Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 2092
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 200600416
GENERAL ADMINISTRATIVE DIVISION ) Re SHAUN JONATHON PHILP Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date20 December 2007
PlacePerth
Decision The Tribunal affirms the decision under review.
…………(Sgd. A Sweidan)…..……
Senior Member
CATCHWORDS
Immigration and Citizenship – Business Skills Visa – whether applicant obtained a substantial ownership interest in an eligible business in Australia – whether applicant utilised his skills in actively participating at senior level in day to day management of that business or made a genuine effort to do so – whether Tribunal should exercise residual discretion – decision under review affirmed
LEGISLATION
Migration Act 1958 (Cth) s 134
Migration Amendment Bill (No 2) 1992
CASES
Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898
Awesa and Minister for Immigration and Citizenship [2007] AATA 53
Badenhorst and Minister for Immigration and Multicultural Affairs [2006] AATA 742
Bakri and Minister for Immigration and Multicultural Affairs [2007] AATA 14
Barnett and Minister for Immigration and Citizenship [2007] AATA 1454
Buljeta and Minister for Immigration and Multicultural Affairs [2007] AATA 10
Burg v Minister for Immigration and Citizenship [2007] AATA 1630
Cheng and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 26
Chong and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 45
Dawson v Immigration and Citizenship [2007] AATA 1222
Deswandy and Ors and Minister for Immigration and Citizenship [2007] AATA 1405
Dharsiono and Minister for Immigration and Multicultural Affairs [2006] AATA 786
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634
Freeman v The Secretary, Department of Social Security (1998) 19 FCR 342
Gunawan and Minister for Immigration and Citizenship [2007] AATA 1110
Gunawan and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1340
Gunawan v Minister for Immigration and Multicultural Affairs [2006] AATA 852
Haman v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113
Harsono v Minister for Immigration and Multicultural Affairs [2007] AATA 64
Haryanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 317
Hidayat and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 916
Hindrodjojo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724
Hope v Bathurst City Council (1980) 144 CLR 1
Humayun v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 90 ALD 482
Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656
Ip and Minister for Immigration and Citizenship [2007] AATA 1413
Jo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 469
Kim v Minister for Immigration Multicultural and Indigenous Affairs [2004] FCA 31
Koosai v Minister for Immigration and Multicultural Affairs [2006] FCA 1260
Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209
Legana v Minister for Immigration and Multicultural Affairs [2005] AATA 1166
Lau v Minister for Immigration and Multicultural Affairs [2002] AATA 70
Lee v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 973
Lim & Ors v Minister for Immigration and Multicultural Affairs [2006] AATA 28
Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2008] AATA 309
Lioe v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 189
Lim and Anor and Minister for Immigration and Multicultural Affairs [2007] AATA 1036
Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2003] FCAFC 186
Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27
Minister for Immigration and Multicultural Affairs v Lam (2003) 195 ALR 502
Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273
Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314
Mulyadi and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1019
Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579
Ng and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 721
Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Padilla and Minister for Immigration and Multicultural Affairs [2006] AATA 922
Permana and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA
Reed and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 335
Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152
Re Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Riky Mareta Tenggara v Minister for Immigration and Multicultural Affairs [2006] AATA 472
Re Tjhang v Minister for Immigration and Multicultural Affairs [2005] AATA 1203
Re Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961
Re Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
SantyThen v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 18
Shi v Migration Agents Registration Authority [2007] FCAFC 59
Susanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 470
Sweeney v MIMA [2007] AATA 991
Tan and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 808
Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997
Tauriandy and Minister for Immigration and Multicultural Affairs [2006] AATA 183
Teng and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 715
Teo v Minister for Immigration and Citizenship [2007] AATA 118
Tio and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1268
Tran v Minister for Immigration and Multicultural Affairs [2006] FCA 1229
Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344
REASONS FOR DECISION
20 December 2007 Mr A Sweidan, Senior Member 1. The applicant seeks a review of a decision made on 29 November 2006 by a delegate of the respondent to cancel his sub-class 127 business skills visa which was granted on 14 April 2003. His wife and children obtained secondary visas which have also been cancelled. No application for review has been made by them.
2. The applicant first entered Australia on the visa on 14 August 2003.
3. On 22 August 2003 the applicant obtained a 50% ownership interest with his wife in Artlyne Pty Ltd (Artlyne), which in turn obtained a $250,000, 10% ownership interest via ‘A’ class shares in Gilete Coogee Pty Ltd (Gilete). On 29 August 2005, a further investment of $110,000 was made in Gilete, which changed its name to Coogee Pty Ltd (Coogee North), and the shares were also subsequently converted to ordinary shares. Coogee North is a property development company. It and Artlyne are both Australian companies.
4. The applicant has also been involved with, but has no ownership interest in, another “Gilete Group” associated company, DEVX Pty Ltd (DEVX). DEVX manages Coogee North and is involved in other property development projects of its own.
Applicant’s Evidence
5. The applicant gave evidence, the gist of which was as follows.
6. He said that as a result of events in Zimbabwe he applied for “Australian residency”. The Tribunal notes that those events have been well publicised in Australia.
7. He said that he decided to invest/set up a business in Australia as he had experience in running businesses and had the finance to do so.
8. He and his wife and their families are all still resident in Zimbabwe.
9. After obtaining his visa, he and his family entered Australia to “investigate business opportunities”. He said that during that visit he investigated “many various business options” in which to invest funds and manage the business.
10. As stated above he invested $360,000.00 in Coogee North.
11. Coogee North was in the business of property development and planned to develop a multi level apartment complex as part of a new land development at Port Coogee. Paul Ogilvie was the director of Coogee North.
12. Coogee North contracted with DEVX to project manage the development. DEVX had a shareholding interest in Coogee North. Applicant said that he spent a lot of time “sourcing investors to channel finance” into both the Coogee development and into other property developments DEVX was involved in. Various members of his family invested.
13. He was in contact with Paul Ogilvie to encourage these people to invest in North Coogee and other DEVX developments.
14. He returned to Australia in February and July 2005 to “discuss the Coogee North development.” He said that he “enticed” his father to visit Australia and invest in the project.
15. After his return to Zimbabwe during the first half of 2006 he communicated on a few occasions by email with the City of Cockburn “to assist in obtaining and overseeing the granting of building approval.”
16. He said that he held monthly telephone discussions with all parties involved in the project, including other shareholders. Minutes were kept of these discussions.
17. He said that he was in regular contact with other shareholders in Coogee North and DEVX regarding selling of apartments by auction, “planning and suggesting various contractors through information I received through the Ocean View project – the project my brother Simon Philp was involved in.”
18. Coogee North only received its building license in January 2007 with a 70 week completion dead line. He said in his witness statement that “for the next seventy weeks my main aim will be the weekly involvement of the management progress within the project.”
19. He said that he and his family are still residing in Zimbabwe as a result of family issues that require “a little more time to heal.” Both his mother-in-law and sister-in-law lost their respective husbands on the same day in 1999 in an accident in which his sister-in-law also lost her child.
20. He said that the family is “trying to survive in Zimbabwe with hyper-inflation of over 2000%.” He said that the family are reliant emotionally on him as a result of the loss of so many family members. They had not only not come to terms with their loss when a few years later the “land grab” took place and they lost their homes and livelihoods, being their respective game farm and ranch. He said that this has been a very traumatic period for his family who are “slowly adapting to their new lives.” He feels obliged to stay in Zimbabwe “for the time being to assist them.”
21. The applicant’s evidence was confirmed by other witnesses and supported by various documents tendered as evidence to the Tribunal.
Relevant Legislation and Policy
22. Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if she is satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, or does not intend to do these things. The Minister must not cancel the visa if she is satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts.
23. Eligible business and ownership interests are defined in s 134(1) of the Act and discussed at paragraph 4.3 of the Migration Series Instructions (MSI) 133.
24. Section 134(10) provides that eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods and services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia; and
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
25. Paragraph 4.3.2 of the MSI-133 notes that eligibility relates to achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.
