Foo and Minister for Immigration and Multicultural and Indigenous Affairs
[2003] AATA 216
•13 February 2003
Administrative
Appeals
Tribunal
DECISION AND ORAL REASONS FOR DECISION [2003] AATA 216
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2002/87
GENERAL ADMINISTRATIVE DIVISION ) Re CHIK HOP FOO Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member WJF Purcell Date13 February 2003
PlaceAdelaide
Decision For the reasons given orally at the Hearing of this matter, the Tribunal affirms the decision under review.
(Signed)
WJF PURCELL
(Senior Member)
CATCHWORDS
IMMIGRATION AND CITIZENSHIP – Business Skills visa – whether circumstances existed to enable or justify the cancellation of the applicant’s visa pursuant to section 134 of the Migration Act 1958 – whether the Minister failed to take into account relevant issues – whether the decision to cancel the applicant’s visa was properly made
Migration Act 1958 section 134
ORAL REASONS FOR DECISION
13 February 2003 Senior Member WJF Purcell 1. This is an application for review of a decision of a delegate of the Minister dated 27 February 2002, which cancelled the applicant’s Business Skills visa, pursuant to section 134 of the Migration Act 1958 (the Act).
2. The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents), together with exhibits tendered by the parties. The applicant was represented by Mr Stathopoulos of counsel, and gave oral evidence, as did his wife, Yuen Wai Kong (the wife), with the assistance of an interpreter in the Mandarin/Cantonese language. Ms Reed appeared for the respondent (the Department).
3. The applicant, who is 41 years of age, was born in Hainan Province, China, and received his education in that country. His wife is 38 years of age, was born in Hong Kong, and completed her secondary education at an English/Chinese school. Their son, Kelvin, is 9 years of age, and is now attending an Anglican College, St Peter’s Woodlands Grammar School, Glenelg.
4. On 6 December 1997 with the assistance of a migration agent, Mr Yam, the applicant applied, in Hong Kong, for a Business Skills (Migrant) visa. He stated that his current business was involved in garment manufacture and export of electricals; that he had owned 50% of a business, Long Ford Garment Limited, since 1992; that he had total management of the business affairs of the company, including financial planning, personnel and decision-making on all its major affairs and day‑to-day operations of the company; that his net assets in the business in the year 1996 were A$380,641; that the major activity of the business was the manufacture, distribution and trading in garments of all descriptions. He outlined his management responsibilities in the following terms:
“My major management responsibilities in the above business for the last four years are as follows:
financial planning, banking, personnel, purchases, sales, costing & pricing of merchandise, budgetting, stock & quality control and control of the company’s cash flow situation. 8 staff members have been employed by me to operate the business, all of them are under my control and direction. Determine their individual knowledge and abilities. I assign each of them their job and duties, either clerical, technical or administrative, according to their individual qualification and abilities.” [Exhibit R5]
5. The applicant stated that his intended business in Australia would be to operate a factory for the manufacture of garments of all descriptions, outlined in the business plan attached to the application, which reads as follows:
“Business Intentions in Australia
Type of Industry: Manufacture and distribute Cotton and Rayon Garments. Jean clothing and export of Textile Products of all descriptions.
Product Items: Cotton or Jean Jackets,
Cotton, wool or Jean Trousers,
Cotton Blouses,
Garments of all descriptions.
Location of Business: Adelaide, South Australia.
Company Operation: Garment Manufacturing and Export of Texile [sic] Products.
Intended Equity: 100% Wholly owned by Mr. Foo Chik Hop
Position/responsibilities: Proprietor – Production & Sales Manager,
Manufacturing/trading new products development, marketing and business investment.
Applicants Employment in the Business
I would occupy the position of Proprietor and Manager of the new business and personally supervise its establishment. I would also be responsible for the day-to-day operations of the business in all facets.
I have obtained reliable source of information and have assessed the availability of suitable premises for my project. I have been assured by Real Estate Agents that premises are available for lease at very favourable terms.
Setting up of the production facilities will be capital intensive requiring expenditure on equipment of approximately $100,000 with leasing of additional supplementary equipment required. Investigation of this aspect revealed that suitable equipment was available for my purpose and if necessary this could be supplemented from my Hong Kong operations.
