in Singapore explaining that he was a patient currently managed for a throat condition and advised not to travel from 23 January 2007 to 23 February 2007.

Business enterprise in Queensland

5.      In February 2004, Mr Deswandy negotiated an investment of A$130,000 in Queensland which he claimed gave him an interest of about 10% in a back-packers’ hostel known as Manta Lodge and in a scuba diving business. His investment was in the form of shares in North Stradbroke Island Operations Pty Ltd and North Stradbroke Island Properties Pty Ltd, together described as North Stradbroke Island Companies, and trading as Manta Lodge and Scuba Centre (Manta).

6.      Mr Deswandy’s solicitors, Watson and Quinn Lawyers, described his relationship with the trust and with North Stradbroke Island Companies in a letter addressed to the tribunal dated 14 December 2006.  The solicitors wrote that they acted for the trust and informed us the trust held 400 ordinary shares (approximately 22.2% of the total issued shares) in Hope Island Investments Pty Ltd (Hope Island). The other shares were owned by three different trusts. Hope Island, in turn, owned about 1080 shares in the North Stradbroke Island Companies.

7.      As the solicitors set out, an initial investment of $130,000 was required to secure the trust’s interest. Mr Deswandy gave evidence that the funds for the trust’s investment in Manta Lodge and Scuba Centre came from his Indonesian bank account. A bank statement and letter from Mr Deswandy’s bank show he withdrew $A150,000 from his account on 4 February 2004. Mr Deswandy told us he placed $A130,000 in the trust and used the rest towards about $A30,000 for his personal expenses. We note from the documentation before us that the trust’s purchase of shares was concluded some months after the withdrawal, on 1 October 2004.

8.      Mr Deswandy claimed that he bought an effective stake of 10% in these businesses through Hope Island, which owns 45% of North Stradbroke Island Companies. He told us the businesses were controlled by five partners. Initially, Mr Deswandy only had a secondary interest in the trust. However, this changed and he became a primary beneficiary, on 27 October 2006. Mr Deswandy said all trust income would go to him from this date. Mr Deswandy gave evidence to the effect that he changed the trust deed as soon as his solicitors informed him of his secondary status and he realized there were commercial consequences.

9.       Mr Deswandy claimed that the Stradbroke Island businesses were worth $A1.3 million and this meant his $130,000 investment gave him 10%. As well as his financial investment of $130,000, he had commitments to attend monthly board meetings and to market the lodge and diving business in Indonesia. The tribunal sighted five sets of minutes of meeting attended by Mr Deswandy in April, May, July and October 2006. Although he claimed that he had attended meetings since 2004, he produced no further evidence. He claimed that due to illness he was unable to attend all meetings of the board and again mentioned the letter from his Singapore doctor. Mr Deswandy told us that, for his contribution to the business as its marketing director, he received a monthly salary of $449.00. Mr Deswandy’s payroll advice from North Stradbroke Island Operations Pty Ltd, for the period 1 November 2006 to 30 November 2006, confirms this is so.

10.     Mr Deswandy gave evidence about his marketing of the North Stradbroke Island business in Indonesia. He stated, as it was a small business, the time he allotted was “very small”. He recalled attending educational colleges principally in Jakarta on about 5 – 10 occasions, possibly during 2005-6, to talk to students. He told us he wrote letters to colleges offering to speak to students about scuba holidays. He made presentations of about 15 - 30 minutes to around 30 - 50 students on each occasion. He also said he had made direct contact with three or four hotels in Bali and Jakarta, where he arranged for someone to deliver brochures to be available to interested guests. He also contacted around three travel agencies. Mr Deswandy told us he had exhibited at a trade fair in Jakarta and had been to see officials at Austrade in Jakarta about the business as well. He produced photographs of his exhibition stands.

11.     We asked Mr Deswandy to explain the management arrangements for the back-packers’ lodge and scuba centre in view of his evidence that he was rarely there. Mr Deswandy replied that the facility was managed by a full time manager, Mr James Dawson, the son of a shareholder and fellow director. In addition, he said there were a full-time scuba instructor and a receptionist. Other part time staff was employed, as needed, depending upon the season. We asked Mr Deswandy to explain his role in the companies in day to day business. He replied that he, with the other directors, made strategic decisions about the “financials”, depending upon whether the business was running at a profit or loss. We noted from the tabled minutes of board meetings that the business was not doing well and Mr Deswandy responded that his marketing efforts were directed to expanding the business and he hoped it would improve. When asked how much time he spent on this investment he replied: “I am a director not clerical, I don’t know how much time”. He confirmed that, as he was mainly outside Australia, he was mainly involved in marketing and that, before his visa was cancelled, he had probably worked 25-30 hours per week on this project.

