Tjhang and Minister for Immigration and Multicultural and Indigenous Affairs

[2005] AATA 1203

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1203

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2005/104

GENERAL ADMINISTRATIVE DIVISION		)
Re		TATANG SUHENDA TJHANG

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member A Sweidan

Date6 December 2005

PlacePerth

Decision The Tribunal affirms the decision under review.

..........(sgd A Sweidan)..........

Senior Member

CATCHWORDS

IMMIGRATION – Cancellation of business visa – applicant not making genuine efforts to obtain substantial ownership interest in eligible business

Migration Act 1958 (Cth) s 134

Re Griffiths and Migration Agents Registration Authority [2001] AATA 240

Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342

Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54

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

Hope v Bathurst City Council (1980) 144 CLR 1

Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997

Lau v Minister for Immigration and Multicultural Affairs [2000] AATA 70

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

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

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

REASONS FOR DECISION

6 December 2005 Senior Member A Sweidan           

Background

1.      The applicant has applied to the Administrative Appeals Tribunal for review of a decision made by a delegate of the respondent on 10 February 2005 cancelling the business skills (subclass 127 business owner) visa of the applicant.

2. The applicant and the respondent have consented to the review being determined without a hearing and it appears to the Tribunal that the issues can be adequately determined in the absence of the parties in accordance with s 34J of the Administrative Appeals Tribunal Act1975 (AAT Act).

3.      The Tribunal has considered the following documents provided to the Tribunal for the purpose of reviewing the decision:

(a)the Section 37 Documents filed by the respondent under the AAT Act;

(b)a letter from the applicant to the Tribunal dated 26 June 2005; and

(c)Respondent’s Statement of Facts and Contentions.

History

4.      The applicant was granted the visa on 30 August 2001 and he first entered Australia on 2 November 2001.

5.      On 16 January 2004, a standard 24-months survey was sent by the respondent Minister’s Department to the applicant for completion.  The completed survey was returned to the Department on 31 January 2004.  Correspondence between the applicant’s Indonesian company (PT Cisadane Raya Chemicals) and various businesses in Australia regarding the purchase of goods by the Indonesian company was attached to the 24 months survey.

6.      On 16 February 2004 a letter was sent to the applicant requesting that he provide further information on his business activities in Australia.  The applicant failed to provide any evidence of business activity in Australia.

7.      On 9 September 2004, a notice of intention to cancel the applicant’s visa was faxed to the applicant in Indonesia.

8.      The applicant did not respond to the notice of intention to cancel the visa.

9.      On 10 February 2005, a delegate of the respondent cancelled the applicant’s visa. 

10.     The applicant applied to the Tribunal for review of the decision on 17 March 2005.

11.     Sections 134 -137 of Migration Act 1958 (the Act) and subclass 127 of the Migration Regulations 1994 are included at pages 27-36 of the section 37 documents.  The Migration Series Instructions (MSI-133: visa cancellation under subdivision G - cancellation of business visas) is included at pages 37-46 of the section 37 documents.

12.     Essentially, section 134 of the Act provides that the Minister has a discretion to cancel the visa if she is satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, or does not intend to do these things.  The Minister must not cancel the visa if she is satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts.

13.     Eligible business and ownership interests are defined in section 134(1) of the Act and discussed at paragraph 4.3 of the MSI-133.

14.     Section 134(10) provides that eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:

·the development of business links with the international market;

·the creation or maintenance of employment in Australia;

·the export of Australian goods and services;

·the production of goods or the provision of services that would otherwise be imported into Australia;

·the introduction of new or improved technology to Australia; and

·an increase in commercial activity and competitiveness within sectors of the Australian economy.

15.     Paragraph 4.3.2 of the MSI-133 notes that eligibility relates to achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.

16.     Section 134(3) provides a list of matters that the Minister may take into account when determining whether a person has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his skills in actively participating at a senior level in the day-to-day management of that business.

17.     Notes to guide the interpretation of these matters are provided at paragraph 4.5 of the MSI-133.  The matters that may be taken into account, and the notes on their interpretation provide as follows:

·business proposals that the person has developed.  The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;

·the existence of partners or joint ventures.  The MSI refers to whether there is a formal contract with partners or joint venturers;

·research that the person has undertaken into the conduct of an eligible business in Australia.  The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;

·the period or periods during which the person has been present in Australia.  The MSI refers to whether there has been physical presence for more than 6 months since the first arrival as a business skills migrant;

·the value of assets transferred for use in obtaining an interest in an eligible business.  The MSI refers to whether there has been transfer to and retained in Australia at least 50% of the funds indicated as available for transfer within the 2 years;

·the value of ownership interest in the eligible business in Australia which is or has been held by the person.  The MSI refers to whether there is or has been a minimum Australian $100,000.00 or 10% ownership held by the person and provides that if the person is no longer in the business the reasons for loss of ownership are relevant;

·the business activity that is or has been undertaken by the person.  The MSI refers to whether there is a minimum of Australian $100,000.00 business activity as indicated by turnover and provides that this may include other business activity not considered as an eligible business but cannot include passive investment, for example the purchase of shares;

·whether the person has failed to comply with a notice under section 137.  The MSI refers to whether there has been a failure to comply with a notice for information under section 137, i.e. mandatory monitoring of Australian address and return of survey forms; and

·if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level on the day-to-day management of the business:

—the length of time the person held the ownership interest or participated in the management as the case requires; and

—the reason why the person no longer holds the interest or participates in the management as the case requires.

18.     The respondent contends and the Tribunal accepts that in conducting its review of the cancellation decision the Tribunal should have regard to all relevant evidence to determine whether the applicant satisfies the requirements of section 134(1) or is making genuine efforts to do so within the meaning of section 134(2) as at the date of cancellation (Re Griffiths and Migration Agents Registration Authority [2001] AATA 240; Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342 and Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54).

Substantial ownership interest in an eligible business in Australia

Substantial ownership

19.      What is a substantial ownership of an eligible business is a question of fact and degree (Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 at [25]).

20.      Section 134(1) and (2) of the Act requires the visa holder to obtain a substantial ownership interest in an eligible business in Australia.

21.      Section 134 (10) defines “ownership interest” in relation to a business to mean an interest held by the visa applicant in a business as:

·a shareholder in a company that carries on the business; or

·a partner in a partnership that carries on the business; or

·the sole proprietor of a business.

Eligible business

22.     The definition of an eligible business is set out in section 134(10) of the Act.  A business must meet at least one of the criteria set out in paragraphs (a) to (f) of the definition in order to be classified as an eligible business.

23.     Furthermore, the Tribunal has previously found that the reference in subsection 134(1)(b) to the “day-to-day management of the business” indicates that an eligible business must have some element of continuity and repetition.  Applying Mason J’s formulation of “carrying on a business” from Hope v Bathurst City Council (1980) 144 CLR 1, Deputy President McMahon found in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997 at [20] that the construction of “participating in the day-to-day management of the business” for subsection 134(1)(b) required a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis.

24.     The Tribunal finds that at the time of visa cancellation the applicant had not acquired a substantial or indeed any ownership interest in an eligible business in Australia. 

Active participation at a senior level in the day-to-day management of an eligible business

25.     The Tribunal notes the comments of Deputy President McMahon in Tang (supra  at [20]) that the construction of “participating in the day-to-day management of the business” for subsection 134(1)(b) requires a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis.

26.     There is no evidence to show that the applicant has a substantial or any ownership interest in an eligible business in Australia (being a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis).  Therefore, it is clear in the view of the Tribunal that the applicant cannot actively participate at a senior level in the day-to-day management of an eligible business as there is no such business.

Genuine effort to obtain a substantial ownership interest in an eligible business in Australia and to utilise skills in actively participating at a senior level in the day-to-day management of the eligible business

27.      In determining whether the applicant has made a genuine effort, the Tribunal should only look at events, actions and intentions that existed prior to the cancellation of the visa (Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54).

28.      However, the Tribunal when reviewing visa cancellation decisions can consider activities after cancellation in situations where there is evidence of prior intentions (Lau v Minister for immigration and Multicultural Affairs [2002] AATA 70). In this instance there have been no such activities.

29.     Paragraph 4.5.1 of the Migration Series Instruction 133 provides a list of factors that decision-makers may look at when determining whether a genuine effort has been made.

30.     The respondent contends that the applicant has not made a genuine effort either to obtain a substantial ownership interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of the eligible business. In support of this contention and with reference to paragraph 4.5.1 of the MSI the respondent says as follows:

·a detailed and realistic business plan has not been provided;

·there is no written evidence of detailed consultations with at least three business advisors;

·there is no evidence of actual business activity and the only business transactions there were were purchases of goods from Australian companies by the  applicant’s business in Indonesia;

·the evidence suggests that the applicant has conducted very little if any market research to assist in the development of the activities for the business;

·the applicant has spent very little time in Australia since the grant of the visa;

·there is no evidence of the value of assets transferred to Australia by the applicant; and

·there is no evidence of turnover.

31.     The Tribunal accepts the above contentions of the respondent in this regard.  The Tribunal notes that the Act is intended to benefit business owners who settle in Australia and actively manage an eligible business (Tang supra at [21]).

32.     In Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 Senior Member Muller said at [12]:

“Not only must the eligible business operate in Australia to comply with the Act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.”

33.     Reference should also be made to the Second Reading Speech of the Minister for Immigration and Ethnic Affairs introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Act. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at 2678) that it was understood that migrants who arrived in Australia on a business skills visa would remain resident in Australia (see Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 at [31]).

34.     In Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299 Deputy President Wright QC commented at [12]:

This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However, the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential. A business skills visa carries with it the right of permanent residency in Australia during its existence and by departing from Australia and joining family members as secondary applicants they too can obtain this privilege. It would be strange indeed if an overseas entrepreneur could secure these advantages by directing business operations from abroad within a day or two of his first arrival and never setting foot in this country again.

35.     Conversely, in Jo v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 77 Member Allen found at [36] that “activities undertaken outside Australia can also be taken into account if they can be directly related to the management of the Australian business”.

36.     Up to the time of cancellation of the visa, the applicant had spent only 43 days in Australia in a period of approximately 3 years.  The limited period of time that the applicant has spent in Australia in the Tribunal’s view clearly shows that the applicant has not made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of such a business.

37.     In the Tribunal’s view the applicant’s purported efforts which consisted of nothing more than his Indonesian company buying goods from Australian suppliers, do not amount to genuine efforts but were merely an attempt to avail himself of the benefits that flow from the visa.

Decision

38.     The Tribunal finds that:

(a)the applicant has failed to obtain a substantial ownership interest in an eligible business in Australia;

(b)the applicant has failed to utilise his skills in actively participating at a senior level in the day-to-day management of such a business; and

(c)the applicant has failed to make any genuine efforts to obtain a substantial ownership interest in an eligible business in Australia or to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business;

and the Tribunal accordingly affirms the decision under review.

I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A Sweidan

Signed:         ..................(sgd EM Jordan)........................
  Associate

Date/s of Hearing  22 November 2005
Date of Decision  6 December 2005
Representing the Applicant      Self

Solicitor for the Respondent     Ms L McPherson of the Australian Government Solicitor