Surya (Migration)

[2017] AATA 976

Surya (Migration) [2017] AATA 976 (16 June 2017)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Ms Shinta Lakshmi Surya
Mr Eddy Peter Witpeerd

CASE NUMBER:  1514082

DIBP REFERENCE(S): BCC2015/ BCC2015/1137618 BCC2015/1367873 BCC2015/1367875 BCC2015/1367876 BCC2015/1367882 BCC2015/2593114 BCC2016/691800

MEMBER:Mary-Ann Cooper

DATE:16 June 2017

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision not to grant the applicants Business Skills (Provisional) Subclass 188 visas.

Statement made on 16 June 2017 at 3:39pm

CATCHWORDS

Migration – Business Skills (Provisional) visa – Subclass 188 – Ownership interest in main business – Held for at least 2 of the 4 fiscal years immediately before application date – Transfer of shares from father to applicant – Declaration of trust – Concept of trust/trustee not recognised in Indonesia – Ownership less than 30%

LEGISLATION

Migration Act 1958, ss 65, 134(10)

Migration Regulations 1994, Schedule 2, cl 188.225(1), cl 188.311, r 1.03, r 1.11, r 1.11A

CASES

Yu v MIMIA (2004) FCR 126

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 9 September 2015 to refuse to grant the visa applicants Business Skills (Provisional) Subclass 188 visas under s.65 of the Migration Act 1958 (the Act).

2. The applicants applied for the visa on 16 April 2015. The delegate refused to grant the visas on the basis that the first named applicant (the applicant) did not satisfy cl.188.225(1) because she had not demonstrated that she had the required ownership interest in her main business.

3. The applicants appeared before the Tribunal on 24 May 2017 to give evidence and present arguments.

4. The applicants were represented in relation to the review by their registered migration agent who also attended the hearing.

5. For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. The issue in the present case is whether the applicant satisfies cl.188.225(1). Clause 188.225(1) provides as follows:

   188.225

   (1) For at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, the applicant had an ownership interest in one or more established main businesses that had an annual turnover of at least AUD 500 000 in each of those years.

7. Regulation 1.03 provides that a fiscal year is:

   (a)      if there is applicable to the business or investment by law an accounting period of 12 months — that period; or

   (b)      in any other case — a period of 12 months approved by the Minister in writing for that business or investment.

8. ‘Main business’ is defined in r.1.11 as follows:

   [1.11] (1)      For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

   (a)      the applicant has, or has had, an ownership interest in the business; and

   (b)      the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

   (c)      the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

   (i)      if the business is operated by a publicly listed company — at least 10% of the total value of the business; or

   (ii)      if:

   (A)      the business is not operated by a publicly listed company; and

   (B)      the annual turnover of the business is at least AUD400 000;

   At least 30% of the total value of the business; or

   (iii)      if:

   (A)      the business is not operated by a publicly listed company; and

   (B)      the annual turnover of the business is less than AUD400 000;

   at least 51% of the total value of the business; and

   (d)      the business is a qualifying business.

9. Regulation 1.03 defines a qualifying business as being one that is operated for the purpose of making a profit through the provision of goods and/or services (other than the provision of rental property) to the public, and that is not operated primarily or substantially for the purpose of speculative or passive investment. 

10. Section 134(10) of the Act defines an ‘ownership interest’ as an interest in a business as either a shareholder in a company that carries on the business, a partner in a partnership that carries on the business or the sole proprietor of the business (including such an interest held indirectly through 1 or more interposed companies, partnerships or trusts).

    Does the applicant meet cl. 188.225(1)

11. As noted above, Clause 185.225(1) requires the applicant to have had, and to continue to have, an ‘ownership interest’ in 1 or more established ‘main businesses’ for at least 2 of the 4 fiscal years immediately before the time of the invitation.

12. As recorded in the delegate’s decision, a copy of which was supplied with the review application, the application was refused because the applicant had not demonstrated that she held the relevant ‘ownership interest’ in her main business in at least 2 of the 4 fiscal years immediately before the date of invitation to apply for the visa. Specifically, her main business was claimed to be PT Kia Indonesia Motor (PT Kia). Her ownership interest in this business was said to arise by virtue of her shareholding of 32.98% in its holding company, PT Kualita Auto Dinamika (PT Kualita) which in turn held a 52% shareholding in PT Kia. The remaining shares in PT Kualita were owned by her father. On the delegate’s assessment, her shareholding in her main business therefore was 52% x 32.98% = 17.5%, which was below the threshold of the 30% required in the circumstances (r.1.11(c)) for a company that is not publicly listed.

