Mulyadi and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 1019
•29 September 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1019
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2003/100
GENERAL ADMINISTRATIVE DIVISION ) Re RUDY MULYADI Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr M J Allen Date29 September 2004
PlacePerth
Decision The decision made on 25 February 2003 to cancel the applicant’s sub-class 127 Business Skills Visa is affirmed.
..............(sgd M J Allen)........................
Member
CATCHWORDS
IMMIGRATION – cancellation of Business Skills Visa – applicant undertook business activities in Australia in his own name and via a corporation – imports of goods into Australia organised in a way that realised a profit to a company in Indonesia associated with the applicant rather than in Australia – some transactions undertaken by the corporation did not involve the movement of goods into or out of Australia – finding that the business activities undertaken were part of a larger business carried on by the applicant in Indonesia – finding that the applicant had not acquired a substantial ownership interest in an eligible business in Australia – finding that the applicant had not made genuine efforts to acquire the required ownership interest or to be involved in the day-to-day management at a senior level of an Australian eligible business – no factors identified that would justify the exercise of a residual discretion to not cancel the applicant’s visa – cancellation decision affirmed.
Migration Act 1958 ss 134, 135,
Migration Regulations 1994 r 2.55
Migration Series Instruction 133
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Skoljarev v Australian Fisheries Management Authority [1995] 133 ALR 690
Tio v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 53
REASONS FOR DECISION
29 September 2004 Mr M J Allen 1.On 25 February 2003 a delegate of the respondent made decisions to cancel the subclass 127 Business Skills visa held by the applicant and also the visas held by his wife and three children. The applicant has applied for review of the decision made to cancel his visa but no applications have been made for review of the decisions affecting the other visa holders.
2.At the hearing of the matter the applicant was represented by his migration agent, Mr Yao, and the respondent was represented by Ms Davies, a solicitor with Blake Dawson Waldron.
3.The matter first came on for hearing in February 2004 and the applicant commenced giving oral evidence with the assistance of an interpreter in the Indonesian language. However, shortly after the commencement of that evidence I determined that there were communication difficulties between the applicant and the interpreter and I decided that the hearing would proceed no further at that stage. The hearing started again in May 2004 with none of the evidence given on the previous occasion taken into account. Oral evidence was given by the applicant and two witnesses called by him – Mr Jeong and Mr Barr. The Tribunal received into evidence the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 together with Exhibits A1 to A3 tendered by the applicant and Exhibits R1 and R2 tendered by the respondent. Exhibits A1 and A3 were both bundles of documents being, in the case of A1, numbered A1.1 to A1.406, and in the case of A3, being numbered A3.1 to A3.195.
Background
4.The applicant and his family members were granted visas in October 1999 and the applicant first arrived in Australia under his visa on 3 November 1999. In October 2001 the respondent’s department sent to the applicant a 24-month survey form and the applicant returned the completed form with supporting information in November 2001. By letters dated 23 October 2002 a delegate notified the applicant and the other visa holders of an intention to cancel their visas and in November 2002 the applicant responded with representations regarding the intended cancellation – but on 25 February 2003 decisions were made to cancel the visas.
Preliminary Issue
5.At the hearing of the matter it was contended on behalf of the applicant that the respondent had not complied with the statutory time table regarding cancellation of business visas as contained in s134 and s135 of the Migration Act 1958 (the Act). It was not clear at the time precisely how it was alleged the time requirements have not been complied with and I invited the applicant to make written submissions after the hearing regarding compliance. Written submissions were lodged but it remained unclear precisely how it was asserted that the respondent had not complied with the relevant statutory requirements. Nevertheless, I will review the extent of compliance with the relevant provisions of the Act in order to be certain that they were in fact complied with.
6.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 visa holder has not satisfied the requirements of s134(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 3 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 s135(1), must invite the visa holder to “… make representations to the Minister concerning the proposed cancellation within … 28 days after the notice is given …” if the notice is given in Australia. Section 135(4) relevantly provides that if “… the time specified in the notice [given under s 135(1)] ends after the end of the period …” of three years referred to in ss134(9) then the visa may only be cancelled within “… the period of 90 days commencing at the time specified in the notice …” given under s 135(1).
