Sutanto and Minister for Immigration Multicultural and Indigenous Affairs
[2002] AATA 1172
•15 November 2002
DECISION AND REASONS FOR DECISION [2002] AATA 1172
ADMINISTRATIVE APPEALS TRIBUNAL ) N2002/306
GENERAL ADMINISTRATIVE DIVISION )
Re Aloysius Heru Sutanto
Applicant
And Minister for Immigration Multicultural and Indigenous Affairs
Respondent
ADMINISTRATIVE APPEALS TRIBUNAL ) N2002/307
GENERAL ADMINISTRATIVE DIVISION )
Re Herminingtyas Syarief
Applicant
And Minister for Immigration Multicultural and Indigenous Affairs
Respondent
DECISION
Tribunal Mr RP Handley, Deputy President
Date15 November 2002
PlaceSydney
Decision The Tribunal affirms the decisions under review.
..............................................
RP Handley
Deputy President
CATCHWORDS
IMMIGRATION – Business Skills Visa – Applicant's failure to comply with visa requirement to notify the Department of business activities – whether Applicant had made a genuine effort to obtain a "substantial ownership interest" in an "eligible business" in Australia and to "utilise his skills" in that business – examination of the Applicant's business activities in Australia and in Indonesia - held that the Applicant did not satisfy the grounds for a business visa – decisions of the Respondent affirmed.
Migration Act 1958 ss 134(1), 134(2), 134(3)(3A), 134(10), 135, 494A, 494B
Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342
Re Griffiths and Migration Authority [2001] AATA 240
REASONS FOR DECISION
15 November 2002 RP Handley, Deputy President
This matter involves applications by Aloysius Heru Sutanto and Herminingtyas Syarief ("the Applicants") for a review of decisions of a delegate for the Minister for Immigration Multicultural and Indigenous Affairs ("the Respondent") made on 4 February 2002 to cancel the business visas issued to Mr Sutanto and Ms Syarief pursuant to s 134 of the MigrationAct 1958 ("the Act"). At the hearing, the Applicants were represented by Michael Jones, Solicitor and Migration Agent, and the Respondent was represented by Susan Goodman, Solicitor, of Blake Dawson Waldron, Solicitors. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the T Documents"). Oral evidence was given by Mr Sutanto.
BACKGROUND
Mr Sutanto, who is aged 49, and his wife, Ms Syarief, who is aged 38, have three children: Eranto Jayanagara who is aged 13, Ryanica Suryajaya who is aged 10, and Raditya Aryajaya who is aged 8. Mr Sutanto is an Accountant who worked in the plastics and food industry in Indonesia.
On 6 November 1998, Mr Sutanto was granted a subclass 128 (business) visa and a secondary business visa was granted to his wife covering their three children. The visas were valid for three years from the date of entry into Australia. Mr Sutanto entered Australia on 13 November 1998. By letter dated 10 October 2000, Mr Sutanto was asked to complete a "Survey of Business Skills Migrant – 24 Months Form 1010". The Department received a completed form from Mr Sutanto on 11 December 2000. By letter dated 19 December 2000, the Department asked Mr Sutanto for further documentary evidence to verify the nature of his business and his involvement in that business. No response was received.
By letter dated 28 September 2001, the Department notified Mr Sutanto of its intention to cancel his business visa under s 134 of the Act for failure to meet the requirements of the visa. Mr Sutanto was invited to respond by 7 November 2001. By letter dated 28 September 2001, the Department also notified Ms Syarief of its intention to cancel her business skills visa and those of her three children. She too was invited to comment by 7 November 2001. The Applicants responded by letter dated 30 November 2001, including documentary evidence as to Mr Sutanto's business activities. By letter dated 26 December 2001, Edward Yao, a Migration Agent instructed by Mr Sutanto, forwarded further information concerning his business activities.
On 5 February 2002, a delegate of the Respondent decided to cancel the Applicants' visas. On 1 March 2002, Mr Sutanto and Ms Syarief lodged applications for a review of these decisions by the Tribunal.
APPLICABLE LEGISLATIONSection 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in Mr Sutanto's case are as follows:
134 Cancellation of business visas
(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b) is not utilising his or her skills in actively participating at a senior
level in the day-to-day management of that business; or(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.
