Pillay and Minister for Immigration and Multicultural and Indigen Ous Affairs

[2003] AATA 344

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 344

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2002/1244

GENERAL ADMINISTRATIVE DIVISION  DIVISION		)
Re		AUCHUTHAN PILLAY

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal MS N BELL

Date15 April 2003

PlaceSydney

Decision The Tribunal affirms the decision under review.

(sgd) Ms N. Bell
  Member

CATCHWORDS

Migration – cancellation of business visa – whether applicant has made a genuine effort to obtain a substantial ownership in an eligible business – whether applicant has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business – decision affirmed

Migration Act 1958 s 134

REASONS FOR DECISION

15 April 2003 MS N BELL           

1. This is an application by Mr Auchuthan Pillay ("the Applicant") for review of a decision dated 15 July 2002 of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs ("the Respondent") to cancel the Business Visa issued to the Applicant pursuant to section 134 of the Migration Act 1958 ("the Act"). At the hearing before the Tribunal the Applicant was represented by Mr S Gerber of Counsel and the Respondent was represented by Mr M Allatt of the Australian Government Solicitor’s Office. The Tribunal had before it the documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (the “T-Documents”) and documentation relating to the Applicant’s inquiries about investments in Australia together with the parties' Statements of Facts and Contentions. The Applicant gave oral evidence to the Tribunal.

background

2.      The Applicant, who is aged 47, was granted a subclass 127 Business Visa on 3 February 1999. The Applicant's wife and their three children were granted secondary visas. All visas were valid for three years. The Applicant entered Australia on 2 April 1999 and departed on 12 April 1999. He entered Australia again on 22 December 2000 and departed on 3 January 2001. The Applicant next entered Australia on 1 October 2001 and departed on 9 October 2001 and made his last visit on 24 December 2001, departing on10 January 2002.

3. By letter dated 28 March 2002 the Respondent notified the Applicant of his intention to cancel the Applicant’s Business Visa under section 134 of the Act for failure to meet the requirements of the Visa. On 15 July 2002 a delegate of the Respondent decided to cancel the Applicant's visa and those of his wife and children. The Applicant submitted an opposition to the cancellation of his Visa on 14 August 2002. On 14 August 2002 the Applicant lodged an application for review of the decision to cancel his visa with this Tribunal.

legislation

4. Section 134 of the Act empowers the Respondent to cancel a Business Visa in certain circumstances. The relevant provisions of the Act in this case are sections 134(1),(2),(3),(5) and (10) which provide as follows:

"134 - Cancellation of business visas

(1)Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:

(a)       has not obtained a substantial ownership interest in an eligible      business in Australia; or

(b)       is not utilising his or her skills in actively participating at a senior level                  in the day-to-day management of that business; or

(c)       does not intend to continue to:

(i)        hold a substantial ownership interest in; and

(ii)       utilise his or her skills in actively participating at a senior level                  in the day-to-day management of;

an eligible business in Australia.

(2)The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and

(c)       intends to continue to make such genuine efforts.

(3)Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:

(a)       business proposals that the person has developed;

(b)       the existence of partners or joint venturers for the business proposals;

(c)research that the person has undertaken into the conduct of an eligible business in Australia;

(d)the period or periods during which the person has been present in Australia;

(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;         

(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

(g)       business activity that is, or has been, undertaken by the person;

(h)whether the person has failed to comply with a notice under section 137;

(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:

(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and

(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).

(5)The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

…

(10)     In this section:

business visa means:

(a)       a visa included in a class of visas, being a class that:

(i)        has the words "Business Skills" in its title; and

(ii)       is prescribed for the purposes of this paragraph; or

(b)       a visa:

(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and

(ii)that is of a kind prescribed for the purposes of this paragraph; or

(c)a return visa that is granted to a person who is or was the holder of a business permit or business visa;

that is or was granted on or after 17 February 1992.

designated investment has the meaning given by the regulations.

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 or 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;

(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.

established business in Australia visa means a business visa a criterion for whose grant:

(a)       relates to the applicant having an established business in Australia; or

(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).

family member's visa means a business visa held by a person:

(a)who is or was a member of the family unit of another person who held a business visa; and

(b)who would not have held the business visa if he or she had never been a member of the family unit of the other person.

investment-linked visa means a business visa a criterion for whose grant:

(a)       relates to the holding of a designated investment; or

(b)is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).

member of the family unit has the meaning given by the regulations.

ownership interest, in relation to a business, means an interest in the business as:

(a)       a shareholder in a company that carries on the business; or

(b)       a partner in a partnership that carries on the business; or

(c)       the sole proprietor of the business;

including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

relevant designated investment, in relation to an investment-linked visa (other than a family member's visa), means the designated investment that was, in deciding to grant the visa, regarded as satisfying the criterion referred to in paragraph (a) of the definition of investment-linked visa.

return visa has the same meaning as in the regulations.”

issues

5. The Applicant conceded that the Respondent was properly satisfied of the matters set out in section 134(1)(a),(b),(c) in that the Applicant :

·has not obtained a substantial ownership interest in an eligible business in Australia;

·is not utilising his skills by actively participating at a senior level in the day-to-day management of an eligible business;

·does not continue, or intend to continue, to hold a substantial ownership interest in an eligible business; or

·does not continue, or intent to continue, to utilise his skills in actively participating at a senior level in the day-to-day business of an eligible business.

