Weiner and Minister for Immigration and Citizenship

[2008] AATA 164

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 164

ADMINISTRATIVE APPEALS TRIBUNAL      )

)    No 2007/2460

GENERAL ADMINISTRATIVE DIVISION        )

ReTREVOR BARRY WEINER

Applicant

AndMINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

TribunalSenior Member M D Allen

Date28 February 2008

PlaceSydney

DecisionThe decision under review is affirmed.

................[sgd].....................

M D Allen
  Senior Member

CATCHWORDS

BUSINESS SKILLS VISA – review of decision cancelling applicant’s business skills visa – whether applicant has a substantial ownership interest in; and utilises his skills in actively participating at a senior level in the day-to-day management of; an eligible business in australia – whether a business is being carried on – whether applicant has made a genuine effort to comply with visa conditions – residual discretion not to cancel business skills visa – decision under review affirmed

LEGISLATION:

Migration Act 1958 sections 134, 1349(1), 134(2), 134(3) and 134(10)

CASE LAW

Hope v Bathurst City Council (1980) 144 CLR 1

Thomas v Federal Commissioner of Taxation (Cth) (1972) 46 ALJR 397

Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31

REASONS FOR DECISION

28 February 2008	Senior Member M D Allen
Summary

1.      By application made 8 June 2007, the Applicant sought review of a decision by a delegate of the Respondent to cancel his Business Skills Visa effective 28 May 2007.

2.      That delegate also cancelled the subsidiary visas issued to the Applicant's wife and two sons because they held their visas as members of the Applicant’s family.  No applications have been made to the Tribunal with respect to those visas.

3. The Applicant’s visa was cancelled pursuant to section 134 of the Migration Act 1958. So far as is relevant, that section reads:

…

Cancellation of business visas

(1)Subject to subsection (2) and to section 135, the Minister may cancel a business visa …, by written notice given to its holder, if the Minister is satisfied that its holder:

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

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

(c)does not intend to continue to:

(i)    hold a substantial ownership interest in; and

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

an eligible business in Australia.

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

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

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

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

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

(a)business proposals that the person has developed;

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

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

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

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

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

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

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

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

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

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

…

(10)In this section:

…

“eligible business” means a business that the Minister reasonably believes is resulting or will result in one or more of the following:

(a)the development of business links with the international market;

(b)the creation or maintenance of employment in Australia;

(c)the export of Australian goods or services;

(d)the production of goods or the provision of services that would otherwise be imported into Australia;

(e)the introduction of new or improved technology to Australia;

(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.

…

4.      Originally, the Applicant applied for a Business Skills Visa by an application that was lodged with the Australian High Commission in Pretoria on 10 May 2002.  A Business Skills Visa was granted on 3 September 2003.  At the time the Applicant applied for his Business Skills Visa, he signed a declaration acknowledging the requirements of the visa (see supplementary T document S1, p29).

5.      Paragraphs 3 and 5 of that declaration read:

…

3.I understand and acknowledge that if the Minister cancels my visa, the visas of all members of my family unit may also be cancelled, and that I and the members of my family unit may be required to leave Australia.

4.…

5.I agree to notify DIMA of my residential address within 28 days of my first entry to Australia as a migrant.  Further, for 3 years after my first entry to Australia, I will notify DIMA of any subsequent changes in my residential address, within 28 days after I change my address, including any residential address I may have outside Australia.

…

Paragraphs 1 and 2 of the said document specifically set out the requirements of what is an eligible business and the requirement to obtain a substantial ownership interest in such a business and actively participate in its management.

6.      The Applicant first entered Australia as the holder of a Business Skills Visa on 6 February 2004 departing on 16 February 2004.  Since that time up to the cancellation of his visa on 28 May 2007, the Applicant spent a total of 31 days in Australia.

7.      The Applicant gave evidence that he is the managing director of a company in South Africa, Character Linens Pty Ltd.  He and his wife (who is also a director) own 90 percent of the shares in that company.  Character Linens’ business is the distribution to retail outlets in South Africa of manchester items under licensing agreements.  These items are branded; that is they have a football club insignia, for example Manchester United or some other European football club, or are themed, for example a character such as “Spiderman” or a Disney character on them.

