Untung & Ors v Minister for Immigration & Anor
[2007] FMCA 1317
•24 August 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| UNTUNG & ORS v MINISTER FOR IMMIGRATION & ANOR | [2007] FMCA 1317 |
| MIGRATION – Review of Migration Review Tribunal decision – refusal of business visa – assessment of the value of the applicants’ business – shareholder loans – Tribunal doubted source of loans in its decision but had previously misled the first applicant into thinking that it was accepted that the loan was from her – jurisdictional error established. |
| Federal Magistrates Court Rules 2001 (Cth) Migration Act 1958 (Cth), ss.359, 359A, 360 Migration Regulations 1994 (Cth) |
| First Applicant: | FELINA NOVIANTY UNTUNG |
| Second Applicant: | MARKELIK SUCAHYO |
| Third Applicant: | STEFANIE SUCAHYO |
| Fourth Applicant: | KRISTINA SUCAHYO |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File Number: | SYG 1376 of 2007 |
| Judgment of: | Driver FM |
| Hearing date: | 8 August 2007 |
| Delivered at: | Sydney |
| Delivered on: | 24 August 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr N Poynder |
| Solicitors for the Applicant: | Peter Bollard & Associates |
| Counsel for the Respondents: | Ms B Nolan |
| Solicitors for the Respondents: | DLA Phillips Fox |
ORDERS
A writ of certiorari shall issue quashing the decision of the Migration Review Tribunal signed on 11 April 2007 and handed down on 20 April 2007.
A writ of mandamus shall issue, requiring the Migration Review Tribunal to redetermine the review application before it according to law.
The first respondent is to pay the applicants’ costs and disbursements of and incidental to the application in the sum of $5,000 in accordance with rule 44.15 and item 1(c) of part 2 of schedule 1 to the Federal Magistrates Court Rules 2001 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1376 of 2007
| FELINA NOVIANTY UNTUNG |
First Applicant
| MARKELIK SUCAHYO |
Second Applicant
| STEFANIE SUCAHYO |
Third Applicant
| KRISTINA SUCAHYO |
Fourth Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| MIGRATION REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
Introduction and background
This is an application to review a decision of the Migration Review Tribunal (“the Tribunal”). The decision was signed on 11 April 2007 and was handed down on 20 April 2007. The Tribunal affirmed a decision of a delegate of the Minister that the applicants were not entitled to business skills (residence) visas. The following background statement is derived from paragraphs 1 through to 15 of the applicants’ outline of submissions filed on 8 August 2007 and paragraphs 2 through to 14 of the Minister’s written submissions filed on the same day.
On 25 November 2005 the first applicant (“the applicant”) applied for a subclass 845 (Established Business in Australia) visa, based on her ownership interest in a company called Kristef Australia Pty Ltd (“Kristef”), which was the owner of the Balgowlah Rio Grande Texas BBQ Restaurant. An extract submitted with the application from the Australian Securities and Investment Commission indicated that the applicants (being husband and wife) were both 50% owners in the company.
In order to obtain her subclass 845 visa the applicant had to satisfy the first respondent that at the time of her application the total value of the net assets in the business owned by her and her husband was, and had been throughout the period of 12 months immediately preceding the making of the application, at least A$100,000.[1] Clause 845.215 read:
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;
[1] Migration Regulations 1994, Schedule 2, Part 845, clause 845.215 (“the Regulations”)
at least AUD100,000.
The applicant was therefore required to show that she held the requisite $100,000 in net assets from 25 November 2004 to 25 November 2005.
In her application documents the applicant claimed that the value of her net assets in Kristef for the year 2004/2005 was $119,865.[2] This was calculated as follows:
[2] court book (CB) 21
(1)Net assets of the business: $1,896
(2)Total percentage of business owned by
applicant and spouse 100%
(3)Ownership share of applicant and spouse $1,896
ADD:
(4) Balance of loans by applicant to company: $117, 969
LESS:
(5) Balance of loans by company to applicant: Nil
LESS:
(6) Balance of loans by applicant to finance
investment in business Nil
TOTAL NET ASSETS $119,865
The above figures were derived from the financial statements for Kristef for the year ending 30 June 2004 and 30 June 2005.[3] Two items in these financial statements are relevant:
a)Among the non-current assets of the business was a sum of $49,500[4], which was identified as “goodwill”.[5]
b)Among the current liabilities of the business was a sum of $79,515 for 2004[6] and $117,969 for 2005[7], which was identified as “shareholders’ loan”.[8]
[3] CB 28-50
[4] CB 44 (2004) and p 33 (2005)
[5] CB 47 (2004) and p 35 (2005)
[6] CB 44
[7] CB 33
[8] CB 48 (2004) and CB 36 (2005)
On 28 April 2006, a delegate of the first respondent refused the applicants’ business visa application[9]. The application was refused for a failure to satisfy regulation 845.215.
