Jo and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 469
•13 May 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 469
ADMINISTRATIVE APPEALS TRIBUNAL ) N2003/375
)
GENERAL ADMINISTRATIVE DIVISION )Re: JO TIEN KHOEN
Applicant
MINISTER FOR IMMIGRATION
AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal: Ms G Ettinger- Senior Member
Date: 13 May 2004
Place: Sydney
Decision:The Tribunal affirms the decision under review relating to Mr Jo Tien Khoen, being the decision of the Minister for Immigration, Multicultural and Indigenous Affairs, the Respondent in these proceedings, dated 3 February 2003 to cancel Mr Jo’s Business Skills Visa pursuant to section 134(1) of the Migration Act 1958.
Ms G Ettinger
Senior Member
DIRECTION
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2003/375
VETERANS' APPEALS DIVISION ) Re
JO TJIN KHOEN
Applicant
And
MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DIRECTION
Tribunal Ms Geri Ettinger, Senior Member Date 17 May 2004
Place Sydney
WHEREAS:
1. The Tribunal released a written decision in this matter, which was dated 13 May 2004.
2. It has come to the Tribunal’s attention that there was an error in the decision
3. The Tribunal wishes to amend the written decision so as to rectify this error and wishing to do so with the least cost and inconvenience to the parties, applies the provision of section 43AA of the Administrative Appeals Tribunal Act1975.
NOW THE TRIBUNAL THEREFORE ORDERS that where the applicant is referred to as JO TIEN KHOEN throughout the decision, it should read
JO TJIN KHOEN.
[sgd] Ms Geri Ettinger
Senior Member
CATCHWORDS
Business Skills visa – cancellation of visa – no substantial ownership interest in eligible business in Australia – no active participation in day to day management at senior level of business – discretion not to cancel visa – residual discretion applied - cancellation of secondary business visas not appealed – decision affirmed.
LEGISLATION
Migration Act 1958(Cth) ss 134, 135, 136, 137
CASE LAW
Freeman v Department of Social Security (1988) 19 FCR 342
Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257
Hope v Bathurst City Council (1980) 144 CLR 1
Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237
Re Drake (No 2) and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634
Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31
Re Tang and Minister for Immigration and Multicultural and Indigenous Affairs (2000) AATA 997
Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628
Griffiths and Migration Agents Registration Authority [2001] AATA 240
Commissioner for Superannuation v Scott 71 ALR 408
Ong and Minister for Immigration and Multicultural Affairs [2003] AATA 178
Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581
Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 380
REASONS FOR DECISION
13 May 2004 Ms G Ettinger-Senior Member
1. The application before the Administrative Appeals Tribunal (“the Tribunal”) was that of Mr Jo Tien Khoen (“Jo”), the Applicant, for review of a decision of 3 February 2003 (T22), made by a delegate of the Minister for Immigration, and Multicultural and Indigenous Affairs, the Respondent in these proceedings, to cancel Mr Jo’s Business Skills Visa pursuant to section 134(1) of the Migration Act 1958 (the Act).
2. On the basis of the material in the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 the (“T-documents”), and the Applicant’s evidence, I was satisfied that the Applicant was granted a Business Skills Visa on 15 October 1999. Accordingly, certain other family members, including Mr Jo’s wife, Mrs Malie Lo, and their children were also granted secondary visas. These were cancelled as a consequence of the cancellation of Mr Jo’s visa. He told me at the commencement of the Hearing that no appeals from the decisions of the Respondent were being made by the other family members. Accordingly, I have only dealt here with the application of Mr Jo.
3. At the hearing the Applicant was represented by Mr J Coelho, solicitor of Coelho & Coelho Solicitors. The Tribunal was very well assisted by Ms S Piper, an interpreter in the Indonesian language. The Respondent was represented by Ms S Goodman of Blake Dawson Waldron Solicitors.
ISSUE IN DISPUTE
4. The issue before the Tribunal was whether the decision to cancel Mr Jo’s Business Skills visa pursuant to section 134(1) of the Act should be affirmed, set aside or varied.
5. In deciding this issue, I had to consider whether Mr Jo:
· had, or had not, at the relevant time, obtained a “substantial ownership interest” in an “eligible business” in Australia; or
· was or was not utilising his skills in actively participating at a senior level in the day-to-day management of that business; or
· did or did not intend to continue to hold a “substantial ownership interest” in, and utilise his skills in actively participating at a senior level in the day-to-day management of an “eligible business” in Australia.
6. In considering the matter, I noted that the Minister, and the Tribunal standing in his shoes, must not cancel Mr Jo’s Business Skills Visa if satisfied that the Applicant:
· has made a genuine effort to obtain a “substantial ownership interest” in an “eligible business” in Australia; 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 genuine efforts.
7. I noted further that finally, the residual discretion as discussed in Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31 needed to be considered.
LEGISLATION
8. Pursuant to section 134(1) of the Act, the Respondent has the discretion to cancel a business visa in certain circumstances. As relevant section 134(1) provides:
“134 Cancellation of business visa
(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.”
9. Section 134(10) sets out the meaning of “eligible business”, and is considered further on in these reasons for decision.
10. The decision to cancel a person’s business visa leads to the consequential cancellation under section 134(4) of the Act of certain business visas held by members of the person’s family (referred to as "secondary visas"). I did not have to consider the situation of the secondary visa holders because they had not appealed the decision made to cancel their visas as a result of the cancellation of Mr Jo’s visa.
“134(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.”
11. By way of background I noted that there is a three year period during which the power to cancel a visa may be exercised:
“134(9)The Minister must not cancel a business visa under subsection (1), (3A) or (4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:
(a)if its holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or
(b)if its holder was not in Australia when he or she was first granted a business visa—on the day on which its holder first entered Australia after that first visa was granted.”
12. The power to cancel a visa is subject to section 135, which provides:
“135 Representations concerning cancellation of business visa
(1)Before cancelling a visa under section 134(1), (3A) or (4), the Minister must give its holder a written notice:
(a) stating that the Minister proposes to cancel the visa; and
(b)inviting its holder to make representations to the Minister concerning the proposed cancellation within:
(i)if the notice is given in Australia—28 days after the notice is given; or
(ii)if the notice is given outside Australia—70 days after the notice is given.”
…”
13. The Tribunal’s jurisdiction to review the respondent’s decisions under sections 134(1) or 134(4) derives from section 136.
14. Section 137 of the Act authorises the Respondent to request a holder of a Business Skills Visa to provide the Respondent with certain information. There was no dispute that the notices were sent within the three year period stipulated in section 134(9) of the Act, and that on 3 February 2003, the Respondent cancelled the Applicant’s Visa, and gave written notice to that effect.
15. I have noted that there are guidelines promulgated to assist decision-makers in considering the tests in the legislation, and that they are available in relation to considerations under section 134 of this Act. Whilst they do not have the force of law, they are of assistance, and may be used as a guide unless there is some contrary intention expressed in the legislation. I have not found any such contrary intention in the present legislation and have found the guidelines of assistance in my assessment of Mr Jo’s application. (Re Drake (No 2) and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634)).
