Hidayat v Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 916
•31 August 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 916
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2003/94
GENERAL ADMINISTRATIVE DIVISION ) Re UMBUL HIDAYAT Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr M J Allen, Member Date31 August 2004
PlacePerth
Decision The decision made on 11 February 2003 by a delegate of the respondent to cancel the Subclass 127 Business Skills visa held by the applicant is affirmed.
..............(sgd M J Allen).......................
Member
CATCHWORDS
IMMIGRATION – cancellation of business visa – whether notice of intention to cancel was invalid because it specified a period of less than 28 days for the making of representations – consideration of effect of non compliance with s 135(1) – conclusion that non compliance did not invalidate the notice or the subsequent cancellation decision – applicant did obtain an ownership interest in an Australian corporation but not a substantial ownership interest – the corporation did not carry on a business or an eligible business – the applicant has not made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia or to be involved in the day-to-day management of such a business at a senior level – no factors sufficient to justify the exercise of the residual discretion to not cancel the visa in the applicant’s favour – cancellation decision affirmed.
Migration Act 1958 ss 128, 129, 131, 134, 135,
Migration Regulations 1994 reg 2.55
Migration Series Instruction 133
Ainsworth v Criminal Justice Commission (1992) 175CLR 564
Re Andiwidjaja and Minister for Immigration & Multicultural & Indigenous Affairs [2003] AATA 397
Re Foo and Minister and Immigration & Multicultural & Indigenous Affairs [2004] AATA 597
Hamilton v Minister for Immigration, Local Government & Ethnic Affairs (1993) 35ALD 205
Hope v Bathurst City Council [1980] 144 CLR1
Re Lee and Minister for Immigration & Multicultural & Indigenous Affairs [2004] AATA 432
NACA v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 551
NAHV v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 102
Re Prawiro v Minister for Immigration & Multicultural & Indigenous Affairs [2003] AATA 1096
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28
Puzey v Commissioner of Taxation [2003] FCAFC 197
Skoljarev v Australian Fisheries Management Authority [1995] 133 ALR 690
Tio v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 53
VEAN v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 280
Wang v Minister for Immigration & Multicultural and Indigenous Affairs [2002] FCA 167
Re Wibisono and Minister for Immigration & Multicultural & Indigenous Affairs [2004] AATA 145
Re Wijaya v Minister for Immigration & Multicultural & Indigenous Affairs [2003] AATA 1223
Re Yam and Minister for Immigration & Multicultural & Indigenous Affairs [2004] AATA 283
REASONS FOR DECISION
31 August 2004 Mr M J Allen, Member 1. On 11 February 2003 a delegate of the respondent made decisions to cancel the subclass 127 Business Skills visa held by the applicant and those held by his wife and two dependent children. The applicant has applied for review of the decision concerning his visa but no application has been made for review of the decisions affecting the other visa holders.
2. At the hearing of the matter the applicant represented himself, participating in the proceedings by telephone from Singapore with the assistance of an interpreter in the Indonesian language. The respondent was represented by Mr Blades, a solicitor with the Australian Government Solicitor’s Office. The Tribunal received into evidence the documents filed pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975 (T1 to T29) and Exhibits A1 and A2 tendered by the applicant.
Background
3. The applicant and his family members were granted visas in October 1999 and the applicant first entered Australia under that visa on 14 November 1999. He departed from Australia three days later and has not since re-entered this country (T17).
4. In October 2001 the respondent’s department requested the applicant complete a 24-month survey form. The applicant responded to that request in May 2002 and provided information concerning business activities undertaken in Australia (T9). The department sought further information from the applicant in May 2002 and the applicant provided additional information by way of a letter dated 10 August 2002, which the department received on 2 September 2002 (T11).
5. In October 2002 the department gave notice of intention to cancel the visas and in December 2002 the applicant made submissions in relation thereto, but the cancellation decisions referred to in para 1 above were made in February 2003.
Preliminary Issue
6. A preliminary issue was raised in the proceedings as to whether or not the respondent had complied with the statutory timetable regarding the giving of notices concerning cancellation of the visas as contained in s 134 and s 135 of the Migration Act 1958 (“the Act”). The scheme of the relevant provisions of the Act is that a discretionary power to cancel a visa held by a person such as the applicant arises if the decision-maker is satisfied that the applicant has not satisfied the requirements of s 134(1) of the Act and the exercise of that power is not prohibited by s 134(2). Further reference will be made to those provisions later in these reasons. Section 134(9) relevantly provides that a visa must not be cancelled under s 134(1)
“…unless a notice under s 135 was given to its holder within the period of three years commencing …if its holder was not in Australia when he … was first granted the business visa [as was the case with the applicant] – on the day on which its holder first entered Australia after that first visa was granted”.