[9] CB 167
The issue which was of greatest concern to the primary decision-maker was whether the “goodwill” component could be claimed as an asset. The primary decision-maker found that the goodwill had been inflated from the figure of $20,000 in the original purchase contract for the business, and that the purchase of the business by the applicant was not an “arms-length” transaction because the vendor had been the applicant’s brother. On this basis the primary decision-maker did not allow any of the claimed goodwill component and the visa was refused on the basis that the applicant could not establish that she held net assets of $100,000 from 25 November 2004 to 25 November 2005.[10]
[10] The primary decision is at CB 168-173
On 25 May 2006, the applicants lodged an application for review of the delegate’s decision with the Tribunal[11]. The question for the Tribunal was whether the total value of net assets owned by the applicants amounted to AUD100,000 in the 12 month period prior to the application, being 25 November 2004 to 25 November 2005.
[11] CB 175
On review, the Tribunal had also been concerned with the validity of the goodwill component in the claimed net assets.[12] In response the applicant had claimed that even if the goodwill component could not be included in the net assets, a previously omitted item of plant and equipment had to be taken into account which could then increase the value of the net assets to above $100,000.[13]
[12] See letter dated 6 December 2006 from the Tribunal to the applicant pursuant to s 359A; CB 192-193
[13] CB 194-196
On 6 December 2006, the applicants were sent via their authorised recipient a facsimile copy of the first of two invitations to comment on information[14], inviting them to comment on information provided by the business’ accountant for the purposes of the primary application.
[14] CB 192
The first applicant responded by a letter dated 13 December 2006[15].
[15] CB 194
On 6 February 2007, the first applicant appeared at an oral hearing before the Tribunal to give evidence[16]. At the hearing a further issue emerged, namely, the quantum of the shareholders’ loans during the relevant period of time. The Tribunal was particularly interested in when the shareholders’ loans were increased from $79,515 to $117,969.[17] This was clearly relevant, since the figure of $79,515 as at 30 June 2004 may not have been sufficient to enable the applicant to meet the $100,000 threshold as at 25 November 2004, while (putting aside the issue of goodwill) the figure of $117,969 as at 30 June 2005 would have enabled her to meet that threshold as at 25 November 2005.
[16] CB 207. A transcript of the hearing is exhibited to the affidavit of Peter Bollard made on 23 July 2007. Unfortunately, many of the question numbers in the transcript are repeated several times, apparently on the basis that interrupted questions are considered to be a single question.
[17] Transcript, Q62-Q80
During the hearing the discussion of the shareholders’ loans was focussed on when the loans had been increased from $79,515 to $117,969. The issue was raised by the Tribunal, at questions 75-78:
So if that, if that increased loan, you already had $79,000 put in, O.K., if that loan was increased to one hundred and seventeen thousand on or around November, 2004...then really we can, we can take that higher amount from the start of the period that we’re looking at, which is November, 2004 to November, 2005...So where if maybe it was lodged, increased in May, 2005...then obviously there’s been a five-month period, November, 2004 to May, where your loan in the company was still at the lower level, seventy-nine thousand...So it will be useful to know. So one thing I think we’ll need to have from you is when did the loan increase...from seventy-nine thousand...to a hundred and seventeen thousand. If you can get, and maybe, I mean, if it’s, presumably there was some sort of official... transfer... so your accountant should have these records.
After confirming that the loans were from the applicant and her husband to the company[18] the Tribunal variously asked (counsel’s emphasis retained):
Q76....then obviously there’s been a five-month period, November, 2004 to May, where your loan in the company was still at the lower level, seventy-nine thousand.
Q93...Hopefully your loan increased on or before, you know, November, 2004.
Q94...the nett assets of the company plus your loans, O.K., so we can count your loan to the company.
Q96So hopefully you increased the loan, you know, before the 25th of November, 2004.
Q136...And if you could also give me that date on which your loan to the company increased to a hundred and seventeen thousand, maybe in the notes under that relevant item of current liabilities.
[18] Transcript, Q62
The Tribunal further indicated to the applicant that, if she could show that her loan was increased on or prior to 25 November 2004, she was likely to be successful in her application:
Q152So hopefully your accountant’s records will show that the loan was increased on or before the 25th of November, 2004...because I think if, if that’s the case then it looks to me on the figures, on the new figures...that you will have had at least a hundred thousand in nett assets plus your investments.
Q164...look at the information we’re asking you to give...and if you give, if it shows that you had at least $100,000 invested in the company from 25th of November or before then to the time you applied for your visa then, then I can make a positive finding, O.K.
On 7 February 2007, as was foreshadowed by the presiding member at the oral hearing, the applicants were sent, via their authorised recipient a facsimile copy of the second invitation to comment on information, which also included an invitation to provide information pursuant to s.359(2)[19] of the Migration Act 1958 (Cth) (“the Migration Act”). The information sought was material from the business’ accountant indicating:
a)That the total value of the net assets of the business, if the value of the goodwill is limited to no more than $20,000, was nonetheless at least $100,000 as at 30 June 2005 and June 2004; and
b)The date(s) upon which the applicants’ unsecured loans to the business increased from 79,515 to $117,969.
