Freeman v Department of Social Security

34. The applicant did not satisfactorily explain why the written notices of intention to cancel the business skills visa of himself, his wife and children dated 3 July 2001, and posted by the respondent by registered post at 5 Paton Close, Winthrop, Western Australia, had been returned to sender on 24 July 2001.

35. The applicant's initial evidence was that "I didn't get any notice about the cancellation". As seen above, in response to the question why he never bothered to look into whether the survey was sent he said, "...after I get the - the letter that my visa was cancelled". Also the applicant did not satisfactorily explain why, on his application to the Administrative Appeals Tribunal for review (T4) which he signed, he declared:

Date you received the notice of decision "19/11/2001"

The Tribunal rejects the applicant's evidence that he did not receive the written notice of decision to cancel his business skills visa under s.134 of the Act, sent to him by the respondent on 2 November 2001. The Tribunal finds that the respondent mailed the applicant a notice of intention to cancel his business skills visa to the address last known by the respondent in accordance with Regulation 5.02A of the Migration Regulations on 3 July 2001, and that that letter is taken to have been received seven days after that date in accordance with Regulation 5.03. The applicant is therefore found to have received the notice of intention to cancel his business skills visa on 10 July 2001, pursuant to s.135(1) of the Act. The Tribunal also finds that the visa was cancelled on 2 November 2001 within the 90-day period specified in ss.135(4)(b) of the Act.

36. The Tribunal has adopted the principle of administrative review of having regard to all of the facts and circumstances that were submitted by the parties to have occurred up to the date of the hearing. The Tribunal is mindful that ss.134(2)(c) of the Act prescribes that the Minister must not cancel a business skills visa if the Minister is satisfied that the holder intends to continue to make a genuine effort to comply with ss.134(2)(a) and ss.134(2)(b) of the Act and, ss.134(3) of the Act specifies certain matters that may be taken into account in determining whether a person has made a genuine effort. The Tribunal shall also bear in mind the principles propounded by Justice Davies in the decision of Freeman v Department of Social Security [1988] FCA 294; (1988) 19 FCR 342 referred to in the following paragraph taken from the decision of Deputy President P.K. Handley on 13 January 2002 Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54:

32. Mr Chami, for the Respondent, drew the Tribunal's attention to the decision in Freeman v The Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342, where Justice Davies drew a distinction between decisions to cancel a pension or benefit and decisions in respect of a refusal to grant a pension or benefit. In the case of a decision to cancel, the Tribunal is limited to a consideration of events up to the time of the primary decision, whereas in the case of a decision to refuse the grant of a pension or benefit, the Tribunal is not so limited. Mr Chami referred to a number of decisions in which this approach had been followed including two recent decisions by the Tribunal in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783.

37. The applicant's business skills visa expires on 6 May 2003 which is five years from the date it was granted on 6 May 1998. Subsection 134(8) of the Act provides the following relevant legislation in respect of the decision on 2 November 2001 by the respondent to cancel the applicant's visa:

134(8) A cancellation under this section has effect on and from:

(a) if the person applies to the Administrative Appeals Tribunal for a review of the decision to cancel the visa--the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or

(i) the person's visa was cancelled under subsection (4); and

(ii) the relevant person to whom paragraph (4) (a) applied has applied to the Administrative Appeals Tribunal for a review of the decision to cancel that person's visa;

the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or

(c) the 28th day after the day on which the notice of cancellation is given to the holder of the cancelled visa;

As a result of ss.134(8) of the Act, the applicant's business skills visa continues to operate until its date of expiry on 6 May 2003 unless the decision under review is affirmed by the Tribunal 28 days prior to 6 May 2003. Accordingly, the applicant intends to apply for a subclass 155 five-year resident return visa as soon as possible.

38. The respondent made the following concessions to the applicant during Mr Fell's closing submissions on 17 March 2003, subject to the Tribunal accepting that Musica Entertainment owned 1 Crown Records share on 6 January 2000. (Acceptance by the Tribunal that Musica Entertainment owned 1 share in Crown Records on 6 January 2000 is referred to earlier in these reasons for decision.)