7.In the present case the first relevant date is 3 November 1999, that being the date of the applicant’s first arrival into Australia under the visa. The three year period specified in s 134(9) therefore ended on 2 November 2002. A notice of intention to cancel the applicant’s visa under s 135(1) was dated 23 October 2002 and was addressed to the applicant at an address in Australia that the applicant had previously notified to the department as his contact address (T8).
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 visas 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 dispatching it within 3 working days of the date of the document by prepaid post. Reg 2.55(7) relevantly provides that if a document has been given in that manner by being dispatched from a place in Australia to an address in Australia then the person to whom it was dispatched is taken to have received the document 7 working days (in the place of the address to which the document is sent) after the date of the document. The 7th working day after 23 October 2002 was 1 November 2002 and the applicant is taken to have received the notice of cancellation on that day. That date is prior to the expiry of the three-year period referred to above on 2 November 2002 and, consequently, the requirements of s 134(9) were complied with.
9.A period of 28 days after 1 November 2002 would end on 29 November 2002 and the notice of intention to cancel nominated 29 November 2002 as the date by which the applicant should make representations regarding the proposed cancellation. Accordingly, the requirements of s 135(1) of the Act were complied with.
10.Because the date specified in the notice given under s 135(1) i.e. 29 November 2002, fell after the end of the three- year period referred to in s 134(9), to satisfy the requirements of s 135(4) the cancellation decision had to be made prior to the end of the period of 90 days commencing on the day following the date specified in the s 135(1) notice. That 90-day period commenced on 30 November 2002 and ended on 27 February 2003: see Tio v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 53. The decision to cancel the applicant’s visa was in fact made on 22 February 2003 and hence the requirements of s 135(4) were complied with.
11.For the reasons set out above I am satisfied that the respondent complied with the various statutory requirements regarding the giving of notice contained in the Act and I must therefore consider the merits of the cancellation decision.
Did the Power to Cancel under s 134(1) Arise?
12.As noted above, 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.”
13.In order to satisfy the requirements of s 134(1)(a), the applicant relied upon his involvement in business transactions undertaken via two registered business names, Dovinia Trading (“Dovinia”), Excellent Trading (“Excellent”), and a company named Excellent Trading Pty Ltd (“Excellent Trading”).
14.The applicant gave oral evidence that he has been the owner and manager of a substantial business in Indonesia since the 1970s known as PD Sinar Selatan (“PDSS”). PDSS imports a variety of products, particularly household furniture and fittings, into Indonesia for sale in that country. The applicant said that PDSS had a turnover of in excess of one million Australian dollars per annum and employed about 20 people. The applicant’s evidence was that he spent a considerable part of each year travelling to other countries for the purpose of finding products for import into Indonesia. He said in a typical year he might spend approximately 2 months in Hong Kong, 4 months in China, 2 weeks in each of Singapore and Europe, and the rest of the time in Indonesia or Malaysia or (in recent years) in Australia.
15.Dovinia is a business name that was first registered in July 1998 by a Mr Jeong, with the nature of its business being described as “import export furniture crafts pottery hardware antiques linen” (T page 108). The applicant and Mr Jeong said that they have known each other for many years.
16.In April 1999 (ie. prior to the grant of the visa) the applicant and Mr Jeong entered into an agreement, an English language version of which appears at A1.109. The agreement relevantly provides that the applicant and Mr Jeong enter into the agreement under the business name of Dovinia; the applicant would “provide all the capital needed for business” and Mr Jeong would “exert all his skill in communicating in the English language and his knowledge in Perth, Australia”.
17.In a Statutory Declaration made in June 2003 (A1.70-71) Mr Jeong explained the venture as follows (at paragraph 2):
“[The applicant] faced difficulties to run his business in Australia due to his limited English ability to deal with suppliers, purchasers and any other matter in relation to his proposed business activities in Australia and he also lack of knowledge and understanding of forming an entity in Australia. Therefore, he was proposed me to have joint venture and joint operation and we agreed on 5 April 1999 that [the applicant] contributed 100% capital into the business Dovinia Trading and we split our profit equally.”
18.The applicant said in his oral evidence that he had invested approximately $60,000 into Dovinia, although he subsequently agreed that he had spent that money overseas purchasing goods that were subsequently imported into Australia and sold via Dovinia.
19.Mr Jeong gave oral evidence that he had used Dovinia for his own trading purposes prior to and during his involvement with the applicant and that the applicant at no time acquired any interest in the ownership of Dovinia.
