Setiawan and Minister for Immigration and Citizenship
[2007] AATA 2005
•30 November 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 2005
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 200700002
GENERAL ADMINISTRATIVE DIVISION ) Re SOEHARDJO SETIAWAN Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date30 November 2007
PlacePerth
Decision The Tribunal affirms the decision under review. .........(Sgd. A Sweidan)...................
Senior Member
CATCHWORDS
Immigration – Business Visa – cancellation – whether applicant obtained substantial ownership interest in an eligible business – whether applicant utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia – whether applicant made genuine effort to comply with visa conditions – decision under review affirmed.
LEGISLATION
Migration Act 1958 – s 134 – s134(10)
Migration Series Instructions (MSI) 133
Migration Amendment Bill (2) 1992
CASES
Abbu v Minister for immigration and Multicultural Affairs [2006] AATA 898
Buljeta and Minister for Immigration and Multicultural Affairs [2003] AATA 10
Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259
Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Griffiths and Migration Agents Registration Authority [2001] AATA 240
Gunawan and Minister for Immigration and Multicultural Affairs [2006] AATA 852
Harsono and Minister for Immigration and Multicultural Affairs [2007] AATA 64
Hindrodjojo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724
Hope v Bathurst City Council (1980) 144 CLR 1
Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656
Koosasi v Minister for Immigration and Multicultural Affairs [2006] FCA 1260
Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209
Legana v Minister for Immigration and Multicultural Affairs [2005] AATA 1166
Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309
Lioe v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA
Lim & Ors v Minister for Immigration and Multicultural Affairs [2006] AATA 28
Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562
Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27
Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA at 299
Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Saleh Leo v Minister for Immigration [2006] AATA 308
Shi v Migration Agents Registration Authority [2008] FCAFC 59
Tan and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 8-8
Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997
Tio and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1268
Tjhang v Minister for Immigration and Multicultural Affairs [2005] AATA 1203
Witjahya and Minister for Immigration and Multicultural Affairs [2006] AATA 1118
Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
DECISION AND REASONS FOR DECISION
30 November 2007 Mr A Sweidan, Senior Member INTRODUCTION
1. Applicant seeks a review of a decision made by a delegate of the respondent on 8 December 2006 to cancel applicant’s business skills visa.
BACKGROUND
(a)The applicant entered Australia on 11 July 2003 on a sub-class 127 business skills visa granted on 2 July 2003.
(b)The applicant acquired a 33% interest in an Australian company called Bio-Optel Pty Ltd (Bio-Optel), registered on 31 March 2003. The applicant described the company’s business to the Department of Immigration and Citizenship (the Department) as a property and finance business; although it appears the applicant described it as a medical equipment wholesaling business to the Australian Tax Office.
APPLICANT’S EVIDENCE
2. The applicant testified that he has a substantial business in Indonesia called PT Hilab Sciencetama which imports Laboratory and Scientific Equipment from several countries into Indonesia.
3. His original intention was to start a business in Australia with his daughter, who was studying at the time at RMIT University. Anna had commenced her studies in February 2003. Since she majored in Applied Chemistry, which is related to his business importing scientific and laboratory equipment, he thought that he could start a business in Laboratory and Scientific Equipment in Australia with her.
4. The intention was for Bio-Optel to deal with Australian companies to export Australian scientific instruments to Indonesia. Bio-Optel was to be the buying agent. However he found that that this did not work because Australian companies preferred to sell direct to Indonesian companies and use their own agents in Indonesia. He only got one order for supplies of approximately $1,000 from another company.
5. As well, from the middle of 2004 economic conditions in Indonesia began to deteriorate and the Australian currency began to increase in value against the US dollar which made Australian products less competitive. This affected the proposed business and it was decided to change the business activities.
6. In September 2004, after discussions with Cameron McNamara, a Jakarta based representative of a Western Australian building company called Ausproperty Group Pty Ltd (“the builder”), the directors of Bio-Optel decided to develop two properties in Perth, Western Australia as it was the market with the most potential for growth at the time.
7. In September 2004 Bio-Optel purchased 19 Raleigh Street, Carlisle, Western Australia (“Carlisle”) and 86 Kooyong Road, Rivervale, Western Australia (“Rivervale”). The company intended to develop 6 residential “villa” units (3 units on each property) which, when the construction was complete in 2006, had an estimated total value of about AUD $2.2 million.
