Djaja and Minister for Immigration and Multicultural and Indigenous Affairs

[2005] AATA 433

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 433

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/1170

GENERAL ADMINISTRATIVE  DIVISION

Re:         JUSUF TJANDRA DJAJA

Applicant

And: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       Mr E. Fice, Member

Date:             13 May 2005

Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) E. Fice

Member

MIGRATION – business skills visa – whether substantial ownership interest in an eligible business in Australia – whether applicant utilising his skills in actively participating at a senior level in the day‑to‑day management of the business – whether genuine effort made 

Migration Act 1958 ss 134, 135

Hope v Bathurst City Council (1980) 144 CLR 1

Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513

REASONS FOR DECISION

13 May 2005  Mr E. Fice, Member

1. Mr Jusuf Djaja, an Indonesian citizen, was granted a Business Skills Migration Class Visa (sub‑class 127) (the visa) on 27 November 2000. On 30 January 2004 the Minister for Immigration and Multicultural and Indigenous Affairs (“MIMIA”) issued a Notice of Intention to Cancel the visa. Mr Djaja was given the opportunity to respond to that Notice, which he did. Nevertheless, on 3 June 2004, a delegate of MIMIA cancelled Mr Djaja’s visa and the secondary visas issued to his spouse, Sutrisliana Lauw and his son, Marsel Tjandra Djaja (the secondary visa‑holders). Mr Djaja seeks a review of that decision pursuant to section 136 of the Migration Act 1958 (“the Act”). 

2. The applicant represented himself and appeared by telephone from Indonesia. He participated in the hearing through an interpreter in the hearing room. Ms. K. Miller, an articled clerk with the Australian Government Solicitor, appeared on behalf of MIMIA. The Tribunal had before it the documents pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and documents regarding the business activities of a company called Westlake Holding Pty Ltd (Westlake).

BACKGROUND

3.      After Mr Djaja’s visa was approved on 27 November 2000, he first entered Australia on 11 February 2001.  With his son he established a company, Primatex Australia Pty Ltd (ACN 097 342 482) (“Primatex”), which was incorporated on 29 June 2001.  Mr Djaja and his son, Marsel, were its directors and shareholders.  Primatex registered for Goods and Services Tax and it operated from Mr Djaja’s residential address. 

4.      It seems that Primatex was established to export goods to Indonesia.  Over two and a half years, Primatex was involved in nine export shipments. 

5.      On 28 January 2003, MIMIA sent Mr Djaja a letter asking him to complete a 24‑month survey of his business activities.  Mr Djaja did not respond to the letter. MIMIA sent a further survey form to him on 30 May 2003, which he completed and returned on 17 July 2003.

6. On 8 September 2003 MIMIA again wrote to Mr Djaja requesting further information regarding his business activities. Mr Djaja did not respond to that letter. On 30 January 2004, Mr Djaja was sent a Notice of Intention to Cancel his visa pursuant to section 35 of the Act. MIMIA invited him to make representations, which he did on 10 March 2004. He also provided further information on 10 April 2004 and 19 April 2004. However, MIMIA was not satisfied with the response received from Mr Djaja and, accordingly, a delegate of MIMIA cancelled his business visa on 3 June 2004, pursuant to section 134 of the Act.

PARTIES CONTENTIONS

7. MIMIA contends that the Notice of Intention to Cancel the visa was properly given under section 135(1)(a) of the Act, within the time prescribed by section 134(9) of the Act. MIMIA also cancelled the visas issued to the secondary visa‑holders. However, neither of them has applied for a review of that decision.

8.      The principal basis upon which MIMIA cancelled Mr Djaja’s visa was that he had not obtained a substantial ownership interest in an eligible business in Australia and that he was not actively participating at a senior level in the day–to‑day management of the business of Primatex.

9. Mr Djaja contends that he has a substantial ownership interest in Primatex and that Primatex is an eligible business as defined under the Act. He also contends that the business of Primatex will result in the creation of market links with the international market and will result in the export of Australian goods.

10. At the conclusion of the hearing Mr Djaja also contended that, since the cancellation of his business visa, he has become involved in property development in Western Australia through a joint venture with another entity. It is his contention that this involvement in the joint venture should be taken into account as it satisfies the requirements under the Act. MIMA contends that activities which postdate the cancellation of the visa should not be taken into account.

CONSIDERATIONS

11. The grounds for cancellation of business visas are set out in section 134 of the Act which, insofar as it is relevant, provides:

134(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 business.

(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).

…

Section 134(10) of the Act provides:

…

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.

…

12. Mr Djaja’s evidence was that he intended to become an Australian citizen and develop a business in Australia. He said that he had been precluded from active participation in the business because he had been ill for approximately 18 months. He agreed that he had done very little towards furthering Primatex’s objective of exporting goods to Indonesia. Nevertheless, he believed that the nine export transactions undertaken by Primatex were sufficient to establish that the business conducted by Primatex was an eligible business as defined by the Act. He agreed that Primatex did not employ any staff (other than his son) in Australia and that it did not manufacture anything.