26. Section 134(3) provides a list of matters that the Minister may take into account when determining whether a person has made 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.
27. Notes to guide the interpretation of these matters are provided at paragraph 4.5 of the MSI-133. The matters that may be taken into account, and the notes to their interpretation provide as follows:
(a)business proposals that the person has developed. The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;
(b)the existence of partners or joint ventures. The MSI refers to whether there is a formal contract with partners or joint venturers;
(c)research that the person has undertaken into the conduct of an eligible business in Australia. The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;
(d)research that the person has undertaken into the conduct of an eligible business in Australia. The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;
(e)the period or periods during which the person has been present in Australia. The MSI refers to whether there has been physical presence for more than 6 months since the first arrival as a business skills migrant;
(f)the value of assets transferred for use in obtaining an interest in an eligible business. The MSI refers to whether there has been transfer to and retained in Australia at least 50% of the funds indicated as available for transfer within the 2 years;
(g)the value of ownership interest in the eligible business in Australia which is or has been held by the person. The MSI refers to whether there is or has been a minimum Australian $100,000.00 or 10% ownership held by the person and provides that if the person is no longer in the business the reasons for loss of ownership are relevant;
(h)the business activity that is or has been undertaken by the person. The MSI refers to whether there is a minimum of Australian $100,000.00 business activity as indicated by turnover and provides that this may include other business activity not considered as an eligible business but cannot include passive investment, for example the purchase of shares;
(i)whether the person has failed to comply with a notice under section 137. The MSI refers to whether there has been a failure to comply with a notice for information under s 137, i.e. mandatory monitoring of Australian address and return of survey forms; and
(j)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 on the day-to-day management of the business:
(i)the length of time the person held the ownership interest or participated in the management as the case requires; and
(ii)the reason why the person no longer holds the interest or participates in the management as the case requires.
28. Whilst the Tribunal is not bound by Departmental policy, the Tribunal should follow Ministerial or Departmental Guidelines unless there is some good reason not to: see Buljeta and Minister for Immigration and Multicultural Affairs [2003] AATA 10 at [58] citing Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634; and Re Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [51] citing Davies J in Re Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259.
Tribunal’s findings
Information which the Tribunal should consider
29. In conducting its review of the cancellation decision the Tribunal should have regard to all relevant evidence to determine whether the applicant satisfies the requirements of s 134(1) or is making genuine efforts to do so within the meaning of s 134(2) as at the date of cancellation: Re Griffiths and Migration Agents Registration Authority [2001] AATA 240; Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342 and Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54.
30. In the Full Federal Court decision of Shi v Migration Agents Registration Authority [2007] FCAFC 59 Nicholson J at [10] with Tracey J at [58] agreeing held the following in relation to this issue:
The Tribunal is not confined to material which was before the decision-maker or the events which had occurred up till the time of its decision…However, the Tribunal is obliged to address the same question as the primary decision-maker…Where the question to be decided arises under a statute, the relevant of later evidence will depend upon the proper construction of the statute and the particular factual context…If the primary decision had to be made by reference to a particular point of time, the Tribunal will be limited to deciding the question by reference to that point of time…If the decision could only have been made following a certain procedure, it may be that the evidence called on the review cannot be such as would undermine that procedure. This may preclude calling of evidence of improvements implemented after the date of the decision and in response to the procedure…This does not mean the Tribunal cannot receive as evidence facts that occurred after the date of the decision under review provided that evidence bears on the merits of the decision as at the time that it was required to be made.
Substantial ownership in an eligible business
31. The Tribunal finds that when the A class shares were converted to ordinary shares on 29 August 2005, the applicant obtained a substantial ownership interest in Coogee North.
Is Coogee North a business?
32. Before the Tribunal can determine whether Coogee North is an eligible Australian business, the Tribunal must consider the preliminary question whether it is a business within the meaning of the Act: see Koosasi v Minister for Immigration and Multicultural Affairs [2006] FCA 1260.
33. The Tribunal has previously found that the reference in subs 134(1)(b) to the “day-to-day management of the business” indicates that a business must have some element of continuity and repetition. Applying Mason J’s formulation of “carrying on a business” from Hope v Bathurst City Council (1980) 144 CLR 1, Deputy President McMahon found in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997 at [20] that the construction of “participating in the day-to-day management of the business” for subs 134(1)(b) required a:
commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis.
34. Member Barton at [55] in Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309 citing Evans v FC of T 89 ATC 4540, also stated:
Whether a particular activity or course of activities constitutes a business is a question of fact and degree that is to be determined by considering matters such as the scale of activity and whether it is conducted continuously and on a commercial basis to derive profit.
35. The evidence is that Coogee North is a property development business, developing a property with plans to turn the site into multiplex apartments and sell them.
36. The Tribunal notes that Coogee North received its building licence in January 2007 ie. after the date of cancellation on 29 November 2006.
37. The Tribunal nevertheless finds that Coogee North is a business within the meaning of the Act.
Is Coogee North an eligible business?
38. Coogee North must satisfy the legislative requirement of being an eligible business. The definition of an eligible business is set out in section 134(10) of the Act. A business must meet at least one of the criteria set out in paragraphs (a) to (f) of the definition in order to be classified as an eligible business.
39. The applicant says that Coogee North satisfies criteria (b), that is, the creation and maintenance of employment:
Coogee North… engaged architects, engineering consultants, accountants, building regulation consultants, land surveyors, environmental consultants. The company also carried out geotechnical survey and valuation of the property
40. The applicant also claims that Coogee North satisfies criteria (f), that is, an increase in commercial activity and competitiveness within sectors of the Australian economy.
41. While it is clear that a property development company can be an eligible businesses, this has not always been found to be so. See Lioev Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA; Tan and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 808 at [15]; Ng v Minister for Immigration & Multicultural & Indigenous Affairs [2003] AATA at 299 [25] - [27] and Tio and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1268 at [20] and [21]; cf. Lala and Minister for Immigration, Multicultural and Indigenous Affairs [2003] AATA 209 and Hindrodjojo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724.
42. The Tribunal notes that while Member Allen in Hindrojojo, at [26] and [27], was prepared to accept a $30 million property development as an eligible business, he held a month later in Tan at [15], that a project with construction costs of approximately $1 million was not an eligible business. He then went on to cite with approval Deputy President Wright QC’s view in Ng at [26] that:
…the provision of ‘employment’ in the sense of providing limited fee earning opportunities to architects and real estate agents and the provision of a one off building contract… is not ‘the creation or maintenance of employment in Australia’ contemplated by the s134(10) definition of eligible business…
43. However the Tribunal notes that Coogee North’s activities appear to have been more extensive.
44. The Tribunal also notes that while construction only began in early 2007, after the date of cancellation of the applicant’s visa nevertheless, as set out above there was substantial activity prior to that.
45. The Tribunal finds that Coogee North is an eligible business.
Active participation at a senior level in the day-to day management of an eligible business
46. The respondent contends that the applicant has failed to demonstrate that he has utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business. The Tribunal agrees, noting the following:
(a)Management of DEVX is not management of an eligible business.
(b)The applicant has largely been an absentee passive investor.
(c)There is minimal evidence of the applicant’s actual involvement in management.
(d)There is little or no evidence to substantiate the claim that the applicant actually spent 6 hours per week, every week, over a three year period, working on the business.
(e)There is no evidence that the applicant has made any decisions at the requisite level.
Management of DEVX is not management of an eligible business
47. A substantial part of the applicant’s claim involves his alleged managerial involvement in DEVX. The applicant cites his role in sourcing overseas investors for DEVX projects, visiting DEVX sites and general managerial involvement in DEXV projects. He claims that ‘the time spent overseas has been for the benefit of both Coogee North and the wide DEVX group.’
48. DEVX is a company contracted to assist in the project management of Coogee North. It once had, but currently does not have shares in Coogee North.
