Qian and Ors and Minister for Immigration and Citizenship
[2008] AATA 824
•16 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 824
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/6002
GENERAL ADMINISTRATIVE DIVISION ) Re Zhaozhi Qian Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
No 2007/6003
Re Xin Zhang Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
No 2007/6004
Re Yuching Qian Applicant
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal Mr G L McDonald, Deputy President Date16 September 2008
PlaceSydney
Decision The decisions under review are set aside and the Tribunal substitutes the decision that the business skills visa of the applicant and those of his family, being his wife and son, are not to be cancelled.
.......(sgd G L McDonald).......................
Deputy President
CATCHWORDS
MIGRATION – Business skills visa – Family member visas – Cancellation – Eligible businesses conceded – Whether actively participating at a senior level in the day to day management of business – Whether intended to do so – Application of departmental Procedures and Advice Manual 3 – Held actively participating at senior level in day to day management of business – No need to reside in Australia for period - Reviewable decision set aside – Decision substituted visas not cancelled
Administrative Appeals Tribunal Act 1975, ss 37
Migration Act 1958, ss 134
Commissioner for Corporate Affairs v Bracht [1989] VR 821
Griggs v Australian Securities Commission [1999] SASR 307
Ng and Minister for Immigration and Multicultural Affairs [2003] AATA 299
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Huage and the Minister for Immigration and Multicultural Affairs [2002] AATA 656
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690
REASONS FOR DECISION
16 September 2008 Mr G L McDonald, Deputy President The Application
1. The applicant is applying for the review of a decision dated 15 November 2007 of a delegate of the Minister for Immigration and Citizenship cancelling his business skills visa. The business skills visa is issued under the Migration Act 1958 (the Act). The applicant’s wife and son have family member visas and are also applying for review of the decision to cancel their related visas.
The Hearing
2. The Tribunal had before it the documents tendered for purposes of s 37 of the Administrative Appeals Tribunal Act 1975. The applicant, although he has a basic understanding of spoken English, gave evidence through a Mandarin speaking interpreter. In addition his son Mr Yuching Qian, who worked for one of the applicant’s companies, and Mr Johnny Chian a brother of the applicant and a factory manager of one of the applicant’s companies gave oral evidence. The respondent called no evidence. The Tribunal also had before it exhibits tendered on behalf of the applicant. Two large volumes of documents were filed on behalf of the applicant and if not admitted by consent, then they were admitted without objection.
Legislation
3. Section 134 contains the provisions subject to which a business skills visa can be cancelled and relevantly is as follows:
(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).
4. In addition to the legislation the department has published guidelines to assist applicants for business visas as to the type of material which if lodged with the department will assist in the decision making, currently the Procedures Advice Manual 3 (PAM 3). Under the PAM 3, where it is claimed that day to day management is being conducted from outside Australia material which would support regular telephone, email, facsimile contact is requested by the department.[1] While production of that material is requested in respect of claims made pursuant to s 134(1)(a) of the Act, to establish ‘substantial ownership interest’, it was submitted to the Tribunal that it applied equally to establish ‘day to day management’[2]. I note that the PAM 3 refers to types of documentary evidence the department would request to establish ‘day to day management’ – including business correspondence, statements, business correspondence, emails, attendance at meetings and facsimiles.[3] The Tribunal notes that while the PAM 3 may be relevant consideration, it is not a Ministerial policy promulgated under the Act which the Tribunal is bound to apply (such as the Ministerial Direction issued under s 499 of the Act which must be applied when exercising the discretion to cancel a visa on character grounds under s 500 of the Act). The introduction to the PAM 3 makes it clear it is an internal “policy instruction” to departmental officers.
[1] T documents, T19 page 77.
[2] for purposes of s 134(1)(b) and s 134(2)(b).
[3] T documents, T8 page 50.
5. There is, as the Tribunal noted during the hearing, a difference in the means by which a department may make an assessment and the way in which the Tribunal undertakes reaching its determinations. The Tribunal in addition to looking at the material before the delegate hears sworn evidence and has the opportunity of observing the witnesses give their evidence. Where the Tribunal accepts the sworn evidence, that is, when it is not discredited in cross examination, by the existence of documentary material or viva voce evidence of another, or other, witnesses and the credit of the witness is not otherwise called into question, then that evidence may result in a lessening for the need for corroborating evidence. To that extent the departmental guidelines, in as far as they require corroborating material, may or will be less significant in Tribunal, compared to departmental, processes. In this case the absence of telephone records, the limited supply of copies of emails and facsimiles is of less significance than may be the position in the provision of such material for purposes of the delegate’s decision making process.
