Sutandeo and Ors and Minister for Immigration and Multicultural and Indigenous Affairs - [2004] AATA 417

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [2004] AATA 417

ADMINISTRATIVE APPEALS TRIBUNAL N° V2003/407, N° V2003/408

N° V2003/409, N° V2003/410

GENERAL ADMINISTRATIVE DIVISION

Re: DANNY SITOLANG SUTANDEO
AND ANITA ARIJANI AND
VERONICA SUTANDEO AND
STEPHANUS ADE SUTANDEO

Applicants

And:MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal: Mr W.G. McLean, Member

Date: 15 April 2004

Place: Melbourne

Decision:The Tribunal sets aside the decisions under review and remits the matter to the respondent with the direction that the business skills visas held by Danny Sitolang Sutandeo, Anita Arijani, Veronica Sutandeo and Stephanus Ade Sutandeo should not be cancelled under s 134 of the Migration Act 1958.

(sgd) W.G. McLean
Member

MIGRATION AND CITIZENSHIP ‑ cancellation of business skills visas ‑ whether applicant (Danny Sitolang Sutandeo) has a substantial ownership interest in an eligible business in Australia – whether applicant is utilising his skills in actively participating at a senior level in the day to day management of the business – whether secondary visas held by applicant’s family unit should be cancelled – decision set aside

Migration Act 1958 ss 134(1), 134(2), 134(4), 134(6), 134(10), 82(2)

Dainty and Minister for Immigration and Ethnic Affairs (1987) 12 ALD 416

Re Lau and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703

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

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

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

Re Jo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 77

REASONS FOR DECISION

15 April 2004 Mr W.G. McLean, Member

The Tribunal considered an application from Mr Danny Sitolang Sutandeo (N°V2003/407) (the applicant) for the review of a decision made by an officer of the Department of Immigration and Multicultural and Indigenous Affairs (the Department) made on 6 March 2003 under s 134 of the Migration Act 1958 (the Migration Act). The officer decided on behalf of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) to cancel the applicant’ business skills visa. Applications for review of the respondent’s decision to also cancel the visas held by the applicant’s spouse Ms Anita Arijani (N°V2003/408) and his daughter Veronica Sutandeo (N°V2003/409) and his son Stephanus Ade Sutandeo (N°V2003/410), on 6 March 2003 under s 134 of the Migration Act, were also reviewed.
The Tribunal received into evidence the documents lodged pursuant to s 37 of the Administration Appeals Tribunal Act 1975 (the T-Documents) and exhibits marked A1 to A6, tendered by the applicant, and exhibit R1, tendered by the respondent.
Mr R. Randall, of counsel, appeared for the applicant and Ms V. Priskich, a solicitor from Blake Dawson Waldron, appeared for the respondent. Sworn oral evidence was given to the Tribunal by the applicant with the assistance of an interpreter of the Indonesian language. Sworn oral evidence was also given by Ms Carolyn Arman, Mr Ronald Buying Sitolang and Mr Alvin Rajwanth on behalf of the applicant.
The applicant was granted a sub-class 127 visa under the Business Skills Migration Business Owner category on 28 September 1999. The following members of his family unit (the secondary visa holders) were also granted visas on that date:
Applicant’s spouse:            Ms Anita Arijani
Dependent one:                 Ms Veronica Sutandeo
Dependent two:                 Mr Stephanus Ade Sutandeo
Dependent three:               Mr Ronald Buyung Sitolang

