Lu and Ors and Minister for Immigration and Citizenship
[2008] AATA 858
•25 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 858
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/3912
GENERAL ADMINISTRATIVE DIVISION ) 2007/3913
2007/3915
2007/3916
2007/3917Re CHUN HOU LU
SHAO HWA WANG
CHI YU LU
KAN LU LU
KAN LIN LUApplicants
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mrs Josephine Kelly, Senior Member Date25 September 2008
Place Sydney
Decision Proceedings 2007/3912
The reviewable decision to cancel Mr Chun Hou Lu’s Business Skills (Migrant) (Class AD) (Subclass 127 - Business Owner) is affirmed.
Proceedings 2007/3913
The reviewable decision to cancel Ms Shao Hwa Wang’s family unit business skills visa is affirmed.
Proceedings 2007/3915
The reviewable decision to cancel Mr Chi Yu Lu’s family unit business skills visa is affirmed.
Proceedings 2007/3916
The reviewable decision to cancel Kan Lu Lu’s family unit business skills visa is affirmed.
Proceedings 2007/3917
The reviewable decision to cancel Kan Lin Lu’s family unit business skills visa is affirmed.
...................[sgd]........................
Senior Member
Mrs Josephine Kelly
CATCHWORDS
MIGRATION – Business skills visa – Family unit visas - Cancellation – Export of goods to Taiwan – Whether “business” – Whether eligible business – Whether utilizing skills in actively participating at a senior level in the day to day management of business – Whether substantial ownership interest in eligible business - Whether intends to – Whether “genuine effort” - Held not a “business” – Grounds for cancellation – No genuine effort - Residual discretion not exercised – No extreme hardship to family members – Proper notification given - Reviewable decisions affirmed
Migration Act 1958, ss134, 135, 137
Hope v Bathurst City Council (1980) 144 CLR 1
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
REASONS FOR DECISION
25 September 2008 Senior Member, Mrs Josephine Kelly SUMMARY
1. Mr Chu Hua Lu, his wife, and three of their children seek review of the decisions to cancel their visas. Mr Lu was the holder of a Business Skills (Migrant) (Class AD) (Subclass 127 - Business Owner) visa (the business visa). His wife and children are family unit visa holders. The cancellation decisions made on 27 July 2007 were based on a finding that Mr Lu had not satisfied the criteria in s 134 of the Migration Act 1958 (the Act) for holding such a visa.
2. If Mr Lu is successful in these proceedings, all the cancellation decisions will be set aside. If he is unsuccessful, then each of his wife and three children will only succeed if I am satisfied that the cancellation of their visas would result in extreme hardship to that person.
3. For the reasons that follow, I have decided to affirm the decisions to cancel Mr Lu’s business visa, and the visas of each of the family members.
THE ISSUES
4. The issues in these proceedings are:
(a) Is G Ping Australia Pty Limited (G Ping) a business?;
(b) Is G Ping an eligible business?;
(c) Is Mr Lu utilising his skills in actively participating at a senior level in the day-to-day management of that business?;
(d) Does Mr Lu intend to continue to hold a substantial ownership interest in an eligible business and participate at a senior level in the day-to-day management of an eligible business?;
(e) Has Mr Lu made a genuine effort to obtain a substantial ownership interest in an eligible business and participate at a senior level in the day-to-day management of an eligible business and intends to continue to make such genuine efforts?;
(f) If Mr Lu has not succeeded on the above issues, should the Tribunal exercise its residual discretion and not cancel the visa?;
(g) If Mr Lu is unsuccessful, can Ms Wang and/or each of the children satisfy me that the cancellation of their visas would result in extreme hardship (s 134(6) of the Act)?; and
(h) Was proper notice given of the intention to cancel the visas?
CONSIDERATION
Is G Ping a business?
5. Section 134(1) of the Act provides that the Minister may cancel a business visa in three circumstances. The first is where a visa holder has not obtained a substantial ownership interest in an eligible business in Australia (s 134(1)(a) of the Act). The case for Mr Lu was that the activities of G Ping, as established by the evidence, satisfied this criterion.
6. There is no relevant definition of "business" in the Act. In Hope v Bathurst City Council the High Court held that the indicia of a "business" included activities engaged in for the purpose of profit on a continuous and repetitive basis (at 8 and 9). The Court also held that a business may be carried on in a small way (at 10).
7. Mr Lu was born in Taiwan on 23 November 1958. He is the sole director and shareholder of Jason Tech which was registered in Taiwan on 10 June 1994.
