Liem and Ors and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 1358
•17 December 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1358
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2004/535, Nº V2004/721,
Nº V2004/722, Nº V2004/723
GENERAL ADMINISTRATIVE DIVISION
Re: MARTINUS RAHARJA HARLIEM LIEM
CHRISTINA HALIM
CHRISTIAN HANJAYA HARLIM
KALVIN HOHAN HARLIM
Applicants
And: MINISTER FOR IMMIGRATION AND
MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal: G.D. Friedman, Member
Date: 17 December 2004
Place: Melbourne
Decision:Nº V2004/535: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/721: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/722: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/723: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
(sgd) G.D. Friedman
Member
MIGRATION ‑ business skills visa ‑ cancellation ‑ franchise ‑ whether utilising skills in actively participating at a senior level in the day‑to‑day management of business ‑ whether intention to utilise skills ‑ secondary visa holders ‑ extreme hardship
Migration Act 1958 s134(1), (2), (3), (4), (5)
Re Hindrodjojo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724
Re Huang and Ors andMinister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703Re Sutandeo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 417
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961
Re Widjojo andMinister for Immigration and Multicultural Affairs [2001] AATA 774
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
REASONS FOR DECISION
17 December 2004 G.D. Friedman, Member
1. This is an application by Martinus Raharja Harliem Liem (the applicant), his wife, Christina Halim and his children, Christian Hanjaya Harlim (born on 30 December 1979) and Kalvin Hohan Harlim (born on 20 December 1983), for review of a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) dated 27 April 2004 to cancel the applicant's Business Skills subclass 127 visa (the visa). The visas of other family members were cancelled because they are dependants of the applicant.
2. At the hearing on 9 December 2004 Ms L. Lui, solicitor, represented the applicants and Mr B. Wee, solicitor with the Australian Government Solicitor, represented the respondent.
3. The Tribunal had before it the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T23 and ST1‑ST22), plus two exhibits (Exhibits A1and A2) lodged by the applicant.
BACKGROUND
4. The applicant was born on 1 March 1953 and is married with three children. He lives in South Borneo, Indonesia and his family lives in Melbourne. On 1 December 1998 he applied for a visa, which was granted on 29 December 2000. On 9 January 2001 the applicant arrived in Australia to pursue business opportunities. On 12 November 2002 the Department of Immigration and Multicultural and Indigenous Affairs (the Department) sent the applicant a 24‑month survey form concerning his business activities, which the applicant completed on 27 December 2002. On 11 February 2003 the Department wrote to the applicant seeking additional information, which the applicant provided on 1 April 2003. On 2 January 2004 the Department sent a written notice of intention to cancel the applicant’s visa and the visas held by Ms Halim, Christian and Kalvin. On 29 January 2004 the applicant responded with an additional submission.
5. On 3 February 2004 Han Prima Pty Ltd (Han Prima) was formed for the purpose of acquiring a Baskin Robbins ice cream franchise (the business) at Melbourne Central shopping centre. The applicant holds six $1 shares and his wife and children hold the remaining four shares in Han Prima. On 13 April 2004 the applicant was approved as a franchisee under a transfer of franchise. On 15 April 2004 the applicant signed a contract of sale of the business for the purchase of goodwill, plant and equipment at a cost of $205,000. The business commenced trading on 15 July 2004.
6. On 27 April 2004 the respondent cancelled the visas held by the applicant, Ms Halim, Christian and Kalvin. On 4 May 2004 the applicant lodged an application with the Tribunal seeking review of the respondent's decision. On 22 June 2004 Ms Halim, Christian and Kalvin lodged an application for review and on 2 August 2004 the Tribunal granted an extension of time to that date.
7. At the hearing the respondent conceded that the applicant had obtained a substantial ownership of interest in an eligible business in Australia, so the only issue before the Tribunal is whether the applicant has utilised his skills in actively participating at a senior level in the day‑to‑day management of the business and has made a genuine effort to do so.
EVIDENCE
8. In oral evidence the applicant stated that he operates an electrical goods business in Indonesia and works full‑time supervising staff and meeting customers. He said that he decided to purchase the business in Australia in early 2004, and spent $300,000 to acquire the franchise. He told the Tribunal that his wife and two of his children provide day‑to‑day administrative and operational duties such as ordering stock, paying rent and other expenses, and serving customers, while he makes major strategic and financial decisions. The applicant explained that several times each week he speaks to his family by telephone for about 10 minutes regarding domestic issues, and if matters arise concerning the business, the conversations may last up to 20 or 30 minutes.