8. In October 2004 he and the other directors of Bio-Optel decided on the design of the units after being presented with designs by the builder.
9. Bio-Optel appointed an Indonesian based finance company which arranged finance for the purchase of the Rivervale and Carlisle properties and construction of the units.
10. Bio-Optel invested a total of around AUD $680,000 in cash in both projects in addition to obtaining a loan of AUD $1.82 million from the Home Building Society. The applicant contributed a third of the cash investment.
11. After negotiations with the Builder in November/December 2004 on the price and quotations given, contracts with the Builder for the construction of the units were concluded.
12. Construction of the units began around May 2005 after the Builder obtained the necessary building and planning approvals on Bio-Optel’s behalf. Around this time, in June, he also personally inspected both the Rivervale and Carlisle sites.
13. Prior to the construction commencing on the Carlisle project Bio-Optel was required to alter the design of the units by the local council. He met with the Builder in Jakarta and agreed to the design alterations and building price variation.
14. On completion of the developments, Bio-Optel sold the properties for a profit in May 2006 (Rivervale) and July 2006 (Carlisle).
15. He, as a Director of Bio-Optel in conjunction with his co-Directors made all strategic decisions on behalf of the company with respect to the proposed sourcing of scientific equipment from Australia to Indonesia, to refocus Bio-Optel’s business from scientific instruments to property development, buying the development properties, arranging finance for the project and contracting with the project manager/Builder to build and design the units.
16. He remained resident in Indonesia and conducted his own business there at all times. The Builder provided the day-to-day administrative management of the development in Perth. However, the Builder forwarded to him and his co-directors all major decisions for final approval. The directors signed off on all major decisions including all additional payments via progress claim certificates to the Builder and the loan agreement.
17. Bio-Optel intends to keep investing in Australia and purchase more land for development and he has recently discussed other potential development sites with the Builder.
18. Bio-Optel also intends to continue to source Australian laboratory and scientific products to be exported to Indonesia when the currency stabilises. He has made a number of enquiries in Melbourne with different suppliers. He had also intended to buy an apartment in Melbourne and to move permanently there in July 2007 to develop the business with his daughter.
19. At the time of cancellation of his visa he had invested AUD $210,000 in Bio-Optel as a shareholder loan to the company.
20. Applicant asserted that he had met all the requirements of the Act in relation to his visa alternatively that he met the “genuine efforts” requirement.
LEGISLATION AND POLICY
21. Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, or does not intend to do these things. The Minister must not cancel the visa if satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts.
22. Eligible business and ownership interests are defined in section 134(1) of the Act and discussed at paragraph 4.3 of the Migration Series Instructions (MSI) 133.
23. Section 134(10) 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 and 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; and
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
24. Paragraph 4.3.2 of the MSI-133 notes that eligibility relates to achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.
25. Section 134(3) provides a list of matters that the Minister may take into account when determining whether a person has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his skills in actively participating at a senior level in the day-to-day management of that business.
26. Notes to guide the interpretation of these matters are provided at paragraph 4.5 of the MSI-133. The matters that may be taken into account, and the notes to their interpretation provide as follows:
(a)business proposals that the person has developed. The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;
(b)the existence of partners or joint ventures. The MSI refers to whether there is a formal contract with partners or joint venturers;
(c)research that the person has undertaken into the conduct of an eligible business in Australia. The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;
(d)the period or periods during which the person has been present in Australia. The MSI refers to whether there has been physical presence for more than 6 months since the first arrival as a business skills migrant;
(e)the value of assets transferred for use in obtaining an interest in an eligible business. The MSI refers to whether there has been transfer to and retained in Australia at least 50% of the funds indicated as available for transfer within the 2 years;
(f)the value of ownership interest in the eligible business in Australia which is or has been held by the person. The MSI refers to whether there is or has been a minimum Australian $100,000.00 or 10% ownership held by the person and provides that if the person is no longer in the business the reasons for loss of ownership are relevant;
(g)the business activity that is or has been undertaken by the person. The MSI refers to whether there is a minimum of Australian $100,000.00 business activity as indicated by turnover and provides that this may include other business activity not considered as an eligible business but cannot include passive investment, for example the purchase of shares;
(h)whether the person has failed to comply with a notice under section 137. The MSI refers to whether there has been a failure to comply with a notice for information under section 137, i.e. mandatory monitoring of Australian address and return of survey forms; and
(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 on the day-to-day management of the business:
i)the length of time the person held the ownership interest or participated in the management as the case requires; and
ii)the reason why the person no longer holds the interest or participates in the management as the case requires.
