Tan and Minister for Immigration and Multicultural and Indigenous Affairs
[2003] AATA 753
•31 July 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 753
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/1467
GENERAL ADMINISTRATIVE DIVISION ) Re RUSTAM RACHMAT TAN Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms N Bell, Member Date31 July 2003
PlaceSydney
Decision The Tribunal affirms the decision under review. ……………………………………
Ms N Bell Member
CATCHWORDS
MIGRATION – business skills visa subclass 127 – cancellation of visa – Applicant’s failure to comply with visa requirement to notify the Department of business activities - acquisition of substantial ownership interest in eligible business in Australia – active participation in day to day management at senior level of business – whether genuine effort made - discretion not to cancel visa – decision affirmed
Migration Act 1958 sections 134, 137
Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299
REASONS FOR DECISION
31 July 2003 Ms N Bell, Member 1. This is an application by Mr Rustam Rachmat Tan ("the Applicant") for review of a decision dated 2 September 2002 of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs ("the Respondent') to cancel the business visa issued to the Applicant pursuant to section 134 of the Migration Act 1958 ("the Act"). At the hearing before the Tribunal the Applicant was represented by Mr T Somerville and the Respondent was represented by Mr G Peek of the Australian Government Solicitors Office.
2. The Tribunal had before it the following documentary evidence:
Exhibit
Description
Date
TD1
Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents) T1-T15, pp1-69
A1
Applicant's Statement of Facts and Contentions
2 January 2003
A2
Affidavit of Mr Garth Mathews
4 February 2003
A3
Affidavit of Mr Rustam Rachmat Tan
15 January 2003
A4
Affidavit of Mr Timothy Somerville
4 April 2003
R1
Respondent's Statement of Facts and Contentions
28 April 2003
3. The Applicant gave oral evidence to the Tribunal, as did Mr Garth Mathews.
BACKGROUND
4. The Applicant, born on 5 August 1962, was granted a subclass 127 business visa on 20 March 1999. The Applicant's wife, Ms Christine Bifitri and their children Rebecca and Ryan, were granted secondary visas. All visas were valid for three years from the date of entry into Australia. The Applicant first entered Australia on 14 May 1999.
5. By letter dated 2 May 2002 the Respondent notified the Applicant of its intention to cancel the Applicant's business visa under section 134 of the Act for failure to meet the requirements of the visa (T10). The Applicant did not submit representations opposing the cancellation of his visa. On 2 September 2002 a delegate of the Respondent decided to cancel the Applicant's visa and those of his wife and children. On 2 October 2002 the Applicant lodged an application for review of the decision to cancel his visa.
LEGISLATION
6. Section 134 of the Act empowers the Respondent to cancel a business visa in certain circumstances. The relevant provisions of the Act in this case are sections 134(1), (2), (3), (5) and (10) which provide as follows:
“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.
…
(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.
…
(10) In this section:
business visa means:
(a) a visa included in a class of visas, being a class that:
(i) has the words "Business Skills" in its title; and
(ii) is prescribed for the purposes of this paragraph; or
(b) a visa:
(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and
(ii)that is of a kind prescribed for the purposes of this paragraph; or
(c)a return visa that is granted to a person who is or was the holder of a business permit or business visa;
that is or was granted on or after 17 February 1992.
designated investment has the meaning given by the regulations.
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.
established business in Australia visa means a business visa a criterion for whose grant:
(a) relates to the applicant having an established business in Australia; or
(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a)
family member's visa means a business visa held by a person:
(a)who is or was a member of the family unit of another person who held a business visa; and
(b)who would not have held the business visa if he or she had never been a member of the family unit of the other person.
investment-linked visa means a business visa a criterion for whose grant:
(a) relates to the holding of a designated investment; or
(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).
member of the family unit has the meaning given by the regulations.
