C H a Agencies v Minister for Immigration
[2004] FMCA 279
•14 May 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| C H A AGENCIES v MINISTER FOR IMMIGRATION | [2004] FMCA 279 |
| MIGRATION ¾ Application for approval as a standard business sponsor ¾ requirement for “direct employment” ¾ requirement for satisfaction able to meet financial undertakings ¾ whether "direct employment" requires contract of service ¾ whether contractor sub-contractor relationship satisfies requirement ¾ whether financial undertakings correctly assessed. |
Migration Act 1958, ss.483A, 474
Migration Regulations 1994, reg.1.20D(2), 1.20 D(2)(b)
Judiciary Act 1903, s.39B
Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
McAuliffe v Department of Social Security (1992) 28 ALD 609
Avesta v Minister for Immigration and Multicultural Affairs [2002] FCAFC 121
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, [2001] HCA 30
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Minister for Immigration and Multicultural Affairs ex parte Cohen [2001] HCA 10
Lace Holdings Pty Ltd v Minister for Immigration and Multicultural Affairs [2002] FCA 254
| Applicant: | C H A AGENCIES PTY LTD |
| Respondent: | MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
| File No: | MZ 646 of 2002 |
| Delivered on: | 14 May 2004 |
| Delivered at: | Melbourne |
| Hearing date: | 11 February 2002 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Hurley |
| Solicitors for the Applicant: | Armstrong Ross |
| Counsel for the Respondent: | Mr Fairfield |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
That the application be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 646 of 2002
| C H A AGENCIES PTY LTD |
Applicant
And
| MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant seeks to review, by way of prerogative writ, a decision of the Migration Review Tribunal dated 6 June 2002 by which the Tribunal confirmed the decision under review, finding that the applicant was not entitled to approval as a business sponsor.
Background
The applicant is a wool exporter. Its business is to act as an agent introducing a buyer to a seller in the wool trade. The application for approval as a business sponsor was accompanied by a business visa application by Fumei Qing. That visa application was refused. The Tribunal heard a review of that refusal and confirmed the rejection. An application for prerogative writ in relation to Ms Qing was heard at the same time. Her application cannot succeed if the sponsor’s application does not.
The applicant is an Australian Corporation. On 12 October 2000, it applied for approval as a standard business sponsor in respect of an application by Fumei Qing for a Temporary Business Visa subclass 457. On 5 May 2001, a delegate of the respondent refused the application. By application on 4 June 2001, the applicant sought review of that decision by the Migration Review Tribunal ("the Tribunal"). By a decision dated 6 June 2002, the Tribunal confirmed the decision of the delegate.
Information provided to the delegate and evidence before the Tribunal came from the managing director of the applicant. The applicant mostly acts as an agent whereby it introduces a buyer to a seller, the buyer pays the seller for the goods, and the seller pays the applicant a commission. He said that he works full-time as a general manager and that the applicant currently employed a full-time marketing manager, a full-time office manager in Sydney, and a part-time wool buyer. He said that he draws director's fees, and the applicant pays the remaining employees commission based on sales produced. He said there were no group certificates, and the employees, who may have their own companies, make their own arrangements regarding the payment of tax. He said Ms Qing was employed by the applicant as an export manager on the same basis from 1998 until May 2001 when the applications were refused.
A financial statement for the year ending 30 June 1999 shows a net loss of $13,587 with a total income of $15,229, no expenditure wages, $5,500 in management fees and retained losses at the end of the 1999 financial year of $98,622.
To be approved as a business sponsor, the applicant had to meet the criteria set out in the Migration Regulations 1994, reg.1.20D(2). Sub-regulation 1.20 D(2)(b) provides:
(b)in respect of each visa application who seeks to satisfy the primary criteria for a Subclass 457 visa to be granted on the basis that:
(i)the applicant for approval is the employer referred to in subclause 457.223 (4) of Schedule 2 in relation to the visa application; and
(ii) the visa application satisfies the requirements of that subclause;
the Minister is satisfied that:
(iii)the applicant for approval proposes to be the direct employer in Australia of the visa applicant as the holder of the visa (in this subregulation called the visa holder); or
(iv) if the applicant for approval is a body corporate — the applicant for approval is, under section 50 of the Corporations Law, related to the body corporate that proposes to be the direct employer in Australia of the visa holder
The Tribunal found that the applicant was not the direct employer of Ms Qing. It applied the common law test which distinguishes between a contract of service (between employer and employee) and a contract for services (between principal and independent contractor).
Sub regulation 1.20D(2)(f) requires the Minister to be satisfied that the applicant “is able, in relation to each visa holder, to comply with the undertakings given by the applicant in accordance with form 1067”. The Tribunal was not satisfied of the applicant's financial ability and commitment to meet its undertakings.
Court’s powers
The Federal Magistrates Court has a review jurisdiction over decisions of the Tribunal. This is the combined effect of s.483A of the Migration Act 1958 and s.39B of the Judiciary Act 1903. Section 483A of the Migration Act confers upon the Federal Magistrates Court the same jurisdiction as the Federal Court in relation to matters arising under the Migration Act. Section 39B of the Judiciary Act, subject to certain qualifications, confers upon the Federal Court jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. This jurisdiction, in the case of the Federal Magistrates Court, is limited to matters arising under the Migration Act.
