Weng v Minister for Immigration
[2010] FMCA 670
•3 September 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WENG v MINISTER FOR IMMIGRATION & ANOR | [2010] FMCA 670 |
| MIGRATION – Review of AAT decision – application for business skills visa – where applicant owned a property development company which had built 3 houses, two of which were listed for sale, and invested $2.1 million – whether on facts as found the Tribunal was entitled to find that applicant’s company was not an “eligible business” under s.134 or that the applicant had not made genuine efforts to establish a business – residual discretion – whether Tribunal fettered its discretion by limiting it to unanticipated circumstances or failed to take into account amount invested – whether Tribunal failed to give proper, genuine or realistic consideration to submissions concerning genuine efforts and residual discretion. |
| Migration Act 1958 (Cth), ss.134, 425 |
| Kim v Minister for Immigration [2004] FCA 31 Russo v Minister for Immigration [2007] AATA 2054 Tan & Anor v Minister for Immigration [2004] AATA 808 Hope v Bathurst City Council (1981) 44 CLR 1 Puzey v Commissioner of Taxation (2003) 131 FCR 244 Re Australian Industrial Relations Commission; Ex Parte Australian Transport Officers Federation (1991) 171 CLR 216 Australian Health Insurance Association Ltd v Esso Australia Ltd (1993) 116 ALR 253 American Leaf Blending v Director of Inland Revenue [1978] 3 All ER 1185 Ferguson v Federal Commissioner of Taxation (1979) 37 FLR 310 Tio v Minister for Immigration [2004] AATA 1268 Lala v Minister for Immigration [2003] AATA 209 Hindrodjojo v Minister for Immigration [2004] AATA 724 Lio v Minister for Immigration [2006] AATA 189 Tan v Minister for Immigration [2004] AATA 808 Ng v Minister for Immigration [2003] AATA 299 NAIS v Minister for Immigration [2005] HCA 77 SZEJF v Minister for Immigration [2006] FCA 724 SZGUR v Minister for Immigration [2010] FCA 171 Minister for Immigration v SZNPG (2010) 115 ALD 303 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 |
| Applicant: | WUYUE WENG |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | ADMINISTRATIVE APPEALS TRIBUNAL |
| File Number: | SYG 469 of 2010 |
| Judgment of: | Raphael FM |
| Hearing date: | 30 August 2010 |
| Date of Last Submission: | 30 August 2010 |
| Delivered at: | Sydney |
| Delivered on: | 3 September 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr L Boccabella |
| Solicitors for the Applicant: | Lin Tang & Co Lawyers |
| Counsel for the Respondents: | Mr J Potts |
| Solicitors for the Respondents: | Clayton Utz |
ORDERS
Application dismissed.
Applicant to pay the First Respondent’s costs assessed in the sum of $5,800.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 469 of 2010
| WUYUE WENG |
Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| ADMINISTRATIVE APPEALS TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
On 18 October 2005 Mr Weng was granted a Business Skills visa.
On 4 June 2009 the Minister for Immigration & Citizenship cancelled that visa. The Minister’s delegate was not satisfied that Mr Weng had obtained a substantial ownership interest in a business in Australia or was utilising his skills in actively participating at a senior level in the day to day management of the business, or intended to continue to hold the substantial interest or utilise the skills; [CB 406-408]. Mr Weng applied for review of that decision from the Administrative Appeals Tribunal which held a hearing into the matter at which the applicant was represented by counsel. On 29 January 2010 the Tribunal affirmed the decision under review.
Mr Weng is a director of South East International Investment Pty Ltd (“SII”). He holds a 40% interest in the company and his wife and son each hold 30%. The company was formed for the purpose of undertaking property development in Canberra. It purchased real estate in the suburb of Bonython in December 2007. In November 2008 SII engaged Classic Constructions to build three houses on the Bonython block. At the time of the Tribunal decision, construction had been completed and two of the three houses were for sale. The third house was occupied by Mr Weng’s son. SII had previously purchased and then sold a residential property in Dickson.
At [29] [CB 807] the Tribunal noted:
“Mr Weng says he is looking to purchase other land for development, including sites with existing properties, once the Bonython properties are sold. He has nominated several properties in Canberra as possibilities. He describes the purchase of these as “still under negotiation”.”
