Heng and Minister for Immigration and Multicultural and Indigenous Affairs
[2005] AATA 732
•2 August 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 732
ADMINISTRATIVE APPEALS TRIBUNAL )
)No W2004/206
GENERAL ADMINISTRATIVE DIVISION ) Re TECK LIM HENG
Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms L Savage Davis, Member Date2 August 2005
PlacePerth
Decision The Tribunal affirms the decision under review. .........(sgd L Savage Davis).............
Member
CATCHWORDS
MIGRATION – business skills visa subclass 127 – cancellation of visa – Applicant’s failure to obtain a substantial ownership interest in a business in an eligible business in Australia – active participation in day to day management at senior level of business – whether genuine effort made – discretion not to cancel
Migration Act 1958 sections 134, 137
Migration Series Instructions Nos 133
Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Siewi Wang v Minister for Immigration and Multicultural Affairs [2000] AATA 961
Salim and Ors v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899
Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299
Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54
Lau v Minister for Immigration and Multicultural Affairs [2002] AATA 703
Hope v Bathurst City Council (1980) 144 CLR 1
Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997
Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656
REASONS FOR DECISION
2 August 2005 Ms L Savage Davis, Member 1. This is an application by Mr Teck Lim Heng (“the applicant”) for review of a decision dated 10 May 2004 of the delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (“the respondent”) to cancel the business visa issued to the applicant pursuant to section 134 of the Migration Act 1958 (“the Act”).
2. The Documents lodged pursuant to section 37 Administrative Appeals Tribunal Act 1975 were received into evidence (T1-T22/1-156). At the hearing the applicant was represented by Ms Bonnie Robertson Hill of Thao Meng & Associates. The respondent was represented by Ms Laila McPherson of Australian Government Solicitor.
3. Oral evidence was given to the Tribunal by the applicant. Oral evidence was also given by Mr Witold Rosiewicz, Mr Barry Coulter and Mr William McDermaid.
4. The following exhibits were tendered:
· Exhibits A1 – A6 on behalf of the applicant; and
· Exhibit R1 – on behalf of the respondent.
Background
5. On 8 January 2001 the applicant was granted a subclass 127 business skills visa (“the visa”). The applicant first entered Australia on 23 January 2001. On 7 November 2002 the applicant was sent a Survey of Business Skills Migrant – 24 Months form (T14). This was completed and returned to the respondent with an accompanying letter dated 3 March 2003 (T15). On 30 July 2003 the respondent sought further information from the applicant (T16). This was provided by letter dated 16 September 2003 (T17). By letter dated 9 January 2004 the respondent notified the applicant of its intention to cancel the applicant’s visa under section 134 of the Act (T18). The applicant provided further information to the respondent by letter dated 17 February 2004 (T19) and letter and attachments dated 22 February 2004 from Mr Warren Kelly, Thao Meng & Associates (T20). On 10 May 2004 a delegate of the respondent decided to cancel the applicant’s visa and those of the applicant’s family (T2). On 10 June 2004 the applicant lodged an application with the Administrative Appeals Tribunal (“the Tribunal”) for review of the decision to cancel his visa.
Legislation
6. Section 134 of the Act empowers the respondent to cancel a business visa in certain circumstances. The relevant provisions of the Act as applies to the applicant in this case are sections 134(1), (2), (3) and (10) that provide as follows;
Cancellation of business visas
(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b) is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c) does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c) intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c) research that the person has undertaken into the conduct of an eligible business in Australia;
(d) the period or periods during which the person has been present in Australia;
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
(h) whether the person has failed to comply with a notice under section 137;
(i) if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
(3A)Subject to section 135, the Minister may cancel an investment-linked visa (other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(10) In this section:
business visa means:
(a) a visa included in a class of visas, being a class that:
(i)has the words "Business Skills" in its title; and
(ii)is prescribed for the purposes of this paragraph; or
(b) a visa:
(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and
(ii)
that is of a kind prescribed for the purposes of this paragraph; or
(c) a return visa that is granted to a person who is or was the holder of a business permit or business visa;
that is or was granted on or after 17 February 1992.
designated investment has the meaning given by the regulations.
eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a) the development of business links with the international market;
(b) the creation or maintenance of employment in Australia;
(c) the export of Australian goods or services;
(d) the production of goods or the provision of services that would otherwise be imported into Australia;
(e) the introduction of new or improved technology to Australia;
(f) an increase in commercial activity and competitiveness within sectors of the Australian economy.
established business in Australia visa means a business visa a criterion for whose grant:
(a) relates to the applicant having an established business in Australia; or
(b) is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).
family member's visa means a business visa held by a person:
(a) who is or was a member of the family unit of another person who held a business visa; and
(b) who would not have held the business visa if he or she had never been a member of the family unit of the other person.
investment-linked visa means a business visa a criterion for whose grant:
(a) relates to the holding of a designated investment; or
(b) is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).
member of the family unit has the meaning given by the regulations.
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
relevant designated investment, in relation to an investment-linked visa (other than a family member's visa), means the designated investment that was, in deciding to grant the visa, regarded as satisfying the criterion referred to in paragraph (a) of the definition of investment-linked visa.
return visa has the same meaning as in the regulations.
7. Section 134(3) of the Act sets out the matters the respondent may take into account in determining whether a person has made the “genuine effort “referred to in s 134(2). In addition the Migration Series Instructions Nos 133 (MSI), at paragraph 4.5 lists factors to be taken into account by decision-makers in considering whether a genuine effort has been made. They are as follows:
“a.business proposal which is considered genuine, realistic and achievable;
b.formal contract with partners or joint venturers;
c.written evidence of detailed consultations with at least three business advisers (accountant, lawyer, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);
d.physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;
e.transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
f.minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant.
g.minimum A$100,000 business activity as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment, eg, purchase of shares.
h.failure to comply with a notice for information under s 137, ie mandatory monitoring of Australian address and return of survey forms.”
Mr Heng’s Evidence
8. Mr Heng requested that a number of corrections be made to his witness statement dated 23 March 2005. They were that his daughter had attended St Hilda’s School, not St Brigid’s; that he had entered Australia first on 27th January 2001 and not the 23rd, and that he had had exhibition stands in Australia since 2002, firstly in Melbourne, in Sydney, (2003) in Melbourne, (2004) and again in Sydney in 2005. (Exhibit A3). Mr Heng told the Tribunal that he had two companies in Singapore, Pacific Packaging Pty Ltd (“Pacific”) and Jickson Corporation (“Jickson”) that he had started some 30 years ago. Pacific is a holding company that deals in aluminium foil, PVC film, baking paper and greaseproof paper. Jickson provides private labour. In addition, they have a brand name, Lacy’s. Mr Heng said they represented manufacturers from the UK, America, Middle East, Philippines, Malaysia, Australia and New Zealand. Mr Heng said in early 2003 they registered Pacific Packaging and Trading Pty Ltd (“Pacific Trading”) in Australia. Pacific Trading is owned by Mr Heng and his wife who are both the directors and shareholders. Mr Heng said that he managed the businesses in both Australia and Singapore on his own.
