Widjaja and Minister for Immigration and Citizenship
[2008] AATA 390
•14 May 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 390
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. 2007/4011
GENERAL ADMINISTRATIVE DIVISION )
Re WAHYUDI WIDJAJA Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal
Senior Member M D Allen
Date14 May 2008
PlaceSydney
Decision The decision under review is affirmed.
.................[sgd].....................
M D Allen
Senior Member
CATCHWORDS
BUSINESS SKILLS VISA – review of decision cancelling applicant’s business skills visa – whether applicant has a substantial ownership interest in; and utilises his skills in actively participating at a senior level in the day-to-day management of; an eligible business in australia – whether a business is being carried on – whether applicant has made a genuine effort to comply with visa conditions – residual discretion not to cancel business skills visa – decision under review affirmed
LEGISLATION
Migration Act 1958 sections 134(1), 134(1)(a), 134(1)(b), 134(2), 134(3) and 134(10)
CASE LAW
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Shi v Migration Registration Authority [2007] FCAFC 59
Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Re Ng and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299
REASONS FOR DECISION
14 May 2008 Senior Member M D Allen
1. By application made the 22nd day of August 2007, the Applicant sought review of a decision by a delegate of the Respondent, made the 25th day of July 2007, to cancel his Business Skills Visa.
2. Section 134 of the Migration Act 1958 relevantly provides:
(1)Subject to subsection (2) and 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 to 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;
(b) Is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business;
(c) Does not intend to continue to:
(i) hold a substantial ownership interest in;
(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;
(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;
(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 proposal 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 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);
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
…
(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 competiveness within sectors of the Australian economy.
3. Notwithstanding the above provisions of s 134 MA, as pointed out by Keifel J in Kim v The Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, there remains a residual discretion not to cancel a Business Skills Visa, even though the criteria in subsection 134(1) MA are not satisfied.
4. At the date of publication of these reasons, I am still bound by the judgment of the Full Court of the Federal Court in Shi v The Migration Agents’ Registration Authority [2007] FCAFC 59. That decision makes clear that the review of any cancellation decision can only take into account events up to the date of cancellation. That is not to say, however, that the Tribunal cannot have regard to subsequent events to ascertain what light they may throw upon circumstances at the time of cancellation.
5. The Applicant was granted a Business Skills Visa on 16 July 2004. Following the grant of that visa, the Applicant first entered Australia on 24 July 2004, departing on 28 July 2004. Since that time, up to the date of the cancellation of his visa, he has spent a total of 84 days in Australia.
6. At the time of his application for the visa, the Applicant stated that he was the “President Director” of PT Whitehorse Ceramics in Indonesia, and that he managed all aspects of the business including marketing, finance, production and human resources. He described his intended business activities in Australia as the intent to set up a trading company to export certain building materials to the Asian market. His then migration agent expanded upon this stating “Mr Widjaja intends to use his extensive connections within the building industry to open the distribution channels for certain Australian made products such as roof tiles, locks, window frames, etc” and adding “the business he intends to engage in will export substantial amounts of Australian products … he is a successful businessman who plans to settle permanently and contribute capital and expertise to a business venture that will ultimately benefit Australia”.
7. This proposed activity did not come to fruition. In evidence, the Applicant said he had intended to export from Australia solar hot water heaters but, after research, he found there was too much competition so he decided to change.
8. I have difficulty in understanding the business activities the Applicant intended to carry out in Australia. In his original application, he referred to the export of building materials. In his statement to the Tribunal, he refers to the proposed export of solar hot water heaters as the third of his proposed business activities. The first two activities, in which he thought to engage, were restaurant businesses. As stated above, no reference to restaurants was made in his application for the visa and, significantly, no reference was made to these activities in the Applicant’s Statement of Facts and Contentions, dated 3 December 2007, lodged with the Tribunal. No evidence was called from the persons, the Applicant nominated, as would be partners in these businesses. I have very real doubt as to the bona fides of these proposed business activities.
9. On 27 July 2006, a 24 month survey, for requesting details of the Applicant’s business activities, was sent to him at the residential address in Australia nominated by him. The Applicant did not respond to this survey. A second copy of the 24 month survey, sent on 20 November 2006, was returned to the Department of Immigration unopened. So was a third copy of the 24 month survey. A fourth copy was sent on 6 December 2006 and returned on 15 January 2007.
10. In the return received on 15 January 2007, the Applicant did not disclose any details of any Australian business engaged in by him and, in particular, no reference was made to any proposed restaurant businesses, but did state “will finalise negotiations in Feb 07 for participation in an existing business”.
11. By letter dated 12 June 2007, the Applicant was informed of the intention to consider the cancellation of his Business Skills Visa. On 21 July 2007, the Applicant sent information to the Department of Immigration evidencing his shareholding in Lianhwa Ceramic Pty Limited.
