Susanto and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 470
•12 May 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 470
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2002/349
GENERAL ADMINISTRATIVE DIVISION ) Re BUDI SUSANTO Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Murray Allen, Member Date12 May 2004
PlacePerth
Decision The decision made by a delegate of the respondent on 30 August 2002 to cancel the business skills visa of the applicant is affirmed.
.........(sgd M Allen)................
Member
CATCHWORDS
Immigration – cancellation of business skills visa – applicant has not acquired a substantial ownership interest – the corporation of which the applicant is a shareholder does not conduct a business or an eligible business in Australia – business transactions in Australia were part of a business conducted by the applicant in Indonesia – applicant has not made genuine efforts to acquire an ownership interest in an Australian business or to be involved in the day to day senior management of that business – residual discretion to not cancel the applicant’s visa not exercised – decision under review affirmed
Migration Act 1958 sections 134, 135
Migration Series Instructions 133
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283.
REASONS FOR DECISION
12 May 2004 Mr Murray Allen, Member 1. On 30 August 2002 a delegate of the respondent cancelled the business visa held by the applicant, Mr Budi Susanto (the applicant), pursuant to sections 134 and 135 of the Migration Act 1958 (“the Act”) and at the same time cancelled secondary business visas held by his wife and three adult children. The applicant now applies to the Tribunal for review of that cancellation decision in relation to his visa. No applications have been made for review of the decisions made in respect of the secondary visas held by the members of his family.
2. At the hearing of the matter the applicant represented himself, appearing by telephone from Indonesia, with the assistance of an interpreter. The respondent was represented by Ms Andretich, an officer of the Australian Government Solicitor. The Tribunal received into evidence the documents tendered pursuant to Section 37 of the Administrative Appeals Tribunal Act (T1 – T16 and S1 – S7) as well as one further document tendered by the respondent (R1). The applicant gave oral evidence. The parties were invited to file written submissions after the hearing and the respondent did so, but the applicant filed a copy of a Statement of Facts and Contentions that had been filed previously by his former solicitor.
3. The background to the matter is that the applicant and the secondary visa holders were granted a Subclass 127 Business Skills Visa on 5 May 1999 and the applicant first entered Australia under that visa on 12 May 1999. Between the date of the first entry under the visa and the date of the cancellation the applicant spent a total of 82 days in Australia. By letters dated 29 April 2002 the respondent’s department gave notice of intention to cancel the visas and invited representations by 5 June 2002. The grounds specified for the cancellation of the visa were that the applicant had not satisfied the requirements of s134(1) of the Act and the delegate was not satisfied that the applicant had made, or intended to make, the genuine efforts referred to in s134(2) of the Act.
Consideration
4. Under s134(1) of the Act the Minister may cancel a business visa if the Minister is satisfied that the holder of the visa has not satisfied any one of the three matters specified in that sub-section, namely, that the 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 do those two things in relation to an eligible business in Australia.
5. The first question that must be addressed is, therefore, whether any one of the above three factors are satisfied in this case. The documentary material and the oral evidence given by the applicant shows that in September 2000 he registered the business name “Sinar Sari”, which was to be a business that would export Australian products. A company, Sinar Sari Pty Ltd, was incorporated in August 2001 for the purpose of carrying on such a business, with the applicant, his wife and two daughters each holding one $1.00 share and each being a director. There is no evidence that any steps were taken to conduct research into possible export products or to locate markets for those products outside Australia until May 2001. I note that in April 2001 the respondent’s department had sent to the applicant a 24 month survey form seeking information about his business activities in Australia.
6. In May 2001 contact was made with a company (Hannay Douglas) that supplies Australian fruit and on 16 May 2001 Sinar Sari purchased oranges with a value of $45,082 for shipment to Indonesia. It appears from the shipping documents that the oranges were consigned to an Indonesian company by the name of PT Sarana Karya Sentra Sentosa, which the applicant described as a broker who arranged for the clearance of the goods through Customs, but the applicant’s evidence was unclear as to whether he had found the eventual purchasers in Indonesia for the oranges or whether the consignee had been responsible for finding eventual buyers. No documentary or other evidence was produced by the applicant as to the identity of the eventual purchasers or the sale price achieved. However, in the T documents at page 164 is a profit and loss statement for Sinar Sari for the year to 30 June 2001. That statement records purchases for sale of $45,090 and income from “export sales” of $45,090 and “commission received” of $1,500. After various minor expenses the statement records a nett profit for the year of $1,497.
