Hu v Minister for Immigration, Citizenship and Multicultural Affairs
[2024] FedCFamC2G 730
•13 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hu v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 730
File number: PEG 106 of 2023 Judgment of: JUDGE LADHAMS Date of judgment: 13 August 2024 Catchwords: MIGRATION – application for judicial review of a decision made by the Administrative Appeals Tribunal affirming a decision to refuse to grant the applicants business skills visas – whether the Tribunal constructively failed to exercise jurisdiction or took into account an irrelevant consideration by treating itself as bound by a judgment of the Federal Circuit Court – whether the Tribunal constructively failed to exercise its jurisdiction or denied the applicants procedural fairness by fragmenting a single main business into two separate businesses – whether the Tribunal took into account irrelevant considerations – whether the Tribunal misconstrued or misapplied the words ‘actively operating main business’ in cl 888.222(1)(a) in Sch 2 to the Migration Regulations 1994 (Cth) – jurisdictional error established – writs issued. Legislation: Migration Act 1958 (Cth) ss 134, 476
Migration Regulations 1994 (Cth) reg 1.03, 1.11, Sch 2 cl 888.222
Cases cited: Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36
Jiang v Minister for Home Affairs [2019] FCA 91
Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184; [2009] FCA 189
Minister for Immigration and Border Protection v Snyman [2016] FCA 242
Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448; [2003] FCA 481
Shahpari & Ors v Minister for Immigration & Anor [2016] FCCA 513
Xiang v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 301; [2004] FCAFC 64
Division: Division 2 General Federal Law Number of paragraphs: 133 Date of hearing: 7 February 2024 Place: Perth Counsel for the Applicants: Mr M Crowley Solicitor for the Applicants: William Gerard Legal Pty Ltd Counsel for the First Respondent: Ms C McKay Second Respondent: Submitting appearance, save as to costs Solicitor for the Respondents: Australian Government Solicitor ORDERS
PEG 106 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SAU LAN HU
First Applicant
HON HUI LIM
Second Applicant
JOANNE HUI TING LIM
Third Applicant
AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS
First Respondent
ADMINISTRATIVE APPEALS TRIBUNAL
Second Respondent
ORDER MADE BY:
JUDGE LADHAMS
DATE OF ORDER:
13 AUGUST 2024
THE COURT ORDERS THAT:
1.A writ of certiorari issue to quash the decision of the second respondent made on 19 May 2023.
2.A writ of mandamus issue, directed to the second respondent, requiring it to reconsider the review application according to law.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE LADHAMS:
INTRODUCTION
The applicants are non-citizens who applied for Business Skills (Permanent) (class EC) Business Innovation and Investment (Permanent) (subclass 888) visas (business skills visas). A delegate of the Minister refused to grant the applicants business skills visas and that decision was affirmed by the Administrative Appeals Tribunal on 19 May 2023. The applicants seek judicial review of the Tribunal decision in the Court’s jurisdiction under s 476 of the Migration Act 1958 (Cth) (Migration Act).
The applicants raise four grounds of application which allege that the Tribunal erred by:
(a)applying an observation of the Court in Shahpari & Ors v Minister for Immigration & Anor [2016] FCCA 513 (Shahpari) as to the meaning of ‘actively operating’ as binding on the Tribunal;
(b)fragmenting the applicants’ single main business into two discrete businesses;
(c)taking into account irrelevant considerations; and
(d)misconstruing or misapplying the ‘actively operating main business’ criterion in cl 888.222(1)(a) in Sch 2 to the Migration Regulations 1994 (Cth) (Regulations).
I have found that the applicants have established jurisdictional error by ground 1B. The jurisdictional error is that the Tribunal, in proceeding on the basis that there were two separate businesses operated by the one corporation, did not consider the case as put by the applicants. It is appropriate in this case to issue writs of certiorari and mandamus.
BACKGROUND
On 1 April 2020 the applicants applied for the business skills visas in the Business Innovation stream. The first applicant was the primary visa applicant and there were three secondary applicants included in the application: Vun Chan Lim (Mr Lim), who is the first applicant’s husband, and the second and third applicants, who are the adult children of the first applicant and Mr Lim.
The first applicant was required to provide details in the visa application of her ‘main business’. She recorded that:
(a)the legally registered name of the main business was H&L Corporation Pty Ltd (H&L Corporation);
(b)the trading name of the main business was Layerz;
(c)the industry type was wholesale trade; and
(d)the major business activity was described as being that the ‘business is in export of seafood and production and retail of patisseries’.
The applicants provided with their visa application a copy of an Australian Securities and Investments Commission (ASIC) Current and Historical Company Extract for H&L Corporation, which showed that the company was registered in Western Australia in May 2016, the shareholders of the company were, at that time, the first applicant and Mr Lim who each held 50% of the shares issues by the company, and the Directors of the company were the first applicant, Mr Lim and Honn Fatt Lim (Mr Lim Jr), who is another adult son of the first applicant and Mr Lim.
On 28 September 2020 a delegate of the Minister refused to grant business skills visas to the applicants and to Mr Lim.
On 13 October 2020 the applicants applied to the Tribunal for merits review of the delegate’s decision. Mr Lim was not included in the merits review application.
On 13 April 2023 the applicants attended a hearing before the Tribunal to give evidence and present arguments. Mr Lim and Mr Lim Jr also gave evidence at the hearing.
The Tribunal affirmed the decision not to grant visas to the applicants on 19 May 2023.
RELEVANT LEGISATION APPLIED BY THE TRIBUNAL
Before summarising the Tribunal decision, it is convenient to set out the legislation considered and applied by the Tribunal.
One of the criteria the first applicant was required to satisfy to be granted the visa was that in cl 888.222 in Sch 2 to the Regulations. This clause provides:
(1) The applicant (the current applicant):
(a)had an ownership interest in at least one actively operating main business in Australia during the 2 years immediately before the application was made; and
(b)continues to have the ownership interest in the actively operating main business.
(2)If the current applicant acquired the ownership interest from another person who was an applicant for, or held, a Business Skills (Permanent) (Class EC) visa or a Business Skills (Residence) (Class DF) visa at the time of the acquisition, the current applicant must have held the ownership interest with that person as a joint interest for at least one year before the current applicant’s application was made.
Section 134(10) of the Migration Act defines ‘ownership interest’ as follows:
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
The term ‘main business’ is defined in reg 1.11 of the Regulations in the following way:
(1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:
(a)the applicant has, or has had, an ownership interest in the business; and
(b)the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and
(c)the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:
(i)if the business is operated by a publicly listed company—at least 10% of the total value of the business; or
(ii) if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is at least AUD400 000;
at least 30% of the total value of the business; or
(iii) if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is less than AUD400 000;
at least 51% of the total value of the business; and
(d) the business is a qualifying business.
(2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.
As can be seen from this definition, reg 1.11(1)(d) requires that the business is a ‘qualifying business’. Regulation 1.03 of the Regulations defines ‘qualifying business’ as follows:
qualifying business means an enterprise that:
(a)is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and
(b)is not operated primarily or substantially for the purpose of speculative or passive investment.
SUMMARY OF THE TRIBUNAL DECISION
The Tribunal identified that the central issue for its consideration was whether there was at least one ‘actively operating main business’ during the period 1 April 2018 to 31 December 2018.
