Tong and Ors and Minister for Immigration and Multicultural and I Ndigenous Affairs - [2003] AATA 653

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [2003] AATA 653

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/307
Nº V2002/308

GENERAL ADMINISTRATIVE DIVISION Nº V2002/309

Re: CHIN PANG TONG AND
SIU YEN WONG AND
KAI YUEN TONG

Applicants

And: MINISTER FOR IMMIGRATION
AND MULTICULTURAL AND
INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal: Mr W.G. McLean, Member

Date: 11 July 2003

Place: Melbourne

Decision:The Tribunal affirms the decisions under review.

(sgd) W.G. McLean
Member

IMMIGRATION AND CITIZENSHIP — cancellation of business skills visa – whether applicant Chin Pang Tong has a substantial ownership interest in an eligible business in Australia – whether applicant is utilising his skills in actively participating at a senior level in the day‑to‑day management of the business – whether secondary visas held by applicant's spouse and child should be cancelled

Migration Act 1958 ss.134(1), (2), (3), (4), (5), (10)

Re Abraham and Department of Immigration and Multicultural Affairs (1997) 50 ALD 611

Freeman v Secretary, Department of Social Security (1988) 19 FCR 342

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

REASONS FOR DECISION

11 July 2003 Mr W.G. McLean, Member

This is an application for the review of decisions made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the respondent) made on 26 February 2002, pursuant to s.134 of the Migration Act 1958 (the Act). The respondent decided to cancel the business skills visa of Mr Chin Pang Tong (the applicant) and the contingent secondary business skills visas of the applicant’s spouse, Mrs Siu Yen Wong, and their son, Kai Yuen Tong (Kelvin).
The applicants were represented by Mr G. Gilbert, of counsel. Ms V. Priskich, solicitor from Blake Dawson Waldron, represented the respondent. Sworn oral evidence was given by the applicant, Ms Wong and the applicant’s business associate Mr M. Jin Yi Chang with the assistance of interpreters in the Cantonese language. Sworn oral evidence was also given by accountants Mr B. Phillips and Ms Li Rong, on behalf of the applicant.
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act1975 (the T documents) and documentary exhibits numbered A1 to A7 for the applicants and R1 for the respondent.
The applicant lodged with the respondent in Sydney, New South Wales (NSW), on 6 September 1997 an application for a long‑stay temporary visa for himself and his spouse and Kelvin through his migration agent number 53047, Kong & Cheung Migration Services Pty Ltd. The applicant, his wife and son were all born in Hong Kong and hold passports issued by the United Kingdom of Great Britain and Northern Ireland for persons whose nationality is described as British National (Overseas). The application form records Mr Tong's address as 15/4 Belmore Street, Burwood, NSW, and includes a covering letter from the migration agent advising that his family members arrived in Sydney on 6 September 1997. The Department of Immigration and Multicultural and Indigenous Affairs (the Department) advised the applicant by letter dated 9 September 1997 that the applications had been approved and visas had been granted to travel to, enter and remain in Australia until 9 September 1999.
On 5 February 1998, Mr and Mrs Tong signed and lodged with the respondent an application for business skills (residence) visas for themselves and their son Kelvin. The application indicates that Mr and Mrs Tong and Kelvin were citizens of Hong Kong and that they were still residing at 15/4 Belmore Street, Burwood, NSW, at that date. Mr Tong declared that he had become involved in a Hong Kong business named Wise Profit International Limited (Wise Profit HK) from 4 March 1993. He stated that he owned 50 per cent of Wise Profit HK and that he had advanced HK$2,132,349 to the business to 1996 from his and his wife's personal net assets of HK$2,238,237 or A$361,571. The business was said to have net assets of HK$211,776 or A$34,210 of which Mr Tong's share was HK$105,888 or A$17,105 at 1996. On 26 February 1999, the respondent decided to grant Business Skills (Residence) (Class BH) Subclass 840 Business Owner visas to the applicant, Mrs Tong and Kelvin.
On 9 May 1995 an Australian company named Quality Seafoods Pty Ltd (Quality Seafoods) was registered in Queensland and on 23 September 1996 the name of the company was changed to Sky Winner Enterprises Pty Ltd (Sky Winner). The annual return of the company dated 22 March 2001 declares that Sky Winner has issued four ordinary shares for a total amount of $4 and that one share is owned by each of the following directors:
·   Tong, Chin Pang – the applicant
·   Jin, Yi Chang – the company secretary and business partner of the applicant
·   Kam, Yaj Lik – not active in business operations
·   Chen, Jia Wen – not active in business operations

An historical company extract provided by the Australian Securities and Investments Commission (ASIC) dated 25 February 2002 indicates that the above‑mentioned directors of Sky Winner were appointed on 1 September 1996 and it would appear that they obtained control of the company from that date.

