Sim and Minister for Immigration and Citizenship
[2008] AATA 302
•11 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 302
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W 200600405
GENERAL ADMINISTRATIVE DIVISION ) Re Kian Siang Sim Applicant
And
Minister for Immigration and Citizenship
Respondent
DECISION
Tribunal Mr A Sweidan, Senior Member Date11 April 2008
PlacePerth
Decision The Tribunal affirms the decision under review.
.....(Sgd) Mr A Sweidan..........
Senior Member
CATCHWORDS
Immigration - Business Skills Visa - whether applicant using skills in actively participating at a senior level in day to day management of an eligible business - whether genuine efforts made to do so
LEGISLATION
Migration Act 1958 s 134(1) s 134(2)
CASES
Buljeta and Minister for Immigration and Multicultural Affairs [2003] AATA 10
Drake v Minister for Immigration and Ethnic Affars (1979) 2 ALD 634
Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259
Griffiths and Migration Agents Registration Authority [2001] AATA 240
Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342
Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54
Shi v Migration Agents Registration Authority [2007] FCAFC 59
Puzey v Commissioner of Taxation (2003) 131 FCT 244
Yang v MIMIA (2006) 86 ALD 722; [2006] AATA 232
Gut Hiong Lim and Jerry Budimuya Mulya and Minister for Immigration and Multicultural Affairs [2007] AATA 1036
Hou Lam Yam v Minister for Immigration and Indigenous Affairs [2004] AATA 283
REASONS FOR DECISION
11 April 2008 Mr A Sweidan, Senior Member BACKGROUND
1. The following facts are not in dispute:
2. On 2 July 2003 the applicant was granted a sub-class 128 Business Skills Visa.
3. The applicant first entered Australia on on the visa on 26 December 2003. From then until his visa was cancelled he was in Australia for a period of 49 days.
4. On 10 August 2004 the applicant acquired a 60% interest in Gateway Asia Pty Ltd (Gateway). The applicant described Gateway as a business set up to export international business training courses to China and to offer Chinese language services to the business community in Australia.
5. On 28 October 2005 the Department sent the applicant a 24 month survey (Form 1010). The applicant responded in a letter dated 20 January 2006.
6. On or around 18 September 2006, the applicant instructed his accountant to deregister Gateway. Gateway was formally deregistered on 28 January 2007.
7. On 4 October 2006 the applicant obtained a 10% ownership interest in Yenom Labelstocks Pty Ltd (YL). YL is an Australian subsidiary of a Singapore based conglomerate which specialises in pressure sensitive adhesives.
8. On 25 October 2006 a notice of intention to cancel his visa was sent to the applicant. The applicant did not respond by the deadline of 1 December 2006. The Department sent the notice by registered mail to the applicant’s Western Australian address in Dalkeith, but it was returned to sender on 1 November 2006.
9. On 4 December 2006 a delegate of the respondent decided to cancel the applicant’s business skills visa to take effect on 2 January 2007. The Department sent the notice by email. The Department had minimal information regarding the applicant’s claimed involvement in YL at the time of its decision.
10. On 18 December 2006 the applicant was legally made a director of YL.
11. On 15 December 2006 the applicant made an application to the Administrative Appeals Tribunal to review the delegate’s decision.
RELEVANT LEGISLATION AND POLICY
12. Section 134 of the Migration Act 1958 (the Act) provides that the Minister has a discretion to cancel the visa if satisfied that the visa holder has not obtained a substantial ownership interest in an eligible business in Australia, is not utilising his skills in actively participating at a senior level in the day-to-day management of the business, or does not intend to do these things. The Minister must not cancel the visa if satisfied that the visa holder has made genuine efforts and intends to continue to make such genuine efforts to comply with these requirements.
13. Eligible business and ownership interests are defined in section 134(1) of the Act and discussed at paragraph 4.3 of the Migration Series Instructions (MSI) 133.
14. Section 134(10) provides that eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
14.1 the development of business links with the international market;
14.2 the creation or maintenance of employment in Australia;
14.3 the export of Australian goods and services;
14.4the production of goods or the provision of services that would otherwise be imported into Australia;
14.5 the introduction of new or improved technology to Australia; and
14.6an increase in commercial activity and competitiveness within sectors of the Australian economy.
15. Paragraph 4.3.2 of the MSI-133 notes that eligibility relates to achievement of stated objectives through the activities of the business, not directly to the size or scale of the business.