27. Whilst the Tribunal is not bound by Departmental policy, the Tribunal should follow Ministerial or Departmental Guidelines unless there is some good reason not to: see Buljeta and Minister for Immigration and Multicultural Affairs [2003] AATA 10 at [58] citing Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634; and Re Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [51] citing Davies J in Re Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259.
Information which the Tribunal should consider
28. In conducting its review of the cancellation decision the Tribunal should have regard to all relevant evidence to determine whether the applicant satisfies the requirements of section 134(1) or is making genuine efforts to do so within the meaning of section 134(2) as at the date of cancellation: Re Griffiths and Migration Agents Registration Authority [2001] AATA 240; Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342 and Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54.
29. In the Full Federal Court decision of Shi v Migration Agents Registration Authority [2007] FCAFC 59 His Honour Nicholson J at [10] with Tracey J at [58] agreeing held the following in relation to this issue:
“The Tribunal is not confined to material which was before the decision-maker or the events which had occurred up till the time of its decision…However, the Tribunal is obliged to address the same question as the primary decision-maker…Where the question to be decided arises under a statute, the relevant of later evidence will depend upon the proper construction of the statute and the particular factual context…If the primary decision had to be made by reference to a particular point of time, the Tribunal will be limited to deciding the question by reference to that point of time…If the decision could only have been made following a certain procedure, it may be that the evidence called on the review cannot be such as would undermine that procedure. This may preclude calling of evidence of improvements implemented after the date of the decision and in response to the procedure…This does not mean the Tribunal cannot receive as evidence facts that occurred after the date of the decision under review provided that evidence bears on the merits of the decision as at the time that it was required to be made.”
Substantial ownership interest in an eligible business in Australia - s134(1)(a)
Substantial ownership
30. The Tribunal accepts that the applicant’s 33% shareholding in Bio-Optel is a substantial ownership interest.
Is Bio-Optel a business?
31. Before the Tribunal considers whether Bio-Optel is an eligible Australian business, the Tribunal must consider the preliminary question whether it is a business at all within the meaning of the Act: see Koosasi v Minister for Immigration and Multicultural Affairs [2006] FCA 1260.
32. The Tribunal has previously found that the reference in subsection 134(1)(b) to the “day-to-day management of the business” indicates that a business must have some element of continuity and repetition. Applying Mason J’s formulation of “carrying on a business” from Hope v Bathurst City Council (1980) 144 CLR 1, Deputy President McMahon found in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997 at [20] that the construction of “participating in the day-to-day management of the business” for subsection 134(1)(b) required a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis.
33. Member Barton at [55] in the matter of Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309 citing Evans v FC of T 89 ATC 4540 also stated:
“Whether a particular activity or course of activities constitutes a business is a question of fact and degree that is to be determined by considering matters such as the scale of activity and whether it is conducted continuously and on a commercial basis to derive profit.”
34. The applicant at paragraph 15 of his statement of facts and contentions claims:
“Bio-Optel has all the accepted hallmarks of a permanently established business. It has been operating for some four years, having been established as a vehicle for the applicant’s Australian business activities, it has been and is involved in a series of developments for the purpose of making a profit, and it keeps the usual company and financial records”.
35. In the Tribunal’s view, the evidence shows that Bio-Optel has essentially invested as a passive investor in a ‘one-off’ property development project. The Tribunal has previously held that similar projects are not a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis: see Tio and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1268 at [20] and [21].
36. The Tribunal is of the view that Bio-Optel is not a business within the meaning of the Act.
Is Bio-Optel an eligible business?
37. Even if Bio-Optel was to be characterised as a business, it must still satisfy the legislative requirement of being an eligible business. The definition of an eligible business is set out in section 134(10) of the Act (see para 24 above). A business must meet at least one of the criteria set out in paragraphs (a) to (f) of the definition in order to be classified as an eligible business.
38. The applicant claims at paragraph 11 of his statement of facts and contentions that Bio-Optel satisfies criteria (b), that is, the creation and maintenance of employment. The applicant further cites the decisions of Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209 and Hindrodjojo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724 in support of this assertion.
