Kushner and Minister for Immigration and Citizenship
[2008] AATA 1170
•24 December 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 1170
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4523
GENERAL ADMINISTRATIVE DIVISION ) Re MERVYN KUSHNER Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Senior Member, Mrs Josephine Kelly Date24 December 2008
PlaceSydney
Decision The decision under review is affirmed. ...................[sgd].........................
Senior Member
Mrs Josephine Kelly
CATCHWORDS
MIGRATION – Business skills visa – Cancellation - Whether material after cancellation can be taken into account - Whether business – Whether eligible business – Whether genuine effort to obtain substantial ownership interest in an eligible business or intention to – Activities to achieve migration outcome - Held not a business – Not an eligible business – No genuine efforts - Residual discretion not exercised – Decision affirmed
Administrative Appeals Tribunal Act 1975, s 37
Migration Act 1958, ss 134, 135, 137
Migration Amendment Bill (No 2) 1992
Procedures and Advice Manual 3, Act – Visa Cancellation – Business visas cancellation
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Shi v Migration Agents Registration Authority (2008) 248 ALR 390
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
REASONS FOR DECISION
24 December 2008 Senior Member, Mrs Josephine Kelly 1. Mr Mervyn Kushner seeks the review of the decision made on 3 September 2007 by a delegate of the Minister for Immigration and Citizenship (the Minister) to cancel Mr Kushner's Business Skills (Migrant) Sub-Class 127 – business Owner Visa (the business visa). The delegate also cancelled the business visa held by Mr Kushner's wife as a member of Mr Kushner's family. There are no proceedings before me in relation to that decision.
ISSUES
2. No issue arose in relation to the notice requirements of the Migration Act 1958 (the Act).
3. A preliminary question is to what extent, if at all, I can take into account evidence that came into existence after the date of cancellation?
4. The substantive issues arise from the provisions of s 134(1) and s134(2) of the Act. In summary, they are:
(a) Has Mr Kusher obtained a substantial ownership of an eligible business in Australia (s 134(1)(a) of the Act); and
b) Is he utilising his skills in actively participating at a senior level in the day-today management of that business (s 134(1)(b) of the Act); and
c) Does he intend to continue to do so (s 134(1)(c) of the Act)?.
5. If I am satisfied Mr Kushner does not meet one or more of those provisions, am I satisfied that he has made the genuine efforts prescribed by s 134(2) of the Act? If I am satisfied that he has, the visa must not be cancelled.
6. The final issue is, if Mr Kushner has been unsuccessful up to this point, should I exercise the residual discretion in s 134(1) of the Act.
7. For the reasons that follow I have decided to affirm the decision to cancel Mr Kushner’s business visa.
PRELIMINARY ISSUE
8. Mr Kushner wanted me to take into account material that originated after the date of cancellation of his business visa on 3 September 2007. The case was reopened to allow further submissions on this issue following the decision of the High Court in Shi v Migration Agents Registration Authority.
9. Hayne and Heydon JJ said in Shi at [99]:
Once it is accepted that the Tribunal is not confined to the record before the primary decision-maker, it follows that, unless there is some statutory basis for confining that further material to such as would bear upon circumstances as they existed at the time of the initial decision, the material before the Tribunal will include information about the conduct and events that occurred after the decision under review. If there is any such statutory limitation, it would be found in the legislation which empowered the primary decision-maker to act; there is nothing in the AAT Act which would provide such a limitation.
10. Similarly, Kirby J said at [45] and [46]:
“…the general practice of the [T]ribunal is to take account of events that have occurred up to the date of the decision. Indeed, s 43(1) of the [AAT Act so implies].” There is thus a general approach deriving in particular from the statutory function of substituting one administrative decision for another. Nevertheless, the particular nature of the “decision” in question may sometimes, exceptionally, confine the Tribunal’s attention to the state of the evidence as at a particular point in time.
11. In the same vein, Kiefel J (with whom Crennan J agreed) said at [142]:
Where the decision to be made contains no temporal element, evidence of matters occurring after the original decision may be taken into account by the Tribunal in the process of informing itself… It is otherwise where the review to be conducted by the Tribunal is limited to deciding the question by reference to a particular point in time.
