Dooley, Michael v Minister for Immigration and Ethnic Affairs
[1996] FCA 62
•21 FEBRUARY 1996
CATCHWORDS
ADMINISTRATIVE LAW - Statutory Appeals from Administrative Authorities to Courts - Migration Act - appeal against refusal to grant subclass 413 (Executive) Visa.
ADMINISTRATIVE LAW - Migration Act - Regulations - departmental guidelines used to assist decision maker - appeal on grounds of incorrect interpretation of the law - Government policy and interpretation - imposition of requirements beyond those imposed or justified by the Regulations.
ADMINISTRATIVE LAW - Migration Act - Regulations - Subclass 413 (Executive) Visa - intention to establish a company branch in Australia - consideration of viability appropriate when evaluating benefits of establishing business in Australia.
Migration Act 1958
Migration Regulations 1994
MICHAEL DOOLEY v MINISTER FOR IMMIGRATION AND ETHNIC AFFAIRS
No NG 113 of 1995
FINN J
SYDNEY
21 FEBRUARY 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 113 of 1995
)
GENERAL DIVISION )
BETWEEN: MICHAEL DOOLEY
Applicant
AND:MINISTER FOR IMMIGRATION AND ETHNIC AFFAIRS
Respondent
CORAM: FINN J
DATE: 21 FEBRUARY 1996
PLACE: SYDNEY
MINUTES OF ORDER
THE COURT ORDERS THAT:
The application be dismissed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 113 of 1995
)
GENERAL DIVISION )
BETWEEN: MICHAEL DOOLEY
Applicant
AND:MINISTER FOR IMMIGRATION AND ETHNIC AFFAIRS
Respondent
CORAM: FINN J
DATE: 21 FEBRUARY 1996
PLACE: SYDNEY
REASONS FOR JUDGMENT
This is an application under the Migration Act 1958, s476 ("the Act") for review of a decision notified to Mr Dooley ("the applicant") on 3 February 1995 which refused him a visa under s65 of the Act. The decision itself is judicially reviewable: the Act, s475(1)(c). The ground of review relied upon is that of s476(1)(e):
the decision involved an error of law, being an error involving an incorrect interpretation of the applicable law or an incorrect application of the law to the facts as found ...
The visa applied for and refused was a Subclass 413 (Executive) Visa. The essence of the challenge made to that adverse determination is that the decision-maker refused the
application on the basis that the applicant failed to meet requirements prescribed in the Department of Immigration and Ethnic Affairs' Procedures Advice Manual ("the Manual") where that Manual imposed requirements beyond those prescribed by the Migration Regulations ("the Regulations").
The Regulations
The regulation governing the visa application provides:
413.22Criteria to be satisfied at time of decision
413.221(1) The applicant meets the requirements of subclause (2) ...
(2)An applicant meets the requirement of this subclause if:
(a)the applicant intends to establish in Australia a branch of an overseas company; and
(b)the establishment of the branch will provide Australia with substantial international trade or other economic benefits.
Satisfaction of these criteria, I should note, provides only one of several possible routes to the grant of a Subclass 413 (Executive) Visa. Though not of relevance to the present applicant, there are, for example, distinct criteria relating to managers and senior executives of companies conducting businesses in this country: see e.g. the Regulations, cl 413.221(3),(4). I mention these varying possibilities because of a submission to which I will later refer on the purposes said to be served by this class of visa.
The Visa Application and the Decision Made
Put briefly the applicant's visa application was founded on the business proposal of a company established in Minnesota, USA, to incorporate an Australian subsidiary ("Supercalibrations Australia Pty Ltd") for the purpose of producing and then exporting CD-ROM disks initially to the USA and Canada and later to Europe.
In a letter dated 3 February 1995, the applicant was informed that his application was unsuccessful. He was provided with a "Decision Record" which (i) indicated that -
[i]n considering this application, the following material has been used:
.Migration Act (1958)
.Migration (1994) Regulations
.Procedures Advice Manual (PAM 3)
.Mr Dooley's file: 940780
(ii) set out the terms of the relevant regulation, the nature of the business proposal and significant parts of the Manual which enlarged on the relevant criteria contained in the Regulations; (iii) provided an assessment of the proposal and its supporting material; and (iv) concluded with the decision arrived at and the reasons for it. That decision, which is relatively brief, warrants quotation in full.
DECISION
I have assessed all the information available in connection with this application and I find that the proposal does not meet the requirements of subclause 413.221 (2).