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.
relevant designated investment, in relation to an investment-linked visa (other than a family member's visa), means the designated investment that was, in deciding to grant the visa, regarded as satisfying the criterion referred to in paragraph (a) of the definition of investment-linked visa.
return visa has the same meaning as in the regulations.”
ISSUES
7. The Applicant conceded that the Respondent was properly satisfied that the matters set out in section 134(1)(a),(b) and (c) of the Act had been fulfilled, that is, the Applicant, at the time of the decision under review:
·had not obtained a substantial ownership interest in a eligible business in Australia; or
·was not utilising his skills in actively participating at a senior level in the day to day management of that business; or
·did not intend to continue to hold a substantial ownership interests or utilise his skills as above.
8. The Applicant and Respondent agreed that, while the Tribunal should focus on events and evidence of those events relating to the period up to and including the date of the decision to cancel the visa (2 September 2002), the Tribunal may to consider any evidence relevant to whether the Applicant made a genuine effort to obtain a substantial interest in an eligible business, to actively utilise his skills in participation at a senior level in the day to day management of that business and intended to continue to make such genuine efforts (section 134(2)).
9. Section 134(3) of the Act sets out the matters the Respondent may take into account in determining whether a person has made the "genuine effort" referred to in subsection 134(2). In addition, the government policy set out in the Migration Series Instructions (MSI), at paragraph 4.5.1 lists some factors to be taken into account by decision-makers in determining whether a genuine effort has been made. The Tribunal must therefore, by reference to matters set out in section 134(3) and MSI paragraph 4.5.1, determine whether the Applicant has made a genuine effort of the kind described in section 134(2). Paragraph 4.5.1 of the MSI lists the following factors to be taken into account:
“(a) business proposal which is considered genuine, realistic and achievable;
(b) formal contract with partners or joint venturers;
(c)written evidence of detailed consultations with at least 3 business advisers (accountant, lawyer, bank/financial institution, state/territory government, Business Development Office, AUSTRADE, Business/Trade Association);
(d)physical presence in Australia for more than 6 months since first arrival as a business skills class migrant;
(e)transfer to, and retained in, Australia at least 50% of the funds indicated as available to transfer within two years;
(f)minimum Australian $100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant;
(g)minimum Australian $100,000 business activities as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment eg purchase of shares;
(h)failure to comply with a notice for information under s.137 ie mandatory monitoring of Australian address and return of survey forms.”
applicant's evidence
10. The Applicant confirmed the contents of his affidavit dated 15 January 2003. In brief summary, his evidence was that he is 40 years of age and married with four children, the two younger children born in Melbourne, Australia where he lived from 1979 to 1984. During that time the Applicant completed his High School Matriculation and a Computer Science Course.
11. On returning to Jakarta he worked for Andersen Consulting, installing computer systems. From 1984 to 1991 the Applicant was employed by BDNI, a large Indonesian bank, where he built the bank's computer system for about one year.
12. In 1992 the Applicant met Mr Garth Mathews and Mr Brett Mathews of Secure Parking and has worked with them since that time, establishing Secure Parking's Asian business. The plan for this business was to establish car parking management businesses throughout Asia using management systems created by Secure Parking. They planned to commence business in Indonesia, adapting Secure Parking systems for Asia where car parking rates are much lower than in other parts of the world.
13. The Applicant explained that in 1992 he established PT Securindo Packatama Indonesia ("PTSPI"), a company established under Indonesian law to operate car parking businesses in Indonesia. He said that PTSPI has been managed under his control, in consultation with Brett and Garth Mathews.
14. In his affidavit the Applicant explained the requirements of Indonesian law in relation to foreign owned companies:
"8.Under Indonesian law, it is necessary that all businesses must be conducted by Indonesian citizens or Indonesian companies. Further, with the exception of companies known as 'PMA companies', all of the shareholders, directors and commissioners must be Indonesian. For this reason, Secure Parking had no direct legal interest in the Indonesian car parking business. However, it was always intended that an Australian company be established ("Auspark Asia Pty Limited"), which would hold an interest in the Indonesian car parking business and in the other car parking businesses to be established throughout Asia.
