Zhang and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Migration)
[2021] AATA 1051
•29 April 2021
Zhang and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Migration) [2021] AATA 1051 (29 April 2021)
Division:GENERAL DIVISION
File Numbers: 2019/6922, 2019/6962, 2019/6963
Re:Zhimin Zhang, Zhiying Xu and Xinsong Zhang
APPLICANTS
AndMinister for Immigration, Citizenship, Migrant Services and Multicultural Affairs
RESPONDENT
DECISION
Tribunal:Deputy President Boyle
Date:29 April 2021
Place:Perth
The decisions of the delegate of the Respondent made on 21 October 2019 to cancel the Applicants’ Business Skills – Business Talent (Migrant) (Class EA) (Subclass 132) visas pursuant to s 134(1) of the Migration Act 1958 (Cth) are affirmed.
...[SGD].....................................................................
Deputy President Boyle
CATCHWORDS
MIGRATION – cancellation of business visas – whether the First Applicant has obtained substantial ownership interest in an eligible business in Australia – definition of eligible business – meaning of “business” – no eligible business found – First Applicant is not utilising his skills in actively participating at a senior level in the day-to-day management of the business – whether a bar under s 134(2) of the Act applies – no evidence that cancellation of the visas would cause the First Applicant’s wife or son extreme hardship – reviewable decisions affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – ss 37, 39
Migration Act 1958 (Cth) – ss 134, 134(1), 134(2), 134(2)(a), 134(2)(b), 134(2)(c), 134(5), 134(10), 136
Migration Regulations 1994 (Cth) sch 2, cl 457.223(1), reg 1.20D(2)(a)(i)
CASES
Abebe v Commonwealth (1999) 197 CLR 510
Chen v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 1496
Chen v Minister for Immigration & Anor [2011] FMCA 23
Essof v Minister for Immigration [2009] FMCA 13
Howard and Minister for Immigration and Citizenship [2010] AATA 989
Khemlani and Ors and Minister for Immigration and Citizenship [2013] AATA 401
Kim v Minister for Immigration Multicultural and Indigenous Affairs [2004] FCA 31
Koosasi and Minister for Immigration and Citizenship [2007] AATA 1311
Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184
Lu v Minister for Immigration [2009] FMCA 891
Lu v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 340
Kim & Darmawan v Minister for Immigration and Ethnic Affairs (1995) 37 ALD 481
Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 579
Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448
Ng and Minister for Immigration and Multicultural Affairs [2003] AATA 299
Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178
Philp and Minister for Immigration and Citizenship [2007] AATA 2092
Re Australian Industrial Relations Commission; ex parte Australian Transport Officers Federation (1990) 171 CLR 216
Shead v Minister for Immigration and Multicultural Affairs (2001) 113 FCR 479
Sullivan v Department of Transport (1970) 20 ALR 323
Weng and Minister for Immigration and Citizenship [2010] AATA 60
Weng v Minister for Immigration and Citizenship [2010] FMCA 670
Weng v Minister for Immigration and Citizenship (No 2) [2011] FCA 444
SECONDARY MATERIALS
Department of Immigration and Border Protection, Procedures Advice Manual (1 July 2020)
REASONS FOR DECISION
Deputy President Boyle
29 April 2021
THE APPLICATION
The Applicants seek review of the decisions of a delegate of the Respondent made on 21 October 2019 to cancel the Applicants’ Business Skills – Business Talent (Migrant) (Class EA) (Subclass 132) visas (visas) pursuant to s 134(1) of the Migration Act 1958 (Cth) (Act).
The Applicants’ visas were cancelled under s 134(1) of the Act. Under s 136 of the Act an application can be made to the Tribunal for the review a decision under s 134 of the Act. The Tribunal is satisfied that it has jurisdiction to review the decisions.
BACKGROUND
The background facts set out in the following paragraphs are taken primarily from the Respondent’s Statement of Facts, Issues and Contentions filed with the Tribunal on 20 October 2020 (Respondent’s SFIC) and are not contentious. The first-named Applicant, Zhimin Zhang, is hereinafter referred to as the First Applicant. The second-named Applicant, Zhiying Xu, is the First Applicant’s wife and is hereinafter referred to as the wife. The third-named Applicant, Xinsong Zhang, is the son of the First Applicant and the wife. He is hereinafter referred to as the son.
The Applicants are Chinese citizens. The First Applicant was granted his visa on 4 August 2016.[1] The wife and the son were both dependent applicants to the First Applicant’s visa application and were granted their visas on the same day.[2]
[1] R1, T24/221.
[2] R2, T6/25; R3, T6/30.
On 30 July 2018 the Department of Immigration and Border Protection (the Department) sent a letter to the First Applicant requesting that he complete and return a Survey of Business Skills Visa Holders (Form 1010) together with supporting documentation.[3] The letter from the Department indicated that the information provided would be used to assess whether the Applicant had obtained a substantial ownership interest in an eligible business in Australia, was actively participating at a senior level in the day-to-day management of that business, intended to continue operating such a business and had made genuine ongoing efforts to engage in eligible business activity.
[3] R1, T6.
On 27 August 2018 the First Applicant, through his migration agent Mr Harry Cao, sought and was granted a seven-day extension of the time to return the survey.[4] By emails dated 4 and 7 September 2018 the First Applicant provided a completed Form 1010[5] together with other evidence in support of his claim to being involved in the day-to-day management of a business.[6]
[4] R1, T7/23.
[5] R1, T8/56–64.
[6] R1, T8–9.
On 14 March 2019 the Department requested further information from the First Applicant.[7] The First Applicant, through Mr Cao, sought an extension of the time within which to respond to the request.[8] The extension of time sought by the First Applicant was granted.
[7] R1, T10.
[8] R1, T11/105.
On 2 July 2019 the First Applicant provided a second Form 1010[9] and other supporting evidence.[10] On 15 July 2019 Mr Cao provided further submissions on the First Applicant’s behalf responding to the Department’s request for information.[11]
[9] R1, T12/109–115.
[10] R1, T12/116–125.
[11] R1, T13/128–133.
By letter dated 18 July 2019, the Department notified the First Applicant of its intention to consider cancelling the visas (NOICC) under s 134(1) of the Act.[12] On 15 August 2019 the First Applicant, through Mr Cao, provided evidence and submissions in response to the NOICC.[13]
[12] R1, T14.
[13] R1, T15–23.
On 21 October 2019 the delegate of the Respondent cancelled the Applicants’ visas.[14]
[14] R1, T24; R2, T6; R3, T6.
By applications lodged in the Tribunal on 24 October 2019, the Applicants each applied for review of the delegate’s decisions pursuant to s 136 of the Act.
LEGISLATIVE FRAMEWORK
Section 134 of the Act relevantly 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) if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c)does not intend to continue to:
(i)hold a substantial ownership interest in; and
(ii)utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
(2)The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a)has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b)has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and
(c)intends to continue to make such genuine efforts.
(3)Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a)business proposals that the person has developed;
(b)the existence of partners or joint venturers for the business proposals;
(c)research that the person has undertaken into the conduct of an eligible business in Australia;
(d)the period or periods during which the person has been present in Australia;
(e)the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f)the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g)business activity that is, or has been, undertaken by the person;
(h)whether the person has failed to comply with a notice under section 137;
(i)if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:
(i)the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii)the reasons why the person no longer holds the interest or participates in the management (as the case requires).
(3A)Subject to section 135, the Minister may cancel an investment-linked visa (other than a family member's visa) if the Minister is satisfied that the person, or any of the persons, who held the relevant designated investment when the visa was granted has or have ceased, for any reason, to hold that investment within 3 years of that investment being made.
(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.
(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)
…
eligible businessmeans 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.
(Original emphasis.)
