Dharsiono and Minister for Immigration and Multicultural Affairs
[2006] AATA 786
•13 September 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 786
ADMINISTRATIVE APPEALS TRIBUNAL № V2005/799
GENERAL ADMINISTRATIVE DIVISION
Re: DHARSIONO DHARSIONO
Applicant
And:minister for IMMIGRATION and multicultural AFFAIRS
Respondent
DECISION
Tribunal: Mr C. Ermert, Member
Date:13 September 2006
Place:Melbourne
Decision:The decision under review is affirmed.
(sgd) C. Ermert
Member
MIGRATION – business skills visa – cancellation – whether business – whether eligible business – whether utilising skills in day-to-day management of business – whether genuine effort
Migration Act 1958
ACI Pet Operations Pty Ltd v Comptroller-General of Customs (1993) 118 ALR 114
Chen and Ors v Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628
Foo and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 216
Freeman v Secretary, Department of Social Security (1988) 87 ALR 506
Griffiths and Migration Agents Registration Authority [2001] AATA 240
Haman and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113
Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 28 ALD 50
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Lau v Minister for Immigration and Multicultural Attairs [2002] AATA 703
Lioe and Minister for Immigration and Multicultural Affairs [2006] AATA 189
Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513
Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257
Puzey v Federal Commissioner of Taxation [2003] FCAFC 197
Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581
Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
REASONS FOR DECISION
13 September 2006 Mr C. Ermert, Member
INTRODUCTION
1. Mr Dharsiono was granted a Business Skills (subclass 127) visa on 22 November 2001. His first stay in Australia commenced on 11 March 2002 and lasted 22 days. He made 3 subsequent visits to Australia. In total, he was in Australia for 47 days. On 5 August 2003 Mr Dharsiono registered a business in the name of HSL Trading Pty Ltd (HSL). He owned one third of its shares.
2. HSL arranged a sale of Bluescope Steel product from Australia to Indonesia on 4 May 2005, with three subsequent sales in the period to 20 March 2006. HSL imported foodstuffs from Indonesia for sale in Australia starting on 29 May 2004 and this is continuing. HSL was also involved in other trading transactions involving the importation of various products, from countries other than Australia, into Indonesia. Mr Dharsiono makes and maintains business contacts in Indonesia. He employs Mr Lim to run the business activities in Australia. Mr Dharsiono is also an active director of an Indonesian company that imports steel products into Indonesia for on-sale to customers in Indonesia.
3. In accordance with the requirements of his visa, Mr Dharsiono was required to file a 24 month survey by 23 April 2004. Mr Dharsiono provided the survey on 27 April 2004. A delegate of the respondent was not satisfied that HSL was an eligible business as defined in the Migration Act 1958 (the Act), and on 8 March 2005 the delegate issued Notices of Intention to Cancel Mr Dharsiono’s visa. On 12 May 2005 Mr Dharsiono provided written submissions and further documentation. However, on 4 August 2005 a delegate of the respondent decided to cancel his visa.
4. Mr Dharsiono claims that HSL is an eligible business in that it has traded in the export of Bluescope steel to Indonesia and in the import of foodstuffs into Australia. HSL also provides employment in Australia. Accordingly, on 7 September 2005 he applied to this Tribunal for a review of the delegate’s decision.
THE HEARING
5. At the hearing the applicant was represented by his solicitor, Mr K. Kabo, of Kabo Lawyers, and the respondent was represented by Mr M. Brereton, a solicitor with the Australian Government Solicitor. The applicant gave oral evidence in the Indonesian language with the assistance of an interpreter. The Tribunal received into evidence the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1 – T15) as well as documents tendered by the applicant (A1 – A21). Subsequent to the hearing, and as directed by the Tribunal, the applicant provided further documentation relating to HSL trading activities. The respondent reviewed the documents and lodged comment in response.
THE ISSUES
6.Relevantly, section 134(1) of the Act provides:
(1)Subject to subsection (2) … the Minister may cancel a business visa … 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.
7.Section 134(2) of the Act provides:
(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
8.The issues in this case are:
· does Mr Dharsiono hold a substantial ownership interest in HSL?
· is HSL a business?
· is HSL an eligible business?
· is Mr Dharsiono actively participating at a senior level in the day-to-day management of HSL?
· does Mr Dharsiono intend to continue to make an effort to actively participate at a senior level?