16. Section 134(3) provides a list of matters that the Minister may take into account when determining whether a person has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and to utilise his skills in actively participating at a senior level in the day-to-day management of that business.
17. Notes to guide the interpretation of these matters are provided at paragraph 4.5 of the MSI-133. The matters that may be taken into account, and the notes to their interpretation provide as follows:
17.1 business proposals that the person has developed. The MSI refers to whether there is a business proposal which is considered genuine, realistic and achievable;
17.2the existence of partners or joint ventures. The MSI refers to whether there is a formal contract with partners or joint venturers;
17.3research that the person has undertaken into the conduct of an eligible business in Australia. The MSI refers to whether there is written evidence of detailed consultations with at least 3 business advisers;
17.4the period or periods during which the person has been present in Australia. The MSI refers to whether there has been physical presence for more than 6 months since the first arrival as a business skills migrant;
17.5the value of assets transferred for use in obtaining an interest in an eligible business. The MSI refers to whether there has been transfer to and retained in Australia at least 50% of the funds indicated as available for transfer within the 2 years;
17.6the value of ownership interest in the eligible business in Australia which is or has been held by the person. The MSI refers to whether there is or has been a minimum Australian $100,000.00 or 10% ownership held by the person and provides that if the person is no longer in the business the reasons for loss of ownership are relevant;
17.7the business activity that is or has been undertaken by the person. The MSI refers to whether there is a minimum of Australian $100,000.00 business activity as indicated by turnover and provides that this may include other business activity not considered as an eligible business but cannot include passive investment, for example the purchase of shares;
17.8whether the person has failed to comply with a notice under section 137. The MSI refers to whether there has been a failure to comply with a notice for information under section 137, i.e. mandatory monitoring of Australian address and return of survey forms; and
17.9if 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 on the day-to-day management of the business:
17.10the length of time the person held the ownership interest or participated in the management as the case requires; and
17.11the reason why the person no longer holds the interest or participates in the management as the case requires.
18. Whilst the Tribunal is not bound by Departmental policy, the Tribunal should follow Ministerial or Departmental Guidelines unless there is some good reason not to: see Buljeta and Minister for Immigration and Multicultural Affairs [2003] AATA 10 at [58] citing Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 634; and Re Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [51] citing Davies J in Re Dainty and Minister for Immigration and Ethnic Affairs (1996) AAR 259.
Information which the Tribunal should consider
19. In conducting its review of the cancellation decision the Tribunal should have regard to all relevant evidence to determine whether the applicant satisfies the requirements of section 134(1) or is making genuine efforts to do so within the meaning of section 134(2) as at the date of cancellation: Re Griffiths and Migration Agents Registration Authority [2001] AATA 240; Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342 and Wong v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 54.
20. In the Full Federal Court decision of Shi v Migration Agents Registration Authority [2007] FCAFC 59, Nicholson J at [10] with Tracey J at [58] agreeing, said in relation to this issue:
“The Tribunal is not confined to material which was before the decision-maker or the events which had occurred up till the time of its decision…However, the Tribunal is obliged to address the same question as the primary decision-maker…Where the question to be decided arises under a statute, the relevant of later evidence will depend upon the proper construction of the statute and the particular factual context…If the primary decision had to be made by reference to a particular point of time, the Tribunal will be limited to deciding the question by reference to that point of time…If the decision could only have been made following a certain procedure, it may be that the evidence called on the review cannot be such as would undermine that procedure. This may preclude calling of evidence of improvements implemented after the date of the decision and in response to the procedure…This does not mean the Tribunal cannot receive as evidence facts that occurred after the date of the decision under review provided that evidence bears on the merits of the decision as at the time that it was required to be made.”
Substantial Ownership in an eligible business
Gateway Asia Pty Ltd
21. It is common cause that at the time of the notice of cancellation on 4 December 2006:
21.1the applicant did not have a substantial ownership interest in Gateway;
21.2Gateway was not a business nor an eligible business;
21.3the applicant was not involved in actively participating at a senior level in the day-to-day management of Gateway; and
21.4the applicant had no intention of re-establishing a proprietary or managerial connection to Gateway.
22. Gateway is, therefore, not relevant as to whether the applicant has satisfied his visa obligations under s134(1), although it may be relevant to the question of genuine efforts pursuant to s134(2).
Yenom Labelstocks Pty Ltd (YL)
Substantial ownership
23. Section 134(1) and (2) of the Act require the visa holder to obtain a substantial ownership interest in an eligible business in Australia.