12. The Applicant’s evidence was that he purchased shares in and became director of Lianhwa in April 2007.
13. According to the Applicant, he purchased 50 per cent of the shares in Lianhwa for the sum of $63,441.00. His arrangement with the company is that he is responsible for purchasing tiles from factories in China, which are then imported by Lianhwa and on-sold by Lianhwa to wholesalers. The Applicant is responsible for ascertaining the quality of the tiles and the purchase from the Chinese manufacturers. All book work necessary for the import and subsequent sale in Australia of the tiles is carried out by Lianhwa in Australia.
14. Currently, the only employees of the Lianhwa are the other directors, a Mr Edward Lin and his wife. Mr Lin is responsible for sales and all book work is carried out by Mrs Lin.
15. Both the Applicant and Mr Lin stated that it was planned to import tiles manufactured by the Applicant’s factory in Indonesia. To date, this has not occurred. Mr Lin also stated that a long term plan was to build a factory in Australia to manufacture tiles. No concrete details were given of this proposal, and I regard it as no more than a chimera.
16. Mr Lin’s evidence was that he communicates with the Applicant in Indonesia at least once a week, some times two or three times a week, regarding the affairs of Lianhwa. Cross-examined, Mr Lin conceded that for the Applicant living overseas his primary business would be his Jakarta factory. He could not say how many hours the Applicant spends on Lianhwa business every week. The Applicant’s main job is to go to China to purchase tiles.
17. The Applicant’s evidence was that he invested in Lianhwa so he could export into the Australian market tiles made by his Indonesian factory. Currently, his role in Lianhwa is that of a buyer. Cross-examined, he conceded his job is confined to Indonesia for the time being, albeit, with trips to China to purchase tiles.
18. Attached to the Applicant’s Statement of Facts and Contentions are financial statements of Lianhwa. These documents reveal that the profit of Lianhwa, after tax, for the year ending 30 June 2007 was $8,605.00, compared to a profit of $2,005.00 for the year ending 30 June 2006.
19. The total revenue of the company for the year ended 30 June 2007 is shown as $322,718.00, and sales were shown as $259,634.00. In other words, the turnover and activity of Lianhwa is negligible, compared to the Applicant’s Indonesian company, which the Applicant stated made a profit of $A1.3 million in the last financial year, and employs 500 people.
20. The test of what is an eligible business is set out in ss 134(10) MA. The only provisions which could possibly apply to Lianhwa are:
a)the development of business links with the international markets;
b)the creation or maintenance of employment in Australia;
…
f)an increase in commercial activity and competitiveness within sections of the Australian economy.
21. In making an assessment of whether a business qualifies as an eligible business, as that term is defined in ss 134(10), real evidence must be adduced to support the contentions raised.
22. In this matter, the Applicant has submitted that his purchasing tiles from Chinese manufacturers, is the development of business links with the international market. I do not understand the term business links with the international market to simply mean that goods are purchased from overseas suppliers. There must, in my opinion, be something more that demonstrates an on-going reciprocal business tie between the entities. This has not been shown in this case. All that has been evidenced is that goods are sourced and purchased in China.
23. The Applicant has pointed to a proposed link between his Indonesian factory and Lianhwa. To date, this is no more than a proposal, and no evidence was adduced to show the stage to which any such arrangement has developed. The Applicant conceded that, currently, his factory does not make the granite and porcelain tiles that are imported into Australia by Lianhwa, although he says production of such tiles will commence “next month”.
24. There is no evidence as to what work has been done, what number of tiles will be imported and what plans exist for promotion and marketing. All that exists is a statement of intent without more.
25. The Applicant purchased his interest in Lianhwa in April 2007. I do not understand why steps were not taken then to start manufacturing granite and porcelain tiles, if that is what the Australian market required.
26. So far, no employment has been created in Australia. Although the Applicant said that it is intended to employ more staff for Lianhwa, no concrete evidence was given as to steps to be put in place to create jobs. Certainly, no business plan was proffered and no time lines referred to. All future plans for Lianhwa, are to my mind, vague and speculative.
27. I can see that if Lianhwa does eventually import porcelain and granite tiles from the Applicant’s factory, there may be an increase in commercial activity and competitiveness. At this stage, however, that is again speculative and there is no basis upon which I can form a reasonable belief, as opposed to speculation, that this will be so.
28. Currently, Lianhwa’s activities do not constitute an eligible business in terms of ss 134(10) MA and, as stated above, I do not have a reasonable belief, that is to say, a belief founded on reason not speculation or conjecture, that its activities will result in its becoming one. The Applicant, although he owns 50 per cent of the shares in Lianhwa, does not have a substantial ownership interest in an eligible business in Australia.