EVIDENCE BEFORE THE TRIBUNAL
16. The T-documents were received into evidence as Exhibit R1. Further documents were tendered, and were Exhibits A1 – A8 and R2 before the Tribunal.
17. Oral evidence was given by the Applicant, Mr Jo, Mr Antonius Karamoy (“Mr Karamoy), Mr Hindarta Jantaya (“Mr Hindarta”), and Ms Meylia Setywati (“Ms Meylia”).
CONSIDERATION AND FINDINGS
18. I had to take into account all the evidence, both written and oral, submissions, legislation and case law to make the correct and preferable decision in regard to the appeal by Mr Jo against the cancellation on 3 February 2003, of his Business Skills Visa.
BACKGROUND
19. I noted that the Applicant was born on 30 July 1955, and is a citizen of Indonesia. A Statutory Declaration of Mr Jo dated 25 August 2003 was before the Tribunal as Exhibit A2. He told the Hearing that he has a wife and four children who have been living in Australia.
20. Mr Jo’s evidence was that he conducts business in Indonesia and Australia, in particular in the textile/cotton, computer spare parts and pest control fields. In Australia, he has a share holding in companies Jo Company Pty Ltd (“Jo Company”) and Kwik Holdings Pty Ltd (“Kwik Holdings”). In Indonesia his companies are Pt Dewa Sutratex and Pt Hintex, of which he is “Commissaris” or Chairman. The companies in Indonesia are involved with various aspects of business, but the main business appeared from the evidence to be weaving, and preparation of yarn for weaving, textile factories in effect.
21. It was not in dispute, and I accepted that the Applicant was present in Australia for approximately 20 days from the grant of the visa on 15 October 1999 to the date of cancellation on 3 February 2003, and for approximately 17 days since that time.
22. I was mindful also of evidence given by Mr Jo that business for ethnic Chinese, such as he is, was difficult in Indonesia in 1999, and that riots took place – (see also Exhibit A4). I was mindful of Mr Jo’s evidence that between 1999 and 2002, he felt that his presence was, because of the Asian economic crisis, required to restructure his businesses in Indonesia, which was completed by mid-2002. He said that it was for this reason he did not direct his attention to attempting to establish business interests in Australia until mid-2001 when Jo Company was registered (T9/71, 6 June 2001), and until November 2001, when Mr Jo asked Mr Karamoy to seek out business opportunities for him in Australia. The evidence before the Tribunal was that over the period 1999 – 2002, Mr Jo operated as both “Commissaris” or the equivalent of chairman of the board of his companies, and as director/manager in his businesses. He told the Tribunal that he worked in them 8 to 9 hours a day, six days a week, and continues to do so.
23. Mr Jo said that in mid-2002, he started a new business in Indonesia, importing cotton from Australia, which Wiratex, (of which Mr Jo is not an owner), converted into yarn in a process he referred to as “maklum”. This was then returned to Mr Jo for weaving into fabric. Mr Jo told me that even although his companies in Indonesia were now running at 50 percent capacity (Exhibit A2, paragraph 11), he was still working the same number of hours as previously, and six days a week.
24. Mr Hindarta who is Mr Jo’s older brother, gave evidence that Jo Company’s business interests in Australia were in spare parts, cotton, gold, and via Kwik Holdings, in pest control chemicals. Mr Hindarta said that he took his instructions from Mr Jo who was more senior than he in the business, and that he, Mr Hindarta, gave instructions to Mr Karamoy in relation to his work.
25. For the sake of completeness, I note here also that after the completion of Mr Jo’s evidence, and before Mr Hindarta and Ms Meylia gave theirs, I invited Mr Coelho and Ms Goodman into Chambers to discuss the progress of the case. Following that, Mr Coelho sought instructions, and when the case resumed, Mr Coelho realised he had discussed the progress of Mr Jo’s case in the presence of Mr Hindarta and Ms Meylia before they had given their evidence. It is recorded in the transcript of the Hearing on 3 December 2003 at page 74, that Mr Coelho said to me:
“Senior Member, I just need to fill you on my discussions. My friend has just pointed out to me when I first speak to them. I spoke to Mr Jo in the presence of two witnesses about the meaning of active and passive. So, I just need to make you aware of that. When I finished speaking to him, basically Mr Hindarta insisted that he still wanted to give his evidence and I came in and discussed it with my friend and then I went back outside and spoke to Mr Jo separately on the second occasion.
He basically wants to proceed further. They don’t agree that he is being passive in any way. They have their own view on what active and passive means. So that’s the extent of my discussion on that issue; just so that I could get instructions as to whether they wanted to go on, yes.”
…
Senior Member: “It’s absolutely his right to go on.”
Mr Coelho: “All right, yes”
Senior Member: “That’s perfectly fine and I certainly don’t have any preconceived ideas.”
Mr Coelho: “Yes”
Senior Member: “But I felt I should point out to you what I had heard up to now.”
Mr Coelho: “Yes”
26. Mr Hindarta gave evidence immediately after this exchange, with the assistance of the interpreter, and some of his evidence as recorded from page 77 of the transcript of the Hearing on 3 December 2003 is transcribed below.
Mr Coelho: “All right, can you explain to us how you run Jo Company between you and him [Mr Jo] as to who’s in charge of what and who does what and who makes the decisions and that type of thing?
Mr Hindarta (Interpreter): “All the decisions are with Jo. I’m just a – I just follow his orders because I – I work outside … I mean we also have quite a large company, or a number of companies, in Indonesia, so everybody has to report back to him, not just Jo Company because – because it’s not possible for me to handle everything…. So, he must tell me what I have to do.”
Mr Coelho: “Yes and does he do that in relation to the business in Australia?”
Mr Hindarta: “yes that’s – that goes the same for everything. Just – not just in Australia, but it’s done also in Indonesia …”
27. I was satisfied that Mr Hindarta, having been alerted to the fact it was important that Mr Jo be seen as having day to day management involvement in Australia, inadvertently or otherwise, adjusted his evidence to overtly emphasise the role of Mr Jo in the Australian business. Mr Hindarta’s evidence was accordingly not of great assistance to me in my decision making.
RELEVANT CASE LAW IN CONSIDERATION OF THE APPLICATION OF SECTION 134 OF THE ACT
28. I was mindful that cases which are relevant to the decision making process are as follows: Freeman v Department of Social Security (1988) 19 FCR 342, Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257 and a line of Tribunal cases which have followed the above authorities, supporting the proposition that the Tribunal is limited to events at the date of the primary decision in cases of review of decisions cancelling Business Skills Visas pursuant to section 134 of the Act (Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237).
29. In Re Tang and Minister for Immigration and Multicultural and Indigenous Affairs (2000) AATA 997, the Tribunal stated (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 the facts and circumstances that have occurred up until the date of the hearing.”
30. I was aware also that future intentions can be taken into account when considering the Business Skills Visa, and that this was canvassed in Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703 where the Tribunal stated that it is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist 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). 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, is 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.”
