Pidorenko v Minister for Immigration, Citizenship and Multicultural Affairs

Case [2024] FedCFamC2G 525

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Pidorenko v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 525

File number(s): PEG 132 of 2021
Judgment of: JUDGE LUCEV
Date of judgment: 11 June 2024
Catchwords:

MIGRATION – Judicial review – Administrative Appeals Tribunal decision – Business Skills (Residence) (Class DF) visas – where business is a family partnership – whether calculation of business turnover should include or exclude the Goods and Services Tax when determining if threshold amount was reached in the relevant period – whether Tribunal determined ordinary meaning of turnover – whether Tribunal had regard to context and purpose of use of turnover – whether error material - whether jurisdictional error - writs issued

WORDS AND PHRASES – “turnover”  
Legislation:

A New Tax System (Goods and Services Tax) Act 1999 (Cth) Div 29, 38, Sch 1, ss 1-2, 7-5, 7-10, 7-15, 9-5, 11-5, 11-25, 17-5, 17-10, 19-10, 19-50, 27-5, 27-10, 29-5, 29-10, 29-20, 33-3, 33-5, 38-185, 38-3, 72-5, 195-1, 995-1

Corporations Act 2001 (Cth), s 334

Evidence Act 1995 (Cth) s 135

Income Tax Assessment Act 1997 (Cth) ss 3-5, 6-5, 17-15, 328-120

Insurance Contracts Act 1984 (Cth) ss 8, 11, 11C, 11D, 11DA, 13, 33C, 40, 65, 74, 75D

Migration Act 1958 (Cth) ss 65, 140, 474, 476

Taxation Administration Act 1953 (Cth) Pt IVC, Sch 1, ss 105-50, 105-55

Migration Regulations 1994 (Cth) regs 2.57A, 2.60W, 2.73, Sch 2, cll 188.112, 188.222, 189.233, 845.222, 846.212, 892.211, 892.213, Sch 7A, Pt 7A.9,

Migration (Skilling Australians Fund) Charges Regulations 2018) (Cth) reg 4
Cases cited:

An v Minister for Immigration and Citizenship [2007] FCAFC 97; (2007) 160 FCR 480

Aris-Bainbridge v Turner Manufacturing Co Ltd [1950] 1 KB 563; [1950] 2 All ER 1178

Attorney-General for the Northern Territory v Minister for Aboriginal Affairs [1989] FCA 202; (1989) 23 FCR 536

Cheng v Minister for Immigration and Citizenship [2012] FMCA 911; (2012) 271 FLR 322; (2012) 134 ALD 119

Cheng v Minister for Immigration and Citizenship [2013] FCA 405; (2013) 213 FCR 362; (2013) 140 ALD 624

Collector of Customs v AGFA-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389; (1996) 71 ALJR 123; (1996) 35 ATR 249; (1996) 141 ALR 59; (1996) 43 ALD 193

Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; (1993) 43 FCR 280; (1993) 18 AAR 9; (1993) 115 ALR 1

El Ess & Anor v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1038; (2004) 142 FCR 43

Federal Commissioner of Taxation v Multiflex Pty Ltd [2011] FCAFC 142; (2011) 197 FCR 580; (2011) 82 ATR 153; (2011) 284 ALR 279; (2011) 125 ALD 8

Federal Commissioner of Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22; (2008) 236 CLR 342; (2008) 82 ALJR 968; (2008) 68 ATR 158; (2008) 246 ALR 448

Federal Commissioner of Taxation v Travelex Limited [2021] HCA 8

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AGLC
Pidorenko v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 525
Case
[2024] FedCFamC2G 525
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Pidorenko v Minister for Immigration, Citizenship and Multicultural Affairs revolves around the interpretation of the term "turnover" within the context of a Business Skills (Residence) (Class DF) visa application. The applicant, Mr. Pidorenko, sought to have his visa approved based on the annual turnover of his family partnership business. The key issue before the Court was whether the tribunal correctly determined the meaning of "turnover" when it excluded Goods and Services Tax (GST) from the calculation of annual turnover in deciding if the threshold amount was met.

The Court needed to assess whether the tribunal had properly considered the ordinary meaning of "turnover" in accordance with the relevant legislative context and purpose. The tribunal's decision to affirm the delegate's refusal hinged on whether it had correctly interpreted the term "turnover" as used in the Migration Regulations. The Court examined whether the tribunal's approach to defining "turnover" was in line with the principles of statutory interpretation, particularly focusing on whether the tribunal had regard to the ordinary meaning of the term and the context in which it was used.

In its judgment, the Court found that the tribunal had failed to properly determine the ordinary meaning of "turnover" as it applied to the Migration Regulations. The tribunal instead looked at definitions from unrelated statutes and an external website, which did not assist in understanding the specific meaning of "turnover" within the legislative context of the visa application. The Court held that the tribunal's interpretation was flawed and amounted to a jurisdictional error. Consequently, the Court quashed the tribunal's decision and remitted the matter back for reconsideration, ensuring that the tribunal correctly interprets the term "turnover" in accordance with the Migration Regulations.

