Kow and Minister for Immigration and Multicultural and Indigenous Affairs

[2003] AATA 973

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 973

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No.   N2002/1498

GENERAL ADMINISTRATIVE DIVISION		)
Re		SAY LONG KOW

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Senior Member M D Allen

Date30 September 2003

PlaceSydney

Decision The decision under review is affirmed.

(Sgd)  M D Allen

..............................................

Senior Member

CATCHWORDS

IMMIGRATION -  Cancellation of Business Skills Visa - Whether Applicant had a substantial ownership interest in an eligible business -  Consideration of whether Applicant had made a genuine attempt to obtain any such interest -  Business activities outside Australia not connected with Australian Business.

Migration Act 1958 - s134

Migration Series Instructions 133

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

Hope v Bathurst City Council  (1980) 144 CLR 1

Stone v Commissioner of Taxation (2003) 198 ALR 541

Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690

REASONS FOR DECISION

29 September 2003 Senior Member M D Allen            

1.      By application lodged 26 November 2002, the Applicant sought review of a decision by a delegate of the Respondent made 23 August 2002 to cancel a subclass 127 business visa (also referred to as a Business Skills Visa) granted to him on 16 February 1999.

2.      The said application for review came on for hearing before me at Sydney on 6 August 2003, the Applicant giving evidence from Singapore by telephone.  At that hearing, the following documents were taken in as exhibits and marked as follows, namely:

T1-T12Documents prepared for the Tribunal pursuant to s 37 of the Administrative Appeals Tribunal Act 1975

R1Respondent’s submissions dated August 2003.

3.      The Applicant confirmed that he had received a copy of the Respondent’s submissions in this matter as well as the s 37 documents and was ready to proceed.

4.      In evidence, the Applicant confirmed that he had first arrived in Australia after the grant of his Business Skills Visa on 27 May 1999.  At that time, he stayed for three days.  In September 2000, he visited Australia for a period of five days and since that time, he has been absent from Australia.  The total length of time which he has spent in Australia amounts to eight days.

5.      Significantly in cross-examination, the Applicant, while stating that he travelled extensively throughout Asia in order to obtain business contracts said,  “I’m at home now” referring to his telephoning from Singapore.  From this remark, I drew the conclusion that the Applicant, while travelling extensively in order to generate business opportunities, regards his place of residence as being Singapore.

6.      This conclusion was strengthened by the Applicant’s concluding comments to the Tribunal to the effect that he considered it sufficient that he sold Australian goods directly or indirectly out of Australia and that he currently did not wish to migrate to Australia but wished to consider residence in Australia at a later stage.

7.      On 30 July 1999, the Applicant purchased, together with his brother, a shelf company entitled “Ideal Corporation Pty Limited”..  The shareholding of that company is apparently 40 per cent to the Applicant, 40 per cent to his brother and 20 per cent to a Ruthramoorthy Sabapathy, an Australian resident.  In the form entitled, “Survey of Business Skills Migrants – 24 Months (Form 1010)” completed by the Applicant on 10 July 2001, he disclosed that he had contributed $A4,000.00 to the capital of the said company.  The annual income of the business was shown on the said return as $A3,165.00.

8.      As a result of the return referred to in paragraph 7 above, the Department of Immigration and Multicultural and Indigenous Affairs (“DIMIA”) by letter dated 11 August 2001, requested further information from the Applicant.  By letter dated 12 October 2001, the Applicant replied to the 11 August 2001 letter enclosing accounts, a tax return for the year ended 30 June 2000, a bank statement and two special purpose financial reports dated 2000 and 2001 for Ideal Corporation Pty Ltd.  These records show that in the financial year ending 30 June 2001, a total of $50,926.12 worth of goods were exported by Ideal Corporation Pty Ltd to companies with which the Applicant is associated in Singapore.  These exports consisted of:

(a)one order from Ideal Electric Singapore Private Limited for $35,912.63 on 8 August 2000; and

(b)      one order from Fibre Light Asia Pty Ltd for $15,013.49 on 23 May 2001.