THE ISSUES
The Applicants’ Statement of Facts, Issues and Contentions (Applicants’ SFIC) lodged on 30 September 2020 did not separately identify the issues which the Applicants say are to be determined in these proceedings. The Respondent’s SFIC identified the issues to be determined as follows:
(a)Firstly, whether the Tribunal is satisfied that a condition for visa cancellation exists, that is, the applicant:
(i)Has not obtained a substantial ownership interest in an eligible business in Australia (s 134(1)(a)); or
(ii)Is not utilising his skills in actively participating at a senior level in the day-to-day management of that business (s 134(1)(b)); or
(iii)Does not intend to continue to hold a substantial ownership interest in an eligible business in Australia and does not intend to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia (s 134(1)(c)).
(b)Secondly, if the Tribunal finds that at least one of the s 134(1) conditions is satisfied, it must then decide whether all of the bars to cancellation in s 134(2) are met by determining whether the applicant:
(i)Has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia (s 134(2)(a)); and
(ii)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 (s 134(2)(b)); and
(iii)Intends to continue to make such efforts (s 134(2)(c)).
(c)Thirdly, if the Tribunal is satisfied that the applicant does not meet all of the three bars of cancellation in s 134(2), it must then consider whether it should, having regard to all the circumstances, exercise its residual discretion not to cancel the visa.
(d)Fourthly, if the Tribunal finds that the first applicant’s visa should be cancelled, it must determine whether the cancellation of the dependent applicants’ visas would result in extreme hardship, such that the dependent applicant’s visa cannot be cancelled (s 134(5)).
(Original emphasis.)
The Tribunal agrees with the Respondent’s formulation of the issues for determination in these proceedings. The parties’ respective submissions and the evidence presented by the Applicants dealt with the issues as so identified.
THE HEARING
By direction of the Tribunal made on 9 January 2020, the three applications were joined, programmed and heard together. The applications were heard on 16 November 2020. The Applicants were represented by counsel, Mr L Boccabella and the Respondent was represented by Mr A Burgess. At the conclusion of the hearing on 16 November 2020, directions were made for the filing of written closing submissions by the Applicants on or before 27 November 2020, by the Respondent on or before 18 December 2020 and submissions in reply by the Applicants on or before 24 December 2020.
Closing submissions were not provided by the Applicants in accordance with the above directions and no indication was received from the Applicants as to when those closing submissions would be received. Accordingly, on 22 December 2020 the Tribunal relisted the hearing of the matters for 11 February 2021 for the parties to make oral closing submissions. The hearing of the matters resumed on 11 February 2021 with the parties attending by telephone. Mr Boccabella advised the Tribunal that the written closing submissions had not been provided by the Applicants in accordance with the directions made on 16 November 2020 due to his illness. A document headed “Applicants’ Post hearing submissions” (Applicants’ closing submissions) was electronically filed with the Tribunal on the morning of 11 February 2021.
The following witnesses gave evidence at the hearing on 16 November 2020:
(a)The First Applicant;
(b)Mr Wuyuan Chen; and
(c)Mr Michael Chan.
The following documents were admitted into evidence:
(a)Statement of the First Applicant sworn 30 September 2020 (Exhibit A1);
(b)Statement of Michael Henry Chan dated 23 July 2020 (Exhibit A2);
(c)Statement of Wuyuan Chen dated 22 May 2020 (Exhibit A3);
(d)Up-to-date business activity in Australia document as at 25 May 2020 (Exhibit A4);
(e)Attachment to the Applicants’ SFIC dated 30 September 2020 (Exhibit A5);
(f)Section 37 T documents in application 2019/6922 (Exhibit R1);
(g)Section 37 T documents in application 2019/6962 (Exhibit R2); and
(h)Section 37 T documents in application 2019/6963 (Exhibit R3).
In addition to the documents admitted into evidence, the parties filed the following documents:
(a)Applicants’ SFIC.
(b)Applicants’ opening remarks filed on 16 November 2020.
(c)Applicants’ closing submissions of 11 February 2021. The Tribunal notes that these closing submissions and 63 pages of transcript attached (apparently) to the submissions, were not provided to the Tribunal by the Applicant’s lawyers and were, after the resumed hearing was stood down for a short time on 11 February 2021, provided to the Tribunal by the Respondent.
(d)Relevant extract of Department Procedures Advice Manual (PAM3) relating to cancellations of visas under s 134 of the Act.
CONSIDERATION
The Applicants and the Respondent made submissions on the operation of s 134 of the Act. They were materially to the same effect. By his SFIC, the Respondent contended that the use of “or” between the sub-ss in s 134(1) makes it clear that, if the Minister, or in this case the Tribunal, is satisfied that one of the “conditions” (citing Chen v Minister for Immigration & Multicultural & Indigenous Affairs[15] (Chen) at [12] per Drummond J) or “grounds” (to use the language of PAM3) is satisfied, a discretion is enlivened to cancel the visa (citing Chen at [12] and Lu v Minister for Immigration[16] (Lu) at [59] per Barnes FM). In determining whether any of the conditions exists, a decision-maker must reach a positive state of satisfaction that at least one of sub-ss (a), (b) or (c) is satisfied.[17]
[15] [2002] FCA 1496 (Chen).
[16] [2009] FMCA 891 (Lu).
[17] Weng v Minister for Immigration and Citizenship (No 2) [2011] FCA 444 at [42] per McKerracher J.
The use of the conjunctive “and” between the sub-ss in s 134(2) demonstrates that, in order for the “bars to cancellation”[18] to be operative, a visa holder must satisfy all three criteria in sub-ss (2)(a), (b) and (c).[19]
[18] Chen at [10] per Drummond J.
[19] Essof v Minister for Immigration [2009] FMCA 13 per Wilson FM at [23]; Chen at [12]–[13] per Drummond J.
“Business” is not a defined term in the Act. Federal Magistrate Barnes held that the word “business” is used in s 134 of the Act to mean “a commercial enterprise or going concern”.[20]
[20] Lu at [40] citing Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448 at [32]–[35] and Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184 at [30]–[31].
The Respondent contends that even if a decision-maker was satisfied that a condition for visa cancellation exists under s 134(1) and was not satisfied that the visa holder met all the bars to cancellation in s 134(2), a decision-maker nonetheless has a “residual discretion” to not cancel a visa.[21] The Respondent contends that this residual discretion is broad, but it must be exercised in the context of the legislation in which it is found.[22]
[21] Kim v Minister for Immigration Multicultural and Indigenous Affairs [2004] FCA 31 at [23]–[24] per Kiefel J.
[22] Koosasi and Minister for Immigration and Citizenship [2007] AATA 1311; Weng and Minister for Immigration and Citizenship [2010] AATA 60 (and on appeal Weng v Minister for Immigration and Citizenship [2010] FMCA 670).
The Applicants’ closing submissions largely, and in the Tribunal’s view correctly, concede the substance of the Respondent’s above contentions on the operation of s 134 of the Act.[23]
[23] Applicants’ closing submissions para [2].
The dispute in this matter (as identified by the Respondent and set out at [13] above) comes down to a review of:
(a)whether the First Applicant’s identified business interests satisfy a condition under s 134(1) to trigger the discretion to cancel the visas; and
(b)if one of those conditions was met, whether the conditions required for the bar under s 134(2) were met;
(c)even if the bar under s 134(2) does not apply, whether the residual discretion under s 134(1) not to cancel the visas should be exercised; and
(d)if the Tribunal finds that the First Applicant’s visa should be cancelled, whether the cancellation of the wife and son’s visas would result in extreme hardship.
The parties dealt with these issues, sensibly in the Tribunal’s view, on a business-by-business basis. The Tribunal will deal with the issues on that basis.
Bookara Beach Resort
The Applicants’ SFIC contends that in 2014 the First Applicant paid $1.6 million to acquire a 49.24% interest in Bookara Beach Resort Development No 3 Pty Ltd (BBRD No 3).[24] He still holds that interest. That does not appear to be disputed by the Respondent.[25]
[24] Applicants’ SFIC para [10].
[25] Respondent’s SFIC para 23(a)(iii).
