Hindrodjojo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 724
•7 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 724
ADMINISTRATIVE APPEALS TRIBUNAL )
)No W2002/67, W2002/232-234, W2003/332
GENERAL ADMINISTRATIVE DIVISION ) Re HINDRODJOJO
MELIANA APRILLIA
IVANA INDAWATI
SHIENNY OCTAVIA
OLIVIA YULIANTIApplicants
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr M Allen, Member Date7 July 2004
PlacePerth
Decision The decisions made on 1 February 2002 to cancel the business visas held by all the applicants are set aside. The visas remain valid and effective.
.............(sgd M Allen)......................
Member
CATCHWORDS
IMMIGRATION – cancellation of business skills visa – applicant has a substantial ownership interest in an Australian company – the company carries on an eligible business – consideration of whether applicant’s personal investment activities constitute an eligible business in Australia – finding that applicant has been involved in the day to day senior management of the eligible business – consideration of whether or not applicant has made genuine efforts for the purposes of s134(2) – decisions set aside.
Administrative Appeals Tribunal Act 1975 (Cth) s37
Migration Act 1958 ss 134, 135
Migration Series Instruction 133
Puzey v Commissioner of Taxation [2003] FCA FC 197
Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77
Re Lau and Minister for Immigration and Multicultural and Ethnic Affairs [2002] AATA 703
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283REASONS FOR DECISION
7 July 2004 Mr M Allen, Member 1. On 1 February 2002 a delegate of the respondent made decisions to cancel the Class 128 (Senior Executive category) business visa held by Mr Hindrodjojo and the business visas held by members of his family unit, namely his wife and five daughters. Mr Hindrodjojo and four of his daughters (Shienny, Ivana, Meliana and Olivia) have applied for review of the decisions affecting each of them. No applications have been made by Mr Hindrodjojo’s wife or his fifth daughter for review of the decisions affecting them.
2. At the hearing of the matter all the applicants were represented by Mr Walker of counsel and the respondent was represented by Mr Blades, a solicitor with the Australian Government Solicitor. The Tribunal received into evidence the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1 – T30), Exhibits A1 – A20 tendered on behalf of the applicants and R1 – R3 tendered on behalf of the respondent.
3. Oral evidence was given by all the applicants (in the case of Mr Hindrodjojo and Olivia with the assistance of an interpreter in the Indonesian language) and on behalf of the applicants by Mr John Hoon, Mr Trevor Harradine and Mr Gerrard Short.
4. The background to the matter is that Mr Hindrodjojo applied for a business visa in 1997 and was eventually granted a visa on 30 October 1998. He first entered Australia under the visa on 10 November 1998.
5. In October 2000 Mr Hindrodjojo was asked by the respondent’s Department to complete a 24 month survey form and that form, with accompanying documentary material, was provided to the Department in January 2001. In April 2001 the Department sought further information from Mr Hindrodjojo but no response to that request was received.
6. By letter dated 28 September 2001 a delegate gave notice to all the visa holders of the intention to cancel the visas, and invited representations to be made with respect thereto by 4 November 2001. Submissions were received in November and December 2001 but on 1 February 2002 a delegate made the decisions referred to in paragraph 1 above.
Consideration
7. The respondent’s power to cancel a business visa is found within ss 134 and 135 of the Migration Act 1958 (“the Act”). I will refer to the specific provisions of those sections below, but at this point I observe that they relate to the extent to which a principal visa holder such as Mr Hindrodjojo has been able to obtain an ownership interest in, and be involved in the senior management of, a business in Australia, or has made genuine efforts to do so.
8. Prior to the date of cancellation of the visas and subsequently Mr Hindrodjojo has been involved in several Australian business activities. Much of the documentary and oral evidence given at the hearing was not in dispute concerning those activities and the following findings of fact set out in [9] to [16] can be made based on the essentially uncontested evidence of Mr Hindrodjojo, Mr Hoon, Mr Harradine and Mr Short.