EVIDENCE TO BE TAKEN INTO ACCOUNT
9. A preliminary issue to be determined was that relating to the material that can be taken into account in reaching a decision in this case. Mr Kabo submitted that the Tribunal could take into consideration material relating to matters that occurred after the date of the visa cancellation. Mr Kabo referred to Lau v Minister for Immigration and Multicultural Attairs [2002] AATA 703, in which the Tribunal said at paragraph 24:
… The Tribunal is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist in the determination of whether or not the decision to cancel is the correct or preferable one (Re Chen and ORS and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628). Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 states the position as follows:
…
41. Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, it that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision-maker or in existence at the time that the decision under review was made.
10. Mr Kabo also referred to Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997 in which the Tribunal said at paragraph 9:
… The ordinary principles of administrative review apply. It is the function of this Tribunal to deal with the question having regard to the evidence put before it at the time and having regard to all facts and circumstances that have occurred up until the date of the hearing.
11. In his final submissions Mr Brereton addressed this issue by referring to Griffiths and Migration Agents Registration Authority [2001] AATA 240
... and other cases continuing from there, which essentially establish the proposition that with a visa cancellation the Tribunal is restricted to looking at the information that existed at the time of the cancellation decision. This applies generally unless there can be found a close nexus between subsequent information or subsequent evidence, and an intention or activities that arose beforehand. (Transcript page 83)
12. In considering the issue of what evidence is to be taken into account, I turned to a decision by Senior Member Dwyer and Member McLean in Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 in which they reviewed the following relevant decisions:
· Lau v Minister for Immigration and Multicultural Affairs [2002] AATA 703 at [24] (Member Carstairs)
· Freeman v Secretary, Department of Social Security (1988) 87 ALR 506 at 509 (Davies J)
· Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 28 ALD 50 at 59 (Full Court)
· ACI Pet Operations Pty Ltd v Comptroller-General of Customs (1993) 118 ALR 114 at 141-142
· Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513 at 526
· Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257, at p264 (Katz J)
· Griffiths and Migration Agents Registration Authority [2001] AATA 240 at 39 (Deputy President Forgie)
· Haman and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113, at 52 and 53D (Deputy President Hotop)
· Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54 (Deputy President Handley)
13.As a result of this review the Tribunal in Yam determined, at paragraph 14:
We have concluded that we should follow the approach adopted by the Federal Court in Sharma and Wong (sic), and by Deputy Presidents Forgie, Handley and Hotop. We will therefore confine our consideration to material that relates to relevant “events, actions or intentions” prior to or at the time of the cancellation decision…
14. I will adopt the same approach in this matter and confine my consideration to material that relates to relevant events, actions or intentions that existed prior to or at the time of the cancellation decision, namely 4 August 2005.
Does Mr Dharsiono Hold a Substantial Interest in HSL?
15. At the commencement of the hearing Mr Brereton stated that the respondent accepted that Mr Dharsiono has a substantial ownership interest in HSL. I accept this element as being satisfied and do not consider it further.
Is HSL a Business?
16. In considering the meaning of business I turned to the Full Federal Court (Hill and Carr JJ with whom French J agreed) in Puzey v Federal Commissioner of Taxation [2003] FCAFC 197, in which their Honours made the following comments regarding the carrying on of a business at paragraphs 47 and 48:
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 as 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).
17. I also considered the decision of Deputy President McMahon in Tang in which he said at paragraph 20:
On these facts, it seems to me that Tiproll Pty Limited is not carrying on a business and its activities are therefore not an eligible business. The reference in subparagraph 134(1)(b) to the "day-to-day management of that business" indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council (1980) 144 CLR 1, Mason J considered that the use of the phrase "carrying on the business", as a qualifier of the noun "business", required that there be a commercial enterprise in the nature of a going concern "that is activities engaged in for the purpose of profit on a continuous and repetitive basis". Similar qualifying words in section 134 would compel a similar result (emphasis added).
18. Mr Kabo submitted that HSL has been engaging in export, import and trading activities for the purpose of profit on a continuous and repetitive basis, qualifying it to be a business for the purposes of the Act. I considered the company’s activities in turn.
