Lu and Anor and Minister for Immigration and Citizenship - [2010] AATA 177

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 177

ADMINISTRATIVE APPEALS TRIBUNAL )

) Nos: 2007/3912 and 2007/3913

GENERAL ADMINISTRATIVE DIVISION )
ReChun Hou LU
Shao Hwa WANG

Applicants

AndMinister for Immigration and Citizenship

Respondent

DECISION

TribunalMr RP Handley, Deputy President
Mr Dean Letcher QC, Senior Member

Date16 March 2010
PlaceSydney
Decision(1) The decision to cancel Mr Chun Hou Lu’s Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visa is set aside and the Tribunal substitutes a decision that the visa not be cancelled.
(2)The decision to cancel Ms Shao Hwa Wang’s family unit business skills visa is set aside and the Tribunal substitutes a decision that the visa not be cancelled.
....................[sgd].....................
Mr RP Handley
Deputy President

CATCHWORDS

IMMIGRATION & CITIZENSHIP – Business skills visa – whether applicant has an eligible business in Australia – whether applicant is actively participating at a senior level in the day-to-day management of a business – whether Tribunal can consider evidence outside legislative three-year period – no temporal element – decisions under review set aside

WORDS AND PHRASES – eligible business - extreme hardship

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RELEVANT ACTS

Migration Act 1958: ss 134, 135

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CITATIONS

Lu & Anor v Minister for Immigration and Citizenship (2009) 112 ALD 125; [2009] FMCA 891

Shi v Migration Agents Registration Authority (2008) 235 CLR 286; (2008) 103 ALD 467; (2008) 248 ALR 390; (2008) 82 ALJR 1147; (2008) 48 AAR 345; [2008] HCA 31

Re Li and Minister for Immigration and Citizenship (2009) 110 ALD 419; [2009] AATA 501

Re Liu and Minister for Immigration and Citizenship (2009) 106 ALD 691; (2009) 49 AAR 365; [2009] AATA 101

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; (1979) 46 FLR 409; (1979) 2 ALD 60

Shi v Migration Agents Registration Authority (2007) 158 FCR 525; (2007) 240 ALR 23; (2007) 95 ALD 260(2007) 158 FCR 525; [2007] FCAFC 59

Kushner v Minister for Immigration and Citizenship [2009] FMCA 390

Hope v Bathurst City Council (1980) 41 LGRA 262; (1980) 29 ALR 577; (1980) 54 ALJR 345; (1980) 80 ATC 4386; (1981) 12 ATR 231; (1980) 144 CLR 1

Tung-Liang Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184; (2009) 107 ALD 88; [2009] FCA 189

Re Huang and Minister for Immigration, Multicultural Affairs [2002] AATA 656

Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630

Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304; [2004] FCA 31

Re Teo and Minister for Immigration and Citizenship (2007) 95 ALD 165; [2007] AATA 1118

Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481

Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961

Re Roeloffze and Minister for Immigration and Citizenship [2008] AATA 345

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OTHER AUTHORITIES

Hansard, House of Representatives, 7 May 1992, p2678

Migration Amendment Bill (No. 2)

Procedures Advice Manual 3

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REASONS FOR DECISION

16 March 2010

Mr RP Handley, Deputy President

Mr Dean Letcher QC, Senior Member

This matter involves business visas granted to Mr Lu and his wife, Ms Wang, that were cancelled by the Minister on the ground that Mr Lu had not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. The cancellations were affirmed by the Tribunal but, on appeal, the Federal Magistrates Court quashed the Tribunal’s decision and remitted it to the Tribunal for reconsideration according to law.