9. Mr Heng said that his original plan was to set up a business in Australia and sell his Singaporean companies. Mr Heng said that they started looking for buyers in 2000 but so far they have not found a buyer. He believed this was because of the currency crash, September 11, SARS, the Iraq war and the bird flu. Mr Heng referred to Exhibit A2, a retainer letter from CDI Pinnacle dated 1 March 2005 as evidence that he was attempting to sell his Singaporean businesses. Mr Heng said he had begun speaking to CDI Pinnacle in April 2004. Mr Heng said he believed his businesses were worth more than $7 million. He wanted to sell rather than merge the companies with another company because that would involve him having to spend more time in Singapore. He would rather sell everything and concentrate on his interests in Australia. In Australia he could buy food produce and export it to his present customers because he had been for so many years in the grocery line of food and non-food items. Mr Heng told the Tribunal that he and his family did not make arrangements to move to Australia until 2003.
10. Mr Heng said Miss Susan Ng Song Keat had been an auditor and consultant for both his Singaporean companies for more than 20 – 30 years. Mr Heng purchased the McMahon Honey brand in 2001. It was purchased by Jickson. He believed he could export it everywhere because he was the only one selling it in Singapore. Subsequent to buying it the shortage of honey occurred so the price was very high and it was impossible to sell at those prices. Mr Heng said when he approached Mr Rosiewicz his idea was that he would do the marketing and oversee the running of the company. He thought they would need at the most 5 workers.
11. Mr Heng was referred to T7, the Business Skills Profile: Business Owner Form 1136 from the Department of Immigration and Multicultural Affairs. Mr Heng said it was completed by his agents in Sydney. Mr Heng confirmed his answer to Question 17 (T7/58) which states that; “Initially I intend to set up a business to Export Australian Products to the countries which I am currently doing business with. I also intend to act as a consultant to help any companies in Australia to start a packaging company in the field of aluminium foil and cling film for the food industries. Secondly, I am going to establish a partnership company in Victoria. Thirdly, I intend to set up an investment portfolio of properties in Australia.” Pacific Trading was how Mr Heng said he was setting up the investment portfolio. He also purchased an investment property in Melbourne which was currently losing money and was worth less today than when he purchased it. He said he was not informed that the Department would contact him and ask questions regarding his business but was aware that there was a timeframe under which he had to establish an Australian business.
12. Mr Heng was referred to documents 11A (Exhibit A5) and 10A (Exhibit A4) which documented the export of Australian honey from Pacific Trading to his Singaporean companies. One was for 900 cartons of honey valued at $36,000 which Mr Heng said he sourced himself to go to Jickson. Mr Heng said that anyone who contacted Pacific Trading in Australia spoke to his wife and would then be referred to him. He said her role was to basically take a message and pass it on to him. Mr Heng said as honey prices have become more reasonable he would be able to use Pacific Trading to trade and export. Mr Heng said he called the Australian company Pacific Packaging and Trading Pty Ltd because it would be recognizable by clients of his Singaporean company. His Singapore company exports to Malaysia, Brunei, Indonesia, Philippines, Sri Lanka, Mauritius, Pakistan, India, Papua New Guinea, Fiji and local markets. Mr Heng said that the reason that he delayed major business plans in Australia was because there wasn’t honey to buy and it was very expensive. Mr Heng referred to an undated proposal which he said was with a Mr Andrew Yu to commence a joint venture with Pacific Trading (T20/136-138). He said that they were having ongoing discussions but these had not proceeded because they needed to secure supply at a reasonable price.
13. Mr Heng said that he had been buying products from AEP in New Zealand for some 5-6 years and was in contact with them once or twice a month. Mr Heng said he did not realise he could have exported or been supplied PCV frames by AEP from Australia until mid 2004. He believed that they currently had orders for about 7 containers with AEP which is worth more than $100,000. This was being done through Pacific Trading.
14. Mr Heng said his Australian business plans were put on hold because of events such as September 11, 2001. By 2002 he had begun steps to establish the business by buying the honey brand McMahon and by participating in exhibitions. He said this was indicative of his genuine intention and was why be bought property in Perth when the family moved here. He made a mistake when he answered “no”, indicating that he had not established a business or was engaged in a business on the 24 month Business Survey form (T15/91). Mr Heng said first that the reason he answered in this way was because he was still managing the business in Singapore. He then agreed with his representative’s suggestion that it had been because of events such as September 11, SARS and the bird flu. Mr Heng said he went to food and hotel exhibitions all over the world to promote their range of products, including McMahon Honey and he agreed, when asked by his representative that he always tells the people that he is able to source Australian food and non-food products.
15. Mr Heng denied that he registered Pacific Trading Company Pty Ltd just so that he could get the visa. Mr Heng said that since late 2004 he had started to order and export AEP clean film via Australia rather than via New Zealand. Mr Heng agreed with his representative that the BAS showed that his genuine efforts were now coming to fruition showing that export sales for Pacific Trading for the December quarter ending 2004 as $106,687. Mr Heng said they were expecting significantly greater sales in the next quarter, perhaps in excess of $300,000 for January to June 2005. Mr Heng agreed that no contract had not been signed with Mr Andrew Yu of A & J. Prior to the cancellation of his visa he had however invested close to $250,000 in purchasing the McMahon Honey brand and buying and renovating a property. Mr Heng said he was responsible for the day-to-day decisions and management of Pacific Trading and no one else did any work for the company.
Cross Examination of Mr Heng by Ms McPherson
16. Mr Heng said that when he applied for his visa his son was studying in Australia. He wanted to come to Australia to give his family a better life and start a business in Australia after selling his companies in Singapore. His main source of income is from his Singapore companies which operate out of the same premises and are essentially run as one entity, although one is a trading company and the other packaging. Jickson was the bigger of the businesses and does the marketing for Pacific in the Singapore market. He was trying to sell both of them. Mr Heng said he commenced buying from AEP in Australia when Mr Boyle moved to Sydney. Mr Heng said he works 8-12 hours per day running Jickson and Pacific in Singapore. He spent maybe 2, 3 or 4 hours two or three times per week on Pacific Trading, the Australian business.
17. When he was first granted his visa he started surveying the market but then September 11 occurred and that held him back. Subsequently, he continued to search for business opportunities and purchased the McMahon brand although he conceded that he had been dealing and buying McMahon Honey for several years. He agreed McMahon Honey was an asset of Jickson. Mr Heng thought that perhaps he had made a mistake when he answered “no” to question 66 on the Survey of business Migrants (T15/83-92).
