Sun v Minister for Immigration - [2020] FCCA 2438

FEDERAL CIRCUIT COURT OF AUSTRALIA

SUN & ORS v MINISTER FOR IMMIGRATION & ANOR

[2020] FCCA 2438

Catchwords:
MIGRATION – Application for State/Territory Sponsored Investor (Provisional) (Class UR) (Subclass 165) visa – requirement that funds used for Designated Investment not be encumbered – findings by Tribunal that funds were encumbered – no jurisdictional error established – application dismissed.

Legislation:

Migration Act 1958 (Cth), ss.109, 109(1)(c).

Migration Regulations 1994 (Cth), r.2.41, Sch.2, cl.165.222, cl.165.222(2)(b).

Cases cited:

Australian Leisure & Hospitality Group Pty Ltd v Director of Liquor Licensing

[2012] WASC 463.

Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611.

Zhao v Minister for Immigration and Multicultural Affairs [2000] FCA 1235.

Minister for Immigration and Citizenship v SZIAI (2009) 259 ALR 429.

Minister for Immigration and Citizenship v Li (2013) 249 CLR 332.

First Applicant:

LILI SUN

Second Applicant:

JUNMIN TAN

Third Applicant:

YINGSHI TAN

First Respondent:

MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS

Second Respondent:

ADMINISTRATIVE APPEALS TRIBUNAL

File Number:

BRG 611 of 2019

Judgment of:

Judge Egan

Hearing date:

31 August 2020

Date of Last Submission:

31 August 2020

Delivered at:

Brisbane

Delivered on:

2 September 2020

REPRESENTATION

Solicitors for the Applicant:

Mr Stevenson of Ace Law

Solicitors for the Respondents:

Ms Reid of Clayton Utz

Second Respondent:

Submitting appearance save as to costs

ORDERS

The Amended Application for Review filed on 27 May 2020 be dismissed.
The First and Second Applicants pay the First Respondent’s costs of and incidental to the application for review fixed in the amount of $7,467.00.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 611 of 2019