The Applicants submit that the shareholder funds have been used for town planning, architectural design and administrative costs, apparently, through a loan by BBRD No 3 to Dornford Pty Ltd.[26]
[26] Applicants’ SFIC para [13].
The Applicants submit that the First Applicant has been involved in the day-to-day management of BBRD No 3 “through participation as a director, in association with the other director Mr Chan”.[27] They also claim that the First Applicant is involved in marketing the project and that “through his efforts has secured the serious interest of Mr CAO Shengchun who is the principal of Shenz[h]en New Taoyuan Holding Group Co., Ltd.”[28]
[27] Applicants’ SFIC para [14].
[28] Applicants’ SFIC para [15].
The Applicants say that the project has stalled due to the economic effects of the COVID-19 pandemic, but that the BBRD No 3 business cannot be seen through the lens of looking for daily turnover and regular “business packets of activity”.[29] The Applicants say that “… it has started with a substantial investment, work has been done, investors have been canvassed and genuine interest generated”.[30]
[29] Applicants’ SFIC paras [16]–[17].
[30] Applicants’ SFIC para [17].
The Applicants argue that “There is no doubt that Bookara Beach project is an ‘eligible business’”.[31]
[31] Applicants’ closing submissions para [7].
In support of their contention that the Bookara Beach resort development is an “eligible business” for the purposes of the Act, the Applicants say that the development satisfies all of the conditions of the definition of an “eligible business” under s 134(10) of the Act (see [12] above).
The two aspects of the factors contained in s 134(1) that must be looked at are:
(a)firstly, whether the business is an eligible business; and
(b)secondly, whether the visa holder has utilised, and intends to continue to utilise, his or her skills in participating, at a senior level, in the day-to-day management of the business.
The Respondent in his closing submissions made the point that it should be borne in mind that the visa in question in this case is a Business Skills – Business Talent visa, not a Significant Investor stream subclass 188 visa and that, accordingly, the relevant considerations go to conducting business in Australia, rather than investing money in Australia. The Tribunal agrees, but notes that a caveat to that observation would be that the acquisition (and maintenance) of a substantial interest in a business is relevant to both ss 134(1) and 134(2).
It is not disputed by the Respondent that the First Applicant holds a 49.24% interest in BBRD No 3 (see [27] above). The first consideration is whether it is an eligible business.
As noted at [22] above, “business” as used in s 134 of the Act has been held to mean “a commercial enterprise or going concern”. Barnes FM in Lu, citing, amongst other cases, Nassif v Minister for Immigration and Multicultural and Indigenous Affairs[32] (Nassif), observed that there was no definition of “business” under the Act. Justice Branson in Nassif observed:
[32] (2003) 129 FCR 448.
28… As is mentioned above, no statutory definition of “business” is available to assist the determination of this issue. The dictionary definitions of `business' are so numerous and so diverse that they provide little assistance for present purposes. I note, however, a few of the apparently more relevant definitions to be found in the Oxford English Dictionary, 2nd ed, and the Macquarie Dictionary, 2nd ed, respectively.
29The Oxford English Dictionary, 2nd ed, includes the following definitions of “business” amongst many others:
12.a.A person's official or professional duties as a whole; stated occupation, profession or trade.
…
13.a.In general sense: action which occupies time, demands attention and labour; esp. serious occupation, work, as opposed to pleasure or recreation.
…
14.a.(With pl.) A pursuit or occupation demanding time and attention; a serious employment as distinguished from a pastime.
b. spec. A particular occupation; a trade or profession.
...
23.A commercial enterprise regarded as a "going concern"; a commercial establishment with all its "trade", liabilities etc.
30The Macquarie Dictionary, 2nd ed, includes the following definitions of “business”:
1. one's occupation, profession or trade.
2. Econ. the purchase and sale of goods in an attempt to make a profit.
3. Comm. a person, partnership, or corporation engaged in this; an established or going enterprise or concern: to be in business
…
6. that with which one is principally and seriously concerned.'
31In Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216 at 226 Mason CJ, Gaudron and McHugh JJ observed:
… [o]f all words, the word "business" is notorious for taking its colour and its content from its surroundings ...
(Citation omitted.)
The elements of the definitions and the curial considerations of the word “business” that Barnes FM extracted in Lu, were “commercial enterprise or going concern”. As noted by the High Court in Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation[33] cited by Branson J in Nassif in the passage reproduced at [36] above, the word “business” takes its colour and its content from its surroundings. In the present case, relevantly the word “business” appears as part of the term “eligible business” so, as the High Court noted, its meaning is given colour by the definition of “eligible business” in s 134(10) of the Act.
[33] Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216.
The Applicants claim that the Bookara Beach resort development satisfies all of the criteria for an eligible business under the definition of that term in s 134(10) (see [32] above). The Tribunal does not accept that claim. No evidence was presented by the Applicants, nor do the Applicants even identify material or arguments that could support that claim in relation to the criteria identified in sub-ss (c), (d), (e) or (f) of s 134(10). The criteria identified in those subsections are simply not applicable to the possible development of a beach resort.
While it is conceivable that if the development were to go ahead, be built and operate, the results envisaged by the definition of “eligible business” in sub-ss 134(10)(a) and (b) may occur, that is a matter of speculation and the Applicants presented insufficient evidence upon which the Tribunal could reasonably conclude that those results will ensue. The Respondent in his closing submissions summarised the position as follows:
… the question is, firstly, is that an eligible business and I’ll take the Tribunal to our statement of facts, issues and contentions at paragraph 23[a], page 8. At the top of page 9 - whilst there is evidence of the initial investment the only financial documents have been provided to 30 June 2018. There’s no current financial evidence about whether that investment is maintained at that level or not. The present financial circumstances of Bookara and the [First] Applicant’s stake in it are not known to this Tribunal or the Minister currently and the project - by the [First] Applicant’s own admission - has stalled. Even if the Tribunal were to consider that that is an eligible business - because the Tribunal reasonably believes the business is resulting or will result in one of the matters in subsection (10) - ‘eligible business means business that the Minister reasonably believes is resulting or will result in one or more of the following’. It is not currently resulting in any of those subsections (a) to (f) so the [First] Applicant must be relying on the fact that the Tribunal must reasonably believe that the business will result in one of those considerations. Certainly, if the business were to build a $40 million development then it may well create and maintain employment in Australia and have links to the international market but that’s yet to be seen. This is in the context of what was referred to in - I think it was [the First Applicant’s] evidence - as a $35 - $40 million business. It’s important to note that there has only to date been one investor who’s been found who has agreed to invest in the business. That investment was crystallised as early as 2017 - if I can take the Tribunal to the T documents in the matter, page 39 TH, this is meeting minute from 2017 in which it is noted that Mr Wuyuan Chen and [The First Applicant] confirmed the involvement of a Chinese investor Shenzhen Grand View Holdings Group Ltd. This is the single investor that the [First] Applicant has got on board since he has commenced his role in obtaining investment from the Chinese market.[34]
[34] transcript at 85–6.
In reply to that submission Mr Boccabella said:
Your Honour, my learned friend described the Bookara investment as a property investment. It’s not a property investment, it’s a tourist development. And my learned friend also suggested that we don’t know - well, the Tribunal doesn’t know whether or not that interest is still in play but if I could take you to page 55 of the transcript and specifically to lines 7 to 21 where Mr Chan gives evidence:
What is the protection for Mr Zhang’s investment in the Bookara project?
And he said:
Well, we were concerned about spending a lot of money in preparing development applications and doing different reports. We had no security of tenure so we took a mortgagee’s caveat which we registered over the property
Is that caveat still in existence today?
Yes, it does exist today
In my submission, that’s ample evidence for the Tribunal to be satisfied that the $1.6m has remained intact.[35]
[35] transcript at 91–2.
Firstly, the action identified by Mr Boccabella’s response is equally consistent with the First Applicant protecting his property investment, not developing a business that would generate the results identified in the definition of eligible business.
