Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 283
•17 March 2004
DECISION AND REASONS FOR DECISION [2004] AATA 283
ADMINISTRATIVE APPEALS TRIBUNAL )
) N° V2002/1177
)
GENERAL ADMINISTRATIVE DIVISION
Re
HOU LAM YAM
Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mrs J. Dwyer, Senior Member,
Mr W. McLean, MemberDate17 March 2004
PlaceMelbourne
Decision
The Tribunal sets aside the decision under review and in substitution decides that the Business Skills Visas of Ms Yam and her family members Mr Sun and Ms Sun are not cancelled.
[sgd] Mrs Joan Dwyer
Senior Member
CATCHWORDS
IMMIGRATION – cancellation of business skills visa – applicant has a substantial ownership interest in an Australian company but it is not a “business” and therefore not an “eligible business” – operation of s 134(2) Migration Act 1958 – meaning of “genuine effort” – meaning of “day to day management of a business” – finding that applicant had made a genuine effort to obtain a substantial ownership interest in an eligible business by developing the activities of the corporation into an eligible business – finding that day to day management of a business does not require that the management all be in Australia or that it be on a daily basis – decision set aside – visas of applicant and her family members not cancelled.
PRACTICE AND PROCEDURE – relevant date for satisfaction of statutory criteria – weight to be given to Migration Series Instruction when it suggests more onerous conditions than the words of the legislation.
Migration Act 1958 (Cth), s 134, 136, Subdivision G.
Administrative Appeals Tribunal Act 1975 (Cth), s 37.Social Security Act 1947(Cth).
Kim v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCA 31
Re Lau and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 703
Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Ming Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997
Re Freeman v Secretary, Department of Social Security (1988) 87 ALR 506
Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 28 ALD 50
ACI Pet Operations Pty Ltd v Comptroller-General of Customs (1993) 118 ALR 114
Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 2
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Re Haman and Minister for Immigration and Multicultural & Indigenous Affairs [2002] AATA 1113
Re Wong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
Re Birdseye and Companies and Auditors and Liquidators Disciplinary Board (2001) 65 ALD 281 at 290
Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513 at 526;
Re Suryaty and Minister for Immigration and Multicultural and Indigenous Affairs (2003) 37 AAR 341
Hope v Bathhurst City Council (1980) 144 CLR 1
Green v Daniels (1977) 13 ALR 1
Re Dainty and Minister for Immigration and Ethnic Affairs 6 AAR 259
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Ashton and Secretary to the Department of Primary Industry [1985] 4 AAR 65
Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77
Puzey v Federal Commissioner of Taxation (2003) 201 ALR 302
Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
Re Widjaja and Minister for Immigration and Multicultural Affairs [2003] AATA 380REASONS FOR DECISION
17 March 2004 Senior Member J Dwyer
Mr W McLean, MemberMATTER V2002/1177
1. This is an application for review of a decision made on 4 October 2002 under s 134(1) of the Migration Act 1958 (“the Act”), by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (“the Minister”). That decision cancelled Ms Hau Lam Yam’s Business Skills Visa. The visas of Ms Yam’s husband, Mr Lianzhang Sun, and her daughter, Ms Yu Hui Sun were cancelled the same day, as required by s134(4) of the Act.
THE HEARING
2. At the hearing Mr G Gilbert of Counsel appeared for Ms Yam. Mr M Brereton, a solicitor with the Australian Government Solicitor, appeared for the Minister. Ms Yam gave evidence with the assistance of a Mandarin interpreter. Evidence on behalf of Ms Yam was given by Ms Cheng, who is the accountant of RSS Corporation Pty Ltd (“RSS”), a company registered in Australia, and by Ms Yoo and Mr Zatsepin, who have had business dealings with Ms Yam, acting on behalf of RSS. Telephone evidence from Hong Kong was given by Mr Au, the accountant of Hamrich Limited. Ms Sun gave evidence. The Respondent called no evidence. The Tribunal had before it the documents (“the T Documents”) lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and the exhibits tendered during the hearing.
THE RELEVANT LEGISLATION
3. The matter arises under section 134 of the Act which, so far as relevant, provides:
134 (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;
…
(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.
4. Section 134(10) contains a number of definitions. It is not in dispute that Ms Yam is the holder of a business visa to which ss 134 and 135 of the Act apply. Thus, it is not necessary to set out the definition of “business visa”, nor is it necessary to set out the definition of “family member’s visa” as it is not in dispute that Mr Lianzhang Sun and Ms Sun both hold a family member’s visa as defined. However the following definition is relevant:
(10) In this section:
…
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.
…
BACKGROUND FACTS
5. The following matters are not in dispute:
(a)Ms Yam was born on 25 April 1952 in Hong Kong.
(b)She was a citizen of mainland China until 1994 when she and her husband became Hong Kong nationals.
(c)Ms Yam and her husband own a company in Hong Kong named Hamrich Limited (“Hamrich”). Ms Yam owns 70% of the shares issued by Hamrich and her husband owns the remaining 30% of the issued shares. Hamrich is an importer/exporter trading in electrical goods and equipment.
(d)On 22 June 1999, Ms Yam was granted a “sub class 127 Business Owner Visa” under the Migration Regulations 1994 (T4 pp29-39). This is a “business visa” within the meaning of s 134 of the Act.
(e)As a result of the grant of the visa, Ms Yam’s husband, Mr Sun, and her daughter, Ms Sun, were each granted a “family member’s visa” within the meaning of s 134 of the Act.
(f)Ms Yam arrived in Australia on 12 July 1999.
(g)On 6 October 2000, Ms Yam registered an Australian proprietary company, RSS Corporation Pty Ltd (RSS). Ms Yam, her husband and her daughter are the sole directors and shareholders.
(h)In July 2001, a 24 month survey, in accordance with the requirements of the visa, was completed by Ms Sun on behalf of her mother Ms Yam (T8 pp.144‑169). The document was signed by Ms Yam on 30 July and lodged with the Department of Immigration and Multicultural and Indigenous Affairs (“the Department”) on 18 August 2001.
(i)An officer of the Department requested further information in relation to Ms Yam’s business activities on 3 December 2001 (T9 pp.170-171).
(j)Ms Yam provided further documentation in a letter received by the Department on 21 January 2002 (T10 pp.172‑179).
(k)On 12 June 2002 Ms Yam was given notice in writing of the intention to cancel her business owner visa on the ground that she was not meeting her visa obligations under s 134(1) and (2) of the Act (T11 pp 180‑185). Notice was also given to the dependent visa holders. Ms Yam was invited to provide a response as to why her visa should not be cancelled.
(l)Further written submissions with additional documentation were provided by Ms Yam through a Migration Agent on 18 and 19 July 2002 (T13 pp 190-323) and on 16 August 2002 (Supplementary T docs pp 340‑364).
(m)On 4 October 2002 a delegate of the Minister cancelled the visa and advised Ms Yam, Mr Sun and Ms Sun of the cancellation.
(n)On 9 October 2002, the delegate received a further submission on behalf of Ms Yam as to her active participation and continuous effort in business development (T14 pp32 4-339).
(o)On 30 October 2002 Ms Yam applied to the Tribunal for a review of the decisions to cancel her visa and those of her dependent family members.
(p)On 19 March 2003 Ms Sun lodged a separate application for a review of a decision together with an application for an extension of time. The Respondent did not object to the grant of an extension of time. Time was extended to allow the application to be lodged. That application, V2003/301, was withdrawn after the hearing of this matter.
