Hardyanti and Minister for Immigration and Citizenship

[2007] AATA 1757

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1757

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W200600211

GENERAL ADMINISTRATIVE  DIVISION		)
Re		GALINA HARDYANTI

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member

Date12 September 2007

PlacePerth

Decision The Tribunal affirms the decision under review.

..........[Sgd Mr Sweidan]..........

Senior Member

CATCHWORDS

Migration – business skills visa cancellation – whether conditions of visa met – whether applicant obtained a substantial ownership interest in an eligible business in Australia – whether applicant used skills in actively participating at a senior level in the management of such a business – whether a genuine effort made to do these things.

LEGISLATION

Migration Act 1958 (Cth) s134 (1) and (2)

CASES

Hope v Bathurst City Council (1980) 144 CLR 1

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

REASONS FOR DECISION

12 September 2007 Mr A Sweidan, Senior Member    

1.The applicant was born in Indonesia.

2.On 4 February 2003 she was granted a subclass 127 (Business Owner) visa and she entered Australia on that visa on 23 February 2003.

3.On 23 January 2005 the applicant was sent a standard 24 month survey which her then migration agent returned on 4 April 2005. The response claimed that the applicant had:

3.1.transferred assets of $150,000 to Australia to be used for her business activities;

3.2.established a holding company, Galwell International Corporation Pty Ltd (Galwell);

3.3.researched several business opportunities; and

3.4.was still involved in her overseas business.

4.On 13 February 2006 a notice of intention to cancel the visa was sent to the applicant.

5.The applicant’s new migration agent responded on 20 April 2006 claiming that:

5.1.in March 2006 the applicant had, through Galwell, invested $280,000 in a Perth based unit trust named Wundowie Unit Trust (Wundowie) and obtained a 10% ownership interest;

5.2.Wundowie came into existence after Millar Management Group (MMG) which own 80% of Wundowie researched and conducted extensive feasibility studies on the acquisition of a property;

5.3.the project is the first development for Wundowie and other projects were being investigated; and

5.4.the applicant has taken increasingly higher responsibilities in utilising her business skills as evidenced by her participation in the management of her Wundowie investment.

6.The applicant’s visa was cancelled on 16 June 2006 and the applicant seeks a review of that decision.

ISSUES

7.The issues for the Tribunal are whether the applicant:-

(a)has obtained a substantial ownership interest in an eligible business in Australia; and

(b)is utilising her skills in actively participating at a senior level in the day-to-day management of that business; and

(c)intends to continue to:

(i)hold a substantial ownership interest in; and

(ii)utilise her skills in actively participating at a senior level in the day-to-day management of;

an eligible business in Australia.

Alternatively, whether she:

(i).has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and

(ii).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

(iii).intends to continue to make such genuine efforts.

Legislation and Policy

8.Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if he or she is satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising her 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 he or she is satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts to do these things.

9.Eligible business and ownership interests are defined in section 134(1) of the Act and discussed at paragraph 4.3 of the policy set out in Migration Services Instruction MSI-133.

10.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:

10.1.the development of business links with the international market;

10.2.the creation or maintenance of employment in Australia;

10.3.the export of Australian goods and services;

10.4.the production of goods or the provision of services that would otherwise be imported into Australia;

10.5.the introduction of new or improved technology to Australia; and

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

11.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.

12.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.

13.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:

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

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

13.3.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;

13.4.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;

13.5.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;

13.6.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;

13.7.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;

13.8.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

13.9.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:

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

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

EVIDENCE

Substantial ownership interest in an eligible business in Australia

Substantial ownership

14.The evidence before the Tribunal consisted of the “T” documents, the applicant’s witness statement and oral evidence and a number of documents produced by the applicant.  Applicant’s evidence may be summarised as follows:

15.In March 2003 she set up a company called Galwell International Corporation Pty Ltd (ACN 104 255 138).

16.She has a pearl farming business in Indonesia and she investigated a pearl farm for sale in Dixon Islands Western Australia and looked at the financial statements of the business although she did not visit the place of operations.

17.She requested further information so that she could make an informed decision on whether to purchase the pearl farm or not. She prepared a detailed business plan.  A severe storm hit the Dixon Island area destroying the pearl farm and she decided not to go ahead with the purchase.

18.She looked for other pearl farm sites to invest in or to purchase but there were none available.

19.She then decided to enter the property market in Perth.

20.In 2004 she purchased a 950m² lot in Riverton for the purpose of subdividing and developing units for re-sale. She subdivided the lots and built two residential units.  She sold one unit and lives in the other. She later found out that the development of the Riverton units could not be used to support her application because she had not purchased them in her company’s name.