Background

Mr Lu, the primary visa holder, was born in Taiwan. By application dated 22 February 2003, Mr Lu applied for a Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visa, including Ms Wang and their four children, who were also born in Taiwan. Mr Lu, Ms Wang and each of their four children were granted business visas in February 2004. Mr Lu first entered Australia utilising his business visa on 26 February 2004 and Ms Wang on 5 July 2004.
In his application for a visa, Mr Lu stated that his occupation from 1982 to 2003 had been as a company president in the dyeing industry and that he intended exploring opportunities in trade and exports in Australia. On 8 November 2005, G Ping Australia Pty Ltd (G Ping) was registered by the Australian Securities and Investments Commission (ASIC). Mr Lu and Ms Wang are the two registered shareholders in G Ping and each hold 50 $1 shares. He and Ms Wang also each hold 50% of the shares in a Taiwanese company known as Jason Tech Textile Co Ltd (Jason Tech).
On 1 February 2006, the then Department of Immigration and Multicultural and Indigenous Affairs (the Department) wrote to Mr Lu asking him to complete a ‘Survey of business skills visa holders’. Mr Lu’s migration agent completed the form on his behalf and forwarded this together with supporting documents to the Department under cover of a letter dated 2 April 2006.
On 19 February 2007, the Department sent notices to Mr Lu and Ms Wang stating its intention to cancel their visas. The notices invited them to make representations to the Minister’s delegate concerning the proposed cancellation of their visas. Their migration agent responded on 12 April 2007.
On 27 July 2007, the delegate of the Minister for Immigration and Citizenship cancelled Mr Lu’s, Ms Wang’s and three of their children’s visas. Their fourth child had already been granted Australian citizenship. According to the Department, from the time of Mr Lu first entering Australia on his business visa on 26 February 2004 until the time of its cancellation on 27 July 2007, he spent 231 of a possible 1016 days in Australia. Mr Lu, Ms Wang and the three children applied to the Tribunal for a review of the decisions to cancel their visas. On 25 September 2008, the Tribunal affirmed the decisions.
On 22 October 2008, Mr Lu, Ms Wang and the three children applied to the Federal Magistrates Court for a review of the Tribunal’s decision. In relation to the three children, the Tribunal made orders by consent on 18 September 2009 that their visas not be cancelled. This followed a finding by FM Barnes that remitted the decisions made in relation to them to the Department for reconsideration on the basis that they had not been given written notices of intention to cancel their visas in accordance with s 135(1) of the Migration Act 1958 (the Act). The Tribunal understands those three children have now been granted permanent residency in Australia.
On 22 September 2009, the Federal Magistrates Court quashed the Tribunal decision in relation to Mr Lu and Ms Wang and remitted this to the Tribunal for reconsideration: Lu & Anor v Minister for Immigration and Citizenship [2009] FMCA 891. Federal Magistrate Barnes found that the Tribunal made a factual error of such fundamental importance as to establish a miscarriage in the fact-finding process. This was in relation to a finding that the goods purchased by G Ping were in the order of $8,000, whereas an aide-memoire provided by the Minister “revealed evidence in the material before the Tribunal of independent orders by G Ping in the vicinity of just under $65,000 from independent suppliers in the period between early 2006 and early 2007” (at [50]).
Her Honour said, at [64ff], this was a critical finding relevant to the determination of whether or not G Ping was a ‘business’ and also as to whether or not Mr Lu had made a ‘genuine effort’ to obtain a substantial ownership interest in an eligible business in Australia. The Tribunal made a factual error of such materiality that in the circumstances it gave rise to a jurisdictional error such that the applicants did not have a proper review in the manner provided for in the Administrative Appeals Tribunal Act 1975 (at [68]).

The Legislative Framework

The relevant provisions of the Act are as follows:
134.Cancellation of business visas
(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.
(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.
(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 in the day-to-day management of a business:
(ii)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(iii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
(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.
(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.
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(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.

The Issues – Mr Lu

The issues for the Tribunal in relation to Mr Lu are:
(1)Whether he has obtained or made a genuine effort (and intends to continue to make such effort) to obtain a substantial ownership interest in an eligible business in Australia (s 134(1)(a) and s 134(2)(a) and (c)). This requires that the Tribunal determine whether he has been involved in (a) a business, that (b) is an ‘eligible business’ (as defined in s 134(10)). If so,
(2)Whether he has utilised or has made a genuine effort (and intends to continue to make such effort) to utilise his skills in actively participating at a senior level in the day-to-day management of that business (s 134(1)(b) and s 134(2)(b) and (c)).
The Department contends that the Tribunal’s consideration of the criteria in s 134(1) and (2) “should be confined to evidence in relation to G Ping’s activities and the applicant’s involvement in the company up until 5 August 2007”. A notice of intention to cancel a visa must be issued within three years of the date of first entry on the business visa for the Minister to be empowered to cancel the visa: s 134(9). Mr Lu first entered Australia on the visa on 26 February 2004. The notice was sent on 19 February 2007 and deemed to have been received seven days later on 26 February 2007. The Department allowed Mr Lu the maximum period of 70 days (for a person who is outside Australia at the time) to respond to the notice of intention to cancel his business visa (s 135(1)(b)(ii)) from the date of deemed receipt (ie 7 May 2007). The Department then allowed the maximum period of a further 90 days permitted for the Minister to exercise his power to cancel the visa (s 135(4)), being 5 August 2007, which was the latest possible date on which the delegate could have considered evidence relevant to this matter.
The Department submits that the combined effect of ss 134 to 137 is that the decision-maker cannot take into account evidence of the applicant’s activities outside the period ending, in this case, on 5 August 2007. The Department noted the Second Reading Speech on the Migration Amendment Bill (No 2) 1992 in which the Minister, Mr Hand, described the initiatives set out in the amending legislation and, in the case of business visas, the legal framework to implement this. The second aspect of this that he described (Hansard, House of Representatives, 7 May 1992, p2680):
… is the creation of a power for the Minister to cancel permanent entry permits and entry visas of business skills migrants after their arrival in Australia if they do not enter into business activities which meet the objectives of the category or make a genuine effort to do so. These provisions will apply to such migrants within their first three years after arrival in Australia. The Minister cannot cancel entry permits or visas unless action is initiated within the three-year period ...
The Bill includes provisions which mean that the power cannot be used against a business migrant unless the Minister has notified him or her of the intention to do so within three years of the migrant’s arrival in Australia. This provision allows business migrants time to make sensible business decisions. It also allows sufficient time for an assessment to be made that the business is likely to be of ongoing benefit. It also recognises that, as permanent residents, business migrants should not be under the threat of cancellation indefinitely. ...

