Ho and Anor and Minister for Immigration and Multicultural and in Digenous Affairs

[2003] AATA 968

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 968

ADMINISTRATIVE APPEALS TRIBUNAL         Nº V2002/926
  Nº V2003/1036

GENERAL ADMINISTRATIVE  DIVISION

Re:          TIEN SIOE HO AND

DJAKA WIDJAYA KURNIAWAN

Applicants

And:       MINISTER FOR IMMIGRATION AND

MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:              25 September 2003

Place:             Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) G.D. Friedman

Member

MIGRATION ‑ business skills visa ‑ cancellation ‑ whether eligible business in Australia ‑ whether utilising skills in actively participating at a senior level in the day‑to‑day management of business ‑ whether intention to utilise skills - secondary visaholder – whether extreme hardship

Migration Act 1958 s134(1), (2), (3), (4), (5), (10)

Re Huang and Minister for Immigration and Multicultural Affairs [2002] AATA 656

Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs (2002) 36 AAR 42

Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260

Re Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774

REASONS FOR DECISION

25 September 2003   G.D. Friedman, Member

1.       This is an application by Tien Sioe Ho (the applicant) and his son, Djaka Widjaya Kurniawan (Djaka), for review of a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) dated 25 July 2002 to cancel the applicant's Business Skills (Migrant) (Class AD) subclass 127 visa (the visa).  Djaka’s visa was cancelled because he is a dependant of the applicant.

2.       At the hearing on 3 September 2003 Mr G. Gilbert of counsel, instructed by Stamfords Lawyers, represented the applicant and Mr P. Barker, solicitor with the Australian Government Solicitor, represented the respondent.  An interpreter in the Indonesian language assisted the applicant.

3. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T19), together with seven exhibits (Exhibits A1-A7) lodged by the applicant. 

BACKGROUND

4.       The applicant was born in Indonesia on 2 January 1949 and is married with three children Agus I Han Kurniawan, Yulianto Kurniawan and Djaka.  She lives with her husband in Indonesia and the children live together in Melbourne.

5.       On 7 May 1999 the applicant arrived in Australia as the holder of a subclass 127 visa.  On 1 April 2001 the applicant registered a business called Seniniaga Sejahtera Australia Pty Ltd (Seniniaga) which is involved in the import and export of electronic goods between Indonesia and a number of countries including Germany and Singapore.  On 1 April 2001 the applicant registered the business name Pinto Thai (Pinto) for a Thai restaurant operated by Seniniaga in Melbourne.

6.       On 16 July 2001 the Department of Immigration and Multicultural and Indigenous Affairs (the Department) received from the applicant her completed 24‑month survey concerning her business activities.  On 11 August 2001 the Department wrote to the applicant seeking additional information about her involvement in the business.  The Department received no reply from the applicant.  On 24 April 2002 the Department sent a written notice of intention to cancel the visa held by the applicant and the visas held by family members.  The notices were sent to the applicant’s migration agent as specified in the 24‑month survey.   

7.       On 25 July 2002 the respondent cancelled the visas held by the applicant and her family.  The Pinto restaurant closed on 27 July 2002.  On 29 August 2002 the applicant lodged an application with the Tribunal seeking review of the respondent's decision.  On 18 September 2003 Djaka lodged an application for review and on 25 September 2003 the Tribunal granted an extension of time to that date.

EVIDENCE

8.       In a statutory declaration dated 30 May 2003 (Exhibit A1), the applicant stated that she is a director, a 25% shareholder and a substantial owner of Seniniaga..  She said that the company operates from the house she purchased jointly with her oldest son in Melbourne, and was established to develop business links with the international market for electronic goods.  The applicant stated that she also invested more than $100,000 into establishing Pinto, which had eight part-time employees and was managed by her second son.

9.       In oral evidence the applicant told the Tribunal that at present Seniniaga has not been involved in import or export activities to or from Australia, but she is investigating the means for it to do so.  She said that her oldest child has been helping her to conduct the business, by negotiating in the English language with overseas suppliers and customers on her behalf, from his home in Melbourne.  The applicant explained that she has made all the decisions regarding the business on a day‑to‑day basis, and her husband has had no active role.  She noted that development of international business links has been important in establishing the contacts that will be necessary for the expansion of the company in the future.

