Essof and Minister for Immigration and Citizenship
[2007] AATA 1901
•30 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1901
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2007/1474
GENERAL ADMINISTRATIVE DIVISION ) N2007/1475 Re MAHOMED EBRAHIM ESSOF First Applicant
And KHATIJA ISMAIL ESSOF
Second Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Ms G Ettinger, Senior Member Date30 October 2007
PlaceSydney
Decision The Tribunal affirms the decision under review. As a consequence Mrs Essof’s visa is also cancelled. The Tribunal refers the matter back to the Minister for the appropriate action to be taken.
SGD
Ms G Ettinger Senior Member
CATCHWORDS
IMMIGRATION – Business Skills Visa - cancellation – whether Applicant made a genuine effort to obtain a “substantial ownership interest” in an “eligible business” in Australia – efforts post cancellation - residual discretion – wife of visa holder – no extreme hardship found - decisions affirmed.
Migration Act 1958 ss 134(1), 134(2), 134(3), 134(10)
Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Angkadjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 699
Re Lau and Minister for Multicultural Affairs (2002) 35 AAR 395
Re Harlim and Minister for Immigration and Multicultural Affairs [2002] AATA 767
Re Wong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
Hope v Bathurst City Council (1980) 144 CLR 1
Re Tang Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997
Tjhang and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1203
Legana and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1166
Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
Shi v Migration Agents Registration Authority [2007] FCAFC 59
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Gunawan v Minister for Immigration and Multicultural Affairs [2007] AATA 1110
Re Jo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 77
Chen v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1023
Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Burg and Minister for Immigration and Citizenship [2007] AATA 1630
Re Badenhorst and Minister for Immigration and Multicultural Affairs [2006] AATA 742
Karim v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 56
REASONS FOR DECISION
30 October 2007 Ms G Ettinger - Senior Member
BACKGROUND
1. Mr Mohamed Essof was granted a Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visa to which I shall refer as a Business Visa, on 3 November 2003. He and his family, consisting of his wife Mrs Khatija Essof and their four children had previously been living in Zimbabwe and the USA. He has been engaged in a furniture business with his two brothers in Zimbabwe for 25 years, and owns a third share in that family business from which he continues to receive income. Mr Essof had been to Australia prior to the grant of the visa to explore business opportunities. His wife has her sister and family in Brisbane, which is where they said they intended to settle.
2. Mr Essof’s evidence was that the family really wanted to come to Australia, but on grant of the visa, delays occurred before they were able to make the move. First there was the death of Mrs Essof’s mother in 2004, and the care she had to take of her father until he could relocate in 2006 to live with one of his sons in the UK. Then there were other delays, including considerations regarding the children’s schooling as they were completing their education pursuant to the UK system, and a religiously based trip to Mecca which the family felt ready to make in late 2006.
3. Mr Essof finally arrived in Australia in December 2006, while Mrs Essof stayed on in Zimbabwe to finalise arrangements and ship a container of effects to Australia. She arrived in Australia in April 2007 notwithstanding the cancellation of the visa on 28 March 2007.
4. As to business, in July 2005 (T8/124), Mr Essof was offered the purchase of 10% of shares in Reece’s Hire and Structures Pty Ltd (Reece’s), to the value of $150,000, being A class shares with limited voting powers. Mr Essof said that he understood this would fulfil the requirement that he acquire an interest in an Australian business, and have a role in its day to day management because his intention was to comply with the requirements of the Business Visa, and to live in Australia. He acknowledges now that it was not. I was satisfied from the evidence, (Mr Essof’s evidence and emails in the T-documents), that not notwithstanding the company’s correspondence which indicated Mr Essof would share in the decision making and management of the company, the shares were a passive investment with no rights to profit.
5. Mr Essof spent a total of 69 days in Australia before the cancellation of his Business Visa on 28 March 2007 by a delegate of the Department of Immigration and Citizenship pursuant to section 134 of the Migration Act 1958 (the Act). Mrs Essof’s visa was cancelled as a consequence of that action. The four children have been granted permanent residence, and may remain in Australia regardless of the outcome of Mr Essof’s application for review.
6. Mr Kessels who represented Mr Essof conceded that the Applicant did not satisfy the requirements of section 134(1) of the Act, but argued that the visa should be granted because of genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, and Mr Essof’s stated intention to continue to make such genuine efforts.
