Paini and Anor and Minister for Immigration and Citizenship
[2007] AATA 1878
•18 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1878
ADMINISTRATIVE APPEALS TRIBUNAL ) No. V 200601154
) V 200601155
GENERAL ADMINISTRATIVE DIVISION ) Re SUMIKA PAINI
STEFEN WIJAYAApplicants
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal: G.D. Friedman, Senior Member, and C. Ermert, Member Date:18 October 2007
Place:Melbourne
Decision: The Tribunal affirms the decisions under review. (sgd) G.D. Friedman
Senior Member
MIGRATION ‑ business skills visa ‑ cancellation - whether eligible business – whether genuine effort to obtain substantial ownership of eligible business or participate in senior management – exercise of residual discretion – whether extreme hardship to secondary visa holder
Migration Act 1958 s 134(1), (2), (3), (5), (10), 499
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Hope v Bathurst City Council (1980) 144 CLR 1
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Puzey v Commissioner of Taxation [2003] FCAFC 197
Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs [2006] AATA 527
Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152
Re Harijono and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 882
Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
Re Salim and Ors andMinisterfor Immigration and Multicultural and Indigenous Affairs [2002] AATA 899
Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260
Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103
Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961
Rokobatini v Minister for Immigration Multicultural Affairs (1999) 57 ALD 257
REASONS FOR DECISION
18 October 2007 G.D. Friedman, Senior Member and C. Ermert, Member
1. Sumika Paini is an Indonesian citizen who was granted a subclass 127 Business Skills visa on 15 July 2003. His wife, Mie Lian Lim and son, Stefen Wijaya were granted secondary visas at the same time.
2. The family first arrived in Australia on 25 July 2003. On 9 November 2006 the respondent’s delegate cancelled the visas on the grounds that Mr Paini had not complied with the terms of the visa as he had not obtained substantial ownership of an eligible business in Australia; had not participated in day-to-day management of the business; and had not made a genuine effort to achieve these objectives.
ISSUES
3. The issues before the Tribunal are whether Mr Paini has satisfied the conditions of his visa and whether Mr Wijaya would suffer extreme hardship if his visa was cancelled.
EVIDENCE ABOUT MR PAINI’S BUSINESS ACTIVITIES IN AUSTRALIA
4. Mr Paini told the Tribunal that he has been involved in the buying and selling of wheat flour for 30 years. He said that he is the marketing manager of a company in Medan, Indonesia, which sells and distributes flour to local manufacturers of noodles and other products. He explained that on 19 August 2003 he registered Kiaw Bin Pty Ltd in Victoria for the purpose of exporting Australian flour to Indonesia. Mr Paini stated that he has 100 per cent ownership of the company and is the sole director. He produced documents (Exhibits A4 and A7) which he said show that between 3 October 2003 and the date of cancellation Kiaw Bin purchased six shipments of flour from Manildra Flour Mills Pty Ltd (Manildra), an Australian producer, and exported them to CV Hitado, an Indonesian company. Two further shipments were made in June and July 2007. A summary of all the transactions (Exhibit R1) shows a small overall profit of $US7312.50.
5. Mr Paini said that CV Hitado is Kiaw Bin’s only customer, and that the quantity of flour obtained from the supplier has not been large enough to generate greater profits. He referred to the competitiveness of the flour market and emphasised that he has spent a lot of time in Indonesia trying to establish a regular client base for Australian flour. He referred to the difficulty of selling Australian flour because it is more expensive than Indonesian flour and is different from the local product. He produced letters from a number of his customers (Exhibit A4) to indicate that he has been promoting Australian flour.
6. Mr Paini told the Tribunal that he has been managing Kiaw Bin at a senior level from Indonesia, and has been responsible for negotiating with suppliers and customers, making decisions on purchasing and selling, ensuring compliance with Indonesian and Australian requirements and exploring new opportunities for overseas markets for Australian flour. He emphasised that his dealings with Manildra (through its agent in Indonesia) and clients in Indonesia have been by telephone or face-to-face, which are the usual methods of transacting business in Indonesia.
