LIU v Minister for Immigration
[2016] FCCA 2364
•9 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LIU & ORS v MINISTER FOR IMMIGRATION & ANOR | [2016] FCCA 2364 |
| Catchwords: MIGRATION – Application for review of decision of Migration Review Tribunal (Tribunal) affirming decision not to grant applicants Business Skills (Residence) (Class DF) visa (Business visa) – whether the Tribunal failed to take into account or incorrectly took into account matters in considering whether the first applicant was a person who maintained a 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 (relevant criterion) - whether the Tribunal misunderstood or misapplied the correct construction of the relevant criterion – whether it was reasonably open to the Tribunal not to be satisfied the first applicant satisfied the relevant criterion – no jurisdictional error. |
| Legislation: Migration Act 1958 (Cth), s.134(10) Migration Regulations 1994 (Cth), reg.1.03, 1.11, 1.11(b) |
| Cases cited: Lobo v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 168 Parra v Minister for Immigration & Multicultural Affairs [2000] FCA 85 SBBA v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 90 |
| First Applicant: | FENGYUN LIU |
| Second Applicant: | HUANYONG REN |
| Third Applicant: | CHONGWU REN |
| Fourth Applicant: | CHONGDE REN |
| First Respondent: | MINISTER FOR IMMIGRATION & BORDER PROTECTION |
| Second Respondent: | ADMINISTRATIVE APPEALS TRIBUNAL |
| File Number: | SYG 2311 of 2014 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 5 August 2015 |
| Delivered at: | Sydney |
| Delivered on: | 9 September 2016 |
REPRESENTATION
| Solicitors for the Applicant: | Mr C Guan of Paul Guan & Associates |
| Solicitors for the Respondents: | Mr L Dennis of Sparke Helmore Lawyers |
ORDERS
The application is dismissed.
The Administrative Appeals Tribunal is substituted for the Migration Review Tribunal as the second respondent.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2311 of 2014
| FENGYUN LIU |
First Applicant
| HUANYONG REN |
Second Applicant
| CHONGWU REN |
Third Applicant
| CHONGDE REN |
Fourth Applicant
And
| MINISTER FOR IMMIGRATION & BORDER PROTECTION |
First Respondent
| ADMINISTRATIVE APPEALS TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The question raised by this application for judicial review is whether the second respondent (Tribunal) made a jurisdictional error in concluding it was not satisfied the first applicant (applicant) maintained direct and continuous involvement in a business conducted by a company of which the applicant was the major shareholder.
Background
On 27 August 2012 the applicant applied for a Business Skills (Residence) (Class DF) visa (Business visa). The applicant’s husband and children also applied for a Business visa, but as members of the family unit of which the applicant was a member.
To have been entitled to a Business visa, the applicant had to satisfy the criteria prescribed by subclass 890 of Schedule 2 to the Migration Regulations 1994 (Cth) (Regulations). Relevant to the application before me is cl.890.211 of Schedule 2 to the Regulations, which provides:
The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
Reg.1.03 of the Regulations provides that “ownership interest” has the meaning given to that expression in s.134(10) of the Migration Act 1958 (Cth) (Act). Under that subsection, “ownership interest”, in relation to a business, is defined to mean
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.
Under reg.1.11 of the Regulations, a business is a “main business in relation to an applicant for a visa” if, among other things:
(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
. . . .
(d) the business is a qualifying business.
“Qualifying business” is defined in reg.1.03 as:
an enterprise that:
(a) is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and
(b) is not operated primarily or substantially for the purpose of speculative or passive investment.
In her application for a Business visa, the applicant claimed she held 55% of the issued shares of a company (ST) of which she was a director and its chief financial controller.[1] She claimed she was involved in the daily business operations and management of ST, she provided leadership and vision, she oversaw all purchasing and payroll activity for staff and “participants”, she monitored banking activities of ST, she oversaw accounts payable and accounts receivable, inventory of the stocks of ST, and the preparation of annual financial reports, quarterly business activity statements, and she provided “vision regarding overall financial health of the company”.[2] The application was supported by a large number of documents. These included minutes of meetings, invoices issued by and to ST, PAYG summaries, insurance policies, transfer of shares, business activity statements, bank account statements, financial statements, inventory reports, and photographs of the business premises.
