Re Tany and Minister for Immigration and Multicultural and Indigenous Affairs
[2005] AATA 58
•20 January 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 58
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2004/103
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | KARIF TANY | ||
Applicant
| And | MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS |
Respondent
DECISION
| Tribunal | Deputy President D G Jarvis |
Date20 January 2005
PlaceAdelaide
| Decision | The Tribunal affirms the decision under review. |
D G Jarvis
(Signed)
Deputy President
CATCHWORDS
MIGRATION – Business Skills visa – cancellation of visa – applicant had ceased to hold substantial ownership interest in eligible business in Australia – applicant had not made a genuine effort to actively participate at a senior level in day-to-day management of that business or a proposed new business – activities outside Australia did not amount to requisite participation in management of business – nature of businesses – limited relevance of circumstances or events subsequent to date of cancellation of visa – use of policy instructions – meaning of “day-to-day management” – discretion to cancel – matters relevant to exercise of discretion – decision under review affirmed.
Migration Act 1958, ss 134(1), 134(2) and 134(3)
Re Griffith and Migration Agents Registration Authority [2001] AATA 240
Re Haman & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Re Permana & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 802
Luntz Assessment of Damages for Personal Injury and Death 3rd Ed. (1990) par 1.4.1
Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426
Re Wen-Yao Liu and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1397
Re Jo and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 394
Re Widjaja and Minister for Immigration and Multicultural Affairs [2003] AATA 380
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
REASONS FOR DECISION
| 20 January 2005 | Deputy President D G Jarvis |
On 19 August 2003, a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs cancelled a business skills visa which had been granted to Karif Tany on 23 December 1999. The delegate found that there were grounds for cancellation under s 134(1) of the Migration Act 1958 (the “Act”) on the basis that Mr Tany had not obtained a substantial ownership interest in an eligible business in Australia, or was not utilising his skills in actively participating at a senior level in the day-to-day management of that business, or did not intend to continue to hold such an interest or to so utilise his skills in such a business. (exhibit A1, T3, page 6).
Mr Tany’s daughter, Lebie Yoanna, also held a Business Skills visa as a member of Mr Tany’s family unit. Upon the cancellation of Mr Tany’s visa, the delegate of the Minister also cancelled Ms Yoanna’s visa, as he was required to do by s 134(4) of the Act. However, this subsection is expressed to be subject to s 134(5), which provides that the Minister must not cancel the family unit member’s visa if the cancellation of the visa would result in extreme hardship to that person.
Mr Tany and Ms Yoanna lodged applications with this Tribunal for review of the delegate’s decisions. The applications were heard at the same time. The parties’ final submissions were made in writing. The submissions made on behalf of Mr Tany and further evidentiary material relevant to his application were received from his counsel on 6 October and 5 November 2004, and submissions of counsel for the Minister were received on 15 October and 8 November 2004. I am handing down my decision in relation to Ms Yoanna’s application at the same time as I hand down the within decision.
Issues
The issues before me are as follows:
(a) whether I am satisfied that Mr Tany:
(i)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia;
(ii)has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business; and
(iii) intends to continue to make such genuine efforts
(in which case, by virtue of s 134(2), I must not cancel Mr Tany’s visa);
(b)whether under par 134(1)(c) of the Act I should be satisfied that Mr Tany does not intend to continue to:
·hold a substantial ownership interest in an eligible business in Australia; and
·utilise his or her skills in actively participating at a senior level in the day-to-day management of such a business; and
(c)if I am so satisfied, whether I should exercise the discretion conferred by s 134(1) to cancel Mr Tany’s visa.
The above issues also involve a number of sub-issues, to which I will refer later in these reasons.
It was common ground that at the time of his visa cancellation, Mr Tany did not satisfy par 134(1)(a) of the Act (i.e. he had not obtained a substantial ownership interest in an eligible business in Australia), and that he had not satisfied par 134(1)(b) (that is, he was not utilising his skills in actively participating at a senior level in the day-to-day management of any such business). The Minister also accepted that as at the date when his visa was cancelled, Mr Tany had made a genuine effort to obtain a substantial ownership interest in a business in Australia (namely, his interest in Cybus Computers), but the Minister disputes that that business was an eligible business.
Background
The following background facts were not in contention, and are based on the evidence of Mr Tany and certain documentary material in evidence before me.
Mr Tany was born in Indonesia on 15 December 1955. In 1981 he commenced a business in Lampung, Indonesia, distributing musical instruments. The business was registered on 15 August 1989 as Lampung Sport and Music.
In 1991 the business diversified into the sale of telecommunication products, particularly mobile telephones. The business now has seven outlets operating in Lampung, South Sumatra and Indonesia, and Mr Tany is the sole proprietor of the business. The business has been very successful and profitable, and Mr Tany said its turnover was AUD$12 million in the last financial year.
Mr Tany signed a contract for the purchase off the plan of an apartment at South Bank Towers in Melbourne on 25 October 1995. He and his wife have lived there on occasions when they have come to Australia, and his children, who attend college or a tertiary institution in Melbourne, have also lived there over the last year or so. Mr Tany estimates that the unit would now be worth about $460,000.
