Ong v Minister for Immigration and Multicultural and Indigenous Affairs
[2003] AATA 178
•25 February 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 178
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/616
GENERAL ADMINISTRATIVE DIVISION ) Re HIAN TIAK SY ONG Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Senior Member M D Allen Date25 February 2003
PlaceSydney
Decision The decision under review is affirmed.
(Sgd) M. D. ALLEN
..............................................
Senior Member
IMMIGRATION AND CITIZENSHIP - Cancellation of business skills visa – Whether Applicant had a substantial ownership interest in an eligible business is a question of fact and degree – Consideration of whether the Applicant had made a genuine attempt to obtain any such interest – Management of the business must take place in Australia.
Migration Act 1958 - s134
Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Commissioner for Superannuation v Scott 71 ALR 408
REASONS FOR DECISION
Senior Member M D Allen 1. By application made 6 May 2002 the Applicant sought review of a decision by a delegate of the Respondent to cancel his business skills visa.
2. The said application for review came on for hearing before me on 13 February 2003. At that hearing the following documents were taken in and marked as follows:
T1 – T23
The documents prepared for the Tribunal pursuant to s.37 Administrative Appeals Tribunal Act 1975
A1
Applicant’s statement of facts and contentions
A2
Statement of the Applicant dated 18 November 2002
A3
Statement of the Applicant dated 22 January 2003
A4
Statement of Roger Cang filed 9 December 2002
A5
Statement of Trevor Luke dated 28 January 2003
A6
Chronology
A7
Copy of memorandum of agreement
R1
Respondent’s statement of facts and contentions
3. The Applicant’s business skills visa had been granted to him in or about November 1998 and the Applicant pursuant to that visa arrived in Australia on 14 January 1999. The visa was cancelled on 5 April 2002 and, as was pointed out in Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54 at para 37, the Tribunal must consider whether the decision to cancel was the correct or preferable decision as at the time of the said cancellation. That does not mean of course that later events cannot be examined to see what light they throw upon circumstances at the time of cancellation.
4. The decision to cancel was taken pursuant to subsection s134(1) of the Migration Act 1958. That subsection reads:
(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a) has not obtained a substantial ownership interest in an eligible business in Australia; or
(b) is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c) does not intend to continued 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.
5. Subsection 134(2) then 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.
6. Whereas subsection 134(3) provides that without limiting the generality of matters the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection 134(2) the following matters namely:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposal;
(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 the day-to-day management of a business:
(i) the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii) the reasons why the person no longer holds the interest or participates in the management (as the case requires).
7. As stated above, the Applicant arrived in Australia on 14 January 1999. Shortly after his arrival he purchased property at 7 Cardiff Gate, Iluka in the state of Western Australia and occupied himself for the balance of the calendar year 1999 in having designed and built a dwelling house on that land.
8. As the Applicant said in Exhibit A2 paragraph 7:
“Accordingly, during 1999, I was mainly preoccupied with the purchase of the land and the design and construction of the house on it. Throughout 1999, I did not really give any great consideration to establishing a business or business interests in or connected with Australia because of my preoccupation with the house and because I believed that I had until January 2002 within which to discharge my obligation to the department.”
9. In November 1999 the Applicant contacted a firm Kaleg Enterprises which carries on business in the Australian Capital Territory and gave instructions for enquiries to be made regarding the possibilities and viability as a business of exporting newsprint from Australia to the Philippines. Nothing came of this.
10. In re-examination, the Applicant stated that in the year 2000 he had also made some enquiries regarding the export of fresh produce and supermarket items to the Philippines. Again nothing came of this and the Applicant has no records to show the depth of research which he undertook. I do not regard the taking of six cans of beef to the Philippines for people to try as a genuine investigation into export opportunities.
11. On 1 December 2000 the Respondent sent a form “1010 Survey of Business Skills Migrant – figures 24 Months” to the Applicant. This form asked for details of the business activities in which he had engaged since arriving in Australia, and requested it be returned to the Respondent by 10 February 2001. No return was received by the Respondent.
12. A follow-up letter and additional form was sent to the Applicant under cover of letter dated 27 April 2001 with a request that it be completed and returned by 1 June 2001. The response was received on 5 June 2001.
13. In that form the Applicant had stated (T8 p55):
“I anticipate exporting newsprint to the fruit industry for the next mago (sic) season in the Philippines. We are also in the process of establishing a recycling plant in the Philippines which will come on line erey (sic) 2002. This will then recycle (sic) Australian newsprint”
No evidence was given by the Applicant of any proposed recycling plant in the Philippines, much less one that would come in line in early 2002.