49. The applicant claims that through his “sourcing abilities”, a number of people invested in a range of DEXV developments. ASIC records, however, show that neither the applicant nor Coogee North have an ownership interest or any legal relationship to these developments (see exhibits 10 and 11).
50. The applicant’s claimed eligible business is Coogee North. Section 134(1)(b) of the Act requires the Tribunal to consider the applicant’s active participation in day-to-day management at a senior level of that business. Therefore in the Tribunal’s view any involvement in the management in DEVX even if proved does not assist the applicant on this issue.
The applicant has largely been an absentee investor/entrepreneur
51. In the Tribunal’s view the Act is intended to benefit business owners who settle in Australia and actively manage an eligible business (Tang supra at [21]). In Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 Senior Member Muller said at [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.
52. The Tribunal notes the Second Reading Speech of the Minister for Immigration and Ethnic Affairs introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Act. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at 2678) that it was understood that migrants who arrived in Australia on a business skills visa would remain resident in Australia (see Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 at [31]).
53. In Ng v Minister for Immigration v Minister for Immigration and Multicultural Affairs [2003] AATA 299 Deputy President Wright QC commented at [12]:
This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However, the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential. A business skills visa carries with it the right of permanent residency in Australia during its existence and by departing from Australia and joining family members as secondary applicants they too can obtain this privilege. It would be strange indeed if an overseas entrepreneur could secure these advantages by directing business operations from abroad within a day or two of his first arrival and never setting foot in this country again.
54. The Tribunal is aware that divergent views have been expressed in the Tribunal as to whether day-to-day management of an eligible business must take place in Australia, or whether it can take place overseas. Some authorities seem to indicate that time spent in Australia is relevant to the issue of management under s134(1)(b). Other authorities seem to indicate that time spent in Australia is not relevant. Finally a third line of authorities seem to indicate that although not strictly relevant to the question here, it may be a factor with regard to the Tribunal’s discretion under s134(1) : see Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27 at [41] for respective authorities and a history of the debate.
55. With respect to Deputy President Jarvis in Wong (ibid), the Tribunal is nevertheless of the view that the first line of authorities is the correct one, in that time spent in Australia is a relevant consideration when deciding whether a visa holder has satisfied the requirements under s134(1)(b): Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 at [12]; Ong v Minister for Immigration and Multicultural Affairs [2003] AATA 178 at [28] to [32]; Re Tjhang v Minister for Immigration and Multicultural Affairs [2005] AATA 1203 at [34] to [36]; Legana v Minister for Immigration and Multicultural Affairs [2005] AATA 1166 at [30]. See especially two recent decisions which have upheld the “absentee entrepreneur” test: Lim & Ors v Minister for Immigration and Multicultural Affairs [2006] AATA 28 at [42] and [43] and Lioe v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 189.
56. The Tribunal finds that as the applicant has only spent a total of 46 days in Australia during the currency of his visa, he has not satisfied the residence linked requirement implied into the operation of s134(1)(b).
There is only minimal evidence of the applicant’s actual involvement in management
57. The applicant claims that he has satisfied the requirements of management under s134(1)(b) by:
(a)sourcing overseas investors;
(b)making contacts with local government officials;
(c)contributing to design, building and sale decisions; and
(d)general managerial involvement in the company, most notably by monthly management meetings (see paragraph 50 of the applicant’s statement of facts and contentions).
Sourcing overseas investors
58. The Tribunal finds, that sourcing overseas investors to invest in DEVX is not active day-to-day senior level management of Coogee North. Therefore the only person the applicant may have sourced from overseas was his father, who invested $100,000 in Coogee North. The Tribunal is of the view that minimal senior level managerial time, skill and effort would have been required to achieve this investment over the course of a 3 year visa obligation.
Making contacts with local government
59. The evidence shows that the applicant did contact the local authority on a few occasions. One of these occasions was by email on 25 August 2006 after the applicant received a notice of intention to cancel his visa. The other contacts appear to be around the same period of January 2006.
60. In the Tribunal’s view it is clear that it was not the applicant’s management role to contact the local council but rather that of Paul Ogilvie and the other directors of Coogee North. The applicant’s enquiries were general in nature and are indicative of an interested but ultimately passive investor concerned about the status of his investment. The applicant in his email of 6 January 2006 for example described himself to the council as merely ‘one of the investors on this project’.
61. The Tribunal finds that these contacts did not constitute senior level management. Even if they did, the Tribunal finds that a few emails do not constitute active participation in day-to-day senior level management.
Contributing to design, building and sale issues
62. The evidence shows that the applicant did send some emails to Paul Ogilvie and other Gilete managers regarding design, building and sale issues. However the Tribunal notes that:
(a)the actual number of emails is very small;
(b)some of these emails relate to DEVX projects ;
(c)most of the emails were limited to a very short period of time around middle to late 2006;
(d)all the emails are after the applicant received his 24 month survey and many after he received the notice of intention to cancel his visa in August 2006;
(e)most of the suggestions are general in nature and are more indicative of an interested but ultimately passive investor rather than someone involved in management; and
(f)there is little evidence that any of these suggestions were in fact implemented.
Alleged General managerial involvement in the company, most notably by monthly management meetings
63. The Tribunal notes that the applicant was absent for most of the monthly management meetings. It appears that the applicant only began making efforts to attend via telephone after he had received the notice of intention to cancel his visa on 11 August 2006 and notice of cancellation of his visa on 29 November 2006.
64. The Tribunal finds that receiving emails or minutes of meetings and making a few suggestions or recommendations does not constitute active participation in day-to-day management at a senior level: see Harsono v Minister for Immigration and Multicultural Affairs [2007] AATA 64 at [32]; Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898 at [24] and [34] - [37]; and Gunawan v Minister for Immigration and Multicultural Affairs [2006] AATA 852 at [32] and [43].
There is little evidence to substantiate the claim that the applicant actually spent 6 hours per week, every week, over a three year obligation, working on the business.
65. The applicant claimed to spend 6 hours per week involved in Coogee North. The applicant points out that it ‘there is no requirement in the Act that the business visa holder works at a particular number of hours each week in their management role’. The applicant then goes on to cite the decision of Hindrodjojo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 724 at [35] where 5 hours per week was considered an acceptable level of managerial involvement. Finally, a number of other authorities are cited that ‘business does not require daily management’ and that ‘business does not mean busy’.
66. While the Tribunal accepts these submissions, they should not be artificially used to support the proposition that active participation in day-to-day management at a senior level requires a visa holder to do virtually nothing. Even if 6 hours per week was considered sufficient, no evidence has been provided to substantiate this claim. The applicant has not provided evidence which can demonstrate he was spending even 1 hour per week, every week, consistently for three years from August 2003 to November 2006, let alone 6 hours per week on the business of Coogee North as claimed.
There is no evidence that the applicant has made any decisions at the requisite level.
67. The applicant claims the delegate of the respondent considered irrelevant criteria regarding decision making, citing the authorities of Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2003] FCAFC 168 and Tran v Minister for Immigration and Multicultural Affairs [2006] FCA 1229. The applicant also states at paragraph 81, citing Lau v Minister for immigration and Multicultural Affairs [2002] AATA 70, that managerial input might be ‘intangible in nature’.
68. The Tribunal finds that even if the delegate of the respondent made an error, this is largely irrelevant or ‘cured’ by the Tribunal making a de novo decision: see Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344 at [28]; Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314 and Humayun v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 90 ALD 482. This approach has been followed by the Tribunal in Sweeney v MIMA [2007] AATA 991 at [26] and Tio v MIMA [2007] AATA 1118. The important thing is for the Tribunal to not repeat such errors, if they exist.
69. Secondly, the cases of Lobo and Tran were not authorities that decision-making per se was an irrelevant consideration, rather only that the narrow Departmental policy criteria of decision-making were irrelevant. As the applicant submits the criteria which the applicant is referring to actually contains three parts with regard to management:
(a)exercise responsibility within the main business(es) in terms of decision-making authority, responsibility for employees and/or responsibility for expenditure;
(b)such responsibility has been exercised on a continuous (as opposed to an occasional) basis; and
(c)the relevant skills have been fundamental to, or have exerted direct influence on, the operation of the main business(es).