31. Pursuant to section 134(1) of the Act, the Tribunal has a discretion to cancel the applicant’s visa if the applicant has not obtained a “substantial ownership interest” in an “eligible business” in Australia, or does not intend to continue to hold a substantial ownership interest (sections 134(1)(a) and (c)), but must not cancel if the person has made a genuine effort to obtain a substantial ownership interest of such kind (section 134(2)(a)) of the Act. The Tribunal also has a discretion to cancel the visa if the person has not been utilising his or her skills in actively participating at a “senior level in the day to day management” of the eligible business, or does not intend to continue to do so. However, the Tribunal must not cancel the visa if the person has made a genuine effort and intends to continue to make a genuine effort, to utilise his or her skills in actively participating at a senior level in management of that business (sections134(2)(b) and (c)) of the Act.
32. Clearly, the legislation contemplates in section 134 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 section 134, 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, and further, to consider the residual discretion as discussed in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (supra).
33. I moved then to consider the application of sections 134(1) and 134(10) of the Act.
CONSIDERATIONS RELATING TO SECTION 134(1) AND 134(10) OF THE ACT
34. Section 134(1) of the Act requires that a visa holder have a “substantial ownership interest” and be engaged at a senior level on a day to day basis in the management of an “eligible business”. Cases such as Hope v Bathurst City Council (1980) 144 CLR 1, which deal with the meaning to be given to the term “business”, apply to the interpretation of this term in the Act. Hope’s case is authority for the point that carrying on a business denotes activities for the purpose of profit, undertaken on a continuous and repetitive basis which may be revealed by inspecting financial records, examining who the clients are, and a consideration of whether the activities are genuine and real. Hope’s case is also authority for the proposition that a business may be “carried on” though it is done in a small way. The Department’s policy manual sets out that the question of whether a business is an “eligible business” relates to the achievement of stated objectives in the legislation set out at section 134(10), through business activities. It does not directly relate to the size or scale of the business. “The business may be small: it is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives.” (Migration Series Instruction 133: Visa Cancellation under subdivision G – Cancellation of Business Visas para 4.3.3).
35. The threshold question is whether Mr Jo had a “substantial ownership interest” in an “eligible business” at the relevant time.
36. I moved then to consider whether Mr Jo had an “eligible business” as defined in section 134(10) of the Act.
“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.”
37. Before considering the specific indicia in section 134(10(a) – (f), I have reviewed the evidence of the various witnesses, including Mr Jo in regard to his claim that he had set up an eligible business in Australia.
settng up jo company pty ltd
38. Mr Karamoy who is a CPA, and employed by Bentley Barton Chartered Accountants, gave evidence at the Hearing, and told the Tribunal that he was introduced to Mr Jo by a migration agent in June 2001, resulting in him arranging for the registration of Jo Company Pty Ltd, (a shelf company), on 6 June 2001. He said that he was appointed Company Secretary, and handled the accounting, dealt with tax matters, and acted as the Public Officer of the company. Mr Karamoy said that initially there were five shareholders in the Company, so that each held 20 percent of the issued share capital. From October 2001, there were six shareholders, with paid up capital of $AUD120,000, and each shareholder, including Mr Jo, had a holding of 16.7 percent share. When Mr Jo was asked in cross-examination who had instructed Mr Karamoy to set up Jo Company, Mr Jo said that Mr Hindarta had been involved as well as he himself. I noted that Ms Meylia took over company secretarial duties in late 2002.
39. Mr Karamoy also gave evidence regarding the attempts by Mr Jo to set up businesses in Australia. At Tab 25 of Exhibit A1, in a letter of 18 August 2003 written by Mr Karamoy and addressed “To Whom it May Concern”, Mr Karamoy stated that during his assignment with Jo Company, which lasted from June 2001 to October 2002, he received regular telephone calls from Mr Jo, who gave him instructions and directions for Jo Company. In his oral evidence he detailed the frequency of that contact, which, he said, varied from often, to once every two weeks or once a month at times. He said that he also received calls from Mr Hindarta. There was quite a discussion at the Tribunal regarding telephone calls which I did not find was of assistance in establishing that there had been many business calls to Australia regarding Jo Company and other business here. At Tab 18 of Exhibit A1, there was an itemised telephone bill on which the Applicant relied to indicate the number of calls he made to Australia. Mr Hindarta was given an opportunity to indicate which of the telephone calls at Tab 18 were ones he had made, but stated that he had no recollection of which were his.
40. I moved then to consider the various business ventures about which evidence was given in support of Mr Jo’s claim that he established an eligible business in Australia in connection with his Business Skills Visa.
the café
41. The evidence of Mr Karamoy was that Mr Jo had charged him with buying a café in 2001/2, and that Munja Café in Oxford St, was one in which they had shown interest. Mr Jo had been unsuccessful because another purchaser had offered more money he said. There was a further café in Clarence St, Sydney, the attempted purchase of which had also been unsuccessful, and I understood from the evidence that there was also a contact made with McCormack Business Brokers.
42. From the evidence about the attempts to purchase a café in Sydney, and the evidence which I accepted that the proposal was taken no further than offering a sum of money lower than that of the final purchaser, I was satisfied to the requisite standard, and concluded that this proposed purchase did not constitute an eligible business pursuant to the legislation (tests in section 134(10) of the Act, and Hope v Bathurst City Council (supra)).
residential development
43. During Mr Jo’s evidence a letter of Allan Wong and Company, Solicitors, dated February 2003 was pointed to as evidencing the Applicant’s interest in residential development in Australia (Tab 20, Exhibit A1). Mr Jo said that he had instructed Ms Meylia in relation to such a proposal. I was satisfied, following Mr Jo’s oral evidence and correspondence at Tab 20, that this proposal involved passive investment (purchase of shares), in a company titled Global Home Development Pty Ltd.
44. From the evidence about the possible participation in residential development which did not proceed, I was satisfied to the requisite standard to conclude that this proposed business did not constitute an eligible business pursuant to the legislation (tests in section 134(10) of the Act and Hope v Bathurst City Council (supra)).
the medical supplies business
45. Mr Karamoy gave evidence that in October/November 2001, the Jo family had wanted to set up a hospital in Indonesia, and asked Mr Karamoy to find equipment in Australia for that purpose. Mr Karamoy gave evidence that he did not find the relevant equipment because of his “lack of networking”, and that he did not pursue the matter further.
46. There was no further relevant evidence before me regarding this possible project, and I was satisfied to the requisite standard to conclude that this proposed business did not constitute an “eligible business” pursuant to the legislation (tests in section 134(10) of the Act and Hope v Bathurst City Council (supra)).
the cotton business
47. As textiles are an important component of Mr Jo’s business interests, it appeared from the evidence that in 2001, emphasis was given to the sourcing of cotton in Australia.
