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[2002] AATA 703
appellant. The Tribunal set aside the decision dated 10 December 2001 and substituted a decision that Lau's Subclass 127 Business Skills visa and the subsidiary visas should not be cancelled.
The Tribunal cancelled the Minister's cancellation decision. It accepted that Lau's company was a real, small export business, that his 50 per cent shareholding was substantial, and that he used his business experience to manage the company at a senior level. The Tribunal did not require him to be in Australia or to keep daily records of every management activity. It also considered later evidence relevant to whether he intended to continue. Because the statutory grounds for cancellation were not established, the Tribunal did not need to decide whether the separate genuine-effort protection applied.
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The Administrative Appeals Tribunal considered Hui Sing Lau's review application concerning cancellation of his Subclass 127 Business Skills visa and the associated visas held by his wife and children. The cancellation decision was dated 10 December 2001. The Tribunal ultimately set it aside and substituted a decision that the visas should not be cancelled ([1], [7], [37]).
1 cited instrument linked from this judgment.
Lau was a Malaysian resident with more than 30 years' experience in food-products distribution. He applied for a Business Skills visa in December 1997 and received it on 24 August 1998. He had initially considered a joint venture to export an Australian advertising-pole product, Unipole, but decided not to proceed. He later focused on food exports, the field in which he had established experience, and incorporated Corcom Pty Ltd on 3 July 2000 ([4]-[6], [8]).
The Department's 24-month survey asked for information about Lau's Australian business. The Department sought evidence of substantial ownership in an eligible business and participation at a senior level in day-to-day management. It later issued show-cause letters, and the delegate cancelled the visas in December 2001 ([6]-[7]).
The evidence before the Tribunal described Corcom's export transactions with Malaysian buyers and Lau's work in researching products, contacting suppliers, negotiating orders and developing a market. The transactions included orders from Timberland, Rus Pty Ltd and Nikko Pty Ltd, with goods sold to Malaysian customers or to Chop Lian Hin, Lau's Malaysian business ([11]). The financial evidence showed sales revenue of $116,463 for the period 1 July 2001 to 31 January 2002, alongside an operating loss. Lau had invested about $80,000 in Corcom ([8], [13]).
A central factual question was how to assess a new, small export business when the owner operated partly from Malaysia. Lau explained that he stayed in Malaysia to develop the customer base and expected to focus more on the Australian end once market penetration had been secured. The Tribunal accepted his evidence about his commercial activities and experience ([29], [33]-[35]).
The decision concerned the statutory cancellation power as it was set out in s 134 of the Migration Act 1958. This is a description of the 2002 judgment and the statutory text reproduced in it, not a statement about the law as it may stand today.
The Tribunal began by identifying the distinct grounds in s 134(1). In summary, cancellation could be considered if a visa holder had not obtained a substantial ownership interest in an eligible business, was not actively participating at a senior level in its day-to-day management, or did not intend to continue the relevant ownership and management activities ([14], [26]). It treated these as separate matters to assess against the evidence.
On business eligibility, the Tribunal relied on the ordinary concept of carrying on a business, drawing on Hope v Bathurst City Council. It said that carrying on a business involves profit-seeking activity on a continuous and repetitive basis, but that a business can be carried on in a small way ([28]). It also referred to s 134(10), which listed outcomes such as developing international business links, creating or maintaining employment, exporting Australian goods or services, and increasing commercial activity and competitiveness.
Corcom had progressed beyond a proposal or isolated shipment. By the cancellation date, four transactions had been completed or were in the process of delivery, and the Tribunal considered the lead time required to establish suppliers, prices and export markets ([29]). It found that Corcom was being carried on for profit and had continuity and repetitiveness. Its exports met the statutory export outcome, and the Tribunal considered there would also be flow-on effects for employment and commercial activity ([30]). It therefore found Corcom to be an eligible business.
On ownership, the Tribunal rejected the submission that a loss-making business could not involve a substantial ownership interest. It read the statutory phrase as linking “substantial” to “ownership interest”, rather than to the profitability or value of the business. The applicant's 50 per cent shareholding was not a minor interest ([31]). The Tribunal also noted that Re Wong had treated a 25 per cent interest as substantial, but its own conclusion in Lau rested on his 50 per cent interest and the terms of s 134 ([31]).
For management participation, the Tribunal focused on Corcom's actual business: developing an export market for Australian groceries in South-East Asia. The work involved product research, obtaining orders and suppliers, transactions and planning ([32]-[33]). It interpreted “day-to-day” by reference to its ordinary meanings, including continuous, routine or ordinary activity. It did not require a specified number of days in Australia or evidence of management activity on every day ([32]).
The Tribunal accepted that Lau used his substantial commercial experience, contacts and business acumen in developing Corcom. It considered that the relevant senior level was the senior management of this particular company, not a comparison with management structures in larger businesses. As Lau carried out almost all of Corcom's management, the Tribunal concluded that it was not satisfied that he was failing to participate actively at a senior level ([33]-[34]).
The Tribunal also considered intention. It accepted evidence of increased activity after June 2001 and Lau's intention to focus increasingly on Australian operations after establishing the Asian market. It was therefore not satisfied that the intention ground in s 134(1)(c) was made out ([35]).
The judgment did not describe a general change in the law before and after Lau. Its task was to interpret and apply the statutory provisions then before it. The relevant legal framework in the reasons was s 134 of the Migration Act, which permitted cancellation on specified grounds but also contained a separate prohibition on cancellation where the decision-maker was satisfied about genuine efforts and intended continued efforts ([14], [26]).
The Tribunal's key interpretive contributions were contextual. First, eligibility was linked to the outcomes in s 134(10), not to business size. A small operation could qualify if its activities achieved one of the statutory objectives. Second, a substantial ownership interest was assessed by the nature of the shareholding, rather than by whether the company made a profit. Third, day-to-day management was assessed in the context of the particular business and did not demand a minimum number of days or daily written records ([28], [31]-[34]).