39. While a property development company can be an eligible business, it is not always: see Lioe v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA; Tan and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 808 at [15]; Ng v Minister for Immigration & Multicultural & Indigenous Affairs [2003] AATA at 299 [25] - [27] and Tio and Minister for Immigration and Multicultural and Indigenous Affairs supra.
40. The Tribunal is of the view on the evidence before it that Bio-Optel is essentially a passive investor which entered into a contract with Ausproperty to purchase 2 residential lots of land, which in turn were made into 6 residential ‘villas’ (see applicant’s witness statement at paragraph 8). The total cost of these projects appears to be around $1,773,132 (see exhibits 18 and 19), with Bio-Optel’s portion of the costs being $865,698.03 (see exhibit 4).
41. The Tribunal notes that while Member Allen in Hindrojojo at [26] and [27] was prepared to accept a $30 million property development as an eligible business shortly thereafter he held in Tan at [15], that a project with construction costs of approximately $1 million was not an eligible business. He then went on to cite with approval Deputy President Wright QC’s view in Ng at [26] that:
“…the provision of ‘employment’ in the sense of providing limited fee earning opportunities to architects and real estate agents and the provision of a one off building contract… is not ‘the creation or maintenance of employment in Australia’ contemplated by the s134(10) definition of eligible business…”
The Tribunal agrees with that view.
42. The Tribunal is of the opinion that while property developments can be eligible businesses, Bio-Optel’s activities in these circumstances, based on a one-off investment in a property development, indicate that it is not an eligible business creating or maintaining employment in Australia.
Active participation at a senior level in the day-to-day management of an eligible business - s134(1)(b)
Time spent in Australia and reason for being overseas
43. It was held in Tang (Supra at 21) that the Act is intended to benefit business owners who settle in Australia and actively manage an eligible business.
44. In Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 Senior Member Muller said at [12]:
“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.”
45. Reference can be made to the Second Reading Speech of the Minister for Immigration and Ethnic Affairs introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Act. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at 2678) that it was understood that migrants who arrived in Australia on a business skills visa would remain resident in Australia (see Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 at [31]).
46. In Ng v Minister for Immigration v Minister for Immigration and Multicultural Affairs [2003] AATA 299 Deputy President Wright QC commented at [12]:
“This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However, the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential. A business skills visa carries with it the right of permanent residency in Australia during its existence and by departing from Australia and joining family members as secondary applicants they too can obtain this privilege. It would be strange indeed if an overseas entrepreneur could secure these advantages by directing business operations from abroad within a day or two of his first arrival and never setting foot in this country again.”
47. Divergent views have been expressed in the Tribunal as to whether day-to-day management of an eligible business must take place in Australia, or whether it can take place overseas. Some authorities seem to indicate that time spent in Australia is relevant to the issue of management under s134(1)(b). Other authorities seem to indicate that time spent in Australia is not relevant. Finally a third line of authorities seem to indicate that although not strictly relevant to the question here, it may be a factor with regard to the Tribunal’s discretion under s134(1) : see Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27 at [41] for the respective authorities and a history of the debate.
48. In this matter, the Tribunal is of the view that the first line of authorities is the correct one, in that time spent in Australia is a relevant consideration when deciding whether a visa holder has satisfied the requirements under s134(1)(b): Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 at [12]; Ong v Minister for Immigration and Multicultural Affairs [2003] AATA 178 at [28] to [32]; Re Tjhang v Minister for Immigration and Multicultural Affairs [2005] AATA 1203 at [34] to [36]; Legana v Minister for Immigration and Multicultural Affairs 2005] AATA 1166 at [30]; Lim & Ors v Minister for Immigration and Multicultural Affairs [2006] AATA 28 at [42] and [43] and Lioe.
49. The applicant has only spent 62 days in Australia up to the time that his visa was cancelled and in the Tribunal’s opinion he has not satisfied the implied residence linked requirement in s134(1)(b).
50. In any event in the Tribunal’s view even where the opposite line of authorities is taken, time spent overseas must still have some connection or beneficial nexus to the Australian eligible business. Member Davis in Legana (supra) at [30] approving comments in Jo (supra) at [36] said:
“Obviously overseas trips may be a vitally important part of fostering and expanding the business. However, the Act does not contemplate an absentee entrepreneur directing operations from afar”.
51. Here there is no evidence that it was beneficial or necessary for the property development operations of Bio-Optel that the applicant remain so long overseas or that his activities there had any beneficial nexus to the property development in Perth.
