Ko and Ors and Minister for Immigration and Multicultural and Ind Igenous Affairs

[2003] AATA 414

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 414

ADMINISTRATIVE APPEALS TRIBUNAL          Nº V2002/787
  Nº V2002/1084

GENERAL  ADMINISTRATIVE DIVISION        Nº V2002/1085

Re:       KAM SUEN KO AND

KAREN LUEN HO AND

SIN HIN WU

Applicants

And:     MINISTER FOR IMMIGRATION
  AND MULTICULTURAL AND

INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal:       Mr W.G. McLean, Member

Date:             6 May 2003

Place:            Melbourne

Decision:The Tribunal sets aside the decisions under review and remits the matter to the respondent with the direction that the business skills visas held by Kam Suen Ko, Karen Luen Ho and Sing Hin Wu should not be cancelled under s.134 of the Migration Act 1958.

(sgd) W.G. McLean

Member

IMMIGRATION AND CITIZENSHIP — cancellation of business skills visa – whether applicant (Kam Suen Ko) has a substantial ownership interest in an eligible business in Australia – whether applicant is utilising her skills in actively participating at a senior level in the day‑to‑day management of the business – whether secondary visas held by applicant's children should be cancelled – decision set aside

Migration Act 1958 ss.134(1), (2), 134(4), (10)

Re Abraham and Department of Immigration and Multicultural Affairs (1997) 50 ALD 611

Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54

Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656

Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178

REASONS FOR DECISION

6 May 2003  Mr W.G. McLean, Member

1. This is an application for the review of decisions by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) made on 12 July 2002, pursuant to s.134 of the Migration Act 1958 (the Act).  The respondent decided to cancel the business skills visa of Mrs Kam Suen Ko (the applicant) and the contingent secondary business skills visas of her children, Karen Luen Ho (Karen) and Sin Hin Wu (Sin).

2. The applicants were represented by Mr M. Gerkens, of counsel.  Ms V. Priskich, solicitor from Blake Dawson Waldron, represented the respondent.  Sworn evidence was given by the applicant, with the assistance of interpreters of the Cantonese language; Ms Catherine Poon and Ms Kitty Brady.  Sworn oral evidence was also given by Karen, the applicant’s accountant, Mr Ty Sam and the applicant’s solicitor, Mr Dominic Yau.

3. The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act1975 (the T documents) and documentary exhibits numbered A1 to A3 which were tendered by the applicants.

4. The applicant is a resident of Hong Kong and holds a British National Overseas Passport issued by the Hong Kong Government which expires on 30 December 2006.  The applicant applied to the Australian Consulate in Hong Kong for business skills visas and on 7 April 1999 visas were granted to the applicant, Karen and Sin.  The applicant continues to reside principally in Hong Kong but also resides intermittently in Australia whenever she visits from time to time.

5. The applicant has a controlling interest in a company incorporated in Hong Kong with limited liability named Rionlon Company Limited (Rionlon).  The certified financial statements of Rionlon record sales of HK$73,105.463 generating an operating profit of HK$271,108 for the year ended 31 October 2001.  The report of directors indicates that the principal activities of Rionlon are general trading and import and export and that the directors of the company are the applicant and Mr Wu Chong.  Mr Wu, a Canadian citizen, is referred to in clause 3 of the applicant’s statutory declaration (exhibit A1) as Mr Philip Wu and is described therein as the applicant’s de facto partner.  Mr Wu is the father of Sin.  Rionlon has issued 10,000 ordinary shares of HK$1 of which 7000 shares are owned by the applicant and 3000 shares are owned by Mr Wu.  The balance sheet of Rionlon as at 31 October 2001 which is signed by the directors (the applicant and Mr Wu) records that at that date Rionlon had a share capital of HK$10,000 and retained profits of HK$2,738,372 making up a total shareholders funds versus net assets of HK$2,748,372.

6. The applicant arrived in Australia on 13 April 1999 and remained for only one week prior to returning to Hong Kong for approximately 9 to 10 months.  During her initial week in Australia, the applicant arranged for the formation of K.S. Ko Pty Ltd (K.S. Ko) which was subsequently registered on 8 February 2000.  The annual return of K.S. Ko lodged on 4 January 2002 records that the company has issued 10 shares of $1 and that the whole of the paid capital is owned by the applicant, who is described as the secretary and sole director of the company.

7. The Tribunal was provided with the comparative financial statements of K.S. Ko for the years ended 30 June 2000 and 2001.  The financial statements include a trading statement, a profit and loss statement, a profit and loss account and a balance sheet and were certified by the applicant’s accountant, Mr Frankie Yim CPA, on 28 August 2002.  The trading statement indicates that K.S. Ko had no purchases or sales activity for the initial trading period from its date of incorporation on 8 February 2000 to 30 June 2000..  The profit and loss statement records a net loss of $6343 for the part year ended 30 June 2000 which absorbed the whole of the company's paid capital of $10 and produced a negative shareholders equity of $6333.  The trading statement of K.S. Ko for the year ended 30 June 2001 records sales of $463,534 and after deducting purchases of $429,529 and "handling charges - Rionlon Co Ltd" of $6711 records a gross profit on trading of $27,294.  The sales of $463,534 are all to one single customer – Wilfred Marble Engineering Ltd (Wilfred Marble) in Hong Kong and involve six shipments of rough marble and limestone blocks sourced from Iran.  The T documents pages 97 to 99 reveal that Rionlon was in fact the purchaser of the marble and limestone from Pacific Rim Resource Pty Ltd (T97‑T98) and the related bill of lading (T99) reveals that the goods were ordered by Rionlon for shipment from the Port of Bandar Abbas, Iran to Hong Kong.  It is apparent from a debit note from K.S. Ko to Wilfred Marble (T96) that for some unexplained reason, Wilfred Marble paid K.S. Ko an "agency commission" of 6 per cent of the U.S. dollar acquisition price of the marble sold by Pacific Rim Resources Pty Ltd (Pacific Rim) to Rionlon.  A charge of $6711, recorded as handling charges - Rionlon in K.S. Ko's trading statement for the year ended 30 June 2001, is the cost paid by Rionlon to its bank for issuing letters of credit in favour of Pacific Rim in respect of Rionlon's purchase of the marble and limestone.  Based upon these facts, it would appear that the trading statement K.S. Ko for the year ended 30 June 2001 was either wrongfully prepared by the applicant’s accountant or intentionally prepared to mislead.

8. The profit and loss statement of K.S. Ko for the year ended 30 June 2001 reflects a net profit of $8402, if one is to accept that the company rightfully received a net commission of $27,294 from Wilfred Marble after absorbing Rionlon's letter of credit cross charge to K.S. Ko of $6711.  As a result of the $8402 net profit achievement, K.S. Ko's balance sheet as at 30 June 2001 records a net assets and total shareholders equity of $1369.  It is also noted that, as at 30 June 2001, the applicant had loaned K.S. Ko $53,226 against which the company had cash of $30,004, which of course was available to K.S. Ko to partly repay the loans at the applicant’s sole discretion.  Accordingly, the net overall risk investment exposure of the applicant to K.S. Ko at 30 June 2001 resulting from the loans was $23,222.00 ($53,226.00 less $30,004.00) plus the share capital investment of $10 totalling $23,232.00.

9. It is contended that K.S. Ko had one transaction for the year ended 30 June 2002 involving the export of goods to Japan on 5 June 2002 costing $10,703.60 (US$5637.10) which were sold for $11,884.70 (US$6259.68).  Also, that K.S. Ko has had one transaction for the current financial year involving the export of sheepskins to China of $99,580.  It is understood that arrangements are in progress concerning the future shipments to China of machinery parts of $218,290.00, granite of $34,412.00 and lambskins of $168,360.00.  There is no documentation before the Tribunal concerning the position of Rionlon in relation to above transactions said to have been or arranged by K.S. Ko, nor is it clear when the three contemplated exports will be completed.

