Gan and Minister for Immigration and Multicultural and Indigenous Affairs
[2005] AATA 1235
•15 December 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 1235
ADMINISTRATIVE APPEALS TRIBUNAL ) N2004/1640
)
GENERAL ADMINISTRATIVE DIVISION )Re: BILLY GAN
Applicant
MINISTER FOR IMMIGRATION
AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal: Ms G Ettinger- Senior Member
Date: 15 December 2005
Place: Sydney
Decision:The Tribunal affirms the decision under review.
Ms G Ettinger
Senior Member
CATCHWORDS
Business Skills visa – cancellation of visa – substantial ownership of a company but no eligible business in Australia – no active participation in day to day management at senior level of business – discretion not to cancel visa – residual discretion applied - cancellation of secondary business visas not appealed – decision affirmed.
Migration Act 1958(Cth) ss 134, 135, 136, 137
CASE LAW
Freeman v Department of Social Security (1988) 19 FCR 342
Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257
Hope v Bathurst City Council (1980) 144 CLR 1
Re Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237
Re Drake (No 2) and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581
Re Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 380
REASONS FOR DECISION
15 December 2005 Ms G Ettinger - Senior Member
BACKGROUND
1. Mr Billy Gan is a successful business man in Indonesia. His businesses there are quite diverse according to his Record of Interview made in connection with his application for a Business Skills visa subclass 127 which was held on 30 April 2001, and is at T8 in Exhibit R2. In it he gave the business in which he has been involved in Indonesia as crocodile farming, fishing boats (25 wooden boats), fish for crocodiles/shrimps for export, civil contracting and health food products. He said that he also has business interests in the health food supplement area in Hong Kong and China and Europe.
2. Mr Gan arrived in Australia in July 2001 after the grant of his Business Skills visa, and departed again in September 2001, the same month in which his registered Australian company, Ultra Trend (Australia) Pty Ltd was registered, the registered address being the home address of Mr Gan’s family in Australia. The company is still at that address. Mr Gan has a wife; his two young daughters have undertaken tertiary study in Australia.
3. Mr Gan enthusiastically explained at the Tribunal that Spirulina and Sedum are the major ingredients of the product Diacont, a food supplement, which he wants to manufacture and package in Australia, and which he described as a food for the future. Sedum, Mr Gan told us, grows untended in most Australian gardens, whereas the Spirulina used by him in Indonesia is imported from China.
4. The commencement of the Australian manufacture of Diacont, the product on which Mr Gan wanted to concentrate, was hampered Mr Gan told me, by regulatory requirements and the collapse in 2003 of pharmaceuticals manufacturer Pan Pharmaceuticals Pty Ltd, with whom he had intended to contract to manufacture his products. Hence the development of the business has been somewhat slow he said.
5. It was not disputed, and I accepted that the Applicant was present in Australia for only approximately 104 days from the date of first entry into Australia on 28 July 2001 to the date of cancellation of his visa on 17 November 2004. Angeline has been in charge of the Australian business, and the evidence before me was that Mr Gan’s daughters have continued to pursue his business interests in Australia even after the cancellation of the visa. Mr Gan gave evidence about participating in a food and wine fair at Darling Harbour in September 2005. Lilian has become marketing manager, and says she has coordinated her father’s business in Australia since September 2005.
6. I moved then to consider the issues before me.
PRELIMINARY ISSUE
7. Mr Levingston who represented Mr Gan, raised a threshold issue regarding whether Ms H Hardingham, the Delegate (Position No: 3447) in the Business Skills Section, who on, 13 July 2004, signed the ‘Notice of Intention to Cancel’ Mr Gan’s visa (T14), and Ms S Burress, who, on 17 November 2004, (T2), signed the ‘Notice of Cancellation’ did indeed have the delegated authority to do so. He had raised it in correspondence with the Respondent sometime before the hearing, and not received a satisfactory reply. The matter was clarified during the hearing, and I was satisfied that the relevant persons held the authority to make the decision (Exhibit R3).
ISSUES FOR DETERMINATION
8. The issue to be decided was whether I should, based on all the evidence before me, affirm, vary or set aside the decision of the Respondent to cancel Mr Gan’s Business Skills visa.