The treatment of later evidence was a point of distinction. The Tribunal said it could consider activity and transactions after the cancellation decision if they assisted in deciding whether that decision was correct or preferable. It relied on Re Chen and Re Griffiths in addressing the evidence available on review ([24]). It also referred to Re Tang's statement that the Tribunal considers evidence and circumstances up to the hearing ([25]).
The Tribunal distinguished Nong. It described Nong as concerning a student-visa cancellation provision framed around prescribed circumstances in which the Minister must cancel if a condition was not met. By contrast, the business-visa provisions before it authorised discretionary cancellation and required consideration of efforts and future intentions. The Tribunal considered that this difference made later events relevant to the questions under s 134 ([27]). The judgment therefore does not establish that later evidence is always relevant in every migration review. Its explanation depends on the statutory wording it was applying.
Finally, the Tribunal did not decide how s 134(2) and (3) applied to Lau. Once it found that the cancellation grounds in s 134(1) did not arise, it said there was no need to address the genuine-effort provisions ([36]). The decision should not be read as resolving those separate questions.
At [28], the Tribunal stated: “It is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives.” In plain English, the business did not have to be large. What mattered was whether its activities achieved or were expected to achieve one of the outcomes listed in s 134(10). In Corcom's case, the relevant outcome was exporting Australian goods.
At [30], the Tribunal found that Corcom was “being carried on for profit” and had “the necessary elements of continuity and repetitiveness.” This meant the activity was not treated as a one-off transaction. The Tribunal viewed the series of export dealings, considered with the business's development and lead times, as an ongoing commercial undertaking.
At [31], it rejected the argument that a business operating at a loss could not have a substantial ownership interest. In plain English, a company's financial performance and the size of a shareholder's stake are different questions. Lau's 50 per cent interest was substantial even though Corcom had reported losses.
At [32], the Tribunal said there was no requirement to establish a certain number of days of activity to show involvement in day-to-day management. This was not a blanket exemption from demonstrating active management. Rather, the nature and regularity of the actual work mattered, and that work depended on the business in question.
At [33], the Tribunal said that management activity did not have to be recorded every day. It accepted that senior-level input could be intangible and that Lau's business experience informed his work. In plain English, sparse diary records were relevant evidence, but were not by themselves decisive.
At [34], the Tribunal described Lau as Corcom's senior management because he undertook almost all of its management. The comparison was internal to Corcom, not against the management hierarchy of a larger company. The judgment therefore treated seniority as connected to the responsibilities and structure of the business actually being assessed.
At [36], the Tribunal explained why it did not decide the genuine-effort issue: it had found that the grounds for exercising the cancellation discretion did not arise. The outcome depended on the findings under s 134(1), not on a ruling that Lau had separately established the protection in s 134(2).
The reasoning is most directly relevant to a business-visa cancellation assessment under the same or materially similar statutory language, where the issues include whether the holder owns a substantial interest, operates an eligible business, participates in its management, or intends to continue doing so.
The business facts that mattered in Lau included repeated export transactions, a business purpose of profit, a developing supplier and customer network, lead times inherent in exports, and an identifiable statutory outcome: exporting Australian goods ([29]-[30]). The case is particularly relevant where a business is small or early-stage and its financial results are not yet strong. The Tribunal said size was not directly determinative and did not treat operating losses as negating a substantial shareholding ([28], [31]).
The management reasoning may be relevant where the visa holder's role involves planning, market research, negotiations and business development rather than a daily routine of recorded tasks. Lau's limited diary entries and time in Australia did not prevent a finding of active participation, because the Tribunal assessed his work in light of Corcom's export business and his experience ([32]-[34]). The decision does not say that physical presence, records or evidence of actual work are irrelevant. It says that no fixed number of days or daily recordkeeping rule was part of the interpretation adopted in this case.
The intention analysis may be relevant where events after cancellation shed light on whether the holder intended to continue ownership and management. The Tribunal's reasoning was expressly tied to the wording and structure of s 134, including its references to intention and discretionary cancellation ([27], [35]). Different statutory language may produce a different result.
This is an AAT decision based on its particular record. It does not determine how another business or visa-holder would be assessed on different facts.
The supplied judgment contains no later judicial treatment of Lau. It was decided on 15 August 2002, and the text provided does not identify any later court or tribunal applying, approving, distinguishing or revisiting its reasoning. No conclusions about subsequent treatment can therefore be drawn from this source alone.
The decision itself discussed earlier authorities. It applied the business concept in Hope v Bathurst City Council, referring to the connection between business activity, profit-seeking purpose, continuity and repetition ([28]). It referred to Re Wong in support of its conclusion that a 50 per cent interest was substantial, while noting that a 25 per cent interest had been considered substantial in that earlier AAT decision ([31]).
On review evidence, the Tribunal relied on Re Chen and Re Griffiths in explaining why it could consider evidence not before the original decision-maker or arising after that decision, where relevant to the review ([24]). It referred to Re Tang for the proposition that the Tribunal considers evidence and circumstances up to the hearing ([25]).
The Tribunal distinguished Nong, a Federal Court decision concerning a student-visa cancellation provision. Its explanation was that the statutory structure in Nong differed from the discretionary business-visa cancellation provision, which expressly made efforts and future intentions relevant ([27]). These are the authorities as characterised in Lau's reasons, not an account of their subsequent treatment.
The Tribunal did not decide the precise operation of the genuine-effort safeguard in s 134(2) or the factors listed in s 134(3). It expressly left those matters unresolved after finding that the s 134(1) cancellation grounds were not established ([36]). The judgment therefore does not establish what combination of evidence would be sufficient to demonstrate genuine effort in a different case.