In about July 1997, Mr Tany applied for a business owner visa sub-class 127, and stated in support of his application that he intended to settle in Melbourne and “export the products and expertise of Australian made musical equipment for commercial industry” (exhibit A1, T12, page 45). By December 1999, when Mr Tany’s application was approved, he had established an Australian company, Ecayo Trading Pty Ltd, and that company had entered into a 50 per cent partnership with another company to operate a business called “Cybus Computers”.
Cybus Computers operated a retail store selling computers, accessories and mobile telephones. Mr Tany paid approximately AUD$30,000 to acquire his interest in the business. The financial performance of the business was poor. Mr Tany continued his involvement with the business until about April 2003, when the partnership was terminated on the basis that Mr Tany’s partner would continue to operate the business. Mr Tany withdrew from the business without receiving any payment for his interest in it, but without any obligation to inject further moneys into it.
Evidence as to Applicant’s Involvement in Management of Cybus Computers
Mr Tany said that when he acquired his interest in Cybus Computers, it was being managed by one Cheng Barry Kwok. In his witness statement (exhibit A2) Mr Tany says:
“22.Whenever I travel to Australia I had extensive meetings with the manager of Cybus Computers. I contributed to making decisions about the business including decisions about financial issues and business development.
23.For the first two years following my investment in the business, I felt that the business did quite well. However, over time I took the view that Cheng Barry Kwok was not managing the business well. He was spending too much money on stock and in my view he was not honest about his financial reporting to me. He was investing heavily in stock that not selling well and he was not making good decisions about day to day purchases (sic).
24.I continued to be involved in management of the business even when I was in Indonesia. However, it was difficult to fully implement my own ideas given that Barry was in the store on a day to day basis and would put in orders for stock etc.
25.I acknowledge that I have not spent as much time in Australia since the grant of my visa as I would have liked. My Indonesian business has done well and opportunities have presented for expansion of that business. As I have already indicated, Lampung Sport and Music now has seven outlets. A number of those outlets have been opened in the period since my visa was granted. The Indonesian market for mobile phones has grown very rapidly and I was keen to exploit the business opportunities as they presented.”
In the period after he was granted his Business Skills visa, and prior to his withdrawing from Cybus Computers, Mr Tany has been present in Australia as follows:
(a) between 18 January and 20 February 2000;
(b) between 3 April and 9 April 2000;
(c) between 21 October and 2 November 2001;
(d) between 29 June and 15 July 2002;
(e) between 7 January and 17 January 2003; and
(f) between 18 and 25 March 2003. (See exhibit A12).
He also visited Australia in February 2004, and later when he came to Australia for the hearing of the within proceedings, in September 2004.
In his oral evidence, which he gave through an interpreter, Mr Tany said he would find out about the financial situation of the business by a telephone call once a week. He said that he would also arrange to procure the equipment that came from Singapore, being accessories for computers.
In cross-examination Mr Tany said that Mr Kwok’s role included making decisions about staffing requirements and the hours the staff worked. He said Mr Kwok also made decisions about whom to employ, but he had to check those decisions with him (Mr Tany). Mr Tany also agreed that Mr Kwok would buy some stock, but would ask him (Mr Tany) about other stock. He said that Mr Kwok’s wife, Ms Stella Lee, dealt with administration, and would attend to budgets and financial management and how much to spend on staff and other things. Mr Tany said that he would phone Ms Lee every week “re stock, and hire of premises”, but he needed to “put more control” into the business himself. However, he was apparently unable to adequately keep control of the business, and did not feel satisfied with the way it was being run; and although he tried to prevent the losses that were being incurred, he could not do so. He further admitted that his telephone calls were to check the condition of the business as well as to try to improve it. However, he said Mr Kwok spent too much money, and while he tried to stop this, Ms Wong (the widow of the original owner of the business) let Mr Kwok do so, and he (Mr Tany) trusted her judgment.
Acquisition of Interest in Office Equipment Business
In March 2003, Mr Tany entered into discussions with a long-standing business associate, Mr Freddy Tan, regarding acquiring an interest in another Australian business involving sourcing second-hand computer and office equipment in Australia and exporting it to Indonesia. At that time Mr Tan was a shareholder in an Australian company, Glendale Forest Pty Ltd. He was also a shareholder in an Indonesian company, which was referred to throughout the hearing as Indomitra. The function of Indomitra was to find customers in Indonesia for the second-hand machinery imported from Australia. The customers in Indonesia would either buy or lease the equipment.
As a result of Mr Tany’s discussions with Mr Tan and other persons interested in Glendale Forest Pty Ltd, Mr Tany verbally agreed, in September 2003, to acquire the interest of Ms Fenny Siswati in Indomitra, and she agreed to take over Glendale Forest Pty Ltd. It was further agreed that a new Australian company would be formed, and that Mr Tany, Mr Freddy Tan and a third person, Mr Tatung Suganda, would together hold all of the shares in this new Australian company, and all of the shares in the Indonesian business, Indomitra.
