Chen and Ors [2002] AATA 628 (29 July 2002)

Decision The Tribunal: Q2001/569 - Affirms the decision to cancel the Business Skills visa of Li-Shien Chen. Q2001/570 - Affirms the decision to cancel the Business Skills visa of Yu Pei Chen Wang. Q2001/571 - Affirms the decision to cancel the Business Skills visa of Pen Lung Chen. Q2001/572 - Affirms the decision to cancel the Business Skills visa of Pen Ling Chen. Q2001/573 - Sets aside the decision to cancel the Business Skills visa of Yu Min Chen. SENIOR MEMBER

IMMIGRATION - Business Skills visa - "eligible business" - failure to substantiate involvement in business - day-to-day management of eligible business - extreme hardship

Migration Act 1958: s134, 137

1. These applications are for review of a decision dated 8 June 2001, to cancel a Business Skills visa granted to Li-Shien Chen on 11 June 1998 and due to expire on 11 June 2003, on the grounds that, Li-Shien Chen (the primary visa holder):

(i) Failed to present any business proposals or documentation substantiating his involvement in an eligible business.

(ii) Made no genuine effort to participate in the day-to-day management of an eligible business.

(iii) Provided no evidence to suggest that he would so participate in the future.

(iv) Provided no evidence to show that he actively participated in the day-to-day management in such a business at a senior level from overseas.

2. The other four applicants are family members of Li-Shien Chen and consequently they are secondary visa holders.

3. The following material was placed in evidence before the Tribunal:

(i) The section 37 statement

(ii) A statement plus oral evidence from Li-Shien Chen

(iii) A statement plus oral evidence from Pen Lung Chen

(iv) A statement plus oral evidence from Pen Ling Chen

(vi) A statement from Van Ban Giang (employer of and provider of accommodation for Yu Min Chen)

(vii) A statement from Hung Chun Chen (wife of Van Ban Giang and employer of Yu Min Chen)

(viii) A statement from Randy Wu (manufacturer of lanolin products)

(ix) A statement from Ching-Tang Lin (manager of Taiwan company Astra Giand Industrial Co Ltd)

(x) Travel movement records for Li-Shien Chen up until 25 January 2002

(xi) A Bill of Lading for the export from Australia to Taiwan of 383 cartons of boneless beef, dated 17 April 2001.

4. From the material referred to above, the Tribunal finds as follows:

(i) Li-Shien Chen, first entered Australia on 4 February 1998 and left Australia one week later on 11 February 1998.

(ii) Li-Shien Chen was granted a business skills visa on 11 June 1998.

(iii) Li-Shien Chen entered Australia on 13 June 1998 and left Australia one week later on 20 June 1998.

(iv) Li-Shien entered Australia on 20 February 1999 and left Australia one week later on 27 February 1999.

(v) Li-Shien Chen entered Australia on 23 July 1999 and left Australia on 29 July 1999.

(vi) Li-Shien Chen entered Australia on 16 June 2001 and left Australia on 19 June 2001.

(vii) Whilst he was in Australia in February 1999, Li-Shien Chen incorporated Ever Light Pty Ltd on 23 February 1999. He became the sole shareholder and the managing director.

(viii) Since incorporating Ever Light in February 1999, Li-Shien Chen claims to have invested a total of AUD $129,541.41 into Ever Light to pay for purchases of goods and to provide cash flow for the company.

(ix) Pen Lung Chen, elder son of Li-Shien Chen, entered Australia with his father on 4 February 1998. He has lived in Australia since that time. He returned to Taiwan for two brief visits, 7 June 1999 to 13 June 1999 and 8 December 1999 to 26 February 2000. He is studying for a Bachelor of Business at QUT.

(x) Pen Lung Chen was appointed to the position of company secretary to Ever Light on 23 February 1999. He claims to do some work for Ever Light, such as sourcing potential suppliers, negotiating with suppliers and translating documents for his father. He has received some remuneration for his work. He currently has $91,476.26 in current and term deposits, provided to him by his father.

(xi) Pen Ling Chen, younger son of Li-Shien Chen, also arrived in Australia with his father on 4 February 1998. He has lived in Australia ever since. He has returned to Taiwan on one occasion, from 28 November 2000 to 15 February 2001. He is studying for a Bachelor of Commerce at Griffith University. Pen Ling Chen was also appointed to a position (secretary) in Ever Light on 23 February 1999. He claims to do some work for Ever Light and to receive some remuneration.

