Chu and Ors and Minister for Immigration and Multicultural and in Digenous Affairs

[2003] AATA 621

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 621

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          Nos W2002/97, 98, 99,100

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Wei Hua Chu Hsiu Hua Huang Chu Yung Kai Chu Yung Ju Chu

Applicants

And Minister for Immigration and Multicultural and Indigenous Affairs

Respondent

DECISION

Tribunal The Hon C R Wright QC., (Deputy President)

Date30 June 2003

PlacePerth

Decision The Tribunal affirms the decision under review in respect of each applicant.

[Sgd Hon C R Wright QC]

Deputy President

CATCHWORDS

Immigration - business skills visa - cancellation of primary and secondary business skill visas - whether "business" - whether eligible business - whether participation at senior level in day to day management - whether genuine effort made to carry out these obligations - secondary visa holders - whether wife, daughter or son would suffer extreme hardship as result of cancellation.

Migration Act 1958 – s134

Re Tang and Minister for Immigration and Multicultural Affairs (2000) AATA 997 (15 November 2000

Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656 (2 August 2002)

Re Dainty and Minister for Immigration and Ethnic Affairs (1987) 6 AAR 259 @ 266

Re Salim and Ors and Minister for Immigration and Multicultural Affairs (2000) AATA 899 (8 October 2002)

Re Wang v Minister for Immigration and Multicultural Affairs (2000) AATA 961 (3 November 2000)

REASONS FOR DECISION

30 June 2003 The Hon C R Wright QC., (Deputy President)  

Background

1.      This is an application for review of the decisions of the respondent’s delegate made on 26 February 2002 to cancel the Business Skills (Migration) (Subclass 127) visa (the “Visa”) of:

(a)      Wei Hua Chu (the “Primary Applicant”); and

(b)Hsiu Hua Huang Chu, Yung Kai Chu and Yung Ju Chu (the ”Secondary Applicants”);

pursuant to s134 of the Migration Act 1958 (Cth) (the”Act”).

2.      The respondent’s delegate was not satisfied that the primary applicant:

(a)had obtained a substantial ownership interest in an eligible business in Australia;

(b)was utilising his skills in actively participating at a senior level in the day to day management of that business; or

(c)that he intended to continue to:

(i)hold a substantial ownership interest in; and

(ii)utilise his skills in actively participating at a senior level in the day to day management of:

an eligible business in Australia.

The respondent’s delegate was also not satisfied that the primary applicant had made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, or to utilise his skills in actively participating at a senior level in the day to day management or that he intended to make such genuine efforts.

3.      The respondent’s delegate also considered whether or not cancellation of the visas held by the secondary applicants would result in extreme hardship to any of them and concluded that none of them would be so affected.

Legal Framework

4. The source of the power to cancel a primary visa holder’s Business visa is to be found in s134(2), (2) and (3) of the Act which provides:

“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:

(ii)the length of time that the person held the ownership interest or participated in the management (as the case requires); and

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

5. The source of the power to cancel a secondary visa holder’s Business visa is s34(4) of the Act which provides:

“(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.”

6. Section 134 (4) operates subject to s134(5) which provides:

“(5)   The Minister must not cancel the other person’s visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.”

7. The applications for review are made to the AAT pursuant to s136 of the Migration Act 1958.

8.      The jurisdiction of the Tribunal in respect of a visa cancellation is to determine the correct or preferable decision at the time that the decision to cancel was made: Wong and MIMA [2002] AATA 54 (31 January 2002) per Deputy President Handley at [37]. In other words, the relevant events are those that occurred prior to and on the date of the decision of the respondent’s delegate.

9. The terms (inter alia) “eligible business” and “ownership interest” are defined in s134(10) as follows:

“`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.

…

“ownership interes”, 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.”

10.     In Tang and Minister for Immigration and Multicultural Affairs (2000) AATA 997 (15 November 2000) Deputy President McMahon said @ paragraphs 20-21:

“20.  In Hope v Bathurst City Council (1980) 144 CLR 1, Mason J considered that the use of the phrase "carrying on the business", as a qualifier of the noun "business", required that there be 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". Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Limited. It has had one export transaction to a company associated with Mr Tang. The evidence relating to lanolin and roller shutters does not add to the perception of a business requiring day-to-day management. In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.

