Tio and Ors and Minister for Immigration and Multicultural and in Digenous Affairs
[2004] AATA 29
•16 January 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 29
ADMINISTRATIVE APPEALS TRIBUNAL ) N2002/909
)N2002/917
GENERAL ADMINISTRATIVE DIVISION ) Re TJHEN KOK TIO & ORS,
TONY SOEGIHARTOApplicant
And
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal MS N BELL Date16 January 2004
PlaceSydney
Decision The Tribunal affirms the decisions under review. [Sgd]Ms N Bell
Member
CATCHWORDS
IMMIGRATION – Primary Applicants have a substantial ownership in the business – Primary Applicant’s participation in day to day management does not take place in Australia –– Primary Applicants have not indicated of any intention to settle in Australia – Primary Applicants have not made a genuine effort to use their skills to actively participate at a senior level in the day to day management of the business – business visas cancelled on basis that each had not obtained substantial ownership share in eligible business and each had not utilised his skills by actively participating at a senior level in the day to day management of the business – cancellation of holder of secondary visa as would not amount to extreme hardship – decision affirmed
Migration Act 1958, s 134
Tang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997
Huang v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656
Harlim v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767
Lau v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703
Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299
Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54
Dhanjal and Minister for Immigration and Multicultural Affairs [2003] AATA 1120
Re Wang and Minister for Immigration and Multicultural Affairs [2002] AATA 961
Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899
Re Chen & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 628
REASONS FOR DECISION
16 January 2004 MS N BELL 1.The applications before the Tribunal by business partners Mr Tjhen Kok Tio and Mr Tony Soegiharto (“the Primary Applicants”) are closely connected. The Primary Applicants were granted subclass 127 visas in February 1999 and each had his visa cancelled on 5 June 2002. The reasons of the Minister for Immigration and Multicultural and Indigenous Affairs (“the Respondent”) for the cancellations and the evidence pertinent to each of the applications are common to each. The applications were therefore heard together and this statement of reasons canvasses both applications and decisions under review.
2.The Tribunal also heard the application Mr Hwee Piao Tio, the son of Mr Tio and the holder of a visa secondary to that of his father. Mr Hwee Piao Tio has lived in Australia since 1996 and claimed that he would suffer extreme hardship if his visa were cancelled consequent upon the cancellation of his father’s visa.
3.The Primary Applicants are businessmen living and conducting businesses in Indonesia. Each has, among other interests, an active business in the paper manufacturing industry in Indonesia. They are partners in a chemical manufacturing business in Indonesia called PT FINEXCO PRIMA. As equal partners with a third, silent partner, they registered a company in Australia, Great Ocean Pty Ltd (“Great Ocean”) in 1999. The aim of Great Ocean is to source raw materials, including chemicals and paper machine clothing, relevant to the manufacture of paper products, in Australia and obtain markets for those products in Indonesia.
4.The Respondent decided to cancel each of the Primary Applicants’ business visas on the basis that each had not obtained a substantial ownership share in an eligible business in Australia and each had not utilised his skills by actively participating at a senior level in the day to day management of that business. These objections stem from the terms of section 134 of the Migration Act 1958 (“the Act”) which provides relevantly:
"134 - Cancellation of business visas
(1)Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), 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).
….
(4)Subject to subsection (5) and to section 135, if:
(a)the Minister cancels a person’s business visa under subsection (1) or (3A); and
(b)a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and
(c)the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;
the Minister must cancel the other person’s business permit or business visa by giving written notice to that person.
(5)The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.
…
(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.”
5.Therefore the issues to be considered in these applications are:
a)Whether the Primary Applicants have each obtained a substantial ownership interest in an eligible business in Australia; and
b)If so, whether they have each utilised their skills in actively participating at a senior level in the day to day management of the business; and
c)If a) or b) are not satisfied, whether the Primary Applicants have each made a genuine effort to do a) and b) above; and
d)If c) above is answered in the negative whether Mr Hwee Piao Tio would suffer extreme hardship were his visa to be cancelled.
Have the Applicants each obtained a substantial ownership interest in an eligible business in Australia?
6.The term “eligible business” is defined in section 134(10) as including a business that will result in the development of links with the international market or the export of Australian goods or services.