9. In deciding this issue, I had to consider whether I was satisfied that Mr Gan:
· had, at the relevant time of cancellation of the visa on 17 November 2004, not obtained a “substantial ownership interest” in an “eligible business” in Australia; or
· was not utilising his skills in actively participating at a senior level in the day-to-day management of that business; or
· did not intend to continue to hold a “substantial ownership interest” in, and utilise his skills in actively participating at a senior level in the day-to-day management of an “eligible business” in Australia.
10. In doing so, I noted that the Minister, and the Tribunal standing in her shoes, must not cancel Mr Gan’s Business Skills visa under section 134(1) of the Migration Act 1958 satisfied that 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.
11. I am mindful also of the residual discretion which I must, as appropriate, consider (Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31).
12. If I find against Mr Gan, then his wife and children, the secondary visa holders, would have the opportunity, if they applied, to have the Tribunal consider whether, pursuant to section 134(5) of the Act, the cancellation of their visas would result in extreme hardship to them. I noted however that there was no application by the secondary visa holders before me.
13. On the basis of the material in the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 the (“T-documents”), and the Applicant’s evidence, I was satisfied that the Applicant was granted a (Business Skills) visa subclass 127 on 28 June 2001 (Exhibit R2, T13). Accordingly, certain other family members, including Mr Gan’s wife, and their children were also granted secondary visas. The decision to cancel a person’s business visa leads to the consequential cancellation under section 134(4) of the Act of certain business visas held by members of the person’s family. These were cancelled as a consequence of the cancellation of Mr Gan’s visa. In this application, I have only dealt here with his appeal.
LEGISLATION
14. Pursuant to section 134(1) of the Migration Act 1958 (“the Act”), the Respondent has the discretion to cancel a business visa in certain circumstances. As relevant section 134(1) provides:
“134 Cancellation of business visa
(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. Section 134(2) of the Act states that the Minister must not cancel a business visa under certain circumstances. As relevant, the section follows:
“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.”
16. Section 134(10) sets out the meaning of “eligible business”, and is considered further on in these Reasons for Decision.
17. By way of background I noted that there is a three year period during which the power to cancel a visa may be exercised:
“134(9)The Minister must not cancel a business visa under subsection (1), (3A) or (4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:
(a)if its holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or
(b)if its holder was not in Australia when he or she was first granted a business visa—on the day on which its holder first entered Australia after that first visa was granted.”
18. The power to cancel a visa is subject to section 135, which provides:
“135 Representations concerning cancellation of business visa
(1)Before cancelling a visa under section 134(1), (3A) or (4), the Minister must give its holder a written notice:
(a) stating that the Minister proposes to cancel the visa; and
(b)inviting its holder to make representations to the Minister concerning the proposed cancellation within:
(i)if the notice is given in Australia—28 days after the notice is given; or
(ii)if the notice is given outside Australia—70 days after the notice is given.”
…”
19. Section 137 of the Act authorises the Respondent to request a holder of a Business Skills visa to provide the Respondent with certain information.
20. The Tribunal’s jurisdiction to review the Respondent’s decisions under sections 134(1) or 134(4) derives from section 136.
21. I have noted that there are guidelines promulgated to assist decision-makers in considering the tests in the legislation, and that they are available in relation to considerations under section 134 of this Act. Whilst they do not have the force of law, they are of assistance, and may be used as a guide unless there is some contrary intention expressed in the legislation (Re Drake (No 2) and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634). I have not found any such contrary intention in the present legislation, and have found the guidelines of assistance in my assessment of Mr Gan’s application.
EVIDENCE BEFORE THE TRIBUNAL
22. The T-documents were received into evidence as Exhibit R1 and R2. Further documents were tendered, and were Exhibits A1 – A7 and R3 before the Tribunal.
23. Oral evidence was given by the Applicant and his daughters, Angeline and Lilian Ngan.
RELEVANT CASE LAW IN CONSIDERATION OF THE APPLICATION OF SECTION 134 OF THE ACT
24. I was mindful that cases which are relevant to the decision making process are as follows: Freeman v Department of Social Security (1988) 19 FCR 342, Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257, and a line of Tribunal cases which have 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 (Re Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237).
