Lukac v Minister for Immigration and Multicultural and Indigenous Affairs
[2004] FCA 1641
•13 DECEMBER 2004
FEDERAL COURT OF AUSTRALIA
Lukac v Minister for Immigration & Multicultural & Indigenous Affairs
[2004] FCA 1641MIGRATION – Temporary Business Entry (Class UC) visa – cleaning business – whether net assets adequate to conduct the business – Tribunal failed to ask itself the correct question – jurisdictional error
Judiciary Act 1903 (Cth) s 39B
Migration Act 1958 (Cth) s 475AMigration Regulations Schedule 2, subclause 457.223(7A)
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 followed
Scargill v Minister for Immigration and Multicultural and Indigenous Affairs (2003)
129 FCR 259 followed
Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 referred to
Lobo v Minister for Immigration and Multicultural and Indigenous Affairs (2003)
132 FCR 93 followedNENAD LUKAC, IVANA LUKAC, MARKO LUKAC, ANA LUKAC, RATKA LUKAC v MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS and MIGRATION REVIEW TRIBUNAL
No QUD 176 of 2004
SPENDER J
BRISBANE
13 DECEMBER 2004
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 176 OF 2004
BETWEEN:
NENAD LUKAC, IVANA LUKAC, MARKO LUKAC, ANA LUKAC, RATKA LUKAC
APPLICANTSAND:
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFAIRS
FIRST RESPONDENTMIGRATION REVIEW TRIBUNAL
SECOND RESPONDENTJUDGE:
SPENDER J
DATE OF ORDER:
13 DECEMBER 2004
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
(1)The appeal is allowed.
(2)The decision of the Migration Review Tribunal is set aside.
(3)The matter is remitted to the Migration Review Tribunal to be considered according to law.
(4)The composition of the Migration Review Tribunal is a matter for the Migration Review Tribunal.
(5)The first respondent pay the applicant’s costs of and incidental to this application, to be taxed if not agreed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 176 OF 2004
BETWEEN:
NENAD LUKAC, IVANA LUKAC, MARKO LUKAC, ANA LUKAC, RATKA LUKAC
APPLICANTSAND:
MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFAIRS
FIRST RESPONDENTMIGRATION REVIEW TRIBUNAL
SECOND RESPONDENT
JUDGE:
SPENDER J
DATE:
13 DECEMBER 2004
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This is an application brought under s 39B of the Judiciary Act 1903 (Cth) and s 475A of the Migration Act 1958 (Cth) (‘the Act’), which seeks to challenge a decision of the Migration Review Tribunal (‘the Tribunal’) dated 13 August 2004 which refused to grant to Mr Nenad Lukac a Temporary Business Entry (Class UC) visa. The application to this Court alleges that the Tribunal’s decision was in excess of jurisdiction in that it failed properly to apply the criterion found in subclause 457.223(7A)(c)(iv)(B) of the Migration Regulations.
Mr Lukac is a national of Serbia. He, his wife and two children entered Australia on subclass 457 Temporary Business Entry (Long Stay) visas on 19 June 1998. They had been granted these visas, it appears, on 18 May 1998. Mr Lukac’s mother arrived in Australia on 11 November 1998 on the same visa. The subclass 457 visa, it appears, had been granted on the basis that the requirements of subclause 457.223(7) of Schedule 2 to the Migration Regulations had been met. That visa expired on 18 May 2002.
On 17 May 2002 the applicant applied for a subclass 457 IE FAO visa; the letters relate to Independent Executive, Further Application Onshore. That application was made on the basis that Mr Lukac had an established business in Australia, namely, a cleaning business. By letter dated 21 January 2003 the Minister’s delegate advised the applicant that the application had been refused. A statement of decision and reasons accompanied the notification of that decision.
Mr Lukac filed an application for review to the Tribunal on 17 February 2003. By letter dated 8 April 2004 the Tribunal invited Mr Lukac to provide updated balance sheets and profit and loss statements for the financial years 2001/2002 and 2002/2003. Such documentation was forwarded to the Tribunal on 18 May 2004.
The application for review was heard by the Tribunal on 20 July 2004. Both Mr and Mrs Lukac had given oral evidence at the hearing on 20 July 2004. It appears that the initial material had been prepared by a registered migration agent, but the applicants were not represented before the Tribunal by a registered migration agent, as the reasons for the Tribunal might suggest.
