Best and Minister for Immigration and Multicultural and Indigenous Affairs

[2005] AATA 1215

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1215

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2005/386

GENERAL ADMINISTRATIVE DIVISION		)
Re		Jonathan Gourlay Best

Applicant

And Minister for Immigration and Multicultural and Indigenous Affairs

Respondent

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2005/387

GENERAL ADMINISTRATIVE DIVISION		)
Re		Patricia Best

Applicant

And Minister for Immigration and Multicultural and Indigenous Affairs

Respondent

DECISION

Tribunal Professor GD Walker, Deputy President

Date9 December 2005

PlaceSydney

Decision The matter is remitted to the respondent for reconsideration on the basis that the discretion in s 134 of the Migration Act 1958 be exercised in favour of not cancelling the applicants’ visas.

..............................................

Professor GD Walker
  Deputy President

CATCHWORDS

IMMIGRATION – business skills visa – cancellation of business skills visa and secondary visa – whether primary visa holder has a substantial ownership interest in an eligible business, whether he has “utilised his skills” in that business, and whether he continues to have a substantial interest in that business – examination of the primary visa holder’s business activities in Australia including time spent in Australia – examination of whether there will be hardship if the visa is cancelled – found that the applicant has satisfied the tribunal he does have a substantial ownership interest in DEPL but the tribunal is not satisfied it is a “business” for the purpose of s 134 - the applicant does not satisfy the tribunal that he has participated at a senior level in the day-to-day management or that he has made a genuine effort to obtain a substantial ownership in an eligible business – held that the discretion should be exercised in favour of the applicant to allow him to undertake what is required of a visa holder – the matter is remitted to the respondent for reconsideration on the basis that the discretion in s 134 be exercised in favour of not cancelling the applicants’ visas.

Migration Act 1958 ss 134(1), 134(2), 134(3)(a)(b)(c)(d)(e)(f)(g), 134(10), 135, 136, 137

Migration Series Instruction No 133: Visa cancellation under subdivision G – cancellation of business visas.  

Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31

Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634

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

Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767

Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703

Re Negaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579)

Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283

Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695

REASONS FOR DECISION

9 December 2005	Professor GD Walker, Deputy President
Summary

1.      The applicant, Jonathan Best, aged 57, is a citizen of South Africa. He was granted a subclass 128 business visa on 13 August 2001, valid from 12 November 2001.  A secondary business skills visa was also granted to his spouse, Patricia Best.

2.      A delegate of the respondent, the Minister for Immigration and Multicultural and Indigenous Affairs, decided to cancel Mr Best’s business visa on the grounds that he does not have a substantial ownership interest in an eligible business in Australia, he does not utilise his skills in participating in that business, and does not intend to continue with that business in the future.  The delegate also cancelled the secondary visa held by Patricia Best.  These are the decisions to be reviewed by the tribunal.

Issue

3.      The issue for the tribunal is whether it is satisfied that the applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business and whether he intends to continue to make a genuine effort and if it is satisfied that the applicant does not meet one or all of the criteria, whether it should exercise its discretion to cancel the business visa granted to Mr Best and to Mrs Best as a secondary visa holder.

Background

4.      Mr Best was born on 12 September 1948 and is aged 57. Mrs Best was born on 26 March 1948 and is aged 57.  They are both citizens of South Africa.   They have two adult children who reside in South Africa.

5.      Mr Best was employed as the executive director, finance, of Anglo American Corporation from May 1968 until July 2005.  He holds a master of business administration from the University of Witwatersrand, Johannesburg (T pp70-71).  On 13 August 2001, Mr Best was granted a subclass 128 business skills visa and a secondary business visa was granted to his wife. The visas were valid for a period of three years from the date of entry.  On 12 November 2001, Mr Best entered Australia (T p88).