9. The first business that Mr Hindrodjojo was involved in was via a company named Rubytown Holdings Pty Ltd (“Rubytown”). On 26 March 1999 Mr Hindrodjojo became a director and shareholder of Rubytown, the other directors and shareholders being business acquaintances of his (Mr Halim, Mr Mintarya, Mr Wibowo and Mr Djajusman). The company’s issued share capital consisted of one million ordinary shares of $1.00 each, with Messrs Hindrodjojo, Wibowo and Djajusman each holding 100,000 shares, Mr Mintarya holding 300,000 shares and Mr Halim 400,000 shares.
10. Rubytown was established to be an investment vehicle for its shareholders and in April 1999 Rubytown invested $1,000,000 in the purchase of one million units in a unit trust known as the Paragon Apartments Trust (“Paragon Apartments”), the manager of which was Westpoint Management Limited (“Westpoint”). Paragon Apartments was a development of apartments in the Perth central business district and was a project with a total value of approximately $30,000,000. Rubytown’s investment represented 12.5% of the total equity in the project of $8,000,000 (T13). The expectation was that a return would be generated for investors when the apartments to be constructed were completed and sold, which was expected to take approximately 2-3 years. In the event, in late 2001 the apartments were not being sold as quickly as anticipated and the terms of Rubytown’s investment was renegotiated with Westpoint. The sum of $250,000 was paid to Rubytown and a further $500,000 was to be paid in March 2002. The remaining $250,000 plus the amount of $900,000, which represented a profit on the development to be credited to Rubytown (giving a total of $1.15 million), plus a further $1.15 million that Rubytown was to borrow from a financial institution, was to be used to purchase 8 apartments in the complex. In November 2001 Rubytown and between Rubytown and Westpoint became the registered proprietor of the 8 apartments (A8).
11. In March 2002 Westpoint was unable to pay the $500,000 due and again the matter was renegotiated. It was agreed that Rubytown would receive a 6% guaranteed return on its 8 apartments and the $500,000 would be converted into promissory notes with an expiry date of September 2005 and the funds used for investment in a new development project that Westpoint had under way, with a return of 12% per annum interest. For reasons to do with taxation arrangements the promissory notes were not held in the name of Rubytown but were issued to the individual shareholders of Rubytown in accordance with their percentage holding of the share capital of the company. Mr Hindrodjojo became the holder of a $50,000 promissory note issued by the manager of the development (A10). The guaranteed return to Rubytown on the 8 apartments was to run until November 2003 and Rubytown agreed not to sell the apartments prior to that date. At the time of the hearing of the proceedings that agreement was due to expire and discussions were taking place within Rubytown, and between Rubytown and Westpoint, as to what other arrangements or investment the company might enter into.
12. In addition to the investment in Paragon Apartments via Rubytown, in December 2000 Mr Hindrodjojo invested $100,000 in a syndicate known as the Paragon Commercial Syndicate (“Paragon Commercial”), which was developing an office building and retail arcade in Perth. This development was a longer term venture than the Paragon Apartments project, with investors expecting to hold their investments for five to ten years.
13. In addition to the above Mr Hindrodjojo, on the advice and with the assistance of Mr Hoon (who is a chartered accountant and business consultant), in 2000 invested $100,000 in a property development syndicate in Sydney known as The Chocolate Factory. In 2001 he transferred this investment into a different syndicate developing a property in York Street, Sydney and at the same time invested a further $100,000 in the York Street development.
14. In March 2002 Mr Hindrodjojo, Mr Mintarya and another friend of Mr Hindrodjojo’s, Mr Rungkat, instructed Mr Harradine, who is an Australian accountant and business consultant, to obtain an Australian company on their behalf because they were considering acquiring a company named Aipac Australia Pty Ltd (“Aipac”), which was based in Sydney and involved in the production of paint and related products. Mr Harradine arranged for the purchase of a shelf company that was subsequently renamed Montoya Exports Pty Ltd (“Montoya”). Messrs Mintarya, Hindrodjojo and Rungkat and their respective wives each acquired one share in the capital of Montoya and Mr Mintarya, Mr Hindrodjojo and Mr Rungkat became the directors of the company.