10.     The applicant said that, although she did not participate in the day‑to‑day management of Pinto, she made regular telephone calls to her children to obtain weekly updates on the progress of the business and to provide advice on its operation.  She said that the business closed in July 2002 as it was not a profitable business venture, but she hopes to develop other Thai restaurants in Australia if opportunities arise.  She provided financial statements (Exhibit A6) for her business activities. 

11.     The applicant stated that she had spent a total of 114 days in Australia, from the date of her arrival to the date of the cancellation of her visa.  This was less than she had intended but at all times she was able to continue to manage the business.  She said that she was required to remain in Indonesia to provide care for her husband’s elderly uncle who had been in poor health, and had died in April 2003.  She produced medical records (Exhibit A7) concerning the death.  The applicant also stated that her husband suffered from medical problems and needed her assistance.

12.     The applicant emphasised that she has had a long history of business management and is constantly seeking new opportunities to expand her activities in Australia and elsewhere.  She said that she has researched the viability of establishing a distributor network for her electronic goods business and is investigating further property purchases.

13.     In a statutory declaration dated 22 May 2003 (Exhibit A2) Agus I Han Kurniawan, the applicant's oldest son, stated that he has lived in Australia since 1994, and works full-time as a pharmacist.  He said that he has a 25% shareholding in Seniniaga, is in regular contact with the applicant and assists in the operation of the business by communicating with suppliers and distributors when required.  Mr Kurniawan confirmed that he and the applicant jointly purchased the property in which he and his brothers live and from which he carries out the business activities.  In oral evidence he emphasised that the applicant makes all the decisions, and his role is limited to translating instructions from the applicant and then communicating these as directed by her.  He supported the applicant’s evidence that she is investigating a number of opportunities to expand the activities of Seniniaga in Australia.

14.     In a statutory declaration dated 20 May 2003 (Exhibit A4) Yulianto Kurniawan, the applicant's second son, stated that he has lived in Australia since 1995, and is currently in the second year of an Advanced Diploma of International Business at Swinburne University.  He also works part-time as a steward at a hotel.  He said that he has a 25% shareholding in Seniniaga and was closely involved in the day‑to‑day management of Pinto as manager/chef during its period of operation.  Mr Kurniawan said that he was in regular contact with the applicant, and obtained her advice on the operational status of the restaurant.  In oral evidence he said that he wishes to remain in Australia to complete his studies and assist with the care of his younger brother.

15.     In a statutory declaration dated 20 May 2003 (Exhibit A5) Djaka, the applicant's third son, stated that he has lived in Australia since October 2002, and is currently undertaking a full-time Diploma of Information Technology course at the Melbourne Institute of Business and Technology.  He said that he has a 25% shareholding in Seniniaga but is not actively involved in the business.  Djaka stated that his brothers provide day‑to‑day care, and that his parents provide financial support.  He stated that he completed Year 11 in Indonesia under an Australian program but if required to return to Indonesia he would not be able to enter any tertiary education courses.  He said that he would find significant difficulty in re-starting his life in that country.  In oral evidence Mr Kurniawan told the Tribunal that, in the event of a return to Indonesia, he would reside with his parents.  He said there was a possibility that he might be required to complete his secondary education again, although he acknowledged that he had not made any enquiries with the Indonesian education authorities. 

CONSIDERATION OF THE ISSUES

16.     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).

(4)           Subject to subsection (5) and to section 135, if:

(a)the Minister cancels a person’s business visa under subsection (1) or (3A); and

(b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person’s business permit or business visa by giving written notice to that person.

(5)           The Minister must not cancel the other person’s business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

…

(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;

17.     Paragraph 4.5 of the Ministerial Guidelines of the Migration Series Instruction (MSI) N° 133 Visa Cancellation Under Subdivision G ‑ Cancellation of Business Visas (the Guidelines), entitled "What is a 'genuine effort'?", and 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, lawyer, 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 A$100,000 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 s 137, ie mandatory monitoring of Australian address and return of survey forms. ]

18.     Mr Gilbert submitted that, by purchasing a 25% interest in Seniniaga, the applicant has obtained a substantial ownership interest in an eligible business in Australia as defined in s134(1)(a) of the Act. He stated that the evidence from the applicant and her children demonstrates that the applicant participates at a senior level in the day‑to‑day management of the business by exercising executive control and responsibility, and that she intends to continue to do so.

