Extreme Hardship – Business Visa Cancellation for Secondary Visa holders

Under s. 134 of the Migration Act, the consequential cancellation of the visa held by secondary visa holders can be avoided if extreme hardship is proven. Cha v MIAC [2007] AATA 1936 (12.11.07) is a recent case where this was found.

20.              I am prepared to accept as the truth that her marriage has been in difficulties since 1995 and that the parties have finally separated. Despite these problems, Ms Cha and her husband purchased a hair dressing business as joint owners in 2005. Ms Cha has been responsible for the operations of the business. Her husband has conceded that he did not meet the requirements of s 134 of the Act and withdrew his application for review.

21.              Ms Cha set up and operated the Australian business from the beginning. Ms Cha acknowledged that she sought her husband’s advice from time to time. However, it was she who ran Chic Hair Mode on a day to day basis. However, while Ms Cha has met some important criteria for the grant of a subclass 128 (Senior Executive) visa in her own right, Ms Cha cannot expect to return to Australia on such a visa, as the turnover falls short. With… annual turnover of $120,000 for Chic Hair Mode, she does not meet the requirement that her main business has had a turnover of $500,000 for 2 of the 4 preceding financial years. Nor can she apply for an onshore permanent subclass 845, established business in Australia visa, as she is not the holder of a temporary substantive visa and does not meet the $200,000 turnover requirement attached to the ‘Business Skills Points Test” in Sched 7, item 7170, for that subclass. The respondent has not suggested there is any obvious avenue that would enable Ms Cha to return to Australia and continue the running of her business.

22.              … Ms Cha has a bleak future if she returns to Korea as a separated woman who is likely to divorce. As Rev Jang said, although Korea may have a high divorce rate, the wide acceptance of divorce is largely limited to the younger generation. The applicant has not sought a divorce because it is still a matter of great shame for older women to be divorced. This perception among older citizens was emphasised by Rev Jang. I note the BBC article produced by the respondent, “Koreans learn to live with divorce”, which refers to the upward trend in divorces having taken place over the last 30 years and involving “…a clash of cultures, between the old and the new…”. I consider.. there is merit in the interpretation and qualification of this trend put to me by the applicant and Reverend Jang regarding people of Ms Cha’s age and accept their evidence.

23.              I also accept that it will be very difficult for Ms Cha to re-establish herself in Korea. As well, as she is separated from her husband, she cannot expect to resume co-habitation. She would find it very difficult to afford rent for a place for herself and her son once she had been forced to give up the income from her salon in Australia. She does not hold the necessary qualifications to start a hairdressing salon in Korea, and she is unlikely to be able to return to piano teaching because of her 5 to 6 year break from teaching. Her age would make it difficult to return to childcare, which is a career she has not pursued for many years as well. I further accept that she has now lost contact with her friends in Korea and she feels that she will face prejudice and isolation as a single, divorced or separated woman.

24.              The applicant’s husband has conceded that he did not meet the requirements of s 134 of the Act. It was the applicant who set up and operated the Australian business with financial assistance and business advice from her husband. I consider it is part of the hardship to Ms Cha that I should take into account that she has put genuine and continuing efforts into the acquisition and management of the business in a similar way to the expectations for a primary visa holder to comply with visa conditions. Ms Cha has expended time and effort in maintaining a genuine business which employs at least one Australian resident, and which is beginning to show substantial returns. It is likely she will lose the funds invested in the business, being the $80,000 purchase price and $30,000 on renovations and new equipment, as well as her livelihood. After hearing from her accountant I have no difficulty in finding it unlikely that the business could be sold for any substantial amount once Ms Cha is gone. The goodwill component developed by the applicant as manager will become virtually non-existent once Ms Cha has gone. In addition, Ms Cha will be unable to introduce her clients to new management in such a short time, bearing in mind that achieving a sale of a business can take months or even years and that the sale of the salon in 28 days would leave no margin for niceties. In addition the applicant will lose the opportunity of future income through the business.