Export Business
19. In support of his contention that Mr Dharsiono was engaged in export activities Mr Kabo referred to the following four exports of Bluescope steel products to Indonesia detailed in Exhibit A21:
· E1 – 4 May 2005, USD $91,500, from Bluescope Steel - Completed;
· E2 – 30 Nov 2005, USD $88,000, from Bluescope Steel – Completed;
· E3 ‑ 23 February 2006, USD $123,750, from Bluescope Steel – Partially completed; and
· E4 – 20 March 2006, USD $167,000, from Bluescope Steel – Contract stage.
20. Referring to these activities Mr Brereton submitted that HSL was not undertaking the export activity on a continuous and repetitive basis for the purpose of profit. Prior to the cancellation of the visa, HSL had completed only one export transaction. He noted that there is no evidence regarding profit made from the transactions. The transactions occurred after the Notice of Intention to Consider Cancelling the visa was issued and Mr Brereton submitted that the exports were not repetitive but were ad hoc transactions, entered into in an attempt to satisfy the applicant’s visa conditions.
21. On the issue of there being only one transaction prior to the date of cancellation of the visa I adopt my reasoning in paragraph 13. I accept that the transactions after the cancellation date are orders that follow on from the order transacted prior to the cancellation date and are sufficiently connected to that order to be taken into consideration. If they are activities for the profit of HSL then I accept that the group of the four transactions to date represent activities of a repetitive nature, rather than merely ad hoc transactions as submitted by Mr Brereton.
22. There is a difficulty, however, in determining whether the transactions were activities of HSL acting as a company, or activities of Mr Dharsiono acting as an agent for the Indonesian company, PT Sinar Djaja Can (Sinar Djaja). In answer to questions from Mr Brereton, Mr Dharsiono agreed that it was really Sinar Djaja that was importing the steel from Bluescope and selling it to customers in Indonesia. Mr Dharsiono gave evidence that he has a 16% share holding in Sinar Djaja and works in the area of sales for that company. Sinar Djaja also imports steel from Korea. It uses 50% to 60% of the imported steel itself and sells the rest to other buyers. Mr Dharsiono agreed that HSL was established to provide liaison with Bluescope and facilitate the orders for Sinar Djaja.
23. In his final submissions Mr Brereton contended that the reality of the export transactions is that they are the transactions between Bluescope Steel and Sinar Jaja (sic). HSL really was not an integral part of those transactions in any shape or form and cannot therefore be seen, in my submission, to have been making export of Australian products (Transcript page 83).
24. After considering the evidence before me, I accept Mr Brereton’s submission. Mr Dharsiono’s role in the transactions involving Bluescope Steel appears to me to be that of a buying agent for Sinar Djaja rather than an exporter on behalf of HSL. In addition, there is no identifiable profit recorded for HSL from these transactions. These transactions appear to be a commercial enterprise of Sinar Djaja rather than of HSL. I find that the export transactions relating to Bluescope Steel are not commercial enterprises on behalf of HSL and therefore do not, of themselves, indicate that HSL is a business as at the date of 4 August 2005.
25. Mr Dharsiono also gave evidence regarding the export of sugar, meat and corned beef from Australia to Indonesia. None of these activities took place before 4 August 2005; nor was there evidence of any connection with activities that occurred before 4 August 2005. Hence the export or potential export of sugar, meat and corned beef do not assist in determining that HSL was a business as at the date in question.
Import Business
26. Mr Dharsiono gave evidence that he commenced importing foodstuffs and other items from Indonesia to Australia in 2003. He stated that he has imported products into Australia on six occasions. Imported items included bread wafer sticks, canned sardines, instant noodles, peanuts and sealing tape. Mr Dharsiono referred to Exhibit A21 which detailed the import activities of HSL. The six activities are:
· I1 – 29 May 2004, USD $7,988.75, From P.T. Garuda Food – Completed;
· I2 – 21 September 2004, AUD $15,674.42, From C.V. Sukma Jaya Tehnik – Completed;
· I3 – 14 October 2004, USD $14,536, From King Lucky Food Ind. Corp. ‑ Completed;
· I4 – 2 April 2005, USD $6,3600, From P.T. Sayap Mas Utama ‑ Completed;
· I5 - 1 February 2005 and 10 March 2005, USD $4,164 and USD $3,905, Multiple shipment from – P.T. Garuda Food and C.V. Sukma Jaya Tehnik – Completed; and
· I6 – 22 August 2005, USD $3,118.75, From P.T. Garuda Food – Completed.