(2) The Minister must not cancel a business visa under subsection (1) if the
Minister is satisfied that its holder:(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c) intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into
account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(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 of a day-to-day management of a 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).
(3A) Subject to section 135, the Minister may cancel an investment-linked visa (other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(10) In this section:
eligible business means 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.
ownership interest, in relation to a business, means 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.
In Ms Syarief's case, the following subsections of s 134 of the Act are relevant:
134 Cancellation of business visas
(1) Subject to subsection (2) and to section 135, the Minister may cancel a
business visa (other than an established business in Australia visa, an
investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a) has not obtained a substantial ownership interest in an eligible business in Australia; or
(bis 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.
(2) The Minister must not cancel a business visa under subsection (1) if the
Minister is satisfied that its holder:(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively
participating at a senior level in the day-to-day management of that business; and
(c) intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into
account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(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; 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 of a day-to-day management of a 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).
(3A) Subject to section 135, the Minister may cancel an investment-linked visa `(other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(4) Subject to subsection (5) and to section 135, if:
(a) the Minister cancels a person's business visa under subsection (1) or (3A); and
(b) a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and
(c) the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;
the Minister must cancel the other person's business permit or business visa
by giving written notice to that person.
(5) The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.
(6) The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.
(7) If the Minister cancels a business visa under this section, the Minister must include in the notice given to its holder:
(a) the Minister's reason for the cancellation; and
(b) a statement to the effect that the holder may, within 28 days after
receiving the notice, apply to the Administrative Appeals Tribunal for review of the cancellation.
(8) A cancellation under this section has effect on and from:
(a) if the person applies to the Administrative Appeals Tribunal for a review of the decision to cancel the visa—the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or
(b) if:
(i) the person's visa was cancelled under subsection (4); and
(ii) the relevant person to whom paragraph (4)(a) applied has applied to the Administrative Appeals Tribunal for a review of the decision to cancel that person's visa; the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or
(c) the 28th day after the day on which the notice of cancellation is given to the holder of the cancelled visa; whichever is the latest.
(9)The Minister must not cancel a business visa under subsection (1), (3A) or (4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:
(a) if its holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or
(b) if its holder was not in Australia when he or she was first granted a business visa—on the day on which its holder first entered Australia after that first visa was granted.
135 Representations concerning cancellation of business visa
(1) Before cancelling a visa under subsection 134(1), (3A) or (4), the
Minister must give its holder a written notice:
(a) stating that the Minister proposes to cancel the visa; and
(b) inviting its holder to make representations to the Minister concerning the proposed cancellation within:
(i) if the notice is given in Australia—28 days after the notice is
given; or(ii) if the notice is given outside Australia—70 days after the notice is given.
(2) The holder may make such representations to the Minister within the time
specified in the notice.
(3) The Minister must give due consideration to any representations.
(4) If:
(a) the time specified in the notice ends after the end of the period referred to in subsection 134(9); and
(b)at the end of the period of 90 days commencing at the time specified in the notice, the Minister has not made a decision on whether to proceed with the cancellation;
the Minister is not to proceed with the cancellation.
(5) If the Minister decides not to proceed with the cancellation, the Minister must give its holder written notice to that effect.
PRELIMINARY ISSUES
Cancellation of Primary Applicant's Visa
Mr Jones submitted that the Department's letter dated 28 September 2001, purporting to be a notice of cancellation as required by s 135 of the Act, was defective and could not give rise to a power to cancel under s 134(1). He said s 135(1) requires the Respondent to give the visa holder a written notice but does not state how this should be effected. As a result, s 494A applies and the Minister "may give the document by any method that he or she considers appropriate", including one of the methods specified in s 494B. Section 494B includes giving documents to a person by hand, dispatching them by prepaid post or other prepaid means, and transmitting them by fax, email or other electronic means. Sections 494A and 494B were inserted by amending legislation (Act No 58 of 2001) and took effect on 10 August 2001.
