Yeo and Minister for Immigration and Citizenship

[2008] AATA 87

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 87

ADMINISTRATIVE APPEALS TRIBUNAL                No.  2007/0193

GENERAL  ADMINISTRATIVE  DIVISION
Re		SIEW LUAN JOYCE YEO

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal: G.D. Friedman, Senior Member

Date:1 February 2008

Place:Melbourne

Decision: The Tribunal affirms the decision under review.

(sgd) G.D. Friedman

Senior Member

MIGRATION – business skills visa – cancellation – export of consultancy services and health goods – whether eligible business – whether genuine effort to obtain ownership interest – exercise of residual discretion

Migration Act 1958 s 134(1), (2), (3), (10)

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577

Hope v Bathurst City Council (1980) 144 CLR 1

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

Puzey v Commissioner of Taxation [2003] FCAFC 197

Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs [2006] AATA 527
Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152
Re Kok and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 579
Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703

Re Pan and Minister for Immigration and Citizenship [2007] AATA 1724

Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583

Shi v Migration Agents Registration Authority [2007] FCAFC 59

REASONS FOR DECISION

1 February 2008   G.D. Friedman, Senior Member

1.        Joyce Yeo is a Singaporean citizen who was granted a business skills visa on 19 September 2003.  Her visa and secondary visas granted to her husband and two children were cancelled on 5 January 2007 because she had not engaged in business in Australia and had not demonstrated an intention to do so.

2.        The issues before the Tribunal are whether Ms Yeo has a substantial ownership of an eligible business in Australia and, if not, whether she has made a genuine effort to comply with the terms of her visa and whether the residual discretion not to cancel the visa should be exercised.

WHAT WERE MS YEO’S BUSINESS ACTIVITIES?

3.        Ms Yeo told the Tribunal that at the time of the grant of her visa she was working full-time as Senior Vice-President of Internal Audit at Singapore Press Holdings.  On 7 November 2005 she completed the Department of Immigration and Citizenship’s Survey of Business Skills Migrant - 24 Months in which she stated that she had not yet engaged in business in Australia because of the poor health of her mother-in-law, who died on 4 June 2005.  She also stated that contributing factors were her full-time position in Singapore, a lack of business information after her arrival in Australia, and difficulties in sourcing products.

4.        Ms Yeo explained that she had an obligation to remain in Singapore to provide emotional, financial and physical support during evenings and weekends for her mother-in-law, even though her family employed a full-time maid and her husband was one of seven children.  She also emphasised that she could not leave her job until June 2005 because her chosen replacement required extensive training and the planned transfer of duties did not work out.  Ms Yeo said that as a result of the delay she only had one and a half years instead of three years to identify a suitable and viable Australian business.

5.        In relation to her Australian business, Ms Yeo said that on 30 June 2005 Anders + Kern Pty Ltd (Anders) was registered in Victoria, with its main business to be the export of Australian goods and services.  She owns 60 per cent of the shares and her husband and one of her sons are the other directors and shareholders.  Ms Yeo stated that she invested an initial $A104,000 in the business as a loan from herself as managing director.  She said that in January 2006 she explored the possibility of investing in the Gillete Group in Western Australia, and also a mortgage loan franchise and other businesses.  However, these required an investment of $A250,000 and she did not consider the proposals to be viable.

6.        Ms Yeo described her other efforts to develop business proposals.  She said that in April 2006 Anders entered into an agreement with Australian Migration and Recruitment Consulting (AMRC) to provide marketing and promotion services for the migration and student market in South-East Asia, but apart from identifying five applicants the efforts were futile because the applicants did not meet the entry criteria.  She said that Anders has since concentrated on export-driven business.

7.        In her reply dated 11 October 2006 to the Notice of Intention to Consider Cancellation of your Visa Ms Yeo noted that Anders was exploring opportunities in risk management, business innovation and audit services in Singapore and eventually Australia.  She said that in mid-2006 Anders entered into a contract with ACTion Advisory Services Pte Ltd, a business advisory and consultancy company based in Singapore.  This involves Anders charging the company for all services provided by her as consultant acting on a type of outsourcing arrangement.  Ms Yeo produced invoices (Exhibit A4) in the amount of S$3000 each rendered by Anders to ACTion on 2 January 2007 for services provided for the quarter ending December 2006; on 1 April 2007 for services provided for the quarter ending March 2007; and on 1 July 2007 for services provided for the quarter ending June 2007.

