Discretion not to cancel a business visa


The existence of that discretion is beyond doubt as in Kim v MIMIA [2004] FCA 31 (3.2.04), the Federal Court recognised that even if a business visa holder had not set up a business nor had not become involved in the day to day management of the business, then there remained a residual discretion not to cancel the visa.

Recapping here is what s. 134 says:

  1. (1)…the Minister may cancel a business visa…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.

The AAT was wrongly of the view that once the matters in subparagraph 134(a), (b) & (c) were determined against a visaholder then the visa MUST be cancelled.

The Federal Court however held that ‘MAY’ means ‘may’ and there remains a residual discretion not the cancel the visa.   The Federal Court concluded:

9 Where a statute provides that an act may be done, the act may be done at discretion: s 33(2A) Acts Interpretation Act 1901 (Cth). The use of the word, whilst presumptive, is not conclusive of the existence of a discretion and it may instead impose a duty to act: Ward v Williams (1955) 92 CLR 496 at 505. The Court there approved the statement in Julius v Bishop of Oxford (1880) LR 5 AC 214 at 235, that the question whether a public officer was bound to use the power given, is to be solved by reference to the context of the statute, the particular provisions and the general scope and object of the enactment conferring the power….

19 S. 134 is directed to a subsequent assessment of what has been undertaken by a business visa holder and what their further intentions are. The grant of a business visa is based, in large part, upon a person’s commitment to establish, participate in or own an eligible business in Australia. The reporting conditions are connected with the assessment and may trigger it. It is of some importance, I consider, that the Minister may exercise the power given bys 134 at any time. At any time during the currency of the visa, if the Minister is satisfied that the visa holder’s obligations have not been met and the Minister is not persuaded that there have been genuine efforts to do so or that it is intended to continue to make those efforts, then s 134 permits cancellation of the visa. The question is whether the Minister is obliged to do so.

20 There are some factors which weigh against the likelihood that that might be intended. No words indicative of obligation are used and the section is not structured in such a way as to suggest that cancellation is to follow automatically. The prohibition in subs (2) is a limit upon the power to cancel given by s 134(1) if the Minister is satisfied of the matters there listed. Those matters are not expressed as conditions for the maintenance or non-cancellation of the visa.

21 It is not obvious that cancellation is the only possibility. The Minister’s contention that the word ‘may’ in s 134(1) does not mean that there is a discretion not to cancel would be stronger if it were shown that there was nothing which might be said in the visa holder’s response to the notice of intention to cancel, which might be relevant to the exercise of a discretion, or that there was no purpose to be served by the exercise of such a discretion. Whilst the discretion given in s 134(1) is not as broad as that considered in Samad, in the sense that it does not involve more choices, it cannot be said that a decision not to cancel a visa could serve no purpose. The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by a visa holder. The Minister retains the right to cancellation under s 134(1) at all times. This does not suggest that the Minister is to be obliged to cancel a business visa if the Minister is not satisfied at a particular point during the currency of the visa of the matters in s 134(2).

It is curious as to why this case ever got to the Federal Court because the MSI-133:  VISA CANCELLATION UNDER SUBDIVISION G – CANCELLATION OF BUSINESS VISAS recognises this discretion. Some relevant portions read:

2.5           The power to cancel business visas under the Act is operable only during the first 3 years in which the person holds the visa after initial entry to Australia (subsection 134(9) refers) and power is discretionary upon the decision maker, ie.  a business visa does not have to be cancelled even if there are grounds for cancellation under Subdivision G and cancellation is not prevented by s.134(2).

4.5.2    While failure to meet one or more of these indicators may normally lead to a visa being cancelled, it will not necessarily mean that a visa will be cancelled.  The decision maker must give weight to all relevant factors in a case (of which those set out in s. 134(3).. may only be some) and reach a decision on that basis.  For example, while the factors listed in 4.5.1 above may be indicative of “genuine effort”, lack of them will not necessarily be decisive.  The decision maker must decide, on the ordinary meaning of the words, whether the visa holder has made “genuine effort”.  A decision maker may still decide not to exercise the discretionary power to cancel the business visa even if  it is assessed that no genuine effort has been made…

7.5.3    Visa cancellations usually have serious consequences for the visa holder.  Officers must therefore ensure that they have a high standard of proof that non-compliance with Subdivision G occurred and that the evidence gathered is sufficient to support a decision to cancel.  If officers are not convinced that visa cancellation is appropriate or warranted, as a matter of policy the visa holder is to be given the benefit of the doubt.  In addition, the power to cancel a business visa arises if, and only if, the holder as a matter of law is a person referred to in ss. 134(1), (3A) or (4).