8. Mr Lu's visa application dated 22 February 2003 stated that his current business was "dyeing industry" and that he intended to be involved in "trading" in Australia. It also stated that the name of his main business in Taiwan was "Yu-Chun Industrial Co, Ltd", in which he and his wife held A$738,333 net assets in 2001. He owned 37.24% of the business. Its activities included production, further-processing and trading activities for various sorts of textile, knitwear and garment-cloth and related dyeing. Mr Lu was Company President, and was the top decision maker for all major aspects of business operation. In 2001 the turnover was A$4,434,397, total labour costs were A$1,070,446 and total assets were A$4,312,373.
9. Mr Lu indicated that he planned to invest A$100,000 – 200,000 initially in Australia. His inquiries indicated that there had been limited development of the dyeing industry in Australia, but he expressed some optimism about identifying alternative opportunities.
10. The visa was granted in February 2004, and Mr Lu first entered Australia using the visa on 26 February 2004.
11. The company, G Ping, was incorporated in Australia on 8 November 2005. Mr Lu and his wife are the only shareholders. Each owns fifty $1 shares. G Ping made its first shipment of Australian products to Jason Tech on 18 January 2006.
12. A 24 month survey form was sent to Mr Lu on 1 February 2006. It was completed and returned along with supporting documents on 2 April 2006. In a covering letter, Mr Lu's migration agent summarised his business intentions as:
a. identifying export items from Australia to Taiwan; and
b. introducing quality and innovative products to Australia in the hope of attracting interest of joint-venture for manufacturing onshore in the long run.
13. The agent also stated that Mr Lu had secured a reliable supplier in Australia named NOVA Group P/L and had started export to the Taiwan market place. Also, by early 2006, Mr Lu had entered into an agreement with Taiwan Textile Research Institute for a supervised scheme of research and development for a series of "Bamboo Charcoal products" which would be introduced into Australia when it had become sophisticated.
14. The agent stated that Mr Lu's family had settled in Australia and that he and his wife were "currently co-working for the business in Australia", and that Mr Lu had returned to Taiwan "for more marketing efforts". Ms Wang was using her language skills and was acting on behalf of Mr Lu to undertake in-depth research of the local business environment, to build up contacts with potential suppliers. Further, Mr Lu and his ongoing Taiwanese business may be "levered" to be the importer of the products from Australia. The form stated that a family member, who I infer was Ms Wang, spent 30 hours a week, or more in the business, and Mr Lu spent 48-50 hours a week working in the business. It also showed the A$100,000 had been invested in the business. The value of exports since establishment was A$7,962.
15. Mr Lu's migration agent stated that Jason Tech was a counterpart of G Ping,
It is a 'must' mechanism of facilitating the marketing efforts considering the business culture and environment in Taiwan …
16. Notices of Intention to Consider Cancellation (NOICCs) of their visaa were sent to Mr Lu and his family members on 19 February 2007. On 12 April 2007 Mr Lu's agent responded, making representations and providing supporting documents. The visas were cancelled on 27 July 2007.
17. In the response to the NOICCs, Mr Lu's migration agent made various claims including that throughout 2006 Mr Lu exported 10,000 pieces of toothpaste and 5,000 bottles of lanolin oils, and that Mr Lu had identified a market niche in Taiwan for products such as toothpaste, lanolin oil and woollen underwear. He had also exported pet food to Taiwan and was investigating "further processing Australian-made butter (pure beef tallow)".
18. By the time of the hearing, it was claimed that G Ping had shipped goods worth more than A$166,388.25 from Australia to Taiwan during 2006 and 2007.
19. The evidence shows that the goods purchased and/or shipped were mostly cosmetics or health care products. Some pet goods and items of clothing were also shipped. All consignments were to Jason Tech. Some documents showed that Jason Tech and not G Ping had ordered the goods.
20. The trading accounts for the years ending 2007 and 2006 showed gross trading profits of A$39,478.82 and A$12,930.32 respectively, and profits from ordinary activities before income tax of A$3,025.27 and a loss of ($1,579.21) respectively.
21. Jason Tech entered an agreement with the Taiwan Textile Research Institute for "development & Promotion of Bamboo Charcoal Textile Products for the period 1 August 2005 to 31 July 2006. Mr Lu said during his oral evidence that he had meetings two or three times a month in relation to this project.
22. There was evidence that on 24 July 2006 Jason Tech entered into a lease for a showroom in the Taipei World Trade Centre to promote and sell, in its name, Australian products which were shipped to Taiwan by G Ping. There was also evidence that the lease was renewed in 2007.
23. Records, other than those generated by G Ping, show that the first shipment of goods was made on 18 January 2006, from the Nova Group. The invoice was addressed to Jason Tech. The most recent freight invoice in evidence was dated 3 November 2007.
