Roeloffze and Minister for Immigration and Citizenship
[2008] AATA 345
•28 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 345
ADMINISTRATIVE APPEALS TRIBUNAL ) No. T 200700007
No. T 200700008
GENERAL ADMINISTRATIVE DIVISION ) No T 200700009
No T 200700010Re MARK CARL ROELOFFZE
(T 20070007)and
ROBYN ROELOFFZE
(T 20070008)and
GARTH ROELOFFZE
(T 20070009)and
LYNDA ELIZABETH ROELOFFZE
(T 200700010)Applicants
And
MINISTER FOR IMMIGRATION AND CITIZENSHIP
Respondent
DECISION
Tribunal The Hon R J Groom (Deputy President)
Dr R J Walters (Part-Time Member)
Date28 April 2008
PlaceHobart
Decision (1) The Tribunal affirms the decision to cancel the business visa of Mark Carl Roeloffze
(2) In accordance with section 134(4) of the Act the Tribunal also affirms the decision to cancel the business visas of Garth Roeloffze and Lynda Elizabeth Roeloffze
(3) Pursuant to section 134(5) of the Act the business visa of Robyn Roeloffze is not cancelled as the cancellation of the visa would result in extreme hardship to her
...............................
Deputy President
……………………….
Part-time Member
CATCHWORDS:
IMMIGRATION - business skills visas - cancellation of primary and secondary visas - whether applicant has obtained a substantial owner interest in eligible business - whether has utilised skills in day to day management of business - genuine efforts - residual discretion - whether cancellation would result in extreme hardship - meaning of extreme hardship
Migration Act 1958, s.134(1),(2),(3),(4),(5),(10)
Ong & Minister for Immigration and Multicultural Affairs [2003] AATA 178
Wong & Minister for Immigration and Multicultural Affairs [2002] AATA 54
Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31
Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Wang & Minister for Immigration and Multicultural Affairs [2000] AATA 961
REASONS FOR DECISION
24 April 2008The Hon R J Groom (Deputy President) Dr R J Walters (Member)
1. The applicants, all citizens of South Africa, seek a review of a decision made on 14 December 2006 by a delegate of the respondent to cancel the business skills visas held by them.
2. The primary business skills visa was held by Mr Mark Roeloffze ("Mr Roeloffze"). It was cancelled because the delegate was not satisfied that the requirements of s.134 of the Migration Act 1958 ("the Act") had been met.
3. Ms Robyn Roeloffze, Mr Garth Roeloffze and Mrs Lynda Elizabeth Roeloffze are respectively the daughter, son and wife of Mr Roeloffze. As they held visas only because Mr Roeloffze held a visa their visas were also cancelled under section 134(4) of the Act.
4. Although the second, third and fourth named applicants each applied separately for a review of the decision to cancel their visas only Ms Robyn Roeloffze continues to pursue her separate application for review under section 134(5) of the Act.
5. The applications of Mr Garth Roeloffze and Mrs Lynda Elizabeth Roeloffze are therefore now entirely dependent on the outcome of Mr Roeloffze's application. Should Ms Robyn Roeloffze satisfy the Tribunal that the cancellation of her visa would result in "extreme hardship" to her then, pursuant to section 134(5) of the Act, her visa would not be cancelled even if the primary visa held by Mr Roeloffze is cancelled.
6. Should Mr Roeloffze be successful in his application, and the decision to cancel his visa is set aside, then all of the applicants would then be permitted to retain their visas.
7. The hearing of the applications was held in Hobart on 28 February 2008. Mr E Alexander appeared for the applicants and Mr W Mosley for the respondent. Mr Mark Roeloffze, Ms Robyn Roeloffze and Mr John Hilary Daly gave oral evidence. The 'T' Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were received into evidence. A number of additional documents were tendered in evidence and marked as exhibits.
Background Facts:
8. The Tribunal finds the following background facts:
(a)Mr Roeloffze has had a successful business career in the textile industry in South Africa.
(b)In 2002, after being hijacked at gunpoint in Cape Town, South Africa, he decided he would seek to settle in Australia and pursue a business career in this country. Mr Roeloffze engaged a migration agent, Graham Mander and Associates, to assist him in migrating to Australia. An application for a business skills visa was then lodged with the Australian authorities. A visa was granted on the 28 April 2003. It was a sub-class 129 visa. The other three applicants also received visas as members of Mr Roeloffze's "family unit".
(c)In the business skills declaration form signed by Mr Roeloffze on 26 November 2002 (T18) he declared that if granted a business skills visa he would "... make genuine efforts to actively participate, as owner or part-owner, in the day-to-day management at a senior level of a new or existing business in Australia". He also acknowledged in that declaration that the Minister could cancel his visa and the visas of members of his family unit within three years of his initial entry into Australia if he had not "... made genuine efforts to obtain a substantial ownership interest in a business in Australia" and actively participated "... at a senior level in the day-to-day management of that business". Mr Roeloffze entered Australia on his business skills visa on 5 October 2003.
