Lu v MIAC

[2009] FMCA 891

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LU & ANOR v MINISTER FOR IMMIGRATION & ANOR [2009] FMCA 891

MIGRATION – Application to review decision of Administrative Appeals Tribunal – cancellation of business skills visa – whether Tribunal misconstrued or misinterpreted the word “business” in s.134 of the Migration Act or failed to consider the applicants’ claims – whether no evidence for finding or failure to consider evidence.

Administrative Appeals Tribunal Act 1975 (Cth), ss.39, 43

Migration Act 1958 (Cth), ss.54, 134, 135

Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 225 CLR 88
Craig v The State of South Australia (1995) 184 CLR 163
Hope v The Council of the City of Bathurst (1980) 144 CLR 1
Kushner v Minister for Immigration & Anor [2009] FMCA 390
Liang v Minister for Immigration and Citizenship and Another (2009) 175 FCR 184
Minister for Immigration & Multicultural Affairs v SBAA [2002] FCAFC 195
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323
NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No2) (2004) 144 FCR 1
NAJT v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 51
Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448
Re Australian Industrial Relations Commission and Others; Ex parte Australian Transport Officers Federation and Others (1990) 171 CLR 216
SZDGC v Minister for Immigration and Citizenship and Another (2008) 105 ALD 25
SZFVL v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 223 ALR 747
SZJRU v Minister for Immigration and Citizenship and Another (2009) 108 ALD 515
SZKHD v Minister for Immigration and Citizenship [2008] FCA 112
Toro Martinez v Minister for Immigration & Citizenship [2009] FCA 528
WAFP v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 319

Applicants: CHUN HOU LU & SHAO HWA WANG

First Respondent: MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent: ADMINISTRATIVE APPEALS TRIBUNAL

File Number: SYG 2723 of 2008

Judgment of: Barnes FM

Hearing date: 3 August 2009

Date of Last Submission: 7 August 2009

Delivered at: Sydney

Delivered on: 22 September 2009

REPRESENTATION

Counsel for the Applicants: Mr L Karp

Solicitors for the Applicant: Ren Zhou Lawyers

Counsel for the Respondent: Mr JAC Potts

Solicitors for the Respondent: Clayton Utz

ORDERS

1. That a writ in the nature of certiorari issue directed to the second respondent, quashing the following decisions made by the Administrative Appeals Tribunal made on 25 September 2008:

   (a)the decision in relation to the first applicant in proceedings no. 2007/3912; and

   (b)the decision in relation to the second applicant in proceedings no. 2007/3913. 

2. That a writ in the nature of mandamus issue directed to the second respondent, requiring the second respondent to determine according to law the following applications made to the Administrative Appeals Tribunal on 17 August 2007:

   (a)the application of the first applicant in proceedings no. 2007/3912; and

   (b)the application of the second applicant in proceedings no. 2007/3913. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2723 of 2008

CHUN HOU LU & SHAO HWA WANG

Applicants

And

MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

Background: Cancellation of Business Visas

1. This is an application for review of decisions of the Administrative Appeals Tribunal (the Tribunal) dated 25 September 2008 affirming decisions of a delegate of the first respondent to cancel Business Skills (Migrant) (Class AD) (Subclass 127 – Business Owner) visas held by each of the applicants. 

2. The application filed in this Court on 22 October 2008 also sought review of decisions in relation to three children of the first and second applicants. Orders were made by consent on 6 July 2009 remitting for reconsideration the decisions in relation to those applicants on the basis that they had not been given written notices in accordance with s.135(1) of the Migration Act 1958 (Cth) that the Minister proposed to cancel their visas. That leaves for consideration in these proceedings the applications for review on the part of Mr Lu, the first applicant, and his wife Ms Wang, the second applicant.

3. Mr Lu, the primary visa applicant, is a Taiwanese businessman who stated in his visa application of 22 February 2003 that his occupation from 1982 to 2003 had been as a “DYEING INDUSTRY COMPANY PRESIDENT”.  He gave details of his role and of his interest in other business opportunities in trade, export and joint ventures.  He was granted a business skills visa in February 2004.  Ms Wang was also granted a Subclass 127 visa as a member of Mr Lu’s family.  They arrived in Australia in February 2004. 

4. On 1 February 2006 the Department wrote to Mr Lu seeking completion of a Form 1010 entitled “Survey of Business Skills Migrant - 24 Months”, to which he responded through his agent in Taiwan.  In response to the survey Mr Lu’s agent informed the Department in a letter dated 2 April 2006 that Mr Lu had registered a company known as G Ping Australia Pty Ltd (G Ping) in November 2005 to identify Australian products for export to Taiwan and to introduce products to Australia in the hope of attracting a joint venture for their production in the long run.  In late 2005/early 2006 he had secured a reliable supplier and had started exporting goods to Taiwan.