9. The applicant stated that he makes decisions as to the level of employment in the business, and currently his niece and nephew are employed to assist his wife and children, who do not receive remuneration. Under cross‑examination the applicant agreed that he has not undertaken the training provided by the franchisor, and on his visits to Australia has not spent time serving customers because his English is poor and he has not been trained in the operation of the business. He acknowledged that the franchisor makes many of the ordinary decisions and provides the uniforms, and that the shopping centre management specifies the opening hours. He has not made any written business plan.
10. The applicant said that his business in Indonesia has recently commenced. While the business has stabilised, it will take some time to become profitable. He stated that he intends to decrease his business interests in Indonesia and move permanently to Australia at an appropriate time, to be with his wife and family and to develop the ice cream business and pursue other business opportunities.
11. Ms Halim, the applicant’s wife, gave oral evidence that she was a housewife in Indonesia before coming to Australia with her family in 2001. She said that she performed similar duties in Melbourne before the purchase of the business, but has undertaken the training course conducted by the franchisor and now works in the business with Christian and Kalvin, assisted by a niece and a nephew.
12. Ms Halim told the Tribunal that prior to her arrival in Australia she experienced the impact of racial and religious riots in the area where she lived. She stated that due to political instability and continuing racial and religious unrest she would live in fear and insecurity if forced to return to Indonesia. Under cross‑examination she stated that her mother and five siblings and extended family and friends live in South Borneo. However, she said that she and her children have adopted the Australian way of life and have built up a strong social network, with a brother and his wife living in Australia.
13. Christian Hanjaya Harlim gave oral evidence that at the age of 7 he was sent from Indonesia to study in Singapore, where he lived for ten years, before arriving in Australia in 1998 to further his tertiary studies. He said he has completed a Diploma in Advanced Hospitality and a Certificate in Commercial Cookery, and has one more year to complete a Bachelor of Hospitality Management. Christian told the Tribunal that he has worked full‑time in the business with his mother since it commenced in July 2004, and hopes to resume his studies in 2005. He said that in addition to serving customers he carries out administrative duties such as ordering stock, paying accounts and organising staff rosters, but refers major decisions to the applicant during regular telephone conversations. As an example, he stated that when there was a fire on the premises he immediately contacted the applicant for instructions.
14. Under cross‑examination Christian said that he had completed the training course conducted by the franchisor. He agreed that the opening hours were largely determined by shopping centre management, and that he performs most of the daily management duties because his mother does not speak English fluently. He stated that he does not have Singaporean residency, and that he has no social network in Indonesia and has a poor command of the Indonesian language. He said that he has had a relationship with an Australian citizen for two years and would be disadvantaged if forced to return to Indonesia, particularly in view of the political instability in that country.
15. Kalvin Hohan Harlim gave oral evidence that he arrived in Australia from Indonesia as a permanent resident in 2001. He said that he has not returned to Indonesia since his arrival. Kalvin told the Tribunal that he has a Diploma in Engineering and in 2004 completed the first year of a Bachelor of Marketing. He said that he helps his mother and brother in the day‑to‑day operation of the business whenever possible and enjoys living in Australia. Under cross‑examination he stated that he would be able to study in Indonesia if forced to return, but the facilities and opportunities were far less attractive than in Australia, and would affect his future prospects. He said he was fearful of the political and religious conditions in Indonesia, although he conceded that he was not aware of the current situation.
CONSIDERATION OF THE ISSUES
16. The Migration Act 1958 Act (the Act) provides as follows:
134(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c) does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a)business proposals that the person has developed;
(b)the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g)business activity that is, or has been, undertaken by the person;
(h)whether the person has failed to comply with a notice under section 137;
(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
…
(4) Subject to subsection (5) and to section 135, if:
(a)the Minister cancels a person’s business visa under subsection (1) or (3A); and
(b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and
(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;
the Minister must cancel the other person’s business permit or business visa by giving written notice to that person.
(5) The Minister must not cancel the other person’s business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.
…
17. Paragraph 4.5 of the Ministerial Guidelines of the Migration Series Instruction (MSI) N°. 133 Visa Cancellation Under Subdivision G ‑ Cancellation of Business Visas (the Guidelines), entitled What is a 'genuine effort’? contains the following factors to assist decision‑makers in determining whether a genuine effort has been made under s 134(3) of the Act:
…
(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, ie mandatory monitoring of Australian address and return of survey forms.