18. Mr Heng said he had had a long relationship with Mr Coulter of Barry Coulter and Associates although he did purchase from other companies apart from Mr Coulter’s. For example, he has had one shipment from Demaco in 2003 although he agreed that it was Jickson who had purchased from Demaco. He met Mr Rosiewicz by surveying the market, finding his product on the market and calling the number on the back of the jar. Mr Heng said he thought he contacted him about 18 months ago and arranged a meeting at his home. He thought they met for about half an hour. It was a casual discussion and at that time Mr Rosiewicz said that due to the high price of honey and its short supply the honey market was difficult. He did not pay him for this half hour of advice. Mr Heng said he met him next just last week. He was not sure whether it was last Wednesday, Thursday or Friday. He said they continued their discussions about a joint venture and supply of honey. Mr Rosiewicz told him honey is now quite cheap and Mr Heng said that he proposed that he would look for equipment and Mr Rosiewicz would look for a property. Mr Heng said they were still just talking about things although he was very serious about it.
19. Mr Heng said he attended his first Trade Fair in 2002. He said his agent drafted the business proposal (T20/136-138) after discussion with him and although undated, it was probably drafted about February 2004. It was a true and actual reflection of his plans. Mr Heng was referred to paragraph 3 of that proposal “Business Premises”. Mr Heng said he had visited some places where they could set up a factory and recalled looking at a property at Canning Vale. It was not appropriate because the warehouse was old and unhygienic. He said he had been looking for a place since the beginning of 2004 but had not yet found anywhere.
20. Mr Heng was referred to T20/139. He confirmed Mr Andrew Yu is a customer of his and that Mr Yu’s company A & J Australia Pty Ltd is a distribution trading company. He said he had met Mr Yu in 2002 and done business with him on 4 or 5 occasions. He was also looking for warehousing for converting products. Mr Heng said he had had contact with him since the letter of 12 February 2004 from Mr Yu confirming negotiations between them (T20/139), and he was still supplying him. Mr Heng said he visits him two or three times a year. He said there was no documented correspondence in regard to the development of the proposal with Mr Yu – it was all done in person. He estimated that the capital input would be $150,000 - $200,000 may be on a 50:50 basis. He said that if it got going he would assist in the set up. He said that they still could not find a suitable property.
21. Mr Heng said that if his business visa was cancelled he would apply again because he still intends to sell the Singaporean companies. Mr Heng said that his son who lives in Sydney does not live in a property owned by him. His son helps from time to time at the exhibitions. He said that they have not engaged an accountant in Australia because everything was done through Singapore. He didn’t think that his auditors had filed company tax returns and financial statements yet for Pacific Trading. He did not have a copy of any financial statements. He said although he had no statements he thought that there had been no profit until 2004/2005. These were profits from the transaction of purchasing honey products from AEP and on selling them to his Singaporean company. Mr Heng said Pittmans dealt with all filing of documents with the Australian Securities Investments Commission. He said a bank account had been opened with Westpac. Mr Heng was not sure whether bank statements were available for the hearing.
22. Mr Heng said for transactions now, money is transferred from the Singaporean company to the Australian company’s bank account and then paid to AEP. Mr Heng agreed that he had been purchasing from AEP directly so did not need the Australian company to do that, but he had wanted to start Pacific Trading so that if he sold the company in Singapore he could use a company with a similar name. He said that the honey that was purchased was also sold to his Singaporean company. Mr Heng was referred to Exhibit A6. Mr Heng said that this was prepared by his accountant who is in Victoria. Mr Heng said the property he has in Melbourne has been leased to a student and is running at a loss. He agreed there was no return on it. He has a residential property in East Perth where his wife and daughter lived. He said because of the cancellation of his visa, his daughter felt insecure so she has been moved to an English boarding school where she had been since January 2005. Mr Heng said they have other family in England, including nephews and nieces. He also said he had a subsidiary company in London but closed it at the end of last year.
23. Mr Heng said that his meeting with Mr Rosiewicz lasted no more than an hour, and the second meeting last week lasted about two hours. Mr Heng insisted that although they had met for some 3 hours only he was serious about going into business with Mr Rosiewicz. There was no documentation or feasibility plans. Mr Heng said he had never been involved personally in the honey business, for example, in the processing of honey, but had visited processing plants. Mr Heng said his wife has also moved back to Singapore and so at this time Pacific Trading is controlled from Singapore. It has no employees. Mr Heng agreed that the arrangement with CDI Pinnacle to look for purchasers of the Singapore businesses was only signed on 1 March 2005 and so far he had not paid them any commission. Mr Heng said Mr Rosiewicz would source the honey if they set up business together. Mr Heng agreed that apart from one order, everything that had been bought by Pacific Trading had gone to his company in Singapore for conversion and then exporting on.
24. Mr Heng was referred to the McBride invoice (Exhibit A7). This was a sale which involved a transfer directly from Pacific Trading to Manila for McBride Packaging. The invoice amount was nearly US$30,000. Mr Heng said he thought they had more orders for several more containers. Mr Heng said the business plan that his agent wrote was based on what he had told him. Mr Heng said he rarely writes things down; he has it all in his head based on his 30 years of business experience. He never had a business plan when he was setting up his Singaporean companies. Mr Heng said that he believed he had done substantial research and put in effort. The reason it hadn’t come into fruition was that the cost of raw materials was very high. Mr Heng said he needed the Australian company to fulfil his visa requirements. His Singaporean companies don’t need the Australian company. He needed to build up the Australian company so when he sells the Singaporean companies he has a base already. Mr Heng said he was expecting to bring his daughter back to Australia once the matter was finalised.
Mr Witold Rosiewicz’s Evidence
25. Mr Rosiewicz told the Tribunal that he was an apiarist and had been for about 15 years. He was involved with collecting and selling of honey and he considered he had a good knowledge of the industry. He said Mr Heng had contacted him about 18 months ago and told him he wanted to set up a honey factory in Western Australia to package and export honey overseas. Mr Rosiewicz advised him that currently there was a big shortage of honey and it would be better to delay his plans. He said the situation was now much improved. Mr Rosiewicz said that he understood Mr Heng was offering to invest money in a factory which Mr Rosiewicz would run. He did not know whether Mr Heng had any previous experience in the honey business. He said that they talked about employing about 3 people with a view to largely exporting the honey overseas.