8.        In evidence to the Tribunal Ms Yeo explained that she was extremely disappointed when her visa was cancelled on 5 January 2007 because her business ventures were beginning to show real signs of success.  She said that on 17 January 2007 Anders was appointed by AMI Education to recruit students from Asia to study in Australian language schools and other institutions.  She said that this venture was unsuccessful because students preferred to attend prestigious universities.  However Anders has carried out a number of projects for ACTion and has billed the company $A17,000, which is likely to increase as the consultancy becomes more established in Asia and later in Australia.  She referred to Anders’ profit and loss account for 2006/2007 (Exhibit A6) which shows that Anders sent invoices to ACTion for a retainer and consultancy work that was performed by Ms Yeo before and after the date of cancellation to the value of $A14,400.  It also included invoices dated 1 September 2006 to AMRC in the amount of $A3200.  Under cross-examination she agreed that ACTion was co-founded by her in July 2006 and that she has a 40 per cent ownership interest in the business with Mr M. Azam.  She also agreed that ACTion advertising material and brochures describe her as a practitioner and consultant.

9.        In relation to the export of goods, Ms Yeo described her efforts in developing an export market for Australian health products to Singapore.  She said that about four years ago she approached the Australian company Melrose Health and has now reached agreement to export under her own brand.  She said that she has also ensured compliance with all health and agricultural requirements for export and has secured a major distributor of health food products in Singapore.  Ms Yeo noted that her first shipment of 1296 jars of nut spread to Singapore by Anders took place in November 2007.  She stated that she is optimistic that her company will be able to develop the market for premium Australian health and food products in Asia.  She also referred to an agreement between Anders and Anggun International Pte Ltd (Anggun) signed on 27 December 2007 to export flaxseed oil to Singapore and said that the first shipment is due to occur in about March 2008.

10.      Ms Yeo said that she has made a sustained effort to promote Australia by stimulating the export of these products, and that her efforts are now beginning to reap the benefits of the hard work in finding a reliable supplier in Australia and a joint venture distributor in Singapore.  She said that although she spent only 441 days in Australia during the period of the visa, she was able to engage in business activities from Singapore by using the internet and modern communications facilities.

11.      Mr M. Azam, Managing Director of ACTion, told the Tribunal that that ACTion provides advisory services in enterprise risk management, business process innovation, business planning and internal audit services.  He said that he has known Ms Yeo for about 15 years and co-founded the company with her.  Mr Azam stated that Anders offers consultancy services in Singapore provided by Ms Yeo and accounts are received from Anders rather than from Ms Yeo in her personal capacity.  Under cross-examination he agreed that all ACTion literature describes Ms Yeo as a practitioner and a consultant.  He explained that she does not receive a salary for her services because of the commercial arrangement between ACTion and Anders, and that Ms Yeo will share in any profits made by ACTion.  He confirmed that ACTion hopes to expand its activities to include other Asians nations and Australia.

12.      In documents lodged with the Tribunal Mr R. Woo, Director of Gromax Pty Ltd, stated that he has a distribution network in Singapore, Malaysia and Thailand specialising in organic and health food.  He confirmed that he has established a joint venture partnership with Ms Yeo for the distribution of health products exported from Australia under Ms Yeo’s brand and that the first shipment of nut spreads to Singapore has occurred.  He said that health products are popular in Singapore among the affluent and health-conscious segments of the market, and that regular shipments are expected.  Mr Woo stated that a number of additional products will be tested using an e-commerce model and that Anders will arrange for purchase and shipping when demand has been identified.

13.      Mr G. Steinicke, Managing Director of Melrose Health told the Tribunal that Ms Yeo approached him several years ago and has developed her own labels for the export of nut spread to Singapore.  The first shipment occurred in November 2007.  A shipment of flaxseed oil, under Ms Yeo’s label, is soon to be finalised.  Mr Steinicke described Ms Yeo as thorough and hard-working.  He also said that enquiries have been received for a large range of the company’s products which would be exported to a number of Asian countries by Ms Yeo’s company.  Mr Steinicke said that he founded his company 28 years ago and is aware that the export of food products is a complex and time-consuming process.

14.      Ms S. Mohamad, Director of Anggun, told the Tribunal that her company specialises in health and wellness products and has arranged for the import of flaxseed oil from Australia through Anders in about March 2008.  She said that she has been impressed with the efforts of Ms Yeo and is considering importing other Melrose products.

WHAT IS THE LEGISLATIVE FRAMEWORK?

15. Section 134(1) of the Migration Act 1958 Act provides:

(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.

HAS MS YEO OBTAINED SUBSTANTIAL OWNERSHIP INTEREST IN AN ELIGIBLE BUSINESS IN AUSTRALIA?  