[19] CB 213
The letter relevantly asked her to provide the following further information:
A statement (with supporting documentation) by the accountant indicating that the date(s) on which your (and your spouse’s) unsecured loans to the main business increased from $79,515 to $117, 969. (counsel’s emphasis retained)
On 2 March 2007, the applicants, by their authorised representative, responded in writing[20]. The material provided in response included amended balance sheets as at 30 June 2005 and 30 June 2004 showing goodwill at $20,000. Documentation about shareholders’ loans to the company from 2 July 2005 to 7 December 2005 was also provided[21].
[20] CB 216
[21] CB 229
The applicants’ accountant enclosed documentation “listing down” the movement of the shareholders’ loan as from 1 July 2004 to 7 December 2005. This included a single page explanation[22], “Movement of the USD fund injected by the shareholders into Kristef Australia Pty Ltd as working capital from 2 July 2004 to 7 December 2005”.[23]The explanation referred to fourteen pages of attachments, which included:
a)A Westpac Bank statement dated 2 July 2004 apparently indicating a transfer of US$145,000 to Kristef made that day.[24] The signature on the deposit slip was that of the applicant.[25] There was a handwritten notation towards the foot of the document, “US50K AUS70,482.09”. The explanation described this as “USD50,000 was deposited into a Company term deposits account”.
b)Fourteen pages of Westpac statements[26] relating to a foreign currency term deposit in the name of Kristef, dating from 8 November 2004 (with a principal investment of US$37,585) to 7 November 2005 (with a principal investment of US$30,307.66). These were described in the explanation as follows: “Company term deposit was rollovered into different terms with the cut-off balances”.
[22] CB 229
[23] Emphasis added
[24] CB230
[25] cf. CB 22
[26] CB 231-242
The amended financial statements provided showed the net assets of the business valued at $1,896 at 30 June 2005, and negative $8,045 (i.e., a net liability) at 30 June 2004. Taking into account shareholders loans to the value of $113,469 at 30 June 2005 and $75,015 at 30 June 2004, this indicated the total value of the business was $115, 365 at 30 June 2005, and $66,970 at 30 June 2004.
At this time the Tribunal also had the following evidence before it relating to the source of the shareholders’ loans:
a)The audited financial statements for the years ending 30 June 2004 and 30 June 2005, which describe these as “shareholders’ loans”. On the evidence the only shareholders in the company were the applicant and her husband.[27]
b)A Westpac statement dated 2 November 2004 recording the payment of A$70,482.09 into the account of Kristef.[28] This had been provided with the original application documents, and it included a handwritten notation on the statement, “was Ms Felina Untung’s own fund before 30 June 2004”.
c)A list of documents annexed to the applicant’s Form 1138 Business Skills Profile which was provided with her original application.[29] This referred to a document referable to question 11, “details of net assets”[30] which was described as follows:
Though the value of any net assets in business as at 30 June 2004 was only $71470 which is less than 100000, the applicant had injected another $70482 as working capital into the business on 2 July 2004. This amount has been staying in the business throughout the 2004/05 financial year (see attachment A).
Attachment A was a “clean” copy of the Westpac statement dated 2 November 2004.[31]
[27] CB 165
[28] CB 107
[29] CB 144
[30] CB 21
[31] CB 143
The decision of the Tribunal
The Tribunal’s decision[32] is straightforward. After reciting the evidence, the Tribunal identified the issue as:
...whether the total value of the net assets owned by the applicant and the applicant's spouse together in the main business, taking into account shareholders' loans, was at least $100,000 from 25 November 2004 to 25 November 2005.[33]
[32] CB 249-253
[33] CB 242
The Tribunal then referred to the value of the shareholders’ loans as at 30 June 2004 and 30 June 2005 and, with reference to the evidence provided by the applicants’ accountant on 2 March 2007, it made the following observations and findings (counsel’s emphasis retained):
In the documentation enclosed with the applicant's accountant's letter dated 2 March 2007 to the Tribunal, there is an unsigned statement stating that on 2 July 2004 USD50,000 was deposited into a Company term deposit account. The statement adds that from 8 November 2004 to 7 December 2005, the Company term deposit was "rollovered" into different terms with the following cut-off balances: shareholders' loan balance of $113,469 as at 30 June 2005 and $108,930 as at 7 December 2005. The supporting documentation comprises statements on Westpac letterhead which relate to currency transactions involving the main business but which do not identify either the applicant or her spouse as the source of loans to the main business. Since neither the applicant nor her spouse is identified in the Westpac documents, the Tribunal is unable to draw any conclusions from these documents about the timing and/or amount of their loans to the main business.
Based on the information provided, the Tribunal is unable to determine on which date and over what continuous period prior to 30 June 2005 and after 30 June 2004 the total value of the net assets owned by the applicant and the applicant's spouse together in the main business, taking into account shareholders' loans, was at least $100,000. The Tribunal is therefore not satisfied that the total value of the net assets owned by the applicant and the applicant's spouse together in the main business was at least $100,000 throughout the period 25 November 2004 to 25 November 2005. Given this and earlier findings, it follows that the applicant does not meet clause 845.215 of Schedule 2 to the Regulations and the Tribunal must affirm the decision under review.