19.     Mr Gilbert addressed the question of activities that occurred after the date of cancellation referred to a number of decisions of the Tribunal and submitted that s134(2)(a) and (c) of the Act refer to the subjective intention of a visa holder.  He also noted that s134(10) of the Act, defining eligible business, includes the words …is resulting or will result in…  He submitted that, for these reasons, the Tribunal should have regard to events that occurred after the cancellation of the applicant’s visa on 25 July 2002.  He stated that oral evidence and documents before the Tribunal show that, since the date of cancellation, the applicant has continued to pursue her business interests with Seniniaga with a view to establishing a distribution network in Australia. 

20.     Mr Gilbert conceded, in respect of s134(10) of the Act, that the applicant was not directly involved in the day‑to‑day management of Pinto because, for practical purposes, a restaurant cannot be managed from overseas.  In relation to Seniniaga he made submissions only on the development of business links with the international market (s134(10)(a) of the Act).  He stated that the Tribunal should take a global view and ought to conclude that the electronics goods business is resulting in, or will result in such international links.  Mr Gilbert pointed to the stated intentions of the applicant of developing the existing international nature of the business to include Australia, and to her property purchase in Australia, as well as her desire to join her children in settling in this country.

21.     Mr Gilbert acknowledged that the applicant has spent a relatively brief period in Australia.  However, he submitted that the medical condition of her husband and the need to provide care for his uncle were legitimate reasons for her absence, and that her residence in Indonesia does not preclude her from operating Seniniaga..  He said that the Guidelines do not carry the force of legislation, so that each case must be considered on its merits. 

22.      Mr Gilbert addressed the question of hardship to Djaka if his visa was cancelled.  He referred the Tribunal to Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656 and Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260. He submitted that Djaka would suffer extreme hardship if forced to leave Australia before completing the final semester of his course of study that leads to entry to a university course. Mr Gilbert said that, because Djaka undertook the Australian program as part of his secondary studies, he might be required to repeat his secondary schooling in Indonesia before becoming eligible to enrol in a tertiary course, if a suitable degree or diploma was available.

23. Mr Barker conceded that, for the purposes of s134(1)(a) of the Act, the applicant’s holding of 25% of Seniniaga, a company registered in Australia, constitutes a substantial ownership interest.  However, he submitted that Seniniaga is not an eligible business as defined in s134(10) of the Act because there was no evidence that the applicant has developed business links with the international market (s134(10)(a)).  He said that, although the business is registered in Australia, it is conducted entirely in and from Indonesia.

24.     Mr Barker submitted that the applicant has not, at any stage, utilised her skills in actively participating at a senior level in the day‑to‑day management of Seniniaga in Australia (s134(1)(b) of the Act) and does not satisfy s134(1)(c).  He said that there was no evidence that the applicant satisfied any of the factors in s134(10) of the Act.

25.     Mr Barker submitted that the Tribunal should follow the Guidelines in the absence of compelling reasons not to do so.  He stated that there was no evidence that the applicant had a genuine intention to reside in Australia or spend longer periods here, or to involve Australia in her business plans.  He referred to ReWidjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774 and said that the intention of the Act is to benefit a business owner who settles in Australia and actively manages that business. Mr Barker submitted that the applicant’s role with Seniniaga is to develop the electronic goods market from Indonesia, and that she is not actively participating, at a senior level, in the day‑to‑day management of the business in Australia.  He said that the applicant had not demonstrated that Djaka would suffer extreme hardship if his visa was cancelled.

26.     In reaching its decision the Tribunal takes into account the documentary and oral evidence and the submissions made at the hearing.

27.     The Tribunal accepts the submission by Mr Gilbert that s134 contemplates that consideration be given to a person’s intention.  Therefore, while the exercise of the discretion at the time of cancellation of the visa is the primary focus of the Tribunal, what occurred after the date of cancellation may be relevant to adequately address the matters raised in s134.

