HAN v Minister for Immigration
[2019] FCCA 3558
•11 December 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HAN v MINISTER FOR IMMIGRATION | [2019] FCCA 3558 |
| Catchwords: MIGRATION – Business Skills (Provisional) (subclass 188) visa – where applicant deposits funds in Australian bank accounts – whether funds constitute a complying significant investment within the meaning of the Migration Regulations 1994 – whether funds used to make investment are unencumbered and lawfully acquired – whether applicant provided evidence to substantiate claims – whether documentation supplied reasonably established trail of funds from source of nominated asset sales to transfer to Australia and deposit to bank accounts – applicable principles – impact of executive policy upon administrative decision making – whether reference to policy indicated decision-maker fettered in consideration of material – whether failure to consider material that was placed before the delegate – application dismissed. |
| Legislation: Migration Act 1958 (Cth), ss.31, 65, 338, 476, 498 |
| Cases cited: Abebe v The Commonwealth (1999) 197 CLR 510 |
| Applicant: | XIANGJUN HAN |
| Respondent: | MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS |
| File Number: | MLG 2221 of 2017 |
| Judgment of: | Judge A Kelly |
| Hearing date: | 3 December 2019 |
| Date of Last Submission: | 3 December 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 11 December 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr N. Poynder |
| Solicitors for the Applicant: | Erskine Rodan |
| Counsel for the Respondent: | Mr N. Wood |
| Solicitors for the Respondent: | Clayton Utz |
ORDERS
The name of the respondent be amended in the title of the proceeding to Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs.
The amended application dated 26 March 2019 be dismissed.
The applicant pay the costs of the respondent fixed at $7,464.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2221 of 2017
| XIANGJUN HAN |
Applicant
And
| MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS |
Respondent
REASONS FOR JUDGMENT
Introduction
By amended application dated 26 March 2019, the applicant seeks judicial review of a decision of a delegate of the respondent (Minister) refusing to grant him a Business Skills (Provisional) (Class EB) Business Innovation and Investment (Provisional) (Subclass 188) visa in the Significant Investor stream pursuant to s 65 of the Migration Act 1958 (Act). Criteria for a Subclass 188 visa are contained cl 188.252 of Sch 2 of the Migration Regulations 1994 (Cth) (Regulations).
For the reasons which follow, the application should be dismissed. In summary, I have concluded that the delegate did not fetter the exercise of her decision-making power by the suggested rigid adherence to an executive policy contained in a Guide to Documentation Requirements for Business Innovation and Investment Visa Applications from the People’s Republic of China (PRC). Nor do I accept that the delegate failed to consider the evidence relevant to the application. Otherwise, I discern no error in the delegate’s conclusion that she was not satisfied the applicant had met the criteria for the grant of the visa.
Background
The applicant, who is a male Chinese citizen aged 49 years, lodged his visa application on 25 November 2016. By his application, he stated that he had been invited to apply for the visa on 4 October 2016 and nominated the visa as being subclass 188 in visa application stream, Significant investor. In his visa application, the applicant stated his address to be in Manila, Philippines.
In his application, the applicant also stated that in the previous 10 years he had been Chairman of four companies in China and described his duties as entailing “overall management” of each company. The applicant also stated that, although he did not currently have any business interests in Australia:
Mr. HAN Xiangjun would like to make an investment of AUD 5,000,000 into eligible managed funds, including AUD 3,000,000 of balancing investment in Black Capital Balancing Fund, AUD 1,500,000 of emerging companies in the said one, and rest to venture capital fund Black Capital Venture Capital Fund.
By letter dated 28 November 2016, the Department acknowledged that it had received the visa application, but that it required more information. The Department provided a checklist and a detailed description of what was required. The attached checklist, entitled Subclass 188 – Business Innovation and Investment (Provisional) Significant Investor stream, addressed, amongst other things the need to provide translations of documents and described how evidence was required that “the assets proposed to be used to make the complying investment are unencumbered and lawfully acquired”.
As concerned the topic, Source of funds, the checklist identified the need to provide a declaration as to the source of funds in the applicant’s asset portfolio and that those funds had been lawfully acquired, together with evidence to substantiate the claims. The types of evidence required from the applicant were also described.
On 27 December 2016, the applicant’s migration agent wrote to the Australian Consulate-General, Hong Kong, providing documents and including an “Investment Proposal” dated 25 November 2016, in which the applicant stated:
I plan to invest AUD 5 million into below:
·AUD 5,000,000 Dollars to an Australian investment funds company of VIC Australia.
The applicant’s migration agent also provided:
a)a Citibank statement for the period 1 – 30 September 2016, sealed by Citibank on 21 December 2016, relating to an account held by the applicant and described as a Savings & Investments account. This statement recorded a variety of Products held in the account in various currencies (USD, AUD and NZD) and that the AUD equivalent balance as at 30 September 2016 was $4,427,597.32;
b)a further Citibank statement for the period 1 – 30 September 2016, also sealed by Citibank on 21 December 2016, relating to an account held by the applicant and described as a Savings & Investments account. This statement recorded that the Product held in the account was a money market term deposit and that the AUD equivalent balance as at 30 September 2016 was $3,313,200.47;
c)a document titled “Statement of Assets and Liabilities Position” dated 25 November 2016 which stated that the applicant had a total of AUD$7,740,797.79 cash on deposit.
In substance, the applicant relied upon the cash deposits amounting in aggregate to AUD$7,740,797.79 as constituting a complying significant investment for the purposes of reg 5.19C of the Regulations. As will appear, the delegate expressed concern as to whether the source of funds for those deposits had been sufficiently established in order to satisfy the criteria upon which the visa could be granted.
On 7 April 2017, the Department emailed the applicant’s migration agent requesting further information. The email invited the applicant to comment on adverse public information that he may have been involved in “unacceptable business or investment activities”. It stated that: (a) companies in which the applicant had held substantial shareholdings had applied for “bankruptcy in liquidation”; (b) the applicant had been placed on a commercial bank integrity blacklist for failing to repay RMB 30,000,000 and; (c) his interests of RMB 133,000,000 had been frozen under court order since 2013. An updated statement of assets and liabilities was also requested. The applicant submitted that the alleged unacceptable business or investment activities should be disregarded because no part of the decision under review had made adverse credibility findings against him.
By this letter, the Department also questioned the source of the funds transferred to Australia by the applicant, doing so by reference to the two Citibank accounts referred to above. It advised the migration agent that “applicants are expected to submit a signed declaration detailing how they generated/accumulated funds for their assets with evidence to substantiate the claims.” The applicant was asked to submit further information and documentation in support of the source of funds for the nominated assets and a signed declaration, noting:
. . . the trail of funds must be reasonably established with supporting evidence accounting for each step of the way.
The Department provided the migration agent with hyperlinks to both the Guide[1] and a Document Checklist.[2] It was suggested that, by following those hyperlinks, the applicant would gain assistance in collating documents required for his visa application.
[1]“Documentation Guide for Business Innovation and Investment Visa Applications from PRC residents”: “Document Checklist”:
The Department also requested that the applicant provide an updated statement of assets and liabilities, and further documentation in support of the source of the AUD$7,740,797.79 being held on deposit as cash.
On 1 May 2017, the agent replied to the Department’s request. Among the documents provided was an “Explanation letter” written by the applicant in which he stated that he only had joint and several liability respecting a company[3] and its subsidiary,[4] which were parties to legal proceedings by banks for the recovery of overdue loans. The applicant proceeded to explain his understanding of Chinese law regarding limited liability companies. In this context, he stated that the funds he had used to make his significant investment were “unencumbered and lawfully acquired”. The applicant also provided an updated statement of assets and liabilities, which listed the total value of cash on deposit as $5,922,205.66, together with a statement of the source of those funds.
[3] Hunan Eton Pipe Co Ltd.
[4] Liaoning Pipe Co Ltd.
