Lala and Minister for Immigration, Multicultural and Indigenous A ffairs [2003] AATA 209 (5 March 2003)

Last Updated: 5 March 2003

DECISION AND REASONS FOR DECISION [2003] AATA 209

ADMINISTRATIVE APPEALS TRIBUNAL

GENERAL ADMINISTRATIVE DIVISION ) N2001/1864

) N2001/1865

Re

PADAM RAJ LALA GAITRI DEVI LALA

Applicants

And

MINISTER FOR IMMIGRATION, MULTICULTURAL AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

Ms G Ettinger - Senior Member

Date 5 March 2003

Place Sydney

Decision

The Tribunal sets aside the decision under review relating to Mr Padam Raj Lala and Mrs Gaitri Devi Lala, the Applicants, being the decision of the Minister for Immigration and Multicultural Affairs, dated 13 November 2001 to cancel Mr Lala's Subclass 127 Business Skills visa and Mrs Lala's secondary visa pursuant to section 134(1) of the Migration Act 1958 (the Act), and in substitution therefor decides that Mr Lala's Subclass 127 Business Skills visa and Mrs Lala's secondary visa should not be cancelled. The matter is remitted to the Respondent for the appropriate action to be taken.

..............................................

Ms G Ettinger

Senior Member

CATCHWORDS

IMMIGRATION - Business Skills Visa - cancellation - whether Applicant had made a genuine effort to obtain a "substantial ownership interest" in an "eligible business" in Australia - decision set aside

LEGISLATION

Migration Act 1958 ss 134(1), 134(2), 134(3-(6), 134(10)

CASE LAW

Freeman v The Secretary, Department of Social Security (1988) 19 FCR 342

Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257

Re Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237

Re Griffiths and Migration Agents Registration Authority [2001] AATA 240

Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54

Re Lau and Minister for Immigration and Multicultural Affairs (2000) 35 AAR 395

Re Harlim and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 767

Hope v Bathurst City Council (1980) 144 CLR 1

REASONS FOR DECISION

5 March 2003

Ms G Ettinger - Senior Member

1. The matters before the Administrative Appeals Tribunal ("the Tribunal") were applications by Mr Padam Raj Lala and his wife Mrs Gaitri Devi Lala, ("the Applicants"), dated 8 December 2001, for a review of decisions of a delegate of the Minister for Immigration and Multicultural Affairs (as it then was named), ("the Respondent"), made on 13 November 2001 to cancel Mr Lala's Subclass 127 Business Skills visa, and Mrs Lala's secondary visa, pursuant to section 134(1) of the Migration Act 1958 ("the Act").

2. At the hearing, the Applicant was represented by Mr B Johnston of Addison's Solicitors, and the Respondent was represented by Mr M Allatt of the Australian Government Solicitor. An interpreter in the Hindi language, Mr Sayar Dehsabzr assisted.

ISSUE BEFORE THE TRIBUNAL

3. The issue to be decided was whether, given the Applicants' circumstances pursuant to the Act on 13 November 2001, the Tribunal would affirm, vary or set aside the decision of the Respondent to cancel Mr Lala's Business Skills visa and Mrs Lala's secondary visa.

4. In deciding this issue, I had to consider whether I was satisfied that Mr Lala:

* had, at the relevant time, not obtained a "substantial ownership interest" in an "eligible business" in Australia; or

* was not utilising his skills in actively participating at a senior level in the day-to-day management of that business; or

* did not intend to continue to hold a "substantial ownership interest" in, and utilise his skills in actively participating at a senior level in the day-to-day management of an "eligible business" in Australia.

5. In doing so, I noted that the Minister, and the Tribunal standing in his shoes, must not cancel Mr Lala's Business Skills visa under section 134(1) of the Migration Act 1958 if it is satisfied that he:

* has made a genuine effort to obtain a "substantial ownership interest" in an "eligible business" in Australia; and

* has made a genuine effort to utilise his skills in actively participating at a senior level in the day-to-day management of that business; and

* intends to continue to make such genuine efforts.

6. If I found against Mr Lala, then in relation to Mrs Lala, I had to be consider whether, pursuant to section 134(5) of the Act, the cancellation of her visa would result in extreme hardship to her.

APPLICABLE LEGISLATION

7. Section 134 of the Migration Act 1958 empowers the Minister to cancel a business visa in certain circumstances. The relevant provisions in the case of Mr and Mrs Lala are as follows:

"134 Cancellation of business visas

(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

(c) does not intend to continue to:

(i) hold a substantial ownership interest in; and

(ii) utilise his or her skills in actively participating at a senior level in the day-to-day management of;

an eligible business in Australia.

(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and

(c) intends to continue to make such genuine efforts.

(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:

(a) business proposals that the person has developed;

(b) the existence of partners or joint venturers for the business proposals;

(c) research that the person has undertaken into the conduct of an eligible business in Australia;

(d) the period or periods during which the person has been present in Australia;

(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

(g) business activity that is, or has been, undertaken by the person;

(h) whether the person has failed to comply with a notice under section 137;

(i) if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:

(i) the length of time that the person held the ownership interest or participated in the management (as the case requires); and

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

(3A) ...