The respondent cancelled the visa of the applicant, his spouse and dependants one and two on 6 March 2003, under s 134 of the Migration Act. The applicant, his spouse and dependent one reside in Indonesia and dependent two resides in the United States of America. The respondent decided not to cancel the visa of Ronald Buyung Sitolang as it was determined by the respondent that his Business Skills Visa ceased to be in effect because he held another substantive visa pursuant to s 82(2) of the Migration Act.
The applicant first arrived in Australia on 29 September 1999, and has been in Australia on the following occasions from that date until the date of the cancellation of his visa by the respondent on 6 March 2003:
Arrival Date  Departure Date
29 September 1999           2 October 1999
14 April 2000  23 April 2000
14 August 2000                 19 August 2000
10 April 2001  16 April 2001
26 February 2002              3 March 2002
15 August 2002                 20 August 2002
16 October 2002                26 October 2002
23 November 2002            28 November 2002
8 January 2003                  13 January 2003
7 February 2003                12 February 2003
The applicant is employed in Indonesia as the General Manager and a Director of an Indonesian company named P.T. Sasa Inti (Sasa) that manufactures monosodium glutamate for food products. The applicant is also the branch manager for the holding company of Sasa, named P.T. Rodamas (Rodamas Group) and is in charge of its East Indonesian operations. The applicant has been employed by the Rodamas Group for 30 years and was 64 years of age on 24 October 2003. The applicant plans to retire from his Indonesian employment in 2005 and to relocate from Indonesia to live in Australia with his spouse and family on a permanent basis.
On 13 July 2001, the applicant transferred a sum of $46,085.11 into a Commonwealth Bank account in the name of Mr D.S. Sutandeo and Mrs A. Arijani. On 17 August 2001, the applicant invested the sum of $210,000 in his own name in Commonwealth Bank securities. The applicant subsequently conducted share trading activities in his own name with some of these funds and invested a further $50,000 into his share portfolio and bank security investments in Australia in 2003.
On 12 March 2002, a corporation named Aarond Pty Ltd (Aarond) was registered by the applicant in the state of Victoria. The applicant owns 500 shares of $1.00 each, his spouse owns 300 shares of $1.00 each and his son, Ronald Sitolang owns 200 shares of $1.00 each. The applicant, therefore, has a 50 per cent equity interest in the company. The applicant is a Director of the company, as is Ronald Sitolang, who is also appointed the Secretary of the Company. The parties are in agreement that it is the business of Aarond that is to be considered by the Tribunal for the purpose of determining whether the respondent may cancel the applicant’s business visa under s 134 of the Migration Act.
The trading statements of Aarond for the year ended 30 June 2003 indicates that the company had sales for the year of $453,892.70, made up of sales from export of salt of $130,176.61, telephone card sales of $317,860.00 and comic book and video compact disc (VCD) rentals of $5,856.09 which returned the company an overall profit before tax of $645.64. The balance sheet of Aarond as at 30 June 2003 records that the company had acquired fixed assets with a net value after depreciation totalling $45,928.63 made up of a motor vehicle $35,106.00, furniture and fittings $1,800.11, computer $3,167.78 and comic book and VCD library of $5,854.74. The company is largely funded from Directors' loans of $82,106.84 at 30 June 2003. The parties agree that to the date of the cancellation of the applicant’s visa by the respondent on 6 March 2003, the applicant had loaned a total of $86,196.00 to Aarond and that the above-mentioned Directors' loan amount of $82,106.84 at 30 June 2003 is understated.
On 12 May 2003, a Salt Sales Agreement was completed between Aarond and the applicant’s Indonesian employer Sasa. Clause 1.4.1 of the agreement indicates that the buyer (Sasa) shall pay the seller US$28.50 per tonne spout trimmed FIS Buyers’ warehouse in Surabaya. The term of the agreement is May 2003 to December 2003.
Aarond purchases salt for export to Sasa from Dampier Salt Limited (Dampier) of Perth, Western Australia. It appears from an invoice issued by Dampier dated 28 May 2003 that Aarond completed its only export to Sasa for the financial year ended 30 June 2003 on 25 May 2003 which is subsequent to the cancellation by the respondent of the applicant’s visa on 6 March 2003. Dampier’s invoice to Aarond on 28 May 2003 is in respect of 3000 tonnes of salt at US$28.50 per tonne, amounting to US$85,500.00, shipped on MV Bright Laker on 25 May 2003 from Australia to Tanjung Perak, Surabaya, Indonesia. It would appear that the Dampier sale price of US$85,500.00 converts to AU$130,176.61 recorded in the company's trading statement for the export of salt for the year ended 30 June 2003.
On 8 April 2003, Aarond entered into a salt sales agreement with Dampier. The term of the agreement was for a period from 15 April 2003 to 31 December 2003 and was in respect of the purchase of 10,000 tonnes of salt, at US$28.50 per tonne, evenly spread over four shipments FIS by Dampier to Aarond’s warehouse in Surabaya, Indonesia. Aarond does not own a warehouse in Indonesia; however, it has a cooperative agreement with a warehouse owner in Surabaya who receives the bulk salt exported by Dampier and packages the salt for delivery to Sasa. The applicant gave evidence that Sasa pays all of the warehouse and delivery costs that arise after the salt is received into the warehouse from Dampier.
Notwithstanding that the Aarond-Dampier agreement and all subsequent Dampier invoices to Aarond specify and charge a cost of US$28.50 for the supply of salt, Aarond has a private agreement with Dampier to only remit US$28.00, granting Aarond a discount/commission of US$0.50 per tonne. Aarond purchased 18,000 tonnes of salt, from Dampier in 2003, which exceeded the agreement by 8,000 tonnes and produced a gross profit margin before costs for Aarond of $9000 (i.e. 18,000 tonnes at US$0.50 per tonne).
On 1 March 2003, Aarond entered into a lease agreement with L&L Global Investment Pty Ltd in respect of its lease of Suite 204, Level 2, 258 Little Bourke Street, Melbourne. The lease agreement schedule indicates that the premises is to be used for “office and retail shop including sale of phone cards, CDs, mobile phones, computers, books and imported comics and other paraphernalia as permitted by the council”. The term of the lease is for two years from 1 March 2003 with an option for two further terms of two years. The lease is executed by Ronald Sitolang for Aarond, who is described in the document as “Sole Director and Secretary”. It appears that the phone card, VCD rentals and comic book rentals (i.e. all non salt export business) are transacted by Aarond under the trade name “Bee-Happy”:
The following relevant legislation is provided by the Migration Act:
134. Cancellation of Business Visa
134.(1)Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or(c) does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.
(2)          The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
(3)          Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a)business proposals that the person has developed;
(b)the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g)business activity that is, or has been, undertaken by the person;
(h)whether the person has failed to comply with a notice under section 137;
(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
(3A)        Subject to section 135, the Minister may cancel an investment-linked visa (other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(4)          Subject to subsection (5) and to section 135, if:
(a)the Minister cancels a person's business visa under subsection (1) or (3A); and
(b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and
(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;
the Minister must cancel the other person's business permit or business visa by giving written notice to that person.
(5)          The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.
(6)          The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.
…
(10)        In this section:
eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
…
member of the family unit has the meaning given by the regulations.
ownership interest, in relation to a business, means an interest in the business as:
(a)a shareholder in a company that carries on the business; or
(b)a partner in a partnership that carries on the business; or
(c)the sole proprietor of the business; including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
The applicant gave sworn oral evidence in support of his following written statement dated 3 February 2004 (Exhibit A3):
BACKGROUND
1.        I was born in Bandarmasin, Indonesia, on 24 October 1939 and am presently aged 64 years old.
2.        Given the political instability in Indonesia, I decided to migrate to Australia and applied in February 1998. On 28 September 1999, I was granted permanent resident status (subclass 127) under the Business Skills Migration Business Owner category. Included in this application were members of my family, being my wife and my children. I first arrived in Australia with each member of my family on 29 September 1999.
3.        The timing was unfortunate as there had been race riots in Indonesia and the Indonesian dollar was at its lowest. The exchange rate was poor.
4.        My son, Ronald, was already in Australia studying since 10^th of June 1996.
5.        In order to fund my business operations in Australia, I continued my employment as the general manager of P.T. Sasa Inti, an Indonesian company which manufactures monosodium glutamate for food products (Sasa Inti).
6.        I also act as a Branch Manager for the holding company, P.T. Rodamas (Rodamas Group) in charge of the East Indonesian operations of the company.
7.        Rodamas has also other joint ventures with 15 other companies in areas such as air-conditioning (Mitsubishi), glass for commercial, building and car industries (Asahimas), biscuits (Nabisco), soaps, conditioner, shampoo and detergent (Kao) among others. It is one of the largest groups in Indonesia. The Rodamas Group is the distributor for all the products of these companies in which they have formed joint ventures in the various industries.
8.        I have been with the Rodamas Group for 30 years and have extensive experience in the food and export industry, as well as business contracts to market Australian products. They are one of the largest privately owned companies in Indonesia.
9.        Sasa Inti is a separate entity from my company, Aarond Pty Ltd. I do not hold any shares in Sasa Inti nor in the Rodamas Group.
BUSINESS ACTIVITES IN AUSTRALIA
10.      Due to my heavy work commitments in Indonesia, on which my family and I depend for our livelihood, I was not able to abdicate my responsibilities and move over to Australia immediately. Instead, I have scaled down my involvement and explained to my employer that I would leave after training my replacement and parting with my skills in order that I could permanently settle in Australia without too much disruption.
11.      After I first migrated to Australia in 1999, I was unsure of what to do but continuously looked for opportunities available. I am careful by nature and wanted to make sure that any business I invested in was feasible and viable. I have always held a senior management position in a large company but have no experience in small business and made relevant enquires to understand the Australian system and structure of businesses.
12.      On 13 July 2001, in preparation for the capital funding, I transferred a sum of $46,085.11 into a Cash Management Call Account with the Commonwealth Bank (see T-8, page 28 of the T-documents).
13.      In August 2001, I also deposited a sum of $210,000.00 as fixed term deposit with the Commonwealth Bank (see T-11, page 39 of the T-documents). A name card of the Personal Banker of the Commonwealth Bank is annexed hereto and marked “A”. I made initial enquiries with this person about the business climate in Australia and investment opportunities.