18. Ms Lui submitted that the applicant made all decisions relating to the acquisition of the business while he was in Australia, and committed a substantial amount of funds to his investment. She said that although the daily operational and administrative functions were performed by Ms Halim and Christian, the major tasks including the setting of longer‑term objectives and the monitoring of performance were carried out by the applicant. Ms Lui submitted that day‑to‑day management did not require the applicant to be involved in the daily administrative tasks (Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77; Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703; and Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283).
19. Ms Lui submitted that there is no reason why the applicant needs to be in Australia in order to participate in the management of the business at a senior level (Re Jo; Re Hindrodjojo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724; Re Sutandeo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 417). She stated the evidence showed that the applicant is genuine in his desire to reduce his involvement in his business interests in Indonesia and to join his family permanently in Australia.
20. In respect of the applications by the applicant’s wife and children, Ms Lui submitted that each would suffer extreme hardship if forced to return to Indonesia. She referred to the political and religious instability in South Borneo, and the fear for their safety and well‑being each would experience. She noted that the applicant’s wife has built a social network in Australia and has contributed to the daily operation of the business. She also emphasised that Christian and Kalvin have spent part of their formative years in Australia and have not completed their tertiary studies. Ms Lui submitted that the Tribunal should also take into account that Christian has not lived in Indonesia since the age of 7, and that he has a long‑term relationship with an Australian citizen.
21. Mr Wee submitted that an examination of the franchise documents shows that the business does not require an extensive management structure. He referred to the Department’s Procedures Advice Manual 3 (PAM 3) which states, at paras 9.7.14 and 9.7.15, in relation to franchises and an applicant’s direct management role:
9.7.14 However, the key factor to consider is associated with the degree of control over the business. Most franchise agreements require the franchisee to hold certain products, certain levels of stock, sell at set prices, open at certain hours, decorate the shop in a certain manner, contribute to advertising funds, in circumstances where they have little or no input etc. Officers should not confuse these conditions of franchise with management discretion in areas such as
·the hiring and firing of staff
·the number of staff employed
·how staff are selected
·giving performance feedback to staff
·organising staff rosters
·providing training or selecting staff to attend training provided by the franchisor in accordance with the agreement.
9.7.15The financial aspects of control are very important. As an owner, the applicant should have a satisfactory degree of control over their financial affairs….Officers must focus on the applicant’s degree of control and responsibility for the business as an owner.
Mr Wee submitted that the major strategic decisions were made by the franchisor, and the day‑to‑day functions were performed by Ms Halim and Christian. He said that the applicant was not present in Australia to oversee the operations of the business and played a small role in its management, as evidenced by the little time spent discussing the affairs of the business during telephone calls from Indonesia. He noted that the applicant had not done the training course.
22. Mr Wee submitted further that, from the first arrival in Australia to the date of cancellation, the applicant spent less than two months in Australia; although Mr Wee acknowledged that the applicant has returned to Australia in October and December 2004. He referred to Re Tang andMinister for Immigration and Multicultural Affairs [2000] AATA 997 in which the Tribunal stated at para 21:
…Clearly the remote association which he has with Triproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business.
He noted that in Re Huang and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656 the Tribunal stated, at para 12:
…
Not only must the eligible business cooperate 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.
23. Mr Wee said that in Re Widjojo andMinister for Immigration and Multicultural Affairs [2001] AATA 774 the Tribunal held that a businessman who was a non‑working partner in Indonesia and who left the running of the business to his wife in Australia did not participate at a senior level in the day‑to‑day management of the business. He said that the Tribunal also held that a bare assertion that a person is divesting himself or herself of interests overseas to concentrate on the Australian business is insufficient to satisfy the relevant criteria regarding management of the business. Mr Wee submitted that there was no objective evidence that the applicant had a genuine intention to divest himself of his Indonesian business and reside in Australia or spend longer periods here.
24. Mr Wee submitted that, applying the test in Re Wang andMinister for Immigration and Multicultural Affairs [2000] AATA 961 that the person must show not only undue hardship but extreme hardship, the applicant’s wife and children had not established that they would suffer extreme hardship if their visas were cancelled. In particular, he said that there was no objective evidence to support the assertion that the political situation in South Borneo posed any real or ongoing threat to their wellbeing. He added that the children would be able to continue their tertiary education in Indonesia, and that family support networks were strong in Indonesia.
25. In reaching its decision the Tribunal takes into account the documentary and oral evidence and the submissions made at the hearing.