24. Section 134 defines “ownership interest” in relation to a business to mean an interest held by the visa applicant in a business as:
24.1 a shareholder in a company that carries on the business; or
24.2 a partner in a partnership that carries on the business; or
24.3 the sole proprietor of a business;
24.4including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
25. The word “substantial” has been considered in Ong v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 where Commissioner for Superannuation v Scott (1987) 71 ALR 408 at 412 was cited with approval. In Scott the Court considered a number of authorities dealing with the question of what constitutes “substantial” and held, (albeit in the context of s45D of the Trade Practices Act 1974 (Cth)) that the word “substantial” means:
“Real or of substance and not insubstantial or nominal.”
26. Member Allen at [25] and [26] in Ong went on to further say:
“In other words what is a substantial ownership of an eligible business is a question of fact and degree.
Here the Applicant obtained a 12.25 percent holding in a private company having a share capital of 10,000 $1 shares. No doubt if a person owned 12.25 percent of a large publicly listed company such as Coles Myer or the Commonwealth Bank that would be a substantial shareholding (or ownership). I do not, however, regard 12.25 percent of Prestige to be a substantial ownership of that business.”
27. The applicant obtained a 10% ownership interest in YL on 4 October 2006. When the share capital was subsequently increased he increased his holding to maintain it at 10% by paying a further $150,000.
28. Departmental policy generally recognises $100,000 or 10% ownership as indicative of substantial ownership.
29. The respondent conceded in closing submissions that the applicant’s interest in YL is a substantial ownership interest.
Eligible Business
30. The Tribunal finds that on the evidence before it YL is a “business”, contrary to the submissions of the respondent. The test for determining whether any activity is a “business” is a multifactorial one. See Puzey v Commissioner of Taxation (2003) 131 FCT 244 at [47] to [48] (“Puzey”), applied in Yang v MIMIA (2006) 86 ALD 722; [2006] AATA 232 at [14]. Gut Hiong Lim and Jerry Budimuya Mulya And Minister for Immigration and Multicultural Affairs [2007] AATA 1036 at [40]. See also Re Hou Lam Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 at [23]. The relevant factors include:
· the profit motive;
· acting in a business-like way
· the keeping of books of account and records; and
· repetition.
Lack of one or more of these features does not preclude activities being a “business”. (See Puzey at [48]).
31. In the present case the evidence shows that:
31.1the business of YL is carried on for long term commercial, profit making purposes. Management was concerned to increase the company’s market share;
31.2YL acts in a business like way, with budgeting and sales control functions;
31.3.YL keeps records sufficient for accounts to be prepared and for those to be formally audited; and
31.4YL had audited turnover in the 2006 calendar year of in excess of $3 million (see the accounts for the Financial Year ended 31 December 2006 (“Accounts”). Given the nature of the product sold, this is indicative of repetitive activities.
32. The Tribunal also finds that YL is an “eligible business” because:
32.1It competes in the business of supplying label stock, which increases commercial activity and competitiveness (see eg Annexure 7 of Statement of Albert Sim (“Annexure 7”) at page 8, and the Accounts); and
32.2It creates and maintains employment in Australia. The Accounts record that YL paid salaries of $421,000 in 2006.
Active participation at a senior level in the day-to-day management of an eligible business
33. The applicant claims that from in or about October 2006, the applicant has utilised his skills by actively participating at a senior level in the day to day management of YL by:
(a) seeking to review the operations of YL;
(b) overseeing its administration;
(c) reviewing management data; and
(d)participating in human resource management issues within the company.
34. The applicant also claims that he took steps to become involved in the activities of YL prior to formal acquisition of his interest. The applicant is one of the two directors of YL, the other being Ms Lim.
35. The applicant points out that s 134 (1)(b) of the Act does not require that a visa holder be physically located within Australia when participating in a senior management role in the eligible business, provided that the applicant does participate in senior management. Section 134(1)(b) does not refer to “Australia”. It may be contrasted with s 134(1)(a) of the Act which does specify the physical location of the eligible business. The applicant submitted that the interests of Australia and the policy of s 134 are furthered by the development of eligible businesses in Australia rather than compelling the physical presence of persons in Australia. The issue was comprehensively reviewed by Deputy President D G Jarvis in Wong and Minister for Immigration and Multicultural Afairs [2006] AATA 277 at [41] to [48]. The Tribunal concluded at [48]:
“I consider that it would not be permissible to imply into subsections 134(10 or (2) a requirement for the relevant management of an eligible business to take place in Australia. Once again, this would be tantamount to rewriting the provisions in question. Whilst a consideration of the place where management activities will take place might be relevant to the exercise of discretion in appropriate cases, it is not a requirement of the relevant subsections. Further, I think that an additional purpose of the business migration provisions is to attract non-citizens with business expertise to invest in eligible businesses in Australia, and therby promote economic growth. This purpose can be achieved without implying the further requirement that the relevant day-to-day management activities must take place in Australia.”