The migration agent’s letter, which itemised the 15 categories of documents being provided, included:
a)Item 6, a “State of Source of Fund” in which the applicant described: his academic study; his employment as captain of the audit team and other offices in the Guangping County Taxation Bureau; his successful forays into entrepreneurial activity; the transfer of shares owned by him and his former spouse respectively in certain companies, and; the transfer of the proceeds of the sales of those shareholdings by foreign-exchange into Australia;
b)Item 7, a “Set of documents for capital transferred to Australia”. Those documents comprised multiple foreign-exchange records relating to transactions in the period October 2012 to April 2013 being for a variety of odd, rather than uniform, sums and copied on some 40 pages.
Equity Transfer Agreements #1 – Junan and Lanwall
As concerned those share sales, the migration agent provided two agreements, each described as an Equity Transfer Agreement, which were largely in common form and related to transfers by the applicant and his then wife of their respective shareholdings in two companies.
The applicant’s Equity Transfer Agreement dated 24 September 2012 related to the transfer of his shareholding in Hebei Junan Chemical Co Ltd (Junan), the consideration for which was stated to be RMB 30,000,000. The agreement stated that the transferee “will pay off the transferring capital RMB 30,146,852 within 12 months upon signing the agreement.” It was executed and is dated 24 September 2012.
The Equity Transfer Agreement dated 5 June 2013 related to the transfer by the applicant’s former spouse of her shareholding in Handan Lanwall Property Development Co Ltd (Lanwall), the consideration for which was stated to be RMB 20,000,000. The agreement stated that the transferor was willing to transfer her equity RMB 20,000,000, in [the company] and that the transferee “was willing to purchase the transferor[’s] . . . equity RMB 20,000,000 in [the company] with currency contribution capital RMB 20,032,326.” Somewhat curiously, although it did not expressly provide a date upon which the consideration would be payable, the agreement was expressed as coming into force upon execution by each party. The agreement was executed and records a meeting date of 5 June 2013.
Notably, each Equity Transfer Agreement provided expressly that “Both parties shall keep one copy respectively, with one for the company and one to be submitted to administration for industry and commerce for approval.” Thus, a feature of these documents was the parties’ express agreement that one counterpart would be submitted for regulatory approval. For present purposes, I treat the reference in the agreements to “administration for industry and commerce” as a reference to the PRC Administrative Bureau of Industry and Commerce (AIC).
As to these share sales, the applicant produced receipts from Agricultural Bank of China entitled Bank Card Withdrawal Business Receipt:
a)one dated 8 June 2013, for the sum of RMB 30,146,852; and
b)another dated 7 June 2013, for the sum of RMB 20,032,326.
In addition, the applicant produced two documents entitled The People’s Republic of China, Special Tax Payment Certificate of Electronic Account Transfer purportedly relating to the payment of tax assessed on the sale of shares pursuant to the respective Equity Transfer Agreements. In due course, the efficacy of those certificates would be questioned.
Upon consideration of those documents, the delegate identified, relevantly, two significant problems. First, the foreign-exchange documents that were said to establish payment of the consideration pursuant to the Equity Transfer Agreements undermined that conclusion. Secondly, translations of each Tax Payment Certificate contained the notation that certain entries in handwriting were “invalid”.
By letter dated 13 July 2017, the delegate advised the applicant that it was unlikely that he would be able to meet cl 188.252(1) of the Regulations. The letter noted that a “Complying Significant Investment” was defined in reg 5.19C and required that all funds used to make the investment must be unencumbered and lawfully acquired, and stated:
I find that there is insufficient evidence in support of your disposal of interest in Junan. You have provided a copy of business license which showed Aizhong Li, as the company’s legal representative without any official records received from the Administrative Bureau of Industry and Commerce indicating the disposal. (emphasis added)
Accordingly, the delegate informed the applicant that insufficient evidence had been provided respecting the disposal of shares in each company, and that he had failed to furnish official records that had been received from the AIC confirming the disposal of those shares.
As concerned the foreign-exchange records that had been provided by the applicant, the delegate referred to the dates of each Equity Transfer Agreement and the periods within which monies had been transferred to Australia. The delegate concluded that:
According to the foreign-exchange records . . . That funds totalled AUD 9,955,285 and AUD 2,801,671 were transferred during 10/2012 to 4/2013 and 10/2012 to 4/2013 respectively to your accounts in Westpac and Citibank. I note that the proceeds from disposal of equity interests were received in 6/2013 and that the funds transfer took place prior to receipt of the proceeds, i.e. during 10/2012 to 4/2013. As such, a finding that the transferred funds as having been sourced from the disposal is as claimed cannot be established. (emphasis added)
The delegate advised the applicant that: (1) the Equity Transfer Agreements recited that payment of the consideration for the sale of the Junan and Lanwall shares respectively was payable from June 2013; (2) the foreign-exchange records relied upon as establishing the transfer to Australia and deposit of the funds said to constitute the complying significant investment demonstrated that the multiple deposits were for amounts that had been transferred to Australia before April 2013.
The delegate seemingly passed over the circumstance that the multiple foreign-exchange records did not distinctly correlate to a single payment for the consideration paid pursuant to either of the respective Equity Transfer Agreements or the transfer of such monies to Australia or their deposit in Australia. While it may have been possible to correlate the multiple foreign-exchange transfers to the consideration payable under the respective Equity Transfer Agreements, it was for the applicant to establish this by sufficient evidence so as to satisfy the decision-maker that a trail of funds supported a complying significant investment.
In relation to each such Equity Transfer Agreement, the delegate also referred to the PRC’s Special Tax Payment Certificates. The delegate advised that the inclusion in handwriting on those certificates of the applicant’s and his former spouse’s names, and ID numbers, together with the statement printed on the certificates that “information in handwritten form is invalid” meant that the delegate was unable to accord weight to them as evidence of the disposal of their shareholdings in the companies.
For each of those reasons, the delegate advised that reg 5.19C(3) would not be satisfied and further, that if the applicant determined to proceed, his investment must satisfy cl 188.252(1) of the Regulations.
In the course of both parties’ submissions it was said that in sending this letter, the delegate had “provided natural justice” to the applicant in circumstances where it may well have been open to the decision-maker to have simply decided that the criteria for the grant of the visa were not satisfied and to have refused the application. Instead, the delegate had invited the applicant to consider whether he wished to withdraw his application or to demonstrate that he had made a “complying significant investment” which he considered met reg 5.19 C of the Regulations. The applicant adopted the latter course.
Equity Transfer Agreements #2 – Hebei Eton and Gansu Eton
The applicant retained a new migration agent, apparently blaming the earlier agent for supplying incorrect documentation. Following his appointment, on 8 August 2017 the new agent wrote to the Australian Consulate-General in terms which are considered below in relation to Ground 2. For present purposes, the letter attributed the erroneous supply of incorrect documentation to the circumstance that, during the period 2012 – 2013, the applicant had been involved in the disposal of most of his Chinese business interests and, when doing so, had transferred the monies representing the proceeds of sale out of China. Those matters were said to explain the erroneous supply of incorrect documentation relating to the sales of other business interests. To rectify the supposed errors, the new agent provided further documentation. The new documents were said to relate to transactions which correctly explained the source of funds for the deposits to the Citibank accounts being the significant investment the applicant had made in Australia.
The new agent supplied a document signed by the applicant, dated 8 August 2017 entitled Declaration of Source of Funds in which he declared that the assets listed in his statement of assets and liabilities submitted on 4 May 2017 were proposed to be used for the purposes of facilitating his subclass 188 visa application. He declared that those assets were represented by the proceeds of sale of his businesses, Hebai Eton Pipe Co Ltd (Hebai Eton) and Gansu Eton Pipe Co Ltd (Gansu Eton) on 3 December 2011 and 20 December 2011 respectively. The applicant further declared:
. . . all funds, assets are free from all claims, debts, loans, lawsuits, contingent liabilities, such as indemnities or guarantees. I also confirm that the 5 million dollar fund whether in any part or in total used in this subclass 188 visa application has not been derived directly or indirectly from any [act (sic)] or omission that may constitute an offence or as a result of or in connection with any criminal conduct . . .