12. Mr Johnson submitted on behalf of the Minister that Shi can be distinguished because the relevant statutory provisions in the present case impose a "temporal element", such that "the critical statutory question is whether a criterion was met or not met at a particular date". Mr Johnson referred to ss 134(9), 135 and 137 of the Act.
13. Section 134(9) of the Act provides that the Minister must not cancel a business visa unless a notice under section 135 was given to its holder within the period of 3 years commencing on one of two dates, depending whether the visa holder was or was not in Australia when the business visa was first granted.
14. Section 135 of the Act requires that notice must be given of the intention to cancel the visa, and inviting the visa holder to make representations to the Minister within certain time limits. The Minister must give due consideration to any representations. The provision imposes a time limit of 90 days for the making of a decision where the time specified for receipt of submissions ends after the three year period determined according to s 134(9). The Minister may not proceed with cancellation if a decision has not been made within the 90 day period. Finally, if the Minister decides not to proceed with the cancellation, the holder must be given written notice of that decision.
15. Relevantly, s 137 of the Act confers on the Secretary a limited power to require, by written notice, a visa holder to provide information. Section 137(3) provides that such a notice is only valid in the period of 3 years, determined in effect in the same way as specified in s 134(9).
16. Mr Johnson submitted that the power to cancel a visa under s 134 prohibits any decision maker – either the primary decision maker or the Tribunal on review – from consideration of circumstances arising after the three year period. In support of his submission, Mr Johnson referred to the Minister's second reading speech for the Migration Amendment Bill (No 2) 1992, and specifically to the following statements:
The Minister cannot cancel entry permits or visa unless action is initiated within the three year period.
This provision allows business migrants time to make sensible business decisions.
It also recognises, as permanent residents, business migrants should not be under the threat of cancellation indefinitely.
17. I do not accept Mr Johnson's submission. I agree with the submission made by Mr Poynder, counsel who prepared the submission on this question on behalf of Mr Kushner, that the provisions of the Act referred to above are intended to provide certainty to business visa holders by limiting the time within which the visa can be cancelled. The Act does not impose the temporal restriction contended for by the Respondent upon this Tribunal in respect of decisions made under s 134(1) of the Act. I do not understand the provisions to have the effect that the Tribunal is limited to considering only the material that was before the primary decision-maker or only evidence relating to the circumstances at that time.
THE SUBSTANTIVE CASE FOR MR KUSHNER
18. Mr Conyer, who appeared for Mr Kushner at the hearing, argued that Mr Kushner had obtained a substantial ownership interest in an eligible business in Australia, and that he had utilised his skills in actively participating at a senior level in the day-to-day management of the business and continued to do so.
19. Mr Conyer relied on the evidence of Mr and Mrs Kushner, both of whom gave oral evidence at the hearing, the material provided before the matter came to the Tribunal included in the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, and additional documentary material tendered during the course of the hearing.
20. Mr Conyer argued that Mr Kushner had had a successful business in South Africa designing and manufacturing children's clothing for the tourist market in South Africa and overseas. The designs were made by Mrs Kushner. Mr Kushner had taken steps to establish the Australian company before his business visa was issued. It was a two stage process. First, he had to disengage from his business in South Africa by employing an appropriate person to run that business, and then commence operating in Australia. It took some time for his replacement to "get up to speed". Mr Kushner now has minimal involvement in the South African operation.
21. The Australian business imports children's clothing manufactured in South Africa for distribution in the tourist sector. The trade mark "Crazy 'bout Oz" appears on the garments. He established a company called Kushner Kids Productions Pty Limited (the Australian company). Unfortunately, Mr Kushner's assumption that he would be successful in a short period of time in Australia proved to be incorrect. His use of different agents was unsuccessful for various reasons, including the agents' failing to take the products to the retailers, giving no feedback to him about the acceptance of the product, and one agent absconding with the products. Mr Kushner went out to make the contacts, travelling in New South Wales, to Margaret River, the Barossa Valley, the Gold Coast, Noosa Heads and Cairns. He received feedback that designs incorporating the Sydney Harbour Bridge and Opera House were not appropriate for other states. New designs were prepared. A purchase by Skyrail at Kuranda, north Queensland, went awry because the wrong colour had been selected, contrary to Mr Kushner's advice, which did not sell. He took the product back on the basis of a promise that did not eventuate. Thus, at the date of cancellation, the business was not showing a profit, despite his best efforts.