70. The applicant states that in Lobo and Tran all three criteria were held as going beyond the strict terms of legislation. However, it seems from a reading of the cases that the Federal Court may have only rejected the first part as a jurisdictional error. It was obviously unreasonable to expect management to be confined to decision-making authority (i.e. dominant or executive level decisions only), responsibility for employees and/or responsibility for expenditure. Nowhere however were the other two elements said to be specifically incorrect considerations: see Lobo at [63].
71. Thirdly, the Departmental policy which the Federal Court considered in these cases was the granting of a subclass 845 visa for an established business in Australia under clause 845.216 of the Second Schedule to the Migration Regulations 1994. The matter before the Tribunal in this matter however is a cancellation of a subclass 127 business skills visa under s134 of the Migration Act 1958. While both criteria are similar, they are not exactly the same. Clause 845.216 for example does not require the management to be at a ‘senior level’ as s 134(1)(b) does. It appears therefore that the factors considered by the delegate of the respondent in this matter are still yet to be judicially determined.
72. Lastly, the applicant fails to mention that although the original decision in Lobo considered the above factors too narrow, the Tribunal on remittal still held that the visa holder had nonetheless not satisfied the criteria for management. This was upheld in a further appeal to the Federal Court in Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562. Madawick J at [54] cited the Tribunal’s decision with approval:
The evidence supporting the visa applicant’s “involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business” is essentially her own assertions. The documentary evidence fails to support the proposition that she is a decision maker in the business or that she is even fully cognisant of the overall direction and performance of that business. On balance of the evidence, the Tribunal is not satisfied that the visa applicant “maintained direct and continuous involvement in the management of that business… from day to day and in making decisions that affected the overall direction and performance of that business” in the 12 months prior to the date of application. The Tribunal finds that the primary visa application does not meet clause 845.216.
73. In the Tribunal’s view the evidence here shows that the applicant played a very minor role in assisting the managers who were effectively running the business and it is clear that the applicant did not make decisions at a senior management level.
Conclusion on day-to-day senior level management
74. The Tribunal finds that there is minimal evidence of the applicant’s involvement in the management of Coogee North. Even where such evidence exists, it represents little more than a flurry of activity designed to give the impression that the applicant was satisfying his visa conditions, when in the Tribunal’s view he clearly was not.
Genuine effort to utilise skills in actively participating at a senior level in the day-to-day management of the eligible business
75. Although there is no statutory definition of genuine effort, numerous authorities have discussed the term and established that it must:
(a)be more than a superficial or token effort. There must be a real and honest effort and not be one which is false, fictitious or a pretence, and mere expressions of interest or inquiries fall short of genuine efforts: Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283;
(b)involve some exertion or endeavour. The requirement is that an effort is made and the respondent contends that this requires some activity on behalf of an applicant. In Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309, and followed in Gunawan v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 852 at [46], [48], the Tribunal found that a genuine effort must be ‘vigorous and determined’;
(c)be a ‘real and sincere endeavour or strenuous attempt’: Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898;
(d)be of a ‘sustained and continuous quality’ in contrast to mere ‘sporadic and desultory activity’: Koosai and Minister for Immigration and Multicultural Affairs [2006] AATA 179.
76. Paragraph 4.5.1 of MSI 133 also provides a list of factors which ‘correctly summarises the relevance of s134(3) to the decision making process’: Re Lok Young (Michael) Wong v Minister for Immigration & Multicultural Affairs [2006] AATA 277. As paragraph 4.5.2 of the MSI points out, failure to meet any one criterion may not necessarily lead to a visa being cancelled. All factors should be weighed as a whole.
(a) business proposals that the person has developed
77. There is no evidence of the applicant developing any business proposals.
(b) the existence of formal contracts with partners or joint ventures
78. There are no formal contracts with partners or joint ventures, other than his share holding in Coogee North.
(c)research that the person has undertaken into the conduct of an eligible business in Australia
79. The applicant says that he undertook extensive research and sourced three overseas investors totalling $605,000.00. However as noted above, most of this research and effort involved getting family members to invest in DEVX projects. These activities in the Tribunal’s view cannot be characterised as genuine efforts which meet the requirements.
(d) the period or periods during which the person has been present in Australia
80. The period or periods during which a person has been present in Australia, unlike active management, is a relevant factor which the Tribunal must consider pursuant to s 134(3)(d). Departmental policy indicates a period of 6 months as acceptable. The applicant only made three short trips to Australia totalling 46 days in all during the 3 years that he held the visa.
81. The applicant cites the decision of Bakri v Minister for Immigration & Multicultural Affairs [2007] AATA 14 at [69] where a visa holder was held to have made genuine efforts despite only being in Australia for less than 3 months. Senior Member Penglis did not state there that a period less than 3 months was acceptable, but held that:
Whilst the authorities establish this fact (and the fact that many other parts of the MSI guidelines have not been satisfied on the facts of this case) is a matter to be taken into account when determining whether or not a "genuine effort" has been made, in the circumstances of this case I find that such matters do not outweigh the other factors to which I have referred.
82. Time spent overseas is relevant and the applicant has spent only a short amount of time in Australia. The Tribunal finds that taking this and other factors referred to above into account the applicant has not made genuine efforts.
(e) value of assets transferred for use in obtaining an interest in an eligible business
83. The Tribunal notes that the applicant has transferred $360,000 to obtain shares in Coogee North.
(f)value of ownership in a relevant business in Australia that is, or has been, held by the person
84. The Tribunal finds that the applicant’s ownership of shares valued at $360,000 in Coogee North satisfies the Departmental policy of 10% ownership or $100,000.
(g) business activity that is, or has been, undertaken by the person
85. Departmental policy indicates a minimum business activity of $100,000 by turnover is sufficient. There is no evidence of either Coogee North or the applicant personally satisfying this requirement.
Conclusion on genuine effort
86. Overall the Tribunal finds that the applicant’s conduct was largely a ‘flury of activity’ amounting to ‘mere window dressing to give the appearance of vigorous and conscientious’ efforts: Ng. and that, having regard to the evidence as a whole, the applicant has not made genuine efforts.
Residual Discretion
87. The Tribunal having found that the applicant has not met the requirements of s 134 (1) and (2) of the Act, the question is whether the Tribunal should exercise its residual discretion in favour of the applicant.
88. The applicant asks the Tribunal to exercise its discretion and not cancel his visa based on:
(a)his personal circumstances in Zimbabwe; and
(b)the delegate’s alleged jurisdictional error.
The applicant’s personal circumstance in Zimbabwe
89. The applicant claims that he and his family are still residing in Zimbabwe because:
(a)both his mother-in-law and sister-in-law lost their respective husbands in an accident in June 1999; and
(b)the applicant feels morally obliged to remain in Zimbabwe to assist his family who face hyperinflation and other significant problems.
90. It is clear that a claim based on extreme hardship pursuant to s134(4) and (5) is not available to the applicant but only to his family members who are secondary visa holders. None of the applicant’s family have brought their own applications in the Tribunal.
91. The Tribunal notes that the tragic accident mentioned above occurred in 1999, some 4 years before the applicant was granted a visa and 7 years before this application. The Tribunal, while sympathetic to the applicant is nevertheless of the view that these problems were foreseeable when he made his visa application, and that it is doubtful whether the applicant had any serious intention of moving to Australia when he was granted his visa. The applicant’s personal circumstances are not, in the Tribunal’s view, satisfactory explanations to excuse his inaction up to the point of cancellation.
The delegate’s alleged jurisdictional error
92. The Tribunal repeats its findings above.
93. Even if a jurisdictional error has occurred, (as to which the Tribunal makes no finding) it is cured by the Tribunal’s de novo review.
