McAlpin and Minister for Immigration and Citizenship
[2008] AATA 109
•8 February 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 109
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W200600276
GENERAL ADMINISTRATIVE DIVISION ) Re DONAL JAMES McALPIN Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mr S Penglis, Senior Member
Mr W Evans, MemberDate8 February 2008
PlacePerth
Decision The Tribunal sets aside the decision under review and, in substitution therefor, decides that the applicant’s visa not be cancelled under s 134(1) of the Migration Act 1958 (Cth).
...........[Sgd Mr S Penglis]......
Senior Member
CATCHWORDS
Immigration – cancellation of business skills visa – principles to be applied in determining whether the applicant has made genuine efforts for the purposes of s 134 – principles governing the exercise of the general discretion for the purposes of s 134.
LEGISLATION
Migration Act 1958 (Cth) – s 134
Cases
Abbu and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 898
Gouw v Minister for Immigration [2005] FMCA 1111
Harsono and Minister for Immigration and Multicultural Affairs [2007] AATA 64
Hook and Minister for Immigration and Citizenship [2007] AATA 1798
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
Koosasi and Minister for Immigration and Citizenship [2007] AATA 1311
REASONS FOR DECISION
8 February 2008 Mr S Penglis, Senior Member and
Mr W Evans, MemberBACKGROUND
1. The Tribunal has before it an application to review a decision made by a delegate of the respondent on 8 August 2006 cancelling the applicant’s business skills (Subclass 127 business owner) visa.
2. That visa was granted to the applicant on 25 March 2003.
3. The applicant first entered Australia on 14 April 2003 but left in November 2003 to take up an appointment in Malawi, Africa thence Tanzania where he now resides.
4. On 28 July 2005 the applicant returned to the respondent a completed 24-month survey wherein the applicant advised:
(a)that in October 2002 he had invested in three businesses in Australia, namely Audio Torque Pty Ltd (renamed in October 2004 Gilete Stone Pty Ltd [Gilete Stone]), Gilete Hill (Gilete Hill) and Duncanson Pty Ltd (Duncanson);
(b)Duncanson was an “investing holding company” through which the applicant held his interest in Gilete Stone;
(c)that through Duncanson, the applicant had invested $100,000 to acquire 44% of the issued share capital in Audio Torque and had commenced working as its General Manager on 28 April 2003; and
(d)he had in July 2005, subsequently sold his shareholding in Gilete Stone and purchased a 10% shareholding in Gilete Hill for $100,000.
5. On 16 June 2006, in response to a Notice of Intention to Cancel the applicant’s visa, the applicant, through his migration agent, provided lengthy written submissions as to why his visa should not be cancelled.
6. In deciding to cancel the applicant’s business skills visa, the delegate of the respondent stated that he was not satisfied that the applicant:
(a)had obtained a substantial ownership in an eligible business in Australia;
(b)was utilising his skills in actively participating at a senior level in the day-to-day management such business;
(c)had made or intended to make genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his skills in actively participating at a senior level in the day-to-day management of that business.
7. With respect to the issue of “genuine efforts”, the Record of Decision includes the following as reasons for the delegate of the respondent not being satisfied that “genuine efforts” have been demonstrated:
§ “It is noted that Mr McAlpin has not been in Australia since December 2003. Information on file indicates that he left Australia to pursue an employment contract opportunity in Tanzania. This period of absence from Australia is one factor that leads me to consider that Mr McAlpin has not made and does not intend to make a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.
§“The fact that Mr McAlpin resigned from a claimed management role within his Australian business to accept an overseas employment contract is another factor which leads me to consider that Mr McAlpin has not made, and intends to make, a genuine effort to utilise his skills in actively participating in the day-to-day management of an eligible business in Australia;”
§“Additionally, he has not provided evidence of any property that has been bought in Australia or preparations to reside in Australia permanently. This lack of evidence raises concerns about his commitment to live permanently in and manage a business in Australia in the near future. This is another factor which leads me to consider that Mr McAlpin has not made, or intends to make, a genuine effort to utilise his skills and actively participate in the day-to-day management of an eligible business in Australia”.
8. The applicant’s visa was terminated by decision dated 8 August 2006, being the reviewable decision the subject of this application.
THE FACTS
9.The majority of the facts of the matter are not contentious.
10. In 1998 the applicant purchased a farm in the Centenary District in Zimbabwe. The farm, known as “Strathaird”, was a highly productive and intensive tobacco and mixed agriculture unit, comprising 1,252 hectares. Strathaird provided the applicant and his family with both a home and a business. It also provided employment for over 105 personnel and support for a further 350 dependants living on the farm.
11. In September 2000 the applicant received notice of the Zimbabweian Government’s intention to compulsorily acquire Strathaird.
12. In September 2001 the applicant was forced to cease all farming operations.
13. The applicant and his family continued to reside on Strathaird until February 2002 when they moved to the relative safety of his parents’ house in Harare.