Mr Jones pointed out that the Department's letter of 28 September 2001 referred to "Regulation 5.02A (2)(b) of the Migration Act 1958" stating that documents should be sent to the person's last known residential or business address. However, this Regulation had ceased to have effect at the time of the letter and Mr Jones submitted the delegate, by relying on Regulation 5.02A, was preventing herself from considering whether such a means of notification was "appropriate" as stipulated in s 494A. Mr Jones argued that this defect in the exercise of the delegate's discretion as to how the notice should be given, must be considered fatal to its validity. If the notice is invalid, then the power to cancel Mr Sutanto's visa under s 134 does not arise. Mr Jones also contended that s 494(C), which provides that where a document is dispatched by prepaid post between addresses in Australia, it is deemed to have been received 7 working days after the date of the document, should not be taken to have applied.
Mr Sutanto gave evidence that the Notice was addressed to his last notified residential address in Sutherland, a southern suburb of Sydney. However, he left Australia on 23 September 2001 and returned to Indonesia, having made arrangements with a local real estate agent to lease the property and to collect any mail sent to Mr Sutanto at that address. Mr Sutanto said the property remained vacant until the end of October 2001 from when it was leased. He said he did not receive the Department's letter of 28 September 2001 until 28 November 2001 when he received it from his niece who was visiting Jakarta. The real estate agent had passed the letter to his brother-in-law, who had in turn given it to his niece to pass to Mr Sutanto.
Ms Goodman submitted that the delegate of the Respondent is not required to separately consider the appropriateness of the method by which notice is given. In any event, the Respondent contends that the delegate did consider what was the appropriate method of notification, even though she wrongly referred to Regulation 5.02A.
In the Tribunal's view, it was appropriate for the delegate of the Respondent to send the letter dated 28 September 2001 to Mr Sutanto's last notified residential address. The fact that the delegate referred to Regulation 5.02A in the letter, rather than s 494A of the Act, should not, in the Tribunal's view, be fatal. The method of notification was appropriate and, in the absence of a person notifying the Department of a different address or of requiring a different mode of service, the Department's action was entirely reasonable and was not one which would ordinarily affect the communication. Thus, in the Tribunal's view the letter of 28 September 2001 was a valid notice for the purposes of s 135(1) of the Act.
Cancellation of Secondary Applicants' VisasMr Jones submitted that even if Mr Sutanto was properly notified under s 135 of the Act, it does not follow that cancellation of the secondary applicants' visas was lawful. Under s 134(4), the power to cancel a secondary applicant's visa does not arise until after the primary applicant's visa has been cancelled. Section 134(5) requires that the Minister must not cancel the secondary applicant's visa under subsection (4) "if the cancellation of that visa would result in extreme hardship to the person". Section 135(1) requires that before cancelling a visa under s 134(4), the Minister must give the person "notice of intention to cancel" and invite the person to make representations.
Mr Jones submitted that the Minister should wait until after the cancellation of the primary applicant's visa before sending notice of intention to cancel to the secondary applicants. The Minister should then consider whether extreme hardship would result, in accordance with s 134(5), before exercising the power to cancel the secondary applicants' visa. Thus, notice of intention to cancel the secondary applicants' visas in this case should not have been given until such time as the primary applicant's visa had in fact been cancelled. Because in this case the primary applicant's visa was not cancelled until 5 February 2002, it was then too late to commence the process of cancelling the secondary applicants' visas, because as required by s 134(9), no notice under s 134(4) had been given within the period of three years commencing on the day on which the primary applicant entered Australia.
The Tribunal rejects this submission. There is nothing in the legislation to say that notification of the intention to cancel given to a secondary visa holder cannot be given contemporaneously with notification of the intention to cancel given to the primary visa holder. To do otherwise, would, in the Tribunal's view, unreasonably and unnecessarily complicate the notification procedure where secondary visa holders are involved. There is nothing to suggest that secondary visa holders would be in any way disadvantaged or adversely affected by contemporaneous notification. This still allows for consideration by the Respondent of any representations as to extreme hardship, and enables cancellation of the secondary visa holders' visas to take place immediately once cancellation of the primary visa holder's visa has been effected.
EVIDENCEMr Sutanto's main purpose in moving with his family to Australia "was to find a place where we can live in better and safer environment than our country of origin" (T p5). Mr Sutanto is an accountant and, at the time of his being granted a business visa, he was working as a director of a company in the plastics industry in Indonesia. His resignation from that company took effect in March 1999, although he last worked for the company in the first week of February 1999.