94. The Tribunal is of the view that there is no sufficient basis shown for the Tribunal to exercise its residual discretion to not cancel the applicant’s visa, noting the authorities referred to below.
95. It is clear that the Tribunal has a residual discretion not to cancel an applicant’s visa, even if he has not fulfilled the requirements of s134(1) and s134(2) of the Migration Act 1958 (the Act): Kim v Minister for Immigration Multicultural and Indigenous Affairs [2004] FCA 31.
96. Unlike the other factors in s134, there is no legislative guidance as to when the residual discretion should be used. In fact, the only legislative basis for the residual discretion is simply the word ‘may’ in s134(1) of the Act.
97. Parliament therefore may have intended to confer on the decision-maker a wide power to consider unforseen and unusual situations that go beyond those factors listed in s134(3). For this reason the Tribunal has previously held that it is a power that should be used sparingly and only in unforseen and unusual situations: see Senior Member Penglis’ comments at [74] in Bakri and Minister for Immigration and Multicultural Affairs [2007] AATA 14, regarding the exercise of the residual discretion in ‘highly unusual circumstances’.
98. Although there is no legislative definition, various Tribunal and Court decisions offer some guidance on when the Tribunal should or should not exercise this discretion in an applicant’s favour.
The residual discretion may be used in an applicant’s favour where he or she has offered a satisfactory explanation for the inactivity
99. The Tribunal may use its residual discretion and not cancel the applicant’s visa if he or she has offered a satisfactory explanation for the inactivity: Kim (supra) at [21]; Reed and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 335 at [22]; Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152 at [44]; Dharsiono and Minister for Immigration and Multicultural Affairs [2006] AATA 786; Gunawan and Minister for Immigration and Citizenship [2007] AATA 1110 at [21]; Lim and Anor and Minister for Immigration and Multicultural Affairs [2007] AATA 1036.
100. The word ‘satisfactory’ in this context, however, does not simply mean an honest or genuine explanation. In some circumstances, an otherwise honest or genuine explanation, such as an excuse on humanitarian grounds, which the Tribunal may whole-heartedly sympathise with, still might not amount to a ‘satisfactory’ explanation. At other times, it might be a relevant factor in the applicant’s favour, but be of little weight and thus not sufficient to justify the use of the residual discretion. Such situations include those where as here:
(a)the humanitarian grounds relied upon occurred before the granting of the visa, and which were therefore reasonably foreseeable to the applicant;
(b)the applicant failed to raise these humanitarian grounds before the cancellation of his visa with the relevant authorities;
(c)the applicant claims political, economic and currency problems, but nonetheless is able as in this case to invest substantial amounts of money into an Australian business;
The humanitarian grounds relied upon occurred before the granting of the visa, and which were therefore reasonably foreseeable to the applicant
101. In the matter of Gunawan [2007] (supra), the applicant stated he could not fulfil his visa obligations because his father was seriously ill from having suffered a stroke and becoming virtually incapacitated. The applicant argued that being the eldest son, and in accordance with Chinese culture, it was his primary responsibility to care for his father.
102. The applicant also cited difficulties in disposing of his overseas business, due to difficult economic conditions in his home country, as another reason for delay. The applicant submitted at [11]:
Mr Ty told the Tribunal that in his opinion Mr Gunawan had a genuine intention to do business in Australia but because of personal difficulties with his father's illness and continuing efforts to find a person to take over the family business in Indonesia, the process of setting up business in Australia became difficult, especially taking into account currency fluctuations.
103. Although the Tribunal seemed to believe the truth of these claims, and appeared to sympathise with the applicant’s predicament, it did not believe that this amounted to a ‘satisfactory’ explanation warranting the exercise of the residual discretion. This was in large part because:
Although Mr Gunawan has stated that he plans to settle in Australia and develop the business, his father has been incapacitated since 2000, before the grant of the visa, and Mr Gunawan, on his own admission, is required to accept ongoing responsibility for his father’s welfare (emphasis added).
104. His father therefore became ill before the granting of the visa, and thus the applicant should have reasonably foreseen the difficulties in fulfilling his visa obligations.
105. A similar situation occurred in the matter of Teng and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 715. In that matter at [33], the Tribunal said:
The Tribunal took into account that the applicant’s father died before he was granted the business visa and considers his reliance on this as a humanitarian ground has less force than if the circumstance arose after he was granted the visa.
106. In contrast, the Tribunal in Reed and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 335 at [22] was willing to exercise its discretion when an applicant, after his visa was granted, became suddenly incapacitated by an unforseen illness.
107. In the Tribunal’s view it is clear that where humanitarian grounds are relied upon, and where those grounds arose before the granting of the visa and were thus largely foreseeable, they should be given no or little weight, and generally do not justify the Tribunal exercising its residual discretion in an application’s favour.
The applicant failed to raise these humanitarian grounds before the cancellation of his visa
108. In the matter of Teng [2004] (supra), the Tribunal at [33] also questioned the validity of humanitarian grounds as a satisfactory explanation, where as here, they were not earlier raised with the relevant authorities:
The applicant had responsibilities under the visa. During the whole of the period from 2000 until after the visa was cancelled, the applicant did not raise any of the problems, such as his need to return to deal with issues arising from the death of his father, with the relevant authorities.
The residual discretion may be used if the granting of a little more time would allow the applicant to fulfil his or her visa obligations
109. It is also a well established proposition that the Tribunal may exercise its residual discretion in order to give the applicant a little more time to fulfil his or her visa obligations: Kim (supra); Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579 at [17]; Badenhorst and Minister for Immigration and Multicultural Affairs [2006] AATA 742 at [37]; Chong and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 45; Burgv Minister for Immigration and Citizenship [2007] AATA 1630 at [62].
110. If however, the extra time would not help the applicant realistically fulfil these obligations in the near future, and even where the applicant has an otherwise satisfactory explanation, then the Tribunal should not exercise its discretion as there is little practical benefit in doing so. In other words, the Tribunal can give applicants more time to fulfil their visa requirements, but it cannot simply absolve them of these obligations altogether.
111. Again in the matter of Gunawan [2007] (supra) at [24] the Tribunal held:
Despite Mr Gunawan’s evidence that his father now accepts the role of a nurse in everyday care, there seems little likelihood that Mr Gunawan is in a position to leave his seriously ill father and move to Australia. Similarly, Mr Gunawan has been managing the family business in Indonesia and the person he says has been recruited to operate the business has yet to commit to that role on a permanent basis.
The residual discretion should not be used where an applicant has spent only minimal time in Australia, and has no serious and realistic intention (beyond vague intentions) to spend more time in Australia in the near future
112. The Tribunal should not exercise its residual discretion where as here the applicant has only spent a minimal amount of time in Australia, and has no serious and realistic intention (beyond vague intentions) to spend more time in Australia in the near future: Burg v Minister for Immigration and Citizenship [2007] AATA 1630 at [63]; Gunawan [2007] (supra) at [25]; Padilla and Minister for Immigration and Multicultural Affairs [2006] AATA 922 at [53]; Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898 at [47]; Tauriandy and Minister for Immigration and Multicultural Affairs [2006] AATA 183 at [66]; Jo and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 469 at [120]; Haryanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 317; and Hidayat and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 916 at [53]; Ng [2004] (supra) at [42]; Sutoyo [2004] at [20].
113. The Tribunal in Susanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 470 at [24]; went so far as to suggest:
Taken overall, I am satisfied that the applicant has not displayed any significant desire to spend the majority of his time in Australia (emphasis added).
114. The Tribunal should therefore only exercise its residual discretion in an applicant’s favour where he or she has at the very least, a significant and tangible future commitment to residing in Australia. There is no evidence of this in the applicant’s case.