In order to meet the requirement of subclause 413.221 (2) (a), documentation in the form of a business proposal should be able to establish that the parent company is of a size and standing that it could reasonably be expected to be involved in overseas operations. The information available in connection with this application indicates that this is not the case.
The applicant has not been able to satisfactorily demonstrate that the proposed business has the potential for being a viable operation. In accordance with policy guidelines the proposal would need to be assessed as one with such potential to meet the requirements of subclause 413.221 (2) (b). It clearly is proposed that the branch office rely financially on the resources of the parent company. However, from the information available the parent company does not have the financial resources to support the proposed branch office and operation in Sydney.
In addition, the applicant has not been able to satisfactorily demonstrate that the proposed business activity will be regular and of sufficient volume to provide Australia with worthwhile and important international trade or other economic benefit so as to meet the requirement in subclause 413.221 (2) (b) that the benefit to Australia be "substantial". The proposal does not constitute an adequate business plan, being speculative and indecisive and characterised by unsubstantiated assertions.
Therefore in accordance with Section 65 of the Migration Act, I have decided not to grant a Subclass 413 (Executive) Visa to Mr Michael Dooley.
It is clear on the face of the Decision that the applicant has been expected to satisfy requirements - e.g. the viability of the proposed business, and the volume and regularity of business activity - which are not in terms to be found in the words of subclause 413.221 (2) (a) and (b). They come, rather, from the Manual. In its language at least, the Decision owes much more to the Manual than it does to the Regulations.
The Manual, Government Policy and Departmental "Policy"
The Manual's declared object is to provide "guidelines on the provisions relating to visa subclass 413". It relates the purpose of this class of visa to Government policy in the following way:
2.1The objective of this class is to facilitate the admission of skilled senior management personnel to Australia as part of the Government's strategy to:
.improve local business practices;
.encourage the introduction and transfer of new skills and technology to Australia;
.expand export activity;
.generate employment; and
.promote and maintain good international trade relations.
I merely note here that this "strategy" is later used in the Manual to identify the types of benefit to Australia said to be envisaged by the particular regulation in issue in this application.
In its treatment of the regulation's "primary criteria" the Manual purports to provide a "policy" related commentary on those criteria which commentary, as will be seen, is of an essentially prescriptive character. The commentary provides its own piecemeal exegesis of the words of the regulation. The technique used is to highlight a word or words in the regulation and then to provide comment on them.
I have set out that commentary to the extent that it has bearing on this application. The words italicised in each instance are the ones subject to the commentary immediately following.
413.22Criteria to be satisfied at time of decision
413.221(2)(a) "intends to establish in Australia a branch of an overseas company":
1.The overseas company should be of a size and standing that it could reasonably be expected to be involved in overseas operations. ... Documentation to establish this should take the form of a written business proposal from the company which includes the following details:
.name and nationality of the parent company and the date of its establishment;
.number of offices and employees worldwide;
.copies of recent annual reports and/or financial statements, if available;
.proposed name and location of the company in Australia;
.proposed number of employees in Australia (both local and expatriate);
.amount of capital to be transferred to Australia. The amount should be in line with the company's intended activities;
.details of the applicant's proposed function in the business;
.details of the type of business to be conducted in Australia.
...
413.221(2)(b) "the establishment of the branch will provide Australia with substantial international trade or other economic benefits":
1....
2.For the establishment of the branch to "provide Australia with ... international trade or other economic benefits", it must, under policy, be assessed as having the potential to meet AT LEAST ONE of the following:
.expand local business and export activity;
.generate employment;
.introduce and transfer new skills and technology;
.improve employment and training opportunities for Australians.
...
413.221(2)(b) "the establishment of the branch will provide Australia with substantial international trade or other economic benefits":
1.Under policy, applicants are not required to name a specific dollar amount or number the expected transactions. Rather, assessment should focus on whether the applicant can demonstrate satisfactorily that the business activity will be regular and of sufficient volume to provide Australia with worthwhile and important international trade or other economic benefit (as described in paragraph 2 in the preceding guideline).
2.It should be possible to establish from the business proposal referred to in the guidelines at 413.221(2)(a) whether the benefits to Australia will be "substantial". ...
413.221(2)(b) "the establishment of the branch will provide Australia with substantial international trade or other economic benefits":
1.This requires the business proposal referred to in the guidelines at 413.221(2)(a) to be assessed as one which has the potential for being a viable operation capable of providing Australia with "substantial international trade or other economic benefits".
...