[1] CB151
[2] CB151
Before the Tribunal, the applicant gave evidence about how she came to invest in ST, and the nature of ST’s business, which consisted in the provision of wholesale and retail computer parts. The applicant also gave evidence about other matters. The applicant said she has no information technology experience or technical experience; she was unable to explain clearly who ST’s main clients were because she does not speak very good English, although she did later state that ST’s clients included large, medium, and small businesses, and that ST have about 400 irregular clients and 100 regular clients. The applicant said she was unsure about the identity of ST’s suppliers because Mr G, ST’s other director, looked after them. Ms J, an employee, looks after the accounts, procurement, and the paperwork for the accounts payable and receivables. And ST uses a chartered accountant to prepare all the financial statements and reports, BAS, and tax returns.
In response to the Tribunal’s request that the applicant describe her main role in ST and her day to day duties, the applicant said she attends the business premises every weekday from 9 am to 5 pm, she is a board member and major shareholder, and is in charge of ST’s finances. In response to the Tribunal’s request that she provide more examples of her involvement in the management of the business from day to day, the applicant said she checks on staff of which, at the time the applicant gave her evidence, there was only one, she looks after the accounts payable and receivables, and is in charge of all the finances. The applicant said that Ms J looks after procurement, accounts payable and receivables, calls customers if accounts are not paid, collects data to give to the accountant, and if Ms J suggests ST purchase new products, the applicant would give her approval and sign a cheque. In response to the Tribunal’s request that she provide an example of decisions the applicant had made that affected the overall direction and performance of ST, the applicant said that at the end of 2010 the applicant suggested ST move premises to save money, and she also suggested ST use recycled paper to print invoices. She also suggested ST undertake more promotions to promote new products, although the applicant has not prepared any promotional material herself.
The applicant also said she is unable to read any of the invoices, financial statements or other reports because her English is poor. She gets Ms J to translate to her. Because of her poor English, the applicant also does not communicate with suppliers or customers; it is Mr G and Ms J who do that.
Mr G also gave evidence before the Tribunal. He said the applicant put a lot of money into ST; she had given him opinions and suggestions about how to run ST; the applicant has a good relationship with the employees; she has suggested increasing promotions and is good with figures, and she monitored the accounts. Mr G agreed that, due to her lack of English, the applicant was unable to deal directly with customers. In a statutory declaration, Mr G gave further details of the role the applicant performed in ST’s business.
The Tribunal’s decision
The Tribunal accepted the applicant was one of two directors of ST during the relevant period, that she has invested money in ST, and that she has had some involvement in the business of ST. The Tribunal did not accept, however, the applicant maintained direct and continuous involvement in the management of ST’s business from day to day and in making decisions affecting the overall direction and performance of the business.
First, the Tribunal found the applicant’s response to the Tribunal’s request she provide specific examples of her involvement in the management of the business from day to day to be “vague, limited and lacking in detail”.[3] The Tribunal noted the following:
a)Although the applicant claimed she is in charge of the finances, Ms J undertook most of the duties relating to the financial management of ST. The applicant agreed Ms J was responsible for the accounts receivables and payable, for contacting customers who had not paid, and collecting financial data to give to ST’s accountant. The applicant also agreed that she is unable to undertake any of these tasks because she does not read English and does not understand any of the documentation; the applicant relies on Ms J to translate for her.[4]
b)Although the applicant claimed she had suggested ST do more promotions, she was unable to explain how she had designed or implemented a strategy for improving promotions.[5]
c)Although the applicant claimed she was in charge of procurement of new products, the only task the applicant claimed she undertook when the Tribunal requested that she explain this further was that she signed cheques after Ms J suggested ST purchase new products.[6]
[3] CB759, [42]
[4] CB759, [42]
[5] CB759, [43]
[6] CB759, [43]
Second, the Tribunal found that many of the applicant’s claims about her role in ST’s business, as set out in in her written and oral evidence, were exaggerated, and did not reflect the reality of the applicant’s involvement in the business.[7] The Tribunal referred to the applicant’s stating in her written statement that she oversaw purchase and payroll activity, monitored banking activity, oversaw accounts payable and accounts receivable, oversaw stock levels and the preparation of financial statements and BAS, yet at the hearing the applicant acknowledged these tasks were done by Mr G, Ms J or ST’s accountant.[8]
[7] CB760, [45]
[8] CB760, [45]