The residual discretion should not be used where an applicant has not permanently moved with his or her family to Australia, and has no serious and realistic intention (beyond vague intentions) to do so in the near future
115. There is a large volume of authorities which say the Tribunal should not exercise its residual discretion where as in this case an applicant has not permanently moved with his or her family to Australia, and has no serious and realistic intention to do so in the near future: Burg v Minister for Immigration and Citizenship [2007] AATA 1630 at [63]; Teo v Minister for Immigration and Citizenship [2007] AATA 118 at [88]; Gunawan [2007] (supra) at [24]; Abbu [2006] (supra) at [47]; Padilla [2006] (supra) at [53]; Tauriandy (supra) [2006] AATA 183 at [64]; Jo [2004] (supra) at [120]; Haryanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 317; Mulyadi and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1019 at [52]; Hidayat [2004] (supra) at [53]; Permana and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 802 at [65]; Ng and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 721 at [42]; and Susanto and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 470 at [23].
The residual discretion should not be exercised where the visa holder has not acquired a permanent residential property in Australia, and has no serious and realistic intention (beyond vague intentions) to do so in the near future
116. Linked to the concept of time spent in Australia, and the intention to move permanently to Australia, is whether the applicant has purchased a residential property in Australia. The Tribunal has held that, generally speaking, it should not exercise its discretion where the visa holder has failed to acquire a permanent family home, or has no serious and realistic intention (beyond vague intentions) to do so in the near future: Gunawan [2007] (supra) at [38]; Abbu [2006] (supra) at [47]; Susanto [2004] (supra) at [23]; Hidayat [2004] (supra) at [53].
117. The Tribunal has also noted that just because an applicant has purchased a family home, does not necessarily mean the visa holder is likely to settle permanently in Australian in the near future: Mulyadi and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1019 at [52].
118. The applicant in this case has not acquired a home in Australia.
The residual discretion should not be used where an applicant and his or her family have not developed a significant connection to Australia; or where they still have overwhelming ties to other countries
119. The Tribunal has previously held that the residual discretion should not be used where an applicant and his or her family have not developed a significant connection to Australia: Hidayat [2004] (supra) at [53]; Teng [2004] (supra) at [34]. Linked to the above factors, the hallmarks of connection seem to include the amount of time spent in Australia, whether the applicant and his family have permanently moved to Australia, and whether a residential property has been purchased in Australia.
120. The Tribunal in Haman v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113 also considered the applicant’s ‘ties to other countries’. The Tribunal noted that most of the applicant’s family and friends remained still overseas, as is the case here.
The residual discretion should not be exercised unless the applicant can demonstrate a sustained commitment to trying to fulfil his or her visa obligations over a significant period
121. It appears to be another well established proposition, that the residual discretion should not be exercised unless the applicant has shown a sustained commitment to trying to fulfil his or her visa obligations: Deswandy and Ors and Minister for Immigration and Citizenship [2007] AATA 1405 at [42].
122. In Gunawan [2007] (supra) at [22], the Tribunal further stated:
In Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103 and Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656, the Tribunal held that the aim of the Act is to benefit business owners who settle in Australia and actively manage their business. In Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs [2006] AATA 527 the Tribunal referred to the need to demonstrate a sufficient level of sustained commitment over a 24-month period (emphasis added).
123. In Kow Phoon [2006] (supra) at [45], the Tribunal held:
The Tribunal accepts that the Applicant was initially constrained in his initial attempts to invest in Australia by Malaysian foreign exchange restrictions. The Tribunal further accepts that those attempts which the Applicant did make to obtain an interest in an eligible business in Australia were carefully considered and bona fide. It would also appear that the Applicant is an astute and cautious businessman who would prefer to ensure that any business venture was a suitable investment and appropriate to his skills before entering into any commercial arrangement. Unfortunately for the Applicant, however, the sum total of his approach is that he cannot be considered to have demonstrated a sufficient level of sustained commitment over a 24 month period to warrant the exercise of the residual discretion not to cancel his visa (emphasis added).
124. The Tribunal notes, that even where the applicant had a bona fide intention to satisfy his visa obligations, and there were good commercial reasons for the delay in satisfying his visa obligations, this will not be usually enough to justify the exercise of the residual discretion, if there was not also a sustained commitment over a significant period. The evidence here does not in the Tribunal’s view show this.
The residual discretion should not be exercised unless the applicant can show he or she has a genuine and realistic intention to begin playing a more substantial role in the eligible business in the near future
125. Linked to the idea of sustained commitment over a significant period, the residual discretion should not be exercised in an applicant’s favour unless he or she can show a genuine and realistic intention to begin playing a more substantial role in the eligible business in the near future: Burg v Minister for Immigration and Citizenship [2007] AATA 1630 at [63]. Other than the applicant’s vague statement of intent there is nothing to support a finding in his favour on this issue.
The residual discretion may be exercised where the cancellation will cause hardship for the applicant and his or her family
126. Divergent views have been expressed in the Tribunal as to whether the residual discretion may be exercised where the cancellation will cause hardship for the applicant and his or her family. Where this ground has been accepted as a relevant factor, there also appears to be considerable discussion on when exactly ‘hardship’ justifies use of the discretion.
Can the Tribunal consider the applicant’s potential hardship and the hardship of the applicant’s family?
127. The Tribunal notes that no application has been made for review of the cancellation of the secondary visas of the applicant’s family. As stated above, there is no legislative guidance on when the residual discretion should be exercised under s 134(1). As a consequence, the Tribunal has in the past attempted to solve this problem by importing the residual discretionary factors from s501 character ground cancellations (which exist by way of the Minister’s directions pursuant to s 499): Teo [2007] (supra) at [79]; and Permana [2004] (supra) at [12]. These factors include:
(a)the best interests of a child;
(b)the benefit or detriment to the Australian community;
(c)hardship to the applicant and applicant’s family members; and
(d)whether setting aside a decision would adversely affect the objectives of Australia’s migration policy.
128. It is clear that in many circumstances this approach is appropriate. It however poses a problem with regard to the criteria of hardship, because Parliament has already provided business skill cancellations their own, specific hardship test under s134(4) and (5); being extreme hardship.
129. As the Tribunal noted in Awesa and Minister for Immigration and Citizenship [2007] AATA 53 at [36]; citing Deputy President McMahon in Re Wang and Minister for Immigration and Multicultural Affairs[2000] AATA 961, Parliament deliberately chose the word ‘extreme’ for hardship rather than merely hardship or undue hardship. Parliament also deliberately chose to extend this exception only to secondary holders, not primary applicants. It therefore makes little sense for a primary applicant, being the ‘less innocent party’, to not have his or her visa cancelled simply because he can satisfy a less onerous test of mere hardship.
130. The acceptance of a test of “mere hardship” for business skill cancellations under 134 appears to render superfluous the specific extreme hardship provisions of s134(4) and (5), as well as the Federal Court’s attempt to define them in Kim v Minister for Immigration Multicultural and Indigenous Affairs[2004] FCA 31. It would be unnecessary for applicant’s secondary holders to make their own applications for extreme hardship if the Tribunal had the power to prevent the cancellation of their visas on mere hardship grounds.
131. For this reason, the Tribunal in Ip and Minister for Immigration and Citizenship [2007] AATA 1413 at [31] - [33], when considering an applicant’s son who had failed to bring his own separate application for extreme hardship found:
Having heard from Mr Eteuati and considered the provisions of the Act, I find that I have no role to play in relation to the visa held by Kin Yeung [the son]. The legislation contemplates different cancellation decisions in relation to each business visa held by a member of the family unit (s 134(4)). It is only in relation to such a decision that extreme hardship becomes a consideration (s 134(5)). No such decision is before me.
132. The Tribunal at [34] - [36], in any event, found there was no reason why it should utilise its residual discretion, and once again doubted its power to consider hardship or extreme hardship where no separate application had been made:
Finally, I must consider the residual discretion in s 134(1) identified by Kiefel J in Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31.
I do not consider the circumstances of Mr Ip’s son which I have just set out are such that I should exercise the residual discretion on that basis, assuming that it was a relevant matter which I doubt given my findings on the legislative regime. On the evidence, Mr Ip has chosen not to seek legal advice on that question, despite that being suggested to him. An application by his son could have been made to this Tribunal but has not been. (emphasis added).
