IMMIGRATION AND CITIZENSHIP - cancellation of business visa - whether notices of intention to cancel visas had been properly given - consideration of relationship between sections 494A and 494B of Migration Act 1958 and regulation 2.55 of Migration Regulations 1994 - consideration of whether evidence of events occurring after date of cancellation decision can be taken into account - whether primary visa holder had made genuine efforts to acquire an ownership interest in and participate in the day-to-day management of an Australian business

Migration Act 1958 ss 134, 135, 136, 494A, 494B, 501

Migration Regulations 1994 reg 2.55

Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 153 ALR 490

Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342, 87 ALR 506

ACI Pet Operations v Comptroller of Customs [1993] FCA 500; (1993) 118 ALR 114

Secretary, Department of Social Security v Pusnjak [1999] FCA 994

Re Birdseye and Companies Auditors and Liquidators Disciplinary Board [2001] AATA 783

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

Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 767

Hospital Benefit Fun of WA v Minister for Health [1992] FCA 599; (1992) 111 ALR 1

1. These proceedings involve five applications for the review of decisions made by a delegate of the respondent on 5 June 2002. The first application is by Mr Riaz Ismail Bhyat (Mr Bhyat) in respect of the decision to cancel his subclass 127 (business owner) Business Skills visa (the visa). The other four applications are by Mr Bhyat's wife (Mrs Bhyat) and their three children (Narbeela, Leyla and Muhammad) in respect of the cancellation of their secondary visas.

2. At the hearing the applicants were represented by Mr Boccabella of counsel and the respondent was represented by Ms Andretich, an officer of the Australian Government Solicitor. The Tribunal received into evidence the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T1 - T48) and also received into evidence a large number of documents tendered by the applicant. The applicant had numbered these documents starting from no. 49 and for convenience the documents tendered by the applicants became exhibits A49 to A113. One further document was tendered by the respondent and was identified as exhibit R1.

3. Mr Bhyat and his family applied for visas on 9 April 1997 and the visa was granted to him on 6 April 1999, with secondary visas also being granted to the other applicants on the same date.

4. The family first entered Australia on 4 May 1999 and between that date and the date upon which the visas were cancelled Mr Bhyat, Mrs Bhyat and Muhammad spent a total of 295 days in Australia. Between the same dates Leyla spent 274 days and Nabeela 230 days in Australia.

5. On or about 21 May 2001 the Department for Immigration and Multicultural and Indigenous Affairs (the Department) sent to Mr Bhyat a blank 24 month survey form for completion and return. In circumstances that will be referred to below the letter was returned to the Department marked "return to sender- unclaimed" (T31 pages 147 and 148).

6. By letters dated 14 December 2001 and 17 December 2001 a delegate of the Minister gave notice to Mr Bhyat and Mrs Bhyat respectively of an intention to cancel the visas and invited representations by 29 January 2002. Mr Bhyat made written submissions to the Department by letter dated 26 December 2001 and during January a solicitor representing Mr Bhyat sought an extension of time within which to return the completed 24 month survey and to make representations. On 23 January 2002 the Department advised the solicitor that the request for an extension of time was refused and on 29 January 2002 the Department received from Mr Bhyat the completed survey form. The Department subsequently received a bundle of documents provided by Mr Bhyat to the Department's Perth office.

7. By letters dated 5 June 2002 a delegate of the Minister notified the applicants of decisions to cancel their visas.

8. The cancellation of business visas is dealt with in subdivision G of Division 3 of Part 2 of the Migration Act 1958 (the Act). The relevant provisions of ss 134, 135 and 136 of the Act are as follows:

Section 134 Cancellation of business visas

(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:

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

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

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

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

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

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

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

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

(a) business proposals that the person has developed;

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

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

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

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

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

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

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

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

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

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

(4) Subject to subsection (5) and to section 135, if:

(a) the Minister cancels a person's business visa under subsection (1) or (3A); and

(b) a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

(c) the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person's business permit or business visa by giving written notice to that person.

(5) The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

(6) The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied.

(8) A cancellation under this section has effect on and from:

(a) if the person applies to the Administrative Appeals Tribunal for a review of the decision to cancel the visa--the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or

(i) the person's visa was cancelled under subsection (4); and

(ii) the relevant person to whom paragraph (4)(a) applied has applied to the Administrative Appeals Tribunal for a review of the decision to cancel that person's visa;

the 28th day after the day on which the Administrative Appeals Tribunal gives its decision on that review; or

(c) the 28th day after the day on which the notice of cancellation is given to the holder of the cancelled visa;

(9) The Minister must not cancel a business visa under subsection (1), (3A) or (4)

unless a notice under section 135 was given to its holder within the period of 3 years commencing:

(a) if its holder was in Australia when he or she was first granted a business visa--on the day on which that first visa was granted; or

(b )if its holder was not in Australia when he or she was first granted a business visa--on the day on which its holder first entered Australia after that first visa was granted.