7. Mr Kessels also submitted that Mrs Essof would suffer extreme hardship if her visa were not restored as the children are at university in Australia, and the youngest son, now 18, suffers ADD and has suffered two epileptic fits. He needs to take medication which she feels she needs to supervise. The young man has now been able to enrol at TAFE in Australia, and anticipates obtaining an apprenticeship. Mr and Mrs Essof’s evidence was that this would not be available to him in Zimbabwe where he would probably wish to move to be near his mother if she had her visa cancelled. I was not satisfied, and did not find that Mrs Essof’s circumstances as given to me, constituted extreme hardship in terms of the legislation.
8. The children have permanent residence in Australia, and the family has American citizenship (having lived in the USA for ten years), and can return there at any time. Further the children can sponsor their parents at a date in the future if they so wish.
9. I was not satisfied from the evidence that the visa should not be cancelled even after considering the residual discretion pursuant to Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304.
10. Accordingly, I affirm the decisions of the Minister. My reasons follow.
ISSUE BEFORE THE TRIBUNAL
11. The issue to be decided was whether the Tribunal would, pursuant to section 134(1) of the Act, affirm, vary or set aside the decision of the Respondent to cancel Mr Essof’s Business Skills visa, and Mrs Essof’s visa.
12. In deciding this issue, I noted that Mr Essof did not argue that he could satisfy the tests for section 134(1) of the Act. However I had to consider whether I was satisfied that Mr Essof has made a genuine effort to satisfy the tests in section 134(2) of the Act, that is whether he:
· has made a genuine effort to obtain a “substantial ownership interest” in an “eligible business” in Australia; and
· has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business; and
· intends to continue to make such genuine efforts.
13. I was mindful also of the residual discretion which can be exercised pursuant to the decision in Kim, and the discretion which can be exercised in favour of an Applicant in that further time can be given to the visa holder to undertake what was required of him or her.
APPLICABLE LEGISLATION
14. Section 134 of the Migration Act1958 empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in the case of Mr Essof 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.
…”
15. In considering genuine effort, I had to consider the implications of section 134(2) and (3), as discussed in the paragraphs which follow.
EVIDENCE BEFORE THE TRIBUNAL
16. The evidence before the Tribunal comprised the documents produced pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“the T- Documents”), together with the other documents, Exhibits A1 – A6 as tendered. Mr and Mrs Essof both gave oral evidence at the hearing.
CONSIDERATIONS
17. In coming to the correct and preferable decision regarding whether the decision to cancel Mr Essof’s Business Skills visa should be affirmed, varied or set aside, I must take into account all the evidence, both written and oral, the submissions, case law and legislation.
18. I acknowledge the approach in cases which are relevant to the decision making process as follows: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342, and in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 at paragraph 39, where Deputy President Forgie said:
“Where the decision under consideration is a cancellation decision, the Tribunal must consider whether or not that decision was correctly made at the time it was made.”
19. There is a line of Tribunal cases which has followed the above authorities, supporting the proposition that the Tribunal is limited to events at the date of the primary decision in cases of review of decisions cancelling Business Skills visas pursuant to section 134 of the Act.
20. I must therefore have regard to all relevant evidence to enable the making of findings of fact with respect to the Applicants’ situation at the date of cancellation. The Applicant sought to rely on Nicholson J in Shi v Migration Agents Registration Authority [2007] FCAFC 59, [10], where his Honour reviewed certain authorities in relation to the principles established in Freeman. The Respondent’s submission was that at paragraph 18, the Court in Shi stated that: “Applying the principles set out above… I am unable to agree that it was open to the Tribunal to take into account evidence occurring after 14 July 2003 (the date of cancellation), save as any such evidence may have cast light upon the decision as at that date.”
21. I noted also that Nicholson J stated at [10.8] in Shi: “That does not mean that the Tribunal cannot receive evidence of facts that occurred after the date of the decision under review provided that evidence bears on the merits of the decision as at the time that it was required to be made…”
22. That means in effect that essentially the evidence of activities to be taken into account is that occurring up to the date of cancellation unless that evidence bears on the merits of the decision as at the time that it was required to be made.
23. I am mindful that although for the present Freeman and Shi are good law, Shi has been granted leave to appeal by the High Court.
