Kushner v MIAC - [2009] FMCA 390

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KUSHNER v MINISTER FOR IMMIGRATION & ANOR

[2009] FMCA 390

MIGRATION – Appeal from Administrative Appeals Tribunal decision – cancellation of a business visa – Tribunal not satisfied that the applicant’s business was a “business” or an “eligible business” – whether the Tribunal erred in its interpretation of the term “business” or overlooked relevant material, or took into account an irrelevant consideration considered – whether the applicant was denied procedural fairness considered – no reviewable error found.

WORDS AND PHRASES – “business”, “eligible business”.

Migration Act 1958 (Cth), s.134

Foroghi v Minister for Immigration [2001] FCA 1875
Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1
Koosasi v Minister for Immigration (2006) 43 AAR 462; [2006] FCA 1260
Re Association of Architects of Australia; ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298
Re Tang and Minister for Immigration [2000] AATA 997
Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483

Applicant:

MERVYN KUSHNER

First Respondent:

MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent:

ADMINISTRATIVE APPEALS TRIBUNAL

File Number:

SYG 170 of 2009

Judgment of:

Driver FM

Hearing date:

29 April 2009

Delivered at:

Sydney

Delivered on:

28 May 2009

REPRESENTATION

Counsel for the Applicant:

Mr N Poynder

Solicitors for the Applicant:

Diamond Conway Lawyers

Counsel for the Respondents:

Mr D Godwin

Solicitors for the Respondents:

DLA Phillips Fox

ORDERS

The application filed on 23 January 2009 is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 170 of 2009

MERVYN KUSHNER

Applicant

And

MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

Introduction and background

Section 134(1)(a) of the Migration Act 1958 (Cth) (“the Migration Act”) enables a business visa to be cancelled if the Minister is satisfied that its holder has not obtained a substantial ownership interest in an eligible business in Australia.
This is an appeal from the decision of the Administrative Appeals Tribunal (“the Tribunal”) to affirm the cancellation of the applicant’s visa. The Tribunal concluded that the two companies which the applicant put forward as being eligible businesses were not eligible businesses. The first reason given was that they were not “businesses”. The second was that even if they were “businesses” they were not “eligible businesses”.
The following statement of background facts is derived from the applicant’s written submissions filed on 22 April 2009 and the Minister’s written submissions filed on the same day.
The applicant’s business visa was granted in relation to an entity called Kushner Kids Productions, and this visa was cancelled by the delegate because of concerns relating to that entity. The applicant established a further entity in Australia called Gravy Clothing at about the time he was served with the Notice of Intention to Cancel (NOITC) his visa. In his appeal to the Tribunal the applicant also sought to rely upon Gravy Clothing as well as Kushner Kids Productions Pty Ltd (“Kushner Kids”). The Tribunal made findings concerning both entities. The applicant’s submissions have confined the questions before the Court to the Tribunal’s conclusion concerning Gravy Clothing.
The applicant is a national of South Africa. On 12 July 2004 he was granted a subclass 127 Business Owner visa.[1]
[1] Court Book (“CB”) at pp 47-49.
The applicant first entered Australia after the grant of his subclass 127 visa on 13 August 2004 and, over the next 40 months or so he made some 17 visits to Australia.[2]
[2] Decision of Tribunal at [25]; CB p 126.
In May 2002 the applicant had acquired an ownership interest in an Australian company, Kushner Kids[3], and on 25 May 2005 the business name, “Crazy About Oz”, was registered by Kushner Kids.[4] Kushner Kids was in the business of selling children’s clothing under the “Crazy about Oz” trademark to tourist outlets throughout Australia. The business sustained a series of operating losses between 2004 and 2007.[5]
[3]     See T-Documents p 58, qn 10 and p 59, qn 20; also T-Documents p 68.
[4]     T-Documents p 67.
[5]     See financial records of the company at T-Documents pp 72, 172 and 242.
On 13 July 2006 the first respondent (“the Minister”) requested that the applicant complete a 24 month survey of his business activity[6], to which he responded on 5 October 2006.[7] On 26 April 2007 the Minister’s Department sought further information[8] which was provided under cover of a letter from the applicant’s migration agent dated 21 May 2007.[9]
[6]     T-Documents p 55.
[7]     T-Documents pp 56-168.
[8]     T-Documents pp 169-170.
[9]     T-Documents pp 171-228.
On 13 June 2007 the applicant registered a second company, Gravy Clothing.[10]
[10] T-Documents p 298.
On 14 June 2007 the Minister’s Department issued the applicant and his wife with Notices of intention to consider cancellation of visa.[11] On 23 July 2007 the applicant’s migration agent responded to the Notices with updated information on Kushner Kids and information and documents relating to Gravy Clothing.[12]
[11] T-Documents pp 229-237.
[12] T-Documents pp 238-302
On 3 September 2007 the Minister’s delegate cancelled the applicant’s subclass 127 visa[13] and that of his wife.[14]
[13] T-Documents pp 5-22.
[14] T-Documents pp 303-305.
On review, the Tribunal convened a hearing on 29 April 2008. During the hearing the applicant gave evidence that, in light of the poor performance of Kushner Kids, he had taken other steps to increase his business dealings in Australia.[15] He explained that in about in February or March 2007 he and his wife had noticed clothing ranges which were not available in South Africa, which they had sourced to an Australian company called Austin Bros Group Pty Ltd (“Austin Bros”). He approached that company seeking to purchase clothing to export to South Africa, however the company said that it could not supply goods to South Africa, although it would supply an Australian-based company. The applicant thereupon set up Gravy Clothing, apparently to purchase goods from Austin Bros for export. He gave evidence that he had since placed a considerable order with Austin Bros, and that he had sourced another range of clothing for export from a company called Planet Earth, and “further items” from a Brisbane-based company called MDI. He said that he had already shipped the first consignment which was valued at $73,000.[16]
[15] Transcript at p 16, lines 4-30. The transcript of the hearing is annexed to the affidavit of Martin Pooley sworn on 3 April 2009.
[16] Transcript at p 16, lines 36-42.
The applicant’s counsel tendered a bundle of documents[17] which included a statement setting out the business history of Kushner Kids[18], with various annexures.[19] At the end of the statement the applicant said:
In addition to this business, I have registered another company called Gravy Clothing Pty Ltd through which I source clothing & accessories from Australian based companies and export to South Africa. I am currently negotiating to export merchandise to the Middle East as well. This new venture has in only four months generated turnover of $83,000 on which my net income from commissions will be $24 960 (Doc K).
[17]    Transcript at p 16, lines 44-45.
[18]    CB pp 24-29.
[19]    CB pp 21-22 and p 106.
“Doc K”[20] included statements and invoices from Austin Bros dated from 1 July 2007 to 22 November 2007. The invoices dated between 1 July 2007 and 10 July 2007 amounted to $23,918.75[21], those dated between 1 August 2007 and 23 October 2007 amounted to $41,836.25[22], and two invoices dated 22 November 2007 amounted to $146.37, making a total of $65,901.37 in purchases from Austin Bros. In addition there was a sales order dated 17 September 2007 from Gravy Clothing to MDI Australia for toys to the value of $1,051.05[23] and an invoice dated 22 November 2007 from Planet Earth Store to the applicant’s South African company for clothing to the value of $10,922.50.[24]
[20]    CB pp 90-106.
[21]    CB pp 91-92.
[22]    See CB p 90 and pp 93-98.
[23]    CB p 104.
[24]    CB pp 105-106.
The applicant claimed that the first shipment of the invoiced goods to South Africa had been sold out within two months. He claimed that he had subsequently placed large orders with all three companies and that he was negotiating with another company for goods for export to South Africa.[25] The applicant also claimed to be close to making a deal with a contact in Dubai to export the goods to Dubai.[26] He said that Austin Bros had since told him that he had become their biggest customer.[27]
[25]    Transcript at p 16 lines 46-47 to p 17 lines 1-6.
[26]    Transcript at p 17 lines 6-8 and p 31 lines 29-39.
[27]    Transcript at p 31 lines 36-37.
During oral submissions the respondent’s counsel accepted that Gravy Clothing was “no doubt making [the applicant] some money and more money than his primary company made”.[28]

