Re Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs

[2004] AATA 579

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 579

ADMINISTRATIVE APPEALS TRIBUNAL      )

)N2003/1050

GENERAL ADMINISTRATIVE DIVISION		)
Re		HENDRA NAGARIA

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date7 June 2004

PlaceSydney

Decision The decision under review is affirmed.  

[Sgd] Mr S. Webb, Member

CATCHWORDS

IMMIGRATION - business skills visa – no eligible business - genuineness of visa holder’s efforts to comply with visa obligations – intentions of visa holder – residual discretion – decision affirmed

Migration Act 1958 ss 134, 135, 137

Kim v Minister for Immigration and Indigenous and Multicultural Affairs [2004] FCA 31

Re Wong and Minister for Immigration and Indigenous and Multicultural Affairs [2002] AATA 54

Re Griffiths and Migration Agents Registration Authority [2001] AATA 240

Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

Hospital Benefit Fund of Western Australia v Minister for Health, Housing and Community Services (1992) 111 ALR 1

Hope v Bathurst City Council (1980) 144 CLR 1

REASONS FOR DECISION

7 June 2004 Mr S. Webb, Member         

1.      The application in these proceedings concerns the decision of a delegate of the Minister for Immigration and Indigenous and Multicultural Affairs (“the Minister”) on 22 May 2003 to cancel the business skills visa of the Applicant, Mr Nagaria.

2.      The matter came on for hearing in Sydney on 24 and 25 May 2004.  Mr Nagaria gave oral evidence at the hearing and was represented by Mr K. Murphy, solicitor.  The Minister was represented by Mr I. Muthalib, solicitor.  Documents were tendered in evidence and labelled at the hearing.  The Tribunal was assisted at the hearing by an interpreter in the Indonesian language.

factual context

3.      The following facts arise from the documentary evidence before the Tribunal and the oral evidence given at the hearing in this matter. 

4.      Mr Nagaria is an Indonesian national.  He was born on 5 August 1950 and attended the Sydney Technical College in the 1970s for one year.  Mr Nagaria speaks and reads English with a reasonable degree of competency.

5.      Mr Nagaria has qualifications in Commerce (Taiwan, 1972), Business Administration (USA, 1989) and International Banking (USA, 1990). He applied for a Business Skills Migration Class AD, Subclass 128 Senior Executive Visa (“business visa”) on 18 February 1998 and was granted the business visa on 29 November 1999.  Mr Nagaria first entered Australia following the grant of his business visa on 4 March 2000. 

6.      At the time of his business visa application Mr Nagaria was Director for Affiliated Business with PT Summarecon Agung Jakarta, a property development company.  His involvement with that company in the role of Director for Affiliated Business ceased in June 2000.  Mr Nagaria was at that time and continues to be involved as a director with PT Atriasemesta Buana Jakarta and Superscene Development Limited Hong Kong, both of which are involved in property.  Mr Nagaria has investments in Taipei, Hong Kong and Sydney as well as in Indonesia. 

7.      During the period Mr Nagaria’s business visa was on foot prior to 22 May 2003 he spent a total of 31 days in Australia.

8.      On 5 December 2000 Superscene Proprietary Limited (“Superscene”) was registered with Mr Nagaria as sole director and shareholder, owning the 100 issued $1 shares in the company. 

9.      On 11 February 2002 Mr Nagaria entered into an agreement with International Financial Services Pty Ltd (“IFS”) to establish “an IFS network within Indonesia” whereby Mr Nagaria would be “Country Manager for Indonesia” and would be paid a commission of 0.4% of all loans referred to IFS.  In the period from 11 February 2002 to 30 June 2003 Mr Nagaria made four referrals to IFS and was paid a commission of $9,900.

10.     On 13 August 2002 the Minister sent Mr Nagaria a 24 month business skills survey for return by 1 October 2002.  Mr Nagaria did not return the survey by the return date but did return it on 24 February 2003.