That notice, which is given pursuant to s 135(1), must invite the visa holder to “…make representations to the Minister concerning the proposed cancellation …” within 28 or 70 days “… after the notice is given …” (depending on whether the notice is given in Australia or outside Australia). If the period of 28 or 70 days expires after the three year period referred to in s 134(9) then the visa may only be cancelled within “… the period of 90 days commencing at the time specified in the notice …”.
7. In the present case the first relevant date is 14 November 1999, that being the date of the applicant’s first arrival in Australia after the grant of the visa. The three year period specified in s 134(9) therefore ended on 13 November 2002. The notice of intention to cancel the applicant’s visa under s 135(1) was dated 11 October 2002 (T13) and was addressed to the applicant at an address in Australia that the applicant had previously notified to the department as his new contact address.
8. Regulation 2.55(7) of the Migration Regulations 1994 (“the Regulations”), which deals with the giving of documents to the holders of visas relating to the proposed cancellation of the visa under the Act, relevantly provides that such a document must be given in one of the specified ways, one of which is by
“… dating it and then despatching it … within three working days (in the place of despatch) of the date of the document … by prepaid post or other prepaid means … to the person’s last residential address, business address or post box address known to the Minister”.
Regulation 2.55(7) relevantly provides that if the Minister
“… gives a document to a person by despatching it by prepaid post or by other prepaid means, the person is taken to have received the document … if the document was despatched from a place in Australia to an address in Australia – seven working days (in the place of that address) after the date of the document”.
The seventh working day after 11 October 2002 was 22 October 2002 and the applicant is taken to have “received” the notice on that day. That date is well before the end of the three year period referred to in para [7] above and, consequently, the requirements of s 134(9) were complied with.
9. A period of 28 days after 22 October 2002 would end on 19 November 2002. However, the notice of intention to cancel nominated 17 November 2002 as the date by which the applicant must make any submissions concerning the proposed cancellation of his visa. That latter date was only 26 days after the notice was taken to have been received – and the applicant contended that the notice therefore failed to comply with s 135(1) and was, accordingly, invalid, with the consequence that the power to cancel the visa could not be exercised. It is apparent that the notice, by specifying 26 days for the making of submissions rather than 28 days, did not comply with the terms of s 135(1). The question for determination is what are the consequences of that non-compliance. In considering that question I have reviewed a number of Tribunal decisions and have reconsidered the tentative views I expressed in some earlier decisions that I refer to below.
10. In ReAndiwidjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 397 Senior Member Lindsay considered an identical situation ie where the notice of intention to cancel specified 26 days for making submissions rather than the required 28. In that case the visa holder received the notice of intention to cancel and made representations after the date specified and those representations were taken into account by the decision-maker. Senior Member Lindsay referred to a decision of the Federal Court in Wang v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 167, a case that concerned the question of whether the requirement to give a notice under s 129 of the Act to a person whose visa (not a business skills visa) had been cancelled under s 128 was an inviolable limitation of the power to revoke a cancellation under s 131. Senior Member Lindsay considered that the notice of intended cancellation that had been given to the visa holder did not impair his ability to respond to the intended cancellation and the giving of an incorrect date did not prejudice him. Accordingly the notice was not considered to be defective or to prevent a cancellation decision to be made (at [52]).
11. In RePrawiro v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1096 I considered the position of a notice of intended cancellation that specified more than 28 days for the making of submissions. At [18] I referred to comments made by members of the Full Federal Court in Tio v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA FC 53 concerning the 28 day period referred to in s 135(1)(b)(i). Lindgren J observed at [17] that s135(1) requires that the notice of intention to cancel a visa must allow “a full period of 28 days after or from the end of the day on which it is given, and expiring at the end of that period of 28 days”. At [23] his Honour observed that “s135(1) allows no lee way and requires the giving of a notice which has the effect of allowing a period expiring at the end (midnight) of the 28th day.” At [24] his Honour commented that “regardless of its form, a valid notice will always have the effect of allowing exactly 28 days expiring at the “time” of midnight on the 28th day.” At [63] Downes J observed that “problems might arise if a notice specifies a date which does not accord with the date required by sub para 135(1)(b)(i). However, that problem does not arise here”.