5. The agent claimed that Mr Lu and his wife were “co-working for the business in Australia.”  The family had settled in New South Wales, but Mr Lu had returned to Taiwan to explore marketing opportunities.  Ms Wang was said to be using her language skills to build up business contacts in Australia and to act on Mr Lu’s instructions in G Ping, while Mr Lu’s Taiwanese business imported the products from Australia.  Supporting documents were provided. 

6. On 19 February 2007 the Department notified the agent in writing of an intention to cancel Mr Lu’s visa on the basis that he had “provided insufficient evidence to demonstrate that he [had] made, or [was] intending to make, a genuine effort to obtain a substantial ownership interest in an eligible business in Australia and to use his skills in actively managing the business”. 

7. In response to the notice of intention to cancel the visa, further submissions in a letter dated 12 April 2007 were made to the effect that Mr Lu had established a new business in Taiwan called Jason Tech Textile Co Ltd (Jason Tech) as a counterpart of his Australian business G Ping and that having a Taiwanese-based arm of the business was essential to marketing efforts.  It was claimed that G Ping researched, sourced products and liaised with Australian suppliers, that Ms Wang operated G Ping under Mr Lu’s instructions and that Mr Lu had leased a showroom in Taipei to exhibit Australian products.

8. Mr Lu’s agent also provided a large number of documents to the Department on the basis that he would “try to sample some fundamental documents for your reference with abstract translation rather than forward them in bulk considering the size of the documentation.”  Such documentation indicated that G Ping was purchasing skin care and cosmetic products and some pet food from a number of Australian suppliers and using freight forwarding companies to send the goods to Jason Tech in Taiwan. 

9. On 27 July 2007 a delegate of the Minister decided to cancel the applicants’ visas under s.134 of the Migration Act. The applicants applied to the Tribunal for review of the delegate’s decisions.

The Tribunal decision

1. On 25 September 2008 the Tribunal affirmed the decisions to cancel the visas.  In its decision the Tribunal summarised the issues before it as: whether G Ping was a “business”; whether it was an “eligible business”; whether Mr Lu was “utilising his skills in actively participating at a senior level in the day-to-day management of that business”; whether he continued to “hold a substantial ownership interest in an eligible business and participate at a senior level in the day-to-day management of an eligible business”; whether he had “made a genuine effort to obtain a substantial ownership interest in an eligible business and participate at a senior level in the day-to-day management”; and whether he intended to “continue to make such genuine efforts”. 

2. The Tribunal recorded that if Mr Lu did not succeed on these issues it had to consider whether to exercise its residual discretion not to cancel his visa and whether Ms Wang (and/or each of the other family members) could demonstrate that the cancellation of their visas would result in extreme hardship.  The Tribunal also addressed the issue of whether “proper notice [was] given of the intention to cancel the visas”.  No issue is taken in these proceedings in relation to the adequacy of the notice given to Mr Lu or to Ms Wang. 

3. Before turning to the substance of the Tribunal decision it is relevant to note that s.134 of the Act, which deals with cancellation of business visas, is as follows:

   (1)    Subject to subsection (2) and to section 135, 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.

4. Subsection (2) provides that:

   The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

   (a)     has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

   (b)     has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day‑to‑day management of that business; and

   (c)     intends to continue to make such genuine efforts.

5. Subsection (3) provides that the Minister may take into account certain matters in determining whether a person has made genuine efforts.  Other subsections deal with particular issues in relation to cancellation of a business visa.  Concepts such as “eligible business” and “established business in Australia visa” are defined in s.134(10) of the Act.

6. In its reasons for decision the Tribunal pointed out that there was no relevant definition of “business” in the Migration Act. It referred to the approach taken by the High Court in Hope v The Council of the City of Bathurst (1980) 144 CLR 1 in which Mason J stated that the indicia of a “business” included “activities engaged in for the purpose of profit on a continuous and repetitive basis” and also that a business may be carried on in a “small way”. 

7. The Tribunal described Mr Lu’s claims in his visa application and the evidence before it in relation to the establishment of G Ping in Australia.  It noted that the “visa was granted in February 2004, that Mr Lu first entered Australia using the visa” that month, that G Ping “was incorporated in Australia on 8 November 2005”, that “Mr Lu and his wife [were] the only shareholders” and that A$100,000 had been invested in the business. 

8. The Tribunal referred to the applicant’s claim about his activities, including that by the time of the Tribunal hearing “it was claimed that G Ping had shipped goods worth more than A$166,388.25 from Australia to Taiwan during 2006 and 2007”.  It found that the evidence showed “that the goods purchased and/or shipped were mostly cosmetics or health-care products”, “[s]ome pet foods and items of clothing”, and that “[a]ll consignments were to Jason Tech”.  The Tribunal observed that “[s]ome documents showed that Jason Tech and not G Ping had ordered the goods”.  The Tribunal referred to G Ping trading accounts for the years ending 2006 and 2007 showing gross trading profits of about A$12,900 and A$39,400 respectively and, in respect of profits from ordinary activities before income tax, a loss in the year ending 2006 of A$1,579.21 and a profit in 2007 of A$3,025.27. 

