Chung and Minister for Immigration and Citizenship
[2008] AATA 819
•15 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 819
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2666
GENERAL ADMINISTRATIVE DIVISION ) Re CHAN KING CHUNG Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mr Egon Fice, Member Date15 September 2008
PlaceMelbourne
Decision The decision under review is affirmed.
(sgd) Egon Fice
Member
IMMIGRATION - Business Skills Visa – eligible business in Australia – importing business – transactions within audit period – single export transactions – evidence of benefit to Australia – genuine effort – substantial assets in Australia – residual discretion – hardship to family members
Income Tax Assessment Act 1936
Local Government Act 1990 (NSW)
Migration Act 1958
Migration Amendment Bill (No 2) 1992
The Commissioner of Taxation of the Commonwealth of Australia v Judith Stella Murry (1998) 193 CLR 605
Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307
Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106
Hope v BathurstCity Council (1980) 144 CLR 1
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 (3 February 2004)
Mersey Docks and Harbour Board v Henderson Bros (1888) 13 AC 595
Ward v Williams (1955) 92 CLR 496
REASONS FOR DECISION
15 September 2008 Mr Egon Fice, Member 1. Mr Chan King Chung, who was granted a Business Skills (Subclass 127- Business Owner) visa in 2003, was given notice in January 2007 that the Minister for Immigration and Citizenship (the Minister) intended to consider cancellation of his Business Skills Visa. Mr Chung responded to that notice. After considering Mr Chung’s response, the Minister decided, on 23 May 2007, to cancel Mr Chung’s Business visa. Because Mr Chung’s visa covered his wife and two children, they are also persons affected by the Minister’s decision.
2. Mr Chung seeks a review of the Minister’s decision to cancel his Business visa pursuant to s 136 of the Migration Act 1958 (the Act).
3. The issues before me are whether Mr Chung:
(a)has obtained a substantial ownership interest in an eligible business in Australia;
(b)is utilising his skills in actively participating at a senior level in the day‑to‑day management of that business; and
(c)has made a genuine effort to satisfy (a) and (b) above.
RELEVANT BACKGROUND
4. In 1979 Mr Chung completed a Diploma in Building and Civil Engineering in Fiji. He then came to Australia as a student to undertake a Bachelor of Civil Engineering degree at RMIT University in Melbourne. He did not complete that degree, although he studied for two years.
5. On his return to Fiji in 1983 Mr Chung worked in the construction industry. However, by 1985, he had commenced his own business which involved the growing of cash crops (taro, cassava and ginger) and exporting his products to Australia, New Zealand and the United States of America.
6. Mr Chung’s business in Fiji grew and in 1998 it was incorporated, becoming known as Chung Export Limited (CEL). Mr Chung owned 99 per cent of CEL, the remaining one per cent being held by his wife. CEL now holds five farm leases in Fiji as part of its commercial agricultural operations and has an average annual turnover of approximately A$1.8 million.
7. According to Mr Chung it was in 2000, after yet another coup in Fiji, that he chose to move his business operations elsewhere. He chose Australia because of greater security, politically and socially; and also because of the educational opportunities for his children. At this time he also examined the possibility of growing taro in China rather than in Fiji. He envisaged exporting Chinese-grown taro to Australia.
8. The Department of Immigration and Multicultural and Indigenous Affairs (as it then was) (the Department) notified Mr Chung by letter dated 27 April 2004 that his application for a business visa was approved. The letter indicated that the approval covered is wife and two children and that all of the visa holders were required to enter Australia on or before 24 August 2004. Failure to travel to Australia on or before that date would result in the visas expiring. That letter also enclosed a declaration required to be signed by Mr Chung regarding the conditions of his entry into Australia under the Business Skills visa category. The letter reminded Mr Chung that he was required to notify the Department of his residential address within 28 days of arrival, and of any subsequent changes of residential address for a period of three years following his taking up permanent residence in Australia. Attached to that letter was a brief document setting out the eligibility requirements for Business Skills visa holders which simply summarised the statutory requirements. The attachment informed Mr Chung that after 24 months, he would be required to complete a 24-month survey. The survey would be used to determine whether he had made satisfactory progress in fulfilling the requirements for a Business Skills visa holder. It also informed him that by 36 months after his initial arrival in Australia he was expected to have become involved in a business, as required under the Act.