The Tribunal identified that the criterion in cl 888.222(1)(a) in Sch 2 to the Regulations required the first applicant to have had an ownership interest in one actively operating main business during the two years before the visa application was made. The Tribunal identified that the relevant two-year period for the purposes of satisfying this criterion was 1 April 2018 to 31 March 2020.
The Tribunal recorded that the registered name of the main business in the applicants’ visa application was H&L Corporation and that two business activities were identified, namely, the export of seafood and the production and retail of patisseries.
The Tribunal was satisfied that one or both of the seafood export and bakery businesses were trading from January 2019 to 1 April 2020. The Tribunal identified that the question was whether a main business was operating between April 2018 and December 2018 and considered each business individually.
The bakery business
The Tribunal accepted that the directors of H&L Corporation made steps towards establishing a bakery business during April 2018 and December 2018, and were making enquiries about equipment and locating suitable premises. However, the Tribunal observed that intent to operate a business was different to operating that business, and considered that the bakery business could not be operated before premises were secured. The Tribunal determined that premises were not acquired until July 2019 and that the bakery did not start trading until January 2020.
The Tribunal referred to the definition approved by the Court in Shahpari that ‘actively operating’ requires ‘an enterprise that has a repetitive, continuous and permanent character’. The Tribunal found that the bakery business did not have a repetitive, continuous or permanent character during the period between April and December 2018, noting that the bakery business had not started during that period. The Tribunal expressed the view that making enquiries about premises and machinery with a view to opening a particular business is distinct from actively operating that business, which involved baking and selling the goods baked.
The Tribunal was unable to find that the bakery business was actively operating at any time during 2018.
The seafood export business
The Tribunal then considered whether the seafood business was ‘providing goods to the public’. The Tribunal was concerned, based on evidence given at the hearing, that sales were being made to a single wholesaler which was owned by the applicants’ family. It remained unclear to the Tribunal whether H&L Corporation sold seafood directly to a third-party importer in Malaysia or through the applicants’ family company in Malaysia, which then on-sold the seafood to the third-party importer. The Tribunal did not seek to resolve this issue because in any event, the Tribunal was not satisfied that the seafood export business was trading between April 2018 and December 2018.
The Tribunal recorded that Mr Lim gave evidence that there was ‘a halt in the seafood export business between April and December 2018’. The Tribunal noted that the Business Activity Statements (BAS) for H&L Corporation from April 2018 to December 2018 did not record any sales or expenses during that period and considered that, even if there were no sales in a quarter, if a business were actively operating, one would expect to see some expenses. The Tribunal recorded that, in response to this, Mr Lim Jr said that everything was run from the family home and therefore there were no overheads. The Tribunal was not satisfied that H&L Corporation was actively operating, in the sense that it was ‘an enterprise that has a repetitive, continuous and permanent character’ during the period from April 2018 to December 2018 given that there were no sales or expenses recorded and no seafood was exported, which was the central activity of that business.
The Tribunal rejected the claim that the directors continued on a daily basis to try and find sources of cheaper seafood or opportunities to export to different markets. The Tribunal also observed that, had the business continued trading at a loss, then it would have been actively operating, noting that operating a business at a loss was not inconsistent with reg 1.03 of the Regulations.
However, the Tribunal reiterated that it was not satisfied that the seafood export business was actively operating between April 2018 and December 2018 given that, when operating, the sole business activity was to export seafood and no seafood was exported for nine months. The Tribunal considered this to be a significant proportion of the two-year period that preceded the lodgement of the visa application. The Tribunal made clear that it had not reached this conclusion just because of the BAS returns, but also because of Mr Lim’s evidence that there was a halt in the seafood export business between April 2018 and December 2018.
The Tribunal was not satisfied that cl 888.222 was met and affirmed the delegate’s decision.
JUDICIAL REVIEW APPLICATION
By an amended application filed on 29 January 2024, the applicants raise the following four grounds:
1.The second respondent’s (Tribunal) decision to affirm the decision of the first respondent to refuse to grant Subclass 888 (Business Innovation and Investment) (Permanent) visas to the applicants was vitiated by a misconstruction or misapplication of the ‘actively operating main business’ criterion in clause 888.222(1)(a) of Schedule 2 to the Migration Regulations 1994 (Cth) (as at 1 April 2020).
Particulars
1.1The Tribunal erred in reasoning that, where the vicissitudes of exchange rates made the exportation of fresh seafood temporarily uncommercial, there would be an ‘actively operating’ business of exporting fresh seafood if transactions were made at a loss [70], but not otherwise [72].
1A.The Tribunal’s decision to affirm the decision of the first respondent to refuse to grant Subclass 888 (Business Innovation and Investment) (Permanent) visas was vitiated by a constructive failure to exercise jurisdiction or taking into account an irrelevant consideration.
Particulars
1A.1The Tribunal proceeded on the erroneous premise that it was bound by an observation of Judge Wilson in Shahpari v Minister for Border Protection [2016] FCCA 513 as to the meaning of ‘actively operating’.
1A.2The ratio in Shahpari was in fact that ‘actively operating’ was a factual enquiry for the Tribunal to consider independently.
1B.The Tribunal’s decision to affirm the decision of the first respondent to refuse to grant Subclass 888 (Business Innovation and Investment) (Permanent) visas was vitiated by a constructive failure to exercise jurisdiction, or a denial of procedural fairness.
Particulars
1B.1The Tribunal fragmented one single ‘main business’ into two discrete businesses: a ‘seafood export’\ business’ and a ‘bakery business’.
1C.The Tribunal’s decision to affirm the decision of the first respondent to refuse to grant Subclass 888 (Business Innovation and Investment) (Permanent) visas was vitiated by the Tribunal taking into account irrelevant considerations.
Particulars
1C.1The Tribunal reasoned at [70] that ‘[s]ometimes businesses choose to operate at a loss through a difficult period so as not to lose customers. The ultimate objective is to make a profit even though there might be a period during which a loss is made’.
1C.2The Tribunal reasoned at [71] that ‘some businesses operate at a loss for a significant period of time, such as seasonal businesses, new businesses or businesses that hit a problem and attempt to trade through and out of a difficult patch until such time as the business is profitable again’.
1C.3The Tribunal took into account the irrelevant consideration of Judge Wilson’s opinion as to the meaning of ‘actively operating’ in Shahpari v Minister for Border Protection [2016] FCCA 513.
The evidence before the Court is contained in a court book filed by the Minister on 31 August 2023.
In their written and oral submissions, the parties addressed the grounds in the following order: ground 1A, ground 1B, ground 1C, ground 1. I will likewise address the grounds in that order.
GROUND 1A
The applicants’ submissions
By ground 1A the applicants assert that the Tribunal erred by considering itself to be bound by Judge Wilson’s (as his Honour then was) judgment in Shahpari in finding that ‘actively operating’ was to be assimilated to ‘an enterprise that has a repetitive, continuous and permanent character’.
The applicants submitted that in Shahpari Judge Wilson agreed with the meaning given to ‘actively operating’ by a differently constituted Tribunal and expressed an opinion that there was force in the Tribunal’s conclusion that two export transactions in the space of four years could not be regarded as constituting a ‘business’ let alone an ‘actively operating business’. The Tribunal in this case proceeded on the premise that it was bound by these observations of Judge Wilson and treated his observations as a definition.