7. In evidence about the means of payment for the shipments, Mr Paini said that he places orders with Manildra in Indonesia and then sends the money to Kiaw Bin, which pays Manildra before the shipments leave Australia. He stated that his wife has been spending lengthy periods in Australia and has assisted with secretarial duties for the business, and Mr Wijaya has also helped with banking and other financial arrangements whenever possible. Mr Paini explained that he is required to spend most of his time in Indonesia running his local business and promoting Kiaw Bin’s activities.
8. Under cross-examination Mr Paini stated that his Indonesian company, as a local distributor, is not permitted to import directly from Australia. Rather than forming a separate company in Indonesia, Kiaw Bin was established to facilitate the shipments from Manildra. Mr Paini agreed that in his reply to the respondent’s 24-month survey he had stated that he spends 35 hours each week on Kiaw Bin business, although this has been reduced to about 20 hours per week because the company is now established as an ongoing business.
9. Mr Paini said that the business operates from the apartment in Melbourne where his children live (and his wife when she is in Australia), and that he has not prepared written business plans. He agreed that at the date of cancellation of his visa he had spent 164 days in Australia and 1039 days outside Australia. He gave evidence that he wishes to spend greater periods in Australia but pointed to the need to carry out his duties with his Indonesian company (44 hours per week), as well as promote the activities of Kiaw Bin.
10. Mr Paini assured the Tribunal that he is committed to the Australian export market because the wheat flour market in Indonesia has huge growth potential. He noted that noodles and baked goods are growing in popularity, and that Australian wheat is suitable for these products. He agreed that the company’s financial records show that in 2005/2006 the company made a profit of $A363. In 2003/2004 the company made a loss of $A194 and in 2004/2005 the loss was $A1566. Mr Paini explained that the company’s performance was affected by factors such as appreciation of the Australian dollar, fluctuating demand for Australian flour and low rainfall in Australia.
11. With regard to other business opportunities, Mr Paini stated that in 2006 he visited two wineries in Victoria and investigated the possibility of exporting Australian wine to Indonesia. However he conceded that he has no expertise in this field and would need to carry out more research into the feasibility of such a venture before proceeding further.
LEGISLATIVE FRAMEWORK
12. Section 134(1) of the Act Migration Act 1958 provides:
(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.
IS KIAW BIN AN ELIGIBLE BUSINESS?
13. Section 134(10) of the Act defines eligible business as one that the Minister reasonably believes is resulting in 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.
14. In Hope v Bathurst City Council (1980) 144 CLR 1 the High Court held that carrying on a business denotes pursuing activities for the purpose of profit, undertaken on a continuous and repetitive basis. In Puzey v Commissioner of Taxation [2003] FCAFC 197 the Full Federal Court stated that a business requires some repetition of acts and something of a permanent character.
15. The Tribunal takes into account that Kiaw Bin has been involved with six export transactions of relatively small amounts of flour for minimal profit in a three-year period until the date of cancellation. The Tribunal also takes into account Mr Paini’s evidence that he negotiates with Manildra in Indonesia and provides the funds for Kiaw Bin to purchase the wheat flour to sell it to CV Hitado. The Tribunal is satisfied that the business has not been engaged in continuous and repetitive activity for the purpose of making a profit. Consequently Kiaw Bin has not demonstrated that it has satisfied any of the criteria in s 134(10) of the Act. For these reasons the Tribunal finds that Kiaw Bin is not an eligible business for the purposes of the Act, and is satisfied that Mr Paini has not obtained a substantial ownership interest in an eligible business in Australia (s 134(1)(a) of the Act), and the grounds exist for the cancellation of the visa.
HAS MR PAINI MADE A GENUINE EFFORT TO OBTAIN SUBSTANTIAL OWNERSHIP OF AN ELIGIBLE BUSINESS AND TO USE HIS SKILLS IN SENIOR MANAGEMENT?
16. Section 134(2) and (3) of the Act provide:
(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).
