Chengdu Siwa Digital Communication Equipment Co Ltd v Minister for Immigration

[2016] FCCA 2497

FEDERAL CIRCUIT COURT OF AUSTRALIA

CHENGDU SIWA DIGITAL COMMUNICATION EQUIPMENT CO LTD v MINISTER FOR IMMIGRATION [2016] FCCA 2497

Catchwords:
MIGRATION – Minister for Immigration and Border Protection – Standard Business Sponsor – whether there was any apprehended bias by the Minister – whether the Minister failed to apply the correct statutory test in reg. 2.59(h)(i) – no jurisdictional error identified – application dismissed.

Legislation:

Migration Act 1958 (Cth), ss.140E, 476.

Migration Regulations 1994, reg.2.58(a), 2.59(h)(i)

Applicant: CHENGDU SIWA DIGITAL COMMUNICATION EQUIPMENT CO LTD

Respondent: MINISTER FOR IMMIGRATION & BORDER PROTECTION

File Number: SYG 1271 of 2016

Judgment of: Judge Street

Hearing date: 27 September 2016

Date of Last Submission: 27 September 2016

Delivered at: Sydney

Delivered on: 27 September 2016

REPRESENTATION

Solicitors for the Applicant: Mr G Lu
Cowise Solicitors

Counsel for the Respondent: Mr D Hughes

Solicitors for the Respondent: Clayton Utz

ORDERS

1. The amended application is dismissed.

2. The Applicant pay the costs of the Respondent fixed in the amount of $7,206.00.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1271 of 2016

CHENGDU SIWA DIGITAL COMMUNICATION EQUIPMENT CO LTD

Applicant

And

MINISTER FOR IMMIGRATION & BORDER PROTECTION

Respondent

REASONS FOR JUDGMENT

Background

1. This is an application for a Constitutional writ within the Court’s jurisdiction under s.476 of the Migration Act1958 (Cth) (“the Act”) in respect of a decision of the Minister made under s.140E of the Act, dated 21 April 2016 refusing to approve the applicant as a standard business sponsor. I am satisfied that the decision of the Minister is not a primary decision within the carve out under s.476(2) of the Act. The applicant applied for a Standard Business sponsor on 22 September 2015 which is a class of sponsor prescribed for the purpose of s.140E(2) of the Act by reg 2.58(a) of the Migration Regulations 1994 (“the Regulations”).

The applicant’s business plan summary

1. In support of the application, the applicant provided a number of documents, including a document entitled “Business Plan Summary”.  There was a certification in relation to the      Business Plan Summary signed by the General Manager Tong Wei. The certification by the General Manager asserted that the applicant had an intention to establish a business operation in Australia and purported to certify:-

   That the attached Business Plan Summary truly represents the business plan of the company Chengdu Siwa Digital Communication Equipment Co., Ltd regarding its company identifying the applicant, regarding its expansion and development in Australia, and contains detailed information about our company’s genuine and realistic commitment to the proposed expansion. 

2. The Business Plan Summary was a single page document that referred to the subsidiary structure, the subsidiary name, the proposed subsidiary location, proposed investment, subsidiary size, first year HR plan and proposed trading activities. The proposed trading activities were described as:-

   Import and export, international trade, distribution, wholesale and retail sale of telecommunication products and electronic products; as well as related installation.

Letter to the applicant to comment on alleged adverse information received

1. On 9 March 2016, the Minister wrote to the applicant inviting the applicant to comment on alleged adverse information received. The adverse information upon which the comment was invited referred to the business sponsorship, business plans and other supporting documents not being genuine. The letter identified having contacted the company, an officer of the Minister obtaining information from the purported general manager about the number of his staff and about the nature of the business, being the main business of the company selling fibre-optic communication products, digital microwave equipment, data switching equipment and accessories and electrical products. The source of the products were said to be from OEM or imports.

2. The officer records that the general manager claimed the company transferred its business from selling traditional digital and electronic products to internet-related products a couple of years ago.  The general manager alleged that he had travelled to Australia to meet his business partner who did market research for him. The representative of the Minister records that the general manager was not able to tell the details or plan for how to develop the business in Australia or who were the potential clients. It is recorded that the general manager said internet of things is an emerging industry, so no competitor in Australia at the moment.

3. The representative of the Minister records that the general manager referred to investing RMB4M as initial cash flow for the new business and that there would be nominated a general manager to Australia and a hiring of local staff. The general manager is recorded as having no idea of how they came up with the number of RMBM, nor did the general manager know the cost of the office rental in the area of business. The representative noted that there was another concern in relation to the turnover of the company being only RMB3M and accordingly, a small business and that the 2013 profit and loss report showed a negative loss in 2013 and that the profit for 2014 was RMB8108.22. The representative noted concerns in relation to the company’s ability to financially support a business in Australia.