LILI SUN

Applicant

JUNMIN TAN

Applicant

YINGSHI TAN

Applicant

And

MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

Introduction

The first applicant is a citizen of the People’s Republic of China who applied for a State/Territory Sponsored Investor (Provisional) (Class UR) (Subclass 165) visa on 1 February 2011.
There are a number of criteria which must be satisfied by an applicant for such a visa at the time of the making of a decision in respect of such visa. Clause 165.222 of Schedule 2 to the Migration Regulations 1994 (Cth) (‘the Regulations’) relevantly provided as follows:
“165.222
(1) The applicant has made a designated investment of an amount of AUD750 000, in the name of the applicant or in the names of the applicant and his or her spouse or de facto partner, in the State or Territory in which the appropriate regional authority that sponsored the applicant is located.
(2) The Minister is satisfied that the funds mentioned in subclause (1) were:
(a) legally owned by:
(i) the applicant; or
(ii) the applicant’s spouse or de facto partner, or
(iii) the applicant and his or her spouse or de facto partner together; and
(b) unencumbered; and
(c) accumulated from the qualifying business or eligible investment activities of:
(i) the applicant; or
(ii) the applicant’s spouse or de facto partner; or
(iii) the applicant and his or her spouse or de facto partner together.”
On 19 March 2013, the Department received information from the first applicant that real property owned by her and situated at Caobao Road had been sold to one Zhou in December 2012. Such claim was supported by a property sale agreement dated 6 March 2013, together with bank records showing receipt by the first applicant of the sum of RMB 2,500,000 into her bank account.
On 30 July 2013, the first applicant provided a Form 1031 – Declaration Business Skills Visa Class–State/Territory Sponsored Investor– Designated Investment - which confirmed that a Queensland Treasury Corporation bond with a four year term had been purchased for AUD $750,000.00.
Having purportedly complied with cl. 165.222 of Schedule 2 to the Regulations, the applicants were granted a visa.
On 6 September 2016, the Department received information that the said Zhou had commenced legal proceedings against the first applicant and the second applicant for recovery of the sum of RMB 7,000,000 which was claimed by Zhou to have been lent by her to the first and second applicants.
At [21] of its reasons, on the question of the relevant sale history in respect of the Caobao Road property, the Administrative Appeals Tribunal (‘the Tribunal’) found as follows:
“[21] Ms Sun and Mr Tan both admit that the Caobao Road Property was never actually transferred to Xiaobo Zhou. Ms Sun and Mr Tan also both admit that they continued to hold the funds paid to them by Xiaobo Zhou. The information before the Tribunal indicates that:
·7 March 2013 - Xiaobo Zhou transfers funds of RMB 2,500,000, evidenced by a bank deposit slip, and a copy of Ms Sun's Bank of Communications statement, indicating the funds were received by her the same day.
·19 March 2013 - Ms Sun advises the Department that one of the ways she acquired the funds to make the Designated Investment was through the sale of the Caobao Road property, for RMB 2,500,000 to Xiaobo Zhou in December of 2012.
·30 July 2013 - the Designated Investment is made with the Queensland Treasury Corporation.
·22 August 2013 - Applicants granted a Class UR Subclass 165 State/Territory Sponsored Investor (Provisional) visa.
·29 April 2015 - Ms Sun and Mr Tan sell the Caobao Road Property to Aidi Chen, Rongbao Li and Qin Li for RMB 2,290,000. This transaction is evidenced by a Shanghai Real Estate Purchase and Sales contract, provided to the Department by the Applicant.
·20 July 2016 - the Putuo District People's Court of Shanghai issues a seizure order in relation to the Caobao Road property.”
In the light of the admission by the first and second applicants that they never actually transferred ownership of the Caobao Road Property to Zhou, and having considered all of the evidence before it, the Tribunal was not satisfied that the funds totalling the sum of RMB 2,500,000 were not “unencumbered” (within the meaning of that word as used in cl. 165.222(2)(b) of Schedule 2 to the Regulations) at the time that the Treasury bond was purchased by the first applicant in July 2013. At [24] of its reasons, the Tribunal found as follows:
“[24] While Ms Sun asserts that she did not borrow money from Ms Zhou, there was no sale of the Caobao Road Property to Ms Zhou. The Caobao Road Property could not be considered unencumbered - either (1) Ms Zhou had an equitable interest in it following payment of the purchase price to Ms Sun; or (2) there was no genuine intention on the part of Ms Zhou to ever purchase the property, and she provided the funds to Ms Sun until the property could be sold to another buyer. In either case, the resulting impact is that Ms Sun has received funds from Ms Zhou which were not unencumbered.”
(Emphasis added)
The word “unencumbered” has not been defined in either the Act or the Regulations. In those circumstances, the ordinary meaning of the word should prevail. In Australian Leisure & Hospitality Group Pty Ltd v Director of Liquor Licensing [2012] WASC 463 at [22], Hall J said:
“[22]… If it is intended that a word in a statute will be used in a specific way that may not accord with ordinary usage such an intention is generally reflected in a definition in the statute. Absent such a definition, the ordinary meaning should prevail unless there is something in the context to suggest that another meaning is intended.”
Clause 165.222 of Schedule 2 sets out qualifying criteria designed to satisfy the Department that an applicant is not a person of straw. To meet the criteria, an applicant must be able to satisfy the Department that they have accumulated investment funds sufficient to evidence their financial security. The criteria are not directed to whether or not an applicant has the capacity to borrow funds for the purpose of their making an authorised investment.
In the absence of definition, and consonant with what the Court considers was intended by the legislature when enacting cl. 165.222 of Schedule 2 to the Regulations, the usual meaning of the word ‘unencumbered’, when referring to funds, ought to be construed as meaning funds which were legally owned by a visa applicant which did not have the character of either loan monies, or monies otherwise the subject of a mortgage, charge or lien which could give rise to recovery action being taken in the event of some default on the part of the applicant.
At [27] of its reasons, the Tribunal correctly recorded that the issue before it was whether the information which the first applicant included in her visa application was correct or not.
On 6 October 2017, the Minister wrote to the applicants notifying them of an intention to cancel the visa.
Despite further submissions having been provided by the applicants to the Department, the applicants were notified on 22 December 2017 that the delegate had cancelled the visa on the basis that the sale of the Caobao Road property was not genuine, and that the money used to finance the purchase of the Treasury bond had been borrowed from Zhou.
On 28 December 2017, the applicants applied to the Tribunal for review of the delegate’s decision.
On 29 May 2019, the Tribunal affirmed the decision of the delegate.