25. However, I have noted also that in Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997, the Tribunal stated (at paragraph 9):
“… The ordinary principles of administrative review apply. It is the function of this Tribunal to deal with the question having regard to the evidence put before it at the time and having regard to all the facts and circumstances that have occurred up until the date of the hearing.”
26. I am mindful also that future intentions can be taken into account when considering the Business Skills visa, and that this was canvassed in Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703 where the Tribunal stated that it is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist the determination of whether or not the decision to cancel is the correct or preferable one. (Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628). Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 states the position as follows:
“…
41.Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, is that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision‑maker or in existence at the time that the decision under review was made.”
27. There is also Kim (supra), in which Kiefel J discussed the residual discretion available to the Minister and therefore the Tribunal standing in her shoes, stating relevantly:
“It remains to consider whether the Tribunal took account of the fact that there remained a choice as to cancellation even if the Minister was satisfied about the matters listed in subs (2). It seems to me tolerably clear, from pars [13] and [15] of the reasons, that the Tribunal considered that if the Minister was so satisfied cancellation followed. In my view it fell into error in construing the section in that way. The subsection operates only as a prohibition upon cancellation in the circumstances there mentioned. The Tribunal followed the same course as the Minister’s delegate had done. The decision to cancel was seen to take only upon a consideration of the matters referred to in subs (2). No consideration was given by the delegate to the question whether there was nevertheless a discretion not to cancel the visa.”
28. Pursuant to section 134(1) of the Act, the Tribunal has a discretion to cancel the applicant’s visa if the applicant has not obtained a “substantial ownership interest” in an “eligible business” in Australia, or does not intend to continue to hold a substantial ownership interest (sections 134(1)(a) and (c)), but must not cancel the visa if the person has made a genuine effort to obtain a substantial ownership interest of such kind (section 134(2)(a)) of the Act.
29. The Tribunal also has a discretion to cancel the visa if the person has not been utilising his or her skills in actively participating at a “senior level in the day to day management” of the eligible business, or does not intend to continue to do so. However, the Tribunal must not cancel the visa if the person has made a genuine effort and intends to continue to make a genuine effort, to utilise his or her skills in actively participating at a senior level in management of that business (sections 134(2)(b) and (c) of the Act).
30. Clearly, the legislation contemplates in section 134 that consideration be given to a person’s intention. This suggests that, while it is true that the exercise of the discretion at the time of cancellation of the visa is the focus, in order to properly address the matters raised in section 134, it may be relevant to address matters that go to occurrences after the date of cancellation, to confirm or deny the correctness of views relevantly to be formed under those sections, and further, to consider the residual discretion as discussed in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (supra).
31. I moved then to consider the application of sections 134(1) and 134(10) of the Act in relation to Mr Gan.
CONSIDERATIONS RELATING TO SECTION 134(1) AND 134(10) OF THE ACT
32. Section 134(1) of the Act requires that a visa holder have a “substantial ownership interest” and be engaged at a senior level on a day to day basis in the management of an “eligible business”. Cases such as Hope v Bathurst City Council (1980) 144 CLR 1, which deal with the meaning to be given to the term “business”, apply to the interpretation of this term in the Act. Hope’s case is authority for the point that carrying on a business denotes activities for the purpose of profit, undertaken on a continuous and repetitive basis which may be revealed by inspecting financial records, examining who the clients are, and a consideration of whether the activities are genuine and real. Hope’s case is also authority for the proposition that a business may be “carried on” though it is done in a small way. The Department’s policy manual sets out that the question of whether a business is an “eligible business” relates to the achievement of stated objectives in the legislation set out at section 134(10), through business activities. It does not directly relate to the size or scale of the business. “The business may be small: it is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives.” (Migration Series Instruction 133: Visa Cancellation under subdivision G – Cancellation of Business Visas para 4.3.3).
33. The threshold question is whether Mr Gan had a “substantial ownership interest” in an “eligible business” at the relevant time. The term “eligible business” is defined in section 134(10) of the Act.
“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.”
34. Before considering the specific indicia in section 134(10(a) – (f) of the Act, I have reviewed the evidence of the various witnesses, including Mr Gan in regard to his claim that he has set up an eligible business in Australia.