The Department contends that allowing the Tribunal to have regard to evidence in relation to activities outside the three‑year period would permit the Tribunal to exercise a power broader than is allowed the original decision-maker by statute, may require the Tribunal to address different questions from those the original decision-maker was required to address, and would frustrate the object and purpose of the legislative scheme.
Mr Karp, for Mr Lu and Ms Wang, rejected these contentions. He submitted there is nothing in the legislation to indicate that the Tribunal’s consideration should be limited to evidence in relation to the period of three years together with the notification and decision-making periods.
The starting point for the Tribunal’s consideration of this issue is the decision of the High Court in Shi v Migration Agents Registration Authority [2008] HCA 31 (Shi), where the High Court held that, “Where the decision to be made contains no temporal element, evidence of matters occurring after the original decision may be taken into account by the Tribunal in the process of informing itself” (per Kiefel J at [143]). Thus, the issue in this case is whether there is such a temporal element in the relevant provisions of the Act. The effect of the decision in Shi has been considered by the Tribunal in a number of cases.
The Department referred to the decision in Re Li and Minister for Immigration and Citizenship [2009] AATA 501, where, at [15], the Tribunal accepted the Minister’s submissions and concluded that it could only consider fresh evidence if it were relevant to the facts during the relevant period, that is the period ending on the date on which the decision to cancel was made.
In Re Liu and Minister for Immigration and Citizenship [2009] AATA 101 (Liu), at [17], the Tribunal came to a different conclusion, namely that there is no such temporal element requiring the decision-maker to turn his or her mind to s 134 at a particular time. While the action to cancel a visa must be initiated within the three year period, there is no requirement that the actual decision to cancel be made on a particular date within that period. The Tribunal stated, at [14], that to exclude activities undertaken after the relevant period from the Tribunal’s consideration, “particularly where those activities are likely to be favourable, rather than unfavourable, to the applicant would seriously hamper the Tribunal in its task of making the correct or preferable decision”. The Tribunal noted the serious consequences the decision to cancel has for the visa holder and concluded that the Tribunal is required to take into account the state of affairs at the date of the tribunal decision.
In our view, the Tribunal in Liu was correct in focusing on the Tribunal’s function of making the correct or preferable decision. It is well established that, as Bowen CJ and Deane J said in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, at 68, “The question for the determination of the Tribunal is whether the decision was the correct or preferable one on the material before the Tribunal”. (See also Kirby J in Shi at [35]].) In undertaking its review, the Tribunal is not generally confined to the evidence before the original decision-maker.
The object of the Act stated in s 4(1) is “to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens”. Amongst other things, the Act facilitates business migration which has long been recognised as contributing to the development of the Australian economy (Hansard, House of Representatives, 7 May 1992, p2678). The 1992 amendments to the Act were intended to provide a legal framework for the business skills migration category and to empower the Minister to cancel business skills visas where visa holders do not meet the objectives of the category. The criteria to which the decision‑maker must refer in deciding whether to cancel a visa include the visa holder’s intentions and the genuineness of their efforts.
We agree with the view expressed by the President of the Tribunal, Downes J in the Full Federal Court in Shi v Migration Agents Registration Authority (2007) 158 FCR 525, [2007] FCAFC 59 at [44]:
Allowing the Tribunal to have regard to subsequent conduct would not undermine the legislation … The Tribunal would be bound to carefully scrutinise the changed circumstances and to satisfy itself that the reformed conduct was not merely a device to avoid cancellation or suspension. It would, in any event, take into account that the reformed conduct was not spontaneous.

