Ibrahim & Ors v Minister for Immigration & Anor
[2009] FMCA 593
•24 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IBRAHIM & ORS v MINISTER FOR IMMIGRATION & ANOR | [2009] FMCA 593 |
| MIGRATION – Review of Migration Review Tribunal decision – refusal of a business visa – Tribunal not satisfied that the principal applicant had an ownership interest in a main business in Australia at the time of decision – whether the Tribunal erred in considering whether the main business of the applicant had changed considered – whether the decision was independently supported by the finding on the lack of an ownership interest considered. WORDS AND PHRASES – “main business”, “ownership interest”. |
| Federal Magistrates Court Rules 2001 (Cth) Migration Act 1958 (Cth), ss.134, 351 Migration Regulations 1994 (Cth) |
| Ibrahim & Ors v Minister for Immigration & Anor [2007] FMCA 1234 Ibrahim & Ors v Minister for Immigration [2008] FCA 503 |
| First Applicant: | ROMEO ELIAS IBRAHIM |
| Second Applicant: | AMAL FARID EL BAZI |
| Third Applicant: | ELIE IBRAHIM |
| Fourth Applicant: | SEBASTIAN IBRAHIM |
| Fifth Applicant: | SABINA IBRAHIM |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File Number: | SYG 759 of 2009 |
| Judgment of: | Driver FM |
| Hearing dates: | 25 June, 9 July 2009 |
| Date of last submission: | 9 July 2009 |
| Delivered at: | Sydney |
| Delivered on: | 24 July 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr C Jackson |
| Counsel for the Respondents: | Mr M Cleary |
| Solicitors for the Respondents: | Clayton Utz |
ORDERS
The application is dismissed.
The first and second applicants are to pay the first respondent’s costs and disbursements of and incidental to the application in the sum of $5,865 in accordance with rule 44.15(1) and item 1(c) of part 2 of schedule 1 to the Federal Magistrates Court Rules 2001 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 759 of 2009
| ROMEO ELIAS IBRAHIM |
First Applicant
AMAL FARID EL BAZI
Second Applicant
ELIE IBRAHIM
Third Applicant
SEBASTIAN IBRAHIM
Fourth Applicant
SABINA IBRAHIM
Fifth Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| MIGRATION REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
Introduction and background
This is an application to review a decision of the Migration Review Tribunal (“the Tribunal”). The decision was made on 11 March 2009. The Tribunal affirmed a decision of a delegate of the Minister not to grant the applicants Business Skills – Established Business (Residence)(Class BH) visas. The matter was before me in 2007 in relation to an earlier decision of the Tribunal[1]. The applicants successfully appealed against that decision in the Federal Court[2]. The applicants now seek review of the further Tribunal decision made following the decision of the Federal Court.
[1] Ibrahim & Ors v Minister for Immigration & Anor [2007] FMCA 1234
[2] Ibrahim & Ors v Minister for Immigration [2008] FCA 503
The applicants applied for subclass 845 visas on 8 October 2004. On 31 May 2005 a delegate of the first respondent refused to grant the visas. The applicants sought review in the Tribunal and on 22 November 2006 the Tribunal affirmed the delegate’s decision. As noted above, the applicants sought judicial review in the Federal Magistrates Court and then in the Federal Court.
Upon remittal of the case from the Federal Court the applicants were invited to provide additional information and attend a further oral hearing before a differently constituted Tribunal on 15 December 2008. On 11 March 2009 a differently constituted Tribunal affirmed the delegate’s decision to refuse the grant of subclass 845 visas.
The applicant needed to satisfy the Tribunal that he had the requisite ownership interest from 18 months before the application until the time of decision in March 2009.
Mr Ibrahim sought to rely upon two companies in which he asserted an ownership interest. His evidence was that REI Construction Pty Ltd, the company in which he had held the requisite interest at time of application, had had difficulties obtaining payments from contractors, and had been liquidated in 2008[3].