13. In her visa application, the applicant claimed PT Kia Indonesia Motor, in Jakarta Indonesia, as her main business. Documents on the Department’s file demonstrate that PT Kia was established in 2001 and its Articles of Association, as amended in 2008, reflect a 52% shareholding by PT Kualita Auto Dinamika[1].  Financial reports, tax returns and meeting minutes, also on the Departmental files, further demonstrate that the company was at the relevant time actively carrying on a business. In relation to PT Kualita, various deeds, Articles of Association and Meeting minutes also confirm that the applicant and her father were the sole shareholders, the applicant holding 17,150 shares and her father holding 34,850 shares[2].

    [1] DIBP file bcc2015/1367879 f ff1-15 at f5

    [2] DIBP file BCC2015/2593114 ff40-125, at ff118-119.

14. Prior to the hearing the applicant’s representative provided several documents to the Tribunal including the financial statements for PT Kia for 2012 and 2013 and a translated copy of a “Statement on Decision of the shareholders” of PT Kualita. That document, dated 31 March 2015, states that the applicant’s father undertook a “transfer or diversion of share rights” in that company of 29,650 shares from him to the applicant. The document asserted that the applicant consequently holds 46,800 shares in PT Kualita and her father had 5,200 shares.

15. The applicant’s agent contended that this document was a notarial declaration of trust and the applicant’s shareholding of PT Kualita should be regarded as 46,800 shares, or 90 % of the company. Therefore her shareholding in her main business, PT Kia, should properly be calculated as 90% x 52% which meant that it was actually 46.8%, above the required threshold of 30%.

16. The Tribunal wrote to the applicant and sought that she provide evidence substantiating this transfer such as the Certificate of Company Registration for PT Kualita as issued by Indonesian corporate regulator, a historical record of shareholdings and changes to those shareholdings as maintained by the Indonesian corporate regulator and/or the historical record as kept by the company, (e.g. the share register) of the shareholdings in PT Kualita. In response, correspondence was provided from a public notary in Indonesia advising that no such record is required to be kept or advised to the Indonesian corporate regulator in the circumstances. The applicant’s agent provided a further submission in which he reiterated that the applicant’s father has always held the shares for the applicant, his only child, however he is aged and has slightly impaired mental faculty and was therefore unable to provide a statutory declaration in confirmation.

17. At the hearing the Tribunal asked the applicant to explain the document, dated 31 March 2015 which, it was claimed, was a declaration of trust. The Tribunal noted its understanding that Indonesian law did not recognise the concept of ‘trust’ or ‘trustee.’ The applicant agreed but responded that her father had always intended for her to have his shares, that other persons at the workplace and in her family knew this and on her 50^th birthday he had executed the above document.

18. The Tribunal noted the date of the document and outlined the requirements of r.1.11A as it related to claims of beneficial ownership. In particular, that, for the purposes of the Regulations, such a document could not evidence beneficial ownership for any period earlier than the date of registration or stamping by the appropriate authority: r.1.11A(3). The Tribunal told the applicant that, even if the Tribunal accepted the above document as a declaration of trust or some other type of indication that the applicant held a beneficial interest in the shares, it could only consider it as evidence of her beneficial ownership of the shares from the date of the document, that is, 31 March 2015. As her invitation to apply for the visa was dated 8 April 2015, this would mean that she could not satisfy the requirement in cl.188.225(1) that she held the ownership interest for at least 2 of the 4 fiscal years immediately before that date.

19. The Tribunal also noted that her tax returns throughout the relevant prior period, the 2012 and 2013 calendar years, indicated that her shareholding was as initially claimed.[3] Furthermore no information or documents could be discerned on the other Departmental files that demonstrated the applicant’s shareholding in PT Kia (through PT Kualita) was greater than that as assessed by the delegate.

    [3] DIBP file BCC 2015/1367873 (Part 2), ff4 and 21.

20. The applicant’s agent acknowledged the impact of r.1.11A(3) however sought that the Tribunal consider whether it has any discretion in this regard and/or whether a Ministerial intervention request might be appropriate.

21. The Tribunal allowed a further period of time, extended at the applicant’s request, for the provision of any further submissions in this respect and/or documents in support of the claims made.

