Teng and Minister for Immigration and Multicultural and Indigenous Affairs
[2004] AATA 715
•6 July 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 715
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/847
GENERAL ADMINISTRATIVE DIVISION ) Re KIN WAH TENG Applicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms M J Carstairs, Member Date6 July 2004
PlaceBrisbane
Decision The Tribunal affirms the decision under review. . ..........(Sgd)..........
M J Carstairs
Member
CATCHWORDS
MIGRATION ‑ business skills visa ‑ cancellation ‑ whether substantial ownership in an eligible business ‑ whether utilising skills in actively participating at a senior level in the day‑to‑day management of business ‑ whether intention to continue to hold a substantial ownership and to utilise skills
Migration Act 1958 s134
Re Tang and Minister for Immigration and Multicultural Affairs (2000) 32 AAR 103
Re Huang and Minister for Immigration and Multicultural Affairs [2002] AATA 656
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283
Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31
REASONS FOR DECISION
6 July 2004 Ms M J Carstairs, Member 1. This is an application by Kin Wah Teng (the applicant) for review of decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent), dated 15 September 2003, to cancel the Business Skills (Migrant) (Class AD) subclass 127 visa (the visa) granted to the applicant.
2. At the hearing the applicant represented himself with the assistance of his wife, Swee Tin Clara Ho. Mr M Steele, a solicitor with Blake Dawson Waldron, represented the respondent.
3. The Tribunal had before it three volumes of documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (consisting of the T documents (T1-T16) and the Supplementary T Documents (T1-T117)), together with exhibits marked A1 to A3 for the applicant, and R1 for the respondent. The applicant filed a further letter, dated 10 June 2004, after the hearing.
BACKGROUND
4. The applicant was born on 28 September 1953 and is a citizen of Singapore. He is married, with two children aged seven and eleven. On 22 December 1999, each member of the family was granted a sub class 127 visa and they entered Australia on 31 December 1999.
5. The applicant operates Ritmo International Pte Ltd a business incorporated in Singapore in 1994 involving industrial machinery. He has had an involvement with several other companies: Tengway Pte Ltd (now renamed Daytona), Ritmo International (Australia) Pty Ltd; Ritmo Impex Pty Ltd; Sato Enterprises Pty Ltd (“Sato”); Ritmo Technology Pty Ltd; and Golden Recognition Sdn Bhd.
6. On 19 August 2002, the Department sent to the applicant’s last provided address, at 3 Vicars Street North Balwyn, Victoria (the “North Balwyn address”), a 24‑month survey concerning his business activities, with a return date of 7 October 2002. As there was no response, the Department, on 10 October 2002, sent a written notice of intention to cancel the visa held by the applicant and the visas held by other family members, and sought a response.
7. On 15 September 2003, the respondent cancelled the visas held by the applicant and his family on the basis that no response had been received. On 6 October 2003, the applicant lodged an application with the Tribunal seeking review of the decision to cancel the visa held by him.
EVIDENCE
8. The applicant gave oral evidence that he first visited Australia in 1995 and decided then he would like to make Australia his home. He bought a residential property on that visit and in 1997 bought a factory in Port Melbourne with the intention that it would be a base for his business interests in Australia. The applicant said that, in 1999, he and his family acted on their intentions more fully by moving their household goods from Singapore to the North Balwyn address and placing their children in local schools. They did not sell their former residence in Singapore.
9. The applicant said that their plans were interrupted by the unexpected death of his father in October 1999. Family responsibilities required his return to Singapore to deal with is father’s business operations in Singapore and China. The applicant and his family left Australia in August 2000, selling the North Balwyn address in November 2000. The applicant said that his original intention was to return to Australia as soon as possible, but this did not happen because of the market downturn as a result of the terrorist attacks in New York on 11 September 2001; the Bali bombings in 2002; and the Severe Acute Respiratory Syndrome (SARS) virus. The applicant said he had to focus on his business interests in Singapore and China and he did not return to Australia in 2001 or 2002. He said that he remains committed to his children growing up in Australia, and they receive instruction at an Australian-run language school in Singapore.