10. On 30 April 2001 the respondent received a Survey of Business Migrants, Migrant Class Form 1010 which was submitted by the applicant.  The notes forming part of the form explain that the document should be completed by people who hold a business skills visa at 12 and 36 months after arrival in Australia, and also incorporates the following note:

    …

    About the information you give on this form

    The Department of Immigration and Multicultural Affairs (DIMA) is authorised to collect information provided on this form under Section 137 of the Migration Act 1958. The information provided will be used in aggregate format to assess whether or not the business skills class is meeting the objectives outlined above. It will help the Department to identify whether, in an overall sense, the category has been successful. The information will also be used on an individual basis to verify your efforts to engage in business, a requirement of your visa.

In answer to the question "To which address do you want correspondence regarding your case sent?", the applicant replied:

15B Long To Bldg
674‑656 Castle Peak Rd.,

KLN HONG KONG

In answer to the question "Do you want all correspondence regarding your case sent to any other person?", the applicant replied:

Philip Wu
15B, Long To Bldg,
654 Castle Peak Rd.,

KLN. H.K.

In answer to question "What value of assets have you invested in the business since you became owner?" the applicant replied, "A$600,000".  In answer to the question "What is the current net worth of the business?" the applicant replied, "A$600,000".  In answer to the question "What is the approximate annual value of the exports sold by your business?" the applicant replied, "A$473,000".  In answer to the question "Did you receive help completing this form?" the applicant ticked, "Yes", and replied:

[NAME] Philip Wu

[ADDRESS] 15/B Long To Bldg.
                   654‑656 Castle Peak Road,

KLN, HONG KONG

The applicant signed the form on 6 April 2001 and declared "that the information I have supplied, including any attachments, is complete, correct and up to date in every detail".  Bearing in mind the abovementioned certified financial information of K.S. Ko at 30 June 2001, it is clear that the answers provided by the applicant and Mr Wu of $600,000.00 in respect of the investment of K.S. Ko and also of $600,000.00 in respect of the net worth of K.S. Ko are significantly overstated.

1. The applicant was present in Australia for only 47 days during the approximately 3‑year period from the date of her arrival on 13 April 1999 until 12 July 2002.  On 16 April 1999 the applicant purchased a property situated at Unit 3, 847 Glenferrie Road, Kew, Vic.  The applicant and her son, Sin, reside in the Kew property whenever they are visiting Australia from Hong Kong from time to time and Sin attends schools in both Australia and Hong Kong.  While in Australia, Sin attends Grade 2 of the Glenferrie Primary School.   The applicant’s daughter, Karen, attends Melbourne University where she is enrolled completing the final year of a commerce degree course.  Naturally, Karen is required to remain in Australia on a more permanent basis until she completes her commerce course and during her mother's absence in Hong Kong she resides with her partner Mr Paul Chiu at 847 Glenferrie Road, Kew. 

2. In August 2002 an Alfa Romeo motor vehicle was purchased by the applicant from Lance Dixon Motors and registered in Karen's name and insured jointly in the names of Karen and Paul Chiu.  The purchase price of 847 Glenferrie Road, Kew was $520,000.00 and that the Certificate of Title for the property (T46) records the applicant as the registered proprietor.  Accordingly, neither the motor vehicle nor the Glenferrie Road property are assets of K.S. Ko.

3. The applicant provided HSBC Bank Australia Limited in April 2002 with a mortgage over her property at 847 Glenferrie Road, Kew as collateral security associated with the Bank granting a credit facility of $500,000.00 for K.S. Ko.  The following letter dated 20 January 2003 indicates that this facility was drawn on 24 April 2002:

   TO WHOM IT MAY CONCERN

   Re: Ko Kam Suen

   K S Ko Pty Ltd

   This is to confirm that we have established a facility of AUD 500,000 for K.S. Ko Pty Ltd which was drawn on 24^th April 2002.  Our records show that the loan application for K.S. Ko Pty Ltd was made on the 26^th February 2002.

   We therefore confirm that Ko Kam Suen, who is a director of K S Ko Pty Ltd, came to see us on 26^th February in consideration of this credit facility application.

4. The applicant gave sworn oral evidence entirely through the interpreter, in support of her following statutory declaration dated 19 January 2003 (exhibit A):

   STATUTORY DECLARATION

   I, KAM SUEN KO, of 3/847 Glenferrie Road, Kew 3101, in the State of Victoria, merchant, make statement as follows.

   1/.       I was born in Guangdong in China on 13 November 1954, and am presently aged 48.  I was resident in Hong Kong and hold a British National Overseas (BNO) passport issued by the Hong Kong Government on 30 December 1996 and which expires on 30 December 2006.

   2/.       I had applied for Business Skills Migration under the Business Owner category in Hong Kong, and was granted a subclass 127 permanent visa by the Australian Consulate General Hong Kong on 7 April 1999.  Included in the application were my daughter Ms Karen Luen Ho and my son Master Sin Hin Wu, who were also granted  subclass 127 visas on 7 April 1999.  I arrived in Australia with my children on 17 April 1999.

   3/.       Prior to coming to Australia, I had in 1992 established a trading company, Rionlon Company Limited, in Hong Kong.  I was, and still am, a 70% shareholder in Rionlon, the other shareholder and director being my defacto partner Mr Philip Wu, who is a Canadian citizen.  Mr Wu remains in Hong Kong as the managing director of Rionlon.

   4/.       In order to fund my business operations in Australia, I had remitted approximately A$I million to Australia, and purchased a unit in Kew as a home office.  On 8 February 2000, ten months after my initial arrival in Australia, I set up K S Ko Pty Ltd in Melbourne as a 100% shareholder and director of the company.

   5/.       K S Ko Ply Ltd commenced trading operations by sourcing Australian made limestone and marble blocks for export to Hong Kong and China, and entered into an agreement with Pacific Rim Resources Pty Ltd of 7 Dufton Court, Greenvale, Victoria 3059 for the export of these products.  However, as a new trading company, K S Ko Pty Ltd had considerable difficulty in obtaining finance and credit facilities from Australian institutions, hence I had to revert to using Rionlon in Hong Kong initially to issue letters of credit to the Australian supplier.  Up to July 2001, K S Ko Pty Ltd had exported US$220,648 limestone and marble blocks through Pacific Rim Resources.  A further export contract was entered into in March 2002 for Australian limestone and marble blocks worth US$18,000, for which partial shipment worth US$6,800 has been effected.

   6/.       At the same time, K S Ko Pty Ltd had also been carrying out negotiations and discussions with various Australian business organisations, including Hamersley Pacific, BP Australia, Donmar Industries and Austrade, regarding the sourcing of Australian iron ore, liquid petroleum gas, polyethylene resin and other wool products.  These negotiations are still progressing, and contracts for the export of Australian machinery and sheepskins have been entered into.

   7/.       In December 2000, when I was in China, I was diagnosed as suffering from uterine fibroid.  I had understood this to be a form of cancer and was naturally upset and worried.  It affected my ability to travel, and I stayed in H.ong Kong to undergo treatment.  As is popular with Chinese tradition, I had relied on Chinese herbal medicine initially, but had to ultimately undergo surgery in December 2001 for a total abdominal hysterectomy and bilateral sulphingo-oophorectomy.  As a result of my illness and absence from Australia, I had only accumulated 47 days physical presence in Australia from the time of my initial arrival to when the decision to cancel my business visa was made, and I had unintentionally delayed the return of my 24‑month Business Skills survey when it was sent to me by the Respondent to my Australian address and my daughter had inadvertently placed it in the drawer instead of attending to it promptly.

   8/.       Despite my illness and absence from Australia, I continued to manage K S Ko Pty Ltd on a day to day basis and at a senior level, and continued to be responsible for the company's trading and export activities.  Nevertheless, a delegate of the Respondent had determined that I had not demonstrated that I was making, or intended to make, genuine efforts to establish and operate an eligible business in Australia or utilise my skills in actively participating at a senior level in the day to day management of that business.  As a result of this determination, the delegate decided to cancel my subclass 127 visa on 12 July 2002.