(d)Mr Roeloffze first met Mr John Hilary Daly ("Mr Daly") in South Africa in 1978 or 1979. For a period he was a supplier to Mr Daly's business in that country. In due course Mr Roeloffze became Mr Daly's friend, confidant and business advisor.
(e)Mr Daly had also decided to settle in Australia. He migrated to this country in 2003. In June 2003 Mr Daly tendered for the lease of business premises in Hunter Street, Hobart, Tasmania. His tender was successful. After some delay he proceeded to establish a coffee shop and restaurant business at those premises. Mr Daly experienced difficulties establishing his new business which he named "The Timeless Way". In September 2003 he began discussing with Mr Roeloffze the latter's possible involvement in the business. After these initial discussions Mr Roeloffze informed Mr Daly that he wished to purchase shares in the business and would also provide a loan to assist in its establishment. It is this business interest which Mr Roeloffze now relies upon to satisfy his visa requirements and to show that he had obtained a substantial ownership interest in a business in Australia and has actively participated in day-to-day management of the business.
(f)Although "The Timeless Way" is a relatively small coffee shop and restaurant business Mr Daly decided, after receiving legal advice, to create a discretionary trust, "The Carina Trust", to operate the business. The sole trustee of the discretionary trust is a company called "Cepheus Pty Ltd". The only beneficiary of the Carina Trust is Mr Daly. He is also the appointor under the trust deed. The appointor has power to terminate the appointment of the trustee "at any time". Mr Roeloffze has no beneficial interest in the trust but has purchased shares in the trustee company Cepheus Pty Ltd and has made two loans to that company.
(g)On 25 March 2004 Mr Roeloffze purchased twenty "B" class shares in Cepheus Pty Ltd at $1.00 per share. The remaining 80 "B" class shares and the one ordinary share are held by Mr Daly. On that same date Mr Roeloffze agreed in writing to provide a "Director's Loan" of $40,000.00 to Cepheus Pty Ltd. At the same time Mr Roeloffze granted to Mr Daly an option to repurchase the 20"B" class shares by giving notice in writing on or before 25 March 2007. Cepheus Pty Ltd also agreed to repay the loan of $40,000.00 to Mr Roeloffze when the shares were repurchased or by 25 March 2007 "... whichever event or date occurs first". (T28)
(h)By a written agreement dated 28 March 2007 the terms of the option to repurchase and of the loan were varied to provide that the option to repurchase the shares could be exercised by Mr Daly giving three months notice in writing. On that date it was also agreed that Mr Roeloffze could seek repayment of the loan of $40,000.00 by giving three months notice in writing. A second loan of $40,000.00 (making a total loan of $80,000.00) was provided by Mr Roeloffze to Cepheus Pty Ltd on 30 August 2006. This amount was repayable "upon demand but not before 25 March 2007".
(i)Prior to 28 March 2007 the holder of "B" class shares had no right to any dividend and no right to participate in the repayment of capital upon the winding up of the company. At a director's meeting held on 28 March 2007 it was resolved that holders of "B" class shares had "full voting and dividend rights".
(j)Mr Roeloffze purchased his shares in Cepheus Pty Ltd on 25 March 2004. It was intended that he would become a director from that date, however his directorship was not registered with the Australian Securities and Investment Commission until September 2006. This delay resulted from an oversight by Mr Daly's accountant.
(k)In July 2004 Mr Roeloffze and his family purchased a flat in Manly in New South Wales for approximately $880,000.00. The property is presently occupied by Ms Robyn Roeloffze and her husband. Mr Roeloffze stays there when he is in Sydney. He also maintains a substantial cash deposit of as much as $450,000.00 in a bank in Australia.
(l)Mr Roeloffze's intended move to Australia was delayed because he experienced great difficulty in finding a buyer for his business in South Africa. The size and value of his textile business has been significantly reduced by free trade agreements between South Africa and some other countries.
(m)Mr Roeloffze remains a citizen and resident of South Africa. In the period between 5 October 2003 and the cancellation of his visa in 2006 he has been present in Australia for some 84 days.
(n)Mr Daly now resides in Hobart and works full-time in the business. It is he who is responsible for key management decisions including the rostering of staff, paying wages, ordering, hiring and firing of staff and the accounts. Mr Daly has sought and received advice from Mr Roeloffze on the management of the business.