13.     The respondent submitted that six of the nine export transactions conducted by Primatex involved the export of goods or materials from Japan, Taiwan and Korea to Mr Djaja’s Indonesian business, PT. Iwama Prima Textile Mill (PT. Iwama).  Mr Djaja agreed that this did not involve the export of Australian goods and that essentially, Primatex was acting as agent for PT. Iwama in those transactions.  Furthermore, Mr Djaja agreed that it was his son, Marsel, who was involved in conducting those transactions.  Mr Djaja said that his son was employed by Primatex.  Although he did not receive a salary, Marsel received “pocket money” and Primatex reimbursed him for his study expenses.

14.     Primatex exported goods from Australia to Indonesia on three occasions; on 7 May 2002, 24 October 2003 and 27 February 2004.  The transaction of October 2003 involved the export of bean bag covers which, Mr Djaja agreed, had been purchased from Target.  He was uncertain as to where the bean bag covers were manufactured and he agreed that there was some doubt as to whether or not they were Australian goods.  There was no question that the remaining two transactions involved the export of Australian goods.  It appears from the company accounts, and Mr Djaja agreed, that the three transactions netted the company some $5,000 in profit.  Mr Djaja also agreed that the transactions on 7 May 2002 and 27 February 2004 resulted from intending purchasers in Indonesia initially making contact with him, rather than Primatex initiating the export transactions. 

15.     Mr Djaja said that he had attempted to export other goods to Indonesia, but that was not commercially possible because Australian goods were too expensive for Indonesian importers.  In fact, Mr Djaja admitted that it was not possible to conduct an export business to Indonesia from Australia given the high price of Australian goods.  It is therefore clear that the business conducted by Primatex is not one which results, or would result in the export of Australian goods and services.  Also, as there are no employees at Primatex other than Mr Djaja’s son, it is not a business which creates or maintains employment in Australia. 

16.     The two transactions which did involve the export of Australian goods to Indonesia appeared to be random and not part of a business plan.  I agree with the submissions made on behalf of MIMIA that they were “one off” transactions, rather than activities conducted on a continuing and repetitive basis.  I accept that, for the purpose of carrying on business, activities must be undertaken on a continuous and repetitive basis for the purpose of profit [see Hope v Bathurst City Council (1980) 144 CLR 1].  Therefore, Primatex was not conducting an export business but was engaged in a limited “ad hoc” exporting activity. 

17.     Furthermore, there was no evidence before me to indicate that the export transactions were part of the development of business links with the international market.  Primatex merely acted as agent in the six transactions which involved the importation of goods, from countries other than Australia, to Indonesia.  Therefore, it could not properly be described as developing business links between Primatex and the international market.  In addition, the transactions which did involve the export of Australian goods were, in essence, ad hoc transactions; so it could not be said that they enhanced the development business links with the international market.

18.     Mr Djaja was asked whether Primatex had a business plan or strategy and he responded that it did.  However, he said that it was not in writing as it was not the Chinese way of doing business.  He said that other exports had been planned but they had not yet come to fruition because he had been ill for 18 months.  However, he agreed that it was Marsel who made contact with customers and who was responsible for all of the export transactions.  Mr Djaja had not spoken with the purchasers or customers and he played little or no part in the running of Primatex.  He agreed that he had only spent 49 days in Australia since the visa was granted.  He said that he spent 6 days per week, 8 hours per day on the business of PT. Iwama, which was his principal business in Indonesia.  As far as Primatex was concerned, he said his son conducted the everyday business, although Mr Djaja would speak to him daily by telephone for 30 minutes to one hour.  He agreed that essentially his son was running the Primatex business and his involvement was limited to teaching his son how to run that business. 

19.     On Mr Djaja’s evidence, it is clear that he is not utilizing his skills in actively participating at a senior level in the day‑to‑day management of the business of Primatex.

20. Section 134(2) of the Act provides that MIMIA must not cancel a business visa if satisfied that the holder has made a genuine effort to obtain substantial ownership in an eligible business or to utilise his or her skills actively participating in the day‑to‑day management of the business. However, not only was Mr Djaja not able to show that there are any future plans for Primatex, he admitted that it was simply not commercially viable for Primatex to act as an exporter of Australian goods to Indonesia. Furthermore, there was no evidence that he intended to become more involved in the day‑to‑day management of Primatex. According to MIMIA, Mr Djaja had indicated that Primatex planned to trade with a company called Ortho Chemicals Australia Pty Ltd for the purpose of exporting chemicals for use in the textile industry. However, there was no evidence of any such arrangements before the Tribunal.