24. Having considered all the material provided on behalf of Mr Lu and his family, I am not persuaded that goods worth $166,000 have actually been shipped. I do not find invoices between G Ping and Jason Tech, or lists of shipments prepared on behalf of Mr Lu and his family members, to be persuasive evidence that the transactions have taken place. Evidence from entities independent of Mr Lu and his family, which corroborates the transactions, is reliable. However, when that material is considered, it does not support the case asserted on behalf of Mr Lu and his family.
25. The evidence of the shipment of goods, including Air Waybills and Bills of Lading to both Jason Tech and G Ping, does not show the value of the goods shipped, and is in total for a relatively small amount. The invoices from independent suppliers establish that the value of goods purchased by G Ping and Jason Tech is much less than the claimed A$166,388.25, in the order of only A$8,000.
26. Also in evidence were various bank records for G Ping and Mr Lu, as its Director. They are not helpful because of the absence of evidence that establishes the claimed value of the goods purchased and shipped by G Ping. Also, the amounts on the invoices from G Ping to Jason Tech were more than double the amount that went into G Ping's bank account.
27. Mr Lu said that he only remitted funds twice a year rather than in respect of each shipment of goods, which is not, as I understand it, a usual business practice.
28. I do not accept the evidence of Mr Lu and Ms Wang about the activities of G Ping and Jason Tech, or about the amount of time they spend on the activities related to the identification of goods which may be successfully marketed in Taiwan, their purchase, shipment, and resale. On the evidence, the actual shipments made would have required relatively very little effort or time to organise.
29. In my opinion, G Ping is not a business within the meaning of s 134(1) of the Act. To the extent that it has engaged in activity, that activity has not been for the purpose of profit, but rather in order to achieve a migration outcome. Further, the activities have not been continuous and repetitive, but rather, have been undertaken on an ad hoc basis, to a related company, Jason Tech.
30. As I have found that G Ping is not a business, it follows that G Ping cannot be an “eligible business” as defined in s 134(10) of the Act. As a result, Mr Lu has not obtained a substantial ownership interest in an eligible business as stated s 134(1)(a) of the Act. It also follows that Mr Lu is not utilising his skills in the day-to-day management of an eligible business in Australia as specified in s 134(1)(b) Act, and does not have the intention specified in s 134(1)(c) of the Act to continue hold a substantial ownership interest in, and utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia. All three grounds for cancellation of Mr Lu’s visa are satisfied.
Has Mr Lu made a genuine effort to obtain a substantial ownership interest in an eligible business and participate at a senior level in the day-to-day management of an eligible business and does he intend to continue to make such genuine efforts?
31. Section 134(2) of the Act provides:
(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.
32. The evidence, summarised above, does not satisfy me that Mr Lu has made the "genuine effort" specified in s 134(2)(a) of the Act. The efforts made to incorporate G Ping, ship goods from Australia, and resell them in Taiwan through Jason Tech, have been for the purpose of a migration outcome, and not to obtain a substantial ownership interest in eligible business in Australia. It follows that Mr Lu does not satisfy s 134(2)(b) and (c) of the Act. I note that there was no evidence that Mr Lu was proposing to seek the relevant interest and participate in any business in Australia apart from G Ping.
Should the Tribunal exercise its residual discretion and not cancel the visa?
33. In Kim v Minister for Immigration and Multicultural and Indigenous Affairs at 310Kiefel J said:
Whilst the discretion given in s 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]
34. I make the following findings, on the evidence, which are relevant to the question of whether I should exercise the residual discretion.
35. Mr Lu has severed the links with the Taiwanese business of which he was part-owner, Yu Chun Industry Co, Ltd. It had its registration annulled on 28 November 2003, and Mr Lu's status as a person responsible for water treatment for that company was "annulled" on 14 April 2004. That company sold various pieces of machinery in November 2003 and January 2004.
36. Mr Lu has had certificates awarded to him in October and November 2005 which recognised that he has satisfied the English language and knowledge responsibilities and privileges requirements for Australian citizenship. He, Ms Wang and their children moved to Australia around February 2006.
37. Mr Lu's brother died in May 2006 and Mr Lu has had to take care of his elderly, ill mother, who was distressed by her son's death. Some of his mother’s medical records were in evidence. I accept Mr Lu's evidence that Chinese people place obedience to parents at the top of the list of priorities.
38. Finally, Mr Lu and Ms Wang sold their house in Taiwan in late 2006 and had intended to buy a house in Australia but have not done so because of the uncertainty following cancellation of the visas.
39. Although I am sympathetic to Mr and Mrs Lu's desire to give their children what they believe to be the best opportunity for an education where the children will attain good English language skills, I am not persuaded that even if Mr Lu were permitted more time, he would "undertake what was required of" him in terms of s 134 of the Act. On the evidence, I infer that Mr Lu has to earn money undertaking some business activity in Taiwan which is within his area of expertise, in order to support his family who are living in Australia. On the evidence, I see no prospect of his being in a position to satisfy the requirements set out in the legislation or that he has such an intention in the future.