Background
6. The applicant was first granted a subclass 127 business skills visa on 14 July 2004.
7. The applicant is a technological and mechanical engineer. The applicant’s main business is the production of giant format digital printing machines (printing machines) which produce large posters and utilise printing technologies which permits the colour to be maintained for at least a three year period. They are produced in China by his company Yaselan Shanghai Advertising Material Ltd (Yaselan Shanghai). Yaselan Shanghai was established in 1993 and commenced selling printing machines in the international market in 2000. The technology involved is relatively new to the world and it was the applicant’s evidence that United States of America and Israel are the only two other countries where manufacture of such printing machines is undertaken.
8. The applicant operates two businesses in Australia through separate companies - Yaselan (Australia) Co Pty Ltd (Yaselan), which was incorporated in 2001 and is Melbourne based, and Yaselan Digital Australia Pty Ltd (Yaselan Digital) which was incorporated in 2006 and is Sydney based. Yaselan services the Australian market in the production of large posters, is the point at which the digital copying machines can be displayed in Australia and it sells associated products (for example, ink cartridges) manufactured by Yaselan Shanghai into the Australian market. Yaselan Digital is not only a more recently established corporation but one which is not yet fully developed. The applicant established it to provide post sales service for printing machines manufactured by Yaselan Shanghai and sold internationally. A second proposed aspect is the development of an assembly plant in Australia for digital machinery produced by Yaselan Shanghai in China to which would incorporate technological aspects generated in Australia. In particular reference was made to the proposed development of a CD printing machine and a bar code printing machine.
The Issues
9. It is undisputed, and the Tribunal accepts from the material before it, that the applicant has ’a substantial ownership interest’ in both Yaselan and Yaselan Digital and that both corporations are “eligible businesses”. It follows that s 134(1)(a) is not in issue.
10. The issue is whether the applicant is ‘utilising his skills in actively participating at a senior level in the day to day management’ of either or both of Yaselan and/or Yaselan Digital,[4] or intends to continue to comply with the requirements set out in ss 134(1)(a) and (b) thereby satisfying ss 134(1)(c).
[4] s 134(1)(b).
11. If the Tribunal is satisfied that the applicant’s visa may be cancelled under the grounds in ss 134(1)(b) and (c), then it must next consider s 134(2)(b) that is, whether he has made ‘a genuine effort’ to utilise his skills in actively participating at a senior level in the day to day management of either or both of Yaselan and/or Yaselan Digital, or whether he intends to the continue to make such genuine effort. If the Tribunal is so satisfied then his visa must not be cancelled: s 134 (2).
12. Section 134(3) lists the matters that may be taken into account in considering ss (2). The list is not exhaustive, so that other matters than those listed can be taken into account.
Reasons And Determination
13. The evidence of the applicant, as confirmed by the sales figures (US$7-10M per annum), is that the applicant’s main source of income generation is Yaselan Shanghai. That business sells 30% of its printing machines into the Chinese market and 70% into the world market with sales to over 80 countries. It was the applicant’s evidence, which the Tribunal accepts, that he resigned as the managing director of Yaselan Shanghai after the incorporation of Yaselan Digital in 2006, but remained as chairman. He said he did this in order to reduce the time he needed to spend in administering Yaselan Shanghai and to allow him to engage in research and development of his machines.
14. The applicant first commenced coming to Australia in 1996. His brother (now the factory manager of Yaselan) lived in Australia. The applicant, as well as visiting his brother, saw an opportunity for the establishment of his printing machinery business in Australia. Yaselan was incorporated in 2001. On 14 July 2004 the applicant first obtained a business visa. Yaselan employs two people full time - the applicant’s brother as factory manager and another person as a poster designer and machine operator. The applicant’s brother is a shareholder in Yaselen. Yaslen operates from a factory site in Melbourne. Yaselan and Yaselan Digital operate separately and have no business relationship.
15. Initially the applicant planned that Yaselan would be the focal point of his operations in Australia. He told the Tribunal that the aim at the time of incorporation was to sell printing machines into the Australian market. However the applicant stated that owing to his age and lack of sales experience his brother was not up to undertaking the contemplated expansion of Yaselan. Upon the incorporation of Yaselan Digital in 2006 the applicant decided that Yaselan would be restricted to designing and printing posters, the sale of accompanying products and as a display point where prospective purchasers of the printing machines could view the product.