16.      Section 134(10) of the Act defines eligible business as one that the Minister reasonably believes is resulting in 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.

17.      In Hope v Bathurst City Council (1980) 144 CLR 1 the High Court held that carrying on a business denotes pursuing activities for the purpose of profit, undertaken on a continuous and repetitive basis. In Puzey v Commissioner of Taxation [2003] FCAFC 197 the Full Federal Court stated that a business requires some repetition of acts and something of a permanent character.

18.      Ms Yeo owns 60 per cent of Anders, so she has a substantial ownership interest in the company.  On the question of whether Anders is an eligible business, the Tribunal takes into account that Anders was registered as an Australian company on 30 June 2005 and engaged in limited transactions in the period until the cancellation of the visa on 5 January 2007.  In respect of the agreement with AMRC to provide marketing promotional services in the areas of migration and student recruitment, Anders had rendered invoices in relation to three prospective migrants for about $A3200.  In respect of work performed for ACTion, Anders had also rendered an invoice for S$3000 for the period October to December 2006.  Other activities by Anders appear to relate to work performed and invoices rendered after cancellation. This includes an agreement with AMI Education on 17 January 2007 which did not lead to any recruitment of overseas students.

19.      In respect of ACTion, the Tribunal takes into account that Anders’ profit and loss account for 2006/2007 (Exhibit A6) shows that Anders sent invoices to ACTion for a retainer and consultancy work that was performed by Ms Yeo before and after the date of cancellation to the value of $A14,400, although most of her work appears to have been directly for ACTion, where she is a principal consultant, co-founder and a director with an ownership interest.  The Tribunal notes that the agreement between Anders and Growmax to export nut spreads to Singapore was signed on 18 September 2007 (more than eight months after cancellation of the visa), with the first shipment occurring in November 2007.

20.      Although export agreements may involve detailed and protracted negotiations, in this case the Tribunal is satisfied that on balance, the various activities engaged in by Anders before the date of cancellation, or commenced before cancellation but extending after that date (Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 703) do not constitute repetitive and continuous activity and a real effort to make a profit.

21.      The Tribunal is satisfied that at the date of cancellation of the visa (Shi v Migration Agents Registration Authority [2007] FCAFC 59) Anders did not engage in a range of activities which the Tribunal believes is resulting in or will result in any of the factors in s 134(10) of the Act. For these reasons the Tribunal finds that Anders is not an eligible business for the purposes of the Act, and is satisfied that Ms Yeo has not obtained a substantial ownership interest in an eligible business in Australia (s 134(1)(a) of the Act) and she does not satisfy s 134(1) of the Act.

HAS MS YEO MADE A GENUINE EFFORT TO OBTAIN OWNERSHIP OF AN ELIGIBLE BUSINESS OR TO USE HER SKILLS IN SENIOR MANAGEMENT?

22.      Section 134(2) and (3) of the Act provide:

(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).

23.On 15 March 2007 the respondent issued a new Procedures Advice Manual 3 (PAM3) which sets out the procedures to be followed in the making of decisions under s 134 of the Act.  PAM3 replaced Migration Series Instruction 133 (MSI-133) and was issued pursuant to s 499 of the Act which authorises the Minister to give written directions to decision-makers.  The Tribunal accepts that PAM3 is a relevant consideration in its decision-making process (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577) and is the correct policy to be applied at the time of the Tribunal’s decision (Rokobatini v Minister for Immigration Multicultural Affairs (1999) 90 FCR 583).

24.      In paragraph 9.2 of PAM3 genuine effort refers to evidence that the visa holder has exerted himself or herself to get into business in Australia or be involved in the management of the business at a senior level on a day-to-day basis.  It also refers to an expectation that the visa holder will continue to make sustained and continued efforts to meet visa requirements throughout the three-year period.  PAM3 lists the following factors which aim to assist decision‑makers in determining whether a genuine effort has been made under s 134(3) of the Act:

·business proposals/plans which are genuine, realistic and achievable;

·the existence of partners or joint venturers by formal contract or written agreement;

·continuous and genuine business research such as written evidence of detailed consultations with business advisors (accountant, lawyer, bank/financial institution, business/trade association);

·physical presence in Australia for a significant time;

·transfer or investment of sufficient funds (other than for personal use) to ensure that the business meets the requirements of an eligible business;

·failure to comply with a notice for information under s 137, including notification of address and return of relevant survey forms.