27. Mr Dharsiono stated that the imported goods are sold to ten or fifteen small grocery dealers in Australia. Mr Dharsiono referred to the annual financial report of HSL for the financial year 2004/2005 (Exhibit A11) which showed a figure for Sales of $395,241.08 and a Gross Profit of $73,619.24. In his evidence, Mr Alwin Lim, a director of HSL provided further detail of the profits made by HSL. He stated that HSL usually takes a gross profit of 20 per cent on all imported products.
Trading activities
28. Mr Dharsiono also gave evidence of some other trading activities conducted by HSL. They are listed in Exhibit A21 as follows:
· T1 – 7 November 2003, Buy price USD $46,275.60, Sell price USD $53,727.00;
· T2 – 10 November 2003, Buy price USD $46,275.60, Sell price USD $53,727.00;
· T3 – 31 August 2004, Buy price USD $18,869.00, Sell price USD $23,869.00;
· T4 – 10 November 2003, Buy price USD $17,000.00, Sell price USD $17,800.00; and
· T5 – 14 April 2004, Buy price USD $19,400.00, Sell price USD $20,101.95.
29. The evidence was that these trading transactions involved the buying of tomato paste and other foodstuffs from countries other than Australia and importing them for sale into Indonesia. While these trading activities do not involve import or export of goods into or out of Australia, they nevertheless represent activities that are undertaken for profit. In that regard Mr Lim gave evidence that HSL usually takes between two and five US dollars per metric tonne of goods involved in its trading activities.
30. Having regard to both its importing and trading activities, I am satisfied that HSL conducted a number of import and sale transactions that are activities engaged in for the purpose of profit on a continuing and repetitive basis. On the basis of its importing and trading activities I consider HSL to be a business under the Act as at 4 August 2005.
Is HSL an Eligible Business?
31.Sub-section 134(10) of the Act defines an eligible business as:
… 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;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
32. Mr Kabo contends that HSL is an eligible business in that HSL has developed business links with the international market, it has created employment in Australia and it has exported Australian goods to Indonesia. These contentions will be examined separately below.
Business Links with the International Market
33. Mr Kabo submitted that HSL is involved in the development of business links with an international market being the market in Indonesia for steel products produced in Australia, the export of Australian goods to Indonesia and the import of Indonesian goods into Australia.
34. I considered first the development of business links from the export activities of HSL. Mr Brereton submitted that there is no evidence that the steel transactions involved the development of business links with overseas buyers of Australian steel that would generate future demand for Australian goods. He submitted that business links were not developed as a result of any activity by HSL; rather the links were attributable to Mr Dharsiono’s involvement with both Sina Djaja and HSL.
35. In regard to the export of steel products, I have already found that the activities are not those of the business of HSL, rather they are a result of Mr Dharsiono acting as an agent for Sinar Djaja to facilitate that company’s purchase of steel direct from Bluescope rather than from the agent in Singapore. The transactions are essentially those of Sinar Djaja and not of HSL. There is no evidence that future transactions with Bluescope will involve any parties other than Sinar Djaja and HSL, that involvement being only one of Mr Dharsiono acting as an agent for Sinar Djaja. Accordingly, I find that the claimed activities of exporting steel did not and will not result in the development of business links with the international market.
36. In regard to the export of other Australian goods to Indonesia, I found earlier that none of the other activities claimed as export activities took place before 4 August 2005, nor was there evidence of any connection with activities that occurred before 4 August 2005. As a consequence, at the date of the decision these activities could not be considered as resulting in the development of business links with the international market.
37. In regard to the import of Indonesian goods into Australia, there is evidence of six import activities between 29 May 2004 and 22 August 2005. HSL sales during the 2004/2005 financial year are reported as $395,241.08 (Exhibit A11), with an increase planned for the 2005/2006 financial year. Mr Dharsiono gave evidence that HSL is the sole distributor into Australia for two Indonesian companies PT Manohama and PT Garuda Food (Transcript page 54). However, there are no companies in Australia who only get their supplies from HSL.
38.Mr Brereton submits:
…that HSL is one of many companies which are importing foodstuffs from Asia for sale in markets and grocery businesses here in Australia.