21. If I am wrong in my understanding of this term, it is certainly clear that Mr Tang has not used his skills in the day-to-day management of that business. Clearly the type of remote association which he has had with Tiproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business. “

11.     In Huang and Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656 (2 August 2002) Senior member D W Muller made the following observations:

“ One of the most significant factors to be taken into account in determining whether or not an activity amounts to carrying on a business is whether or not there is an intention to make a profit. If an activity has not and is not likely to result in a reasonable return for energy and money expended, then it is more likely than not that the person so engaging in the activity does so for motives other than the carrying on of a business. The activities carried on in the name of Lin Sun have been virtually revenue neutral. The Tribunal is not satisfied that Lin Sun was a company that was carrying on business. If Lin Sun was carrying on business it was doing so in Taiwan, certainly not in Australia. The act of ordering Australian goods from a base in Taiwan does not constitute the management of a business in Australia. “

12.     The principles stated in both Tang  and Huang have been followed and applied in several other Tribunal decisions and in my respectful opinion they correctly state the law as it applies to matters of this kind.

13.     The meaning of “genuine effort” has received no statutory definition.   Obviously what is or is not a genuine effort in any given case will need careful subjective assessment, but the Migration Series Instructions MSI – 133 issued by the Department for the guidance of officers provides some assistance as to policy.   The Tribunal is not bound to apply the policy criteria set out in MSI – 133, but is entitled to do so.   (Re Dainty and Minister for Immigration and Ethnic Affairs (1987) 6 AAR 259 @ 266).

Facts

14.     The primary applicant is a 54 year old businessman who has extensive and long standing interests in woodchip producing companies and tree plantations in the Asian region.   He has a controlling interest in four factories in Vietnam and five factories in China.   His companies have three “tree factories” in Indonesia.   They own a plantation in Vietnam and also have access to Government owned timber.   The Indonesian part of the business has been operating for over 30 years.

15.     It is apparent from his evidence that the parent company for these operations is Mihaud International Group in which he holds 55% of the shares.    He is also  Chairman of that company.   Some of the regional operations are run by other companies all or most of which incorporate the “Mihaud” name in their title.

16.     The primary applicant was provided with the services of a Mandarin interpreter at the Tribunal hearing as it was claimed in correspondence and other documents that he did not speak English well.   Notwithstanding this state of affairs, the primary applicant chose to give most of his evidence in English, bypassing the interpreter.   As a consequence some of his testimony lacked clarity and detail which, on occasions, was not improved by further questioning.   I have made due allowance for these matters in assessing the primary applicant’s testimony, but having done so, I have nonetheless formed the opinion that much of what he said was either untruthful or unreliable.

17.     It will be useful to start with a broad chronology of the primary applicant’s activities since the granting of his visa.    This can best be given by the following tabulation of events.

Date	Event	Reference
7.12.1998	Subclass 127 Visa issued to applicants
13.12.1998	Primary applicant initially entered Australia
14.12.1998	Primary applicant notified the Department of address 2/1 The Avenue, Crawley, Perth WA 6009	T p140
05.04.2000	Primary applicant and one of the secondary applicants, his son Yung Kai Chu, registered the company, Mihaud Trading Pty Ltd, under the Corporations Law of Western Australia	T p83
14.11.2000	24 month survey sent to applicant at above address (The Avenue, Crawley) – returned undelivered in envelope marked “return to sender”	T pp123-138
23.01.2001	Letter from DIMA to applicant in relation to non receipt of 24 month survey of business skills migrant sent to The Avenue, Crawley address – returned undelivered in envelope marked “return to sender”	T pp121-122
22.02.2001	Woodchip sales Agreement No 1 between Mihaud International Group and Artec Pty Ltd	T pp112-120
02.03.2001	Agreement made between Mihaud International Group as principal and Mihaud Trading Pty Ltd as agent for commission payment	T p90
10.04.2001	Woodchip Sales Agreement No 2, Three vessel contract starting September 2001 between Mihaud International Group and Artec Pty Ltd	Tpp100-111
07.05.2001	Bill of lading between Tumac Lumber Co Inc. Oregon USA and Bank of Taiwan/Taiwan Pulp and Paper Corp for 1 lot woodchips, non coniferous (Tasmanian eucalyptus chips) and commercial invoice from Tumac Lumber Co Inc and credit note from Mihaud International Group	T pp91-94
03.07.2001	Bill of lading between Tumac Lumber Co Inc, Oregon USA and Bank of Taiwan/Taiwan Pulp and Paper Corp for 1 lot woodchips, non coniferous (eucalyptus chips) and commercial invoice from Tumac Lumber Co Inc and credit note from Mihaud International Group	T pp95-97
26.09.2001	Letter from primary applicant’s migration agent to DIMA attaching authorisation to person to act and receive communication	T pp80-82
06.11.2001	Notice of intention to cancel under section 134 of the Migration Act send to primary applicant care of his migration adviser	T pp70-73
06.12.2001	Notice of intention to cancel visas sent to secondary visa applicants	T pp74-79
14.12.2001	Response from primary applicant’s migration adviser in relation to notification of intention to cancel visas	T pp65-69
31.12.2001	2 x Credit notes from Mihaud International Group to Mihaud Trading Pty Ltd for: US$715.50 for 2,385 BDMT for eucalyptus chips; and US$6,477.50 for 21, 591.67 BDMT for eucalyptus chips.	Primary applicant’s witness statement Annexure A
26.02.2002	Applicants’ visas cancelled	T pp13-126; 22-25; 31-34; 40-43