6. The statutory scheme for the cancellation of business visas is set out in Subdivision G (ss 134 – 137) of the Act. The Minister has a discretionary power to cancel a business visa under s 134(1) of the Act (Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31).. If the Minister is satisfied that one of the conditions in s 134(1) exists, and the discretion to cancel arises, the decision maker must then go to s 132(2) which places a limit on the discretion to cancel where the holder has made a “genuine effort” to meet the requirements of s 134(1). Thus, the cancellation of Ms Yam’s business visa will be considered in these two stages. If the Minister cancels a person’s business visa under s 134(1), the Minister is then required to cancel family members’ visas, pursuant to s 134(4), unless cancellation would result in “extreme hardship” to that person.
7. A preliminary point, raised at paragraph 16 of the Applicant’s Statement of Facts and Contentions, is the relevance of evidence relating to Ms Yam’s business affairs after the date of cancellation.
RELEVANCE OF EVIDENCE AS TO EVENTS AFTER 4 OCTOBER 2002
8. It was submitted at paragraphs 16 and 17 of the Applicant’s Statement of Facts and Contentions:
16. Whilst the Tribunal is primarily concerned with the position as at the date of cancellation (4 October 2002), it is nevertheless relevant to look at activities since that date. As pointed out in Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703 (Member Carstairs) at [24]:
…The Tribunal is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist the determination of whether or not the decision to cancel is the correct or preferable one (Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628). Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 states the position as follows:
…
41. Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, is that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision-maker or in existence at the time that the decision under review was made.
25.In Re Tang [and Minister for Immigration and Multicultural Affairs [2000] AATA 997], the Tribunal stated (at para 9):
…The ordinary principles of administrative review apply. It is the function of this Tribunal to deal with the question having regard to the evidence put before it at the time and having all the facts and circumstances that have occurred up until the date of the hearing.
17. It is therefore appropriate and permissible to take a global view of the principal applicant’s business activity in determining whether s. 134(1)(a) and (b) has been complied with…
9. The Respondent’s Statement of Facts and Contentions dealt with the issue at paragraphs 42-47. We agree with the submissions of the respondent to the effect that there is a relevant distinction between a cancellation decision and a decision to grant an ongoing benefit. Davies J in Re Freeman v Secretary, Department of Social Security (1988) 87 ALR 506 at 509 explained:
The jurisdiction of the tribunal arose from the application made to it to review the decision of the delegate who, on 18 August 1987, affirmed the decision of the officer made on 19 May 1987. The function of the tribunal was therefore to reconsider the decision of 19 May 1987 and to determine whether the decision to cancel Mrs Freeman’s widow’s pension at that time was the correct or preferable decision to have been made. In coming to its decision, the tribunal was entitled to take into account all the facts proved before it. But the issue was whether, having regard to those facts, the decision to cancel on the 19 May 1987 was the correct or preferable decision, not whether Mrs Freeman had an entitlement to a widow’s pension as at the date of the tribunal’s decision.
10. The decision in Freeman depended in part on the construction of the Social Security Act 1947. However, it was approved by the Full Court of the Federal Court in Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 28 ALD 50 at 59. In that case the issue arose in a different context, but the Full Court emphasised the importance of ascertaining the factual situation as at the date of the relevant decision. The same approach was adopted in ACI Pet Operations Pty Ltd v Comptroller-General of Customs (1993) 118 ALR 114 at 141-142.
11. The respondent’s Statement of Facts and Contentions also referred to Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257, which is a decision as to the cancellation of a visa under the Migration Act 1958. Katz J said at p264:
[31] The MRT was not concerned, in making its decision, with the issue whether Mr Nong was or was not in compliance with condition 8202 on 6 January 2000, the date of its own decision. Rather, it was concerned with the issue whether Mr Nong had or had not been in compliance with condition 8202 on 30 March 1999, the date of the delegate’s decision.
12. The significance of the date of cancellation in a review of a cancellation decision was emphasised by Deputy President Forgie in Re Griffiths v Migration Agent Registration Authority [2001] AATA 240. The Deputy President said at para 39:
Subject to any legislative variation, the general principles are, rather, those enunciated in Drake [Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577] and Freeman, to which I have referred. Where the decision under consideration is a cancellation decision, the Tribunal must consider whether that decision was correctly made at the time it was made. Where the decision under consideration relates to an entitlement (be it a pension or registration), the Tribunal may consider whether that entitlement exists at any time up to the date of the hearing.
13. In Re Haman and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 1113, Deputy President Hotop considered this issue. He said at paras 52 and 53:
52. This issue has been the subject of differing approaches adopted by Deputy Presidents of the Tribunal in recent decisions on review of decisions cancelling Business Skills visas. In Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103 Deputy President McMahon said (at 105):
“The ordinary principles of administrative review apply. It is the function of this tribunal to deal with the question having regard to the evidence put before it at the time and having regard to all facts and circumstances that have occurred up until the date of the hearing.”
In Re Wong and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54, however, Deputy President Handley, following the approach adopted by Deputy President Forgie in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 at para 39, and in Re Birdseye and Companies, Auditors and Liquidators Disciplinary Board (2001) 65 ALD 281 at 290 (which involved the cancellation of registration of professional qualifications), confined his consideration to relevant facts as at the date of the decision to cancel a Business Skills visa that was under review in that matter. The approach adopted by Deputy President Handley in Re Wong (above) is consistent with dicta of the Federal Court of Australia in recent cases relating to review by, respectively, the Immigration Review Tribunal, and (its successor) the Migration Review Tribunal, of decisions to cancel Student visas: see Minister for Immigration and Multicultural Affairs v Sharma (1999) 90 FCR 513 at 526; Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257 at 264.
53. Having regard to the nature of the relevant decision under review in the present case, and having regard to the nature of the criteria specified in s 134 of the Act on the basis of which that decision was made on that date, the Tribunal agrees with the approach adopted by Deputy President Handley in Re Wong (above). Accordingly, for the purpose of reviewing the relevant decision in this case, the Tribunal will, in accordance with the respondent’s submission, confine its consideration to material placed before it which relates to relevant “events, actions or intentions” which occurred or which were held (as the case may be) prior to, or at the time of, that decision – namely, 19 April 2001.(emphasis added)
14. We have concluded that we should follow the approach adopted by the Federal Court in Sharma and Wong, and by Deputy Presidents Forgie, Handley and Hotop. We will therefore confine our consideration to material that relates to relevant “events, actions or intentions” prior to or at the time of the cancellation decision – namely 4 October 2002.
CANCELLATION UNDER s134(1) OF THE ACT
15. The power to cancel a business visa arises under s 134(1) of the Act which, so far as relevant, provides:
134 (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.
16. It is clear from a reading of s 134(1) that the power to cancel a business visa arises only if the holder is found to be a person referred to in sub‑section 134(1). Thus the first issues for consideration by the Tribunal are:
(a)Whether, as at 4 October 2002, Ms Yam had “obtained a substantial ownership interest in an eligible business in Australia”;
(b)Whether, as at 4 October 2002, Ms Yam was “utilising … her skills in actively participating at senior level in the day to day management of that business”..
As at 4 October 2002, did Ms Yam have a substantial ownership interest in an eligible business in Australia?
17. The evidence is that Ms Yam has at all relevant times held 35 per cent of the shares in RSS, which was incorporated in Australia on 6 October 2000. The other shares are owned by her immediate family. The respondent conceded that Ms Yam at all relevant times had a “substantial ownership interest” in RSS.
18. The more difficult issue is whether RSS is an “eligible business in Australia”. The term “eligible business” is defined in s 134(10) of the Act, which provides:
(10) In this section:
…
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.
…
19. The primary question is whether RSS is a “business” at all. An “eligible business” must be a “business” that the Minister reasonably believes results or will result in one of the benefits to Australia specified in factors (a) to (f) of the definition of “eligible business” in s 134(10).