9. Mr Chung first entered Australia on his Business Skills visa on 7 May 2004.
10. Chung Trading Pty Ltd (CTPL) was registered as an Australian company on 28 October 2002, prior to Mr Chung’s grant of a Business Skills visa. Of the 100 shares issued in CTPL, 70 are held by CEL and the remaining 30 by Guan Yu Chen, Mr Chung’s business associate.
11. Mr Chung caused a second company, C & J Trading Pty Ltd (C & J Trading) to be incorporated on 28 August 2004. Seventy per cent of C & J Trading is owned by the Chung Family Trust, controlled by Mr Chung, and thirty per cent by Ms Chen.
12. CTPL entered into a lease for a stall situated in a warehouse Sydney Markets commencing on 1 October 2004. The term of the lease was five years with three renewal options of five years each. The rental payments were $18,770 per annum. CTPL purchased the business associated with the warehouse, which included a share in Sydney Markets Ltd, for $550,000. CTPL also purchased a vacant block of land at Birrong for $198,000 on 15 September 2003. On 8 April 2005 and 26 April 2005 CTPL purchased two apartments in Newington, for $511,471 and $515,645 respectively.
13. On 6 April 2006 the Department wrote to Mr Chung asking him to complete a survey of business skills because it had been two years since he had been granted his Business Skills visa. Mr Chung did not respond to that letter. On 21 September 2006 the Department again wrote to Mr Chung care of Ms Chen at Regents Park in New South Wales, reminding him that on his application for a Business Skills visa, he had agreed to participate in surveys for three years after his initial arrival in Australia. The Department also reminded him that participation in surveys was a mandatory requirement of his visa. The Department again asked him to complete the enclosed survey documents. He failed to respond. He was sent another letter on 12 December 2006. Finally, on 16 January 2007, the Department wrote to Mr Chung giving him notice that it intended to consider whether to cancel his Business Skills visa. Mr Chung was given an opportunity to comment on the grounds stated in the letter for cancellation and he was told that to avoid his visa being cancelled, he needed to satisfy the requirements under the Act. He was also informed that if his visa was cancelled, the family members who were also granted visas would have their visas cancelled unless the cancellation placed them in a position of extreme hardship. Mr Chung’s solicitors finally responded to the Departments’ requests in May 2007.
LEGISLATIVE SCHEME
14. The Minister’s power to cancel a business visa is set out in s 134 of the Act. Insofar it is relevant, it provides:
(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).
…
(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.
…
(10)In this section:
…
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.
ELIGIBLE BUSINESS IN AUSTRALIA
15. Section 134(1) provides for the Minister to cancel a business visa, in the circumstances described therein. The term eligible business is defined in s 134(10) which sets out the indicia of an eligible business. In fact, to understand that term, one first needs to understand the meaning of the word business as it is used in the Act. It is not a defined term and accordingly it should be given its ordinary meaning. However, in doing so, I am mindful that the meaning to be attributed to a word or expression can be affected by the context in which it is used, as Lord Halsbury said in Mersey Docks and Harbour Board v Henderson Bros (1888) 13 AC 595, at 599 – 600:
It certainly is not a satisfactory mode of arriving at the meaning of a compound phrase to sever it into its several parts and to construe it by the separate meaning of each of such parts when severed.
16. The Full Court of the Federal Court in Ferguson v Federal Commissioner of Taxation (1979) 26 ALR 307 considered some of the factors which are relevant when considering whether a person is carrying on a business. It did so in the context of s 6(1) and s 51(1) of the Income Tax Assessment Act 1936. Bowen CJ and Franki J summarised the effect of the authorities at that time, at 311:
… There are many elements to be considered. The nature of the activities, particularly whether they have the purpose of profit-making, may be important. However, an immediate purpose of profit-making in a particular income year does not appear to be essential. Certainly it may be held a person is carrying on business notwithstanding his profit is small or even where he is making a loss. Repetition and regularity of the activities is also important. However, every business has to begin, and even isolated activities may in the circumstances he held to be the commencement of carrying on business. Again, organization of activities in a business-like manner, the keeping of books, records and the use of system may all serve to indicate that a business is being carried on. The fact that, concurrently with the activities in question, the taxpayer carries on the practice of a profession or another business, does not preclude a finding that his additional activities constitute the carrying on of a business. The volume of his operations and the amount of capital employed by him may be significant.