14.      I also travelled to Brisbane to make enquiries with the Australian Company CSR Limited, in relation to export of molasses to Indonesia. Unfortunately, with the exchange rate and Indonesian currency being low at the time, I could not see that it was a viable business.
15.      I continued my heavy work schedule with the Rodamas Group whilst continuing to look for opportunities and worked towards the time frame of three years in which to try and set up business in Australia. I believed that there was no expectation or requirement that I discontinue any business outside Australia whilst trying to set up business in Australia.
16.      In the meantime, I also conducted share trading in an effort to understand the Australian share market and businesses as well as to increase my share portfolio and capital funds available for investment in Australia (see page 85-114 of the        T-documents).
17.      I sought professional services of a public accountant, Mr Brian Jones for professional advice and guidance for ideas on establishing business in Australia (see T-15, page 59 of the T-documents).
18.      On 12 March 2002, I registered the Australian Company, Aarond Pty Ltd (Aarond). I am the majority shareholder with 50 per cent of the shares, while I gave my son Ronald 20 per cent, with my wife having the remainder 30 per cent of the shares. I am also a director and officer of Aarond and have controlling interest as well as full charge of the company’s business activities and fully fund the company (see T-16, pages 61-81 of the T-documents).
19.      These funds are available and continue to be available for use by Aarond.
20.      I looked at exporting Aloe Vera food and natural care products to Indonesia as previously stated (see T-54, T-55 and T-72, pages 157 and page 171 and pages 191-198 of the T-documents respectively). However, since negotiating the distribution agreement, I have conducted four months of market survey of the local market and concluded that the business was not feasible for the following reasons:
-due to the exchange rate and high Australian currency, the selling price was too high compared with products from other brands such as Unilever and local products
-I could not find a local joint venture partner
-It was difficult to compete with the cheaper more well known brands already established in the local market
However, the following business efforts have proved to be more successful.
A) EXPORT OF SALT TO INDONESIA
21.      After exploring various business opportunities without success, I decided to try and establish a business in the industry I was familiar with and identified through my work with Sasa Inti that there was a need to export Australian salt to Indonesia. I could see the local Government in Indonesia restricting import licences which worried the company Sasa Inti, as the local salt producers could not guarantee the company a high standard of purity of salt and mostly it was mixed with other minerals which was not of use to Sasa Inti or many of the other chemical manufacturers in Indonesia. I saw an opportunity to export Australian salt as it had a higher grade of purity and negotiated for the company to obtain the import licence required and secured their sales commitment to purchase the Australian product.
22.      Having researched the market and government regulations as well as sourced customer demand, I made the relevant enquiries of Austrade on or around mid 2002 and actively sourced the Australian products for promotion, marketing or selling to the Indonesian market as well as worked on a business plan (see T-74, pages 205-228 of the T-documents). All this takes time.
23.      I set about sourcing for a supplier of raw salt for export to Indonesia. I made contact with Mr G. Sutanto from the Australian Trade Commission, who introduced us to three salt suppliers in Australia, namely Australia Dampier Salt Ltd (Dampier), Shark Bay and UNSRO.
24.      Business negotiations are never easy nor quick and it takes time to build a relationship of trust necessary for successful trading ventures.
25.      Following various negotiations with suppliers, I decided that Dampier offered the most competitive pricing. Negotiations proceeded slowly as Dampier is a large company and I needed to make preparations for the export from Australia and also the importation in Indonesia. Issues such as quantity and quality of the shipment together with pricing were also negotiated with Dampier on the one had and I identified customers including Sasa Inti in Indonesia. As an import permit was necessary, I relied on Sasa Inti and needed to persuade the company to obtain the relevant import permits in Indonesia in order to be able to bring in the quantity of Australian salt I wanted to distribute.
26.      In January 2003, I flew to Perth to meet with Dampier’s representatives, Mr A. Rajwanth and Mr Bradstone to discuss an agreement with them for the supply of salt to Aarond for export to Indonesia.
27.      On 8 April 2003, following several rounds of discussions, Aarond and Dampier entered into an agreement for the shipment by Dampier of 10,000 tonnes of salt in four evenly spread shipments to a factory in Surabaya, Indonesia, for further processing and on-sale. A copy of the signed contract and confirmation of discussions is annexed hereto and marked “B”.
28.      On 12 May 2003, I negotiated a contract with the Indonesian company, P.T. Sasa Inti to purchase the salt exported by Aarond for Australia. Sasa Inti will then process the salt and on-sell the finished product.
29.      On 28 May 2003, the first container of salt worth US$85,500.00 was exported by Dampier to Surabaya. P.T. Sasa Inti. (sic) After the first shipment, the representatives from Dampier, Mr A. Rajwanth and Mr Bradstone few to Surabaya to meet with me and we evaluated the shipment and discharging methods as well as cementing the business relationship. A copy of the Invoice is annexed hereto and marked “C”.
30.      I continue to utilise my management skills at a senior level in the business of Aarond with Dampier and personally manage the business. I continuously monitor the shipments and act as quality controller as well as negotiate stock levels between Sasa Inti and Dampier. I personally find the buyers, suppliers and inspect the goods once the shipments arrive at the warehouse with constant communication with Dampier.
31.      I need to be in Indonesia to arrange in order to carry our the succession plan my company had for me to leave my senior management position as well as being able to visit new buyers and identify market trends and needs. To a large extent, I rely on telephone, faxes and emails for communications and business in this          e-commerce age. I fly back to Australia frequently to compete any personal work required such as:
-Arranging finance and banking facilities
-Arranging credit facility
-Visiting buyers, suppliers and attending business meetings
32.      I am also sourcing other companies to supply salt to and expect that the contract for supply of salt will increase in the future years.
33.      I am presently negotiating to sign a contract for the supply in 2004 for increased levels of Australian salt for export.
B) SALE OF INTERNATIONAL CALLING CARDS AND SALE OF COMIC BOOKS AND RENTAL OF VCDS
34.      My plant is to develop Aarond into a reputable Australian multi-trading company with diversified interested and to have a profitable base.
35.      From discussions with my son, Ronald, there appeared to be a market in the business of selling international calling cards to the overseas student market in Melbourne as well as providing a service for them for Indonesian products, which they were “homesick” for.
36.      It was difficult to source suitable premises and I was concerned that Ronald did not have any business experience although he had good contacts with the local Indonesian student community.
37.      Following detailed discussions with Ronald, I worked on a business plan (annexed hereto and marked “D”) for conducting the business of selling international calling cards, selling comic books and renting VCD to the overseas student market, as well as to retailers in Melbourne, could be viable (Melbourne business). At the end of 2002 and again in February 2003, I invested a total sum of about $50,000.00 for Aarond to conduct the Melbourne business.
38.      Ronald consults me on all major decisions and reports to me in relation to the Melbourne business on a regular basis.
39.      The business has taken off and the turnover of this aspect of Aarond’s business is expected to achieve upwards of AUD$700,000.00 for this year. The comic books and VCDs are imported form Indonesia on a weekly basis and I meet and negotiate with supplier for the relevant VCD and books to be shipped suitable for the Australian market.
40.      In February 2003, Aarond entered a two-year lease for a shop in the city to operate the business of the sale of the international calling cards, comic books and rental of VCDs. A copy of the lease is annexed hereto marked “E”.
41.      The business is showing great promise and growing at the targeted rate. Copies of the session report on the Melbourne business are annexed here marked “F”. It is my plan to expand the business by setting up more retail outlets throughout Melbourne and I expect to employ more staff at retail sales and also at management level to run these shops.
GENUINE ATTEMPTS TO DO BUSINESS
42.      Since the grant of my business visa in 1999, I have tried to see what business I could do in Australia. It has not been easy to find a business which will be profitable and I needed to understand how the Australian situation.
43.      The permanent resident visa was, I recall, granted in Malaysia instead of in Indonesia, as at the time, the situation in Indonesia was unstable.
44.      With the rising Australian dollar, it was difficult to source products from Australia to export, as pricing was not competitive. My efforts were further set back by the tumultuous world events and disasters, including the September 11 incident, the Bali bombing, heightened terrorism threats throughout the world, and the SARS epidemic, all of which has had a devastating impact on businesses worldwide.
45.      I also had the task of finding a successor for my position and to leave my employer without too much disruption.
46.      I have attempted to fulfil my commitment to start an Australian business and am confident Aarond is on the right track with the local business which turnsover and provides cash flow and with the business of the exportation of salt which has the potential to grow.
47.      I had also explored the possibility of exporting food products including molasses and Aloe Vera and health food products from Australia to Indonesia. These proposed businesses had ultimately failed to take off, price was not competitive and the businesses ultimately not viable.
INVOLVEMENT IN THE DAY-TO-DAY MANAGEMENT OF THE BUSINESS AT A SENIOR LEVEL
48.      Whilst I am in Indonesia, I am able to facilitate the salt export business on behalf of Aarond.
49.      I control and determine all the major business decisions of Aarond. I correspond directly with the suppliers in Melbourne by way of faxes, emails and phone calls. I also liase with Ronald on the business regularly.
50.      I expect that once the Melbourne business and salt export business is established and more stable in 2004 and I am able to hand over to the persons I have trained in the past couple of years to take over my position in the Rodamas Group, I will leave the company and be permanently based in Australia 80 per cent of the time and in Indonesia 20 per cent of the time.
51.      I therefore submit that I have made genuine efforts and am continuing to make a genuine effort to establish an eligible business in Australia. I further submit that I am involved in the day-to-day management of my business here in Australia at a senior level. I therefore conclude that I have satisfied all my visa requirements and urge the Tribunal to review the decision to cancel my business visa.
Signed and dated 3 February 2004

