Anwar and Ors and Minister for Immigration and Multicultural Affairs

[2006] AATA 904

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 904

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2005/179-181

GENERAL ADMINISTRATIVE  DIVISION

)

Re

ANG SUGIANTO ANWAR

First Applicant

DINA CHATERINE ANWAR

Second Applicant

MICHAEL JAMES ANWAR

Third Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member

Date23 October 2006

PlacePerth

Decision The Tribunal affirms the decisions under review.

........(Sgd. Mr A Sweidan)............

Senior Member

CATCHWORDS

IMMIGRATION – Business Skills Visa cancellation – failure to acquire substantial ownership interest in eligible business – failure to participate at a senior level in day to day management – genuine effort

LEGISLATION

Migration Act 195 8 (C’th) s 134(1) and (2)

CASES

Hope v Bathurst City Council (1980) 144 CLR 1

Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997

Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54

Lau v Minister for immigration and Multicultural Affairs [2002] AATA 70

Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481

Siwei Wang v Minister for Immigration and Multicultural Affairs [2000] AATA 961

Salim and Ors v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899

Setiawan & Anor v Minister for Immigration and Multicultural and Indigenous Affairs (unreported decision of the AAT, 8 October 2003)

REASONS FOR DECISION

23 October 2006 Mr A Sweidan, Senior Member    

BACKGROUND

1.      This is an application to the Tribunal for review of decisions made by a delegate of the respondent on 2 May 2005 cancelling the business skills (sub-class 127 business owner) visa of Ang Sugianto Anwar (the principal applicant), Dina Chaterine Anwar and Michael James Anwar (the secondary applicants). 

2.      The principal applicant was granted a sub-class 127 business skills visa on 7 January 2002 and first entered Australia on 2 February 2002.

3.      The principal applicant returned the required 24 month survey on 27 February 2004 stating that he had invested $25,000 and obtained 100% ownership in a company called Multi Austindo Trade Pty Ltd on 11 July 2002.  He said that he usually worked 10 hours per week for Multi Austindo Trade which was involved in the export of titanium dioxide to Indonesia.

4.      On 19 January 2005 notices of intention to cancel their visas was sent to each of the applicants at the address provided to the Respondent.

5.      The principal applicant responded with a document entitled Statement and Business Proposals dated 14 February 2005 in which he claimed to be conducting marketing to promote Australian made industrial chemicals to Indonesia and that this had resulted in total sales worth $215,000.  He also advised that Multi Austindo Trade had not been “appropriately capitalised” and that he had been using his Indonesian personal account for expenses and therefore the financial activities of Multi Austindo Trade had been limited.

6.      On 2 May 2005 a delegate of the respondent decided to cancel the principal applicant’s business skills visa and the visas held by the secondary applicants and notice of cancellation was sent to each of the applicants.

Delegate’s Decision

7.      The delegate noted that the principal applicant was the sole proprietor of Multi Austindo Trade but was not satisfied that the principal applicant substantially owned this business as no evidence of an investment of funds had been provided.

8.      The delegate found that Multi Austindo Trade had only engaged in minimal business activity since it had been incorporated in July 2002 and was not satisfied that Multi Austindo Trade was a business in the sense of being a commercial enterprise in the nature of a going concern.  The delegate noted the principal applicant’s claim that he had received commissions from an Australian company exporting chemicals to Indonesia but noted that there was no evidence of any of these transactions in the business bank statements provided.

9.      The delegate also noted that the financial documents revealed that Multi Austindo Trade had only generated an income of $1600 for the 2004 financial year and that as at 31 January 2005 the business only had available funds of $14.60.  The delegate also noted that there was no evidence of any future business activity.

10.     Whilst noting the principal applicant’s claim that he conducted marketing to promote exports from Australia, the delegate also noted that there was no documentary evidence of this.

11.     Overall the delegate found that the principal applicant had not obtained a substantial ownership interest in an eligible business, was not utilising his skills in senior management of such a business on a day-to-day level, nor had he made genuine efforts to do so.

