Hu v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1006

FEDERAL COURT OF AUSTRALIA

Hu v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1006

MIGRATION – business migration –judicial review of cancellation of visa – discretion to refuse relief – where applicant had failed to advise department of changes in circumstance – where business plan had changed – where often absent from Australia. Migration Act 1958 (Cth) Judiciary Act 1903 (Cth) Migration Regulations Visy Board Pty Ltd v Attorney-General (Cth) (1983) 51 ALR 705 applied HU V MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS N 666 OF 2003 BEAUMONT J 19 SEPTEMBER 2003 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 666 OF 2003

BETWEEN: ZHAO LIN HU

FIRST APPLICANT

JIAXIN HU

SECOND APPLICANT

AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS

RESPONDENT

JUDGE: BEAUMONT J

DATE OF ORDER: 19 SEPTEMBER 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application be dismissed, with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 666 OF 2003

BETWEEN: ZHAO LIN HU

FIRST APPLICANT

JIAXIN HU

SECOND APPLICANT

AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS

RESPONDENT

JUDGE: BEAUMONT J

DATE: 19 SEPTEMBER 2003

PLACE: SYDNEY

REASONS FOR JUDGMENT

Beaumont J:

Introduction 1 These are proceedings under the Judiciary Act 1903 (Cth) and the Migration Act 1958 (Cth) ("the Act"). In order to understand the legal questions arising, it will be necessary to explain their context. 2 By letter of his migration agent, dated 28 June 2000, the first applicant, a Chinese citizen, applied for an "Independent executives" visa pursuant to the provisions of sub-clause (7) of Subclass 457 Business (Long Stay) contained in Schedule 2 of the Migration Regulations 1994. 3 Sub-clause (7) provides: '(7) The applicant meets the requirements of this subclause if the Minister is satisfied that: (a) the applicant proposes to develop in Australia a business activity that will be: (i) conducted by the applicant as a principal; and (ii) of benefit to Australia; and (b) the applicant has a genuine and realistic commitment: (i) to maintain or obtain an ownership interest in a business in Australia; and (ii) to maintain a direct and continuous involvement in the management of the business; and (iii) to make decisions that affect the overall direction and performance of the business from day to day; and (c) nothing adverse is know to Immigration about the applicant's business background; and (d) the applicant has net assets of: (i) not less than AUD250,000; or (ii) a lesser amount that the Minister considers to be adequate; to conduct or establish the business; and (e) the applicant has personal attributes and background that are relevant to, and consistent with, the nature of the proposed business; and (f) the applicant has demonstrated that there is need for the applicant to be temporarily resident in Australia to conduct or establish the proposed business.' 4 In its application letter, the agent stated – 'Business activity in Australia Mr Hu has been to Australia in 1997 and 1999 and has recently done researches with the assistance of Australian companies. For his expertise and experiences, Mr Hu proposes to develop in Australia a battery business. He will be the principal applicant. He has been in business activities since 1978. And from 1994, Mr Hu puts his efforts in producing batteries by his own company, Dongsheng Plastic Product and Storage Battery Industrial Co. Benefit to Australia Mr Hu proposes to own 100% of his Australian company to set up a factory to assemble car batteries in Sydney. Machinery will be transported to Australia for operation. The batteries produced in Australia by his Australian company will be sold direct to wholesalers. Mr Hu will employ 4 Australia[n] permanent residents or citizens to help develop his business activities in Australia. Super Start Battery Australia is very interested in buying batteries direct from Mr Hu's proposed company in Australia. Mr Hu met Super Start Battery in person to discuss these matters. Battery industry can be expanded with the establishment of Mr Hu's business activities in Australia. Genuine and realistic commitment Mr Hu owns 100% of his company in Australia and will continue his management involvement in his proposed business. Like what he has been doing in China, Mr Hu manages his Australian business and fully control its operation with the help of the staff he employs. Mr Hu continues to make decisions that affect the overall direction and performance of his business on a day to day basis. He does the tasks from planning to supervising to financing to achieving objectives. He has made it clear in his management role of his business activity. So far as I am aware, Mr Hu does not have any adverse comments on his business backgrounds. Net assets Mr Hu claims that he has net assets of no less than AUD250,000 which is readily to