20. In order to decide whether RSS was a “business” as at 4 October 2002, it is necessary to identify the characteristics of a “business”. Deputy President Wright considered that issue in Re Suryaty and Minister for Immigration and Multicultural and Indigenous Affairs (2003) 37 AAR 341. He said, at para 10:
The question of whether or not an individual is participating in the day to day management of a business in Australia involves two issues.
(1) To be carrying on a “business” it must be shown that the relevant undertaking is a commercial enterprise in the nature of a going concern involving activities being pursued for the purpose of profit on a continuous and repetitive basis (Hope v Bathhurst City Council (1980) 144 CLR per Mason J at p8-9). See also Tang and Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656 at paragraph 11; Ong and Minister for Immigration and Multicultural Affairs [2003] AATA 178 at paragraph 34(a).
(2) The relevant business must be carried on “in Australia”.
21. In Hope v Bathurst City Council Mason J said at pp 8-9:
Although it has been common ground that “business” is used in its ordinary meaning in s.118(1) [the phrase used was “carrying on a business”], the courts below have refrained from saying what that meaning is. This is perhaps understandable because, as a glance at the Shorter Oxford Dictionary will show, the word has many meanings. Ironically it is the last meaning given by the Shorter Oxford Dictionary, "19. A commercial enterprise as a going concern", that comes closest to the popular meaning which the courts appear to have acted on in the present case. In truth it is the popular meaning of the word as used in the expression "carrying on a business", rather than the popular meaning of the word itself, that is enshrined in the statutory definition. It is the words "carrying on" which imply the repetition of acts (Smith v. Anderson (1880) 15 Ch D 247, at pp 277-278 ) and activities which possess something of a permanent character. This conclusion serves to emphasize that it is necessary to engage in a process of construction in order to arrive at the meaning of the word in s. 118 (1). I accept, then, that "business' in the sub-section has the ordinary or popular meaning which it would be given in the expression "carrying on the business of grazing". It denotes grazing 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. Putting aside the question whether the activities have a "grazing" character, the critical issue for decision is whether the material before the Court reasonably admits of different conclusions on the question whether the appellant's activities constitute a "business". On the facts as found, I conclude that the appellant's activities amounted to a business and that no other conclusion was reasonably open. In this respect I agree with what Reynolds J.A. said in his dissenting judgment. Transactions were entered into on a continuous and repetitive basis for the purpose of making a profit. The activity had a permanent character in that it had been carried on without interruption since 1965. The appellant sought customers by advertising and kept appropriate financial records. The land, though small in area, was put to its best potential use and the pastures were improved and facilities including fences were provided for that use. There is nothing in the findings to suggest that the activities were other than genuine and real.(emphasis added)
22. Mason J, in Hope, quoted from the reasons for decision of the majority in the Court of Appeal. Glass J had held that the relevant activities “did not amount to a genuine, real or significant business”, and Samuels JA expressed the view that “significant” meant “important”, “real”, “genuine” or “weighty”.. Mason J held that it was an error to hold that the magnitude or size of activites was relevant to the issue of whether they constituted a business. He endorsed the view that “a man may carry on a business though in a small way”.
23. From the reasons of Mason J, in Hope, we understand that, in deciding whether activities constitute the carrying on of a business, it is relevant to consider:
(i)Whether transactions are entered into on a continuous basis for the purpose making a profit;
(ii)Whether the activity has a permanent character, and how long it has been established;
(iii) Whether customers are sought and financial records are kept; and
(iv) Whether the activities are genuine and real.
24. Although the term “carrying on a business” is not used in s134(1)(a) of the Act, we consider that for a business to be an “eligible business”, it must be a business which is being carried on. Otherwise it is hard to see how it could satisfy the definition of an “eligible business”, which requires that it “be resulting or will result” in one or more of the benefits to Australia set out in paragraphs (a) to (f) of the definition.
25. The Applicant’s Statement of Facts and Contentions at paragraphs 9‑11 set out the various different business activities with which the applicant has been involved, as follows:
“9. The relevant facts concerning the business activities of the principal applicant are conveniently set out in her statutory declaration dated March 2003. Briefly, the principal applicant has been involved in three different businesses, the:
(a) Export of tallow;
(b) IC sim cards; and
(c) Camalot 4398 selective coating systems.
10. The principal applicant has also been involved in negotiations for two other businesses, namely:
(a) Slaughtering systems; and
(b) Bridging education systems.
11. She has also been engaged in a number of business ventures that have not succeeded for one reason or another, namely:
(a) Exporting Australian wool;
(b) Exporting milk powder, milk production equipment and water purification systems;
(c) Exporting sheepskins;
(d) Exporting hot (sic) sensitive paper;
(e) Manufacturing & importing transformer.
(a) Export of Tallow
26. The evidence is that in the two years RSS was incorporated from October 2000 to October 2002, the only business transactions it had completed, involved the export of tallow from Australia to China. In each case Ms Yam purchased the tallow from Ververis Tallow Pty Ltd (“Ververis”), an Australian company run by Ms Yoo, who gave evidence at the hearing. The first consignment was shipped on 29 November 2001. There were lengthy delays due to Customs difficulties in China. Eventually on 2 February 2002 payment was made as agreed. A second consignment of tallow was shipped on 7 July 2002. This time there were problems raised by the purchaser as to colour and quality. Payment was not made until October 2002, due to those disputes. Although the precise date of payment was not given in evidence, that shipment is relevant and must be taken into account in deciding whether RSS is an “eligible business”.
27. The third shipment of tallow was the subject of a contract signed on 29 November 2002. There is evidence (A1, annex D) that negotiations with Ms Yoo in respect of that shipment commenced on 12 November 2002. That is outside the relevant period. Similarly, we have decided, for the purpose of s 134(1), to disregard the fourth shipment of tallow, which did not take place until March 2003.
28. Thus we have given consideration to two shipments of tallow in the relevant period. The difficulty Ms Yam faces is that an analysis of the export of tallow by RSS does not show that it was ever profitable. Ms Yam asserted in July 2002 (T13 pp190-194) that the tallow business was “generating considerable profits” and had a “brilliant future” with “monthly orders”. The figures we have gleaned from the material before us do not show any clear profit, further there were never “monthly orders”, and the business has not continued since the fourth shipment in March 2003. Ms Yam said in her evidence that she had ceased exporting tallow because she had realised that it could not be profitably undertaken, unless the price in Australia was cheaper.
29. The figures in the material before us as to the profitability of the first two shipments was inconclusive. The first shipment was arranged by Ms Yam though Ms Yoo of Ververis. Ms Yam purchased tallow from Ververis for US$ 6,144. The evidence was that the price was inclusive of GST (which would have been approximately $558 on our calculation). Freight cost AUD$ 1,061.34 (T docs p175). The tallow was shipped to China on 29 November 2001. The purchase price was US$ 5,586. There was no precise evidence as to the profit or loss on the transaction, but it seems that, when GST is deducted and freight is taken into account, the purchase price of US$5,586 must mean that RSS made a loss on the transaction.
30. The second shipment resulted from a contract signed on 5 May 2002. The goods were shipped on 7 July 2002. Again all arrangements as to shipping were made by Ms Yoo. The purchase price paid by Ms Yam was AUD 26,626 including GST of AUD 2,662.66 plus AUD 2,210 for freight, the total coming to AUD 28, 836.60 (T docs p 296). Ms Yam gave evidence that the purchaser was not happy about the quality and colour of the tallow when it reached China and settlement was delayed until October 2002. She said that this transaction was not very successful.
31. The export of tallow by RSS in the relevant period would be export of Australian goods as referred to in s 134(10)(c) of the Act, if RSS was a business.