20.In May 1999 (again prior to the grant of the visa) the applicant applied to register as trademarks in Australia the names “Tentori” and “Beloni”, which were brand names for certain types of household fittings. Those trademarks were registered in March and July of 2000, respectively.
21.Between May 1999 and March 2001 Mr Jeong and the applicant were involved in a number of transactions involving Dovinia and/or the applicant’s Indonesian company, PDSS. A brief summary of those transactions is as follows:
(a)In May and September 1999 PDSS purchased goods to the value of US$970 and US$18,638 from a company in Malaysia, BTI Technology (“BTI”), and on-sold the goods to Dovinia for US$1,224 (A1.169-172) and US$24,261 respectively (A1.187-A1.194).
(b) In June 1999, December 1999, January 2000 and September 2000 PDSS purchased goods on five occasions from a Hong Kong company, Wing Sun Hong (“Wing Sun”) to the value of HK$37,395, HK$74,461, US$8,700, US$8,700 and HK$35,432, and on-sold them to Dovinia for HK$52,532, HK$78,330, US$12,000, US$11,025 and HK$37,203 respectively (A1.150-155; A1.157-168; A1.181-186; A1.177-180; A1.203-206).
(c)In May and August 2000, in transactions that were not adequately explained by either the applicant or Mr Jeong, a West Australian company named Dynamco Pty Ltd (“Dynamco”) sold goods to the value of A$1,663 and A$800 to an Indonesian company associated with Mr Jeong named PT Prima Fajar Prayasa (“PT Prima”). The transactions appear to have been organised by Mr Jeong’s wife. However, PDSS subsequently sold the same products to an unrelated Indonesian company at a price of A$1,946 and A$840 respectively, although there is no documentation available to explain how PDSS purchased or obtained the products from PT Prima (A1.173-176, A1.207-208).
(d)In August 2000 Dovinia sold goods to a Singapore company named Shanghai Tong Lee Hardware (“Shanghai”) at a price of A$17,919 and Shanghai on-sold those products to PDSS for the same amount. PDSS subsequently on-sold the same products to an unrelated Indonesian purchaser for A$19,144 (A1.209-216).
(e)In March 2001 Wing Sun sold goods to Shanghai at a price of US$20,919 (with the invoice marked to the attention of the applicant) and Shanghai sold the goods to a West Australian purchaser named Forwood Tools and Sales (“Forwood Tools”) for US$21,963. The invoice issued by Shanghai to Forwood Tools purported to be in the name of the applicant and Mr Jeong and, at the same time, Shanghai issued to PDSS what appears to be an advice of shipment, which advised that the goods had “been shipped to you as per enclosed relevant documents” (A1.195-202).
22.With one exception there was little documentary evidence of how, or to whom, Dovinia disposed of the imported goods in Australia. Mr Jeong said that some of the goods had been sold to Australian wholesalers and some to retail outlets. No evidence regarding sales to retail outlets was adduced. In relation to wholesale sales, in September 1999 Dovinia entered into an arrangement to supply 10 shipments of furniture fittings to Forwood Tools between December 1999 and September 2000. It appears from the evidence of the applicant, Mr Jeong and Mr Barr (who is a senior executive of Forwood Tools) that only two (or possibly three according to Mr Barr) of these shipments ultimately occurred – in September 1999 and March 2001. Mr Barr said the goods were not competitive in the Australian market, although Forwood Tools had subsequently completed another 2 or 3 transactions with the applicant via Excellent Trading – the last in about November/December 2003.
23.Mr Jeong said in his oral evidence that by about the middle of 2001 it had become apparent that Dovinia was not making a profit out of the various transactions that it was undertaking in conjunction with the applicant. This was so because the prices at which Dovinia was purchasing the goods from PDSS were such that the goods could not be on-sold at a profit. Mr Jeong said that he did not know whether the applicant was making a profit outside Australia on the transactions because he did not know what amounts PDSS was paying the overseas suppliers for the goods in question. Mr Jeong said that at about this time he was spending more time out of Australia and he and the applicant decided not to carry on with the previous arrangement.