24. However in this matter, I can also take into account future intentions, genuine efforts, and action taken beyond the date of cancellation and up to the date of hearing. Re Angkadjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 699 and Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703 or (2002) 35 AAR 395 and Re Harlim and Minister for Immigration and Multicultural Affairs [2002] AATA 767.
25. Section 134(2) provides that the Minister, and therefore the Tribunal, must not cancel a visa if satisfied that the person:
“(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.”
CONSIDERATIONS RELATING TO SECTION 134(2) OF THE ACT
whether mr essof has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia
26. Mr Kessels conceded on behalf of Mr Essof he did not have a “substantial ownership interest” in an “eligible business in Australia” at the date of cancellation, but submitted that he had made a genuine effort to do so.
27. In relation to genuine effort, Mr Kessels submitted that in Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283, the Tribunal held at [53] that “the word “genuine” and the matters mentioned in s 134(3) show that there is a requirement of a level of effort beyond that which is purely superficial or token…” , and at [88], “However 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…” .
28. The Minister’s representative on the other hand, submitted that Mr Essof had not made a genuine effort to obtain a “substantial ownership interest” in an “eligible business in Australia”.
29. “Ownership interest” and “eligible business” in Australia, are defined as follows:
“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;
...”
“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.”
30. It is well established that a business must be shown to be a commercial enterprise involving activities being pursued for the purpose of profit on a continuous and repetitive basis (Hope v Bathurst City Council (1980) 144 CLR 1).
31. In support of his argument that he had made a genuine effort to do what was required in section 134(2) of the Act, Mr Essof said that he had planned to move to Australia with his family. He said that after the grant of the Business Visa in November 2003, he travelled to Australia in December 2003. He said that he had been researching business in Brisbane even before that date, but that the move to Australia had been delayed due to the death of Mrs Essof’s mother and the fact she was needed to look after her father until he could be relocated to her brother’s care in 2004. There was a concern that the children complete their education under the UK system in which they studied in Zimbabwe, and then Mr and Mrs Essof’s decision to make the trip to Mecca in late 2006, returning in January 2007.
32. Meanwhile in August 2005 Mr Essof purchased 10% of shares in Reece’s to the value of $150,000 (T8/124 & 159). He said that he understood this would fulfil the requirement that he acquire the relevant ownership interest in an Australian business. He gave evidence that he understood his shareholding (A class shares) gave him a limited role in the management of the company, and that the investment was for two years only, but said that he knew he could improve its performance with his input. He said that he had a role in the day to day management, and communicated with the managers by telephone (for which there were no records), as well as emailing monthly. At T8/204 there was a letter from the company corroborating Mr Essof’s evidence regarding his role in the business. Mr Essof said that he spent 2 – 4 hours a month on that business until a short time before the hearing, and attended two meetings of the company in 2005, and one in 2006. When the company went into liquidation he did not obtain his investment back until approximately June 2007. He said that he could not do much else by way of business until he received the money, as he required it for any further investments in Australia.
33. I accepted that Mr Essof entered into the investment hoping it would fulfil the requirements of section 134(1) of the Act. However, I find that his shareholding was A class shares which could be classed as a passive investment, and that the emails sent to the company monthly were quite conversational and did not indicate he had a role in the management. There was no record of the telephone calls to which Mr Essof referred. Further, even if the shareholding had qualified as a substantial ownership in an eligible business, he no longer held the shares at the date of cancellation, and the company had gone into liquidation.
34. Mr Essof told me that since arriving in Australia in December 2006, he had investigated business interests such as a Natural Alternatives franchise, (but decided against that because it would have meant he was in close competition to his brother-in-law), a bookstore, Post Office (not possible because you have to be an Australian citizen), a cake shop, juice bar and furniture store. This was confirmed in a letter dated 21 September 2007 by advisers to Mr Essof (Exhibit A2).
35. Mr Essof also said that he was trying to sell the house in Zimbabwe which was worth approximately $500,000, but given the present economic climate there, might not bring more than $400,000. Mr Essof also told me that he had transferred some $90,000 to Australia in July 2007, (A17/121). That was of course well after the cancellation of the visa in March 2007.
