Lao and Minister for Immigration and Multicultural and Indigenous Affairs
[2005] AATA 499
•31 May 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 499
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2004/1
GENERAL ADMINISTRATIVE DIVISION ) Re LEON LAO Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms Linda Savage Davis, Member Date31 May 2005
PlacePerth
Decision The Tribunal affirms the decision under review.
[Sgd: L Savage Davis]
Member
CATCHWORDS
CITIZENSHIP – application for Australian citizenship under s 13 of the Act – application refused on the basis of applicant’s failure to satisfy residence requirements – whether discretion should be exercised on grounds that applicant was engaged in activities beneficial to the interests of Australia – whether applicant “likely to reside or continue to reside in Australia” or “maintain a close and continuing association”
Australian Citizenship Act 1948 s 13(1)(d), 13(1)(e), 13(4)(b)(4i), 13(9)(c)
Australian Citizenship Instructions chapter 4(5)
Minister for Immigration, Local Government and Ethnic Affairs and Roberts (1993) 29 ALD 656
Re Ho and Minister for Immigration and Ethnic Affairs (1994) 34 ADL 664
Re Lan and Minister for Immigration and Multicultural Affairs [2001] AATA 362
Re McCarthy and Minister for Immigration, Local Government and Ethnic Affairs (1993) 30 ALD 447
Re Singh and Minister for Immigration and Multicultural Affairs [1998] AATA 329
Re Tinamisan and Minister for Immigration and Multicultural Affairs (1996) 43 ALD 349
Re Tsui and Minister for Immigration, Local Government and Ethnic Affairs (1991) 34 ALD 236
Re Pai and Minister for Immigration and Ethnic Affairs (1994) 20 AAR 342
Re Page and Department of Immigration and Ethnic Affairs (1995) AATA 481
REASONS FOR DECISION
31 May 2005 Ms Linda Savage Davis, Member 1. This is an application for review of a decision made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (“the respondent”) on 4 December 2003 refusing to grant Australian citizenship to Mr Leon Lao (“the applicant”).
2. At the hearing the applicant was represented by Mr J Galloway of John Galloway & Associates. The respondent was represented by Mr A Gerrard, a solicitor with the Australian Government Solicitor. The Tribunal had before it the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T documents”) (T1/T147 pp 1 – 348). In addition, the Tribunal had before it the applicant’s Statement of Facts and Contentions (Exhibit A1); the applicant’s additional documented evidence filed 27 October 2004 (Exhibit A2) and the respondent’s Statement of Facts and Contentions dated 1 July 2004 (Exhibit R1). Oral evidence was given by Mr Leon Lao, Mr Peter Atsaros and Ms Shirlyn Reimer.
Background
3. Mr Lao first arrived in Australia as a permanent resident on 30 November 1986. On 3 January 2003 he applied for Australian citizenship. On 4 December 2003 the respondent advised Mr Lao that his application for the grant of Australian citizenship had not been approved because he had failed to meet the residency requirements set out in s13(1)(d) and (e) of the Australian Citizenship Act 1948 (“the Act”). These subsections require an applicant for Australian citizenship to reside in Australia for a period of one year during the preceding two years before application for citizenship, and a period of two years during the preceding 5 years. At the date of his application Mr Lao had spent 103 days in Australia in the two years prior to the date of application, and 302 days in Australia in the 5 years prior to the date of the application.
4. The applicant has sought a review on the grounds that the discretion under s 13(4)(b)(i) of the Act should be exercised in his favour to grant him citizenship.
The Applicant’s Evidence
5. Mr Lao told the Tribunal that he and his family first came to Australia in 1986. He was born in the Philippines, a country that his parents had gone to when fleeing from Communist China. There he did a degree in chemical engineering. In 1963 he and his brother Dean set up D & L Company (D & L). It was incorporated in 1971. D & L had grown from small beginnings to now employing 900 people. It had a range of interests including processing raw materials for plastic and refining vegetable oils. It supplied a large number of food outlets such as McDonalds, Dunkin Donuts and Nestle. Mr Lao said that D & L focussed on manufacturing and processing of products in the food and mining industries.