8.      Most of the goods are sourced from China although Character Linens also sources and imports into South Africa goods from Egypt and Pakistan.  An important aspect of the business of Character Linens is quality control and in particular, some licenses, for example the Disney Group have very strict conditions as to who may supply the goods and the ethical as well as quality standards applied by authorised manufacturers.

9.      In addition, the Applicant is concerned in property development both in Johannesburg and in Cape Town, together with manufacturing businesses.

10.     The Applicant and his family visited Australia in 2000 and an in-principle decision was made to migrate.  Unfortunately, in June 2001 the family suffered a tragedy and as a result the Applicant’s wife became reticent about migrating to Australia.  In 2006 or 2007, those difficulties were overcome.

11.     Upon his first visit to Australia subsequent to the granting of the visa, the Applicant, to use his words, “set up” a company named Mirage Commercial Services Pty Ltd.  The initial investment in that company by the Applicant and his wife was $A100,000 but the company now has a capital of $A300,000.

12.     Mirage has no premises of its own but operates out of the offices of an incorporated practice of accountants, Baskin & Clarke Pty Ltd.  Mirage’s email is that of the Practice and Mr Baskin gave evidence that any work for Mirage is carried out by his personal assistant.

13.     Cross-examined the Applicant conceded that in the first two years of its existence, the only income earned by Mirage was interest on a fixed deposit.

14.     Exhibit A5 is a copy of an agreement entered into between Character Linens, the Applicant's South African company and Mirage with an effective date of 1 May 2006.  Pursuant to that agreement, Mirage was constituted a “buying agent” for Character Linens.  Exhibit A6 is a copy of an agreement between Character Linens and Anhui Garment Imp and Exp. Co Ltd, a mainland Chinese company, pursuant to which the Chinese company supplies goods to Character Linens.  Mirage is nominated in that agreement as Character Linens’ “buying agent”.

15.     As I understand the evidence, on four occasions Mirage acted as an intermediary between the Chinese company and Character Linens.  Although the goods were purchased by Mirage and monies transmitted by that company to the Chinese company, the goods were shipped direct to South Africa and the South African company put Mirage in funds to effect the purchases.

16.     As the Applicant conceded in cross-examination, the only profit made by Mirage from these dealings was interest on the funds deposited to pay for the purchases and a small administration fee plus commission.  (The agreement nominates commission at five percent.)

17.     More to the point, the Applicant agreed that the transactions could have taken place without the involvement of Mirage.

18.     Apart from the incorporation of Mirage, the Applicant's other activities in Australia has been the purchase of a house property at Bellevue Hill, Sydney, New South Wales, and an interest in a property development at Dover Heights, Sydney.  The property development has not yet proceeded and the Bellevue Hill property is leased up to May 2008.

19.     For the Respondent it was submitted that the Applicant had not established a business in Australia.

20.     The test of whether a business is being carried on or not was formulated by Mason J (as he then was) in Hope v Bathurst City Council (1980) 144 CLR 1 at 8, namely “business” in its ordinary or popular meaning, denotes activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purposes of profit on a continuous and repetitive basis.

21.     Notwithstanding the remarks quoted above, Mason J expressly went on to point out at 144 CLR p10 that it was an error to have regard to the magnitude or size of the activity.  His Honour referred to Walsh J in Thomas v Federal Commissioner of Taxation (1972) 46 ALJR 397 at 401, stating:

…

“His Honour had expressly conceded that a man may carry on business though in a small way.”

…

22.     To my mind however, the activities carried on by Mirage in Australia did not have that indicia of being engaged in on a continuous or repetitive basis for profit.  Its business, apart from the passive accumulation of interest, was conducted on four occasions only.

23.     Further, the evidence persuades me that the activities undertaken by Mirage were in reality undertaken as part of the business carried out by Character Linens in South Africa.  Mirage was no more than a conduit between the supplier and the ultimate recipient of the goods, and as the Applicant conceded, there was no requirement for Mirage to be involved at all.  Mirage itself has no customers, nor has it directly of itself conducted any activities that can be classified as a business.