6.      By letter dated 3 November 2003 from the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”), Mr Best was asked to complete a “Survey of Business Skills Migrant – 24 Months (Form 1010)” to be completed and returned by 10 December 2003 (T10 p85).  He was subsequently granted an extension of time until 15 January 2004.  In a letter to DIMIA dated 16 February 2004 enclosing the Survey (T11 p89), Mr Best apologised for failing to meet the deadline, stating he had been working on a complex merger which had taken up all his time.  He acknowledged that he had made little progress in establishing a business in Australia and that there were two main reasons for this: firstly, because of the difficulty in taking money out of South Africa and secondly, because he was still employed in South Africa and working on a major corporate deal that would not be finalised until January 2005.  Consequently, he would not be available to establish a business in Australia before February 2005 “by which time I will have been able to move a reasonable amount if [sic] capital and seen out my commitments here” (T p90).

7.      On 18 June 2004, an officer of the business skills section of DIMIA wrote to Mr Best acknowledging receipt of the 24 month survey and requesting that he provide documentary evidence including, inter alia, evidence of funds in Australia for the purposes of engaging in business, a detailed business plan, business agreements entered into, or joint venture agreements (T12 p106).   He was given until 27 July 2004 to respond but failed to do so.  On 30 July 2004, the applicant’s then migration agent, Mr Andrew Burger of Andrew Burger & Associates, contacted the department and requested an extension of time for the filing of a response which was subsequently granted until 29 October 2004. No response was made (T p114).

8. On 9 November 2004, the department notified Mr Best of its intention to cancel his business visa under s 134 of the Migration Act 1958 (“the Act”) for failure to meet the requirements of his visa including that he had not obtained a substantial interest in an eligible business in Australia, he had not utilised his skills by participating at a senior level in the day-to-day management of an eligible business, and does not intend to continue to hold a substantial interest in an eligible business (T14 p113).   He was invited to respond by 7 December 2004.  By letter dated 9 November 2004, the department also notified Mrs Best, care of Mr Burger, of its intention to cancel her secondary visa (T15 p118).

9. On 6 December 2004, Mr Burger provided to the department, copies of business statements, financial statements and documents evidencing substantial ownership. He also submitted that the documents demonstrate that that his client has complied with the provisions of s 134(1) of the Act. He also acknowledged that he understood the obligations of his business visa and stated that his client “intends to enter Australia permanently by February 2005 and then to travel to Africa on a regular basis so as to service his portfolio and obligations and in terms of his purchase agreement” (T p122).

10.     On 2 March 2005, a delegate of the respondent decided to cancel Mr Best’s business skills visa on the grounds that he had not obtained a substantial interest in an eligible business in Australia, he is not utilising his skills in participating at a senior level in the day-to-day management of the business, and he did not intend to continue to hold a substantial interest in the business. The delegate found that while Mr Best alleged he had a 10 per cent interest in the business Dust Extractors Pty Ltd, there was no evidence to substantiate that and indeed bank statements demonstrated that he had only transferred funds to Dust Extractors after the notification of the intention to cancel his visa.   The evidence provided also failed to demonstrate that the company was actively involved in business, that it was actively engaged in business for the purpose of profit on a continuous and repetitive basis. Further, there was no evidence that the company was viable on a long-term basis and while the applicant claimed he would be moving to Australia in February 2005, departmental records indicated that he had only been present in Australia for 46 days since his arrival in November 2001 (T2 pp5-10).  Having considered all the evidence, the delegate exercised her discretionary powers and cancelled his visa.   On the same day, the secondary business skills visa of Mrs Best was also cancelled (T3 p11).  On 30 March 2005, Mr and Mrs Best both lodged applications for a review of the decision made against them.

11. At the hearing, the applicants were represented by Ray Turner, solicitor, and the respondent was represented by Therese Quinn, solicitor, Phillips Fox lawyers. The evidence before the tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with the evidence tendered by the parties at the hearing. Mr Best gave oral evidence by telephone from South Africa and Mr Les Johnson gave oral evidence in person.

Applicable Legislation

12. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. Departmental policy with regard to the cancellation of business visa is contained in s 134 of the Migration Series Instructions No 133 – Visa cancellation under subdivision G – cancellation of business visas.

13. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in Mr Best’s case are as follows:

134.     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).