7.The Primary Applicants gave evidence that the business of Great Ocean is the export of Australian products, relevant to the paper manufacturing industry, to Indonesia. Exhibit A2 in the application by Mr Soegiharto and Exhibit A4 in the application by Mr Tio is a bundle of business documents relating to Great Ocean, summarised by a statement of business activity on the first page. It was agreed between the parties that that statement is an accurate reflection of the business conducted by Great Ocean in the period of the statement from 15 November 2001 to 23 May 2003. All purchase orders in the documents are made out to Hyuck Australia, an Australian manufacturer of paper products, and all invoices are made out to Indonesian companies. I am satisfied, on the basis of this evidence that Great Ocean engages in the export of Australian goods. On this basis, Great Ocean meets the definition, in section 134(10), of an eligible business.
8.As to whether the Primary Applicants have a substantial ownership interest in Great Ocean, the evidence of the Primary Applicants, which I accept, is that they each own a one third share with a silent partner. However, Great Ocean has negligible business and assets. The statement of business activity shows that as at 21 May 2003, Great Ocean had a surplus of amounts invoiced over amounts paid by it for orders of just $6,504. As at the date of cancellation of the Primary Applicants’ visas, that surplus was just $118. According to Mr Tio the business’ capital comprises only very basic office equipment (computer, telephone and facsimile machine).
9.However, while the business and assets of Great Ocean are meagre, a one third share of a business is a substantial ownership interest; the word “substantial” in section 134(1)(a) of the Act relating as it does to the words “ownership interest” rather than to the words “eligible business”.
10.It follows, then, that the Primary Applicants each have obtained a substantial ownership interest in an eligible business in Australia.
mr tio’s evidence
11.Mr Tio’s evidence was that he has considerable experience in the manufacture and supply of chemicals used in the paper industry and that he recognised a potential for the export of Australian chemicals and fabric, used in the manufacture of paper, to Indonesia. He also considered that Australia had a geographical advantage in relation to Indonesia, which made prices competitive.
12.Mr Tio gave evidence that he visited Australia twice prior to applying for his business visa in 1997 and that he met with a representative of Hyuck Australia on both occasions to discuss the export potential of that company’s products. He said that, at the time he was granted his visa, business conditions were good in Indonesia but then the Asian economic downturn resulted in race riots and insecurity. This meant that by the time his visa was granted in early 1999, his business with Mr Soegiharto had contracted by 30 – 40%, other parts of the economy in Indonesia had suffered a downturn and it was very hard to obtain orders.
13.Mr Tio gave evidence that his role in the Great Ocean business is and was to obtain orders from Indonesian companies and he named four such companies with whom he said he was in constant contact. He said he concentrated on these companies because he knew them to be reliable and willing to consider imports, in contrast to others he considered to be smaller and not reliable payers. He also attempted to interest a Thai company in importing Australian products but was unsuccessful.
14.Mr Tio described the purchase and sale process as follows:
§ Mr Tio obtains purchase orders from customers and forwards these to Mr Soegiharto;
§ Mr Soegiharto forwards the orders to the supplier in Australia;
§ After the acceptance of the order, Great Ocean advances the contract price (including insurance and carriage) to the Australian supplier. Either Mr Soegiharto or Mr Hwee Piao Tio residing in Australia, remits the funds by telegraphic transfer. When there are insufficient funds in Great Ocean’s bank account, funds are transferred from Indonesia;
§ The Australian supplier arranges for shipping; and
§ Great Ocean is paid by the customer in Indonesia, generally within 30 – 60 days after receipt of the goods.
15.Mr Tio made it clear that he discusses Great Ocean business with Indonesian paper manufacturers in the context of his dealings with them for his Indonesian business. He said there is no real distinction in his representing his Indonesian business and representing Great Ocean and, because the product that his Indonesian company manufactures is entirely different from the products imported from Australia by Great Ocean, he can seek to satisfy their requirements either from domestic or Australian sources.
16.He estimated that he would talk to his clients about once or twice per week about Australian products, always in the context of his discussions about his Indonesian company’s products. He said that his first order from Huyck Australia was in November 2001 and that he had approached other Australian companies as well but has only succeeded in an arrangement with Hyuck.
17.Mr Tio ‘s evidence was also that he communicates by telephone and in face to face meetings with Mr Soegiharto in Indonesia about Great Ocean business. He said he also has discussions with Mr Soegiharto about possible other Australian products that could be exported, for example dye products for paper manufacture.