48. When cross-examined by Ms Goodman, Mr Jo agreed that the cotton business was his eligible business in Australia.
49. Mr Karamoy gave evidence he was charged with finding suppliers for the cotton business, and that he emailed three cotton distributors in Australia on behalf of Jo Company (Tabs 2,3,4, of Exhibit A1 dated 7 November 2001). He said that because of the drought, production was down, and it was difficult to obtain cotton. He said that he was able to obtain a shipment of Australian cotton for Mr Jo in Hong Kong, in August 2002. Mr Karamoy said that he did not follow up with cotton after that, and that he resigned from working with Jo Company in October 2002.
50. Mr Jo told me that he had asked Mr Karamoy to obtain cotton from Australia for him, but that when that had proven unsuccessful, he had taken it over himself, and made contact with Wallon Cotton.
51. At paragraph 30 of Mr Jo’s statement (Exhibit A2), he indicated that a total of 880 bales of cotton had been shipped to him. Mr Jo confirmed that there had been two shipments of cotton to the value of $US125,000 and $US130,000 respectively (T19/151/152). Mr Jo confirmed that a shipment of cotton was obtained from Wallon Cotton Ltd in Hong Kong (Tab 12 Exhibit A1), who had sourced it from the Queensland Cotton Company. Mr Jo said that by the time of the second shipment, he was able to source the product directly from the Queensland Cotton Company. He said that he had been unable to purchase further cotton since that time due to the high price, and would not do so until prices dropped, or returned to “normal’. He expected that could be by the middle of 2004, but agreed that was simply a prediction without any certainty. The two shipments, had Mr Jo said, represented 5 – 10 percent of his yarn requirements at the time.
52. I noted from the evidence that at least one of the two shipments (November 2002), albeit that it was Australian cotton, was sourced in Hong Kong, and sent directly to Indonesia, by passing Australia completely.
53. Mr Hindarta also gave evidence regarding the sourcing of cotton. However, his evidence was not of great assistance to the Tribunal in that he appeared to be focussed on ensuring Mr Jo was shown to be the decision maker, and actively participating in the Australian business affairs (see paragraphs above regarding Mr Hindarta’s involvement in discussions before giving his evidence).
54. By way of example, and in relation to the sourcing of cotton, Mr Hindarta’s evidence at page 87/88 of the transcript of 3 December 2003, was as follows:
Ms Goodman: “Okay, now you mentioned with the cotton, you spoke to Wallon Cotton and you spoke to the Queensland Cotton Corporation about purchasing cotton, is that right? …
Mr Hindarta: “He was the one who spoke.”
Ms Goodman: “I’m sorry, I thought you gave evidence a few minutes ago that you spoke to them?”
Mr Hindarta: “No maybe I wrong.”
Ms Goodman: “Thank you.”
Mr Hindarta: “Because all the instructions come from him.”
Ms Goodman: “Yes, but who actually spoke to Wallon Cotton, was it you or was it Mr Jo?”
Mr Hindarta: “Well, it’s like this, all the instructions come from above and I just carry them out.”
Ms Goodman: “So Mr Jo (sic) – can I just ask you …”
Senior Member: “Mr Hindarta, who spoke to Wallon Cotton Company? Did you speak to them?”
Mr Hindarta: “The first is the Jo and then I followed it up.”
Senior Member: “Did you speak to them? …. Who placed the order?”
Mr Hindarta: “Mr Jo.”
…
Ms Goodman: “So if Mr Jo spoke to them and then you spoke to them, what did you speak to Wallon Cotton Company about?”
Mr Hindarta: “So I just followed up on the matter of the LC – the money transfer etc.”
55. Ms Meylia also mentioned Jo Company’s involvement with cotton, but said that as she did not have the time or expertise to deal in that area, Jo Company was looking for someone to run that side of the business. She indicated that there was an invoice for research into the cotton side of the business. I noted that the invoice at Tab 19 of Exhibit A1, was dated 7 January 2003, (a month before Mr Jo’s visa cancellation), and was for the amount of $1,100 claimed for “professional services” in relation to: ”Consultation with you in preparation for the Spun Cotton Manufacture, general assistance from time to time etc.”
56. Ms Goodman, relying on Hope vBathurst City Council (supra) submitted that one or even two consignments did not constitute a continuous business conducted on a repetitive basis, while Mr Coelho submitted that to be eligible a business did not have to be on a particular scale. He also emphasised the use to which the cotton was put, and the necessity for Mr Jo’s expertise to supervise that.
57. I was not satisfied to the requisite standard, that two shipments of cotton (of which one was Australian but was sourced directly from Hong Kong), and fulfilling 5 – 10 percent of Mr Jo’s requirements for that year, constituted a business operated on a continuous and repetitive basis for profit (Hope v Bathurst City Council (supra)). I was mindful from the evidence that Mr Jo indicated he intended to source further Australian cotton once the price came down. By the time of the hearing which was approximately a year after the relevant date when the visa was cancelled, there had been no further cotton business instituted. I was accordingly satisfied that Mr Jo’s interest in the cotton business did not constitute an eligible business pursuant to section 134(10) of the Act and the principles espoused in Hope v Bathurst City Council (supra).
the spare parts business
58. Evidence was given with regard to the accounts showing payment for spare parts. The evidence of Mr Jo was that Mr Hindarta looked after the spare parts business, and that he, Mr Jo, knew little about it. I was satisfied to the requisite standard from the evidence that the spare parts were for use in Mr Jo’s business in Indonesia, that they were sourced in Singapore, and perhaps elsewhere (other than Australia). I was also satisfied that the Australian account was used to generate transactions using the Australian business. Australia’s only role in the spare parts business then, was to make payments through the Australian bank account. I noted the Applicant’s and Mr Hindarta’s submission, that it would generate benefit for Australia by way of bank charges and liability for tax.
59. Ms Meylia was asked about the payments she listed in paragraph 19 of her Statutory Declaration (Exhibit A8), and indicated they were payments made for and on behalf of Jo Company and his Indonesian business. She had no further documents with her in that regard, but was able to indicate that payments in relation to Young Bros Singapore were for computer parts, i.e. not sourced in Australia or for the Australian business.
60. I accepted Ms Goodman’s submission that the spare parts business appeared to generate cash flows in Australia, but that there were no business transactions.
61. It was not disputed, and I was satisfied that the spare parts were not sourced in Australia, and were destined for use in Indonesia. I was satisfied that the trade in spare parts (mainly for computers) was, on the balance of probabilities, not able to constitute an eligible business pursuant to the legislation (section 134(10) of the Act and Hope v Bathurst City Council (supra).
kwik holdings pty ltd - pest control chemicals
62. Mr Jo gave evidence that the first proposal with regard to the pest control business arose in December 2002, and was commenced with the assistance of Ms Meylia, evidence corroborated by her. Kwik Holdings Pty Ltd was registered on 21 January 2003 (Tab 31, Exhibit A1), shortly before the visa cancellation of 3 February 2003. When he gave his evidence, Mr Jo agreed he had not previous to the Hearing, seen documents relating to the registration of the company, neither the interim financial statement for 2003.
