Lioe and Minister for Immigration and Citizenship
[2007] AATA 1296
•3 May 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1296
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2006/1083
GENERAL ADMINISTRATIVE DIVISION ) Re SUSILAWATI LIOE Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date3 May 2007
PlaceSydney
Decision The decision under review is affirmed. .............[sgd]............... Ms N Isenberg
Senior Member
CATCHWORDS
IMMIGRATION – cancellation of business visa - whether applicant has substantial ownership interest in an eligible business - whether applicant actively participated at a senior level in the day-to-day management of a business - decision under review affirmed
LEGISLATION
Migration Act 1958
CASE LAW
Drake and Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Dainty and Minister for Immigration and Ethic Affairs (1987) ALD 416
Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82
Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342
Re Griffiths and Migration Authority [2001] AATA 240
Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Hope v Bathurst City Council (1980) 144 CLR 1
Gut Hiong Lim and Minister for Immigration and Multicultural Affairs [2007] AATA 1036
Teo and Minister for Immigration and Citizenship [2007] AATA 1118
Sia and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 521
Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Lau v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Re Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579
Darmawan and Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Re Wang and Minister of Immigration and Multicultural Affairs [2000] AATA 961
REASONS FOR DECISION
3 May 2007 Ms N Isenberg, Senior Member
DECISION UNDER REVIEW
1. The decision under review before the Administrative Appeals Tribunals (‘the Tribunal’) was the decision of the Respondent, the Minister for Immigration and Citizenship (‘The Minister’) dated 3 July 2006 to cancel the Applicant’s visa.
BACKGROUND
2. Ms Lioe is from Indonesia where she owns an embroidery company in Bandung. Friends told her of the possibility of doing business in Australia. Ms Lioe applied for a subclass 127 Business Visa (‘visa’) on 24 May 2002 with a view to establishing an embroidery store in Sydney. In anticipation she undertook some research into the embroidery business in Australia.
3. On 24 March 2003, Ms Lioe was granted a visa and she entered Australia on 18 June 2003. Her children are secondary visa holders.
4. On 31 January 2005 a 24 month survey Form 1010 was sent to Ms Lioe from the Department of Immigration and Citizenship (‘the Department’) but she did not respond. On 27 February 2006, a notice of intention to cancel her visa was sent to Ms Lioe but was returned unclaimed.
5. On 3 July 2006, Ms Lioe’s visa was cancelled under subsection 134(1) of the Migration Act 1958 (‘the Act’).
ISSUE BEFORE THE TRIBUNAL
6. Section 134 of the Act provides that the Minister has a discretion to cancel a business visa if certain criteria are not met.
7. The issues to be determined by the Tribunal are as follows:
a) Had Ms Lioe obtained a substantial ownership interest in an eligible business in Australia?
b) Was Ms Lioe utilising her skills in actively participating at a senior level in the day-to-day management of the business as at the date of cancellation?
c) Does Ms Lioe intend to continue to hold a substantial ownership interest in, and utilise her skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia?
d) Had Ms Lioe made a genuine effort to obtain a substantial ownership interest in an eligible business and to utilise her skills in actively participating at a senior level in the day-to-day management of that business?
e) Will the cancellation of visa result in extreme hardship to any of the secondary visa holders?
LEGISLATION
8. The power to cancel a business visa is set out in section 134(1) of the Act, which relevantly provides:
(i)…the Minister may cancel a business visa…by written notice given to its holder, if the Minister is satisfied that its holder:
a)has not obtained a substantial ownership interest in an eligible business in Australia; or
b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
c)does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii) utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
9. The term “ownership interest” is defined in section 134(10) as follows:
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts
10. The term “eligible business” is defined in section 134(10) as follows:
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.
11. Under section134(2) of the Act, the Minister is not to cancel a business visa if the Minister 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.
12. Under section 134(3) of the Act, the matters which may be taken into account by the Minister when determining whether the visa holder has made a “genuine effort” include the following:
(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).
13. In addition the Department has issued Guidelines in respect of the cancellation of visas: Migration Series Instruction 133, “Visa cancellation under subdivision G – cancellation of business visas” dated 30 May 1996 (‘MSI 133’).
