CSH Auto Services & Spares Pty Ltd v Minister for Immigration, Citizenship and Multicultural Affairs
[2022] FedCFamC2G 755
Federal Circuit and Family Court of Australia
(DIVISION 2)
CSH Auto Services & Spares Pty Ltd v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FedCFamC2G 755
File number(s): PEG 235 of 2021 Judgment of: JUDGE KENDALL Date of judgment: 9 September 2022 Catchwords: MIGRATION – Nomination application – decision of the Administrative Appeals Tribunal – whether there was evidence to support the Tribunal’s key factual findings – whether the Tribunal’s findings were “illogical” or “irrational” – no jurisdictional error – application dismissed. Legislation: Corporations Act 2001 (Cth), s 95A
Migration Act 1958 (Cth), ss 140GB, 140GBA, 476
Migration Regulations 1994 (Cth), reg 2.72
Cases cited: Abebe v The Commonwealth (1999) 197 CLR 510
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Djokovic v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 3
Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611
Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61
Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32
MZZUG v Minister for Immigration and Border Protection [2015] FCA 1151
Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63
WAKK v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 225
Division: Division 2 General Federal Law Number of paragraphs: 111 Date of hearing: 9 June 2022 Place: Perth Counsel for the Applicant: Mr M Pudovskis Solicitor for the Applicant: Munro Doig Lawyers Counsel for the First Respondent: Ms L Helsdon Second Respondent: Submitting appearance, save as to costs Solicitor for the Respondents: Sparke Helmore ORDERS
PEG 235 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CSH AUTO SERVICES & SPARES PTY LTD
Applicant
AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS
First Respondent
ADMINISTRATIVE APPEALS TRIBUNAL
Second Respondent
order made by:
JUDGE KENDALL
DATE OF ORDER:
9 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.The name of the first respondent be amended to read “Minister for Immigration, Citizenship and Multicultural Affairs”.
2.The application be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE KENDALL:
Background
On 2 May 2017, CSH Auto Service & Spares Pty Ltd (the “applicant”) applied to the then Department of Immigration and Border Protection (the “Department”) for a 457 Nomination (the “nomination application”) (Court Book (“CB”) 1-9). In that nomination application, the applicant nominated Mr Cheng Chow Leong as the nominee (the “nominee”) (CB 7) for the position of “Motor Mechanic (General)” (CB 3).
The applicant was represented by a registered migration agent for the purpose of the nomination application (CB 2-3).
On 5 June 2018, a delegate of the first respondent (the “Minister”) refused the nomination application on the basis that the applicant did not satisfy reg 2.72(10)(f) of the Migration Regulations 1994 (Cth) (the “Regulations”) (CB 47-49). Specifically, the delegate was not satisfied that “the position associated with the nominated occupation [was] genuine (CB 49).
On 21 June 2018, the applicant lodged an application for review of the delegate’s decision with the Administrative Appeals Tribunal (the “Tribunal”) (CB 50-51). The applicant nominated the same registered migration agent to assist with the Tribunal review (CB 51).
On 20 November 2020, the Tribunal invited the applicant (through its representative) to provide additional information in support of its application (CB 59-62). The Tribunal requested further information, as follows (CB 61):
In order for the Tribunal to approve the business nomination, it must be satisfied that all of the requirements in r.2.72 of the Migration Regulations 1994 (the Regulations) and s.140GB of the Act are met at the time of its decision.
Accordingly, the Tribunal now invites the applicant to provide, in writing, updated and current information about its business and the nominated position. Specific details about the information requested are set out in the Request for Business Nomination Information form which can be accessed by clicking on the link below. The information requested may be given to us by completing the online form and clicking ‘submit’ on the Declaration page.
On 3 December 2020, the applicant sent the Tribunal a completed “Request for information for Temporary Employer Nomination” form and supporting documentation (CB 63-207).
On 31 March 2021, the Tribunal invited the applicant (through its representative) to attend a hearing before it on 3 May 2021 (CB 208-212).
The applicant’s representative confirmed that the applicant (and its representative) would attend the hearing (CB 213-219). Further supporting material was also provided to the Tribunal ahead of the hearing (CB 225-300).
On 30 April 2021, the Tribunal advised the applicant (through its representative) that the hearing had been postponed (CB 301-303).
On 4 May 2021, the Tribunal invited the applicant (through its representative) to attend a hearing before it on 21 June 2021 (CB 304-308).
On 24 May 2021, the applicant (through its representative) confirmed that the applicant (and its representative) would attend the hearing (CB 310-315) and provided further supporting documents (CB 316-320).
On 21 June 2021, Mr Poh Choon Lee (“Mr Lee”), the director of the applicant, attended the Tribunal hearing with the assistance of the applicant’s representative (CB 322-327). The hearing was adjourned and the applicant provided further supporting documentation to the Tribunal (CB 328-376).
On 16 August 2021, the Tribunal invited the applicant (through its representative) to attend a resumed hearing before it on 1 September 2021 (CB 377-380).
On 1 September 2021, Mr Lee, the applicant’s representative and the nominee attended the resumed hearing before the Tribunal (CB 396-401). Further documentation was provided to the Tribunal following the resumed hearing (CB 402-406).
On 5 October 2021, the Tribunal affirmed the delegate’s decision refusing the nomination application (CB 410-423).
On 9 November 2021, the applicant applied to this Court for judicial review of the Tribunal’s decision. That application was amended on 19 May 2022 and is brought pursuant to s 476 of the Migration Act 1958 (the “Act”). To obtain assistance from this Court, the applicant must show that the Tribunal has fallen into jurisdictional error.
the Tribunal’s decision
The Tribunal’s decision is 14 pages long and spans 53 paragraphs. The final five pages of the decision contain extracts of relevant legislative provisions contained in the Regulations.