Third, the applicant was unable to explain key aspects of ST’s business. The applicant demonstrated limited knowledge of the business; she was unable to name any key clients, and, due to her lack of English, does not communicate with any customer or supplier.[9]
[9] CB760, [46]
Fourth, although the Tribunal accepted the applicant signed off financial statements, and cheques, it gave limited weight to the applicant’s doing so. The Tribunal said that the signing of documents does not demonstrate direct and continuous involvement in the management of a business, noting that a “director can sign documents as a formality without being involved in the management of the business from day to day”.[10] The Tribunal also referred to purchase and sales invoices which, it was claimed, had been signed by the applicant. The Tribunal, however, gave these no weight, “given the applicant’s own evidence that she cannot read the invoices and leaves all accounts payable and receivable tasks to Ms” J, and also because most of the invoices were addressed either to Mr G or Ms J.[11] The Tribunal also found that the minutes of meeting of directors and shareholders did not overcome the Tribunal’s concerns.[12]
[10] CB760, [47]
[11] CB760, [48]
[12] CN761, [49]
The Tribunal also said it considered other evidence. First, there was Mr G. The Tribunal did not accept the applicant supervised Ms J because the Tribunal considered Ms J to be an experienced employee who did not require direct supervision from the applicant; and it otherwise did not consider Mr G’s evidence overcame the Tribunal’s concerns arising out of the applicant’s inability to provide specific examples or documentary evidence to support her claims.[13]
[13] CB760, [50]
The Tribunal referred to supporting letters from the current and former employee, a client of ST, and two suppliers to ST. These letters did not overcome the Tribunal’s concerns, particularly the letters from the client and suppliers, given the applicant acknowledged she had no contact with clients and suppliers because of her limited English.[14]
[14] CB760, [51]
Grounds of review
In her amended application, the applicant raises two grounds of review.
First ground
The first ground is:
In arriving at its findings, the second respondent committed jurisdictional errors by ignoring relevant material and or by failure to seek clarification in a way that affects the exercise of its power imposed in the Migration Act.
Particulars
(a) The applicant cannot speak or understand English and does not have IT background.
(b) In her daily involvement in management and making decision [sic] for her Australian business operations she has to reply on the translation, reports and explanation from her staff.
(c) However, the second respondent had ignored such factors and had failed to seek clarification when needed, resulting in many of its findings adverse to the applicant and affecting the exercise of its power. For example,
(d) “The Tribunal does not accept that signing financial statements or cheques as a director of the company, demonstrates direct and continuous involvement in the management of the business from day to day. A director can sign documents as a formality without being involved in the management of the business from day to day” (The tribunal decision, para 47, Court Book p760)
(e) “The applicant has provided a number of purchase and sales invoices, some of which may have been initialled by her. The Tribunal does not give these any weight, given the applicant’s own evidence that she cannot read the invoices…” (The tribunal decision, para 48, Court Book p760)
(f) “The Tribunal gives less weight to the letters from the client and the suppliers as the applicant herself acknowledged at the hearing that she has no contact with clients or suppliers due to her limited English ability.” (The tribunal decision, para 51, Court Book p761)
Taken literally, the material it appears this ground claims the Tribunal failed to take into account is the applicant’s inability to speak or understand English, and the applicant’s having to rely on the translation, reports and explanation from her staff. If that is the intended meaning of the ground, it cannot succeed. The Tribunal did take into account these matters, and they were matters on which the Tribunal relied in concluding it was not satisfied the applicant maintained direct and continuous involvement in the management of ST’s business from day to day, and in making decisions affecting the overall direction and performance of the business. The applicant’s real complaint, however, appears to be that the Tribunal ought not to have relied on these matters for so concluding or, at the very least, the Tribunal ought not to have relied on these matters to the extent that it did rely on them, given the voluminous documentary evidence, and other evidence that was before the Tribunal.
In the hearing before me, Mr Guan, who appeared for the applicant, referred to documents that were before the Tribunal that bore the signature of the applicant. Mr Guan directed my attention to ST’s trading statement for the year ended 31 May 2012,[15] a letter of offer of employment dated 1 July 2010 signed by the applicant on behalf of ST,[16] the applicant’s written statement to which I have already referred,[17] invoices,[18] tax invoices,[19] and inventory summaries.[20] Mr Guan submitted the Tribunal did not consider this evidence properly. Mr Guan also submitted the Tribunal failed to seek, and ought to have sought, clarification of the processes by which and the circumstances in which the applicant signed these documents.
