Li and Ors and Minister for Immigration and Citizenship

[2008] AATA 212

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 212

ADMINISTRATIVE APPEALS TRIBUNAL      )

)    No 2007/4654 - 4656

GENERAL ADMINISTRATIVE DIVISION		)
Re		LI WEIQIAN, LI SIMING AND HE XIAOWEN

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal Senior Member M D Allen

Date11 March 2008

PlaceSydney

Decision  For the reasons given orally at the conclusion of the hearing in this matter, the decision under review is SET ASIDE and the Tribunal substitutes in lieu thereof its decision, viz. THAT the visas of the Applicant and secondary visa holders be reinstated.

..................[sgd]...................

M D Allen
  Senior Member

CATCHWORDS

BUSINESS SKILLS VISA - BUSINESS SKILLS VISA – review of decision cancelling applicant’s and secondary holders business skills visas – whether applicant has a substantial ownership interest in; and utilises his skills in actively participating at a senior level in the day-to-day management of; an eligible business in australia – whether a business is being carried on – residual discretion not to cancel business skills visa – on prima facie same material, different delegates came to different decisions on application by siblings engaged in same enterprise – decision under review set aside

LEGISLATION

Migration Act 1958 section134

Administrative Appeals Tribunal Act 1975 section 37 and 43(2A)

CASE LAW

Shi v Migration Agents Registration Authority (2007) FCA 59

Re Tang v Minister for Immigration and Multicultural Affairs (2000) AATA 997

Huang v Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656

Ong v Minister for Immigration and Multicultural and Indigenous Affairs (2003) AATA 178

Re Ng v Minister for Immigration and Multicultural and Indigenous Affairs (2003) AATA 299

Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) FCA 31

Re Drake v Minister for Immigration and Ethnic Affairs (No. 2) (1978) 82 ALD 634

Re Hendra v Minister for Immigration and Citizenship (2008) AATA 150

REASONS FOR DECISION

11 March 2008  Senior Member M D Allen 

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Respondent of a copy of the decision that was in fact made, the Respondent pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Respondent statement in writing of the reasons of the Tribunal for its decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.

3.        The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:

Senior Member M D Allen

Signed:         [sgd]  Mwela Kapapa     
          ..................................................................................……

Associate

Date of Hearing  11 March 2008

Date of Decision  11 March 2008

Advocate for the Applicant             Australian Visa & Migration Services

Solicitor for the Respondent           DLA Phillips Fox

ADMINISTRATIVE APPEALS TRIBUNAL  [2.00 pm]
By MR M.D. ALLEN, Senior Member
Matter No 2007/4654
LI AND MINISTER FOR IMMIGRATION AND CITIZENSHIP

SYDNEY, 11 March 2008

MR ALLEN:   By application made the 25^th day of September 2007, the Applicant sought review of a decision to cancel his Business Skills Visa. That decision had the result of cancelling the visas of his dependents, namely that of his wife and two children. His wife and daughter are also Applicants before this tribunal. The Applicant was granted a Business Skills Visa on 7 May 2004 and arrived in Australia on 18 August 2004. Since that time he has spent 51 days only in Australia, up to the date of his visa cancellation. Section 134 of the Migration Act 1958, reads inter alia:

(1) subject to subsection (2) and section 135 the minister may cancel a visa, other than an established business in Australia visa, an investment visa or a family member’s visa, by written notice given to its holder if the minister is satisfied that its holder: (a) has not obtained a substantial ownership 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: (1) hold a substantial ownership interest in; and (2) utilise his or her skills in actively participating at a senior level in the day to day management of an eligible business in Australia.

Subsection (2) then reads that:

The minister must not cancel a business visa under subsection (1) if the minister is satisfied that its holder: (a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and; (b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day to day management of that business and; (c) intends to make such genuine efforts.  The term “eligible business” is defined in subsection (10) of section 134 as: 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.

The Applicant incorporated a company in Australia, namely Australian Diamond Electrical Pty Ltd.  The shareholders and directors of that company are the Applicant and his wife and his brother Yiqian Li and his wife.  Consequently the Applicant then is said to have a substantial ownership interest in that company.  So far some $172,000 has been transferred by the Applicant and I take it his brother, into the accounts of that company.  In China the Applicant and his brother were engaged in manufacturing electric fans.  Initial attempts to import electrical fans into Australia were not successful, so the business strategy of the company was changed.  The company started exporting electric fans from China into Indonesia and latterly substantial contracts have been obtained to import Chinese electric fans to Egypt and Syria.

I do not regard these activities as establishing an eligible business. All the Australian company is, is a conduit through which funds are transferred, albeit that the profits remained in Australia. The export foreign sale undertaken by the company do not constitute the criteria for an eligible business as defined in subsection (10) of section 134. In Shi v Migration Agents Registration Authority (2007) FCA 59, the Full Court of the Federal Court, by a majority, stated that the review of a cancellation decision can only take into account events up to the date of the cancellation. That is not to say, however, that the tribunal cannot have regard to subsequent events to ascertain what light they may throw upon circumstances at the time of cancellation.

I find that the Applicant’s company had, even before the cancellation of his visa, made business arrangements with a Mr Poon trading as Calvena Wines Pty Ltd to export Australian, namely, Western Australian, wine to China. See documents at pages 239 to 248 of the documents prepared for the Tribunal pursuant to section 37 of the AAT Act.