10. In his oral evidence, the applicant said that market research in 1998/1999 revealed that Australians prefer to rent rather than buy machinery. He said that he diversified his business activities in Australia in light of this. He invested in Sato, which traded in computer peripherals (such as VGA cards and cables). The applicant said that in recent years he has changed his focus again and he has concentrated on developing a range of waterless cleaning products, which will be marketed under the brand name Ezee (the “Ezee range”). He said that this project has involved years of research and development. The Ezee range will be manufactured in China and the applicant said he intends to develop markets in Australia as part of a regional network to import and export goods to and from Australia, Malaysia, China, and Singapore.
11. In his written statement dated 1 October 2003 (T1), the applicant said that he learned in 2003 that his interests in joint ventures and companies in Australia, which he had left in the hands of others during his absence, had been operated without his knowledge. He referred to being removed from directorships and from the register of companies. The applicant has lodged a complaint with of the Australian Securities and Investments Commission (ASIC) and said he may take legal action. The complaint lodged with ASIC on October 2003 (exhibit A3 - annexure 13) referred to the companies Rimto International (Australia) Pty Ltd, Sato, and Tengway Pty Ltd (later known as Daytona).
12. In support of his claims that he fulfilled the obligations of his business visa the applicant provided the following information, summarised from his Statement of Facts and Contentions (exhibits A2 and A3) and oral evidence:
(a)The businesses with which the applicant is involved in Singapore are Ritmo International Pty Ltd, incorporated in 1994 (100% interest), and Golden Recognition Sdn Bhd (80% interest) (exhibit A3 - annexure 17). The applicant purchased a majority interest in Golden Recognition in March 2002.
(b)The applicant was the sole shareholder and director of Ritmo International (Australia) Pty Ltd, registered in 1997. The company purchased a factory building in Port Melbourne, the applicant investing $425,000 in cash. This was followed by a housing project which the applicant subcontracted to associates in Melbourne to develop when he left Australia in 2000. The applicant signed a personal guarantee with National Australia Bank in regard to the project.
(c)The applicant invested $200,000 in Sato, in 1998 or 1999, on the understanding that he would obtain a 50% shareholding. He designed a factory and office layout for Sato for a site at Box Hill and liaised with computer companies and attended computer trading markets. The applicant said that while he was overseas he liaised by telephone with Sato; was consulted on expansion plans for their Sydney operations; and, in July 2003, visited Sydney to support and advise the company’s newly appointed marketing manager.
(d)In July 2003, he located two forklifts for Sato from Japan. In August 2003, he arranged the shipment of computer parts from Taiwan for Sato.
(e)The applicant acknowledged that he could not demonstrate an ownership interest in a company or business in Australia, only those for his Singaporean companies and he acknowledged that Ritmo Impex Pty Ltd, was a company incorporated in Singapore. The applicant pointed out however that Ritmo Impex was registered in Australia in July 2003 and he intends that it will be the vehicle for distribution of the Ezee range, which will be manufactured in China by Shanghai Ritmo.
(f)He had considered purchasing a forklift company, Forklift Sales Qld, (about September 2003) but had decided it was not viable.
13. In a letter dated 16 March 2004 (exhibit A3 – annexure 10), Mr P Hannay, chartered accountant, confirmed the registration of Ritmo Impex in July 2003 and stated that the applicant was currently employed by the company, was paid wages from September 2003, and was developing the business in Australia. The business address of Ritmo Impex is Unit 8, 1645 Ipswich Road, Rocklea. The applicant said that Ritmo has submitted a trademark application to register the name Ezee in Australia on 31 March 2004 (exhibit A3 – annexure 11).