6. Mr Lao said that since 1986 he had looked at what could be exported from Australia to Asia as he had a very good understanding of market needs in Asia.
7. In 1991 his brother Dean had taken over an Australian company called Austral Pacific Pty Ltd (“Austral”). It was necessary to rebuild its image and for the first five years it ran at a loss. Mr Lao said he was a director and saw his role as helping it develop Asian markets because of his knowledge of markets and contacts in Asia. Even now it made only a small profit. His role has been to help Austral develop Asian markets because of his knowledge of, and his contacts in Asia. Austral has 3 divisions – vegetable, meat and what was described as miscellaneous. It had a number of workers packing at a shed at Gnangara and one full time employee going down south to source vegetables. As the price of vegetables became very competitive in the Asian market in the 80s and 90s, the focus of the business shifted to the meat division, in particular, to chilled meat and specialty meat like white rock veal. These unique food products have been promoted in the Asian market and there has been a considerable turnaround for Austral in the last 2-3 years.
8. Mr Lao said only about 30%-40% of Austral’s exports went to D & L, the rest went to other parts of Asia. He had for example, on behalf of Austral sourced beef tallow from WA from Fertal Holdings, and encouraged them to undertake processing that would make it more profitable when imported into Asia.
9. Mr Lao said he was also involved in Advanced Pet Care (“APC”). He had been involved in efforts to develop products for the Japanese market which required certain pet food that was conducive to animals living in small apartments. An Austral employee had been sent to APC to help it overcome a number of problems it had that had led it to the brink of bankruptcy. He had been involved in investing some $650,000 into APC. He said in the most recent financial year APC had only had losses of $70,000.
10. Mr Lao said that he provides networking for both Austral and APC. He said in Asia it is “know who”, not “know how” that is important. As he was experienced in starting a business from scratch which had become very successful, he was obviously not motivated by money. Mr Lao said he was financially independent. He said he believed he had always been an ambassador for Australia in his travels to Australia and felt by promoting Austral and APC that in a small way he was able to give back to Australia, a country where his children had grown up and attended school.
11. Mr Lao said when his parents moved to the Philippines from China before his birth it was not his choice. He said that although he had spent most of his life living in the Philippines he found that when he went to the Sydney Olympics he related strongly to all that was Australian and this was a turning point. He felt this was the country he belonged to and in 2003 lodged his application. Mr Lao said he doesn’t need an Australian passport to travel in Australia nor to continue his work in Asia. He said there was no real personal gain for him, but in fact it would result in greater responsibilities for him if he became a citizen. Mr Lao confirmed that he had been a permanent resident for 19 years.
12. In cross examination Mr Lao confirmed that he had spent most of his time in the Philippines running D & L. This was the source of his principal income. He received no income from Austral and APC for the advice and networking he provides. He said that he owns extensive property in the Philippines including 5 processing plants with a turnover of $2 million. He said he and his 4 brothers are the directors of D & L and it is an entirely family owned business. Since the 1980s it has had a number of subsidiary companies. He described his role in D & L as Executive Vice President responsible for strategy and responding to the changing market and the need to introduce new goods. He has been with D & L since he and his brother set it up in 1963. He described his work for D & L as being 5½ days a week, 6.30 in the morning until 6.30 at night except for 3 afternoons when he leaves to play golf at 4.00pm on doctor’s orders.
13. Mr Lao confirmed that he is a director of Austral along with Peter Atsaros and Shirlyn Riemer. He believed his brother Dean was also a director. Mr Atsaros and Ms Riemer ran the business. His brother Dean, who is 67, has a role similar to his in looking for new products. His input is related to his market knowledge of Asia. He needs to be living outside of Australia to network which is how business is done in Asia. Due to his 42 years of travelling and living in Asia he has very good contacts. He said he travels constantly and is very active in the D & L business.