There is no reason to think that the Tribunal is not able to perform such a function effectively, and, in doing so, it may also consider the motivation of the visa holder if it is relevant, for example, to whether the activity was a ‘business’ for the purposes of s 134 or perhaps a sham: Kushner v Minister for Immigration and Citizenship [2009] FMCA 390 (Kushner), at [47].
There is no explicit temporal element in the wording of s 134 of the Act requiring that the decision-maker be satisfied as to the matters in s 134(1), (2) and (3) at a particular point in time. While there are specific time limits in respect of the giving of the required notices and the time within which a decision to cancel must be made, there is no specific provision requiring the decision-maker to have regard to the person’s situation at a particular time. Moreover, the time limits in respect of the giving of the notices and within which a decision to cancel is made appear to be intended to give procedural protection to the visa holder in terms of affording some certainty as to time beyond which the cancellation power may not be exercised. It seems unlikely that the power to cancel is available purely because the visa holder is slow to engage in the required activities, perhaps because, as in the case here, winding up some of the affairs of the visa holder in the country from which they are migrating takes a significant time. There is certainly no indication that the power to cancel was intended for use to punish slowness: see also Kirby J in Shi at [50].
The Tribunal therefore concludes that s 134 of the Act does not contain a temporal element confining the circumstances that may be considered by the Tribunal to those in existence not later than the end of the period within which the Minister may exercise the power to cancel the applicant’s visa.

The Issue – Ms Wang

If the Tribunal affirms the Minister’s decision to cancel Mr Lu’s visa, the issue for the Tribunal in relation to Ms Wang is whether she would suffer extreme hardship by reason of the cancellation of her visa so that her visa should not be cancelled (s 134(4) and (5)).

Does Mr Lu have a substantial interest in an ‘eligible business’?

Did Mr Lu have a ‘business’?