9.      The Applicant is the Managing director of Fibre Light Asia Pty Ltd.  Ideal Electric Singapore Private Limited is a parent company of Fibre Light Asia Pty Ltd.

10.     It is clear from the material produced by the Applicant that since starting the business, Ideal Corporation Pty Ltd has been involved in two transactions only and those two with companies associated with the Applicant.

11.     Section 134 of the Migration Act 1958 states inter alia,

“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 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).

…

(9)The Minister must not cancel a business visa under subsection (1), (3A) or

(4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:

(a)if its holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or

(b)if its holder was not in Australia when he or she was first granted a business visa—on the day on which its holder first entered Australia after that first visa was granted.

(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.”

12.     As was pointed out in Re: Wong v Minister for Immigration and Multicultural Affairs [2002] AATA 54, in cases of cancellation of business visas, the Tribunal must consider whether the decision to cancel was the correct or preferable decision at the time of the said cancellation (in this matter as at 23 August 2002). That does not mean of course that later events cannot be examined to see what light they throw upon circumstances at the time of cancellation.

13.     The Applicant’s evidence was that he actively travels throughout Asia (including the Indian sub-continent) seeking markets for Australian manufactured lighting equipment.  Whereas he does manage the Australian company by giving instructions to the resident Manager, Mr Sabapathy due to the nature of the business in Asia a middleman cannot be used and he often has to bypass his Australian company.

14.     The above evidence is consistent with the Applicant’s statement in his submissions to the Respondent as to why his Business Skills Visa should not be cancelled.  In that submission, reproduced at documents T1 p6 and again at T10, he states, inter alia:

“Despite all these unfavourable factors, in the period 1998 to 2001, I still manage to sell almost $500,000.00 / - worth of Australia lighting products and components from Intralux, Moonlighting and Fibrelight.  Unfortunately or rather unavoidably, the bulk of these sales had to be effected through my Singapore and Malaysia companies, Ideal Electric, Asas (sic) Lighting and Fibrelight Asia, with only about $48500 / - worth of sales effected through Ideal Corporation Pty Ltd.

This is unavoidable because the Contracts for which the goods were sold under, emanated from Singapore and the buyers (ie my clients) wanted assured accountability and service back-up from someone nearer home than say, Ideal Corporation Pty Ltd in Australia”.

15.     Annexed to the said submission from the Applicant are copies of letters from companies, namely Moonlighting Australia Pty Ltd and Fibre Light International Pty Ltd which have currently supplied goods to the Applicant’s company.  The letter from Moonlighting Australia Pty Ltd reads inter alia;

“…. Mr Kow Say Long is a valuable asset to the lighting industry of Australia and with this  intimate knowledge of the lighting components, lighting technology as well as lighting luminaries he and his company Ideal Corporation Pty Ltd can be the conduit through which Australian made components and lighting luminaries can be sold and exported into the ASEAN and China region”

whereas the letter from Fibre Light International Limited reads:

“This is to confirm that Mr Kow Say Long of Fibre Light Asia Pte Ltd (a subsidiary of Fibre Light International Ltd Australia) is the Managing Director who is actively marketing our products for the Asia/Pacific region.”

16.     The Applicant is a director of Fibre Light Asia Pte Ltd which as stated above is a joint venture between Fibre Light International Pty Ltd and Ideal Electric Private Limited, a Singaporean registered company of which the Applicant is a director.

17.     The inference I draw from the above documents and the Applicant’s own evidence is that he is a salesman for Australian lighting products in Asia but his Australian company does not meet the criteria for an eligible business as opposed to the Applicant’s personal efforts on behalf of his Singapore based company.