9. The Tribunal addressed evidence about the activities of Jason Tech in Taiwan, including its agreement with the Taiwan Textile Research Institute to develop and promote bamboo-charcoal textile products and the fact that it had leased a showroom in Taipei to promote and sell Australian products shipped to Taiwan by G Ping.

10. The Tribunal found that “[r]ecords other than those generated by G Ping show[ed] that the first shipment of goods was made on 18 January 2006” from a third party with an invoice “addressed to Jason Tech”.  The most recent freight invoice in evidence before the Tribunal was said to be dated 3 November 2007.  The Tribunal continued: 

    Having considered all the material provided on behalf of Mr Lu and his family, I am not persuaded that goods worth $166,000 have actually been shipped.  I do not find invoices between G Ping and Jason Tech, or lists of shipments prepared on behalf of Mr Lu and his family members, to be persuasive evidence that the transactions have taken place.  Evidence from entities independent of Mr Lu and his family, which corroborates the transactions, is reliable.  However, when that material is considered, it does not support the case asserted on behalf of Mr Lu and his family. 

    The evidence of the shipment of goods, including Air Waybills and Bills of Lading to both Jason Tech and G Ping, does not show the value of the goods shipped, and is in total for a relatively small amount.   The invoices from independent suppliers establish that the value of goods purchased by G Ping and Jason Tech is much less than the claimed A$166,388.25, in the order of only A$8,000.

11. The Tribunal found that “bank records for G Ping and Mr Lu, as its Director” were “not helpful because of the absence of evidence that establishes the claimed value of the goods purchased and shipped by G Ping”.  It observed that the “amounts on the invoices from G Ping to Jason Tech were more than double the amount that went into G Ping’s bank account”.  It found that that Mr Lu “only remitted funds twice a year, rather than in respect of each shipment of goods” and that this was not “a usual business practice” as the Tribunal understood it.  

12. The Tribunal did not accept the evidence of Mr Lu and his wife about the activities of G Ping and Jason Tech or about the amount of time they spent on activities related to the identification of goods that may be successfully marketed in Taiwan, their purchase, shipment and resale.  It found: “[o]n the evidence, the actual shipments made would have required relatively very little effort or time to organise.”

13. On the basis of these findings, the Tribunal concluded that G Ping was not a “business” within the meaning of s.134(1) of the Act and that:

    To the extent that it has engaged in activity, that activity has not been for the purpose of profit, but rather in order to achieve a migration outcome.  Further, the activities have not been continuous and repetitive, but rather, have been undertaken on an ad hoc basis, to a related company, Jason Tech. 

14. The Tribunal went on to find that as G Ping was not a “business” it followed that it could not be an “eligible business” as defined in s.134(10). Hence it found that Mr Lu had not obtained a substantial ownership interest in an eligible business (see s.134(1)(a)), that he was not utilising his skills in the day-to-day management of such a business in Australia (see s.134(1)(b)) and that he did not have the intention to continue to do so provided for in s.134(1)(c) of the Act. On this basis it found that all three grounds for cancellation of Mr Lu’s visa were satisfied.

15. The Tribunal also found that Mr Lu did not satisfy s.134(2) of the Act, which provides that a visa must not be cancelled if the decision-maker is satisfied that the visa holder “has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia”.  It found that the efforts to “incorporate G Ping, ship goods from Australia, and resell them in Taiwan through Jason Tech, ha[d] been for the purpose of a migration outcome, and not to obtain a substantial ownership interest in an eligible business in Australia”. On this basis, the Tribunal found that it followed that Mr Lu also did not satisfy s.134(2)(b) and (c) of the Act in relation to a genuine effort to utilise his skills in managing the business and an intention to continue to make such genuine efforts. It observed that there was no evidence that Mr Lu was proposing to seek a relevant interest and participate in any business in Australia apart from G Ping.

16. The Tribunal then addressed whether it should exercise its residual discretion not to cancel the visas, referring to claims about Mr Lu’s activities in severing his links with a previous Taiwanese business, his English studies, the family’s move to Australia, the sale of their house in Taiwan and other matters submitted in relation to the issue of discretion.  On the evidence before it the Tribunal inferred “that Mr Lu ha[d] to earn money undertaking some business activity in Taiwan which is within his area of expertise, in order to support his family who [were] living in Australia”.  The Tribunal saw “no prospect of [Mr Lu] being in a position to satisfy the requirements set out in the legislation or that he [had] such an intention in the future” and found that the preferable decision was that his business visa be cancelled.

