Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs
[2006] AATA 152
•23 February 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 152
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/589
GENERAL ADMINISTRATIVE DIVISION ) Re Chin Lai Applicant
And
Minister for Immigration and Multicultural and Indigenous Affairs
Respondent
DECISION
Tribunal Professor GD Walker, Deputy President Date23 February 2006
PlaceSydney
Decision The decision of the respondent is affirmed.
..............................................
Professor GD Walker
Deputy President
CATCHWORDS
IMMIGRATION – business skills visa – cancellation of business skills visa and secondary visa – time spent in Australia – time spent outside Australia solely referrable to his overseas businesses – applicant failed to establish genuine effort to utilise his skills on a day-to-day senior management level – discretion – extreme hardship not proven – secondary visa holder did not apply for review.
Migration Act 1958 ss 134(1), 134(2), 134(3)(a)(b)(c)(d)(e)(f)(g), 134(10), 135, 136, 137
Migration Series Instruction No 133: Visa cancellation under subdivision G – cancellation of business visas.
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Re Andiwidjaja and others and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 397
Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767
Re Haman and Minister for Immigration and Multicultural and Indigenous Affairs [2001] AATA 240
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703
Re Ng and Minister for Immigration and Multicultural Affairs [2003] AATA 299
Re Negaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579
Re Salim and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899
Re Setiawan and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 26
Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695
REASONS FOR DECISION
23 February 2006 Professor GD Walker, Deputy President Summary
1. The applicant, Chin Lai, aged 49, is a citizen of Taiwan (Republic of China). He was granted a subclass 127 business visa on 20 December 2001, valid from 30 December 2001. A secondary business skills visa was also granted to his spouse, Fu Mei Lai Huang and their three children, Wei Chia Lai, Chiu Lin Lai and Hsin An Lai.
2. A delegate of the respondent, the Minister for Immigration and Multicultural and Indigenous Affairs, decided to cancel Mr Lai’s business visa on the grounds that he does not have a substantial ownership interest in an eligible business in Australia, he does not utilise his skills in participating in that business, and does not intend to continue with that business in the future. The delegate also cancelled the secondary visas held by his family unit members. These are the decisions to be reviewed by the tribunal.
Issue
3. The issue for the tribunal is whether it is satisfied that the applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business and whether he intends to continue to make a genuine effort and if it is satisfied that the applicant does not meet one or all of the criteria, whether it should exercise its discretion to cancel the business visa granted to Mr Lai and to the secondary visa holders.
Background
4. Mr Lai was born in Tainan Hsien, Taiwan (Republic of China), on 2 June 1956 and is aged 49. His wife, Fu Mei Lai Huang, was born in Tainan City, Taiwan, Republic of China, on 18 April 1961 and is aged 44. They have three children: a daughter, Chiu Lin Lai born 12 December 1981, aged 24; a son, Hsin An Lai born 13 September 1984, aged 21; and a daughter Wei Chia Lai born 2 October 2001, aged four.
5. From June 1981 until the present, Mr Lai has been the president/general manager of Tung Tzu Industrial Co Ltd, a company that specialises in the manufacture and marketing of children’s toys and baby goods. On 20 December 2001, Mr Lai was granted a subclass 127 business skills visa and secondary visas were granted to Ms Huang and their three children. The visas were valid for a period of three years from the date of entry into Australia. On 30 December 2001, Mr Lai entered Australia (T p179).
6. By letter dated 2 December 2003 from the Department of Immigration and Multicultural and Indigenous Affairs (“DIMIA”), Mr Lai was asked to complete a “Survey of Business Skills Migrant – 24 Months (Form 1010)” to be completed and returned by 27 January 2004 (T8 p48). This letter was sent to the applicant care of Miss Chiu-Lin Lai. On 28 January 2004, the applicant’s then migration agent, Boniface Town of A.E. Investment Consultancy Service Pty Ltd, requested an extension of time of one month in order to complete the survey (T12 p58). No response was forthcoming and on 6 September 2004 a further letter was sent to the applicant care of Mr Town advising him that the completion of the survey was a mandatory requirement of his visa and requesting that he return the completed document by 25 October 2004 (T p51). In a letter to the department of 25 October 2004, Mr Town apologised for the delay in providing the completed survey but that he expected Mr Lai’s accountants to have finalised his financial statements within a few weeks (T13 p60).
7. On 21 December 2004, the department notified Mr Town of its intention to cancel Mr Lai’s business visa under s 134 of the Migration Act 1958 (“the Act”) for failure to meet the requirements of his visa including that he failed to complete the 24-month survey demonstrating his active and on-going efforts to engage in an eligible business in Australia; that he had not obtained a substantial interest in an eligible business in Australia; he had not utilised his skills by participating at a senior level in the day-to-day management of an eligible business; and does not intend to continue to hold a substantial interest in an eligible business (T11 p53). He was invited to respond by 18 January 2005. The letter also informed him that the consequence of the cancellation of his visa was the automatic cancellation of the visas held by his family unit members (T p55).
8. By letter dated 14 January 2005, Mr Town of FCG Legal Pty Ltd, requested that the visas of Mr Lai and his family not be cancelled because his client is a genuine business migrant who has made legitimate attempts to establish a business in Australia (T14 p61). Mr Town submitted that his client in July 2001, in partnership with Mr Shuang Huang Lu, established an Australian company Donya Australia Co Pty Ltd, in which he and his wife have 41 per cent equity. Mr Lai has invested A$125,000 in the company. The company designs and manufacturing garden fencing as well as operating as a trading business, importing goods to Australia for sale. As executive director and shareholder of Donya Australia, the applicant has spent substantial periods in Taiwan researching the market for suitable products to export to Australia including Disney toys, prams, cots, and high chairs. He submitted that the applicant is also involved in the future direction of the company, which in the fiscal year 2004 generated a turnover of A$200,974. On a day-to-day basis, he is mainly in charge of international research and investigation of products and was involved with seeking potential products for import and assessing their suitability, negotiating with potential suppliers, and overseeing the importation of goods. He also submitted that the cancellation of the visas would cause hardship to Mr Lai’s family who have all settled in Australia and particularly his daughter Lai Chiu Lin who was presently studying in Australia and who has been granted Australian residence. Mr Town submitted in conclusion that cancellation of Mr Lai’s visa would have a detrimental effect on Donya Australia as the applicant had made a significant financial investment in the company (T pp61-64). Mr Town also submitted to the department for their consideration copies of, inter alia, business statements and banking and taxation records of Donya Australia (T p65).
9. On 18 April 2005, a delegate of the respondent decided to cancel Mr Lai’s business skills visa on the grounds that he had not obtained a substantial interest in an eligible business in Australia, he is not utilising his skills in participating at a senior level in the day-to-day management of the business, and he did not intend to continue to hold a substantial interest in the business. The delegate found that there was no evidence of the applicant’s involvement on a day-to-day senior management level noting that Mr Lai had only been in Australia for 31 days since his initial arrival and that based on the extremely limited time he had spent in Australia he was not satisfied he was involved in the management of Donya Australia (T pp176-177). Having considered all the evidence, the delegate exercised her discretionary powers and cancelled his visa. On the same day, the secondary business skills visas held by his family unit members were also cancelled. On 12 May 2005, Mr Lai lodged an application for a review of that decision.
10. At the hearing, the applicants were represented by Jasmin Yap, migration agent of Dr Shum’s Migration Consultancy, and the respondent was represented by Neil Arora, solicitor, Clayton Utz lawyers. The evidence before the tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with the evidence tendered by the parties at the hearing. Mr Lai gave oral evidence in person.
Applicable Legislation
11. The principal legislation is contained in sections 134 to 137 of the Act. Departmental policy with regard to the cancellation of business visa is contained in s 134 of the Migration Series Instructions No 133 – Visa cancellation under subdivision G – cancellation of business visas.
12. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in Mr Lai’s case are 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).
13. Section 134(10) of the Act includes the following definitions:
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)
…
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.
14. In the case of Ms Huang and the children, ss 134(4), (5) and (6) are relevant:
(4) Subject to subsection (5) and to section 135, if:
(a) the Minister cancels a person's business visa under subsection (1) or (3A);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.
(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.
(6) The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.
15. Paragraph 4.3.2 of the Migration Series Instructions (MSI) notes that eligibility relates to the achievement of the stated objectives through the activities of the business, not directly to the size or scale of the business.
16. Paragraph 4.5.1 of the MSI also provides guidance as to whether a genuine effort has been made for statutory purposes. While the guidelines are not binding on the tribunal and should not be applied so as to impose requirements which go beyond the statute (see Re Drake and Minister for Immigration (No 2) (1979) 2 ALD 634), the guidelines militate against inconsistency in decision making (see Skoljarev v Australian Fisheries Management Authority (1995) 133 ALR 690 at 695). The guidelines state:
4.5 What is a “genuine effort”?
4.5.1 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 must assess “genuine effort”. S 134(3) of the Act lists any or all of the factors which the Minister may take into account:
[Notes referring to factors listed above. Decision makers may take account of these notes to guide them in the interpretation of 4.5.1
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 six months since first arrival as a Business Skills class migrant;
e. transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
f. minimum A$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 A$100,000 business activity 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, mandatory monitoring of Australian address and return of survey forms.]
4.5.2While failure to meet one or more of these indicators 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) above may only be some) and reach a decision on that basis. For example, while the factors listed in 4.5.1 above 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.
Evidence
17. Mr Lai gave evidence in person with the assistance of a Mandarin interpreter.
18. Before the hearing, Mr Lai also filed a statement with the tribunal stating that he held a 41 per cent ownership interest in Donya Australia and had transferred up to $125,000 into the company. He said that he had initially intended to assign the direction of his Taiwan company to a partner whom he could trust, but unfortunately that did not materialise until recently, when he was able to arrange for the Taiwan business to be run by his deputies. (At the hearing, however, he said he had still not succeeded in finding someone to whom he could entrust the business.) He said in his statement that the company generated a turnover in 2004-2005 of over $170,000 and on this basis, was able to pay its directors’ “very handsome directors’ fees, more than double in 2003-2004”. He also said that he had established another company, ACE Bear Pty Ltd which was based in Sydney, and had purchased a property in Melbourne where he and his family would live.
19. At the hearing Mr Lai said that after he joined Donya in December 2002, his main task was promoting and marketing infant products, while the other shareholder – directors concerned themselves with the building renovation side of the business. Mr Lai said that his role involved contacting agents and marketing companies in Australia, but he was unable to recall the names of any of the companies with which he had dealt without asking his daughter, Lai Chiu Lin, who was present in the hearing room.
20. The applicant said he had not had any previous connections with the companies with which he had dealt in Australia, as infant products are a specialised area and it is difficult for a company to develop the necessary contacts. There are established networks and supply patterns with little overlapping. He said he had not had any experience with infant products before he came to Australia.
21. He said that Donya purchased its supplies of infant products from Tung Tzu Industrial Co. Ltd in Taiwan, which is wholly owned by the applicant, his wife and his daughter. They have owned the company for 20 years, its business being originally making toys, but in the past 10 years it has converted to producing infant products only. It sells mainly in South East Asia but sought to expand in the Australian market also.
22. As the respondent pointed out, there is a conspicuous lack of records before the tribunal showing any sales transactions by Donya in respect of infant products. The documentary evidence of its activities in that field consists largely of two invoices for the purchase of highchairs, one for US$276 and the US$523 (Exhibit A2). The seller is shown as Tung Tzu, Mr Lai’s own Taiwan company.
23. In relation to his assertion that he had no contact with Australian infant product companies before he became involved in Donya, he was asked about his written response to the department’s business owner profile questionnaire, in which he had written “I had been to Australia in my own person and I have had a very detailed and realistic understanding of the Australian business & investment environment because I have dealt with my customers in Australia frequently. The Market of Tung Tzu Industrial Co., Ltd. in Australia has been stable and huge” (supplementary T p33). At first he said that the statement was correct, but under further questioning said he lacked contacts in Australia, and had only small exports to this country, most of his business being with South East Asia. He wanted to enter the Australian market. Asked again about his “stable and huge” market in Australia, he replied that his migration agent had written that and that he (the applicant) was not clear about the details. He conceded, however, that he had signed the questionnaire.
24. He also conceded that he had little work to do on behalf of Donya in Taiwan because he was already in the business of manufacturing infant products for export, and added that he was also heavily involved in establishing Tung Tzu’s new factory in the PRC, for which he had purchased a site measuring 70,000 square metres. Tung Tzu has 200 employees in the PRC and 70 in Taiwan, against the single employee Donya has in Australia.
25. The applicant then said that his PRC and Taiwan activities kept him busy, so he directed the Australian business through the other shareholders and his daughter, to whom he would speak by telephone every one or two weeks, or more often if an important matter arose such as pricing decisions or questions of delivery dates. He would occasionally come to Australia for periods of two or three days to deal with important issues. Nevertheless, he said that his involvement with Donya was not great because Tung Tzu kept him busy. He had taken no steps to ensure that Donya kept proper records of its operations, and eventually conceded that he was not very familiar with its business because he was only a 41 per cent shareholder, and therefore had little power to make decisions. Ultimately he had reached the conclusion that the other Donya shareholders were not experienced in the infant products field and therefore decided to establish his new company, ACE Bear Pty Ltd to market Taiwanese products in Australia. It was established in August 2005.
26. In her closing submissions the applicant’s representative conceded that he had not actively participated at a senior level in the day-to-day management of Donya, a very proper concession in the circumstances. She said his intention was to seek to retain his visa so that he could transfer all or most of his assets to Australia, where ACE Bear would conduct most of his business. There was no evidence from the applicant on that point, however.
Consideration of the Law and Findings of Fact
27. The tribunal should have regard to all relevant evidence to enable the making of findings of fact in relation to the cancellation of Mr Lai’s visa as at the date of the decision, that is 18 April 2005: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342; Re Griffiths and MigrationAgents RegistrationAuthority [2001] AATA 240. The tribunal has in the past held that it is entitled to look at activities after the date of visa cancellation and up to the date of the hearing (see Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703; Re Halim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767).
28. On behalf of the respondent Mr Arora submitted, however, that the better view is that the tribunal should confine its consideration to material relating to events, actions or intentions occurring before, or at the time of, the decision to cancel the applicant’s visa (Re Andiwidjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 397 at 37, Re Haman and Minister for Immigration and Multicultural and Indigenous Affairs [2001] AATA 240 at 39, Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283, Nong vMinister for Immigration and Multicultural Affairs (2000) 106 FCR 257, 264.
29. The Minister therefore contended that the applicant’s evidence relating to ACE Bear Pty Ltd, which was not established until four months after the visa was cancelled, is not relevant to his actions or intentions at the time of the decision to cancel and should not be considered by the tribunal. The applicant advanced no submission to the contrary. On that basis, the evidence relating to ACE Bear does not assist the applicant’s case.
30. The decision to cancel Mr Lai’s business skills visa was made pursuant to s 134(1) of the Act on the grounds that the delegate concluded that (T p18):
(a)he 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)do not intend to continue to:
(i)hold a substantial 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.
The terms “ownership interest” and “eligible business” are defined in s 134(10), set out above.
31. Section 134(2) provides that the Minister must not cancel a business visa under s 134(1) if the Minister is satisfied that the person:
(a)has made a genuine effort to obtain a substantial ownership 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.
When considering whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account the matters set out in subsection (3), set out above. It is on s 134(2) that the applicant rests his case, having conceded that s 134(1)(b) applies.
32. Turning then to s 134(2)(a), the first issue is whether the tribunal is satisfied that Mr Lai has made a genuine effort to obtain a substantial ownership in an eligible business in Australia. What constitutes an “eligible business” is defined in s 134(10), set out above. The tribunal notes the case of ReYam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 as a useful guide to the meaning of the relevant provisions. With regard to the words “genuine effort”, Senior Member Dwyer notes at paragraph 88 that:
The Act does not specifically include any requirement that the “genuine effort” must be likely to succeed, or must meet any threshold level, beyond being genuine.
33. In his statement of facts and contentions (Exhibit A1), the applicant’s representative submitted that Mr Lai has helped to develop business links in the international market, has created employment for two directors, and the sale of baby goods has lead to an increase in commercial activity and competitiveness within the infant products sector of the Australian economy. In her statement of facts and contentions (Exhibit R2), the respondent concedes that the applicant has a substantial ownership interest in Donya Australia, but submits that Donya is not an eligible business because it is not a “business” for the purpose of s 134, as defined in Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 as “activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”.
34. Before the hearing, the applicant filed copies of the unaudited tax return for Donya Pty Ltd for the financial year ending 30 June 2005; and business activity statements for the period 1 July 2004 to 30 September 2004, 1 October 2004 to 31 December 2004, 1 January 2005 to 31 March 2005, and 1 April 2005 to 30 June 2005. He also filed copies of documents relating to the registration of his new company, ACE Bear Pty Ltd, which was registered on 17 August 2005, but for the reasons given above that material is not relevant to the issue.
35. There is some evidence of activity by Donya in the renovation side of its business, but very little in relation to the infant products side. In view of the applicant’s concession that s 134(1)(b) applies, it is not necessary to explore that aspect further, as the issue becomes whether the applicant made a genuine effort such as would satisfy s134(2).
36. In his statement the applicant said that after he was granted his permanent visa in December 2001, he had spent considerable time researching the market, mainly in Taiwan and to a lesser extent in Australia, in order to establish a viable business. He explained the small scale of his import transactions through Donya as being due to his caution in first testing the market through trial and error, and to Donya’s lack of storage facilities, which precluded the placing of larger orders. From his evidence at the hearing, however, it became apparent that there was no need for him to research the Taiwan market because all imports were to be sourced from his Taiwan company. His claim that he was merely testing the market cannot be reconciled with his written claim in response to the business profile questionnaire that he already had a “stable and huge” market in Australia.
37. He had no independent knowledge of who Donya’s customers for its small imports were, and his contacts with the Australian business amounted to no more than a few minutes on the telephone every two weeks. His representative sought to explain that as stemming from the fact that his involvement was mainly on the financial side and did not require his presence in Australia or his active involvement. Mr Lai explained that he had been unable to find anyone to whom he could entrust the running of the Taiwan business, but if that were so one would expect him to have more frequent and extensive communications with Donya in Australia than the evidence shows to have been the case. It is apparent that his attention and energies were almost wholly concerned with the operation of the Taiwan business, and especially the establishment of the sizeable manufacturing facilities in the PRC.
38. As regards the factors referred to in s 134(3) and in paragraph 4.5.1 of MSI 133, the applicant has not during the relevant period developed any meaningful business proposals. The plan to trade in toys and baby goods is not formally documented and the transactions of which there are written records appear to be more in the nature of a superficial and token effort, which is insufficient for these purposes (see re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283). The applicant has provided no evidence showing the existence of partners or joint venturers for Donya’s business proposals or of consultations with business advisers on the conduct of that business. The applicant’s claimed reliance on “verbal [i.e. oral] consultations” is insufficient to show a serious attempt to explore the conduct of an eligible business in Australia. The applicant was present in Australia for a total of only 31 days from his initial arrival in 2001 until his visa was cancelled on 18 April 2005. He attributes that to his inability to find a suitable partner to look after the Taiwan business and to the demands of that business, including the establishment of the PRC factory. Nevertheless, he provided no evidence to show any concerted activity while overseas to develop his Australian business.
39. The applicant had indicated in his questionnaire responses in 2001 (supplementary T p32) that he was willing to transfer $1,500,000.00 to his business in Australia, but said that he has so far transferred $125,000.00. The documentary evidence supplied, however, confirms the transfer of only about one tenth of that sum. The respondent contends that given the applicant’s substantial ownership interest in both the companies concerned, the transaction may not be genuine. Be that as it may, there is no other evidence that the applicant has transferred to, or retained in, Australia, 50 per cent of the funds indicated as available for transfer within two years as contemplated in MSI 133, paragraph 4.5.1. For the reasons already given, the evidence relating to ACE Bear Pty Ltd, which was not formed until four months after the applicant’s visa was cancelled, is not relevant to the point at issue.
40. The respondent referred me to Re Ng and Minister for Immigration and Indigenous Affairs [2003] AATA 299 in which the tribunal said:
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.
The applicant spent only 31 days in Australia before his visa was cancelled and in no sense could his absences be regarded as being in service of his Australian business. They are solely referable to his Taiwan and PRC operations.
41. The contentions raised in relation to the applicant’s daughter Lai Chiu Lin (known as Joleen Lai) (Exhibit A1, paragraphs 14 – 17) do not assist the applicant’s case on this point, as she has not applied for review of the decision to cancel her visa. I therefore conclude that, at the time of cancellation on 18 April 2005, the applicant had not made a genuine effort to utilize his skills in its day-to-day management at a senior level.
42. The tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in s 134(1)(a) to (c) are not satisfied (Re Negaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579). A common ground on which that discretion can be exercised in favour of an applicant is that further time should be given to the visa holder to undertake what was required of him or her (Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31, paragraph 21).
43. The respondent in her statement of facts and contentions submits that there are no issues which would lead the tribunal to exercise the residual discretion in the applicant’s favour. The applicant did not deal with this issue in his statement of facts and contentions.
44. The exercise of the discretion requires that the applicant offer an explanation for his or her inaction that is satisfactory, as a precondition to the grant of further time or other exercise of the discretion in the applicant’s favour. In this case the applicant’s explanation related to the demands of his business in Taiwan and the PRC and the difficulty of obtaining the services of someone to take care of that business. The first matter was something within the applicant’s control, while the second fails to explain the dearth of communications between the applicant and Donya about the day-to-day operation of the Australian business. In my view the evidence provides no basis for exercising the discretion in the applicant’s favour.
45. In the applicant’s amended statement of facts and contentions, it was submitted that Joleen Lai has lived in Australia for six years and could not adjust to living in Taiwan and would experience major difficulties living and working there; she is due to complete a degree in marketing in July 2006 at which time she will take over running ACE Bear on a full-time basis; “if she is compelled to leave the family’s investments in the business will be severely undermined and substantial financial losses will be incurred”; and that it would be an injustice to ask her to leave after six years, most of which time has been spent here as a permanent resident. That contention seems designed to raise the “extreme hardship” exception in s 134(5).
46. I note that Joleen Lai was born on 12 December 1981 and is aged 24, and as such would be able to apply for a student visa to study in Australia in her own right.
47. The Federal Court of Australia and the tribunal has previously dealt with what constitutes “extreme hardship”: see Re Salim and Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899; Re Setiawan and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 260; and Man Ki Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481. Foster J of the Federal Court held in Man Ki Kim (supra), at page 487, that
… it is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. "Hardship" is in itself a relative term. What may be a "hardship" to a sensitive person, or one in a
particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word "extreme" must be evaluated against the facts of the particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken.
…In addition to what I have already said, I consider that the application of the word "extreme" must also be approached with caution. Obviously there are varying degrees of hardship which may be suffered by any particular individual. "Trivial", "minor", "moderate" are adjectives which spring to mind as conveying such varying degrees. Clearly enough, "extreme" hardship must find itself at the very high end of the scale. This does not mean, however, that in any given case, "extreme hardship" means, in effect, a particular point on a continuum of hardship. It obviously connotes an area within which an ascertainable burden of hardship may fall and properly merit
the description "extreme". Within that area there may be varying degrees of burden, one less than another, but each meriting the description …
48. While Ms Lai may well suffer some inconvenience or dislocation, those possibilities fall far short of “extreme hardship” within the meaning of the section. In any event, and more importantly, Joleen Lai has not applied for review of the decision to cancel her visa. The exception in s 134(5), however, relates to cancellation of “the other person’s business visa” if extreme hardship to that person would result. But there is no application to review the cancellation of Joleen Lai’s visa before the tribunal.
49. In my view the decision under review should be affirmed.
I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President
Signed: .....................................................................................
AssociateDate/s of Hearing 8 February 2005
Date of Decision 23 February 2006
Representative for the Applicant Ms J Yap, Dr Shum’s Migration
Consultancy
Representative for the Respondent Mr N Arora, Clayton Utz lawyers
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