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

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

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

(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.

family members visa means a business visa held by a person:

(a) who is or was a member of the family unit of another person who held a business visa; and

(b) who would not have held the business visa if he or she had never been a member of the family unit of the other person.

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

including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

Section 135 Representations concerning cancellation of business visa

(1) Before cancelling a visa under subsection 134(1), (3A) or (4), the Minister must give its holder a written notice:

(a) stating that the Minister proposes to cancel the visa; and

(b) inviting its holder to make representations to the Minister concerning the proposed cancellation within:

(i) if the notice is given in Australia--28 days after the notice is given; or

(ii) if the notice is given outside Australia--70 days after the notice is given.

(2) The holder may make such representations to the Minister within the time specified in the notice.

(3) The Minister must give due consideration to any representations.

(a) the time specified in the notice ends after the end of the period referred to in subsection 134(9); and

(b) at the end of the period of 90 days commencing at the time specified in the notice, the Minister has not made a decision on whether to proceed with the cancellation;

the Minister is not to proceed with the cancellation.

(5) If the Minister decides not to proceed with the cancellation, the Minister must give its holder written notice to that effect.

Section 136 Review of decisions

Application may be made to the Administrative Appeals Tribunal for review of a decision of the Minister under subsection 134(1), (3A) or (4).

9. The decisions made to cancel the business visas held by the applicants were made pursuant to s134 (1) (in relation to Mr Bhyat) and s134 (4) (in relation to the other applicants) and s136 provides for review of those decisions by this Tribunal.

10. In the course of the hearing of the matter a preliminary issue arose as to whether or not the applicants had been given a written notice in accordance with s135 as required by s134(9). If such notices had not been given within the 3-year period referred to in s134 (9) then, by virtue of that subsection, the Minister was not entitled to cancel the visas.

11. As noted above, Mr Bhyat first entered Australia pursuant to the visa on 4 May 1999 and the 3 year period referred to in s134(9)(b) commenced on that day. As also noted above, on 14 and 17 December 2001 the Department gave notice of an intention to cancel the visas. That was well within the 3-year period, but the issue was whether or not the notice of intention to cancel had been "given" to the applicants by a permitted manner. That issue requires consideration of the provisions of the Act and the Migration Regulations made thereunder (the Regulations) that deal with the giving of notices of the kind here in question.

12. The Act and the Regulations were amended, (with effect from 10 August 2001) by the Migration Legislation Amendment (Electronic Transactions and Methods of Notification) Act 2001 (the 2001 Act) and the Migration Amendment Regulations 2001 (No.6) (the 2001 Regulations) respectively. The 2001 Act added a number of new sections to the Act, the relevant parts of which are as follows:

"494A - Giving documents by Minister where no requirement to do so by section 494B method

(a) a provision of this Act or the regulations requires or permits the Minister to give a document to a person; and

(b) the provision does not state that the document must be given:

(i) by one of the methods specified in section 494B; or

(ii) by a method prescribed for the purposes of giving documents to a person in immigration detention;

the Minister may give the document to the person by any method that he or she considers appropriate (which may be one of the methods mentioned in subparagraph (b)(i) or (ii) of this section).

Note: Under section 494D a person may give the Minister the name of an authorised recipient who is to receive documents on the person's behalf.

S494B - Methods by which Minister gives documents to a person

(1) For the purposes of provisions of this Act or the regulations that:

(a) require or permit the Minister to give a document to a person (the recipient ); and

(b) state that the Minister must do so by one of the methods specified in this section;

(4) Another method consists of the Minister dating the document, and then dispatching it:

(a) within 3 working days (in the place of dispatch) of the date of the document; and

(i) the last address for service provided to the Minister by the recipient for the purposes of receiving documents; or

(ii) the last residential or business address provided to the Minister by the recipient for the purposes of receiving documents.

Transmission by fax, e-mail or other electronic means

When the Minister hands a document by way of an authorised officer

13. The 2001 Regulations inserted into the Regulations a new regulation 2.55 as follows:

2.55 Giving of documents relating to proposed cancellation, cancellation or revocation of cancellation

(a) the giving of a document to a holder or former holder of a visa relating to the proposed cancellation or the cancellation of a visa under the Act; and

(3) For a document mentioned in paragraph (1)(a) ...the Minister must give the document in one of the following ways:

(i) within 3 working days (in the place of dispatch) of the date of the document; and

to the person's last residential address, business address or post box address known to the Minister.

14. The applicants contended that the service of documents in relation to cancellation of visas is governed by reg 2.55 and that, because a notice of intention to cancel given under s135 is a document of the type referred to in reg 2.55(1)(a), the notices had to be given in one of the ways set out in reg 2.55(3). In the present case the notices had been sent by prepaid post as contemplated by reg 2.55(3)(c) but had not been dispatched to the applicants' last residential address, business address or post box address known to the Minister as required by reg 2.55(3)(c). It was also contended on behalf of the applicants that even if the Notices could have been given under one of the methods permitted by s494B(4)(c), the requirements of that section had not been satisfied in that Mr Bhyat had never supplied an address for service and the Notices had not been despatched to the last residential or business address provided to the Minister by the visa holders for the purposes of receiving documents.