9.It is possible to establish a PMA company, being an Indonesian company in which non-Indonesian parties are entitled to hold shares, and hold office as commissioners and directors, by permission of BKPM, an Indonesian government authority. It has always been intended, that at an appropriate time, the Indonesian car parking business would be converted into a PMA company, with Auspark Asia Pty Limited holding shares therein." (Exhibit A3)
15. In his affidavit, the Applicant stated that from 1992 to 1997 PTSPI established approximately 80 car parks in Jakarta and its surrounds, but that following the Asian currency crisis in 1997 and the looting and ransacking of carparks in May 1998 approximately 23 car parks were closed (Exhibit A3). He stated that from 1999 to the present time, PTSPI has built up its total number of car parks to about 175 in and around Jakarta, about 15 in the Bandung area and two in the Surabayar area of Indonesia.
16. The Applicant explained that the price paid for car parking equipment in Indonesia needs to be substantially less than in the West, as the amounts that could be charged for car parking are so low that such prices could not be paid for the equipment. He stated that it was necessary to devise a computer software system that accommodated this need for inexpensively run car parking facilities. With a team of eight computer programmers and two systems analysts working under the Applicant's authority, such a system was developed and put into use in 1995 and has been evolving ever since.
17. The Applicant also told the Tribunal about discussions that have taken place with Mr Garth Mathews and representatives in Thailand, the Philippines and Shanghai with a view to establishing car parking businesses in those countries.
18. The Applicant said that the Indonesian government authority BKPM has a negative list setting out businesses which are currently not permitted to be conducted by a PMA company and that at present car parking is on that list. He said that he is anticipating that the list will be abolished over time and Indonesia will reduce its rules against foreign ownership. The Applicant said that until the formation of the PMA company he intends to operate the Indonesian business through PTSPI, under a technical assistance agreement between PTSPI and Auspark Asia Pty Limited. Under this agreement Auspark Asia Pty Limited will have profit entitlements and control in relation to the Indonesian parking business conducted in the name of PTSPI.
19. The Applicant said that he and Brett and Garth Mathews have never considered that the formal legal documentation of their business relationship was a high priority. The need for such formal documentation was overlooked in the context of huge pressure in establishing the business in Indonesia, dealing with the social and political unrest in Indonesia and handling the rapid expansion of the business.
20. The Applicant said that since his involvement in the car parking business he has visited Australia approximately four times each year and Garth Mathews has travelled to Indonesia about six times per year. On each visit they met to discuss matters relating to the development of the Asian business. The Applicant also said that he speaks with Garth Mathews approximately three times each week and exchanges e-mails with him on average once or twice per month.
21. The Applicant explained that when he is in Australia he sometimes stays at his brother's home in Roseville and that he uses that address as his Australian mailing address. The Applicant said he did not receive any relevant correspondence from the Department until 9 September 2002, when his brother informed him that he had received a letter cancelling his visa. After the Applicant’s brother checked for further correspondence he told the Applicant that he found a letter dated 13 June 2001 but had not opened it. The Applicant's brother informed the Applicant that he had never received any letter dated 2 May 2002.
22. The Applicant also said that in September 2000 he entered into a contract to purchase a home unit at Southbank in Melbourne for $410,000 and settled that transaction earlier this year. He said that his intention is to live in that home unit with his family. He said he also exchanged contracts to purchase a home unit in Melbourne for $450,000 earlier this year. The Applicant said he has approximately $150,000 on deposit at the Bank of Melbourne.
23. In oral evidence to the Tribunal the Applicant said that his four children go to school at an international school in Indonesia and he has arranged for them to study the UK syllabus so that when he and his family settle in Australia they will experience a less disruptive transition. He said he pays US $10,000 per year school fees at that school.
