Hingston Surgical Limited and Anor and Minister for Infrastructure, Transport, Regional Development and Local Government
[2008] AATA 455
•2 June 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 455
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2008/0227
GENERAL ADMINISTRATIVE DIVISION )
ReHingston Surgical Limited
First Applicant
AndGuy Richard Hingston
Second Applicant
AndMinister for Infrastructure, Transport, Regional Development and Local Government
Respondent
DECISION
TribunalProfessor GD Walker, Deputy President
Date2 June 2008
PlaceSydney
DecisionThe decision under review made on 21 December 2007 is set aside and in substitution, I decide that the importation of the Porsche 911 is approved.
...................[sgd]...........................
Professor GD Walker
Deputy President
CATCHWORDS – Motor vehicle importation – single vehicle – bona fide personal possession - discretion – hardship or unfairness – decision under review is set aside.
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RELEVANT ACT/S
Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act): ss 30, 37
Motor Vehicles Standards Act 1989 (the Act):ss 3, 18, 19, 20
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CITATIONS
Re Marra and Minister for Transport and Regional Services [2003] AATA 323
Re Trajkovski and Department of Transport and Regional Services [2000] AATA 1073
Re Da Silva and Department of Transport and Regional Services [2004] AATA 1355
Re Brassington and Minister for Transport and Regional Services [2006] AATA 724
Re Sottosanti and Secretary, Department of Social Security (1988) 14 ALD 601
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AUTHORITIES
Motor Vehicle Standards Regulations 1989: r 11, 12, 13
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REASONS FOR DECISION
2 June 2008
Professor GD Walker, Deputy President
Basic facts
1. In November 2002, the second applicant Dr Guy Hingston, who then lived in Masterton, New Zealand, placed an order with the Porsche factory in Germany through a Wellington Porsche dealership, Team European Limited (Team European), for a Porsche 911. He was able to order the extras and accessories that he wished to have, and accordingly requested that the car be coloured white, have automatic transmission and no sunroof.
2. Dr Hingston is the sole director of Hingston Surgical Limited (the company), the first applicant in these proceedings, which was incorporated in New Zealand on 20 August 1999. The sole shareholder in the company is the Hingston Family Trust the trust), of which Dr Hingston, his wife and their five children are the sole beneficiaries.
3. On or about 19 May 2003, the first applicant took delivery of the Porsche, paying a purchase price of NZ$317,610. Dr Hingston used the car in his work to travel to hospitals in Masterton and Wellington.
4. On 1 October 2003 Dr Hingston commenced work at the base hospital at Port Macquarie, New South Wales, as a breast cancer surgeon. Breast cancer surgery is recognised by the Royal Australian College of Surgeons as a specialist branch of general surgery. From October 2003 to December 2003, he returned to New Zealand several times to visit his family and perform surgery while gradually closing down his New Zealand practice.
5. He purchased a house in Port Macquarie in December 2003 and in January 2004 his wife and children travelled to Port Macquarie to take up residence there. Dr Hingston and his family are now Australian citizens.
6. In May 2004 Dr Hingston applied in his own name for approval to import the car (Exhibit R2, attachment A) and that application was refused. On 27 November 2007, the first applicant applied for approval to import the car. Dr Hingston signed the application (T p5-7).
7. Since February 2004 the Porsche has been for sale with Team European in Wellington, being prominently displayed in the front of their showroom. No offers have been received at the asking price of NZ$175,000, although Team European is New Zealand's leading Porsche dealer.
8. On 21 December 2007, the Administrator of Vehicle Standards refused the first applicant’s application for approval to import the vehicle.
9. In the application to this tribunal for review of that decision lodged on 17 March 2007, the applicant was the company. At the hearing Dr Hingston applied to be substituted as applicant. Instead the tribunal directed that Dr Hingston be joined as an applicant pursuant to s 30(1A) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), the respondent neither opposing nor supporting that course.