18.     The primary applicant’s witness statement dated 26 September 2002, Exhibit “B” is an interesting document.   It describes his address as “care of Unit 30, 123 Wellington Street, East Perth in the State of Western Australia”..   This is the address of a flat occupied by his university student children, his son aged 24 and his daughter aged 21, the second and third secondary applicants respectively.   The first secondary applicant is the primary applicant’s wife.   It is claimed that this 3 bedroom residential unit is also the office for the primary applicant’s Australian business, Mihaud Trading Pty Ltd.   The company has no employees and has never had an employee.

19.     In the company accounts of Mihaud Trading Pty Ltd for year ending 30 June 2002, the value of “office furniture and equipment” is shown at $1,624 (wholly depreciated).    The primary applicant agreed that he had spent only 88 days in Australia between the date of his visa grant and its cancellation in 2002, and he also claimed that he has participated in the day to day management of Mihaud Trading Pty Ltd by making regular daily phone calls from Asia, or wherever also he may be at any given time to his son in Perth giving him instructions to carry out on the company’s behalf.   In these circumstances I regard the address given by the primary applicant in his statement as no more than an occasional and irregular place of temporary residence during his infrequent visits to this country.   In this connexion it is noteworthy that Mihaud Trading Pty Ltd is not listed in the Telstra phone book.   The capital of the company is shown on its registration documents as being $50,000.   At first the primary visa applicant said he and his son had a 50:50 interest in the company, but the registration documents clearly show that the primary applicant has a majority shareholding of 80%.   What assets are represented by the paid up capital is difficult to say.   It was not explained by the primary applicant.

20.     In his witness statement the primary applicant says:

“3. The nature of the Business is, inter alia, as follows:

(a)the Business is in the nature of compliance activities, specialising in compliance activities for the supply and purchase and export of goods being primarily woodchips.   Such compliance activities includes ensuring woodchip qualities and quality control, control of loading of woodchip products, compliance requirements of shipments and export of woodchip products to overseas buyers.

(b)The Business is also involved in sourcing out new overseas buys for woodchip products for Australian manufacturers and suppliers, and to arrange and ensure compliance of the export activities of those woodchip products from the Australian manufacturers and supplies to the overseas buyers, and ensure compliance of export activities with negotiated contracts.

(c)Currently, the major client of the Business is Mihaud International Group (“Mihaud International”) in Taiwan.  Mihaud International is a major buyer of Australian woodchip products, which have been sourced by the Business.

(d)Mihaud International has already entered into a Woodchip Sales Agreement with Artec Pty Ltd, which is an Australian manufacturer and supplier of Australian made woodchip products.

(e)The Business’ role and activities in this regard is the business of ensuring the compliance of the sale and purchase and export of the woodchip products, predominantly from Artec Pty Ltd to Mihaud International in Taiwan, and ensure compliance and adherence of this export of the woodchip products with the negotiated sale and purchase agreements.

(f)Predominantly, Mihaud International engages the Business to perform these compliance activities as the Business is familiar with the Australian business environment.

