Ho and Minister for Immigration, Multicultural and Indigenous Aff Airs

[2003] AATA 1208

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 1208

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/790

GENERAL ADMINISTRATIVE DIVISION		)
Re		PING NAN HO

Applicant

And MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date2 December 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review. 

(Sgd) J Cowdroy

Member

CATCHWORDS

IMMIGRATION & CITIZENSHIP – citizenship – grant of citizenship – permanent resident requirements

Australian Citizenship Act 1948 s 13

Drake v Minister for Immigration, Multicultural and Indigenous Affairs (1979) 24 ALR 577

Re Drake and Minister for Immigration, Multicultural and Indigenous Affairs (No 2) (1979) 2 ALD 634

Re Minister of Immigration, Local Government and Ethnic Affairs and Roberts (1993) 29 ALD 656

Re Lee and Department of Immigration and Ethnic Affairs (1988) 10 AAR 270

REASONS FOR DECISION

2 December 2003  Ms J Cowdroy, Member    

1. This decision relates to a hearing on 6 March 2003 which reviewed the decision of the respondent’s delegate dated 26 August 2002 to refuse the grant of Australian citizenship to the applicant on the basis that he did not satisfy the permanent residence requirements of section 13(1)(d) and (e) of the Australian Citizenship Act 1948 (“the Act”). 

2.      Mr W Chan, Migration Agent, appeared for the applicant and Mr P Hardman of counsel appeared for the respondent.  The T documents were entered into evidence pursuant to section 37 of the Administrative Appeals Tribunal 1975 as well as a number of other documentary exhibits marked Exhibit 2 – Exhibit 6.  The applicant gave evidence and was assisted by an interpreter in the Mandarin language. 

The Legislative Scheme

3. Australian citizenship is granted in accordance with the provisions of Part 3, Division 2 of the Act. The relevant part of section 13 provides:

“13  Grant of Australian citizenship

(1)       Subject to this section, the Minister may, in the Minister’s discretion, upon application in accordance with the approved form, grant a certificate of Australian citizenship to a person who satisfies the Minister that:

…

(d)the person has been present in Australia as a permanent resident for a period of, or for periods amounting in the aggregate to, not less than one year during the period of 2 years immediately preceding the date of the furnishing of the application;

(e)the person has been present in Australia as a permanent resident for a period of, or for periods amounting in the aggregate to, not less than 2 years during the period of 5 years immediately preceding the date of the furnishing of the application;

…

(4)       For the purposes of the application of subsection (1) in relation to an applicant for the grant of a certificate of Australian citizenship:

…

(b)       subject to paragraph (a), the Minister may, in the Minister’s discretion:

(i)        treat a period during which the applicant:

(A)      was a permanent resident;

(B)      was not present in Australia; and

(C)      was engaged in activities that the Minister considers                   beneficial to the interests of Australia;

as a period during which the applicant was present in Australia as a permanent resident;

Background

4. The following facts are not in dispute. Mr Ho applied for the grant of Australian Citizenship on 8 February 2002. He had been granted a permanent visa Subclass 127 following his arrival in Australia on 16 November 1995. Between that time and his application for citizenship, he spent very short periods of time in Australia. It is not in dispute that the applicant does not satisfy section 13(1)(d) or (e) of the Act. He has sought exemption from the residency requirements on the basis that during the five years preceding his application, he has been engaged in activities beneficial to Australia. The sole issue for the Tribunal’s determination is whether that has been the case.

The Evidence:

5.        The applicant and his wife, Mrs Tsai Pei-Hua Ho are the sole directors of Ho Brothers Metal Pty Ltd (Ho Brothers), a company incorporated in Australia on 23 January 1996.  Ho Brothers’ business involves the exportation of scrap metal including copper cables and electric motors from Australia to Asia.  The turn over of income in the five years was in excess of US$1m.  Ho Brothers’ major suppliers are both Australian companies, Simms Metal and Metal Corporation.  The company’s customers are located in Japan, China and Hong Kong.  The applicant travels frequently to Asia and China, where he stays for approximately two months.  He then remains in Australia for a month or so before departing on his next overseas trip. 

6.        He spends a lot of his time in China, as this is where the majority of his clients are located.   Quang Dong province has a system of excise tariff for various metals and the applicant spends considerable time dealing with authorities in connection with those matters.  He also stays in China to collect payments for the shipments that have been forwarded. The applicant has an arrangement, in conjunction with other dealers, for the use of a yard in China, which has been in place for the last one or two years. One of the reasons for remaining in China during his trips is to take care of the activities associated with the yard. 

