Liu and Anor and Minister for Immigration and Multicultural and I Ndigenous Affairs

[2003] AATA 345

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 345

ADMINISTRATIVE APPEALS TRIBUNAL        Nº N2002/392; N2002/401

GENERAL ADMINISTRATIVE DIVISION

Re:         Man Keung LIU; Kwai Fa SO.

Applicants

And: Minister for Immigration and Multicultural and Indigenous Affairs

Respondent

DECISION

Tribunal:       P.J. Lindsay, Senior Member

Date:             31 March 2003

Place:            Sydney

Decision:The Tribunal affirms the decisions under review.

. . . . . . . . .. . . . . . . . . . . . . . . .

Senior Member

©        Commonwealth of Australia          (2003)

CATCHWORDS MIGRATION – business skills visa – cancellation – cancellation of secondary visas – whether substantial ownership in an eligible business ‑ whether utilising skills in actively participating at a senior level in the day‑to‑day management of business ‑ whether intention to continue to hold a substantial ownership and to utilise skills – whether genuine effort made – discretion not to cancel -  decisions under review affirmed.

Migration Act 1958, ss.134, 135, 136.

Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54

Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs (2002)36 AAR 42

REASONS FOR DECISION

P.J. Lindsay, Senior Member

1. In matter N2002/392 Mr Man Keung LIU has applied for review of a decision dated 21 February 2002 made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) to cancel his business skills visa pursuant to s.134(1) of the Migration Act 1958 (the Act).  In matter N2002/401 Ms Kwai Fa SO has applied for review of the decision to cancel her secondary business visa, consequent upon the cancellation of the Mr Liu’s visa.

2. At the hearing Mr Liu and Ms So were represented by Mr T. Chao, of Dr Shums Migration Consultancy. Ms S. Goodman, solicitor, appeared for the respondent. Evidence was given at the hearing by Mr Liu and Ms So, with the assistance of a Cantonese interpreter. The Tribunal had before it the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T documents) and the exhibits that were tendered during the hearing.

background

3.      On 2 June 1998 Mr Liu was granted a Business Skills (Migrant) visa subclass 127.  On the same date, Ms So, who is Mr Liu’s wife, and their children Wing Chee Liu and Wing Sum Liu, were granted secondary visas. 

4.      Mr Liu was born in Hong Kong and is aged 49.   Ms So is 42 and their children are 14 and 12 respectively.  Mr Liu, Ms So and their family came to live in Australia from Hong Kong.  Mr Liu’s mother and his six siblings live in Hong Kong.  Ms So’s parents and siblings also live in Hong Kong.

5.      Mr Liu failed to respond to the delegate’s request of 8 August 2001 that he complete a 24 month survey regarding his business activities in Australia.  On 18 October 2001 the Department of Immigration and Multicultural and Indigenous Affairs (the Department) wrote to Mr Liu to advise him of the delegate’s intention to cancel his Business Skills visa (T11).   The delegate cancelled Mr Liu’s Business Skills visa on 21 February 2002 (T2). Consequently, on the same date, Ms So was informed that the secondary visas granted to her and the two children had been automatically cancelled.

6.      Mr Liu has applied to the Tribunal for a review of the delegate’s decision to exercise the discretion to cancel his visa.  Ms So seeks review of the decision to cancel the secondary visas.

evidence

7.      Mr Liu completed his secondary schooling in Hong Kong.  He then commenced working for a shipping company. He later worked for a firm of stockbrokers and then for a general import-export trading company that sold frozen seafood, meat and toys.  When he was about 28, Mr Liu set up his own import-export trading business, the European Asian Company, in Hong Kong.  It sold imported seafood to Taiwan. The business imported timber-flooring products from China and Taiwan, which it sold locally. He no longer has a business in Hong Kong.

8.      Mr Liu and his family first entered Australia on their business visas in November 1998.  Over time he has brought about $100,000 from Hong Kong to Australia for his day to day expenses.  Although he said some of that money has been invested in his businesses, he was unable to provide a precise figure. 