Secondly, as the Respondent’s counsel pointed out, s 134(10) of the Act requires the decision-maker to form a reasonable belief that one or more of the specified results is occurring or will occur. As things presently stand, on the basis of the evidence before the Tribunal, it is clear that none of the results identified in sub-ss (a) to (f) “is” occurring and it is equally difficult to form a reasonable belief that one or more of the results in sub-ss (a) to (f) “will” occur.
Evidence was given by witnesses on behalf of the Applicants as to the activities that the First Applicant has engaged in relating to the BBRD No 3 and specifically, the Bookara Beach resort development. The Tribunal understands that this evidence was put on primarily in relation to the level of the First Applicant’s day-to-day involvement in the management of the development, however, insofar as that evidence might also be considered relevant to whether an eligible business is being carried on, the evidence has the potential to point to an opportunity for the development of business links with the international market.[36] It also has the potential to point to BBRD No 3 or the Bookara Beach resort development being a “commercial enterprise or going concern” so as to be considered a business (see [37] above). Having made this observation, that was not an argument specifically advanced by the Applicants and, again, it would require some speculation on the part of the Tribunal to reach a conclusion to that effect based on the evidence presented.
[36] Definition of “eligible business”, Migration Act 1958 (Cth) (Act) s 134(1)(a).
In his statement dated 22 May 2020,[37] Wu Yuan Chen, a director of BBRD No 3, set out the circumstances of the First Applicant’s purchase of his interest in BBRD No 3 in 2014 and that since that time various architectural and engineering documents have been prepared “in readiness for the lodging of the development application ( “DA” )”. None of those documents was put before the Tribunal, or if they were included in the documents that were submitted by the Applicants or in the T documents, they were not identified by the Applicants. Mr Chen in his evidence at the hearing confirmed that the development application (presumably an application for development approval) has not been submitted.[38]
[37] A3.
[38] transcript at 41.
In his statement, Mr Chen said that the First Applicant’s “… main role is to source investor funding … advise on marketing and sales strategies in Asia, view market trends for the design of buildings, resort facilities, tourism trends and outback adventures for various age groups”. His statement also said that “[e]ven before our DA has been approved [the First Applicant] has managed to secure a Master Funding Agreement for the Company in 2019 from the Shenzhen Xintao Yuan Holding Group Pty Ltd … for a sum of AUD$12 million. Further discussions on funding from this Group are still ongoing with [the First Applicant] …”. The Applicants did not identify the “Master Funding Agreement”. The Tribunal is left to assume that the Master Funding Agreement is the document that appears at R1, T23. No other document fitting the description provided by Mr Chen has been provided by the Applicants. The document at R1, T23 is not a binding agreement and is, in reality, of little or no effect at law for the reasons set out in [51] and [52] below.
Mr Chen’s evidence at the hearing as to the First Applicant’s involvement (other than having invested $1.6 million) and the progress of the development was:
INTERPRETER: What we have planned to get professional to involved, including the solicitors and the projectors and winners.
MR BOCCABELLA: What will be the tourist characteristics of this project?
INTERPRETER: Yes. Well, we have meeting regularly and we have - sorry - Mr Zhang will be the lines project of manager to link with overseas and China. What we are going to have is golf field and hotel, restaurant and some of the residential area and mini school.
MR BOCCABELLA: What stage is the development application at?
INTERPRETER: Mainly for the tourist and the holiday purpose.[39]
(Without correction.)
[39] transcript at 40.
In cross-examination Mr Chen advised that it would cost in the range of $35 to $40 million to complete the development and that at the moment there was only one investor. Asked what the First Applicant’s role was, Mr Chen’s evidence was:
INTERPRETER: That’s his major role, but apart from that, we will depend on his research on mainland China’s needs. For example, the setting or the style for the golf or the residential. Without him, we don’t know how to meet their needs.[40]
…
INTERPRETER: Yes, I have mentioned before that Mr Zhang’s role is very important. Without him getting the investor potential investor and the marketing, I won’t be able to go through this project. We need dozens of the - dozens of - thousands fund to get involved.[41]
(Without correction.)
[40] Cross-examination, transcript at 51.
[41] Re-examination, transcript at 52.
A statement was also provided by Michael Henry Chan dated 23 July 2020.[42] This statement advised that in early 2014 Mr Chan met the First Applicant through Mr Chen. He, the First Applicant and Mr Chen inspected the development site and met Western Australian politicians. Various documents were signed, and the First Applicant was “appointed to the role of marketing director”.[43] Mr Chan further advised that BBRD No 3 board meetings have been held at his office in Fortitude Valley in Brisbane, Queensland. According to Mr Chan’s statement, “[f]urther funding for the project was achieved through [the First Applicant] with an investor from a Shenzhen based land developer which was concluded last year”.[44] According to Mr Chan it has taken over two years to secure the involvement of that investor. Mr Chan’s statement also said that:
[the First Applicant] reports each week to the managing director John Chen of his meeting with clients for the project as he is aware that the Company should not rely on one or a few large investors. There has to be other partners in the project as back-up. At this stage the Company has several other clients willing to invest but any further travel to Perth Australia has been closed off by the Covid19 pandemic, however they still express keen interest in the project.[45]
And;
[the First Applicant] is a busy businessman and keeps his business skills active by asking questions about products, procedures and business activities in Australia. He is curious by nature and seeks information from the internet where he investigates business products and whether they can be sold in other markets. He has shown some insights into business in Australia where exports like wine are given niche followings in China by having commentaries and recommendations for consumption as fine dining to customers who are yet to develop the knowledge and palate. There is a large growing middle class in China where [the First Applicant] sees these educated young people as having the curiosity and interest for foreign products. He has good insight into new marketing. He has a good insight into new marketing for China of Australian products.[46]
(Without correction.)
[42] A2.
[43] A2, para [7].
[44] A2, para [8].
[45] A2, para [10].
[46] A2, para [12].
Mr Chan’s evidence at the hearing was:[47]
(a)the caveat over the land was still in place;
(b)he met several politicians with the First Applicant when they visited the site;
(c)he has met Mark Chao in China and in Brisbane. Mr Chao is the oldest son of the managing director of Shenzhen Xingtao Yuan Group;
(d)the Shenzhen Xingtao Yuan Group holds substantial property and Mr Chao is very wealthy;
(e)Mr Chan is the First Applicant’s migration lawyer, not his business lawyer; and
(f)he met the First Applicant when he acted for him in applying for a 132 visa and that “as part of that project he’s required to invest money in Western Australia which he did, and it’s gone towards the various reports and survey plans and various types of things that are required for a development application at this stage anyway”.[48]
[47] transcript at 55–9.
[48] transcript at 57.
The First Applicant provided a statement[49] in which he talks of his investment of $1.6 million into the BBRD No 3 in 2014 and his plan to develop the resort over a 10 to 15-year period. He describes his role as marketing director, seeking further investors in the project through his high-level business contacts in China. He says that he has “secured strong interest of a very large investor”.
[49] A1.
At the hearing the First Applicant’s evidence was that his involvement in the Bookara Beach resort development was to use his contacts through his biscuit manufacturing business in China to get people to invest amounts of up to $1.5 million in the development of the resort.[50] So far one possible investor, Mr Chao, has been identified. Mr Chao will invest “… if that agreement leads to his investment taking place”.[51] Although it was not identified by the First Applicant as such, the Tribunal assumes that the document which appears at R1, T23, being a document signed by A J International Corporation NO 1 Pty Ltd (A.C.N. 610 162 242 of unit 29, 50 Lower River Terrace, South Brisbane, Queensland; Wu Yuan Chen of the same address as A J International Corporation NO 1 Pty Ltd and Shenzhen Xintao Yuan Holding Group Pty Ltd of Shenzhen, Quangdon, China, is the document to which the Applicants’ witnesses refer in their evidence (see [45] above). The Tribunal notes that under the heading “Background” on the second page of the document, it is stated that:
The parties enter into this non-binding heads of agreement to record the high level matters discussed between them. The provisions of this document shall not be construed in any way as a binding offer, agreement or understanding between the parties…[52]
[50] transcript at 22.
