Gu and Minister for Immigration and Citizenship

[2008] AATA 789

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 789

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0212

GENERAL ADMINISTRATIVE DIVISION		)
Re		XUDONG GU

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal M J Carstairs, Senior Member

Date4 September 2008

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

....................[sgd]..........................

SENIOR MEMBER

CATCHWORDS

IMMIGRATION AND CITIZENSHIP – Australian citizenship – residence requirements – whether applicant was engaged in activities beneficial to interests of Australia – decision under review affirmed

Australian Citizenship Act 2007 (Cth), s 21
Australian Citizenship (Transitionals and Consequentials) Act 2007 (Cth), sch 3, Pt 1 7(2) & 7(8)

Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Ho and Minister for Immigration and Ethnic Affairs (1994) 34 ALD 664

Re McCarthy and Minister for Immigration, Local Government and Ethnic Affairs

(1993) 30 ALD 447
Re Fraser and Minister for Immigration, Local Government and Ethnic Affairs (AAT S91/205, 15 October 1991)

REASONS FOR DECISION

4 September 2008    M J Carstairs, Senior Member

1.      Xudong Gu is a Chinese citizen and Australian permanent resident, who lives in China with his wife and son, where he works as the Vice General Manager of an Australian company, Gemstone Tyres Pty Ltd.  The Minister’s delegate refused his application for Australian citizenship because Mr Gu’s activities outside Australia were not considered to be “beneficial to the interests of Australia”.

LEGISLATIVE AND POLICY BACKGROUND

2.      The Australian Citizenship Act 2007 (the new Act) came into operation on 1 July 2007. Mr Gu lodged his application on 11 May 2007 (prior to the commencement of the new Act) but a decision had not been made by 1 July 2007. Under item 7(2) of Schedule 3 of the Australian Citizenship (Transitionals and Consequentials) Act 2007 (the Transitionals Act) Mr Gu’s application became a “new application” which was taken to have been made under s 21 of the new Act. For these applications undetermined before the new Act came into effect there were certain modifications that could be applied. Some of these are to be found at item 7(8) of Schedule 3.

3. Sub-item 7(8)(1) of Schedule 3 of the Transitionals Act provides:

(8)In applying section 22 of the new Act to a new application covered by subitem (2), subsections 22(1) to (2), (4A) and (5A) of the new Act do not apply and the following subsections of section 22 of the new Act apply instead:

(1)For the purposes of section 21, a person satisfies the residence requirement if the person has been present in Australia as a permanent resident for:

(a)a total period of at least 1 year in the period of 2 years before the day the person made the application; and

(b)a total period of at least 2 years in the period of 5 years before that day.

4. Where a person does not satisfy the time requirements, the Transitionals Act allows for a discretion, now provided for in sub-item 7(8)(4) of Schedule 3:

(4)The Minister may treat a period as one in which the person was present in Australia as a permanent resident if:

(a)the person was engaged in activities during that period that the Minister considers to be beneficial to Australia; and

(b)the person was not present in Australia during that period but was a permanent resident during that period.

5.      The relevant policy, which provides guidance in relation to the interpretation and exercise of the powers under the Act, is contained in the Australian Citizenship Instructions (ACI).  The Tribunal should have regard to these instructions unless there is good reason not to do so[1].  In relation to the discretion in sub-item 7(8)(4) of Schedule 3 of the Transitionals Act, the relevant paragraphs of the ACI are set out in Chapter 5:

[1]        Re Drake and Minister for Ethnic Affairs (No 2) (1979) 2 ALD 634.

…Periods during which the applicant was a permanent resident and was outside Australia engaged in activities beneficial to the interests of Australia may be treated as periods in which the applicant was present in Australia. This discretion applies to both residence requirements (ie both “2 years in the last 5” and “1 year in the last 2”).

As a matter of policy:

• the applicant must have been personally engaged in activities overseas beneficial to the interests of Australia, not just, for example, the company or organisation for which the applicant worked; and

•the applicant must have been engaged in a series of activities, not just a one-off transaction; and

•the activities must also be during the relevant period/s under consideration; and

•the activities must have been Activities ‘beneficial to the interests of Australia’ during the relevant period/s. It is not intended that the provision apply where there are no current benefits irrespective of whether benefits may accrue in the future.