The Tribunal began by outlining that a delegate of the Minister had refused the applicant’s nomination application. The Tribunal noted that approval had been sought on 2 May 2017 and explained the relevant provisions of the Regulations (extracts of which were annexed to the Tribunal’s decision). The Tribunal explained that the delegate had refused to approve the nomination on the basis that the applicant did not satisfy reg 2.72(10)(f) of the Regulations. That is, the delegate was not satisfied that the “position associated with the nominated occupation was genuine” (at [1]-[3]).
The Tribunal continued:
4.The delegate was not satisfied that, in the context of the applicant's business, the majority of the tasks that the nominee is actually likely to perform align substantially with the tasks of the nominated occupation. The delegate considered the level of trade of the business in the context of considering whether there was sufficient work for the nominee to be performing the tasks of the nominated occupation on a full-time basis. The delegate noted that the size and turn-over of the business did not appear to support the position. The delegate found that the position in the nominated occupation of Motor Mechanic (General) - 321211 is not consistent with the nature of the business operated by the applicant, and that the position was not genuine.
The Tribunal noted that the applicant’s director (Mr Lee) initially appeared before the Tribunal on 21 June 2021 but that it soon became apparent that materials were missing from the Tribunal’s file. As such, the hearing had been adjourned to allow the Tribunal time to obtain materials from the Department. It was explained that Mr Lee appeared before the Tribunal for a second time on 1 September 2021 and was represented by applicant’s registered migration agent at both hearings (with that representative appearing via MS Teams from Victoria) (at [5]-[7]).
The Tribunal identified that the issue in the matter before it was whether the applicant met the requisite criteria for approval of the nomination as set out in reg 2.72 of the Regulations and s 140GB of the Act (noting that for nominations made from 23 November 2013, s 140GBA of the Act must also be met). The Tribunal also emphasised that the position associated with the nominated occupation must be “genuine” (as outlined in reg 2.72(10)(f) of the Regulations) and that, when determining whether the position was genuine, consideration would be given to whether a position had been “created only for obtaining entry to Australia for the applicant” (at [9]-[11]).
Under the heading “history of the applicant”, the Tribunal continued:
12. The Tribunal has been provided with the following documents:
a.an ASIC summary extracted on 3 December 2020 showing that the applicant was first registered on 10 May 2014 and an ABN search showing that the applicant's ABN has been active and registered for GST from 9 July 2015.
b.a Sale Agreement dated 1 July 2015 between Chris Auto Services and the applicant showing that the consideration paid for the 'fixtures, machines, tools and other equipment' was $55,000.
c.A deed of extension and variation of lease (2019 Extension) dated October 2019 between Chin Tong Foo and Siew Jong Lim as Lessors, the applicant as Lessee, and Mr Lee and Mr Khing Sang Leong (Mr KS Leong) as Guarantors.
The Tribunal then outlined the history of the applicant’s lease (as set out in the 2019 Extension) and explained that the Tribunal had obtained a Company Extract from ASIC’s database. The Tribunal then summarised the “director history” for the applicant as being (at [13]-[14]):
a. The directors of the applicant on 10 May 2014 were Mr Lee and Mr KS Leong;
b.Mr Lee and Mr KS Leong ceased to be directors on 18 March 2016, and were replaced as directors by Mr Juat Harn Tan as a sole director;
c.On 28 March 2017 Mr Tan ceased to be sole director and Mr Lee resumed being a director. From that date, Mr Lee has been the sole director of the applicant;
d.The current shareholders of the applicant are Mr Lee and Mr KS Leong, each holding 5 shares. The former shareholders of the applicant are Mr Lee and Mr Tan, each of whom has previously held 5 shares;
e.Mr KS Leong was born on 5 June 1980 and Mr Tan was born on 29 June 1986. They were both born in Malaysia, Mr KS Leong in Kuala Lumpur and Mr Tan in Perak. Mr Tan’s address in the ASIC record is [omitted], Canning Vale. Mr KS Leong’s is an address in Malaysia.
The Tribunal then outlined Mr Lee’s evidence at the Tribunal hearing (related to the history of the applicant) as follows:
(a)Mr KS Leong had “put up the capital for Mr Lee to purchase the business” (totalling $55,000) and had thus been involved with the applicant since it began (at [15]); and
(b)Mr Tan and Mr KS Leong are cousins (in that regard the Tribunal noted that they had provided the same address in some of the materials before it) (at [16]).
The Tribunal found that the applicant had been registered on 10 May 2014 with Mr Lee and Mr KS Leong as directors and that in July 2015 Mr Leong had paid the sum of $55,000 for equipment from Chris Auto Services and entered into a lease for premises at which Chris Auto Services previously operated (noting that Mr Lee and Mr KS Leong had also guaranteed those operations) (at [17]).
The Tribunal continued:
18. At the hearing on 1 September 2021 Mr Lee provided the following details:
a.He had attempted to find work as a mechanic but was unable to do so. Instead, he started working for Australia Post in November 2011. He still works there, notwithstanding his role in the operations of the applicant.
b.Chris Auto repaired his car in or around 2013 and he enquired about positions. He was told that he could not be employed as a mechanic but that there might be a possibility of him purchasing the good will and equipment of Chris Auto and running his own business.
c.Mr Lee approached Mr KS Leong to see if he would provide the capital required to purchase the good will and equipment of Chris Auto, and Mr KS Leong agreed. The deposit and balance were paid by Mr KS Leong directly to Chris Auto.
d.Mr Lee told the Tribunal that he had been a mechanic since he was 10 years old, and that he dreamed of having his own workshop. However, he also told the Tribunal that he had known since 2013 or 2014 that he would need to employ a mechanic. He had raised the possibility of the nominee coming to Australia to work for him in or around the end of 2014 or the beginning of 2015; Mr Lee was not certain of the details.
e.The Tribunal asked Mr Lee whether he had considered approaching the nominee to be his co-director/investor and Mr Lee said that he had not considered it because he didn't think that the nominee had sufficient resources to invest.