Initial machinery required would be: -
5 Electric Sewing Machines
3 Hemming Machines
2 Electric Cloth Cutters
1 Rivetting Machine
5 Scissors and Cutters1 Packaging Machine
The Commonwealth Employment Service has provided me with information which reveals that there is an adequately skilled workforce of technicians and Sewing machine operators available in Adelaide, South Australia.
I would require an initial work force of: -
1 Sales Person
1 Secretary / accounts personnel
5 Technicians / Sewing Machine operators7
My enquiries of the Department of Labour and Industry indicate that the weekly wage rates for technician/sewing machine workers in Australia are similar to those of Hong Kong.
Although my business is not labour intensive, the wage rate comparativeness is good for export competition of garments or supplies to the local market.
It is intended that I would use the technology obtained in Hong Kong to open up new markets in Australia for my locally manufactured garments. This would be undertaken simultaneously to allow me to develop my local manufacturing base along with my developing markets in Hong Kong, Europe, U.S.A. and South East Asia Countries.
It is intended that my initial investment of $350,000 into my manufacturing company together with transfer of my resettlement costs figure of $150,000.
The investment capital would be applied to establishment costs and working capital for the new manufacturing company.
OBJECTIVES
Employment
Launch of my new business will provide initial employment for 7 persons and it is expected that this will expand to 9 at the end of the 2nd year of operations.
Technology
My experience in the garment manufacture industry is extensive over several years and on what I viewed at several garment manufacturing factories I am confident of being able to introduce more advanced garment production technology into manufacturing processes in my operation.
CASH FLOW SUMMARY
Revenue
The garment manufacturing industry in Australia is in a growth pattern which is estimated by the Trade Development Authorities of Australia to be approximately 6% per annum.
Expenses
The present garment manufacturing industry rate of production expenses and costs is 75% of sales revenue and whilst escalating annually is expected to remain at that percentage rate.
My investigation of labour and other production costs (e.g. light & power, maintenance etc.) as well as supply of raw materials are comparative to those I experience in Hong Kong and this augurs well for the economic viability of my Australian operation.
My discussions with the Trade Development Authorities of Australia gave me confidence to establish a garment manufacturing operation in Australia where there is a good market for my products locally and overseas.” [Exhibit R5]
6. On 12 June 1998 visas for the applicant and his family were granted, and they arrived in Australia on 22 November 1998. The applicant returned to Hong Kong after 7 days. On 10 October 2000 the Department sent to the applicant a routine two year survey. The applicant was not in Australia at that time, having spent only 72 days in the country over 6 visits since his arrival. He came to Australia on 29 October 2000, and consulted an accountant, Mr KWK Chan, who obtained from the Department an extension of time to lodge the survey, to 19 January 2001.
7. On 30 October 2000 the applicant registered in South Australia the business name, Long Ford Enterprise Development Company (Longford), and on 1 November 2000 a dormant company, Sunkee (Aust) Pty Ltd (Sunkee) was transferred to the applicant by the previous owner, Kam Sun Lui. Mr Chan assisted the applicant also to obtain an Australian Taxation Office tax file number for Sunkee. The survey form was returned to the Department on 10 January 2001, and in answer to the question as to the type of industry carried out by the business the applicant stated:
“ Mr Foo has a private company known as Long Ford Garment Ltd in Hong Kong. This company has been trading with an Australian supplier in Western Australia mainly in importing of garments and T-Shirts to Perth. Since arrival in November 1998, Mr Foo has been trying hard to establish markets in the Eastern States of Australia. Because of the competitive nature in the garment industry Mr Foo has decided to diversify and found a market niche in exporting South Australian 3M reflective sheets/films to China. In early 2000 he has been trading as Long Ford Enterprise Development Co. in South Australia. In November 2000, he took over a dormant company known as Sunkee Aust Pty Ltd incorporated in South Australia. To end of December 2000, Mr Foo has been trading as an exporter of 3M products and an importer of garments and T-Shirts from Hong Kong.” [T4/21]
8. On 24 October 2001 the Department wrote to the applicant to obtain more tangible information and supporting documents to verify the nature of the business, and of his involvement in the business. On 29 May 2001 Mr Chan forwarded a letter to the Department, which read, in part:
“…
Mr & Mrs Foo have been maintaining a steady growing export business in Adelaide. They are developing links with international markets promoting Australian 3M Scotchcal and Panaflex products. Over the last ten months, export sales of 3M products have increased in excess of 400% from $51,716.00 to $267,301.00. It is anticipated annual export would exceed $500,000.00, and Mr Foo’s taxation returns would be lodged after the end of this financial year, 30th June 2001.
