Xu v Minister for Immigration

[2007] FMCA 285

FEDERAL MAGISTRATES COURT OF AUSTRALIA

XU v MINISTER FOR IMMIGRATION & ANOR [2007] FMCA 285

MIGRATION – MRT decision – breach of “no work” condition on bridging visa – whether activity performed that “normally attracts remuneration” – applicant involved in management decisions in a massage business – failure to consider the applicant’s particular situation, including his proprietary interest in the business – matter remitted.

Migration Act 1958 (Cth), ss.116(1), 474(1), 476, 476(1)

Migration Regulations 1994 (Cth), reg.1.03, Sch.8 condition 8101

Carter v Repatriation Commission (2001) 113 FCR 314
Chalmers v The Commonwealth of Australia (1946) 73 CLR 19
Craig v South Australia (1995) 184 CLR 163
Dib v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 489
Lobo v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 132 FCR 93
Minister for Immigration & Multicultural Affairs v Sharma (1999) 90 FCR 513
Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323
Minister for Immigration & Multicultural & Indigenous Affairs v Ahmed [2005] FCAFC 58
Minister for Immigration & Multicultural & Indigenous Affairs v SGLB (2004) 207 ALR 12
Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476
Tikoisuva v Minister for Immigration & Multicultural Affairs [2001] FCA 1347
White v Repatriation Commission (2001) 114 FCR 494

Applicant: SHU GUANG XU

First Respondent: MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent: MIGRATION REVIEW TRIBUNAL

File Number: SYG2106 of 2006

Judgment of: Smith FM

Hearing date:	8 November 2006
Date of Last Submission:	30 January 2007

Delivered at: Sydney

Delivered on: 26 March 2007

REPRESENTATION

Counsel for the Applicant: Mr R Killalea

Solicitors for the Applicant: Chancellor Rados

Counsel for the First Respondent: Mr A McInerney

Solicitors for the Respondents: DLA Phillips Fox

ORDERS

1. A writ of certiorari issue directed to the second respondent, quashing the decision of the second respondent dated 13 June 2006 and handed down on 5 July 2006 in matter N05/04413. 

2. A writ of mandamus issue directed to the second respondent, requiring the second respondent to determine according to law the application for review of the decision of the delegate of the first respondent dated 5 August 2005.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG2106 of 2006

SHU GUANG XU

Applicant

And

MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

MIGRATION REVIEW TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

1. This is an application filed on 1 August 2006 under s.476(1) of the Migration Act 1958 (Cth) (“the Migration Act”), which seeks orders by way of judicial review of a decision of the Migration Review Tribunal (“the Tribunal”) dated 13 June 2006 and handed down on 5 July 2006. The Tribunal affirmed a decision of a delegate made on 5 August 2005 which cancelled a bridging visa E (Class WE) issued to the applicant on 9 June 2005 on the ground that he was in breach of a “no work” condition attaching to his visa.

2. This bridging visa was issued by reason of an appeal from an earlier decision to cancel an earlier bridging visa for breach of the same condition.  That earlier bridging visa, itself seems to have been of a similar character.  The history is set out in the Tribunal’s reasons, and I shall not narrate it here.  It well illustrates how the current scheme of bridging visas allows applicants indefinitely to protract their lawful residence in Australia, by obtaining an endless series of such visas for so long as they are challenging a decision – including as to a bridging visa – in proceedings in the Tribunal or in a court.  However, this background does not absolve the court from its duty to examine the legality of whatever decision is brought to it for judicial review.  The Minister did not raise any discretionary reasons for refusing relief if jurisdictional error affected the most recent decision. 

3. Although I attempted to bring the matter to a hearing with the expedition it deserved, delays have regrettably occurred.  The applicant did not appear at the first court date, and a second directions hearing was appointed for 12 September 2006.  I then appointed a final hearing for 8 November 2006, and gave directions for its preparation.  The applicant did not comply with those directions, but appeared at the hearing with legal representatives whom he had recently instructed.  His counsel filed an amended application which raised new issues, and which were not explained in any written submission.  I completed the hearing, but gave directions for a post‑hearing exchange of written submissions.  This became protracted when the timetable was not observed by the applicant’s representatives, and due to the Christmas vacation.  The first respondent’s written submissions were not filed until 30 January 2007.  No submission in reply was filed for the applicant within the time allowed.  