Mr Sutanto first entered Australia on his business visa on 13 November 1998. On this occasion he only stayed a few days. He returned to Australia in December 1998 for about ten days during which he found a property to purchase in Sutherland, a southern suburb of Sydney. He brought his family to Australia in late January 1999, and they moved into the Sutherland property, a villa purchased for $350,000, in about April 1999. Mr Sutanto transferred approximately $400,000 to Australia, $200,000 being used in the purchase of the Sutherland property, the remainder of the purchase price being borrowed. Repayments for the housing loan are approximately $1,100 per month.
After settling his family in Australia, Mr Sutanto returned to Indonesia in February 1999 after looking around to see what form of business he might be able to undertake in Australia. He came back to Australia in April 1999 and stayed until late June 1999. During June 1999, he attended a Building Materials Expo in Sydney where he identified three products which he thought it might be possible to export to Indonesia: first, plastic door frames made by an English company operating in Australia; second, plastic foam made by a Korean company in Australia which might be used for making thongs; third, polycarbonate roof sheeting made in Australia. When Mr Sutanto returned to Indonesia on 22 June 1999, he investigated possible markets for such goods. He found there was no market for plastic door frames in Indonesia, that the Korean company making plastic foam already had an agent in Indonesia (although, in any event, the Korean company later ceased production of the foam), and the polycarbonate roof sheeting was not competitive in the Indonesian market due to the unfavourable exchange rate.
Mr Sutanto also considered the possibility of exporting Australian wine to Indonesia and took a bottle to Indonesia with him. However, he found Australian wine was already being imported and his initial enquiries indicated that there would be customs problems because this involved the importation of alcohol. Mr Sutanto had also purchased a metal implement from Big W for barbecuing chicken for $39 which he considered a possibility for export to Indonesia, but after initial enquiries he also abandoned this idea and, in October 2000, the Australian manufacturer ceased production. However, his enquiries about exporting Australian honey to Indonesia proved fruitful. He purchased samples from Woolworths and Big W and surveyed more than 100 shops in Jakarta to see whether they might be interested in selling such products. When this appeared promising, he had negotiations with the Indonesian Food and Health Authority, eventually obtaining the necessary approvals. While the samples he had taken to Indonesia involved honey produced in New South Wales, he found honey was produced more cheaply in Western Australia. Eventually, it was the Perth produced "Golden Glory" brand of honey which he exported to Indonesia in March 2001. He purchased 700 cartons, each containing 12 bottles at a cost of $16,849. He has now sold nearly all this honey at a profit of about $15,000.
Mr Sutanto considered two other possibilities. The first involved importing into Australia and marketing fish and prawn crackers manufactured in Indonesia, but he found that the quality of the products did not meet Australian Government requirements. The second involved exporting plastic cutlery manufactured in Australia and marketing this in Indonesia for use in fast food outlets. However, on further investigation, he found that Indonesian consumers were not receptive to the use of such utensils.
Mr Sutanto said after nearly ten months in Indonesia in 2000 he returned to Australia on 3 October 2000 and registered a business name, Heru & Co (T p6). He returned to Indonesia after about two weeks to negotiate with a Japanese company which manufactured polycarbonate roof sheeting which approached him to become their agent in Indonesia. He also hoped that he might be able to negotiate an agency with them in Australia. However, although he was subsequently appointed the company's agent in Jakarta, he was unsuccessful in obtaining an agency for Australia because the company are already selling directly into the Australian market.
In April 2001, Mr Sutanto attended a trade exhibition in Guangdong, China to investigate the prospect of importing plastic roofing from China and also plastic foam for manufacturing thongs. He did not proceed with this idea because the exchange rates were unfavourable. While in China, he also explored the possibility of importing Chinese made syringes into Australia but he encountered quality problems with these.
Another possibility he has explored is the export of Australian snacks and juices. He approached supermarkets in Indonesia to see whether they might be interested but, while they were willing to take the products, when he contacted the Indonesian health authorities, he found the approval procedure to be too complex, lengthy and expensive. Moreover, there are already a number of companies marketing such Australian products in Indonesia. When he investigated the possibility of exporting plain flour from Australia to Indonesia he found the company already had an agent there. He is still investigating sourcing plastic foam for thongs and plastic seals to be used with foil packaging for milk.
