Nagasaputra and Minister for Immigration and Multicultural and in Digenous Affairs
[2004] AATA 39
•20 January 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 39
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2002/322
GENERAL ADMINISTRATIVE DIVISION ) Re MOELIADI NAGASAPUTRA Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr M Allen, Member Date20 January 2004
PlacePerth
Decision The decision made on 5 August 2002 to cancel the business skills visa held by the applicant is affirmed ….........(sgd M Allen)...........
Member
CATCHWORDS
IMMIGRATION AND CITIZENSHIP – cancellation of primary business skill visa – applicant has substantial ownership interest, but business is not eligible business – applicant not participating at senior level in day-to-day management – applicant has not made genuine efforts to carry out obligations – decision to cancel visas affirmed
Migration Act 1958 – ss134, 135
Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
REASONS FOR DECISION
20 January 2004 Mr M Allen, Member 1. On 5 August 2000 a delegate of the respondent made decisions to cancel the business skills visas held by Mr Moeliadi Nagasputra (“the applicant”) and the secondary visa’s held by his wife and three children. The present proceedings involve only an application by Mr Nagasputra for review of the decision made on that day concerning his visa. Applications have not been made by the other visa holders for a review of the decisions effecting them. At the hearing of the matter the applicant was represented by his solicitor Mr Chong and the respondent Minister was represented by Mr Blades, an officer of the Australian Government Solicitor.
2. The Tribunal had before it the documents filed pursuant to s 37 of the Administrative Tribunal Administration Act 1975 and exhibits A1-A5 tendered by the applicant. The applicant gave oral evidence assisted by an interpreter in the Indonesian language, although at times he also gave evidence in the English language.
3. The background to the matter is that the applicant and the members of this family were granted business skills visas on 2 March 1999 and first entered Australia on 14 May 1999. In July 2001 the applicant completed a 24-month survey form (T13). By letters dated 19 April 2002 a delegate of the respondent gave notice to the applicant and the other visa holders of an intention to cancel the visas and invited the applicant to make representations concerning the possible cancellation by 28 May 2002. The applicant did not respond to that invitation and on 5 August 2002 a delegate cancelled the visa under s 134(1) of the Migration Act 1958 (“The Act”).
The Cancellation Decisions
4. The power to cancel the applicant’s visa arises only if the decision maker is satisfied that the applicant had not satisfied one or more of the three factors set out in s134(1) of the Act, namely that the visa 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”.
5. I must, therefore, consider whether any one of those grounds is satisfied in the applicant’s case.
6. Section 134(10) of the Act defines an “ownership interest” in relation to a business to mean an interest in a 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 held though one or more interposed companies, partnerships or trusts.”
7. On 15 May 2001 a business name “Newington Star Trading Co” (Newington) was registered in New South Wales, the registered proprietors being the applicant and his wife. The applicant contends that he is involved in a business conducted under that name. There were some contention at the hearing as to whether or not the applicant was the sole proprietor of the business or whether it was a partnership between the applicant and his wife. The applicant said in his evidence that he thought the business belongs to him in that he ran it and managed it most of the time but under Indonesian law the assets of a husband and wife are regarded as being owned equally. I note that in an email sent by the applicant to one of the suppliers of the business in September 2001 his wife was described as being “registered as one of the partners in the business”.. In the circumstances, I do not believe it is particularly significant as to whether the business (if indeed there is one) is carried on by the applicant as a sole proprietor or carried on by a partnership between the applicant and his wife. Either alternative would involve an ownership interest as defined by s134(10). I am satisfied that the applicant has an ownership interest in any business that may be conducted under the Newington business name.
8. The respondent, in its statement of facts and contentions filed in the proceedings, stated that the applicant may well have a substantial ownership interest in a business but contended that the business was not an eligible business.
9. Section 134(10) of the Act also defines an “eligible business” as 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”.
10. Paragraph 4.3.2 of the Migration Series Instructions 133 (“MSI-133”): Cancellation of Business Visa notes that eligibility of a business relates to the achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.