36. Before me as Exhibit A3 was a letter dated 24 September 2007 regarding the sale/purchase of a franchise for Mrs Fields Bakehouse, and a draft contract for the sale of the business to Mr Essof dated 27 September 2007 (the day before the hearing), with the proviso that: “The business is hereby being sold subject to the Purchaser receiving a favourable outcome in its judgement from the Department of Immigration AAT Tribunals procedure.” Mr Kessels who witnessed Mr and Mrs Essof’s signature may not have seen the clause before it was drafted and finalised; I understood it to mean the contract was conditional upon the outcome of the application to this Tribunal in relation to Mr Essof’s Business Visa.
37. Mr Kessel’s submissions in regard to genuine effort were that there was no threshold level required beyond being genuine, and that there was no requirement that the effort must succeed because if so, he submitted there would be no power to cancel pursuant to section 134(1).
38. It is undisputed that Mr Essof did not have any interest in a business in Australia when his Business Visa was cancelled, but in considering whether Mr Essof has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, I find it difficult to accept that he has made that genuine effort. He stated that he intends to continue to make genuine efforts. He told me about the business interests he has explored. I find that research was very superficial. Just the day before the hearing, he signed a contract for a Mrs Fields franchise, a business he knows nothing about, and in which he has had no previous experience.
whether mr essof has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business; and intends to continue to make such genuine efforts
39. In consideration of section 134(2)(b) of the Act, I am required to assess whether Mr Essof 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 referred to in subsection (a). In Mr Essof’s case there is no such business in existence, although he signed a contract for a Mrs Fields franchise the day before the hearing at the Tribunal which appears to be contingent upon him having the Minister’s decision to cancel his visa set aside. Presumably if the franchise is entered into, Mr Essof will participate in the day-to-day management of the business.
40. Mr Essof relied on the shareholding in Reece’s for substantial ownership of an eligible business in Australia, but with the “A” shareholding he had, I am satisfied he did not actually participate in the running of the business. There are a few emails of a very general nature in the T-documents, which do not satisfy me that he contributed to the day-to-day, or any management of the business. Mr Essof says there were telephone calls as well. There is no record of these, nor of what they achieved. Mr Essof invested in Reece’s with a view to leaving his money there for two years, but the company went into liquidation, and at the time of cancellation he no longer held the shares. He received his money back (with no interest paid), in June 2007. He has made no other investments in Australia, and no purchase of real property. I cannot be satisfied that Mr Essof has satisfied what is required in regard to section 134(2)(b).
41. I must also explore whether Mr Essof intends to continue to make genuine efforts. He says he does, and has given a list of inquiries he has made with regard to business in Australia. None of those has progressed beyond an initial inquiry with the exception of the franchise for Mrs Fields (as discussed above).
42. I note in passing that Mr Essof has not told me that he intends to discontinue his business activities in Zimbabwe once he has acquired a relevant business interest in Australia. The evidence is that he continues to hold a third share of the family furniture business, and derive income from it.
43. The efforts made so far are not beyond that which may be described as purely “superficial or token” (Yam and Minister for Immigration and Multicultural Affairs [2004] AATA 283, [53]).
44. I am not satisfied on the basis of the evidence before me that Mr Essof has made a genuine effort in terms of section 134(2) of the Act.
45. Accordingly I am not satisfied that the Applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, and that he has 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.
46. I next considered section 134(3) of the Act in relation to Mr Essof’s stated intention that he intends to continue to make efforts to continue in business in Australia.
Consideration of section 134(3) of the Act and Genuine Efforts
47. I was mindful that section 134(3) of the Act sets out some or all of the matters which can be taken into account when determining whether Mr Essof has made the “genuine efforts” referred to in section 134(2) of the Act. There are departmental guidelines which provide assistance as to whether a genuine effort has been made for statutory purposes. They are of course only guidelines, and are not binding on me, but they can be of assistance and I have considered them in addressing the subsection discussed in the paragraphs below (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577).
“s 134 (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).”
Section 134(3)of the Act:
(a) business proposals that the person has developed;
48. In relation to section 134(3)(a), Mr Kessels submitted that after the notice to cancel, but prior to cancellation, Mr Essof did due diligence and prepared a business proposal for involvement in a Natural Alternatives franchise, similar to his brother’s business in Brisbane.
49. Ms van Duyn submitted that Mr Essof had not provided evidence of business proposals or plans beyond some financial statements and correspondence between himself or his accountant and three business vendors.