10. At the hearing, Dr Hingston appeared in person, while the respondent was represented by Mr Michael Palfrey, solicitor of Clayton Utz. The documents before the tribunal comprised the documents produced pursuant to s 37 of the AAT Act (the T documents), taken into evidence as Exhibit R1, together with the other documents tendered by the parties at the hearing. The applicant gave oral evidence in person.
Applicable legislation
11. The main object of the Motor Vehicles Standards Act 1989 (the Act), with respect to new vehicles, is to achieve uniform vehicle standards which apply to road vehicles when they begin to be used in transport in Australia and with respect to used vehicles, to regulate the first supply to the market (see s 3 of the Act). Nonstandard vehicles are vehicles that do not comply with the National Standards or the Australian Design Rules (ADRs). An identification plate affixed to a motor vehicle establishes that the vehicle complies with the National Standards.
12. The importation of non-standard motor vehicles is prohibited under s 18 of the Act, which relevantly provides:
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(1)Subject to sections 19 and 20, a person must not import a road vehicle that:
(a)is nonstandard; or
(b)does not have an identification plate.
Penalty: 120 penalty units.
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13. Section 19 of the Act provides that a person may import a non-standard road vehicle or a road vehicle that does not have an identification plate, with the written approval of the minister.
14. Section 20 of the Act permits a person to import a non-standard road vehicle or a road vehicle that does not have an identification plate in prescribed circumstances. The exceptions, or prescribed circumstances, are set out in the Motor Vehicle Standards Regulations 1989 (the regulations) specifically at regulation 12 and 13, which set out the circumstances in which the minister “must” give approval.
15. The exception at regulation 12 sets out the following prescribed circumstances:
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The Minister must approve an application to import a road vehicle that complies with the national standards but does not have an identification plate if:
(a)the vehicle complied with the national standards when it was first manufactured and delivered for use in transport; and
(b)the applicant is of an age that entitles him or her to hold a licence or a permit to drive a road vehicle of that type; and
(c)the applicant has not imported a road vehicle within the year ending on the day on which the vehicle in respect of which the application is made is landed in Australia.
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16. The exception at regulation 13 sets out the following prescribed circumstances:
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The Minister must approve an application to import a nonstandard road vehicle or a road vehicle that does not have an identification plate if:
(a)the vehicle has been owned and used by the applicant for a continuous period of at least:
(i)for a vehicle owned by the applicant before 9 May 2000 -- 3 months; or
(ii)in any other case – 12 months; and
(b)at the time the vehicle is imported, the applicant is:
(i)an Australian citizen or an Australian permanent resident; or
(ii)a person who has applied to become an Australian citizen or an Australian permanent resident; and
(c)the applicant is of an age that entitles him or her to hold a licence or a permit to drive a road vehicle of that type; and
(d)the applicant undertakes to comply with any requirements as to road safety that are imposed in respect of the vehicle by the Minister; and
(e)the applicant has not imported a road vehicle owned by him within the year ending on the day on which the vehicle in respect of which the application is made is landed in Australia.
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17. Section 19 of the Act, together with regulation 11, confer on the minister a general discretion to approve an application to import a non-standard road vehicle or a road vehicle that does not have an identification plate. That approval may be given subject to conditions specified in the instrument of approval. The wording of regulation 11 is general and neither the Act nor the regulations set out specific factors to be taken into account in applying it.
18. Regulation 11 provides that:
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(1)The Minister may approve an application to import a nonstandard road vehicle or a road vehicle that does not have an identification plate.
(2)An approval may be given subject to conditions specified in the instrument of approval.
(3)Without limiting the generality of subregulation (2), the Minister may require that a plate in such form and containing such information as the Minister determines be placed on the vehicle.
(4)An approval must be given by signed instrument.
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Issue
19. The issue in contention between the parties is whether the tribunal should exercise the discretion in regulation 11 to permit the applicants or either of them to import the Porsche notwithstanding that it does not have an identification plate.
Applicant’s evidence
20. In his written statement dated 26 May 2008 (Exhibit A1) and oral evidence Dr Hingston explained that in July 2003 he became aware of an appointment as a breast cancer surgeon on offer at Port Macquarie Base Hospital and Port Macquarie Private Hospital. He attended an interview for the position in Port Macquarie in September 2003 and was formally offered the position, commencing duties on 1 October 2003. He purchased a house in Port Macquarie and his family joined him in January 2004.