36. The applicant has filed a number of emails to demonstrate his managerial contributions. The respondent, however, contends that the applicant has failed to demonstrate he has utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business, pointing out the following:
36.1 the applicant has been largely an “absentee entrepreneur”.
36.2there is minimal evidence of the applicant’s actual involvement in management, especially during the relevant period.
36.3emails from the applicant before 29 September 2006 should not be considered.
36.4the Tribunal should not consider evidence of management after the date of cancellation.
36.5 the applicant failed to carry out his delegated roles.
36.6the applicant’s conduct during his solitary visit to YL in November 2006 is not consistent with an executive director actively participating in the senior level day-to-day management of that company.
36.7it appears that the applicant may have no more than a mere perfunctory personal knowledge of the business of YL.
36.8Finally, the applicant failed to make any management decisions of the requisite character.
The applicant has been an absentee entrepreneur
37. It has been held by the Tribunal that the Act is intended to benefit business owners who settle in Australia and actively manage an eligible business. In Huang v Minister for Immigration and Multicultural Affairs [2002] AATA 656 Senior Member Muller said at [12]:
“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.”
38. Divergent views have been expressed in the Tribunal as to whether day-to-day management of an eligible business must take place in Australia, or whether it can take place overseas: see Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27 at [41] for respective authorities and a history of the debate.
39. The current view expressed by Deputy President Walker at [50] - [53] in Burg v Minister for Immigration and Citizenship [2007] AATA 1630, citing with approval Deputy President McMahon at [21] in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997, is that an absentee entrepreneur does not meet the requirements of management under s134(1)(b):
“… it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business. Mr Burg has not done that.”
40. Deputy President Walker noted that the visa holder in Burg had only spent a total of 30 days in Australia at the time of cancellation. He further noted the applicant and his family had not permanently moved to Australia, something which is also expected under the Act, ‘hence the provision of secondary visas for family members.’
41. The applicant in this matter has only spent 49 days in Australia and has not made any endeavours to permanently settle in Australia with his family. The respondent therefore contends that he has not satisfied the residence linked requirement implied into the operation of s134(1)(b). The Tribunal makes no finding on this issue.
There is only minimal evidence of the applicant’s actual involvement in management
42. The applicant has provided approximately fifty emails to demonstrate his management of YL. However, when analysed in detail, it becomes clear that the applicant’s actual contribution is minimal. The respondent particularly points out the following:
42.1while emails have been provided, minutes of meetings, discussions between directors and other official documents are notably absent.
42.4only approximately half of the emails provided occur between the relevant period (4 October 2006 to 4 December 2006).
42.3most of the relevant documents concerned the applicant’s single visit to YL’s office in November 2006.
42.4a number of other emails simply involve discussions in which the applicant made no contribution. An example is the email discussion around 22 September between Peggy Lim, chairman of the parent company and Matthew Van Eck, YL’s then managing director, over whether the company should adopt a security bond or bank guarantee.
42.5The total evidence of the applicant’s actual contribution to management is eight emails drafted by him during the relevant period. Of those eight, most are extremely short of a few sentences, or make mere generic statements.
43. The Tribunal finds that there is insufficient evidence to demonstrate that the applicant has actively participated in the senior level day-to-day management of YL, as required pursuant to s134(1)(b).
Emails from the applicant before 29 September 2006 should not be considered
44. The Tribunal notes that a large volume of emails are dated around 20 September 2006. They mostly seem to deal with the applicant’s initial investigations of YL and initial introductions to its staff. The applicant, however, says at paragraph 37 of his witness statement that he commenced his senior management role in YL on 29 September 2006. The applicant’s own documents and ASIC records further show that he obtained an ownership interest on 4 October and then officially on 30 October 2006.