The applicant’s response to the concerns raised by the Minister

1. The applicant was invited to respond to these concerns and was given an opportunity to comment and a timeframe for doing so. The applicant did respond to those concerns, including one response headed “Comment on General Manager’s Knowledge” which expressly set out in the opening paragraph part of the information provided to the representative about the general manager not being able to detail his plan for how to develop the business in Australia and who were the potential clients when not knowing the cost of the office rental in the area of the business. A number of other documents were provided including a “Comment of Intention”, “Comment on Staff Number Inconsistency” as well as a document purporting to identify the general manager’s duties.

Before The Minister

1. The Minister identified the criteria for approval under s.140E(1) of the Act relevantly in relation to reg 2.59(h) of the Regulations which is as follows:-

   For subsection 140E(1) of the Act, the criterion that must be satisfied for the Minister to approve an application by a person (the applicant ) for approval as a standard business sponsor is that the Minister is satisfied that:

   (h)  if the applicant is lawfully operating a business outside Australia and does not lawfully operate a business in Australia--the applicant is seeking to be approved as a standard business sponsor in relation to a holder of, or an applicant or a proposed applicant (the visa applicant ) for, a Subclass 457 (Temporary Work (Skilled)) visa, and the applicant intends for the visa holder or visa applicant to:

   (i)  establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections; or

   (ii)  fulfil, or assist in fulfilling, a contractual obligation of the applicant; and

2. The decision of the Minister records having considered all the information provided in support of the application and not being satisfied that the applicant intends for the visa-holder or visa applicant to establish or assist in establishing on behalf of the applicant a  business operation in Australia with overseas connections for the following reasons. 

Consideration of the business plan summary

1. The Minister then set out its reasons which included first a reference to the business plan summary being a brief, two-page summary of generalised information. The Minister referred to the proposition that ordinarily a business plan describes the business, its objectives, marketing and operational strategies, target market and financial forecasts and contains information about the organisation that includes a statement of business goals and how those goals are going to be accomplished and plans for reaching them, details of the amount of money that needs to get the business off the ground and through the initial growth phase. Those are observations of common sense by the Minister and were reasonably open to the Minister.

2. The Minister made a finding that the business plan provided by the applicant was too generalised. That finding was open on the material before the Minister. The Minister found that the business plan did not provide specific details of the proposed Australian branch structure, analysis and strategies of marketing, estimates of sales, investment budget figures of the proposed Australian business and business development strategies. Those findings were open to the Minister.

3. The Minister found that based on the applicant’s business plan that the applicant had not provided sufficient information to demonstrate that the applicant intends for the visa-holder or visa applicant to establish or assist in establishing on behalf of the applicant a business operation in Australia. The Minister then referred to the checking process that was undertaken and the information obtained by the representative from the general manager and in particular the general manager’s limited knowledge of the business plan.

Consideration of the applicant’s opportunity given to comment

1. The Minister made reference to the opportunity given to the applicant on 9 March 2016 to comment on the information that was obtained by the representative. The Minister then made reference to the response material and relevantly found that the explanation advanced for the general manager’s limited knowledge was not accepted and that if there was a proposal for a business plan to set up a branch of the business in Australia it would be reasonable to assume the general manager would have a more detailed knowledge of the contents of the applicant’s business plan including details on the Australian market, not just limited to one visit to Australia, as well as the business development strategies. The Minister made reference to the fact that the general manager should have been able to provide more specific details about the establishment and development of the business operation in Australia. 

The Minister’s conclusion

1. It was in those circumstances that the Minister found that having considered all the evidence provided, the Minister was not satisfied it adequately demonstrates that the applicant had a genuine intention for the visa applicant to establish a business operation in Australia. The Minister found therefore that the applicant did not meet the requirements of reg 2.59(h) of the regulations and accordingly found that the applicant failed to meet the criteria and refused the application for approval as a standard business sponsor.

Before the Court

1. The grounds of the amended application are as follows:-

   1. The Respondent committed jurisdictional error by asking the wrong question and identifying the wrong issue with respect to intention under reg 2.59(h)(i) of Migration Regulations 1994.

   Particulars

   (a) Reg 2.59(h)(i) asks if the Applicant “intends” for the visa applicant to establish or assist in establishing, on behalf of it, a business operation in Australia with overseas connections.