17.On 15 March 2007 the respondent issued a new Procedures Advice Manual 3 (PAM3) which sets out the procedures to be followed in the making of decisions under s 134 of the Act. PAM3 replaced Migration Series Instruction 133 (MSI-133) and was issued pursuant to s 499 of the Act which authorises the Minister to give written directions to decision-makers. The Tribunal accepts that PAM3 is a relevant consideration in its decision-making process (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577) and is the correct policy to be applied at the time of the Tribunal’s decision (Rokobatini v Minister for Immigration Multicultural Affairs (1999) 57 ALD 257).
18. In paragraph 9.2 of PAM3, genuine effort refers to evidence that the visa holder has exerted himself or herself to get into business in Australia or be involved in the management of the business at a senior level on a day-to-day basis. It also refers to an expectation that the visa holder will continue to make sustained and continued efforts to meet visa requirements throughout the three-year period. PAM3 lists the following factors which aim to assist decision‑makers in determining whether a genuine effort has been made under s 134(3) of the Act:
·business proposals/plans which are genuine, realistic and achievable;
·the existence of partners or joint venturers by formal contract or written agreement;
·continuous and genuine business research such as written evidence of detailed consultations with business advisors (accountant, lawyer, bank/financial institution, business/trade association);
·physical presence in Australia for a significant time;
·transfer or investment of sufficient funds (other than for personal use) to ensure that the business meets the requirements of an eligible business;
·failure to comply with a notice for information under s 137, including notification of address and return of relevant survey forms.
19. In assessing Mr Paini’s claims against these factors and the Guidelines, the Tribunal takes into account that there is no detailed business plan setting out the broad objectives of the business. There is no evidence of business partners or joint venturers. Apart from visiting two Australian wineries in 2006 there is no evidence of genuine research into the conduct of an eligible business in Australia. Mr Paini has spent 164 days in Australia in the period of more than three years from the grant of the visa until its cancellation, which does not constitute a significant time. Apart from two small purchases of flour from other Indonesian companies, his only purchaser of the flour is CV Hitado, and he appears to have been concentrating on his commitments to his other business in Indonesia.
20. Mr Paini has deposited about $A25,000 in Kiaw Bin’s bank account but this sum has not been utilised by the business. Other than negotiations with Manildra’s Indonesian agent there has been little business activity undertaken by him. The only substantiation of Mr Paini’s involvement with Kiaw Bin is his evidence and the statements by potential customers in Indonesia about approaches by him. These statements appear to have been prepared using the same word processing facilities, and there are questions about their authenticity. All correspondence to the business appears to be directed to Mr Wijaya, and there is no evidence of contact between Mr Paini and Mr Wijaya by electronic or ordinary mail that would convince the Tribunal that Mr Paini has been involved with Kiaw Bin at a senior level. Mr Paini has satisfied the requirement to reply to requests by the Department for additional material.
21. After considering all the relevant factors in s 134(3) of the Act, the Tribunal finds that Mr Paini has not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia (s 134(2)(a) of the Act) or to utilise his skills in actively participating at a senior level in the day-to-day management of the business (s 134(2)(b) of the Act). Therefore he does not satisfy s 134(2) of the Act.
SHOULD THE RESIDUAL DISCRETION NOT TO CANCEL THE VISA BE EXERCISED?
22. In Kim v Ministerfor Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at [21] Kiefel J referred to a residual discretion which arises in situations where an applicant fails the tests in s 134(1) and s 134(2) of the Act:
The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them.
In Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152 the Tribunal stated at [44]
The exercise of the discretion requires that the applicant offer an explanation for his or her inaction that is satisfactory, as a precondition to the grant of further time or other exercise of the discretion in the applicant’s favour.
23. In Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103 and Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656, the Tribunal held that the aim of the Act is to benefit business owners who settle in Australia and actively manage their business. In Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs [2006] AATA 527 the Tribunal referred to the need to demonstrate a sufficient level of sustained commitment over a 24-month period.
