Yonathon and Minister for Immigration and Citizenship
[2007] AATA 1181
•23 March 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1181
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 200600113
GENERAL ADMINISTRATIVE DIVISION ) Re ROBERT YONATHON Applicant
And
MINISTER FOR IMMIGRATION & CITIZENSHIP
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date23 March 2007
PlacePerth
Decision The Tribunal affirms the decision under review. ….......[Sgd A Sweidan]............
Senior Member
CATCHWORDS
MIGRATION – business skills visa – cancellation
LEGISLATION
Migration Act 1958 (Cth)
Trades Practices Act 1974 (Cth)
CASES
Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Commissioner for Superannuation v Scott 71 ALR 408
Hope v Bathurst City Council (1980) 144 CLR 1
Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997
Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656
Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299
Jo v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1166
Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54
Lau v Minister for Immigration and Multicultural Affairs [2002] AATA 70
Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 309
REASONS FOR DECISION
23 March 2007 Mr A Sweidan, Senior Member BACKGROUND
1. On 19 December 2002, the applicant was granted a sub-class 127 business skills visa under the Migration Act 1958(Cth) (the Act). The applicant’s wife and children were also granted sub-class 127 visas on the basis of being members of the applicant’s family unit.
2. The applicant first entered Australia on 25 December 2002. On 30 December 2002 he returned a notification of address or change of address for Business Skills visa holders (the notification of address) identifying his address as 59 Reynold Road, Mount Pleasant.
3. On 8 November 2004, the applicant was sent a standard 24 month survey which he did not return.
4. On 30 November 2005, notices of intention to cancel the visas were sent to the applicant and his family to the address identified in the notification of address and also to an address in Royal Street, East Perth which the applicant had identified as his address on two incoming passenger cards completed on entry into Australia on 13 November 2004 and 5 February 2005.
5. The applicant did not respond to the notice of intention to cancel his visa.
6. On 23 March 2006, a delegate of the respondent decided to cancel the applicant’s business skills visa and the visas held by the applicant’s family. The notices of cancellation were sent to the addresses identified above as well as the applicant’s Indonesian address.
7. The applicant filed an application for review with the Tribunal on 17 April 2006 claiming he had only received the last notice.
8. The applicant filed further documents with the Tribunal on 3 August 2006 claiming that he had registered a company Jamwest Enterprise Pty Ltd (Jamwest) on 17 April 2003. The applicant holds a 100% ownership interest in Jamwest which it was claimed exports air-conditioning parts to Indonesia.
Delegate’s Decision
9. The delegate found that there was no evidence that the applicant had obtained a substantial ownership interest in an eligible business in Australia or that the applicant was involved in the day-to-day management of an eligible business at a senior level. The delegate also found that the applicant had failed to provide any evidence that the applicant had made genuine efforts to fulfil his visa obligations.
Legislation and Policy
10. Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if he or 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 he or she is satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts.
11. Eligible business and ownership interests are defined in s 134(1) of the Act and discussed at paragraph 4.3 of the MSI-133.
12. 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:
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 and 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; and
f. increase in commercial activity and competitiveness within sectors of the Australian economy.
13. 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.
14. 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.
15. 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 to their interpretation provide as follows:
a.business proposals that the person has developed. The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;
b.the existence of partners or joint ventures. The MSI refers to whether there is a formal contract with partners or joint venturers;
c.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;
d.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;
e.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;
f.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;
g.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;
h.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
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 in the day-to-day management of the business:
i.the length of time the person held the ownership interest or participated in the management as the case requires; and
ii.the reason why the person no longer holds the interest or participates in the management as the case requires.
EVIDENCE
16. The Tribunal was provided with the “T” documents as well as a number of other documents tendered by the applicant. The Tribunal heard evidence from the applicant and a Mr Paul Sterling.
17. The applicant tendered a Distribution Agreement entered into in May 2006 between Westaflex (Aust) Pty Ltd (Westaflex) an Australian manufacturer of airconditioning components and the applicant’s Indonesian company PT Jaya Antartika Mitramata (PT Jaya). Under that agreement P T Jaya was appointed as the distributor for Westaflex products in Indonesia.
18. Mr Sterling who is a Director of Westaflex testified that Westaflex supplied products to Jamwest for on-sale to PT Jaya both before and subsequent to the entering into of the Distribution Agreement and that this was done at the applicant’s request.
19. The applicant claimed that apart from the Westaflex products Jamwest had also tried to source other Australian products for export to Indonesia but had been unable to do so.
20. It appeared from the documents tendered by the applicant that Jamwest made little if any profit on the products which it purchased from Westaflex and on-sold to PT Jaya.
21. The applicant acknowledged that he lives and works in Indonesia where he owns several businesses and that from the date that his visa was granted i.e. 25 December 2002 until it was cancelled on 23 March 2006 he had only spent 62 days in Australia.
22. It is clear from the evidence that Jamwest did not carry on any business other than that described above.
TRIBUNAL’S FINDINGS
Substantial ownership in an eligible business in Australia
Substantial ownership
23. Section 134(1) and (2) of the Act require the visa holder to obtain a substantial ownership interest in an eligible business in Australia.
