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[2002] AATA 54
plaintiff. The Tribunal set aside the decision under review and substituted a new decision that Ms Wong's Subclass 127 Business Skills Visa should not have been cancelled (Decision; para 50).
The Tribunal held that Ms Wong should not have had her Business Skills visa cancelled. Applying the rule that a cancellation must be assessed by reference to the facts as they were when the cancellation was made, the Tribunal accepted evidence that Ms Wong had reached agreement to buy a 25% share in an Australian food manufacturing business and had taken active steps to assist and fund the enterprise. The Tribunal treated the 25% share as a substantial ownership interest for s 134(2) and found she had made genuine efforts and intended to continue them. Although she failed to notify an Australian residential address, the Tribunal found departmental practice contributed to this lapse and that the failure did not outweigh the substantive compliance with s 134(2).
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This case concerns a review in the Administrative Appeals Tribunal of a delegate's decision to cancel a Subclass 127 Business Skills visa held by Ms Yuk Chun Wong. The delegate cancelled the visa on 9 April 2001 under s 134(1) of the Migration Act 1958, essentially because the delegate was not satisfied the visa-holder had obtained a substantial ownership interest in an eligible Australian business or was utilising her skills at senior management level, or intended to continue to do so (see statutory scheme reproduced at paras 7 and 38).
Ms Wong had applied for the visa in 1996 and was granted it in 1997. She first entered Australia in January 1998 and thereafter sought to find a business partner and invest in Sinem Pty Ltd (a food manufacturing company trading as Herman's Dutch Croquettes). Negotiations with Mr Vincent You, a director and owner of Sinem, began in 1999 and continued intermittently into 2001. By early February 2001, the Tribunal accepted that the parties had reached agreement that Ms Wong would acquire a 25% share for $150,000, although the formal share transfer documentation was completed only on 26 April 2001 (after the cancellation date) (paras 8–15, 22–24, 39). Ms Wong had remitted funds to Australia earlier and, after receiving a Notice of Intention to Cancel in December 2000 (which she only received in January 2001 via family), she arrived and remained in Australia from 30 March 2001 and worked full-time for Sinem (paras 5, 14, 16).
The Tribunal (Deputy President R P Handley) applied the Freeman principle regarding the temporal scope of review (para 37) and concluded that, on the evidence as it stood at the time of cancellation, Ms Wong had made genuine efforts to obtain a substantial ownership interest and to utilise her skills, and intended to continue doing so. The Tribunal therefore set aside the cancellation and substituted a decision that the visa should not have been cancelled (paras 37–45, 50).
Two analytical strands drove the Tribunal's decision.
First, the Tribunal applied the established approach to cancellation reviews: it must assess whether the cancellation was correct or preferable as at the date of cancellation (the Freeman principle). That limited temporal lens required the Tribunal to take evidence to establish the facts as they existed immediately before 9 April 2001 (para 37).
Second, the Tribunal applied the statutory test in s 134(2). Section 134(2) prevents cancellation if the Minister is satisfied the visa-holder has made a genuine effort to obtain a substantial ownership interest in an eligible business, to utilise skills at a senior managerial level, and intends to continue such efforts. Section 134(3) provides non-exhaustive indicators to evaluate 'genuine effort'.
On the facts, the Tribunal accepted the oral evidence that the parties had concluded substantive agreement in early February 2001 for a 25% purchase at $150,000 and that Ms Wong had transferred funds into Australia and assisted in practical ways (for example sourcing machinery) prior to formal transfer (paras 9–14, 23–24, 39–45). The Tribunal treated the 25% interest as 'substantial' and Sinem as an 'eligible business' because it created/maintained employment and sought expansion into South-East Asian markets and fast-food franchise supply (paras 39, 41). The Tribunal acknowledged Ms Wong's failure to notify an Australian residential address (Form 926 obligation) but concluded that departmental shortcomings in communications (survey forms not sent) meant the failure was not determinative; weighed against the substantive steps taken, the statutory test in s 134(2) was satisfied (paras 46–49).
Before: The Tribunal emphasised the settled approach that, in cancellation matters, the Tribunal's function is to decide whether the cancellation was correct at the time it was made (citing Freeman and following recent AAT authorities: Re Griffiths, Birds Eye) (para 37). That principle was already established in Australian administrative law.
After: This decision applies the Freeman temporal limitation to a Migration Act s 134 cancellation and demonstrates concrete application where the formalities of share transfer occurred after the cancellation date but the Tribunal was prepared to accept that the agreement had been reached prior to the cancellation. The case reinforces that the Tribunal will examine the substance of commercial arrangements (substance over accounting form) when determining whether an 'ownership interest' is 'substantial' and that technical non-compliance with ancillary administrative obligations (address notification) will be weighed against substantive efforts to meet the statutory criteria (paras 39–41, 46–49).
Practitioners should therefore note: (a) evidence establishing an agreement concluded before the cancellation date can satisfy s 134(2) even if formal transfer occurs thereafter; (b) the Tribunal will consider the matters in s 134(3) holistically; and (c) departmental procedural lapses can be material when evaluating technical non-compliance.