17. The Tribunal also considered the issue of extreme hardship in relation to Ms Wang (and the three children), but decided that cancellation would not result in extreme hardship to them within s.134(5) of the Act.

These Proceedings

1. The applicants rely on an amended application filed on 11 June 2009.  There are four grounds in the amended application.  Counsel for the applicants explained that grounds one and two were related, as were grounds three and four. 

2. The first ground in the amended application is that the Tribunal “committed jurisdictional error by misconstruing or misinterpreting the word, “business” as used s134 of the Migration Act”. The particulars are that the Tribunal erred in “equating the business of the applicant with the entity through which that business was said to be carried out”. 

3. Associated with this, the second ground is that “[t]he Tribunal committed jurisdictional error by failing to consider the applicants’ claims”.  The particulars are that Mr Lu’s claim “was that the relevant business was an integrated enterprise consisting of operations in both Australia and Taiwan”, but that “[t]he Tribunal considered only the activities of the entity through which the business situated in Australia was conducted”. 

4. The third ground is that “[t]here was no evidence for the Tribunal’s finding that invoices from independent suppliers establish that the value of goods purchased by G Ping was in the order of only A$8,000”. 

5. The fourth ground is in the alternative to ground three.  It is that “the Tribunal erred in failing to consider evidence before it to the effect that G Ping Australia Pty Ltd had made a considerable number of purchases of Australian goods, worth several tens of thousands of Australian dollars, between April 2006 and February 2007”. 

Grounds 1 and 2: “business”

1. Counsel for the applicants submitted first that Mr Lu’s case as presented to the Tribunal was that he had established an integrated business whereby G Ping conducted research into Australian goods suitable for export to Taiwan, acquired those goods and had them shipped to Jason Tech for display and sale at Jason Tech’s showroom in Taiwan.  It was submitted that if the commercial activities underlying these claims were established, there could be no doubt that a business as described by Mason J in Hope at 8 – 9 would exist, or that such a business would be an “eligible business” as defined in s.134(1) of the Migration Act. Reference was made to the fact that Logan J stated in Liang v Minister for Immigration and Citizenship and Another (2009) 175 FCR 184 at [30] that the word “business”, as used in terms “main business” and “qualifying business” in the Migration Regulations 1994 (Cth), was used in the sense of “enterprise.”  A similar meaning was said to be applicable to the word “business” in s.134 of the Act.

1. It was also submitted that it appeared from the Tribunal’s statement of issues that the Tribunal did not understand that a business was an “enterprise” rather than an entity (see Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448). Mr Lu’s case was said to be that his business was carried out using both Jason Tech and G Ping, but the Tribunal was said to have made the mistake of equating Mr Lu’s business with G Ping, an entity used to carry on that business. It was contended that the Tribunal misinterpreted the word “business” and hence could not lawfully have considered whether an eligible business in terms of s.134(10) of the Act existed. In this way the Tribunal was said to have misinterpreted the applicable law and also to have failed to consider the claim that the applicants actually made, as contended in grounds one and two of the amended application.

2. The first respondent submitted that the Tribunal did not misunderstand the meaning of “business” in the context of s.134 of the Migration Act and that insofar as the applicants submitted that the Tribunal had misapplied s.134(1)(a) by failing to examine all the activities of the posited business in Australia, the applicants failed at an earlier step because the Tribunal was not prepared to accept that the activities that they relied on were bona fide business activities, but found rather that the activities had been engaged in to achieve a migration outcome.

3. Counsel for the first respondent contended that the Tribunal was clearly aware of the arguments that Jason Tech was a counterpart of G Ping and that this was a necessary mechanism to facilitate marketing efforts considering the business culture and environment in Taiwan and had referred to the agent’s submission in this regard in its reasons for decision.  The Tribunal was said to have taken this argument into account.  Contrary to the applicant’s contention, it was said that the Tribunal had not misunderstood the nature of the business or incorrectly or impermissibly confined its attention to G Ping. 

4. It was submitted that the Tribunal had not proceeded on the assumption that one could only conduct a business through a particular formal entity.  Rather, on the facts of the case as presented to the Department and Tribunal, it was said to be apparent that the “business” asserted to be carried on in Australia was a business said to be undertaken by the entity G Ping, being an entity in which the first applicant and his wife claimed to hold a substantial ownership interest through their shareholding in that company. 

5. In oral submissions counsel for the first respondent contended that a further difficulty facing the applicant in relation to grounds one and two was that under s.134 of the Migration Act the business in question must be an eligible business in Australia. Hence it was the business conducted in Australia by the entity G Ping (Australia) Pty Ltd that was in issue. This was said to have been recognised in the submissions to the Department by Mr Lu’s agent. It was submitted that the Tribunal did not misunderstand the statutory concept of “business” in the manner contended for by the applicant and did not misstate any relevant question on that issue such as to demonstrate a failure to appreciate the task it was required to undertake in completing the review.  It was submitted that had the Tribunal considered the business undertaken by Jason Tech as a business for the purposes of s.134 it would have erred, because that was not a business conducted in Australia. 