24.Financial statements of Mr Jeong trading as Dovinia provided by the applicant (A1.112 – 118) for the year ended 30 June 2000 show that Dovinia had sales income of $90,705 and cost of sales (including stock on hand) of $90,592 for a gross profit of $113. In November 2001, as part of his 24-month survey response to the department, the applicant provided what are described as journal entries for his personal trading in the period 1 July 2000 to 30 June 2001. These reveal credits and debits of $144,024. Also provided was a profit and loss account – although it is not clear if it is for only the month of June 2001 or for the year ending in that month. It reveals income from sales of $73,768 and cost of sales of $70,255 for an operating profit of $3,513.
25.In November 2001 the applicant registered the business name Excellent but it appears that no business transactions were undertaken using that name. In November 2002 the applicant responded to the notice of intention to cancel his visa (T35), providing information about the transactions undertaken up to March 2001 (as set out above), which he described as having been done “… using my name and I am individually dealing with Australian companies …”.
26.The company, Excellent Trading, was incorporated in February 2003 after the applicant had received and responded to the notice of intention to cancel his visa and approximately 1 week prior to the date of the cancellation decision. The applicant was the only shareholder of Excellent Trading, holding 30 shares each of $1,000. On 18 February 2003 the applicant paid $31,944 into the bank account established in the name of Excellent Trading (A1.314). Excellent Trading’s nominated principal place of business was the address of the applicant’s migration agent in Perth.
27.On 26 February 2003 the applicant’s agent sent to the department documents (T52) that showed that between 19 and 26 February 2003 the applicant, via Excellent Trading, purchased bathroom fittings to the value of approximately A$12,300; gymnasium equipment to the value of $1,445; and household electrical goods to the value of $6,050.
28.According to Exhibits A1.316 – 335, on 28 February 2003 Excellent Trading sold the bathroom fittings to Shanghai for $12,197 (A1.322) and on 28 March 2003 sold the gymnasium equipment and the electrical goods to Shanghai for $1,445 and $6,054. The goods were shipped to Singapore between the end of March and 20 April 2003.
29.After the cancellation of the applicant’s visa Excellent Trading was involved in eight transactions between May 2003 and January 2004 in which it purchased goods from Wing Sun in Hong Kong and sold them to two purchasers in Indonesia. The goods were purchased for a total of A$39,330 and sold for A$43,680, with shipment being made directly from Hong Kong to Indonesia (A1.336 – 388, A1.392 – 406). In November 2003 Excellent Trading also sold goods that it had purchased from Wing Sun for US$8,728 to Forward Tools for US$9,187 (A1.389 – 391).
30.Section 134(10) of the Act relevantly defines an “ownership interest” in relation to a business as an interest in the business as a sole proprietor or as a shareholder in a company, or partner in a partnership, that carries on the business. Accordingly, the applicant’s interest as a shareholder in Excellent Trading, as a trader in his own name, or as a partner with Mr Jeong would constitute an ownership interest in any business that may have been carried on in any of those ways. Whether or not any ownership interest is a substantial one is a matter of fact and degree having regard to the value of any interest and the extent to which the interest gives a person the ability to control or influence the activities of the business. To the extent that the applicant conducted a business in his own name or via Excellent Trading, in which he was the only shareholder with paid up capital of approximately $30,000, I am satisfied that the applicant’s ownership interest within any business that may have been carried on in that way would be a substantial one. I am satisfied on the evidence of the applicant and that of Mr Jeong that the applicant at no time acquired any interest in the business name of Dovinia. Rather, I consider that the applicant and Mr Jeong had a relationship in the nature of a joint venture given their evidence that the applicant would supply all the capital and buy the goods for sale overseas, and that they would share profits or losses on a transaction by transaction basis. In the circumstances I consider that the applicant’s involvement with Mr Jeong and Dovinia Trading should be regarded as one aspect of the applicant’s activities in his own name.
