Re Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs - [2003] AATA 380

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [2003] AATA 380

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2001/1551

GENERAL ADMINISTRATIVE DIVISION

Re: EFFENDY WIDJAJA

Applicant

And: MINISTER FOR IMMIGRATION
AND MULTICULTURAL AND
INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal: Mr W.G. McLean, Member

Date: 28 April 2003

Place: Melbourne

Decision:The Tribunal sets aside the decision under review and remits the matter to the respondent with the direction that the applicant’s business skills visa should not be cancelled under s.134 of the Migration Act 1958.

(sgd) W.G. McLean
Member

MIGRATION AND CITIZENSHIP — business skills visa subclass 127 – cancellation – whether applicant has a substantial ownership interest in eligible business – whether applicant has utilised skills in actively participating at a senior level in the day‑to‑day management of business – decision set aside

Migration Act 1958 ss.134, 135

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

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

Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103

Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656

Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178

REASONS FOR DECISION

28 April 2003 Mr W.G. McLean, Member

The Tribunal considered an application from Mr Effendy Widjaja (the applicant) for the review of a decision by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) made on 2 November 2001. The respondent decided to cancel the applicant’s subclass 127 business skills visa.
The applicant was represented by Mr L. Boccabella, of counsel, and the respondent was represented by Mr T. Fell, a solicitor from the Office of the Australian Government Solicitor. The applicant attended the hearing and gave sworn oral evidence. Mr Siew Tang Ooi also gave sworn oral evidence for the applicant.
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act1975 (the T documents) and other documentary exhibits numbered A1 to A6.
The applicant was born in Indonesia on 24 November 1961. He applied for and was granted a subclass 127 business skills visa in Indonesia on 6 May 1998. On 18 July 1998, the applicant initially entered Australia. On 2 November 2001 the respondent notified the applicant in writing of the decision to cancel his business skills visa. In an application to the Tribunal for the review of the respondent's decision, which was signed by the applicant on 30 November 2001, the applicant declared that he had received the respondent's notice to cancel his visa on 19 November 2001. The applicant’s business skills visa expires on 6 May 2003.
It is noted that on 2 November 2001 the respondent also decided to cancel the business skills secondary visas held by the applicant’s wife, Ms May Lian Audrey Sng and their children, Liauw Kang Kai, Liauw Jun Kai and Liauw Ying Zheng. At the date of the commencement of the hearing on 17 February 2003, the Tribunal had not received applications from Ms Sng and her children to review the respondent's 2 November 2001 decision to cancel their secondary business skills visas. Accordingly, that decision is not before the Tribunal for review. The secondary visa holders are said to have been in Australia for a total of 13 days over the 3½ years approximately from the date that their visas were granted until the date of cancellation by the respondent.
The applicant resides with his wife and children at 38 Jalan Baiduri, Singapore. He said in evidence at the hearing that he also has another residential address at 47 Buni, Jakarta, Indonesia. It is an agreed fact that between the date of arrival in Australia on 18 July 1998 and the date of visa cancellation on 2 November 2001, the applicant had been in Australia for a total of 48 days.
On 6 January 2000 a company was incorporated in Victoria named Musica Entertainment Pty Ltd (Musica Entertainment). The historical extract taken from the records of the Australian Securities and Investments Commission (ASIC) on 29 November 2001 shows the following for Musica Entertainment:
Registered Office:  Unit 2, 14 Balmoral Avenue, Springvale, Vic
Principal Place of Business:      27A Sackville Street, Collingwood, Vic
Directors:  May Lian Audrey Sng
Effendy Widjaja
Members:  May Lian Audrey Sng holds 1 ordinary share
Effendy Widjaja holds 1 ordinary share
Total shares issued — 2 ordinary shares
Also on 6 January 2000 a company was incorporated in Victoria named Crown Music Publishing Pty Ltd (Crown Music). The historical extract taken from the records of ASIC on 29 November 2001 shows the following for Crown Music:
Registered Office:  27A Sackville Street, Collingwood, Vic 3066
Principal Place of Business:      As above
Directors:  Siew Ooi
Effendy Widjaja
Secretary:  Siew Ooi
Members:  Musica Entertainment holds 1 ordinary share
OOI Music Pty Ltd (OOI Music) holds 1 ordinary share
Total shares issued — 2 ordinary shares
Also on 6 January 2000 a company was incorporated in Victoria named Crown Records Pty Ltd (Crown Records). The historical extracts taken from the records of ASIC on 29 November 2001 shows the following for Crown Records:
Registered Office:  27A Sackville Street, Collingwood, Vic
Principal Place of Business:      As above
Directors:  Siew Ooi
Effendy Widjaja
Members:  OOI Music holds 1 ordinary share
Number of shares issued — 1 ordinary share
