Lai and Minister for Immigration, Citizenship and Multicultural Affairs (Migration)

[2022] AATA 3214

Lai and Minister for Immigration, Citizenship and Multicultural Affairs (Migration) [2022] AATA 3214 (6 October 2022)

Review Number:        2020/5879, 2020/5880, 2020/5881, 2020/5882, 2020/5883, 2020/5894

Division:GENERAL DIVISION

File Number(s):      2020/5879

2020/5880

2020/5881

2020/5882

2020/5883

2020/5894

Re:Keng Onn Lai

Pey Kheng Chan

Yiew Kwan Lai

Yiew Kar Lai

Yiew Hui Lai

Yiew Teng Lai

APPLICANTS

AndMinister for Immigration, Citizenship and Multicultural Affairs

RESPONDENT

Decision

Tribunal:Senior Member A Poljak

Date:6 October 2022

Place:Sydney

The decisions under review are affirmed.

................................[SGD]........................................

Senior Member A Poljak

Catchwords

MIGRATION – business visa cancellation – whether the applicant’s visa should be cancelled pursuant to subsection 134(1) of the Migration Act 1958 (Cth) – whether the residual discretion to cancel the applicant’s visa should be exercised – whether the dependent applicants would experience extreme hardship – relevant law, policy and material considered – decisions under review affirmed.

Legislation

Migration Act 1958 (Cth)

REASONS FOR DECISION

Senior Member A Poljak

6 October 2022

1. Keng Onn Lai, the first applicant (the applicant) is a citizen of Malaysia and was granted a Business Skills – Business Talent (Migrant) (Class EA) (Subclass 132) visa (visa/s) on 18 October 2016. His wife and daughters were dependent applicants (applicants) to that application and were granted visas on the same day.

2. On 19 July 2019, the Minister’s department (Department) sent an email to the migration agent who assisted the applicant with his visa application, to enquire whether the agent continued to represent the applicant. On 22 July 2019, the agent responded, providing a Form 956 signed by the applicant, and confirming that he was providing immigration assistance to all six applicants and was their authorised recipient.

3. On 24 July 2019, the Department sent a letter to the applicant, through his agent, requesting that he complete and return a Survey of Business Skills Visa Holders (Form 1010) together with supporting documentation. A copy of this correspondence was also sent to ‘[email protected]’. No response was received from the applicant, and the material indicates that there was also no response from the Western Australian government.

4. On 18 May 2020, the Department sent the applicant, through his migration agent, a notice of intention to consider cancellation (NOICC) of his visa under section 134 of the Migration Act 1958 (Cth) (Act). The Department also sent NOICCs to the applicants inviting them to comment on whether cancellation of their visas would result in extreme hardship and provide any evidence in support. No response was received from the applicant or applicants.

5. On 27 August 2020, a delegate of the respondent decided to cancel all six applicants’ visas pursuant to subsection 134(1) of the Act. These are the decisions under review in these proceedings.

   Issues

6. The issues for determination in these proceedings are:

   (a)whether the Tribunal is satisfied that a condition for visa cancellation under subsection 134(1) of the Act exists, that is, the applicant:

   (i)has not obtained a substantial ownership interest in an eligible business in Australia (paragraph 134(1)(a)); or

   (ii)is not utilising his skills in actively participating at a senior level in the day-to-day management of that business (paragraph 134(1)(b)); or

   (iii)does not intend to continue to hold a substantial ownership interest in an eligible business in Australia and does not intend to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia (paragraph 134(1)(c)).

   (b)if at least one of the subsection 134(1) conditions is satisfied, whether all of the bars to cancellation in subsection 134(2) are met by determining whether the applicant:

   (i)has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia (paragraph 134(2)(a)); and

   (ii)has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business (paragraph 134(2)(b)); and

   (iii)intends to continue to make such efforts (paragraph 134(2)(c)).

   (c)if the Tribunal is not satisfied that the applicant meets all of the bars in subsection 134(2), whether it should, having regard to all of the circumstances, exercise its residual discretion not to cancel the visa; and

   (d)if the Tribunal finds that the applicant’s visa should be cancelled, whether the cancellation of the dependent applicants’ visas would result in extreme hardship, such that the dependent applicants’ visas cannot be cancelled (subsection 134(5)).