9.      It is noted in his statement of facts and contentions that, around May 1999, he began to look into potential business opportunities in Australia.  He decided that he would import timber products from China for sale to consumers.   He travelled to China on about five occasions to meet possible suppliers. The trips were usually for about a month, but once he was away for five months.  He said that he visited a factory that produced timber-flooring. There were meetings in Australia with a number of firms in the timber-flooring market.  Through his business, Kingarms International Company, he has imported three shipments of timber-flooring from China between January 2000 and January 2001. The business name Kingarms International Company was registered on 11 August 1999 disclosing Mr Liu as the proprietor. In August 2001, he imported timber-flooring from the same source through his business The Sun International Company, a business name that he registered on 7 May 2001 (T14 p56).  Mr Liu’s evidence was that, although he rents business premises, he does most of his work from an office at home.  He told the Tribunal that he has a fax machine, filing cabinet, and other furniture and office equipment both in his rented office and at home.

10.     Mr Liu said that the Kingarms International Company ceased its business in April 2001.  Its only business had been the sale and installation of timber-flooring.  A trading statement and balance sheet for the business ‘Man Keung Liu trading as Kingarms International Company’ were prepared by Stephen Poon & Co, chartered accountants, for the year ended 30 June 2001 (Exhibit A4).  They disclose sales in the period of $82,685.40 and a net profit of $28,509.47.  After allowing for a loss of $8,378.48 in the previous year, the business had a proprietorship of $20,130.99 and no debts. Inventory represented $18,000 of the net assets. During the 2000-01 financial year, the business imported a single shipment of timber product from China at a cost of $62,424.  The financial statements were not audited.  The accountants’ Compilation Report noted that the proprietor was solely responsible for the information contained in the statements.

11.     On the same basis, the accountants prepared a trading statement and balance sheet for the business ‘Man Keung Liu trading as The Sun International Company’ for the year ended 30 June 2002 (Exhibit A5).  Sales for the year were $57,818.55 and there was a net profit of $11,998.56.  There were net assets at balance date of $5,558.29.   During the year, at a cost of $17,640, the business imported a shipment of timber product from China.  Mr Liu said The Sun International Company is still trading.  Although The Sun International Company rents office premises, Mr Liu said he does most of his work for the business from his home office.

12.     Mr Liu explained that his business arranges for contractors to install and polish the timber-flooring for customers.  He said a typical installation will take about ten days, occupying three subcontractors full-time.  He will visit sites and supervise the installation, and at times has carried out the installation himself.  During 2001 his main activities, however, were to contact his timber suppliers and inspect their product, and deal with his customers.  This work occupied him for 8 to 9 hours a day. Mr Liu said that his range of timber, level of service and pricing allowed him to be more competitive than other timber-flooring suppliers.  When asked how he could demonstrate the competitiveness of his product to the Tribunal, Mr Liu was able only to say that his customers are satisfied with his price, product and service.

13.     In November 2000 he made enquiries of Austrade (T14) seeking a list of suppliers of oranges.  There was a similar enquiry in June 2001 concerning suppliers of frozen fish (T14).  During the following twelve months Mr Liu followed up these contacts and sought price details from suppliers of citrus and frozen squid (T14).

14.     Mr Liu formed a company, Royking Pty Ltd in March 2002.  He did so on advice from accountants so as to obtain the advantage of trading through a limited liability entity.  That company also imported timber product from China, albeit subsequent to the cancellation of Mr Liu’s business visa.  Apart from a number of samples of seafood sent overseas from June to October 2001 by The Sun International Company, Mr Liu’s contracts for the sale of fruit and seafood to overseas buyers have been made in the name of Royking Pty Ltd. 

15.     During the hearing the Tribunal asked Mr Liu to provide copies of his business activity statements filed with the Australian Taxation Office (ATO) in respect of his businesses.  He said he would ask his accountant for the information.  Subsequently, on 11 November 2002 Stephen Poon & Co wrote to the Tribunal.  They noted that Mr Liu had prepared his income tax return for the 2001 year and his business activity statements, and added that his records are currently incomplete.  By letter dated 15 January 2003 the accountants informed the Tribunal that by mistake, Mr Liu had cancelled his GST registration in April 2001.  He thought he needed a different GST registration for his new business The Sun International Company.  They further stated that the ATO had been asked to re-instate his registration.  On 26 February 2003 the Tribunal received copies of Mr Liu’s amended income tax return for the year of income ended 30 June 2001 and his business activity statements from July 2001 to June 2002.   Previously Mr Liu had received a ‘non-taxable advice’ for the year ended 30 June 2001. He had mistakenly believed that the income of the business Kingarms International Company should be returned in a company tax return, a matter that was clarified for him by the ATO in their letter dated 20 November 2000.  His amended income tax return disclosed $20,365 as assessable income from his business Kingarms International Company, with his only other income being $50 of interest.  The accountants provided a copy of Mr Liu’s assessment for the year ended 30 June 2002, which disclosed a taxable income of $11,998.  The Tribunal accepts that the information about sales volume in the business activity statements is consistent with the information in the financial statements for Mr Liu’s two businesses (Exhibits A4 and A5). 