(4) Subject to subsection (5) and to section 135, if:

(a) the Minister cancels a person's business visa under subsection (1) or (3A); and

(b) a business visa is held by another person who is or was a member of the family unit of the holder of the cancelled visa; and

(c) the other person would not have held that business visa if he or she had never been a member of the family unit of the holder of the cancelled visa;

the Minister must cancel the other person's business permit or business visa by giving written notice to that person.

(5) The Minister must not cancel the other person's business visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

(6)The Minister is taken not to have cancelled a person's business visa under subsection (4) if the Administrative Appeals Tribunal has set aside the decision of the Minister to cancel the business visa of the relevant person to whom paragraph (4)(a) applied."

8. I also had to consider the implications of section 134(10) which follows as relevant:

"section 134 (10) In this section:

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;

(c) the export of Australian goods or services;

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

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

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

ownership interest, in relation to a business, means an interest in the business as:

(a) a shareholder in a company that carries on the business; or

(b) a partner in a partnership that carries on the business; or

(c) the sole proprietor of the business;

..."

EVIDENCE BEFORE THE TRIBUNAL

9. The evidence before the Tribunal comprised the documents produced pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the T- Documents"), together with the other documents tendered by the parties.

ITEM	DATE	NAME
Statement by the Applicant	5 March 2002	Exhibit A1
Supplementary Statement by the Applicant	23 May 2002	Exhibit A2
Statement by Mrs Gaitri Devi Lala	23 May 2002	Exhibit A3
Company Extract for Club Shirt Pty Ltd prepared by the Australian Securities & Investments Commission	18 October 2002	Exhibit A4
Documentation relating to Cian Pty Ltd including profile, certificate of registration of a company, share certificates, and company extract prepared by the Australian Securities & Investments Commission	16 October 2001	Exhibit A5
Letter from Quality Print Limited	6 April 2001	Exhibit A6
Letter from J. Santa Ram (Stores) Limited	2 October 2002	Exhibit A7
Letter from G.M.R. Muhammad & Sons (Pty) Ltd	2 October 2002	Exhibit A8
Letter from Sun Insurance	2 October 2002	Exhibit A9
Letter from Ashok Balgovind & Associates	26 August 2002	Exhibit A10
Letter from Algorry Zappia & Associates Pty Ltd	11 October 2002	Exhibit A11
Statement from L.J. Hooker, Kellyville referring to rent received for 118 Brampton Drive, Kellyville	August 2002	Exhibit A12
Letter from Domaine Homes	10 October 2002	Exhibit A13
T-Documents	16 September 2002	Exhibit R1
Supplementary T-Documents	19 July 2002	Exhibit R2

10. Oral evidence was given by the Applicants Mr Padam Raj Lala and Mrs Gaitri Devi Lala, the latter assisted by an interpreter in the Hindi language, Mr Sayar Dehsabzr.

EVIDENCE OF MR PADAM RAJ LALA

11. Mr Lala whose date of birth is 15 December 1942, and whose statements dated 5 March 2002, and 23 May 2002 were before the Tribunal as Exhibits A1 and A2, gave oral evidence. Mr Lala told the Tribunal that he arrived in Australia in August 1998, and that after finding accommodation, he established contacts, sourced fabrics, and imported fully made garments from Fiji. His Subclass 127 Business Skills visa was granted on 21 July 1998.

12. He told me that at the time of making his application for the visa, he was carrying on his family business, established in 1904, in Fiji. He described the core business as clothing, but indicated that they had always been active in investments and developing real estate. Mr Lala said that in 1979, his company commenced manufacturing garments, in particular menswear.

13. When asked by his counsel whether he could confirm that at the time of the application for a Business Skills visa, only garment manufacture was mentioned, Mr Lala agreed, stating that at that time, he was already manufacturing and distributing garments from Fiji to Australia. Mr Lala mentioned Club Shirts Pty Ltd, a family company, which initially imported three to six thousand units per annum to David Jones, and said that although he had hoped to expand into mens' shirts, this had not occurred. Accordingly as described below, he had moved into uniforms.

14. Mr Lala added that he always had in mind to expand into other areas such as real estate, and to also export goods to Fiji from Australia. He said that his main objective in wanting to set up a distribution house in Australia with his wife was that he was then 55 years old, and his sons were by then adults and could also run the business.

15. Mr Lala told the Tribunal that at the time of his application, one son had conducted market research into the local market, and retailers in Australia were already sourcing goods from them in Fiji. He referred to the company Club Shirt Pty Ltd and the company search at Exhibit A4, and mentioned that David Jones had been satisfied with the order for school shirts, and increased their range. Mr Lala explained that Club Shirts Pty Ltd was owned by his sons and his brother, but that he supplied the finance and expertise. Mr Lala's explanation for not being a shareholder of the company was his understanding that because of customs restrictions, it would have been difficult for them to export to their own company. He explained it was therefore more expedient for his sons and brother to be the shareholders. He explained that as it was his sons who held the shares, it was as if he were holding them. He said that it was difficult to sell Lotus brand shirts in Australia, so in 2000/2001, there was a move to produce corporate uniforms, through National Uniforms Pty Ltd which was part of Club Shirts Pty Ltd.