There is no evidence of any development of particular links or links of some remark other than just simply as an importing company. The evidence that HSL holds sold (sic) importing rights for a number of Indonesian companies, in my submission goes more to the Indonesian aspects of HSL and the benefit that HSL may provide to the Indonesian export market rather than any positive benefit or development of a link here in the Australian market. (Transcript pages 83-84)
39.In his written submission Mr Brereton also included:
The respondent submits that a market for imported Asian foodstuffs in Australia was already well-established before HSL began importing foodstuffs in July 2004. Accordingly, the respondent submits that the importing activities of HSL have not developed business links with the international market: Foo and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 216 at [26].
40. The business being conducted in Foo was largely the ordering of American produced goods in Hong Kong, via an Australian distributor, for export into Hong Kong. The Tribunal said the following on the issue of business links:
26. ...
(a) The development of business links with the international market
The applicant maintains there is huge potential in the Chinese market, and Sunkee is a company involved in that market, which can do business in China. In my view, 3M has distributors already in Hong Kong and China, and that is the same product the applicant is importing into Hong Kong. The Sunkee business is not developing links with the international market. This requirement has not been met.
41. There are some similarities between Foo and this case in regard to the trading activities shown in Exhibit A21. The trading activities involved the buying of foodstuffs in China and their sale in Indonesia. The importation of Indonesian foodstuffs into Australia for sale to the restaurant and grocery market is different from either of the above. The goods are imported into Australia, sold in Australia and consumed in Australia. As a result, I do not regard the decision in Foo to assist in regard to the claimed importation activities of HSL.
42. In considering this issue I turn to the wording of the relevant section of the definition of eligible business in section 134(10) of the act which includes:
(a)the development of business links with the international market
43. This wording does not qualify the term business links. It does not require the links to be particular links nor links of some remark; nor does it specifically require that the development of the links provide a benefit in the Australian market. The development of the sole distributor agreements with two Indonesian companies, and the undertaking of commercial transactions within the terms of these agreements, in my view constitute the development of business links with the international market. The fact that these agreements were only oral agreements before 4 August 2005 does not negate the existence of such agreements, particularly as the agreements have been subsequently exercised.
44. The satisfaction of any one of the elements of the section 134(10) definition is sufficient to find that the business is an eligible business. Nevertheless, I will also consider the remaining elements of the definition.
Employment
45. I turn next to subsection (b) the creation or maintenance of employment in Australia. In his submissions Mr Kabo stated:
… that Mr Lim is –although he is a director he is also an employee of the company. The company employs five people, four of them on a casual/part-time basis. And Mr Lim is paid from – lower than the going rate, because he’s also been given shareholding and a management position on top of that. (Transcript page 81)
46.In his response on this issue Mr Brereton submitted:
In terms of employment, there is certainly one full-time employee here in Australia, Mr Lim. We have heard evidence that there are now four casual employees. Whether the Tribunal is satisfied that this would satisfy that condition that it is actually creating and maintaining employment within Australia, to that the respondent would say the Tribunal should consider firstly that they are casual positions. It’s not necessarily maintaining employment. It is a position which may be there today, may not be there tomorrow. It’s wholly dependent on the economic climate at the time. (Transcript page 84)
47. In considering this issue I note also the wages and salaries figure of $15,911.20 reported in the profit and loss statement for financial year 2004/2005 (Exhibit A11). The wages and salaries figure reported for the period July 2005 through February 2006 (Exhibit A12) is $19,749.80, which if continued for the remainder of the 2005/2006 financial year would show a considerable increase over the previous year’s figure.
48. Mr Lim gave evidence that his gross salary per year was around $20,000. I note this aligns reasonably with the figure reported in Exhibit A11. Mr Lim also gave evidence that the company now employs four or five permanent Australian residents as casual employees, working one or two days a week. This is because the business has grown too big for Mr Lim to handle alone. He stated that the company intends to maintain about four employees for quite a while.
49. The definition of eligible business in section 134(10) of the Act requires only the creation or maintenance of employment. I consider that HSL satisfies this requirement in that, at the relevant time, it employed Mr Lim. HSL maintains that employment for Mr Lim and in addition HSL has created employment for four casual employees and there is evidence that the employment will continue.
Other Provisions of Section 134(10)
50. The next provision of the definition of eligible business requiring the export of Australian goods and services has been largely covered by my reasoning in paragraphs 24 and 25 in which I found that the activities involving Bluescope Steel were not commercial activities of HSL and that the other claimed potential export activities were not eligible to be considered as they had no connection with any activities occurring prior to 4 August 2005.