The respondent tendered the following written information provided by the Department's legal office for this matter (Exhibit R1). The applicant does not dispute that Exhibit R1 accurately records the places and dates of his arrivals and departures to and from Australia. It is also an agreed fact between the parties that between the date of the respondent granting the applicant his business skills visa on 26 February 1999 and the date of cancellation of the visa on 26 February 2002, the applicant spent a total of 67 days in Australia, and from the date of cancellation of the visa until 6 February 2003, the applicant spent an additional 24 days in Australia.
Visa granted 26/02/99 – he departed Australia via Sydney on 27/02/99 – spent 1 day in Australia.
Arrived in Australia via Sydney on 30/01/2000 – departed from Melbourne 11/02/00 – spent 12 days in Australia.
Arrived in Australia via Melbourne 30 January 2001 – departed from Melbourne on 18/02/01 – spent 19 days in Australia.
Arrived in Australia via Melbourne 12/04/01 – departed from Melbourne 22/04/01 – spent 10 days in Australia.
Arrived in Australia via Melbourne 01/07/01 – departed from Melbourne 08/07/01 – spent 7 days in Australia.
Arrived in Australia via Melbourne 28/09/01 – departed from Melbourne 03/10/01 – spent 5 days in Australia.
Arrived in Australia via Melbourne 19/12/01 – departed from Melbourne 01 January 2002 – spent 13 days in Australia.
Period between grant of visa and date of decision: total of 67 days in Australia
He next enters Australia on 29/03/02 via Melbourne & departs on 06/04/02 from Melbourne – spent 8 days in Australia
Arrives in Australia 28/06/02 into Melbourne & departs Melbourne on 06/07/02 – spending 8 days in Australia
Arrives in Australia via Melbourne on 21/09/02 & departs on 29/09/02 – spending 8 days in Australia
Period from date of decision to 6 February 2003: total of 24 days in Australia.
Gand [sic] total of 91 days spent in Australia.
The applicant provided the following undated written statement (Exhibit A2) and gave sworn oral evidence:
STATEMENT OF TONG CHIN PANG
1.I make this statement in support of my application to the Commonwealth Administrative Appeals Tribunal for a review of the decision by DIMIA to cancel the business visa granted to me in February 1999.
Background
2.I am a businessman by profession and have been involved with international trading for almost 30 years. Since 1995, I have had plans to relocate to Australia as I am drawn by its potential to be a hub for international trading and its rich and limitless resources for export. I am also attracted by the incredible lifestyle that the country offers. I firmly believe that it is a conducive place to develop my business and to raise my family.
3.To realise my dream of making Australia my home, I started preparation for my migration here. In May 1995, I established Sky Winner (Enterprises) Pty Ltd ("Sky Winner"), a trading enterprise with Jin Yi Chang (an Australian citizen), Kam Yaj Lik & Chen Jia Wen to export seafood products, namely sharks fins and sea cucumber to China, Singapore, Hong Kong and other parts of S.E. Asia) and hold 25% of the shareholding of the company. I was formally appointed a director of Sky Winner on 1 September 1996.
4.I provided the primary source of funding for Sky Winner. Between November 1996 and May 1997, I had invested a total of A$300,000 in Sky Winner. Copies of the remittance advise evidencing my investment are annexed here and marked "A". As Sky Winner was newly incorporated and the company accounts were not yet in place, I had to remit the money through Ocean Rise, the sole proprietorship owned by Mr Michael Jin, another director of Sky Winner.
5.The export business of Sky Winner took off and it's annual export figures for 1996 and 1997 exceeded A$300,000/-. A copy of the annual return of Sky Winner for the year 2000 is annexed here and marked "B".
6.Prior to the above, I had already established a company in Hong Kong in April 1993, Wise Profit International Ltd with Chen Jia Wen, exporting a wide variety of commodities, including petroleum, gas, electrical appliances, and IBM computers electrical appliances from Hong Kong to China.
7.Following the incorporation of Sky Winner, I attempted to coordinate the business of both companies to mutual benefits. Since 28 April 1997, Sky Winner had been exporting seafood product from Australia to Wise Profit for sale in the Hong Kong and China market. In addition, Wise Profit was also in negotiations for the trading of red wine, fruit juice, abalone and fresh fruits with Hong Kong and China and I was optimistic that the export figures for Wise Profit would increase considerably.
8.The total export figure of Wise Profit for 1997 hit $200,000.
9.It was obvious that the business cooperation between both Sky Winner and Wise Profit benefited both companies mutually.
Application for migration on a business visa
10.Having laid the ground work for setting up my business operation in Australia, on 1 May 1998, I put in my application to migrate here on a 457 business visa as an independent executive through an agent, Colin Chong Migration Services.
Set-back to the business
11.Despite the promising start to my business in Australia, two events in 1998 adversely affected my business.
Government regulations controlling the export of seafood products
12.In February 1998, government regulations were introduced, restricting the farming of sharks fins.. The export figures of Sky Winner and Wise Profit plummeted and my business suffered serious repercussions.
Lawsuit against Will and Sue Fraser
13.Further, in the same year, Sky Winner became embroiled in a complicated and long‑drawn law suit against the supplier, Will & Sue Fraser for breach of contract. Will & Sue Fraser had failed to deliver the contractual quantity of sea cucumber due to a shortage of the products. Other issues relating to the recovery of monies already paid and even forgery of signature on a Deed of Agreement purporting to vary the original agreement only served to prolong the process, divesting precious time and resources, financial and otherwise, from the business. This litigation has been costly and protracted. Sky Winner only managed to obtain judgement against Will & Sue in early 2001 but this was set aside and we continue negotiating a settlement. It was only recently after the litigation approached a final hearing that the Defendants have indicated they are prepared to negotiate a commercial settlement. This has yet to be finalised.
Diversification of the business operations of Sky Winner
14.To revive the business in light of the woes facing Sky Winner, the directors decided to diversify the business operations. The first new venture that Sky Winner explored was the export of fruits to China.
15.In June/July 1998, Sky Winner exported 2 containers of fruits from Cairns and Brisbane to China. Copies of the agreements for the export of fruits with the various Chinese companies are annexed in the affidavit of Mr Michael Jin and marked "C".
Grant of the visa
16.In February 1999, my family and I were finally granted class 840 Permanent Resident Visas. We were delighted and somewhat relieved as I had already committed to investments in Australia. I visited Australia in January 2000 with my family to prepare for our move here. In January 2001, after settling our affairs in Hong Kong, we finally moved to Melbourne (where my wife has family) and settled down here.
Tourism Business
17.In July 2001, I resigned from Wise Profit. Following my relocation to Australia, I was encountering administrative problems running businesses in both Hong Kong and Cairns whilst being based in Melbourne. The directors of Wise Profit and Sky Winners also had polemically different plans for each company. Moreover, I waited to focus my energy on developing the business of Sky Winner as I was keen to continue my association with Michael Jin.
18.However, as I have run the business of Wise Profit for almost a decade, I have developed an extensive networking of business contacts in Hong Kong and China which was invaluable for the business of Sky Winner. I also trusted my business associate, Michael Jin and worked well with him.
19.As part of its diversification strategy, Sky Winner started to venture into the tourism industry in August 2000. My plan, in particular, is to corner a niche in the tourism market bringing Chinese visitors to Cairns on packaged tours.
20.In addition to providing the financing for the company, I had always acted as the marketing arm of Sky Winner. To jump start the tourism business of Sky Winner, I made many trips to Hong Kong and China since 2001 to capitalise on my extensive business networking there and to actively source for business contacts and opportunities for Sky Winner.
21.In 1999, I met Ms Irene Lin, a director of Lin & Zheng Trading Co, a Hong Kong based company, at a business gathering in Shenzhen. At the Australian Business Awards 2001, Lin & Zheng won the Best Business Promotion over various MNCs for their aggressive promotion of trade, business and cultural exchange between Australia and the greater China region. I promoted Sky Winner as a potential business partner for Lin & Zheng Trading Co and plans are in the pipeline for a possible joint venture between both companies. A report on the Australian Business Awards 2001 is annexed here and marked "C".
22.As an experiment and an initiation for Sky Winner into the tourism market, Sky Winner introduced some Chinese tourists to a company in Cairns, Tropical Wonderland Tour Services, which provides coach services to tourists in Australia. A copy of the acknowledgement from Tropical Wonderland Tour Services is annexed here and marked "D".
23.Sky Winner has also started organising a few tours in Cairns for the Chinese tourists. For these tours, Sky Winner has engaged the services of several tour companies. Copies of the diary notes of the engagement of these tour companies are annexed here and marked "E".
24.The efforts to propel Sky Winner into the tourism industry started to pay off and Sky Winner started posting profits from its tourism venture in January 2001.
25.In June 2002, due to my negotiations and persistence, Sky Winner clinched an agreement with a Guang Zhou tour company to cooperate in bringing Chinese to Australia for purposes of tourism, investigation of business opportunities and investment. A copy of the agreement between Sky Winner and the Chinese company is annexed and marked "D" in Mr Michael Jin's affidavit.
26.In order to expand upon the lucrative tourism trade, Sky Winner went into partnership with a Mr Alan Lau, a director of Ocean Palace Chinese Restaurant and incorporated a tourist company, Sino-Aussie Travel Pty Ltd on 24 April 2002 June 2002 [sic]. The business licence was also issued on 6 June 2002. Copies of the company registration of Sino-Aussie Travel Pty Ltd and the business licence issued by the Tourism Department of Queensland are annexed here and marked "F".
27.I was appointed the Director of the Company on 6 June 2002. Copies of the Appointment, the Consent to the appointment and the company profile are annexed here and marked "G".
28.Given the current popularity of Australia as a holiday, immigration and business destination, and the aggressive promotion of Australia in China, the travel business is expected to increase considerably.
29.I recently visited China in August 2002 and managed to strike some business deals with 3 well-established Chinese travel agencies, namely:
i)Gong Fei Province, a China international travel company; and
ii)Nam Si Siong (from the state of Nam Si Siong);
iii)Hong Fei
The plan is to attract first-time tourists to Australia from remote parts of China, i.e. Guangxi to Australia. As these are unchartered territories, should Sky Winner succeed in tapping into these virgin markets, the potential is enormous.
30.The above 3 companies are scheduled to come to Australia in October to research into the conditions of the tourism market here and finalise the details on the agency agreements with Sky Winner.
31.On the logistics end, Sky Winner has approached a Shenzhen based company, Shenzhen Dingzhen to help with the application of visas for the Chinese tourists to Australia. Sky Winner has extended an invitation to the representatives of the company to Australia for a discussion and finalisation on the business deal. Copies of the invitation from Sky Winner to Shenzhen Dingzhen Co. Ltd are annexed here and collectively marked "H". This has not been an easy task but one which I believe may prove to be lucrative to Sky Winner's profits. It also draws into Australia a new tourist market not previously seen in Cairns, namely the provincial districts of China.
32.Notwithstanding the diversification, in pursuance of our core business, in August 2002, I clinched an order for Sky Winner for a trial delivery of a container (1 tonne) of fish to Hong Kong. If the product is found satisfactory, the Hong Kong company will place a monthly order with Sky Winner. A copy of the airway bill confirming the shipment of the contained [sic] is annexed here and marked "I".
33.I am confident that my efforts will prove successful in the long term and request that the Tribunal take into consideration the difficulties of establishing a business in Australia which may not have immediate results to show in the short term and acknowledge my genuine efforts to establish a profitable business sin [sic] Australia, conservative as I am.
[signed] Tong Chin Pang
The financial statements of Sky Winner for the years ended 30 June 1996, 1997 and 1998 were provided by Duesburys, chartered accountants of North Cairns, Queensland, under cover of their facsimile dated 13 February 2003 (Exhibit A1). The financial statements record that Sky Winner commenced trading in the 1996 financial year with sales of $9440, increasing to $389,083 for the year ending 30 June 1997 and $711,990 for the year ending 30 June 1998. The company had an operating profit of $1958 in 1996, $2625 in 1997 and an operating loss of $3512 in 1998 which indicates that the increased sales trend did not produce increased net operating profits. Accordingly, the net assets and shareholders equity declined from $1255 at 30 June 1996 to a negative $610 at 30 June 1998.