11. In cases of cancellation of a visa, the Tribunal must consider whether the decision to cancel is the correct or preferable decision at the time of the cancellation decision: see Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54. It is, however, open to the Tribunal to examine events that occurred after the date of cancellation to see whether they throw any light upon circumstances as at the time of the cancellation decision.
12. The applicant gave evidence that he had established a business in Indonesia in 1980 via a company PT Seni Mulia (PTSM). The business of the company was importing bathroom products from the United States and Europe and it had eventually become the leading business of its kind in Indonesia.
13. Initially the applicant had been fully committed to the management and operation of this business and his shareholding had, up until about 1999, been 70%. After he obtained his Australia visa he has started to scale back his involvement in PTSM and said in evidence that by August 2000 he had ceased being involved in the senior management of PTSM and he stopped being a director at the same time. He had sold most of his shares but continued to have an involvement for some time, receiving periodic financial reports and had access to PTSM’s offices including the use of its email facilities.
14. The applicant’s evidence was that between May 1999 and May 2001 (when Newington had been registered as a business) he had spent time researching bathroom products with a view to exporting from Australia to Indonesia. He said that as an importer of these products into Indonesia he would not try to sell directly to consumers but, rather, would try to influence architects designing large projects so that the products that he wished to import could be specified for new developments. The applicant explained that this often takes time and could be as much as one and a half years for the products to be specified. He said that he had spent much of this time making presentations to architects for this purpose. However, in subsequent evidence the applicant agreed that he would not have started making presentations to architects until about May 2001, because that was the time he first made contact with an Australian bathroom products company known as Decina and several other possible suppliers (T documents folios 129-133). Although using Newington stationery showing its Australian address, much of the inquiries made on behalf of Newington had been made whilst the applicant was in Indonesia
15. The applicant said that between about June 2001 and October 2001 he negotiated with Decina for the supply of certain bathroom products and in November 2001 he placed an order with Decina for products to the value of $24, 962 that were to be shipped to an Indonesian business known as CV Pronatama. This was a new business that the applicant had been involved in establishing to take over some of the former businesses carried on by PTSM, which was apparently scaling back its activities. The applicant said he made about a 10% profit on that transaction. He said that CV Pronatama would have onsold the products to end users and that he did not receive any benefit from that.
16. Having completed the above transaction, it was not until May 2002 that the applicant again approached Decina about the possibility of placing a second order. Part of the documents that made up Exhibit A2 is an email from the applicant to Decina of 11 May 2002 asking if the prices for Decina’s products were the same as previously and thereafter a sequence of e-mails between the applicant and a Decina officer. In the middle of June 2002 the applicant sought prices from Decina for some specific products for a hotel project and on 5 September 2002 Decina issued what is described as a “pro forma invoice” for goods to the value of $26, 253 to be delivered to Jakarta. A subsequent invoice dated 10 October 2002 for the same products shows that the products were to be sold to an Indonesian business CV Duta Utama. That transaction was eventually finalised and it appears from exhibit A4 that it was not until August 2003 that the applicant again contacted Decina about the possibility of supplying further products.
17. The above transactions were the only ones in which Newington was involved. The documentary material before me suggest that from May 2001 the applicant made a number of approaches to other possible suppliers of product but none of them were followed up by the applicant or progressed in any way.
18. Bearing in mind that the cancellation decisions were made on 5 August 2002, it can be seen from the above evidence that at that time Newington had completed one export transaction and the applicant had reopened discussions with Decina but had not sought specific prices for specific products. Throughout this time, I am satisfied that the applicant continued to be involved to some extent in the business of PTSM. It is apparent from his continuing use of PTSM’s email facilities and their office and his role in the establishment of two companies (at least) that took over some of PTSM’s activities, that he was more involved in the activities of PTSM than he was prepared to concede at the hearing. In an email sent on 8 August 2002 to the delegate in response to the notice of intention to cancel the visas (even though by that time the cancellation decision had already been made) the applicant said that he had “spent more time in Indonesia for this trip, because at the moment we are finalising some business which related to my former company PT Seni Mulia which [is] now almost non-active. Besides we have settled down the outstanding balance to [a government bank] this month. We are training a new company to market sanitary ware, included above products”. In the same email the applicant said that he had “so many family business” and that he had “made business trips and attended many trade fairs including, Paris, Milan, Bangkok, Kuala Lumpar, Shang Hai, Singapore and so on”.. That is in my opinion, entirely consistent with his position as a senior participant in the bathroom products business that he had been conducting for many years via PTSM.