[15] CB61
[16] CB84
[17] CB151
[18] CB174-217
[19] CB227-242
[20] CB250-372
In assessing this part of the applicant’s case, it is necessary to be aware that, in concluding it was not satisfied the applicant had direct and continuous involvement in ST’s business from day to day, and in making decisions affecting the overall direction and performance of the business, the Tribunal relied on a number of matters. In addition to relying on the applicant’s poor command of English, the Tribunal relied on, among other things, the applicant’s inability to explain key aspects of ST’s business, her inability to identify the names of major clients and suppliers, and the applicant’s making exaggerated claims about her role in ST’s business. When considered together with these matters, it was reasonably open to the Tribunal to rely on the applicant’s poor English for not accepting that the applicant maintained direct and continuous involvement in the management of ST’s business from day to day, and in making decisions affecting the overall direction and performance of the business, even though there was before the Tribunal substantial documentary evidence that bore the applicant’s signature, and even though there was other evidence, including that of Mr G, on which the applicant relied.
I turn to the claim that the Tribunal ought to have sought clarification from the applicant about the circumstances in which she signed the business documents. That implies the Tribunal was obliged to seek such clarification. That is not correct. It was a matter for the applicant to provide such clarification as was necessary to explain the circumstances in which she came to sign the documents. As was said by Wilcox J in Parra v Minister for Immigration & Multicultural Affairs:[21]
[I]t is no part of a tribunal's function to make good a case claimed by an applicant. Still less would it be part of a tribunal’s function to make good a case, which the applicant has not articulated, only because there is some evidence of elements of a claim.
[21] [2000] FCA 85 at [13] (Wilcox J) part of which was quoted with approval in SBBA v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 90 at [8] (Weinberg, Stone, and Jacobson JJ) and in Minister for Immigration & Multicultural Affairs v Islam [2001] FCA 1681 at [17]-[18] (Carr, Conti, and Stone JJ)
Finally, and in any event, it is not clear what clarification it is contended the Tribunal should have sought from the applicant which the Tribunal failed to seek. The Tribunal asked the applicant non-leading questions which provided the applicant with the opportunity to give as much information about her role in ST’s business, and about the circumstances in which she signed documents. Her ability to provide such information was enhanced by her representative being present with her at the hearing before the Tribunal.
Ground 1, therefore, fails.
Second ground
The second ground is as follows (emphasis in original):
The second respondent (the tribunal) committed jurisdictional errors by failure to find that the applicant has met the requirements of r.1.11(1)(b).
Particulars
(a) The regulation requires satisfaction on the part of the second respondent that the applicant for the visa as the owner of an interest in a main business … maintained direct and continuous involvement in the management of that business from day to day and in making decisions that affected the overall direction and performance of that business.
(b) This did not import that the applicant needed to hold a dominant or principal role in the business.
(c) Nor did it import that the applicant must be qualified technically to some extent or possess English language competence to some extent before the applicant can have eligibility to get involved and have impacts.
(d) Nor did it import that the applicant has to perform particular tasks or the applicant has ability/skills to perform them in relation to the business operations.
(e) There is a variety of ways in which a person might maintain direct and continuous involvement in the management of a business and in making decisions affecting its overall direction and performance.
(f) With the assistance of translation, reports and explanation from her staff, the applicant had been involved in the business management and decision making in the capacity of company director and chief financial controller.
(g) She went to work every weekday, signed employment contract for the company, gave directions to her employees, decided on the payment and signed the cheques for the business, decided on business premises, promotion business sales, signed on business financial statements, attended on and or chaired the board meetings.