14. As a consequence of what had occurred; the family having lost the farm and the applicant having lost his lifetime’s work, the applicant was left “feeling alienated, bitter and depressed”. He therefore decided to find a safer place in the world to relocate himself and his family, free from political violence. He “thoroughly investigated all options available including Australia, New Zealand and South Africa”.
15. “After considerable deliberation” the applicant chose to relocate to Australia “because it had many cultural and climatic similarities and had an expanding economy. I also had family who were Australian citizens.”
16. The applicant was assisted in his family’s relocation to Perth by his brother-in-law, Craig Hardman. According to the applicant:
“Craig was involved in the Gilete Group Pty Ltd (“Gilete Group”), which introduced me to the Directors of Audio Torque Pty Ltd (“Audio Torque”). The Gilete Group acted as a facilitator introducing migrant businessmen to local Perth businesses and assisted in identifying mutually beneficial business opportunity in Western Australia”.
17. In July 2002, Hardman forwarded to the applicant several business proposals, including a due diligence report on a business in Rockingham, called Audio Torque. Audio Torque seemed a good prospect to the applicant as it required an investor that was “a participating investor in the management of the company as opposed to a passive investor”.
18. The applicant wanted a “hands-on” and strategic role in a company in Australia; he did not want merely a passive investment. He also wanted to draw a salary and be involved in the day-to-day management of the business “where I could be sure that my investment was secure”. In the applicant’s own words
“As I had limited funds available, due the forced acquisition of my farm, I wanted to earn a direct income from my investment and initially not have to be concerned with living and general expenses. I also felt that I needed to be kept permanently occupied as I was not only feeling the anxiety and strain of immigrating to a new country while still feeling mildly depressed and angry, having just lost a lifetime’s work in Zimbabwe”.
19. In or about September 2002, the applicant forwarded $100,000 to the Gilete Group through Duncanson. This resulted in the applicant receiving 80 A-Class Shares in a company then called Audio Torque Pty Ltd. Although the documents were not before the Tribunal, the applicant said “that there was a call-option on the shares which can be exercised after three years.”
20. Within two weeks of the applicant and his family arriving in Perth in mid-April 2003, the applicant started work as the Manager of the Audio Torque business in Rockingham, a position that he maintained until November 2003.
21. In that capacity the applicant directly managed four employees, three of whom installed audio equipment in vehicles and the other who installed home theatre and made any electrical modification in houses. The applicant was also responsible for co-ordinating and monitoring staff training, strategic planning, improving business processes, developing and implementing various policies, book keeping and maintaining the payroll books. He was also involved in marketing.
22. In or about October 2003, the applicant received an offer to go to Africa to start a salaried position as an Operations Manager at an international tobacco company in Malawi. Because of this offer the applicant’s evidence was as follows:
“The opportunity was very tempting given my emotional state at the time and my general anxiety that I was not being a good provider for my family as I was drawing only a small salary from my position as manager. I felt that I needed to secure additional funds to ease my financial burden after having lost everything in Zimbabwe. Given the circumstances, I eventually accepted the offer”.
23. The applicant intended to work only for a few years in Africa so as to save enough money to then return to Australia permanently and invest further in a local business. He also wanted to secure enough funds to purchase a house in which his family could live in Perth when they eventually moved back. In this regard the applicant gave evidence in the following terms:
“I still have that plan and intend to come back to Australia with my family within two years to settle permanently and invest further funds in a local business”.
24. Before the applicant left for Africa he had a meeting with a migration agent whom he said informed him that “as long as I continue to have a vested business interest in Australia and fulfil my management role then my visa would be secure. I was led to believe that other migrants were living off shore and it was within my rights as an Australian permanent resident to work off shore”.
25. Whilst in Africa, the applicant maintained an involvement with Audio Torque Pty Ltd. The nature and extent of that involvement was the subject of considerable controversy before the Tribunal.
26. Sometime about the middle of 2004, the directors of Audio Torque Pty Ltd (including the applicant) agreed in principle to sell the business.
27. In or around October 2004 the shareholders of Audio Torque Pty Ltd resolved to change the company’s name to Gilete Stone Pty Ltd, dispose of the business of Audio Torque and go into the business of developing property instead. In this regard the applicant said:
“One of the reasons we decided to sell Audio Torque was that my role in the company had naturally changed due to my move to Africa. Another factor was that Audio Torque was not as profitable as initially expected, in part because it was difficult to find a replacement general manager”.
28. As to the reason for Gilete Stone Pty Ltd going into the business of developing property, the applicant said:
“ He would not require as much of a direct role in managing the day-to-day affairs of the business as was the case with Audio Torque. Most of the work would involve engaging contractors (such as town planners, civil engineers and environmental consultants etc) in obtaining approvals of various stages of the development process. This in effect would be a “time line approach” which did not require “day-to-day” management structure. Consequently it was decided that property development would be a more effective business model to allow for my continued involvement in the management of the business offshore.