The principal business of Sky Winner from 1996 until 1998 was the purchase in Northern Australia of shark fin and sea cucumber seafood for export to Asia. The applicant’s evidence concerning the set‑back to the business is set out in his statement paragraphs 11, 12 and 13 above. The only additional business undertaken by Sky Winner to 1998 was associated with the export of two containers of fruit from Brisbane to China, which is referred to in paragraphs 14 and 15 of the applicant’s statement.
Sky Winner did not prepare financial statements for the years ended 30 June 1999 and 2000 due to business inactivity. The applicant provided the financial statements of Sky Winner for the years ended 30 June 2001 and 30 June 2002 as an annexure to his written undated supplementary statement (Exhibit A3). The financial statements disclose that Sky Winner earned gross revenue of $330 during the year ended 2001 and $8273 for 2002 which, after expenses of $686 for 2001 and $4452 for 2002, produced a net loss of $356 for 2001 and a net profit of $3821 for 2002.
The balance sheet of Sky Winner as at 30 June 2001 discloses that, during the two year period from 1 July 1998 to 30 June 2000, when the company was inactive and did not prepare financial statements, the company had closed its bank account and had only $4 cash on hand. The company's only other recorded assets were in respect of office furniture and equipment with a written down value of $1346. The only recorded liability was a loan of $6221 from Mr Yin, a director of the company. Sky Winner had negative net assets and shareholders funds at 30 June 2001 of $4871 which improved to a negative net assets and shareholders funds of $1050 as at 30 June 2002.
Annexure A of the above written statement by the applicant (Exhibit A2) contains documentary evidence that on 28 November 1996 A$250,000 or HK$1,567,425 was remitted by the Chekiang First Bank Ltd by telegraphic transfer in favour of Ocean Rise. An additional $50,000 or HK$297,249 was remitted to Ocean Rise on 27 March 1997 by Mr A. Lam and Mr N. Yang, solicitors in Hong Kong. This is the documentary evidence provided by the applicant in support of paragraph 4 of his statement. The balance sheet of Sky Winner (Exhibit A1) records a loan to the company from Sky Winner Hong Kong of $220,000 at 30 June 1997 which is contended to be from the $300,000 transferred from Hong Kong to Ocean Rise. The balance sheet of Sky Winner at 30 June 1998 records that the liability loan Sky Winner Hong Kong balance had been reduced further to $172,623.50 at that date. It is also noted that in the applicant’s application for business skills residence visa, which he completed with his wife and jointly declared on 5 February 1998, asserts in response to question 100 (T documents p.250) that the value of any business interests they had in Australia at that date was only $90,000 however, no explanation was offered by the applicant in respect of this apparent disparity.
The applicant resides mainly in Hong Kong at So Horizon in Upper Hong Kong. As evidenced by the above travel to and from Australia details (Exhibit R1), he occasionally travels to Melbourne to visit his wife and son Kelvin who presently reside in East Keilor, a suburb of Victoria. The applicant conducts his business in Hong Kong as a trader of electrical goods, such as computers, television recorders and compact disk records, between wholesalers in Hong Kong and retail outlets mainly in the Kwangtung Province in China.
Paragraph 3 of the applicant’s above statement indicates that Mr Tong started his preparation for migration to Australia in May 1995 when he established Sky Winner to export shark fins and sea cucumber to China. However, the abovementioned historical record of Sky Winner indicates that the company which was formed on 9 May 1995 and named Quality Seafoods Pty Ltd was renamed Sky Winner Enterprises on 23 September 1996 and that the applicant and his associates, Messrs Jin, Kam and Chen became directors of the company on 1 September 1996.
As discussed above, Sky Winner reported sales of $389,083 for the year ending 30 June 1997 and $711,990 for the year 30 June 1998. Clause 12 of the applicant’s statement refers to the applicant’s contention that in February 1998 Government regulations restricted the business of Sky Winner and as a result the export figures of Sky Winner and Wise Profit plummeted and my business suffered serious repercussions. It is also a fact that due to alleged business inactivity, Sky Winner did not prepare any financial statements for the years ended 30 June 1999 and 30 June 2000. Accordingly, Sky Winner could not have been engaged in the sale and export of Seafood Marine Products after 30 June 1998. It is also reasonable to assume that the export sales by Sky Winner of two containers of fruit from Cairns and Brisbane to China in June/July 1998, referred to in clause 15 of the applicant’s statement, would have been included in the total sales of $711,990 reported by the company for the year ended 30 June 1998. The relevance of the above‑mentioned chronology of the sales and export activities of Sky Winner is that they all occurred prior to the respondent granting the business skills visa to the applicants on 26 February 1999.
The applicant confirmed that the $300,000 that was remitted from Hong Kong to Australia in 1996/1997 (as detailed above and referred to in clause 4 of the applicant’s statement) was in fact paid into the bank account of Ocean Rise and not into the bank account of Sky Winner. He said that when Sky Winner was trading in 1996 the company was using his prior partner's private bank account. As Sky Winner did not open a bank account until 1997, the $300,000 was paid into the bank account of Ocean Rise; which is the business banking account of his co‑director and Australian business partner Mr Yi Chan Jin (also known as Michael Jin). It would appear that $220,000 was subsequently transferred to Sky Winner from Ocean Rise during the year ended 30 June 1997 and is recorded in Sky Winner's 1997 balance sheet supporting note Loan – Sky Winner Hong Kong $220,000.. The remaining $80,000 of the $300,000 was apparently loaned to Will and Sue Fraser in 1996/1997 by Mr Jin for the future supply of sea cucumber to Sky Winner, and is referred to in clause 13 of the applicant’s statement. This advance to Will and Sue Fraser does not appear to have been recorded as an asset (i.e. prepayment or loan) in any of the financial statements prepared for Sky Winner and therefore can only be considered to be a loan made directly to the Frasers by either the applicant or Mr Jin.
The applicant said that the shark fin and sea cucumber stock purchased by Sky Winner was sent to factories to be dried, prior to exporting the stock to Hong Kong and China. Sky Winner and Mr Jin apparently advanced money to the drying companies and in return they provided Sky Winner with supplies of sea cucumber. One of these drying factories is owned by Will and Sue Fraser and another was a company named Impex (Cairns) Pty Ltd (Impex). The notes to the balance sheet of Sky Winner as at 30 June 1997 record as a receivable loan – Impex $55,000.
During the adjournment of this matter from 14 February 2003 to 12 May 2003, the applicant said he and Michael Jin had reviewed Government regulations concerning shark fin fishing and had also spoken to prawn fishermen and other Queensland boat owners who supply shark fin and that they had learned that what they had previously understood about the Australian Government's regulations, referred to in clause 12 of his statement, was not correct. Accordingly, Sky Winner could resume the purchase and export of shark fins some time in the future. During the financial years ended 30 June 1996, 1997 and 1998 Sky Winner exported shark fin to Asian retail food outlets and at that time Michael Jin would regularly telephone the applicant in Asia in order to obtain an expected sale price for the shark fin in Asia, prior to arranging for Sky Winner to purchase the goods for processing and shipment to Asia.
The applicant gave evidence that the shipment of two containers of fruit by Sky Winner in June/July 1998, referred to in clause 15 of the applicant’s statement, involved one shipment of lychees and one of plums, and the applicant also said mainly the price and that type of fruit in the market is not easy to advertise. That's why temporarily it was stopped.. The applicant agreed that these fruit exports occurred prior to him coming to Australia on 30 January 2000 and also prior to the respondent granting him his business skills visa on 26 February 1999.
Mr Jin is considered by the applicant to be his Australian business partner. Mr Jin and the applicant each own one of the four ordinary shares issued by Sky Winner. Mr Jin does not speak English fluently and during 1996 to 1998 he relied on Sky Winner's English‑speaking manager at that time, Mr Alex Su. Mr Su was able to communicate orally in English to the suppliers of goods to Sky Winner, and also with its accountants. Therefore, Mr Su was largely involved in the day‑to‑day management of the Sky Winner business in Queensland, subject of course to the overall supervision of Mr Michael Jin who also resides in Queensland. Mr Su's employment by Sky Winner was discontinued by Mr Jin in 1998 when the company ceased operations.
The applicant provided the Tribunal with a supplementary statement (Exhibit A3) to which he annexed and marked "B" the financial statements of Sky Winner for the years ended 30 June 2001 and 2002. On 14 February 2003 the applicant gave sworn evidence that the contents of his supplementary statement and its annexures were true and correct. The details contained in the annexed financial statements are referred to earlier in these reasons for decision. The applicant’s attention was subsequently drawn to the fact that the directors' declaration attached to Sky Winner's financial statements had not been signed by either himself or his co‑director Michael Jin, as provided for in the document which states, amongst other things, that the statements present a true and fair view of the company's financial position, and the applicant replied
When I look at it now, it cannot be described that way.