50. I was not satisfied from the evidence that Mr Essof had progressed to the stage of business proposals in the relevant time frame, or that his tendering of a contract for a potential franchise purchase dated 27 September 2007, the day before the hearing, predicated upon the outcome of the review application indicated there had been any development of business proposals.
(b)the existence of partners or joint venturers for the business proposals;
51. Mr Kessels did not claim that Mr Essof satisfied this subsection.
52. I was satisfied that there were no partners or joint venturers to be considered in the context of this application.
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
53. Mr Kessels referred to Mr Essof’s evidence of having undertaken research and due diligence in relation to eligible businesses.
54. Ms van Duyn submitted that Mr Essof had provided correspondence with regard to a cheese shop, a post office and book shop, submitting further however, that there was no evidence provided of any negotiations or terms of agreement or contracts beyond initial investigatory approaches.
55. I noted that Mr Essof had investigated a Natural Alternatives franchise as run by his brother-in-law, and decided against investing in that type of business because he would have been competing with a family member. The only other negotiation which seems to me to have progressed beyond the investigation stage (if indeed there was any), was a contract for a potential franchise purchase of Mrs Fields dated 27 September 2007 (the day before the hearing), predicated upon the outcome of the review application.
56. I was satisfied from the evidence that Mr Essof conducted only superficial research into the conduct of an eligible business in Australia.
(d)the period or periods during which the person has been present in Australia;
57. Mr Essof spent 69 days in Australia from the date of the grant of the Business Visa on 11 December 2003 before the cancellation on 28 March 2007. He moved to Australia in December 2006, after notification of the intention to cancel. Mrs Essof moved to Australia in April 2007 after the cancellation of the Business Visa on 28 March 2007, and sent a container of goods to Australia. Their children are Australian citizens and two of the children were already in Australia at the time.
58. Mr Kessels submitted that pursuant to the decisions in Re Jo vMinister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 77, and Re Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283, management could be conducted from overseas and that a visa holder’s presence in Australia was accordingly not as important as it once may have been.
59. Ms van Duyn submitted that the Guidelines indicated that if a visa holder has spent a short time in Australia decision makers should more critically examine the evidence presented in support of claims that the visa holder is making a genuine effort …. genuine effort requiring significant time in Australia. In support of the Minister’s argument, Ms van Duyn referred to the cases of Tang and Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997 [24], Tjhang and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1203, [36] and Legana and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1166, [30] and [35].
60. I am mindful that Mr Essof’s situation is different from those Business Visa holders who establish themselves in a residence in Australia with their families, and then spend considerable time overseas continuing to run their overseas business interests. Mr Essof has not established any roots in Australia. He gave me his reasons for the delay in moving to Australia as detailed in the paragraphs above. He has not given up his business in Zimbabwe, and still owns a third share in it as previously, and receives income from that. Mrs Essof and two of the children remained in Zimbabwe until after cancellation of the visa before moving to Australia. I was not satisfied that Mr Essof was managing any Australian business even when he owned the shares in Reece’s. Accordingly I cannot accept that the situations in Jo or Yam apply to him.
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
61. Mr Kessels submitted that Mr Essof had transferred $150,000 to Australia in 2005 in connection with the investment in Reece’s. He indicated that approximately another $90,000 had been transferred after the date of cancellation.
62. Ms can Duyn referred to A17/119, a statement of the Commonwealth Bank showing a balance of $189,927.57, and submitted, correctly, that the majority of the funds were deposited in June/July 2007, well after the visa cancellation date.
63. I was mindful of the 2005 passive investment in Reece’s which Mr Essof calculated would fulfil his obligations in regard to section 134(1) of the Act. His intentions were to do so, but he did not in fact achieve that. He has since moved to Australia, and both Mr and Mrs Essof gave evidence that they are awaiting the sale of their house in Zimbabwe in order to bring the funds to Australia, and that he is looking to invest in an eligible business.
64. I am mindful that the investment of $150,000 in Reece’s which was a passive investment, was from 2005, but consider that in terms of assets transferred to Australia for use in obtaining an interest in an eligible business, this has all happened too late to be relevant in terms of the legislation.