In its terms, the declaration may be understood as addressing the requirements that the applicant’s complying significant investment was lawful and was not the subject of security or collateral for a loan.[5]
[5] Regulations, reg 5.19C(4).
As concerned those share sales, the new agent provided two further agreements, each being an Equity Transfer Agreement, which related to transfers by the applicant of his shareholdings in two other companies:
a)an Equity Transfer Agreement dated 3 December 2011 related to a transfer of the applicant’s shareholding in Hebei Eton, the consideration for which was stated to be RMB 94,000,000. By cl III of the agreement, it was agreed that one copy of the agreement would be submitted to AIC for approval;
b)an Equity Transfer Agreement dated 20 December 2011 related to a transfer of the applicant’s shareholding in Gansu Eton, the consideration for which was stated to be RMB 22,749,875. By cl 5.1 of the agreement, it was agreed that the agreement would be submitted to AIC for approval.
The applicant produced Special Tax Payment Certificates from the PRC, the validity of which were later accepted by the delegate.
Delegate’s decision
On 12 September 2017, the delegate made a decision to refuse to grant the visa and gave reasons for so doing (Reasons). The delegate was not satisfied that the visa application met the criteria prescribed by cl 188.252 of the Regulations because there was no evidence that he had made a complying significant investment.
In the Reasons, the delegate set out the terms of cl 188.252.
The delegate noted that the applicant’s visa application had nominated the following assets for making the complying significant investment:
Cash on deposit in Citibank a/c #9034839707 AUD4,427,597 Cash on deposit in Citibank a/c #9034840227 AUD3,313,200
The delegate recorded that the applicant had been requested to provide information/documentation in support of the source of funds for those nominated assets, together with a declaration respecting the method by which those funds had been transferred to Australia (and supporting documentation including relevant transfer records and bank statements).
The delegate referred to the adverse information that had been put to the applicant, the opportunity given to him to address those matters and later noted the applicant’s response in relation to those matters.
The delegate also provided a table of the applicant’s assets as drawn from his revised statement submitted to the Department on 4 May 2017:
Cash on deposit in Citibank AUD366,814 Cash on deposit in Citibank USD3,382,444 Investment in Citibank USD98,640 Cash on deposit in Westpac AUD2,055,391 Cash on deposit in Westpac USD600,000 Couple select deposit in Westpac AUD500,000
The delegate recorded the history of the visa application as concerned the supply of documentation relating to both Junan and Lanwall, and that where funds representing the proceeds of sale were relied upon in relation to a complying significant investment, applicants were required to “submit official records retrieved from” the AIC in support of the disposal, bank records showing the transfer of the proceeds received and evidence of tax paid on a transfer of the shareholdings. Although this statement was made in relation to the share sales in Junan and Lanwall, the applicant relied upon this statement in relation to Ground 1. The applicant’s essential complaint was that by imposing a requirement to submit official records relating to the sales of shares that had been retrieved from the AIC, the decision-maker’s consideration of the visa application had been impermissibly fettered.
The delegate found that the applicant had submitted insufficient documentation to demonstrate the disposal and proceeds received from Junan and Lanwell were as the applicant had claimed, because:
a)no documents retrieved from the AIC had been provided;
b)despite the tax payment certificate being a computer-generated document, it also contained handwritten remarks regarding payment of individual income tax on the transfers; and
c)according to foreign exchange records, funds totalling AU$9,955,285 and AU$2,801,671 were transferred to the applicant’s bank accounts between October 2012 and April 2013 when the proceeds from the disposal of equity interest in the companies were supposedly received on or after June 2013.
The delegate then noted the applicant’s response to the Department’s letter dated 13 July 2017 and that the applicant’s newly appointed migration agent had referred to a second source of funds for his complying significant investment, including that the funds were now said to have been sourced from the sale of the applicant’s interests in Hebei Eton and Gansu Eton in December 2012. The delegate recorded the explanation which had been provided for the erroneous supply of documentation unrelated to the Citibank deposits as follows:
You also advised by your agent that during 2012 and 2013, you were busy disposing your business ownership in the PRC and transferred a significant part of the funds from business disposal out of the country. As such, you had mixed up the funds from the different sale of your businesses in your previous response to source of funds.
As with the applicant’s sale of Junan and Lanwell shares, in relation to the sales of shares in Hebei Eton and Gansu Eton, the delegate found:
a)no documents retrieved from the AIC had been provided;
b)although bank transfer slips for two fund transfers totalling RMB 8,412,533 had been provided (and a tax certificate lent support to the claim that those funds were from the disposal of Hebei Eton), it did not contain information on the amount of the proceeds received from the respective sales; and
c)relevant bank records demonstrating the transfer of funds from the applicant’s Chinese bank account to his Australian bank account were not provided, so it could not be found that the funds in the applicant’s Australian bank account originated from his disposal of shares in Hebei Eton or Gansu Eton.
The delegate was not satisfied that the applicant had supplied sufficient documentary information to establish the trail of funds from the sale of shares in Hebei Eton or Gansu Eton. According to the delegate, there was not sufficient supporting evidence accounting for each step from payment of the consideration, assessment and payment of tax, or the transfer to Australia and deposit of the funds which was necessary to establish the making of a complying significant investment.
The delegate concluded that on all of the information submitted by the applicant, there was insufficient evidence that the nominated funds were sourced from a disposal of shares in Hebei Eton or Gansu Eton. Having considered all of the evidence, the delegate was not satisfied that the applicant had demonstrated “with acceptable evidence that the nominated funds were sourced from disposal of your ownership in Hebei Eton and Gansu Eton as claimed.” The delegate could not find that the applicant had funds of at least $5,000,000 that were unencumbered and lawfully acquired for the purposes of making a complying significant investment.
As cl 188.252 was not satisfied, the delegate found that the criteria for the visa were not satisfied and refused the application.
It was common ground that the delegate's decision was not a decision amenable to review under Part 5 of the Act.[6] In those circumstances, the applicant sought judicial review in this court.
[6]Act, ss 338, 476.
Procedural history
On 16 October 2017, the applicant filed an application for judicial review of the delegate’s decision together with an affidavit affirmed by the applicant’s solicitor to which she exhibited a copy of the delegate’s Reasons but adduced no further evidence in support of the application for judicial review.
By a Response filed on 8 November 2017, the Minister opposed the application on the stated basis that the delegate’s decision was not affected by jurisdictional error.
On 26 June 2018, orders were made, by consent, listing the matter for final hearing. Orders were made affording the applicant opportunities to file any amended application, affidavits and submissions.
On 26 March 2019, the applicant filed an amended application by which he maintained Ground 1, deleted Ground 2 and inserted a substituted Ground 2, which was informed by new particulars.
On 19 November 2019, an affidavit was filed on behalf of the Minister to which was exhibited a series of documents that had been uploaded by the Minister’s solicitor from a compact disc containing an electronic copy of the Departmental File related to the visa application. The affidavit was tendered without objection.
The deponent to the affidavit exhibited a copy of the Department’s email transmitted to the applicant’s agent on 7 April 2017 and deposed that, by reference to hyperlinks provided in that email, the deponent had located a copy of the Guide and the Document Checklist. The deponent gave evidence that each of those documents had been accessible via those respective hyperlinks as supplied to the applicant on 7 April 2017.
Applicable principles
The process of judicial review is not an appellate procedure enabling a general review of the decision or the substitution of a decision which the court may consider ought to have been made. The jurisdiction, being supervisory, is to quash a decision on established grounds, the most important of which is jurisdictional error,[7] and, where appropriate, to order that the matter be remitted and reconsidered according to law.
[7]Craig v South Australia (1995) 184 CLR 163, 175 (Brennan, Deane, Toohey, Gaudron and McHugh JJ).