26. The Tribunal accepts that s 134 of the Act contemplates, among other matters that consideration is given to a person’s intention. Therefore, while events that occurred up to the time of cancellation of the visa are the primary focus of the Tribunal, events that occurred after the date of cancellation may be relevant to address the issues raised in s 134.
27. The Tribunal agrees with Mr Wee that the business does not require an extensive management structure. The Tribunal notes that the applicant provided $300,000 to purchase the business and that he owns 6 of the 10 shares of Han Prima. An examination of the franchise agreement demonstrates that decisions on matters such as such as advertising and promotion, level of stock, type of product to be sold, equipment and fixtures, uniforms and methods of operation of the business are made by the franchisor, and the franchisee has little or no input into these decisions. Similarly, the agreement requires the franchisee to comply with the terms of the lease, so that decisions such as the trading hours of the business are made by the shopping centre management.
28. The Tribunal finds that the factors listed in PAM 3 provide a useful guide in relation to the nature of businesses operating under a franchise agreement. After observing the applicant and his family in the witness box the Tribunal is satisfied that, in the particular circumstances of this family, the applicant is clearly the decision‑maker. Ms Halim has always seen herself as a housewife whose role is to support her husband’s decisions, and Christian is a student who refers important issues (such as the fire on the premises) to the applicant and is assisting in the business temporarily until he resumes his studies. Kalvin provides assistance only on a casual basis and makes no major decisions.
29. The Tribunal agrees with Ms Lui that there is no requirement in the legislation that the applicant reside in Australia, particularly in view of access to global communications technology, and the circumstances of the business as a franchise. Applying the guidelines in para 9.7.14 of PAM 3, the Tribunal finds that the applicant delegates the day‑to‑day operation of the business (such as staff rosters, ordering of stock and payment of rent and other expenses) to his wife and Christian in the terms set out in the franchise agreement, in accordance with the procedures that were learnt in the training course conducted by the franchisor. In any event, even if the applicant was to move to Australia in the near future, the Tribunal would not necessarily expect him, as a businessman and effective owner of the business, to adopt a day‑to‑day role in serving ice cream to customers.
30. Applying the guidelines in para 9.7.15 of PAM 3, the Tribunal concludes that all major financial decisions within the family are made by the applicant, and neither Ms Halim nor the children were aware of the financial aspects of the business. The applicant provided the investment funds and has the final decision regarding the employment of staff (in this case two family members). The Tribunal finds that the applicant has complete control and responsibility for the business as an owner.
31. For these reasons the Tribunal is satisfied that, in the context of this particular franchise business, all major decisions are made by the applicant either on his visits to Australia or during telephone calls from Indonesia to Ms Halim and the children. Therefore, the Tribunal finds that the applicant is utilising his or her skills in actively participating at a senior level in the day‑to‑day management of that business (s 134(1)(b) of the Act) and intends to continue to do so (s 134(1)(c)(ii) of the Act).
32. In relation to s 134(2)(b) of the Act concerning whether the applicant has made a genuine effort, the Tribunal has considered the matters listed in s 134(3) of the Act and the guidelines contained in MSI N°. 133. The Tribunal finds that the applicant has transferred a considerable sum to Australia to purchase the business, he has been engaged in business activity, he has contributed to an increase in the turnover of the business since its commencement, and has spent time in Australia to negotiate the purchase of the business with the previous owner and the franchisor. For these reasons the Tribunal is satisfied that the applicant 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 (s 134(2)(b) of the Act) and intends to continue to do so (s 134(2)(c) of the Act). There is no dispute that the applicant satisfies s 134(2)(a) of the Act.
33. Therefore, the Tribunal finds that the applicant satisfies s 134(2) of the Act and his business visa must not be cancelled. Consequently, under s 134(4) of the Act, the visas held by Ms Halim, Christian and Kalvin must not be cancelled.
DECISION
34.Nº V2004/535: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/721: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/722: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
Nº V2004/723: The Tribunal sets aside the decision under review and substitutes a decision that the visa held by the applicant must not be cancelled.
I certify that the thirty‑four [34] preceding paragraphs are a true copy of the reasons for the decision of: G.D. Friedman, Member
(sgd) Olympia Sarrinikoloau
Clerk
Date of hearing: 9 December 2004
Date of decision: 17 December 2004
Advocate for applicant: Ms L. Lui
Solicitor for applicant: Lian Lui
Advocate for respondent: Mr B. Wee
Solicitor for respondent: Australian Government Solicitor
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