14. Mr Lao said initially he spent more time on Austral analysing its weaknesses and developing products in markets. He said in the last 2 – 3 years he believed it to be on the right track. He said his brother Dean bought Austral in 1991 and he had become involved in 1995 in particular, through the import of beef tallow from Austral to D & L.
15. In 2001 he became involved in the pet food company APC. He said although it was still losing money it has 12 full time employees. He estimated that he spends 10% of his time on this company. Consumer Care Company does the marketing. Mr Lao said he received a monthly summary and participated by giving comments and analysis. He said that APC does not ship to the Philippines through Austral but another non-related company.
16. Mr Lao told the Tribunal that Austral has an office in the Philippines. Mr Princeton Tan had been employed to promote new markets for Austral. Mr Tan is young and required his guidance and advice in regard to the business. He said Mr Tan has become increasingly independent and reports now to head office and comes to him for strategic advice. Mr Tan has now ceased his work for Austral and now works for Consumer Care Philippines promoting the pet care product. He also works for D & L. Mr Lao said that Austral had now sent another person to the Philippines office. He didn’t know who that person was but thought one of his brothers would know. Mr Lao said his involvement with Austral focused on white rock veal which has been successfully introduced into Morocco. He is still involved in strategic planning and on the three or four occasions per year when he comes to Australia he meets to discuss strategy and planning. He said it was difficult to quantify the time he spends.
17. Mr Lao said he intends to reside in Australia when he retires. He is 63 now and expects he will retire when he is 65. Mr Lao confirmed that he had no problem travelling in Asia or entering Australia on permanent residency.
18. In response to questions by the Tribunal Mr Lao said that the directors of Austral were Peter Atsaros, Shirlyn Riemer and himself. He was not sure if his brother Dean and a Mr Tan were directors. He said that Austral was owned, however, by his brother Dean, Mr Tan, Peter Atsaros and Shirlyn Riemer. Mr Lao said he is not a shareholder. He was not sure what proportion of shares were owned by his brother Dean, Mr Tan, Peter Atsaros and Shirlyn Riemer.
19. Mr Lao said that Malcolm Sims, Shirlyn Riemer, Nick Costa and he thought two of his brothers were directors of APC. He was not a director. He said he had helped set up good manufacturing processes, specification of purchase orders and job descriptions in key positions. He confirmed that he currently spent 10% of his time guiding the team. He said the deals are done through Consumer Care, a D & L subsidiary. For marketing through the rest of Asia, in particular Japan, he uses Pegasus. He said although he initiated this contact the relationship is directly between APC and Pegasus. Mr Lao said that through the family trust company, United Resources, $600,000 had been injected into APC although it was still operating at a loss.
Mr Atsaros’ Evidence
20. Mr Atsaros confirmed that he had prepared the statutory declaration dated 24 May 2004 (Exhibit A2). He was a director of Austral. He told the Tribunal he believed there were 4 or 5 other directors and that it was solely an export company of Australian food items which was sent primarily to South East Asia. Austral mainly exported chilled and frozen meat, groceries, seafood and dairy. He described himself and Shirlyn Reimer as the working directors and the other directors as Mr Lao and members of the Lao family. He said members of the Lao family, Mr Tan and Ms Reimer were the shareholders. Mr Atsaros said that the turnover was between $8-10 million. He had previously been responsible for the meat division, Shirlyn for the fruit and vegetable, and both of them for the remaining miscellaneous items. However, in recent years Shirlyn had been more involved in APC. He described himself as employed by Shirlyn. Mr Atsaros said that the Philippines used to be their number one market a few years ago, but currently Mauritius is, with Philippines and Singapore closely behind. He said that in 2002-2003, $4,100,000 of their sales were to the Philippines of which nearly half went to D & L. He agreed that about a fifth of the total export of Austral went to D & L. He said in the last financial year this would have been slightly less.