22. On 8 June 2017 it received a statutory declaration purporting to be from the applicant’s father. In it, among other things, he confirmed that PT Kualita, incorporated on 16 September 2002,  owned 52% of the shares in PT Kia. He declared that at the time of PT Kualita’s incorporation he allocated 37% of the shares to the applicant and held 63% in his name. He claimed that the intention was that the applicant would hold 90% of the shares but that ‘culture dictates I could not let “Shinta” being a female be a major shareholder.’ He acknowledged that he could not record or document this trust because in Indonesia (where he resides) the concept of trust is non-existent. He further declared that in 2015 his daughter decided to migrate to Australia and he decided to return 57% of the shares to her. He said he then went to a notary public to transfer the shares resulting in her having a 90% shareholding in PT Kualita. He declared that she has always been the owner of 90% of the shares and that, apart from holding the shares in trust for her, he and his wife also hold money and her wages as Marketing Director in trust.  

    Is the business a main business in respect of the applicant?

23. The issue in the present case is whether PT Kia Indonesia Motor is a ‘main business’ as defined in r.1.11 in relation to the applicant. The Tribunal has considered whether each element of the definition is met during the relevant period.

24. Regulation 1.11(1)(a) requires that the applicant has, or has had, an ownership interest in the business. ‘Ownership interest’ is further defined in s.134(10) to include an interest in the business as a shareholder , a partner or a sole proprietor of the business and includes an indirectly held interest. On the basis of certified translations of various company documents provided to the Department, the Tribunal is satisfied that the applicant holds 17,150 shares in PT Kualita (or 33%, rounded up) and that PT Kualita has a 52% shareholding in PT Kia [4]. The Tribunal therefore finds that the applicant, as a shareholder in her main business, meets r.1.11(1)(a) for the purposes of cl.188.225(1).

    [4] DIBP file BCC2015/1367879, f1-14, DIBP file BCC2015/1367873, f4 and 20

25. Regulation 1.11(1)(b) is not relevant to the applicant’s circumstances.

26. Regulation 1.11(1)(c) further requires that, if the business is not owned by a publicly listed company, the value of the applicant’s ownership interest, or the total value of the applicant’s and her spouse or defacto’s ownership interest, if the annual turnover is at least AUD400,000, is at least 30% of the total value of the business. As identified in the documents provided to the Department and in submissions made, PT Kia is not publicly listed. Financial documents provided for the calendar years 2012 and 2013 demonstrate that the business, the sole distributor of Kia cars in Indonesia, had an annual turnover significantly in excess of AUD400,000.[5]

    [5] Tribunal file 1514082, ff74-150

27. Notwithstanding documents on the Department’s files demonstrating the applicant’s 33% share ownership of PT Kualita and its 52% shareholding of PT Kia, as discussed above, submissions made on the applicant’s behalf claimed that her former agent did not correctly identify her actual shareholding to the Department. That is, that she actually held a greater share of PT Kualita. In support of this claim a purported “notarial declaration of trust’ [6] was provided. It is asserted that this establishes that the applicant actually holds 90% of the shares in the holding company, PT Kualita, which equates to a 46.8% shareholding in the applicant’s main business, PT Kia. On this basis it is asserted that she meets the required ownership threshold of at least 30% of the value of her main business at the relevant points in time.

    [6] Tribunal file 1514082, ff65-75

28. In relation to the claims of the existence of a trust, the migration legislation recognises that equitable interests in general may be capable of constituting an ownership interest however specific evidentiary requirements apply (r.1.11A). The effect of these is to exclude claims to ownership which cannot be substantially proven by reference to authenticated documents.[7]

    [7] Yu v MIMIA (2004) FCR 126, per Kiefel J at [35].

29. The kinds of documents which are specified in r.1.11A(2) are:

    ·a trust document;

    ·a contract; or

    ·any other document capable of use to enforce the rights of the person to the ownership interest;

    where the document has been stamped or registered by the appropriate authority under the law of the jurisdiction where the ownership interest is located.

30. Regulation 1.11A(3) provides that a relevant document for the purposes of r.1.11A(2) does not evidence beneficial ownership for any period earlier than the date of registration or stamping by the appropriate authority.

31. On the evidence before the Tribunal, one of the documents submitted to it and relied on by the applicant to substantiate her increased shareholding in her main business, has a date of registration or stamping by a Notary Public in Indonesia of 31 March 2015.

32. The applicant later provided a statutory declaration from her father, as discussed above, dated 5 June 2017, in which he declared that he always held his shares in PT Kualita on her behalf. It is unclear on what basis the applicant considers this assists her claim. This may well have been her father’s intention but, absent a document relevantly stamped or registered by the appropriate Indonesian authority under its laws, it is not an ‘interest’ that can be taken into account as demonstrating her ownership interest for the purposes of the Regulations. The Tribunal does not consider it a type of document which satisfies the requirements of r.1.11A(2). Even if it could be characterised as such a document, it could only be evidence of her ownership interest from its date, 5 June 2017: r.1.11A(3). In addition, given the applicant’s earlier responses (paragraph 16) that she could not provide further documentation on the basis of her father’s mental instability, as well as the fact that the statutory declaration is not accompanied by evidence of the identity of its author, the Tribunal attaches little weight to it.