The application
These proceedings began with a show cause application filed on 1 May 2007. The applicants asserted actual notification of the Tribunal decision on 20 April 2007. I find that the application was filed within time. The applicants now rely upon an amended application filed on 23 July 2007. The grounds in that application are:
1.The second respondent (“the Tribunal”) failed to make any finding on the applicant’s claim and supporting evidence that on 2 July 2004 she deposited US$50,000 (AU$70,482) as a loan into the account of her business.
Particulars
The Tribunal considered documentation from the Westpac Bank to the effect that on 2 July 2004 a deposit of US$50,000 had been made into the applicant’s business. The Tribunal considered that as neither the first-named applicant nor her spouse were identified in this documentation it was unable to draw any conclusions about the timing or amount of their loans made to the business.
The Tribunal failed to consider the first-named applicant’s claim, in the supplementary answer to question 11 of her Form 1138 Business Skills Profile, that on 2 July 2004 she injected AU$70,482 into her business which remained in the business throughout the 2004/2005 financial year. The Tribunal also failed to consider the first-named applicant’s claim to the same effect made at the haring of the application on 6 February 2007.
2.The Tribunal failed to comply with its obligation under s 360(1) of the Act to give the applicant an opportunity to give evidence and present arguments on an issue arising in relation to the decision under review.
Particulars
The hearing of the application on 6 February 2007 and the letter from the Tribunal to the first-named applicant dated 7 February 2007 proceeded on the joint assumption that the Tribunal accepted that the first-named applicant and her husband were the source of the loan of US$50,000 to the applicant’s business. In the event the applicant was denied an opportunity to respond to the Tribunal’s finding that neither she nor her husband were identified as the source of the loan.
3.The exercise by the Tribunal of its decision-making power was so unreasonable that no reasonable person would have so exercised it.
Particulars
Information regarding the source of the deposit of US$50,000 to the first-named applicant’s business on 2 July 2004 was readily available to the Tribunal and was centrally important to the decision to be made. In the circumstances the Tribunal should have sought to obtain this information.
The evidence
I received as evidence the court book filed on 5 June 2007. I also received the affidavit of Peter Bollard made on 23 July 2007 and filed on the same day. Annexed to that affidavit is a transcript of the hearing conducted by the Tribunal on 6 February 2007.
Submissions
The applicants relevantly submit as follows:
The applicant’s case is based on the following propositions:
(a)The basis of the Tribunal’s decision was that there was no evidence to identify her or her husband as the source of the shareholders’ loan referred to in the financial reports of Kristef.
(b)The source of the shareholders’ loan had never been identified as a “live” issue by the Tribunal, nor indeed by the primary decision-maker.
(c)The Tribunal, during the hearing and in its letter to the applicant dated 7 February 2007, misled the applicant to believe that the source of the shareholders’ loan was not a “live” issue in the application.
(d)The Tribunal had before it evidence upon which it could have found that the source of the shareholders’ loan was the applicant and/or her husband. However no reference was made to this in its findings.
(e)It would have been a simple exercise for the Tribunal to have requested the applicant to provide additional proof that either she or her husband were the source of the shareholders’ loan.
In the applicant’s submission, this caused the Tribunal to fall into at least three errors which went to jurisdiction.
Firstly, the applicant’s claim and supporting evidence that she and her husband were the source of the US$50,000 loan to Kristef bore directly on the issue of whether they held the requisite $100,000 assets in the business during the relevant 12 month period. In this respect, it was a “component integer” of her claim: Htun v Minister for Immigration (2001) 194 ALR 244 at 259 (Allsop J).
While it is generally correct to say that there is no express obligation on the Tribunal to set out all of its findings of fact[34] the failure by a Tribunal to refer to and make findings on evidence which bears directly on the issue for determination raises an inference that it had an erroneous understanding of what it was required to do: Minister for Immigration v Yusuf (2001) 206 CLR 323 348 [75] (McHugh, Gummow and Hayne JJ); Re Minister for Immigration; Ex parte Durairajasingham (2000) 168 ALR 407 at 422-423 [65] (McHugh J). In this sense, the Tribunal may also have failed to take into account a relevant consideration: M51 of 2002 v Minister for Immigration [2003] FCA 887 at [17]-[19] (Ryan J). Both of these amount to jurisdictional error.
Secondly, the manner in which the Tribunal misled the applicant as to the relevance of the source of the shareholders’ loan, and that is was a "live" issue even following the hearing, denied the applicant an opportunity to deal with the issue by providing further evidence of the source of the loan. In the applicant’s submission this amounted to a breach of the Tribunal’s obligation under s 360(1) of the Migration Act to allow her an opportunity to give evidence and present arguments on "issues arising in relation to the decision under review": see Shen v Minister for Immigration [2004] FMCA 693 at [35]; NAQF v Minister for Immigration (2003) 130 FCR 456 at [83-87]; Minister for Immigration v SCAR (2003) 128 FCR 553 at [33-37]; Applicant VBAB of 2002 v Minister for Immigration (2000) 121 FCR 100 at [54], and [62].