7.        Shortly following his entry to Australia as a migrant, he experienced difficulties in breaking into a new market, as competition was fierce, consequently he found it necessary to travel to China to cultivate and maintain his clientele.  His daughter and son are currently studying international business degrees in Australia and he expects they will be able to assist in the business when their studies are completed. 

8.        Associated with his exportation of metals to Japan is the need to travel to Taiwan.   Here he must apply for a visa to Japan each time he visits. This is an inconvenient and time-consuming activity, taking up to two weeks on each occasion and adds to the time he spends outside of Australia.  His wife and two children are Australian citizens, he has two properties in Queensland, and if he is granted Australian citizenship and an Australian passport, he would be able to expand the business and make a more significant contribution to Australia’s economy. 

9.        In cross-examination, the applicant contended that the time he spent overseas was entirely attributable to the business activities of Ho Brothers.  He acknowledged that the amount of time spent overseas in the past five years was considerable.  His family has an interest in three companies in Taiwan, which trade in scrap metal.   The three companies have been established more than 10 years.  He is Director of Kang Far Industrial Co Ltd.  The other two family businesses, Million Metal Co Ltd and Chi Li Metal Co Ltd, are family companies owned by his brother and his sister. 

10.      He produced a business card, which stated he was General Manager of all three companies.  The card, he said, was over ten years old and did not accurately reflect his current status in those companies.  The same emblem in the form of the initials KF appear on both the Ho Brothers’ business card and the business card of the three companies located in Taiwan.  He initiated that symbol on the business cards for the Taiwanese businesses more than 20 years ago, and when he had business cards printed for his Australian business, he decided to incorporate that symbol in his business card.  He indicated he ceased being the General Manger of the two Taiwanese companies after he migrated to Australia and that he had no involvement in either of those businesses in Taiwan since that time.  His elder brother was responsible for the printing of the business card indicating that he was General Manager of the three companies.   

11.      Some of the money forwarded from Taiwan was borrowings from his family and he had used some of those funds to buy property in Australia.  At times, such funds also financed his gambling habit.   If he won money, he would take the winnings to China.      

12.      The companies in Taiwan export only to Japan as the Government prohibits export directly from Taiwan to China.  Movement details from the Department of Immigration and Multicultural and Indigenous Affairs reveal that the applicant departed Australia on 12 October 2002 and returned to Australia on 28 January 2003.  On a passenger card for that journey (Exhibit 3) the applicant had indicated Taiwan as the country where he would spend time abroad.  There was no reference to China, nevertheless the applicant contended that most of his trips involve lengthy periods in mainland China.   

13.      The applicant acknowledged that the cost of travel to Australia, Taiwan/China and return was expensive and conceded that the average trip would cost at least $5,000.  He was unable to explain why the accounting records of Ho Brothers’ make no provision for airfares and travel costs associated with any overseas trips.  He indicated a vague awareness of accounting principles and said that his wife assumed responsibility for some of the financial aspects of the business and his accountant prepared the taxation returns for Ho Brothers.  

14.     Invoices which appear at pages 153 to 156 are all on the account Fujisho Company Limited, Osaka, Japan.  He acknowledged that the Taiwanese company in which he was formerly involved also had arrangements with Fujisho, but that was in the past.

15.      The applicant owns a house in Taiwan where he resides on his visits there. 

Submissions

16.      The applicant submitted that little regard could be had to the fact that the applicant held a business card indicating that he was General Manager of three Taiwanese companies.  Because of the age of the card, it was not conclusive evidence of any present business ownership or involvement.  Whilst the card may have been used for promotional purposes, it was not an official record of either shareholdings or involvement. 

17.      In respect to the scrap metal exportations, all products sold in China were sourced from either Australia or New Zealand.  The prohibition on exporting scrap metals from Taiwan to China meant that the Taiwanese companies could not take advantage of such an arrangement. 

18.      The fact that there was considerable monies transferred from Taiwan is not necessarily indicative that it was derived from business interests in Taiwan or that it was derived from the applicant’s personal exertion in that country.