24. The Applicant said that his two youngest children were born in Australia and have Australian passports.
25. The Applicant also said that he is fluent in Mandarin and has been looking at the Shanghai market which has high growth and stability for expansion through Secure Parking Australia. He said he has had discussions with Garth Mathews about this and it would be his role to oversee China and the rest of Asia should such expansion take place.
26. In cross-examination the Applicant said that it had always been the intention to have a formal arrangement in relation to Auspark Asia Pty Limited but that the timing of the incorporation of that company was related to the cancellation of his business visa. He said that the relationship between his company (PTSPI) and Auspark is such that Auspark will acquire a formal interest in PTSPI, dependant on Auspark becoming a PMA company. The Applicant said he has been trying to convince the Indonesian government that it should regard parking as an industry, but that as yet he has seen no results.
27. The Applicant agreed that so far Auspark has not engaged in any business. He said that PTSPI has repaid loans to Secure Parking Australia that were made in 1992 and 1993 in order to help set up PTSPI's business. He said that the total amount of the loans was approximately US$175,000. He said there was a written agreement, but that interest was not discussed and he did not pay back any more than he had borrowed. The Applicant said the loans were for the purpose of pioneering the car-parking business in Indonesia. He agreed that the loans were a way for Secure Parking to get around the Indonesian law and to enter the Indonesian market and that Secure Parking has received no benefit for the development of the software developed by him.
28. The Applicant agreed that if he were overseeing the Asian part of the business he would be travelling and that he would have to be based in Asia. He stated that his plan was for the family to move to Australia first, but that because he had two more children in 2001 and 2002 they are still residing in Indonesia. The Applicant anticipated that his family could move to Australia when the two youngest children are over five years old, that is in about four to five years time. In re-examination the Applicant maintained that he intended to live in Australia permanently.
29. In relation to the property he owns in Melbourne, the Applicant said that one apartment is being rented out and the other, purchased “off the plan”, is still being constructed.
The Applicant asserted that the address he uses at Northwood is his niece's address and that he was not aware that the Notice of Intention to cancel his visa was sent by the Department to that address.
GARTH MATHEWS’ EVIDENCE
30. Garth Mathews (“Mr Mathews”) confirmed his affidavit dated 4 February 2003 (Exhibit A2). That evidence can be summarised briefly as follows.
31. Mr Mathews said that 23 years ago he established, with his brother, Secure Parking which operates approximately 150 car parks in Australia and has an annual turnover of approximately AUS $120 million. He said that Secure Parking has developed a system for operating a car parking business made up of six elements covering accounting and administration, marketing, human resources, development, operation and audit. He said that over the last 15 years this system has been exported and applied overseas.
32. Mr Mathews said that he has known the Applicant for about 11 years, since they first discussed exporting the Secure Parking System to Indonesia and other Asian countries. Part of the business plan was to develop further computer software specifically designed for car parks in Asia.
33. Mr Mathews asserted that it was also proposed to establish an Australian company to export the Secure Parking system. He said that, on behalf of the business, the Applicant is working on enhancing the system.
34. Mr Mathews confirmed the Applicant's evidence as to the relevant Indonesian legal requirements relating to business, including the establishment of a PMA company and the Indonesian Government's negative list. He confirmed that it is the intention of both the Applicant and himself to convert the Indonesian business into a PMA company, shares in which would be held by Auspark Asia Pty Limited.
35. Mr Mathews maintained that it is common, prior to the formation of a PMI company, for a business to be established and operated by an Indonesian company under a technical assistance agreement with a foreign company, whereby the foreign company is entitled to control and receive profits from the business enterprise.
36. Mr Mathews also confirmed the Applicant's evidence in relation to the proposed development of businesses in Thailand, the Philippines and Shanghai and confirmed that he and the Applicant have visited each other overseas and communicate two to three times per week to discuss business matters.