Such of the commentary as I have noted would seem to serve four purposes. These are:
(1)to provide a means for obtaining the information considered necessary for an informed decision to be made - this is the "written business proposal" requirement;
(2)to perform a strictly interpretative function where there is possible ambiguity - this occurs in the treatment given the word "substantial" in 413.221(2)(b) so as to make it referable both to "international trade" and to "other economic benefits";
(3)to relate the requirements of the regulation to Government strategy - this accounts for the view taken of the type of "economic benefit" required by the subclause; and
(4)to indicate what seem to be departmentally prescribed matters of which account should be taken or on which judgment should be made - the requirements of business viability, of business activity, and of parent company size and standing typify this.
While the particulars given in the Application for an Order of Review relate primarily to the actual effects of the fourth of these, objection was taken in argument to aspects of the second and third of the purposes noted.
It will not in fact be necessary for me to consider all of the various objections taken to the Manual insofar as its provisions are said to have contrived the decision taken in this visa application. The application before me must be dismissed if it is found that, whatever other errors may have beset the decision reached, the decision maker without operative error found on proper or available grounds that one of the requirements of the legislation had not been met. As I will indicate such a finding was made.
Before turning to the Decision I would note one matter. While it is common to refer compendiously to the Manual as if it were a statement of "policy" - and the parties here have so described its contents - I must confess that I find the omnibus use of the term "policy" in this context quite unhelpful. As I noted above, the Manual's provisions serve at least four different purposes. The assumption that case law on the relationship of policy to discretion is necessarily appropriate when considering all of these purposes is, in my view, mistaken. This, however, is not a matter on which I need enlarge here as it has no actual or potential bearing on my disposition of this application.
The Challenge to the Decision
As I have already indicated, the applicant's case is that the decision-maker, in applying the Manual's provisions to the visa application, imposed requirements beyond those prescribed by the Regulations.
The relevant regulation (clause 413.221(2)), as has been seen, requires that two requirements be met for its purposes. It is not entirely clear from the reasons given whether the decision-maker concluded that the applicant failed to satisfy both requirements. Because of observations made in her decision, it is in my view appropriate to consider separately the decision maker's - and the Manual's - treatment of each requirement.
(1) Cl 413.221(2)(a)
The second paragraph of the Decision postulates that, to satisfy the subclause, documentation "should be able to establish that the parent company is of a size and standing that it could reasonably be expected to be involved in overseas operations". The information provided was found not to show this. Seemingly, then, the requirement of the subclause was being found not to have been met.
If such is the purport of the paragraph, the error in it is palpable - though perhaps explicable given the terms of the Manual's commentary on the subclause. The subclause imposes a precise and quite limited requirement on an applicant. A particular intention and no more is required to be proved, that intention being one to establish in Australia a branch of an overseas company. The intention, doubtless, must be a genuine one. But whether its realisation is realistic or feasible, whether the parent company has the practical capacity to put it into effect, these are not matters addressed by the subclause. Neither, in my view, are they matters which it is proper to require an applicant to satisfy the decision-maker for the purposes of the subclause: they are inconsistent with the bare requirement of the subclause.
I am, in consequence, in agreement with the submissions of the applicant (i) that the decision-maker simply did not direct her mind to the actual requirement imposed by the subclause - the Manual's commentary to which she purported to adhere probably being the cause of her being distracted from her task; and (ii) that, to the extent that a positive requirement relating to the parent company was being imposed, it was beyond and not justified by the provisions of the subclause itself.
If, then, the Decision purports to make a finding on the satisfaction of cl 413.221(2)(a), it is infected with an error of law. But as I have noted the applicant is only entitled to succeed in these proceedings if the decisions reached on the second subclause are also impeachable. To this I now turn.
(2) Cl 413.221(2)(b)
The very limited nature of the requirement imposed by the first subclause would appear to cast a rather large burden on the spare language of this, the second, subclause. At bottom the question I need answer is whether it can sustain the burden asked of it in this instance.
There is something of a curiosity in the relationship of the two subclauses. Subclause (2)(a), as I have held, directs attention to the question whether there is an intention to establish a branch of a company. For its part, subclause (2)(b) appears to assume that the branch is capable of establishment and then goes on to ask the decision-maker to reach a determination as to the benefits which will flow from its establishment. One of the two bases of the decision on this subclause is founded on this assumption itself. That is the finding in the third paragraph of the Decision that the proposed business has not been shown to have the potential to be viable. It is this that I will first consider.
The Manual's commentary on the subclause (previously set out) makes the explicit assumption that, for a business to provide Australia with substantial international trade or other economic benefits, it should have "the potential for being a viable operation capable" of so doing.
