Su and Ors v Minister for Immigration

Case •

[2005] FMCA 616

•

29 April 2005

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SU & ORS v MINISTER FOR IMMIGRATION [2005] FMCA 616
MIGRATION – Visa – Business Skills (Residence) – (Class BH) visa – application for review of decision of the Migration Review Tribunal affirming a decision of the delegate not to grant a business skill visa to the Applicants.

Judiciary Act 1903 (Cth), s.39B
Migration Act 1958 (Cth), s.65

Tide Sequence Industries v Minister for Immigration and Multicultural and Indigenous Affairs (2005) FMCA 49
Dranichnikov Minster for Immigration and Multicultural and Indigenous Affairs (2003) 197 ALR 389

SCAL v Minster for Immigration (2003) FCA 548

First Applicant: LIN SU
Second Applicant: MIN NING SU
Third Applicant: TING TING SU
Respondent: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS
File No: SYG 3485 of 2004
Delivered on: 29 April 2005
Delivered at: Sydney
Hearing date: 21 April 2005
Judgment of: Scarlett FM

REPRESENTATION

Counsel for the Applicant: Mr Poynder
Solicitors for the Applicant: Diamond Peisah Solicitors
Solicitor for the Respondent: Mr Potts
Solicitors for the Respondent: Phillips Fox

ORDERS

  1. That a writ of certiorari issue quashing the decision of the Migration Review Tribunal made on 5 November 2004.

  2. That a writ of prohibition issue restraining the Respondent, her officers, agents or delegates from acting upon, giving effect to or proceeding further with respect to the decision of the Migration Review Tribunal made on 5 November 2004.

  3. That the writ of mandamus issue requiring the Migration Review Tribunal to redetermine the Applicants’ application according to law.

  4. That the Respondent pay the Applicants’ costs.

  5. Liberty to apply on 7 days’ notice on the question of quantum of costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3485 of 2004

LIN SU

First Applicant

And

MIN NING SU

Second Applicant

And

TING TING SU

Third Applicant

And

MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS

Respondent

REASONS FOR JUDGMENT

  1. This is an application for a review of a decision made by the Migration Review Tribunal on 5 November 2004, affirming a decision of a delegate of the Minster to refuse the grant of business skills (Residence) (class BH) visas to the Applicants.

  2. The matter has taken longer than usual to reach this point.  The Applicants, who are husband, wife and daughter, lodged their application on 17 November 2000. The First Applicant attended an interview with the delegate of the Respondent Minister on 10 October 2001 to discuss certain concerns.

  3. The delegate refused to grant the visas on 14 January 2002.

  4. The Applicants lodged their application for review with the Migration Review Tribunal on 29 January 2002. The Tribunal heard the application on 15 June 2004.  The First Applicant attended and gave oral evidence.  He was accompanied by his representative, a migration agent. After the hearing, the First Applicant submitted further documents.  The migration agent also provided a written submission.

  5. On 5 November 2004, the Tribunal gave its decision affirming the decision of the delegate not to grant the visas sought by the Applicants.

  6. The background to this claim is that the Applicants are citizens of China.  Mr Lin Su is the primary applicant.  The other two applicants are his wife and his adult daughter.

  7. The First Applicant arrived in Australia on a subclass 456 business short stay visa on 2 November 1996 and departed on 16 November of that year.  He travelled to and from Australia once more on the same visa in 1997.  He was granted a subclass off-shore visa on 1 August 1997, and re-entered Australia on this visa on 13 August.  The visa expired on 19 August 2001.  The visa had been granted on the basis that the primary visa applicant met the criteria as an independent executive.

  8. On 30 January 2002, he obtained a further subclass 457 visa on-shore and that visa will cease to have effect on 30 January 2006.

  9. The First Applicant’s wife and daughter arrived in Australia on subclass 457 visas on 11 February 1998.  They obtained further subclass 457 visas on 30 January 2002, and those visas will also expire on 30 January 2006.

  10. The Applicant’s main business is a company called Australia Kingsroad Trading Propriety Limited, known as AKT, which the First and Second applicant own jointly in the proportions of 70 per cent and 30 per cent.

  11. The First Applicant claims that he and his wife held assets in AKT totalling $275,802.  The First Applicant claims that the source of loan monies was a Chinese company called Tianjin King Road Garments Company Limited, referred to as TKG.