31.However, I am not satisfied that the applicant’s ownership interest was, at any stage, in an “eligible business in Australia” as is required by s 134(1)(a). In my opinion, the applicant’s business activities in Australia – whether conducted in his own name or via Excellent Trading, were in reality part of his larger Indonesian business activities carried on by PDSS. In 1999 to 2001 PDSS acquired the goods that were to be imported into Australia and onsold them to Dovinia at a price that gave PDSS a profit and was such that it was apparently difficult for Dovinia to make a profit on the resale of the goods in Australia. The applicant explained this by saying that it was necessary initially to interpose the Indonesian company so that the Australian purchasers did not obtain the identity of the overseas supplier and try to deal with the supplier direct. I believe that explanation is unconvincing but, even if it were true, it does not explain why PDSS did not onsell the goods to Dovinia at the same price at which it purchased them. Similarly, when the applicant traded via Excellent Trading in 2003, the vast majority of the business transactions involved Excellent Trading being merely an intermediary in the sale of goods from Hong Kong to Indonesia. Although they were recorded in the books of Excellent Trading as transactions undertaken by the company, the reality is, as the applicant said in his evidence, that Excellent Trading was operated by the applicant from the premises of PDSS in Jakarta and was no more than a booking office for the transactions. In my opinion those transactions were in substance transactions undertaken as part of the applicant’s normal business in Indonesia via PDSS and they were booked to the account of Excellent Trading only for the purpose of creating the impression that Excellent Trading was carrying on a business in Australia.
32.Of the transactions referred to at para [21] above that involved the export of goods from Australia, in fact the export by Dovinia in August 2000 of goods was the return of goods that had been previously purchased from PDSS but which Dovinia had not been able to sell in Australia. The other two export transactions undertaken by Dovinia, involving the purchase of goods from Dynamco, also involved the transfer of those goods to PDSS in a way that was not entirely explained and the profit on the eventual on-sale appears to have been taken by PDSS.
33.The later export transactions undertaken by Excellent Trading involved the sale of goods at the same price for which Excellent Trading had purchased them and no evidence is available to explain why that was so and what happened to the goods after they were sold to Singapore.
34.Having regard to the above, and despite the applicant and his accountants ensuring that the appropriate ABN and GST registration formalities were complied with for the applicant and Excellent Trading, and Excellent Trading having some of the other indicia of a business, I consider that the business activities of the applicant in Australia were in substance part of the applicant’s businesses in Indonesia. Accordingly, I do not consider that the applicant had an ownership interest in any business in Australia – but, even if he did, I consider that any business that the applicant was involved in in Australia was not an eligible business for the purposes of s 134(1)(a).
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.Mr Yao contended on behalf of the applicant that factors (a), (c) and (f) of s 134(10) were satisfied by the applicant’s business activities. In my opinion it cannot be said that at the time of cancellation the business activities of the applicant could reasonably be said to have resulted, or would result, in those three factors being achieved. All of the transactions involved dealings with overseas suppliers and purchasers that the applicant utilised in his Indonesian business and on the applicant’s evidence there was a deliberate attempt to prevent the Australian companies establishing the identity of overseas suppliers. In relation to the export of Australian goods, the only export transactions via Dovinia involved the export of goods supplied by Dynamco to the value of approximately $2,500 and Mr Jeong gave evidence that these goods had been manufactured in Taiwan although he said that they had been designed in Australia. In relation to the goods exported by Excellent Trading in March and April 2003, which had been purchased in February 2003 shortly before the cancellation, there was no evidence that the goods were in fact manufactured in Australia. However, on the assumption that they were, I do not consider that those isolated transactions were of such a value that it could be said that they satisfied the requirement of factor (c) in s 134(10). In relation to factor (f) there is no evidence that the goods imported into Australia increased the degree of commercial activity or competitiveness in any sector of the Australian economy. The evidence of Mr Jeong and Mr Barr was that the price and other aspects of the products were not competitive and that similar goods could be purchased elsewhere. Most of the transactions undertaken by Excellent Trading did not involve the movement of goods into or out of Australia and hence there would have been no impact on the extent of commercial activity or competitiveness as a result of those transactions. The export by Excellent Trading of a small quantity of goods would not in my opinion satisfy the requirements of factor (f) in s 134(10).
37.For the above reasons I am not satisfied that the applicant’s business activities in Australia constituted an eligible business in this country. Accordingly, I am satisfied that the applicant had not satisfied s 134(1)(a) by the time of cancellation and the power to cancel his visa would have arisen for that reason. It is not, therefore, necessary for me to consider whether the power to cancel would have also arisen because of a failure by the applicant to satisfy s 134(1)(b). However, I observe that that paragraph requires the visa holder to use his or her skills in actively participating at a senior level in the day-to-day management of the eligible business that is referred to in s 134(1)(a). As there was no such eligible business it could not be possible for the applicant to satisfy s 134(1)(b) and hence the power to cancel his visa would have also arisen under that paragraph.