However, the applicants submitted that this was not the ratio in Shahpari, and instead, the ratio was that whether a business is ‘actively operating’ is a question of fact not a question of law. There were different possibilities open in relation to this fact. One possibility was that H&L Corporation could be ‘actively operating’ because enquiries were made to secure supplies of lamb and beef, Mr Lim was approaching and promoting Australian seafood for future sales and prices and exchange rates were checked daily and sometimes multiple times per day.
The applicants submitted that the Tribunal failed to form the state of satisfaction required by it, or alternatively, took into account the irrelevant consideration of the opinion of another administrative decision-maker as to the meaning of ‘actively operating’. Counsel for the applicants submitted that it was quintessentially an error of law for the Tribunal not to apply its own mind to a question of fact.
In his reply submissions, in response to the Minister’s submission (discussed below) that the applicants themselves advanced a submission consistent with the explanation of ‘actively operating’ in Shahpari, Counsel for the applicants submitted that it would have been open to the Tribunal to not have regard to Shahpari and simply because the applicants referred to it in their submissions, it does not follow that the Tribunal had to reference it.
The Minister’s submissions
The Minister submitted that the Tribunal properly formed its own view about the meaning of actively operating on the facts before it, consistent with the judgment in Shahpari, which held that ‘actively operating’ is a question of fact for the Tribunal. The Minister submitted that the Tribunal referred to Shahpari and noted that the Court in that case agreed with the interpretation of the words ‘actively operating’ given another matter, being ‘an enterprise that has a repetitive, continuous and permanent character’, but did not say it was bound by the judgment. The Tribunal then identified what the words ‘actively operating’ meant on the facts of this case, namely:
(a)actively operating a bakery business ‘involved baking and selling the goods baked’ as distinct from ‘[m]aking enquiries about premises and machinery with a view to opening a particular business’; and
(b)actively operating a seafood export business would, it was ‘reasonable to expect’, involve some expenses being incurred even if there were no sales. Checking prices, receiving quotes and promoting seafood for a time when exchange rates were more profitable would not, taking taken together, suffice. Where the ‘central activity’ of a business was promoting seafood, ‘actively operating’ required the recording of some expenses or sales and/or the exporting of seafood.
The Minister submitted that the Tribunal’s reference to a ‘definition’ of ‘actively operating’ does not show that it considered itself bound by the words used in Shahpari. Having determined for itself what the words ‘actively operating’ meant on the facts before it, the Tribunal found that H&L Corporation did not meet that standard between April and December 2018. The Minister submitted that this finding was open to the Tribunal. The Minister submitted that the Tribunal did precisely what the applicants say it should have done, namely, to approach the meaning of ‘actively operating’ as a question of fact about which there were different possibilities open.
The Minister submitted that the words ‘of a repetitive, continuous and permanent nature’ were relied on by the applicants in the submissions made to the Tribunal about the meaning of ‘actively operating’. While the Tribunal did not refer to the applicants’ submissions in its reasons, it can hardly be said that the Tribunal took into account an irrelevant consideration, or failed to properly exercise its jurisdiction, in referring to a judicial authority that considered the very meaning of ‘actively operating’ relied on by the applicants.
Resolution
The judgment in Shahpari
In contrast to ground 1, discussed below, ground 1A is premised on Shahpari being correctly decided.
In Shahpari, Judge Wilson reviewed a Tribunal decision in which the principal issue was whether in the two years immediately before the making of the visa application, the first applicant had an interest in one or more actively operating main businesses. His Honour considered, at [60], a submission made by the applicants in relation to the phrase ‘actively operating’ and said (footnotes omitted):
While a decision of the Migration Review Tribunal does not bind this Court, the observations of member Mercer in Li [& Ors v Minister for Immigration and Border Protection [2015] MRTA 807] provide some guidance in relation to the interpretation of an otherwise undefined phrase in the learning on migration law. I agree with Member Mercer that the applicant must demonstrate, for the purposes of cl.890.211 of Sch.2 of the Regulations, activity in an enterprise that has a “repetitive, continuous and permanent character”. To interpolate, on the facts of Li, the Tribunal found that two export transactions in the space of four years could not be regarded as constituting “business” let alone an “actively operating” business. To my mind there is force in that conclusion.
His Honour also said at [71] (footnote omitted):
In considering whether the applicants were entitled to a visa under cl.890.211 of Sch.2 of the Regulations, they were required to persuade the Tribunal that Karamadan was “actively operating” in accordance with the requirements of the Regulations. That phrase was a non-technical phrase and did not require the Tribunal to embark upon a consideration of matters of law. It was open to the Tribunal to find that the expression “actively operating” involved a consideration of whether Karamadan exhibited activity of a “repetitive, continuous and permanent character” in which Karamadam –
a) actively sought to generate business;
b) in fact generated trade and custom; and
c) derived some financial gain for its activities in the relevant period.
The Tribunal in fact engaged in that process of forensic examination. Among the issues to which the Tribunal had regard was the financial information as recorded in the BAS documentation of Karamadan. The financial information recorded in the relevant BAS documentation revealed a sorry tale insofar as business activity was concerned. Sales in the relevant period were modest in the extreme. In my judgment, it was entirely open to the Tribunal to consider that sales of the magnitude that Karamadan revealed were consistent with a business that was not “actively operating”. That was a factual finding, open on the material before the Tribunal.
The Tribunal’s references to Shahpari
The Tribunal in the present case referred to Shahpari at [34] of its reasons, where it said (footnote omitted):
The Tribunal also had regard to Shahpari. In that matter, there was a question as to whether the business Karamadan was an actively operating main business during a particular period. The Court agreed with an interpretation of the words “actively operating” given in another matter which was as follows:
… the involvement of an applicant must be active in an enterprise that has a repetitive, continuous and permanent character.
The Tribunal then said in relation to the bakery business, at [35]:
It is apparent that the bakery business did not have a repetitive, continuous or permanent character during the period between April and December 2018. The bakery business had not started during that period. Making enquiries about premises and machinery with a view to opening a particular business are activities distinct from actively operating that business., which involved baking and selling the goods baked.
In relation to the seafood export business, the Tribunal said at [62]:
Here the Tribunal refers back to the definition given above of an actively operating business, being “an enterprise that has a repetitive, continuous and permanent character.” The Tribunal is not satisfied that was the case during the period from April to December 2018, given there were no sales or expenses recorded and no seafood was exported which was the central activity of that business. The Tribunal is of the view that if Mr Vun Chan Lim was working for H&L Corporation during that period, rather than his Malaysian company, then that should have been apparent from financial records such as BAS returns.
Did the Tribunal constructively fail to exercise its jurisdiction?
I accept that the Tribunal had regard to the explanation of the phrase ‘actively operating’ considered in Shahpari and applied that explanation in reaching its reasons. However, it does not necessarily follow from this that the Tribunal assimilated the phrase ‘actively operating’ to ‘an enterprise that has a repetitive, continuous and permanent character’. Nor does the reference at [62] of its reasons to the term ‘definition’, when the Tribunal’s reasons are read fairly and as a whole, indicate that the Tribunal treated the question of whether the first applicant had a relevant interest in an ‘actively operating’ main business as anything other than a question of fact to be determined by it on the materials before it.
