Ali and Minister for Immigration and Citizenship
[2008] AATA 482
•11 June 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 482
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4242
GENERAL ADMINISTRATIVE DIVISION ) Re MUSTAFA HASSAN ALI Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Dr K S Levy RFD Senior Member Date11 June 2008
PlaceBrisbane
Decision The Tribunal affirms the Decision under review. ................[Sgd]...........................
Senior Member
CATCHWORDS
IMMIGRATION AND CITIZENSHIP – Visas – business – substantial ownership in an eligible business – no evidence of development of business within Australia – no evidence of development of international market – substantial ownership interest – not operating at a senior managerial level – no intention – no genuine effort – decision under review affirmed.
Migration Act 1958 ss134, 135, 137
Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575;
Purnama v Minister for Immigration and Multicultural Affairs [2002] AATA 237.
Re: Chen & Ors v Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628.
Hope v Bathurst City Council (1980) 144 CLR 1
Jo v Minister of Immigration, Multicultural and Indigenous Affairs [2004] AATA 469
Stone v Commissioner of Taxation [2003] FCAFC 145; (2003) 53 ATR 214
Ong v Minister for Immigration and Multicultural Affairs [2003] AATA 178
Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54
Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 903
REASONS FOR DECISION
11 June 2008 Dr K S Levy RFD Senior Member INTRODUCTION
1. This application under s37 of the Administrative Appeals Tribunal Act 1975 is an appeal against the respondent Minister’s decision to cancel Mr Ali’s Business Skills Visa under s134(1) of the Migration Act 1958 (the Act).
2. The cancellation followed a number of requests for Mr Ali to provide information about his business activities during the period of his visa.
3. During the hearing, Mr Ali was self-represented and was accompanied by a support person. Mr Ali was very articulate but as he was not legally represented, he was offered time and explanation of the Tribunal process if he so required. The respondent was represented by Mr S. Maycock of Clayton Utz.
ISSUES FOR DETERMINATION
4. The Tribunal is asked to determine whether Mr Ali satisfies one of the provisions of s134(1). This requires the applicant to demonstrate that he has made a genuine attempt to satisfy one of the factors in s134(2). Specifically –
(i)Has he obtained a substantial ownership in an eligible business in Australia?; or
(ii)Was he utilising his skills in actively participating at a senior level in the day-to-day management of a business in which he has a substantial ownership?; or
(iii)Did he exhibit an intention to continue to satisfy questions (i) and (ii) above?; and
(iv)Did he make a genuine effort to satisfy the issues in questions (i) to (iii) above?
LEGISLATION
5.The Act relevantly provides:
“s134 Cancellation of business visas
(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
(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.
(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).
(3A)Subject to section 135, the Minister may cancel an investment‑linked visa (other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
…
(5)The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.
…
(10) …
"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 competitiveness within sectors of the Australian economy.”
“s135 Representations concerning cancellation of business visa
…
(2)The holder may make such representations to the Minister within the time specified in the notice.
(3) The Minister must give due consideration to any representations.”
“s137 Provision of information--holders of business visas
(1)The Secretary may by written notice require the holder of a business visa to give the Secretary such information as is specified in the notice.
…
(5)A notice under subsection (1) must state that the information must be provided within a period of 28 days commencing on a day specified in the notice.
…
(7)A person who fails to comply with a notice under subsection (1) commits an offence at the end of every successive 28 day period that is contained in the period commencing on the day specified in the notice and ending when the person complies with the notice.”
EVIDENCE
6. The applicant told the Tribunal at the outset that he did not have any interest in any company registered in Australia. He had during the period under review, an interest in Nuha, a registered company and was a director of that company. In response to a question by the Tribunal, he did not have any business records in the form of financial statements or income tax returns as the company had not undertaken any business.
7. During the course of Mr Ali’s submissions and also in questions under cross examination by Mr Maycock, Mr Ali referred to two shipments of Tasmanian honey to his company in Oman. However, this transaction was between the supplier of honey and Mr Ali’s Omani company and not with Nuha, his Australian company. He also referred to having undertaken research or enquiries about four potential businesses –
(a)A furniture import/export business;
(b)A bakery in Queensland;
(c)Camel Export Pty Ltd; and
(d)A commercial cleaning business.