   9/.       As the visa status of my daughter and son also depended on my own, so when my visa was cancelled, so were those of my children.

   10/. I am advised by my legal advisers, and understand my case is assessed in accordance with policy guidelines relating to the cancellation of business visas, particularly Migration Series Instruction MSI-133 issued on 30 May 1996 titled "Visa Cancellation Under Subdivision G - Cancellation of Business Visas". However, I also understand whilst MSI's relate to the Migration Act 1958 ("the Act") and the Migration Regulations 1994 ("the Regulations"), they are policy guidelines and lack the legislative authority of the Act or the Regulations.

   11l. In the decision record of the delegate dated 12 July 2002, the grounds for cancellation of my business visa are quoted on the basis that, under subsection 134(1) of the Migration Act 1958, I, as the applicant,

   (a)have not obtained a substantial ownership interest in an eligible business in Australia; or

   (b)are not utilising his or her skills in actively participating at a senior level in the day-to-ay [sic] management of that business; or

   (c)do 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.

   12/.     I understood under subsection 134(1)(a) that I was required to obtain a substantial ownership interest in an 'eligible business', and under subsection 134(1)(b) that I was required to be involved in the day to day management of that business at a senior level.  Subsection 134(10) defines an 'eligible business' to be

   'a business that the Minister reasonably believes is resulting in 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

   My company's trading record

   13/.     The delegate of the Respondent was satisfied that I had registered an Australian company, K S Ko Pty Ltd, and that I own 100% of this company, and I am listed as a director.  The delegate was also satisfied that my business has been involved in some business activity, although he was not satisfied the business was meeting any of the stated objectives of an eligible business as outlined in subsection 134(10).  It is my contention that the delegate of the Respondent had erred in coming to this conclusion.

   14/.     The delegate was of the view that, although K S Ko Pty Ltd had made some shipments of marble and limestone blocks to Wilfred Marble Engineering Ltd and to my own company Rionlon Company Ltd in Hong Kong, as evidenced by the company's 1999/2000 and 2000/2001 financial statements and tax returns, the income or turnover derived from these transactions appeared to have been minimal and the company's profit margin appeared to have been minimal.  Furthermore, the delegate was of the view that the number of transactions conducted by K S Ko Pty Ltd were insufficient to indicate a pattern of constant business activity.  In reaching this view, it is evident the delegate had relied on the policy guidelines in MSI-133, at paragraph 4.5.1.g, which suggested that an 'eligible business' should have a minimum turnover of A$100,000.

   15/. It is my contention that the delegate's views were based on an erroneous interpretation of the Migration Act, and a misapplication of MSI-133. My company, K S Ko Pty Ltd, was only established in February 2000, and it is to be expected that the 1999/2000 financial report, which covered barely four months of the company's trading, would not have shown up any significant trend in the company's trading patterns. Regarding the 2000/2001 reports, I wish to point out that my accountants, HMG Pacific, had inadvertently mistaken company gross profits to be commission, and that this has been rectified in an amended report for the 2000/2001 financial year, which also incorporates schedules of purchases and sales for the year ending 30 June 2001, and which had already been submitted to the Tribunal. The amended report shows that my company had achieved sales figures or, in other words, turnover of AUD463,534 and gross profits of AUD27,294 for the 2000/2001 financial year, which I believe can hardly be described as 'minimal'.

   16/.     The delegate of the Respondent had also concluded that my company did not meet criterion (c) of an 'eligible business' because, whilst I had purchased marble and limestone blocks from an Australian company, Pacific Rim Resources Pty Ltd, the products appeared not to have been produced in Australia in that the export documentation had identified Iran as the port of loading for the shipment of marble and limestone products to Hong Kong.  In this regard, I wish to point out that when I first approached the supplier, Pacific Rim Resources, to source marble, and limestone blocks for export, the supplier had given me various product samples, but had not disclosed their country of origin.  As I was dealing with an Australian company, I had believed in good faith that all of the samples given to me were Australian products, and I had proceeded to make up brochures, contained in the T‑documents as T23, for prospective buyers in Hong Kong and China.  As events turned out, many of the product samples chosen by Wilfred Marble Engineering in Hong Kong had in fact originated from Iran, a fact which I was never aware of.  Not being conversant in English, I had not perused the export documentation in detail, and only became aware of this when I received the decision record from the delegate of the Respondent and had it translated to me.  Since then, I have specifically instructed Pacific Rim Resources that I will only purchase products which are Australian made, and had since arranged a shipment of marble and limestone blocks from Sydney to Japan dated 6 June 2002 to the value of USD6,259.68.  In any event, it is my further contention that, regardless of the origin of the marble and limestone blocks, the export by my company of these products through an Australian exporter nevertheless contributed towards the development of business links with the international market, and meets criterion (a) of an eligible business at section 134(10) of the Act.

   17/.     The delegate of the Respondent said that whilst I had claimed to have been in constant consultation with the Australian Trade Commission Hong Kong since 1999, there is insufficient evidence to suggest I have actively sourced Australian products for promotion, marketing or selling to international markets.  In this regard, I wish to point out to the Tribunal that business negotiations are lengthy and protracted affairs, and contracts are entered into only after much discussion and bargaining.  I have continued business discussions to this day with various Australian business organisations, including Hamersley Pacific, BP Australia, Donmar Industries, Mudgee Sheep Skins, and Austrade, regarding the sourcing of Australian iron ore, liquid petroleum gas, polyethylene resin and other wool products.  These negotiations are still progressing, and a contract with R.I.T. Australia Pty Ltd for the export of Australian sheepskins worth A$168,360 was signed in April 2002, and a further contract with Brently Engineering Pty Ltd for the export of Australian machinery worth US$115,500 was entered into in June 2002, I have as late as last month concluded a shipment of Australian sheepskin to China, the total value of which was A$99,680.80.

   Utilisation of my management skills

   18/.     The delegate of the Respondent was also not satisfied that I had personally spent sufficient time in utilising my management skills at a senior level on a day to day basis to improve the operations of my company or to ensure that this business is meeting visa requirements.  In response, it is my contention that, for reasons beyond my control, I was diagnosed in December 2000 as suffering from uterine fibroid.  At that time I was in China, and I stayed in Hong Kong to undergo treatment.  I had relied on Chinese herbal medicine initially, as my Chinese culture and tradition had encouraged me to do so, but when this traditional treatment proved not to be effective, I ultimately had to undergo surgery in December 2001 for a total abdominal hysterectomy and bilateral sulphingo-oophorectomy, evidence of which had already been presented.  As a result of my illness and prolonged treatment, I was able to only accumulate limited physical presence in Australia, and was prevented from physically attending to my Australian business on a full-time basis.  However, despite my illness and absence from Australia, I had continued to manage K S Ko Pty Ltd by telephone and fax on a day to day basis and at a senior level, and continued to be responsible for the company's trading and export activities.  During this time, my daughter Karen was studying in Melbourne, and had in my absence assisted in the running of the business substantially.  My daughter also travelled to Hong Kong in September and again December of 2001 to stay with me and provide support, particularly during my operation and recovery. During this time, because she had to assist me in the running of the business, and because of her worries over my illness, my daughter's results at university suffered to the extent that she risked suspension from university at one time.

   Summary

   19/.     Despite during the early parts of my company's operations when I had inadvertently arranged for the export of limestone blocks, unaware of its non‑Australian origins.  I had rectified this promptly as soon as I became aware of the facts.  My company, K S Ko Pty Ltd, is now exporting and promoting solely Australian made products, including limestone and marble blocks, machinery and sheepskins.  I wish to submit to the Tribunal that evidence demonstrates that K S Ko Pty Ltd, in its activities in exporting and promoting Australian products for profit, is developing or will develop business links with international markets, and is resulting or will result in the export of Australian goods or services.