45. The Tribunal finds that emails from the applicant before 29 September 2006 cannot be considered evidence of management, as he had not yet commenced his senior management role. The Tribunal also finds that evidence before 4 October or even 30 October 2006 is of little relevance, as the applicant was not a manager of a business he had an ownership interest in before these dates.
The Tribunal should not consider evidence of management after the date of cancellation on 4 December 2007
46. The applicant also provided some email correspondence which falls after the date of cancellation on 4 December 2007. The Tribunal finds that these have little relevance and should be given little if any weight.
The applicant failed to carry out his designated roles
47. The applicant claims at paragraph 36 of his witness statement that the board of YL assigned to him the following management roles:
a)Review the Profit and Loss performance with senior management; and
b)Evaluate key job positions to help management to recruit wisely (Recruitment of senior management and technology staff in my area of particular expertise).
48. The Tribunal notes that there are no board resolutions, minutes of meetings, or other documentary evidence to substantiate this claim. The Tribunal finds the applicant’s evidence as to his alleged performance of these roles to be unsatisfactory.
Reviewing the Profit and Loss performance
49. The applicant states he commenced carrying out these management roles on 29 September 2006. He further states that he reviewed the profit and loss position on a monthly basis and cites two emails dated 16 January and 2 February 2007 as examples. Finally, he refers to his signing off of audited accounts on 31 December 2006.
50. The Tribunal notes, however, the following:
50.1 The only documentary evidence submitted pertains to January and February 2007, after the date of cancellation.
50.2 There appears to be no evidence of the applicant performing this role during the relevant months of October, November and December 2006.
50.3 The emails are extremely short. The applicant makes no comment on the January 2007 figures whatsoever. The total contribution of the applicant on the February 2007 figures are generic remarks that ‘performance is better than forecast’, suggestions of ‘selling more’; and ‘breaking down the costs of sales components’.
50.4The applicant is merely asked to sign a director’s declaration of the audited accounts. Again, there is no indication of the extent to which he analysed these financial records, nor does he make any comment or meaningful contribution.
50.5 Finally, if as claimed one of the applicant’s two primary management roles was to review these financial records, the Tribunal finds it strange that he has failed to submit official records to support his claim.
51. The Tribunal finds that the evidence does not support the applicant’s claims and the Tribunal has grave doubts as to whether the applicant carried out this role during the relevant period or at all. Even where the applicant did receive and make brief comments on data, this clearly did not amount to day-to-day management at a senior level: see Harsono v Minister for Immigration and Multicultural Affairs [2007] AATA 64 at [32]; Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898 at [24] and [34] - [37]; and Gunawan v Minister for Immigration and Multicultural Affairs [2006] AATA 852 at [32] and [43].
Evaluate key job positions to help management to recruit wisely
52. The total evidence of the applicant’s involvement in the human resources management of YL involved:
52.1.arranging to interview one new staff member see emails 15 and 16 November 2006. However, the applicant failed to attend the interview (see email from Elvin Ko on 22 November 2006, applicant’s of document filed 10 January 2007).
52.2.some generic comments later in November and December 2007 that ‘we need to pick the right people’ and suggesting ‘let’s work out a total recruitment plan’ in 2007. The Tribunal notes:
a)most of these events occurred after the date of cancellation;
b)these comments are extremely generic, offer no detail, and offer no real assistance to senior level day-to-day management; and
c)most importantly, there is no evidence that the applicant actually carried through this suggestion of creating a total recruitment plan for 2007.
Role in expanding YL’s domestic and international market reach and contributing to corporate restructuring
53. The applicant at paragraph 30 of his witness statement implies that he was appointed a director of YL because:
YL was after an executive director who has international experience as they wish to expand the market reach for both domestic and export businesses. This was timely as it fits into my plan to work on a business plan in Australia and at the same time they can use my experience and skills in corporate restructuring to grow and expand the business platform.
54. This statement identifies the kind of contribution the applicant could have made in utilising his skills in actively participating in the senior level day-to-day management of the company. However, there is no evidence of the applicant assisting to expand YL’s domestic and international market reach, contribute to its corporate restructuring, or manage it in a way consistent with someone who has specifically been recruited as an executive director for these purposes.
The applicant’s conduct during his solitary visit to YL in November 2006 is not consistent with an executive director actively participating in the senior level day-to-day management of that company
55. In the Tribunal’s view the applicant’s conduct during his solitary visit to YL in November 2006 is not demonstrative of someone who is actively participating in the day-to-day management of that company at a senior level. In particular the Tribunal notes the following:
55.1The primary purpose of visiting Melbourne was clearly not so he could contribute to managing YL, but rather because he was already in Australia on assignment for overseas company Nipsea Holdings (see emails 15 and 16 November 2006).