I accept the Minister’s submission that the Tribunal did, in the circumstances of the present case, approach the question of whether the bakery business or the seafood export business were ‘actively operating’ as a question of fact. I accept the Minister’s submission that the Tribunal had regard to what it considered an actively operating bakery would look like and what it considered an actively operating seafood export business would look like.
It was open to the Tribunal to have regard to the explanation in Shahpari in the manner that it did and to reach the findings of fact that it did on the materials before it.
Did the Tribunal take into account an irrelevant consideration?
The second characterisation of jurisdictional error asserted by the applicants in relation to ground 1A is that the Tribunal took into account an irrelevant consideration. The irrelevant consideration referred to in the applicants’ submissions is the opinion of another decision-maker.
I do not accept that by having regard to the meaning attributed to the phrase ‘actively operating’ in Shahpari, the Tribunal has taken into account any irrelevant consideration that it was prohibited from taking into account.
There are a number of reasons for this.
First, I accept the Minister’s submission that it is relevant that the applicants themselves advanced submissions to the Tribunal which, although not referring expressly to Shahpari, referred to the relevant words used in that judgment. This can be seen, for example, in a submission that the applicants provided to the Tribunal on 29 April 2023, in which they said:
… The Department of Home Affairs glossary provides the following guidance: “For a main business to be assessed as actively operating the applicant must provide evidence of business activity of a repetitive, continuous and permanent nature.”
It should be noted that this guidance does not require that the business be operating at a profit, and it is non-specific about the nature of what constitutes “evidence of business activity of a repetitive, continuous and permanent nature”.
Even though the Tribunal referred to the words expressed in Shahpari rather than to the applicants’ submissions on this point, it was not irrelevant for the Tribunal to consider something which, in substance, formed part of the applicants’ submissions to the Tribunal. The submission advanced in reply on behalf of the applicants that the Tribunal was not required to refer to what was in the submissions misses the point. Whether the Tribunal could avoid referring to a matter advanced in the applicants’ submissions without making a jurisdictional error is a different question to whether a particular matter (including one raised in the submissions) is irrelevant in a way that, if the Tribunal takes it into account, jurisdictional error will follow.
Second, it is not a fair representation of the Tribunal’s reasons to say that the Tribunal simply took into account the opinion of another Tribunal member, with the implication that the Tribunal did not turn its own mind to the issues before it. The Tribunal had regard to a case decided by this Court, in which the Court considered whether a different tribunal and different tribunal member had misconstrued the phrase ‘actively operating’. I do not accept that it is an irrelevant consideration for a decision-maker to have regard to an interpretation of the phrase that appears in legislation that has been considered and approved by a Court. It is not something that the Tribunal was prohibited from taking into account.
Third, and relatedly, as discussed above, I am satisfied that the Tribunal did in fact turn its mind to the issues in the present case and what it meant for a seafood export business and a bakery business to be actively operating. Therefore, to the extent that the assertion of taking into account an irrelevant consideration amounts to an assertion that the Tribunal blindly followed the reasoning in another case without specifically turning its own mind to the questions and facts before it, the ground cannot succeed.
Conclusion in relation to ground 1A
The applicants have not established jurisdictional error by ground 1A.
GROUND 1B
The applicants’ submissions
Ground 1B relates to the Tribunal treating the undertakings of H&L Corporation as two separate businesses, namely, a seafood export business and a bakery business.
The applicants submitted that that was not what they contended before the Tribunal and instead they contended that there was a single ‘main business’. The Tribunal’s suggestion that two business activities were identified in the visa application form is clearly wrong. Rather, the applicants contended for a single business with two discrete areas of activity.
The applicants submitted that while cl 888.222(1)(a) contemplated an ownership interest in more than one ‘main business’, it does not follow that a business consisting of different categories of activity must be treated as separate businesses.
The applicants submitted that the chapeau to the definition of ‘qualifying business’ at reg 1.03 of the Regulations refers to an ‘enterprise’ rather than a ‘business’. The applicants referred to cases in which it has been held in this context that ‘business’ being used synonymously with ‘enterprise’ need not connote that a legal entity can only ever have a single business. The applicant submitted that the Tribunal failed to deal with the contention that there was a single business and by failing to do so, the Tribunal denied the applicants procedural fairness or constructively failed to exercise jurisdiction.
The applicants submitted that the error was material. A ‘business’ contemplates that an enterprise may continue even though one particular field of commercial endeavour ceases. The business may continue by exploring different activities. In the present case, the Tribunal accepted that machinery was being sourced and negotiations for premises were taking place between April and December 2018. The Tribunal discounted all the ‘bakery business’ activity because of its view that no separate baking bakery business had been commenced. The applicants submitted that it does not follow that the same activity attributed to a single business, in conjunction with the lamb and beef enquiries, and Mr Lim’s promotions and the checking of exchange rates, could not have satisfied the Tribunal that a single business was being actively operated.
In his oral submissions, Counsel for the applicants accepted that it was open to the Tribunal to treat a single business as two separate businesses but submitted that the Tribunal could not ignore how the case was put. The applicants advanced their case on the basis that there was a single business comprising discrete activities. Counsel for the applicants submitted that the description of the main business in the visa application shows that the applicants nominated a single business with two limbs and that was reinforced by the description given by the first applicant of her duties, which does not distinguish between the two operations. There is no reasoning as to why the Tribunal treated the single entity as two businesses and, even if it could have reached that view, it needed to deal with the proposition advanced to it.
In his reply submissions, in response to the Minister’s submissions about the manner in which the case was put to the Tribunal, Counsel for the applicants submitted that if the applicants were themselves advancing a case of two discreet businesses, it was ambiguous at best and the Tribunal still needed to address the case as put in the application.
The Minister’s submissions
The Minister accepted that the Tribunal addressed the seafood export and bakery activities individually in its reasons. The Minister submitted that this approach did not amount to jurisdictional error and that the Tribunal decision is consistent with principle and accords with the way in which the evidence was put before it.
The Minister submitted that it was not clearly wrong for the Tribunal to observe that ‘two business activities were identified’ in circumstances where the applicants described the business activity as ‘the business is in export of seafood and production and retail of patisseries’. The Minister submitted that, taking into account the way in which the evidence was presented, the Tribunal’s approach of addressing the bakery and seafood exporting activities ‘individually’ was logical and open on the evidence, which included that:
(a)the bakery business operated under the trading name of ‘Layerz’ but the seafood export business did not;
(b)the bakery business operated from retail premises secured in July 2019, whereas the seafood export business operated from the applicants’ family home; and
(c)the bakery business opened to the public in January 2020, whereas the seafood export business ran profitably from as early as July 2016.
In her oral submissions, Counsel for the Minister submitted that, based on the way in which the evidence was presented to the Tribunal, it was logical and indeed inevitable for the businesses to be discussed and assessed separately by the Tribunal.