And at [30] – [31] the Tribunal found:
“I accept that Mr Weng may be considering investing in further property and may need to wait until the sale of the Bonython properties before proceeding but mere repetition does not itself make an investment activity a business.
I accept Mr Weng’s contention that, by its nature, property development is slower to realise than some other types of business and may take longer to acquire the characteristic of repetition. I accept that profit is a motive in the purchase, development and sale of the Bonython properties. (I accept that actual profit is not necessary in order to find SII to be a business). However, profit alone is not sufficient to make SII’s activity a business; any private investment aims to make profit.”
The Tribunal continued:
“In my view, SII’s activities lack sufficient of the “badges of trade” that the courts have referred to as indicia of business activity. I am not satisfied that Mr Weng’s son and associates have done more than help out with general research into investment possibilities, even if they spent considerable time doing so.
Mr Weng acknowledges that he is a very successful business man in China. By contrast, his investments in Australia lack a sense of forward planning and activity consistent with business activity rather than private investment. He continues to cast about for investment opportunities. In all the circumstances, I find that Mr Weng is a private person looking for investment opportunities through SII. I am not satisfied that SII is engaged in a business.” [32] – [33]
At [34] [CB 308] the Tribunal noted that, even if it was wrong and SII was engaged in business, s.134 of the Migration Act 1958 (Cth) (the “Act”) required that the business must be an “eligible business”. Section 134 is the section under which the cancellation of Mr Weng’s visa was processed. There is set out below the relevant clauses:
“(1) Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment‑linked visa or a family member's visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a) has not obtained a substantial ownership interest in an eligible business in Australia; or
(b) is not utilising his or her skills in actively participating at a senior level in the day‑to‑day management of that business; or
(c) does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii) utilise his or her skills in actively participating at a senior level in the day‑to‑day management of; an eligible business in Australia.
(2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:
(a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and
(b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day‑to‑day management of that business; and
(c) intends to continue to make such genuine efforts.
(3) Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:
(a) business proposals that the person has developed;
(b) the existence of partners or joint venturers for the business proposals;
(c) research that the person has undertaken into the conduct of an eligible business in Australia;
(d) the period or periods during which the person has been present in Australia;
(e) the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;
(f) the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;
(g) business activity that is, or has been, undertaken by the person;
(h) whether the person has failed to comply with a notice under section 137;
(i) if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day‑to‑day management of a business:
(i) the length of time that the person held the ownership interest or participated in the management (as the case requires); and
(ii) the reasons why the person no longer holds the interest or participates in the management (as the case requires).”
“Eligible business” is defined at subsection 10 as:
“… a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a) the development of business links with the international market;
(b) the creation or maintenance of employment in Australia;
(c) the export of Australian goods or services;
(d) the production of goods or the provision of services that would otherwise be imported into Australia;
(e) the introduction of new or improved technology to Australia;
(f) an increase in commercial activity and competitiveness within sectors of the Australian economy.”
In coming to its conclusions, the Tribunal considered the matters raised in the subsection set out above and also its residual discretion identified in Kim v Minister for Immigration [2004] FCA 31 per Kiefel J at [19] and [20]. In regard to its decision as to whether the business was an eligible business, the Tribunal noted that Mr Weng had contended that the business activities of a property development company in identifying viable land and employing various skilled trades people necessary to make it attractive to a particular market meant that it met the criteria in s.134(1)(b) and (f). It accepted that there were cases in which development of investment properties was found to create and maintain employment as well as increasing commercial activity in Australia; Russo v Minister for Immigration [2007] AATA 2054 (“Russo”) but the Tribunal distinguished Russo saying at [37] and [38] [CB 809]:
“In my view, Russo can be distinguished from the present case. In that case, the company was engaged in property development on a different scale and had engaged contractors and subcontractors to carry out feasibility studies, due diligence, zoning and planning approvals and was negotiating with a range of suppliers. There was clear evidence of business activity.
By contrast, SII has employed only one person whose role is not at all clear. Mr Weng says he has not paid salaries to his son or two associates involved in the company because it has not yet made a profit but I do not accept this explanation. What they have done by way of “research” has been ad hoc and has none of the characteristics of employment in any real sense. SII may have engaged various services in developing the properties but that is the case with any property development including private property development.”