The applicant was asked:

Is Mr Tong saying that the financial statements that are before the Tribunal do not show a true and fair view of the company's position?

And the applicant replied:

When I look at these things, yeah, that's what I believe, not the case.

The applicant did not proffer any further comment or explanations to the Tribunal for orally refuting the veracity of Sky Winner's financial statements for 2001 and 2002, nor did he seek to amend his supplementary statement or its annexures.

The applicant gave evidence that Sky Winner does not hold any formal meetings of the directors of the company, nor does it hold the statutory annual general meetings of the shareholders of the company.
Clause 22 of the applicant’s statement refers to the ongoing negotiations between Sky Winner and Tropical Wonderland Tour Services (Tropical Wonderland) and the applicant said:
Finally we just have to choose whether we have to go into share this Tropical Wonderland. We did talk about it. To talk about this matter we also put in a deposit, but it was difficult because at that time was, you know, was the right time for tourism. Tropical Wonderland, as to price, can be described as high. That's why we have been talking, but it's been quite difficult.

Mr Gilbert asked the applicant,

And in more recent times is there anything been occurring in relation to tourism from China to Australia?

The applicant replied:

At the moment the whole of South East Asia, including Hong Kong and China, basically has come to a temporary halt at the moment because early this year there was some sort of plague happened there. Should be SARS. So, basically, the whole things halted.

The applicant said that Michael Jin arranged the guide services referred to in clause 23 of his statement and that his role is to do with the marketing of tourism to prospective tourists in Asia.

The applicant was asked why he had based his family in Melbourne, as indicated in clause 17 of his statement, and he said that it is because he has family members on his wife's side in Melbourne and his wife likes to be close to her relatives. The applicant was referred to the above‑mentioned summary of his arrival and departure dates to and from Australia (Exhibit R1). Apart from his arrival in Melbourne via Sydney on 30 January 2000, he has arrived and left from Melbourne on every occasion. He confirmed that his visits to Australia for the 67 days between the date of the granting of his visa by the respondent on 26 February 1999 to the cancellation of his visa on 26 February 2002, were to enable him to spend time with his family, mainly because of school holidays. There is no evidence that the applicant spent any time whatsoever in Queensland at Sky Winner's business address during his visits to Australia.
Mr Michael Jin Yi Chan provided the following undated written statement (Exhibit A4) and gave sworn oral evidence in support of the applicant:
STATEMENT OF MICHAEL JIN YI CHANG
1.I am a director and shareholder of Sky Winner (Enterprises) Pry Ltd and I make this statement in support of the application of Mr Tong Chin Pang ("Mr Tong") to the Administrative Appeals Tribunal for a review of the decision by DIMIA to cancel his business visa. Where relevant, I shall make references to the affidavit of Mr Tong filed in support of the said application.
Background
2.I am an Australian citizenship [sic]. I initially established Ocean Rise, a sole proprietorship in Cairns exporting seafood to Singapore, Hong Kong and other parts of S.E. Asia with the assistance of Mr. Tong. A photocopy of my passport is annexed here and marked "A".
3.In 1995, Mr Tong and I started discussion on a possible business venture together. Mr Tong was a director of a trading company in Hong Kong called Wise Profit International. He has accumulated many years of commercial experience and has established an extensive business network in Hong Kong and China.
4.Mr Tong told me that he had plans to migrate to Australia with his family and was looking to set up a business in Australia. As I had settled in Cairns and had established a trading business here, I was familiar with the local Australian market. I was also keen to expand my business into Hong Kong and China.
5.Mr Tong and I felt we could mutually benefit each other. Under those circumstances, we incorporated a trading company, Sky Winner (Enterprises) Pty Ltd in June 1996 with two other business partners, namely Chen Jia Wen and Kam Lik Yaj.
6.Our initial business was the export of seafood products, i.e. sea cucumber and sharks fin from Australia to Hong Kong and China. Our main supplier was Will Fraser in Cairns.
7.Mr Tong was the primary financier of Sky Winner. He invested a sum of A$250,000/- to the company in November 1996 and another sum of A$50,000.00 in May 1997. As the company account of Sky Winner was not set up yet, Mr Tong remitted the monies into the account of my business, Ocean Rise, which I then transferred to Sky Winner. Copies of the remittance advice are annexed and marked "A" in Mr Tong's affidavit.
8.As I am based permanently in Cairns, I take charge of the day to day administrative and management of the company office there. Mr Tong, on the other hand, is the marketing arm of Sky Winner. His primary role is to promote the company and market the company's product to the retailers in Hong Kong and China. The scope of Mr Tong's job necessarily entails him spending a large part of his time networking in Hong Kong and China.
9.Mr Tong and I worked well together and Sky Winner took off to a flying start in 1996 and 1997, as stated in paragraphs 5 of Mr Tong's affidavit.
10.However, the intervention of the 2 extraneous factors explained in paragraphs 9 to 11 of Mr Tong's affidavit was a huge blow to the business of Sky Winner.
Set-back to the business
Government regulations controlling the export of seafood products
11.In February 1998, government regulations were introduced, restricting the farming of sharks fins. The export figures of Sky Winner and Wise Profit plummeted and my business suffered serious repercussions. A copy of the annual return of Sky Winner for the year 2000 is annexed here and marked "B".
Lawsuit against Will and Sue Fraser
12.Further, in the same year, Sky Winner became embroiled in a complicated and long-drawn lawsuit against the supplier, Will & Sue Fraser for breach of contract. Will & Sue Fraser had failed to deliver the contractual quantity of sea cucumber due to a shortage of the products. Other issues relating to the recovery of monies already paid and even forgery of signature on a Deed of Agreement purporting to vary the original agreement only served to prolong the process, divesting precious time and resources, financial and otherwise, from the business. Sky Winner only managed to obtain judgement against Will & Sue in early 2001. At all times, I discussed these matters and Mr. Tong was in constant contact and I took his advice on these matters.
Diversification of the business operations of Sky Winner
13.The directors of Sky Winner decided to venture into 2 new areas of business, namely the export of fruits to China and tourism.
14.Through Mr Tong's introduction in China, Sky Winner clinched a few deals to export 2 containers of fruits from Cairns and Brisbane to 3 Chinese companies, variously based in Shanghai and Guangzhou. The shipment was effected through a Chinese company. As explained in paragraph 8 above, I am in charge of the administrative end of the company with management instructions from Mr. Tong as he has the business experience whilst I have not had much. I previously worked as an employee and was a waiter in restaurants. Consequently, Mr. Tong and I liaised directly with the Chinese companies for the details of the agreements. Copies of the correspondence between myself, on behalf of Sky Winner, and the various Chinese companies confirming their orders for the export of fruits are annexed here and marked with the [sic] "C".
Tourism
15.Sky Winner started venturing into the tourism business in August 2000. To that end, Mr Tong visited China on many occasions to tap into his networking there. As an initial experimentation, he managed to introduce a number of Chinese tourists, on behalf of Sky Winner, to a company based in Cairns, Tropical Wonderland Tour Services, which provides coach services to tourists in Australia. A copy of the acknowledgement by Tropical Wonderland Tour Services of the contribution of Sky Winner is annexed and marked "H" in Mr Tong's affidavit.
16.Sky Winner also started organising tours to Cairns for Chinese tourists and hire the services of Guide Services to conduct the tours. Copies of the diary records for the hiring of Guide Services are annexed and marked "E" in Mr Tong's affidavit.
17.In June 2002, Mr Tong also succeeded in securing an agreement with a Guang Zhou based tour company to cooperate in bringing Chinese tourists to Australia for purposes of tourism and investigation into business opportunities and investment. I inked the agreement on behalf of Sky Winner. A copy of the agreement is annexed here and marked "D".
18.Following Mr Tong's efforts to lay the groundwork for Sky Winner's venture into tourism market, Mr Tong and I were optimistic of the opportunities in the tourism industry. To tap into the lucrative tourist market, Sky Winner entered into a partnership with Mr Alan Lau, a director of Ocean Palace Chinese Restaurant to register a tourist company, Sino-Aussie Pty Ltd ("Sino-Aussie") on 24 April 2002 as the official tourist branch of Sky Winner. I had also applied for a business licence for Sino-Aussie to operate in tourism, which licence was granted on 6 June 2002.
19.Australia is presently enjoying a surge of popularity as a tourist destination. With the liberation of the Chinese market, the potential for Sky Winner's plans to tap into the Chinese tourism business is immense. Especially with the new deals which Mr Tong has secured with the 3 Chinese companies, Sky Winner's tourism trade is expected to increase exponentially.
20.Further, Sky Winner's original trade in the export of seafood has received a booster in a potential contract to export fish to a Hong Kong company.
21.Sky Winner's business prospect is definitely promising. This will not have been possible without the contributions of Mr Tong, on whose continued presence the future success of Sky Winner hinges.
22.In the event, I request that the Tribunal grant Mr Tong his application and reinstate his business visa as it is essential for the continued growth and profit of Sky Winner that Mr. Tong's management skills, business acumen and input are retained.