   Relevant Legislative Provisions

7. Subsection 134(1) of the Act relevantly provides that the Minister may cancel a “business visa” 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.

8. However, pursuant to subsection 134(2) of the Act, a decision-maker is barred from cancelling a business visa if a decision-maker is satisfied that the visa 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.

   9. Subsection 134(3) of the Act provides the following non-exhaustive list which a decision-maker may take into account when determining whether a visa holder has made a “genuine effort” under subsection 134(2):

   (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. “Eligible business” is defined in subsection 134(10) of the Act as a business that the decision-maker 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.

10. “Ownership interest” is defined to mean an interest in the business of one of the following kinds:

    (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.

11. If a decision-maker cancels a person’s business visa under subsection 134(1) and a business visa is held by another member who is or was a member of the family unit and the other person would not have held the business visa if they had not been a member of the relevant family unit, the decision-maker must cancel the other person’s business visa (subsection 134(4)) unless doing so would result in “extreme hardship” to the person (subsection 134(5)).

    Relevant Aspects of the Evidence and Consideration

12. The applicant contends that he has a substantial ownership interests in two eligible businesses in Australia, as he owns 30% shareholding of ‘LTAD Pty Ltd’ (LTAD) and caused a new company, ‘Greengen Energy Pty Ltd’ (Greengen), to be incorporated in Australia to carry on business in the green energy business on 23 February 2021.  

13. Paragraph 7.2 of Procedures Advice Manual 3 provides that ‘substantial ownership interest’ is intended to reflect the policy intention that visa holders not merely obtain a minor financial interest in a business, but rather that they obtain an interest that is significant relative to the size of the business, and through which they are able to make major decisions affecting the overall direction of the business. A substantial ownership is considered an ownership interest of at least 10%, or a value of at least $100,000; relative to the size of the business.

14. According to a Current and Historical Company Extract (extract) for LTAD from the Australian Securities and Investments Commission's (ASIC) database, LTAD was registered in Western Australia on 28 January 2016. 100 ordinary shares have been issued with a total amount of $10.00 paid. The applicant is listed as a director and holder of 30 shares, alongside three other directors who hold 30 shares, 30 shares and 10 shares respectively. This is consistent with the applicant submitting that he holds an ownership interest of 30%. According to the extract, the applicant’s 30% share in 2016 was valued at $3.00 given the original value of $10.00.

15. In his bundle of evidence, the applicant has provided various material relating to LTAD’s property development of eight units in 2018 (LTAD units). The property appears to have been purchased in 2016 for $1,045,970.54. The Progress Claim Schedule annexed to the building contract between LTAD and Shelford Constructions Pty Ltd t/as Shelford First (builders) indicates that the sum of the contract for the building of the units was approximately $1,391,528. The total value of the development at purchase or currently is unclear. It does appear that the applicant provided a loan to LTAD in the sum of $974,573.

16. The applicant’s states that there was no prospect of selling the LTAD units at a profit and that accordingly, a decision was made to lease the units.

17. The rental income ledger for the financial year ending June 2020 indicates a net rental income of $62,962 from the LTAD units. As of June 2020, the applicant’s material suggests that LTAD has total company equity of $1,874,757. It is however notable that this assessment of equity is based on the 2018 valuation of the LTAD units, which the applicant has conceded the units could not have been sold at. It is also notable that LTAD’s 2020-year earnings were estimated to be $20,346.

18. It is accepted that the applicant’s 30% share in LTAD is currently a significant holding.

19. The applicant has stated that, prior to the pandemic, he hoped to continue developing property but ‘could not identify suitable vacant plots for building houses or apartments’

    appropriate for the business scale; no other concrete proposals arise on the evidence, either for LTAD or Greengen. The LTAD units are currently leased, and it appears that any further property development under LTAD has stalled. There is no evidence of business activity in Australia from Greengen.

    21.     I do note that email evidence suggests that in 2019, the applicant found potential land for development but that it fell to Mr Poon to conduct the investment research. It appears on the evidence that this land purchase was a personal investment of the applicant and not for LTAD. As at hearing, an application has been filed to subdivide the property for development.