16.     In cross-examination Mr Liu said that, up to the time of the cancellation of his visa, he had imported timber with a value of about $200,000.  He told the Tribunal that his only source of income is from sales of timber-flooring, fruit and seafood.  He said that despite his continuous efforts, he has found it difficult starting a business in Australia.

17.     Mr Liu told the Tribunal that he intends to produce ready-to-install timber parquetry in Australia.  He said his product will compete with a similar parquetry that is currently imported into Australia from Sweden and Germany.  Mr Liu plans to source some of his timber in China and some from Australia, but the production of the parquetry will take place here.  In around June 2002 he began talks with his contacts in China and with Australian floor covering companies.  He hopes to be able to start production within months.  In answer to questions from Ms Goodman, he said that he does not have a written business plan for his timber-flooring business or for his seafood and fruit export businesses.  He has had only general discussions with his bank and accountant regarding his businesses.

18.     In relation to his children, Mr Liu said that they had adapted well to the way of life in Australia.  They have been performing well at school during their three years here and have made some good friends.  At the date of the hearing Betty (Wing Sum Liu) was in Year 6 and Katherine (Wing Chee Liu) in year 8.  If they had to return to school in Hong Kong he said they would find it very difficult.  Previously Cantonese was spoken at school but now lessons are mainly in Mandarin, a language with which they are not familiar.  Mr Liu speaks to his daughters in Cantonese.  Mr Liu said his children have visited Hong Kong twice over the last three years. They stayed with an aunt on each occasion.  The Tribunal received in evidence statements by each child (Exhibits A1 and A2) which referred to their preference for the educational methods and priorities of their Australian schools, the difficulty they would have in understanding lessons in Mandarin, and their enjoyment of the Australian environment and customs.

19.     Ms So gave evidence and informed the Tribunal that she works full-time as a cashier in a supermarket.  The Tribunal found it difficult to accept her evidence that her husband’s income is the main source of funds for the family’s expenses.  The family pays rent of $450 a week for their home and, with two girls at high school, there are sizeable living expenses to be met. 

20.     Ms So said that the climate and air quality in Hong Kong affects her health, in particular her lungs.  Prior to migrating to Australia, she said the Department arranged for an X-ray of her lungs.  Ms So said she then found out she had problems with her lungs.  On 22 June 2000 the Department wrote to remind her of her follow-up appointment regarding tuberculosis and apparently that test was clear.   As for her children, she said that they are happy in Australia.  The education system in Hong Kong is very different to Australia’s.  They are performing very well at school and she referred to a number of reports and certificates from their schools attesting to their superior results (Exhibit A3).  She is worried they will not cope with the level of oral and written expression in Cantonese and Mandarin that is expected in Hong Kong schools.  In relation to social and family contacts in Hong Kong, Ms So discussed a two month visit that she and the girls made in 2000.  They stayed with one of her sisters.  Ms So has a number of nieces and nephews in Hong Kong, a couple of whom are of similar age to her own children.

legislation

21. Section 134(1) of the Act confers a discretionary power upon the respondent to cancel a business visa if satisfied of certain matters; it reads:

(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked 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 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.

Section 134(2) sets out the circumstances in which the respondent is not to exercise the power to cancel given by s.134(1):

(2) 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 continue to make such genuine efforts.

The following is a non-exhaustive list of the matters that the Minister may take into account regarding that ‘genuine effort’:

(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:

(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).

22. A consequence of cancelling a person’s business visa is the cancellation of certain business visas held by members of the person’s family unit pursuant to s.134(4):

(4) Subject to subsection (5) and to section 135 if:

(a) the Minister cancels a person's business visa under subsection (1) or (3A); and

(b) a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

(c) the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person's business permit or business visa by giving written notice to that person.

However, s.134(5) provides that consequential cancellation is not automatic if the family member would suffer extreme hardship:

(5) The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

23.     The power to cancel a business visa may be exercised only within a three year period prescribed by s.134(9):

(9) The Minister must not cancel a business visa under subsection (1), (3A) or (4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:

(a) if its holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or

(b) if its holder was not in Australia when he or she was first granted a business visa—on the day on which its holder first entered Australia after that first visa was granted.