This application falls to be determined against the legislative provision contained in subclause 457.223(7A) of the Migration Regulations, which provides:
‘(7A) The applicant meets the requirements of this subclause if:
(a)either:
(i)the applicant holds a Subclass 457 visa granted on the basis that the applicant met the requirements of subclause (7) or Subdivision 457.32; or
(ii)the applicant does not hold a substantive visa, and the last substantive visa held by the applicant was of a kind mentioned in subparagraph (i); and
(b)on the day on which the application is made:
(i)the applicant had been conducting the business in Australia as a principal for at least 15 months; or
(ii)if the applicant had been conducting the business in Australia as a principal for less than 15 months – a government of a State or Territory had endorsed the business as beneficial to the State or Territory; and
(c)the Minister is satisfied that:
(i)the business is of benefit to Australia; and
(ii)the applicant has a genuine and realistic commitment:
(A) to maintain an ownership interest in the business; and
(B) to maintain a direct and continuous involvement in the management of the business; and
(C) to make decisions that affect the overall direction and performance of the business from day to day; and
(iii)nothing adverse is known to Immigration about the applicant’s business background; and
(iv)the applicant has net assets of:
(A)not less than AUD250,000; or
(B)a lesser amount that is adequate;
to conduct the business; and
(v)the applicant has demonstrated that there is need for the applicant to be temporarily resident in Australia to conduct the business.’
There was no issue that the applicant met all aspects of that subclause 457.223(7A) apart from 457.223(7A)(c)(iv)(A) and (B). It is not disputed that the applicant did not meet the requirements of 457.223(7A)(c)(iv)(A). The sole issue before the Tribunal was whether the applicant met the requirements of 457.223(7A)(c)(iv)(B).
The Tribunal summarised the evidence before it as follows:
· The primary visa applicant confirmed that he could not meet the stipulation of having $AUD250,000 in net assets pursuant to subparagraph (A) of clause 457.223(7A)(c)(iv).
· The Tribunal then explored the alternative criterion in subparagraph (B). The visa applicant was asked what special circumstances were present which would allow for a lesser amount. The primary visa applicant said that they could sell properties they had in the former Yugoslavia but this would still not add up to the stipulated amount. The Tribunal asked him why he thought he could achieve the stipulated amount when he had been here since 1998 and his own financial information indicated he had negative net assets for 2002 and 2003. The primary visa applicant said that they were unable to consider investment as their visa status was uncertain and they were waiting for their review outcome. They were reluctant to start anything under the circumstances. The Tribunal pointed out that they were going backwards and asked them to comment. The primary visa applicant said that they would start to go forward and that they wished to open a shop one day. (Emphasis added)
· In his final statement the primary visa applicant said that he was a volunteer soccer coach and founded a club called Red Star for mature players. His daughter was a champion netballer and would not be able to play that sport in the former Yugoslavia. She was also the best student at her school and could be the school captain next year.
· The secondary visa applicant said that she had been a very successful employee and was eligible for election as the Sheraton Employee of the Year award as a result of her work.’
The Tribunal referred to the accounting material that was before it as a result of its invitation to Mr Lukac as follows:
‘21.The visa applicant submitted an individual tax return for the period 1 July 2000 to 30 June 2001 and this showed his occupation as being that of a cleaner, that he was employed by two different cleaning and contractor services and that his total gross wages were $17,355. The taxable income claimed was $28,245. There was a supplementary income of $13,450 and other business income totalling $14,600 and the net income was $13,450 ….
22.A letter dated 18 June 2002 from the visa applicant’s accountant stated that the visa applicant had been in business since the 2001 financial year and continued as a sole trade providing cleaning services (D1, f.78). A further letter dated 28 August 2002 from the accountant stated the visa applicant initiated his business in November 2000. The cleaning business turnover had grown from approximately $500 per fortnight to over $2000 per fortnight. The visa applicant was not registered for GST however since his business was likely to break the $50,000 per annum barrier, an application for GST was being made. The registration was expected to be in place for the September to December 2002 quarter ….
23.Further information submitted to the Tribunal indicated that the primary visa applicant had negative net assets for 2003 and 2002 of $AUD6,489 and $AUD4,701 respectively ….’
The Tribunal summarised the opinion of the delegate in paragraphs 25, 26 and 27 of its reasons.
‘25.The delegate assessed the application against sub-subparagraph 457.223(7A)(c)(iv)(A) of the Regulations which determines that the net assets of the visa applicant is the value of the assets after deducting any liabilities and comprises both personal and business assets and the net assets of the visa applicant and/or his spouse is taken into consideration.
26.The delegate considered the evidence which was provided to show the visa applicant’s net assets, however, the evidence did not prove that the visa applicant had net assets over $250,000 and therefore the requirements of the Regulations were not met.