16. In support of the argument to retain his Business Skills visa, Mr Lala indicated he knew he had to have, and stated that he indeed did have, significant ownership of the companies mentioned above, and indicated that he was involved in their day to day supervision. In that connection, Mr Lala indicated that although his son (appointed a director of the company on 26 August 1993), and his nephew, (appointed a director 14 March 1995), held one share each in National Uniforms Pty Ltd, he himself was involved in marketing, development and sourcing of the products from Fiji, and travelled back and forth in that connection.

17. I was mindful that notwithstanding Mr Lala's evidence as to his participation, there was no written documentation available, and no income from National Uniforms Pty Ltd was shown. Mr Lala agreed as to the non-existence of documentation, but confirmed his participation, and directed my attention to Exhibit R2/30, and the statement regarding his involvement in Lotus Garments, (formed on 19 September 1979). He also directed me to the statement by KPMG on the same page which read as follows: "Additionally, over the past few years, Lotus has expanded into property development and is currently developing a commercial centre complex at Ratu Mara Road, Nabua, Suva." Mr Lala said that between 1969 and 1989, he was involved in designing and building 40 residential blocks for investment purposes.

18. Mr Lala was not concerned about the formalities of holding shares or being a director, saying that it was a family company, and as his son and nephew were the shareholders and directors, he could take over any time.

19. Mr Lala told the Tribunal that he was involved in Club Shirts Pty Ltd as a key person who was operating the business. He said that he intended to take equity in Cian Pty Ltd but said that in most of the family business in Fiji, he was in partnership with his brother. I noted from Exhibit A5, that Cian Pty Ltd had been incorporated on 19 December 2000, and that Mr and Mrs Lala had become shareholders on 18 September 2002 which was well after the relevant date of 13 November 2001.

20. Mr Lala said with regard to the incorporation of Cian Pty Ltd, that it was in relation to his longer term intentions to utilise his garment manufacture and sales skills in Australia. Mr Lala indicated that at November 2001, he intended to broaden his base with regard to garment export from Australia, and referred to T2/36, where KPMG, in its written submission dated 20 December 1996, in support of Mr Lala's application, had written :

"Mr Lala has been exporting garments to Australia since the 1970's. At the present, Lotus Garments has about 100 customers in Australia with annual sales of approximately AUD500,000. Concurrently, Mr Lala through Lotus Garments and Lala's Store has been importing from Australia, socks, ties (corporate uniforms), sweaters and woollen fabrics. The businesses currently buy between AUD15,000 to AUD40,000 worth of products a week from Australia."

21. Mr Lala also told the Tribunal that his factory was destroyed by fire on 19 May 2000, and that certain stock was damaged, but that they had subsequently reinstated the operation. This had necessitated his presence and his involvement in Fiji, Mr Lala said, thus delaying his business development in Australia. In his written statement he also commented on the then volatile political situation in Fiji.

22. Mr Lala explained to the Tribunal that as a business person, he looked to many fronts, from garments to real estate, and other opportunities in Australia. He said that he had a mailing house in Fiji with machinery sourced in Australia, and indicated that he was, at 6 April 2001, appointed to be agent for Quality Print Ltd (Fiji) (Exhibit A6).

23. Mr Lala pointed to other documents in support of his case, such as a letter of J. Santa Ram (Stores) Limited, dated 2 October 2002 at Exhibit A7, in which the writer indicated commitment to do business with Mr Lala, and a letter of G.M.R. Muhammad & Sons (Pty) Ltd dated 2 October 2002 (Exhibit A8), indicating that Mr Lala had sourced hardware and building materials for it for the past two years. I noted that Exhibit A9 was a further letter also dated 2 October 2002 from Sun Insurance Company Limited with regard to motor vehicle spare parts to be sourced in Australia on its behalf by Mr Lala.

24. Mr Lala then referred to Sudole Pty Ltd, incorporated in 1995 and referred to in his statement and annexures at Exhibit A1 with regard to others of his properties. He said he had been dealing with Algorry Zappia & Associates Pty Ltd (Consulting Civil and Structural Engineers Architectural Designers) with regard to his St Peters property. I noted that a statement of the above named engineers at Exhibit A11 dated 11 October 2002, referred to Mr Lala as the Project Manager of Sudole Pty Ltd, for whom they had "finalised the architectural drawing and engineering plans & specifications for industrial development at 9 Burrows Rd South in St Peters" in 1999. The statement added that: "The construction was completed in year 2000 under the supervision of Mr Padam Lala. During the construction period we had regular site inspections and meetings." The statement also referred to commencing a project at 9 - 11 Green St, Botany in 2000. In connection with Mr Lala's claims regarding real estate development, he referred the Tribunal to Exhibit A10, which was dated 26 August 2002 and listed his involvement as Project Manager for various developments in Fiji. Mr Lala told the Tribunal that his share of Sudole Pty Ltd was 24 percent. Mr Lala replied to Mr Allatt in cross-examination that notwithstanding the shareholding (by his son and nephew), he was running the company, involving himself in the design of buildings and the quantity surveying. Mr Lala also told the Tribunal in reply to cross-examination, that he instructed the young men as to what actions to take, and wanted the young people to learn how to manage under his supervision. He said in addition to himself and his brother, his son and nephew had been authorised to sign cheques. In reply to questioning regarding the lack of documents in that regard, Mr Lala said that he had given his lawyers all the correspondence and photographs, whereas earlier during examination in chief, Mr Lala had agreed that there was a paucity of documentation to support his claims. He also told the Tribunal that he did not keep file notes or a diary. Mr Lala told the Tribunal that he had reconstructed a type of diary note related to the 1999 construction project which was Annexure C to Exhibit A2.