28.     Although the Tribunal accepts that the applicant maintains regular contact with her three children who are the other directors and shareholders of the company, her involvement as an Indonesian-based director who has spent little time in Australia, leads the Tribunal to conclude that, in relation to Pinto, the applicant is not utilising her skills in actively participating at a senior level in the day-to-day management of that business (s134(1)(b) of the Act).

29.     The Tribunal agrees that the applicant owns a 25% share of Seniniaga 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 in Australia (s134(1)(a) of the Act) the Tribunal accepts the applicant’s evidence that she has had considerable business experience, that she is responsible for decisions concerning the activities of Seniniaga and that these decisions are made in Indonesia.  The Tribunal also accepts the evidence from Yulianto Kurniawan, that his role in the business in Australia is limited to translating the applicant’s instructions into English and communicating those instructions to suppliers and distributors, on her behalf. 

30.     The Tribunal notes that, apart from generalised statements of intention by the applicant regarding further property purchases and the desirability of pursuing business opportunities in Australia, there is no evidence of strategic planning, marketing proposals or specific action by the company to suggest any definite proposal directly related to Australian operations.  For these reasons, the Tribunal does not accept the applicant's submission that Seniniaga is a business that is resulting, or will result in, the development of business links with the international market (s134(10)(a) of the Act).  The Tribunal has considered the other factors in s134(10) of the Act and is satisfied that none applies to the business.  The Tribunal finds that Seniniaga is not an eligible business in Australia. Therefore, s134(1)(a) of the Act is not satisfied.

31.     The Tribunal must now consider whether the applicant has made a genuine effort under s134(2) of the Act. In doing so the Tribunal must take into account the factors in s134(3) of the Act..  In assessing the applicant’s claims against those factors and the Guidelines, the Tribunal is not aware of any business proposals that the applicant has developed (factor (a)), or any partners or joint venturers (factor (b)).  There is no evidence of research into the conduct of an eligible business in Australia (factor (c)).  The applicant has spent 114 days in Australia since her first arrival under the visa, (factor (d)).  This is substantially less than the minimum of six months suggested in the Guidelines, although the Tribunal takes into account the applicant’s evidence concerning her commitments in Indonesia to her husband and to his late uncle. 

32.     The Tribunal takes into account the applicant’s evidence that she invested $A100,000 into Pinto (factor (e)) and the value of the ownership interest in eligible businesses in Australia held by her (factor (f).  The turnover of the company was less than $A100,000, giving an indication of the level of business activity undertaken by the applicant (factor (g)).  In respect of factor (h) the applicant failed to provide additional material requested by the Department on 11 August 2001, but the Tribunal takes into account her evidence that her then migration agent did not convey the request to her. 

33.     After considering all the relevant factors in s134(3) of the Act, 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 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.

34.     In respect of whether the cancellation of the applicant’s visa would result in extreme hardship to Djaka, the Tribunal notes that in Re Huang the secondary applicant had not lived in his home country for twelve years and had lost contact with that country.  In Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899 Deputy President Purvis said:

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

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

35.     The Tribunal notes that Djaka has been in Australia for less than twelve months, and in October 2003 he will have completed a Diploma of Information Technology.  Djaka may suffer some hardship from re-locating to Indonesia and from the loss of a place in an Australian university if he is required to return to Indonesia.  However, the applicant and her husband would resume their care for him in familiar family surroundings, and would ensure his financial and emotional security.  There is no objective evidence that he would be unable to pursue further educational or employment opportunities in Indonesia.  For these reasons, under s134(5) of the Act, the Tribunal finds that cancellation of Djaka’s  business visa would not result in extreme hardship to him.    

DECISION

36.     The Tribunal affirms the decision under review.

I certify that the thirty-six [36] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)    Catherine Thomas

Clerk

Date of hearing:  3 September 2003
Date of decision:  25 September 2003
Counsel for applicant:                   Mr G. Gilbert
Solicitor for applicant:                   Stamfords Lawyers
Advocate for respondent:             Mr P. Barker
Solicitor for respondent:               Australian Government Solicitor