In February 2002, Mr Sutanto was involved in negotiations with an Australian company, Rumtake Pty Ltd for the export of recycled Australian clothing to Indonesia. Although the Indonesian customs requirements proved difficult to satisfy, Mr Sutanto is hopeful that he may be able to pursue this project in the future. With a friend, he has explored the possibility of marketing an Australian lock called "Bi Lock". His friend is already marketing locks in Indonesia and Mr Sutanto has supplied him with at least ten Bi Locks to see whether there is a market for these.
Since October 2001, Mr Sutanto has been working on a liquid fertiliser project involving injecting liquid fertiliser through a thin plastic pipe directly into coconut palms grown for palm oil. He has a contact in Malyasia who manufactures the liquid fertiliser who is investigating establishing a manufacturing plant in Indonesia. Mr Sutanto is working with a landscaper and is in contact with other friends to progress the project. Mr Sutanto plans to investigate importing Australian manufactured plastic piping for use in the project. Because there are extensive coconut palm plantations in Indonesia, he foresees a large market for injecting the liquid fertiliser. The Malaysian manufacturer has agreed to appoint him as his agent for sale of the fertiliser in Indonesia. Mr Sutanto has contacted the relevant Indonesian government agency for approval of the project and, at their request will shortly be supplying samples and brochures. One of the purposes of his present visit to Australia is to investigate appropriate Australian manufactured plastic piping. He estimates that in the first year of projected business, five million metres of piping would be required and foresees that demand might increase by 25%-35% in the second year of business.
Mr Sutanto said that he will continue selling Australia honey in Indonesia, at least until next year. However, he may pass this on to someone else because the liquid fertiliser project is much bigger. Although he has been operating largely as a sole trader investing his own money in projects he pursues, this may need to change with the liquid fertiliser project. His Australian business has been run under the name of Heru & Co. He does not own any companies in Australia. In 1999, he owned one company in Indonesia, Aquadesta Pty Ltd which was at that time inactive. However, when Mr Sutanto was appointed the Indonesia agent of the Japanese polycarbonate roof sheeting company in 2000, he reactivated Aquadesta to undertake this business.
Mr Sutanto said that when he originally brought his family to Australia in 1999, he used the balance of $200,000, after paying $200,000 towards the Sutherland house, for their ongoing support. During 1999, Mr Sutanto received a pension from the company for which he had worked of approximately 150,000,000 Indonesian Rupias ("IDR"), equivalent to $20,000, while he was in Indonesia, and he worked two or three days a week for a friend setting up an accounting system for his company for which he was paid 20,000 IDR. During that year, Mr Sutanto also spent three or four days a week over four or five months surveying the Indonesian market to investigate the possibility of selling Australian products including honey.
Mr Sutanto said that as a business person, he goes looking for business opportunities. He does not work to a specific business plan in this regard but if he pursues a particular opportunity then he works according to a plan for that project. He said his business activity in Australia has been primarily in trying to identify appropriate Australian products and then taking them to Indonesia to see if there is a potential market. His success in this regard has been hampered by the uncertain economic situation in Indonesia. Mr Sutanto acknowledged that he had not consulted any business advisers in Australia or Indonesia about doing business in Australia.
In the year 2000, Mr Sutanto continued assisting his friend with his company's accounting system on two or three days a week. In October 2000, Mr Sutanto secured the agency from the Japanese company and began selling their polycarbonate roof sheeting in Indonesia. He also continued to do market research on selling Australian goods in Indonesia. In 2000, Mr Sutanto received an income of approximately 100,000,000 IDR for his accounting systems work together with 30,000,000 IDR from his Japanese agency.
In 2001, about 20% of Mr Sutanto's working time was taken up with his Japanese company from which his income was 125,000,000 IDR. Work on his friend's accounting systems had been completed at the end of 2000.
Mr Sutanto said when his family returned to Indonesia on 16 December 2000, they discovered that his son, Eranto needed treatment for a genital problem. Mr Sutanto took Eranto to see a well known specialist in Jakarta who prescribed medication for one to two months. Initially, Mr Sutanto hoped the problem would be resolved by late January or early February 2001, so that the family could return to Australia. However, initial treatment was unsuccessful, and the specialist recommended a different treatment over a period of six months involving a series of injections. As a result, his family remained in Indonesia in 2001, and during this time, his second child also contracted typhus and was admitted to hospital. Ms Syarief did, however, return to Australia in April 2001 to notify the children's schools of what had occurred in the expectation that as soon as the children were well, they would be able to return to school in Australia.