The applicant gave oral evidence principally in confirmation of the written evidence set out in his above statement (Exhibit A3) and also provided some additional relevant comments and explanations.
The applicant said that he was also a Director of Sasa in addition to his comments contained in Clause 5 of his statement. He joined the Rodamas Group in Indonesia as a salesman almost 34 years ago and during that period, he graduated as an accountant. Resultantly, he became the company’s internal accountant. He said that Sasa has an annual turnover equal to US$100,000,000. Sasa has approximately 2000 employees and Rodamas Group has approximately 13,000 employees. Rodanas is owned jointly by an American company and a Japanese company. The applicant has been planning for his retirement, from his employment with the Rodamas Group, for the past two years and intends to fully manage his own company following retirement, spending 80 per cent of his time in Australia and 20 per cent in Indonesia (see clause 50 of his statement). The applicant said that he has informed the management of Rodamas that he is conducting business in Australia and that he plans to retire from his employment with them in approximately one year.
The applicant is training his son, Ronald, to take over the management of Aarond. Ronald came to Australia as a student on 10 June 1996 and in 2002 he completed a Bachelor of Accounting and Computing course at Monash University. Ronald became an employee of Aarond in Australia following his graduation at Monash University. Aarond was incorporated in Victoria on 12 March 2002.
During his time as a student at Monash University, Ronald ascertained that there was a market in Australia to provide Indonesian students with comic books and VCDs imported from Indonesia. There was also a market in Australia for telephone cards. This concept was incorporated by Ronald and the applicant into the business operations of Aarond and is marketed by the company under the trademark name “Bee-Happy”, filed on 4 June 2003. Ronald is regarded by the applicant as the Manager of the Bee-Happy segment of the Aarond business.
The applicant gave evidence that the amount of $46,085.11, which he transferred to Australia on 13 July 2001, was to be used to purchase a motor vehicle (see clause 12 of the statement). The vehicle purchased was registered in the name of his son, Ronald. The subsequent transfer by the applicant of $210,000.00 to Australia (see clause 13 of his statement) used for share trading and bank deposit investments in the name of the applicant.
The applicant gave evidence that he presently has investments in Australia of about $1,500,000 made up from shares in and loans to Aarond, a share investment portfolio of about $500,000, a bank bill of $600,000 and his apartment at 455 St Kilda Road, Melbourne. In Indonesia, he owns a factory, which is unencumbered and other assets and investments, which together total a net value of about US$7,500,000. In Singapore, he has net assets and investments with a total value of about US$6,000,000. The applicant provides his son, Ronald, with a monthly allowance of $2,500 rather than having Aarond remunerate him in respect of his employment with the company. The applicant also pays certain of Aarond’s costs, such as airfares, and does not charge those costs to the company. The applicant agreed that if Aarond has been charged by him with these costs, it would have incurred a net loss to 30 June 2003 rather than the reported net profit of $645.64, disclosed in the company’s Trading and Profit and Loss Statement at that date.
The applicant also agreed that the present gross profit margin of US$0.50 per tonne, charged by Aarond to Sasa for the salt exports to Indonesia, was possibly too low to return as net profit to Aarond after all relevant associated costs were taken into account. Aarond purchases the salt from Dampier for US$28.00 (notwithstanding that Dampier’s invoice cost is US$28.50) and receives US$28.50 from the applicant’s employer, Sasa, for the sale of the salt). The applicant contends that this fine gross profit margin is appropriate bearing in mind that Aarond is building an exporting relationship between Australian salt producers and potential salt importers in Indonesia. The applicant said that he is negotiating salt export sales for Aarond with another Indonesian company named Sharks Bay or Unsro, which he believes has the potential to become a much larger export opportunity for Aarond than Sasa.
Aarond’s bookkeeper, Ms Carolyn Arman, gave sworn oral evidence for the applicant and in support of her following written statement (Exhibit A4):
STATEMENT OF CAROLINE ARMAN
1.        I, Carolyn Arman, of 23/82 Westbury Street, St Kilda East, Victoria 3183, am a partner in a partnership called “Y C Bookkeeping” and provide bookkeeping services to Aarond Pty Ltd (the company) since May 2003.
2.        I am engaged by the company on a weekly basis ranging from three hours a week to whatever number of hours is required to complete the relevant tasks.
3.        My tasks as a bookkeeper include: posting date from source documents, conducting bank reconciliations and petty cash reconciliations, preparing and completing business activity statements and other relevant bookkeeping activities, such as filing. Whilst posting this data, I verify and vouch for the information against the electronic cash register listings, bank statements, bills from suppliers, tax invoices, cheque butts, deposit slips and other supporting source documents available to ensure that the data is accurate.
4.        I recommend to the company the use of the software package “MYOB” which enables me to process the available information and which assists in preparation of financial statements.
5.        I am also employed by the accounting firm Saffer Baron and Associates Pty Certified Practising Accountants of 146 Hawthorn Road, Caulfield, in my capacity as a certified practicing accountant. On the basis of information provided by the directors of Aarond Pty Ltd, Saffer Baron and Associates Pty have compiled in accordance with APS 9: Statement of Compilation of Financial Reports in the special purpose financial report of Aarond Pty Ltd. (see attachment marked “A”).
6.        Since the 30^th June 2003 financial reports were prepared, I have been provided with further invoices evidencing the company’s continued trade in further salt sales. Attached and marked “B” are copies of these invoices.
7.        The MYOB data account was used to monitor the profitability of each division of the company.
8.        The financial reports show that the company is currently solvent. The company has four bank accounts and now attached are current bank statements showing the balance of funds in the company for these account marked “C”.
9.        I have ensured that all funds deposited by Mr Danny Sitolang and invested into the company are reflected in the item titled “Loans from Director” in the financial reports.
10.      I have spent much time with Ronald Sitolang Sutandeo since being employed by the company and am aware that he is closely monitored by his father, Mr Danny Sitolang and relies heavily on him for business advice and in the daily running of the business
Caroline Arman
Ms Arman prepared a profit and loss statement for Aarond for the period 1 July 2003 to 31 January 2004. Unfortunately, there were a number of errors in these documents when they are compared with the source entry bank statements of Aarond. Notwithstanding the errors, the Tribunal was able to ascertain from the bank statements that Aarond purchased a significant amount of Salt from Dampier exceeding a total of $300,000, which it exported to Sasa between August 2003 and November 2003. Also the total sales of telephone cards and rental income received by Aarond from comic book and VCDs was reported to be $469,776.40 during the period 1 July 2003 and 31 January 2004.
Ms Arman said that prior to September 2003, Ronald was not telling her about certain costs he was incurring on behalf of Aarond. She said:
“He wasn’t telling me certain costs incurred. He would have made some payment direct and didn’t keep the invoice.”
Ms Arman said that she does not have any dealings with the applicant in relation to her bookkeeping duties and her financial reporting or the preparation of accounts. She takes her instructions from Ronald.
Mr Ronald Buyung Sitolang (Ronald) gave sworn oral evidence for the applicant in support of his following written statement (Exhibit A5):
STATEMENT OF RONALD BUYING SITOLANG
BACKGROUND
1.        I was previously an overseas student sent by my family to study in Australia. I initially studied at Trinity College Foundation Studies for a period of nine months prior to studying at Monash University. Thereafter, I spent from 1998 to 2002 studying and obtaining a Bachelor of Accounting and Computing at the Monash University.
2.        I knew that my father obtained his permanent residence on or about the end of 1999 as my family migrated to Australia at that time and I recall that I had been outside Australia at the time of the grant of permanent residence.
3.        I recall my father spoke to me in 1999 when he obtained his Business visa and discussed his intentions to set up business in Australia.
4.        I had already opened a Commonwealth Bank account for funds to be remitted for studies and when my father asked me to locate a banker for his business activities, I went with him to meet the Commonwealth Bank Manager who introduced us to a personal banker, Miss Anne Harley. We met her a few times and my father visited her on each of his visits to Australia.
5.        My father discussed setting up an account for business purposes and Anne Harley referred him to an accountant she knew named Brian Jones.
6.        He also saw an accountant Brian Jones on or around 2000 and I went along with him. Mr Jones told us not to set up a company as my father was at the investigative stage and that he thought it was no point setting up a company until we found concrete business opportunities. He told us that in any event my father could trade in his own name. In readiness for any business opportunities, my father transferred funds for this purpose.