[3] (court book (CB), page 648, paragraph 24)
A further company, Multi-Formwork and Hire Pty Ltd, was formed in September 2005. Mr Ibrahim was the director, and his wife held all the shares in the company. It was Mr Ibrahim’s evidence that while REI was in administration, the administrators and creditors agreed that the assets of REI should be transferred to Multi-Formwork, and there was a transfer of some contracts and that Multi-Formwork for all intensive purposes, carried on the business previously carried on by REI[4].
[4] CB648, paragraph 24
Mr Ibrahim called evidence from his accountant, Mr Mavrolefterou who corroborated this claim[5].
Tribunal’s findings
[5] CB650, paragraph 30
The Tribunal found that Mr Ibrahim did not continue to hold the “ownership interest” required under the regulations. The Tribunal’s finding was based on its view that “the nominated business or businesses are intended to be the same business or businesses that the application should be assessed against at the time of decision”[6].
[6] CB651, paragraph 40)
Further, as Multi-Formwork was not nominated at the time of application, it could not be relied upon for the purposes of showing a continuing “ownership interest” as required.
The application and evidence
These proceedings began with a show cause application filed on 1 April 2009. The applicants now rely upon a further amended application filed in court by leave on 25 June 2009. The grounds in that application are:
1.The Tribunal asked the wrong question, and/or erred in law, and/or took into account irrelevant considerations, those errors going to jurisdiction, in failing to apply the statutory criteria for the grant of the visa applied for, in its approach to the question of what could be characterised as the visa applicants’ “main business”.
1.1 The Tribunal asked whether Multi-Formwork and Hire was in existence at time of application and whether REI and Multi-Formwork and Hire was in existence at time of application.
1.2 The Tribunal should have asked whether REI and Multi-Formwork were engaged in the same enterprise, undertaking, or commercial activity.
2.The Tribunal asked the wrong question and/or erred in law, and/or failed to take into account a relevant consideration, those errors going to jurisdiction, in failing to assess the “ownership interest” in Multi-Formwork and Hire because it was not nominated as a “main business” in the application form, and “the main business at the time of decision must be the same main business as that nominated at the time of application”.
I have before me as evidence the court book filed on 18 May 2009 and an affidavit by Harry Mavrolefterou (the applicant’s accountant) made on 7 July 2009.
Submissions
The applicant contends that the Tribunal erred in taking an incorrect approach to determine whether the two companies with which the principal applicant was concerned were carrying on the same business. The applicant contends that the Tribunal incorrectly attempted to distinguish the case before it from that from those dealt with the Federal Court in Nassif v Minister for Immigration[7] and Tung-Liang Liang v Minister for Immigration[8]. The applicant submits that it is apparent from those decisions that the Tribunal needed to direct its attention to the nature of the business conducted rather than the legal structure through which the business was carried on. The applicant also contends that it was irrelevant to the proper approach to be followed that the second company was not in existence at the time of the visa application. The applicant contends that the Tribunal asked the wrong question.
[7] [2003] FCA 481
[8] [2009] FCA 189
In relation to ground 2, the applicant submits that even if the Tribunal was right to characterise the two companies as separate businesses, the Tribunal erred in finding that the main business at the time of decision must be the same main business as that nominated at the time of application. The applicant concedes that the Tribunal decision is consistent with the decision of the Federal Court in Tung-Liang Liang but formally submits that that case was wrongly decided, in order to protect the applicant’s interests in respect to any further appeal.
The Minister relevantly submits as follows:
In order to obtain a Subclass 845 visa one Applicant had to satisfy each of the criteria in inter alia cl.845.213 to cl.845.218. However, as the Tribunal correctly observed in paragraph [10], the issue in this particular review was whether at the time of the decision the Applicants had, and continued to have, an ownership interest in 1 or more established main businesses in Australia: cl.845.213 read with cl.845.221. As the Tribunal could not be satisfied that any of the Applicants continued to meet the criterion in cl.845.213 at the time of its decision it did not have to determine whether any of them satisfied the criterion in cl.845.215.
