Santoso and Minister for Immigration, Multicultural and Indigenous Affairs
[2006] AATA 592
•3 July 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 592
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/1308
GENERAL ADMINISTRATIVE DIVISION ) Re JOSHUA WIRJAWAN SANTOSO Applicant
And
MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal R Hunt, Senior Member Date3 July 2006
PlaceSydney
Decision The Tribunal affirms the decision under review.
[SGD]
Senior Member
CATCHWORDS
MIGRATION – BUSINESS VISA – cancelled pursuant to section 134 of the Migration Act – No eligible business - insufficient genuine effort to establish an ‘eligible business’ – decision of Minister’s delegate to cancel visa correct – decision under review affirmed.
Migration Act 1958 s 134, 137 (the Act)
Migration Series Instructions No 133 (MSI 133)
Hope v Bathurst City Council (1980) 144 CLR 1
In ReTang and Minister for Immigration and Multicultural Affairs [2002] AATA 997
Kim v Minister for Immigration and Indigenous Affairs [2004] FCA 31
REASONS FOR DECISION
3 July 2006 R Hunt, Senior Member SUMMARY
1.Mr Joshua Wirjawan Santoso, the applicant, applied to the tribunal for review of a decision dated 19 September 2005 made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs, the respondent, to cancel his senior executive, subclass 128, visa. The delegate cancelled the visa pursuant to section 134(1) of the Migration Act 1958 (the Act). At the same time, the delegate cancelled the visas of Mr Santoso’s wife and daughters which were secondary visa issued on the basis that they were dependants of Mr Santoso. Only Mr Santoso’s visa cancellation decision is before the tribunal for the purposes of the present decision. The tribunal has decided that Mr Santoso’s business interests in Australia do not amount to an eligible business. Further, although he has made some efforts to develop business ventures and to investigate other opportunities in Australia, I have decided that these are not genuine efforts to the degree warranted to re-instate his visa. Finally, I have decided not to exercise the discretion to re-instate the visa. It follows that Mr Santoso’s application for review has been unsuccessful.
BACKGROUND
2.Mr Santoso and his wife and daughters applied in 2001 for senior executive visas, subclass 128, to enable migration to Australia from Indonesia. On 8 January 2002, the Department advised Mr Santoso that he and his wife and children were granted sub-class 128 visas. The visas for Mr Santoso’s family members were secondary to his visa. Mr Santoso entered Australia on 3 July 2002 as the holder of his subclass 128 visas.
3.In 2004, the Department of Immigration and Multicultural and Indigenous Affairs sent Mr Santoso a standard “Survey of Business Skills Migrant – 24 months” form. Mr Santoso responded on 9 September 2004. He explained that he had not yet engaged in business in Australia but had made efforts to do business. He provided evidence of his attempt to buy a New Zealand ice cream franchise including an unsigned contract. Mr Santoso also produced evidence that he was a director of an Australian company, Golden Lampstands Australia Pty Ltd. As well, Mr Santoso demonstrated that he had participated in a number of exhibitions organised by Austrade in his role as the general manager of an Indonesian company. He supplied copies of follow-up correspondence between himself and various Australian companies. Nevertheless, a delegate cancelled Mr Santoso’s visa on 19 September 2005 after giving notice of intention to cancel and receiving Mr Santoso’s response to this notice showing he had carried out some export transactions of pet products and gold bullion.
ISSUES AND LEGISLATIVE PROVISIONS GOVERNING
4.Section 134 of the Act empowers the Minister or his delegate to cancel a business visa in certain circumstances. Mr Santoso’s visa is one of the subclasses of visa that comes within this class of visa. In particular, subsections 134 (1) and (2) give rise to the main issues before the Tribunal. They are:
· Whether Mr Santoso has acquired a substantial ownership interest in an eligible business in Australia.
· Whether he has to utilise his skills in actively participating at a senior level in the day to day management of an eligible business in Australia.
5.If I am satisfied that Mr Santoso fails to meet one of these criteria, I must then determine:
· Whether Mr Whether Mr Santoso has made a genuine effort to acquire a substantial interest in an eligible business in Australia and, if so, whether he intends to continue making genuine efforts.
· Whether he has made a genuine effort to utilise his skills in participating at a senior level in the day to day management of an eligible business in Australia and, if so, whether he intends to continue making genuine efforts.
6.If I am satisfied that Mr Santoso has made suitable efforts for the purposes of the above issues, I will then determine whether I should exercise my discretion available under subsection 134(3) whether to reinstate his visa and direct that the visa not be cancelled.
7.Subsection 134(10) sets out that, in this section, business visa means a visa included in a class of visas, being a class that has the words "Business Skills" in its title. As well, the subsection provides that “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.