Thirdly, it is submitted that - even if the Tribunal was not convinced by the evidence that had been placed before it - it would have been a comparatively straightforward exercise for the Tribunal to have requested the applicant to provide evidence of the source for the shareholder’s loans. While there is no overt “duty to inquire” on the Tribunal[35], where it is apparent that material is readily available which is centrally relevant to the decision to be made, for the Tribunal to proceed to a decision without making any attempt to obtain that information may be described as an exercise of the decision-making power in a manner that is so unreasonable that no reasonable person would have so exercised it: Prasad v Minister for Immigration (1985) 6 FCR 155, 170 (Wilcox J), Luu v Minister for Immigration (2002) 197 ALR 433, [28] (Gray, North and Mansfield JJ), SZEGT v Minister for Immigration [2005] FCA 1514 at [12] (Edmonds J). This may also amount to unreasonable use of the powers under s 427(1)(d) of the Migration Act: Applicant M164/2002 v Minister for Immigration [2006] FCAFC 16 at [75] and [76] (Lee J, Tamberlin J agreeing).
[34] Respondent’s submission at [16].
[35] Applicant M164/2002 Minister for Immigration v SGLB (2004) 207 ALR 12 at 21-22 [42]-[43] (Gummow and Hayne JJ; Gleeson J agreeing at 13 [1]).
The Minister’s submissions are as follows:
Ground 1: Failure to make any finding on the applicant’s claim and supporting evidence
First, there is no express obligation on the Tribunal to make a finding. It is settled authority that the Tribunal is required only to set out the findings which it did make: s 368 and Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [68]. Section 368 does not require the Tribunal to make, and then set out, some findings additional to those which it actually made.
Secondly, the Tribunal did make a finding with respect to the USD50,000 at CB 252. The Tribunal found that it was “unable to draw any conclusions from these documents about the timing and/or amount of their loans to the main business” (CB 252). This does not amount to a conspicuous failure to make a finding. Rather, the Tribunal has made a general finding of non-satisfaction. Its finding on this particular piece of evidence is inconclusive. In circumstances where the elements of the applicant’s claim have been addressed, the failure to mention or grapple expressly with part of the applicant’s evidence does not mean that the Tribunal decision is vitiated by jurisdictional error by reason of a failure to take into account of a relevant consideration: Paul v Minister for Immigration and Multicultural Affairs (2001) 113 FCR 396 at [79] per Allsop J; Applicant A169 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 8 at [24]; Yusuf at [68].
The allegation that the Tribunal failed to consider the first applicant’s claim that she deposited AUD70,482 into her business which remained in the business throughout the 2004/2005 financial year is, it is submitted, deceptive. The AUD70,482 is purported in the particulars to the first ground to be the conversion amount from the USD50,000. The Applicants purport that it is a separate “claim”, but because it relates to the same deposit of funds, being the USD50,000 (which was considered by the Tribunal in its reasons), then it is not. Therefore, by considering the USD50,000, the Tribunal has considered the claimed deposit of AUD70,452.
Ground 2: Denial of the opportunity to respond to the Tribunal's finding that neither the first applicant nor her husband were identified as the source of the loan
The review process in Part 5 of the Act is predominantly a documentary process. It is noted that the first applicant’s appearance at a hearing pursuant to s 360 is not the focus or culmination of the review process: it is but a step in the process: SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 215 ALR 162 at [192]–[193] per Hayne J. The obligation to invite comment on adverse information and give additional information pursuant to ss 359A(1) and 359(2) respectively, and the obligation to invite an applicant to a hearing to present arguments and give evidence pursuant to s 360 are independent obligations and the observance of one does not remove the need also to observe the other: SAAP at [60] per McHugh J.
The Tribunal regarded the hearing on 6 February 2007 as being completed. There is nothing express or implied in the transcript to indicate that the Tribunal intended that the hearing was adjourned. On the contrary, the presiding member seemed anxious to terminate the hearing and to complete the review on the papers. The manner in which the hearing was conducted shows that the Tribunal considered that the applicant’s claims would be answered by the outcome of the inquiry it intended to make to establish, relevantly, the date and source of the loan. The Tribunal accepted, on numerous occasions, that if the material the Applicants provided demonstrated that the first applicant and her husband were the source of the loan and that the date of the loan was before November 2004, the Applicants would be granted the visa. Conversely, the Tribunal made it sufficiently clear at the hearing that if the source and date were not satisfactorily established, the review application would be likely to fail. In this way, the first applicant was very much apprised of the nature and importance of “the issues arising in relation to the decision under review”: cf. SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 231 ALR 592.