Policy also states that the discretion will usually only be exercised if the applicant is in Australia and was either:

·          required to work overseas by a Federal, State or Territory Department, semi-       government authority or private employer; or

·          self-employed and frequent travel abroad was essential to the successful operation of their business, whether for an extended period or on a regular         short-term basis; or

·          engaged overseas in activities of a social, cultural, economic or political     nature which are clearly beneficial to the interests of Australia and are widely      recognised as such either by:

•the Australian community generally; or

•prominent persons associated with the applicant’s field of endeavour (for example, persons engaged in aid programs, artists and entertainers of world standing).

In assessing whether activities are beneficial to the interests of Australia, consider the following:

·It requires “something in the nature of activities which provide some advantage to Australia, whether commercial or otherwise.  The concept necessarily connotes some public interest of Australia … and means more than the private interests of the (applicant).  The section requires some objective benefit to Australia” (Federal Court in Roberts).

·It requires “something in the nature of activities which achieve recognition of Australia or of Australian achievements or commercial advantage for Australia, or increase the international respect and goodwill for Australia … (it) refers to the public interests of Australia” (AAT in Fraser).

·“The claim that the applicant’s employer has enhanced the reputation of its Australian parent company and Australian companies in general, falls short of demonstrating that the applicant’s activities were beneficial to the interests of Australia” (AAT in McCarthy).

·“There should be a close nexus between the overseas activities and the subsequent benefit to Australia to exercise the discretion” (AAT in Tsui).  The benefit should be largely as a result of the applicant’s activities and must not be residual, remote, indirect or speculative (For example, AAT in McCarthy).

WERE MR GU’S ACTIVITIES OUTSIDE AUSTRALIA BENEFICIAL TO AUSTRALIA?

6. Mr Gu did not dispute that at the date of his application for citizenship he had spent 226 days in Australia in the preceding two years, and 325 days in the preceding five years. This means he does not meet the residency requirements of sub-items 7(8)1(a) and (b) of Schedule 3 of the Transitionals Act.

7.      Mr Gu stated that he was granted a sub-class 845 (established business in Australia) visa on 26 February 2001 and became a permanent resident from this date.  He now holds a resident return visa valid to 2011. 

8.      It seems that Mr Gu commenced as an employee of Gemstone Tyres in 2001, and in 2002 the company directed him to work primarily from China.  In 2003 he was made Vice General Manager and given a 10% share in the company[2].  Mr J Guo, General Manager of Gemstone Tyres, said Mr Gu had substantial previous experience in the tyre industry in China.  He described Mr Gu’s position as sourcing new products and supervising suppliers in China, ensuring quality maintenance and the reliability of the company’s products. 

[2]        Exhibit A2.

9.      In an affidavit dated 4 April 2008, Mr Guo confirmed that Mr Gu had been involved in product sourcing and in maintaining face-to-face relationships in China that have allowed the company to prosper and, as a result, increase employment in Australia. He attributed much of Gemstone Tyres’ success to Mr Gu’s special understanding of the way business is done in China.  Mr Guo pointed to increased staffing levels at the company’s Sydney and Brisbane offices.  He observed that there had been only six employees in 2003/2004 and this had increased to ten employees in Brisbane and seven in Sydney (the Sydney office opening in 2006).  Mr Guo also pointed to an increase in company turnover from about $A12m in 2006/2007 to at least $A15m in 2007/2008.  The company has over 800 customers and supplies to major outlets such as Bob Jane T-Mart and the Tyrepower Group.

10.     It seems, however, that on 25 February 2008, Mr Gu relinquished his shareholding in Gemstone Tyres.  Mr Guo said that he had approached Mr Gu to give up the shareholding as he envisaged difficulties with Mr Gu not being in Australia when Gemstone Tyres needed to purchase industrial land for expansion.  However Mr Guo said that he saw no impediment to Mr Gu again becoming a shareholder in the future. 

11.     Mr Guo had confirmed in his affidavit that Mr Gu is paid an annual salary of $A50,000 (which was also Mr Gu’s evidence), however he could not explain why the payroll records[3] showed Mr Gu as a part-time employee, who was paid only $A26,397.  Both Mr Guo and Mr Gu said that the benefits to Australia of Mr Gu’s activities with Gemstone Tyres were that Mr Gu has made such effective contacts in China that Gemstone Tyres’ market share has increased and this has resulted in greater employment within Australia.   The tyres supplied from China have led to a better and cheaper product, with effective warranties.  Mr Guo in particular emphasised that Mr Gu’s work in China makes possible the provision of tyres into the Australian market at prices not otherwise available. 