21. Mr Atsaros said that they provided financial reports once a year to the directors and also reports to Mr Lao who he understands is not paid. Mr Atsaros said when Mr Lao became a director in 1995 his knowledge and experience and networking in Asia led to the growth of the Philippines as their number one market. Mr Lao also introduced them to a number of other customers in the Philippines. Mr Lao also was instrumental in a review of Austral which led to a decision to concentrate on the meat division. Mr Lao provides strategic direction. He said that they meet with Mr Lao in Perth and speak by phone and fax. Austral has offices in the Philippines and Mr Lao networks on behalf of Austral. Mr Lao’s advice had been important in seeking the opportunities and building a brand because of his understanding of the Asian market and networks.
22. In cross examination Mr Atsaros said that he met with Mr Lao in the Philippines once or twice a year when he visits there and then meets perhaps up to 4 times a year in Perth. He said it could be one meeting or a series of meetings which last 4 – 5 hours, but they also communicated once or twice per week by phone and email. Mr Atsaros said that the Austral office in the Philippines had organised a promotion for brands like Pura and Cottees and Mr Princeton Tan was responsible for organising this. He did the day-to-day work and reported to Mr Lao. Mr Atsaros said he dealt with both Mr Tan and Mr Lao. They had had an office in the Philippines because it had until recently been a number one market, and had been a market to which they had exported all food types. He said there were no other offices in other countries. He explained that, for example, in Mauritius it was a different market which did not involve store promotion, as it was tourist based. Mr Atsaros said that since Mr Tan left the Austral office in the Philippines he had not been replaced. He indicated that Mr Tan had been there because Austral was receiving an Export Marketing Development Grant. He said that Austral was currently not doing promotion and Mr Tan had moved to do promotion on behalf of the pet food company. Mr Atsaros said that despite the enormous turnover, Austral had still had relatively small profits including losses in 1999/2000 and 2001/2002. He said in 2003 they had a profit of approximately $118,000 and in 2000 of $194,000. Mr Atsaros thought that Mr Lao had contributed to approximately 20% of the business opportunities Austral was enjoying, and gave the example of burger patties made by Butlers and introduced to the Philippines with the assistance of Mr Lao.
Ms Shirlyn Reimer’s Evidence
23. Ms Reimer said that she was the largest shareholder of Austral and also a working director. She said she owns 40%. Her father Mr Dean Lao senior owns 10%, her brother Mr Dean Lao junior 30% and Mr Tan 20%. She said that she had worked in the vegetable division predominantly and had been involved in the company since 1991. She explained that when she went to Taiwan for the first time she met friends of Mr Lao, who is her uncle, and was also introduced to people through Rotary connections. Mr Lao could provide information as to how to review someone’s background. He also had useful ideas as an older person who is more experienced and provided useful advice and business contact. She said his business advice was his main contribution.
24. Ms Reimer said she was the Acting General Manager for APC. She said the Board consisted of Mr Nick Costa, Mr Ian Sims, her husband Mr Lawrence Reimer and herself, representatives from Japanese shareholder and two of her other uncles. She said that the shareholders were predominantly members of the Lao family. She understood that Mr Leon Lao was neither a director nor shareholder, but had provided free of charge considerable assistance. Ms Reimer said that in 2000/2001 APC went into receivership. She acted as General Manager and Leon Lao provided advice about machinery and job positions. In 1999 it had not been making money but because of working capital injected by United Family Resources as a loan, the company was able to continue in business. She said Mr Lao had assisted the company, for example, by introducing friends who were looking for a business in Australia in pet food for the Japanese market. Ms Reimer said that notwithstanding that APC has always made a loss she believed the company has the potential to turn around and it has started to do so. She said the reason the business had not closed was because the family did not want to lose face with the Japanese. She said that she still works one day a week at Austral and spends the rest of the time at APC. Mr Atsaros had taken over her share of work at Austral. She spoke to Mr Lao on a needs basis, particularly when seeking strategic advice. She said that she would speak to him perhaps every week by phone in regard to Austral and APC. She said in addition she had gone to observe the D & L plant which has similar machinery to theirs but on a greater scale. She said she did not report to Mr Lao or anyone in particular on a regular basis. She was not managed by Mr Lao. She sought general advice from her uncle about Asia and networking. She said that it wouldn’t matter where he was located as she could still consult him, even if he lived in Perth because she went to him primarily because of the quality and honesty of his advice.