(o)The Tribunal has before it a relatively small number of written records indicating an involvement by Mr Roeloffze in the management of the business. These records include some "system financial reports" with some handwritten comments on them. The comments were made by Mr Roeloffze and faxed back to Mr Daly at his business. There were also eleven or so fortnightly "management reports" which were prepared by Mr Daly and forwarded by fax to Mr Roeloffze in South Africa. The first of these "management reports" was dated 5 November 2006 and the last was dated 25 March 2007. There were also handwritten comments on the management reports which again were faxed back by Mr Roeloffze to Mr Daly.
(p)The then Department of Immigration and Multicultural and Indigenous Affairs regularly monitored the involvement of business visa holders in business activities in Australia. As part of the monitoring process Mr Roeloffze was asked to complete a twenty four month survey form. (T49). The form was completed and forwarded to the department on 26 October 2006. By letter dated 6 June 2006 Mr Roeloffze was advised that the department, on the basis of the material provided, was not satisfied that he was fulfilling his visa requirements. Mr Roeloffze was invited to provide further information.
(q)By letter dated 9 August 2006 a delegate of the Minister gave notice to Mr Roeloffze and each of the other applicants of an intention to cancel their visas. Further information and documents were provided to the delegate by the solicitor for the applicants. On 14 December 2006 the delegate decided to cancel the visa of each applicant.
(r)In January 2007 each applicant lodged an application to this Tribunal seeking a review of the cancellation decision of 14 December 2006.
The Issues:
9. The issues to be determined by the Tribunal are:
(a)Has Mr Roeloffze obtained a substantial ownership interest in an eligible business in Australia?
(b)Was Mr Roeloffze utilising his skills in actively participating at a senior level in the day-to-day management of that business?
(c)Does Mr Roeloffze intend to continue to hold that ownership interest and to continue to so utilise his skills?
(d)Has Mr Roeloffze made genuine efforts to obtain such an ownership interest and to so utilise his skills and intends to continue to make such genuine efforts?
(e)If the Tribunal concludes that Mr Roeloffze does not satisfy the questions in issues (a) to (d) is there nevertheless a proper basis for exercising in his favour the residual discretion in section 134 of the Act?
(f)If the decision to cancel Mr Roeloffze's visa is affirmed would the cancellation of Robyn Roeloffze's visa result in extreme hardship for her?
Legislation:
10. Sections 134 of the Act relevantly provides as follows:
"134 Cancellation of business visas
(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a) has not obtained a substantial ownership interest in an eligible business in Australia; or
(b) is not utilising his or her skills in actively participating at a senior level in the day‑to‑day management of that business; or
(c) does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii) utilise his or her skills in actively participating at a senior level in the day‑to‑day management of;
an eligible business in Australia.
(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day‑to‑day management of that business; and
(c) intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c) research that the person has undertaken into the conduct of an eligible business in Australia;
(d) the period or periods during which the person has been present in Australia;
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
(h) whether the person has failed to comply with a notice under section 137;
(i) if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day‑to‑day management of a business:
(i) the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii) the reasons why the person no longer holds the interest or participates in the management (as the case requires).
(3A) Subject to section 135, the Minister may cancel an investment‑linked visa (other than a family member’s visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(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".
The following relevant definitions are set out in section 134(10 ) of the Act:
"Eligible business means a business 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".
"Ownership interest, in relation to a business, means an interest in the business as:
(a)a shareholder in a company that carries on the business; or
(b)a partner in a partnership that carries on the business; or
(c)the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts".
11. In considering these applications the Tribunal has had regard not only to the legislation but also to the policy guidance provided in The Migration Series Instruction 133: "Visa Cancellation under Sub Division G - Cancellation of Business Visas" ("MSI") which on and from 15 March 2007 was included in the "Procedures Advice Manual 3" ("PAM 3").
12. The Tribunal will now consider each of the issues set out in paragraph 9 above.
Has Mr Roeloffze Obtained a Substantial Ownership Interest in an Eligible Business in Australia?
13. The only business in Australia in which Mr Roeloffze claims to have obtained a substantial ownership interest is the coffee shop and restaurant business known as "The Timeless Way" situated in Hunter Street Hobart.
14. Mr Mosley for the respondent quite properly conceded that the question as to whether "The Timeless Way" was an "eligible business" within the meaning of that term in section 134(10) of the Act was not in issue in this application. On the basis of that concession and the fact that the business creates employment in Australia the Tribunal finds that "The Timeless Way" is an "eligible business".
15. Whether or not an individual has obtained a "substantial ownership interest" in a business is a question of fact and degree to be determined in the particular circumstances of each case. (See Ong and Minister for Immigration and Multicultural Affairs [2000] AATA 178).
16. In cases of cancellation of a visa the Tribunal must consider whether the decision to cancel was the correct or preferable decision at the time of the cancellation decision. It is, however, open to the Tribunal to examine events that occurred after the date of cancellation to see whether they throw any light upon the circumstances existing as at the time of the cancellation decision. (See Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54).