15. Mr Harradine’s services were retained to provide advice regarding the possible purchase of Aipac, which would have involved the investment by Montoya of approximately $2.25 million. After receiving advice from Mr Harradine the decision was made in August or September 2002 not to proceed with the purchase.
16. In the meantime, Montoya had become involved in the purchase of ink and other products in Australia and their export to Indonesia. According to Montoya’s financial statements for the year ended 30 June 2003 (A18) Montoya made purchases of $237,676 and sales of $253,483 for a gross profit from trading of $15,807 in that year. At 30 June 2003 the company had total assets of $30,141, most of which was represented by cash on hand or current tax assets, and net assets of $6,451. At least half of the value of the sales made by Montoya in that period were to the large Indonesian company of which Mr Hindrodjojo and Mr Mintarya were senior executives, PT Gudang Garam (“PTGG”).
17. Against that background, I turn to consider the specific provisions of ss 134 and 135 of the Migration Act 1958 (“the Act”) and their application to Mr Hindrodjojo’s position.
18. Pursuant to s 134(1) a discretionary power to cancel a business visa arises if the respondent is satisfied that the holder of the visa has not satisfied any one of the three matters set out in that sub-section. If Mr Hindrodjojo has not failed to satisfy any one of the three requirements then no power to cancel would arise. I must therefore, consider the matters specified in s 134(1).
19. In so doing I must have regard to evidence of circumstances that existed as at the date of cancellation although, as will be referred to below, I may look at evidence of activities and transactions that occurred after the date of cancellation of the visa to the extent that it is relevant to establish intentions or the likelihood of certain outcomes as at the date of cancellation.
20. Section 134(1)(a) of the Act requires Mr Hindrodjojo to have “obtained a substantial ownership interest in an eligible business in Australia”. Section 134(10) defines an “ownership interest” in relation to a business as meaning:
“… an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
Including such an interest held indirectly through one or more interposed companies, partnerships or trusts”
The same subsection defines an “eligible business” as “a business that the Minister reasonably believes is resulting 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.”
21. It is apparent that Mr Hindrodjojo did not acquire any form of ownership interest in Montoya until after the date of cancellation of his visa and, accordingly, his involvement with Montoya cannot assist him in the satisfaction of the requirements of s 134(1)(a).
22. In relation to Rubytown, the respondent concedes that Mr Hindrodjojo’s shareholding in that company represented a substantial ownership interest (paragraph 20 of the respondent’s Statement of Facts and Contentions). However, the respondent contends that Rubytown was not an “eligible business” for the purposes of the Act. That raises questions of whether Rubytown conducted a business at all and whether such business was an eligible business for the purposes of the Act.
23. The Act does not contain a definition of the word “business” but the Full Court of the Federal Court recently summarised the position (in the context of income tax legislation) as follows in Puzey v Commissioner of Taxation [2003] FCA FC 197 [per Hill and Carr JJ, with French J agreeing]:
“46. The question whether a person is carrying on a business is a conclusion to be drawn from all relevant facts and circumstances. There are some relevant propositions which can, however, be stated. First, as was said by Barwick CJ, in Fairway Estates Pty Ltd v Federal Commissioner of Taxation 70 ATC 4061 at 4069 and it is self-evident, every business must have a first transaction. And there may be a business, even if that business is small in scope: cf Thomas v Federal Commissioner of Taxation (1972-3) 46 ALJR 397 at 401 with Hope v Bathurst City Council (1980) 144 CLR 1 at 10. A person may carry on a business, notwithstanding that the person had some other activity, such as full time employment. It is not necessary in concluding that a business is carried on that the acts to be undertaken are acts of the person seeking to establish he or she is carrying on a business. So a person may appoint another to take the steps which constitute the business activity: Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 at 319 and, at least if the facts in Commissioner of Taxation v Lau at 218 involved a business, that case is another example.
47. It will be relevant in deciding whether a business is carried on that there is some repetition of acts and that the activities in question have “something of a permanent character”; Hope per Mason J at 8. What is required is that activities be engaged upon “on a continuous and repetitive basis”; Hope ibid at 9. However, perhaps not too much attention should be given to the concept of repetition where the activity is one, such a plantation operation, where the activity will continue over a relatively long period of time but where there will be significant periods of what may be referred to as inactivity. Business does not mean being busy.