Mr Boccabella informed the Tribunal that for the purposes of satisfying s.134(1)(a) of the Migration Act 1958 (the Act), that the applicant has "obtained a substantial ownership interest in an eligible business in Australia", the applicant was relying solely upon the business of Crown Records. The Tribunal drew Mr Boccabella's attention to the fact that the abovementioned extract for Crown Records from ASIC on 29 November 2001 shows OOI Music as the sole shareholder of Crown Records and that it therefore appeared that the applicant was not a shareholder of Crown Records at that time. After a brief adjournment, Mr Boccabella provided the Tribunal with a copy of a subsequent annual return of Crown Records for 2001 which was filed by Mr Ooi with ASIC on 28 February 2002. The annual return shows that at 28 February 2002 OOI Music held 1 share and Musica Entertainment held 1 share of the total 2 shares issued by the company. Mr Boccabella said that an error had occurred in the ASIC records when Crown Records was initially registered on 6 January 2000 and he produced Crown Records share register and original share certificates as documentary evidence that on 6 January 2000 Crown Records issued 2 shares, 1 held by OOI Music and 1 held by Musica Entertainment. The share register file of Crown Records contains a minute of the directors of the company dated 6 January 2000, confirming that 1 share was issued to Musica Entertainment and 1 share was issued to OOI Music by the company on that date. The Tribunal accepts the applicant’s explanation that an error was made on the ASIC extract dated 29 November 2001.
The applicant is not relying on Crown Music or Musica Entertainment for the purposes of satisfying s.134 of the Act and no financial statements for either of those companies were provided to the Tribunal for consideration in respect of this matter. The financial statements of Crown Records for the initial period ended 30 June 2001 show that at that date the company had not received any income from trading or any other source and had incurred administration costs of $490. The balance sheet at 30 June 2001 show a loss for the year of $490 producing a negative shareholders funds of $488 (i.e. $490 loss less $2 paid capital). The company had borrowed $57,899 from Musica Entertainment and had loaned $9000 to OOI Productions leaving cash on hand and at bank of $48,411. It appears from the financial statements of Crown Records for the year ended 30 June 2002 that the company commenced business during that year. At 30 June 2002 Crown Records had gross income for the year of $35,262 made up from trading $17,777, consulting fees $17,408 and interest $77. After administrative costs and wages totalling $54,920 the company had an operating loss of $19,658 for the year. Crown Records balance sheet at 30 June 2002 shows that, during the year the company purchased plant and equipment costing $320,044 and that Musica Entertainment had increased its loans to the company to $400,971. The company had a deficiency in shareholder funds of $20,146 (i.e. accumulated losses $20,148 less paid capital of $2). The cash on hand and at bank was $218.
As can be seen from the above ASIC extracts, Musica Entertainment has a paid capital of $2 of which one share of $1 is owned by the applicant. The other share of $1 is owned by the applicant’s wife, who is neither a party to nor a witness in these proceedings. The financial statements of Musica Entertainment were not provided to the Tribunal by the applicant, however the applicant gave evidence that he personally loaned moneys to Musica Entertainment to enable it to fund its loans to Crown Records. The financial statements of Crown Records at 30 June 2002 indicate that Crown Records had borrowed a total of $400,971 from Musica Entertainment at that date.
On 4 September 2002 the applicant made the following written statement:
…
I am the applicant in these proceedings. I have formed a joint venture which uses the corporate vehicle of Crown Records Pty Ltd ("Crown Records"). I am Co-director with Mr Siew Ooi. Mr Ooi has prepared a document which outlines the nature of this joint venture. I agree that that document describes the nature of our activities.
In or about June 2001, I invested over $300,000 into Crown Records which was used to purchase professional recording equipment, being an SSL engineer's mixing desk which is a professional 80 channel desk.
In the 12 months to June 2001, I injected a further $150,000 cash into the business.
As described in the accompanying documents Crown Records forms groups in order to produce commercial music for the pop music industry market in Australia.
In South East Asia, I am recognised as one of the pop music's industry leaders in marketing. Attached to this statement is my CV which gives my business background.
The joint venture of Crown Records merges to complementary talents. My Colleague Mr Siew Ooi is a talented production person, he is expert on the technicalities on making music and recording it and getting the music into performance.
I am an expert on marketing. The function of the business so far has been to form bands and ultimately record and perform their music. For this task Mr Siew Ooi's skills are dominant.
My role is to advise on marketing, to advise on the type of sound which will be successful in being marketed in Asia and to ultimately promote the bands in Asia in terms of their performances and records and music sales. Subsequently with the Asian success it could then be extended into North America, Europe market as well as the rest of the world.
At this stage my hands on role is to help form that sound. In this context I have been in regular contact with Mr Siew Ooi by telephone and on visits to Australia. Ultimately we approve all decision by consensus between myself and Mr Siew Ooi. In this sense no major decision is made without my approval. (At this point I do not wish to underplay Mr Siew Ooi's role, as a co‑joint venturer, similarly no major decision is made without his approval either.)
I also attach the following documents to this statement:
Crown Records accounts for the year ended 30 June 2002;
Various telephone records;
Various photographs of the bands and brochures on Crown Records.
Date: 4 September 2002 [signed Effendy. W]
EFFENDY WIDJAJA
On 6 September 2002, Mr Ooi made the following statutory declaration:
…
I, SIEW OOI of
In the state of Victoria, DO SOLEMNLY AND SINCERELY DECLARE that:
1.I am a joint venture partner of the Applicant.
2.Annexed hereto and marked with the letters "Folio 1" documents outlining the nature of the joint venture and a summary of the progress of the acts under our management.
I acknowledge that this declaration is true and correct and I make it in the belief that a person making a false declaration is liable to the penalties of perjury.

