Hope v Bathurst City Council

IMMIGRATION - business skills visa - cancellation - whether substantial ownership in an eligible business - whether utilising skills in actively participating at a senior level in the day-to-day management of business - whether intention to continue to hold a substantial ownership and to utilise skills

Migration Act 1958 s134

Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1

Re Chen and Minister for Immigration, Multicultural and Indigenous Affairs

[2002] AATA 477

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

Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260

Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997; (2000) 32 AAR 103

Re Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774

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

1. This is an application by Julius Djon Harlim, the primary visa holder (the applicant) for review of decision of a delegate of the Minister for Immigration, Multicultural and Indigenous Affairs (the respondent) dated 20 December 2001, to cancel the Business Skills (Migrant)(Class AD) visas subclass 127 (the visas) granted to the applicant, and the applicant's wife and three children (the secondary visa holders).

2. At the hearing on 21 August 2002 Mr T. Hurley of Counsel represented the applicant and Ms V. Priskich, solicitor of Blake Dawson Waldron, represented the respondent.

3. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975, together with eleven exhibits (Exhibits A1 to A11) tendered by the applicant.

4. The applicant was born in Indonesia on 22 November 1949. On 2 March 1975 he married Veronica Muljana Nata (born on 15 January 1951) and there are three children of the marriage: Ivanho Harlim (born on 4 February 1978), Jennifer Meilana Harlim (born on 10 January 1981), and Irwinho Harlim (born on 30 August 1982). In 1974 the applicant commenced employment in Indonesia as a licensed electrician and worked in his father's business until 1987. In 1988 he established his own business and sought to develop links with Australian businesses in the supply of electrical products. On 23 July 1996 he registered a company known as Vanwin Australia Pty Ltd (Vanwin) in which his wife and son, Ivanho, were the shareholders and directors.

5. On 29 September 1998 the applicant and the secondary visa holders were granted visas. On 30 September 1998 they entered Australia. On 19 October 1998 the applicant incorporated another company called D&J Electrical Supply Pty Ltd (D&J) in which the applicant and his wife were the shareholders. The intention was that D&J was to be responsible for local business, while Vanwin was to be responsible for import/export activities. Since early 1998 the applicant has been working with Energex, the trading name of the South-East Queensland Electricity Corporation Ltd, as an agent in Indonesia to develop business opportunities relating to a remote control metering system of power usage.

6. In August 2000 the Department of Immigration and Multicultural Affairs (the Department) sent the applicant a notice to complete a 24-month survey concerning his business activities, which he submitted on 19 October 2000. On 6 November 2000 the Department wrote to the applicant seeking additional information because the applicant had stated in his survey form that he had not yet engaged in business in Australia. The Department did not receive a reply, and on 30 August 2001 it sent a written notice of intention to cancel the visas. The applicant contacted the Department and stated that he did not receive the letter of 6 November 2000. On 25 September 2001 and 23 November 2001 the applicant provided additional material.

7. On 20 December 2001 the respondent cancelled the visas held by the applicant and the secondary visa holders. On 2 January 2002 the applicant and the secondary visa holders lodged an application with the Tribunal seeking review of the decision.

8. In a written statement dated 17 May 2002 (Exhibit A1), the applicant said that following a number of visits to Australia he gained an understanding of Australian business conditions, and he and his wife decided to live here permanently with their children. He stated that he believed that his family would have a better life in this country than in Indonesia because of the relative political, social and economic conditions. He said that Vanwin was set up in Australia to be the vehicle for the family's business activities. The applicant explained that his wife and son are the only directors and shareholders because he understood that the Indonesian authorities prefer a person not to be a director of an Indonesian company and a foreign company at the same time. He said that he makes all the day-to-day decisions on the company's behalf and is responsible for its operations.

9. The applicant stated that Vanwin operates from an office in South Melbourne and has had low sales (approximately $9,600) for the past two financial years. He stated that as part of his attempts to conduct business in Australia, he established agencies for Vanwin, D&J and himself with a number of businesses. He noted that the purpose of his relationship with Energex was to explore business opportunities in Indonesia, initially through his Indonesian company, PT Surya. The applicant stated that since obtaining his visa he has been working with Energex in his own capacity or as a representative of Vanwin or D&J.

10. As evidence of his extensive dealings with Energex, the applicant produced documents (Exhibit A2) which included details of contracts, purchase orders and dealings with a number of organisations in Australia and Indonesia. He said that after the automatic metering is installed in Indonesia the billing system will result in accrued profit of at least $A7million over a ten-year period, and will provide significant assistance to Australia in the form of increased employment and the development of technology. He described how Vanwin and D&J are supplying components for the installation of meters and the upgrading of existing meters in Indonesia, and Energex is providing the expertise and technical support.

11. The applicant said that since he was granted the visa he has spent 456 days in Australia, and that during his absences in Indonesia he has been developing contacts that will enable the projects involving Energex and his companies to proceed. He also stated that he has transferred substantial sums of money to Australia.