48. In deciding whether or not a business is carried on courts have pointed to what have been called in the United Kingdom the “badges of trade,” indicia which, while no one of them will be determinative of whether a business is carried on, collectively will demonstrate a business. These include the profit motive (although a non profit company may still carry on a business), acting in a business like way, (although many businesses may be found which operate in a non-business like way), the keeping of books of account and records, (although the fact that there are none will not necessitate the conclusion that a business is not carried on) and repetition (although a fixed term project may still be a business).”
24. I am satisfied that Rubytown was incorporated for the express purpose of raising a substantial amount of capital that was to be invested in major Australian commercial ventures. It obtained Australian business and tax file numbers and maintained books of account and prepared periodic financial statements. The form of its investments changed from time to time, changing from a unit holder in the trust developing the Paragon Apartments to becoming the owner of apartments with a guaranteed rate of return. At the time of the cancellation decision and subsequently, it was a business of substance with many of the indicia of a business. It owned apartments valued (at cost) of $2.3 million and had borrowings of approximately $1.15 million. In Puzey the Full Court in the passage quoted above referred to projects that may be for a fixed term or that might continue over a relatively long period of time with significant periods of apparent inactivity. Some of those attributes may be said to apply to Rubytown, but is in my opinion no less of a business for that reason. Accordingly, I conclude that Rubytown did conduct a business for the purposes of the Act and the next question to be answered is whether that business was an eligible business for the purposes of s 134(1)(a) of the Act, having regard to the factors set out in s 134(10) and referred to at [20] above.
25. The respondent’s Department has issued policy instructions concerning business visas known as “Migration Series Instruction 133” (“MSI 133”). Paragraph 4.3.2 of MSI 133 refers to eligibility being related to “the achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.” Paragraph 4.3.3 of MSI 133 states that the eligible business definition “… may be met by a business whose activities come within the definition although the business may be small. There is no requirement in law for the activities to be on any particular scale; it is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives.” Such statements of opinion are not binding on me, but in my opinion they represent fairly the correct interpretation of s134(10) in this context.
26. Significantly, in my opinion, the provisions of s134(10) and MSI 133 indicate that no particular scale of the specified outcomes is required. In my opinion that does not mean, however, that a business (genuinely so called) that achieved one of the outcomes in a purely nominal way - such as a single export of nominal value – would be sufficient.
27. The applicant contended that Rubytown’s activities had achieved the outcomes specified in paragraphs (a), (b), (c) and (f) of s 134(10). There is no evidence before me that would enable a conclusion that outcome (c) would result from Rubytown’s investments in Paragon Apartments, or that there would be the development of any business links with the international market in accordance with outcome (a). On the other hand, although there is no direct evidence before me to this effect, I am prepared to conclude that a property development project involving a capital cost of at least $30 million would reasonably be expected to result, directly or indirectly, in the creation or maintenance of employment in Australia and an increase in commercial activity in the building, construction and related sectors of the Australian economy. For that reason I am prepared to conclude that Rubytown’s business of investing in such a project was an eligible business for the purposes of ss 134(1)(a) of the Act.
28. It was also contended on behalf of Mr Hindrodjojo that the various investments made by him in Australia – in Rubytown, in the other projects referred to in [12] and [13] above, and in Montoya – taken together would constitute an investment business carried on by him as a sole proprietor.
29. In his oral submissions on behalf of the respondent Mr Blades appeared to accept that contention would be correct if Mr Hindrodjojo had carried out those investment activities from a base in Australia rather than one in Indonesia. Mr Blades did not accept explicitly that the investment activities would constitute an eligible business (for the purposes of s 134(1)(a)) but contended that the fact they were undertaken from Indonesia – because Mr Hindrodjojo had spent only 55 days in Australia prior to the cancellation decision – meant that he could not have been involved in Australia in the day to day senior management of such a business.