(b) Purchase and Resale of Sim Cards
32. In her affidavit (A1) Ms Yam explained that Hamrich specialised in exporting electronic and semi-conductors to China. She said she looked into transferring that business to Australia. There was no explanation as to why she did not do so.
33. Ms Yam did however make inquiries as to the purchase of Sim cards from Australia. She was told they would have to be purchased from the Hong Kong agents of Dallas, which is an American company. By invoices dated 8 and 25 October 2002, RSS purchased some electronic components from Ingram Micro (China) Ltd for delivery in Hong Kong (A1, annex G). Those goods were not sold by RSS until December 2002 when RSS obtained payment of US$81,577 (AUD$156, 920) from a Chinese company. The transaction had no connection with Australia, except that the purchase was made by Ms Yam in the name of RSS. It is also outside the relevant period.
34. A similar component was purchased by RSS in January 2003 from Mr Zatsepin of FLC MicroDesign Pty Ltd, a Melbourne-based company. That is also outside the relevant period.
(c) Camalot 4398 selective coating systems
35. This was a one off transaction (A1, annex M). A Chinese client asked Ms Yam to find a selective coating system. It seems that in about July 2002 Ms Yam conducted Internet searches for the product and, through her Hamrich associate Mr Ting, contracted to supply one system. It was purchased by RSS from American Tec Co Ltd in Hong Kong for US$66,212, including freight, on 15 August 2002. On 20 August 2002 the system was sold to the client for whom it had been purchased for US$70,380. Ms Yam stated in her affidavit that RSS made a profit of US$4,168 (approx AUD$8,000). Because of complications as to duty (A1, annex M) and as to delivery of an accessory (A1, annex M), it was not a smooth transaction. Payment was received in two instalments in November 2002 and January 2003. The transaction did not give rise to any expectations of further similar business.
(d)“Negotiations for businesses” & “business ventures that have not succeeded”
36. RSS participated in negotiations regarding the purchase of slaughtering systems and the setting-up of an education bridging system. The negotiations in respect of the slaughtering system did not proceed and did not have any of the characteristics of a business. The negotiations in respect of the education bridging system did eventually proceed, although they did not constitute a business in the relevant period. They are relevant to whether Ms Yam made a “genuine effort” to obtain a substantial ownership interest in an eligible business.
37. The Applicant’s Statement of Facts and Contentions also set out a number of business ventures in which Ms Yam had engaged but which had not succeeded. We have decided that they do not give RSS the character of an eligible business, but they will be considered under s 134(2).
Findings as to whether Ms Yam had a “substantial ownership interest” in an “eligible business in Australia”
38. We find that in the relevant period RSS arranged and completed two exports of tallow from Australia to China and one sale of a selective coating system purchased from Hong Kong and sold to China. In order to decide whether RSS was an “eligible business” we refer to the factors identified in Hope v Bathurst City Council. We find that in the period 6 October 2000 to 4 October 2002, RSS did not enter into transactions “on a continuous and repetitive basis for the purpose of making a profit”. There were 2 transactions for the sale of tallow, which, so far as we can discern, made no profit. There was one sale of a Collective Camelot Coating System. Neither of the activities had a permanent character. They were tried and discarded as suitable business activities. In the case of the export of tallow there were two shipments in the relevant period, and then two more, before Ms Yam realised that it was not a profitable business venture. The dealing with the Selective Camelot Coating System seems to have been a “one off” transaction, which made some profit but was not repeated.
39. We find that Ms Yam was looking to establish RSS as an export/import business, but, as at 4 October 2002, she had not found an appropriate commodity on which to base the business. Thus, there was no advertising of its products to seek customers. We have concluded that, as at 4 October 2002, it could not be said that RSS was carrying on a business or even was a business. It was a corporation but not a business.
40. Our finding that RSS was not a business as at 4 October 2002 means that we find that it was also not an “eligible business” as the definition in s 134(10) of the Act provides that an “eligible business” “means a business”.
41. We find that Ms Yam, as at 4 October 2002, had not obtained a substantial interest in a business in Australia, during the relevant period and therefore could not satisfy the requirements of s 134(1)(a) of the Act.
42. Because of our finding as to s 134(1)(a) it is not necessary for us to decide under s134(1)(b) whether Ms Yam as at 4 October 2002, was utilising her skills in actively participating at a senior level in the day to day management of the business of RSS. The reference to “that business” in s134(1)(b) makes it clear that paragraph(b) only becomes relevant where a visa holder has obtained a substantial interest in an eligible business in Australia, but may not be actively participating at a senior level in the day to day management of that business.
43. Similarly, the reference in s134(1)(c) to the visa holder continuing to hold a substantial interest and utilise skills in the management of an eligible business in Australia, means that, as we have found that Ms Yam has not been involved with an “eligible business in Australia”, that paragraph has no application to this matter.
44. As Ms Yam had not obtained a “substantial ownership interest in an eligible business in Australia” on 4 October 2002, we find that the Minister had a discretionary power to cancel Ms Yam’s business visa under s 134(1) of the Act.
THE LIMIT ON THE DISCRETION TO CANCEL IN s 134(2) OF THE ACT
45. Section 134(2) is an ameliorative provision. It provides that, even though the Minister is satisfied that a visa holder has not satisfied the visa requirements as indicated in s134(1), the Minister must not cancel the visa if the person has been making genuine efforts to satisfy those requirements. Section 134(2) reads:
(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.
46. Section 134(3) then gives a list of nine matters which the Minister may take into account in determining whether a person has made the “genuine effort” referred to in s134(2). It provides:
(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;
…
47. Section 134(3) is relevant to both paragraphs 134(2)(a) and (b). There is a question as to whether the matters which it specifies as those the Minister may take into account should be read as setting any higher hurdle than the simple words “genuine effort” where they are used in paras 134(2)(a) and (b).
48. We were referred to Migration Series Instruction 133 (“the Instruction”) at T pp117-142. We note that in paragraph 4.5.1 at page 12, the Instruction provides some guidance as to what may be found to constitute “genuine effort”.. The Instruction sets out the factors specified in s 134(3) and then suggests how those factors will be met. As to business proposals, it is suggested that they should be “considered genuine, realistic and achievable”. As to the research requirement, it suggests that there should be written evidence of detailed consultation with at least three business advisers. It suggests, as to presence in Australia, that “physical presence in Australia for more than six months since arrival in Australia as a Business Skills class migrant” is required. The notes contain specific requirements as to transfer of 50 per cent of funds indicated as available for transfer in the Business Skills Points test and minimum dollar amounts in order to satisfy paragraphs 134(3) (f) and (g).
49. Those notes are far more specific than the Act. It appears to have been recognised when they were drafted that, if challenged, they would probably be found to be in breach of the principles in Green v Daniels (1977) 13 ALR 1 at 9. Stephen J there said:
The Director-General is not concerned, in his administration of s 107, with the carrying out of any policy. No general discretion is conferred upon him; instead specific criteria are laid down by this Act and all that is left for him to do is to decide whether or not he attains a state of satisfaction that the circumstances exist to which each of these criteria refer. He must, no doubt, for the benefit of his delegates and in the interests of good and consistent administration, provide guidelines indicating what he regards as justifying such a state of satisfaction. But if, in the course of doing this, he issues instructions as to what will give rise to the requisite state of satisfaction on the part of his delegates and these are inconsistent with a proper observance of the statutory criteria he acts unlawfully; should his delegates then observe those instructions, their conclusions concerning an applicant’s compliance with the criteria will be vitiated.
50. In order to avoid being declared unduly restrictive of the decision-maker”s discretion, paragraph 4.5.2 of the Instruction states:
Where 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 our in subsection 134(2) 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 a “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.