[51] transcript at 24.
[52] R1, T23/194.
The Tribunal also notes that the above document was subject to a number of provisions described as “conditions precedent”, which by their terms were more in the nature of conditions subsequent. These conditions included due diligence and satisfaction on the part of Shenzhen Xintao Yuan Holding Group Pty Ltd and the existence of a current development approval.[53] Irrespective of the proper characterisation of these conditions, there is no evidence of satisfaction of the conditions (noting that, in any event, the document by its terms is not a binding agreement or even a binding offer). In relation to the condition of there being a current development approval, the evidence of Mr Chen was that development approval has not been issued, in fact, the application for development approval has not even been lodged (see [44] above).
[53] R1, T23/195, para [1].
The First Applicant’s evidence was that because things had been disrupted by the COVID-19 pandemic, he was “still in the process to identify” other potential investors.[54] To date there was only one potential investor, that being Shenzhen Xintao Yuan Holding Group Pty Ltd.
[54] transcript at 24.
The First Applicant’s evidence was that Mr Chen is running the project. The First Applicant had some involvement with architects in the design of the project, although the nature and extent of that involvement was not identified. The First Applicant was cross-examined on his attendance at BBRD No 3 board meetings. His evidence was that he attended quarterly board meetings, which were held at Mr Chan’s office in Brisbane, in person. He was then taken to the minutes of the meeting apparently held on 6 January 2017 which noted his attendance. It was then put to the First Applicant that he had not attended that meeting in person. He conceded that he may have attended that meeting by telephone. It was then put to the First Applicant that the Applicants had not provided any evidence of any board meetings after 24 April 2018. It is the case that there was no evidence presented to the Tribunal of any board meetings after that date.
The Respondent’s SFIC summarised the Respondent’s contentions on the Bookara Beach resort project as follows:
The project has, by the applicant’s own admission, stalled (ASOFIC [16]). But he argues that the business “cannot be seen through the lens of looking for daily turnover and regular business packets of activity”. He says businesses of this kind “take time” though he has offered no prediction as to how much when the project will cease to be stalled. It is accepted that predictions of that kind are difficult given the uncertainties caused by the COVID-19 pandemic. But that does not mean that the test in s 134(10) as to what constitutes an “eligible business” does not apply. The Tribunal must decide whether it “reasonably believes” the business “is resulting or will result in” one or more of the matters referred to in that subsection. A business that finds itself indefinitely stalled cannot generate a reasonable belief of that kind. The applicant is the only person who could provide the Tribunal with the evidence necessary for it to form such a belief but the Tribunal has little more than the applicant’s say so that investors will be found to source the necessary funding (applicant’s statutory declaration dated 30 September 2020 (ASD) [18]-[20]). [55]
[55] Respondent’s SFIC para [23](a)(iv).
The Tribunal agrees with the Respondent’s characterisation of that project. Irrespective of the First Applicant’s intentions when he purchased the interest in the project in 2014, the Bookara Beach resort development could not now be considered a business, eligible or otherwise. It is best characterised as a long-time stalled, prospective property development. For the seven years that the First Applicant has held the interest in the land, only one prospective investor has been identified and there is no binding agreement with that potential investor. In effect the Bookara Beach resort is still $35 to $40 million away from being anything other than a possibility. At this point, and for some considerable period up to this point, it lacks and has lacked the characteristics of a commercial enterprise or going concern (see [37] above). It is therefore not a “business” for the purposes of s 134 of the Act.
Also, on the evidence presented, the Tribunal could not form a reasonable belief that the Bookara Beach resort development is resulting in, or will result in, any one of the consequences set out in the definition of an eligible business under s 134(10) of the Act. On the evidence before the Tribunal it is not possible to form a reasonable belief that it will even be developed. It is therefore not an eligible business.
Further, the evidence presented by the Applicants does not establish that the First Applicant is utilising any particular skills in actively participating at a senior level in the day-to-day management of the business. It is not an answer to say, as the Applicants do, that the Bookara Beach development “cannot be seen through the lens of looking for daily turnover and regular business packets of activities” because it is a big project. Apart from the level of the First Applicant’s involvement, or the lack thereof, there is simply no “business” in a relevant sense to be managed on a day-to-day basis, or otherwise. There is, as things presently stand, only a stalled, proposed property development which, in real terms, remains unfunded after seven years.
The Tribunal is therefore satisfied that, in relation to the Bookara Beach resort development, a condition for visa cancellation under s 134(1) of the Act exists because it is not an eligible business[56] and, even if it were, the First Applicant is not utilising his skills in actively participating in the day-to-day management of the development.[57]
[56] The Act s 134(1)(a).
[57] The Act s 134(1)(b).
The business of compiling a real property portfolio
The Applicants identify a total of six properties in their portfolio, which have been purchased respectively by the wife (three properties), by the son (one property) and the First Applicant (two properties). One of these properties was purchased “off the plans” and, at the time of the Applicants’ SFIC, was having residences built on it. One of the properties is a commercial property.
The Applicants say that the First Applicant was directly involved in the purchase of all of the properties and funded their purchase. The Applicants contend that:
This is a serious business strand, it is the start of a business real estate portfolio, rent is being earned, it represents a serious business investment in Australia.[58]
[58] Applicants’ SFIC para [21].
It may be that the Applicants have provided copies of documents relevant to the purchase of the properties amongst the 600 plus pages of material that they have filed in the application. However, the Applicants have not identified that material. The Respondent contended that it should not be up to the Respondent or the Tribunal to undertake the exercise of sifting through those documents to identify material that might be relevant. That, in the Tribunal’s view, is a fair criticism of the way in which the Applicants have presented their case generally. When the Applicants filed their SFIC on 30 September 2020, they also filed the statements of the Applicant,[59] Mr Chan[60] and Mr Chen,[61] along with a bundle of documents comprising some 600 pages. There was no index to this bundle and, more importantly, there was no cross-reference in the Applicants’ SFIC, the Applicants’ closing submissions or any of the witnesses’ statements to any particular documents in the 600-page bundle. There are, amongst the documents lodged by the Applicants, a number of documents which, on their face, appear to relate to property purchases, however, they were not referred to by the Applicants’ witnesses or in any of the Applicants’ submissions, nor were any particular documents brought to the Tribunal’s attention by Mr Boccabella. While the Tribunal must ensure that every party to the proceedings is given a reasonable opportunity to present their case, the Tribunal is not required to ensure that each party takes the best advantage of that opportunity.[62] As Deane J noted in Sullivan v Dept of Transport,[63] (with whom Fisher J agreed), “[n]either the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled.”[64] It is the job of the Applicants and their legal representatives to bring the Tribunal’s attention to documents which they seek to rely on in relation to each aspect of their case.[65] That was not done.
[59] A1.
[60] A2.
[61] A3.
[62] Administrative Appeals Tribunal Act 1975 (Cth) s 39; Sullivan v Department of Transport (1970) 20 ALR 323 (Sullivan) per Deane J.
[63] (1978) 20 ALR 323.
[64] Sullivan at 343 per Deane J.
[65] See also Abede v Commonwealth (1999) 197 CLR 510 at 576 per Gummow and Hayne JJ.
Having made the observation that it is not the Tribunal’s or the Respondent’s job to go through the bundle of documents filed by the Applicants to determine what might be relevant, the Respondent makes the following submission:
In any event, the business of owning real property as a means of generating rental income (ASOFIC [21]) is not an “eligible business” as defined in s 134(10). It is not immediately apparent that the business “is resulting or will result in” one or more of the matters referred to in that subsection. The ASOFIC contains no submissions directed to that issue.[66]
[66] Respondent’s SFIC para [23](b)(ii).