6. There is no definition of “business” in the Migration Act. In Hope Mason J (at 8 – 9) considered the meaning of the concept “business” in the phrase “carrying on a business” within the rating provisions of the Local Government Act 1919 (NSW). In that context the phrase “carrying on a business” was said to denote “activities engaged in for the purpose of profit on a continuous and repetitive basis”. 

7. As Branson J pointed  out in Nassif at [28] the dictionary definitions of “business” are numerous and diverse but, as Mason CJ, Gaudron and McHugh JJ observed in Re Australian Industrial Relations Commission and Others; Ex parte Australian Transport Officers Federation and Others (1990) 171 CLR 216 at 226, “[o]f all words, the word “business” is notorious for taking its colour and its content from its surroundings …”. 

8. It has been held that in the context of the Migration Regulations the word “business” is used in a commercial sense meaning “enterprise”, that the business need not be carried on by a single entity and that a legal entity can conduct more than one business (see Nassif at [32] – [35] and Liang at [30] – [31]). In the context of s.134 of the Migration Act I am satisfied that the word “business” is used in a commercial sense to mean a commercial enterprise or going concern and that, consistent with the definition of “ownership interest” in relation to a business in s.134(10) (which refers to a shareholder in “a” company or a partner in “a” partnership that carried on the business), a business does not mean a separate legal entity and need not be carried on by a single entity (see Nassif at [34] – [35]).

9. However I am not persuaded that the Tribunal erred in equating the concept of a business with an entity or that it failed to consider the applicant’s claim in the manner contended for in grounds one and two of the amended application. As submitted for the first respondent, on the basis of the claims and material before it, the Tribunal properly approached the issue in terms of the requirements of s.134(1) of the Act, which in subsection (1)(a) refers to a substantial ownership interest in “an eligible business in Australia”.  The reference in s.134(1)(b) to “that business” is clearly a reference to such an eligible business in Australia, while s.134(1)(c) again specifically refers to an “eligible business in Australia.”  It is also notable that an “eligible business” is defined in s.134(10) as:

   … 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.

10. Accordingly the Tribunal did not err in considering whether there was a business in Australia. 

11. Importantly, the only “business in Australia” posited by the applicants or identifiable on the material before the Tribunal was the business conducted by G Ping. 

12. The fact that the Tribunal considered whether G Ping was a “business” (as a first step in considering whether it was an “eligible business”) and then whether it was satisfied that Mr Lu had not obtained “a substantial ownership interest in an eligible business” in Australia or was otherwise within s.134(1)(b) or (c) (all of which relate to a business in Australia) does not establish that it misconstrued or misinterpreted the word “business” as used in s.134 of the Act. It has not been established that the Tribunal proceeded on the assumption that one could only conduct a business through a particular formal entity and that this was the basis for its consideration of whether G Ping was a business within s.134(1). Rather, as the first respondent submitted, it considered whether there was a commercial enterprise or going concern in Australia in accordance with s.134 of the Act on the evidence before it.

13. Ground two is that the Tribunal failed to consider the claim that the business was an integrated enterprise, consisting of operations in both Australia and Taiwan, and that it only considered the activities of the entity through which the business situated in Australia was conducted. 

14. As s.134 required consideration of whether there was a business that was an “eligible business in Australia”, the Tribunal did not err in the manner in which it considered the activities of G Ping in Australia.  It had regard to the applicant’s contentions about the “counterpart” of Jason Tech in Taiwan and the manner in which Mr Lu and his wife operated their business.  It has not been established that the Tribunal misconstrued or misinterpreted the word “business” as used in s.134 of the Act or that it failed to consider the applicant’s claims about the manner in which the claimed business operated. 

15. These grounds are not made out.

Grounds 3 and 4 and incorrect factual finding

1. The applicant contended that the reference in s.134(1)(a) of the Act to the visa holder having a substantial ownership interest in an eligible business in Australia required the Tribunal to examine all the activities of the posited business in Australia.  It was submitted that the Tribunal did not appear to have adopted this approach, but rather that it considered superficially the evidence of goods being sent from G Ping in Australia to Jason Tech in Taiwan.  The Tribunal dismissed some evidence of goods shipped to Taiwan on the basis that it did not trust the evidence prepared on behalf of Mr Lu and his family.  While it found that evidence independent of the family was reliable, the Tribunal nonetheless found that such evidence did not support the applicant’s case on the basis that invoices from independent suppliers established that the value of goods purchased by G Ping and shipped to Jason Tech was much less than the claimed A$166,388.25 and was in the order of A$8,000.  The applicant took issue with the accuracy and implications of this finding. 