14. Section 134(10) of the Act includes the following definitions:

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.

established business in Australia visa means a business visa a criterion for whose grant:

(a)       relates to the applicant having an established business in Australia; or

(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a)

…

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

(c)        the sole proprietor of the business;

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

15. In the case of Mrs Best, ss 134(4), (5) and (6) are relevant:

(4)       Subject to subsection (5) and to section 135, if:

(a) the Minister cancels a person's business visa under subsection (1) or (3A);and

(b) a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

(c) the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person's business permit or business visa by giving written notice to that person.

(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.

(6) The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.

16.     Paragraph 4.3.2 of the Migration Series Instructions (MSI) notes that eligibility relates to the achievement of the stated objectives through the activities of the business, not directly to the size or scale of the business.

17.     Paragraph 4.5.1 of the MSI also provides guidance as to whether a genuine effort has been made for statutory purposes.  While the guidelines are not binding on the tribunal and should not be applied so as to impose requirements which go beyond the statute (see Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634), the guidelines militate against inconsistency in decision making (see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695). The guidelines state:

4.5      What is a “genuine effort”?

4.5.1 If, after 24 months, a migrant is not in business, he/she must establish that a “genuine effort” has been made to engage in business since arrival. The Minister must assess “genuine effort”. S 134(3) of the Act lists any or all of the factors which the Minister may take into account:

…

[Notes referring to factors listed above.  Decision makers may take                    account of these notes to guide them in the interpretation of 4.5.1

a.        business proposal which is considered genuine, realistic and   achievable;

b.        formal contract with partners or joint venturers;

c.        written evidence of detailed consultations with at least three   business advisers (accountant, lawyer, bank/financial   institution, State/Territory government business development   office, Austrade, business/trade association);

d.        physical presence in Australia for more than six months since   first arrival as a Business Skills class migrant;

e.        transferred to, and retained in, Australia at least 50% of the   funds indicated as available for transfer within two years   (under Factor 4 of the Business Skills Points test);

f.        minimum A$100,000 or 10% ownership previously held by the   person.  If the person is no longer in business, the reasons for   loss of ownership are also relevant.

g.        minimum A$100,000 business activity as indicated by turnover.    This may include other business activity not considered   “eligible business” but cannot include passive investment, eg,   purchase of shares.

h.        failure to comply with a notice for information under s 137,   mandatory monitoring of Australian address and return of   survey forms.]

4.5.2While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled.  The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis.  For example, while the factors listed in 4.5.1 above may be indicative of “genuine effort”, lack of them will not necessarily be decisive.  The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made “genuine effort”.  A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.

Evidence

18.     Mr Jonathan Best gave evidence by telephone from South Africa.  He had intended to give evidence in person at the hearing but had been prevented from doing so because he had been on a short term contract with a Russian goldmining company in Siberia.  Unseasonable snowfalls had prevented his departure and disrupted his travel plans.

19.     Mr Best has worked for 37 years in the gold and diamond mining industries, mainly with Anglo-American Corporation and DeBeers in South Africa, although over the past two years he has had extensive international responsibilities.  His role has been on the financial side and he has been widely involved in procurement functions as well.

20.     Mr Best acquired in December 2004 a 10 per cent shareholding interest in Dust Extractors Pty Limited (“DEPL”), a company formed to take over the assets and technology of a company called Chem-Technique-Spectrum (“CTS”), which was founded and previously operated by Mr Best’s business partner, Mr Leslie V Johnson.  DEPL is developing, and intends to market, a machine designed and developed by Mr Johnson called the Razorback Dust Extractor (the “Razorback”).  Mr Best believes there is a substantial Australian and international market for such a machine in mining because of the increasing strictness of legislation concerning dust emissions in mining operations, especially underground.  The Razorback unit has particular advantages such as mobility and the use of a waterless filter.  Dust elimination has become much more of a factor in mining than previously, and the Razorback unit is a cost-effective way of complying with legislative requirements.  Mr Best’s input has been to discuss the requirements for such a machine, the scope and nature of legislative requirements in prospective purchasing countries and a prospective marketing plan.