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 Migration Series Instruction (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”. It is apparent that the applicant considered at an early stage the kind of business that he might undertake in Australia – as is evidenced by the agreement with Mr Jeong and the applications to register the two trade marks prior to the grant of his visa. Whether it can be said that the proposed venture with Mr Jeong was a genuine, realistic and achievable one is extremely doubtful given that the applicant chose to supply products for import into Australia at a price that gave him a profit on the transaction in Indonesia.
42.The only evidence of a formal business plan was that supplied to the department in November 2002 when the applicant was responding to the notice of intention to cancel his visas. The applicant said in his oral evidence that he could not remember when that document had been prepared, but it had been sometime after November 2001 and he had been assisted by a friend in Jakarta. The document is not dated but refers to the registration of the Excellent business name in November 2001, indicating that it was prepared sometime after that time. In reality the document is not a plan at all. It refers to Mr Jeong’s residential address as the business address for the applicant’s business and states that the applicant communicated with purchasers and suppliers direct from his office in Jakarta. The document refers to a proposal to import and export furniture, hardware and fittings and refers to an unspecified plan to have a building of approximately 50 square metres and a working capital contribution of $100,000, although there is no information to indicate when such developments might occur. Overall I consider that document to be a statement of general intention or aspiration, rather than a realistic plan of how the business might develop. I also note that by November 2001 the applicant and Mr Jeong had stopped their joint activities.
(b) Partners or Joint Venturers
43.The MSI refers to formal contracts with partners or joint venturers. The agreement with Mr Jeong meets that description although it has little or no detail about how the business is to be undertaken. In the event there is no evidence before me about how the applicant and Mr Jeong accounted for the various transactions that were undertaken via Dovinia or whether and how they allocated any resulting profits or losses on individual transactions. Despite the existence of the written agreement between them, I consider that the arrangement between the applicant and Mr Jeong was extremely informal – and one that the applicant, at least, did not seem to take too seriously given his practice of realising profits in Indonesia rather than Australia.
(c) Research Undertaken
44.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. The T documents contain large quantities of material gathered by the applicant at various trade conventions in Australia and evidence that in November 2001 the applicant wrote to the Australian Embassy in Jakarta seeking information about the identity of possible suppliers of certain products (Tp288). However, it is significant to note that the letter was sent by PDSS and makes no reference to Dovinia or Excellent. There is nothing to indicate that the applicant received any response to that letter. At various times the applicant, in the name of PDSS, wrote to potential suppliers or purchasers of products. This occurred in October and November 2001 – see T pages 289-305. In January and February 2002 the applicant, using the Excellent Trading name, wrote to a number of potential suppliers or customers seeking information about products, but the letters were sent from the office of PDSS in Jakarta and the letters asked for information to be sent to Excellent Trading at PDSS’s addres. That method of research supports the conclusion above that the efforts made by the applicant were as much, or more, directed to advance the business of PDSS as it was to establish a new business in Australia.
(d) Physical Presence in Australia
45.The MSI refers to a visa holder being physically in Australia for more than 6 months since the first arrival. It was not in dispute that the applicant spent only 35 days in Australia between his first arrival and the cancellation of his visa, which is well short of the 6 months nominated. In his response to the 24 month survey in November 2001 the applicant said that up until that time he knew that he had not spent sufficient time in Australia and offered as a reason for that the political and economic uncertainty in Indonesia – which required him to spend more time looking after his business and financial affairs in that country. It remains the case, however, that the applicant chose to attempt to conduct a business in Indonesia using the resources of PDSS.
(e) and (f) Value of assets transferred and value of ownership interest
46.MSI 133 refers to the transfer to and retention in Australia of at least 50% of the funds indicated as available for transfer within 2 years when the person applied for a business visa, and the acquisition of an ownership interest of a minimum value of $100,000. There is no evidence before me as to what amount the applicant indicated he intended to transfer to Australia when he applied for his visa. In his 24 month survey form of November 2001 the applicant said that he had invested $43,834 in his Australian business at that time, and that that was the current net worth of the business. That figure is the amount shown as the total equity of the applicant in the personal balance sheet at June 2001 (T29) but there is no evidence to explain how that figure is arrived at. At that time the only transactions the applicant had been involved in had been via Dovinia and, as explained above, any profits made on the transactions had been taken by PDSS in Indonesia. At that time the only amounts invested by the applicant represented working capital for his business activities and would not have represented the net equity of a business. Subsequently, the applicant invested approximately $30,000 in the acquisition of shares in Excellent Trading and the bank statement for the company at the end of February 2003 (A3.178) shows that the company had a credit of $22,466. At the end of August 2003 the company’s bank account was in credit to the extent of $8,651 and at 31 December 2004 the account’s credit was $15,095.