51. We have decided we should give no weight to the Instruction which is clearly more restrictive than the Act. We find helpful the decision of Davies J (President) in Re Dainty and Minister for Immigration and Ethnic Affairs 6 AAR 259. He stated, at 266:
The Tribunal is not bound to apply a practice or a policy adopted by the decision –maker. See Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. However, as Brennan J said in Re Drake and Minister for Immigration and Ethnic Affairs (no 2) (1979) 2 ALD 634 at 639:
“Inconsistency is not merely inelegant: it brings the process of deciding into dispute, suggesting a arbitrariness which is incompatible with commonly accepted notions of justice”.
As was demonstrated in Re Drake (no 2), there are frequently very good reasons why the Tribunal should adopt and apply a relevant policy, particularly one which is appropriately formulated in the political context and which has been enunciated by a Minister of State. See the discussion in Re Drake (no 2) and also in Re Ashton and Secretary to the Department of Primary Industry [1985] 4 AAR 65 at 74-78.
I accept that, in the exercise to discretions under the Australian Citizenship Act 1948, the Tribunal ought generally to apply guidelines or policies which have been established by the Minister…
But to say that, is not to say that the Tribunal ought to treat policy as more than policy. Policy is not a legislative prescription and, though in many cases it will be appropriate to apply policy in all or almost every case, there are circumstances where it is not appropriate to decide a matter merely by reference to a policy which has been laid down…
As was said in Re Ashton (supra) at 75:
“Policy is not law. A statement of policy is not prescription of binding criteria. By conferring a discretion upon a decision-maker, the law requires that all matters relevant to the exercise of the discretion be taken into account.”
52. It is also difficult to know how to apply s 134(3). We have considered whether Ms Yam’s efforts, though genuine in the sense of not being false or fictitious, are sufficient to satisfy the concept of “genuine effort” for s 134(2)(a). Does s134(3) mean that something more than just a “genuine effort” is required? If so what would that be? If s 134(3) means that there must be “significant genuine effort”, how would that be measured, and why is the word ‘significant’ not in s 134(2)?
53. We are of the view that the word “genuine” and the matters mentioned in s 134(3) show that there is a requirement of a level of effort beyond that which is purely superficial or token. Further, it is necessary that Ms Yam establish that she herself has made some real or “genuine effort”. We do not accept that s134(3) can be the basis for rejecting relevant efforts which are genuine, simply because they fall short of the examples given in s 134(3).
54. There are three issues raised by the three paragraphs of s134(2). Each must be satisfied in turn to create a situation where the visa must not be cancelled. First, a visa holder must have made a “genuine effort to obtain a substantial ownership interest in an eligible interest in Australia”. If he or she has also “made a genuine effort to utilise his or her skills in actively participating in the day-to-day management of that business” and, in addition, “intends to continue to make such genuine effort”, then the visa must not be cancelled.
Has Ms Yam made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia?
55. Section 134(2)(a) deals with a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. The primary meaning of the word “obtain” is “to procure” or “acquire”. We accept, however, that one could “obtain” an interest in an eligible business by developing a business. Ms Yam has a substantial ownership interest in RSS, but we have found that it was not “an eligible business in Australia” at the relevant time. However we must consider whether Ms Yam, as at 4 October 2002, had made a “genuine effort” to develop RSS into “an eligible business in Australia”.
56. In deciding that issue we have considered the evidence as to the attempts Ms Yam made to develop RSS into an “eligible business”. We will make reference to activities after the relevant period, in so far as they provide evidence relevant to efforts and intention during the relevant period. Thus we have looked again at the activities set out in paragraphs 9 -11 of the Applicant’s Statement of Facts and Contentions, but with a somewhat less confined focus. We have considered negotiations and proposals during the relevant period, even if they had not led to any actual contracts or transactions.
(a) Shipment of tallow
57. We have considered whether, although the shipment of tallow had not yet developed into a business by 4 October 2002, the evidence establishes that Ms Yam had made genuine efforts to develop that activity into a business. In this context the third shipment is of some relevance, although the evidence does not indicate that any negotiations in respect of this transaction had commenced before 4 October 2002. However there were contacts made with Ververis and with potential customers, during the relevant period, which did allow two further shipments to be made after the relevant period. Although the activity did not become profitable and did not develop into a business, we find that Ms Yam did make “genuine efforts” to develop that activity into a business. Had she succeeded in doing so, RSS would have become an “eligible business”. Thus we find that Ms Yam had been making a “genuine effort” to develop RSS into an “eligible business” in the relevant period
58. Negotiations with which Ms Yam had been involved on behalf of RSS prior to 4 October 2002 are also relevant in considering whether she has been making a “genuine effort” to develop RSS into an “eligible business”. The Applicant’s Statement of Facts and Contentions, in paragraph 10, referred to negotiations in respect of a slaughtering system and in respect of a bridging education scheme between Zhengzhou International Business and Management Institution (“Zhengzhou Business College”) and Deakin University (“Deakin”).
(b) Slaughtering System
59. Ms Yam’s evidence was that she started searching to locate slaughtering systems for RSS to purchase on behalf of a Chinese food products company. The documents (A1, annex N) show that Ms Yam was in contact with a German company seeking a price on the system in January 2001. The product could not be purchased in Australia. After investigating various options Ms Yam decided to purchase the system from CICO Engineering Company Pty Ltd. That company has no Australian connection but Ms Yam arranged for commission for sourcing the system to be paid to RSS.
60. Some contract was signed on 3 April 2003. We are not sure what it covers, but we accept from Ms Yam’s evidence and the documentation provided, that she was making a genuine effort to bring the negotiation to a conclusion before 4 October 2002. The evidence was very confused as to what animals the equipment was to slaughter, whether it was sheep or pigs, and as to whether it was a slaughtering systems or a de-boning and sausage making system.
61. The evidence was so inconclusive that we place little weight on this negotiation as it is unclear whether anything is to be bought and what commission will be paid to RSS. Ms Yam said that the cost was so large, in the vicinity of US$3,599,990, that government assistance was being sought for the project to be finalised. She said that if it ever was finalised there would be a substantial commission paid to RSS. Even so, we are not satisfied that the transaction would assist RSS to become an “eligible business”.
(c) Education Bridging Systems
62. Ms Yam gave evidence as to negotiations she had conducted with Deakin University. She, as a director of RSS, acting on behalf of Zhengzhou Business College, had discussed the possibility of having students study the first two years of their course at Zhengzhou, before coming to Australia for the final year. As Ms Yam pointed out, that proposal would encourage more Chinese students to come to Australia as it would be more affordable than spending all the years of a course in Australia. Ms Yam was appointed the agent for Zhengzhou Business College by a document under seal on 10 May 2002 (A1, annex P).
63. The documents show that Ms Yam met Professor Gamble, the Director of the Law Program in the faculty of Business and Law at Deakin University in Beijing in May 2002. They met again on 13 March 2003 at Burwood Campus. At the later meeting the program was seriously discussed. The proposal was for Deakin University to give credit (or advanced standing) to students who pass up to 8 approved credits at Zhengzhou Business College.
64. When Ms Yam swore her affidavit (A1) on 28 March 2003, she stated that the program would start in June 2003, when 30 – 50 students would come to Australia. That seems to have been unduly optimistic bearing in mind that Professor Gamble, in his letter of 31 March 2003, had written:
We attach a Draft Letter of Intent that outlines the requirements that we have. When we have the required materials and information from ZIMBI [Zhengzhou Business College] we shall be in a position to sign the letter of intent and put the Advanced Standing proposal to the Advanced Standing Committee of Deakin University.
65. The evidence at the hearing in August 2003 was that no students had yet come to Australia and the matter was still in discussion.