Under the heading “advertising for a mechanic”, the Tribunal noted as follows:
19.The applicant advertised for a mechanic on 30 August 2015. A gmail message to ‘[omitted]’ from ‘[email protected]’ was sent at 5.04pm on Sunday 30 August 2015 confirming the placement of an advert. It shows 'available online' until 14 October 2015. It states ‘Qualified Mechanic Wanted’ and ‘Free South Perth, WA’. It is not clear why the word ‘Free’ appears, or why the location associated with the position is South Perth. Both questions were put to Mr Lee by the Tribunal and he was unsure of the answer.
20.Mr Lee was adamant that he had paid for the gumtree advert and provided a bank account extract showing a Paypal payment of $80 made to “MSPHOTOWA” for “Advertising Services” on 7 September 2015.
The Tribunal explained that it had searched “MS Photo WA” and found a company specialising in school-related products. Further, at the hearing, Mr Lee had conceded that the transaction related to his children’s school photographs and had apologised for his error in this regard (at [21]-[22]).
The Tribunal ultimately determined as follows in this regard:
23.In any event, the applicant’s migration agent confirmed at the hearing on 1 September 2021 that the agency had been retained on 21 August 2015. That is prior to the advertisement for a mechanic being placed with gumtree.
Under the heading “starting date of the nominee”, the Tribunal continued:
24.The nomination application indicates that “Mr Leong”, the nominee, “started since May 2015”. That is not consistent with the starting dates indicated elsewhere. For example, the full-time employment agreement signed by Mr Lee for the applicant and by the nominee is dated 26 August 2015. There is also a letter described as “Employment Confirmation on 7 March 2018” which is signed by Mr Lee for the applicant which states that the nominee has been employed since 1 January 2016. The submissions of the representative for the nominee, Dr Mehta, (dated 14 June 2021) state that Mr Leong has been working for the applicant since 1 June 2016.
The Tribunal explained that the applicant’s migration agent had conceded at the first hearing (in May 2015) that the date in the nomination application was incorrect and that the correct date was 1 June 2016. The Tribunal noted, however, that the explanation did not account for the employment agreement (entered into between Mr Lee and the nominee) which was dated 26 August 2015, nor the employment confirmation (which indicated a start date of January 2016). It was noted in this regard that Mr Lee had advised the Tribunal that the nominee began work in November 2015 (prior to the lease being entered into) (at [25]-[26]).
The Tribunal found that the applicant intended to employ the nominee as a mechanic from at least 21 August 2015 (being the date of the retainer with the migration agent) and made no meaningful enquiry into alternatives (at [27]).
Under the heading “[v]iability of employing a mechanic”, the Tribunal queried why it was necessary for the applicant to employ a mechanic when there was evidence that Mr Lee wanted (and was qualified) to do the job himself. The Tribunal noted evidence that Mr Lee needed to continue to work at Australia Post because the applicant could not support paying him. The Tribunal also noted that the applicant had consistently returned an annual loss since it commenced trading in 2015 and outlined the financial records provided by the applicant for the period from 2017 to 2019 (at [28]-[30]).
The Tribunal acknowledged that the annual income of the applicant was increasing, however, so too was the total debt. Further, as the Tribunal explained, the applicant had never turned an annual profit and owed in excess of $200,000. The Tribunal also noted that in 2017 and 2018, salary and wage expenses for the applicant were $54,522 but there were no payments to associated persons. The Tribunal accepted that Mr Lee performed significant work for the applicant without being paid a salary and continues to work elsewhere to support himself (at [31]-[33]).
The Tribunal then sighted a letter from LSM Corporate Services dated 10 March 2016 (who indicated that they “act as the registered agent” for the applicant), which stated (at [34]):
“Based on the information provided, it is our opinion that [the applicant] has the financial viability to meet its obligations under the terms and conditions defined in the Migration Act”.
The Tribunal noted, however, that the correspondence also stated that LSM Corporate Services was not able to “confirm the sales or net assets of the company” as the financial information was provided by officers of the applicant (at [35]).
The Tribunal continued:
36.The Tribunal gives little weight to the opinion expressed by LSM Corporate Services that the applicant had the financial viability to maintain the nominated position as at 2016. That opinion was informed by information provided by the applicant to LSM Corporate Services and is in any event demonstrably at odds with the Company Tax Return for 2017 which showed significant losses in 2016.
37.The Tribunal enquired of Mr Lee as to the amount of and reason for his continued commitment to the applicant company when he appeared to be deriving little benefit. The Tribunal notes the genuine passion with which Mr Lee described the sacrifice he was willing to make to pursue his dream of owning a business. His commitment to making his dream come true irrespective of costs to himself is in some respects laudable. However, even with Mr Lee's substantial and unremunerated contribution, the applicant is making a loss and is unable to service its debt.
The Tribunal then considered whether the applicant was, in fact, trading insolvent. In that regard, it noted the definition of insolvency under s 95A of the Corporations Act 2001 (Cth) (the “Corporations Act”) and explained the significance of trading insolvent – not only for Mr Lee but also for any shadow director. The Tribunal noted that it was possible that Mr KS Leong may be considered a shadow director for the purpose of the Corporations Act. The Tribunal also outlined the penalties that apply for insolvent trading, noting that they can be severe (at [38]-[41]).