4. Under s.476(1) the Court has “the same original jurisdiction in relation to migration decisions as the High Court has under paragraph 75(v) of the Constitution”, but its powers are confined by s.474(1) if the Tribunal’s decision is a “privative clause decision”. It is such a decision unless I am satisfied that it was affected by jurisdictional error (see Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476). If jurisdictional error is found, the applicant is entitled to writs of certiorari and mandamus requiring the Tribunal to reconsider the matter according to law.

5. The issue to be determined by the Tribunal was whether, as at the date of the delegate’s decision on 5 August 2005, the applicant had failed to comply with a condition on the visa within the period since it was issued in June 2005 (c.f. Minister for Immigration & Multicultural Affairs v Sharma (1999) 90 FCR 513 at [61]–[63], and Minister for Immigration & Multicultural & Indigenous Affairs v Ahmed [2005] FCAFC 58 at [45]).

6. The power to cancel was conferred by s.116(1) of the Migration Act, which provided that “the Minister may cancel a visa if he or she is satisfied that … (b) its holder has not complied with a condition of the visa”.  In the present case, a discretion arose under this provision if non‑compliance was established, but I do not need to consider how the Tribunal exercised that discretion. 

7. It was common ground that the visa was subject to the condition then found in Sch.8 condition 8101 to the Migration Regulations 1994 (Cth):

   8101The holder must not engage in work in Australia. 

8. This was required to be understood by reference to a definition in reg.1.03:

   workmeans an activity that, in Australia, normally attracts remuneration. 

9. The concept of “remuneration” was undefined, but neither counsel argued that it should not be given the ordinary meaning of “that which remunerates; reward; pay”, where “remunerate” means “to pay, recompense, or reward for work, trouble, etc” (see Macquarie Dictionary Revised 3^rd Edn.).  In other statutory contexts, this has been held to encompass not only monetary reward for services rendered, but also the provision of goods or services as a quid pro quo for the giving of personal services (cf. Chalmers v The Commonwealth of Australia (1946) 73 CLR 19 at 37, White v Repatriation Commission (2001) 114 FCR 494 at [28], and Carter v Repatriation Commission (2001) 113 FCR 314 at [28]).

10. In the present case, the evidence before the Tribunal was that the applicant owned 30% of the shares in Avolanche Pty Ltd, trading as “Babylon Sauna and Spa” in premises in Haymarket in Sydney.  The remaining shares were owned by Kevin Yuen, who was the managing director and secretary of the company.  The applicant claimed to have invested $300,000 in the business, and to have lent it over $120,000 as operating loans.  A valuation in 2003 valued the business at $1,150,000, and in 2006 the applicant claimed that it was worth $1.5m and employed 25 full‑time and casual employees. 

11. The applicant was an expert in Chinese traditional medicine and massage, and had been in charge of training and supervising the staff of the business until 2004.  At that time, his presence in Australia became subject to a “no work” visa condition, and he claimed to have ceased work in the massage business and transferred his management duties in the company to Mr Yuen and its employees.  On the advice of the company’s accountant the applicant ceased to be paid any wages, but the company “commenced repaying $1,000 each week to Mr Xu in the form of repayment of debts to Mr Xu as a creditor of the company”.  For a period, the applicant lived on the premises and obtained meals from Mr Yuen’s restaurant upstairs, but this arrangement had ceased by the time of the present visa.  The present cancellation decision was made after immigration compliance officers found him on the premises enjoying a rest and sauna.  

12. The applicant presented evidence, including statutory declarations from witnesses to these facts.  The Tribunal also had a minute of an interview with the applicant and a compliance officer of the Department on 5 August 2005.  It recorded:

    QDo you own the Babylon “sauna, spa & health club”? 