26. In cross examination, Mr Rosiewicz confirmed that he thought Mr Heng visited him in about July 2003. He understood he located him because Mr Rosiewicz’s name and address and telephone number were on the back of honey that he packaged. They met on two occasions – once in July 2003 and then a couple of weeks ago. He said he was not paid for the advice he gave. Mr Rosiewicz was not sure of the name of Mr Heng’s business, but he thought it had a factory in New South Wales. He understood that Mr Heng also had a company in Singapore. Mr Rosiewicz said that the downturn in honey was the worst in his memory. He said that Mr Heng had not purchased any honey from him or signed any contracts or agreements with him, there was nothing on paper. He said the second of their meetings was about two weeks ago and lasted 1½ to 2 hours. The meeting in 2003 lasted about 2 hours. Mr Rosiewicz said that they discussed the cost of land and facilities and were talking about expenditure in the vicinity of $300,000. He said this figure was just a rough guess about possible costs.
Evidence of Mr Coulter
27. Mr Coulter said he was the principal of Barry Coulter and Associates and had known Mr Heng for approximately 20 years. He had got to know him through the honey trade, specifically by exporting honey to Mr Heng in Singapore. Mr Coulter said he also dealt in dairy products. He said Mr Heng purchased the McMahon Honey brand from him in 2002. Mr Coulter said that he hadn’t noticed any changes in his dealings with Mr Heng since he had been granted the Australian visa, but he did know he had set up an Australian business and he thought that business had placed an order through him for another container and that the payment was to come from Australia. Since honey prices had come down he believed Mr Heng could get a viable export business going. Mr Heng had mentioned his plans to establish a honey processing plant in Australia a while ago but he didn’t know how far the plans had gone. He agreed that he had had discussions with him along those lines and he was sure Mr Heng had talked to other people.
28. In cross-examination Mr Coulter said he thought he first met Mr Heng in Singapore. He said Mr Heng had been purchasing honey from his company and from a previous company he had, for some 20 years. Mr Coulter agreed that McMahon Honey brand had been sold to Mr Heng through his company Jickson. He said the honey in McMahon Honey could be from any part of Australia although primarily it had been coming from Victoria. Previously Mr Heng had been buying pre-packaged honey for the McMahon brand label from him, now it is sold directly to him from the manufacturers. Mr Coulter said he gets a commission but does not have anything to do with the negotiations. He said he has recently sourced honey for Mr Heng in Victoria. He said that he noticed that the last transaction that they did some months ago was paid by cheque from Western Australia, rather than from Singapore by telegraphic transfer as in the past. The last time he recalled being paid from Singapore was about 12 months ago. Mr Coulter said that he has discussed a few other things with Mr Heng apart from the honey industry relating to his two companies in Singapore. Mr Coulter said he probably spoke to Mr Heng a couple of times a month and in the last 2 or 3 years had probably sent 3-4 containers of honey a year to one of his Singaporean companies. He said because of the high cost of honey this had stopped and had only started again recently with the shipment he had referred to earlier.
29. Mr Coulter said that even when not trading in honey they kept in touch and probably spoke 2 or 3 times a month. He believed Mr Heng’s activities would promote Australian honey and the export of Australian honey. He said that the McMahon brand has a very good name in South East Asia and was voted the best honey in South East Asia at one stage. Mr Coulter said that Mr Heng paid $60,000 to purchase the brand name.
Mr McDermaid’s Evidence
30. Mr McDermaid told the Tribunal he was the General Manager of AEP Industries in Australia in the Resinite Division, that is the PVC division. He has held this position for 14 years. He had known Mr Heng for 6 or 7 years. He was also the General Manager of New Zealand Resinite Division which has been exporting to Asia for probably close to 10 years to Mr Heng. He had visited Mr Heng’s operations in Singapore and met with him a number of times at trade shows. He had had discussions with him and understood he wanted to relocate to Australia and set up a business here. Originally this was, he understood to be located in Melbourne but subsequently Mr Heng thought it was better to operate out of Western Australia. Mr McDermaid said they started trading through the Western Australian office of Pacific Trading about 12 months ago. Mr McDermaid said he had discussions on a number of occasions with Mr Heng about the market for PVC both in Australia and New Zealand. In Asia they sell cling wrap via companies such as Mr Heng’s. He said Mr Heng would be their biggest client in this area in Asia. He said there was a general decline in Asia, although not a complete decline, but a quieter market following SARS and September 11. He said their Australasian Sales Manager, Mark Boyle would talk to Mr Heng at least 3 or 5 times a month, depending on whether Mr Heng was in Australia or New Zealand. This was on the phone and perhaps a catch up with him when he was in Perth. Mr McDermaid said that if Mr Heng closed his Singapore and Australian office it would certainly affect AEP.
31. Mr McDermaid said that when Mr Heng attended trade shows he understood he was basically representing himself. He said that Mr Heng made a very large effort at the last trade show to promote his Australian connections and has done so in the last 2 years. He said a large amount of the product he would have on his stand would be Singapore based or overseas based. He understood he had been talking to people about setting up a rewinding operation in Australia. He believed Mr Heng’s intentions of setting up in Australia were serious and that there would be products that AEP would be happy to supply him, although to a degree he would be a threat as much as a customer in some areas of the business. Mr McDermaid agreed with the suggestion that Mr Heng’s proposal if established would grow their business and create more jobs.
32. In cross-examination Mr McDermaid agreed that he had said that Mr Heng’s purchasing of products from AEP changed from New Zealand to Australia primarily because of the movement of one of the senior sales people to Australia. He confirmed that until about 6 months or 8 months ago payment came from Singapore – since then it has been from Western Australia. Mr McDermaid said he understood that Mr Heng was going to sell his Singapore business and relocate to Perth and supply Asia out of Perth. He agreed that if Mr Heng closed his Australian company they would still be able to export to his Singaporean companies.
33. Mr McDermaid confirmed that Mr Heng had been a regular purchaser from AEP for some 10 years, apart from when prices made it more viable to purchase from Europe. Over the years they have charged Mr Heng in Singaporean, US and Australian dollars but they have now settled on Australian dollars. Mr McDermaid said that in the last 6 to 8 months the payments had been coming from Australia as well as Singapore.
34. Mr McDermaid said that there was no documentation in relation to discussions about Mr Heng setting up a business in Australia. He said they spoke and perhaps a general record would have been kept and action points kept by another staff member. There were no actual figures as to potential costings or a business plan. He said they had last discussed the idea for a joint venture about 12 months ago at breakfast at the Sheraton Four Seasons in Sydney, where he told Mr Heng that the joint venture idea was not going to work.
35. Mr McDermaid said that if they had a choice of dealing between Mr Heng’s Singapore Company and his Australian business, they would prefer to work with the Australian company because it overcomes the difficulty with the exchange rate and a fixed price in Australian dollars could be set. He said business had increased with Mr Heng’s Australian company in the last 8 – 12 months. He said that 90% of phone discussions would be directly with Mr Heng. He said he understood the West Australian company was a fledgling business and he was not sure how many people were involved. He said he understood that Mr Heng had submitted orders in the vicinity of $100,000 over the last financial year and he saw no reason why this could change.