   20/.     I wish to further submit to the Tribunal that in spite of my illness and consequential absence from Australia, I had been actively involved in the day to day management of K S Ko Pty Ltd and making decisions that affected the direction of the company by telephone and through my daughter, who was studying in Australia, and I was able to maintain the company's trading pattern until I became well again.  I also submit that carrying a business denotes activities for the purpose of profit undertaken on a continuous and repetitive basis, even if the business is conducted in a small way.

   21/.     In conclusion, I wish to humbly and respectfully submit that when all the circumstance surrounding the case are taken into account and placed in context, the balance falls clearly in favour of permitting me and my children to remain in Australia on a permanent basis.

   AND I MAKE this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of an Act of the Parliament of Victoria rending persons making a false declaration punishable for wilful and corrupt perjury.

   …

1. The applicant said that her daughter, Karen, is 24 years of age and that her son, Sin, is 7 years of age.  She said that Karen and Paul have been living together for over a year in her Kew property and that they intended to marry in the future.  She said that Sin has not been living in Australia very long and has enjoyed attending school for a short time at the Glenferrie Primary School.  Sin also attends a school in Hong Kong when not visiting Australia with the applicant.  She said "Sin wants to study in Australia, and actually learn about the culture in Australian society and, therefore, I submit my applications to come to live in Australia".  The Tribunal asked:

   Are you saying that your application to live in Australia was so that your children could obtain an education in Australia?

The applicant’s answer:  "Yes".  The Tribunal asked:

So that was your primary reason for coming to Australia, so that your children could be education in Australia?

The applicant’s answer: 

Because – and also – yes, but also because after Karen had studied in Australia, I found her very good.

Mr Gerkens asked:

What was your primary reason in going to the Embassy or Commission and applying for a visa?  Why did you apply for a visa?

The applicant’s answer: 

After – after my trip to Australia I found Australia very good in every aspects. 

Mr Gerkens asked:

But why did you go and apply for a visa?  What was your reason for applying for a visa?

The applicant’s answer: 

Because I love Australia, basically, and because I found Australia very good place. 

The Tribunal asked:

And a good place to educate your children?

The applicant’s answer:  "Yes".

1. Mr Ty Sam, the applicant’s accountant, gave sworn oral evidence and said that he held a Bachelor of Accounting Degree from RMIT and was also a registered tax agent.  He said that he has been the accountant for the applicant for the last four to five months, having replaced her previous accountant, Mr Frankie Yim CPA.  Accordingly, Mr Sam's value as a witness concerning the affairs of K.S. Ko prior to his engagement by the applicant, is limited. 

2. Mr Sam was referred to the letter from HSBC Bank Australia Ltd dated 20 January 2003 to the applicant regarding the creation of a $500,000.00 facility for K.S. Ko which indicates that the facility was drawn on 24 April 2002.  Mr Sam said that the moneys were partly used by the applicant to purchase the Alfa Romeo motor vehicle and that none of the funds have been drawn by K.S. Ko or for use by K.S. Ko to date.  Mr Sam was not aware of any business plan for K.S. Ko for the future. 

3. The hearing of this matter was adjourned on 21 January 2003 and resumed on 25 March 2003.  At the resumed hearing the applicant provided the Tribunal with the following written statement dated 15 February 2003 to further clarify her position:

   I, Kam Suen KO, wish submit facts, which demonstrated the genuine efforts of my business activities and achievement from 1999 until 2002 as follows (1 to 5).

   I take this opportunity also wish to expand some of the points (From 6-12), which reviewed by the AAT on 21st January 2003.  During that review, I could not clearly understand the interpretation of some points, which I hereby wish to clarify and provide further support.

   1. I want to migrating to Australia for the following Purposes:

   -    I like this civilize, democracy society and the lifestyle of Australia;

   -    There are rich natural resources to be explored in Australia;

   -    I find many good products suitable for the market in China;

   -    Australia is a place where I could develop my business.  Because I have substantial business links in China.

   I have made up my mind to utilize my wealth of business experience gained in China for the last 15 years.  I endeavoured to make a connection and match with Australian resources. I focused in exporting Australia goods or service to Chinese market.  I have certain that I would achieve fruitful results in the near future, which benefit to both Australia and myself, create employment opportunity, contribute to Australia business growth, and my children will enjoy their education and lifestyle also.

   2. My skills:

   -    I have an entrepreneurial skills, business innovative skills;

   -    I have the ability to find buyers, supplier, select and inspect goods.  I can handle purchasing, sales and complete business transactions.

   -    I have experience to make use of the banking services for business.

   -    I have the ability to employ other people's strength. I could nurture one's potential.

   International Trading: It takes longer to develop, understand, it require logistic preparation and selling.  It would be no immediate result.  Since 1999, I have put in over three years effort to develop Australian business..  I have contacted lots of business.  I have tried to overcome much difficulties associate with my newly establish company.  I endurance, put in the hard work and resources, even when I was ill, to contact business associate.

   I have set up K S KO Pty Ltd in year 2000, continue working hard and I could see some progress.

   3. Business achievement and activity: (Please reference enclosed a, b.)

   At the beginning of 2001, I have started K S KO Pty Ltd (here after called K S KO)'s business.  From 2001 to the end of 2002, K S KO had completed 8 shipments, with total turnover amount AUD$574, 998.55.  Details of these transactions are as follows.

   A) Sourcing from Pacific Rim Pty Ltd. (hereafter called Pacific Rim) for

   Granite/Marble supplies:

   1^st shipment: 07/03/2001 USD$55,747.84

   2^nd shipment: 07/04/2001 USD$13,537.32

   3^rd shipment: 04/04/2001 USD$149,185.80

   4^th shipment: 27/04/2001 USD$7,336.11

   5^th shipment: 06/06/2001 USD$7,651.36

   6^th shipment: 26/06/2001 USD$4,658.91

   7^th shipment: 01/01/2002 USD$6,259.68

   B) Sourcing from R.I.T. Australia Pty Ltd. For Lamb Skin supplies:

   8th shipment: 14/12/2002 USD$52,920.00 (2 containers)

   These results demonstrated my 3 years effort.

   ·  Both buyer in China and supplier in Australia were totally satisfied.

   We look forward to a prosperous future.

   ·  We expect next shipment for 3 containers value approximate value AUD$150,000.00.

   4. Fore coming business: (please refer to enclosed c.)

   The following business has been processed:

   C) Machinery parts: Thermo Bar and Contact Bar Systems & installation services for total value approximately USD$115,500.00 (or AUD$218,290.00)

   These systems are major parts for Production Lines in Packing machinery.

   -K S KO has put lots of effort to achieve the contract.

   -The Chinese buyer has granted a 3 years exclusive contract to K S KO for sourcing and purchase machinery and/or parts form Australia.

   This type of contract requires my involvement in Australia.

   5. Enquires in progress:

   After I.T. bobble-bursed, world economy has been declined.  Then "9.11 incidents" further affected the economy seriously.  I would like to ask your consideration for the difficulties we encountered in the international trading situation:

   -The workload in international trade has been harder relative to domestic business.

   -There has been increasing difficulty in commercial practice, requirement, rules and legal regulations.

   -It takes longer to finalize a business deal. The successful rate is lower.

   Following cases that K S KO hasn't received any positive result:

   -PETROLIUM GAS (LPG);

   -IRON ORE;

   -LD.POLYETHYLENE RESIN;

   The followings are still in progress; I am trying to make the business happen;

   -EUCALYPTUS OIL

   -FRUIT JUICE

   -TALLOW

   -DDGS HIGH PROTEIN FEEDSTUFF

   K S KO's revenue from business has not been enough to cover it's cost, yet.  I understand this is the calculative cost of capital in develop a new business.  My business plan has been budget and prepared for such stage and even further.  I am confident to have a prosperous business in near future.

   I wish to take this opportunity to clarify the following points from the last attend AAT on 21st January 2003. (Point 6 to 12)

   6. Connection between K S KO and Rionlon Company Ltd. (here after called Rionlon);

   -K S KO and Rionlon are two separate entities, there aren't any special business arrangement between them. Where as: ­

   -K S KO and Rionlon have the common shareholder and director: Kam Suen KO (here after called Ms KO). (Philip WU is the CEO Rionlon in Hong Kong.)