The Tribunal held that the First Applicant satisfied the requirements of cl.845.213 at the time of the visa application: paragraph [38]. However, it held that for the First Applicant to continue to satisfy clause 845.213 at the time of the Tribunal’s decision in accordance with clause 845.221, he must continue to have an interest in the same main business in which he had an ownership interest at the time of the visa application. This statutory construction was in accordance with what Logan J held to be the correct construction of cl.845.213(b) in Tung-Liang Liang v Minister for Immigration and Citizenship (2009) 107 ALD 88 at [54]-[55]. The Tribunal made detailed reference to that decision in its findings and reasons: paragraph [40]. Its interpretation of Logan J’s decision was correct.
The Tribunal found that at the time of the visa application the First Applicant’s main business was REI Construction Pty Ltd and that that company was in liquidation and no longer operated. Further, the Tribunal found that the First Applicant’s current business is Multi-Formwork and Hire Pty Ltd and that that company did not exist at the time of the visa application.
The Tribunal then found it was not satisfied at the time of the decision the First Applicant continued to have an ownership interest in the nominated main business in which he had had an ownership interest at the time of the visa application. This was based on the critical factual finding that REI Construction Pty Ltd and Multi-Formwork and Hire Pty Ltd were not the same business: paragraph [45].
The finding in paragraph [45] was a factual finding based on a consideration of the evidence presented to the Tribunal by the Applicants. It included a rejection of the contention by the Applicants that both companies were conducting essentially the same business. Contrary to paragraph 9 and 10 of the Applicants outline of submissions, there was no evidence presented to the Tribunal that there had been a “transition of business” from REI Construction Pty Ltd to Multi-Formwork and Hire Pty Ltd. This is an incorrect characterisation of the evidence. The evidence was that the First Applicant was owed more than $300,000 by REI Construction Pty Ltd and that the creditors trusted the Applicant to be able to keep working. This was why the administrator of REI Construction Pty Ltd permitted certain plant and equipment to be transferred to the new company. There was also some evidence that Multi-Formwork and Hire Pty Ltd “took some contracts” from REI Construction Pty Ltd: paragraph [24].
In conclusion the Tribunal found the First Applicant did not continue to satisfy the criterion in cl.845.213 at the time of the Tribunal’s decision in accordance with cl.845.221.
Ground 1: The Tribunal asked the wrong question, and/or erred in law, and/or took into account irrelevant considerations, those errors going to jurisdiction, in failing to apply the statutory criteria for the grant of the visa applied for, in its approach to the question of what could be characterised as the visa applicants’ “main business”.
1.1 The Tribunal asked whether Multi-Formwork and Hire was in existence at time of application and whether REI and Multi-Formwork and Hire was in existence at time of application.
1.2 The Tribunal should have asked whether REI and Multi-Formwork were engaged in the same enterprise, undertaking, or commercial activity.
Ground 1 must be rejected for the reasons that follow.
Contrary to the Applicants’ assertion, the Tribunal has asked itself the correct question, namely whether at the time of the decision any of the Applicants had, or continued to have, an ownership interest in 1 or more established main businesses in Australia. This question comes from the correct interpretation given by the Tribunal to the criterion in cl.845.213 read in conjunction with the requirements of cl.845.221 under Part 845.22 of Schedule 2 to the Regulations.
Clause 845.221 required the Tribunal to reach a state of satisfaction whether or not any Applicant continued to satisfy the criteria in cl.845.213 to cl.845.218. As outlined above, the Tribunal decided that, whilst the First Applicant satisfied cl.845.213 at the time of the visa application, he did not continue to satisfy that clause. The Tribunal found that each of REI Construction Pty Ltd and Multi-Formwork and Hire Pty Ltd had separate businesses.
The Tribunal’s construction of cl.845.213 and 845.221 is consistent with the Federal Court’s decision in Tung-Liang Liang. The Tribunal in its decision made reference to that authority and followed it: paragraph [40].