Quote (para 37): "Where the decision under consideration is a cancellation decision, the Tribunal must consider whether or not that decision was correctly made at the time it was made."
Finding on ownership (para 39): "The Tribunal finds that Ms Wong has purchased 1 ordinary share representing a 25% interest... which in the Tribunal's view should be considered substantial."
Departmental procedure (para 48): "Notwithstanding Ms Wong's admission that she did not comply... the Tribunal finds it odd that the Department... chose not to send either the 24 month or 36 month survey form..."
This decision is valuable in cases with these features:
This decision explicitly followed and applied the Freeman temporal-limit approach and recent AAT authorities (Re Griffiths and Birds Eye) (para 37). It stands as an instance of the AAT applying those authorities to the Migration Act s 134 context. The judgment itself references these authorities as settled law for the Tribunal's approach; it does not purport to change the law. Practitioners should treat Freeman and the cited AAT decisions as the controlling approach to custodial temporal scope for cancellation reviews, and this case as reinforcing that approach in s 134 matters.
Because the decision is an AAT decision, its precedential weight is persuasive rather than binding on courts. Where courts consider migration cancellations, they will generally adhere to the Freeman principle but may address different evidentiary or legal questions. This AAT decision is a practical example of how the Tribunal applies the statutory list in s 134(3) and treats commercial substance and departmental procedure.
Formality v agreement timing: The Tribunal accepted an oral agreement in early February 2001 and treated it as concluding the deal despite formal transfer later. While persuasive here, subsequent cases may test how much contemporaneous documentary evidence is required to establish that an agreement existed at the cancellation date where the formal transfer post-dates the cancellation.
Degree of 'substantial' ownership: The Tribunal treated 25% as substantial in the case's commercial context. Future disputes with different percentages or different business sizes may raise contested lines about when a minority holding is 'substantial' for s 134(10), and whether industry/context matters in that assessment.
Weight of administrative non-compliance: The Tribunal reduced the weight of Ms Wong's failure to notify her address because of Departmental conduct. The proper allocation of weight between a visa-holder's technical non-compliance and departmental notification procedures remains a fact-sensitive question for courts and tribunals.
'Eligible business' forecasts: The Tribunal accepted prospects of export links and expansion as sufficient to deem Sinem an 'eligible business'. The boundary between speculative future plans and adequate evidence of an 'eligible business' under s 134(10) may require further elaboration in cases with less concrete expansion prospects.
Use of post-cancellation evidence: The Freeman principle limits inquiry to facts at the cancellation date, but how tribunals should treat later events that shed light on earlier intentions or agreements (for example, conduct after the date that supports the existence of an earlier agreement) remains an area where evidential standards and admissibility may be litigated.
In practice, lawyers advising visa-holders should compile contemporaneous documentary evidence of any agreement which is said to have been concluded before a cancellation decision, ensure that statutory administrative undertakings (for example notification of address) are complied with or explained early, and preserve materials evidencing substantive efforts under each s 134(3) factor (business proposals, funds transferred, roles agreed, presence in Australia, etc.), since the Tribunal will weigh these matters in deciding whether s 134(2) precludes cancellation (paras 39–45).
DECISION AND REASONS FOR DECISION [2002] AATA 54
And Minister for Immigration, Multicultural and Indigenous Affairs
Decision The Tribunal sets aside the decision under review and substitutes a new decision that Ms Wong's Subclass 127 Business Skills Visa should not have been cancelled.
IMMIGRATION - Business Skills Visa - Applicant failed to comply with visa requirement to notify Department of her residential address and provide information on business activities - Business Skills Visa subsequently cancelled - whether Applicant had made a genuine effort to obtain a "substantial ownership interest" in an "eligible business" in Australia
JURISDICTION - cancellation of visa - Tribunal must determine the correct or preferable decision at the time the decision was made
Migration Act 1958: ss 134(1), 134(2), 134(3), 134(10)
Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783
Freeman v The Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
1. This is an application by Yuk Chun Wong ("the Applicant") for a review of a decision of a delegate of the Minister for Immigration and Multicultural Affairs (as it then was named) ("the Respondent") made on 9 April 2001 to cancel Ms Wong's Subclass 127 Business Skills Visa pursuant to s134(1) of the Migration Act 1958 ("the Act"). At the hearing, the Applicant was represented by Arnold Conyer, Solicitor, of Didmond Persah, Solicitors, and the Respondent was represented by Zak Chami, Solicitor, of Clayton Utz, Lawyers. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the T Documents"), together with the documents tendered by the parties. Oral evidence was given by the Applicant and by Vincent You.
2. Ms Wong was born in Hong Kong on 21 January 1959. She is aged 42 and single. On 11 April 1996, Ms Wong applied for a business skills visa to migrate to Australia. At that time, she worked as a manager for the Wing Fung Metal Co. Ltd in Kowloon, whose core business is the wholesaling and retailing of metal and related products. In Form 928 Supplementary Information, also dated 11 April 1996 (T13), Ms Wong stated that she intended to conduct an export business in Sydney, exporting Australian metal products to Asian countries. She stated that she planned to invest $500,000 in her business in Australia.
