Hoi and Minister for Immigration, Multicultural and Indigenous Affairs

[2002] AATA 662

DECISION AND REASONS FOR DECISION [2002] AATA 662

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   Q2001/1003

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      FUNG HOI   
  Applicant
           And    MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS             
  Respondent

DECISION

Tribunal       Mr. D.W. Muller, Senior Member

Date7 August 2002          

PlaceBrisbane

Decision      The Tribunal sets aside the decision to cancel the Business Skills visa of Fung Hoi.           

.............(Signed).................................
  D.W. MULLER
  SENIOR MEMBER

CATCHWORDS
 IMMIGRATION – Business Skills visa – "eligible business" -  day-to-day management – intention to continue to make genuine efforts
Migration Act 1958: s134

REASONS FOR DECISION

Mr. D.W. Muller, Senior Member             

1. This is an application to review a decision made on 8 October 2001 to cancel the Business Skills visa granted to the applicant, Fung Hoi, on 17 June 1998, pursuant to the provisions of the Migration Act 1958.

2. The issues which arise in this case are:

   (i)Whether Fung Hoi has obtained a substantial ownership interest in an eligible business in Australia;

   (ii)Whether Fung Hoi has been utilising her skills in actively participating at a senior level in the day-to-day management of the business.

   (iii)Whether Fung Hoi has made or intends to continue to make genuine efforts to do those things set out in the paragraphs above.

   (iv)Whether the husband of Fung Hoi, namely, Wing Kai Choi, the secondary visa holder, should have his visa cancelled as a result of the cancellation of Fung Hoi's visa.

3. The following material was placed before the Tribunal:

   (i)The section 37 statement plus a supplementary section 37 statement.

   (ii)A statement plus oral evidence by Fung Hoi.

   (iii)A statement plus oral evidence by Wing Kai Choi.

   (iv)A statement plus oral evidence by Louisa Ho.  Ms. Ho manages a company in Sydney which supplies towels and other bathroom goods.

   (v)A statement plus oral evidence from Masakaza Nakasato.  Mr. Nakasato manages a Brisbane company called Shin Trading which supplies bathroom equipment.

   (vi)A statement plus oral evidence from Patrick Kwan, Fung Hoi's Australian accountant until July 2001.

   (vii)A statement plus oral evidence from Clarissa Chiang, Fung Hoi's Australian accountant since 5 November 2001.

   (viii)Extracts from a medical dictionary.

   (ix)A schedule of office furniture purchased by Fung Hoi.

4. From the material referred to above, the Tribunal finds as follows:

   (i)Fung Hoi was born on 4 January 1952 in Hong Kong.  She is also known as Christine Hoi.

   (ii)Her citizenship is described as "British National Overseas".

   (iii)She is married to Wing Kai Choi.  They have adult children who live in the USA.

   (iv)Between 1985 and February 2001, she conducted a business in Hong Kong.  She was the sole proprietor of Happy Home & Co., which supplied bathroom fittings and accessories to builders, property developers and retailers in Hong Kong.

   (v)She was granted a Business Skills visa on 17 June 1998, which is due to expire on 17 June 2003.

   (vi)She entered Australia on 21 June 1998.  She gave her Australian contact address as 101 Alma Road, Maroubra, NSW, which was the address of Louisa Ho.  Fung Hoi had an arrangement with Ms. Ho to pass on to Ms. Hoi any correspondence which came to that address for her.

   (vii)Upon entering Australia in June 1998, it was her intention to find Australian suppliers of bathroom and hygiene products and export those products to Hong Kong and mainland China.

   (viii)She was advised by her first Australian accountant that it was not necessary for her to form a company to establish a business in Australia.  She took his advice and initially intended to trade in her own name.  She was later advised by her second Australian accountant to form a company.  She took that advice too and incorporated the Australian company, Homarama, on 18 June 2001.  She is the sole shareholder and managing director of Homarama.

   (ix)Unfortunately for Ms. Hoi she suffered from a serious gynaecological illness throughout 1998, 1999 and 2000.  The degree of debilitation varied from month to month but overall it was sufficiently serious to prevent her from giving her business the attention it needed.   In early 1999 she was experiencing severe abdominal pains, excessive blood loss during her periods, non-regular periods and general ill health.   She tried to cure the problem with traditional Chinese medication and treatments, which ultimately did not work.  As her pain, lethargy and lack of sleep began to increase in severity she finally accepted the fact that she would have to undergo a hysterectomy.  The operation was conducted on 18 August 2000.  She took about six months to recuperate.  She has been well ever since.

