Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs

[2006] AATA 527

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 527

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/630

GENERAL ADMINISTRATIVE  DIVISION

Re:     AH KOW PHOON

Applicant

And:MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

Respondent

DECISION

Tribunal:Dr Gordon Hughes, Member

Date:19 June 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) Gordon Hughes

Member

Cancellation of business visa – cancellation following 24 month survey – Applicant spent limited time in Australia – Applicant unsuccessful in acquiring substantial interest in an eligible business – Whether genuine efforts were made

Migration Act 1958 ss 134(1), 134(2), 134(3), 134(3)(A), 134(4), 134(9), 134(10), 135

Migration Series Instruction 133

Re  Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283

Skoljarev and Australia Fisheries Management Authority (1995) 39 ALD 517

Re  Tjang and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 32

Re  Nagaria and Ministerfor Immigration and Multicultural and Indigenous Affairs [2004] AATA 579

Re  Lai andMinisterfor Immigration and Multicultural and Indigenous Affairs [2006] AATA 152

Re Griffiths and Migration Agents Registration Authority [2001] AATA 240

REASONS FOR DECISION

19 June 2006  Dr Gordon Hughes, Member

1.      This matter was heard by the Tribunal on 12 April 2006.  The Applicant represented himself.  The Respondent was represented by Mr Michael Brereton of Australian Government Solicitor.

2.The background facts were not in dispute and are summarised below.

BACKGROUND

3.      The Applicant sought  a review of a decision by the Respondent on 23 June 2005 to cancel his subclass 128 "Business Skills" visa on the grounds that he did not satisfy the Minister that he had complied with the requirements of s 134(1) and s 134(2) of the Migration Act 1958 (the Act) in relation to the visa.

4.      In the event of cancellation of the Applicant's visa, the visas held by his dependents, Hui Ying PHOON Shieh, Vei Kwok Phoon and Yue Chin Phoon would also be cancelled.

5.      The Applicant was born on 12 November 1945 in Malaysia.  He told the Tribunal he holds a Bachelor of Mechanical Engineering degree and is an experienced and successful business man in Malaysia.  On 2 April 2002 he was granted a subclass 128 "Business Skills" visa, with the condition that first entry to Australia be made no later than 9 October 2002.  On 6 April 2002 the Applicant arrived in Australia.  The visa allowed the Applicant to enter and leave Australia as many times as he desired until 2 April 2007, but was subject to a requirement that he complete and return a "Survey of Business Skills Migrant – 24 Months" ("the 24 Month Survey") in order to determine his progress 24 months after initial arrival.

6.      On 5 March 2004 the Respondent wrote to the Applicant, requesting that he complete a 24 Month Survey in accordance with the requirements of his visa.

7.      On 14 April 2004 the Applicant provided the survey and other documents to the Respondent.  The survey was accompanied by a letter from the Applicant which stated, in part:

"I am sorry to inform you that I have yet to be engaged in business in Australia; reasons being I am still managing business in Malaysia, but for the past 2 years I had tried to look for business and to invest in Australia.  The latest business projects I am looking to invest is the "Child Care for Working Parents" in Melbourne and also may invest in Health Care business as my eldest daughter graduated from Melbourne University in December 2003 is now working as a dentist in Mount Isa, Queensland.  However, I will keep my commitment to invest or to get involved in business in Australia and very likely within the next 12 months."

8.      The Respondent considered that the Applicant may not have been complying with the requirements of his visa and on 9 March 2005 sent a Notice of Intention to Cancel under s 134 of the Act to the Applicant and his dependant visa holders.  This Notice explained that there were grounds for cancelling the Applicant's visa and invited the Applicant to provide a response as to why his visa should not be cancelled. 

9.      The notice from the Respondent summarised the Applicant's attempts to obtain business in Australia, as set out in the 24 Month Survey, as follows:

·you have considered various business ventures such as the export of Australian products to overseas markets, child care for working parents and health care;

·you have enquired with Indian Ocean Pearls Australia Pty Ltd with the view of investing in pearl farming;

·you have attended Australian trade fairs and have contacted the Kuala Lumpur Austrade office for business opportunities; and

·you have transferred funds and purchased a property in Australia.

10.     The Respondent provided the following reasons for not being satisfied that the Applicant was meeting his visa obligations:

·you have not demonstrated through documentary evidence that you have made continued concerted efforts to obtain a substantial ownership interest and senior management role in an eligible business;

·although you have transferred funds to Australia, I note they were deposited into personal bank accounts for your spouse and children and not for the purpose of engaging in eligible business activity;

·you have provided some documents to indicate that you have made some initial inquiries in relation  to business negotiations, however these seem to be preliminary in nature only and do not constitute a genuine effort to get into business;

·whilst you claim that you have been exploring various possibilities of joint ventures, there is little or no evidence of any follow up action to these inquiries.  I do not consider that you have a serious willingness to comply with the conditions attached to your business skills visa;

·as stated in your 24 month survey, you are still actively involved in the operation of your overseas business.  Although it is not a requirement of your visa to divest yourself of your overseas business interests, it is a requirement that you are involved in the day‑to‑day management of an eligible business in Australia at a senior level;

·departmental records have confirmed that you have spent only 39 days in Australia since your initial arrival in Australia in April 2002.  The above statement indicates that your involvement in the business is very limited and minimal.  The Act is intended to benefit business owners who actually reside in Australia, albeit with trips overseas from time to time."

The Respondent concluded in the letter of 9 March 2005 that consideration was being given to cancelling the Applicant's visa because there was insufficient evidence of a genuine effort to:

·utilise your skills in actively participating at a senior level in the day‑to‑day management of an eligible business in Australia; or

·intend to continue to hold a substantial interest in an eligible business and utilise your skills in actively participating at a senior level in the day‑to‑day management of an eligible business in Australia.

11.     The Applicant provided written submissions with further documentation on 8 April 2005.   He provided still further submissions on 15 June 2005.  The Applicant outlined the following efforts to meet the requirements of the business skills visa:

·I was back to Melbourne at the end of April and form a holding Company PCM Holdings Pty Ltd with a paid up capital of A$350,000 and this Company will invest in Healthcare business and Export business in Melbourne;

·I am now negotiating with a Financial Company called Bellwether Partners in Melbourne to represent them in Malaysia to promote and sell the Australian Hedge Fund value at A$100,000,000 and expected to finalise the contract before 30 une 2005…;

·Negotiating with SGN Aust. Pty Ltd to buy 30% of their equity in the business of Famous Amos Cookies Franchise in Victoria, still some terms and conditions to be finalised.

12.     The Respondent was not satisfied with the Applicant's response.  On 23 June 2005 the Respondent decided to cancel the Applicant's visa.  A Notice of Cancellation was sent to the Applicant and his dependant visa holders.

13.     On 15 July 2005 the Applicant lodged an Application for Review of a Decision with the Tribunal.

LEGISLATION

14.     Subsection 134(1) of the Act provides:

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.

15.     Subsection 134(2) of the Act provides:

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.

16.     Subsection 134(3) lists the factors which the Minister may take into account when deciding whether or not to cancel a visa under subsection (1):

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).

17.     Subsection 134(10) of the Act defines an "eligible business" as:

…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.

18.     Section 135 of the Act requires that, prior to cancelling a visa under ss 134(1), 3(A) or (4), the Minister must give the visa holder a written notice stating that he proposes to cancel the visa and inviting the holder to make representations to the Minister.  The visa holder has 28 days (in the present circumstances) in which to make such representation.

19.     Guidance on cancellation of business visas and the interpretation of the Act is provided by Migrations Series Instruction 133 – "Visa Cancellation under Subdivision G – Cancellation of Business Visas" (the MSI).  Paragraph 4.5.1 of the MSI notes that if, after 24 months, a migrant is not in business, he/she must establish that a "genuine effort" has been made to engage in business since arrival.  The Minister may take the factors set out in section 134(3) into account when assessing the "genuine effort".

20.     Paragraph 4.5.1 of the MSI also gives guidance as to the interpretation of these factors.  In particular it notes that, in respect of paragraph 134(3)(d) ("the period or periods during which a person has been present in Australia"), the decision maker should look for a physical presence in Australia of more than six months since first arrival as a Business Skill class migrant.

21.     Paragraph 4.5.2 of the MSI requires that a decision maker must give weight to all relevant factors in the case, and while the factors in s 134(3) may be indicative of "genuine effort", the lack of them may not necessarily be decisive.  A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.

FINDINGS

COMPLIANCE WITH TIME LIMITS

22.     Section 134(9) provides that the Minister must not cancel a business visa unless a Notice of Intention to Cancel was given to the holder within the period of three years commencing, as relevant here, on the day on which the holder first entered Australia.  The Applicant did not dispute that the Respondent had complied with the relevant time limits.

SUBSTANTIAL INTEREST IN AN ELIGIBLE BUSINESS

23.     Under s 134(1)(a) of the Act, the Minister may cancel a business visa if the visa holder has not obtained a substantial interest in an eligible business.  The Applicant stated in his 24 Month Survey that he had not yet engaged in business in Australia as he was still managing a business in Malaysia.  He stated that he was looking for a business to invest in.  He confirmed this in his subsequent submissions to the Respondent.  The Respondent therefore contended that the Applicant had not obtained a substantial interest in an eligible business for the purposes of s 134(1)(a) of the Act. 

24.     The Applicant told the Tribunal that his negotiations with SGN Aust Pty Ltd, referred to in his letter to the Respondent of 15 June 2005, had been unsuccessful.  However, he had been successful in his negotiations with Bellwether Partners.  The Applicant produced a letter from Bellwether Partners dated 11 August 2005, advising him of his appointment as a distributor of the Bellwether Partners Offshore Strategies Fund.  This letter was taken into evidence by the Tribunal. The Tribunal is entitled to take into account all the evidence before it at the date of hearing Re Griffiths and Migration Agents Registration Authority [2001] AATA 240.  The Applicant's arrangement with Bellwether Partners fails, however, to meet the requirements of s 134(1)(a) of the Act because  he did not acquire a "substantial ownership interest" or indeed any shareholding in Bellwether Partners.  He was merely appointed as an offshore agent with responsibility for marketing to overseas investors.

25.     The Applicant has not satisfied the requirements of s 134(1)(a) of the Act. The Tribunal therefore concludes that the Minister has the right to exercise the discretion to cancel the business visa under s 134(1)(a) of the Act.

DAY TO DAY MANAGEMENT

26.     Given that the Applicant fails under s 134(1)(a) of the Act, the Tribunal is not obliged to consider whether he satisfies the remaining subsections of s 134.  Nevertheless, for completeness, it will now do so. Under s 134(1)(b) of the Act, the Minister may cancel a business visa if the Applicant has not undertaken any day‑to‑day management of an eligible business during the course of his business visa.  Given the absence of any evidence to the contrary, the Tribunal finds that the Applicant does not meet the requirements of s 134(1)(b) in that he has not been actively participating at a senior level in the day‑to‑day management of an eligible business in Australia. The Tribunal therefore concludes that the Minister also has the right to exercise the discretion to cancel the business visa under s 134(1)(b) of the Act.

CONTINUED OWNERSHIP AND USE OF SKILLS

27.     In view of the Tribunal's findings in relation to the Applicant's non‑compliance with ss 134(1)(a) and 134(1)(b) of the Act, it follows that the Applicant cannot comply with the requirements of s 134(1)(c).

GENUINE EFFORT TO OBTAIN A SUBSTANTIAL INTEREST

28.     Notwithstanding the above findings, the Applicant can still succeed in this Application if he can demonstrate that the Minister was precluded by s 134(2) of the Act from cancelling the Applicant's visa.  The Applicant would need to demonstrate that he had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, that he had made a genuine effort to utilise his skills at a senior level in the day‑to‑day management of that business and that he intended to continue to make such efforts.

29.     The Respondent contended that in assessing whether the Applicant had made a genuine effort to obtain a substantial interest in an eligible business, the Tribunal should have regard to the factors listed in s 134(3) of the Act, as well as to the guidance for their application, provided at paragraph 4.5 of the MSI.

30.     The Respondent observed that although the Applicant provided a letter stating that he had registered a holding company in Australia and was negotiating with other Australian companies, there was no evidence that any business arrangements had been entered into.  The Respondent contended that the Applicant had therefore not made a genuine effort to obtain a substantial interest in an eligible business.

31.     The Applicant told the Tribunal that he had used his best efforts to "get into business" in Australia.  He had made numerous trips to Australia and on each occasion had engaged in discussions which were designed to explore the possibility of a business relationship.

32.     The Applicant described his attempts to acquire an interest in a wine exporting business.  He said this was unsuccessful because the more prominent winemakers had already appointed agents in Malaysia.  In this regard, the evidence was that the Applicant had attended wine festivals in Sydney in 2002 and 2004.  The extent of the Applicant's efforts to establish a wine export business would appear to be limited to enquiries made at or in connection with those events.  The Tribunal is not satisfied that these enquiries alone demonstrate a genuine commitment to enter the wine export business; although, combined with other activities, they could provide evidence of a general effort to identify a suitable business opportunity in an unspecified field.

33.     The Applicant told the Tribunal that he had investigated investment in child care centres but he was unable to obtain a licence.  The Applicant produced evidence of correspondence with Enel Capital Pty Ltd of Kew, Victoria, regarding an invitation to invest in the formation of a child care centre to be based in Melbourne.  The Applicant told the Tribunal he had not engaged in any other direct negotiations or enquiries relating to child care centres, explaining that he had left this task to the managing director of Enel Capital.  In any event, the Applicant no longer regarded investment in child care centres as a feasible option.  In summary, therefore, there is evidence that the Applicant put in train a process, in April 2005, to ascertain whether there were opportunities for investment in child care centres but was subsequently advised, or otherwise determined for himself, that this would not be a viable business project.

34.     The Applicant told the Tribunal that he had enquired with Indian Ocean Pearls Australia Pty Ltd about the prospect of investing in pearl farming. He chose not to proceed with the discussions, however, because it was a "very unique business" and he felt he lacked a suitable background.

35.     The Applicant also told the Tribunal that he had tried to invest in the "hotel business" but was unable to "satisfy the conditions".  He also explained that he had formed a holding company in early 2005 and had used it to help his daughter start a dentistry clinic in Rockhampton.

36.     As evidence of his genuine intentions to establish a future in Australia, the Applicant provided evidence to the Tribunal that he had commenced selling his properties in Malaysia, adding that it "takes time".  This evidence too post-dates the cancellation of the visa but was nonetheless taken into account by the Tribunal for the same reason as the letter from Bellwether Partners. The purpose of selling the properties was to generate funds for investment in Australia.

37.     Explaining his apparent lack of sustained effort to explore business opportunities in Australia, the Applicant told the Tribunal that, upon obtaining his visa, he had been taken by surprise as to the extent of Malaysian control of foreign exchange.  He found it virtually impossible to send money overseas until regulations were relaxed in March 2005.

38.     The Applicant acknowledged to the Tribunal that in the three years prior to 23 June 2005, being the date of cancellation of his visa, he had spent a total of 45 days in Australia.  Most of his time during that three year period had been spent working for his company, Mycom Berhad, in Malaysia.

39.     If the Applicant is to satisfy the requirement under s 134(2) of the Act in relation to a "genuine effort" to establish a business, it is necessary to demonstrate a level of effort beyond that which is purely superficial or token: Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283.  The Tribunal would not categorise the Applicant's efforts as either "superficial" or "token", but it is concerned that there has been an absence of a sustained effort over three years.  The Applicant has made genuine efforts from time to time to obtain a substantial ownership interest in an eligible interest in Australia, but s 134(2)(a) requires more than spasmodic activity. 

40.     The MSI provides guidance in determining the existence of a "genuine effort" for these purposes.  Policy guidelines are not binding but do assist in securing consistency in decision making: Skoljarev and Australia Fisheries Management Authority (1995) 39 ALD 517 at 521 to 626, Re Tjang and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 32. 

41.     MSI 4.5.1 provides that factors relevant to determining whether a "genuine effort" has been made for the purposes of s 134(3) include:

(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 three 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 …

42.     Against the above criteria, the Tribunal concludes that the Applicant has not made a "genuine effort" for the purposes of s 134(2) of the Act. 

43.     There remains, however, the question of whether the Tribunal considers it appropriate to exercise the residual discretion vested in the Minister under the Act not to cancel the Applicant's business visa: Re Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579.  As emphasised in MSI 2.5, "a business visa does not have to be cancelled even if there are grounds for cancellation under subdivision G of the Act and cancellation is not prevented by subsection 134(2)". 

44.     The exercise of the discretion requires that the Applicant offer a satisfactory explanation for his or her inaction, as a precondition to the grant of further time or other exercise of the discretion in the Applicant's favour: Re Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152.  Similarly, MSI 4.5.2 states:

While failure to meet one or more of these indicators [in MSI 4.5.1] may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled.  The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) … may only be some) and reach a decision on that basis.  For example, while the factors listed in 4.5.1 … may be indicative of 'genuine effort', lack of them will not necessarily be decisive.  The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made 'genuine effort'.  A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.

45.     In this instance, the Tribunal is not satisfied, in view of the Applicant's failure to meet the requirements of s 134(2) of the Act, his limited forays into the Australian business world over the past two years and the limited amount of time he has spent in Australia since his visa was granted, that he is entitled to the benefit of the residual discretion.  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 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.

46.     For the above reasons, the Tribunal affirms the decision under review.

DEPENDANTS’ VISAS

47.     Subsection 134(4) of the Act provides:

Subject to subsection (5) and to section 135, if:

(a)the Minister cancels a person's business visa under subsection (1) or 3(A); and

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

(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person's business permit or business visa by giving written notice to that person.

48.     It follows from the Tribunal's finding that the visas of Hui Ying Phoon Shieh, Vei Kwok Phoon and Yue Chin Phoon will also be cancelled.

I certify that the forty‑eight [48] preceding paragraphs are a true copy of the reasons for the decision of:

Dr Gordon Hughes, Member

(sgd)       Catherine Lake

Clerk

Date of hearing:  12 April 2006

Date of decision:  19 June 2006
Advocate for the applicant:          Nil – Self-represented
Solicitor for the respondent:        Mr M. Brereton, Australian Government Solicitors