3. On 11 March 1997, Ms Wong was notified by the Australian Consulate General in Hong Kong that her application for a permanent entry visa to Australia had been granted (T71). Ms Wong was subsequently issued with a Subclass 127 visa on 28 April 1997 and made her initial entry into Australia on 22 January 1998. In a Form 926 Declaration dated 11 April 1996 (T11), Ms Wong agreed to notify the then Department of Immigration and Ethnic Affairs of her residential address within 28 days of her first entry into Australia as a migrant. She did not do so, although Ms Wong noted that she had stated her mother's address at Strathfield on the incoming passenger card when she first came into Australia on her business visa on 1998. Both her mother and sister live at this address. Ms Wong also declared she understood that the Department conducted "regular surveys of business skills migrants (usually at 12/24 and 36 month intervals)" and agreed to complete such survey forms and provide information as required. Ms Wong said she would have speeded up negotiations for the purchase of her share of the business had she been aware of the necessity to complete the survey forms.
4. On 7 December 1999, a standard letter asking Ms Wong to complete a 24 month survey about her business activities was prepared and, subsequently, on 1 December 2000, a similar letter requiring her to complete a 36 month survey about her business activities was prepared. In both cases, because she had not provided a residential address in Australia in accordance with the Form 926 Declaration, the letters were not sent to her.
5. On 6 December 2000, a delegate of the Respondent wrote to Ms Wong care of her mother's address at Strathfield notifying her of an intention to cancel her visa and inviting her to respond. Ms Wong responded by fax dated 18 January stating that she had just received the letter dated 6 December 2002 faxed to her by her sister in Australia and asking for an opportunity to explain her circumstances. She also notified that her address for correspondence was her mother's address in Strathfield. Receipt of Ms Wong's fax was acknowledged by letter dated 30 January 2001 and Ms Wong replied more fully by letter dated 5 February 2001.
6. Ms Wong most recently arrived in Australia on 30 March 2001 and has remained here since. On 9 April 2001, a delegate of the Respondent decided to cancel Ms Wong's Subclass 127 Business Skills Visa and, on 9 May 2001, Ms Wong lodged an application with the Tribunal for a review of that decision.
7. Section 134 of the Act empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in Ms Wong's case are as follows:
(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; 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).
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.
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
8. Ms Wong confirmed that she was a business manager in Hong Kong. She first visited Australia about 10 years ago and liked it, and so applied to migrate to Australia in 1996. After being issued with a visa in April 1997, Ms Wong continued to carry on her business in Hong Kong, but, at the same time, remitted AUS$700,000 to Australia, deposited in a term deposit at the Westpac Bank, and began the task of finding a business partner in Australia. She had known Vincent You in Hong Kong about 10 years ago, but had had no contact with him for some time. In late 1998, Ms Wong heard through a friend that Mr You was engaged in a business in Sydney and was looking for a partner. In February 1999, she phoned Mr You when she was in Australia and he invited her to visit his factory. She went to the factory and spent approximately half a day there, and, subsequently visited the factory on three or four occasions to see his food manufacturing process in operation.
9. Mr You told Ms Wong that the business, Sinem Pty Ltd, trading as Herman's Dutch Croquettes, was jointly owned by him and his wife, but that his wife's role was limited to the financial side of the business. Mr You said he needed an additional partner in order to enable him to expand his business particularly in the South-East Asian market. They discussed the business at some length over a period of time. Ms Wong knew more about the South-East Asian Market as a result of her experience in Hong Kong and it became apparent that her experience would complement Mr You's. It was decided that Mrs You would be responsible for the accounting and financial side of the business, Mr You would be responsible for production, and Ms Wong would be responsible for customer service and marketing. Mr and Mrs You agreed to transfer 25% of the shares in the company to Ms Wong in consideration of her paying between $160,000 and $180,000 depending on the valuation of the business made by the company's accountant.
10. On this occasion, Ms Wong spent about 6 weeks in Australia returning to Hong Kong on 13 March 1999. She visited Australia again for 18 days in March 2000, by which time, following ongoing correspondence between herself and Mr You, the main terms of their agreement were in place. However, in March 2000, the company's accountant was busy preparing for the introduction of the GST and Ms Wong returned to Hong Kong without matters being finalised.
11. In the meanwhile, Ms Wong had no further correspondence with the Respondent until 18 January 2001 when she received from her sister in Sydney a faxed copy of the Respondent's letter dated 6 December 2000 informing her that the Respondent was considering cancelling her visa. Ms Wong said she had not previously received any survey forms. On the application for her visa, she had stated her home address in Hong Kong, where she has lived for over 10 years, and she assumed the Respondent would communicate with her there. She said that if she had received a survey from the Respondent, she would have completed this, informing the Respondent of the stage in the negotiations which had then been reached. She said the negotiation with Mr You took some time because she wanted to see the financial statements for the business in order to be assured of its improving performance.