25. When asked in cross-examination about not returning the 24 months survey which he had undertaken to complete, (Exhibit R1, T7, T8 & T9), Mr Lala said that he had been in and out of Australia at the time, and had not received his mail. Mr Lala said that between 1998 and November 2001, he was travelling extensively as he was trying to dismantle the business in Fiji, and referred also to the disrupting events of the fire which affected his business in May 2000. He explained in re-examination that more recently, he had rearranged his business and was no longer required to be in Fiji as frequently.

26. Mr Allatt questioned Mr Lala about the 24 months survey at T9/42 dated 14 November 2000, directing his question in particular to T9/44 where Sudole Pty Ltd was first mentioned. Mr Lala explained in reply that his real estate business was conducted through that company, and that as the shirt business had not been doing well, he moved to uniforms, and then to real estate development.

27. Mr Lala also explained that Fadasu Pty Ltd, a company of which he is also not a director, was a holding company for shares held in equal shares on behalf of himself and his brother.

28. In summary then, Mr Lala's view of his business ventures in Australia was that he was engaged in export, the garment trade and real estate, through the following entities.

* Sudole Pty Ltd - (incorporated 21 June 1996) - set up to develop industrial complexes - this was relied upon to be the "eligible business" for the Business Skills visa.

* P & G Lala Partnership - (no formal documentation) owns the Kellyville property which is leased out; further owns the Applicants' residence which incorporates the office of Sudole Pty Ltd.

* Cian Pty Ltd - (incorporated 19 December 2000) - shares transferred to Mr Lala in September 2002 - set up to purchase goods for resale in Fiji - (Exhibit A6, printing and packaging and Exhibit A9, vehicle spare parts).

EVIDENCE OF MRS GAITRI DEVI LALA

29. Mrs Lala, whose date of birth is 6 December 1944, and whose statement dated 23 May 2002 was Exhibit A3, gave oral evidence before the Tribunal.

30. Mrs Lala told the Tribunal that she looks after her grandson because his parents, her son and his wife travel as part of their business. She said that when she was in Fiji during riots in 2001, and away from him, the child was sick. She said that if her visa were cancelled as a consequence of her husband's visa being cancelled, she would find it very hard to manage because of the situation with her grandson.

31. Mrs Lala explained that all her three sons were married, two in Fiji, but that her only grandchild was in Australia. She agreed in cross-examination that her daughter-in-law could manage without her, but emphasised the difficulty which would ensue.

SUBMISSIONS AND CONCLUSIONS

32. In coming to the correct and preferable decision regarding whether the decision to cancel Mr Lala's Business Skills visa and Mrs Lala's secondary visa should be affirmed, varied or set aside, I must take into account all the evidence, both written and oral, the submissions, case law and legislation.

33. Due to the length of time taken in evidence at the Hearing, it was agreed that the matter should conclude with the lodgment of written submissions, which occurred some weeks after the Hearing. I have dealt with the written submissions in the material below.

34. In doing so, I acknowledge the approach in cases which are relevant to the decision making process as follows: Freeman v Secretary, Department of Social Security (1988) 19 FCR 342, Nong v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 257 and a line of Tribunal cases which have followed the above authorities, supporting the proposition that the Tribunal is limited to events at the date of the primary decision in cases of review of decisions cancelling Subclass 127 Business Skills visas pursuant to section 134 of the Act (Re Purnama and Minister for Immigration and Multicultural Affairs [2002] AATA 237). This approach was recently re-affirmed by Deputy President Forgie in Re Griffiths and Migration Agents Registration Authority [2001] AATA 240 at paragraph 39, where the Deputy President said:

"Where the decision under consideration is a cancellation decision, the Tribunal must consider whether or not that decision was correctly made at the time it was made."

I must therefore have regard to all relevant evidence to enable the making of findings of fact with respect to the Applicants' situation at the date of cancellation.

35. By way of background, I noted that Mr Lala's grant of a Subclass 127 Business Skills visa was made on 21 July 1998. In the application for this visa prepared by KPMG Chartered Accountants on his behalf, and dated 20 December 1996, (Exhibit R2/36), KPMG wrote with regard to Mr Lala's intentions in relation to developing a garment and garment distribution business:

"Mr Lala has been exporting garments to Australia since the 1970's. At the present, Lotus Garments has about 100 customers in Australia with annual sales of approximately AUD500,000. Concurrently, Mr Lala through Lotus Garments and Lala's Store has been importing from Australia, socks, ties (corporate uniforms), sweaters and woollen fabrics. The businesses currently buy between AUD15,000 to AUD40,000 worth of products a week from Australia.

