Koosasi and Minister for Immigration and Multicultural Affairs
[2006] AATA 179
•1 March 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 179
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/752
GENERAL ADMINISTRATIVE DIVISION ) Re
Budi Soesanto Koosasi
Applicant
And
Minister for Immigration and Multicultural Affairs
Respondent
DECISION
Tribunal Professor GD Walker, Deputy President Date1 March 2006
PlaceSydney
Decision The decisions of the respondent are affirmed.
..............................................
Professor GD Walker
Deputy President
CATCHWORDS
IMMIGRATION – business skills visa – cancellation of business skills visa and secondary family unit visas – applicant’s company is not an eligible business – no genuine effort established – no evidence to suggest a genuine interest in maintaining company – requirements of business visa not met – no factors to warrant exercise of discretion.
Migration Act 1958 ss 127, 134(1) (2) (3) (4) (5) (6) (10)
Migration Regulations 1994 cl 127.216
Migration Series Instructions No 133 – Visa cancellation under subdivision G – cancellation of business visas
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Nong v Minister for Immigration and Multicultural and Indigenous Affairs (2000) 106 FCR 257
Re Andiwidjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 397
Re Dhanjal and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1120
Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703
Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767
Re Haman and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113
Re Hidayat and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 916
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579
Re Wong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
ReYam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
REASONS FOR DECISION
1 March 2006 Professor GD Walker, Deputy President Summary
1. The applicant, Budi Soesanto Koosasi, aged 50, is a citizen of Indonesia. On 7 January 2002, he was granted a subclass 127 business skills visa valid from 2 February 2002. A secondary business skills visa was also granted to his wife, Lilijana Santoso, and their two children, Elmira Elisa Koosasi and Tania Monika Koosasi.
2. A delegate of the then respondent, the Minister for Immigration and Multicultural and Indigenous Affairs, decided to cancel Mr Koosasi’s business visa on the grounds that he does not have a substantial ownership interest in an eligible business in Australia, he does not utilise his skills in participating in that business, and does not intend to continue with the business in the future. The delegate also cancelled the secondary visas of his wife and children. Those are the decisions to be reviewed by the tribunal.
Issue
3. The issue for the tribunal is whether it is satisfied that the applicant has failed to comply with any of the requirements of s 134(1) of the Migration Act and, if so, whether he has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business and whether he intends to continue to make a genuine effort and if it is satisfied that the applicant does not meet one or all of the criteria, whether it should exercise its discretion to cancel the business visa granted to Mr Koosasi and to Ms Santoso, Elmira Koosasi and Tania Koosasi as secondary visa holders.
Background
4. Mr Koosasi, who was born in Sumenep, East Java, Indonesia, on 12 October 1955 and is aged 50 and Ms Lilijana Santoso, who was born in Indonesia on 10 August 1961 and is aged 44, have three children: Valentino Koosasi born 17 February 1987 and aged 19, Tania Monika Koosasi born 15 August 1990 and aged 15 and Elmira Elisa Koosasi born 31 March 1993 and aged almost 13. Ms Santoso and the two youngest children, Tania and Elmira, are listed as secondary visa holders in respect of Mr Koosasi’s business skills visa.
5. Between 1980 and 1990, Mr Koosasi was employed by his brother’s company, Genteng Kali Motors, in various positions including from 1987 until 1990 as general manager. In 1990, the applicant established his own business, UD Mobil Delapan, which was involved with selling and purchasing second-hand cars and purchasing new cars to customers’ orders. Mr Koosasi owned 100 per cent of the company which eventually closed on 20 May 2003 after suffering financial difficulties due to political unrest.
6. On 4 June 1999, the applicant applied for a business skills visa (T p205). On 7 January 2002, Mr Koosasi was granted a subclass 127 business skills visa and secondary business visas were granted to his wife and children, on the condition that he enter Australia no later than 5 March 2002 (T p123). The visas were valid for a period of three years from entry. On 2 February 2002, Mr Koosasi entered Australia.