The word ‘business’ used in this context means “a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”: Mason J in Hope v Bathurst City Council (1980) 144 CLR 1, at [14]; see also Tung-Liang Liang v Minister for Immigration and Citizenship [2009] FCA 189, at 30 (Logan J).
The Tribunal notes that Departmental policy, in the form of the Procedures Advice Manual 3 (PAM 3), at [7.3], refers to a consideration of factors such as whether customers are sought and financial records are kept and whether the activities are genuine and real.
The evidence before the Tribunal includes a statement dated 22 December 2009 provided by Mr Lu and a statement dated 11 November 2009 provided by Ms Wang. Both gave evidence at the hearing. They also provided copies of bank statements, company financial statements and tax returns, and invoices and bills of lading in relation to the sale of goods by G Ping.
Mr Lu said that he applied for a business visa in 2003 because he wanted a change of direction in business that would give him a better quality of life and involve him in international trade. He also wanted his children to grow up in an English‑speaking environment so that international business would be easier for them. Mr Lu considered both the possibility of importing into Australia advanced textile products – and appointed the Taiwan Research Institute to conduct research into bamboo charcoal textile products for fire‑resistant clothing with this in mind – and the exporting of wood and agricultural products from Australia to Taiwan.
When Mr Lu first entered Australia utilising his business skills visa on 26 February 2004, he spent eight days travelling with a tourist group visiting Brisbane, the Gold Coast and Sydney in order to familiarise himself with the country. When he returned to Taiwan, he was involved in wrapping up the business which he had previously managed there, and of which he was a director, Yu Chun Industry Co Ltd. He and Ms Wang held 37 percent of the shares in that company. The company owned two factories. At one factory, which stood on land owned by the company, clothing material was dyed. The other factory, which stood on leased land, was involved in pressing finished clothes. The company had about 70 employees.
It took more than a year to wrap up the business, including meeting its legal and moral obligations to its employees, selling its equipment (including air conditioning and anti-air pollution equipment), obtaining government authorisation for the de-registration of the factory on the land owned by the company and then demolishing the factory. That land has subsequently been leased and Mr Lu receives a share of the rent. The lease for the other factory expired in 2005 and the factory has since been demolished. Mr Lu said his re-entry into Australia after his February 2004 visit was also delayed by his mother’s ill health and his obligation to assist her.
Mr Lu next entered Australia on 31 May 2005 and stayed until November 2005. He leased an apartment in Burwood and attended English classes. At these classes, he met a Korean man who was involved in the manufacture of cosmetics in Australia. Mr Lu thought these products might be successfully exported to Taiwan and took samples to Taiwan to explore this. While in Sydney, Mr Lu also visited the Taiwanese Overseas Post to obtain information about Australian suppliers whose products might be sold in Taiwan but they were not helpful and so he had to look for business opportunities himself. Mr Lu’s children arrived in Sydney in July 2005 and lived with Mr Lu in the unit at Burwood. Ms Wang arrived in November 2005. At the time that Mr Lu returned to Taiwan later in November 2005, Mr Lu’s brother was “gravely ill and in hospital” in Taiwan. His brother subsequently died in May 2006.
In August 2005, through his accountant, Mr Lu applied to register a company, G Ping Pty Ltd, of which he and Ms Wang each owned 50 percent of the shares. He and his wife discussed how best to establish a business exporting goods from Australia to Taiwan and decided that because her English was far better than his – he can read English but his listening and speaking is poor - she would stay in Australia and seek out suppliers, check the goods for quality and organise labelling and shipping, while he would be responsible for marketing the goods in Taiwan.
Ms Wang stated that Mr Lu had many friends and business acquaintances in Taiwan and he was the best person to search out buyers there for Australian products. She had studied international trade in both the UK and USA and had experience in international trade, having exported electronic goods to Eastern Europe about 12 to 15 years ago prior to having more children. Jason Tech had been registered at that time as an export/import company. A Business Registration Certificate for Jason Tech shows that it was first registered on 10 June 1994.
Mr Lu’s plan for the new business involved a long period of development starting with the export of cosmetics and then expanding into butter, wool and minerals. His wife searched for suitable products on line and talked to business contacts. Ms Wang said that apart from cosmetics, they also tried exporting pet food, toothpaste and toothbrushes to Taiwan. A friend of Mr Lu’s asked her to source pet food in Australia because there is no swine flu in Australia and supplies from Australia command a higher price. They were also interested in exporting butter.
Ms Wang said that during the period 2006 to 2008, all deposits into G Ping’s business accounts were used for G Ping’s business. She would purchase goods for G Ping almost every week. The money paid to suppliers by G Ping in 2006 amounted to about $60,000 and it was even necessary to deposit some of her own money into G Ping’s business account to cover cheques for the purchase of goods. Ms Wang said she spent a minimum of 48 hours a week on G Ping’s business – from 9.30am until about 3.00pm and then later she and Mr Lu would discuss purchasing and sales via Skype.
Mr Lu stated that Taiwanese law required an import business to be run by a locally registered company. He and Ms Wang decided to use Jason Tech for this purpose. However, they had to apply “to add to the scope of the business of Jason Tech”. Mr Lu said he visited potential customers to see what kind of goods would sell in Taiwan, and explored marketing opportunities with television companies. Ultimately, he also had to deal with labelling after the label used for one of the products Jason Tech sold (Eucalyptus Propolis Toothpaste with Fluoride) was found to be in breach of the Taipei County Government labelling regulations, resulting in a fine being imposed. He had to withdraw all the products sold by Jason Tech and change the labels. He then had new labels printed that he sent to Australia for his wife to affix to products sent to Taiwan.
Mr Lu stated that on 4 August 2006, he leased a showroom for Jason Tech in the World Trade Centre in Taipei to showcase Australian goods. He showed the Tribunal photographs of the showroom. He spent about five hours a day in the showroom, where Jason Tech also employed one person for the business. The rest of the time, Mr Lu spent searching out and dealing with customers and communicating with his wife in Australia. They had daily discussions over the internet using Skype. He said that between November 2005 and November 2008, he worked full-time in the business. Among the evidence supplied by Mr Lu are translations of Mr Lu’s monthly Taiwanese telephone bills covering the relevant period, showing almost daily and sometimes twice daily telephone calls to Australia, and examples of business emails between Mr Lu and Ms Wang.
Mr Lu said that as part of his marketing, he advertised Jason Tech’s products on a radio station and through a charity association. Business was increasing, there were more customers, he was negotiating with a supermarket in Taiwan and gradually expanding the range of products being sold. He was looking forward to moving to Australia and employing someone else to do the marketing in Taiwan, but the business had to be generating sufficient income to sustain this.
Mr Lu said when Ms Wang was prevented from working after the previous Tribunal proceedings and could no longer send goods to Taiwan, his customers in Taiwan:
were very angry, but there was nothing I could do. I had no direct contact with Australian suppliers, and insufficient English to deal with most of them. I lost face as well as business.