17. The approach suggested by the Federal Court is consistent with that adopted by the High Court in the well known case of Hope v BathurstCity Council (1980) 144 CLR 1. The High Court was considering whether the occupier of land was carrying on the business of grazing within the meaning of s 118(1) of the Local Government Act 1990 (NSW). Mason J, with whom Gibbs, Stephen, Murphy and Aickin JJ agreed, accepted that:
… “business” in the sub-section has the ordinary or popular meaning which it would be given in the expression “carrying on the business of grazing”. It denotes grazing 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. …
18. More recently, in The Commissioner of Taxation of the Commonwealth of Australia v Judith Stella Murry (1998) 193 CLR 605 the High Court determined whether the sale of shares and a taxi license constituted the disposal of a business. The taxpayer contended that the shares and license were the business. The Court, Gaudron, McHugh, Gummow and Hayne JJ said, at 23, in rejecting a statement made in evidence that the shares and license were regarded as a business:
… A business is not a thing or things. It is a course of conduct carried on for the purpose of profit and involves notions of continuity and repetition of actions.
19. It follows that in determining whether Mr Chung has obtained a substantial interest in an eligible business in Australia, I must first determine whether Mr Chung has obtained a substantial ownership interest in a business and whether he is utilising his skills in actively participating at a senior level in the day-to-day management of that business.
20. Mr Chung’s evidence is that CTPL was registered as an Australian company in October 2002, prior to his being granted a Business Skills visa in 2004. Further, C & J Trading was registered as an Australian company in August 2004. The evidence clearly indicates that Mr Chung has a substantial ownership interest in both of those companies. The next question is whether those companies are carrying on a business in the ordinary sense of that word.
21. Mr Chung tendered in evidence a profit and loss statement for CTPL for the period January - December 2004. Also in evidence were all of the bank statements relating to CTPL’s business cheque account and summaries of business receipts for the years ended 31 December 2004 and 31 December 2005. Those documents clearly indicate substantial business activity by way of sales. For the year ended 31 December 2004, CTPL recorded receipts to the value of $1,028,639.16. For the year ended 31 December 2005, CTPL recorded total receipts in the sum of $565,295.23. The principal business that CTPL conducted was the importation and sale of fresh taro, and some cassava. The evidence indicates that taro, in particular, was imported from Fiji and sold in the Australian market from early 2003 to about August 2005. Shipments were on a regular basis and there was clearly substantial trading.
22. The evidence also indicates that in July 2003 CTPL purchased carpet and other associated materials in Australia and exported them to Fiji in August 2003. There was only one such transaction. There was also a single export of a generator valued at $168,000 to Fiji in October 2004. CTPL exported containers of frozen chicken feet to Hong Kong on 28 October 2003, 15 March 2004 and 16 April 2004.
23. The evidence also discloses that CTPL acquired leasehold over a stall at the Sydney Markets. That provided an outlet for the fresh produce imported from Fiji. There was evidence that CTPL acquired equipment including cool-rooms for its importing business. Mr Chung’s evidence was that the primary purpose of CTPL was to import taro from Fiji.
24. Given the volume of transactions and the value of those transactions conducted by CTPL, there can be little doubt that CTPL did conduct a business in Australia. Principally, that business involved the import of taro from Fiji. It satisfies the indicia referred to in Hope’s case and also in Murry’s case. There was a continuity of actions and there were repetitive transactions which seem to have been conducted for the purpose of profit, despite the fact that, as Mr Chung agreed in cross-examination, CTPL operated at a loss in 2003, 2004 and 2005. I am satisfied that CTPL was conducting a business.
25. However, merely conducting a business is not sufficient to satisfy s 134(1) of the Act. The business must be an eligible business as that term is defined in the Act. Therefore, I need to consider whether the business activities conducted by CTPL result in one or more of the consequences set out in the definition of eligible business.