The decision of the Tribunal

[28] Transcript at p 59 lines 4-5.

By a decision dated 24 December 2008[29] the Tribunal affirmed the decision to cancel the applicant’s business visa.
[29] CB 119-139.
After identifying the substantive issues[30] the Tribunal considered as a preliminary issue whether it was entitled to take into account material that originated after the date of cancellation of the visa, finding - in accordance with Shi v Migration Agents Registration Authority (2008) 248 ALR 390 - that it was required to take such material into account.[31]
[30] Decision at [2]-[7].
[31] Decision at [8]-[17].
The Tribunal summarised the applicant’s primary contentions[32] and the evidence before the Tribunal.[33]
[32] Decision at [18]-[22].
[33] Decision at [23]-[47].
The Tribunal then turned to the first primary issue, whether the applicant had a “substantial ownership interest in an eligible business in Australia”, as required by s 134(1)(a) of the Migration Act.
On the definition of “business”, the Tribunal referred to the decision of the High Court in Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 which was to the effect that a “business” is a "commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis". The Tribunal also referred to the Department’s Procedures Advice Manual, the Macquarie Dictionary definition of “business”, and the decision of the AAT in Re Tang and Minister for Immigration [2000] AATA 997 where, at [20], Deputy President McMahon emphasised the need for a “business” to be engaged in activities on a continuous and repetitive basis.[34]
[34] Decision at [51]-[57].
On the question of whether Kushner Kids or Gravy Clothing were “businesses” the Tribunal concluded that it was not satisfied that the activities that occurred in relation to either company amounted to a “business” within the meaning of s.134 of the Migration Act.[35] The Tribunal found that “the activities undertaken by both entities were ad hoc and for the purpose of a migration outcome rather than for establishing a business”.[36]
[35] Decision at [58].
[36] Decision at [58].
The Tribunal concluded that the “many documents” tendered by the applicant “do not prove very much”. It inferred that the applicant’s business activity had occurred in response to the 24 month survey and was in response the notice of intention to cancel the visa “to try to satisfy the criteria set out in the legislation”. The Tribunal considered that the applicant’s objective was to obtain citizenship.[37]
[37] Decision at [59].
In relation to Gravy Clothing the Tribunal went on:
I conclude that the establishment of Gravy Clothing reflects that Mr Kushner or his migration or legal representatives recognised that the activities of the Australian company were not sufficient to satisfy the relevant statutory criteria. Gravy Clothing was registered one day before the date of the notice of intention to cancel the visa was issued and after a request had been made for further information. The evidence shows that Austin has sent invoices to Gravy. There is no documentation that shows that the items were shipped.[38]
[38] Decision at [60].
The Tribunal made a similar observation in relation to Kushner Kids.[39]
[39] Decision at [61]-61].
The Tribunal considered that:
In the absence of documentation prepared independently of the Australian company or Gravy Clothing, for example documentation relating to shipments of goods and payments made, I am not persuaded of the extent of the activities alleged in relation to either "business".[40]
[40] Decision at [63].
The Tribunal then went on to consider the second primary issue, being whether Kushner Kids or Gravy Clothing were “eligible” businesses within the meaning of that definition in s.134(10). It concluded on this point[41]:
Even if either [Kushner Kids] or Gravy was a "business" I am not persuaded that either is an "eligible business" as defined in s.134(10) of the Act. The extent of the activities evident on the material before me does not lead me to believe that either is resulting in or will result in one or more of the outcomes (a) to (f) set out in the legislation. Given the scale of both businesses, I would not be satisfied that international links have been developed, employment has been created in Australia, that goods have been produced which would otherwise be undeveloped in Australia, or that they would lead to an increase in commercial activity or competitiveness.
[41] Decision at [64].
The Tribunal went on to find that the applicant had not made the requisite “genuine effort” under s.134(2)[42], and it declined to exercise its residual discretion not to cancel the visa.[43]

