Pienaar and Minister for Immigration and Citizenship

[2007] AATA 1771

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1771

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          Q 2006/560
  )          Q 2006/561

GENERAL ADMINISTRATIVE DIVISION		)
Re		Nicole Ann Pienaar and Charles Neville Pienaar

Applicants

And Minister for Immigration and Citizenship

Respondent

DECISION

Tribunal Senior Member B J McCabe

Date18 September 2007

PlaceBrisbane

Decision The decision to cancel the subclass 127 (business skills) visa of Charles Neville Pienaar is affirmed. The decision to cancel the secondary visa of Nicole Ann Pienaar is set aside.  

....................[Sgd]..................

SENIOR MEMBER

CATCHWORDS

IMMIGRATION & CITIZENSHIP – Visas – cancellation of business skills visa – whether there is an eligible business – whether applicant has made genuine efforts – no eligible business or genuine efforts – decision affirmed

IMMIGRATION & CITIZENSHIP – Visas – cancellation of secondary visa – whether applicant would suffer extreme hardship – ending serious long-term relationship would amount to extreme hardship – decision set aside

Migration Act 1958 s 134

REASONS FOR DECISION

18 September 2007 Senior Member B J McCabe         

1. The Minister decided to cancel Charles Neville Pienaar’s business skills visa under s 134 of the Migration Act1958. The Minister also cancelled the secondary visa of Ms Nicole Pienaar, Mr Pienaar’s daughter. Both applicants say their visas should not have been cancelled.

2.      The outcome of the review in relation to Mr Pienaar turns on whether or not he has obtained (or has made genuine efforts to obtain) a substantial ownership interest in an eligible Australian business, and has played (or has made genuine efforts to play) an active role in the senior management of an eligible business. If Mr Pienaar is successful in his application for review, his daughter will be allowed to stay. If he is unsuccessful, Ms Pienaar must establish that she will suffer extreme hardship if her visa is cancelled.

3.      For reasons I will explain, I am satisfied the cancellation in relation to Mr Pienaar should be affirmed. The decision in relation to Ms Pienaar should be set aside.

the factual background and issues for determination

4.      Mr Pienaar is a South African businessman. He deals in waste paper products and lives in Durban. Mr Pienaar was granted a subclass 127 (business skills) visa on 11 February 2003. His daughter was granted a visa on the basis that she was a member of Mr Pienaar’s family. Both applicants entered the country for the first time on 28 March 2003. Mr Pienaar did not stay for long: he told the hearing he has only spent 62 days in Australia since 2003. He remains in South Africa and carries on business from there, although he deals with companies all over the world. He has particularly strong business links with some Indian companies.

5.      Mr Pienaar registered a company in Australia called Disting Pty Ltd in April 2003. He is the only shareholder and director of the company. Apart from consuming some professional services, the company does not appear to have done anything in this country. He described it (in his statement, and in his oral testimony) as an offshore trading company. It receives some commissions on sales of goods exported from South Africa to India but it does not appear to acquire or supply any goods or services within Australia. Mr Pienaar explained he was the only employee. He says he does most of his business over the telephone, although he also uses email. He does not always keep extensive records: for example, he told the Tribunal it was not his practice to issue receipts or invoices in respect of sales of products to Indian companies that generated commission income for Disting (although he noted there were bills of lading issued). Mr Pienaar is the company’s human face and it carries on business wherever he is at the time.

6.      Disting was unable to secure any business in Australia because of the relative strength of the Australian dollar and higher shipping costs for Australian products. But that may be about to change: in the last six months, the company has engaged in what Mr Pienaar says are promising discussions with an Australian business to import pulp from South Africa for use in the manufacture of toilet tissue. Mr Pienaar says the conversations are the fruit of his consistent efforts to find Australian business for his company.

7.      It will therefore be necessary for me to decide whether Disting is an eligible business in Australia within the meaning of the Act. It will also be necessary for me to decide what I should make of the recent flurry of activity that Mr Pienaar says is the fruit of his earlier efforts.

8.      Mr Pienaar says he considered a range of other business ventures since 2003. Most of them came to nothing. The plan he provided to the respondent when he made his original application became impossible to implement when his intended business partner in Australia became unavailable. He also approached various franchisors to determine whether a franchise business might become available. He says he investigated two recycling businesses but they did not stack up.

9.      One business venture showed more promise. Mr Pienaar incorporated a company called Image Designs and Promotions Pty Ltd on 20 May 2005. I note that date of incorporation comes after the respondent asked Mr Pienaar to complete the 24 month survey of his activities, although Pienaar says the establishment process was in train before he received the survey. He held 51% of the shares in the company. The rest of the shares were held by Ms Deborah Wood. Mr Pienaar told the hearing he was familiar with Ms Wood’s business in South Africa and believed she could repeat her success in Australia by establishing a carbon copy of her South African operation in this country. I asked Mr Pienaar what he brought to the transaction. He was effectively a passive investor. He said he kept in frequent contact with Ms Wood by phone. After it traded unsuccessfully for several months, he asked Ms Wood to produce some cash flow projections. He said it was obvious the business was not going to make a proper return, so he decided to terminate his involvement. That company is in the process of being wound up.