Orders

Orders of the court

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Background

Background to the litigation

The background to the Judicial Review Application is as follows:(a)Mr Pidorenko and his family are Polish nationals: CB 1;(b)Mr and Ms Pidorenko have operated a partnership under the business name, “eurofurniture (“Business”), since about 2014: CB 31-34. The Business is a business involved in the “export, manufacturing, retail trade and wholesale trade”: CB 25, or the “organising and coordination of sales and distribution of goods, mainly furniture of various types”: CB 180 at [9];(c)in the 12 months before Mr Pidorenko applied for the Business Skills Visa, the Business made sales totalling $206,982.00 (all dollar figures in these Reasons for Judgment are in Australian dollars): CB 79-95;(d)on 24 May 2017 Mr Pidorenko applied for the Business Skills Visa: CB 1-30;(e)on 15 November 2018 the Delegate’s Decision was made to refuse the Business Skills Visa: CB 113-130; and(f)on 1 December 2018, Mr Pidorenko applied to the Tribunal for review of the Delegate’s Decision: CB 131-133.Background to Tribunal Decision The background to the Tribunal Decision is as follows:(a)on 9 March 2022 the Tribunal emailed Mr Pidorenko inviting him to respond in writing to the Tribunal’s request for information (“Information Request”): CB 137-141, specifically, noting the following information:(i)that the “regulations” required Mr Pidorenko’s main business in Australia, or main businesses in Australia together, to have had an annual turnover of at least $200,000 in the 12 months immediately before the Business Skills Visa application was made: CB 138. A copy of the relevant regulation, cl 892.213 of Sch 2 to the Migration Regulations 1994 (Cth) (“Migration Regulations”) was attached to the Information Request: CB 141;(ii)that one main business was nominated in the Business Skills Visa application, that being the Business (formally, the A Pidorenko and Z Pidorenko Family Partnership): CB 138; and(iii)that according to the financial statements and business activity statements (“BAS”) returns (“BAS Returns”) of the Business for the year ended 30 April 2017, annual turnover (sales) was $188,165: CB 138; (b)at CB 139 the Tribunal explained that it was a requirement for the Business Skills Visa application to be successful, that the annual turnover immediately before the Business Skills Visa application was made had to be at least $200,000, and continued as follows:Based on the financial statements and BAS returns, the turnover for the relevant period was AUD188,165. If the minimum turnover threshold was not met, this would mean that you do not satisfy a requirement for the visas to be approved and … [the Tribunal] must affirm the decision that is under review.(c)on 7 April 2021 Mr Pidorenko’s then lawyer responded to the Information Request: CB 152-154; (d)on 14 April 2021 the Tribunal wrote to Mr Pidorenko’s then lawyer, inviting Mr Pidorenko and his then lawyer to attend a Tribunal hearing on 13 May 2021 (“Tribunal Hearing”): CB 159-163; and(e)Mr Pidorenko appeared at the Tribunal Hearing on 13 May 2021 accompanied by his then lawyer and a Polish interpreter. The Tribunal hearing went for 25 minutes and Mr Pidorenko was given the opportunity to provide further written submissions: CB 171-174. No further written submissions appear to have been provided.Tribunal Decision - Findings