21. Until 2006 he had travelled back to New Zealand periodically to perform operations.
22. He is the sole director of the family company and is in charge of the direction of the family trust, making all decisions for it. The company is no longer transacting business as its sole source of revenue consisted of professional fees from Dr Hingston’s New Zealand surgical practice. As he is guarantor of the company’s debts, Dr Hingston is continuing to meet the loan repayments of NZ$5,056.22 per month, as well as paying for continued registration and insurance for the car. On occasion he returns to New Zealand, and during his stays, by arrangement with Team European drives the vehicle in Masterton.
23. Dr Hingston said that country centres such as Port Macquarie have difficulty attracting experienced medical practitioners. He now treats over 100 new patients with breast cancer each year in Port Macquarie, and also provides acute general surgical services at the base hospital, being rostered for that purpose about one week in six. He also practices at the Kempsey, Lismore and Wauchope district hospitals and St Vincent’s Hospital, Lismore. He is a senior lecturer at the University of New South Wales Rural School of Health, director of the North Coast Breast Centre and a reserve Squadron Leader as a surgeon in 26 Squadron, RAAF.
24. Dr Hingston performs most of the breast cancer surgery in the district, although some general surgeons undertake some work in that field. Although Port Macquarie is an attractive area, it is difficult to obtain resident surgeons to practise there in any field. Recently an advertisement for a liver and gall bladder specialist surgeon elicited only one reply from a qualified person.
25. He conceded that if he were still in New Zealand he would still be meeting the loan repayments from his income, directly or indirectly, but had been compelled to buy a new car for his practice here, a Toyota Prada. His wife had a car when they were living in New Zealand, and also has one here. Being no longer resident in New Zealand, he cannot claim depreciation on the Porsche or insurance and registration costs as tax deductions. Being required to meet car repayments of NZ$5,000 per months without being able to use it was causing him hardship. If he were permitted to import the Porsche, he would sell the Toyota.
26. He had tried other means of selling the car, listing it for several months through another Porsche dealership, but received no offers. The market seemed to be very narrow for that type of high-end car in New Zealand and the options he had chosen (automatic transmission, white duco and no sunroof) were not popular with most prospective Porsche buyers.
27. At the time he accepted the Port Macquarie appointment he made no inquiries about importing the car into Australia. New Zealand has no regulatory scheme comparable to that under the Act and benefits from that state of affairs. The manager of Port Macquarie Base Hospital, Mr (or Dr) Walsh, had told him he would be able to import his personal possessions and he had had no reason to consider that there would be any problem about importing the Porsche. It was for that reason that he did not inquire further.
Respondent’s submissions
28. On behalf of the respondent Mr Palfrey adopted the submissions in the respondent’s statement of facts and contentions (Exhibit R2) and added that the problem was that the car had no compliance plate. It could also be nonstandard and could not be tested and examined for compliance while in New Zealand. It would have to be brought to Australia and tested here. If the statutory discretion were exercised in the applicant’s favour, a compliance plate could then be fitted even if the car were nonstandard. That would be consistent with the policy of permitting the importation of vehicles manufactured before 1989, although they would certainly not comply with the ADRs.
29. As regards the exercise of the discretion, there is no policy direction in existence. Some indication of the legislation’s policy objective can be found in s 3 of the Act, which states that the Act’s objects are to achieve uniform vehicle standards for new vehicles and to regulate the “first supply to the market of used imported vehicles”. A more comprehensive policy statement could be found in the 1989 second reading speech (Exhibit R2, attachment B), while the information brochure Importing vehicles to Australia (VSB10) 2008 (Exhibit R2, attachment C) discussed personal imports.