15. It was submitted on behalf of the Minister that s494A does apply in this case because s135 requires the Minister to give a document but it does not provide that the document must be given by one of the methods specified in s494B. Accordingly, the Minister may give the documents by any method that he or she considers appropriate - which may be by one of the methods specified in s494B. To the extent that reg 2.55 requires that the Minister "must" use one of the methods prescribed in that regulation, that requirement must be understood as a directory one, not a mandatory one. It was contended that the Minister could choose a method from the following options:

(c) pursuant to s494A, any other method that the Minister considers appropriate for giving documents to a person.

It was contended that, for the purposes of s494B, the Notices had been despatched to "the last address for service provided to the Minister" for the purposes of receiving documents. For the purposes of s494A, it was contended that the actual method of dispatch was appropriate and actual notification to the applicants did occur in a time that still allowed 28 days within which to make representations to the Minister.

16. The pertinent facts relating to this preliminary issue are as follows. When completing the application for their business visas in April 1997 (A113) Mr Bhyat provided his South African home address in response to question 20, and a post office box number in South Africa as the "address for correspondence about this application" in response to question 21. However, in response to question 22: "Do you want all correspondence about this application to be sent to a person (such as an agent or lawyer) other than you?" Mr Bhyat answered "yes" and provided the following name and address: "Mr Rafik Sabdia, Nicol Robinson & Kidd, GPO Box 380, Brisbane 4000". Although the application form does not say so, Mr Sabdia was a Brisbane solicitor. On 8 October 1997 Mr Bhyat signed a declaration contained in a Form 926 in which he acknowledged that he understood that the Department might seek information from him; agreed to provide such information as was required; agreed to notify the Department of his residential address within 28 days of his first entry into Australia as a migrant; and agreed that for 3 years after his first entry would notify the Department of any subsequent changes in his residential address (within 28 days of any change) including any residential address he might have outside Australia. (R1).

17. On 4 May 2001 a departmental officer in Australia sent an email to another officer in the High Commission in Pretoria seeking address information for a number of persons, one of whom was Mr Bhyat, for the purpose of sending out the 24 month survey. The message advised that the persons concerned "have never contacted us [ so that] we have no contact address. I would appreciate it if you could please provide the address ...provided by the applicant with their original business skills application, so that the letter can be sent to their last known address." A reply was received on the same day and in relation to Mr Bhyat gave the address in Brisbane set out above.

18. Mr Bhyat's evidence was that he and his family had rented a house in Inglewood in January 2001 and that he had subsequently entered Australia three or four times after that date and had inserted the Inglewood address as his intended address in Australia on the incoming passenger cards he completed on each arrival.

19. The letter containing the 24 month survey form was sent to Mr Bhyat on or about 21 May 2001 addressed to him at the Brisbane address above. As noted above, that letter was received back by the Department on 30 May 2001 marked "return to sender- unclaimed".

20. On 12 December 2001 a departmental officer sent an e-mail to the International Movement Records (IMR) section of the department requesting the "last known address" of Mr Bhyat and informing IMR that Mr Bhyat had last arrived in Australia on 10 September 2001 and departed on 22 November 2001. A reply was received from IMR on 17 December 2001. It appears from T33 at p150 that the response was received by way of a faxed message bearing an imprint of "07:34" - suggesting that the message was received by the fax machine at 7.34am- and the Inglewood address was provided.

21. There is no direct evidence as to when the notices of intention to cancel were actually dispatched by the Department. The notice that was sent to Mr Bhyat was dated 14 December 2001 but the notice that was sent to Mrs Bhyat (at the same address in Brisbane) was dated 17 December 2001. Both notices were signed by a Debra Lewis of the Business Skills section and both invited representations by 29 January 2002.

22. At least the notice addressed to Mr Bhyat eventually found its way to Mr Sabdiah, who had left the firm of Nichol Robinson and Kidd in about mid 1999. It appears Mr Sabdiah received the notice on or shortly before 24 December 2001 because Mr Bhyat gave evidence that he received a copy by fax from Mr Sabdiah on the afternoon of 24 December. There was no evidence before me as to what happened to the notice addressed to Mrs Bhyat on behalf of the secondary visa holders.

23. The 2001 Act and the 2001 Regulations were together a package that dealt with the giving and receiving of certain type of documents. One might be forgiven for thinking that such a package would have provided a clear and unambiguous regime. In my opinion that is not the case. The Explanatory Memorandum ("EM") circulated by authority of the Minister for Immigration and Multicultural Affairs in relation to the Bill that became the 2001 Act states that "the main purpose of the Bill is to bring the Migration Act and the Citizenship Act into line with the Electronic Transactions Act 1999 and allow implementation of the Government's commitment to have appropriate services available on- line by July 2001."

