Bodenstein v Minister for Immigration
[2008] FMCA 630
•20 May 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BODENSTEIN& ORS v MINISTER FOR IMMIGRATION & ANOR | [2008] FMCA 630 |
| MIGRATION – Review of decision of Migration Review Tribunal – whether jurisdictional error – application for Temporary Business Entry Visa (Class UC), Subclass 457 Business (Long Stay – Independent Executive) visa – merits review not the function of judicial review – whether policy guidelines flexibly applied – whether pending Supreme Court proceedings should have been taken into account as a “net asset” for the purposes of subparagraph 457.223(7A)(c)(iv) of the Regulations – whether Tribunal decision should have been deferred pending the outcome of the Supreme Court proceedings. |
| Migration Act 1958 (Cth), ss.359, 359A, 474 Migration Regulations 1994 (Cth) Schedule 2, sub-paragraph 457.223 |
| NAHI v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 10 Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Abebe v Commonwealth (1998) 197 CLR 510 |
| First Applicant: | AMIR BODENSTEIN |
| Second Applicant: | RACHEL BODENSTEIN |
| Third Applicant: | TOMER BODENSTEIN |
| Fourth Applicant: | RONI BODENSTEIN |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File Number: | SYG 2666 of 2007 |
| Judgment of: | Orchiston FM |
| Hearing date: | 10 March 2008 |
| Date of Last Submission: | 10 March 2008 |
| Delivered at: | Sydney |
| Delivered on: | 20 May 2008 |
REPRESENTATION
| The First Applicant appeared in person |
| Counsel for the Respondent: | Ms K. C. Morgan |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The application filed on 29 August 2007 is dismissed.
The Applicant pay the First Respondent’s costs fixed in the sum of $5,000 payable within five (5) months of the date of these Orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2666 of 2007
| AMIR BODENSTEIN |
First Applicant
| RACHEL BODENSTEIN |
Second Applicant
| TOMER BODENSTEIN |
Third Applicant
| RONI BODENSTEIN |
Fourth Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| MIGRATION REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
(As Corrected)
The Application
This is an application seeking judicial review of a decision of the Migration Review Tribunal (the Tribunal) signed on 13 July 2007 and notified to the applicants by letter dated 1 August 2007 which affirmed the decision of the delegate of the respondent Minister (the delegate) to refuse to grant Temporary Business (Class UC) visas (the visas) to the applicants.
Background
The first named applicant was born on 17 May 1961 and was aged 46 years at the time of his application for the visa. For convenience, in these proceedings, the first named applicant will be referred to as “the applicant” in these proceedings.
The second named applicant is the wife of the applicant born on 10 December 1962. The third and fourth named applicants are their two children, born on 22 January 1997 and 16 December 2000.
The applicants claim to be nationals of Israel. The applicant arrived in Australia on 2 September 2003 on an Israeli passport issued in his own name, holding a Temporary Resident 457 visa which was valid until 2 September 2005.
The applicants lodged an application for the visas on 2 September 2003 (Court Book (CB) 1–9).
On 11 September 2003 the first delegate refused to grant the applicants’ visas on the basis that the applicants did not satisfy the requirements for the grant of any of the visa subclasses included in the Temporary Business visa class (see Legislative framework).
On 7 October 2003 the applicants applied to the first Tribunal, differently constituted, for review of the first delegate’s decision. The first Tribunal remitted the visa applications to the Department with a direction that the applicant met paragraphs 457.223(7A)(b) and (c)(i),(ii) and (iii) of Schedule 2 to the Migration Regulations 1994 (the Regulations) and for it to consider the remaining criteria for the visas which the Tribunal was not in a position to decide (CB 30).
On 5 July 2006 the second delegate refused to grant the visas on the basis that the applicant did not satisfy subparagraphs 457.223(7A)(c)(iv) and (v) of the Regulations.
The applicants applied to the Tribunal on 26 July 2006 for review of the second delegate’s decision.