19. In the circumstances, I am not satisfied that Newington was in fact conducting a business at all in Australia. Rather, I consider that the applicant was primarily concerned with finding Australian products to import into Indonesia as part of his long-standing business in that country to supply those sorts of products. In that sense his activities were more related to the carrying on of a business in Indonesia than on in Australia. For those reasons I consider that Newington did not in fact operate as a business in Australia, particularly bearing in mind the small number of transactions in which it was involved, and I do not consider that it was an eligible business having regard to the factors set out in s 134(10) of the Act.
20. It follows therefore that the applicant had not, in my opinion, obtained a substantial ownership interest in an eligible business in Australia and the ground for cancellation of his visa under s134(1)(a) arose.
21. As noted above, it is only necessary for one of the three factors set out in section 134(1) to be present for the power to cancel visas to arise. Nevertheless, because I have concluded that the applicant’s business in Australia was not an eligible business, it follows necessarily that he had not been utilising his skills in actively participating at a senior level in the day to day management of “that business” as required by s 134(1)(b).
22. Accordingly, I conclude that the power to cancel the applicant’s visa did arise. I must then consider whether the provisions of s134(2) are applicable. That sub-section provides that the Minister must not cancel a visa if the decision maker is satisfied that the holder of the visa has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, and to utilise skills in actively participating at a senior level in the day-to-day management of that business, and intends to continue to do so.
23. Sub-section 134(3) of the Act sets out nine matters that the decision-maker may take into account when determining whether a person has made genuine efforts. Other factors may be taken into account if considered relevant. Further guidance regarding the assessment of genuineness of effort is found in paragraph 4.5.1 of MSI-133. These guidelines are not binding upon the Tribunal but they may be taken into account and, in the interests of consistency of decision making, it is desirable to do so: see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695. The factors set out in MSI-133 and their applicability in the present case are considered below.
(a) Business proposals
24. MS1-133 refers to business proposals generated by the visa holder that are considered genuine, realistic and achievable. In the present case the applicant did not produce any documentary evidence of business proposals or plans, no doubt because of his many years of experience in the bathroom products industry and because, in my opinion, his Australian activities were merely an “add on “ aspect of the Indonesian business that he was involved in.
(b) Contracts with Partners or Joint Ventures
25. In the present case the applicant had not entered into any arrangement with partners (other than his wife) or joint ventures concerning any business activity in Australia.
(c) Written evidence of consultations with at least 3 business advisers
26. No evidence was produced to demonstrate that the applicant had engaged professional business advisers. No financial statements or documents regarding taxation returns were produced to indicate that he had engaged such advisers.
(d) Physical presence in Australia
27. The MSI refers to the need for a visa holder to be present in Australia for more than 6 months after his first arrival under a business visa. In the present case it appears from the T documents at folios 150 and 151 that the applicant had spent approximately 244 days in Australia between the date of first arrival and the date of cancellation of the visa.