Meanwhile, because of the length of time they were in Indonesia, the children commenced school there again. The family's return to Australia was further delayed when Mr Sutanto's mother-in-law became sick. As noted above, Mr Sutanto returned to Australia briefly in September 2001, but had to return to Indonesia to finalise negotiations with the Japanese company. It was for these reasons that Mr Sutanto and Ms Syarief were in Jakarta when the Respondent's Notice of Intention to cancel their visas were issued which they did not receive until 20 November 2001. Mr Sutanto said his plan for the future continues to be to return to Australia with his family and to live in Australia and pursue his business opportunities from here.
SUBMISSIONS
ApplicantMr Jones, for the Applicants, conceded that it is not possible to say at the moment that Mr Sutanto has an eligible business in Australia referable to s 134(1)(a) of the Act. However, he contended that Mr Sutanto is utilising his business skills and does intend to pursue business opportunities in Australia. He has been hampered to date by the poor economic situation in Indonesia. The main focus for the Tribunal is, therefore, s 134(2) and whether or not Mr Sutanto has made a genuine effort in relation to his business activity in Australia. Mr Jones noted that the word "business" is not defined in the Act but said it is accepted that the word can be understood in a broad sense. In Mr Sutanto's case, it should encompass his activity as a sole trader. His mode of operation is to look for business opportunities in the import/export field. He has a background in plastics, but is versatile in looking at appropriate opportunities. For this purpose he has registered a business name in Australia.
With regard to the definition of "eligible business" in s 134(10), Mr Jones contended that Mr Sutanto is seeking to develop business links with the international market, noting that he has already exported a shipment of honey for sale in Indonesia. His intended business would increase commercial activity within the Australian economy.
With regard to s 134(2), Mr Jones contended that Mr Sutanto has made a genuine effort to establish an eligible business in Australia. He has provided a detailed account of his activities and of the work he has put into exploring appropriate opportunities. In doing so, he has utilised his business skills and, as at the date of the cancellation, he intended pursuing such business opportunities. For example, Mr Sutanto believes the liquid fertiliser project is extremely promising, a project which has been ongoing since late 2001. Mr Jones said the relative lack of success, which Mr Sutanto has had to date with the various projects he has explored, should not detract from the genuine effort which he has made in pursuing these opportunities. In the case of many of the products he has investigated for export to Indonesia, his investigations have revealed difficulties in complying with Indonesian government regulations and the potential opportunities have been affected by the poor exchange rate.
With regard to s 134(3) and the matters the Minister may take into account in determining whether a person has made a genuine effort, Mr Jones noted that within six months of his first arrival in Australia on the business visa, Mr Sutanto was exploring the possibility of exporting wine and honey to Indonesia. He has operated largely as a sole trader, researching the market in Indonesia for the importation of Australian products. Mr Jones noted that Mr Sutanto was in Australia for a total of 212 days in the period of three years and three months prior to the cancellation of his visa. He was significantly affected by his need to remain in Indonesia because of family health problems in 2001. Mr Sutanto transferred $400,000 to Australia, approximately half of which was spent in the acquisition of a property for his family to live in with the remainder being spent on living expenses. His business venture has not, to date, required the injection of much capital. Mr Sutanto complied with the 24 months business survey he was asked to complete albeit late, because he was in Indonesia at the time that the survey was sent.
With regard to Ms Syarief and her children who are secondary applicants, Mr Jones said the extreme hardship ground is not pressed.
Respondent
Ms Goodman, for the Respondent, submitted that if there is no eligible business, then under s 134(1), subparagraphs (b) and (c) cannot be satisfied. With regard to the definition of "eligible business" in s 134(10), the Respondent says there is no evidence that Mr Sutanto has developed business links between Australia and the international market. The only export he has concluded is one export of honey which, in terms of his business activity in Australia, has resulted in an overall loss. Ms Goodman noted that the technological aspects of his project involving the injection of liquid fertiliser, are focused on establishing a business in Indonesia and there is no proposal for the introduction of such technology in Australia.