7. By letter dated 20 January 2004 sent to Mr Koosasi at his address at 1 Tedwin Avenue, Kensington, NSW, he was asked to complete a “Survey of Business Skills Migrant – 24 Months (form 1010)”, to be completed and returned by 9 March 2004 (T26 p217). Mr Koosasi returned the completed survey to the department on 10 March 2004 (T p223). He also forwarded copies of documents including a business plan and taxation records for his Australian company, Great Bamboo Pty Ltd which was registered on 23 January 2003 (T p231). He also provided copies of documents relating to the export of wheat flour from Australia to Indonesia (T pp244‑280).
8. By letter dated 8 February 2005 sent to Mr Koosasi’s address then registered with the department being 8 Doran Street, Kingsford, NSW, an officer of the business skills section of the then Department of Immigration and Multicultural and Indigenous Affairs (“DIMIA”) informed Mr Koosasi that the department intended to cancel his business skills visa under s 134 of the Migration Act 1958 (“the Act”) because while he had informed the department he had a 100 per cent ownership interest in Great Bamboo, there was no evidence that he had a substantial ownership interest in an eligible business in Australia, he utilised his skills in the day‑to‑day management at a senior level of that business, or that he intended to continue holding a substantial interest in the eligible business and utilising his skills in the management of that business. The delegate also informed him that the secondary visas of his wife and children would also be automatically cancelled if his visa were cancelled. He was invited to respond and provide documentary evidence including, inter alia, evidence of funds in Australia, financial statements, taxation records, business plans, by 17 March 2005 (T29 pp282-286). By letter of the same date, the department also notified Ms Santoso of its intention to cancel her secondary visa and those of her children (T30 p288).
9. On 16 March 2005, the migration agent for the applicant, Erwin Marzukie of Uniland Migration, replied on behalf of the applicant. In his response, he submitted that Great Bamboo had made three export transactions totalling approximately $107,932 (based on the sales values of the exports) which was more than the suggested guideline figure of $100,000 and therefore it was reasonable to conclude that Great Bamboo was an eligible business; that the applicant and his spouse together held a 100 per cent shareholding in the company which he submitted “This is NOT substantial, it is fully owned by family members” (T p291); the company had made a profit and the applicant was currently negotiating further export contracts; the company intended to continue operating in the future; that the applicant had transferred funds to Australia amounting to approximately $755,000 to be used for working capital for the company and for the purchase of real estate; and that he is involved in the day-to-day management of the company through meetings and other forms of communication including telephone negotiations with customers and that his involvement in the business is “not questionable” (T pp290‑295).
10. On 17 May 2005, a delegate of the respondent decided to cancel Mr Koosasi’s business skills visa on the grounds that he had not obtained a substantial interest in an eligible business in Australia, he is not utilising his skills in participating at a senior level in the day-to-day management of the business, and he did not intend to continue to hold a substantial interest in the business (T2 p6). The delegate found that the one export transaction conducted by Great Bamboo in October 2003 and the two in September 2004 were not sufficient to demonstrate a “continuous and repetitive business activity”, that there were minimal business transactions as evidenced by the bank statements, and there was no evidence of how the company had developed links with international markets. There was also no evidence that Mr Koosasi is involved in the day-to-day management of the business at a senior level nor did he provide sufficient evidence to indicate that he had a senior role in the business and that while telephone negotiations may have been held, it was reasonable to expect that all serious negotiations would result in written confirmation of oral agreements (T p10). The delegate was therefore not satisfied that the applicant had a substantial ownership interest in an eligible business or that he was involved in that business at a senior level on a day-to-day basis. Having considered all the evidence, the delegate exercised her discretionary powers and cancelled his visa. On the same day, the secondary visas of Ms Santoso and her children were also cancelled (T3 p12). On 15 June 2005, Mr Koosasi lodged an application for a review of the decision made against him.
11. At the hearing, the applicants were represented by Nicholas Poynder, of counsel, and the respondent was represented by John Bird, solicitor, Phillips Fox lawyers. The evidence before the tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with the evidence tendered by the parties at the hearing. Oral evidence in person was given by Mr Koosasi.
Applicable Legislation
12. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. Departmental policy with regard to the cancellation of business visa is contained in s 134 of the Migration Series Instructions No 133 – Visa cancellation under subdivision G – cancellation of business visas.
13. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in Mr Koosasi’s case are as follows:
134. Cancellation of business visas
(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).
14. Section 134(10) of the Act includes the following definitions:
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.
established business in Australia visa means a business visa a criterion for whose grant:
(a) relates to the applicant having an established business in Australia; or
(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a)
…
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.
15. In the case of Ms Santoso and the children, ss 134(4), (5) and (6) are relevant:
(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.
(6) The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.
16. Paragraph 4.3.2 of the Migration Series Instructions (MSI) notes that eligibility relates to the achievement of the stated objectives through the activities of the business, not directly to the size or scale of the business.
17. Paragraph 4.5.1 of the MSI also provides guidance as to whether a genuine effort has been made for statutory purposes. While the guidelines are not binding on the tribunal and should not be applied so as to impose requirements which go beyond the statute (see Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634), the guidelines militate against inconsistency in decision making (see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695). The guidelines state:
4.5 What is a “genuine effort”?
4.5.1 If, after 24 months, a migrant is not in business, he/she must establish that a “genuine effort” has been made to engage in business since arrival. The Minister must assess “genuine effort”. S 134(3) of the Act lists any or all of the factors which the Minister may take into account:
…
[Notes referring to factors listed above. Decision makers may take account of these notes to guide them in the interpretation of 4.5.1
a. business proposal which is considered genuine, realistic and achievable;
b. formal contract with partners 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 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant.
g. 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.
h. failure to comply with a notice for information under s 137, mandatory monitoring of Australian address and return of survey forms.]
4.5.2While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled. The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis. For example, while the factors listed in 4.5.1 above may be indicative of “genuine effort”, lack of them will not necessarily be decisive. The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made “genuine effort”. A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.
Evidence
18. Mr Koosasi gave evidence orally and by a written statement (Exhibit A2) that he adopted at the hearing.
19. In Indonesia Mr Koosasi has for some years operated a successful used car business, UD Mobil Delapan, and his wife managed a seafood and Thai restaurant, the Gryo Bambu. After a family visit to Australia in December 1996, Mr Koosasi and Ms Santoso began to consider the possibility of establishing a business in Australia and eventually moving here permanently. He applied for a business visa in 1999 and in 2000 made another visit to Australia, in the course of which his brother‑in‑law took him and his wife to his café at Double Bay, the Double Bay Patisserie. They discussed how to run a café, labour costs, site contracts, suppliers and other matters. Mr Koosasi also visited some car dealers to enquire about the market. At that stage he was thinking of opening a café and a car dealership or car workshop. He also had in mind the possibility of exporting Australian used cars to Indonesia. The applicant and his wife investigated the Anzac Parade, Kingsford area as a possible location for a café, and made approaches to suppliers of catering equipment.
20. At that time the exchange rate was such that the price of Australian used cars suitable for export to Indonesia was very competitive. Mr Koosasi made enquiries with Larke Hoskins, Toyota and a Honda dealership and attended a car auction in order to evaluate prices. He also attended a seminar about business in Australia conducted by the New South Wales Department of State and Regional Development.
21. After his visa was granted on 7 January 2002, Mr Koosasi made another visit to Australia from 24 February to 6 March 2002. That was more in the nature of a family visit, but his plan was that after he returned to Indonesia he would gradually reduce his business there. He proposed to transfer the running of the business to his “right hand man”, Judianto. The business would then be used as the showroom and marketing arm for the cars which Mr Koosasi hoped to import from Australia.
22. Meanwhile, in mid 2002 Ms Santoso attended a food exhibition at the Sydney Exhibition Centre with a view to identifying food products that could be exported. She contacted Mr Koosasi in Indonesia with some ideas and they calculated and compared prospective prices with those of Indonesian businesses already in the field, and visited prospective customers.
23. The idea of opening a café was abandoned, however, in light of the experience of the applicant’s brother-in-law with the Double Bay Patisserie, which was unprofitable and had to be closed. At the hearing he said that even after the patisserie ceased operating, he continued to canvass the possibilities for a café, in such areas as Anzac Parade.