14. Whilst I am not bound to apply policy guidelines (see Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577) I may do so and, indeed, the Tribunal will usually apply guidelines unless there are cogent reasons in a particular case for not doing so: see Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639-645; Re Dainty and Minister for Immigration and Ethic Affairs (1987) 12 ALD 416 at 267; and Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82 at 86.
15. MSI 133 suggests that the following evidence be obtained in relation to each of the subsections in section 134(3):
a.business proposal which is considered genuine, realistic and achievable;
b.formal contract with partners or joint venturers;
c.written evidence of detailed consultations with at least three business advisers (accountant, lawyer, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);
d.physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;
e.transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
f.minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant.
g.minimum A$100,000 business activity as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment, e.g., purchase of shares.
h.failure to comply with a notice for information under s 137, ie mandatory monitoring of Australian address and return of survey forms.
While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled. The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis. For example, while the factors listed…above may be indicative of "genuine effort", lack of them will not necessarily be decisive. The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made "genuine effort". A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.
CONSIDERATION OF THE EVIDENCE
16. In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.
17. Ms Lioe gave evidence with the assistance of an interpreter and her statement of 3 January 2001 was tendered.
18. In conducting a review of the cancellation decision, I am to determine if section 134(1) of the Act applied to Ms Lioe at the date of cancellation of her visa (Freeman and The Secretary, Department of Social Security (1988) 19 FCR 342; Re Griffiths and Migration Authority [2001] AATA 240; Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54 at par 37 (‘Re Wong’)).
Had Ms Lioe obtained a substantial ownership interest in a business in Australia?
19. Ms Lioe is the sole shareholder of Oking Pty Limited (‘Oking’), a company incorporated on 14 October 2003.
Is Oking Pty Limited an ‘eligible business’?
20. In late 2004 Ms Lioe met Mr Judha Djohari who ran a company in Maroubra, JM & K Pty Ltd (‘the supplier’), which supplied a curious mix of products: pet foods, computer products and steel. Ms Lioe canvassed potential purchasers of these products in Singapore, including an importer, Mega Indah (‘the buyer’).
21. From early 2005 Oking purchased goods from the supplier - her only supplier - to the value of $130,032.37 which were exported to Singapore as follows:
· February 2005 Pet products $25,333.50
· November 2005 Pet products $23,757.38
· January 2006 Computer parts $22,080.00
· February 2006 Computer parts
Pet products $58,861.49
22. Ms Lioe was asked a number of questions about those orders. In relation to computer parts she appeared to have difficulty naming manufacturers of computer products but knew that the manufacturers were either Japanese or Taiwanese, rather than Australian.
23. In relation to pet products she believed the products to be manufactured in Australia but did not know by whom. She did not know the ingredients of the products.
24. I referred her to a purchase order under cover of letter dated 17 January 2006. The order was for 120 sets of computer parts. Each set of computer parts consisted of “one memory card, one hard disk, one power supply and one DVD Room”. There was also an order for 30 Hewitt Packer Laser printers.
25. She was unable to tell me, for example, what capacity memory card or hard disk she was supposed to supply. She could not tell me what model or capacity Hewlett Packard printer she was supposed to order beyond ‘A4’. She said her children wrote to the supplier (in identical form to the purchase order, according to the papers attached to her statement) and she ‘indicated this and that’.
26. I observe too that in relation to pet products there is no brand or quantity, that is, whether the quantity relates to a small box for domestic purposes or a pallet, but merely stating a number.
27. She was referred to an invoice dated 11 March 2006 between Oking and the Singapore buyer and the associated bill of lading. She did not know if the documents were related. She said if employees [in Indonesia] ask her to sign a document she does so. She saw no anomaly that 130 ’computer parts’ and over a thousand ‘pieces’ of pet products should weigh only 4.325 kilograms. She said she was not involved in the conveyance of the goods as that was all arranged by the supplier. She said she relied on the supplier to send quality products. In any event she was in Indonesia at the time.