The Minister submitted that, in any event, the Tribunal’s treatment of the seafood export and bakery businesses as separate main businesses for the purposes of cl 888.222 found support in the authorities. In this regard, the Minister referred to Minister for Immigration and Border Protection v Snyman [2016] FCA 242 (Snyman). In that case, the appellants ran five different businesses in Australia, each operating under the same company name and identified as a single ‘main business’ in their application form. The Tribunal found that the four separate businesses that continued to trade at the time of its decision were not separate activities comprising a single ‘main business’ as the applicants had submitted, but were rather four separate ‘main businesses’. His Honour Barker J accepted that there was no error in the Tribunal proceeding on the basis that there were four businesses for the purposes of the visa application.
The Minister also referred to Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184; [2009] FCA 189 (Liang), in which Logan J found that whether a single company operated one or two main businesses was nothing more than a question of fact for the Tribunal alone. The Minister submitted that the Court should take the same approach in the present case.
In her oral submissions, Counsel for the Minister submitted that this second reason why the ground must fail (relying on the authorities) was put in the alternative. Counsel for the Minister submitted that:
(a)the Tribunal treated H&L Corporation as one main business and discussed the business activities separately, an approach which was open on the evidence and, if I accept that submission, there is no jurisdictional error in the Tribunal decision; and
(b)alternatively, if the Court finds that the Tribunal found, as a matter of fact, that there were two main businesses, then that finding was also open to the Tribunal as a matter of fact on the evidence before it.
Resolution
Ground 1B directs attention to the manner in which the case was presented by the applicants and the approach of the Tribunal.
The relevant information on the applicants’ visa application form is summarised at [5] above. Importantly for the consideration of this ground, the main business was identified as H&L Corporation and the details given of the ‘major business activity’ were that the ‘business is in export of seafood and production and retail of patisseries’.
The Tribunal’s description of this information at [14] of its reasons was not inaccurate and I do not accept the applicants’ submission that it was ‘clearly wrong’. In that paragraph the Tribunal said:
According to the visa application form, the legal registered name of the main business was H&L Corporation Pty Ltd. Two business activities were identified, which were the export of seafood and the production and retail of patisseries.
Two business activities were identified in the application form but, in my view, that is not necessarily the same thing as there being two businesses.
I accept the applicants’ submission that on their application form, the applicants’ identified one main business.
The Tribunal proceeded on the basis that there were two businesses to be considered individually and separately addressed whether the bakery business was an actively operating main business and whether the seafood export business was an actively operating main business. I do not accept that the Tribunal simply considered the bakery and seafood exporting activities separately. Rather the Tribunal considered them to be separate businesses.
This can be seen not only from the headings and the structure of the Tribunal’s reasons, and its express statement at [23] that it ‘will consider each business individually’, but also from its treatment of the evidence. For example, the Tribunal found that the directors of H&L Corporation ‘began the process of opening an bakery business in Australia and were making enquiries to that end, to do with equipment and locating suitable premises’, but that the bakery business was not actively operating in 2018: Tribunal reasons at [31], [36]. The Tribunal then, in considering the seafood export business, noted that it would have been reasonable to expect to see expenses on the BAS, even if there were no sales, said at [53]-[54]:
53.… It was also observed that H&L Corporation could have reflected expenses such as the cost of airfare to China and expenses incurred by other directors and family members dealing with finance brokers and bankers to seek capital to purchase premises and equipment to purchase the bakery business.
54.The Tribunal observes that those expenses incurred before the bakery business was operational in 2019, and had they been recorded, they would not support the claim that the seafood business was in operation during the period April to December 2018.
This division of the evidence into evidence relevant to the seafood export business and the bakery business reinforces the Tribunal’s statements that it treated the bakery related activities and the seafood export related activities as separate businesses.
This does not reflect consideration of the articulation of the applicants’ claim in the application form as identifying the main business as one business (H&L Corporation) with two areas of business activity. I have considered the Minister’s submissions and aspects of the evidence referred to that suggest that the applicants presented their case in a way that made it logical or inevitable for the Tribunal to address the business activities separately, and I accept that there were aspects of the evidence that reflected different business activities. However, this does not mean that the applicants presented their case on the basis that there were two separate businesses. Looking at the applicants’ application and evidence as a whole, I accept the applicants’ submission that the case was presented on the basis that there was only one main business.
It may have been open to the Tribunal to reject the applicants’ assertion that there was just one main business and treat the seafood export business and the bakery business as separate businesses (as it did). The cases of Snyman and Liang, referred to in the Minister’s submissions support the proposition that it is possible for a single corporation or business entity to operate more than one business. However, to do that, the Tribunal needed to first engage with and reject the case as put by the applicant, namely that there is one main business.
It is important, in this regard, to note some features of Snyman and Liang which are not present in the case currently before the Court. In Snyman, the Tribunal considered the applicant’s submission that four businesses operated by the same company should be considered as a single main business and gave reasons for rejecting that submission. In Liang the applicant himself nominated two main businesses operated by the same corporation. Those cases are therefore distinguishable.
I accept that the Tribunal made a jurisdictional error in the present case. That error was failing to address the applicants’ case as it was advanced: see Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448; [2003] FCA 481 at [36]-[37].
The error is material. If the Tribunal had considered the applicants’ case that there was one main business rather than two, and had accepted that, there is a realistic possibility that it may have reached a different conclusion in relation to whether there was an ‘actively operating’ main business. There is a realistic possibility that the Tribunal may not have dismissed the activities relating to the establishment of the bakery business activities if it had proceeded on the basis that there was only one main business.
GROUND 1C
The applicants’ submissions
The applicants submitted that the Tribunal took into account three irrelevant considerations, namely:
(a)that ‘sometimes businesses choose to operate at a loss through a difficult period so as not to lose customers. The ultimate objective is to make a profit even though there might be a period during which a loss is made’;
(b)that ‘some businesses operate at a loss for a significant period of time, such as seasonal businesses, new businesses or businesses that hit a problem and attempt to trade through and out of a difficult patch until such time as the business is profitable again’; and
(c)the reliance on the opinion of Judge Wilson, expressed in Shahpari, as to the meaning of ‘actively operating’.
Counsel for the applicants submitted that if they are right in their opinion that Shahpari was wrongly decided (see ground 1 below) and the construction of ‘actively operating’ is a question of law, it was wrong of the Tribunal to rely on the opinion of a judge of this Court as to the meaning, and the meaning must be construed solely by reference to the statute.
Counsel for the applicants submitted that the Tribunal’s observations at [70] and [71] that other businesses sometimes choose to operate at a loss, through a difficult period, so as to not lose customers, and that some businesses operate at a loss for a significant period, are irrelevant to the construction of the statute. What other businesses might do is irrelevant and there was no evidence before the Tribunal. Counsel for the applicants submitted that its factually irrelevant because the Tribunal’s opinion about what other businesses do, on the basis of material not before the Court, is irrelevant, and legally irrelevant because the words are drawn from something other than the regulation that needs to be construed.
The Minister’s submissions
Counsel for the Minister submitted that the Tribunal’s observations about other businesses operating at a loss, properly construed, form part of what the Tribunal determined as the meaning of ‘actively operating’ as a question of fact on the evidence before it.