51. Other provisions of the definition of eligible business require the production of goods or provision of services that would otherwise be imported into Australia, the introduction of new or improved technology to Australia or an increase in commercial activity and competitiveness within sectors of the Australian economy. Mr Kabo made no submissions and presented no evidence on these issues. They are not considered further.
Eligible Business
52. As HSL has satisfied the requirements of subsections (a) and (b) of the section 134(10) definitions I find that in this case HSL was an eligible business as at 4 August 2005.
Is Mr Dharsiono Actively Participating at a Senior Level in the Day-To-Day Management of HSL?
53.On this issue Mr Dharsiono gave evidence that:
My role involves contacting the suppliers in Indonesia. Doing business with companies in Indonesia, it’s not possible to always work with email. You quite often have to talk directly by telephone or even face-to-face … It’s a continuing involvement. We have to keep in touch with the customers here to follow up contacts... (Mr Kabo) And you did mention that Mr Lim, Alwin Lim, is the person in charge of Australia – Yes. (Mr Kabo) Would you explain to the Tribunal how you work with Mr Alwin Lim in Australia – Everything that we do is discussed between the two of us, in particular pricing, and the policy, for example, whether we advertise first or take some profit in the early phases of transactions. These are discussed with Mr Lim by telephone and by email. (Transcript pages 30 and 31)
54. Mr Dharsiono provided evidence of correspondence involving him and telephone communications between him and Mr Lim (Exhibits A5 and A6 respectively). Mr Dharsiono stated further that he communicated with Mr Lim by telephone at least once every two days.
55. Mr Lim gave evidence that before HSL enters into import transactions Mr Dharsiono has to be consulted and that Mr Dharsiono makes the final decisions. When Mr Lim encounters difficulties in selling products in Australia he asks Mr Dharsiono for his opinion and directions.
56.Mr Kabo submitted:
There is correspondence and Mr Lim provided evidence on how the management control is dealt with or is exercised by Mr Dharsiono. And he also provided evidence of his management and administration duties in Australia. And he also stated in his evidence that that’s what he is paid for, to actually run the operation in Australia while Mr Dharsiono looked for business opportunities or looked for suppliers in Indonesia. (Transcript p81)
57. In response to questions from Mr Brereton, Mr Dharsiono agreed that he goes to suppliers in Indonesia to find out what they have available and Mr Lim goes to companies in Australia to see what they would like to buy. He agreed further that Mr Lim has contact with all of the customers, looks after Customs and Quarantine clearances and the transportation of the goods from wharf to warehouse and does everything in Australia. Mr Dharsiono agreed that the directors of the company do not have regular face-to-face director’s meetings; rather they usually work by three-way telephone conversations and that he has had very little involvement with the Australian operations of HSL. Mr Brereton’s cross examination of Mr Lim contained the following exchange:
(Mr Brereton) Well, in terms of what happens in Australia, the day to day management of the business here in Australia, that’s your responsibility? … Banking, hiring and firing, contacting the customers, tax invoices, financial documents. liaising with the customs brokers, basically everything that HSL does here in Australia, is your role? You have the overall supervisory role here in Australia? --- That’s what he employed me for. (Transcript pages 77 and 78)
58.In its Statement of Facts and Contentions The respondent submitted:
… that, at the date of cancellation, the applicant was not utilising his skills in actively participating at a senior level in the day-to-day management of HSL.
The respondent submits that the majority of business correspondence between HSL and third parties was undertaken by Mr Lim and the majority of correspondence involving the applicant comprises e-mails between the applicant and Mr Lim. The respondent submits that the correspondence indicates that Mr Lim had responsibility for researching products, quotes and quantities, as well as making decisions regarding the types of products , quotes and quantities, as well as making decisions regarding the types of products to import and sell and making arrangements for the imports. The e-mails indicate that the applicant’s involvement is limited to advising Mr Lim on some aspects of the negotiation process. The respondent submits that the Tribunal should draw the inference that Mr Lim was the director responsible for the day-to-day management of the business of HSL. The respondent submits that the applicant’s involvement was minimal and more akin to a consultant or interested investor, than a director utilising his skills at a senior level in the day-to-day management of the business.