12. After referring to the comments of the High Court in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 at [91] and [92] I expressed the tentative opinion in Re Prawiro at [22] that the legislative purpose that can be discerned from the terms of s 134 and s 135 is that a visa holder should have at least 28 days within which to make representations about an intended cancellation and that, although I did not have to determine the point in that case, it seemed to me that a notice that nominated less than 28 days may not provide a reasonable period for making representations and that such non-compliance may result in the invalidity of the giving of the notice. I noted that the respondent’s department appeared to hold that view because clause 6.4 of its Ministerial Series Instructions 133 (“MSI 133”) concerning the cancellation of business visas states, in relation to the s 135(1) time requirements, that “it is not possible to reduce these periods under any circumstances”. However, at [23] I concluded that no legislative purpose could be discerned that required a conclusion that a notice given under s 135(1) will only be valid if it nominated exactly a 28 day period rather than a period that is longer than 28 days. I reached a similar conclusion in ReWijaya v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1223, as did Downes J in his capacity as President of this Tribunal in Re Wibisono and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 145.
13. My research has identified two decisions of the Tribunal that have been delivered since the decisions referred to above. In ReLee and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 432 Member Webb considered a case in which, on the evidence, a notice of intention to cancel was despatched by the respondent on 13 August 2002 to a visa holder but the notice was incorrectly dated 13 September 2002. The notice invited submissions to be made by 19 September 2002, which was clearly less than 28 days after the notice was taken to have been received by the visa holder (ie seven working days after the date of the notice). On the evidence Member Webb found that the notice had in fact been received on 15 August 2002, and that submissions were made by the visa holder and were considered by the decision-maker prior to the making of the cancellation decision. Member Webb referred at [49] to Re Wibisono and RePrawiro in concluding that there was a clear legislative intention that the visa holder should have 28 days or more in which to make representations concerning the intended cancellation. Because the notice did not omit relevant information and was not misleading, and because the notice was actually received on or about 15 August 2002, Member Webb concluded that the visa holder’s ability to make representations within the period specified in the legislation was not impaired by the defective notice. He concluded that, in the circumstances, “… the intention of the legislation and the purpose of the operative sections were not frustrated”. Accordingly, the defective notice did not invalidate the decision to cancel the visa. At [51] Member Webb observed that if the visa holder had
“…not been provided with at least 28 days in which to make representations, I would be persuaded to a different conclusion. The intention of the Act is to provide for a minimum period in which a business skills visa holder may make representations concerning the intended cancellation of his or her visa. The provision of any lesser period in consequence of a defective notice would, in my opinion, frustrate that object and intention, potentially invalidating any consequent action of the Minister to cancel a business visa in those circumstances”.
14. In ReFoo and Minister and Immigration and Multicultural and Indigenous Affairs [2004] AATA 597 Senior Member McCabe considered a case in which a notice of intention to cancel a visa nominated a date that was 27 days after the notice was taken to have been received by the visa holder (under reg. 2.55) rather than the required 28 days. On the evidence the Tribunal found that the notice had in fact been received and that representations were sent to the respondent’s department prior to the date specified. Senior Member McCabe at [31] considered the context in which cancellation decisions under s 134 are made and concluded that he did not accept “… that a flawless notice is a precondition to the exercise of the power under section 134”. At [32] to [34] Senior Member McCabe said that :
“[32] The process for cancelling a visa set out in s 135(1) is an attempt by the Parliament to codify the principles of natural justice. The provision is designed to ensure the visa holder is afforded an adequate opportunity to make representations before the decision-maker determines whether the visa should be cancelled. If one does not treat the provision as creating a pre-condition to the exercise of the power, what are the consequences of a failure to strictly observe the rules of natural justice set out therein?
[33] At common law, a failure to observe the principles of natural justice would ordinarily result in the decision being set aside. But that is not always the case. If a strict observance of the rules of natural justice would have made no difference to the final result, the decision may stand : see, for example, Hamilton v Minister for Immigration, Local Government and Ethnic Affairs (1993) 35ALD 205 at 214 per Beazley J. His (sic) Honour’s view in that case in clearly consistent with what has fallen from the High Court. In Ainsworth v Criminal Justice Commission (1992) 175CLR 564, for example, Mason CJ, Dawson, Toohey and Gaudron JJ said (at 578):
‘it is not in doubt that, where a decision-making process involves different steps or stages before a final decision is made, the requirements of natural justice are satisfied if the decision-making process, viewed in its entirety, entails procedural fairness.’
[34] If a failure to observe the requirements of natural justice does not necessarily invalidate a decision at common law, is the position any different where the requirements of natural justice are set out in the statute? I do not see why the failure to observe the statutory rules should be treated any differently once it is accepted that the procedural steps in a particular case are not preconditioned to the valid exercise of the power. Failure to follow the steps may be unlawful but the decision which results is not necessarily unlawful.”