21.     As a result of his long-term involvement with Anglo-American, including as a director, he has a large network of contacts in the mining industry in many countries.  That network, he believes, will give him entrée to mining companies in those countries at board level, rather than through the more circuitous, time-consuming and uncertain method of approaching the various purchasing departments.

22.     Until recently progress had been slow because he had been spending time arranging for funds outside South Africa, which is a strictly exchange-controlled environment.  He was also involved in a $1.5 billion transaction for his previous company which had been expected to be completed by the end of 2004.  In fact the project had dragged on and he was asked to remain with the company until July 2005.  Now he is able to devote himself fully to the development of DEPL.

23.     The Razorback machine is still currently in the testing phase.  Mr Best has not been directly concerned with that, but his partner Mr Johnson, an engineer, has been keeping him informed.  His first priority now is to undertake more extensive market research.

24.     When asked by Ms Quinn whether, if he were unsuccessful in retaining his business visa, he would be able to market the machine from overseas, he replied that he needed to be near the place of origin of the product and the place of manufacture.  The machine was designed in Australia by Mr Johnson and would be manufactured here.

25.     Mr Leslie Johnson is a director of DEPL.  He confirmed that Mr Best has invested $100,000 in the company, which has been valued by Mr Johnson’s accountant as a 10 per cent interest in the company.

26.     His company CTS designed and developed a specialised filter for use in coalmines in South Africa in 1991.  It was designed for use by an original equipment manufacturer who in turn sells the extractor units to coalmining companies in South Africa, America, Australia and Germany.

27.     In 1998 he migrated to Australia and established a small manufacturing operation for those filters, for export to South Africa.  The operation had been running successfully in Australia since its inception.  The Razorback unit had its genesis in the requirement of the original equipment manufacturer for a more advanced dust extraction machine that did not require water to clean the filters, used less power, operates in accordance with Australian noise limit standards and is more efficient.

28.     He designed the Razorback to satisfy all those requirements.  He likens it to a giant vacuum cleaner to be used in underground mining and which does not use water to clean the filters.  That is a great advantage because underground mines do not have easy access to water in the quantities required and there are problems with bursting pipes and with maintaining water pressure.  Water filter cleaning can also lead to the generation of mud, which greatly reduces the effectiveness of the extracting equipment.  Filter-bag types of extractor cannot cope with large dust loadings. 

29.     There is no equipment comparable to the Razorback in current use, and DEPL has applied for Australian and international patents for the machine (Exhibits A4, A5).

30.     No manufacturer has yet been engaged because DEPL is still testing the prototype.  Although the Australian patent application was filed in October 2004, working drawings were available only in January 2005.  Those drawings could not be shown to subcontractors at that stage because to do so would negate the patent applications.  A further two to three months were required to design and build the prototype, and testing began in August 2005.  To date several test programs have been completed.

31.     The machine is approximately 97 per cent efficient, but modifications are contemplated to increase its efficiency to 99 per cent.  That will require modifying the machine so that it can deal with five micron dust particles.  The prototype will be tested with the modifications in early January.

32.     Mr Johnson believes there is a substantial market for the machine, as miners need its high efficiency, lower noise factor and waterless operation.  In addition, besides its mining applications, the machine has aroused interest in industry and among power generation operators, which represent potentially a much larger market.

33.     DEPL has developed a business plan and proposes to start its marketing activities in South Africa where the company already has an established record and where the Razorback can be seen as a continuation of its existing business.  Then it is proposed to move into North America, South America and Germany.  The primary demand is expected to come from coalmining, where the dust problem is the greatest.  Mr Johnson says that Mr Best has “incredible contacts” in the industry.  His former position as a director of Anglo-American gives him and the company a marketing edge which will enable them to fast-track the project by taking the proposal directly to corporation executives.