12. In relation to the matters that led to the cancellation of his visa, the applicant told the Tribunal that after his arrival in Australia he did not seek legal or accounting advice regarding the implications of the registration of Vanwin or his obligations and commitments under the terms of his visa. He said that when contacted by the Department he was co-operative and supplied all the information requested of him.

13. In a written statement dated 21 May 2002 (Exhibit A6), Dr P. Chan, Manager, Metering Dynamics, Energex Limited, said that Energex has been working with the applicant since 1999 to expand its metering systems business into Indonesia. He stated that as a result of the applicant's work Energex has signed a memorandum of understanding with an Indonesian government electricity authority to investigate the feasibility of introducing automatic metering systems to Indonesian companies. Dr Chan estimated that turnover for meter reading fees over five years would be $A6.8 million, and $A21.2 million over ten years. He said that the estimated proceeds for each of Vanwin and PT Surya would be $A0.9 million and $A3.1 million respectively. In oral evidence Dr Chan told the Tribunal that he has had extensive dealings with the applicant, who has been appointed as the agent for Energex in Indonesia because of his contacts and his knowledge of the Indonesian market and business practices.

14. The Migration Act 1958 Act (the Act) provides as follows:

134(1) Subject to subsection (2) and to 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 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; 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

(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;

(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; and

(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; and

(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 proposals 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 a 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); and

(ii) the reasons why the person no longer holds the interest or participates in the management (as the case requires).

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;

(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 competitiveness within sectors of the Australian economy;

ownership interest, in relation to a business, means an interest in the business as:

(a) a shareholder in a company that carries on the business; or

(b) a partner in a partnership that carries on the business; or

including such an interest held indirectly through one or more interposed companies, partnerships or trusts;

15. Mr Hurley submitted that the applicant has obtained a substantial ownership interest in an eligible business in Australia. He referred to the definition of eligible business in s134(10) and stated that the evidence demonstrates that the activities of Vanwin and D&J in promoting the development of business by Energex is resulting or will result in the export of Australian goods or services. Mr Hurley said that Vanwin fits within the definition as it is a family entity operating as a partnership, even though the applicant is not a director or shareholder, and his evidence that he operates the business and makes the day-to-day decisions was not challenged by the respondent.

16. Mr Hurley stated that an informal partnership would suffice for the purposes of the Act if in practical terms the person controls the business. Mr Hurley submitted further that the involvement of the applicant in Vanwin, together with his position as shareholder and director of D&J, and his agreement with Energex, demonstrates that he has a substantial ownership interest in an eligible business in Australia, so s134(1)(a) does not apply. Mr Hurley asked the Tribunal to conclude that, for similar reasons, including the extent of the relationship between the applicant and Energex as described by Dr Chan, s134(1)(b) and (c) do not apply.

17. In relation to s134(2) Mr Hurley referred to the applicant's ownership interest in D&J and his practical involvement in Vanwin, together with the contractual relationship with Energex and PT Surya. Mr Hurley submitted that the evidence of efforts made by the applicant to promote the activities of Energex in Indonesia shows that the applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, so he satisfies s134(2)(a). Mr Hurley referred to the evidence of the applicant and Dr Chan and the projections of income over the next ten years in relation to the metering systems to be installed in Indonesia. He submitted that, in the context of the matters set out in s134(3), the applicant has made, and intends to continue to make, a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business, so he satisfies s134(2)(b) and (c).

18. On the question of activities that occurred after the date of cancellation, Mr Hurley submitted that because s134(2)(a) and (c) refer to the subjective intention of a visa holder the Tribunal may have regard to events that occurred after the cancellation of the applicant's visa on 20 December 2001, and he cited Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54. The Tribunal was told that the documents before the Tribunal show that since the date of cancellation the applicant has continued to pursue his business interests with Energex in developing the Indonesian market.

19. Mr Hurley referred the Tribunal to the decisions in Re Tang and Minister for Immigration and Multicultural Affairs (2000) AAR 103, Re Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774 and Re Chen and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 477, and stated that in all the circumstances the applicant has satisfied his obligations under the terms of his visa and the cancellation should be set aside.

20. In the matter of the secondary visa holders, Mr Hurley referred to their written statements and submitted that the children would suffer extreme hardship if forced to leave Australia before completing their respective courses of study. He said that the applicant's wife would suffer extreme hardship because her family unit would be disrupted after four years of stability in Australia. The Tribunal was also told that cancellation of the visas would prejudice any future visa application that may be made by the secondary visa holders.

21. Ms Priskich submitted that the applicant has not demonstrated a substantial ownership interest in an eligible business in Australia. She said that the applicant had chosen to register Vanwin as a partnership, with his wife and son as directors and shareholders, and that the registration was inconsistent with the formation of a partnership. She stated that the applicant's business relationship with Energex was not relevant to the question of an interest in an eligible business in Australia, and PT Surya was not an Australian business. Ms Priskich said that Vanwin was a non-producing conduit for the business activities of the applicant and did not satisfy any of the criteria set out in s134(10).