18.Mr Tio conceded he only spent 28 days in Australia up until the time his visa was cancelled. He said that the Great Ocean business can easily be conducted from Indonesia. It requires no employees in Australia and his son, who resides here, is available to assist with providing payments to Hyuck Australia and with customs inspections. He said in the long run he would like to live in Australia and he expects Great Ocean to become profitable in about two years.
mr soegiharto’s evidence
19.Mr Soegiharto described himself as having a background in the sale of specialty chemicals, equipment, parts and consumable products to various industries and experience in the paper industry since 1985. He gave similar evidence about his application for a business visa, the effects of the Asian economic downturn, his role in the business of Great Ocean relative to that of Mr Tio and the purchase and sale process of Great Ocean.
20.Mr Soegiharto also listed some 10 additional companies, most of whom he has met with in Australia, from whom he has sought products for export to Indonesia. His evidence was that he continues to attempt to source such products.
21.Mr Soegiharto also said that when Great Ocean receives a purchase order either he or his secretary contacts the supplier in Australia from Indonesia. He conceded that he had only spent 25 days in Australia from the grant of his business visa to the date of its cancellation but maintained that his role in the business can be performed from Indonesia. He said that in a busy week, with respect to Great Ocean, he would spend approximately 10 hours on Great Ocean business and in a quiet week he would invest about one to three hours.
22.Mr Soegiharto said that he has negotiated with Hyuck Australia a 2% commission for Great Ocean on all sales of its products.
23.Mr Soegiharto said he had agreed to give Great Ocean five years to test its profitability. He said he is now prepared to give it a further five years.
Are the Applicants utilising their skills in actively participating at a senior level in the day to day management of the business?
24.The Tribunal had regard to the decisions of the Tribunal in Tang v Minister for Immigration and Multicultural and Indigenous Affairs [2000] AATA 997, Huang v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 656, Harlim v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 767, and Lau v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 703.
25.In Tang (supra) Deputy President McMahon said:
“19. Apart from these activities, nothing much more has been done by anyone for Tiproll Pty Limited. What activities have taken place have been carried out by the Applicant's sister-in-law. He himself has spent very little time in this country. He arrived on 18 October 1996 and left 12 days later. He did not return to Australia until 21 December 1997, leaving on 28 December 1997. A further year passed before he returned on 24 December 1998, returning to Hong Kong on 30 December 1998. The visits over Christmas 1997 and Christmas 1998 were to see relatives. He travelled with his wife and family. To choose to come to Australia two years in succession over Christmas indicates that the visits could not have been for the purpose of establishing export connections in the aluminium industry. Mr Tang did not visit Australia again until 9 February 2000, staying for five days and returning on 13 February. It was on this visit that he inspected the premises of Capral Aluminium Limited for the first time. He did not return to Australia until 5 November 2000, the day before the hearing in this Tribunal.
20. On these facts, it seems to me that Tiproll Pty Limited is not carrying on a business and its activities are therefore not an eligible business. The reference in subparagraph 134(1)(b) to the "day-to-day management of that business" indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council (1980) 144 CLR 1 Mason J considered that the use of the phrase "carrying on the business", as a qualifier of the noun "business", required that there be a commercial enterprise in the nature of a going concern "that is activities engaged in for the purpose of profit on a continuous and repetitive basis". Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Limited. It has had one export transaction to a company associated with Mr Tang. The evidence relating to lanolin and roller shutters does not add to the perception of a business requiring day-to-day management. In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.
21. If I am wrong in my understanding of this term, it is certainly clear that Mr Tang has not used his skills in the day-to-day management of that business. Clearly the type of remote association which he has had with Tiproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business.”
26.The circumstances in Tang (supra) contrast with the circumstances of this application as in the present application the business in question is an eligible business, within the meaning of the Act. However, the Applicants have not settled in Australia and have spent very little time here.
27.In Huang (supra) Deputy President Muller (as he now is) said:
“11.From the date when the Business Skills visa was granted to Fa-Chen Huang, 25 August 1997, until the date of cancellation, 23 November 2000, the activities of Lin Sun produced a profit of about $5,000 and returned on average about $10 per week to Fa-Chen Huang. One of the most significant factors to be taken into account in determining whether or not an activity amounts to carrying on a business is whether or not there is an intention to make a profit. If an activity has not and is not likely to result in a reasonable return for energy and money expended, then it is more likely than not that the person so engaging in the activity does so for motives other than the carrying on of a business. The activities carried on in the name of Lin Sun have been virtually revenue neutral. The Tribunal is not satisfied that Lin Sun was a company that was carrying on business. If Lin Sun was carrying on business it was doing so in Taiwan, certainly not in Australia. The act of ordering Australian goods from a base in Taiwan does not constitute the management of a business in Australia.