37. Annexure A to Mr Mathews' affidavit (Exhibit A2) was a copy of the Certificate of Registration of Auspark Asia Pty Limited which shows that registration commenced on 16 October 2002. Annexure B to his affidavit was also a copy of a Technical Assistance Agreement between P.T. Securindo Packatama Indonesia and Auspark Asia Pty Limited.
38. In cross-examination Mr Mathews said that he and the Applicant proceeded to formalise the business arrangement between them because of the Applicant's problem with his visa and their intention to show the genuineness of his effort to engage in business in Australia. He said that there is no opportunity at present for a PMA company to be established in Indonesia.
39. Mr Mathews said that to date Secure Parking has only received from the Applicant repayment of its loans to his Indonesian company and has never shared in profits from Indonesia. He described the Indonesian business as a "battle" all the way through, given the politics in Indonesia and the Asian economic crisis.
40. Mr Mathews described the work that has been done by the Applicant in conjunction with Secure Parking as the acquisition and development of Secure Parking’s software under a gentleman’s agreement with Secure Parking. He said that the proposal was to form a company in Australia that would have the rights to manage operations in Jakarta and then expand in Asia.
41. Mr Mathews said that he had thought that he and the Applicant would have until 2004 to formalise their arrangements and hoped that their PMA company situation would be resolved by then.
OTHER EVIDENCE
42. Annexure A to the affidavit of Mr Somerville, solicitor, (Exhibit A4) is a copy of the Australian Securities and Investment Commission form 207 in relation to Auspark Asia Pty Limited. It shows an issue of 100 shares in the company, with the Applicant holding 10 of those shares. Annexure B to the affidavit is an Index of Company Officers of Auspark Asia Pty Limited which shows that the Applicant is one of three directors of Auspark Asia Pty Limited, along with Brett Mathews and Garth Mathews.
APPLICANT’S SUBMISSIONS
43. Mr Somerville, for the Applicant, submitted that Auspark Asia Pty Limited is an eligible business within the meaning given by section 134(10) of the Act, in that it is developing strong links between Australia, Thailand, the Philippines, China and Indonesia and involves the export of the services of the business, in particular the business system developed by Secure Parking in Australia. The Applicant submitted that his 10 per cent share holding gives him a substantial ownership interest in Auspark Asia Pty Limited in that he is a director, he has the benefit of the shareholders agreement and he takes a strong and active part in management and development of the business.
44. Mr Somerville submitted that the Applicant’s interest in Auspark Asia Pty Limited puts beyond doubt the question of whether his efforts leading up to that interest were genuine. In the alternative, he submitted that the Applicant, together with Garth Mathews and Brett Mathews, developed and implemented a comprehensive business plan for the development of the business. He also submitted that the Applicant is a partner and joint venturer with Brett Mathews and Garth Mathews, that he has been in Australia many times for the last few years in relation to the development of the business, that he has transferred substantial assets to Australia, and that the value of his ownership of the business and the extent of his business activity are substantial. As to whether the Applicant failed to comply with the Notice under section 137 of the Act, Mr Somerville submitted that the Applicant failed to so comply because he did not receive the Notice.
45. Mr Somerville submitted that the loan from Secure Parking to PTSPI is consistent with his evidence of an informal arrangement even if there was some documentation in relation to that loan. He noted that there was no requirement under the loan to pay interest and that the intention was to establish an Asian business, using Indonesia as a starting point, Australia as the hub and to expand throughout Asia. He also submitted that the substantial input by Mr Mathews into the development of the software used in Asia is further evidence of an informal joint venture where the parties did not get around to documenting that joint venture. He said that it illustrates a plausible relationship between two businessmen who trust each other and intend to formalise the arrangement when conditions in Indonesia change. He submitted that the problem faced by the Applicant is one of timing, with the proposed timeline for formalisation dragging on because of delays arising from Indonesia.