The Applicants’ closing submissions repeated the Applicants’ SFIC but added the contention that there was no need for expert economic evidence as to the consequences of investment in Australian property citing the judgment of Kiefel J in Shead v Minister for Immigration and Multicultural Affairs[67] (Shead) at [13]. The thrust of the passage cited by the Applicants is that creation and maintenance of employment in Australia[68] should not be limited to direct causal effect.
[67] [2001] FCA 933; (2001) 113 FCR 479 (Shead).
[68] The Act s 134(1)(b).
The visa being considered in Shead was a Temporary Business Entry Visa (Class UC, Subclass 457). That class of visa required a sponsor who had to meet the requirements set out in the Migration Regulations 1994 (Cth) Schedule 2, clause 457.223(1). Regulation 1.20D(2)(a)(i) provided that:
(2) The Minister must approve an application for approval as a pre-qualified business sponsor, or as a standard business sponsor, made in accordance with regulation 1.20C if:
(a)the Minister is satisfied that the applicant for approval is lawfully operating in Australia a business in which the employment of the holder of a Subclass 457 (Business (Long Stay)) visa would contribute to:
(i)the creation or maintenance of employment for Australian citizens or Australian permanent residents
…
It was in that context, namely the effect of the employment of the visa applicant, that her Honour considered the phrase “creation or maintenance of employment” and, at [13], stated:
Additionally, there does not seem to me to be any warrant for limiting the words “the creation or maintenance of employment for Australian citizens or Australian permanent residents” in subpar (i) to only a direct causal effect. To do so in this case would seem to me to limit the enquiry to an effect within the business in which the visa-holder is in fact employed. The other qualifications for a business sponsor in par (a) of subs (2) assume the potential for wide effects, which are quite likely to be indirect and it seems to me that the effect on the employment of others should be viewed in the same way. They include a contribution to the expansion of Australian trade in goods and services; the improvement of Australian business links with international markets; or competitiveness within sectors of the Australian economy. None of these are limited to the influence or effect of the employment within the business in question, although one would expect to see some causal connexion between the business and the employment and the subjects nominated by the subsection.
In that case evidence had been led before the tribunal as to the impact that the employment of the visa applicant would, and in fact did, have. The evidence showed that the number of people employed by the nightclub, the sponsor’s business, had increased, however, the tribunal found that that increase “… had resulted “in large part” from the expansion of the business or businesses”[69] and that the visa applicant’s employment “had not or would not “per se” contribute to the creation or maintenance of employment”. That need for a direct causal link was what her Honour found to be too restrictive.
[69] Shead at [11].
The issue that the Applicants have with the case as they have presented it in relation to this claimed business is different. There is simply no sufficient evidence presented by the Applicants that the purchases of the properties would have the result of creating or maintaining employment in Australia, nor is there evidence that any of the other results identified in the definition of “eligible business” in s 134(10) of the Act have occurred or will occur.
In any event, the purchase of six properties by the three Applicants does not have the necessary characteristic of “a commercial enterprise or going concern” (see [22] above) to be considered a business. The purchase of properties by members of a family does not, of itself, comprise a business.
Further, the First Applicant’s evidence in his witness statement as to his involvement in this claimed eligible business was:
My family and I have purchased a number of properties in Brisbane, Melbourne and Perth which are all unsecured. The titles and contract details are in the schedule.[70]
(Note: there was no schedule to the First Applicant’s witness statement.)
[70] A1, para [25].
Neither of the witness statements of Mr Chan or Mr Chen provided any evidence as to the First Applicant’s involvement in the day-to-day management of this claimed eligible business.
The First Applicant’s evidence at the hearing on this issue was:
MR BOCCABELLA: Now we’ll move over to the property business. If you could translate a bit at a time, Madam Interpreter, we’ll now move to the property business. And you and your family have purchased five properties and are waiting to finalise the purchase of a sixth. Why did you and your family make these investments?
INTERPRETER: Eventually my family will go to Australia to settle. My wife loves Australia very much as well, and many of my relatives would like to come as well.
MR BOCCABELLA: And at the moment, do some of the apartments have people in it who pay rent?
INTERPRETER: Yes.
MR BOCCABELLA: And did you participate in the decisions to buy each of these apartments?
INTERPRETER: Yes, of course, because I’m the one who pays for them.
…
MR BOCCABELLA: Yes. Could you tell me why you chose these particular apartments and give a reason why you chose those ones rather than something else?
INTERPRETER: I was told the return for the business is quite high, so this is why I choose them.
MR BOCCABELLA: Did you in [sic] and speak to them before purchase?
INTERPRETER: Yes, yes.
MR BOCCABELLA: And what about the apartment which is still being built? How did you come to choose that one?
INTERPRETER: Because they’re really – sorry, the last bit – okay, okay. Yes, they are really beautiful. I have been persuade to buy them all, and if I do that I will get one free, and we are going to pay the four months very soon.
(Without alteration.)
The First Applicant’s description of the “business” claimed to be constituted by the purchase of the six properties and the evidence in relation to that claimed business, do not indicate, let alone establish, a business, nor do they establish a day-to-day management of any such business by the First Applicant.
The Tribunal is satisfied that, insofar as the Applicants rely on the claimed business of compiling a real property portfolio, a condition for visa cancellation under s 134(1) of the Act exists because it is not an eligible business,[71] and even if it were an eligible business, there is no evidence that the First Applicant is utilising his skills in actively participating in the day-to-day management of the claimed business.[72]
[71] The Act s 134(1)(a).
[72] The Act s 134(1)(b).
The wine business
The Applicants’ SFIC submits in relation to this claimed business that:
Through a company called Round and Round Pty Ltd, a wine exporting business has been established, a wine export licence has been approved and first shipment is in the port at Melbourne awaiting export. This container contains $80,000 worth of Australian wine (about 1,000 cases) for export to China.[73]
[73] Applicants’ SFIC, para [22].
The Respondent contends that:
The wine is owned by Round and Round Pty Ltd (ASOFIC at [22]; ASD [22]). This business would appear to be an “eligible business” as it exists to export Australian wine (s 134(10)(c)). However, the applicant’s ownership interest in the corporate structure that conduct the business and the value thereof is unknown. Mary Ma of Rocland Estates Pty Ltd describes the applicant as being “of” Round and Round Pty Ltd in her undated “to whom it may concern” letter but it is not clear whether other people have involvement in or ownership of the company. The issue is further complicated by the fact that Round and Round Pty Ltd acts as the trustee of the Xinsong Family Trust (see deed executed between Urban Hub Enterprices [sic] Pty Ltd; Harnic Pty Ltd and Round and Round Pty Ltd ATF Xinsong Family Trust dated 10 June 2020) The lack of clarity puts the Tribunal in a position where it cannot conclude that the applicant has:
A. An ownership interest in the company of the kind referred to in s 134(10); or
B. That the ownership interest is substantial.[74]
[74] Respondent’s SFIC, para [23](c).
The Applicants’ closing submissions address this aspect of their case as follows:
41.The wine issued is fully explored in cross-examination at pages 35 and 36 of the transcript. It shows Mr Zhang has some experience in importing Australian wine into China.
42.Mr Zhang’s evidence in chief adequately explains he Zhang is involved in the day to day management of this wine export business (at pages 27 :
MR BOCCABELLA: Now I’ll move on to the wine business. Now what have been the problems with the wine business?
INTERPRETER: It’s mainly Australia’s side, because we can’t get it in.
MR BOCCABELLA: What’s the problem with getting them into China, getting the wine into China?
INTERPRETER: Okay, there’s no shipping.
MR BOCCABELLA: Sorry, just explain that in more detail, please.
INTERPRETER: The cargos are already in the port, and we have paid for them, but still not coming. We have been followed up quite a lot.
MR BOCCABELLA: And where did the money come from to purchase that wine?
INTERPRETER: Okay. I have a business in Australia. I use those money to pay for the wine.
MR BOCCABELLA: And did you participate in the decisions to choose which wines to sell to China?
INTERPRETER: Yes.
MR BOCCABELLA: And why did you choose that particular wine to sell to China?
INTERPRETER: Because the customer over there likes this one, shiraz.