The Applicants as promised were invited to comment on the information and to give further information and did so. The Applicants did not request a further hearing: cf. SZILQ v Minister for Immigration & Citizenship [2007] FCA 942. What the Applicants are suggesting by this ground is that s 360 somehow obliges the Tribunal to give the Applicants a further chance to comment on the material put forward to support the issue arising under review, at the point at which the Tribunal became minded to make an unfavourable decision on the material given. It is hard to see how this suggested obligation is able to be derived from any of the statutory obligations on the Tribunal in Part 5, and, specifically, is able to be derived from s 360 especially in light of the well established authority that the Tribunal is not obliged to reveal its thought processes: Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576. This is especially so in light of the Full Court of the High Court’s recent comments in SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 with regard to a similar construction posed by the appellant in that matter concerning the Tribunal’s obligation arising pursuant to s 424A. At [20], the Full Court observed:
Moreover, supposing the appellants had responded to a written notice provided by the Tribunal after the hearing, if inconsistencies remained in their evidence, would s 424A then oblige the Tribunal to issue a fresh invitation to the appellants to comment on the inconsistencies revealed by – or remaining despite – the original response to the invitation to comment? If so, was the Tribunal obliged to issue new notices for so long as the appellants' testimony lacked credibility? If the appellants' desired construction of s 424A leads to such a circulus inextricabilis, it is a likely indication that such a construction is in error.
[counsel’s emphasis deleted]
More importantly, the material that the Applicants gave to the Tribunal in response to its invitation to provide further information raised no new issues beyond those canvassed at the hearing, and in that respect the obligation under s 360 to provide a further hearing was not enlivened: Win v Minister for Immigration and Multicultural Affairs (2001) 105 FCR 212 at [27]–[28].
Moreover, if the hearing had been incomplete on 6 February 2007, it would have needed to be resumed, but the manner in which the hearing was conducted establishes that the Tribunal regarded the hearing as complete and that no objection was raised by or on behalf of the Applicants at that time. The hearing opportunity that the first applicant was afforded was a real one and was adequate in the circumstances to meet the requirements of s 360: Minister for Immigration and Multicultural and Indigenous Affairs v SCAR (2003) 128 FCR 553.
Ground 3: Unreasonableness
In light of Justice Edmonds’ reasoning in SZEGT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1514 at [14]–[20], the allegation that the Tribunal’s failure to make a further inquiry is somehow unreasonable, when it not obliged to make any, seems somewhat absurd, for the following reasons:
The Applicants do not attack the Tribunal’s decision on the basis that it is so unreasonable that no reasonable decision-maker could have arrived at the decision in question on the material before him: see Minister for Immigration & Multicultural Affairs v Eschetu (1998) 197 CLR 611 at [128], [131], [136] and [137], per Gummow J. Rather, the Applicants identify the discretionary power as being that contained in s 359 of the Act: the power to get information that it considers relevant, with the discretion being whether or not to exercise that power.
In this instance, the alleged failure to exercise the power was in the context of the Tribunal’s consideration of material obtained pursuant to a request that it be provided with additional information under s 359(2). The material provided was however insufficient to allow the Tribunal to reach the necessary state of satisfaction. If the material is unhelpful the Tribunal was not obliged to go further: Yang v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 258, citing Ertan v Hurford (1986) 72 695 at 702 per Wilcox J.
Nonetheless, what the Applicants appear to evoke by this ground is yet a further obligation on the Tribunal to inquire again of the Applicants under s 359(1), supposedly as to the source of the deposit. This further obligation appears to be of the kind Wilcox J described in Prasad v Minister for Immigration & Ethnic Affairs (1985) 6 FCR 155 at 170:
But, in a case where it is obvious that material is readily available which is centrally relevant to the decision to be made, it seems to me that to proceed to a decision without making any attempt to obtain that information may properly be described as an exercise of the decision-making power in a manner so unreasonable that no reasonable person would have so exercised it. It would follow that the Court, on judicial review, should receive evidence as to the existence and nature of that information.
See also in the same vein, the decisions of the Full Court in Luu v Renevier (1989) 91 ALR 39 at 50 and Tickner v Bropho (1993) 40 FCR 183 at 197, per Black CJ, as providing support for the statement of Wilcox J in Prasad.
One of the difficulties this argument faces is that the Full Court of the Federal Court has held in WAGJ of 2002 v Minister for Immigration & Multicultural and Indigenous Affairs [2002] FCAFC 277 (which concerned a parallel power for the RRT to instigate “inquiries” under s 427), that the Tribunal is not under a duty even to consider exercising the relevant power. The Full Court’s construction of the provision is fundamentally inconsistent with the proposition, the Applicants seem to put, that the decision by the Tribunal not to exercise the discretionary power under s 359 is “unreasonable” and that the failure somehow goes to the validity of its decision.
While WAGJ concerned the statutory grounds of review under the former s 476 of the Act, the same is not true of other cases denying the existence of a duty to enquire: see Minister for Immigration & Multicultural & Indigenous Affairs v VSAF of 2003 [2005] FCAFC 73 at [20]. The principle established is equally applicable in a case such as this seeking relief by way of Constitutional writs. In all cases the Tribunal does not fail to comply with its obligations under the Act if it fails to make, or to consider making, an inquiry: SZEGT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1514.