133. In conclusion, the Tribunal is of the view that it should only consider hardship for business skill cancellations within the context of the test specifically provided in s134(4) and (5) of the Act. In that test, secondary applicants must bring their own separate applications and the relevant criterion is extreme hardship.
Alternatively, if the Tribunal can consider hardship within the context of the residual discretion, what factors might be relevant for consideration?
134. The Tribunal at various times has considered the following circumstances:
Where secondary holders have not brought their own separate applications, the Tribunal can assume that no hardship will befall the family members as a result of the applicant’s visa being cancelled
135. The fact that the effect of an applicant’s visa being cancelled will be that secondary holders will also have their visas being cancelled is not sufficient to justify the use of the discretion: Padilla [2006] (supra) at [51] - [53].
136. The Tribunal in Gunawan and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 1340 at [37] also noted:
However, in view of the fact that the son’s application for review is not to proceed I conclude that it is not considered that he would suffer any particular hardship by virtue of the cancellation of the applicant’s visa (emphasis added).
137. The Tribunal in Mulyadi [2004] (supra) at [52] further found:
No application was made for review of the decisions affecting the applicant’s wife or children and I can only assume from that that the cancellation of the family members’ visas would not result in any particular hardship to any of those people (emphais added).
138. It appears therefore, that where secondary applicants have not brought their own, separate applications, nor given their own evidence with regard to hardship, the Tribunal may assume that the cancellation of their visas would not cause any particular hardship by virtue of the cancellation of the applicant’s visa: see also Ip [2007] (supra) at [34] - [36]; Padilla [2006] (supra) at [51]; and Sutislio [2004] (supra) at [55] - [61].
The applicant’s specific and probable hardship is the relevant consideration, not the generic hardship of the applicant’s overseas country
139. The Tribunal notes that the trend of the Tribunal has been to reject carte blanche claims of extreme hardship based on merely belonging to a certain ethnic or religious class, or where the returnee’s country of origin is subject to general conditions of racial and political violence: Dawson v Immigration and Citizenship [2007] AATA 1222 at [11]; Re Riky Mareta Tenggara v Minister for Immigration and Multicultural Affairs [2006] AATA 472 at [21] and [22]; Santy Then v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 18; Lee v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 973 at [28].
140. The Tribunal’s view is that this would equally apply by analogy to claims of mere hardship or undue hardship.
141. It appears that it is the applicant’s specific and probable hardship that is the relevant consideration, not the generic hardship of the applicant’s overseas country. This approach was used by the Tribunal with regard to hardship arising out of a s501 character cancellation in Cheng and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 26 at [45].
142. In that matter, the applicant cited the substantially worse living conditions in Cambodia compared to Australia. To support his proposition, the applicant provided information from the World Health Organisation and other relevant bodies. The Tribunal at [48] and [53] however did not accept the applicant’s carte blanche argument, noting:
The Visa Applicant has his own business and the assistance of two maids to care for himself, his mother, the Applicant and the daughter when they are in Cambodia. They live in Phnom Penh as does the Applicant’s parents and brothers. The Visa Applicant possess assets, cash and property; worth on his own estimate not less that US$150,000. His income is said by him to be 50 times that of a civil servant.
In this matter there is no impediment to the family residing together in Cambodia. The Visa Applicant is well able to afford to maintain his family at a comfortable standard of living, they being well cared for in the Cambodian society.
Other factors where hardship is likely to occur
143. Hardship may be linked to the criteria of a serious intention to permanently settle in Australia, and a genuine and realistic intention to begin playing a more substantial role in the eligible business in the near future. The Tribunal in Teo at [84] held:
There will be considerable hardship for the applicant and his family if the visa is cancelled. He has put the last 3 to 4 years of his life into developing this business. He and his wife and children have made their plans to become permanent residents in Australia. These plans will have to be changed. The children’s schooling and university studies will be disrupted. This particularly applies to all 3 eldest children regardless of their age.
144. Hardship therefore is in the Tribunal’s view by comparison unlikely to occur where as in this case it appears that the applicant does not have a genuine and realistic intention to begin playing a more substantial role in the eligible business in the near future, has not made plans to permanently settle in Australia beyond vague intentions, and has no children currently studying in Australia who are likely to be disrupted if their visas are cancelled.
The cancellation must cause the hardship
145. By analogy with the extreme hardship provisions under s 134(5), the Tribunal is of the opinion that the Tribunal can only consider hardship if ‘the cancellation of that visa would result’ in hardship (emphasis added). In other words, it is the hardship which the cancellation actually causes that should be considered, not merely the applicant’s current circumstances which the Tribunal may have much sympathy for.
146. The Tribunal is of the view that if a visa holder is currently experiencing hardship by remaining in his or her overseas country but is nevertheless likely to remain there and continue to experience that hardship regardless of whether the cancellation occurs or not, it cannot thereby be said that the cancellation will cause hardship.
147. Linked to this ground is the primary consideration of being given extra time to fulfil one’s visa obligations. The Tribunal notes for example that the applicant in Gunawan [2007] (supra) at [24], may have been suffering hardship in that he was forced to remain in Indonesia to look after his father. The Tribunal appeared to accept this claim and sympathise with the applicant’s circumstances.
148. However, as he was likely to remain there regardless of whether the Tribunal cancelled his visa or not, it could hardly be said that the cancellation of his visa would actually cause hardship. The fact that an applicant may lose his or her ‘dream’ to permanently reside in Australia at some vague future date, does not justify the exercise of the residual discretion in his or her favour.
149. The Tribunal therefore is of the opinion that it should confine itself to considering the hardship the visa cancellation is actually likely to cause, in contrast to the hardship the applicant may already be experiencing by choice or force of circumstance.
The residual discretion may be exercised where it is in the best interests of a child
150. The Tribunal held, in the matter of Teo [2007] (supra) at [81], the residual discretion may be exercised where it is in the best interests of an applicant’s children. The Tribunal held in Haman [2002] (supra) at [72], that this factor is a matter of primary consideration, and should be given much weight.
The Tribunal’s duty is to offer an applicant the procedural fairness to raise the issue of the best interests of his children, not automatically find in an applicant’s favour where such an interest exists
151. In the decision of Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273, a majority of the High Court (with McHugh J dissenting), held that an applicant had a legitimate expectation that the decision-maker would make its decision in accordance with the United Nations Convention on the Rights of the Child.
152. The High Court did not require the decision-maker to make a decision in conformity with the Convention. Rather, where the decision-maker proposed to make a decision inconsistent with the Convention, procedural fairness required that the persons affected be given notice and an adequate opportunity of presenting a case against the taking of such a course. The High Court said:
(iv)The existence of a legitimate expectation that the delegate would act in a particular way did not compel the delegate to act in that way. However, if the delegate proposed to make a decision which did not accord with the principle that the best interests of the children were a primary consideration, procedural fairness required the delegate to give the children notice and an adequate opportunity of presenting a case against taking such a course (emphasis added).
153. However the Tribunal notes that in the subsequent High Court decision of Minister for Immigration and Multicultural Affairs v Lam (2003) 195 ALR 502, a majority of the Court at [81] - [83], [95], [98] - [100], [121], [122], [139] - [141], [147] and [152] expressed criticisms of the reasoning in Teoh (1995) (supra).
154. In any event, and even where the best interests of the child remain a legitimate expectation, the High Court in Lam (2003) (supra) pointed out that:
(ii)The doctrine of legitimate expectation cannot give rise to substantive, rather than procedural rights: [67], [148] (emphasis added).
155. In this case it is clear in the opinion of the Tribunal that it is not required to make a decision in accordance with the best interests of the applicant’s children.
Should the best interests of the child be considered within the framework of the residual discretion or within the context of extreme hardship?