6.      The Applicant and the Respondent were also in agreement that the Tribunal should focus on events and evidence of those events relating to the period up to and including the date of the decision to cancel the visa, that is, 15 July 2002.  The Tribunal agrees that is the correct approach.

7. It remains for the Tribunal to consider whether the Respondent may be satisfied of the matters set out in section 134(2) of the Act which relate to any "genuine effort" made by the Applicant to obtain a substantial interest in an eligible business and to actively utilise his skills in participation at a senior level in the day-to-day management of that business. Section 134(3) sets out a number of matters which the Minister may take into account in determining whether a person has made the "genuine effort" referred to in subsection 2. In addition, the guidelines set out in the Migration Series Instructions (MSI), at paragraph 4.5..1, list some factors to be taken into account by decision-makers in determining whether a genuine effort has been made. The Tribunal must therefore, by reference to the matters set out in section 134(3) and MSI paragraph 4.5.1, determine whether the Applicant has made a genuine effort of the kind described in section 134(2).

applicant's evidence

8.      The Applicant told the Tribunal that he is a South African businessman, currently running a townhouse development business with approximately 75 permanent staff and a similar number of sub contractors and with an output of 16 townhouses in an average year.  He has had this business for 15 years.  He also has an industrial bearings business, called Rowcam, which employs 4 staff and has a turnover of 150,000 Rand per month.  He has had that business for 22 years.  Previously he owned a transport company with some 20 trucks and a Coca-cola wholesale business, both of which he sold.

9.      His background is one of involvement in his family’s business which is hotels.

10.     The Applicant told the Tribunal that he had understood, when he applied for his visa, that he was required to invest in a business in Australia within three years.  He said his first trip to Australia was to Brisbane and the Gold Coast from 2 April 1999 to 12 April 1999.  He did not make any inquiries about business opportunities there before his trip and found that he did not like either Brisbane or the Gold Coast.  He had some discussions with people whose names he could not recall and looked at two properties.

11.     The Applicant said his second trip to Australia was from 22 December 2000 to 3 January 2001 to Melbourne and Adelaide.  He said that he brought his family with him on this occasion and the trip to Adelaide was just a holiday.  He said that in Melbourne he spoke to some people but was unable to look at any businesses as it was the holiday period and he was told to come back at another time.

12.     The Applicant said that his next trip was from 1 October 2001 to 9 October 2001 to Perth where he had negotiations about the purchase of a hotel in Subiaco.  He said he had learnt of the hotel from John Chapman, a migration consultant in South Africa.  He said he had discussions in Perth with a real estate agent called Peter who worked for White and Associates, Real Estate Agents and made an offer of Aus $1.4 million for the hotel after inspecting it twice and looking at the books of the hotel.  He said that about one week after he went back to South Africa Peter told him that the vendors wanted Aus $1.9 million for the hotel but would probably accept Aus $1.7 million.  The Applicant said “no” to this sum and considered the matter at an end.  He said that Peter continued to telephone him about the hotel and he agreed to Peter sending him some documentation about it.  He said this took place in about May 2002 and he received the documentation in September 2002 (see Exhibit A2).

13.     The Applicant said that he also began negotiations with a man called Frank Dellanot in Perth who was building a large 56 unit apartment complex and had a management company connected with that development.  He said his negotiations with Mr Dellanot began in 2001 but no purchase price has yet been discussed as the development is not yet completed and turnover and profit have yet to be ascertained.  He said he is still negotiating with him and is looking to invest at the level of a 45% shareholding.  He said he has seen the building but does not have anything in writing about the negotiations or the building nor any pictures of it.

14.     Exhibit A2 is documentation concerning a hotel development in Perth called Kwinana.  The Applicant said, however, that he was never really interested in this development or in investing in it.

15.     The Applicant said his next and last visit to Australia was to Sydney and Melbourne from 24 December 2001 to 10 January 2002 and he brought his children with him for a holiday.  He said he tried to contact a man he had met in South Africa but was unable to make contact with him.

16.     The Applicant said that from January to July 2002 when the decision was made to cancel his visa he was still having discussions with Mr Dellanot but had made no other inquiries nor had any other serious discussions.

