Mizikovsky (Migration)

[2024] AATA 289

Mizikovsky (Migration) [2024] AATA 289 (9 February 2024)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Anatoly Mizikovsky
Ms Raushan Nakupova

REPRESENTATIVE:  Ms Cindy Zhao

CASE NUMBER:  2113377

HOME AFFAIRS REFERENCE(S):          BCC2021/1442896

MEMBER:Peter Ranson

DATE:9 February 2024

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.

Statement made on 09 February 2024 at 4:27pm

CATCHWORDS

MIGRATION – Business Skills (Provisional) (Class EB) visa – Subclass 188 Business Innovation and Investment (Provisional) – Significant Investor Extension stream – continuing to hold a complying significant investment – bond investment returned at maturity – gap in investment – 30-day reinvestment rule – referral for Ministerial Intervention – decision under review affirmed

LEGISLATION

Migration Act 1958, ss 65, 351
Migration Regulations 1994, Schedule 2, cls 188.261, 188.262; r 5.19

CASES

Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634    

STATEMENT OF DECISION AND REASONS

BACKGROUND

1. Mr Mizikovsky was born in Russia and travels on a US passport. Ms Nakupova was born in Kazakhstan and travels on a passport from that country. They came to Australia to live permanently. Mr Mizikovsky has a daughter living here and they settled on the Sunshine Coast in Queensland.

2. On 7 August 2015 they were granted Subclass 188 visas in the Significant Investor stream. They applied to renew their visas in the extension stream on 3 August 2019 and their applications were granted on 23 July 2020. On 20 July 2021 they applied for a second extension of their visas, which were not granted and are the subject of this decision. During this time, they held a complying significant investment from 29 July 2015 to 15 August 2019 and from 18 August 2020, which is still current.

3. As mentioned above, they applied for Class EB Subclass 188 (Business Innovation and Investment (Provisional)) visas on 20 July 2021. The criteria for the grant of such visas are set out in Part 188 of Schedule 2 to the Migration Regulations 1994 (Cth). The primary criteria must be satisfied by at least one applicant. Other members of the family unit who are applicants for the visa need satisfy only the secondary criteria. The primary criteria include common criteria, and criteria set out in streams. Mr Mizikovsky is the primary applicant and applied for the visa in the Significant Investor Extension stream.

4. On 22 September 2021, a delegate of the Minister for Home Affairs refused to grant them Business Skills (Provisional) (Class EB) visas under s 65 of the Migration Act 1958 (Cth). Mr Mizikovsky then applied for review of that decision.

5. The delegate refused to grant the visas on the basis Mr Mizikovsky did not satisfy the requirements of cl.188.261 of Schedule 2 to the Regulations because he did not continue to hold a complying significant investment throughout the period when he held a Subclass 188 visa in the Significant Investor stream. Mr Mizikovsky believes there was no obligation on him to continue to hold the investment while they held bridging visas, so the gap does not matter. In any event, he also says there was an error on the part of the department for not notifying them sooner to place the investment and in any event the 30-day rule applies, and they met that.

6. The issue then is whether there was an obligation on Mr Mizikovsky to continue to hold a complying significant investment while they were holders of bridging visas and does the 30-day rule apply.

7. For the following reasons, the Tribunal has concluded the decision under review should be affirmed.

CONSIDERATION OF CLAIMS AND EVIDENCE

A note about policy

1. Where a general policy exists to guide the decision maker in exercising its powers, the Tribunal “will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision … cogent reasons will have to be shown against its application”.[1]

   [1] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645 (Brennan J).

2. To the extent the Tribunal has considered policy in this case, it has not applied it inflexibly and has only considered it to the extent the policy is consistent with the requirements as set out in the legislation as it would be an error of law for the Tribunal to state it must (emphasis added) follow what policy says concerning the scope or meaning of a provision in the Act or Regulations.

