Sutoyo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 604
•14 June 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 604
ADMINISTRATIVE APPEALS TRIBUNAL )
) Nos W2003/284,
GENERAL ADMINISTRATIVE DIVISION ) W2004/136, 137 & 138 Re HARTOPO SUTOYO
NIEKE ARYANI HARTOPO
HANNE MARTINANOVA HARTOPO
HENING OCTAMARVIA HARTOPOApplicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr M Allen Date14 June 2004
PlacePerth
Decision The Tribunal affirms the decisions made on 4 July 2003 to cancel the business skills visas held by the applicants.
...........(sgd M Allen).....................
Member
CATCHWORDS
IMMIGRATION – cancellation of business skills visa – principal visa holder has a substantial ownership interest in an Australian company – company does not carry on a “business” and is not an “eligible business” – principal visa holder has not been involved in the day to day management of a business – principal visa holder has not made a genuine effort to acquire a substantial ownership interest, or to be involved in the day to day management of a business – family members would not suffer extreme hardship if their visas cancelled – decisions to cancel visas affirmed
Migration Act 1958 ss 134, 135
Migration Series Instructions 133
Hope v Bathurst City Council (1980) 144 CLR 1
Puzey v Commissioner of Taxation [2002] FCAFC 197
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Re Wang and Minister for Immigration and Multicultural Affairs [2000] AAT 961
REASONS FOR DECISION
14 June 2004 Mr M Allen 1. On 4 July 2003 a delegate of the respondent cancelled the subclass 128 business skills visa held by Hartopo Sutoyo (“Mr Sutoyo”) and visas held by the other three applicants, Nieke Aryani Hartopo (“Ms Hartopo”) who is Mr Sutoyo’s wife, and their two daughters, Hanne Hartopo and Hening Hartopo. At the hearing of the application made by Mr Sutoyo for review of the decision made in respect of himself, applications were made on behalf of the other three applicants for an extension of time within which they could apply for review of the decisions concerning their visas. With the consent of the respondent I granted extensions of time to the other three applicants and, consequently, the matters before the Tribunal concern the cancellation of the visas held by all four family members.
2. At the hearing of the application Mr Sutoyo represented himself and the other applicants and the respondent was represented by Ms Edis. The Tribunal received into evidence the documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (T1 – T42) and exhibits A1 and A2 tendered by the applicants. Oral evidence was given by Mr Sutoyo, Ms Hartopo and Hanne with the assistance of an interpreter in the Indonesian language.
Background
3. The background to the matter is that Mr Sutoyo applied for visas for himself and his family during 1999 and the visas were granted in April 2000. All the applicants arrived in Australia for the first time under the visas on 26 April 2000.
4. In March 2002 the respondent’s department sent a 24-month survey form to the applicant, who completed and returned it in May 2002. In March 2003 a delegate of the respondent notified all the applicants of an intention to cancel their visas and invited representations to be made regarding that issue by 11 April 2003. Submissions were made on behalf of the applicants at the end of March 2003 and the decisions to cancel the visas were made on 4 July 2003.
Consideration
5. The respondent’s power to cancel business visas held by persons such as Mr Sutoyo is found within s 134 of the Migration Act 1958 (“the Act”). Pursuant to s 134(1), a discretionary power to cancel a business visa arises if the respondent is satisfied that the holder of the visa has not satisfied any one of the three matters set out in that subsection. If the visa holder has not failed to satisfy any one of the three requirements then no power to cancel arises. In considering the matters specified in s 134(1), I must have regard to evidence of circumstances that existed as at the date of cancellation although, as will be referred to below, I may look at evidence of activities and transactions that have occurred after the date of cancellation to the extent that it is relevant to establish intentions or the likelihood of certain outcomes as at the date of cancellation.