The regulations may prescribe criteria for visas of a specified class.[8] Clause 188 in Sch 2 of the Regulations provided a criterion for a Business Innovation and Investment (Provisional) visa. The power to grant or refuse the visa pursuant to s 65 of the Act was to be exercised in accordance with the applicable regulations,[9] and thus, upon cll 188.2 (Primary criteria) and 188.25 (Criteria for Significant Investor Stream).
[8] Act, s 31(3).
[9] Act, s 498(1).
By cl 188.251, a criterion for the visa, which was not in issue, is that the applicant has been invited, in writing, by the Minister to apply for the visa. Further, cl 188.252 reads:
(1)The applicant has made, on or after the time of application, a complying significant investment (within the meaning of regulation 5.19 C as in force at the time of application) of at least AUD 5 000 000;
(2)The applicant has a genuine intention to hold the complying significant investment for at least 4 years.
For the purposes of subclass 188, cash on deposit is (subject to presently immaterial qualifications), one form of eligible investment: cl 188.112.
While only three of its provisions (reg 5.19C(1), (3) and (4)) are of direct relevance to the present application, it is instructive to have regard to the whole of reg 5.19C, if only to gain an appreciation of the prescriptive nature of its requirements. Clause 5.19C reads:
5.19C Complying significant investment
Definition
(1)An investment by a person (the investor) is a complying significant investment if all of the requirements of this regulation are met.
(2)If an investment (the overall investment) is based on one or more other investments, this regulation (and any instrument under sub regulation (6)) applies equally to the overall investment and each investment on which the overall investment is based period
Investment requirements
(3)All funds used to make the investment must be unencumbered and lawfully acquired.
(4)The investment, and the means by which the investment is made:
(a)must be lawful; and
(b)must not form the basis for security or collateral for a loan.
(5)The investment, and the means by which the investment is made:
(a)must be of a kind permitted by the requirements specified in an instrument under subregulation (6); and
(b)must comply with any requirements specified in an instrument under subregulation (6).
(6)The Minister may, by legislative instrument, specify requirements for the purposes of subregulation (5).
Investment switching periods
(7)Subregulation (8) applies in relation to a period (the switching period):
(a)beginning when the investor withdraws funds from the investment, or cancels the investment; and
(b)ending when the invest or reinvest the withdrawn funds, or the funds used to make the cancelled investment.
(8)if the switching period is of no more than 30 days’ duration, the investment is taken not to have ceased to be a complying significant investment during the switching period only because of the event mentioned in paragraph (7)(a).
Investor requirements
(9)The investor must be an individual.
(10)The investor must make the investment:
(a) personally; or
(b) with the investor’s spouse or de facto partner; or
(c) by means of a company that has issued shares and in which:
(i) the investor holds all of the issued shares; or
(ii) the investor and the investor’s spouse or de facto partner holds all of the issued shares; or
(d) by means of a trust to which the following applies:
(i) the trust is lawfully established;
(ii) the investor is the sole trustee or the investor and the investor’s spouse or de facto partner are the sole trustees;
(iii) the investor is the sole beneficiary or the investor and the investor’s spouse or de facto partner are the sole beneficiaries.
By s 65(1)(b) of the Act, an administrative decision-maker, upon considering a valid application, is obliged to refuse to grant a visa if not satisfied that the criteria prescribed by the Act or Regulations have been satisfied. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang,[10] the plurality considered the true nature of the Minister’s decision-making function under the Act as being conditioned upon achievement of the state of satisfaction for which s 65 provides. The achievement of that state of satisfaction is to be distinguished from a process of making findings of fact.
[10] (1996) 185 CLR 259, 274-5.
In Minister for Immigration and Multicultural and Indigenous Affairs v VSAF of 2003,[11] Black CJ, Sundberg and Bennett JJ affirmed that “In the absence of that satisfaction, the section requires the delegate to reject the application” and that “As s 65 and Wu Shan Liang make clear, the section requires a visa to be rejected in the absence of a positive finding of satisfaction.” The process of achieving satisfaction is necessarily evaluative and requires the decision-maker to decide, upon the materials and arguments before him or her whether the claim has been made out.[12]
[11] [2005] FCAFC 73, [16]-[17].
[12]Abebe v The Commonwealth (1999) 197 CLR 510, [187]; Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431, [38].
Although it concerned a different type of visa, in Minister for Immigration and Multicultural and Indigenous Affairs v Lay Lat,[13] Heerey, Conti and Jacobsen JJ affirmed that Wu Shan Liang and VSAF made clear that s 65 requires an administrative decision-maker “to refuse to issue a visa in the absence of a positive finding of satisfaction.” While that principle was stated in the context of a “no evidence” issue, one criterion for the Business Skills visa was that the Minister was “satisfied, based on the evidence provided by the applicant, that the funds invested were”, relevantly, legally owned by the applicant and unencumbered.
[13] (2006) 151 FCR 214. [72]-[73.
Relatedly, just as the requirements of s 65 of the Act are expressed in terms of whether the administrative decision-maker is satisfied that the criteria for a visa have been met, it is accepted that the decision-maker is not necessarily obliged to make findings of fact addressing each and every aspect of an applicant’s claim.
In VSAF,[14] the court held that there were many cases showing that findings of fact were not necessarily required to support a state of non-satisfaction. By way of illustration, it referred to a number of authorities and accepted that, where claims were at “such a general and vague level that the Tribunal cannot establish the relevant facts” it was entitled to have made no findings either accepting or rejecting the claims.
[14] [2005] FCAFC 73, [17].
Again, in Lay Lat, the Full Court accepted that there were many cases in which findings of fact were not necessarily required to support a state of non-satisfaction. Herrey, Conti and Jacobson JJ and agreed that “s 65 of the Act requires a refusal if the decision-maker is not affirmatively satisfied that the criteria for the visa in question have been satisfied.”[15]
[15] (2006) 151 FCR 214, [73].
In Minister for Immigration and Border Protection v Gill,[16] Moshinsky, Charlesworth and Lee JJ, citing Lay Lat, held that a decision to refuse to grant a visa under s 65(1)(b) did not require an administrative decision-maker to make findings of fact. Their Honours stated:
More specifically, the Tribunal was under no obligation to make findings of fact consistent with each and every aspect of the competing narrative alleged by the informant(s).
[16] [2019] FCAFC 9, [49].
VSAF, and the cases cited above emphasise that for the purposes of s 65 of the Act, the grant or refusal of a visa application depends upon an administrative decision-maker achieving a requisite state of ‘satisfaction’ rather than necessarily making findings of fact, in particular, where the claims or evidence are framed in vague or generalised terms.[17]
[17]Cf Minister for Immigration and Border Protection v SZVFW (2018) 357 ALR 408, [152] (Edelman J).
Further, it is settled that, because the administrative process is essentially inquisitorial “it was for the respondent to put whatever evidence or argument he wished to the decision-maker to enable her to reach the requisite state of satisfaction.”[18] This opportunity is to be afforded, and applies, to an applicant for a Significant Investment visa in the same way as it applies to any other visa applicant.
[18]Abebe v Commonwealth (1999) 197 CLR 510, [187] (Gummow and Hayne JJ); Lay Lat, supra (2005) 151 FCR 214, [76]; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 151, [40] (The Court).
PRC guidelines
As appears below, Ground 1 requires consideration of the terms of the Guide to Documentation Requirements for Business Innovation and Investment Visa Applications from the People’s Republic of China (PRC), dated September 2015 (Guide). It was to this Guide that the Department drew the applicants attention on 7 April 2017. No challenge was made to the Minister’s evidence establishing that the Guide and the associated Document Checklist were each accessible via the hyperlinks which had been supplied to the applicant’s agent on that date.
The Guide is a document running to some 40 pages and 199 paragraphs.
The introduction to the Guide stated that its aim was to provide guidelines on documentation requirements for Business Innovation and Investment Visa applications lodged by applicants from the PRC.[19] It provided by way of background, that in the face of the complexity of PRC business regulations, the compilation of a guide on business and asset ownership documentation was considered to be of use so as to assist in the preparation of Business Skills applications from the PRC.[20] It further stated that the information contained in the Guide reflected the “outcomes of wide-ranging consultations with relevant government officials, legal and accounting professionals and the experience gained by this office in the handling of this caseload.” [21]
[19] Guide, cl 1.