[3]        Exhibit A8.

12.     Mr Gu owns his home in Brisbane.  In March 2007, Mr Gu’s wife and son, left Brisbane, and moved back to China so that the family would be together and to ensure that the son would become a fluent Mandarin speaker.  Mr Gu explained that his son attended pre-school and grade 1 in Australia and has completed Grade 2 in China.  Mr Gu intends that his son will return to Australia and will be enrolled at Brisbane Grammar School from grade 5.  His wife and son have come back to Brisbane during Chinese school vacations.  Mr Gu said that they all regard Brisbane as their second home.

13.      When asked whether he intends remain in China, Mr Gu responded that this depends on where the company requires him to work.  Mr Gu also said that he and a friend in China are involved in a joint venture restaurant business in Tianjin.

14.     In relation to whether a person has engaged in activities outside Australia that are beneficial to the interests of Australia, there must be some objective public benefit to Australia, rather than the private interest of the person[4].  In addition, the benefit should be largely as a result of the person’s activities at the time they were undertaken, rather than a time in the future and should not be remote, indirect or speculative[5].  In Re Fraser and Minister for Immigration, Local Government and Ethnic Affairs[6] the Tribunal held that “activities beneficial to the interests of Australia” refers to the public interests of Australia such as activities that will achieve recognition of Australia or increase international respect and goodwill for Australia.

[4]        Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82 at 87.

[5]        Re McCarthy and Minister for Immigration, Local Government and Ethnic Affairs (1993) 30 ALD 447.

[6]        AAT S91/205, 15 October 1991.

15.     In Re Ho and Minister for Immigration and Ethnic Affairs[7] the Tribunal held that the discretion was not intended to be an alternative to the residence requirements, but to provide some flexibility for exceptional circumstances.   

[7] (1994) 34 ALD 664 at 671.

16.     Taking these matters into account and applying the ACI, the question is whether Mr Gu’s activities may properly be characterised as furthering his private interests, or those of the company rather than being of some objective benefit to Australia.  In that respect the evidence which Mr Gu provided by way of his travel diary for 2001 to 2006 is instructive[8].  This document detailed Mr Gu’s many visits to tyre producers and suppliers in China, to discuss Australian specifications, and to obtain estimates of production times and to oversee delivery.  The tenor of the diary was its emphasis on the company’s requirements to service the Australian market, and also the important role that Mr Gu’s personal contact had in oiling the wheels of commerce, ensuring the best negotiated outcomes in dealings with suppliers.  I have no doubt that Mr Gu’s presence in China made production and deliveries happen more smoothly.  However there was nothing in the diary material that satisfied me that the focus of these activities was of public benefit to the interests of Australia.

[8]        Exhibit A1.

17.     I accept that Mr Gu has been a valued employee of Gemstone Tyres who has used his knowledge of the Chinese market and experience in the tyre industry to assist the company’s growth.  However on the evidence before me I am not convinced that there is a direct link between Mr Gu’s activities in sourcing new products/quality control of existing products and the growth in the number of the company’s employees in Australia, some of whom appear to have been on short-term contracts.  Similarly Mr Guo was unable to explain the discrepancy between Mr Gu’s stated salary and the amount specified in the payroll records, which casts doubt on the credibility of the evidence about Mr Gu’s contribution to the company and to the provision of tyres in the Australian market.

18.     On balance it seems to me that the activities in which Mr Gu is engaged are directed primarily towards his own private interests and to the benefit of the company.  Mr Gu has not demonstrated that he has contributed in any objective way to the overall interests of Australia. 

19.     For these reasons I am satisfied that at the date of his application for citizenship Mr Gu was not engaged in activities outside Australia that were “beneficial to the interests of Australia”.  Therefore, the period that Mr Gu was outside Australia cannot be treated as a period in which he was present in Australia for the purpose of the residence requirements. 

DECISION

20.     The Tribunal affirms the decision under review.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member

Signed:         ............................[sgd]....................................................
  Joan Torbey, Associate

Date of Hearing  7 July 2008
Date of Decision  4 September 2008
Counsel for the Applicant         Mr F Syme
Solicitor for the Respondent    Clayton Utz Lawyers