Pranata and Anor and Minister for Immigration, Multicultural and Indigenous Affairs
[2004] AATA 517
•24 May 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 517
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/338-342
GENERAL ADMINISTRATIVE DIVISION ) Re PRANATA & ANOR Applicant
And
MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member BJ McCabe Date24 May 2004
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
....................Sgd......................
Senior Member
CATCHWORDS
MIGRATION LAW – cancellation of business visa – whether applicant has substantial ownership interest in an eligible business – whether business is an eligible business – whether applicant is utilising skills in active participation at a senior level in the day to day management of the business – whether applicant has made genuine efforts – whether visa should be cancelled – decision affirmed
Migration Act 1958 (Cth)
Re Ong v Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 178
Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54
Dhanjal and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 1120
Freeman v Secretary, Department of Social Security (1988) 87 ALR 506
Federal Commissioner of Taxation v Whitfords Beach Pty Ltd (1982) 150 CLR 355
State Superannuation Board (NSW) v Federal Commissioner of Taxation (1988) 19 ATR 1264
Tang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997
REASONS FOR DECISION
Senior Member BJ McCabe 1. This is an application for review of a decision of the respondent made on 14 March 2003 to cancel the applicant’s Business Skills visa. The visa was cancelled on the basis the applicant had not complied with the requirements of section 134 Migration Act 1958 (“the Act”). The cancellation decision meant the applicant’s family’s supplementary visas were also cancelled. They were secondary applicants in the matter.
2. The matter was heard on 17 February 2004. The applicant attended the hearing and was represented by Mr Welch. The respondent was represented by Mr Gallo. In evidence were the documents supplied by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T-documents). The only other documents in evidence were a set of five files submitted by the applicant. They contained information relating to the applicant’s business dealings in Australia.
The Facts
3. The applicant was granted a Business Skills Visa on 8 November 1999. She was a party to the creation of Lima One Pty Ltd (“Lima One”) which was registered on 7 November 2001 (f131 T15 of the T-documents). The applicant is a shareholder in Lima One. She owns 240001 of a total of 960008 shares in the business. By my calculation this means she has a basic ownership interest of 24.99 percent.
4. The applicant says Lima One is in the business of property development. Evidence indicates the business has undertaken two projects so far: the construction of a new house, and the renovation of an existing house.
5. On 7 November 2002 the respondent sent a Notice of Intention to Cancel the Visa to the applicant. On 14 March 2003, the respondent cancelled the Visa on the basis the applicant had not satisfied her obligations under the Act.
6. The secondary applicants are not disputing the decision in relation to their visas on the grounds of undue hardship.
The Issue before the Tribunal
7. The issue before the Tribunal is whether the applicant can satisfy s134 of the Act. It provides:
(1) Subject to subsection (2) and to section 135, the Minister may cancel a business 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.
8. I think the specific questions I must consider in this case are as follows: does the applicant have a “substantial ownership interest” in Lima One? Is Lima One an “eligible business”? Has the applicant utilised her skills in actively participating at a senior level in the day-to-day management of Lima One? Has the applicant made genuine efforts within the meaning of s 134(2)? If s134(1) and s134(2) are not satisfied, should the Tribunal exercise the residual discretion contained in s134(1) not to cancel the visa? The Tribunal must determine whether the decision was correct at the time it was made: that is, March 14 2003 (see Freeman v Secretary, Department of Social Security (1988) 87 ALR 506 at 509 per Davies J).
Substantial Ownership Interest
9. A “substantial ownership interest” is a “question of fact and degree, having regard to the business entity involved, and not simply mathematics”: Re Ong v Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 178 at 26. Here, the applicant has an ownership interest of 24.99 percent. The business is worth over $400,000. In Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54 a 25 percent shareholding corresponding to a value of roughly $150,000 satisfied the section. In Dhanjal and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 1120, a 20 percent interest satisfied the section. I am satisfied the applicant has a “substantial ownership interest” in Lima One.
Eligible Business
10. “Eligible business” is defined in section 134(10) of the Act. The sub-section says:
“eligible business” means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a.) The development of business links with the international market;
(b.) the creation or maintenance of employment in Australia;
(c.) the export of Australian goods or services;
(d.) the production of goods or the provision of services that would otherwise be imported into Australia;
(e.) the introduction of new or improved technology to Australia;
(f.) an increase in commercial activity and competitiveness within sectors of the Australian economy.
11. The applicant says it satisfies the definition of “eligible business” because it has created or maintained employment in Australia: s134(10)(b). Also, the applicant says the business has resulted in an increase in commercial activity and competitiveness within the building industry: s134(10)(f).
12. I am troubled by the suggestion Lima One constitutes a “business”. The term is not defined in the Act but it has been the subject of substantial judicial discussion. Mason J explained in Federal Commissioner of Taxation v Whitfords Beach Pty Ltd (1982) 150 CLR 355 (at 378-379) that words like “business” exhibit “a chameleon-like hue, readily adapting themselves to their surroundings…”. I think his Honour meant it is impossible to settle a definitive list of characteristics that must be present in every case before one can describe the activity in question as a business. One must instead have regard to the statute in question. There have also been judicial references to “system, repetition and continuity” (see Edgelow v MacElwee [1918] 1 KB 205 at 206) in the course of the decision in State Superannuation Board (NSW) v Federal Commissioner of Taxation (1988) 19 ATR 1264, although his Honour said these formulations have been criticised: see, for example, Hungier v Grace (1972) 127 CLR 210 at 217 per Barwick CJ.