30. On Mr Hindrodjojo’s evidence I find that he made decisions about the various investments he made in Australia on the basis of his own experience and knowledge, advice from people such as Mr Hoon, discussions with Indonesian friends and work colleagues, and discussions with his other Australian contacts. There is no evidence that his various Australian investments were aggregated into some form of investment vehicle – although that is not essential – or that the various assets owned and income generated were consolidated into periodic financial statements in this country that showed the full extent of Mr Hindrodjojo’s investment activities in Australia.
31. My conclusion is that if Mr Hindrodjojo was conducting a personal business as an investor it was an Indonesian business rather than an Australian business. As such it could not be a business, or an eligible business, “in Australia”, as is required by s 134(1)(a) of the Act.
32. However, because I have concluded above that Mr Hindrodjojo’s interest in Rubytown satisfied the requirements of s 134(1)(a), the power to cancel his visa did not arise because of a failure to satisfy that paragraph. I therefore turn to consider whether Mr Hindrodjojo satisfied s 134(1) (b), which requires that Mr Hindrodjojo must be “utilising … his skills in actively participating at a senior level in the day-to-day management” of the eligible business of Rubytown.
33. It was not in dispute that throughout the relevant period Mr Hindrodjojo was one of the most senior executives in PTGG, a large, publicly listed, company in Indonesia. His evidence was that he worked at that employment at least 8 hours each day, five days per week.
34. It was also not in dispute from the evidence given by Mr Hindrodjojo and Mr Hoon that the day to day management of Rubytown’s investment activities in Australia were delegated to Mr Hoon. Because of the limited English of a number of the investors in Rubytown (including Mr Hindrodjojo), Mr Hoon initially dealt mainly with Mr Wibowo who passed onto the others reports from Mr Hoon about progress in the development of the Paragon Apartments. After Mr Wibowo died in 2002 Mr Hoon had dealt with one of the other shareholders. Mr Hoon said that because of the language difficulties conversing with Mr Hindrodjojo was difficult. Mr Hindrodjojo said he visited Mr Hoon at his office on most of the occasions he had visited Perth but otherwise his main contact was through other shareholders.
35. However, Mr Hindrodjojo said that the investors in Rubytown, who were all senior executives in PTGG, frequently discussed the affairs of Rubytown over lunch or other gatherings of work colleagues, including on the golf course. In that way he was able to keep himself informed of the developments and to contribute to the discussions that occurred and the decisions that had to be made as issues arose concerning Rubytown – particularly when it was necessary to renegotiate the forms of investment as detailed in [10] and [11] above and decisions that had to be made about borrowing money when the eight apartments were purchased. Overall, Mr Hindrodjojo thought that he might spend no more than 5 hours each week working on matters concerning his Australian investments, including examining new proposals for investment. On balance, I find that the amount of time that he spent on the affairs of Rubytown during the relevant period would have averaged about five hours per week. Despite his evidence of that limited involvement in the management of Rubytown, Mr Hindrodjojo gave evidence that he had not understood at either the time of applying for his visa or at the time it was granted, that there was an expectation that he be personally actively involved in the management of an Australian business. His evidence (which I accept) was that he had understood that his obligation was only to make financial investments in Australian businesses, rather than be personally involved in the management of them.
36. Because of the limited amount of time that Mr Hindrodjojo spent in Australia prior to the cancellation of his visa, there was considerable discussion at the hearing as to whether or not the Act required the involvement in the day to day management of the business to actually occur in Australia. In Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77 at [35] I said that modern means of travel and communication permit a business to be managed and strategically directed from almost anywhere in the world and that the emphasis in section 134(1)(b) is on senior management rather than day to day administrative tasks under the direction of a senior manager. I agreed with the comments of Member Carstairs in Re Lau v Minister for Immigration and Multicultural and Ethnic Affairs [2002] AATA 703 that management input at a senior level by an experienced business person will often be intangible and may involve ideas and planning, as much as researching products, securing orders and suppliers and transacting shipping.
37. I agree also with the comments of Senior Member Dwyer and Member McLean in Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [95] that a business may be successfully run without necessarily requiring daily management. What is required is that there be sufficient management for the needs of that specific business.
