Wu v Minister for Immigration, Citizenship and Multicultural Affairs
[2024] FedCFamC2G 236
•14 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Wu v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 236
File number(s): SYG1937 of 2022 Judgment of: JUDGE GIVEN Date of judgment: 14 March 2024 Catchwords: MIGRATION – Whether delegate incorrectly interpreted and applied Regulation 1.11A(2) in not accepting the applicant had evidenced beneficial ownership of an asset because supporting documentation not stamped or registered by an appropriate authority in China – where applicant proffered legal opinion from lawyer to the effect that there was neither a legal requirement nor an appropriate authority to stamp or register said documents in China Legislation: Migration Act 1958 (Cth) ss 38, 134, 467, 476
Migration Regulations 1994 (Cth) reg 1.11A, cls 188.113 188.225 of Schedule 2
Cases cited: Khant v Minister for Immigration and Citizenship (2009) 112 ALD 241
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Citizenship v SZMOK and Others (2009) 257 ALR 427
Minister for Immigration and Multicultural Affairs vEshetu (1999) 197 CLR 611
Yu v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 140 FCR 126
Division: General Federal Law Number of paragraphs: 43 Date of hearing: 18 October 2023 Place: Sydney Solicitor for the Applicants: Mr B Lee, Legal Wisdom Professionals Group Solicitor for the Respondent: Ms G Gutmann, Minter Ellison ORDERS
SYG1937 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: WANYU WU
First Applicant
DONGCHEN HAN
Second Applicant
AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS
Respondent
ORDER MADE BY:
JUDGE GIVEN
DATE OF ORDER:
14 MARCH 2024
THE COURT ORDERS THAT:
1.The application filed on 20 December 2022 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE GIVEN:
Before the Court is an application for judicial review of a decision of a delegate of the Minister for Immigration, Citizenship and Multicultural Affairs (Minister), made on 17 November 2022, to refuse the grant of a Business Skills (Provisional) (Class EB) Business Innovation and Investment (subclass 188) visa (visa) by reason of the applicant failing to satisfy cl 188.225(1)(a) of Schedule 2 of the Migration Regulations 1994 (Cth) (Regulations).
While the decision the subject of the review application is a decision of a delegate, there is no dispute between the parties that this Court has jurisdiction to hear and determine it, because the applicants are offshore. The significance of that fact is that the decision of the delegate is not reviewable by the Administrative Appeals Tribunal (Tribunal) under Part 5 of the Migration Act 1958 (Cth) (Act) by reason of the applicants being outside of the migration zone at all material times: see ss 338 and 476(4) of the Act. Accordingly, the delegate’s decision is a migration decision for the purposes of s 476(1) of the Act, and not a primary decision under
s 467(2)(a) of the Act.BACKGROUND
The following background and summary of the delegate’s decision is derived from the submissions of the parties and, unless otherwise indicated, does not appear to be in dispute.
The applicants are each citizens of China (Court Book (CB) 29 to 30 and 32). On 20 January 2020, the first applicant applied for the visa and included the second applicant (who is a child, and her dependent) in the application (CB 46 to 47). To be granted the visa, the applicant needed to satisfy cl 188.225 of the Regulations, namely, by demonstrating that she had an ownership interest in one or more established main businesses with an annual turnover of at least $500,000.00 AUD, in at least two of the four fiscal years immediately preceding the time of invitation to apply for the visa.
The applicant sought to evidence that ownership interest by her claimed beneficial ownership of an asset. In that regard, she provided evidence of her father's company, Guangzhou Zhanyu Trading Co. Ltd (Company), to which she claimed to be the beneficial owner of her father's shares, relying on a Shareholding Entrustment Agreement (SEA) together with amendments thereto, signed on each of 11 May 2015 (CB 67 to 71), 13 January 2016 (CB 72 to 74) and 9 July 2019 (CB 75 to 77) (Amendments).
On 18 August 2022, the delegate wrote to the applicant inviting comment on information relating to the visa application. The delegate put to the applicant that:
[b]ased on the information provided and publicly available information, I am unable to make a finding that you had an ownership interest in one or more established main businesses that had an annual turnover of at least AUD 500 000 for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa'
and invited response (CB 995 to 999) (invitation).
On 14 September 2022, the applicant provided a response to the invitation, which included a submission from her representative and a letter from a lawyer registered to practice in China dated 13 September 2022 (lawyer’s letter) (CB 1004 to 1006) which said:
3. There is no legal requirement under the current Chinese law to stamp or register those SEAs or similar in mainland China.