be transferred to Australia for operation of his business activities. Personal attributes and backgrounds I trust that Mr Hu has very strong attributes in battery industry. His knowledge in battery and its making is great and should continue to contribute to Australian community by supplying good quality batteries at lower prices to car lovers. Definitely car battery wholesalers welcome Mr Hu's idea to open up the battery market in Australia. Moreover, Mr Hu is an expert in the battery making industry. His full background in the area is an asset to Australian car industry. Mr Hu intends to be residing in Australia for no more than 4 years in order to establish his proposed businesses. In summary I am convinced that Mr Hu has capacity of opening up his long-term business in Australia by both benefiting Australia and his company. For his skills he has been building up in the past years, I am confident that Mr Hu's plan to establish his business is realistic. Please proceed with assessing Mr Hu's application in order to decide his genuine intention of starting up a new Australian business that can increase employment of Australian permanent residents and citizens and widen up the battery industry in Australia.' 5 Similar statements, also giving further details of the first applicant's proposal that "[a] factory will be set up to assemble car batteries in Sydney" were provided by the first applicant with his formal application for the visa, including the following: '• The level of ownership: 100% owned by Hu, Zhaolin · Proposed activities: A factory will be set up to assemble car batteries in Sydney. All the inside parts such as plates will be obtained from own factory in China. Some of the plastic shells of batteries are from China while some others are from within Australia. It is aimed to assemble batteries of good name (battery shells made in Australia look more beautiful and smoother. The finish looks very good). All assembling machinery will be shipped from own factory in China. The batteries assembled in Australia will be for direct sale to wholesalers, not for retail. · The proposed location of the factory: 8/81 Riverstone pde, Riverstone, Sydney. · It is projected that 4 Australian permanent residents or citizens are employed. · Projected revenue (per week): Total sale: $22,500 (1,500 batteries per week) Total cost: $16,400 Net profit: $6,100 · A broad outline of any research conducted: Mr Hu consigned the research tasks to AA Finance & Trade P/L. Also, Mr Hu personally visited battery wholesaler, Super [S]tart Battery and visited several battery retailers. In 1997, Mr Hu and his wife visited Australia. He took 5 batteries which were made in Australia out of Australia and examined them. Mr Hu has a list of battery wholesalers. · Detail of any support received from other businesses: AA Finance & Trade P/L has done the research for Mr Hu and given him professional advice. The research concludes that 70% batteries imported to Australia are from China, and the rest are from Malaysia and the Philippines, Japan, Germany and within Australia. Also, it finds out the market wholesale prices and the retail prices for different kinds of batteries, and the CIF prices to Sydney from some battery companies in China. Management role in the business activity: Plan to target production. Control finance in the cost of production of batteries. Research into the battery industry in Australia and elsewhere. Maintain quality management of quality of products. Train staff for performance. Supervise performance of employees. Respond to consumers' needs. Achieve cost effectiveness. Review management of business. Improvement of brand name and brand products.' 6 In addition, the first applicant then stated: 'How the proposed business activity will achieve to benefit Australia? As the proposed business activity needs staff to operate, it is intended that 4 local staff is employed in order that the business can be run smoothly. The employees will be either Australian citizens or Australian permanent residents. They are employed to operate machinery in the process of battery production, liaison with wholesales [sic] to boost sales of batteries, take orders and deliver products to buyers, and maintain day to day clerical routines. The establishment of battery business in Australia is in a way to expand Australian made battery industry because the batteries are to be assembled and consumed in Australia. Car owners can have another option for using high quality batteries produced in Australia. It is aimed that New Zealand is targeted for battery exports from the company. Other neighbouring countries are within the market of the batteries made by this company in Australia.' 7 On 20 September 2000, the first applicant was interviewed by an officer from the Department of Immigration and Multicultural and Indigenous Affairs ("DIMIA") "to assess business proposal, plans and knowledge of the environment". The notes of the interview record that the first applicant confirmed his business activity proposal. 