(g)The Business’s activities, through me, include but its  not limited to checking and ensuring the quality and quantity of the woodchip products purchased and exported, ensures the transportation delivery dates, and export shipping dates and arranges for loading and compliance issues regarding the export of the woodchip products such as arranging for the bills of lading, and to ensure the adherence of the export of the woodchip products with that of agreed sale and purchase agreements.

(h)The Business is then paid for its services predominantly by way of percentage of the sales quantity, being usually US$0.30 per BDMT.   These payment terms do not deem the business to be a commission agent for overseas buyers, and or deem that the business and the overseas buyer, such as Mihaud International, to have a principal agency relationship.   The payment structure is the most appropriate payment structure for the nature of the business given that the more goods that are bought by overseas buyers such as Mihaud International, the more services and compliance activities the business has to conduct, and as such, the percentage of sales quantity payment method is the most appropriate.

(i)In addition, the Business also is involved in sourcing other overseas buyers other than Mihaud International and other Australian suppliers other than Artec Pty Ltd, and has recently commenced exporting goods themselves.

Annexed herewith and marked “A” are various documents evidencing business activities of the Business.”

21.     This description tends to suggest that Mihaud Trading Pty Ltd is actively engaged in the woodchip exporting business from Tasmania to Asian markets, but there is a noticeable lack of detail in the activities described by the primary applicant.   Perhaps paragraph 3(g) gets closest to providing details of Mihaud Trading Pty Limited’s claimed activities.  I say “claimed” advisedly because it emerged from the evidence of the primary applicant and his son, the second secondary applicant that the son has been a student in Australia since 1995.   At first he came here on a student visa which continued until he was granted a business visa as a secondary applicant on his father’s application in 1998.

22.     The second secondary applicant set up a retail computer shop in Perth in 2000, and later converted that business to an Internet café which he sold in 2002.   During that 2 year period, or the greater part of it, he was studying for a bachelor of business degree at ECU.   He is due to complete that degree in June 2003.   He says he goes to university every afternoon, but stays at home during the morning so that he will be available to receive “faxes from buyers and suppliers and keep contact with him” (his father), “and report to him was it on schedule or wasn’t it on schedule.”   He says he plans a business career in Australia and wishes to stay here.

23.     The primary applicant says that he himself spends 6 or 7 hours every working day attending to the business of Mihaud Trading Pty Ltd.   He says that his other business interests are so well established in Asia that he is able to delegate their management and day to day control to others.

24.     That this description of his activities is beyond belief is clear from the documentary exhibits and the evidence which emerged under cross-examination.  His son who supposedly acts as the conduit for his father’s frequent directions in Perth (where he studies) said “sometimes I was requested to go to Tasmania”.   This of course may be expected of anyone charged with the “compliance” duties described by both witnesses.   But he was then asked “When did you go to Tasmania?”  He answered “A couple of times”.   He was then asked “Do you remember which year, which shipments”.   Answer “Well, I’ve been to there three times, four times”.  Question “And was that this year or last year?”   Answer “Last year”.    “So it was in 2002?”   “Yeah”.   “And was it before or after your visa was cancelled”.   Answer “After”.

So according to his own evidence the person in charge of “compliance” duties had never once been to Tasmania during the currency of the visa, and yet, if the applicant’s evidence is to be believed, a substantial part of the duty of Mihaud Trading Pty Ltd was to ensure compliance by testing and evaluating samples of woodchip produced in Tasmania going overseas to fulfil Artec Pty Limited’s contractual obligations to Mihaud International.          

25.     With this may be contrasted the evidence of the primary applicant.   At pages 22 and 23 of the transcript, the primary applicant was asked questions about the sampling of woodchips in Tasmania prior to their shipment to Asia.    He claimed that, although the woodchip purchase contract envisaged that Mihaud International would test the quality of the chips on their arrival at their Asian destinations, there was also a practice or understanding that a similar process would be carried out in Tasmania during the loading process.    He claimed that this was done by either himself or his son, but on being further probed, it became clear that Artec, the seller of the chips appointed its own surveyor to carry out this quality control procedure.    Nonetheless the primary applicant maintained that he and his son represented the buyer and someone representing the buyer’s interest had to be there to ensure the samples were taken correctly and fairly.