As an offshore business partner I also felt secure having a business dealing with a tangible asset such as land. I was told at the time that business prospects in property were, and in fact still are, very favourable. I could not afford to risk the little financial resources that I had on a more speculative basis which entailed more risk to my capital.”
29. Gilete Stone’s first venture was in a property development in Roleystone, Western Australia. The company had entered into a joint venture to subdivide a property into 17 lots. The Western Australian Planning Commission conditionally approved the subdivision in April 2003 and the subdivision was costed in October 2004.
30. The company did not ultimately proceed with the development as additional conditions requested by the landowner were not agreeable to it.
31. Despite the project not proceeding, the applicant decided to continue his business involvement with Paul Ogilvie.
32. Accordingly, in March 2005 the applicant agreed to dispose of his shares in Gilete Stone in return for a 10% shareholding in Gilete Hill Pty Ltd, (later renamed Dividing Hill Pty Ltd). This investment change was effected in July 2005 and the applicant received a share certificate of 158 ordinary class shares in the company. The Applicant had also negotiated a Put Option on the shares valued at $100,000.
33. One of that company’s interests was a contract entered into in November 2004 to purchase a property in Baldivis for the purpose of subdividing it into rural lots. This was referred to as the Hillview Private Estate project. Settlement under the contract for sale was due on 1 June 2005. Although he was not a shareholder until July 2005, there is evidence before the Tribunal to suggest that the applicant had been interested in the Hillview Private Estate project since late 2004.
34. In any event, subsequent to becoming a shareholder in the company, to adopt the words employed in the applicant’s Statement of Facts and Contentions:
“The applicant then participated in the on-going monitoring of the Hillview Private Estate project. The applicant kept up to date with the business, queried and assessed the latest information particularly the rezoning of the land, researched long term trends, and subsequently provided input where he could on the direction of the business”.
35. What happened then is accurately summarised in the applicant’s Statement of Facts and Contentions as follows:
“44.Dividing Hill contracted with a management company named DEVX Management Group (‘DEVX’) so as to assist in project management. DEVX had managed quite a number of projects involving subdivisions of property for other companies and its director was Paul Ogilvie. DEVX was a separate corporate entity from Dividing Hill but had a controlling interest in the company.
45.This was the usual practice amongst all companies DEVX had contracted with. DEVX acted as a facilitator, matching businessmen with director groups and identifying business opportunities. Once an opportunity was found, DEVX’s role was then to assist the company in obtaining the necessary development approvals, finance and contractors.
46.On 28 May 2005, the conceptual plan of subdivision of the Baldivis land was forwarded by DEVX’s town planners, Greg Rowe & Associates, to the City of Rockingham (‘the City’). The City responded, on 10 July 2005, to the conceptual plan advising that the submission be expanded to see how the subject landholding could support lot sizes below 1 hectare.
47.DEVX also contracted Dennis, Price and Miller, Consulting Civil Engineers, to prepare a report on the servicing and enduring issues associated with the Baldivis development. The report was finalised on 12 October 2005.
48.On 7 November 2005, Greg Rowe & Associates, on behalf of DEVX, lodged a rezoning Application and Subdivision Guide Plan with the City.
49.However, there were delays in getting approval from the City to develop the land. The delays were caused by the City’s refusal to subdivide the proposed lot below its minimum 2.0 hectare standard, which was outlined in their letter to DEVX’s town planners dated 27 February 2006. The City deemed the land incapable of supporting any increased density and that the 2.0 hectare lots were to be subject to conditions. An environmental assessment was made by ENV Australia Pty Ltd on 27 April 2006 recommending that an environmental buffer be established on the subdivision to reduce pesticide drift from a neighbouring farm. At the date of cancellation of the visa, the development proposal was still going through the approvals process with the City.
50.Shortly after, in or around March 2006, the Applicant decided to look for other business opportunities due to the delays in getting developmental local government rezoning approval for the Baldivis subdivision. The Applicant exercised his put option on his $100,000.00 stake in Dividing Hill.
51.The Applicant’s funds, however, were not released until September 2006 as Dividing Hill’s consulting company DEVX (Gilete CSI Pty Ltd), who had the corresponding call option, did not exercise the option until that time due to financial difficulties it was experiencing and was in administration. The Applicant remained a shareholder of Dividing Hill until September 2006.
52.Between April and August 2006, the Applicant had a number of telephone conferences and emails with Mark Goldenberg from Concentric Private Wealth Management Pty Ltd (‘Concentric Group’) and Key Migrant Investments (‘KMI’) (Craig Hardman, the Applicant’s brother in law), planning to invest in a second property development company.
53.KMI had formed a strategic alliance with the Concentric Group and was in the business of acquiring blocks of land, developing them and selling them to clients of the Concentric Group who were acquiring investment properties.
54.The Concentric Group consisted of a number of independent companies providing private wealth management services to clients.
