Tran v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs

This case concerned an appeal to the Federal Court of Australia concerning decisions made by the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. The applicant, Dac Dung Tran, sought judicial review of a decision by the Administrative Appeals Tribunal (AAT) which affirmed the refusal of an employer nomination by H & L, a business engaged in growing tomatoes and capsicums. H & L had sought to sponsor two nominees for a subclass 186 visa.

The primary legal issue before the court was whether the AAT had erred in law by misinterpreting and applying regulation 5.19(3)(d)(i) of the Migration Regulations 1994. Specifically, the court had to determine the correct test for assessing whether a nominator had demonstrated the capacity to employ a nominee on a full-time basis for at least two years, and whether the AAT had focused unduly on the nominator's profitability to the exclusion of other evidence of capacity to pay.

Heffernan J reasoned that the AAT had applied an incorrect test by requiring H & L to demonstrate that it could meet the nominated salaries and still make a trading profit in each future year for at least two years. The court held that the correct approach under regulation 5.19(3)(d)(i) required the nominator to demonstrate that there was no reason apparent from the business's capacity to conclude that it would not be able to fulfil its employment agreement for at least two years. This involved showing a capacity to pay the wages, which could include utilising existing reserves, and did not necessitate a guaranteed profit. The court noted that H & L had cash reserves exceeding $400,000, which was relevant to its capacity to pay.

The court dismissed the grounds of appeal relating to the employer nomination. The applications of the nominees were consequential to the employer nomination and were adjourned for mention, with the expectation that they would be dismissed.