26. This was an important part of the applicant’s case. It was obviously considered that to demonstrate compliance with s134 it was necessary to show that Mihaud Trading Pty Ltd exercised a degree of hands on, continuous involvement in the administration and execution of the export contracts governing the supply of Artec woodchips to Asia. In my opinion, the primary applicant’s evidence, when compared with that of his son, shows that he has exaggerated and been mendacious as to Mihaud Trading Pty Limited’s so called “compliance” duties at least up to the date of visa cancellation, which, as already mentioned is the relevant date for review purposes.

27. It now appears that the most recent contract for woodchip delivery is between Artec Pty Ltd and the applicant’s Australian company Mihaud Trading Pty Ltd, and as a consequence Mihaud Trading Pty Ltd is directly involved in the export of raw materials overseas and this is an eligible business for the purposes of s134.

28.     This proposition does not advance the primary applicant’s claim however.   The  contract in which Mihaud Trading Pty Ltd is named as the buyer of woodchips is dated 14 March 2002 which is approximately 3 weeks after the business visas were cancelled (see Exhibit “H”).

29.     A large number of documents were taken into evidence at the Tribunal hearing relating to the activities of Mihaud Trading Pty Ltd since it was first registered on 5 April 2000.    Of these it seems to me that the most significant are:

(a)Woodchip Sales Agreement between Mihaud International Group and Artec Pty Ltd dated 22 February 2001.  (T documents pp113-120).   (A second copy of which became Exhibit “I”).

(b)Woodchip Sales Agreement #2 between Mihaud International Group and Artec Pty Ltd dated April 10 2001 (T documents pp100-111).

(c)Agreement dated 2 March 2000 between Mihaud International Group and Mihaud Trading Pty Ltd.

30.     The two Woodchip Sales Agreements are very similar, if not identical in all essential respects except as to the quantity of woodchips and the number of vessel loads.

31.     The first contract of 22 February 2001 provides for the sale by Artec Pty Ltd to Mihaud International Group of “two full and complete vessels of woodchip, each about 20,000 bone dry metric tons (“BDMT”) +/-10%”..   The first shipment to take place between April 20, 2001 and May 10, 2001; second shipment between June 20, 2001 and July 20, 2001 (but at least 50 days after lst).    The purchase price was $88.00 BDMT, CIF, Hualien or Kaohsiung – discharge port to be declared by buyer prior to vessel loading.

Article 7 of the agreement provided for payment by letter of credit 60 days prior to shipment, together with other supporting documentation.

Article 6 of the agreement dealing with specification quality and measurement provided (inter alia) that “the final net green tonnage is to be delivered at the discharge port at buyer’s expense by an independent ships draft surveyor”.    It was also provided that the “seller or seller’s agent should be allowed to witness the size and moisture content test and have access to original data from these tests”.

32.     There is nothing in this contract as to the buyer or its agent having the right to check the shipment for compliance at the loading port.    In itself this is not conclusive of the buyer’s entitlement by custom or otherwise to be in attendance at the loading operation, but the terms of the contract do nothing to support he primary applicant’s claim that this was part of the work expected of Mihaud Trading Pty Ltd.

33.     The second contract of April 10, 2001 provides for the sale by Artec Pty Ltd to Mihaud International Group of three consecutive full and complete vessels of woodchips each about 21,000 BDMT +/-10% - first shipment between September 1 and 30, 2001.    The terms as to price, payment, specifications, quality and measurement were the same as in the first contract.

34.     The Agreement between Mihaud International Group and Mihaud Trading Pty Ltd is as follows:

“AGREEMENT

This agreement is made and mutually agreed on 2 March 2001 by and between Mihaud International Group as the Principal (hereinafter called the Principal), and Mihaud Trading Pty Ltd as the Agent (hereinafter called the Agent), under the following terms and conditions.

[1]The Principal appoints the Agent to be the sole Agent in Australia area fro the woodchip sales agreement that is made between Mihaud International Group and Artec Pty Ltd.

[2]The Agent will diligently and faithfully serve the Principal as its Agent and be responsible for the survey of woodchip quality, control of loading situation and anything concerning about the woodchip shipment.

[3]The Agent’s commission is US$0.30 per BDMT (US$0.30/BDMT) of sales quantity.   And the Principal should settle the commission with the Agent six months a time.

[4]This agreement may be terminated by either party upon three months’ written notice delivered or sent by registered mail to the other, and may be terminated at any time, without such notice, upon breach of any its terms and conditions.