12.     Overall, he gave evidence that he spent around 60/70 hours a week on marketing but this included the promoting of Australian dairy equipment for Daviesway, which we have discussed further below. Mr Deswandy also told us that he arranged for Manta’s participation in the Mastercard Moments Program whereby Manta would offer a 20% discount to platinum card holders who paid by Mastercard.  This represented another of his efforts to market the business.

Other Australian Investments

13.     Mr Deswandy gave evidence that he purchased, through the trust, three Melbourne residential properties in 2003, 2005 and 2006. One was for a family residence while the other two were properties for rental. A letter from Paul Walker of First National Real Estate Baldwyn, in Victoria, stated that the combined property value of these holdings was approximately $A1.95m. Mr Walker also wrote that he had discussed real estate investments in Melbourne with Mr Deswandy on numerous occasions. Mr Deswandy said the trust’s real estate investments were subject to mortgages but gave no details.

14.     Mr Deswandy gave further oral evidence that he had not explored other investments in Australia apart from some talks with Daviesway. He had a good business relationship with Daviesway as the purchaser and distributor of its milking equipment in Indonesia. He was considering purchasing an interest in Daviesway and had some undocumented discussions. He had no other Australian commercial interests at this time. We refer to Daviesway and Indonesian business interests below.

Indonesian Interests

15.     Mr Deswandy referred us to the contents of a letter from Mr Arief Odang, Managing Director of PT Lunar Chemplast (Lunar) in Jakarta, dated 18 December 2006. This letter confirmed that Mr Deswandy has been a business partner in this company since mid 2005, with the responsibility for marketing Australian products. Mr Deswandy told us his major client was Daviesway, an Australian company which manufactured dairy equipment. Lunar imported the equipment into Indonesia and Mr Deswandy was responsible for marketing it to Indonesian farmers and the milk manufacturing industry such as IndoMilk.

16.     Mr Deswandy handed up pictures of an exhibition of Australian milk products, which he had organized and mounted at the Jakarta convention centre. Mr Deswandy stated Lunar had a permanent office in Jakarta. Mr Deswandy told us that, since 2005, he had spent approximately 50-60 hours per week on Lunar related business selling Daviesway’s products and that he maintained a good working relationship with Austrade.

17.     Mr Nikk Taylor of Daviesway gave oral evidence to us about the assistance Mr Deswandy had provided towards expansion of sales in Indonesia and the role of Lunar in Jakarta in this expansion. Mr Taylor gave evidence he was the export manager for Daviesway and that Lunar was his company’s distributor of dairy machinery in Indonesia. He confirmed that Mr Deswandy was actively involved in seeking out prospects for their dairy machinery. He said the Daviesway business has grown by over $240,000 in the past twelve months.  Mr Taylor attributed this growth to Lunar and to Mr Deswandy. He said the dairy industry in Indonesia was still in its infancy but growing and that Lunar was doing a “great job” in promoting their products.

consideration and findings

18. Section 134 of the Migration Act 1958 deals with cancellation of business skills visas. Section 134(1) provides, in part:

(1)  Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:

(a)  has not obtained a substantial ownership interest in an eligible business in Australia; or

(b)  is not utilising his or her skills in actively participating at a senior level in the day‑to‑day management of that business; or

19. The Minister’s discretion to cancel Mr Deswandy’s visa is subject to s 134(2) and s 135. There is nothing before us to suggest that Mr Deswandy was not served with appropriate notice in accordance with s 135. Next we have considered whether the discretion to cancel should be exercised under s 134(1)(a), which gives the Minister a discretion to cancel Mr Deswandy’s business visa if the Minister is satisfied that Mr Deswandy has not obtained ‘a substantial ownership interest in an eligible business in Australia’. Broadly, the qualification in s 134(2) is that the Minister must not cancel a business visa if the visa holder has made genuine efforts to obtain such an interest and to participate at a senior level in day to day management.