24. At that time he decided to close his business in Indonesia, as Judianto was not making a success of running it on his own. As to whether he considered the possibility of finding another partner to manage Mobil Delapan, he gave a rather confusing answer, that in Indonesia it is common to have a “right hand man”, that if one is running a showroom it is necessary to be personally involved and one cannot leave it to another person. He had given Judianto the opportunity of showing that he could perform better in the management role but he had still not come up to expectations. In addition, after 2003, the exchange rate moved against the rupiah and car imports from Australia were no longer economic. The car business was closed in May 2003.
25. In January 2003 the applicant visited Australia for the purposes of establishing his company, Great Bamboo Pty Limited, in which he holds half the share capital and his wife the other half.
26. During the first half of 2003 Mr Koosasi and Ms Santoso explored the possible export of a number of products from Australia to Indonesia, including wheat flour, flavoured drinks, bird seed, soap products and fruit juice. They contacted Australian companies in all those fields. Many of the ideas came to nothing, because of factors such as high price, unsuitable specification or short shelf life. Four transactions were, however, entered into:
·On 3 October 2003, Great Bamboo exported 112 metric tons of wheat flour purchased from Manildra Flour Mills for US$31,500.00, reselling it to an Indonesian food company for US$32,955.00. The profit after expenses was approximately A$2,175.00.
·On 5 September 2004 the company exported 18,155 kilograms of beef liver from Fremantle to Jakarta. The product was purchased from Culley Group for $21,242.00 and sold to an Indonesian company for US$23,057.00.
·On 26 August 2004 the company exported 1,322 cartons of fresh oranges and mandarins acquired from Paramount Export Co. for $24,464.00 and resold them to an Indonesian company for A$27,626.00.
·On 5 April 2005, the company exported a second shipment of wheat flour purchased from Manildra Flour Mills for US$29,403.00 and resold to an Indonesian company for US$32,670.00.
In the current financial year Great Bamboo had a turnover of $104,126.00 and a profit of $11,341.00.
27. In March 2004 Mr Koosasi’s Sydney accountant prepared a business plan for Great Bamboo (Exhibit A2 pp40‑46). It contained sales projections that were not attained and which, even on the basis of the company’s experience to date, were highly optimistic. Mr Koosasi admitted as much, but said that the shortfall has resulted from the rise of the Australian dollar and that he had hoped that it would fall again.
28. Mr Koosasi said, however, that since his visa was cancelled he had not been making as much effort to continue to export goods because he was worried about the future of his business in Australia. Asked if there had been any repeat orders following the four export transactions, he said that there were more, but he had continued to follow his interest in the automotive industry and had entered a partnership with another Indonesian who conducted a motor workshop in Kensington named Indo Motor. He entered the partnership in April 2005, investing $50,000.00 in it, but following some disagreements decided in October 2005 to withdraw and sold his interest back to his partner.
29. Previously, on 28 October 2003 he purchased the family house at 8 Doran Street, Kingsford for $1.1 million. The funds were transferred form his wife’s accounts in Indonesia. Mr Koosasi is currently living on certain savings that he holds in Singapore and on funds realised from the sale of business assets in Indonesia.
30. His son Valentino has been accepted into a four-year computer science degree program at the University of New South Wales and would like to remain in Australia. His daughter Tania is now in year 10 at Sacred Heart, Kensington, and his daughter Elmira is in year 7 at the same school.
31. The applicant said that during his most recent stay in Indonesia he had visited his sick mother but had also continued to look for sales opportunities with the customers he had approached before his visa had been cancelled, in order to maintain business relations for Great Bamboo. He had only spent about four hours a week on that activity, however, although he had sometimes taken representatives of customer companies to dinner.
32. The applicant said that he has no further business interests in Indonesia and plans to sell his last asset there, his house in Surabaya, and transfer the proceeds to Australia. His plan is to open a new car workshop and locate a new business partner once he knows his visa status. He considers that his family is settled in Australia and proposes to move here permanently.
Consideration
33. The tribunal should have regard to all relevant evidence to enable the making of findings of fact in relation to the cancellation of Mr Koosasi’s and the secondary family unit members’ visas as at the date of the decision, that is 15 December 2004: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342. The tribunal has held that it is entitled to look at activities after the date of visa cancellation and up to the date of the hearing where they can be related back to events prior to that date (see Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703; Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767; Re Griffiths and Migration Agents Registration Authority [2001] AATA 240).