(xii) On 10 May 2000, the Respondent sent a letter to Li Shien Chen, addressed to 51/139 Macquarie Drive, St. Lucia, Qld., to request him to complete a "Survey of Business Skills Migrant - 24 Months" form and to return it within 28 days. The form was not returned.

(xiii) On 4 September the Respondent sent a letter to Li Shien Chen which contained the following:

"Before you were granted your Business Skills Class visa, you signed a Declaration - Business Skills (Migrant) Class (form 926) agreeing to participate in surveys for three years after your initial arrival in Australia. This is a mandatory requirement of your visa and if you are unable to comply with your obligation, a case may be presented to the Minister who will decide whether your visa should be cancelled under the provisions of Section 134 to 136 of The Migration Act 1958.

Accordingly, could you please complete the enclosed Survey of Business Skills Migrants - 24 Months and return it to this office by 2 October 2000. You may also access this form from our Internet home page at www.immi.gov.au/allforms/pdf/1010.pdf. I have enclosed a pre-addressed reply envelope for your convenience, postage free within Australia."

(xiv) On 30 December 2001, Li-Shien Chen sent the following fax to the Respondent. (The Respondent received it on 4 January 2001).

"Sincerely I regret very much that I have not sent my 24th month Form 1010 as you requested in the notification and beg your forgiveness to allow me some 3 weeks more to hand in the form.

After my first entry to Australia, I have been an idea to source potential and competitive products of health and medicine from my past experience. I find the health food, for example fish oil, propolis & evening primrose oil, are very excellent and beneficial to bodies. I bought some samples and had a test to my friends. Exciting, I received many good responses which gave me confidence to develop the overseas market.

However, unfortunately the Taiwan government of my home town and target market announced in the middle of the year a series of regulations to control the food and health of the public, which is an obstacle for me to jump into the market.

Under such circumstances, I could not finish my report on time. Therefore, I change my direction to another products. After some discussion and negotiation with the buyers of Taiwan, I have now confidence to have some orders within 2-3 weeks. This is why I ask for about 3 weeks more to prepare this form.

(xv) On 8 January 2001 Ever Light sent a consignment of lanolin products (shampoo, cream, oil and facial cleanser) from Brisbane to Taiwan by Eva Air. The consignment was worth AUS $7,234.46.

(xvi) On 16 January 2001, Ever Light purchased and transferred 25ml of propolis liquid, worth AU $1,451.52 from Brisbane to Taiwan. The propolis oil was in a small phial which was carried in the pocket of a friend of Li-Shien Chen.

(xvii) On 29 January 2001, Ever Light sent a consignment of beef from Melbourne to Taiwan. It consisted of 14,066kg (net wt.) of "rib finger", worth US $40,764, packed into 564 cartons.

(xviii) On 8 February 2001, the Respondent sent to Li-Shien Chen, a "Notice of intention to cancel under section 134 of the Migration Act 1958". The notice set out the duties and obligations of a Business Skills visa holder and went on to say:

"More than 3 weeks has elapsed and the Department has not yet received a 24-month survey or any further correspondence from you. You stated in this facsimile that you bought samples of fish oil, propolis and even primrose oil in an attempt to export these items, but the Taiwan government announced a series of regulations to control the food and health of the public. You stated that as a result you changed direction to another product and that you were confident of having some orders within 2 to 3 weeks. You have not provided any documentary evidence of your previous efforts, nor have you provided any business proposals, or evidence of research in relation to 'another product'.

There is no evidence of the existence of a business structure having been established or currently operating which is registered for taxation purposes in Australia that you hold a substantial ownership interest in, or one in which you actively participate in the day-to-day management of at a senior level. There is no evidence that you have transferred any funds to Australia for the purpose of investing in an eligible business in Australia. You have not provided any evidence to suggest that you have made any efforts or that there is likely to be ongoing genuine effort in the future. Departmental records confirm that you have only spent 20 days in Australia since the time of your initial entry in June 1998, and that you have not returned to Australia since 29 July 1999. Given the very limited time spent in Australia and the fact that you are based overseas, I do not consider it likely that you would have been able to engage in efforts amounting to genuine efforts to meet visa requirements. On the basis of the information before me, I do not consider that you are able to meet the requirements of section 134(2).