46. Mr Somerville also submitted that the fact of the Applicant currently living in Indonesia does not prove that his efforts are not genuine and that there is no requirement under the Act that the Applicant live in Australia when he has relevant business connections here.
RESPONDENT’S SUBMISSIONS
47. Mr Peek, for the Respondent, submitted that the incorporation of Auspark Asia Pty Limited in October 2002 was done solely to provide the basis on which the Applicant could assert that he meets the criteria of subsection 134(2) of the Act, rather than being the genuine culmination of pre-existing business arrangements between the parties concerned. Mr Peek submitted further that it is implausible that there would be no formal agreement in place governing the extent of involvement and remuneration, profit sharing or other considerations if the Applicant and the Australian joint venturers were in fact engaging in business during the ten years prior to incorporation of Auspark. He also submitted that there is no evidence to indicate that the present prospects of PTSPI becoming a PMA company and Auspark Asia Pty Limited acquiring an interest in it are any greater at present than they have been over the past ten years.
48. Mr Peek submitted that the Applicant’s ten per cent shareholding in Auspark Asia Pty Limited does not amount to a substantial interest and referred the Tribunal to its decision in Ong v Minister for Iimmigration and Multicultural and Indigenous Affairs [2003] AATA 178 in that respect.
.
49. Mr Peek submitted that there is no evidence of Auspark having undertaken any business activity at all either under the technical assistance agreement entered into with PTSPI or under any informal arrangement at any time over the past ten years. He submitted that the potential for Auspark to become a shareholder in the Indonesian company was completely frustrated by Indonesian legal requirements.
50. The Respondent submitted that there is no link between the Applicant’s development of specialised software through PTSPI and Auspark which could be regarded as an Australian product or as Auspark having acquired a proprietary interest in that product. Mr Peek highlighted the absence of any licence or similar agreement.
51. As to whether Auspark is an eligible business within the meaning of section 134(10) of the Act, Mr Peek submitted that there is no evidence that these activities have led to the development of business links with the international market and that the proposal to enter markets in Thailand, the Philippines, China and Indonesia do not amount to strong links with those countries. He also submitted that there is no evidence of the company having been involved in exporting Australian goods or services and that Auspark is dependant on capitalising on products already developed by the Applicant in Indonesia.
52. Mr Peek submitted that participation at a senior level in the day to day management of a business, as is required by section 134(2)(b) of the Act, necessitated the Applicant engaging in business from within Australia. He referred the Tribunal to the decision in Ong (supra) and Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299. He submitted that the Applicant’s evidence of his involvement in the business is vague and does not amount to him engaging in business in Australia as contemplated by section 134(2)(b) of the Act.
53. As to the factors set out in paragraph 4.5.1 of the MSI, Mr Peek submitted that there is only vague evidence as to proposals made between the Applicant and his Australian associates and that such proposals must be considered “genuine, realistic and achievable" and that there should be a “formal contract with partners or joint venturers”.. He also submitted that the absence of written evidence of detailed consultations with at least three business advisers highlights the inadequacy of the Applicant’s evidence as to his past business activities. He noted that the Applicant has been present in Australia for only approximately 136 days since his first arrival on the visa on 14 May 1999 and that that falls short of the preferred six months noted in the MSI. He submitted that whilst the Applicant has transferred some funds to Australia for the purchase of property and deposit in banks, there is no evidence of any of these monies having been invested as business capital. He also noted that the value of the Applicant’s interest in Auspark is nominal with no real indicator of its being likely to increase in the foreseeable future and no evidence that the company holds any assets. Nor is there any evidence that the Applicant has generated any turnover at all through Auspark.
54. The Respondent submitted that there is no evidence of any hardship to any members of the Applicant’s family unit, none of whom reside in Australia. Finally the Respondent also submitted that the Applicant’s evidence was that his family will not be coming to Australia for some four to five years and the Applicant therefore will not be in position to take up residence until that time.