17.     He said the upper limit of the amount he would have had to invest in a business in Australia was approximately Aus $1.5 million and that at the time of the decision to cancel his visa he had some Aus $550,000 invested in short term deposits with banks in Australia.

consideration

18.     The issue for the Tribunal to consider is whether the Applicant made a genuine effort to obtain an interest in an eligible business in Australia. The Tribunal accepts the Applicant's evidence as follows:

·he made an offer on a hotel in Perth in October 2001 but one week later, when a counter offer was made by the vendor, he ceased to be interested in the hotel;

·he had discussions with various people in relation to purchasing property in Australia, including a migration consultant and a real estate agent, but none of those discussions have been either fruitful or extensive;

·he has entered negotiations for the purchase of a share of the management rights to an apartment complex but those negotiations have not proceeded to a discussion of purchase price;

·he has visited Australia on four occasions for a total of 51 days in the period from the date of grant of visa (3 February 1999) to the date of the decision to cancel his visa (15 July 2002);

19.     There is no evidence before the Tribunal to establish that the Applicant's discussions with Mr Dellanot will result in the purchase of a share in his management company.

20. The Tribunal considers that it is appropriate for it to have regard to the matters set out in section 134(3) of the Act. In relation to those matters the Tribunal finds, on the basis of the T-documents and the Applicant's evidence, as follows:

·     no written business proposal was developed in relation to any of the businesses investigated by the Applicant. There is no evidence before the Tribunal of the detail of the proposed purchase of a share of the management company;

·     there is no evidence of a joint venture;

·     there is no evidence of the Applicant having conducted research into the businesses he considered beyond oral evidence that he examined the books of the Perth hotel;

·     the Applicant has spent only 51 days in Australia in the period up to the date of the decision to cancel his visa; 

·     the assets transferred to Australia by the Applicant at the date of the decision to cancel were a total of AUS$550,000 all deposited in short term bank investments and not used in the acquisition of an ownership interest in a business;

·     no business activity has been undertaken by the Applicant.

21.     The Tribunal notes the MSI is a document setting out the guidelines of the Respondent in considering whether a “genuine effort” has been made. Paragraph 4.5.1 of the MSI sets out the following criteria:

“(a)     business proposal which is considered genuine, realistic and achievable;

(b)       formal contract with partners or joint venturers;

(c)written evidence of detailed consultations with at least 3 business advisers (accountant, lawyer, bank/financial institution, state/territory government, Business Development Office, AUSTRADE, Business/Trade Association);

(d)physical presence in Australia for more than 6 months since first arrival as a business skills class migrant;

(e)transfer to, and retained in, Australia at least 50% of the funds indicated as available to transfer within two years;

(f)minimum Australian $100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant;

(g)minimum Australian $100,000 business activities as indicated by turnover. This may include other business activity not considered "eligible business" but cannot include passive investment eg purchase of shares;

(h)failure to comply with a notice for information under s.137 ie mandatory monitoring of Australian address and return of survey forms.”

22. In considering the matters set out in MSI paragraph 4.5.1 and their application to the Applicant's circumstances, the Tribunal concludes, on the basis of the Applicant’s evidence and the T documents, that matters (a) to (g) are not present, although the Tribunal notes the transfer by the Applicant of a sizeable sum of money. The Tribunal also notes that the Applicant complied with a section 37 Notice.

23. Taking all of these matters into account, the Tribunal concludes that the Applicant did not make a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. The Applicant had available to him substantial funds for investment in Australian business but made no such investment and appears to have made little use, in terms of effort to invest or involve himself in Australian business, of the short periods of time he spent in Australia. It follows that he did not make a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of a business. Mr Gerber, for the Applicant, submitted that all that is required, to satisfy the requirement for a “genuine effort”, is one effort or one incidence of effort and that this is evident in the Applicant’s offer to purchase the hotel in Perth. The Tribunal rejects this submission and considers that, in the context of a period of three years, one isolated incidence of an attempt to obtain an ownership interest in an eligible business in Australia does not meet the standard set out in section 134(2) of the Act.

24. It follows that there is no basis on which the Applicant can avail himself of the provisions of section 134(2) of the Act and, given that he has not obtained a substantial ownership interest in an eligible business in Australia, the Tribunal considers that the Respondent decided appropriately to cancel the Applicant’s business visa pursuant to section 134(1) of the Act.

decision

25.     The Tribunal affirms the decision under review.      

I certify that the preceding 25 paragraphs are a true copy of the decision and reasons for decision of Ms N. Bell, Member:

Signed:         
          ....................................................................................……………………………….

Associate

Date of Hearing  26 March 2003

Date of Decision  15 April 2003

Counsel for Applicant                  Mr S. Gerber

Solicitor for Respondent              Mr M. Allatt