Reasoning of the Tribunal

[42] Decision at [66]-[72].

[43] Decision at [73]-[75].

The Tribunal referred to the definition of business in PAM 3 paragraph 7.3, it also had regard to the decision of McMahon DP in Re Tang v Minister for Immigration [2000] AATA 997. It concluded that business had the meaning as explained in items 2 and 3 of the Macquarie Dictionary: “2. Economics, the purchase and sale of goods in an attempt to make a profit, 3. Commerce, a person or partnership or corporation engaged in this; an established or going enterprise or concern; a clothing business.” The Tribunal decided that this was the ordinary meaning of the term and agreed with McMahon DP that the context required that the eligible business must have some element of continuity and repetition.
The Tribunal summarised Mr Kushner’s evidence about Gravy Clothing at [39]-[40]:
Mr Kushner also gave evidence about registering Gravy Clothing, through which he sources clothing and accessories from Australian based companies and exports them to South Africa. At the time of the hearing he said that he was currently negotiating the export of merchandise to the Middle East. In four months the new venture has generated turnover of $83,000, of which net income was $24,960. Invoices from Austin Bros Group Pty Ltd to Gravy Clothing were provided in support of this evidence. The earliest date on the invoices was 10 July 2007. The invoices appeared to be for T-shirts. There were also orders from Gravy Clothing to Austin Group. The earliest date appearing on any of the orders is 6 August 2007.
Another order to Gravy Clothing dated 17 September 2007, appeared to be for solar toys and other items, but not for clothing.
In relation to Gravy Clothing the Tribunal found at [60] that the establishment of Gravy Clothing reflects that Mr Kushner or his Migration Agent or his legal representatives recognised the activities of the Australian company were not sufficient to satisfy the relevant statutory criteria. The reason given for this finding was
·Gravy clothing was registered one day before the date the notice was issued and after a request had been made for further information.
·the evidence shows that Austin has sent an invoice to Gravy. There is no documentation that shows that the items were shipped.
Although there was a large amount of documentation before it, the Tribunal inferred that the activity which generated the documentation had occurred in response to the 24 month survey and in response to the notice of intention to cancel the visa to try and satisfy the criteria set out in the legislation (at [59]).
The Tribunal stated at [63] that in the absence of documentation prepared independently of Gravy Clothing (ie shipment of goods and payments made) it was not persuaded of the extent of the activities alleged in relation to it.
The Tribunal reasoned at [59] that the evidence supports the conclusion that Mr Kushner’s objective had been to obtain citizenship.
·this is reflected in his statement that he plans to move his South African operation to China when he has obtained citizenship;
·and the document setting out the time he has spent in Australia which refers to “the time completed towards citizenship”.
At [58] the Tribunal stated that it was not satisfied that the activities of either company amounted to a business. The Tribunal explained that it reached this conclusion because the activities undertaken by both entities were ad hoc and for the purpose of a migration outcome rather than for establishing a business.
In summary therefore the reasoning process of the Tribunal was:
(1)Looking at the documentation, there was little in the way of evidence from independent parties to show goods being paid for and delivered.
(2)The evidence indicated ad hoc activity.
(3)The ad hoc activity which the documentation evidenced appeared to be in response to the 24 month survey, the request for further information from the department and then the NOITC.
(4)The evidence supported the inference that the applicant’s objective was not the establishment of a business, but was the obtaining of Australian Citizenship.
(5)As a result of these factors the Tribunal was not prepared to give weight to documentation prepared by the company or, presumably, the otherwise uncorroborated oral evidence of Mr Kushner.
(6)When the ad hoc activities of the companies was considered together with the applicant’s purpose the RRT was not satisfied that either company was a genuine business.

The application, evidence and submissions

The grounds of the application are:
1.In finding that neither Kushner Kids Productions Pty Ltd nor Gravy Clothing Pty Ltd were “businesses” within the meaning of s.134(1) of the Act the second respondent:
(a) Erred in its interpretation of the term “business” as on the evidence it was not open to find that neither Kushner Kids Productions Pty Ltd nor Gravy Clothing Pty Ltd were “businesses”.
(b) Failed to consider relevant evidence, being independent documentation such as purchase orders from clients and invoices provided by suppliers, which corroborated the claimed business activities undertaken by Kushner Kids Productions Pty ltd and Gravy Clothing Pty Ltd.
(c) Took into account an irrelevant consideration, namely that Kushner Kids Productions Pty Ltd and Gravy Clothing Pty Ltd may have been established for the purpose of a migration outcome.
2. In finding that Gravy Clothing Pty Ltd was not an “eligible” business within the meaning of s.134(10) of the Act the second respondent:
(a) Failed to consider whether the business activity of Gravy Clothing Pty Ltd was resulting or would result in the export of Australian goods.
(b) Failed to consider evidence that Gravy Clothing Pty Ltd had purchased approximately $83,000 worth of goods which had then been exported from Australia.

