IMMIGRATION & CITIZENSHIP - cancellation of Business Visa - minimal business activity - no business proposals - minimal investment - no genuine effort made to utilise skills in actively participating at a senior level in the day-to-day management of business - activities carried out by the business not eligible business - cancellation of secondary visas of applicant's wife and children - no evidence of extreme hardship to be suffered by secondary visa holders.

Migration Act 1958 - ss 134, 135

Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1

1. This is an application to review decisions to cancel the Applicant's Business Visa and the secondary visas of his wife and two children pursuant to section 134 of the Migration Act 1958.

2. Mr Tang applied for his visa on 14 September 1995. He gave an undertaking which reflected the obligations imposed on holders of such visas. These included an undertaking that he would "make genuine efforts to actively participate, as an owner or part owner, in the day-to-day management at a senior level of a new or existing business in Australia". Visas to Mr Tang and his family were granted on 11 July 1996. They were valid for entry for four years and entitled the holders to remain in this country permanently.

3. Approximately two years later, on 7 September 1998, a routine two year survey was sent for completion by Mr Tang. He completed and returned it late. The responses in the survey were vague. Mr Tang said that he had done some research and had contacted some agencies to find out "more information about Australia trade/business". No details were given. He indicated that "within the next 12 months I will set up the business in Australia". Although his original application referred to possible export of materials used in the manufacture of plastics, his response in this survey was that the proposal was mainly "to trade aluminium tubes and plate for my Hong Kong manufacturing company and other buyers".

4. In order to obtain more tangible information, the Department asked for more documentary evidence in January 1999. No further response was received.

5. A three year survey was sent on 21 September 1999. On 15 October 1999 a notice of intention to cancel the visas was also sent to Mr Tang at the address he had nominated in Australia.

6. He responded to this notice on 4 November 1999 stating that he had registered a company, Tiproll Pty Limited, on 28 October 1999. He explained that he was the Managing Director of a company carrying on business in Hong Kong and China and that it was necessary for him to stay there to continue this business. He agreed in his letter that he had not spent much time in Australia but he hoped that Tiproll Pty Limited would be able to build up its business of exporting aluminium plate to his Hong Kong company and others.

7. Not being satisfied that the conditions of the visas had been met and being satisfied that there were grounds for cancellation of the visas, the reviewable decisions were made by a delegate on 18 January 2000.

8. Circumstances giving rise to a power of cancellation are set out in section 134 as follows:

"134. (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;

(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)."

9. Subsection (9) provides that the Minister must not cancel a Business Visa under the relevant subsections unless a notice under section 135 of intention to cancel is given within three years (relevantly) from the date of the grant of the visa. In my view this does not mean that when reviewing the cancellation decisions, the circumstances existing at a date three years from the date of the visas are the relevant circumstances. The ordinary principles of administrative review apply. It is the function of this Tribunal to deal with the question having regard to the evidence put before it at the time and having regard to all facts and circumstances that have occurred up until the date of the hearing.

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;"

11. Grounds for cancellation in subsection (1) are expressed as alternatives. Tiproll Pty Limited has an issued capital of 100 shares of $1 each, of which 90 are held by the Applicant and 10 by his sister-in-law. Mr Tang has therefore obtained a substantial ownership interest in that company. It was submitted by the Respondent, however, that the company did not carry on an eligible business. There is therefore an issue whether the requirements of subparagraph (a) have been met.

12. As to subparagraph (b), the evidence was clear, however, that the Applicant is "not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business". Whether or not Tiproll Pty Limited carries on an eligible business, and whether or not Mr Tang has an intention for the future in terms of subparagraph (c), there can be no question that the power of cancellation has been enlivened by Mr Tang's failure to comply with the obligations in subparagraph (b).

13. Mr Tang's sister-in-law lives in a unit at Wollstonecraft. This is the same address as the registered office of Tiproll Pty Limited. The company has no other premises. In her evidence she said that, at Mr Tang's request, she sought a suitable supplier of sheet aluminium for export to Hong Kong. This resulted in a contact with Capral Aluminium Limited (formerly Alcan Australia Limited). This company has been established for over 50 years. It operates a smelter in New South Wales and, according to its sales literature, it has a production capacity of 150,000 tonnes per year of value added aluminium product for export, downstream semi-fabrication and sale to third party customers. It is totally independent of Mr Tang.

14. The Applicant is a director and beneficial shareholder in four Hong Kong companies. Two of them manufacture toys. The relevant company for present purposes is Hong Kong Electrical Automatic Works Limited. This company manufactures forming machines in Hong Kong and in that process uses aluminium plate. Hitherto this has been purchased from sources in Korea and Japan. As a result of contact made by Mr Tang's sister-in-law with Capral Aluminium Limited, the Applicant's group was informed that there was an exclusive agency held by Free Enterprise Limited (a company operated by Mr Raymond Tong) in Hong Kong. Their desire to obtain a supply of sheet aluminium could be realised only by placing the order through that agent.

15. After some negotiations it was finally arranged that a shipment of sheet aluminium should be exported by Capral Aluminium Limited to Hong Kong Electrical Automatic Works Limited. The order was given formally by Tiproll Pty Limited through the agent Free Enterprise Limited for the goods to be sent directly to the Applicant's associated company in Hong Kong. Tiproll Pty Limited paid approximately $13,000 to Capral Aluminium Limited. Presumably Tiproll Pty Limited was eventually paid by Hong Kong Electrical Automatic Works Limited. The evidence was that this was the only transaction of export and sale which has been carried out by Tiproll Pty Limited. The shipment was received in Hong Kong in May this year. The application for review to this Tribunal had been made on 11 February. The order was placed and the deposit paid well after the visa cancellation decisions had been made.