[20] Guide, cl 7.
[21] Ibid.
The Guide provided that it applied to persons applying for a subclass 188 visa, including those applying via the Significant Investor stream,[22] and stated that, while one of its purposes was to “offer suggestions on a range of documents considered acceptable to this office, the list is by no means exhaustive or mandatory”. It further stated that:[23]
In circumstances where applicants do not have the necessary supporting documentation, a signed statement outlining the reason(s) is required. Alternative evidence . . . may be acceptable.
[22] Guide, cl 149.
[23] Guide, cl 154.
Clauses 149 – 188 of the Guide addressed the topic, Significant Investor Visa and discussed issues of specific relevance to subclass 188 visa applications in the Significant Investor stream.[24] Information was provided in relation to, relevantly: (a) financial documentation, including the tax implications respecting assets located in the PRC;[25] (b) taxation issues;[26] (c) net assets documentation, including that relating to cash on deposit;[27] (d) source of funds;[28] (e) the preparation of a statement of assets and liabilities with attention being drawn to the use of the correct form;[29] (f) the details that were required where cash on deposit[30] was being relied upon for the purposes of satisfying the criterion of a complying significant investment (CI).[31]
[24] Guide, cl 149.
[25] Guide, cll 75-83.
[26] Guide, cll 102-106.
[27] Guide, cll 107-114.
[28] Guide, cll 115-118.
[29] Guide, cll 154-155.
[30] Guide, cll 163-165.
[31] Guide, cl 153.
As concerned the Source of Funds for Assets Nominated to Make a CI, the Guide addressed seven topics together with the issue, Fund Transfer,[32] and stated that applicants were expected “to submit a signed declaration detailing how they generated/accumulated funds for their asset portfolio and capital investment, with evidence to substantiate their claims.”[33] The first topic addressed Income from business. As concerned funds that had been sourced from the proceeds of business ownership, the Guide stated:[34]
Where the applicant’s funds are sourced from the proceeds of business ownership disposal, applicants should submit official records retrieved from the AIC indicating the disposal, bank records showing the transfer of the proceeds received and evidence of tax paid on the capital gain on transfer of their shareholding where the appreciation in the value of their shareholding as compared with their original investments is exceptionally large.
[32] Guide, cll 170-188.
[33] Guide, cl 170.
[34] Guide, cl 173 (emphasis added).
As concerned the topic, Fund Transfer, the Guide stated:[35]
Applicants will need to submit documentary evidence to demonstrate that the funds ultimately available to make the CI are originated from the assets nominated to make the CI which have been assessed as lawfully acquired and unencumbered. The trail of funds must be reasonably established with supporting evidence accounting for each step of the way. Applicants should therefore keep all records involved in the transfer/exchange of funds. For the sake of clarity, it is advisable that the number of transactions be kept to a minimal (sic).
The Guide referred to an application checklist (that was also provided).[36]
[35] Guide, cl 186 (emphasis added).
[36] Guide, cl 199.
Executive policy
The use or application of an executive policy which does not have legislative force may be a factor in administrative decision-making. The nature of executive policy as expressed in a document such as the Guide was considered in detail in G v Minister for Immigration and Border Protection,[37] where one ground of review was that a Tribunal had inflexibly applied an executive policy, thereby confining itself to consideration of whether the criteria in the policy – as distinct from the criterion prescribed by the Act or Regulations – were satisfied.[38]
[37] [2018] FCA 1229, (Mortimer J).
[38] [2018] FCA 1229, [34], [127].
Mortimer J considered, in detail,[39] the role of executive policy in the discharge of the statutory function of administrative decision-making. Her Honour noted that, notwithstanding the document mirrored (i.e. projected the appearance of) a legislative instrument, its contents were, and remained, an expression of executive policy. [40] Her Honour considered the role of executive policy to be important to the evaluation of whether an administrative decision was tainted by jurisdictional error.
[39] [2018] FCA 1229, [139]-[216].
[40] [2018] FCA 1229, [139]-[140].
Mortimer J recognised that a distinction should be drawn between those cases in which a policy, being expressed in general terms, served to invite consideration of the relevant circumstances and left unaffected, the discretion which fell to be exercised, and cases where an executive policy, having been framed in highly prescriptive terms, was more likely “to encourage decision-makers to feel compelled to adhere to each part of it, follow its structure with strictness and approach the policy as if it formed part of the statute.”[41]
[41] [2018] FCA 1229, [200].
When seeking to discern a dividing line amongst the various ways in which the use of an executive policy might be characterised as lawful or unlawful, Mortimer J identified the following:[42]
·A decision must not be “so truncated by a policy as to preclude consideration of the merits of specified classes of cases”;
·A decision-maker must not “abdicate” her or his exercise of power to the terms of a policy;
·The policy should not “superimpose” a requirement or requirements that prevent a decision-maker from being satisfied of matters set out in the statute;
·The policy should not create a requirement or guideline that has an arbitrary character, in the sense of not being able to be justified or understood by reference to the statutory power in its context; and
·A policy statement should not be applied so as to prejudice a Tribunal’s independent assessment of the merits of the case.
[42] [2018] FCA 1229, [201] (footnotes omitted).
Upon those principles, Mortimer J held that an administrative decision-maker could not avoid performing its task without undertaking an active intellectual consideration of all of the material before it in a fulsome way and that, in the course of such decision-making, executive policy should not be applied rigidly, uncritically or in a such a manner as to effectively dictate the result of the application.[43]
[43] [2018] FCA 1229, [266].
Her Honour cautioned that where the reasons of the decision-maker were structured entirely around the framework of an executive policy, this may suggest that the decision had been arrived at upon a limited consideration of the matter which, in turn, may support a conclusion that the decision-maker had abdicated their core function of assessing an application upon the applicable legislative criteria.[44]
[44] [2018] FCA 1229, [266]-[269].
The parties commended the decision to me in general terms and I consider the analysis in G, supra to be of considerable assistance. Surprisingly, neither of the parties referred me to the appeal from that decision or its result: Minister for Home Affairs v G.[45] Although an appeal was allowed, of more immediate importance is that the Full Court’s statements of principle accorded with those of Mortimer J.[46]
[45] (2019) 367 ALR 49 (Murphy, Moshinsky and O’Callaghan JJ).
[46] (2019) 367 ALR 49, [58]-[62].
Consideration
The amended application for review contained two grounds of review.
Ground 1 – fetter on exercise of power – the Guide
Ground 1 reads:
The respondent's delegate impermissibly applied a policy to fetter or constrain the formation of her state of satisfaction as to whether the applicant satisfied subclause 5.19C(3) and subclause 188.252(1) of the Migration Regulations; namely, whether the applicant's funds for the making of his complying significant investment were unencumbered and lawfully acquired.
Particulars
(a) The delegate (p 4 of the decision) erroneously considered that, "Where funds are sourced from the proceeds of business ownership disposal, applicants are required to submit official records retrieved from the Administrative Bureau of Industry and Commerce (''AIC'') in support of the disposal, bank records showing the transfer of the proceeds received and evidence of tax paid on transfer of shareholding".
(b) The delegate erroneously considered herself bound to find that the applicant did not satisfy subclause 5.19C(3) and subclause 188.252(1) of the Migration Regulations because he had not provided the evidence referred to in the particular (a), despite other evidence which had been provided by the applicant of the source of funds for his complying significant investment.
It is important to recognise how Ground 1 was being advanced. As importantly, it is necessary to recognise what was not being put.