12. Ms Wong said Sinem Pty Ltd employs full-time and 3 part-time staff and has a turnover of approximately $300,000 per annum from the manufacture and sale of croquets, made (for example) of chicken or potatoes. The business is proposing to expand its product line, especially in manufacturing chicken nuggets for the fast food market. The business has a customer called Oporto with a chain of fast food franchises which is expanding rapidly. In order to meet Oporto's needs, it would be necessary to expand Sinem's cold storage facilities at a cost of approximately $80,000 to $100,000. Ms Wong is also looking for additional suitable food processing machinery for the business in Hong Kong and mainland China.
13. Ms Wong said although she and Mr and Mrs You had agreed that she would purchase 25% of the shares in the company some time ago, the exact amount she was to pay for this share depended upon the latest financial statements. These were faxed to her by Mr You in late January 2001. Having received these, she and Mr You discussed an appropriate price and she also consulted an accountant for advice. Ms Wong said before she wrote to the Respondent on 5 February 2001 (T81), she and Mr and Mrs You had agreed to a valuation of a 25% share in the company at $150,000. Thereafter, it was just the formalities of transferring the shares which had to be completed and it was necessary for Ms Wong to come to Australia to transfer the money to Mr and Mrs You. Otherwise, Ms Wong believes the "deal" had been agreed by early February 2001. On Mr and Mrs You's part, they then engaged the company's accountant's to prepare the necessary documents.
14. Ms Wong confirmed that she is now a director and shareholder of Sinem Pty Ltd, having paid $150,000 for a 25% share of the company. Ms Wong said she has transferred a total of about AUS$900,000 from Hong Kong to Australia. Having paid $150,000 for her share in the company, Ms Wong has about $800,000 remaining on a one month term deposit with the Westpac Bank. She is looking for a house to purchase and also intends to set some money aside for further investments in the business which may be needed if the business is to expand. Ms Wong also confirmed that she is now working for the company on a full-time basis.
15. In cross-examination, Ms Wong was asked about the Form 926 Declaration which she signed on 11 April 1996 (T11). She said that at the time, she was assisted by Mr Poon, a migration specialist in Hong Kong, who explained the nature of the Declaration to her before she signed it in his office. However, Mr Poon did not provide her with a copy of the declaration and she did not really take note of the requirement for her to notify her residential address after her initial entry on the visa. Ms Wong said Mr Poon also gave her Form 962(i) Migrating to Australia - Business Skills (Migrant) Class - Requirements (T85) to read, but he did not give her a copy to take away. Ms Wong acknowledged that on page 6 of this form it states that business skills migrants must keep the Department informed of their current residential address in Australia for 3 years after arrival. Ms Wong noted the form did not, however, say how a migrant was to do this. Page 6 of the Form also refers to the surveys monitoring the migrant's business activities. Ms Wong said she did not know that she had to complete survey forms at 12, 24 and 36 months after arrival. When Mr Poon showed her the form, he emphasised the most important thing was for her to engage in business in Australia.
16. Ms Wong said that she usually takes holidays between January and March, around the time of the Chinese New Year. After the visa was issued in April 1997, she took time off in late January 1998, arriving in Australia on 22 January 1998 and staying for 11 days. She came to look at the business environment but also to have a holiday. Her next entry into Australia was on 31 January 1999, when she stayed for 43 days departing on 13 March 1999. On this occasion, she specifically came to see Mr You and she took extra leave in order to spend time learning about his company. Her next entry into Australia was on 12 March 2000 when she stayed for 18 days departing on 30 March 2000. Ms Wong said she last arrived in Australia on 30 March 2001 and has remained here since.
17. Ms Wong said it was on 18 January 2001 that her sister faxed to her in Hong Kong the Respondent's Notice of Intention to Cancel dated 6 December 2000. She replied to the Respondent on that day, asking for more time to get together the documents and provide a more detailed reply. Then on 9 April 2001, Ms Wong was given notification of the Respondent's decision to cancel her visa. At that time, she had not completed any survey forms because she had not received such forms.
18. Ms Wong was asked about the formalities relating to her purchase of 25% of Sinem Pty Ltd. She acknowledged that the form the transaction took was for one of the four shares in Sinem Pty Ltd to be transferred to her with the stated consideration being $50,000 and the remaining $100,000 of the purchase price being paid to Sinem Pty Ltd as a loan. She agreed that the loan document states that this sum is repayable to her on her departure from the company as a shareholder and director.
19. Ms Wong was also asked about other details of her move to Australia. She said that the financial statements for her Hong Kong business were due in December 2000 and she then needed 2 to 3 months to put together the customer information in order to hand over her functions to other staff. Nevertheless, in the year 2000 she was already helping Mr You in sourcing appropriate food processing machines. Ms Wong was asked about a business proposal for Sinem Pty Ltd dated 4 April 2001 (A2). She agreed that this proposal is brief but said that at that time, a more detailed proposal could only be worked out after she had been working in the company for some time. She said new products were not mentioned in the proposal but she had already discussed with Mr and Mrs You the possibility of processing hamburgers. Ms Wong reiterated that she regards the $150,000 which she has currently invested in the company as the first step in her investment. She anticipates that a further investment will be required in order to cover the costs of new machinery.