55.2Due to commitments with his overseas businesses, the applicant could only spend a total of three days in Melbourne from 20 to 22 November 2006. Even within that small time frame, the applicant appears to have had difficulty finding much time for YL;
55.3The applicant appears to have only made plans to visit YL while he was in Melbourne on other business and to assist with the interview at the request of Peggy Lim, the parent company’s chairman. Once there he appears to have done little, if anything for YL.
55.4Finally, it is strange, to say the least that the applicant, someone who has been purportedly appointed an executive director and charged with the senior level day-to-day management of YL, needs to ask and be given permission to visit his own company’s premises (see email from Elvin Ko, 16 November 2006).
The applicant appears to have no more than a mere perfunctory personal knowledge of the business
56. In the matter of Lioe v Minister for Immigration and Multicultural Affairs [2006] AATA 189, Senior Member Ettinger in oral reasons indicated that a mere perfunctory personal knowledge of a business is a good indicator that a holder is not utilising their required management skills; and therefore, not satisfying their visa obligations. His Honour Justice Madgwick at [55] in the Federal Court case of Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562 also emphasised how important it was to be:
fully cognisant of the overall direction and performance of the business.
Knowledge of YL’s operations within own specified areas of duty
57. The Tribunal questions the applicant’s knowledge of YL’s operations, even within his specified areas of responsibility as outlined at paragraph 10 of his statement of facts and contentions. The Tribunal particularly notes the following:
57.1 Role in reviewing financial records: the absence of official accounting and financial records.
57.2 Role in human resources management: the absence of any documentary evidence.
57.3 Role as executive director and overseeing YL’s administration: the absence of minutes of meetings or official records, or even meaningful contributions beyond mere generalised statements.
The applicant’s failure to realise he was not legally a director of YL
58. The applicant claims he was appointed a director of YL at the end of September 2006, but due to an administrative error was not legally appointed until after December 2006.
59. The Tribunal notes that the applicant did not appear to be conscious of his non-appointment, and only first became aware when informed by YL’s operations manager on 17 July 2007. Furthermore, there is no evidence from any of the applicant’s emails or any other documents that he made any enquiries as to completion of the administrative steps for his appointment.
60. The applicant had professional duties of skill and diligence arising from being a director, to be cognisant of his legal status within the company: Daniels (formerly practicing as Deloitte Haskins & Sells) v Anderson (1995) 37 NSWLR 438. The applicant’s fundamental lack of knowledge in this regard, and his failure to take reasonable steps, is not consistent with someone actively participating in the senior level day-to-day management of a company.
The applicant failed to make any management decisions of the requisite character
61. In the Federal Court in Lobo v Minister for Immigration, Multicultural and Indigenous Affairs [2006] FCA 1562, His Honour Justice Madgwick at [55] outlined the importance of management decision making of the requisite character:
To my mind the key points in this passage are that the first appellant’s role was that of a subordinate administrative assistant and that she did not satisfy the dual requirements that she be involved in the actual management of the business and in making decisions of the requisite character.
62. Deputy President Walker at [48] - [50] in Burg v Minister for Immigration and Citizenship [2007] AATA 1630, also held that an applicant who was essentially providing an advisory or liaison role, had spent only a small amount of time in Australia, and who only spent a minimal number of hours per week on the named business, did not satisfy the requirements of management under s134(1)(b).
63. The Tribunal finds that there is no evidence of the applicant making any real day-to-day management decisions of the requisite character. On the evidence before the Tribunal he was at best offering suggestions of an advisory or liaison nature, had only spent 49 days in Australia over a 3 year period and spent minimal time on YL and in the Tribunal’s view did not satisfy the requirements of senior level day-to-day management.
64. The Tribunal finds that the applicant has not utilised his skills in actively participating in the senior level day-to-day management of YL.
Genuine efforts throughout life of visa
65. Although there is no statutory definition of genuine effort, numerous authorities have discussed the term and established that it must:
65.1be more than a superficial or token effort. There must be a real and honest effort and not be one which is false, fictitious or a pretence, and mere expressions of interest or inquiries fall short of genuine efforts: Yam v Minister for immigration and Multicultural and Indigenous Affairs [2004] AATA 283.