   (x)From mid-June 1998 to the end of 1998, Ms. Hoi attempted to get involved with two companies associated with Ms. Ho.  One was Ho's Enterprise which produced bathroom products.  The other was Plexvon Pty Ltd which was involved in property development projects.  Ms. Hoi and Ms. Ho had previously had business dealings with each other when Ms. Hoi supplied another of Ms. Ho's companies, Sunny Trading, with products from Happy Home & Co.  Ms. Hoi prepared price lists and samples of Ho's Enterprise products for market through Happy Homes & Co. in Hong Kong to be sold to five major retail outlets.  Ms. Hoi received a negative response from the retailers.  The prices for the quality supplied was not attractive to the Hong Kong buyers.

   (xi)Ms. Hoi's accountant advised her not to get involved in the property development side of Ms. Ho's business.  He said it was too risky.

   (xii)In early 1999, Ms. Hoi was experiencing severe health problems.  She tried to sell her Hong Kong based business.  She was unable to concentrate on building her Australian business.  She eventually sold 75% of her interest in Happy Home & Co. to three of her former employees.  She wanted to retain a 25% interest in the Hong Kong company so that she would have a commercial vehicle through which Australian exports could be channelled.  The purchasers of Ms. Hoi's 75% share in Happy Homes took a long time to raise finance to buy the shares.  Negotiations for the sale did not start in earnest until May 2000.  The buyers spent the time from September 2000 to February 2001 organising finance.  Eventually the sale was finalised in March 2001.

   (xiii)Ms. Hoi and her husband, Wing Kai Choi, purchased a block of land at Helensvale, Queensland, in April 2000, for $110,000.  They then built a home on the land.  The cost of construction of the home was $284,000.  They moved into the home in June or July 2000.  They have been permanently based in Australia ever since.  They have furnished their Australian home and they have bought two expensive motor vehicles.

   (xiv)Between June 1998, when Ms. Hoi first arrived in Australia and the end of February 2001, Ms. Hoi made ten trips back to Hong Kong and she had spent a total of 164 days in Australia.  In the year 2001, she spent 227 days in Australia.  In the first six months of 2002, she spent 120 days in Australia.  On the occasions when she was in Australia prior to the building of her home at Helensvale, she stayed in hotels and motels.

   (xv)Ms. Hoi and her husband have transferred approximately $2.4 million to Australia. They currently have $1.5 million in term deposits and about $300,000 in savings and cheque accounts in Australian banks.

   (xvi)Due to a combination of initial business set-backs, ill-health and problems associated with selling 75% of her Hong Kong business, Ms. Hoi did not get her Australian business activities going properly until early 2001.  From February 2001 to June 2001, she operated her business in Australia as a sole proprietor.  From June 2001, she operated her Australian business as managing director of Homorama.  From November 2001, she has invested in and occupied the role of marketing director of an Australian company, Shin Trading.

   (xvii)Ms. Hoi encountered many frustrating and dismaying difficulties in dealing with potential Australian suppliers.  On numerous occasions her calls and enquiries went unanswered.  She had difficulty getting Australian business people to take her seriously.  These difficulties were a factor in deciding to incorporate Homarama.  She began to believe that if she operated under a company name, she would generate greater respect.  Her difficulties can be illustrated by the fact that from June 2001 to February 2002, Ms. Hoi contacted at least thirteen Australian companies which manufacture textiles and bathroom products but those companies either failed to respond at all to Ms. Hoi's enquiries, or failed to follow negotiations with samples, sales promotion materials or price lists.

   (xviii)In April 2001, Ms. Hoi attended the Hong Kong International Houseware Fair.  At that exhibition, Ms. Hoi met Masakaza Nakasatu of Shin Trading.  Shin Trading is a Brisbane company which exports Australian made bathroom accessories to Asia.  The company deals in shower screens and tap fittings.  Between May and September 2001, Ms. Hoi negotiated with Mr. Nakasatu to become a shareholder and partner in his company.  In November 2001 Ms. Hoi invested $70,000 in Shin Trading.  She is now its marketing manager as well as being a significant shareholder.

   (xix)Ms. Hoi has now secured an Australian supplier of bathroom textiles and a niche for their sale in the Hong Kong market.  She has also exported to Hong Kong, 17 spa baths and 17 pump units, supplied by Stylus of Sydney.