20. Mr You confirmed that he and his wife are both directors and shareholders of Sinem Pty Ltd. They purchased the business about 5 years ago after it had been in existence for 15 years. Sinem Pty Ltd is a food manufacturing company which makes a variety of croquets including salmon, beef, chicken, and potato, and also makes chicken nuggets. Mr You said the business has 3 types of client: wholesalers, franchise businesses, for example Oporto Chicken, and airlines. The business employs 7 people and has a turnover of approximately $300,000 per annum. Oporto Chicken, a chain of fast food franchises, is Sinem Pty Ltd's largest client accounting for some 30% of sales.
21. Mr You said he formed the view that he needed a partner in the business because he was under pressure both internally, within the company, and externally. He had been told by a representative by Oporto Chicken that "he was a one man band". Therefore, about 2 ½ years ago, Mr You started looking for a partner, initially spreading the word amongst associates in the industry and then among people he knew. When Ms Wong phoned him in early 1999, he invited her to visit Sinem Pty Ltd's factory to see the business for herself and, subsequently, they had a number of meetings. He explained to her why he was looking for a business partner and what his expectations of a partner were and his own preferred role in the business. At that time, his wife's role in the business was limited to the administrative side, paying bills, talking to the company's accountants and looking after the financial side of business. Mr You performed the remainder of the managerial tasks. Mr You acknowledged that it had taken him some time to find a partner. He said this had been because he was always busy doing a range of different things and he had not been able to devote very much time to this need.
22. Between February 1999 and the first part of 2001, Mr You said he continued to have meetings with Ms Wong. He decided to sell her 25% of the shares in the company, but had some difficulty in obtaining financial statements and a valuation from the company's accountant in order to calculate the value of a 25% share. Mr You said the financial statements were proof for Ms Wong confirming the financial strength of the business Finally, in late January or early February 2001, Mr You obtained the financial statements and faxed these to Ms Wong in Hong Kong. On the basis of the accountant's valuation of the business at $600,000, comprising $280,000 for the business premises and $320,000 for the business itself, he proposed a valuation for a 25% share in the company at $150,000.
23. Mr You said he found Ms Wong to be cautious in making a commitment to the business. Initially, she asked a lot of questions especially as to why he was seeking a business partner. As he grew to know her better, Mr You found Ms Wong had many good attributes which complemented his. While he is good at seeing the "big picture", she is good at matters of detail. When it became apparent that Ms Wong would purchase a share in the business, he asked her to help him in sourcing food processing machinery, which she did. As a result, the business has acquired a new food processing machine at a cost of about $35,000. Ms Wong assisted Mr You in doing this prior to the finalisation of her purchase of the share in the business.
24. When, in early February 2001, when Mr You telephoned Ms Wong to formally offer her a 25% share in the company for $150,000, Ms Wong accepted the offer and, at the end of the conversation, it was Mr You's belief that "he had struck a deal with Ms Wong". Mr You said he particularly remembered this telephone discussion with Ms Wong because he had spoken about it to his wife afterwards.
25. Mr You said his wife had prepared the correspondence with Ms Wong which had been ongoing between March 1999 and 2001 (A1). Mr You emphasised that, for him, having a partner was more important than having additional funds. Had Ms Wong said "no" to his offer he would have looked for another partner. Similarly, if Ms Wong has to cease her involvement in the company, this will have "nasty consequences for the business". Mr You said he believed the business will be looked at negatively by its largest client, Oporto. The relationship with Oporto is particularly important at the moment because there is the possibility of a significant expansion of Sinem Pty Ltd's business as a result of the success of the Oporto chain of franchises, with the result that there is a possibility of an extra $2,000,000 in turnover. Mr You said the loss of Ms Wong to the business would put this expansion at risk.
26. In cross-examination, Mr You was asked about the $150,000 paid by Ms Wong. It was pointed out to him that the consideration for the transfer for the share was $50,000 and, as to the remainder, Ms Wong had made the company a loan of $100,000. Mr You said this must have been an arrangement arrived at by his wife and the company's accountant.
27. Mr Conyer, for Ms Wong, said the substance of this matter is about timing because she is a person who has genuinely invested in a business in Australia. Mr Conyer drew the Tribunal's attention to the Decision Record for the cancellation of Ms Wong's visa (T2) which states on the second page:
Ms Wong also agreed to notify the Department of Immigration and Multicultural Affairs (DIMA) of any changes in her residential address, within 28 days after a change, including any residential address she may have outside Australia, for 3 years after her initial entry into Australia.
28. Mr Conyer said Ms Wong's residential address in Hong Kong had not changed in the period after her initial entry into Australia and she stated her address in Australia, being her mother's address in Strathfield, on an incoming passenger card when she entered Australia. In this case, Departmental officers had presumably looked to see if a new residential address had been given and when they found this had not happened, returned the 24 month and 36 month survey forms to the file. Ms Wong could not comply with the requests that she complete the survey forms because she did not receive them. Mr Conyer noted that the current Form 926 Declaration has been amended to include a clearer and more emphatic statement about the need to provide a residential address after initial entry. Mr Conyer questioned whether, pursuant to s 134(1), the Minister can be satisfied of the matters listed there, if there is nothing on the Departmental file.