16. Yaselan Digital’s function was to sell printing machines into the Australian market, provide after sales service to printing machines sold into the international market. A further proposal which the applicant has in mind with respect to Yaselan Digital is discussed later in these reasons. Currently Yaselan Digital operates from an office site in Sydney and the applicant’s son and a secretary work there full time. It was the applicant’s son’s evidence that upon receipt of queries about the printing machine problems, which were received by facsimile or telephone, he would, where he was able, answer the query. Where he was not able to deal with the query he would contact his father, translate the query and await his father’s advice on how the problem raised in the query should be resolved, before conveying the response to the customer. The applicant’s son is studying engineering part time and has some familiarity with the technical aspects of the printing machine operations. He stated that his knowledge had also been enhanced by the advices given by his father in response to queries from customers.
17. It was the evidence of all three witnesses that the applicant made all commercial decisions in respect of Yaselan and Yaselan Digital. Each of the brother and the son contacted the applicant daily by email, telephone or facsimile to seek authorisations to undertake work, obtain sale prices for goods and services, provided regular reports on sales and monthly financial returns to the applicant and were answerable to the applicant for all areas of the businesses. The applicant has spent 136 days in Australia since being granted his business visa until it was cancelled. Since then he has spent a further approximate 114 days in Australia. All of the witnesses confirmed that while in Australia he devoted his working day to the two companies. When the applicant was in Australia, and able to, he signed legal documents, including leases.
18. The applicant believes there is a gap in the Australian market in the use of his printing machines – a gap which he stated that he wishes to fill. He has had introductory discussions with a leading printing company in Australia (Hewlett Packard) and as his diary notes of 5 November 2007 record the applicant had arranged for export of equipment from Shanghai Yaselan to Hewlett Packard[5]. The applicant hopes to develop a working relationship with Hewlett Packard to interest it the use and development of his printing machines.
[5] Exhibit A5 entry for 5 November 2007.
19. The applicant has invested $216,000 by way of director’s loan to Yaselan Digital as at 30 June 2007 and, as at 31 March 2008, that sum had risen to $390,000. The applicant has also purchased a residential apartment in Sydney.
20. It was the applicant’s evidence that he was ‘the face’ of Yaselan Shanghai and had personal contact with his dealers (sales team) and clients. Consequently, he spent much of his time travelling internationally. Wherever he was in the world he stated he was available to answer queries from his brother and son with respect to his Australian businesses. The applicant also maintained that much of his travelling was aimed at securing, by his personal contact, the transfer of international customers’ post sales service business to Yaselan Digital.
21. In cross examination the applicant said he spent the greatest amount of his working time in undertaking research and development. His second greatest time commitment was with dealers (sales staff) and clients and the third related to examining financial reports relating to Shanghai Yaselan. Given the main source of his financial base is located in Shanghai and he participates in a worldwide market, it would be quite extraordinary if the applicant spent the majority of his time in the day to day management of small corporations such as Yaselan and Yaselan Digital. The applicant clearly has “skills’ in engineering and technology (including relevant research and development), sales (including post sales service), compliance with regulatory requirements and financial and people management. Added to that list must be ‘time management’. While he may have spent only a modest amount of time in Australia, post the issue of his business visa until its cancellation, the evidence establishes that he kept tight control over, and management of, all important aspects of Yaselan and Yaselan Digital, and was available to family staff to assist in the management decision making on a day to say basis.
22. The applicant must also be found to be “actively” engaged in the day to day management. Active is the opposite of passive. The evidence established that there was almost daily contact with the applicant from both Yaselan and Yaselan Digital. The applicant’s participation could not be described as other than active.
23. The range of matters requiring the applicant’s participation - from authorising all payments in the case of Yaselan Digital to authorising those above $200 (other than regular payments of staff salaries) in the case of Yaselan, to setting the prices to be charged for materials and services, monitoring stock control (Yaselan), answering technical questions for Yaselan Digital, in 2006 determining the restriction of Yaselan’s operation and forming Yaselan Digital to better achieve his aim of selling printing machines and to develop the post sales service to overseas purchasers, directing the provision of financial and sales records for the applicant’s scrutiny – constitute “management” matters within the meaning attributed to that term in cases such as Commissioner for Corporate Affairs v Bracht[6]. There is no doubt that the evidence demonstrates that the applicant exercised ‘decision making powers’[7]. Additionally the decisions taken by the applicant in respect of each of the corporations are of a type which would ordinarily be expected to be addressed at ‘senior level’ within a corporation. The applicant is the managing director of each of the corporations and therefore operates at a senior level and would be the person ordinarily expected to make such decisions.
[6] [1989] VR 821 at 830 per Ormiston J.
[7] Griggs v Australian Securities Commission [1999] SASR 307 at 319 per Bleby J.
24. While the Tribunal has accepted the evidence of the three applicant witnesses there is ample material in the two volumes of documents which provide support for that finding. There are copies of bank accounts showing deposits and withdrawals, invoices from non Chinese overseas companies directed to Yaselan Digital for advice on correcting operational issues for the printing machines, company returns etc. As submitted on behalf of the applicant these confirm that both Yaselan and Yaselan Digital are continuously operating companies.
25. Much was made by the failure of the applicant to mention the existence of Yaselan when he completed (or authorised completion of) a departmentally generated business skills survey on 29 December 2006. It was the applicant’s evidence, confirmed by his son, that his son translated the questions and he provided the answers which were duly recorded in English by his son. While the letter requesting the completion of the form mentions the need to provide information in relation to ‘a’ business[8] the survey form provides for information to be provided where there may be two businesses operating[9]. It was submitted that the failure was indicative of the applicant not participating in the management to the level expected by s 134(1)(b) or 2(b) of the Act.
[8] T documents, T14.
[9] T documents, T16, page 87.
26. The Tribunal is unable to accept the respondent’s submission on this point. The applicant had provided the address of Yaselan in a previously provided notices of change of business address[10]. The Tribunal notes on the change of address form there is no request or provision for a person to identify their business other than in the provision of an address. To avoid the type of confusion which has arisen in this case the department may like to consider whether the form should be altered to include provision for the name of the business. It would be adverse to the applicant’s interests in claiming the establishment of businesses in Australia to purposely omit reference to the Yaselan in the survey. The Tribunal accepts that the document was translated by the applicant’s son and that he may have misunderstood the accompanying letter as requiring details of only one business to be inserted or not realised the detriment which may arise from restricting the mention to Yaselan Digital and omitting mention of Yaselan. It may well be that the applicant’s son was more acutely aware of Yaselan Digital because it was the corporation in which he was employed and where he may have understood his father’s interest in expansion within Australia was likely to occur. The implication which the Tribunal was asked to draw by the respondent is outweighed by the Tribunal’s acceptance of the oral evidence of the applicant, supported by his brother’s evidence, as to the applicant’s detailed involvement in Yaselan.
[10] T documents, T9 and T12.
27. Two further factual matters should be mentioned. It was uncontroversial that the applicant participated in a exhibition of printing machinery held in Australia in 2005 where his printing machinery was displayed. The second is that the applicant has, despite his visa cancellation, continued to both come to Australia and increase the investment he has made in Yaselan Digital. The former demonstrates his commitment to the development of his Australian business and the latter to his determination and commitment to continue his business involvement in Australia, despite the risk of him losing his business visa status: s 134(1)(c) and (2)(c).
28. While the Tribunal accepts, as stated by Senior Member Muller in Re Huage and the Minister for Immigration and Multicultural Affairs[11] that the legislation came into existence to, among other things, encourage the development of business skills, the employment of Australians, the export of Australian products and services and the introduction of new technology into Australia, it is not so constrained that business visas can only be issued to those who permanently reside here during the visa period. Clearly as stated by Deputy President Wright in Ng and Minister for Immigration and Multicultural Affairs[12] there must be “hands on” involvement” and
It would be strange indeed if an overseas entrepreneur could secure these advantages [attaching to the business visa] by directing business operations from abroad within a day or two of his first arrival and never set foot in this country again.
[11] [2002] AATA 656 at [6].
[12] [2003] AATA 299 at [12].
29. The latter is clearly not the situation of the applicant. A decision must be reached by undertaking an assessment of the facts in the different circumstances which will pertain from case to case. The facts in the circumstances outlined by the Tribunal in respect of the instant case leave it satisfied that the applicant’s business visa ought not be cancelled.
30. It follows that the family member visas of the applicant’s wife and son also should not be cancelled.
31. In view of the decision reached by the Tribunal it is not necessary for it to consider the application of s 134(2) of the Act.
Determination
32. The decisions under review are set aside and the Tribunal substitutes the decision that the business skills visa of the applicant and those of his family being his wife and son are not to cancelled.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr G L McDonald, Deputy President.
Signed: .........(sgd G Horzitski)..............................
Grace Horzitski Associate
Date/s of Hearing 9 & 10 September 2008
Date of Decision 16 September 2008
Solicitors for the Applicant Chancellor & Rados
Solicitors for the Respondent DLA Phillips Fox
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