(a) That Crown Records satisfies the eligible business definition prescribed by ss.134(10) of the Act,

(b) that the applicant has a substantial ownership interest in Crown Records,

(c) that in cognisance of (a) and (b) above the applicant has obtained a substantial ownership interest in an eligible business in Australia and accordingly satisfies the requirements prescribed under ss.134(1)(a) of the Act.

39. The respondent contends that its decision to cancel the applicant's business skills visa on 2 November 2001 should be affirmed by the Tribunal because:

(i) the applicant is not utilising his skills in actively participating at senior level in the day-to-day management of Crown Records pursuant to ss.134(1)(b) of the Act;

(ii) that the Tribunal should take into consideration the periods which the applicant has been present in Australia pursuant to ss.134(3)(d) of the Act;

(iii) that the Tribunal should take into consideration the failure of the applicant to return a completed survey of business skills migrant form as requested by the respondent by letters dated 9 June 2000 and 23 October 2000. The respondent contends that the applicant failed to comply with a notice under s.137 of the Act, pursuant to ss.134(3)(h) of the Act.

The respondent referred the Tribunal to the decision of Deputy President B.J. McMahon in the matter of Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997; (2000) 32 AAR 103. The supporting reasons for decision contained the following paragraph, number 25:

25. An examination of the items in the subparagraphs of subsection (3) indicates that none of the headings assist the Applicant in demonstrating that he has made the required genuine effort. The business activity has been minimal. There are no business proposals to which he can point. His investment is minimal. There is only the sketchiest evidence of any research undertaken to establish a business of any kind in Australia. Most importantly, however, the time during which the Applicant has been present in Australia (32 days in more than four years) indicates that there has not been a genuine effort to participate in day-to-day management of the business, nor is there likely to be any such participation in the future. There is no evidence that the Applicant "actively participates at a senior level" from overseas. He cannot reasonably be said to be using his skills in the day-to-day management of the business or to have made a genuine effort to do so.

The respondent pointed out that this case bears similarities to Tang in as much as it is an agreed fact that Mr Widjaja had been in Australia a total of 48 days between the date of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001. However, this case differs from Tang in several major aspects which are most relevant in determining the correct and preferable decision to be made by the Tribunal in respect of this matter.

40. The respondent also referred the Tribunal to the following decisions in support of their contention that the applicant has not participated at a senior level in the day-to-day management of Crown Records because he spent a total of only 48 days in Australia from the time of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001:

* Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656

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

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.

...I am therefore satisfied that Senior Member Muller in Re Huang 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.

The Tribunal however concurs with the applicant's submission that the Act does not support the view that "...it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas", in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act. The Act prescribes that the applicant shall utilise his or her skills in actively participating at a senior level in the day-to-day management of the business and this statutory requirement does not restrict the Tribunal from also examining the activities of the applicant whilst residing overseas in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act.

41. As discussed in these reasons for decision, Crown Records is a joint venture business between two companies, Musica Entertainment which is owned by the applicant and his wife and OOI Music which represents the business interests of Mr Ooi. The joint venture business objectives of Crown Records are based upon two separate management functions. The first management function calls for Mr Ooi to locate popular music artists and bands and to record their musical performances in Crown Records Australian recording studio situated in Collingwood, Victoria. Mr Ooi naturally supervises some of the day-to-day activities of Crown Records such as the financial and/or contractual arrangements negotiated with the Australian recorded artists, the management of the studio and its one technician employee and various other administration and accounting functions. However, all major day-to-day decisions affecting the business are progressively discussed and determined by the applicant and Mr Ooi together as they arise on an ongoing basis. Also the applicant and Mr Ooi continuously work together discussing the style of music presented by various artists, and the suitability or not of that style of music to achieve retailing success in the Asian popular music market. The applicant may proffer advice to Mr Ooi regarding changes in various artists' styles in order to make the music more attractive to Asian music consumers. Mr Ooi eventually prepares a master recording of a selected artist which he submits to the applicant in Indonesia for consideration.