28. She denied she was a mere agent for the supplier. She also said that she did not really understand the correspondence as everything was done by her children. She said she handled the finances, but there was no direct evidence of her personally doing so.
29. There was some discussion about the financial statements of Oking which had been prepared by Ms Lioe’s accountant. Nowhere in the documents is there a reference to any wages, although she said two of her children were paid about $1000 - $1500 each per month between 2004 and 2006. She said that ‘culturally’ children assist their parents and that the payments could be described as both wages and pocket money. She did not instruct her accountant to record the payments as wages. She thought a tax return may have been filed by her accountant with the Australian Taxation Office in the week before the hearing. She thought her accountant may have forwarded the accounts to Australian Securities Investment Commission.
30. It was submitted on Ms Lioe’s behalf that Oking is an “eligible business” within the meaning of section 134(10)(c) of the Act in so far as it has led to the export of Australian goods on at least four occasions, thereby amounting to a series of “transactions…entered into on a continuous and repetitive basis for the purpose of making a profit": per Hope v Bathurst City Council (1980) 144 CLR1, per Mason J at 6.
31. The Respondent contended that four transactions only did not suffice: per Re Gut Hiong Lim and Minister for Immigration and Multicultural Affairs [2007] AATA 1036. In that case though, in the three and a half years of the currency of the visa only two exports had been arranged. A further two exports were arranged after the notice of cancellation.
32. I was referred to the recent decision of Teo and Minister for Immigration and Citizenship [2007] AATA 1118 in support of the contention that since its incorporation in 2003 Oking had successfully exported on only four occasions but that these were the fruits of continuous activity, and it was activity rather than results that was important. The facts of Teo, especially in relation to the business activity set out in para 59 and following, were very different from the present case.
33. In Teo, the Applicant’s aim was “to create a business which has credibility both in Australia and in South East Asia … so that the business can use the expertise of Australian Consultants and Experts in Tourism and Environmental related projects to the greater benefit of Australia”. There was evidence of continuous business activity by the Applicant and his Australian based partner. The business plan and concept of the business were not “wishful thinking and fantasy” but were “projects underway or being considered, such as bringing sewage system to a water village of 30,000 inhabitants in Brunei ... with enormous benefits to the inhabitants and with potentially very considerable financial return” to the Applicant.
34. There are some fundamental flaws in the Applicant’s position. Firstly, the computer parts were not ‘Australian goods’ as contended. They were necessarily imported here from Japan or Taiwan (with the inevitable costs associated with that) and then, somewhat bizarrely, exported by Oking to Singapore. In the course of that process not only was Oking supposed to make a profit, but so was its supplier and the buyer in Singapore. It is not for me to speculate why a buyer in Singapore could not negotiate such an arrangement directly with the manufacturer. As to the pet products which form the bulk of the exported goods, Ms Lioe thought they were Australian products but did not know by whom they were manufactured or of what they consisted. No manufacturers’ names were referred to in the orders/invoices.
35. Next, it is difficult to say that the exports were ‘continuous and repetitive’. The evidence was that Ms Lioe would find a prospective buyer overseas, identify their needs, and then source a supplier in Australia. In fact there was one supplier only, a person with whom Ms Lioe had already met, and both her buyers fortuitously wanted precisely what that supplier could supply: the eclectic mix of (unspecified) computer parts and pet supplies. There was no evidence that prospective buyers needs would be met by Oking from other than Australia, or that prospective buyers required the products to be sourced from Australia.
36. The papers attached to Ms Lioe’s statement included a brochure for computer parts and pet products. She said the brochures had been prepared by her supplier and emailed or faxed to her in Indonesia. She was supposed to show them to customers to describe the use of the products. She thought that customers for the pet products might need the information. The pet brochure supplies information in relation to two products only while listing others by name.
37. Further, it was submitted that the business was “in Australia”, in so far as Oking is incorporated in Australia, and the purchasing of goods for export has been conducted in Australia and paid for in Australia.
38. While Oking is an Australian company, Ms Lioe’s evidence was that the ordering from the supplier was done, not by her, but by her children. On at least one occasion she was not in Australia when the order was placed with the supplier.