35. Mr Gan told me that he set up PT Skyline Kurnia as his company in Indonesia which would manufacture and deal in health foods and food supplements such as Spirulina and Diacont. He mentioned that in Indonesia he had six such products, and had an R &D team of retired professionals from Beijing University looking at development of his products. However, he said that for Australia, he intended first to concentrate on Spirulina and Diacont. Mr Gan explained that these food supplements were beneficial to health generally, for the immune system, for diabetes, and that Spirulina assists with calcium take-up and absorption.
36. Mr Gan explained the structure of his companies in Indonesia, that is Ultra Trend Biotech Indonesia of which he has a 40% shareholding, and his older brother and the children of the brother, 60%. He said that he also has a company in Hong Kong, and that Tiens Co was handling his business in Europe.
37. Approximately two months after arriving in Australia upon the grant of the business visa, on 17 September 2001, Ultra Trend (Australia) Pty Ltd, a shelf company was incorporated. He said that he held almost 100% of the shares, and that perhaps his children held 1%. The documents relating to the company at pages 238 – 241 of Exhibit R1, which are difficult to discern, appear to name both Mr Gan and his daughter Angeline as director and secretary of the company, and indicate there are two shares at the value of $1 per share. I accept Mr Gan has a substantial ownership in the company, which however clearly has little actual value.
38. The Respondent made submissions regarding its understanding that at the time of cancellation of the visa in November 2004, there was no evidence of a $100,000 or any bank account. That was clarified by Mr Gan identifying Commonwealth bank statements for Ultra Trend Australia at Exhibit R1, T19/264-267, and identifying in a statement at page 264, that the total transfers to Australia in the relevant three years were $1,140,168.94 (T19/264). There was also a Business Activity Statement prepared by accountant G J Fung Pty Ltd at Exhibit R1, T19/248 & 249 for the period April to June 2004.
39. Mr Gan said that with the assistance of his daughter Angeline, who corroborated this when she gave her evidence before the Tribunal, he contacted Dr Ming Xie shortly after his arrival in 2001, and engaged his services as a consultant in the latter half of 2001. By February 2002 he had Therapeutic Goods Authority (“TGA”) approval to manufacture 500,000 units of Diacont.
40. I was interested to note however, that after the first flurry of activity, there seemed to be little action in regard to Mr Gan’s Australian business. He told me that an error in the approval given by the TGA in February 2002, which restricted the sale of Diacont to countries outside Australia, was not noticed until September 2005. I noted at page 81 of Exhibit A5, an email of Lilian Ngan to Dr Ming Xie discussing the state of a TGA certificate.
41. When asked what steps he had taken to realise his business objectives in Australia, Mr Gan informed me that he was manufacturing Diacont in Indonesia and looking towards arranging manufacture in Australia.
42. Mr Gan said that he had been hampered by the regulatory regime in Australia with which he was unfamiliar, as well as the culture, and was mindful packaging requirements were different in Australia. He gave evidence also that there had been an arrangement, (although no contract), for Pan Pharmaceuticals Pty Ltd to manufacture Diacont, and that progress with that project had been delayed by the company’s collapse in 2003. Mr Gan also said that Government regulation post Pan Pharmaceuticals was very tight, and when he shipped raw material from Indonesia to Australia, it was detained by the Australian Customs Service for some two months. I noted from the documents in Exhibit R1, T19/205 that the import consisted of 2- 4 cartons of Spirulina Powder and 1-1 carton of Sedum Powder destined for Ultra Trend (Australia) Pty Ltd.
43. Mr Gan told me that a substitute manufacturer had been contacted, being DFC Thompson Australia Pty Ltd (Exhibit R1 T19/210), but that due to difficulties with capsule size, there had not yet been any contract, and only one batch of Diacont, which was produced in August 2004. I was mindful that between February 2002 and November 2004, there had been one shipment of Spirulina and Sedum, and one manufacture of Diacont. The sequence was the import of the raw product from China to Indonesia, and on shipping to Australia. It was a transaction between PT Ultra Trend Indonesia and Ultra Trend Australia.
44. In reply to questioning, Mr Gan said that if his visa was not restored, he planned to still continue with his five year plan to manufacture and market Diacont and other products to Australia. He said that he had been trying for four years to establish, and was on the verge of success, so he would continue.