    AYes, me and my partner. 

    QWhat share of the company do you own? 

    A30%. 

    QI spoke to you on Thursday morning you said “it’s my company in the day time I sleep in the night time I keep an eye on the business”, what exactly do you mean “keep an eye on the business”? 

    AWhat I mean during the day I sleep, at 7‑8 o’clock, I go there, my partner was helping me, he had some fish for me to eat, my partner ordered a meal for me to eat, after the meal I go to the casino, because I live very close, every evening I go to eat. 

    The problem with my work permit was with another (migration) agent, and I have consulted lawyers and other experts about my rights and I was told I have the right to veto, supervise and make decisions.  (at this point Mr Xu’s lawyer stated that Mr Xu said he was as a share holder he had those rights). 

    I asked the interpreter what did he say, the interpreter stated that’s what Mr Xu said. 

    QMr Xu, you said you “veto, supervising and making decisions” were you doing that on the Thursday morning? 

    AWhat I mean is I have these 3 rights (veto, supervising and making decisions), I do not mean that I was exercising these rights.  The company has been running for a while and the company is experienced in these things.  I have been treating the company as my home.  I have already gotten to the habit of having a cigarette, food, I go there to eat and drink, this is very convenient. 

    QHow do you support yourself in Australia? 

    AThe company pays (at this stage the interpreter stated in Mandarin pays or gives back means the same thing) me $1000 a week.  I gave the company $100000 and the company pays me back $1000 a week. 

    QDo you know how much money the business makes? 

    AI am not very clear, it’s an open business, if people come it will be very good, if people don’t come the business will not be very good. 

13. The applicant’s evidence to the Tribunal was summarised by it:  

    ·The review applicant had known since December 2004 that he did not have permission to work and was told again by the Department in June 2005 that he could not work.  He felt the Departmental officers who came on 4 August 2005 were not interested in discovering what he was actually doing at Babylon Spa.  He felt that one of the officers wanted to create problems because he had been in conflict with her previously. 

    ·The review applicant was told that he was making decision in relation to the company and that this was a breach of his visa conditions.  He stated that he had gone to Babylon Spa for a sauna and he understood this was acceptable.  He had checked that it was in order to have, for example, a sauna at his company.  He had visited the club perhaps five times in the period since the last visa cancellation and usually went in the evenings after 9pm.  

    ·The review applicant was not a director of the company but was still a shareholder and had a right to ‘see the business’. 

    ·He has discussed taxation issues with his partner but he was not involved in the administration of the company.  He was a technical expert in massage.  The money paid to the review applicant from the business is not wages or salary.  The review applicant discussed the matter with his partner and the accountant.  There were various options by which the review applicant could get money for living expenses; he could receive a ‘dividend’ as shareholder or the company could return money to him that he had loaned the company.  It was decided that the best option was for him to be paid from money that he had loaned the business (apart from other funds that he had invested for his shareholding). 

    ·He had lived in a room in the club but moved out within 10 days of the decision on 1 June 2005 to cancel his previous bridging visa.  He would not have gone to the club if it were not allowed. 

    ·If his visa were cancelled the review applicant would incur additional costs in relation to further appeals.  The original problem relating to his business visa had not yet been resolved.  

14. The Tribunal’s reasoning upon which it reached a finding that the applicant was in breach of condition 8101 was:  

    60.The evidence recorded as a result of the Department’s compliance visit on 4 August 2005 is that the review applicant stated that the business (Avolanche Pty Ltd trading as Babylon Sauna Spa and Health Club) was his and that he slept during the day and kept ‘an eye on the business’ at night.  He stated that he had consulted lawyers and understood that he had rights to ‘veto, supervise and make decisions’.  He confirmed at the interview during the visit that he had a 30% shareholding in the business.  The review applicant told the Tribunal that although he was aware of his rights as a shareho1der he knew he did not have permission to work and was only visiting the club for a sauna.  He understood from Departmental advice that this was in order.  He stated in written submissions that he was not exercising his rights as a shareholder. 