20.     We have first looked at whether Mr Deswandy has obtained a substantial ownership interest in an eligible business. He has put to us that he has substantial involvement in the Manta Lodge and Scuba Centre venture on North Stradbroke Island, has property investments in Melbourne and that he is responsible for growth in the export of Australian milking machinery to Indonesia.

21. Section 134(10) of the Act defines eligible business as one the Minister reasonably believes is resulting in or will result in one or more of the following:

(a)  the development of business links with the international market;
(b)  the creation or maintenance of employment in Australia;
(c)  the export of Australian goods or services;
(d)  the production of goods or the provision of services that would otherwise be imported into Australia;
(e)  the introduction of new or improved technology to Australia;
(f)  an increase in commercial activity and competitiveness within sectors of the Australian economy.

22.     In Hope v Bathurst City Council (1980) 144 CLR 1 the High Court held that carrying on a business denotes pursuing activities for the purpose of profit, undertaken on a continuous and repetitive basis. In Puzey v Commissioner of Taxation [2003] FCAFC 197 the Full Federal Court stated that a business requires some repetition of acts and something of a permanent character.

Is Manta Lodge and Scuba Centre an eligible business?

23.     Since 2003, Mr Deswandy has been responsible for marketing the operations of Manta Lodge and Scuba Centre on North Stradbroke Island. He described the business as a back-packers’ destination which provided accommodation and diving facilities.

24.     We have considered the tests of business suggested in the above cases in the context of Mr Deswandy’s business efforts. The elements of repetition and permanence are present in that the Manta business enterprise has continued since 2003. Mr Deswandy has worked on creating business links with the international market by marketing the enterprise to students and others in Indonesia but admitted the business is not running at a profit.  Manta has 4 or 5 full time employees, Mr Deswandy told us, and some casual employees, but we have scant evidence about these employees.  It may be that the manager is an Australian and that there are other Australian employees but we have no details of their names and nationality, wages or length of employment and the like.  The business does not export Australian goods or services. It also does not produce goods or services that otherwise would be imported into Australia. It has not introduced any new technology of which we are aware nor is there any indication that it has increased commercial activity and competitiveness within sectors of the Australian economy. The indices of eligible business are absent.

25. We find the Manta Lodge and Scuba Centre, operated through North Stradbroke Island Companies, are not an eligible business or businesses for the purposes of the s 134(10) of the Act. It follows that, although Mr Deswandy has an indirect interest in this business through his family trust and Hope island Investments, we are not satisfied Mr Deswandy has obtained an interest in an eligible business. We consider the enterprise on North Stradbroke Island and the vehicles by which Mr Deswandy has an interest in the enterprise and Mr Deswandy’s personal efforts to operate or enlarge the business do not lead to a conclusion that he has obtained an interest in an eligible business for the purposes of s 134. This means the Minister has discretion to cancel his business visa under s134(1)(a) unless he comes within the exception set out in s 134(2) or another of his business interests is an eligible business in which he holds a substantial interest.

Does Mr Deswandy have a substantial ownership interest in the North Stradbroke Island business?

26.     We have already found that the enterprise on North Stradbroke Island is not an eligible business. In addition, even if the trust owns approximately 10% of this business, it is not clear that Mr Deswandy has a substantial interest in the business. We accept Mr Deswandy contributed $130,000 for the trust although there was a time lag between when he withdrew $150,000 from his bank and the making of the investment. The respondent has calculated that the trust’s stake is 9.9%. At the time of cancellation, Mr Deswandy was the primary beneficiary although initially a secondary beneficiary. It is not possible on the material before us to determine Mr Deswandy’s exact financial interest. He is simply a beneficiary in a discretionary trust. We have scant evidence of the actual monetary value of the holding or of the business or of any distribution.

27.     What is a substantial interest depends on the facts of each case. For comparison, we have looked at the tribunal case of Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178. Senior Member Allen there observed that 12.25% in a large public company might be a substantial interest. However, we consider 10% stake in a small unprofitable privately owned business such as that of the North Stradbroke Island companies is not comparable with such a stake in a large successful enterprise. Mr Deswandy’s interest is indirect as well via the trust. The trust is a shareholder in Hope Island which, as a letter from Stradbroke Island Guesthouse dated 21 January 2005 sets out, became part of the North Stradbroke island operations on 1 October 2004, thereby creating a link to Mr Deswandy. The same letter offers Mr Deswandy the roles of management and a “hands-on” position which the letter says will occupy about two days a month of his time during the initial stage. On balance, we find that Mr Deswandy’s interest in the enterprise on North Stradbroke Island is not a substantial one. This means that the Minister’s discretion under s 134(1)(a) to cancel his visa could be based on the less than substantial interest Mr Deswandy holds in the Stradbroke Island Companies as well as this enterprise failing to meet the eligible business definition.