Folio 1

…
The purpose of this document is to provide a brief outline of the nature of the business that Mr Effendy Widjaja has started in Australia, namely; Crown Records and Crown Music Publishing (otherwise known as the Crown Companies). The Crown companies are a joint ventures between Musica Entertainment Pty Ltd and the 001 Music Group.
Vision
Crown Records/Crown Music Publishing will grow into a successful full service label similar to Jive, Mushroom, Arista, etc. Crown will be a world recognised provider of quality music product, and will also create employment and valuable exports for Australia.
Goals
Crown Records plans to release and promote three acts and acquire a number of external licenses in its first year of operation. The predominant genre will be pop music, where emphasis is placed on acts with strong mainstream image, radio friendly production and songs with strong lyrical and melodic content.
Crown, with the expertise of its team, hopes to position itself in the Asian market as a leader in presenting international acts that are tailor made for Asian tastes. These acts will also be highly marketable in the rest of the world.
Australia is a good base of operations for Crown as there is a ready pool of English speaking artists that have had a history of success throughout the world (Savage Garden, Men at Work, etc). Australia also has quality musicians and programmers that are in the top tier of their profession. In addition, Australia's proximity to the countries in Asia will enable acts to make more promotional appearances in the region compared with acts from Europe or the U.S.
The Crown Companies
1. Crown Records – a Record Label with two lines of business:
a) New Acts – Crown Records will A&R, sign and produce new acts. It will license its finished masters to distributors for manufacturing and marketing in the major Territories. It is anticipated that these artists will receive substantial development and marketing support from Crown Records.
b) External Masters – Crown Records will license finished masters from parties external to Crown. It will sub‑license these works to distributors for manufacturing and marketing in the major Territories.
Crown Records (ACN 091 112 506)
Business address:   27A Sackville St, Collingwood VIC 3066.
Postal address:       PO Box 1760 Collingwood, VIC, 3066
Tel:  +61 3 9416 1322
Fax:  61 3 9416 1379
2. Crown Music Publishing – a Music Publisher with two major aspects to its business:
a) Sign publishing (songwriters) contracts with artists contracted for release by Crown Records.
b) Sub-publishing of material by Crown Music Publishing. It is expected that Crown Music Publishing will potentially sub-publish to major publishers in various territories. Decisions on sub-publishing will be made by The Board.
Crown Music Publishing (ACN 091 112 499)
Business address:   27A Sackville St, Collingwood VIC 3066.
Postal address:       PO Box 1760 Collingwood, VIC, 3066
Tel:  +61 3 9416 1322
Fax:  61 3 9416 1379
PRODUCT OFFERING
Crown Records' primary product offering will be Australian acts selected for their worldwide marketability – focusing on Asia, USA and Europe. The secondary offering is Asian acts selected for worldwide marketability.
Marketing
Marketing in Asia will be primarily the role of Effendy Widjaya [sic]. Crown Records' acts will typically be test marketed in Indonesia, then promoted Asia‑wide. Once the act is successful in Asia, the acts will be introduced into other major territories (i.e. USA and Europe). If suitable, acts will also be initially released in Australia.
Manufacturing, distribution and promotion will be carried out by the licensees (i.e. major distributors).
BOARD OF DIRECTORS
The Board consists of Effendy Widjaja and Siew Ooi. Crown initially will employ one full time employee for administration and utilize outside contractors (engineers, producers, music managers) with the view to increase employees after the acts have completed their albums and are ready to be promoted.
Effendy Widjaja (Musica Entertainment) has had extensive experience in the music industry in Asia, having served as managing Director for BMG Music Indonesia for more than six years and running Musica Entertainment Indonesia, a very successful music and multimedia company. The principal role of Mr Widjaja is to undertake market research and create export opportunities for Crown Company acts and licenses in Asia. Due to his extensive network of contacts and experience in the region, Mr Widjaja will be responsible for all business negotiations in regard to Crown's music copyright exports. In addition, he will also advise on the suitability of the acts, their image and repertoire for the region.
Mr Widjaja through Musica Entertainment Pty Ltd (Australia) will provide start up capital of A$500,000 in the first two years of operations of the Crown Companies.
Siew Ooi (001 Music) has been responsible for many successful Australian acts in the fifteen years that he has been involve [sic] in music industry. He has worked with acts as diverse as John Farnham to Michael Hutchence. He was and still is manager and producer to successful Australian artist Merril Bainbridge and was solely responsible for breaking Merril's career in USA and the rest of the world, to date creating gross album sales worth in excess of 15 million dollars.
Mr Ooi will be responsible in selecting and signing the artist and overseeing the album production product packaging and publicity.
TO DATE, Crown has signed their first act, a two girl pop group named FLIRT and an album is presently been recorded. A four boy vocal group is also presently being developed in the recording studio. A joint venture with 001 productions to develop a 3girl group names sirens signed to BMG Music.

The applicant gave evidence that, after he had obtained a Bachelor of Business Administration degree in Canada in 1984, he returned to Jakarta, Indonesia to work in his family's music business named Pati Musica (Musica). Musica commenced operations in Indonesia in the early 1970s and at that time the applicant’s father and mother were managing the business. Following the death of the applicant’s father in 1979 the applicant’s brother joined Musica in 1980.
The applicant became the marketing director of Musica in 1984. Musica has a recording studio which is used for making master cassette recordings of popular Asian musical performances and arrangements. The applicant’s brother produces recordings of music in the studio and the applicant handles the marketing and distribution of the recorded music. Musica provides master cassette recordings to Asian recording manufacturers on a sub‑contract basis, and the manufacturers produce large volumes of end product disc cassettes that are marketed by Musica via selected Asian retail outlets. Musica also produces cassette duplications. Musica is said to be presently owned by the applicant and his mother and his brother.
In 1984 Musica retailed about 200,000 local Indonesian music cassettes each month involving about 20 to 30 recording artists. In 1988 Musica obtained a licence from BMG, one of the five major recording companies in the world, and were resultantly able to market in Indonesia certain BMG recorded international artists such as Elvis Presley, Whitney Houston, John Farnham, etc. BMG was previously known as RCA. In 1994 Musica entered into a joint venture with BMG which enabled Musica to also market local Indonesian talent via BMG's Malaysia and Singapore outlets. At present Musica is selling about 3 million recordings per annum via the BMG joint venture arrangement. In addition, Musica sells about 500,000 units per month or 6 million units per annum of its own recordings throughout Asia. Musica also owns a printing company to print labels for its retail cassettes, etc.