(h) According to another director, [Mr G] “… She has given him opinions and suggestions on how to run the company and has developed a good relationship with the employees. She has suggested increasing promotions and is good with figures. She monitors the accounts. This frees him up to deal with sales and the technical support aspects of the business. Mr [G] agreed that due to her lack of English, the applicant was unable to deal directly with customers but she has made him think about customer relations.” (The tribunal decision, para 32, Court Book pp 757-758)
(i) According to another director, [Mr G] “…the applicant has given attention to the work performance of the staff. She has suggested ways on how to secure customers and how to improve communication with customers. She has given attention to the financial health of the company, establishing good payment systems, checking payments and ensuring a healthy cash flow. She has stressed the importance of maintaining good relationships with suppliers and customers. She regularly checks the status of stocks, proposing sales plans and promotion plans. At the end of the year she will propose an operation plan for the new year, stressing ways on how to secure new customers and expand market share and save on costs.” (The tribunal decision, para 32, Court Book p758)
In his written submissions, Mr Guan submits the applicant relies on Lobo v Minister for Immigration & Multicultural & Indigenous Affairs.[22] In that case, the Tribunal assessed the applicant’s satisfaction of cl.845.216 of Schedule 2 to the Regulations, which was the same as reg.1.11(b) of the Regulations, by reference to departmental policy which the Minister conceded was narrower than cl.845.216. The policy required that the applicant “has the ability to manage and operate a main business successfully”, and that that required the applicant demonstrate he or she “exercised responsibility within the main business(es) in terms of decision-making, authority, responsibility for employees and/or responsibility for expenditure”.[23] In a passage on which the applicant relies, the Full Federal Court said:[24]
The criterion requires satisfaction on the part of the Minister that the applicant for the visa as the owner of an interest in a main business ‘… maintained direct and continuous involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business or those businesses’. This did not import a requirement that could only be satisfied by demonstrating the exercise of responsibility within the business in terms of decision-making authority, responsibility for employees and/or responsibility for expenditure. There is a variety of ways in which a person might maintain direct and continuous involvement in the management of a business and in making decisions affecting its overall direction and performance.
[22] [2003] FCAFC 168
[23] [2003] FCAFC 168 at [30]
[24] [2003] FCAFC 168 at [63]
The applicant also relied on the following passage from the judgment of the primary judge quoted in the judgment of the Full Federal Court:[25]
The key words in cl 845.216 are “involvement in” which (it is accepted by counsel for the respondent) govern both the reference to management and decision-making. This is linked with the fact that the clause contemplates that an applicant can be the owner of an interest in the business rather than the whole of the business. By contrast, the Policy refers to the applicant having the ability to manage and operate a whole business successfully. So far as cl 3.5.2 of the Policy is concerned, the use of the word “responsibility” in the first two dot points is different from the requirement of “involvement in”. There is no basis in the statutory criterion at all for the third dot point.
[25] [2003] FCAFC 168 at [35]
In his written submissions, Mr Guan submits there is no doubt that the facts have shown the applicant had been involved in the business management and in making decisions for her main business in Australia, though she may not possess the skills fundamental to the business operation or have direct influence on it.[26]
[26] The Applicants’ Outline of Submissions, [27]
The Tribunal referred to Lobo, and stated what it considered to be the effect of that decision as follows:[27]
The Court specified that there are a variety of ways in which a person might maintain direct and continuous involvement in the management of a business and in making decisions affecting its overall direction and performance. A person involved in the ‘management of the business’ does not necessarily have to manage the whole of the business. The Tribunal must have regard to the whole circumstances and requirements of the individual business.
[27] CB759, [39]
This represents a correct statement of the effect of the decision in Lobo. It is, however, possible that, having correctly stated the effect of Lobo, the Tribunal purported to apply Lobo in a manner that demonstrates the Tribunal misunderstood Lobo. Mr Guan seeks to demonstrate just that; and he seeks to do so by pointing to evidence which, he submits, indicates that the applicant unquestionably met reg.1.11(b) of the Regulations.
It may be that in certain circumstances the findings of the Tribunal may be so disconnected from the evidence that was before it as to suggest the Tribunal did not in fact correctly understand or apply a relevant criterion. That cannot be said of the findings the Tribunal made on the basis of the evidence that was before it. The evidence on which Mr Guan relies for submitting the applicant satisfied reg.1.11(b) of the Regulations does not take into account all of the evidence the Tribunal considered. The evidence the Tribunal considered was not such that the only conclusion that could reasonably have been reached on the basis of it was that the applicant maintained direct and continuous involvement in the management of ST’s business from day to day and in making decisions affecting the overall direction and performance of that business. Stated another way, it was reasonably open to the Tribunal not to be satisfied the applicant had such involvement in ST’s business.
Ground 2, therefore, also fails.
Other matters
The Tribunal found it did not have jurisdiction to entertain an application for review before it in so far as it was purportedly made by the applicant’s husband. Mr Guan informed the Court that the applicant’s husband, although a party to these proceedings, does not press a claim the Tribunal erred in concluding it did not have jurisdiction to entertain an application for review by him.
Disposition
I propose to order that the proceedings be dismissed. I also propose to order that the Administrative Appeals Tribunal be substituted for the Migration Review Tribunal.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 9 September 2016
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