No submission was made as to whether power was conferred by the Act to issue the Guide or that it was otherwise unlawful.[47] The present case may be distinguished from G v Minister for Immigration and Border Protection inasmuch as that decision concerned consideration of the factors which rendered an executive policy unlawful, such as by: controlling the exercise of discretion; determining in advance the decision to be made; imposing broad and binding rules; according determinative status to any single factor; denying the ability of countervailing factors to be brought into account, or; prescribing the weight to be accorded to particular factors. As to this Mortimer stated:
The boundary is clear: policy is not to become a rule of law. The statute is the expression of the rule of law. Executive policy cannot, in form or more importantly in substance, be perceived by decision-makers as, or operate as, a rule. In determining whether a particular policy crosses this boundary, a court must have regard not only to the language of the policy but, in my opinion more critically, to its structure and content. Even if a policy contains a qualification such as that contained in Green, or the Citizenship Instructions, is it really the case that the structure and content of the policy is such that the impression conveyed to decision-makers is that they are to treat the policy as a rule or a set of rules? These matters can be objectively determined. Although one option is to examine an individual exercise of power to see if the decision-maker has erred in treating a policy as a rule which must be followed in the particular exercise of power, for a court to limit its approach to that option may be to fail to grapple with the real difficulty – the nature of the policy itself.
[47] CfG v Minister for Immigration and Border Protection [2018] FCA 1229, [34], 139.
It was also not said that the Guide purported to tell decision-makers as to how they were ‘usually’ to exercise their discretion.[48] Nor was it submitted that the delegate had misunderstood or misconstrued the policy in a way that was material to the exercise of its power.[49]
[48] Cf G, supra [46]-[47].
[49] Cf G, supra [2018] FCA 1229, 204.
The applicant’s complaint under Ground 1 was confined to a contention that the decision-maker had impermissibly fettered the function of assessing whether the criterion prescribed by cl 188.252(1) of the regulations by the application of the Guide.
I do not accept that the delegate was fettered in the manner suggested.
Upon the principles stated above, the delegate was required to refuse to grant the applicant a visa unless positively satisfied that the applicant satisfied the criterion in cl 188.252 that the applicant had made an investment in Australia of at least $5,000,000 and that all funds used to make the investment were “unencumbered and lawfully acquired”.[50] I accept the Minister’s submission that, conversely, in deciding to refuse to grant a visa application, it was not necessary to be positively satisfied that the applicant had not made such an investment.
[50]Counsel for the Minister cited, e.g., SJSB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 225, [15]; Minister for Immigration and Multicultural Affairs v Lay Lat (2006) 151 FCR 214, [72]-[74].
The Minister correctly submitted that there was no issue in principle with the formulation of guidelines for decision-making, especially where delegates were being asked to make assessments about matters turning on foreign law and practice. As was observed earlier, the Guide was formulated following “wide ranging consultations with relevant government official, legal and accounting professionals”. I also accept that, more generally, the use of guidelines in these circumstances is desirable because it “promote values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike.”[51]
[51]Counsel for the Minister cited: Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173, [54]; R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177, 201 (Menzies J), 205 (Windeyer J); Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54, 83 (Mason J), 116 (Aickin J); Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 639 (Brennan J); Nevistic v Minister for Immigration and Ethnic Affairs (1981) 51 FLR 325, 334 (Deane J).
So too, reference to policy is clearly of assistance to decision-makers in making judgments about the kinds of evidence that are considered to be reliable in making assessments including, for example: as to the genuineness and legality of business transactions; whether assets are encumbered, and; what may constitute an acceptable documentary trail between monies sourced in one country and those deposited in another. By way of comparison, in an Australian context (and although some jurisdictions have moved to electronic registers), there could be nothing objectionable in suggesting a requirement that a party produce a certified copy title or share certificate, mortgage or other encumbrance. Why should any lesser evidence be considered acceptable where more reliable evidence was readily available? In a similar vein, each of the four Equity Transfer Agreements expressly provided for them to be submitted to the AIC for approval. By extension, the requirement of the Guide did little more than ask the applicant to demonstrate that the agreement had in fact been so submitted and approved and to do so by retrieving such records from the AIC and supplying them as part of the evidence to establish a documentary trail to the making of what was contended to be a complying significant investment in Australia.
I accept that where an executive policy has been inflexibly applied, this would impermissibly fetter a delegate in the discharge of the function of considering whether the criteria for the visa were met. In G, supra, Mortimer J recognised[52] that the inflexible application of an executive policy may ground jurisdictional error. As her Honour also recognised, such an argument had been run and lost in Plaintiff M64/2015 v Minister for Immigration and Border Protection.[53] There, French CJ, Bell, Keane and Gordon JJ observed that:[54]
Policy guidelines like the priorities policy promote values of consistency and rationality in decision‑making, and the principle that administrative decision‑makers should treat like cases alike. In particular, policies or guidelines may help to promote consistency in “high volume decision‑making”, such as the determination of applications for Subclass 202 visas. Thus in Re Drake and Minister for Immigration and Ethnic Affairs (No 2), Brennan J, as President of the Administrative Appeals Tribunal, said that “[n]ot only is it lawful for the Minister to form a guiding policy; its promulgation is desirable” because the adoption of a guiding policy serves, among other things, to assure the integrity of administrative decision‑making by “diminishing the importance of individual predilection" and "the inconsistencies which might otherwise appear in a series of decisions”. The subjectivity of the evaluation by a decision‑maker in a case such as the present highlights the importance of guidelines. The importance of avoiding individual predilection and inconsistency in making choices between a large number of generally qualified candidates by the application of the open‑textured criterion of “compelling reasons for giving special consideration” is readily apparent.
Gageler J substantially agreed with those propositions;[55] see also Minister for Home Affairs v G.[56]
[52] [2018] FCA 1229, 211-216.
[53] (2015) 258 CLR 173, [52].
[54] (2015) 258 CLR 173, [54] (footnotes omitted, emphasis added).
[55] (2015) 258 CLR 173, [62].
[56] (2019) 367 ALR 49, [61].
Further, the Minister properly accepted that mere consistency with an executive policy was insufficient to ensure lawful decision-making. It was also accepted that adherence to a guideline that was incompatible with a legislative scheme may give rise to jurisdictional error. However, such incompatibility was not being suggested. And it was not submitted that the Guide was in any respect inconsistent with the Act or Regulations or otherwise unlawful.[57] Relevantly, it was not suggested that there is anything in the Guide suggesting that it imposed inflexible rules of evidence. Rather, implicit in the Guide is a proposition that, as concerns certain transactions, the provision of official records that had been retrieved from the AIC was to be preferred as being reliable evidence and that other evidence may not be so. There will be occasions where the provenance of a document which, although capable of being obtained from many places, will be important.
[57] Cf Minister for Home Affairs v G (2019) 367 ALR 49, [62].
Contrastingly, it was also correctly submitted that if a guideline was consistent with the legislative scheme, an administrative decision-maker would not err by making an evaluative judgment that reflected such guidance.[58] However, there will be cases in which the structure of a decision-maker’s reasons will be important to the evaluation of whether it is tainted by jurisdictional error. As noted, where executive policy is in issue, decisions which are elaborately or entirely structured upon – ie largely mirror – an executive policy, such a direct and entire application may expose the reasons as being essentially formulaic and as not involving the consideration of the quite distinct and relevant criterion contained in the applicable provision of the Act or Regulation respectively.[59] So too, the mere incantation of the obligation to apply a policy unless there are cogent reasons not to do so, coupled with the statement that this obligation has been observed will not immunise the given reasons from scrutiny on this ground.[60]
[58]Counsel for the Minister cited, e.g., Surinakova v Minister for Immigration, Local Government and Ethnic Affairs (1991) 33 FCR 87, 98 (Hill J); Bread Manufacturers of NSW v Evans (1981) 180 CLR 404, 418 (Gibbs CJ), 429 (Mason and Wilson JJ).
[59]Cf G, supra [2018] FCA 1229, [120]-[121], [164]; Drake, supra (1979) 24 ALR 577, 634.
[60] Ibid.
