Tjew and Minister for Immigration and Multicultural and Indigenous Affairs

[2005] AATA 844

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 844

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2004/1216

GENERAL ADMINISTRATIVE DIVISION		)
Re		MULYONO TJEW

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal The Hon R N J Purvis, AM, Q.C. Deputy President

Date31 August 2005

PlaceSydney

Decision The decision under review is affirmed.

[Sgd] The Hon RNJ Purvis, AM, Q.C  Deputy President

CATCHWORDS

IMMIGRATION - Business Skills (Migrant) Visa – whether Applicant has a substantial ownership interest in business – whether Applicant is utilising his skills in actively participating at a senior level in the day to day management of the business or whether Applicant has made a genuine attempt to do so – Applicant was not aware of meeting minutes or financial situation  - irregular contact with other directors – Applicant provided general advice on ad hoc basis – does not satisfy statutory requirements – decision affirmed

LEGISLATION

Migration Act 1958 sections 134(1)(a), 134(2)(a) and (b), 136

Migration Series Instructions -133 – Visa Cancellation under Subdivision G Cancellation of Business Visas

CASE LAW

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

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

Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283

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

REASONS FOR DECISION

31 August 2005 The Hon R N J Purvis, AM Q.C Deputy President        

the application

1. This is an application by Mr Mulyono Tjew seeking review by the Tribunal of a decision made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (“the Respondent”) on 26 August 2004. By such decision the Respondent pursuant to section 134 of the Migration Act 1958 (“the Act”), cancelled the Business Skills (Migrant) Subclass 127 visa previously granted to Mr Tjew.

the issues

2.      There is now no issue in this matter as to:

· Mr Tjew having obtained an ownership interest within the meaning of section 134 of the Act in an Australian company, namely a 17 per cent shareholding in the issued capital by Tjandra Bros Pty Ltd trading as Victory Photo Lab (“Tjandra”); or

·     his intention to continue to hold such interest; or

·     whether the company is carrying on an eligible business.

There is an issue as to whether:

·     such interest is substantial;

·     Mr Tjew is utilising his skills in actively participating at a senior level in the day to day management of the business;

·     Mr Tjew has made genuine efforts to do so and whether he intends to continue to make such genuine efforts.

the hearing

3. At the hearing of the application Mr Tjew was represented by Mr Arnold Conyer, solicitor of Diamond Peisah & Co Solicitors and the Respondent by Mr Timothy Webb, of Clayton Utz Lawyers. The documents lodged by the Respondent, pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, were admitted into evidence and marked T1 to T18. Other documentary material tendered on behalf of the parties was also admitted and marked as exhibits:

Exhibit No	Description	Date
A	Bundle of Document pp 1 to 25	various
B	Documents evidencing money transfers by Applicant	various
C	Signed statement of the Applicant	undated
D	Statement of Mr Effendy Tjandra	undated
1	Affidavit of Mr T Webb and attachment	2 March 2005
2	Affidavit of Mr T Webb and attachment	17 August 2005

4.      Oral evidence was given through an Indonesian interpreter by Mr Tjew and Mr Effendy Tjandra upon which they were each cross examined.

relevant regulation

5. The provisions of the Act relevant to this application are:

“134     Cancellation of business visas:

(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).”

6. Migration Series Instructions -131: Visa Cancellation under subdivision G – Cancellation of Business Visas (MSI-131) provides guidance as to whether a genuine effort has been made for statutory purpose. As stated under 4.5 in MSI-133 the factors to be considered in determining whether a genuine effort has been made within the meaning of the Act are:

“(a)     business proposal which is considered genuine, realistic and achievable;

(b)       formal contract with partners or joint venturers;

(c)written evidence of detailed consultations with at least three business advisers (accountant, lawyer, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);

(d)physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;

(e)transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);

(f)minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant.

(g)minimum A$100,000 business activity as indicated by turnover. This may include other business activity not considered “eligible business” but cannot include passive investment, eg. Purchase of shares.

(h)failure to comply with a notice for information under s 137, ie mandatory monitoring of Australian address and return of survey forms.”

relevant facts and findings of fact

7.      Mr Tjew is a resident of Indonesia. He is 52 years of age and lives in Sumatra with his family. He is, by occupation, a business man having the ownership and control of two business activities; a wholesale grocery selling consumer goods and a car wash enterprise. He employs 27 people; the businesses have substantial annual turnovers. He says that he has net personal assets of A$1 million and is regarded as “very successful”.