52. The applicant was in essence a passive investor in Bio-Optel with Ausproperty managing the development project. The evidence is more indicative of an interested but otherwise passive financier.
53. The applicant in his statement of facts and contentions has made a number of submissions regarding active participation in day-to-day senior level management. This includes referring to a number of decisions which indicate that an applicant is not required to work a set number of days; that management will often involve intangible input; or that what is required is that there be sufficient management for the needs of the business. While the Tribunal agrees with these statements, these maxims should not be artificially collated to support the notion that the Act requires a visa holder to do virtually nothing.
The evidence of the applicant’s actual involvement in management is minimal
54. The applicant claimed in his 24 month survey and in his evidence that he works 25 hours per work on his Australian business (T672). The evidence provided however does not support this claim.
55. Cameron McNamara from Ausproperty, at paragraph 11 of his witness statement, states that during the height of the construction phase around May 2005 to February 2006, the applicant’s total role was:
“…to monitor and sign bank draw down forms, arrange payments of any rates and taxes and other administrative tasks. Ausproperty, as the builder and project manager, liaised with sub contractors and architects and kept Bio-Optel abreast of progress of the works.”
56. The evidence shows that the applicant’s actual involvement was limited to situations where Ausproperty asked for more money, where his signature was required or when he was directly required to carry out other tasks as a director of the legal owner. No evidence has been provided which indicates that the applicant and Bio-Optel were anything more than passive investors in the project.
The applicant does not have a knowledge in the business consistent with someone actively participating in the day-to-day management at a senior level.
57. In the matter of Lioe, Senior Member Ettinger reasons indicated that a mere perfunctory personal knowledge of a business is a good indicator that a holder is not utilising their required management skills and therefore not satisfying their visa obligations. His Honour Justice Madgwick at [55] in the Federal Court case of Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562 also emphasised how important it was to be:
“fully cognisant of the overall direction and performance of the business.”
58. The evidence indicates that the applicant had minimal knowledge of the business operations, other than how much money he is required to pay. For example, in an email dated 30 November 2005 (T816) the applicant indicates that he is not being kept informed by Ausproperty, either orally or in writing, about the business.
59. The Tribunal finds that the applicant’s daily knowledge of the business’ operations were not only less than an active day-to-day senior level manager, but was also probably less than an average passive property investor in Australia.
The applicant made virtually no decisions at the requisite level
60. The Federal Court in Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562 outlined the importance of decision making. Madwick J at [54] cited the Tribunal’s decision with approval:
“The evidence supporting the visa applicant’s “involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business” is essentially her own assertions. The documentary evidence fails to support the proposition that she is a decision maker in the business or that she is even fully cognisant of the overall direction and performance of that business. On balance of the evidence, the Tribunal is not satisfied that the visa applicant “maintained direct and continuous involvement in the management of that business… from day to day and in making decisions that affected the overall direction and performance of that business” in the 12 months prior to the date of application. The Tribunal finds that the primary visa application does not meet clause 845.216.”
61. His Honour went further at [55] to describe the importance of decision making of the requisite character:
“To my mind the key points in this passage are that the first appellant’s role was that of a subordinate administrative assistant and that she did not satisfy the dual requirements that she be involved in the actual management of the business and in making decisions of the requisite character. If she had been a ‘decision-maker’ in the business or had been ‘fully cognisant of the overall direction and performance of the business’ such may have assisted the Tribunal to come a contrary conclusion”.
62. There is no evidence of the applicant making any decisions of the requisite character. In fact, it appears that Ausproperty specifically instructed the applicant to carry out ‘decision-like’ tasks in order to give the impression of senior managerial decision making. In an email dated 13 December 2005 (T792) for example, Cameron McNamara coaches the applicant to obtain insurance:
“It is best if you ring AON Insurance in Perth…and say you wish to take out building insurance for the above property. The law actually says that it is the owner who takes out the insurance and for Paul [from Ausgroup] to ring and say he is you (sic) maybe a bit suspicious.”
63. Similarly to the property developer in Tan at [31], the evidence shows that at all times applicant was heavily involved in his Indonesian business and effectively handed the decision making responsibility to Ausproperty, which is consistent with him being a passive investor.