    61.The review applicant told the Tribunal that he had a right to ‘see the business’, and that in the period since the last bridging visa cancellation he had discussed taxation issues with his partner.  He also stated that he was not involved in the administration of the company. 

    62.The Tribunal does not accept the evidence that the review applicant only visited the Babylon Spa in the relevant period for the purposes of obtaining a massage.  The Tribunal also finds that the review applicant has on a number occasions stressed his rights as a shareholder in terms of vetoing decisions of the Board and clearing decisions of the business.  He was recorded to have told the Department that he kept an ‘eye on the business’ when he visited the business premises at night.  His own evidence to the Tribunal was that he had discussed taxation matters relating to the business with his partner.  The review applicant told the Tribunal that although he was aware of his rights as a shareholder he had not been exercising those rights in the relevant period.  The Tribunal gives this evidence little weight. 

    63.The Tribunal does not find it credible, in the context of the other evidence before it, that the review applicant was not involved in decision making in the business in the relevant period.  The Tribunal finds that the review applicant has strongly emphasised his rights as a shareholder, and has also strongly emphasised his instrumental role in building the business.  In this context and given his own evidence of having discussions with his partner on taxation matters, as well as the evidence to the Department of ‘keeping an eye on the business’ the Tribunal does not accept the review applicant remained a passive shareholder in the business in the relevant period.  The Tribunal finds that the review applicant was involved in management decisions and managerial oversight of the business in the relevant period. 

    64.The review applicant has given evidence that the $1000 per week he receives from the business is simply the repayment of a loan that he has previously given the business.  The Tribunal finds there is no clear evidence regarding a loan agreement or arrangements for the business to repay the loan to the review applicant.  It is possible that this was the arrangement that the review applicant reached with the business.  In any case, the Tribunal finds that the actual nature of the payment does not alone establish whether the review applicant was working.  As indicated in Kim v Witton, there is no requirement that a person receives remuneration for an activity, for that activity to be regarded as work.  The crucial test is whether it is an activity that in Australia would normally attract remuneration. 

    65.The Tribunal has found above that the review applicant was involved in making management decisions relating to the business in the relevant period.  The Tribunal finds that the review applicant was involved in maintaining managerial oversight of the business.  The Tribunal is not satisfied that the review applicant was a passive investor or shareholder.  The Tribunal finds that the review applicant was performing an activity in the period after the grant of a bridging visa on 9 June 2005 that in Australia would normally attract remuneration.  The Tribunal finds that the review applicant was working in the period after the grant of the bridging visa on 9 June 2005.  The bridging visa granted on 9 June 2005 had condition 8101 attached, among others.  The Tribunal finds that the review applicant worked in the period and that he did so in breach of condition 8101 of his bridging visa. 

    66.The Tribunal therefore finds that the review applicant has breached subsection 116(1)(b) of the Act and that grounds for the cancellation of the visa have been made out. 

15. I consider that the Tribunal’s reasoning is clear.  It rests upon a finding of fact at [63] that the applicant was not “a passive investor or shareholder” in the business, but was “involved in management decisions and managerial oversight of the business in the relevant period”. 

16. The Tribunal did not consider it necessary to make findings as to the exact nature of the “managerial decisions” and “oversight” the applicant was involved in, nor the nature of his “involvement”.  Nor, it seems, did it find that he actually received any payments in money, goods or services in consideration for these unspecified services.  The Tribunal conceded that “it is possible” that the applicant was receiving income from the business only by way of repayments of past loans, and appears to accept that such an arrangement should not be characterised as “remuneration”.  It did not consider it necessary to investigate, and make findings upon, the specific circumstances in which the applicant was involved in the business in an unremunerated capacity. 

17. The Tribunal properly instructed itself that the definition of “work” did not require findings that the applicant actually received “remuneration”, if the “activity” found by it was “an activity that in Australia would normally attract remuneration”.  It then made an unexplained finding that the applicant’s unspecified “involvement in managerial decisions” and “oversight” was “an activity … that in Australia would normally attract remuneration”. 