Legislative framework
The Regulations
In determining the applicant’s application for a Subclass 457 Business (Long Stay - Independent Executive) visa, the Tribunal had to decide whether the applicant met subparagraphs 457.223(7A)(c)(iv) and/or (v) of Schedule 2 to the Regulations:
(7A) The applicant meets the requirements of this subclause if:
(c) the Minister is satisfied that:
(iv) the applicant has net assets of:
(A) not less than AUD250,000; or
(B) a lesser amount that is adequate;
to conduct the business; and
(v) the applicant has demonstrated that there is need for the applicant to be temporarily resident in Australia to conduct the business.
Policy guidelines
The following policy guidelines are relevant to the above criteria:
38 CAPITAL REQUIREMENT
38.1 Purpose
The object of 457.223(7A)(c)(iv) is to ensure the applicant has sufficient assets available to establish the business in question.
38.2 Net assets
The net assets of the applicant is the value of the applicant’s assets after deducting any liabilities, and comprises both personal and business assets. In establishing the applicant’s net assets, officers may, under policy, take into consideration the net assets of the applicant and/or the applicant’s spouse.
To assist in the assessment of this criterion, applicants should provide documentation of their assets (personal and business) in Australia. If they cannot demonstrate that they have AUD 250 000 in Australia, they will need to submit original documentation from the country where the assets are held. The authenticity of documentation may need to be verified with an overseas post.
38.3 Relevant factors
For guidelines on the following factors that need to be taken into account, see:
·PAM3: GenGuideM - Source and ownership of assets - including the guidelines on additional processing steps if there are doubts as to the source or ownership of the assets or the applicant’s business background (eg if there are concerns regarding criminal activities or associations)
·PAM3: GenGuideM - Trusts.
38.4 Only net assets for business are relevant
Officers should note that this criterion focuses on the ‘net assets’ required for the applicant ‘to conduct or establish the business’.
In assessing this clause, officers should only inquire into the ownership and source of the net assets required for the business, not the ownership and source of all of the applicant’s assets.
There is no requirement that the applicant’s net assets have been acquired through any particular activity, such as business. All that is required is that they legally own the assets.
38.5 Location of assets
The 'net assets' claimed by the applicant do not have to be in Australia, but have to be available to the applicant in order to conduct or establish the business.
Applicants are expected to be able to demonstrate:
·how they plan to make the assets available to the business. This could include whether they plan to sell an asset, borrow against an asset, transfer cash or use funds already in Australia and
·that they can legally transfer the assets to Australia.
For further guidance on the inclusion of items, in particular personal items, see PAM3: GenGuideM - Net business and personal assets.
38.6 Loans as net assets
While the applicant (and/or their spouse) must own sufficient net assets, it is not necessary that such assets be liquidated, it is open to the applicant to borrow funds against assets owned. For example, an applicant’s ‘net assets’ may take the form of a loan secured against their house.
The test officers should apply is whether the applicant’s ‘net assets’ are secure from claim by lenders or creditors. In this example, creditors would make any claim against the applicant’s house, rather than the loan.
38.7 If net assets are less than AUD 250 000
For 457.223(7A)(c)(iv)(B), officers can consider net assets of less than AUD 250 000. However, AUD 250 000 is considered by expert advisers to be the amount realistically needed by a person planning to go into business, even though some types of businesses require less start-up capital than others, many small businesses in Australia fail in the first year of operation because of insufficient capital or inadequate planning and research.
If an applicant seeks a Subclass 457 visa on the basis of less than AUD 250 000 net assets, care should be taken to examine the degree of planning and research undertaken and the strength of the applicant’s background and personal attributes relevant to the proposal.
Officers must be flexible in applying policy and should be prepared to use their discretion to consider proposals that involve less than AUD 250 000 net assets.
Examples where less than AUD 250 000 may be adequate include (but are not limited to):
·applicants who have other inputs such as ownership of patents or intention to import equipment already owned
·younger applicants who although lacking capital because of their age, are highly skilled and have sound experience in the type of proposed business and
·younger applicants who are highly skilled, active in a successful business and have strong financial and logistical support from their family.