19.      The evidence reveals that during the applicant’s absence outside Australia he was engaged in activities for Ho Brothers which were beneficial to the interests of Australia in that:

§  the number of export transactions was 18;

§  the total export generated by Ho Brothers was approximately A$1,640,000 during the relevant period which is a significant amount;

20.      The fact that the applicant had not claimed travel expenses was irrelevant to the Tribunal’s consideration, as was the fact that the company was not making a profit.   The principles derived from cases as to the interpretation of the words “benefit to the interest of Australia” demonstrate that the requirements do not rest solely on the significance and scale of the business enterprise involved.  

21. For the respondent, it was said that the applicant’s activities outside Australia during the relevant period ought to be regarded as merely the furthering of private commercial interests and do not contain an element of public benefit. There is insufficient connection between the applicant’s overseas activities and benefit to the Australian community at large. Whilst the gross income of Ho Brothers during the relevant period was in excess of US$1m, the company made a loss in most years, consequently it could not be argued that the company made any sizeable contribution in the form of taxation benefits to the Australian Government. Whilst it is apparent that the legislative provisions and policy allow some flexibility in circumstances where in exceptional circumstances the applicant demonstrates specific substantial activities during specific periods, however it is not an alternative method of complying with section 13(1) of the Act.

22.      In relation to the scale of Ho Brothers’ business activities, the Tribunal should have some doubts as to the credibility of some of the financial statements produced and in particular, the naivety expressed by the applicant in regard to the absence of deductions for travel and accommodation expenses.  Bearing in mind that his evidence reveals several trips each of more than $5,000 per year such a deduction would be significant.  The Tribunal should be wary of accepting the applicant’s explanation that he left financial matters to his wife.  In this context, the Tribunal should have regard to the fact that the applicant is a business man with expertise in the exportation trade and negotiating contracts in China.  His businesses have been demonstrated to be successful in that he has acquired significant assets.  Such success is not attributable to his activities with Ho Brothers and can only be explained in terms of his involvement with a company or companies in Taiwan.

23.      The evidence in regard to the applicant’s involvement in the Taiwanese companies was not convincing and the significant amounts in his Australian bank accounts demonstrates an income from an overseas source.  The applicant’s answers were at times evasive and it would be open to the Tribunal to find that the business card produced (Exhibit 6) is, in fact, an accurate reflection of the applicant’s current business activities.

24.      Further, the absence of any financial records demonstrating wages or drawings would support their contention that the company’s operations in Australia are not significant.  The applicant maintains a residence in Taiwan and has admitted that he is a director of one company in Taiwan.  Other evidence might influence the Tribunal to draw an inference that a considerable amount of time is spent in Taiwan in respect to Taiwanese business activities.  In considering whether to exercise its discretion, the Tribunal should have regard to the purpose of the applicant’s overseas trips which, it was contended, was not to further the expansion of Ho Brothers but to facilitate the earning potential of his other business interests in Taiwan. 

25.      There has been no satisfaction of the requirement that the applicant’s business activities are beneficial to Australia and therefore the discretion to grant Australian citizenship ought not to be exercised.  In the last year, the applicant spent no more than 106 days in Australia. 

Findings and Application of the Law

26. It is not disputed and I find accordingly that the applicant meets the requirements of section 13 of the Act with the exception of paragraphs (1)(d) and (e). Those paragraphs relate to the length of periods of residence in Australia. However, there is the potential to treat a period during which the applicant was not present in Australia as a period during which he was present in Australia, if the Minister considers that the activities in which the applicant was engaged were beneficial to the interests of Australia (section 13(4)(b)(i) of the Act).

27.      In determining whether the activities in which the applicant was engaged outside Australia are beneficial to the interests of Australia, a Statement of Ministerial policy has been published by the Minister which sets out relevant matters to be considered by the Tribunal.  The policy and guidelines are contained in Chapter 4 of the Australian Citizenship Instructions (ACI).   Although the Tribunal is not bound to apply policy or guidelines, following Drake v Minister for Immigration, Multicultural and Indigenous Affairs (1979) 24 ALR 577 and Re Drake and Minister for Immigration, Multicultural and Indigenous Affairs (No 2) (1979) 2 ALD 634, the Tribunal will ordinarily apply policy in reviewing a decision, unless there is a cogent reason for not doing so. In the present circumstances, there has not been any cogent reason demonstrated which would persuade me that they should not be utilised.