Mr Lu said that if he had ordered goods directly from the suppliers he would also have had less control of the transactions and his profit margin would probably have been adversely affected.
Mr Lu relied on his savings to support his family while starting the new business. When the business ceased in November 2008, since he had no other business interests in Taiwan, he found a job in the textile industry managing dyeing. He worked for this company for almost a year. Then in November 2009, he obtained a job with Sun Hing Industries Holding Ltd in mainland China as its ‘Operation and Technical Director’.
Mr Lu said if he is given another opportunity, he thinks he can rebuild the business, but it will probably take two to three years and possibly five years before he could leave the marketing and distribution of goods in Taiwan to someone else.
Mr Lu was asked about the financial arrangements for the support of G Ping. He arranged for Ms Wang to deposit $100,000 into G Ping’s bank account when it commenced business and he then made payments to G Ping twice yearly thereafter. However, he said that G Ping and Jason Tech were essentially working together as one business. G Ping does not have a bank account in Taiwan.
Ms Wang said she typed all G Ping’s invoices. When goods sent by G Ping were received by Jason Tech in Taiwan, G Ping would be credited with this amount in its accounts. The actual money would come in the form of regular deposits made by Mr Lu into G Ping’s account in Australia. It was easier this way. She said the initial $100,000 deposited in G Ping’s account when it commenced business was for the purchase of goods that would ultimately be sold in Taiwan by Jason Tech. Ms Wang paid by cheque for goods purchased by G Ping. She refuted the suggestion that G Ping’s accounts reflected her household spending, although she said she made a mistake in not having a clear path for identifying the different uses to which money sent by Mr Lu from Taiwan was put. Ms Wang said the money remitted from Taiwan for G Ping included the profit from the sale of goods in Taiwan.
The Tribunal had before it G Ping’s invoices for the period 18 January 2006 to 27 February 2007. The invoices show that during that period, G Ping purchased goods to the value of $64,474.04. Further information for the period 30 November 2007 to 30 September 2008, shows G Ping invoiced Jason Tech for cosmetics, health products and toothpaste totalling $73,751.80. Tax returns lodged for G Ping show sales of goods of $85,091 in 2007 and $74,838 in 2008. Balance sheets and tax returns for Jason Tech were also provided for the same period. Bank statements for G Ping for the period February to July 2007 show various transactions that appear to be business related.
One of the difficulties faced by the Tribunal was the lack of a clear money trail to support the applicants’ contention that G Ping was a business. The Tribunal found it difficult to distinguish between Mr Lu’s and Ms Wang’s personal funds and G Ping’s business funds. Our task would have been easier had their records been better organised and maintained.
Mr Orford, for the Minister, submitted that the activities engaged in should be for the purpose of a business in Australia. He said there is a lack of evidence of payments being made to G Ping in relation to the invoices it raised. He contended that there was a lack of focus on G Ping making a profit, and the business practices and amount of money coming in were not consistent with promoting G Ping as a business. Mr Orford referred to the decision in Kushner, where Federal Magistrate Driver found, at [47] and [48], that the Tribunal is entitled to have regard to the applicant’s motivation in undertaking trading activities. The Minister contends that G Ping’s existence is not necessary for Jason Tech to acquire Australian products. Such products could be sourced directly from Australian suppliers.
Mr Karp, said that Jason Tech, through Mr Lu, conducted research and used his business contacts to identify the kinds of Australian products that were likely to sell in Taiwan, of which he then advised Ms Wang. G Ping, through Ms Wang, had the task of seeking out suppliers, negotiating purchases and arranging shipping to Taiwan. Jason Tech, through Mr Lu, then had the task of marketing the products in Taiwan. Mr Karp said commercial activity was evident throughout the documents filed in these proceedings. Essentially, this was an integrated business set up in this way in the light of the commercial situation in Taiwan. Both parts of the business – G Ping and Jason Tech – were necessary for its commercial success.
The Tribunal is satisfied that Mr Lu was involved in a genuine ‘business’ in the sense outlined by Mason J in Hope v Bathurst City Council. The Tribunal finds that the business was that of exporting Australian products to Taiwan for sale in that market. The invoices supplied by Mr Lu show that G Ping purchased a range of Australian goods from Australian suppliers, including particularly cosmetics, for sale in Taiwan. Mr Lu and Ms Wang’s evidence is that the profit from the sale of these goods in Taiwan was remitted to G Ping in Australia.
The Tribunal notes that the facts of the present case can be distinguished from those in Kushner where, at [48], Federal Magistrate Driver said the Tribunal whose decision was the subject of the appeal was entitled to have regard to Mr Kushner’s motivation in undertaking trading activities in order to determine whether those activities amounted to a going concern. The Tribunal had found (at [36]) that the activities undertaken by the two business “entities were ad hoc and for the purpose of a migration outcome rather than for establishing a business”. One of the business entities was incorporated only one day before the Department issued Mr Kushner with a notice of intention to cancel his visa.
The Tribunal accepts Mr Lu’s evidence that it was necessary to handle sales in Taiwan through a company registered in Taiwan. Because Jason Tech, like G Ping, is wholly owned by Mr Lu and Ms Wang, and, essentially, appears to have been acting as an agent for G Ping and could be considered an arm of Mr Lu’s Australian business, the Tribunal sees no difficulty with the fact that the marketing, sale and distribution of Australian products was carried out in the name of another corporate entity. The Tribunal is satisfied that G Ping and Jason Tech are both part of Mr Lu’s and Ms Wang’s business which has its foundations in Australia. The fact that Mr Lu spent a significant amount of time in Taiwan is adequately explained by the nature of the business and the fact that it was Mr Lu’s business contacts and marketing skills that were essential to securing the initial sales for the business in Taiwan.