The Minister also submitted that this approach finds support in the authorities, in Jiang v Minister for Home Affairs [2019] FCA 91 (Jiang) where Besanko J said that, in relation to carrying on a business of buying and selling goods, ‘the regular sale of goods, or the absence of sales, may be significant, perhaps highly significant, but the absence of regular sales is not necessarily decisive’. The Minister submitted that the Tribunal was entitled, in addressing the question of fact before it, to make those observations that an actively operating business on these facts could have been satisfied if the business had been trading at a loss.
Resolution
The relevant reasoning of the Tribunal
The Tribunal’s references to Shahpari are addressed in the context of ground 1A above.
The other findings of the Tribunal relevant to this ground are at [70] and [71] of the Tribunal’s reasons. In these paragraphs, the Tribunal said (emphasis added):
70.It was also submitted that the family could have exported seafood at a loss purely to create an impression that the business was actively operating. The Tribunal observes that had the business continued trading at a loss, then it would have been actively operating. Sometimes businesses choose to operate at a loss through a difficult period so as to not lose customers. The ultimate objective is to make a profit even though there may be a period during which a loss is made.
71.Operating a business at a loss is not inconsistent with r.1.03. That regulation requires that a qualifying business “is operated for the purpose of making a profit…”. It is not a requirement that the business does make a profit during any given period but that making a profit is the purpose of the business. Indeed, some businesses operate at a loss for a significant period of time, such as seasonal businesses, new businesses or businesses that hit a problem and attempt to trade through and out of a difficult patch until such time as the business is profitable again.
Did the Tribunal take into account irrelevant considerations
I do not accept that it was impermissible for the Tribunal to make the observations that it made in [70] and [71] of its reasons, as shown in the emphasised portions of those paragraphs above.
When the comments are read fairly and in context, it is apparent that the comments are provided as examples in part of the Tribunal’s consideration of a submission advanced by the applicants to the effect that the family could have exported seafood at a loss purely to create an impression that the business was actively operating. The Tribunal is explaining why, if the business had continued trading but at a loss, it would amount to an ‘actively operating’ business and why this is not inconsistent with the legislation. The sentences that the applicants seek to impugn are examples of circumstances in which a business might choose to operate at a loss for a period. I accept the Minister’s submission that the sentences form part of the Tribunal’s understanding of what it means for a business to be ‘actively operating’.
Insofar as the applicants submit that there was no evidence before the Tribunal as to what other businesses may do, I do not consider that anything turns on this. The observations are examples only, given by the Tribunal to explain its reasoning, rather than findings of fact in relation to the issues before the Tribunal.
In relation to the applicants’ submission that the Tribunal’s reference to Shahpari amounted to the Tribunal taking into account an irrelevant consideration, the ground overlaps with a similar issue addressed in the context of ground 1A. The comments that I have made in the context of ground 1A are also relevant here. As I understand the applicants’ submission, the reason they say it was irrelevant to have regard to Shahpari in the context of this ground is because it was wrongly decided. I have addressed the question of whether Shahpari was wrongly decided in the context of ground 1 below and found that it was not wrongly decided. It was not impermissible for the Tribunal to have regard to Judge Wilson’s judgment in Shahpari.
Ground 1C is not established.
GROUND 1
The applicants’ submissions
The applicants’ ground as pleaded asserts that the Tribunal misconstrued or misapplied the requirement in cl 888.222(1)(a) that there be an ‘actively operating main business’. The only particular to the ground asserts that the Tribunal erred in reasoning that, when the exchange rates made the exportation of fresh seafood temporarily uncommercial, there would be an actively operating business only if transactions were made at a loss.
The applicants’ submissions in relation to this ground address three main issues, to which the Minister has responded.
First, the applicants submitted that the Tribunal erred by treating a temporary cessation of business in a way that denied H&L Corporation the status of being an ‘actively operating’ main business. The applicants referred to tax law cases to support a submission that expenses incurred by a taxpayer during a temporary cessation of business activities are nevertheless deductible as expenses incurred in the carrying on of a business and the question of whether cessation of operations is merely of a temporary nature or one which has reached the final stage is difficult to answer. The applicants submitted that the Tribunal in this case did not express any finding that the seafood export business had ceased or that any steps were taken to wind up the business. On the contrary, the Tribunal found that the business was at actively operating up until 1 April 2018 and from 1 January 2019. The applicants submitted that the Tribunal assimilated a temporary cessation of sales and denied H&L Corporation the status of an actively operating main business. The applicants submitted that that cannot be right, noting that retail businesses that close up for the night experience daily temporary cessation of sales, retail businesses that close on Sundays experience a weekly cessation of sales, businesses that close on public holidays face temporary cessation of sales and businesses that were not permitted to trade during Covid-19 lockdowns experienced prolonged cessation of sales. The applicants further submitted that business supply can be interrupted through no fault of the business owners and it is not sensible that in all of these cases, such a business ceases to be ‘actively operating’. The applicants further submitted that it is not a satisfactory answer to say that the period of cessation needs to be significant because cl 888.222(1)(a) does not say that any such thing as required.
In his oral submissions, Counsel for the applicants submitted that ‘actively operating’ must be understood in its statutory context and cannot be divorced from other terms that are defined. Counsel for the applicants submitted that a temporary cessation in activity does not mean that a person is no longer carrying on a business and, practically, it might depend entirely on the business, giving the example that a property developer will not be making large transactions daily.
Counsel for the applicants submitted that the Tribunal introduced something arbitrary by reasoning that there was a nine-month hiatus, which is significant, and therefore the business was not actively operating. Counsel for the applicants submitted that, if that is right, it must also be right that the Tribunal could reason that closing for a month, a week, a public holiday or even overnight could mean that the business is not actively operating.
Second, the applicant submitted that the requirements of cl 888.222(1)(a) are questions of law not fact and, to the extent that Shahpari held otherwise, it was plainly wrong. The applicants submitted that the statutory formula in cl 888.222(1) is a composite phrase to be construed in the context of a highly prescriptive scheme involving a series of overlapping defined terms. The applicants submitted that the question of whether a statutory formula is a composite phrase is always a question of law, citing Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 (Agfa-Gevaert).
The applicant submitted that when the Tribunal said at [70] and [71] that H&L Corporation would have satisfied clause 888.222(1)(a) if, and only if, it had continued to operate at a loss between April and December 2018, the Tribunal exposed misunderstanding or misconstruction of clause 888.222(1)(a). The applicant submitted that to say so is to say in effect that ownership of a large business leads to a visa, but small business does not. But the definition of ‘main business’ in reg 1.11(1)(c) expressly regulates the value of the business in which the ownership interest must inhere and the precondition of a subclass 188 visa is that a business with a minimum turnover is required. The applicant submitted that the better view is that an ‘actively operating main business’ is a business that is established (by showing a repetitive, continuous and permanent character) and has not permanently ceased.
The applicant alternatively submitted that it is sufficient ‘active operation’ that there be some activity taking place coupled with an abiding intention to carry on the business. In his oral submissions, Counsel for the applicants offered a different explanation again and submitted that ‘an actively operating main business is a business which is established and no steps have been taken to close it down, to wind it up or there is no evidence that it’s been abandoned’.