I gave leave for an amended application to be filed by 1 May 2009 raising an additional ground which is:
3. The second respondent failed to accord the applicant natural justice.
Particulars
(a) During oral submissions the first respondent conceded:
(i)      that the applicant had not established Gravy Clothing for the ulterior purpose of “propping up his visa ambitions” (transcript, p58, lines 31-33); and
(ii)     that Gravy Clothing was “no doubt making [the applicant] some money and more money than his primary company [Kushner Kids] made” (transcript, page 59, lines 4-5).
(b) In its decision the Tribunal did not accept these concessions, relevantly finding:
(i)      the activities undertaken by Gravy Clothing were “for the purposes of a migration outcome rather than for establishing a business” (decision at [58]); and
(ii)     in the absence of independent documentation relating to the business activities alleged to have been undertaken by Gravy Clothing, it was not persuaded of the extent of these activities (decision at [63]).
(c) Having decided not to accept the first respondent’s concessions, the Tribunal was required as a matter of natural justice to so inform the applicant, to enable him to respond to these issues. It failed to so inform the applicant.
I received as evidence the court book filed on 2 March 2009 and the affidavit of Martin Pooley made on 3 April 2009, to which is annexed a transcript of the hearing before the Tribunal.
The applicant (Mr Kushner) contends that the Tribunal erred when it concluded that Gravy Clothing was not a “business” within the meaning of s.134(1) of the Migration Act. Mr Kushner contends that the evidence before the Tribunal supported a conclusion that Gravy Clothing was a business as that term is understood by reference to the decision of the High Court in Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9. The applicant contends, in effect, that the Tribunal was distracted from its proper enquiry by examining the motivation of Mr Kushner for establishing Gravy Clothing, rather than the question of whether it was a “business”.
The applicant also contends that the Tribunal erred in finding at [64][44] that Gravy Clothing had not and could not satisfy any of the outcomes in s.134(10)(a)-(f) of the Migration Act. Mr Kushner submits that Gravy Clothing was engaged in the business of export, which is the outcome referred to in s.134(10)(c). Mr Kushner notes that the Tribunal did not mention the export outcome in its finding at [64]. He contends that the Tribunal was required to give specific consideration to the then currently existing and possible future export activities of the company when determining the issue of whether it was an eligible business. He relies upon Koosasi v Minister for Immigration (2006) 43 AAR 462; [2006] FCA 1260.
[44] CB 135.
In relation to the third ground, Mr Kushner contends by reference to the transcript that the Minister had conceded that Gravy Clothing was a business engaged in trading, including export activities. He contends that he was denied procedural fairness by the Tribunal by not being alerted to the intention of the Tribunal not to accept those concessions and to proceed on another basis.
The Minister relevantly submits as follows:
Ground 1(a) and (b)
The First ground in the Application alleges that the [Tribunal] “Erred in its interpretation of the term “business” as “on the evidence it was not open” to find either enterprise was not a business.” It appears that the applicant now only seeks to attack the factual findings with respect to Gravy Clothing.
The High Court decision in Hope v Bathurst Shire Council (1980) 144 CLR 1 also centred around the meaning of the word “business” when used in the Local Government Act.
Mason J decided that the word was used in its ordinary meaning - being “a commercial enterprise as a going concern”. His Honour decided that whether business had its ordinary meaning was a question of law. If the ordinary meaning was used this meant that there would only be an error of law by the Tribunal if the material before the Tribunal could only reasonably admit of one conclusion, and that was different to the conclusion reached by the Tribunal.
Mason J decided that the facts found by the primary Judge in Hope could only support the conclusion that there was a business, and for this reason there was an error of law when the primary judge reached the opposite conclusion.
In this case there is consensus that, like Hope, the word “business” has its ordinary meaning. However, the [Tribunal] has not accepted all the evidence put forward in support of the business activities of Gravy Clothing. It has made a finding that it is not satisfied that the activities of Gravy clothing were as claimed by the applicant. This is very different from the situation in Hope where the evidence was accepted and factual findings of activity were made.
For this reason, it is submitted that the [Tribunal] will only have erred as alleged in ground 1(a) if the Court finds that the [Tribunal’s] reasoning process was not open on the evidence.
The applicant says that the finding that there was “no independent evidence of the activities alleged in relation to Gravy Clothing” was not open on the evidence. The submission of the applicant is that the invoices from Austin were independent evidence.
The Tribunal did not overlook the invoices. At 60 it said:
The evidence shows that Austin has sent invoices to Gravy. There is no documentation that shows that the items were shipped.
The conclusion of the Tribunal at [63] was:
In the absence of documentation prepared independently of the Australian company or Gravy Clothing, for example documentation relating to shipments of goods and payments made, I am not persuaded of the extent of the activities alleged in relation to either "business".
It is submitted that the applicant has misunderstood the Tribunal’s meaning. The [Tribunal] was influenced by the deficiency of independent material which evidenced that third parties had physically supplied goods to Gravy Clothing, or that Gravy Clothing had then exported the goods to South Africa. The Tribunal had regard to the invoices from Austin, but did not find they were adequate proof, of themselves, that the goods had in fact been supplied or then exported. There is no error in this reasoning. That an invoice was raised for goods does not prove that the amount of the invoice was paid and the goods were then shipped and received.
The independent probative material which the Tribunal considered was not in evidence was material that established that the third parties from whom the goods were ordered had been paid and they had delivered the goods. In the absence of such corroborative evidence the Tribunal did not have to accept the oral evidence of Mr Kushner concerning the company’s activities.
Ground 1(c)
This ground alleges that it was an irrelevant consideration that the companies were established for a migration outcome.
The [Tribunal] made a factual finding at [59] that Mr Kushner’s objective was to obtain citizenship. The migration outcome sought by the applicant provided a context in which the evidence of ad hoc activities could be viewed - the increased activity coinciding with particular immigration milestones. This was the reason why the [Tribunal] was not prepared to give weight to documentation which was authored by the companies themselves or Mr Kushner’s evidence about the activities of Gravy Clothing. This led to the overall conclusion that the companies were not in fact genuine businesses.
The evidence of the migration outcome sought was not irrelevant.
Conclusion on Ground 1
Ground 1 has not been made out. Even if one of the errors in Ground 1 were made out this would not necessarily entitle the applicant to relief, as the [Tribunal] had an alternative basis for its conclusion, that, assuming there was a business, it was not an “eligible business.” This is the subject of ground 2. The applicant needs to make out its case under both grounds 1 and ground 2 to be successful.
Ground 2(a) and (b)
Ground 2(a) alleges that the [Tribunal] failed to consider whether the business activity of Gravy Clothing was resulting or would result in the export of Australian goods.
At [64] of its reasons the [Tribunal] makes an express finding that it is not satisfied of the factors (a) to (f) in the definition of eligible business in respect of either company. It then lists those factors, but overlooks factor (c) which is “the export of Australian Goods and Services”.
In Foroghi v Minister for Immigration and Multicultural Affairs [2001] FCA 1875 Marshall J stated (at [48]):
Occasionally the RRT, like other decision-makers, delivers reasons for decision without 100% proof reading. Occasionally mistakes are not discovered even when the best proof readers have examined draft reasons. The existence of typographical error is best acknowledged rather than attempted to be exploited;
see also CCC v Minister for Immigration and Multicultural Affairs [2001] FCA 682; SZLPH v Minister for Immigration & Citizenship [2000] FCA 744
The [Tribunal] records at [39] that Mr Kushner gave evidence at the hearing that Gravy Clothing sources clothing and accessories from Australian companies and exports them to South Africa. He said he was also currently negotiating the export of merchandise to the Middle East.
This statement is also made in writing (CB28).
At [60] the [Tribunal] observes there is no documentation that items were shipped from Austin to Gravy. This leads to the finding by the [Tribunal] at [63] that in the absence of documentation relating to shipments and payments made it was not satisfied of the extent of the activities engaged in by either business. The finding in [63], when read in context, was a general rejection by the [Tribunal] of Mr Kushner’s claim that Gravy Clothing in fact exported goods to South Africa.
The [Tribunal] also considered that there would be no future export activity. This is made clear at [71]:
Mr Conyer submitted that Mr Kushner had set into train a series of events that would lead to the continuation and increase in profit of the business. I understood this submission to relate specifically to Gravy Clothing. As indicated above, I am not persuaded that Mr Kushner intends to continue the activities of either entity.
In relation to the procedural fairness ground, the Minister submits that the statements relied upon by Mr Kushner were not concessions in a strict legal sense and, in any event, they were made towards the end of the hearing after the Tribunal had already alerted Mr Kushner to its doubts on the questions of whether Gravy Clothing was a “business” or an “eligible business”. The Minister denies any want of procedural fairness in the circumstances.