4. There is no appropriate authority under the Chinese law to stamp or register those SEAs or similar in mainland China.
On 17 November 2022, a delegate refused to grant the visa on the basis that the applicant did not satisfy cl 188.225 in Schedule 2 of the Regulations. The delegate was not satisfied that the applicant had an ownership interest in one or more established main businesses that had an annual turnover of at least $500,000.00 AUD for at least 2 of the 4 fiscal years immediately before the time of the invitation to apply for the visa (CB 1010 to 1014).
LEGISLATION
Clause 188.225 of Schedule 2 to the Regulations provides:
(1) For at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, the applicant had an ownership interest in one or more established main businesses that had an annual turnover, in each of those years, of:
(a) if the time of invitation was before 1 July 2021—at least AUD500,000; or
(b) if the time of invitation was on or after 1 July 2021—at least AUD750,000.
(2) If the applicant was engaged in one or more businesses providing professional, technical or trade services for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, the applicant was directly engaged in the provision of the services, as distinct from the general direction of the operation of the business, for no more than half the time spent by the applicant from day to day in the conduct of the business.
Clause 188.113, note 3 of Schedule 2 to the Regulations provided that at the relevant time[1]:
In this Part, a loan to a business is an eligible investment if a person makes it for the purpose of producing a return in the form of income or capital gain.
…
Note 3: For the beneficial ownership of an asset, eligible investment or ownership interest, see regulation 1.11A
[1] Compilation 251, current as at 20 December 2023.
Regulation 1.11A(2) of Schedule 2 to the Regulations provides:
To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:
(a) a trust instrument, or
(b) a contract, or
(c) any other document capable of being used to enforce the rights of the applicant or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest,
stamp or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.
Section 134 of the Act defines ownership interest, as an interest in the business as being:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c)the sole proprietor of the business including such interest held indirectly through one or more interposed companies, partnerships or trusts.
APPLICATION TO THIS COURT
By an application to show cause filed with the Court on 20 December 2022, the applicants seek review of the delegate’s decision. The application is written in a style which can most accurately be described as a written submission. From those submissions, the applicants can be taken as raising two grounds of review with lengthy particulars.
On 28 March 2023, a Registrar of the Court made Orders for the preparation of the matter for hearing. On 19 July 2023, the proceedings were docketed to me and I made Orders which included a grant of leave to the applicants to file and serve any amended application on or by 6 September 2023. That grant of leave was not taken up. The parties filed written submissions as ordered. At hearing the two volume Court Book was tendered for the respondent and collectively marked Exhibit “1R”.
Grounds of application
The headings within the originating application can be taken to raise grounds of review (omitting particulars which are in the form of submissions) as follows:
(a)Ground 1: “Incorrectly interpreting or applying the law, and (2) reaching a decision that is unreasonable in the legal sense”; and
(b)Ground 2: “Identifying a wrong issue”.
The respondent submits that:
(a)ground one, particulars 7 to 11 and 14; and
(b)ground two, particulars 15 to 18 and 21;
are merely a repetition of the background to the matter and make bare assertions that the delegate's decision is affected by jurisdictional error. As such, the respondent contends that the particulars fail to articulate proper grounds of judicial review. I agree.
The essence of the applicants’ allegation is instead to be found in:
(a)ground one, particulars 12 and 13; and
(b)ground two, particulars 19 and 20;
by each of which the applicants allege that the delegate incorrectly interpreted and applied reg 1.11A(2) of the Regulations and that the delegate's decision was legally unreasonable.
Ground 1
Particular 12
By this ground the applicants say that the intention of reg 1.11A(2) is to require them to establish the existence of real beneficial ownership of an asset, eligible investment or ownership interest, and that an appropriate construction of that Regulation requires the first applicant to show legally acceptable and accepted documentation to prove this state of affairs in the relevant jurisdiction. The applicants further contend that reg 1.11A(2) requires the first applicant to show that there is a contract under which she can claim beneficial ownership over an asset, eligible investment or ownership interest in China, and that said contract was stamped or registered by an appropriate authority under the law of China, if Chinese law allows.
The applicants allege that the delegate incorrectly interpreted and applied reg 1.11A(2) by failing to consider the exception that the documents did not need to be stamped or registered because there is no an appropriate authority to stamp or register those documents in China. The applicants further contend that the delegate’s decision was unreasonable in the legal sense and created practical injustice because the delegate insisted that the SEA (and subsequent Amendments) must be registered in China, while failing to consider that Chinese law does not require the SEA and Amendments to be stamped or registered.
