Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 776
•22 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 776
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2002/429
GENERAL ADMINISTRATIVE DIVISION ) Re RUDY HARSONO Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr Murray Allen, Member Date22 July 2004
PlacePerth
Decision The decision made on 6 August 2002 by a delegate of the respondent to cancel the subclass 127 Business Skills visa held by the applicant is affirmed.
............(sgd M Allen)..........................
Member
CATCHWORDS
IMMIGRATION – cancellation of business skills visa – applicant has a substantial ownership interest in an Australian company and an Australian business name, but no “business” is carried on and therefore there is not an “eligible business” – applicant has not made a genuine effort to obtain a substantial ownership interest in an eligible business or to be involved in the day to day senior management of such a business – discretion not to cancel applicant’s visa not exercised in applicant’s favour – cancellation decision affirmed
Migration Act 1958 s 134, 135
Migration Series Instruction 133
Re Bhyat and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1051
Re Eng and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 76
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
REASONS FOR DECISION
22 July 2004 Mr Murray Allen, Member 1. On 6 August 2002 a delegate of the respondent decided to cancel the subclass 127 business skills visa held by the applicant and his wife and daughter. The applicant now applies for review of that decision insofar as it concerned his visa, but no applications for review have been made by his wife or daughter.
2.
At the hearing of the matter the applicant was represented by his solicitor, Mr Malcolm, and the respondent was represented by Mr Gerrard, a solicitor with the
Australian Government Solicitor. The Tribunal received into evidence the documents filed pursuant to s 37 of the Administrative Appeal Tribunal Act, 1975 (T1 – T30 and S1 – S8) and Exhibit R1 tendered by the respondent. The Tribunal also received into evidence a folder of documents tendered by the applicant containing documents A1 – A21, B1 – B11, C1 – C13, bundles of documents labelled D and E, and F1 – F29.
3. Oral evidence was given by the applicant and on his behalf by his daughter, Ms Ervina Harsono, and Ms Caroline Lim. The evidence of the applicant and of Ms Lim was given with the benefit of an interpreter in the Indonesian language.
Background
4. The background to the matter is that the applicant and his family members were granted visas on 9 April 1999 and the applicant first entered Australia under his visa on 11 April 1999.
5. In March 2001 the applicant was sent a 24-month survey form but did not respond to it. A further survey form was sent in May 2001 and the applicant responded in August 2001. In December 2001 the respondent’s department sought further information from the applicant, which was provided in January 2002.
6. In April 2002 a notice of intention to cancel the applicant’s visa dated 3 April 2002 was despatched. That notice invited the applicant to make representations concerning the proposed cancellation by 10 May 2002. The applicant made representations and provided additional information during May 2002, but on 6 August 2002 a delegate made the decisions to cancel the visas referred to in [1] above.
Preliminary Issue
7. At the hearing of the matter, and in written submissions subsequently, the applicant raised a preliminary issue, namely, whether the respondent had complied with the various statutory requirements regarding the giving of notice contained within ss 134 and 135 of the Migration Act 1958 (“the Act”). I will deal with that preliminary point before considering the merits of the cancellation decision,
8. Section 135(1) of the Act relevantly provides that before a visa can be cancelled under s 134(1), as occurred in the case of the applicant, the respondent must give its holder a written notice stating the intention to cancel and inviting representations on that issue. Section 134(9) of the Act relevantly provides that the respondent must not cancel a visa under s 134(1) unless the notice under s 135 “was given to [the visa holder] within the period of three years commencing … on the day on which its holder first enters Australia after that first visa was granted.”
9. As noted above, the applicant first entered Australia after gaining his visa on 11 April 1999. The three year period commencing on that day ended at the end of 10 April 2002.
10. It was contended for the applicant that, by virtue of regulation 2.55(7) of the Migration Regulations 1994 (“the Regulations”) the notice of intention to cancel is “taken to be given 7 working days after it has been sent by mail, which is the manner in which it was sent in this instance” (para 5 of applicant’s submissions). It was contended for the applicant that the seventh working day after 3 April was Monday 14 April 2002, which was a date later than the end of the three year period.
11. In January 2002 the respondent’s department received from the applicant a notification of change of address, nominating an address in Sydney as being his contact address with effect from 1 January 2002 (T16). Document T21 is a record made of a telephone conversation between a departmental officer and the applicant’s daughter on 2 April 2002 concerning how the department could contact the applicant. The daughter was requested to have her father send the department an authorisation for contact to be made with him by facsimile. T21 also records that the applicant telephoned the departmental officer at 4.30pm on that day and advised that contact could be made by facsimile to his daughter in Sydney.