24. In relation to the giving and receiving of documents, the EM states that "the amendments ... consolidate into the Migration Act provisions dealing with the giving and deemed receipt of documents. Most of these provisions are presently found in either the Migration Act or the Migration Regulations 1994 and essentially retain the status quo. However, the Amendments also add an electronic method for the giving of documents, which further ensures compliance with the [Electronic Transactions] Act."

25. Referring specifically to s494A, the EM states :

"Clause 153: New Section 494A authorises the Minister to use any method that he or she considers to be appropriate to give a document to a person in circumstances where the method for giving the document has not been specified by the [Act] or the [Regulations].. This Section does not prevent the Minister from opting to use one of the methods specified in the new Section 494B or prescribed by the [Regulations]. However, where the Minister does use a method in Section 494B, the provisions of the new Section 494C may be invoked to determine when the document is taken to have been received." (emphasis added)

26. The Explanatory Statement ("ES") relating to the 2001 Regulations states that the proposed regulations will "give effect to amendments made to the Act by the [2001 Act] dealing with the giving of documents..." and that "notification of a decision to cancel a visa that has been granted to a person is now dealt with by new regulation 2.55 as inserted by these Regulations." In relation to reg 2.55 the ES states that it "also gives effect to the matters formerly contained in regulation 5.02A (omitted by these Regulations) applying to the giving of a document to the holder or former holder of a visa relating to the proposed cancellation of a visa...".. In relation to regulation 2.55(3) specifically the ES states that the sub-regulation "provides that the Minister must give a document mentioned in paragraphs 2.55(1)(a) or (c)" in one of the ways set out in that regulation.

27. One might conclude from the above that the intent of the combined 2001 Act and 2001 Regulations was that in relation to the giving of documents relating to the cancellation of visas, the methods set out in regulation 2.55 were to apply and that they were the only methods to be employed. Unfortunately, in my opinion, that may not be the effect of the package.

28. The first sentence in the passage from Clause 153 of the EM quoted above - to the extent that it appears to state that s494A only authorises the Minister to use any appropriate method where the method for giving the document has not been specified by the Act or the Regulations - is, in my opinion, not an accurate reflection of what s494A provides. Section 135 of the Act does not specify the method by which a notice of intention to cancel must be given, but reg 2.55 does so specify. Nevertheless, because neither s135 nor reg 2.55 states that such notices must be given by one of the methods specified in s494B, s494A will apply. To the extent that reg 2.55 purports to require such a notice to be given in one of the methods set out in that regulation, it appears to be inconsistent with the terms of s494A. Section 504(1) of the Act provides that regulations may be made in relation to certain matters but that such regulations may not be inconsistent with the Act.

29. In relation to the contention made on behalf of the Minister that any inconsistency can be overcome if the requirement that the Minister "must" use a method prescribed in reg 2.55 is to be understood as a directory rather than a mandatory one - and the word "must" should be read to mean "may" - I note the comments of the High Court in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 153 ALR 490 at [93] (per McHugh, Gummo, Kirby and Haine JJ) that such a distinction and classification has outlived its usefulness.

30. Although my preliminary view is that the relationship between reg 2.55 and ss 494A and 494B is by no means clear and that it would seem to be unlikely, in the light of the specific nature of the requirements of reg 2.55, that the parliament intended to grant the Minister the power to give such important notices by any method that he or she considered appropriate (as opposed to, say, choosing from a number of methods set out in the Act or the Regulations), in the end I do not consider that it is necessary for me to attempt to reach a concluded view about these questions or to resolve this preliminary issue. I have adopted that approach because, at the end of the day, it was not in dispute that Mr Bhyat did in fact receive the notice of intention to cancel on 24 December 2001 and had a period of at least 28 days within which to provide representations prior to the nominated date of 29 January 2002 and because, for the reasons set out later, I have concluded that the cancellation decisions should be set aside on the merits.

31. At the hearing Mr Boccabella raised the issue of what evidence the Tribunal should have regard to in determining this matter. As I understand his contention it is a two stage argument. The first argument is that by virtue of section 134(8) the cancellation decision of the delegate does not take effect until 28 days after this Tribunal gives its decision on the review and, hence, the visa remains valid and in force at the present time. Consequently, the Tribunal is not dealing with a situation where the applicants have lost an entitlement to the visa. The visa remains in force and the decision for the Tribunal is to decide whether that "living visa" should be cancelled now - with effect from the expiration of the appeal period to the Federal Court. The second stage of the argument put by Mr Boccabella is that various decisions of the Tribunal have wrongly applied the decision of Davies J in Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342, 87 ALR 506 - because Mrs Freeman's pension had been cancelled on a specific day and because the relevant provision of the Social Security Act 1947 required a fresh application to be made if a pension was to be reinstated. Freeman, it was said, was in quite a different setting to the present case and it is not authority for the proposition that when a visa is still in existence then events that occur after the cancellation decision but while the visa still exists are not relevant to the decision to cancel what is an existing and continuing visa.

32. In addition, Mr Boccabella contended that because section 134 refers in several places to the visa holder's intentions, it is necessary to look at all facts existing up to the day of hearing to determine what those intentions were and are.