The reasons also do not set a numerical threshold for a “substantial” ownership interest. The Tribunal found Lau's 50 per cent interest sufficient and referred to Re Wong's 25 per cent interest, but it did not provide a comprehensive test for other ownership proportions or business structures ([31]).
Nor did the Tribunal define a universal minimum level of activity for day-to-day management. Its analysis was contextual: it considered the nature of Corcom's export work, Lau's experience, the tasks he undertook and his position within the company ([32]-[34]). A different business model or a different division of responsibility could require a different factual assessment.
The treatment of later evidence is likewise confined to the statutory scheme discussed in the reasons. The Tribunal considered post-cancellation material relevant because the legislation addressed intention and conferred a discretion. The judgment does not resolve how later events should be handled under other cancellation provisions or where the statutory question is framed differently ([27]).
Finally, the decision's findings relied on evidence about particular transactions, research, contacts, investment and business plans. It does not determine how much documentary evidence is necessary in every case. The Tribunal accepted Lau's evidence and assessed the documents and diary entries alongside the commercial context, rather than imposing a fixed evidentiary checklist ([9], [11], [29], [33]).
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IMMIGRATION - Business Skills Visa - class AD subclass 127 - cancellation - whether substantial ownership in an eligible business - whether utilising skills in actively participating at a senior level in the day-to-day management of business- whether intention to continue to hold a substantial ownership and to utilise skills
Re Griffiths and Migration Agents Registration Authority [2001] AATA 240
Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997; (2000) 32 AAR 103
Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs
Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575; (2000) 106 FCR 257
Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1
Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54
Shorter Oxford English Dictionary on Historical Principles (Vol.1) Clarendon Press 1993
1. This is an application by Hui Sing Lau (the applicant) for review of decisions of the Minister for Immigration, Multicultural and Indigenous Affairs (the respondent) dated 10 December 2001 to cancel the applicant's Business Skills visa and the subsidiary visas of his wife and four children.
2. At the hearing, Mr A. Conyer, solicitor, represented the applicant and Ms F. McKenzie, solicitor, represented the respondent. The applicant gave evidence with the assistance of an interpreter in the Mandarin language.
3. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975. The Tribunal also had before it exhibits A1 to A34 (for the applicant) and R1 (for the respondent).
4. The applicant is a resident of Malaysia. He is aged fifty and married. He has four children. He applied for a Business Skills visa on 18 December 1997. It was granted on 24 August 1998, with subsidiary visas for his wife, Siew Ding Ling and four children, Lee Ing John Lau (John Lau), Swee Bin Shirley Lau, Swee Ching Catherine Lau, and Lee Hung Tom Lau. John Lau has studied as a medical student in Australia.
5. The applicant has run a business in food products distribution in Malaysia for over 30 years. He registered the business name of his Malaysian business, Chop Lian Hin in Australia on 6 May 1998 (T8) through the Office of Consumer and Business Affairs in Adelaide. On 3 July 2000 he set up an Australian company Corcom Pty Ltd ("Corcom").
6. Business Skills visa holders can expect to receive survey forms to report their activities at 24 months and 36 months after being issued with a visa. The Department of Immigration and Multicultural and Indigenous Affairs (the Department) sent a Survey of Business Skills Migrants - 24 Months (T9) to the applicant on 30 July 2000. The Department received the completed 24-month survey (dated 20 September 2000) on 3 October 2000. The Department requested more information from the applicant by letter dated 31 October 2000 (T13) addressed to the applicant's nominated agent in Darwin, Bill Foo. In particular, the applicant was asked to show a significant level of ownership in an eligible business in Australia and that he was participating at a senior level in the day to day management of this business. Correspondence passed between the applicant (through Bill Foo) and the Department during 2000 and 2001 (T14, T15). However, on 8 August 2001 the Department sent letters to the applicant and the subsidiary visa holders, asking them to show cause why the Business Skills visa and subsidiary visas should not be cancelled.
7. The Department made a decision on 10 December 2001 to cancel the visas. The applicant and the subsidiary visa holders sought review by the Tribunal on 7 January 2002 (T1). John Lau appealed in his own right. However, after the hearing, the Department notified the Tribunal that the decisions to cancel the visas of John Lau, Shirley Lau and Catherine Lau were of no effect, as each had been granted a resident return visa. John Lau withdrew his application with the Tribunal.
8. The applicant had prepared an undated, written statement (exhibit A1), which stated as follows:
2. On 24 August 1998, I was granted a 127 Business Skills visa and arrived in Australia the following day. I have 7 siblings 4 of whom have resided permanently in Australia for a period in excess of 10 years, as has my mother.
3. Even before I applied for the visa I had given serious consideration to exporting a product called Unipole from Australia. This was an advertising pole which was manufactured in South Australia. I had considered entering into a joint venture with certain Australian redsidents [sic] and I arranged to have prepared the business proposal and Heads of Agreement set out at p.69 of the T Documents. I had registered a Business Name, "CHOP LIAN HIN" in about 1995 which I renewed on 6 May 1998 with the intent then of using it for the venture.
4. Due to a fluctuation in the Australian Dollar, I decided not to proceed with the Unipole venture. I was also concerned that I had never previously traded in that type of product. All of my experience was in the wholesaling of foodstuffs which I had sourced from various parts of Asia. I had had 35 years of experience in trade of that nature.
5. After the [sic] discontinuing the Unipole proposal I gave thought to other business opportunities. I formed the view that I should concentrate my efforts on the type of enterprise with which I was most familiar, namely the distribution of foodstuffs. I decided that I would create a business in Australia similar to my Malaysian company, Chop Lin Hing and once the Australian business had been properly established it would take over the operations of Chop Lian Hing. In other words, I would be relocating my business from Malaysia to Australia. I therefore arranged for the incorporation of a company Corcom Pty. Ltd ("Corcom") on 3 July 2000.