Upon arrival in Australia, Mr Lala intends to establish a garment distribution operation and a trading business specialising primarily in sourcing Australian products for export to Fiji."

36. The Respondent submitted that Mr Lala had misrepresented his position when he applied for the visa because he had only mentioned garment export. However, I noted from attachments to the KPMG document which was part of the application, that Mr Lala's involvement in Fiji with land development and building was explicitly stated (Exhibit R2/38-40). I was satisfied from his evidence and the documents before the Tribunal that Mr Lala continued with his stated intention and imported garments from Fiji at the grant of his Business Skills visa, and after he commenced business in Australia, but considered that it was not out of character for him then to continue with real estate development in Australia.

37. I noted that the decision to cancel Mr Lala's Subclass 127 Business Skills visa was made pursuant to s 134(1) of the Act, and that Mrs Lala's visa cancellation was consequential upon that. Section 134(2) provides that the Minister must not cancel a visa under subsection (1) if the Minister is satisfied that the person:

"(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and

(c) intends to continue to make such genuine efforts."

38. Secondary visas such as that held by Mrs Lala are affected by the cancellation of a Subclass 127 Business Skills visa. However, pursuant to section 134(5) of the Act, the Minister must not cancel the other person's visa under subsection (4) if the cancellation of that visa would result in extreme hardship to the person.

39. I moved then to consider the relevant tests in section 134 of the Act.

CONSIDERATIONS RELATING TO SECTION 134 AND 134(10) OF THE ACT

40. The first issue for me to determine was whether or not Mr Lala has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia. A definition of "eligible business" and "ownership interest" appears in section 134(10) of the Act.

41. The Applicants' written submissions commenced with reference to the content of paragraphs 1.1 to 1.20 of the Applicants' Statement of Facts and Contentions (not tendered to the Tribunal), in which various statements were made about Mr Lala's companies and his involvement therein. The Applicant submitted they were not rebutted, but the Respondent's submissions made it clear certain parts of the content were not agreed.

42. Mr Johnston submitted that none of the grounds for cancellation as set out in paragraphs (a),(b) and (c) of section 134(1) had been made out at 13 November 2001. He submitted that at that time, Mr Lala had:

* a) obtained a substantial ownership interest in an eligible business in Australia and

* b) was utilising his skills in actively participating at a senior level in the day to day management of the business and

* c) intended to continue with (a) and (b) above

43. I had to consider in relation to section 134 of the Act, that the Minister has the discretion to cancel a business visa such as Mr Lala's, if the Minister is satisfied that a number of indicia have not been satisfied. These relate to "ownership interest" and "eligible business" in Australia, which are defined in section 134(10) of the Act as follows:

"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

(c) the sole proprietor of the business;

..."

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;

(c) the export of Australian goods or services;

(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."

44. Accordingly, in order to establish the threshold issues which were whether Mr Lala had made a genuine effort to obtain substantial "ownership interest" in an "eligible business" in Australia, I took into account Mr Lala's evidence, and the submissions of both parties.

45. Mr Johnston submitted that Mr Lala's interest in Sudole Pty Ltd was his "ownership interest" in satisfaction of the indicia in section 134 of the Act, and further that his 50 percent interest in PR and GD Lala Partnership also fulfilled the requirements. He cited Re Wong and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 54, where he submitted, a 25 percent interest in a company had been found to be a substantial ownership interest. Mr Johnston also submitted that Mr Lala's evidence was that under a trust arrangement affecting the shareholding in Sudole Pty Ltd held by Fadasu Pty Ltd, Mr Lala may ultimately hold up to 50 percent of the company beneficially.

46. Mr Allatt submitted however that the 24 percent interest Mr Lala held in Sudole Pty Ltd did not amount to a controlling interest, although he accepted Mr Lala held 50 percent of the Partnership.

47. I have noted the evidence and submissions regarding ownership in section 134(10) of the Act. I noted the submissions regarding Wong (supra), and noted the circumstances of shareholding and decisions made in that regard by Ms Wong prior to the formal transfer of shares, and Deputy President Handley's treatment of those.

48. From the evidence regarding his activities in Australia, I accepted that Mr Lala's 24 percent interest in Sudole Pty Ltd was a controlling interest, and I was satisfied from the evidence before me that Mr Lala had a controlling role in the property dealings and developments, and that this was so even though he was not a majority shareholder. In that regard, I relied upon the Annexures in Exhibit A1, and the evidence of Mr Lala regarding the development of real estate by Sudole Pty Ltd. I accepted Mr Lala's explanation that his son and nephew were the main shareholders and that he wanted them to have the experience of running the company under his guidance. Accordingly I find that Mr Lala had ownership interest in a business in Australia sufficient to meet the definition in section 134(10) of the Act, or that he was making a genuine effort to do so. He is a shareholder in Sudole Pty Ltd and a 50 percent partner in a partnership with his wife.