14. However, at the beginning of the year 2001 the Applicant began to consider two business possibilities namely (1) the import into Australia from the Philippines furniture; and (2) the export from Australia to the Philippines of coffee. He undertook research into both possibilities. This research was primarily talking to people in Australia and the Philippines although he did engage Kaleg Enterprises to undertake some research for him.
15. Unfortunately the Applicant did not keep any records of this research and any reports from Kaleg Enterprises were verbal.
16. Having decided that the business activities outlined above were viable the Applicant discussed them with a Mr Tony Rowson. As a result of discussions with Mr Rowson the Applicant, on or about 1 September 2001, purchased shares in a company controlled by Mr Rowson, Prestige Import and Export Company Pty Ltd (Prestige), which had been incorporated on 21 August 2001.
17. Documents at T10 reveal that Prestige Import and Export Company Pty Ltd on 1 September 2001 had issued 10,000 ordinary shares at $1 each. The Applicant purchased 1,225 shares, that is to say he held 12.25 percent of the share capital of the company.
18. The Applicant returned to the Philippines. He stated that this was to assist in “getting the business going”. This required investigating possible markets for coffee and ascertaining sources of supply and customs requirements. He also engaged in promotional activities for the coffee he had sourced in Australia which went under the brand name of Vittoria Coffee.
19. Mr Roger Kang is an importer / exporter in Manilla. His company Stoneworld Impex Incorporated (Stoneworld) exports furniture and discussions were held between him and the Applicant regarding the export of furniture from the Phillipines to Australia and the importation to the Philippines of Vittoria Coffee.
20. In September 2002, that is to say after the cancellation of the Applicant’s visa, Stoneworld entered into a formal distribution agreement with Prestige for the import into and sale within the Philippines of Vittoria Coffee. As at today’s date there have been five importations of Vittoria Coffee. The value of shipments has varied (see Exhibit A3). For example in November 2002 an invoice was forwarded to Stoneworld for the sum of $7,340 compared to invoices on 26 July 2002 for $2,268.43 and that of 5 June 2002 for $2,204.24 (all sums being in Australian dollars).
21. Also in arrangement with Stoneworld there has been one importation of furniture from the Philippines to Australia the value of which was put by Mr Kang at between $A5,000 to $6,000. This importation was after the Applicant’s visa had been cancelled.
22. Eligible business for the purposes of section 134 of the Migration Act is defined in subsection 134(10) as:
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 markets;
(b) the creation or maintenance of employment in Australia;
(c) the export of Australian goods or services;
(d) the production of goods or the provisions 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 or competitiveness within sectors of the Australia economy.
23. Paragraph 134(1)(a) provides that the Respondent may cancel a business visa if its holder has not obtained a substantial ownership interest in an eligible business.
24. The word “substantial” has been said to be a word calculated to conceal a lack of precision. As was said in the majority judgment in Commissioner for Superannuation v Scott 71 ALR 408 at 412:
“This court has on a number of occasions considered the adjective “substantial” and even where it stands alone uninfluenced by proximity to the word “wholly” has adopted a meaning which accords with the submission of the Commissioner. I refer in particular to Tillmanns Butcheries Pty Ltd v Australasian Industry Employees Union (1980) 27 ALR 367. At 382, Deane J said “the word ‘substantial’ is not only susceptible of ambiguity: it is a word calculated to conceal a lack of precision. In the phrase ‘substantial loss or damage’, it can, in an appropriate context, mean real or of substance as distinct from ephemeral or nominal. It can also mean large, weighty or big. It can be used in a relative sense or can indicate an absolute significance, quantity or size. The difficulties and uncertainties which the use of the word is liable to cause are well illustrated by the guidance given by Viscount Symon in Palser v Grinling [1948] AC 291 at 317 where, after holding that, in the context there under consideration, the meaning of the word was equivalent to ‘considerable, solid or big’, he said ‘applying the word in this sense, it must be left to the discretion of the judge of fact to decide as best he can according to the circumstances of each case’ … in the context of s45D(1) of the Trade Practices Act 1974 (Cth), the word ‘substantial’ is used in a relative sense in that, regardless of whether it means large or weighty on the one hand or real or of substance as distinct from ephemeral or nominal on the other, it would be necessary to know something of the nature and scope of the relevant business before one could say that particular actual or potential loss or damage was substantial. As at present advised, I am inclined to the view that the phrase ‘substantial loss or damage’ in s45D(1) includes loss or damage that is, in the circumstances, real or of substance and not insubstantial or nominal.”