12. Document T22 is a letter from the applicant to a departmental officer dated 2 April 2002 that was faxed to the department by the applicant on that day and which authorises the applicant’s daughter to represent the applicant in relation to immigration matters and gives the department permission to send by fax the necessary documents to his property in Sydney.
13. The notice of intention to cancel (T23) was dated 3 April 2002 and was apparently posted to the applicant’s address in Sydney on or about that day. However, the document was also (according to a notation made by a departmental officer on the file copy of the notice at page 205 of the T documents) faxed to the applicant at the previously notified fax number in Sydney on 4 April 2002.
14. Section 494B of the Act and reg 2.55 of the Regulations both deal with the methods by which the respondent may “give” documents concerning the cancellation of a visa to a visa holder. Both provisions permit the giving of a document by facsimile. In the case of s 494B the fax must be transmitted to the “last fax number … provided to the Minister by the recipient for the purposes of receiving documents” whereas reg 2.55 requires that the fax be transmitted to “the last fax number … known to the Minister”.
15. For the reasons that I gave in Re Bhyat and Minister for Immigration and Multicultural and Indigenous Affairs [203] AATA 1051 at [23] to [30] and Re Eng and Minister for Immigration and Multicultural and Indigenous Affairs [204] AATA 76 at [21] to [32] I consider that the relationship between s 494B and reg 2.55 is by no means clear. Nevertheless, in the present case it is apparent that the notice of intention to cancel the applicant’s visa was transmitted by fax to a fax number that have been provided by the applicant to the respondent’s department and which had been notified for the purpose of receiving documents relating to immigration matters. It was not in dispute that the applicant received the notice that was transmitted by fax and, in the circumstances, I am satisfied that notice was given to the applicant in a manner that satisfied the requirements of both s 494B and reg 2.55. By virtue of s 494C(5) and reg 2.5(8), the document is taken to have been received at the end of the day on which it was transmitted. That means in the present case that the applicant was taken to have received the notice of intention to cancel at the end of 4 April 2002 and that date was prior to the expiration of the 3 year period that ended on 10 April 2002. The fact that the notice was also posted to the Sydney address does not alter that conclusion.
16. Accordingly, I am satisfied that the time requirements for the giving of the notice of intention to cancel pursuant to s 134(9) and s 135(1) were complied with, and I must therefore consider the merits of the cancellation decision that was made.
The Power to Cancel
17. A discretionary power to cancel the applicant’s visa would arise under s 134(1) if the applicant failed to satisfy, in the opinion of the respondent or the Tribunal, any one of the requirements specified in that subsection. The first of the requirements is in s 134(1) (a), which relevantly provides that the applicant must have “obtained a substantial ownership interest in an eligible business in Australia”.
18. The applicant contended that he satisfied this requirement by virtue of his involvement in three businesses, namely a business carried on by him under a registered business name, Ocean Star Property (‘Ocean Star’); a company of which he was a shareholder, Eastern Star Property Pty Ltd (‘Eastern Star’); and another company of which he was a shareholder, “Eternal Unity Pty Ltd (‘Eternal Unity’).
19. The applicant gave evidence that he has been involved in family businesses in Indonesia for many years, involving the manufacture of particle board, the manufacture and sale of furniture and the trading of wood products. In 1998, prior to obtaining the visa, the applicant had been involved in the export of furniture to the value of US$7,688 to Australia (T documents page 245).
20. Shortly after his arrival in Australia in April 1999 the applicant registered Ocean Star and gave evidence that he intended to conduct a property development business through that vehicle. There is no evidence before me that any business was conducted in the name of Ocean Star.
21. In June 1999 the applicant purchased in his own name vacant land in Rivervale for a price of $163,900 with the intention of subdividing the land and building two houses thereon. He authorised an estate agent to sell the two houses after the property had been developed (A19) and his daughter obtained a quotation from a builder for the construction of the two houses (A20).
22. The applicant initially gave evidence that the plans for the development of the Rivervale property had been deferred for financial reasons but, in response to my question to him, he subsequently said that the property had been sold in 2001 as vacant land. Included in Section A of the applicant’s bundle of documents is an undated deed relating to the Rivervale property in which the applicant is described as a trustee, a Mr Sumarto is said to have a one half interest in the property, and that the applicant and Mr Sumarto would contribute equally to the cost of purchasing the property and its development. The applicant said that he had originally purchased the property himself but had subsequently obtained half the cost from Mr Sumarto.
23. The applicant gave evidence that he had not pursued business in the name of Ocean Star and had not renewed its registration as a business name when that fell due in April 2002.