66. We find that there is still a prospect that the negotiations may develop as hoped in the future. The negotiations, as at 4 October 2002, did not have any of the characteristics of a business – they were then, and still are, rather negotiations that may, not will, result in a business in the future. However, we find that Ms Yam has made a genuine effort by the negotiations to develop RSS into an “eligible business”.
67. As set out in paragraph 26 above, the Applicant’s Statement of Facts and Contentions, in paragraph 11, set out five “business ventures” in which Ms Yam had been engaged which “had not succeeded for one reason or another”. They were as follows:
(a)Exporting Australian wool;
(b)Exporting milk powder, milk production equipment and water purification systems;
(c)Exporting sheepskins;
(d)Exporting hot (sic) sensitive paper;
(e)Manufacturing and importing transformer.
The evidence as to each must be considered.
a) Exporting Australian Wool
68. The way in which Ms Yam attempted to sell Australian wool was by having it made up into top quality quilts. Ms Yam said that she had started researching this project before she first entered Australia in July 1999. Ms Yam registered a trademark in China and had work done on developing a logo incorporating the letters RSS. She purchased wool and had ten sample quilts made up. She sought buyers in many countries and had some interest from a Chinese company. We find, from the evidence of Ms Yam and from the T documents (p263, 266, 277-281), that Ms Yam was looking into developing a business selling quilts made of Australia wool prior to the cancellation of the visa. In May and June 2002 she was communicating with Mr Ting about the proposal. However it turned out that quilts could not be produced at a competitive price and so the project did not proceed after 22 September 2002 (A1, annex Q).
69. We find that the evidence does establish that Ms Yam was making a “genuine effort” to establish a business which would have involved the export of Australian wool, and thus would have been within the definition of an “eligible business”.
b) Exporting milk powder, milk production equipment and water purification systems
70. The evidence relating to this issue includes a letter dated 10 November 2002 (A1, annex R, p4) from Mr Zatsepin to Ms Yam thanking her for her interest in his company’s water purifying system and hoping that, with her help, his system would be properly presented in China. Mr Zatsepin also referred to discussions about a milk packaging system Ms Yam was seeking in February and August 2002. Ms Yam said in her evidence that she had discussed her client’s requirements with Mr Zatsepin when she was in Melbourne in February and August 2002. They had met at a café or restaurant. Mr Zatsepin could not locate the required product.
71. We do not find that the evidence on this issue establishes that genuine efforts were being made by Ms Yam and Mr Zatsepin to develop an eligible business. We consider that some activity beyond mere expression of an interest is necessary to establish “genuine effort”.
c) Exporting Sheepskins
72. Ms Yam said she had found a supplier of sheepskins in Australia. She had thought of exporting sheepskins to China, but the price was too high, and there were concerns about obtaining payment from Chinese factories in remote and poor areas. Ms Yam was advised by friends that the business had risks. She did not proceed further. Ms Yam said that although the translation (A1, annex S) referred to sheepskins, that agreement related to wool and not to sheepskins. The sheepskin business did not develop.
73. Once again we do not find that the evidence on this issue establishes that genuine efforts were being made by Ms Yam to develop an eligible business. She made some inquiries about exporting Australian sheepskins, but we consider that further activity would have been necessary to establish “genuine effort”.
d) Exporting hot (sic) sensitive paper
74. Ms Yam said that in 2001 she obtained a request from a Chinese company to locate a particular type of heat sensitive paper which was manufactured in Australia (A1, annex Z(ii)). She made inquiries of an Australian manufacturer of such products and, on 14 November 2002, obtained quotations for supply of the paper. The prices were not competitive and there was no further development of this line of business.
75. This inquiry by Ms Yam seems to have been in response to a “one off” request by a Chinese business contact of Ms Yam. There was no evidence that Ms Yam had taken steps to establish RSS as an agent specialising in locating Australian products required by the Chinese market. Had she done so, and taken steps to gain recognition of its role as an agent, perhaps by advertising or contacting particular business associations, that could have established that she was making a “genuine effort” to develop business links with the international market. However the evidence fell short of that. It was of random requests by business contacts for products which Ms Yam could not locate. We do not find that the activity in regard to heat sensitive paper assists Ms Yam in establishing that she made genuine efforts as required by s 134(2)(a).
e) Manufacturing and importing transformer
76. Ms Yam said she had been approached by an Australian company to find a factory in China to manufacture transformers. She did not explain how the contact came about. She said she contacted many factories In China and brought a sample transformer back to China, but the quality and the price could not be met. The proposal did not develop. We find this is in a similar category to the activities relating to the milk packaging system and the heat sensitive paper.
Findings as to whether Ms Yam had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia
77. We will briefly refer to the factors in s 134(3). As to matter (a), we have covered in considerable detail the evidence as to business proposals. As to matter (b) there was no evidence as to partners or joint ventures for any business proposals, other than for the bridging education program with Deakin University, discussed in paragraphs 63 – 67 above, and for the proposed sale of wool quilts (T docs p 287). That partnership did not eventuate, as the quilts were not produced.
78. We have found that Ms Yam’s efforts in regard to developing a business exporting tallow were genuine, although in the end the activity had to be abandoned as it was not able to be profitable. We also find that there is evidence of “genuine effort” in the relevant period in the negotiations with Deakin University. We have set out the substance of the evidence as to business proposals Ms Yam considered in the relevant period. There were a number of enquiries about possible lines which might have meant that Ms Yam could have exported goods from Australia to China. We find that the only proposal, which Ms Yam developed sufficiently to satisfy the description of “genuine effort”, was that for the manufacture and sale of wool quilts. That proposal floundered when it was discovered that the price would be too high for the quilts to be readily saleable. However prior to that there had been sufficient activity to satisfy us that Ms Yam had made a “genuine effort” to develop that line of business as an activity in which RSS would do business.
79. As to matter (c), apart from research to locate products, and research into the manufacture and marketing of wool quilts and the research Ms Yam undertook to decide to try and export Australian tallow, there was no evidence of research undertaken by Ms Yam into the conduct of eligible businesses in Australia. Ms Yam had clearly undertaken some research to find Ververis as a supplier of tallow. She had also done considerable research and planning into the proposed manufacture and sale of the wool quilts. We find that the difficulty in exporting either tallow or wool quilts at a realistic marketable price may have been foreseen if Ms Yam had undertaken further research before commencing the tallow exports and before having sample quilts made up. However we do not see that finding as preventing the efforts Ms Yam did make, being characterised as genuine efforts.
80. Paragraph 134(3)(d) raises as a relevant issue the period or periods during which Ms Yam has been present in Australia. A computer print out of Arrivals and Departures (R1) shows that, after her visa was granted on the 22 June 1999, Ms Yam first arrived here on 12 July 1999. However, she left again three days later. Ms Yam said she believed she had stayed for seven days rather than just three days. She did not dispute the other dates in the print out. They show the following arrivals and departures between12 July 1999 ad 4 October 2002:
Year / Month / Day Movement Days in Australia 1999 July 12
1999 July 15Arrive
Depart3 [or 7] 2000 June 26
2000 July 07Arrive
Depart11 2001 September 22
2001 October 11Arrive
Depart19 2002 January 31
2002 February 28Arrive
Depart28 2002 July 23
2002 August 06Arrive
Depart14 TOTAL 75 [or 79] 81. Ms Yam recognised that 75 or 79 days in Australia in over three years was not a substantial amount of time. She explained why she had not spent more time here. First, she was engaged in litigation in China, to recover a debt. Secondly her father had been seriously ill, having suffered a severe stroke.