17. In his witness statement of 30 May 2007, which he affirmed as true and correct when giving his oral evidence, Mr Roeloffze said, in part, as follows:
"9. I recall during the course of discussions that he had decided to lease premises in a new tourist redevelopment in Hunter Street, Hobart, the location of the first settlement of Hobart, and operate a coffee shop from there. He told me there had been discussions in the Hobart City Council about a historic tram which was to run around Sullivans Cove, with the eastern starting place to be outside the coffee shop in Hunter Street. We talked on a regular basis about the proposed business, setting it up, marketing, staffing and management. There were serious delays in the finishing of the redevelopment, and John told me that he was starting to experience cash flow problems and needed working capital for the business. I told him I was interested in buying in to the business and making a loan.
10. I made my investment in The Timeless Way on 25 March 2004. I purchased 20 B class shares out of the 100 which had been allocated to John. That gave me a 20% proprietary interest in the company. I do not know why the shares were called B class shares because the shares which John holds are also called B class shares. The Constitution of the company gives power to the directors to A director's minute has confirmed that the B class shares have full voting and dividend rights. I was also appointed as a Director of the company. John is also a Director and the Company Secretary.
11. I agreed that I would make a Director's loan to the business of $40,000.00 to assist with capital purchases and cash flow requirements. The majority interest was always going to be held by John because we both agreed that he had started the business and it was going to be his in the long term and that eventually I would find another business to set up or buy into. For that reason we executed an option agreement that John could re-purchase my shares by 25 March 2007 and my loan would be re-paid.
12. That loan of $40,000.00 proved to be inadequate for the needs of the business, and I made a further loan of $40,000.00 on 30 August 2006.
13. The deadline of 25 March 2007 came and went, and we agreed that the arrangements would be extended, but with a 3 month notice period. This would allow the agreement to remain ongoing and subject to the usual business considerations of an amicable and productive partnership".
18. The contentions advanced on Mr Roeloffze's behalf are set out in the applicant's Statement of Facts and Contentions and in the submissions made by Mr Alexander at the hearing. In essence Mr Roeloffze contends that he has indeed obtained a substantial ownership interest in the business in question. It is submitted on his behalf that the business had a turnover last financial year of over $650,000.00 and that his shareholding is 20% of the company which he claims is a substantial interest. It is also contended that the total loan of $80,000.00 is a substantial sum and is equity in the business. Mr Roeloffze said he was not surprised the loan was recorded as equity: "Equity is what I wanted" (Transcript page 13). Mr Daly's investment in the business is approximately $280,000.00 which is in the form of a member's loan. Mr Roeloffze relied heavily on the advice of his then Immigration Agent Mr Mander who advised him that there were no problems with his visa requirements. He was told by Mr Mander: "No problems, carry on ... everything is in order. Everything is fine". (Transcript page 12).
19. Cepheus Pty Ltd was merely a trustee of the Carina Trust which operates the business. It is noted, however, that the Act recognises interests held indirectly through interposed companies and trusts (see definition of "ownership interest" in section 134(10) of the Act). The decision to cancel Mr Roeloffze's visa was made on 14 December 2006. Prior to 28 March 2007 the holder of 'B' class shares had no right to any dividend and no right to participate in the repayment of capital on the winding up of the company. As at the date of the decision to cancel Mr Roeloffze's visa his 20 'B' class shares could be repurchased by Mr Daly on demand by giving the appropriate written notice. If and when the shares were repurchased the loan of $40,000.00 was also repayable to Mr Roeloffze. In other words prior to the visa cancellation decision Mr Daly could terminate at any time of his choosing Mr Roeloffze's interest in the business. The Tribunal concludes on the evidence that Mr Roeloffze's involvement in "The Timeless Way" was intended to be a temporary arrangement to facilitate the satisfaction of his visa requirements and that he intended in due course to look for a more substantial business interest in Australia. (See paragraph 11 of Mr Roeloffze's witness statement).
Mr Roeloffze was very frank about his intentions in the evidence he gave. He said: "... and this was an option for me to get a visa. This is why I checked it, and I come (sic) in with him ...". (Transcript page 40).
20. The MSI provides guidance to decision-makers in interpreting terms not defined in the legislation. It gives some guidance on the meaning of "substantial ownership interest". Amounts of money and percentages of value are suggested. It is made clear however that these are not strict rules but are indicative only. What is "substantial" must depend upon the particular facts and circumstances of the case under consideration.