18. The issue for me to consider is whether this reasoning reveals jurisdictional error.  In my opinion, it does.  In particular, the Tribunal’s assumptions that it did not need to make findings explaining the nature of the applicant’s actual involvement in the management and oversight of a business in which he held such a significant investment, and that it did not need to consider the implications of the absence of remuneration for his involvement, show a significant misapprehension as to the legal effect of the definition of “work”. 

1. Critical to the correct application of the definition of “work” is the identification of the particular “activity” of the visa holder which is under consideration.  The decision‑maker must make an identification of this, before considering whether it is an activity which “normally attracts remuneration”.  Absurd and unintended results occur if the applicant’s activity is characterised without reference to its surrounding circumstances.  If particular actions in some circumstances “normally attract remuneration”, the same actions in other circumstances may not normally be remunerated.  In such situations, the surrounding circumstances in which the visa holder’s activity is undertaken or performed determine whether the activity performed by him or her is one which “normally attracts remuneration”.  In these cases, it is legally insufficient for the decision‑maker to limit the identification of the activity to a generalisation about the visa holder’s activity detached from its actual circumstances.  The failure to take into consideration circumstances relevant to identifying and characterising the applicant’s particular “activity” then reveals a misconception of the relevant legislation, and gives rise to jurisdictional error (c.f. Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82] citing Craig v South Australia (1995) 184 CLR 163 at 179).

2. This point is clearly illustrated in relation to activities which, in some circumstances, have an essentially domestic character and normally are not performed for remuneration; for example, domestic cleaning, caring for children or incapacitated persons, or building maintenance activities.  The definition of “work” cannot intend that performance of such an activity should in all cases lead to visa cancellation, merely because the activity is, in some circumstances, performed by persons who are normally remunerated for their services.  The definition must, therefore, be construed as meaning “an activity that normally attracts remuneration” to a person performing the activity in the same situation as the applicant.  Although the intent of the definition is to allow a finding that a visa holder is “working” even if there is no evidence that they are actually receiving remuneration, it does not intend that the visa holder is to be deemed to be performing an activity in different circumstances from those in which he or she is actually performing the activity. 

3. The characterisation of the “activity” of the visa holder therefore requires consideration of its actual surrounding circumstances, including the motivations and agreements which have resulted in the performance of the activity, and the personal and economic context in which the activity is performed, including whether there is evidence of any remuneration actually being received.  The definition allows the decision‑maker to find that the visa holder is “working” in breach of his or her visa notwithstanding that he or she is not found to have actually been remunerated, but only if “normally” a person in the same situation would receive a return or reward for their services by way of “remuneration”.  

4. This point of interpretation has been established by authority which I would respectfully follow.  In Dib v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 489, Einfeld J considered previous authority, and explained at p.495:

   In my opinion, the definition in reg 1.03 is capable of a variety of interpretations depending upon what factors are taken into consideration and therefore cannot be applied without additional qualification.  In other words, commercial, social, domestic or altruistic motivations may, in the context of all the facts of a case, assist in determining whether a particular activity undertaken voluntarily is one that ordinarily attracts remuneration.  For example, a person visiting his brother and family may help in painting his brother’s house.  Because house‑painting is often “work” performed for remuneration does not mean that it is not also undertaken as a domestic activity by the owners of the house being painted or by their relatives or friends.  Similarly, a son or daughter of the owner of a car may receive pocket money or some assistance in kind, such as the periodic use of the car, in return for washing it every week, or may receive nothing other than the gratitude of the relevant parent.  Gardening or other household tasks may be done on the same basis.  That this type of activity may also be done for reward by a professional car washer, gardener or domestic assistant where it is undoubtedly “work” does not mean that when done by the sons or daughters, it is “work” in the relevant sense by them. 