63. Ms Meylia gave evidence that she is the sole director of Kwik Holdings, but added that “on paper”, others were share holders, and that her authority was to sign cheques to the value of $2,000. I noted inconsistent evidence given regarding the identity and holdings of the shareholders for Kwik Holdings, but was mindful that at Tab 39 of Exhibit A1, Jo Company was shown as holding 250 $1 shares. Ms Meylia holds 500 shares (Tab 40 of Exhibit A1), and Mr Irwan Bunadi, also 250 (Tab 41 of Exhibit A1).
64. Ms Meylia said that she opened an account with ANZ Bank in the name of Kwik Holdings, using $100 of her money on 24 January 2003. There was, at Tab 43 of Exhibit A1, also an account in the name of Kwik Holdings with Citibank.
65. As at 7 March 2004, there was an insurance contract for premises at Newtown said to be for Kwik Holdings (Tab 38, Exhibit A1), and an invoice dated 5 March 2003 regarding the lease of premises which Ms Meylia said she had organised. Ms Meylia also drew my attention to Tab 45 of Exhibit A1 which was a copy of a certificate of registration of a motor vehicle dated 3 March 2003 in the name of Kwik Holdings. In further demonstration of activity in Kwik Holdings, Ms Meylia pointed out at Tab 48, Minutes of a meeting of Kwik Holdings dated 28 June 2003, signed by Mr Shannon O’Brien, a contractor for Kwik Holdings involved with carrying out pest control. There was no mention of Mr Jo in those Minutes. Ms Meylia indicated that Kwik Holdings had one casual employee engaged to do clerical work for approximately 20 hours per week.
66. Ms Meylia said that some chemicals had been sold in Indonesia, but that she had no documentation, and could not recall exactly when it was, but thought it was in 2003.
67. Mr Jo gave evidence that he was appointed as agent for Indonesia, and in particular for West Java, to market the pest control business. He said that given the prevalence of termites in that area, it was very relevant business. I noted there were no agency agreements or other documentation in regard to this business available to the Tribunal, and noted further Mr Jo’s evidence that the business had not commenced in Indonesia. In cross-examination Mr Jo agreed he had not been involved in the management of Kwik Holdings, but said he would later be, when it started exporting to Indonesia. Ms Meylia told me that the arrangements regarding licences and permission to operate in Indonesia took time. Ms Meylia said in her evidence that the Company would try to manufacture the chemicals in Malaysia or the Philippines, because it was too expensive to do so in Australia.
68. I was satisfied from the evidence that the pest control chemicals which had been supplied from Australia to date were samples, and not commercial supply.
69. When asked by Ms Goodman whether Kwik Holdings could continue to operate if Mr Jo’s business visa remained cancelled, Ms Meylia disagreed. She emphasised he was the main person in Jo Company. I was mindful Ms Meylia’s answer was likely to have been influenced by the fact she had been present when Mr Coelho sought instructions as to whether to proceed with the case, and before she gave her evidence (see paragraphs 25-27 above).
70. I was mindful that even though Kwik Holdings was registered just before cancellation of Mr Jo’s visa, future intentions can be taken into account in assessing whether a visa should be cancelled. In doing so, I have been mindful of varying cultural attitudes to documentation, but have nevertheless noted that there is no documentation at all by way or correspondence or anything else regarding the appointment of Mr Jo as agent for the pest control business in Indonesia. I was further satisfied that the exports were by way of samples only, and that the business had not progressed further by the time of the Hearing, approximately one year after the cancellation of the visa. In that regard I was mindful of Ms Meylia’s evidence that permits were hard to obtain in Indonesia, but had no evidence before me to satisfy me that efforts had been made to obtain permits. I had no evidence before me that Mr Jo was involved in the pest control business either in Indonesia, but more importantly in Australia, and indeed he did not appear to have knowledge of any transactions. I was accordingly not satisfied from the evidence that he had any day–to-day involvement in the management of the pest control business.
71. I assessed whether the pest control business could qualify pursuant to section 134(10) of the Act and Hope v Bathurst City Council (supra) as an eligible business, and was not satisfied that it could.
the clothing business
72. Mr Jo said that he had had a meeting in Indonesia in November 2002 and January 2003, with a Mr Nurbertus Wirawan regarding a menswear business. Mr Colin Ko, a friend, had also done research (commissioned by Ms Meylia), with regard to Mr Jo opening a shop in this area of business (Paragraph 34, Exhibit A2). Mr Jo said that he did not know how much he had paid for the study which was at Tab 11 of Exhibit A1. I noted it was a CCH report, available for general access, and unlikely to have been prepared specifically for Mr Jo.
73. A letter of Mr Wirawan of Berton International Pty Ltd dated 13 November 2003, who appeared from the evidence to be a clothing retailer in Perth, was accepted into evidence as Exhibit A5. This was a letter to Mr Jo informing him that they would not be going ahead with business with him, and was an attempt by Mr Jo to indicate he had been pursuing clothing business interests in Australia.
74. Mr Jo said that the rents were excessive and that was the reason the clothing business did not proceed, but that if rents could be negotiated, he would like to open such a business.
75. I was satisfied from the evidence of Mr Jo that he did not have personal knowledge of research into the clothing business in Australia, or how it was commissioned, and that he was not involved in any clothing business during the relevant period.
76. I was satisfied that the clothing business, which did not progress past a preliminary report and discussions, was, on the balance of probabilities, not able to be constitute an eligible business pursuant to the legislation (section 134(10) of the Act and the principles in Hope v Bathurst City Council (supra)).
FURTHER CONSIDERATION OF WHETHER MR JO’S INVOLVEMENT IN THE ABOVE NAMED AREAS OF BUSINESS COULD BE CONSIDERED “ELIGIBLE BUSINESS”
77. Accordingly, in order to establish the threshold issue which was whether Mr Jo had an eligible business in Australia, I took into account the evidence to consider whether I reasonably believed that the Applicant’s business resulted in or would result in one of the following items in section 134(10)(a)–(f) of the Act in the definition of eligible business. In doing so, I considered the evidence and submissions with regard to:
(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;
(g)an increase in commercial activity and competitiveness within sectors of the Australian economy.”
the development of business links with the international market
78. In considering this sub-section, (section 134(1)(a) of the Act), I have referred to the evidence and submissions with regard to the business ventures Mr Jo has investigated or entered into in Australia from the grant of his visa in 15 October 1999.
79. I have found in the paragraphs above, and from the evidence before me, that Mr Jo’s idea of purchasing a café, becoming involved in medical supplies, the menswear business, and passive investment in residential development in Australia were approached in a perfunctory way, and did not proceed. He cannot be held to have developed business links with any market at all in regard to those proposed areas of business.
80. The evidence before me also indicated that Mr Jo imported spare parts (mainly for computers) from Singapore and other places directly to Indonesia, with some financial transactions passing through Jo Company. This did not satisfy me that he developed business links with the international market in regard to those proposed areas of business because the transactions did not involve Australia.
81. Mr Jo also imported one shipment of Australian cotton from Australia and another of Australian cotton sourced in Hong Kong. I was not satisfied that this meant he had developed business links with the international market in regard to the export of cotton. The cotton shipments were not repetitive business and did not in any resemble conduct of regular business.