Subclass 188 Significant Investor Extension – cl.188.261

1. Mr Mizikovsky is seeking to satisfy the primary criteria for a Subclass 188 visa in the Significant Investor Extension stream which include the criteria in Subdivisions 188.21 and 188.26 of Schedule 2 to the Regulations. Subdivisions 188.26 has two clauses, viz, cl.188.261 and cl.188.262. This decision only deals with cl.188.261.

2. He and Ms Nakupova were granted Subclass 188 visas in the Significant Investor stream on 7 August 2015. They had applied for the visas prior to 1 July 2017 which were due to expire on 7 August 2019. He applied for visas in the Significant Investor Extension stream on 3 August 2019, which were granted on 23 July 2020 (the first SIV extension). He applied again on 20 July 2021 (the second SIV extension). That application was refused and is the subject of this decision.

3. On 29 July 2015 Mr Mizikovsky placed his first significant complying investment of $5M in a Queensland Treasury Corporation bond which expired on 15 August 2019. He had been invited to do so once his original application was processed and the decision made to grant the visa subject to the placing of the investment. At maturity, the $5M was returned to him by direct credit into his bank account. As is the custom with such investments, no notification was provided to him of the maturity of the investment and return of the funds.

4. With the $5M ready to make the next complying investment, they waited to be invited again to do so however there was a lengthy delay in the grant of the first SIV extension and during that time they held bridging visas. The $5M was placed in the MA Fixed Income Fund III on 18 August 2020.

5. This meant there was a gap from 15 August 2019 (when the original investment matured) to 18 August 2020 (when the investment was placed again). During this time, they did not hold the requisite investment and relevantly there is a gap of 27 days from 23 July 2020 (when the first extension was granted) to 18 August 2020 (when the investment was placed again).

6. There is no dispute the investments made by Mr Mizikovsky in the QTC Bond in 2015 and the MA Fixed Income Fund in 2020 were complying investments as defined in reg 5.19B (see Attachment A).

1. Mr Mizikovsky must meet the requirements of either subclause (1A) or (1B) in cl.188.261. Sub-clause 1A applies if the most recent Subclass 188 visa in the Significant Investor stream held by him, which may be the visa he currently holds, was granted based on an application made before 1 July 2015, otherwise paragraph 1B applies. His most recent Subclass 188 visa in the Significant Investor visa stream was granted based on an application made before 1 July 2015. Therefore, he must satisfy paragraph (1A)(b) of clause 188.261 for the grant of a visa, which means he continues to hold a complying investment within the meaning of regulation 5.19B as in force at the time of his application.

2. The complying investments made by Mr Mizikovsky were not a direct investment in an Australian proprietary company. Therefore cl.188.261(2) does not apply. Sub-clauses 188.261(3) and (4) are concerned with the applicant providing the Minister with a completed copy of approved form 1413 for each investment in a managed fund on which the investment mentioned in that subclause is based and a completed copy of approved form 1412, signed by the applicant and each other applicant aged at least 18. Those are matters properly for the department to check once satisfaction of cl.188.261(1A) has been determined.

What does cl.188.261(1A)(b) mean?

1. Having determined paragraph (1A)(a) applies, the requirement in paragraph (b) is to continue to hold a complying investment within the meaning of regulation 5.19B. Continue means to last or endure or to remain in a place.[2] That is, Mr Mizikovsky must hold, without interruption, a complying investment from the time of commencement of his original Subclass 188 visa in the Significant Investor stream and the obligation to do so falls to him, not the Department. The original Subclass 188 visas commenced on 7 August 2015.

   [2] Macquarie dictionary.

2. Ms Zhao said at the hearing the dictionary definition of ‘continues’ includes an event can stop and restart. The Tribunal has been unable to find a dictionary definition of the word continues which includes that definition and her final submission dated 15 January 2024 makes no such reference to a dictionary definition. The Macquarie dictionary includes in its definition of ‘continues’ the phrase ‘to carry on from the point of suspension or interruption’. In this case there was no suspension or interruption in holding the complying investment. The QTC bond, which was the original complying investment, reached its maturity and was repaid.