29. Mr Conyer referred the Tribunal to the definition of "eligible business" in s 134 (10) noting that an eligible business means a business that the Minister reasonably believes "is resulting" or "will result" in one or more of the matters listed. In other words, the results for the eligible business could be in the future. Mr Conyer noted that Mr You has been endeavouring to expand Sinem Pty Ltd's business particularly in manufacturing processed foods stuff for fast food chains. Mr You's attracting a new partner in to the business was part of his strategy for expansion. Mr Conyer contended that, at the very least, the expansion of the business will see "the creation or maintenance of employment" (para (b) of the definition) and result in "an increase in commercial activity and competitiveness" within this sector of the Australian economy (para (f)). Mr Conyer noted that the Respondent has not contended that Sinem Pty Ltd is not an eligible business.
30. With regard to s 134(2) and whether Ms Wong has made a "genuine effort", Mr Conyer noted that Mr You had made it known he was seeking a partner and had been contacted by Ms Wong in February 1999. Mr You gave evidence that Ms Wong proceeded cautiously in exploring this business opportunity. However, it is clear that in February 2001, the parties were "ad idem" with both believing they had a deal, subject only to their signing an agreement. Ms Wong had transferred over AUS$700,000 to Australia in 1997 from which she drew $150,000 to pay for her 25% share in the company. Mr Conyer contended that how the consideration of $150,000 was structured was an accounting and administrative matter and was immaterial to the fact that she had paid $150,000 and received a 25% share of the company.
31. Thus, Mr Conyer contended that in February 2001, Ms Wong had obtained a substantial ownership interest in an eligible business in Australia. She had also previously used her skills in the management of the company by sourcing food processing machinery at Mr You's request, to enable the company to expand its product range. Moreover, having moved to Australia, it is clear that Ms Wong intends to continue to make such genuine efforts in the future. With regard to the matters listed in s 134(3) that the Minister may take into account in determining whether a person has made a genuine effort, Mr Conyer said Ms Wong had developed a business proposal with Mr You for the expansion of Sinem Pty. Ltd's business and had provided particular assistance in relation to the acquisition of a new $35,000 food processing machine (s 134(3)(a)). Mr Conyer noted that Ms Wong has partners in the business (s 134(3)(b)) and spent approximately 2 years researching the conduct of the business (s 134(3)(c)). Mr Conyer acknowledged that Ms Wong had only spent 84 days in Australia up to the date of the decision but emphasised that she has been here continuously since last arriving on 30 March 2001 (s 134(3)(d)). Ms Wong has transferred in excess of $700,000 to Australia (s 134(3)(e)) of which she has invested $150,000 in purchasing a 25% share in Sinem Pty Ltd (s 134(3)(f)) and is prepared to invest further funds in the company. There is no dispute that Sinem Pty Ltd is involved in business activity (s 134(3)(g)) and since Ms Wong had not received any notices under s 137, she had not failed to comply with such notices (s 134(3)(h)). In conclusion, Mr Conyer submitted that Ms Wong had made genuine efforts and that there was no basis for the cancellation of her visa.
32. Mr Chami, for the Respondent, drew the Tribunal's attention to the decision in Freeman v The Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342, where Justice Davies drew a distinction between decisions to cancel a pension or benefit and decisions in respect of a refusal to grant a pension or benefit. In the case of a decision to cancel, the Tribunal is limited to a consideration of events up to the time of the primary decision, whereas in the case of a decision to refuse the grant of a pension or benefit, the Tribunal is not so limited. Mr Chami referred to a number of decisions in which this approach had been followed including two recent decisions by the Tribunal in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Birds Eye and Companies Auditors and Liquidators Disciplinary Board [2000] AATA 783.
33. Mr Chami noted that Mr You could not recall precisely when the "deal" was done. It was evident, however, that any deal must have been concluded after Ms Wong received the Notice of Intention to cancel her visa, when she received this on 18 January 2001. Mr Chami submitted that none of the correspondence between Ms Wong and Mr You provides any evidence of a concluded agreement at that time and the formal documentation for the transfer to Ms Wong of a 25% interest in the company did not occur until 20 April 2001.
34. Mr Chami submitted that under paragraph 4 of the Form 926 declaration signed by Ms Wong at the time she applied for a business visa, she gave an undertaking to notify her residential address after her first entry into Australia on the business visa. She did not do so. Mr Chami said the obligation to notify her residential address was also set out in the Information Sheet which, on Ms Wong's evidence, was explained to her by Mr Poon at the time she signed the Declaration.