11.     On 15 January 2003 the Minister sent Mr Nagaria a notice of intention to cancel his business skills visa.

12.     On 21 February 2003 Mr Nagaria was appointed as a selling agent in Indonesia for Spurbest Pty Limited (“Spurbest”) with the brief to market Spurbest’s Sydney residential unit developments in Indonesia on the basis of a 2.25% sales commission.  From 21 February 2003 to this date Mr Nagaria has not sold any Spurbest properties and he has not received any commission from Spurbest.

13.     On 22 May 2003 the Minister decided to cancel Mr Nagaria’s business skills visa.  Mr Nagaria applied for review of that decision by this Tribunal on 27 June 2003.

legal principles

14.     This application rises for consideration under the Migration Act 1958 (“the Act”). 

15.     The grant of a business skills visa to a person is subject to prescribed conditions (s.41) that are set out in the Migration Regulations 1994 (“the Regulations”). The grant is based, at least in part, on the expectation that the visa holder will obtain a substantial ownership in and will utilise their skills in the day to day senior management of an eligible business in Australia within a three year period. Failure to satisfy those expectations may lead to cancellation of the visa (s.134(1)).

16.     The power to cancel a business visa under s.134(1) of the Act is discretionary but is subject to essential preconditions (s.134(9)) and is limited (s.134(2)). It is essentially preconditioned by the giving to the visa holder of a notice of intention to cancel within three years of activation of the visa (s.134(9)). Such a notice must set out the reasons for the intended cancellation and invite representations from the visa holder within a period of 28 days after the notice is given (s.135(1)). Any such representations must be duly considered (s.135(3)). The power is limited to the extent that it must not be exercised if the Minister is satisfied that the visa holder has made and intends to continue to make a genuine effort to satisfy the business expectations pertaining to the grant of the visa (s.134(2)). The Minister may take into account relevant matters when deciding whether a person has made a genuine effort (s.134(3)).

17.     Nonetheless there is no obligation to exercise the discretionary power to cancel a business visa if the visa holder fails to satisfy the business expectations attaching to his or her visa (see Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at pars 19 to 21). Following Kim there is discretion not to exercise the power to cancel a business visa even in the event that the criteria set out in paragraphs 134(1)(a) to (c) are not satisfied.

18.     The terms “eligible business” and “ownership interest” are defined at s.134(10) of the Act.

19.     The jurisdiction of the Tribunal in relation to the review of a cancellation decision is to determine the correct and preferable decision at the time the cancellation decision was made (see Re Wong and Minister for Immigration and Indigenous and Multicultural Affairs [2002] AATA 54, Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Freeman v Secretary, Department of Social Security (1988) 19 FCR 342). The Tribunal will have regard to all of the evidence before it and is not limited to the evidence that was before the primary decision maker, but must address the same question that was before the primary decision maker (see Hospital Benefit Fund of Western Australia v Minister for Health, Housing and Community Services (1992) 111 ALR 1 at par 11).

issues

20.     On the facts of this case the legislation poses four questions for determination, as follows:

(a)Was Mr Nagaria given a notice stating the Minister’s intention to cancel his business visa and inviting representations with 28 days after the date on which the notice was given pursuant to s.135 of the Act? And if so,

(b)Did Mr Nagaria obtain a substantial ownership interest in or utilise his skills actively participating at a senior level in the day-to-day management of an eligible business in Australia on or before the date of the decision to cancel his visa? And if not,

(c)Did Mr Nagaria make and intend to continue to make a genuine effort to obtain such an ownership and to utilise his skills in the requisite manner in an eligible business at that time? And if not,

(d)Was the decision to cancel his business visa the correct and preferable decision in exercise of the discretion conferred upon the decision maker by s.134(1) of the Act?

summary findings

21.     Mr Nagaria was sent a notice stating the Minister’s intention to cancel his business visa on 15 January 2003.  The notice invited Mr Nagaria to make representations before 24 February 2003, a period in excess of the requisite 28 day period.  Mr Nagaria engaged Mr Gunther Berghofer from the Study and Migration Centre of Australia to make representations on his behalf, which were received on 24 February 2003.

22.     Mr Nagaria did not obtain a substantial ownership interest in nor did he utilise his skills in the day-to-day management of an eligible business in Australia prior to 22 May 2003, the date on which his business visa was purportedly cancelled.  His company Superscene is not an eligible business.