Was the business an ‘eligible business’?

The definition of ‘eligible business’ is set out in s 134(10) in the following terms:
"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 and services; …

It is also clear from the wording of s 134(1) and (2) that the eligible business must be in Australia.

The Minister contends that this means that it is only the activities of G Ping that are relevant. In the Tribunal’s view, G Ping’s activities encompass those of Jason Tech. Where a business is seeking to develop links with the international market and establish a business involving the export of Australian goods and services, it is inevitable that that it will need the assistance of overseas agents.
The fact that part of the eligible business is carried on outside Australia is not a disqualifying factor. While the applicant must show the existence of “an eligible business in Australia”, there is no reason why the applicant or some other entity should not supply services required by the business outside Australia. Indeed, it is difficult to see how an import-export business would not require the regular provision of such services outside Australia.
In this case, the services were provided by an agent that was also owned by Mr Lu and Ms Wang, and the Tribunal is satisfied that their objective was the establishment of a business in Australia engaged, initially at least, in the export of Australian products to Taiwan, and that Jason Tech is an integral part of that process. Ultimately, this will also benefit the creation or maintenance of employment in Australia. Thus, the Tribunal is satisfied that Mr Lu’s business is an eligible business as defined in s 134(10).

Has Mr Lu made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business and does he intend to continue to make such an effort?

It is the Australian business that the visa holder must be involved in actively managing on a day-to-day basis: see, for example, PAM 3 at [8.1]. The Act envisages that visa holders will settle in Australia and will use their skills in establishing a business here, while envisaging that they may wish to travel overseas while conducting that business: Re Huang and Minister for Immigration, Multicultural Affairs [2002] AATA 656, at [12]; followed, for example, in Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630, at [52] – [53]. In relation to s 134(2) and what is meant by ‘genuine effort’ to utilise the person’s skills, the Tribunal notes the factors referred to in PAM 3, at [9.2], including research that the person has undertaken into conducting an eligible business in Australia, and the period or periods during which the person has been present in Australia.

As stated above, from the time of his first entering Australia on his business visa on 26 February 2004 until the time of the cancellation of his visa on 27 July 2007, Mr Lu spent 231 of a possible 1016 days in Australia. Mr Lu’s evidence is that when he first entered Australia on his business visa on 26 February 2004 he travelled with a tourist group to Brisbane, the Gold Coast and Sydney in order to familiarise himself with the country. He then returned to Taiwan in order to make the necessary arrangements for the closure of the business of which he was a part owner and the manager. This took more than a year, involving de-registering and then demolishing a factory on land owned by the company, closing another factory of leased premises, selling equipment and providing for the company’s 70 employees.
Mr Lu did not return to Australia until 31 May 2005. He then enrolled in an English language program, leased an apartment and started exploring business opportunities. In August 2005, G Ping was registered and he and Ms Wang agreed that because of his contacts and experience, he would look after marketing, sales and distribution in Taiwan. Because Ms Wang’s English was better than his and because she had experience of international trade, she would remain in Australia, identify suppliers, check goods for quality and organise labelling and shipping.
Mr Lu’s evidence is that he also spent more time in Taiwan during the period 2005 to 2007 because his mother became sick, his brother became sick and subsequently died, and it took time for Mr Lu and Ms Wang to sell their house in Taiwan.
Mr Lu said that he visited potential customers in Taiwan, explored marketing opportunities and, from 4 August 2006, leased a showroom to showcase Australian products. He would commonly spend five hours a day at the showroom where he also employed one staff member. Apart from continuing visits to attract sales and explore marketing opportunities, he also spoke to Ms Wang daily using Skype when they discussed purchasing and sales, and exchanged emails with her about such matters. The Tribunal also notes the evidence as to the labelling difficulties experienced in Taiwan, resulting in Jason Tech being fined for a breach of municipal regulations, and all products having to be withdrawn from sale and re-labelled.
In the Tribunal’s view, this evidence clearly establishes that Mr Lu was utilising his skills in actively participating at a senior level in the day-to-day management of the business and the Tribunal is also satisfied that he made a genuine effort to do so. Moreover, despite the setbacks associated with the cancellation of his visa and closure of his business, and his having to find alternative employment, Mr Lu remains committed to re-establishing his business in Australia, although acknowledging that it may take up to five years to do so. We are therefore satisfied that he intends to continue making genuine efforts to establish an eligible business in Australia and to be actively involved in its day-to-day management.
In conclusion, the Tribunal is satisfied that Mr Lu meets the requirements of s 134(2) of the Act and, therefore, the power to cancel his visa under s 134(1) must not be exercised. Thus, it is unnecessary for the Tribunal to consider the residual discretion in s 134(1) not to cancel a visa: Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, at [21]. Nevertheless, the Tribunal notes that if it were necessary to consider the residual discretion, the best interests of any children who are minors would be a relevant consideration, as would the hardship on the applicant’s family members who have relied upon the grant of the visa to gain permanent residence and, ultimately, citizenship. The interests of Mr Lu’s children, who are aged 20, 17, 16 and 11 and are all attending educational institutions in Australia, would be relevant matters for consideration: Re Teo and Minister for Immigration and Citizenship [2007] AATA 1118.
As noted above, Ms Wang’s and Mr Lu’s oldest child is an Australian citizen and the other three are permanent residents. Ms Wang gave evidence that her children have been educated in Sydney for almost the past five years and have enjoyed their education here. Her daughter, aged 20, is studying education and music at the University of NSW, her sons aged 17 and 16 attend Homebush High School, and her daughter aged 11 attends Homebush Public School. She said her sons, in particular, would have difficulty in returning to school in Taiwan because they have missed four to five years of the foundation programs. They are also at an age when she would not want to return to Taiwan and leave them to finish their schooling in Australia – the home influence is also very important in terms of their development. Further, Ms Wang does not want to separate the children – she wants to be with them as they are growing up. It would “destroy” her to return to Taiwan and leave her 11-year-old daughter in Australia. She has no relatives in Australia with whom the children could stay if she returned to Taiwan.
In cross-examination, Ms Wang acknowledged that having recently returned to Taiwan with her children to visit their sick grandmother, on re-entry into Australia she was granted a 12-month tourist visa which enables her to remain in the country until 15 January 2011.
Beyond noting the above evidence which, in the Tribunal’s view, would be relevant to the exercise of the residual discretion, the Tribunal makes no findings on this issue for the reason stated above.