156. While the Tribunal notes the importance of this factor as a primary consideration, it will not necessarily outweigh the other primary considerations. The Federal Court in Kim [2004] (supra) for example, was notably silent on this issue within the context of the residual discretion, but instead focused its attention on ‘a satisfactory explanation of the inaction’ and whether the applicant should be ‘given more time’, as outlined above. Having Australian born children (which is not the case here) was also not enough to prevent the applicant having his visa cancelled in Lam (2003) (supra).
157. The Federal Court in Kim at [29] - [34], for example, appears to have dealt with the best interests of the child primarily within the context of extreme hardship under s 134 (4) and (5). The Tribunal is of the opinion that this is the framework in which this particular issue is best addressed.
158. As noted above, it appears from the authorities that where as here no separate extreme hardship application has been made on behalf of a child, the Tribunal can assume no hardship will occur, or in the very least, that the hardship will not be extreme: Ip [2007] (supra) at [34] - [36]; Padilla [2006] (supra) at [51]; and Sutislio [2004] (supra) at [55] - [61]; Gunawan [2004] (supra) at [37]; and Mulyadi [2004] (supra) at [52].
If the best interests of the child are considered within the framework of the residual discretion, what factors are relevant for consideration?
159. In most circumstances, where an applicant’s visa is cancelled, it is in the best interests of the child to remain overseas with the applicant-parent. Where the child currently lives overseas with his or her parents and is being schooled there, even where the child is an Australian citizen, it appears that there is little reason why the residual discretion should be used to prevent the cancellation of the applicant-parent’s visa: Cheng and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 26 at [48].
The residual discretion should not be exercised unless the potential benefit to the Australian community outweighs its possible detriment, or where it has a negative impact on Australia’s international relations
160. In the matter of Teo [2007] (supra) at [83], the Tribunal commented that the visa holder’s business would be of considerable benefit to the Australian community. The Tribunal stated that the business would significantly suffer if the applicant’s visa was cancelled :
Of course, it may be possible for the applicant to pursue this business without a permanent visa, but it will undoubtedly be much more difficult for him and if he gives up or it proves too difficult if he loses his ability to travel freely between Australia and Malaysia and if his business loses its credibility because its main shareholder is based overseas, it is Australians generally and particularly those who would use the consultancy business to sell their expertise or services into South East Asia, who will be the losers.
161. Following Teo, The Tribunal is conversely of the view that the Tribunal should not exercise its residual discretion in a visa holder’s favour where an applicant, as in this case:
(a)is not required for the business’ operation to travel frequently to and from Australia;
(b)has chosen to spend virtually all of his time overseas,
(c)is not the major shareholder of the business;
(d)is essentially just a passive investor in the business; and
(e)having his visa cancelled, will not seriously impact upon the credibility of the business.
162. The Tribunal, in Tan and Anor and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 808 at [41], which involved a property development company, similarly said:
Likewise, there was no evidence to indicate that Ms Tan would be prevented from being involved in other property development activities in this country if her visa were cancelled, subject to normal foreign investment regulations of the Australian government.
The residual discretion should not be exercised where it adversely affects the objectives of Australia’s migration policy
163. The fourth factor for consideration mentioned in Teo [2007] (supra) at [86] is whether the cancellation would be contrary to the objectives of Australia’s migration system. The Tribunal held that:
this would only occur where an applicant has made no effort to meet his original commitment, or where he obtained his visa effectively by misleading the Department.
164. The Tribunal in Teo at [87], citing the Federal Court in Kim [2004] (supra) at [14] further went on to say:
the most relevant criterion under Subclass 127 Visa was the requirement under clause 127.216 that the applicant have a genuine realistic commitment to establish, participate in an existing, eligible business.
165. It appears that this factor is linked to whether the explanation for inactivity largely involved circumstances that were in existence before the granting of the visa.
166. If for example, a visa holder, at the time of making an application for a business skills visa, was in a situation that essentially prevented him or her from permanently moving to Australia or fulfilling his or her visa obligations, and if it was likely that these circumstances were unlikely to change once the visa was granted, then the Tribunal is entitled to question whether the applicant really had a genuine realistic commitment to establish or participate in an existing, eligible business.
The residual discretion should not be used where a more appropriate visa option or path is available to the applicant. The residual discretion should not be used merely because it is the option which would most convenience the applicant.
167. In the matter of Barnett and Minister for Immigration and Citizenship [2007] AATA 1454 at [37], the Tribunal noted:
The Tribunal has considered whether the cancellation of his visa would, in the event of him conducting further due diligence, or proceeding to a purchase, warrant the exercise of theresidual discretion in his favour. As Mr Barnett would be eligible to apply for other visas so that he could visit Australia for this purpose, the Tribunal can find no reason justifying the exercise of the residual discretion to restore Mr Barnett’s visa (emphasis added).
168. By analogy, the Tribunal should not exercise its residual discretion where as here it appears that it would be more appropriate for the applicant and his or her family members to take other more appropriate avenues; whether it be by making their own extreme hardship applications; or where it is more appropriate to obtain protection visas, which Parliament has deliberately designed to assist in cases of discrimination and persecution.
169. The Tribunal should not view applicant’s current business skills visa as the last, best hope, for him or her to remain in Australia. As the Tribunal noted in Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579 at [46]:
Mr Nagaria’s submissions, concerning the likely effect cancellation of his business visa may have on his ability to obtain another visa in the future in light of his age and the removal of the subclass 128 visa in 2003, are not accepted. Cancellation of his business visa does not preclude him from making application for a visa in the future.
170. Cancellation of business skill visas create no preclusion periods. This means that if an applicant’s visa is cancelled, there is nothing preventing him or her from simply applying for another business skills visa at a more appropriate time in the future. In fact, the business skills regime seems to have been specifically set up to enable people to reapply when their circumstance allow.
171. By contrast, if the Tribunal exercises its residual discretion in an applicant’s favour, his or her right to permanent residency will, with few exceptions, continue to exist into perpetuity.
172. The Tribunal is of the view that in most circumstances, the residual discretion should not be exercised where another more appropriate visa is available, or where it may be more appropriate for an applicant to simply reapply at a more suitable time in the future. The Tribunal should not exercise its discretion simply as a matter of convenience to an applicant.
Conclusion
173. The Tribunal is of the view that in all the circumstances, it should not exercise its residual discretion to not cancel the applicant’s visa.
DECISION
174. The Tribunal affirms the decision under review.
I certify that the 174 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member.
Signed: ....................(Sgd. R Riberi)........................
AssociateDates of Hearing 30 and 31 August 2007
Date of Decision 20 December 2007
Counsel for the Applicant Mr M Solomon
Solicitor for the Applicant Fiocco’s Lawyers
Counsel for the Respondent Mr S Ferguson
Solicitor for the Respondent Australian Government Solicitor
- AGLC
- Philp and Minister for Immigration and Citizenship [2007] AATA 2092
- Case
- [2007] AATA 2092
- Decision Date
CaseChat Overview and Summary
The legal issues that the Tribunal had to resolve were whether Philp's ownership interest in the business was substantial and whether he had indeed actively participated in the day-to-day management of the business at a senior level. Additionally, the Tribunal needed to determine whether there were any grounds for it to exercise its residual discretion in light of the evidence presented. The primary focus was on the interpretation of the legislative criteria and the evidence provided by Philp regarding his involvement in the business.
In reaching its decision, the Tribunal considered the evidence provided by Philp and the relevant statutory provisions. It found that Philp had not demonstrated that he had obtained a substantial ownership interest in the business or that he had actively participated in its management at a senior level. The Tribunal also concluded that there were no grounds for exercising its residual discretion. Consequently, the Tribunal affirmed the Minister's decision to cancel Philp's visa.
The Tribunal's decision was based on a meticulous analysis of the legislative criteria and the evidence submitted. It found that Philp's claims did not meet the required thresholds for the grant of a Business Skills Visa. The Tribunal's affirmation of the Minister's decision highlighted the importance of substantiating claims of ownership and active management participation with concrete evidence.
Orders
Orders of the court
The Tribunal affirms the decision under review.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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