23.     I am satisfied that Mr Nagaria did not make genuine efforts to comply with the expectations attaching to his business visa prior to its purported cancellation on 22 May 2003. 

24.     Carefully considering all of the circumstances of Mr Nagaria’s case, I am not persuaded to exercise the residual discretion in s.134(1) of the Act not to cancel Mr Nagaria’s business visa.

decision

25.     It follows that the decision to cancel Mr Nagaria’s business visa was the correct and preferable decision and is affirmed.

reasons for the decision

26.     Making this decision I have carefully considered all of the evidence, the submissions of the parties, the relevant case law and legislation.

s.134(1) criteria for cancellation of a business visa

27. Mr Nagaria asserted that his ownership of Superscene constituted a substantial ownership interest in an eligible business in compliance with s.134(1) of the Act. I do not agree. It is a fact that Mr Nagaria owned the entire issued share capital in the company, constituting 100 $1 shares. However, the company by his own account was not a going concern during the period his business visa was on foot prior to 22 May 2003. Mr Nagaria’s evidence was that he referred four “acquaintances” to IFS prior to the decision to cancel his business visa and received an amount of $9,900 commission from those referrals.  The company records reveal no other transactions.  I am not satisfied that four transactions in a 14 month period are sufficient to be considered as a business that is a going concern operating for profit (see Hope v Bathurst City Council (1980) 144 CLR 1 at par 14). The lack of profit is not the issue. The lack of evidence of business activity and the absence of a business plan setting out corporate strategies and goals to deliver profit compel me to conclude that the Superscene was not a going concern. On the evidence it appears that Superscene is a corporate vehicle with some cash reserves that was and is awaiting business, albeit without a business plan, that is administered by Mr Nagaria’s accountant. A company of this nature is not within the meaning of “eligible business” as it is defined at s.134(10) of the Act.

28.     Even if I was wrong on that point, the evidence concerning Mr Nagaria’s activities would not persuade me to conclude that he had been actively engaged at a senior level in the day to day management of the company.  Put simply, there was nothing to manage on a day to day basis.

29.     I am satisfied that Mr Nagaria did not obtain a substantial ownership interest in an eligible business or participate at a senior level in the management of such a business during the period his business visa was on foot prior to 22 May 2003.

30.     It follows that the s.134(1) discretion to cancel Mr Nagaria’s business visa may be exercised subject to the limits set out in s.134(2) (see Kim v Minister for Migration and Indigenous and Multicultural Affairs (above)). 

genuine effort

31. It is necessary to determine whether Mr Nagaria’s efforts during the period his visa was on foot prior to 22 May 2003 are within the terms of s.134(2) of the Act.

32.     As will appear, considering all of the evidence I am persuaded to conclude that they are not.  I am not satisfied that Mr Nagaria made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and, pursuant to that acquisition, made a genuine effort to utilise his skills at a senior level in the day to day management of such a business and intended to continue those genuine efforts on and after 22 May 2003.  Mr Nagaria’s own description of his efforts during the period his business visa was on foot was “minimal” and “very little”.

33.     Mr Nagaria, in his oral evidence, acknowledged that he had not developed business in Australia during the relevant period and attributed this failing to “the Asian financial crisis”.  He said he wanted “a second chance”.  His evidence was that the decline in the value of the Indonesian Rupiah relative to the Australian Dollar and other currencies, his loss of employment in June 2000 and “political instability” following the end of President Soeharto’s presidency caused him significant financial difficulties in consequence of which he had been forced to “restructure” his business interests and focus on core investments in Indonesia and Hong Kong.  In Mr Nagaria’s submission these factors were beyond his control and prevented him from developing business in Australia.

34.     Mr Nagaria stated that he had attempted to purchase a substantial share in the Study and Migration Centre of Australia in 2003 without success.  I note in passing that the Centre was operated at the time by Mr Nagaria’s migration agent. When questioned about his intentions and business activities after 22 May 2003, Mr Nagaria pointed to $10,000 in commissions arising from subsequent referrals to IFS and spoke of his intention to develop a property in Jakarta as “a school or university” for Indonesian students to learn English before coming to Australia.