Final Submissions
Submissions on behalf of the applicant
25. Submissions were made on behalf of the applicant and can be summarised as follows:
· that Mr Lao is an international businessman with diverse interests in both Asia and Australia. Such applicants for Australian citizenship often find it difficult to meet the residential requirements for grant of citizenship because of their need to travel constantly;
· the Tribunal was referred to Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 29 ALD in support of the proposition that “activities beneficial to the interests of Australia” requires some objective benefit to Australia;
· the Tribunal was also referred to Chapter 4 of the Australian Citizenship Instructions (“the Instructions”) and a number of authorities referred to in the policy guidelines. In the light of the authorities and the Instructions it was submitted that in Mr Lao’s case the benefits of his business activities were not merely for himself, or even predominantly for himself, but by and large for the public interest of Australia;
· that the role Mr Lao played in both Austral and APC providing strategic advice enabled the company to grow in one instance and in the other instance to survive;
· that Mr Lao had put significant time into these businesses without remuneration and it was submitted this was because he was a classic Chinese entrepreneur and gained pleasure from his involvement in business;
· that Mr Lao’s involvement in Austral resulted in substantial real exports which are continuing even if small;
· that the principle enunciated in Ming Nan Kao v Minister for Immigration and Ethnic Affairs (1993) 30 ALD 916 supported Mr Lao’s position, that is, at paragraph 25 where the Tribunal held:
“the Tribunal accepts that activities involved in the promotion, arrangement of the exportation of Australian commodities are beneficial to the Australian national economy and are, accordingly, beneficial to the public interest of Australia as a whole”
· the Tribunal was referred to Taechaubol and Minister for Immigration and Multicultural Affairs [2001] AATA 425 at paragraph 138. It was submitted that Mr Lao has produced benefit both economic and commercial to Australia through his network of contacts in Asia and through his ability to stand apart from businesses and provide strategic planning and advice. Referring to para 138(7) of Taechaubol [supra] Mr Galloway submitted that this principle was met because Mr Lao adds significant value to the companies in which he is involved. In addition it was submitted Mr Lao fulfilled the general propositions outlined in Taechaubol para 138(8), (9) & (10);
· in conclusion it was submitted that Mr Lao had met all of the principles that he was required to meet and his activities have not been predominantly in the furtherance of his own private interests.