6. I commenced making enquiries to locate suitable priced and quality goods which I could export to Malaysia from Australia. At the same time I made contact with potential purchasers of product in Malaysia to identify the most appropriate types of goods for purchase and export.
7. During the period 1998 to 1999 I remitted about $150,000 to Australia. I purchased a residential property in Melbourne in 1998. The purchase price was $170,000.
8. I returned to Australia on 5 occasions during 2000 and 2001 to make further product enquiries. I conducted my research by touring a number of supermarkets in Melbourne and noting the various product lines which might be suitable for export. This is the same method which I employ in Malaysia to carry out my market assessment. I also purchased samples of various other products in the nature of health supplements and vitamins, see T Documents p.161 and A Documents pp. 120-121 [exhibit A3]. I expended about $1300 for various samples. During these trips I also met with the company's accountants and bankers. I also viewed business premises in the Box Hill and Glen Waverley areas as possible sites to locate the company at a future time. During my visits I would carry out administrative tasks on behalf of the company.
9. I also requested that my son, John forward letters seeking information from various suppliers.
10. During this period John assisted me to some extent. He was a full-time medical student at Melbourne University and had very limited spare time to provide me with anything other than the most rudimentary administrative assistance. I made all decisions relating to the running of the business which was then only in its inception.
11. I took the decision that it was preferable for me to remain in Malaysia in order to maximise our customer base. I was attempting to introduce for the first time Australian product to my market and I believed that I ought to be on hand to assist in market penetration. For me the point of sale was the most critical aspect of the business. Once the business strengthened sufficiently I would be able to base myself in Australia.
12. During my visit in 2001, I made contact with a supplier of Australian of [sic] fruit juices, Timberland Corporation Pty Limited. On behalf of Corcom, I negotiated the purchase of a container of product for the sum of about $25,000. Corcom ordered these goods on 18 August 2001 which was [sic] then shipped on 12 September 2001 to a large supermarket in Malaysia which had placed the order with Corcom. See T Documents, pp 140-148, and ppl63-169.
13. The same supermarket, through its agent ordered another container of various foodstuffs from Corcom on 15 October 2001. See A documents pp. 69-85 [exhibits A3-A12]. The value of the export was about $47,000. I sourced these goods from a supplier RUS Pty Ltd which is a Melbourne based company. These goods were shipped on 3 January 2002.
14. On 5 November 2001 Corcom ordered a container of goods from Timberland to the value of 'about $19500 as, I through Chop Lian Hin, had received orders for such goods from a range of smaller retailers. Corcom arranged to ship these goods to my company Chop Lian Hin and thereafter the goods were distributed to those various retailers.
15. The next order was placed by Corcom on Timberland on 14 November 2001 for product to the value of about $24,000. Once again Chop Lian Hin had received orders from a range of retailers for these goods. This order was shipped to Chop Lian Hin which onsold the goods to those various retailers.
16. During February 2002 representatives of RUS Pty. Ltd visited Malaysia. As a result of this meeting I returned to Australia to arrange a further purchase order by Corcom for goods to be supplied by RUS totalling about $48000. These goods were shipped on 28 March 2002. The price was particularly good and I arranged for Corcom to purchase these goods even before I had a purchaser. I had no trouble onselling the goods.
17. I have sourced a further supplier of food products being Nikko Pty Ltd. which is based in Melbourne from whom Corcom purchased $35000 worth of goods on 8 March 2002 which were shipped on 26 March 2002.
18. Corcom has placed a further order of about $23000 on Timberland. This product has not yet been shipped.
19. On Friday 12 April 2002 I placed a further order in the sum of about $20000 for goods from Timberland. This product has also not yet been shipped.
20. In all cases shipping and insurance is arranged by the supplier.
22. I appointed a migration agent Mr. Bill Foo to correspond with the Department in matters arising our [sic] of the Survey. I always relied on Mr. Foo's expertise to ensure that information sought was promptly and accurately responded to. I had informed him of the orders placed following his submission of 28 September 2001. He said to me on a number of occasions: "Don't worry about sending the additional information because I don't see that we will have any problems.'' See A Documents p136.
23. I became concerned and despite Mr. Foo's advice, l felt that the further information should be brought to the attention of the Department. I therefore requested John to contact the Department directly to enquire about processing and what I ought to do in relation to the additional documentation. John told me that the Department had informed him to wait for the decision. I therefore believed that I would be given a further opportunity to provide further documents if required by the Department.
9. The applicant gave oral evidence expanding upon but essentially confirming his written statement. He also gave detailed evidence referring to a diary notebook in which he recorded activity on behalf of his business (exhibit A31). The diary was recorded in Mandarin and he gave evidence of the entries with the assistance of the interpreter. He said that the diary was his personal recording of things that he did on behalf of Corcom. The entries detailed addresses and telephone numbers of contacts made, as well as other information such as the amount of profit from the export of containers of grocery products. He said, under cross-examination, that the notes were an aide-memoire and while he said he recorded matters of importance, he later said that he recorded only the things that were successful. He agreed under cross-examination that entries were made against only 30 individual dates.
10. The applicant said that he had placed his confidence in his agent, Mr Foo in his dealings with the Department. Under cross-examination, he acknowledged that he had not seen the information in the 24-month survey recording that he worked 20 hours per week in the business, and had signed the document (T11) in advance of it being completed by Mr Foo.