15. In Project Blue Sky the High Court majority (McHugh, Gummow, Kirby and Hayne JJ) held at [91]:
“An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgement. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue”.
16. In NACA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 551 Tamberlin J considered whether there had been a failure to comply with the requirements of s 418(3) of the Act, which requires certain documents to be given to the Refugee Review Tribunal (“RRT”). His Honour concluded that there had been no breach of the sub-section but at [46] observed that:
“… I am not satisfied that any breach of s 418(3) would operate to invalidate the decision given by the RRT in this case. The subsection makes no reference to the consequences of the failure to comply with it. In the absence of clear and specific wording, it is not to be readily inferred that an error of judgement resulting in a failure to comply under s 418(3) must necessarily mean that the decision of the Tribunal is void and of no effect. The question is one of legislative intention. Courts are reluctant to find that the consequence of a breach of a statutory procedural provision results in total invalidity for all purposes in the absences of clear and expressed wording to that effect : see…[references not included]
17. In NAHV v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 102 a Full Court of the Federal Court (Carr, Kiefel and Allsop JJ) considered an admitted failure to comply with s 424A(2) – which required the Refugee Review to give certain information and invite representations in writing, whereas it had been done orally. Their Honours concluded that, despite the apparently mandatory language of the provision in question, any failure to comply was not one of substance but as to the procedural aspect of the method or vehicle of conveying information.
18. As to the consequences of such a non-compliance, their Honours stated at [23] that:
“…the relevant inquiry…is whether Parliament intended that breach of the condition as to manner of delivery of the relevant substantive information should necessarily spell the invalidity of the Tribunal’s decision, even in circumstances where there has been satisfaction of the important substantive requirement…to give the…information…and implicitly an opportunity to deal with it. The “mandatory” language…is relevant to, but not decisive of, this inquiry…it cannot be concluded that invalidity of the Tribunal’s decision is the necessary consequence of any failure to comply…irrespective of the absence of unfairness, whether of a substantive or procedural kind…”.
19. I observe that the relevant statutory provisions in this case make no reference to the consequences of a failure to comply strictly with the time requirements of s 135(1). Neither the explanatory memorandum to the Migration Amendment Bill (No. 2) 1992 (by which the cancellation provisions were introduced into the Act) nor the second reading speech by the responsible Minister in relation to that Bill (Hansard, House of Representatives 7 May 1992, pages 2678 to 2682) make any direct reference to the issue. The explanatory memorandum refers to the obligation of the Minister to give the visa holder a written notice of intention to cancel, invite the holder to make representations within a specified period, and give the representations due consideration. In the second reading speech the Minister said that
“the Bill includes provisions which mean that the power cannot be used against a business migrant unless the Minister has notified him or her of the intention to do so within three years of the migrant’s arrival in Australia. This provision allows business migrants time to make sensible business decisions. It also allows sufficient time for an assessment to be made that the business is likely to be of ongoing benefit. It also recognises that, as permanent residents, business migrants should not be under the threat of cancellation indefinitely. There is a requirement for the Minister to consider any submission by or on behalf of the business migrant”. The Minister also said that “the provisions of the Bill relating to mandatory participation in monitoring introduce a requirement for business skills migrants to provide business related information and notification of changes of address after their arrival in Australia. There are financial penalties for non-compliance with these requirements which are considered and fair.”
20. It is my view that the provisions of the Act, in the light of the above, reflect a balancing of interests. On the one hand the provisions allow monitoring of a business visa holder’s activities in Australia and the ability to cancel a visa if those activities are judged not to satisfy various criteria. On the other hand, it is recognised that visa holders should not be under the threat of cancellation indefinitely and hence the notice of intention to cancel must be made within the three year period and the cancellation decision must be made within 90 days of the date specified in the notice of intention to cancel if that date is after the end of the three year period. Parliament was obviously concerned to ensure that the visa holder has a reasonable opportunity to provide submissions about the intended cancellation. Consequently, in my opinion, if the respondent failed to issue a notice of intended cancellation at all – so that the visa holder was unaware of the intention and had no opportunity to make submissions – then that non-compliance would render a subsequent cancellation decision invalid. The same might apply where substantially less than 28 days was given for the making of representations and a cancellation was made immediately after the expiry of that shorter period.
21. It must be remembered that once the three year period has expired the respondent has no ability to issue a notice and has lost the capacity to cancel the visa. Parliament must be taken to have intended as much. However, where a notice of intention to cancel has been given but the time specified for submissions is slightly less than the 28 day specified, it is difficult, in my opinion, to see that Parliament intended that the consequence was total invalidity of the process. For example, the respondent might quickly identify an error in the notice and inform the visa holder of the correct period for making submissions. Equally, the visa holder may in fact receive the notice of intended cancellation prior to the date upon which he or she is taken to receive it by virtue of reg 2.55. A further scenario, and one that is often seen in this Tribunal, is that the visa holder simply takes longer than the 28 days allowed for the making of submissions and, as is contemplated by s 135(3), the Minister must, and does, give due consideration to any representations received.