MR BOCCABELLA: And assuming the shipping problems are resolved, do you intend to send more wine to China?
INTERPRETER: Yes, of course. I have this business for eight years.
(Original emphasis.)
While the First Applicant’s evidence at the hearing may have “fully explored” the issue, it does not establish that the claimed wine business is an eligible business or that the First Applicant is actively participating in the day-to-day management of that claimed business, if in fact there is a business. All that the First Applicant’s evidence established was that there was a single, unsuccessful attempted shipment of wine to China. That is not sufficient to constitute a business, let alone an eligible business. Again, the Applicants have failed to provide evidence, or even a coherent, structured argument, to support a reasonable belief that the claimed business is resulting in, or will result in, one or more of the consequences required by the definition of eligible business under s 134(10) of the Act.
The Tribunal is satisfied that, insofar as the Applicants rely on the claimed wine business, a condition for visa cancellation under s 134(1) of the Act exists because it is not an eligible business[75] and, even if it were, the First Applicant is not utilising his skills in actively participating in the day-to-day management of the claimed business.[76]
[75] The Act s 134(1)(a).
[76] The Act s 134(1)(b).
The aborted supermarket venture
The Applicants’ submission in relation to this claimed eligible business is as follows:
25.On 3 January 2020, Round and Round Pty Ltd entered into a contract to purchase a supermarket business known as Urban Hub @ St Kilda Rd, Melbourne and paid a deposit of $73,000.
26.The supermarket client included overseas students. Because of the COVID19 pandemic, after due diligence, it was decided not to proceed with this purchase. In June/July 2020, the parties entered into a Deed of Release whereby the vendor agreed to accept the forfeiture of the deposit as full and final settlement of all liability arising out of the contract.[77]
27.Mr Zhang is and was involved in negotiating this contract, the due diligence and the deed of release.
[77] Applicant’s SFIC paras [25]–[27].
The Applicants’ closing submissions repeat paras 25–27 of their SFIC and add the assertion that:
The supermarket transaction is sufficient to meet the terms of genuine effort.
The First Applicant’s witness statement[78] addressed this claimed business in one paragraph.[79] The effect of that paragraph was that in January 2020 he signed an offer to purchase a supermarket in St Kilda and paid a 10% deposit of $73,000. Because of the COVID-19 pandemic he decided not to proceed with the purchase and, after some negotiation with the vendor, the sale was cancelled and he forfeited the deposit. The deed of release was in the documents provided with the Applicants’ SFIC.
[78] A1.
[79] A1, para [24].
Neither Mr Chan nor Mr Chen addressed this claimed business in their evidence.
Clearly the aborted purchase of a supermarket does not, of itself, qualify as an eligible business. Insofar as the Applicants’ seek to rely on this aborted purchase to sustain their visas, a condition for visa cancellation under s 134(1) of the Act exists because the venture is not an eligible business.[80] Furthermore, even if it were, the First Applicant is not utilising his skills in actively participating in the day-to-day management of it.[81] Based on the comment added to the Applicants’ closing submissions referred to in [81] above, the Tribunal understands that the Applicants do not seek to rely on the aborted purchase of the supermarket for the purposes of s 134(1), but rely on this transaction only for the purposes of a bar under s 134(2) of the Act.
[80] The Act s 134(1)(a).
[81] The Act s 134(1)(b).
No argument was developed by the Applicants in support of this assertion, nor was any authority cited to support the assertion that a single aborted transaction should be considered to comprise “a genuine effort” (presumably for the purposes of s 134(2) of the Act, although that is not stated). The Applicants failed to identify which of the sub-ss of s 134(2) the claimed “genuine effort” satisfies.
The evidence presented by the Applicants does not establish that the conditions of each of the sub-ss of s 134(2) are met. While there may be some argument (although not developed by the Applicants) that the condition of s 134(2)(a) might be met by the aborted purchase, there was no argument articulated by the Applicant, let alone evidence to show satisfaction of sub-ss (b) and (c) of s 134(2). The Tribunal accordingly rejects the Applicants’ apparent contention that the aborted purchase of the supermarket invokes the bar under s 134(2) of the Act.
The toilet paper business
The totality of the Applicants’ submission in respect of this claimed eligible business was:
There are other experimental transactions like the import of a container load of toilet paper, at a time when there was an apparent shortage of toilet paper.[82]
(Applicants’ SFIC para 28)
[82] Applicants’ SFIC para [28].
The Applicants’ closing submissions repeated that sentence and added:
These are not really relevant to the issue apart from demonstrating business intent.[83]
[83] Applicants’ closing submissions para [48].
The witness statements of the Applicant, Mr Chan and Mr Chen do not refer to any business or proposed business involved in the importation of toilet paper. There are no documents, or at least no documents that the Tribunal could find or to which the Tribunal’s attention was drawn by the Applicants’ counsel (noting the comments at [62] above) relating to this claimed business.
Insofar as the Applicants seek to rely on the claimed toilet paper importation business, conditions for visa cancellation under each of the sub-ss of s 134(1) of the Act exist. Given the lack of any evidence, or even a substantive submission in relation to this business, it is also the case that no grounds for a bar to arise under s 134(2) have been established.
Does a bar under s 134(2) of the Act arise?
For the reasons set out above, the Tribunal is satisfied that a condition or conditions for visa cancellation exist under s 134(1) of the Act. As noted at [25] above, the next issue for determination is whether a bar to cancellation under s 134(2) arises.
That issue has been covered above in relation to the aborted supermarket venture (see [86] above) and the claimed toilet paper business (see [90] above).
Insofar as the Applicants seek to claim that a bar arises under s 134(2) in respect of the Bookara Beach resort development, the wine business and the business of compiling a real property portfolio, the evidence presented by the Applicants in respect of each of those claimed businesses does not satisfy the requirements of each of sub-ss 134(2)(a)–(c).
The Applicants’ submissions in this regard were:
29.A total of $4.395 million has been directly invested in Australia in business assets and activities.
30.All the business activities are continuing.
31.[The First Applicant] is not a silent investor, he is involved in each of his businesses.[84]
[84] Applicants’ SFIC paras [29]–[31].
The Applicants’ closing submissions on this issue repeated the submission made in the Applicants’ SFIC set out in [94] above with the value of claimed direct investment in assets being increased to “[m]ore than $5 million … (real property $3,470,400 and $1.6 million in Bookara).”
As with the majority of the Applicants’ submissions, there was no identification of evidence, relevant legal principles or authorities which supported or explained that bare assertion. Further, the basis upon which the assertion of there being a “genuine effort”[85] was made seems to arise from the claims set out in the preceding paragraphs in each case. Those preceding paragraphs, at least in relation to a number of the claimed businesses, are clearly wrong. The claims that “All business activities are continuing” and that “[the First Applicant] is involved in each of his businesses” in relation to the aborted supermarket venture and claimed toilet paper business are incorrect, even on the First Applicant’s own evidence.
[85] Applicants’ SFIC para [32]; Applicants’ closing submissions para [52].
The bare claim that the First Applicant (apparently) has made “a genuine effort”, does not particularise or identify the relevant evidence to establish how each of sub-ss (a) to (c) of s 134(2) is satisfied. The Tribunal does not accept that they have been satisfied. The evidence does not establish, and the Applicants make no effort to explain, how each of sub-ss 134(2)(a) to (c) is satisfied in respect of each of the claimed businesses or more generally.
Accordingly, no bar under s 134(2) of the Act to the cancellation of the visas arises.
Should the residual discretion not to cancel the visas be exercised?
The Applicants’ SFIC refers to Lu v Minister for Immigration & Multicultural & Indigenous Affairs[86] and the statement by Sackville J at [54] that:
It is true that the authorities have accepted that s 501 prescribes the failure to satisfy the character test as a condition precedent to the exercise of the discretion to cancel a visa and does not create a presumption as to how the discretion should be exercised: Aksu v Minister for Immigration and Multicultural Affairs (2001) 65 ALD 667 at [10], per Dowsett J, cited with approval by Kiefel and Bennett JJ in Minister for Immigration and Multicultural and Indigenous Affairs v Huynh (2004) 211 ALR 126 [72].