21. After reading all of the written material and hearing the evidence of Mr Roeloffze and Mr Daly it appears to the Tribunal that there is present only a veneer of ownership. To have, as at the date of cancellation, no rights to dividends and no right to participate in the division of any surplus assets or profits on winding up, with Mr Daly retaining a right to repurchase the shares at any time, is to suggest something less than a substantial ownership interest. Although the two loans provided by Mr Roeloffze to Cepheus Pty Ltd appear in certain accounts as "equity", and despite the fact that no interest is payable on the amounts lent, the Tribunal is satisfied that the two loans to the business were repayable loans and not equity. They did not contribute to any ownership interest in the business.
22. Various steps were taken after the notice was given by the Delegate of the Minister to cancel the visas. These include the further loan of $40,000.00; notifying the Australian Securities and Investment Commission of Mr Roeloffze's appointment as a Director; and giving the holders of 'B' class shares full voting and dividend rights. These steps appear to the Tribunal to have been a belated attempt, again for visa purposes, to strengthen the perception of ownership rather than to secure for Mr Roeloffze a genuine substantial ownership interest in the business.
23. Nothing that has occurred since the cancellation influences the Tribunal to conclude that at the relevant time Mr Roeloffze had obtained a substantial ownership interest in the business.
24. After considering all of the evidence the Tribunal finds that Mr Roeloffze did not obtain a substantial ownership interest in the business trading as "The Timeless Way".
Was Mr Roeloffze Utilising his Skills in Actively Participating at a Senior Level in the Day-to-Day Management of that Business?
25. Mr Daly lives in Hobart and works full-time in the business. Mr Roeloffze continues to reside in South Africa and carries on business in that country. As has been said Mr Roeloffze came to Australia for 84 days between 5 October 2003 and 14 December 2006. It is unclear on the evidence exactly how long he has spent in Hobart or in actually attending at the business during that 84 day period. As he has a residence in Sydney and family members living there it is reasonable to conclude that only portion of the 84 day period was spent in Hobart.
26. Mr Roeloffze contends that he satisfies the management requirements set out in section 134(1)(b) of the Act. He points out that he has discussed with Mr Daly on numerous occasions many important issues concerning the business. It is claimed that there has been regular communication between the two by both telephone and fax. As was mentioned in paragraph 8(o) the evidence before the Tribunal includes some written records of Mr Roeloffze's involvement in the business including "system financial reports" which had been forwarded to Mr Roeloffze by fax and 11 or so "fortnightly management reports", again sent to Mr Roeloffze by fax. As has already been noted by the Tribunal the first management report concerning the business was forwarded to Mr Roeloffze on 5 November 2006. This was after the notice dated 9 August 2006 to Mr Roeloffze advising him of an intention to cancel his visa and it was some 2 years and 8 months after Mr Roeloffze purchased his shares in Cepheus Pty Ltd.
27. The following exchange took place between Mr Mosley for the respondent and Mr Daly. Mr Mosley is asking the questions and Mr Daly responding:
"All right. Now, in terms of the business itself, you were responsible for the day-to-day management of the business?‑‑‑Absolutely.
So as the applicant, I think, conceded when I put to him, you were responsible for rostering staff?‑‑‑Yes.
And the wages?‑‑‑Yes.
And the ordering?‑‑‑Yes.
And the hiring and firing?‑‑‑Yes.
And the accounts?‑‑‑Yes." (Transcript page 58)
28. Mr Roeloffze said in evidence of Mr Daly's role in the business: "He runs the business". (Transcript page 38).
29. In his witness statement of 30 May 2007, Mr Roeloffze stated, in part, as follows:
"14. I have had a management input into The Timeless Way whish is acknowledged by John and another consultant, Peter Askey-Doran, by letter in July 2006. My expertise is in marketing and John admits that he would not have been able to achieve the success with this business if it was not for my initial, and ongoing, input.
15. John and I have known each other for about 30 years, and have had a close business relationship since 1996, and so we have a long history of verbal communication. We know how each other thinks so it is second nature to simply pick up the telephone and talk to each other. We had maintained this effective line of communication, and it was only when my legal advisor advised that we should have more documentation about my management input that we made an effort to ensure that there was also documented evidence of our contact.
16. My ongoing management input is assisted by emails and faxes which generally John prepares, dealing with financial, staff, product and other reports on the business. I then telephone John to discuss those reports, and I also fax comments to him. This is my input into the daily management of the business. Generally, we discuss broader management issues on a fortnightly basis, we in fact spent a great deal of time on the telephone talking about the day to day detail. Some of these conversations are also of a social nature, but they represent continuing and active involvement in the business. We speak sometime three times a week.