The applicant said that Musica occasionally brings artists to Indonesia to stage live performances, whenever their recorded music album is selling well. The applicant works with the artist's promoter to make sure the performance venue and the press coverage is satisfactory. The applicant contends that he resultantly knows what sound and type of music will market well in Asia. He explained that the rhythm and blues market in the Asian Pacific market is different to the Australian market, saying:
…
Yes, in the sense that Australia likes more catchy, newer sound, Indonesia is more older sound, but in order to cross over you need to blend this to meet –how to sell Australian market in Indonesia. Like we don't do too well with artists like John Farnham because they are actually more produced for Australia and maybe US. And Europe and they never look at Indonesian market.
…
Australia doesn't take Asian as a market so when they don't look at their target market, they will only focus Australia which has only 19 million population and they don't look at Asian on your neighbour, there is Singapore, Malaysia, Indonesia and Hong Kong, Korea that can be a market which they can sell a lot of good American or European products.
The applicant said that his "dream" is to produce international artists that can sell well across the Asian market. He believes that with proper production, marketing and promotion, Australian music performers and bands can be successful in Asia if Musica changes their style of music to the kind of music that will merchandise well throughout Asia. Accordingly, the applicant and Mr Ooi decided to form a joint venture between their Asian and Australian corporate interests, in order to endeavour to achieve this objective. As can be seen from the abovementioned ASIC historical extracts, Crown Records was incorporated on 6 January 2000 by Musica Entertainment (owned by the applicant and his wife) and OOI Music (representing Mr Ooi's interests).
The applicant and Mr Ooi are the directors of Crown Records. As can be seen from the financial statements of Crown Records at 30 June 2002, the company is funded by its paid capital of $2 and loans from Musica Entertainment of $400,971 at that date. Crown Records' place of business at 27A Sackville Street, Collingwood is owned by Mr Ooi and Mr Ooi resides at 27B Sackville Street, Collingwood. Crown Records has a studio equipped with plant and equipment costing $320,044 which was purchased secondhand from a studio situated in Kuala Lumpur some time around July 2001. The applicant is located in Indonesia fulfilling his demanding role as managing director, marketing of Musica and Mr Ooi is located at Collingwood, Victoria, operating his own separate corporate interests as a record producer. In conjunction with their business responsibilities arising from the different management roles they perform for Crown Records, they also jointly share and accept the responsibility for all major decisions affecting Crown Records, as the joint directors of that company.
Crown Records rents the studio equipment to Mr Ooi's company named OOI Productions, which is evidenced by the current asset – "Rental receivable from OOI Productions $3531" appearing in the balance sheet of Crown Records at 30 June 2002. Mr Ooi attends clubs, shopping centres and other venues in search of Australian musical talent. He records certain selected artists' performances on master demonstration tapes and sends the tapes to the applicant for his consideration in respect of their suitability or not for the Asian music market. If the applicant considers that a certain musical performance is worthy of consideration, he may submit the master tape to various Asian recording manufacturers for further consideration and production approval. The concept following production of the recordings is that the applicant shall market all musical recordings throughout Asia that are produced for Crown Records by the Asian recording manufacturers. The applicant said that Mr Ooi also organises the servicing, repair and replacement of studio equipment.
The applicant said that to the date of the cancellation of his business skills visa on 2 November 2001, Crown Records had sold only one batch of recordings in Australia, which was a single track made by an Australian group called Sirens. Crown Records has not sold any recordings in Asia to the date of the hearing, arising from the joint venture arrangement. The Australian marketing of the Sirens' single track was arranged by Mr Ooi via the Australian BMG Company representative. The applicant agreed with the respondent that Mr Ooi is running the business operations of Crown Records in Australia.
Mr Ooi's company, OOI Productions, absorbs all of the costs associated with the production of the master recordings of Australian artists unless the applicant approves the master recording as suitable for distribution in the Asian market. It appears from the evidence that at the time the master recording is approved by the applicant it becomes part of the Crown Records joint venture and all prior production costs incurred by OOI Productions to the date of acceptance by the applicant are then passed on to Crown Records. If the applicant does not approve the OOI Productions master recording as suitable for distribution in Asia by Crown Records, the master recording costs remain with OOI Productions. It also appears from the evidence, that at the date of the cancellation of the applicant’s business skills visa on 2 November 2001, Crown Records had not been required to absorb any costs associated with the recording of Australian artists for distribution in the Asian market in accordance with the joint venture arrangement. The applicant agreed that OOI Productions is taking a gamble that he may not approve an artist's master recording.
The applicant gave evidence about the substantial total amount of cost to date that has been absorbed by Mr Ooi and himself, regarding the suitability and recording of several Australian musical groups. Of the major groups considered to date by the applicant for distribution in Asia, the applicant said that he did not believe that the "Sirens" single recording, which was distributed in Australia by Crown Records, would sell in Indonesia.
The applicant is currently considering the recordings of other music groups such as "Mercury" for distribution in Asia and contends that it takes about a two and one half years lead time from the date that an acceptable artist is found, until it would be feasible to release their recording in the form of a CD in Asia. At the date of the cancellation by the respondent of the applicant’s business skills visa on 2 November 2001, Crown Records had not sold any recordings of Australian artists in Asia arising out of the joint venture arrangement.
Mr Ooi gave sworn oral evidence. He said that he holds a Bachelor of Economic degree majoring in marketing, from Monash University. He also has a Grade 8 Piano diploma from the London Music Board. Mr Ooi said that he had played in bands and had been involved in music from a child. He has worked at the highest level of the recording business in Australia for 15 years and was the in‑house producer for EMI records for about four years, where he was contracted to produce quite a number of acts for EMI.
Mr Ooi confirmed that he has a company named OOI Music Pty Ltd which he incorporated to enter into the Crown Records joint venture arrangement with Musica Entertainment. He also has another company named OOI Productions that carries out the production of records and also sub‑contracts, musicians, engineers, make up artists, dances, etc.
Mr Ooi said that he discovered an artist in Australia whom he manages and produces named Merril Bainbridge and that she had a number 1 recording in Australia, the USA and 15 other countries across the world. He took Ms Bainbridge to Asia on a tour and at that time he met the applicant. He said it was an "eye opener" the way that the music recording business was done in Asia, which was substantially different to the way business is conducted in Australia, the USA and London. He said that the applicant has unique skills in Asian music tastes and was willing to come to Australia and help Mr Ooi develop local musical artists and market Australian acts in Asia. Mr Ooi said:
…
To actually market an act properly, and let us give an example, to market a very successful act like say silver chair. To do the record it takes about a million dollars and to market it, it take probably another three million, maybe four, and often it is US dollars. But the thing about it is we – Mr Widjaja and myself decided that we will look for a lot of Australian acts, we will even give them an opportunity to develop in the studio, but we will not sign them and not press the button until we are absolutely sure that the entire Asian Pacific region is onboard.
…
Now I may like an act, but when I bring it to Mr Widjaja, he takes it to the other MDs. He comes back with feedback to say, no it is not quite right. Maybe we could tweak this. So I go away and tweak something. He takes it back, in the end he still gets a negative response.