   I am a director in both companies, during the process of migration to Australia, it has been in my agenda to shift my Chinese business links to Philip WU.  I need to train also staff to take over my role.

   At the beginning of year 2000, I had negotiated with HSBC for a credit facility.  That application has been turned down.  (Reference: enclosed f, letter from HSBC dated 4/2/2003).

   Therefore, the first contract K S KO had with Wilfred Marble was suspended.  I requested Rionlon which granted a temporary finance support to K S KO just to bridge this business.

   7. To clarify the misrepresent of (facility AUD500, 000.00 was fully drawn down);-

   HSBC approved a credit facility for AUD$500,000.00 as of 22/4/2002.  There was NO drawn until 5/12/02.  The first drawn down on 6/12/02 for AUD$110, 000.00 for prepayment of 3 containers of lambskin supplies.  Please refer to HSBC letter dated 4/2/2003 for correction.

   K S KO needs not rely Rionlon for future business.

   8. The reason for the Pacific Rim invoicing Rionlon.

   -Beginning of 2001, K S KO's first business was financed by Rionlon. 

   Rionlon applied Letter of Credit (L/C) from its banker.

   The supplier, Pacific Rim, had to invoice and drawn the payment from Rionlon's account through the L/C.

   Invoice must be to the L/C applicant for the proper banking documentation.

   Please note that Rionlon only acted as financial support.

   -K S KO took title of the goods and contracted with supplier Pacific Rim.  K S KO took all risk and made the Sales Contract and Invoice to its buyer, Wilfred Marble Eng. Ltd.

   9. The reason for the incorrect description terms - Commission

   Wilfred Marble is the biggest Marble engineering Mills in China and Hong Kong.  Their major shareholder is CTN Group Ltd, a listing company in Hong Kong.

   Following shipments of first contract with K S KO, goods has been delivered, I requested to Wilfred Marble to split payments to Rionlon and K S KO.

   -The L/C drawn amount plus miscellaneous reimbursement went to Rionlon.

   -The "remainder" went to K S KO.

   However, according to Mr. Lam (person in charge) of Wilfred Marble stated that Wilfred Marble did not allow the above split payments into 2 different companies for one contract.  So the payments were held up.

   The only possibility Mr. Lam would agree to pay the "remainder" was to use the term "Commission".

   Accordingly, I submitted the necessary documents and Invoices.  Hence the term "commission" had originated into this business transaction and printed on the some documents and also on the T/T record.

   From my point of view, Rionlon and K S KO both need the payment badly.  We can't afford the time for arguing such term "commission" or " surplus / profit".  At that moment, I have no other concerned, rather than, we would receive full amount on time.

   HMG Pacific Chartered Accountants had prepared financial statement and submitted to Immigration Affairs. These documents were misleading by the terms "commission" and did not bring to my attention.

   In July 2002, I realised the misleading on these financial statement.  I request Accountant Yim of HMG to rectify and amend these financial statement.  He checked with all my supporting documents, including Sales contract, Suppliers contract, Invoices, L/C and payment Slips, he then concluded the business nature is buy and sale instead of agency "commission".  (Please reference: - amended statement enclosed d).

   10. The 24-month survey lodge: - AUD600, 000.00

   With the purpose to reside and operating business, I bought my house, car and other office facilities amounted to approximately AUD$600, 000.00.  And because I hold 100% share in K S KO, without intention but quite often, I mix up the concept and terms "my total investment in Australia" or "my business's investment in Australia."  I therefore incorrectly declared that "my total investment in Australia" was $600,000.00.  Please accept my sincerely apology for being ignorance on these conceptual terms.

   11. In answering to the Tribunal member, Ms KO had mentioned there wasn't any Debt in Rionlon's account;

   My answer was presented based on the following ideas:

   1.The current business operates continuously.  In case, there is a O.D. facility for the Rionlon.  Rionlon only uses it temporarily for payment of supplies.  Once sale is made.  Revenue of the sale will be more than sufficient to cover the O.D.

   2.To my memory, O.D. balance is not usually appeared on the bank account.  There is always net-cash balance.  Also, positive balance always shown on the ledger of the books.

   3.On the Rionlon' financial report (excluding directors loan)

   Account payable:     HKD22, 582, 939.00 – HKD1, 554, 223.00

   =HKD21, 028,7 15.00

   Account receivable: HKD8, 538, 577.00 + HKD16, 586, 826.00

   =HKD25, 107,403.00

   Account receivable was greater than Account payable. I therefore stated and presumed there wasn't any debt.  Please accept my apology for the incorrect statements. Thanks to Mr. Ty Sam, Accountant who enlighten me on this point.

   12. Spent only 47 days in Australia: (Reference Enclosed h, I, J & k)

   The reason I need business travel and spent a lot of time abroad because of the following reasons:

   1.Arrange and planning for change of works and business. Visiting new buyers and markets.

   2.I had to spent a lot of time abroad for working out and finalizing these international business which specified on the above point 3, 4 & 5,

   3.At the earlier stage of searching for business, I spent more time in the buyer's market to look for more chances.  Unless more sourcing or chance was ready for business, I could contact personally in Australia.

   4.In fact, whenever there is business concerned, I could be back and finish all work that require of me.  For example:-

   -    Formed K S KO, Applied for Tax File Number, Registration and lodgment of Income Tax Return etc.

   -    Arrange finance and banking facility.

   -    Bought my house for reside and operating business.

   -    Apply for mortgage of credit facility (reference enclosed H, I)

   -    Visiting buyers, suppliers and meetings to make business. (reference enclosed J)

   5.In the year 2000 my illness became serious, which affected my travel.  I had To stay close to my doctor, slow down on the business activities.  I rely mostly On telephone, some fax and e-mail to communicate and make business. (Reference enclosed k).

   13. Daughter: (reference enclose L)

   My daughter, Karen Ho, she has been living in Melbourne for 8 years;

   -In 1995 she came to Melbourne to study English.

   -From Jan 1996 to Dec 1999 she finished High school Grade9-12 in Methodist Ladies College.

   -Since Jan 2000 she has been studying in Melbourne University.  She expects to graduate this year.

   During these 8 years, she gets used to the Australia lifestyle.  She has a stable boyfriend for years and lives together and intends to get married.  The way she brought up is same as other youths in Melbourne; the way of education, culture, democracy society, living, dinning, transportation, dressing etc.

   She belongs to this city.  So does her future.  Please consider if she had to be sent away from her everyday live, it is an unbearable disaster for this young lady?

   14. Summary:

   After these 3 years exploration in Australian business, in different areas and levels, I am confidence that I will be successful in doing business in Australia, coupled with my experience, skills and financial position.  (Please refer to the above points 4 & 5) It is clear that my plan to move to Australia has been in the right step and progressing well.

   I was shock to receive the letter of Visa cancellation, dated 12/7/2002.  My business achievements are in facts and I made a genuine efforts.  There was a period which I have been slow down due to my illness.  Other than that my effort have been fruitful to achieve actual business.  The length of time I spent was in line with the norm in International trade. I have not doing so to just get by Immigration Department.

   I would like to ask for the Tribunal Member's considerations including the followings:

   -At the early stage of developing the business there were lots of obstacles, I am not perfect in present on all facts and documents.  I should say, I have misrepresent on conceptual terms, i.e. point 9 & 10.  But I suppose these mistakes neither affect the actual business activities, nor down grade my 3 years genuine efforts and the business achievements

   -The major reason that limited my business achievement was "my illness".  Unfortunately, this painful experience is unavoidable.  I take it as "Life" with an open mind.  I also agree with the Solicitors and Minister of Immigration Affairs that "my illness" would not be the excuses for lower standard to measure my achievements, in anyway.

   But I would ask the Tribunal Member to consider "my illness" should not be a proof that "I could not have been engaged in the day-to-day management".  Where as the measurement should consider more on the final achievement and the result that I have achieved. (Reference to previous points 3: - K S KO operated from 2001 until end of2002 turnovers AUD$574, 998.55).