Contrary to the Applicants’ outline of submissions at paragraphs [18]-[22], the Tribunal did not make its decision the basis of its finding that the present case was “distinguishable” from Tung-Liang Liang and Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448 by reason of Multi-Formwork and Hire Pty Ltd not being in existence at the time of the visa application, and on its findings concerning the different shareholding arrangements of both companies. Such a submission must be rejected.
The Tribunal was correct in its observation that the factual circumstances in Nassif and Tung-Liang Liang could be distinguished from the present case because in the present case, unlike the situation in Nassif and Tung-Liang Liang, Multi-Formwork and Hire Pty Ltd was not registered at the time of the visa application, particularly in view of the requirements of cl.845.213(b). There was nothing erroneous about this observation.
The Tribunal’s finding that Multi-Formwork and Hire Pty Ltd was not in existence at the time of the visa application was relevant to its finding that Multi-Formwork and Hire Pty Ltd was not the nominated main business on the visa application form. There was nothing erroneous about these findings of fact. It was open to the Tribunal on the evidence.
The Tribunal correctly observed that Nassif is authority for the proposition (accepted by the Tribunal) that “business” is synonymous with enterprise or undertaking, and that it would be incorrect to equate the word “business” with a single legal entity (i.e. one company): paragraph [42]. The Tribunal then assessed all the evidence thoroughly and found each of the companies had separate businesses, and that they did not comprise one “established main business”: paragraphs [43]-[45].
The Tribunal’s findings about the different shareholdings in both companies was relevant to the issue of “ownership interest” (see definition outlined above) and was ultimately relevant to the Tribunal’s finding that both companies were not the same business: paragraph [45].
The Tribunal found that the different ownership arrangements were not consistent with the Applicants’ claims that the companies were essentially the same business. This finding was open to the Tribunal to make on the evidence.
The Applicants assert that the Tribunal asked the wrong question as to the expression “main business”. This must be rejected. The Tribunal applied the correct legal test at paragraphs [42]-[45]. Its finding that REI Construction Pty Ltd and Multi-Formwork and Hire Pty Ltd did not conduct the same business "was nothing more than a question of fact and one for the Tribunal alone": Tung-Liang Liang at [32].
Ground 2:The Tribunal asked the wrong question and/or erred in law, and/or failed to take into account a relevant consideration, those errors going to jurisdiction, in failing to assess the “ownership interest” in Multi-Formwork and Hire because it was not nominated as a “main business” in the application form, and “the main business at the time of decision must be the same main business as that nominated at the time of application”.
Ground 2 is a challenge to the construction that the Tribunal gave to cl.845.213 read with cl.845.221, namely that the main business at the time of the decision must be the same as that nominated at the time of the visa application.
The Tribunal’s construction of cl.845.213 and cl.845.221 is outlined in paragraphs [39]-[40]. In coming to its conclusion as to the construction of these clauses the Tribunal followed the decision of the Federal Court in Tung-Liang Liang. The Tribunal correctly applied Tung-Liang Liang. It found that the use of the words “of that kind” in cl.845.213(b) makes the interest that the primary Applicant must have for the purpose of that subclause the same interest as that had for the purpose of meeting the requirements of cl.845.213(a). This was consistent with Logan J’s conclusions on cl.845.213(b) in Tung-Liang Liang.
There was nothing erroneous in this construction. The Tribunal was bound to follow Tung-Liang Liang and adopt the construction given to cl.845.213 by Logan J in any event.
Further, this Court cannot (as the Applicants have asked in their submissions on ground 2) find that the Federal Court was wrong in Tung Liang-Liang. This Court is bound by Logan J’s decision.
The legislation
Section 134 of the Migration Act1958 (Cth) (“the Migration Act”) defines an “ownership interest” in the following terms:
"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.