25. In other words what is a substantial ownership of an eligible business is a question of fact and degree.
26. Here the Applicant obtained a 12.25 percent holding in a private company having a share capital of 10,000 $1 shares. No doubt if a person owned 12.25 percent of a large publicly listed company such as Coles Myer or the Commonwealth Bank that would be a substantial shareholding (or ownership). I do not, however, regard 12.25 percent of Prestige to be a substantial ownership of that business.
27. The Applicant submitted that on the basis of Re Wong and the Minister (supra) where 25 percent ownership was considered substantial then the Applicant also had obtained a substantial ownership. I would only state as I said above that it is a matter of fact and degree having regard to the business entity involved, and not simply mathematics, and that in any event I would have decided Re Wong (supra) differently.
28. Failure to comply with paragraph 134(1)(a) Migration Act is sufficient grounds to cancel the Applicant’s visa. In addition I find that he has not complied with paragraph 134(1)(b) in that he has not actively participated in the day-to-day management of an eligible business in Australia.
29. At the outset the question arises whether the Applicant was participating in the business in Australia. In Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656, Senior Member Muller as he then was said at paragraph 12:
“Not only must the eligible business operate in Australia to comply with the act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.”
30. The Applicant submitted that it was not necessary for the Applicant to participate in the business in Australia and this submission received some support from the decision of Deputy President MacMahon in Re Tang and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 997 where at paragraph 25 he said:
“There is no evidence that the Applicant actively participates at a senior level from overseas.”
31. Reference can be made to the Second Reading Speech of the Minister for Immigration introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Migration Act 1958. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at p2678) that it was understood that migrants who arrived in Australia on a business skills visa would remain resident in Australia. That such a purposive interpretation of the legislation can be adopted cannot be doubted: see Spiegleman CJ in Repatriation Commission v Vietnam Veterans’ Association of Australia NSW Branch Inc & Others 48 NSWLR 548 at 575:
“The Australian law of statutory interpretation requires a court to consider context in the first instant, not merely after ambiguity is identified …” (and see the authority cited at 575-6)
32. I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas.
33. In this matter it is clear that the Applicant did not exercise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia at the time of cancellation of his visa.
34. Subsection 134(2) provides exculpatory provisions which if met prevent the cancellations of a business skills visa. Tests for ascertaining whether the “genuine effort” has been made are set out in ss134(3) Migration Act but are not exclusive. In this matter I find:
(a) the business proposals at the date of cancellation were embryonic and even now after one importation of furniture plus some export of coffee which seems in any event to be dependent upon a distributor in the Philippines can hardly be said to be an ongoing business. As was pointed out in Re Tang (supra) quoting Hope v Bathurst City Council 144 CLR 1 the concept of a business requires that there be a commercial enterprise in the nature of a going concern.
(b) although the Applicant has entered into a joint venture regarding possible imports and exports to the Philippines that venture is even now, as it was at the time of the cancellation of his visa, a very minor undertaking with no continuity of imports. I note that the Applicant’s joint venturer, Mr Rowson, was not called in these proceedings. The majority shareholding of Prestige remains with Mr Rowson, the Applicant still holding only 12.25 percent.
35. The periods the Applicant has spent outside Australia are not insignificant and he still has business interest in the Philippines. Although he did transfer funds to Australia there has been very little funds expended in the business as compared to the Applicant’s purchasing land and building a dwelling house.
36. The Applicant claimed that it was not his way of doing business in the Philippines to keep records but suffice it to say that in this matter no business plans, records of investigations made by him, or records of consultations with bankers, lawyers, etc, have been produced. There are records of some inquiries having been made on his behalf by a firm in the Australian Capital Territory but these do not appear to have been extensive or ongoing and no written reports were made.
37. All in all having regard to all the material in this matter I am satisfied that the Applicant did not make a genuine effort either to obtain a substantial ownership interest in an eligible business in Australia nor to utilise his skills in actively participating at a senior level in the day-to-day management of that business.
38. The decision under review will be affirmed.
I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.
Signed: .......................................................................................
AssociateDate/s of Hearing 13 February 2003
Date of Decision 25 February 2003
Solicitor for the Applicant Blake Dawson Waldron
Solicitor for the Respondent Goldsmiths
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