45. I was mindful that notwithstanding the undertakings at T1/21, Exhibit R2, Ultra Trend Australia did not trade or undertake any commercial activity in its first year, and I was satisfied that between the incorporation of the Australian company in September 2001 and 1 July 2003, there was minimal activity in that company. In Exhibit R1, at T10/80, there was an invoice to the value of $6,160.45 dated July 2003, for a shipment of plastic bottles from Australia to Ultra Trend Indonesia. I accepted that there had been as total of four shipments, which included caps and bottles. Various other activities took place, including the export of 2,000 bottles of Diacont (500 mg 60 capsules) to the value of $28,000 to Hong Kong for analysis.
46. There was also a plan, and documentation between PT Tiens Indonesia Logistics Trading and PT Ultra Trend Biotech Indonesia ((Exhibit A5, pp 45-50), which Angeline explained was an agreement Mr Gan had made to manufacture Diacont in Australia for export to Indonesia, the reason being that locally (Indonesian) made medicines were not readily accepted by the market there.
47. At page 81 of Exhibit A5, there was an email of Lilian Ngan to Dr Ming Xie dated 27 September 2005, asking his advice about insurance as follows: “Do we need to buy any form of insurance to protect our company before marketing our product in Australia?” It was difficult to be satisfied that Mr Gan had an eligible business pursuant to the legislation when his daughter appeared to first be considering insurance almost a year after cancellation of the visa.
48. Ms Alex who represented the Respondent, asked Mr Gan about a letter of the Department at Exhibit R1,T12 dated 27 October 2003 in which he was asked about whether he had obtained or maintained a substantial ownership interest in an eligible business in Australia. She told me that in reply, Mr Gan had supplied only his business registration and some invoices. Mr Gan replied saying that there were cultural differences between the two countries, and that he had not opened an office because it was too expensive, and that he trusted his daughters to run the business from home, a reply I did not find satisfactory to the question which had been posed.
49. Angeline told me that between February 2002 and November 2004, they had also attempted to import and sell crocodile wallets, belts and bags. I noted that this had not been a successful venture due to CITES and other concerns. I noted also that Mr Gan appeared to have very little knowledge about this activity.
50. Mr Gan said that as a result of his company’s participation at the Darling Harbour food and wine fair in September 2005, he had undertaken to change the size of the capsules produced, and to alter the packaging. This was corroborated by Angeline’s evidence.
51. I was not satisfied to the requisite standard, that the business activities Mr Gan and Ultra Trend Australia undertook between the grant of the visa in 2001, and its cancellation in 2004, constituted a business operated on a continuous and repetitive basis for profit (Hope v Bathurst City Council (supra)). I was mindful that to be eligible a business did not have to be on a particular scale.
52. However, whilst I was satisfied that Mr Gan and Angeline were the sole proprietors of Ultra Trend Australia, I could not be satisfied that that ownership was in an eligible business. However, I took detailed consideration of the indicia in section 134(10)(a) – (f) of the Act in the section which follows.
FURTHER CONSIDERATION OF WHETHER MR GAN’S INVOLVEMENT IN THE MANUFACTURE OF DIACONT AND EXPORT OF BOTTLES/CAPS CAN BE CONSIDERED AN “ELIGIBLE BUSINESS”
53. Accordingly, in order to finally decide on the threshold issue which was whether Mr Gan had an eligible business in Australia, I took into account the evidence to consider whether I reasonably believed that the Applicant’s business resulted in or would result in one of the following items in section 134(10)(a)–(f) of the Act in the definition of eligible business. In doing so, I considered the evidence and submissions with regard to:
(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.”
the development of business links with the international market
54. In considering this sub-section, (section 134(10)(a) of the Act), I have referred to the evidence and submissions with regard to the business ventures Mr Gan has investigated or entered into in Australia from the time of the grant of his visa in 2001.
55. I have found in the paragraphs above, and from the evidence before me, that Mr Gan’s idea of manufacturing Diacont in Australia, and perhaps other such products later on, was approached very much as a side line of his main business in Indonesia, and, notwithstanding the incorporation of Ultra Trend Australia soon after the grant of the visa, and only two months after Mr Gan’s arrival in Australia, it has not proceeded to any extent. Only one manufacture of Diacont from raw product sourced in China via Indonesia, took place between 2001 and 2004, and one shipment was sent to Hong Kong.