11. The applicant confirmed in oral evidence the following summaries of eight transactions for export of general grocery lines undertaken by Corcom:
* supplier Timberland, purchaser Ta Kiong Emporium, Malaysia, order dated 19 August 2001, price $21,866.45 (T22)
* supplier Rus Pty Ltd, purchaser Yit Thai Co, purchase order dated 15 October 2001, price $47,509 (exhibits A4 to A12)
* supplier Timberland, purchaser Chop Lian Hin, purchase order dated 5 November 2001, price $19,571.14 (exhibits A13 to A19)
* supplier Timberland, purchaser Chop Lian Hin, purchase order dated 14 November 2001, price $23,774.60 (exhibits A20 to A26)
* supplier Rus P/L, purchaser Chop Lian Hin, purchase order dated 25 February 2002, price $44,463.85 (exhibit A27)
* supplier Nikko P/L, purchase order dated 8 March 2002, price $35,150.87, (exhibit A28)
* purchase order by Corcom P/L 2 April 2002 (exhibit A29)
* purchase order by Corcom P/L dated 12 April 2002 (exhibit A30)
12. John Lau gave oral evidence and stated, in a written statement (exhibit A2) :
2. I have resided in Australia for about 7 years and was a full-time medical student at Melbourne university from 1996 up to and including 2001.
3. My first involvement with my father's company, Corcom Pty. Ltd was in November 2000 when my father instructed me to write a letter to an Australian company which manufactured vitamins.
4. From time to time my father would phone me and request me to write letters or to fill out various purchase orders.
5. I was an authorised signatory on the Corcom account and my father once directed me to draw a cheque to Timberland Corporation.
6. I made no decisions in relation to the running of the business whatsoever nor did I initiate any business contacts for either the company or for my father.
7. During August 2001 I contact [sic] the Department to enquire about the cancellation process. I was informed by the person to whom I spoke that "you have an agent, you should leave this to him".
8. During September I again contacted the Department to ascertain whether our agent had responded to the Notice of Intention to Cancel.
9. During October, I again called the Department at my father's request and following the second order for goods. I said: "Do you need more information from us in relation to our case?" The officer replied: "Just wait for the decision". On one occasion I spoke to Tania Mcgee at the Department who had responded to a message which I had left. She said: "Just wait until December 11 2001. You will have our decision. Just be patient."
10. The officers with whom I had contact were Natalie Parker, Tanya Mcgee, Kate Fisher and a person whom I only recall as Lysia.
13. Also in evidence were the interim financial accounts for Corcom for the period ended 31 January 2002, showing an operating loss of $5953 for the period 1 July 2001 to 31 January 2002 and of $6499 in the previous financial year. The profit and loss account for the company showed sales revenue of $116,463 for the period 1 July 2001 to 31 January 2002 (exhibit A32)
14. The Migration Act 1958 Act (the Act) provides 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).
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;
15. Mr Conyer submitted that the applicant's evidence that there were good business reasons why the joint venture to export Unipole by the applicant's company Chop Lian Hin and the other joint venturer, Highbury Engineering, did not proceed. He submitted that the applicant's expertise was based on a 35-year history of working in the distribution of foodstuffs. He submitted, however, that the joint venture was evidence of business activity that might be taken into account in assessing the efforts made by the applicant.
16. However, the focus of Mr Conyer's submissions was on activities in relation to Corcom. He submitted that the applicant's actions in registering Corcom in July 2000, before the 24-month survey was issued, showed the genuineness of the applicant's efforts. Mr Conyer submitted that other factors pointing to genuine effort were that the applicant had been to Australia at least five times before applying for a visa. He submitted that the $80,000 invested by the applicant in Corcom contributed to export earnings for Australia and the applicant had invested in residential real estate in Australia.
17. Mr Conyer submitted that the first four of the eight transactions (para 11 above) demonstrated the developing business and the necessary continuity of its operations, thus satisfying that it was a real business. The first four transactions commenced prior to the cancellation of the visa. He submitted that, had the applicant been provided with the opportunity of the 36-month review, the applicant would have had a better opportunity to show the increased trading by Corcom, evidenced from June 2001.
18. Mr Conyer submitted that the Tribunal should accept the applicant's evidence that it made commercial sense for him to stay in Malaysia in the early days of the business to ensure market penetration. He submitted that the applicant had commercial expertise of long-standing, and he employed the methods that worked for him in his operations in Malaysia. He conducted research personally, visiting suppliers and supermarkets to check products and prices, corresponded with suppliers and purchasers, developed a network of contacts. Therefore, the tests in s134(1) were met.
19. Mr Conyer submitted that the requirement that the Minister must not cancel a visa if satisfied that the holder has made genuine effort (s134(2)(b) and (c)) means that any and all efforts should be considered. In the applicant's case this included the proposed joint venture to export Unipole even though it was abandoned.
20. Mr Conyer submitted that the Tribunal may take into account evidence up to the time of the hearing (Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 and Re Tang and Minister for Immigration and Multicultural Affairs [2000] AATA 997).
21. Ms McKenzie relied on the submissions in the Respondent's Statement of Facts and Contentions (exhibit R1) which set out the following:
19. The respondent submits that on the basis of the information made available by the applicant in response to both the 24-month survey and the further request for information after 15 January 2001 DIMIA was correct in determining that for the purposes of s134(1):
(a) the applicant had obtained a substantial ownership in a business by his purchase of Corcom Pty Ltd;
(b) Corcom Pty Ltd was not an ''eligible business" according to the definition in s134(10) because it was not resulting nor did the respondent believe it would result in any of the effects required by that subsection (T27 at 200-201);
(c) the applicant had not provided sufficient evidence to demonstrate active participation in the day-to-day management of Corcom Pty at a senior level.
20. DIMIA provided the applicant with a notice of 8 August 2001 which outlined the above findings, and requested that the applicant respond by 12 September 2001 in accordance with s135(1) of the Act. The applicant responded with submissions from his agent dated 7 September 2001 and 28 September 2001. On the basis of the information provided to DlMIA in these submissions, the delegate of the respondent was obliged to decide whether the applicant's visa should be cancelled.