82. The export of pest control chemicals had not commenced at the time of the cancellation of the Mr Jo’s business visa although Kwik Holdings was registered just prior to that date, and up the time of the Hearing, only samples have been sent to Indonesia. I was accordingly not satisfied that this meant Mr Jo had developed business links with the international market in regard to the export of pest control chemicals.
83. In summary then, I was satisfied that Mr Jo’s activities in Australia did not satisfy the criteria in section 134(10)(a) of the Act, the development of business links with the international market.
the creation or maintenance of employment in australia
84. I moved then to consider whether Mr Jo had a role as claimed, in the creation or maintenance of employment in Australia, noting that Mr Jo gave evidence of having arranged with Mr Karamoy initially to set up Jo Company in 2001, and to handle the formal business of the company, as well as seeking to set up an eligible business. Mr Karamoy had done the accounting and correspondence with suppliers of cotton, (which consisted of 3 - 4 emails), and was to have been in contact with buyers as part of his part-time involvement with Jo Company. Mr Jo was unable to indicate how much time Mr Karamoy spent on Mr Jo’s affairs, or how much he was paid for his involvement.
85. This was followed by Ms Meylia taking over the functions, also on a part-time basis, from the end of 2002. Mr Jo was not able to tell the Tribunal details of Ms Meylia’s involvement with Jo Company, nor how much she was paid.
86. As to the spare parts business; Mr Jo deferred to Mr Hindarta and said that he did not know about that side of the business. The evidence before me satisfied me that notwithstanding bank accounts which were likely to have generated bank fees and charges, no activities which led to the creation of maintenance of employment in Australia arose out of the spare parts business.
87. I was satisfied that there was no employment activities had taken place for the export of cotton (two shipments of Australian cotton, only one directly from Australia).
88. The pest control activities had consisted of sample shipments only within the relevant period, and indeed up the date of the final Hearing on 1 March 2004. Although there were no records before the Tribunal, I accepted that the people involved, apart from one part-time casual staff member, were one or two contractors.
89. I found from the above evidence that the criterion, the creation or maintenance of employment in Australia, as anticipated in section 134(10)(b) of the Act was not met by Mr Jo in his employment of a casual part-time staff member in the pest control area and the services of two part-time accountants (in succession), to set up shelf companies and maintain secretarial duties.
export of australian goods or services
90. I next considered in the context of eligible business whether Mr Jo was involved in the export of Australian goods or services. I was mindful there was no export of goods and services in relation to Mr Jo’s attempted business ventures (which did not proceed) i.e. the purchase of a café, the clothing industry, residential development and the medical supplies business, and it was undisputed the spare parts business did not export out of Australia
91. The evidence before me was, as noted above, namely that there was one shipment of cotton from Australia (and one shipment of Australian cotton from Hong Kong to Indonesia), and samples of pest control chemicals sent to Indonesia. I have already held that this activity did not qualify as a business pursuant to the tests in Hope v Bathurst City Council (supra) as the activity was not undertaken on a continuous or repetitive basis.
92. Accordingly I could not be satisfied that Mr Jo was exporting Australian goods or services in satisfaction of section 134(10)(c) of the Act.
further subsections
93. I did not consider either subsections 134(10)(d) or (e) relevant in this case, that is Mr Jo was not involved in the production of goods or the provision of services that would otherwise be imported into Australia or the introduction of new or improved technology to Australia at the relevant time.
increasing commercial activity and competitiveness within sectors of the australian economy
94. As to increasing commercial activity and competitiveness within sectors of the Australian economy; the evidence and submissions on behalf of Mr Jo were that the setting up of bank accounts and transactions within these satisfied this factor because they resulted in tax and bank charges being paid.
95. Mr Jo also said that he was planning to set up a food outlet via a franchise agreement in the future, but had he had been preoccupied to the present with his Indonesian business, and the problems in Indonesia as described above.
96. Mr Jo’s other activities which were attempted but did not proceed i.e. the café, investment in residential property, the menswear business, and the medical supplies business cannot be said to have increased commercial activity and competitiveness within sectors of the Australian economy. Neither did the import of spare parts from Singapore and other places to Indonesia, and neither could that be said of the one export of cotton from Australia during the relevant time, nor the export of samples of pest control chemicals to Indonesia.
97. Accordingly, I found that Mr Jo’s activities in the relevant period, and indeed beyond, did not increase commercial activity and competitiveness within sectors of the Australian economy in satisfaction of section 134(10) of the Act.
WHETHER MR JO HAD A SUBSTANTIAL OWNERSHIP INTEREST IN AN ELIGIBLE BUSINESS IN AUSTRALIA
98. Although I have found in the paragraphs above that Mr Jo does not have an eligible business in Australia, in case I am wrong, I have considered whether he had a substantial ownership interest in a business in Australia.
99. In that regard I noted that the word “substantial” has been said to be a word calculated to conceal a lack of precision. The majority judgment in Commissioner for Superannuation v Scott 71 ALR 408 at 412-13 stated as follows:
“This court has on a number of occasions considered the adjective “substantial” and, even where it stands alone uninfluenced by proximity to the word “wholly”, has adopted a meaning which accords with the submission of the Commissioner. I refer in particular to Tillmanns Butcheries Pty Ltd v Australasian Industry Employees’ Union (1980) 27 ALR 367. At 382, Deane J said “The word ‘substantial’ is not only susceptible of ambiguity: it is a word calculated to conceal a lack of precision. In the phrase ‘substantial loss or damage’, it can, in an appropriate context, mean real or of substance as distinct from ephemeral or nominal. It can also mean large, weighty or big. It can be used in a relative sense or can indicate an absolute significance, quantity or size. The difficulties and uncertainties which the use of the word is liable to cause are well illustrated by the guidance given by Viscount Symon in Palser v Grinling [1948] AC 291 at 317 where, after holding that, in the context there under consideration, the meaning of the word was equivalent to ‘considerable, solid or big’, he said: ‘Applying the word in this sense, it must be left to the discretion of the judge of fact to decide as best he can according to the circumstances of each case’ … In the context of s45D(1) of the Trade Practices Act 1974 (Cth), the word ‘substantial’ is used in a relative sense in that, regardless of whether it means large or weighty on the one hand or real or of substance as distinct from ephemeral or nominal on the other, it would be necessary to know something of the nature and scope of the relevant business before one could say that particular actual or potential loss or damage was substantial. As at present advised, I incline to the view that the phrase, ‘substantial loss or damage’, in s45D(1) includes loss or damage that is, in the circumstances, real or of substance and not insubstantial or nominal.”
100. I was mindful that Mr Jo owned 16.7 percent of the shares in Jo Company, and that Jo Company in turn owned 250 shares at $1 each in Kwik Holdings (Tab 39, Exhibit A1). The other share holders in Kwik Holdings were listed at Tabs 40 and 41 of Exhibit A1, and were Ms Meylia, 500 shares and Mr Bunadi 250 shares.