8.      In 1999 he applied for a Business Skills Visa, which was granted in 2001. In December 1999 he had sought to buy into a prospective franchise food outlet, Furni Paradise Pty Ltd and invested A$58,500. The franchise was not obtained, the company went into liquidation and Mr Tjew lost the funds that he had outlaid. He sought other outlets for investing his money.

9.      Mr Effendy Tjandra, an Australian resident, is a relative of Mr Tjew.  With his wife Evelyn Yusman, and a sister Minia Tjandra, Mr Tjandra had, in June 1987, caused a company Tjandra Bros Pty Ltd to be incorporated.  It was to trade under the business name of Victory Photo Lab.  Mr Tjandra, Ms Yusman and Ms Tjandra became the directors of the company and acquired the then issued capital.

10.     In 2002, Mr Tjandra was conducting the photo processing business at Kingsford a suburb of Sydney. Mr Tjew says that being unable to locate another suitable investment opportunity, he had discussions with Mr Tjandra and proposed “obtaining shares and becoming a director” of the company that was carrying on the photo business. Mr Tjew says he was told the company was “very profitable” even though, in fact, it made a profit of only $1,858 for the 2002 financial year (T14/158).  “He wanted to expand the business that is why he asked me to join the company”, Mr Tjew said in his evidence. Mr Tjew further said that he did not, at that time, know any of the other persons involved in the business.

11.     Mr Tjew arranged for an accountant, Mr Teh, to carry out an evaluation of the value of the shares in the company.  Under date 28 January 2002, four days after Mr Tjew was appointed a director and four days after 8 500 shares were said to have been transferred to him, a valuation was produced. The business was valued at between $0 and $84,111.  Mr Tjew paid $14,000 to Mr Tjandra for an interest in the company.  He said that he would have liked to acquire a greater interest but it was not available. This was despite the fact that Liam Huang Enterprises Limited, a company of which Mr Eric Huang and Mr Muljadi Suriawan were the sole shareholders, had acquired a 66% interest from Mr Tjandra and his wife a year earlier.

12.     On 18 January 2002 Mr Muljadi Suriawan and Mr Eric Huang and on 24 January 2002 Mr Tjew were appointed directors of the company; Ms Minia Tjandra having ceased to act in January 1990. Mr Huang ceased being a director on 1 January 2004.  All of the above directors both past and present were born in Indonesia. During the period Mr Huang was a director he was also secretary of the company.

13.     According to the Registrar of Members maintained on behalf of the company, Mr Tjandra is now the holder of 4,250 shares in the company’s issued capital; Ms Yusman holds 4,250 shares, Lim and Huang Enterprises Pty Ltd holds 33,000 shares and Mr Tjew holds 8,500 shares.  The records maintained by the Australian Securities and Investment Commission (ASIC) show the issued capital as 50 000 $1 shares but do not record Mr Tjew as a current shareholder.  The company’s records purport to show a transfer by Mr Tjandra and his wife of 4 250 shares each to Mr Tjew on 24 January 2002.  While a transfer to Liam and Huang Enterprises Pty Ltd of 33,000 shares from Mr Tjandra and Ms Yusman of 16,500 each on 18 January 2001 was notified to ASIC, their purported transfer to Mr Tjew on 24 January 2002 was not so recorded. There is evidence before the Tribunal to the effect that the entry of Mr Tjew’s name in the company’s Registrar of Members was only effected on or about 1 March 2005.

14.      Neither Mr Huang nor Mr Suriawan live in Australia and they are said not to participate now in the affairs of the business.

15.     Since Mr Tjew purportedly became a shareholder and director in January 2002 he has spent most of his time in Indonesia conducting his two businesses.  He said in his evidence (Exhibit C) that he visits Australia approximately three times a year. In fact since January 2002 he has visited Australia on six occasions only; arriving 16 January and departing 26 January 2003; arriving 12 April and departing 24 April 2003;  arriving 17 April and departing 25 April 2004; arriving 9 November and departing 18 November 2004; arriving 23 February and departing 6 March 2003; and arriving on 14 August 2005. During these periods and whilst he has been in Australia he says that he has given advice to Mr Tjandra in relation to managing the company’s business.  There is, however, little evidence before the Tribunal of Mr Tjew participating in the conduct of the business activities during the periods he has been in Australia.