7. In his response to the 24-month survey, provided in June 2001 (T10) the applicant advised of the establishment of Sinar Sari and that one person was employed part-time (less than 30 hours per week) in that business. He advised that he usually worked 10 – 20 hours per week in the business and said that he had invested $45,090 in the business since he had become its owner. The applicant also advised that he was “still actively involved” in a business in Indonesia named Toko Mebel Sinar Sari.
8. In September 2001 a number of letters were sent by Sinar Sari to possible suppliers of food products that might be exported to Indonesia. All of those letters were signed by the applicant’s daughter, Anita, in her capacity as a director of the company. It appears that one of the possible suppliers informed Anita of the identity of their existing Indonesian agent but there is nothing to indicate that any contact was made with that agent.
9. The next transaction involving Sinar Sari was in December 2001 when an order was placed with an Australian company, Manildra Flour Mills, for the purchase of flour with the value of $48,937. The flour was dispatched from Australia in March 2002, consigned to an Indonesian company named PT Jofika Bumiartha. No evidence has been provided as to the identity of the eventual buyer of the flour or the sale price.
10. In May 2002 Sinar Sari received an enquiry from an Indonesian business known as Alam Sari enquiring about prices for the possible supply of frozen beef offal. The applicant said in his evidence that the principal of that business is a cousin of his and that no export from Australia of offal had eventuated, although the applicant had arranged one shipment of beef offal to Indonesia from China.
11. A third transaction of Sinar Sari involved the purchase in March 2002 of pears from an Australian company to the value of $20,136. Once again there is no documentary or other evidence concerning how these goods were disposed of in Indonesia or the sale proceeds that were achieved. However, the financial statements for Sinar Sari for the period 1 July 2001 to 31 March 2002 records purchases of $69,073 (representing the purchase of the flour and pears) and income of “export sales” of $69,073 and “commission received” of $1,381. For the 9 month period, Sinar Sari recorded an operating profit of $764 after other expenses were taken into account (T documents at page 201).
12. In his oral evidence the applicant said that he had operated the Indonesian business Toko Mebel Sinar Sari for some years but that he had given the business to his daughter, Antonia, some time after he had been granted his visa for Australia. He was uncertain when that gift had been made to Antonia but eventually thought that it may have been about the time she had returned to live in Indonesia in September 2001 after completing her studies in Australia. The applicant said that he no longer had any ownership interest in that Indonesian business, nor was he a director of the company.
13. However, the applicant said that he did have another business in Indonesia that involved the importing from China of furniture and food products. This business generates a profit of approximately AUD$40,000 per annum to the applicant. The applicant said that he spent about 3 – 4 hours each days on all his business activities and that most of this time was devoted to the import activities of goods from countries other than Australia.
14. The applicant said that Sinar Sari had operated from an address in Exhibition Street in Melbourne which was rented by him until December 2002. His children had lived at that address whilst studying in Australia. The applicant said that one of the rooms had been set aside for Sinar Sari’s business and he had used that room for business purposes when he was in Australia.
15. For the purposes of s134(1)(a), and assuming for the moment that Sinar Sari constituted a business, I am satisfied that the applicant had an ownership interest. He was the registered proprietor of the business name and became a 25% shareholder in the company when it was established. However, I am not satisfied that his ownership interest was a substantial one. The balance sheet of Sinar Sari (T documents, page 200) shows that at March 2002 the company had total assets of $13,134, most of which was made up of trade debtors although there is no evidence of who those debtors were. The company had liabilities of $12,365, most of whom were trade creditors and the applicant is shown as having made a loan of $2,405. The owners equity in the company was $768.00. Although the applicant and his family members obviously own all the capital of the company and control it, the extent of the applicant’s investment in the company cannot, in my opinion, be said to be substantial.
16. However, there is a more fundamental problem for the applicant in that I am not satisfied that Sinar Sari carried on a business at all in Australia. Although the company has some of the indicia of a business – such as holding an Australian Business Number and registration for GST, prepared periodic financial accounts, and submitted business activity statements - in my opinion the business can more properly be seen as a part of a larger business activity conducted by the applicant in Indonesia involving the import of goods into that country from a number of others countries, principally China. The goods purchased by Sinar Sari in the three transactions described above were sold (to unidentified purchasers) at the same price that they had been purchased at and Sinar Sari’s “profit” came from what the financial statements refer to as “commission”. On the balance of probabilities I find that Sinar Sari’s business activities were part and parcel of the larger business operated by the applicant in Indonesia and it did not operate a business in its own right in this country of the type contemplated by s 134(1)(a).
17. It follows that Sinar Sari could not be conducting an eligible business in Australia. I do not doubt that the three transactions that Sinar Sari was involved in brought some economic benefit to Australia in terms of the export of goods and the indirect benefits to the production chain that that involved. Nevertheless, those transactions, in my opinion, must be seen as part of an Indonesian import business rather than an Australian export business.