Final Submissions
36. Final submissions were received in writing and are reproduced as follows;
Applicants’ Submissions
37. The Applicant submits that there were significant flaws in the Respondent’s actions in the period preceding cancellation, and were it not for these flaws and the frequent changes of the delegate responsible, the cancellation would not have occurred.
38. The Applicant contends that there were factors beyond Mr Heng’s control which made the establishment of an eligible business in Australia far more difficult and time consuming than he previously believed was the case. Nevertheless, he was making genuine efforts to establish an eligible business in the pre-cancellation period and despite the cancellation has continued making such efforts since that time.
39. In the matter of Griffiths and Migration Agents Registration Authority [2001] AATA 240, the Tribunal stated that: “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.” The Applicant therefore draws the Member’s attention not simply to the written and verbal evidence relating to the Applicant’s efforts in attempting to establish an eligible business before cancellation, but also the substantial evidence relating to events after it presented during the hearing.
40. The Applicant contends that the delegate applied the relevant MSI relating to s 134 (1) without having regard to whether the applicant’s situation was covered by Section 134 (2), i.e. that Mr. Heng had made a genuine effort to meet those visa requirements or making effort to satisfy herself that any apparent lack of evidence caused a situation whereby it was the correct and preferable decision to exercise the Minister’s discretion to cancel. It is important to note it is discretion to cancel, not discretion not to cancel.
41. The Applicant also argues that the cancellation of 10th May should not have occurred as it contravenes MSI 2.5. There is a high probability that the cancellation also contravenes s. 135 (4) of the Migration Act 1958, since the decision was taken over 3 years after Mr Heng’s initial entry into Australia.
FLAWS IN RESPONDENT’S PROCEDURES
42. It was submitted that when receiving the completed 24 month survey in March 2003, the Respondent took almost 5 months to inform the Applicant that, in the Respondent’s view, the form and documents provided were insufficient. This did not convey any urgency or priority in this matter on behalf of the Respondent to the Applicant.
43. Secondly, upon receiving documents requested in September 2003, the Respondent took no further action for another 4 months. Instead of asking for further information or stating that the evidence provided was not sufficient, the Respondent took no action for the rest of the year.
44. The Notice of Cancellation accuses the applicant of making “no effort to enter into an eligible business in Australia until February 2003, two weeks before you were due to return your 24 month survey.” (T2, p7) This statement is important as the Respondent acknowledged that an effort was made to enter into an eligible business by the Applicant prior to cancellation. The Respondent has since stated that such efforts were only token, but no such mention was made by the Respondent at the time.
45. The Respondent alleges that the fact an agreement was entered into two weeks prior to the survey as signifies that the effort was a token one. However, no rationale was given for this view either at the time, or since that time. Witnesses at the hearing testified to the contrary that they found Mr Heng’s efforts and intentions about commencing an eligible business in Australia to be both genuine and committed.
46. The Applicant contends that simply because the agreement was entered into two weeks before a business survey was due is not a reason for presuming that such an agreement was not genuine, particularly since Mr Heng has testified that he was unaware of the survey’s existence until immediately prior to the due date.
47. The Respondent did not issue the standard 36 month survey due to be sent out in November 2003 and completed by 20th February 2004 in line with departmental policy. It is important to note that if the survey had been issued, the Respondent would have been unable to cancel the visa after its return, as Mr Heng entered Australia on January 28th 2001 and the visa can only be cancelled if a Notice of Cancellation has been issued within three years from the date of entry. (s134 (9), Migration Act 1958).
48. It was submitted that subsection 134(10) does not state that an eligible business need be registered, profit making or produce appropriate business documents of the type specified by the MSI. Whilst we submit the MSI has its role as a guideline to delegates in clarifying sections of the Act which are ambiguous, we submit that the applicant’s business activities in Australia met the definition given in the Act. He was already developing business links with the International market, exporting Australian goods, and increasing commercial activity within sectors of the Australian economy. These activities might not have been through a duly registered business, but they were undertaken by the applicant nonetheless.
49. The delegate responsible for exercising the Minister’s powers in this matter changed 4 times in the 18 months leading up to the decision to cancel including 3 times from issue of the notice of intent to cancel and cancellation of the visa. One of those times was on the day of cancellation.
50. The Respondent wrote to Mr Heng on the 30th July 2003 (T16, pp104-105) requesting further evidence demonstrating genuine efforts. The Respondent suggested the following documentation which Mr Heng might wish to provide:
(a) evidence of funds transferred to, and (then) currently in Australia available for business activity, (e.g. bank statements);
(b) business plans
(c) business agreements he may have entered into;
(d) evidence of requests for assistance/information re: potential business activity;
(e) registration with any business related agencies;
(f) subscription to any relevant business publications;
(g) evidence of attendance at English language related courses (if appropriate);
(h) copy of title deeds to any business related or other property purchases;
(i) other evidence Mr. Heng might consider appropriate.
51. The Respondent did not indicate what form this evidence should take other than “documentation.” In response to this request Mr Heng provided the following:
(a) Bank statements for various accounts showing the amount of $99,948.88, $20,000 and $90,000 respectively;
(b) A brief outline in his covering letter (T17, p106) of his plans to sell his Singaporean business and establish a similar business in Australia and evidence of his engaging a consultant to that end (T17, p108);
(c) Information on negotiations underway with AEP Resinite and Pliant Corporation and his plans to reach an agreement with them;
(d) Invoice payments to Australian Exhibition Services for the provision of venues and services in promoting the business (T17, p118 – 123);
(e) ABN Registration details, Tax File Number Advice, GST Registration details and Australian Business Register details. (T17, p114 – 117);
(f) No evidence of subscription to business related publications was provided;
(g) As Mr Heng’s first language wasn’t appropriate to attend English classes, so Mr.Heng didn’t.
(h) Copy of letter relating to immanent purchase of East Perth property (T17, p109-110)
52. When referring to bank accounts, the Respondent made no mention of any need for those accounts to be in the name of a business rather than an individual. The only stated requirement was that the funds be available for business activity. It is reasonable to conclude that these funds, while contained in personal accounts, were available for business activity whenever the business – through Mr Heng - needed to access them.
53. The Applicant submits that the Respondent erred in concluding that these funds could not be classified as available for business activity, a key reason given in her decision to cancel. The Respondent failed to state why the business plans and proposals submitted by Mr Heng were not genuine, realistic and achievable.
54. In the notice of the decision to cancel (T2, p6) the Respondent stated that Mr. Heng had provided “no financial statements, signed contracts and/or agreements or any tangible proof that any future business activity may occur,” but noted that negotiations for a joint venture agreement with A & J Australia were taking place, and referred to a letter from the Director of the Australian company confirming this fact. This is a contradictory statement on behalf of the Respondent.