With regard to whether Mr Sutanto has made a genuine effort in relation to s 134(2), Ms Goodman submitted that there is no documentary evidence of this. Referring to the criteria in s 134(3), Ms Goodman submitted that Mr Sutanto has failed to develop any realistic and achievable business proposal. He has merely explored possible opportunities which take the form of "hopes", there being no evidence of any achievable and viable business proposals. Even with the liquid fertiliser project, there is no evidence of his having investigated the sourcing of plastic pipes for the project in Australia.
Ms Sutanto's evidence is that he has made enquiries about the potential market for Australian products in Indonesia. Government policy set out in the Migration Series Instruction (MSI) does not accept that enquiries should be treated as research. Ms Goodman said there is no written evidence of detailed consultations. Mr Sutanto's evidence is merely of having seen products in retail stores in Australia and then having taken them to Indonesian shops to see if those shops are interested in selling Australian products.
Ms Goodman said that Mr Sutanto has spent less than a quarter of the three years and three months prior to the cancellation of the visa in Australia. During that time, he has been active in Indonesia in earning an income to support his family, for example through assisting a friend setting up an accounting system and undertaking an agency for a Japanese company. The money he transferred to Australia was used to provide housing and support for his family. While Ms Goodman acknowledged that an eligible business need not have been successful, she submitted that the relevant criteria in the Act must be satisfied. In Mr Sutanto's case, it is clear that those criteria are not satisfied.
CONSIDERATION OF LAW AND FINDINGS
By way of preliminary observation, the Tribunal notes that it should have regard to all relevant evidence to enable the making of findings of fact in relation to the decision made at the date of cancellation: Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342; Re Griffiths and Migration Authority [2001] AATA 240. Thus, in Mr Sutanto's case, the focus is on evidence relating to the period up to the date of cancellation, 5 February 2002. The decision of that date to cancel Mr Sutanto's subclass 128 (business) visa was made pursuant to s 134(1) of the Act. That subsection enables the Minister to cancel a business visa if satisfied of the matters referred to in subparagraphs (a), (b) and (c). Subparagraph (a) is satisfied where a person has not obtained a substantial ownership interest in an eligible business in Australia. "Eligible business" is defined in s 134(10).
In Mr Sutanto's case, his business activity in Australia has been as a sole trader. He has registered a business name, Heru & Co, but has no corporate or other structure. Mr Sutanto's efforts in relation to business activity have consisted of identifying Australian products which he considered might be saleable in Indonesia or vice-versa. In relation to Australian products being sold in Indonesia, his evidence is that he has taken samples with him to Indonesia and has investigated whether those products have potential in the Indonesian marketplace, bearing in mind Indonesian government regulation for the import of those products.
As at the date of the cancellation of his visa, Mr Sutanto had exported only one Australian product to Indonesia: a shipment of West Australian honey purchased for $16,849.00 which he has sold to retailers in Indonesia. While the sales have generated a profit of approximately $15,000, Mr Sutanto's income tax statement for the financial year ending 30 June 2001 shows a loss of $9,638 (T p258). Although the MSI at paragraph 4.3.3 acknowledge that the eligible business may be small, and it is sufficient for the business to demonstrate that its activities have achieved one or more of the stated objectives set out in subparagraphs (a) to (f) of the definition of "eligible business", the Tribunal notes that the definition is of a business that the Minister reasonably believes is either resulting or will result in one or more of the stated objectives.
On the basis of the evidence before the Tribunal, the Tribunal is not satisfied that any of subparagraphs (a) to (f) had resulted from Mr Sutanto's business. The only business activity falling within those subparagraphs is one export of a shipment of honey in March 2001. However, the Tribunal must also consider whether or not such objectives will result from the business in the future. The Tribunal accepts that there is some evidence to support a finding that Mr Sutanto's business could conceivably lead to the development of business links with the international market (subparagraph (a)) and the export of Australian goods and services (subparagraph (c)) with a resultant increase in commercial activity (subparagraph (f)). On that basis, the Tribunal will proceed to consider the other matters of which the Minister must be satisfied in order to justify exercising the power to cancel Mr Sutanto's visa. In particular, the Tribunal must have regard to s 134(2) which provides that the Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that the person:
(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.
When considering whether a person has made the genuine effort in subsection (2) the Minister may take into account the matters set out in subsection (3) quoted above.