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
65. Mr Kessels referred to the $150,000 investment in Reece’s.
66. Ms van Duyn submitted that Mr Essof did not have ownership interest in an eligible business in Australia. She referred to a shareholding similar to that of Mr Essof which was discussed in Gunawan v Minister for Immigration and Multicultural Affairs [2007] AATA 1110, where the Tribunal did not accept the Applicant’s investment as having obtained an ownership interest in an eligible business.
67. Mr Essof conceded, and I accepted that he did not have an ownership interest in an eligible business at the relevant time, and that the other proposed investments were at an early exploratory stage. The proposal for Mrs Fields can hardly qualify.
(g) business activity that is, or has been, undertaken by the person;
68. Mr Kessels did not make additional submissions about Mr Essof’s business activities.
69. Ms van Duyn submitted that Mr Essof’s evidence about business activities in Australia consisted mainly of correspondence. She submitted that until he came to Australia he was engaged in the family furniture business of which he is still a third owner and from which he continues to derive income.
70. I accepted the submissions of the Respondent to find that Mr Essof has conducted mainly correspondence in relation to business in Australia, and has not been involved in the management, even of the only investment he made, which was Reece’s.
(h) whether the person has failed to comply with a notice under section 137;
71. Ms van Duyn submitted that Mr Essof failed to submit the required documentation to the Minister in the correct time frame. In that regard, Mr Kessels referred me to correspondence at T8/95 sent to the Respondent by a migration agent on behalf of Mr Essof.
72. It appeared to me to have been submitted with a delay but it was not clear whether an extension may have been sought. I do not give much weight to this factor.
CONCLUSION
73. As noted above, I am satisfied that Mr Essof does not meet the tests in section 134(3) of the Act in regard to genuine effort. I cannot find that he has made a “genuine effort” as envisaged under the Act. As discussed in detail in the paragraphs above, I am not satisfied that he meets the tests for the discretion to be exercised in relation to section 134(2) of the Act.
MRS ESSOF - EXTREME HARDSHIP
74. Mr Kessels referred to the Applicant’s documents, and submitted that the Applicant’s wife lives with him in Australia and has been here since April 2007. He noted that one of the sons has lived in Australia since January 2005, and is currently studying a Bachelor of Science degree at the University of Queensland, and has applied to study medicine. Mr Kessels submitted the young man has established a network of friends in Australia, and that one daughter has resided in Australia since 24 April 2007, and has enrolled in a Bachelor of Arts (Psychology) at the University of Queensland. The youngest son also began residing in Australia on 24 April 2007, and has enrolled in a pre-vocational course at TAFE Queensland as a precursor to him completing an electrical apprenticeship. The Applicant’s eldest daughter who is married currently lives overseas.
75. I noted Mrs Essof’s Statutory Declaration at A13/95 and her letter at T11/220. Mrs Essof’s evidence was that she would suffer extreme hardship if she could not remain in Australia. She said that her 18 year old (youngest) son, who has ADD, first suffered an epileptic seizure in late 2004, and again more recently. This was confirmed in a letter of a medical practitioner in Zimbabwe dated 1 February 2005 (Exhibit A6). The Essofs also tendered a letter of appointment for their son to be seen at the Mater Children’s Hospital neurology clinic on 14 January 2008 (Exhibit A5). Mrs Essof told me that this young man has been accepted into a TAFE College in preparation for an electrical apprenticeship, which would not be available to him in Zimbabwe.
76. Mrs Essof said she needed to be near her son in order to monitor his health and taking of medication, and if separated, and awaiting further sponsorship from the children to come to Australia, might be away from them for at least another year and a half.
77. Mrs Essof said that she has two sisters and her mother-in-law in Zimbabwe and others of Mr Essof’s family, but said that the economic situation there was difficult. She acknowledged the family were American citizens, but said that they would have to start all over again if they were to move to the USA.
78. Mr Kessels acknowledged that if the Applicant is unsuccessful in this appeal, his children would be entitled to sponsor both parents for another permanent visa under the parent class. This would however, he submitted, involve considerable expense and delay. He noted it would require the Applicants to depart Australia for some time as such an application would not entitle them to a bridging visa to remain in Australia should the decision of the AAT be unfavourable. He submitted that such a result would be unfair in terms of the young people, and because of the health issues of the youngest.