24. Section 134(1) is expressly subject to s.135, which provides relevantly:

(1) Before cancelling a visa under section 134(1), (3A) or (4), the Minister must give its holder a written notice:

(a) stating that the Minister proposes to cancel the visa; and

(b) inviting its holder to make representations to the Minister concerning the proposed cancellation within:

(i) if the notice is given in Australia—28 days after the notice is given; or

(ii) if the notice is given outside Australia—70 days after the notice is given.

25. Section 136 gives the Tribunal jurisdiction to review the respondent’s decisions under ss.134(1) or 134(4) and reads:

Application may be made to the Administrative Appeals Tribunal for review of a decision of the Minister under subsection 134(1), (3A) or (4).

26.     The following definitions in s.134(10) are relevant:

(10) In this section: 

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.

consideration and findings

27.     Mr Liu’s statement of facts and arguments referred to his extensive research undertaken from May 1999 and subsequent decision to import timber products from China.  A number of invoices that were issued by Kingarms International Company were accepted in evidence (Exhibit A6).  They covered the period from March 2000 to October 2001 and the amounts ranged from $2,400 to $12,784.  Each recorded a cash sale.  It was contended for him that, as a cautious investor, he has tested the market through trial and error.  Initially, his business transactions were low in volume because Mr Liu was tentative. The larger volumes that followed the decision to cancel his business visa ought not be excluded from consideration on review because they were the result of his continuous efforts from the beginning.  In addition, reference was made to the value of sales during the period prior to the cancellation of the visa.  It was emphasised that he had made a genuine effort to establish an eligible business and his action in that regard should be considered, not merely the end results. 

28.     Ms Goodman conceded that Mr Liu has a business in Australia, but she submitted that it is not an eligible business.  She did not dispute that he has spent most of the 18 months prior to cancellation in Australia.  Ms Goodman referred to the decision of Deputy President Handley in Re Wong and MIMA [2002] AATA 54 in support of her submission that the Tribunal should have regard to all relevant evidence as at the date of cancellation in determining whether Mr Liu satisfied the requirements of s.134(1) or was making the genuine efforts to do so within the meaning of s.134(2). The fact that prior to cancellation of the visa, Mr Liu imported only four quantities of timber was said to suggest that he did not have a substantial ownership interest in an eligible business in Australia. Similarly, the fact that his enquiries made of suppliers of fruit and frozen seafood did not lead to any commercial activity suggested he did not own an eligible business. Ms Goodman referred to the definition of ‘eligible business’ in s.134(10) and submitted that Mr Liu did not meet the criteria in any of paragraphs (a), (b), (c) or (f) as claimed. The respondent contended that Mr Liu had not, at the time of the decision to cancel his visa, made genuine efforts to obtain a substantial ownership interest in an eligible business and to utilise his skills in actively participating at a senior level in the day to day management of such a business. Ms Goodman referred to the list of matters in s.134(3) that the respondent may take into account in determining whether a person has made the requisite genuine efforts.

29.     The Department’s Instructions for cancellation of business visas (the Instructions) provide guidance for departmental decision makers.  In relation to ‘eligible business’ the Instructions state as follows:

4.3.2 Eligibility relates, therefore, to the achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.  Decision makers should ensure that the business meets one of the stated objectives of s.134(10) regardless of the scale of the enterprise. 

4.3.3 Legally, the ‘eligible business’ definition may be met by a business whose activities come within the definition although the business may be small.  There is no requirement in law for the activities to be on any particular scale; it is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives. 

Ms Goodman referred also to the material in the Instructions that examines the notion of ‘genuine effort’ contained in s.134(2), and that states at par 4.5.1 that the following factors, among others, may be taken into account:

a.       business proposal which is considered genuine, realistic and achievable; …

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); …

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 $A100,000 business activity as indicated by turnover.  This may include other business activity not considered ‘eligible business’ but cannot include passive investment, eg, purchase of shares;

30.     Noting the respondent’s concession, the Tribunal finds that at the date of cancellation of his visa, Mr Liu conducted a business, which comprised the business known as Kingarms International Company and the business known as The Sun International Company.  His business imported timber products from China, sold the timber and, through sub-contractors, had it laid for local customers.   The Tribunal accepts the submission by the respondent based on Re Wong.   The business activity of Royking Pty Ltd therefore will not be taken into account as it occurred after 21 February 2002, the date of cancellation of the business visa.   It is relevant to note that Mr Liu has referred to a contract dated 27 March 2002 by that company to import timber at a cost of $112,000.  During the hearing Mr Liu said that the importation has had to be put back due to delays on the part of the producer in China. 