27.The delegate referred to examples where less than the requisite $250,000 may be adequate and found the visa applicant did not provide any information to support a claim that he had any special circumstances in line with the examples discussed. There was no evidence to show the visa applicant’s business was likely to deliver enough profits where the visa applicant would have adequate net assets in two years’ when considering that substantial net assets were a minimum requirement for eligibility to apply for an established business or a regional established business in Australia. Based on that finding, the delegate was not satisfied that the visa applicant had sufficiently demonstrated there were adequate net assets to conduct his business and did not meet the requirements of sub-subparagraph 457.223(A)(c)(iv)(B) of the Regulations ….’
The reasoning of the Tribunal appears very cryptically in paragraphs 28 and 29 of its reasons:
‘28.The primary visa applicant has confirmed in the hearing that he cannot meet the $AUD250,000 threshold required by subclause 457.223(7A)(c)(iv) and information submitted by him indicates that he cannot meet the alternative test in (B) of a lesser amount which is adequate to conduct the business nor could he feasibly be able to do so in a two year period.
29.The Tribunal makes the following findings:
· The primary visa applicant does not have net assets of not less than $AUD250,000.
· The primary visa applicant does not have net assets which are a lesser amount but “that is adequate to conduct the business”.
· The primary [visa applicant] does not meet a prerequisite criterion for satisfying clause 457.223(7A).’
Paragraph 28 indicates to me that the Tribunal agreed with the view of the delegate, which it had set out in pars 25, 26 and 27 of its reasons. It follows, in my judgment, that the Tribunal failed to ask itself the required question in relation to eligibility for the relevant visa. Both the delegate and the Tribunal failed properly to apply the test which is set out in subclause 457.223(7A)(c)(iv)(B).
There is simply no requirement in that regulation to show ‘special circumstances’. There is no requirement that ‘the visa applicant would have adequate net assets in two years when considering that substantial net assets were a minimum requirement for eligibility to apply for an established business or a regional established business in Australia’. The only test pertinent to the subclause in question is whether the applicant ‘had net assets … adequate to conduct the business’.
The accounting evidence before the Tribunal indicated that in the 2001/2002 tax year, the cleaning business had made a net profit of $19,259.16, and in the tax year 2002/2003 a net profit of $19,057.96. There was also evidence from the accountant that the cleaning business was growing, and it was anticipated that the turnover would be more than $2000 per fortnight in the short-term future.
The cleaning business was trading at a profit and was improving. It is true that the balance sheet indicated that there were net liabilities in the 2001/2002 tax year of $4701.71 and in the tax year 2002/2003 net liabilities of $6489.59. But the test is not whether, in fact, the asset position is positive or negative; the test that is relevant in the present case is whether the applicant had ‘net assets … adequate to conduct the business’.
It seems impossible to conclude on the accounting material that the applicant lacked that asset position. There was further evidence before the Tribunal that the wife, Ivana Lukac, had a taxable income of $31,608 in the 2001 financial year, and that she was still working for the hotel in Brisbane as at the date of the hearing. The negative net business assets figure, in fact, is heavily influenced by accumulated depreciation in respect of a motor vehicle, and the fact that drawings exceeded net profit.
The figures, it seems to me, indicate that the applicant had net assets adequate to conduct the business.
It is not a question, of course, for this Court to answer. It is, however, necessary for the Tribunal to have properly addressed the criterion which was relevant to its decision. There is no evidence of any inability to meet the bank repayments or any lack of capital as having an adverse effect on the ability of the business to function. The only evidence seems to be that the business was profitable and growing.
There is no requirement in the Regulations that a subclass 457 visa holder must build up sufficient assets in two years to be eligible to be granted a subclass 845 Established Business in Australia visa or the subclass 846 State/Territory Sponsored Regional Established Business in Australia visa.
A subclass 457 IE FAO visa lasts for two years from the date of grant. Once it expires, if the visa holder has not applied for any other visa, then the holder is no longer authorised to remain in Australia and the person and their family would have to leave Australia. There is no requirement that a subclass 457 visa holder must apply for some other visa. There does not seem to be any suggestion that the Lukac family has been anything other than scrupulous in attendance to migration matters, nor is there any basis to think that they would not do so in the future.
I do not think it is necessary for the Tribunal to have quantified what, in fact, was the net personal and business assets of the applicants and what assets were adequate to conduct the business. While no doubt that inquiry might be helpful, the relevant question is whether the assets of the applicants are adequate to conduct the business. The Tribunal failed to address that question. In my opinion, the inquiry into whether there might in the future be an ability to meet criteria of subclasses 845 and 846 visas in the future was quite irrelevant.