35. There is no limit on the relevant matters than may be taken into account when determining whether “genuine effort” of the kind referred to in s.134(2) of the Act has been made, as exemplified by s.134(3). However, Mr Nagaria was not able to provide any material evidence of research he had undertaken or business plans he had developed in pursuit of his stated intentions. He has made only brief visits to Australia since activation of his business visa on 29 November 1999 and has spent a total of 31 days in Australia since that date. Mr Nagaria failed to comply with a s.137 notice only providing a response to the 24-month survey (13 August 2002) in the context of representations on 24 February 2003 in response to the Minister’s notice of intention to cancel his business visa. There is evidence that Mr Nagaria and members of his family held amounts totalling approximately $478,000 on deposit in HSBC Bank accounts in Australia in 2003, purportedly for the purpose of investment.

36. Nonetheless, considering all of the evidence, the existence of those monies on deposit does not persuade me that Mr Nagaria made genuine efforts to comply with the obligations attaching to his business visa prior to 22 May 2003. That is the test to be applied. I find that Mr Nagaria does not come within the terms of s.134(2) having not made a genuine effort to obtain a substantial ownership interest in an eligible business and to manage such a business on a day to day basis even though he may intend to make an effort to develop or acquire a business in Australia in the future.

37.     It follows that Mr Nagaria’s business visa may be cancelled pursuant to s.134(1) of the Act.

residual discretion

38. Considering the question whether there is “residual discretion” in s.134(1) not to cancel a business visa Kiefel J said in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (above) at paragraphs 19-21:

“19 …At any time during the currency of the visa, if the Minister is satisfied that the visa holder’s obligations have not been met and the Minister is not persuaded that there have been genuine efforts to do so or that it is intended to continue to make those efforts, then s 134 permits cancellation of the visa. The question is whether the Minister is obliged to do so.

20 There are some factors which weigh against the likelihood that that might be intended. No words indicative of obligation are used and the section is not structured in such a way as to suggest that cancellation is to follow automatically. The prohibition in subs (2) is a limit upon the power to cancel given by s 134(1) if the Minister is satisfied of the matters there listed. Those matters are not expressed as conditions for the maintenance or non-cancellation of the visa.

21 It is not obvious that cancellation is the only possibility. The Minister’s contention that the word ‘may’ in s 134(1) does not mean that there is a discretion not to cancel would be stronger if it were shown that there was nothing which might be said in the visa holder’s response to the notice of intention to cancel, which might be relevant to the exercise of a discretion, or that there was no purpose to be served by the exercise of such a discretion. Whilst the discretion given in s 134(1) is not as broad as that considered in [Samad v District Court Of New South Wales (2002) 209 Clr 140], in the sense that it does not involve more choices, it cannot be said that a decision not to cancel a visa could serve no purpose. 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. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by a visa holder. The Minister retains the right to cancellation under s 134(1) at all times. This does not suggest that the Minister is to be obliged to cancel a business visa if the Minister is not satisfied at a particular point during the currency of the visa of the matters in s 134(2).”

39.     In Mr Nagaria’s submission the circumstances that prevented him from pursuing the development of a business in Australia, as he intended when applying for the business visa in 1998, should be taken into account when deciding whether to exercise the residual discretion not to cancel his business visa.  Those circumstances were “the Asian financial crisis that commenced in 1998”, Mr Nagaria’s loss of employment in June 2000 and “political instability” following the end of President Soeharto’s rule.

40.     Mr Nagaria’s evidence, which I accept, was that the decline in the value of the Indonesian Rupiah against the Australian Dollar and other currencies meant he had to restructure his business and investments.  In his submission this was further necessitated by the cessation of his employment by PT Summarecon Agung Tbk in June 2000.  Mr Nagaria asserted that his financial and business affairs have only recently stabilised to the point where he can rekindle his interest in developing an Australian business.

