Tio and Minister for Immigration and Multicultural and Indigenous Affairs

[2004] AATA 1268

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1268

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2004/110

GENERAL ADMINISTRATIVE DIVISION		)
Re		POH HOCK TIO

Applicant

And MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Ms Linda Savage Davis

Date30 November 2004  

PlacePerth

Decision The Tribunal affirms the decision under review.

.........(sgd L Savage Davis)............

Member

CATCHWORDS

MIGRATION – business skills visa subclass 128 – cancellation of visa – applicant’s failure to obtain a substantial ownership interest in an eligible business in Australia – active participation in day to day management at a senior level in the business – whether genuine effort made – discretion not to cancel visa

Migration Act 1958 sections 134, 137

Migration Series Instructions Nos 133  

Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299

Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54].

Hope v Bathurst City Council (1980) 144 CLR 1

REASONS FOR DECISION

30 November 2004 Ms Linda Savage Davis     

1. This is an application to review a decision of the respondent made on 27 February 2004 to cancel the applicant’s business skills visa (subclass 128) on the grounds that the applicant did not meet the requirements of s. 134 of the MigrationAct 1958 (“the Act”).

2. At the hearing the applicant was represented by Mr Brian Pilkington, Migration Agent and the respondent by Mr Arran Gerrard, an officer of the Australian Government Solicitor. Oral evidence was given at the hearing by the applicant The Tribunal received into evidence the documents filed pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 (T1 – T31 and S1 – S53) as well as the exhibits tendered by the applicant (Exhibits A1 and A2).

BACKGROUND

3.        On 30 November 2000 the applicant was granted a subclass 128 business skills visa. The applicant’s family were also granted visas as a consequence of the issue of the applicant’s visa. No applications for review of the decisions to cancel the applicant’s family’s visas are before the Tribunal at this time. The applicant first entered Australia on 21 December 2000.

4.         On 24 October 2002 the applicant was sent a Survey of Business Skills Migrant – 24 Months form (T24). This was subsequently completed and returned to the respondent (T20). Further information was received by the respondent on behalf of the applicant by the applicant’s representative Mr Brian Pilkington on 10 January 2003(T25).I On a letter dated 19 December 2003 the respondent notified the applicant of its intention to cancel his visa under s. 134 of the Act (T28). Mr Pilkington on behalf of the applicant provided further information to the respondent dated 30 January 2004 (T31). On 27 February 2004 a delegate of the respondent cancelled the applicant’s visa (T4). The applicant lodged an application to review the decision with the Tribunal on 26 March 2004.

LEGISLATION

5. Section 134 of the Act empowers the respondent to cancel a business visa in certain circumstances. The relevant provisions of the Act as applies to the applicant are sections 134(1), (2), (3) and (10) that provide as follows;

Cancellation of business visas

(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:

(a)has not obtained a substantial ownership interest in an eligible business in Australia; or

(b) is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or

(c)       does not intend to continue to:

(i) hold a substantial ownership interest in; and

(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;

an eligible business in Australia.

(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

(a)  has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b)  has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and

(c)   intends to continue to make such genuine efforts.

(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:

(a)  business proposals that the person has developed;

(b)  the existence of partners or joint venturers for the business proposals;

(c)   research that the person has undertaken into the conduct of an eligible business in Australia;

(d)  the period or periods during which the person has been present in Australia;

(e)  the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

(f)    the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

(g)  business activity that is, or has been, undertaken by the person;

(h)  whether the person has failed to comply with a notice under section 137;

(i)    if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:

(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and

(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).

(3A)Subject to section 135, the Minister may cancel an investment-linked visa (other than a family member's visa), by written notice to its holder, if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.

…

(10)      In this section:

business visa means:

(a)  a visa included in a class of visas, being a class that:

(i)has the words "Business Skills" in its title; and

(ii)is prescribed for the purposes of this paragraph; or

(b)  a visa:

(i)to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and

(ii)

that is of a kind prescribed for the purposes of this paragraph; or

(c) a return visa that is granted to a person who is or was the holder of a business permit or business visa;

that is or was granted on or after 17 February 1992.

designated investment has the meaning given by the regulations.

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.

established business in Australia visa means a business visa a criterion for whose grant:

(a)  relates to the applicant having an established business in Australia; or

(b)  is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).

family member's visa means a business visa held by a person:

(a)  who is or was a member of the family unit of another person who held a business visa; and

(b)  who would not have held the business visa if he or she had never been a member of the family unit of the other person.

investment-linked visa means a business visa a criterion for whose grant:

(a)  relates to the holding of a designated investment; or

(b)  is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).

member of the family unit has the meaning given by the regulations.