39. I was referred to Sia and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 521 (‘Sia’) at [61]. In that matter there was supporting evidence before the Tribunal that all purchasing of goods for export was conducted in Australia, paid for in Australia, the profits were banked in Australia and taxation paid in Australia. Negotiations for these exports were conducted by telephone by the applicant, from Malaysia. In the present matter though the ordering was done by Ms Lioe’s children in Australia. While there are invoices from the supplier to Oking and from Oking to the buyer there are no bank statements supporting the transactions. It is unclear if tax has been paid. Ms Lioe was not really sure if a tax return had been filed. In Sia there was a considerable amount of financial evidence.
40. I also have some reservations that the transactions were with a view to making a profit. In the 2005/2006 financial year, in which three of the transactions took place, on Ms Lioe’s evidence she would have paid her children at least $25,000 by way of wages/pocket money. This would have resulted in a loss, rather than a profit, of about $13,000. In the 2004/2005 year, the loss would have been about $20,000.
41. In Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656 (‘Re Huang’) the Tribunal described the requirements for an eligible business in the following terms:
One of the most significant factors to be taken into account in determining whether or not an activity amounts to carrying on a business is whether or not there is an intention to make a profit. If an activity has not and is not likely to result in a reasonable return for energy and money expended, then it is more likely than not that the person so engaging in the activity does so for motives other than the carrying on of a business.
42. Ms Lioe’s evidence was that she spent 35 hours per week working on the business. A loss of $20,000 and then $13,000 on turnovers of $25,000 and $105,000 respectively for that activity was not, in my view, a reasonable return for energy and money expended. I therefore question if Ms Lioe was engaging in business ‘for motives other than the carrying on of a business’.
43. At the time of her visa application, Ms Lioe’s English was described as ‘limited’ when assessed by the Australian embassy. She said she had a private tutor in Indonesia but found it very difficult to learn English. She said she appreciated it would be difficult doing business in Australia with such limited English. In this regard I note she required the services of an interpreter for her entire evidence.
44. I do not consider that the business will necessarily result in any of the factors referred to in section 134(10) of the Act.
Was Ms Lioe utilising her skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia?
45. As to whether a visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia I also considered Re Huang where the Tribunal said:
Not only must the eligible business operate in Australia to comply with the Act, 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. (My emphasis)
46. I accept that the very nature of an export business requires a significant part of the business, especially marketing, to take place overseas. The requirement to be overseas is inherent in the nature of such a business. There is no bar in the legislation to a visa holder being overseas as long as they are managing the business in Australia. In Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997 Deputy President McMahon stated:
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. [paragraph 21]
47. It was submitted on Ms Lioe’s behalf that she was the only person directly involved in the day-to-day management of Oking. This is not the case. The evidence was that her children place the orders with the supplier.
48. She was asked about the 35 hours per week she said she spent on Oking between November 2005 and August 2006. She said she had to meet with customers to discuss business. This included going out for meals with prospective buyers. She conceded that she knew little about the products and so her discussions were to ask what the buyer wanted and then she would approach suppliers. She conceded that she had one supplier only although she said she was looking for others. At the hearing, for the first time, she mentioned that she was looking for a supplier of wheat and flour. She said she had a sample and had showed it to someone in Indonesia. She did not understand what was in the sample.
49. I was referred to Lau and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703, in relation to day–to-day management of a company: that it would ‘involve researching products, securing orders and suppliers, transacting shipping. It will also involve ideas and planning’. After she abandoned the embroidery idea which she had apparently researched, there was no evidence that Ms Lioe went about developing her business in any strategic fashion. There was no evidence of having researched the overseas market for pet products sourced from Australia or Japanese and Taiwanese computer parts sourced from Australia. Ms Lioe knew next to nothing about her products; she had little success securing orders notwithstanding wining and dining prospective buyers; she had only one supplier; and she did not undertake the shipping.
50. Further I have difficulty accepting that, in the absence of placing the orders she spends 35 hours per week generating business.