8.Subsection 134 (3) sets out some of the 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)…
9.Further to the requirements of section 134(3), the Migration Series Instructions No 133 (MSI 133), at paragraph 4.5, lists policy factors to be considered in forming an opinion whether a genuine effort has been made. These factors are:
(a)business proposal which is considered genuine, realistic and achievable;
(b)formal contract with partners or joint venturers;
(c)written evidence of detailed consultations with at least three business advisers (accountant, lawyer, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);
(d)physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;
(e)transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
(f)minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant.
(g)minimum A$100,000 business activity as indicated by turnover. This may include other business activity not considered “eligible business” but cannot include passive investment, eg, purchase of shares.
(h)failure to comply with a notice for information under s 137, ie mandatory monitoring of Australian address and return of survey forms.
consideration of Mr Santoso’s Evidence
10.Mr Santoso gave oral evidence by telephone from Indonesia at a tribunal hearing. He told the tribunal that he was the general manager of a large company in Indonesia. He had good contacts in Indonesia through this company, which operated a distribution business. Mr Santoso had been hoping to develop a market for export of Australian products through the Indonesian company. Mr Santoso had done some business through his Australian company, Golden Lampstands Australia Pty Ltd (Lampstands). He had carried out three exports and sales of Australian pet products and expected that he would be able to make further sales in the future. He had also made a sale of Australian gold bullion to a buyer in Hong Kong which was worth about $100,000 but was not confident of making more sales of this product.
11.Mr Santoso gave further evidence that he worked five or six days a week in his position in Indonesia. As general manager he had long hours. He gave evidence to the effect that his position in Indonesia was the avenue through which he had been able to help Australian businesses to export their products and through which he had made sales for his Australian company. His contacts in Indonesia were essential for him to be able to develop his Australian business. Mr Santoso said that his business efforts had been hampered by the effect of the Bali bombing and the subsequent difficult relations between Australia and Indonesia. Business people he had been dealing with were reluctant to come to Indonesia. Mr Santoso had been planning to spend more time in Australia once he had more business here.
12.Mr Santoso told the tribunal he was able to do business in Australia from Indonesia because of the internet. Mr Santoso said he could conduct his business from either Indonesia or from Australia because of the internet. Before me are a great many emails that show Mr Santoso frequently communicated with business people in Australia seeking business deals and informing them of what he was organising to distribute their products.
13.When asked how many days he had spent in Australia he said he thought it had been only 47 days up to the date of the cancellation of his visa. Mr Santoso had already explained he did not need to be in Australia to conduct Australian business. I note his extensive email correspondence illustrates his point that the internet has largely overcome the need to be present in person in Australia to conduct business here.
14.In response to questions about his day to day involvement in Lampstands business, Mr Santoso gave evidence to the effect that when he was doing business for the Indonesian company he was often simultaneously using his contacts to distribute Australian products for Lampstands. He had helped several Australian suppliers and businesses. Mr Santoso said, in response to a question, that his business in Indonesia would not suffer if he spent more time In Australia. However, he would like to have more business happening in Australia before setting up residence here.
FINDINGS
15.Mr Santoso presented as an honest witness who gave an account of his attempts to carry on business in Australia. Mr Santoso did set up an Australian company and did some business as a director of the Australian company, Lampstands. As well, I accept that he had a substantial interest in the business of Lampstands, being the owner of 50% of the company. I further accept that it was he who managed the business of Lampstands in Australia. I accept his evidence that his co-director was not very active in the business. I also accept that Mr Santoso has explored various options for doing business in Australia.
Does Mr Santoso have an eligible business?
16.The first question at issue for the Tribunal is whether Mr Santoso, at the date of the cancellation, had an eligible business for the purposes of section 134(1) of the Act. The meaning of an “eligible business” is set out in s 134(10), paragraphs (a) to (f), of the Act. For Mr Santoso’s business to qualify it must meet at least one of the criteria in the definition which is set out above.
17. Cases such as Hope v Bathurst City Council (1980) 144 CLR 1 provide guidance about the term ‘business”. The case of Hope is authority that carrying on a business is an activity undertaken on a continuous and repetitive basis for the purpose of profit. The business concerned does not have to reach a threshold of size or turnover to qualify as an eligible business although size and turnover may be a pointer that a business is performing well. Also see the decision in Tang v Minister for Immigration and Indigenous Affairs [2000] AATA 997 as to the need for activities for profit on a continuous and repetitive basis.
18.It is clear that Mr Santoso does have a substantial interest in an Australian business, being that of Lampstands. The business has links with the international market but has created no direct employment in Australia. On the other hand, there are no Australian employees. Lampstands has exported Australian products but on four occasions only. Mr Santoso is an international businessman looking for a market for Australian products but his efforts have not met with a great deal of success despite his good contacts. Mr Santoso’s Australian business does not manufacture goods or provide services that would otherwise be imported into Australia and its activities have not particularly increased commercial activity and competitiveness within sectors of the Australian economy. Therefore, on balance, I am unable to find that the business of Lampstands, Mr Santoso’s only present business in Australia, is an eligible business according to the definition of that term in subsection 134(10).