If a proposal of less than the specific prescribed amount is accepted, the applicant should be counselled as to the more stringent ‘net assets’ requirement of the should they wish to later change status.
39 DEMONSTRATED NEED TO BE IN AUSTRALIA
39.1 Policy background
The 457.223(7A)(c)(v) requirement has arisen from consultations that show that, to some extent, persons have been applying for Subclass 457 visas under the Independent Executive stream to obtain temporary residence in Australia merely in order to gain access to other benefits such as employment, health, housing and education services in an English-speaking environment for dependants.
There is no sponsorship requirement for this stream. Rather, the policy intention is that the applicant go into business in Australia and that they and any dependants will be entirely self-supporting, risking their own funds in business and making private provisions for health care, education, housing and other public or community services.
The Tribunal proceedings
On 13 April 2007 the Tribunal wrote to the applicant pursuant to s.359A of the Act (CB 190) inviting him to comment on the following particulars of information which it considered would be the reason, or a part of the reason, for affirming the second delegate’s decision:
·Information you provided to the Tribunal in your application for a fee waiver indicates that you have no income and rely on family members for support; that you have substantial debts, including to the Australian Taxation Office; and that your business is not trading and has not traded for some time.
This information may indicate that you do not meet subparagraphs 457.223(7A)(c)(iv) and (v) of the Regulations.
In the same letter the Tribunal also invited the applicant to provide the following additional information pursuant to s.359(2) of the Act:
·Please provide additional information that you meet subparagraphs 457.223(7A)(c)(iv) and (v) of the Regulations.
On 21 May 2007 the applicant provided a response to the Tribunal invitation (CB194-196).
On 25 May 2007, the Tribunal sent a letter to the applicant inviting him to appear before it on 11 July 2007 to give oral evidence and present arguments (CB 197–198). Immediately prior to the hearing on that day, the applicant provided an affidavit to the Tribunal prepared by him in relation to his Supreme Court proceedings (see below) (CB 203-262).
The applicant’s claims and evidence (CB 272-273)
The Tribunal summarised the applicant’s claims, including that:
·the applicant has a net asset stemming from an interest-bearing personal loan to the Mandarin Trust which he estimated is currently valued at $510,000, plus interest
·he is the owner of the Mandarin Trust
·the Trust is currently not earning income or profits and is in a net liability position
·the applicant is in ongoing discussions with various business interests aimed at resuming trading in the future but there is nothing to show as yet
·the Mandarin Trust is not financially incapable of repaying any portion of the money lent
·the applicant is the owner of the registered trademark ‘Morden Paint’ and is the Managing Director of MPSA Pty Ltd which is the trustee of Mandarin Trust. He claims that since its establishment, MPSA has continuously conducted business activities
·he has a current claim before the Supreme Court for $3 million [over the lease of premises at 39 Glebe Point Road for a café-restaurant project] which he thought would be finalised “by the beginning of next year” [2008]. Mr Nicholas Smith, who is a friend and former employee of the applicant and who has helped him prepare for his court case, testified that he considered the applicant had a strong case. The applicant affirmed that, if successful, he would expect to be awarded at least $1,200,000
·the applicant is currently unemployed; has no income; no possession of assets and/or money; and is being supported by family members
·he did not have net assets of $250,000; he was “broke”; and he conceded to the Tribunal that he did not have evidence to support his claim that he could conduct his business on his admittedly weak financial position
·he needed to be in Australia for his court case and to continue his ongoing business discussions.
The Tribunal’s findings and reasons (CB 273–274)
The Tribunal made the following findings:
The applicant has admitted to the Tribunal, both at the hearing and in writing, that he does not have net assets of $250,000; indeed, he told the Tribunal at the hearing that he was “broke”. He did say that what little resources he had were adequate for him to conduct his business. However he added that, notwithstanding ongoing discussions with business interests, he had no evidence to support his claim that he could conduct his business on his current net asset position.