65.2involve some exertion or endeavour. The requirement is that an effort is made and this requires some activity on behalf of an applicant. In Leo v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 309, and followed in Gunawan v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 852 at [46], [48], the Tribunal found that a genuine effort must be ‘vigorous and determined’.
65.3be a ‘real and sincere endeavour or strenuous attempt’: Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898.
65.4be of a ‘sustained and continuous quality’ in contrast to mere ‘sporadic and desultory activity’: Koosai and Minister for Immigration and Multicultural Affairs [2006] AATA 179
66. Paragraph 4.5.1 of MSI 133 also provides a list of factors which ‘correctly summarises the relevance of s134(3) to the decision making process’: Re Lok Young (Michael) Wong v Minister for Immigration & Multicultural Affairs [2006] AATA 277. As paragraph 4.5.2 of the MSI points out, failure to meet any one criterion may not necessarily lead to a visa being cancelled. All factors should be weighed as a whole.
(a) business proposals that the person has developed
67. The applicant is unable to produce evidence of any business proposals or plans he had developed, noting:
67.1Gateway: despite the applicant’s claim at paragraph 21 of his statement of facts and contentions that he prepared a business plan, he is unable to present any evidence of it.
67.2YL: despite a reference to a ‘total recruitment plan’ for 2007, no evidence of this or any other proposal has been submitted.
(b) the existence of formal contracts with partners or joint ventures
68. The applicant is unable to produce any formal contracts with partners or joint ventures.
(c) research that the person has undertaken into the conduct of an eligible business in Australia
69. While the applicant did carry out some research, in the Tribunal’s view it represented mere expressions of interest, was not vigorous and determined, or of a sustained and continuous quality, noting:
69.1Gateway: The applicant claims he carried out research into establishing language service businesses in both Australia and China. The applicant says at paragraph 15 - 26 of his witness statement that he made enquiries at TAFE, searched the internet, met various people and tried making various connections. These are very vague and general statements, and the applicant has failed to provide any documentary evidence to substantiate these claims.
69.2The applicant has also provided evidence from his friend, Peter Shinn, who lives in the United States. It is unclear why the applicant flew to Texas, and then California, to visit various management training companies (of which there is no evidence), when Gateway’s stated aim was to export international business training courses to China, and to offer Chinese language services to the business community in Australia.
69.3The applicant has also provided evidence from a friend and business associate, Roger Moo. In 2004 both Mr Moo and the applicant allegedly discussed a scheme where NONJI Juice products would be exported from Indonesia to China. Gateway’s total planned role was as some kind of middleman. It is questionable whether this scheme would have been an eligible business, considering it had no real connection to Australia whatsoever. These discussions cannot seriously be characterised as genuine efforts to obtain an eligible Australian business.
69.4Further, Mr Moo states that the applicant failed to follow up the deal with him, and that the enterprise failed to come to any fruition. These efforts were clearly not of a sustained and continuous quality.
69.5The applicant has also provided evidence from another friend and business associate, Johnny Huanseng Tansawa. Mr Tansawa says he often talked with the applicant about plans to break into the Chinese market. There is no indication or evidence, however, to suggest that discussions ever went beyond mere expressions of interest.
69.6Japanese restaurant or other businesses: Mr Tansawa, who owned a Japanese restaurant advised the applicant to ‘take up equity participation and management with some restaurants in Perth’. The applicant states at paragraph 28 of his witness statement that on or around February 2006, he started enquiring with a ‘number of prominent business’ persons in Perth. There is, however, no evidence of any enquiries into any business other than YL.
69.7YL: The Tribunal accepts that the applicant carried out some preliminary investigations in order to obtain an ownership interest in YL. There is, however, no evidence apart from a few short emails, as to what level of investigation occurred.
69.8The Tribunal notes however that once the applicant had obtained his ownership interest in YL, he did not on the evidence before the Tribunal carry out any real or substantial research into the conduct and continued business operations of YL.
69.9Other research: Departmental policy refers to written advices from at least three business advisers (accountants, lawyers, banks/financial institutions, State/Territory government business development office, Austrade, business/trade associations) as a good indication of genuine research. The applicant has failed to provide any evidence of any such written advice.