The Tribunal considered that the risk that Mr Lee and Mr KS Leong were taking in continuing to operate a company with no financial return (or potential for any significant financial return in the immediate future) was inexplicable. It was noted that Mr Lee had again expressed his personal satisfaction at owning and operating his own company but was unable to satisfactorily explain why it would not be better for Mr Lee to perform the role of mechanic himself (giving up his Australia Post work) if his primary goal was to own and operate his own company.
The Tribunal found as follows in this regard:
43.One obvious explanation is that Mr KS Leong, the director and bankroller of the applicant, and Mr CC Leong, the nominee, might be related.
The Tribunal then explained that, when asked if he knew of any relationship between Mr KS Leong and the nominee (who share the same surname), Mr Lee denied there was any such relationship. The Tribunal was then provided with a letter dated 6 September 2021, signed by Mr KS Leong, which provided (at [44]-[45]):
Clarification of relationship between [Mr KS Leong] & [the nominee]
This is to confirm that I, [Mr KS Leong] passport number [omitted] is not related to [the nominee] in any way. It so happened that we both have the same surname only. [The nomineee] is just an employee in CSH Auto Service & Spares Pty Ltd.
The Tribunal did not consider the statement of Mr KS Leong to be persuasive because it was not accompanied by any photographic identification or means for the Tribunal to verify the signature. Further, the Tribunal noted that even if it had accepted that the statement was genuine, no alternate explanation had been provided to explain why Mr KS Leong was “bankrolling” the applicant (which appeared to operate for the “sole or substantial benefit of the nominee”) (at [46]).
The Tribunal then noted that it had received a further letter signed by Mr KS Long, also dated 6 September 2021, which stated (at [47]):
Loss in CSH Auto Service & Spares Ptv Ltd
I, [Mr KS Leong] passport number [omitted] as the shareholder in CSH Auto Service & Spares Pty Ltd is aware that the company is making loss amounting to $208,738. I'm in no hurry to recover back the money at this period of time, but I have good faith that eventually with proper business strategies and plannings, I'm confident to recover back the money in the future.
The Tribunal continued:
48.Again, the Tribunal does not find the statement helpful. Mr KS Leong is silent as to why he is prepared to let the applicant company have an outstanding debt to him of over $200,000, what the terms of such an agreement are, whether there is any agreement allowing him to charge interest, or whether he is prepared to keep lending money to the applicant every year that it makes a loss so that it can pay its outgoings, including the salary of the nominee.
49.Mr Lee provided a statutory declaration to the Tribunal on 7 September 2021, setting out his view that the applicant business would close if it is unable to employ the nominee, because he is the front face of the business and the person to whom the customers owe their good will. With respect to Mr Lee, the applicant business is not turning a profit, has never turned a profit, and the good will on which the applicant primarily depends is that of Mr KS Leong, whose inexplicable willingness to continue to bankroll the applicant in spite of its being significantly in debt to him without any enforceable loan agreement is the only thing keeping the applicant afloat. The applicant would be in a significantly improved financial position if it ceased paying the nominee’s salary, even if there was a substantial drop in custom, which in any event has not been proved to the satisfaction of the Tribunal.
The Tribunal ultimately determined as follows:
50.The Tribunal finds that the applicant is being operated for the purpose of securing a visa outcome for the nominee. Consequently, the Tribunal finds that the position is not genuine.
On the basis of the above, the Tribunal concluded that the requirements in reg 2.72(10)(f) of the Regulations were not met and the applicant did not meet the requisite criteria for the nomination to be approved. The Tribunal affirmed the delegate’s decision refusing to approve the nomination (at [51]-[53]).
Proceeding in this court
The amended application for judicial review filed on behalf of the applicant contains one ground of review as follows:
1.The Second Respondent erred in law and committed jurisdictional error in finding (at paragraph 50 of its Decision Record, Court Book page 418) that the Applicant is being operated for the purpose of securing a visa outcome for the nominee, and that for this and no other reason that the requirements of reg. 2.72(10)(f) of the Migration Regulations 1994 (Cth) were not met, when there was no evidence in support of that finding.
The evidence before the Court includes the amended application filed on 19 May 2022, the affidavit of Mr Lee deposed on 8 November 2021, a Court Book numbering 426 pages (marked as Exhibit 1) and the affidavit sworn by Emma Elizabeth O’Flaherty sworn on 22 April 2022 (the “O’Flaherty affidavit”), which was taken as read and in evidence at the hearing of this matter. The applicant’s representative filed written submissions on 12 May 2022. The Minister’s representative filed written submissions on 25 May 2022.
Mr Pudovskis of counsel appeared for the applicant at the hearing. Ms Helsdon appeared for the Minister.
Applicant’s submissions
In oral submissions before this Court, Mr Pudovskis explained that the applicant’s position is that the Tribunal made its decision on the basis of “mere speculation” and in the absence of any evidence. Mr Pudovskis submitted that, for the Tribunal’s decision to be “sustainable”, it must be based upon “rationally probative evidence” and, in Mr Pudovskis view, that was lacking in this matter.
Whilst the amended application only includes a sole ground of review, the applicant’s written submissions break that sole ground of review into three core issues, as follows:
Issue 1: whether there was any evidence to support the Tribunal’s key factual findings;
Issue 2: whether, if the Tribunal erred, its error was material; and
Issue 3: whether the Court should exercise its discretion to grant relief.
It was further submitted that, in relation to issue one and whether the Tribunal’s key findings were supported by fact, there were four “pillars” (or four intermediate findings or inferences) central to the Tribunal’s decision which needed to be scrutinised by the Court. Mr Pudovskis then took the Court through each of the four “pillars” or “inferences” (both in written and oral submissions).