Upon no objection begin taken to the Minister’s affidavit, it was accepted that the policy referred to by the delegate was the Guide and that it constituted an executive policy. As stated in Plaintiff M64/2015 (and in many decisions before and since), the issue of guidelines may help to promote consistency in high volume decision-making.[61] In my view, here, the Guide bore the open textured features of executive policy that informed prospective applicants and, as importantly, those who advised them, of the matters which would be of importance in the evaluation of a visa, including under the Significant Investor stream.
[61] Plaintiff M64/2015 supra (2015) 258 CLR 173, [54], [62].
When evaluating the reasoning, the court will consider whether the decision-maker engaged in an active intellectual process, paying proper regard to the relevant criteria.[62] When doing so it will not scrutinise those reasons with an eye keenly attuned to error.[63] When doing so, those reasons must be read fairly. These principles serve as reminders of the nature of administrative decision-making, particularly in an environment where a high volume of applications are submitted for consideration.
[62]CfHe v Minister for Immigration and Border Protection (2017) 255 FCR 41, [52], [79], [82] (Siopis, Kerr and Rangiah JJ).
[63] Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, 272.
In seeking to establish Ground 1, the applicant focussed upon the Reasons where the delegate stated:
Where funds are sourced from the proceeds of business ownership disposal, applicants are required to submit official records retrieved from the . . . [IAC] in support of the disposal, bank records showing the transfer of the proceeds received and evidence of tax paid on transfer of shareholding. (emphasis added)
The applicant relied upon the statement that applicants were ‘required’ to submit official records that had been retrieved from the AIC: (1) in support of the share disposal; (2) being bank records showing the receipt of the transfer of the proceeds of sale; (3) evidence of the tax paid on the share sale. By his written submissions, the applicant challenged the ‘requirement’ as constituting a policy that found no authority in the Minister’s Procedures Advice Manual and posed the enquiry: “Perhaps there is another policy document which contains this prescription?” As I understood the submissions, it was tacitly conceded that the Guide was apparently unknown to the applicant.[64] Whatever was sought to be gained from the written submission, there is no doubt that the Guide had been brought to the attention of his agent.
[64] Counsel for the applicant volunteered that he also practised as a migration agent.
In assessing the visa application, the delegate applied the executive policy as set out in the Guide. Absent a statutory indication to the contrary, the delegate was entitled to take into account a lawful executive policy that was promulgated as a guide in the exercise of the statutory power to consider whether the criterion for the visa was satisfied.[65]
[65] Cf G, supra [2018] FCA 1229, 204-205.
Contrary to the applicant’s submission, it was entirely unsurprising that neither the Act nor the Regulations contained a prescription that applicants seeking to prove a transfer of share ownership were required to submit official records retrieved from the AIC. By contrast, the Guide addressed the detail of the types of documentation that were to be expected from an applicant seeking the visa via the Significant Investor stream. It was equally unsurprising that, in the case of a proposed complying significant investment grounded upon a cash deposit, the Guide would indicate the need for a documentary trail which enabled the decision-maker to be satisfied that the funds could be traced from the point of sale, through a tax assessment, via foreign exchange transactions and deposited into an Australian bank. Indeed, the Guide expressly stated that the applicant needed to demonstrate the origin of an investment from asset sales, and that the trail of funds was reasonably established. Further, in that connection, it was recommended as being advisable that the number of transactions be kept to a minimum. Matters of this kind were clearly relevant to the questions whether the cash deposits made in Australia were derived from lawfully obtained funds and whether they were unencumbered.
In my view, there was nothing formulaic about the Reasons. Nor is it suggested that the Reasons had been structured entirely upon, or adopted the Guide as a template for the delegate’s consideration of the matter.
The following features of the Reasons undermine the contention that the decision-maker had been, whether consciously or unconsciously, fettered in the consideration whether the criteria applicable to a Business visa via the Significant Investor stream under the regulations had been met; or that the delegate had instead, erroneously, considered whether the Guide dictated or controlled application of the criterion upon which satisfaction of the statutory requirements was to be evaluated.
First, the checklist supplied to the applicant under cover of the letter dated 28 November 2016 expressly drew attention to the types of evidence which were required to substantiate the source of funds for the complying significant investment.
Secondly, by its letter dated 7 April 2017, the Department advised that the applicant would be expected to submit a signed declaration detailing how he had generated and accumulated the funds. The letter also advised that the applicant would be required to provide evidence to substantiate those claims, including that “the trail of funds must be reasonably established with supporting evidence accounting for each step of the way.”
Thirdly, by that letter the applicant was provided the hyperlinks to both the Guide and associated Document Checklist. It was not, and could not reasonably have been, suggested that the applicant had not been informed of the Guide or of the manner in which it would be taken into account.
Fourthly, in its letter dated 1 May 2017, the applicant’s agent provided an explanation to the Department’s natural justice letter, thereby confirming that the context in which the explanation was being provided related, amongst other things, to findings that the applicant had been placed on a commercial bank integrity list and that very significant assets had been frozen by a court order made in 2013.
Fifthly, the delegate’s assessment of the application occurred in the context that the first attempt to provide a documentary trail from point of sale, through tax assessment, onto international transfer of funds and into an Australian bank deposit had been exposed as unreliable.
Sixthly, the Equity Transfer Agreements relating to the Junan and Lanwall share sales had been rejected by the delegate, including by reason that the Forex transactions did not support a conclusion that the consideration for those share sales had been paid pursuant to those agreements. Those records directly undermined such a conclusion.
Seventhly, the initial PRC tax records were shown to be invalid.
Eighthly, by its letter dated 13 July 2017, the applicant was told directly that the reason there was insufficient evidence to support acceptance of the validity of the initial share sales was the absence of “any official records received from the AIC.”
Ninthly, in attempting to explain the earlier ‘mix up’, the explanation that was provided by the new agent was that the applicant had sold most of his Chinese business interests and that, when attempting to provide documentary evidence supporting the complying significant investment, erroneously, the wrong Equity Transfer Agreements and been supplied. Accordingly, the later attempts to demonstrate that the criterion for the visa had been satisfied occurred in a context where, it might be said, need for particular attention to detail was warranted.
Tenthly, pursuant to the express terms of each of the four Equity Transfer Agreements, it was agreed that the parties would submit those documents to the AIC for regulatory approval.
Viewed cumulatively or in isolation, those matters undermined the contention that the delegate’s consideration of whether the statutory criterion had been satisfied had been fettered by her reference to the Guide. In my view, the Equity Transfer Agreements, together with the whole of the facts and circumstances before the delegate, were considered in an active intellectual way. It was a matter for the delegate to decide what weight to give to the evidence that the applicant provided.
I also accept that the delegate was entirely at liberty to decide not to apply the Guide.[66] Upon the principles examined above, the delegate’s duty was to make the correct or preferable decision on the material before her.[67] I see no basis in the Reasons to conclude that the decision was fettered in the manner suggested.
[66]Cf G, supra [2018] FCA 1229, [164], citing Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, 642 (Brennan J).
[67]Ibid.
Ground 1 is rejected.
Ground 2 – failure to consider or make findings
Ground 2, as amended, reads:
The respondent's delegate failed to consider or to make findings on evidence provided by the applicant in support of his application for the subclass 188 visa.
Particulars
When considering whether the funds sourced by the applicant from the sale of two companies - namely, Hebei Eton Pipe Industry Co Ltd and Hunan Eton Pipe Industry Co Ltd – had been transferred to and deposited in Australia, the delegate failed to consider or to make findings on evidence of the transfer and deposit of funds provided under the cover of a letter dated 1 May 2017 from the applicant's migration agent to the respondent (CB 89 ff).
The substantive basis of Ground 2 was that the delegate failed to consider or make findings in relation to the foreign-exchange records that were provided under Item 7 of the applicant’s letter dated 1 May 2017: see [15] above. These records comprised multiple Forex transactions comprising 40 pages and involved transfers of odd, rather than uniform, sums. It will also be recalled that the Guide recommended, for the sake of clarity, that such records be kept to a minimum.