It was further verbally agreed in or about September 2003 that Indomitra and the new Australian company would continue to operate cooperatively, with the new company sourcing office furniture and equipment from Australia and exporting it to Indonesia, where it would be leased or sold by Indomitra to customers in Indonesia.
On 26 March 2004, Mr Tany entered into an agreement with Ms Siswati for the sale and purchase of shares in Indomitra. A copy of this agreement, in the Indonesian language, was admitted as exhibit A6. An interpreter translated relevant excerpts from this agreement during the hearing, and these excerpts were read into the transcript. The agreement provides for the purchase by Mr Tany of the shares held by Fenny Siswati and her husband Harry Lumanto for the nominal sum of 100,000 Rupiah (see exhibit A5).
Mr Tany gave evidence that he paid AUD$65,000 in order to acquire Ms Siswati’s shares in Indomitra, and her interest in the Australian business. According to the evidence of Mr Tany and Ms Siswati, Mr Tany paid 147,000,000 Rupiah to Ms Siswati in March 2004. There was no evidence as to the apportionment (if any) of that amount between the Indonesian and Australian businesses, and it was not explained how this payment fitted with the parties’ proposal that a new company would be formed to carry out the Australian operations of the venture. Further, no evidence was produced that Glendale Forrest’s business was sold to the new Australian company.
According to various copy remittance advices, Mr Tany’s Indonesian company, Lampung Sport and Music, made the following payments to Tatung Suganda on behalf of Indomitra:
(a) on 17 March 2004, 65,003,000 Rupiah;
(b) on 22 June 2004, 60,003,000 Rupiah; and
(c) on 3 August 2004, 125,005,000 Rupiah.
The proposed new Australian company was registered in due course, on 22 April 2004, and is called Golden Luck Trading Pty Ltd. Shares in this company were issued to Mr Tany shortly after the hearing of the present proceedings. According to ASIC records, Mr Tany became a director of this company on 29 September 2004, and on the same date acquired 10 ordinary shares for a total payment of $10 (exhibit A18). According to a Company Extract Search dated 4 November 2004, the directors of Golden Luck Trading Pty Ltd are Bun Sie Ha and Mr Tany, and the shareholders (who each hold 10 shares for which in each case a total amount of $10 was paid) were Fredrigus Tjaihjana, Bun Sie Ha and Mr Tany. Mr Tany explained that Fredrigus Tjaihjana is his colleague Mr Freddy Tan, and Bun Sie Ha is the wife of Mr Tatang Suganda, the third shareholder (with Mr Tany and Mr Tan) in Indomitra. Other documents which would have evidenced the issue of shares in Golden Luck to Mr Tany, such as a written application for shares and minutes of a directors’ meeting resolving to issue the shares, were not produced.
Indomitra subsequently remitted funds to Golden Luck Pty Ltd as follows:
(a) on 6 April 2004, 65,176,040 Rupiah;
(b) on 27 April 2004, 63,506,700 Rupiah; and
(c) on 20 July 2004, 125,276,700 Rupiah (see exhibit A11).
It appears that the remittances to Golden Luck were used to fund the purchase by that company of office equipment. Golden Luck made shipments to Indonesia in May 2004 (see exhibit A7) and in August 2004 (see exhibit A8).
Applicant’s Involvement in Management of Office Equipment Business
When asked what his involvement was with Indomitra and in particular with distributing the office equipment, Mr Tany said that he was more involved with the customers in the Sumatra area. He said he had a lot of connections with people through selling telephones, and he used those business contacts. Other contracts were based on business trust. As to the Australian side of the business, Mr Tany said there were a lot of supplies of office equipment still in good condition, and his intention was to buy and trade such equipment.
In cross-examination, Mr Tany said that his colleague Mr Tan would be the buyer of the office equipment and he (Mr Tany) would be the seller. However, he said he would also have to come to Australia often to check that the items were suitable for sale in Indonesia. When pressed, he said that so far, he had come to Australia twice to inspect stock, once in February 2004 and once in about March 2003 (although he acknowledged that he had not at that time joined the company). Later he said that he had seen some stock on the day before the hearing, and would look at further stock after the hearing finished. He conceded that he was more involved with the Indonesian side of the business, but pointed out that if his colleagues did not buy the right stock then they would not be able to sell the stock. He further acknowledged that Mr Tan did most of the work in locating the stock and finding sources of it. He said “we” (presumably meaning himself and Mr Suganda) were the ones to decide what was to be sold in Indonesia. He disputed the proposition put to him in cross-examination that if Golden Luck procured the same stock, he would not come to Australia again; he said that because the stock would not always be the same, he would need to check exactly what was needed.
Mr Tany further said that whilst he intended to open one new store a year in Indonesia, this would be done by franchising the new stores, and he expected that he would only have to spend two days a week managing his existing business of Lampung Sport and Music. He said that he would like to live in Australia in the future.