The applicant’s submissions (in relation to each pillar or inference) will be scrutinised and addressed further below.
Minister’s submissions
In oral submissions before this Court, Ms Helsdon disagreed with Mr Pudovskis’ submission that there “needs to be rational, probative evidence”, emphasising that “this is not the correct test for a no evidence finding”.
In this regard, it is noted that in written submissions (filed in this Court on 25 May 2022), the Minister submitted as follows (at [27]-[28]):
(a)to succeed on the ‘no evidence’ ground the applicant must establish that there was no evidence at all upon which the relevant findings could have been based: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356. Even a skerrick of evidence will mean that an allegation of jurisdictional error premised on this basis will fail (MZZUG v Minister for Immigration and Border Protection [2015] FCA 1151 at [59]) and evidence to support a finding is not required to be direct but may be found in material that permitted the Tribunal to reasonably infer a particular matter: Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 at [39]-[41]; and
(b)the applicant seeks to impugn four “findings or inferences” made by the Tribunal (as detailed in the applicant’s written submissions at [34]-[63] and expanded upon in oral submissions before this Court). Whilst framed as ‘no evidence’ challenges, the Minister contends that, in effect, the complaints simply represent the applicant’s disagreement with the Tribunal’s findings and its desire that the Tribunal made another finding when one may have been open to it. Such contentions invite the Court to engage in merits review and cannot be accepted: Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.
Ms Helsdon also took the Court through the four “pillars or inferences” as outlined by the applicant (both in written and oral submissions). The Minister’s submissions in this regard will be addressed below.
Issue 1: Whether there was any evidence to support the Tribunal’s key factual findings
As outlined above, the applicant takes issue with four inferences or intermediate findings made by the Tribunal. Those inferences or findings will be considered by the Court in turn.
The first inference or finding
The first pillar or inference of fact identified by the applicant relates to the Tribunal’s “implicit finding that the advertisement placed on 30 August 2015 was the first and only advertisement”. The applicant contends that this inference is incorrect and, in that regard, references the transcript of the Tribunal hearing as follows (Transcript p 15, O’Flaherty affidavit):
M:I’m more interested in the date at this stage. When did you first advertise? Did you place an advertisement in 2014? When the company was first registered in 2014, did you advertise for somebody that year?
P: I did twice. One was before.
The applicant submits that the Tribunal did not seek to clarify or reject the evidence or “otherwise cast any doubt on its credibility”. The applicant also references further transcript evidence as follows:
M: In 2017, when you advertised, how many applicants did you get then?
P: Not really a lot. Some we just… I said no it’s too much to pay.
M: When you say not a lot – 1? 5? 10? Roughly, how many applicants?
P: 3 or 4, I think.
The applicant submits that there was no evidence before the Tribunal to support an “implicit finding that the advertisement placed on 30 August 2015 was the first and only advertisement”.
The Minister, in response, submits that the Tribunal did not implicitly find that the 30 August 2015 advertisement was the first and only one placed. Instead, the Tribunal assessed the only documentary evidence before it (beyond the “unsubstantiated statement by Mr Lee at the hearing”, as referenced above) and made findings based on that evidence.
In this regard, the Court notes the Tribunal’s assessment in relation to the “advertisements” for the position of mechanic appears as follows:
19.The applicant advertised for a mechanic on 30 August 2015. A gmail message to ‘[omitted]’ from ‘[email protected]’ was sent at 5.04pm on Sunday 30 August 2015 confirming the placement of an advert. It shows ‘available online’ until 14 October 2015. It states ‘Qualified Mechanic Wanted’ and ‘Free South Perth, WA’. It is not clear why the word ‘Free’ appears, or why the location associated with the position is South Perth. Both questions were put to Mr Lee by the Tribunal and he was unsure of the answer.
20.Mr Lee was adamant that he had paid for the gumtree advert and provided a bank account extract showing a Paypal payment of $80 made to “MSPHOTOWA” for “Advertising Services” on 7 September 2015.
21.The Tribunal searched “MS Photo WA” and the search returned a WA photography company specialising in school photographs. The ‘services offered’ show exclusively school-related products. The Tribunal notes that other personal- child related items appear in the bank records produced by the applicant: $34.50 has been paid to “Educ - Vac Swim Tuart Hill” - evidently related to vacation swimming lessons for children. $78.67 has been spent at “Gumboots Booragoon”, a children's clothing store located in Garden City.
22.At the hearing, the Tribunal put the above matters to Mr Lee and invited his comment. He conceded that the $80 transaction related to his children’s school photographs and apologised for his error.
23.In any event, the applicant’s migration agent confirmed at the hearing on 1 September 2021 that the agency had been retained on 21 August 2015. That is prior to the advertisement for a mechanic being placed with gumtree.
It is clear from the above that the Tribunal had before it evidence, in the form of email messages, confirming that an advertisement was placed on 30 August 2015 and that the advertisement in that instance would “run” until 14 October 2015. It is also clear that the Tribunal put questions to Mr Lee about the details of that advertisement and that Mr Lee was “unsure of the answer[s]” to those questions. Further, Mr Lee conceded that a payment he had initially claimed was in relation to the advertisement was in fact related to “his children’s school photographs”.
Insofar as evidence in relation to any other advertisements, all that was before the Tribunal was oral evidence from Mr Lee (outlined above). In that oral evidence, Mr Lee was asked questions about the timing of his advertisements, when he first advertised and if he advertised when the company (the applicant) was first registered in 2014. In response, Mr Lee replied “I did twice. One was before”.