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.”
28.In the present application, the business in question operates in Australia as an eligible business. However, the Applicants’ participation in day to day management does not, generally, take place in Australia.
29.In Harlim (supra) the Tribunal said:
“29. Section 134(1)(b) refers to whether the visa holder is utilising his or her skills in actively participating at a senior level in day-to-day management of that business. For business such as Vanwin, the day-to-day management involved in developing an export market for Australian metering systems will involve personal representations in Indonesia, securing orders and facilitating the provision of technical support by Energex. The Tribunal accepts the applicant's evidence and Dr Chan's evidence, that the applicant has substantial experience in Indonesia and has applied his knowledge and contacts consistently and continuously in actively promoting the business plan developed by Energex.
30. In Hope v Bathurst City Council (1980)144 CLR 1 the Court held that carrying on a business denotes activities for the purpose of profit undertaken on a continuous and repetitive basis, even if the business is conducted in a small way. Therefore the Tribunal finds that the relatively small turnover reported by Vanwin does not necessarily prevent the applicant from satisfying the indicators in MSI N°133. It is clear that the management of Vanwin is undertaken almost entirely by the applicant on behalf of the company, so the Tribunal finds that he participates at a senior level and s134(1)(b) does not apply.”
30.In Lau (supra) the Tribunal said:
“33. The day-to-day management of a company like Corcom, involved in developing an export market for Australian grocery goods in South East Asia, will involve researching products, securing orders and suppliers, transacting shipping. It will also involve ideas and planning. This is clearly evidenced by the applicant's activities in this case. The applicant had substantial commercial experience in Malaysia on which to develop Corcom as an export vehicle for sale of Australian goods into Asia. He developed Australian contacts through the proposed venture with Unipole and (T22, exhibit A31). While some of the activities undertaken by the applicant might be viewed as unsophisticated, there is nothing to suggest that they were inappropriate for the nature of the proposed business. The activities relied on the applicant's considerable experience directly in this field in the Asian market and on his business acumen. There may not be extensive notes, or records of activity occurring every day. As Ms McKenzie submitted, the diary notes showed only entries 30 days. However, the use of the term day-to-day management does not require that that activity be recorded every day, and the input at a senior level by someone of the experience of the applicant will often be intangible.
34. The Tribunal is satisfied that the applicant has substantial commercial experience in the field and has applied his knowledge, contacts and business acumen consistently and continuously in the development of Corcom's business. The Act requires that the focus be on participating at a senior level in the day-to-day management of that business. This does not require that comparison be made with senior levels of management in another business or in business generally. It is clear that the management of the Corcom is almost entirely undertaken by the applicant on behalf of the company: he is its senior management. The Tribunal is, therefore, not satisfied of the matters set out at s134(1)(b); that is, that he is not utilising his skills in actively participating at a senior level in the day-to-day management of Corcom.”
31.The Respondent also referred the Tribunal to the decision of Deputy President Wright in Ng v Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299 in which the Deputy President said:
12. The question whether or not an individual is participating in the day to day management of a business in Australia involves two principal issues:
(1) To be carrying on a "business" it must be shown that the relevant undertaking is a commercial enterprise in the nature of a going concern involving activities being pursued for the purpose of profit on a continuous and repetitive basis (Hope v Bathurst City Council (1980) 144 CLR per Mason J at p.89). See also Tang and Minister for Immigration and Multicultural Affairs (2000) AATA 997 at paragraph 20; Huang and Minister for Immigration and Multicultural Affairs (2002) AATA 656 at paragraph 11; Ong and Minister for Immigration and Multicultural Affairs (supra) at paragraph 34(a).
(2) The relevant business must be carried on "in Australia". See Huang (supra) at paragraph 12 and Ong (supra) at paragraph 29 - 33 where Senior Member M D Allen said:
"29. At the outset the question arises whether the applicant was participating in the business in Australia. In Re Huang and Minister for Immigration and Multicultural and Indigenous Affairs (2002) AATA 656, Senior Member Muller a she then was said at paragraph 12:
´Not only must he 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.'