55.The Applicant intended to have a majority shareholding interest in the development company and make decisions in respect of the risk. Such decisions would, for example, be on whether to pre-sell houses prior to construction in order to reduce risks or to sell post-construction to maximise return. The Applicant intended to develop 2-4 properties.
56.On 24 May 2006, in anticipation of his investment in a second property development company, the Applicant transferred a further $60,000.00 into Australia. This amount was in addition to the anticipated release of the Applicant’s $100,000 stake in Dividing Hill. The Applicant intended to reinvest the total amount of around $160,000.00.
57.The Applicant researched a number of development sites and chose to be involved in a proposed property development in the Joondalup area called ‘Ashby Vineyards’. This made a project link for around 16 months, as titles would be available in October 2006 with a 9-month home construction timeframe.
58.From advice the Applicant received from the Concentric Group, Profit & Loss Statements were prepared for the development based on construction of 2-4 houses.
59.In July 2006, the Applicant agreed in principle to forward the sum of $150,000.00 to acquire a 49% share in a property development company called Green Property Development Pty Ltd (‘Green Property’). A tentative settlement date was proposed for 1 August 2006 and a proposed Share Subscription Agreement was drafted.
60.The Applicant’s investment in Green Property would offer a better return of around 12-15% as opposed to a 5% return with Dividing Hill. However, unlike Dividing Hill, the Applicant’s capital investment was not guaranteed and was at risk.
61.As part of his due diligence enquires (sic), the Applicant obtained advice from his accountants, Aylmore & Associates, on how to best structure his investment in Green Property. He requested advice on whether his investment should remain via Duncanson, as an individual, in joint names with his wife, or via a new company entity.
62.As the Applicant’s $100,000.00 stake in Dividing Hill had not been paid out by 1 August 2006, settlement of the purchase of his share in Green Property was postponed pending release of his funds. Later in mid-August 2006, the Applicant received Notice of Cancellation of his visa from the respondent. At the date of cancellation of his visa the Applicant still had an ownership interest in Dividing hill. After receiving the Notice of Cancellation, the Applicant subsequently decided to put on hold his investment in Green Property until his application to the Administrative Appeals Tribunal had been heard and his visa status in Australia clarified.
63.The Applicant’s stake in Dividing Hill was finally released on 1 September 2006. The Applicant maintains $100,000.00 invested in a term deposit in Australia.
64.The Applicant fully intends to proceed with his investment in Green Property upon confirmation of his visa status in Australia”.
The Relevant legislation
36. Section 134(1) of the Act provides as follows:
“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.”
37. Section 134(2), which s134(1) is expressly subject to, provides as follows:
“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.”
38. In determining whether a person has made a “genuine effort” for the purposes of s134(2) of the Act, s134(3) provides as follows:
“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;
(j)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(k)the reasons why the person no longer holds the interest or participates in the management (as the case requires).”
39. Section 134(10) of the Act provides that an “ownership interest” in relation to a business means:
“An interest in the business as:
(a) a shareholder in a company that carries on with business; or
(b) a part owner in a partnership that carries on with business; or
(c) a sole proprietor of the business;
Including such an interest held indirectly through one or more interposed companies, partnerships or trusts.”
40. Section 134(10) of the Act further provides as follows:
“Eligible business means that 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 international markets;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or provisions of services that would otherwise be imported into Australia;
(e)the introduction or new or improved technology to Australia;
(f)an increase in commercial activity and the competitiveness of the sectors of the Australian economy.”
41. In addition to s134(10) of the Act, in determining whether a person has made a “genuine effort” within the meaning of s134(2) of the Act, it is permissible to have reference to relevant departmental policy guidelines. As at the date of the reviewable decision, Migration Series Instruction 133, paragraph 4.5.1, relevantly provides as follows:
“… decision makers may take account of these notes to guide them in interpretation …
a.business proposal which is considered genuine, realistic and achievable;
b.formal contract with partners or joint venturers;
c.written evidence of details of consultations with at least three business advisers (accountant, lawyer, bank/financial institutions, State/Territory government business development office, Austrade, business/trade associations);
d.physical presence in Australia for more than six months since first arrival as a Business Skills migrant;
e.transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years …
f.minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for the loss of ownership are also relevant.
g.minimum A$100,000 business activity as indicated by turnover. This may include other business activity not considered “eligible business” but cannot include passive investment, eg purchase of shares.
h.failure to comply with a notice for information under s137, ie mandatory monitoring of Australian address and return of survey forms.”
42. In addition, Migration Series Instruction 133, paragraph 4.5.2 provides as follows:
“While failure to meet one or more of these indications may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled. The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) in reaching a decision on that basis. For example, while the factors in 4.5.1 above may be indicative of “genuine effort”, lack of them will not necessarily be decisive. The decision maker must decide, within the ordinary meaning of the words, whether the visa holder has made a “genuine effort”. The decision maker may still decide not to exercise the discretion empowered to cancel the business visa even if it is assessed that no genuine effort has been made”.