According to the applicants (relying on the lawyer’s letter), because there is no appropriate authority under Chinese law to stamp or register the SEA and Amendments, the second part of reg 1.11A(2) can never be satisfied in the applicants’ case.
In the course of submissions, the respective parties each sought to rely on (competing interpretations of) the decision in Yu v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 140 FCR 126 (Yu) per Kiefel J, in which a similar argument to that presently advanced by the applicants, was raised.
The difficulty for the applicants is that the Yu decision, by which this Court is bound, is quite clear in its meaning and effect. Relevantly, the Court found the following at [34] to [38]:
[34] The applicants’ argument is to the effect that beneficial ownership as comprehended by reg 1.11A, or indeed the regulation itself, is not relevant where legal ownership is proved according to foreign law. Such an approach would cut across the very objects of the regulation and must, in my view, be rejected.
[35] Regulation 1.11A has the effect of excluding from an applicant’s assets claims to ownership which cannot be substantially proven by reference to authenticated documents. Claims to beneficial ownership are easily made. There may often be little or no documentation of the contract or other arrangement which is said to create the ownership interest, leaving the decision-maker to determine the veracity of a claim based upon an oral arrangement with no objective evidence to assist that determination. And when documentation is provided it may be difficult to assess its authenticity. In the context of migration and visa applications there are added difficulties for the decision-maker in verifying documents put forward, since they may be in a foreign language or reflect aspects of a foreign legal system. It is these difficulties which the regulation addresses.
[36] The circumstances pertaining to the applicants’ ownership of the shares are the very circumstances to which the regulation is addressed. The applicants’ contention must be that there should be an exemption to reg 1.11A(2) where it is proved that applicants are the legal owners of an asset under foreign law even though they have no legal title. The purpose and operation of the regulation does not admit of such an exception. If the contention were correct a decision-maker would be required to undertake tasks which the regulation sought to obviate.
[37] Although strictly unnecessary, I add that the applicants’ evidence concerning the operation of Chinese law did not go so far as to establish the applicants’ legal ownership of the shares, in any event. Nowhere was it said that Chinese law regarded the applicants as holding legal title. The evidence was merely that no formal registration or approval was required. The agreement between the visa applicant and his cousin would be regarded as effective and, one may infer, enforceable. That is not sufficient to establish legal ownership. As far as the evidence went it suggests that the concept of a beneficial ownership is recognised and enforced by Chinese law.
[38] The Tribunal was correct in finding the opinions as to Chinese law irrelevant, given the operation of reg 1.11A. It correctly applied the requirements of that regulation. No error is shown in the approach it took.
In the instant case, the delegate found that because the SEA was not stamped or registered by an appropriate authority under the law of jurisdiction where the asset, eligible investment or ownership interest is located, it did not meet the requirements of reg 1.11A(2) of the Regulations (CB 1012).
The applicants say that their case can be distinguished from Yu, on the basis that not only was there no requirement under Chinese law that the SEAs and Amendments be stamped, but further that there was no relevant authority in mainland China who could stamp them, nor with whom they could be registered. In support of this, the applicants rely on Yu at [47] per Kiefel J where it is recorded in that case (emphasis added) that:
The applicant’s submission concerning the lack of registration and facilities in other countries was without factual foundation. The evidence as to Chinese law did not include any statement that stamping or registration could not be obtained.
The respondent says that provision of an opinion as to Chinese law, in the form of the lawyer’s letter about the absence of an appropriate stamping authority, does not resolve the issue and highlights that in Yu, the purpose of reg 1.11A was specifically found to be a measure to address the difficulties that arise in authenticating beneficial ownership and to exclude from an applicant’s assets claims to ownership which could not be substantially proven by reference to authenticated documents.
The Minister contextualises the aforementioned passage extracted by the applicants from Yu with further parts of [47], in which the Court found that simply because the regulation could not be met it:
…does not follow that the regulation is not proportionate to the regulation making-power which is the specification of criteria for particular classes of visa. This is so whether one views it as an evidentiary provision, facilitating that objective, or as further qualifying the ownership interests will be recognised.
I agree with the respondent’s submission that it was open to the delegate to find that, because the SEA and Amendments were not authenticated, it did not satisfy reg 1.11A(2). This aspect of ground 1 is not made out as giving rise to error. Further, I agree with the respondent that ground 1 cannot be made out, because the delegate correctly applied reg 1.11A(2) of the Regulations, and that no exemptions apply to the applicant.