Mr Jin resides at 50 Barnes Street, Earlville, Cairns, Queensland. He owns one of the four ordinary shares issued by Sky Winner and is a director and the secretary of Sky Winner. He confirmed that the other three shareholders and directors of Sky Winner are presently, the applicant who holds one share, a friend of Mr Tong's who resides in Hong Kong named Jia Wen Chen who holds one share and Michael Jin's older brother Yaj Lik Kam who holds one share.
Michael Jin said that he had known and had been a friend of the applicant since 1985. In 1992 Mr Jin was operating Ocean Rise with another friend, and contrary to clause 2 of his statement, he said that Ocean Rise was a limited company. Ocean Rise operated from Cairns and exported seafood to Singapore and Hong Kong however, Ocean Rise had insufficient operating liquidity.
In 1995 Michael Jin started discussions with the applicant regarding a joint venture to export seafood products, with Mr Jin continuing to manage the Australian operations involving seafood procurement and the administration of the business and the applicant providing the required operating liquidity and advising Mr Jin of the prices available in Asia for seafood products. As a result of these discussions, they each acquired a 25 per cent equity (1 ordinary share each) in Sky Winner around September 1996. Clause 2 of Michael Jin's statement makes it clear that he had already established a seafood export market in Singapore, Hong Kong and other parts of South East Asia through Ocean Rise, prior to his Sky Winner joint venture with the applicant.
Michael Jin confirmed that the $300,000 provided by the applicant and referred to in paragraph 7 of his statement was deposited into the bank account of his business Ocean Rise. These funds were used to purchase marine products for export to Asia, to make loans to suppliers of sea cucumber and to purchase two motor vehicles costing $45,071 plus other minor fixed assets such as office furniture, etcetera, for Sky Winner. The balance sheet of Sky Winner at 30 June 1997 includes as a current asset under the heading "Cash" the entry National Australia Bank – Ocean Rise Account $871.23, which is contended by Mr Jin to be the balance remaining from the $300,000 deposit.
Michael Jin is unable to converse in the English language and was also unable or unwilling to read his written statement or other evidentiary documents such as the financial statements, etcetera, that are written in English. Mr Jin employed Mr Su to assist him to manage Sky Winner in 1997 and 1998 and Mr Su conducted all of the day‑to‑day negotiations with English‑speaking suppliers of goods and services to Sky Winner, maintained the internal accounting and/or financial records of the company. He also provided financial information to the company's accountants Duesburys, so that they could prepare annual financial statements, tax returns and associated statutory financial reports for Sky Winner. Michael Jin terminated Mr Su's employment with Sky Winner around the time that the company ceased operations in 1998.
Michael Jin said that he and Alex Su were full time employees of Sky Winner and that Alex was paid $500 per week and he was paid $1000 per week, which represents an approximate yearly remuneration equivalents of $26,000 per annum for Alex and $52,000 per annum for Michael Jin. There was no explanation given why the profit and loss accounts of Sky Winner for the years ended 30 June 1997 and 1998 do not record any salary payment to Alex and reports only salaries – directors $10,000 for both 1997 and 1998. The Tribunal was not provided with the income tax returns of Sky Winner or Michael Jin or Alex Su for the tax years 1997 and 1998 to clarify the apparent disparity between the sworn evidence of Michael Jin and the financial statements of Sky Winner. It can therefore only be assumed that a significant amount of the salaries paid by Sky Winner have not been recorded in its annual reports and associated income tax returns for 1997 and 1998 that were prepared by Duesburys, who acted as the company's accountant and tax agent at that time.
Michael Jin said that there was no such thing as the farming of sharks fins as stated in paragraph 12 of the applicant’s statement (Exhibit A2) and in paragraph 11 of his statement (Exhibit A4). He said that the shark fins purchased by Sky Winner in 1996, 1997 and 1998 for export to Asia were generally supplied by prawn fishermen. He said that he is very well known to many people engaged in the fishing industry in Queensland and has spoken to them and ascertained that shark fins are still presently available in Cairns, Townsville, McKay and Thursday Island should a decision be made for Sky Winner to recommence its 1996‑1998 business of exporting shark fins to Asia. Michael Jin said that Sky Winner had exported a small quantity of two containers of fruit to Asia in 1998. He explained that the Department of Primary Industry (DPI) had approached Alex Su and invited Sky Winner to export fruit to Hong Kong. And he said:
Well I remember the DPI approached Alex because I didn't – I didn't speak English, to try to export orange, but the price of orange was very low, like 10 cents per kilogram and because there wasn't a market, so the fruit just went rotten and so we were asked to explore the overseas market.
Because we couldn't sell them so we didn't continue.

Michael Jin said in relation to tourism:

Mr Tong, if he was in China, have arrange to have some clientele down here, when they arrive at Cairns, then I will be able to receive those tourists and arrange things for them. …
Arrange for the hotels, cars, go to places like – he is talking about Chinese name in Cairns, the fare for the boats to go over there, the reef, seven wonders in the world, so I have arranged for the fare to go across on the boat.

Michael Jin was referred by the respondent to the financial statements of Sky Winner for the years ended 30 June 2002 and Ms Priskich asked:

It is unsigned by the directors, but do you declare that's a true and correct statement of the financial position of the company?

And Michael Jin said:

I can sign now.

He later said that Sky Winner still owned the two motor vehicles that were recorded in Sky Winner's financial statement as at 30 June 1998 with a written down value at that time of $31,675 and that these two motor vehicles do not appear as an asset in Sky Winner's balance sheet at 30 June 2002. He said that he appointed an accountant, located in Melbourne, named Ms Li Rong to prepare Sky Winner's financial statements and associated income tax returns for2001 and 2002 because he does not speak English, and said:

Because I don't know much of the financial affairs, so I gave her whatever I have so she base on that to prepare this. Well probably because I – because I did not provide her sufficient information so probably it is not her mistake.