24. Eastern Star was incorporated in January 2002, the applicant, his wife and daughter becoming the shareholders and directors thereof. The only evidence of Eastern Star entering into any business transaction was that it purchased a quantity of medium density fibre board from an Australian supplier in April 2002 at a purchase price of US$7,170 and exported the product to an Indonesian purchaser, PT Bintang Karya Partikel (‘PT Bintang Karya’). Exhibit B8 is an invoice from Eastern Star for the sale of the wood at a total price of US$5,703. The applicant was asked specifically who owned PT Bintang Karya and said that he did not know, but that he had sold them wood on a few occasions since 1999. He was asked why he had sold the wood at a loss and said that he had purchased the wood in Australia without knowing how much he would be able to sell it for in Indonesia, and had to accept a loss because that was the Indonesian market price.
25. I subsequently asked the applicant to confirm that he had no connection with PT Bintang Karya apart from having sold it timber products in the past, and he confirmed that that was so. The applicant was then referred to T24, which was a letter with attachments sent by him to the respondent’s department in May 2001 – one of the attachments being his business card from Jakarta. That business card appears at page 214 of the T documents and names, as one of the companies of the applicant, PT Bintang Karya. The applicant then said that he had had a 10% shareholding in PT Bintang Karya between 1995 and 1998, that he knew one of the other shareholders but not all of them, and that he had taken no part in the management of that company. I do not accept the applicant’s evidence on this point, and find that the applicant was involved to some extent in the ownership and management of PT Bintang Karya in 2001 and 2002.
26. Eastern Star was not involved in any other business transaction although the applicant said that, with his daughter’s assistance, they had investigated other possible business opportunities including furniture trading and the operation of a deli franchise, but nothing eventuated from those inquiries.
27. The third business that the applicant was involved in was Eternal Unity, which is a company incorporated by Ms Lim in September 2002. The applicant became a shareholder and director of Eternal Unity on 28 October 2002. It is apparent that any ownership interest that the applicant obtained in Eternal Unity was obtained after the cancellation of his visa and hence his involvement with that company cannot assist him in satisfying the requirements of s 134(1). I will, however, refer to the applicant’s involvement in Eternal Unity below in relation to the question of whether or not the applicant has made genuine efforts to obtain the requisite ownership interest in an Australian business.
28. The respondent accepts that the applicant had a substantial ownership interest in Ocean Star and Eastern Star and, consequently, any business that may have been conducted through those entities. However, the respondent contends that neither Ocean Star nor Eastern Star conducted any business, much less an eligible business.
29. I agree with that contention. On the evidence before me Ocean Star never conducted any business transactions. There is nothing to indicate that the purchase and proposed development of the Rivervale property was to be done via Ocean Star, rather than the applicant personally (with Mr Sumarto). In any event, I do not consider that the purchase of a single piece of land with an intention to develop two houses in isolation, which in the event did not eventuate, constitutes the conduct of a business. Similarly, Eastern Star’s only business transaction was an isolated one in circumstances where the goods were resold at a loss to a company associated with the applicant in Indonesia. I consider that this isolated transaction was more concerned with supplying product to the applicant’s associated Indonesian business rather than the establishment of a new business in Australia.
30. Accordingly, I find that no business was conducted in Australia via Ocean Star or Eastern Star and there was not an eligible business carried on by either of those entities. I find that the applicant did fail to satisfy the requirements of s 134(1)(a) of the Act because no eligible businesses were involved. It follows that the applicant must have also failed to satisfy the requirements of s 134(1)(b) because there was no eligible business for the applicant to be involved in the management of.
31. Accordingly, the power to cancel the applicant’s visa did arise under s 134(1) and I must therefore consider whether the requirements of s 134(2) have been satisfied, in which event the applicant’s visa must not be cancelled.
Could the Power to Cancel be Exercised?
32. Section 134(2) relevantly provides that a business visa must not be cancelled if the respondent (or the Tribunal) is satisfied that the holder of the visa has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and to utilise his or her skills in actively participating at a senior level in the day to day management of that business; and intends to continue to make such genuine efforts.
33. Section 134(3) relevantly provides that for the purpose of deciding whether a person has made genuine efforts, any or all of the following matters may be taken into account:
“(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 the 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:
(j)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).”
34. The respondent’s department has issued policy instructions concerning business visas known as Migration Series Instruction 133 (MSI 133). Paragraph 4.5.1 of MSI 133 contains notes to guide decision makers in the interpretation of the factors set out in s 134(3). Although such indications of policy are not binding on the Tribunal, there is good reason why they should be applied in the interest of consistency of decision making: see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695 and 696 per Davies J. No weight should be given to the notes set out in paragraph 4.5.1 where the note is clearly more restrictive than the terms of the Act itself: see Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [48] to [51] per Senior Member Dwyer and Member McLean. An “effort” will be “genuine” in the context of s 134 if there is a level of effort beyond that which is purely superficial or token and an effort will not be considered not genuine merely because it falls short of the examples given in s 134(3): see Yam (supra) at [53]. I refer below to the various factors identified by s 134(3).