33. Ms Andretich on behalf of the respondent contended that, although evidence of activities and transactions that occur after the date of the cancellation decision may be relevant to establish intention as at that date, they are only of assistance to the Tribunal if they represent the outcome of preparatory activities commenced prior to cancellation. Otherwise, the Tribunal should have regard to all relevant evidence to determine whether the applicant satisfied the requirements of section 134 as at the date of the cancellation decision. That contention is supported by a line of authorities in the Federal Court and in this Tribunal: Freeman (supra), ACI Pet Operations v Comptroller of Customs [1993] FCA 500; (1993) 118 ALR 114, Secretary, Department of Social Security v Pusnjak [1999] FCA 994, Re Birdseye and Companies Auditors and Liquidators Disciplinary Board [2001] AATA 783, Re Wong and Minister for Immigration and Multicultural Affairs [2002] AATA 54, Re Lau and Minister for Immigration and Multicultural Affairs [2002] AATA 767.

34. It seems to me that the regime regarding the cancellation of business skills visas under the Act can be summarised as having the following main features. There is a monitoring of activities by and intentions of the visa holder over the period of three years after the initial entry into Australia and the Minister can only commence cancellation action within that period. There is then a limited (and defined) period beyond the three years within which a cancellation decision must be made. The scheme contemplates that the process to cancel will occur towards the end of the period and there is no ongoing power to cancel. The power must be exercised within the window provided in the legislation.

35. The decision made on 5 June 2002 was to cancel the visas but by virtue of s134(8) that decision did not take effect until a later date depending on the extent of any appeals undertaken. The full Federal Court in Hospital Benefit Fund of Western Australia Inc v Minister for Health (1992) 111 ALR1 at 11 said

"it is, of course, well established that the Tribunal determines what was the correct or preferable decision having regard to the whole of the evidence placed before it. It is not confined to the evidence which was before the primary decision maker. The Tribunal is, however, obliged to address the same question as was before the primary decision maker. This distinction was spelled out by Davies J in Freeman [supra]." (per Wilcox Birchett and French JJ)

36. In the presence case the questions before the Minister's delegate were whether or not, on 5 June 2002, the preconditions for the cancellation of the visas were satisfied and, if they were, whether the decision should be made on that day to cancel them. As the Full Court pointed out in HBF (at 11), in considering the position as at the date of the cancellation decision the Tribunal is not confined to the historical position. However, if the Tribunal were to consider the position of the visa holder as at the date of the Tribunal's decision to determine whether the preconditions for cancellation existed at that later time, it would not be addressing "the same question" as the original decision-maker. I do not consider that the contention made on behalf of the applicant that the position should be different because the cancellation decision does not take effect immediately if the statutory review procedures are invoked alters that conclusion. Provisions such as s 134(8) are, in my opinion, intended only to spare a visa holder from the risk of detention or the need to obtain bridging visas while the review process is on foot.

37. However, the Act (in s134) talks of "intentions" and refers to whether a business "will" result in certain types of outcomes. In such a context, in my opinion, the Tribunal is entitled to receive evidence of prospective developments as they appear at the date of the original decision or of events that occurred after that date but which can be related back to actions taken or events that occurred prior to that date. Such evidence will be relevant and of assistance in evaluating genuineness of effort, intentions or likely business outcomes. By way of example, and speaking generally, evidence that a transaction that had been in progress on the date of the cancellation decision was completed and implemented after that date would be relevant to the question of the genuineness of efforts and intentions prior to that date. I understand that position to be consistent with the respondent's contentions on this point in the written statement of contention filed in the proceedings.

38. Mr Bhyat is presently 41 years old. He was born in South Africa where his family has lived for several generations, having originally come from India. He is a qualified Quantity Surveyor and followed that occupation for several years before becoming involved in the businesses owned by his family. He, his father and his brother have owned a number of major businesses in South Africa involving cement manufacture and sales, wholesale and retail hardware and grocery businesses, and substantial real estate investments (including the premises for the sale of cement and hardware products). He has been a director of almost all of the family companies as well as a major shareholder in the businesses.

39. After his first entry into Australia under the business visa he stayed for approximately for 5 weeks, visiting Brisbane, Sydney and Perth looking at possible business opportunities. In mid June 1999 he returned to South Africa in order to negotiate the sale of his family's 50% shareholding in the cement business to the holder of the other 50% and to negotiate the terms of the ongoing relationship with that company for the supply of cement to the wholesale and retail outlets operated by the family. This took much longer than expected because there had been what he considered to be serious breaches of contract by the other party and the matter had almost involved litigation.

40. He and his family had returned to Australia at the end of November 2000 and stayed here until the end of February 2001, living in the home of a friend. In that time they looked for (and found) a house to rent and arranged for the children to start school.

