Hua Cheng Trading Pty Ltd v Minister for Immigration
[2005] FMCA 119
•15 February 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HUA CHENG TRADING PTY LTD v MINISTER FOR IMMIGRATION | [2005] FMCA 119 |
| MIGRATION – MRT decision – refusal to approve business sponsor for Temporary Business Entry (Class UC) visa – failure to be satisfied that sponsor would comply with undertakings – failure to be satisfied that sponsor has demonstrated a satisfactory record of, or a commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia. |
Migration Act1958
Judiciary Act 1903, s.39B
Migration Regulations 1994, reg.1.20D
Craig v South Australia (1995) 184 CLR 163
Lace Holdings Pty Ltd v Minister for Immigration and Multicultural Affairs (2002) 117 FCR 79
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323
MM International (Australia) Pty Ltd v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 323
Applicant: | HUA CHENG TRADING PTY LTD |
| Respondent: | MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
| File No: | SZ 2633 of 2003 |
| Delivered on: | 15 February 2005 |
| Delivered at: | Brisbane |
| Hearing date: | 5 March 2004 |
| Judgment of: | Jarrett FM |
REPRESENTATION
| Counsel for the Applicants: | Mr Turner |
| Solicitors for the Applicants: | Yandell Wright Stell Lawyers |
| Counsel for the Respondent: | Mr Bromwich |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The Amended Application for Review filed on 5 March, 2004 be dismissed.
The applicant pay the costs of the respondent to be agreed and failing agreement to be taxed according to the Federal Magistrates Court Rules 2001.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SZ 2633 of 2003
| HUA CHENG TRADING PTY LTD |
Applicant
And
| MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant company applied for approval as a business sponsor on 8 September, 1999. Applications for nomination of a business activity and a temporary business visa were lodged on the same day by Mr Wen Quan Li on behalf of himself and his wife.
On 4 December, 2000, a delegate of the Minister rejected the application for sponsorship approval and the related temporary business visa application made by Mr Wen Quan Li.
On 22 December, 2000, both the applicant and Mr Li applied to the Migration Review Tribunal to have the decision of the Minister’s delegate reviewed. On 28 March, 2003, the Tribunal affirmed the decision of the delegate, finding that the applicant company did not meet the criteria for approval as a business sponsor. Mr Li’s application was also declined. The applicant and Mr Li were notified of those decisions on or about 4 April, 2003.
By this application made on 2 December, 2003 pursuant to s.39B of the Judiciary Act1903, the applicant applies for review of the decision of the Migration Review Tribunal. Mr Li has his own application for review (SZ 623 of 2003) and the parties agreed for it to be heard immediately following the instant application. It is common ground between the parties in the two proceedings that if the applicant company does not succeed, Mr Li cannot succeed. Mr Li does not advance any separate case to that of the applicant.
The applicant’s grounds for review are:
a)The Tribunal failed to take account of relevant considerations, namely:
i)that the Applicant had been paying the visa applicant’s salary since the company commenced operations in Australia;
ii)that the training expenditure identified by the applicant constituted actual training of employees which fell within the terms of the relevant legislation.
b)The Applicant was denied procedural fairness.
Background
To understand the applicant’s contentions, it is necessary to recite some of the factual and legislative background to the applicant’s sponsorship application.
Section 31 of the Migration Act1958 (“the Act”) provides that there are to be prescribed classes of visas, and that the regulations may prescribe criteria for a visa of a specified class. Regulation 1223A of the Migration Regulations1994 (“the Regulations”) provides for temporary business class (class UC) visas. Regulation 1223A(4) divides this class of visas into sub-class 456 (business short-stay) and sub-class 457 (business long-stay). Mr Li applied for a sub-class 457 visa.
To support his application, Mr Li claimed that he was sponsored by an Australian business and in particular the applicant in these proceedings. In that circumstance, the sponsoring business must be a pre-qualified business sponsor or a standard business sponsor (see subclauses 457.223(4) and (5) of Schedule 2 to the Regulations). To that end and as set out above, the applicant company applied for approval as a business sponsor.