Clauses 845.213 and 845.221 in Schedule 2 to the Migration Regulations 1994 (Cth) (“the Migration Regulations”) provide:
Clause 845.213
The applicant:
(a)has had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application; and
(b) continues to have an interest of that kind.
Clause 845.221
The applicant continues to satisfy the criteria in clauses 845.213 to 845.218.
Regulation 1.1 defines “main business” as follows:
(1) For the purposes of these Regulations and subject to sub-regulation (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, in the business is or was at least 10% 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.
Reasoning
The particular visa (the subclass 845 visa) sought by the applicants is an onshore permanent visa for temporary residents who have an ownership in one or more established businesses in Australia. The criteria for a subclass 845 visa are set out in Part 845 of Schedule 2 to the Migration Regulations.
Under Part 845 one member of a family unit must satisfy the primary criteria set out in clause 845.21. The other members of the family unit who are applicants for a visa of this subclass need satisfy only the secondary criteria.
Under clause 845.21 one family member must satisfy each of the criteria set out in clause 845.211 to clause 845.219 at the time of the visa application. In other words if the primary applicant fails to satisfy any one of clause 845.211 to clause 845.219 then the subclass 845 visa application fails.
Further, as well as satisfying the primary criteria in clause 845.211 to 845.219 at the time of the visa application[9], under clause 845.221 in Part 845.22 of Schedule 2 the primary applicant must continue to satisfy the criteria in clause 845.213 to clause 845.218 at the time of the decision.
[9] or more correctly from 18 months before the application
For present purposes the relevant criteria are those contained in clause 845.213 read with clause 845.221. This is because the Tribunal ultimately found that none of the applicants “continued” to meet the criterion in clause 845.213 at the time of its decision.
The Tribunal correctly stated the legal position bearing on its decision in [38] to [42] of its reasons[10] in the following terms:
The visa application was lodged on 8 October 2004. Subclause 845.213(a) requires an applicant for the period of 18 months immediately preceding the making of the application, to have had an ownership interest in 1 or more established main businesses in Australia. Regulation 1.11(1) defines main business and includes the requirement that the visa applicant, together with his spouse, have at least a 10% ownership interest in a main business. The applicants nominated one business on the visa application form. It is not in dispute that the first named applicant was the 100% owner of the nominated main business, REI Construction Pty. Ltd., for more than 18 months prior to the date that the application was lodged. Subclause 845.213(b) requires an applicant to continue to have an “interest of that kind.” At the time of application the first named applicant continued to have an ownership interest in REI Construction Pty. Ltd. The Tribunal is satisfied that the applicants meet the requirements of cl.845.213.[11]
Clause 845.221 requires that the applicant continues to satisfy the criteria in cl.845.213 at the time of decision. The construction of cl.845.221 requires an examination of whether the applicant had an ‘ownership interest’ in a ‘main business’ during the relevant period. The issue that arises is that at the time of decision, the nominated main business, REI Construction Pty. Ltd., is no longer operating and the applicants have an ownership interest in a different company, Multi-Formwork and Hire Pty Ltd., which the first named applicant is claiming as his main business.
The Tribunal has given consideration to whether the main business at the time of decision must be the same main business as that nominated at the time of application. However, the Tribunal is of the view that the nominated business or businesses are intended to be the same business or businesses that the application should be assessed against at the time of decision. The Tribunal has been guided by the recent decision of the Federal Court: Tung-Liang Liang v Minister for Immigration & Citzenship [2009] FCA 189. This judgement confirms that the use of the phrase “of that kind” in subclause 845.213(b) makes the interest that the applicant must continue to have, the same interest that the applicant had for the purpose of meeting the requirements of subclause 845.213(a). In considering the meaning of “continues to” in cl.845.221 the Court concludes [at 55] that the continued interest must be ‘of that kind’ that is, a reference to the ‘main business’ or businesses referred to in cl.845.213(a) and (b).