Submissions on behalf of the respondent
26. The respondent relied on its Statement of Facts and Contentions filed on 1 July 2004 and in addition made the following submissions that can be summarised as follows:
· that the key issue is whether or not the time spent by the applicant outside of Australia should be considered under concessional provisions as time spent beneficial to the interests of Australia;
· that the applicant’s activities outside of Australia were predominantly for the furtherance of his own private commercial interests, rather than predominantly for providing any objective benefit to Australia. In support of this it was submitted that the applicant was a director of a large and prosperous business in the Philippines that he established with his brother and has run for many years. Mr Lao’s own evidence was that he devotes the majority of time to D & L working 5 ½ days per week, approximately twelve hours per day apart from 3 days a week when he finishes at 4.00pm. It was submitted that this accorded with the applicant’s description of a company which had 900 employees and appears to have numerous subsidiary companies;
· that the Philippines businesses did not provide any objective benefit to Australia and that any benefit that Australia received from imports of Australian goods to D & L is minimal;
· that the businesses that the applicant has involved himself in Australia, namely Austral and APC, whilst recording substantial export value have generated little if any profit. As a result it was submitted there was no significant or substantial benefit of taxation dollars flowing to the Australian economy;
· that whilst the applicant has indicated he is in charge of overseas sales and marketing in relation to Austral, the evidence supports the finding that another person, Mr Princeton Tan is actually responsible for sales and activities in relation to both Austral and APC. This, it was submitted, accords in any event with Mr Lao’s evidence that he devotes the majority of his time to his interests in D & L;
· that a general supervisory role is not sufficient to satisfy the legislation and there must be a clear nexus between the activities engaged in overseas and the claimed benefits for Australia;
· that in relation to APC the evidence was that Mr Lao’s role was advisory. In addition, it was submitted that there was evidence was that it was not necessary for Mr Lao to be a resident in Asia or specifically the Philippines, to provide this advice;
· that the evidence supported the conclusion that if Mr Lao did reside in Australia APC would still consult him and engage him in his capacity as providing strategic advice;
· that spending approximately 10% of your working time in a general supervisory role was not, it was submitted sufficient to invoke the exercise of the discretion which is understood to be exercised only in exceptional circumstances;
· in addition that whilst it was not necessary to spend 24 hours a day, 7 days a week of your time overseas on activities beneficial to the interests of Australia, it was understood that it should be a substantial amount of time and the respondent submits that 10% is not a substantial amount;
· in the event that the discretion in s 13(4) (b) (i) (C) of the Act was exercised in favour of the applicant, the respondent submitted that the applicant does not satisfy s 13(1) (j) of the Act. The applicant, it was submitted, whilst owning a house in Dalkeith has provided no evidence that he lives there or has ever used the property as his primary residence. It was submitted that although his wife and children live in Australia the applicant has chosen to reside continually in the Philippines where he holds down a significant position and runs a very large business. There is no evidence to suggest that the applicant would, if granted citizenship choose to move to Australia although he appears to have the financial means to do so;
· finally it was submitted that the applicant has said that when he retires he might move here, but that is at least another 2 years from now.
Consideration of the Issues
27. In reaching its decision the Tribunal took into consideration the documented and oral evidence, the relevant legislation and case law. Section 13 of the Australian Citizenship Act 1948 (the Act), as amended provides in part as follows:
13(1) Subject to this section, the Minister may, in the Minister’s discretion, upon application in accordance with the approved form, grant a certificate of Australian citizenship to a person who satisfies the Minister that:
…
(d)the person has been present in Australia as a permanent resident for a period of, or for periods amounting in the aggregate to, not less than one year during the period of 2 years immediately preceding the date of the furnishing of the application;
(e)the person has been present in Australia as a permanent resident for a period of, or for periods amounting in the aggregate to, not less than 2 years during the period of 5 years immediately preceding the date of the furnishing of the application;”.
28. Where an applicant fails to meet the criteria in s 13(1) (d) and (e) of the Act as the applicant does, he or she may be assessed under s 13(4) of the Act.
“(4)For the purposes of the application of subsection (1) in relation to an applicant for the grant of a certificate of Australian citizenship:
…
(b)subject to paragraph (a), the Minister may, in the Minister’s discretion:
(i)treat a period during which the applicant:
(A) was a permanent resident;
(B) was not present in Australia; and
(C) was engaged in activities that the Minister considers beneficial to the interests of Australia;
as a period during which the applicant was present in Australia as a permanent resident;
(ii) treat a period ending before the period of 5 years referred to in paragraph (1)(e), being a period during which the applicant was present in Australia as a permanent resident, as a period within that period of 5 years;
(iv) if the Minister considers that the applicant would suffer significant hardship or disadvantage if a certificate of Australian citizenship were not granted to the applicant - treat a period during which the applicant was present in Australia otherwise than as a prohibited immigrant, as a prohibited non-citizen, as an illegal entrant, as an unlawful non-citizen, or in contravention of a law of a prescribed Territory, as a period during which the applicant was present in Australia as a permanent resident; or
(v) if the Minister considers that an applicant who is a permanent resident was, by reason of an administrative error, not a permanent resident during a period during which the person was present in Australia - treat the period as a period during which the applicant was present in Australia as a permanent resident.”