Section 474 of the Migration Act contains a privative clause. It provides that a decision of an administrative character made under the Migration Act is final and conclusive, is not to be challenged in any Court and is not subject to prohibition mandamus injunction declaration or certiorari. The High Court of Australia in Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2 has determined that s.474, on its proper construction, does not apply to jurisdictional errors. Breach of the rules of natural justice is a jurisdictional error. Other matters may constitute jurisdictional error such as a failure to discharge imperative duties or to observe inviolable limitations of restraints; Plaintiff S157/2002 v Commonwealth of Australia at 76.
Not all errors of law are jurisdictional errors. Non jurisdictional errors of law are subject to the restrictions contained in s.474 of the Migration Act. In Plaintiff S157/2002 v Commonwealth of Australia, Gaudron, McHugh, Gummow, Kirby and Hayne JJ said this at 81:
As no constitutional provision confers jurisdiction with respect to certiorari, it is open to the Parliament to legislate so as to prevent the grant of such relief. However, because "privative clause decision" is relevantly defined in terms of a "decision ... made under [the] Act", s 474(1)(c) does not prevent the issue of certiorari as ancillary to mandamus or prohibition, but validly does so for non-jurisdictional error of law on the face of the record.
Some general principles apply to the application before the court. The reasons of an administrative decision maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, McAuliffe v Department of Social Security (1992) 28 ALD 609). Fact-finding is a matter for the Tribunal. Unsatisfactory or illogical reasoning does not involve jurisdictional error (Avesta v Minister for Immigration and Multicultural Affairs [2002] FCAFC 121).
Grounds relied upon
Two grounds were relied upon as constituting jurisdictional error:
a)The Tribunal erred in law in the manner in which it interpreted direct employer.
b)There was error in the manner in which the Tribunal made findings about the applicant's financial capabilities.
It was submitted that the Tribunal fell into jurisdictional error as described in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, [2001] HCA 30 at [82]:
It is necessary, however, to understand what is meant by "jurisdictional error" under the general law and the consequences that follow from a decision-maker making such an error. As was said in Craig v South Australia, if an administrative tribunal (like the Tribunal)
"falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the Tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the Tribunal which reflects it."
Direct employer
The applicant submitted that the regulations simply required that there be a direct relationship between the employer and the person holding the visa without any intermediaries. It was submitted that the regulation did not require that the direct relationship be by way of contract of service rather than a contract for services, and that a relationship of contract and subcontractor could satisfy the regulation.
In making its finding, the applicant would not be the direct employer of the Ms Qing. The Tribunal took into account that the applicant's financial statements did not show payment of wages and that Mr Coombe, the managing director of the applicant, had told the Minister's delegate that Ms Qing had worked part-time in the past in a capacity similar to a consultant. The Tribunal took into account his evidence at the hearing that he is paid director’s fees, but the remainder of the staff are paid on a commission basis and that they make their own arrangements regarding the payment of income tax.
In its reasons, the Tribunal observed that the term “direct employer” is not defined in the regulations and that it therefore takes its ordinary meaning. The Tribunal then went on to consider the tests applied in relation to contracts of employment and referred to Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
The submission on behalf of the applicant was that this was too restrictive an interpretation, and that the error in interpretation was an error of law amounting to jurisdictional error. In Minister for Immigration and Multicultural Affairs ex parte Cohen [2001] HCA 10, McHugh J said at [35]:
The applicant submits that the Tribunal "misunderstood the nature of the opinion which [it] is to form"[16]. He submits that the Tribunal did not understand the true meaning of "disability" and "other serious circumstance" in the definition of "special need relative" in reg 1.03. But, assuming that the Tribunal erred in determining the meaning of these expressions because it applied an erroneous precedent in determining the meaning of "disability" and "other serious circumstance", it does not follow that it committed a jurisdictional error. Adopting an incorrect interpretation is not always synonymous with jurisdictional error. Nor does it make a difference to the validity of that proposition that the relevant tribunal has applied an erroneous precedent rather than adopting its own erroneous interpretation.
The Tribunal understood the question that it had to answer. Even if it applied an erroneous precedent, it did not commit a jurisdictional error. The expressions "disability" and "other serious circumstances" were used in reg 1.03 in their ordinary, non-technical sense. The ordinary meaning or common understanding of a non-technical word is generally a question of fact[17]. Leaving aside questions of jurisdictional fact, an administrative tribunal will ordinarily not commit a jurisdictional error unless it has made an error of law[18]. A factual error made in the course of making a determination or decision is unlikely to be a jurisdictional error unless the particular fact is a jurisdictional fact. Courts should be slow to find that an erroneous finding of fact or an error of reasoning in finding a fact, made in the course of making a decision, demonstrates that an administrative tribunal so misunderstood the question it had to decide that its error constituted a jurisdictional error.