38. In relation to whether the Act requires that the visa holder’s activities in the senior management of a business must occur in Australia, for the reasons that I gave in Re Jo [at 33] I do not consider that the Act requires the participation in the management of the business to occur in Australia: see also Re Yam at [101].
39. On the evidence in this case I consider that the management needs of Rubytown were, for extended periods of time, limited and that Mr Hoon attended to the majority of day to day administration of the company and the implementation of management decisions. However, I accept that the shareholders of the company were on occasions called upon to make decisions (with Mr Hoon’s advice). There is only limited evidence of Mr Hindrodjojo’s participation at a senior level in the day to day management of Rubytown but I accept his evidence that he did participate in the relatively small amounts of decision making that were required from time to time. On balance I am satisfied on the evidence that his participation in the management of Rubytown was just sufficient to satisfy the requirements of s134(1)(b).
40. Section 134(1)(c) requires Mr Hindrodjojo’s to intend to continue to hold his ownership interest in an eligible business and to continue to be involved in the senior management of it. I accept Mr Hindrodjojo’s evidence that he intended to retain his ownership interest in Rubytown and, although he initially did have a misunderstanding about the full extent of his obligations regarding involvement in the management of Australian businesses, I also accept that he intended to continue to be involved in the management of Rubytown in the way that he had up until the time of the cancellation decision. In the circumstances I am satisfied that Mr Hindrodjojo did intend to continue to do the things required of him by s 134(1) and he did not fail to satisfy s134(1)(c).
41. However, because of the limited nature of Mr Hindrodjojo involvement in the management of Rubytown, I have also considered the question of whether or not Mr Hindrodjojo would satisfy the requirements of s134(2) of the Act, a consequence of which would be that the discretionary power to cancel Mr Hindrodjojo’s visa under s 134(1) (had it arisen) must not be exercised. Section 134(2) of the Act relevantly provides that the visa held by a person such as Mr Hindrodjojo must not be cancelled if the holder has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, to utilise his skills in actively participating at a senior level in the day to day management of the business, and intends to continue to make such genuine efforts.
42. As noted above, Mr Hindrodjojo gave evidence that he initially misunderstood the extent of his obligations. He said (and I accept his evidence) that at no time did he understand that there was an expectation that he would physically reside for most of his time in Australia or that he had to be actively involved in Australia in the management of a business. His evidence was that at the time of his application he was a senior executive in a large corporation and that his application for a visa had been made with those of 13 other senior executives from the same company. It was made clear to the respondent’s Department in those applications and the submissions from a migration agent that accompanied them, that these senior executives intended to continue to live and work in Indonesia for PTGG and that they would become involved in businesses by investing in them, although the nature of those businesses could not be specified at the time. I accept that evidence, supported as it is by a letter dated 17 January 1997 (which forms part of T26), in which a consultant submitted the applications of Mr Hindrodjojo and his 13 colleagues.
43. Despite that incorrect understanding, I am satisfied from his evidence that Mr Hindrodjojo (and his work colleagues) actively pursued investment opportunities in Australia with the assistance of expert advisors such as Mr Hoon and Mr Harradine. The investments in Rubytown and the development projects were the consequence of advice from Mr Hoon.
44. Mr Harradine gave evidence that he had first met Mr Hindrodjojo in late 2000 or early 2001 and had a number of discussions with him about Australian business opportunities generally prior to March 2002. He said that in March 2002 Mr Hindrodjojo, Mr Runkat, Mr Mintarya and some other work colleagues had told him that they had been dealing with a Mr Short in relation to the possibility of investing in a paint chip business in Australia and asked him (i.e. Mr Harradine) to give advice about that possibility and to obtain a company (which ultimately became Montoya) in anticipation of a possible acquisition. Over a period of some months he investigated the business concerned and had dealt with Mr Hindrodjojo and his colleagues. Eventually, he gave his advice not to proceed with the purchase of Aipac.