Enclosed please find the following additional information:-
1)Ten months trading and financial statement to 30th April 2001, showing a trading profit of $45,822.00 and an investment asset of $834,498.00, a significant trading improvement from the previous six months report.
2)Evidence of attendance of English Language courses such as Enrolment Advice of Mr Foo’s Certificate in Spoken and Written English, and Statement of Attainment for Mrs Foo (Debbie Yuen Wai Kong).
…” [T7/54-55]
9. A perusal of the Enrolment Advice for the applicant [T7/64], discloses that he enrolled in the “Certificate in Spoken and Written English II New Arrivals Focus”, on 7 May 2001, for 12 hours per week, with 3 hours homework. The commencement date was 7 May 2001, and finish date 6 July 2001. The applicant left Australia for Hong Kong on 9 May 2001, and returned for a 7-day visit, on 18 July 2001. He did not attend the language course. The wife, on the other hand, attended the TAFE courses, and had obtained two Statements of Attainment in Spoken and Written English on 7 July 2000, and 15 December 2000. She and the child, Kelvin, became Australian citizens on 18 June 2001.
10. On 26 October 2001 the Department issued a notice to cancel the applicant's Business Skills Visa, and in the course of the notice the Departmental officer stated, in part:
“…
As a Business Skills visa holder, pursuant to section 134(1) of the Migration Act 1958, you are required to obtain or maintain a substantial ownership interest in an eligible business in Australia. You are also required to participate at a senior level in the day-to-day management of this business. The business must also be an eligible business at defined in section 134(10) of the Migration Act 1958.
On the basis of the information provided, I consider that you have failed to demonstrate that you are meeting your visa requirements. In terms of day-to-day management you claimed to be working 80 hours a week managing the business. However, a check of Departmental records confirm that you have only spent 124 days in Australia since your initial entry. You have provided no documentary evidence to demonstrate that you are actively participating in the day to day management of the business at a senior level. You have not provided evidence to validate your claim that you contribute 80 hours per week in the business. You have not provided evidence that you manage the company from overseas. Given the limited time you have spent in Australia since your initial entry, I consider that it is unlikely you would be able to participate to this extent. On the basis of the information before me I consider that you have failed to meet the requirements of s134(1) & 134(2).
…
You must provide your response, together with any documentation you would like considered in support of your claims, by 2 December 2001. If you do not respond within that time, a decision on whether to cancel your visa will be made using the information already held by the Department.
…” [T8/69]
11. On 29 November 2001 Mr Chan replied on the applicant's behalf, in part, as follows:
“…
In my view, Mr Foo has been working so hard that he should be applauded for his effort in achieving his half a million dollar new export business in less than a twelve-month period. Since 1998 Mr Foo has transformed himself from a well known garment manufacturer to an Australian exporter of goods and services. He has become a keen exporter of Australian 3M products of reflective sheets and films to the advertising and traffic control industries in Hong Kong and China. He has created a niche market which requires himself constant travelling overseas in product promotion, product identification and training. This is the main reason why he has only spent 124 days in Australia since his initial entry. His work commitments overseas have directly contributed to the success in the export market.
…
As Mr Foo’s Migration Agent, I believe Mr Foo is a genuine business migrant who is most adaptable to change and challenge. He is definitely a family man and as opportunity arises he would love to spend more time with his family members, who have recently become Australian Citizens.
…” [T9/72-73]
12. On 27 February 2002 the delegate, being satisfied that the conditions of the visa had not been met, and that there were grounds for cancellation, cancelled the visa. He stated in the Record of Decision, in part, as follows:
“…
Evidence of and reasons why grounds for cancellation exist:
I consider that there are grounds for cancelling your visa as you have provided insufficient evidence to demonstrate your active involvement in the day-to-day management of the business at a senior level, that is, that you are at the highest or an advanced level in the business, and one to whom others are responsible, or that you have executive control and authority of business activities. In addition, considering the fact that you have spent a considerable time overseas, there is no documentary evidence to suggest that you have been managing the business while overseas either.