The Tribunal has discounted the applicant’s claim that he has a loan asset valued at at least $510,000 with Mandarin Trust on the grounds that the applicant is the sole owner of Mandarin Trust and the claimed asset is therefore fully offset by Mandarin Trust’s liability for the loan. The applicant also noted at the hearing that Mandarin Trust itself is not earning income or profits and is currently in a net liability position.
The Tribunal accepts that the applicant may be awarded a substantial sum of money if he is successful in his claim for damages currently before the Supreme Court of NSW. However it is not known when this matter will be decided by the Court. At the hearing the applicant said that it was possible that the case would be finalised “by the beginning of next year.” Given the uncertainty of the outcome of the Court proceedings and the Tribunal’s obligation under the Act to provide a mechanism that is fair, just, economical, informal and quick, the Tribunal is not prepared to defer its decision until such time, probably no earlier than 2008, that the applicant’s court case is decided.
Based on the evidence before the Tribunal, the Tribunal is not satisfied that the applicant has net assets of not less than $250,000 or a lesser amount that is adequate to conduct his business. The Tribunal therefore finds that the applicant does not meet subparagraph 457.223(7A)(c)(iv) of the Regulations.
Given the findings made above, the Tribunal must affirm the decision under review.
The proceedings before this Court
The applicant filed the application in this Court on 29 August 2007 setting out 3 grounds for review of the Tribunal’s decision.
The applicant appeared in person before this Court on 10 May 2008. Ms Morgan appeared for the first respondent. The Court invited the applicant to say anything he wished to in regard to each ground and generally.
Grounds of application
The grounds of the application are:
(1)I have a total net assets of more than $250,000.
(2)Alternatively, I have lesser amount that is sufficient to continue my business.
(3)To conduct my business, I have to stay in Australia.
Grounds 1 and 2 of the application
Grounds 1 and 2 of the application may be conveniently dealt with together. The applicant has not sought to particularise these bare assertions which do not in themselves identify any legitimate ground for judicial review.
The applicant is, in effect, seeking that the Court engage in impermissible merits review. It is no part of the function of this Court to interfere with the findings of fact made by the Tribunal. As observed by the Full Court in NAHI v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 10 at [10]):
To engage in fact-finding about the merits of the appellants’ case is no part of the function of the Court, whether at first instance or on appeal, in dealing with an application for relief under s.39B of the Judiciary Act. As Stone J said, Plaintiff S157 establishes that it is necessary for the appellants to show jurisdictional error on the part of the Tribunal, if they are to succeed. Whatever be the boundaries of jurisdictional error, they do not comprehend errors of fact as to merits of the case put to the Tribunal (and see also Minister for Immigration & Ethnic Affairs v Wu Shan Liang(1996) 185 CLR 259 at 272).
Merely because the applicant disagrees with the Tribunal’s factual conclusions and its ultimate conclusion in this case does not amount to an error of law. Furthermore, there is no error of law, let alone jurisdictional error in the Tribunal making a wrong finding of fact: Abebe v Commonwealth (1998) 197 CLR 510 at 560 [137].
In his oral submissions, the applicant argued that:
·Till [the Supreme Court proceeding] will be finalised, [my Supreme Court claim] should be considered as part of my net assets. It’s with a question mark. It’s not yet been determined but it’s part of my net assets. It was part of me conducting a business here in Australia … And the Tribunal by deciding that this is not part, and can’t be considered part of, the net assets, it’s a mistake … (Transcript 10/3/08 pp 19, 20)
I wasn’t admitting that I don’t have 250,000 net assets. I was admitting that I don’t have 250,000 or less in cash, not in net asset. My claim was that the Supreme Court proceeding are a net asset ( p 21).
·the Tribunal should have deferred its decision pending the outcome of the Supreme Court proceedings (transcript, p16), which are very complex proceedings and it is out of his control that they have taken “already a few years” and that material is still being filed by the parties.
·officers must be flexible in applying policy and should be prepared to use their discretion to consider proposal that involved less than $250,000 net asset (p11; and see also p 16). The applicant pointed to guideline 38.7 If net assets are less than AUD 250 000 in support of this contention.