43. For the sake of completeness, the Tribunal notes that, subsequent to the date of the reviewable decision, Migration Series Instruction 133 was replaced by PAM 3: Act – Visa Cancellation – Business Visas, which was issued on 15 March 2007.
Audio Torque Pty Ltd
44. Counsel for the respondent conceded, rightly in the opinion of the Tribunal, that the Audio Torque business was an “eligible business” within the meaning of the Act. However, whether the applicant held “a substantial ownership interest” in the same was a matter hotly disputed before the Tribunal.
45. In short, Audio Torque Pty Ltd was a company sponsored by the Gilete Group of companies and the respondent urged the Tribunal to follow other decisions of the Tribunal (such as Harsono and Minister for Immigration and Multicultural Affairs [2007] AATA 64 and the decisions referred to therein at paragraph 46) and conclude that the applicant’s holding of A-class shares did not constitute a “substantial ownership interest”. On the other hand, Counsel for the applicant urged the Tribunal to apply the same reasoning as was applied by the Tribunal in Abbu and Minister for Immigration and Multicultural Affairs [2006] AATA 898.
46. For the reasons which follow, it is not necessary for the Tribunal to make any finding in this regard and, having regard to the apparently differing views which members of this Tribunal have adopted in the decisions referred to, it is not appropriate for the Tribunal in this case to volunteer a view either way.
47. The reason why it is not necessary in this matter to form a view is that, by the material date under consideration, the shares in Audio Torque Pty Ltd (then called Gilete Stone Pty Ltd) had been sold and, as accepted by Mr Solomon, Counsel for the applicant, the true matter for determination before the Tribunal was whether, as at the relevant date, the applicant had made or intended to make genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to use his skills in actively participating at a senior level in the day-to-day management of that business. In other words, as Counsel for the applicant accepted, even if the applicant had previously obtained a substantial ownership in an eligible business in Australia through his shareholding in Audio Torque Pty Ltd and was utilising his skills in actively participating at a senior level in the day-to-day management of that company’s business, that had ended prior to the relevant date.
Gilete Stone Pty Ltd and Dividing Hill Pty Ltd
48. Whether or not Gilete Stone Pty Ltd, after its disposal of the Audio Torque business, carried on a business within the meaning of s 134 of the Act, and whether or not Dividing Hill ever carried on business for the purpose of the Act were matters keenly contested before the Tribunal. In the end, they are matters in respect of which the Tribunal need not and does not make any finding as, for the reasons which follow, even if such matters were resolved in favour of the applicant, the applicant would not establish an entitlement pursuant to s 134(1) of the Act by reason of him failing to satisfy the requirement of utilising his skills in actively participating at a senior level in the day-to-day management of either of those businesses.
49. Whilst there is no doubt that, as the Manager of the Audio Torque business during the period mid-April 2007 to November 2007, the applicant utilised his skills in actively participating at a senior level in the day-to-day management of that business, the position is less clear with respect to the period from November 2003 to about October 2004 when it was resolved to dispose of that business (the nature and extent of the applicant’s involvement during that period being, as the Tribunal has already noted, the subject of considerable controversy before the Tribunal).
50. However, whatever the position might have been during that time, it is clear that from in or about October 2004 until the disposal of his shareholding in Gilete Stone in 2005, the applicant was not utilising his skills in actively participating at a senior level in the day-to-day management of the company’s operations and that, upon becoming a shareholder of Dividing Hill, he did not utilise his skills actively participating at a senior level in the day-to-day management of that company’s operations, which remained the position as at 8 August 2006, being the date of the reviewable decision. One need go no further than the applicant’s own evidence, as summarised in the applicant’s Statement of Facts and Contentions, to conclude that the applicant’s involvement with Gilete Stone’s Roleystone Development and then Dividing Hills’ Baldivis Development was nothing more than the active participation of an interested shareholder. The applicant was not a director of either company. After resigning as Manager of the Audio Torque business, he ceased being an employee of that company and was never an employee of Dividing Hill.
51. The applicant’s involvement once he left Australia was to attend, when he could, monthly management meetings at which the applicant appears to have been well informed of what was going on, assessed the latest information, asked both informed and relevant questions and, based on this, subsequently provided strategic input where he could. When, because of the time difference, the applicant was unable to attend such meetings (which was frequently the case), the applicant provided input in the form of email comments.
52. The Tribunal is not satisfied that such contribution to the operations of the company constitute active participation at a senior level in the day-to-day management of the companies within the meaning of s 134(1)(b) of the Act. Indeed, the Tribunal considers the applicant’s participation to fall well short of that required by s 134(1)(b) of the Act.
53. For the sake of completeness, the Tribunal notes that the extent to which this criteria can be satisfied by a person residing primarily off-shore and to what extent, if any, the Act requires active participation in Australia was raised by the respondent as part of its case before the Tribunal. Again, this is an issue which need not be resolved as it is the nature of the applicant’s contribution, not where the contribution was made, that is determinative of this matter of itself.