29. Chapter 4 of the Australian Citizenship Instructions (the Instructions) sets out the Policy guidelines which are applied by the respondent’s delegates in assessing applications for the grant of a certificate of Australian citizenship under s 13 of the Act. The relevant Instructions are at 4.3.17 to 4.3.20 (subsequently renumbered since 2/4/05) :
“Residence discretion: Residence outside Australia (s 13(4)(b)(i))
4.3.17 Periods during which the applicant was a permanent resident and was outside Australia engaged in activities beneficial to the interests of Australia may be counted towards the residence requirements. This discretion applies to both residence requirements (ie, both “2 years in the last 5” and “1 year in the last 2”).”
4.3.18 The legislation is interpreted as requiring the following:
•the applicant must have been a permanent resident (see 1.4) during any of the periods counted;
•the periods spent outside Australia to be counted must be:
–within the last 5 years for the 2 years in the last 5 years requirement; and
–within the last 2 years for the 1 year in the last 2 years requirement;
•the applicant must have been personally engaged in activities overseas beneficial to the interests of Australia, not just, for example, the company or organisation for which the applicant worked;
•the applicant must have been engaged in a series of activities, not just a one-off transaction;
•the activities must also be during the relevant period/s under consideration;
•the activities must have been “beneficial to the interests of Australia” during the relevant period/s. It is not intended that the provision apply where there are no current benefits irrespective of whether benefits may accrue in the future.
4.3.19Under Ministerial policy, the discretion will usually only be exercised if the applicant is in Australia and was either:
•required to work overseas by a Federal, State or Territory Department, semi-government authority or private employer; or
•self-employed and frequent travel abroad was essential to the successful operation of their business, whether for an extended period or on a regular short-term basis; or
•engaged overseas in activities of a social, cultural, economic or political nature which are clearly beneficial to the interests of Australia and re widely recognised as such either by:
–the Australian community generally; or
–prominent persons associated with the applicant’s field of endeavour (for example, people engaged in aid programs, artists and entertainers of world standing).
4.3.20 If the applicant is overseas, the discretion will normally not be exercised.”.
30. It is not in dispute that the applicant does not satisfy the residency requirements of the Act but it was submitted on his behalf that the Tribunal should exercise the discretion provided for in s. 13(4)(b)(i)(C) of the Act in the applicant’s favour. In reaching its decision the Tribunal notes and concurs with Deputy President McMahon in Re Ho (supra) (at page 671):
"The discretion contained in s 13(4) is not intended to offer an alternative method of complying with s 13(1)(d) and (e). It is intended to allow some flexibility, in exceptional circumstances, when specific activities, which are the applicant's substantial activities during specific periods, can be demonstrated. The presence of the applicant in Australia for specific periods is one of the prerequisites to a grant of citizenship. It is not an optional requirement interchangeable with certain activities outside Australia."
31. The Tribunal was referred to a number of decisions including Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 29 ALD 656 in which Einfeld J said at 660:
“It seems to me that the term “activities beneficial to the interests of Australia” means something in the nature of activities which provide some advantage to Australia, whether commercial or otherwise. The concept necessarily connotes some public interest of Australia, even if of a general or non-specific character, and means more than the private interests of the respondent [person applying for citizenship]. The section requires some objective benefit to Australia”.
32. Einfeld J went on to say “… all factors that are relevant should be taken into account and their considerations should not be denied because they fall outside the guidelines that have been prepared …”.