As noted, in August 2017, the applicant appointed a new migration agent following the delegate’s initial findings that the purported source of funds for the original Equity Transfer Agreements had been transferred to Australia before they were executed, and rejection of the Special Tax Payment Certificates on the grounds of their invalidity. By letter dated 8 August 2017, the new agent wrote to the Australian Consulate-General in terms which are convenient to set out:
I am writing on behalf of my client . . . in response to your letter dated 13/07/2017.
On 3 December 2011 the applicant signed an agreement of selling his shares in the company [Hebei] . . . for the price of 94,461,101 RMB. The payment was received on 06 Fairbury 2012. Evidence including a certified copy of the agreement, a certified copy of Tax Payment Certificate for the Personal Income Tax paid by [the applicant] during the period of April 2012, and three of the bank deposits slips are enclosed.
On 20 December 2011 another agreement was signed by the applicant in which his shares in the company Gansu Eton was sold to Hunan Eton Pipe Industry Co Ltd for the price of 22,749,875 RMB. This payment was received in April 2012. A certified copy of the agreement and the Tax Payment Certificate associated to the payment are enclosed.
The funds propose to make the complying investment for this visa application were transferred to Australia a few months after the above payments were received.
During most periods of the years of 2012 and 2013, the applicant was busy in disposing of most of his business ownership in China and a significant part of the funds from the selling were transferred out of China. Nothing surprising that the applicant mixed up the funds from different sales of his businesses.
We attached other evidence documents which may not be extremely relevant to the particular funds transferred to Australia during the period between 10/2012 and 4/2013. These documents are submitted to answer your concerns raised in your letter.
We believe that the evidence submitted is sufficient to substantiate the facts in relation to the source of fund. Should you have any further query please feel free to contact us . . .
As appears from this letter, the applicant’s new agent explained the earlier errors in supplying incorrect documentation as being attributable to his client having disposed of most of his business interests in China and transferring a significant part of the funds from those sales out of China with the result that there was nothing surprising in the “mix up”.
More precisely, in supplying the new Equity Transfer Agreements which relied upon the Heibei Eton and Gansu Eton share sales, the applicant adhered to the same Forex records as being his documentary evidence establishing the trail by which the funds being used for the complying significant investment could be reasonably established.
The applicant accepted that the success of Ground 2 was itself dependent upon acceptance of Ground 1. The reasons above should therefore be sufficient to dispose of Ground 2. If, contrary to my conclusions, Ground 1 was made out, it remains to consider Ground 2.
The applicant complained that the delegate had been “simply dismissive” of this aspect of his case by reason of the finding that no relevant bank records had been provided to show the transfer of funds to Australia or their deposit in any bank accounts. It was said that this finding necessarily, “either overlooked or ignored the obvious possibility that the evidence of the transfer of the funds and their deposit in the Citibank accounts previously provided, with the first identified source of funds from [Junan] and [Lanwall], applied to the transfer and deposit of funds from the second source of funds, from Eton Pipe, and Gansu Eton Pipe.”
I do not accept that submission. It was not a corollary of the rejection of the documentary trail relating to the Junan and Lanwall Equity Transfer Agreements (which had been relied upon in the first attempt to establish the complying significant investment), that the Forex records must therefore relate to the second attempt based upon the Hebei Eton and Gansu Eton Equity Transfer Agreements. So much must follow from the second agent’s explanation for the earlier ‘mix up’ by which it was suggested that the applicant had been busy in disposing most of his Chinese business ownership at the relevant time. Those Forex records could have related to the sale of any of the applicant’s Chinese interests.
Why should the delegate have been left to speculate as to the need for a sufficiently reliable documentary trail so as to demonstrate: (1) the submission of the Equity Transfer Agreements to the AIC (in accordance with the express terms of those agreements); (2) the receipt of the consideration for the sale of shares; (3) the assessment and payment of tax on any capital gains from the sale of those shares; (4) the transfer of those monies from China to Australia; (5) the deposit of those monies to an Australian bank so as to establish the link between those monies and the original share sale to the complying significant investment? And why should the delegate have been left to sift through the multiple Forex transactions in an attempt to make some correlation between the original consideration for the share sales (in RMB) and the transfer of those funds via foreign exchange transactions and into an Australian bank?
As the Minister submitted, the applicant inexplicably failed to provide bank records showing the transfer into an Australian account of the proceeds of the disposal of shares in Hebei Eton or Gansu Eton.
It was for the applicant to put whatever evidence or argument he wished to the delegate to enable her to reach the requisite state of satisfaction. In this case, the applicant had put his evidence and submissions in a way that did not readily enable the trail of documents to be understood as demonstrating that the Australian bank deposits constituted a complying significant investment (if indeed that was at all possible). In circumstances where the documentary trail was at best opaque, it was hardly surprising that the requisite state of satisfaction was not achieved.
The failure to supply an adequate documentary trail is to be evaluated in the context that the applicant had been reminded on more than one occasion of the need to provide such supporting documentation and to demonstrate the trail of funds. It was far from obvious, let alone reasonably established, that the Forex records sufficiently established a documentary trail between payment of the consideration on the second set of Equity Transfer Agreements and the deposit of that consideration to an Australian bank.
The lack of obviousness is also to be evaluated in the context of the applicant’s original declaration which was supplied by his first agent undercover of his letter dated 1 May 2017, as Item 6, being a document described as a “State of Source of Fund.” In this document, the applicant described a number of matters, including the transfer of shares owned by him and his former spouse respectively and the transfer of the proceeds of the sales of those shareholdings by foreign-exchange into Australia. In making those statements, the applicant had tied the transfer of the proceeds of the share sales to the original Equity Transfer Agreements; namely, the agreements supplied as other attachments to that letter, being the Junan and Lanwall Equity Transfer Agreements. Contrastingly, the applicant’s later declaration made on 1 August 2017 made no attempt to correct the earlier statements or to provide a clear documentary trail from which the delegate might have correlated the applicant’s receipt of the consideration payable for the Hebei Eton and Gansu Eton shares to any of those foreign exchange records. Having found himself in a tangled weave, it was for the applicant to put whatever evidence or argument he wished to the decision-maker to enable her to reach the requisite state of satisfaction. In all the circumstances, I accept that it was clearly open to the delegate not to be satisfied that the applicant had satisfied the criterion in light of the limited evidence that he chose to provide in support of his application.
Further, for the reasons above at [63]-[67], I consider that the delegate was not obliged to make findings of fact addressing each and every aspect of the applicant’s claim. In the circumstances of this application, it was neither mandatory nor necessary for the delegate to make findings about whether the foreign-exchange records supported a conclusion that the many transfers of funds contained in those records substantiated the making of the cash deposit that was relied upon as constituting the complying significant investment. Particularly so, where no attempt had been made by the applicant, or his agents, to correlate any of those records to those deposits. As put in the course of submissions, it was not for the delegate to “join the dots”. To the contrary, this a vivid illustration of the type of case identified in earlier authorities. Where claims are pitched at such a general and vague level that the decision-maker cannot establish the relevant facts, the decision-maker is entitled to have made no findings either accepting or rejecting the claim. In this case, the delegate was required to perform an evaluation of whether the application satisfied the criterion under the regulations and to undertake that task on the material placed before her. In my view, as the material was pitched at a level of generality, the delegate was entitled to be more brief in the consideration of the matter than might have been expected had the material descended into detail and explained the documentary trail and demonstrated how a reconciliation of the various funds could be made by identifying the actual receipt of the consideration from the sales said to be the Hebei Eton and Gansu Eton shares, the transfer of those monies and their deposits to the Australian bank accounts.[68]
[68]Cf AIC16 v Minister for Immigration, Citizenship and Multicultural Affairs (No.2) [2019] FCA 531, [61] (Mortimer J).
Ground 2 is rejected.
Conclusion
For the reasons above, I have concluded that the application must be dismissed.
I certify that the preceding one hundred and thirty-two (132) paragraphs are a true copy of the reasons for judgment of Judge A Kelly
Associate:
Date: 11 December 2019
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