16.     When in Indonesia Mr Tjew says that he gives advice and maintains contact by email and phone cards.  The evidence includes only 12 emails and six emails respectively emanating from Mr Tjew and extending over the periods February 2002 to February 2003 and November 2003 to January 2004 (T7/42 to T7/65; T14/193 to 14/205).  The emails speak for themselves but they do not reflect a frequent, let alone day to day, furnishing of advice but rather observations on particular products and promotions when called upon.  All of the emails are in English, yet Mr Tjew and Mr Tjandra are not fluent in that language.

17.     Mr Tjandra said that Mr Tjew called him by telephone on a regular basis, three to four times a week, to discuss a “wide range of management issues”. He also said that he faxed to Mr Tjew a financial summary every three to four months. Not one financial summary was in evidence. Mr Tjew said that the telephone contact was “by phone card”. No record of these alleged phone card calls was in evidence nor were any details of the matters that were said to have been discussed by telephone.

18.     The directors of Tjandra Bros Pty Ltd were also said to have discussed business matters by way of teleconferencing; Mr Tjew  in Indonesia and Mr Tjandra, Ms Yusman and Mr Huang in Sydney. Documents said to be “Minutes of teleconference meetings” (Exhibit A) were tendered on behalf of Mr Tjew. They are 16 in number and cover the period 29 January 2003 to 24 November 2004.  Even though he ceased being a director on 1 January 2004, Mr Huang is said to have been a party to each of the eight meetings held after that date.  Even though he was and still remains a director Mr Suriawan is not noted as being a party to any one meeting.

19.     Mr Tjew was in Australia from 16 to 26 January 2003 yet a teleconference meeting is said to have occurred with Mr Tjew in Indonesia on 29 January 2003. The matters said to have been discussed during the meeting included events that would have occurred prior to 26 January 2003. No explanation was forthcoming from Mr Tjew as to why the matters were not discussed whilst he was in Australia instead of allegedly by telephone three days after he left the country. Mr Tjew was also in Australia from 12 April 2003 to 24 April 2003 yet a teleconference was said to have taken place on 23 April 2003. At a meeting said to have occurred on 29 April 2004, it is noted “Mr Tjandra presented the business plan to the meeting” and that “ Mr Tjew will report with his comments”. Mr Tjew was in Australia from 17 April 2004 to 25 April 2004 and had received a copy of the business plan by letter of 8 April 2004. 

20.     Mr Tjew said in evidence that he did not recall when he first saw the copy Minutes. He did not know who prepared them and said that his accountant gave them to him, presumably in a bundle, and that he first became aware of them “three or four months ago”.  Their existence, he said, had not been made known to him at an earlier time.  Whilst he said that management advice was given by him, the alleged minutes do not reflect such advice being given or contain any details as to the nature of any advice.  On 21 June 2004, a meeting is said to have occurred.  The minutes from this meeting, two lines long, state only that Mr Tjew’s “comments” were presented and that Mr Tjandra agreed to look into them.  Mr Tjandra said that he took notes of matters discussed at the meetings and then asked his daughter to type them up.  He used, he said, a speaker-phone. Mr Tjew was in Indonesia, the others in the shop. Mr Tjew was not personally present at any meeting.

21.     The Tribunal is not able to accept the veracity of Mr Tjew’s evidence in relation to the minutes or that meetings were in fact held.  Even if they had been held, the subjects upon which Mr Tjew is said to have commented hardly reflect either a participation by him nor a utilising of his skills at a senior level in the day to day management of the business. The emails are likewise. Mr Tjew said that he speaks to Mr Tjandra on a weekly basis.  However, no evidence was given as to the substance of any one conversation, the explicit matters raised or the result of any discussions.

22.     When cross-examined as to the current directors of the company, Mr Tjew could not correctly identify them or at least name them as their names appeared in the Register of directors. He was not aware that provision for directors fees had been made in the share valuation report prepared at, or about, the time he acquired his interest in the company or that directors fee/salaries in amounts of $62,600 and $112,350 had been incurred in the 2001 and 2002 financial years. Nor was he aware that a similar amount as in 2002 was included in the accounts for the 2003 year.  He did say however that “those who worked got fees those who did not work did not get fees”. He has never received directors fees or a salary from the company. Mr Tjandra said that “if people work in the company we pay them, if not work we not pay”. Monies were paid to Mr Huang, Mr Tjandra and his wife. Monies were not paid to Mr Tjew because, according to Mr Tjandra, he did not have “an active involvement in the company”. 