Regulation 5.02A (2)(b) of the Migration Act 1958 states that documents in relation to the proposed cancellation of a visa must be given to the person who is the holder of the visa by sending it to the person's last known residential or business address. As you have not notified this Department of any change of address since advising the Department of a change of address on 4 September 2000, correspondence relating to your case will be sent to the last address held for you by the Department.

The Migration Act 1958 gives you the opportunity to comment on these grounds for cancellation and to give reasons why your visa should not be cancelled.

You should now provide this office with a written answer as to why your visa should not be cancelled. Your answer should say:

* why you think the grounds for cancellation do not exist in your case; and

* why you think your visa should not be cancelled.

You must provide your response, together with any documentation you would like considered in support of your claims, by 15 March 2001. If you do not respond within that time, a decision on whether to cancel your visa will be made using the information already held by the Department."

(xix) The Respondent also notified the secondary visa holders of the notice of intention to cancel on 8 February 2001.

(xx) On 13 February 2001, Li-Shien Chen wrote to the Respondent to apologise for the delay in getting his business started. He enclosed a FedEx air waybill.

(xxi) On 22 February 2001, Li-Shien Chen wrote the following letter to the Respondent:

"I regret to send you this Annual Financial Report this late. I have received the letter regarding the notice of intention to cancel my Business Visas under section 134 of the Migration Act 1958 from your office last week. Before this, I have received the letter from the Department of Immigration and Multicultural Affairs in Brisbane last year. They asked me to explain the reason why I did not start any Business over the past two years since 1999. I definitely made the explanations by fax in the early January this year. Due to the recessions in my country, however, I have had strong intention to start doing my business last year. We have talked about our plan and price negotiations, etc.

I have attached this report concerning my Business, which has been done this early year. I sincerely wish you do not cancel my Business Visas at the moment. I promise that I will go on it and do it much better from this year. I will appreciate your considerations for this. Thank you very much for your time."

He also enclosed Ever Light's profit and loss statement and trading account. These documents showed that there had been no business activity for the year 2000 but in 2001 the company had purchased goods to the value of $86,844.45 and sold them for $85,599.98. The company had other expenses totalling $1,805.00. The profit was said to be $2,950.93.

(xxii) On 17 April 2001, Ever Light shipped 383 cartons of boneless beef weighing 10,301 kgs from Melbourne to Taiwan. It was stated on the commercial invoice to be worth US$31,873.67.

(xxiii) On 8 June 2001, the Respondent decided to cancel the Business Skills visa. The Applicants were all sent notices of the cancellation on the same day.

(xxiv) For the financial year ending 30 June 2001, Ever Light had a turnover of $137,375.09 for a profit of $7,833.68.

5. In his evidence before the Tribunal, Li-Shien Chen made the following points (among others):

(i) He has been in the pharmaceutical business in Taiwan for over 33 years. He learnt the business from his father who was also in the pharmaceutical business. His Taiwan company, Nang Kuang, sells a range of pharmaceutical and health products.

(ii) His wife, the second Applicant, Yu Pei Chen Wang, has a Bachelor of Pharmacy degree.

(iii) When he incorporated Ever Light in February 1999 he initially intended to create a business which would export vitamin supplements from Australia to Taiwan. He spent the first two years after incorporation, investigating the various vitamin supplement products available in Australia for export purposes.

(iv) He was not able to put his plans into action because new regulations relating to the control of the import of vitamin supplements into Taiwan, came into force in September 1999.

(v) He saw that his initial plan would not be viable. He began to look for other health food products which were not covered by the new rules.

(vi) He discovered that Yehlex Australian Pty Ltd, managed by Randy Wu, produced skincare products made from lanoline oil. On 8 January 2001, he exported a consignment of Mr. Wu's products from Brisbane.

(vii) He also had dealings with another of Mr. Wu's enterprises, Trigo Australia Pty Ltd., which produced "propolis" liquid products. Propolis is produced by honeybees and is said to possess powerful antibacterial properties.