6. S 134(1) (a) of the Act requires the visa holder to have “obtained a substantial ownership interest in an eligible business in Australia.” On the evidence, the only business activities with which Mr Sutoyo and his family members were associated was a company named Hatiga Niaga Pty Ltd (“Hatiga”), which was incorporated on 10 May 2002 (T documents pg 69)). On the evidence it is clear that this company was incorporated between the date Mr Sutoyo received the 24-month survey form and the date upon which he completed and returned that form. Mr Sutoyo and Ms Hartopo each own 50% of the issued share capital of Hatiga and are the two directors of it. In the 24-month survey form Mr Sutoyo stated that the kind of activity to be carried out by Hatiga was “small trading for Australian product ie automatic garage door, sofa and building material” and that the company expected to export “building materials, household etc.”. Between July 2002 and March 2003 either Ms Hartopo or her daughter Hanne placed orders to purchase a number of items of household furniture and appliances from retail outlets, Habitat Furnishings, Harvey Norman and Myer. These items were delivered to the family home where they were stored until March 2003 when they were shipped, together with a number of other items of family belongings, to Jakarta where they arrived during April 2003. Exhibit A1 contains a purchase order dated 1 May 2003 from an Indonesian company PT Tuju Wali Wali (“Tuju”), which Mr Sutoyo said was owned by a friend of his. The purchase order was addressed to Mr Sutoyo care of an Indonesian company with which he was associated, PT Tamara Swadaya Perdana (“Tamara”) pursuant to which Tuju ordered the items of household furniture and appliances that had previously been purchased in Australia by Hatiga. The total price of the transaction is shown as 120.36 million rupiah which Mr Sutoyo said was the equivalent of approximately AUS$24,000.00.
7. Mr Sutoyo’s evidence was that he had arranged with the owner of Tuju for that company to purchase the items because that facilitated the payment of import duty into Indonesia and because a number of the items involved in the transaction were to be purchased by employees of Tuju. Mr Sutoyo said that he assisted Tuju in selling the remainder of the items, which he had arranged with other friends of his. He had received payment for the goods from Tuju in instalments up until September 2003. He said that he had transferred some of the money received to Hatiga’s bank account in Australia and sent some of the money to his wife’s bank account in Australia.
8. The above was the only business transaction that Hatiga was involved in. Mr Sutoyo said that when he received the notice of intention to cancel his visas he had decided not to have Hatiga undertake any further transactions.
9. The respondent concedes that Mr Sutoyo has obtained a substantial ownership interest in Hatiga but contends that Hatiga has never conducted any business, must less an eligible business within the meaning s134(10) of the Act. That section relevantly provides that an “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.”
10. The first question to consider is whether or not Hatiga was actually conducting any business at all. The decision of the High Court in Hope v Bathurst City Council (1980) 144 CLR 1 is authority for the proposition that carrying on a business denotes activities for the purpose of profit undertaken on a continuous and repetitive basis, and is also authority for the proposition that a business may be carried on even though it is done in a small way. A Full Court of the Federal court has recently summarised the position (in the context of income tax legislation) as follows in Puzey v Commissioner of Taxation [2003] FCAFC197 (per Hill and Carr JJ, with French J agreeing):
“46. The question whether a person is carrying on a business is a conclusion to be drawn from all relevant facts and circumstances. There are some relevant propositions which can, however, be stated. First, as was said by Barwick CJ, in Fairway Estates Pty Ltd v Federal Commissioner of Taxation 70 ATC 4061 at 4069 and it is self-evident, every business must have a first transaction. And there may be a business, even if that business is small in scope: cf Thomas v Federal Commissioner of Taxation (1972-3) 46 ALJR 397 at 401 with Hope v Bathurst City Council (1980) 144 CLR 1 at 10. A person may carry on a business, notwithstanding that the person had some other activity, such as full time employment. It is not necessary in concluding that a business is carried on that the acts to be undertaken are acts of the person seeking to establish he or she is carrying on a business. So a person may appoint another to take the steps which constitute the business activity: Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 at 319 and, at least if the facts in Commissioner of Taxation v Lau at 218 involved a business, that case is another example.
47. It will be relevant in deciding whether a business is carried on that there is some repetition of acts and that the activities in question have “something of a permanent character”; Hope per Mason J at 8. What is required is that activities be engaged upon “on a continuous and repetitive basis”; Hope ibid at 9. However, perhaps not too much attention should be given to the concept of repetition where the activity is one, such a plantation operation, where the activity will continue over a relatively long period of time but where there will be significant periods of what may be referred to as inactivity. Business does not mean being busy.
48. In deciding whether or not a business is carried on courts have pointed to what have been called in the United Kingdom the “badges of trade,” indicia which, while no one of them will be determinative of whether a business is carried on, collectively will demonstrate a business. These include the profit motive (although a non profit company may still carry on a business), acting in a business like way, (although many businesses may be found which operate in a non-business like way), the keeping of books of account and records, (although the fact that there are none will not necessitate the conclusion that a business is not carried on) and repetition (although a fixed term project may still be a business).”