Mr Tan also gave evidence. He confirmed the history of the negotiations that led to Mr Tany’s acquiring an interest in Indomitra and Golden Luck Trading Pty Ltd, and his payment for that interest. He also confirmed that Golden Luck and Indomitra had worked cooperatively and intended to make a further shipment of office equipment after the hearing before me had concluded. He thought that there was an opportunity to expand the business through the involvement of Mr Tany, as this would enable them to expand their sales outside Jakarta and to affect sales in Sumatra. Mr Tan confirmed that Mr Tany was a reputable and successful businessman, whom he had known for many years and whom he trusted.
Mr Tan said that Mr Tany would have the role of growing their business in Indonesia, and he would need to be in Indonesia for that purpose. He (Mr Tan) was to be responsible for purchasing the stock in Australia, but subject to obtaining approval from Mr Tany. Mr Tan also said that when Mr Tany was in Australia, he would go to look at stock in order to approve its purchase. Mr Tan further said that if Mr Tany came to Australia more, his (Mr Tan’s) “burden” would be less, and he was hoping Mr Tany would take over from him as he was getting older.
Legislation
Section 134 of the Act provides relevantly as follows:
“(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.
(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).
…
(10)… 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.”
Consideration
The present matter differs from the review of a decision relating to whether an applicant is entitled to some benefit or licence, where facts or events occurring after the reviewable decision was made, and prior to the Tribunal making its decision, can properly be taken into account. The decision under review is a cancellation decision, and so my review of that decision involves considering whether that decision was the correct or preferable decision when it was made. Subject to the qualification referred to in the succeeding paragraph, I consider that I should confine my consideration to material that relates to relevant events or matters occurring up to, but not after, the date of cancellation of the visa. I may, of course, consider the evidence now before me, and I am not limited, in finding the relevant facts, to the evidence that was before the primary decision-maker when the decision under review was made, that is, on 19 August 2003. The foregoing principles emerge from the decisions of the Tribunal in Re Griffith and Migration Agents Registration Authority [2001] AATA 240 at [39] and [41]; Re Haman & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113 at [52]; and Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [8] to [14], and the authorities analysed in those decisions.
However, I consider that I may properly have regard to events which happened after the date of cancellation of the visa to the extent that the relevant criteria in s 134 of the Act require the decision-maker to consider prospective issues. The Tribunal reached this conclusion in Re Permana & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 802 at [15]. In that matter Member M J Allen pointed out that an eligible business is defined in s 134(10) of the Act in terms of whether a business “will” result in certain types of outcomes, and similarly, s 134(5) involves considering whether extreme hardship “would” result to another person who is a member of the family unit of the holder of the cancelled business visa. And if an applicant asserts (as Mr Tany does in the present matter) that as at the date of cancellation of the visa, he or she had the intention contemplated by s 134(1) and (2) as to obtaining an ownership interest in, or participating in the management of, or continuing to make genuine efforts in relation to those matters, then, in my view, subsequent events would be relevant to determine whether or not that intention existed as at that date.
The approach in the preceding paragraph is consistent with common law principles relating to the assessment of damages, where courts commonly have regard to events or developments between the date of the injury and the date of the trial which are relevant to the proper assessment of damages, even though the cause of action is complete at the time of the injury, and the plaintiff is thereupon entitled to have the damages assessed : see Luntz Assessment of Damages for Personal Injury and Death 3rd Ed. (1990) par 1.4.1, and the cases there cited, including in Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 at 431, where Lord Macnaghten said that an arbitrator should:
“… avail himself of all information at hand at the time of making his award which may be laid before him. Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?”
Does s 134(2) apply?
In the present proceedings it is appropriate first to consider whether the proscriptive provisions of s 134(2) of the Act apply in the circumstances of the present matter. If I am satisfied of the matters referred to in that subsection, then I must not cancel Mr Tany’s business visa. I will consider each of the paragraphs of s 134(2), and Mr Tany’s involvement in his two business ventures, in turn.
Section 134(2) involves a consideration of whether Mr Tany has made genuine efforts in relation to the matters referred to in the three subparagraphs of that subsection. Section 134(3) provides that any or all of a number of enumerated matters may be taken into account in considering whether the visa holder has made the genuine effort referred to in s 134(2). In Yam (supra) the Tribunal thought that the word “genuine” and the matters mentioned in s 134(3) showed that there must be a level of effort in relation to the relevant matters beyond that which is purely superficial or token, that the applicant himself or herself is the person who must have made the genuine efforts, and that relevant efforts which are genuine should not be rejected by virtue of s 134(3) simply because they fall short of the examples given in that section.
The Department of Immigration and Ethnic Affairs has issued an instruction to be used with reference to ss 134 – 137 of the Migration Act, namely Migration Series Instruction 133 (“MSI – 133”). Clause 4.5 contains notes to guide decision-makers as to the interpretation of s 134(3) of the Act. Clause 4.5.1 sets out the provisions of s 134(3), and then includes a series of notes to be read with each paragraph of s 134(3), except for par 134(3)(i). I will refer below to s 134(3) and to these notes as appropriate. Clause 4.5.2 of MSI – 133 is helpful in considering the application of s 134(3). It reads as follows:
“While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled. The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis. For example, while the factors listed in 4.5.1 above may be indicative of “genuine effort”, lack of them will not necessarily be decisive. The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made “genuine effort”. A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.” (exhibit A1, T11, page 33)
In referring to MSI – 133, however, I also bear in mind the authorities on the use which may be made of policy instructions, as helpfully summarised by the Tribunal in Yam (supra) at [48] to [51]. That is, although such instructions are not binding on the Tribunal, there is good reason why they should be applied in the interests of good and consistent administration, but no weight should be given to the instructions where they are clearly more restrictive than the terms of the Act itself; and when a statutory discretion is exercised by a decision-maker, that person must take into account all matters relevant to the exercise of the discretion.