7.        In around 2001, there was much uncertainty in the government of Indonesia and much unrest. My father was disappointed with much of his efforts to do business in Australia not being successful, as the prices for export products were not competitive. My father decided to try and develop opportunities using his business experience and situation as he discovered a potential niche market. At that time, the Indonesian government was abolishing restrictions for import commodities such as salt from overseas provided a permit was arranged and approved. My father spent much of 2001 obtaining that permit which proved to be difficult.
8.        I was in my last year of University and studying very hard to pass my examinations.
9.        I was an authorised signatory on Aarond Pty Ltd’s Account together with my father. My father directs me to draw cheques from time to time.
10.      I currently act as the company’s secretary and director, I continuously communicate with him on day to day basis over the phone and or through online conferences using net meeting (I speak to him in person over the internet) (more cost effective than telephone rates, to discuss and report about day to day company activities since the company was set up.
11.      My father makes all the decisions in relation to running of the business and he initiates business contracts of the company. I assist him with administrative tasks such as office administration and have learnt a lot from his business experience. I continue to assist him with developing contracts and report to him on a regular basis either initially as the company was being set up on a daily basis but now on a twice or three times a week.
12.      When I was studying I did not have much time to assist my father with his business ideas. We discuss my father’s business ideas and plans and he involved me, I was very pleased he involved, as this was relevant to the degree.
13.      On 1999 our countries was not recover fully from Asian Economic Crisis, until about 2001, we had few changes in the government (President and Minister) bottom line there where a lot of uncertainties during that period of time which made us difficult to deal with Indonesian companies. Furthermore, after a careful consideration he mentioned to me that the Australian molasses price that he got was not competitive enough and not feasible to be exported to Indonesia to be marketed among our prospectus market.
14.      I said that I would very much like to assist him in his business activity and learn from him. He said that I could be his partner in his business ventures once I completed my degree and to learn about business from him.
15.      When I nearly completed my degree I was in a position to assist him with developing his business ideas in Australia. Together we discussed the opportunity of various business activities to be taken on by the company and the business plans were largely prepared based on his knowledge and experience of these matters.
16.      I discussed with him the market of foreign students in Australia as I was studying and together we developed a business plan for import of Indonesian’s Comics and VCDs, products which were not previously available in the Australian market place (Melbourne particularly).
17.      He said he would source the supply in Indonesia and asked me to speak to the overseas students and student groups as to whether or not the plan was viable (he told me what to put into the business plan and asked me to try and do some informal feasibility studies with these overseas students).
18.      Also, my father decided that we needed a place in the heart of the city for this plan to have the best chance of working. I found a shop in Russell Street which was quite expensive but my father told me that it would be better to start with lower overheads and try and build up the business slowly. I found a reasonable place and my father agreed for the company to enter into a two year contract with the landlord, L & L global Investment, for the premises situated on Level 2 (204) 258 Lt Bourke Street, Melbourne where we could retail the comics, DVD and have an office space for the company.
19.      My father through his contacts arranged for the purchase form suppliers in Indonesia as well as arranging deal with International Couriers company such as TNT and UPS. As a result of his financial position and reputation, he managed to negotiate supply of the products on a consignment basis and for payment to be made on a quarterly basis.
20.      My father deals with the management of the shipments on a weekly basis and the process of buying, packaging and shipping to Australia. He directs me on the marketing in Australia and the approach I should take and have taken to identify the other shops selling these products.
21.      The Indonesian Comic’s and VCD’s products were not previously available for rent nor sold on the Australian market. The items are not rented out or sold through our small retail outlet.
22.      My father instructed me to look at the possibility of expanding and these products are not supplied to another store situated in Chinatown. There are only three other businesses operating in the market for foreign language Indonesian Comic’s and VCDs. We have introduced further competitiveness in the Australian market place for these products. The customers are very happy that they are able to access products not previously available in Australia. Most of our customers are overseas students form Indonesia, Malaysia and Singapore. They are also Australian who have shown interest in our products as they have learnt the Indonesian language and which to further their language skills. My father and I have spoken about future opportunities of introducing Indonesian movies with spoken English and Indonesian subtitles or vice versa in order to expand the business.
23.      My father also advised me on the registration of Trademarks (see attached Trademark registration marked “RS 1”) and their value in the event that we expand the business. My father has the idea of possibly developing the business into a franchise. My father has the idea of wanting to consolidate the business and has taught me to trade cash flow positively. He also has told me about the importance of intellectual property and the trademark registration, which might be valuable if in the case of our business becoming a franchise and the market brand being acknowledged in Australia.
24.      He has also directed me the opportunity of building a website which we have developed and registered a domain name. This has helped to increase market awareness of our product.
25.      In relation to the salt business, I have been directed by my father to issue invoices and assist with the administration. He deals directly with Dampier Salts for discussions, negotiations and pricing and I have met with them.
26.      I understand that the trade in Dampier Salt has been successful and I am leaving a lot about export procedures and international dealing.
27.      I have not had any previous knowledge or experience in business and my father has been very cautions and guided me very step of the way.
28.      The phone cards business has been turning over very nicely without much work on our part. My father has seen the potential for this business and has directed me to go to Perth in October 2003 to expand the market. The business has recruited an agent, another distributor, which has insured that is continues without being labour intensive on my father or my part. The phone cards work on a volume based pricing and we have plans to expand the network of distributors not just from in Perth but in New South Wales and Queensland.
29.      My father has been dealing with the part of securing orders and supplies and transacting shipping of the Comics and VCD’s. My father has been instrumental in planning and using his financial experience in Indonesia to develop these contacts for sourcing supply.
30.      I have relied on his business acumen and need his guidance to ensure the success of this business that he has established and I am continuing to apply. My father is the senior manager and continues to guide and direct me with his vast contacts and business knowledge.
31.      As it is a family company, the assets in my father’s name are also readily available for the business. Luckily, the business has been self-supporting with my father providing the start up capital and funds to pay for expenses. I have always known my father to have funds available where necessary to start the business and carry on in any event of cash flow problems. My father has injected at least $80,000.00 into the company by way of deposits and continues to support the company with his funds.
32.      As I was previously a student, I did not have any funds saved, except what was provided to me by my father. I did not have previous business skills experience. I have learnt a lot since being involved with my fathers business ventures.
33.      Judging from the current response from the market we have plans to expand by opening more stores by the end of this year or early next year in areas close to universities such as Caulfield or Clayton campuses of Monash University or even in suburbs such as Glen Waverley and Box Hill.
34.      The success of the company is totally dependent on my father as I am still learning and make many mistakes. If not for my father, I will not be able to continue with this company as I will not know what to do without his presence in Australia and in Indonesia to supervise the overseas side of the business.
35.      If his visa were cancelled, our company and myself especially will face a very difficult situation.
36.      Attached and marked “RS 2” are the current Business Activity Statements for the company.
Signed and dated 16 February 2004