51. Ms Lioe gave no evidence of an interest to settle in Australia, although she and her family have investment properties here. Given her manner of generating business for computer parts and pet products, after setting up her supplier there was probably no need for her to even come to Australia again.
52. I do not think she is actively participating at a senior level in the day-to-day management of the business.
Did Ms Lioe make a “genuine effort” to obtain a substantial ownership interest in an eligible business and to utilise her skills in actively participating at a senior level in the day-to-day management of that business?
53. Dealing in turn with each of the matters set out in section 134(3):
a) Business Proposals Developed
Ms Lioe had a very elaborate business plan: some eight pages of sophisticated proposals. She told me that in mid 2002, before lodging her visa application she had handwritten a plan ‘roughly and globally’ of some two to three pages and given it to a business colleague in Indonesia to translate after she got her visa. She said that the plan she wrote included a proposal for an embroidery business. The plan in fact contains no reference to an embroidery business. When the translated business plan was returned to her in mid to late December 2004 she did not check it or have it read over to her.
The plan in fact refers to Oking being an importer and distributor of pet products and computer equipment to Australian markets. She said this was an error by the translator. I do not accept this contention as there are multiple references to this type of role which are non-sensical if ‘exporter’ was to be substituted for ‘importer’ as Ms Lioe suggested. She agreed that the company’s mission and vision were completely wrong. She said that one of the company’s goals – ‘to become a leading supplier of imported goods to Australia’ - related to the future.
She said the plan had been subject to amendment since 2004. She said that after meeting her buyer in Singapore the plan was changed to record pet products and computer parts as the company’s products instead of embroidery.
She said the purpose of the plan was in case she had any trouble with her visa.
(b) Partners or joint venturers
There were no relevant partners or joint venturers.
(c) Research undertaken
MSI 133 refers to the need for evidence of detailed consultations with at least three business advisors such as accountants, lawyers, financial institutions, state or territory government agencies, Austrade or business trade associations. While this goes beyond the requirements of the legislation, there was evidence that Ms Lioe had made some inquiries (and on her behalf) in relation to opening a business.
Ms Lioe had decided in mid 2002 to open an embroidery shop in Sydney, as she owned such a business in Indonesia. That business was slowing down because of competition from China. She wrote in her statement that she had investigated a business in Brisbane. She said she had also visited an embroidery store on Broadway, while ‘meandering around’ and they had at her request handed over information on the cost of wages, rental etc. She could not recall the name of the shop.
She wrote that she planned to lease a shop at a ‘shopping mall’ located at 190-192 Elizabeth Street, Sydney which she had visited. She could not recall the name of the mall where there were ‘many small shops about to be leased out’. From the White Pages I was unable to locate any ‘mall’ at that address.
She said she had her accountant contact the Department of Fair Trading about getting information registering a trading name and other information about establishing a business in New South Wales. They sent her some forms and brochures, which she no longer holds. She said she went to the Department of Fair Trading’s premises but could not recall where that was.
In her statement she said she also contacted the Department of Employment, Workplace Relations and Small Business about wages and details about her obligations as an employer. She no longer has the information sheets/brochures they sent her. In her evidence she said one of her children had contacted the ‘Department of Workforce’.
She said she had researched Australia’s international agreements with other countries, and also Occupational Health and Safety but no longer holds the researched information.
She said she prepared a chart so as to have a competitive comparison of the business across different locations. However, I had some difficulty that an experienced businesswoman like Ms Lioe would seriously have contemplated that, if her business in Indonesia was having difficulty competing with Chinese embroidered goods, she would be able to compete in the same industry using Australian labour.
(d) Physical presence in Australia
MSI 133 refers to a visa holder being physically in Australia for more than six months since the first arrival. Ms Lioe’s 109 days in Australia is less than this. Given her somewhat unusual approach of first locating a buyer before identifying a supplier, it is not surprising that she would require significant time overseas.
(e)/(f) Value of assets transferred and value of ownership interest
MSI 133 refers to the transfer to and retention in Australia of at least 50% of the funds indicated as available for transfer within two years when the person applied for a business visa. In her application for a visa Ms Lioe stated that she would transfer $500,000 to Australia. It was unclear how much had been transferred, if any, up until the date of cancellation of the visa. At absolute best, on the available evidence, this could only be about $110,000, the total purchases by Oking. Her evidence was that if the business develops she would ‘not object’ to transferring $500,000.