Further, the introduction of s 357A of the Act has put the position beyond doubt. Section 357A provides that Pt 5 Div 5 of the Act is an exhaustive statement of the requirements of natural justice, and there is no provision in Part 5 which obliges the Tribunal to make enquiries or conduct its own investigation: see SZGQN v Minister for Immigration & Citizenship [2007] FCA 428 at [28].
These submissions were augmented orally before me on 8 August 2007.
Reasoning
The Tribunal decision appearing from page 249 of the court book is relatively short and simple. The issue before the Tribunal was whether the applicants had satisfied the Tribunal that they met clause 845.215 of the Regulations which provided:
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 AUD100,000
(Tribunal’s emphasis retained)
The applicants had provided audited financial accounts to the Minister’s Department in support of their application[36]. Those purported to show that the applicants met the $100,000 requirement, although it remained open whether they met it for the full 12 month period relevant to the application from 25 November 2004 to 25 November 2005. A question was whether the funds shown in the audited accounts were assets of the business before or after 25 November 2004.
[36] CB 38
The applicants had failed before the delegate because the delegate had rejected a claim of goodwill[37]. The applicants had sought to plug that gap by reference to a valuation of plant and equipment of the business but, for the purposes of the Tribunal decision, the issue turned upon shareholders’ loans to the company. This issue was discussed at the Tribunal hearing. A significant aspect of that discussion is recorded at page 10 of the transcript:
[37] CB 171
Q62. So in the notes under not 7, borrowings, so those figures, one hundred and seventeen thousand nine hundred and sixty-nine for, in 2005 and seventy nine thousand five hundred and fifteen, they represent unsecured shareholders’ loans. So they’re loans by you and your husband to the company are they?
A Yes
Q63.The full amounts?
A Ah hmm.
Q64. O.K. So I think under the policy we can count those in the nett asset position, O.K., so we can add those amounts to the nett asset position, O.K. So that means, we’re not talking about goodwill at the moment, O.K.
A O.K. Yeah.
Q65.So that means that as at 30 June, 2005, if we add the one hundred and seventeen thousand nine hundred and sixty-nine to the nett assets of one thousand eight hundred and ninety-six, that gives a nett assets of you and your husband of just under one hundred and twenty thousand, something like that.
A Yes
Q66. O.K. and then as at 30 June, 2004, we can add the seventy nine thousand five hundred and fifteen to the nett asset position of minus eight thousand and forty-five, O.K., it’s a nett asset at that date ---
A Ah hmm.
Q66. --- so you’d have to subtract that eight, that gives you a nett asset, our nett asset ownership of the company, it’s just maybe around just over $71,000.
A Yes.
Q67. O.K.
A Yes, sir.
Further, on page 11 of the transcript the following exchange occurred:
Q75. So if that, if that increased loan, you already had $79,000 put in, O.K., if that loan was increased to one hundred and seventeen thousand on or around November 2004 ---
A Yeah.
Q75. --- then really we can, we can take that higher amount from the start of the period that we’re looking at, which is November, 2004 to November, 2005. Do you understand what I’m saying?
A Yeah. Ah hmm.
It was apparent from this discussion that the Tribunal was looking for something further to verify that the shareholders’ loans existed for the requisite amount for the full period in issue. The applicants told the Tribunal that their accountant had the relevant records. At page 26 of the transcript the following exchange occurred:
Q152.So hopefully your accountant’s records will show that the loan was increased on or before the 25th of November 2004 ---
A I hope so.
Q152. --- because I think if, if that’s the case then it looks to me on the figures, on the new figures ---
A Yep.
Q152.--- that you will have had at least a hundred thousand in nett assets plus your investments.
A I’m sure it is.
Q153.O.K. So, well, if you can get that information, I’ll send the letter out ---
A Ah hmm.
Q153. --- but if you can get even a letter from your accountant ---
A Yes.
Q153. --- straightaway saying that the, just commenting on the changes that need to be made, maybe that’s even quicker, you know, because it identifies all of the components. We’re really just looking at this forty-nine thousand five hundred and the interest-bearing liabilities, O.K., the loan.
A Ah hmm. Ah hmm. Yep.
A further exchange is recorded on page 28 of the transcript as follows:
Q164.But when we send it, as I said, it will have this sort of adverse information at the start but just don’t worry about that, look at the information we’re asking you to give ---
A Ah hmm.
Q164. --- and if you give, if it shows that you had at least $100,000 invested in the company from 25th of November or before then to the time you applied for your visa then, then I can make a positive finding, O.K.
AO.K., sir.
(emphasis added)
Finally, on page 30 of the transcript, the following exchange occurred:
Q169.--- what’s needed because it really is this financial issue in 215/84, [25/11/04] the one that, we’ll attach that to the letter again so you show the accountant that’s what we need, he needs to show that your ownership in the company needs to be at least a hundred thousand ---
A Yeah, the ---
Q169. --- from the 25th of November of whatever.
A Yeah.
