YAN HARYANTO OETAMA OH & LESSY MARYANA and MINISTER FOR IMMIGRATION AND CITIZENSHIP
[2009] AATA 552
•27 July 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 552
ADMINISTRATIVE APPEALS TRIBUNAL )
)No 2007/3909 2007/3922
GENERAL ADMINISTRATIVE DIVISION ) Re YAN HARYANTO OETAMA OH & LESSY MARYANA Applicants
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Ms N BELL, Senior Member Date 27 July 2009
PlaceSydney
Decision The decision under review is set aside and instead the Tribunal decides that Mr Oetama’s visa should not be cancelled. It follows that the decision to cancel the secondary visa of Lessy Maryana is also set aside and instead the Tribunal decides that Ms Maryana’s visa should not be cancelled.
......................SGD........................
Ms N Bell
Senior Member
CATCHWORDS
IMMIGRATION AND CITIZENSHIP – Business Skills Visa – Cancellation of visas and secondary visas – Substantial ownership interest in an eligible business in Australia – actively participating at a senior level in the day-to-day management of a business – Genuine efforts to obtain a substantial ownership interest in an eligible business – Decision under Review Set Aside.
Migration Act 1958
Administrative Appeals Tribunal Act 1975
Kim v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCA 31
Shi v Migration Registration Authority [2008] HCA 31
Hope v Bathurst City Council (1980) 144 CLR 1
Puzey v Commissioner of Taxation (2003) 131 FCR 244
Russo and Minister for Immigration and Citizenship [2007] AATA 2054
Hindrodjojo and Minister for Immigration, Multicultural and Indigenous Affairs [2004] AATA 724
Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209.
REASONS FOR DECISION
27 July 2009 Ms N BELL, Senior Member 1. Mr Yan Haryanto Oetama Oh, a citizen of Indonesia, seeks review of the Minister’s decision to cancel his business visa and the secondary visa of his wife, Ms Lessy Maryana. The visas were granted in November 2003 and cancelled in July 2007.
2. In October 2004, Mr Oetama established and had incorporated the company Meridian Property Developer Pty Ltd (Meridian), with Mr Oetama and his brother, Yongki Utama as the sole directors and shareholders. The company purchased land at Carlingford in March 2005 and completed construction of six residential units in April 2007. By May 2008, five of the six units had been sold. The development was funded by Mr Oetama‘s transfer from Indonesia to Australia of $1,176,000 and by borrowings by the company from Suncorp Metway Ltd and Bank West.
3. The Minister considers this property development to have been inadequate to protect Mr Oetama against exercise by the Minister of the discretion to cancel his business visa. Mr Oetama disagrees.
issues
4. In summary, section 134(1) of the Migration Act 1958 (“the Act”) provides that the Minister may cancel a business visa if the Minister is satisfied that the visa 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.
5. If the Minister is satisfied of any of the above, then consideration must be given to whether the visa holder has made a genuine effort to obtain the required interest or utilise his or her skills in the required way. If the Minister is satisfied that a genuine effort has been made then the Minister may not cancel the visa.
6. Finally, even if the Minister is not so satisfied, consideration must be given to whether the residual discretion not to cancel the visa should be exercised (Kim v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCA 31).
7. Therefore the questions for me to answer are:
(a)Has Mr Oetama obtained a substantial ownership interest in an eligible business in Australia and does he intend to continue to do so?
(b)If so, has Mr Oetama utilised his skills in actively participating at a senior level in the day-to-day management of that business and does he intend to continue to do so?
(c)If the answers to a) and b) are no, has Mr Oetama made a genuine effort to obtain the required interest or utilise his skills in the required way?
(d)If the answer to c) is no, should the residual discretion to not cancel Mr Oetama’s visa be exercised?
Has Mr Oetama obtained a substantial ownership interest in an eligible business in Australia?
8. Before turning to the substantive matters concerning this question, I will deal with the Minister’s contention that the Tribunal may only take into account evidence of events prior to the decision under review, that is, prior to July 2007. In this case the question has particular importance because there is evidence that Meridian engaged in activity associated with a second property development project after July 2007.