30. There was a consensus in the cases that the discretion should be exercised only in exceptional circumstances, where the decision would otherwise lead to an unjust or unfair result, as in Re Marra and Minister for Transport and Regional Services [2003] AATA 323, in which the applicant had been given incorrect information by the department and had incurred importation expenses as a result. In this case, however, the applicant made no inquiries about the matter. The costs he had incurred were part of the normal costs of moving from one country to another and were not sufficient. There was no substantial evidence that the applicant would suffer personal financial hardships.
31. In Re Trajkovski and Department of Transport and Regional Services [2000] AATA 1073, similar arguments had been raised but were rejected by the tribunal, which added that even if there had been evidence to support them, there were other reasons for not exercising the discretion in the applicant’s favour. Importation should only be permitted in exceptional cases. Trajkovski had been treated as a leading authority for years.
32. A somewhat different approach had been followed in Re Da Silva and Department of Transport and Regional Services [2004] AATA 1355, the tribunal preferred not to attempt to give meaning to the word “exceptional”, but instead took the view that (at para 55):
… Rather, I believe that it is sufficient to pose the question in terms of whether, having regard to the policy and objectives of the Act and the regulations, and to all the relevant circumstances of the applicant, it is appropriate to exercise the discretionary power in favour of the applicant.
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33. The respondent supported the interpretation adopted in Re Brassington and Minister for Transport and Regional Services [2006] AATA 724, where the tribunal had this to say (at para 27):
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In my opinion, Member Allan was not suggesting that circumstances in which it was appropriate to exercise the discretion need not necessarily be exceptional. Rather, he was minded to look at the policy and objectives of the Act, the Regulations and to all the relevant circumstances of an applicant in order to determine whether that discretion ought to be exercised. The fact that the object of the Act in relation to used vehicles is to regulate the first supply to the market, and the exercise of discretion will only be resorted to where an Applicant is unable to rely on any of the exceptions set out in regs 11 – 18, would, of necessity, result in the circumstances being exceptional. In any event, I am satisfied that I should approach the exercise of discretion in this case on the same basis as Member Allan did in Da Silva; where he said at paragraph 59:
In my opinion, the exercise of the discretion in r 11 should be approached on the basis that if there would be some element of unfairness or injustice to the applicant if approval were not granted, and the grant of approval would not undermine or frustrate the policy and objects of the legislative scheme, then the discretion should be exercised in the applicant’s favour. The totality of the relevant circumstances must be considered …
This statement, in effect, follows what was said by Deputy President Hotop in Marra.
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34. In the present case there were no grounds for exercising the discretion favourably because any inconvenience or financial hardship was the result of the applicant’s own actions in buying a car with particular features that made it difficult to sell. Further, there was no evidence of financial hardship to Dr Hingston and his situation in that regard was far removed from that normally regarded as constituting hardship in administrative decision-making.
35. The respondent did not dispute Dr Hingston’s contribution to health care, but did not consider it relevant to the issue. A surgeon did not need this particular type of car for his work. To all intents and purposes the Porsche was his bona fide personal possession, in the sense that he was not seeking to import it for any purpose other than his own use – he was not seeking to sell it, for example – but that was not sufficient. The fact that at the time the first applicant purchased the car Dr Hingston had no intention of moving to Australia was admitted, but irrelevant.
Consideration
36. The sole issue before the tribunal is the exercise of the discretion in regulation 11. As Deputy President Purvis observed in Trajkovski, the decision to be made is not to be arbitrary but is to be consistent with the policy sought to be achieved by the legislation, taking into consideration the matters relied on by the applicant (at para 35).
37. That case resembled the present one in a number of respects, as Mr Palfrey pointed out, notably in that it concerned a Porsche 911 and that the applicant had incurred considerable expense in endeavouring to import it. There was a material distinction, however. In that case, as Purvis DP noted:
… It is apparent from [the submissions] that measurable reservations are held as to the bona fides of the Applicant himself, the existence of a vehicle as described and the condition of such vehicle assuming it is in existence. … Each of them if shown to exist would cause a decision maker to have reservations as to accepting the situation as propounded and would bear upon the weight if any to be given to the matters relied upon by an applicant in seeking the exercise of a discretion (para 36).