26. Mr Chung contended that CTPL’s trading activities promoted the development of business links with the international market. This contention is based on the importing activities of CTPL, particularly from Fiji but also the proposed importing of taro from China. The problem with this contention is that the only entity which CTPL dealt with was CEL, Mr Chung’s company in Fiji. In fact, it would be quite accurate to describe CTPL as CEL’s retail outlet in Australia. It cannot therefore be said that the import of taro from Mr Chung’s company in Fiji, delivered to his Australian company CTPL, could be said to develop business links with the international market. It simply provided an outlet for his farming activities in Fiji.
27. If Mr Chung seeks to rely on the meagre export activities of CTPL, my view is that those activities have not resulted in, and will not result in, the development of business links with the international market. As far as the shipment of carpets to Fiji is concerned, that occurred in August 2003, prior to Mr Chung being granted a Business Skills visa and prior to the audit period of three years following the grant of that visa. Furthermore, it was merely a single transaction of relatively small value. There is another problem. Although the Bill of Lading records that Fong Sun Development Limited is the consignee of that shipment, the Fiji Customs Service documents record the consignee as CEL. In fact, I have noted that the address of Fong Sun Development Ltd, which is GPO Box 14301 Suva, is precisely the same as that for CEL. Although I cannot be certain, because Mr Chung was not cross‑examined on this matter, it seems to me that Fong Sun Development Limited might be associated with CEL. In any event, while the bank statements produced by Mr Chung disclose CTPL purchased the carpet and accessories and that was invoiced to Fong Sun Development Limited, there is no evidence in CTPL’s business cheque account of a receipt for the invoiced sum. Furthermore, Williams & Gosling Limited, a Suva-based company, which appears to have acted as shipping agents for the transaction, invoiced CEL in Fiji for handling that consignment.
28. As for the three shipments of frozen chicken feet to Hong Kong, again, those transactions took place before Mr Chung was granted a Business Skills visa. During the relevant audit period, there were no shipments of chicken feet to Hong Kong. Therefore, those transactions do not, in my opinion, constitute the establishment of business links with the international market.
29. The only other export activity by CTPL was the shipment of a generator valued at $168,000 to Fiji. The Fiji Customs Service documents indicate that the consignee again was Fong Sun Development Limited. Although the tax invoice produced in evidence indicates that the $168,000 bill was paid, there is no evidence in CTPL’s bank accounts of the receipt of such a sum of money. The invoice is stamped PAID and the stamp bears the inscription Colonial National Bank Pacific House. On the same day that the invoice was raised, a receipt from Williams & Gosling Limited dated 1 October 2004 to Fong Sun Development Limited indicates a payment of $39,293.32. However, that receipt also notes that the payee or drawer was CEL. The date on the Customs Service invoice is 1 October 2004 which seems to correspond with the shipping agent’s receipt. While I cannot of course conclusively connect the payment made to Williams & Gosling Limited with the receipt of the generator, it does appear that the shipping fee paid to the forwarding agents did relate to the generator and it was paid by CEL. There may of course have been some re-imbursement to CEL by CTPL for those expenses but that is not evident from the bank statements provided. Even if I am wrong about that, a single export transaction of that nature does not, in my opinion, establish the development of business links with the international market.
30. The second possible consequence of the business conducted by CTPL is that it creates or maintains employment in Australia. Mr Chung’s evidence was that Ms Chen was employed to oversee the day-to-day operations at the Sydney Markets. She was Mr Chung’s business partner and a part-owner of CTPL. She came to Australia in 2002 on a 457 Visa. Mr Chung also said that a Ms Gan was employed on a full-time basis and that she was a permanent resident in Australia. Mr Chung said that for most of the years that CTPL operated its import business in Australia, it employed at least one other Australian staff member on a casual basis, who assisted approximately every two weeks for a half day and who was engaged in the unloading and distribution of CTPL import shipments when they arrived in Sydney. The evidence indicates that only one permanent job was created as a result of Mr Chung’s business activities in Australia. That does not, in my opinion, satisfy the second requirement, being the creation or maintenance of employment in Australia.