In my view, on a fair reading of the transcript read as a whole, the Tribunal was giving the applicants to understand that it required verification from their accountant that the shareholders’ loans were held by the business for the entire 12 month period. At no stage during the hearing did the Tribunal express doubt that the shareholders’ loans existed at all. It is true that the existence of the shareholders’ loans was fundamental to the outcome of the application and that issue necessarily inhered in the review. The issue hardly needed to be stated and in any event it was stated by the Tribunal in the first passage quoted above on page 10 of the transcript. The problem is, however, that a fair minded observer, viewing the exchanges between the Tribunal and the first applicant, would have gained the impression that the Tribunal was accepting the fact of the loans but required more verification of the timing of them. Obviously, if the loans had been from someone other than the applicants, the funds would not be an asset of the applicants’ business but a liability. At no stage, however, did the Tribunal tell the applicants that it required verification about the source of the loans, only the timing of them.
The problem was compounded by the invitation to comment sent by the Tribunal on 7 February 2007[38]. Relevantly, that letter included a request to provide further information pursuant to s.359(2) of the Migration Act in the following terms:
- Information from your main business’ accountant indicating that the total value of the net assets of you and your spouse in the main business, including your loans to the business and an estimated value of goodwill of no more than $20,000, was at least $100,000 at 30 June 2005 and 30 June 2004.
- A statement (with supporting documentation) by the accountant indicating that the date(s) on which your (and/or your spouse’s) unsecured loans to the main business increased from $79,515 to $117,969.
[38] CB 213-214
The first item of information referred to “your loans to the business” which is open to the interpretation that the Tribunal accepted that the source of the loans was the applicants. The second item of information requested sought only information relating to the dates of the increase in the loans and again referred to “your (and/or your spouse’s) unsecured loans”, reinforcing the impressing that the source of the loans was accepted.
The applicants’ accountant responded with the financial statements appearing at CB 217 to 228 and the additional information appearing on CB 229 to 242. That information included Westpac term deposit statements in the name of the company Kristef Australia Pty Ltd showing on their face a record of a continuous deposit holding of not less than US$30,307.66 from 8 November 2004 until 7 December 2005.
Further, the information included a Westpac foreign currency account deposit form apparently signed by the first applicant and apparently relating to a foreign currency transfer of US$145,000 of which US$50,000 was apparently deposited with the Australian currency conversion of $70,487.09[39]. The deposit is dated 2 July 2004 and is in the name of the company.
[39] CB 230
In the light of the oral and written communications between the Tribunal and the applicants on the issue to be resolved, the decision of the Tribunal on that issue would have come as a surprise. Relevantly, the Tribunal said[40]:
In its letter of 7 February 2007 the Tribunal asked for a statement (with supporting documentation) by the accountant indicating the date(s) on which the applicant’s (and/or her spouse’s) unsecured loans to the main business increased. In the documentation enclosed with the applicant’s accountant’s letter dated 2 march 2007 to the Tribunal, there is an unsigned statement stating that on 2 July 2004 USD50,000 was deposited into a Company term deposit account. The statement adds that from 8 November 2004 to 7 December 2005, the Company term deposit was “rollovered” into different terms with the following cut-off balances: shareholders’ loan balance of $113,469 as at 30 June 2005 and $108,930 as at 7 December 2005. The supporting documentation comprises statements on Westpac letterhead which relate to currency transactions involving the main business but which do not identify either the applicant or her spouse as the source of loans to the main business. Since neither the applicant nor her spouse is identified in the Westpac documents, the Tribunal is unable to draw any conclusions from these documents about the timing and/or amount of their loans to the main business.
[40] CB 252
The applicants had no prior warning that they needed to satisfy the Tribunal as to not only the timing of the loans but the source of them. Given the fundamental nature of the issue, a warning would probably not have been required if the Tribunal had said nothing. However, the communications, both oral and written, between the Tribunal and the applicants, would have, and I find did, create the impression that the Tribunal was satisfied on the issue of the source of the loans. The Westpac documents doubted by the Tribunal clearly identified the company as the holder of the deposit funds and those documents could not be expected to disclose the source of the funds. It is reasonable to suppose that if the applicants had been put on notice by the Tribunal that further evidence of the source of the funds was required, they may have been able to assist the Tribunal further. They had, however, been misled into thinking that they only needed to satisfy the Tribunal about the timing of the loans. The Westpac documents addressed that issue.
I find, consistently with the applicants’ submissions, that because they were misled by the Tribunal as to the issue they needed to address, the hearing opportunity afforded the applicants was not a fair one with a result that the Tribunal failed to meet its obligations pursuant to s.360 of the Migration Act. That is a jurisdictional error entitling the applicants to relief in the form of constitutional writs of certiorari and mandamus. There is a question whether the document at CB 151 casts doubt on the applicants as the source of the loan funds, but that was not considered by the Tribunal and would be a matter for the Tribunal to consider on remittal.
It is unnecessary to deal with the other grounds of review advanced.
As to costs, I see no reason to depart from the Court scale in this matter and will order that the Minister pay the applicants’ costs in accordance with that scale in the sum of $5,000.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 24 August 2007
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