   (xx)Ms. Hoi has also sought assistance from the Queensland Department of State Development.  As a result of the government assistance she has investigated the following business opportunities:

   (a)Potting mix products for nurseries and amateur horticulturalists.  Ms. Hoi has been dealing with four Australian suppliers.  On 12 November 2001 she exported 1200 bags (5 litres each) of potting mix to Hong Kong.

   (b)Hygiene products such as toilet bowl cleaner, degreasers, carpet cleaner, fabric cleaner, washing machine odour remover and bacteria controller.  In December 2001, Ms. Hoi sent a number of products to Hong Kong for appraisal.  In January 2002 she took a large quantity of products to Hong Kong for testing.

   (c)Meat and Bone meal products from approximately nine Queensland abattoirs and meat export companies.  To date these negotiations have not produced any business.

   (d)Ms. Hoi has investigated the prospects of exporting zircon sand to China.  She has also investigated the export of live seafood.

5. On 15 June 2001, a delegate of the Respondent sent a Notice of Intention to Cancel (NOIC) the Business Skills visa of the Applicant to her at her Helensvale address.  A similar notice was sent to her husband, Wing Kai Choi.  The grounds for the intention to cancel were that the delegate did not know where to send the 24 month survey document and consequently had no record of Ms. Hoi's business activities.  Ms. Hoi was contactable at all times at the Maroubra address of Ms. Ho.

6. The NOIC was replied to on Ms. Hoi's behalf by:

   (i)Mr. Kwan, the accountant, on 3 July 2001;  and

   (ii)Mr. Ted Innes, immigration agent, on 12 July 2001, with a completed form 1010 included.

7. Ms. Hoi's visa was cancelled on 8 October 2001, on the grounds that she:

   "(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."

1. The relevant legislative provisions are to be found in section 134 of the Act.

   "134     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 is 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)."

(10)  In this section:
"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;"

1. The Tribunal found Ms. Hoi to be a most impressive person and witness.  The Tribunal accepts that when Ms. Hoi obtained her Business Skills visa, she intended to actively participate in an Australian business in and from Australia, which business would export Australian made goods to Hong Kong and China.  The Tribunal accepts that Ms. Hoi suffered an initial lengthy set back due to severely debilitating health problems and also due to her lack of familiarity with Australian business methods.  Nevertheless Ms. Hoi has continued to work hard at establishing a respectable business in Australia.

2. The Tribunal finds that the businesses conducted by Homarama and Shin Trading satisfy criteria (a), (b) and (c) of the definition of "eligible business" in subsection 134(10) of the Act.

3. The Tribunal finds that Ms. Hoi has obtained a substantial ownership interest in both of Homarama and Shin Trading.  She owns Homarama outright and she invested $70,000 in Shin Trading.  She utilises her skills in actively participating at a senior level in the day-to-day management of those businesses, in Australia.

4. During the course of the hearing the representative of the Respondent submitted that the decision to cancel Ms. Hoi's visa in October 2001 was correct at the time because:

   (i)Ms. Hoi had done virtually no business until mid 2001;

   (ii)Ms. Hoi's company Homarama was not incorporated until 18 June 2001 and had not done much business by October 2001, and

   (iii)Ms. Hoi did not obtain a substantial ownership in Shin Trading until November 2001.

5. The Tribunal is satisfied that Ms. Hoi's slow start to her business activities and her lack of business activity in 1999 and 2000 was due to her illness and her difficulties in dealing with the Australian business culture.  It was not due to any lack of intention on her part to establish a business in Australia.

6. The Tribunal is further satisfied that Ms. Hoi made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, namely, Homarama and Shin Trading, that she made a genuine effort to utilise her business skills in actively participating at a senior level in the day-to-day management of those businesses and that she intended to continue to make genuine efforts to do so, before her Business Skills visa was cancelled.

7. Consequently, the Tribunal sets aside the decision to cancel the Business Skills visa of Fung Hoi.

   I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member

   Signed:         .....................................................................................
              B. Hitchcock, Personal Assistant

   Date/s of Hearing  11, 12 July 2002
   Date of Decision  7 August 2002
   Counsel for the Applicant        Mr. D. Rangiah
   Solicitor for the Applicant         Nicol Robinson Halletts
   Solicitor for the Respondent    Blake Dawson Waldron