3. Regulation 5.19B(6) contemplates the situation where an investor withdraws money from a complying investment or cancels the investment and then makes an investment in one or more other complying investments of at least the value of the withdrawn money or the cancelled investment. Provided no more than 30 days passes between the withdrawal or cancellation, the investment is taken not to have ceased to be a complying investment during that period. This is the so-called ’30-day reinvestment rule’.

4. Mr Mizikovsky seeks to rely on the 30-day reinvestment rule. He says his second complying investment was made within 26 days of the granting of the first Significant Investor Extension visa and he needed that time to obtain BSMQ approval to commence the complying investment.

1. There are two problems for Mr Mizikovsky in seeking to apply the 30-day the rule. Firstly, the rule only applies in a situation where the investor withdraws money from a complying investment or cancels the investment to then make an investment of an equal value. That is not what has happened here. The original QTC investment matured on 7 August 2019 and the funds were automatically repaid to him. He did not withdraw or cancel the QTC investment. It matured at the time it was intended to. Secondly, the gap between holding each of the complying investments is not 26 days rather it is the period from 15 August 2019 to 18 August 2020 which is considerably more than 30 days.

2. Regulation 5.19B(6) does not contemplate an investment reaching its maturity and being repaid. It only deals with investments withdrawn or cancelled. To continue to hold a complying investment, the investor would have to arrange prior to maturity to replace the investment on the day of or the day after maturity. That is an ongoing obligation imposed by the ‘continues to hold’ requirement imbedded in cl.188.261.

3. Mr Mizikovsky advances to further arguments in support of his assertion he meets the requirements of cl.188.261. They are:

   a.    He did not receive a notice or any guidance enabling him to obtain BSMQ approval and make a complying investment prior to the granting of the first Significant Investor Extension visas. This he says resulted entirely from mistake made by someone he names as officer Nidal who issued these visas without providing prior notice and ensuring a complying investment was in place before doing so.

   b.    He accuses officer Aleksandar, the author of the Decision record dated 22 September 2021 which refused the visas, for failing to consider why the supposed violation occurred, that is, the failure to continue to hold a complying investment, and not providing any opportunity to commence the complying investment prior to the grant of the visas.

4. In her written submissions and at the hearing, Ms Zhao argues the granting of the first SIV extension involves jurisdictional error because there was no complying investment in place at the time, which makes this case unique and unable to be remedied. Without using the term jurisdictional error, Mr Mizikovsky made a similar argument at the hearing and in his submissions.

5. The Tribunal considers this to be a fallacious argument. No evidence was advanced to show that the Department, represented in this case by officer Nidal, was under any obligation to check or otherwise confirm the existence of a complying investment prior to the issuing of the first significant investor extension visas. The department was entitled to rely on the obligation on Mr Mizikovsky to continue to hold a complying investment. Further, the application for the first SIV extension was made on 3 August 2019 which was four days before the original subclass 188 visa expired. Therefore, there was a complying investment in place at the time of application for the first SIV extension.

6. Even if there was jurisdictional error in granting the first SIV extension, that does not assist Mr Mizikovsky in this case, which is dealing with the second SIV extension. He and Ms Nakupova were not unjustly denied the possibility of meeting the complying investment criteria for the first SIV extension because they had not arranged to immediately reinvest the QTC bond on the day of or the day after it matured on 7 August 2019. We know that because his evidence is the funds were returned to his bank account where they remained until 18 August 2020 when he placed the investment with MA Fixed Income Fund.

1. As discussed above, a proper reading of cl.188.261(1A)(b) leads to the clear understanding of the requirement for the complying investment to remain in place from the commencement of the original (emphasis added) subclass 188 Significant Investor visas. Officer Nidal was entitled to rely on the obligation placed on Mr Mizikovsky by the regulation to continue to hold the complying investment. Just because officer Aleksandar chose to check if a complying investment was in place does not mean officer Nidal fell into jurisdictional error by not doing so.

Policy on Complying significant investment criteria.