Approval of business sponsors is dealt with by reg 1.20D of the Regulations. Relevantly it provides:
(2) The Minister must approve the application if:
…
and
(c) the Minister is satisfied that the applicant for approval:(i) will introduce to, or utilise or create in, Australia new or improved technology or business skills; or
(ii)has a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia; and
…
The Tribunal found that:
a)there was no evidence or claim that the applicant would introduce, or utilise, or create in Australia new or improved technology or business skills; and
b)the applicant had not provided evidence of a commitment to training and was unable to associate particular trainee expenditure items in the accounts that were in evidence with particular employees.
The Tribunal also found that the applicant did not have the financial capacity to meet the financial undertakings given on the application form, Form 1067, namely paying an annual salary to the general manager of $44,200, and therefore did not meet the requirements of regulation 1.20D(2)(f).
The applicant’s case
The applicant contends that the Tribunal based its findings on two facts, namely:
a)that the applicant had not provided evidence of a commitment to training and was unable to associate particular training expenditure items in the accounts with particular employees; and
b)as the applicant was proposing to employ the primary visa applicant as a general manager at an annual salary of $44,200, it was likely that it will have difficulty meeting its financial obligations indicated on the Form 1067. The Tribunal found that the applicant did not have the financial capacity to meet the financial undertakings on the Form 1067.
Counsel for the applicant submitted that the Tribunal had “ignored relevant material” so as to commit a jurisdictional error of the type described in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82], where McHugh, Gummow and Hayne JJ refer to a “not exhaustive” list of errors of law which are jurisdictional and are described in Craig v South Australia (1995) 184 CLR 163 at 179 as follows:
…if such an administrative tribunal (like the Tribunal)
“falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.”
The relevant passages of the Tribunal’s reasons are:
12. The business sponsor lodged various documents in support of the application, which included a Certificate of Registration for the Company, Outline of Hua Cheng Trading Pty Ltd, Employment and Training Proposal of the company, submission on Hua Cheng Trading Pty Ltd’s present situation and future developments, a reference letter from the Global Australia Taxation Service (the company’s accountant), the company’s Balance Sheet for the year ended 30 June 1999 and Profit and Loss Accounts of Hua Cheng Trading Pty Ltd for the year ended 30 June 1999 (Dl, f.6-20).
13. At application the business sponsor submitted a profit and loss statement and balance sheet for the year ended June 1999 (TI, f.2-21) from which it appears that the business sponsor had an expenditure of $6,500 for wages (Dl, f.19). The Tribunal also notes from the profit and loss statement for 30 June 1999 that the business sponsor had an operating profit after tax of $243.04 for that year (Dl, f.19). The Certificate of Registration of a Company indicates that the business commenced operations in April 1999 (Dl, f.11). Financial statements for the period 30 June 1999 submitted at primary application fail to indicate that the business sponsor has incurred any expenditure on training, but financial statements for later years include this item. The business sponsor is proposing to employ the nominated employee as a general manager at an annual salary of $44,200, and will be required to meet their financial obligations indicated on Form 1067.
…
15. At review, the agent representing the business sponsor submitted the Company’s Training record (TI, f.19-20) This document principally comments about the highly competitive nature of the visa applicant’s business and the important role of the proposed general manager position. It states that the company has covered tuition fees and other expenses for staff and that they have employed one Australian graduate and three trainees in the last two years. Submissions dated 27 November 2002 and 21 December 2002 were provided by the business sponsor’s agent in connection with the review application. The submission states that Hua Cheng Trading Pty Ltd was formed by Mr Wen Quan Li and his wife, Shu Ying Liu, in April 1999 and they continue to be the only shareholders. Since 2000, the company has been engaged in structural concrete formwork for residential and commercial buildings. The company was said to employ 8 Australian citizens or permanent residents over the past two years (TI, f.76) although the capacity, period and citizenship details were not all provided. Training is said to be provided for employees on-site and principally to do with safety in the construction industry.
…
19. The visa applicant agreed that he was not introducing new or improved technology or business skills into Australia. In regard to the training expenditure item in the business accounts, the visa applicant said that he had undertaken an accounting course for more than $1,000, he allows time off for employees to undertake courses, he incurs costs on-site for in-house training from engineers and inspections by Workcover and union personnel. He said he has a standing Monday meeting and a half day training session before his crews enter a building site. He agreed that virtually all building and construction industry firms do this as part of their work safety practices. He was unable to link training expenditure to particular persons other than himself.