101. I was mindful in deciding whether Mr Jo’s holdings could be held to be substantial ownership interests in companies in Australia, of the submissions of the parties, and of Senior Member Allen’s statements in Ong and Minister for Immigration and Multicultural Affairs [2003] AATA 178. He referred to the Applicant in Ong (supra), having obtained a 12.25 percent holding in a private company with a share capital of 10,000, $1 shares. Senior Member Allen considered that if a person owned 12.25 percent of a large publicly listed company such as Coles Myer or the Commonwealth Bank, that would be a substantial shareholding (or ownership). He did not, however, regard 12.25 percent to be a substantial ownership of the business of Mr Ong in that case. I was also mindful of the situation in Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54 where 25 percent ownership was considered substantial. I agreed with Senior Member Allen that what is a substantial ownership of an eligible business is a question of fact and degree, and was reasonably satisfied that Mr Jo’s holding of 16.7 percent in Jo Company and 250 $1 shares in Kwik Holdings was not a substantial ownership interest pursuant to the legislation.
WHETHER MR JO WAS UTILISING HIS SKILLS IN ACTIVELY PARTICIPATING AT A SENIOR LEVEL IN THE DAY-TO-DAY MANAGEMENT, WHETHER HE HAD MADE A GENUINE EFFORT TO DO SO OR WHETHER HE HAS THE INTENTION TO MAKE SUCH EFFORTS
102. Mr Jo’s various attempts at business have been detailed in the paragraphs above. His evidence was that his skill and expertise was required in Indonesia and that he worked 8 - 9 hours a day six days a week in his businesses there. Various witnesses including Ms Meylia, Mr Hindarta and Mr Karamoy all gave evidence that they deferred to Mr Jo for major decision making. However the evidence before me satisfied me that Mr Jo had only perfunctory personal knowledge of what was going on in Australia.
103. The business approaches in Australia included unsuccessful investigations/ attempts to purchase a café, passive investment in a residential development, the menswear business, the medical supplies business. There was no question of any day-to-day management by anyone, least of all Mr Jo who took no part in these investigations.
104. The other business was the spare parts business which did not qualify as business in Australia at all as the goods were sourced in Singapore and elsewhere and transported to Indonesia. Payments were made via Australian bank accounts with funds deposited for that purpose and withdrawn within days. Mr Jo was not personally involved on a day-to-day basis with any of this in Australia.
105. There remains the export of cotton of which there were two shipments within the relevant period and none since. One shipment was sourced in Australia and Mr Jo said that he had personally been in contact to arrange it. The cotton was not held to be an eligible business given the relevant criteria to be taken into account, and there was no question of management, although Mr Jo said that he intended to export more cotton when the price came down.
106. The pest control business was the only other business where some activity has been noted. Mr Jo’s evidence was that he had been appointed agent for Indonesia, but it was Ms Meylia who ran the fledgling operation in Australia from where there has only been a shipment of samples exported so far. Mr Jo demonstrated in his evidence that he did not know much about the set-up of Kwik Holdings, but said he hoped to develop the market in Indonesia. The pest control business did not qualify an eligible business pursuant to the legislation.
107. In making the above decision that Mr Jo was not utilising his skills in actively participating at a senior level in the day-to-day management of an Australian business, not making a genuine effort to do so, and did not demonstrate the intention to make such efforts, I took into account some of the Tribunal’s decided cases, noting that in Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656, Senior Member Muller as he then was, said at paragraph 12:
“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.”
108. I noted further that Deputy President McMahon in Re Tang said at paragraph 25:
“There is no evidence that the applicant “actively participates at a senior level” from overseas.”
109. Deputy President Wright continued in Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581
“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.”
110. Unfortunately I could not find that Mr Jo was nvolved in the day-to-day management of anything in Australia.
SUMMARY REGARDING SECTION 134(1) OF THE ACT
111. I find then for the reasons given above that Mr Jo had not obtained a substantial ownership interest in an eligible business in Australia, (section 134(1)(a) of the Act), and was not utilising his skills in actively participating at a senior level in the day to day management of that business (section 134(1)(b) of the Act). There was no suggestion that Mr Jo did not intend to continue to pursue his involvement in Australia, (section 134(1)(c) of the Act). I moved then to consider the tests in section 134(2) of the Act which states that the visa must not be cancelled if the Minister and the Tribunal standing in his shoes, is satisfied of certain things.
CONSIDERATION OF THE TESTS IN SECTION 134(2) OF THE ACT
112. Although I was satisfied that there were grounds to exercise the discretion to cancel the Applicant’s Business Skills Visa, and that the tests pursuant to section 134(1) of the Act were made out, I needed to be satisfied regarding the tests set out in section 134(2), and the residual discretion as enunciated in Kim (supra). The tests in section 134(2) of the Act which I have considered, are set out below:
“134(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).”
113. I had to take into consideration whether the Applicant has made, and intends to continue to make genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, and whether he has made, and intends to continue to make a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of that business. I noted that section 134(3) set out the matters which may be taken into account when determining whether a person has made genuine efforts referred to in section 134(2) of the Act.
114. I have noted that the Tribunal is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist 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, is 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.”
115. I have also considered the guidance given in Paragraph 4.5.1 of the “Migration Series Instruction: Cancellation of Business Visa” Guidelines, and section 134(3) of the Act, and have found as follows from the evidence before me:
· (a) There is no business proposal or business plan available. Mr Jo demonstrated little knowledge of, and little evidence of participation in the operations of Jo Company or Kwik Holdings. He is a 16.7 percent shareholder in the former, and Jo Company holds 250 $1 of the 100 shares in Kwik Holdings which I have found in the paragraphs above to not be a substantial ownership interest within the terms of the legislation.
· (b) Kwik Holdings was registered to deal with the export of pest control chemicals. There was no evidence of the existence of partners or joint venturers, just a couple of contractors, and a part-time casual employee for whom there were no records, with negligible involvement by Mr Jo himself.
· (c) Evidence was given that contact was made with a business broker when Mr Jo was seeking to invest in a café in 2001/2. There was no evidence regarding whether that was a one off meeting between Mr Karamoy and the broker, or whether the contact was greater. In any case, the purchase of a café did not proceed. Other research consisted of Ms Meylia supplying a CCH report on “spun cotton manufacture” and a CCH report regarding menswear retailers. Neither of those projects qualified as eligible business in this case.
· (d) Mr Jo spent 20 days between the granting of his visa on 15 October 1999 and its cancellation by the Respondent’s delegate on 3 February 2003 in Australia, and approximately further 17 days since that time. He gave no assurances he was planning to spend more time here, because he is busy, and the evidence indicated his expertise and input is required in Indonesia.