Does Mr Deswandy participate day to day in the North Stradbroke Island business?

28. In addition to finding the above Queensland operations do not meet the tests of eligible business and substantial investment for the purposes of s 134, we consider Mr Deswandy’s involvement in the business does not amount to utilising his skills in active participation at a senior level in day to day management. As paragraph 8.1 of PAM3 explains, s 134(1)(b) requires the visa holder to demonstrate an active, ongoing and senior management role in the business. Mr Deswandy’s participation is no doubt important but is far less than daily. Meetings of directors may be regular but occur only monthly. Marketing is obviously important in expanding the business but does not involve responsibility for employees and decision-making in the running of the business.

29. The proposal from Stradbroke Island Guesthouse on 21 January 2005 indicates an initial involvement of two days a month. Mr Deswandy’s own evidence was that he spent only a small part of each week on the business. The meetings he attends occur no more than once a month according to the minutes before us. Another person manages the day to day operations as Mr Deswandy told us. In other words, Mr Deswandy’s involvement falls far short of day to day management. He does not satisfy the test of active day to day participation in management of the business. It follows that the discretion to cancel his visa might be exercised under s 134(1)(b) unless he meets the conditions of s 134(2) or has another qualifying substantial ownership interest in an eligible business.

Are the Melbourne investments an eligible business?

30.     We considered whether the property interests in Melbourne might amount to an eligible business. Mr Deswandy gave evidence of a large investment in property and that two properties were rented. He provided scant details of the financial arrangements. Mr. Deswandy produced a letter from his estate agent confirming that he owned three properties in Melbourne and that two of them were let for rent. The properties are located in Balwyn North, Balwyn and Glen Waverley. The estate agent confirmed that “combined, these assets would have a net worth of approximately $1.95M”.

31.     We note that these investments, while considerable in terms of value, are subject to mortgages of which we have no detail. Further, these investments do not involve any Australian employees of which we are aware and do not meet any of the usual tests of business outlined in the case of Hopev Bathurst City Council cited above. For example, we have no figures showing whether the investments are an activity undertaken on a continuous and repetitive basis for the purpose of profit.

32. While obtaining rent for occupation of real estate holdings is a businesslike arrangement, there is nothing before us to suggest that any of the tests of eligible business are present for subs 134(10) purposes. For example, we have no evidence of business links with the international market and the like. We were not told that renting the properties involved any Australian employees. It follows that we find that the Melbourne property investments are not an eligible business for the purposes of s 134.

Is PT Lunar Chemplast a relevant business?

33. On the basis of the evidence before us, Lunar does not qualify as an eligible business under the Act for the following reasons. Lunar is not a business operating in Australia. Section 134(1)(a) requires the visa holder to have obtained a substantial ownership interest in an eligible business in Australia. Although Mr. Deswandy is a partner or director in the Lunar entity, it is domiciled in Indonesia and has no direct or indirect investments in Australia. Furthermore, his role in the company is to market Australian made dairy industry products in Indonesia. Although he has established that he has excellent relations with the Australian manufacturer, Daviesway, and with the Austrade office in Jakarta, his activities with Lunar or for Daviesway do not qualify him for the visa that has been cancelled. Mr Deswandy has contended that should he lose his business visa his ability to service Daviesway will be compromised as he will be unable to maintain the close personal relationship through visits to Australia. We do not accept this claim as there are other classes of visa under which he could enter Australia and conduct the same business. He has not found it necessary to spend more than 137 days in Australia during the time when he held a business skills visa. We find Lunar not an eligible business for the purposes of s 134.

Has Mr Deswandy made a genuine effort to obtain substantial ownership of an eligible business?

34. Section 134(2) of the Act provides that the Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day‑to‑day management of that business; and

(c)  intends to continue to make such genuine efforts.

35.     Subsection 134(3) further provides that the Minister may take into account certain matters in determining whether a person has made the genuine effort referred to in subsection (2). In considering these factors, we have borne all Mr Deswandy’s interests in mind and principally the interest in the Stradbroke Island Companies as these most closely resemble an eligible business. The subsection allows us to take into our consideration any or all of the following matters:

(a)  business proposals that the person has developed; …

We have no evidence of realistic business proposals directed at overcoming the Stradbroke Island Companies’ financial difficulties, only Mr Deswandy’s assurance that he must try harder.