49. Mr Johnston also submitted that Mr Lala's property development business fulfilled the requirements of section 134(10) of the Act as to "eligible business", because it

* created or maintained employment in Australia (paragraph (a)), or

* increases commercial activity and competitiveness within sectors of the Australian economy (paragraph (f)).

50. I was mindful that the "creation or maintenance of employment in Australia" was in fact paragraph (b) of the definition, and treated the reference to paragraph (a) as a typographical error.

51. Mr Allatt did not address paragraph (b) in his written submissions. However Mr Johnston discerned that: "the Respondent contends

* That neither business has served to create or maintain employment at all; or

* That short term employment in the building industry does not fulfil the criteria or `creation or maintenance of employment' because it does not lead to any `lasting' benefit to Australia in terms of employment."

52. Mr Johnston submitted on behalf of Mr Lala that the business created employment for architects, engineers and other professional advisors, builders and tradespeople, administrators and certifiers, building managers and maintenance tradespeople. He submitted, relying on Re Lau and Minister for Immigration and Multicultural Affairs (2002) 35 AAR 395 that the size of the business was irrelevant, and that if the concept of "lasting" was of significance (paragraph 22 of the Respondent's Further Amended Statement of Facts and Contentions), (although he submitted it was not), then the employment created by the development properties was "lasting", in that the buildings required management and maintenance for the whole of their economic life. Mr Johnston submitted further that one was entitled to look at the indirect effects on employment, in that warehouses, offices and housing stock formed an essential part of a country's infrastructure.

53. I considered on the basis of the evidence and submissions before me whether the company was involved in "the creation or maintenance of employment in Australia". I accepted the submissions of the Applicant in this regard, and found that the criterion, "the creation or maintenance of employment in Australia", was met, in that creating or maintaining employment did not necessarily indicate long term employment of a particular person, and that there was no reason why small scale business and the engagement of contractors and sub-contractors from time to time could not qualify. It was evident from the documents, in particular at Exhibit A1, that Mr Lala, through Sudole Pty Ltd, developed real estate which involved a range of contractors from architects to building personnel, and that the company had a property leased to tenants which involved the continuing services of a real estate agent. I was satisfied that the development was not a once off process, and referred to the evidence which was that Sudole Pty Ltd continued to fund further development by selling a property once it had undergone development. I was satisfied that Mr Lala's enterprises created and maintained employment in Australia, albeit not on a large scale, or in a traditional manner of having staff on the payroll.

54. I moved then to consider the next criterion as claimed, which was whether Mr Lala's activities in Australia "increase commercial activity and competitiveness within sectors of the Australian economy (paragraph (f))".

55. Mr Johnston addressed paragraph (f) in paragraphs 15 - 18 of his closing submissions. He submitted that Mr Lala's activities through the partnership and his building and warehousing activities had more than a "trifling" effect on commercial activity and competitiveness in the Australian economy. He submitted in any case, "increase" did not mean a "substantial increase" when applied to paragraph (f). (Re Harlim and Minister for Immigration, Multicultural and Indigenous Affairs [2002] AATA 767 and Hope v Bathurst City Council (1980)144 CLR 1).

56. The Respondent in its Statement of Facts and Contentions contended that the undertakings of Sudole Pty Ltd and the PR and GD Lala Partnership would have had a de minimis impact, if any, on the commercial activity and competitiveness within the building/warehousing sector of the Australian economy, and that therefore the two businesses failed to meet the criteria for an "eligible business".

57. The evidence before me was that Mr Lala was an experienced developer from his time in Fiji, in business, and that at the relevant date, he had already purchased and developed a small number of properties in Australia. I accepted the submissions of the Applicant that his activities increased commercial activity and competitiveness within the building and associated trades in the Australian economy, albeit in a small way.

58. There were no submissions made with regard to paragraphs (a), (c) (d), or (e) of the "eligible business" definition, and as I did not find them relevant to this case, I did not consider them further.

59. Accordingly, I found that the Applicant (via Sudole Pty Ltd and the PR and GD Lala Partnership) satisfied at least two of the criteria to qualify as an "eligible business" and accordingly came within the definition.

60. I have noted that the Tribunal standing in the shoes of the Minister must not cancel a Business Skills visa pursuant to section 134(1) of the Act if the Tribunal is satisfied that the Applicant has made a genuine effort to obtain a "substantial ownership interest" in an "eligible business" in Australia, and have so found.

61. I moved to consider the tests in section 134(2)(b) and (c) of the Act.

"(a) ...

(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."

62. I moved then to consider whether or not Mr Lala was utilising his skills in actively participating at a senior level in the day-to-day management of his Australian business, or was making a genuine effort to do so, and whether he intended to continue to make such genuine efforts.

63. Mr Johnston submitted that Mr Lala continued, at the relevant date, to hold a "substantial ownership interest" in Sudole Pty Ltd (an "eligible business") and PR and GD Partnership, and was utilising his skills in actively participating in those businesses. Mr Johnston submitted that this was evidenced by Mr Lala's statements and his projected capital investment budget (Annexure "D" to Exhibit A2), which related to funds availability from the sale of Mr Lala's interests in Fiji and his development of a property at 9 - 11 Green St Botany.