While you have provided letters from business associates, you have not provided any evidence, such as business correspondence outlining negotiations or any decisions that you have made in regard to Sunkee Australia Pty Ltd. You have not provided any documentation that clearly indicates your name or makes reference to your involvement in the business.
Further you have not provided any invoices or business contracts or other relevant business correspondence signed by you and a number of invoices issued by Sunkee Australia Pty Ltd do not bare your signature. On the basis of the available information I consider that you are unable to meet the requirements of section 124(1).
…” [T2/12-13]
13. The circumstances giving rise to a power of cancellation are set out in section 134 of the Act, which as far as is relevant for the purpose of this review, 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).
…
(10) In this section:
business visa means:
(a) a visa included in a class of visas, being a class that:
(i) has the words Business Skills in its title; and
(ii) is prescribed for the purposes of this paragraph; or
(b) a visa:
(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and
(ii)that is of a kind prescribed for the purposes of this paragraph; or
(c)a return visa that is granted to a person who is or was the holder of a business permit or business visa;
that is or was granted on or after 17 February 1992;
designated investment has the meaning given by the regulations;
eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a) the development of business links with the international market;
(b) the creation or maintenance of employment in Australia;
(c) the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e) the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy;
established business in Australia visa means a business visa a criterion for whose grant:
(a) relates to the applicant having an established business in Australia; or
(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a);
family member’s visa means a business visa held by a person:
(a)who is or was a member of the family unit of another person who held a business visa; and
(b)who would not have held the business visa if he or she had never been a member of the family unit of the other person;
investment-linked visa means a business visa a criterion for whose grant:
(a) relates to the holding of a designated investment; or
(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a);
member of the family unit has the meaning given by the regulations;
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts;
relevant designated investment, in relation to an investment-linked visa (other than a family member’s visa), means the designated investment that was, in deciding to grant the visa, regarded as satisfying the criterion referred to in paragraph (a) of the definition of investment-linked visa;
return visa has the same meaning as in the regulations.”
14. The applicant gave oral evidence, over a period of nearly 2 days, with the assistance of an interpreter. He stated in his Declaration for the Business Skills visa on 6 December 1997 that his main languages were Chinese/Mandarin. In his application for review lodged in this Tribunal, he requested a Mandarin interpreter. The Mandarin interpreter provided by the Tribunal for the 4-day Hearing stated that the applicant and the wife spoke Cantonese, and she was obliged to interpret in the Cantonese language. In any event, the necessity to have every word interpreted lengthened the proceedings, and although the applicant's right to request an interpreter is not in doubt, one would wonder whether the use of an interpreter on a verbatim basis was a necessity for the applicant to give his evidence, or was perceived by him as giving him some sort of advantage in formulating his answers and "muddying the waters".
15. The applicant gave me the impression that he was unwilling, or unable, to answer even the most simple question in a direct way. This reluctance, or inability, may be attributable in part to the language difficulty, but I consider that the applicant's convoluted and contradictory testimony had more to do with his unwillingness to reveal the true nature of his business dealings, their relevance to the Australian context, and his retention of his Business Skills visa status. This does not mean, of course, that I reject all of his testimony, but that I prefer other more reliable evidence in areas of dispute.
16. The wife gave evidence also with the assistance of the interpreter. She received all her schooling in Hong Kong at an English/Chinese speaking school, was employed in Hong Kong in a clerical position, interprets all the applicant's instructions when they meet with the Australian distributors in Adelaide, conveys information to 3M Australia Pty Ltd (3M) by telephone and fax, attends Kelvin's college and communicates with his teachers and with other parents, and has satisfactorily completed written and oral courses in the English language. She is now an Australian citizen. I am very sceptical of her professed need for an interpreter on a verbatim basis. In the end result, her evidence was of little assistance in throwing light upon the business activity she undertakes, in English, in Australia, on the husband's instructions, and how she interprets for the husband in his business dealings.
17. The applicant gave evidence that it was his intention to establish the business in the garment import industry in Australia. The move to Australia was difficult for his family. They were unfamiliar with the general culture and legal obligations. He was somewhat unfamiliar with the business culture and the legal and taxation obligations associated with running an Australian business. About the time they were looking to establish their business in Australia, the new GST laws were introduced. The GST was very confusing for most business people, but the applicant found it even more confusing because he was new to Australia. The garment import business was not as successful as the applicant had hoped because of the imposition of GST, and heavy competition from larger and more well-known garment importers in Australia, who dominated the market and made it difficult for the applicant to establish his business. He says that he decided then to diversify the business operations into different areas, while still maintaining some trade in the garment import business.