19.As well, Lampstands does not exhibit a high turnover. While his accountant has written to the Department that he knows Mr Santoso as a hard working man the company tax return lodged in 2005 shows Lampstands had a taxable income of only $4430 and an income tax liability of only $1329. This performance does not assist to make Lampstands qualify as an eligible business. It has not been performing well. It has not carried on activities for profit on a continuous and repetitive basis. Mr Santoso has not invested capital in the company or in any other Australian venture or assets. He does not meet the policy of investing around $100,000 in Australia. He did demonstrate turnover of around $100,000 for one transaction but this was a one-off export of bullion. Mr Santoso has tried but failed to set up much of an export market for Australian goods.
20.Lampstands does not employ Australians and it does not meet most of the tests set out in s. 134(10). I therefore find that Mr Santoso has no eligible business in Australia despite his having set up an Australian company and having carried out some transactions.
21.As Mr Santoso does not have an eligible business, it follows that he cannot meet either of tests for the purposes of section 134(1). Mr Santoso does not satisfy the tests as to day to day running of an eligible business nor of having acquired such a business for this reason.
Has Mr Santoso made genuine efforts to establish an eligible business?
22.Although I have found Mr Santoso’s business is not an eligible business, Mr Santoso may be able to show that he has made a genuine effort to obtain a substantial interest in an eligible business for the purposes of section 134(2). Matters that may be taken into account for this test are set out in s 134(1) (3). Guidance may also be sought from the Migration Series Instructions.
23.Mr Santoso’s contentions were largely directed to establishing that he had made genuine efforts to make a go of some business activity in Australia and that his efforts were continuing. If I agree that Mr Santoso has made sufficient genuine efforts, subsection 134(2) requires me to decide that his visa should not be cancelled. Mr Santoso gave oral evidence about his efforts and furnished copies of his email correspondence but these efforts have not produced many signs of success.
24.As to the matters that subsection 134 (3) sets out to assist in determining whether a person has made the genuine effort referred to in subsection (2), I have not found many instances that enhance Mr Santoso’s efforts. Although the email correspondence shows Mr Santoso has spent a lot of time and effort looking into business proposals, he has not developed any substantial business. I note as well that the correspondence generally is carried on by Mr Santoso in his role as general manger of an Indonesian company rather than as the director of an Australian company. Although he gave evidence that the businesses were entwined in that he used his Indonesian contacts to introduce the Australian products, the emphasis on development of Australian business is not strong.
25.Mr Santoso also has not shown the existence of partners or joint ventures for business proposals although I acknowledge his attempts to set up some suitable arrangements. I accept that Mr Santoso has spent some time researching the conduct of an eligible business in Australia and at one stage tried to buy an ice cream franchise. However, this was unsuccessful as well. In addition, he has no formal business plan or proposal that he has put before the tribunal other than hopes to develop exports. As to the period or periods during which Mr Santoso has been present in Australia, these are not lengthy. He has spent only 47 or 48 days in Australia since held his visa. The value of assets transferred to Australia for use in obtaining an interest in an eligible business is not impressive. Lampstands bank accounts before me show it had a balance of just under $22,000 from June to 4 July 2005 and less than that amount in previous months. Mr Santoso did not indicate that he had any other funds or assets in Australia.
26.While Mr Santoso gave evidence of negotiations having taken place in relation to the establishment of Australian exports, his business prospects for Lampstands do not impress me as being strong at present let alone at the time of the making of the cancellation decision. On balance, I am not satisfied that Mr Santoso has future prospects and intentions to a level to satisfy me that he meets the tests set out in subsection (2) and (3) of section 134.
27.I am required to consider whether I should exercise the discretion available under subsection 134(1), that is, “the Minister may cancel a business visa” but is not required to do so. While I note that Kiefel J found in Kim v Minister for Immigration and Indigenous Affairs [2004] FCA 31, that the discretion allows a decision maker to consider whether, in a particular case, the visa holder should be given more time, I can see no likely improvement in Mr Santoso’s Australian business in the offing. I am not convinced that I should exercise the discretion available. Although Mr Santoso has undoubted business skills, he has not shown sufficient commitment to the development of an Australian business to persuade me that his visa should not be cancelled. I am not satisfied that he would be able to fulfil the criteria in subsection 134(1) if he had more time.
decision
28.The decision under review is affirmed.
I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of SM R. Hunt
Signed: .....................................................................................
Associate: Rhonda PietriniDate/s of Hearing 23 June 2006
Date of Decision 3 July 2006
Solicitor for the Applicant Self-represented applicantSolicitor for the Respondent Ms Therese Quinn
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