54. It therefore follows that on 8 August 2006, being the date of the reviewable decision, the ground for cancellation of a visa specified in s 134(1)(b) of the Act was established.
55. It therefore follows that the Tribunal must now consider whether it is satisfied that the applicant has made a “genuine effort” within the meaning of s 134(2)(b) of the Act.
Genuine Efforts
56. An issue which arose during the course of the hearing was to what extent, if at all, the Tribunal could properly have regard to steps taken by the applicant as evidence of “genuine efforts” on the part of the applicant for the purpose of the Act should the Tribunal find that such steps, even if they had been successful, would not have resulted in the applicant utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business in which he had obtained a substantial ownership interest.
57. This issue has been recently considered by the Tribunal in Hook and Minister for Immigration and Citizenship [2007] AATA 1798. The Tribunal notes that the solicitors and counsel appearing in this matter on behalf of the applicant also represented the applicants in the Hook matter, and that the common respondent to both matters was represented by the same solicitor and counsel in both matters.
58. In Hook, the issue was analysed and resolved by the Tribunal in the following way, with which we respectfully agree;
“36. Pursuant to s 134(2) of the Act, if the Tribunal is satisfied that the primary applicant has fulfilled the requirements specified in paras (a), (b) and (c) of that subsection, his visa “must not” be cancelled under s 134(1) of the Act.
37. The Tribunal has found that the primary applicant did not, at any material time, actively participate at a senior level in the day-to-day management of Gilete Burswood/Burswood Investments. The question thus arises, for the purposes of
s 134(2) of the Act, whether the Tribunal is satisfied that he made a “genuine effort” to do so, within the meaning of para (b) of s 134(2).
38. Section 134(3) of the Act lists (non-exhaustively) matters that may be taken into account in determining whether a person has made a “genuine effort” for the purposes of s 134(2). Departmental policy guidelines regarding, inter alia, the requirements specified in s 134(2) of the Act are set out in PAM 3 : Act - Visa cancellation – Business visas (which has replaced MSI : 133: Visa cancellation under Subdivision G : Cancellation of business visas), issued on 15 March 2007, which relevantly states:
‘9.2 Genuine effort
Under policy, genuine effort means that there should be evidence that the visa holder has exerted themselves to get into business in Australia or be involved in the management of the business at a senior level on a day-to-day basis. There is also the expectation that the visa holder will continue to make sustained and continued efforts to meet visa requirements throughout the 3 year period. If the visa holder claims to be seeking to establish a business that would not come to fruition until after the 3 year period, it is expected that the visa holder be able to demonstrate progress, eg evidence of business plans, meetings and negotiations.
A business visa holder who has not met their visa requirements must demonstrate that a ‘genuine effort’ has been made to establish an eligible business in Australia. Section 134(3) lists some of the factors that may be considered …’
It seems to the Tribunal that the matters listed in s 134(3), and the policy guidelines in relation thereto, are, for the most part, of greater relevance to the issue of genuine effort to obtain a substantial ownership interest in an eligible business (para (a)) than to the issue of genuine effort to utilise skills in actively participating at a senior level in the day-to-day management of that business (para (b)).
39. The phrase “genuine effort”, in s 134(2) of the Act, is an ordinary English phrase and should be given its ordinary meaning. In the Tribunal’s opinion, the appropriate meaning of that phrase for present purposes, having regard to dictionary definitions, is: endeavour or exertion which is sincere and real: see the Macquarie Dictionary; The New Shorter Oxford English Dictionary.
40. The respondent submitted that efforts which “cannot realistically satisfy” the matters referred to in s 134(2) of the Act cannot be said to be genuine efforts, for the purposes of that subsection. It was submitted that the primary applicant “was at all times aware of his obligations to actively participate in the day-to-day management at a senior level” and that his “limited involvement … could not be reasonably expected to satisfy the senior management criteria”. It follows, the respondent submitted, that the primary applicant’s relevant activities do not constitute a “genuine effort”, for the purposes of para (b) of s 134(2) of the Act.
41. The question whether, for the purposes of s 134(2) of the Act, a person has made a “genuine effort” in relation to the matters referred to in that subsection raises, in the Tribunal’s opinion, both subjective and objective considerations. The essential issue is whether the person has made a relevant effort which is genuine – that is, an effort which has been made sincerely and which is real and not in the nature of a pretence or a sham.
42. The Tribunal accepts the proposition that relevant activities undertaken by a person, which could not satisfy the matters referred to in paras (a) and (b) of
s 134(2) of the Act, and which the person knew, or had good reason to know, could not satisfy those matters, will not constitute a “genuine effort”, for the purposes of s 134(2).