22. The legislative purpose and intention that I perceive is that the visa holder must, on the facts, be given a reasonable time within which to make submissions. If that in fact occurs then a non-compliance with s 135(1) of the type in question in this case will not invalidate the notice given or the subsequent cancellation decision. “Considerations of substance, rather than form, should prevail”: VEAN v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 280 at [33] per Weinberg J.
23. As noted at para 7 above, in the present case the notice of intention to cancel was sent to an address in Australia that had previously been notified by the applicant to the Department (T13). The notice set out in some detail the reasons why the delegate considered the applicant had not satisfied the requirements of the Act and provided a schedule of the types of documents that might assist the applicant in demonstrating his claims that he had satisfied his obligations. The applicant’s oral evidence in these proceedings was that the address was that of a business partner with whom he was in regular contact. The applicant said that he did receive the notice but did not specify when. In the event, the applicant responded to the notice by way of a letter to the Department dated 10 December 2002, with which were enclosed a large quantity of documentary material amounting to in excess of 300 pages. The letter of 10 December 2002 (T14) referred to the respondent’s notice, providing further evidence that it had been received by the applicant some time prior to that date. In his letter the applicant did not refer to any difficulty in making representations in the time permitted.
24. In all the circumstances I consider that there has been satisfaction of the important substantial requirement to give notice of the intended cancellation to the applicant and a reasonable opportunity to make representations about it. The entirety of the decision-making process leading up to the cancellation decision did not involve any lack of procedural fairness. As I have concluded above that the provision of a reasonable opportunity to make representations was the legislative purpose in respect of these provisions of the Act, I conclude that the specification of 26 days for the making of representations rather than 28 days was not a failure to comply with the provisions of s 135(1) that had the effect of invalidating the notice given to the applicant, or rendering invalid the subsequent cancellation decision. I must therefore consider the merits of the cancellation decision.
Did the Power to Cancel Under Section 134(1) Arise?
25. A discretionary power to cancel the applicant’s visa under s 134(1) would arise if the decision-maker is satisfied that by the time of the decision the applicant had failed to satisfy any one of the matters set out in that sub-section, namely that the visa 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
(c)does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.”
26. In relation to s 134(1)(a), the applicant relied on his involvement in a company named UT Australasia Pty Ltd (“UTA”). UTA was incorporated on 15 May 2001, with the applicant and three other individuals becoming shareholders and directors thereof. The company issued 100 $1 fully paid shares, with the applicant holding 30, his father-in-law (Mr Ukon) holding 20, a Mr Rusdi holding 20 and a Mr Tan holding 30 shares. The applicant said that he had been introduced to Mr Tan by Mr Rusdi in 1999. UTA obtained an Australian Business Number and registered for GST on 15 May 2001.
27. On six occasions between 23 August 2001 and 16 November 2002 UTA purchased a total of 11 motor vehicles in Australia and exported them to Indonesia. All of the vehicles had previously been manufactured overseas and imported into Australia. The total value of the vehicles purchased was approximately $485,000 and in addition UTA paid the freight costs of shipping them to Indonesia. According to the bills of lading concerning the shipments, the vehicles were variously consigned to three Indonesian corporations. In the case of three of the vehicles the T documents contain copies of invoices issued by UTA to the Indonesian purchaser (T pages 127, 128 and 131). In all three cases the total amount payable by the purchaser was less than the gross amount paid by UTA to purchase the vehicle in Australia. A BMW vehicle that had been purchased for $101,000 was sold for $84,000, a Toyota Landcruiser that had been purchased for $69,550 was sold for $62,170, and another BMW vehicle that was purchased for $92,000 was sold for $77,645.
28. In addition to the above transactions, in May 2002 UTA agreed to purchase grapes from an Australian supplier at a total cost of $44,208 and exported them to Indonesia in June 2002.
29. In relation to the transactions involving motor vehicles, the applicant’s oral evidence was that he made a loss on the transactions. He realised that vehicles of that kind could be purchased in other parts of the world and imported into Indonesia at a cheaper price than he was able to land the vehicles in Indonesia from Australia. He said that he adopted a long term view about this type of business and decided that he would not focus on realising a profit in the short term but would hope to be able to make a profit on such transactions in the long run. UTA had sold the vehicles to Indonesian car dealers who would then on-sell to end purchasers in Indonesia.