21.     The only further business plan, of which there was some evidence given by Mr Djaja, was the proposed property development in Western Australia, in conjunction with other partners.  Mr Djaja said that he intended to initially invest $500,000 in the Perth property market.  He said that the money was in a Citibank multi currency account which was accessible in Australia.  Primatex’s balance sheet for December 2003 disclosed the Citibank account as an asset of the company in the amount of $408,288.80.  However, there was no evidence before the Tribunal of a Citibank account in the name of Primatex.  Mr Djaja subsequently produced documents about a company called Westlake, which was involved in property development.  However, the documents indicate that Mr Djaja was only invited to become a shareholder of Westlake on 16 December 2004, six months after his business visa had been cancelled.

22.     It was submitted on behalf of MIMA that the Tribunal should draw a distinction between decisions to cancel a statutory benefit and decisions about a person’s entitlement to statutory benefits.  Where a decision is taken to cancel a statutory benefit, the Tribunal should only take into account matters up until the date of the decision to cancel the benefit.  Whereas, where the decision is about a person’s entitlement to a statutory benefit, the Tribunal should properly take into account all matters up to the date on which the decision is made.  That distinction was first drawn by Davies J in Freeman v Secretary, Department of Social Security (1988) 19 FCR 342; where his Honour said:

…

The ambit of the jurisdiction of the Administrative Appeals Tribunal in relation to the review of the decision to cancel a pension or benefit is therefore less than would be the jurisdiction of the tribunal in respect of a refusal to grant a pension or benefit or a decision suspending the payment of a pension or benefit.  In the latter cases, there may well be an ongoing entitlement to a pension or benefit which the tribunal should recognize when formulating its decision.  However, if the tribunal comes to the view that the decision to cancel was the correct or preferable decision, then no further matter remains for the tribunal’s consideration.  Any entitlement of the applicant to a pension or benefit at a subsequent time must be the subject of a further claim which, having been made, would only become the subject of review within the tribunal’s jurisdiction once a decision with respect to it had been made by an officer of the Department of Social Security and that decision had been the subject of appeal and re-consideration…

23. The principles espoused by Davies J have been followed in a number of other cases including the cases dealing with the Act (see Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513).

24.     As this is a decision to cancel a statutory benefit, the Tribunal is satisfied that it cannot take into account any matters regarding Mr Djaja’s business activities after the cancellation of his business visa on 3 June 2004.  It follows that any involvement Mr Djaja may have with Westlake cannot be considered in the course of this review which deals with the cancellation of Mr Djaja’s business visa some six months prior to any involvement with Westlake.

CONCLUSIONS

25. It is clear from the evidence that Primatex is not an eligible business as defined under the Act. The business conducted by Primatex would not result in the development of business links with international markets, the creation or maintenance of employment in Australia or the export of Australian goods and services. The two transactions involving the export of Australian goods or services are not, in my opinion, sufficient to establish that Primatex conducts an eligible business. They were, at best, ad hoc transactions initiated by Indonesian importers. In addition, Mr Djaja admitted that such a business could not be commercially viable. Accordingly, Mr Djaja has not obtained a substantial ownership interest in an eligible business and that, by itself, constitutes grounds for cancellation of his business visa.

26.     Furthermore, there was uncontroverted evidence that Mr Djaja was not utilizing his skills in actively participating at a senior level in the day‑to‑day management of the business of Primatex.  The best that could be said of the business of Primatex is that it was conducted by his son, Marsel, under Mr. Djaja’s guidance.  .

27.     There was no evidence before the Tribunal that Mr Djaja has made a genuine effort to obtain substantial ownership interest in an eligible Australian business; that he utilized his skills in actively participating at senior level in the day‑to‑day management of the business; or that at the time immediately prior to the decision to cancel his visa, he intended to continue to make such genuine efforts.  No business proposals had been developed for Primatex and Mr Djaja accepted that any business model based on exporting goods from Australia to Indonesia could not succeed. 

28.     Mr Djaja conceded that he had only spent 49 days in Australia since his business visa was granted.  The Tribunal accepts that Mr Djaja may have been ill for some 18 months during the 3 year period that he held the visa. However, he has not made any apparent effort to be present in Australia and to be involved in utilizing his skills in the day‑to‑day management of any business in the remaining 18 months.  Although Mr Djaja claims that $500,000 is available in a Citibank account, the monies do not show in the balance sheet of Primatex and no bank account records were produced.  Otherwise, Primatex is a $2.00 company with assets of some $52,000, as of March 2003.  As far as the proposed property venture with Westlake is concerned, that is not a matter which the Tribunal can take into account in reviewing the decision of MIMIA to cancel Mr Djaja’s visa, as it occurred some six months after his visa was cancelled.

29.     For the reasons I have given, the Tribunal affirms the decision of the delegate of MIMIA to cancel Mr Djaja business visa.

I certify that the twenty‑nine [29] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr E. Fice, Member

(sgd)     Olympia Sarrinikolaou

Clerk

Date of Hearing  30 March 2005
Date of Decision  13 May 2005
Solicitor for the Applicant:           Nil – self‑represented

Solicitor for the Respondent        Ms K. Miller, Australian Government Solicitor