   (b) The Respondent erroneously asked if the Applicant genuinely intended to establish a business operation in Australia.

   (c) The correct issue about intention under reg 2.59(h)(i) is plainly intention itself.

   (d) By adding a word “genuine” to intention under reg 2.59(h)(i), the Respondent misdirected its mind to the irrelevant issues outside the scope of reg 2.59(h)(i):

   (i) the issue whether the Applicant had a “genuine need” for approval as a standard business sponsor: and

   (ii) the issue whether the Applicant had a “realistic commitment" to the proposed business activity, be it the establishment of a branch office, or the incorporation of a subsidiary company, in Australia.

   (e) The Respondent erred by imposing an additional criterion “genuine” into reg 2.59(h)(i), and thereby identified the wrong issue and applied the wrong test with respect to intention,  resulting in the erroneous finding that reg 2.59(h)(i) was not met.

   2. The Respondent committed jurisdictional error by failing to address a statutory question posed by reg 2.59(h)(i) of Migration Regulations 1994 about the contents of intention.

   Particulars

   (a) Reg 2.59(h)(i) can be met alternatively if the requisite intention is to:

   (i) “establish” a business operation in Australia with overseas connections: or

   (ii) “assist in establishing” a business operation in Australia with overseas connections.

   (b) The Respondent only asked if the Applicant's intention was to “establish” a business operation in Australia but failed to ask if the Applicant's intention was to “assist in establishing

   
   

   a business operation in Australia with overseas connections.

   (c) The Respondent found that the Applicant's information was not adequate to prove its intention to “establish” a business operation in Australia, but failed to consider that the Applicant’s circumstances would prove its intention to “assist in establishing a business operation in Australia with overseas connections.

   (d) The Respondent's failure to consider the statutory term “assist in establishing” that it was bound to consider and failure to apply the “assist in establishing” option resulted in the erroneous finding that reg 2.59(h)(i) was not met.

   3. The Respondent denied the Applicant procedural fairness with regards to the business plan.

   (a) The Respondent held adverse information that a business plan should be a formal document containing certain categories of information, and thereby found the Applicant's business plan was too generalised with inadequate information to meet reg 2.59(h)(i).

   (b) The Respondent failed to put the adverse information to the Applicant and failed to give the Applicant a fair opportunity to develop and provide a formal document.

   (c) Had the Respondent fairly disclosed that adverse information to the Applicant, the Applicant would have been able to develop and provide a formal document.

   4. There is an apprehension of bias.

   Particulars

   (a) The Respondent appeared to have the prejudicial views:

   (i) that a Business Plan should be a formal document containing certain categories of information; and

   (ii) that without such a formal document. reg 2.59(h)(i) would not be met anyway,  despite there being no statutory requirement for a formal document as the business plan.

   (b) The Respondent found that the Applicant's business plan was too generalised to be a formal document with certain categories of information in comparison with its prior views of the business plan.

   (c) Because of the Respondent's prejudgment on the business plan, the Respondent would nevertheless find that reg 2.59(h)(i) was not met no matter what other materials were brought to it.

   (d) With its prejudgement on the business plan, the Respondent closed its mind to probative evidence of the Applicant's intention by failing to consider materials not in the form of business plan:

   (i) failing to consider the Applicant’s announcement of its corporate intention through the web page;

   (ii) failing to consider the Applicant's manager statements that supported its corporate intention;

   (iii) failing to consider the Applicant's action that substantiated its corporate intention, including the registration of a subsidiary company in Australia. the general manager's business visit to Australia, and the appointment of the visa applicant as a director of the subsidiary company in Australia; and

   (iv) failing to consider the background of the Applicant's intention, including the Applicant's 15 years of business hi story, official confirmation of its registered capital, bank's confirmation of its accessible capital, and the commencement of free trade between China and Australia under ChAFTA.

   (e) With its prejudgment on the business plan, the Respondent showed certain reluctance to depart from it in that:

   (i) the Respondent identified the wrong issue about intention under reg 2.59(h)(i).

   (ii) the Respondent ignored the statutory term "assist in establishing" that it was bound to consider;

   (iii) the Respondent failed to give the Applicant a fair opportunity to provide a formal document as the business plan; and

   (iv) although the Respondent had denied the existence of the Applicant's intention, the Respondent then illogically asked if that intention was genuine.

   (f) The decision of the Respondent was irrational and unreasonable insofar as the Respondent relied on its prejudicial view of the business plan, failed to consider relevant materials before it, failed to apply the Regulations properly, failed to accord the Applicant procedural fairness, and failed to adopt a logical approach to decision making.