If an administrative tribunal applies a wrong legal test or asks itself or decides a wrong legal question, it may be a short step to concluding that it did not decide the question that it had to decide. But questions of fact are ordinarily for an administrative tribunal to determine and so are the reasoning processes employed to make such findings. Disagreement with a finding of fact or the reasoning process used to find it is usually a slender ground for concluding that a tribunal misconceived its duty.
The term “direct employer” is used in the regulation in its ordinary, non-technical sense. It was for the Tribunal to determine its meaning. In discussing the test to be applied, it referred to the commonly applied test in identifying the contract of employment as the right of control. It said at [24]:
24. The term direct employer is not defined in the Act or Regulations. It will therefore take its ordinary meaning. The law distinguishes between a contract of service (between employer and employee) and a contract for services (between principal and independent contractor). The most commonly applied test in identifying a contract of employment is the right of control by the employer over the employee's manner of doing work. However, it has been acknowledged that the control test is often insufficient because of its lack of precision and its remoteness from commercial reality, for example where there are highly skilled employees. In circumstances where the control test is not appropriate, the totality of the relationship should be looked at and an objective assessment made, based on the individual circumstances of the case. Relevant considerations include the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax, the delegation of work by the putative employee, the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged, and the right to dictate the place of work, hours of work, and the like: see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
The submissions for the applicant criticised the test of contract of services. It was said that the Stevens decision was made in a different context. It was submitted that it was not a question of finding whether there was a contract of employment as opposed to a contract of services but rather whether the relationship was a one of direct employment. It was submitted that the relationship of contract and subcontractor without any intermediary, in the circumstances of this case, did satisfy the requirements for direct employment.
There are indications in the relevant part of the regulations which support the interpretation made by the Tribunal. The prescribed form, form 1067, requires the applicant to give undertakings to comply with Australian Industrial Relations laws, Australian levels of remuneration and conditions of employment. These include ensuring that tax instalments are deducted from salary or wages, eligible termination payments and the making of superannuation contributions. Conditions of employment, in particular, suggests that what is contemplated is a contract of employment. Deduction of tax instalments from salary or wages, eligible termination payments and the making of superannuation contributions are only relevant when there is a contract of employment. If the meaning of "direct employment" is a question of law, there has been no error of law by the Tribunal, and certainly no jurisdictional error.
Compliance with undertakings
Concerning the requirement that the Minister be satisfied that the applicant " is able, in relation to each visa holder, to comply with the undertakings given by the applicant in accordance with form 1067", the Tribunal said at [27-28]:
27. Subregulation 1.20D(2)(f) requires the Minister to be satisfied that the applicant is able, in relation to each visa holder, to comply with the undertakings given by the applicant in accordance with form 1067. Departmental policy indicates that this criterion expects an applicant for approval as a business sponsor to demonstrate a level of proof sufficient to satisfy the decision maker of its financial ability and commitment to meet its undertakings.
28. The Tribunal notes the opinion of the review applicant's accountants that it is able to meet its obligations and liabilities as and when they fall due. However, the accountants do not state the basis upon which that opinion is based, and a company's ability to pay its debts as and when they fall due is not the same as its ability to meet sponsorship undertakings, which require an applicant, amongst other things, to be able to pay the proposed visa holder's salary, medical expenses and repatriation costs. Based on the financial statements presented, the Tribunal takes into account that for the last three financial years for which statements are available, the review applicant's income has remained at about $15,000, its net losses have reduced from $73,762 to 13,587, and its accumulated net losses have increased from $85,035 to $113,443. The Tribunal takes into account that the proposed annual salary for the Ms Qing is $38,000, that the level of salary has been assessed by DEWRSB as well below prevailing market rates, that the review applicant must be able to pay other costs in relation to the Ms Qing apart from salary, and Mr Coombe's evidence that the review applicant has experienced a downturn in the last 18 months. Taking all relevant matters into account, the Tribunal is unable to be satisfied, on the evidence before it, that the review applicant has the capacity to fulfil its financial obligations as a standard business sponsor. Consequently the Tribunal finds that the review applicant does not meet the requirement in subregulation 1.20D(2)(f).
Whether or not the applicant was able to comply with the undertakings was a question of fact for the Tribunal. In Lace Holdings Pty Ltd v Minister for Immigration and Multicultural Affairs [2002] FCA 254, [34], Nicholson J. said:
34 In the present case the Tribunal correctly interpreted and applied reg 1.20D(2)(f) of the Regulations. Satisfaction as to an applicant's ability to comply with the undertakings is a finding of fact and degree for the Tribunal based on the circumstances of the case. The possibility that the Tribunal's finding of fact is in error or that the Court may have made a different finding of fact is not a permissible basis for review: see Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [56].
The applicant's submissions said that the Tribunal had applied the wrong test because the question was whether the applicant was "able to meet the undertakings", not whether it was solvent or operating at a profit. The Tribunal did not apply the wrong test. It was plainly applying itself to the correct question, that is, whether the applicant was able to meet the undertakings.
No errors of law have been made by the Tribunal. The application is dismissed.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: R. Campbell
Date: 14 May 2004
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