22. I also understood Mr Conyer to rely on Mr Kushner's role in a business called Gravy Clothing Pty Limited (Gravy Clothing). The commencement of this company's registration was 13 June 2007, some several weeks before the cancellation decision was made. Its business was exporting items of clothing from Australia to South Africa.
CONSIDERATION
23. It is useful to set out chronologically in summary form the material that has been provided to the Department of Immigration and Citizenship (the Department) and to the Tribunal in support of Mr Kushner's case.
24. Mr Kushner signed his application for a business visa on 8 October 2002. At the time he was living in Cape Town, South Africa. He was born on 24 July 1941 and is now 67 years of age. Three of his children were living in the USA, two in South Africa, and his only married child was living in Australia. He provided copies of certificates of incorporation, financial statements and evidence of his shareholding in three South African companies. In the application form he indicated that from January 1990 until the present he was Chief Executive Officer of Kushner Kids Retail Investments (Pty) Ltd, Cape Town (the South African business) and that he intended to bring A$1,000,000 worth of money, goods and assets, to Australia.
25. Mr Kushner had been granted a subclass 456 temporary business visa on 12 September 2000. He made 11 trips to Australian between 13 November 2000 and 1 May 2004 on that visa. He was granted the business visa on 12 July 2004, which required that he enter Australia no later than 10 May 2005. He entered Australia on the business visa for he first time on 13 August 2004. He has travelled to Australia on 17 occasions since that date. Mr Kushner prepared a document headed “Time completed towards citizenship” which states that he had spent the following time in Australia: 122 days between January and December 2006, and 145 days in Australia between 13 August 2006 and 12 August 2007. I note the overlap of the dates Mr Kushner recorded.
26. A 24 month survey Form 1010 was sent to Mr Kushner on 13 July 2006. He signed the form on 5 October 2006 and provided the following information. He had transferred A$500,000 worth of assets to Australia. He was currently in business in Australia. The registered company was Kushner Kids Production [sic] Pty Limited which engaged in wholesale trade. The business had been established in May 2002. The company employed two family members full-time (that is 30 hours a week or more) and one other person on the same basis. Mr Kushner usually worked 15 hours each week in the business. The Form 1010 further stated that the value of assets invested in the business was A$250,000, the current net worth of the business was A$63,965, the total annual income was A$44,150 and annual expenses were A$80,141, a loss of A$(36,000). The approximate annual value of imports sold by the business was A$21,127.
27. Also provided at that time was a statement by Mr Kushner on a letterhead for Kushner Clothing Australia. He stated that he had established a business importing children’s clothing manufactured in South Africa for distribution in the tourist sector and registered the Trade Mark “Crazy about Oz” which appears on the garments. A warehouse was established in Sydney and representatives were appointed to offer the ranges to stores throughout Australia. The ranges are designed in Australia and manufactured in South Africa where he already has an established manufacturing plant. He explained his lack of success using representatives and that he had had greater success marketing the products himself. He referred to having a booth at the Sydney Gift Fair in September 2005 to display the clothing ranges which cost approximately $23 000. He noted that international tourism declined considerably in 2005 and 2006 and those two years had not been profitable. In addition to that activity, he was going to enter the fashion market with a new range currently being designed which would be available for the 2007 summer season and it is our intention to show the range at the next Fashion Exposed Fairs in Sydney..
28. Financial Reports showed an operating loss for 2005 of ($9,338) and for 2006, ($54,560). Sales for 2005 were reported as $32,222 and for 2006, $41,754.