41.     Considering all the evidence I find that Mr Nagaria’s restructuring activities commenced in or about 1999.  His evidence was that he sold his property at Mosman in 1999 in order to pay off a loan over that property.  The declining value of the Indonesian Rupiah at that time from 3,500Rp to 16,000Rp to one Australian Dollar meant the cost of repayments had increased very significantly to an unrealistic level.  It is apparent that Mr Nagaria would have made a significant gain trading any Australian dollars, for example from the sale of the Mosman property, for Indonesian rupiahs but investment in Australian assets would be more expensive at that time.  I accept that in such circumstances investment in the development of an Australian business may have been less commercially viable and attractive from an Indonesian investment perspective.  Nonetheless, the focus of Mr Nagaria’s restructuring efforts was to protect his assets and investments in Jakarta, Hong Kong and Taipei.  Those activities diverted his attention from the undertakings he gave in relation to his business visa.  

42.     With regard to Mr Nagaria’s claimed loss of employment by PT Summarecon Agung Tbk, I note that he continued as a director of PT Atriasemesta Buana and maintained his involvement with Superscene Development Limited Hong Kong.  The amount of Mr Nagaria’s remuneration in his directorial role at PT Summarecon Agung Tbk is not in evidence and, on the evidence before me, it is not possible to assess the impact of the loss of that employment on Mr Nagaria’s financial and business circumstances.

43.     I accept that political uncertainty may give rise to uncertainty in currency markets. 

44.     Considering these factors I am not persuaded that Mr Nagaria was prevented from engaging in a greater level of activity in pursuit of his claimed interest in developing a business in Australia.  The fact is he made little effort to engage in business activities in Australia prior to the decision on 22 May 2003 to cancel his business visa and, on the evidence before me, has made very little effort since that date.  Mr Nagaria was not able to point to any research he had undertaken or to any business proposal of material substance he had developed in relation to his Australian company.  Mr Nagaria’s bank records indicate that he and his family members had approximately $478,000 on deposit in Australia in 2003, which, by his own account, was to be used for investment in an Australian business.  It cannot be said that Mr Nagaria’s previous difficulties that required him to sell his Mosman property continued in 2003 when he had a significant amount of money in Australia on short term deposit.

45.     I am satisfied that Mr Nagaria has done little to either develop a realistic business proposal or plan, or to conduct business related research, or to obtain a substantial ownership in an eligible business in Australia.  While Mr Nagaria has an abundance of ideas and intentions concerning business possibilities and opportunities in the future, he does not have a realistic plan that would be likely to result in the development of an eligible business or a substantial ownership thereof. 

46.     Mr Nagaria’s submissions, concerning the likely effect cancellation of his business visa may have on his ability to obtain another visa in the future in light of his age and the removal of the subclass 128 visa in 2003, are not accepted. Cancellation of his business visa does not preclude him from making application for a visa in the future. The availability of particular classes of visas and the unavailability of other previous classes are not factors that are germane to the current matters in issue; that is cancellation of Mr Nagaria’s existing business visa pursuant to s.134(1) of the Act.

47.     I am not persuaded that Mr Nagaria would be likely to develop or obtain a substantial ownership in an eligible business in Australia within the period of his business visa if he was given more time to do so.  That being the case, I am satisfied that it is not appropriate to exercise the “residual discretion” not to cancel Mr Nagaria’s business skills visa.

conclusion

48. Mr Nagaria was properly notified of the Minister’s intention to cancel his business visa and he has not made a genuine effort to comply with his business visa obligations pursuant to s.134(2) of the Act. He did not obtain a substantial ownership in an eligible business in Australia prior to 22 May 2003. The discretion to cancel his business visa pursuant to s.134(1) of the Act is enlivened therefore. I am satisfied that it is not appropriate to exercise the “residual discretion” not to cancel his business visa in the circumstances. It follows that the decision to cancel his business visa is affirmed.

I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Webb

Signed:  A. Krilis                  Associate

Date/s of Hearing  24 and 25 May 2004
Date of Decision  7 June 2004
Solicitor for the Applicant          Mr K. Murphy
Solicitor for the Respondent     Ms I. Muthalib