The Tribunal indicated that it had concerns about the advertisement itself and (arguably) about the timing of the placement of that advertisement (being just nine days after the appointment of an agent by the applicant). In the circumstances, the Tribunal had limited documentary evidence before it, and inconsistent (and, at times, inaccurate) oral evidence upon which to make findings. However, the Court is not satisfied that there was no evidence upon which the Tribunal could make those findings.
As outlined above, the applicant must prove that there was no evidence upon which the Tribunal could base relevant findings: Bond at 356. Further, even a “skerrick” of evidence will mean that an allegation of “no evidence” will fail: MZZUG at [59]. Limited evidence is thus sufficient evidence upon which a Tribunal can make findings. The Tribunal did so here. Arguably, the Tribunal inferred (reasonably) that, based on Mr Lee’s oral evidence to the Tribunal, the applicant advertised once “before”, when the company was registered (in or about 2014) and once in relation to the nominated position in August 2015.
The Court is satisfied that the first implicit Tribunal finding (being that only one advertisement was placed, in August 2015, in relation to the nominated position) was made based on the (limited) evidence before it. No error arises in this regard.
The second inference or finding
The second pillar or inference of fact identified by the applicant relates to the Tribunal’s finding that the applicant had “already decided to employ the nominee before it advertised the position” (on 30 August 2015). The applicant contends that there was no evidence upon which to so conclude.
In this regard, the Tribunal’s findings were as follows:
27.The Tribunal finds that at least as of 21 August 2015, being the date of retainer with the migration agency, the applicant intended to employ the nominee in the position of mechanic and made no meaningful enquiry into alternatives to employing the nominee.
As correctly submitted by the Minister (at [33]-[34] in written submissions filed in this Court on 25 May 2022), the finding above (at [27]) was made under the heading “[s]tarting date of the nominee” and in the context of the Tribunal’s consideration of the employment agreement between the applicant and the nominee (dated 26 August 2015) and evidence from Mr Lee that the nominee began work for the applicant in November 2015. Context matters.
Although not entirely clear (from either the applicant’s oral or written submissions to the Court), rather than suggesting that the Tribunal had “no evidence” upon which to base its findings, the applicant seems to find fault with the Tribunal’s overall conclusion.
As accurately summarised by the Minister, the Tribunal had a number of concerns with the evidence before it relating to the date the nominee commenced employment with the applicant. The Tribunal’s concerns ultimately outweighed evidence before it, including any acceptance that the applicant had advertised for the position (noting the concerns the Tribunal had, as outlined above in relation to the first inference, in relation to that advertisement).
The Court is satisfied that it was open to the Tribunal, based on its assessment of the evidence before it, to come to the conclusion it arrived at. Further, the Court does not consider that the Tribunal’s findings in this regard could be considered unreasonable or irrational or that no other rational decision maker could have come to the same conclusion: Djokovic v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 3 at [33]; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 (“SZMDS”) at [131]-[131] and [135].
No error arises in relation to the second inference or finding.
The third inference or finding
The third finding that the applicant takes issue with relates to the Tribunal’s finding that Mr Lee “chose not to be employed by the applicant because the applicant could not afford to pay him”.
Again, the applicant claims that this finding is not based on any evidence.
In this regard, the applicant references the Tribunal transcript as follows (Transcript p 11, O’Flaherty affidavit):
P:I want to keep the workshop running. I’m working at Post and in fact I was offered fulltime positions many times, which I refuse. I do not want the time and even promotions, I refuse the promotions because I was running the workshop and when I first started, when I first came here, there was no job for me as a mechanic. And then when I work at Post, I find it quite interesting and it is not using too much of my brain, actually. I just go there, a few parcels, check the scanners whatever and that’s it, I go home. The mechanic’s job is the one that is keeping me alive, you know? Because you use your head, your brain and troubleshooting diagnoses and not bad, the payment, I mean the salary.
M:I understand what you’re saying Mr Lee, but what I don’t understand then is why you’re not running the workshop.
P: I’m running the workshop. I’m still running the workshop.
M:If you weren’t employing somebody, you would be pocketing that money. You could be paying yourself $54,000 a year to run that workshop and not be working at Australia Post, or you may choose to work at Australia Post. But I’m really struggling to understanding why you say the business can employ a second person when the business can’t afford to pay you a wage.
P:I don’t exactly spend much time there, like I mention I’m going out doing services, sourcing spare parts, saving spare parts, wreckers, this and that. If I were to spend more time there – full-time there – then yeah maybe I’ll get paid but I’m not really spending much time there.
The applicant submits that these passages suggest that Mr Lee chose to work at Australia Post because he enjoyed his work there and, at no point, did Mr Lee suggest that the applicant could not afford to pay him.
The Minister in turn disagrees with the assertion that the passages cited by the applicant support any suggestion that Mr Lee chose to stay in his job at Australia Post because he liked it. The Minister submits (at [36] in written submissions filed on 25 May 2022) that these passages, at their highest, suggest that, while Mr Lee found his work at Australia Post to be “quite interesting”, he himself gave evidence that the “mechanic’s job is the one that is keeping [him] alive”.
The Minister relies on the following extracts from Tribunal transcript to support the submission that Mr Lee felt obliged to work at the applicant (without receiving a salary for doing so) in order to “turn the company around” and intended to stop working at Australia Post by the next year (Transcript pp 9-10, O’Flaherty affidavit):
M:So why are you not both working part-time? I’m having difficulty, Mr Lee, with the proposition that you are doing all this work for this company and you are not being paid for it or getting any money for it. But you’re paying somebody else to do the same job that you tell me you’re doing.