(e) Transfer of funds to Australia
28. The MSI refers to whether there has been transfer to and retention in, Australia of at least 50% of the funds indicated as available for transfer within the two years of first arrival. The documents relating to the applicant’s original application for a business visa, which would contain details of the amounts indicated as available for investment in an Australian business, were not produced to the Tribunal. However, being a registered business name, Newington had no formal paid up capital and there are no financial statements available that indicate that any material amount of funds was held in Newington’s name as working capital. In the 24-month survey form completed by the applicant (T documents folio 120) the applicant said that he had invested $465,000 in the business since he became the owner of it. In his evidence the applicant said that this was a reference to an amount of money that he had “reserved” in a bank account in Singapore that was available to support letters of credit that he might need to facilitate export/import transactions that he might be involved in. The applicant said that he had not utilised these funds in the two transactions that Newington had been involved in because the amounts of money involved were too small and he had paid for the goods from his personal bank account. The evidence concerning the amount of money apparently held in Singapore was not corroborated by any documentary material. In the absence of such corroboration, and even if one can assume that such funds are deposited in Singapore, in my opinion it is likely such a deposit would be to support the import activities of the applicant from countries other that Australia into Indonesia.
(f) The value of ownership interest in business in Australia
29. The MSI refers to a minimum of $100,000 or 10% ownership. In the present case the scale of Newington’s’ activities is such that it is most unlikely that there would be anything other than a nominal amount held in any bank account in Australia relating to Newington’s activities. In my opinion the value of the applicant’s ownership interests in Newington is nominal.
(g) Business activity undertaken
30. The MSI refers to a minimum $100, 000 business activity as indicated by turnover. The business turnover of Newington in the period up to cancellation was only approximately $25, 000 and even if the second export transaction is included (on the basis that some steps had been taken to arrange that transaction prior to cancellation) the total amount of turnover is still only just over $ 50, 000.
(h) Compliance with notices
31. The MSI refers to whether or not a visa holder has complied with obligations to keep the department informed of current Australia addresses and to return survey forms that monitor business activities in Australia. In the present case the applicant did complete the 24-month survey form (albeit somewhat later than requested) but did not respond to a subsequent letter in which the department sought further documentary evidence of the applicant’s efforts to engage in an eligible business in Australia.
32. As paragraph 4.5.2 of MSI-133 notes, failure to meet one of more of the factors referred to above will normally lead to a visa being cancelled but it will not necessarily mean that there will be such a result. The MSI notes that weight must be given to all relevant factors including any not referred to in s134(3).
33. On all the information available to me I do not consider that the applicant had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia or to utilise his skills in activity participating at a senior level in the day to day management of a business in Australia. The reality is, in my opinion, that a business was never established in Australia because the activities of Newington lacked the necessary degree of continuity and repetition and the indicia of conducting a business. Although the applicant spent considerable time in Australia prior to the cancellation decision I am satisfied that the majority of his time was spent in Indonesia and that while he was there he was principally involved in the operations of PTSM and the other companies that he established to take over some of the activities of that business. It is significant, in my opinion, that the applicant took no steps to register Newington as a business name or to make any contact with possible suppliers of products until May 2001, which was soon after he would have received the 24-month survey form for completion. Thereafter, his efforts to organise transactions via Newington were sporadic at best, in my opinion, and my conclusion is that his activities in Australia were primarily related to his import business in Indonesia.
34. In all the circumstances I consider that the applicant has not made genuine efforts as required and, accordingly it is open to the decision-maker to cancel his visa. No evidence has been adduced to indicate that there are any other factors relevant that would suggest that the residual discretion that is available should be exercised in the applicant’s favour. I am aware that cancellation of the applicant’s visa will result in the cancellation of the visas held by his wife and three children. However, as I have already noted, no application has been made on behalf of those persons and no evidence was given by the applicant about their personal circumstance or the impact of cancellation that might be relevant to the residual discretion concerning whether or not the applicant’s visa should or should not be cancelled. In the circumstances I consider that the residual discretion to not cancel the applicant’s visa should not be exercised in his favour.
35. My decision is that the decision made on 5 August 2002 to cancel the business skills visa held by the applicant should be affirmed.
I certify that the 35 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 25 August 2003
Date of Decision 20 January 2004
Counsel for the Applicant Mr J Chong
Counsel for the Respondent Mr D Blades
Solicitor for the Respondent Ms L McPherson
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