(b)  the existence of partners or joint venturers for the business proposals; …

We are aware of four partners and shareholders in the North Stradbroke Companies. However, we have no information about their intentions in respect to the business other than Mr Deswandy’s evidence about their respective ownership stakes and daily management by the son of one of the owners.

(c)  research that the person has undertaken into the conduct of an eligible business in Australia;

We received no evidence on this matter.

(d)  the period or periods during which the person has been present in Australia;

According to Departmental records, Mr Deswandy has made frequent short visits to Australia since 2000. However, since being granted a business visa he has spent only 137 days in Australia despite Manta’s poor financial performance.

(e)  the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

Through his family trust, Mr Deswandy transferred funds to Australia used to purchase three residential properties in Melbourne and a $130,000 investment in the North Stradbroke companies. We have already found the residential properties are not an eligible business and have heard no convincing argument that they should be viewed as such. Mr Deswandy’s evidence concentrated on the North Stradbroke Island business and the activities with Daviesway. In addition, we were not informed how much of the purchase price for the residential properties was secured by mortgage.

(f)  the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

At best, Mr Deswandy owns approximately 10% of the Stradbroke Island Companies. This amounts to $130,000. As the business is not profitable, it may be that the value of this ownership interest is falling. No other investment by Mr Deswandy bears characteristics of an eligible business as discussed above.

(g)  business activity that is, or has been, undertaken by the person;

We have already discussed Mr Deswandy’s property investments, Indonesian interests and North Stradbroke Island Companies and have found them all wanting.

As to further tests under s 134(3), we note Mr Deswandy has not been accused of failing top respond to any notice of the Department and that he continues to hold his interests in properties and investments disclosed to us.

36. Taking into account the above tests and Mr Deswandy’s evidence about his activities we are not convinced that Mr. Deswandy has made a genuine effort to participate in the management of an eligible business in accordance with the requirements of s 134(2) and (3) of the Act. Policy in this case is set out in the Procedures Advice Manual, PAM3 regarding visa cancellation – business visas (policy and procedure for s 134 – s 137). Paragraph 9.2 of this document provides guidance about when genuine efforts have been made for statutory purposes. The policy guidelines advise that the business visa holder should have a business proposal that is genuine, realistic and achievable, the existence of partners or joint venturers and have undertaken business research. If the person has spent little time in Australia, officers considering the particular case are urged to more critically examine the evidence of genuine efforts. Other tests involve the value of assets transferred for use in the business as well as the ownership interest. We are obliged to follow policy unless there are compelling reasons to make an exception. Also see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690, per Justice Davies, as to possible circumstances justify or compel a departure from policy. A decision maker is bound to take into account the subject matter, scope and purpose of the legislation. We can find no good reason to make an exception in Mr Deswandy’s case.

37.     When asked, Mr Deswandy was unable to provide us with a marketing plan as to how he intended to overcome the poor business record of the North Stradbroke Island enterprises except to say that he “must try harder”. The tabled minutes of board meetings also failed to address this issue in any depth. In the absence of any clear evidence that Mr Deswandy has maintained a pattern of substantial and continuous activity to improve the prospects of Manta and the associated trust and companies in which he holds an interest, we conclude that Mr Deswandy has not satisfied the criteria demonstrating genuine efforts. He has not demonstrated genuine efforts to obtain a substantial interest in an eligible business in the context of the Stradbroke Island Companies and Hope Island Investments.

38.     Mr Deswandy gave evidence he had done no marketing in Australia as that was the responsibility of the Manta Lodge manager and that he had concentrated on marketing in Indonesia. When asked “where did the lodge’s clients come from?” Mr. Deswandy said that he didn’t know. It is clear from his evidence that Mr Deswandy spends a negligible amount of his time on marketing Manta as compared with the 50-60 hours per week which he has spent marketing Australian dairy machinery for Daviesway and Lunar. Mr Deswandy has no research to present to us and no other business proposal other than some discussions about whether he might make an offer to Daviesway some time in the future.