MSI also refers to the acquisition of an ownership interest of a minimum $100,000. On the most generous interpretation the company has made a trading profit of about $18,000 since incorporation in 2003.
(g) Business activity undertaken
MSI 133 refers to business activity of a minimum of $100,000 as indicated by turnover. The turnover of Oking has been about $130,000, in the three years since its incorporation.
(h) Compliance with notices under section 137
Ms Lioe failed to complete the 24-month survey. She had changed addresses without formally notifying the Department. In her statement of 23 August 2006 she said that she had thought that she had a reliable means of retrieving mail sent to her old address, but did not specify what that was. In her evidence she said she thought one of her children may have told the Department of her change of address.
54. On the basis of the above evidence I find that at the time of the delegate's decision, Ms Lioe had not made genuine efforts to obtain a substantial ownership in an eligible business and to utilise her skills in actively participating at a senior level in the day-to-day management of an eligible business. There is therefore no bar to cancelling Ms Lioe’s visa by reason of subsection 134(2).
The residual discretion
55. In Kim and Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, Kiefel J found that the power to cancel a visa under subsection 134(1) is a discretionary power. He found that failure by the Tribunal to consider whether or not to exercise the residual discretion after determining that the applicant satisfies the criteria in subsection 134(1) amounted to jurisdictional error. He stated that:
Whilst the discretion given in section 134(1) is not as broad as that considered in Samad, in the sense that it does not involve more choices, it cannot be said that a decision not to cancel a visa could serve no purpose. 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. [paragraph 21]
56. In ReNagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579, Member Webb stated that:
Following Kim there is discretion not to exercise the power to cancel a business visa even in the event that the criteria set out in paragraphs 134(1)(a) to (c) are not satisfied. [paragraph 17]
57. In that case, Member Webb, when considering whether to exercise the residual discretion, considered whether the applicant would be likely in the future to satisfy the criteria in subsection 134(1).
58. The Respondent contended that the residual discretion also entails consideration of the purpose underlying the legislative scheme which governs the grant of the visa. Business Skills visas are available to persons who intend to immigrate to Australia for the purposes of establishing, or participating in, an eligible business. It runs counter to the legislative scheme to grant Business Skills visas to persons who do not intend to actively manage their businesses and conduct their business activities in Australia.
59. The Respondent contended, and I accept that Ms Lioe has not demonstrated a genuine and realistic commitment to fulfil her obligations. It is contrary to the legislative scheme governing business skills visas to allow Ms Lioe to retain her visa.
Secondary visas of Ms Lioe’s children
60. No separate submission was made in relation to Ms Lioe’s children who are secondary visa holders to their mother’s visa. I am unaware of any application for review by any of the children. Evidence was led that Anthony and Caroline are presently studying in China. Ms Lioe’s youngest son, Arnold, is presently undertaking first year of a three year course in Business at University of Technology Sydney. There was, however, no evidence as to “extreme hardship” any of them would suffer following the cancellation of Ms Lioe’s visa: per Kim and Darmawan and Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481 and Re Wang and MIMIA [2000] AATA 961.
61. The Second Reading Speech makes it clear as to the consequences for secondary visa holders when a Business Skills Visa is cancelled:
Each business migrant acknowledges at the time of application that he or she understands business objectives of the category and the expectation that they will make genuine efforts to comply with them. Additionally, each business migrant acknowledges that they and their family members’ entry permits may be cancelled if they do not meet the objectives of the program or make genuine efforts to do so.
DECISION
62. The decision under review is affirmed.
I certify that the 62 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
Signed: ...[sgd]...............Mwela..Kapapa............
AssociateDate of Hearing 3 April 2007
Date of Decision 3 May 2007
Counsel for the Applicant Mr Nicholas PoynderSolicitor/s for the Respondent Ms Zoe McDonald, Mr Anthony Cox
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