16. There were two other areas of activity sought to be shown for Tiproll Pty Limited. It was said that for approximately $1,000 it had purchased a sample shipment of lanolin in Sydney and had shipped it in bulk to China for repackaging and sale in that country. Although the purchase was said to have taken place in June this year, there was no evidence of the result of these endeavours. All the evidence relating to the affairs of this company has been characteristically vague.

17. The second matter related to a contact made by Mr Tang's sister-in-law with a company in Brisbane which manufactures aluminium roller shutters. Some correspondence was tendered. Two sample motors have been purchased at a cost of $800. Although there have been some discussions between Mr Tang's sister-in-law and Rollit Industries concerning the export of roller shutters to China, nothing has eventuated. The Applicant has had no contact with that firm.

18. Evidence was given by Kenneth Chan, who is a brother-in-law of the Applicant. His activities in 1996 led to the initial contact with Capral Aluminium Limited. When Mr Tang's sister-in-law migrated to Australia, she took over future enquiries. Mr Chan appears to have had nothing to do with Tiproll Pty Limited for the last four years.

19. Apart from these activities, nothing much more has been done by anyone for Tiproll Pty Limited. What activities have taken place have been carried out by the Applicant's sister-in-law. He himself has spent very little time in this country. He arrived on 18 October 1996 and left 12 days later. He did not return to Australia until 21 December 1997, leaving on 28 December 1997. A further year passed before he returned on 24 December 1998, returning to Hong Kong on 30 December 1998. The visits over Christmas 1997 and Christmas 1998 were to see relatives. He travelled with his wife and family. To choose to come to Australia two years in succession over Christmas indicates that the visits could not have been for the purpose of establishing export connections in the aluminium industry. Mr Tang did not visit Australia again until 9 February 2000, staying for five days and returning on 13 February. It was on this visit that he inspected the premises of Capral Aluminium Limited for the first time. He did not return to Australia until 5 November 2000, the day before the hearing in this Tribunal.

20. On these facts, it seems to me that Tiproll Pty Limited is not carrying on a business and its activities are therefore not an eligible business. The reference in subparagraph 134(1)(b) to the "day-to-day management of that business" indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, Mason J considered that the use of the phrase "carrying on the business", as a qualifier of the noun "business", required that there be a commercial enterprise in the nature of a going concern "that is activities engaged in for the purpose of profit on a continuous and repetitive basis". Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Limited. It has had one export transaction to a company associated with Mr Tang. The evidence relating to lanolin and roller shutters does not add to the perception of a business requiring day-to-day management. In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.

21. If I am wrong in my understanding of this term, it is certainly clear that Mr Tang has not used his skills in the day-to-day management of that business. Clearly the type of remote association which he has had with Tiproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business.

22. Notwithstanding the fact that the power of cancellation has therefore arisen, the Minister may not proceed further if he is satisfied that the visa holder has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of the business.

23. Mr Tang has made very little effort to this end. I do not consider that the use of the word "genuine" assists in characterising his efforts. The fact is that he is a busy and successful Hong Kong managing director of a group of companies with some 6,000 employees. His energies are primarily directed towards the maintenance and running of the businesses of this group. His evidence was that, even if the cancellation were set aside, he would not sell his Hong Kong interests. It is clear that the vast majority of his time will continue to be dedicated to those interests, whatever the result of this application.

24. Paragraph 4.5.1 of the Departmental Guidelines lists some of the factors which may assist decision-makers in determining whether a genuine effort has been made for the statutory purposes. These include written evidence of detailed consultations with at least three business advisers such as an accountant, lawyer, bank or financial institution, State or Territory Government, business development office and so on. More importantly, the guidelines ask the decision-maker to look for "a physical presence in Australia for more than six months since first arrival as a business skills class migrant" as an indication of whether the applicant has made a genuine effort for the purpose of subsections (2) and (3). Clearly Mr Tang would fail this test.

25. An examination of the items in the subparagraphs of subsection (3) indicates that none of the headings assist the Applicant in demonstrating that he has made the required genuine effort. The business activity has been minimal. There are no business proposals to which he can point. His investment is minimal. There is only the sketchiest evidence of any research undertaken to establish a business of any kind in Australia. Most importantly, however, the time during which the Applicant has been present in Australia (32 days in more than four years) indicates that there has not been a genuine effort to participate in day-to-day management of the business, nor is there likely to be any such participation in the future. There is no evidence that the Applicant "actively participates at a senior level" from overseas. He cannot reasonably be said to be using his skills in the day-to-day management of the business or to have made a genuine effort to do so.

26. The cancellation of the Applicant's visa should be affirmed. The other three members of the Applicant's family live in Hong Kong. There is no evidence of any extreme hardship which they might suffer if their secondary visas were cancelled as is required by subsection (5). There is no reason therefore why those visas should not also be cancelled in accordance with subsection (4). Accordingly the decisions under review are affirmed.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.J. McMahon (Deputy President)

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

Representative for the Respondent Mr Andrew Pearson