8. Mr Ali provided evidence that he had paid some $5,000.00 to a solicitor to draw an agreement on one occasion but the agreement was never signed as the vendor changed his mind about the price. Likewise, he referred to another potential business purchase which the Tribunal was told that the vendor on that occasion also changed his mind and did not finalise the contract.
9. In relation to the amount of time spent on potential Australian business, compared with Mr Ali’s other business interests in Oman, the respondent advised the Tribunal that Mr Ali has spent only 83 days in Australia over the three year period from July 2004 to August 2007[1].
[1] Exhibit 2: T13, folio 113.
10. The respondent also referred the applicant to correspondence which the department had sent to him in relation to the enquiries for information about his business and about the Notice of Intention to Cancel his business visa. In particular, the following documents were raised with Mr Ali:
·Application for Business Skills Migration to Australia (Form 47BU)[2];
·Request to Complete Form 1010 (Survey of Business Skills Migrant – 24 Months) – three requests made[3];
·Notice of Intention to Consider Cancelling Applicant’s Visa[4];
·Response from Mr Ali to letter of 26 March 2007 – letter fax 2 April 2007[5];
·Response from Mr Ali to letter of 26 March 2007 – letter fax 10 April 2007[6];
·Response from Mr Ali to letter of 26 March 2007 – email of 14 August 2007[7];
·Notice of Cancellation – letter 15 August 2007[8].
[2] Exhibit 2: T4, Folio 69-85.
[3] Exhibit 2: T9, Folio 100; Exhibit 2: T10, Folio 103; Exhibit 2:T11, Folio, 104.
[4] Exhibit 2: T12, Folio 107-112.
[5] Exhibit 2: T14, Folio 114.
[6] Exhibit 2: T15, Folio 115-116.
[7] Exhibit 2: T16, Folio 117-118.
[8] Exhibit 2: T 17, Folio 119.
11. Mr Ali submitted for the Minister’s consideration that he had made continuous efforts to try and find appropriate business opportunities in Australia but unfortunately, they were unsuccessful. He has more than $100,000.00 invested with the Commonwealth Bank of Australia at both 31 March 2005[9] and 30 June 2005[10]. He also owns two residential units on the Gold Coast[11].
[9] Exhibit 3, Folio 30.
[10] Exhibit 3, Folio 31.
[11] Exhibit 2: T16, Folio 117; Exhibit 2: T6, Folio 86-88.
CONSIDERATION
12. In arriving at a decision in this matter I have considered all of the evidence, the submissions and the relevant statutory and case law as it affects the application made by Mr Ali and the case made by the respondent. In presenting his case, the applicant was self-represented, and was courteous and put his case clearly. The respondent was equally courteous, balanced in his submissions and helpful to the applicant where necessary.
13. I make the following findings of fact relevant to the decision:
(i)The applicant, during the period of his business visa, conducted business in Oman as well as pursuing opportunities in Australia.
(ii)The applicant maintained assets in Australia in cash and real estate. He has at least one daughter in Australia.
(iii)Business opportunities were sought by the applicant for four different businesses during the period 17 July 2004 when he entered Australia on a Business Skills (Migrant) Visa, until 3 August 2007, when his visa was cancelled.
(iv)The applicant was in Australia for 83 days during the three year period of his visa and spent the remaining time in attending to his business interests outside Australia.
(v)Mr Ali used business brokers in his efforts to find business opportunities during the period in question.
(vi)Some correspondence forwarded to Mr Ali between 8 August 2006 and 3 January 2007 was not received by him. They were not sent to his then current address.
(vii)Correspondence was forwarded by Mr Ali to the Department once he became aware of the Department’s concerns, and the correspondence ranges from 26 March 2007 to 3 August 2007.
(viii)A further letter of 14 August 2007 was forwarded by Mr Ali outlining assets he owned. This information was considered by the Department although it was available on the Department’s records prior to that time eg. Real estate ownership[12].
[12] Exhibit 2: T6, Folios 86-88.
14. In determining this case, the Tribunal is assessing the issues submitted under s134 of the Act, as at the date of the primary decision[13]. However, the Tribunal can consider an applicant’s future intentions or other information in reaching the optimal decision[14].
[13] Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575; Purnama v Minister for Immigration and Multicultural Affairs [2002] AATA 237.