82. Ms Yam said that her involvement in court proceedings in China, to recover money she had advanced, required her to travel frequently from Hong Kong to China. The litigation arose because Ms Yam had mortgaged her home as guarantor of I W Company of which she was both a director and an employee. When a creditor defaulted on payments due, I W Company found itself in financial difficulty. Ms Yam paid the amount due under the guarantee in order to retain her home, but had to sue the defaulting creditor, to recover that money.
83. Thus Ms Yam substantially succeeded in the litigation, but the last court hearing was not until January 2003. The documents (A1, annex U) indicate that there was a mediated agreement and an award in China in February 2002. There was no evidence as to how many days Ms Yam had spent in China during the relevant 3 years and 3 months. Ms Yam said that while she was in China she had spent some time seeking markets for Australian products.
84. Nor was there any evidence as to how frequently Ms Yam had visited her father in China during the relevant period.
85. Ms Yam also said that she was required to be in China when her two shipments of tallow arrived there.
86. Paragraph 134(3)(e) looks to the value of assets that have been transferred to Australia by Ms Yam for use in obtaining an interest in an eligible business. Ms Yam gave evidence that between July 2000 and 4 October 2002, she transferred to Australia AU$265,000 and US$55,294 to fund the operations of RSS. She contends that RSS has sufficient funds to continue to trade and expand in Australia.
87. Paragraph 134(3)(f) draws attention to the value of Ms Yam’s ownership interest in eligible businesses in Australia. We have found that Ms Yam does not have an ownership interest in an eligible business. However s 134(3) states that it does not limit the generality of matters to be taken into account in applying s 134(2). Thus we consider it appropriate to set out the value of Ms Yam’s ownership interest in RSS as at 4 October 2002. Ms Yam holds 350 shares of $1 each issued by RSS. She has also lent to RSS the funds set out in the previous paragraph.
88. We find that Ms Yam’s efforts to develop RSS as an eligible business probably did not put her Chinese and Hong Kong business experience to its best potential use. That perhaps would have required a more business-like approach, or a business plan or direction, or the injection of capital in the sense not simply of transferring funds to the account of RSS in Australia, but also of using those funds to develop business. Further Ms Yam’s exports would have been more likely to succeed if she had spent more time in Australia. However, the Act does not specifically include any requirement that the “genuine effort” must be likely to succeed, or must meet any threshhold level, beyond being genuine. We do not consider that any of the matters in s 134(3) require any particular level or description of the “genuine effort” required to satisfy s 134(2).
89. We have concluded that the “genuine effort” we have found Ms Yam made to develop business activities in regard to the export of tallow and the manufacture and sale of wool quilts made from Australian wool, and in regard to the negotiations with Deakin University, does satisfy the requirements of s134(2)(a) of the Act. We find Ms Yam made a “genuine effort” to develop RSS into “an eligible business”.
Did Ms Yam make a genuine effort to utilise her skills in actively participating at a senior level in the day to day management of RSS?
90. Section 134(2) requires that a visa holder satisfy each of s134(2)(a), (b) and (c). As we have found that Ms Yam did satisfy s 134(2)(a) at the relevant date, we must now consider whether s134(2)(b) is also satisfied.
91. That provision requires that Ms Yam, during the relevant period, made a “genuine effort” to utilise her skills in actively participating at a senior level in the day to day management of “that business”. That term refers back to paragraph 134(2)(a) which refers to “an eligible business in Australia.” In context we accept that the reference to “that business” covers a business Ms Yam was making efforts to develop into “an eligible business in Australia”.
92. On the facts of this matter we find that Ms Yam herself was the only person who did any senior level management of RSS during the relevant time. There is a question as to whether there was sufficient senior management by Ms Yam for it to be characterised as “day to day management”, or whether there was only spasmodic, intermittent management. The other question raised in the parties’ submissions is whether such participation, at a senior level in the day to day management of a business, must be substantially in Australia or can be mainly overseas.
93. As to the first issue, we accept Mr Gilbert’s submission that the requirement of the utilisation of skills in the day to day management of a business, does not require that those skills be used on a daily basis, but simply that there be continuity and regular activity, as explained by the Tribunal in ReLau and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703. In that matter Mr Lau had not spent many days in Australia and his diary recorded entries relating to management activities on only 30 days in the relevant period. The Tribunal set aside the cancellation of the visa. It said:
32. Section 134(1)(b) requires that the visa holder be utilising his or her skills actively, participating at a senior level in a day-to-day management of that business. In using the term that business the legislation directs the decision-maker to consider the nature of the actual business undertaken. The term day-to-day should be given its ordinary meaning. It is defined in the Shorter Oxford Dictionary on Historical Principles as continuous(ly), routine(ly). The Macquarie Dictionary defines it as ordinary, happening everyday.. Consistent with these meanings, it is not a requirement that a visa holder establish a certain number of days that he or she undertakes the activity of business in order to show that he or she is involved in its day-to-day management. The meaning is consistent with the need to show that a business is in existence, namely continuity and regular activity.
33. The day-to-day management of a company like Corcom, involved in developing an export market for Australian grocery goods in South East Asia, will involve researching products, securing orders and suppliers, transacting shipping. It will also involve ideas and planning. This is clearly evidenced by the applicant’s activities in this case. The applicant had substantial commercial experience in Malaysia on which to develop Corcom as an export vehicle for sale of Australian goods into Asia. He developed Australian contacts through the proposed venture with Unipole… . While some of the activities undertaken by the applicant might be viewed as unsophisticated, there is nothing to suggest that they were inappropriate for the nature of the proposed business. The activities relied on the applicant’s considerable business experience directly in this field in the Asian market and on his business acumen. There may not be extensive notes, or records of activity occurring every day. As Ms McKenzie submitted, the diary notes showed only entries 30 days (sic). However, the use of the term day-to-day management does not require that that activity be recorded every day, and the input at a senior level by someone of the experience of the applicant will often be intangible.”
94. Member Allen, in Re Jo and Minister for Immigration and Multicultural Affairs [2004] AATA 77, said at paragraph 35:
It must also be remembered that modern means of travel and communication permit a business to be managed and strategically directed from almost anywhere in the world. The emphasis in s 134(1)(b) is on senior management rather than on what might be called day-to-day administrative tasks under direction from a senior manager. I agree with the comments of Member Carstairs in Re Lau & Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703 that management input at a senior level by an experienced business person will often be intangible, and may involve ideas and planning, as much as researching products, securing orders and suppliers and transacting shipping. As Hill and Carr JJ observed in Puzey [(2003) 201 ALR 302] in a slightly different context at [47] “business does not mean being busy.”
95. We agree with those comments. A business may be successfully run without necessarily requiring daily management. What is required is that there be sufficient management for the needs of that specific business.
96. It is difficult to know what level of day to day management is required by s134(2)(b). The amount of paper work received in evidence, relating to the period before 4 October 2002, does establish that Ms Yam was making a “genuine effort” to utilise her skills in actively participating at a senior level in the management of RSS. We can make no finding as to the frequency of those efforts, save to find that they were not daily and may not have even been weekly, although at some times there would have been efforts made by Ms Yam more frequently than daily. We have concluded that the term “day to day management of that business” does not require that the business be managed on a daily basis.
97. As to the second issue in regard to s134(2)(b), Mr Brereton relied on Re Suryaty.. Deputy President Wright said at paragraphs 10 & 11:
The question whether or not an individual is participating in the day to day management of a business in Australia involves two issues:
….
(2) The relevant business must be carried on “in Australia”. See Huang [and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656] at paragraph 12 and Ong at paragraph 29-33 where Senior Member M D Allen said:
…(T)he Act does not contemplate an absentee entrepreneur directing operations from afar. Direct “hands on” involvement within the Commonwealth of Australia is essential. A business visa carries with it the right of permanent residency in Australia during its existence and, by joining family members as secondary applicants, they too can obtain this privilege. It would be strange indeed if an overseas entrepreneur could secure these advantages by departing from Australia and directing business operations from abroad within a day or two of his first arrival and never setting foot in this country again.”