The legislation

The power to cancel a business visa is in s.134 of the Migration Act, which relevantly provides:
(1)…the Minister may cancel a business visa…by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c)does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii) utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
27. The term, “eligible business” is defined in s.134(10) as follows:
“eligible business" means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.

Consideration

Did the Tribunal fall into error in determining that Gravy Clothing was not a “business”?

The Tribunal dealt with this matter in the following terms[45]:
[45] CB 131-135.
The first question is whether either of those entities is a "business" in the sense contemplated by the Act. The term is not defined.
Paragraph 7.3 of the Procedures and Advice Manual 3 (PAM 3) expressly endorses the approach of Mason J in Hope v Bathurst City Council, that a business may be regarded as being a "commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis".
Paragraph 7.3 of the PAM 3 sets out relevant policy considerations:
In ascertaining whether activities constitute the carrying on of a business, officers may, under policy, consider factors such as whether:
● transactions are entered into on a continuous and repetitive basis for the purpose of making a profit
● the activity has a permanent character, and how long it has been established;
● customers are sought and financial records are kept; and
● the activities are genuine and real.
The Tribunal will ordinarily apply lawful ministerial policy or departmental guidelines unless are cogent reasons not to: Re Drake and Minister for Immigration and Ethnic Affairs (No 2). To do so promotes consistency in decision-making: Skoljarev v Australian Fisheries Management Authority. I take the policy into account, however, it is necessary to consider the particular statutory provision.
The phrase considered in Hope was "carrying on a business", and Mason J emphasised the need (at 10):
to engage in a process of construction in order to arrive at the meaning of the word [business] in s 118 (1).
Section 134(10) of the Act does not include the phrase "carrying on".
The Macquarie Dictionary (Revised Third Edition) defines “business” as:
Noun 1. one’s occupation, profession, or trade. 2. Economics. the purchase and sale of goods in an attempt to make a profit. 3. Commerce. a person, partnership or corporation engaged in this; an established or going enterprise or concern: a clothing business. 4. volume of trade or patronage. 5. one’s place of work. 6. that with which one is principally or seriously concerned; 7. that with which one is rightfully concerned; 8. affair; matter.
In Re Tang and Minister for Immigration and Multicultural Affairs at [20], Deputy President McMahon said:
On these facts, it seems to me that Tiproll Pty Limited is not carrying on a business and its activities are therefore not an eligible business. The reference in subparagraph 134(1)(b) to the “day-to-day management of that business” indicates that an eligible business must have some element of continuity and repetition. In Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, Mason J considered that the use of the phrase “carrying on the business”, as a qualifier of the noun “business”, required that there be a commercial enterprise in the nature of a going concern “that is activities engaged in for the purpose of profit on a continuous and repetitive basis”. Similar qualifying words in section 134 would compel a similar result. There is no day-to-day activity of the business of Tiproll Pty Limited. It has had one export transaction to a company associated with Mr Tang. The evidence relating to lanolin and roller shutters does not add to the perception of a business requiring day-to-day management. In my view therefore what activities have been carried on by Tiproll Pty Limited cannot be described as an eligible business.

If I am wrong in my understanding of this term, it is certainly clear that Mr Tang has not used his skills in the day-to-day management of that business. Clearly the type of remote association which he has had with Tiproll Pty Limited is not the type of activity contemplated by the statute as appropriate for holders of visas of this type. From its language and from the visa conditions, it is apparent that the Act is intended to benefit business owners who settle here and actively manage that business.

The ordinary meaning of "business" in the second and third dictionary definitions quoted above, are relevant in my opinion. I would respectfully agree with Deputy President McMahon's conclusion that the language in s 134(1)(b) indicates that the eligible business must have some element of continuity and repetition. I note also the use of similar language in s 134(2)(b) and 134(2)(c) of the Act.
Taking into account all of the evidence, I am not satisfied that the activities that occurred in relation to either the Australian Company or Gravy constitute either as a business as that term is used in s 134 of the Act. I find that the activities undertaken by both entities were ad hoc and for the purpose of a migration outcome rather than for establishing a business.
While many documents have been tendered, in my view they do not prove very much. I infer that activity has occurred in response to the 24 month survey and in response the notice of intention to cancel the visa to try to satisfy the criteria set out in the legislation. I also infer from the evidence, that Mr Kushner has been easing himself out of the South African for the purpose of retirement. His travel over the years 2006 to the date of the hearing has been extensive and has included lengthy stays in the USA, where some of his children live, and Europe, particularly during the months of June to September. I am not persuaded that he has applied his undoubted business acumen to the establishment of a business in Australia. The evidence supports the conclusion that Mr Kushner's objective has been to obtain citizenship. This is reflected in his statement that he plans to move his South African operation to China when he has obtained citizenship and the document setting out the time he has spent in Australia which refers to the time completed towards citizenship.
I conclude that the establishment of Gravy Clothing reflects that Mr Kushner or his migration or legal representatives recognised that the activities of the Australian company were not sufficient to satisfy the relevant statutory criteria. Gravy Clothing was registered one day before the date of the notice of intention to cancel the visa was issued and after a request had been made for further information. The evidence shows that Austin has sent invoices to Gravy. There is no documentation that shows that the items were shipped.
A similar observation can be made in relation to the activities carried out by the Australian company. There are invoices from the Australian company, but scant documentation of orders having been placed, paid for, and shipped. Email communications from Mr Kushner referring to ranges of products and their success in other markets do not prove that there were serious negotiations on the part of the recipient of the email to purchase products.
Further, there are few invoices from the Australian company in the period 2005 to 2007, they are for relatively small amounts, and that company traded at a loss for the 2004/2005 and 2005/2006 financial years. The ad hoc activity of the Australian company is not consistent with employment of two family members and another person as asserted in the 24 month survey. The small scale of the activities is reflected in the use of a domestic garage as a "warehouse".
In the absence of documentation prepared independently of the Australian company or Gravy Clothing, for example documentation relating to shipments of goods and payments made, I am not persuaded of the extent of the activities alleged in relation to either "business".