· (e) The accounts in Exhibit A1 indicated that funds which were transferred to Australia were usually withdrawn shortly afterwards to pay suppliers, for example to pay Singapore suppliers for spare parts they exported to Indonesia. No significant funds were deposited in Australia which were not repatriated shortly afterwards. Mr Karamoy told the Tribunal that in connection with the setting up of Jo Company, $US59,000 was transferred to Australia in June 2001. He was asked in cross-examination by Ms Goodman regarding the financial position of Jo Company in October 2001. Tax returns and company accounts were in the T-documents and Exhibit A1. Ms Goodman asked Mr Karamoy about an amount of $13,695 in Citibank which appeared in the accounts of October 2001. Mr Karamoy explained this was raised in connection with the sale of manufacturing equipment and supplies in Indonesia through Jo Company, in order, Mr Karamoy explained, to have activities going through Jo Company. He indicated he was not personally involved in the business transactions. However he argued that notwithstanding the fact that the transactions did not take place in Australia or with Australian companies, the benefit to Australia was that Jo Company would have to pay tax on those amounts at 30 June 2002. He emphasised that the benefit to Australia was that Jo Company paid accountancy fees, bank charges, and the wages of a casual staff member. Mr Jo was referred in cross-examination to accounts at Tab 28 of Exhibit A1, which indicated that the amounts of AUD $182,000 and $50,000 had been transferred to Australia in October 2001, and that $177,000 had been withdrawn within days afterwards. Mr Jo indicated that the money had been withdrawn to pay for financial dealings handled by Mr Hindarta. He did not know any details of how the money was spent. A similar situation prevailed involving sums of AUD$72,000 and AUD$60,000 which were shown as deposited for the period November 2001, with AUD$70,000 being withdrawn shortly thereafter, allegedly also by Mr Hindarta. Mr Jo indicated he had no personal knowledge what these amounts were for, and that this applied to all the other transactions for other periods, but that in general terms, he knew they were used to pay debts and buy goods such as cotton and spare parts. The spare parts, it was explained, were for use in the factory of his company, Dewa Sutratex in Indonesia, and although Mr Jo did not know the source, and deferred to Mr Hindarta’s knowledge of the transactions, I understood from the evidence of Mr Hindarta that they were not sourced in Australia, neither were they destined for use in Australia.
· (f) As stated above, Mr Jo owns 16.7 percent of Jo Company, and Jo Company 250 $1 shares in Kwik Holdings. As also noted above, I have been unable to find that Mr Jo has a substantial ownership interest in an eligible business in Australia pursuant to the terms of the legislation.
· (g) Mr Jo’s attempts to set up business in Australia have been detailed above. They consisted of the unsuccessful attempt to purchase a café, the unsuccessful inquiries into a passive investment in a residential development, the interest in sourcing medical supplies which did not proceed, the inquiry into a menswear business which did not proceed, and the export of spare parts from Singapore for Indonesia. They have not been held to be eligible businesses. I was satisfied that the only activities which have been more than superficial attempts to set up business were in relation to the export of cotton which resulted in one shipment from Australia to Indonesia before the visa cancellation, and no further orders since, and the area of pest control chemicals. In relation to the latter, only samples have been sent to Indonesia, and no actual sale had been made at the time of cancellation or indeed at the time of the Hearing, almost a year after the company was set up.
· (h) and (i) are not relevant to Mr Jo as he has not ceased to be engaged in matters in Australia.
116. I have found however that throughout the relevant period, the Applicant was in Australia for approximately 20 days. He was not involved to any extent in the day to day management of the business. Mr Jo has shown very little commitment to any business in Australia and has not managed any business venture here. Indeed, it was clear when he was giving his evidence, and notwithstanding the provision of telephone records and cards that Mr Jo had little knowledge of any activities in Australia.
117. I therefore find from the above that the Applicant’s conduct was inconsistent with the making of a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, and to actively participate. I am not satisfied that Mr Jo has made a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of Jo Company or Kwik Holdings or any other business in Australia, or, given his evidence that his skills and expertise are required and utilised 8 – 9 hours a day six days a week in his business in Indonesia, that he intended to continue to make such efforts. I was satisfied that the conditions in section 134(2) of the Act were not met.
118. For the above reasons, and bearing in mind that the Applicant spent only 20 days in Australia from the date his visa was granted on 15 October 1999 until the Respondent’s delegate cancelled it on 3 February 2003, and a further 17 since, I find that the Applicant did not, at the date of cancellation, hold an intention to continue making the genuine efforts required pursuant to section 134(2) of the Act.
THE RESIDUAL DISCRETION
119. I have taken into account the residual discretion raised in Kim (supra) so that notwithstanding Mr Jo not having succeeded in relation to the tests in section 134(1) and 134(2) of the Act, further consideration was necessary. Kiefel J stated at paragraph 21 of Kim (supra) that:
“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.
120. I considered that statement in relation to Mr Jo and was satisfied that notwithstanding his early problems of restructuring his business in Indonesia which he said was completed in 2002, his efforts to obtain a substantial ownership in an eligible business were not vigorous. Mr Jo’s personal participation was minimal, little could be substantiated from the phone cards tendered, and he expressed no intention to spend more time in Australia in the future, saying he still worked six days a week and some 8 - 9 hours a day in his businesses in Indonesia. I do not accept that Mr Jo required more time to obtain a substantial ownership of an eligible business.
121. I also considered the various businesses in which Mr Jo said that he had expressed interest in relation to applying the residual discretion. I was mindful in particular that the pest control business commenced very close to the date of cancellation of Mr Jo’s visa. Kwik Holdings was registered on 21 January 2003 (Tab 31 Exhibit A1), with Jo Company holding 250 $1 shares of the 100 issued, and Ms Meylia being the sole director. I was satisfied that Mr Jo did not take any personal role in developing the business which could operate without him being in Australia, and further that the business had not, by the date of the Hearing, which was approximately one year after cancellation of the visa, progressed past samples being sent to Indonesia.
122. I was mindful of Member McLean’s findings in Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 380, where Mr McLean held that it was the day to day participation in the management of the business activities of the Applicant which had to be examined, and not the location of the Applicant. In my view that case is not on foot with Mr Jo’s situation, as Member McLean accepted that the Applicant in Widjaja was in a joint venture and was required as part of the conduct of that business to be located in Asia. That does not apply to Mr Jo’s situation and Widjaja (supra) can be distinguished, and does not assist with applying the residual discretion. I was mindful further that the Act requires the day-to-day management of an eligible business in Australia.
123. After taking into account all of the evidence and submissions, I was satisfied that the discretionary power in section 134(1) of the Act to cancel Mr Jo’s Business Skills Visa should be exercised, and the decision under review should be affirmed.
DECISION
124. The Tribunal affirms the decision under review relating to Mr Jo Tien Khoen, being the decision of the Minister for Immigration, Multicultural and Indigenous Affairs, the Respondent in these proceedings, dated 3 February 2003 to cancel Mr Jo’s Business Skills Visa pursuant to section 134(1) of the Migration Act 1958.
I certify that the 124 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member
Associate Guy Moloney
Dates of Hearing: 2 & 3 December 2003; 1 March 2004
Date of Decision: 13 May 2004
Representative for the Applicant: Mr J Coelho, Coelho & Coelho Solicitors
Solicitor for the Respondent:Ms S Goodman, Blake Dawson Waldron Solicitors.
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