Shao and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Migration)
[2021] AATA 4572
•8 December 2021
Shao and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Migration) [2021] AATA 4572 (8 December 2021)
Division:GENERAL DIVISION
File Numbers: 2020/6373
2020/6406
2020/6407
Re:Ruifeng Shao
Weiwei Fan
Bo Shao
APPLICANTS
AndMinister for Immigration, Citizenship, Migrant Services and Multicultural Affairs
RESPONDENT
DECISION
Tribunal:Senior Member A Poljak
Mr S Evans, Member
Date:8 December 2021
Place:Sydney
The decisions under review dated 30 September 2020 are affirmed.
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Senior Member A Poljak
CATCHWORDS
MIGRATION – business visa cancellation – discretion to cancel business visas pursuant to subsection 134(1) of the Migration Act 1958 (Cth) – whether any prohibitions on the cancellation of the visa apply pursuant to subsection 134(2) of the Migration Act 1958 (Cth) – whether the cancellation of the second and third applicants’ visas would cause extreme hardship – facts and circumstances considered – relevant law and policy considered – evidence and submissions considered – decisions under review affirmed.
LEGISLATION
Migration Act 1958 (Cth)
CASES
Philp and Minister for Immigration and Citizenship [2007] AATA 2092
Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283SECONDARY MATERIALS
Procedural Instruction on Business Visa Cancellation
REASONS FOR DECISION
Senior Member A Poljak
Mr S Evans, Member
8 December 2021
INTRODUCTION
Ruifeng Shao was granted a Business Talent (subclass 132) visa (‘the visa’) on 13 March 2017. Included on the visa were his wife, Weiwei Fan and son, Bo Shao, both of whom hold visas dependent on Mr Shao’s visa. Mr Shao, Mrs Fan and Mr Bo Shao are Chinese nationals. Mr Shao entered Australia on 10 September 2017. The following day he registered his company, Weifeng Pty Ltd (‘Weifeng’), which buys Australian wines to sell in China. Mr Shao and Mrs Fan are the sole directors of Weifeng. On 17 September 2017, Mr Shao departed Australia and has not returned.
On 24 July 2019, Mr Shao was sent a letter by a delegate of the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (‘the respondent’) requesting he complete a Survey of Business Skills Visa Holders (‘Form 1010’). The purpose of the survey was to determine whether Mr Shao was meeting the requirements of his visa. Mr Shao did not complete the survey and on 22 August 2019 Mr Shao’s representative informed the respondent that Mr Shao was suffering health issues which prevented him from committing to his business. On 12 August 2020 a delegate of the respondent issued Mr Shao a notice of intention to consider cancellation of the visa. On 30 September 2020 Mr Shao’s visa was cancelled, along with those of Mrs Fan and Mr Bo Shao.
On 13 October 2020, Mr Shao, Mrs Fan and Mr Bo Shao sought review of the decision to cancel the visa at the Administrative Appeals Tribunal. As Mr Shao is the primary visa holder, his eligibility will be considered in the first instance.
APPLICABLE LEGISLATION
Subsection 134(1) of the Migration Act 1958 (Cth) (‘the Act’) sets out the grounds on which the Minister may cancel a business visa:
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) 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.
Subsection 134(2) of the Act sets out the circumstances in which the Minister must not cancel a business visa:
(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.
Where the Minister cancels a person’s business visa under subsection 134(1), subsection 134(4) requires the Minister to also cancel the business visa of a member of the family unit of the holder of the cancelled visa. Subsection 134(4) applies where the 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.
Subsection 134(5) of the Act provides that the Minister must not cancel the visa of another person who is or was a member of a family unit if the cancellation of that visa would result in extreme hardship to the person.
Departmental policy is contained in the Procedural Instructions. The Tribunal will generally apply departmental policy unless there are cogent reasons not to do so.