18.     Ideal Corporation Australia Pty Ltd has exported two shipments of lighting products to Singapore.  The first of these was to Ideal Electric Singapore Private Ltd of which the Applicant is a Director, the other shipment was to Fibre Light Asia Pte Ltd, a company with which the Applicant’s Singaporean company, Ideal Electrical Singapore Pte Ltd, was associated.

19.     To constitute a business, there must be some element of continuity and repetition, cf Mason J (as he then was) in Hope v Bathurst City Council (1980) 144 CLR 1 at 8 where His Honour stated that a business is denoted by a commercial enterprise in the nature of a going concern and that its activities are engaged in for profit on a continuous and repetitive basis. Similar comments (without acknowledgment) were made by the Full Court of the Federal Court in Stone v Commissioner of Taxation (2003) 198 ALR 541 at p 47 where the Court said inter alia:

“If there is system in the activity, coupled with repetition and continuity, that will be indicative of a business.”

20.     In my opinion, and I so find, two shipments of goods to companies associated with the Applicant over a period of two years do not constitute activities engaged in for profit on a continuous and repetitive basis.

21.     In other words, there is no evidence that the Applicant’s Australian company, as opposed to him personally operating out of Singapore, has engaged in any business.

22.     Neither has the Applicant used his skills in the management of Ideal Corporation Pty Ltd in Australia.  He has had contact with his Australian manager by telephone but he, himself, has not resided in Australia except for eight days in total.  On his own admission, he spends most of his time travelling throughout Asia and returns to “his home” in Singapore.

23.     Subsection 134 (3) of the Migration Act 1958 sets out the matters which the Minister may take into account when determining whether a person has made genuine efforts in utilising his or her skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.  Guidance is given by paragraph 4.5.1 of Migration Series Instruction 133: Cancellation of Business Visa as to whether a genuine effort has been made for statutory purpose.  These guidelines, while not binding upon the Tribunal, do mitigate against inconsistency in decision-making: see the discussion by Davies J, Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 commencing at p 695.  The factors to be considered are:

“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, bankfinancial institution, StateTerritory government business development office, Austrade, businesstrade 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.”

24.     An examination of the requirements set forth in subsection (3) of section 134 and paragraph 4.5.1 of the Migration Series Instruction 133 outlined above indicates they do not assist the Applicant in demonstrating that he has made a genuine effort in particular at the date of cancellation of his business skills visa:

(a)The Applicant had spent only eight days in total in Australia subsequent to the issue of his business skills visa.  This limited period is inconsistent with the Applicant making genuine efforts to obtain and engage in a business in Australia.  The period also falls well short of the six months referred to in item (d) of paragraph 4.5.1 quoted above.

(b)The value of the Applicant’s ownership interest in Ideal Corporation Pty Ltd is $4,000.00 and thus trivial.  It falls well short of the $100,000.00 ownership referred to in item (g) of paragraph 4.5.1 quoted above.

(c)On the Applicant’s own evidence his customers in Asia prefer to deal with his Singaporean registered company rather than the Australian company.

(d)A letter from Fibre Light International Ltd simply refers to the Applicant “marketing our products for the Asia/Pacific Region”..  There is no reference to any Australian business similarly the letter from Moonlighting Australia Pty Ltd acknowledges that no actual sales have taken place and that the Applicant’s company is merely a “conduit” through which Australian made components and lighting luminaries can be exported to Asia.

(e)The Applicant has not produced a business plan for Ideal Corporation Pty Ltd or any analysis of the business environment either in Australia or elsewhere.

(f)The two export transactions by the Applicant’s Australian company do not evidence a business.

25.     I am therefore satisfied that the Applicant has not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia nor has he made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business.

26.     For these reasons, the decision under review is affirmed.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of:

Senior Member M D Allen

Signed:         (Sgd)   K. Wong            .......................................................................................
  Associate

Dates of Hearing  6 August 2003
Date of Decision  30 September 2003
Representative for the Applicant    Self-represented
Solicitor for the Respondent          Ms J. Selth, Australian Government Solicitor