11. Mr Sutoyo’s evidence was that he did not have business premises in Australia but operated from the lounge room of the family home. By the time of the visa cancellation he had entered into only the one export transaction described above and Mr Sutoyo said that had come about because his wife had sent a number of brochures about household products to Indonesia and he had distributed these to friends and others – who had indicated that they wished to purchase particular items.
12. On the evidence before me I am not satisfied that there was a sufficient repetition of acts nor was there anything of a permanent character in the activities. Although it appears that a small profit was made on the transaction referred to above, I do not believe that it can be said that Hatiga acted in a businesslike way in that it purchased the goods in question from retailers rather than wholesalers and shipped the items to Jakarta with a firm of household removalists, including with the items a quantity of the family’s personal effects. Although Hatiga engaged an accountant to prepare annual financial statements for the year ended 30 June 2003 and obtained an Australian business number, it is apparent that Hatiga did not issue an invoice to Mr Sutoyo or anybody else when it disposed of the goods and the payments made for the goods in Australia were either in cash or by the use of personal credit cards. Not all of the proceeds of the sale of the goods in Indonesia ended up in the company’s bank account. I am also not satisfied that Mr Sutoyo’s explanation of why Tuju was involved is entirely correct. Exhibit A1 also includes receipts (one issued to Mr Sutoyo and one to Ms Hartopo) issued by the Indonesian freight handling company for amounts of “port storage charges” and “advance import duty”, which suggests Tuju was not involved to facilitate those payments. In my opinion Hatiga was not conducting a business in Australia at all and consequently it was not a eligible business for the purposes of s134(1)(a) of the Act. Accordingly, I find that Mr Sutoyo had not, by the time of cancellation of his visa, acquired a substantial ownership interest in an eligible business in Australia and the power to cancel his visa arises because of the failure to satisfy that requirement.
13. Having arrived at that conclusion, it is unnecessary to consider whether or not Mr Sutoyo also failed to satisfy s 134(1)(b), which requires that a visa holder must be “utilising his or her skills in actively participating at a senior level in the day to day management” of the eligible business – because Hatiga did not conduct an eligible business. However, even if Hatiga had been conducting an eligible business it is, in my opinion, clear that Mr Sutoyo was not actively involved in the management of that business at a senior level. His evidence was that he is fully committed to the management of his own company in Indonesia, PT Ratna Purikreasi, of which he is the president of commissioners and a 58% owner. He is also a commissioner of another corporation that operates a major toll road but has no ownership interest therein. Mr Sutoyo said that he was committed to at least 60 hours a week of work with these other corporations. I note that the 24-survey form completed by Mr Sutoyo in May 2002 referred to there being two family members engaged full time (30 hours per week or more) in Hatiga’s business and that Mr Sutoyo said that he usually worked a minimum of 10 hours each week in that business. On the evidence before me I do not accept those assertions. In May 2002 Hatiga had only just being incorporated and had not at that stage ordered or purchased any goods. In any event, I am satisfied that Mr Sutoyo did not spend 10 hours a week on Hatiga business at that time, or thereafter, because of his commitments to other Indonesian corporations.
14. In addition, Mr Sutoyo said that the principal reason for setting up Hatiga was to allow his wife and daughters to gain experience in the running of a business and that they had undertaken all of the business activities with very limited involvement from himself. His main involvement was to arrange for the transfer of money from Indonesia to Australia as and when it was required.
15. In the circumstances I find that, even though Hatiga did not conduct an eligible business, Mr Sutoyo was not utilising his skills in actively participating at a senior level in the day to day management of whatever activities Hatiga was undertaking. The power to cancel his visa would arise also under s 134(1)(b).
16. Having determined that the discretionary power to cancel the visa did arise under s 134(1) of the Act, I must then consider the requirements of s 134(2). That sub-section provides that a business visa must not be cancelled if the Minister (or the Tribunal) is satisfied that the holder of the visa has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and intends to continue to make such genuine efforts.
17. Section 134(3) provides that for the purpose of deciding whether a person has made those genuine efforts, 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 the 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:
(j)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).”
18. Migration Series Instructions 133 issued by the respondent (“MSI 133”) provides guidance in the interpretation of the factors that may be taken into account, and although these are not binding on the Tribunal there is good reason why they should be applied in the interests of consistency of decision making: see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695 and 696, per Davies J. However, where MSI 133 purports to require more, or is more restrictive, than the Act itself, no weight should be given to the MSI: see Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [51].