30. In relation to the transaction involving grapes, the applicant said that he had stored the grapes in a friend’s cold storage facility in Indonesia. He had sold some of the grapes to shops but a proportion of them eventually rotted and could not be sold. He had made no profit on the transaction.
31. On five occasions between November 2001 and November 2002 UTA sent a large number of proforma letters to various Australian businesses seeking supplies of milk powder (November 2001, T pages 133-153); used computer parts (July/August 2002, T pages 256–377); second hand unusable moulds or tooling for producing various plastic products (September/October 2002, T pages 378–439); and a pharmaceutical product (November 2002, T pages 467-474). In March 2002 UTA sent proforma letters to a number of businesses in Indonesia offering to supply fruit from Australia. The T documents show that on some occasions UTA received responses from some of the parties contacted in this way but no documentary evidence was available to indicate that anybody on behalf of UTA followed up those responses.
32. No financial statements in respect of UTA’s various transactions were presented either to the department or the Tribunal. A Business Activity Statement for the three month period to September 2001 was produced (T pages 154-155) and was signed by Mr Tan. The applicant said that other BAS statements were not prepared because it was expensive to do so. The applicant said that balance sheets and profit and loss accounts had never been prepared for UTA although Mr Tan kept the company’s accountant informed of the transactions.
33. Section 134(10) of the Act relevantly defines an “ownership interest” in relation to a business as meaning an interest in the business as a shareholder in a company that carries on the business. Accordingly, the applicant’s shareholding in UTA constitutes an ownership interest in any business that UTA may carry on. As to whether that interest is a “substantial” one is a matter of fact and degree. The shareholding represents 30% of the ordinary issued shares of UTA and another 20% is held by the applicant’s father-in-law, who may be regarded as a person associated with him. To that extent the shareholding gives the applicant a degree of influence and control over decisions that may be made by the shareholders of UTA. In terms of the amount paid up by way of capital, the applicant has invested only $30 in UTA, although he said in his oral evidence that he had paid all the initial incorporation expenses for the company. In the 24-month survey form that he completed the applicant said that he had transferred $150,000 to Australia but there are no documents to verify that. The applicant provided statements for UTA’s bank account for the month of June 2001 (T page 156) and the period from January 2002 to October 2002 (T pages 173-181). Those statements show balances in the account ranging from just over $5,000 to as much as $165,000 with many amounts moving into and out of the account. Many of the amounts credited to the account can be identified as payments made by the consignees of the motor vehicles sold by UTA, and in one case a deposit by the applicant. The nature of the withdrawals cannot be identified. It is apparent that the account is a transaction account for UTA representing the company’s working capital and does not represent the value of an ownership interest in any business that the company may carry on. In the absence of evidence about the assets and liabilities of UTA and the extent of any significant, as opposed to nominal, capital in the business I am not satisfied on balance that the applicant’s ownership interest in UTA can be described as a substantial one.
34. Accordingly, the applicant would not satisfy the requirements of s 134(1)(a) of the Act even if UTA carried on a business that could be said to be an eligible business. In fact I am by not satisfied that that is the case. The transactions involving the motor vehicles and the single grapes transaction have not been, in my opinion, continuous or repetitive but, more importantly, they have not been carried on with a view to making a profit. The business has some of the indicia of a business (such as corporate form and registration for GST) but there is no evidence that UTA kept proper books of account and other records. In my opinion it cannot be said that UTA does carry on a business : see Hope v Bathurst City Council [1980] 144 CLR1 and Puzey v Commissioner of Taxation [2003] FCAFC 197. However, even if it could be said that UTA did carry on a business, in my opinion it cannot be said that it was an eligible business.
35. Section 134(10) of the Act defines an eligible business to mean:
“a business that the Minister reasonably believes is resulted 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 by 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.”
36. The applicant’s oral evidence was that he worked for UTA in Indonesia and Mr Tan spent some time working on UTA affairs in Australia, although he understood that Mr Tan had a number of other business interests in this country. A single shipment of Australian fruit and the re-export of motor vehicles previously imported into Australia in circumstances that were, in my opinion, economically unsustainable could not, in my opinion, be said to have resulted (by the time of cancellation of the visa) or to be reasonably likely to result thereafter in the development of business links with the international market, the creation or maintenance of employment in Australia, the export of Australian goods or services, or any increase in commercial activity and competitiveness within sectors of the Australian economy. On balance I do not consider that any business that may have been conducted by UTA was an eligible business for the purposes of s 134(1)(a). Accordingly, the power to cancel the applicant’s visa would have arisen under that subsection.