10. It will be necessary for me to consider whether Mr Pienaar’s participation in Image or any of the other investigations are capable of satisfying the requirements of s 134(2), which refers to genuine efforts.

11.     Ms Pienaar proceeded to settle in this country after she arrived here. She had already commenced tertiary study in South Africa before the visa was granted but she later transferred to QUT in Brisbane where she completed her degree. She is now employed in Australia. Evidence was provided in the form of emails from her supervisor that suggested she is highly regarded by her employer. She was recently promoted and transferred to Sydney where she now resides with her partner, Mr Dietrich. She has been involved in a relationship with Mr Dietrich for over a year but they have been living together in what she described as a serious long term relationship since March. It will be necessary for me to decide whether, in all the circumstances, cancellation of Ms Pienaar’s visa would result in extreme hardship within the meaning of s 134(5).

is disting an eligible business in australia?

12.     The expression eligible business is defined in s 134(10). The Minister’s statement of facts and contentions notes there was no evidence available at the time of the cancellation decision that would enable the decision-maker to form the view that Disting’s activities would result in any of the outcomes described in the legislation. Given the company had not engaged (nor was it actively seeking to engage) in any trading activities in Australia at that point, I accept that was the right decision at the time. The dearth of trading activities in this country also suggests the company was not carrying on a business of any kind in Australia as required under s 134(1).

13.     I doubt the potential deal discussed earlier this year (ie, after the cancellation decision) will result in the development of an eligible business in Australia. Disting is talking about sourcing pulp in South Africa and selling it to an Australian company. The evidence does not suggest Disting will be doing anything in this country – it is effectively carrying on business as an exporter of South African products rather than an Australian importer and distributor of South African products. The mere fact the company has a presence here or is registered in this country does not make it an Australian business if it is not actually trading here. In all the circumstances, I cannot be satisfied there is a reasonable prospect that the company will establish an eligible business in Australia in the future.

14.     It follows that Mr Pienaar’s efforts to establish and participate in the management of Disting are irrelevant for the purposes of the Act.

do mr pienaar’s other activities satisfy the requirements set out in s 134 of the migration act 1958?

15.     Mr Pienaar appears to have played a passive role in the management of Image. There is no evidence to suggest that he sought any other role. The business appeared to turn on the efforts and skills of Ms Wood. Mr Pienaar said he wanted her to replicate her success in South Africa. His only role was to provide some capital. He was an investor, not a manager. It would have been difficult for him to play any other role (in Image, or Disting) given his extended absences from Australia.

16. The original business proposal he developed when he obtained the visa quickly disappeared when his proposed partner became unavailable. There was some evidence that Mr Pienaar has since had discussions with other businesses in Australia about opportunities (apart from the potential for Australian companies to consume products he produced overseas) but none of these discussions ever amounted to anything of substance, and there is no evidence to suggest the discussions were pursued with particular vigour. That is unsurprising given Mr Pienaar appears to have remained outside Australia carrying on his South African business for most of the period prior to the cancellation decision. There have been no business proposals developed, and no partners identified or assets or capital allocated to any venture. When I have regard to the factors set out in s 134(3), I cannot be satisfied Mr Pienaar has made genuine efforts within the meaning of s 134(2).

17. I am therefore unable to accept Mr Pienaar has satisfied the requirements of s 134 in the period prior to the visa cancellation. I am not aware of any evidence which suggests the residual discretion in s 134(1) ought to be exercised in favour of Mr Pienaar. The decision in relation to Mr Pienaar must therefore be affirmed.

the position of the secondary visa holder

18. The secondary visa is automatically cancelled under s 134(4) unless doing so would lead to extreme hardship to the person: s 134(5). Ms Pienaar says she will experience extreme hardship if she is forced to give up her lifestyle, job and relationship and return to South Africa. She explained in her evidence that South Africa was a very unsafe place. She spoke of being a victim of violent crime during her life in that country. She also spoke of discriminatory government policies that would make it harder for her to get a job.

19.     I accept South Africa faces challenges and that life there may be less comfortable than it is in Australia. I am not satisfied that requiring an educated person to return to South Africa after a relatively short stay in Australia when she has family ties in her old home constitutes extreme hardship. But that is not the end of the story.

20.     I accept Ms Pienaar’s departure would have a devastating impact on her relationship. I accept Ms Pienaar has entered into a serious long-term domestic relationship with her partner. That relationship is unlikely to continue if she is required to leave the country. I think requiring her to do so would lead to extreme hardship. I am therefore satisfied that the secondary visa of Ms Pienaar should not be cancelled.

conclusion

21.     The decision to cancel the business skills visa of Mr Pienaar is affirmed. The decision to cancel the secondary visa of Ms Nicole Pienaar is set aside. Ms Pienaar is permitted to remain in Australia under the terms of the visa.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed.....................................................................................
  Associate:     Stephen O’Grady

Date of Hearing  6 July 2007

Date of Decision  18 September 2007
For the applicant  Ms A Linacre, solicitor
For the respondent                   Mr H de Korte, solicitor