Koosasi and Minister for Immigration and Multicultural and Indigenous Affairs

[2005] AATA 1107

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1107

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/1352

GENERAL ADMINISTRATIVE  DIVISION

Re:         BUDISANTOSO KOOSASI

Applicant

And: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       Mr E. Fice, Member

Date:             9 November 2005

Place:            Melbourne

Decision:1.        The Tribunal affirms the decision under review.

2.As there has been no application by the secondary visa holders for a review of the respondent's decision as it pertains to them, the Tribunal affirms the respondent's decision to cancel their visas.

(sgd) E. Fice

Member

MIGRATION –cancellation of business skills visa – substantial ownership interest in an eligible business in Australia – exercised skills or made a genuine effort in actively participating at a senior level in the day‑to‑day management of the business in Australia

Migration Act 1958 ss 134, 135

Hope v The Council of the City of Bathurst (1980) 144 CLR 1

REASONS FOR DECISION

9 November 2005  Mr E. Fice, Member

1. Mr Budisantoso Koosasi was granted a Business Skills Migration Class Visa (sub‑class 127) (the visa) in July 2001. His spouse and three children were also granted visas (the secondary visa holders), being members of his family unit. On 1 July 2004 the Minister for Immigration and Multicultural and Indigenous Affairs (the Minister) issued a Notice of Intention to Cancel (the Notice) his visa. The Notice explained that, if his visa were cancelled, then the visas held by his spouse and children must also be cancelled unless they were able to establish that they would suffer extreme hardship as a result of having their visas cancelled. In response to the Notice, by letter dated 5 August 2004, a migration agent, acting on behalf of Mr Koosasi and his family, set out reasons why the visa should not be cancelled. Having considered that letter, on 4 November 2004, a delegate of the Minister decided to cancel Mr Koosasi's visa and those held by the members of his family unit. Mr Koosasi seeks a review of that decision pursuant to s 136 of the Migration Act 1958 ("the Act"). 

2. Mr Koosasi represented himself and appeared by telephone from Indonesia. He participated in the hearing through an interpreter in the hearing room. Mr A. Chand, solicitor, appeared on behalf of the Minister. The Tribunal had before it the documents pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, as well as documents relating to a company called Germich Exportindo Pty Ltd.

BACKGROUND

3.      Mr Koosasi first arrived in Australia with his family on 16 July 2001.  Together with his brother‑in‑law, Mr Eric Yonathn, Mr Koosasi set about to establish an export business.  After about 12 months of assessing the goods that might be exported to Indonesia, Mr Koosasi decided to commence a business exporting lead products.  In order to do   that,   Mr Koosasi caused a company, Germich Exportindo Pty Ltd (ACN 102 470 342)  ("Germich"), to be incorporated on 10 October 2002.  Mr Koosasi, Catherine Yonathn, Eric Yonathn and Vandalia Yonathn were its original directors.  Gerry Koosasi, Mr Koosasi's son, was appointed a director on 28 April 2003.   There were 100 issued shares in the company with Mr Koosasi being the beneficial holder of 50 of those shares and Mr Eric Yonathn the beneficial holder of the remaining 50 shares.  The total paid up capital of the company was $100.

4.      By 26 February 2003, Germich had arranged for an Indonesian company, PT.Parahyangan Putra Pribumi, a battery manufacturer, to purchase lead ingots from Pasminco Metals Pty Ltd ("Pasminco").  Pasminco exported nine shipments of lead ingots between April 2003 and August 2003.  There was one further shipment of lead ingots in August 2004, as well as a shipment of frozen beef hearts and a shipment of honey murcott mandarins in September 2004.  The company has not been involved in any other business activities since that time. 

5.      After he completed the Survey of Business Skills Migrants – 24 Months form ("the 24‑month survey"), the Department of Immigration and Multicultural and Indigenous Affairs (the Department) wrote to Mr Koosasi on 21 April 2004, requesting further and more detailed information about business conducted by Germich.  When the Department received no response from Mr Koosasi by the requested date, 21 May 2004, the Department sent the Notice to Mr Koosasi.  Although Mr Koosasi arranged for a response to the Department's Notice, the Department was not satisfied with the response received from Mr Koosasi.  As a result, the Minister cancelled his business visa, and the visas of his family, on 4 November 2004. 