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38. There was also an adverse history pertaining to the importation of Porsche vehicles in 1994 and 1995 (para 41). Such reservations do not exist in the present case.
39. In Da Silva Senior Member Allen said it was sufficient to pose the question regarding the discretion’s exercise in terms of whether, having regard to the policy and objectives of the Act and the regulations, and to all the relevant circumstances of the applicant, it is appropriate to exercise the discretionary power in favour of the applicant. The exercise of the discretion should be approached on the basis that if there would be some element of unfairness or injustice to the applicant if approval were not granted, and approval would not undermine or frustrate the policy and objects of the legislative scheme, then the discretion should be exercised in the applicant's favour (at para 59). Allen SM accepted the applicant’s contention that there were a number of factors justifying a favourable exercise of the discretion:
§the application related to a single vehicle,
§the applicant had received incorrect advice from a third party (a shipping agent) and had not simply taken his chances on being able to import it,
§he was a bona fide migrant and the car formed part of his personal belongings when he migrated to Australia and he was not seeking to profit by selling it,
§he had incurred considerable expense in shipping the car to Australia and would incur unusual costs in selling it, as he would have to ship it back to the United Kingdom,
§the importation of one vehicle in those circumstances would not undermine or frustrate the policy and objectives of the legislative scheme (at paras 56, 60).
40. The applicant in Brassington was a bona fide returning Australian citizen who was seeking to import a BMW for his personal use but had not used the car overseas for the requisite 12 months. The tribunal declined to exercise the discretion in his favour. There are material differences between the applicant’s circumstances in Brassington and those in the present case, however. In Brassington the applicant while in the United Kingdom made no inquiries whatsoever about the requirements for importing the car into Australia and simply assumed, without good reason, that he would be able to do so. Further, the car was still in England and did not need to be shipped back there for the purposes of sale. While disposing of it would involve the applicant in some costs, they were not such as to result in any kind of hardship. The car itself appeared to be a standard BMW 316 iSE and would present no particular problems for resale, especially in a large market such as the United Kingdom, as opposed to the limited market for Porsche vehicles in New Zealand.
41. In Da Silva the tribunal found that affirming the decision under review would result in unfairness or injustice, although there was no suggestion (nor is there in the present case) that the applicant was subjected to any specifically unfair or unjustly discriminatory treatment by the respondent. It was the circumstances that made the situation unfair.
42. All the factors identified as material for a favourable exercise of the discretion in Da Silva are present in the instant case. It is clear that the tribunal did not think it necessary to establish severe financial hardship in the sense in which that phrase is used in social security law, as in Re Sottosanti and Secretary, Department of Social Security (1988) 14 ALD 601. The existence of substantial expense and inconvenience was sufficient.
43. Dr Hingston’s New Zealand accountants, Horwath Rutherfords Limited, stated that Dr Hingston had experienced major financial losses totalling NZ$190,713 over three years caused by holding the vehicle without the income to offset its depreciation and financing costs, “a situation that is totally unsustainable”. Dr Hingston used to pay his accounts regularly, but over the last three years his payments had become very late. He had defaulted in his repayments to the Bank of New Zealand and owed his accountants over $10,000. “It is our opinion that Mr Hingston is suffering significant financial hardship. It is also our opinion that this could be simply resolved if he could import his car to Australia” (Exhibit A1, attachment G).
44. Although by continuing the monthly loan repayments Dr Hingston is increasing his equity in the car, it is apparent that he would only be able to sell it at a distress price that would not recoup his capital outlays. A large proportion of the repayments would thus be lost. Dr Hingston has defaulted on his loan repayments, owes a large sum in professional fees and said that because of his financial situation he was compelled to appear in person, although he had engaged professional representation at earlier stages of the application. It is clear that he is suffering real financial embarrassment, besides losing the use of his car.
45. A further factor present in the instant case is that when he purchased the car, Dr Hingston had no idea that he would be moving to Australia and consequently had no reason to ensure that any options he ordered would not make the car more difficult to sell. To that extent his predicament cannot be described as resulting from his own choices.