The applicant has submitted that even though the nominated main business, REI Construction Pty. Ltd., is no longer operating at the time of decision as it was under external administration and a controller was appointed on 22 November 2007 and the company was liquidated in October 2008, nevertheless, the applicants’ current main business, Multi-Formwork and Hire Pty Ltd., is effectively the same main business as the nominated main business.
The first named applicant does not dispute that Multi-Formwork and Hire Pty Ltd is a different legal entity to REI Construction Pty. Ltd. ASIC documents provided to the Tribunal show that Multi-Formwork and Hire Pty Ltd. was registered as a proprietary company on 30 September 2005 and has the ACN number of 116 463 631. The Tribunal is satisfied that Multi-Formwork and Hire Pty Ltd. is a separate legal entity to REI Construction Pty. Ltd., which had an ABN number of 99 957 962 830, and has now been wound up and is not operating at the time of the Tribunal’s decision. Consistent with Nassif v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 481 and Liang, the Tribunal interprets the term ‘business’ to be synonymous with enterprise or undertaking and it would be incorrect to equate the word ‘business’ with a single legal entity.
[10] CB 651-652
[11] I take this statement to be a finding that the criterion was satisfied at the time of the visa application
However, unfortunately, the Tribunal immediately got into difficulties at [43] of its reasons[12] when it stated:
However, the application before the Tribunal can also be distinguished from Nassif and Liang as, not only was Multi-Formwork and Hire Pty Ltd. not nominated as the main business on the application form, it did not exist at the time of application, having first been registered as a proprietary company on 30 September 2005. Clause 845.213(a) requires that the applicant had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application. “Ownership interest” is defined in s.134 of the Act to include a shareholder in a company that carries on the business. The applicants have provided evidence that the second named applicant is the shareholder of Multi-Formwork and Hire Pty Ltd., which was registered as a proprietary company on 30 September 2005, after the visa application was lodged on 8 October 2004. The Tribunal is not satisfied that at the time of decision the applicants continue to have an ownership interest in the nominated main business in which the first named applicant had had an ownership interest at the time of application.
[12] CB 652
It was not open to the Tribunal to distinguish the Federal Court decisions in Nassif and Tung-Liang Liang on the basis put forward by the Tribunal. It was not relevant that Multi-Formwork did not exist at the time of the visa application provided that the business conducted by that company was the same as the business conducted by REI at the time of the visa application. The Tribunal was not dealing with alternate visa claims. The applicants were not claiming they qualified for a visa simply by reason of the business carried on by REI. They had no such claim as REI failed and went into external administration and was liquidated before the Tribunal decision. Neither were the applicants claiming that they qualified for the visa sought by reason only of the business carried on by the company Multi-Formwork. That claim was not open because Multi-Formwork did not exist at the time of the visa application. The applicants claimed that they qualified for the visa because the business carried on by REI and Multi-Formwork was the same. That was what the Tribunal needed to consider in relation to the question of whether the principal applicant was engaged in a “main business” for 18 months prior to the making of the application and at the time of decision. The Tribunal properly directed its attention to that question at [44] of its reasons[13]:
The Tribunal has considered the first named applicant’s submission that Multi-Formwork and Hire Pty Ltd. is essentially the same operation as REI Construction Pty. Ltd., as it took over some of the contracts of REI Construction Pty. Ltd., carries out the same activities, the first named applicant is (and was) the director of both companies and Multi-Formwork and Hire Pty Ltd. purchased the equipment of REI Construction Pty. Ltd. In June 2007 all non current assets owned by REI Construction Pty. Ltd. were sold to Multi-Formwork and Hire Pty Ltd. The Tribunal accepts that Multi-Formwork and Hire Pty Ltd. is an undertaking that is very similar to the business that was REI Construction Pty. Ltd.