P:Yes, because that shop… Khing Sang left the thing and he almost gave it to me, so I don’t have to pay him a single cent for the shop or for the equipment, so particularly that shop off the book or whatever they call it, somehow I think it belongs to me or it falls on my shoulders, so yeah I want to turn it around. I want to give up my post job by next year.
The Minister argues that it was entirely open to the Tribunal to find as it did. In this regard, it is noted that the Tribunal found as follows:
28.It is not clear to the Tribunal why it was necessary for the applicant to employ a mechanic. The evidence of Mr Lee is that he wanted to work as a mechanic himself and was qualified to do so. His evidence is further that he has had to remain working at Australia Post in order to support himself, because the applicant cannot support paying him.
…
33.The Tribunal notes and accepts the evidence of Mr Lee that he performs significant work for the applicant without drawing any salary. The Tribunal accepts his evidence that he is working another full-time job to support himself.
…
42.The risk that Mr Lee and Mr KS Leong are taking in continuing to operate a company that provides them with no financial return and no potential for any significant financial return in the immediate future is inexplicable. Mr Lee attempted to explain it in terms of his personal satisfaction in owning and operating his own company. However, he was unable to explain to the satisfaction of the Tribunal why it would not be better for him to give up his work with Australia Post and perform the role of mechanic himself for the amount of money the applicant is paying to the nominee, if his primary drive is to own and operate his own company.
Context matters.
Under the heading “[v]iability of employing a mechanic”, the Tribunal undertook a detailed analysis of the company’s financial records (as provided by the applicant) and, ultimately, had concerns about the solvency of the applicant. In particular, the Tribunal noted that the total debt owed by the applicant exceeded any annual income made by the applicant at that point. Further, the Tribunal noted that the applicant had “never made an annual profit and owe[d] over $200,000” (at [31]).
The Tribunal also noted that in 2017 and 2018, salary and wage expenses in the amount of $54,522 were listed but there were no payments made to the director or shareholders of the applicant (at [32]), that Mr Lee was performing significant work for the applicant (without drawing any salary from it) and that he needed to work in another “full-time job to support himself” (at [33]).
Further, as outlined in the extract from the Tribunal transcript above, when the Tribunal put to Mr Lee that he was effectively “paying somebody else to do the same job”, Mr Lee told the Tribunal that he was “almost given the shop” and that it “fell to his shoulders” to keep the business going.
Contextually, in circumstances where Mr Lee told the Tribunal he needed to work to be able to support himself, the applicant was (arguably) verging on insolvent and Mr Lee was undertaking the same work that the nominee ought to be doing, it was open to the Tribunal to determined that it was “unclear” why the applicant would opt to employ another person (the nominee) rather than Mr Lee in the nominated position.
No error arises in relation to the third finding.
The fourth inference or finding
The fourth (and final) finding that the applicant raises concerns with relates to the Tribunal’s finding that Mr KS Leong was operating and “bankrolling” the applicant so as to secure a visa for the nominee.
In this regard, the applicant submits that the inference was “purely speculative”, was “based on nothing more than the fact that Mr KS Leong and the nominee have the same surname” and that “Mr KS Leong did not explain why he had apparently incurred a debt in favour of the applicant”.
The applicant further submits that there was no evidence to support the Tribunal’s finding that Mr KS Leong was operating the business rather than simply incurring a debt in relation to it. In this regard, the applicant claims that Mr KS Leong was a shareholder and guarantor of the lease and was not a director of the applicant. Further, he was living in Malaysia and had “no hands-on involvement” with the applicant.
In response, the Minister submits as follows:
41It is well established that it was for the applicant to provide its evidence and arguments in sufficient detail to enable the Tribunal to establish the relevant facts. The Tribunal was not required to make the applicant’s case for it.
42Accordingly, it was for the applicant to explain why Mr KS Leong was apparently willing to incur a debt of over $200,000 in support of the applicant, without any enforceable loan agreement, particularly in circumstances where:
42.1the applicant’s financial records showed the applicant had consistently made a substantial loss (CB 415, [30]);
42.2the total debt owed by the applicant exceeded any annual income that the applicant had so far demonstrated, the applicant had never made an annual profit and owed over $200,000 (CB 415, [31]); and,
42.3even with Mr Lee’s substantial and unremunerated contribution, the applicant was making a loss and was unable to service its debt: CB 416, [37].
The Court agrees with the Minister in this regard.
The applicant is required to present evidence and provide the Tribunal with sufficient detail to enable it to establish the relevant facts. Further, the Tribunal is not obliged to help an applicant establish his or her case: Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; WAKK v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 225; Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61 and Abebe v The Commonwealth (1999) 197 CLR 510 at [50].
The applicant did not do what was required of it here. There was no evidence or explanation provided by the applicant to the Tribunal to explain why Mr KS Leong had been and continued to financially support the applicant. In the absence of any adequate explanation (or any explanation at all) in this regard, the Tribunal was entitled to consider alternate possibilities.
The Tribunal undertook an in depth consideration of the applicant’s financial situation based on financial records provided to it (including consideration of potential insolvent trading) (at [30]-[43]) and found that Mr Lee was unable to provide satisfactory explanations for Mr KS Leong’s financial involvement with the applicant.
The Tribunal also acknowledged receipt of a statement from Mr KS Leong which stated:
Loss in CSH Auto Service & Spares Ptv Ltd
I, [Mr KS Leong] passport number [omitted] as the shareholder in CSH Auto Service & Spares Pty Ltd is aware that the company is making loss amounting to $208,738. I'm in no hurry to recover back the money at this period of time, but I have good faith that eventually with proper business strategies and plannings, I'm confident to recover back the money in the future.