17. The business is a coffee shop and restaurant, so it is essentially a small business, albeit with many staff involved. The major issue which we discuss is generally staffing because it has been very difficult to obtain and keep qualified staff. We also discuss strategic matters such as positioning the business as a leader in its market, especially considering its location. The business is now very profitable and successful and I am of the view that if I had not been involved and made the loans to the company, then the business would probably have ceased by now. As a director, and my investment in the company, I need to keep myself fully informed and be involved in the daily management of that business. There is no provision in my loans for interest payments, because the reward which I receive is a share of the profits.
18. John and I have discussed a long term future for the business through franchising. The concept we have developed of The Timeless Way is something that we have found to be unique to Australia and it may be a concept which could be capable of franchising. These discussions started to take place at the beginning of 2004. Such a decision cannot be taken lightly and involves considerable preparation. Specifically we simply had to make the current business work before we could sell the concept and success as a franchise proposition".
30. When giving oral evidence Mr Roeloffze explained his method of communicating with Mr Daly on management issues as follows:
"We've always had the relationship. We talk openly, we walk on total trust. There's never been, from the early days with the large amounts of money, there's never been letters, and minutes, and stuff like that. We did it on a handshake. He always owed me large - large amounts of money; telephone calls - this is how we communicate. It's always off the cuff. He would phone me; I would phone him. And on an ongoing process still today. There was never - he's always been very busy and I've always been very busy, and there was never time to sit and write letters and communicate on those basis, it was purely by speaking - picking up the telephone and phoning each other". (Transcript page 10 and 11)
31. In his evidence Mr Daly explained Mr Roeloffze's involvement in the business in the following terms:
"... Mark was just an amazing sounding board. He has had incredible wealth of experience in the business field. He has employed a large number of people in as many years and he has operated numerous different companies of which many of them I've been associated with on a client basis. And, you know, coming to Australia and setting up a business without any infrastructure, I used Mark as a constant and regular sounding board for ideas, problems, advice, input, even just for trying to keep my chin up". (Transcript page 61)
and further:
"... it wasn't purely approaching him and saying, "Mark, listen, I've got a problem, we're not making any money, what do you suggest we do?" you know, because with him sitting in South Africa it would be very difficult for him to try and address a problem of that nature. But he was there as a confidante; he was there as an adviser, and he was there as a friend, and whether it was a problem that I had with somebody not coming to work, and the frustrations of cooks not arriving for work, you know, Mark was there as a sounding board and a friend to basically give me advice and keep spirits up". (Transcript page 61)
32. There is no persuasive evidence in the material before the Tribunal suggesting genuine active involvement by Mr Roeloffze in the day-to-day management of the business. Mr Roeloffze's principal place of residence and of business is in South Africa. "The Timeless Way" is obviously managed on a day-to-day basis by Mr Daly who devotes all of his working hours to operating the business. Both Mr Roeloffze and Mr Daly agree that it is in fact Mr Daly who runs the business.
33. The Tribunal concludes that Mr Roeloffze's role has been as an advisor and confidant to Mr Daly rather than a participant in day-to-day management. He has given advice and expressed views from a distance. It has mainly been by telephone and sometimes by fax. Mr Roeloffze has really acted in a consulting role rather than participating himself in the management of the business.
34. In the Tribunal's view the Act does not require a constant presence in Australia managing the business concerned. If that was intended then the legislature could easily have made that interpretation plain in its language. Long periods of absence from Australia however can be taken into account when deciding whether or not section 134(1)(b) has been satisfied. With modern means of communication a business person can be actively involved in senior management of a business at a significant distance including whilst overseas.
35. The Act, of course, does not require the person to be the sole manager of the business but to actively participate (the Tribunal's emphasis) at a senior level in its management.
36. The Tribunal concludes that Mr Roeloffze's involvement in the business falls well short of what is required by section 134(1)(b) of the Act and was really only a token effort aimed at satisfying his visa requirements.
37. After considering all of the material before it the Tribunal finds that Mr Roeloffze was not utilising his skills in actively participating at a senior level in the day-to-day management of the business.
Does Mr Roeloffze Intend to Continue to hold that Ownership Interest and to Continue to so Utilise his Skills?
38. As the Tribunal has already determined that Mr Roeloffze did not obtain a substantial ownership interest in an eligible business and was not utilising his skills in actively participating in a senior level in the day-to-day management of the business. it is not necessary for the Tribunal to further consider this issue.
Has Mr Roeloffze made a Genuine Effort to Obtain such an Ownership Interest and to so Utilise his Skills and Intends to Continue to make such Genuine Efforts?
39. Although Mr Roeloffze has not satisfied the Tribunal that he has a substantial ownership interest in an eligible business or was actively participating at a senior level in the day-to-day management of the business, his visa cannot be cancelled if the Tribunal is satisfied that he has made a genuine effort to do so.