33. As noted above, and discussed at the hearing, cl.188.225(1) requires that the applicant hold the relevant ownership interest ‘for at least 2 of the 4 fiscal years’ before the time of invitation. Notwithstanding the applicant’s claims that her father’s shares were always held on her behalf, r.1.11A(3) only allows the Tribunal to consider the relevant trust, contract or other document from the its date stamp or registration. The only document before the Tribunal which it considers might relevantly be taken into account is the purported declaration of trust dated 15 March 2015.

34. The Tribunal is satisfied from the evidence on the Department’s file that the applicants were invited to apply for the subclass 188 visas on 8 April 2015 and did so on 16 April 2015. On the basis that the main business is located in Indonesia, the Tribunal considers it is appropriate, when construing the relevant ‘fiscal year’, to use the Indonesian fiscal year, which is the calendar year.[8] Accordingly, the last 4 fiscal years that can be considered for the purposes of assessment under cl.188.225(1) are the 2011, 2012, 2013 and 2014 fiscal years.

    [8] accessed 15 June 2017

35. On the basis of the application of r.1.11A(3), it follows that the Tribunal cannot take in to account the claimed beneficial interest of the applicant in the shares as reflected in the document dated 15 March 2015, purporting to create the trust/declaration a trust, because that interest was not held for at least 2 of the 4 fiscal years before the date of the invitation on 8 April 2015.

36. Even if the Tribunal considered the document provided to it is more appropriately construed  as a ‘gift’ of the relevant shares, again the gift was made on 31 March 2015 and again the applicant could not meet the requirement that she held the increased shareholding for at least 2 of the relevant 4 year period prior to the invitation.

37. The Tribunal is not satisfied that any of the other documents relied upon or provided by the applicants establish a beneficial ownership in PT Kia as contemplated by r.1.11A, or any other ‘ownership interest’ as defined under section 134(10) of the Act.

38. Other documents on the Department’s file demonstrate that the applicant, through another company, held shares in an Australian registered company, Golden Taste Investment Pty. Ltd. As noted by the delegate, however, the ASIC records indicate her relevant interest commenced in November 2014. Therefore, at the date of the invitation, she cannot demonstrate she held an ownership interest in this business for at least 2 of the 4 previous fiscal years.

39. Having carefully considered all the documents and submissions before it, the Tribunal makes the following findings:

    ·     In the four fiscal years immediately before the date of invitation to apply for the visa, the applicant owned 33% of the shares in PT Kualita Auto Dinamika.

    ·     In the four fiscal years immediately before the date of the invitation to apply for the visa, PT Kualita Auto Dinamika owned 52% of the shares in the applicant’s main business, PT Kia Indonesia Motor.

    ·     The value of the applicant’s ownership interest (shareholding) in the main business, in the four fiscal years immediately before the date of the invitation to apply for the visa, is 52% x 33% = 17.16%.

1. Therefore the Tribunal is not satisfied that the applicant meets the requirements of r.1.11(1)( c) of the definition of ‘main business’ because the value of her shareholding in her claimed main business, which was not operated by a publicly listed company, was less than 30% throughout the relevant period.

2. It follows that, for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, the review applicant has not demonstrated an ‘ownership interest’ in one or more established main businesses, as defined by r.1.11. Therefore that the requirements of cl.188.225(1) are not met.

3. As there is no evidence that the applicant was engaged in one or more businesses providing professional, technical or trade services, the requirements of cl.188.225(2) are not relevant to this application.

   CONCLUSION

4. For the above reasons the applicant does not meet the requirements of cl.188.225 and the decision under review must be affirmed.

   Secondary applicant.

5. The delegate also refused a visa to the secondary applicant, the partner of the visa applicant and who is included in her application.

6. There is no claim or any evidence before the Tribunal that the remaining applicant meets the primary criteria for the grant of the visa. In addition, to meet clause 188.311, the secondary applicant must be a member of the family unit of a person who, having satisfied the primary criteria, is the holder of a subclass 188 visa. As the applicant does not satisfy the primary criteria for a subclass 188 visa, or any other subclass, the Tribunal finds that the secondary applicant also does not satisfy clause 188.311 and, therefore, the criteria for a subclass 188 visa, or any other subclass.

   DECISION

7. The Tribunal affirms the decision not to grant the applicants Business Skills (Provisional) Subclass 188 visas.

   Mary-Ann Cooper
   Member