No reference is made to the MSI-133 in the judgement from which one can infer that it was not drawn to the attention of the Court by either party.  This is certainly re-miss of DIMIA because the argument is raised in the court is totally contrary to what is found in MSI-133.  Perhaps it’s another case of the left hand not knowing what the right is doing.

Always hold a substantive visa

This discussion about visa cancellations also raises the other important strategy. If possible always make sure your client holds a substantive visa.

Too many people treat bridging visas as if it is a grant or permanent residence.  A bridging visa in reality is only a last resort.  A bridging visa is like a row boat in the sea – it will get you to your destination but only if all is calm.

The writer has seen too many cases where a client could have applied for a further substantive temporary visa and got it, but instead applied for a bridging visa in connection with a permanent visa application but then found a hidden flaw in the permanent residence application, had the application rejected, fell foul of the s. 48 prohibition and could not apply for another visa onshore.

These clients then had to leave Australia and apply offshore with no merit review rights and an uncertain prospect of ever returning.

There is merit review in relation to the subclass 132 visa

One of the least publicized aspects of the new business visa regime is that MERIT REVIEW IS POSSIBLE in relation to some of the new business visas.

Firstly let’s look at the new business talent subclass 132 visa.  If one applies offshore then one still has merit review rights because of a combination of clause 132.411 – Circumstances applicable to grant and s. 338(7A) of the Act.  Clause 132.411 reads:

132.411           The applicant may be in or outside Australia, but not in immigration clearance.

means both bridging visa and MRT rights.

And s. 338(7A) reads:

(7A)     A decision to refuse to grant a non-citizen a permanent visa is an MRT-reviewable decision if:

(a)       the non-citizen made the application for the visa at a time when the non-citizen was outside the migration zone; and

(b)       the visa is a visa that could be granted while the non-citizen is either in or outside the migration zone.

(As stated below the advantage of applying for a subclass 132 visa onshore is that one gets a bridging visa)

But there is a layer of complication here.  The limitation period for applying for review is 21 days after notification as Reg 4.10 states:


(a)      if the MRT-reviewable decision is mentioned in s 338(2) or (7A) of the Act — starts when the applicant receives notice of the decision and ends at the end of 21 days after the day on which the notice is received;

And then there is this limitation in relation to merit review for the subclasss 132 visa if the application was lodged offshore as. S 347 (3A) states:


(a)      was physically present in the migration zone at the time when the decision was made; and

(b)      is physically present in the migration zone when the application for review is made.

To preserve an applicant’s merit review rights for an offshore lodged 132 visa application therefore one has to liaise with the case officer to ensure the refusal decision is made when the applicant is present in Australia (although there is no legal obligation of a case officer to wait until the applicant returns to Australia).

On the other hand is the subclass 132 application is made in Australia then s. 338(2) applies which reads:


(a)      the visa could be granted while the non-citizen is in the migration zone; and

(b)      the non-citizen made the application for the visa while in the migration zone;

In such a case the applicant could be onshore or offshore at time of decision and still have merit review rights. Hence, one would only apply for a subclass 132 visa offshore if one had a no further stay provision attaching to a visa the applicant already had (ie like on a subclass 456).  If the no further stay condition 8503 applies to a visa held by an applicant then a subclass 132 visa application cannot be validly made onshore  – see the effect of s. 46(1A) which reads:


(a)      the applicant is in the migration zone; and

(b)      since last entering Australia, the applicant has held a visa subject to a condition described in s. 41(2)(a); and

(c)      the Minister has not waived that condition under s. 41(2A); and

(d)      the application is for a visa of a kind that, under that condition, the applicant is not or was not entitled to be granted

[8503 – no further stay is a condition described by s. 41(2)(a)]

Therefore a no further stay condition on an applicant’s existing temporary visa will mean that no valid application for a subclass 132 visa can be made onshore and therefore the merit review rights are determined by s. 338(7A) and  S 347 (3A).  All of this was discussed by the Federal Court in El Ess  v MIMEA [2004] FCA 1038 (13 August 2004).