13. In Tang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997 Deputy President McMahon said:
The reference in subparagraph 134(1)(b) to the “day to day management of that business” indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council (1980) 144 CLR 1 Mason J considered that the use of the phrase “carrying on the business”, as a qualifier of the noun “business”, required that there be a commercial enterprise in the nature of a going concern “that is activities engaged in for the purpose of profit on a continuous and repetitive basis”. Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Ltd…In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.
14. Here Lima One has built one house, and renovated another. These were two one-off projects, not the product of a continuous and repetitive business structure. Also Lima One’s “strategic action plan” (exhibit 2 T287) is vague and certainly does not create a business-like structure. It says:
BUSINESS GOALS OF LIMA ONE PTY. LTD
1. The owners working in the business
2. Two and a half million dollars turnover with a 25% profit in three years
3. Services provided: Quality commercial and domestic developments at competitive market prices.
15. I have some doubt as to whether s 134(10) could be said to extend to allow small-scale property renovation and development such as this to constitute an “eligible business”.
utilising skills in actively participating at a senior level in the day to day management of the company
16. As it happens, it is not necessary for me to reach a concluded view about whether Lima One qualifies as an eligible business within the meaning of the Act because I am not satisfied the applicant has utilised her skills in actively participating at a senior level in the day-to-day management of the company.
17. A great deal of evidence was placed before the Tribunal regarding the applicant’s participation in the management of Lima One. Section 134 of the Act says she must
[utilise] his or her skills in actively participating at a senior level in the day-to-day management of that business
18. The evidence I note in particular is:
• A number of letters to the applicant written in connection to the business: notably, a building inspection report from “Archicentre” addressed to the applicant, dated 21 March 2003 (exhibit 2 T601-621), a letter from “Parklands” in relation to a property inquiry dated 5 May 2003 (exhibit 2 T297); a letter and an email from “Rivers” in relation to a property inquiry dated 11 May 2003
(exhibit 2 T298); several letters from “Forest Lake” in relation to property inquiries dating from late October 2002 to 28 May 2003 (exhibit 2 T318-T339)
• A number of letters written by the applicant in relation to property inquiries: notably a note to “Forest Lake Sales and Information” dated 27 March 2003 (exhibit 2 T335); a note to “Professionals” dated 28 March 2003 (exhibit 2 T336);
• A mass of photocopied material including real estate brochures and business cards of real estate agents;
• Various minutes of Directors’ meetings at which the applicant is mentioned (exhibit 2 T276-289).
• A minute taken of the Directors’ Meeting of Lima One, dated 28 May 2003 (exhibit 2 T276). It is worth reproducing the text of the note here. It said
Dear Liana [the applicant]
Following our telephone communication yesterday, that due to my current business responsibilities requiring my full attention, I would like to transfer the day to day running of LIMA One P/L to you until further notice.
This includes the duty of researching suitable new investment opportunities.
19. I have reviewed this mass of evidence at length. It does not convince me the applicant was using her skills in actively participating at a senior level in the day-to-day management of Lima One. A bundle of photocopied real estate brochures proves nothing. Letters from property developers and a building inspector that are addressed to the applicant also show little. Also I note most of these letters are dated after 14 March 2003 (the date of visa cancellation).
20. In fact the text of the minute taken at the Director’s meeting on 28 May 2003 is compelling evidence the applicant was not utilising her skills to participate at a senior level in the day to day management of Lima One before this date.
21. I can accept the applicant did some research into the property market in Queensland in late 2002 and early 2003 in particular. She evidently collected a lot of brochures. But these activities are not enough to satisfy the section.
22. The exercise of the discretion in s134(1) to cancel the visa was justified. (I will return to the question of whether or not the residual discretion in s 134(1) ought to be exercised.) Next the Tribunal must decide whether the ameliorating provisions in s134(2) apply.
Genuine Efforts
23. Section 134(2) says:
(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.
24. The evidence I have referred to in deciding the applicant had not participated at a senior level in the management of Lima One – assuming it is an eligible business, which I doubt – makes it clear the applicant did not make genuine efforts to take a role. The evidence offered at the hearing made it clear the applicant’s attention was directed elsewhere at the relevant time. She did not take an active role until May 2003 at the earliest.
Residual Discretion
25. The only further question to resolve is whether the Tribunal should exercise the residual discretion contained in s134(1) of the Act not to cancel the visa.
26. No specific submissions were made on this point at the hearing. The applicant said she was at times distracted by the need to finalise her affairs in Indonesia. However I am not satisfied this would justify the exercise of the discretion. Having considered all the evidence before the Tribunal I can find no compelling reason why the visa should not be cancelled.
Conclusion
27. The decision under review is affirmed. The visa of the applicant as well as any supplementary visas must be cancelled.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member BJ McCabe
Signed: .....................................................................................
Associate: Thomas RitchieDate/s of Hearing: 17 February 2004
Date of Decision: 24 May 2004
The Applicant was represented by Mr Welch of Welch Law
The Respondent was represented by Mr Gallo of Blake Dawson Waldron
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