39. For the reasons given above, we are not convinced that Mr. Deswandy meets the criteria for making a genuine effort to obtain a substantial interest in an eligible business in Australia. Mr Deswandy arranged the purchase by his family trust of an interest of approximately 10% in the North Stradbroke Companies in an attempt to meet what he believed to be the requirements for his resident visa application. However, he has failed to establish sufficient participation and ownership interest and his efforts have not met the standard expected for a finding in his favour. After considering all the relevant factors in s 134(3) of the Act, we find that Mr. Deswandy has not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia in accordance with s134(2)(a) of the Act. This means he does not satisfy s 134(2) of the Act and the Minister is not prevented from cancelling his visa.

Has Mr Deswandy made a genuine effort to use his skills day to day in senior management?

40. While the requirements of s 134(2) are cumulative and Mr Deswandy must satisfy all the terms of the subsection to prevent cancellation, we also briefly considered whether Mr Deswandy made a genuine effort to participate in day to day management of the businesses he brought to our attention. It is clear from the correspondence provided by his solicitors and business partners in the North Stradbroke Island venture that at no stage was Mr Deswandy required or expected to maintain a “hands on” interest in the day to day affairs of the company. In our view, the little time he has spent in Australia proves beyond doubt that he was never expected nor intended to perform those roles. The Ministerial guidelines suggest that the holder of a business visa should remain in Australia for a minimum of 6 months following the grant of a visa. However, Mr. Deswandy spent only 137 days over that period.

41. After careful consideration, we find that Mr. Deswandy has not made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business in accordance with s134(2)(b) of the Act. Therefore he does not satisfy section 134(2) of the Act in this respect as well as in the ownership respect.

Should the residual discretion not to cancel the visa be exercised?

42. Section 134 contains a residual discretion not to cancel a business visa. Although relevant considerations are set out in s 134(3), it is qualified so as not to limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2. We have considered the possible residual discretion in light of Mr Deswandy’s evidence as well as taking into account the matters discussed under the s 134(3) headings above. We have taken into account the limited time Mr Deswandy has spent in Australia and the corresponding time he has spent in Indonesia on his other commercial interests. Although they may be furthering Australia’s commercial interests in that country, they are not related in any way with his activities as the director responsible for marketing Manta in Indonesia and for its overall day-to-day management. We have concluded that he has not demonstrated a sustained commitment to the business nor has he provided a satisfactory explanation as to why his lack of activity in its interests, both in the past and currently, would warrant the exercise of the residual discretion in his favour. We can find no reason justifying the exercise of the residual discretion to restore Mr Deswandy’s visa.

Would the members of his family suffer hardship if their visas were cancelled?

43. Section 134(5) provides, in relation to a visa held by a person who is a member of the family of a person whose business visa has been cancelled:

The minister must not cancel the other person’s business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

44.     In Re Setia Wan and Minister for Immigration and Multicultural Affairs [2002] AATA 260 the tribunal noted the terms “extreme hardship” was considered by the Federal Court in Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481 at page 487:

...It is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship …

45.     Mr. Deswandy’s family, consisting of his wife Meinita Pawaka and his children Rachmad Demitra and Alicia Demitri were issued visas concurrently with his. Mr Deswandy’s wife and son had their visas cancelled at the same time. For some technical reason the daughter’s visa was not cancelled but her application was before us as well.

46.     Mr. Deswandy gave evidence that his entire family are living in Jakarta and have been throughout the period of his visa. He claimed that it was the parents’ intention that the children should attend school in Australia. However, he told us none of his children have even been to school in Australia and that they are currently enrolled in schools in Jakarta.

47.     In all the circumstances, we do not consider that any difficulties or disruption constituting hardship that is exceptional, unexpected or exceedingly great in degree has fallen upon members of Mr. Deswandy’s family. Consequently, we find that the cancellation of Ms Pawaka’s visa and that of Rachmad Demitra would not result in extreme hardship to them. We have no cancellation decision before us in respect of Alicia Demitri but note that her situation is indistinguishable otherwise from that of the other former secondary visa holders. A mere possibility is not sufficient. We agree with this finding in Wang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 961.

Decision

48.     The Tribunal affirms the decisions under review.

I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Hunt  

Signed:         [Talaishia Collis]
  Associate

Date/s of Hearing  23 May 2007
Date of Decision  7 June 2007  
Representative for the Applicant          Mr Usman Lizar,
Lie Interlink Enterprise       

Solicitor for the Respondent                 Tigiilagi Eteuati,
Clayton Utz