29. The business name “Crazy About Oz” was registered in New South Wales on 25 May 2005. An insurance policy for the year ending August 2006 was in the name of Mr Kushner's daughter and son-in-law. Bank statements for the period January to June 2006 were provided and included handwritten annotations. There was a telegraphic transfer of $5,738.28, or SAR $25,208.26, to the South African business on 15 February 2008. There was evidence of shipments to businesses, and numerous emails, mostly between Mr Kushner and his daughter.
30. Mr Kushner, his daughter and his wife were listed as directors of the Australian company in a Directors Report.
31. Further information was requested by the Department on 26 April 2007. Mr Kushner's migration agent responded on 21 May 2007, enclosing further material including a Profit and Loss Statement for the period August 2006 through March 2007, a letter head for the Australian company containing photographs of various items of children's clothing, business activity statements for the period July 2006 to 31 March 2007, and orders from and invoices for childrens' clothing to various businesses in Sydney, Katoomba, Port Douglas, Cairns, and Margaret River, dated from October 2006 to March 2007. There were also two orders from a Hunter Valley organisation and the Barossa Visitor Centre for "wine" T-shirts" in the same period. The South African business sent invoices to the Australian company dated 28 September 2006, 18 October 2006, 16 November 2006 and 26 February 2007 for a total of A$36,417.82.
32. On 14 June 2007, a notice of intention to consider cancellation of Mr Kushner's business was sent to his agent. Further documents, including invoices to Australian retailers of the company's product, and trading results for April to June 2007 were provided in response by Mr Kushner's migration agent in an email dated 23 July 2007. The agent wrote that Mr Kushner has changed to a retail focus after spending a great deal of time and money in Australia over the last few years. Mr Kushner disputed he had not obtained a substantial ownership interest in an eligible business. Various assertions about the business were also made in that email, including that there was "no expense item for rent as Mr Kushner's daughter has cleared a portion of their (sic) for business purposes and the stock is stored in this facility".
33. There were several emails between Mr Kushner and a person from Souvenir World in 2005 and 2006 concerning the Australian business. There were also documents relating to the supply of wine-themed Tee shirts to a business in Mildura in August 2005, and to the Barossa Visitor Centre in October 2006, and the supply of children's clothes to a retailer at Smithfield in Queensland in April 2006.
34. Other documentation included tax invoices relating to the supply of children's clothing to a number of businesses in Cairns, Port Douglas, and Katoomba during the period February to July 2007. The tax invoices ranged in price from $1,049.84 to $1,411.52.
35. Documents relating to the setting up of Gravy Clothing were also provided.. The day of commencement of registration of the company in NSW was 13 June 2007, a day before the notice of intention to cancel was sent. . Mr and Mrs Kushner and their daughter were the shareholders. Mr Kushner held 34 ordinary $1.00 shares. Mrs Kushner and their daughter each held 33 ordinary $1 shares. The date of registration for ABN and GST was 1 July 2007. A tax file number was issued on 5 July 2007. An invoice to Gravey (sic) Clothing from Austin Group Limited dated 10 July 2007 for $356.25 for 25 Tee shirts was provided.
36. The following additional evidence was provided at the hearing. When Mr Kushner was overseas he kept in touch with the Australian business on a daily basis. His daughter is responsible for the clerical work. He and Mrs Kushner personally unpack all new arrivals and pack orders for despatch from the warehouse facility. Two photographs of Mr Kushner packing or unpacking were in evidence. They deliver to customers or arrange for a courier company to collect.
37. A photograph of the booth at the trade fair in 2005 was tendered. Mr Kushner's evidence was that a buyer from Taronga Zoo visited, which had resulted in regular orders. A specific range of baby wear with zoo animals was being designed for him at the time of the hearing.
38. Mr Kushner said that whenever he returned to Australia from South Africa, he brought in new stock as part of baggage to save on freight. He stated that he bore all costs personally, as the costs were debited to his loan account with the South African company.