2. It was submitted that the value of goods purchased by G Ping and shipped to Jason Tech was, on the evidence before the Tribunal, considerably more than A$8,000.  Counsel for the applicants pointed to the fact that invoices submitted by Mr Lu’s agent from suppliers independent of Mr Lu, Jason Tech and G Ping contained in the Court Book (which the agent had described as only a “sample”) indicated that G Ping had placed orders worth in excess of $60,000 with a number of independent suppliers between about April 2006 and February 2007. 

3. Counsel for the first respondent did not contend that this finding was incorrect and provided the Court with a list of such orders prepared as an aide memoire, which revealed evidence in the material before the Tribunal of independent orders by G Ping in the vicinity of just under $65,000 from independent suppliers in the period between early 2006 and early 2007. 

4. The applicant contended that the Tribunal’s conclusion in this respect either had no basis in the evidence before the Tribunal or revealed that it had failed to have regard to all the evidence before it.  It was submitted that to rely on a fact for which there was no evidence constituted jurisdictional error.  Reference was made to SZJRU v Minister for Immigration and Citizenship and Another (2009) 108 ALD 515 at [51] – [56] and the authorities cited therein. In the alternative there was said to have been a failure to consider evidence or information essential to the applicant’s case, as considered in WAFP v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 319 at [16] – [19], NAJT v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 51 at [212] – [213] and [229] and Minister for Immigration & Multicultural Affairs v SBAA [2002] FCAFC 195 at [31] and [44].

5. Counsel for the applicants submitted that these errors undermined the Tribunal decision and that if the Tribunal had considered and accepted the evidence of substantial purchases of goods in Australia by G Ping, it would then have considered what was done with those goods and on this basis may have been satisfied that G Ping was an eligible business in Australia and that there was no basis for cancellation of Mr Lu’s visa under s.134(1) of the Act.

6. In particular, it was contended that if the Tribunal had regard to the evidence of invoices from independent suppliers and the value of goods purchased in the relevant period this would have affected the findings that it made in relation to matters such as the time taken to organise actual shipments.  The Tribunal had concluded that this would have required very little effort or time to organise.  It was submitted that the orders valued at A$8,000 directly related to the Tribunal’s conclusion that, on the evidence, the actual shipments would have required relatively little effort or time to organise.  On this basis it was submitted that the Tribunal came to a conclusion that was entirely unsupported by the evidence or that it did not have regard to the evidence.

7. The first respondent submitted that the reference to A$8,000 was a mere factual error and not such that the Court should infer that the assessment of the value of actual shipments at A$8,000 was the critical foundation stone for its ultimate conclusion.  Counsel for the first respondent acknowledged that if the Court was persuaded that there was a critical factual error that was the bedrock or foundation stone for conclusions adverse to the applicant, it would grant relief on the basis that there was a jurisdictional error, however characterised.  However counsel for the first respondent contended that, notwithstanding the factual error, when the Tribunal reasons for decision were considered it could be said that while it made an error in relation to the amount of transactions, nothing really turned on this and that the Tribunal had had regard to all of the material before it and it was submitted that the Tribunal’s findings were not such that it could be concluded that the applicants did not get the review to which they were entitled. 

8. In NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No2) (2004) 144 FCR 1 the Full Court of the Federal Court considered the extent to which a factual error on the part of the Tribunal may evidence or constitute a failure to carry out its review function or otherwise amount to a failure of jurisdiction. The Court stated at [53] – [54]:

   It is desirable first to restate the uncontroversial proposition that mere factual error by the Tribunal will not ground judicial review unless it relates to a jurisdictional fact or is a manifestation of some error of law, substantive or procedural, which constitutes jurisdictional error and thereby vitiates the purported decision.  This is evident from the discussion, in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, of jurisdictional error as a ground for the review of Tribunal decisions under the former Pt 8 of the Migration Act.  If the Tribunal identifies a wrong issue or poses the wrong question for itself or does not have regard to relevant material or takes into account irrelevant material, so as to affect the exercise of its powers, error of law and/or jurisdictional error may be identified (at 351-352 per McHugh, Gummow and Hayne JJ).  An error of fact in the course of a decision is unlikely to be a jurisdictional error unless the fact is a jurisdictional fact:

   Courts should be slow to find that an erroneous finding of fact or an error of reasoning in finding a fact, made in the course of making a decision, demonstrates that an administrative tribunal so misunderstood the question it had to decide that its error constituted a jurisdictional error.

   Re Minister for Immigration and Multicultural Affairs; Ex parte Cohen (2001) 177 ALR 473 [75 ALJR 542] at [35] per McHugh J.

   The question was further discussed in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165. McHugh and Gummow JJ, with whom Callinan J agreed, rejected a submission by the Minister that the presence of an error of law was essential for a finding of jurisdictional error to support the grant of relief under s 75(v) of the Constitution.  They said (at [54]):

   The introduction into this realm of discourse of a distinction between errors of fact and law, to supplant or exhaust the field of reference of jurisdictional error, is not to be supported.

