Fung and Minister for Immigration and Multicultural Affairs

[2006] AATA 617

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 617

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/884

GENERAL ADMINISTRATIVE  DIVISION

Re:            PIK MEI FUNG

Applicant

And:MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

Respondent

DECISION

Tribunal:       Mr Egon Fice, Member

Date:12 July 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) Egon Fice

Member

IMMIGRATION ‑ business skills visa – whether substantial ownership interest obtained in an eligible business in Australia – company incorporated after date of cancellation – whether genuine effort made to obtain a substantial ownership interest.

Migration Act 1958 ss 134(1)‑(10)

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

Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513

Aged Care Standards and Accreditation Agency Ltd v Kenna Investments Pty Ltd and Another (2004) 138 FCR 428

Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 238

REASONS FOR DECISION

12 July 2006  Mr Egon Fice, Member

1.      Ms Pik Mei Fung was granted a Business Skills Migration Visa (sub‑class 127) (Business Owner) on 30 November 2001.  Her spouse and two children, being family unit members, were included as visa‑holders.  On 7 September 2005 Ms Fung’s business visa was cancelled because:

(a)she had not obtained a substantial ownership interest in an eligible business in Australia;

(b)she was not utilising her skills in actively participating at a senior level in the day‑to‑day management of that business; and

(c)       she did not intend to continue to:

(i)hold a substantial ownership interest; and

(ii)utilise her skills in actively participating at a senior level in the day‑to‑day management of;

an eligible business in Australia.

Consequently, under s 134(4) of the Act, the visas for her spouse and children were also cancelled.

2.      Ms Fung seeks a review of the decision to cancel her business visa, essentially on the ground that she has made genuine efforts to engage in business in Australia and to meet the visa requirements.  Her spouse and children have not sought review of the decision to cancel their visas.

BACKGROUND

3.      Ms Fung is a Chinese citizen who resides in Hong Kong.  Ms Fung lodged her application for a Business Skills Migration Visa (sub‑class 127) (Business Owner) with the Australian Consulate General in Hong Kong on 16 February 2001.  Her spouse, Wing Cheung Lo, and her children, Pui Ying Lo and Ka Chun Lo were included as members of the family unit.  In her application form, Ms Fung stated that her business intentions were to continue existing trade with Australia.  Ms Fung said that she was a 30 per cent owner of Kwan Tai Engineering Co Ltd which was involved in construction projects in Hong Kong.  Also, in conjunction with her husband, she held an interest in Tristar Building Materials Company.  Both companies were purchasing Australian made building materials and importing them into Hong Kong.  Ms Lau said that the companies were planning to expand into the larger China market.  On her application form Ms Lau indicated that she planned to invest AUD$1 million in her business in Australia and that she had no current business interests in Australia. 

4.      It was condition of Ms Fung’s visa that she enter into Australia prior to 29 April 2002.  She first entered Australia on 27 April 2002 and remained for five days.  She returned to Australia on 18 August 2005, remaining for ten days.  Those are the only two occasions on which Ms Fung has been to Australia since her business visa was granted. 

5.      A delegate of the Minister for Immigration and Multicultural Affairs (the Minister) sent Ms Fung a survey of business migrants form to be completed and returned by 11 August 2004.  This is a standard follow-up procedure conducted by the Minister and it requires the holder of a business visa to outline the efforts made to engage in business and to meet the visa requirements.  Ms Fung engaged the services of a consultant, Empress Personnel Agency, to complete and return the report; which it did by letter dated 9 August 2004.  In that letter, the consultant said that Ms Fung was engaged in exporting Australian construction material to Hong Kong through her Hong Kong company.  The value of materials purchased from Australia between 2001 and 2003 was said to be AUD$4 million.  Ms Fung admitted to not having set up a corporate entity in Australia and moving to Australia to manage that entity because of:

(a)the economic situation following the downturn in Asia after 2000 which had seriously affected Ms Fung’s business in Hong Kong and her company needed her there at that time;

(b)the outbreak of SARS which occurred in Hong Kong in 2003 had seriously affected the Hong Kong economy requiring her to spend more time in Hong Kong to attend to her business there;

(c)her wish to remain in Hong Kong because her company there was involved in a new project, Hong Kong Disneyland Resort, which she wished to settle before leaving Hong Kong; and

(d)not having found a good business partner that she could trust in Australia.

The consultant who completed the audit report also said that Ms Fung intended to set up a company in Australia in 2004.