41. At this stage he had commenced negotiations with the proprietors of a food outlet in a large shopping complex. He had wanted to purchase a majority shareholding in the business but the proprietors were only prepared to sell a 50% interest, which was not acceptable to him. He had also explored the possibility of buying two service stations that were for sale as well was the possibility of opening a computer retail outlet. However, after a financial evaluation of the various businesses he decided that they were too risky and too expensive.

42. He (and his family) had returned to South Africa for the purpose of negotiating the disposal of part of the family's wholesaling business and expected to return with the family in April 2001. However, on his arrival he found that their home in South Africa had been burgled and his computer containing a great deal of important and confidential business information was amongst the property stolen.

43. Because of the inconvenience of the burglary and because the negotiations with the prospective purchasers of the wholesaling business was slower than expected they decided to put the children into school in South Africa temporarily. In April 2001 Mr Bhyat had travelled to the United Arab Emirates and to India to explore the possibility of acquiring information technology (IT) hardware and setting up an IT hardware outlet in Australia or a low cost computer manufacturing operation in Australia. He gathered information about those possibilities but thus far no steps have been taken to implement those possible plans.

44. In August 2001 he was able to finalise agreements for the sale of the wholesaling business and in mid September 2001 returned to Australia, staying for approximately 2.5 months. Because of the delay in the children taking up the places that had previously been reserved for them at a school he had to organise new schools and he continued negotiating with the proprietor of the food outlet that he had previously been interested in. He paid the proprietor the sum of $10,000 to acquire a right of first refusal should the proprietor decide to sell the business in future.

45. On 22 November 2001 the family returned to South Africa to wind up outstanding matters on what was expected to be their last trip to South Africa for a long time. It was while he was in South Africa at that time that he received the notice of intention to cancel the business visa. In mid January 2002 the family had returned to Australia and have lived here ever since.

46. Upon their return to Australia he commenced exploring a number of other business opportunities. He again negotiated with the proprietors of the food outlet and they had eventually agreed to sell 100% of the business but to remain as managers of it. However, the price asked was much too high and after an analysis conducted by Mr Bhyat's accountants he decided not to proceed with the purchase.

47. He also explored the possibility of buying a soya - based ice cream business. This was a line of food that he was particularly interested in because he is lactose intolerant. The owner of the business eventually agreed to sell the business and to stay on operating it for six months, but eventually the deal fell through.

48. Mr Bhyat also examined the possibility of buying several existing computer retail outlets but decided that computers were over-priced in Australia and he examined the possibility of establishing a retail store to sell computers.

49. He also looked at the possibility of buying a franchise to import gyro copters into Australia with a partner in South Africa but had eventually decided not to proceed with that because of the limited market.

50. In March 2002 he had established a family trust and a trustee company and during February/March he commenced discussions with Mr Rushdi Mohamed with a view to acquiring a two-thirds interest in an existing Archie Martins electrical retailing store in Rockingham conducted by Mr Mohamed through his company Rushmore (Australia) Pty Ltd (Rushmore). He had been introduced to Mr Mohamed by a mutual friend and he was attracted to the possibility because Mr Mohamed's main interest was in electrical equipment and Mr Bhyat was particularly interested in computers, he having been in charge of all IT aspects of the family's business in South Africa.

51. Negotiations with Mr Mohamed continued through April 2002 but were hampered by the lack of availability of certain financial data because of problems with Mr Mohamed's accountants. An oral agreement was reached in April involving the acquisition by Mr Bhyat and his brother of a two-thirds interest in the business. Eventually an offer was made dated 8 May 2002 in which the companies established by Mr Bhyat and his brother (Seapoint Enterprises Pty Ltd and Touchdown Investments Pty Ltd respectively) offered to purchase a two-thirds interest in the business for $150,000.00. Although the parties were in agreement on those basic terms, further negotiations were needed concerning the structure of the deal. In particular, Mr Mohamed wished to sell the business within its existing corporate structure, which involved Mr Bhyat and his brother buying shares in Rushmore rather than buying a direct interest in the business. The main reasons why this was thought to be preferable was that it meant that it would not be necessary to renegotiate the lease of the premises, nor would it be necessary to re-establish lines of credit with the existing creditors.

52. Eventually, on 15 May 2002, agreement was reached between Seapoint and Touchdown and Mr Mohamed to the effect that Seapoint and Touchdown would acquire two-thirds of the issued shares of Rushmore plus two-thirds of the shareholders loan account subject to a number of conditions precedent that were to be satisfied prior to a settlement of the transaction on 30 June 2002 (i.e. the end of the financial year). The condition precedents included Mr Bhyat and his brother being appointed as directors of Rushmore and, generally, financial records being provided to Mr Bhyat's satisfaction. The arrangements for completion of the transaction proceeded satisfactorily, but on 28 June 2002 the parties agreed to vary the original agreement to provide that Mr Bhyat and his brother (through their companies) would subscribe for new shares to be issued by Rushmore rather than acquiring existing shares in that company. The transaction was settled satisfactorily on 30 June 2002 and thereafter Mr Bhyat has been actively involved in the management of the business conducted by Rushmore.