In response to the applicant’s oral submissions, the first respondent submits that:
·The Tribunal made a finding of fact on the applicant's own admission that he didn't have $250,000 and it also made a finding of fact that there was no evidence for the alternative, that the applicant had a lesser amount that was sufficient to continue the business. [CB 275] … And in those circumstances nothing the applicant has said in oral submissions today comes close to identifying what a jurisdictional error might be (Transcript p 18).
·the potential to satisfy the criteria at some point in the future was specifically rejected by the Tribunal. That conclusion was open to the Tribunal and can't be challenged on a basis of jurisdictional error (p14)
·… this Court cannot make an alternative finding as to whether [the applicant] does indeed satisfy the criteria … The applicant admitted he didn't have $250,000. He asserted that he had sufficient but the Tribunal said there wasn't evidence to support that assertion. The Tribunal found therefore he did not satisfy the criteria which is at 7A(c)(iv). The Tribunal specifically turned its mind to whether the claim in the Supreme Court should be taken into account in relation to an evaluation of net assets. The Tribunal concluded that as it hadn't been resolved and it was some time off, that it wasn't going to take it into account. That was open to the Tribunal and there is no jurisdictional error that can be identified in the Tribunal's finding on that issue (p 21).
I accept the first respondent’s submissions on these matters. I consider that the Tribunal carefully considered each of the concerns raised by the applicant and made relevant findings which were open to it on all the evidence and material before it, including that the Supreme Court claim was not taken into account by it as a “net asset”. As stated above, it is not the function of this Court to interfere in the fact finding role of the Tribunal.
Indeed, contrary to the applicant’s assertion that the Tribunal failed to accord flexibility in the application of the policy guidelines where net assets are found to be less than $250,000, the Tribunal’s finding in this regard was based on the applicant’s own concession in his oral evidence to the Tribunal that he did not have evidence to support his claim that he could conduct his business on his admittedly weak financial position.
I am further satisfied that the Tribunal exercised its discretion not to defer its decision pending the outcome of the Supreme Court proceedings upon a proper consideration of the progress of the proceedings to date; when they might be finalised [and I note, although not relevant to the review of the Tribunal’s decision, that Exhibit 1 in these proceedings demonstrates that the Supreme Court proceedings had not yet been allocated a hearing date and had been adjourned for directions hearing to the 27 March 2008]; the uncertainty of the outcome of those proceedings; and its statutory duty under the Act to provide a mechanism that ensures the “fair, just, economical, informal, and quick” disposition of matters. The Tribunal therefore took into account relevant considerations in this regard. I detect no procedural unfairness on this basis.
Overall, I am satisfied that the Tribunal set out the relevant statutory criteria and the relevant policy guidelines; assessed the applicant’s oral evidence and material submitted by him against those criteria and guidelines; and made findings that the applicant did not have net assets of not less than $250,000, or a lesser amount that is adequate to conduct his business, based on that evidence and material. I am further satisfied that those findings were open to the Tribunal on all the evidence and material before it and that it reached its conclusion that the applicant did not meet the criteria in subparagraph 457.223(7A)(c)(iv) of the Regulations based on those findings. I therefore detect no jurisdictional error and am satisfied that the Tribunal performed the task required of it in accordance with law.
Accordingly, Grounds 1 and 2 of the application are rejected.
Ground 3 of the application
Given the Tribunal’s findings under subparagraph 457.223(7A)(c)(iv) of the Regulations, it did not need to consider the criteria in 457.223(7A)(c)(v).
Accordingly, Ground 3 of the application is rejected.
Conclusion
The Court finds that the Tribunal’s decision is not affected by jurisdictional error and is therefore a privative clause decision. Accordingly, pursuant to s.474 of the Act this Court has no jurisdiction to interfere.
The application before this Court is dismissed.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Orchiston FM
Associate: Duncan Maconachie
Date: 20 May 2008
CORRECTIONS
Paragraph 26 line 1 – delete “applicant’s” insert “respondent’s”
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