CONSIDERATION
55. The issue for the Tribunal to consider is whether the Applicant made a genuine effort to obtain an interest in an eligible business in Australia, as per section 134(3) of the Act. The Tribunal accepts the Applicant's and Mr Matthews’ evidence as follows:
§ The Applicant has been associated with Garth and Brett Matthews and their business, Secure Parking, since 1992 and, through his company PTSP, established in 1992, has operated car parking businesses in Indonesia and developed software for that purpose;
§ An interest free loan of approximately US $175,000.00 was made by Secure Parking to the Applicant’s company, PTSP. The loan has been repaid in full;
§ Indonesian law prohibits foreign ownership of Indonesian companies except by PMA companies which are circumscribed by a negative list of industries in which PMA companies are prohibited from being established. Car parking is one of those prohibited industries and so Secure Parking can have no direct legal interest in the Indonesian car parking business and, to date, Secure Parking has derived no profit from that business;
§ In October 2002 Auspark Australia Pty Ltd was incorporated, with the Applicant having a ten per cent shareholding and a directorship, the remaining shares and directorships residing with Garth and Brett Matthews. There is a technical assistance agreement between Auspark Asia Pty Ltd and PTSPI under which some profit sharing and control may be exercised between the companies. To date no such profit sharing has taken place;
§ The incorporation of Auspark Australia Pty Ltd was prompted at that time by the Applicant’s difficulties with his visa;
§ The Applicant has visited Australia approximately four times per year since his involvement in the car parking business and he has regular contact with Garth Matthews. He purchased a home unit at Southbank, Melbourne this year and has exchanged contracts on another home unit in Melbourne. He also has $150,000 on deposit with the Bank of Melbourne. He has no intention to reside permanently in Australia within the next four to five years.
56. Turning first to the question of whether the business pursued by the Applicant is an eligible business, it is clear that the Applicant’s Indonesian company PTSPI is not. In relation to the business now represented by Auspark Australia Pty Ltd, it could be argued that Auspark will develop business links with Asia, but those links have already been developed informally through Messrs Matthews’ relationship with the Applicant. The proposals of the Applicant and Mr Garth Matthews for expansion of car parks into other parts of Asia are without detail. There is neither evidence before the Tribunal regarding the likelihood of the creation of employment in Australia by the business nor evidence pertaining to the export of Australian goods or services. The Tribunal notes Mr Matthews’ evidence that Secure Parking’s systems have been adapted to the Indonesian market. However, there is no evidence of Secure Parking receiving any return or payment for the use of its model. The business does not involve the production of goods or the provision of services that would otherwise be imported into Australia nor does it involve the introduction of new or improved technology to Australia. There is no evidence that the business’ operations would produce an increase in commercial activity and competitiveness within sectors of the Australian economy.
57. With the possible exception of the creation of business links with Asia, none of the criteria in section 134(10) of the Act are satisfied. The Tribunal is also mindful that legislative requirements in Indonesia prevent direct ownership of any Indonesian car parking business. The technical advice agreement entered into by the Applicant and Messrs Matthews has not been acted on to date and the proposals for expansion into other parts of Asia remain undocumented and somewhat vague.
58. Leaving aside the question of whether the business is an eligible business within the meaning of the Act, the Tribunal considers it appropriate to have regard to the matters set out in section 134(3) of the Act and to paragraph 4.5.1 of the MSI which provides the following guidelines as matters to be taken into account in determining whether a genuine effort has been made:
“(a) business proposal which is considered genuine, realistic and achievable;
(b) formal contract with partners or joint venturers;
(c)written evidence of detailed consultations with at least 3 business advisers (accountant, lawyer, bank/financial institution, state/territory government, Business Development Office, AUSTRADE, Business/Trade Association);
(d)physical presence in Australia for more than 6 months since first arrival as a business skills class migrant;
(e)transfer to, and retained in, Australia at least 50% of the funds indicated as available to transfer within two years;
(f)minimum Australian $100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant;
(g)minimum Australian $100,000 business activities as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment eg purchase of shares;
(h)failure to comply with a notice for information under s.137 ie mandatory monitoring of Australian address and return of survey forms.”