34. The predominant view now appears to be that the tribunal when reviewing a cancellation decision cannot take into account material relating to facts arising after the date of cancellation: Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 paras 12‑14, Re Andiwidjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 397 at para 37, Re Wong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54 at para 37, Re Haman and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113 at paras 52‑53, Nong v Minister for Immigration and Multicultural and Indigenous Affairs (2000) 106 FCR 257 at 264.
35. The decision to cancel Mr Koosasi’s business skills visa was made pursuant to s 134(1) of the Act on the grounds that the delegate concluded that (T p14):
(a)he 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)do not intend to continue to:
(i)hold a substantial 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.
The terms “ownership interest” and “eligible business” are defined in s 134(10), set out above.
36. Section 134(2) provides that the Minister must not cancel a business visa under s 134(1) if the Minister is satisfied that the person:
(a)has made a genuine effort to obtain a substantial ownership 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.
When considering whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account the matters set out in subsection (3), set out above.
37. The business visa cancellation process is activated if the visa holder’s record and performance displays any of the shortcomings listed in s 134(1). The first of those is that the holder “has not obtained a substantial ownership interest in an eligible business in Australia” (s 134(1)(a)). What constitutes an “eligible business” is defined in s 134(10), set out above.
38. The applicant submitted in his statement of facts and contentions (Exhibit A1), that Great Bamboo is an eligible business as it has led and will lead to the export of Australian goods, and that its export and resale of Australian foodstuffs on four occasions to date amounts to a “continuous and repetitive basis for the purpose of making a profit” and that the purchasing of the goods for export was conducted and paid for in Australia. He submitted that the applicant’s interest in the business is substantial as he owns a 50 per cent shareholding.
39. The respondent in her statement of facts and contentions (Exhibit R2) submitted that while the applicant has claimed a 50 per cent shareholding in Great Bamboo, there is little or no documentary evidence submitted by the applicant that this represents anything of value or of a considerable amount. The respondent also submits that the business is not an “eligible” business as it has only completed four export transactions since its registration in January 2003 and such limited number could not be considered continuing or repetitive (relying on Re Hidayat and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 916); there is no evidence the company has developed links with international markets; and the company has not created employment; exports of wheat, flour and juice has not introduced any new or improved technology to Australia.
40. Great Bamboo can be characterised as a family company. The shares held by the applicant and his wife in it represent a total net equity of only $652 (T p291) but as they represent 100 per cent of the company’s issued capital, they do constitute a substantial “ownership interest” within the meaning of s 134(10): see Re Dhanjal and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1120 at paras 69, 77, MSI 133 para 4.5.1(f). The question then becomes whether that substantial ownership interest is in “an eligible business in Australia” (s 134(1)(a), s 134(10)).
41. Great Bamboo executed one export transaction in October 2003, two in September 2004 and one in April 2005. None of the four customers placed any repeat orders and no contracts were entered into for future transactions. The problems that the applicant said had obstructed further dealings by Great Bamboo, such as the exchange rate and shelf life restrictions, were not matters within the applicant’s control. His approach to dealing with the exchange rate was simply to hope that it would improve, which might have been understandable but was not productive. Nothing in the evidence gave any reason to believe that Great Bamboo would continue to trade in a repetitive or continuous manner. For the above reasons I find that it is not an eligible business.
42. It therefore becomes necessary to consider whether the applicant has made the genuine efforts specified by s 134(2)(a) and (b) and has the intention required by s 134(2)(c), taking into account the factors listed in s 134(3). The tribunal notes the case of ReYam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 as a useful guide to the meaning of the relevant provisions. With regard to the words “genuine effort”, Senior Member Dwyer notes at paragraph 88 that:
The Act does not specifically include any requirement that the “genuine effort” must be likely to succeed, or must meet any threshold level, beyond being genuine.