18. The applicant said in evidence that he was first introduced to the sign manufacturing industry and reflective sheeting products by friends in Hong Kong. These friends operated a sign-manufacturing company which had projects in Hong Kong and China. The reflective sheeting product is used by sign manufacturing companies for billboards, large corporate and multi-national company signs, and for traffic and roadway safety signs. In November 2000, he contacted distributors of American-produced reflective sheeting products in Adelaide. He consulted with Heatpac Industries, and 3M, and viewed their premises in Findon. They showed him samples of the product on swatch cards and in booklets. He says that he consulted also with potential clients in Hong Kong and China, and had discussions with ISS Mart (China) and Company, All Good Industries Company, and Shanghai Ao Cai Plotter Films Co Ltd, and discussed possible product prices with them. They became his customers.
19. The applicant gave evidence that business and general infrastructure development has begun to boom, since China has opened up to international trade. There are more and more multi-national companies opening up in China; and the Government has begun to expand the road systems, which has led to an increased need for prominent signage and new safety road signs. In November 2000 the first export of a product from Heatpac Industries was sent to Hong Kong. These products proved too expensive for Hong Kong and China customers, and he decided to source a new supplier. He approached 3M to discuss a possible supply relationship with them, and met personally with Mr Graeme Kennedy, who is the South Australian Sales Representative, and Mr Peter West, who is the Sales and Marketing Manager. 3M required that he provide a down-payment of $100,000 and the applicant arranged for his bank to make the transaction. The first export of 3M reflective sheeting products occurred in March 2001.
20. The applicant gave evidence that he owns an apartment in Hong Kong, which he rents out to his sister for $500 a week. This pays for the mortgage. There is also a management fee of $300 a month. He stays with his sister when he is in Hong Kong. In response to the question of how he supports himself on the money he is earning, the applicant said that he has a house in Australia, savings in Hong Kong and Australia, and a taxi licence. He believes he can live comfortably on his savings without working for 10 years, but business is his passion. His profit for the year 2002 up to November was $60,000 to $70,000. He said that he sold Long Ford Garment Ltd for next to nothing. He said later in his evidence that he had transferred the shares to the sister of a business associate. She had been a partner in his business for a long time and took over the business. When he sold the business it was breaking even or making a small loss. He bought Sunkee from a friend who was a former director. He had known the gentleman for many years, and this friend was instrumental in bringing the applicant to Australia. He does not have an office in Hong Kong as he is on the move all the time. 3M never attempt to contact him directly in Hong Kong or China. Any contact is with the wife, and she conveys the instructions to him.
21. The applicant said in evidence that he has negotiated a price with 3M which enables him to deliver this American product to Hong Kong, through the Australian distributor, at a price lower than his customers would pay to 3M’s distributors in Hong Kong or China. His is a “niche market” he says, a quality, expensive product that has about 75% of Chinese Government contracts, banks and highway development. He does not want 3M’s offices in Shanghai and Hong Kong to know that he is sourcing the material more cheaply through Australia, as they would inform 3M’s Sydney office, which would then increase the price, and this would affect his business competitiveness.
22. The applicant acknowledged in evidence, that he had not spent a lot of time in Australia since being granted his visa, but the reason, he says, is related to his business activity. His background is in the garment industry, and whilst he had many contacts in the garment industry in Hong Kong and China, he did not have contacts in the reflective sheeting industry. The reflective sheeting product is new to him, and he needs to source contacts to market the business to potential purchasers of the product. It was his decision to remain in Hong Kong to maximise the customer base, and he believes that he should be on hand to assist in market penetration. He says that the point of sale is paramount in a newly established business. The applicant says that it is his intention to build up the business to the point where he can employ someone in Hong Kong in a marketing role, so that he can return to Australia to be with his family. He hopes to do this in the next year or so. It is very important that the potential employee is fully trained by him in the marketing role, so that he can continue to retain his existing customers and attract new ones. The applicant says that he would remain the manager of the business in Australia, the turnover of which for the period ending 31 December 2000 was $95,034, and for the period ending 30 June 2001 was $426,068. Between March 2001 and November 2001, the business purchased approximately $600,000 worth of reflective sheeting products from 3M.