The Tribunal considered that the activity engaged in by SII was similar to that found in Tan & Anor v Minister for Immigration [2004] AATA 808 where the Tribunal rejected the activity as constituting an eligible business. This Tribunal was not satisfied that SII was carrying on an eligible business within the meaning of the Act.
The Tribunal considered the genuine efforts criteria found in s.134(2) and the factors that should be taken into account under s.134(3). The Tribunal concluded that the applicant did not meet the criteria having considered the factors, most of which related to other businesses that Mr Weng was considering. Finally, the Tribunal considered the residual discretion which it noted should be exercised within the context of the legislation in which it was given, saying at [61] to [63] [CB 813-814]:
“The discretion is designed to give the decision-maker flexibility to deal with unanticipated circumstances: Pan and MIAC [2007] AATA 1724 [24]. Factors that might by taken into account include where the applicant needs more time to complete genuine efforts: Koosasi v Minister for Immigration & Citizenship [2007] AATA 1311. It is always possible that circumstances may arise beyond the applicant’s control or which could not reasonably have been anticipated.
Mr Weng contends that the unanticipated circumstances in his case were that his research led him to abandon his original idea for an electrical retail store, following which further research was necessary, leading to a delay in the establishment of his business.
For the reasons I have already given, I do not accept that Mr Weng has made genuine efforts to establish a business here. The fact that he has still not established a business is because he continues to look for investment opportunities and that may take some time. I do not accept there has been unexpected delay or that there is any other reason that the discretion should be exercised in Mr Weng’s favour.”
Mr Weng seeks review of the AAT decision. He submitted that the Tribunal had failed to properly interpret s.134 of the Act, arguing that upon the facts as found the Tribunal was obliged to have concluded that the applicant had obtained a substantial ownership interest in a business in Australia and that, therefore, there was no jurisdiction to cancel the visa. Alternatively, it argued that on the facts as found the Tribunal was bound to have concluded that the applicant had made a genuine effort to obtain a substantial interest in an eligible business in Australia and, by failing to do so, fell into jurisdictional error. Mr Weng argued that the Tribunal had wrongly fettered its residual discretion not to cancel his visa by limiting its consideration to issues largely not relevant to himself. It also failed to take into account the relevant circumstances of his investment in Australia and failed to give a proper, genuine and realistic consideration to the matters before it on the review which, he argued, constituted jurisdictional error.
The business issue
The extracted sections of the Tribunal’s decision [29] – [33] constitute the Tribunal’s findings. It had also found that SII had purchased the Bonython properties and invested a total of $2.1 million comprising some $1.3 million capital investment in SII and $978,500.00 paid to Classic Constructions to build homes on land purchased by SII. The Tribunal had in its decision record made reference to the views expressed by Mason J in Hope v Bathurst City Council (1981) 44 CLR 1, that a business denotes:
“Activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis.”
The Tribunal also made reference to the Full Bench decision, Hill, Carr JJ, French J agreeing, Puzey v Commissioner of Taxation (2003) 131 FCR 244 where the majority followed the views of Mason J in Hope (supra) at [8] and [9] before noting that not too much attention should be given to the concept of repetition stating that “business” does not mean being “busy”. Their Honours then went on to say:
“In deciding whether or not a business is carried on, courts have pointed to what have been called in the United Kingdom the "badges of trade", indicia which, while no one of them will be determinative of whether a business is carried on, collectively will demonstrate a business. These include the profit motive (although a non-profit company may still carry on a business), acting in a business-like way (although many businesses may be found which operate in a non business-like way), the keeping of books of account and records (although the fact that there are none will not necessitate the conclusion that a business is not carried on), and repetition (although a fixed term project may still be a business).”
It was these badges of trade that the Tribunal thought were lacking in the undertaking by SII and which led it to the conclusion that what it was doing did not constitute a business.