79. He submitted that the fact that the Applicant and his wife would lawfully be able to apply for another permanent visa, and eventually reside in Australia and would intend to do so, is a further discretionary reason why their visas should not be cancelled, and that they should be given more time to undertake business in Australia.
80. Ms van Duyn on the other hand, contended that the cancellation of the Applicant's visa would not result in extreme hardship. She noted that on 6 August 2007, the parties entered into consent orders to set aside the decisions to cancel the Applicant's four children's visas. This was a result of a failure to validly notify the children of the intention to consider cancellation of their visas in accordance with sections 134(9) and 135 of the Act. Thus, the Minister contended that the Applicant could apply for a parent visa to continue to reside in Australia. She noted further that the Applicant could take up her right of abode in another country such as the USA or Zimbabwe.
81. In coming to a decision, I must consider the concept of extreme hardship in terms of the legislation as applied to Mrs Essof. In that regard, I am mindful of Man Ki Kim v Minister for Immigration and Ethnic Affairs(1995) 37 ALD 481 at 487, in which Foster J considered the meaning of extreme hardship and said:
“It is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. "Hardship" is in itself a relative term. What may be a "hardship" to a sensitive person, or one in a particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word "extreme" must be evaluated against the facts of the particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken.
...
In addition to what I have already said, I consider that the application of the word "extreme" must also be approached with caution. Obviously there are varying degrees of hardship which may be suffered by any particular individual. "Trivial", "minor", "moderate" are adjectives which spring to mind as conveying such varying degrees. Clearly enough, "extreme" hardship must find itself at the very high end of the scale. This does not mean, however, that in any given case, "extreme hardship" means, in effect, a particular point on a continuum of hardship. It obviously connotes an area within which an ascertainable burden of hardship may fall and properly merit the description "extreme". Within that area there may be varying degrees of burden, one less than another, but each meriting the description".
82. In Re Wang and Minister for Immigration and Multicultural Affairs[2000] AATA 961, Deputy President McMahon also considered the term "extreme hardship" and stated:
"The deliberate choice of the word "extreme" by Parliament, requires one to understand what was meant by the use of that particular degree of hardship. 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". The use of the word "extreme" can be contrasted with the use of the word "undue" found in Ministerial Guidelines relating to hardship associated with deportation. In order to enliven the prohibition against a Minister cancelling another person’s business visa under subsection (4), there must be shown to be not only hardship and not only undue hardship, but extreme hardship. Furthermore, that hardship must result from the cancellation".
83. In Chen v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1023, the Tribunal found that whilst visa cancellation would cause “disappointment and some distress”, it did not amount to extreme hardship.
84. I am sympathetic to Mrs Essof’s feelings, and as I cannot find for her, it is likely she will suffer disappointment in the terms of the applicant in Chen. I have noted her concern for her children, in particular the youngest, who may accompany her back to Zimbabwe. I noted Mrs Essof’s evidence regarding the difficult economic situation in Zimbabwe, and the fact there is only one university so that entry to it is competitive.
85. However, she came to Australia well after knowing of the intention of the Minister to cancel the Business Visa, and approximately a month after the actual cancellation took effect. Mrs Essof has family remaining in Zimbabwe, her two sisters, her mother-in-law, members of her husband’s family and cousins.
86. I cannot find that the indicia for extreme hardship in terms of the legislation are met, given Mrs Essof has a home in Zimbabwe, is a citizen of the USA where she can return anytime, and may well return to Australia when sponsored by her children.
CONSIDERATION OF THE RESIDUAL DISCRETION
87. I have found that Mr Essof does not satisfy the indicia for section 134(2) of the Act, in that I am not satisfied that he has made a genuine effort in the terms of the legislation. However, the Tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in the legislation are not satisfied. That discretion can be exercised in favour of Mr Essof if I am satisfied that further time should be given to him to undertake what was required of him, (Kim).
88. Mr Kessels submitted that In Karim vMinister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 56, DP Walker found in favour of an Applicant who failed to satisfy either sections 134(1) or 134(2). In so finding, the Deputy President gave weight to the fact that the Applicant had children in Australia who were permanent residents because this gave a strong incentive to the Applicant in that case to continue with the move to Australia and to bring his assets to this country (at [72] and [73]).
89. He submitted that in this case, the Applicant has clearly shown a long-term intention to move his family to Australia. His wife has been here since April 2007. The children, with the exception of the married daughter, are here studying, and they have permanent residence.