The applicant seems to admit that he has not actively participated in the day-to-day senior level management of the business
64. There is also evidence in which the applicant seems to admit that he has not actively participated in the day-to-day senior level management of the business. In an email to Paul Johns and Cameron McNamara of Ausproperty on 30 November 2005 (T816) the applicant admits that he is not involved in the running of the business:
“Mr Paul, as you know at the beginning we interested in Ausproperty Advertisement because it is informed that Ausproperty can help on PR Business matter. We contacted Cameron and discussed our PR Business. As our main business is in Indonesia Cameron promise that his property business can help us to fulfil our PR Business condition, without our activity and with 25% equity investment only because the rest will be arranged by Ausproperty through Loan. Since we are not in this business, we make a deal as whole package, Ausproperty will find land, build the house and sell it, and all of the figure shown in the feasibility analysis Cameron gave us.”
65. It appears from this email that the applicant’s primary motivation for investing in Ausproperty was to fulfil his ‘PR Business conditions’ without activity.
Future intentions - s134(1)(c)
66. The applicant claims at paragraph 26 of his statement of facts and contentions that he intends to continue meeting the requirements of s134(1)(a) and (b) and actively pursues development opportunities in Perth. The applicant at paragraph 21 and 22 of his witness statement further cites research into potential property development sites in Kewdale and sourcing Australian laboratory (see exhibit 27) and scientific equipment for export (see exhibit 28).
67. The Tribunal notes however that all 6 units were constructed, sold and settled by July 2006 (see paragraph 15 of the applicant’s witness statement and exhibits 20 - 25). There is no evidence of any activity in the remaining 5 months until the time of cancellation in December 2006. There is no still no evidence of any activity as at the date of the applicant’s submissions on 8 June 2007.
68. The Tribunal further notes that the internet records at exhibit 27 are searches carried out on 22 April 2007, after the date of cancellation. The property report at exhibit 28 is likewise dated 17 April 2007, and it appears to have been produced by Ausproperty. In the Tribunal’s view it is in any event questionable whether it relates to a project involving the applicant or Bio-Optel, as page 6 of that report details the investors ‘Lunasi Tanah’, ‘Sisa DP Tanah’ and ‘Lunasi Rummah’.
69. The Tribunal therefore finds that at the time of cancellation, the applicant did not have a serious future intention, other than in some possible token or vague way, to continue developing property or any other eligible business in accordance with s134(1)(c).
Genuine effort to obtain a substantial ownership interest in an eligible business in Australia and to utilise skills in actively participating at a senior level in the day-to-day management of the eligible business
70. Although there is no statutory definition of genuine effort, numerous authorities have discussed the term and established that it must:
(a)be more than a superficial or token effort. There must be a real and honest effort and not be one which is false, fictitious or a pretence, and mere expressions of interest or inquiries fall short of genuine efforts: Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283.
(b)involve some exertion or endeavour. The requirement is that an effort is made and the respondent contends that this requires some activity on behalf of an applicant. In Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309, and followed in Gunawan v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 852 at [46], [48], the Tribunal found that a genuine effort must be ‘vigorous and determined’.
(c)be a ‘real and sincere endeavour or strenuous attempt’: Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898.
(d)be of a ‘sustained and continuous quality’ in contrast to mere ‘sporadic and desultory activity’: Koosai and Minister for Immigration and Multicultural Affairs [2006] AATA 179.
TRIBUNAL’S FINDINGS
71. The Tribunal finds that like the visa holder in Ng at [21], the applicant has made merely token efforts to satisfy his visa obligations. More importantly in the Tribunal’s view, these efforts were not genuine but consisted of a mere ‘flurry of activity’ or ‘window dressing’, resulting in a ‘façade created by the applicant to give the impression that he was complying with the requirements of his visa, when in fact this was not so’: see also Witjahya and Minister for Immigration and Multicultural Affairs [2006] AATA 1118 at [15].
Section 134(3), MSI factors and the applicant’s efforts in totality
72. Paragraph 4.5.1 of MSI 133 also provides a list of factors which ‘correctly summarises the relevance of s134 (3) to the decision making processes: Re Lok Young (Michael) Wong v Minister for Immigration & Multicultural Affairs [2006] AATA 277. As paragraph 4.5.2 of the MSI points out, failure to meet any one criterion may not necessarily lead to a visa being cancelled. All factors should be weighed as a whole.
(a) business proposals that the person has developed
73. The applicant concedes at paragraph 30 of his statement of facts and contentions that no formal business plans were developed by the applicant.