Evidence

12.     The applicants all gave evidence in support of their applications.

13.     The principal applicant testified that he had set up a company known as Multi Austindo Trade in July 2002.

14.     He said that this company was set up to export titanium from Australia to Indonesia and other countries.

15.     It appears that Multi Austindo Trade only exported titanium on 5 occasions and in each instance the buyer was a company in Indonesia owned and run by Mr Anwar’s brother-in-law.

16.     Mr Anwar’s brother-in-law, Mr Ming Hoei, gave evidence by telephone from Singapore.

17.     Mr Anwar acknowledged that his wife works for his brother-in-law’s company in Indonesia and that he himself is a shareholder in his brother-in-law’s company.

18.     Mr Anwar’s evidence was further that Multi Austindo Trade had made $800 per shipment approximately on each of the 5 shipments which he described as “commission”.

19.     Mr Anwar also claimed that he had conducted marketing to promote exports from Australia and had met with Indonesian buyers for that purpose.

Michael Anwar

20.     Michael Anwar stated that the cancellation of his visa will lead to a disruption in his studies and to his plans to study engineering at an Australian university.

Dina Anwar

21.     Dina Anwar stated that the cancellation of her visa will disrupt her plans to live in Sydney with her husband.

Legislation and Policy

22. Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if she is satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, or does not intend to do these things.  The Minister must not cancel the visa if she is satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts.

23. Eligible business and ownership interests are defined in section 134(1) of the Act and discussed at paragraph 4.3 of the MSI-133.

24. Section 134(10) provides that 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 and 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; and

f.      an increase in commercial activity and competitiveness within sectors of the Australian economy.

25.     Paragraph 4.3.2 of the MSI-133 notes that eligibility relates to achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.

26.     The secondary applicants filed applications in their own right but made no express claims of extreme hardship. The onus is on the secondary applicants to establish that they have suffered extreme hardship of the kind set out in the by the authorities.

27.     The respondent submits that the delegate’s decision should be affirmed because:

(a)The principal applicant has failed to obtain a substantial ownership interest in an eligible business in Australia;

(b)the principal applicant has failed to utilise his skills in actively participating at a senior level in the day-to-day management of the business; and

(c)the principal applicant has failed to make any efforts to obtain a substantial interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business. 

28. Section 134(3) provides a list of matters that the Minister may take into account when determining whether a person has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his skills in actively participating at a senior level in the day-to-day management of that business.

29.     Notes to guide the interpretation of these matters are provided at paragraph 4.5 of the MSI-133.  The matters that may be taken into account, and the notes to their interpretation provide as follows:

a.business proposals that the person has developed.  The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;

b.the existence of partners or joint ventures.  The MSI refers to whether there is a formal contract with partners or joint venturers;

c.research that the person has undertaken into the conduct of an eligible business in Australia.  The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;

d.the period or periods during which the person has been present in Australia.  The MSI refers to whether there has been physical presence for more than 6 months since the first arrival as a business skills migrant;

e.the value of assets transferred for use in obtaining an interest in an eligible business.  The MSI refers to whether there has been transfer to and retained in Australia at least 50% of the funds indicated as available for transfer within the 2 years;

f.the value of ownership interest in the eligible business in Australia which is or has been held by the person.  The MSI refers to whether there is or has been a minimum Australian $100,000.00 or 10% ownership held by the person and provides that if the person is no longer in the business the reasons for loss of ownership are relevant;

g.the business activity that is or has been undertaken by the person.  The MSI refers to whether there is a minimum of Australian $100,000.00 business activity as indicated by turnover and provides that this may include other business activity not considered as an eligible business but cannot include passive investment, for example the purchase of shares;

h.whether the person has failed to comply with a notice under section 137.  The MSI refers to whether there has been a failure to comply with a notice for information under section 137, i.e. mandatory monitoring of Australian address and return of survey forms; and

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 on the day-to-day management of the business:

i.the length of time the person held the ownership interest or participated in the management as the case requires; and

ii.the reason why the person no longer holds the interest or participates in the management as the case requires.

ANALYSIS AND FINDINGS

Substantial ownership interest in an eligible business in Australia

Substantial ownership

30. Sections 134(1) and (2) of the Act require the visa holder to obtain a substantial ownership interest in an eligible business in Australia.