43. The Tribunal, however, does not accept the proposition that relevant activities undertaken by a person, which could not satisfy the matters referred to in paras (a) and (b) of s 134(2) of the Act, but which the person did not know, or have good reason to know, could not satisfy those matters, will necessarily not constitute a “genuine effort”, for the purposes of s 134(2). In the Tribunal’s opinion, where a person has undertaken substantial activities in a sincere endeavour to satisfy the matters referred to in paras (a) and (b) of s 134(2), in the honest and reasonable belief that the activities undertaken have satisfied those matters, that person has made a “genuine effort”, within the meaning of s 134(2), to satisfy those matters, notwithstanding that the activities undertaken could not have satisfied those matters.”
59. On the basis of the evidence before it, the Tribunal is satisfied that:
· in initially maintaining his shareholding in Gilete Stone, the applicant honestly believed that he was maintaining a substantial ownership interest in an eligible business in Australia;
· by acquiring a 10% shareholding in Dividing Hill, the applicant honestly believed that he was acquiring a substantial ownership interest in an eligible business in Australia;
· the primary applicant’s activities in contributing to the operations of Gilete Stone (upon his return to Africa) and subsequently in Dividing Hill were undertaken by him in the honest belief that he was thereby actively participating at a senior level in the day-to-day management of those businesses in satisfaction of the relevant requirement of his visa;
· those activities were real and substantial and were not in the nature of a pretence or a sham;
· the applicant had been advised by a registered migration agent that:
“As long as (the applicant) continued to have a vested business interest in Australia and fulfilled (his) management role then (his) visa would be secure. (He) was led to believe that other migrants were living off-shore and that it was within (his) rights as an Australian permanent resident to work off-shore”.
· the applicant neither knew nor had good reason to know that any of the views that he honestly held were wrong.
60. In addition to the above must be added the fact that, whilst he first moved to Australia, the applicant did in fact have a substantial ownership interest in an eligible business in Australia in which he was utilising his skills in actively participating at a senior level in the day-to-day management (ie the Audio Torque business).
61. The Tribunal therefore is satisfied that the applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business.
62. The Tribunal is also satisfied that the applicant intends to continue to make such genuine efforts. In this regard the applicant’s evidence (which the Tribunal accepts) was as follows:
“63.Shortly after, in or around March 2006, I decided to look for other business opportunities due to the delays in getting developmental approval for the Baldivis subdivision. I exercised my put option on my $100,000.00 stake in Dividing hill.
64.However, my funds were not released until September 2006 as Dividing Hill’s consulting company DEVX (formerly Gilete CSI Pty Ltd), who had the call option, did not exercise the option until that time due to financial difficulties it was experiencing and was in administration. I remained as a shareholder of Dividing Hill until 1 September 2006.
65.Between April and July 2006 I had a number of telephone conferences with both Mark Goldenberg from Concentric Private Wealth Management Pty Ltd (‘Concentric Group’) and my brother in law Craig Hardman planning to invest in a second property development company.
66.My brother in law’s company had formed a strategic alliance with the Concentric Group and was in the business of acquiring blocks of land, developing them and then selling them to clients of the Concentric Group who required investment properties.
67.The Concentric Group consisted of a number of independent companies providing private wealth management services to clients. Each investor would typically have a majority shareholding interest in a development company and make decisions in respect to the risk. For example, whether to pre-sell houses prior to construction in order to reduce risk or to sell post construction to maximise return. Participants also chose the number of houses they developed and the loan to value ratios.
68.On 24 May 206, in anticipation of my investment in a second property development company, I transferred a further $60,000.00 into Australia. This amount was in addition to the anticipated release of my $100,000.00 stake in Dividing Hill. I intended to re-invest a total of around $160,000.00.
69.I researched a number of development sites and chose to be involved in a proposed property development in the Joondalup area called “Ashby Vineyards”. This Ashby Vineyards site was to the north of the city of Joondalup overlooking the Joondalup lakes. The estimated project length was around 16 months, as titles would be available in October 2006 with a 9 month home construction time frame. From advice given by Concentric Group profit and loss statements were prepared for the development based on construction of two to four houses.
70.In July 2006 I agreed in principal (sic) to forward the sum of $150,000.00 to acquire a 49% share in a property development company called Green Property Development Pty Ltd (‘Green Property’). A tentative settlement date was proposed for 1 August 2006.
71.This business investment offered a better return of around 12% to 15%, as opposed to a 5% return with Dividing Hill. However, unlike Dividing Hill, my capital investment was not guaranteed and was at risk.
72.Part of my due diligence enquires (sic) involved obtaining advice from accountants, Aylmore & Associates, on how best to structure my investment in Green Property. I requested advice on whether my investment should remain via Duncanson, as an individual, in joint names with my wife or via a new company entity.
73.I was, and still am, keen to proceed with Green Property as I want to use the knowledge and skills in property development that I had obtained during my time with both Gilete Stone and Dividing Hill.
74.I also decided to invest with Green Property as my brother in law Craig Hardman was involved in the company and I trusted him to ensure that my involvement in the business would be secure.
75.As my $100,000.00 stake in Dividing Hill had not yet been paid out on 1 August 2006, settlement of the purchase of my share in Green Property was postponed pending release of my funds.