Mr Ooi said that he would call the applicant the executive producer of Crown Records. He consults the applicant continuously regarding artists' performances, their music type etc and their suitability for Asian distribution. Mr Ooi has two programmers reporting to him because he manages the technical aspects of the business; one is employed by OOI Productions and one by Crown Records. Mr Ooi was asked whether he thought it was necessary realistically for the applicant to be in Australia to do his job with Crown Records, or whether it is a job that the applicant could do from overseas and he replied:

…
I can understand the last two years it wasn't necessary but as soon as we get this boy band off in June I think it will be very – it probably help if he were here more often but again it depends on what is required. … I think it is so vital that he is over there and going to all the different countries.

The following relevant legislation is provided by the Act:
134 (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).
…
(4)          Subject to subsection (5) and to section 135, if:
(a)the Minister cancels a person’s business visa under subsection (1) or (3A); and
(b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and
(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;
the Minister must cancel the other person’s business permit or business visa by giving written notice to that person.
…
(10)     In this section:
"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;
…
"ownership interest", in relation to a business, means an interest in the business as:
(a)a shareholder in a company that carries on the business; or
(b)a partner in a partnership that carries on the business; or
(c)the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts;
…
135(1)     Before cancelling a visa under subsection 134 (1), (3A) or (4), the Minister must give its holder a written notice:
(a)stating that the Minister proposes to cancel the visa; and
(b)inviting its holder to make representations to the Minister concerning the proposed cancellation within:
(i)if the notice is given in Australia—28 days after the notice is given; or
(ii)if the notice is given outside Australia—70 days after the notice is given.
The respondent provided the following written contentions of facts regarding the exchange of certain correspondence and information between the parties. The folio numbers refer to the T document page numbers:
…
4.           On 26 July 1998 the Applicant advised the Respondent of his change of address to PO BOX 1255, Booragoon Western Australia, 6145 [folio 81]. The Respondent acknowledged this letter on 5 August 1998 [folio 82] and provided another form for notifying change of address should the Applicant change address again in the future. The Respondent's letter also reminded the Applicant that it was a requirement of his visa to advise of any changes of address for the period of three years after he first arrived in Australia, and reminded him of his obligations to become involved in an eligible Australian business. This letter was returned to sender [folio 83].
5.           On 27 August 1998 the Applicant had a telephone conversation [folio 83] with a Departmental Officer who was then advised of a further change of the Applicant's address to 5 Paton Close, Winthrop, Western Australia 6154.
6.           On 28 August 1999 the Respondent wrote to Applicant [folio 84] and provided another form for notifying change of address should the Applicant change address again in the future. The Respondent's letter again reminded the Applicant that it was a requirement of his visa to advise of any changes of address for the period of three years after he first arrived in Australia, and reminded him of his obligations to become involved in an eligible Australian business. This letter was returned to sender.
7.           On 9 June 2000 the Respondent wrote to the Applicant [folio 85] and requested the completion of the 24 month survey required by the visa conditions prior to 14 August 2000. A reminder letter was sent on 23 October 2000 [folio 86].
8.           On 11 December 2000 the Applicant wrote to the Department [folio 87] advising that he "hoped" to complete the 24 month survey "by next week".
9.           On 3 July 2001 a delegate of the Minister decided that the Applicant had not been complying with the requirements of his visa. A Notice of Intention to Cancel under Section 134 of the Act was sent to the Applicant [folios 92-96] and to the Applicant's wife (whose letter also related to the Applicant's children) [folios 89-91], at the Paton Close address by Registered Post. This Notice explained that the Minister had not been able to make an assessment as to the Applicant's compliance and invited the Applicant to provide a response as to why his visa should not be cancelled. The letter stated that the closing date for the response would be 7 August 2001. These letters were returned to sender on 24 and 5 July 2001 respectively.
10.         On 2 November 2001 a delegate of the Minister decided to cancel the Applicant's visa. A Notice of Cancellation was sent to the Applicant and the Applicant's wife at the Paton Close address [folios 98-101 and 10-13]. The Applicant lodged the current application for review with the Tribunal on 30 November 2001 [folio 3-4].
11.         Records held by the Respondent indicate that between 18 July 1998 and 2 November 2001 the Applicant had spent a total of 48 days in Australia [folio 10].
…
17.         Subsection 135(1) of the Act requires that, prior to cancelling a visa under subsections 134(1), (3A) or (4), the Minister must give the visa holder a written notice stating that he proposes to cancel the visa and inviting the holder to make representations to the Minister. The visa holder had 28 days (in the present circumstances) in which to make such representation.
18.         Regulation 5.02A of the Migration Regulations, as in force at the time of the Notice of Intention to Cancel, prescribes the mode of service of a document relating to the proposed cancellation or cancellation of a visa under the Act that is to be given to the visa holder. Such a document may, insofar as here relevant, be given to the holder or former holder of the visa by sending it to the person's residential or business address last known to the Minister. Regulation 5.03 further provides that such a document, if sent within three days of the date of the letter, from a place in Australia to an address in Australia, is taken to be received 7 days after the date of the document. The Applicant is therefore taken to have received the Notice on 10 July 2001.
19.         Section 135(4) provides that if the time specified in the notice ends after the end of the period referred to in subsection 134(9), being three years after the Applicant entered Australia (in the present circumstance) the Minister must not cancel the visa if 90 days, commencing at the time specified in the notice, has elapsed. The Applicant entered Australia on 18 July 1998. The time specified in the Notice was 7 August 2001. The time specified in the Notice therefore ends after the period referred to in subsection 134(9). The visa was cancelled on 2 November 2001 within the 90 day time frame specified in subsection 135(4)(b).