Mr Weng accepts that it is not for this Court to substitute its views of what constitutes a business for those of the Tribunal. But he says that the Tribunal could logically have only reached one conclusion from the established facts, that what SII did was a business. He argues that it is inevitable that business visa cancellation regimes will be dealing with businesses that are still in the process of development and asks the Court to note the observations of the High Court in Re Australian Industrial Relations Commission; Ex Parte Australian Transport Officers Federation (1991) 171 CLR 216 where Mason CJ, Gaudron and McHugh JJ observed at 226:
“Of all words, the word "business" is notorious for taking its colour and its content from its surroundings…”
Mr Weng pointed to the wideness with which the term has been construed referring to the views expressed by Black CJ at [261] in Australian Health Insurance Association Ltd v Esso Australia Ltd (1993) 116 ALR 253:
“In this context the notion of carrying on business should not receive a narrow interpretation, for a wide range of activities could run counter to the policy of the Act. For that purpose it would not matter greatly, and perhaps not at all, whether the business activity in question was conducted as part of some larger business or whether or not it was conducted for a profit.”
Mr Weng also brought to the Court’s attention the views expressed by the Privy Council in American Leaf Blending v Director of Inland Revenue [1978] 3 All ER 1185 at 1189 where their Honours advised that:
“The carrying on of “business” no doubt usually calls for some activity on the part of whoever carries it on, though, depending on the nature of the business, the activity may be intermittent with long intervals of quiescence in between.”
Finally, in Ferguson v Federal Commissioner of Taxation (1979) 37 FLR 310 the Full Federal Court considered that the activity of leasing five charolais cows and entering into an agreement with a management company to agist, breed from and otherwise care and manage those cows constituted a business, notwithstanding that the tax payer was a serving officer in the Royal Australian Navy.
“The question is what is the proper conclusion, having regard to what he did. In our opinion, the proper conclusion is that his activities in advance of carrying out his ultimate intention were such as to constitute a business. We believe the learned trial judge was wrong in his conclusion.”
It was quite open to the members of the Full Bench to come to the conclusion which they did. They were hearing an appeal, not reviewing an administrative decision. They were entitled to substitute their view as to what was a business for that expressed by the primary judge. I am not permitted to do that. And this is really the point. Mr Weng can only succeed if the Tribunal was bound from the evidence to come to the finding that SII was undertaking a business, and thus misinterpreted s.134. He cannot succeed if it can be said that the Tribunal properly understood the meaning that it had attributed to the word and that its construction of the word in the context of s.134(1) was not demonstrated to have been erroneous by any of the authorities referred to by the applicant. When the applicant refers to facts found, he avoids a discussion of those matters referred to by the Tribunal at [33]. He concentrates on the money spent. He notes that repetition is not essential and argues that SII could not be expected to be going into other developments at this stage. But he does not concede that repetition is something which the Tribunal could take into account. Likewise, the Tribunal is entitled to assess the nature of the further work being carried out by the company. What the applicant wishes the Court to ignore is the Tribunal’s duty to assess the evidence given which, in my view it has done, before coming to its conclusion. Whilst the conclusion may be one with which another Tribunal may have differed, this is not sufficient to establish a jurisdictional error.
Eligible business issue
The applicant’s argument against the Tribunal in this issue is that, once the Tribunal had come to the conclusion that SII was conducting a business, it must be an eligible business because of the amount of money invested. The amount of money invested ensured that (b) or (f) of the definition were satisfied. What the Tribunal did was to consider one Tribunal decision in which that had occurred and compare it with another in which it had not. In fact, Russo is not the only case in which property development has been considered an eligible business. It was in Tio v Minister for Immigration [2004] AATA 1268. In Russo reference is made to Lala v Minister for Immigration [2003] AATA 209 and Hindrodjojo v Minister for Immigration [2004] AATA 724, both of which made that finding. But there is also reference to a number of cases where property development companies were not considered to be eligible businesses; Lio v Minister for Immigration [2006] AATA 189; Tan v Minister for Immigration [2004] AATA 808; Ng v Minister for Immigration [2003] AATA 299. What the Tribunal did in the instant case was to assess the business against the criteria, consider submissions made by the applicant that it was eligible and conclude from its own researches and its own view of the evidence that it was not. That seems to me to be the Tribunal’s task “par excellence”. I cannot see how, in acting as it did, it fell into jurisdictional error because I cannot see that the facts found by this Tribunal require the finding that it was an eligible business.