  12. On 20 November 1996, Ms Cheung Oi Kuan made a statutory declaration in which she stated that she was the sole proprietor of TKG and that she had retired from the company in March 1994.  In a detailed submission the Applicant’s migration agent explained that the First Applicant originally came into contact of Ms Cheung Oi Kuan between 1987 and 1992 when he was the marketing executive for state owned corporations which imported textiles, during which time Ms Cheung had placed significant orders.

  13. The Applicant decided to set up his own export business, however because of government restriction, TKG was set up under Ms Cheung’s name because she was eligible to conduct the export business.  After Ms Cheung retired in March 1994, she remained the registered proprietor of TKG in order to retain the export licence.  The Applicant became the beneficial owner of the company.

  14. The Applicant gave evidence that the company TKG was in fact wound up at the end of 1998.

  15. The Migration Review Tribunal was not prepared to accept that the First Applicant owned TKG for the purpose of sourcing the loan of $274,037 to AKT.  The Tribunal considered that the Applicant was not the legal owner of TKG, which had remained in the name of Ms Cheung.  The Tribunal also considered that the Applicant may have been the beneficial owner of the company, but this could not be recognised because of regulation 1(11) (A) requiring the contract, which enforced the rights of the Applicant to be stamped or registered by an appropriate authority under the law of China.  The Tribunal considered that the Applicant could not meet the requirement in criterion 845.215 that he had net assets in the business of at least $100,000.

  16. The application came on for hearing in this Court on 21 April 2005.  On that day, without objection from the Respondent, the Applicants’ counsel filed in Court an amended application.  That application seeks the following orders:

    (1)A writ of certiorari quashing the decision of the Migration Review Tribunal.

    (2)A writ of prohibition directed to the Respondent Minster and her officers, agents and delegates restraining her from acting upon giving effect to or proceeding further with respect to the decision of the Migration Review Tribunal.

    (3)A writ of mandamus compelling the Tribunal to redetermine the Applicants’ application according to law.

    (4)A declaration to the decision of the Tribunal was made in excess of jurisdiction, and was therefore null and void.

    (5)An order for costs.

  17. In the amended application, the Applicants set out three particulars as to why they say the Migration Review Tribunal erred in applying criterion 845.215 of Schedule 2 of the Migration Regulations.  Those particulars are the following:

    (a)When determining whether the total value of the net assets owned by the First Applicant and his spouse in their main business in Australia was, throughout the relevant period, at least $100,000, the Tribunal failed to consider evidence that their main business had no liability current or non-current to repay a sum of $274,037 to Tianjin King Road Garments Company Limited, ie TKG, or any other person or entity.

    (b)The Tribunal misdirected itself as to the proper test to be applied in determining the total value of the net assets owned by the First Applicant and his spouse, the Second Applicant, in their main business in Australia.  The Tribunal limited itself to the question of whether the Applicant was the legal or beneficial owner of the assets of TKG as the source of the loan of $274,037 to the main business in Australia.  The Tribunal ought to have also considered whether, during the relevant period, the main business in Australia was the outright owner of the sum of $274,037 because TKG had been wound up at the end of 1998, and there was no longer any obligation to repay any loan.

    (c)The Tribunal erred in law in holding that the main business had a liability, current or non-current, to repay a sum of $274,037 to TKG or any other person or entity.

  18. In this matter, the Court had the benefit of written submissions from counsel for the Applicant and counsel for the Respondent.  The Court also had benefits of affidavits, which to my mind were of only marginal relevance.

  19. The Court also had the benefit of articulate and well prepared submissions from counsel for the Applicant, Mr Poynder, and counsel for the Respondent, Mr Potts.

  20. In the Applicant’s written outline of submissions, the issue in the case was described as relatively straightforward.  Counsel expressed it in this way:

    Did the Migration Review Tribunal apply the correct test when determining the value of the assets, and by the First Applicant in his main business?

  21. The criteria to be met at the time of the application for a subclass 845 visa is set out in Schedule 2 of the Migration Regulations. Criterion 845.215 required an applicant to establish that:

    The total value of the net assets owned by the applicant, or by the applicant and the applicant’s spouse together, in the main business or main businesses in Australia (a) is and (b) has been throughout the period of 12 months immediately preceding the making of the application at least $AU100,000.