39. Mr Kushner also gave evidence about registering Gravy Clothing, through which he sources clothing and accessories from Australian based companies and exports them to South Africa. At the time of the hearing he said that he was currently negotiating the export of merchandise to the Middle East. In four months the new venture has generated turnover of $83,000, of which net income was $24,960. Invoices from Austin Bros Group Pty Ltd to Gravy Clothing were provided in support of this evidence. The earliest date on the invoices was 10 July 2007. The invoices appeared to be for T-shirts. There were also orders from Gravy Clothing to Austin Group. The earliest date appearing on any of the orders is 6 August 2007.
40. Another order to Gravy Clothing dated 17 September 2007, appeared to be for solar toys and other items, but not for clothing.
41. Another invoice in evidence was from a business at Manly to "Kushner Retail Investments (Pty) Ltd" in Cape Town. It was dated 22 November 2007 and was for seven boxes of tee shirts and singlets. It included no cost of freight.
42. In a written statement, Mr Kushner stated that his intention ultimately, once he has Australian citizenship, is to "either" relocate the South African manufacturing operation to China, and set up the head office in Australia, exporting to the current European, USA, Middle East and South African customers out of Australia. He explained that he had had to continue participating in the running of "my" South African company while trying to establish a profitable business in Australian because the established business is his source of income and finance to keep the Australian business afloat. It had cost him "hundred thousands of dollars" to fly between the two countries regularly and "still maintain the required 24 months in 5 years to qualify for my citizenship". In the same document Mr Kushner stated that his airfares had cost approximately $23,500, car rentals approximately $11,392 and accommodation approximately $43,228.
43. Copies of print outs from a web site dated 21 November 2007 referred to wildlife and rainforest ranges of children's clothing. Photographs of various items of children's clothing within those ranges and other items including the "Crazy 'bout Australia" trade mark were tendered. Other photographs tendered were printed on "Kushner Clothing Australia" letterhead which showed a website address of document dated 15 November 2007 on the letter head of Kushner Retail Investments (Pty) Ltd set out the production costs in South African Rand, for the manufacture of sample ranges for Australia.
45. Pages of telephone billing records of calls to Australia from 3 February 2004 to 6 October 2007 and a mobile telephone for the years 2005 and 2006 were also tendered. The latter included calls to and within Australia, as well as "domestic" calls, and calls made to and within the USA, Spain and Italy. Most of the telephone calls to Australia were to one number, which I infer was his daughter's telephone number in Australia.
46. The latter records were supported by a document setting out the time that Mr Kushner has spent and intends to spend in Australia and other countries since 13 August 2004. It included colour-coded calendars for 2006 to 2009 inclusive.
47. Mrs Kushner also gave evidence about designing the clothing. She brought to the hearing a number of items of the children's clothing that she had designed.
Does Mr Kushner have a substantial ownership interest in an eligible business in Australia as set out in s 134(1)(a)?
48. Section 134(10) of the Act defines “eligible business”:
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.
49. Given all the evidence that was before me at the time of the hearing, I understand that Mr Kushner was relying on two "businesses" as potentially satisfying the requirements of s 134(1)(a) of the Act, namely the Australian company and Gravy Clothing.
50. The first question is whether either of those entities is a "business" in the sense contemplated by the Act. The term is not defined.
51. Paragraph 7.3 of the Procedures and Advice Manual 3 (PAM 3) expressly endorses the approach of Mason J in Hope v Bathurst City Council, that a business may be regarded as being a "commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis".
52. Paragraph 7.3 of the PAM 3 sets out relevant policy considerations:
In ascertaining whether activities constitute the carrying on of a business, officers may, under policy, consider factors such as whether:
● transactions are entered into on a continuous and repetitive basis for the purpose of making a profit
● the activity has a permanent character, and how long it has been established;
● customers are sought and financial records are kept; and
● the activities are genuine and real.
53. The Tribunal will ordinarily apply lawful ministerial policy or departmental guidelines unless are cogent reasons not to: Re Drake and Minister for Immigration and Ethnic Affairs (No 2). To do so promotes consistency in decision-making: Skoljarev v Australian Fisheries Management Authority. I take the policy into account, however, it is necessary to consider the particular statutory provision.