20. Subsequent to the hearing the business sponsor made several submissions. He provided a copy of a Collective Bargaining Agreement between the business, its employees and the Union; a letter from his accountant essentially restating the point about superannuation payments for the financial years ended 30 June 2001 and 2002; an ASIC report prepared by Dun & Bradstreet; and PAYE tax returns for the applicants.
…
27. The Tribunal notes the evidence with regard to the business sponsor’s commitment to training that had been lodged at the time of application was minimal. The Company’s Training record (Ti, f.19-20) has virtually no detail about who was trained in what aspect of the company’s business. It states that the company has covered tuition fees and other expenses for staff (unnamed), and that they have employed one Australian graduate (unnamed) and three trainees (unnamed) in the last two years. From the visa applicant’s responses at the hearing, these trainees appear to be merely junior staff who are, in any case, no longer employed; the graduate was not trained at company expense; there is no evidence of an apprentice; and the tuition fees were for the accounting course of the visa applicant, who is not an Australian citizen.
28. The training expenditure that the visa applicant was able to identify appeared to consist of employees on-site and principally to do with safety in the construction industry, or visits by Workcare, unions and engineers providing briefings on the operations on particular sites. He agreed that virtually all businesses in his industry do this as part of their standard practices. The Tribunal finds that the visa applicant has not provided evidence of a commitment to training and is unable to associate particular training expenditure items in the accounts with particular employees.
29. The Tribunal is not satisfied that the visa applicant has demonstrated a satisfactory record of, or a commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia.
30. The Tribunal finds that the business applicant does not meet the requirements of regulation 1.20D(2)(c) as a whole.
I have highlighted the relevant finding in the above passages insofar as the applicant’s case relates to training expenditure. The applicant would have that finding read literally to mean that the Tribunal formed the view that the applicant provided no evidence of expenditure on training. I do not think that the finding has that meaning. Rather, I think that the Tribunal is expressing that no sufficient evidence was presented. It is expressing the same idea that it expressed in the following paragraph namely: The Tribunal is not satisfied that the visa applicant has demonstrated a satisfactory record of, or a commitment towards training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia.
The finding is one based upon the evidence presented to the Tribunal. It considered all of the relevant evidence. In the course of submissions I was taken to the Collective Bargaining Agreement and to certain financial records said to have not been considered by the Tribunal, or if they had been considered, then insufficient weight had been attached to them. I was not taken to any evidence that was not considered by the Tribunal although, it might be said that some of it (the group certificates for example) were not expressly raised or mentioned in its reasons. In that respect I bear in mind the words of McHugh J in Re The Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405 at [65] as follows:
… However, the obligation to set out "the reasons for the decision" (s 430(1)(b)) will often require the Tribunal to state whether it has rejected or failed to accept evidence going to a material issue in the proceedings. Whenever rejection of evidence is one of the reasons for the decision, the Tribunal must set that out as one of its reasons. But that said, it is not necessary for the Tribunal to give a line-by-line refutation of the evidence for the claimant either generally or in those respects where there is evidence that is contrary to findings of material fact made by the Tribunal. Indeed, to do so would be contrary to the direction in s 420 of the Act that:
"(1) The Tribunal, in carrying out its functions under this Act, is to pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick.
(2) The Tribunal, in reviewing a decision:
(a) is not bound by technicalities, legal forms or rules of evidence; and
(b) must act according to substantial justice and the merits of the case."
The finding made by the Tribunal was open on the evidence.
As to the second finding, the relevant parts of the Tribunal’s reasons are:
16. Qualified audited financial statements were provided which show that the recorded net profit of the business was $8,962 in the financial year 2000/2001 and $9,653 in the 2001/2002 financial year. Salaries were $178,046 in the financial year 2000/2001 and $204,316 in the 2001/2002 financial year. The principal audit qualification refers to the fact that statutory superannuation payments were not made in the periods in which they fell due for payment.