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The background to the Tribunal Decision is as follows:(a)on 9 March 2022 the Tribunal emailed Mr Pidorenko inviting him to respond in writing to the Tribunal’s request for information (“Information Request”): CB 137-141, specifically, noting the following information:(i)that the “regulations” required Mr Pidorenko’s main business in Australia, or main businesses in Australia together, to have had an annual turnover of at least $200,000 in the 12 months immediately before the Business Skills Visa application was made: CB 138. A copy of the relevant regulation, cl 892.213 of Sch 2 to the Migration Regulations 1994 (Cth) (“Migration Regulations”) was attached to the Information Request: CB 141;(ii)that one main business was nominated in the Business Skills Visa application, that being the Business (formally, the A Pidorenko and Z Pidorenko Family Partnership): CB 138; and(iii)that according to the financial statements and business activity statements (“BAS”) returns (“BAS Returns”) of the Business for the year ended 30 April 2017, annual turnover (sales) was $188,165: CB 138; (b)at CB 139 the Tribunal explained that it was a requirement for the Business Skills Visa application to be successful, that the annual turnover immediately before the Business Skills Visa application was made had to be at least $200,000, and continued as follows:Based on the financial statements and BAS returns, the turnover for the relevant period was AUD188,165. If the minimum turnover threshold was not met, this would mean that you do not satisfy a requirement for the visas to be approved and … [the Tribunal] must affirm the decision that is under review.(c)on 7 April 2021 Mr Pidorenko’s then lawyer responded to the Information Request: CB 152-154; (d)on 14 April 2021 the Tribunal wrote to Mr Pidorenko’s then lawyer, inviting Mr Pidorenko and his then lawyer to attend a Tribunal hearing on 13 May 2021 (“Tribunal Hearing”): CB 159-163; and(e)Mr Pidorenko appeared at the Tribunal Hearing on 13 May 2021 accompanied by his then lawyer and a Polish interpreter. The Tribunal hearing went for 25 minutes and Mr Pidorenko was given the opportunity to provide further written submissions: CB 171-174. No further written submissions appear to have been provided.Tribunal Decision - Findings In the Tribunal Decision made on 28 May 2021 the Tribunal found that: (a)the turnover of the Business was $188,165, excluding goods and services tax (“GST”) for the 12-month period to 30 April 2017, which means that the threshold amount of $200,000, as set out in cl 892.213 of Sch 2 to the Migration Regulations was not met: CB 183 at [41]; and(b)given its findings, the Delegate’s Decision must be affirmed: CB 183 at [42].Materials before the Court Materials before the Court include the following:(c)a Court Book (“CB”) numbering 189 pages, which was marked as Exhibit 1 at hearing;(d)an affidavit of Mr Pidorenko’s lawyer, Mr Hamish Glenister (“First Glenister Affidavit” and “Mr Glenister” respectively), affirmed 25 June 2021, annexing the Tribunal Decision (which also appears at CB 178-184); (e)Mr Pidorenko’s written submissions filed 30 May 2022 (“Mr Pidorenko’s Submissions); (f)the Minister’s written submissions filed 17 June 2022 (“Minister’s Submissions”); (g)an affidavit of Mr Glenister, affirmed 19 July 2022 (“Second Glenister Affidavit”) annexing:(i)documents obtained from the Australia Accounting Standards Board (“AASB”) website , namely:(A)a document entitled “Revenue from Contracts with Customers”; and(B)a document entitled “Glossary of Defined Terms” (together “AASB Documents”); and(ii)extracts of the definition of “turnover” from various dictionaries; and (h)the transcript of the hearing before the Court on 20 July 2022 (“Transcript”) which the Court has read in preparing these Reasons for Judgment.

Ratio Decidendi

Legal Principle Established

In relation to Mr Pidorenko’s arguments concerning the meaning of turnover the Tribunal:(a)noted that Mr Pidorenko’s submitted that GST should be included in turnover and that arguments were made in support of that submission: CB 180 at [15];(b)summarised Mr Pidorenko’s submissions as: (i)seeking to demonstrate that there are different definitions of turnover for different purposes, and migration is a different enough purpose, from say, accounting purposes, such that there could be a different definition of turnover: CB 180 at [16];(ii)being that, in broad terms, turnover is understood to be the gross income of the business, but that the exact definition of turnover, including what can and cannot be included, differs according to the particular scheme concerned, and noted Mr Pidorenko’s references to s 11 of the Insurance Contracts Act 1984 (Cth) (“IC Act”) and that it was different to the definition in s 328-120 of the ITA Act 1997: CB 180 at [17] and [19];(c)did not agree with the proposition that there are different definitions of turnover for different purposes, and that the specific definition used in relation to body corporates is not because there is a different purpose in relation to them but because the definition of turnover as widely used for accounting purposes needs clarification when applied to body corporates because of characteristics unique to those entities: CB 181 at [20]; and(d)explained the term “ordinary income” is defined in s 6-5 of the ITA Act 1997 and that it refers to assessable income and that s 17-15 of the ITA Act 1997 sets out that in calculating an amount that may be included in assessable income, an amount equal to GST payable is not to be included: CB 181 at [22].The Tribunal’s consideration of its summary of Mr Pidorenko’s submissions The Tribunal did not consider what might be the ordinary meaning of “turnover” in, or its meaning having regard to the context and purpose of, cl 892.213 of Sch 2 to the Migration Regulations. Rather than doing so the Tribunal moved straight into a consideration of definitions of “annual turnover” by reference to: (a)other statutory provisions, namely those in the IC Act and the ITA Act 1997 (noting that those statutory provisions were matters raised by Mr Pidorenko’s lawyer before the Tribunal): CB 180-181 at [18]-[22]; and(b)a definition of “turnover” from an Australian Taxation Office website (“ATO Website”): CB 181 at [24]-[25]. It is necessary to examine each of the IC Act, ITA Act 1997 and ATO Website in turn.IC Act In relation to the IC Act the Tribunal set out at CB 180-181 at [18] the definition of “annual turnover”, which appears in s 11(1) of the IC Act, as follows:annual turnover, of a body corporate during a 12‑month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12‑month period, other than:(a)supplies made from any of those bodies corporate to any other of those bodies corporate; or (b) supplies that are input taxed; or (c)supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); or (d)supplies that are not made in connection with an enterprise that the body corporate carries on; or (e) supplies that are not connected with Australia.