  22. When the Applicants lodged their form 1138 business skill profile with the application, they claimed that they held net assets in AKT totalling $275,802.  The figure had been derived from AKT’s audited financial statements for the year ended 30 June 2000.  It was calculated in this way:

1)   Net assets of the business

$1,765.00

2) Total percentage of business owned by    Applicant and spouse

100%

3) Ownership share of Applicant and wife

$1,765.00

  4)  Plus loan by Applicant to company

$274,037.00

5)  Less loans by company to Applicant

Nil

6) Loans by Applicant to finance invested in business

Nil
Total net assets $275,802.00.

  1. The value of the Applicant’s interest in AKT consisted almost solely in the loan of $274,037. Without that loan, the Applicant could not have been able to meet the requirements of criterion 845.215.

  2. The primary issue before the delegate and the Tribunal, submitted the Applicant, was the source of the loan of $274,037.  Both the delegate and the Tribunal were concerned that the loan monies had not come from the Applicant personally or any company that the Applicant owned.  The Applicant said that the source of the loan monies was the company called TKG, and provided documents evidencing transfers of large sums of money from TKG to AKT between 23 December 1996 and 23 May 1997.  Those are shown at pages 162 to 165 of the Court book.

  3. The resident of Hong Kong, to whom I have previously referred, Cheung Oi Kuan, stated in a statutory declaration that she was the sole proprietor of TKG and that she had retired from the company in March 1994.  She had transferred her ownership and the power and control of the company to the Applicant at the time of her retirement.  The Applicant subsequently provided a capital verification report, which showed that TKG had been established in 1993 by Ms Cheung, and the Applicant also provided a copy of a contract dated 18 March 1993, in which Ms Cheung agreed to transfer ownership of that company to the Applicant from March 1994.  That contract was subject to repayment of her original investment of $US105,000 on the basis that TKG would source all of its supplies from Ms Cheung.

  4. The Applicant also provided an audit report dated 24 February 2002 confirming that Ms Cheung’s original investment had been repaid, and the company’s assets had been owned by the Applicant since March 1994.  That report showed that a total of $US172,000 had been transferred to Australia by TKG up until 31 December 1998.

  5. The Applicant’s migration agent made a detailed submission setting out the history of the First Applicant’s involvement with Ms Cheung and the way the business had been set up. The Applicant gave evidence at the Tribunal Hearing that TKG had been wound up at the end of 1998.

  6. The Applicant submits however that neither the delegate nor the Tribunal were prepared to accept that the Applicant had relevantly owned the company TKG for the purpose of sourcing the loan of $274,037 to the new company AKT.  The Tribunal took the view that the Applicant was not the legal owner of TKG, which it remained in the name of Ms Cheung.  The Tribunal also considered that to any extent that the Applicant may have been the beneficial owner of the company, this could not be recognised because regulation 1(11) (A) of the Migration Regulations required the contract to be stamped or registered by an appropriate authority under the laws of China, and that way the Tribunal took the view that the Applicant could not meet the requirements of criterion 845.215; that he had net assets in the business of at least $100,000.

  7. The Applicant agrees that he was not through TKG, the source of the loan. What the Applicant says that having made a decision that the Applicant was not the source of the loan, that the Tribunal was then required to take a further step, which was to determine the current status of the loan.  The Applicant points out that the Tribunal had a variety of pieces of evidence before it to that effect.  First, the TKG had transferred large sums of money to AKT in 1996 and 1997.  Second, that these sums of money were in fact loans from TKG to AKT.  Third, that there had been no demand for repayment of these loans.  Fourth, that TKG’s previous owner, Ms Cheung, had been repaid her investment in the company and had no claims against it.  Fifth, that TKG had been wound up at the end of 1998.

  8. The Applicant submits that having found that the Applicant had not been the source of the $274,037, the Tribunal should next have asked, “What was the current status of the loan?” given the circumstances that existed during the relevant period, ie the 12 months prior to the Applicants lodging their application on 17 November 2000.

  9. Mr Poynder submitted for the Applicants that the balance sheet and the financial statements showed a non-current liability of $274,037 as at 30 June 2000.

  10. The evidence before the Tribunal was that TKG had ceased at the end of 1998, and it had been actually wound up in that same year.