19. In relation to the genuineness of his efforts to become involved in the ownership and management of a business in Australia, the evidence of Mr Sutoyo was that he had never really expected to migrate to Australia or to spend substantial amounts of time here. The main purpose of applying for a business visa was so that his children could further their education here and so that his wife and children could learn about Australian business. He had not developed business proposes in any formal sense, he had not become involved in any partnership or joint venture for business purposes and he had undertaken no research regarding the conduct of a business in Australia. Between the period of his first arrival in Australia and the date of cancellation of the visas he had spent 112 days in Australia. Although he had undertaken, when applying for a business visa, to transfer $200,000.00 to Australia for the purposes of business investment, by the time of cancellation Hatiga had a paid up capital of only $100.00 and its financial statements showed that at 30 June 2003 Mr Sutoyo had made an interest bearing loan to the company of $26,151.00. I am satisfied that the value of Mr Sutoyo’s ownership interest in Hatiga would be a nominal amount only. The only business activity is that of purchasing goods to the value of just over $13,000.00 and their sale for about $24,000.00. In the light of Mr Sutoyo’s evidence that he did not ever seriously expect to become involved in the management of a business in Australia, I find that he has not made a genuine effort to obtain a substantial interest in an eligible business in Australia or to utilise his skills in the senior management of a business. In the light of his evidence that, even if the visas were not cancelled, he would not intend to spend substantial amounts of time in Australia because of his commitments in Indonesia, I also find that he does not intend to make genuine efforts to do those things in the future. Accordingly, I find that none of the matters set out in s 134(2) of the Act would prevent the cancellation of Mr Sutoyo’s visa.
20. There remains, however, a residual discretion in the Tribunal to not cancel Mr Sutoyo’s visa: Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 per Kiefel J. No particular factors were identified by Mr Sutoyo as relevant in relation to the exercise of this discretion. The Act does not specify any factors to be taken into account in the exercise of this general discretion. I am satisfied that the absence of any genuine and realistic commitment by Mr Sutoyo to either become involved in the ownership and management of a business in Australia, or indeed to spend substantial amounts of time in Australia, means that the underlying purpose of granting business visas, namely to facilitate the migration of persons who wish to become involved in businesses in Australia for the benefit of the Australian economy, would not be achieved if Mr Sutoyo’s visa were not cancelled. In the circumstances no factors have been identified to me that would indicate that the residual discretion not to cancel should be exercised in Mr Sutoyo’s favour. Accordingly, on the evidence before me, I find that the decision to cancel Mr Sutoyo’s visa was the correct and preferable decision and I affirm the decision made on 3 July 2003 to that effect.
21. I turn then to consider the circumstances of Ms Hartopo, Hanne and Hening. Section 134(4) relevantly provides that where a business visa held by a person has been cancelled under s 134(1), then the business visas held by members of the family unit of that person must also be cancelled. However, s 134(5) provides that the visas held by the other persons must not be cancelled if cancellation would result in extreme hardship to the person.
22. Mr Sutoyo gave evidence that if the visas of his daughters were cancelled they would not be able to continue their education in Australia and they and his wife would not have the opportunity to continue to learn how to conduct businesses in Australia. Hanne gave evidence that she is now 21 years of age and she has lived in Australia since she was 16, finishing high school at the end of 2000 and presently involved in a business studies diploma at the Perth International Business College, which she will finish in the middle of 2004. She would like to undertake a bachelor degree course in marketing and public relations at a Western Australian university that would take, she thought, about 2 years. She has always lived with her mother and her sister, Hening, in Perth but she has returned to Indonesia for holidays about twice a year. She spends about 1½ months per year in Indonesia, living in the family home, and experiences no particular problems when she is in Indonesia. She would not expect there to be any difficulty in living in Indonesia if her visa were cancelled but she would not be able to complete a degree from an Australian university and she would not have the opportunity to learn to run a business in Australia. She said that she has many relatives and friends in Indonesia, some of the latter being students, but she has not made any enquiries about whether she could attend a university in Indonesia or the courses that might be available.