The error that in my judgment the Tribunal committed is jurisdictional. In Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 McHugh, Gummow and Hayne JJ said at 351:
‘What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it.’
In Scargill v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 259 (‘Scargill’), the Full Court of the Federal Court at 269 referred to observations by Gaudron and Kirby JJ in Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 (‘Plaintiff S157/2002’) at par 81:
‘... reconciliation of a particular provision within s 474 of the Act is very difficult, if not possible, if, as in the case of s 65(1) of the Act, there is detailed specification of conditions which must be satisfied before a particular act can be done or a particular decision taken and there is also prescription of the precise act that must be done or the precise decision that must be reached if that specified conditions are met.’
And at par 83:
‘In light of the detailed specification in the regulations of the criteria for the grant of various classes of visa, it is impossible to treat the consideration by the decision-maker of the relevant criteria and his or her satisfaction or lack of satisfaction in that regard as other than conditions precedent to a valid decision to grant or refuse a visa under s 65(1) of the Act.’
In Lobo v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 132 FCR 93 (‘Lobo’) the Full Court of the Federal Court at 106 addressed the question of what is jurisdictional error. Their Honours said:
‘The criterion prescribed for the grant of a subclass 845 visa in cl 845.216 sets out a matter on which the Minister must be satisfied before he can grant such a visa. His satisfaction that the criterion has been satisfied is, by virtue of s 65(1)(b), a necessary condition of his power to grant the visa. If he is satisfied that the criterion has been satisfied and the other conditions set out in 65(1)(a) are met, then he has a statutory duty to grant the visa. That is a duty to exercise the power conferred upon him by s 29 of the Act.
Where the Minister misconstrues one of the criteria prescribed in the Act or Regulations and, because of that misconstruction he considers that the criterion has not been satisfied, it is as though he did not consider the criterion at all. For, on the face of it, he has failed to ask the question which the Act and Regulations, upon a proper construction of the criterion, require him to ask. In such a case, absent s 474, the Minister’s decision would be a nullity. The Minister has not done that which the Act requires him to have done. The decision would be a purported decision of no legal effect.’
It is helpful to have regard to the observations by the High Court in rejecting the applications for special leave in Scargill and Lobo which were heard together on 13 February 2004. In refusing special leave, Gummow J referred to the joint reasons in Plaintiff S157/2002 where it was said at par 76 at 506:
‘Once it is accepted, as it must be, that s 474 is to be construed conformably with Ch III of the Constitution, specifically, s 75, the expression “decision[s] … made under this Act” must be read so as to refer to decisions which involve neither a failure to exercise jurisdiction nor an excess of the jurisdiction conferred by the Act.…’
Gummow J, referring to the judgment of the Full Court in Lobo said:
‘Coming to the matter of Lobo, the Full Court of the Federal Court concluded, and the Minister does not dispute, that the Migration Review Tribunal applied a test other than that prescribed by the applicable Regulation. The Full Court’s conclusions that the Tribunal therefore fell into jurisdictional error and that it followed from this Court’s decision in Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 that the privative provisions in section 474 of the Migration Act 1958 (Cth) was accordingly not engaged are not attended by doubt. Special leave to appeal is refused with costs in that matter also.’
In my opinion, both the delegate but, more importantly, the Tribunal erred in law in the test which it purported to apply in considering the criterion specified in subclause 457.223(7A)(c)(iv)(B). That error, for the reasons set out in the observations above, is jurisdictional.
While the conclusion that the assets of Mr Lukac are adequate to conduct his cleaning business seems to be the correct conclusion on the totality of the evidence, that is a finding of fact which is properly for the Tribunal to make. The decision of the Tribunal is set aside and the matter is remitted to the Tribunal to consider according to law. The composition of the Tribunal on the remitter is a matter for the Tribunal.
The applicant should have his costs of and incidental to this application to be taxed if not agreed.
The orders that I make are:
(1)The appeal is allowed.
(2)The decision of the Migration Review Tribunal is set aside.
(3)The matter is remitted to the Migration Review Tribunal to be considered according to law.
(4)The composition of the Migration Review Tribunal is a matter for the Migration Review Tribunal.
(5)The first respondent should pay the applicant’s costs of and incidental to this application, to be taxed if not agreed.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate:
Dated: 16 December 2004
Counsel for the Applicant: Mr Lorenzo Boccabella Solicitor for the Applicant: A.J. Torbey & Associates Counsel for the 1st and 2nd Respondents: Mr Scott McLeod Solicitor for the 1st and 2nd Respondents: Clayton Utz Date of Hearing: 13 December 2004 Date of Judgment: 13 December 2004
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