6. The Minister was dissatisfied with Ms Fung’s responses to the survey. In a letter dated 22 April 2005 a delegate of the Minister wrote to Ms Fung telling her of the Minister’s intention to cancel her business visa, as she had not demonstrated that she held a substantial ownership interest in an eligible business in Australia as defined in s 134(10) of the Migration Act 1958 (the Act), nor had she made genuine efforts to engage in business and to meet the other visa requirements.  That notice was given within the time prescribed in s 134(9) of the Act.  Ms Fung was given until 1 July 2005 to respond.  In fact two notices were sent attached to an email, one in respect of Ms Fung and the other in respect of her family members.  The covering email has a receipt attached to it verifying that the message was displayed on the recipient’s computer on 25 April 2005 at 2:02 pm.  Neither Ms Fung nor her family members responded to this letter.

7.      Ms Fung’s business visa was cancelled by notice sent to her by registered mail dated 7 September 2005.  The attachment to that notice stated that the Minister has also decided to cancel the business skills visas held by Ms Fung’s spouse and her two children, being satisfied that the family unit would not satisfy the extreme hardship requirement as a result of the visa cancellation.

Substantial Ownership Interest in an Eligible Business in Australia

8. Under s 134(1)(a) of the Act, the Minister may cancel a business visa if satisfied that its holder has not obtained a substantial ownership interest in an eligible business in Australia. An eligible business is defined under s 134(10) of the Act in the following way:

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.

9.      Mr Au Yueng, who appeared at the hearing by telephone on behalf of Ms Fung, submitted that she had established an export business which resulted in the export of Australian construction material to Hong Kong by Ms Fung’s Hong Kong companies.  Numerous letters of credit were produced evidencing the export from Australia of paving tiles sourced from Selkirk Brick Pty Ltd (Selkirk) in Ballarat, Victoria to the value of some AUD$2.85 million.  Mr Yeung submitted that the export of those goods satisfied the requirement under s 134(1)(a) of the Act.  However, as was submitted by Mr Chan, a solicitor appearing on behalf of the Minister, the fact that Ms Fung’s Hong Kong companies were importing materials from Selkirk in Australia did not indicate that Ms Fung satisfied the requirements of s 134(1)(a) of the Act.  In order to satisfy that section of the Act, Ms Fung is required to obtain substantial ownership in an eligible business “in Australia.”  Quite clearly, what Ms Fung’s companies did was to import Selkirk pavers from Australia.  Those companies did not conduct any export business in Australia, as it is clear from the letters of credit that the exporter in every case was Selkirk and not one of Ms Fung’s companies.  In fact, all that Ms Fung’s companies in Hong Kong did was to continue to import those goods from Australia as they had prior to her application for a business visa.  Until her visa was cancelled, neither Ms Fung nor any corporate entity associated with her conducted any business in Australia.  Also, although Ms Fung said in her application that she planned to invest AUD$1 million in her business in Australia, as at the date of the cancellation, she had made no investment in any business in Australia. 

10.     After Ms Fung’s visa was cancelled, she caused a new company, Well Treasure Pty Ltd (Well Treasure) (ABN 116501225) to be incorporated in Australia on 4 October 2005.  According to Mr Yeung, this company has capital of $100.  Although Mr Yeung submitted that Well Treasure had received a purchase order and had arranged for some building material to be exported to Macau, there was no evidence of any such order before the Tribunal.  In any event, the question which arises is whether the establishment of Well Treasure, after the date of cancellation of Ms Fung’s business visa, is a relevant matter for consideration. 

11.     The right of an applicant to have a decision made by the Minister reviewed arises under s 136 of the Act.  It provides for an application to this Tribunal for review of a decision of the Minister under s 134(1), 134(3)(a) or 134(4) of the Act.  As for this application for review, we are only concerned with s 134(1) and 134(4).  Section 134(1) provides that the Minister may exercise a discretion and cancel a business visa where the Minister is satisfied that the visa‑holder has not met the requirements set out under ss134(1)(a), (b) or (c) of the Act.  Given that the cancellation under s 134(1) involves the exercise of discretion, it is the function of the Tribunal to re‑consider the decision made by the Minister on 7 September 2005 and to determine whether the decision to cancel Ms Fung’s visa at that time was the preferable decision.  As Davies J said in Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 at 345, …In coming to its decision, the Tribunal was entitled to take into account all the facts proved before it.  However, regard must always be had to the nature of the decision which is under review.  A decision refusing to grant a benefit which has been applied for should be treated differently to review of a decision cancelling a benefit.  His Honour said, at 345:

…

The ambit of the jurisdiction of the Administrative Appeals Tribunal in relation to the review of a decision to cancel a pension or benefit is therefore less than would be the jurisdiction of the Tribunal in respect of a refusal to grant a pension or benefit or a decision suspending the payment of a pension or benefit. In the latter cases, there may well be an on-going entitlement to a pension or benefit which the Tribunal should recognise when formulating its decision. However, if the Tribunal comes to the view that the decision to cancel was the correct or preferable decision, then no further matter remains for the Tribunal's consideration. Any entitlement of the applicant to a pension or benefit at a subsequent time must be the subject of a further claim which, having been made, would only become the subject of review within the Tribunal's jurisdiction once a decision with respect to it had been made by an officer of the Department of Social Security and that decision had been the subject of appeal and reconsideration in accordance with s 19.

12.     The principles laid down by Davies J in Freeman were followed by Weinberg J in Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513. Branson J, in Aged Care Standards and Accreditation Agency Ltd v Kenna Investments Pty Ltd and Another (2004) 138 FCR 428 at 435, said that the material to which the Tribunal may have regard in reviewing a decision is material that is relevant to the determination that the Tribunal is required to make. What material is relevant to that determination will depend upon the nature of the decision under review, as the Tribunal is obliged to address the same question as the primary decision maker. Branson J referred to Freeman’s case.  Aged Care Standard involved a decision under s 3.24 of the Aged Care Act 1997 (Cth) to vary or revoke a period of accreditation of an agency.  Her Honour held (at page 436) that:

…[it was] not open to the approved provider to seek to undermine the significance of the review audit report, and the recommendations included in it, by calling evidence of improvements in its practice and procedure implemented after the date of the decision and in response to the review audit report and recommendations. 

She concluded (at page 436‑437):

…the Tribunal would not be addressing the same questions as the applicant was required to address if it were to determine whether, at the time of the Tribunal’s decision, the decision of the applicant under s 3.24 of the Principles can be seen to be the correct or preferable decision. This is not to say that the Tribunal cannot receive evidence of facts that occurred after the date of the decision under review. However, to be relevant to the Tribunal’s decision, that evidence must, in my view, bear on the merits of the decision as at the time that it was required to be made.

13.     In this matter, the fact of incorporation of Well Treasure after the date of cancellation of Ms Fung’s business visa would only become relevant if it affected the merits of the decision made by the Minister on 7 September 2005 to cancel her business visa.  I agree with the Minister’s submissions that it is not a relevant consideration in these circumstances.  The mere incorporation of an entity in Australia, with or without anything further, does not assist in establishing Ms Fung’s ownership interest in an eligible business in Australia to meet the requirements s 134(1)(a) of the Act.  It is therefore my opinion that Ms Fung has failed to meet the requirements of s 134(1)(a) of the Act; thereby enlivening the minister’s discretion to cancel her business visa.

Genuine Effort to Obtain Substantial Ownership Interest in an Eligible Business in Australia

14.     Failure to meet any of the required conditions under s 134(1) of the Act merely enlivens the Minister’s discretion to cancel a business visa.  However, that discretion must not be exercised if the holder of a business visa meets the requirements of s 134(2), which provides:

134. (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.

15.     The matters which the Minister may take into account when determining whether a person has made a genuine effort, as referred to s 134(2), includes any or all of the following matters:

134.(3)…

(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 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 interest;

(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by persons;

(g)business activity that is, or has been undertaken by the person;

(h)whether the person has failed to comply with a notice under s 137;

(i)if the person no longer holds substantial interest in a particular business or no longer utilises his/her skills in actively participating at a senior level in the day‑to‑day management of the business:

(i)the length of time 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).

16.     Mr Yeung submitted that Ms Fung had been making genuine efforts as required under s 134(2) of the Act.  In support of that contention Mr Yeung referred to the fact that Ms Fung had imported into Hong Kong Australian building materials worth approximately $AUD2.85 million between 2002 and 2005.  However, as I have already commented above, that was merely a continuation of Ms Fung’s business in Hong Kong where she imported Australian made pavers from Selkirk.  The requirement under the Act is to obtain a substantial ownership interest in an eligible business in Australia.  Her businesses in Hong Kong clearly do not meet that requirement.  The only business activity undertaken by the Hong Kong companies is to import Australian goods into Hong Kong.  No business activity has taken place in Australia.