[86] [2004] FCAFC 340; (2004) 141 FCR 364.
The Applicants argue that, by parity, even if a condition in s 134(1) is satisfied, there is no presumption that the cancellation power should be exercised in a particular way. While the Applicants’ SFIC did not expressly identify the bases on which the Applicants say the discretion should be exercised, paras 33–37 make the following submission:
33.As stated above there is a residual discretion not to cancel the visa.
34.In the alternative, even if the above business activities are not enough to neutralise the condition precedent to the exercise of the visa cancellation, (which, of course is denied) then the residual discretion ought to be exercised not to cancel the visa.
35.[The First Applicant] and his family have established a solid business base in Australia through the direct investment of almost $5 million.
36.The Zhang family business activity will continue and there is a commitment to do so.
37.[The First Applicant’s] visa should not be cancelled.
The same submission is made in the Applicants’ closing submissions.
The Respondent’s SFIC addresses this issue in some detail. The thrust of the Respondent’s SFIC in this regard was:
(a)Section 134 does not define the considerations that must be brought to account when exercising the residual discretion. The case of Philp and Minister for Immigration and Citizenship [2007] AATA 2092 at [98]–[169] contains a useful albeit non-exhaustive list of potentially relevant considerations. Notwithstanding the broad nature of the residual discretion, the discretion must be exercised in the context of the legislation in which it is found (citing Koosasi and Minister for Immigration and Citizenship;[87] Weng and Minister for Immigration and Citizenship[88]).
(b)Tribunals have repeatedly observed that the business visa scheme contemplates that such visa holders would remain resident in Australia (Ong and Minister for Immigration and Multicultural and Indigenous Affairs[89] at [31]; Ng and Minister for Immigration and Multicultural Affairs[90] at [12]).
(c)This is supported by the Second Reading Speech of the Migration Amendment Bill (No 2) 1992 (Cth) which introduced s 134 of the Act.
(d)At the time of application, a visa applicant must acknowledge the business objectives of that visa category. They must also understand that there is an expectation that they will make genuine efforts to comply with the business objectives. There are reporting requirements within the first three years of the visa grant. Additionally, such a visa can only be cancelled under s 134 if a relevant notice was given to an applicant within three years of visa grant or date of arrival in Australia.
(e)In light of those factors, the Respondent submits that:
(i)The First Applicant appears to have spent only minimal time in Australia. There is certainly is nothing to suggest that he and his family have moved to Australia permanently.
(ii)The Applicant’s submissions on the residual discretion appear to be limited to an assertion that they should be able to keep their visas because they have invested a lot of money in Australia. But most of the investment has been in real property, supposedly for the purposes of generating rental income. The Applicants need not be present in Australia to maintain that investment. The First Applicant’s role with respect to BBRD No 3 also appears to be capable of being discharged from China (in circumstances where his role is to generate interest from Chinese investors).
(iii)The Applicants are able to apply for other visas that do not have the same stringent obligations, in the event that they wish to visit Australia. In circumstances where the Applicants have only been in Australia on a limited basis, at most, the retention of their visas would be a convenience to the Applicants. This Tribunal should not exercise its residual discretion simply as a matter of convenience (citing Nagaria and Minister for Immigration and Multicultural and Indigenous Affairs[91] at [46]).
[87] [2007] AATA 1311.
[88] [2010] AATA 60 (and on appeal, [2010] FMCA 670).
[89] [2003] AATA 178.
[90] [2003] AATA 299.
[91] [2004] AATA 579.
The Tribunal agrees with the Respondent’s analysis of the law and his submissions in relation to the exercise of the discretion not to cancel the Applicants’ visas. At most, what the First Applicant has established is that he has invested some $5 million in property in Australia. He does not need a visa to maintain and protect that interest. Insofar as the Applicants wish to visit Australia then more appropriate visas can be sought as and when needed. Given the scheme of the Act, the purposes for which visas are issued and the particular requirements attaching to different types of visas, the First Applicant does not require a Business Skills – Business Talent (Migrant) (Class EA) (Subclass 132) visa, and it would be inappropriate for him to hold one.
In the circumstances, the Tribunal is satisfied that the residual discretion not to cancel the Applicants’ visas should not be exercised.
Will cancellation of the Applicants’ visas cause extreme hardship?
The final issue to determine is whether the cancellation of the dependent Applicants’ visas (being the wife and the son) would result in extreme hardship, such that the dependent Applicant’s visa cannot be cancelled.[92]
[92] The Act s 134(5).
The Applicants made no submissions in relation to this issue. There was no evidence put forward by the Applicants that would establish that the wife and the son would suffer extreme hardship if the visas were cancelled.
The Respondent cites the consideration of this issue by Foster J in Kim & Darmawan v Minister for Immigration and Ethnic Affairs[93] at 487:
…it is, in my opinion, important to approach the phrase “extreme hardship” in a broad way. Clearly, it imports a high degree, perhaps a very high degree of hardship, but it must be applied in the context of the facts of the particular case. "Hardship" is in itself a relative term. What may be a "hardship" to a sensitive person, or one in a particularly vulnerable situation, may be no great burden at all to a person of more stoical disposition or in a more protected situation. Similarly, the word "extreme" must be evaluated against the facts of the particular case. Such an evaluation cannot, consistently with the duties imposed upon the decision-maker by the Act, be approached in a dismissive or perfunctory fashion. A full and proper consideration of the person allegedly suffering the hardship or prejudice must be undertaken. Again, as emphasised in the passages cited, separate consideration must be accorded to the questions of "extreme hardship" and "irreparable prejudice". They are different concepts. They are not to be simply lumped together. Obviously the degree of prejudice must not be merely trivial (see per O'Connor J Marcelo v Minister for Immigration and Ethnic Affairs (1994) 34 ALD 344 at 345) however, provided that some significant prejudice is shown, then the question of whether it is “irreparable” must be determined. It cannot be ignored on the basis that the prejudice involved would not, itself, qualify for the description of “extreme hardship”.
[93] (1995) 37 ALD 481.
The Respondent points out that these comments have been applied by the Tribunal citing Howard and Minister for Immigration and Citizenship[94] at [38]; Khemlani and Ors and Minister for Immigration and Citizenship[95] at [39]. See also Chen v Minister for Immigration & Anor[96] at [61].
[94] [2010] AATA 989.
[95] [2013] AATA 401.
[96] [2011] FMCA 23.
The son had argued before the delegate that he was studying at an Australian university. The Respondent correctly points out that the documents provided in support of that argument showed that the son would finish the course on 30 June 2020. No further evidence was provided by the son in these proceedings. Further, the First Applicant’s evidence was that the son had now obtained his master’s degree.
There was no evidence presented which would indicate any hardship on the part of the wife if her visa were to be cancelled. The Tribunal is satisfied that there is no evidence that the wife or the son would suffer extreme hardship which would give rise to a bar under s 134(5) of the Act to cancellation of the visas of the wife and the son.
DECISION
The Tribunal finds that the correct or preferable decision is that the Applicants’ visas be cancelled. According, the decisions of the delegate of the Respondent made on 21 October 2019 to cancel the Applicants’ Business Skills – Business Talent (Migrant) (Class EA) (Subclass 132) visas pursuant to s 134(1) of the Act are affirmed.
I certify that the preceding 111 (one hundred and eleven) paragraphs are a true copy of the reasons for the decision herein of Deputy President Boyle
...[SGD].....................................................................
Associate
Dated: 29 April 2021
Dates of hearing: 16 November 2020, 11 February 2021 Counsel for the Applicants: Mr L Boccabella Solicitors for the Applicants: MCA Lawyers Counsel for the Respondent: Mr A Burgess Solicitors for the Respondent: Sparke Helmore Lawyers
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