35. Mr Chami noted that in her migration application (T12) Ms Wong replied in answer to Question 41 that she planned to invest AUS$500,000 in a business in Australia. She has in fact invested $150,000 of which the consideration for the transfer of one share in Sinem Pty Ltd was $50,000 (R2) and the remaining $100,000 was essentially a loan taking the form of a debenture (R1). Mr Chami submitted that Ms Wong had made a late attempt to try and salvage the situation with regard to her visa.
36. With regard to whether or not Ms Wong made a genuine effort to satisfy the requirements of s 134(2), Mr Chami referred the Tribunal to s 134(3) and the matters listed there. In particular, he noted with regard to sub paragraph (a) the brevity of Ms Wong's business proposal (A2), with regard to sub paragraph (d), the short period - 84 days to the time of the decision - which Ms Wong has spent in Australia, with regard to sub-paragraph (e, the fact that the $700,000 transferred by Ms Wong to Australia was transferred before the grant of a visa and has for the most part been a passive investment, with regard to sub-paragraph (g), Mr You seemed unclear as to when he had sought Ms Wong's assistance in sourcing food processing machines but it seemed this might not have occurred until February 2001, and with regard to sub-paragraph (h), the fact that Ms Wong had failed to comply with her obligation to provide an Australian residential address.
37. The Tribunal notes the preliminary point made by Mr Chami as to the evidence that the Tribunal should take into account in reviewing the Respondent's decision to cancel Ms Wong's business visa. The Tribunal acknowledges the approach adopted in Freeman (supra) that the jurisdiction of the Tribunal in respect of a cancellation is to determine the correct or preferable decision at the time that the decision to cancel was made. This approach has been followed in a number of cases, and was recently re-affirmed by Deputy President Forgie in Griffiths (supra) at paragraph 39, where the Deputy President said:
Where the decision under consideration is a cancellation decision, the Tribunal must consider whether or not that decision was correctly made at the time it was made.
The Tribunal will therefore have regard to all relevant evidence to enable the making of findings of fact with respect to the decision made at the date of cancellation.
38. The decision under review is a decision dated 9 April 2001 to cancel Ms Wong's Subclass 127 Business Skills visa pursuant to s 134(1) of the Act. Section 134(2) provides that the Minister must not cancel a visa under sub-section (1) if the Minister is satisfied that the person:
(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.
When considering whether a person has made the genuine effort referred to in sub- section (2), a Minister may take into account the matters set out in sub-section (3), quoted above.
39. The first issue for the Tribunal to determine is whether or not Ms Wong has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. A definition of "eligible business" and "ownership interest" appears in s 134(10) quoted above. Based on the oral evidence of both Ms Wong and Mr You and on the Minutes of a meeting of the Directors of Sinem Pty Ltd (R1) the Tribunal finds that Ms Wong has purchased 1 ordinary share representing a 25% interest in Sinem Pty Ltd. While the Tribunal notes the formal transfer took place on 26 April 2001 (R2), the Tribunal accepts Ms Wong's and Mr You's evidence that they had concluded their agreement for Ms Wong to purhase this share for the sum of $150,000 in a telephone conversation in early February 2001, when Ms Wong was still in Hong Kong. The formal transfer of the share took place after Ms Wong had arrived in Australia on 30 March 2001 and had withdrawn funds from her term deposit with the Westpac Bank in Sydney to pay for the share. The Tribunal notes that by purchasing a 25% interest in Sinem Pty Ltd as a shareholder, Ms Wong acquired an "ownership interest" as defined in s 134(10) which in the Tribunal's view should be considered substantial. Furthermore, in the Tribunal's view, Sinem Pty Ltd is an "eligible business" within the definition in s 134(10) on the basis that the business is creating or maintaining employment in Australia, and will lead to an increase in commercial activity and competitiveness within the fast food sector of the Australian economy. The Tribunal notes that the business is also seeking to develop links into the South East Asian regional market which may in the future involve the export of processed food.
40. The Tribunal notes that Ms Wong first contacted Mr You to discuss the possibility of purchasing an interest in Sinem Pty Ltd in February 1999. The Tribunal accepts Mr You's evidence that Ms Wong adopted a cautious approach to making such a purchase, enquiring at length about the business and its financial position. However, it appears from the correspondence between Mr You and Ms Wong that as early as June 1999, they were discussing a proposal by Ms Wong to purchase a 25% share of the business (A1). This was, however, dependent upon Ms Wong being satisfied as to the company's financial situation.
41. In the Tribunal's opinion, the fact that the $150,000 paid by Ms Wong took the form of $50,000 paid for the transfer of the share and $100,000 as a loan to the company, is not of any great significance. Mr You's evidence was to express surprise when he was referred to this in evidence, with the explanation that this arrangement would have been made on the advice of the company's accountant. The Tribunal finds that Ms Wong has other substantial assets in Australia, which she proposes to use, in part, for the purchase of a house, but part of which she is also prepared to commit to a further investment in the company. Such an investment may be required if, as hoped, an expansion of Sinem Pty Ltd's business with the Oporto fast food franchise business eventuates, with the consequence that Sinem Pty Ltd will need to invest in additional food processing machinery and cold storage facilities. Thus, the Tribunal is satisfied pursuant to s 134(2)(a), that Ms Wong has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia.
