Subramaniam and Minister for Immigration and Citizenship

[2007] AATA 1851

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1851

ADMINISTRATIVE APPEALS TRIBUNAL                No.  2007/1160

GENERAL ADMINISTRATIVE DIVISION
Re		RAVINDRAN SUBRAMANIAM

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal: G.D. Friedman, Senior Member

Date:12 October 2007

Place:Melbourne

Decision: The Tribunal sets aside the decision under review and substitutes a decision that Mr Subramaniam’s subclass 128 Business Skills visa and the secondary visas should not be cancelled.

(sgd) G.D.Friedman

Senior Member

MIGRATION ‑ business skills visa – cancellation – whether eligible business – whether genuine effort to obtain substantial ownership of eligible business or participate in senior management

Migration Act 1958 ss 134(1), (2), (3), (10), 499

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577

Hope v Bathurst City Council (1980) 144 CLR 1

Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703

Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583

REASONS FOR DECISION

12  October 2007   G.D. Friedman, Senior Member

1.        Ravindran Subramaniam is a Sri Lankan citizen who was granted a business skills visa to undertake international tourism and marketing activities in Western Australia.  His visa and the secondary visas held by his wife and children were cancelled because he had not established a business in Australia or demonstrated an intention to do so.

2.        The issue before the Tribunal is whether Mr Subramaniam has made a genuine effort to establish a business in Australia.

WHAT ARE MR SUBRAMANIAM’S BUSINESS ACTIVITIES?

3.        In an undated written statement (Exhibit A1) Mr Subramaniam said that he has been employed by Aitken Spence and Co Ltd, Sri Lanka’s largest tourism and logistics management company, since 1979 and is a director of Aitken Spence Travels Ltd.  He told the Tribunal that he is responsible for a staff of 240 and his role involves arranging tourism from Europe and Asia to Sri Lanka.  He stated that in June 2002 he applied for a subclass 128 Business Skills visa to establish an inbound tourism business in Western Australia because, as a member of the Tamil minority in Sri Lanka, he believed that Australia offered him and his family a safe and settled lifestyle away from the violence and political upheaval in his country.

4.        Mr Subramaniam stated that after the grant of the visa he and his family visited Australia for a week in December 2003.  He said that his research showed that Queensland was a preferable option for establishing his tourism business, and in November 2004 he resigned from Aitken Spence Travels and planned to migrate at the end of January 2005.  He also advised his children’s schools of his intention.  However, following the tsunami that devastated parts of Sri Lanka on 26 December 2004, he agreed to his employer’s request to withdraw his resignation until the situation stabilised.  Mr Subramaniam explained that his decision to postpone his business plans was also influenced by world events that had resulted in a decline in international tourism.

5.        In relation to his revised plans, Mr Subramaniam stated that in 2006 he began negotiations with Kiosque Pty Ltd (trading as Travelscene Springwood), a Brisbane travel agency, and reached agreement in September 2006 to invest $100,200 in the business and become a director and shareholder.  He said that his wife resigned from her employment in September 2006 and he submitted his resignation to Aitken Spence that same month.  He sold his home in Colombo in November 2006.  Mr Subramaniam said that in December 2006 he signed an agreement with Kiosque granting him a one-third share of the business in return for his investment and his involvement as a director.  On 14 December 2006 he transferred $104,990 to his bank account in Brisbane, but said that at that time he did not wish to proceed with the investment and re-locate his family to Australia without an indication from the Department of Immigration and Citizenship that it would not cancel his visa.  He stated that on 13 March 2007 his visa was cancelled because he had not proceeded with the investment.

6.        Under cross-examination Mr Subramaniam said that Kiosque was working with Aitken Spence.  He said that he could not proceed with his investment earlier because, as an employee of Aitken Spence, he would have had a conflict of interest.  He referred to his extensive correspondence with the Department and Kiosque by email and telephone, and stated that he had kept both parties informed of his plans at all times.  Mr Subramaniam maintained that he had made a genuine effort to fulfil the requirements of his visa, taking into account events such as the tsunami which were beyond his control.

7.        In an undated witness statement (Exhibit A15) Mr J. Pathikirikorale, director, Kiosque Pty Ltd, stated that Kiosque is a large travel agency with a turnover of nearly $5 million and specialises in tours to India, The Maldives and Sri Lanka. He stated that during late 2006 he negotiated with Mr Subramaniam concerning the proposed investment in the company, and confirmed that Mr Subramaniam had the experience and expertise to develop a market for tours to Europe.  He said that if the involvement of Mr Subramaniam is successful the business would be able to employ additional staff.  In oral evidence Mr Pathikirikorale said that the company welcomed the approach from Mr Subramaniam and valued the expertise that he would bring.  Mr Pathikirikorale indicated that he expected the proposed investment to proceed when the visa cancellation issue is resolved.

WHAT IS THE LEGISLATIVE FRAMEWORK?

8. Section 134(1) of the Migration Act 1958 provides:

(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.

IS KIOSQUE AN ELIGIBLE BUSINESS?               

9.        Section 134(10) of the Act defines eligible business as one that the Minister reasonably believes is resulting in 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.