54. The phrase considered in Hope was "carrying on a business", and Mason J emphasised the need (at 10):
to engage in a process of construction in order to arrive at the meaning of the word [business] in s 118 (1).
55. Section 134(10) of the Act does not include the phrase "carrying on".
56. The Macquarie Dictionary (Revised Third Edition) defines “business” as:
Noun 1. one’s occupation, profession, or trade. 2. Economics. the purchase and sale of goods in an attempt to make a profit. 3. Commerce. a person, partnership or corporation engaged in this; an established or going enterprise or concern: a clothing business. 4. volume of trade or patronage. 5. one’s place of work. 6. that with which one is principally or seriously concerned; 7. that with which one is rightfully concerned; 8. affair; matter.
55. In Re Tang and Minister for Immigration and Multicultural Affairs at [20], Deputy President McMahon said:
On these facts, it seems to me that Tiproll Pty Limited is not carrying on a business and its activities are therefore not an eligible business. The reference in subparagraph 134(1)(b) to the “day-to-day management of that business” indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council (1980) 144 CLR 1, Mason J considered that the use of the phrase “carrying on the business”, as a qualifier of the noun “business”, required that there be a commercial enterprise in the nature of a going concern “that is activities engaged in for the purpose of profit on a continuous and repetitive basis”. Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Limited. It has had one export transaction to a company associated with Mr Tang. The evidence relating to lanolin and roller shutters does not add to the perception of a business requiring day-to-day management. In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.
If I am wrong in my understanding of this term, it is certainly clear that Mr Tang has not used his skills in the day-to-day management of that business. Clearly the type of remote association which he has had with Tiproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business.
57. The ordinary meaning of "business" in the second and third dictionary definitions quoted above, are relevant in my opinion. I would respectfully agree with Deputy President McMahon's conclusion that the language in s 134(1)(b) indicates that the eligible business must have some element of continuity and repetition. I note also the use of similar language in s 134(2)(b) and 134(2)(c) of the Act.
58. Taking into account all of the evidence, I am not satisfied that the activities that occurred in relation to either the Australian Company or Gravy constitute either as a business as that term is used in s 134 of the Act. I find that the activities undertaken by both entities were ad hoc and for the purpose of a migration outcome rather than for establishing a business.
59. While many documents have been tendered, in my view they do not prove very much. I infer that activity has occurred in response to the 24 month survey and in response the notice of intention to cancel the visa to try to satisfy the criteria set out in the legislation. I also infer from the evidence, that Mr Kushner has been easing himself out of the South African for the purpose of retirement. His travel over the years 2006 to the date of the hearing has been extensive and has included lengthy stays in the USA, where some of his children live, and Europe, particularly during the months of June to September. I am not persuaded that he has applied his undoubted business acumen to the establishment of a business in Australia. The evidence supports the conclusion that Mr Kushner's objective has been to obtain citizenship. This is reflected in his statement that he plans to move his South African operation to China when he has obtained citizenship and the document setting out the time he has spent in Australia which refers to the time completed towards citizenship.
60. I conclude that the establishment of Gravy Clothing reflects that Mr Kushner or his migration or legal representatives recognised that the activities of the Australian company were not sufficient to satisfy the relevant statutory criteria. Gravy Clothing was registered one day before the date of the notice of intention to cancel the visa was issued and after a request had been made for further information. The evidence shows that Austin has sent invoices to Gravy. There is no documentation that shows that the items were shipped.
61. A similar observation can be made in relation to the activities carried out by the Australian company. There are invoices from the Australian company, but scant documentation of orders having been placed, paid for, and shipped. Email communications from Mr Kushner referring to ranges of products and their success in other markets do not prove that there were serious negotiations on the part of the recipient of the email to purchase products.
62. Further, there are few invoices from the Australian company in the period 2005 to 2007, they are for relatively small amounts, and that company traded at a loss for the 2004/2005 and 2005/2006 financial years. The ad hoc activity of the Australian company is not consistent with employment of two family members and another person as asserted in the 24 month survey. The small scale of the activities is reflected in the use of a domestic garage as a "warehouse".