ISSUES TO BE DETERMINED
The issues to be determined by the Tribunal are:
(a)whether the discretion to cancel the business visa has been enlivened; and if so
(b)whether there are any prohibitions on the cancellation of the visa by operation of subsection 134(2) of the Act; and
(c)if the discretion to cancel the visa is exercised, whether cancellation would result in extreme hardship to Mrs Fan or Mr Bo Shao.
BACKGROUND
Following an expression of interest, Mr Shao was invited to apply for a Business Talent (Subclass 132) visa. On 13 March 2017 Mr Shao, Mrs Fan and Mr Bo Shao were granted visas valid until 13 March 2022. Currently, Mr Shao and Mrs Fan reside in China, whilst Mr Bo Shao is studying in Adelaide.
Consumption Order
Following a dispute over a loan, an enforcement case was filed against Mr Shao in a Chinese court on 11 December 2017. A certified translation of a Consumption Restriction Order dated 29 April 2018 states that as Mr Shao ‘failed to perform the payment obligations… within the period specified in the enforcement notice…consumption restriction measures have been taken to restrict you from the following high consumption and non-essential life and work consumptions…’. Relevantly, the order identifies restricted consumptions including transportation by airplanes, train with soft sleepers and ships with second-class cabins or above.
The consumption order informs Mr Shao that should he ‘engage in… restricted consumer activities not essential for daily life’ he is required to apply to the court and proceed only after having received approval from the court.
Health Concerns
On 22 August 2019 Mr Shao, through his representative, informed the respondent that he was suffering from health issues which prevented him from committing to his business. He did not specify the nature of the health issues, but stated they prevented him from travelling to Australia from China and from ‘fully fulfill[ing] his commitment to do business in SA [South Australia] as he planned’. His representative wrote that ‘[w]hat happened is out of [Mr Shao’s] control and not what he wanted and can be solved in [the] near future’, and indicated that Mr Shao was ‘keen to fulfill his investment commitment and live in Australia’. During the hearing into his application, Mr Shao gave evidence that the health issue referred to by his representative was the consequence of a motor vehicle accident.
CONSIDERATION
Has the discretion to cancel the visa been enlivened?
Subsection 134(1) of the Act sets out the circumstances under which a business visa may be cancelled. Paragraph 134(1)(a) allows for the Minister to cancel Mr Shao’s visa if the Minister is satisfied that he has not obtained a substantial ownership interest in an eligible business in Australia.
Paragraph 134(1)(b) provides that Mr Shao’s visa may be cancelled if he is not utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business.
Paragraph 134(1)(c) allows for the visa to be cancelled in circumstances where Mr Shao does not intend to continue to meet the requirements set out in paragraphs 134(1)(a) and 134(1)(b).
The respondent contends that the discretion to cancel the visa is enlivened by each of the criteria set out in subsection 134(1).
Is Weifeng an eligible business?
Mr Shao and Mrs Fan hold all the shares in Weifeng. Whilst accepting Mr Shao has a substantial ownership interest, the respondent contends that Weifeng is not an eligible business as required by subsection 134(1) of the Act and defined in subsection 134(10):
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.
With reference to paragraph 134(10)(c), the respondent submits that in order for Mr Shao to have a substantial interest in an eligible business, there must be a reasonable belief that Weifeng is a business which is resulting in, or will result in, the export of Australian goods or services.
In his written submissions, Mr Shao does not explicitly address the issue of whether Weifeng is an eligible business. Weifeng was granted a Licence to Export Wine, Brandy and Grape Spirit from the Australian Grape and Wine Authority on 28 November 2017 expiring on 28 November 2018. A second licence, valid until 28 November 2019, was subsequently issued.
Sales records indicate that Weifeng exported red wine across three shipments valued at approximately $175,000. The most recent sales contract was dated 11 June 2019 with the last shipment of wine exported on 30 July 2019.