  11. It was conceded that it was unclear whether the company had been formally wound up in the sense understood in under the law of this company, ie by the appointment of a liquidator.  I was referred to the definition of winding up in Butterworth’s Australian legal dictionary.

  12. Mr Poynder of counsel submits that it is more likely that the company was in fact terminated by “disbandment” under Article 45(2) of the General Principles of the Civil Law of the Peoples’ Republic of China.  A copy of that document was before the Tribunal.

  13. If that is the way that TKG had been wound up, ie being terminated by disbandment, a liquidation organisation would have been established under Article 47 in the general principles and the assets would have been realised and the liabilities discharged.  That is the case with all company liquidations.  If there had been an outstanding debt by AKT, it would have been pursued by TKG, or the liquidator at TKG.

  14. Mr Poynder submitted that the fact that this had not occurred raised a strong presumption that there was no outstanding debt due by AKT to TKG.  So, this liability, and he used the word liability in inverted commas, of $274,037 no longer existed.  Mr Poynder went on to submit it was highly likely that any debt by AKT to the liquidator was probably unenforceable, although that is not to my mind an issue of great point.  What is a point, is that the Tribunal should have considered that TKG had ceased to exist for almost six years by the time of the Tribunal decision and that no demand had been then made for repayment of this loan of $274,037, so there was almost no possibility that any proceedings could have been commenced within any relevant limitation period.

  15. Mr Poynder submits that section 14(1)(a) of the Limitation Act 1969, a New South Wales Act, prescribes the limitation period of six years from the time of a breach of a civil contract.

  16. Mr Poynder submitted that the Tribunal’s primary error in the case was to restrict its considerations to the past, that is where the loan came from, and failed to consider the present, which was the status of the loan during the relevant period.  By the term “present” I accept that Mr Poynder meant at the time of the application, and not necessarily the time of the Tribunal hearing or the time of the hearing before this Court.

  17. It was submitted that if the Tribunal had considered the status of the loan during the relevant period, the Tribunal would have found that liability for repayment of the loan had been discharged by termination of the company so that the applicant did meet he requirements of criterion 845.215.

  18. Counsel for the Respondent, Mr Potts, provided the Court with a detailed and helpful outline of submissions.  Mr Potts pointed out that, this is at paragraph 13 of his written submissions, that the Applicants were not only given the opportunity to make submissions on numerous occasions, but they availed themselves of that opportunity.  This was done through their migration agent, they had professional advice, and they were given ample opportunity to put their case to the Tribunal in any way they saw fit.

  19. I am of a view that that is in fact correct, and that the Applicants did avail themselves of the opportunity.

  20. What counsel for the Respondent goes on to submit is that the role of the delegate and the Tribunal points to the situation that under section 65 of the Migration Act, the Minister, if the Minister is satisfied that he criteria for a visa have been met, must grant the visa. However if the Minister is not satisfied, the Minister must refuse to grant the visa. There is no duty on the Minister to obtain further information. Generally speaking, it is the task of the Applicant to provide as much information as may be necessary so that the Minister may reach the required state of satisfaction. If the evidence is not sufficient to satisfy the Minister, then the Minister must refuse the visa. It is principally therefore for the Applicant to determine what material should be provided to the Minister. It is no error for the Minister to make a decision purely on the evidence before the Minister.

  21. Mr Potts submitted that the Migration Review Tribunal when conducting a review stands in the shoes of the Minister as itself engaged in the enquiry as to whether it is satisfied that visa criteria have been met.  It has power to seek further information under section 359, but does not have a duty to do so.

  22. The Tribunal is to decide the application on the material before it.  If the Tribunal is not satisfied on the material before it, it is required to affirm the decision to refuse the visa.  See Tide Sequence Industries v Minister for Immigration and Multicultural and Indigenous Affairs (2005) FMCA 49, paragraph 16(a) decision Smith FM.

  23. The counsel for the Respondent referred to the decision of Kirby J in Dranichnikov v Minster for Immigration and Multicultural and Indigenous Affairs (2003) 197 ALR 389 at [78]. His Honour said,

    The function of the Tribunal, as of the delegate, is to respond to the case that the applicant advances.

  1. Mr Potts went on to point out that von Doussa J said in SCAL v Minster for Immigration [2003] FCA 548 at [16]:

    Neither the delegate nor the Tribunal is obliged to consider claims that have not been made.