30. The applicant submitted that it was not necessary for the applicant to participate in the business in Australia and this submission received some support from the decision of Deputy President McMahon in Re Tang and Minister for Immigration and Multicultural and Indigenous Affairs (2202) AATA 997 where at paragraph 25 he said:
´There is no evidence that the applicant actively participates at a senior level from overseas.'
31. Reference can be made to the Second Reading Speech of the Minister for Immigration introducing the Migration Amendment Bill (No 2) 1992 which introduced the new section 134 into the Migration Act 1958. It is clear from that speech (Hansard, House of Representatives, 7 May 1992 at p2678) that it was understood that migrants who arrived in Australia on a business skills visa would remain resident in Australia, That such a purposive interpretation of the legislation can be adopted cannot be doubted: see Spiegleman CJ in Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc & Others 48 NSWLR 548 at 575:
´The Australian law of statutory interpretation requires a court to consider context in the first instant, not merely after ambiguity is identified ....' (and see the authority cited at 575-6)
31. I am therefore satisfied that Senior Member Muller in Re Huang was correct and it is the business activities of the applicant in Australia that must be examined, not his business activities whilst he is residing overseas.
32. In this matter it is clear that the applicant did not exercise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia at the time of cancellation of his visa."
12. This does not mean that the visa holder is confined to working within the geographical limits of Australia. Obviously overseas trips may be a vitally important part of fostering and expanding the business. However the Act does not contemplate an absentee entrepreneur directing operations from afar. Direct "hands on" involvement within the Commonwealth of Australia is essential. A business skills visa carries with it the right of permanent residency in Australia during its existence and by departing from Australia and joining family members as secondary applicants they too can obtain this privilege. It would be strange indeed if an overseas entrepreneur could secure these advantages by directing business operations from abroad within a day or two of his first arrival and never setting foot in this country again.”
32.The Tribunal also referred to the decision of Deputy President Handley in Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54 in which the Deputy President found that an applicant, experienced in business in Hong Kong, who had not visited Australia other than for a holiday, was nevertheless making a genuine effort to utilise her skills in the management of the relevant business in satisfaction of section 134(2)(b) of the Act.
33.In Dhanjal and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1120 the Tribunal said:
“82. During the relevant period Mr Dhanjal only spent 3½ months in Australia and he spent the rest of time in Kenya.
83. I accept that the very nature of an export business requires a significant part of the business, especially marketing, to take place overseas. The requirement to be overseas is inherent in the nature of such a business. There is no bar in the legislation to a visa holder being overseas as long as they are managing the business in Australia.
84. Mr Turner submitted that it was not necessary for Mr Dhanjal to participate in the business while physically present in Australia. While there is nothing in the Act precluding an applicant from travelling overseas, it was held in Re Tang v Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 997 at paragraph 21:
"The Act is intended to benefit business owners who settle here (in Australia) and actively manage that business. "
85. Mr Turner's submission however does receive some support in Re Tang where, at paragraph 25, the Tribunal considered whether there had been active participation in the business from overseas.
86. As to whether a visa holder must participate at a senior level in the day-to-day management of the Australian business in Australia I also considered Re Huang where the Tribunal said:
"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. (My emphasis)"
87. In Re Huang however all of the company's business transactions had been organised from Taiwan. For most of the transactions, Mr Huang had "attached himself" to other companies which have had exclusive rights to market the products he has dealt with. In this case however Mr Dhanjal had arranged his partner Sandeep to transmit orders to Jasdip in Australia because he, Mr Dhanjal, does not know how to use a computer. Jasdip then conveyed the orders on behalf of DMW. Another feature of Huang was that the company operated on a "revenue neutral" basis and hence was found not to be a business according to Hope v Bathurst City Council. In this case, DMW operated profitably in the relevant period and this profit was increased in the subsequent financial year.
88. The Tribunal in Ong also was of the view that the business activities that must be examined are those in Australia. In that case, however, the Tribunal had already decided that the applicant had not, by the relevant date, obtained a substantial ownership interest in an eligible business. Having come to that decision, it is difficult to see how the Tribunal could have come to a view other than that the applicant was not utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business. Furthermore in that case there appeared to be little evidence of business endeavours at all before the visa was cancelled. This therefore is quite different to Mr Dhanjal's situation.