The applicant does not dispute that he received the respondent's letter dated 9 June 2000 (Nº 7 of the above contentions) which was posted to him by the respondent at his last known address – 5 Paton Close, Winthrop, Western Australia, 6154 (Nº 5 of above contentions). The respondent's letter dated 9 June 2000 requested the applicant to complete and return within 28 days a "survey of Business Skills Migrant". The respondent wrote a follow up letter dated 23 October 2000 reminding the applicant that he had not returned his completed survey form and pointing out the following:

…
Dear Mr Widjaja
I am writing to you as you arrived in Australia under the Business Skills Class of migration. I would like to remind you to complete and return your Survey Of Business Skills Migrant - 24 Months. I wrote to you on 9 June 2000 advising that this was due on 14 August 2000. However, we have not yet received a reply.
Before you were granted your Business Skills Class visa, you signed a Declaration - Business Skills (Migrant) Class (form 926) agreeing to participate in surveys for three years after your initial arrival in Australia. This is a mandatory requirement of your visa and if you are unable to comply with your obligation, a case may be presented to the Minister who will decide whether your visa should be cancelled under the provisions of Section 134 to 136 of The Migration Act 1958.
Accordingly, could you please complete the enclosed Survey of Business Skills Migrants - 24 Months and return it to this office by 20 November 2000. You may also access this form from our Internet home page at allforms/pdf/1010.pdf. I have enclosed a pre-addressed reply envelope for your convenience, postage free within Australia.
If you require any further assistance, please contact me by telephone on (02) 6264 3847, or by facsimile on (02) 6264 2019, or at our e-mail address [email protected]. I look forward to receiving your form.

On 11 December 2000, the applicant wrote the following letter to the respondent:
…
I am sorry for the delay in replying your initial letter due to some misunderstanding with my migration lawyer who were supposed to help me to do it.
By the time I receieved your 2nd letter, there is a new form that is required and more information is needed, at the same time we have started business operation. Therefore, I have come from Melbourne to sort the company and the report required by you.
I hope by next week, I would be able to submit all the information required and some other information about my business in Australia which is in line with the initial intention.
Sorry for the inconvenience. Looking forward to hear from you.
The applicant gave evidence that he completed the requested Declaration - Business Skills (Migrant) Class (form 926) which was sent to him by the respondent on 9 June 2000 and said:
…
Actually, I did complete the 24 months survey and asked my secretary to send it here, when I was in Indonesia.
Somehow I guess I was away in Singapore and I didn't realise that she did not send it.

The applicant also recalled receiving the second reminder letter sent to him by the respondent on 23 October 2000 and said:

…
I complete it, and I remember – first I – no, no. I gathered. So I thought they were supposed to send it and then I tell my secretary to send it. That is what happened. After that the – after the – I was sent this letter.

He was asked why he never bothered to look into whether the survey was sent or not, and he replied:

…
No I didn't – I don't think she sent it, after I get the – the letter that my visa was cancelled, then I – I checked, my secretary, "did you sent it?" and then she sent it – I think she forgot to send it.

The applicant did not satisfactorily explain why the written notices of intention to cancel the business skills visa of himself, his wife and children dated 3 July 2001, and posted by the respondent by registered post at 5 Paton Close, Winthrop, Western Australia, had been returned to sender on 24 July 2001.
The applicant’s initial evidence was that "I didn't get any notice about the cancellation". As seen above, in response to the question why he never bothered to look into whether the survey was sent he said, "…after I get the – the letter that my visa was cancelled". Also the applicant did not satisfactorily explain why, on his application to the Administrative Appeals Tribunal for review (T4) which he signed, he declared:
…
Date the decision was made "2/11/2001"
Date you received the notice of decision "19/11/2001"

The Tribunal rejects the applicant’s evidence that he did not receive the written notice of decision to cancel his business skills visa under s.134 of the Act, sent to him by the respondent on 2 November 2001. The Tribunal finds that the respondent mailed the applicant a notice of intention to cancel his business skills visa to the address last known by the respondent in accordance with Regulation 5.02A of the Migration Regulations on 3 July 2001, and that that letter is taken to have been received seven days after that date in accordance with Regulation 5.03. The applicant is therefore found to have received the notice of intention to cancel his business skills visa on 10 July 2001, pursuant to s.135(1) of the Act. The Tribunal also finds that the visa was cancelled on 2 November 2001 within the 90‑day period specified in ss.135(4)(b) of the Act.