40. A number of matters are set out in section 134(3) of the Act which may be taken into account in determining whether a person has made a genuine effort. The list is not intended to be exhaustive. All of those matters have been fully considered.
41. This is not a case where a person has been actively and genuinely pursuing a business interest in Australia but has not succeeded despite the efforts made. In this case Mr Roeloffze has, in his mind, completed arrangements to purchase an interest in a particular business. He has indicated that he intends eventually to purchase an interest in some other business business in Australia but there is no persuasive evidence of any significant progress in pursuing that goal.
42. The Tribunal is not persuaded that Mr Roeloffze has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia. The interest that he has in "The Timeless Way" falls short of that test. There is no persuasive evidence of an intention on his part to make his ownership interest in "The Timeless Way" substantial or to progress in a reasonable period of time the purchase of a qualifying interest in another Australian business.
43. Mr Roeloffze has not been involved in management of "The Timeless Way" as required by the Act and the Tribunal is not satisfied that he is making genuine efforts to be really involved in management of "The Timeless Way" or some other business in Australia.
44. The Tribunal repeats its conclusion that in this matter there has been little more than a veneer of ownership and no real involvement in management of the business. Mr Roeloffze plainly has had the financial capacity and skills to pursue in a genuine sense ownership and management of a business in Australia but has failed to do so. The Tribunal accepts that he placed heavy reliance on the advice provided by his then Migration Agent. That does not relieve him of the obligation he assumed to satisfy the requirements that are clearly set out in the Act.
45. As has been mentioned Mr Roeloffze and his family purchased a residence in Manly New South Wales at a cost of some $880,000.00 and has placed as much as $450,000.00 on deposit in an Australian bank. He has therefore placed very much more money in those investments than in any business interest in Australia.
46. Attempts were made after Mr Roeloffze received notice that his visa may be cancelled to bolster his interest in "The Timeless Way". This included a further loan of $40,000.00 and the other steps previously mentioned.
47. There is some evidence also that Mr Roeloffze has been looking for other business interests in Australia. He mentioned, for example, "cosmetic jewellery" and a "rubber business". It would appear that these remain little more than ideas. There is no evidence of significant progress in establishing another business in Australia.
48. Mr Roeloffze also indicated that he had given consideration to living in Tasmania and purchasing a property here. "The Timeless Way" is of course situated in Tasmania. Again no concrete steps have been taken to buy a property in Tasmania.
49. The Tribunal accepts that Mr Roeloffze has had great difficulty disposing of his business interests in South Africa. He said: "The whole thing is a nightmare". (Transcript page 44). Even so, there is insufficient evidence of a genuine effort on Mr Roeloffze's part to satisfy the requirements of the Act.
50. On the material before it the Tribunal is not satisfied that Mr Roeloffze has made the genuine efforts as set out in section 134(2)(a)(b) and (c) of the Act.
If the Tribunal concludes that Mr Roeloffze does not satisfy the questions in Issues A to D is there nevertheless a proper basis for exercising the residual discretion in section 134 of the act not to cancel the visa
51. There remains the so called "residual discretion" in section 134 of the Act. That section provides that a decision-maker "may" cancel a business visa if section 134(a)(b) or (c) are not satisfied. It follows that even if the requirements of those parts in section 134 of the Act are not met a decision-maker may nevertheless decide not to cancel the visa.
52. In Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 Kiefel J discussed the residual discretion in section 134 of the Act and suggested that it was available, for example, to allow a decision-maker to permit further time for a visa holder to satisfy the visa requirements.
53. As mentioned above at the time Mr Roeloffze made application for a business visa he signed a "Business Skills Declaration" dated 26 November 2002. (T18). In that document signed by him he declared that he understood the contents of his declaration. He stated that he would "... make genuine efforts to actively participate as an owner or part-owner in the day-to-day management at a senior level of a new or existing business in Australia". Mr Roeloffze declared also that he understood that the Minister may cancel the visa and visas held by members of his family unit within three years of his initial entry into Australia if he had not made those efforts as required. Since being granted this visa on 28 April 2003 and until the cancellation decision on 14 December 2006 Mr Roeloffze had been in Australia for only 84 days approximately. He remains to this day a citizen and resident of South Africa and still has business interests in that country.
54. The Tribunal accepts that the business climate in the textile industry in South Africa has caused great difficulties for Mr Roeloffze, particularly in readily disposing of his business.
55. It is also recognised that Mr Roeloffze relied very heavily on his advice provided by his former migration agent, Mr Mander, and that he was led to believe that his interests and involvement in "The Timeless Way" were sufficient to satisfy the visa requirements.
56. There was ample time to satisfy the conditions of Mr Roeloffze's business visa but this has not occurred.
57. The evidence indicates that Mr Roeloffze is not yet in a position to become genuinely involved in the ownership and management of a business in Australia.