55. The Applicant submits that the delegate erred in not giving weight to the negotiations between Pacific Packaging & Trading and A & J Australia. The Respondent was unable to articulate why these negotiations could not be taken into consideration, other than the fact that the negotiations were in their early stages.
56. In AATA 283, Yam and Minister for Immigration and Multicultural and Indigenous Affairs, the Tribunal found that, on presentation of evidence that negotiations into establishing a business had been conducted: “The negotiations, as at 4 October 2002 (the cancellation date), did not have any characteristics of a business – they were then, and still are, rather negotiations that may, not will, result in a business in the future. However, we find that Ms Yam has made a genuine effort by the negotiations to develop RSS into an “eligible business.””
57. Simply because negotiations are at an early stage is not in itself a reason for believing that those negotiations are a token effort. Nor is an incorrect answer on a survey. In the business monitoring survey, Mr. Heng ticked the “no” box when asked about whether he intended to establish a business in Australia in the next 12 months which, if one reads the answers he gave more thoroughly, is clearly an error. In the space below the question the Applicant declared he had not yet established an eligible business, but was looking into joint venture and other business proposals.
58. Supporting evidence and testimony heard from Mr Heng, Witold Rosiewicz, Barry Coulter and James McDermaid during the hearing indicated that all parties took proposals for future collaboration in business activities very seriously. The evidence given at hearing corroborates documentary evidence previously submitted to the Respondent stating that that the Applicant had entered into ongoing negotiations regarding the establishment of an eligible business.
LEGALITY OF CANCELLATION
59. The Applicant wishes to draw the Member’s attention to s. 135 (4) of the Migration Act 1958, which states:
(4) If:
(a) the time specified in the notice ends after the end of the period referred to in subsection 134(9); and
(b) at the end of the period of 90 days commencing at the time specified in the notice, the Minister has not made a decision on whether to proceed with the cancellation;
the Minister is not to proceed with the cancellation.
60. s. 135 (1) states that:
“(1) Before cancelling a visa under subsection 134 (1), (3A) or (4), the Minister must give its holder 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.”
61. The notice in question was sent to the Applicant’s address in East Perth. The notice is dated 9th January 2004.
(a) 9th January 2004 + 28 days = 6th February 2004
(b) 6th February 2004 + 90 days = 6th May 2004
(c) The decision to cancel could not have been legally made after 10th May 2004.
62. The Migration Series Instructions (MSI 2.5) states that: “The power to cancel a business visa under the Act is operable only during the first 3 years in which the person holds the visa after initial entry to Australia…”
63. Mr Heng’s date of initial entry is given in various documents presented to the Tribunal as 28th January 2001. The decision to cancel was made 9th May 2004, well after 3 years had elapsed.
64. The Applicant also asks the Member to consider the factors outside anyone’s control which were working against the Applicant in his efforts to establish an eligible business. Delays are commonplace in the business arena and plans are often forced to change substantially when the commercial environment changes.
65. In order to establish a business on the scale of which the Applicant planned, an investment of millions of Australian dollars was required. The Applicant was planning to sell his packaging and processing business in Singapore and use the capital to establish a similar business in Australia, with Australian employees.
66. The Applicant was granted his visa on 8th January 2001 (See T12). On September 11th 2001, two planes crashed into the twin towers of the World Trade Centre, killing thousands and creating unprecedented political and economic upheaval. In a time of such uncertainty, particularly in the Asia region, the task of selling the Applicant’s Singapore business became far more difficult and time-consuming than before.
67. Of sheer necessity the Applicant spent a far greater amount of time managing the Singaporean business and attempting to ensure it remained profitable in difficult times, in order to make it attractive to potential buyers. Without the sale of the Singaporean business, the Australian business would not have the capital to go ahead. We contend that the management of his business in Singapore to this end is evidence of a genuine effort to obtain an eligible business in Australia.
68. Witnesses at the hearing corroborated evidence that the Applicant continued to make genuine efforts to establish a business in Australia and utilise his skills in the management of it at a senior level. A business name was registered and promoted to the local market. A number of proposals were put forward to various individuals and companies from 2002 to the present. Significant investments in Australian properties were made by the Applicant.
69. The Applicant’s current level of business activity in Australia is already beginning to benefit the Australian economy by developing links with international the international market, exporting Australian goods and increasing commercial activity and competitiveness within sectors of the Australian economy. (As defined in S 134 (1) of the Act) These benefits will only increase if the Applicant is allowed to retain his visa and act on his original plan to establish a multi-million dollar business in Australia.
CONCLUSIONS
70. The Respondent erred in deciding she was not satisfied that the business proposals before her were genuine, realistic and achievable, given that the documentation presented indicated both parties were taking it seriously.
71. The Respondent also erred in going ahead with the cancellation over 3 years after Mr Heng’s initial entry into Australia, given the MSI 2.5 and given that the 90 day period and the statutory 28 day period had already expired.
72. Mr Heng’s inability to establish a business was in any event due to circumstances well outside his control and he has continued making genuine efforts to do so.
73. This genuine effort is most effectively demonstrated in documents A6 and A7, by the fact that less than 6 months after the delegate exercised her discretion to cancel the applicant’s visa, his Australian business had a quarterly turnover in excess of $AUD100,000 and a forecast financial year turnover based on already invoiced goods in excess of $AUD450,000. This cannot be deemed token in any sense.
74. Given these factors, the Applicant asks that the Respondent’s decision of 10th May 2004 to cancel Mr Heng’s visa be set aside.
APPLICANT’S RIGHT OF REPLY
WAS THE DECISION TO CANCEL MADE WTHIN THE PRESCRIBED TIME?
75. In paragraph 3 of the closing submission, the Respondent states quotes Sub regulation 2.55(7), stating that the notice of intention to cancel the visa is deemed to have been received “and therefore given” seven working days after which it was sent. The Applicant argues that simply because an item has been received on a particular date, it does not follow that it is also given on that date. Furthermore, there is no indication that such a meaning was intended in the Act or Regulations.
76. Indeed, the Applicant submits that the reverse is the case. The terms “given” and “received” are mentioned frequently in both the Act and the Regulations. If “given” and “received” were intended to be interpreted as meaning the same thing, they would be used interchangeably. The Regulations define the meaning of “received” in relation to documents, but not “given.” The two terms are quite clearly not intended to be used interchangeably.