The applicant, while not discountenancing that viability may in fact be an important consideration, challenges the finding made by the decision-maker on the ground that both the non-viability finding, and the basis of its making, reflected such an adherence to the requirements of the manual as resulted in a failure on her part to address the question posed by the regulation. It was submitted that the "benefits" envisaged by the sub-clause should be considered in light of the Government strategy said by the Manual to be furthered by this class of visa, and that the benefits to Australia that that strategy contemplated did not necessarily require the establishment of a viable business. It was equally submitted that to require the parent company to show it had the resources to support the branch imposed a requirement not justified by the subclause.
The respondent, for its part, submitted that in the present instance it was not suggested that this business proposal raised any issue of a benefit for Australia which did not require a viable business for its provision. In these circumstances the decision-maker in considering the business proposal and its supporting information has been directed by the Manual to consider a matter, a negative finding on which should, consistent with the subclause, result in the visa application being dismissed.
I am unable to accept the submissions of the applicant. As a matter of construction of the subclause, it seems to me that the benefits to which it refers are to be provided in consequence of the establishment of the branch. In other words those benefits will be the product of the activity of the local subsidiary. If a viable subsidiary cannot be expected to be created, the provision of those benefits likewise cannot be expected to ensue.
The stipulation in the commentary that the decision-maker assess the business proposal for viability is, in my view, an entirely proper one. As I earlier noted, the subclause appears to assume that a viable branch is capable of being established. Its language, however, does not oblige a decision-maker to ignore the likelihood in a particular instance that such is not the case. The overriding concern after all is with the provision of economic benefits to Australia. In these circumstances no objection can be taken to a requirement imposed by the Manual and adhered to by a decision-maker (a) which, if adhered to, serves to further the obvious purpose of the subclause; and (b) which, if ignored, could result in that purpose being undermined.
It has not been suggested that it was not open to the decision-maker on the evidence before her to make the finding she did on the business' potential to be viable. I would add that I do not regard the Decision, in its reference to the support to be provided by the parent company, as requiring for the purposes of this visa that the parent company have the financial resources to support the branch. That reference, in my view, refers simply to part of the factual matrix in this matter which justified the finding actually made.
It was submitted by the applicant that the concern with viability conflicted with the Government strategy which underlies this class of visa and in accordance with which the subclause should be interpreted. Here I would merely note that that strategy applies generally to this class of visa with the consequence that it cannot, and in my view should not, be assumed that each different type of application able to be made for a visa under Part 413 is, of itself, to be expected to fully provide all of the benefits sought to be obtained through that strategy. In any event, in my view, the subclause on its proper construction allows a "viability assessment" to be made.
I am, then, satisfied that in reaching her decision on this particular matter the decision-maker has not committed an error of law. Subject to one matter to which I need now to make reference, this finding would be sufficient to justify the dismissal of the application to this Court.
It is the case that the decision-maker made further reference to the applicant's inability to satisfy the requirements of the subclause. I refer to the fourth paragraph of her Decision which opens with the words "In addition".
It has been submitted by the respondent that the matter considered in that paragraph constituted a separate and independent finding and an alternative basis for the applicant's failure to meet the requirements of subclause (2)(b). The applicant, in reply, submitted that the use of the words "in addition" suggests that the finding in the paragraph was part and parcel of the whole decision-making process and that, unless I could be quite satisfied that the decision-maker would have made the decision on the basis of viability alone, I cannot treat the paragraph separately from that which precedes it.
I am satisfied that the paragraphs should be read as separate in their findings, with each independently justifying the refusal of the visa application. Considered in light of the assessment part of the decision record and of the preoccupation it reveals with the capacity of the parent company to establish the subsidiary, it seems to me an inescapable conclusion that the viability finding does, and was intended to, stand alone as a basis for refusing the decision.
Whether the finding in the fourth paragraph is free from error is, then, not a matter that I need to consider for the purpose of disposing of this application. I refrain from passing comment on it given that the proper role of the word "substantial" in the subclause was only raised at the hearing before me, with the respondent not having had the opportunity to give the matter the consideration it suggested may have been necessary.
My conclusion that the visa application was refused on a ground free from error makes it equally unnecessary for me to consider more generally the objections raised to other "requirements" said to be unwarrantedly imposed by the Manual.
I dismiss the application.
I certify that this and the preceding 16 pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.
Associate
Dated: 21 February 1996
Counsel for the applicant : L McCallum
Solicitors for the applicant : Corby Levingston
Counsel for the respondent : R Beech-Jones
Solicitors for the respondent : Australian Government Solicitor
Date of hearing : 23 November 1995
Date of judgment : 21 February 1996
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