14. The applicant referred to sales of $210,000 of the Ezee range to the company Idea Technology Services Pty Ltd, in a purchase order dated 18 May 2004, and of $55,000 to Ozton Computer Technology Pty Ltd, in a purchase order dated 20 May 2004 (exhibit A3 – annexure 25). He acknowledged that all sales of the Ezee range have occurred in 2004, however he said that the product was in existence in 2003 and considerable time has been spent in previous years researching and testing the Ezee range. He said that he plans to produce the Ezee range in Australia but costs of production are lower in China. Under cross-examination concerning why one of the purchasers, Idea Technologies, has the same business address and telephone number as Ritmo Impex at Rocklea, the applicant said that because the Ezee range does not arrive in Australia until July 2004 he has no need for business premises and landline until then so he shares with Idea Technology.
15. With respect to the amount of time he has spent in Australia, the applicant acknowledged that he did not spend substantial amounts of time here however he said he had put his trust in his business associates to deal on his behalf in his absence and otherwise maintained telephone contact with Australia. He agreed that he had been in Australia for 171 days in the three year period. He provided copies of emails and telephone accounts to support his continued contact (exhibit A3 – annexure 7).
CONSIDERATION OF THE ISSUES
16. The Migration Act 1958 (the Act) relevantly provides as follows:
“134(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c) does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a)business proposals that the person has developed;
(b)the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g)business activity that is, or has been, undertaken by the person;
(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).
…
(10) In this section:
…
eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy;
…
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.”
17. Paragraph 4.5 entitled "What is a 'genuine effort'?" in the Migration Series Instruction (MSI) N°133 Visa Cancellation Under Subdivision G ‑ Cancellation of Business Visas (the Instruction), issued on 30 May 1996, contains the following factors to assist decision-makers in determining whether a genuine effort has been made under s134(2) of the Act:
“a.business proposal which is considered genuine, realistic and achievable;
b.formal contract with partners or joint venturers;
c.written evidence of detailed consultations with at least three business advisers (accountant, lawyer, bank/financial institution, State/Territory government business development office, Austrade, business/trade association);
d.physical presence in Australia for more than six months since first arrival as a Business Skills class migrant;
e.transferred to, and retained in, Australia at least 50% of the funds indicated as available for transfer within two years (under Factor 4 of the Business Skills Points test);
f.minimum A$100,000 or 10% ownership previously held by the person. If the person is no longer in business, the reasons for loss of ownership are also relevant
g.minimum $A100,000 business activity as indicated by turnover. This may include other business activity not considered “eligible business” but cannot include passive investment, eg, purchase of shares;
h.failure to comply with a notice for information under s137, ie mandatory monitoring of Australian address and return of survey forms.”
18. The applicant submitted that he satisfied the requirements of the legislation because, from the time he had a temporary visa, he had obtained a substantial ownership interest in an eligible business, and in addition had business interests in Singapore and Malaysia, namely Ritmo and Golden Recognition which have supplied goods to Australia. He submitted that his business interests require him to travel to locate products and oversee operations in several countries and that he has spent much time in recent years in researching a developing the Ezee range in Malaysia and China. He said that in these respects his case was similar to that of Re Lau and Minister from Immigration and Multicultural Affairs [2002] AATA 703. He also referred the Tribunal to the decision in Re Yam and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 as authority for looking at activities after the date of cancellation when considering the exercise of the discretion.
19. The applicant submitted that he satisfies s134(2)(a) and (b) of the Act by making genuine efforts to develop waterless technology products for Ritmo Impex and that in the future these would satisfy s134(10). He said that the technology for the Ezee range has been developed over a period of than three years and he referred to the extensive research phase in China as well as steps towards a launch date in September 2004 for the range in Australia. He said that he has made genuine efforts in an eligible business, Ritmo Impex, and he referred to his confidence in the Ezee range, and its benefits for water conservation in Australia.
20. The applicant referred to the factors preventing him from being more involved in business in Australia, including the death of his father, continuing illness of his mother who now lives with the applicant and his wife in Singapore, litigation that he was involved with in Singapore between 2001 and 2003, and the other events affecting Asian markets in the period. The applicant said that his future business plans with the Ezee range in Australia would be adversely affected by the cancellation of his business visa as it is a requirement for incorporation of a company in Australia that there be a resident director.