34.     Mr Best has been appointed marketing and sales director of DEPL for Africa.  According to his duty statement (Exhibit A1), he will be required among other things to service DEPL’s existing clients in the petro-chemical, chemical and mining industry in South Africa, including Howdens, Impala Platinum Mines, Sasol 1, 2 & 3, African Explosives and Chemical Industries and others.  He will be expected to initiate business growth and development of the business through preparing and executing appropriate marketing objectives, policies and programs, and prepare monthly sales and marketing forecasts and reports to be despatched to Mr Johnson in Brisbane.  He will be involved in product development and management, liaison with customers, suppliers and government agencies and in developing markets for the products in the emerging mining markets of Angola, Ghana and the Democratic Republic of the Congo, as well as the existing mining markets in the Zambia copper belt.

Consideration of the Law and Findings of Fact

35.     I note by way of preliminary observation that the tribunal should have regard to all relevant evidence to enable the making of findings of fact in relation to the cancellation of Mr Best’s and Mrs Best’s visas as at the date of the decision, that is 2 March 2005: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342; Re Griffiths and MigrationAgents RegistrationAuthority [2001] AATA 240. The tribunal has held that it is entitled to look at activities after the date of visa cancellation and up to the date of the hearing (see Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703; Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767).

36. The decision to cancel Mr Best’s business skills visa was made pursuant to s 134(1) of the Act on the grounds that the delegate concluded that (T p18):

(a)he 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)do not intend to continue to:

(i)hold a substantial 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.

The terms “ownership interest” and “eligible business” are defined in s 134(10), set out above.

37. Section 134(2) provides that the Minister must not cancel a business visa under s 134(1) if the Minister is satisfied that the person:

(a)has made a genuine effort to obtain a substantial ownership 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.

When considering whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account the matters set out in subsection (3), set out above. It is on s 134(2) that the applicant primarily relies.

38. Turning then to s 134(2)(a), the first issue is whether the tribunal is satisfied that Mr Best has made a genuine effort to obtain a substantial ownership in an eligible business in Australia. What constitutes an “eligible business” is defined in s 134(10), set out above. The tribunal notes the case of ReYam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 as a useful guide to the meaning of the relevant provisions. With regard to the words “genuine effort”, Senior Member Dwyer notes at paragraph 88 that:

The Act does not specifically include any requirement that the “genuine effort” must be likely to succeed, or must meet any threshold level, beyond being genuine.

39.     I am satisfied that Mr Best has made a genuine effort to obtain a substantial ownership interest in DEPL through acquiring an approximately 10 per cent interest in the business of the corporation with an investment of approximately $100,000.  As Mr Turner pointed out, it may indeed be that his shareholding is worth more than 10 per cent because the valuation of the corporation by Bob Mardell & Co, Chartered Accountants, values only the patents held by DEPL.  If in fact the value is less than he estimates (T pp134-135) the applicant’s shareholding could represent more than 10 per cent of the company’s value.  The applicant has severed his involvement with the Anglo-American group of corporations as is now willing and able to devote his time and energies to DEPL.  He has a good knowledge of the product and extensive contacts in the most promising markets for it.

40. The applicant submitted in his statement of facts and contentions (Exhibit A2), that Dust Extractors Pty Ltd is an eligible business. In her statement of facts and contentions (Exhibit R2), the respondent rejects that, submitting that Dust Extractors is not an eligible business because it is not a “business” for the purpose of s 134, as defined in Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 as “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”. No evidence had been produced that the company has traded since its registration, or has licensed or registered any patents to show continuity, repetition and activity for profit.

41. The company’s activities to date bear more of the character of preparation for business than of actually engaging in it. The applicant submitted that the absence of any trading in the conventional sense was due to factors beyond his control, such as the requirements for confidentiality while the patent applications were being prepared, the time needed for design, production and testing of the prototype and the requirement to obtain regulatory approval from the appropriate authorities. It is clear that the company fits paragraphs (a) to (f) (except possibly (d)) of the definition of an eligible business in s 134(10), in that it is resulting or will result in the development of business links with the international market, the creation of employment in Australia, the export of goods, the introduction of new or improved technology to Australia and an increase in commercial activity and competitiveness within sectors of the Australian economy. It is well known that the manufacture of mining equipment is a field in which Australia possesses a degree of comparative advantage in international markets, and that is a further factor in its favour.