56. Accordingly I was satisfied that Mr Gan cannot be held to have developed business links with any market in regard to his proposed area of business.
57. In summary then, I was satisfied that Mr Gan’s activities in Australia did not satisfy the criteria in section 134(10)(a) of the Act, the development of business links with the international market.
the creation or maintenance of employment in australia
58. I moved then to consider whether Mr Gan had a role as claimed, in the creation or maintenance of employment in Australia. The evidence which I accepted, was that Mr Gan purchased a residence for the family in Australia shortly after his arrival in 2001, and that his daughters who have been students here, live there, and that Angeline ran the business from there while she attended university, until Lilian joined her in 2005. There have been no employees, and there are none now, although I noted that Mr Gan has had advice and services rendered by Dr Ming Xie, and an accountant Mr Fung.
59. I found from the above evidence that the criterion, the creation or maintenance of employment in Australia, as anticipated in section 134(10)(b) of the Act was not met by Mr Gan as his daughters run the Australian business (such as it is), for him.
export of australian goods or services
60. I next considered in the context of eligible business whether Mr Gan was involved in the export of Australian goods or services. I was mindful there has only been one batch of Diacont manufactured, in 2004, and that it was sent to Hong Kong. I noted that Mr Gan exported four shipments of plastic bottles and some caps to Indonesia for use in packaging.
61. I have already held that his activities did not qualify as a business pursuant to the tests in Hope v Bathurst City Council (supra) as the activity was not undertaken on a continuous or repetitive basis.
62. Accordingly I could not be satisfied that Mr Gan was exporting Australian goods or services in satisfaction of section 134(10)(c) of the Act.
further subsections
63. I did not consider either subsections 134(10)(d) or (e) relevant in this case, and have not considered them further, noting only that the attempt to import crocodile products was not successful.
increasing commercial activity and competitiveness within sectors of the australian economy
64. As to increasing commercial activity and competitiveness within sectors of the Australian economy; I noted that there is a bank account and that BAS statements have been made.
65. Mr Gan’s other activity which was attempted, namely the import of crocodile leather goods did not proceed.
66. Accordingly, I found that Mr Gan’s activities in the relevant period, and indeed beyond, did not increase commercial activity and competitiveness within sectors of the Australian economy in satisfaction of section 134(10) of the Act.
WHETHER MR GAN WAS UTILISING HIS SKILLS IN ACTIVELY PARTICIPATING AT A SENIOR LEVEL IN THE DAY-TO-DAY MANAGEMENT, WHETHER HE HAD MADE A GENUINE EFFORT TO DO SO, OR WHETHER HE HAS THE INTENTION TO MAKE SUCH EFFORTS
67. Mr Gan’s various attempts at business in Australia have been discussed in the paragraphs above. Mr Gan said that because of his lack of knowledge of English, he was constrained to do business in Australia through his daughters, emphasising that although Angeline, and Lilian, both in their early twenties, had been studying, they looked after the business outside of their study time. He was adamant however that they could not enter into contracts for him, and had to refer and defer to him for decisions. I find however from the evidence that Angeline carried out the negotiations with regard to the manufacture of Diacont, including liaison with bottle suppliers and paying the relevant bills. She had no limit on what cheques she could write. Mr Gan said that between July and December 2001, he had been in contact with Angeline almost every day, but that between January and December 2002, she had been at University studying business administration (she studied from October 2001 to July 2004), so they had not been in contact as often. Mr Gan estimated that he spent approximately a day a week on his Australian business. He said that he travelled extensively as part of his marketing activities. Angeline told me that in 2003/4 she spent approximately 15 hours a week on the family business. She said that her father visited for a week at a time; her evidence was that she did the ground work, and Mr Gan had to approve the decisions.
68. I was satisfied from the evidence of Angeline and Lilian that despite his evidence that he had virtually daily contact with his daughters about the Australian business, Mr Gan had little if any involvement in the day to day management of it. Neither did I find that Mr Gan had formed any future intention of doing so.
69. In making the above decision that Mr Gan was not utilising his skills in actively participating at a senior level in the day-to-day management of an Australian business, not making a genuine effort to do so, and did not demonstrate the intention to make such efforts, I took into account some of the Tribunal’s decided cases, noting that in Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656, Senior Member Muller as he then was, said at paragraph 12:
“Not only must the eligible business operate in Australia to comply with the Act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.”