77. The Applicant submits that the word “give” and “receive” have very different meanings, both in terms of the dictionary definition and meaning provided in S.28A of the Acts Interpretations Act 1901, which states:
“28A Service of documents
(1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression “serve”, “give” or “send” or any other expression is used, then, unless the contrary intention appears, the document may be served:
(a) on a natural person:
(i) by delivering it to the person personally; or
(ii)by leaving it at, or by sending it by pre‑paid post to, the address of the place of residence or business of the person last known to the person serving the document; or
(B)on a body corporate—by leaving it at, or sending it by pre‑paid post to, the head office, a registered office or a principal office of the body corporate.”
78. Section 29 of the Acts Interpretations Act 1901 also makes it abundantly clear that documents are deemed to have been served or given by post: “unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post”
79. In the ordinary course of post, it does not take seven working days for a letter to travel from Perth to East Perth. It takes one day, sometimes less. Given this, the time specified in the notice was incorrect and the date upon which the decision to cancel was made was outside the legal deadline of 90 days.
ROLE OF THE TRIBUNAL
80. The Applicant is perfectly aware of the role of the Tribunal and will not waste the Member’s time by giving a dissertation on that role, of which the Member is also perfectly aware.
81. However, the Applicant wishes to draw attention to the fact that a merits-based review of a decision must take some account of the process by which that decision was reached, particularly when deciding if that decision was the correct and preferable one.
82. The Respondent has correctly pointed out that when deciding whether or not to proceed with a cancellation under S.134, a delegate of the Respondent must take into consideration various matters, including the eligibility of the business or the level of genuine effort of the visa holder. But delegates must also take into consideration whether they still have the legal right to cancel and, if they do, whether cancellation is appropriate.
83. An argument that the Tribunal not concern itself with a matter of law pertinent to the case is, in the Respondent’s words, “nonsense.” By definition, a decision that should not have been made, and could not be made legally, cannot be the correct or preferable decision.
WAS THERE AN ELIGIBLE BUSINESS?
84. The Applicant makes the following observations on the Respondent’s assertions:
The creation or maintenance of employment in Australia
85. Mr Heng never claimed that he was currently employing any workers in Australia at present, although this would change once the business was properly established.
The export of Australian goods or services
86. The goods were indeed exported by the Singaporean company at first. However, this does not change the nationality of the goods. The business exported Australian products, in particular Australian honey, into foreign markets.
The purchasing company involved in the export of Australian Goods & Services
87. The Respondent places enormous emphasis on the fact that much of the exported Australian product is sold first to the Applicant’s Singaporean business for overseas distribution. They claim this makes the sales valueless. No where in the Act or Policy does it mention who a business must sell to be deemed eligible. What is important is whether Mr Heng’s business efforts have increased exports for Australia since gaining the visa. This was testified to in evidence given by witnesses. It is evidenced by the sales invoices and shipping dockets provided. If the applicant uses his connections or indeed his own overseas company to facilitate the increased export of Australian goods then this should have no impact on the discussion of validity of the exports in meeting the criteria. They are certainly no less genuine for the fact.
The production of goods or the provision of services that would otherwise be imported into Australia
88. The Applicant’s plans for both the honey and processing business would, if allowed to be implemented, produce goods that at present are imported into Australia.
THE ISSUE OF GENUINE EFFORT
89. The Applicant points out that all evidence before the Tribunal suggests that all those with whom Mr. Heng was engaged in discussions took his efforts, plans and proposals seriously. The financial and commercial institutions with which Mr Heng was in discussion regarded his plans for an Australian business as serious. The only party that has not taken them seriously is the Respondent.
90. Given that Mr Heng and all of his future business partners took his plans seriously and regarded his efforts as genuine, there is no reason at all why the Tribunal should not. The Respondent has failed to give any rationale for this view, either at the time of cancellation or since.
SEPTEMBER 11
91. The Applicant wishes to reply to the Respondent’s argument that Mr. Heng’s inability to sell his Singaporean business (and therefore generate the capital needed to establish an eligible Australian business) was due to the economic downturn and global uncertainty, is “nonsense.” It is an established fact that significant events affect nations’ economies. Particularly when those events are Islamist extremists flying a plane loaded with fuel into the World Trade Centre, and those nations face difficulties with multi-ethnic, multi-religious populations.
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.
140. In Widjojo and Minister for Immigration and Multicultural Affairs [2001] AATA 774 (10 September 2001) the Tribunal stated:
“Section 134 involves the exercise of a discretion and the Tribunal has given careful consideration to the representations made by and on behalf of the applicant, in particular, the Tribunal has given weight to the fact that it accepts that the applicant has a genuine desire to invest in Australia and has been prevented to date from doing so by circumstances beyond his control. That consideration is not, however, in the Tribunal’s view, a countervailing factor of sufficient weight to tip the exercise of the discretion in favour of the applicant.”
141. The applicant raised at the hearing and in his written closing submissions that attack on the World Trade Centre in New York on 11 September 2001 affected the applicant’s ability to focus on the Australian business. The respondent submits that this argument is nonsense and that the events of 11 September 2001 had no direct effect on the applicant. The respondent submits that the Tribunal should not be persuaded that the events of 11 September 2001 prevented the applicant from engaging in a greater level of activity in pursuit of his claimed interest in developing a business in Australia and that there is not a sufficient reason for the discretion to be exercised in the applicant’s favour.
142. The respondent therefore submits that the delegate’s decision be affirmed.
Consideration and Decision
143. In considering this matter, I have taken into account the documentary and oral evidence as well as the authorities cited and the final submission made in writing. The first issue for the Tribunal to consider is whether it should exercise the discretion to cancel the applicant’s visa because he has not obtained a substantial ownership in an eligible business in Australia.
144. The Tribunal notes that in conducting its review and reaching its decision, the primary focus is whether the applicant satisfied the requirements of the Act at the time of cancellation. What occurred after the date of cancellation, however, may be relevant to adequately addressing that matter (Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54; Lau v Minister for Immigration and Multicultural Affairs [2002?] AATA 703). Cases such as Hope v Bathurst City Council (1980) 144 CLR 1 provide guidance as to the interpretation of the term “business”. Hope (supra) is authority that carrying on a business should be understood as activity undertaken on a continuous and repetitive basis for the purpose of profit. The Tribunal notes also that the business does not have to reach a threshold of size or turnover to qualify.