  2. Mr Potts pointed out that that decision of his Honour had been upheld on appeal, and the citation is [2003] FCAFC 301.

  3. Mr Potts submits in a lengthy and detailed submission going on from the point, the Tribunal was not required to consider a case that was not advanced before it.  It was not required to consider possibilities, in that he referred to the Applicant’s submission that the Tribunal’s primary error was to restrict its consideration to the past, which is where the loan of $274,037.00 had come from, and not considered the status of the loan during the relevant period.

  4. The loan, or recovery of the loan, was statute barred during the relevant period.

  5. Mr Potts submitted there was no evidence in the termination of the company as distinct from its business and there was no evidence of any liquidation and no evidence that any winding up had been completed.

  6. He submitted that even on the assumption that the Tribunal was required to consider that the $274,037.00 was a loan from TKG to AKT, there was no evidence that that loan had been discharged “by termination of the company”.  The Tribunal was simply not required to consider those matters and it did not therefore err.

  7. I had the opportunity of hearing, as I have said, the oral submissions from both counsel.  Mr Poynder reiterated that the Tribunal should not have stopped at the point of finding that the Applicants were the beneficial owner of TKG.  The Migration Review Tribunal should have made a finding as to what the current status of the loan was; that the loan belonged to the company, which was now owned by the Applicant and therefore meets the test.  It is possible to look beyond the balance sheet and to see that the $274,037.00 was not a liability, but indeed an asset.  The Migration Review Tribunal, he submitted, was preoccupied with the source of the moneys and incorrectly saw that as the main question.

  8. The Applicant claimed that the moneys were loans.  He said that if it was a loan, the Migration Review Tribunal had to determine where it had come from and whether there is an obligation to repay it.  He submitted that there was evidence that Ms Cheung was repaid in 1994, and that TKG had been wound up in 1998.

  9. It is important that the state of the evidence before the Tribunal was in fact that TKG had been wound up as long ago as 1998.  The Tribunal, he submitted, should have looked at the fact that if TKG had been wound up in 1998, what then was the status of the money in 1999?

  10. He answered the Respondent’s submission that this was not the case that the Applicant put to the Migration Review Tribunal at the time, by saying that the Applicant had asserted that at all times this was always his own money.

  11. The Migration Review Tribunal does operate as an inquisitorial body and it should have assessed the evidence as to what the current state was.

  12. Mr Potts submitted that the issue had not been squarely raised with the Migration Review Tribunal.  The Tribunal should not have had to embark on any enquiry.  It was not, he submitted, an obvious situation, as in a Prasad[1] situation.  He submitted there was no evidence as to how the Chinese law would view the situation of the winding up.  There was no evidence before the Migration Review Tribunal about where the money was.  Even if New South Wales law applied, he submitted, the Migration Review Tribunal was looking at the relevant period, which was 12 months before the date of application.  In all, he submitted that the case advanced by the applicant was never one put to the Migration Review Tribunal.

    [1] Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155

  13. In reply, Mr Poynder made three points.

  14. He submitted the Applicants had not attempted to recast their claims.  It was always argued that the ownership of the assets was the relevant point, not the source of the assets.

  15. The Tribunal, he submitted, took the Applicants down the wrong track.  What he is saying is that the Tribunal has to look at the ‘now’ situation and not the ‘then’.

  16. He submitted that an examination of the transcript of the Applicant’s evidence before the Tribunal shows that there was evidence before the Migration Review Tribunal finding that the company had been wound up in 1998.

  17. He did submit that the question of the limitation period was not relevant; it was only relevant to the fact that there had never been any attempt by the Chinese company to recover the money.

  18. The situation, as I see it, is that the Applicants’ submissions have great force.  There could not be any effort by the Chinese company, TKG, to recover the money because the company had effectively been controlled by the Applicants, therefore recovering money from one asset to another was, and would have been, a pointless exercise.

  19. I am satisfied that there was sufficient evidence before the Migration Review Tribunal for the Tribunal to examine the current status of the money, that there was evidence capable of supporting the finding that the company had been wound up in 1998.

  20. I am satisfied therefore that the Migration Review Tribunal did ask itself the wrong question, and that this is a jurisdictional error.

  21. As a result I am satisfied that the application for the review must be granted, and I propose to make the orders that the Applicant seeks.

I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Scarlett FM

Associate:  V Lee

Date:  10 May 2005


Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0