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.

relevant designated investment, in relation to an investment-linked visa (other than a family member's visa), means the designated investment that was, in deciding to grant the visa, regarded as satisfying the criterion referred to in paragraph (a) of the definition of investment-linked visa.

return visa has the same meaning as in the regulations.

6. Section134(3) of the Act sets out the matters the respondent may take into account in determining whether a person has made the “ genuine effort “ referred to in section 134(2). In addition the Migration Series Instructions Nos 133 (MSI), at paragraph 4.5.1 lists factors to be taken into account by decision-makers in considering whether a genuine effort has been made. They are as follows;

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 A$100,000 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 s 137, ie mandatory monitoring of Australian address and return of survey forms

MR TIO’S EVIDENCE

7.        The applicant experienced some difficulties in understanding and responding to questions whilst giving evidence but when asked on a number of occasions, said he did not require an interpreter. He told the Tribunal that he understood that he had to invest and develop a business to satisfy the requirements of his visa. He had spent the first two years doing research into agricultural opportunities because he had worked for 22 years in agriculture in Indonesia. He said he investigated the viability of growing and marketing almonds by talking to a friend who ran a business making cakes and biscuits using almond products. His friend Ben conducted this business from his own home. He had not spoken to anyone else who grew and marketed almonds or anyone in government departments. Whilst nothing had come of his efforts it was an avenue he said he would pursue in the future.

8.        The applicant said when he realised that he did not have enough information to pursue an agricultural investment he decided to go into property although he had no previous experience in property. He made the decision because property development was doing well in Australia. On 18 December 2002 the applicant invested $100,000 into Realsun Pty Ltd (Realsun) which resulted in a 6.5% share in Realsun. He also became one of its directors. He hoped to make one dollar return for every one dollar of his investment. The other directors were Brian Pilkington and Eddy Wijono. He said it was always his intention to become involved in Realsun on a day to day basis. This has not been possible to date for a number of reasons including his obligations to his employer and family in Indonesia. In regard to his employment in Indonesia he explained that he had spent 22 years with the same company and had helped the company develop palm oil. He felt as the assistant plantation director that he had to stay. He continued to work fulltime for this company and this was his primary source of income. Secondly during the initial stage Realsun’s property development activities there were long periods of delay whilst subdivision and building approvals were obtained. Exhibit A1 was tendered on the applicant’s behalf in support of his assertion that he intended to move and settle in Australia later in 2004.

9.        The applicant was referred to his witness statement (Exhibit A1) and confirmed its contents were correct. In reference to paragraph two of his witness statement he initially agreed that the decision to move to Australia and settle here permanently was made when he received notification that his visa had been cancelled. The applicant then said it was made earlier in 2004. Later he confirmed that the decision was made at the time he received notice that his visa had been cancelled. The applicant said he planned to move in November or December 2004. Although he has not yet resigned form his current employment he had spoken to his boss. The applicant said his boss does not want him to leave. The applicant said he and his boss were still talking about things.

10.      The applicant was also referred to the first paragraph of his witness statement (Exhibit A1). He said that it meant that in the future when he moves to Australia he will be involved in the day to day managing of Realsun. Currently he oversees the business by way of emails, correspondence and telephone calls. The applicant said he spoke to Mr Pilkington about once per week for 10 minutes to ask how the project was going and stay up to date on the financial arrangements. The applicant confirmed that he attended the meeting of 18 December 2002 and was allocated 100,000 shares at $1 per share in Realsun. That was the main business carried out at that meeting.

11.      The applicant, when asked what he knew about Goodland Properties Pty Ltd (Goodland), said he did not know much. He knew that Goodland would manage and do everything involved in developing the land that Realsun had bought at Wanneroo. He said his role was to oversee what Goodland did. The applicant said he receives reports every 3 months such as the report of 22 January 2004 (T31/204 – 245). After receiving a report he would raise any queries or concerns he had. The applicant said the document “Information Memorandum On a Project to Construct a 49 Unit Development at Lot 2 Wanneroo Rd, Madeley” had been produced by Mr Pilkington. Initially he said it had been produced before he became a director and shareholder in Realsun but subsequently said he could not recall when it was produced.

12.      The applicant agreed he had become a director of Realsun on 18 December 2002. He told the Tribunal that Realsun had 6 directors. He could only recall the names of three of the directors, that was himself, Brian Pilkington and Eddie Wijono. He agreed that Mr Pilkington and Mr Wijono are also the directors of Goodland. Tasks such as the feasibility studies undertaken by Goodland were done by Mr Pilkington and Mr Wijono. He was not certain who signed the contract for the purchase of land at 258 Wanneroo Rd, but agreed it was not him. He agreed that he was not involved in the day to day management of Realsun at the moment, though said it was his future intention. The applicant told the Tribunal that the property at 258 Wanneroo Rd had been cleared and bricks and building materials were being delivered.