23. The applicant gave evidence that he negotiates all orders which are transmitted to the wife, either by facsimile or telephone from Hong Kong, with requests that she draft an order to be sent through to the supplier. If the customer is not happy with the price, the applicant gives the wife an idea of what price would be acceptable, and she contacts 3M. She gives him 3M’s figure, and he negotiates from there. He also advises the wife on what type of transport is required to freight the pallets to the customer. He says that in early 2001 he transferred his interest in Long Ford Garment Limited to a friend who worked in the business. He no longer has any business interests in Hong Kong; the documentary evidence [Exhibit A7] discloses, however, that for whatever reason, the shares were not transferred until 4 July 2002. The applicant says also that he and the wife have transferred over $500,000 to Australia to help them begin their new life, some of which has gone into the business, some into their house, and towards the recent purchase of the taxi cab licence for $142,000 which is sub-let to a taxi company for a return of $250 per week. It is his stated intention to settle in Australia with his family and continue to develop his business.
24. The applicant submits that he has obtained a substantial ownership interest in an eligible business in Australia, and is utilising his skills in actively participating at a senior level in the day-to-day management of the business. His counsel outlined in detail the bases upon which he asserted that Sunkee is an "eligible business" for the purposes of the Act. The necessity to provide these oral Reasons for Decision prior to the applicant's return to Hong Kong the day after tomorrow, 15 February 2002, precludes the enunciation of each and every of the applicant's submissions in detail, but I have taken all those submissions into account in the course of my deliberations. These comments apply also to the Department's lengthy submissions, to the effect that the applicant is not a credible witness, that Sunkee is not an eligible business for the purposes of the legislation, and that if the applicant is carrying on a business at all, that business is in Hong Kong and not in Australia.
25. It is not in dispute that the applicant has a substantial ownership of the Sunkee business. I accept that transactions involving significant amounts of money have been conducted in the name of Sunkee, since its purchase on 1 November 2000, but the question remains as to whether it is an “eligible business”, and whether the applicant is actively participating at a senior level in the business. From the applicant's date of arrival in Australia on 22 November 1998 until the receipt of the Department's Survey of Business form dated 10 October 2000, there is no evidence of any but a desultory attempt to implement the business plan, that was the basis of his application for the visa, and its granting. There was some activity of little moment in relation to purchase of garments interstate. As soon as the Survey of Business was received, however, there was a flurry of activity. The applicant at this stage, had spent only 72 days in the country. He arrived in Australia on 29 October 2000. Mr Chan’s services were employed to register a business name on 31 October 2000, and purchase of a defunct company was undertaken on 1 November 2000. The applicant turned to a field of endeavour in which he had no expertise, the importing into Hong Kong and China of American manufactured products. The act of ordering American produced goods in Hong Kong, via an Australian distributor, for export into Hong Kong, does not constitute in my view, the management of a business in Australia. If the applicant is carrying on the business at all, it is in Hong Kong and China.
26. The definition of “eligible business” requires that the business results in one of the benefits itemised in sub-paragraphs (a) to (f) of section 134(10) of the Act:
(a) The development of business links with the international market
The applicant maintains there is huge potential in the Chinese market, and Sunkee is a company involved in that market, which can do business in China. In my view, 3M has distributors already in Hong Kong and China, and that is the same product the applicant is importing into Hong Kong. The Sunkee business is not developing links with the international market. This requirement has not been met.
(b) The creation or maintenance of employment in Australia
The applicant maintains that the wife, as a director, is employed in the business; and that although Sunkee does not itself have any employees, the increase in the level of 3M’s exports has an effect on its number of employees. In my view, it is the clear intention of the legislation that the business should create real employment in the Australian market place. 3M is a secure distribution company, and there is no evidence to support the applicant's assertions of increases in its employees. This requirement has not been met.
(c) The export of Australian goods or services
The applicant maintains that 3M products when imported into Australia become Australian goods, and when exported to Hong Kong are export goods after "minor changes" have been undertaken, i.e. they have been unpacked and repacked into smaller quantities. In my view the packing into smaller packages without any value added input in Australia, does not transform 3M’s United States products into Australian "goods or services". This requirement is not satisfied.