1. For cl.188.261, department policy says Significant Investor Extension stream applicants are required to demonstrate that, for the duration of their EB‑188 Significant Investor stream or Significant Investor Extension stream visa they hold at the time of application, they have continued to satisfy all complying investment criteria or complying significant investment criteria applicable at the time their EB‑188 Significant Investor stream visa was granted.

2. Ms Zhao quotes policy this in her submission dated 15 January 2024 and says:

   ‘The Regulation 188.261 does not explicitly state for what period the criterion “continues to hold a complying investment” is required to be met and whether it includes a bridging visa period.’ and ‘The application of the Policy with respect to 188.261 is unequivocal and requires an applicant to hold a compliant investment for the duration of their 188 Significant Investor stream or Significant Investor Extension stream visa but not on a BVA.’

3. The Tribunal disagrees with Ms Zhao’s interpretation of the policy and the regulation. The policy is quoted above and is clear: ‘… they [the applicants] have continued [past tense] to satisfy all complying investment criteria or complying significant investment criteria applicable at the time their EB‑188 Significant Investor stream visa was granted’. The starting point is the time the original Subclass 188 visa was granted. From then the applicant must continue to hold the complying investment. The reference to ‘Significant Investor stream or Significant Investor Extension stream visa’ relates to the visa held at the time of application. That does not alter the requirement to hold the complying investment continuously, subject to the 30-day investment rule, from the date the Subclass 188 visa was first granted. For Mr Mizikovsky that is 7 August 2015.

4. The requirement to continue to hold a complying investment is not altered by periods when the applicants hold bridging visas, whether those bridging visas do or do not require a complying investment to be held. For any period between the expiry of one visa and the granting of another it is usual departmental practice to issue bridging visas to allow the applicants to remain lawfully in Australia if so requested. Clause 188.261(1A)(b) does not say the requirement to continue to hold a complying investment is suspended for periods when bridging visas are held. That clause says, and policy concurs, the commencement of the period when a complying investment is to be held continuously is when the first Subclass 188 visa was granted.

5. For these reasons, the Tribunal is not satisfied Mr Mizikovsky meets cl.188.261(1A)(b).

REFERRAL TO THE MINISTER

1. Section 351 of the Act provides that, if the Minister thinks it is in the public interest to do so, the Minister may substitute for a decision of the Tribunal another decision, being a decision that is more favourable to the applicant, regardless of whether the Tribunal had the power to make that other decision. In deciding whether to refer the matter to the Minister for consideration under section 351 the Tribunal has had regard to the President’s Direction on conducting migration and refugee reviews, especially at paragraphs 16.1 – 16.7 concerning referrals for ministerial intervention and the Minister’s guidelines on ministerial powers (s351, s417 and s501J) available in the Procedures Advice Manual 3 (the Minister’s Guidelines).

2. Among other things, the Minister’s Guidelines state the Minister may consider exercising his or her discretion in cases which exhibit one or more ‘unique or exceptional circumstances’. The Minister’s Guidelines then identify factors that may be relevant, individually or cumulatively, in assessing whether a case involves unique exceptional circumstances. They include the following:

   (a)  Strong compassionate circumstances that if not recognised would result in serious, ongoing and irreversible harm and continuing hardship to an Australian citizen or an Australian family unit, where at least one member of the family is an Australian citizen Australian permanent resident.

   (b)  Compassionate circumstances regarding the age and/or health and/or psychological state of the person, which if not recognised would result in serious, ongoing and irreversible harm and continuing hardship to the person.

   (c)   Exceptional economic, scientific cultural or other benefit would result from the person being permitted to remain in Australia.

   (d)  Circumstances in which the application of relevant legislation leads to unfair or unreasonable results in the case.

3. The Minister’s Guidelines further note relevant issues include circumstances which may bring Australia’s obligations as a party to the Convention on the Rights of the Child (CROC) into consideration and circumstances which may bring Australia’s obligations as a party to the International Covenant on Civil and Political Rights (ICCPR) into consideration. Tribunal notes CROC Article 3 provides: ‘In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration’.