   …

4. The applicant provided a copy of the following letter from the HSBC Bank Limited dated 4 February 2003:

   …

   This is to confirm that we have established a facility of AUD 500,000 for K S Ko Pty Ltd.  This facility was applied for on 26th February 2002 and approved on 14^th March 2002.  The current outstanding of the loan is AUD105,978.84.

   This is also to confirm that when the company was first established, they did approach us for credit facilities but because the company was at that time just newly established with no trading history, we were unable to approve a facility for K S Ko Pty Ltd.  However, since the company has been trading since 2000 and now has a trading history with adequate security offered to the bank, we have therefore approved the facility of AUD500,000 to the company.

   In summary, the total funds with the bank for both Ko Kam Suen and K S Ko Pty Ltd are in the region of AUD 333,516.00 as at today.

5. Karen gave sworn oral evidence in support of her following statutory declaration dated 19 January 2003:

   STATUTORY DECLARATION

   I, KAREN LUEN HO, of 3/847 Glenferrie Road, Kew 3101 in the State of Victoria, student, make statement as follows.

   1/.       I was born in Guangdong in China on 24 October 1979, and am presently aged 23.  I was resident in Hong Kong and hold a British National Overseas (BNO) passport issued by the Hong Kong Government on 11 January 1997 and which expires on 11 January 2007.

   2/.       Ms Kam Suen Ko is my natural mother.  She had applied for Business Skills Migration under the Business Owner category in Hong Kong, and was granted a subclass 127 permanent visa by the Australian Consulate General Hong Kong on 7 April 1999, as a result of which me and my brother Master Sin Hin Wu were also granted subclass 127 permanent visas.  I arrived in Australia with my mother and brother on 17 April 1999.

   3/.       On 8 February 2000, ten months after our initial arrival in Australia, my mother set up K S Ko Pty Ltd in Melbourne as a 100% shareholder and director of the company, and commenced trading activities.

   4/.       Due to her business activities, my mother had to travel extensively to Hong Kong and China, and was away from Australia for a considerable amount of time.  In the mean time, I had commenced a Bachelor of Commerce degree course at Melbourne University, and remained in Australia to pursue my studies.

   5/.       In December 2000, when my mother was in China, she was diagnosed as suffering from uterine fibroid.  It affected her ability to travel, and she stayed in Hong Kong to undergo treatment, and ultimately underwent surgery in December 2001 for a total abdominal hysterectomy and bilateral sulphingo-oophorectomy.  Despite her illness and absence from Australia, she continued to manage her company on a day to day basis and at a senior level, and continued to be responsible for the company's trading and export activities.  During this time, I was studying in Melbourne, and had assisted my mother in the running of her business.  I also travelled to Hong Kong in September and again December of 2001 to stay with and provide support to my mother during the period of her operation and recovery.  Because I had to assist my mother in the running of the business, and because of my worries over my mother's illness, my results at university suffered to the extent that I had risked being suspended from university at one time.

   6/.       Nevertheless, a delegate of the Respondent had determined that my mother had not demonstrated that she was making, or intended to make, genuine efforts to establish and operate an eligible business in Australia or utilise her skills in actively participating at a senior level in the day to day management of that business.  As a result of this determination, the delegate decided to cancel my mother's subclass 127 visa on 12 July 2002.  And as the visa status of myself and my brother also depended on that of our mother, so when our mother's visa was cancelled, so were those of myself and my brother.

   Cancellation of visa will cause extreme hardship

   7/.       I wish to submit that cancellation of my own visa will cause extreme hardship to myself as I am currently studying accountancy at Melbourne University.  Even though the delegate of the Respondent had stated he did not believe this was in itself a hardship as I could have continued to study in Australia by applying for a student visa, it is my belief that once my visa is cancelled, Immigration will invariably take it into account and hold it against me in any future dealings I may have with them.  Furthermore, I had come to Australia to study firstly in secondary school and then at university, and have now been in Australia for seven and a half years, and I have immersed myself in the Australian way of life totally.  As I travel overseas, I always regard returning to Australia as 'coming home'.  Most of my friends now are Australian, and I look forward to a future professional career in Australia after I finish my studies at university, which would be put at grave risk if I did not retain my residence.

   8/.       Further, in relation to my younger brother Master Sin Hin Wu, whose application before the Tribunal is linked to mine, I wish to submit to the Tribunal on behalf of my brother, who is only 7 years of age, that the United Nations Conventions on the Rights of the Child (the Convention) may need to be considered insofar as what is in the best interest of the child, including examination of issues such as his education in the present and future (which forms part of the reason as to why I am studying in Australia myself), and lifestyle in Australia.

   Summary

   9/.       In conclusion, I wish to humbly and respectfully submit that when all the circumstance surrounding the case are taken into account and placed in context, the balance falls clearly in favour of permitting my mother, myself and my younger brother to remain in Australia on a permanent basis.

   AND I MAKE this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of an Act of the Parliament of Victoria rending persons making a false declaration punishable for wilful and corrupt perjury.

   …

1. Karen gave evidence that she first arrived in Australia with a cousin in 1995 and following her arrival she attended "Acasia College" for six months where she completed an English language course.  Karen then enrolled as a student at Methodist Ladies College for four years where she completed her VCE.  Karen said that she has been living with her partner Paul Chiu for approximately 18 months and they expect to marry towards the end of 2003.  Mr Chiu and his family migrated to Australia approximately 11 years ago and are now Australian citizens.  Mr Chiu is a graduate of Monash University with a degree in Business Information Systems.  He is presently employed as the general manager of a computer retail store.  Karen said that her relationship with Mr Chiu would be seriously disrupted if her visa was cancelled and she was unable to obtain a replacement visa.

2. Karen returned to Hong Kong twice between 1999 and 2001 as the result of her mother's severe illness.  As the result of the interruption to her studies, she failed some subjects in her Commerce course, which she fears may adversely affect any application for deferment to the university if she is required to return to Hong Kong as the result of a cancellation of her visa.  Karen said that all of her friends now are living in Australia which would also cause her hardship if she is required to return to Hong Kong.

3. Karen said that she works part time for K.S. Ko.  She attends to the banking and also prepares e‑mail and facsimile correspondence to prospective suppliers and customers.  She expects to continue this work with K.S. Ko following the completion of her Commerce course. However, she will also be seeking permanent employment and work experience elsewhere in Australia.

4. Mr Dominic Yau, of Fernandez Canda Gerkens, the solicitor for the applicant, gave sworn oral evidence.  Mr Yau said that he had previously worked for the Department of Immigration and Multicultural and Indigenous Affairs (the Department) for several years from 1986, prior to obtaining his Law Degree and commencing to practise as a solicitor.  During his employment with the Department he had experienced the consideration given to applicants seeking student visas.  He is of the opinion that prior cancellation of a visa will have a negative impact on considerations by the Department in respect of any subsequent new visa application.  He is of the view that this negative impact usually results in either a long delay by the Department in approving a new visa application or the refusal of the application.  Mr Yau expressed his view that the cancellation of Karen's business skills visa will have a detrimental affect upon her ability to obtain a replacement student's visa, which she would require to allow her to complete her Commerce Degree course in Australia.

5. The Act provides the following:

   134(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).

   (4)       Subject to subsection (5) and to section 135, if:

   (a)the Minister cancels a person’s business visa under subsection (1) or (3A); and

   (b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

   (c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

   the Minister must cancel the other person’s business permit or business visa by giving written notice to that person.

   (5)          The Minister must not cancel the other person’s business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

   …

   (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;

   …

   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;

6. The respondent referred the Tribunal to the following "Migrant Series Instructions" which are followed by decision‑makers in the Department as guidelines in respect of cancellation of business visa decisions:

   4.5      What is "genuine effort"?

   4.5.1If, after 24 months, a migrant is not in business, he/she must establish that a "genuine effort" has been made to engage in business since arrival.  The Minister must assess "genuine effort".  S 134(3) of the Act lists any or all of the factors which the Minister may take into account:

   (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 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 s 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).