29. I do not regard the Applicant as having made a genuine effort to obtain an interest in an eligible business. His visa was granted in July 2004. Although he now states that he investigated restaurant chains to be set up in Sydney, it was only at the hearing that this evidence was adduced. The Applicant states that these activities were in 2005, yet his purchase of an interest in Lianhwa was not until early 2007, after the receipt of his 24 month survey. Between 2005 and the purchase of the interest in Lianhwa, there is no evidence of any business activity by the Applicant in Australia. During 2006 he spent only 26 days in Australia. To my mind, the purchase of the interest in Lianhwa was no more than an attempt to give the illusion of activity, sufficient to prevent the cancellation of his visa. At all relevant times, the Applicant was engaged in the running of his substantial manufacturing business in Indonesia.
30. Furthermore, I am satisfied that the Applicant has not made a genuine effort to utilise his skills in actively participating at a senior level, in the day-to-day management of an eligible business in Australia.
31. As discussed above, I am satisfied the Applicant has not actively participated at a senior level in the day-to-day management of Lianhwa. As he said in cross-examination, his role in the company is confined to Indonesia, although he regularly visits China to purchase tiles. He has not counted how many hours he works for Lianhwa, but did say he speaks to Mr Lin at least once a week, sometimes more often. This does not indicate participation in the day-to-day management of the company. Day-to-day management must be contrasted to strategic advice from time to time and, as I understand the evidence of Mr Lin, the activities of the company are controlled from its registered office from where Mr Lin and his wife run the company.
32. Furthermore, I adhere to what I said in Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178, namely that Senior Member Muller (as he then was) in Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656 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.
33. Deputy President McMahon in Re Tang and Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997 stated at paragraph 21:
“From its language and from the visa condition, it is apparent that the Act is intended to benefit owners who settle here and actively manage the business”.
Cf to Deputy President Wright QC in Re Ng and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 229 at paragraph 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 set foot in this country again.”
34. The Applicant was granted his Business Skills Visaon 16 July 2004. As pointed out above, since that time, he has been present in Australia for 84 days only, until the date of cancellation of the said visa. For the substantial majority of the time, between the grant of the visa and its cancellation, the Applicant has been content to reside in Indonesia and direct the activities of his Indonesian manufacturing company.
35. The Applicant completed a 24 month survey which was received by the Department of Immigration on 15 January 2007. I note that this was the fourth such survey sent to the Applicant at his nominated address, but the previous three surveys were not completed by him, two being returned to the Department. In that document, the Applicant refers to finalisation of negotiations for participation in an eligible business in February 2007. Documents from the Australian Securities and Investment Commission show that the Applicant’s appointment as a director of Lianhwa was on 5 April 2007. It is difficult to envisage that the Applicant had any involvement in the day-to-day management of that company prior to that date.
36. On the evidence before me, I am satisfied that the Applicant only commenced his involvement with Lianhwa when he realised, following the 24 month survey, that he needed to evidence some attempt to fulfil his visa conditions.
37. Having purchased an interest in Lianhwa, there is still no evidence that the Applicant has made a genuine effort to utilise his skills in the day-to-day management of a company. In particular:
a)There were no concrete business plans in evidence. Just vague statements of intent.
b)There was a suggestion of a relationship between Lianhwa and the Applicant’s Indonesian company, but there are no formal documents to evidence this and, on his own evidence, no sales have yet occurred.
c)There is no evidence of any research following the initial attempt to open a restaurant franchise in 2005 or to export solar hot water heaters.
d)As pointed out above, the Applicant has spent very little time in Australia.
e)To date, the Applicant has transferred $A63,441.00 to Lianhwa in order to purchase shares in the company, and some $A1,050 million into his Australian bank account. This transfer to his own bank account was after the cancellation of his visa and, to date, has not been expended in any business activity.
38. Subsection 134(3) MA refers to other indicia, the Respondent may take into account in ascertaining whether the Applicant has made the genuine effort referred to in ss 134(2) MA, but in this matter I do not intend to transverse ss134(3) MA in detail as I am satisfied, on the evidence before me, that the Applicant has totally failed either:
(i)to obtain a substantial ownership interest in an eligible business in Australia.
(ii)to use his skills in actively participating, at a senior level, in the day-to-day management of an eligible business in Australia.
39. Further, I am completely satisfied that the Applicant has not made a genuine effort to accomplish either of the requirements of paragraphs 134(1)(a) or (b) MA.
40. Given the findings I have made in this matter, I can see no basis upon which I should exercise the residual discretion residing in me not to cancel the Applicant’s visa. I find that he has, at all times, failed to comply with his visa conditions, and that his involvement in Lianhwa amounted to no more than an attempt to manufacture the illusion of compliance, following the 24 month survey, when he realised that he had failed to comply with visa conditions, and that the retention of his visa was in jeopardy. The decision under review is affirmed.
I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen
Signed: [sgd] [sgd] .....................................................................................
Mwela Kapapa, AssociateDate/s of Hearing 14 – 15 April 2008
Date of Decision 14 May 2008
Counsel for the Applicant Mr B Zisper
Solicitor for the Respondent DLA Phillips Fox
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