76.Later that month, still not having been paid out by Dividing Hill, I received my Notice of Cancellation of Business Skills Visa from the Department of Immigration and Citizenship (‘the Department’). After receiving the Notice of Cancellation, I subsequently decided to put on hold my involvement in Green Property until my appeal had been heard and my visa situation clarified.
77.I fully intend to proceed with my investment in Green Property upon clarification of my visa status in Australia and the Department’s decision to cancel my visa being over turned by the Administrative Appeals Tribunal.
78.My stake in Dividing Hill was finally released on 1 September 2006. However, I have kept $100,000.00 in Australia invested in a term deposit with the National Australia Bank.
79.I have relied on advice from my migration lawyer that visa holders could live overseas and still satisfy the Department’s requirements of managing a local business. Based on this advice I have subsequently organised my affairs. If I had known that my move to Africa would have, at least in part, as it appears to have done, lead to the cancellation of my visa I would not have left Australia.
80.If the Department had forewarned me that my visa may be cancelled, prior to sending me their Notice of Intention to Cancel Visa, I would have immediately come back to Australia. I have always intended to move back to Australia in the future with my family. I see my family’s future in Australia and intend to come back to Australia to permanently reside within two years”.
63. It therefore follows that, being satisfied of the criteria set forth in subsections (a), (b) and (c) of s 134(2) of the Act, the applicant’s business visa must not be cancelled. The reviewable decision ought therefore be set aside and in substitution therefor a decision made that the applicant’s visa not be cancelled.
64. For the sake of completeness the Tribunal notes that if it had accepted and applied the submissions advanced on behalf of the respondent as to what matters can properly be taken into account in determining the issue of “genuine efforts” and that had resulted in the Tribunal concluding that the applicant had not satisfied the requirements of s 134(2) of the Act, the Tribunal would nonetheless have set aside the reviewable decision in the exercise of its general discretion under s 134(1) of the Act.
65. In this regard the Tribunal adopts the following submissions made on behalf of the respondent in the respondent’s post-hearing written submissions:
“15.The existence of the residual discretion was confirmed by the Federal Court in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304.
16.The nature of the discretion is whether in circumstances where one of the matters set out in s 134(1) or all of them are made out, the visa in question should nonetheless not be cancelled: Gouw v Minister for Immigration [2005] FMCA 1111.
17.In Koosasi v Minister for Immigration and Citizenship [2007] AATA 1311 the Tribunal held at [46] that the discretion is unfettered but is to be exercised having in mind the ends sought to be achieved by the statutory scheme. In other words, the residual discretion is not a discretion at large and must be exercised by reference to relevant facts having regard to the clear framework of the Act.
18.In Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898 at [47] the Tribunal noted the following considerations were relevant:
-its finding that the applicant was not utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia, nor had he made a genuine effort to do so;
-the applicant had only visited Australia on 2 occasions and spent a total of 28 days in Australia;
-the applicant and members of his family unit had continued to reside outside of Australia; and
-the applicant had a substantial business outside Australia which he worked full time and from which he derived most of his income.
19.The respondent contends that the approach taken by the Tribunal in Abbu demonstrates an approach to the consideration of the discretion which coheres to the intentions of the Act”.
66. The reasons why the Tribunal would not have cancelled the visa in the exercise of its residual discretion consistent with the intentions of the Act are as follows:
· the applicant and his immediate family have left Zimbabwe and have not returned there;
· the applicant first entered Australia less than a month after the grant of his visa;
· promptly thereafter he obtained a substantial ownership interest in an eligible business in Australia and utilised his skills in actively participating at a senior level in the day-to-day management of that business;
· he left Australia with a view to undertaking a more financially rewarding position with the intention of returning to Australia with his family “within 2 years to settle permanently and invest further funds in a local business”;
· after he left for Malawi, his investment in Gilete Stone (then Audio Torque) remained and he remained involved in the business’s affairs;
· he remained involved in the company’s affairs when it changed its business to property development;
· he was involved in the affairs of Dividing Hill prior to and subsequent to his acquisition of shares therein;
· he left Australia only after obtaining advice from a registered migration agent; whether that advice was incomplete or even incorrect is not to the point in this regard;
· he intends to return to Australia and invest further funds here and engage in business here, along with his family;
· his evidence, which the Tribunal accepts, was that
“if I had known that my move to Africa would have, at least in part, as it appears to have done, led to the cancellation of my visa I would not have left Australia”.
I certify that the 66 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Penglis, Senior Member and Mr W Evans, Member.
Signed: .................[Sgd Ms C Skinner]................................
Dates of Hearing 30 and 31 May 2007
Applicant’s supplementary
written submissions 22 June 2007Respondent’s supplementary
Written submissions 14 June 2007Date of Decision 8 February 2008
Counsel for the Applicant Mr M Solomon
Solicitor for the Applicant Fiocco’s Lawyers
Counsel for the Respondent Mr A Gerrard
Solicitor for the Respondent Australian Government Solicitor
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