Ganhao and Minister for Immigration and Multicultural and Indigen Ous Affairs
[2003] AATA 1150
•3 October 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1150
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. N2002/603
GENERAL ADMINISTRATIVE DIVISION )
Re
EMILIO GANHAO
Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member M D Allen
Date3 October 2003
PlaceSydney
ADMINISTRATIVE APPEALS TRIBUNAL ) No N2002 / 603
)
GENERAL ADMINISTRATIVE DIVISION )Re: EMILIOJOSE GANHAO
Applicant
And MINISTER FOR IMMIGRTAION AND MULTICULTURAL AND INDIGINOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member M D Allen
Date 3 October 2003
Place Sydney
DecisionFOR the reasons given orally at the conclusion of the hearing in this matter, the decision under review is SET ASIDE.
(Sgd) M.D. Allen
..............................................Senior Member
CATCHWORDS
IMMIGRATION – Business Skills Visa – whether Applicant had established an eligible business in Australia - effect of ameliorating provisions of ss134(2) and (3) - to be an eligible business, regard can be had to future results.
Migration Act 1958 – section 134
Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Hope v. Bathurst City Council (1980) 144 CLR 1
Stone v. Commissioner of Taxation [2003] FCAFC 145
REASONS FOR DECISION
1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Respondent of a copy of the decision that was in fact made, the Respondent pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Respondent a statement in writing of the reasons of the Tribunal for its decision.
2. The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service. Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.
3. The said transcript is annexed hereunto and furnished to the Respondent and to the Applicant as it is the reasons for the Tribunal's decision.
I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:
Signed: (K. Wong)
....................................................................................……………………………….Associate
Date of Hearing 3 October 2003
Date of Decision 3 October 2003
Counsel for Applicant Mr S. Gerber
Solicitor for Respondent Ms S. Goodman, Blake Dawson Waldron
ADMINISTRATIVE APPEALS TRIBUNAL
Matter No N02/603
By MR D. ALLEN, Senior Member
EMILIO JOSE GANHAO and MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
SYDNEY, FRIDAY, 3 OCTOBER 2003MR ALLEN: By application made the 3rd day of May 2002 the applicant sought review of a decision by the respondent to cancel his business skills visa with effect from 3 April 2002. As a result of the cancellation of the applicant's business skills visa, the subsidiary visas issued to his wife and two children were also cancelled but those cancellations are not before me. Additionally, a question had been argued regarding the time of cancellation but the decision of the Full Court of the Federal Court in Teo v The Minister for Immigration and Multicultural and Indigenous Affairs (2003) FCAFC 53 results in that question now being regarded as decided adversely to the applicant.
The applicable legislation is section 134 of the Migration Act which reads inter alia:
1. Subject to subsection 2 and 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 writ of notice given to its holder if the Minister is satisfied its holder, (a) has not obtained a substantial ownership interest in an elligible 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 elligible business in Australia.
Subsection 2 reads:
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 elligible 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.
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Subpara 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 of joint venturers for the business proposals, (c) research that the person has undertaken into the conduct of an elligible 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 elligible business,
(f) the value of ownership interest in elligible 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 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 that 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.
Subsection 10 then goes on to define "elligible business" in the following terms, namely:
Elligible 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 and improved technology to Australia, (f) an increase in commercial activity and competitiveness within sectors of the Australian economy.
The applicant's business skills visa was granted on 23 September 1998. He first entered Australia on 7 December 1998. Prior to the granting of the business skills visa, namely on 25 February 1997, the applicant signed a document acknowledging the requirements of that visa, see document T6 of the documents prepared for the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975. That document states, inter alia, the requirements of subsections 134(10) and
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134(1) of the Migration Act 1958. At paragraph 5 of his statement, which became exhibit A2 in these proceedings, the applicant says:
In November 2000 I decided to move my wife and children to Australia permanently to the residence which we had purchased as our proposed family home on the gold coast. My wife and our two children have been living in Australia permanently and continuously since November 2000 to the present date.
He continued at para 6:
During numerous trips to Australia spanning the three year monitoring period carrying a total of 225 days spent by me in Australia, I was actively involved on each of the visits in furthering my business establishment interests. First, by researching the Australian market for submersible bore hole pumps. Then by establishing contact with potential Australian distributors. Then by preparing a business plan and marketing strategy. Then by having the products tested by a State water authority, establishing an Australian company through which to conduct the business, exhibiting the products at a State Irrigation Trade Exhibition in Queensland and importing products into Australia for testing by wholesale distributors in anticipation of securing sales.
The evidence of the applicant today was to the effect that he has considerable business interests in South Africa. These include a foundry and a pump manufacturing business. Having settled his family in Australia, the applicant began to research the type of business he could establish in Australia. A foundry was not viable, but he discovered that all submersible water pumps sold in Australia were imported. One of his companies in South Africa manufactured such pumps so he began to investigate the possibility of transferring technology to Australia and manufacturing such pumps in Australia. An Australian company, Evolution Pumps Australia Pty Ltd, was incorporated on 20 July 2001.