PARTIES CONTENTIONS

6.      The Minister contends that Mr Koosasi's visa, and the visas issued to the secondary visa holders, were properly cancelled on the grounds that Mr Koosasi:

(a)has not obtained a substantial ownership interest in an eligible business in Australia;

(b)has not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia;

(c)is not utilising his skills in actively participating at a senior level in the day‑to‑day management of an eligible business in Australia; and

(d)has not made a genuine effort to utilise his skills in actively participating at a senior level in the day‑to‑day management of an eligible business in Australia.

7.      Although Mr Koosasi did not file a statement of facts and contentions, from the evidence he gave by telephone at the hearing and from the correspondence which was filed with the Tribunal, it appears that Mr Koosasi contends that:

(a)he established an export company which entered into the business of exporting lead products from Australia to Indonesia;

(b)the lead exporting business was continued on a regular basis for as long as it was commercially viable to do so;

(c)the company has sourced at least two other export commodities of which limited shipments were made;

(d)the company has, since September 2004, been searching for new export markets;

(e)he has used his skills at a senior level in the management of the company while in Australia and also while in Indonesia; and

(f)that his children live and study in Australia and that he is thinking of buying a house in Australia and has transferred almost $500,000 in personal assets and cash to Australia.

CONSIDERATIONS

8. The grounds for cancellation of business visas are set out in s 134 of the Act which, insofar as it is relevant, provides:

134(1)      Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:

(a)has not obtained a substantial ownership interest in an eligible business in Australia; or

(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or

(c)       does not intend to continue to:

(i)hold a substantial ownership interest in; and

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

an eligible business in business.

(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).

…

Section 134(10) of the Act provides:

…

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.

…

9.      To fall within the definition of "eligible business", as set out in s 134(10) of the Act, Mr Koosasi must have made a genuine effort to have obtained a substantial ownership interest in a business.  The question is whether Germich in fact conducted a business as a consequence of its exporting activities.  The High Court in Hope v The Council of the City of Bathurst (1980) 144 CLR 1 described carrying on a business as (at 8-9):

…

… activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis.

10.     There is documentary evidence which discloses that Germich sourced lead ingots from Pasminco for sale to an Indonesian company, Pt. Parahyangan Putra Pribumi on nine occasions between April 2003 and August 2003.  It appears that there was one shipment in April, three in June, four in July and one August 2003.  There was one further shipment of lead ingot in August 2004.   The Pasminco order confirmation indicates that the purchaser of the lead was Germich and that it was to be shipped to Pt. Parahyangan Putra Pribumi in Indonesia.  Pasminco's invoices detailed CV Cahaya Ray Jaya as the customer and its address to be Bandung, Indonesia.  Mr Koosasi resides in Bandung. In any event, Germich purported to arrange the transaction as the seller’s agent and then sought a commission from the purchasing company to be transferred directly to its account.  From the scant two pages of a bank account which Germich apparently has with the ANZ Bank, there is one entry on 22 October 2003 indicating a telegraphic transfer for $324.13.  That appears to accurately reflect what is stated in a letter from Pt. Parahyangan Putra Pribumi regarding the transfer of a commission, which appears to be 1 per cent of the invoiced total.

11.     The Profit and Loss Account for Germich for the year ended 30 June 2003 discloses gross receipts of $1890.25.  After allowing for expenses, the company made a loss before income tax of $3.75.  For the financial year ended 30 June 2004, Germich had revenue in the sum of $1327, resulting in a loss before tax of $335.80.

12.     Given the extremely brief period during which Germich traded actively in the export of lead ingots, it is difficult to determine whether it was carrying on a business in a way described by the High Court in Hope's case.  It appears as though the activities were conducted for the purposes of profit, even though no profit was made as at 30 June 2003.  Of course the company at that stage had only been engaged in the business for some two months.  The conduct was continuous and repetitive, at least for a period of four months.  That export activity certainly appears to be genuine, although there is only one client involved.  However, if Germich conducted a business in 2003, it is clear that it had ceased to do so by August 2003.  It is true that there were three transactions in 2004:  one shipment of lead, one of frozen beef hearts and one of mandarins were exported to Indonesia.  However those activities could not be described as being undertaken on a continuous and repetitive basis.  Therefore, on 4 November 2004, when Mr Koosasi's business visa was cancelled, Germich's activities could not be described as "carrying on a business".  Therefore, it is my view that Mr Koosasi has not obtained a substantial ownership interest in an eligible business in Australia.  That finding alone is sufficient justification for the action taken by the Minister to cancel Mr Koosasi's business visa. I will, nevertheless, deal with the other criteria.