(viii) He shipped two container loads of beef from Melbourne to Taiwan in the first half of 2001. The company involved in the beef transactions was Ausrico, also controlled by Mr. Wu.

(ix) He has investigated the feasibility of exporting other products from Australia to Taiwan but discovered that either the product was not sufficiently different from products already available in Taiwan, the price was not right or the management structure was not acceptable. Such products were:

(x) Since 1998, the Taiwan economy has been going through a slump.

(xi) As the managing director of Ever Light it is his duty to travel regularly within Taiwan and to China and Japan, to source potential purchasers of the health and food products Ever Light exports from Australia. Consequently, he is unable to remain in Australia for more than a few weeks at a time.

(xii) Ever Light has not generated any cash flow. He has not received any income from Ever Light.

(xiii) In the initial stages he spent about nine hours per week on Ever Light's business but that has increased in recent times to 20 hours per week.

(xiv) It is his intention for 2002 and 2003 to shift Ever Light's focus to business ventures in biotechnology. He is still negotiating with a biotech company.

(xv) On 29 November 2001, he exported through Ever Light, 720 Duvet quilt products worth AUD $61,200 to Taiwan.

(xvi) On 14 December 2001, he purchased a further 175 units of propolis liquid from an Australian company and exported it to Taiwan. The consignment was said to be worth AUD $5,250.

(xvii) He is negotiating with BB Group to export their Australian made health and cosmetic products to Taiwan in the second half of 2002.

6. The legislation which relates to the cancellation of business visas is contained in sections 134 to 137 of the Migration Act 1958. Those parts of sections 134 and 137 relevant to this review are:

(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

(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;

(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;

(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.

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 member's 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.

137 Provision of information - holders of business visas

(1) The Secretary may by written notice require the holder of a business visa to give the Secretary such information as is specified in the notice.

(2) The Secretary may not require information under subsection (1) unless the information is to be used by the Secretary or the Minister for the purpose of the administration of this Act or of regulations made under this Act.

(3) A notice under subsection (1) is only valid in the period of 3 years commencing:

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

(4) Without limiting the generality of the information that may be required under subsection (1), the Secretary may require the holder to advise the Secretary in writing of any change in the address of the holder during a period specified in the notice.

(5) A notice under subsection (1) must state that the information must be provided within a period of 28 days commencing on a day specified in the notice."

7. The objective evidence placed before the Tribunal suggests that:

(i) Li-Shien Chen spent so little time in Australia for such short periods of time that it would have been almost impossible for him to have actively participated at any level in the day-to-day management of Ever Light.

(ii) Ever Light conducted no business of any description between 11 June 1998 and early January 2001.

(iii) It took Li-Shien more than six months to reply to the Respondent's request in May 2000, or alternatively, it took him more than three months to respond to the Respondent's request in September 2000. The obvious reason for the delay in response was that there was nothing to report up until the end of 2000.

(iv) It was not until the three transactions occurred in January 2001, that there was any "business activity" to report.

(v) Li-Shien Chen was stung into activity by the letters from the Respondent.

8. The Tribunal is not satisfied that Ever Light conducted a business in Australia ("eligible" or otherwise) between the date of the grant of the Business Skills visa, 11 June 1998, and the date of the decision to cancel the visa, 8 June 2001. The commercial activities of Ever Light for the period consist of three transactions in January 2001 plus a consignment of beef to Taiwan in April 2001. Two of the transactions were of very small magnitude. There has been no system or organisation of Ever Light into a commercial enterprise. Four transactions, two of which were very small, resulting in almost no profit between mid 1999 to the end of 2001, does not amount to the conducting of a business.

9. The Tribunal is not satisfied that by 8 June 2001, Li-Shien had made a genuine effort to obtain a substantial interest in an eligible business in Australia, nor that he made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of an eligible business, nor that he intended to make genuine efforts to do so. The Tribunal does not accept that Li-Shien Chen spent on average nine hours per week initially and then 20 hours per week on behalf of Ever Light.

10. The Tribunal is entitled to look at the transactions and activities conducted by Li-Shien Chen after the date of cancellation of the visa - if it would assist in the determination of whether or not the decision to cancel was the correct or preferable one. It is the Tribunal's view that the two transactions conducted at the end of 2001 do not change the Tribunal's assessment expressed in the paragraphs above.