43. As to whether Mr Koosasi has made a genuine effort to obtain a substantial ownership interest in an eligible business (s 134(2)(a)), I have concluded that he has a substantial ownership interest in Great Bamboo, but that Great Bamboo was not an eligible business at the time of cancellation. Further, the evidence outlined above of the sporadic nature of its operations, together with the other evidence, suggests that he did not make a genuine effort to convert it into one.
44. Turning then to s 134(2)(b), whether the tribunal is satisfied that the applicant has made a genuine effort to use his skills in actively participating at a senior level in the day-to-day management of the business, the applicant in his statement of facts and contentions (Exhibit A1), submits that the applicant has spent 360 days in Australia from the date of entry to the cancellation of his visa on 17 May 2005, including 272 days from January 2004 to 17 May 2005. The applicant submitted that he has therefore spent over 50 per cent of his time in Australia and that during this time he has done what is necessary for the operations of the business. He also submitted that the applicant spent most of his time in Indonesia in 2002 because he was attempting to transfer his Indonesian business to his “right-hand man”; he spent most of 2003 making enquiries as to possible exports and then by 2004-2005 having established his suppliers, he spent more time in Australia investigating further possibilities. He is the sole person responsible for marketing and sales.
45. The respondent contended in her statement of facts and contentions (Exhibit R2) that there is no evidence of the applicant using his skills in actively participating in the business at a senior level on a day-to-day basis; the correspondence provided as evidence suggested only isolated involvement in the business rather than active involvement on a day-to-day basis; and that even if it is accepted that a large proportion of his business is conducted over the telephone, it would be expected there would be written confirmation of any negotiations or contracts and there is no evidence of that.
46. The applicant submitted that he did develop a business proposal in March 2004 based on wheat flour and fruit juice (although the targets in this proposal were not reached by the time of visa cancellation); the applicant is in partnership with his wife, who is the joint owner of Great Bamboo; the applicant made numerous enquiries and attended a seminar conducted by the New South Wales Department of State and Regional Development; he has been physically in Australia for 360 days; although the applicant said he would transfer $500,00 to Australia, his current assets of $45,033 are substantial; the turnover for Great Bamboo was $47,366 for 2003-2004, $104,126 for 2004-2005 and therefore exceeds the $100,000 minimum business activity referred to in MSI 133; and the applicant did complete his 24‑month survey on time.
47. The respondent in her statement of facts and contentions and through Mr Bird’s submissions at the hearing argued that there was no genuine effort on the part of the applicant for the further reason that the applicant has not invested in any joint venture in Australia; the legislation contemplates consideration of partners and joint venturers other than a spouse; and that he had not undertaken significant business research, developed business proposals or transferred assets to his business and that on the evidence “these do not amount to a genuine effort and go only to indicate that the applicant did not meet his obligations. They only rely on bare assertions that the applicant has a genuine intention … the lack of activity after cancellation shows a lack of genuine effort on behalf of the Applicant. The Respondent contends that is not enough for the Applicant to merely state that he will resume business activity if his visa is reinstated, there must be evidence of a genuine intention”.
48. While the applicant did develop a business plan in March 2004, its sales projections were unrealistic and in view of already apparent exchange rate movements could have been seen to be unrealistic at the time. Though there is little documentary evidence of research undertaken by Mr Koosasi in Australia into the conduct of an eligible business, there is no reason to doubt his testimony that he investigated a variety of different possibilities including the export of cars, flour, fruit, fruit juice and soap. There is no evidence of partners or joint venturers within s 134(3)(b) other than his wife. He was present in Australia for 360 days, which in the final 18 months of his visa represented over 50 per cent of his time. Overall it represents only one year in three, but there have been other successful applicants who have spent less time in Australia than that, but were able to show that their absences were in the service of their Australian business plans. Part at least of the time Mr Koosasi spent in Indonesia can be attributed to his efforts to transfer his car sales operation to Judianto, and part could be attributed to his attempts to promote the sales of an export-oriented business. In my view s 134(3)(d) does not weigh against finding a genuine effort in this case.