40. In view of my findings, I am satisfied that the preferable decision in this case is that Mr Lu's Business Skills (Migrant) (Class AD) (Subclass 127 - Business Owner) visa be cancelled.
Will the cancellation of the visas of each of Ms Wang and the three children result in extreme hardship to each of them?
41. If a business skills visa is cancelled under s 134(1) of the Act, then I must cancel the visas of family unit holders: s 134(4) of the Act. However, under s 134(5) of the Act, I must not cancel family unit visas held if cancellation would result in extreme hardship to the person.
42. Ms Wang and the three children each gave oral evidence. Ms Wang has been living in Sydney since 2006 and cares for her three children alone when Mr Lu is in Taiwan. The only employment she undertakes is the work done for G Ping. Mr Lu provides for her financial support from Taiwan. Ms Wang has no relatives in Australia, other than her children, though she now has some friends whom she met in Chinatown. She had previously told the Department, through her migration agent, that if her visa was cancelled she would face:
huge financial pressure in association with all four children’s education in Australia, and to deal with the subsequent readjustment of our lives.
43. There was really no evidence that Ms Wang would suffer extreme hardship if her visa were cancelled. I accept that if she and Mr Lu wish to continue educating their children in Australia that may be much more expensive because they will have to pay higher education fees. That is their choice. The purpose of the business skills visa is not to provide subsidised education for the children of a visa holder but rather to attract migrants to utilise their business skills in a business in Australia, to the benefit of this country.
44. Mr Lu and Ms Wang emphasised that it would be very hard for the children to return to Taiwan and to the education system there after being absent for two years. They emphasised the difficulty the children would have studying literary Chinese. They said that the Taiwanese education system was very competitive and they did not wish to have their children under such pressure to achieve academically. The children said that they did not retain contact with friends in Taiwan and would find it difficult to resume their education. They are happy in Australia and do not want to return to Taiwan.
45. I accept that the children will have to readjust to a different education system if they return to return to Taiwan. However, I find that the older two boys in particular have had difficulty learning English and being educated in English, although they undertook intensive English language courses. I do not accept that any of the children will suffer “extreme hardship” as specified in s 134 (5) of the Act, if the visas are cancelled.
46. Apart from the cost of educating their children in Australia being higher, there is no evidence that the cancellation of the visas will cause economic hardship. In any case, Mr Lu is earning his income in Taiwan which will be unaffected by my decisions in this matter.
Was proper notice given of the intention to cancel the visas?
47. There was a complaint in the statement of facts and contentions, filed on behalf of Mr Lu and the family unit visa holders, that the issuing of the NOICCs sent to them were untimely and unfair, that procedural fairness had not been complied with and that the cancellation was procedurally unfair and wrong. The complaint seems to have arisen because of a sense of unfairness that the three year period within which the notice had to be given would have expired on 26 February 2007, after which the visa could not have been cancelled (see s 134(9) of the Act), and the notice was sent out on 19 February 2007, less than a week before. The notice was also given during the holiday period for Chinese New Year.
48. I did not understand this argument to be pressed at hearing. In any event, I find that the evidence discloses that the requirements of s 135 were complied with. The NOICCs were sent to the representative of Mr Lu and his family members on 19 February 2007. On 12 April 2007 the agent responded, making representations and providing supporting documents. The visas were cancelled on 27 July 2007.
CONCLUSION
49. As I am satisfied that the correct or preferable decision is to cancel Mr Lu's business visa, the reviewable decision is affirmed.
50. As I am also not satisfied that Ms Wang or any of the three children will suffer extreme hardship if the visa each holds is cancelled, I affirm the reviewable decisions to cancel their family unit visas.
DECISIONS
Proceedings 2007/3912
The reviewable decision to cancel Mr Chun Hou Lu’s Business Skills (Migrant) (Class AD) (Subclass 127 - Business Owner) is affirmed.
Proceedings 2007/3913
The reviewable decision to cancel Ms Shao Hwa Wang’s family unit business skills visa is affirmed.
Proceedings 2007/3915
The reviewable decision to cancel Chi Yu Lu’s family unit business skills visa is affirmed.
Proccedings 2007/3916
The reviewable decision to cancel Kan Lu Lu’s family unit business skills visa is affirmed.
Proceedings 2007/3917
The reviewable decision to cancel Kan Lin Lu’s family unit business skills visa is affirmed.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly, Senior Member.
Signed: ……[sgd] ………..
Steven Mulipola, Associate
Date of hearing: 12 May 2008
Date of decision: 25 September 2008
Representative for the Applicant: All Rights Migration Services
Solicitors for the Respondent: Clayton Utz
0
3
0