Would Ms Wang suffer extreme hardship by reason of the cancellation of her visa?

Having found that Mr Lu satisfies the requirements of s 134(2) of the Act and, therefore, that the power to cancel his visa under s 134(1) must not be exercised, it is also unnecessary for the Tribunal to consider the application of s 134(5) and whether the cancellation of Ms Wang’s visa would result in her suffering extreme hardship. Nevertheless, once again, our view is that it may be useful to refer briefly to this matter.
The meaning of the words ‘extreme hardship’ was considered by Foster J in the Federal Court in Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481, at 487:
… it is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. "Hardship" is in itself a relative term. What may be a "hardship" to a sensitive person, or one in a particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word "extreme" must be evaluated against the facts of the particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken.

His Honour went on to say that there can be differing degrees of hardship and that extreme hardship is at the very high end of the scale. As Deputy President McMahon also recognised in Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961, at [30], such hardship must necessarily result from the cancellation of the visa, and the test is subjective – the wording of s 134(5) is “if cancellation of the visa would result in extreme hardship to the person”. As the Tribunal stated in Re Roeloffze and Minister for Immigration and Citizenship [2008] AATA 345, at [63], “It is the effect on the individual resulting from the cancellation of the visa which is to be considered.”
Ms Wang’s evidence as to her children and her current visa is set out above. Mr Karp contended that she would be greatly distressed by the cancellation of her visa and the ensuing consequences. Mr Orford submitted that stress caused to Ms Wang does not, of itself, constitute extreme hardship. He said it would be open to Ms Wang to return to Taiwan with all four children. In any event, because her visa extends until January 2011, her older son would by that time be aged 18 and her second son nearing 18. Moreover, although she would have to leave the country on the expiry of her current tourist visa, this would not prevent her from applying for further visas.
Beyond noting the above, the Tribunal makes no findings on this issue for the reason stated above.

Conclusion

Having determined that Mr Lu satisfied s 134(2) of the Act, the Tribunal’s decision is as follows:
(1)The decision to cancel Mr Lu’s Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visa is set aside and the Tribunal substitutes a decision that the visa should not be cancelled.
(2)The decision to cancel Ms Wang’s family unit business skills visa is set aside and the Tribunal substitutes a decision that the visa should not be cancelled.

I certify that the 72 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President and Mr Dean Letcher QC, Member

Signed: .........[sgd].............................................................
Associate

Dates of Hearing:  18 December 2009 and 8 February 2010
Date of Decision:  16 March 2010
Applicant representative:          Ren Zhou Lawyers
Applicant counsel:  Mr L Karp

Respondent representative: Mr A Orford, Clayton Utz