Whilst the evidence demonstrates that Weifeng made three shipments of wine, it is agreed that Weifeng’s export licence expired on 28 November 2019 and the company’s last export was made on 30 July 2019. Since then, Weifeng has not made any further wine exports and as of 28 November 2019 the company was no longer licensed to do so.
Before the Tribunal is a ‘Red Wine Operation Cooperation Agreement’ between Zhengzhou Dennis Life Plaza (‘Zhengzhou’) and Weifeng commencing 1 January 2021. The five-year agreement requires Zhengzhou to make periodic investments in Weifeng for which Zhengzhou will be entitled to a share of the profits generated by Weifeng’s sale of ‘the chateaus in Adelaide of Australia’.
An agreement to supply between Weifeng and Bo’ai Guest Hotel for the provision of South Australian wine for the period of May 2020 to May 2025 is in evidence. The translated documents provide a framework for supplying wine but do not contain a commitment on the part of Bo’ai or Zhengzhou to purchase wine.
Irrespective of the agreements to supply, Weifeng has been without a license to export wine since 28 November 2019. This weighs heavily against the proposition that Weifeng is likely to export wine pursuant to the agreements in place with Zhengzhou and Bo’ai. Mr Shao does not contend, and the evidence does not support, the proposition that Weifeng has been engaged in enterprises other than exporting wine which may make it an eligible business.
In cross-examination Mr Shao indicated that his export business had been curtailed by Chinese government restrictions on imports from Australia. He told the Tribunal that recent Chinese government regulation had a severe impact on his business, but that he was looking at other opportunities for exporting construction materials and paint from Australia.
On the basis of the evidence before the Tribunal, we do not reasonably believe that Weifeng is a business which is resulting or will result in the export of Australian goods in the future. The company’s commercial trade relies on a small number of transactions over a relatively brief period up until June 2019. Weifeng has not been licensed to perform its stated core business since the expiry of its export licence in November 2019 and has not engaged in any export activities since. The agreements that Weifeng has reached with Zhengzhou and Bo’ai carry little weight in circumstances where they are not supported by anything other than the agreements themselves.
As such, we find that Weifeng is not an eligible business for the purpose of subsection 134(10) of the Act and it therefore follows that Mr Shao does not have a substantial ownership interest in an eligible business in Australia.
Was Mr Shao utilising his skills in actively participating at a senior level in the day-to-day management of the business?
Mr Shao contends that he was managing Weifeng on a day-to-day basis. His representative submitted that the nature of the business is such that it is not a ‘daily business’, and Mr Shao was able to manage Weifeng as well as his other business interests in China concurrently.
Though Mr Shao maintains that whilst he was involved in the day-to-day management of Weifeng to the extent that paragraph 134(1)(b) does not apply, his involvement was curtailed by the health concerns and consumption order outlined above. Further, the COVID-19 outbreak and associated ‘strict lockdown’ in China had a significant impact on his ability to carry on the business.
The respondent acknowledges that Mr Shao may be responsible for managing Weifeng at a senior level, but contends that he is not involved in managing the business in an active or day-to-day basis.
Mr Shao has spent only eight days in Australia, meaning his day-to-day management of Weifeng was almost exclusively conducted from overseas. It is not a requirement that business visa holders manage their business on a day-to-day basis from within Australia, but if they are managing their business from overseas it is expected that there is evidence of them having done so. The Procedural Instruction on Business Visa Cancellation at subsection 11.2 suggests that evidence of managing a business on a day-to-day basis may include business correspondence, emails, attendance at meetings, facsimiles showing active involvement in research, negotiations and decision making. No such evidence is before the Tribunal.
Mr Shao confirmed that Weifeng did not require day-to-day management, and given the absence of supporting evidence which would indicate otherwise, we find that Mr Shao was not utilising his skills in actively participating at a senior level in the day-to-day management of the business. As such, the discretion to cancel the visa is enlivened by paragraph 134(1)(b).