9. The High Court in Shi v Migration Registration Authority [2008] HCA 31, held that the Tribunal is not generally confined in its consideration to material that was before the primary decision maker or to events that had occurred up to the time of the decision unless there is some statutory basis for so confining its consideration. The Minister submitted that these principles, when applied to cancellation decisions under section 134(1) of the Act (cancellation of business visas), produce a different result to their application to decisions made under section 303 of the Act (the provision under which the decision considered in Shi was made). The Minister submitted that the prohibition in the Act on cancellation of business visas unless action is initiated within three years of the date of grant of the visa means that, in making the decision to cancel, the Minister may only consider circumstances within the three year period. It was submitted that this temporal limitation in the statute must also apply to the Tribunal.
10. I do not agree. As Mr Oetama submitted, the provisions that impose a temporal limitation on the Minister’s exercise of the discretion to cancel go to the procedure to be followed by the Minister to provide, according to the relevant Second Reading Speech, some measure of certainty for business visa holders by limiting the time during which a visa may be cancelled. There is no provision in the Administrative Appeals Tribunal Act 1975 or in the Migration Act 1958 that confines consideration on review to evidence of events up to the date of the decision under review.
11. I also agree with Mr Oetama’s submission that evidence that throws light on events that occurred prior to the date of the decision under review may be relevant to the issues to be considered in determining the correct or preferable decision. In particular, where there is an argument that one business project does not amount to a “business” as described in the Hope v Bathurst City Council (1980) 144 CLR 1 sense, evidence of a further and subsequent business project is relevant. For these reasons, I will take into account any evidence of further project development activity by Mr Oetama.
12. Turning now to the substantive issue, the Minister contended that one completed property development does not amount to a “business” in the sense intended by the legislation and as described by the High Court in Hope and is therefore not a business at all, let alone an eligible one.
13. In Puzey v Commissioner of Taxation (2003) 131 FCR 244 following a discussion of the dicta of Mason J in Hope that carrying on a business should have something of a “permanent character” or be engaged upon on a “continuous and repetitive basis”, the Federal Court considered that in some cases, such as a plantation operation, “not too much attention should be given to the concept of repetition”. The Court also considered that “business does not mean being busy”. The Court referred to the “badges of trade” including the profit motive, acting in a business like way, the keeping of books of account and records and repetition – although a fixed term project may be a business.
14. I am satisfied that the “badges of trade” are displayed by the activities of Mr Oetama and his company; profit motive – the objective was profit and indeed profit was made, business records (such as those attached to the affidavit of Mr Utama) and some repetition.
15. Even if I were to concentrate on repetition to the extent urged by the Minister, there is evidence of repetition by way of another property development. At the hearing of this application Mr Oetama produced a contract for sale of land with a completion date in April 2009 for a property at Castle Hill for a second development.
16. I note the Minister’s submission that the purchase of the property had not yet been settled and on that basis, the purchase remained speculative. However, I also note that the exchange of contracts in a conveyance of real property creates a liability and is an indicator of earnest business activity. Mr Oetama gave evidence of having commenced to look for a further property before the first project was completed. His solicitor, Ms Lee, gave evidence of her concerns about limitations that may be imposed by the Foreign Investment Review Board.
17. On this basis, I am satisfied that Mr Oetama and his company were engaged in a business. The question remains whether it was an eligible business within the meaning of the Act.
18. Section 134(10) of the Act defines the term “eligible business” as one that the Minister reasonably believes results in a range of occurrences. Relevant to the circumstances of this case are:
o The creation or maintenance of employment in Australia (subsection:134(10)(b)); and
o An increase in commercial activity and competitiveness within sectors of the Australian economy (subsection: 134(10)(f)).
19. As to the creation or maintenance of employment in Australia, the property development project necessarily gave rise to employment in the construction sector for the life of the project. It also produced some increase, albeit small, in commercial activity and competitiveness in the Australian construction industry sector. The new development at Castle Hill, if it proceeds, is likely to do the same. This Tribunal has found similarly in relation to property development businesses on a number of occasions – see Russo and Minister for Immigration and Citizenship [2007] AATA 2054; Hindrodjojo and Minister for Immigration, Multicultural and Indigenous Affairs [2004] AATA 724; Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209. I note the specificity of the matters set out in the Procedures Advice Manual 3, but I also note that this property development entailed the engagement of project managing architects, a building contractor and, necessarily, tradespeople, real estate agents and solicitors or conveyancers. On this basis, I consider that the business has resulted in the occurrences provided for in section 134(10)(b) and (f) of the Act.