   Error of law may occur within jurisdiction: S20/2002 at [57]. The line drawn between factual and legal matters may vary according to the purposes it serves: at [58]. Their Honours cautioned against importing into s 75(v) wider approaches to the consideration of factual errors derived from statutory jurisdictions providing for appeals on questions of law or systems of judicial review. Examples of such jurisdictions are the jurisdiction conferred on the Federal Court by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) to hear appeals from AAT decisions on questions of law and that conferred on the Court by the Administrative Decisions (Judicial Review) Act 1977 (Cth). The observations in the joint judgment in S20/2002 did not offer any clear guidance upon the circumstances in which factual error may amount to jurisdictional error for the purposes of the exercise by the High Court of its constitutional jurisdiction under s 75(v) or the exercise by this Court of its analogous statutory jurisdiction under s 39B of the Judiciary Act.  The comments did, however, indicate that, absent a question of jurisdictional fact, which in itself may be a matter of some complexity involving questions of fact and law, the circumstances in which factual error will amount to or evidence jurisdictional error are likely to be quite limited.

9. While the circumstances in which an error of fact amounts to or evidences a jurisdictional error are likely to be quite limited, there are circumstances in which this may occur, some of which were referred to in the submissions for the applicant. 

10. Having regard to the Tribunal reasons for decision and the nature of the factual error in issue, I am satisfied on the material before me that in the particular circumstances of this case the factual error was of such fundamental importance as to establish a miscarriage of the fact-finding process.

11. It is relevant to have regard first to the nature of the inquiry being undertaken by the Tribunal.  As stated at the commencement of its reasons for decision, the Tribunal was considering whether G Ping was “a business”, as part of a consideration of the requirements of s.134 of the Act.  In that context it referred to and applied the definition of “business” in Hope.  In Hope the High Court was considering whether certain activities constituted “carrying on a business” within the meaning of s.118(1) of the Local Government Act 1919.   In that context Mason J was of the view that “business” was used in its ordinary meaning.  His Honour pointed out that the word “business” had many meanings and suggested that one of the meanings in the Shorter Oxford Dictionary of “[a] commercial enterprise as a going concern”, came closest to the popular meaning which appeared to have been acted on in the case before him in relation to the meaning of the word “business” as used in the expression “carrying on a business”.  As discussed above, it is similarly apparent that “business” is used in its ordinary meaning in s.134 of the Migration Act.

12. The issue under s.134(1) was whether one of the three bases for cancellation specified therein was made out: that the visa holder had not obtained a substantial ownership interest in an eligible business in Australia; that he was not utilising his skills in day-to-day management of that business; or that he did not intend to continue to hold a substantial ownership interest in and utilise his skills in actively participating in the day-to-day management of an eligible business in Australia.

13. In the course of considering whether G Ping was a business, the Tribunal properly considered whether it engaged in activities for the purpose of profit and the extent to which it did so, in particular whether that was on a continuous and repetitive basis (consistent with Hope at 10 per Mason J). It was in that context that the Tribunal considered not only the claims about the establishment of the business and its interaction with Jason Tech in Taiwan, but also the evidence of the amount of business carried out in 2006 and 2007. It had been claimed that G Ping had shipped goods worth more than A$166,000 from Australia to Taiwan in that period. The Tribunal did not accept this claim, but found on the basis of the invoices from independent suppliers that the value of goods purchased was in the order of only A$8,000.

1. Critically, it was on the basis of this finding that the Tribunal did not accept the evidence of Mr Lu and his wife about the activities of the business or the amount of time they spent on activities in relation to “identification of goods which may be successfully marketed in Taiwan, their purchase, shipment, and resale”.  Thus it found: “[on] the evidence, the actual shipments made would have required relatively very little effort or time to organise” (emphasis added).  I am satisfied that it can be inferred that the Tribunal based this finding on its finding that the value of goods purchased and shipped was in the order of only A$8,000.  It cannot be said that without this finding the result would have been the same. 

2. Moreover, the Tribunal found that to the extent G Ping had engaged in activity, that activity had not been for the purpose of profit.  Again, I am satisfied that this finding can also be said to have been reached, at least in part, based on the Tribunal’s view of the amount of business engaged in by G Ping (that is, the goods it purchased and shipped to Taiwan), as its findings were that the activities had not been continuous and repetitive, but rather had been undertaken on an ad hoc basis.  Such findings were based on and reflected the Tribunal’s finding in relation to the extent of the business orders placed by G Ping.