53. Mr Bhyat said that Mr Mohamed remains the full time manager of the business but Mr Bhyat visits the store 3 or 4 times each week, often for 3 or 4 hours each day. He is particularly involved in financial management of the business, collecting the raw data for the business activity statements and for provision to the accountant. He is involved in all major decisions regarding products and strategies and no significant decisions are made without his involvement and agreement.

54. Since he became involved in the business the area of the shop has been expanded from 520 sqm up to 916 sqm and a new computer and IT equipment section had been opened, as well as a new furniture section. The turnover of the business had increased by approximately $100,000.00 per month and is presently running at about $400,000.00 per month. In July 2002 the business had employed 8 people and that had increased to 11 at one stage but has now reduced back to 8 full time employees. Mr Bhyat thought that they needed some more employees. He said that none of the employees were relatives of his.

55. My Bhyat said that his brother has only visited the business once or twice and has played no part in the management of it. His brother remains heavily involved in the South African hardware business that the family operates. Mr Bhyat is a director of his brother's company, Touchdown.

56. Apart from the time he spends in the business he looks for other new business opportunities. He is presently looking at the possibility of supplying recycled plastic from Australia to South Africa where his brother is considering setting up a plant (which would be purchased in Australia) in order to make plastic water pipes for which, he thought, there was a large market in South Africa.

57. Mr Bhyat said that he had transferred approximately $700,000.00 to Australia. Apart from his $75,000.00 investment in the Rockingham business all of that money was still available for investment in business in Australia in the future, although he was planning to buy or build a new home at sometime in the future. However, he still has substantial assets in South Africa which he plans to bring to Australia in due course, although the South African exchange control arrangements make that difficult.

58. Mr Mohamed gave evidence that he had operated the business via Rushmore for some years. He confirmed that negotiations had been opened with Mr Bhyat in February or March 2002 and that an oral agreement had been reached in April based on budgeted figures for the purchase of a two-thirds share by Mr Bhyat and his brother. However it was necessary to consider how best to structure the deal because of his belief that using a new company could present problems in terms of renegotiating a lease and re-establishing lines of credit with trade creditors. Consequently the structure had been altered but the essential terms of the transaction did not alter.

59. As far as Mr Muhammed is concerned, Mr Bhyat is the controlling shareholder in the business (by virtue of his own shareholding and as the representative of his brother). He (ie. Mr Mohamed) manages the shop floor and can make some minor decisions regarding customers, but any major decision involves consultation and agreement with Mr Bhyat. The expansion of the premises and the movement into computers had been Mr Bhyat's idea. Mr Mohamed considers their arrangement to be in the nature of partners, and he said that Mr Bhyat came into the shop for 4 or 5 hours a number of times each week. Mr Bhyat would also telephone and ask for certain figures to be given to him over the telephone or emailed to him - but he was in the shop so often that this didn't happen much. Mr Muhammed said that Mr Bhyat's brother had visited the shop one or two times but Mr Muhammed had had no direct dealings with the brother.

60. Section 134 of the Act sets up a three stage decision-making process in relation to the cancellation of the primary visa held by Mr Bhyat. The first question is whether the Tribunal could be satisfied that Mr Bhyat had not complied with any of the requirements of s 134(1). If none of the preconditions could be established then no power to cancel the visa arises and that is the end of the matter. If one or more of the preconditions in s134(1) do exist then consideration must be given to whether the factors set out in s 134(2) are satisfied. If they are then the visa must not be cancelled. Even if the cancellation of the visa is available as a result of the application of ss134(1) and (2) then a residuary discretion exists to not cancel the visa.

61. It was not in dispute in these proceedings that Mr Bhyat had commenced negotiations to acquire an interest in the retail business conducted by Rushmore and that various conditional agreements had been reached concerning that acquisition prior to the date of the cancellation decisions, namely 5 June 2002. Questions arose at the hearing as to whether, by that date, Mr Bhyat had acquired a substantial ownership interest by virtue of the conditional agreements - perhaps equitable interests - and whether Rushmore's business constituted an eligible business for the purposes of s134(1) of the Act. Regardless of what the answers to those questions might be, for the purposes of s134(1) of the Act it is sufficient to record that, whatever might have been the nature of the interest Mr Bhyat acquired in the business by virtue of the conditional agreements, in my opinion he had not, by the date of the cancellation decision, utilised his skills in actively participating at a senior level in the day to day management of that business or any other business, as required by s134(1)(b) of the Act. I accept his evidence that up until the date of cancellation he had spent considerable amounts of time exploring a number of business opportunities in Australia and that these negotiations had reached very advanced stages in relation to several businesses. All of those negotiations, however, had concerned whether or not he would acquire interests in the relevant businesses and the terms upon which such interests might be acquired. None of those activities could be considered to be involvement in the day to day management of such businesses. Accordingly, I consider that at least s134(1)(b) had not been satisfied by Mr Bhyat as at the date of cancellation and, accordingly, a necessary precondition for the cancellation did exist and it was open to the Minister's delegate to consider whether or not to cancel the visas.