[13] CB 652
It might have been thought that the result of that enquiry would be that the Tribunal was satisfied in relation to the “main business” criterion in clause 845.213. Mr Ibrahim is engaged in the business of form work in the construction industry. That was his personal business before REI was incorporated and commenced undertaking the business. That was also the business of Multi-Formwork. However, in considering the characteristics of a “main business” the Tribunal needed to take into account the definitional characteristics set out in regulation 1.11. Those definitional characteristics required that the principal applicant must have had, at some stage, an ownership interest in the business and the applicant must have maintained direct and continuous involvement in management in the business from day to day in making decisions affecting the overall direction and performance of the business.
Here, at [45] of its reasons the Tribunal[14] got into further difficulty:
However, the Tribunal is of the view that although there are similarities between the two companies in respect of the company activity and management, REI Construction Pty. Ltd and Multi-Formwork and Hire Pty Ltd are not the same business. The Tribunal accepts that the first named applicant was forced by external factors into the situation that led to REI Construction Pty. Ltd being placed under external administration and then liquidated. Nevertheless, there must also have been a benefit to the first named applicant in winding up REI Construction Pty. Ltd. and establishing a new business, Multi-Formwork and Hire Pty Ltd., or he would not have done so. The first named applicant’s evidence to the Tribunal was that he was advised by his solicitor that when REI Construction Pty. Ltd. could not pay its creditors, the first named applicant risked becoming insolvent as a director so he traded under Multi-Formwork & Hire Pty Ltd. The Tribunal is of the view that one of the reasons why the first named applicant established a new business, Multi-Formwork & Hire Pty Ltd., was to avoid adverse personal consequences in the context of corporate law. The Tribunal also notes that the first named applicant was a shareholder of REI Construction Pty. Ltd. but he is not a shareholder of Multi-Formwork & Hire Pty Ltd; the second named visa applicant is the shareholder of this company. This leads the Tribunal to conclude that Multi-Formwork & Hire Pty Ltd is not the same business as REI Construction Pty. Ltd. The Tribunal is of the view that the first named applicant’s establishment of a new business with a different ownership arrangement is not consistent with his claim that REI Construction Pty. Ltd. and Multi-Formwork and Hire Pty Ltd. are essentially the same business.
[14] CB 652
The principal applicant’s motivation in ceasing trading under the legal structure of REI and continuing trading under the new company Multi-Formwork was irrelevant. A relevant question was whether there was a gap in the applicant’s involvement in management of the business from day to day for the purposes of regulation 1.11(b) but the Tribunal did not consider that question. Neither was it relevant that the principal applicant was not a shareholder in Multi-Formwork for the purposes of determining whether there was a “main business” at the relevant times. Regulation 1.11(a) only requires that the applicant has, or has had, an ownership interest in the business. In other words, for the business to be a “main business” the applicant’s ownership interest does not need to be continuous. The difficulty is that the Tribunal conflated the issue of whether there was, at the relevant times, a “main business” with the question of whether the principal applicant had a “ownership interest” in that business. These were separate but related questions. The latter must be determined by reference to s.134 of the Migration Act. The material before the Tribunal established that the principal applicant, while he had an ownership interest in the business at the time of application, did not have an “ownership interest” in the business at the time of the Tribunal decision. While having an ownership interest at the time of decision is not necessary for the purpose of establishing whether the business at the time of decision remains the “main business”, it is necessary for the purpose of establishing that the principal applicant continues to have an “ownership interest” in the main business. The confusion arises because having an ownership interest at some stage between application and decision is made relevant by regulation 1.1(1)(a) to determining whether there is a “main business” for the whole period, and also must be separately satisfied at the time of application and decision pursuant to clauses 845.213 and 845.221.