   [Notes referring to factors listed above.  Decision makers may take account of these notes to guide them interpretation of 4.5.1.

   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.]

   4.5.2.While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled.  The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis.  For example, while the factors listed in 4.5.1 above may be indicative of "genuine effort", lack of them will not necessarily be decisive.  The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made "genuine effort".  A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.

7. The respondent contends that the applicant does not satisfy guideline 4.5.1 because she did not have a physical presence in Australia for more than six months from the date of her first arrival as a business skill class visa holder on 13 April 1999 until the date of the cancellation of the visa by the respondent on 12 July 2001.  It is also contended that the applicant does not satisfy the minimum A$100,000.00 requirement for value of ownership interest in eligible business in Australia referred to under guideline 4.5.1f and also the minimum A$100,000.00 business activity referred to under guideline 4.5.1g.  The respondent was unable to provide the Tribunal with any legislative authority provided by the Act in support of their contention that because the applicant did not satisfy the abovementioned guidelines included in the Migrant Series Instructions, her visa should be cancelled.

8. In the reasons for decision in the matter of Re Abraham and Department of Immigration and Multicultural Affairs (1997) 50 ALD 611, Deputy President McMahon made the following observations concerning guidelines. The Tribunal concurs with these observations; particularly those concerning the appropriateness or not of guidelines that go beyond the terms of the Act:

   …

   21.          It will be seen that the terms of both sets of guidelines bear little resemblance to the words of the statute in paragraph 13(4)(b)(i). This was pointed out in Re Lo and Department of Immigration & Ethnic Affairs (1993) 32 ALD 235, Re Chai (1994) 36 ALD 751 and in a number of other cases.

   22.         The guidelines purport to add requirements additional to those of the statute. All that an applicant need show in order to enliven the discretion, is that he was engaged in activities beneficial to the interests of Australia. In deciding whether the discretion will then be exercised benignly, it seems to me that it is not open to the Minister to tack on further preconditions. Guidelines indicating the way in which a discretion will be exercised can be particularly useful to departmental officers and to applicants. The discretion to be exercised, however, is created by the terms of the statute and must be exercised consistently with the scope and purpose of the creating legislative phrase. Guidelines are appropriate in this case, where they indicate the way in which the Minister will view periods spent in permitted activities.  I do not consider that they are appropriate when they go beyond the terms of the statute and add qualifications which applicants must meet, which have not been considered by Parliament.

9. The applicant is a very successful and extremely competent businesswoman.  She owns a controlling interest in the large and highly profitable Hong Kong trading company named Rionlon.  She and her de facto partner own all of the issued shares in Rionlon with the applicant holding 70 per cent of the shares and her partner Mr Chong (also known as Philip Wu) owing the remaining 30% of the issued shares.  Mr Wu is a citizen of Canada and is the Hong Kong resident managing director of Rionlon.  He is also the father of one of the secondary visa applicants in this matter, the son of the applicant Sin Hin Wu. 

10. Rionlon earned a net profit before tax (NPBT) of HK$1,862,220 from sales of HK$150 million for the year ended 31 October 2000 and a NPBT of HK$271,108.00 from sales of HK$73 million for the year ended 31 October 2001.  It is the applicant’s evidence that Rionlon made a profit of around HK$4 million for 2002.  The operating expenses of Rionlon include the expense – "directors remuneration" of HK$922,000.00 for 2000 and HK$945,000.00 for 2001.  The balance sheet of Rionlon shows that the company had net assets and shareholders funds as at 31 October 2000 of HK$2,483,971.00 and as at 31 October 2001 of HK$2,748,372.00.  It is the applicant’s evidence that Rionlon is debt free and that it has an undrawn bank credit line facility of HK$20 million which is available for use by Rionlon or by her wholly owned Australian company K.S. Ko.

11. The applicant continues to reside in Hong Kong and her evidence is that she resides at Kings Park Road, Kowloon.  She was granted business skills visas for herself and her two children Karen and Sin on 7 April 1999 and came to Australia using that visa on 13 April 1999.  The applicant’s evidence is that she remained in Australia for one week during which time she made arrangements for the registration of her wholly owned Australian company K.S. Ko.  The applicant returned to Hong Kong in April 1999 for 9 to 10 months.  It is also the applicant’s evidence that she has been in Australia for only 47 days in the initial 3‑year period from the date of her arrival on 13 April 1999 to 12 July 2002.  Part of her absence was as the result of her need to undergo surgery in Hong Kong which is referred to in paragraph 7 of her abovementioned statutory declaration.  The applicant contends that if her business skills visa is not cancelled as the result of this application, she will spend 60 per cent of her time in Australia in the future and 40 per cent of her time in Hong Kong.

12. The applicant owns all of the shares in K.S. Ko and is the sole director and secretary of that company.  She has not increased her $10 share capital investment in the company since its date of incorporation on 8 February 2000.  The applicant purchased a property for $520,000.00 situated at 847 Glenferrie Road, Kew in April 2000 and the title to that property is registered in her name as the sole proprietor.  A mortgage was provided by the applicant in favour of HSBC Bank in April 2002 as the security collateral required by the bank for the establishment of a $500,000.00 facility for K.S. Ko.

13. The Glenferrie Road property is used by the applicant as her Australian residence when she visits Australia.  The applicant’s son Sin also resides at the Glenferrie Road property when he is not living in Hong Kong with his father Mr Wu.  Sin attends schools in Hong Kong and also in Australia when visiting here with his mother.  The applicant’s daughter Karen, and her partner Paul Chiu reside in the Glenferrie Road property on a more permanent basis.  The applicant expects that Karen and Paul will marry in the future.  Karen attends Melbourne University where she is completing the final year of her Commerce Degree course.  In August 2002, the applicant purchased an Alfa Romeo motor vehicle from Lance Dixon Motors for $46,400.00 which is registered in Karen's name and insured in the names of Karen and Paul jointly.

14. Mr Sam, the applicant’s accountant, provided the Tribunal with a schedule of shipment details of granite blocks in which he contends that K.S. Ko exported goods to Japan on 5 June 2002 with a cost of $10,703.00 and at a sale price of $11,884.00.  Also recorded is the export of lamb hide by K.S. Ko on 14 December 2002 at a sale price of $99,580.00.  Mr Sam did not support his contentions by providing the Tribunal with documentation evidencing that the above exports, claimed to have been made in 2002 by K.S. Ko, resulted from the purchase and sale of Australian goods.  Mr Sam also provided the Tribunal with a schedule setting out future exports by K.S. Ko where contracts have been signed and K.S. Ko is "awaiting supplies for shipment".  The schedule indicates that contracts have been entered into by K.S. Ko on 24 June 2002 with Brently Engineering re the export of machinery parts of $218,290.00, on 21 March 2002 with Pacific Rim for the export of granite of $34,412 and on 22 April 2002 with Rit Australia for the export of lamb skins of $168,360.00.  Additionally, clause 6 and clause 17 of the applicant’s statutory declaration refers to ongoing discussions that are taking place with the applicant and her partner Mr Wu "with various Australian business organisations including Hamersley Pacific, BP Australia, Donmar Industries, Mudgee Sheep Skins and Austrade regarding the sourcing of Australian ore, liquid petroleum gas, polyethylene resin and wool products" for export by K.S. Ko.

15. On 25 March 2003 the applicant gave additional oral evidence that the discussions with Hamersley Pacific were continuing regarding the export of marble however, her negotiations with BP Australia concerning the export of liquid petroleum gas have stalled at the moment because BP Australia conducts exports only via established agents, and K.S. Ko will therefore need to obtain BP agency accreditation prior to participating with future exports of liquid petroleum gas.  Discussions with Donmar Industries have terminated.  Mrs Ko is confident that if her visa is not cancelled, her increased presence in Australia to 60 per cent of her time will enable her to expand K.S. Ko's export opportunities beyond the present scope of sheep skins, marble, ointment and computer parts etc.  She anticipates that the future growth of K.S. Ko will require her to increase the number of staff employed by the company beyond herself as managing director and Karen as part time clerical assistant, to include management marketing personnel.