17.     Ms Fung relied on the fact that the SARS outbreak in Hong Kong precipitated an economic crisis which caused her to remain in Hong Kong because, if she did not, her companies there would have difficulties in recovering debts.  However, there was no evidence put before me about the financial position of Ms Fung’s companies in Hong Kong.  Also, as was submitted by the Minister, the SARS problem in Hong Kong had resolved by mid‑2004, but despite that Ms Fung did not make any further efforts to obtain a substantial ownership interest in an eligible business in Australia.  Ms Fung also did not explain why no steps were taken to obtain the requisite interest in an eligible business in Australia between November 2001 and 2003. 

18.     Mr Yeung submitted that the incorporation of Well Treasure in September 2005 was evidence of Ms Fung’s genuine efforts to obtain substantial ownership in an eligible business in Australia.  However, as I have already mentioned above, that event took place after the business visa was cancelled.  In my view, it sheds no light whatsoever on Ms Fung’s intentions between November 2001 and September 2005, when her visa was cancelled.  It is not, in my view, a relevant consideration.  Mr Yeung submitted that Ms Fung had visited Australia in August 2005 for the purpose of undertaking a feasibility study regarding the prospect of doing business in Australia.  However, once again, no evidence was put before me of any such study.  There was no evidence of any discussions with any other persons in Australia for the purpose of establishing any kind of business.  Nor was there any evidence of a business plan or the development of any business proposals. 

19.     Although Ms Fung, in her application for the business visa, said she planned to invest AUD$1 million in her business in Australia, at the date of cancellation of her business visa, she had not invested any money at all.  Mr Yeung submitted that Ms Fung was about to buy a residential house in Australia to provide for her children to go to school in this country.  He also submitted that she was about to transfer a significant amount of money to Australia to support her family and her business activities.  However, once again, there was no evidence of that.  In fact, there was no evidence at all of any assets being transferred to Australia by Ms Fung for use in obtaining an interest in an eligible business. 

20.     In my opinion, there has been no genuine effort made by Ms Fung to satisfy any of the requirements under s 134(2) of the Act.  I accept the view expressed by this Tribunal in Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 238 where, after detailed examination of what was meant by the term genuine effort for the purposes of s 134(2) of the Act, the Tribunal arrived at the view that the word “genuine” and the matters mentioned in s 134(3) of the Act show that there is a requirement of a level of effort beyond that which is purely superficial or token (at paragraph 53).  It is clear that the only step taken by Ms Fung, between the grant of her business visa and its cancellation, was to continue with the same import business which she was conducting prior to her application for the business visa.  She did nothing at all in that period of time to obtain a substantial ownership interest in an eligible business in Australia.  Her efforts could not even be described as superficial or token.  There was no evidence of any effort at all.

CONCLUSION

21.     Given that I have found that the ameliorating provisions set out in s 134(2) of the Act do not apply to Ms Fung, the only question is whether the preferable decision in this case is that the Minister cancel her business visa.  In my view, the preferable decision is that Ms Fung’s business visa be cancelled.  There was no evidence before the Tribunal that, prior to her business visa being cancelled, she had made any effort at all to meet the requirements set out in the Act.  Although Ms Fung claimed that there were good reasons for not being able to obtain the requisite ownership interest in an eligible interest in Australia, I do not accept that those reasons are sufficient to warrant the Minister exercising his discretion in her favour.

22.     Under s 134(4) of the Act, where the Minister cancels a person’s business visa under s 134(1), and a business visa is held by members of the family unit of the holder of the cancelled visa, where those persons would not have held a business visa unless they had been a member of the family unit of the holder of the cancelled visa, the Minister must cancel the other persons business visas by giving written notice to those persons.  However, the Minister must not cancel other persons’ business visa under s 134(4) if the cancellation would result in extreme hardship to those persons (s 134(5)).  As I mentioned earlier, Ms Fung’s spouse and children did not lodge separate applications seeking review of the decision to cancel their visas. Nor were any submissions made to the Tribunal, as part of Ms Fung’s application, regarding any hardship which may be suffered by Ms Fung’s spouse and children.  Therefore, the Minister’s decision to cancel Ms Fung’s visa, and the visas of her husband and two children, is in my opinion, the preferable decision.  I therefore affirm the decision made by the Minister on 7 September 2005.

I certify that the twenty‑two [22] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of Hearing:  20 June 2006

Date of Decision:  12 July 2006
Advocate for the applicant:        Mr V. Au Yeung

Solicitor for respondent:            Mr A. Chand, Clayton Utz Lawyers