63. In the absence of documentation prepared independently of the Australian company or Gravy Clothing, for example documentation relating to shipments of goods and payments made, I am not persuaded of the extent of the activities alleged in relation to either "business".
64. Even if either the Australian Company or Gravy was a "business" I am not persuaded that either is an "eligible business" as defined in s 134(10) of the Act. The extent of the activities evident on the material before me does not lead me to believe that either is resulting in or will result in one or more of the outcomes (a) to (f) set out in the legislation. Given the scale of both businesses, I would not be satisfied that international links have been developed, employment has been created in Australia, that goods have been produced which would otherwise be undeveloped in Australia, or that they would lead to an increase in commercial activity or competitiveness.
65. Given my finding, it is not necessary to consider whether Mr Kushner’s business visa may be cancelled under s 134(1)(b) and (c) of the Act.
Has Mr Kushner made a genuine effort to obtain a substantial ownership in an eligible business? (s 134(2)(a))
66. Section 134(2) of the Act provides that I must not cancel the Mr Kushner’s business visa if I am satisfied that Mr Kushner has made a genuine effort to:
(a) obtain a substantial ownership interest in an eligible business Australia; and
(b) utilise his skills in actively participating at a senior level in the day‑to‑day management of that business;
and that he intends to continue to make such genuine efforts.
67. In considering whether Mr Kushner has made the requisite “genuine effort” I may take into account, relevantly, under s 134(3) of the Act:
(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;
…
68. There were no formal business proposals or plans or research undertaken for either the Australian business or Gravy clothing before me, which is rather surprising given Mr Kushner's obvious success in his South African business. The evidence indicates that the sales tended to be made when Mr Kushner visited various holiday and tourist destinations in Australia. Contributing to the sense of ad hocery is the evidence of the sale of T shirts in various wine growing areas, when the Australian company was concerned with children's clothing. There was also no evidence of the fashion range that was proposed for 2007.
69. While Mr Kushner has spent relatively long periods in Australia in more recent years, I find that this was directed to obtaining Australian citizenship rather than for the purpose of establishing and running a business.
70. While the visa application stated that Mr Kushner would transfer A$1,000,000 to Australia, and the Form 1010 asserted $500,000 had been transferred, the evidence does not reflect such large sums being transferred or assets being acquired.
71. Mr Conyer submitted that Mr Kushner had set into train a series of events that would lead to the continuation and increase in profit of the business. I understood this submission to relate specifically to Gravy Clothing. As indicated above, I am not persuaded that Mr Kushner intends to continue the activities of either entity.
72. I am not satisfied that Mr Kushner has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia or that he intends to continue to make such efforts. The provisions of s 134(2)(b) and (c) therefore do not arise for consideration.
Should the residual discretion be exercised?
73. The final issue is whether I should I exercise the residual discretion in s 134(1) not to cancel Mr Kushner’s business visa. As Kiefel J said in Kim v Minister for Immigration and Multicultural and Indigenous Affairs at 310:
The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given.
74. In addition to the evidence about the Australian company and Gravy Clothing, Mr Kushner gave evidence that once he has Australian citizenship, he intends to either relocate the business to China or, over a period, to convert his business to one operating out of Australia. I give no credence to this plan, belatedly raised, given his evidence that he had spent some years easing himself out of that business and finding someone else to run it.
75. On the evidence, I am not persuaded that Mr Kushner has an intention of utilizing his obvious business acumen in Australia in the foreseeable future. I am not persuaded that, if Mr Kushner were afforded further time, he would “undertake what was required of him” in terms of s 134 of the Act (Kim at 310).
DECISION
76. For the reasons given, the decision under review is affirmed.
I certify that the 76 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member.
Signed: ……..[sgd]…….….
Steven Mulipola, Associate
Date of hearing: 29 April 2008
Date of final submissions: 5 September 2008
Date of decision: 24 December 2008
Solicitors for the Applicant: Diamond Conway Lawyers
Solicitors for the Respondent: DLA Phillips Fox
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