22. Ms Priskich submitted that as the decision to cancel the visa was based upon satisfaction of specified criteria at a certain point in time, the correctness of the decision should be determined as at the time the delegate made the decisio_n (Re Griffiths)._ She submitted that the Tribunal should take into account Re Widjojo, in which the Tribunal affirmed the decision to cancel the visa after finding that the applicant had not been able to comply with his obligations under the visa through no fault of his own. She stated that the low turnover of Vanwin demonstrated that the applicant has not satisfied the indicators in paragraph 4.5 "What is a genuine effort?" of the Ministerial Guidelines contained in Migration Series Instruction (MSI) N°133 Visa Cancellation Under Subdivision G - Cancellation of Business Visas issued on 30 May 1996.

23. On the question of the secondary visa holders, Ms Priskich referred the Tribunal to Re Setiawan and Minister for Immigration and Multicultural Affairs [2002] AATA 260 in which the Tribunal found that extreme hardship is a subjective assessment to be evaluated against the facts of the particular case. She stated that the onus was on the secondary applicants to provide sufficient evidence to satisfy the Tribunal.

24. In reaching its decision the Tribunal takes into account the documentary and oral evidence and the submissions made at the hearing. On the question of the material to be taken into account when considering the exercise of the discretion to cancel the visa, the Tribunal notes that in Re Griffiths the Tribunal stated at para 41:

Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, is that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision-maker or in existence at the time that the decision under review was made.

... The ordinary principles of administrative review apply. It is the function of this tribunal to deal with the question having regard to the evidence put before it at the time and having all the facts and circumstances that have occurred up until the date of the hearing.

26. The Tribunal accepts the submission by Mr Hurley that the legislation contemplates, in s134, that consideration be given to a person's intention. Therefore, while the exercise of the discretion at the time of cancellation of the visa is the primary focus, matters that refer to occurrences after the date of cancellation may be relevant to address adequately the matters raised in s134.

27. The Tribunal finds the applicant to be an honest witness who gave evidence in a candid manner. The Tribunal is satisfied that Vanwin and D&J are business entities and that Vanwin is promoting, for profit, the development of business opportunities by Energex which is resulting or will result in the export of Australian goods or services (s134(10)(c)); there would be flow-on effects leading to the creation and maintenance of employment in Australia (s134(10)(b)); and an increase in commercial activity and competitiveness (s134(10)(f)). Therefore, the applicant satisfies the definition of eligible business within the meaning of s134(10).

28. On the question of whether the applicant has a substantial ownership interest in Vanwin, the Tribunal accepts the submission by Mr Hurley that the definition of ownership interest in s134(10) includes a partner in a partnership that carries on the business. The Tribunal agrees that the applicant operates Vanwin on a day-to-day basis and makes the major decisions. The Tribunal accepts the explanation by the applicant that, in continuing to pursue business opportunities in Indonesia, he had reasonable grounds for not including his name as a director or shareholder. For these reasons the Tribunal finds that the applicant has a substantial ownership interest in an eligible business in Australia and s134(1)(a) does not apply.

29. Section 134(1)(b) refers to whether the visa holder is utilising his or her skills in actively participating at a senior level in day-to-day management of that business. For business such as Vanwin, the day-to-day management involved in developing an export market for Australian metering systems will involve personal representations in Indonesia, securing orders and facilitating the provision of technical support by Energex. The Tribunal accepts the applicant's evidence and Dr Chan's evidence, that the applicant has substantial experience in Indonesia and has applied his knowledge and contacts consistently and continuously in actively promoting the business plan developed by Energex.

30. In Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, the Court held that carrying on a business denotes activities for the purpose of profit undertaken on a continuous and repetitive basis, even if the business is conducted in a small way. Therefore the Tribunal finds that the relatively small turnover reported by Vanwin does not necessarily prevent the applicant from satisfying the indicators in MSI N°133. It is clear that the management of Vanwin is undertaken almost entirely by the applicant on behalf of the company, so the Tribunal finds that he participates at a senior level and s134(1)(b) does not apply.

31. On the basis of evidence of the increased activity of Vanwin and the projections by Energex over a ten-year period, the Tribunal is satisfied of the applicant's intention to continue to hold a substantial ownership interest and to use his skills in actively participating in day-to-day management. Therefore the Tribunal finds that s134(1)(c) does not apply.

32. For these reasons the Tribunal concludes that the grounds to exercise the discretion in s134(2) do not arise, as none of the pre-conditions for its exercise as set out in s134(1) is met. Therefore, there is no need to address the matters listed in s134(3). The decision to cancel the visas granted to the applicant and to the secondary visa holders should be set aside. As a consequence, it is not necessary for the Tribunal to consider separately the evidence submitted on behalf of the secondary visa holders.

33. The Tribunal sets aside the decision under review and substitutes the decision that the Business Skills (Migrant)(Class AD) visas subclass 127 granted to the applicant and the secondary visa holders should not be cancelled.

I certify that the thirty-three [33] preceding paragraphs are a true copy of the reasons for the decision of: