Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs - [2002] AATA 656

DECISION AND REASONS FOR DECISION [2002] AATA 656

ADMINISTRATIVE APPEALS TRIBUNAL )

) Q2000/1186, Q2001/539

GENERAL ADMINISTRATIVE DIVISION ) Q2001/540, Q2001/541

Re      FA CHEN HUANG YA-LEE HUANG HSIN-HSI CHIU CHIH-HAO HUANG
  Applicants
           And    MINISTER FOR IMMIGRATION, MULTICULTURAL and INDIGENOUS AFFAIRS
  Respondent
DECISION

Tribunal Mr. D.W. Muller, Senior Member

Date2 August 2002
PlaceBrisbane

Decision The Tribunal: Q2000/1186 – Affirms the decision to cancel the Business Skills Visa of Fa Chen Huang. Q2001/539 – Affirms the decision to cancel the Business Skills Visa of Ya-Lee Huang. Q2001/540 – Affirms the decision to cancel the Business Skills Visa of Hsin-Hsi Chiu. Q2001/541 – Sets aside the decision to cancel the Business Skills Visa of Chih-Hao Huang.

(Sgnd) D W MULLER
SENIOR MEMBER
CATCHWORDS
IMMIGRATION – Business Skills Visa – cancellation – requirements for cancellation – whether primary applicant has a substantial ownership interest in, or is actively involved in the management, on a day-to-day basis, at a senior level of, an eligible business in Australia – meaning of "eligible business" – whether eligible business must be "in Australia" – secondary visa holders – notification requirements – whether holder will suffer extreme hardship if visa cancelled

Migration Act 1958 (Cth): ss 134, 135

REASONS FOR DECISION

2 August 2002 Mr. D.W. Muller, Senior Member

These applications are for review of a decision made on 23 November 2000, to cancel a Business Skills visa granted to Fa-Chen Huang on 25 August 1997 and due to expire on 25 August 2002, on the grounds that Fa-Chen Huang (the primary visa holder) was not managing an eligible business, at a senior level, on a day-to-day basis in and from Australia.
The other three applicants are family members of Fa-Chen Huang and consequently they are secondary visa holders. Ya-Lee Huang (Q2001/539) is the daughter of Fa-Chen Huang. Hsin-Hsi Chiu (Q2001/540) is the wife of Fa-Chen Huang. Chih-Hao Huang (Q2001/541) is the son of Fa-Chen Huang.
Fa-Chen Huang and his wife have another child Chih-Wie Huang who is an Australian citizen and who is not connected with these proceedings.
The following material was placed in evidence before the Tribunal:
(i)The section 37 statement
(ii)Statements plus oral evidence from Fa-Chen Huang
(iii)Statements plus oral evidence from Chih-Hao Huang
(iv)A statement from Robert Jen, managing director of Greenfield Chemical Co Ltd., Taipei, Taiwan.
(v)A statement from Allister Tomkins, marketing and sales director of Symex Holdings Limited, Melbourne.
(vi)A statement from Chee-Sing Wong, Brisbane based accountant for Lin Sun International Pty Ltd (Mr. Huang's company).
(vii)Travel movement records for the four Applicants from March 1994 to 2 August 2001.
(viii)A Financial Performance Summary (unaudited) for the financial year ending 30 June 2001.
From the material referred to above, the Tribunal finds as follows:
(i)The dates of birth of the Applicants are:
Fa-Chen Huang – 9 January 1949
Hsin-Hsi Chiu – 23 March 1951
Ya-Lee Huang – 14 November 1974
Chih-Hao Huang – 1 February 1976
(ii)The Applicants first arrived in Australia on the following dates:
Fa-Chen Huang – 31 December 1996
Hsin-Hsi Chiu – 23 August 1994
Ya-Lee Huang – 19 March 1994
Chih-Hao Huang – 23 November 1994
(iii)Fa-Chen Huang has spent very little time in Australia. The records show the dates and durations of his visits have been:
31 December 1996 to 4 January 1997             4 days
27 August 1997 to 30 August 1997                   3 days
27 November 1997 to 29 November 1997       2 days
12 February 2000 to 16 February 2000            4 days
TOTAL  13 days

(iv)Hsin-Hsi Chiu has spent very little time in Australia. The records show the dates and durations of her visits have been:
23 August 1994 to 26 August 1994                   3 days
23 November 1994 to 25 November 1994       2 days
27 July 1996 to 9 August 1996  13 days
31 December 1996 to 10 January 1997  10 days
27 August 1997 to 30 August 1997                   3 days
30 March 1999 to 6 April 1999  7 days
12 February 2000 to 16 February 2000            4 days
28 July 2001 to 2 August 2001  5 days
TOTAL  47 days

(v)Ya-Lee Huang is a student in the USA and her time in Australia has been spent visiting her brother. The records show the dates and durations of her visits have been:
19 March 1994 to 29 March 1994  10 days
23 August 1994 to 26 August 1994                   3 days
30 December 1996 to 4 January 1997             5 days
27 August 1997 to 30 August 1997                   3 days
TOTAL  21 days

(vi)Chih-Hao Huang spent 630 days in Australia between the date of his first arrival in Australia on 23 November 1994 and 31 December 1997. Since 21 January 1998, he has lived permanently in Australia and he has not been out of Australia. Prior to 1994, Chih-Hao Huang lived in Singapore. He has not lived in Taiwan since 1990. He has lived at 6A Westland Place, Waterford, WA, since about 1997.
(vii)Fa-Chen Huang incorporated Lin Sun International Pty Ltd on 2 April 1997.
(viii)Fa-Chen Huang was granted a Business Skills (subclass 127 – Business Owner) visa pursuant to the provisions of the Migration Act 1958, on 25 August 1997.
(ix)Fa-Chen Huang initially owned 50% of Lin Sun. The other 50% was owned in equal shares by five other business people. Two of the others resigned on 5 September 2000, giving Fa-Chen Huang a 60% holding.
(x)Between the beginning of 1996 to the end of 2000, Fa-Chen Huang remitted to Australia a total of A$414,000.
(xi)The financial accounts of Lin Sun show that for the following years the company has generated the following sales for items exported from Australia:
1997/98: Sales of $85,302 for an operating loss of $221.
1998/99:Sales of $879,153 for an operating pre-tax profit of $1,097.
1999/20:Sales of $887,868 for an operating pre-tax profit of $5,067.

(xii)On 25 May 1997, Lin Sun entered into a contract with Pin Chief Corporation (Taiwan) for the supply of chemical components for plastic manufacture for a commission of 5% on all chemical products purchased. Lin Sun would also supply "technical support".
(xiii)On 3 March 1998, Lin Sun gave a written undertaking to Green Field Chemical Enterprise Co Ltd (Taiwan) not to deal with or contact each other's clients. Greenfield was the exclusive agent in Taiwan for an Australian chemical company Uniqema (later taken over by another Australian chemical company, Symex). Lin Sun was required to submit to Greenfield all orders for goods to be exported to Taiwan from Uniqema and Symex.
(xiv)On 10 December 1998, Lin Sun entered into agreement with Chemi-Group Industrial Corporation (Philippines) to supply chemicals for the plastics industry to Chemi-Group.
(xv)On 4 July 1999, the Respondent wrote a letter to Fa-Chen Huang, addressed to 6A Westland Place, Waterford, WA, the residential address of Chih-Hao Huang, containing the following:
"I trust that you are enjoying your life in Australia now that it is almost two years since your first arrival on a Business Skills visa. Please find enclosed a copy of your "Survey of Business Skills Migrant – 24 Months" form 1010. You may also access this form from our Internet home page at form is due to be returned within 28 days of the second anniversary of your arrival in Australia. It would be satisfactory for you to return the survey form to us any time before 24 September 1999. Please contact me if you think you may have any difficulties returning the survey form by this date. I have also enclosed a pre-addressed reply envelope for your convenience (postage free if sent within Australia).
If you have not yet engaged in business could you please send supporting documentation of your efforts to engage in business."

(xvi)The form 1010 was filled in, dated 10 September 1999 and returned to the Respondent by 24 September 1999. Among other things reported on the form were:

We have exported A$523,000 of chemical products (Oleic Acid) to Taiwan and Philippines and A$250,000 of frozen meat (beef and mutton) to Taiwan.
In the past few months, we have negotiated with chemical company named Pasminco and have agreed to import US$1,000,000 of Lead Ingot to Taiwan annually.
Even though Lin Sun International Pty Ltd did not appear on the purchase contracts, it has certainly played a key role in the negotiation and establishment of business linkage.
He works 10 to 15 hours per week in the business.
The total annual income of the business is A$773,000.
Two Bills of Lading were attached to the form.
22 July 1999, 110,440kg of stearic acid, Melbourne to Keelung
30 July 1999, 110,440 kg of stearic acid, Melbourne to Keelung
(xvii)The following documents indicate the following transactions took place.
(i)Purchase contracts in which Uniqema is the seller and Lin Sun the buyer.
13 October 1999: 198mt stearic acid, Melbourne to Keelung, US$92,070.
10 November 1999: 44mt stearic acid, Melbourne to Keelung, US$20,460
21 January 2000: 12mt oleic acid, Melbourne to Manila, US$11,520
21 January 2000: 48mt oleic acid, Melbourne to Keelung, US$44,640
(ii)Commercial Invoices from Fa Chen Huang to Power Chemical Corporation (Taiwan).
1 December 1999: 66mt stearic acid, Melbourne to Keelung, US$30,690
4 January 2000: 88mt stearic acid, Melbourne to Keelung, US$40,920
1 February 2000: 88mt stearic acid, Melbourne to Keelung, US$40,920
(iii)Purchase Orders for chemicals from Symex to Lin Sun.
12 April 2000: oleic acid, Melbourne to Keelung, US$47,040
27 July 2000: 80 drums @ 200kg, oleic acid, Melbourne to Keelung US$45,840
27 July 2000: 80 drums @ 150kg, oleic acid, Melbourne to Manila US$11,820.
17 October 2000: 80 drums @ 150kg, oleic acid, Melbourne to Manila US$11,580
10 November 2000: 80 drums @ 200kg, oleic acid, Melbourne to Keelung US$43,2000
10 November 2000: 80 drums @ 150kg, oleic acid, Melbourne to Manila US$11,160.
(xviii)16 Bills of Lading for 2000, corresponding to the above transactions.
(xix)In about March 2000, the Respondent wrote to Fa-Chen Huang, to ask him to fill in a form 1010 for the 36 months survey. The form was filled in and returned (undated) to the Respondent, some time before 2 June 2000. The returned form indicated that Lin Sun was in the business of purchasing fresh frozen meat products and oleic acid in Australia and exporting to clients in Taiwan and the Philippines. The company was said to have a total annual income of $851,417 with total annual expenses of $850,856. Mr. Huang was said to spend about 10 to 15 hours per week in the business and to make $10 per week before tax out of it.
(xx)The Respondent, by letter dated 2 June 2000, sought from Mr. Huang, documentary evidence to verify the nature of his business and of his involvement in it. The letter was sent to 6A Westland Place, Waterford, W.A.
(xxi)The Respondent had received no reply by 18 July 2000 and on that date wrote to Mr. Huang to tell him that the Respondent had serious misgivings about some of the information on the form 1010 and about his day-to-day activities in relation to the company Lin Sun. Mr. Huang was also warned of an intention to cancel his Business Skills visa. This letter was also sent to Westland Place.
(xxii)On 18 July 2000, the Respondent also wrote to Hsin-Hsi Chiu at the Westland Place address, to tell her that the Respondent intended to cancel the visas for her and her three children Ya-Lee Huang, Chih-Hao Huang and Chih-Wei Huang.
(xxiii)On 24 July 2000, the Respondent received a letter from Fa-Chen Huang dated 11 July 2000, with the Westland Place address on the top right hand corner. Mr. Huang said that he was complying with the request of 2 June 2000 and that he had enclosed the documents. He enclosed about 40 pages of documents. (He was not in Australia at the time.)
(xxiv)On 21 August 2000, the Respondent received a reply from Fa-Chen Huang, to the letter dated 18 July 2000 (the notice of intention to cancel). He wrote a four page letter which dealt with the concerns raised in the previous letters from the Respondent.
(xxv)The Respondent received no correspondence from the family members.
(xxvi)On 23 November 2000, the Respondent decided to cancel the Business Skills visa of Fa-Chen Huang and also the secondary visas of the family members.
(xxvii)On 15 December 2000, Lin Sun entered into a contract with Pasminco Metals Pty Ltd (Australian company) to purchase between 1,200 to 1,800 tonnes of refined lead at the rate of 150 tonnes per month from January to December 2001. A Taiwanese company, Parex, is the exclusive agent for Pasminco in Taiwan. Lin Sun was required to submit all orders for goods to be exported to Taiwan through Parex.
(xxviii)For the financial year July 2000 to June 2001, Lin Sun generated exports of lead ingot worth US$315,000.
(xxix)Throughout 2001, Lin Sun purchased various products from Trigo Australia Pty Ltd for export to Taiwan. They included lanolin oil products, wool quilt products, propolis and vitamins. The total value was AU$5,230 for the financial year 2000/01.
(xxx)For the financial year 2000/01, Lin Sun was responsible for the export of chemicals worth US$206,460 from Australia.
(xxxi)The total turnover for Lin Sun in 2000/01 was AU$1,032,506 for a profit of AU$33,270.
(xxxii)Lin Sun has never operated in Australia from an Australian business location. The only addresses in Australia which have had any connection with Lin Sun have been the accountant's business addresses and the residential addresses of Chih-Hao Huang.
(xxxiii)All of the above business transactions have been organised by Fa-Chen Huang from Taiwan. For most of the transactions, he has had to attach himself to other companies which have had exclusive rights to market the products he has dealt with.
(xxxiv)So far as the commercial aspects of the above business dealings have been concerned, there has been no point in incorporating an Australian company such as Lin Sun.

The relevant legislation is contained in the Migration Act 1958. It is directed towards overseas business people who wish to use their business skills to establish a significant business in Australia with a view to providing employment opportunities for Australians, export markets for Australian goods and introducing new technology to Australia (among other aims). A Business Skills visa is designed to allow the overseas business person to travel to and from Australia and to live in Australia while conducting the business. It envisages that the holder of such a visa will acquire a significant interest in the Australian company and play a significant role in the day-to-day management of the company. It also envisages that the business person will probably wish to have close family members accompany them while they live in Australia. Hence the provision of secondary visas for family members.

LEGISLATIVE FRAMEWORK

Section 134 of the Act states:
"(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.
…
          (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.
…
(9) The Minister must not cancel a business visa under subsection (1), (3A) or (4) unless a notice under section 135 was given to its holder within the period of 3 years commencing:
(a)if its holder was in Australia when he or she was first granted a business visa – on the day on which that first visa was granted; or
(b)if its holder was not in Australia when he or she was first granted a business visa – on the day on which its holder first entered Australia after that first visa was granted.
…
(10) In this section:
business visa means:
  (a)       a visa included in a class of visas, being a class that:
(i)        has the words Business Skills in its title; and
(ii)       is prescribed for the purposes of this paragraph; or
  (b)       a visa:
(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and
(ii)that is of a kind prescribed for the purposes of this paragraph; or
(c)a return visa that is granted to a person who is or was the holder of a business permit or business visa;
that is or was granted on or after 17 February 1992;
…
family member's visa means a business visa held by a person:
(a)who is or was a member of the family unit of another person who held a business visa; and
(b)who would not have held the business visa if he or she had never been a member of the family unit of the other person;
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;"

Section 135 states:

"(1) Before cancelling a visa under subsection 134(1), (3A) or (4), the Minister must give its holder a written notice:
(a) stating that the Minister proposes to cancel the visa; and
(b)inviting its holder to make representations to the Minister concerning the proposed cancellation within:
(i)if the notice is given in Australia – 28 days after the notice is given; or
(ii)if the notice is given outside Australia – 70 days after the notice is given.

(2) The holder may make such representations to the Minister within the time specified in the notice.
(3) The Minister must give due consideration to any representations.

(4) If:
(a)the time specified in the notice ends after the end of the period referred to in subsection 134(9); and
(b)at the end of the period of 90 days commencing at the time specified in the notice, the Minister has not made a decision on whether to proceed with the cancellation;

the Minister is not to proceed with the cancellation.
(5) If the Minister decides not to proceed with the cancellation, the Minister must give its holder written notice to that effect."

Fa-Chen Huang contends that, in the performance of his duties as the Managing Director of Lin Sun, he has been required to spend substantial periods of time out of Australia sourcing purchases in Taiwan, the Philippines, China and other countries. He has also provided service and technical support to overseas purchasers of Lin Sun's products. He claims to have been managing Lin Sun on a day-to-day basis.
The Tribunal accepts that Fa-Chen Huang had a substantial ownership interest in Lin Sun and that he had sole management of Lin Sun.
The Tribunal accepts that export transactions involving significant amounts of money have been conducted in the name of Lin Sun between 1997 and 2001. The Tribunal also accepts that a person who is engaged in the business of exporting goods from Australia may have to spend lengthy periods of time out of Australia. Nevertheless, the Tribunal has three main concerns in this case.
(i)Whether the activities of Lin Sun have amounted to a business at all (eligible or otherwise).
(ii)Whether, if the activities of Lin Sun have amounted to an eligible business, the business was "in Australia"; and
(iii)Whether to comply with the Act, it was necessary for Fa-Chen Huang to actively participate in the day-to-day management of the business in Australia.
From the date when the Business Skills visa was granted to Fa-Chen Huang, 25 August 1997, until the date of cancellation, 23 November 2000, the activities of Lin Sun produced a profit of about $5,000 and returned on average about $10 per week to Fa-Chen Huang. One of the most significant factors to be taken into account in determining whether or not an activity amounts to carrying on a business is whether or not there is an intention to make a profit. If an activity has not and is not likely to result in a reasonable return for energy and money expended, then it is more likely than not that the person so engaging in the activity does so for motives other than the carrying on of a business. The activities carried on in the name of Lin Sun have been virtually revenue neutral. The Tribunal is not satisfied that Lin Sun was a company that was carrying on business. If Lin Sun was carrying on business it was doing so in Taiwan, certainly not in Australia. The act of ordering Australian goods from a base in Taiwan does not constitute the management of a business in Australia.
Not only must the eligible business operate in Australia to comply with the Act, the visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia, albeit with trips overseas from time to time.
Fa-Chen Huang has not complied with the Act and there is no evidence to suggest that he has any intention of moving to Australia to do so.
The decision to cancel the Business Skills visa of Fa-Chen Huang is affirmed.
The Tribunal is satisfied that the secondary visa holders were all informed by the Respondent of the intention to cancel their visas by the letter which was sent to Hsin-Hsi Chiu at Westland Place on 18 July 2000. The Westland Place address was the address to which the Respondent directed correspondence to all of the Applicants. Chih-Hao Huang lived at that address. He used to open the letters from the Respondent and send them on to his father for reply. An example of the arrangement is set out in the application by the secondary visa holders for an extension of time within which to apply for review to the Administrative Appeals Tribunal.
"A. Explanation of the Delay
8.Mr Fa-Chen Huang's application was lodged within time to the Tribunal on 19 December 2000.
9.The Applicants did not make applications to that Tribunal at the same time as they did not have the benefit of legal advice. At that time the Mr Fa Chen Huang was assisted by a Taiwanese based migration consultant. That migration consultant is not a registered migration agent for the purposes of the Migration Act.
10.Mr Fa Chen Huang does not read or write English neither does the applicant Ms Hsin Hsi Chiu (his spouse). The applicant Miss Ya Lee Huang (the daughter) and Mr Chih-Hao Huang (the son) sent the letters from the Respondent advising them of the decisions to cancel their respective Visas to their father in Taiwan to handle the matter."

Hsin-His Chiu lives in Taiwan and has visited Australia on rare occasions for short periods. It was submitted on her behalf that if her visa is cancelled she will not be able to visit her sons and that she would therefore suffer "extreme hardship" within the meaning of that term in subsection 134(5) of the Act. The Tribunal is not satisfied that she would not be able to obtain an appropriate visa to cover a visit to her sons.
The decision to cancel the visa of Hsin-Hsi Chiu is affirmed.
Ya-Lee Huang is a student who lives in the USA. It was submitted that if her visa was cancelled she would not be able to visit her brothers. The Tribunal is not satisfied that she would not be able to obtain an appropriate visa to cover a visit to her brothers.
The decision to cancel the visa of Ya-Lee Huang is affirmed.
Chih-Hao Huang has lived permanently in Australia since 23 November 1994. He has not lived in Taiwan since 1990. He has lost contact with Taiwan. He is in the final stages of university studies in Australia. The Tribunal accepts that if his visa is cancelled he will experience extreme hardship.
The decision to cancel the visa of Chih-Hao Huang is set aside.
I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member
Signed:         .....................................................................................
  Associate
Dates of Hearing  14 August 2001, 18 September 2001
Date of Decision  2 August 2002
Counsel for the Applicant         Mr. D. Rangiah
Solicitor for the Applicant          Nicol Robinson Halletts
Solicitor for the Respondent    Blake Dawson Waldron