The applicant is the sole shareholder in this company. The applicant then caused to be prepared a three year plan for that company - see document T15. The applicant's evidence was that he had exhibited at an irrigation exhibition in Toowoomba in July 2001, and had also entered into negotiations with Australian importers of submersible water pumps, namely Onga Pumps Pty Ltd, Davies Australia Pty Ltd, Monopumps Australia Pty Ltd, Sunstar Electric Pty Ltd. Basically, the applicant's evidence can be reduced to stating that he has attempted to persuade the various companies to switch from their current suppliers to his pumps.
To this end, he has supplied pumps from his South African company for
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testing purposes but until such time as he has firm orders, there is no point in setting up manufacturing premises in Australia. In cross examination, the applicant conceded that Onga Pumps had said they are not interested in his pumps. Davies Australia Pty Ltd were the most promising but no indication had yet been obtained from Sunstar Electric. Monopumps will negotiate once they set up fully in Australia. Apart from these activities the applicant has not undertaken any other business activities in Australia. Currently the applicant owns three properties in South East Queensland. His family reside in one and the other two are investment properties.
Although the investment properties would be available as a source of funds, passive investments are not to be regarded as business activities - see Migration Series Instruction 133, paragraph 4.5.1G. It is, of course, trite law that the date at which the applicant's business activities are to be considered is the date of cancellation. In this case, 3 April 2002. I also adhere to what I said in Re Ong v The Minister (2003) AATA 178, namely that it is the business activities of the applicant in Australia that must be examined. In this regard, as was pointed out by Mason J as he then was, in Hope v Bathurst City Council 144 CLR 1, and the Full Court of the Federal Court in Stone v Commissioner of Taxation (2003) FCAFC 145 at para 74, that to carry on a business requires that there be a commercial enterprise in the nature of a going concern.
That is, activities engaged in for the purpose of profit on a continuous and repetitive basis. I am not satisfied that Evolution Pumps Australia Pty Ltd was engaged in business activity in Australia as opposed to undertaking steps prior to engaging in business. Subsections 134(2) and (3) import certain ameliorating provisions into the decision whether to cancel or not. Considering these provisions I find, (a) that the applicant has developed business proposals. I also find that it is reasonable that no factory was set up in Australia until firm orders had been obtained.
On the other hand, the scheme of the Act is that a person holding a business skills visa should himself come to Australia and set up a business, that is to say, a commercial entity as a going concern, (b) as yet, there are no partners or joint venturers, (c) the applicant is, or has been undertaking research, (d) the applicant has spent the majority of the period outside Australia attending to his considerable business activities in South Africa, (e) assets have been transferred but today none have been appropriated towards an elligible business, (f) the applicant does have a substantial interest in a business in Australia, the question being is it an elligible business, (g) business activity has been investigatory or preparatory to ascertain if business could be done rather than the applicant doing business.
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A difficult question is whether the applicant has complied with paragraph 134(2)(b) in that as far as any elligible business, a part of the activity undertaken by the applicant or at his discretion and direction has taken place outside Australia. A most interesting document is T29 which is dated 10 December 2001. It reads, inter alia, that an officer of the Department of Immigration spoke with the applicant that day. He was advised that in order for his visa not to be cancelled he would need to demonstrate he had made a genuine effort to get into business. The memorandum concludes by the officer stating Mr Ganhao appears genuine in his intention to be in business in Australia and appears to be sourcing the "right" company.
The reservations held by the author of the document are also held by me, namely, that I believe that the applicant has been genuine in seeking to establish a business in Australia but at the time of cancellation of his visa, it was at an exploratory state or to use a word which, in turn, was used in submissions it was "visionary" as opposed to "reality". Subsection 10 of section 134 defines elligible business as meaning one which the Minister reasonably believes will fulfil the criteria. There is no doubt that paragraphs (b), (d) and (f) of subsection 10 of section 134 would be fulfilled if the applicant's pumps were to be manufactured in Australia.
On balance, I think that the applicant has been genuine in his activities although he could have been better advised as to the requirements of his visa. I am satisfied that the applicant has complied with paragraph 134(1)(a) of the Act. I am also satisfied that he has complied with paragraph 134(2)(b) in that although he has not been actively participating in the day to day management of the elligible business in Australia, the elligible business is not an ongoing day to day activity. When in Australia, he has taken active steps to promote the business which is an elligible business only by virtue of a finding that I reasonably believe that if established, certain outcomes as outlined in paragraphs (b), (d) and (f), subsection 10 of section 134 will follow.
I do consider he will continue to make genuine efforts. I also have regard, as I said to the ameliorating provisions, subsections 2 and 3, and do not put to one side the fact that subsection 2 is cumulative by the use of the word "and". On balance, however, I consider that the decision under review should be set aside.
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