25.      In Re Kok and Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 579 the Tribunal held that for an effort to be genuine it must not be false or fictitious and the level of effort must be something that is real and beyond that which is purely superficial or token. In assessing Ms Yeo’s claims against the guidelines and s 134(3) of the Act, the Tribunal takes into account that from the date of the grant of her visa on 19 September 2003 to the date of her mother-in-law’s death on 4 June 2005 Ms Yeo did not pursue her business activities in Australia. Although Ms Yeo stated that she had an obligation to provide care for her mother-in-law the Tribunal notes that Ms Yeo’s husband was one of seven children living in Singapore; one of the sons lived with the mother-in-law; and the family engaged a live-in maid. By her own evidence Ms Yeo would have been able to carry out much of her business activities using the internet and other electronic or telephone methods, and in the period from the grant of the visa until the mother-in-law’s death there were opportunities for her to visit Australia and to comply with the requirements of her visa. The Tribunal accepts that, in addition to the ill-health of her mother-in-law, one of the reasons Ms Yeo remained in her full-time employment until June 2005 was that she had difficulty in finding and training a replacement.

26.      The Tribunal takes into account that Ms Yeo arranged one export shipment of nut spreads through Anders in November 2007 and that a shipment of flaxseed oil is proposed under an agreement with Anggun Pte Ltd made in December 2007.  However the only business plan by Anders appears to relate to the advisory service for educational institutions, which was discontinued because it was unsuccessful.

27.      In respect of Anders’ services provided to ACTion, the material before the Tribunal leads to the conclusion that Ms Yeo has provided those services as a consultant, director and co-founder of ACTion, and the Tribunal does not accept that the reason that invoices were rendered by Anders to ACTion for the work performed by Ms Yeo in Singapore was to promote Anders’ consultancy activities in Australia.  Ms Yeo has spent 441 days in Australia during the period of the visa. The company was not registered until 30 June 2005 and was given a tax file number on 6 October 2005, suggesting that the business activities were not given a high priority for nearly two years after the grant of the visa. The only real evidence of business partners refers to the agreements made many months after the date of cancellation to export nut spreads and flaxseed oil.  Ms Yeo has made a loan to Anders of $A104,000 and  she has replied to requests by the Department for material.

28.      After considering all the relevant factors in s 134(3) of the Act, the Tribunal finds that Ms Yeo’s efforts during the period of the visa do not constitute a genuine effort to obtain a substantial ownership interest in an eligible business in Australia (s 134(2)(a) of the Act).  Therefore she does not satisfy s 134(2) of the Act.

SHOULD THE RESIDUAL DISCRETION NOT TO CANCEL THE VISA BE EXERCISED?

29.      In Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at [21] Kiefel J referred to a residual discretion which arises notwithstanding the applicant failing the tests in s 134(1) and s 134(2) of the Act:

The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them.

In Re Chin Lai and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 152 the Tribunal stated at [44]:

The exercise of the discretion requires that the applicant offer an explanation for his or her inaction that is satisfactory, as a precondition to the grant of further time or other exercise of the discretion in the applicant’s favour.

30.      In Re Ah Kow Phoon and Minister for Immigration and Multicultural Affairs [2006] AATA 527 the Tribunal referred to the need to demonstrate a sufficient level of sustained commitment over a 24-month period. In Re Pan and Minister for Immigration and Citizenship [2007] AATA 1724 the Tribunal exercised the discretion not to cancel the visa because serious negotiations for large-scale ethanol and bio-diesel projects with significant benefits likely to accrue to Western Australia were found to be genuine, although they began after the date of cancellation, and the projects were considered to be in jeopardy if the visa was cancelled.

31.      The Tribunal agrees that the discretion is designed to give the decision-maker flexibility to deal with unanticipated circumstances.  However Ms Yeo did not make an effort to comply with the terms of her visa for nearly two years.  She exported one shipment of nut spreads to Singapore eight months after the cancellation of the visa, and an export shipment of flaxseed oil is expected in March 2008.  Although Ms Yeo has worked hard in recent months to comply with the complex requirements involved in the export of health products from Australia to Singapore and there have been enquiries in January 2008 about the export of other products, she seems to have devoted most of her efforts during the period of the visa to developing and furthering the interests of ACTion in Singapore, rather than the interests of Anders in Australia.

32.      For these reasons the Tribunal concludes that the residual discretion not to cancel the visa should not be exercised.

DECISION

33.      The Tribunal affirms the decision under review.

I certify that the thirty-three [33] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Senior Member

(sgd) Mara Putnis

Associate

Dates of hearing:  27 September 2007, 25 January 2008
Date of decision:  1 February 2008
Advocate for applicant:                Self-represented

Advocates for respondent:          Ms E. Samra (27 September 2007), Mr T. Eteuati (25 January 2008)

Solicitor for respondent:              Clayton Utz