17. Information about the company’s employment of Australian citizens or permanent residents was obtained from evidence provided by the business sponsor and the tax returns for employees as follows:
18. At the hearing the business sponsor said that he and his wife (Mr Wen Quan Li and his wife, Shu YingLiu) are the sole shareholders and directors of Hua Cheng Trading Pty Ltd. He said he came to Australia as the General Manager of Fujian Mingqing Huacheng Trade Co Ltd (Incorporated in China) but later started his own company and was no longer any part of his previous employer. He said he was the General Manager of Hua Cheng Trading Pty Ltd and received $50,000 in the financial year ended 2001 although no evidence was put before the Tribunal. The business is concreting form-work, and although he said there is business to be done in China he was not forthcoming on the nature of the business. The visa applicant said that at January 2002, he had 5 employees: Jovica, Tuaine (who left after 3 weeks), Tait, Chen (project manager) and Amy (office staff). He said he did not know why New Zealanders had been declared to be Australian citizens in his submission. He said he was not clear about legal matters but since the employees had been “cleared” by the trade union they “must be OK”. He said Mr Tait is now an Australian citizen, but had no evidence on the point. Asked why only half of the superannuation payments were made in the year when they fell due, he said finances had been very tight at that time and he paid the due amounts later. This was also the case in the 2001 financial year. He did not know if he was meeting statutory requirements about superannuation payments for employees, but the problem had now been corrected.
…
31. In their sponsorship application the company proposed to employ the visa applicant as a General Manager at an annual salary of $44,200 (Dl, f.4). Regulation 1.20D(2)(f) requires, among other things, that the business sponsor has the ability to meet the financial undertakings on Form 1067. These undertakings include: paying the visa applicant’s wages, making superannuation contributions, paying the repatriation costs for the visa applicant and his family, and accepting financial responsibility for medical and hospital costs for the visa applicant and his family.
32. For the financial year ended 30 June 1999, the year in which the application was made, the business paid only $6,500 for wages and had an operating profit after tax of $243.04. In the last two financial years the operating profits were $8,961.55 (2000/2001) and $9,653.30 (2001/2002). In both years the auditors issued a qualified audit statement on the accounts of the business in regard to the statutory superannuation payments for employees. The visa applicant at the hearing informed the Tribunal that finances had been very tight at that time and he paid the due amounts later. Based on this and other matters, such as his claim that since his employees had been “cleared” by the trade union they “must be OK” for the purpose of his application, the Tribunal formed the view that the visa applicant had scant regard for the requirements expected of an employer. In any case, as the business sponsor is proposing to employ the primary visa applicant as a general manager at an annual salary of $44,200, it is likely that they will have difficulty meeting their financial obligations indicated on Form 1067. On the evidence of financial statements and the evidence of the visa applicant at the hearing the Tribunal finds that the business sponsor does not have the financial capacity to meet the financial undertakings on Form 1067. The Tribunal finds that the business applicant does not meet the requirements of regulation 1.20D(2)(f).
Similarly, the second finding sought to be attacked by the applicant is supported by the evidence. Whilst not all tribunals would have made the findings as made in this matter, that is not the test. There was some evidence (set out in the above extracts from the Tribunal’s reasons) that supported the finding made about the applicant’s capacity to meet its financial obligations.
As was said by R D Nicholson J in Lace Holdings Pty Ltd v Minister for Immigration and Multicultural Affairs (2002) 117 FCR 79 at [34] (adopted by the Full Court in MM International (Australia) Pty Ltd v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 323 at [11]):
“Satisfaction as to an applicant’s ability to comply with the undertakings is a finding of fact and degree for the Tribunal based on the circumstances of the case. The possibility that the Tribunal’s finding of fact is in error or that the court may have made a different finding of fact is not a permissible basis for review…”
As to the complaint that the Tribunal failed to accord procedural fairness to the applicant, Counsel for the applicant submitted that “the Tribunal did not base its decision on the evidence, but made its decision in spite of the evidence”.
That argument appears to me to be another way of submitting that the decision of the Tribunal was against the weight of the evidence or was not supported by it. I have determined that there was evidence to support the Tribunal’s findings. To adopt the appellant’s argument is to conduct an impermissible merits review. The Tribunal has simply carried out its fact finding function and I see no basis to review that exercise.
Conclusion
The Tribunal’s decision does not disclose a jurisdictional error and as a consequence the decision is protected by the privative clause provisions of the Act. As the decision is a privative clause decision, the applicant must file its application for review within twenty-eight (28) days of becoming aware of the decision. The applicant failed to do so and as a consequence, the application is barred by s.477(1A) of the Act.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Associate: S. Haysom
Date: 15 February 2005
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