20. There is no evidence of either company having developed business links with the international market; there is evidence that LTAD currently has one part time employee and a claim that ‘at one stage our business employed up to 6 people’. There is also evidence that LTAD created employment through the building contract with Shelford First dated 3 July 2017. However, there is a lack of any current evidence that LTAD will create and/or maintain employment in Australia.

21. There is no evidence of export of Australian goods and/or services, or that they will be exported, from either company; there is no evidence of goods produced or services delivered that would otherwise be imported to Australia, or that they will be produced or delivered, from either company; there is scarce evidence of the new company introducing improved technology to Australia through green energy; there is evidence that, during the construction of the units, LTAD contributed to commercial activity and competitiveness within the construction and real estate sectors; however, there is no more recent evidence of such contribution, or that further contributions will be made. Accordingly, LTAD and Greengen do not meet the definition of ‘eligible businesses’ as defined in subsection 134(10) of the Act.

22. The applicant claims ‘it fell on me to effectively carry out the day-to-day management of the business’ including convening meetings, making decisions, and following up those decisions. He also claims most meetings and discussions were conducted via a WhatsApp group chat.

23. On the available evidence, I am not convinced that the applicant utilised his skills in actively participating at a senior level in the day-to-day management of LTAD.

    26.     There are three other director-shareholders involved in LTAD, including Mr Poon, who became a 10% shareholder in LTAD so that it would have a local shareholder in Australia to implement managerial decisions. Once a decision was made, it usually fell to Mr Poon to carry out such decision because of his residence in Australia, including approaching and appointing a real estate agent to market the LTAD units. It was also Mr Poon who appointed the leasing agent and spent a year scoping out development opportunities following the leasing of the LTAD units. Apart from the applicant authorising monetary transfers to the builder of the LTAD units upon Mr Poon’s request or instructing him on various decisions made through WhatsApp such as the move to the rental market, the leasing of the LTAD units themselves appears to require little or no input from the applicant.

24. At hearing the applicant confirmed that he communicated with Mr Poon mostly via a group chat on WhatsApp. He said that any major discussions were had over Zoom video calls as required. He confirmed that records were not kept of daily operations.  The applicant accepted that Mr Poon was responsible for the daily works and managed LTAD. Mr Poon chose and met with the company accountants, arranged for the drawing of plans for the LTAD units and organised family trusts. The applicant said that all decisions were discussed and approved by directors.

    28.     As for the available email and WhatsApp evidence, it appears that the applicant was planning to visit Australia at the end of December 2019 to inspect land however due to work commitments in Malaysia and the pandemic, the trip was put on hold. The WhatsApp messages stopped in 2019 after the LTAD units were leased. Despite some messages about taxes and bills, the applicant accepted that there was limited contact between himself and Mr Poon during 2019 to 2022. He said that this was likely due to the LTAD units being managed by an agent, that there were not many issues to manage and because LTAD was ‘not pushing much at [the] moment’.

25. The applicant himself states that he has ‘substantial ongoing business interests in Malaysia’ and that ‘[t]hese interests demand that I spend the majority of my time in Malaysia to manage them’. It appears, accordingly, that the applicant’s priority is his business interests in Malaysia, and not those in Australia.

26. At hearing, the applicant said that he was the managing director and founder of a company called KAB in Malaysia. He explained that KAB was very successful with helping energy efficiency and he was intending to bring the ‘green energy’ business to Australia by transferring the technology to Greengen. The applicant further explained that KAB had expanded exponentially over the past five years and the business was developing in Thailand, Vietnam, Hong Kong and the Philippines. He said KAB now comprised of five other businesses, all of which he is a director. At this stage, the applicant said that residing in Australia would be detrimental to his business as he still needs to spend a bit more time developing into other countries. The applicant said that in a few years’ time, he may be able to spend more time in Australia.

27. According to the Department’s movement records for the applicant, the applicant visited Australia on four occasions before he was granted the visa. After the grant of the visa, the applicant travelled to Australia on five further occasions. Each of the applicant’s visits to Australia, including before the visa was granted, were only for a few days.

28. For these reasons, I am not convinced that the applicant 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; nor intends to continue to make such efforts; subsection 134(2) of the Act.