35. Paragraph 4.5.1 of MSI 133 refers to proposals that are considered “genuine, realistic and achievable”. In relation to the Rivervale property, it was purchased in June 1999 but it is not clear when Mr Sumarto became involved. In June 1999 the applicant authorised an estate agent to sell the two houses that were to be built but it appears that the quotation obtained by Ms Harsono (A20), which is undated, appears to have been produced by the builder sometime during the year 2001. It is addressed to Ms Harsono at an address in Sydney and, in her oral evidence, Ms Harsono said that she had graduated from university in the year 2000 and then moved to Sydney. The drawings of the proposed houses attached to the quotation (part of A20) are shown as having been drawn on 28 February 2001 and I conclude that the quotation was obtained sometime after February 2001 and the property was subsequently sold in that year. Because the proposed project was never carried out it is difficult to assess whether what was proposed was genuine, realistic or achievable. The fact that a considerable period of time passed between the purchase of the land and the obtaining of a quotation suggests that the possible business was not pursued with great diligence or effort.
36. In relation to Eastern Star, the applicant’s evidence was that he had purchased the particle board in Australia without knowing what price he would be able to sell it for in Indonesia even though, as I have found, the board was eventually sold to a company associated with the applicant. If, which I do not consider to be the case, the applicant intended the purchase and sale of the particle board to be the beginnings of a business venture carried on by Eastern Star, then it was not done in a way that could be considered to be realistic or achievable.
37. In relation to Eternal Unity the applicant said that he had started discussing with Ms Lim as early as March 2002 to be involved in a clothing retail business with her. He had been interested in that kind of business because of his wife’s interest in clothes. He said that a decision had been made by Ms Lim and himself in June 2002 to buy a particular retail business in Subiaco. At that stage only he and Ms Lim had been involved, not the other people who subsequently became involved in Eternal Unity. He said that he had never been involved in the clothing business before and he knew nothing about purchasing clothes for sale, although his wife does know something about it. The applicant produced no evidence of any research or development of proposals regarding that type of business.
38. Ms Lim’s evidence was that she had known the applicant’s wife for some time and that in 2001 and 2002 she had discussed with the applicant and his wife the idea of them being involved with her in a business in Australia. Ms Lim said she came to Australia in March 2002 and had located the particular shop that she wished to purchase in May 2002. The vendors had not wished to sell at that time and there was no formal agreement to purchase until October 2002. Nevertheless Ms Lim said that there was some kind of verbal agreement or understanding in June that she would purchase the business. Ms Lim said that in June or July 2002 when she had reached this understanding with the proposed vendors of the shop, there was in existence an understanding between her and the applicant that he would be involved in the business when it was purchased. No documents could be produced to confirm the existence of the verbal arrangement to purchase the business or to confirm the intended involvement of the applicant in the business.
39. Ms Lim originally gave evidence that when Eternal Unity was incorporated in September 2002 both she and the applicant were shareholders and directors. However, she subsequently changed that evidence to agree that the applicant and two other investors only became shareholders and directors 5 or 6 weeks after she had incorporated the company. Nevertheless she remained of the view that there had been an understanding with the applicant by the middle of 2002 that he would be involved in the business that was to be purchased. An agreement to purchase the property had eventually been signed in October 2002 and the business changed hands on 20 October 2002 (document C8A).
40. The applicant’s evidence about his involvement in the day-to-day management of Eternal Unity’s retail business is that he discussed marketing strategies with Ms Lim periodically concerning such issues about how to sell clothes and when to give discounts. He said that he was also involved in the purchase of clothes overseas, particularly in Singapore. He agreed that he knew very little about women’s fashion clothing but said that his wife did know about this and he accompanied her, and sometimes Ms Lim if she was in Indonesia or Singapore, when clothes were purchased.