Conclusion
Having found that Weifeng was not an eligible business, and that Mr Shao was not utilising his skills in actively participating at a senior level in the day-to-day management of the business, we are satisfied that the discretion to cancel the visa is enlivened under paragraphs 134(1)(a) and 134(1)(b) of the Act.
The third ground on which a visa may be cancelled requires a visa holder to intend to continue to meet the requirements in paragraphs 134(1)(a) and 134(1)(b). Having determined that Mr Shao does not have a substantial ownership interest in an eligible business, or a role in the day-to-day management of an eligible business, it follows that he is unable to continue to do so and cancellation of the visa is enlivened by operation of paragraph 134(1)(c).
Is the discretion to cancel prohibited by subsection 134(2)?
Subsection 134(2) of the Act sets out the circumstances under which a business visa must not be cancelled. Central to the prohibition afforded by subsection 134(2) is that the visa holder has made a ‘genuine effort’.
Mr Shao submits that he has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of Weifeng.
Subsection 134(3) of the Act lists matters that may be taken into account in determining whether a person has made the genuine effort referred to in subsection 134(2):
(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;
…
Mr Shao contends that he has made a genuine effort in relation to his business and that he will continue to do so. He maintains that the consumption order prevented him from leaving China, but that he had made a genuine effort to fulfil his obligations and will continue to do so. Whilst he was able to complete sales of ‘almost $200,000’ throughout 2018 and 2019, his efforts were hindered by the consumption order and then the pandemic.
Looking forward, Mr Shao plans to ‘come to Australia and restart his business ASAP’ when the consumption order is lifted. He anticipates the consumption order will soon be lifted as his business and the other parties to the dispute which instigated the consumption order reached a settlement agreement. Mr Shao’s intention is to live in Australia to be with his only child, Mr Bo Shao.
The respondent questions the extent to which Mr Shao has been prevented from meeting the conditions of his visa due to the consumption order and COVID-19. Although the enforcement case was initially filed with the court on 11 December 2017, the order preventing Mr Shao from consumption, including travel, was not made until 29 April 2018. The respondent argues Mr Shao was able to travel to Australia to manage his business until the commencement of the order if he chose to do so. Further, the consumption order may not have restricted work-related travel to Australia in circumstances where non-essential life and work consumptions are restricted.
It is certainly the case that Mr Shao did not raise the issue of the consumption order on 22 August 2019 when his representative contacted the respondent and explained that Mr Shao was not able to travel to Australia on account of a health condition.
Mr Shao’s claim that his efforts were frustrated by the consumption order and then COVID-19 are afforded little weight. The evidence in support of this explanation is not compelling, particularly as neither became a relevant factor until Mr Shao had held the visa for over a year.
Conclusion
The issues of Weifeng being an eligible business and Mr Shao’s active participation in the business have been considered in relation to enlivening the discretion to cancel the visa. Having found Weifeng is not an eligible business, it follows he cannot rely on his ownership of Weifeng to meet the requirements in paragraph 134(2)(a).
In Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 the Tribunal found that a genuine effort should be more than a superficial or token effort. In considering Mr Shao’s activities against the considerations listed in subsection 134(2) of the Act, we do not consider the evidence supports a conclusion that his efforts in relation to his Australian business, particularly in the period following the final export of wine in July 2019, should be described as being above superficial or token.
Having found that paragraphs 134(2)(a)-134(2)(c) do not apply, there is no bar to cancelling the visa provided by this section of the Act.
Should the discretion to cancel the visa be exercised?
Though the discretion to cancel the visa has been enlivened, there is a residual discretion not to cancel the visa. The principles which have been applied when exercising this discretion have been articulated in previous decisions of the Tribunal, notably in Philp and Minister for Immigration and Citizenship [2007] AATA 2092 (‘Philp’) which provides a useful, non-exhaustive list of potentially relevant considerations.
Generally, the residual discretion may be used in an applicant’s favour where the applicant has offered a satisfactory explanation for the inactivity or in circumstances where granting a little more time may enable the applicant to fulfill his or her visa obligations.