10.      The Tribunal accepts the evidence from Mr Pathikirikorale about the activities of Kiosque and is satisfied that the business is a large independent travel agency that operates continuously for profit (Hope v Bathurst City Council (1980) 144 CLR 1) and engages in tourism activities which result in the development of business links with the international market. In addition the business has resulted in the creation of employment in Australia and this may increase if Mr Subramaniam becomes involved as a director. For these reasons the Tribunal finds that Kiosque is an eligible business within the meaning of s 134(10) of the Act.

HAS MR SUBRAMANIAM MADE A GENUINE EFFORT TO OBTAIN SUBSTANTIAL OWNERSHIP OF AN ELIGIBLE BUSINESS AND TO USE HIS SKILLS IN SENIOR MANAGEMENT?

11.      Sections 134(2) and (3) of the Act provide:

(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).

12.On 15 March 2007 the respondent issued a new Procedures Advice Manual 3 (PAM3) which sets out the procedures to be followed in the making of decisions under s 134 of the Act.  PAM3 replaced Migration Series Instruction 133 (MSI-133) and was issued pursuant to s 499 of the Act which authorises the Minister to give written directions to decision-makers.  The Tribunal accepts that PAM3 is a relevant consideration in its decision-making process (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577) and is the correct policy to be applied at the time of the Tribunal’s decision (Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583).

13.      In paragraph 9.2 of PAM3, genuine effort refers to evidence that the visa holder has exerted himself or herself to get into business in Australia or be involved in the management of the business at a senior level on a day-to-day basis.  It also refers to an expectation that the visa holder will continue to make sustained and continued efforts to meet visa requirements throughout the three-year period.  PAM3 lists the following factors which aim to assist decision‑makers in determining whether a genuine effort has been made under s 134(3) of the Act:

·business proposals/plans which are genuine, realistic and achievable;

·the existence of partners or joint venturers by formal contract or written agreement;

·continuous and genuine business research such as written evidence of detailed consultations with business advisors (accountant, lawyer, bank/financial institution, business/trade association);

·physical presence in Australia for a significant time;

·transfer or investment of sufficient funds (other than for personal use) to ensure that the business meets the requirements of an eligible business;

·failure to comply with a notice for information under s 137, including notification of address and return of relevant survey forms.

14.      In assessing Mr Subramaniam’s claims against the guidelines in PAM3 and s 134(3) of the Act, the Tribunal takes into account that in his application for a visa Mr Subramaniam provided a detailed business plan (T4 pages 64-91) setting out the objectives of the business originally proposed for Western Australia and strategies to be followed.  There is evidence of business partners by way of the written agreement with Kiosque dated 12 December 2006 (Exhibit A11) and signed on 13 December 2006, including a schedule outlining Mr Subramaniam’s role and responsibilities as a director, which involve a senior management role in the day-to-day operations of the business including full responsibility for retail travel staff and budget preparation.  He has provided detailed financial statements, bank account statements, taxation returns and other relevant business documents relating to Kiosque (T22).

15.      In addition to the written agreement Mr Subramaniam signed a Memorandum of Understanding with Kiosque on 13 December 2006 (T22 page 248) committing him to the purchase of 43,200 shares in Kiosque for $100,200, with the transaction to be completed upon the restoration of his business skills visa.  He deposited $100,200 in a bank account in Brisbane (Exhibit A2) and the Tribunal accepts his evidence that this sum was to be used as the investment in Kiosque, as shown by the written agreement and correspondence with the Department.  The Tribunal is satisfied that holding the amount in the Australian account after the date of cancellation is indicative of his intention to continue to make such efforts (Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703).

16.      The Tribunal is also satisfied that any unconditional purchase of shares would have required Mr Subramaniam to find a further purchaser in order to recover his investment after the cancellation of his visa.  Therefore, in the particular circumstances of this case, the timing and arm’s length nature of the business transaction contemplated by Mr Subramaniam and Kiosque in the written agreement was reasonable.  The proposal does not represent an attempt by Mr Subramaniam to frustrate the legislative and policy intention behind the business skills migration scheme by using a lack of certainty as an excuse for failing to comply with the terms of his visa.

17.      The Tribunal notes that Mr Subramaniam was present in Australia for 23 days following the granting of the visa until the date of cancellation.  Material submitted by him (Exhibits A3-A10) satisfies the Tribunal that Mr Subramaniam planned to migrate to Australia but unforeseen events such as the tsunami in 2004 made his plans impracticable at that time.  He has replied to requests by the Department for additional material.

18.      After considering all the relevant matters including factors in s 134(3) of the Act, the Tribunal finds that Mr Subramaniam has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia (s 134(2)(a) of the Act); to utilise his skills in actively participating in senior management (s 134(2)(b) of the Act); and that he intends to continue to make such genuine efforts (s 134(2)(c) of the Act). Therefore he satisfies s 134(2) of the Act, so the visa must not be cancelled under s 134(1) of the Act.

DECISION

19.      The Tribunal sets aside the decision under review and substitutes a decision that Mr Subramaniam’s subclass 128 Business Skills visa and the secondary visas should not be cancelled.

I certify that the nineteen [19] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

(sgd) Mara Putnis

Associate

Dates of hearing:  25 September 2007
Date of decision:  12 October 2007
Advocate for applicant:                Mr G. Doran
Solicitor for applicant:                  Nevett Ford
Advocate for respondent:           Ms A. Linacre

Solicitor for respondent               Clayton Utz