Third, the applicants submitted that the Tribunal erred by approaching its task on the basis that it was necessary to be satisfied that an ‘actively operating’ business was being conducted throughout the two years immediately before the visa applications were made, when all that cl 888.222(1)(a) requires is that the ‘ownership interest’ endure ‘during’ the two-year period.
Neither cl 888.222(1)(a) or (b) requires that there be an ‘actively operating main business’ throughout the two year period before the visa application is made. The applicants submitted that the focus of cl 888.222(1) is on the ownership interest and not the nature of the business. The applicants submitted that if it were otherwise, it would require an actively operating business not just throughout the two-year period immediately before the visa application was made, but also at the time of the business because cl 888.222(1)(b) requires that the primary applicant continue to have the ownership interest at the time of decision. The applicant submitted that this was inconsistent with the Full Court decision in Xiang v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 301; [2004] FCAFC 64 (Xiang), which related to a different type of visa.
In his oral submissions, Counsel for the applicant responded to the Minister’s submission that ‘throughout’ and ‘during’ are synonyms by submitting that they can mean the same thing, but do not necessarily mean the same thing, giving the example that it is not the same thing to have a glass of wine during the day as it is to be drinking wine throughout the day.
The Minister’s submissions
The Minister submitted that the Tribunal’s finding that H&L Corporation was not ‘actively operating’ between April and December 2018 due to an absence of reported sales in its BAS and a halt in the seafood export business was available on the evidence and is consistent with authority. The authorities referred to by the Minister were Shahpari, in which the Court found no error in a finding that the relevant company was not ‘actively operating’ for a seven to nine month period in circumstances where the BAS of the company showed no sales for three quarters during relevant period and only modest sales in the fourth quarter, and Jiang, in which the Federal Court found it was open to the Tribunal to find that the relevant business was not a qualifying business and therefore not an main business in circumstances where the BAS of the company showed no sales for five quarters within the relevant period. The Minister submitted that, in the present case, the Tribunal’s finding that a nine-month cessation of sales meant that H&L Corporation was not ‘actively operating’ was neither a misconstruction or misapplication of cl 888.222(1)(a) and rather represented a conclusion open to the Tribunal on the evidence, informed by what the Tribunal had determined to be the meaning of ‘actively operating’ on the facts of this case.
The Minister did not accept that Shahpari was wrongly decided and submitted that the ordinary meaning of the word is a question of fact. The Minister submitted that the question of whether ‘actively operating main business’ is a composite phrase was not before the Tribunal and is not reviewable by the Court. The Minister submitted that the authority relied on by the applicants does not assist them because in Agfa-Gevaert, the principle articulated by the High Court was that whether a phrase has a meaning that differs from its ordinary meaning is a question of law. The characterisation of a ‘composite phrase’ was a concession made by the appellant’s Counsel in that case. The Minister further submitted that the applicants’ submission is wrong in any event. The term ‘main business’ is expressly defined in reg 1.11 of the Regulations but the term ‘actively operating’ is not defined. Had the legislature intended that the words ‘actively operating main business’ be construed and applied as a composite phrase, different statutory language would have been used. The Minister submitted that the applicants’ alternative construction, requiring an ‘abiding intention’ to carry on a business, finds no support in the statutory text.
The Minister submitted that the applicants’ submission that cl 888.222(1)(a) does not require a visa applicant to have an ownership interest in at least one actively operating main business throughout the two years immediately before the application was made, and rather it is the ‘ownership interest’ that must endure during the two-year period, cannot be maintained because:
(a)the applicants’ construction is not what the plain words of cl 888.222(1)(a) say, and instead that clause requires an applicant to have an ownership interest ‘in’ at least one ‘actively operating main business’ during a two-year period. If the main business is not ‘actively operating’ for a time within that two-year period, and applicant cannot hold the requisite interest in the business;
(b)the applicants’ argument appears to be premised on the words ‘during’ and ‘throughout’ bearing different meanings, but that is not consistent with the dictionary definitions of those terms and rather the terms are synonyms; and
(c)taken to its logical conclusion, the applicants’ construction would render the two-year requirement uncertain and potentially meaningless.
The Minister submitted that the applicants are wrong in their submission that the focus of cl 888.222(1)(a) is on the ownership interest and not the nature of the business owned by the applicants. The nature of the business is an express requirement of the clause, with the clause requiring that there must be a ‘main business’ and it must be ‘actively operating’. The Minister also submitted that the word ‘continues’ in cl 888.222(1)(b) requires an ownership interest in an actively operating main business to persist until the time of the decision and submitted that the definition of ‘main business’ in reg 1.11 is activity related, not status related, citing Liang.
In oral submissions, Counsel for the Minister submitted, in response to oral submissions advanced by Counsel for the applicants, that it is necessary for an ownership interest, in an actively operating main business, to persist for the entire two-year period up to the date of the visa application. The Minister submitted that there must be an actively operating main business found, as a matter of fact, throughout the two-year period. But the Minister made no submissions about what should occur following that period, up until the date of the decision.
Resolution
Was Shahpari wrongly decided?
There was focus on the applicants’ submissions in relation to whether the requirements of cl 888.222(1)(a) are questions of law or questions of fact and whether Shahpari was wrongly decided. In my view, this has a tendency to direct attention away from the issues the applicants are really seeking to raise.
Clause 888.222(1)(a) requires that the applicant, in this case the first applicant, ‘had an ownership interest in at least one actively operating main business in Australia during the 2 years immediately before the application was made’. The phrases ‘ownership interest’ and ‘main business’ are defined in the Regulations. The phrase ‘actively operating’ is not defined.
The Court in Shahpari did not find that the whole of the construction of cl 888.222(1)(a) was a question of fact. Rather, the Court found that whether a main business was ‘actively operating’ was a question of fact. I do not accept that Shahpari is plainly wrong in so far as it held that the question of whether the main business is ‘actively operating’ is a question of fact.
The applicants’ submission in this regard was based on Agfa-Gevaert. Judge Wilson in Shahpari expressly referred to this case at [73], where he said:
73.Some support is to be found for the proposition that the meaning of a technical legal term is a question of law but that the ordinary meaning of a word or its non-legal technical meaning is a question of fact. So much was held by the High Court of Australia in Collector of Customs v Agfa-Gevaert Ltd (“Agfa-Gevaert”). In Cheng [v Minister for Immigration and Citizenship (2013) 213 FCR 362], Cowdroy J dealt with an appeal from a decision of Federal Magistrate Driver in which the phrase ‘turnover’ fell for interpretation. Cowdroy J referred to the High Court’s decision in Agfa-Gevaert, holding that the ordinary or non-technical meaning of a word is a matter of fact. His Honour said that the extent to which the statutory context of a word affects its meaning is a question of law. His Honour held that where an applicant seeks to challenge a finding as to the ordinary meaning of a word through judicial review, the applicant may do so by showing that the statutory context of the particular word evinces a meaning different to the ordinary meaning found by the court below. Cowdroy J held that the Federal Magistrate did not err in failing to find jurisdictional error in the Tribunal’s reasons.
As I understand the applicants’ case, they are attempting to persuade the Court that the Tribunal erred in making its finding as to whether the first applicant had an ownership interest in an actively operating main business in the two years prior to the visa application. The particular reasoning of the Tribunal that is said to demonstrate the Tribunal’s misunderstanding or misconstruction of the relevant legislation is that H&L Corporation would have satisfied cl 888.222(1)(a) if, and only if, it had continued to operate at a loss between April and December 2018.