13.      The applicant said he was not involved in any other business in Australia. In Indonesia he works two months on and then has 2 weeks off. He tries to come to Australia during those two weeks off. This year he has spent about 10 days in April, I week in August and arrived on 3 September again. His trip in August was cut short due to bereavement. He told the Tribunal even when he moves to Australia he will still go back to Indonesia occasionally and has had some discussion with this employer about doing ongoing consulting work when he moves.

FINAL SUBMISSIONS

Applicant’s submissions

14.      On behalf of the applicant it was submitted that;

.           The applicant at all times understood his visa obligations, which had been explained to him at the time of his original application. The applicant had however found it difficult to find a satisfactory and profitable business as many people entering Australia on business visas did. He had visited Australia on a number of occasions and familiarised himself with banking, taxation and the lifestyle.

.          The applicant had made a genuine effort to establish a business as evidenced by his enquiries about the cultivation and use of almond products.

.          The applicant had subsequently made a substantial investment of $100,000 in Realsun because he assessed it to be a profitable venture. Realsun was an “eligible business” in accordance with s. 134(10) (b) and (f) of the Act because up to 50 people would be employed when the building started. The entire project had been presold as evidenced by Exhibit A2 and so had and would contribute to the housing industry within Western Australia.

.          The applicant was determined to settle in Australia but the transition had been difficult because of his responsibilities to family and his employer in Indonesia.

.          The applicant did not manage Realsun on a micro level but as a director was responsible and did oversee the project it was involved in. It was submitted that now the property development at 258 Wanneroo Rd was progressing he intended to move to Australia and become involved on a day to day basis. In addition he would look again at the prospects of a business in almonds.

15.      In conclusion Mr Pilkington submitted on the applicant’s behalf that the there was not adequate guidance from the respondent department for visa holders and their advisers. Mr Pilkington contended that terms such as “eligible business" were ill defined or only recently defined. In addition factors to be taken into account by decision makers in considering whether a genuine effort has been made in the MSI at paragraph 4.5 were only recent, that is published and available in the last 2 years and since the applicant applied for his visa. He submitted that policy had changed dramatically since the applicant had applied for his visa.

Respondent’s submissions

16.      Mr Gerrard referred the Tribunal to the Statement of Facts and Contentions of the Respondent filed on 30 July 2004 and made the following additional submissions;

.          The respondent concedes that the applicant has a substantial ownership in a business being the purchase of 100,000 ordinary shares on 18 December 2002, amounting to a 6.5% holding in Realsun.

.          The business was not however an “eligible business” as it failed to satisfy any of the criteria under s. 134(10) of the Act. In particular it was submitted that there was no evidence that Realsun satisfied s. 134(10) (b) or (f) of the Act. The Tribunal was referred to Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA at 26 and it was submitted that there was no evidence that the project at 258 Wanneroo Rd had anything more than a marginal impact on the creation or maintenance of employment in Australia, or had or would result in an increase in the commercial activity and competitiveness within sectors of the Australian economy.

.          The applicant it was submitted had conceded that he was not involved at a senior level in the day to day management of Realsun and the documented evidenced showed that Goodland was the complete project manager (T25 177-179). The applicant’s evidence that he attended a meeting on 18 December 2002 and one other meeting, as well as having weekly 10 minute telephone calls to Mr Pilkington supported the conclusion that the applicant was an investor with a significant interest who wished to be updated, not that he was participating actively at a senior level in the day to day management. The Information Memorandum (T25/152–194) between Realsun and Goodland was evidence that it was Goodland who has, and will, undertake any efforts in regard to the property development (T25/177-179). It was submitted there was no evidence further projects would be undertaken by Realsun and in fact one of the services Goodland has contracted to do was wind up Realsun and deregister it on final completion of the project (T25/179). It was submitted that enquiries the applicant made about almonds to his friend Ben were not evidence of “genuine effort” as required by the Act.

.          In conclusion it was submitted that the decision to cancel the applicant’s visa should be affirmed because he has failed to satisfy the requirements of s. 134 of the Act.

CONSIDERATION AND DECISION

18.      In reaching its decision the Tribunal took into account the documentary and oral evidence as well as the leading authorities and relevant legislation.

19.      In cases of cancellation of a visa the Tribunal must consider whether the decision to cancel was the correct and preferable decision at the time of the cancellation decision (Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54]. It is however open to the Tribunal to examine events that occurred after the date of cancellation to see whether they throw light on the circumstances at the time of cancellation

20. It is not in dispute that on 18 December 2002 the applicant obtained a 6.5% interest in Realsun Pty Ltd by virtue of the acquisition of $100, 000 worth of ordinary shares in Realsun (the business). It is conceded by the respondent and is accepted by the Tribunal that the applicant has acquired an “ownership interest” within the meaning of s. 134 of the Act and that it can be said to be substantial.