(d) the period or periods during which the person has been present in Australia
70. The applicant spent a total of 49 days in Australia during the relevant period. This is not surprising when one considers his significant responsibilities and commitments to overseas businesses. In his witness statement at paragraph 4 and 5 he states:
Since 2000, I have been employed as Vice President, Group Human Resource & Corporate Services, WUTHELAM HOLDINGS PTE LTD, the majority owner of NIPSEA HOLDINGS INTERNATIONAL (HK) that in turn owns all Nippon Paint business in Asia.
I am also a director of NIPPON PAINT INDIA.
71. While visa holders may not be required to give up their roles in overseas dealings, they still must make every endeavour to fulfil the obligations owing to their Australian businesses. The short and hurried schedule during the applicant’s brief three day trip to Melbourne in November 2006, and the applicant’s subsequent inability to interview a single prospective staff member (which was one of his stated core responsibilities), is but one example of someone so involved in his overseas business operations that he had little if any time for YL matters.
(e) value of assets transferred for use in obtaining an interest in an eligible business
72. Departmental policy recognises at least 50% of the funds available for transfer as a good indication of genuine efforts. The applicant states at question 12 of his business skills visa application that he had $659,356 available for transfer (see T6, p58). In his 24 month survey however the applicant indicated that he had only transferred $62,785 into Australia.
(h) whether a person has failed to comply with a notice under s137
73. On 25 October 2006 a notice of intention to cancel the visa was sent to the applicant (see T31, p298). The respondent sent the notice by registered mail to 7 Minora Road Dalkeith, WA 6009, which the applicant had nominated in his 24 month survey as his residential address and address to receive all written communications (see T25, pp 281 and 286). The applicant did not respond by the deadline of 1 December 2006 and the notice was returned to sender on 1 November 2006 (see T31, p304).
74. The applicant claims in a letter through his representative SanLing Chan on 9 January 2007 that:
Mr Sim did not receive the Notice of Intention to Cancel dated 25 October 2006 from the Department of Immigration, Multicultural and Indigenous Affairs. It was forwarded to an address of his friend who Mr Sim discovered later was not happy about having to forward mail to him. The person did not bring to Mr Sim’s attention the letter from DIMIA.
75. It was the applicant’s responsibility to ensure he could be notified at his officially nominated address. This incident appears to be a natural consequence of the applicant spending virtually all of his time overseas.
(i) if a 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
76. Gateway: In the Tribunal’s view if the applicant had made genuine efforts, such as obtaining professional business, accounting and legal advice, he would not have taken three years to have come to the realization that:
“I concluded language programmes like Chinese is not a core subject of interest in Australia to establish a business as the market was very small. I was not making any headway with the possibilities of exporting English services to China either.”
77. It appears to the Tribunal that the applicant’s admitted flurry of activity to invest in YL was in large part caused by the applicant’s neglect with regard to Gateway.
Conclusion on genuine effort
78. The Tribunal concludes that, when the relevant factors under s134(3) are weighed as a whole, it is clear that the applicant has not made vigorous, determined, sustained and continuous genuine efforts throughout the life of his visa to comply with his obligations in relation to actively participating at a senior level in the day to day management of YL’s business.
Residual Discretion
79. The Tribunal is of the opinion that it should not exercise its residual discretion in preventing the applicant’s visa being cancelled, because the applicant:
79.1.has only spent some 49 days in Australia: Lok Young (Michael) Wong v Minister for Immigration and Multicultural Affairs [2006] AATA 27 at [44];
79.2.appears to have no intention of permanently moving to Australia with his family: Abbu v Minister for Immigration and Multicultural Affairs [2006] AATA 898 at [47]; Burg v Minister for Immigration and Citizenship [2007] AATA 1630 at [50] - [53]; and
79.3.remains heavily involved and committed to his overseas businesses: (Abbu supra).
Decision
80. The Tribunal affirms the delegate’s decision because:
80.1.Although the applicant obtained a substantial ownership interest in an eligible business in Australia he has failed to utilise his skills in actively participating at a senior level in the day-to-day management of that business;
80.2.the applicant has failed to demonstrate that he intends to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business;
80.3.the applicant has failed to make any genuine efforts to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business; and
80.4.the correct or preferable decision is that the applicant’s visa should be cancelled.
I certify that the 80 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member
Signed: ....(sgd) C Skinner.....................
AssociateDate/s of Hearing 19 and 20 November 2007
Date of Decision 11 April 2008
Counsel for the Applicant Mr H Ellis
Solicitor for the Applicant Sanling Chan
Counsel for the Respondent Mr S Ferguson
Solicitor for the Respondent Australian Government Solicitor
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