13.     Mr Koosasi also gave evidence about his day‑to‑day involvement in the business activities of Germich.  Although Mr Koosasi is a director of the company, he said that his wife and son managed it.  He said that, although he receives reports from them on a regular basis, even daily if there were problems, normally he would contact them at least once a week to ask to ask how "it is going".  He admitted there were seldom problems with the business in Australia; but it was clear that he did not have any hands-on dealings with the business at all.  He did not seek out the buyers for any products to be exported from Australia and he had no knowledge of its financial affairs whatsoever.  He said that he conducted a motorcycle business in Indonesia and that he spent seven to eight hours per day on that business.  He did not know the name of the company from whom the lead was sourced in Australia. 

14.     Mr Koosasi's wife, Tjiang Yean Khun, also gave evidence by telephone from Indonesia.  She knew very little about the financial affairs of Germich.  She said that the children managed the company in Australia.  Mr Koosasi was not able to articulate a business plan for the company and he only gave a vague account of the possibility of sourcing another product from Australia for export to Indonesia.  Nothing concrete was offered.  It was very clear, on the evidence before me, that Mr Koosasi is not utilising his skills in actively participating at a senior level in the day‑to‑day management of any business which Germich has conducted since its incorporation. 

15. Although the circumstances may exist where the Minister may cancel a business visa under s 134(1) of the Act, a business visa must not be cancelled if the Minister is satisfied that its holder has made a genuine effort to obtain a substantial ownership interest in an eligible business; the holder has made a genuine effort to utilise his or her skills actively participating at a senior level in a day‑to‑day management of that business; and the holder intended to continue to make such genuine efforts.

16. Section 134(3) of the Act sets out some matters that the Minister may take into account in determining whether a person has made a genuine effort. However, on the evidence, it does not appear that Mr Koosasi is able to take advantage of the genuine effort provisions. There is no business proposal which can be considered to be genuine, realistic and achievable. There has been no research done in Australia into the eligibility of businesses under the business visa provisions of the Act. There has been no contact with any Australian government department seeking advice. Since Mr Koosasi was granted a business visa, he has spent only 71 days in Australia. Also, on his own evidence, he has spent very little, if any time, involved in the business of Germich in Australia. He has undertaken little, if any, business activities on behalf of Germich. While in Indonesia, he spends most of his time working on his Indonesian business. Therefore, I am satisfied that Mr Koosasi does not meet the genuine effort requirements set out in s 134(2) of the Act.

CONCLUSION

17.     I am satisfied that Germich was not, at the time that Mr Koosasi's business visa was cancelled, an eligible business as defined under the Act. Although there was a spurt of business activity for about four months in 2003, there have only been three business transactions in the following two years. At best, they could only be described as ad hoc transactions.

18.     It was very clear from Mr Koosasi's evidence that he has not participated actively at a senior level, or at any other level, in the day‑to‑day management of the business of Germich.  Although he said that his wife and children were essentially responsible for the conduct of that business, there was no evidence before the Tribunal to that effect.

19.     The evidence before me also clearly points to the fact that Mr Koosasi has not made a genuine effort to satisfy the requirements for the holding of a business visa.  After the initial business activity in 2003, no business proposals have been developed and there is no formal business plan.  The only evidence before the Tribunal was that Mr Koosasi was attempting to find further export opportunities although, in the 12 months since the last 3 transactions conducted by Germich, there has been nothing in the way of a business transaction.

20.     Although Mr Koosasi claimed that he had invested some $500,000 in Germich, there was no evidence of any such investment.  The only bank account statements in evidence disclose that the company, as at 21 November 2003, had a balance of $2331.25.  It is a company which is capitalised to $100 with Mr Koosasi holding 50 per cent of the shares.  That does not indicate any substantial investment in Germich. 

21.     The respondent’s decision to cancel Mr Koosasi’s business visa must be affirmed.  Also, as there has been no application by the secondary visa holders for a review of the respondent's decision to cancel their visas, the respondent's decision to cancel those visas must also be affirmed.

I certify that the twenty‑one [21] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr E. Fice, Member

(sgd)     Catherine Thomas

Clerk

Date of Hearing  4 October 2005
Date of Decision  9 November 2005
Solicitor for the applicant:           Nil – self‑represented

Solicitor for the respondent          Mr A. Chand, Clayton Utz