24. Section 134 defines “ownership interest” in relation to a business to mean an interest held by the visa applicant in a business as:
1.1.a shareholder in a company that carries on the business; or
1.2.a partner in a partnership that carries on the business; or
1.3.the sole proprietor of a business;
1.4.including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
25. The word “substantial” has been considered in Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 where Commissioner for Superannuation v Scott 71 ALR 408 at 412 was cited with approval. In Commissioner for Superannuation v Scott the Court considered a number of authorities dealing with the question of what constitutes “substantial” and held, (albeit in the context of s45D of the Trade Practices Act 1974 (Cth)) that the word “substantial” means:
“Real or of substance and not insubstantial or nominal”.
26. What is a substantial ownership of an eligible business is also a question of fact and degree (Ong supra at [25]).
27. The applicant is the sole owner of Jamwest and the respondent conceded that this constitutes a substantial ownership interest and the Tribunal so finds.
Eligible business
28. The definition of an eligible business is set out in s 134(1) 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.
29. Furthermore, the Tribunal has previously found that the reference in ss 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.
30. The Tribunal finds that the applicant has not established that Jamwest was engaged in business for the purpose of securing a profit on an ongoing basis.
31. It is clear from the evidence that Jamwest exports solely to the applicant’s Indonesian company PT Jaya and makes little if any profit on the Westaflex products which it purportedly purchases and re-sells to PT Jaya.
32. In the Tribunal’s view a business that has as its primary aim the supply of products to a foreign business in order to increase the profits of that foreign business cannot be an eligible business. The Tribunal concludes that Jamwest was in fact simply a façade created in order to purportedly satisfy the applicant’s visa requirements.
Active participation at a senior level in the day-to-day management of an eligible business
33. The Tribunal finds that the applicant has failed to demonstrate that he has utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business.
34. The Tribunal should not exercise its discretion to set aside the visa cancellation decision unless it is satisfied that the applicant is utilising his skills in actively participating at a senior level in the day-to-day management of the business (or has made and intends to continue to make genuine efforts to utilise his skills in actively participating at a senior level in the day to day management of the business).
35. The Act is intended to benefit business owners who settle in Australia and actively manage an eligible business (Tang supra at [21]).
36. 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”.
37. Reference can 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]).
38. 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”.
39. 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”.
40. However, in the recent decision of Legana v Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1166, Members Savage Davis and Tovey held at [30]:
“The Tribunal understands the grant of a business skill visa under s134 of the Act is to enable individuals to settle in Australia and establish and manage an eligible business. With respect the Tribunal disagrees with an understanding that in effect renders the visa holders presence in Australia largely irrelevant for the purpose of s134(1)(b) of the Act. Whilst travel outside Australia and communication by email and telephone during these absences can form part of the process of day to day management of the Australian business, the Tribunal does not accept that the management activities can take place virtually entirely offshore”.
41. At already noted in the period of approximately 3 years and 3 months up to the date of cancellation of the visa, the applicant had spent only 62 days in Australia. In the Tribunal’s view this clearly shows that he has not used his skills in actively participating at a senior level in the day-to-day management of an eligible 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
42. In considering the genuine efforts the applicant has made, 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).
43. 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).
44. Paragraph 4.5.1 of MSI-133 provides a list of factors that decision-makers may look at when determining whether a genuine effort has been made.
45. In relation to what constitutes a genuine effort the Tribunal has had regard to previous Tribunal decisions in which is has been found that:
45.1A genuine effort must be more than a superficial or token effort (Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283).
45.2The use of the word “genuine” implies that it must be a real and honest effort and not one which is false, fictitious or a pretence.
45.3The use of the word “effort” implies that some exertion or endeavour must be involved. The requirement is that an effort is made and the respondent contends that this requires some activity on behalf of an applicant. In Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309 the Tribunal found that a genuine effort must be “vigorous and determined”.
45.4It must be a genuine effort to obtain a substantial ownership interest in an eligible business or to utilise an applicant’s skills in the day-to-day management of an eligible business at a senior level. Efforts which cannot realistically satisfy either of these criteria cannot be said to be genuine efforts.
45.5Mere expressions of interest or inquiries fall short of genuine efforts (Yam).
45.6In determining whether a genuine effort has been made, there is good reason for a decision-maker to have regard to the factors set out in MSI-133.
46. The Tribunal is of the view that the applicant’s efforts were not genuine.
DECISION
47. The Tribunal is of the view that the delegate’s decision should be affirmed because:
47.1the applicant has failed to obtain a substantial ownership interest in an eligible business in Australia;
47.2the 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
47.3the applicant has failed to make any genuine efforts to obtain a substantial 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.
I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: ........... [Sgd C Rowe].............
AssociateDate/s of Hearing 16 November 2006
Date of Decision 23 March 2007
Solicitor for the Applicant UnrepresentedSolicitor for the Respondent Mr Arran Gerard
Australian Government Solicitor
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