Ultimately, the Tribunal found as follows:
48.Again, the Tribunal does not find the statement helpful. Mr KS Leong is silent as to why he is prepared to let the applicant company have an outstanding debt to him of over $200,000, what the terms of such an agreement are, whether there is any agreement allowing him to charge interest, or whether he is prepared to keep lending money to the applicant every year that it makes a loss so that it can pay its outgoings, including the salary of the nominee.
49.Mr Lee provided a statutory declaration to the Tribunal on 7 September 2021, setting out his view that the applicant business would close if it is unable to employ the nominee, because he is the front face of the business and the person to whom the customers owe their good will. With respect to Mr Lee, the applicant business is not turning a profit, has never turned a profit, and the good will on which the applicant primarily depends is that of Mr KS Leong, whose inexplicable willingness to continue to bankroll the applicant in spite of its being significantly in debt to him without any enforceable loan agreement is the only thing keeping the applicant afloat. The applicant would be in a significantly improved financial position if it ceased paying the nominee’s salary, even if there was a substantial drop in custom, which in any event has not been proved to the satisfaction of the Tribunal.
Without evidence from the applicant to the contrary, it was open to the Tribunal to consider the possibility that Mr KS Leong was in fact “bankrolling” the applicant and that the applicant was being operated for the purpose of securing a visa outcome for the nominee.
No error arises in relation to the fourth finding.
Issues two and three
As outlined above, the applicant’s written submissions raise the following three issues:
Issue 1: whether there was any evidence to support the Tribunal’s key factual findings;
Issue 2: whether, if the Tribunal erred, its error was material; and
Issue 3: whether the Court should exercise its discretion to grant relief.
Having found that there was evidence to support the Tribunal’s findings in relation to the first issue, the Court considers it unnecessary to assess issues two and three.
Otherwise
At times, the applicant’s written and oral submissions (though not entirely clear in this regard) claim to advance a “no evidence” argument. Arguably, however, the applicant also (at times) asserts disagreement with the Tribunal’s findings or otherwise seems to suggest that the Tribunal made “illogical” or “irrational” findings.
To the extent that the applicant is alleging that the Tribunal’s findings were illogical or irrational or that the Tribunal “could have made” an alternate finding (or one which the applicant finds preferable), the Court disagrees.
In this regard, the Court notes the findings of the High Court in SZMDS as follows:
130.In the context of the Tribunal’s decision here, “illogicality” or “irrationality” sufficient to give rise to jurisdictional error must mean the decision to which the Tribunal came, in relation to the state of satisfaction required under s 65, is one at which no rational or logical decision maker could arrive on the same evidence. In other words, accepting, for the sake of argument, that an allegation of illogicality or irrationality provides some distinct basis for seeking judicial review of a decision as to a jurisdictional fact, it is nevertheless an allegation of the same order as a complaint that a decision is “clearly unjust” or “arbitrary” or “capricious” or “unreasonable” in the sense that the state of satisfaction mandated by the statute imports a requirement that the opinion as to the state of satisfaction must be one that could be formed by a reasonable person. The same applies in the case of an opinion that a mandated state of satisfaction has not been reached. Not every lapse in logic will give rise to jurisdictional error. A court should be slow, although not unwilling, to interfere in an appropriate case.
131.What was involved here was an issue of jurisdictional fact upon which different minds might reach different conclusions. The complaint of illogicality or irrationality was said to lie in the process of reasoning. But, the test for illogicality or irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.
As outlined above, the Court is satisfied that the Tribunal’s “findings or inferences” were based on evidence the Tribunal had before it. Further, it cannot be said that the Tribunal’s findings in this matter were not open to it. While this Court might have assessed the evidence before it differently, that is not the test on review. The question the Court is required to consider is whether, on the evidence before it, the Tribunal’s conclusions are “clearly unjust” or “arbitrary” or “capricious” or “unreasonable”.
Here, the Tribunal considered the history of the applicant (at [10]-[18]), the advertisement for a mechanic which Mr Lee claimed to have paid for (at [19]-[23]), the starting date for the nominee (at [24]-[27]) and the viability of employing a mechanic (at [28]-[44]). Ultimately, after consideration of all of that information and materials before it, the Tribunal found as follows:
49.Mr Lee provided a statutory declaration to the Tribunal on 7 September 2021, setting out his view that the applicant business would close if it is unable to employ the nominee, because he is the front face of the business and the person to whom the customers owe their good will. With respect to Mr Lee, the applicant business is not turning a profit, has never turned a profit, and the good will on which the applicant primarily depends is that of Mr KS Leong, whose inexplicable willingness to continue to bankroll the applicant in spite of its being significantly in debt to him without any enforceable loan agreement is the only thing keeping the applicant afloat. The applicant would be in a significantly improved financial position if it ceased paying the nominee's salary, even if there was a substantial drop in custom, which in any event has not been proved to the satisfaction of the Tribunal.
50.The Tribunal finds that the applicant is being operated for the purpose of securing a visa outcome for the nominee. Consequently, the Tribunal finds that the position is not genuine.
The Tribunal’s approach in this regard is sound. The conclusions reached in this matter, while arguably conclusions about which “reasonable minds might differ”, are not legally unreasonable.
Further, the fact that one conclusion has been preferred by the Tribunal to another possible conclusion does not amount to an illogical or irrational finding: SZMDS at [131].
No jurisdictional error arises in this regard.
Conclusion
The application for judicial review filed on behalf of the applicant on 9 November 2021 (and amended on 19 May 2022) has failed to identify any jurisdictional error in the Tribunal’s decision dated 5 October 2021.
The application is, accordingly, dismissed.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kendall. Associate:
Dated: 9 September 2022
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