23. Ms Hartopo gave evidence that she has lived in Australia with her two daughters since 1997. She returns to Indonesia each year for holidays but she had spent the period from March 2003 to February 2004 in Jakarta because she and her husband were building a new home and she oversaw the finishing of the house and the movement of their belongings from the previous house to the new one. During that time Hanne had lived in Perth on her own, because the second daughter, Hening, had also returned to Indonesia to live, where she is now undertaking a course in Multimedia Studies. She had previously studied at Curtin University in Perth but had not completed a degree. Hening would like to return to Australia in August 2004 to undertake a course in Multimedia Design in Sydney. If Hening does move to Sydney to live, then Ms Hartopo expects that she would alternate between Sydney and Perth so that she can spend as much time as possible with her daughters. Ms Hartopo said that cancellation of her visa would mean that she could not supervise her daughters in Australia and she would not be able to continue her business activities here.
24. The Act does not define “extreme hardship”. The meaning to be given to those words was considered by the Federal Court in Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481. At 487 Foster J said that:
“…it is, in my opinion, important to approach the phrase “extreme hardship” in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. ‘‘Hardship” is in itself a relative term. What may be a “hardship” to a sensitive person, or one in a particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word ‘extreme’ must be evaluated against the facts of a particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken. ….
In addition to what I have already said, I consider that the application of the word “extreme” must also be approached with caution. Obviously there are varying degrees of hardship which may be suffered by any particular individual. “Trivial”, “minor”, “moderate” are adjectives which spring to mind as conveying such varying degrees. Clearly enough, “extreme” hardship must find itself at the very high end of the scale. This does not mean, however, that in any given case, “extreme hardship” means, in effect, a particular point on a continuum of hardship. It obviously denotes an area in which an ascertainable burden of hardship may fall and properly merit the description “‘extreme”. Within that area there may be varying degrees of burden, one less than another, but each meriting the description.”
25. In Re Wang and Minister for Immigration and Multicultural Affairs [2000] AAT 961 at [28] to [31] Deputy President McMahon observed that extreme hardship in the context of s 134(5) must be judged subjectively; that hardship involves more than inconvenience or detriment – it must be affectation to a considerable degree; that helpful dictionary definitions of the word “extreme” include “utmost or exceedingly great in degree” or “to a very high degree”; that the hardship must necessarily result from the cancellation and be a necessary concomitant of the cancellation; and that to demonstrate the constituent elements in subsection (5) is to undertake a particularly onerous task. DP McMahon concluded at [32] that “it is clear that the applicant does not wish to leave Australia. That in itself cannot amount to hardship. The fact that the loss of a visa means that the applicant would need to leave Australia cannot of itself amount to hardship as this is the result contemplated by the statute upon cancellation. One must look at the consequences to the applicant that undoubtedly would result from the cancellation.”
26. I am not satisfied that extreme hardship would result to either Ms Hartopo, Hanne or Hening if their visas were cancelled. The only hardship identified has been the possible loss of an opportunity to become involved in the running of a business in Australia and the loss of opportunity to complete university degrees in Australia. Those consequences do not, in my opinion, constitute extreme hardship of the type contemplated by the Act. I can accept that Hanne does not wish to return to Indonesia until the completion of her present degree and that she would like to undertake a further degree in Australia, as would Hening. Nevertheless, both have retained family and friend connections in Indonesia and have spent considerable amounts of time there, indeed Hening has lived there since January 2003. There are no health problems in the family but Ms Hartopo said that Hening was uncomfortable about travelling by public transport in Indonesia for safety reasons. Even if that is the case, given that Hening has lived in Indonesia now for more than a year suggests to me that this is not a major problem and certainly would not constitute extreme hardship for the purposes of the Act. Both daughters may well be eligible for other types of visas that would allow them to study further in Australia.
27. It is relevant, I believe that Mr Sutoyo and Ms Hartopo have recently finished the building of a new home in Jakarta and are now living in it. It is, in my opinion, apparent that they remain committed to living in Indonesia rather than in Australia and, in my opinion, extreme hardship would not result to Ms Hartopo, Hanne or Hening if their visas were cancelled.
28. Accordingly, I affirm the decision of the delegate made on 4 July 2003 to cancel the business visas held by all the applicants
.
I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member
Signed: ...................(sgd V Wong).......................................
AssociateDate of Hearing 19 April 2004
Date of Decision 14 June 2004
Counsel for the Applicant Mr Sutoyo
Solicitor for the Applicant Unrepresented
Counsel for the Respondent Ms J Edis
Solicitor for the Respondent Blake Dawson Waldron
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