98. In answer, Mr Gilbert referred to an attachment to the Notice of Intention to Cancel your Visa sent to Ms Yam on 12 June 2002. It sets out a list of documents that may support an applicant’s claim (T11 p184). The last bullet point relating to day to day management reads as follows:
If you have spent the majority of your time outside Australia, evidence of how you have been managing the business from overseas, eg e-mails, facsimiles, itemised phone bills, minutes of meetings held, statements from overseas business associates (including suppliers, buyers and partners), statements from onshore advisers.
99. Mr Gilbert submitted, with some justification, that the attachment to the Notice of Intention to Cancel shows that the way the scheme is administered, it is not necessarily the case that a person must spend the majority of their time participating in the day to day management of their business in Australia. Although, as set out above, the Instruction does suggest that physical presence in Australia for more than six months since first arrival as a business class migrant would be sufficient time for factor 134(3)(d) to assist an applicant in retaining a visa, that is not a statutory requirement but merely an indication which may be helpful in applying s 134(2)(b). There may be an argument for amending the legislation to give some time requirement of presence in Australia, at least as a general expectation, but at present that is not the law.
100. As we have said earlier, Ms Yam was in Australia for only 75 or 79 days in the period before the cancellation of her visa. We find that while she was here she did actively participate at a senior level in the management of RSS. While she was in Hong Kong and China she also participated at a senior level in the management of RSS by seeking customers to purchase products such as tallow or wool quilts. She also sought clients who would give her orders to locate equipment which she could then try to source in Australia.
101. We do not agree with the view of the Tribunal in Re Huang that the Act, at present, requires that the senior level day to day management of an eligible business, or a business a person is seeking to develop into an eligible business, must take place in Australia. There could be some expectation that a visa holder who is attempting to develop a business into an eligible business should ensure that the business be an ongoing concern which would require day to day management at a senior level in Australia. However that concern is not reflected in the Act.
102. In Re Widjaja and Minister for Immigration and Multicultural Affairs [2003] AATA 380, Mr McLean said at paragraph 40:
The respondent also referred the Tribunal to the following decisions in support of their contention that the applicant has not participated at a senior level in the day‑to‑day management of Crown Records because he spent a total of only 48 days in Australia from the time of his arrival in July 1998 and the date of his business skills visa cancellation on 2 November 2001:
Re Huang and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 656
Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
In the case of Huang, the Tribunal said:
… 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.
In the case of Ong, the Tribunal said:
…I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas.
The Tribunal however concurs with the applicant’s submission that the Act does not support the view that "…it is the business activities of the Applicant in Australia that must be examined, not his business activities whilst he is residing overseas", in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act. The Act prescribes that the applicant shall utilise his or her skills in actively participating at a senior level in the day‑to‑day management of the business and this statutory requirement does not restrict the Tribunal from also examining the activities of the applicant whilst residing overseas in order to satisfy ss.134(1)(b) and ss.134(2)(b) of the Act.
103. In Re Jo, Member Allen, adopted the approach in Re Widjaja. He said at paragraph 33:
… However, I do not believe that it can be said that the Act demonstrates a requirement that the visa holder become ordinarily resident in Australia immediately in the sense that he or she spends the majority of his or her time in this country, only taking trips overseas from time-to-time. A number of factors have influenced that conclusion. In the first place, there is nothing in the documentation provided to me concerning the application made by the applicant for his visa (S1 – S4) that indicates that the Australian government had any requirement that overseas businesses be disposed of or the applicant’s involvement in them scaled down. Specifically, the 24 months survey form that is used by the government to obtain information from visa holders asks the question (in section 7): “are you still actively involved in a business outside Australia?” and contains the statement: “note that there is no expectation or requirement that you discontinue any business outside Australia”.. Secondly, the MSI at clause 4.5.1, when dealing with the issue of what constitutes “genuine efforts” in relation to the establishment of a business and involvement in its management, refers to whether or not the visa holder has been physically present in Australia for more than 6 months since first arrival. Bearing in mind that a cancellation decision will often be made between 3 and 3 ½ years after the first arrival, an expectation that the visa holder may have spent only 6 months in Australia suggests that, so far as the respondent is concerned, the visa holder is not expected to spend the majority of his or her time in this country - and may indeed spend as little as 15% of the total time between first arrival and cancellation. Finally, I note that s 134(1)(a) specifically refers to an interest in an eligible business in Australia but s 134(1)(b) does not specifically require the active participation in the management of that business to occur in Australia. It would have been very easy for Parliament to have specified in s 134(1)(b) that the management activities must occur in Australia if that had been the intention.
104. We accept Ms Yam’s evidence that she was required to be in China to visit her sick father and to participate in recovery action in respect of the funds she had guaranteed on behalf of I W Company. But there was no evidence as to precisely how many days Ms Yam had devoted to either of those responsibilities. We were still left without a real understanding as to the extent to which those tasks had restricted the time Ms Yam could devote to management of RSS, or to her travel to Australia.
105. The evidence as to participation at a senior level in the day to day management of RSS is not strong. We have not found it easy to decide whether it is sufficicent to satisfy s 134(2)(b) of the Act. Our concern has been as to whether there was sufficient input to describe it as “day to day management” of RSS. On balance we have decided that the participation by Ms Yam in the management of RSS was just sufficient to show that she participated at a senior level in the “day to day management” of RSS. We find that s 134(2)(b) is satisfied. That means we must also consider s 134(2)(c).
Did Ms Yam intend to continue to make such genuine efforts?
106. Section 134(2)(c) requires that the visa holder “intends to continue to make such genuine efforts”. It applies to the “genuine efforts” in paras (a) and (b) of s134(2).
107. Mr Gilbert submitted in paragraph 27 of the Applicant’s Statement of Facts and Contentions that Ms Yam intended to continue to make efforts as required by section 134(2)(c) of the Act, and that her conduct subsequent to the visa cancellation could be relied on as evidence of the genuine nature of her efforts her intentions. We accept that her conduct after the cancellation does show an intention to continue to make efforts to develop RSS into an eligible business.
108. Mr Gilbert relied on the considerable funds invested in RSS since its incorporation and the large amount of money Ms Yam invested in her own name in Australia (see para 87 above) as evidence of her commitment to business in Australia. We do not find those matters to be persuasive in that there is nothing to stop Ms Yam, at any time, withdrawing the funds invested in RSS and the large amount of cash reserves.
109. The Tribunal finds that Ms Yam has made a genuine effort to satisfy s 134(2)(a) and (b) of the Act and that she intends to continue to make such “genuine efforts”. Thus, we find that the Minister must not cancel Ms Yam’s Business Visa under s 134(1) of the Act.
110. Section 134(6) of the Act provides that the Minister is taken not to have cancelled a person’s Business Visa under s 134(4) if this Tribunal has set aside the decision of the respondent to cancel the Business Visa under s 134(1) of the Act. Thus, the visas of Ms Yam’s husband, Mr Sun, and of her daughter, Ms Sun are also not cancelled.
111. The Tribunal will set aside the decision under review and in substitution will decide that the visas of Ms Hou Lam Yam, Mr Yu Hui Sun and Ms Sun are not cancelled.
I certify that the 111 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: Josephine McKay
AssociateDate/s of Hearing 11, 12, 15 & 22 August 2003
Date of Decision 17 March 2004
Counsel for the Applicant Mr G Gilbert
Solicitor for the Respondent Mr M Brereton
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