Particular 13
By this particular to ground 1 the applicants allege the delegate's decision was unreasonable by reason of it having allegedly failed to consider the operation of Chinese law and that by reason thereof (said to be proven by the lawyer’s letter), that reg 1.11A(2) of the Regulations could never be satisfied.
The respondent contends that it was open to the delegate to find that the evidence did not satisfy the definition of legal ownership which was the criterion to be met: see Yu at [37] (extracted above at [23]) and at [47] (extracted above at [25] and [27]).
In the present case, the fact that the Regulation could not be met does not mean that the Regulation was not proportionate to the regulation-making power, being the specification of criteria for particular classes of visas.
I am satisfied that there is no error in the delegate’s finding that the opinion in the lawyer’s letter, even if it be taken as “evidence” as to the operation of Chinese law, was not relevant, by reference to the operation of reg 1.11A of the Regulations. Further, the delegate correctly applied the requirements of the Regulation to the information before it. For these reasons, the second aspect of the allegation in ground 1 is not established.
Ground 2
By ground 2, particulars 19 and 20, the applicant alleges that it was unreasonable for the delegate to challenge the legality and enforceability of the SEA and Amendments.
Particular 19
By “particular” 19 to ground two the applicants further allege unreasonableness on the part of the delegate, said to be constituted by the delegate allegedly seeking to “challenge the legality and enforceability of [the] SEA, and the Amendments”.
I disagree that there was no reasonable basis for the delegate’s findings in this regard. In particular, and again by reference to Yu at [48] where the Court found:
The regulation is not invalid for lack of proportionality. The regulation denies the effect of oral agreements or unreliable documentation. It does so for the reasons discussed above. It could not be suggested that it was unreasonable in doing so, nor that it goes beyond the purpose of specifying the conditions which must be met for a visa to be granted.
I accept the respondent’s submissions that the delegate was only required to determine whether the SEA met the requirements in reg 1.11A of the Regulations, and was not required to undertake a further analysis of the legality and enforceability of the SEA. The conclusion by the delegate that where a document did not meet the requirements of reg 1.11A of the Regulations, it could not be satisfied as to the applicant's beneficial ownership, and subsequently, could not satisfy itself that the applicant had an ownership interest in the Company, was open to it. I am not satisfied that it was an unreasonable conclusion nor that it gives rise to any other species of error.
Accordingly, this aspect of ground 2 is not made out.
Particular 20
By the final aspect of ground 2, the applicants allege that the delegate failed to exercise its jurisdiction pursuant to sub-s 65(1) of the Act, by failing to ask the right questions and to request the right documents.
The respondent says that where an applicant complains a decision-maker has breached sections of the Act by failing to act in a way that is just and fair, such provisions are not a source of rights for an applicant, but comprise only ‘facultative’ or ‘exhortative’ provisions, citing Khant v Minister for Immigration and Citizenship (2009) 112 ALD 241 at [31] per Cowdroy, which cites Minister for Immigration and Multicultural Affairs vEshetu (1999) 197 CLR 611 at [49] per Gleeson CJ and McHugh J, [77] per Gaudron and Kirby JJ, [108] to [109] per Gummow J, [158] per Hayne J and [179] per Callinan J and Minister for Immigration and Citizenship v SZMOK and Others (2009) 257 ALR 427 at [13] to [18] per Emmett, Kenny and Jacobson JJ for the aforementioned propositions (respectively).
The respondent further says that to the extent this aspect of ground 2 can be interpreted as a complaint that the applicants were not afforded procedural fairness, by contrast the delegate invited them to comment on information relevant to the criteria for which the visa was refused, and for which the first applicant provided a response on 15 September 2022 (CB 1000 to 1001). The respondent says that the weight given to that response was a matter for the delegate: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41 per Mason J (as his Honour then was).
The submissions made for the applicants in support of this ground were scant.
I am not satisfied that there is any basis to conclude that the delegate failed to exercise, or acted in excess of, its jurisdiction in reaching the decision that it did. To the extent that there is an allegation made by the applicants’ written submissions that the delegate failed “to avoid practical injustice” this is equally opaque. Overall, the second part of ground 2 tends to suggest that, while being cast as being an allegation that the delegate failed to make relevant inquiries or request the “right documents”,[2] it is (in essence) an expression of dissatisfaction with the conclusions reached. Error has not been established.
[2] Applicants’ written submissions filed 10 October 2023 at [25]
CONCLUSION
The applicants have failed to establish any error on the part of the delegate. The application must be dismissed. I will so order.
I will hear the parties as to costs.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 14 March 2024
1
6
2