45. Mr Short gave evidence that he is the managing director of Aipac and met Mr Hindrodjojo through Mr Rungkat in 1999. They had been helpful in arranging for the sale of some of his paint products in Indonesia after that time. He said that some time in the year 2000 it had become apparent that Aipac needed more capital to expand its business to meet the demand for new paint chip products. He had visited Indonesia in January 2001 to find new orders for the paint chip products but also to explore the possibilities of obtaining financial investment in Aipac from Mr Rungkat, Mr Hindrodjojo and their colleagues.
46. In June 2001 and the early months of 2002 he had continued to have discussions with Mr Rungkat and Mr Hindrodjojo about investing in Aipac. It was early in 2002 that they informed him that they would have Mr Harradine contact him and undertake a due diligence examination of Aipac with a view to investing in it.
47. Section 134(3) of the Act sets out a number of factors that may be taken into account in determining whether a person has made a genuine effort to achieve the matters specified in section 134(2). On the evidence before me it is not possible to say that Mr Hindrodjojo has personally developed business proposals in relation to Australian businesses, but he has clearly examined many proposals submitted to him by advisors and consultants, in conjunction with his fellow investors in Indonesia. He has undertaken research (using advisors such as Mr Hoon and Mr Harradine) about investing in businesses such as Aipac and he has invested jointly with others in Rubytown and Montoya. Mr Hindrodjojo has transferred to Australia in excess of $400,000 for investment in various projects and has, through Rubytown, become involved in the borrowing of a substantial amount of money to partly fund the purchase of eight apartments. Those apartments generate rental income in excess of $100,000 per annum and in the year to June 2003 Montoya had export sales of approximately $250,000.
48. I am satisfied that discussions regarding possible investment in Aipac commenced as early as 2001 and the due diligence that was undertaken in 2002 was the consequence of those earlier discussions. Although Mr Hindrojojo had not obtained an ownership interest in Montoya prior to the cancellation decision, I am satisfied that he and some of his work colleagues had considered the possibility of making an investment in Aipac prior to the cancellation decision and the efforts that were made during 2002 after the cancellation to investigate that possibility were a consequence of those prior developments.
49. Having regard to all the various forms of investment that Mr Hindrodjojo made in Australia, together with his efforts to manage those investments, enable me to conclude, on balance, that as at the time of cancellation of his decision he had made genuine efforts to obtain an ownership interest in Australian businesses; that he had made genuine efforts to be involved in senior decision making in relation to those businesses; and he intended to continue to do so - as evidenced by the decision-making regarding how Rubytown would invest in future and the export activities undertaken by Montoya after the cancellation. Although it is not necessary for me to determine the point because I have concluded that the power to cancel his visa did not arise under section 134(1), had it been necessary for me to do so I would have concluded that Mr Hindrodjojo did make the genuine efforts required by section 134(2) and in those circumstances his visa would not have been able to be cancelled.
50. Because, in my opinion, the power to cancel Mr Hindrodjojo’s visa under s134(1) of the Act did not arise, the power to cancel the visas held by the other applicants under s134 (4) of the Act also did not arise. It is not, therefore, necessary for me to consider whether s 134(5) would be applicable, which provides that the visa of a person must not be cancelled under s 134(4) if the cancellation would result in extreme hardship to the person. I heard considerable oral evidence from the four applicants other than Mr Hindrodjojo in relation to the issue of extreme hardship but in the circumstances it is not necessary for me to set out that evidence or to make findings in relation to it.
51. For the reasons set out above my decision is that the power to cancel Mr Hindrodjojo’s visa did not arise under s134 (1) of the Act and the power to cancel the visas of the other 4 applicants did not arise under s134 (4) of the Act. Accordingly, the decisions made on 1 February 2002 to cancel the visas held by all five applicants are set aside.
I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member
Signed: ............(sgd V Wong)....................................
AssociateDate/s of Hearing 25-26 September 2003
Date of Decision 7 July 2004
Counsel for the Applicant Mr S Walker
Solicitor for the Applicant Australian Visa & Migration Services Pty Ltd
Counsel for the Respondent Mr D Blades
Solicitor for the Respondent Australian Government Solicitor
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