   (g) A fair-minded and informed observer would reasonably apprehend that the Respondent might not have brought an impartial and unprejudiced mind to making the decision.

Consideration

1. In relation to Ground 1, Mr Lu the solicitor on behalf of the applicant argued that the reference by the Minister in part of its reasons to “genuine intention” indicated that the Minister had failed to apply the correct statutory test. Mr Lu submitted that the context of the reference to “genuine” had deflected the Minister from the actual language used in the regulation, which made no reference to the word “genuine”. Mr Lu contended that therefore the Minister had asked the wrong question and identified the wrong issue in relation to reg 2.59(h)(i) of the Regulations.

2. It is apparent from the Minister’s reasons that the Minister correctly identified the relevant issue in relation to the “intent”, without use of the word “genuine” in its reasons and in its findings. Whilst there is a reference to “genuine intention” in part of the Minister’s reasons, the Minister’s reasons are not be read with a keen eye for error. I accept the Minister’s submission that on a fair reading, the reference in the reasons of the Minister to “genuine intention” is in substance the same as the reference to “intention” in reg 2.59(h)(i) of the Regulations. In relation to Ground 1, I am satisfied that there was a genuine intellectual engagement with the criteria.  No error of the kind alleged in Ground 1 is made out. 

3. In relation to Ground 2, Mr Lu the solicitor on behalf of the applicant, submitted that the Minister had not addressed the issue concerning the second limb of “assist in establishing” the business again by reference to part of the Minister’s reasons that referred to not being satisfied that the applicant has a “genuine intention” for the visa applicant to establish a business operation in Australia. In relation to Ground 2, Mr Lu also handed up to the Court an extract from the Concise Oxford English Dictionary in seeking to advance the argument as to the meaning of “assist” in respect of the alleged error in Ground 2.

4. The Minister correctly identified the relevant test in accordance with the statutory language and referred to “establish or assist in establishing” and in the finding of not being satisfied that the applicant intends for the visa-holder or visa applicant to “establish or assist in establishing” a business operation in Australia has correctly used the statutory language. Again, the Minister’s reasons are not to be read with a keen eye for error.  On a fair reading of the Minister’s reasons, the Minister correctly applied the legislative provisions. No jurisdictional error of the kind alleged in Ground 2 is made out. 

5. In relation to Ground 3, it was alleged that the reference by the Minister to a business plan ordinarily being a formal document that describes particular matters, was in substance adverse information that should have been put to the applicant so that the applicant had a fair opportunity to respond. There is no dispute that the principles of procedural fairness apply to the decision in the present case being made under s.140E of the Act. The letter dated 9 March 2016 put the applicant squarely on notice of the concern in relation to the business plan that was provided. The deficiency in that regard was a matter highlighted in the summarised communication with the general manager that was set out in the covering letter. The significance of that deficiency was clearly appreciated by the applicant, given the document headed “Comment on General Manager’s Knowledge” which set out in quotes the deficiency relating to the business plan. It was not necessary for the Minister to explain to the applicant the inadequacies of its evidence in relation to the business plan. It was for the applicant to satisfy the Minister in relation to the intent. The issue of the applicant’s intent in relation to reg 2.59(h)(i) of the Regulations was clearly an issue in respect of which the applicant had a fair and reasonable opportunity to respond. There was no denial of procedural fairness in relation to the business plan. Ground 3 fails to make out any jurisdictional error.

1. In relation to Ground 4, an allegation of apprehended bias must be clearly alleged and properly proved. The allegation of bias by Mr Lu, the solicitor on behalf of the applicant accepted was being advanced based on the adverse findings made by the Minister. Adverse findings by the Minister are not conduct upon which a fair-minded lay observer might reasonably apprehend that the Minister might not bring an independent and impartial mind to the determination of a matter on its merits.

2. Mr Lu contended that the reference to the formal business plan in substance identified a prejudgment as to the merits of the application. I reject that submission. Common sense in relation to expectations of a business plan was a matter open for the decision-maker to determine to take into account. The reference by the decision-maker to what might be ordinarily expected in a business plan does not reflect any prejudgment in relation to the merits of the application or support any allegation of bias. The submission that the decision-maker failed to take into account the evidence advanced by the applicant is inconsistent with the express language used by the decision-maker and indeed the reference by the decision-maker to part of the submissions advanced on behalf of the applicant. It was not necessary for the Minister to refer to the whole of the submissions advanced by the applicant. Ground 4 fails to make out any jurisdictional error and there is no apprehended bias by the Minister. 

3. The amended application is dismissed.

I certify that the preceding twenty-four (23) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 25 January 2017