21. Mr Steele submitted that there was no evidence that the applicant had obtained a substantial ownership interest in an eligible business in Australia, or that he had utilised his skills to actively participate, at a senior level, in the day to day management of that business. He said that there was no evidence that the applicant had an ownership interest in any business at all in Australia and he referred to the tests in s134(3) as not being satisfied. He submitted that the evidence did not show genuine effort to be involved in day to day management, and that the applicant’s case rested solely on excuses for his lack of genuine involvement.
22. Mr Steele said that no weight should be placed on the evidence of recent sales of the Ezee range as these sales occurred seven months after cancellation of the visas and were questionable as the orders came from the same business address as the applicant is using in Australia. He submitted that the Ezee range is manufactured in China and there is no evidence, apart from anticipated sales in Australia, of any connection with Australia at all.
23. In reaching its decision the Tribunal takes into account the documentary and oral evidence and the submissions made at the hearing. The Tribunal took into account the cases of Re Tang and Minister for Immigration and Multicultural Affairs (2000) AAR 103 and Re Huangand Minister for Immigration and Multicultural Affairs [2002] AATA 656 in which the Tribunal held that the aim of the Act is to benefit business owners who settle in Australia and actively manage that business.
24. On the question of whether the applicant can establish an ownership interest (as defined in s134(10)) in an eligible business, the Tribunal accepts the respondent’s submission that the applicant cannot show such an interest at the time of cancellation. The Tribunal takes account of the applicant’s evidence that his business interests were wrongfully dealt with in his absence from Australia. His efforts to deal with this issue are at a preliminary stage, but he is unable to satisfy s134(1)(a) at the relevant time. The Tribunal takes account of the investments made by the applicant in Australia prior to being granted the visa, however there is no documentary evidence that assists in explaining what happened with the various investments, except the applicant’s assertions that his interest were fraudulently dealt with in his absence. The applicant’s lack of awareness about what was happening to his business interests in Australia supports the conclusion that he not utilising his skills in actively participating at a senior level in the day to day management of the business.
25. The Tribunal accepts the submission from Mr Steele that, at the date of cancellation of the applicant’s visa, the applicant’s lack of active participation also was shown by his absence from Australia between December 2000 and June 2003. Although the Tribunal accepts that the applicant may have maintained telephone contact with Australian business colleagues in Australia, on the evidence presented, that contact was minimal. The emails produced largely were confined to the second half of 2003 and related to a few sales on behalf of his Malaysian companies. In the period before to the cancellation of the business visa there is little evidence of activity with the Ezee range, apart from the applicant conducting research overseas. There was little evidence during the period from 2000 to 2003 that the applicant was undertaking any role that could be described as senior level management of the day‑to‑day operations of any business in Australia. Some machinery and computer sales occurred in the period prior to cancellation, however they are few, and amount to no more than sales by the applicant’s Singaporean companies to Australian companies. The evidence concerning his activities during the brief visits to Australia in the period, did not demonstrate that he was participating at a senior level in day to day management, even if the applicant had been able to demonstrate his interests in Sato, which he did not. The applicant is resident in Singapore and has spent little time in Australia. This leads the Tribunal to conclude that, for the purposes of the Act, the applicant “is not utilising his or her skills in actively participating at a senior level in the day‑to-day management of that business” (s134(1)(b) of the Act).
26. The applicant has failed to satisfy s134(1). Therefore, the Tribunal must now consider whether any of the grounds in s134(2) exist. When doing so, the Tribunal may take into account any or all of the matters listed in s134(3) which is relevant to both s134(2)(a) and (b). The Tribunal also takes into account the Instruction referred to in paragraph 18 above.