   Thus to determine whether in a particular circumstance the painting of a house or other like activity constitutes “work”, all the facts peculiar to the case are to be taken into account and the considerations outlined in Montero and subsequent cases may be used to assist in the determination. If this undertaking is not performed, the definition in reg 1.03 cannot be applied consistently or sensibly to situations that do not fall exclusively into one of the two possibilities.

5. Stone J followed and explained this reasoning in Tikoisuva v Minister for Immigration & Multicultural Affairs [2001] FCA 1347 at [11]:

   Accordingly, in considering whether the domestic assistance that the applicant proposed to render to her brother would constitute “work”, the MRT was required to decide if such assistance is an activity that normally attracts remuneration.  I understand Einfeld J’s reference to “additional qualification” to mean that context (or motivation) may influence how the activity is described.  His Honour’s point seems to be that house painting being done by a relative is a different activity from house painting being done by a professional painter.  Another example might be the difference between a spouse and a stranger to the family doing domestic chores of the kind contemplated by the applicant.  The MRT’s failure to consider this issue appears to be based on a misunderstanding of the meaning of “work” as interpreted by Einfeld J and was therefore an error of law, being either a failure to correctly interpret the applicable law or a failure to correctly apply the applicable law to the facts as found. 

6. Her Honour’s characterisation of the error is to be understood in terms of the Federal Court’s then jurisdiction under s.476 of the Migration Act. If such an error of law occurs which leads to a material failure to apply the correct interpretation of a visa criterion or condition, then this would also amount to jurisdictional error (c.f. Lobo v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 132 FCR 93 at [42]‑[62] and Minister for Immigration & Multicultural & Indigenous Affairs v SGLB (2004) 207 ALR 12 per Gummow and Hayne JJ at [51]).

7. The above cases illustrate error where the Tribunal failed to consider and take into account circumstantial facts relevant to characterising the “activity” actually being performed by the visa holder.  In both cases, the Tribunal thought that it was enough that the same activities would “normally attract remuneration” in different circumstances, disregarding significant circumstances explaining why a person in the visa holder’s situation would not normally expect or be given “remuneration” in return for their services.  As I have explained above, this represents a significant misconception of the legal effect of the definition, resulting in the Tribunal failing to take into account relevant matters, in the sense of considerations made legally essential by the relevant legislation. 

8. I consider that this has happened in the present case.  I consider that it is not possible to correctly apply the definition to the applicant’s activities without making findings upon and taking into account “all the facts peculiar to the case”.  The Tribunal, by its omission of relevant discussion, shows that it thought that it did not need to do this, and therefore has failed to exercise its jurisdiction according to law. 

9. On evidence which was not in doubt before the Tribunal, the applicant held a very significant investment in a business which he had been instrumental in establishing, in which he retained co‑ownership with a business partner, and which he had personal reasons for visiting.  Such a person would normally not be a “passive shareholder”, nor refrain from some “oversight” of the management of the business.  It is also likely that such a person would discuss the management of the business with his co‑proprietor.  However, I doubt whether the Tribunal could assume that a person in that situation would “normally” be paid remuneration.  Certainly, in my opinion, it could not arrive at that conclusion without investigating the actual extent and nature of the applicant’s involvement in management, and without considering the implications of his proprietary and personal interest in the business.  

10. Perhaps activities which can be described generally as an “involvement in management decisions and managerial oversight” might be found  “normally” to attract remuneration in some situations – particularly if the person lacks any other apparent motivation for taking an interest in the business.  However, this was not the applicant’s situation.  In my opinion the Tribunal failed to appreciate that it was necessary for it to apply the test of “normally attracts remuneration” to a person in the applicant’s situation, in particular, taking into account his proprietorship and other relationships to the business. 

11. For the above reasons, I consider that the applicant has established jurisdictional error affecting the decision of the Tribunal.  The Minister has not contended that there is any proper reason for refusing relief if I arrived at this conclusion.  The applicant is therefore entitled to orders for the issue of writs of certiorari and mandamus. 

I certify that the preceding twenty‑nine (29) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate:  Lilian Khaw

Date:  26 March 2007