90. Mr Kessels submitted that if the Applicant were to be unsuccessful in this appeal, his children would be entitled to sponsor him and his wife for another permanent visa under the parent class. However, this would involve considerable expense and delay, and would require Mr and Mrs Essof to depart Australia for some time as such an application would not entitle them to a bridging visa to remain in Australia after the decision of the AAT. He submitted this would be unfair as the children are still reliant upon their parents for support, and the medical issues facing the youngest would make such a separation even harder.
91. The Minister on the other hand contended that, if the Tribunal were satisfied that Mr Essof's Business Visa may be cancelled pursuant to s134(1) of the Act, then there would be no issues which would lead the Tribunal to exercise the residual discretion (as discussed in Kim) in Mr Essof's favour.
92. The Minister’s view about the Applicant’s submission that he has "a long-term intention to move his family to Australia", was that a long-term intention to relocate to Australia was not sufficient to warrant the exercise of the grant of a Business Visa in the circumstances.
93. Ms van Duyn noted the Applicant’s reliance on the situation in Karim, and contended that the facts in Karim can be distinguished from Mr Essof’s circumstances. She submitted that firstly, the Tribunal in Karim found that the Applicant did have an ownership interest in an eligible business in Australia, notwithstanding it was not a substantial ownership interest. He also satisfied the requirement in s134(2)(b) of the Act in that he was making genuine efforts to actively participate at a senior level in the day to day business of the eligible business in Australia. She submitted that secondly, the Applicant in Karim provided evidence of his substantial business assets in Pakistan, to the value of approximately $AUD 90 - 100 million, of which he held 25% ownership interest, and gave evidence that he intended to move those assets to Australia. She submitted that Mr Essof had not given evidence of comparable business assets that he intends to move to Australia. Lastly, she submitted it did not appear that the Applicant in Karim had a right of residence or citizenship in a third country, unlike Mr Essof and his family.
94. As to the situation with the children, Ms van Duyn contended that as a result of the children’s permanent residence status in Australia, the Applicant could apply for another visa which would entitle him to continue to reside in Australia The Minister contended that the fact that the Applicant is entitled to apply for another visa, and that this may involve further delay and expense, does not warrant the grant of a Business Visa in circumstances where the Applicant has not met the requirements for the visa.
95. I preferred the submissions of the Respondent in regard to the exercise of the discretion in Kim. I find that Mr Essof, whilst it might be convenient for him to remain in Australia, has had the benefit of his Business Visa since November 2003. It was only in 2005 that he made a passive investment in Australia which did not require any day to day management by him, and which was a calculated move he thought would satisfy the substantial ownership in an eligible business he had undertaken to make when he was granted the Business Visa. He has made no other investments since, and the evidence before me satisfied me that any other inquiries he has made have been recent and superficial. He signed a Mrs Fields franchise (contingent upon the visa application outcome) the day before the hearing. There was no evidence of research or any other negotiations.
96. As has been stated in cases such as Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656, Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997, and cited in Burg and Minister for Immigration and Citizenship [2007] AATA 1630, it is apparent that the Act is intended to benefit business owners who settle here and manage their Australian business.
97. A recent case where the discretion to provide more time for the Business Visa Applicant to satisfy the requirements of the legislation was exercised was in Badenhorst v Minister for Immigration and Multicultural Affairs [2006] AATA 742. The Tribunal in that case was satisfied that the Applicant had made a genuine effort and that his efforts were beyond what might be described as purely superficial or token. However, I did not find that Mr Essof’s efforts were more than superficial or last minute.
98. I am not satisfied that Mr Essof qualifies for more time in the terms of the discretion in Kim, and I cannot therefore exercise the discretion in his favour.
DECISION
99. The Tribunal affirms the decision under review. As a consequence Mrs Essof’s visa is also cancelled. The Tribunal refers the matter back to the Minister for the appropriate action to be taken.
I certify that the 99 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member
Signed:
………………………………………………
AssociateDate of Hearing: 28 September 2007
Date of Decision:30 October 2007
Solicitor for the Applicant: Mr R Kessels, Kessels, Goddard and Ajuria
Solicitor for the Respondent: Ms T van Duyn, Clayton Utz Lawyers
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