27. In assessing the applicant’s claims against the factors listed in the Instruction, the Tribunal takes into account that the applicant resides in Singapore, and has little claim under factors (a), (b) and (c) of the Instruction. There is little information showing business planning or proposals. The Tribunal noted that the draft corporate plan for Ritmo Impex referred to the year 2004 only, that is, after the date of cancellation of the visa. The applicant provided many product brochures and advertising material for the residential development in Melbourne, however there was little evidence of business proposals or written evidence of consultations with relevant professionals in the period after the applicant was granted the business visa.
28. The Tribunal takes account of the applicant’s presence of more than six months in Australia since his first arrival under the visa: s134(3)(d). However most of his time in Australia was prior to the family selling the North Balwyn address, and returning to Singapore in August 2000. This is then followed by a period of some two years where the applicant did not return to Australia. The Tribunal takes account of his personal and business reasons in 2001/2002 for remaining in Singapore, however the absence of activity related to Australian business in the period shows a lack of genuine effort.
29. There is no firm evidence to satisfy the matters under factors (e) and (f). The applicant had invested money in Australia for the development of the factory at Port Melbourne and the housing proposal prior to being granted the business visa, however it was unclear on the evidence submitted to the Tribunal what happened to those investments. The Tribunal accepts the submission of the respondent that the business activity undertaken in the period is minimal. The Tribunal took into account the applicant’s involvement in the research and development phases of the Ezee range, however the sales, even if genuine, have occurred after the date of cancellation of the visa. The Tribunal does not accept the applicant’s submission that his activities in regard to the Ezee range of products made his case similar to that of Lau where there were orders and shipments in place prior to the cancellation of the visa.
30. The applicant failed to comply with mandatory monitoring (factor (h)). The Tribunal took into account s134(3)(i), where a person no longer holds a substantial ownership interest or no longer participates in management. The Tribunal could make no findings on what occurred in regard to the dealings with the businesses in Australia that the applicant has referred to ASIC, as these have not been investigated and the applicant has taken no further action.
31. In assessing the applicant’s claims against the factors listed in s134(3) of the Act, the Tribunal finds that the applicant has not 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” as required under s134(2)(b) of the Act. On the available material, the Tribunal is satisfied that the applicant has not made the genuine efforts referred to in s134(2).
32. The Tribunal took into account the residual discretion raised in Kim v Ministerfor Immigration & Multicultural & Indigenous Affairs [2004] FCA 31 notwithstanding the applicant failing the tests in ss134(1) and 134(2) of the Act. In Kim, Kiefel J stated (at par 21):
“The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them.”
33. Having regard to the facts in the applicant’s case, even taking into account the problems he encountered in his businesses in Singapore, his efforts in Australia were minimal and he exercised no real oversight from a distance. The Tribunal took into account that the applicant’s father died before he was granted the business visa and considers his reliance on this as a humanitarian ground has less force than if the circumstance arose after he was granted the visa. The applicant had responsibilities under the visa. During the whole of the period from 2000 until after the visa was cancelled, the applicant did not raise any of the problems, such as his need to return to deal with issues arising from the death of his father, with the relevant authorities. It appears from the returned survey forms that he did not even advise his change of address.
34. The Tribunal took into account the various businesses in which the applicant had an interest and his submissions in regard to deceitful dealings by his former business colleagues, but is not persuaded to apply the residual discretion. The Tribunal had only the assertions of the applicant in regard to these matters and they appear to have come to his attention close to the time of his cancellation. The applicant referred to contemplating legal action but he has not taken it. When all the evidence is taken into account, and also taking into account that any activity that has a potential for connections with Australia includes the proposals for the Ezee range which occurred after the date of cancellation, the Tribunal considers that the evidence is not sufficient to warrant the exercise of the residual discretion. The Tribunal is satisfied that the discretionary power in section 134(1) of the Act to cancel the applicant’s business skills visa should be exercised, and the decision under review should be affirmed.
DECISION
35. The Tribunal affirms the decision under review.
I certify that the 35 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Member
Signed: S Oliver
AssociateDate of Hearing 9 June 2004
Date of Decision 6 July 2004
The Applicant appeared in person
Solicitor for the Respondent Mr Steele, Blake Dawson Waldron
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