25.              … I find that Ms Cha will suffer financially and personally if her visa remains cancelled and she has to leave Australia as a result. It is clear from her evidence that she is well settled in the Australian community and has close connections and support from her church. She will lose not only the support network she has built up if she has to leave Australia, but she will lose the investment that she and her husband have made in the hairdressing salon. The further question is whether her circumstances amount to extreme hardship.

26.              It was put to me that, when compared to the finding of Foster J in Man Ki Kim v MIMEA [1995] FCA 1088; (1995) 37 ALD 481, that there was “no contest” that extreme hardship was made out by the loss of an employee who performed a vital executive role such that the loss could affect the viability of a business, then the loss of an entire business will generally be an “extreme hardship” also. Certainly, I consider the loss of the business built up over the last 2 years is a severe hardship.

27.              The applicant’s submissions put to me by counsel were that she will suffer extreme hardship not just because of the loss of the business but also because of her close connections with the Australian community; in particular through the local church. I agree with the submission that, while this on its own might not be sufficient to meet the test, when aggregated with the loss of her business, the requirements for “extreme hardship” are met. In all the circumstances, I find that these difficulties taken together are of sufficient degree to amount to extreme hardship.

Military service not extreme hardship

But in Jang v MIAC [2007] AATA 1937 (12.11.07), the AAT found that the fact a student would not be able to complete his course would not amount to extreme hardship:

15.              I accept the submissions on behalf of the applicant that if his visa is cancelled he will have to leave Australia within 28 days. He might apply for a bridging visa but, even if one is granted, it is unlikely that he will have sufficient time to obtain an offshore student visa to return to Australia in order to complete his TAFE course. As a result, I accept that he may be unable to pass the course. This may well mean that he cannot enrol in a course at the UNSW as he planned. Dong Ig Jang is doubtless suffering stress and anxiety as a result of the prospect of a forced departure from Australia. Even if he applies for a student visa from Korea, the delay would prevent him from completing the TAFE course in 2007.

16.              I also accept that, if the applicant returns to Korea he will have great difficulty in returning to Australia on a student visa to undertake further study, if he has not completed his TAFE course. As well, I acknowledge that Dong Ig Jang will have difficulty in undertaking further tertiary study in Korea after being away for some vital years. He has been in Australia since July 01 which means he has not completed the equivalent of the HSC in Korea. He would need to undertake further study in Korea such as private tuition for a period, possibly for a year as he claims, in order to be able to sit the HSC-equivalent exam in Korea. It is understandable that the applicant doubts whether he would obtain sufficiently high results because he is out of touch with Korea and has acclimatised to Australian society and language. I accept his evidence that this will work against his academic progress in Korea.

17.              In addition, I accept the applicant’s evidence that he may be required to undertake military service… He may be unable to participate in a course of study in Korea which permits him to postpone military service. He further explained that his brother was not so concerned about doing military service as the applicant is. It may well be true that the applicant’s education will be set back for some years or that he may never resume tertiary studies because of the difficulties that he will face upon return to Korea. This may cause him employment difficulties or restrict his options in employment as well. All of these circumstances involve a degree of hardship to the applicant but are the likely consequence to any student whose studies are terminated prematurely due to cancellation of a visa.

Will the applicant suffer “extreme hardship” if his visa is cancelled?

18.              I accept Mr Jang’s evidence that he had decided to undertake a tertiary commerce course before he was aware his visa was under threat of cancellation although notification had been sent earlier…

19.              It is of course unfortunate that Mr Jang’s education in Australia since 2001 cannot continue as he planned. He has lived in Australia for 6 years and no doubt has friends and contacts here. However, he is not without resources in Korea. He grew up in Korea until he left in 2001, aged 15. He conceded that he had returned to Korea occasionally for holidays and his father and brother continue to live there. There is no doubt in my mind that having to leaveAustralia will cause hardship for Mr Jang. However, on balance, I am not satisfied that this will amount to extreme hardship.