18. It follows that, in my opinion, the ground for cancellation of the applicant’s visa under s 134(1)(a) of the Act did arise. That being the case, it is unnecessary for me to consider whether the applicant was actively involved at a senior level in the day-to-day management of an eligible Australian business, because there was no such business. It is apparent that the applicant was involved to some extent in the transactions that were undertaken in Australia, although it is also apparent that at least his daughter Anita was involved to some degree, but once again it is clear from the applicant’s evidence that the vast majority of his time was spent in Indonesia working on his importing business in that country and the Australian activities must be seen in that light.
19. Having concluded that the power to cancel the applicant’s visa did arise under s 134(1), I must then consider whether the provisions of s134(2) apply, which would prevent the cancellation of the visa. Sub-section 134(2) relevantly provides that the visa must not be cancelled if the visa-holder has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business and intends to continue to make such genuine efforts. Section 134(3) provides that for the purpose of deciding whether a person has made those genuine efforts, 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 the 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:
(j)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).”
20. Migration Series Instruction 133 (MSI 133) provides guidance in the interpretation of the factors that may be taken into account and, although these are not binding on the Tribunal, there is good reason why they should be applied in the interests of consistency of decision making: see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695 and 696, per Davies J. The weight to be given to the various factors specified in MSI 133 regarding the assessment of genuineness of effort was considered by the Tribunal in Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283. At [53] the Tribunal concluded that “there is a requirement of a level of effort beyond that which is purely superficial or token” but that relevant genuine efforts should not be rejected only because they fall short of the examples given in s134(3).
21. On my assessment of the evidence the applicant has not made a genuine effort to obtain a substantial ownership interest in an eligible Australian business. In the 39 months prior to the cancellation of his visa he had spent a total of only 82 days in this country and it is apparent that he spent the vast majority of his time in Indonesia working on, initially, the business that he had operated for some years and subsequently the business of importing goods into Indonesia from a number of countries. The applicant’s evidence was that it was difficult to make significant profits from the import of Australian goods into Indonesia for currency reasons and because the same goods were available at cheaper prices from other countries. Although the Australian activities were given a corporate form with some of the indicia of a business, there is no evidence of any sustained attempts to identify products or to follow up the preliminary inquiries that were made by the applicant’s daughter. I do not underestimate the difficulties of establishing a new business in this country, but there is no evidence that the applicant undertook in any systematic way the identification of business opportunities here. In addition, there are some aspects of the applicant’s case that suggest he has exaggerated his interest in establishing a business in this country. For example, in the 24 months survey response the applicant stated that he had transferred $150,000 to this country but in his evidence at the hearing he was unable to identify when that had occurred, into what bank account the money had been deposited, or what the money had been used for. In addition, from his evidence it was apparent that his interest in spending more time in Australia was dependent upon finding a business that could generate more profits than his existing Indonesian business. He said that he could not promise to spend substantially more time in Australia even if he retained his business visa because he thought he could not stay here too long and would have to see what his business needs in Indonesia were.
22. Taking into account the small number of transactions that the applicant has been involved in in Australia, their relatively small value and the obvious interrelationship of those transactions with his other business in Indonesia, I am not satisfied that the applicant has made the genuine efforts required by subsection 134(2) of the Act. Accordingly, that subsection does not prevent the cancellation of the applicant’s visa.
23. I retain however, a residual discretion to not cancel the applicant’s visa. The applicant identified no factors in addition to those set out above that might be relevant to the exercise of this discretion. He said that he had purchased land in Australia prior to the granting of his visa but he had sold it during the time that he had his visa. He does not presently own any other property in Australia. His three children have all studied in Australia but have now all returned to live in Indonesia. Antonia returned in September 2001, Anita in December 2002 and his son, Muliadi, in the middle of 2003. The applicant said that all of his children would like to return to live in Australia but no evidence was given of any hardship that would result to them or his wife if all of the visas were cancelled.
24. Taken overall, I am satisfied that the applicant has not displayed any significant desire to spend the majority of his time in Australia and he has done nothing to establish his family as permanent residents in this country in a way that would indicate that the discretion not to cancel his visa should be exercised in his favour. In all the circumstances of the case I am not prepared to exercise that discretion in his favour and, accordingly, I affirm the decision made on 30 August 2002 to cancel the business visa held by the applicant.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member
Signed: ................(sgd V Wong)...............................
AssociateDate/s of Hearing 31 October 2003
Date of Decision 12 May 2004
Counsel for the Applicant In person
Counsel for the Respondent Ms J Andretich
Solicitor for the Respondent Australian Government Solicitor
2
3
0