On 4 June 2003, Aarond registered the trademark: 956712 “Bee-Happy”. Aarond’s comic book, telephone card and VCD business is conducted under the Bee-Happy trademark name. Ronald made the following comments concerning the decision for Aarond to import and trade in comics and VCDs:
“It was my idea but I brought it up to my dad and then I proposed this and an opportunity of business in Australia. He then considered it carefully before he say yes, because basically, all the decision is up to him because he fund all the company funds. So it’s not up to me whether I was to go ahead.”

Ronald said that he uses the telephone and Internet email to communicate with his father in Indonesia. Contact is made constantly and regularly, sometimes daily but at least once a week. Ronald administers Aarond’s comic book and VCD business operations in Australia under the direction of his father, and he is a Director and Secretary of the Company. The applicant arranges for Aarond’s purchase of comic books and VCDs in Indonesia and he determines the quantities and the type of stock most suitable for sale in Australia in concert with Ronald. Ronald appoints individuals to act as commission agents for Aarond in the promotion of its comic book and VCD business. Ronald said that his father, mother and sister, Veronica, reside in Indonesia and his brother, Stephanus, lives in the United States of America.

Mr Alvin Rajwantis gave sworn evidence for the applicant and in support of his following written statement (Exhibit A6):
STATEMENT OF ALVIN RAJWANTH OF 22, PEASHOLM STREET, SCARBOROUGH, WESTERN AUSTRALIA
SENIOR MAKETING OFFICER, DAMPIER SALT LIMITED
1.        I am the Senior Marketing Officer employed by Dampier Salt Limited (Dampier) and have been so employed for a period of eight years.
2.        I make this statement in support of the application of Mr Danny Sitolang (Mr Sitolang) to the Administrative Appeals Tribunal for a review of the decision by DIMIA to cancel his business visa.
3.        Dampier is a company which is 65% owned by Rio Tinto and 35% owned by other third party interests.
4.        I know Mr Sitolang as the Director and shareholder of Aarond Pty Ltd. I have met him personally and received his business card.
5.        Dampier currently has a performing contract with Aarond Pty Ltd dated 8^th April 2003, copy of which is attached. This contract provides for the supply of 10,000 tonnes of metric salt for the purposes of export to Indonesia by Aarond Pty Ltd per annum. This equates to a turnover of approximately US$285,000.
6.        I confirm that the business relationship with Aarond Pty Ltd and with Mr Sitolang is genuine and continuing. In fact, Dampier is currently negotiating with Mr Sitolang to execute a further renewal supply contract for 2004, which will increase the export turnover in excess of 10,000 tonnes.
7.        It is my firm belief that as Dampier continues to do business with Mr Sitolang, it will be possible to increase and indeed, treble the supply to Aarond to up to 30,000 tonnes per annum.
Background to business relationship
8.        I first met with Mr Sitolang on the 9^th of January 2003 but am aware that prior to this time, there have been facsimile and telephone conversations between Mr Sitolang and other persons in Dampier including approaches from Austrade on behalf of Mr Sitolang from mid 2002.
9.        Dampier exports salt to other customers in Indonesia and I am aware from my experience in this industry that there have been government regulations which make it difficult for local Indonesian companies to obtain import permits to allow exports of Australian salt into Indonesia.
10.      In the last 2 years it has become increasingly difficult for local Indonesians to import overseas sourced salt.
11.      The market in Indonesia is such that the locally produced salt is not of a high-grade of purity. Whilst this is find for fine domestic consumption and general consumer application the salt sourced from the local producers are not of the high grade of purity and performance required by chemical companies. As a result, this affects the end product which in the locally traded salt, may be high in other minerals such as potassium, calcium magnesium or any sulphates and other insoluble matter.
12.      This business relationship with Mr Sitolang is strategically important to Dampier because to supply to Aarond Pty Ltd is of logistic advantage to our Company.
13.      The export of the Australian produced salt has served to increase the market presence of Dampier in Indonesia as well as improving our company’s economies of scale.
14.      It is of great comfort to Dampier that Mr Sitolang has chosen to conduct business via Aarond Pty Ltd for the following reasons:
14.1     It is essential to the business relationship that Mr Sitolang is constantly in Indonesia for purposes of quality and quantity control. Mr Sitolang is able to be on site when shipments are sent and able to check and communicate problems with the quality of salt sent as well as keeping an eye on the quantity of stock required by Aarond’s customer.
14.2     I am regularly communicating with Mr Sitolang by telephone about problems the customer may have with the shipment in relations to quality of the salt. This in my view, is crucial to the export business growing and increasing in size and value.
14.3     I speak to Mr Sitolang every 1-2 weeks about the shipments and also generally about the Indonesian import permit issues.
15.      I have personally met Mr Sitolang on numerous occasions in Perth and Surabaya and have also visited Aarond’s registered office in Melbourne.
16.      I am aware that Mr Sitolang has an employee, Ronald, who works for him in Melbourne and that the company is an Australian based company gives me (and Dampier) comfort in our business dealings with Mr Sitolang.
17.      I deal directly with Mr Sitolang who is the decision-maker and confirm that the business relationship with Aarond is with Mr Sitolang. Whilst I deal directly with Mr Sitolang, my assistant ensures that the relevant documentation and paperwork is handled properly and communicates with Ronald in Melbourne for smooth processing of each shipment.
18.      I am keen on Dampier’s behalf to grow our export business and relationship with Mr Sitolang.
Signed
Mr Rajwanth gave evidence that Aarond had acquired 18,000 tonnes of salt from Dampier in 2003 for export to Indonesia which exceeded the 10,000 tonnes included in the April 2003 contract between Dampier-Aarond referred to in paragraph five of his statement. He said prior to Dampier’s contract with Aarond, Dampier had found it difficult to arrange exports of salt to Indonesia due to language problems, legal and customs issues and knowledge of that market. Aarond, via the applicant, is therefore a most desirable intermediary for the export of salt by Dampier to Indonesia.
Mr Rajwanth confirmed that despite the terms of the contract and related invoices issued by Dampier to Aarond, an agreement had been negotiated with the applicant for Aarond to pay only US$28.00 per tonne for the supply of salt in lieu of the rate of US$28.50 expressed in the documents. This provides Aarond with a gross profit margin of US$0.50 per tonne before costs for its purchase and export of salt supplied by Dampier.
Aarond has a fully paid share capital of $1000 made up of 1000 issued ordinary shares. The applicant owns 500 ordinary shares and has a 50 per cent equity interest in the company. The respondent contends that this 50 per cent equity interest does not satisfy s 134(1)(a) of the Migration Act because $500 is not a substantial financial investment amount. The applicant’s spouse owns 300 ordinary shares and his son, Ronald, owns the remaining 200 ordinary shares issued by Aarond.
It is not unusual for an Australian private company to be commenced with a low dollar value paid capital and have its capital assets and working capital requirements funded by personal loans from it’s directors. This is precisely what has happened in this case. Aarond commenced with a low paid capital of $1000 and its capital assets and working capital requirements were progressively provided via loans made to the company by the applicant in correlation with the company’s needs and growth.
The evidence indicates that the applicant is a successful business executive with a personal net worth in excess of $15,000,000 spread throughout Indonesia, Singapore and Australia, much of which is in cash or marketable security investments. The applicant’s capacity to provide additional money to Aarond to fund it’s planned expansion in the future is undoubted. The applicant and the respondent have agreed that at the date of the cancellation of the applicant’s visa on 6 March 2003, the applicant had progressively advanced loans to Aarond totalling $86,196. He has also paid company costs such as airfares and Ronald’s allowance or salary of $2500 per month, which have not been recorded in the accounts of the company.
It is clear from the evidence that the principal funding requirements of Aarond have been provided to date by the applicant, excepting for $500 which arises from the share capital investments in the company by the applicant’s spouse ($300) and his son Ronald ($200). It is also the evidence that the applicant shall provide the majority of the future funding requirements of the company and that Aarond could not continue to operate without his ongoing loan funding support. The applicant therefore has substantial financial control over Aarond in additional to his 50 per cent shareholding equity interest.
The Tribunal finds that the applicant has obtained a substantial ownership interest in Aarond and therefore satisfies the definition of ownership interests provided under s 134(10)(a) of the Migration Act.
The applicant and the respondent are in agreement that at the date of the cancellation of the applicant’s visa on 6 March 2003, Aarond had commenced operations and had banked monies between 12 February 2003 and 4 March 2003, totalling $48,318 from telephone card sales. There had been no other business completed by the company to 6 March 2003. However, on 9 December 2002 the applicant’s lawyer, Lily Ong, wrote to the respondent in response to a notice of intention to cancel the applicant’s business skills visa, which was issued by the respondent on 9 September 2002. The following extracts are taken from Ms Ong’s letter:
Dear Mdm,
NOTICE OF INTENTION TO CANCEL BUSINESS SKILL (SUBCLASS 127) VISA OF DANNY SITOLANG SUTANDEO (THE “APPLICANT”)