59.In his oral submissions on this issue, Mr Brereton said:
In relation to Mr Dharsiono’s role, in my submission it’s clear from the evidence that the applicant is concentrating on operations in Indonesia and leaving the running of HSLs Australian operations to Mr Lim. Mr Lim is not an employee in the strict sense. He’s also a shareholder, and in my submission he’s essentially the Australian partner, for want of a better description, and the person with the day-to-day management of the company in Australia, and this is shown from his role in hiring and banking and finance, and also the reliance of his knowledge of the Australian market. (Transcript page 84)
60. Mr Brereton referred the Tribunal to the Tribunal’s decision in Lioe and Minister for Immigration and Multicultural Affairs [2006] AATA 189 (24 February 2006). Lioe is similar to this case, in that it involved an applicant who resided mostly overseas and an employee in Australia undertaking all the Australian related activities of the company. In that decision Senior Member Ettinger said:
I was satisfied that Mrs Lili has undertaken the Australian side of the business … Mr Lioe told me that he makes the final decisions, but I have already said that I was satisfied from the totality of the evidence that both he and Mrs Lili made decisions. However, she did all the local work and wrote the cheques …
Notwithstanding Mr Lioe’s evidence that he was in touch two to three times a week, I was satisfied from the evidence that Mr Lioe had little, if any, involvement in the day-to-day management of any Australian business.
61. I also note the relevant findings of Deputy President Wright, QC, in the decision in Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581:
10. The question whether or not an individual is participating in the day to day management of a business in Australia involves two principal issues:
(1) …
(2)The relevant business must be carried on “in Australia”. See … Ong (supra) at paragraph 29-33 where Senior Member MD Allen said:
…
Not only must the eligible business operate in Australia to comply with the act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.
…
31. Reference can be made to the Second Reading Speech of the Minister for Immigration introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Migration Act 1958. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at p2678) that it was understood that migrants who arrived in Australia on a business skill visa would remain resident in Australia. That such a purposive interpretation of the legislation can be adopted cannot be doubted…
…
32. I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the applicant in Australia that must be examined, not his business activities whilst he is residing overseas.
…
11. This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential.
62. The evidence before me is that Mr Lim is responsible for conducting all the Australian business activities of HSL. Mr Lim is effectively managing the day-to-day business of HSL in Australia. Mr Dharsiono’s own evidence was that he has very little involvement in the Australian operations of HSL. Mr Dharsiono has spent only 47 days in Australia between the granting of his visa and its cancellation. Mr Dharsiono’s participation is more akin to an absentee entrepreneur directing operations from afar. From his own evidence Mr Dharsiono has no direct hands-on involvement with the business activities of HSL in Australia. Following the same reasoning as Deputy President Wright in Suryaty, I am not satisfied that at the date of the visa cancellation Mr Dharsiono was utilising his skills in actively participating at a senior level in the day-to-day management of the business.
Does Mr Dharsiono Intend to Continue to Make an Effort to Actively Participate at a Senior Level?
63. There is no evidence from either party regarding any intentions Mr Dharsiono may have in regard to changing the level or method of participation in the day-to-day management of HSL. Both Mr Dharsiono and Mr Lim gave evidence that they were actively looking to find further business opportunities for HSL. However, there was no evidence that their respective roles or management responsibilities would change. I conclude therefore that Mr Dharsiono intends to continue his present management practices, that being the contacting of potential suppliers in Indonesia while leaving the business of selling the goods in Australia to Mr Lim. I have found above that this participation does not satisfy the requirement of the Act to be utilising his skill in actively participating at a senior level in the day-to-day management of that business. With no evidence of an intention to change his participation, I am not able to find that Mr Dharsiono is making an effort to actively participate at a senior level in the management of the business. As a consequence, I am unable to find that Mr Dharsiono intends to continue to make an effort to actively participate at a senior level in the management of HSL.
Summary Regarding section 134(1) of the Act
64.For the reasons given above I find that:
· Mr Dharsiono has a substantial ownership interest in HSL, and
· HSL is an eligible company registered in Australia; however
· Mr Dharsiono is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, and
· he does not intend to continue to utilise his skills in actively participating at a senior level in the day-to-day management of HSL.
Consideration of Section 134(2) of the Act
65. I must now consider section 134(2) of the Act which states that the visa must not be cancelled if the Minister is satisfied that the holder:
· has made a genuine effort to obtain a substantial ownership interest in an eligible business, and
· has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business; and
· intends to continue to make such an effort.
66. Mr Dharsiono’s substantial ownership interest is not an issue in this case and I find that he satisfies this provision.