The Tribunal concluded at [46][15]:
The Tribunal does not accept that REI Construction Pty. Ltd and Multi-Formwork and Hire Pty Ltd are the same business. The Tribunal finds that REI Construction Pty. Ltd was the main business nominated on the visa application form and that Multi-Formwork and Hire Pty Ltd was not nominated as a main business on the visa application form. The Tribunal has considered that the second named applicant has an ownership interest in Multi-Formwork and Hire Pty Ltd. However, the Tribunal finds that neither the first named applicant nor his spouse had an ownership interest in Multi-Formwork and Hire Pty Ltd for at least 18 months immediately preceding the making of the visa application. The Tribunal finds that REI Construction Pty. Ltd. is not operating at the time of decision and that the first named applicant and his spouse do not have an ownership interest in REI Construction Pty. Ltd at the time of decision. The Tribunal is therefore not satisfied that at the time of decision, the applicants continue to have an ownership interest in the nominated main business. The Tribunal finds that the applicants do not continue to meet the requirements of cl.845.213 at the time of decision and therefore the applicants do not meet the requirements of cl.845.221. Given the Tribunal’s findings it is not necessary for the Tribunal to consider the other criteria. (emphasis added)
[15] CB 653
The Tribunal erred by taking into account irrelevant considerations in determining that REI and Multi-Formwork were not the same business. The Tribunal was distracted from a proper enquiry in relation to that question by focussing on the legal structures through which the business was conducted and the question of the ownership interest in the business at the time of its decision. However, on the material before the Tribunal the principal applicant could not qualify for the visa sought because he did not have an ownership interest in the business at the time of the visa decision. The Tribunal was correct on the material before it in not being satisfied that at the time of decision the applicants continued to have an “ownership interest” in the nominated “main business”.
Where the Tribunal errs in relation to an aspect of its reasoning in relation to applicable visa criteria but the decision is sustained on an independent basis, the error of the Tribunal is an error within jurisdiction and an applicant is not entitled to constitutional relief[16]. That is the situation here. In order to qualify for the visa sought the principal applicant had to satisfy both elements of the visa criteria in clauses 845.213 and 845.221 at the time of application and at the time of decision. The applicant had to satisfy the Tribunal that there was a “main business” at both points in time and that he had an “ownership interest” in it at both points in time. The Tribunal erred in considering whether there was a main business. The Tribunal did not err in considering whether the principal applicant had an ownership interest in the main business at the relevant times. Ultimately, it was that issue which was determinative of the application before the Tribunal. I conclude, therefore, that the errors made by the Tribunal were errors of law within jurisdiction.
[16] VBAP of 2002 v Minister for Immigration [2005] FCA 965 at [33]
I conclude that the Tribunal decision is a privative clause decision and the application must be dismissed. I will so order.
At a resumed hearing on 9 July 2009, I received, over the objection of the Minister’s counsel, the affidavit of the applicant’s accountant, Mr Mavrolefterou. That affidavit and the documents attached to it establish that Mr Ibrahim is the beneficiary under a trust established at approximately the same time as Multi-Formwork was established. The implication which I am invited to draw from that evidence is that, although Mr Ibrahim was not, at the time of the Tribunal decision, the legal owner of shares in Multi-Formwork, he was the beneficial owner, through the trust. The evidence does not go to an issue of jurisdictional error by the Tribunal because the evidence, although available to the applicants, was not presented to the Tribunal. Secondly, the evidence is deficient in that there is no evidence of whether the trust has a legal or equitable interest in any shares in Multi-Formwork. It may be that Mrs Ibrahim holds the shares in that company not on her own behalf but on behalf of the trust, but the evidence presented to me does not establish that. This is something that could be explored further by the Minister if he were minded to exercise his power of intervention pursuant to s.351 of the Migration Act. Another factor that might be borne in mind in such a consideration is the fact that Multi-Formwork was placed into external administration on 26 June 2009. That would seem to bear on the question of whether Mr Ibrahim was able to satisfy a decision maker that he has maintained direct and continuous involvement in the management of the business from day to day and in making decisions affecting the overall direction and performance of the business for the purposes of regulation 1.1(a)(b). That is beyond the scope of this proceeding.
Costs should follow the event. I see no reason to depart from the Court scale. I will order that the first and second applicants pay the first respondent’s costs and disbursements in accordance with the Court scale.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 24 July 2009
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