The document at page 243 is not only a sales agreement but grants to Australian Diamond an exclusive franchise to sell wines sourced from Calvena Wines into China for two years with the possibility of an extension if a nominated volume of sales has been obtained.  This agreement is dated 6 July 2007; that is to say, before the cancellation of the Applicant’s visa.  One shipment of wine has been forwarded to China.  The Applicant gave evidence that two more shipments had been discussed, but put on hold after the cancellation of his visa.  The Respondent points out, correctly, there is no evidence of any intended future sales, and I would add that the Applicant’s case would have been strengthened if Mr Poon had been called.  I have, however, no real reason not to accept the Applicant’s evidence.  I note that the Applicant has apparently sought to register the brand Astor Ridge.

In addition to the wine export business, the Applicant’s company has, at the request of a Melbourne based wholesaler of electrical products, Arlec Australia Ltd, forwarded to Arlec samples of electric fans for testing by that company’s engineers.  Obviously whether Arlec decided to purchase electrical fans from Australian Diamond is still problematical, but the actions by Australian Diamond and the Applicant as its director responsible for sales are, I find, bona fide attempts to obtain business.

So far as the wine export business is concerned, I have a reasonable belief that that business will result in the export of Australian goods, namely, West Australian wine, and hence the business qualifies as an eligible business as that term is defined in subsection (10) of section 134 of the MA. I am not satisfied that the Applicant is utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia. The Applicant has spent most of his time outside Australia, and although those activities have related to the business, it is its business as an international trading concern that has primarily concerned the Applicant. As was pointed out in Re Tang v Minister for Immigration and Multicultural Affairs (2000) AATA 997 at paragraph 21:

“From its language and from the visa condition, it is apparent that the act is intended to benefit owners who settle here and actively manage the business”.

Likewise, Senior Member Muller in Huang v Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656 said:

“The relevant legislation is contained in the Migration Act 1958. It is directed towards overseas people who wish to use their business skills to establish a significant business in Australia with a view to providing employment opportunities for Australians, export markets for Australian goods and introducing new technology to Australia among other aims. A Business Skills Visa is designed to allow the overseas business person to travel to and from Australia and to live in Australia while conducting the business. It envisages that the holder of such a visa will acquire a significant interest in the Australian company and play a significant role in the day-to-day management of the company. It also envisages that the businessperson will probably wish to have close family members accompany them while they are in Australia.”

Not only must the eligible business operate in Australia to comply with the MA, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.  Likewise again, I said in Re Ong v Minister for Immigration and Multicultural and Indigenous Affairs (2003) AATA 178:

“Reference can be made to the second reading speech of the Minister for Immigration introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Migration Act 1958. It is clear from that speech Hansard, House of Representatives, 7 May 1992 at page 2678, that it was understood that migrants who arrived in Australia on a Business Skills Visa would remain resident in Australia.”

Deputy President Wright, QC, commented in Re Ng v Minister for Immigration and Multicultural and Indigenous Affairs (2003) AATA 299:

“This does not mean that the visa holder is confined to working within the geographical limits of Australia.  Obviously overseas trips may be a vitally important part of fostering and expanding the business.  However, the Act does not contemplate an absentee entrepreneur directing operations from afar.  Direct hands-on involvement within the Commonwealth of Australia is essential.  A Business Skills Visa carries with it the right of permanent residency in Australia during its existence and by departing from Australia and joining family members as secondary Applicants, they too can obtain this privilege.  It would be strange indeed if an overseas entrepreneur could secure these advantages by directing business operations from abroad within a day or two of his first arrival and never set foot in this country.”

To my mind, similar comments apply here. I am satisfied that the Applicant has not made a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of an eligible business in Australia.  Notwithstanding these findings, I do have an overriding discretion whether to cancel the Applicant’s visa.  See Kiefel J, as she then was, in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) FCA 31. In this matter, another delegate of the Respondent has declined to cancel the Business Skills Visa of the Applicant’s brother, see exhibit A5.

No material was put before me by the Respondent as to why this decision was made, although it was made after the decision relating to the Applicant, being made on 21 January 2008.  I was informed from the bar table, without objection, by the Applicant’s Migration Agent who also acted for the brother that the material put before the delegate in the brother’s case was the same as for this Applicant.  Whether the material was the same or not is not material.  On its face, the decision in the brother’s case refers to a genuine effort.  I do not know how that decision was derived at but clearly the activities of the brother were also concerned with Australian Diamond.

In Re Drake v Minister for Immigration and Ethnic Affairs (No. 2) (1978) 82 ALD 634 at 639, occurs the well‑known passage in the decision of Brennan J, as he then was, namely:

“Inconsistency is not merely inelegant.  It brings the process of deciding into disrepute suggesting an arbitrariness which is incompatible with commonly accepted notions of justice.  In matters of deportation which so profoundly affect the interests of the deportee and his family and which are of relevance to the community at large, inconsistency borne of the application of differing standards and values should be reduced as far as it is possible to do so.”

I might say this is the second matter in two weeks where on prima facie the same material, different delegates of the Minister have come to different decisions on applications by siblings engaged in the same enterprise.  See Re Hendra v Minister for Immigration and Citizenship (2008) AATA 150. I would add, however, the facts in Hendra are distinguishable from the material here inasmuch as the periods between decisions were much greater in Hendra and the sister in that case did have other business interests.

In addition to the apparent inconsistency, I am satisfied that the Applicant through his company has taken positive steps to commence a wine exporting business to China.  There is a hiatus in that business which has been brought about by the fact of cancellation but I accept that the business, it is intended, will continue.  Looking at the prices charged, I have real doubts about the quality of the wine but it will no doubt find its niche in the Chinese market.

For these reasons I exercise my discretion not to cancel the Applicant’s Business Skills Visa.  The result of that decision is that the visas of his dependents are also not cancelled.

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