3. In Kushner v Minister for Immigration & Anor [2009] FMCA 390 at [47] Driver FM suggested that the question of an applicant’s motivation in setting up a 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” and that “there could be no doubt that [the applicant] wished to obtain a migration outcome”.  It may reasonably be assumed, as Driver FM stated, that any such visa applicant would have a similar motivation.  However, as his Honour also acknowledged, the motivation for establishing a company and commencing trading activities is relevant to the issue of whether it is a “business” if it points to the business being a sham and not engaged in ongoing trading. 

4. In Kushner the evidence before the Tribunal did not necessarily point to a going concern, because 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 also recent and the Tribunal regarded it as ad hoc and relatively small scale.  The same may be said about the Tribunal findings in this case.  However in reaching such conclusions and having regard to those factors in this case, it can be inferred that the factual error that the Tribunal made was material to its conclusions.  In that sense the error was the bedrock or foundation stone for the Tribunal findings.  I am satisfied that the finding that the goods purchased by G Ping were in the order of A$8,000 was a critical finding relevant to the determination of the Tribunal as to whether or not G Ping was a business, in particular insofar as the Tribunal relied on a finding of limited or meagre commercial activities. 

5. The finding in question about the value of shipments was critical to the Tribunal’s conclusions that the actual shipments made would have required very little effort or time to organise, that G Ping’s activity had not been for the purpose of profit, that its activities had not been continuous or repetitive (but were ad hoc) and that the “efforts” to incorporate G Ping, ship goods to Taiwan and resell them had been for the purpose of a migration outcome and were not “genuine” efforts within s.134(2)). 

6. Indeed, even the findings about the Tribunal’s residual discretion (that Mr Lu had to earn money in support of his family and that there was no prospect of Mr Lu being in a position to satisfy the requirements of the legislation) were, at least in part, based on the Tribunal’s incorrect finding about the extent of the shipments from Australia to Taiwan in 2006 and 2007.

7. Counsel for the first respondent referred to the approach taken by Driver FM, in SZFVL v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 223 ALR 747 at [36]. His Honour referred to a factual error assuming “legal significance if the fact [was] of such fundamental importance as to establish a miscarriage of the fact finding process”. It was suggested that this was the approach to be taken to factual error, on the basis that in such a case it can be said that the review mandated by law has not been completed by the Tribunal in that there has not really been the proper review required by the Migration Act and the Administrative Appeals Tribunal  Act 1975 (Cth) (the AAT Act). While the first respondent contended that the error in this case was not of such fundamental importance, for the reasons given I am satisfied, having regard to the Tribunal reasons for decision, that an inference can be drawn that the incorrect finding was of such materiality in this case that it can be described as a bedrock or foundation stone for conclusions adverse to the applicant. The factual finding about the extent of transactions and shipments was material in the sense that it was critical and of such fundamental importance as to establish a miscarriage of the fact-finding process in the sense considered in SZFVL. It was not a finding open to the Tribunal on the evidence because there was no basis on which one could conclude from the invoices before the Tribunal that they evidenced only transactions of A$8,000. The applicants should succeed.

8. Hence if the Tribunal’s error ought properly to be analysed on the basis suggested by counsel for the first respondent, rather than on the basis that there was no evidence to support the Tribunal’s finding or that the Tribunal failed to consider relevant material,  I am satisfied that the factual error made in this case was not a mere factual error, but was made in circumstances where it gave rise to a jurisdictional error such that the applicants did not have a proper review of their application in the manner provided for under the applicable legislation. 

9. In any event the Tribunal’s obligation is to make its determination having regard to “relevant”  material in the sense considered in Craig v The State of South Australia (1995) 184 CLR 163 at 179 and Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 225 CLR 88 at [16] – [17]. If a Tribunal granted or failed to consider relevant material in a way that affected the exercise of power it would fall into jurisdictional error (Craig at 179 and Toro Martinez v Minister for Immigration &Citizenship [2009] FCA 528 at [43] per Rares J). The jurisdictional error considered above can be characterised as a failure by the Tribunal to have regard to such relevant material, being the material before it evidencing the value of independent orders shipped by G Ping in the period between 2006 and early 2007. As discussed, such evidence “bears upon the facts to be found” (see SZDGC v Minister for Immigration and Citizenship and Another (2008) 105 ALD 25 at [23]) and was “relevant material” in the Craig v South Australia sense (see WAFP, SBAA, Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82] and Martinez at [43]-[51]).

10. That makes it unnecessary to consider the alternative contention that the Tribunal failed to consider all of the information before it in a way that affected the exercise of its power contrary to the provisions of the AAT Act, in particular s.39, which provides that, subject to other provisions, the Tribunal “shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents.” Section 39 does not expressly oblige the Tribunal to refer to “all” the evidence before it (cf s.54 of the Migration Act and see s.43(2B) of the AAT Act).

11. As jurisdictional error has been established, the matter should be remitted to the Tribunal for reconsideration according to law. 

I certify that the preceding seventy-one (71) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate: 

Date:  22 September 2009