70. I noted further that Deputy President McMahon in Re Tang said at paragraph 25:
“There is no evidence that the applicant “actively participates at a senior level” from overseas.”
71. Deputy President Wright continued in Re Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 581 at paragraph 11:
“This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential.”
72. The evidence before me was that there has been a minimal amount of business done by Mr Gan and his companies in Australia, and what has been organised, has been done through his daughters, particularly Angeline who makes arrangements and signs cheques. I am mindful noting what Deputy President Wright said in Re Suryaty and Ors and Minister for Immigration and Multicultural and Indigenous Affairs (supra), that to qualify, Mr Gan would not be confined to working within the geographical limits of Australia. However the Act does not contemplate an absentee entrepreneur directing operations from afar, and direct hands on involvement within Australia would need to be part of the enterprise.
73. I noted Angeline’s evidence that she defers to her father for decision making, but he seemed for example quite uninformed about the import of crocodile products into Australia. The evidence before me satisfied me that Mr Gan had only perfunctory personal knowledge of what was going on in Australia. Unfortunately I could not be satisfied from the evidence, that Mr Gan was or indeed is involved in the day-to-day management of any business in Australia.
SUMMARY REGARDING SECTION 134(1) OF THE ACT
74. I find then for the reasons given above that Mr Gan, although he has a substantial ownership interest in Ultra Trend Australia, does not have a substantial ownership interest in an eligible business in Australia, (section 134(1)(a) of the Act), because the activities of Ultra Trend Australia do not qualify as an eligible business in Australia. I find also that he was not utilising his skills in actively participating at a senior level in the day to day management of any business in Australia (section 134(1)(b) of the Act). There was no suggestion that Mr Gan did not intend to continue to pursue business in Australia, (section 134(1)(c) of the Act).
75. I moved then to consider the tests in section 134(2) of the Act which states that the visa must not be cancelled if the Minister and the Tribunal standing in her shoes, is satisfied of certain things.
CONSIDERATION OF THE TESTS IN SECTION 134(2) OF THE ACT
76. Although I was satisfied that there were grounds to exercise the discretion to cancel the Applicant’s Business Skills Visa, and that the tests pursuant to section 134(1) of the Act were made out, I needed to be satisfied regarding the tests set out in section 134(2), and the residual discretion as enunciated in Kim (supra). The tests in section 134(2) of the Act which I have considered, are set out below:
“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.
(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).”
77. I had to take into consideration whether the Applicant has made, and intends to continue to make genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, and whether he has made, and intends to continue to make a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of that business. I noted that section 134(3) set out the matters which may be taken into account when determining whether a person has made genuine efforts referred to in section 134(2) of the Act.
78. I am mindful that the Tribunal is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist the determination of whether or not the decision to cancel is the correct or preferable one (Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628). Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 states the position as follows:
“…
41. Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, is that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision‑maker or in existence at the time that the decision under review was made.”
79. I have also considered the guidance given in Paragraph 4.5.1 of the “Migration Series Instruction: Cancellation of Business Visa” Guidelines, and section 134(3) of the Act, and have found as follows from the evidence before me:
· (a) There is no business proposal or business plan available. Mr Gan demonstrated little knowledge of, and little evidence of participation in the operations of Ultra Trend Australia. His evidence was that he holds almost 100% percent of the shares in Ultra Trend Australia. That is of course a substantial holding.
· (b) Ultra Trend Australia was registered to deal with the manufacture of Diacont and other similar food supplements or medicines. There was no evidence of the existence of partners or joint venturers, no employees, and very little involvement by Mr Gan himself.
· (c) There was no evidence of research done in regard to the market for Diacont, apart from Mr Gan and his daughter’s walk through Chinatown Chinese medicine shops on an early visit by him to Sydney. There was then the connection made with Dr Ming Xie who acted as a consultant.
· (d) Mr Gan spent 104 days from the date of first entry into Australia on 28 July 2001 to the date of cancellation of his visa on 17 November 2004. He gave no assurances he was planning to spend more time here, but did say that he travels quite extensively to market his products.