The following written statement (Exhibit A6) was provided by the wife of the applicant, Mrs Siu Yen Wong:
STATEMENT OF SIU YEN WONG
1.I have settled here with my family for almost 2 years and have not been back to Hong Kong since arriving in January 2001. I feel that I have already assimilated into the Australian society.
2.I have built a social circle, and more importantly, re-established close contact with my elder sister, an Australian citizen who migrated here 10 years ago and lives in Southbank, Sturt Street. I am an active member of an established church, the Melbourne Chinese Bible Church, which has more than 100 members, most of whom I know and call friends. I attend the Sunday worship services, and the Tuesday cell group meeting regularly. In addition, I also join the Saturday interest cell group meeting, which lasts from 2.30 to 4.30 p.m., followed by a 2 and a half hour session of choir rehearsal for the Sunday worship service. I enjoy close fellowship with the church and members and have a sense of belonging to this extended family.
3.I have led an active life since arriving. In addition to the busy schedule of a full time dedicated wife and mother, I have successfully secured a driving licence. Further, in order to ease my integration into my new environment, I undertook to improve my English, and was awarded a 14829 NSW Certificate III in Spoken and Written English. A copy of the Certificate is annexed here and marked "A".
4.I intend to undertake further studies and plan to enrol in either a Business Administration or translation course at the TAFE. I would in fact have already registered for the course but for the cancellation of my visa and the uncertainty and instabilities of my situation.
5.As evidence of my intention to remain here on a long term basis, I have invested a total of A$46,517.03 with the ANZ Bank. Copies of Record of Investment from the ANZ Bank are annexed here and marked "B".
6.We presently rent a house but intend to buy one shortly, utilizing funds in the ANZ Bank as deposit (and in fact would have already done so but for the cancellation of the visa).
7.My son Kelvin is 10 years old and is presently enrolled in year 5 at St Peter's school. He is enrolled at Penleigh and Essendon Grammar School, an elite school in East Keilor and is currently on the waiting list.
8.His school reports show that he has fitted well into his new environment.
9.Kelvin also participates actively in extra-curriculum activities including swimming and tennis. Copies of Kelvin's school reports, extra-curriculum activities and confirmation of enrollment are annexed here and marked "C".
10.It was a major decision for our family to uproot ourselves from Hong Kong to move to a new environment, especially with a young child in tow. However, we have approached our new life with enthusiasm and optimism, and have worked hard to assimilate well into our adopted country. We have built up a new life and established a network of friends.
11.I feel it will be traumatic and extremely unsettling for the family should we be forced to return to Hong Kong.
12.We will miss our church friends here. As I have lost contact with my friends back in Hong Kong, this will be extremely unsettling. The situation will be worse for the [sic] young Kelvin, who has only his friends here in school.
13.We will have to readjust our lifestyle, which I feel will be difficult emotionally.
14.More importantly, Kelvin will have to disrupt his studies here. He will have to forfeit his place for year 5 at Penleigh, and the registration fees. Further, it is a requisite for students in Hong Kong to be conversant in Mandarin and Cantonese. Kelvin has completely lost touch with his mother tongue the last 2 years in Melbourne. This will seriously prejudice him should he be forced to return to Hong Kong. It will be virtually impossible for him to gain admission to a school of his choice at the appropriate standard at this time, especially since this is already the end of 2002. This I feel, will be a real setback to his education and may prove emotionally damaging.
15.I also have to abandon my plans for further studies.
16.Further, the cancellation of the visa may prejudice any future visa application that I or Kelvin may make should we wish to come back to Australia.
17.I therefore earnestly request that the tribunal not cancel our visas.
[signed] Wong Siu Yen
Mrs Wong said that she and her son Kelvin presently reside at 11‑20 Eastleigh Avenue, East Keilor, Victoria. She also has her home with her husband in Hong Kong. She has three married brothers living in Hong Kong with their families and a sister living in Melbourne referred to in paragraph 2 of her statement.
Mrs Wong speaks some English but still required the assistance of an interpreter of Cantonese language in order to give her oral sworn evidence at the hearing. She said that whilst at home, she speaks to Kelvin in Cantonese. She said that Kelvin's relocation back to Hong Kong after spending approximately three years in the Australian educational system would present difficulties with his writing skills and recognising Chinese characters. If Kelvin were to return to Hong Kong he would recommence his education at Grade 5 or Year 5 and he would not have sufficient time to improve his essay preparation in order to lift his standards. Mrs Wong has not made inquiries to determine if there are special educational assistance tutors available to relocated students in Hong Kong.
Mrs Wong gave evidence that the reason why she wanted to relocate from Hong Kong to Australia was mainly for access to the Australian educational system and she said,
I believe the system here is very good for the children to study and secondly, in term of the social system, however there is not as much pressure.

She agreed that she discussed this with her husband and that was the main reason why she applied for a business skills visa. She was asked by the respondent if it was difficult for her living in Australia while her husband lived principally in Hong Kong and she replied:

Well, it is tolerable.

She also said:

When his (Kelvin's) father is in Melbourne, he utilizes most of his time to keep Kelvin company. Whereas back in Hong Kong he has to travel extensively. So therefore in Hong Kong, his father doesn't have much time to keep him company.

Mr Bevan Phillips, an affiliate of the Institute of Chartered Accountants, gave sworn oral evidence by telephone from Cairns, for the applicant. Mr Phillips is employed by Pacifica Chartered Accountants (previously Duesburys) of North Cairns, Queensland and was responsible for the preparation of Sky Winner's annual financial statements for 1996, 1997 and 1998 (Exhibit A1). Duesburys were also the tax agents for Sky Winner and lodged the company's income tax returns at that time.
Mr Phillips said that he dealt with Mr Alex Su for Sky Winner and relied upon bank statement and some cheque book details to prepare the annual financial statements. He said anything that we didn't have cheque book details on, we asked the client to, sort of, furnish that information. He confirmed that the financial statements for 1996, 1997 and 1998 provided the information source for Duesburys to complete Sky Winner's income tax returns for those years. Also, Duesburys lodged Sky Winner's annual returns with ASIC without sighting any minutes of the Directors of the company approving the information contained in the annual returns. Mr Phillips said that Sky Winner initially used the Ocean Rise's bank account which was owned or operated by Michael Jin because Sky Winner had not opened a bank account at that time. As soon as Sky Winner opened a bank account $150,000 was transferred to that account from the Ocean Rise bank account. The liability appearing on the balance sheet of Sky Winner of loan – Sky Winner Hong Kong of $220,000 for 1997 resulted from oral instructions and the reduction in that account from $220,000 to $172,623.50 during the 1998 year arose from cheque butts indicating that monies had been repaid by Sky Winner to Hong Kong.
Mr Phillips said that Sky Winner is probably not recording enough detail in its accounts and the identification and being able to get accurate information has always been difficult. He was not aware of any loan between 1996 to 1998 by Sky Winner to Will and Sue Fraser, as referred to in paragraph 13 of the applicant’s statement.
Ms Li Rong gave sworn oral evidence as the result of a summons to give evidence and produce documents dated 22 May 2003 which was served on Ms Li by the solicitor for the applicant. Ms Li is a certified practicing accountant (CPA) and carries on her business as an accountant and income tax agent from her home at 22 Maldon Crescent, Doncaster East, Victoria.
Ms Li was referred to Mr Michael Jin by one of her clients who requested her to telephone Mr Jin. During the telephone conversation on 22 October 2002, Ms Li suggested to Mr Jin that because he was in Cairns and she is in Melbourne it would be hard for her to communicate with him using the telephone and facsimile and that Sky Winner should remain with its previous accountant. Mr Jin replied that he could not speak English and he had had a communications problem with the prior accountant (Duesburys) and that there was no Chinese accountant in Cairns. Ms Li agreed to act as the accountant of Sky Winner and to prepare its financial statements and income tax returns for the years ended 30 June 2001 and 2002.
Ms Li was provided by Mr Jin with the financial statements of Sky Winner for the years ended 30 June 1996, 1997 and 1998 prepared by Duesburys (Exhibit A1). She was also provided with Sky Winner's income tax return prepared by Duesburys for the tax year ended 30 June 1997. She said that Sky Winner has not lodged with the Australian Taxation Office (ATO) an income tax return for 1998. Ms Li said that as Sky Winner did not trade during the 1999 and 2000 financial periods and was dormant, that no financial statements or tax returns had been prepared in respect of the years ended 30 June 1999 and 30 June 2000.
Ms Li said she was informed by Mr Jin that Sky Winner did not operate a bank account and held only $4.00 in cash during the years ended 30 June 2001 and 2002. She said that Mr Jin had personally paid all of Sky Winner's outgoings and had presumably banked all receipts in his personal bank account during 2001 and 2002 and she therefore relied upon a handwritten invoice book maintained by Mr Jin as the data source (Annexure E to the applicant’s statement (Exhibit A2)) to calculate the gross revenues received and monies paid that she recorded in Sky Winner's profit and loss financial statements for 2001 and 2002 (Annexure 3 of the applicant’s supplementary statement (Exhibit A3)). Ms Li, of course, also used these invoices to calculate the Sky Winner's corresponding entry current liability loan Y Jin of $1346 at 2001 and $1144 at 2002.
Ms Li said that she relied upon the balance sheet prepared by Duesburys for 1998 and explanations and advice from Mr Jin to determine the assets and liabilities she recorded in the balance sheet of Sky Winner as at 30 June 2001 and 2002. Ms Li provided Mr Jin with her completed financial statements for Sky Winner, and also the income tax returns of Sky Winner for 30 June 2001 and 2002 which she signed as the company's tax agent. A copy of the income tax return of Sky Winner for the tax year ended 30 June 2002, which was lodged with the ATO on 25 February 2003 (Exhibit A7), attaches a copy of the above‑mentioned 2002 Sky Winner financial statements prepared by Ms Li and bears a declaration to the ATO signed by Mr Jin that:
…the information provided to the agent for the preparation of the document is true and correct; and the agent is authorised to give the document to the Commissioner of Taxation.