Grounds for Review

On 2 July 2019, the applicants filed an Originating Application for Review of the decision of the Tribunal.
On 27 May 2020, the applicants filed an Amended Application for Review, the grounds of which were as follows:
“Grounds of application
1. …
2. …
3. The AAT erred in law in finding that there was non-compliance in the way described in the notice given to the Applicant under s.107 of the Act in considering whether the visa should be cancelled pursuant to s.109(1) because:
1) The AAT erred in law by applying the rules and principles of Australian Law, instead of Chinese Law, or to consider the effect of chinese law to a contract for the purchase of land Located in China, between to Chinese Citizens, in order to determine the relevant principles of whether or not the property was encumbered
2) The AAT erred in law by finding that the funds advanced did not arise from the Sale of the property.
3) The AAT erred at law in holding that the monies advanced to the appellants were or could be considered at law to be a loan.
4) The AAT erred in law by failing to make a finding of fact of the applicant, Lili Sun’s version of events or to consider the relevance of her intentions at the time of making the statement to the question of whether or not the statements provided were false and misleading.
5) The tribunal erred in finding that they had not been notified of a change of circumstances in circumstances where the change of circumstances did not take place until after the visa was granted and the applicant is not required to notify of circumstances which take place after the grant of the visa.
6) The original notice did not sufficiently particularise the breach as it referred to in the show cause notice as a cancellation of the visa on the grounds that the sale was not genuine and that funds provided were borrowed, while the AAT decision was ultimately made on the basis that the property was encumbered by an equitable interest.
4. In exercising their discretion under section 109 The Tribunal placed too much weight on the perceived non compliance with the visa requirements and not enough weight on the subjective considerations relevant to the appellant including those factors which lead to any non compliance and the prejudice the applicant suffered by not being allowed to extend their visa, due to the court proceedings.
5. ….
6. The AAT erred at law in finding they were required to cancel the visa of Mr Tan and Ms Jun Min Tan.”
As to Ground 3 of the Amended Application for Review, it was submitted on behalf of the applicants that when considering whether funds used to make a designated investment were encumbered or not, as referred to in cl. 165.222, the Tribunal ought to have considered “Chinese law” for such purpose. The lawyer for the applicants conceded that he had no authority for such proposition. He further conceded that there was no evidence put by the applicants before the Tribunal as to what the law of China might relevantly have been on such question. Such submission is without merit.
The Tribunal property engaged in a consideration as to what relevantly constituted encumbered funds. It made findings which were open to it based upon the material before it. It did so in a considered manner after weighing up all of the written and oral evidence given by each of the applicants to the Tribunal. The Tribunal clearly engaged upon a consideration of the applicant’s claims and found against the applicant. It has long been accepted that different minds might legitimately reach different conclusions on the same facts. As was said by Crennan and Bell JJ in Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at [131]:
“[131] What was involved here was an issue of jurisdictional fact upon which different minds might reach different conclusions. The complaint of illogicality or irrationality was said to lie in the process of reasoning. But, the test for illogicality or irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.”
As to Ground 3(6) of the Amended Application for Review, such claim asserts that the Notice of Intention to Consider Cancellation (NOICC) of the visa was insufficiently particularised. There is no merit to such claim.
The NOICC dated 6 October 2017 [1] specifically dealt with the issue of the first applicant’s non-compliance with the provisions of s. 109 of the Migration Act 1958 (Cth) (‘the Act’), particularly at CB page 5 where the NOICC asserted that the first applicant had provided incorrect answers relating to the character of funds said to be the funds of the first applicant used to buy the Treasury bond. Section 109 of the Act relevantly provided as follows:
“Section 109 Cancellation of visa if information incorrect
(1) The Minister, after:
(a) deciding under section 108 that there was non-compliance by the holder of a visa; and
(b) considering any response to the notice about the non-compliance given in a way required by paragraph 107(1)(b); and