42. The Tribunal finds that Ms Wong has substantial business experience in Hong Kong. She has an 16.7% interest in her family company, Wing Fung Metal Co Ltd, a company principally engaged in the wholesaling and retailing of a range of imported metal products for whom she worked full-time from July 1991. In the Tribunal's view, it was reasonable that as the company's manager responsible for administration, accounting, and marketing, she would want to proceed cautiously in passing her role in that company to another person and in making an investment in Australia, where she had only visited during holidays, where she had limited knowledge of the Australian business environment, and where the first language was not her own.
43. Thus, it was inevitable that her transition from Hong Kong to Australia would take time. Mr You and Ms Wong clearly had had ongoing discussions about their prospective roles in the company since at least 1999, as is apparent from a letter dated 13 June 1999 (A1). Moreover, it appears from a letter to Ms Wong dated 20 April 2000 (A1), that at that time, there was general agreement about Ms Wong purchasing a 25% share in the company. That letter dated 20 April 2000 also supports Ms Wong's evidence that the transfer of the share was delayed in 2000 by the company accountant being focused on arrangements for the GST.
44. The Tribunal also notes Ms Wong's and Mr You's evidence that during the year 2000, Mr You asked for Ms Wong's assistance in sourcing appropriate food processing machines outside Australia. Overall, in the Tribunal's view, there is sufficient evidence to warrant a finding that Ms Wong had, in all the circumstances, made a genuine effort to utilise her skills in the management of Sinem Pty Ltd so as to satisfy s134(2)(b).
45. It is clear that Ms Wong's permanent move to Australia was stimulated by service of the Respondent's Notice of Intention to Cancel. She has been in Australia since 30 March 2001 and is now working full-time for Sinem Pty Ltd. The Tribunal finds, based on Ms Wong's and Mr You's evidence, that she is committed to the success of Sinem Pty Ltd and to expanding its business. To that end, the Tribunal finds, pursuant to s 134(2)(c), that she intends to continue to make genuine efforts in connection with her ownership and participation in the management of the business.
46. The Tribunal notes that Ms Wong did not comply with her undertaking to notify the Department of her residential address after her first entry into Australia utilising the business visa. Ms Wong's evidence is that she signed the Form 926 Declaration (T11) at the office of Mr Freddy Poon, the migration specialist who was assisting her in Hong Kong. Ms Wong said Mr Poon explained the terms of the Declaration to her and the Form 962(i) Migrating to Australia Business Skills (Migrant) Class - Requirements, although he did not provide her with a copy of these documents. Ms Wong signed the Form 926 Declaration on 11 April 1996 at a time when she said she was not as competent in English as she is today.
47. In her migration application lodged on 11 April 1996 (T7), Ms Wong detailed her address in Hong Kong of the past 10 years. It is apparent that the Department also had a residential address for Ms Wong in Australia, care of her mother at Strathfield. This is where the Notice of Intention to Cancel Ms Wong's visa (T77) was sent, although the Tribunal has been unable to determine when notification of that address occurred from the T documents. Ms Wong told the Tribunal that she had notified this address on the incoming passenger cards which she had completed, but it seems unlikely that this would have been the source for the purposes of the Department's file concerning her visa.
48. Notwithstanding Ms Wong's admission that she did not comply with her undertaking to notify a residential address after her initial entry, the Tribunal finds it odd that the Department, which apparently had an address for her both in Australia and in Hong Kong, chose not to send either the 24 month or 36 month survey form to her or at least to enquire as to her residential address in Australia for the purpose of sending her the forms. Instead, the survey forms appear to have been placed in the file, although these were not included in the T documents. The Tribunal notes that in the record of decision, it is stated that "on 1 December 2000 a standard letter requesting Ms Wong to complete a 36 month survey about her business activities was prepared. Yet once again could not be sent". However, on 6 December 2000, the Notice of Intention to Cancel was sent to Ms Wong care of her mother's Strathfield address.
49. Had the Department attempted to contact Ms Wong in December 1999 at the time that the 24 month survey was prepared, and had Ms Wong been reminded of her obligations as a business migrant, the Tribunal feels sure that she would have complied with the Department's requirements, including completing the survey forms, with the consequence that this matter might never have arisen.
50. In conclusion, the Tribunal is satisfied that Ms Wong has made the genuine effort required by s 134(2) and that the Minister's discretion to cancel a business visa pursuant to s 134(1) should not be exercised. The Tribunal therefore sets aside the decision under review and substitutes a new decision that Ms Wong's Subclass 127 Business Skills Visa should not be cancelled.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R P Handley, Deputy President
......................................................
Solicitor for the Applicant: Mr A Conyer, Diamond Peisah Solicitors
Solicitor for the Respondent: Mr Z Chami, Clayton Utz Lawyers
Freeman
The Secretary, Department of Social Security
(1988) 19 FCR 342
The Tribunal set aside the decision under review and substituted a new decision that Ms Wong's Subclass 127 Business Skills Visa should not have been cancelled (Decision; para 50).