42. The second management function of the Crown Records business is operated by the applicant who fills the position best described as executive producer of the company. The applicant is a highly successful and knowledgable marketing executive of Musica, his family's music recording and printing company located in Indonesia. The applicant resides with his family in Singapore and also has a residence in Indonesia. As soon as the applicant receives the abovementioned Crown Records master recording from Mr Ooi, he offers it to various Asian recording manufacturers on a sub-contract basis. If the Asian recording manufacturers like Mr Ooi's master recording of the Australian artist and are prepared to manufacture the recording in volume, the manufactured recordings are provided to Crown Records in Indonesia via the applicant. The applicant will then attend to the retailing of the manufactured recording, through various sales outlets known by him, to the Asian music consumer market.

43. For the Crown Records joint venture arrangement to be achievable, it is necessary for the applicant to reside in Asia and maintain a significant ongoing commercial relationship with the Asian record making industry and music retail distribution outlets. The applicant satisfies this important aspect of the joint venture arrangement. On the other hand, it is necessary for the other joint venturer Mr Ooi to have a close relationship to the artistic side of the Australian music industry and also have the technical skills to record local performing artists and bands that can be adapted to suit Asian consumer tastes and requirements. Mr Ooi's satisfies this other important aspect of the Crown Records joint venture arrangement.

44. It is clear that it takes a very long period involving up to three years between the time that an artist is selected as being potentially suitable for the Asian market and the time that his/her recordings are available for release at the retail level, and it is understandable that Crown Records had not released any recordings to the Asian market from the date of the incorporation of the company in January 2000 to the date of cancellation of the applicant's business skills visa by the respondent on 2 November 2001. Crown Records did not acquire its recording studio equipment until about July 2001 and it is apparent from the financial statements that the company did not commence operations until after that date. It is also clear from the financial statements that the applicant, through his personal loans via Musica Entertainment to Crown Records, carries almost the entire financial risk in respect of the outcome of the Crown Records joint venture.

45. The respondent has conceded that the applicant meets the requirements of ss.134(1)(a) of the Act and has obtained a substantial ownership interest in an eligible business in Australia - Crown Records. The Tribunal finds that the applicant also meets the requirements of ss.134(1)(b) of the Act and has utilised his skills in actively participating at a senior level in the day-to-day management of Crown Records. In reaching this finding, the Tribunal has taken into consideration the entire day-to-day responsibilities accepted by both the applicant and Mr Ooi under their Crown Records joint venture arrangement and the evidence that all major management decisions concerning Crown Records have been jointly shared and made together by the applicant and Mr Ooi as required on a day-to-day basis. This finding is made in respect of consideration of events to the date of the primary decision to cancel the applicant's business skills visa on 2 November 2001. However, the Tribunal also finds that the applicant has continued to make a genuine effort to the date of the hearing to utilise his skills in actively participating at a senior level in the day-to-day management of Crown Records pursuant to ss.134(2)(b) and (c) of the Act, and intends to continue to do so.

46. The Tribunal has taken into consideration the fact that the applicant has been in Australia a total of 48 days between his date of arrival and the date of cancellation of his business skills visa on 2 November 2001 and finds that the applicant's absence is both desirable and necessary in order to meet the abovementioned business objectives of the Crown Records joint venture arrangement. On the other hand, it will possibly become necessary for the applicant to increase the amount of time that he spends in Australia as Crown Records eventually commences the sale of Australian artist recordings in Asia.

47. The Tribunal has also taken into consideration the failure by the applicant to complete a business skills migrants form as requested by the respondent on 9 June 2000 and 23 October 2000. The Tribunal accepts the applicant's explanation that he completed the survey as requested and that his secretary mistakenly overlooked returning the completed survey document to the respondent. The Tribunal notes the applicant's remorse for his secretary's error and his tardiness in not ensuring that the competed survey document was returned to the respondent as requested.

48. The Tribunal sets aside the decision under review and remits the matter to the respondent with the direction that the applicant's business skills visa should not be cancelled under s.134 of the Act.

I certify that the forty-eight [48] preceding paragraphs are a true copy of the reasons for the decision herein of

Solicitor for the respondent: Mr T. Fell, Australian Government Solicitor