(c) having regard to any prescribed circumstances;
[1] Court Book (CB) pp. 4 – 11 inclusive.
may cancel the visa.
(2) If the Minister may cancel a visa under subsection (1), the Minister must do so if there exist circumstances declared by the regulations to be circumstances in which a visa must be cancelled.”
The prescribed circumstances referred to in s. 109(1)(c) of the Act are as set out in r. 2.41 of the Regulations, which provided as follows:
“Regulation 2.41 Whether to cancel visa—incorrect information or bogus document (Act, s 109(1)(c))
For the purposes of paragraph 109(1)(c) of the Act, the following circumstances are prescribed:
(a) the correct information;
(b) the content of the genuine document (if any);
(c) whether the decision to grant a visa or immigration clear the visa holder was based, wholly or partly, on incorrect information or a bogus document;
(d) the circumstances in which the non-compliance occurred;
(e) the present circumstances of the visa holder;
(f) the subsequent behaviour of the visa holder concerning his or her obligations under Subdivision C of Division 3 of Part 2 of the Act;
(g) any other instances of non-compliance by the visa holder known to the Minister
(h) the time that has elapsed since the non-compliance;
(j) any breaches of the law since the non-compliance and the seriousness of those breaches;
(k) any contribution made by the holder to the community.
Note: Under s. 109 of the Act, the Minister may cancel a visa if there was non-compliance by the holder of a kind set out in Subdivision C of Division 3 of Part 2 of the Act. The Minister is to have regard to the prescribed circumstances in considering whether to cancel the visa.”
It has been held that a NOICC must serve its statutory purpose so as to inform the visa holder of the basis upon which cancellation was being considered so that a visa holder could have the chance of responding to the notice. As was said in Zhao v Minister for Immigration and Multicultural Affairs [2000] FCA 1235 at [25] – [26] per French, Hill and Carr JJ:
“[25] S119 requires particulars of the grounds relied upon to be included in the notice. The level of particularity is not specified. It must serve the statutory purpose. That is to say it must be sufficient, when read in conjunction with the supporting information, to fairly inform the visa holder of the basis upon which cancellation is being considered so that the visa holder is adequately equipped to provide such relevant information as may be available and to make such submissions as may be open. The supporting information will include a description of any evidence upon which the grounds are based. The grounds, as particularised, may be inferences from the evidence and in that sense conclusionary. The other element of the notice is the invitation to the holder to show, within a specified time, that the grounds do not exist or that there is a reason why the visa should not be cancelled. It is important to note that the terms of the invitation do not reflect the imposition upon the visa holder of a statutory onus at this point which, if not satisfied, will result in the visa being cancelled. That would no doubt be the case if a firm intention to cancel the visa had been formed and the visa holder's task was to persuade the decision-maker to abandon that intention. The decision-maker, acting under s116, must be satisfied of one or other of the matters set out in that section before the visa can be cancelled. That state of satisfaction is a real state of satisfaction which must be reached on a consideration of the available material. A visa cannot be cancelled simply because the visa holder has failed to show cause why it should not.
[26] The mode of notification may be prescribed. There is, however, no prescription, so notice may be given under s119 in any way the Minister thinks appropriate (s119(2)). It may be notified orally (s119(3)). The section does not indicate explicitly whether notice may be given in more than one way and at more than one time. However provided the statutory purpose of fairly informing the visa holder is served, there is no reason why the requirement of notification which is substantive rather than formal could not be met by both written and oral notification. It may be that the notification could be found in more than one document. So an initial document may, at the request of the visa holder, be the subject of greater elaboration. At a practical working level a degree of flexibility is important. The requirement of notification of grounds of possible cancellation is not a requirement for delivery of some form of pleading which may then be the subject of strict construction and technical criticism. The overall purpose to be served by s119 is procedural fairness and it is that which informs the construction and application of the section.”