· (e)Ultra Trend Australia established a bank account with the Commonwealth Bank. Mr Gan bought a house in Sydney shortly after his arrival here, where his children live, and out of which Ultra Trend Australia operates. The Commonwealth bank statements were at Exhibit R1, T19/264-267, and identify that at 30 July 2004, the bank account had a balance of $1,140,168.94 (T19/264). There was also a report of accountant G J Fung Pty Ltd at Exhibit R1, T19/248 & 248.
· (f) As stated above, Mr Gan owns almost 100% percent of Ultra Trend Australia, However as also noted above, I have been unable to find that Mr Gan has an eligible business in Australia pursuant to the terms of the legislation.
· (g) Mr Gan’s attempts to set up business in Australia have been detailed above. They consisted of the unsuccessful attempt to import crocodile products, and a not very vigorous attempt to have Diacont manufactured for export and sale on the Australian market. I was satisfied that the only activity which has been more than superficial in terms of the attempt to set up business, was in relation to the obtaining of TGA approval and the manufacture of one batch of Diacont in Australia in 2004. Activity which has followed post cancellation of the visa has consisted of participation in September 2005 in a trade fair at Darling Harbour.
· (h) and (i) are not relevant to Mr Gan.
80. In summary, I have found that throughout the relevant period, the Applicant was in Australia for approximately 104 days. He did not make any commitment to move to Australia; however Mr Levingston submitted that Mr Gan was prepared to spend money on air fares and travel to Australia, and submitted further that Mr Gan had a strategic plan with regard to his activities in Australia, and was on the verge of success with it.
81. I found Mr Gan was not involved to any extent in the day to day management of the fledgling business of Ultra Trend Australia. Mr Gan has shown very little commitment to any business in Australia and has not managed any business venture here although he spoke of continuing with it regardless of whether the visa was cancelled.
82. I therefore find from the above that, notwithstanding the registration of Ultra Trend Australia, the Applicant’s conduct has been inconsistent with the making of a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, and to actively participate. I am not satisfied that Mr Gan has made a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of Ultra Trend Australia or any other business in Australia, or that he intended to continue to make such efforts. I was satisfied that the conditions in section 134(2) of the Act were not met.
83. For the above reasons, and bearing in mind that the Applicant spent only 104 days in Australia from the date his visa was granted in 2001 until the Respondent’s delegate cancelled it on 17 November 2004, find that the Applicant did not, at the date of cancellation, hold an intention to continue making the genuine efforts required pursuant to section 134(2) of the Act.
THE RESIDUAL DISCRETION
84. I have taken into account the residual discretion raised in Kim (supra) so that notwithstanding Mr Gan not having succeeded in relation to the tests in section 134(1) and 134(2) of the Act, further consideration was necessary. Kiefel J stated at paragraph 21 of Kim (supra) that:
“The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them.
85. I considered that statement in relation to Mr Gan, and was satisfied that although he registered Ultra Trend Australia shortly after his arrival in 2001, and holds virtually 100% of the value of the company, there is no eligible business pursuant to the legislation. Mr Gan’s personal participation in the company was minimal during the relevant period and afterwards. I do not accept that Mr Gan requires more time to develop an eligible business.
86. I was mindful of Member McLean’s findings in Re Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 380, where Mr McLean held that it was the day to day participation in the management of the business activities of the Applicant which had to be examined, and not the location of the Applicant. In my view that case is not on foot with Mr Gan’s situation, as Member McLean accepted that the Applicant in Widjaja (supra) was in a joint venture, and was required as part of the conduct of that business, to be located in Asia. That does not apply to Mr Gan’s situation and Widjaja (supra) can be distinguished, and does not assist with applying the residual discretion. I was mindful further that the Act requires the day-to-day management of an eligible business in Australia.
87. After taking into account all of the evidence and submissions, I was satisfied that the discretionary power in section 134(1) of the Act to cancel Mr Gan’s Business Skills visa should be exercised, and the decision under review should be affirmed.
DECISION
88. The Tribunal affirms the decision under review.
I certify that 88 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member:
Associate
Date of Hearing: 7 November 2005
Date of Decision: 15 December 2005
Applicant’s RepresentativeMr C Levingston, Christopher Levingston & Associates
Respondent’s RepresentativeMs A Alex, Phillips Fox
0
14
0