24.     The actual contacts giving rise to the transactions were by the Applicant in advancing the business of his South African company.

25.     As I said in the course of argument, Mirage was a good name for the Australian company as it was clearly set up to give an impression of business activity where in fact none existed.

26. Even if I am wrong as regards Mirage business activities, it is clear that it does not constitute an “eligible business” as that term is defined in ss 134(10) of the MA.

27.     There is no evidence that up to the cancellation date Mirage had developed any business links with the international market.  The Applicant does have such links but as part of his South African activities.  Mirage has no continuous sales, contracts or signed agreements to provide goods.

28.     Mirage has not created any employment in Australia.  The activities of the company are according to Mr Baskin, carried out by his personal assistant part-time.

29.     No goods or services have been exported from Australia by Mirage.

30.     No goods have been produced or services provided that would otherwise be imported into Australia due to activities undertaken by Mirage.

31.     No new or improved technology has been introduced into Australia by Mirage.

32.     That Mirage has been incorporated and Baskin Clarke draws fees administering it does not evidence that Mirage has in any way increased commercial activity and competitiveness within sectors of the Australian economy.  Similar comments apply to the activities of Mirage as a buying agent for a South African company, with direct shipment of goods from China to South Africa.

33.     Subsection 134(2) of the MA states inter alia that the Respondent must not cancel a Business Skills Visa if he is satisfied that the visa holder has made a genuine effort to comply.  In this matter I am satisfied that the Applicant has continued to devote himself to his South African business activities and has not made any genuine effort, as apart from a token entity, of obtaining a substantial ownership in an eligible business in Australia or utilised his skills in actively participating at a senior level in the day-to-day management of that business.

34.     Whether or not the Applicant’s business activities are undertaken in Australia or elsewhere, in this matter I am satisfied that the Applicant’s involvement in the affairs of Mirage are as an adjunct to his South African activities, plus being designed to give an appearance (without the reality) of activity in Australia.

35.     The only other matter I need to consider is the general discretion not to cancel: see Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31.

36.     In this matter I see no grounds for the exercise of any discretion.

37.     At the time the Applicant applied for his Business Skills Visa, he signed a declaration stating that he understood the requirements of a Business Skills Visa.  At the time he was informed of the grant of his visa, he was again informed in detail of the requirements of a Business Skills Visa and what was required of him.  He was also informed that the minister had the power to cancel the visa if specified conditions were not met (see document S1, pp36 to 39).

38.     Since the grant of his visa and up to cancellation, the Applicant has spent 31 days in Australia.  The application form clearly spells out that it is envisaged that the visa holder will migrate to Australia.  Paragraph 5 of the declaration in the application form has been referred to in paragraph 5 of these reasons.

39.     If, as stated in evidence, family circumstances mitigated against a move from South Africa to Australia, then the application for a visa should have been postponed.  I note however that the family circumstances referred to by the Applicant occurred in July 2001 and the visa application was made in May 2002.

40.     The Applicant also submitted a number of statements from Chinese companies regarding his involvement in Mirage.  All these statements follow the same wording and the Applicant conceded they were arranged by his Hong Kong agent.  A further letter from his South African company Character Linens, is in remarkable similar words and phrasing.  I place no reliance upon these documents.

41. Although the Applicant’s solicitor submitted that the terms of s 134 of the MA should be read down in favour of an Applicant, I reject that approach. The legislation is not beneficial legislation, but grants a privilege, namely a visa to enter into and reside in Australia, and I see no reason why the terms of that permission should not be adhered to.

42.     Likewise, although the Applicant states he is now ready to fulfil his visa conditions, the visa was granted in 2004 and as at 28 May 2007, the conditions had not been met.  Further, I am satisfied that at all times the Applicant well knew the criteria he had to meet.

43.     The decision under review is affirmed.

I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen

Signed:   .....[sgd]......
               Mwela Kapapa, Associate

Date/s of Hearing:  18 February 2008
Date of Decision:  28 February 2008
Solicitor for the Applicant:                  Diamond Conway Lawyers
Solicitor for the Respondent:             DLA Phillips Fox