31. The third possible consequence of the business conducted by Mr Chung is that it results in the export of Australian goods or services. As I have already indicated above, the exports conducted by CTPL, except for the generator which was shipped to Fiji, occurred prior to the audit period. While it was suggested that I should not take those transactions into account because they occurred prior to Mr Chung being granted a Business Skills visa, even if I were to take those transactions into account, I could not be satisfied that it resulted in the export of Australian goods or services. The reason is that the export of the carpet and the generator were isolated transactions. They did not involve notions of continuity or repetition of actions. Although the chicken feet exports might disclose an element of repetitiveness, there were only three transactions. These occurred in late 2003 and early 2004. Since then, there has been no such export activity. The other thing which must be said about the exports to Fiji is that they appear, on their face, to simply be transactions with an associated entity of CTPL. There is no evidence of independent payments, that is, money being paid to CTPL in Australia as a result of those transactions. Quite clearly, if that was in fact the case, then there is no evidence of any benefit to Australia resulting from those exports.
32. There was no evidence that CTPL produced any goods or services in Australia which would be otherwise have to be imported into Australia; or that CTPL introduced new or improved technology to Australia.
33. It was submitted that the activities of CTPL resulted in an increase in commercial activity and competitiveness within sectors of the Australian economy. Mr Chung contended that because of the high volume of taro sales in Sydney in 2004 and 2005, commercial activity in that particular market increased as did competitiveness. However, that was a bare contention, unsupported by the evidence. It seems that Mr Chung was asking the Tribunal to infer that the high volume of sales caused an increase in commercial activity in the fresh produce sector of the economy. The problem is that there was no evidence that it had any such effect. Nor was there any evidence of an increase in competitiveness in the fresh vegetable market. While I accept that the imports of taro from Fiji were substantial, without some evidence of the effect of those imports on the market for that product, I am not prepared to draw the inference Mr Chung seemed to urge on me.
34. The import of taro by CTPL ceased in mid-2005 following problems Mr Chung experienced with the refrigeration units on containers of taro. Mr Chung explained this was due to sabotage by his competitors and it forced CTPL to cease that import activity. Mr Chung estimated that his losses as a consequence of the refrigeration problems amounted to some $550,000. Although Mr Chung said that in the future he wanted to resume imports of taro into Australia, he said the CTPL could not continue in that role. He also suggested that the export business of chicken feet to Hong Kong could be resumed upon the Australian dollar falling in value. However, there was no evidence of any such activity in 2006, 2007 or 2008. Mr Chung also said in evidence that his share in Sydney Markets Ltd had been sold and the money placed in a term deposit in Sydney. Therefore, even if the importing business could be described as an eligible business for the purposes of s 134 of the Act, which is not my view, it appears Mr Chung has carried on no importing or exporting business activity in Australia since the middle of 2005.
35. Mr Chung also contended that CTPL had been conducting a business since the cessation of its imports of taro in 2005 because it had maintained the two Newington apartments and the vacant block of land at Birrong. He said that CTPL had plans to develop the Birrong land. However, as the High Court clearly said in Murry’s case, a business is not a thing or things. Therefore, the mere holding of assets in Australia does not constitute the conduct of a business and certainly could not properly be described as an eligible business for the purposes of s 134 of the Act.
36. According to Mr Chung, C & J Trading was established to manage a proposed taro growing project in China. That project involved the acquisition of land in China suitable for growing taro, which was sourced from Fiji. It was envisaged that C & J Trading would enter into an agreement with Guangzhou Congyu Vegetable Development Co Ltd for the export of Chinese grown taro to Australia and to the United States of America. Although a formal agreement was never signed, in December 2003 Mr Chung sent the first shipment of taro planting materials from Fiji to China. Four further shipments were sent over the next four months. Unfortunately, the crop which should have been available for picking in December 2004 failed. Therefore C & J Trading did not execute the contract with Guangzhou Congyu Vegetable Development Co Ltd. Furthermore, because of the failed crop, the relationship between the two parties deteriorated and the project was abandoned by about August 2005. Although Mr Chung said that he intends to try again in the future, there was no evidence of the China project being re-established within the audit period. It is clear therefore that C & J Trading has never conducted any business, let alone an eligible business within the meaning of s 134 of the Act.