23.     There is not any indication from the evidence before the Tribunal that Mr Tjew has made a contribution towards the management of the business or the business itself that has manifested itself in increased turnover or profitability. There has not, as yet, been any return on his investment. Whilst Mr Tjew has transferred not less than $210,833 between May 1998 and October 2004 to Australia, only $14,000 was invested in the relevant business. Apart from the advance to Furni Paradise Pty Ltd and the investment in Tjandra Bros Pty Ltd no evidence was available as to the use to which Mr Tjew had put the remainder of the money.

submissions and decision

24.     The evidence before the Tribunal referable to Mr Tjew’s infrequent visits; his lack of awareness of the minutes and the financial position; the size of investment relative to other monies transferred to Australia and the salaries drawn and the position of the directors are all consistent with Mr Tjew being conscious of his relatively small investment in Australia.  He has displayed an interest in the progress of the business consistent with his monetary outlay being only an investment.  There is not any evidence of his participating in the day to day management of the business.  Even if the teleconference minutes do reflect a true situation, which I very much doubt, Mr Tjew has not, whilst in Australia or outside of Australia, involved himself in the day to day management activities referable to the company.

25.     Emails did pass between Mr Tjew, Mr Huang, Mr Suriawan, Mr Tjandra and Ms Yusman extending from seven words to a number of sentences. They do not evidence involvement in the day to day management but, from Mr Tjew’s point of view, that of a man watching over his limited investment; likewise with telephone contact.  The minutes of teleconferences, if they did occur, evidence even less day to day involvement. There is not any evidence of Mr Tjew’s contact with Mr Tjandra being continuous, routine or regular (see Lau and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703; Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283; Jo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 77). Contact was spasmodic, casual and intermittent and did not display an awareness of the day to day financial situation of the company, its turnover or staffing infrastructure. As has been elsewhere indicated in these reasons, Mr Tjew was not even aware of the year long financial situation. Mr Tjandra and his wife manage and control the business. Mr Tjew may have given them the benefit of his advice and experience on occasions but only from time to time and on an ad hoc basis. His actual presence in Australia has been infrequent and not consistent with an involvement at a senior level in the day to day management of the business.

26.     The interest that Mr Tjew holds in the company 17 per cent, costing $14,000, is not substantial. It is only one quarter of that of Mr Huang and Mr Suriawan who, through their own company, hold 33 000 shares.  It confers no ability to control or manage the business.  Mr Tjew says he is waiting for a chance to increase his shareholding.  Indeed, he says, he has offered to buy the interest of Mr Huang and Suriawan for $80 000, even be it the company derived net profits of $1,858 and $1,360 only for the 2002 and 2003 years and suffered a loss of $4,500 for the 2004 year.  It is true, as was submitted on his behalf, that “substantial” is a matter of fact and degree” (Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 554 at para 39) but I am not satisfied that the offer to buy shares from Mr Huang and Mr Suriawan was genuine in the sense of it being based on a proper valuation of their interest. The purported offer price is, on its face, unrealistic and not warranted on the basis of the financial evidence tendered before the Tribunal.

27.     If the offer had been accepted it would result in Mr Tjew’s holding being substantial.  But this situation has not eventuated nor can it be said the efforts to minimise the shareholding were genuinely made. They were superficial, perhaps testing the water. I am not satisfied that Mr Tjew was genuinely seeking to obtain a greater interest in the company.

28.     Mr Tjew does not satisfy the statutory prerequisites. He was not involved at the required level in the necessary day to day management. He did not receive any remuneration, whilst those who worked in the company were paid a salary. His investment in the company is small but it is the investment that is of prime interest to him not the running of the business. He has not made a genuine effort to obtain a substantial ownership interest in Tjandra Bros Pty Ltd.  He is not utilising his skills in actively participating at a senior level in the day to day management of the eligible business nor has he made a genuine effort to do so.

29. As was submitted ,on behalf of the Respondent, the investigation carried out by Mr Tjew referable to Furni Paradise Pty Ltd and his loss of monies is not such as to enable that activity to be the subject of consideration in the context of subsections (2)(a) and (b) of section 134. The business referred to in ss 134(b) is to be the business identified in ss 134(a). But even if this had been so Mr Tjew has not provided any documentary material or other evidence supportive of the limited involvement he might have had in that company.

30. Having considered each of the matters referred to in section 134(2) of the Act and MSI-13, I am satisfied that the decision under review should be affirmed. For the reasons hearing before set forth the decision under review is affirmed.

I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of The HON R N J Purvis, QC A M Deputy President

Signed:         A. Krilis  Associate

Date/s of Hearing  3 March 2005, 18 August 2005
Date of Decision  31 August 2005
Solicitor for the Applicant          Arnold Conyer
Solicitor for the Respondent     Timothy Webb