37. Having concluded that the applicant did not satisfy the requirements of s 134(1)(a), it is unnecessary to consider whether he also failed to satisfy the requirements of s 134(1)(b) because the management involvement contemplated by that paragraph must be in relation to an eligible business. I will, however, consider the applicant’s efforts in relation to involvement in management below when considering the requirements of s 134(2).
Does Section 134(2) Prevent the Exercise of the Power to Cancel?
38. Section 134(2) relevantly provides that the power to cancel a visa under s 134(1) must not be exercised if the Minister is satisfied that the visa 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”.
39. For the purpose of determining whether the person has made such genuine efforts, s 134(3) provides that any or all of the following matters may be taken into account:
“(a)business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c) research that the person has undertaken into the conduct of an eligible business in Australia;
(d) the period or periods during which the person has been present in Australia;
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
(h) whether the person has failed to comply with a notice under Section 137;
(i) if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level in the day-to-day management of the business:
(i) the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii) the reasons why the person no longer holds the interest or participates in the management (as the case requires)”.
40. The MSI 133 issued by the respondent’s department at paragraph 4.5.1 contains notes to guide decision-makers in the interpretation of the factors set out in s 134(3). Although such indications of policy are not binding on the Tribunal, there is good reason why they should be applied in the interest of consistency of decision-making; see Skoljarev v Australian Fisheries Management Authority [1995] 133 ALR 690 at 695 and 696 per Davies J. No weight should be given to the notes set out in paragraph 4.5.1 where the note is clearly more restrictive than the terms of the Act itself; see Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [48] to [51] per Senior Member Dwyer and Member McLean. An “effort” will be “genuine” in the context of s 134 if there is a level of effort beyond that which is purely superficial or token and an effort will not be considered not genuine merely because it falls short of the examples given in s 134(3): see Re Yam at [53]. It is convenient to consider first the efforts made by the applicant in terms of the factors identified in s 134(3) and the guidelines regarding them in para 4.5.1 of MSI 133.
(a) Business Proposals Developed
41. MSI 133 refers to business proposals that are considered “genuine, realistic and achievable”. The applicant produced no documentary evidence of the development of business proposals or plans and I have observed above that the export of motor vehicles that had previously been imported into Australia and the attempted sale of them in Indonesia at prices higher than the same vehicles could be imported from other countries was not economically sustainable. The single export transaction of grapes appears to have been undertaken without particular planning as to how the product would be sold in Indonesia, as evidenced by the applicant’s evidence that the grapes were kept in cold storage and a proportion were unable to be sold because of spoilage. In the circumstances I do not consider that the applicant has developed proposals that could be regarded as genuine, realistic or achievable.
(b) Partners or Joint Venturers
42. The MSI refers to formal contracts with partners or joint venturers. There is no documentary evidence of the arrangements between the applicant and Mr Tan or the other two shareholders and directors of UTA. The applicant said he understood Mr Tan is involved in a number of other businesses and that he relied on Mr Tan to approach possible suppliers, obtain prices for the goods, approach shippers and negotiate shipping rates and to arrange the physical export of the products. Prior to the hearing of the matter the applicant was directed by the Tribunal [on 5 November 2003 and 14 January 2004] to file all documentary evidence upon which he relied and to file witness statements of any witness he intended to call at the hearing. The applicant said in his evidence that he had previously considered calling Mr Tan as a witness but had decided not to. During the course of the hearing the applicant asked for an adjournment so that he could arrange for Mr Tan to give evidence but I refused that request in the light of the directions that had previously been made.
(c) Research Undertaken
43. The applicant said that prior to the incorporation of UTA he had undertaken some research about the possible export from Australia of computer ribbons but this had not progressed beyond the preliminary stage. He said that he had made these enquiries via his business in Indonesia. Eventually he had sought some advice from a migration consultant in Indonesia who had advised him to establish a company in Australia. MSI 133 refers to the need for evidence of detailed consultations with at least three business advisors such as accountants, lawyers, financial institutions, state or territory government agencies, Austrade, or business trade associations. Apart from some contact between the applicant and Austrade in Jakarta there is no evidence that the applicant undertook these consultations.
(d) Physical Presence in Australia
44. The MSI refers to a visa holder being physically in Australia for more than 6 months since first arrival. As noted above the applicant spent 3 days in this country when he first arrived and did not return. The applicant said that it was unnecessary for him to spend time in Australia because he could get all the information that he needed from agencies in Indonesia such as Austrade and he could rely on Mr Tan to look after whatever had to be done at the Australian end. Although it is established that a person may participate in the management of a business whilst overseas if the management needs of the business concerns require that, it seems to me very difficult to say that a person who has never been in Australia during the period that a business is said to operate (bearing in mind that the applicant’s visit to Australia occurred a long time before the incorporation of UTA) that the person has been involved in the management of that business to any substantial degree or made efforts to do so.