31. Section 134 defines “ownership interest” in relation to a business to mean an interest held by the visa applicant in a 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 a business;

(d)including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

32.     The principal applicant holds 100% ownership of Multi Austindo Trade and the Tribunal finds that this represents a substantial ownership interest.  However, the Tribunal is of the view that Multi Austindo Trade is not an eligible business.

Eligible business

33. The definition of an eligible business is set out in section 134(1) of the Act. A business must meet at least one of the criteria set out in paragraphs (a) to (f) of the definition in order to be classified as an eligible business. In the Tribunal’s view none of them are met in this case.

34.     The Tribunal has previously found in other cases that the reference in subsection 134(1)(b) to the “day-to-day management of the business” indicates that an eligible business must have some element of continuity and repetition.  Applying Mason J’s formulation of “carrying on a business” from Hope v Bathurst City Council (1980) 144 CLR 1, Deputy President McMahon found in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997 at [20] that the construction of “participating in the day-to-day management of the business” for subsection 134(1)(b) required a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis.

35.     The Tribunal finds that the business activities of the applicant through Multi Austindo Trade do not meet the criteria of an eligible business. The business activities have not developed business links with the international market, created or maintained Australian employment, increased commercial activity and competitiveness within any sector of the Australian economy, produced goods or services that would otherwise be imported into Australia or introduced new or improved technology into Australia.

36.     The principal applicant provided evidence of 5 transactions involving the export of titanium dioxide to a company in Indonesia.  However, there is no evidence that Multi Austindo Trade made any profit from these sales.  The principal applicant claims to have received a commission from the sale of these exports but there is no evidence that Multi Austindo Trade has received any significant income.  The business’ bank balance is negligible and the taxation return provided indicates that income of only $1,600.00 was received with no consequent taxation paid.

37.     The principal applicant stated that the sole purchaser for the exports is his brother-in-law’s Indonesian company in which he has an interest.  There is an absence of any evidence of profits or meaningful commission paid to Multi Austindo Trade as a result of these exports.  In the Tribunal’s view the evidence suggests that the purported business activities of Multi Austindo Trade are little more than a sham.

38.     The Tribunal is satisfied that the activities conducted by Multi Austindo Trade are minimal and that it is not a business in the sense of being a commercial enterprise in the nature of a going concern.

39. Accordingly, the Tribunal is of the view that Multi Austindo Trade is not an eligible business within the meaning of section 134(10) of the Act.

Active participation at a senior level in the day-to-day management of an eligible business

40.     The Tribunal also finds that the principal applicant has failed to demonstrate that he has utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business.

41.     The Tribunal should not exercise its discretion to set aside the visa cancellation decision unless it is satisfied that the principal applicant is utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business or has made and intends to continue to make genuine efforts to utilise his skills in actively participating at a senior level in the day to day management of the business.  The Tribunal is not satisfied that this is the case.

42.     The Tribunal notes that in the 3 year period up to the date of cancellation of the visa, the principal applicant spent 99 days in Australia. 

Genuine effort to obtain a substantial ownership interest in an eligible business in Australia and to utilise skills in actively participating at a senior level in the day-to-day management of the eligible business

43.     In determining whether the principal applicant has made a genuine effort, the Tribunal should only look at events, actions and intentions that existed prior to the cancellation of the visa (Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54).

44.     However, the Tribunal when reviewing visa cancellation decisions can consider activities after cancellation in situations where there is evidence of prior intentions (Lau v Minister for immigration and Multicultural Affairs [2002] AATA 70).

45.     Paragraph 4.5.1 of the Migration Series Instructions provides a list of factors that decision-makers may look at when determining whether a genuine effort has been made.

46.     The Tribunal finds that the principal applicant has not made a genuine effort either to obtain a substantial ownership interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of the eligible business.  With reference to paragraph 4.5.1 of the MSI the Tribunal notes that:

a.a detailed and realistic business plan has not been provided;

b.there is no written evidence of detailed consultations with at least three business advisors;

c.evidence of business activity has been extremely limited;

d.there is no evidence that the principal applicant has conducted any market research to assist in the development of the activities for the business;

e.whilst there is evidence of turnover, there is no evidence that this is geared towards securing a profit.