Ms Li said that Sky Winner had received income tax assessments for Sky Winner for 2001 and 2002 from the ATO based upon her above income tax returns, and that no query had been made to date by the ATO in relation to Sky Winner not lodging income tax returns for 1998, 1999 and 2000.

The list of expenses forming part of Sky Winner's income tax return for 2002 includes an amount of $2998 for motor vehicle expenses. Ms Li said that the vehicle expenses represented an allowance of 5 cents per kilometre charges by Mr Jin for the use of his private motor vehicle. Ms Li said that she had not been informed by Mr Jin that Sky Winner owned any motor vehicles during 2001 and 2002. She said I asked him if company hold any assets currently. He said no, just office furniture.
Ms Li resigned from her appointment as the accountant and tax agent of Sky Winner on 20 May 2003 because she said I just find I had communication problem with him.. Ms Li said neither Mr Jin nor the applicant had ever informed her that there were any unrecorded liabilities or assets in the financial statements that she prepared for Sky Winner for 2001 and 2002, nor did Mr Jin ever say to her that the financial statements were incorrect.

The Act provides the following:
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).
(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:
…
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;
The respondent referred the Tribunal to the following Migrant Series Instructions which are followed by decision‑makers in the Department as guidelines in respect of cancellation of business visa decisions:
4.5What is "genuine effort"?
4.5. 1If after 24 months, a migrant is not in business, he/she must establish that a "genuine effort" has been made to engage in business since arrival. The Minister must assess "genuine effort". S 134(3) of the Act lists any or all of the factors which the Minister may take into account:
(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 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 s 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).
[Notes referring to factors listed above. Decision makers may take account of these notes to guide them interpretation of 4. 5. 1.
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.]
4.5.2While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled. The decision maker must give weight to all relevant factors in a case (of which those set out in subsection 134(3) above may only be some) and reach a decision on that basis. For example, while the factors listed in 4.5.1 above may be indicative of "genuine effort", lack of them will not necessarily be decisive. The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made "genuine effort". A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if it is assessed that no genuine effort has been made.
In the reasons for decision in the matter of Re Abraham and Department of Immigration and Multicultural Affairs (1997) 50 ALD 611, Deputy President McMahon made the following observations concerning guidelines. The Tribunal concurs with these observations, particularly in respect of the observations regarding the appropriateness or not of guidelines that go beyond the terms of the Act. The Tribunal shall therefore only take into consideration the above‑mentioned guidelines contained in the Department's Migration Series Instructions whenever relevant and appropriate to do so:
…
(21) It will be seen that the terms of both sets of guidelines bear little resemblance to the words of the statute in s 13 (4) (b) (i). This was pointed out in Re Lo and Department of Immigration and Ethnic Affairs (1993) 32 ALD 235; Re Chai and Minister for Immigration and Ethnic Affairs (1994) 36 ALD 751 and in a number of other cases.
22. The guidelines purport to add requirements additional to those of the statute. All that an applicant need show in order to enliven the discretion, is that he was engaged in activities beneficial to the interests of Australia. In deciding whether the discretion will then be exercised benignly, it seems to me that it is not open to the Minister to tack on further preconditions. Guidelines indicating the way in which a discretion will be exercised can be particularly useful to departmental officers and to applicants. The discretion to be exercised, however, is created by the terms of the statute and must be exercised consistently with the scope and purpose of the creating legislative phrase. Guidelines are appropriate in this case, where they indicate the way in which the Minister will view periods spent in permitted activities.. I do not consider that they are appropriate when they go beyond the terms of the statute and add qualifications which applicants must meet, which have not been considered by Parliament. …
The Tribunal adopted the principle of administrative review of having regard to all of the facts and circumstances that were submitted by parties to have occurred up to the date of the hearing. The Tribunal shall bear in mind the principles propounded by Justice Davies in the decision of Freeman v Secretary, Department of Social Security (1988) 19 FCR 342, which is referred to by Deputy President Handley in the following paragraph extracted from his reasons for decision dated 13 January 2002, in Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54:
…
32. Mr Chami, for the Respondent, drew the Tribunal’s attention to the decision in Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342, where Justice Davies drew a distinction between decisions to cancel a pension or benefit and decisions in respect of a refusal to grant a pension or benefit. In the case of a decision to cancel, the Tribunal is limited to a consideration of events up to the time of the primary decision, whereas in the case of a decision to refuse the grant of a pension or benefit, the Tribunal is not so limited. Mr Chami referred to a number of decisions in which this approach had been followed including two recent decisions by the Tribunal in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783.
The evidence in this matter is that in 1992 Michael Jin established a sole proprietorship in Cairns, Queensland, exporting seafood to Singapore, Hong Kong and other parts of South East Asia. Accordingly, Mr Jin became known to many fishermen and other suppliers of seafood products through Northern Queensland. In 1995, Mr Jin's company Ocean Rise required increased working capital and discussions commenced between the applicant and Mr Jin to form a new business venture in Queensland to export seafood involving dried shark fin and sea cucumber. The applicant was to fund the operations and also to provide Asian market prices to Mr Jin and he would continue to purchase the seafood from fishers of shark fin and commercial suppliers of sea cucumber, for export to Asia at the prices advised to him by the applicant.
In 1996, the applicant and Mr Jin each acquired one share of the total four ordinary shares issued by a company that operated in Cairns named Quality Seafood Pty Ltd. Of the remaining two shares, one share was acquired by Mr Jin's brother and the other share was acquired by a friend of the applicant who also resides in Hong Kong. All four of the shareholders became directors of the company and Mr Jin was also appointed as the secretary of the company. On 23 September 1996, the name of the company was changed to Sky Winner Enterprises Pty Ltd.
The applicant has continued to live in his residence in Hong Kong. On 9 September 1997, the applicant and his family were issued with long‑stay temporary visas by the respondent which permitted them to travel to, enter and remain in Australia until September 1999. They were also granted their business skills visas by the respondent on 26 February 1999. The applicant’s main source of income emanates from his business trading activities in China and accordingly, he has decided to continue to reside mainly in Hong Kong to this time. The applicant’s wife and son relocated from Hong Kong to live in Australia in January 2001.
It is the applicant’s evidence that he visited Australia from Hong Kong for 67 days between the date of the granting of the business skills visa on 26 February 1999 and the cancellation of the visa on 26 February 2002 (Exhibit R1). His visits were not for the purpose of attending and reviewing the business activities of Sky Winner in Queensland but were for the purpose of spending time with his wife and son on vacation in Melbourne. This principal purpose for visiting Australia has continued during the total 24 days that the applicant visited Australia from 27 February 2002 to 6 February 2003.
During the year ended 30 June 1996, Sky Winner had sales of $9440 increasing to $389,083.66 for 1997 and $711,990 in 1998. However, the increasing sales trend did not provide Sky Winner with a corresponding increasing net earnings trend, with profits of $1958 in 1996 and $2625 for 1997 declining to a loss of $3512 in 1998. Also, the contended shark fishing licencing regulations and a dispute with Will and Sue Fraser, a dryer of seafood for export and Sky Winner's principal supplier of sea cucumber, is also said to have adversely affected Sky Winner business plans. Resultantly, Sky Winner ceased business operations and did not prepare financial statements or lodge income tax returns during the financial periods ended 30 June 1999 and 2000.
It is apparent from the evidence that Sky Winner ceased business and became operationally dormant for two years from 1 July 1998, which is a date prior to the respondent granting the applicants their business skills visas on 26 February 1999.
It is the applicant’s evidence that Sky Winner started to venture into tourism in August 2000 and the financial statements of Sky Winner for the year ended 30 June 2001 indicate that the company earned gross revenue of $330 from Guide Services provided in late June 2001. After costs Sky Winner incurred a loss of $356 for 2001. Sky Winner continued to provide guide services to Chinese tourists during the financial year ended 30 June 2002 producing a gross revenue of $8273 and net profit of $3821 for that financial year.
The applicant gave evidence that he was presently undecided whether Sky Winner would proceed with the proposed investment in Tropical Wonderland. He felt that Tropical Wonderland's acquisition price was high and discussions are continuing. He also explained that tourism at the moment for the whole of Asia has come to a temporary halt due to the outbreak of the SARS illness. He said that basically, the whole things halted.
In November 1996 the applicant caused $250,000 to be remitted from Hong Kong to the Australian bank account of Ocean Rise, which is said to be a company owned by Mr Jin. An additional amount of $50,000 was remitted from Hong Kong to Ocean Rise's bank account in March 1997. It appears from Sky Winner's financial statements at 30 June 1997 (Exhibit A1) and the evidence of the Duesburys accountant Mr Phillips, that at least $220,000 of the $300,000 was loaned to Sky Winner during the year ended 30 June 1997. Mr Phillips gave evidence that a proportion of the $220,000 loan from Hong Kong balance at 30 June 1997 was repaid during the year ending 30 June 1998, reducing the Sky Winner loan from Hong Kong to $172,623.50. The loans from Hong Kong were used by Sky Winner to purchase two motor vehicles, office equipment and to fund the purchase of trading stock. The increased ability to acquire marine products for export to Asia resulted in Sky Winner's above‑mentioned increased sales volume trends in 1997 and 1998. It appears from the evidence that the balance of the loans from Hong Kong at 30 June 1998 was repaid by Sky Winner during its non‑trading period in mid‑1998 to mid‑2000. This assumption is supported by the evidence from Ms Li, Sky Winner's most recent accountant. Ms Li said that Sky Winner did not operate a bank account and that she had been informed by Mr Jin that Sky Winner had no loan liabilities other than the small loan to himself of $6221 at 30 June 2001 and $2198 at 30 June 2002. Ms Li's evidence regarding Sky Winner's loan liability position at 30 June 2001 and 2002 is corroborated by the fact that the income tax return for Sky Winner at 30 June 2002 incorporates Ms Li's balance sheet and that tax return bears Mr Jin's declaration to the ATO that the document is true and correct.
The respondent contends that during the period from the granting of the business skills visa to the applicant on 26 February 1999 to the cancellation of the visa on 26 February 2002, the applicant had not obtained a substantial ownership interest in an eligible business in Australia, particularly as he had invested only $1 in the 25 per cent equity acquisition of one share in Sky Winner. Subsection 134(10)(a) of the Act defines ownership interest in relation to a business as a shareholder in a company that carries on the business. The Oxford Dictionary provided the following definition of the word substantial:
…having substance, actually existing, not illusory; of real importance or value, of considerable amount.