89. Further, I do not accept that the Second Reading Speech (introducing the Bill amending section 134(1)(b) of the Act; Migration Amendment Bill (No 2) 1992) was quite as clear as was suggested in re Ong, namely that business activities must be in Australia…
…
91. Ms Goodman submitted that because Mr Dhanjal retained substantial business interests in Kenya this was a further indication of his business efforts being expended in respect of those businesses, and not DMW. Mr Dhanjal stated that he has been attempting to sell his assets in Kenya. Although there is only one letter attesting to this, I accept Mr Dhanjal's evidence as to his attempts. There was evidence from all family members of the deteriorating economic and social situation in Kenya and I find Mr Dhanjal's intention to dispose of his assets there before finally leaving (as have many members of his extended family) to be entirely reasonable. This differs from the applicants in Re Huang and Re Tang who apparently were making no efforts whatsoever to sever financial ties with their country of origin.
92. I therefore find that Mr Dhanjal was utilising his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.
93. I also find that Mr Dhanjal intends to continue to hold a substantial ownership interest in, and utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia.”
34.Having taken into consideration these decisions of the Tribunal and having accepted the evidence of the Applicants, I conclude that the Applicants were not utilising their skills in actively participating at a senior level in the day to day management of an eligible business in Australia. I agree with the views expressed in Dhanjal (supra) that the Second Reading Speech (introducing the Bill amending section 134(1)(b) of the Act; Migration Amendment Bill (No 2) 1992) does not clearly indicate that business activities must take place in Australia. However, I am mindful that the Applicants have provided no evidence of any intention to settle in Australia. Neither have the Applicants provided evidence which indicates an intention to give precedence to activity in Australia over their business activities in Indonesia, or even to spend further time in Australia, apart from Mr Tio’s assertion that he would like, eventually, to settle in Australia; however this assertion is at this stage merely an idea and does not amount to an intention to settle.
35.I accept that there is a lead up time in the development of any business and that, in the business of Great Ocean, there is a significant delay between the initial placement of an order and final payment. However, the company was registered in 1999 and in the period of some three years since the granting of their visas in 1999 and their cancellation in 2002, Mr Tio and Mr Soegiharto have spent only 25 days and 28 days in Australia respectively. In any event, neither Applicant gave evidence of having worked, even in Indonesia, in a concentrated manner to increase the profitability of Great Ocean. Mr Soegiharto’s evidence was that in a busy week he would spend up to 10 hours on Great Ocean business but in a quiet week would only spend two to three hours. Mr Tio’s evidence was that he only spoke to his clients about Great Ocean’s business in the context of his dealings with them in relation to his other business, with those dealings taking place only once or twice per week.
36.Even taking into account the effect of the Asian economic downturn, this level of activity, whether profitable or not, by people with the combined experience and skills of the Applicants, could not be said to amount to active participation in the day to day management of Great Ocean’s business.
37.It follows that the exercise of the discretion in section 134(1) to cancel the Applicants’ visas was justified and the application of the ameliorating provisions in section 134(2) must then be examined.
Have the Applicants each made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and to utilise their skills in actively participating at a senior level in the day to day management of the business?
38.I have already concluded that the Primary Applicants have each obtained a substantial ownership interest in Great Ocean, an eligible business in Australia, and so the question of genuine effort in that respect does not arise.
39.It remains to examine whether they have each made a genuine effort to use their skills in actively participating in the day to day management of Great Ocean.
40.I have discussed above the nature and extent of the Applicants’ efforts with respect to Great Ocean over the period from the grant of their visas to the date of cancellation and I concluded that they had not utilised their skills in the manner required. Section 134(3) allows the Tribunal to take into account the matters listed in that provision in assessing whether there has been genuine effort. In addition, the government policy, set out in the Migration Series Instructions (“MSI”), at paragraph 4.5.1, lists some factors to be taken into account by decision-makers in determining whether a genuine effort has been made.
41.In respect of the matters listed in section 134(3), I make the following findings:
§No written business proposal has been created by the Applicants;
§There is a third, silent, partner in the Great Ocean business but no evidence was presented as to his role in the business;
§Ad hoc research has been undertaken by the Applicants into the conduct of the business in Australia and those inquiries have largely been made from Indonesia;
§Mr Tio has spent only 28 days in Australia and Mr Soegiharto has spent only 25 days in Australia during the relevant period;
§Minimal assets have been transferred to Australia for use in the business;
§The value of the Applicants’ ownership interest in Great Ocean is negligible; and
§Business activity undertaken by the Applicants has been minimal.