It was apparent from the material before the Tribunal that Mr Kushner set up Gravy Clothing and commenced trading activities around the time of the 24 month survey by the Minister’s Department and, apparently, in the expectation that his pre-existing business involving the importation of clothing from South Africa might not entitle him to maintain his business visa. Nevertheless, the question of Mr Kushner’s motivation in setting up the Gravy Clothing business was a distraction from the enquiry required of the Tribunal unless it was directed to determining whether the business was a “business” for the purposes of s.134. There could be no doubt that Mr Kushner wished to obtain a migration outcome. That is why he applied for a visa. It may reasonably be assumed that any such visa applicant would have a similar motivation. However, Mr Kushner’s motivation for establishing a company and commencing trading activity was relevant to the issue before the Tribunal if it pointed to the business being a sham and not engaged in ongoing trading. The High Court in Hope v Bathurst City Council was dealing with an agistment business. Relevantly at 8-9 Mason J (as he then was) stated:
I accept, then, that "business' in the sub-section has the ordinary or popular meaning which it would be given in the expression "carrying on the business of grazing". It denotes grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis. Putting aside the question whether the activities have a "grazing" character, the critical issue for decision is whether the material before the Court reasonably admits of different conclusions on the question whether the appellant's activities constitute a "business". On the facts as found, I conclude that the appellant's activities amounted to a business and that no other conclusion was reasonably open. In this respect I agree with what Reynolds J.A. said in his dissenting judgment. Transactions were entered into on a continuous and repetitive basis for the purpose of making a profit. The activity had a permanent character in that it had been carried on without interruption since 1965. The appellant sought customers by advertising and kept appropriate financial records. The land, though small in area, was put to its best potential use and the pastures were improved and facilities including fences were provided for that use. There is nothing in the findings to suggest that the activities were other than genuine and real.
In the present case it was certainly arguable that Gravy Clothing was a “business”. Mr Kushner had submitted documentary evidence of trading activity, albeit recent. However, the evidence did not necessarily point to a going concern. While there was evidence of goods being ordered and billed for, there was scant evidence of payment or shipment of the goods. The evidence of trading activity was recent and the Tribunal regarded it as ad hoc activity. It was relatively small scale. In my view, on the material before it, the Tribunal was entitled to conclude that the business of Gravy Clothing lacked the important element of continuity and repetition over a reasonable period. The Tribunal lacked confidence that the asserted business was a going concern. The Tribunal was entitled to the conclusion it reached on the material before it. The Tribunal was also entitled to have regard to what it saw as Mr Kushner’s motivation in undertaking the trading activities in order to determine whether those activities amounted to a going concern.
Further, the Tribunal did not overlook any relevant material. The Tribunal referred to the evidence furnished by Mr Kushner in its reasons at [24]-[47][46]. The Tribunal expressly took into account the evidence at [58] and at [59][47] explained why it was not sufficient. Further explanation was provided at [61]-[63][48]
[46] CB 125-131.
[47] CB 134.
[48] CB 135.
I reject the first ground of review.

Did the Tribunal err in finding that Gravy Clothing was not an “eligible business”?

The Tribunal stated at [64][49]:
Even if either the Australian Company or Gravy was a "business" I am not persuaded that either is an "eligible business" as defined in s 134(10) of the Act. The extent of the activities evident on the material before me does not lead me to believe that either is resulting in or will result in one or more of the outcomes (a) to (f) set out in the legislation. Given the scale of both businesses, I would not be satisfied that international links have been developed, employment has been created in Australia, that goods have been produced which would otherwise be undeveloped in Australia, or that they would lead to an increase in commercial activity or competitiveness.
[49] CB 135.
The Tribunal continued at [66]-[72][50]:
Section 134(2) of the Act provides that I must not cancel the Mr Kushner’s business visa if I am satisfied that Mr Kushner has made a genuine effort to:
(a) obtain a substantial ownership interest in an eligible business Australia; and
(b) utilise his skills in actively participating at a senior level in the day-to-day management of that business;
[50] CB 136-137.
and that he intends to continue to make such genuine efforts.
In considering whether Mr Kushner has made the requisite “genuine effort” I may take into account, relevantly, under s 134(3) of the Act:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c) research that the person has undertaken into the conduct of an eligible business in Australia;
(d) the period or periods during which the person has been present in Australia;
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
...
There were no formal business proposals or plans or research undertaken for either the Australian business or Gravy clothing before me, which is rather surprising given Mr Kushner's obvious success in his South African business. The evidence indicates that the sales tended to be made when Mr Kushner visited various holiday and tourist destinations in Australia. Contributing to the sense of ad hocery is the evidence of the sale of T shirts in various wine growing areas, when the Australian company was concerned with children's clothing. There was also no evidence of the fashion range that was proposed for 2007.
While Mr Kushner has spent relatively long periods in Australia in more recent years, I find that this was directed to obtaining Australian citizenship rather than for the purpose of establishing and running a business.
While the visa application stated that Mr Kushner would transfer A$1,000,000 to Australia, and the Form 1010 asserted $500,000 had been transferred, the evidence does not reflect such large sums being transferred or assets being acquired.
Mr Conyer submitted that Mr Kushner had set into train a series of events that would lead to the continuation and increase in profit of the business. I understood this submission to relate specifically to Gravy Clothing. As indicated above, I am not persuaded that Mr Kushner intends to continue the activities of either entity.
I am not satisfied that Mr Kushner has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia or that he intends to continue to make such efforts. The provisions of s 134(2)(b) and (c) therefore do not arise for consideration.
Mr Kushner had asserted that the company had engaged in an export activity to the value of $78,000, although there was scant evidence to support his assertion. The Tribunal did not expressly deal with that assertion in its reasons. In Koosasi at [25] the Federal Court stated:
A fair reading of the Tribunal’s reasons for decision suggests that it is more likely than not that the Tribunal overlooked the need to determine whether it was reasonable to believe that the enterprise of Great Bamboo was resulting in one or more of the outcomes identified in (a)-(f) of the definition of ‘eligible business’. The Tribunal’s reasons for decision do not record any such determination. As stated above, had the Tribunal made such a determination or finding, s 43(2B) of the Administrative Appeals Tribunal Act obliged it to include it in its written reasons for decision together with a reference to the evidence or other material on which it was based.
It needs to be borne in mind that the finding at [64] is a secondary finding. The primary finding was that Mr Kushner was not operating a “business” for the purposes of s.134. I agree with the Minister that one should not place too much significance on what may have been a simple oversight in the identification of the particular component parts of s.134(10) at [64] of the Tribunal’s reasons[51]. In my view, it is apparent from the Tribunal’s reasons read as a whole that the Tribunal was unwilling to accept Mr Kushner’s assertions at face value. The Tribunal looked to the documentary evidence to substantiate his assertions and found that documentary evidence lacking. I accept the Minister’s submission that, at [63] of its reasons, the Tribunal implicitly rejected that the company or Gravy Clothing was engaged in an export business (or any business at all).
[51] see Foroghi v Minister for Immigration [2001] FCA 1875 at [48].
I reject the second ground of review.