59. There is no evidence before the Tribunal of any business proposals beyond the stated intention to acquire ownership of PTSPI through Auspark Australia Pty Ltd and the stated general intention to expand into other parts of Asia. It is difficult to assess whether the proposals are realistic or achievable given the continuing obstacle to success presented by the legal requirements in Indonesia. To date, no activity has been undertaken pursuant to the technical assistance agreement and in the period prior to the agreement and the incorporation of Auspark Australia, the Applicant appears simply to have had an informal arrangement with Messrs Matthews, under which he was lent, and repaid in full, an interest free loan, was given access to Secure Parking’s management program and had informal and regular discussions in relation to his company’s business in Indonesia.
60. There is neither evidence of any research undertaken in relation to these proposals, nor any evidence, written or otherwise, of detailed consultations with business advisers.
61. The Applicant has been a regular visitor to Australia for short periods over a number of years but has spent less than six months in Australia since his first arrival as a business skills class migrant. He has deposited Aus $150,000.00 with a bank in Australia and purchased real estate but there is no evidence of his having made that money available for Auspark Australia or any other business in Australia. There is no evidence of any business activity by Auspark or of any turnover of any other business in Australia in which the Applicant has an ownership interest.
62. The Tribunal accepts that the Applicant has a business relationship with Secure Parking and its directors, Messrs Matthews, and that it is proposed that this relationship evolve into a structured arrangement whereby Auspark Australia, with the Applicant as a minority shareholder, has ownership of the Applicant’s Indonesian company. However, the impediments to this proposal appear to be so great and so beyond the control of the Applicant and Messrs Matthews, that the proposal could not be considered achievable in the foreseeable future. Furthermore, the method by which those impediments are sought to be circumvented, namely through the technical assistance agreement, entered into after the date of the decision under review, has not, since its execution, been acted upon.
63. Taking all of these matters into account, the Tribunal concludes that the Applicant did not make a genuine effort to obtain a substantial ownership interest in an eligible business in Australia.. The incorporation of Auspark Australia Pty Ltd and the technical assistance agreement between it and PTSPI do not reflect, on the basis of the evidence before the Tribunal, arrangements between the Applicant and his company and Messrs Matthews and Secure Parking in the period up until the reviewable decision was made.
64. The Tribunal does not doubt that the Applicant has worked steadily to expand PTSPI’s business in Indonesia and accepts that, in doing so, he has had numerous discussions with Mr Garth Matthews and received some assistance from him by way of an interest free loan and access to Secure Parking’s programs. However, the Applicant’s activity, and the profits from it, have benefited PTSPI with no return to Secure Parking or, after its incorporation, to Auspark Australia Pty Ltd. There is no evidence before the Tribunal of an absence of profit or return on the part of PTSPI but it was the evidence of the Applicant and Mr Matthews that there has been no return to either Secure Parking or Auspark Australia Pty Ltd. Whilst the Applicant made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of PTSPI, it does not follow that he did so in relation to the business entity now represented by Auspark Australia Pty Ltd.
65. It follows that there is no basis on which the Applicant can avail himself of the provisions of section 134(2) of the Act and, given that he had not obtained a substantial ownership interest in an eligible business in Australia at the time of the decision under review, the Tribunal considers that the Respondent decided appropriately to cancel the Applicant’s business visa pursuant to section 134(1) of the Act.
decision
66. The Tribunal affirms the decision under review.
I certify that the 66 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Member
Signed: L Bonouvrie
AssociateDate/s of Hearing 2 May 2003
Date of Decision 31 July 2003
Solicitor for the Applicant Mr T Somerville
Solicitor for the Respondent Mr G Peek
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