67. Section 134(3) lists a number of matters that may be taken into account in determining whether a person has made the genuine effort referred to in subsection 134(2). There is evidence, which I accept, that Mr Dharsiono and Mr Lim are pursuing and intending to increase the level of their importation of foodstuffs from Indonesia and to develop the export of Australian sugar and other products to Indonesia. There is no evidence, however, of any intention to change their method of operating the business and their respective management roles. Without a change in his management participation in the business Mr Dharsiono will remain an absentee entrepreneur directing operations from afar, with no direct hands-on involvement within the Commonwealth of Australia.
68. In his Statement of Facts and Contentions, Mr Dharsiono referred the Tribunal to Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703, in which Member Carstairs said, at paragraph 27:
27. Clearly, the legislation contemplates in s134 that consideration be given to a person's intention. This suggests that, while it is true that the exercise of the discretion at the time of cancellation of the visa is the focus, in order to properly address the matters raised in s134 it may be relevant to address matters that go to occurrences after the date of cancellation, to confirm or deny the correctness of views relevantly to be formed under those sections. These legislative provisions contrast with those addressed in Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257 where the Federal Court was addressing a power to cancel a student visa. The legislation set out prescribed circumstances under which the Minister must cancel if a condition that fell within the prescribed circumstances was not met. The legislative provisions for cancelling a business visa, however, require the decision-maker to address the matter of cancellation quite differently, setting out the circumstances in which the Minister may cancel, but must not if satisfied of efforts and future intentions.
69. In paragraphs 9 to 14 I have already considered the situation in regard to matters that occur after the date of cancellation. As a result, I have taken into consideration the intentions of Mr Dharsiono and Mr Lim to continue importing foodstuffs into Australia. The issue in this case, however, is determined by Mr Dharsiono’s participation in the day-to-day management of the business. There is no evidence before me of any intention by Mr Dharsiono to change his participation. Hence the considerations in the decision of Lau are not material to this case.
70. The other matters referred to in section 134(3) are either not relevant to this case or do not overcome the problem of Mr Dharsiono’s lack of participation in the day-to-day management of the company.
71. In paragraphs 63 and 64 I have satisfied myself that Mr Dharsiono has not made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of HSL and that he does not intend to continue to make such an effort. Not all of the provisions of section 134(2) of the Act are met and as a consequence the Minister is not prevented from cancelling the visa.
The Residual Discretion
72. I am required by Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 to take into account the residual discretion of the Minister, that, notwithstanding that Mr Dharsiono has not succeeded in relation to the tests in sections 134(1) and 134(2) of the Act, further consideration be given. Her Honour Kiefel J stated at paragraph 21 of Kim:
It is not obvious that cancellation is the only possibility. The Minister’s contention that the word ‘may’ in s 134(1) does not mean that there is a discretion not to cancel would be stronger if it were shown that there was nothing which might be said in the visa holder’s response to the notice of intention to cancel, which might be relevant to the exercise of a discretion, or that there was no purpose to be served by the exercise of such a discretion. Whilst the discretion given in s 134(1) is not as broad as that considered in Samad, in the sense that it does not involve more choices, it cannot be said that a decision not to cancel a visa could serve no purpose. The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by a visa holder. The Minister retains the right to cancellation under s 134(1) at all times. This does not suggest that the Minister is to be obliged to cancel a business visa if the Minister is not satisfied at a particular point during the currency of the visa of the matters in s 134(2).
73. This case does not depend on time for the applicant to undertake what is required of him. The problem faced by Mr Dharsiono, as I have stated repeatedly, is that of a lack of participation in the day-to-day management of the company. The exercise of a discretion in regard to extra time will not overcome that problem.
DECISION
74. I have found that Mr Dharsiono holds a substantial ownership interest in HSL and that HSL is an eligible business. However, Mr Dharsiono is not actively participating at a senior level in the day-to-day management of HSL as required by section 134 of the Act and he does not intend to make an effort to so participate.
75.Therefore, the decision to cancel Mr Dharsiono’s business visa is affirmed.
I certify that the seventy-five [75] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr C. Ermert, Member
(sgd): Ursula Noye
Clerk
Date of Hearing: 23 June 2006
Date of Decision: 13 September 2006
Solicitor for the applicant: Mr K. Kabo, Kabo LawyersSolicitor for the respondent: Mr M. Brereton, Australian Government Solicitor
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