[14] ReChen & Ors v Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628.
SECTION 134 FACTORS
15. The provisions of s134 are outlined earlier. There is a fundamental requirement for an applicant to have a “substantial ownership interest” in an “eligible business” (s 134(1) (a) and (b)). There must also be an intention to continue to satisfy the requirements of s134 (1) (a) and (b) and to use the person’s skills and actively participate at a senior level in the day-to-day management of the eligible business (s134 (1) (c)).
does mr ali have an “eligible business”?
16. Under s134 (10), an applicant’s business, to be an “eligible business”, must demonstrate it is “… resulting or will result in” one or more of the outcomes specified. The evidence presented shows the applicant enquired about or undertook some enquiries or research, or endeavoured to enter into one of the four businesses of interest to him. These businesses are all quite different in character and the research and due diligence required to properly decide on embarking on any such business would require some effort if a decision is to be made prudently. That is not a statutory requirement and in any event, no evidence was offered on the amount of preliminary enquiry made. It is, by Mr Ali’s admission to the Tribunal, a fact that no actual business was concluded (apart from the transactions of two export consignments of Tasmanian honey). The evidence does not reveal any of the requirements of the s134 (10) definition of “eligible business”. That is, there was no evidence to show the development of business links with international markets; or the creation or maintenance of employment in Australia; or the export of Australian goods and services; or the introduction of new or improved technology into Australia; or any increase in commercial activity or competitiveness within sectors of the Australian economy.
17. The applicant does not have to show that his activities have already resulted in any of those requirements. He can bring evidence to show that his activities “will result in” one or more of the categories within the definition of “eligible business”. The respondent urged me to follow the definition of business set put by the High Court of Australia in Hope v Bathurst City Council[15]. There, Mason J referred to “business” as being “… … activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”[16]. That case has been applied in other applications before this Tribunal such as Jo v Minister of Immigration, Multicultural and Indigenous Affairs[17].
[15] (1980) 144 CLR 1
[16] (1980) 144 CLR 1 at 8-9.
[17] [2004] AATA 469
18. The Departmental guide (PAM3) refers to consideration of factors such as the continuous nature of transactions, the length of the business relationship, whether customers are sought and financial records kept, and whether the activities are genuine and real (section 7.3).
19. The approach to determining a business was also considered by the Full Court of the Federal Court and it indicated that “… no single factor will be determinative in a particular case. Thus, it will be relevant to determine whether a relevant activity is carried on in a businesslike way and in accordance with commercial principles. If there is a system in the activity coupled with repetition and continuity, that will be indicative of a business…”[18].
[18] Stone v Commissioner of Taxation (2003) 53 ATR 214 at [74]
20. As there was no business transaction entered into by Nuha Pty Ltd, it is apparent, that there was no “business”, and there was no “repetition” or “continuity” to indicate the presence of a business as highlighted in Stone’s case.
21. Taking account of the fact that Mr Ali seemed to have accomplished some businesses in Oman, his achievements over the relevant three year period relied upon brokers and some intermittent involvement personally in Australia. Of four potential businesses in Australia, only two of which involved some negotiations and none of which crystallised into a contract, these did not satisfy me on the balance of probabilities that any of them constituted an “eligible business” under the statute. There were no obvious business links with the international market (except for two consignments of Tasmanian honey which were not exported by Mr Ali’s Australian company); and there was no evidence of any of the other factors mentioned in that definition. I therefore find there was no “eligible business” either in fact or with any possibility of future business.
22. In the event that I am wrong in that determination, I will consider the remaining analysis to determine whether Mr Ali satisfies the requirements of having a “substantial ownership interest” in his business; that he is: “utilising his skills in actively participating at a senior level in the day-to-day management of that business; and that he intends to continue to do so” (s134 (1)). If any of these factors are not satisfied then, subject to s134(2) and (3), the Minister could be justified in cancelling the applicant’s business visa (s134(1)) unless there is evidence which I accept, which is capable of demonstrating that the applicant has made a genuine effort to satisfy the requirements of s134(1).
Does Mr Ali have a substantial ownership interest – S134 (1) (a)?
23. The respondent argues that although Mr Ali is a director and shareholder of Nuha Pty Ltd, he does not have a substantial ownership interest in an eligible business for the purposes of the Act.