64. Mr Allatt also made submissions with regard to Mr Lala's intentions relating to the tests in section 134(2)(c) of the Act. Mr Allatt referred to paragraph 1.20 of the Applicant's Statement of Facts and Contentions, in particular dot points 3, 6 and 7 which follow:

* to obtain an ownership interest of not less than approximately 25% in a new, or in more than one new, business which will be an eligible business for the purposes of section 134(1);

* to use and continue to use his skills in actively participating at a senior level in the day-to-day management of a new business;

* to continue to make a genuine effort to obtain ownership interests of not less than approximately 25% in eligible businesses in Australia; ...

65. The only evidence of these intentions, Mr Allatt submitted, was provided to the Hearing in the form of a number of statements from Fijian business proprietors to which he urged I not give much weight. He also submitted that Mr Lala's evidence evidence in connection with this issue not be given much weight having regard to the fact that Club Shirt Pty Ltd and Cian Pty Ltd were first heard of at the Hearing, and that Mr Lala had no interest in these at the relevant date, noting that Mr and Mrs Lala subsequently took a substantial interest in Cian Pty Ltd in September 2002. Mr Allatt submitted that the only evidence of the Applicant's involvement with Club Shirt Pty Ltd came from his oral evidence. Accordingly, Mr Allatt submitted, at the relevant date, 13 November 2001, Mr Lala was on the available evidence, not making a genuine effort to obtain a substantial ownership and not utilising his skills in actively participating at a senior level in the day-to-day management of his companies.

66. I accepted the evidence of Mr Lala that due to the political unrest, and problems he experienced with fire at one of his factories in May 2000, he had not spent as much time in Australia as he had intended. He gave evidence that he was in the process or divesting himself of his business in Fiji, and I accepted he was quite definite about his intentions to settle here. In that regard he gave evidence that he and his wife had bought a house at Carlingford at which they reside, and from whence the activities of Sudole Pty Ltd are conducted (Exhibit A1). The initiation of real estate development activities appeared from the documents to date back to 1996, (Exhibit A1). A property at Kellyville is owned by the PR and GD Partnership, (50 percent owned by Mr Lala), and one property at St. Peters was leased by tenants from Sudole Pty Ltd back in 1999. Mr Lala's name was shown on the management agreement with the real estate agency as the contact person (Exhibit A1, Annexures H and I), further evidence of his day-to-day involvement.

67. I was mindful that section 134(3) of the Act sets out some or all of the matters which can be taken into account when determining whether a person has made "genuine efforts" referred to in section 134(2) of the Act.

"s 134 (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)."

68. In considerations of whether the decision to cancel Mr Lala's Business Skills visa should be affirmed, varied or set aside, I was mindful of the role of section 134(3) of the Act, and accordingly have considered the indicia raised in that section. I have noted that Mr Allatt did not address each paragraph of section 134(3) of the Act separately either in his written closing submissions or in the Respondent's Statement of Facts and Contentions. I was however able to discern the Respondent's submissions from the general discussion in the submissions and Statement of Facts and Contentions.

Section 134(3):

(a) business proposals that the person has developed;

69. The Applicant submitted in satisfaction of section 134(3)(a), the devising and carrying into effect of business proposals relating to the properties described in paragraphs 5 to 12 of Mr Lala's statement at Exhibit A1; the business proposals described in Exhibit A3.

70. The Respondent did not make specific proposals on this point.

71. I accepted that the proposals regarding Mr Lala's activities in Australia as outlined in Exhibit A1 indicated activity already consummated and a commitment to do business in Australia.

(b) the existence of partners or joint venturers for the business proposals;

72. Neither the Applicant nor the Respondent made submissions in regard to paragraph (b) and the evidence did not address that point. I was satisfied it was not relevant to consider this paragraph in relation to the Applicant at the relevant time.

(c) research that the person has undertaken into the conduct of an eligible business in Australia;

73. The Applicant submitted that the discussions Mr Lala had had with various suppliers (the authors of Exhibits A6 to A11 inclusive) were relevant to paragraph (c).

74. Mr Allatt on the other hand, submitted, that the Tribunal was provided at the Hearing with a number of statements from Fijian business proprietors to which he urged I not give much weight.

75. I was mindful of Mr Lala's evidence that his son had conducted market research, and that they had commenced business in Australia by importing shirts his family company manufactured in Fiji via Sudole Pty Ltd. His evidence was that he had moved from that product into corporate uniforms, and then property development.

76. I noted that the correspondence referred to by Mr Allatt was mainly dated after the cancellation of the Business Skills visa. It was therefore of limited relevance, but could be taken into account in terms of making a genuine effort and future intentions.

(d) the period or periods during which the person has been present in Australia;

77. Mr Johnston submitted that Mr Lala moved his residence to Sydney following the grant of the visa, and with his wife purchased the house in which he now lives (Exhibit A1, paragraph 22). He stated that there were reasonable explanations for Mr Lala's absences in Fiji following May 2000 (Exhibit A1, paragraphs 20 & 21; Exhibit A2, paragraph 7).