42. I am not, however, satisfied that DEPL’s operations have reached the point that one could describe it as a “business” for the purposes of s 134, as opposed to being an entity which is preparing to become a business, for the reasons given above.

43. With regard to s 134(2)(b), whether the tribunal is satisfied that the applicant has actively participated at a senior level in the day-to-day management of the eligible business, the respondent contends in her statement of facts and contentions (Exhibit R2) that the applicant has only spent 46 days in Australia since he first arrived, having last departed on 1 July 2004 (Exhibit R3), and therefore could not be involved in the day-to-day management of the business in Australia. Further, the respondent contended, if he had been appointed sales and marketing manager for Africa there was no evidence of any activities undertaken in that position.

44.     The applicant’s contribution to the day-to-day management of the business has been relatively limited to date, consisting mainly of organising funds outside South Africa, discussing the requirements of mining regulation law in potential markets and planning further market research.  Given that the prototype is still in the testing stages, however, that is a reasonable degree of involvement for someone with the applicant’s skills and experience.  The evidence suggests that he intends to settle in Australia and to continue to be involved in the business, and that his responsibilities will increase as development proceeds to the point where the machine can be actively marketed.

45. Finally, with regard to whether the tribunal is satisfied that the applicant meets the criteria in s 134(2)(c), the respondent in her statement of facts and contentions (Exhibit R2) submits that the applicant has not made a genuine effort to obtain a substantial ownership in an eligible business or utilise his skills in the day-to-day management, at a senior level, of that business as there is no evidence of any ownership in the company, only limited funds have been transferred to Australia, the turnover of the company is well below $100,000 and that any business research has been sporadic and preliminary in nature. To a considerable extent those contentions have been overtaken by later evidence, including Exhibit A1, which records Mr Best’s shareholding is DEPL and outlines his duties with the company.

46.     I am not satisfied, however, that Mr Best has made a genuine effort to obtain a substantial ownership in an eligible business in Australia because DPL itself has not yet engaged in any of the kind of transactions for which it was established.

47. The tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in s 134(1)(a) to (c) are not satisfied (Re Negaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579). A common ground on which that discretion can be exercised in favour of an applicant is that further time should be given to the visa holder to undertake what was required of him or her (Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, paragraph 21).

48.     Mr Best has explained the delay in the commencement of actual trading operations by DEPL and in his own move to Australia.  Not all the reasons given are entirely beyond his control.  He could, perhaps, have left the Anglo-American group of companies earlier than he did, but chose not to because he wished to complete a particularly substantial transaction on which he had been working.  At the same time, leaving in those circumstances might have jeopardised the quality of his connections with Anglo-American and other participants in the South African mining industry.  Further, given the time taken to obtain patents, and to design, construct and test a prototype, it would have served no practical purpose.  In the meantime, his financial contribution to DEPL was a major factor in allowing it to proceed with construction and testing and other aspects of its preparation for normal business operations.  The evidence suggests that if preparations continue at their present pace, both DEPL and the applicant will be likely to realise their potential for satisfying all the requirements for an eligible business and for Mr Best’s participation in it.  This is an appropriate case for allowing the primary visa holder to undertake what was required of him.

49.     Mrs Patricia Best’s application is dependent on that of her husband.  In view of the conclusion I have reached in relation to Mr Best’s application it is not necessary for me to consider the possibility that she would suffer hardship if she had to remain in South Africa because her visa is cancelled.

50. The matter is remitted to the respondent for reconsideration on the basis that the discretion in s 134 be exercised in favour of not cancelling the applicants’ visas.

I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President

Signed:         .....................................................................................
  Associate

Date/s of Hearing  2 December 200r5
Date of Decision  9 December 2005
Solicitor for the Applicant          Mr R Turner
Solicitor for the Respondent     Ms T Quinn, Phillips Fox solicitors