33. In relation to activities beneficial to the interests of Australia the Tribunal has weighed up whether the applicant’s activities primarily were for his private benefit or achieved recognition for Australia and were beneficial to the public interests of Australia. In considering this the Tribunal notes and takes into account the comments of Deputy President McMahon in Re McCarthy (supra) at 448:
“… that the applicant’s employer has enhanced the reputation of its Australian parent company, and Australian companies in general, must be regarded as falling short of demonstrating activities in which the applicant was engaged that were beneficial to the interests of Australia. Furthermore, having regard to the observations of Senior Member Gibbs in Re Tsui (1991) 24 ALD 236, it must also be considered whether the activities are so remote, indirect and speculative in relation to the beneficial interests of Australia that they could not be taken into account.”.
34. Previous decisions of both the Administrative Appeals Tribunal and the Federal Court make it clear that the activities envisaged must be beneficial to the public interest and that the public benefit must be more than just a minor or indirect benefit flowing from the applicant’s private business interests. There must be a clear connection between the activities undertaken overseas and the objective benefit to Australia.
35. Mr Lao was granted permanent residence in 1986. Since that time, although his family has lived in Australia, he has been based in the Philippines devoting the majority of his time to D & L, a large successful company set up by his brother and himself in 1963. Since approximately 1995 he has been involved as a director in Austral. His brother, Dean and niece, Shirlyn Reimer are two of the four owners of Austral. He provides advice and networking free of charge based on his knowledge of Asia where he has lived and worked nearly all his life. Similarly for APC he has provided advice based on his knowledge of Asia and knowledge of the manufacturing processes. APC is owned amongst others by family members including two of his brothers. APC operates at a loss and has continued to trade due to the injection of funds from a family trust company that Mr Lao is associated with.
36. Evidence from Mr Atsaros and Ms Reimer is that Mr Lao’s advice has been extremely helpful and has in Austral’s case enabled it to improve its position in the Asian market. That being said the profits generated by Austral have been relatively small despite its substantial turnover. As Mr Lao’s advice is gratuitous, he pays no personal tax in Australia. APC to date has never made a profit. It appears from Ms Reimer’s evidence that APC’s position is still precarious and the reason the business had not closed was because the family did not want to lose face. This presumably explains the loan made by United Family Resources to enable it to continue operating. Mr Lao’s evidence is that the vast majority of his time is spent on D & L in the Philippines and it is from this business that he derives his income.
37. The Tribunal accepts that Mr Lao’s contacts in Asia have assisted Austral develop markets in Asia. The high turnover suggests some benefit to Australian producers. Whilst the Tribunal accepts that activities that result in private benefit are not mutually exclusive with activities beneficial to Australia, Mr Lao’s free advice to a company of which the majority share holders and owners are family members and which has had a long term association with D & L, does not equate with the activities beneficial to Australia so as to exercise the discretion. His activities for Austral and APC are primarily for the benefit of himself or family members. The objective benefit, for example of promoting beef tallow, whilst laudable, is not so significant as to displace the residency requirements and lead to the conclusion that the applicant is effectively unable to live in Australia. The evidence in fact supports the view that some of the advice he provides is not reliant on his residence outside of Australia. Rather it reflects the fact that Mr Lao has lived all his life in Asia and travels extensively. His ongoing need to live in the Philippines appears to be his high level of commitment to D & L, notwithstanding that his evidence was that his children had grown up in Australia.
38. In the Tribunal’s view, after weighing up all these matters, it is not appropriate to exercise the discretion in section 13(4)(b) of the Act on the grounds that Mr Lao does not satisfy the requirements of being “engaged in activities that the Minister considers beneficial to Australia.”
39. The Tribunal therefore affirms the decision under review.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of MS LINDA SAVAGE-DAVIS, MEMBER
Signed: J Rainey
AssociateDate/s of Hearing 26 April 2005
Date of Decision 31 May 2005
Counsel for the Applicant -
Solicitor for the Applicant John Galloway
Counsel for the Respondent -
Solicitor for the Respondent Arran Gerrard
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