21. The first question then which must be considered is whether the business is an “eligible business” as set out in s. 134(10) of the Act. This is not a recent addition to the Act as submitted on behalf of the respondent. The provision dealing with cancellation of business permits and business visas was inserted into the Act in 1992. The act was subsequently renumbered and amended in 1994 (Migration Legislation Amendment Act 1994 (no.60)), and s 134, “Cancellation of Business Visas’ was inserted. Section 134(10) of the Act which sets out what is an “eligible business” has not been amended since it was inserted in the Act in 1994. Relevant to this matter are the criteria in s. 134(10) (b) and (f) of the Act. Hope v Bathurst City Council (1980) 144 CLR 1 is authority that carrying on a business should be understood as an activity undertaken on a continuous and repetitive basis for the purpose of profit. The Tribunal notes however that the business does not have to reach a threshold of size or turnover. The Tribunal accepts that the development at 258 Wanneroo Rd will create employment. however there is no evidence before the Tribunal that Realsun intends to or will embark on any further property development. The Tribunal has been referred to and concurs with the comments of Deputy President Wright QC in Ng (supra at 26) that:

“…the provision of “employment” in the sense of providing limited fee earning opportunities to architects and real estate agents and the provision of a one off building contract…is not the “creation or maintenance of employment in Australia contemplated by the s134(10) definition of “eligible business” in paragraph(a).”

20. The conclusion that this is a one off project is reinforced by the “Information Memorandum” documenting the obligations of Goodland the project managers which includes that at the end of the project “Goodland Properties Pty Ltd will “Arrange to wind-up the company and deregister it on final completion of the project” (T25/179). As a one off project the Tribunal is not satisfied that there is any basis to describe Realsun’s business activities as resulting in an increase in commercial activity and competitiveness within sectors of the Australian economy in accordance with s 134(10)(f) of the Act.

21. Even if the Tribunal were satisfied that the applicant has obtained a “substantial interest” in an “eligible business”, the applicant is still required to demonstrate that he utilises his skills “in actively participating at a senior level in the day to day management of the business” (s 134(1)(b) of the Act). The evidence does not support this conclusion, nor does the applicant assert he is involved at a senior level in day to day management. The applicant was completely honest with the Tribunal. Although on a number of occasions he said this was his intention when he moved to Australia, he told the Tribunal that he is kept informed primarily by reading three monthly reports and having a weekly phone conversation of some 10 minutes with Mr Pilkington. The applicant could not even recall the name of the other directors on Realsun, which is further evidence of his minimal involvement. The evidence is that his attention is understandably focused on his full time position as an assistant plantation manager, a position he still has not resigned from despite his stated intention to move permanently to Australia before the end of this year. Accordingly the Tribunal has concluded that the applicant has not been actively participating at a senior level in the day to day management of Realsun.

22. Notwithstanding this the applicant’s visa must not be cancelled if he has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and intends to continue to make such genuine efforts (s 134(2) of the Act). Matters that may be taken into account are set out in s 134(3) of the Act. Guidance may also be sought from the MSI. The MSI were first gazetted on 30 May 1996 and the notes referring to what decision makers may take into account to guide them in the interpretation of paragraph 4.5.1 have not been amended since that date. They were available when the applicant completed his application for a business skills visa with the assistance of Mr Brian Pilkington (S6/272) which was dated as received on 25 July 1999 (S6/256). Having concluded that Realsun is not an eligible business the Tribunal considered the applicant’s efforts in regard to a establishing an almond business. The discussions the applicant had with his friend Ben in this regard are quite obviously insufficient to satisfy s 134(2) of the Act. His efforts could best be described as negligible and there is not a single piece of documented evidence to support his attempts to explore this possibility.

23. The Tribunal is not satisfied that the applicant has acquired a substantial interest in an eligible business, utilised his skills in actively participating at a senior level in the day to day management of an eligible business and has either made a genuine attempt to do those things or intends to continue to make such genuine attempts in accordance with s 134 of the Act. This does not however result in the automatic cancellation of the applicant’s business skills visa. There remains a discretion under s 134 of the Act as to whether to cancel however the Tribunal finds there is no basis upon which the discretion to cancel should not be exercised.

24. In accordance with s 43 of the Administrative Appeals Tribunal Act 1975 the Tribunal therefore affirms the decision under review.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Linda Savage Davis

Signed:         ..............(sgd V Wong).................................
  Associate

Date/s of Hearing  6 September 2004
Date of Decision  30 November 2004
Counsel for the Applicant         Mr B Pilkington
Counsel for the Respondent     Mr A Gerrard
Solicitor for the Respondent     Australian Government Solicitor