46. Like the applicant in Da Silva, Dr Hingston received incorrect advice from a third person; not from the department as in Marra, but from a person holding an official position, the manager of Port Macquarie Base Hospital. Health care professionals today are extremely mobile, not least between Australia and New Zealand, and it was not unreasonable for him to think that someone in the manager’s position would be likely to know if there were any difficulties about importing cars, whether from personal experience in recruiting New Zealand staff or from professional discussions with homologous administrators of other hospitals.
47. If he had known the true position at the outset, he might, for example, have been able to negotiate an arrangement whereby he continued to live in New Zealand for a further nine months or so, coming to Port Macquarie periodically to perform specialist surgery. He might then have qualified to import the car without difficulty.
48. The present case thus embodies hardship or unfairness factors that have been recognised in earlier cases together with some factors of its own. On the other hand, it does not show any of the negative factors referred to in cases in which the discretion has not been exercised in favour of the applicant, such as possible mala fides or sharp practice (as in Trajkovski) or the unexplained failure to make any enquiries (as in Brassington).
49. The additional relevant circumstances include experiencing unsustainable financial losses and the fact that when he arranged for the car’s purchase he had no reason to think he would be moving to Australia.
50. It is necessary, however, to balance those factors against the policy and objectives of the Act and the regulations. There is no policy direction on the exercise of the discretion in existence, but the legislation’s objectives are stated in s 3 of the Act as:
(a)to achieve uniform vehicle standards to apply to new vehicles when they begin to be used in transport in Australia; and
(b)to regulate the first supply to the market of used imported vehicles.
51. Thus it is s 3(b) that applies to used cars. How the supply is to be regulated is elaborated in the second reading speech on 26 May 1989, in which the minister explained that the bill aimed to enable the federal government to “establish and apply nationally uniform standards for motor vehicle safety, gaseous and noise emissions and anti-theft devices”. He repeatedly stressed the overriding objectives of road safety and environmental protection:
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A vital component of the Federal Government’s road safety strategy is to make the motor vehicle as safe as possible.
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Alignment with international standards also means that the Australian community gets the benefit of the latest international safety standards.
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The Bill will ensure the maintenance of the levels of safety and environmental quality that the community rightfully expects. This represents a major improvement over the current situation, particularly concerning secondhand imported vehicles. … As honourable senators may be aware, there has been a rash of imports of substandard, secondhand motor vehicles. These do not have a number of major safety features.
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The Design Rules thus reflect the views of the Australian community regarding the level of safety and environmental quality they want.
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The safety and environmental standards which we have all come to expect will be enforced and those few unscrupulous operators who are looking to make a quick profit at the expense of our community’s safety will have to meet the same standards.
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52. Equally significant is that besides emphasising the Act’s safety and environmental goals, the second reading speech does not mention any other policy considerations, apart from noting that “Provision will also be made in the regulations for the importation of vehicles which are bona fide personal possessions. This will apply to migrants or Australian citizens returning from long periods overseas”.
53. The respondent did not suggest that a near-new Porsche, literally in showroom condition and certified for New Zealand roads, would compromise Australia’s safety or environmental standards in any way. Moreover, it is clear that Dr Hingston is a bona fide migrant, now an Australian citizen, who wishes to import the car for his personal use, not for sale. He has owned the car, through his family company, for 60 months and has been its only user. He still drives it periodically when he returns to New Zealand. There is consequently no reason to think that approving importation would undermine or compromise the legislative scheme or its underlying policy.
54. I find that the applicants have demonstrated sufficient grounds to warrant treating the case as an exception and consequently exercise the discretion in favour of permitting the applicants, or either of them, to import the car.
55. I therefore set aside the decision under review made on 21 December 2007 to refuse an application for approval to import the Porsche 911. In substitution, I decide that the importation of the Porsche 911 is approved.
I certify that the 55 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President
Signed: ...........................[sgd]...............................................
Renee Wallace, AssociateDate/s of Hearing: 27 May 2008
Date of Decision: 2 June 2008
Solicitor for the Applicant: Self-represented
Solicitor for the Respondent: Mr M Palfrey, Clayton Utz
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