20. I conclude that Mr Oetama obtained an ownership interest in an eligible business in Australia. There is no question that his interest was substantial and there is no evidence to suggest that he does not intend to continue to hold that interest.
Has Mr Oetama utilised his skills in actively participating at a senior level in the day-to-day management of that business?
21. Mr Oetama and his brother, Mr Utama, have a long history of working together in a range of enterprises. Mr Utama worked for Mr Oetama in his Indonesian businesses from 1968 to 1991 including the manufacture and sale of eyewear and laser eye treatment; reconditioning mechanical and engineering plant and equipment; the manufacture and export of instant noodles and a small scale property development. From 1972 to 1991 Mr Utama was Mr Oetama’s second in command of all his Indonesian businesses, dealing with operational issues while Mr Oetama dealt with essential business relationships and developing business plans.
22. In 1991, Mr Utama migrated to New Zealand where he opened an import/export business dealing in Indonesian grocery products. Mr Oetama assisted Mr Utama with finance, helped him to locate products in Indonesia and arranged shipping. Mr Utama returned to Indonesia approximately every three months to assist Mr Oetama with his businesses in Indonesia. However, this ceased with a downturn in business in Indonesia in 1995. In that year, Mr Utama obtained employment as a supervisor in a supermarket in Wellington. In 1998, Mr Utama and his family obtained New Zealand citizenship.
23. In 2000, Mr Utama and his family migrated to Australia. Mr Utama obtained employment in a computer warehouse and later commenced work with Australia Post. He has not run any business on his own account in Australia.
24. Mr Oetama’s evidence was that when he obtained his business visa he decided to start a business with Mr Utama, given their long business association. They looked at a number of business possibilities including a supermarket in Wollongong but decided on a property development to which they were introduced by a friend of Mr Utama’s, Mr Tjong, whose business partner, Mr Sutanto, owned a firm of architects and construction project managers, Moderrin Group Pty Ltd. Mr Oetama came to Sydney, met with Mr Tjong and visited the Carlingford site. He decided to proceed with the project and asked Mr Utama to manage the day-to-day practical work under his direction.
25. Mr Oetama said that he met with Mr Sutanto of Moderrin Group on many occasions and that Mr Sutanto introduced him to a firm of mortgage brokers with whom he met as well. Mr Utama was also present at the meetings but Mr Oetama said Mr Utama had very little involvement in the negotiations for the finance for the project and that only Mr Oetama approved the finance arrangements. This was also the case when the project was later refinanced. Mr Oetama said that Mr Utama’s role was limited to ensuring the relevant documentation was prepared and available. In respect of regular drawdowns of funds from the bank, Mr Utama would sign the requests to the bank under a Power of Attorney conferred on him by Mr Oetamo to minimise delays, given his absence in Indonesia.
26. Mr Oetama said it was he who chose the building contractor after an open tender and that it was he who instructed Mr Sutanto, through Mr Utama, to negotiate further for the best price. Mr Utama signed the contract with the builders on Meridian’s behalf and at Mr Oetama’s request.
27. Mr Utama’s evidence was that during the construction phase he communicated with the project manager, Mr Sutanto, on a daily basis and updated Mr Oetama weekly. Mr Sutanto also provided twice weekly e-mail reports to Mr Oetama and spoke to him on the telephone.
28. Mr Utama also said that Mr Oetama met with Tracy Yep, real estate agent, to negotiate the sale of the units and was successful in negotiating a lower commission with her.
29. Mr Sutanto’s evidence was that he understood that Mr Oetama made all decisions in relation to the project and that Mr Utama, though the person with whom he liaised on a daily basis, would always need to liaise with Mr Oetama for a decision on any question to be made.