(d)The production of goods or the provision of services that would otherwise be imported into Australia
The applicant does not maintain that this requirement is relevant for the purposes of this review.
(e) The introduction of new or improved technology to Australia
The applicant maintains that the feedback he has provided to 3M in relation to suggested modifications of one of 3M’s Diamond Grade products, has improved technology in Australia. The Diamond Grade product however, is manufactured in the United States, and if the feedback was of any benefit, it was to 3M in America. This requirement is not satisfied.
(f)An increase in commercial activity and competitiveness within sectors of the Australian economy
The applicant maintains that there has been an increase of commercial activity reflected by the increased volumes of sales (evident from the 2001 tax return); the use of insurers, transportation, and the increase in 3M’s activities have a benefit and a flow-on effect. In my view, there is no increase in commercial activity and competitiveness within sectors of the Australian economy, simply an increase in turnover in 3M; the applicant continues to have three clients only in Hong Kong/ China; and 3M Hong Kong is not aware that he is competing with it. This requirement is not satisfied.
27. I am satisfied, on the evidence, that Sunkee is not an “eligible business" in accordance with the legislation, and I am satisfied in accordance with section 134(1)(a) of the Act, that the applicant has not obtained a substantial ownership interest in an “eligible business” in Australia.
28. Section 134(2) of the Act provides that the Minister (and hence this Tribunal) must not cancel a business visa under sub-section (1) of the Act if the Minister is satisfied that it's 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.”
29. The applicant submits that he is a genuine Business Skills visa holder, that his wife’s role in the business is administrative only, that he has substantial participation in the management of business - he sources the clients, obtains orders, arranges for the wife to place the orders, and so on. He is an active participant in the day-to-day management, and there is no reason why he cannot be involved on a day-to-day basis, although he is overseas. It makes good commercial sense for him to spend lengthy times overseas as his overseas customers are critical to his business. He intends to continue his genuine efforts to expand the business. He has transferred substantial funds to South Australia, recently purchased a taxi licence, has a genuine desire to settle in South Australia, and the nexus between the business and South Australia is not remote.
30. On the whole of the evidence, I do not consider that the applicant has made a genuine effort to obtain a substantial ownership in an eligible business in Australia. Between 21 January 2001 and the commencement of the Hearing on 18 November 2002, the applicant spent 60 days in Australia. His return to Australia on 14 November 2002, 4 days before the Hearing, was 4 months after his previous visit. He left Australia the day after the Hearing became part-heard on 19 November 2002, and did not return to this country until the morning of the resumed Hearing, Wednesday 5 February 2003. The Hearing listed for 10.00am on that day, was unable to commence until 2.15pm, pending his arrival. The wife and child, as is their habit, had left Australia on 15 December 2002, to spend the school holidays in Hong Kong. They returned on 3 February 2003, 2 days before the resumed Hearing. As stated earlier in these Reasons for Decision, the applicant returns to China the day after tomorrow, on 15 February 2003. My views of some aspects of the case and its conduct appear in the transcript, I do not propose to traverse them again, but I continue to hold those views.
31. I do not consider the applicant has made a genuine effort to participate actively in the day-to-day management of the business, nor that he intends to continue to make genuine efforts. On the evidence, the business is not stable. It has a tenuous hold on its ability to purchase and on sell goods from 3M. On the applicant's evidence, if the Hong Kong or Chinese 3M distributors discover that he is importing at an allegedly cheaper price from 3M in Australia, his business may fail. The applicant may well have envisaged that the current situation would continue to prevail - with his wife and child as Australian citizens, spending school holidays in Hong Kong, him visiting Australia from time to time, and with his son well settled at the Grammar School. In any event, his presumed intention that the established domestic arrangements continue is not relevant to any continuation of the business enterprise. I am not satisfied that any of the matters set out in section 134(2) of the Act apply to the applicant. I am satisfied therefore, on the whole of the evidence, that the applicant's Business Skills visa should be cancelled.
32. For these reasons the Tribunal affirms the decision under review.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member WJF Purcell
Signed: ......................................................................................
AssociateDate/s of Hearing 18/19 November 2002, 5/6/13 February 2003
Date of Decision 13 February 2003
Counsel for the Applicant Mr G Stathopoulos
Solicitor for the Applicant McDonald Steed
Counsel for the Respondent Ms E Reed
Solicitor for the Respondent Sparke Helmore
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