28.      Paragraphs 4.3.17 to 4.3.19 set out relevant criteria to consider concerning when a person will be regarded as present in Australia.  Paragraph 4.3.18 is particularly relevant.  It reads:

“4.3.18           the legislation is interpreted as requiring the following:

§  the applicant must have been a permanent resident (see 1.4) during any of the periods counted;

§  the periods spent outside Australia to be counted must be:

-within the last 5 years for the 2 years in the last 5 years requirement; and

-within the last 2 years for the 1 year in the last 2 years requirement;

§  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;

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

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

§  the activities must have been ‘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.”

29.      The applicant has sought to demonstrate that during his absence from Australia he was engaged in activities which were beneficial to the interests of Australia.   In considering that issue, I was mindful of the interpretation of that term, as explained in the matter of Re Minister of Immigration, Local Government and Ethnic Affairs and Roberts (1993) 29 ALD, 656, where Einfield J said:

“…something in the nature of activities which provide some advantage to Australia, whether commercial or otherwise.  The concept necessarily connotes some public interest in Australia, even if of a general or non-specific character, and means more than the private interests of the Respondent.  The section requires some objective benefit to Australia…”

30.     Accounts were produced for Ho Brothers that disclose total sales of $1,049,000 and a gross loss of $922.18.  I find it significant that no drawings have been made from Ho Brothers’ accounts for wages or drawings for the applicant or his wife.   The deposits made to an ANZ Bank account, which were generally in excess of $100,000, originated from Taiwan.  

31.     I find that the applicant’s overseas travel was in the promotion of his private business interests.  Further, I find that any travel associated with the business in Australia was minimal and that predominantly it was for the purpose of furthering the business activities of a business or businesses in Taiwan.

32.      Whilst the applicant contends that his export activities have improved the balance of payments of Australia, it is clear that the interpretation of the words “beneficial to the interests of Australia” involves more than an incidental benefit to the Australian economy by way of taxation payments.    There is no evidence that the applicant’s activities have resulted in any increased market in Australia for scrap metal, created employment opportunities nor has it stimulated the Australian economy by creating a new export market.   I find that there is no credible evidence to support the applicant’s contention that during his absences from Australia he was engaged in activities other than of a private business nature.   

33. It is the Tribunal’s view that it is not appropriate to exercise the Minister’s discretion under section 13(4)(b) of the Act. As the Tribunal has found that the applicant does not satisfy section 13(1)(d) or (e) of the Act, and it declines to exercise the discretion in section 13(4)(b)(i) of the Act, it follows that a grant of citizenship cannot be made to the applicant.

34.      Although the respondent did not make the decision to reject the application on the basis of spousal relationship, the Tribunal nevertheless considered that aspect.  In written material, the applicant highlighted the fact that he has substantial personal ties in Australia as his wife and all his children are Australian citizens living in Australia.   He has substantial assets in Australia, including real estate.   

35. Under section 13(9)(c) of the Act, the Minister has discretion to grant a certificate of Australian citizenship ship to a permanent resident who is the spouse of an Australian citizen. That a discretion is conferred is indicative of the fact that the mere fact of marriage to an Australian citizen does not provide a right to a grant of Australian citizenship: see Re Lee and Department of Immigration and Ethnic Affairs (1988) 10 AAR 270.

36.      When referring to the ACI to provide guidance in this matter, it provides, amongst other things, that applicants must have been present in Australia as a permanent resident for at least 2 years in the five years immediately before the application at least 12 months of which must have been within the 2 years immediately prior to that date.  By virtue of paragraph 26 above, the Tribunal has found that the applicant does not meet the terms of that provision. 

37.      One of the exceptions to that requirement is if the applicant has lived in Australia as a lawful permanent resident for a continuous period of one year and would otherwise suffer significant hardship or disadvantage.  Based on the evidence regarding the applicant’s absences from Australia, I find that he does not satisfy the one-year residence requirement.   In relation to significant hardship or disadvantage, there is no evidence that the applicant has been refused employment on the grounds referred to in the policy guideline or that he is representing Australia in an international forum.   

38.      The fact that that the applicant must wait several days for a visa to enter  Japan, which would not be the case if he held an Australian passport, does not qualify as hardship; it is purely inconvenient. 

39.      For the above reasons, the applicant does not meet the requirements for the grant of Australian citizenship on the basis of spousal relationship.  .

40.      The Tribunal affirms the decision under review

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member

Signed:         .......................................................................................
  Associate

Date/s of Hearing  6 March 2003 
Date of Decision  2 December 2003

For the Applicant  Mr W Chan, Migration Agent 
For the Respondent                  Mr P Hardman of Counsel