Migration - Business visa - whether business an "eligible business" - whether genuine attempts to obtain an interest in an "eligible business" - whether applicant participating in "day to day management of business" - exercise of discretion - decision under review affirmed.

Migration Act 1958 - s.134(1),(2),(3),(10)

10 September 2001 S P Estcourt QC., (Deputy President)

1. This is an application to review a decision of the respondent made on 25 September 2000 to cancel the applicant's business skills visa (subclass 127) on the ground that the applicant did not meet the requirements of s.134 of the Migration Act 1958 ("the Act").

2. Relevantly s.134 of 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 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 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;

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

(a) a visa included in a class of visas, being a class that:

(i) has the words "business skills" in its title; and

(ii) is prescribed for the purposes of this paragraph; or

(i) to which a prescribed provision of the Migration and Reform (Transitional Provisions) Regulations applies; and

(ii) that is of a kind prescribed for the purposes of this paragraph; or

(c) a return visa that is granted to a person who is or was the holder of a business permit or business visa;

that is or was granted on or after 17 February 1992.

"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 in 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

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

(a) has discretion to cancel the applicant's visa if he has not obtained a substantial ownership interest in an eligible business in Australia, or is not actively participating in the day to day management of the business; and

(b) must not cancel the visa if the applicant has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and intends to continue to make such genuine efforts.

4. On or about 31 August 2000 the applicant acquired a 50% share in a business known as Jo Be Hair Professionals and Skincare and as a partner in the partnership that carries on that business, he has clearly acquired an "ownership interest "within the meaning of s.134 of the Act, which can be said to be substantial.

5. The first question which arises for decision in this case is whether the business is an "eligible business " within the meaning of s.134.

6. That question can be approached by a process of elimination as there is no suggestion in this case that the business "is resulting or will result in one or more of the following" matters listed under the definition of "eligible business" in s.134 of the Act, namely:

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

(c) the production of goods or the provision of services that would otherwise be imported into Australia;

(d) the introduction of new or improved technology to Australia; or

(e) an increase in commercial activity and competitiveness within sectors of the Australian economy.

7. Having regard to the definition of "eligible business" in s.134, only one of the criteria remains under which the applicant's business would qualify. That criterion is, "the creation or maintenance of employment in Australia".

8. The applicant's business now employs four staff. The applicant did not know how many staff were employed when he purchased his interest in the business and there is no evidence before the Tribunal that, had he not purchased a half share in the business, some jobs would have been lost.

9. Even if the Tribunal were satisfied that the applicant's acquisition of his interest in the business "is resulting or will result in the creation or maintenance of employment", thus qualifying the business as an "eligible business" the applicant is still required to demonstrate, in order to avoid the prospect of visa cancellation, that he utilises his skills "in actively participating at a senior level in the day-to-day management of the business".

10. He clearly does not. He didn't claim to. His evidence was that his wife kept him informed of how the business was going but that he spent 4 to 5 hours a day working in his businesses in Indonesia.

11. The applicant didn't know the names of any of his employees, he didn't know their qualifications, he doesn't have any contact with his staff, he doesn't have any involvement in the day-to-day paperwork of the business, he has no involvement in inventory, he doesn't know who his suppliers are and he is not involved in marketing.

12. It is plain that for all practical purposes the applicant is a non-working partner who leaves any involvement he might have in the running of the business to his wife.

13. The applicant was completely honest with the Tribunal. His real business interests are in Indonesia and he has not been able to move them onshore because of the political and consequent economic changes which he says occurred in his country at about the time he obtained his business visa.

14. The applicant's purchase of a half share in the business is, as he put it, a "side business". He is using it to learn how business works in Australia and he still hopes to bring his assets and business involvement to Australia when the economic climate in Indonesia is such that he can sell his interests there.

15. The difficulty for the applicant of course is that through no fault of his own he has not been able to comply with the obligations imposed upon him by the visa he holds. He has since the notice of cancellation of his visa applied for permanent residency in Australia and he may well succeed in that regard.

16. There is one further matter that the Tribunal needs to consider and that is that the applicant's visa must not be cancelled if he has made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia and intends to continue to make such genuine efforts. (s. 134 (2) of the Act).

17. The applicant gave evidence that about one-half to two years ago he was personally involved in one of a series of discussions which continued for about a month, in relation to the possible purchase of a motor hotel. He also gave evidence that after those discussions ended he had discussions with a tyre company in relation to the possible purchase of a 25 percent shareholding in that company.

18. Neither of these discussions are, in the Tribunal's view, sufficient to satisfy the spirit of s.134 (2) of the Act.

19. The real impediment to the applicant obtaining an interest in an eligible business and involving himself in the day-to-day management of it, is that the political and/or economic climate in Indonesia has required him to remain in that country and to work in his business interests there. [Since the visa was granted to the applicant on 21 January 1998 he has, (at least prior to the hearing of this application), had only five visits to Australia lasting a total of 60 days, the last visit ending on August 15 1999].

20. It follows that the Tribunal is not satisfied that the applicant has acquired an interest in an "eligible business in Australia", is not satisfied that he has utilised his skills in actively participating at a senior level in the day-to-day management of an eligible business and is not satisfied that he has either, made genuine attempts to do those things or is presently able to genuinely hold an intention to continue to do so.

21. These facts do not of course result in automatic cancellation of a business visa. Section 134 involves the exercise of a discretion and the Tribunal has given careful consideration to the representations made by and on behalf of the applicant. In particular, the Tribunal has given weight to the fact that it accepts that the applicant has a genuine desire to invest in Australia and has been prevented to date from doing so by circumstances beyond his control. That consideration is not however, in the Tribunal's view, a countervailing factor of sufficient weight to tip the exercise of the discretion in favour of the applicant.

22. The Tribunal is conscious that s.134 (5) of the Act prohibits the cancellation of a person's visa if such cancellation would result in extreme hardship to a member of that person's family unit who holds a visa by virtue of the other person's business visa.

23. There are however no such assertions before the Tribunal (although of course any member of the applicant's family unit affected by the cancellation of his visa has a separate right to have the respondent's decision reviewed by the Tribunal).

24. The Tribunal notes however that on the material in evidence before it on this application there is no indication of a likelihood of extreme hardship to any member of the applicant's family unit if the applicant's business visa were cancelled.

25. The decision of the Tribunal is that the decision under review is affirmed.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of: Mr S P Estcourt Q.C., (Deputy President). Signed: K.L. Miller (Personal Assistant)

Solicitor for the Applicant Thao Meng and Associates

Solicitor for the Respondent Aust. Government Solicitor