Principal:Agent:

FOR AND ON BEHALF OF  FOR AND ON BEHALF OF

Mihaud International Group  Mihaud Trading Pty Ltd”

The primary applicant signed the agreement on behalf of Mihaud International Group. His son, the second secondary applicant, signed on behalf of Mihaud Trading Pty Ltd. It is the carrying out by Mihaud Trading Pty Ltd of the obligations specified in Clause 2, which the applicants claim constituted the primary applicants compliance with s134 of the Act relating to business visa requirements.

35. Counsel for the respondent submitted that it was significant that this agreement post-dated the first Woodchip Sales Agreement, but as loading for the first shipment under the latter agreement was not due until April 20 at the earliest, I think nothing turns on that. My real concern is whether it can be said on the basis of the whole of the evidence the primary applicant met the statutory requirements of a business visa holder specified in s134.

36. It is clear enough that he obtained a substantial ownership interest in Mihaud Trading Pty Ltd. The real question under s134(1)(a) is whether Mihaud Trading was, at the relevant times, an “eligible business” is defined in s134(10) and the definition is set out above. In my opinion Mihaud Trading Pty Ltd does not meet any of the six specified criteria in paragraphs (a) to (f). It was suggested that criteria (c) “the export of Australian goods or services” had been met, but in my opinion this is not so. The export of goods in all cases resulted from the contracts between Artec Pty Ltd and Mihaud International. Mihaud Trading Pty Ltd was merely a designated agent for Mihaud International in some aspects of the execution of the contracts. The export of woodchips did not “result” from the business.

37.     This of course assumes that Mihaud Trading Pty Ltd was conducting a “business” at any relevant time and as to this I have considerable doubt.    There were, in all, 5 shipments of woodchips anticipated by the terms of the 2 contracts between Artec Pty Ltd and Mihaud International.   If one assumes that they all went ahead as planned, (and there is no direct evidence of this one way or the other) there were 5 occasions only, within a period of 3 years and 3 months (7 December 1998 to 26 February 2002) during which the business visa was in operation.

38.     It appears to me that, even giving some credence to the evidence of the primary applicant and his son as to the general course of communication between them and the duties allegedly carried out by the son pursuant to his father’s directions, there was nothing in relation to these 5 shipments which could possibly have engaged the son’s attention for more than a few days at a time.   These were, so far as Mihaud Trading Pty Ltd was concerned, merely the performance of intermittent contractual duties which simply and collectively could not be said to be carrying on a business.    I am therefore satisfied that the primary applicant did not obtain a substantial ownership interest in an “eligible business” in Australia at any relevant time.

39. There is really no need to go further in considering s134(1) but as the issue was raised and discussed at the hearing, it is appropriate to also deal with s134(1)(b). The short answer to the problem posed by s134(1)(b) is that there never was an eligible business, but the real issue is whether the primary applicant’s claimed method of operating Mihaud Trading Pty Ltd amounted to “actively participating at a senior level in the day to day management of that business”.. The reported cases establish the principle that s134(1)(b) within the context of s134 as a whole requires a business visa holder to operate the business in Australia.

40.     Insofar as the primary applicant was concerned, he was, during the relevant period, absent for the whole period overseas, except for 88 days.   In short, during the whole period he was, on average, present in Australia about 1 day per fortnight.   It is plain to me that insofar as he was involved in the operations of Mihaud Trading Pty Ltd he was operating from overseas.   A business skills visa is not granted to enable overseas entrepreneurs to gain unlimited access to Australia and permanent residency rights, simply by setting up a token enterprise to be run by family members  whilst the primary visa holder returns to his normal place of residency and business operations in a foreign country.