The Tribunal has adopted the principle of administrative review of having regard to all of the facts and circumstances that were submitted by the parties to have occurred up to the date of the hearing. The Tribunal is mindful that ss.134(2)(c) of the Act prescribes that the Minister must not cancel a business skills visa if the Minister is satisfied that the holder intends to continue to make a genuine effort to comply with ss.134(2)(a) and ss.134(2)(b) of the Act and, ss.134(3) of the Act specifies certain matters that may be taken into account in determining whether a person has made a genuine effort. The Tribunal shall also bear in mind the principles propounded by Justice Davies in the decision of Freeman v Department of Social Security (1988) 19 FCR 342 referred to in the following paragraph taken from the decision of Deputy President P.K. Handley on 13 January 2002 Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54:
…
32. Mr Chami, for the Respondent, drew the Tribunal's attention to the decision in Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342, where Justice Davies drew a distinction between decisions to cancel a pension or benefit and decisions in respect of a refusal to grant a pension or benefit. In the case of a decision to cancel, the Tribunal is limited to a consideration of events up to the time of the primary decision, whereas in the case of a decision to refuse the grant of a pension or benefit, the Tribunal is not so limited. Mr Chami referred to a number of decisions in which this approach had been followed including two recent decisions by the Tribunal in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783.
The applicant’s business skills visa expires on 6 May 2003 which is five years from the date it was granted on 6 May 1998. Subsection 134(8) of the Act provides the following relevant legislation in respect of the decision on 2 November 2001 by the respondent to cancel the applicant’s visa:
134(8) A cancellation under this section has effect on and from:
(a)if the person applies to the Administrative Appeals Tribunal for a review of the decision to cancel the visa—the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or
(b)if:
(i)the person’s visa was cancelled under subsection (4); and
(ii)the relevant person to whom paragraph (4) (a) applied has applied to the Administrative Appeals Tribunal for a review of the decision to cancel that person’s visa;
the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or
(c)the 28th day after the day on which the notice of cancellation is given to the holder of the cancelled visa;
whichever is the latest.

As a result of ss.134(8) of the Act, the applicant’s business skills visa continues to operate until its date of expiry on 6 May 2003 unless the decision under review is affirmed by the Tribunal 28 days prior to 6 May 2003. Accordingly, the applicant intends to apply for a subclass 155 five‑year resident return visa as soon as possible.

The respondent made the following concessions to the applicant during Mr Fell's closing submissions on 17 March 2003, subject to the Tribunal accepting that Musica Entertainment owned 1 Crown Records share on 6 January 2000. (Acceptance by the Tribunal that Musica Entertainment owned 1 share in Crown Records on 6 January 2000 is referred to earlier in these reasons for decision.)
(a)That Crown Records satisfies the eligible business definition prescribed by ss.134(10) of the Act,
(b)that the applicant has a substantial ownership interest in Crown Records,
(c)that in cognisance of (a) and (b) above the applicant has obtained a substantial ownership interest in an eligible business in Australia and accordingly satisfies the requirements prescribed under ss.134(1)(a) of the Act.
The respondent contends that its decision to cancel the applicant’s business skills visa on 2 November 2001 should be affirmed by the Tribunal because:
(i)the applicant is not utilising his skills in actively participating at senior level in the day‑to‑day management of Crown Records pursuant to ss.134(1)(b) of the Act;
(ii)that the Tribunal should take into consideration the periods which the applicant has been present in Australia pursuant to ss.134(3)(d) of the Act;
(iii)that the Tribunal should take into consideration the failure of the applicant to return a completed survey of business skills migrant form as requested by the respondent by letters dated 9 June 2000 and 23 October 2000. The respondent contends that the applicant failed to comply with a notice under s.137 of the Act, pursuant to ss.134(3)(h) of the Act.

The respondent referred the Tribunal to the decision of Deputy President B.J. McMahon in the matter of Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103. The supporting reasons for decision contained the following paragraph, number 25:

…
25. An examination of the items in the subparagraphs of subsection (3) indicates that none of the headings assist the Applicant in demonstrating that he has made the required genuine effort. The business activity has been minimal. There are no business proposals to which he can point. His investment is minimal. There is only the sketchiest evidence of any research undertaken to establish a business of any kind in Australia. Most importantly, however, the time during which the Applicant has been present in Australia (32 days in more than four years) indicates that there has not been a genuine effort to participate in day‑to‑day management of the business, nor is there likely to be any such participation in the future. There is no evidence that the Applicant "actively participates at a senior level" from overseas. He cannot reasonably be said to be using his skills in the day‑to‑day management of the business or to have made a genuine effort to do so.

The respondent pointed out that this case bears similarities to Tang in as much as it is an agreed fact that Mr Widjaja had been in Australia a total of 48 days between the date of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001. However, this case differs from Tang in several major aspects which are most relevant in determining the correct and preferable decision to be made by the Tribunal in respect of this matter.

The respondent also referred the Tribunal to the following decisions in support of their contention that the applicant has not participated at a senior level in the day‑to‑day management of Crown Records because he spent a total of only 48 days in Australia from the time of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001:
· Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
· Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178

In the case of Huang, the Tribunal said:

…
Not only must the eligible business operate in Australia to comply with the act, the visa holder must participate at a senior level in the day‑to‑day management of the Australian business in Australia, albeit with trips overseas from time to time.

In the case of Ong, the Tribunal said:

…I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas.

The Tribunal however concurs with the applicant’s submission that the Act does not support the view that "…it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas", in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act. The Act prescribes that the applicant shall utilise his or her skills in actively participating at a senior level in the day‑to‑day management of the business and this statutory requirement does not restrict the Tribunal from also examining the activities of the applicant whilst residing overseas in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act.