I do not consider it is a fair reading of the Tribunal’s reasons to describe that there would be an actively operating business of exporting seafood if transactions were made at a loss, but not otherwise. The Tribunal’s reasons, read fairly, indicate that the Tribunal was not satisfied that the seafood business was actively operating for a period of nine months in circumstances where its sole business activity was to export seafood and no seafood was exported during that nine-month period. This finding also took into account the evidence of Mr Lim that there was a halt in the seafood export business during this period. While the Tribunal accepted that a business could be actively operating if it was trading at a loss, its reasons do not go so far as to say that the seafood export business could only be actively operating during that period if it was conducting transactions at a loss.
The alternative constructions advanced by the applicants cannot be accepted.
The first is set out at [91] of the applicants’ written submissions in the following terms:
The better view is that an ‘actively operating main business’ is a business that is established (by showing a repetitive, continuous and permanent character) and has not permanently ceased.
I do not find jurisdictional error in the Tribunal’s reasons based on this submission. The term ‘main business’ is defined in the Regulations and the applicants’ proposed definition of a composite phrase does not have regard to that definition. The words ‘repetitive, continuous and permanent character’ were used in Shahpari and considered by the Tribunal in deciding what it meant for there to be an ‘actively operating’ main business in this case. It was open to the Tribunal in the present case, on the evidence before it, to find that the business was not ‘actively operating’ during the relevant period, even though it had not ‘permanently ceased’.
The second alternative construction is that it is enough that ‘some activity is taking place coupled with an abiding intention to carry on the business’. I accept the Minister’s submission that this construction finds no support in the statutory text as a definition, although I do not exclude the possibility that it may, in some cases, be open to the Tribunal to take into account that there is some activity taking place and an abiding intention to carry on a business in determining whether, on the facts of a particular case, there is an ‘actively operating’ main business. I would make the same observation about the third alternative construction raised in the oral submissions of Counsel for the applicants, namely, that ‘an actively operating main business is a business which is established and no steps have been taken to close it down, to wind it up or there is no evidence that it’s been abandoned’. This definition is not expressly supported by the statutory text, but the matters referred to might, in some cases, be taken into account by the Tribunal.
Did the Tribunal err by treating a temporary cessation of business in a way that denied H&L Corporation the status of being an ‘actively operating’ main business?
In my view, it was open to the Tribunal to find that H&L Corporation was not ‘actively operating’ during the relevant period.
It is an oversimplification of the Tribunal’s reasons to characterise the Tribunal’s decision in the manner in which the applicants do, namely, that the Tribunal assimilated a temporary cessation of sales with not actively operating and denied H&L Corporation the status of actively operating main business based on this assimilation.
The Tribunal’s decision was not based solely on the absence of sales. It is true that the Tribunal appears to have placed significant weight on this factor, giving as a reason for finding that the seafood business was not actively operating for a nine-month period that ‘when operating, its sole business activity was to export seafood and no seafood was exported for nine months’: Tribunal reasons at [72]. However, the Tribunal also recorded that it had regard to the BAS and to Mr Lim’s evidence that there was a halt in the seafood business between April and December 2018: Tribunal reasons at [73].
Not every temporary cessation in sales or other activity will necessarily result in a business being found to be not ‘actively operating’. Consistent with the position in Shahpari, the question of whether, in a particular case, a temporary cessation of sales or other activity will result in a business ceasing to be an actively operating business is a question of fact to be decided by the Tribunal.
In the present matter, the Tribunal considered the cessation of activity over a nine-month period, which relevantly included the cessation of sales and expenses, meant that the business was not ‘actively operating’. This finding was open to the Tribunal on the evidence before it.
I accept the Minister’s submission that similar findings in other matters have been considered by the courts and found to be free from jurisdictional error, including in Shahpari.
Did the Tribunal err by proceeding on the basis that it was necessary to be satisfied that an ‘actively operating’ main business was being conducted throughout the two years before the visa application was made?
The applicants’ submission is that the Tribunal erred by considering that cl 888.222(1) required that there be an ‘actively operating’ main business throughout the whole of the two-year period prior to the visa application being made. There are two main aspects to this part of the applicants’ submissions. The first is that the focus of the clause is on the ownership interest and not whether there is an ‘actively operating’ main business. The second is a distinction that the applicants seek to draw between the word ‘during’ and the word ‘throughout’.
In my view, cl 888.222 requires that there be both an ‘ownership interest’ and an ‘actively operating main business’. As submitted by the Minister, the ownership interest must be ‘in’ at least one actively operating main business. Without an actively operating main business, there is nothing for the ownership interest to attach to. If the intention was for the ownership interest to attach solely to the ‘main business’, without the need for the business to be ‘actively operating’ then the words ‘actively operating’ would be superfluous. Therefore, I do not accept that the clause is directed only to the ownership interest. It is directed to both the need for an ownership interest and the need for an actively operating main business.
In relation to the submission as to whether the requirements of the clause need to be met throughout the whole of the two-year period, or only at some particular point during the two-year period, I prefer the submissions of the Minister.
Both Xiang (relied on by the applicants) and Liang (relied on by the Minister) addressed the requirement that an applicant ‘continue’ to meet a time of application criteria at the time of the decision. Unlike the present case, which focuses more specifically on the period in the two years prior to the making of the visa application, those cases focus on the period between the making of the visa application and the making of the decision. The judgment in Liang does, however, more aptly support the Minister’s construction than Xiang supports the applicants’ construction. In Liang Logan J considered Xiang and distinguished the case. His Honour said at [53]-[54]:
53.These are Delphic qualities attending ascertaining the effect of cl 845.221 in relation to continued satisfaction of cl 845.213, even with the benefit of the guidance offered in Xiang’s Case. As a matter of first impression, cl 845.213 appears to be status based in the sense that it looks to the possession of an “ownership interest” in a “main business” or businesses. Subclause 845.213(a) carries a temporal limitation which looks to the 18 months immediately preceding the application. There is though a further and cumulative temporal limitation itself utilising the transitive verb “continues” found in cl 845.213(b).
54.The evident concern of the further temporal limitation in cl 845.213(b) is that the “ownership interest” in one or more “main businesses” over the period of 18 months immediately preceding the application must be maintained, “continue”, throughout whatever period elapses thereafter until the application is made. In other words, the intention, reflected in the language of cl 845.213(b), is that there should be no gap in the holding of an “ownership interest”.
This lends support to the contention that the ownership interest in the actively operating main business must exist throughout the whole of the two-year period prior to the visa application.
I also accept the Minister’s submission that the applicants’ construction has the potential to render the two-year requirement meaningless.
Conclusion in relation to ground 1
The applicants have not established jurisdictional error by ground 1.
CONCLUSION
In circumstances where I have found that the applicants have established jurisdictional error by ground 1B, I am satisfied that it is appropriate to issue a writ of certiorari to quash the Tribunal decision and a writ of mandamus to require the Tribunal to reconsider the application according to law.
I certify that the preceding one hundred and thirty-three (133) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Ladhams. Associate:
Dated: 13 August 2024
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