24. The Tribunal takes into account Mr Paini’s evidence that he has devoted a large amount of time to promoting Kiaw Bin’s activities in Indonesia. However, he was unable to substantiate this because he said that in Indonesia, business is conducted in person and by telephone, so there is little, if any, record of his endeavours. He said that he has made every effort to conduct the business from Indonesia with the assistance of his wife and Mr Wijaya.
25. The Tribunal is satisfied that Mr Paini has spent most of his time in Indonesia in the conduct of his other business, which requires his full-time attention. The involvement of Kiaw Bin in the export of Australian flour by Manildra seems largely incidental, given the small amount of flour exported, the presence of Manildra in Indonesia and Mr Paini’s own evidence about the use of CV Hitado to facilitate the shipments.
26. For these reasons, and taking into account the small amount of time and effort spent by Mr Paini on Kiaw Bin activities, and his limited presence in Australia during the past several years, the Tribunal concludes that he has not demonstrated a sustained commitment to the business or a satisfactory explanation for the business’s lack of regular business activity that would warrant the exercise of the residual discretion in his favour.
WOULD MR WIJAYA SUFFER EXTREME HARDSHIP IF HIS VISA WAS CANCELLED?
27. Section 134(5) of the Act provides in relation to a visa held by a person who is a member of the family unit of a person whose business visa has been cancelled:
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.
28. In Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260 the Tribunal noted that the meaning of the words extreme hardship was considered by the Federal Court in Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481 at 487:
...It is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case.
29. In Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961 the Tribunal stated at [29]:
…Clearly, whatever view is taken, hardship involves more than inconvenience or detriment. Affectation must be to a considerable degree before it can properly be called hardship.
At [30] the Tribunal stated:
…There are many meanings of the word "extreme" offered in the Macquarie Dictionary. Some of the more helpful suggestions are "of a character or kind farthest removed from the ordinary or average", "utmost or exceedingly great in degree", "farthest, utmost or very far in any direction", "going to the utmost lengths, or exceeding the bounds of moderation", "the utmost or highest degree, or a very high degree". The use of the word "extreme" can be contrasted with the use of the word "undue" found in Ministerial Guidelines relating to hardship associated with deportation. In order to enliven the prohibition against a Minister cancelling another person's business visa under subsection (4), there must be shown to be not only hardship and not only undue hardship, but extreme hardship…
30. In Re Salim and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899 the Tribunal held at [46] and [47]:
46. However, it would be strange or unusual and unexpected if three relatively young, intelligent and capable persons had not in the years developed such relationships. It will be hard to leave these people. It will be hard to readjust to a life outside Australia and the university environment. But this hardship is one within the contemplation of the legislature when it chose to insert the word "extreme" as to qualify the hardship. And it must be "extreme" to the particular individual.
47. The Tribunal does not consider that the hardship that will undoubtedly be experienced by each one of the Applicants is exceptional, unexpected or of such a nature as to qualify for the description of exceedingly great in degree. Unfortunate yes, emotional yes, financial yes to a degree. But not extreme.
31. Disruption to studies, of itself, is not extreme hardship (Re Harijono and Anor and Ministerfor Immigration and Multicultural and Indigenous Affairs [2004] AATA 882).
32. Paragraph 15.2 of PAM3 refers to extreme hardship:
Under s 134(5), officers must not cancel the visa of a family unit member if it would result in extreme hardship to that person.
Under policy, ‘would result’ means that the hardship that will be a necessary and a direct consequence of the visa cancellation rather than a possibility or probability. For example, a student would need to demonstrate that as a direct consequence they could not eventually complete their studies on a Student or other visa.
‘Extreme hardship’ is not [a] defined term for business visa cancellation purposes. Under policy it means that the visa holder would face the utmost or highest degree of hardship if their visa were to be cancelled. The relevant hardship must be a necessary consequence of the cancellation of the visa, a mere possibility or probability would not be sufficient to constitute extreme hardship.