Did the Tribunal deny Mr Kushner procedural fairness in adopting a less generous view of Mr Kushner’s activities than that contended for by the Minister?

In the course of making submissions to the Tribunal, counsel for the Minister stated[52]:
First, the applicant has established a company in Australia and has sought to trade under the banner of that company in Australia in the tourist clothing industry and that company’s name is Kushner Kids Productions Pty Limited. It is further not in dispute that the company Kushner Kids Productions has managed to make some sales since it was established and it has also attracted some interest from a small group of buyers in Australia. It is not in dispute that the company at present is not a profitable business although Mr Kushner intends the business to become profitable in the future which is a statement that one would expect from the owner of a business who wishes the business to do well in the future.
[52] transcript, page 53, lines 9-17.
Later, in an exchange with the presiding member, counsel stated[53]:
Yes. So in this case, there is a one third interest in the company for Mr Kushner and that is the interest that the [T]ribunal must be concerned with. To say that his family members also own interests does not in some way elevate Mr Kushner’s interest in the business. However, my submission is that a one third interest in the company is not an insubstantial interest, particularly in cases if the [T]ribunal is satisfied that the value of the company is not an insubstantial amount. So simply on the basis of percentage, the [M]inister concedes that that is a substantial percentage.
[53] transcript, page 56, lines 39-46.
Later, counsel stated[54]:
In the evidence of Mr Kushner, Gravy Clothing was set up by him in order to somewhat revitalise his financial prospects with doing business in Australia at a time when his principal company, Kushner Kids Productions – yes, Kushner Kids – was not drawing a great deal of net profit. It is not my submission that Mr Kushner embarked upon that company and on this new business with an intention of propping up his visa ambitions and I make that submission simply because there is no evidence to suggest to such a malevolent intent behind Mr Kushner’s creation of the company, although certainly, the company was registered at around about the time that the Department sent the notice of intention to consider cancelling his 127 visa.
[54] transcript, page 58, lines 27-37.
Lastly, counsel stated[55]:
Nevertheless, whilst the company is no doubt making Mr Kushner some money and more money than his primary company made, it is simply another business that he is involved in and one that does not – or cannot – improve the prospects of his other company. They are separate businesses and although there was some evidence given today orally that Mr Kushner has been advised by his accountant that those businesses can be drawn together in order to operate as a single business, in my submission, that is something that will happen in the future.
[55] transcript, page 59, line 4-10.
Counsel’s statements need to be read in context. The Minister’s position was that the business relied upon by Mr Kushner was not an eligible business at the date of cancellation of his visa on 3 September 2007 and that the Tribunal could not take into account material arising after that date. The Tribunal (correctly, in my view) rejected that contention made on behalf of the Minister[56]. The Minister did not appear to be contending that the business relied upon by Mr Kushner was not a “business” but was, rather, contending that the business was not an “eligible business” at the relevant time. As is plain from the Tribunal’s reasons, the Tribunal proceeded upon a different basis of reasoning to that contended for by the Minister. The Minister in this case does not admit that a concession in any strict legal sense was made before the Tribunal but, even if it was, the Minister submits that the concession was conditional and ceased to have relevance once the Tribunal rejected the Minister’s position: see Re Association of Architects of Australia; ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298. That decision may be contrasted with the decision of Davies J in Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483.
[56] see the Tribunal decision at [8]-[17] at CB121-124.
I accept that both propositions contended for are tenable. On balance, I am not persuaded that there was a denial of procedural fairness on the facts of this case. First, it is apparent from the Tribunal’s questioning of Mr Kushner and the exchanges with counsel for Mr Kushner[57] that the Tribunal was not necessarily restricting its consideration to the period before the cancellation of the visa. It was apparent that the Tribunal required to be persuaded that Mr Kushner was operating an eligible business over any period. Secondly, Mr Kushner was seeking to introduce evidence that the Minister contended before the Tribunal could not be taken into account. The obvious purpose of introducing that evidence was to establish that Mr Kushner operated an eligible business. There was no reason to believe that Mr Kushner was holding back any evidence in light of the Minister’s position. Further, Mr Kushner had completed presenting his evidence when counsel for the Minister made his submissions. Although the Minister appeared to concede that Mr Kushner’s business was a “business” (but not an “eligible business” at the relevant time) the proceedings before the Tribunal were inquisitorial, not adversarial and the Tribunal was in no way bound by any concession made on behalf of the Minister. In the circumstances, I reject the proposition that the Tribunal was under an obligation in this case to alert Mr Kushner, prior to its decision, to its intention to reject the Minister’s submissions and to proceed on a different basis. On the issue of the receipt of evidence, the Tribunal proceeded on the basis contended for by Mr Kushner and he could have been in no doubt as to the general issues he had to persuade the Tribunal about.
[57] see the transcript from pages 37-52
I reject the third ground of review.
I will order that the application filed on 23 January 2009 be dismissed.
I will hear the parties as to costs.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 28 May 2009