78. The Respondent did not have specific comment on this aspect of Mr Lala's conduct, and I accepted the Applicant's evidence in that regard, and his expressed intention to now live here and only visit Fiji for holidays and family occasions.

(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

79. Mr Johnston submitted that over AUD$2,000,000 had been transferred to, and invested in Australia (Exhibit A1, paragraph 24). He also referred to cash receivables from the sale of Mr Lala's Fijian business interests and his intended future levels of investment (Exhibit A2, paragraphs 7 & 11; Exhibit A1, paragraphs 25 & 26).

80. The Respondent did not comment on this aspect of the business.

81. I noted that Mr Lala and his companies owned assets in Australia, but that some of the transactions, and transfers of funds took place after the relevant date of November 2001. Therefore, whilst not strictly relevant to estimating the value of Mr Lala's assets at the relevant time of November 2001, the transfers of funds could be construed as going to demonstrate his intentions for the future conduct of his business in Australia.

(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

82. Mr Johnston submitted that the paid up capital investment in Sudole Pty Ltd (ignoring the funds paid to Fadasu Pty Ltd as trustee, and ignoring loan funds), was $86,345 (Exhibit A1, Annexures B and C).

83. The Respondent submitted that the Applicant's businesses did not fulfil the criteria for being an "eligible business" pursuant to the legislation.

84. I have found above that the combination of Mr Lala's 24 percent interest in Sudole Pty Ltd, combined with his 50 percent interest in the PR and GD Lala Partnership constitute "eligible business" pursuant to the legislation.

(g) business activity that is, or has been, undertaken by the person;

85. The Applicant submitted that the business activity was with regard to the properties described in paragraphs 5 - 12 inclusive of Exhibit A1.

86. The Respondent submitted that the activities averted to in the application for the Business Skills visa submitted by KPMG on Mr Lala's behalf, expressed an intention to establish a garment distribution operation and a trading business specialising primarily in sourcing Australian products for export to Fiji. Mr Allatt submitted that no such business undertakings had been pursued. No claim had been made in that application regarding an intention to enter the property development/investment field he said.

87. I have already expressed views with regard to Mr Lala's activities, and I find that his movement from garment importing to real property development was a continuation of his activities in Fiji, and had been reported in documentation for the Business Visa application. This is notwithstanding the fact that KPMG concentrated on his initial intentions which were to import garments to Australia from Fiji, and which Mr Lala did initially pursue.

(h) whether the person has failed to comply with a notice under section 137;

88. Mr Johnston submitted that there was a reasonable explanation for the failure to respond to correspondence from the Respondent (Exhibit A1, paragraph 21). He added that Mr Lala's evidence was that the failure to respond arose from a combination of extended absences in Fiji following the coup in May 2000, and the failure of his nephew to clear his post office box.

89. The Respondent correctly outlined the dates and attempted contacts in its Statement of Facts and Contentions, and I noted that the Business Skills visa was cancelled as a result of the non-provision of information requested by the Respondent, and the non-compliance with an undertaking to reply to the appropriate 24 months survey.

90. However having considered the above indicia from section 134(3) of the Act, of which I may take into account some or all in assessing whether the "genuine effort" referred to in section 134(2) of the Act has been satisfied, I find as indicated above, that Mr Lala satisfies the majority. I find that he has made a "genuine effort" pursuant to section 134(2)(a), (b) and (c) of the Act, and that accordingly his Business Skills visa must not be cancelled.

THE SITUATION OF MRS LALA

91. The decision to cancel a person's business visa leads to the consequential cancellation of secondary visas under section 134(4), subject to two provisos. First, written notice of intended cancellation, complying with section 135, must have been given to each secondary visa holder within the three year period required by section 134(9) of the Act to provide them with the opportunity to make representations to the Respondent about the impact of cancellation. I find that notices of intended cancellation were given to the secondary visa holder at the same time and to the same address used for giving notice to the Applicant. Secondly, the power to cancel must not be exercised if cancellation would result in extreme hardship to a holder of the secondary visas (section 134(5)).

92. However as I have decided to set aside the decision to cancel Mr Lala's Business Skills visa, then pursuant to section 134(6) of the Act, Mrs Lala's visa is taken not to have been cancelled pursuant to section 134(4) of the Act.

DECISION

93. The Tribunal sets aside the decision under review relating to Mr Padam Raj Lala and Mrs Gaitri Devi Lala, the Applicants, being the decision of the Minister for Immigration, and Multicultural Affairs, dated 13 November 2001 to cancel Mr Lala's Business Skills visa and Mrs Lala's secondary visa pursuant to section 134(1) of the Migration Act 1958 (the Act), and in substitution therefor decides that Mr Lala's Subclass 127 Business Skills visa and Mrs Lala's secondary visa should not be cancelled. The matter is remitted to the Respondent for the appropriate action to be taken.

I certify that the 93 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member

Signed:

......................................................

Associate

Date of Hearing: 18 October 2002

Written Closing Submissions 28 October 2002, & 12 November 2002

Date of Decision: 5 March 2003

Solicitor for the Applicant: Mr B Johnston, Addisons Solicitors and Attorneys

Solicitor for the Respondent: Mr M Allatt, Australian Government Solicitor