Relevantly, previous decisions of the Tribunal have found that the residual discretion should generally not be exercised in favour of an applicant where the applicant has:
·not developed a significant connection to Australia or where they still have overwhelming ties to other countries;
·not demonstrated a sustained commitment to trying to fulfil his or her visa obligations over a significant period;
·spent only minimal time in Australia and has no serious and realistic intention (beyond vague intentions) to spend more time in the near future;
·where the applicant has not permanently moved with his or her family to Australia, and has no serious and realistic intention (beyond vague intentions) to do so in the near future;
·where the applicant has not acquired a permanent residential property in Australia, and has no serious and realistic intention (beyond vague intentions) to do so;
·where the applicant is still significantly committed to his or her overseas property.
Mr Shao has spent a very limited period in Australia. He and Mrs Fan live in China and the evidence does not support them having developed a significant connection with Australia. Whilst Mr Shao states that his intention is to live in Australia with Mr Bo Shao, there is no evidence to suggest it is something that is actively underway or likely to be realised in the foreseeable future.
Mr Shao’s commitment to his business, which has not made a sale since June 2019, is not compelling. The COVID-19 pandemic, changes to Chinese regulations relating to Australian imports, Mr Shao’s health issue and the impact of the consumption order do not, either individually or cumulatively, account for the lack of business activity and Mr Shao’s failure to meet the requirements of the visa.
The evidence supports a conclusion that the factors listed above, as identified in Philp, strongly militate against exercising the residual discretion in Mr Shao’s favour.
Would the cancellation of the second and third applicants’ visas cause extreme hardship?
If the visa is cancelled, the second and third applicants’ visas must be cancelled unless doing so would result in extreme hardship. Subsection 134(5) provides that a visa must not be cancelled if the cancellation of that visa would result in extreme hardship. Although the Act does not define extreme hardship, the term has been applied by the Tribunal in a ‘broad’ way with reference to hardship ‘at the very high end of the scale’.
Mrs Fan resides in China and last came to Australia on 10 September 2017 for 16 days. She told the Tribunal that she would like to maintain her visa so that the business may continue and she and Mr Shao can live in Australia with their son.
Mr Bo Shao has lived and studied in Australia since 2012 and his spouse, who is also a Chinese national, has applied for a partner visa to join him in Australia. Mr Bo Shao currently is enrolled in a Bachelor degree at the University of South Australia and he expects to graduate in November 2022. Whilst Mr Bo Shao had studied online in response to COVID-19 related restrictions, he told the Tribunal that he prefers to study on campus. After graduating, he plans to stay in Australia and seek employment.
The respondent notes that Mr Bo Shao is able to make a future visa application on his own. There is no evidence that would indicate any hardship on the part of Mrs Fan should her visa be cancelled.
Having considered the evidence, we find that the cancellation of the visa would be inconvenient for Mr Bo Shao who would be required to study online or apply for another visa in order to complete his studies. There is no evidence that the cancellation of the visa would result in extreme hardship for either Mr Bo Shao or Mrs Fan which would give rise to a bar on cancelling the visa by way of subsection 134(5) of the Act.
CONCLUSION
For the reasons stated above, we find that the discretion to cancel the visa pursuant to subsection 134(1) of the Act arises. As there is no bar arising to cancellation the correct or preferable decision is to affirm the decisions to cancel Mr Shao’s visa and the dependent business visas held by Mrs Fan and Mr Bo Shao.
DECISION
The decisions under review dated 30 September 2020 are affirmed.
I certify that the preceding 59 (fifty-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak and Mr S Evans, Member
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Associate
Dated: 8 December 2021
Date of hearing: 1 October 2021 Advocate for the Applicants: Mr W Zhang, OZM Education and Migration Solicitor for the Respondent: Mr C O'Sullivan, Australian Government Solicitor
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