We act for the Applicant.
In response to your letter dated 9 September 2002, we submit that:-
i)the applicant has made genuine efforts to obtain a substantial ownership interest in an “eligible business” as defined in the Migration Act 1958 (the “Act”); and
ii)to utilise his skills in actively participating at a senior level in the day-to-day management of the business; and that
iii)the business enterprise, Aarond Pty Ltd (“Aarond”), meets the definition of a business under s 134(10) of the Migration Act.
We therefore contend that the applicant meets all the requirements of the visa pursuant to section of the Migration Act and that the visas of the applicant and his dependants should not be cancelled.
We set out below the facts in support of our contention for your consideration:-
i) Genuine effort to obtain a substantial ownership interest in an eligible business
We confirm that you are satisfied that the applicant has obtained a substantial ownership interest in Aarond. We submit the applicant has made a genuine effort to engage in an eligible business as defined under s 134(10) of the Migration Act and detail the business activities of Aarond to date as follows:-
A) Export of Salt
Aarond has been researching and forming plans to export salt produced in Australia to companies in Indonesia. With the recent lift of the government’s restriction on the import of raw products into Indonesia, the annual import capacity is expected to increase from 5000 tonnes at present to 20,000 tonnes. Growth of 30 per cent is forecasted for the first year, with sales exceeding AUD$200,000 and targeted to exceed AUD$1,000,000 by the third year.
A copy of the Business Plan for Salt Exportation is attached and marked “A”.
Substantial negotiations have been conducted with two major Australian salt producers for the supply of salt to Aarond, namely Dampier Salt Limited and Cheetam Salt Limited. A sample of salt required is attached. As you will appreciate, these business negotiations of such size and magnitude take some time to progress and conclude. Agreements are expected to be finalised with either one or both of the companies shortly. Copies of the various correspondence between Aarond and the two salt suppliers, including a quotation, and brochure of Dampier Salt Limited are attached and marked “B”.
The applicant and the respondent agree that the respondent did not make any endeavour, from the date of Ms Ong’s letter on 9 December 2002 to the date of the cancellation of the applicant’s visa on 6 March 2003, to ascertain from either Ms Ong or the applicant what progress had been made by Aarond concerning the development of it’s telephone card business or regarding the abovementioned export of salt expectations by Aarond. Very soon after the date of the visa cancellation on 6 March 2003, Aarond entered into a written Salt Sales Agreement with Dampier dated 8 April 2003. The agreement refers to the contemplated purchase by Aarond of 10,000 tonnes of salt for export to Indonesia between 15 April 2003 and 31 December 2003. In fact, the first purchase/export of salt under the agreement for 3000 tonnes of salt was completed by Aarond on 25 May 2003. Also the contemplated purchase by Aarond of 10,000 tonnes of salt from Dampier, as set out in the agreement, was exceeded and actual purchases of salt for export totalled 18,000 tonnes to 31 December 2003. Also, Aarond entered into its agreement to export the Dampier salt to Sasa in Indonesia on 12 May 2003.
Based upon the facts disclosed by the evidence the Tribunal considers that it was reasonable to believe at 6 March 2003, that Aarond was an eligible business as defined under s 134(10) of the Migration Act. At that date, it was reasonable to believe that the business of Aarond was either resulting or would result in the development of business links with the international market and also the export of Australian goods.
As the Tribunal has already found that the applicant has a substantial ownership interest in Aarond, the Tribunal now finds that the applicant has obtained a substantial ownership interest in an eligible business in Australia and satisfied the requirements of s 134(1)(a) of the Migration Act on 6 March 2003.
The respondent contends that the applicant is not utilising his skills in actively participating at a senior level in the day to day management of that business. The respondent’s contention relies to a large extent on the work carried out in Australia by Mr Ronald Sutandeo for Aarond and the fact that the applicant spent only 65 days in Australia between the date of his arrival in Australia on 29 September 1999 and the date of the cancellation of his business skills visa by the respondent on 6 March 2003. The respondent’s contentions are based to some extent upon Migration Series Instructions (MSI) which are notes provided to assist the respondent’s departmental decision-makers to interpret the Migration Act. The relevant MSI interpretation notes relied upon by the respondent are set out under clause 9 of the respondent’s Statement of Facts and Contentions.
The Tribunal has decided that it should give not weight to those MSI instructions which are more restrictive than the relevant provisions of the Migration Act. The Tribunal finds instructive the decision of Davies J (President) in Re Dainty and Minister for Immigration and Ethnic Affairs (1987) 12 ALD 416. He states at 266:
The Tribunal is not bound to apply a practice or a policy adopted by the decision-maker. See Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577. However, as Brennan J said in Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 639:
"Inconsistency is not merely inelegant: it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice."
As was demonstrated in Re Drake (No. 2), there are frequently very good reasons why the Tribunal should adopt and apply a relevant policy, particularly one which is appropriately formulated in the political context and which has been enunciated by a Minister of State. See the discussion in Re Drake (No. 2) and also in Re Aston and Secretary to the Department of Primary Industry [1985] 8 ALD 366 at 375-8.
I accept that, in the exercise of discretions under the Australian Citizenship Act 1948, the Tribunal ought generally to apply guidelines or policies which have been established by the Minister…
But to say that is not say that the Tribunal ought to treat policy as more than policy. Policy is not a legislative prescription and, though in many cases it will be appropriate to apply policy in all or almost every case, there are circumstances where it is not appropriate to decide a matter merely by reference to a policy which has been laid down.
In Re Lau and the Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703, the Tribunal considered the fact that Mr Lau had only spent 30 days in Australia in the relevant period. The Tribunal set aside the cancellation of the visa and said:
32. Section 134(1)(b) requires that the visa holder be utilising his or her skills actively, participating at a senior level in day-to-day management of that business. In using the term that business the legislation directs the decision-maker to consider the nature of the actual business undertaken. The term day-to-day should be given its ordinary meaning. It is defined in the Shorter Oxford English Dictionary on Historical Principles as continuous(ly), routine(ly). The Macquarie Dictionary defines it as ordinary, happening every day. Consistent with these meanings, it is not a requirement that a visa holder establish a certain number of days that he or she undertakes the activity of business in order to show that he or she is involved in its day-to-day management. The meaning is consistent with the need to show that a business is in existence, namely continuity and regular activity.
33. The day-to-day management of a company like Corcom, involved in developing an export market for Australian grocery goods in South East Asia, will involve researching products, securing orders and suppliers, transacting shipping. It will also involve ideas and planning. This is clearly evidenced by the applicant's activities in this case. The applicant had substantial commercial experience in Malaysia on which to develop Corcom as an export vehicle for sale of Australian goods into Asia. He developed Australian contacts through the proposed venture with Unipole... . While some of the activities undertaken by the applicant might be viewed as unsophisticated, there is nothing to suggest that they were inappropriate for the nature of the proposed business. The activities relied on the applicant's considerable experience directly in this field in the Asian market and on his business acumen. There may not be extensive notes, or records of activity occurring every day. As Ms McKenzie submitted, the diary notes showed only entries 30 days (sic). However, the use of the term day-to-day management does not require that that activity be recorded every day, and the input at a senior level by someone of the experience of the applicant will often be intangible.
In Re Widjaja and Minister for Immigration and Multicultural Affairs [2003] AATA 380, the Tribunal said:
40. The respondent also referred the Tribunal to the following decisions in support of their contention that the applicant has not participated at a senior level in the day-to-day management of Crown Records because he spent a total of only 48 days in Australia from the time of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001:
* Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
* Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
In the case of Huang, the Tribunal said:
... Not only must the eligible business operate in Australia to comply with the act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.
In the case of Ong, the Tribunal said:
... I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas.
The Tribunal however concurs with the applicant's submission that the Act does not support the view that "...it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas", in order to satisfy ss 134(1)(b) and ss 134(2)(b) of the Act. The Act prescribes that the applicant shall utilise his or her skills in actively participating at a senior level in the day-to-day management of the business and this statutory requirement does not restrict the Tribunal from also examining the activities of the applicant whilst residing overseas in order to satisfy ss 134(1)(b) and ss 134(2)(b) of the Act.

In Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77, the Tribunal said:
35. It must also be remembered that modern means of travel and communication permit a business to be managed and strategically directed from almost anywhere in the world. The emphasis in s 134(1)(b) is on senior management rather than on what might be called day-to-day administrative tasks under direction from a senior manager. I agree with the comments of Member Carstairs in Re Lau & Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703 that management input at a senior level by an experienced business person will often be intangible, and may involve ideas and planning, as much as researching products, securing orders and suppliers and transacting shipping. As Hill and Carr JJ observed in Puzey [(2003) 201 ALR 302] in a slightly different context at [47] "business does not mean being busy."
… However, I do not believe that it can be said that the Act demonstrates a requirement that the visa holder become ordinarily resident in Australia immediately in the sense that he or she spends the majority of his or her time in this country, only taking trips overseas from time-to-time. A number of factors have influenced that conclusion. In the first place, there is nothing in the documentation provided to me concerning the application made by the applicant for his visa (S1 - S4) that indicates that the Australian government had any requirement that overseas businesses be disposed of or the applicant's involvement in them scaled down. Specifically, the 24 months survey form that is used by the government to obtain information from visa holders asks the question (in section 7): "are you still actively involved in a business outside Australia?" and contains the statement: "note that there is no expectation or requirement that you discontinue any business outside Australia". Secondly, the MSI at clause 4.5.1, when dealing with the issue of what constitutes "genuine efforts" in relation to the establishment of a business and involvement in its management, refers to whether or not the visa holder has been physically present in Australia for more than 6 months since first arrival. Bearing in mind that a cancellation decision will often be made between 3 and 3 ½ years after the first arrival, an expectation that the visa holder may have spent only 6 months in Australia suggests that, so far as the respondent is concerned, the visa holder is not expected to spend the majority of his or her time in this country - and may indeed spend as little as 15% of the total time between first arrival and cancellation. Finally, I note that s 134(1)(a) specifically refers to an interest in an eligible business in Australia but s 134(1)(b) does not specifically require the active participation in the management of that business to occur in Australia. It would have been very easy for Parliament to have specified in s 134(1)(b) that the management activities must occur in Australia if that had been the intention.
The Tribunal is of the view that consideration of the number of days spent in Australia by a holder of a business skills visa between the date of first arrival in Australia to the date of visa cancellation may be relevant in certain circumstances in partly determining whether the visa holder has participated at a senior level in the day to day management of the business pursuant to ss 134(1)(b) of the Migration Act. On the other hand, the Migration Act does not prescribe that time spent by a visa holder outside Australia utilising his or her business skills in actively participating at a senior level in the day to day management of a business is irrelevant and should not be taken into consideration when determining whether a visa holder has satisfied the requirements of ss 134(1)(b) of the Migration Act.
The applicant gave evidence that while he was in Indonesia he was able to facilitate the salt export business on behalf of Aarond. Also, he contends that he has been able to determine all of the major business decisions of Aarond from Indonesia. He corresponds and negotiates directly with Australian suppliers from Indonesia by way of faxes, emails and the telephone. It is clear that it has been important for the applicant to be principally located in Indonesia in the initial stages of exporting salt by Aarond to Indonesia to allow him to inspect the salt and approve its quality upon arrival at the warehouse in Surabaya, Indonesia, and then to ensure that it was transported satisfactorily from the warehouse to Sasa. The applicant’s ongoing presence in Indonesia has contributed to a significant degree to the level of confidence that Dampier has derived regarding its potential to increase salt exports to Indonesia in the future.
It is the evidence of Aarond’s bookkeeper-accountant Ms Caroline Arman, that the applicant closely monitors the business of Aarond and that his son, Ronald, relies heavily upon him for business advice. This evidence is bourne out by the fact that Ronald commenced his employment with Aarond following completion of his Bachelor of Accounting and Computing course at Monash University in 2002. Also, it is the evidence of the applicant that he has been training Ronald in the practical aspects of the business since that time. It is Ronald’s evidence that his father makes all of the decisions in relation to the business of Aarond and that he (Ronald) initiates the Australian business contacts of the company. The applicant arranges for all of the supply of comic books and VCDs to be imported by Aarond from Indonesia. It is Ronald’s evidence that he relies upon his father’s business acumen and that he needs his guidance in the business. Ronald considers that the success of Aarond is totally dependant upon the applicant and that his father’s presence in Indonesia is necessary to supervise the overseas part of the business.
Mr Alvin Rajwanth, the senior marketing officer of Damper, gave evidence that his company is owned 65 per cent by Rio Tinto and 35 per cent by other third party interests. He said that Dampier exports salt to other customers in Indonesia and he is aware from his experience that there have been government regulations in Indonesia which have made it difficult for Indonesian companies to obtain import permits to allow the import of Australian Salt into Indonesia. Mr Rajwanth said that Dampier therefore considers its salt export arrangements with Aarond to be important and valuable, not only because the applicant has created this Indonesian salt export business opportunity, but also due to the fact that Dampier is trading with and will receive payment for salt exports from an Australian company. Mr Rajwanth considers it to be essential to Dampier’s present business relationship with Aarond, that the applicant is consistently in Indonesia for the purpose of quality and quantity control. The applicant is able to be on site when shipments arrive in Indonesia and to communicate any problems to Dampier that may arise concerning the quality of salt received.
Mr Rajawanth said that he is regularly communicating with the applicant by telephone about the Aarond salt export arrangement and also, every one to two weeks about shipments and Indonesian import permit issues. He said that he deals directly with the applicant, who he considers to be the decision-maker for Aarond and that his assistant communicates with Ronald in Melbourne regarding the shipment documentation and paperwork.
Based upon the facts disclosed by the evidence the Tribunal finds that the applicant is utilising his skills in actively participating at a senior level in the day to day management of the business of Aarond and therefore meets the requirements of s 134(1)(b) of the Migration Act. The application has been able to satisfy this statutory requirement despite the fact that he has been present in Australia for only 65 days from the date of his arrival in Australia on 29 September 1999 to the date of the cancellation of his visa by the respondent on 6 March 2003. This is due to the fact that he was in constant contact by telephone, email and facsimile with his son, Ronald, who carries out his instructions and attends to the day to day marketing and administration operations of the company in Australia with the applicant’s advice and guidance.
Sub‑section 134(6) of the Migration Act provides that the Minister is taken not to have cancelled a person’s business visa under ss 134(4) if the Administrative Appeals Tribunal has set aside the decision of the respondent to cancel the applicant’s business visa under ss 134(1) of the Migration Act.

DECISION

The Tribunal sets aside the decisions under review and remits the matter to the respondent with the direction that the business skills visas held by Danny Sitolang Sutandeo, Anita Arijani, Veronica Sutandeo and Stephanus Ade Sutandeo should not be cancelled under s 134 of the Migration Act 1958.

I certify that the fifty-five [55] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr W.G. McLean, Member

(sgd) Catherine Lake

Clerk

Date/s of Hearing:  2 February 2004, 3 February 2004, 16 February 2004 and 15 March 2004
Date of Decision:  15 April 2003
Counsel for the applicant:            Mr R. Randall
Solicitor for the applicant:            Lily Ong
Solicitor for the respondent:         Ms V. Priskich of Blake Dawson Waldron