42.Paragraph 4.5.1 of the MSI is 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 3 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 6 months since first arrival as a business skills class migrant;
(e)transfer to, and retained in, Australia at least 50% of the funds indicated as available to transfer within two years;
(f)minimum Australian $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 Australian $100,000 business activities 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.”
43.In considering the matters set out in MSI paragraph 4.5.1 and their application to the Applicants’ circumstances, it is apparent, on the basis of the Applicants’ evidence and the T documents, that the matters set out at (a) to (g) are not present.
44.On this basis, I must conclude that the Applicants have not made a genuine effort to use their skills to actively participate at a senior level in the day to day management of Great Ocean. In reaching this conclusion I was mindful of the effects of the Asian economic downturn and of the long lead time in developing a business such as that of Great Ocean but, in the absence of the positive indicators set out in section 134(3) and MSI paragraph 4.5.1, there is no basis on which to conclude that a genuine effort has been made.
Tio Hwee Piao’s Application
45.Section 134(4) compels the cancellation of a person’s business visa where the visa is held because the person is a family member of the holder of a cancelled visa. However, section 134(5) provides that a secondary visa must not be cancelled if to do so would result in extreme hardship to the holder of the secondary visa.
46.In Re Wang and Minister for Immigration and Multicultural Affairs [2002] AATA 961, Deputy President McMahon discussed the operation of section 135(5) of the Act and said:
“27. In Man Ki Kim v Minister for Immigration and Ethnic Affairs 37 ALD 481, Foster J considered the phrase "extreme hardship or irreparable prejudice". His Honour was concerned principally in considering whether the reasons given by the Immigration Review Tribunal in that case were adequate. However, in considering that adequacy, he had occasion to deal with the phrase "extreme hardship" dissociated from its accompanying words. At page 487 he said:
"..it is, in my opinion, important to approach the phrase "extreme hardship" in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. "Hardship" is in itself a relative term. What may be a "hardship" to a sensitive person, or one in a particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word "extreme" must be evaluated against the facts of the particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken. Again, as emphasised in the passages cited, separate consideration must be accorded to the questions of "extreme hardship" and 'irreparable prejudice". They are different concepts.
...
"In addition to what I have already said, I consider that the application of the word "extreme" must also be approached with caution. Obviously there are varying degrees of hardship which may be suffered by any individual. "Trivial", "minor", "moderate" are adjectives which spring to mind as conveying such varying degrees. Clearly enough "extreme" hardship must find itself at the very high end of the scale. This does not mean, however, that in any given case, "extreme hardship" means, in effect, a particular point of continuum of hardship. It obviously connotes an area within which an ascertainable burden of hardship must find itself may fall and properly merit the description "extreme". Within that area there may be varying degrees of burden, one less than another, but each meriting the description: cf Dell v Dalton (1991) 23 NSWLR 528; 14 MVR 158."
28. It is clear that hardship in subsection (5) must be judged subjectively. The use of the phrase "to the person" indicates this. What His Honour said in Man Ki Kim is relevant to that observation. The reference to Dell v Dalton above is by way of analogy. In that case, the Court of Appeal in effect held that a worst case scenario does not necessarily mean the worst case imaginable. What His Honour was saying in Man Ki Kim could be illustrated by taking the degree of hardship on a scale of one to ten. Extreme hardship does not necessarily have to rate a 10. Anything between nine and ten, for example, might still be called extreme.
29. The word "hardship" has received attention in various contexts. In Re Kabalan 113 ALR 330 Gummow J noted (unsurprisingly, as he put it) that each case must depend upon its own particular facts. I would respectfully add that the meaning of "hardship" must depend upon the context in which one finds it. In relation to Landlord and Tenant Legislation, Asprey J defined it in FG O'Brien v Elliott [1965] NSWR 1473 at 1475 as "a matter of appreciable detriment, whether financial, personal or otherwise". This was not a definition that commended itself to a Full Court of the Family Court in Re Whitford 24 ALR 424. In the context of family law, their Honours considered that "hardship" means something more burdensome that "any appreciable detriment". At 430, they offered the view that "hardship" in the context with which they were concerned was "akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment". Clearly, whatever view is taken, hardship involves more than inconvenience or detriment. Affectation must be to a considerable degree before it can properly be called hardship.