47.     The Tribunal finds that the principal applicant’s purported efforts do not amount to genuine efforts but were simply an attempt to avail himself and his family of the benefits that flow from the visas.

SECONDARY APPLICANTS

Extreme Hardship

48. Consideration of whether a secondary visa holder will suffer extreme hardship as a result of the cancellation decision necessarily requires an assessment of what constitutes extreme hardship for the purposes of s134(5) of the Migration Act 1958 (the Act).  

49.     The meaning to be ascribed to the words "extreme hardship" was considered by the Federal Court in Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481. Foster J stated at [25] -[26]:

“… 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 the 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 connotes an area within which an ascertainable burden of hardship may fall and properly merit the description ‘extreme’.”

50.     Hardship must be judged subjectively.  Clearly, hardship involves more than inconvenience or detriment.  The effect suffered must be to a considerable degree before it can properly be called hardship (Siwei Wang v Minister for Immigration and Multicultural Affairs [2000] AATA 961).

51.     In Siwei Wang (supra) Deputy President McMahon also considered the significance that should be ascribed to the word "extreme" as used in the statute:

“…The meaning of words will always be taken from the context in which they appear. However, the deliberate choice of the word ‘extreme’ by Parliament, requires one to understand what was meant by the use of that particular degree of hardship. There are many meanings of the word ‘extreme’ offered in the Macquarie Dictionary. Some of the more helpful suggestions are ‘of a character or kind farthest removed from the ordinary or average’, ‘utmost or exceedingly great in degree’, ‘farthest, utmost or very far in any direction’, ‘going to the utmost lengths, or exceeding the bounds of moderation’, ‘the utmost or highest degree, or a very high degree’.

52.     In Salim and Ors v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899 Deputy President Purvis stated at [44] - [47]:

“As has already been noted in these reasons it is the hardship that will most certainly occur as a consequence or result of the cancellation that is relevant and it is for the decision maker to be satisfied  that this hardship will be extreme before the legislative cancellation can be avoided. It is not the need to leave Australia that evidences the hardship, for this is the contemplated legislative result of the cancellation. It is the subjective consequences to the secondary visa holder that would undoubtedly or almost certainly result from the cancellation that is to be seen as constituting extreme hardship.

Each of the Applicants will experience emotional hardship if required to leave Australia, they having spent a part or whole of their formative years in this country, having received a part or whole of their secondary education and tertiary education at Australian schools and universities and having consequently formed a bonding with those with whom they came in contact whilst holding their visas. There is evidence as to each of them being held in high regard by their peers, social friends and academic acquaintances.

However, it would be strange or unusual and unexpected if three relatively young, intelligent and capable persons had not in the years developed such relationships. It will be hard to leave these people. It will be hard to readjust to a life outside Australia and the university environment. But this hardship is one within the contemplation of the legislature when it chose to insert the word ‘extreme’ as to qualify the hardship. And it must be ‘extreme’ to the particular individual.

The Tribunal does not consider that the hardship that will undoubtedly be experienced by each one of the Applicants is exceptional, unexpected or of such a nature as to qualify for the description of exceedingly great in degree. Unfortunate yes, emotional yes, financial yes to a degree. But not extreme.”

53.     As already noted it is clear that the onus is on the applicants to provide evidence that they will suffer extreme hardship (Setiawan & Anor v Minister for Immigration and Multicultural and Indigenous Affairs (unreported decision of the AAT, 8 October 2003).

54.     With regard to the secondary applicants, while they gave evidence claiming that they would suffer hardship if their visas were cancelled, the Tribunal is of the view that they have not demonstrated extreme hardship on the basis set out in the authorities and, in particular, as set out in the cases of Salim and Siwei Wang.

Decision

55.     The Tribunal affirms all of the decisions under review.

I certify that the preceding 55 paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed:         .........(Sgd. Ms R Riberi)..............................
   Associate

Dates of Hearing  13 July 2006
Date of Decision  23 October 2006
Solicitor for the Applicants        Self-represented
Solicitor for the Respondent     Mr A Gerrard, Australian Government Solicitor