Gumulia and Minister for Immigration and Multicultural and Indigenous Affairs - [2002] AATA 1174

DECISION AND REASONS FOR DECISION [2002] AATA 1174

ADMINISTRATIVE APPEALS TRIBUNAL NºV2002/295

GENERAL ADMINISTRATIVE DIVISION
  Re:         PRANOWO GUMULIA
  Applicant
  And:       MINISTER FOR IMMIGRATION AND

MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             15 November 2002
Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) G.D. Friedman
Member
MIGRATION - business skills visa - cancellation - whether substantial ownership in an eligible business - whether utilising skills in actively participating at a senior level in the day-to-day management of business - whether intention to continue to hold a substantial ownership and to utilise skills
Migration Act 1958 s134
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Huang and Minister for Immigration and Multicultural Affairs [2002] AATA 656
Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103
Re Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774

REASONS FOR DECISION

15 November 2002 G.D. Friedman, Member

This is an application by Pranowo Gumulia (the applicant) for review of decision of a delegate of the Minister for Immigration, Multicultural and Indigenous Affairs (the respondent) dated 4 March 2002, to cancel the Business Skills (Migrant) (Class AD) visa subclass 128 (the visa) granted to the applicant.
At the hearing on 28 October 2002 Mr D. McLennan, accountant with McLennan Partners Pty Ltd, represented the applicant and Ms V. Priskich, solicitor with Blake Dawson Waldron, represented the respondent.
The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T95).
BACKGROUND
The applicant was born in Indonesia on 1 November 1953 and is married with two children. The family lives in Jakarta. He owns a company called P.T. Bayu Buana Travel, which has had dealings with Experience Tours Australia Pty Ltd (Experience), and AIMM Ply Ltd (AIMM), a wholly owned subsidiary of Experience.
On 28 February 1999 the applicant arrived in Australia as the holder of a subclass 127 visa. On 2 January 2001 the Department of Immigration and Multicultural and Indigenous Affairs (the Department) sent the applicant a notice to complete a 24-month survey concerning his business activities, which he submitted on 19 March 2001. On 26 May 2001 the Department wrote to the applicant seeking additional information because the applicant had indicated in his survey form that he had not yet engaged in an eligible business in Australia. On 23 July 2001 the applicant provided further information, and on 9 November 2001 the Department sent a written notice of intention to cancel the visa held by the applicant and the visas held by other family members. On 23 November 2001 the firm of accountants acting on the applicant's behalf provided additional information, and on 29 November 2001 the applicant wrote to the Department and gave details of his proposed investment in Australia.
On 4 March 2002 the respondent cancelled the visas held by the applicant and his family. On 25 March 2002 the applicant lodged an application with the Tribunal seeking review of the decision.
EVIDENCE
The applicant gave oral evidence and said that AIMM was established by Experience to promote Australia as a venue for international conferences and associated tourism in markets in South East Asia. He told the Tribunal that he has had long experience in the tourism industry and was approached by Experience to promote Australia in the Indonesian market from his office in Jakarta.
The applicant said that he has spent 61 days in Australia since the grant of his visa, and that eventually he and his family would like to live here when the market has been developed sufficiently for him to be able to operate from Australia. He stated that on 22 February 2002 he became a shareholder of AIMM and owns one share, which is one-third of the company's holdings, and for which he paid $104,969.
Mr Heong Tee Teh, Managing Director of Experience, gave oral evidence and stated that he holds a one-third share in AIMM. He said that Indonesia is a growing market for tourism in Australia, and that the applicant is involved in sales and marketing activities in Indonesia. Mr Teh told the Tribunal that turnover of the Indonesian activities of the business has increased significantly since the involvement of the applicant. He stated that if the Indonesian market continues to grow at a satisfactory rate he envisaged that the applicant and his family might move to Australia in about one year from now and operate the Indonesian sales and marketing aspect of the business from Australia.
Ms Elly Liu, Director of Experience, gave oral evidence and stated that neither she nor Mr Teh was familiar with the Indonesian market, so the engagement of the applicant has been of considerable benefit in developing that aspect of the tourism market.
CONSIDERATION OF THE ISSUES
The Migration Act 1958 Act (the Act) provides as follows:
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 Australia.
(2)      The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
(3)      Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a)business proposals that the person has developed;
(b)the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g)business activity that is, or has been, undertaken by the person;
(h)whether the person has failed to comply with a notice under section 137;
(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
…
(10)     In this section:
…
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;
…
ownership interest, in relation to a business, means an interest in the business as:
(a)      a shareholder in a company that carries on the business; or
(b)      a partner in a partnership that carries on the business; or
(c)      the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts;
Paragraph 4.5 of the Ministerial Guidelines, entitled "What is a genuine effort?", of the Migration Series Instruction (MSI) N°133 Visa Cancellation Under Subdivision G - Cancellation of Business Visas (the Guidelines) issued on 30 May 1996, contains the following factors to assist decision-makers in determining whether a genuine effort has been made under s134(3) of the Act:
(a)business proposal which is considered genuine, realistic and achievable;
(b)formal contract with partner or joint venturers;
(c)written evidence of detailed consultations with at least three business advisers (accountant, lawyers, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);
(d)physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;
(e)transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
(f)minimum $A100,000 business activity as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment eg purchase of shares;
(g)failure to comply with a notice for information under s137, ie mandatory monitoring of Australian address and return of survey forms.
Mr McLennan submitted that by purchasing a one-third interest in AIMM the applicant has obtained a substantial ownership interest in an eligible business in Australia as defined in s134(1)(a) of the Act. He referred to the intention of the applicant to reside in Australia and the investment of $104,969. Mr McLennan stated that the evidence demonstrates that the applicant participates at a senior level in the day-to-day management of the business as a director.
Ms Priskich conceded that, for the purposes of s134(1)(a) of the Act, the applicant's holding of a one-third share of AIMM, a company registered in Australia, constitutes a substantial ownership interest. However, she submitted that AIMM is not an eligible business as defined in s134(10) of the Act because there was no evidence that the applicant has engaged in any business activity, created employment in Australia or developed business links with the international market. Ms Priskich referred to Re Huangand Minister for Immigration and Multicultural Affairs [2002] AATA 656, Re Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774 and to Re Tang and Minister for Immigration and Multicultural Affairs (2000) AAR 103 in which the Tribunal held that the intention of the Act is to benefit business owners who settle in Australia and actively manage that business. She submitted that the applicant's stated role with AIMM is to develop the tourism market from Indonesia, and that he is not actively participating at a senior level in the day-to day management of the business in Australia.
Ms Priskich submitted that the applicant has not demonstrated an actual intention to reside in Australia in the near future, and has not made a genuine effort to use his skills to participate at a senior level in the management of the business in Australia. She said that the applicant has not satisfied the indicators in the Guidelines.
In reaching its decision the Tribunal takes into account the documentary and oral evidence and the submissions made at the hearing. The Tribunal agrees with Ms Priskich that the applicant owns a one-third share in AIMM and therefore satisfies the substantial ownership interest criterion of s134(1) of the Act.
On the question of whether the business is an eligible business the Tribunal takes into account the evidence from the applicant, Mr Teh and Ms Liu, and finds that the activities of the business involving travel arrangements for overseas tourists result or will result in the development of business links with the international market (s134(10)(a) of the Act), so AIMM is an eligible business. Therefore, the Tribunal finds that the applicant has obtained a substantial ownership interest in an eligible business in Australia (s134(1)(a) of the Act).
The Tribunal accepts the submission by Ms Priskich that at the date of cancellation of the visa the applicant was involved in sales and marketing activities and the development of the market in Indonesia for foreign travellers to visit Australia. Although the Tribunal accepts that the applicant maintains regular contact with the other directors of the company, his involvement as an Indonesian-based director, who has spent little time in Australia, leads the Tribunal to conclude that, for the purposes of the Act, the applicant is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business (s134(1)(b) of the Act).
For this reason, the grounds to exercise the discretion in s134(2) of the Act arise, as the pre-conditions for its exercise, as set out in s134(1), are met. In assessing the applicant's claims against the factors listed in s134(3) of the Act and the Guidelines, the Tribunal takes into account that the applicant resides in Indonesia, so he has little claim under factors (a) to (c) of the Guidelines. He has spent 61 days in Australia since his first arrival under the visa, and this figure is substantially less that the minimum of six months contained in factor (d). There is no evidence that the applicant has transferred to Australia 50 per cent of funds available for transfer within two years (factor (e)), or a minimum $A100,000 business activity other than the purchase of shares (factor (f)). In his favour, however, the Tribunal notes that there is no evidence that the applicant has failed to comply with mandatory monitoring (factor (g)).
On the available material the Tribunal is satisfied that the applicant meets only one of the seven factors in the Guidelines. After considering all relevant matters in s134(3) of the Act the Tribunal finds that the applicant has not 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 as required under s134(2)(b) of the Act. Therefore, the Tribunal finds that the exercise of the discretion to cancel the visa is appropriate in this case.
DECISION
The Tribunal affirms the decision under review.
I certify that the twenty-one [21] preceding paragraphs are a true copy of the reasons for the decision of:
G.D. Friedman, Member
(sgd)    Catherine Thomas
          Clerk
Date of hearing:  28 October 2002
Date of decision:  15 November 2002
Advocate for applicant:               Mr D. Mclennan, accountant
Solicitor for applicant:                  Nil
Advocate for respondent:            Ms V. Priskich
Solicitor for respondent:              Blake Dawson Waldron