33. In a written statement dated 3 October 2007 (Exhibit A5) Mr Wijaya stated that he has vivid memories of riots in Medan in May 1998 when he was aged 15 years, and he witnessed casualties when he and his family escaped to Jakarta and then to Singapore. He said that the events have traumatised him and he required medical treatment for anxiety and depression until he moved to the United States in 2000. A letter dated 3 October 2007 (Exhibit A6) from his family doctor in Medan states that in 1998 he was diagnosed with an anxiety disorder.
34. Mr Wijaya told the Tribunal that he commenced a university course in property in the United States and transferred to RMIT University when he moved to Australia in 2001. He completed a Bachelor of Business (Property) degree in 2004 and obtained employment in real estate. He explained that he has left that industry and is working in a café on a casual basis. He said that he is currently studying part-time for a Master of Professional Accounting degree at RMIT University and expects to finish in about three years. Mr Wijaya confirmed he only assists his father with aspects of Kiaw Bin’s activities such as banking and the receipt of documents because of his father’s poor command of English. He said that he speaks to his father regularly by telephone.
35. Mr Wijaya stated that since arriving in Australia he has assimilated into the Australian way of life and has adapted culturally and socially, and most of his friends live in Australia. He said he has returned to Indonesia only twice, the last visit being four years ago, and has lost touch with extended family and friends in Medan. His sister and several cousins live in Australia, and his parents are the only close relatives who live in Indonesia. He said that he and his former girlfriend in Australia have ended their relationship. Mr Wijaya stated that he has not considered the possibility of returning to Indonesia to work because his qualifications would not assist him and he would be traumatised by past events, although he agreed that the situation in Medan is now peaceful. He conceded that he has not made enquiries about seeking a student visa to return to Australia if his business skills visa is cancelled.
36. Ms S. Wijaya, Mr Wijaya’s sister, told the Tribunal that she lives with Mr Wijaya and was living away from home at the time of the unrest in Medan in 1998, but stated that Mr Wijaya suffered trauma when the family was forced to flee, although he has not required medical treatment since living in Australia. She stated that he has not discussed with her the consequences of the cancellation of his visa.
37. The Tribunal takes into account that Mr Wijaya has lived in Australia for five years, has formed a wide network of friends, is committed to the Australian way of life, has completed his business degree and has commenced a master’s degree in accounting. He has expressed a strong desire to remain in Australia. Undoubtedly Mr Wijaya would experience emotional and practical difficulties if forced to leave his friends and sister in Australia and re-locate to Indonesia. However, his parents live in the family home in Medan and have the financial and other resources to support and assist him with accommodation and adjustment to the Indonesian way of life. There is no persuasive evidence before the Tribunal to suggest that as the holder of a degree in business from an Australian university with a partially-completed master’s degree in accounting he would be unable to obtain suitable employment in Indonesia.
38. The Tribunal takes into account Mr Wijaya’s evidence about the unrest in Indonesia. However the problems occurred nine years ago and the current situation in Medan is apparently peaceful and safe for citizens of Chinese background. There is no current medical evidence to suggest that Mr Wijaya is suffering from any depressive or other illness or would be at risk of harm if he is forced to return to Medan. He would be able to apply for a visa to return to Australia to study or to work in a professional capacity in property or accounting.
39. For these reasons the Tribunal finds that cancellation would cause hardship and disruption to Mr Wijaya’s life. However in all the circumstances the Tribunal finds that cancellation of his visa would not result in extreme hardship to him.
DECISION
40. The Tribunal affirms the decisions under review.
I certify that the forty [40] preceding paragraphs are a true copy of the reasons for the decision of:
G.D. Friedman, Senior Member and C. Ermert, Member
(sgd) Mara Putnis
Associate
Dates of hearing: 26 July 2007, 8 October 2007
Date of decision: 18 October 2007
Advocate for applicant: Ms M. Liu
Solicitor for applicant: Nevile & Co
Advocate for respondent: Ms B. McNeilSolicitor for respondent: Clayton Utz
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