31.     Mr Liu’s businesses, which he carried on as a sole proprietor, have been on a small scale.  During the 2001 and 2002 financial years his total turnover through the two businesses amounted to $140,503, resulting in a small profit each year.  At 30 June 2002 his ownership interest in the business, after drawings of $26,571.26, was $5,558.29 at cost (Exhibit A5). The business had $6.29 cash at bank. Mr Liu gave evidence of progressively transferring approximately $100,000 to Australia which he said was for his daily expenses.  There were no banking records in evidence, however, as to the transfer of these sums or the timing of their disbursement.  The Tribunal found this aspect of his evidence not to be convincing.  Despite the scale of his enterprise, it will constitute “an eligible business” as defined in s.134(10) if it satisfies one of the criteria in the definition.

32.     There was little evidence of Mr Liu’s business resulting, at the time of the cancellation or later, in any of the outcomes listed in the definition of ‘eligible business’ in s.134(10).  The Tribunal is unable to be satisfied that the business results or will result in the export of Australian goods or services (s.134(10)(c)).  Mr Liu looked into the viability of exporting seafood and fruit to Taiwan but nothing came of these efforts prior to cancellation of the visa.  The Tribunal is satisfied that, at the time of cancellation, there was not a reasonable prospect that those efforts would result in exports.   Nor is the Tribunal satisfied that the business is resulting in or will result in the development of business links with the international market (s.134(10)(a)).  It was submitted for the applicant that, following preliminary research and visits to China, Mr Liu appointed the Liaoning Silk Import and Export Corporation, Dalian, China as his exclusive supplier of floor-board.  Four importations of timber from China over an 18 month period, however, does not of itself suggest that a business link is being developed with an overseas market. As for employment (s.134(10)(b)) it was submitted that, although Mr Liu’s business does not employ any personnel, the business has indirectly created or maintained employment in Australia.  There was no evidence about Mr Liu’s reliance upon sub-contractors and the financial statements (Exhibits A4 and A5) do not refer to payments to sub-contractors.  The Tribunal does not accept that the business results or will result in the creation or maintenance of employment. Mr Liu gave evidence about his assessing the prospects for manufacturing a form of parquetry flooring in Australia that currently would be imported from Europe. His evidence demonstrated that this venture was still at the feasibility stage.  The Tribunal is not reasonably satisfied that his current business will result in the production of this type of parquetry.  The criterion in s.134(10)(d) is not met. There was no evidence concerning his business’ introduction of new or improved technology into Australia (s.134(10)(e)).  Finally, a business will be an eligible business where it results in or will result in an increase in commercial activity and competitiveness within sectors of the Australian economy (s.134(10)(f)).  Mr Liu’s contention was that his business provided a better service and price than other suppliers of timber-flooring products.  He sought to support his argument by reference to pricing schedules of competitors. But he was unable to demonstrate any pricing advantage because the schedules related to prices for timber whereas his invoices covered supply and installation.  This evidence is not sufficient to satisfy the Tribunal that his business has resulted in an increase in commercial activity, let alone an increase in competitiveness in any sector of the economy.

33. Having found that Mr Liu’s business is not an eligible business, a ground for cancellation under s.134(1) exists. Cancellation must not happen, however, if all three criteria in s.134(2) are satisfied. Each criterion turns on the notion of Mr Liu’s having made a ‘genuine effort’.