145. Section 134(10) of the Act states what an “eligible business” means. It means a business that the Minister, or the Tribunal at this time, believes is resulting in or will result in a number of specific outcomes. The applicant’s business in Australia, Pacific Trading fails to qualify as an “eligible business”. There is no evidence that it has developed business links with the international community. Purchases from AEP, for many years from New Zealand and in the last 12 months’ via their AEP office in Australia represent a long term business relationship between AEP and the applicant’s Singaporean business. When Pacific Trading has been involved as it has recently, it has been essentially as conduit directly to the Singaporean businesses of the applicant. Pacific Trading employs no one in Australia. Currently neither Mr Heng nor his wife, who are the sole directors and shareholders, are resident in Australia. The exports of goods have been until very recently, all directly to the Singaporean business. Pacific Trading’s role has not altered this. Mr Heng’s evidence was that apart from one order, nearly a year after his visa was cancelled, it had all gone directly to his company in Singapore (see Exhibit A7). Even if Pacific Trading could ever be described as a business, lacking as it does an office and financial statements, it does not in the Tribunal’s view qualify as an eligible business. Although Mr Heng could be described as having a substantial interest in Pacific Trading, Mr Heng appears to the Tribunal to be acting primarily on behalf of his Singaporean businesses that import products such as honey and cling film to process and sell from Australia and have done so for many years. Therefore the Tribunal finds the basis for the cancellation of the applicant’s visa under s 134(1) (a) of the Act is met.
146. Even if the Tribunal was satisfied that Pacific Trading was an “eligible business”, the applicant is still required to demonstrate, in order to avoid the prospect of visa cancellation, that he utilises his skills “actively participating at a senior level in the day to day management of the business”. The Tribunal understands the grant of a business skills visa under s 134 of the Act is to enable individuals to settle in Australia and establish and manage an eligible business.
147. Mr Heng has told the Tribunal he spent between 2-4 hours three times per week on Pacific Trading business. This is done he said in his Singapore office where he spends some 8-12 hours per day running his Singaporean businesses. Six to twelve hours per week cannot equate, in the Tribunal’s view, with the meaning of “actively participating at a senior level in the day to day management of the business”. Pacific Trading has no office in Australia. The Tribunal notes the comments of Senior Member Muller in Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 who said:
“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.”
148. Whilst the Tribunal accepts that activities can be undertaken outside Australia if directly related to the management of the business in Australia, in this case with the limited number of transactions involving Pacific Trading, the lack of an office or conduct of any management activities in Australia, and in the absence of any documentary evidence of management activities by Mr Heng himself, the Tribunal concludes that the applicant has not been actively participating at a senior level in the day to day management of Pacific Trading.
149. Notwithstanding this the applicant’s visa must not be cancelled if he has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and intends to continue to make such genuine efforts (s 134(2) of the Act). Matters that may be taken into account are set out in s 134(3) of the Act. Guidance may also be sought from the MSI.
150. In support of the applicant’s claim that he has made such a genuine effort, not merely a token effort, is the evidence that a business name, Pacific Trading, was incorporated and registered in February 2003, that Mr Heng had negotiations and discussed business proposals with a number of individuals and companies, and that he made significant investments in Australian properties.
151. The Tribunal does not accept that Mr Heng has made the genuine effort required. In regard to the proposed business in honey, his efforts so far have been essentially two meetings with Mr Rosiewicz, once in July 2003 and on another occasion a couple of weeks prior to the hearing. Neither meeting lasted more than 2 hours. They were discussions only. No written plan was presented by Mr Heng and no documentation of the meeting was kept. The first meeting occurred some 2½ years after Mr Heng was granted his visa and some 7 months after he was sent the survey of Business Skills Migrant – 24 months form (T14). The second nearly 2 years later. Mr Heng’s purchase of the McMahon Honey by Jickson is an asset of this company and not directly relevant to Pacific Trading. Whilst Mr Heng had also had discussions with Mr Coulter about establishing a honey processing plant there was no evidence of any concrete plans. These extremely limited efforts by Mr Heng cannot be attributed to events such as September 11, 2001. The evidence shows he did very little.
152. The decision by Mr Heng to purchase from AEP in Australia, rather than New Zealand and the use of Pacific Trading in the last twelve months rather than purchasing directly by the Singaporean business has, and the Tribunal accepts based on the evidence before it, had the advantage of overcoming difficulties with fluctuating currency. The discussions held at a hotel breakfast about the applicant’s desire to set up in Australia and the possibility of a joint venture with AEP, however have not eventuated. Mr McDermaid said he believed action points would have been kept by another staff member, but said no actual costings or a business plan was prepared. Mr McDermaid conceded if Mr Heng did go ahead with his plans he would possibly be a rival to AEP. In evidence was an undated Business Proposal Plan (T20/136-138). This appeared to the Tribunal to be part of negotiations between a Mr Andrew Yu, a customer of Mr Heng’s and Mr Heng at some time. Mr Yu in a letter to the respondent dated 12 February 2004 outlines details of a proposed joint venture with Mr Heng to establish a converting business. Mr Yu wrote at that time that the approximate time to complete the project and commence marketing the business services was three months (T20/139). Whilst Mr Heng said he was in touch with Mr Yu and had looked at properties nothing has happened despite Mr Yu’s estimate it would within 3 months. The possibility of this project eventuating did not on the evidence before the Tribunal appear imminent, or even likely in the foreseeable future. The Tribunal does not accept that the March 2005 letter from CDI Pinnacle retaining CDI to advise on the divestment of Pacific and Jickson written some 10 months after cancellation of the visa should be given much weight. No fees have changed hands.
153. The Tribunal is therefore not satisfied on the basis of the evidence before it that the applicant has acquired an interest in an “eligible business in Australia”, utilised his skills in “actively participating at a senior level in the day to day management of an eligible business” or that he has made “genuine attempts” to do those things and intends to continue to make such genuine efforts in accordance with s 134 of the Act. This does not however result in the automatic cancellation of the applicant’s business skills visa. There remains a discretion under s 134 of the Act as to whether to cancel. The Tribunal finds no basis however which warrants the discretion to cancel not being exercised in this case.
154. The applicant raised a number of additional issues in his final written submission. Firstly it was submitted that there were significant flaws in the respondent’s actions prior to the cancellation of the applicant’s visa and if not for these flaws and the number of changes of the delegate responsible, the cancellation would not have occurred. The Tribunal has had the opportunity to review all the evidence, including that evidence tendered at the hearing and is satisfied that the applicant has been given a fair opportunity to present its case and that the Tribunal has not been impeded in its responsibility to reach the correct and preferable decision. Secondly the applicant has submitted that the decision to cancel his visa could not legally have been made after 10 May 2004. The Tribunal has reviewed both the applicant’s and the respondent’s submissions and the relevant legislation and has concluded that the decision to cancel was within the time requirements of the Act.
155. In accordance with s 40 of the Administrative Appeals Tribunal Act 1975 the Tribunal therefore affirms the decision under review.
I certify that the preceding 155 paragraphs are a true copy of the reasons for the decision herein of Ms L Savage Davis
Signed: ...............(sgd N Wee)....................
AssociateDate/s of Hearing 22-23 March 2005
Date of Decision 2 August 2005Advocate for the Applicant Bonnie Robertson Hill, Thao Meng & Associates
Solicitor for the Respondent Laila McPherson, Australian Government Solicitor
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