As discussed in these reasons for decision, Crown Records is a joint venture business between two companies, Musica Entertainment which is owned by the applicant and his wife and OOI Music which represents the business interests of Mr Ooi. The joint venture business objectives of Crown Records are based upon two separate management functions. The first management function calls for Mr Ooi to locate popular music artists and bands and to record their musical performances in Crown Records Australian recording studio situated in Collingwood, Victoria. Mr Ooi naturally supervises some of the day‑to‑day activities of Crown Records such as the financial and/or contractual arrangements negotiated with the Australian recorded artists, the management of the studio and its one technician employee and various other administration and accounting functions. However, all major day‑to‑day decisions affecting the business are progressively discussed and determined by the applicant and Mr Ooi together as they arise on an ongoing basis. Also the applicant and Mr Ooi continuously work together discussing the style of music presented by various artists, and the suitability or not of that style of music to achieve retailing success in the Asian popular music market. The applicant may proffer advice to Mr Ooi regarding changes in various artists' styles in order to make the music more attractive to Asian music consumers. Mr Ooi eventually prepares a master recording of a selected artist which he submits to the applicant in Indonesia for consideration.
The second management function of the Crown Records business is operated by the applicant who fills the position best described as executive producer of the company. The applicant is a highly successful and knowledgable marketing executive of Musica, his family's music recording and printing company located in Indonesia. The applicant resides with his family in Singapore and also has a residence in Indonesia. As soon as the applicant receives the abovementioned Crown Records master recording from Mr Ooi, he offers it to various Asian recording manufacturers on a sub‑contract basis. If the Asian recording manufacturers like Mr Ooi's master recording of the Australian artist and are prepared to manufacture the recording in volume, the manufactured recordings are provided to Crown Records in Indonesia via the applicant. The applicant will then attend to the retailing of the manufactured recording, through various sales outlets known by him, to the Asian music consumer market.
For the Crown Records joint venture arrangement to be achievable, it is necessary for the applicant to reside in Asia and maintain a significant ongoing commercial relationship with the Asian record making industry and music retail distribution outlets. The applicant satisfies this important aspect of the joint venture arrangement. On the other hand, it is necessary for the other joint venturer Mr Ooi to have a close relationship to the artistic side of the Australian music industry and also have the technical skills to record local performing artists and bands that can be adapted to suit Asian consumer tastes and requirements. Mr Ooi's satisfies this other important aspect of the Crown Records joint venture arrangement.
It is clear that it takes a very long period involving up to three years between the time that an artist is selected as being potentially suitable for the Asian market and the time that his/her recordings are available for release at the retail level, and it is understandable that Crown Records had not released any recordings to the Asian market from the date of the incorporation of the company in January 2000 to the date of cancellation of the applicant’s business skills visa by the respondent on 2 November 2001. Crown Records did not acquire its recording studio equipment until about July 2001 and it is apparent from the financial statements that the company did not commence operations until after that date. It is also clear from the financial statements that the applicant, through his personal loans via Musica Entertainment to Crown Records, carries almost the entire financial risk in respect of the outcome of the Crown Records joint venture.
The respondent has conceded that the applicant meets the requirements of ss.134(1)(a) of the Act and has obtained a substantial ownership interest in an eligible business in Australia – Crown Records. The Tribunal finds that the applicant also meets the requirements of ss.134(1)(b) of the Act and has utilised his skills in actively participating at a senior level in the day‑to‑day management of Crown Records. In reaching this finding, the Tribunal has taken into consideration the entire day‑to‑day responsibilities accepted by both the applicant and Mr Ooi under their Crown Records joint venture arrangement and the evidence that all major management decisions concerning Crown Records have been jointly shared and made together by the applicant and Mr Ooi as required on a day‑to‑day basis. This finding is made in respect of consideration of events to the date of the primary decision to cancel the applicant’s business skills visa on 2 November 2001. However, the Tribunal also finds that the applicant has continued to make a genuine effort to the date of the hearing to utilise his skills in actively participating at a senior level in the day‑to‑day management of Crown Records pursuant to ss.134(2)(b) and (c) of the Act, and intends to continue to do so.
The Tribunal has taken into consideration the fact that the applicant has been in Australia a total of 48 days between his date of arrival and the date of cancellation of his business skills visa on 2 November 2001 and finds that the applicant’s absence is both desirable and necessary in order to meet the abovementioned business objectives of the Crown Records joint venture arrangement. On the other hand, it will possibly become necessary for the applicant to increase the amount of time that he spends in Australia as Crown Records eventually commences the sale of Australian artist recordings in Asia.
The Tribunal has also taken into consideration the failure by the applicant to complete a business skills migrants form as requested by the respondent on 9 June 2000 and 23 October 2000. The Tribunal accepts the applicant’s explanation that he completed the survey as requested and that his secretary mistakenly overlooked returning the completed survey document to the respondent. The Tribunal notes the applicant’s remorse for his secretary's error and his tardiness in not ensuring that the competed survey document was returned to the respondent as requested.

DECISION

The Tribunal sets aside the decision under review and remits the matter to the respondent with the direction that the applicant’s business skills visa should not be cancelled under s.134 of the Act.

I certify that the forty‑eight [48] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr W.G. McLean, Member

(sgd) Catherine Thomas

Clerk

Date of Hearing:  17 February 2003
17 March 2003
Date of Decision:  28 April 2003
Counsel for the applicant:            Mr L. Boccabella
Solicitor for the applicant:            Cliffords

Solicitor for the respondent: Mr T. Fell, Australian Government Solicitor