The Tribunal was referred by the parties to the matter of Re Wong in which Deputy President Handley considered that a 25 per cent equity interest in a company was substantial. However, in that matter Ms Wong acquired the 25 per cent equity interest in the company for $50,000, which is a substantial amount. Accordingly, this matter is significantly different to Wong because the applicant’s investment in Sky Winner of $1 for his 25 per cent equity shareholding is not a substantial amount; nor does it provide the applicant with a substantial amount of control over Sky Winner as he holds only a minority 25 per cent shareholder equity interest in the company.

As discussed in these reasons for decision, Sky Winner became dormant and ceased business operations before the respondent granted the applicant his business skills visa on 26 February 1999. Sky Winner did not produce financial statements for the period from 1 July 1998 to 30 June 2000. Sky Winner closed its bank accounts during its non‑trading period and has not held any meetings of directors or statutory annual general meetings of its shareholders. Prior to the cancellation of the applicant's business skills visa on 26 February 2002, Sky Winner derived gross revenue of $356 in late June 2001 and up to $8273 in the 2001/2003 financial period. The evidence is that the applicant notified Mr Jin that certain of his Chinese associates should be visiting Australia. The Sky Winner business income was earned from commissions received from Queensland tourist operators as the result of Mr Jin arranging tours and other excursions in Queensland for these Chinese visitors. The Tribunal considers that the tourism business arranged by Mr Jin for Sky Winner was not eligible business that could reasonably be believed to be resulting or will result in any of the eligible business definitions prescribed under subsection 134(10(a), (b), (c), (d), (e) and (f) of the Act.

For the above‑mentioned reasons, the Tribunal finds that the applicant does not satisfy the requirements of subsection 134(1)(a) of the Act, particularly from a business eligibility standpoint during the period between the granting of his business skills visa on 26 February 1999 and the date of the cancellation of his visa on 26 February 2002.
It is clear from the evidence that from the commencement of the applicant’s association in Sky Winner with Mr Michael Jin in 1996, he did not utilise his skills in actively participating at a senior level in the day‑to‑day management of Sky Winner. From 1996 to 1998, Mr Jin and Mr Alex Su attended to the day‑to‑day management of the business, including purchasing and processing seafood, the export of goods to Asia and the accounting and general administration functions of the company. The applicant provided Sky Winner with operating liquidity via his loans from Hong Kong and frequently notified Mr Jin of the prices offered in Asia by Sky Winner's customers for seafood products. The evidence shows that during the 67 days that the applicant spent visiting Australia from Hong Kong from the granting of his business skills visa to the cancellation of his visa, he did not visit Sky Winner's business operations in Queensland and spent the time with his wife and son in Melbourne, Victoria. The day‑to‑day management of the tourism business by Sky Winner in 2001 and 2002 was the responsibility of and carried out by Mr Jin, although the applicant did inform Mr Jin from Hong Kong about the visitors proposed visits to Queensland. The Tribunal finds that the applicant did not utilise his skills in actively participating at a senior level in the day‑to‑day management of Sky Winner pursuant to subsection 134(1)(b) of the Act.
The evidence is that the tourism business that provided income to Sky Winner during 2001 and 2002 is halted at the moment and that the negotiations with Tropical Wonderland to acquire its business have reached a difficult stage due to the high price required. The company named Sino‑Aussie Travel Pty Ltd, which was incorporated on 24 April 2003 and is a commercial partnership arrangement between Sky Winner and a Mr Alan Lu (see paragraph 26 of the applicant’s statement (Exhibit A2)), has not commenced operations. The Tribunal is therefore not satisfied that the applicant intends to make a genuine effort in the future to have a substantial ownership in an eligible business as defined by subsection 124(2)(a) of the Act. Also the Tribunal is not satisfied, based upon the evidence that the applicant will make a genuine effort in the future to utilise his skills to actively participate at a senior level in the day‑to‑day management of Sky Winner business pursuant to subsection 134(2)(b) of the Act.
Subsection 134(4) of the Act prescribes that if the respondent cancels a person's business visa under subsection 134(1), a business visa held by another person who was a member of a family unit of the holder of the cancelled visa and the other person would not have held the visa if he or she had never been a member of the family unit of the holder of the cancelled visa, then the respondent must cancel the other person's visa. Accordingly, the respondent also cancelled the visas held by the applicant’s wife and his son Kelvin pursuant to subsection 134(4) of the Act.
Subsection 134(5) of the Act prescribes that the respondent must not cancel the other persons business visa under subsection 134(4) if the cancellation would result in extreme hardship.
The applicant’s wife Mrs Wong and their son Kelvin arrived in Australia using their business skills visa in January 2001 and therefore lived in Australia for approximately one year prior to the cancellation of their visas on 26 February 2002 and two years approximately prior to the commencement of the hearing of this matter in February 2003. Mrs Wong resides in Australia at East Keilor, a metropolitan suburb of Victoria, and her sister also lives in Melbourne. Mrs Wong also has her home with the applicant in Hong Kong, where the applicant currently resides. She gave evidence that she has been able to tolerate living in Australia while her husband lives principally in Hong Kong. Mrs Wong's three brothers and their wives and children also reside in Hong Kong.
It is Mrs Wong's evidence that the decision to relocate from Hong Kong to Australia was largely to provide Kelvin with access to the Australian education system. Kelvin, who was born in Hong Kong on 24 August 1992, was 8 years of age when he arrived in Australia and had already commenced his school education in Hong Kong. Kelvin is presently 10 years of age and attends school in Australia at St Peters Primary School, East Keilor in Year 5. Mrs Wong believes that Kelvin will encounter difficulties with adjusting to the different education methods and levels existing in Hong Kong. Mrs Wong said that Kelvin's Cantonese language skills have been maintained during his time in Australia and that they speak in the Cantonese language when they are at home in East Keilor.
The Tribunal finds that the cancellation of the business skills visas of Ms Siu Yen Wong and her son Kelvin by the respondent pursuant to subsection 134(4) of the Act will not result in extreme hardship to either Mrs Wong or Kelvin.
The decisions under review are affirmed.

I certify that the seventy‑one [71] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr W.G. McLean, Member

(sgd) Catherine Thomas

Clerk

Dates of Hearing:  14 February 2003
12 May 2003
  16 May 2003
30 May 2003
Date of Decision:  11 July 2003
Counsel for the applicants:          Mr G. Gilbert
Solicitor for the applicant:            Lily Ong

Solicitor for the respondent: Ms v. Priskich, Blake Dawson Waldron