21. The applicant claimed that the company in which he had a substantial ownership, Corcom Pty Ltd, is an eligible business based on two particular elements of the definition provided by s134(10):
(a) International links: the applicant claimed the establishment of international links through his initial attempts to export Australian ''UNIPOLE'' lamp-posts. However, no business developed from this venture which was abandoned by the applicant and the respondent contends that the delegate was correct in deciding that insufficient international links were created to establish an eligible business.
(b) Export: the applicant submitted evidence of a single shipment of Australian juices. The applicant also supplied various price lists of Australian goods and letters of inquiry directed to Australian companies regarding their interest in supplying goods for export (T22 and T23). Further, it was stated in submission that "Mr Lau is hopeful of further orders if his price remains competitive" (T22 at 133). The respondent contends there was clearly insufficient evidence to allow the delegate to reasonably believe that this demonstrated a business that was resulting or would result in the export of Australian goods or services.
22. The applicant makes a claim for the eligibility of Corcom Pty Ltd based on the creation or maintenance of employment in Australia. However, as Corcom has only one part-time staff member the respondent contends that this is clearly not sufficient to establish eligibility.
23. Furthermore, the Tribunal has previously found that the reference in subsection 134(1)(b) to the "day-to-day management of the business" indicates that an eligible business must have some element of continuity and repetition. Applying Mason J's formulation of "carrying on a business" from Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, Deputy President McMahon of this Tribunal found in Tang v Minister for Immigration and Multicultural Affairs [2000] AATA 997 (15 November 2000) that the construction of "participating in the day-to-day management of the business" for 134(1)(b) required a commercial enterprise in the nature of a going concern with activities engaged in for the purpose of profit on a continuous and repetitive basis. In that case, where a single export transaction had been performed by the company of an applicant who had spent only 32 days in Australia in more than four years, D.P. McMahon found there was a clear failure to fulfil the requirements of the section.
Actively participating at a senior level in the day-to-day management of the business
24. In order to demonstrate active participation in the day-to-day management of the business the applicant claimed involvement principally at the senior level, identifying marketing opportunities, establishing market links and negotiating final prices (T22 at 133), and provided telephone bills (T15 at 87-114).
25. Although neither the Act nor MSI 133 give clarification or definition of the terms used in s134(1)(b), it is clear from the wording of the subsection that the applicant is expected to demonstrate an active participation in the day-to-day running of the business in Australia. The applicant's evidence, particularly based on telephone calls and infrequent trips to Australia, is insufficient to demonstrate such participation.
26. The applicant did not present sufficient documentary evidence to DlMIA or the delegate of the respondent to demonstrate his active participation. The three documents on which his name appears are simply inquiries and do not indicate active participation (T22 at 146-9).
27. The respondent contends that the applicant did not demonstrate to DIMIA or the delegate of the respondent either a substantial ownership in an eligible business or utilisation of his skills in actively participating in the day-to-day running of an Australian business. According to ss134(1) there were clear grounds for the cancellation of the applicant's visa.
28. The respondent must not cancel a business visa under ss134(1) if the respondent is satisfied that its holder has made a genuine effort to obtain a substantial ownership in an eligible business or to utilise his skills in actively participating in the day-to day running of an Australian business.
29. Subsection 134(3) of the Act lists factors which may be taken into account in assessing genuine effort (T27 at 197-8), and MSI 133 gives a decision-maker guidance on what constitutes genuine effort (T28 at 209-210). Although the decision-maker must make a decision based on the ordinary meaning of the words "genuine effort", the MSI notes that failure to meet one or more of the indicators may normally lead to a visa being cancelled (T28 at 210).
30. The applicant failed to meet numerous indicators presented by s134(3), including:
(a) Business proposal_: the applicant did not present a business proposal. MSI-133 indicates the visa holder is to provide a genuine, realistic and achievable business proposal to establish genuine effort;_
(b) Partners or joint ventures_: the applicant did not supply formal contracts of partnership or joint venture. The applicant supply [sic] a preliminary ''Heads of Agreement" for an initial lamp-post venture but this business did not continue, lead to formal contracts of partnership or joint venture, or result in any exports or the likelihood of future exports;_
(c) Written evidence of detailed consultations with at least three business advisers_: the applicant did not present evidence of consultation with business advisers such as accountants, lawyers, business development office, or Austrade;_
(d) Period or periods present in Australia_: MSI 133 states that physical presence in Australia for more than six months since first arrival as a business skills migrant is a requirement following the 24-month survey. The applicant had been present in Australia for less than 60 days at this time (T24). (See also Tang v MIMA as discussed above); and_
(e) Business activity undertaken_: The MSI state the expectation as a minimum A$100,000 business activity as indicated by turnover. The applicant did not supply documentation establishing this level of business activity for any period during the term of the visa. The applicant has since claimed that Corcom Pty Ltd had an operating revenue of greater than A$100,000 for the period to the end of January 2002 (A2 at 52). However, this represents a time period which is clearly outside that contemplated by the three year period set down by the statutory scheme. This information was not presented to DIMIA or the delegate of the respondent, and it was not available at that time._
31. Regarding any evidence of events occurring after the time of the cancellation decision, it is submitted that this evidence cannot generally be taken into account. The question generally before the Tribunal is whether the decision is the correct or preferable one on the material before the Tribunal rather than before the primary decision-maker (Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409). However, in the case of business visa cancellations the Tribunal must answer the same question as that before the decision-maker with reference to the time of the original visa cancellation. The Tribunal has acknowledged, following the Federal Court in Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575; (2000) 106 FCR 257, that in reviewing cancellation decisions the Tribunal is limited to assessing events as at the date of the primary decision, even though the Tribunal may weigh evidence regarding those events which was not put to the primary decision-maker (see for example Re Griffiths and Migration Agents Registration Authority [2001] AATA 240, Birdseye v Companies Auditors & Liquidators Disciplinary Board [2001] AATA 783). The respondent submits that this approach should be applied here.