11. The Tribunal affirms the decision to cancel the Business Skills visa of Li-Shien Chen.

12. Yu Pei Chen Wang, born on 10 February 1948, lives with her husband, Li-Shien Chen, in Taiwan. She has visited Australia on three occasions, 13 June 1998 to 18 June 1998, 22 December 1998 to 1 January 1999 and 30 December 2000 to 8 January 2001, for a total of 24 days. There is nothing in the material to indicate that a cancellation of her business visa would result in "extreme hardshipíp" within the meaning of that term in subsection 134(5) of the Act.

13. The Tribunal affirms the decision to cancel the Business Skills visa of Yu Pei Chen Wang.

14. Pen Lung Chen, born on 15 April 1976, has lived permanently in Australia since he first arrived on 4 February 1998. He has had two holidays in Taiwan, 7 June 1999 to 13 July 1999, and 8 December 1999 to 26 February 2000. He began studying for his Bachelor of Business - Accounting degree at Queensland University of Technology (QUT) in July 1999 and is expected to complete the course in December 2002. He hopes to go on to complete an honours degree and then study for his Masters degree.

15. There is no doubt that cancellation of the visa for Pen Lung Chen would cause serious disruption to his life. He is within a few months of finishing his degree at QUT. He has lived permanently in Australia for over four years. Cancellation would mean that he would have to return to Taiwan to live. The question, however, is whether the cancellation would result in "extreme hardship".

16. The Tribunal is not satisfied that the cancellation of the Business Skills visa would result in extreme hardship in the case of Pen Lung Chen.

17. The Tribunal affirms the decision to cancel the Business Skills visa of Pen Lung Chen.

18. Pen Ling Chen, born on 25 April 1978, has lived permanently in Australia since arriving in Australia on 4 February 1998. He has returned to Taiwan on two occasions, 8 February 2000 to 26 February 2000 and 28 November 2000 to 15 February 2001. He is currently studying for a Bachelor of Commerce degree at Griffith University. His expected date of completion of the course is December 2003.

19. There is no doubt that cancellation of the visa for Pen Ling Chen would cause serious disruption to his life. He has lived in Australia for over four years. He has lost contact with his friends in Taiwan. He is half way through a degree course at Griffith University. He is currently in a relatively serious romantic relationship with a fellow student at Griffith University; they plan to marry each other.

20. If the visa was cancelled, Pen Ling Chen would have to abandon his studies in Australia, abandon his girlfriend and return to Taiwan to live with his parents.

21. Although the Tribunal accepts that the cancellation of Pen Ling Chen's visa would cause him distress and possibly hardship, it would not amount to "extreme hardship".

22. The Tribunal affirms the decision to cancel the Business Skills visa of Pen Ling Chen.

23. Yu Min Chen, born on 15 April 1979, arrived in Australia on 4 February 1998 and has lived here permanently ever since. She has never returned to Taiwan. Yu Min Chen had an argument with her family shortly after she arrived in Australia and has not lived with any of them since that time. She regained contact with Pen Ling Chen in late 1999 when she met him by coincidence. She regained contact with her other brother and her mother in or about February 2000. She met her father in July 2001 at the solicitor's office when preparing for this matter. She has a poor relationship with her father.

24. In July 1999, Yu Min Chen moved in to live with Van Ban Giang and his wife Hung Chun Chen. She worked at the karaoke lounge run by Mr and Mrs Giang in exchange for pocket money and accommodation.

25. She studied at a business college in Brisbane but had to suspend her studies due to ill health. Her mother paid the tuition fees.

26. Yu Min Chen now shares a unit with five flatmates. Her mother provides her with sufficient financial support to get by.

27. If her visa is cancelled she will have to return to Taiwan. Living with her family would be out of the question. She has lost contact with Taiwan and has no ties there.

28. The Tribunal is satisfied that if the Business Skills visa of Yu Min Chen is cancelled she will suffer "extreme hardship".

29. The Tribunal sets aside the decision to cancel the Business Skills visa in relation to Yu Min Chen.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member.

Signed: .....................................................................................

Solicitor for the Applicant Nicol Robinson Halletts

Solicitor for the Respondent Mr. D. Gallo, Blake Dawson Waldron