21.In early 2006 she began drawing up plans to open up an Indonesian restaurant she prepared a detailed business plan and intended to invest $40, 000 in the business. However she did not proceed as she was unable to find suitable premises.

22.After receiving the Notice of Intention to Cancel she was introduced to a property development business called Wundowie Unit Trust. She visited the company’s development site on two occasions. The development involved the purchase of a 46 hectare lot which was to be subdivided into 21 smaller lots for re-sale. She was happy with the returns offered and perceived the development to be low risk. She was also attracted by the representations made guaranteeing her a “management role” in the business. She invested $280, 000 for a 10% shareholding.

23.She claimed that she was able to influence decisions and contribute to the management of Wundowie by “assisting with the advertising and sale of the lots and with the overall development of the project”. She also claimed to have used her contacts in Indonesia to advertise the lots and to have received interest from a number of potential investors. She said that she communicates regularly with management through email and has attended several meetings. In these meetings and email communications she made various recommendations on the approach the company needs to take to sell the lots. She suggested that the lots are not pre-sold as in her experience one is able to fetch a much higher price when buyers see the completed development. She also suggested that the price of the lots be increased by 20% to have leverage in the market. The development is near to completion and 17 lots have been sold.

24.She owns a car, house and furniture in Perth and fixtures for the house.  The total cost which is approximately $850,000.

25.Her children are enrolled in primary and secondary school in Perth and she is currently undertaking an English language course at TAFE to improve her English.

26.She intended to carry on business in Australia and “will continue to expand and maintain my involvement in my present business”. She also intends to open up my restaurant once she finds suitable premises. 

27.The respondent concedes that the applicant has a substantial ownership interest in Galwell and Wundowie, and the Tribunal finds this to be so.

Eligible business

28.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 set out earlier in order to be classified as an eligible business.

29.The Tribunal has previously found 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.

30.The Tribunal finds that Galwell is simply a vehicle for passive investment but that Wundowie meets the tests for an eligible business.

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

31.The Tribunal finds that the applicant has failed to demonstrate that she has utilised her skills in actively participating at a senior level in the day-to-day management of an eligible business, (being Wundowie).

32.It is clear that the Tribunal should not exercise its discretion to set aside the visa cancellation decision unless it is satisfied that the applicant is utilising her skills in actively participating at a senior level in the day-to-day management of the business (or has made and intends to continue to make genuine efforts to utilise her skills in actively participating at a senior level in the day to day management of the business).

33.In the Tribunal’s view the applicant not has played any senior level management role in the business activities of Wundowie.  The evidence shows that she was little more than a passive investor who “made suggestions” to management from time to time.  The documents before the Tribunal support this view.

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

34.The Tribunal finds that the applicant has not made a genuine effort to utilise her skills in actively participating at a senior level in the day-to-day management of an eligible business.

35.The Tribunal notes that the applicant did not acquire her interest in Wundowie until after she had received the Notice of Intention to cancel her visa and just before her visa was cancelled.

36.While the applicant claims to have researched the viability of the pearling industry in Western Australia there is little evidence that she made anything other than preliminary enquiries in relation to this.

37.The applicant’s investment in the Riverton property was at best for her only passive investment.

38.The proposed restaurant business appears to have been nothing more than a concept.

39.Overall the Tribunal finds that while the applicant obtained a substantial ownership interest in an eligible business in Australia she did so only as a passive investor in Wundowie and has failed to utilise her skills in actively participating at a senior level in the day-to-day management of that business.

40.The applicant has in the Tribunal’s view otherwise failed to make any genuine efforts to obtain a substantial interest in any other eligible business in Australia or to utilise her skills in actively participating at a senior level in the day-to-day management of such an eligible business.

RESIDUAL DISCRETION

40.1 The Tribunal has also considered whether there is any basis for the exercise of the residual discretionary power not to cancel the applicant’s visa under s134(1) of the Act

40.2    In the Tribunal’s view, having regard to the whole of the evidence and all of          the relevant circumstances of this case the discretionary power should not be     exercised in favour of the applicant.

DECISION

41.The Tribunal finds that the decision under review is the correct or preferable decision and it is therefore affirmed.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed: ..................[Sgd Ms Skinner].......................
  Associate

Date/s of Hearing  12 April 2007
Date of Decision  12 September 2007
Counsel for the Applicant         Mr A Goldfinch
Solicitor for the Applicant          Stables Scott
Counsel for the Respondent     Mr A Gerrard
Solicitor for the Respondent     Australian Government Solicitor