34.     Bearing in mind the matters in s.134(3), has Mr Liu made a genuine effort to acquire a substantial ownership interest in an eligible business in Australia or to participate in the day to day management of such a business?  It was submitted for Mr Liu that since arriving in Australia in May 1999 he has been researching business opportunities. He decided upon importing wooden flooring products from China for the retail market.  His reasons were that there is strong demand from Australian consumers for wooden building materials and China is a source of cheap timber products. Mr Liu’s evidence was that he then travelled to China to find a reliable and competitive supplier. He referred also to his enquiries about exporting household goods, health products, fruit and seafood to Taiwan and Hong Kong.  There was no evidence regarding the export of household goods or health products.  As to his exporting seafood or fruit, the material consisted of enquiries of Austrade seeking names of suppliers and requests for prices from a number of suppliers.  None of the enquiries led to Mr Liu’s entering into transactions during the period up to cancellation.  The Tribunal finds that the applicant’s research into conducting an export business was minimal and its quality was superficial.  There was no evidence of developing alternative business proposals.  Indeed Mr Liu did not have a business plan for his timber-flooring business, other than an intention to continue with his importations.  His evidence about his visits to Melbourne and Brisbane to discuss timber-flooring with trade suppliers was vague and did not satisfy the Tribunal that he was trying to expand his business.  There was no evidence of discussions or advice from bankers, lawyers, accountants or business associations in relation to proposals he has developed for a business in Australia.. 

35.     In his favour, Mr Liu has spent a considerable period of time in Australia since the grant of his visa.  As for the capital brought to Australia, Mr Liu said he transferred about $100,000 to Australia, but there were no banking records in evidence in this regard.  His evidence was that he used the funds for day to day expenses and to invest in the business, but he could not say how much of it was invested.  This was typical of much of his evidence which the Tribunal found to be vague and quite lacking the detail expected from an applicant seeking to demonstrate that his efforts in starting an eligible business have been genuine. As to the value of his business, it appears from the financial statements in evidence that Mr Liu’s business has turned over more than $140,000 over two years.  His ownership interest at 30 June 2002 was approximately $5,500, represented by timber stock at cost.  His business activity provided him with a very small return of about $26,500 for the financial year to 30 June 2002.  Without Ms So’s wage, it is apparent the family would not be able to make ends meet without recourse to external financial assistance, yet the Tribunal notes her evidence that it was Mr Liu’s income that was the main support for the family.  Taking this material into account, the Tribunal is satisfied that Mr Liu has not made a genuine effort to obtain a substantial ownership interest in an eligible business or to utilise his skills in managing an eligible business. 

36. Where a business visa is cancelled, the business visas held by members of the person’s family unit will automatically be cancelled, except in certain circumstances: s.134(4). A secondary visa is not to be cancelled if cancellation would result in extreme hardship to the holder: s.134(5). In relation to the extreme hardship their daughters would suffer if their visas would cancel, the evidence of Mr Liu and Ms So dealt mainly with difficulties that would be encountered on resuming education in the Hong Kong school system. Apart from worries about the syllabus, their daughters have little if any knowledge of Mandarin, which is predominantly used during lessons. Statements from each girl recorded their enthusiasm for their life in Australia and concerns about their returning to school in Hong Kong and also anticipated problems in making new friendships. The Tribunal notes that, from the evidence of their parents, the girls enjoy support from quite a large extended family in Hong Kong. The girls have visited Hong Kong twice since visiting Australia and stayed there for two months on one trip. The Tribunal accepts that the girls will find it hard to leave behind friends made in Australia. There will be a period of adjustment required on resuming their education in Hong Kong. Still, as Deputy President Purvis observed in Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs (2002) 36 AAR 42:

… this hardship is one within the contemplation of the legislature when it chose to insert the word “extreme” as to qualify the hardship. And it must be “extreme” to the particular individual.

The Tribunal finds that the hardship they will experience does not qualify as “extreme”, within the meaning given to that word by Deputy President Purvis in Re Salim as

… exceptional, unexpected or of such a nature as to qualify for the description of exceedingly great in degree. (at 52)

37.     Ms So gave evidence about her physical examination in Australia relating to tuberculosis. An X-ray of her lungs taken while in Australia did not detect any problem. There was no medical evidence, however, suggesting that a return to Hong Kong would be deleterious to her health or that the climate in Hong Kong caused her any health problems. The Tribunal accepts the respondent’s submission that the secondary visa holders will not suffer extreme hardship if their visas are cancelled.

38.     Taking into account the evidence and the submissions, for the reasons given above, the Tribunal is satisfied that it was appropriate for the power to cancel the business visas to have been exercised.  Accordingly, the decisions under review are affirmed.

I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of P.J. Lindsay, Senior Member

Signed:         .......................................................................................
  Associate

Date of Hearing  5 November 2002
Date Final Submissions received:  3 March 2003
Date of Decision  31 March 2003
Applicant’s representative             Dr Shums Migration Consultancy

Solicitor for the Respondent                Ms S. Goodman