37. It should be apparent from the above that I find Mr Chung has not conducted an eligible business for the purposes of the Act, either through CTPL or C & J Trading. It follows that Mr Chung has not obtained a substantial ownership interest in an eligible business in Australia. Therefore, he cannot satisfy the second limb of s134(1) of the Act which requires him to utilize his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.
GENUINE EFFORT
38. Although my findings above regarding an eligible business in Australia lay the foundation for the Minister to cancel Mr Chung’s business visa, s 134(2) mandates that the Minister must not cancel a person’s business visa if the Minister is satisfied that its holder 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 or her skills in actively participating in a senior level in the day-to-day management of that business; and intends to continue to make genuine efforts to do so .
39. In determining whether a person has made a genuine effort for the purposes of s 134(2) of the Act, the Minister may take into account any or all of the matters set out in s 134(3).
40. The main problem for Mr Chung is that I am not satisfied that either of the businesses of CTPL or C & J Trading are eligible businesses. While I have no doubt that Mr Chung has substantial ownership in both of those companies, that does not assist him unless either of those companies engages in an eligible business. Although the business of CTPL ceased in 2005 there is no evidence of any genuine effort by Mr Chung to have its activities fall within the statutory definition. As for C & J Trading, after the failure of the taro crop in 2004, there is no evidence of any effort being made to have that company engage in an eligible business. Although Mr Chung has said he is regrouping and that he will try again in earnest after this matter before the Tribunal is resolved, that does not seem to me to be an adequate answer. Some three years have now passed and there was no evidence before me of any renewed effort to have either entity engage in an eligible business.
RESIDUAL DISCRETION
41. Although the basis for the Minister to cancel Mr Chung’s Business Skills visa is established, that does not necessarily mean that the Minister must do so. The expression used in s 134(1) is that the Minister may cancel a business visa if the matters as set out have been established. As the High Court of Australia said in Ward v Williams (1955) 92 CLR 496 at 505.
… it is necessary to bear steadily in mind that it is the real intention of the legislature that must be ascertained and that in ascertaining it you begin with the prima facie presumption that permissive or facultative expressions operate according to their ordinary natural meaning.
42. Kiefel J dealt specifically with this issue in Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 (3 February 2004). After considering a number of authorities, Kiefel J formed the view that, in the context in which s 134(1) appears in the Act, it was not obvious that cancellation was the only possibility. Her Honour said, at 21:
… The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by a visa holder. The Minister retains the right to cancellation under s 134(1) at all times. This does not suggest that the Minister is to be obliged to cancel a business visa if the Minister is not satisfied at a particular point during the currency of the visa of the matters in s 134(2).
43. The limits on the exercise of discretionary power were commented upon by Windeyer J in Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134:
If the scope of the permission be not circumscribed by context or circumstances it enables the doing, or abstaining from doing, at discretion, of the thing so authorized. But the discretion must be exercised bona fide, having regard to the policy and purpose of the statute conferring the authority and the duties of the officer to whom it was given: it may not be exercised for the promotion of some end foreign to that policy and purpose or those duties.
44. It is axiomatic that the discretion which is available to the Minister should be exercised so as to accord with the intention of the legislation and in particular the basis upon which the cancellation of a visa is founded. When the Migration Amendment Bill (No 2) 1992 was introduced into the Lower House, in his second reading speech, the then Minister for Immigration, Local Government and Ethnic Affairs said:
Each business migrant acknowledges at the time of application that he or she understands the business objectives of the category and the expectation that they will make genuine efforts to comply with them. Additionally, each business migrant acknowledges that they and their family members’ entry permits may be cancelled if they do no meet the objectives of the program or make genuine efforts to do so.
The Bill gives the Minister clear legislative indicators on which a decision is to be based if cancellation is being considered. The overwhelming majority of business migrants are not likely to be affected by the use of this power. Only those whose intentions are inconsistent with the objectives of the category need have any concern and its use. …
The Bill includes provisions which mean that the power cannot be used against a business migrant unless the Minister has notified him or her of the intention to do so within three years of the migrant’s arrival in Australia. This provision allows business migrants time to make sensible business decisions. It also allows sufficient time for an assessment to be made that the business is likely to be of ongoing benefit.