4. Ms Zhao’s submission dated 15 January 2024 sets out her interpretation of cl.188.261 with which the Tribunal disagrees. It also sets out the reasons she says are compelling for Mr Mizikovsky and Ms Nakupova to be allowed to now apply for Subclass 888 visas to enable them to remain in Australia permanently. A copy of that submission is attached for the Minister’s consideration (Attachment B).

5. Having regard to the relevant factors, individually and cumulatively, the Tribunal considers this a case where it would be appropriate to make a referral to the Minister.

CONCLUSION

1. The Tribunal is unaware if Mr Mizikovsky took advice on the proper application of the regulations for a Subclass 188 visa in significant investor stream before he lodged his original and subsequent extension applications. Had he done so, he should have been on notice from the beginning of the requirement to continue to hold the complying investment throughout the period commencing when he first held a subclass 188 visa.

2. It is unfortunate for him and Ms Nakupova they were not aware of this requirement to continue to hold a complying investment, because regrettably it means their application for the extension visas cannot succeed even though they were previously granted extension visas they say erroneously.

3. Even if officer Nidal had made enquiries and found the complying investment with QTC had matured, was repaid and not replaced, Mr Mizikovsky and Ms Nakupova would have been denied the first SIV Extension stream visas because they had not replaced the complying investment when they needed to. As discussed above, the so-called 30-day investment rule does not apply where an investment does no more than reach its maturity.

4. This decision is a very unfortunate outcome for Mr Mizikovsky and Ms Nakupova. Save for a proper understanding of the regulations for the visa they applied for in 2015 they may not be in the position they find themselves today. The Tribunal takes no pleasure in affirming this decision hence the referral for consideration of ministerial intervention.

5. Given the above findings, the Tribunal finds the criteria for the grant of a Subclass 188 (Business Innovation and Investment (Provisional)) visa are not met. Accordingly, the decision under review must be affirmed.

DECISION

The Tribunal affirms the decisions not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.

Peter Ranson
Member

Date(s) of hearing:

20 October 2023 and 13 December 2023

Type(s) of hearing:

Hearing 1: In-person

Hearing 2: Teams video

Interpreter:

None for either hearing

Witnesses:

None for either hearing

Representation for the Applicant:

Hearing 1: Self-represented

Solicitors for the Applicant:

Hearing 2: Ms Cindy Zhao and Mr Benjamin Magill of Australia Migration Lawyers

Attached A: Complying investment – Reg 5.19B

An investment is a complying investment if all the following requirements are met:

The investment must consist of:

(a)one or more of an investment in a government bond (however described) of the Commonwealth, a State or Territory, or

(b)a direct investment in an Australian proprietary company that is not listed on an Australian stock exchange, has not been established wholly or substantially for the purpose of creating compliance with reg 5.19B and the investment is an ownership interest in the company, or

(c)an investment in a managed fund (directly or through an investor directed portfolio service) for a purpose specified by the Minister in an instrument in writing for this paragraph.

The funds used to make the investment must be unencumbered and lawfully acquired.

The investor must be an individual and must make the investment personally; or with the investor’s spouse or de facto partner; or by means of a company that has issued shares and in which the investor holds all of the issued shares; or the investor and the investor’s spouse or de facto partner hold all of the issued shares; or by means of a trust that is lawfully established; and of which the investor is the sole trustee; or the investor and the investor’s spouse or de facto partner are the sole trustees; and the investor is the sole beneficiary; or the investor and the investor’s spouse or de facto partner are the sole beneficiaries.

If an investor withdraws money from a complying investment or cancels the investment and makes an investment of at least the value of the withdrawn money or cancelled investment in one or more other complying investments and no more than 30 days passes between the withdrawal or cancellation, the investment is taken not to have ceased to be a complying investment during that period.

Attached B: Submission by Australian Migration Lawyers dated 15 January 2024