41. Did the primary applicant make a genuine effort to set up a business which would comply with s134(1)? If so, s134(2) says that, if he intends to continue these efforts his visa must not be cancelled. Again I must remind myself this test applies up to the date of cancellation in February last year. In my opinion, efforts since then are not relevant. Some of the primary applicant’s evidence suggested that since the date of cancellation the nature of the operations of Mihaud Trading Pty Ltd has changed significantly. As the woodchip exporting contract of March 14, 2002 (Exhibit “H”) indicates, Mihaud Trading Pty Ltd is now a buyer of woodchips from Artec Pty Ltd. As such, the primary applicant seemed to be saying, it is now necessary for Mihaud Trading Pty Ltd to undertake all of the buyer obligations as to payment, supervision, testing of the delivered product and, most importantly finding overseas buyers for the woodchips or, presumably, arranging for the processing of the woodchips in some way. The primary visa holder suggested that Mihaud International Group rather than Mihaud Trading Pty Ltd had been the buyer of the 5 previous shipments, because Mihaud Trading Pty Ltd had an insufficient status or credit rating to arrange letters of credit or other funds for such large transactions. I find this difficult to accept. I would have thought Mihaud Trading Pty Ltd could have been guaranteed, in some financially acceptable way, by Mihaud International having regard to the primary applicant’s controlling interest in each company.

42.     I suspect that the real reason behind Mihaud Trading Pty Limited’s present direct involvement in the export process has resulted from the primary applicant’s belated realisation that more direct activity was required by his Australian company if he was to have a chance of retaining the business visa.

43. Up to and including the date of cancellation I am satisfied that the primary applicant had not made the genuine efforts required by s134(2). In reaching this conclusion I have taken into account the matters listed in s134(3) and paragraph 4.5 of M.S.I. 133. During the relevant period I am quite satisfied that the primary applicant was not working 6 or 7 hours per day on the affairs of Mihaud Trading Pty Ltd. The number and frequency of his claimed telephone contacts with his son are not borne out by the telephone accounts.

44.     As to the other relevant criteria, I make the following observations:

(a)      Business proposals

The primary applicant has not provided any documents or other evidence in relation to business plans or proposals.

(b)The existence of partners or joint ventures for the business proposals

The primary applicant has not provided any documents or other evidence as to the existence of Australian partners or joint ventures in relation to the business.

(c)Research undertaken into the conduct of an eligible business in Australia

The primary applicant has not provided any documents or other evidence that he had done any substantial research to investigate business opportunities, potential suppliers or customers of products.   His evidence as to researching possible Western Australian timber sources was vague and unconvincing.

(d)Periods present in Australia

The primary applicant spent only 88 days in Australia between his initial arrival as a Business Skills migrant in December 1998 and the date of cancellation.   That period of time falls well short of the 6 months referred to in the MSI.

(e)Value of assets transferred for use in obtaining an interest in an eligible business in Australia

The primary applicant has not provided any documents or other evidence as to the value of assets, if any, transferred for use in obtaining an interest in an eligible business in Australia.

(f)Value of ownership interest in eligible business in Australia

The primary applicant has not provided any documents or other evidence as to the value of his ownership interest in Mihaud Trading.

(g)Business activities undertaken

The only evidence of business activities provided by the primary applicant is that of the “export” of woodchips from Australia to Taiwan.   While the value of the “export” activities were above the minimum A$100,000 referred to in MSI 133 the primary applicant was paid for his services on a percentage basis on the sales quantity at US$.30BDMT, and the amount received on this basis is below the A$100,000 referred to in MSI 133.   In any case the primary applicant was simply an agent for one of the parties to the contract, as discussed above.

(h)Failure to comply with a notice under section 137

The primary applicant failed to complete and return a 24-month survey form, as required by s137 of the Act. The primary applicant has provided no explanation as to why the survey was not received by him, nor why he did not make arrangements to ensure that correspondence sent about his visa to the address he had nominated was received and acted upon.

Extreme Hardship

45.     In Wang and Minister for Immigration and Multicultural Affairs (2000) AATA 961 (3 November 2000), Deputy President McMahon noted the absence of definition of the term “extreme hardship” in the context of s134(5), and went on to provide the following guidelines:

At paragraph 29-

“Hardship involves more than inconvenience or detriment. Affectation must be to a considerable degree before it can properly be called hardship”.

At paragraph 30 –

“There are many meanings of the word "extreme" offered in the Macquarie Dictionary. Some of the more helpful suggestions are "of a character or kind farthest removed from the ordinary or average", "utmost or exceedingly great in degree", "farthest, utmost or very far in any direction", going to the utmost lengths, or exceeding the bounds of moderation", "the utmost or highest degree, or a very high degree."

At paragraph 31 -

“ The use of the word "would" in subsection (5) indicates that the hardship must be a necessary concomitant of the cancellation. … the legislation requires the decision maker to find that the adverse consequence will almost certainly happen.”