8 By letter to the Visa Section of the Office of the Australian Consulate-General in Guangzhou dated 15 November 2000, the agent stated – 'Instructed by Mr Hu Zhaolin, I am writing to advise your office of additional information. · Mr Hu already signed an agreement for joint venture with an Australian business [person] who travelled to China and accepted the training proposal initiated by Mr Hu. Mr Hu intends to travel to Australia in the end of November or in early December in order to establish the company, select and decide the location of the factory. Mr Hu's machinery will soon be transported to Australia for operation there. · Mr Hu is confident that his plan will be successfully carried out in Australia. He is committed to his business activities in Australia by actually doing something good to Australia and Australians. · Mr Hu will submit the above information to your office very soon. Can I ask what documents or information your office needs to see from Mr Hu in the second interview (Mr Hu is not available to attend the interview on 16 November 2000, at 9.00 am because of urgent business trips to Hong Kong but is pleased to attend a meeting in your office at a time after 22/11/00 when he returns from the one-week business trip in Hong Kong)?' 9 By letter to the Australian Consulate-General dated 8 January 2001, the agent wrote stating – 'Mr Hu just returned to China after his business investigations in Taiwan. He will punctually attend the interview as scheduled by you at 9 am on 9 January 2001, Tuesday. Last month, Mr Hu arrived in Australia and did a lot of preparatory work for the establishment of the factory. Mr Hu already had his company, All Advance Batteries Pty Ltd, registered in Australia. He also paid the security deposit for the purchase of a factory of 300 sq. m in size. The factory is worth AUD365,000.' 10 By letter to the Australian Consulate-General dated 2 February 2001, the agent stated – 'Hu was informed by the Real Estate agent that he must arrive in Australia before 28 February 2001 so that he could sign all the legal documents and then make the final payment for the purchase of the factory (Hu already paid the deposit for the purchase of the factory). Hu said that he needed to stay in Australia for a long period of time as planned in order that he could start and manage his battery business in Australia.' 11 By letter to the first applicant's representative dated 21 February 2001, the Australian Visa Office, Guangzhou, advised that – '... your application for a long stay temporary business visa under subclass 457 as an Independent Executive has been approved and temporary residence in Australia has been granted to: Applicant: HU Zhao Lin Dob: 10/11/1961 This visa is valid for multiple travel until 20/02/2005.' 12 On 23 January 2003, the Minister's delegate interviewed the first applicant. The notes of the interview record the following: '- What has happened to your business? Original plan to produce battery – problem is cost, raw material in China much higher than raw material in Thailand & other parts of E. Asia. Since WTO – more & more co. in market so Chinese co is in danger so should be in China. - Did you set up battery co in Aust? Registered co. Battery business could not be opened. So co is only selling newspapers. - Bus[iness] plan said buy factory. Did you buy the factory? Didn't purchase it. [Facility] [???] is not [suitable] [???]. [Therefore] set up [private own] [???] company. Qian Wei Battery Co. But what is it doing? Because battery products cannot [???] high co. my co. not up newspapers brand selling newspapers & magazines. Used Qian Wei Co more to purchase book shop to sell books & magazines. Evidence? Who is Walter Cross? Business partner. Who manages the business? He employs a manager. "Sa Sa" woman. Address? Doesn't know English so cannot tell me but in a big shopping centre. Knows phone no. 00612 95 241357 What city? Sydney One child in Aust – yes studying Hu Jia Xin – 17 Who live with? Living with relative. Which one. Actually my partner. Name? Walter Cross Address? No didn't bring it.' 13 The first applicant's daughter, there mentioned, is the second applicant. By Subclass 457.3, certain "Secondary criteria" are specified. Subclass 457.3 provides: '457.321 The applicant is a member of the family unit of a person (in this Subdivision called the primary applicant) who, having satisfied the primary criteria, is the holder of a Subclass 457 visa.' 14 (As will later appear, the reference in the interview to the "purchase" of "book shop to sell books & magazines" is to a contract made on 31 July 2002 by All Advance Batteries Pty Ltd to buy such a business, situate at Westfield Shoppingtown, Miranda, for $706,500 being goodwill of $480,000 and equipment of $226,500, together with maximum stock of $100,000.)