24. I note in the solicitor’s letter dated 19 May 2006, that Mr Ali’s instructions were that he held 50 shares in the company while 30 shares were held by Iftikhar Mohamed Habib and 20 shares for Suha Mustafa Hassan. While that has not been verified, he would have a substantial ownership interest. I note the ASIC Certificate of Registration of a Company dated 12 August 2004 showing Mr Ali and Suha Mustafa Hassan as the directors. There is no indication whether Mr Ali and Mr Hassan hold their interest in the company in equal shares. It may be that Mr Ali has a greater shareholding than Mr Hassan or may even have the whole of the shareholding. However, on the assumption that the two directors have an equal shareholding, ie. 50% shareholding each, it is apparent that that is not a majority shareholding in quantitative terms but I consider it nevertheless to be a substantial shareholding.
25. “Substantial” is defined in the shorter Oxford English Dictionary[19], to mean “… of ample or considerable amount, quantity or dimensions”; “… of solid worth or value; weighty”. That meaning connotes the interest in ownership must be “considerable in amount or value or importance”. It should be proportionately large but not necessarily the largest proportion of ownership. It should be sizeable, significant or influential. Mr Ali’s interest in the business meets that definition. That, of course, is not a reflection of the value of the company only Mr Ali’s proportional interest in the ownership of the company. Mr Ali’s bank accounts show that he is a man of some means and had negotiated a significant contract for a bakery, albeit that that contract was not completed. The value of the company is a separate matter although it may not be of substantial value as a legal entity. Nevertheless, it is apparent that Mr Ali would be likely to have the capacity to complete a contract and increase the value of the company had he been successful in obtaining a business.
[19] 3rd Edition, Volume II.
26. On the basis of the apparent or assumed ownership of Nuha Pty Ltd, I find that Mr Ali has a substantial interest in the company, and that is not inconsistent with the reasoning in Ong v Minister for Immigration and Multicultural Affairs[20]; or in Wong v Minister for Immigration and Multicultural Affairs[21]; or Wong v Minister for Immigration and Multicultural Affairs[22].
Did he participate at a senior level in the day-to-day management of an eligible business – S134 (1) (b)?
[20] [2003] AATA 178.
[21] [2002] AATA 54.
[22] [2006] AATA 903.
27. The respondent argues that the applicant has admitted that he does not have a substantial ownership interest in an eligible business or that he has not participated at a senior level in the day-to-day management of such a business.
28. I think the evidence given in the Tribunal by the applicant more correctly is that the applicant admitted that he does not currently have any business interest. That is because he no longer has a business visa. However, during the period in question, it is clear from the ASIC Certificate of Registration that Mr Ali held a business interest in Nuha Pty Ltd, at least until his visa ended, and possibly while his ASIC registration remained current. This is a factual conclusion about whether he had a business. I leave aside for the present purposes whether he had an “eligible business”.
29. As Mr Ali has conceded that there was no operating business at any time during his visa, he could not therefore be said to have participated at a senior level in the day-to-day management of his business.
Did he have an intention to continue holding a substantial interest in, and to utilise his skills actively at a senior management level in, an eligible business (S134 (1) (c)?
30. Mr Ali contends he had the intention required by s134 (1) (c). There is no factual evidence to the contrary.
31. Mr Ali impressed me as a serious businessman who had been successful in the past and I accept he had an intention to maintain a substantial interest in any business in Australia. However, given he had demonstrated a pattern of spending only 83 days in three years in Australia during the period of his visa, I cannot accept that he intended to utilise his management skills actively on a day-to-day basis and at a senior level.
WAS THERE A GENUINE EFFORT TO OBTAIN A SUBSTANTIAL OWNERSHIP IN AN “ELIGIBLE BUSINESS” AND PARTICIPATE AT A SENIOR LEVEL IN THE DAY-TO-DAY MANAGEMENT OF AN “ELIGIBLE BUSINESS” – S134 (2)?
32. In considering an assessment of the elements of this section, I had taken account of the factors contained in s134 (3) in arriving at a conclusion about whether Mr Ali made the genuine effort required.