30. The evidence of Mr Oetama and Mr Utama of frequent communication about business matters was supported by copies of e-mails dating from 13 April 2007 and by a number of telephone text messages on Mr Utama’s telephone from 2004 and following and pertaining mainly to transfers of money from Mr Oetama for the purchase of the land at Carlingford. I accept Mr Utama’s evidence that prior to 13 April 2007, he was not proficient in the use of e-mail.
31. I also note the evidence of Ms Lee that while Mr Oetama and Mr Utama were keen to proceed with the purchase of the Castle Hill property in December 2008, she had advised that Mr Oetama should first obtain the approval of the Foreign Investments Review Board, but the vendor was not prepared to wait for this approval to be granted. However, the approval was granted in February 2009 and contracts were exchanged soon after that. Mr Utama’s evidence was that the profits from the sale of the units in the Carlingford development were placed in a term deposit account held by Meridian to be applied to the purchase of land for a further development project.
32. Mr Utama’s consistent evidence was that all strategic and financial decisions in relation to the projects were made by Mr Oetama because it was Mr Oetama’s money that was involved. Mr Sutanto’s evidence supported this.
33. I also note Mr Utama’s evidence that he began full-time work for Australia Post in 2003 and remains in that position. He said that he made contact with Mr Sutanto during his breaks at work or whenever he could manage it.
34. This evidence leads me to the conclusion that the historical business relationship between Mr Oetama and Mr Utama was one of leader and assistant or, at best, second in charge, and that this relationship continued with the establishment of Meridian and its property development business. I find that Mr Oetama was responsible for and made all major strategic and financial decisions, often on the basis of information gathered by Mr Utama at the direction of Mr Oetama. I also find that the funds used to establish the business were those of Mr Oetama and there is no evidence of financial contribution to the business by Mr Utama.
35. I note that much was made of the quite short amount of time Mr Oetama spent in Australia up to the time of the cancellation of his visa in 2007 – less than 80 days in approximately three years. I accept that one factor affecting the amount of time spent in Australia by Mr Oetama was his mother’s death and his role in and duties to his family around that time. The precise requirements of the Buddhist faith and cultural conventions were difficult to ascertain, but I accept that they played a part in keeping him in Indonesia.
36. In any event, I am satisfied that there was personal and active participation by Mr Oetama, as a skilled and experienced businessman, in the management of the business, as illustrated by his attendance at key meetings with Mr Tjong, Mr Sutanto and Ms Yep, and his regular electronic and telephone contact with Mr Utama, to whom he gave instructions, and with Mr Sutanto. This participation was not rendered any less active by his absence from Australia. Nor is it negated by his involvement in his business in Indonesia or by his reliance, for completion of practical tasks, on Mr Utama – whose own capacity to participate in the business was limited by his full-time employment with Australia Post.
37. I consider that, particularly in the context of the business of property development, this amounts to the utilisation by Mr Oetama of his skills in actively participating at a senior level in the day-to-day management of the business. It has been recognised by this Tribunal on other occasions (see: Russo) that property development involves making decisions at various stages, all of which were identified by Mr Oetama in his statement, and that the management role may not be as onerous or requiring of active management as some other undertakings.
38. There is no evidence to indicate that Mr Oetama will cease to participate in a similarly skilled and active way in future projects of the business.
decision
39. I am satisfied that Mr Oetama has obtained a substantial ownership interest in an eligible business in Australia, and intends to continue to hold that interest and that he is utilising his skills in actively participating at a senior level in the day-to-day management of that business, and intends to continue to do so.
40. The decision under review is set aside and instead the Tribunal decides that Mr Oetama’s visa should not be cancelled. It follows that the decision to cancel the secondary visa of Lessy Maryana is also set aside and instead the Tribunal decides that Ms Maryana’s visa should not be cancelled.
I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: ...............................SGD.................................................
Associate: Felicia DanieleDate/s of Hearing December 2008 and March 2009
Date of Decision 27 July 2009
Counsel for the Applicant Mr Nicholas Poynder
Solicitor for the Applicant Mr Prince, Kah Lawyers
Solicitor for the Respondent Ms Weston, DLA Phillips Fox
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