32. In the respondent's contention an assessment of the factors which are stated by s134(3) as establishing genuine effort to perform the obligations set out in s134(1) leads to the conclusion that the respondent should not be satisfied that the applicant was making a genuine effort as required by s134(2).
22. Ms McKenzie submitted that the decision to cancel was correctly made, relying on s134(1)(a) and s134(1)(b) of the Act. She submitted, even with the additional evidence produced at the hearing, that there was little to show for the Unipole venture. While the main additional evidence at hearing related to Corcom's activities, she submitted it was not sufficient to satisfy the guidelines. Although the delegate had accepted that the applicant had obtained a substantial interest in business, Ms McKenzie submitted that Corcom did not meet the definition of an eligible business in s134(10) of the Act, as it did not result in the creation or maintenance of employment in Australia (s134(10)(b)); nor result in the export of Australian goods and services (s134(10)(c)).
23. Ms McKenzie submitted that the applicant had established that he had a substantial ownership interest, and that, as the term substantial" is linked to the term eligible business in s134(1)(a), it must be given some meaning. She said that it must mean more than a mere ownership interest, and it should have some value. In the applicant's case this could not be shown at the relevant time (in her submission, at the time of the cancellation decision) it was running at a loss. However, her primary submission, relying on Re Tang was that the test in s134(1)(b) could not be met, as there had been little day-to-day activity, sketchy diary notes and a few visits to supermarkets. Ms McKenzie submitted that there was no evidence of business proposals or joint ventures in regard to Corcom (s134(3)(b)). She submitted there was insufficient evidence of active participation or of research (s134(3)(c)). She said that the steps for shipping were completed by the supplier, not by the applicant. Also, the periods in Australia were minimal (s134(3)(d)).
24. In reaching its decision, the Tribunal has taken into account the documentary and oral evidence and the submissions made at the hearing. First, the Tribunal considered the question of what material should be taken into account when considering the exercise of the discretion to cancel. The Tribunal is entitled to look at activities and transactions after the date of cancellation of the visa if it would assist the determination of whether or not the decision to cancel is the correct or preferable one (Re Chen and Ors and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 628). Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 states the position as follows:
41. Whether concerned with an entitlement decision or a cancellation decision, and in the absence of any legislative direction to the contrary, the evidence upon which the relevant facts rest, it that before the Tribunal. In so far as it is pertinent to the facts to be found, the evidence is not limited to that either known to the decision-maker or in existence at the time that the decision under review was made.
25. In Re Tang, the Tribunal stated (at para 9):
... 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 all the facts and circumstances that have occurred up until the date of the hearing.
26. Under s134(1) of the Act, the Tribunal has a discretion to cancel the applicant's visa if the applicant has not obtained a substantial ownership interest in an eligible business in Australia or does not intend to continue to hold a substantial ownership interest (ss134(1)(a) and (c)); but must not cancel if the person has made a genuine effort to obtain a substantial ownership interest of such kind (s134(2)(a)). The Tribunal also has a discretion to cancel the visa if the person has not been utilising his or her skills in actively participating at a senior level in the day to day management of the eligible business, or does not intend to continue to do so. However, the Tribunal must not cancel the visa if the person has made a genuine effort and intends to continue to make a genuine effort, to utilise his or her skills in actively participating at a senior level in management of that business (ss134(2)(b) and (c)).
27. Clearly, the legislation contemplates in s134 that consideration be given to a person's intention. This suggests that, while it is true that the exercise of the discretion at the time of cancellation of the visa is the focus, in order to properly address the matters raised in s134 it may be relevant to address matters that go to occurrences after the date of cancellation, to confirm or deny the correctness of views relevantly to be formed under those sections. These legislative provisions contrast with those addressed in Nong v Minister for Immigration and Multicultural Affairs [2000] FCA 1575; (2000) 106 FCR 257 where the Federal Court was addressing a power to cancel a student visa. The legislation set out prescribed circumstances under which the Minister must cancel if a condition that fell within the prescribed circumstances was not met. The legislative provisions for cancelling a business visa, however, require the decision-maker to address the matter of cancellation quite differently, setting out the circumstances in which the Minister may cancel, but must not if satisfied of efforts and future intentions.
28. Section 134(1) of the Act requires that a visa holder be engaged in an eligible business. As Ms McKenzie submitted, cases such as Hope v Bathurst City Council (1980) 144 CLR 1980 1, which deal with the meaning to be given to the term business, apply to the interpretation of this term in the Act. Hope's case is authority for the point that carrying on a business denotes activities for the purpose of profit undertaken on a continuous and repetitive basis. The case is also authority for the proposition that a business may be carried on though it is done in a small way_._ The Department's policy manual (T28) sets out that the question of whether a business is an eligible business relates to the achievement of stated objectives in the legislation set out at s134(10), through business activities. It does not directly relate to the size or scale of the business. The business may be small: it is sufficient for the business to demonstrate that its activities have achieved one of the stated objectives. (Migration Series Instruction 133: Visa Cancellation under subdivision G - Cancellation of Business Visas para 4.3.3).