The genuine efforts issue
As has been pointed out, most of the Tribunal’s conclusions relating to this issue referred to genuine efforts in respect of businesses other than that of property development. This is understandable because the Tribunal came to the view that the SII was not a business or an eligible business. The Tribunal was therefore looking at efforts that Mr Weng had made in relation to businesses that could be construed as such. My understanding of the applicant’s argument with regard to genuine efforts related solely to SII and, therefore, it stood or fell upon whether or not SII was an eligible business. I have found that there was no jurisdictional error in the Tribunal’s findings on these matters and, therefore, SII did not fall to be considered under genuine efforts.
The residual discretion issue
The applicant argues that the Tribunal fettered its discretion by limiting it to unanticipated circumstances. The respondent argues that it did not do this, the Tribunal accepted that the discretion was broad and had to be exercised in the context of the legislation. The Tribunal noted that the discretion was there to give the Tribunal flexibility. The Court has not been provided with a transcript of the hearing before the Tribunal. Thus the Tribunal decision record is the best record of what occurred before it. However broad the Tribunal’s discretion might be, it cannot make its decisions in a vacuum. It must be provided with some grounds upon which it should exercise the discretion. The applicant was represented by experienced counsel. It is unlikely that he raised a matter that the Tribunal did not take into consideration and, if he did not raise a matter, then one wonders why the Tribunal was obliged to opine upon it. There is no evidence that the Tribunal indicated that it intended to confine its consideration of this subject to unanticipated consequences. The applicant argues that the Tribunal should not have taken into account his lack of genuine efforts to establish a business in Australia. He says that this comes into play before the Tribunal is obliged to exercise its discretion. The Tribunal makes that finding and then decides whether there is anything available to alleviate the finding’s consequences. I do not believe that the paragraph can be read as restrictively as this. I think the Tribunal was considering the possibility of an unexpected delay and concluded that that could not have occurred because the delay was an actual consequence of not making a real effort. In other words, the Tribunal did not decline to exercise its discretion because of a lack of genuineness of the efforts but because it could not find a discretionary element such as unexpected delay upon the facts. The Tribunal also makes reference to “any other reason”. Finally, in regard to this issue, the applicant argues that the Tribunal did not take into account the amount invested as one of the other reasons for exercising its discretion. I do not see how the applicant can say that. There is simply no evidence one way or the other. I do not believe that this issue indicates that the Tribunal fell into jurisdictional error.
The proper, genuine and realistic issue
The applicant argues that the Tribunal did not give proper, genuine and realistic consideration to his case in regard to his submissions concerning genuine effort or in the exercise by the Tribunal of its residual discretion. The respondent does not accept that this formulation is a matter which discloses jurisdictional error. The applicant relies on what fell from Gleeson CJ in NAIS v Minister for Immigration [2005] HCA 77 and the views expressed by Rares J in SZEJF v Minister for Immigration [2006] FCA 724 and his Honour’s iteration of those views in SZGUR v Minister for Immigration [2010] FCA 171 at [36]. But that case is on appeal to the High Court of Australia. Whilst it cannot be gainsaid that the Tribunal is required to give proper, genuine and realistic consideration to the matters that come before it, this seems to me to be implicit in the requirements of s.425 of the Act. As much was suggested by Katzmann J in Minister for Immigration v SZNPG (2010) 115 ALD 303. The respondent argues that the proper test is whether there was a failure to conduct the review required by the Act so that the applicant did not receive the hearing that he was entitled to as a matter of law. The Tribunal’s obligations are to consider evidence, make findings of fact and come to available conclusions upon them. In my view this was done in the instant case. The fact that another Tribunal may have come to different views about any of the matters argued by Mr Weng before this Tribunal is of no consequence in considering the right to a constitutional writ. I take the same view with regard to the applicant’s arguments concerning Wednesbury unreasonableness. The High Court has made it plain that this is a very rare beast indeed, where a Tribunal makes a decision that is so unreasonable that no reasonable Tribunal could have come to it; see Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at 627 per Gleeson CJ and McHugh J. This decision does not fall within that category.
It follows from the above that the application must be dismissed and that the applicant must pay the respondent’s costs which I assess in the sum of $5,800.00.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 3 September 2010
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