The first issue for the Tribunal to determine is whether Mr Sutanto has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. As noted above, Mr Sustanto's evidence indicates that he has explored various opportunities for the export of Australian products to Indonesia and a few Indonesian products to Australia. With the exception of one export of honey, his efforts as at the date of cancellation had not been successful. The Tribunal is not satisfied that the evidence as at the date of cancellation suggests that Mr Sutanto's efforts will result in any significant business activity in the future. With regard to the matters that the Tribunal may take into account pursuant to subsection (3), the Tribunal notes that there is no evidence of any business plan, and by reason of being a sole trader, there are no business partners or joint venturers. The research undertaken by Mr Sutanto, which involved his taking Australian products to various Indonesian retailers, has not been documented.
At the same time as Mr Sutanto was investigating the potential market for Australian products in Indonesia, he was initially at least working for a friend on a part-time basis setting up an accounting system, and he also appears to have been exploring other business opportunities in Indonesia. For example, he secured the agency from a Japanese company to sell their polycarbonate roof sheeting in Indonesia.
While the Tribunal accepts that the time Mr Sutanto might have spent in Australia has been adversely affected by the illness of members of his family who needed to stay in Indonesia for medical treatment instead of returning to Australia in February 2001, nevertheless, Mr Sutanto has only spent 212 days in Australia in the period of three and three months prior to the cancellation of his visa. Moreover, the money he transferred to Australia was essentially for personal use in terms of purchasing a property for the accommodation of his family and providing for their support. While the Tribunal accepts that a sole trader may not have any great need for capital investment during the initial stages of exploring business opportunities, in general terms the overall picture gained by the Tribunal is not one which suggests a significant commitment to business activity within Australia as at the date of cancellation. Much of Mr Sutanto's evidence as to potential opportunities was in the realm of supposition with very little to indicate that such opportunities might come to fruition.
While Mr Sutanto's need to earn an income to support his family and his family's need to remain in Indonesia in 2001 for medical reasons may have necessitated his pursuing opportunities for income in Indonesia, his evidence suggests that this overtook and overrode his intentions in respect to Australia. In relation to s 134(2), and whether Mr Sutanto made a genuine effort to utilise his skills in generating Australian business activity, his evidence suggests that he has been deflected from his original intentions and that much of his time and effort and the utilisation of his skills has gone into projects involving Indonesian focused business activity which have no real benefit to Australia. While Mr Sutanto maintains that he has plans in relation to business activity in Australia, there is little evidence of this being any more than plans and in three years and three months little was achieved. In conclusion, the Tribunal, with reference 134(2), is not satisfied that Mr Sutanto has made a genuine effort in utilising his skills in establishing an eligible business in Australia.
For the immediate future, Mr Sutanto's evidence suggests that it is more likely that his efforts will be directed towards the liquid fertiliser project which he hopes will involve him as an agent operating in Indonesia. The sourcing of plastic piping from Australia for that project is no more than an unexplored idea. Thus, the Tribunal concludes that s 134(2) is not operative in Mr Sutanto's case. Given the Tribunal's findings about Mr Sutanto's focusing his skills and business activity primarily on Indonesia, the Tribunal finds that s 134(1)(a) is satisfied in so far as Mr Sutanto has not obtained a substantial ownership interest in an eligible business in Australia, subparagraph (b) is also satisfied in so far as he is not utilising his skills in actively participating at a senior level in the day-to-day management of a business in Australia, and subparagraph (c) is also satisfied in so far as his immediate intentions appear to be focused on developing Indonesian business interests. The Tribunal therefore concludes that the Minister had grounds for cancelling Mr Sutanto's visa pursuant to s 134(1) of the Act.
With regard to the cancellation of Ms Syarief's visa and those of her and Mr Sutanto's three children, as noted above the power to cancel arises under s 134. It was open to the Applicants to make a submission under s 134(5) that cancellation of the visa would result in extreme hardship, but they chose not to do so. The Minister's power to cancel Ms Syarief's visa was, therefore, properly exercised.
Thus, the Tribunal affirms both the decisions under review.
I certify that the preceding 53 paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President.
Signed: .....................................................................................
AssociateDate of Hearing 23 October 2002
Date of Decision 15 November 2002
Solicitor for the Applicants Mr M Jones
Solicitor for the Respondent Ms S Goodman
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