49. On the other hand, the applicant has transferred less than one tenth of the $500,000.00 that he foreshadowed at the time of his application in 1999 (T p54). Mr Poynder sought to account for that by pointing out that while he was in a state of uncertainty about his visa, it would have been imprudent for him to “pour money” into his Australian business. I do not, however, think that consideration sufficiently accounts for the small scale of his overall transfer of funds during the three year period of the visa.
50. As regards s 134(3)(g), Mr Poynder pointed out that Great Bamboo’s turnover in 2004 - 2005 was $104,126.00, which exceeds the suggested $100,000.00 minimum in MSI 133 paragraph 4.5.1. But turnover is a figure related to an accounting period, usually a financial year. While Great Bamboo’s turnover exceeded $100,000.00 in 2004 - 2005 it was only $47,366.00 in 2003 - 2004. As the delegate noted in the notice of intention to cancel (T p283), one could not be satisfied that the company is viable on a long-term basis.
51. Section 134(2)(c) requires that the decision maker also be satisfied that the visa holder intends to continue to make the genuine efforts referred to. The absence of any documented prospects of significant business activity on the part of Great Bamboo at the time of cancellation (or since) does not suggest that such an intention is present. The applicant’s involvement in Indo Motor occurred after visa cancellation and in any event indicated little confidence in Great Bamboo’s future prospects.
52. The applicant says he now plans to open a new car workshop and find a business partner once he knows his visa status, but he has not presented any form of business plan in that regard and gives no details of what he has in mind or how he intends, for example, to overcome the problem of his lack of English skills in an essentially service-based industry. The car workshop could therefore only be called an idea at this stage, and could not be viewed as constituting a firm intention. It also rather suggests that he has no great plans or expectations for Great Bamboo in the future.
53. While it would be wrong to say that the applicant has made no effort at all to meet the requirements of his visa, the sporadic and desultory activity displayed by the evidence lacks the sustained and continuous quality and the prospects of future activity implicit in the requirements of s 134(2). In my view the applicant’s case fails to meet the requirements of that subsection.
54. It is therefore necessary to consider discretionary factors.
Discretionary Factors
55. The tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in s 134(1)(a) to (c) are not satisfied (Re Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579). A common ground on which that discretion can be exercised in favour of an applicant is that further time should be given to the visa holder to undertake what was required of him or her (Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, paragraph 21). In her statement of facts and contentions, the respondent referred the tribunal to clause 127.216 of Schedule 2 of the Migration Regulations 1994 which provides that at the time of the application:
The applicant genuinely had a realistic commitment, after entry to Australia as the holder of a Subclass 127 visa:
(a) to either:
(i) establish an eligible business in Australia; or
(ii) participate in an existing eligible business in Australia; and
(b) to maintain a substantial ownership interest in that business; and
(c) to maintain direct and continuous involvement in management of that business from day to day and in making decisions that affect the overall direction and performance of the business in a manner that benefits the Australian economy.
56. The respondent contended that the visa conditions contained in the Regulations evidence an intention that business skills visas be available to persons who intend to immigrate to Australia for the purposes of establishing, or participating in, an eligible business, and to allow such persons to maintain direct and continuous involvement in the day-to-day management of that business within Australia. It would run counter to the legislative scheme to grant such a visa to a person who does not intend actively to establish and manage ongoing business activities in Australia. In her statement of facts and contentions (Exhibit R2), the respondent contended that the applicant has not demonstrated a genuine and realistic commitment to do the things referred to in clause 127.216 and that it would be contrary to the legislative scheme to allow the applicant to retain his visa.
57. The applicant did not deal with the issue of discretion in his statement of facts and contentions or in oral submissions.
58. The evidence provides no basis for concluding that the applicant would be able to satisfy the requirements of the visa if given additional time to do so. There are no other factors that would warrant the exercise of the discretion in the applicant’s favour.
59. It has not been suggested that any of the secondary visa holders would suffer extreme hardship within the meaning of s 134(5) if their visas were cancelled.
60. The decisions in relation to the applicant and the secondary visa holders should be affirmed.
I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President
Signed: .....................................................................................
AssociateDate/s of Hearing 15 February 2006
Date of Decision 1 March 2006
Counsel for the Applicant Mr N Poynder
Solicitor for the Respondent Mr J Bird, Phillips Fox Lawyers
11
15
0