At paragraph 32 –

“ Hardship is a condition that bears hard upon one. In the present case, it is clear that the applicant does not wish to leave Australia. That in itself cannot amount to hardship. The fact that the loss of a visa means that the applicant would need to leave Australia cannot of itself amount to hardship as this is the result contemplated by the statute upon cancellation. One must look at the consequences to the applicant that undoubtedly would result from the cancellation.”

46.     In Salim and Ors and Minister for Immigration and Multicultural Affairs (2000) AATA 899 (8 October 2002), Deputy President Purvis QC., acknowledged that each of the secondary applicants would experience hardship if required to leave Australia. However, he did not consider such hardship to be (at paragraph 47) –

“ … exceptional, unexpected or of such a nature as to qualify for the description of exceedingly great in degree. Unfortunate yes, emotional yes, financial yes to a degree. But not extreme.”

47.      There is no evidence at all touching upon the extreme hardship which may be suffered by the first secondary applicant (the wife of the primary applicant).

48.     As to the second secondary applicant, (the primary applicant’s son).   He made the following claims in his witness statement (Exhibit ”J”).

“11.The cancellation of my visa and my father’s visa will severely cause extreme hardship on me, and my entire family being the other secondary visa holders.

12.My father has made significant investments in Australia in the Business.   The Business shall fail if my father does not have his business visa to maintain senior management control of the investments.

13.I and my entire family currently reside in Australia and intend to continue living in Australia.

14.The cancellation of my visa and my entire family members’ visas would cause extreme hardship on me and all the family members as we all only know of life in the Australian environment, and is familiar and comfortable with life in the Australian environment which is dramatically different to that of Chinese environment.

15.thus, the cancellation of the visas would detrimentally affect my psychological well being and all my other family members.

16.Give my culture and heritage and all my other family members’, the cancellation of the visas would place a social stigma on all of us as we will be forced to leave Australia.   We will be branded as failures and deportees which would have a tremendous adverse impact on my and my other family members’ personal and business reputation.   This would lead to extreme hardship for me.   Further, I will not be able to continue the Business as originally planned and laid out for me.   This would cause extreme hardship as all my future plans regarding my business life will be destroyed.

17.Further the cancellation of my visa would cause severe financial hardship on me as I will not be able to run the Business and all my future career plans already made will be destroyed.”

49.     The second secondary applicant does not explain (and did not explain in oral evidence) who he intended to include in his reference to his “entire family”.   There was no evidence that he is married or has children.   The whole of the evidence as to the living arrangements at his father’s unit at 123 Wellington Street, East Perth tends to confirm that he is a single man without dependents.    I have already commented on the length and nature of his father’s residency in Australia.

50.     I think his references suggesting hardship to his entire family must be assessed on the basis that he, his sister, his father and mother are presently living at the unit.    I view with considerable doubt his doubt his claim that they all “intend to continue living in Australia”.   His claim that they “all only know of life in the Australian environment” is obviously untrue.    The claim that he would be detrimentally affected from a psychological point of view is unsupported by any other evidence.   The same may be said of the claim that visa cancellation will place a “social stigma” on the family.   I reject this proposition.   I also reject the suggestion that severe financial hardship will result from being unable to run Mihaud Trading Pty Ltd.   Having regard to what is known of that company’s activities I am satisfied it could be conducted by the applicant and/or his father from abroad.   The second secondary applicant is due to complete his Bachelor of Business degree this month.   As a minor concession to him and so  as not to present any obstacle to that goal, I will postpone the delivery of this decision until 30 June.

51.     The third secondary applicant is also a student.   She is at Curtin University.   Her studies are also due to conclude this month.   There is no other evidence suggesting hardship to her.

52.     I am satisfied that none of the secondary applicants will suffer extreme hardship as a consequence of the cancellation of the primary visa holder’s visa.

53.     I affirm the decision under review in respect of each applicant.

I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon C R Wright QC (Deputy President)  

Signed: K L Miller (Administrative Assistant)

Date/s of Hearing  30 March 2003  
Date of Decision   30 June 2003
Counsel for the Applicants       James Chong                
Solicitor for the Applicant          James Chong & Co
Counsel for the Respondent     Cressey Wallwork
Solicitor for the Respondent      Blake Dawson Waldron