29. I also note that the applicants failed to respond to the section 137 notice. They assert that their migration agent failed to notify them of the notice, or request material from them. There is no corroborative evidence to demonstrate when and how they did become aware of these matters, or as to their engagement with the agent. At hearing, the applicant agreed that he was aware there would some visa monitoring by the Department. However, he maintains that he only became aware of an issue with the applicants’ visas when he received a Medicare cancellation letter. This is despite the applicant signing a Form 956 in June 2019, giving his migration agent authority to act of the applicant’s behalf for the purposes of business monitoring; and despite being copied into emails from the Department to his migration agent in July 2019.

30. As to residual discretion not to cancel the visa, I note the following.

31. All six applicants are residing in Malaysia.

32. While the COVID-19 pandemic may provide some explanation for the inactivity of LTAD (and possibly Greengen), it does not explain the entire inactivity.  At the time of hearing, there was no clear articulation of a plan to be undertaken by LTAD in furtherance of property development, or by Greengen. In fact, the applicant advised that any expansion of Greengen in Australia would be a few years away.

33. I do accept that the applicant’s wife has remained in Malaysia due to her health. She has undergone treatment for thyroid cancer in 2020 and 2021 and has wished to stay in Malaysia to be close to her friends and family.

34. The applicant claims he intends to reside in Perth when he is retired with no further information about his retirement, this is little more than a vague intention. Further, the applicant’s daughter, Ms Yiew Hui Lai (Ms Lai) who completed her studies in Western Australia, departed from Australia on 16 June 2021. She has since been residing in Malaysia and is currently in full time employment. While the applicant has some personal property holding in Australia, there is insufficient evidence to find that the applicant has developed significant ties to Australia. There is no evidence that any potential benefit to the Australian community if the discretion was exercised, outweighs its possible detriment, or that not exercising the discretion would have a negative impact on Australia’s international relations.

1. As such, I am not satisfied that the residual discretion not to cancel the visa should be exercised.

   Extreme Hardship

2. The applicant’s wife’s movement history is very similar to the applicant. She did not accompany the applicant on two trips to Australia in 2015 and 2016, before the grant of the visa. She also did not accompany him on one trip after the grant of the visa, in December 2018. Further, her movement records indicate that she has never resided in Australia on a permanent basis. As already noted, she has received treatment for thyroid cancer in 2020 and 2021, and currently prefers to remain in Malaysia to be close to her doctors and family.

3. Yiew Kwan Lai, Yiew Kar Lai and Yiew Teng Lai have almost identical movement histories. They have all travelled to Australia on two occasions with their parents after the grant of the visa: in 2017 and 2018. Those visits were very brief and there is no information provided about their interests in, or attachments to, Australia.

4. Ms Lai has a more extensive movement history. She has entered Australia on 6 occasions since the grant of the visa and has lived in Australia between 2018 until she recently departed on 16 June 2021. In her written statement, Ms Lai stated:

   I am currently working full time as a marketing executive in Malaysia. This has no direct relation to or impact on my firm decision in returning to Australia. The reality is that I cannot realistically return to Australia given that the AAT matter is still an on‐going matter. Further, given my mother’s condition, I sincerely wish to spend as much time with her as possible.

   My future plan has always been to work in Australia…

5. This sentiment was reiterated at hearing. Ms Lai stated that she was asked to return to Malaysia due to her mother’s health but her intention for the future is to live and stay in Australia. She said she still has bank accounts and a car in Western Australia which she keeps at her mother’s apartment.

6. Although Ms Lai has recently been onshore, she has now departed Australia, and there is nothing to demonstrate she will suffer extreme hardship if her visa remains cancelled. There is a suggestion that another applicant wishes to study in Australia in the future, as noted by the applicant and Ms Lai. The applicants may apply for other types of visas should they wish to return to Australia in the future. 

   Decision

7. The decisions under review are affirmed.

I certify that the preceding 45 (forty-five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

.................................[SGD].......................................

Associate

Dated: 6 October 2022

Date(s) of hearing:	17 & 18 March 2022
Advocate for the Applicants:	Mr S Lim, John Lim Migration Agent Pty Ltd
Solicitor for the Respondent:	Ms M Donald, Sparke Helmore Lawyers