45. It seems to me that Mr Chung seeks the exercise of the residual discretion in his favour on the basis that due to circumstances beyond his control, he has been unable to satisfy the Minister that he continues to meet the requirements for holding a Business Skills visa. In particular, Mr Chung pointed to the fact that the imports of taro from Fiji ceased because of sabotage to the shipping containers, causing him substantial losses, and the failure of the taro growing venture in China. However, for the reasons I have set out above, I do not consider that these business activities were sufficient to satisfy a finding that the companies involved were conducting an eligible business. The very meagre attempts at exporting Australian products does not evidence a serious effort by Mr Chung to develop the businesses of the two companies concerned, such that they could satisfy the requirements for an eligible business. Although Mr Chung has explained why the export of chicken feet to Hong Kong ceased, it seems to me any export business would necessarily have been affected in the same way, particularly given the recent strength in the Australian dollar against other currencies. Despite that, there is no evidence that Mr Chung developed any other plans to satisfy the requirements of the Act. Although he seemed to place great reliance upon the fact that substantial assets had been transferred from his overseas interests to Australia, there was little or no evidence that those assets were used in developing an eligible business in this country. The same can be said of the substantial bank account balances he holds in this country. By themselves, they do not constitute any business at all.
46. It was also not disputed that Mr Chung had only spent 132 days in Australia following his initial arrival as a business migrant on 7 May 2004. Although Mr Chung contended that time spent in Australia in establishing an eligible business should not, by itself, be determinative of any decision about whether he has made a genuine effort to establish an eligible business, it does give rise to some concerns when examining the possibility of exercising the residual discretion in his favour. The very purpose of the grant of the visa is to enable the grantees to come to Australia and reside, with their family members, for the purpose of establishing the required business. If the grantee of a Business Skills visa in fact establishes a physical presence in the country, it is more likely that such a person will make a genuine effort to establish an eligible business. To do what Mr Chung has done, that is to oversee an existing business operation in Australia from Fiji simply by communicating with the person he has placed in the country to manage that business, does not seem to me to be what was intended by the grant of the Business Skills visa. The visa, in those circumstances, would seem to be almost irrelevant. The nature of the principal business conducted by CPTL in Australia could quite easily be controlled from a foreign country. No business visa would be required. Further, Mr Chung and his family continue to reside in Fiji. His agribusiness is based there. There was no evidence to suggest that this was about to change. Therefore, it seems to me that this is not an appropriate case for the exercise of the Minister’s residual discretion in favour of Mr Chung.
47. Finally, I should briefly mention the effect on Mr Chung’s family if the decision to cancel his visa is upheld. Mr Chung said that although it would not cause him or any of his family members extreme hardship, he did want his children to receive further education in Australia. The effect of cancelling his visa is the cancellation of their visas as well. However, it seems to me that Mr Chung would not be precluded from allowing his children to have an education in Australia. There is no apparent reason why they would not be granted student visas if they wished to apply for them. There was no application on behalf of the children regarding extreme hardship and, given the submissions made on behalf of Mr Chung, nor could there have been.
CONCLUSION
48. In my opinion, despite being given every opportunity to do so, Mr Chung has not established an eligible business in Australia. Nor am I satisfied that he has made a genuine effort to obtain a substantial ownership interest or made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia. I am also satisfied that the residual discretion vested in the Minister by virtue of s 134(1) of the Act should not be exercised in Mr Chung’s favour. There is nothing of course to prevent Mr Chung from making a further application for a business visa at any future date if he is prepared to commit himself to the business objectives which form the basis for the grant of such a visa. In my view, the decision of the Minister to cancel Mr Chung’s Business Skills visa was correct and must be affirmed.
I certify that the forty-eight (48) preceding paragraphs are a true copy of the reasons for the decision herein of
Mr Egon Fice, MemberSigned: Dianne Eva
ClerkDates of Hearing 11 July 2008
Date of Decision 15 September 2008
Counsel for the Applicant Mr John Gibson
Solicitor for the Applicant Mr Rupert Timms, Fragomen Australia
Solicitor for the Respondent Ms Tessa Van Duyn, Clayton Utz
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