41. On the basis of the evidence of the applicant in Ms Lim I accept that there were some discussions between Ms Lim and the applicant and his wife about the possibility of the applicant being involved in a clothing business in Australia with Ms Lim in the first half of 2002. However, in my opinion it cannot be said that there was any concluded agreement about how that association might develop. In my opinion the driving force behind the purchase of a business in Australia was Ms Lim as evidenced by her incorporation of Eternal Unity without the involvement of any others. On balance I conclude that the applicant, and the other investors who joined in Eternal Unity, did not agree to do so until September or October 2002 when the purchase of the business was definite. There is no evidence that the applicant played any part in the finding of the business that Ms Lim arranged to purchase, the negotiation of the purchase terms or the handover from the previous owners. Whatever efforts he made to become involved in the business of Eternal Unity and its management occurred after the date of cancellation of his visa. In any event, given Ms Lim’s evidence (which I am inclined to accept) that she had been involved in the running of businesses for many years and the applicant’s lack of knowledge of the clothing industry, I consider that whatever efforts he made to be involved in the management of Eternal Unity were superficial or token and hence could not be described as genuine efforts for the purposes of s 134(2).
42. In any event, I am not satisfied that the retail activities of Eternal Unity constituted an eligible business for the purposes of s 134. It does not involve the export of Australian clothing products – rather, it imports clothes. Ms Lim said she was the only employee, although the applicant said he thought there was another, junior, employee. Any employment generated would, in my opinion, be entirely nominal – as would be any impact on the level of commercial activity or competitiveness of the clothing retail sector. I do not consider that the nature or scope of the business is such as to qualify it as an eligible business.
43. Document A21 was produced by the applicant as evidence of a business proposal developed by him (with the assistance of his daughter) in 2000. That document refers to Ocean Star and Eastern Star and the plan to operate a business from the applicant’s home in Sydney, but does not refer to the Eternal Unity proposal. The document was presented on the basis that it had been prepared in 2000 as a plan by the applicant for how he would develop his business interests in Australia. However, in my opinion it is apparent from the terms of the document itself that it was prepared after April 2002 because it refers to events that occurred up to that time, particularly the export of particle board by Eastern Star in April 2002. The fact that A21 does not refer to any proposal concerning Eternal Unity, and the fact that the applicant failed to refer to the possibility of an investment in Eternal Unity in May 2002 when he responded to the notice of intention to cancel his visa, lends further support to my conclusion that by May 2002 there had been no significant plan to invest in Eternal Unity.
44. In relation to the various other matters referred to in the MSI regarding the genuineness of effort, I conclude that the applicant did not prepare any formal proposals regarding the establishment of a business in Australia until at least 2002; whatever arrangement the applicant had with Mr Sumarto in relation to the Rivervale property was imprecise and not pursued; the applicant provided no evidence of detailed consultation with business advisors; and the applicant was present in Australia for only 82 days prior to the cancellation of his visa. The applicant has transferred considerable sums of money to Australia but they have been primarily used to purchase residential properties or to make passive, interest earning investments and the amount invested in the various business activities has been relatively small. Taken overall, in my opinion none of these factors are of assistance to the applicant in demonstrating the genuineness of his efforts.
45. In my opinion all of the efforts by the applicant that were made prior to the cancellation of his visa in August 2002 can be regarded as superficial or token. In that sense they were not genuine efforts made by the applicant to obtain an ownership interest in an eligible business or to participate in the management thereof. I conclude that the requirements of s 134(2) of the Act have not been satisfied by the applicant and, accordingly that subsection does not prevent the cancellation of the applicant’s visa.
Should the Visa be Cancelled?
46. Although the power to cancel the applicant’s visa arrises under s 134(1) that power is discretionary and it remains open to the respondent (and the Tribunal) in the circumstances of the case to decide not to cancel the applicant’s visa: see Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at [24] per Kiefel J. No specific factors were identified on behalf of the applicant as to why the discretion should be exercised in his favour.
47. On the evidence of Ms Harsono, there is nothing about her circumstances to indicate that she would suffer any hardship if her visa was cancelled. She said that she had left Australia in 2001 and is now married and living in Singapore, where she works for her father. The applicant and his wife have at all times lived in Jakarta where the applicant is fully committed to the running of his several Indonesian businesses. He said in his evidence that if his visa was cancelled he would be disappointed but that he would go back to what he had always done in Indonesia. The cancellation of the applicant’s visa would not effect his investment in Eternal Unity, in which he can continue to be involved from Indonesia. Overall, on the material before me I can identify no factors that suggest that the discretion not to cancel the applicant’s visa should be exercised in his favour and I decline to do so. Accordingly, my decision is that the decision made on 6 August 2002 to cancel the applicant’s business visa is affirmed.
I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Mr Murray Allen, Member
Signed: ..............(sgd V Wong).................................
AssociateDate/s of Hearing 21 November 2003
Date of Decision 22 July 2004
Counsel for the Applicant Mr J Malcolm
Counsel for the Respondent Mr A Gerrard
Solicitor for the Respondent Australian Government Solicitor
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