30. Although words cannot be substituted for other words appearing in a statute, it is permissible to resort to a dictionary in order to establish the ordinary English meaning of the words used in the statute. The cases supporting this approach are gathered and discussed in "Statutory Interpretation in Australia" by Pearce and Geddes, 4th edition at paragraph 3.15. The meaning of words will always be taken from the context in which they appear. However, the deliberate choice of the word "extreme" by Parliament, requires one to understand what was meant by the use of that particular degree of hardship. There are many meanings of the word "extreme" offered in the Macquarie Dictionary. Some of the more helpful suggestions are "of a character or kind farthest removed from the ordinary or average", "utmost or exceedingly great in degree", "farthest, utmost or very far in any direction", going to the utmost lengths, or exceeding the bounds of moderation", "the utmost or highest degree, or a very high degree". The use of the word "extreme" can be contrasted with the use of the word "undue" found in Ministerial Guidelines relating to hardship associated with deportation. In order to enliven the prohibition against a Minister cancelling another person's business visa under subsection (4), there must be shown to be not only hardship and not only undue hardship, but extreme hardship. Furthermore, that hardship must result from the cancellation.
31. The use of the word "would" in subsection (5) indicates that the hardship must be a necessary concomitant of the cancellation. A mere possibility or even a probability would not be sufficient. Thus the bar is set doubly high. To avoid a cancellation, there must be shown not only hardship of an extreme kind, but hardship which will necessarily follow cancellation. Although no one can accurately predict the future, the legislation requires the decision maker to find that the adverse consequence will almost certainly happen. To demonstrate the constituent elements in subsection (5) is to undertake a particularly onerous task.
32. Hardship is a condition that bears hard upon one. In the present case, it is clear that the applicant does not wish to leave Australia. That in itself cannot amount to hardship. The fact that the loss of a visa means that the applicant would need to leave Australia cannot of itself amount to hardship as this is the result contemplated by the statute upon cancellation. One must look at the consequences to the applicant that undoubtedly would result from the cancellation.
33. In this case, it is difficult to see even a moderate degree of hardship in the particular fears of the applicant. There should be no financial or emotional hardship. There will be none of the hardship associated with returning to an unfamiliar country with which one has not had a connection for many years. There will not be the hardship of being without a place to live. There will not be the hardship of being without friends or family.
34. The Migration Act and Regulations, taken as a whole, disclose a compromise which represents a balance between various competing interests. There is no reason to give a broad and generous construction to the concept of extreme hardship. To do so may detract from the force given in the balance of the legislative scheme to the other interests which are involved. It is not necessary in the present case, however, to extend the meaning of the phrase beyond its ordinary English meaning. In my view, the hardship, if any, which the applicant would suffer is nowhere near the extent of the hardship which would be required in order to fit the statutory description.”
47.A similar analysis was made by Deputy President Purvis in Re Salim and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 899.
48.In Re Chen & Ors and Minister for Immigration and Multicultural and Indigenous Affairs [2002] AATA 628, the Tribunal found the following circumstances do not amount to severe hardship:
“19. There is no doubt that cancellation of the visa for Pen Ling Chen would cause serious disruption to his life. He has lived in Australia for over four years. He has lost contact with his friends in Taiwan. He is half way through a degree course at Griffith University. He is currently in a relatively serious romantic relationship with a fellow student at Griffith University; they plan to marry each other.
20. If the visa was cancelled, Pen Ling Chen would have to abandon his studies in Australia, abandon his girlfriend and return to Taiwan to live with his parents.
21. Although the Tribunal accepts that the cancellation of Pen Ling Chen's visa would cause him distress and possibly hardship, it would not amount to "extreme hardship".
49.I accept Mr Tio junior’s evidence that he has lived in Australia for over seven years and is employed by the United Overseas Bank as a credit Administration clerk and that he has friends in Australia. I accept that if he is forced to return to Indonesia he will have to adapt to living in a society that he left when in his teens and will have to look for employment. I note that he has visited Indonesia regularly since his initial departure and that his family resides in Indonesia.
50.I do not consider that the disruption and, to some extent, distress that would be suffered by Mr Tio junior would amount to extreme hardship within the meaning of section 134(5). It follows that, consequent upon the cancellation of his father’s business visa, his business visa should also be cancelled.
Decisions
51.The Tribunal affirms the decisions under review.
I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of MS N BELL
Signed: A. Krilis
AssociateDate/s of Hearing 29 and 30 September 2003
Date of Decision 16 January 2004
Counsel for the Applicant Mr L. Karp
Solicitor for the Applicant Mr S. Vimalarajah
Solicitor for the Respondent Ms Jodie Maurer
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