62. However, s134(2) required the decision-maker, and the Tribunal, to consider whether or not the three considerations set out in that subsection are satisfied. That requires an examination of what Mr Bhyat actually did in the time leading up to the date of cancellation, including a consideration of events after that date to the extent that they throw light on his efforts and intentions as at the date of cancellation.

63. At this point I note that, in my opinion, the business conducted by Rushmore was and continues to be an eligible business having regard to the factors set in the definition of an eligible business in s134(10) of the Act and the policy notes on the point contained in the Migration Series Instruction document (MSI 133) dealing with the cancellation of business visas. The respondent acknowledged as much. The business was and could be expected to create or maintain employment in Australia and increase commercial activity and competitiveness within the retailing sector of the Australian economy. Likewise, I am of the opinion Mr Bhyats' interest in Rushmore constituted a substantial ownership interest once it was acquired.. As a one-third shareholder and director, particularly in the context of his brother owning a further one-third, Mr Bhyat was clearly the owner of a stake that was of substance and which gave him a substantial degree of control and influence.

64. I turn then to the factors set in s134(3) of the Act in relation to the question of whether or not Mr Bhyat has made a genuine effort to satisfy the matters referred to in s134(2).

65. It is clear from his evidence, which I accept, that Mr Bhyat developed a number of genuine business proposals in the period up to the cancellation of his visa. He pursued at some length the proposal to acquire an interest in the food outlet and the ice-cream business and it is clear that he explored to a lesser degree proposals regarding the retailing of petrol, IT and real estate investments. A measure of his genuineness in relation to the food business was his preparedness to pay a $10,000 fee for a right of first refusal. At least in relation to the food business and the ice-cream business he wished to involve the outgoing vendors as co-owners or managers for some period of time and the eventual involvement in Rushmore involved Mr Mohamed retaining a one-third share in the business and being actively involved in the day to day conduct of it.

66. It is clear, in my opinion, (and the respondent acknowledges) that Mr Bhyat has undertaken considerable research into the conduct of businesses in Australia and in the exploration of business opportunities. He has obtained professional advice from accountants on at least one occasion, which led to him not proceed with a particular line of business.

67. Mr Bhyat was present in Australia for total of 295 days prior to the date of cancellation, a period that exceeds substantially the six months referred to in MSI 133. He has transferred to and retained in Australia approximately $700,000.00, which is available for investment in Australian businesses and which is well in excess of the 50% nominated by MSI 133 of the amount he disclosed as available for transfer in Mr Bhyats' original application for migration (A133).

68. Although the conditional agreement in relation to Rushmore had not been finalised as at the date of cancellation, the agreement committed Mr Bhyat to invest $75,000.00 in the company by way of subscription for new shares that would represent a 30% interest in Rushmore and its business. That transaction was substantially in place prior to the date of cancellation although the terms were eventually modified after the date of cancellation and shortly before the final settlement of the deal. At the very least Mr Bhyat had acquired contractual rights as against Mr Mohamed by the time the cancellation decision had been made even if he had not (about which I express no opinion) acquired any direct interest in Rushmore or the business that was capable of being enforced by way of specific performance Mr Mohamed sought to renege on the deal.

69. Once the deal was completed (within about 3 weeks of the cancellation decision) Mr Bhyat became actively involved in the day-to-day management of a business that had a turnover of between $300,000.00 and $400,000.00 per month, being very substantially in excess of the $100,000.00 per annum indicated by MSI 133. It is apparent, and I so find, that prior to the cancellation decision Mr Bhyat intended to become and to continue to be fully involved in the day to day senior management of Rushmore's business. Consistent with that intention he has been so involved since the settlement of the transaction on 30 June 2002.

70. In the circumstances that are referred to earlier in these reasons, Mr Bhyat did not respond to the 24 month survey form that was posted to the address in Brisbane but was returned unclaimed. The respondent acknowledged that it could not be shown that Mr Bhyat received the survey form and it was not contended that he had failed to comply with a notice under s 137. In the circumstances I regard that as correct.

71. Having regard to all the above factors and, in particular, having regard to the efforts made by Mr Bhyat prior to the cancellation of the visa to investigate and acquire interests in a number of Australian businesses, which ultimately resulted in a conditional agreement to acquire an interest in Rushmore before the date of the cancellation decision, I consider that Mr Bhyat has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, has made genuine efforts to utilise his skills in the day to day management of such a business and intends to continue to make such genuine efforts. Accordingly, I consider that the requirements of s 134(2) are satisfied and therefore the business visa must not be cancelled. It follows that no power therefore exists under s134(4) to cancel the secondary visas held by the other applicants in these proceedings. My decision is, therefore, that the decisions made by the delegate of the Minister on 5 June 2002 to cancel the business visas held by the applicants are set aside. The visas remain valid and effective.

I certify that the 71 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member

Signed: .........(sgd V Wong)...............................

Solicitor for the Respondent Australian Government Solicitor