(b) the existence of formal contracts with partners or joint ventures
74. The Tribunal notes that the applicant had business partners within Bio-Optel and had a business interest with Ausproperty.
(c) research that the person has undertaken into the conduct of an eligible business in Australia
75. The applicant at paragraph 30 of his statement of facts and contentions and paragraph 5 of his witness statement, claims to have conducted research into Australian scientific instruments for export. The applicant has provided an invoice from Photron Pty Ltd at exhibit 16 in support of this.
76. Apart from the evidence being extremely minimal, the Tribunal notes that the invoice is made out to PT Hilab Sciencetama in Jakarta, the applicant’s Indonesian business and not to Bio-Optel (see T50). It appears therefore that the applicant carried out this “research” in his capacity as an owner and director of his overseas business.
77. Overall, in the Tribunal’s view the applicant’s activities in this regard amounted to little more than expressions of interest or enquiries.
(d) the period or periods during which the person has been present in Australia
78. The period or periods during which a person has been present in Australia, unlike active management, is enshrined in the legislation as a relevant factor which the Tribunal must consider pursuant to s134(3)(d). Departmental policy indicates a period of 6 months as acceptable. The applicant was only in Australia for a total of 62 days in the three and a half years prior to cancellation of his visa.
(e) value of assets transferred for use in obtaining an interest in an eligible business
79. Departmental policy indicates that a visa holder is required to transfer and retain at least 50% of funds indicated as available for transfer within two years. At question 14 of the applicant’s application for a business skills visa, the amount of $1,884,396 was indicated as available for transfer (see T54). 50% of this amount is $942,198.
80. The applicant claims in his 24 month survey (see T673) that he had invested $250,000 into Bio-Optel. The applicant also indicates that an additional $50,000 was transferred, but for personal effects. The applicant’s own financial records at exhibit 5 indicate that as at 30 June 2006 the applicant had transferred $1 equity and $209,999 via loans into Bio-Optel. Even on the applicant’s own records the amount transferred for use in an eligible business was a mere 22% of the required amount.
81. The Tribunal further notes that most of the money ‘invested’ was by way of a $209,999 loan. As investment within this context is aimed at securing an ownership interest pursuant to s134(10), it is arguable that only shares, partnership interest or some other more significant proprietary right and obligation is intended. Merely lending money is not sufficient as it does not secure the rights and duties consistent with ownership: see by analogy in Saleh Leo v Minister for Immigration [2006] AATA 308, approved in Gunawan v Minister for Immigration and Multicultural Affairs [2006] AATA 852 and Harsono and Minister for Immigration and Multicultural Affairs [2007] AATA 64.
82. On this view the applicant has transferred the total of $1 for use in obtaining an eligible business in Australia.
(f) value of ownership in a relevant business in Australia that is, or has been, held by the person
83. Department policy indicates a minimum of $100,000 or 10% ownership as sufficient. Although the applicant has only invested a total of $1 in Bio-Optel, the respondent conceded that a 33% ownership interest via ordinary shares nonetheless appears sufficient.
(g) business activity that is, or has been, undertaken by the person
84. Departmental policy indicates a minimum business activity of $100,000 by turnover is sufficient. It should be remembered that this cannot include passive investment such as the purchase of shares. The respondent concedes that Bio-Optel’s sales of $972,954.54 appear to be sufficient.
(h) whether the person has failed to comply with a notice under s137
85. The applicant did not respond to the notice of intention to cancel sent on 7 July 2006. The deadline to respond was 15 September 2006.
Residual Discretion
86. The Tribunal finds that no special or extenuating circumstances exist which would justify the Tribunal using its residual discretion to not cancel the applicant’s visa.
DECISION
87. The Tribunal concludes that the delegate’s decision should be affirmed because:
(a)the applicant has failed to obtain a substantial ownership interest in an eligible business in Australia;
(b)the applicant has failed to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business; and
(c)the applicant has failed to make any genuine efforts to obtain a substantial interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business.
I certify that the eighty seven [87] preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: ................(Sgd. R Riberi)..................................
Associate
Date of Hearing 3 October 2007
Date of Decision 30 November 2007
Counsel for the Applicant Mr N Poynder
Solicitor for the Applicant Fiocco’s Lawyers
Counsel for the Respondent Mr Stephen Ferguson
Solicitor for the Respondent Australian Government Solicitor
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