(e) Value of Assets Transferred
45. MSI 133 refers to the transfer to and retention in Australia of at least 50% of the funds indicated is available for transfer within 2 years when the person applied for a business visa. In the case of the applicant it appears from the application that he lodged in 1998 (T18, page 489) that he expressed an intention to bring to Australia A$200,000. Although, as noted at para 33 above, the bank account of UTA fluctuated substantially, at 17 October 2002 (being the last date for which information is available) the account balance was $42,000 approximately. In the circumstances I am not satisfied that the applicant transferred at least half of the amount indicated as available and, more particularly, did not retain that amount in Australia.
(f) Value of Ownership Interest
46. In the absence of reliable financial records regarding the financial position of UTA it is not possible to reach any conclusions regarding the value of the ownership interest of that the applicant has in that company. In my opinion, given the history of the transactions that have been undertaken, any value would be nominal or small – and less than the minimum $100,000 referred to in MSI 133.
(g) Business Activity Undertaken
47. The MSI refers to business activity of a minimum of $100,000 as indicated by turnover. The transactions undertaken by UTA exceeded that amount.
(h) Compliance With Notices
48. It is not suggested by the respondent that the applicant failed to provide information to the department when requested.
49. Looking at the applicant’s position generally, I am by no means satisfied that the applicant has made genuine efforts to establish an eligible business in Australia and be involved in its management at a senior level. At the time of being granted his business visa the applicant, with his family, was involved in the ownership and management of a substantial stationary and office equipment business in Indonesia (T18). He said that when granted his visa he had started to scale back his involvement in that business and that within 4 or 5 months of being granted the visa he had ceased to be involved in the management and had stopped going to the factory of the business at all. Thereafter he had been fully committed to the activities of UTA. However, I note that at least until October 2002 the address of UTA in Jakarta that the applicant was using was the same address as the Indonesian business that the applicant had formerly been involved in. The applicant explained this by saying that he had asked if he could use an office and storage space for UTA and had been granted that permission by the current owners of the business. He said that he and one employee worked for UTA from those small premises. However it was pointed out to him that UTA’s correspondence quoted that it had 20 telephone lines available (eg T documents page 374) and the applicant attempted to explain this by saying that he needed those lines because he had many customers and business contacts to keep in touch with because of the extensive mailing out to third parties that UTA had undertaken. This evidence of the applicant was at odds with the other evidence he gave that he would rely on Mr Tan to be primarily responsible for making contact with the various people that had been written to, particularly those who responded. Overall I was not satisfied with the reliability of the applicant’s evidence and in my opinion the applicant was not involved to anything like the degree he said in the activities of the UTA on a day-to-day basis.
50. The applicant said that he had left Indonesia in October 2003 when he became aware that his Australian visa had been cancelled and moved to Singapore with his family, where he has lived since on a form of tourist visa. His children are in Singapore on student visas. He said that he was not presently working in Singapore at all.
51. Having regard to all of the above matters, I am not satisfied that the applicant has made genuine efforts to be involved in the establishment of and management of an eligible business in Australia and, consequently, s 134(2) would not prevent the cancellation of his visa under s 134(1).
52. There remains the question of whether the residual discretion should be exercised in favour of the applicant so that his visa is not cancelled.
53. The applicant did not identify specific matters that indicated the discretion should be exercised in his favour. From the applicant’s evidence it appears that neither he nor immediate family owns any house or other property in Australia and it was the applicant’s evidence that his wife and children had spent only about 1 month in Australia under their business visas. Accordingly, I see no reason to conclude that either the applicant or his family members have developed any particular connection with Australia. The applicant made it clear that, although he retained an ultimate ambition to live in Australia, he had not made any efforts to further his business activities in this country after the date of cancellation of his visa. In all the circumstances I can see no factors that indicate that the discretion not to cancel the applicant’s visa should be exercised in his favour and I decline to do so. Accordingly, my decision is that the decision made on 11 February 2003 to cancel the visa held by the applicant is affirmed.
I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Allen, Member
Signed: .............(sgd V Wong)..................................
AssociateDate/s of Hearing 24 March 2004
Date of Decision 31 August 2004
Counsel for the Applicant Self Represented
Solicitor for the Applicant N/A
Counsel for the Respondent Mr D Blades
Solicitor for the Respondent Australian Government Solicitor
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