47.In all the circumstances I am not satisfied that the amounts transferred by the applicant to Australia and retained in this country have been material, nor can it be said that the value of any ownership interest that the applicant may have in Excellent Trading is significant.
(g) Business Activity Undertaken
48.The MSI refers to business activity of a minimum of $100,000 as indicated by turnover. The nominal value of the activities of the applicant via Dovinia and Excellent Trading have exceeded that amount, but, as set out above, most of Excellent Trading’s activities did not involve transactions having a physical connection with Australia.
(h) Compliance with notices
49.It is not contended that the applicant was in breach of any obligation to provide information to the Department so that his business activities could be monitored during the 3 year period after his first arrival in Australia.
50.Looking at the applicant’s position overall, it is apparent that he has devoted a considerable amount of time to transactions that were in some way related to Australia. I accept the applicant’s contention that he intended to become involved in business activities in Australia but, for the reasons set out above, I consider that the applicant’s efforts were largely directed towards the extension of his Indonesian business into this country. I do not accept the applicant’s evidence that he spent in the vicinity of ten hours each week working on Australian aspects of his business activities but, on the evidence, I find that whatever time he did spend whilst in Indonesia can be characterised as part of his management of PDSS.
51.My conclusions might have been different if there had been material before me to indicate that the applicant had established a business entity with Mr Jeong or on his own that genuinely involved the import of goods into Australia and their sale in a way that could have achieved material profits in this country. That was not the case and, as also noted above, many of the business transactions that were recorded in the accounts of Excellent Trading were, in reality, the import of goods into Indonesia from other countries. It is also relevant to note that between about mid-2001 and the end of 2002 the applicant undertook no business in Australia and Excellent Trading was incorporated and commenced some activities after the applicant received a notice of intention to cancel his visa. Despite the incorporation of Excellent Trading and the indicia of business that that company had, my conclusion is that it was not seen by the applicant as a genuine Australian business. Accordingly, I conclude that the applicant did not make genuine efforts to acquire a substantial ownership interest in an eligible business in Australia, nor did he make genuine efforts to exercise his skills in the day-to-day management of such an Australian business. Accordingly, I consider that the applicant has not satisfied the requirements of s 134(2) of the Act and that subsection would not prevent the exercise of the power to cancel the applicant’s visa.
The Residual Discretion
52.There remains the question of whether the residual discretion that is available should be exercised in favour of the applicant so that his visa is not cancelled. The applicant did not identify any particular material or factors that would suggest the discretion should be exercised in his favour. No application was made for review of the decisions affecting the applicant’s wife or children and I can only assume from that that the cancellation of the family members’ visas would not result in any particular hardship to any of those people. I was given to understand that some of the applicant’s children had been studying in Australia for some time but I was not given other information that would allow a better appreciation of their circumstances.
53.It is apparent from all the evidence before me that the applicant is a successful and substantial businessman in Indonesia and is well established in that country. Mr Jeong gave evidence that he is building a new family home for the applicant in Jakarta. The applicant gave no evidence about that development, but I believe it is reasonable to infer that the building of a new family home implies the applicant is likely to continue residing in Indonesia for the foreseeable future, even though the applicant said that he hoped to be able to move to live in Australia in 2005. In all the circumstances I do not consider that the residual discretion to not 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 25 February 2003 to cancel the applicant’s visa is affirmed.
I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen
Signed: ...............(sgd V Wong)......................................
AssociateDates of Hearing 17 February 2004
3 and 4 May 2004
Date of Decision 29 September 2004
Counsel for the Applicant Mr E Yao
Solicitor for the Applicant Artsem International Pty Ltd
Counsel for the Respondent Ms T Davies
Solicitor for the Respondent Blake Dawson Waldron
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