58. The Tribunal concludes that in the circumstances of this application it would not be appropriate to exercise the residual discretion in favour of Mr Roeloffze.
Would the cancellation of Ms Robyn Roeloffze's visa result in extreme hardship for her?
59. If a primary visa is cancelled then any secondary visa must also be cancelled unless that cancellation would result in "extreme hardship" to that visa holder (see section 134(5) of the Act).
60. In Kim v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481 at 487, Foster J said:
"...It is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case.
His Honour, later in that judgment, again in speaking of the phrase "extreme hardship", said:
"It obviously connotes an area within which an ascertainable burden of hardship may fall and properly merit the description "extreme". Within that area there may be varying degrees of burden, one less than another, but each meriting the description".
61. "Extreme" cannot logically in this context be restricted to only the utmost or absolute degree. Consistent with the views expressed by Foster J, the words "a very high degree", which is one of the meanings of "extreme" in the Macquarie Dictionary (Revised 3rd Edition), appear to be more appropriate. In other words there can be differing degrees of extreme hardship. They must, however, be at the very high end of the scale of hardship.
62. For an applicant to succeed under section 134(5) of the Act there must be present not only hardship of an extreme kind but hardship which will necessarily follow cancellation. (See Wang and Minister for Immigration and Multicultural Affairs [2000] AATA 961)
63. The test in section 134(5) is subjective. It is the effect on the individual resulting from cancellation of the visa which is to be considered. The words "... would result in extreme hardship to the person" (the Tribunal's emphasis) confirm that legislative intent.
64. Ms Roeloffze was born on 11 December 1978 and is 29 years of age. She is a citizen of South Africa but is now a resident of Australia. Ms Roeloffze married a South African, Mr Johan de Goede in South Africa in 2005. She has encouraged and sponsored her husband to come to Australia. He is residing in Australia under a Temporary Residence (Spouse) Visa. They both moved to Australia to live in July 2006.
65. Mr Mosley contended that although Ms Roeloffze may suffer hardship it would not be at the "higher end". He pointed out that Ms Roeloffze had been living in England for a period and then willingly returned to live in South Africa in January 2004. He argued that matters such as work, friends and enjoyment of the Australian way of life don't amount to extreme hardship. He submitted that the risk of criminal activity and other conditions existing in South Africa were not a basis for establishing extreme hardship.
66. After considering the evidence, particularly Ms Roeloffze's oral evidence and her demeanour in the witness box, the Tribunal has concluded that Ms Roeloffze, taking into account her particular personal feelings and circumstances, will indeed suffer extreme hardship as a result of the cancellation of her visa. There was an earnestness in her voice in giving her evidence which reveals the degree of burden she sees in prospect. Ms Roeloffze and her husband have together made a substantial commitment to Australia and to bring up a family here. They sold almost all of their possessions to make the move to Australia. They now occupy the family flat in Manly, have obtained good employment and made many friends here. Their future prospects in Australia appear to be very good. They have not been in Australia for a long time but for people of their ages that period is nevertheless significant. Ms Roeloffze's desire and commitment to reside permanently in this country is beyond doubt.
67. The evidence concerning the crime rate, poor job prospects and other adverse circumstances presently prevailing in South Africa has not influenced the Tribunal's decision. Whilst fully appreciating the serious concerns expressed by Ms Roeloffze, in the Tribunal's view it is quite possible that she would be able to arrange her affairs in such a way as to minimise the risks that she mentioned. A not dissimilar picture could be painted of the circumstances existing in many countries around the world.
68. The Tribunal concludes from Ms Roeloffze's evidence and demeanour that to undo all she and her husband have done and hoped for, and require her to now leave Australia, her job, her home, friends and acquaintances, and the good prospects she has in this country, will personally cause her extreme hardship. That hardship will necessarily follow visa cancellation.
Decision:
69. (1) The Tribunal affirms the decision to cancel the business visa of Mark Carl Roeloffze
(2) The Tribunal also affirms the decision, made pursuant to section 134 of the Act, to cancel the business visas of Garth Roeloffze and Lynda Elizabeth Roeloffze
(3) Pursuant to section 134(5) of the Act the business visa of Robyn Roeloffze is not cancelled as the cancellation of the visa would result in extreme hardship to her
I certify that the 69 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R J Groom (Deputy President) and Dr R J Walters (Part-Time Member)
Signed: R Hunt (Administrative Assistant)
Date/s of Hearing 28 February 2008
Date of Decision 28 April 2008
Counsel for the Applicant Mr E Alexander
Solicitor for the Applicant Eugene Alexander & Associates
Counsel for the Respondent Mr W Mosley
Solicitor for the Respondent Mr D Wilson, Australian Government Solicitor
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