1. The Tribunal adopted the principal of administrative review of having regard to all of the facts and circumstances that were submitted by the parties to have occurred up to the date of the hearing. The Tribunal is mindful that ss.134(2)(c) of the Act prescribes that the Minister must not cancel a business skills visa if the Minister is satisfied that the holder intends to continue to make a genuine effort to comply with ss.134(2)(a) and ss.134(2)(b) of the Act and, ss.134(3) of the Act specifies certain matters that may be taken into account in determining whether a person has made a genuine effort. The Tribunal shall also bear in mind the principles propounded by Justice Davies in the decision of Freeman v Secretary, Department of Social Security (1988) 19 FCR 342, referred to in the following paragraph taken from the decision of Deputy President P.K. Handley on 13 January 2002 Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54:

   …

   32.      Mr Chami, for the Respondent, drew the Tribunal's attention to the decision in Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342, where Justice Davies drew a distinction between decisions to cancel a pension or benefit and decisions in respect of a refusal to grant a pension or benefit.  In the case of a decision to cancel, the Tribunal is limited to a consideration of events up to the time of the primary decision, whereas in the case of a decision to refuse the grant of a pension or benefit, the Tribunal is not so limited. Mr Chami referred to a number of decisions in which this approach had been followed including two recent decisions by the Tribunal in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783.

2. The applicant owns all of the share capital of K.S. Ko and has funded the business with loans of $36,335.00 to 30 June 2000 and $53,226.00 to 30 June 2001.  In April 2002, the applicant granted a mortgage over her residence at 847 Glenferrie Road, Kew, Vic in favour of HSBC Bank Australia Ltd in order to establish a credit line facility of $500,000 for use by K.S. Ko in its operations.  Accordingly, the Tribunal finds that the applicant had obtained a substantial ownership interest in a business in Australia at the date of the reviewable decision by the respondent on 12 July 2002.

3. The Tribunal accepts the applicant’s evidence demonstrating that her ability to develop K.S. Ko from its date of registration on 8 February 2000 was materially inhibited as the result of the severity of her long illness which was diagnosed in December 2000 and resulted in surgery in December 2001 (refer paragraph 7 of the applicant’s declaration herein). In March to June 2001, K.S. Ko was involved as a commission agent in a transaction with Rionlon exporting marble, to Hong Kong. The transaction involved six shipments of marble costing $429,528.00 supplied by an Australian company named Pacific Rim Resources Pty Ltd and the marble was sourced from Iran. Accordingly, the transaction does not satisfy the eligible business test prescribed under ss.143(10)(c) of the Act because they were not Australian goods. The applicant has since instructed Pacific Rim Resources that the business will only purchase products which are Australian goods. The transaction does, however, satisfy the eligible business definition prescribed by ss.134(10)(a) of the Act concerning the development of business links with the international market.

4. On 5 June 2002 K.S. Ko exported marble to Japan costing $10,703.60 and sold for $11,884.70 and this transaction also precedes the date of the primary decision‑maker on 12 July 2002. The applicant’s contention, which is not supported by documentary evidence, is that this transaction involved the export of Australian goods and therefore satisfies the eligible business test prescribed under ss.143(10)(c) of the Act. Since the date of the decision of the primary decision‑maker K.S. Ko is said to have exported lamb hide in December 2002 of $99,580.00. It is also contended by the applicant that K.S. Ko has signed contracts dated 24 June 2002 for the export of machinery parts costing $218,290.00, dated 21 March 2002 for export of granite costing $34,412.00 and dated 22 April 2002 for the export of lamb skins costing $168,360.00 and that K.S. Ko is awaiting the respective goods to be made available by the supplier to enable export shipment. These post 12 July 2002 exports clearly demonstrate that the applicant intends to continue to make a genuine effort to meet the eligible business definition prescribed under ss.134(10)(c) of the Act.

5. At the date of the decision under review on 12 July 2002, there is clear and undisputed evidence that the applicant is a successful and experience business person that also has a controlling share ownership interest in a significant Hong Kong trading company named Rionlon..  The applicant owns 70 per cent of the shares issued by Rionlon and the remaining 30 per cent of the shares are owned by the applicant’s de facto partner Mr Wu Chong.  The applicant has utilised her valuable association with Rionlon and Mr Wu to assist her to identify future Asian marketing opportunities for K.S. Ko and to provide large Australian corporations with the commercial background and standing necessary for K.S. Ko to be able to enter into negotiations and discussions with them concerning their supply of goods for export.

6. The respondent referred the Tribunal to the following decisions in support of their contention that the applicant has not participated at a senior level in the day‑to‑day management of K.S. Ko because she spent only 47 days in the period from the date of her arrival on 13 April 1999 to the date of the cancellation of her visa on 12 July 2002.

   ·   Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656

   ·   Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178

In the case of Huang, the Tribunal 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.

In the case of Ong, the Tribunal said:

I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the applicant in Australia that must be examined, not his business activities whilst he is residing overseas.

This Tribunal concurs with the applicant’s submission that the Act does not support the view that "it is the business activities of the applicant in Australia that must be examined, not his activities whilst residing overseas" in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act. The Act prescribes that the applicant shall utilise his or her skills in actively participating at a senior level in the day‑to‑day management of the business and this statutory requirement does not prevent the Tribunal from also examining the activities of the applicant whilst residing overseas in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act.

1. The Tribunal is of the view that it was necessary for the applicant to spend a very significant amount of her time in Hong Kong because of her illness between December 2000 and 2001 following surgery in December 2001.  It was also desirable in the initial stages of the development of K.S. Ko, following its date of incorporation on 8 February 2000, for the applicant to spend a considerable amount of her time in Asia identifying potential export customers for K.S. Ko.  The applicant now anticipates spending 60 per cent of her future time in Australia developing relationships with Australian companies that produce the goods required by K.S. Ko for export.

2. Accordingly, the Tribunal finds that from the date of the registration of K.S. Ko on 8 February 2000, the applicant has utilised her skills in actively participating at a senior level in the day‑to‑day management of that business pursuant to ss.134(1)(b) of the Act and that she intends to continue to make a genuine effort to do so in accordance with ss.134(2)(b) and ss.134(2)(c) of the Act.

3. The Tribunal also finds, for the reasons discussed herein, that the applicant has obtained a substantial ownership interest in an eligible business in Australia pursuant to ss.134(1)(a) of the Act, which she intends to retain and develop to the benefit of Australian suppliers of goods for export.

4. The secondary business skills visas of the applicant’s children Karen and Sin were also cancelled on 12 July 2002 by the respondent pursuant to ss.134(4)(a), (b) and (c) of the Act because the respondent had cancelled the applicant’s primary business skills visa on that date pursuant to s.134 of the Act. The secondary business skills visa holders are members of the applicant’s family unit and if they had not been a member of the family unit they would not have held their visas. In cognisance of the abovementioned findings by the Tribunal concerning the respondent's decision to cancel the applicant’s visa pursuant to s.134 of the Act, the Tribunal finds that the secondary business skills visas held by Karen and Sin are not subject to cancellation pursuant to ss.134(4) of the Act.

DECISION

1. The Tribunal sets aside the decisions under review and remits the matter to the respondent with the direction that the business skills visas held by Kam Suen Ko, Karen Luen Ho and Sing Hin Wu should not be cancelled under s.134 of the Migration Act 1958.

I certify that the forty‑six [46] preceding paragraphs are a true copy of the reasons for the decision herein of  

Mr W.G. McLean, Member

(sgd)       Catherine Thomas

Clerk

Date of Hearing:  21 January 2003

25 March 2003
Date of Decision:  6 May 2003
Solicitor for the applicant:            Mr M. Gerkens, Fernandez Canda Gerkens

Solicitor for the respondent:         Ms V. Priskich, Blake Dawson Waldron