(underlining added)
The NOICC specifically raised the question of the funds not being relevantly unencumbered for the purposes of cl. 165.222 of Schedule 2 to the Regulations. There is no merit in a submission to the contrary.

As to Ground 4 of the Amended Application for Review, the Tribunal at [37] – [49] of its reasons actively engaged in the intellectual process of assessing whether the first applicant had given incorrect information concerning the character of funds used for the purpose of the purchase of the Treasury bond. It was alive to the issues before it and it appropriately dealt with those issues in its reasons.
By Ground 4 of its Amended Application for Review, the applicants seek a merits review of the factual findings made by the Tribunal. That is something which this Court cannot undertake. There is no merit to this ground.
As to Ground 6 of the Amended Application for Review, the merits of such ground were rightly conceded by Mr Stevenson on behalf of the applicants as being dependent upon the success or otherwise of Grounds 3 and 4 of the Amended Application for Review. In the light of the Court’s findings as to Grounds 3 and 4, Ground 6 necessarily fails.
It cannot be said that the Tribunal, when so analysing the matters of relevance before it, failed to make an obvious inquiry about a critical fact, as was the subject of consideration by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ in Minister for Immigration and Citizenship v SZIAI (2009) 259 ALR 429 at [25] - [27], where it was said:
“[25] Although decisions in the Federal Court concerned with a failure to make obvious inquiries have led to references to a “duty to inquire”, that term is apt to direct consideration away from the question whether the decision which is under review is vitiated by jurisdictional error. The duty imposed upon the tribunal by the Migration Act is a duty to review. It may be that a failure to make an obvious inquiry about a critical fact, the existence of which is easily ascertained, could, in some circumstances, supply a sufficient link to the outcome to constitute a failure to review. If so, such a failure could give rise to jurisdictional error by constructive failure to exercise jurisdiction. It may be that failure to make such an inquiry results in a decision being affected in some other way that manifests itself as jurisdictional error. It is not necessary to explore these questions of principle in this case. There are two reasons for that.
[26] The first reason is that there was nothing on the record to indicate that any further inquiry by the tribunal, directed to the authenticity of the certificates, could have yielded a useful result. There was nothing before the Federal Magistrates Court or the Federal Court to indicate what information might be elicited if the tribunal were to undertake the inquiry which was said to be critical to the validity of its decision. The inquiry suggested was telephone contact with the persons whose mobile telephone numbers were shown on the certificates. But the question whether the certificates contained false statements as to authorship or otherwise would not be able to be determined by calls placed to those telephone numbers. If the respondents to the calls admitted to the tribunal or its officers that the certificates contained false statements, then the grounds for a decision adverse to SZIAI would have been strengthened. If the respondents said that the contents were true, it would have added nothing to the statements effectively conveyed by the certificates themselves. The second reason is that the response made by SZIAI’s solicitors to the tribunal’s letter of 14 January 2008 itself indicated the futility of further inquiry. There was nothing that SZIAI or his solicitors were able to add, beyond a bare denial of what appeared in the National Ameer’s letter. For these reasons there is no factual basis for the conclusion that the failure to inquire constituted a failure to undertake the statutory duty of review or that it was otherwise so unreasonable as to support a finding that the tribunal’s decision was infected by jurisdictional error.
[27] No issue of procedural fairness otherwise arises. SZIAI was given an opportunity to comment upon the National Ameer’s letter and did so in the limited terms indicated. To invite SZIAI to a further hearing pursuant to s 425 of the Migration Act would have been an empty exercise. There was no such obligation in any event. The National Ameer’s letter was by way of information that the tribunal considered would be a reason, or part of a reason, for affirming the decision under review. It discharged its obligation, pursuant to s 424A of the Migration Act, by giving SZIAI the opportunity to comment on that information. The letter did not raise a new issue in the sense that that term is used in s 425.”
Neither could the decision of the Tribunal be considered as legally unreasonable, or one lacking an evident and intelligible justification, as such respective concepts were considered by Hayne, Kiefel and Bell JJ in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [66] and [76] where it was said:
“[66] This approach does not deny that there is an area within which a decision-maker has a genuinely free discretion. That area resides within the bounds of legal reasonableness. The courts are conscious of not exceeding their supervisory role by undertaking a review of the merits of an exercise of discretionary power. Properly applied, a standard of legal reasonableness does not involve substituting a court's view as to how a discretion should be exercised for that of a decision-maker. Accepting that the standard of reasonableness is not applied in this way does not, however, explain how it is to be applied and how it is to be tested.
…
[76] As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion "if upon the facts [the result] is unreasonable or plainly unjust". The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.”
The applicants have failed to establish jurisdictional error on the part of the Tribunal.
The Amended Application for Review is without merit and is dismissed.
The Court will hear the parties as to costs.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge Egan

Associate:

Date: 2 September 2020