29. At the time of the cancellation of the business visa on 10 December 2001, the delegate was aware of only one shipment of grocery items from Australia to Malaysia (T22). The evidence before the Tribunal shows that four transactions had either been completed or were in the process of delivery by that time (para 10 above). The Tribunal is satisfied that part of the delay in the business getting off the ground was that the applicant had explored, but then rejected, the joint venture to export Unipole. That activity is able to be taken into account, should the need arise, in ascertaining whether the person is making genuine efforts under 134(2) and (3). Both the legislation and the policy manual make plain that commercial realities are to be taken into account. Many genuine business attempts will fail despite the best efforts of participants. Furthermore, export activity such as Corcom was engaged in involve considerable lead-time in developing markets and in securing reliable suppliers and attractive prices. This is exemplified in this case in regard to the first shipment to Ta Kiong Emporium, where the negotiations between the parties for the September shipment of juices were on foot from at least June 2001 (correspondence between Corcom and Timberland and Corcom and Ta Kiong (T22)). The applicant gave evidence, which the Tribunal accepts, that the groundwork pre-dated this, with visits to Australian stores to research and compare products and prices.
30. The Tribunal is satisfied that Corcom was an eligible business within the meaning of s134(10) of the Act. It was being carried on for profit and had the necessary elements of continuity and repetitiveness. Though the profits on transaction undertaken by Corcom are relatively small (exhibit A32), this will often be the case with a business in its infancy. The Tribunal is also satisfied that the requirement of the definition that the business is resulting or will result in the export of Australian goods and services (s134(10)(c)) is met, and that there would be flow-on effects that would fall within the creation and maintenance of employment in Australia and for commercial activity and competitiveness (ss134(10)(b) and (f)).
31. The Tribunal is satisfied that the applicant has a substantial ownership interest as director and shareholder of Corcom. The Tribunal rejects the submission that the term substantial in s134(1)(a) cannot be met if a business is running at a loss. Ownership interest is defined in s134(10) as meaning the interest of shareholder in a company that carries on the business, a partner in a partnership, or a sole proprietor. The meaning of the section is plain and the grammatical link is between substantial and ownership interest. It will rule out ownership interests of a minor kind but clearly would not rule out the 50 per cent interest in a company held by the applicant. Had the joint venture for Unipole proceeded, the 45 per cent interest in the proposed company to be taken up by Chop Lian Hin (T15) would have met the substantial ownership interest test. In Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54, a 25 per cent interest in a company was a substantial ownership interest.
32. Section 134(1)(b) requires that the visa holder be utilising his or her skills actively, participating at a senior level in day-to-day management of that business. In using the term that business the legislation directs the decision-maker to consider the nature of the actual business undertaken. The term day-to-day should be given its ordinary meaning. It is defined in the Shorter Oxford English Dictionary on Historical Principles as continuous(ly), routine(ly). The Macquarie Dictionary defines it as ordinary, happening every day. Consistent with these meanings, it is not a requirement that a visa holder establish a certain number of days that he or she undertakes the activity of business in order to show that he or she is involved in its day-to-day management. The meaning is consistent with the need to show that a business is in existence, namely continuity and regular activity.
33. The day-to-day management of a company like Corcom, involved in developing an export market for Australian grocery goods in South East Asia, will involve researching products, securing orders and suppliers, transacting shipping. It will also involve ideas and planning. This is clearly evidenced by the applicant's activities in this case. The applicant had substantial commercial experience in Malaysia on which to develop Corcom as an export vehicle for sale of Australian goods into Asia. He developed Australian contacts through the proposed venture with Unipole and (T22, exhibit A31). While some of the activities undertaken by the applicant might be viewed as unsophisticated, there is nothing to suggest that they were inappropriate for the nature of the proposed business. The activities relied on the applicant's considerable experience directly in this field in the Asian market and on his business acumen. There may not be extensive notes, or records of activity occurring every day. As Ms McKenzie submitted, the diary notes showed only entries 30 days. However, the use of the term day-to-day management does not require that that activity be recorded every day, and the input at a senior level by someone of the experience of the applicant will often be intangible.
34. The Tribunal is satisfied that the applicant has substantial commercial experience in the field and has applied his knowledge, contacts and business acumen consistently and continuously in the development of Corcom's business. The Act requires that the focus be on participating at a senior level in the day-to-day management of that business. This does not require that comparison be made with senior levels of management in another business or in business generally. It is clear that the management of the Corcom is almost entirely undertaken by the applicant on behalf of the company: he is its senior management. The Tribunal is, therefore, not satisfied of the matters set out at s134(1)(b); that is, that he is not utilising his skills in actively participating at a senior level in the day-to-day management of Corcom.
35. The Tribunal is satisfied, on the basis of the evidence of the increased activity of the company after June 2001 and the applicant's evidence, of his intentions to increasingly focus on the Australian end of the operations once market penetration has been secured in South East Asia, that the applicant intends to continue holding a substantial ownership interest and to use his skills in actively participating in day-to-day management. Therefore, the Tribunal is not satisfied of the matters addressed under s134(1)(c).
36. For these reasons, the Tribunal decides the grounds to exercise the discretion do not arise, as none of the pre-conditions for its exercise is met. As this is so, there is no need to address the matter under s134(2) and s134(3). This means that the decision to cancel the Business Skills visa should be set aside, and it follows also that the decisions to cancel the subsidiary visas should also be set aside.
37. The Tribunal sets aside the decision under review dated 10 December 2001, and substitutes the decision that the applicant's Subclass 127 Business Skills visa and the subsidiary visas should not be cancelled.
I certify that the thirty-seven [37] preceding paragraphs are a true copy of the reasons for the decision herein of
Solicitor for applicant Mr A. Conyer, Messrs Diamond Peisah
Solicitor for respondent: Ms F. McKenzie, Messrs Blake Dawson Waldron
Nong
Minister for Immigration and Multicultural Affairs
(2000) 106 FCR 257
(1980) 144 CLR 1
(1980) 144 CLR 1980
(1979) 46 FLR 409
The Tribunal set aside the decision dated 10 December 2001 and substituted a decision that Lau's Subclass 127 Business Skills visa and the subsidiary visas should not be cancelled.