33. For the reasons given earlier, there was in my view, a genuine effort to obtain a substantial ownership of a business. While the applicant used a broker to assist him in the process, that does not derogate from his genuine effort. What he didn’t do personally he paid an agent to achieve for him. Indeed, that may have been more effective than conducting his own searches particularly in an Australian business environment. He examined four potential businesses and had two draft contracts prepared and paid a deposit on one of them. But in relation to the genuine effort to participate in the day-to-day management of a business at a senior level, there is no evidence of this as he had no business and, in any event, he did not manifest such an intention given that he spent only a minority of his time within Australia. As stated in the analysis of the requirements of s134 (1) (c), there was no evidence to meet this requirement.
34. The respondent’s submissions were to the effect there was no evidence of plans, written proposals or research into any of the four businesses which Mr Ali contends that he sought to acquire. Whether his plans or proposals were written is not conclusive of s134 (3) (a). Nor is it conclusive that he may not have shown evidence about all of the businesses which were of interest to him. There is certainly a suggestion by Mr Ali of some apparently serious negotiations about the business “Out There Design” but those negotiations seemed to have failed not due to any fault of Mr Ali[23]. There is also a suggestion by him of management rights to a business, which did not eventuate into a formal business opportunity in relation to a commercial cleaning business in Sydney. It was indicated that that may have resulted in a contract within a month of the letter to the Department on 2 April 2007. There was no further evidence provided to the Tribunal to indicate any success since that time or certainly before the business visa was cancelled on 3 August 2007.
[23] Letter dated 2 April 2007. Exhibit 2: T14, Folio 114.
35. But there were clearly some expectations of the contract to buy the Turkish bakery and a deposit of $4,000 was paid on 19 March 2007. A further deposit of $30,000 was paid on 15 September 2007 but the contract had clearly failed by 3 October 2007[24] (see solicitor’s letter of 3 October 2007 – exhibit 3, folio 55).
[24] Solicitor’s Letter dated 3 October 2007. Exhibit 3: Folio 55.
36. The respondent also submits that the two shipments of Tasmanian honey to Oman do not satisfy the definition of “business activity” for the purposes of s134(3)(g) and that it was not within the bounds of business activity envisaged by the High Court of Australia in Hope v Bathurst City Council (supra). I agree that it is not a “business activity” factor as described in s134 (3) (g).
37. I note also Mr Ali failed to submit the 24 month survey to the Department by the due date, although it must be acknowledged that Mr Ali did not receive the notice until late in March 2007. He responded very quickly after that date on 2 April 2007. I therefore find that of the factors mentioned in s134 (3), that Mr Ali satisfies s134 (3) (a), (b), (c), (e) and (f). I find that the periods he spent in Australia mitigate against the credibility of Mr Ali to satisfy the requirement that he made a genuine effort to participate in such a business. I conclude that he does not satisfy the factors in s134(3)(d), (g) and (h). I note also in respect of s134(3)(i), the chronology leading to the cancellation of the visa, that the Department has considered all of his submissions but that Mr Ali does not satisfy the statutory requirements.
38. On that basis, I find that Mr Ali has demonstrated a genuine interest in owning a business in Australia but that he has not demonstrated a genuine effort to use his skills in actively participating at a senior level in the day-to-day management of that business. The latter aspect is the statutory prescription which the applicant must show. Taking account of the factors in s134 (3), I therefore find that the evidence does not reveal a “genuine effort” as required by s134 (2).
39. I conclude that the Minister’s decision is correct. In relation to the issues posed for determination, I find that –
(a)Mr Ali obtained a substantial ownership interest in a company during the period under review;
(b)Mr Ali did not have an “eligible business”;
(c)Mr Ali was not using his skills in participating in an “eligible business”;
(d)There was not sufficient evidence to demonstrate an intention to continue to satisfy the requirements of obtaining a substantial ownership interest in a business and using his skills actively in such a business;
(e)A genuine effort to satisfy the legislative provisions was not elicited from the evidence provided by the applicant.
40. The decision under review is therefore affirmed. The applicant’s claim is unsuccessful.
I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Dr K S Levy RFD Senior Member
Signed: ......................[Sgd]......................................................
Jacqui Woods, AssociateDate/s of Hearing 19 May 2008
Date of Decision 11 June 2008
For the Applicant Applicant was self-represented
Solicitor for the Respondent Mr S. Maycock, Clayton Utz Lawyers
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