Has applicant made genuine effort to obtain substantial ownership interest in eligible business in Australia (par 134(2)(a))
Ms McGrath contended on behalf of Mr Tany that his involvement with Cybus Computers satisfied the requirements of par 134(2)(a) of the Act. I am satisfied that Mr Tany had made a genuine effort to obtain a substantial ownership interest in Cybus Computers. Having regard to the evidence referred to in paragraph 15 above, I find that Mr Tany decided to withdraw from the business as he did not want to put more money into it to meet its accruing losses. I further consider (notwithstanding the respondent’s argument to the contrary), that that business was an “eligible business” within the meaning of the subsection, in that, the business was resulting, or would result, in the maintenance of employment in Australia, being one of the criteria included in the definition of “eligible business” (see par 134(10)(b)). The financial records of the business, which were annexures to exhibit A2, showed that Cybus Computers paid wages in the years ending 30 June 2000 and 30 June 2001, although curiously not in the year ending 30 June 2002. However, the business was continuing to operate at the time of the visa cancellation, and it is likely that it continued to provide employment for one or more persons involved in its retail premises, as well as utilising some professional and other external services.
Ms McGrath further contended that Mr Tany’s involvement with the office equipment business also satisfied the requirements of s 134(2). Ms Nguyen for the Minister conceded that this business was an eligible business. On the evidence before me, Mr Tany had entered into discussions with Mr Tan prior to the date of cancellation of the visa, and entered into a verbal agreement to acquire Ms Siswati’s interest soon after that date, in September 2003. As at the date of cancellation of the visa, Mr Tany had identified his prospective partners for this proposed business, and I may take this into account under par 134(3)(b) (which refers to the existence of partners for the business proposals). There is no evidence as to how much (if any) of the purchase price paid to Ms Siswati related to the Australian portion of the office equipment business. It appears from the information provided to me as to the issue of shares made by Golden Luck to Mr Tany (which did not occur until after the conclusion of the hearing) that Mr Tany only paid $10 for his one-third interest in Golden Luck, so that moneys paid by Lampung Sport and Music to Mr Suganda on behalf of Indomitra (see paragraph 21 above), and which were used by Golden Luck to fund the purchase of office equipment sent to Indonesia, must have been paid to Golden Luck by way of a loan. On the state of the evidence before me I am not satisfied that Mr Tany has made a genuine effort to obtain a “substantial ownership interest” in Golden Luck. I refer in this regard to Re Wen-Yao Liu & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1397 at [20] to [23], where Senior Member McCabe pointed out that “ownership interest” does not include loans made to a business.
It does not matter for the purposes of s 134(2)(a) that Mr Tany had sold his interest in Cybus Computers prior to the date of cancellation of his visa. This is because under par 134(3)(f) I can take into account the value of ownership interest in eligible businesses in Australia that are, or have been, held by Mr Tany, and I am not restricted to a consideration of his involvement with Golden Luck. Further, under par 134(3)(g) I can take into account business activity that is, or has been, undertaken by Mr Tany. By the date of cancellation of his visa, Mr Tany had invested $30,000 for a 50 per cent interest in Cybus Computers, and he had been involved with that business for more than three years. Having regard to the above matters, I am satisfied that as at the date of the cancellation of the visa, Mr Tany had made a genuine effort to obtain a substantial interest in an eligible business in Australia.
Has applicant made genuine effort to participate in requisite manner in management of business (par 134(2)(b))
It is next necessary to consider whether Mr Tany made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business of Cybus Computers, within the meaning of par 134(2)(b). In Yam (supra) at [93] and [94] the Tribunal reviewed a number of authorities as to the meaning of this paragraph, and it follows from those authorities that the reference to the “day-to-day” management of the relevant business requires participating in the management of the business on a continuous and regular basis, but not on a daily basis. Nevertheless, it seems to me that, depending on the nature of the relevant business in question and its management needs, this requirement of s 134(2)(b) could generally be more readily satisfied if the relevant participation occurred with a reasonable degree of frequency.
The question also arises as to whether the participation in the management of the business must take place in Australia. In Wen-Yao Liu (supra), Senior Member McCabe, after reviewing a number of earlier Tribunal decisions, said at [34] and [35]:
“The question of whether spending too little time in Australia is indicative of a failure to actively engage at a senior level in the day-to-day management of the business (and if so, to what extent) is a vexed one. …
To my mind, at least the following factors must be examined:
(a)What is the amount of time the visa holder was absent from Australia?
(b)Having regard to the nature of the eligible business, is the amount of time spent overseas reasonably necessary for its success? (i.e. the Re Dhanjal and Re Widjaja situation)?
(c)To what extent did the visa holder maintain communication with the eligible business that indicates he/she was actively participating at a senior level in its day-to-day management?
(d)Finally it is proper to examine whether the visa holder had any significant business or other interests in the country in which he/she resided, that would prevent him/her from actively participating at a senior level in the day-to-day management of the eligible business (i.e. the Re Tang and Re Huang situation).”
In Re Jo and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 394, Member M D Allen made the following helpful observations.
“33. I agree with the views expressed by Senior Members Muller and Allen and Deputy President Wright that the business skills visa provisions of the Act are designed to permit persons to migrate to Australia and to take up residence in this country. However, I do not believe that it can be said that the Act demonstrates a requirement that the visa holder become ordinarily resident in Australia immediately in the sense that he or she spends the majority of his or her time in this country, only taking trips overseas from time-to-time. A number of factors have influenced that conclusion. In the first place, there is nothing in the documentation provided to me concerning the application made by the applicant for his visa (S1 – S4) that indicates that the Australian government had any requirement that overseas businesses be disposed of or the applicant’s involvement in them scaled down. Specifically, the 24 months survey form that is used by the government to obtain information from visa holders asks the question (in section 7): “are you still actively involved in a business outside Australia?” and contains the statement: “note that there is no expectation or requirement that you discontinue any business outside Australia” … Second, the MSI - 133 at cl 4.5.1, when dealing with the issue of what constitutes “genuine efforts” in relation to the establishment of a business and involvement in its management, refers to whether or not the visa holder has been physically present in Australia for more than six months since first arrival. Bearing in mind that a cancellation decision will often be made between three and three and a half years after the first arrival, an expectation that the visa holder may have spent only six months in Australia suggests that, so far as the respondent is concerned, the visa holder is not expected to spend the majority of his or her time in this country – and may indeed spend as little as 15% of the total time between first arrival and cancellation. Finally, I note that s 134(1)(a) specifically refers to an interest in an eligible business in Australia but s 134(1)(b) does not specifically require the active participation in the management of that business to occur in Australia. It would have been very easy for Parliament to have specified in s 134(1)(b) that the management activities must occur in Australia if that had been the intention.
…
36. In the circumstances, and although I am very conscious of the desirability of consistency of decision-making in this tribunal, I consider that the views expressed in cases such as Huang, Ong and Ng, to the extent that they require only a person’s management activities in Australia to be considered for the purposes of determining whether a person has been actively involved in the senior management of an Australian business, to go too far and beyond that which the Act requires. In my opinion activities undertaken outside Australia can also be taken into account if they can be directly related to the management of the Australian business. Putting it another way, once it is established there is an eligible business in Australia, then in my opinion the management activities in relation to that business can take place either in Australia or overseas.”
In Yam (supra) at [95] the Tribunal said that it did not agree that at present, the Act requires that the senior level day-to-day management of an eligible business, or a business a person is seeking to develop into an eligible business, must take place in Australia, and cited Re Widjaja and Minister for Immigration and Multicultural Affairs [2003] AATA 380 at [40], and Jo (supra) at [33] in support of this proposition. I agree with the conclusions reached in those matters.
By virtue of par 134(3)(d), I may nevertheless take into account the period or periods during which Mr Tany has been present in Australia. In the notes in MSI – 133, reference is made to “physical presence in Australia for more than six months since first arrival as a Business Skills class migrant” (exhibit A1, T11, page 19). However, this period is not referred to in the Act, and for the reasons mentioned in paragraph 36 above, I think that I should disregard this aspect of the instructions. The periods during which Mr Tany has been present in Australia from when he was granted his Business Skills visa until his withdrawal from Cybus Computers are set out in paragraph 13 above. In each case he was in Australia for comparatively short periods ranging from seven days to a maximum of 34 days, with a total presence in Australia of 90 days over the period of a little over three years and seven months from the grant to the cancellation of his visa. Subject to other relevant considerations, this counts against Mr Tany in considering whether he satisfied the requirements of par 134(2)(b).
There was no evidence before me as to what were the specific requirements for actively participating at a senior level in the day-to-day management of Cybus Computers. This issue is important in considering the application of par 134(2)(b). In Jo (supra) the Tribunal referred to the relevance of considering the nature of the activities of the business under consideration. The Tribunal said:
34. These provisions must, in my opinion, be interpreted in a way that accords with commercial reality and modern business practices. Businesses having different characteristics will present a wide variety of business management issues that will influence the type, extent and geographic location of management activities. For example, a business exporting products from Australia that involves the collection of Australian products from a large number of suppliers for delivery to a single purchaser overseas may necessitate the managers of that business spending the majority of their time in Australia managing the supply process. On the other hand, a business that involves products that are supplied by a small number of Australian suppliers for delivery to a wide variety of purchasers in a foreign country may necessitate a much greater emphasis on the marketing of the product in the foreign country.
35. It must also be remembered that modern means of travel and communication permit a business to be managed and strategically directed from almost anywhere in the world. The emphasis in s 134(1)(b) is on senior management rather than on what might be called day-to-day administrative tasks under direction from a senior manager. I agree with the comments of Member Carstairs in Re Lau & Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703 that management input at a senior level by an experienced business person will often be intangible, and may involve ideas and planning, as much as researching products, securing orders and suppliers and transacting shipping. As Hill and Carr JJ observed in Puzey in a slightly different context at [47] “business does not mean being busy.”
Cybus Computers was a small retail business operating in shop premises in suburban Melbourne, with Mr Barry Kwok working as its manager, and some part-time staff, at least for part of the period while Mr Tany was involved in the business. It was a domestic business. It did not depend on anyone going overseas to source supplies or attract customers. Whilst Mr Tany was consulted about the selection of some but not all stock, there is no evidence that he became involved in the sourcing of stock or negotiating the terms of its supply, except for his arranging to procure accessories for computers which came from Singapore. Mr Tany had clearly been concerned about Mr Kwok’s management of the business, but did not require his removal from that position, and deferred to his partner in this regard. Further, there is no evidence that he became involved in the marketing of the business or introducing customers to the business. I think that taking into account the nature of the business of Cybus Computers, the foregoing matters were essential issues for its proper management, and I am not satisfied from the evidence before me that Mr Tany was participating in these matters on a regular basis to an extent or in a manner sufficient to satisfy par 134(2)(b).
Further, it appears that Mr Tany’s principal communications were in the main not with the manager of the business, but with the person concerned with the administration and financial aspects of the business, namely Ms Lee, the wife of the manager. Mr Tany’s communications were at least in part to monitor the financial position of his investment.
From Mr Tany’s evidence it appears that during the relevant periods he was heavily involved in expanding the business of Lampung Sport and Music by opening further outlets in Sumatra. It seems likely that this activity would have restricted the amount of time he had available to deal with the affairs of Cybus Computers. In view of this and the matters referred to in paragraphs 42, 44 and 45 above, I am not satisfied that Mr Tany’s role with Cybus Computers met the requirements of par 134(2)(b).
In case I am wrong in my conclusion that Mr Tany’s interest in the office equipment business did not constitute the making of a genuine effort to obtain the requisite interest in an eligible business in Australia, there is no evidence that he had made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business prior to the cancellation of his visa, as required by par 134(2)(b). At most, it appears that there had been discussions prior to that date about Mr Tany acquiring the interest of Ms Siswati in the office equipment business. No doubt Mr Tany actively investigated the business following the commencement of those discussions, but there is no evidence that he was in any way involved in the management of the business before the time when the parties entered into a verbal agreement whereby he was to acquire an interest in the business. However, this did not happen until September 2003, which was after the visa had been cancelled.
For all of the above reasons, I am not satisfied that Mr Tany has met the requirements of s 134(2)(b).
Did applicant intend to continue to make the requisite genuine efforts (par 134(2)(c))
Finally, I consider the issues raised by par 134(2)(c). As at the date of the cancellation of the visa, Mr Tany had withdrawn from Cybus Computers, and he clearly did not intend to continue to make the genuine efforts in relation to the obtaining of an ownership in or the management of that business that are required by par 134(2)(c). Paragraph 134(3)(i) deals with the situation where a person no longer holds the requisite interest in a particular business or no longer participates in the requisite way in its management. However, this paragraph applies where a determination of whether a person “has made” the genuine effort referred to in s 134(2), and does not apply to par 134(2)(c), which involves a determination of the person’s intention as to his or her future conduct. Having regard to Mr Tany’s withdrawal from the business of Cybus Computers prior to cancellation of his visa, I am not satisfied that as at the cancellation date, Mr Tany intended to make the requisite genuine efforts required by par 134(2)(c) in relation to that business.
If notwithstanding my above findings Mr Tany’s involvement with the office equipment business is relevant, then even if one looks at the events that happened after the visa cancellation, I am not satisfied that Mr Tany has participated in the management of that business in the manner contemplated by par 134(2)(b), or that he intends to continue to do so, at least in the short term. The relevant business in Australia is the business being conducted by Golden Luck. Its role in the business venture is to procure suitable office equipment for export to Indonesia. It is clear that Mr Tany will play a very important role in finding customers for the office equipment in Indonesia, and identifying office equipment for which there is a market in Indonesia. However, those activities will be carried out in Indonesia by Indomitra, and not Golden Luck. In my view, Mr Tany’s activities in Indonesia in identifying and ordering suitable goods to be exported from Australia, or visiting Australia periodically to inspect stock, is not sufficient to constitute participating at a senior level in the day-to-day management of the business of Golden Luck. Accordingly, having regard to the nature of Mr Tany’s involvement thus far with Golden Luck, I am also not satisfied on the evidence before me that Mr Tany intends to continue to make the genuine efforts that are required in order to satisfy par 134(2)(c).
Exercise of Discretion Under Section 134(1)
For all of the above reasons, I am not prevented from cancelling Mr Tany’s visa by virtue of s 134(1), and it is appropriate to consider the issues raised by s 134(1).
It was common ground that as at the cancellation date, Mr Tany had not satisfied pars (a) or (b) of s 134(1) of the Act. I am also not satisfied that as at that date Mr Tany intended to acquire a substantial ownership interest in, or to participate in the requisite manner in the management of, an eligible business in Australia, namely the business of Golden Luck, having regard to later events, and the paucity of his equity investment in Golden Luck (see paragraphs 38 and 52 above). Further, for the reasons referred to above, I am not satisfied that Mr Tany intended to utilise his skills in actively participating at a senior level in the day-to-day management of that business. This means that Mr Tany also does not meet the requirements of par (c) of s 134(1).
In the above circumstances, there is a discretion under s 134(1) to cancel the business visa.
As Deputy President Hotop pointed out in Re Haman (supra) at [60] neither the Act nor MSI – 133 provides any specific guidance in relation to the considerations that may or may not properly be taken into account in the exercise of the discretion to cancel a business visa. The Deputy President did, however, refer to the pro-forma notice of intention to cancel a Business Skills visa contained in Attachment 2 to MSI – 133. A copy of Attachment 2 to MSI – 133 was attached to the Minister’s submissions in the present matter. The pro forma notice invites the visa holder to comment on a number of matters provided for in s 134 of the Act, together with certain additional matters such as:
the length of time spent in Australia since the visa holder’s initial arrival in Australia;
the degree of hardship which may be caused to Australian citizens or permanent residents if the visa were cancelled;
any unreasonable hardship the visa holder might suffer if the visa were cancelled;
the visa holder’s ties (including family, social and business ties) to other countries;
the circumstances in which the ground(s) for cancellation arose;
the seriousness of the grounds for cancellation; and
the visa holder’s behaviour in relation to the Department, including the effort made to provide information to the Department when reasonably requested to do so under s 137 of the Act.
I agree with Deputy President Hotop that the factors identified in the notice of intention appear to be relevant factors to take into account in the exercise of the discretion under s 134(1). The inclusion of this document as an attachment to MSI – 133 is an indication that these matters can be used as guidelines issued to decision-makers when exercising the relevant discretion. Of course, the exercise of discretion should not be restricted to those matters.
In the present matter, Mr Tany did not satisfy the requirements of s 134(1) at the time of the visa cancellation. He has spent little time in Australia since being granted his business visa. He withdrew from his first business venture, and on my findings his involvement in the Australian business of the new project in which he has invested will be limited, and is likely to involve, in the main, activities in Indonesia, not Australia. There is no evidence that the cancellation of his business visa will result in any undue hardship to Australian citizens or permanent residents or to Mr Tany himself. Mr Tany has continuing family, social and business ties in Indonesia. In addition, it was not disputed that Mr Tany failed to provide information requested of him by the Minister’s Department in a letter dated 20 August 2002 (exhibit A1, T39, page 395). This letter was not in the form of Attachment 2 to MSI – 133, and constituted a notice of intention to cancel the visa as required by s 135 of the Act. It expressly drew Mr Tany’s attention to the effect of s 134 and the Minister’s power to cancel his business visa, and gave him an opportunity to provide information and make representations to the Department. Counsel for Mr Tany submitted that he has owned an apartment in Melbourne for a number of years, but it appears that this has mainly been used by his children while they have been studying in Australia.
In considering the exercise of the discretion conferred by s 134(1) it is also relevant in my view to bear in mind the purpose of a business visa, as explained by Deputy President Muller in Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656. He said (at [6]):
“The relevant legislation is contained in the Migration Act 1958. It is directed towards overseas business people who wish to use their business skills to establish a significant business in Australia with a view to providing employment opportunities for Australians, export markets for Australian goods and introducing new technology to Australia (among other aims). A Business Skills visa is designed to allow the overseas business person to travel to and from Australia and to live in Australia while conducting the business. It envisages that the holder of such a visa will acquire a significant interest in the Australian company and play a significant role in the day-to-day management of the company. It also envisages that the business person will probably wish to have close family members accompany them while they live in Australia. Hence the provisions of secondary visas for family members.”
Recent decisions of the Tribunal have not agreed with the Deputy President’s conclusion in that case that the requisite management of an eligible business must take place in Australia. However, the above passage should in my view be born in mind when deciding whether to exercise a discretion to cancel a visa. It would generally count against the visa holder, when considering the exercise of the discretion to cancel the visa, if the visa holder has not used the Business Skills visa in the manner contemplated by the grant of such a visa. On my above findings, that is the position in this case.
For the above reasons, I consider that this is an appropriate matter for the exercise of the discretion to cancel the visa.
Decision
I affirm the decision under review.
I certify that the 61 preceding paragraphs are a
true copy of the reasons for the decision herein
of Deputy President D G Jarvis
Signed: ....................................................................................
N. Quirke Associate
Date/s of Hearing 23 and 24 September 2004
Date of Decision 20 January 2005
Counsel for the Applicant Ms J McGrath
Solicitor for the Applicant McDonald Steed McGrath
Counsel for the Respondent Ms Luu-Nguyen
Solicitor for the Respondent Australian Government Solicitor
3
8
0